Qualcomm
Annual Report 2013

Plain-text annual report

QUALCOMM INC/DE FORM 10-K (Annual Report) Filed 11/06/13 for the Period Ending 09/29/13 Address 5775 MOREHOUSE DR SAN DIEGO, CA 92121 8585871121 CIK 0000804328 Telephone Symbol QCOM SIC Code 3663 - Radio and Television Broadcasting and Communications Equipment Industry Semiconductors Sector Technology Fiscal Year 09/25 http://www.edgar-online.com © Copyright 2013, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.  UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) For the fiscal year ended September 29, 2013 OR For the transition period from to . Commission file number 0-19528 QUALCOMM Incorporated (Exact name of registrant as specified in its charter) Registrant’s telephone number, including area code: (858) 587-1121 Securities registered pursuant to section 12(b) of the Act: Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES (cid:1) NO (cid:3) Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES (cid:3) NO (cid:1) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES (cid:1) NO (cid:3) (cid:1) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (cid:3) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware (State or other jurisdiction of incorporation or organization) 95-3685934 (I.R.S. Employer Identification No.) 5775 Morehouse Drive San Diego, California (Address of principal executive offices) 92121-1714 (Zip Code) Title of Each Class Name of Each Exchange on Which Registered Common stock, $0.0001 par value NASDAQ Stock Market LLC Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES (cid:1) NO (cid:3) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:3) Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES (cid:3) NO (cid:1) The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant at March 31, 2013 was $113,760,527,188 , based upon the closing price as reported on the NASDAQ Global Select Market. The number of shares outstanding of the registrant’s common stock was 1,689,435,673 at November 4, 2013 . DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Definitive Proxy Statement to be filed with the Commission pursuant to Regulation 14A in connection with the registrant’s 2014 Annual Meeting of Stockholders, to be filed subsequent to the date hereof, are incorporated by reference into Part III of this Report. Large Accelerated Filer (cid:1) Accelerated Filer (cid:3) Non-Accelerated Filer (cid:3) (Do not check if a smaller reporting company) Smaller Reporting Company (cid:3)  QUALCOMM INCORPORATED Form 10-K For the Fiscal Year Ended September 29, 2013 Index Page PART I Item 1. Business 1 Item 1A. Risk Factors 12 Item 1B. Unresolved Staff Comments 22 Item 2. Properties 23 Item 3. Legal Proceedings 24 Item 4. Mine Safety Disclosures 25 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. Selected Financial Data 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 39 Item 8. Financial Statements and Supplementary Data 40 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 40 Item 9A. Controls and Procedures 41 Item 9B. Other Information 41 PART III Item 10. Directors, Executive Officers and Corporate Governance 41 Item 11. Executive Compensation 42 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 42 Item 13. Certain Relationships and Related Transactions, and Director Independence 42 Item 14. Principal Accounting Fees and Services 42 PART IV Item 15. Exhibits and Financial Statement Schedules 43  TRADEMARKS Qualcomm, QChat, Brew, Snapdragon, MSM, Plaza and Wireless Reach are trademarks of Qualcomm Incorporated, registered in the United States and other countries. Omnitracs is a trademark of Omnitracs, Inc., registered in the United States and other countries. Other products and brand names may be trademarks or registered trademarks of their respective owners.  In this document, the words “Qualcomm,” “we,” “our,” “ours” and “us” refer only to QUALCOMM Incorporated and its subsidiaries and not any other person or entity. This Annual Report (including, but not limited to, the section regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Annual Report. Additionally, statements concerning future matters such as the development of new products, enhancements or technologies, sales levels, expense levels and other statements regarding matters that are not historical are forward-looking statements. Although forward-looking statements in this Annual Report reflect our good faith judgment, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include without limitation those discussed under the heading “Risk Factors” below, as well as those discussed elsewhere in this Annual Report. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report. Readers are urged to carefully review and consider the various disclosures made in this Annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. PART I Item 1. Business We incorporated in 1985 under the laws of the state of California. In 1991, we reincorporated in the state of Delaware. We operate and report using a 52-53 week fiscal year ending on the last Sunday in September. Our 52-week fiscal years consist of four equal quarters of 13 weeks each, and our 53-week fiscal years consist of three 13-week fiscal quarters and one 14-week fiscal quarter. The financial results for our 53-week fiscal years and our 14-week fiscal quarters will not be exactly comparable to our 52-week fiscal years and our 13-week fiscal quarters. Both of the fiscal years ended September 29, 2013 and September 25, 2011 included 52 weeks. The fiscal year ended September 30, 2012 included 53 weeks. Overview We continue to lead the development and commercialization of a digital communication technology called CDMA (Code Division Multiple Access), and we own significant intellectual property applicable to products that implement any version of CDMA including patents, patent applications and trade secrets. The mobile communications industry generally recognizes that a company seeking to develop, manufacture and/or sell products that use CDMA technology will require a patent license from us. CDMA is one of the main technologies currently used in digital wireless communications networks (also known as wireless networks). CDMA and TDMA (Time Division Multiple Access), of which GSM (Global System for Mobile Communications) is the primary commercial form, are the primary digital technologies currently used to transmit a wireless device user’s voice or data over radio waves using a public cellular wireless network. We also continue our leading role in the development and commercialization of OFDMA (Orthogonal Frequency Division Multiple Access) -based technologies for which we own substantial intellectual property. Sales of multimode CDMA and LTE, which stands for “Long Term Evolution” and is an OFDMA-based standard for cellular wireless communication applications, wireless devices have grown significantly during the past several years. In addition to licensing portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products, we design, manufacture, have manufactured on our behalf and market products and services based on CDMA, OFDMA and other digital communications technologies. Our products principally consist of integrated circuits (also known as chips or chipsets) and system software used in mobile devices and in wireless networks. We also sell other products and services, which include: integrated circuits for use in wired devices, particularly broadband gateway equipment, desktop computers, televisions, set-top boxes and Blu-ray players; content enablement services to wireless operators; development, other services and related wireless communications products used by the United States government; location awareness and commerce services; and software and hardware development services. 1  The Mobile Communications Industry Mobile technology has seen significant growth and adoption since the first mobile phone call took place in 1973. The International Telecommunication Union (ITU) estimated that 90% of the world’s population lived in areas served by mobile network coverage as of 2010. As of September 30, 2013, there were approximately 6.8 billion cellular connections worldwide, comprised of approximately 3.2 billion unique individual cellular account holders, also known as subscribers (GSMA Intelligence estimates as of November 4, 2013). Information regarding wireless technologies used by the mobile industry is provided in the section entitled Wireless Technologies in this Annual Report. Key trends shaping the evolution and growth of the mobile industry include the expanding role of mobile as the leading computing platform and the shift from primarily voice-centric feature phones to data-centric smartphones; the evolution of technologies aimed at accommodating the increase of data usage; the use of wireless technologies for machine-to-machine (M2M) applications; and the advent of new mobile devices, applications and services that provide new user experiences. Mobile Computing. Due to the processing power and “always on” connectivity available in advanced mobile devices, consumers are opting to use their smartphones and tablets to perform tasks previously reserved for their personal computers, such as email, web-browsing, gaming and social networking. That preference is reflected in sales trends. More than twice as many smartphones and tablets were shipped globally in 2012 as compared to personal computers (Gartner and IDC, September 2013). Additionally, in 2012, semiconductor industry revenues for mobile phones surpassed those for personal computers for the first time (Gartner, April 2013). While some feature phones support Internet connectivity and other basic computing functions, the mobile industry is seeing a shift to smartphones. Global smartphone shipments reached approximately 700 million units in 2012, representing a year-over-year increase of approximately 44%, and smartphone shipments are projected to reach approximately 1.8 billion in 2017 (Gartner, September 2013). Growth is expected to be particularly strong in emerging regions, with a projected compound annual growth rate of smartphone shipments of approximately 30% between 2012 and 2017 (Gartner, September 2013). For many people, particularly in emerging regions where income levels may make purchasing a personal computer out of reach, the smartphone or tablet may be the first and only device that will be used to access the Internet and perform other computing functions. As smartphone and tablet shipments achieve increasing scale, the chipsets powering these devices are becoming an increasingly important differentiator to industry participants. To compete effectively, suppliers are seeking to strike a balance between performance, form factor (size and design) and battery life of devices. To achieve that, there is a trend toward chipsets that integrate many of the essential components of the mobile device into a unified and optimized system-on-a-chip (SOC), which includes a modem, a central processor (CPU), a graphics processing unit (GPU), multimedia support and other components that work together. Meeting the Needs for Increased Data. The large-scale adoption of smartphones and other connected devices is creating a significant increase in demand for data services. To meet this demand, mobile operators are deploying 3G/4G (third generation/fourth generation) networks and investing in a variety of strategies to increase the capacity and performance of their networks. The total number of 3G and multimode 3G/4G connections worldwide reached approximately 2.3 billion as of September 30, 2013, accounting for only approximately 34% of total cellular connections (GSMA Intelligence estimates as of November 4, 2013). Looking ahead, approximately 4.5 billion 3G and multimode 3G/4G connections are projected by 2017 (GSMA Intelligence estimates as of November 4, 2013). Globally, during the third calendar quarter of 2013, on average more than one million new 3G and multimode 3G/4G connections were being added every day (GSMA Intelligence estimates as of November 4, 2013). In emerging regions, 3G and multimode 3G/4G cellular connections account for more than three times the number of fixed broadband connections (GSMA Intelligence and WBIS, October 2013). Additional data demands are being placed on the networks as mobile technology is incorporated into new connected devices in a growing number of sectors including the consumer electronics, automotive, health and life sciences and utilities sectors. We refer to this as the “Internet of Everything.” To meet the increased demand for data, which we refer to as “the 1000x data challenge,” network operators are expected to deploy a variety of strategies (in addition to deploying 3G/4G technologies) aimed at increasing the performance and capacity of their networks. One key strategy is network densification, such as complementing existing cellular networks by deploying smaller sized, lower-power cellular base stations, commonly referred to as small cells. Another key focus is on more efficient use of spectrum. Some relief from network congestion caused by the demand for data is expected to come from the proliferation of peer-to-peer communications in which devices communicate directly with other devices without having to access the cellular network. Additional efficiencies are expected to come from the continuing evolution of 3G/4G and Wi-Fi technologies and the use of broadcast capabilities made possible by LTE broadcast technology. 2  New User Capabilities. There is a growing emphasis on finding ways to provide the ability to efficiently access, sense and control digital content and services. The evolution of mobile technology is expected to augment our senses, in effect creating what we refer to as the “digital 6th sense.” The industry is working on a variety of fronts toward this vision by investing in increased computing capabilities, enhanced connectivity and new ways for users to interact with technology. Among the areas of focus are peer-to-peer connectivity technologies, augmented reality and context awareness. Wireless Technologies The growth in the use of wireless devices worldwide, such as smartphones and tablets, and demand for data services and applications requires continuous innovation to further improve the user experience, enable new services and increase network capacity, make use of different frequency bands and enable dense network deployments. To meet these requirements, different wireless communications technologies continue to evolve. For over two decades, we have invested and continue to invest heavily in research and development of many of these cellular wireless communication technologies, including CDMA and OFDMA. As a result, we have developed and acquired (and continue to develop and acquire) significant related intellectual property. This intellectual property has been incorporated into the most widely accepted and deployed wireless communications technology standards, and we have licensed it to wireless device and infrastructure manufacturers (more than 250 licensees, including all leading manufacturers). Most of the cellular wireless technologies can be grouped into three categories. TDMA-based. TDMA-based technologies are characterized by their access method allowing several users to share the same frequency channel by dividing the signal into different time slots. Most of these systems are classified as 2G (second generation) technology. The main examples of TDMA-based technologies are GSM (deployed worldwide), IS-136 (deployed in the Americas) and Personal Digital Cellular (PDC) (deployed in Japan). Compared to the earlier generations of analog technologies, these digital communications technologies provided for significantly enhanced efficiency within a fixed spectrum, resulting in increased voice capacity. These technologies also enable enhanced services, such as SMS (short message service) texting service, as well as low-speed data services. GSM has evolved to support mobile packet data transmission, such as GPRS (General Packet Radio Service) and EDGE (Enhanced Data Rates for Global Evolution). According to GSMA Intelligence estimates as of November 4, 2013, there were approximately 4.4 billion GSM connections worldwide, representing approximately 65% of total cellular connections. CDMA-based. CDMA-based technologies are characterized by their access method allowing several users to share the same frequency and time by allocating different orthogonal codes to individual users. Most of the CDMA-based technologies are classified as 3G (third generation) technology. There are a number of variants of CDMA-based technologies deployed around the world, in particular CdmaOne, Cdma2000, EV-DO (Evolution Data Optimized), WCDMA (Wideband CDMA) and TD-SCDMA (Time Division - Synchronous CDMA) (deployed exclusively in China). Similar to other digital communications technologies, CDMA-based technologies provided vastly improved capacity for voice and low-rate data services as compared to analog technologies. The following are the CDMA-based technologies and their standards revisions: To date, these technologies have seen many revisions, and they continue to evolve, progressively offering higher capacity and data rates, improved user experiences and new applications and services. As these technologies continue to evolve, new features are being defined in their relevant standardization bodies, the 3rd Generation Partnership Project 2 (3GPP2) for CDMA2000 and 1xEV-DO and the 3rd Generation Partnership Project (3GPP) for WCDMA and TD-SCDMA. For simplicity, the releases of these technologies are often combined and given “marketing” or “trade” names that also indicate their benefits. One example is the 3GPP releases: Releases 5 and 6 together are called “HSPA- High Speed Packet Access.” The releases from 7 to 10 are called HSPA+, indicating that they provide performance improvements over HSPA. We refer to releases 11 and beyond as HSPA+ Advanced, again indicating improvements beyond the ones that HSPA+ offers. The naming convention also applies to the releases of CDMA2000, whose successive releases are grouped and referred to as CDMA2000 1X, 1x Advanced, as well as to 1xEV-DO, whose releases are called as EV-DO Rev. A, Rev. B and DO Advanced. CDMA technologies ushered in a significant increase in broadband data services and continue to grow rapidly. According to GSMA Intelligence estimates as of November 4, 2013, there were approximately 2.2 billion CDMA-based connections 3 • CDMA2000 revisions A through E • 1xEV-DO revisions A through C • WCDMA/HSPA releases 4 through 12 • TD-SCDMA releases 4 through 12  worldwide. As of the fourth quarter of calendar 2012, the first phases of 1x Advanced and DO Advanced, as well as up to the eighth release of HSPA+, were commercially launched. OFDMA-based. OFDMA-based technologies are characterized by their access method allowing several users to share the same frequency and time by allocating different subcarriers to individual users. Most of the OFDMA-based technologies are classified as 4G (fourth generation) technology. The primary OFDMA-based technology is LTE and is incorporated in 3GPP specifications starting from release 8. LTE has two modes, FDD (frequency division duplex) and TDD (time division duplex) to support paired and unpaired spectrum, respectively, and is being developed by 3GPP. The principal benefit of LTE is its ability to leverage wide swaths of spectrum (bandwidths of 10 MHz or more). LTE is designed to seamlessly interwork with 3G through multimode 3G/4G devices. Currently, LTE relies on 2G/3G for voice services across the network, as well as for ubiquitous data services outside LTE coverage area, and on 4G for data services inside the coverage area. LTE’s releases are often combined and given “marketing” or “trade” names that also indicate their benefits. The name LTE covers releases 8 and 9. Releases 10 and beyond are referred to as LTE Advanced. According to GSMA Intelligence estimates as of November 4, 2013, there were 144 million global 3G/4G multimode connections. The first step of LTE Advanced, referred to as carrier aggregation, was commercially launched in June 2013. Other Wireless Technologies. There are other non-cellular wireless technologies that have also been broadly adopted in mobile cellular devices. Wireless Local Area Networks. Wireless local area networks (WLAN, also known as Wi-Fi) link two or more devices using a wireless technology method and usually provide connectivity through an access point. WLAN systems have been standardized by the Institute of Electrical and Electronics Engineers (IEEE) standards committee in the various versions of 802.11, which include advanced features, such as multiple in/multiple out (MIMO), support for large bandwidth and support for different frequency bands and higher order modulation. Bluetooth. Bluetooth is a wireless personal area network that provides wireless connectivity between devices over short distances ranging from a few centimeters to a few meters. Bluetooth technology provides wireless connectivity to a wide range of fixed or mobile consumer electronics devices. Bluetooth functionalities are standardized by the Bluetooth Special Interest Group in various versions of the specification (from 1.0 to 4.0), which include different functionalities, such as enhanced data rate or low energy. Location positioning technologies. Location positioning technologies use satellite systems to provide accurate location of devices and primarily work outdoors, when devices have a clear view of the sky. Cell site assistance with location determination in addition to satellite system determination improves in-building performance. The device location can be used for navigation systems as well as location-based services (e.g., search results based on the location of the device). There are many satellite constellations in use or under development today. Global Positioning System (GPS) developed by the United States, GLONASS (Global Navigation Satellite System) developed by Russia and BeiDou developed by China are some examples of location position technology. Operating Segments We conduct business primarily through four reportable segments: QCT, QTL, QWI and QSI. QSI did not have revenues, or had negligible revenues, in all periods presented. Revenues in fiscal 2013, 2012 and 2011 for our other reportable segments were as follows (in millions, except percentage data): QCT (Qualcomm CDMA Technologies) Segment. QCT is a leading developer and supplier of integrated circuits and system software based on CDMA, OFDMA and other technologies for use in voice and data communications, networking, application processing, multimedia and global positioning system products. QCT’s integrated circuit products and system software are sold to and/or licensed to manufacturers that use our products in wireless devices, particularly mobile phones, 4 QCT QTL QWI 2013 $ 16,715 $ 7,554 $ 613 As a percent of total 67 % 30 % 2 % 2012 $ 12,141 $ 6,327 $ 633 As a percent of total 63 % 33 % 3 % 2011 $ 8,859 $ 5,422 $ 656 As a percent of total 59 % 36 % 4 %  tablets, laptops, data modules, handheld wireless computers and gaming devices, access points and routers, data cards and infrastructure equipment, and in wired devices, particularly broadband gateway equipment, desktop computers, televisions, set-top boxes and Blu-ray players. Our Mobile Station Modem (MSM) integrated circuits, which include the Mobile Data Modem, Qualcomm Single Chip and Qualcomm Snapdragon processor devices, perform the core baseband modem functionality in wireless devices providing voice and data communications, as well as multimedia applications and global positioning functions. Our Snapdragon processors provide advanced application and graphics processing capabilities. QCT’s system software enables the other device components to interface with the integrated circuit products and is the foundation software enabling manufacturers to develop devices utilizing the functionality within our integrated circuits. Because of our experience in designing and developing CDMA- and OFDMA-based products, we design both the baseband integrated circuit and the supporting system as well, including the RF (Radio Frequency) devices, PM (Power Management) devices and accompanying software products. This approach enables us to optimize the performance of the wireless device with improved product features and integration with the network system. We also provide support, including reference designs and tools, to enable our customers to reduce the time required to design their products and bring their products to market faster. We plan to add additional features and capabilities to our integrated circuit products to help our customers reduce the cost and size of their products, to simplify our customers’ design processes and to enable more wireless devices and services. QCT offers a broad portfolio of products, including both wireless device and infrastructure integrated circuits, in support of CDMA2000 1X and 1xEV-DO, as well as the EV-DO Revision A/B evolutions of CDMA 2000 technology. Leveraging our expertise in CDMA, we also develop and offer integrated circuits supporting the WCDMA version of 3G for manufacturers of wireless devices. More than 80 device manufacturers have selected our WCDMA products that support GSM/GPRS, WCDMA, HSDPA (High-Speed Downlink Packet Access), HSUPA (High-Speed Uplink Packet Access) and HSPA+ for their devices. QCT also sells multimode products for the LTE standard, which offer seamless backward compatibility to existing 3G technologies. Our integrated circuit products are included in a broad range of devices, from low-tier, entry-level devices for emerging regions, which may use our Qualcomm Reference Design (QRD) products, to premium-tier devices. In fiscal 2013, QCT shipped approximately 716 million MSM integrated circuits for wireless devices worldwide as compared to approximately 590 million and 483 million in fiscal 2012 and 2011, respectively. Our modems are built to work with increasingly complex networks. They support the latest communication technologies and adapt to network conditions and user needs in real time to enable delivery of faster, smoother data and voice connections. Our 3G/4G modem roadmap delivers the latest network technologies across multiple product tiers and devices. This roadmap is the result of our years of research into emerging network standards and the development of chipsets that take advantage of these new standards, while maintaining backward compatibility with existing standards. Each Snapdragon processor is a highly integrated, mobile optimized system on a chip incorporating our advanced technologies, including a high performance CPU, digital signal processor (DSP), GPU and modem, multimedia subsystems, including audio, high-definition video and camera capabilities, and highly accurate location positioning engines. Our CPU cores are designed to deliver high levels of compute performance at low power, allowing manufacturers to design slim and powerful devices with longer battery life between charges. Our GPUs are also designed to deliver graphics performance for visually rich 3D gaming and user interfaces. The heterogeneous compute architecture of our Snapdragon processors is designed to ensure that the CPU, DSP and GPU work efficiently together, each being powered up and utilized only when needed, which enhances the processing capacity, speed and efficiency of our Snapdragon processors and provides longer battery life of the devices using our processors. Most Snapdragon processors also incorporate our modem technology for advanced mobile broadband. Our wireless products also consist of integrated circuits and system software for WLAN, Bluetooth, frequency modulation (FM) and near field communications (NFC) as well as technologies that enable location data and services, including GPS, GLONASS and BeiDou. Our wireless technologies are provided in the form of WLAN; Bluetooth and FM products, for which the technologies are integrated into the cellular modem and combined with a companion RF chip; WLAN and Bluetooth combination chips; and stand-alone products. Our wired connectivity products consist of integrated circuits and software for Ethernet and Powerline networks. Our wired portfolio enables delivery of richer, comprehensive multi-connectivity product platforms to our networking, computing and consumer electronics customer base. We also developed the combination of WLAN, Powerline and Ethernet technologies to deliver hybrid networking platforms designed for home, known as Hi-Fi products. The technology has now evolved to become the multiple-physical layer (multi-PHY) networking standard known as the IEEE 1905.1. QCT utilizes a fabless production model, which means that we do not own or operate foundries for the production of silicon wafers from which our integrated circuits are made. Integrated circuits are die cut from silicon wafers that have been assembled into packages or modules and have completed the final test manufacturing processes. Die cut from silicon wafers are the essential components of all of our integrated circuits and a significant portion of the total integrated circuit cost. We employ both turnkey and two-stage manufacturing models to purchase our integrated circuits. Turnkey is when our foundry suppliers are responsible for delivering fully assembled and tested integrated circuits. Under the two-stage manufacturing model, we 5  purchase wafers and die from semiconductor manufacturing foundries and contract with separate third-party suppliers for probe, assembly and test services. We rely on independent third-party suppliers to perform the manufacturing and assembly, and most of the testing, of our integrated circuits based primarily on our proprietary designs and test programs. Our suppliers also are responsible for the procurement of most of the raw materials used in the production of our integrated circuits, which we believe are currently generally available. The primary foundry suppliers for our various digital, analog/mixed-signal, RF and PM integrated circuits are Global Foundries Inc., International Business Machines Corporation, Samsung Electronics Co. Ltd., Semiconductor Manufacturing International Corporation, Taiwan Semiconductor Manufacturing Company and United Microelectronics Corporation. The primary semiconductor assembly and test suppliers are Advanced Semiconductor Engineering, Amkor Technology, Siliconware Precision Industries and STATSChipPAC. The majority of our foundry and subcontract assembly and test suppliers are located in the Asia-Pacific region. QCT’s sales are primarily made through standard purchase orders for delivery of products. QCT generally allows customers to reschedule delivery dates within a defined time frame and to cancel orders prior to shipment with or without payment of a penalty, depending on when the order is canceled. The market in which QCT operates is intensely competitive. QCT competes worldwide with a number of United States and international designers and manufacturers of semiconductors. As a result of global expansion by foreign and domestic competitors, technological changes, device manufacturer concentrations and the potential for further industry consolidation, we anticipate the market to remain very competitive. We believe that the principal competitive factors for our products may include performance, level of integration, quality, compliance with industry standards, price, time-to-market, system cost, design and engineering capabilities, new product innovation and customer support. QCT also competes in both single- and dual-mode environments against alternative communications technologies including, but not limited to, GSM/GPRS/EDGE, TDMA and TD-SCDMA. QCT’s current competitors include, but are not limited to, companies such as Broadcom, Ericsson, HiSilicon Technologies, Intel, Lantiq, Marvell Technology, Maxim Integrated Products, MediaTek, nVidia, Realtek Semiconductor, Samsung Electronics, Spreadtrum Communications, Texas Instruments and VIA Telecom. QCT also faces competition from internally developed products by our customers, including some of our largest customers, and from some early-stage companies. Our competitors devote significant amounts of their financial, technical and other resources to develop and market competitive products and, in some cases, to develop and adopt competitive digital communication or signal processing technologies, and those efforts may materially and adversely affect QCT. Moreover, some of these current and potential competitors have advantages over us that include, among others: motivation by our customers in certain circumstances to find alternate suppliers; foreign government support of other technologies or competitors; more extensive relationships with local distribution companies and original equipment manufacturers in emerging geographic regions (e.g., China); lower cost structures; and/or a more established presence in certain device markets. QTL (Qualcomm Technology Licensing) Segment. QTL grants licenses or otherwise provides rights to use portions of our intellectual property portfolio, which, among other rights, includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products, including, without limitation, products implementing CDMA2000, WCDMA, CDMA TDD (including TD-SCDMA), GSM/GPRS/EDGE and/or OFDMA (including LTE) standards and their derivatives. Our licensees manufacture wireless products, such as mobile devices, also known as subscriber units, which include handsets, other consumer devices (e.g., tablets, personal computers, e-readers, personal navigation devices), machine-to-machine devices (e.g., telematics devices, meter reading devices) and plug-in end user data modem cards, certain embedded modules for incorporation into end user products, the infrastructure equipment required to establish and operate a network, and equipment to test networks and subscriber units. QTL licensing revenues are comprised of license fees as well as royalties based on worldwide sales by licensees of products incorporating or using our intellectual property. License fees are fixed amounts paid in one or more installments. Royalties are generally based upon a percentage of the wholesale (i.e., licensee’s) selling price of complete licensed products, net of certain permissible deductions (e.g., certain shipping costs, packing costs, VAT, etc.). Revenues generated from royalties are subject to quarterly and annual fluctuations. The vast majority of QTL revenues have been generated through our licensees’ sales of CDMA2000- and WCDMA-based products, such as feature phones and smartphones. Separate and apart from licensing manufacturers of wireless products and devices and network equipment, we have entered into certain arrangements with competitors of our QCT segment, such as Broadcom, Fujitsu, MediaTek, NEC, Texas Instruments and VIA Telecom. A principal purpose of these arrangements is to provide our QCT segment and the counterparties certain freedom of operation with respect to each party’s integrated circuits business. In every case, these agreements expressly reserve the right for QTL to seek royalties from the customers of such integrated circuit suppliers with respect to such suppliers’ customers’ sales of CDMA-, WCDMA- and OFDMA-based wireless devices into which such suppliers’ integrated circuits are incorporated. We face competition in the development of intellectual property for future generations of digital wireless communications technology and services. On a worldwide basis, we currently compete primarily with the GSM/GPRS/EDGE digital wireless 6  communications technologies. GSM has been utilized extensively in Europe, much of Asia, other than Japan and South Korea, and certain other countries. To date, GSM has been more widely adopted than CDMA; however, CDMA technologies have been adopted for all 3G wireless systems. In addition, most GSM operators deployed GPRS, a packet data technology, as a 2G bridge technology, and a number of GSM operators deployed EDGE. However, the majority of GSM operators have already augmented their networks with 3G WCDMA and HSPA. According to the Global mobile Suppliers Association (GSA), as of October 2013, more than 220 wireless operators have commercially deployed and other wireless operators have started testing LTE, a multi-carrier transmission technique based on OFDMA technology. According to GSA, more than 420 wireless operators have committed to deploy LTE networks. We have invested in both the acquisition and the development of OFDMA technology and intellectual property. We expect that upon the initial deployment of OFDMA-based networks, the products implementing such technologies generally will be multimode and will also implement CDMA-based technologies. The licenses granted under our existing CDMA license agreements generally cover multimode CDMA/OFDMA (3G/4G) devices, and our licensees are obligated to pay royalties under their CDMA license agreements for such devices. Further, over 90 companies (including LG, Nokia, Samsung and ZTE) have royalty-bearing licenses under our patent portfolio for use in single-mode OFDMA products (which do not implement any CDMA-based standards). Since our founding in 1985, we have focused heavily on technology development and innovation. These efforts have resulted in a leading intellectual property portfolio related to, among other things, wireless technology. We have an extensive portfolio of United States and foreign patents, and we continue to pursue patent applications around the world. Our patents have broad coverage in many countries, including Brazil, China, India, Japan, South Korea, Taiwan and countries in Europe and elsewhere. A substantial portion of our patents and patent applications relate to digital wireless communications technologies, including patents that are essential or may be important to the commercial implementation of CDMA2000, WCDMA (UMTS), TD-SCDMA, TD-CDMA and OFDMA products. Because all commercially deployed forms of CDMA and their derivatives require the use of our patents, our patent portfolio is the most widely and extensively licensed portfolio in the industry with over 250 licensees. Over the years, a number of companies have challenged our patent position, but at this time, companies in the mobile communications industry generally recognize that any company seeking to develop, manufacture and/or sell subscriber units or infrastructure equipment that use CDMA and/or OFDMA technologies will require a license or other rights to use our patents. As part of our strategy to generate licensing revenues that continue to support our research and development investments and support worldwide adoption of our CDMA, OFDMA and other technologies, we provide rights to design, manufacture and sell products utilizing certain portions of our intellectual property to other companies. We have licensed or otherwise provided rights to use our patented technologies to interested companies on terms that are fair, reasonable and non-discriminatory. Unlike some other companies in our industry that hold back certain key technologies, we offer interested companies essentially our entire patent portfolio for use in cellular subscriber devices and cell site infrastructure equipment. Our strategy to make our patented technologies broadly available has been a catalyst for industry growth, helping to enable a wide range of companies offering a broad array of wireless products and features while increasing the capabilities of and/or driving down average and low-end selling prices for 3G handsets and other wireless devices. By licensing or otherwise providing rights to use our patented technologies to a wide range of equipment manufacturers, encouraging innovative applications, supporting equipment manufacturers with integrated chipset and software products, and focusing on improving the efficiency of the airlink for wireless operators, we have helped 3G CDMA evolve, grow and reduce device pricing all at a faster pace than the 2G technologies that preceded it (e.g., GSM). Standards bodies have been informed that we hold patents that might be essential for all 3G standards that are based on CDMA. We have committed to such standards bodies that we will offer to license our essential patents for these CDMA standards on a fair, reasonable and non-discriminatory basis. We have also informed standards bodies that we hold patents that might be essential for certain standards that are based on OFDMA technology (e.g., 802.16e, 802.16m and LTE (including FDD and TDD versions)) and have committed to offer to license our essential patents for these OFDMA standards on a fair, reasonable and non-discriminatory basis. Our license agreements generally provide us rights to use certain of our licensees’ technology and intellectual property to manufacture and sell certain components (e.g., Application-Specific Integrated Circuits) and related software, subscriber units and/or infrastructure equipment. In most cases, our use of our licensees’ technology and intellectual property does not require us to pay royalties based on the sale of our products. However, under some of the licenses, if we incorporate certain of our licensees’ licensed technology or intellectual property into certain of our products, we are obligated to pay royalties on the sale of such products. 7  QWI (Qualcomm Wireless & Internet) Segment. The four divisions aggregated into QWI are: Omnitracs Division . Omnitracs designs, manufactures and sells equipment, licenses software and provides services to our customers to manage their assets, products and workforce. Omnitracs offers satellite- and terrestrial-based two-way wireless information and position location services to transportation and logistics fleets that enable customers to track the location and monitor performance of their assets, communicate with their personnel and collect data. On August 21, 2013, we entered into a definitive agreement under which we agreed to sell the North and Latin American operations of Omnitracs to a U.S.-based private equity firm for $800 million in cash, subject to the terms and conditions of the definitive agreement. The transaction is subject to customary closing conditions, including receipt of regulatory approvals, and is expected to close in the first quarter of fiscal 2014. QIS (Qualcomm Internet Services) Division. QIS provides software products and content enablement services to wireless operators worldwide to support and accelerate the growth and advancement of wireless data products and services. We offer Brew and Plaza platform products and services for wireless applications development, device configuration, application distribution and billing and payment. Our QChat product enables one-to-one (private) and one-to-many (group) push-to-talk (PTT) calls over 3G networks. QGOV (Qualcomm Government Technologies) Division. QGOV provides development and other services and related products involving wireless communications technologies to U.S. government agencies and their contractors. Based on the percentage of QGOV revenues to our total consolidated revenues, no government agencies or their contractors are major customers. QRS (Qualcomm Retail Solutions) Division. QRS, our retail services business, builds and manages software applications that enable certain mobile location-awareness and commerce services. QSI (Qualcomm Strategic Initiatives) Segment. QSI makes strategic investments that we believe may open new or expand opportunities for our technologies, support the design and introduction of new products and services for voice and data communications or possess unique capabilities or technology. Many of these strategic investments are in early-stage companies. QSI also holds wireless spectrum. As part of our strategic investment activities, we intend to pursue various exit strategies from each of our QSI investments in the future. Other Businesses. Nonreportable segments are comprised of our QMT (Qualcomm MEMS Technologies) division and other display, wireless technology and services initiatives that include, but are not limited to: low power consumption, high optical performance flat display modules; medical device connectivity and related data management; augmented reality; and device-to-device communication. QMT continues to develop an interferometric modulator (IMOD) display technology based on micro-electro-mechanical-systems (MEMS) structure combined with thin film optics. Seasonality. Many of our products or intellectual property are incorporated into consumer wireless devices, which are subject to seasonality and other fluctuations in demand. As a result, QCT has tended historically to have stronger sales toward the end of the calendar year as manufacturers prepare for major holiday selling seasons, and QTL has tended to record higher royalty revenues in the first calendar quarter when licensees report their sales made during the fourth calendar quarter. These seasonal trends may or may not continue in the future. Additional information regarding our operating segments is provided in the notes to our consolidated financial statements in this Annual Report in “Notes to Consolidated Financial Statements, Note 8. Segment Information.” Corporate Structure We operate our businesses through our parent company, QUALCOMM Incorporated, and multiple direct and indirect subsidiaries. We have developed our corporate structure in order to address various legal, regulatory, tax, contractual compliance, operations and other matters. At the beginning of fiscal 2013, we completed a corporate reorganization in which certain assets of QUALCOMM Incorporated, as well as the stock of certain of its direct and indirect subsidiaries, were contributed to its wholly-owned subsidiary Qualcomm Technologies, Inc. (QTI). QTL continues to be operated by QUALCOMM Incorporated, which continues to own the vast majority of our patent portfolio. Substantially all of our products and services businesses, including QCT, and substantially all of our engineering, research and development functions, are operated by QTI and its subsidiaries. Neither QTI nor any of its subsidiaries has any right, power or authority to grant any licenses or other rights under or to any patents owned by QUALCOMM Incorporated. 8  Revenue Concentrations, Significant Customers and Geographical Information Consolidated revenues from international customers and licensees as a percentage of total revenues were 97%, 95% and 94% in fiscal 2013 , 2012 and 2011 , respectively. During fiscal 2013 , 49% , 20% and 11% of our revenues were from customers and licensees based in China, South Korea and Taiwan, respectively, as compared to 42% , 22% and 14% during fiscal 2012 , respectively, and 32% , 19% and 17% during fiscal 2011 , respectively. We distinguish revenues from external customers by geographic areas based on the location to which our products, software or services are delivered, or for QTL licensing revenues, the invoiced addresses of our licensees. Additional geographic information is provided in the notes to our consolidated financial statements in this Annual Report in “Notes to Consolidated Financial Statements, Note 8. Segment Information.” A small number of customers/licensees historically have accounted for a significant portion of our consolidated revenues. In fiscal 2013 , 2012 and 2011 , revenues from Samsung Electronics constituted more than 10% of consolidated revenues; in fiscal 2013 and 2012, revenues from Hon Hai Precision Industry Co., Ltd./Foxconn, its affiliates and other suppliers to Apple Inc. constituted more than 10% of consolidated revenues; and in fiscal 2011 , revenues from HTC constituted more than 10% of consolidated revenues. Research and Development The communications industry is characterized by rapid technological change, requiring a continuous effort to enhance existing products and technologies and to develop new products and technologies. We have significant engineering resources, including engineers with substantial expertise in CDMA, OFDMA and a broad range of other technologies. Using these engineering resources, we expect to continue to invest in research and development in a variety of ways in an effort to extend the demand for our products and services, including developing new versions of CDMA, OFDMA and other technologies, developing alternative technologies for certain specialized applications, participating in the formulation of new voice and data communication standards and technologies and assisting in deploying digital voice and data communications networks around the world. Our research and development team has a demonstrated track record of innovation in voice and data communication technologies. Our research and development expenditures in fiscal 2013, 2012 and 2011 totaled approximately $5.0 billion , $3.9 billion and $3.0 billion , respectively, and as a result, we continue to expand and enhance our products, services and intellectual property portfolios. We develop, commercialize and actively support 3G CDMA-based technologies, including CDMA2000 1X, 1xEV-DO, EV-DO Revision A, EV-DO Revision B, 1x Advanced, WCDMA, HSDPA, HSUPA and HSPA+, as well as OFDMA-based LTE technologies, products and network operations, to grow our royalty and integrated circuit and related software revenues. From time to time, we also make acquisitions to meet certain technology needs, to obtain development resources or to pursue new business opportunities. We make investments to provide our integrated circuit customers with chipsets designed on leading-edge technology nodes that combine multiple technologies for use in consumer devices, including smartphones, consumer electronics and other devices. In addition to 3G and 4G LTE technologies, our chipsets support other wireless and wired connectivity technologies, including WLAN, Bluetooth, Ethernet, GPS, GLONASS and Powerline Communication. Our integrated chipsets often include multiple technologies, including advanced multimode modems, application processors and graphics engines, as well as the tools to connect these diverse technologies. We continue to support Android, Windows Phone/RT and other mobile client software environments in our chipsets. We develop on our own, and with our partners, innovations that are integrated into our product portfolio to further expand the opportunity for wireless communications and enhance the value of our products and services. These innovations are expected to enable our customers to improve the performance or value of their existing services, offer these services more affordably and introduce revenue-generating broadband data services ahead of their competition. We have research and development centers in various locations throughout the world that support our global development activities and ongoing efforts to advance CDMA, OFDMA and a broad range of other technologies. We continue to use our substantial engineering resources and expertise to develop new technologies, applications and services and make them available to licensees to help grow the communications industry and generate new or expanded licensing opportunities. In addition to internally sponsored research and development, we perform contract research and development for various government agencies and commercial contractors. We continue to develop our interferometric modulator (IMOD) and other display technologies. We intend to license our next generation IMOD display technology, while we continue to develop and directly commercialize certain IMOD consumer-targeted mobile products. Our IMOD display technology, based on a micro-electro-mechanical-systems (MEMS) structure 9  combined with thin film optics, is intended to provide performance and power consumption benefits as compared to other display technologies. We make investments across a broad spectrum of opportunities that leverage our existing technical and business expertise to deploy new business models and enter into new industry segments, such as technologies to address the growth of mobile data traffic, including 3G/LTE and Wi-Fi products designed for implementation of small cells, which can be used by carriers to extend the capacity of licensed and unlicensed wireless spectrum and the 1000x data challenge; wireless charging; proximity-based communications; very high speed connectivity; mobile location awareness and commerce; mobile health; wearable technology; gaming; and products for the connected home, the digital 6th sense and the Internet of Everything. Sales and Marketing Sales and marketing activities of our operating segments are discussed under Operating Segments. Other marketing activities include public relations, advertising, web-marketing, participation in technical conferences and trade shows, development of business cases and white papers, competitive analyses, industry intelligence and other marketing programs, such as marketing development funds with our customers. Our Corporate Marketing department provides company information on our Internet site and through other media regarding our products, strategies and technology to industry analysts and for publications. Competition Competition faced by our operating segments is discussed under Operating Segments. Competition in the communications industry throughout the world continues to increase at a rapid pace as consumers, businesses and governments realize the potential of wireless communications products and services. We have facilitated competition in the wireless communications industry by licensing our technologies to, and therefore enabling, a large number of manufacturers. Although we have attained a significant position in the industry, many of our current and potential competitors may have advantages over us, which include, among others, motivation by our customers in certain circumstances to find alternate suppliers or choose alternate technologies and foreign government support of other technologies (e.g., GSM) or our competitors. In addition, our competitors may have established more extensive relationships with local distribution and original equipment manufacturer companies in emerging geographic regions (e.g., China) or a more established presence in certain device markets. These relationships may affect customers’ decisions to purchase products or license technology from us. Accordingly, new competitors or alliances among competitors could emerge and rapidly acquire significant market positions to our detriment. We expect to continue to face competition throughout the world as new technologies and services are introduced in the future and as additional companies compete with our products or services based on 3G, 4G or other technologies. Although we intend to continue to make substantial investments in developing new products and technologies and improving existing products and technologies, our competitors may introduce alternative products, services or technologies that threaten our business. It is also possible that the price we charge for our products and services may continue to decline as competition continues to intensify. Corporate Responsibility We strive to better our local and global communities through ethical business practices, socially empowering technology applications, educational and environmental programs and employee diversity and volunteerism. 10 • Our Governance. We aim to demonstrate accountability, transparency, integrity and ethical business practices throughout our operations and interactions with our stakeholders. • Our Products. We strive to meet or exceed industry standards for product responsibility and supplier management. • Our Workplace. We endeavor to provide a safe and healthy work environment where diversity is embraced and various opportunities for training, growth, and advancement are strongly encouraged for all employees. • Our Community. We have strategic relationships with a wide range of local organizations and programs that develop and strengthen communities worldwide. • Our Environment. We aim to expand our operations while minimizing our carbon footprint, conserving water and reducing waste. • Wireless Reach. We invest in projects that foster entrepreneurship, aid in public safety, enhance delivery of health care, enrich teaching and learning and improve environmental sustainability through the use of 3G and next-generation technologies.  Employees At September 29, 2013 , we employed approximately 31,000 full-time, part-time and temporary employees. During fiscal 2013 , the number of employees increased by approximately 4,300, primarily due to increases in engineering resources. Available Information Our Internet address is www.qualcomm.com. There we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC). We also make available on our Internet site public financial information for which a report is not required to be filed with or furnished to the SEC. Our SEC reports and other financial information can be accessed through the investor relations section of our Internet site. The information found on our Internet site is not part of this or any other report we file with or furnish to the SEC. Executive Officers Our executive officers (and their ages at September 29, 2013 ) are as follows: Paul E. Jacobs, age 50, has served as Chairman of the Board of Directors since March 2009, as a director since June 2005 and as Chief Executive Officer since July 2005. He served as Group President of QWI from July 2001 to June 2005. In addition, he served as Executive Vice President from February 2000 to June 2005. Dr. Jacobs was a director of A123 Systems, Inc. from November 2002 to July 2012. Dr. Jacobs holds a B.S. degree in Electrical Engineering and Computer Science, an M.S. degree in Electrical Engineering and a Ph.D. degree in Electrical Engineering and Computer Science from the University of California, Berkeley. Steven R. Altman, age 52, has served as Vice Chairman since November 2011. He served as President from July 2005 to November 2011, as Executive Vice President from November 1997 to June 2005 and as President of QTL from September 1995 to April 2005. Mr. Altman has been a director of Ubiquiti Networks, Inc. since October 2013 and DexCom, Inc. since November 2013. Mr. Altman holds a B.S. degree in Police Science and Administration from Northern Arizona University and a J.D. degree from the University of San Diego. Mr. Altman will retire from Qualcomm effective January 3, 2014. Derek K. Aberle, age 43, has served as Executive Vice President and Group President since November 2011. He served as Executive Vice President and President of QTL from September 2008 to November 2011 and as Senior Vice President and General Manager of QTL from October 2006 to September 2008. Mr. Aberle joined Qualcomm in December 2000 and prior to October 2006 held positions ranging from Legal Counsel to Vice President and General Manager of QTL. Mr. Aberle holds a B.A. degree in Business Economics from the University of California, Santa Barbara and a J.D. degree from the University of San Diego. Cristiano R. Amon, age 43, has served as Executive Vice President, Qualcomm Technologies, Inc. and Co-President of QCT since October 2012. He served as Senior Vice President, Qualcomm Incorporated and Co-President of QCT from June 2012 to October 2012, as Senior Vice President, QCT Product Management from October 2007 to June 2012 and as Vice President, QCT Product Management from September 2005 to October 2007. Mr. Amon joined Qualcomm in 1995 as an engineer and throughout his tenure at Qualcomm held several other technical and leadership roles. Mr. Amon holds a B.S. degree in Electrical Engineering from UNICAMP, the State University of Campinas, Brazil. George S. Davis, age 55, has served as Executive Vice President and Chief Financial Officer since March 2013. Prior to joining Qualcomm, Mr. Davis was Chief Financial Officer of Applied Materials, Inc., a provider of equipment, services and software for the manufacture of advanced semiconductor, flat panel displays and solar photovoltaic products, from November 2006 to March 2013. Mr. Davis held several other leadership roles at Applied Materials from November 1999 to November 2006. Prior to joining Applied Materials, Mr. Davis served 19 years with Atlantic Richfield Company, a global oil, gas and chemical company, in a number of finance and other corporate positions. Mr. Davis holds a B.A. degree in Economics and Political Science from Claremont McKenna College and an M.B.A. degree from the University of California, Los Angeles. Andrew M. Gilbert, age 50, has served as Executive Vice President, Qualcomm Europe, Inc. and European Innovation Development since January 2011. He served as Executive Vice President and President of Qualcomm Europe from September 2010 to January 2011, as Executive Vice President and President of QIS and Qualcomm Europe from May 2009 to September 2010 and as Executive Vice President and President of QIS, our former MFT division and Qualcomm Europe from January 2008 to May 2009. He served as Senior Vice President and President of Qualcomm Europe from November 2006 to January 2008 and as President of Qualcomm Europe from February 2006 to November 2006. Mr. Gilbert joined Qualcomm in January 2006 as Vice President of Qualcomm Europe. Prior to joining Qualcomm, he served as Vice President and General 11  Manager of Flarion Technologies, Inc.’s European, Middle Eastern and African regions from May 2002 to January 2006. Mr. Gilbert will retire from Qualcomm effective December 30, 2013. Matthew S. Grob, age 47, has served as Executive Vice President, Qualcomm Technologies, Inc. and Chief Technology Officer since October 2012. He served as Executive Vice President, Qualcomm Incorporated and Chief Technology Officer from July 2011 to October 2012 and as Senior Vice President, Engineering from July 2006 to July 2011. Mr. Grob joined Qualcomm in August 1991 as an engineer and throughout his tenure at Qualcomm held several other technical and leadership roles. Mr. Grob holds a B.S. degree in Electrical Engineering from Bradley University and an M.S. degree in Electrical Engineering from Stanford University. Margaret “Peggy” L. Johnson, age 51, has served as Executive Vice President, Qualcomm Technologies, Inc. and President of Global Market Development since October 2012. She served as Executive Vice President, Qualcomm Incorporated and President of Global Market Development from January 2011 to October 2012. She served as Executive Vice President of the Americas and India from January 2008 to January 2011 and as Executive Vice President since December 2006. She served as President of our former MFT division from December 2005 to January 2008 and as President of QIS from July 2001 to January 2008. She served as Senior Vice President and General Manager of QIS from September 2000 to July 2001. Ms. Johnson has been a director of Live Nation Entertainment, Inc. since June 2013. Ms. Johnson holds a B.S. degree in Electrical Engineering from San Diego State University. James P. Lederer, age 53, has served as Executive Vice President, Qualcomm Technologies, Inc. and General Manager of QCT since October 2012. He served as Executive Vice President, Qualcomm Incorporated and General Manager of QCT from May 2009 to October 2012, as Executive Vice President, QCT Business Planning and Finance from May 2008 to May 2009 and as Senior Vice President, Finance from April 2005 to May 2008. Mr. Lederer joined Qualcomm in 1997 as Senior Manager, Corporate Finance and throughout his tenure at Qualcomm held several other finance and leadership roles. Mr. Lederer holds a B.S. degree in Business Administration (Finance/MIS) and an M.B.A. degree from the State University of New York at Buffalo. Mr. Lederer will retire from Qualcomm effective January 3, 2014. Steven M. Mollenkopf, age 44, has served as President and Chief Operating Officer since November 2011. He served as Executive Vice President and Group President from September 2010 to November 2011, as Executive Vice President and President of QCT from August 2008 to September 2010, as Executive Vice President, QCT Product Management from May 2008 to July 2008, as Senior Vice President, Engineering and Product Management from July 2006 to May 2008 and as Vice President, Engineering from April 2002 to July 2006. Mr. Mollenkopf joined Qualcomm in 1994 as an engineer and throughout his tenure at Qualcomm held several other technical and leadership roles. Mr. Mollenkopf holds a B.S. degree in Electrical Engineering from Virginia Tech and an M.S. degree in Electrical Engineering from the University of Michigan. Venkata S.M. “Murthy” Renduchintala, age 48, has served as Executive Vice President, Qualcomm Technologies, Inc. and Co-President of QCT since October 2012. He served as Senior Vice President, Qualcomm Incorporated and Co-President of QCT from June 2012 to October 2012, as Senior Vice President, QCT Engineering from October 2007 to June 2012 and as Vice President, QCT Engineering from April 2004 to October 2007. Dr. Renduchintala holds a B.E. degree in Electrical Engineering, an M.B.A. degree and a Ph.D. degree in Digital Communication from the University of Bradford, United Kingdom. Donald J. Rosenberg, age 62, has served as Executive Vice President, General Counsel and Corporate Secretary since October 2007. He served as Senior Vice President, General Counsel and Corporate Secretary for Apple Inc. from December 2006 to October 2007. From May 1975 to November 2006, Mr. Rosenberg held numerous positions at IBM Corporation, including Senior Vice President and General Counsel. Mr. Rosenberg holds a B.S. degree in Mathematics from the State University of New York at Stony Brook and a J.D. degree from St. John’s University School of Law. Daniel L. Sullivan, age 62, has served as Executive Vice President of Human Resources since August 2001. He previously served as Senior Vice President of Human Resources from February 1996 to July 2001. Dr. Sullivan holds a B.S. degree in Communication from Illinois State University, an M.A. degree in Communication from West Virginia University and a Ph.D. degree in Communication from the University of Nebraska. James H. Thompson, age 49, has served as Executive Vice President, Engineering for Qualcomm Technologies, Inc. since October 2012. He served as Senior Vice President, Engineering for Qualcomm Incorporated from July 1998 to October 2012. Dr. Thompson joined Qualcomm in 1992 as a senior engineer and throughout his tenure at Qualcomm held several other technical and leadership roles. Dr. Thompson holds B.S., M.S. and Ph.D. degrees in Electrical Engineering from the University of Wisconsin. Item 1A. Risk Factors You should consider each of the following factors as well as the other information in this Annual Report in evaluating our business and our prospects. The risks and uncertainties described below are not the only ones we face. Additional risks and 12  uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. If any of the following risks actually occur, our business and financial results could be harmed. In that case, the trading price of our common stock could decline. You should also refer to the other information set forth in this Annual Report, including our financial statements and the related notes. Risks Related to Our Businesses Our revenues depend on the commercial deployment of CDMA, OFDMA and other communications technologies, continuing growth in our customers’ and licensees’ sales of products and services based on these technologies and our ability to continue to drive customer demand for our products and services based on these technologies. We develop, patent and commercialize technology and products based on CDMA, OFDMA and other communications technologies. We depend on our customers, licensees, operators of CDMA- and OFDMA-based wireless networks and other industries to use our technologies, and on the timing of their deployment of new products and services, and they may incur lower gross margins on products or services based on these technologies than on products and services based on alternative technologies. We also depend on our customers and licensees to develop products and services with value-added features to drive selling prices as well as consumer demand for new 3G and 3G/4G devices. Our revenues and/or growth in revenues could be negatively impacted, our business may be harmed and our substantial investments in these technologies may not provide us an adequate return, if: Our industry is subject to competition in an environment of rapid technological change that could result in decreased demand and/or declining average selling prices for our products and those of our customers and/or licensees and/or result in placing new specifications or requirements on our products, each of which could negatively affect our revenues and operating results. Our products, services and technologies face significant competition, and the revenues they generate or the timing of their deployment, which may depend on the actions of others, may not meet expectations. Competition in the communications industry is affected by various factors that include, among others: evolving industry standards and business models; evolving methods of transmission for voice and data communications; networking and connectivity trends; evolving nature of computing (including demand for always on, always connected capabilities); rapid technological change; value-added features that drive selling prices as well as consumer demand for new 3G and 3G/4G devices; turnkey, integrated products that incorporate hardware, software, user interface, applications and reference designs; rapid growth in mobile data consumption; device manufacturer concentrations; growth in emerging geographic regions; scalability; and the ability of the system technology to meet customers’ immediate and future network requirements. We anticipate that additional competitors will introduce products as a result of growth opportunities in wireless communications, the trend toward global expansion by foreign and domestic competitors, technological and public policy changes and relatively low barriers to entry in selected segments of the industry. Our future success will depend on, among other factors, our ability to: 13 • wireless operators and other industries deploy alternative technologies; • wireless operators delay 3G and/or 3G/4G multimode network deployments, expansions or upgrades and/or delay moving 2G customers to 3G, 3G/4G multimode or 4G wireless devices; • LTE, an OFDMA-based 4G wireless technology, is not more widely deployed or commercial deployment is delayed; • government regulators delay the reallocation of 2G spectrum to allow wireless operators to upgrade their networks to 3G, thereby restricting the expansion of 3G/4G wireless connectivity; • wireless operators are unable to drive improvements in 3G or 3G/4G multimode network performance and/or capacity; • our customers’ and licensees’ sales of products and services using these technologies, particularly premium-tier device products, do not grow or do not grow as quickly as anticipated; or • we are unable to drive the adoption of our products and services into networks and devices based on CDMA, OFDMA and other communications technologies. • develop innovative, differentiated integrated circuit products at competitive cost and price points for emerging and developed geographic regions and across device tiers (e.g., premium- and low-tier smartphones); • increase and/or accelerate demand for our integrated circuit products and drive their adoption into the most popular device models, particularly premium-tier models, and across a broad spectrum of devices, such as smartphones, tablets, e-readers, gaming devices and other mobile computing and connected devices; • strengthen our integrated circuit product roadmap for, and develop channel relationships in, emerging geographic regions, such as China and India, and provide turnkey products for low-tier smartphones;  Competition and/or the introduction and growth in sales of low-tier products, particularly relative to premium-tier products, may reduce average selling prices for our chipset products and the products of our customers and licensees. This dynamic is particularly pronounced in emerging geographic regions. Reductions in the average selling prices of our chipset products, without corresponding decreases in average unit costs, would negatively impact our margins. In addition, total royalties payable to us would generally decrease, negatively impacting our revenues, as a result of reductions in the average selling prices of our licensees’ products, unless offset by an increase in volumes. Companies that promote standards that are neither CDMA- nor OFDMA-based (e.g., GSM) as well as companies that design integrated circuits based on CDMA, OFDMA or their derivatives are generally competitors or potential competitors. Examples (some of which are strategic partners of ours in other areas) include Broadcom, Ericsson, Fujitsu, HiSilicon Technologies, Intel, Lantiq, Marvell Technology, Maxim Integrated Products, MediaTek, nVidia, Realtek Semiconductor, Samsung Electronics, Spreadtrum Communications, Texas Instruments and VIA Telecom. Some of these current and potential competitors have advantages over us that include, among others: motivation by our customers in certain circumstances to find alternate suppliers; foreign government support of other technologies or competitors; more extensive relationships with local distribution companies and original equipment manufacturers in emerging geographic regions (e.g., China); lower cost structures; and/or a more established presence in certain device markets. Certain of our software and our suppliers’ software may contain or may be derived from “open source” software, and we have seen, and believe we will continue to see, an increase in customers requesting that we develop products, including software associated with our integrated circuit products, that incorporate open source software elements and operate in an open source environment, which, under certain open source licenses, may offer accessibility to a portion of a product’s source code and may expose related intellectual property to adverse licensing conditions. Licensing of such software may impose certain obligations on us if we were to distribute derivative works of the open source software. For example, these obligations may require us to make source code for the derivative works available to our customers in a manner that allows them to make such source code available to their customers, or license such derivative works under a particular type of license that is different than what we customarily use to license our software. Developing open source products, while adequately protecting the intellectual property rights upon which our licensing business depends, may prove burdensome and time-consuming under certain circumstances, thereby placing us at a competitive disadvantage for new product designs. Also, our use and our customers’ use of open source software may subject our products and our customers’ products to governmental scrutiny and delays in product certification, which could cause customers to view our products as less desirable than our competitors’ products. While we believe we have taken appropriate steps and employed adequate controls to protect our intellectual property rights, our use of open source software presents risks that could have an adverse effect on these rights and on our business. We derive a significant portion of our consolidated revenues from a small number of customers and licensees. If revenues derived from these customers or licensees decrease or the timing of such revenues fluctuate, our operating results could be negatively affected. Our QCT segment derives a significant portion of revenues from a small number of customers, and we may be unable to further diversify our customer base. In addition, our industry is experiencing and may continue to experience an increasing 14 • be a preferred partner (and sustain preferred relationships) providing integrated circuit products that support multiple operating system platforms to the partners that effectively commercialize new devices using these platforms; • continue to be a leader in 4G technology evolution, including expansion of our OFDMA-based single mode licensing program, and continue to innovate and introduce 4G turnkey, integrated products and services that differentiate us from our competition; • be a leader serving original equipment manufacturers, high level operating systems (HLOS) providers, operators and other industry participants as competitors, new market entrants and other factors continue to affect the industry landscape; • increase and/or accelerate demand for our wired and wireless connectivity products, including networking products for consumers, carriers and enterprise equipment and connected devices; • become a leading supplier of small cell technology (which allows inexpensive cell sites deployed by users to connect to traditional cellular networks through wired internet connections) to enable significant network capacity expansion to meet anticipated growth in mobile data traffic; • continue to develop brand recognition to effectively compete against better known companies in mobile computing and other consumer driven segments and to deepen our presence in significant emerging geographic regions; and/or • create stand-alone value and/or contribute to the success of our existing businesses through investments in new industry segments and/or disruptive technologies, including new display technologies, wireless charging, mobile health, mobile location awareness and commerce, the connected home and the Internet of Everything, among others.  concentration of device share among a few companies, and this trend may result in an increasing portion of our revenues being derived from a small number of customers. The loss of any one of our significant customers, a reduction in the purchases of our products by such customers or cancelation of significant purchases from any of these customers would reduce our revenues and could harm our ability to achieve or sustain expected operating results, and a delay of significant purchases, even if only temporary, would reduce our revenues in the period of the delay. Further, concentration of device share among a few companies, and the corresponding purchasing power of these companies, may result in lower prices for our products which, if not accompanied by a sufficient increase in the volume of purchases of our products, could have an adverse effect on our revenues and margins. In addition, the timing and size of purchases by our significant customers may be impacted by the timing of such customers’ new or next generation product introductions, over which we have little or no control, and the timing of such introductions may cause our operating results to fluctuate. Accordingly, if current industry dynamics and concentrations continue, our QCT segment’s revenues will continue to depend largely upon, and be impacted by, future purchases and the timing and size of any such future purchases by these significant customers. Further, companies that provide HLOS for devices, including leading technology companies, have entered the device market. If we fail to effectively partner with these companies, or their partners or customers, they may decide not to purchase (either directly or through their contract manufacturers), or to reduce or discontinue their purchases of, our integrated circuit products. In addition, there has been and continues to be litigation among certain of our customers and other industry participants, and the potential outcomes of such litigation, including but not limited to injunctions against devices that incorporate our products or rulings on certain patent law issues that create new legal precedent, could impact our business. Although we have more than 250 CDMA-based licensees, our QTL segment derives a significant portion of licensing revenues from a limited number of licensees. Moreover, the future growth and success of our core licensing business will depend in part on the ability of our licensees to develop, introduce and deliver high-volume products that achieve and sustain customer acceptance. We have little or no control over the product development or sales efforts of our licensees, and our licensees might not be successful. Reductions in the average selling prices of wireless devices sold by our major licensees, without a sufficient increase in the volumes of such devices sold, would generally have an adverse effect on our revenues. The continued and future success of our licensing programs can be impacted by the deployment of other technologies in place of technologies based on CDMA, OFDMA and their derivatives; the need to extend certain existing license agreements that are expiring and/or to cover additional later patents; and/or the success of our licensing programs for 4G single mode products and emerging industry segments. Although we own a very strong portfolio of issued and pending patents related to GSM, GPRS, EDGE, OFDM, OFDMA, WLAN, MIMO and other technologies, our patent portfolio licensing program in these areas is less established and might not be as successful in generating licensing revenues as our CDMA licensing program. Many wireless operators are investigating or have selected OFDMA-based LTE as their next-generation 4G technology for deployment in existing or future wireless spectrum bands as complementary to their existing CDMA-based networks. While 3G/4G multimode products are generally covered by existing 3G licensing agreements, products that implement 4G and do not implement 3G are generally not covered by existing 3G licensing agreements. Although we believe that our patented technology is essential and useful to implementation of the LTE industry standards and have granted royalty-bearing licenses to more than 90 companies (including LG, Nokia, Samsung, Sony Mobile and ZTE) that have realized that they need a license under our patents to make and sell products implementing 4G standards but not implementing 3G standards, the royalty rates for single mode 4G products are generally lower than our royalty rates for 3G and 3G/4G multimode products, and therefore, we might not achieve the same licensing revenues on such LTE products as on 3G or 3G/4G multimode products. In addition, new connectivity services are emerging that rely on devices that may or may not be used on traditional cellular networks, such as devices used in the connected home or the Internet of Everything. Standards, even de facto standards, that develop as these technologies mature, in particular those that do not include a base level of interoperability, may impact our ability to obtain royalties that are equivalent to those that we receive for 3G products used in cellular communications. Although we believe that our patented technology is essential and useful to the commercialization of such services, the royalties we receive may be lower than those we receive from our current licensing program. Over the long-term, we need to continue to evolve our patent portfolio. If we do not maintain a strong portfolio that is applicable to current and/or future products and/or services, our future licensing revenues could be negatively impacted. The licenses granted to and from us under a number of our license agreements include only patents that are either filed or issued prior to a certain date and, in a small number of agreements, royalties are payable on those patents for a specified time period. As a result, there are agreements with some licensees where later patents are not licensed by or to us and/or royalties are not owed to us under such license agreements after the specified time period. In order to license or to obtain a license to such later patents, or to receive royalties after the specified time period, we will need to extend or modify such license agreements or enter into new license agreements with such licensees. We might not be able to modify those license agreements, or enter into 15  new license agreements, in the future without affecting the material terms and conditions of our license agreements with such licensees, and such modifications or new agreements may negatively impact our revenues. If we are unable to reach agreement on such modifications or new agreements, it could result in patent infringement litigation with such companies. Efforts by some communications equipment manufacturers or their customers to avoid paying fair and reasonable royalties for the use of our intellectual property may require the investment of substantial management time and financial resources and may result in legal decisions and/or actions by governments, courts, regulators or agencies, Standards Development Organizations (SDOs) or other industry organizations that harm our business. From time to time, companies initiate various strategies to attempt to renegotiate, mitigate and/or eliminate their need to pay royalties to us for the use of our intellectual property. These strategies have included: (i) litigation, often alleging infringement of patents held by such companies, patent misuse, patent exhaustion, patent invalidity and/or patent and/or license unenforceability, or some form of unfair competition; (ii) taking positions contrary to our understanding of their contracts with us; (iii) appeals to governmental authorities; (iv) collective action, including working with wireless operators, standards bodies, other like-minded companies and other organizations, on both formal and informal bases, to adopt intellectual property policies and practices that could have the effect of limiting returns on intellectual property innovations; and (v) lobbying governmental regulators and elected officials for the purpose of seeking the imposition of some form of compulsory licensing and/or to weaken a patent holder’s ability to enforce its rights or obtain a fair return for such rights. In addition, in connection with our participation in SDOs, we, like other patent owners, generally make contractual commitments to such organizations to license those of our patents that would be infringed by standard-compliant products on terms that are fair, reasonable and nondiscriminatory (FRAND). Some manufacturers and users of standard-compliant products advance interpretations of these FRAND commitments that are adverse to our licensing business, including interpretations that would limit the amount of royalties that we could collect on the licensing of our patent portfolio. Further, some companies or entities have proposed significant changes to existing intellectual property policies for implementation by SDOs and other industry organizations with the goal of significantly devaluing standards-essential patents. For example, some have put forth proposals which would require a maximum aggregate intellectual property royalty rate for the use of all essential patents owned by all of the member companies to be applied to the selling price of any product implementing the relevant standard. They have further proposed that such maximum aggregate royalty rate be apportioned to each member company with essential patents based upon the number of essential patents held by such company. Others have proposed that injunctions not be an available remedy for infringement of essential patents and/or have made proposals that could severely limit damage awards and other remedies by courts for patent infringement (e.g., by severely limiting the base upon which the royalty percentage may be applied). A number of these strategies are purportedly based on interpretations of the policies of certain SDOs concerning the licensing of patents that are or may be essential to industry standards and on our and/or other companies’ alleged failure to abide by these policies. Some courts and governmental agencies have adopted and may in the future adopt some or all of these interpretations or proposals in a manner adverse to our interests, and SDOs may adopt such interpretations or proposals as so-called clarifications or amendments to their intellectual property policies. We expect that such proposals, interpretations and strategies will continue in the future, and if successful in the future, our business model would be harmed, either by limiting or eliminating our ability to collect royalties on all or a portion of our patent portfolio, limiting our return on investment with respect to new technologies, limiting our ability to seek injunctions against infringers of our standards-essential patents, or forcing us to work outside of SDOs or other industry groups to promote our new technologies, and our results of operations could be negatively impacted. In addition, the legal and other costs associated with asserting or defending our positions have been and continue to be significant. We assume that such challenges, regardless of their merits, will continue into the foreseeable future and may require the investment of substantial management time and financial resources. The enforcement and protection of our intellectual property rights may be expensive, could fail to prevent misappropriation or unauthorized use of our proprietary intellectual property rights, could result in the loss of our ability to enforce one or more patents, or could be adversely affected by changes in patent laws, by laws in certain foreign jurisdictions that may not effectively protect our intellectual property rights or by ineffective enforcement of laws in such jurisdictions. We rely primarily on patent, copyright, trademark and trade secret laws, as well as nondisclosure and confidentiality agreements and other methods, to protect our proprietary information, technologies and processes, including our patent portfolio. Policing unauthorized use of our products, technologies and proprietary information is difficult and time consuming. We cannot be certain that the steps we have taken, or may take in the future, will prevent the misappropriation or unauthorized use of our proprietary information and technologies, particularly in foreign countries where the laws may not protect our proprietary intellectual property rights as fully or as readily as United States laws or where the enforcement of such laws may be lacking or ineffective. Some industry participants who have a vested interest in devaluing patents in general, or standards essential patents in particular, have mounted attacks on certain patent systems, increasing the likelihood of changes to 16  established patent laws. In the United States, there is continued discussion regarding potential patent law changes. Many observers anticipate that in the next few years the European Union will adopt a unitary patent system that may broadly impact that region’s patent regime. We cannot predict with certainty the long-term effects of any potential changes. In addition, we cannot be certain that the laws and policies of any country or the practices of any standards bodies, foreign or domestic, with respect to intellectual property enforcement or licensing or the adoption of standards, will not be changed in the future in a way detrimental to our licensing program or to the sale or use of our products or technology. We have had, and may continue to have, difficulty in certain circumstances in protecting or enforcing our intellectual property rights and/or contracts, including collecting royalties for use of our patent portfolio in particular foreign jurisdictions due to, among others: policies of foreign governments; challenges to our licensing practices under such jurisdictions’ competition laws; adoption of mandatory licensing provisions by foreign jurisdictions (either with controlled/regulated royalties or royalty free); failure of foreign courts to recognize and enforce judgments of contract breach and damages issued by courts in the United States; and/or challenges pending before foreign competition agencies to the pricing and integration of additional features and functionality into our chipset products. We may need to litigate in the United States or elsewhere in the world to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights of others. As a result of any such litigation, we could lose our ability to enforce one or more patents or incur substantial unexpected operating costs. Any action we take to enforce our intellectual property rights could be costly and could absorb significant management time and attention, which, in turn, could negatively impact our operating results. Our research, development and other investments in new technologies, products and services may not generate operating income or contribute to future operating results that meet our expectations. Our industry is subject to rapid technological change, and we must make substantial research, development and other investments in new products, services and technologies to compete successfully. Technological innovations generally require significant research and development efforts before they are commercially viable. We intend to continue to make substantial investments in developing new products, services and technologies that we believe can create stand-alone value and/or contribute to the success of our existing businesses, and it is possible that these initiatives will not be successful and/or will not result in meaningful revenues or generate operating income that meets expectations. While we continue to focus our development efforts primarily in support of 3G CDMA- and 4G OFDMA-based technologies, we innovate across a broad spectrum of opportunities that leverage our existing technical and business expertise to deploy new business models and enter into new industry segments. Our recent investment initiatives relate to, among others, new display technologies, wireless charging technology, small cell technology and the 1000x data challenge, proximity-based communications, very high speed connectivity, mobile location awareness and commerce, mobile health, wearable technology, gaming and products for the connected home, the digital 6th sense and the Internet of Everything. Our research, development and other investments in new technologies, products or services may not succeed due to, among others: improvements in alternate technologies in ways that reduce the advantages we anticipate from our investments; competitors’ products or services being more cost effective, having more capabilities or fewer limitations or being brought to market faster than our new products and services; and competitors having longer operating histories in industry segments that are new to us. We may also underestimate the costs of or overestimate the future operating income and/or margins that could result from these investments; and these investments may not, or may take many years to, generate material returns. If our new technologies, products or services are not successful, or are not successful in the time frame we anticipate, we may incur significant costs and/or asset impairments, our business may not grow as anticipated, our margins may be negatively impacted and/or our reputation may be harmed. Claims by other companies that we infringe their intellectual property could adversely affect our business. From time to time, companies have asserted, and may again assert, patent, copyright and other intellectual property rights against our products or products using our technologies or other technologies used in our industry. These claims have resulted and may again result in our involvement in litigation. We may not prevail in such litigation given the complex technical issues and inherent uncertainties in intellectual property litigation. If any of our products were found to infringe on another company’s intellectual property rights, we could be subject to an injunction or required to redesign our products, which could be costly, or to license such rights and/or pay damages or other compensation to such other company. If we are unable to redesign our products, license such intellectual property rights used in our products or otherwise distribute our products through a licensed supplier, we could be prohibited from making and selling such products. In any potential dispute involving other companies’ patents or other intellectual property, our chipset foundries, semiconductor assembly and test providers and customers could also become the targets of litigation. We are contingently liable under certain product sales, services, license and other agreements to indemnify certain customers against certain types of liability and/or damages arising from qualifying claims of patent infringement by products or services sold or provided by us. Reimbursements under indemnification arrangements could have an adverse effect on our results of operations. Furthermore, any such litigation could severely disrupt the supply of our products and the businesses of our chipset customers and their customers, which in turn could hurt our relationships with them 17  and could result in a decline in our chipset sales and/or reductions in our licensees’ sales, causing a corresponding decline in our chipset and/or licensing revenues. Any claims, regardless of their merit, could be time consuming to address, result in costly litigation, divert the efforts of our technical and management personnel or cause product release or shipment delays, any of which could have an adverse effect upon our operating results. We expect that we may continue to be involved in litigation and may have to appear in front of administrative bodies (such as the U.S. International Trade Commission) to defend against patent assertions against our products by companies, some of whom are attempting to gain competitive advantage or leverage in licensing negotiations. We may not be successful in such proceedings, and if we are not, the range of possible outcomes includes everything from royalty payment to an injunction on the sale of certain of our integrated circuit products (and on the sale of our customers’ devices using such products). Any imposition of royalty payments might make purchases of our products less economical for our customers and could have an adverse effect upon our operating results. A negative outcome in any such proceeding could severely disrupt the business of our chipset customers and their wireless operator customers, which in turn could harm our relationships with them and could result in a decline in our share of worldwide chipset sales and/or a reduction in our licensees’ sales to wireless operators, causing corresponding declines in our chipset and/or licensing revenues. A number of other companies have claimed to own patents applicable to products implementing various CDMA standards, GSM standards and OFDMA standards. In addition, existing standards continue to evolve, and new standards, including those applicable to new industry segments, continue to be developed. If future standards diminish, or fail to include, a base level of interoperability, our business may be harmed, and our investments in these new segments may not succeed. If we or other product manufacturers are required to obtain additional licenses and/or pay royalties to one or more of such other patent holders, this could have an adverse effect on the commercial implementation of our products and technologies, average sales prices of and demand for our licensees’ products and our results of operations. We depend on a limited number of third-party suppliers for the procurement, manufacture and testing of our products. If we fail to execute supply strategies that provide supply assurance, technology leadership and low cost, our operating results and our business may be harmed. Our QCT segment purchases wafers, die and fully-assembled and tested integrated circuits from third-party semiconductor manufacturing foundries. We also contract with third-party suppliers for assembly, test and other services related to the manufacture of our products. A reduction, interruption, delay or limitation in our product supply source, a failure by our suppliers to procure raw materials or to provide or allocate adequate manufacturing or test capacity for our products or their inability to react to shifts in product demand or an increase in raw material or component prices could have an adverse effect on our ability to meet customer demands, our business and/or our profitability. The loss of a supplier or the inability of a supplier to meet performance or quality specifications or delivery schedules could harm our ability to meet our delivery obligations to our customers and/or negatively impact our revenues, business operations and ability to compete for future business. In the event of a loss of or a decision to change a supplier, qualifying a new foundry supplier and commencing volume production or testing could cause us to incur additional expense and production delays, resulting in possible loss of customers. While we have established alternate suppliers for certain technologies that we consider critical, we rely on sole- or limited-source suppliers for some products, subjecting us to significant risks, including: possible shortages of raw materials or manufacturing capacity; poor product performance; and reduced control over delivery schedules, manufacturing capability and yields, quality assurance, quantity and costs. To the extent we have established alternate suppliers, these suppliers may require significant levels of support to bring complex technologies to production. As a result, we may invest a significant amount of effort and resources and incur higher costs to support and maintain such alternate suppliers. Further, any future consolidation of foundry suppliers could increase our vulnerability to sole- or limited-source arrangements. Our arrangements with our suppliers may oblige us to incur costs to manufacture and test our products that do not decrease at the same rate as decreases in pricing to our customers. Our ability, and that of our suppliers, to develop or maintain leading process technologies, including transitions to smaller geometry process technologies, and to effectively compete with the manufacturing processes and performance of our competition, could also impact our ability to meet customer demand, increase our costs and subject us to the risk of excess inventories. Our inability to meet customer demand due to sole- or limited-sourcing and/or the additional costs that we incur because of these or other supply constraints or because of the need to support alternate suppliers could negatively impact our business, our revenues and our results of operations. Although we have long-term contracts with our suppliers, many of these contracts do not provide for long-term capacity commitments. To the extent that we do not have firm commitments from our suppliers over a specific time period, or for any specific quantity, our suppliers may allocate, and in the past have allocated, capacity to the production and testing of products for their other customers while reducing or limiting capacity to manufacture or test our products. Accordingly, capacity for our products may not be available when we need it or at reasonable prices. To the extent we do obtain long-term capacity commitments, we may incur additional costs related to those commitments. 18  One or more of our suppliers or potential alternate suppliers may manufacture CDMA- or OFDMA-based integrated circuits that compete with our products. In this event, the supplier could elect to allocate raw materials and manufacturing capacity to their own products and reduce or limit deliveries to us to our detriment. In addition, we may not receive reasonable pricing, manufacturing or delivery terms. We cannot guarantee that the actions of our suppliers will not cause disruptions in our operations that could harm our ability to meet our delivery obligations to our customers or increase our cost of sales. Our stock price and earnings are subject to substantial quarterly and annual fluctuations and to market downturns. Our stock price and earnings have fluctuated in the past and are likely to fluctuate in the future. Factors that may have a significant impact on the market price of our stock and/or earnings include, among others: In the past, securities class action litigation often has been brought against a company following periods of volatility in the market price of its securities. Due to changes in our stock price, we may be the target of securities litigation in the future. Securities litigation could result in substantial uninsured costs and divert management’s attention and resources. We are subject to government regulations and policies. Our business may suffer as a result of new or changes in laws, regulations or policies, our failure or inability to comply with laws, regulations or policies or adverse rulings in enforcement or other proceedings. Our business, products and services, and those of our customers and licensees, are subject to various laws and regulations globally, as well as government policies and the specifications of international, national and regional communications standards bodies. The adoption of new laws, regulations or policies, changes in the interpretation of existing laws, regulations or policies, changes in the regulation of our activities by a government or standards body and/or adverse rulings in court, regulatory, administrative or other proceedings relating to such laws, regulations or policies, including, among others, those affecting the use of our technology or products, competitive business practices, licensing practices, protection of intellectual property, trade, foreign investments or loans, spectrum availability and license issuance, adoption of standards, the provision of device subsidies by wireless operators to their customers, taxation, environmental protection or employment, could have an adverse effect on our business. Delays in government approvals or other governmental activities that could result from, among others, a decrease in or a lack of funding for certain agencies or branches of the government and/or political changes, could result in our incurring higher costs, could negatively impact our ability to timely consummate strategic transactions and/or could have other negative impacts on our business and the businesses of our customers and licensees. National, state and local environmental laws and regulations affect our operations around the world. These laws may make it more expensive to manufacture, have manufactured and sell products, and our costs could increase if our vendors (e.g., third-party manufacturers or utility companies) pass on their costs to us. 19 • volatility of the stock market in general and technology-based companies in particular that is often unrelated to the operating performance of any specific public company; • announcements concerning us, our competitors or our customers, including the selection of wireless communications technologies by wireless operators and the timing of the roll-out of those technologies, the use of our or our competitors’ integrated circuits in wireless devices by certain manufacturers or the business performance of our customers; • international developments, such as technology mandates, political developments or changes in economic policies; • changes in recommendations of securities analysts; • fluctuations (or market expectations of future fluctuations) in our operating margins and/or earnings (or forecasts) that exceed or fail to meet financial guidance that we provide to investors and/or the expectations of analysts or investors; • whether our return of capital to our stockholders meets, does not meet or exceeds the expectations of analysts or investors; • proprietary rights, product or patent litigation taken or threatened against us or against our customers or licensees; • strategic transactions, such as debt issuance, strategic equity or debt investments, acquisitions, divestitures or spin-offs; • unexpected and/or significant changes in the average selling prices of our licensees’ products and/or our products; • unresolved disputes with licensees that result in non-payment and/or non-recognition of royalty revenues that may be owed to us; • declines in the value or performance of our significant marketable securities portfolio, which is subject to financial market volatility and liquidity, interest rate, credit and other risks; or • inquiries, rumors or allegations regarding our financial disclosures, practices or compliance programs.  The SEC has recently adopted disclosure rules for companies that use conflict minerals in their products, with substantial supply chain verification requirements in the event that the materials come from, or could have come from, the Democratic Republic of the Congo or adjoining countries. These new rules and verification requirements, which apply to our activities in calendar 2013 and future years, impose additional costs on us and on our suppliers and may limit the sources or increase the prices of materials used in our products. Further, if we are unable to certify that our products are conflict free, we may face challenges with our customers that place us at a competitive disadvantage, and our reputation may be harmed. Laws, regulations and standards relating to corporate governance, business conduct, public disclosure and health care are complex and changing and may create uncertainty regarding compliance. Laws, regulations and standards are subject to varying interpretations in many cases, and their application in practice may evolve over time. As a result, our efforts to comply may fail, particularly if there is ambiguity as to how they should be applied in practice. New laws, regulations and standards or evolving interpretations of legal requirements may cause us to incur higher costs as we revise current practices, policies and/or procedures and may divert management time and attention to compliance activities. We may engage in acquisitions or strategic transactions or make strategic investments that could adversely affect our financial results or fail to enhance stockholder value. We engage in acquisitions and strategic transactions and make strategic investments with the goal of maximizing stockholder value. We acquire businesses and other assets, including wireless spectrum, patents and other intangible assets, enter into joint ventures or other strategic transactions and purchase minority equity interests in or make loans to companies that may be private and early-stage. Our strategic activities are generally focused on opening new or expanded opportunities for our technologies and supporting the design and introduction of new products and services for voice and data communications. Many of our acquisitions or strategic investments entail a high degree of risk, and investments may not become liquid for several years after the date of the investment, if at all. Our acquisitions or strategic investments may not generate financial returns or result in increased adoption or continued use of our technologies. In some cases, we may be required to consolidate or record our share of the earnings or losses of companies in which we have acquired ownership interests. In addition, we may record impairment charges related to our acquisitions and strategic investments. Any losses or impairment charges that we incur related to strategic investments or other transactions will have a negative impact on our financial results, and we may continue to incur new or additional losses related to strategic assets or investments that we have not fully impaired or exited. Achieving the anticipated benefits of business acquisitions depends in part upon our ability to integrate the acquired businesses in an efficient and effective manner. The integration of companies that have previously operated independently may result in significant challenges, including, among others: retaining key employees; successfully integrating new employees, business systems and technology; retaining customers and suppliers of the acquired business; minimizing the diversion of management’s attention from ongoing business matters; coordinating geographically separate organizations; consolidating research and development operations; and consolidating corporate and administrative infrastructures. We may not derive any commercial value from acquired technology, products or intellectual property or from future technologies or products based on the acquired technology and/or intellectual property, and we may be subject to liabilities that are not covered by indemnification protection we may obtain or we may become subject to litigation. Additionally, we may not be successful in expanding into geographic regions and/or categories of products served by or adjacent to an acquired business or in addressing potential new opportunities that may arise out of the combination. Due to our inexperience with products of and/or geographic regions served by acquired businesses, we may underestimate the costs and/or overestimate the benefits, including product and other synergies and growth opportunities that we expect to realize, and we may not achieve them. If we do not achieve the anticipated benefits of business acquisitions, our results of operations may be adversely affected, and we may not enhance stockholder value by engaging in these transactions. Global economic conditions that impact the mobile communications industry could negatively affect the demand for our products and services and our customers’ or licensees’ products and services, which may negatively affect our revenues. A decline in global economic conditions, particularly in geographic regions with high concentrations of wireless voice and data users, could have adverse, wide-ranging effects on demand for our products and for the products and services of our customers or licensees, particularly equipment manufacturers or others in the wireless communications industry who buy their products, such as wireless operators. Any prolonged economic crisis may result in a downturn in demand for our products or technology; the insolvency of key suppliers; delays in reporting and/or payments from our licensees and/or customers; failures by counterparties; and negative effects on wireless device inventories. In addition, our direct and indirect customers’ ability to purchase or pay for our products and services, obtain financing and upgrade their wireless networks could be adversely affected by economic conditions, leading to a reduction, cancelation or delay of orders for our products or services. Currency fluctuations could negatively affect future product sales or royalty revenues, harm our ability to collect receivables or increase the U.S. dollar cost of our products or the activities of our foreign subsidiaries and strategic investments. 20  Our customers sell their products throughout the world in various currencies. Consolidated revenues from international customers as a percentage of total revenues were greater than 90% during each of the last three fiscal years. Adverse movements in currency exchange rates may negatively affect our business and our operating results due to a number of factors, including, among others: Failures in our products or services or in the products of our customers, including those resulting from security vulnerabilities, defects or errors, could harm our business. The use of devices containing our products to access untrusted content creates a risk of exposing the system software in those devices to viral or malicious attacks. While we continue to focus on this issue and are taking measures to safeguard our products from cybersecurity threats, device capabilities continue to evolve, enabling more data and processes, such as mobile computing, and increasing the risk of security failures. Further, our products are inherently complex and may contain defects or errors that are detected only when the products are in use. For example, as our chipset product complexities increase, we are required to migrate to integrated circuit technologies with smaller geometric feature sizes. The design process interface issues in new domains of technology are complex and add risk to manufacturing yields and reliability. Manufacturing, testing, marketing and use of our products and those of our customers and licensees entail the risk of product liability. Because our products and services are responsible for critical functions in our customers’ products and/or networks, security failures, defects or errors in our components, materials or software or in our customers’ products could have an adverse impact on us, on our customers and on the end users of their products. Such adverse impact could include product liability claims or recalls, a decrease in demand for connected devices and wireless services, damage to our reputation and to our customer relationships and other financial liability or harm to our business. Our business and operations could suffer in the event of security breaches. Attempts by others to gain unauthorized access to our information technology systems are increasingly more sophisticated. These attempts, which might be related to industrial or other espionage, include covertly introducing malware to our computers and networks and impersonating authorized users, among others. We seek to detect and investigate all security incidents and to prevent their recurrence, but in some cases, we might be unaware of an incident or its magnitude and effects. While we have identified several incidents of unauthorized access, to date none have caused material damage to our business. The theft, unauthorized use or publication of our intellectual property and/or confidential business information could harm our competitive position, reduce the value of our investment in research and development and other strategic initiatives and/or otherwise adversely affect our business. To the extent that any security breach results in inappropriate disclosure of our customers’ or licensees’ confidential information, we may incur liability. We expect to continue to devote additional resources to the security of our information technology systems. Potential tax liabilities could adversely affect our results of operations. We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining our provision for income taxes. Although we believe that our tax estimates are reasonable, the final determination of tax audits and any related litigation could materially differ from amounts reflected in historical income tax provisions and accruals. In such case, our income tax provision and results of operations in the period or periods in which that determination is made could be negatively affected. Our QCT segment’s non-United States headquarters is located in Singapore. We obtained tax incentives in Singapore provided that we meet specified employment and incentive criteria, and as a result of expiration of these incentives, our Singapore tax rate is expected to increase in fiscal 2017 and again in fiscal 2027. If we do not meet the criteria required to 21 • Our products and those of our customers and licensees that are sold outside the United States may become less price-competitive, which may result in reduced demand for those products and/or downward pressure on average selling prices; • Certain of our revenues, such as royalties, that are derived from licensee or customer sales denominated in foreign currencies could decrease; • Our foreign suppliers may raise their prices if they are impacted by currency fluctuations, resulting in higher than expected costs and lower margins; • Foreign exchange hedging transactions that we engage in to reduce the impact of currency fluctuations may require the payment of structuring fees, limit the U.S. dollar value of royalties from licensees’ sales that are denominated in foreign currencies, cause earnings volatility if the hedges do not qualify for hedge accounting and expose us to counterparty risk if the counterparty fails to perform; and • The U.S. dollar value of our marketable securities that are denominated directly or indirectly in foreign currencies may decline.  retain such incentives, our Singapore tax rate could increase prior to those dates, and our results of operations may be adversely affected. Tax rules may change in a manner that adversely affects our future reported financial results or the way we conduct our business. For example, we consider the operating earnings of certain non-United States subsidiaries to be indefinitely invested outside the United States based on our current needs for those earnings to be reinvested offshore as well as estimates that future domestic cash generation will be sufficient to meet future domestic cash needs for the foreseeable future. No provision has been made for United States federal and state or foreign taxes that may result from future remittances of the undistributed earnings of these foreign subsidiaries. Our future financial results and liquidity may be adversely affected if tax rules regarding unrepatriated earnings change, if domestic cash needs require us to repatriate foreign earnings, or if the United States international tax rules change as part of comprehensive tax reform or other tax legislation. If wireless devices pose safety risks, we may be subject to new regulations, and demand for our products and those of our customers and licensees may decrease. Concerns over the effects of radio frequency emissions continue. Interest groups have requested that the Federal Communications Commission investigate claims that wireless communications technologies pose health concerns and cause interference with, among other things, airbags, hearing aids and medical devices, and there continues to be litigation in the industry with respect to these issues. Legislation that may be adopted in response to these concerns or adverse news or findings about safety risks could reduce demand for our products and those of our licensees and customers in the United States as well as in foreign countries. We may not be able to attract and retain qualified employees. Our future success depends largely upon the continued service of our executive officers and other key management and technical personnel and on our ability to continue to attract, retain and motivate qualified personnel. In addition, implementing our business strategy requires specialized engineering and other talent, and our revenues are highly dependent on technological and product innovations. The market for employees in our industry is extremely competitive. Further, existing immigration laws make it more difficult for us to recruit and retain highly skilled foreign national graduates of universities in the United States, making the pool of available talent even smaller. We continue to anticipate increases in human resource needs, particularly in engineering. If we are unable to attract and retain qualified employees, our business may be harmed. Item 1B. Unresolved Staff Comments None. 22  Item 2. Properties At September 29, 2013 , we occupied the indicated square footage in the owned or leased facilities described below (square footage in thousands): In addition to the facilities above, we own or lease approximately 4,000 square feet of properties that are leased or subleased to third parties. Our facility leases expire at varying dates through 2029, not including renewals that would be at our option. Several owned and leased facilities are under construction totaling approximately 468,000 additional square feet to meet the requirements projected in our long-term business plan. In connection with our intention to license our next generation interferometric modulator (IMOD) display technology in the future, while directly commercializing only certain IMOD products, we are evaluating strategic options for one of our manufacturing facilities in Taiwan, which include, but are not limited to, operating the facility in support of our commercialization efforts and/or a sale to, or joint venture with, third parties. We believe that our facilities will be suitable and adequate for the present purposes and that the productive capacity in facilities that are not under construction is substantially utilized. In the future, we may need to purchase, build or lease additional facilities to meet the requirements projected in our long-term business plan. 23 Number Total of Square Buildings Location Status Footage Primary Use Primary Segment(s) 35 United States Owned 4,660 Executive and administrative offices, research and development, sales and marketing, service functions, manufacturing and network management hub. All 50 United States Leased 1,804 Administrative offices, research and development, sales and marketing, service functions and network management hub. All 2 Taiwan Owned 1,824 Administrative offices, research and development, manufacturing and sales and marketing. QMT, QCT 9 India Leased 678 Administrative offices, research and development and sales and marketing. QCT 15 China Leased 386 Administrative offices, research and development, sales and marketing, service functions and network operating centers. All 7 Taiwan Leased 137 Administrative offices, research and development and sales and marketing. QMT 3 India Owned 136 Administrative offices, research and development and sales and marketing. QCT 7 Canada Leased 134 Administrative offices, research and development and sales and marketing. QCT, Omnitracs 5 Israel Leased 126 Administrative offices, research and development and sales and marketing. QCT, QTL 3 Mexico Leased 118 Administrative offices, sales and marketing, service functions, manufacturing and network management hub. QWI, QTL 3 South Korea Leased 99 Administrative offices, research and development and sales and marketing. QCT 2 Singapore Leased 62 Administrative offices, research and development and sales and marketing. QCT 4 England Leased 55 Administrative offices, research and development and sales and marketing. QCT 7 Germany Leased 48 Administrative offices, research and development and sales and marketing. QCT, QTL 39 Other International Leased 172 Administrative offices, research and development and sales and marketing. All Total square footage 10,439  Item 3. Legal Proceedings Tessera, Inc. v. QUALCOMM Incorporated : On April 17, 2007, Tessera filed a patent infringement lawsuit in the United States District Court for the Eastern District of Texas and a complaint with the United States International Trade Commission (ITC) pursuant to Section 337 of the Tariff Act of 1930 against us and other companies, alleging infringement of two patents. The district court action was stayed pending resolution of the ITC proceeding, including all appeals. On May 20, 2009, the ITC issued a limited exclusion order and a cease and desist order, both of which were terminated when the patents expired on September 24, 2010. During the period of the exclusion order, we shifted supply of accused chips for customers who manufacture products that may be imported to the United States to a licensed supplier of Tessera, and we continued to supply those customers without interruption. The ITC’s orders were affirmed on appeal, and on November 28, 2011, the United States Supreme Court denied our petition for review. On January 18, 2012, pursuant to the parties’ stipulation, the District Court in the Eastern District of Texas lifted the stay and ordered that the case be moved to the United States District Court for the Northern District of California. On March 1, 2012, that court consolidated the case with an earlier-filed lawsuit filed by Tessera against multiple parties, including some of our semiconductor chip package suppliers. The court has set April 24, 2014 as the hearing date for claims construction and any summary judgment motions that may be filed. Trial is scheduled for August 25, 2014. Tessera may continue to seek alleged past damages in the district court, but it cannot obtain injunctive relief due to the expiration of the patents. MOSAID Technologies Incorporated v. Dell, Inc. et al. : On March 16, 2011, MOSAID filed a complaint against Atheros Communications, Inc. (Atheros Communications), which we acquired in May 2011 and renamed Qualcomm Atheros, Inc. (Qualcomm Atheros), and 32 other entities in the United States District Court for the Eastern District of Texas alleging that certain Wi-Fi products infringed six MOSAID patents and seeking damages for the relevant statutory period prior to May 2011. On July 17, 2013, we entered into an agreement with MOSAID pursuant to which MOSAID agreed to dismiss with prejudice all claims against us, licensed to us certain MOSAID patents and provided other considerations, and we paid to MOSAID an amount that was not material to our financial statements. The court dismissed the claims against us with prejudice on August 2, 2013. ParkerVision, Inc. v. QUALCOMM Incorporated : On July 20, 2011, ParkerVision filed a complaint against us in the United States District Court for the Middle District of Florida alleging that certain of our products infringe seven of its patents alleged to cover direct down-conversion receivers. ParkerVision’s complaint sought damages and injunctive and other relief. On February 28, 2012, ParkerVision filed an amended complaint dropping two patents from the case and adding one new patent. On January 22, 2013, the court granted in part ParkerVision’s motion to dismiss our counterclaim for inequitable conduct, and we subsequently withdrew the remainder of our inequitable conduct counterclaim. On February 20, 2013, the court issued its claim construction order. We filed our amended answer and counterclaims on April 11, 2013. Subsequently, ParkerVision narrowed its allegations to assert only four patents. The trial began on October 7, 2013. On October 17, 2013, the jury returned a verdict finding all asserted claims of the four at-issue patents to be infringed and finding that none of the asserted claims are invalid. On October 24, 2013, the jury returned a separate verdict assessing total past damages of approximately $173 million and finding that our infringement was not willful. We recorded a $173 million charge in other expenses in fiscal 2013 as a result of this verdict. The court will set a schedule for post-verdict proceedings, including the parties’ respective motions for judgment as a matter of law and ParkerVision’s request for ongoing equitable relief. We intend to appeal. Icera Complaint to the European Commission : On June 7, 2010, the European Commission (the Commission) notified and provided us with a redacted copy of a complaint filed with the Commission by Icera, Inc. alleging that we have engaged in anticompetitive activity. We were asked by the Commission to submit a preliminary response to the portions of the complaint disclosed to us, and we submitted our response in July 2010. On October 19, 2011, the Commission notified us that we should provide to the Commission additional documents and information. On January 16, 2012, we provided additional documents and information in response to that request. On July 10, 2013, the Commission ordered us to provide additional documents and information. We continue to cooperate fully with the Commission’s preliminary investigation. Korea Fair Trade Commission (KFTC) Complaint : On January 4, 2010, the KFTC issued a written decision finding that we had violated South Korean law by offering certain discounts and rebates for purchases of our CDMA chips and for including in certain agreements language requiring the continued payment of royalties after all licensed patents have expired. The KFTC levied a fine, which we paid in the second quarter of fiscal 2010. We appealed to the Seoul High Court, and on June 19, 2013, the Seoul High Court affirmed the KFTC’s decision. On July 4, 2013, we filed an appeal with the Korea Supreme Court. Japan Fair Trade Commission (JFTC) Complaint : The JFTC received unspecified complaints alleging that our business practices are, in some way, a violation of Japanese law. On September 29, 2009, the JFTC issued a cease and desist order concluding that our Japanese licensees were forced to cross-license patents to us on a royalty-free basis and were forced to accept a provision under which they agreed not to assert their essential patents against our other licensees who made a 24  similar commitment in their license agreements with us. The cease and desist order seeks to require us to modify our existing license agreements with Japanese companies to eliminate these provisions while preserving the license of our patents to those companies. We disagree with the conclusions that we forced our Japanese licensees to agree to any provision in the parties’ agreements and that those provisions violate the Japanese Antimonopoly Act. We have invoked our right under Japanese law to an administrative hearing before the JFTC. In February 2010, the Tokyo High Court granted our motion and issued a stay of the cease and desist order pending the administrative hearing before the JFTC. The JFTC has held hearings on 19 different dates, with another hearing scheduled for January 22, 2014 and additional hearing dates yet to be scheduled. Securities and Exchange Commission (SEC) Formal Order of Private Investigation and Department of Justice Investigation : On September 8, 2010, we were notified by the SEC’s Los Angeles Regional office of a formal order of private investigation. We understand that the investigation arose from a “whistleblower’s” allegations made in December 2009 to the audit committee of our Board of Directors and to the SEC. In 2010, the audit committee completed an internal review of the allegations with the assistance of independent counsel and independent forensic accountants. This internal review into the whistleblower’s allegations and related accounting practices did not identify any errors in our financial statements. On January 27, 2012, we learned that the U.S. Attorney’s Office for the Southern District of California/Department of Justice (collectively, DOJ) had begun an investigation regarding our compliance with the Foreign Corrupt Practices Act (FCPA). FCPA compliance is also a focus of the SEC investigation. The audit committee continues to conduct an internal review into our compliance with the FCPA with the assistance of independent counsel and independent forensic accountants. As previously disclosed, we have discovered, and as a part of our ongoing cooperation with these investigations have informed the SEC and the DOJ of, instances in which special hiring consideration, gifts or other benefits (collectively, benefits) were provided to several individuals associated with Chinese state-owned companies or agencies. Based on the facts currently known, we believe the aggregate monetary value of the benefits in question to be less than $250,000, excluding employment compensation. We are continuing to cooperate with the SEC and the DOJ, but are unable to predict the outcome of their investigations. We will continue to vigorously defend ourselves in the foregoing matters. However, litigation and investigations are inherently uncertain. Accordingly, we cannot predict the outcome of these matters. Other than the amount recorded for the ParkerVision verdict, we have not recorded any accrual at September 29, 2013 for contingent losses associated with these matters based on our belief that losses, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time. Nonetheless, the unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition or cash flows. We are engaged in numerous other legal actions not described above arising in the ordinary course of our business and, while there can be no assurance, we believe the ultimate outcome of these other legal actions will not have a material adverse effect on our business, results of operations, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. 25  PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Global Select Market under the symbol “QCOM.” The following table sets forth the range of high and low sales prices of our common stock for the fiscal periods indicated, as reported by NASDAQ. Such quotations represent inter-dealer prices without retail markup, markdown or commission and may not necessarily represent actual transactions. At November 4, 2013 , there were 8,067 holders of record of our common stock. On November 4, 2013 , the last sale price reported on the NASDAQ Global Select Market for our common stock was $69.57 per share. Dividends On March 6, 2012, we announced an increase in our quarterly dividend from $0.215 to $0.25 per share of common stock. On March 5, 2013, we announced an increase in our quarterly dividend from $0.25 to $0.35 per share of common stock. Cash dividends paid on outstanding common stock announced in fiscal 2012 and 2013 were as follows (in millions, except per share data): On October 24, 2013 , we announced a cash dividend of $0.35 per share of common stock, payable on December 19, 2013 to stockholders of record as of December 2, 2013 . We intend to continue to pay quarterly dividends subject to capital availability and our view that cash dividends are in the best interests of our stockholders. Future dividends may be affected by, among other items, our views on potential future capital requirements, including those relating to research and development, creation and expansion of sales distribution channels and investments and acquisitions, legal risks, stock repurchase programs, debt issuance, changes in federal and state income tax law and changes to our business model. 26 High ($) Low ($) 2012 First quarter 57.97 46.40 Second quarter 67.00 54.01 Third quarter 68.87 54.85 Fourth quarter 64.45 53.09 2013 First quarter 64.72 57.29 Second quarter 68.50 60.22 Third quarter 67.66 59.46 Fourth quarter 70.37 59.02 Per Share Total Cumulative by Fiscal Year 2012 First quarter $ 0.215 $ 362 $ 362 Second quarter 0.215 366 728 Third quarter 0.250 429 1,157 Fourth quarter 0.250 426 1,583 $ 0.930 $ 1,583 2013 First quarter $ 0.250 $ 428 $ 428 Second quarter 0.250 431 859 Third quarter 0.350 604 1,463 Fourth quarter 0.350 592 2,055 $ 1.200 $ 2,055  Share-Based Compensation We primarily issue restricted stock units under our equity compensation plans, which are part of a broad-based, long-term retention program that is intended to attract and retain talented employees and directors and align stockholder and employee interests. Our 2006 Long-Term Incentive Plan (2006 Plan) provides for the grant of both incentive and non-qualified stock options, restricted stock units, stock appreciation rights, restricted stock, performance units and shares and other stock-based awards. Restricted stock units generally vest over periods of three years from the date of grant. Stock options are granted at a price not less than the fair market value of the stock on the date of grant. Stock options vest over periods not exceeding five years and are exercisable for up to 10 years from the grant date. The Board of Directors may terminate the 2006 Plan at any time. Additional information regarding our share-based compensation plans and plan activity for fiscal 2013 , 2012 and 2011 is provided in the notes to our consolidated financial statements in this Annual Report in “Notes to Consolidated Financial Statements, Note 6. Employee Benefit Plans” and in our 2014 Proxy Statement under the heading “Equity Compensation Plan Information.” Issuer Purchases of Equity Securities Issuer purchases of equity securities during the fourth quarter of fiscal 2013 were: Performance Measurement Comparison of Stockholder Return The following graph compares total stockholder return on our common stock since September 28, 2008 to two indices: the Standard & Poor’s 500 Stock Index (S&P 500) and the NASDAQ-100 Index (NASDAQ-100). The S&P 500 tracks the aggregate price performance of the equity securities of 500 United States companies selected by Standard & Poor’s Index Committee to include companies in leading industries and to reflect the United States stock market. The NASDAQ-100 tracks the aggregate price performance of the 100 largest domestic and international non-financial securities listed on the NASDAQ Stock Market based on market capitalization. The total return for our stock and for each index assumes the reinvestment of gross dividends and is based on the returns of the component companies. We began paying dividends on our common stock on March 31, 2003. Our common stock is traded on the NASDAQ Global Select Market and is a component of each of the S&P 500 and the NASDAQ-100. 27 Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) (In thousands) (In thousands) (In millions) July 1, 2013, to July 28, 2013 8,655 $ 60.92 8,655 $ 3,435 July 29, 2013 to August 25, 2013 22,572 65.64 22,572 1,954 August 26, 2013 to September 29, 2013 19,460 67.45 19,460 4,850 Total 50,687 65.53 50,687 $ 4,850 (1) Average Price Paid Per Share excludes cash paid for commissions. (2) On September 11, 2013, we announced a new repurchase program authorizing us to repurchase up to $5.0 billion of our common stock. The stock repurchase program has no expiration date. This stock repurchase program replaced the previous $5.0 billion stock repurchase program announced on March 5, 2013. At September 29, 2013 , $4.9 billion remained available for repurchase.  Comparison of Cumulative Total Return on Investment Since September 28, 2008 (1) Our closing stock price on September 27, 2013, the last trading day of our 2013 fiscal year, was $67.38 per share. 28 (1) Shows the cumulative total return on investment assuming an investment of $100 (including reinvestment of dividends) in our common stock, the S&P 500 and the NASDAQ-100 on September 28, 2008. All returns are reported as of our fiscal year end, which is the last Sunday in September.  Item 6. Selected Financial Data The following data should be read in conjunction with the annual consolidated financial statements, related notes and other financial information appearing elsewhere herein. 29 Years Ended (1) September 29, 2013 September 30, 2012 September 25, 2011 September 26, 2010 September 27, 2009 (In millions, except per share data) Statement of Operations Data: Revenues $ 24,866 $ 19,121 $ 14,957 $ 10,982 $ 10,387 Operating income 7,230 5,682 5,026 3,727 2,542 Income from continuing operations 6,845 5,283 4,555 3,520 1,792 Discontinued operations, net of income taxes — 776 (313 ) (273 ) (200 ) Net income attributable to Qualcomm 6,853 6,109 4,260 3,247 1,592 Per Share Data: Basic earnings (loss) per share attributable to Qualcomm: Continuing operations $ 3.99 $ 3.14 $ 2.76 $ 2.15 $ 1.08 Discontinued operations — 0.45 (0.19 ) (0.17 ) (0.12 ) Net income 3.99 3.59 2.57 1.98 0.96 Diluted earnings (loss) per share attributable to Qualcomm: Continuing operations 3.91 3.06 2.70 2.12 1.07 Discontinued operations — 0.45 (0.18 ) (0.16 ) (0.12 ) Net income 3.91 3.51 2.52 1.96 0.95 Dividends per share announced 1.20 0.93 0.81 0.72 0.66 Balance Sheet Data: Cash, cash equivalents and marketable securities $ 29,406 $ 26,837 $ 20,913 $ 18,402 $ 17,742 Total assets 45,516 43,012 36,422 30,572 27,445 Loans and debentures (2) — 1,064 994 1,086 — Capital lease obligations 17 60 170 221 187 Other long-term liabilities (3) 533 366 450 540 665 Total stockholders’ equity 36,087 33,545 26,972 20,858 20,316 (1) Our fiscal year ends on the last Sunday in September. The fiscal years ended September 29, 2013, September 25, 2011, September 26, 2010 and September 27, 2009 each included 52 weeks. The fiscal year ended September 30, 2012 included 53 weeks. (2) Loans and debentures were included in liabilities held for sale in the consolidated balance sheet as of September 30, 2012. (3) Other long-term liabilities in this balance sheet data exclude capital lease obligations and unearned revenues. Capital lease obligations are included in other liabilities in the consolidated balance sheets.  Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations In addition to historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially from those referred to herein due to a number of factors, including but not limited to risks described in the section entitled Risk Factors and elsewhere in this Annual Report. Overview Recent Developments Revenues for fiscal 2013 were $24.9 billion , with net income attributable to Qualcomm of $6.9 billion , which primarily resulted from the following key items: Against this backdrop, the following recent developments occurred during fiscal 2013 with respect to key elements of our business or our industry: Our Business and Operating Segments We design, manufacture, have manufactured on our behalf and market digital communications products and services based on CDMA, OFDMA and other technologies. We derive revenues principally from sales of integrated circuit products, fixed license fees (payable in one or more installments) and ongoing royalties for use of our intellectual property, and fees for messaging and other services and related hardware sales, software development and licensing, and related services and software hosting services. Costs and expenses primarily consist of cost of equipment and services revenues and research and development and selling, general and administrative expenses. We conduct business primarily through four reportable segments: QCT, QTL, QWI and QSI. Our reportable segments are operated by QUALCOMM Incorporated and its direct and indirect subsidiaries. At the beginning of fiscal 2013, we completed a corporate reorganization in which certain assets of QUALCOMM Incorporated, as well as the stock of certain of its direct and indirect subsidiaries, were contributed to its wholly-owned subsidiary Qualcomm Technologies, Inc. (QTI). QTL continues to be operated by QUALCOMM Incorporated, which continues to own the vast majority of our patent portfolio. Substantially all of our products and services businesses, including QCT, and substantially all of our engineering, research and development functions, are operated by QTI and its subsidiaries. Neither QTI nor any of its subsidiaries has any right, power or authority to grant any licenses or other rights under or to any patents owned by QUALCOMM Incorporated. QCT (Qualcomm CDMA Technologies) is a leading developer and supplier of integrated circuits and system software based on CDMA, OFDMA and other technologies for use in voice and data communications, networking, application processing, multimedia and global positioning system products. QCT’s integrated circuit products and system software are sold to or licensed to manufacturers that use our products in wireless devices, particularly mobile phones, tablets, laptops, data modules, handheld wireless computers and gaming devices, access points and routers, data cards and infrastructure equipment, and in wired devices, particularly broadband gateway equipment, desktop computers, televisions, set-top boxes and Blu-ray players. The MSM integrated circuits, which include the Mobile Data Modem, Qualcomm Single Chip and Qualcomm 30 • We shipped approximately 716 million Mobile Station Modem (MSM) integrated circuits for CDMA- and OFDMA-based wireless devices, an increase of 21%, compared to approximately 590 million MSM integrated circuits in fiscal 2012 . • Total reported device sales were approximately $231.2 billion, an increase of approximately 23%, compared to approximately $187.3 billion in fiscal 2012 . (1) • Worldwide cellular connections grew by approximately 6% to reach approximately 6.8 billion. (2) • Worldwide 3G connections (all CDMA-based) grew by approximately 18% to approximately 2.2 billion, which was approximately 32% of total cellular subscriptions, including approximately 0.5 billion CDMA2000 1X/1xEV-DO subscriptions and approximately 1.7 billion WCDMA/HSPA/TD-SCDMA subscriptions. (2) (1) Total reported device sales is the sum of all reported sales in U.S. dollars (as reported to us by our licensees) of all licensed CDMA-based, OFDMA-based and CDMA/OFDMA multimode subscriber devices (including handsets, modules, modem cards and other subscriber devices) by our licensees during a particular period (collectively, 3G/4G devices). Not all licensees report sales the same way (e.g., some licensees report sales net of permitted deductions, including transportation, insurance, packing costs and other items, while other licensees report sales and then identify the amount of permitted deductions in their reports), and the way in which licensees report such information may change from time to time. Total reported device sales for a particular period may include prior period activity that was not reported by the licensee until such particular period. (2) According to GSMA Intelligence estimates as of November 4, 2013, for the quarter ended September 30, 2013 (estimates excluded Wireless Local Loop).  Snapdragon processor devices, perform the core baseband modem functionality in wireless devices providing voice and data communications, as well as multimedia applications and global positioning functions. In addition, our Snapdragon processors provide advanced application and graphics processing capabilities. QCT’s system software enables the other device components to interface with the integrated circuit products and is the foundation software enabling manufacturers to develop devices utilizing the functionality within the integrated circuits. QCT revenues comprised 67%, 63% and 59% of total consolidated revenues in fiscal 2013 , 2012 and 2011 , respectively. QCT utilizes a fabless production business model, which means that we do not own or operate foundries for the production of silicon wafers from which our integrated circuits are made. Integrated circuits are die cut from silicon wafers that have been assembled into packages or modules and have completed the final test manufacturing processes. We rely on independent third-party suppliers to perform the manufacturing and assembly, and most of the testing, of our integrated circuits based primarily on our proprietary designs and test programs. Our suppliers are also responsible for the procurement of most of the raw materials used in the production of our integrated circuits. We employ both turnkey and two-stage manufacturing models to purchase our integrated circuits. Turnkey is when our foundry suppliers are responsible for delivering fully assembled and tested integrated circuits. Under the two-stage manufacturing model, we purchase wafers and die from semiconductor manufacturing foundries and contract with separate third-party suppliers for probe, assembly and test services. QTL (Qualcomm Technology Licensing) grants licenses or otherwise provides rights to use portions of our intellectual property portfolio, which, among other rights, includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products, including, without limitation, products implementing CDMA2000, WCDMA, CDMA TDD (including TD-SCDMA), GSM/GPRS/EDGE and/or OFDMA standards and their derivatives. QTL licensing revenues are comprised of license fees as well as royalties based on sales by licensees of products incorporating or using our intellectual property. License fees are fixed amounts paid in one or more installments. Royalties are generally based upon a percentage of the wholesale (i.e., licensee’s) selling price of complete licensed products, net of certain permissible deductions (e.g., certain shipping costs, packing costs, VAT, etc.). QTL recognizes royalty revenues based on royalties reported by licensees during the quarter and when other revenue recognition criteria are met. Licensees, however, do not report and pay royalties owed for sales in any given quarter until after the conclusion of that quarter. QTL revenues comprised 30%, 33% and 36% of total consolidated revenues in fiscal 2013 , 2012 and 2011 , respectively. The vast majority of such revenues were generated through our licensees’ sales of CDMA2000- and WCDMA-based products, such as feature phones and smartphones. QWI (Qualcomm Wireless & Internet), which includes our Omnitracs, QIS, QGOV and QRS divisions, generates revenues primarily through sales of products, services (including software development) and software aimed at the support and delivery of wireless applications. Omnitracs sells integrated wireless systems and services to transportation and logistics companies to manage their assets and workforce. On August 21, 2013, we entered into a definitive agreement under which we agreed to sell the North and Latin American operations of Omnitracs to a U.S.-based private equity firm for $800 million in cash, subject to the terms and conditions of the definitive agreement. The transaction is subject to customary closing conditions, including receipt of regulatory approvals, and is expected to close in the first quarter of fiscal 2014. We expect to record the gain on sale, net of income taxes, as a discontinued operation upon close. However, the revenues and operating results were not presented as a discontinued operation in any fiscal period because they were immaterial. QIS (Qualcomm Internet Services) provides content enablement services for the wireless industry, including its Brew, Plaza and other products and services. QIS also provides QChat push-to-talk and other software products and services for wireless operators. QGOV (Qualcomm Government Technologies) provides development and other services and related products involving wireless communications technologies to government agencies and their contractors. QRS (Qualcomm Retail Solutions) builds and manages software applications that enable certain mobile location-awareness and commerce services. QWI revenues comprised 2%, 3% and 4% of total consolidated revenues in fiscal 2013 , 2012 and 2011 , respectively. QSI (Qualcomm Strategic Initiatives) makes strategic investments that we believe may open new or expand opportunities for our technologies, support the design and introduction of new products and services for voice and data communications or possess unique capabilities or technology. Many of these strategic investments are in early-stage companies. QSI also holds wireless spectrum. As part of our strategic investment activities, we intend to pursue various exit strategies from each of our QSI investments at some point in the future. During the third quarter of fiscal 2013, we deconsolidated subsidiaries that were established to operate a wireless network in India using broadband wireless access spectrum (the BWA subsidiaries) due to events that resulted in a change in control of these subsidiaries. The former BWA subsidiaries were merged into one entity on August 5, 2013, and on October 17, 2013, all of our interest in the remaining former subsidiary was sold. Nonreportable segments are comprised of our QMT (Qualcomm MEMS Technologies) division and other display, wireless technology and service initiatives that include, but are not limited to: low power consumption, high optical performance flat display modules; medical device connectivity and related data management; augmented reality; and device-to-device communication. QMT continues to develop an interferometric modulator (IMOD) display technology based on micro-electro-mechanical-systems (MEMS) structure combined with thin film optics. 31  Discontinued Operations On March 27, 2011, the FLO TV business and network were shut down. On December 27, 2011, we completed the sale of substantially all of our 700 MHz spectrum for $1.9 billion, and as a result, we recognized a gain in discontinued operations of $1.2 billion during fiscal 2012. The results of the discontinued FLO TV operations were as follows (in millions): Looking Forward The deployment of 3G networks has enabled increased voice capacity and higher data rates than prior generation networks, thereby supporting more minutes of use and a wide range of mobile broadband data applications for handsets, 3G connected computing devices and other consumer electronics. According to the Global mobile Suppliers Association (GSA), as of October 2013, to complement their existing 3G networks, more than 220 wireless operators have deployed and more than 420 wireless operators are planning to deploy OFDMA-based technology, often called 4G, in new wireless spectrum to gain additional capacity for data services. As a result, we expect continued growth in the coming years in consumer demand for 3G and 3G/4G multimode products and services around the world. As we look forward to the next several months, the following items are likely to have an impact on our business: In addition to the foregoing business and market-based matters, we continue to devote resources to working with and educating participants in the wireless value chain as to the benefits of our business model in promoting a highly competitive and innovative wireless industry. However, we expect that certain companies may continue to be dissatisfied with the need to pay reasonable royalties for the use of our technology and not welcome the success of our business model in enabling new, highly cost-effective competitors to their products. We expect that such companies will continue to challenge our business model in various forums throughout the world. Further discussion of risks related to our business is presented in the Risk Factors included in this Annual Report. Critical Accounting Estimates Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. On an ongoing basis, 32 Year Ended September 30, 2012 September 25, 2011 Revenues $ — $ 5 Income (loss) from discontinued operations $ 1,203 $ (507 ) Income tax (expense) benefit (427 ) 194 Discontinued operations, net of income taxes $ 776 $ (313 ) • The worldwide transition from 2G to 3G and 3G/4G networks is expected to continue, including the further expansion of 3G in emerging regions, such as China. We expect that the growth of low-tier smartphone products will contribute to such expansion. • We expect consumer demand for advanced 3G and 3G/4G multimode devices, including smartphones and data-centric devices, to continue at a strong pace. • We expect that CDMA-based device prices will continue to vary broadly due to the increased penetration of smartphones combined with active competition throughout the world at all price tiers. Additionally, varying rates of economic growth by region and stronger growth of CDMA-based device shipments in emerging regions, as compared to developed regions, are expected to continue to impact the average and range of selling prices of CDMA-based devices. • We continue to invest significant resources toward advancements to 3G, 3G/4G and 4G LTE (an OFDMA-based standard) technologies, audio and video codecs, wireless baseband chips, our converged computing/communications (Snapdragon) chips, multimedia products, software and services. We are also investing across a broad spectrum of opportunities that leverage our existing technical and business expertise to deploy new business models and enter into new industry segments, such as our IMOD and other display technologies; 3G/LTE and Wi-Fi products designed for implementation of small cells and the 1000x data challenge; wireless charging; proximity-based communications; very high speed connectivity; mobile location awareness and commerce; mobile health; wearable technology; gaming; and products for the connected home, the digital 6th sense and the Internet of Everything.  we evaluate our estimates and judgments, including those related to revenue recognition, valuation of intangible assets and investments, income taxes and litigation. We base our estimates on historical and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Although we believe that our estimates and the assumptions supporting our assessments are reasonable, actual results that differ from our estimates could have a significant adverse effect on our operating results and financial position. We believe that the following significant accounting estimates may involve a higher degree of judgment and complexity than others. Revenue Recognition. We derive revenue principally from sales of integrated circuit products and licensing of our intellectual property. The timing of revenue recognition and the amount of revenue actually recognized in each case depends upon a variety of factors, including the specific terms of each arrangement and the nature of our deliverables and obligations. We license or otherwise provide rights to use portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. Licensing revenues include license fees (payable in one or more installments) and ongoing royalties based on licensees’ sales of products incorporating or using our licensed intellectual property. License fees are recognized over the estimated period of benefit of the license to the licensee, typically 5 to 15 years . From time to time, licensees will not report royalties timely due to legal disputes or other reasons, and when this occurs, the timing and comparability of royalty revenues could be affected. Valuation of Intangible Assets and Investments. Our business acquisitions typically result in the recording of goodwill and other intangible assets, and the recorded values of those assets may become impaired in the future. We also acquire intangible assets in other types of transactions. At September 29, 2013 , our goodwill and other intangible assets, net of accumulated amortization, were $4.0 billion and $2.6 billion , respectively. The determination of the value of such intangible assets requires management to make estimates and assumptions that affect our consolidated financial statements. For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. For intangible assets acquired in a non-monetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values, unless the values of neither the assets received nor the assets transferred are determinable within reasonable limits, in which case the assets received are measured based on the carrying values of the assets transferred. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. An estimate of fair value can be affected by many assumptions that require significant judgment. For example, the income approach generally requires assumptions related to the appropriate business model to be used to estimate cash flows, total addressable market, pricing and share forecasts, competition, technology obsolescence, future tax rates and discount rates. Our estimate of the fair value of certain assets may differ materially from that determined by others who use different assumptions or utilize different business models. New information may arise in the future that affects our fair value estimates and could result in adjustments to our estimates in the future, which could have an adverse impact on our results of operations. Goodwill and other indefinite-lived intangible assets are tested annually for impairment and in interim periods if certain events occur indicating that the carrying amounts may be impaired. Long-lived assets, such as property and equipment and intangible assets subject to amortization, are reviewed for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Our judgments regarding the existence of impairment indicators and future cash flows related to goodwill and other intangible assets are based on operational performance of our businesses, market conditions and other factors. Although there are inherent uncertainties in this assessment process, the estimates and assumptions we use, including estimates of future cash flows, volumes, market penetration and discount rates, are consistent with our internal planning. If these estimates or their related assumptions change in the future, we may be required to record an impairment charge on a portion or all of our goodwill and other intangible assets. Furthermore, we cannot predict the occurrence of future impairment-triggering events nor the impact such events might have on our reported asset values. Future events could cause us to conclude that impairment indicators exist and that goodwill or other intangible assets associated with our acquired businesses are impaired. Any resulting impairment loss could have an adverse impact on our financial position and results of operations. During fiscal 2013 and 2012, we recorded $158 million and $54 million , respectively, in impairment charges resulting from revisions to our estimates of expected cash flows for certain long-lived assets of our QMT division as we continue to pursue our licensing model. We hold investments in marketable securities, including U.S. treasury and government-related securities, corporate bonds and notes, mortgage- and asset-backed securities, auction rate securities, common and preferred stock and equity and debt funds. The fair value of these investments totaled $23.3 billion at September 29, 2013 , with increases and decreases in fair value generally recorded through stockholders’ equity as other comprehensive income or loss. We record impairment charges through the statement of operations when we believe an investment has experienced a decline that is other than temporary. The determination that a decline is other than temporary is subjective and influenced by many factors. In addition, the fair values of our strategic investments may be subject to substantial quarterly and annual fluctuations and to significant market volatility. 33  Adverse changes in market conditions or poor operating results of investees could result in losses or an inability to recover the carrying value of the investments, thereby requiring impairment charges. When assessing these investments for an other-than-temporary decline in value, we consider such factors as, among other things, how significant the decline in value is as a percentage of the original cost; how long the market value of the investment has been below its original cost; the extent of the general decline in prices or an increase in the default or recovery rates of securities in an asset class; negative events such as a bankruptcy filing or a need to raise capital or seek financial support from the government or others; the performance and pricing of the investee’s securities in relation to the securities of its competitors within the industry and the market in general; and analyst recommendations, as applicable. We also review the financial statements of the investee to determine if the investee is experiencing financial difficulties. If we determine that a security price decline is other than temporary, we record an impairment loss, which could have an adverse impact on our results of operations. During fiscal 2013 , 2012 and 2011 , we recorded $72 million , $71 million and $39 million, respectively, in net impairment losses on our investments in marketable securities. Income Taxes. Our income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service (IRS) and other tax authorities. In addition, the calculation of our tax liabilities involves uncertainties in the application of complex tax regulations. We recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While we believe we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of our provision for income taxes. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. We are participating in the IRS Compliance Assurance Process program whereby we endeavor to agree with the IRS on the treatment of all issues prior to filing our federal return. A benefit of participation in this program is that post-filing adjustments by the IRS are less likely to occur. We regularly review our deferred tax assets for recoverability and establish a valuation allowance based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and the implementation of tax-planning strategies. At September 29, 2013 , net deferred tax assets were $1.6 billion , which included a valuation allowance of $51 million . If we are unable to generate sufficient future taxable income in certain tax jurisdictions, or if there is a material change in the time period within which the underlying temporary differences become taxable or deductible, we could be required to increase the valuation allowance against our deferred tax assets, which could result in an increase in our effective tax rate and an adverse impact on operating results. We can only use net operating losses to offset taxable income of certain legal entities in certain tax jurisdictions. At September 29, 2013 , we had unused federal, state and foreign net operating losses of $131 million , $604 million and $75 million , respectively. Based upon our assessments of projected future taxable income and losses and historical losses incurred by these entities, we expect that the future taxable income of the entities in these tax jurisdictions will not be sufficient to utilize the net operating losses we have incurred through fiscal 2013 . Therefore, we have provided a $32 million valuation allowance for these net operating losses. Significant judgment is required to forecast the timing and amount of future taxable income in certain jurisdictions. Adjustments to our valuation allowance based on changes to our forecast of taxable income are reflected in the period the change is made. Our QCT segment’s non-United States headquarters is located in Singapore. We obtained tax incentives in Singapore, including a tax exemption for the first five years, provided that we meet specified employment and incentive criteria, and as a result of expiration of these incentives, our Singapore tax rate will increase in fiscal 2017 and again in fiscal 2027. We consider the operating earnings of certain non-United States subsidiaries to be indefinitely invested outside the United States based on estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. We have not recorded a deferred tax liability of approximately $7.6 billion related to the United States federal and state income taxes and foreign withholding taxes on approximately $21.6 billion of undistributed earnings of foreign subsidiaries indefinitely invested outside the United States. Should we decide to repatriate the foreign earnings, we would have to adjust the income tax provision in the period we determined that the earnings will no longer be indefinitely invested outside the United States. Litigation. We are currently involved in certain legal proceedings, and we intend to continue to vigorously defend ourselves. However, the unfavorable resolution of one or more of these proceedings could have a material adverse effect on our business, results of operations, financial condition or cash flows. We estimate the range of liability related to pending litigation where the amount and range of loss can be estimated. We record our best estimate of a loss when the loss is considered probable. Where a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the claim. As additional information becomes available, we assess the potential liability 34  related to our pending litigation and revise our estimates. Revisions in our estimates of the potential liability could materially impact our results of operations. Results of Operations The increases in equipment and services revenues in fiscal 2013 and 2012 were primarily due to increases in QCT revenues of $4.58 billion and $3.25 billion, respectively. The increases in licensing revenues in fiscal 2013 and 2012 were primarily due to increases in QTL revenues of $1.23 billion and $905 million, respectively. QCT and QTL segment revenues related to the products of Samsung Electronics and Hon Hai Precision Industry Co., Ltd/Foxconn, its affiliates and other suppliers to Apple Inc. comprised 43% and 38% of total consolidated revenues in fiscal 2013 and 2012, respectively. QCT and QTL segment revenues from Samsung Electronics and HTC comprised 26% of total consolidated revenues in fiscal 2011. Revenues from customers in China, South Korea and Taiwan comprised 49% , 20% and 11% , respectively, of total consolidated revenues for fiscal 2013 , as compared to 42% , 22% , and 14% , respectively, for fiscal 2012 , and 32% , 19% and 17% , for fiscal 2011 . We distinguish revenues from external customers by geographic areas based on the location to which our products, software or services are delivered or, for QTL licensing revenues, the invoiced addresses of our licensees. The decreases in margin percentage in fiscal 2013 and 2012 were primarily attributable to decreases in QCT gross margin percentage. Our margin percentage may continue to fluctuate in future periods depending on the mix of products sold and services provided, competitive pricing, new product introduction costs and other factors. The dollar increases in research and development expenses in fiscal 2013 and 2012 were primarily attributable to increases of $904 million and $741 million, respectively, in costs related to the development of CDMA-based 3G, OFDMA-based 4G LTE and other technologies for integrated circuit and related software products and to expand our intellectual property portfolio and increases of $97 million and $149 million, respectively, in share-based compensation. Remaining dollar increases were related to research and development of other new product and licensing initiatives. The dollar increase in selling, general and administrative expenses in fiscal 2013 was primarily attributable to a $113 million increase in employee-related expenses, a $56 million increase in selling and marketing expenses, a $40 million increase in patent-related expenses and a $29 million increase in depreciation and amortization expense, partially offset by a decrease of $23 million in share-based compensation. The dollar increase in selling, general and administrative expenses in fiscal 2012 was primarily attributable to a $96 million increase in employee-related expenses, a $77 million increase in costs related to litigation and other legal matters, a $65 million increase in share-based compensation, a $45 million increase in selling and marketing expenses and a $28 million increase in patent-related expenses, partially offset by a $55 million decrease in charitable contributions (primarily related to the establishment and initial funding of the Qualcomm Charitable Foundation in fiscal 2011). 35 Revenues (in millions) Year Ended September 29, 2013 September 30, 2012 September 25, 2011 2013 vs. 2012 Change 2012 vs. 2011 Change Equipment and services $ 16,988 $ 12,465 $ 9,223 $ 4,523 $ 3,242 Licensing 7,878 6,656 5,734 1,222 922 $ 24,866 $ 19,121 $ 14,957 $ 5,745 $ 4,164 Costs and Expenses (in millions) Year Ended September 29, 2013 September 30, 2012 September 25, 2011 2013 vs. 2012 Change 2012 vs. 2011 Change Cost of equipment and services (E&S) revenues $ 9,820 $ 7,096 $ 4,877 $ 2,724 $ 2,219 Cost as % of E&S revenues 58 % 57 % 53 % Year Ended September 29, 2013 September 30, 2012 September 25, 2011 2013 vs. 2012 Change 2012 vs. 2011 Change Research and development $ 4,967 $ 3,915 $ 2,995 $ 1,052 $ 920 % of revenues 20 % 20 % 20 % Selling, general, and administrative $ 2,518 $ 2,270 $ 1,945 $ 248 $ 325 % of revenues 10 % 12 % 13 % Other $ 331 $ 158 $ 114 $ 173 $ 44  Other expenses in fiscal 2013 were comprised of a $173 million charge resulting from the ParkerVision verdict against us and a $158 million impairment charge resulting from revisions to our estimates of expected cash flows for certain long-lived assets of our QMT division as we continue to pursue our licensing model. Other expenses in fiscal 2012 were comprised of an $81 million charge related to a payment made to the Indian government concurrent with the issuance of the BWA spectrum license, a $54 million impairment charge related to certain long-lived assets of our QMT division and $23 million in goodwill impairment charges related to our QRS division. Other expenses in fiscal 2011 were comprised of a $114 million goodwill impairment charge related to our QRS division. The increases in interest and dividend income resulted from higher average balances of cash, cash equivalents and marketable securities in fiscal 2013 and 2012 and higher interest rates in fiscal 2012 compared to fiscal 2011. The decreases in interest expense resulted from capitalizing a portion of interest starting in fiscal 2012 related to the former BWA subsidiaries, which were deconsolidated in fiscal 2013. Net gains on derivative instruments in fiscal 2012 primarily resulted from changes in the fair value of put options sold in connection with our stock repurchase program that expired in fiscal 2012. The following table summarizes the primary factors that caused our annual effective tax rates to be less than the United States federal statutory rate: The effective tax rate for fiscal 2013 reflected a tax benefit of $64 million related to fiscal 2012 resulting from the retroactive extension of the United States research and development tax credit. Additionally, the effective tax rate for fiscal 2013 as compared to fiscal 2012 reflected increased foreign earnings taxed at less than the United States federal rate. The effective tax rate for fiscal 2012 as compared to fiscal 2011 reflected a reduction in our effective state tax rate as a result of California tax legislation previously enacted, partially offset by increased earnings taxed at the United States tax rate. The annual effective tax rate for fiscal 2012 only reflected the United States federal research and development credit generated through December 31, 2011, the date on which the credit expired. 36 Net Investment Income (in millions) Year Ended September 29, 2013 September 30, 2012 September 25, 2011 2013 vs. 2012 Change 2012 vs. 2011 Change Interest and dividend income $ 697 $ 609 $ 500 $ 88 $ 109 Interest expense (23 ) (90 ) (114 ) 67 24 Net realized gains on marketable securities 317 342 335 (25 ) 7 Net realized gains on other investments 52 27 2 25 25 Impairment losses on marketable securities and other investments (85 ) (83 ) (52 ) (2 ) (31 ) Net gains (losses) on derivative instruments — 84 (3 ) (84 ) 87 Net gains on deconsolidation of subsidiaries 12 — — 12 — Equity in net losses of investees (6 ) (9 ) (7 ) 3 (2 ) $ 964 $ 880 $ 661 $ 84 $ 219 Income Tax Expense (in millions) Year Ended September 29, 2013 September 30, 2012 September 25, 2011 2013 vs. 2012 Change 2012 vs. 2011 Change Income tax expense $ 1,349 $ 1,279 $ 1,132 $ 70 $ 147 Effective tax rate 16 % 19 % 20 % (3 )% (1 )% Year Ended September 29, 2013 September 30, 2012 September 25, 2011 Expected income tax provision at federal statutory tax rate 35 % 35 % 35 % State income tax provision, net of federal benefit —% —% 5 % Benefits from foreign income taxed at other than U.S. rates (17 %) (16 %) (19 %) Benefits related to the research and development tax credit (2 %) (1 %) (3 %) Change in valuation allowance —% 1 % 1 % Other —% —% 1 % Effective tax rate 16 % 19 % 20 %  The effective tax rate for fiscal 2011 reflected tax benefits of $44 million related to an agreement reached on a component of our fiscal 2006 through fiscal 2010 state tax returns and $32 million related to fiscal 2010 resulting from the retroactive extension of the United States federal research and development tax credit. Our Segment Results (in millions) The following should be read in conjunction with the fiscal 2013 , 2012 and 2011 financial results for each reporting segment. See “Notes to Consolidated Financial Statements, Note 8. Segment Information.” QCT Segment. The increases in QCT revenues in fiscal 2013 and 2012 of $4.57 billion and $3.28 billion, respectively, were primarily due to increases in equipment and services revenues. Equipment and services revenues, mostly related to sales of MSM and accompanying RF and PM integrated circuits, were $16.49 billion, $11.91 billion and $8.65 billion in fiscal 2013 , 2012 and 2011 , respectively. The increases in equipment and services revenues in fiscal 2013 and 2012 resulted primarily from increases of $2.09 billion and $651 million, respectively, related to the net effects of changes in product mix and lower average selling prices of such products, increases of $2.05 billion and $1.71 billion, respectively, related to higher unit shipments and increases of $212 million and $803 million, respectively, related to sales of connectivity products. Approximately 716 million, 590 million and 483 million MSM integrated circuits were sold during fiscal 2013 , 2012 and 2011 , respectively. QCT EBT as a percentage of revenues remained flat in fiscal 2013 as compared to fiscal 2012. During fiscal 2013, QCT revenues increased 38% relative to a combined increase of 26% in research and development expenses and selling, general and administrative expenses, partially offset by a decrease in gross margin percentage. The decrease in QCT EBT as a percentage of revenues in fiscal 2012 was primarily due to a decrease in gross margin percentage, partially offset by an increase of 37% in QCT revenues relative to a combined increase of 33% in research and development expenses and selling, general and administrative expenses. QCT gross margin percentage decreased in fiscal 2013 as a result of the net effects of lower average selling prices and unfavorable product mix, partially offset by a decrease in average unit costs. QCT gross margin percentage decreased in fiscal 2012 as a result of the net effects of lower average selling prices, unfavorable product mix and higher product support costs, partially offset by a decrease in average unit costs. The higher product support costs in fiscal 2012 primarily related to increased expenses incurred to facilitate additional supply of 28 nanometer integrated circuits. QCT inventories increased by 34% in fiscal 2013 from $973 million to $1.30 billion primarily due to certain higher value MSM products and an increase in work-in-process and finished goods related to growth of the business. QTL Segment. The increases in QTL revenues in fiscal 2013 and 2012 of $1.23 billion and $905 million, respectively, were primarily due to increases in sales of CDMA-based devices by licensees. The net increase in QTL revenues in fiscal 2012 also included the effect of $401 million in revenues recorded in fiscal 2011 in connection with settlement agreements entered into with two licensees. The decrease in QTL EBT as a percentage of revenues during fiscal 2013 was attributable to an increase of 19% in revenues relative to an increase of 29% in costs and expenses primarily due to increased allocation of patent expenses in connection with the corporate reorganization and increased research and development expenses. QWI Segment. The decrease in QWI revenues in fiscal 2013 was primarily due to a decrease of $13 million in QIS revenues. The decrease in QWI revenues in fiscal 2012 was primarily due to a $25 million decrease in Omnitracs revenues. QWI costs and expenses in fiscal 2012 and 2011 included $23 million and $114 million respectively, of goodwill impairment charges related to our QRS division. The $16 million decrease in QWI EBT during fiscal 2013, excluding the impairment 37 QCT QTL QWI QSI 2013 Revenues $ 16,715 $ 7,554 $ 613 $ — EBT (1) 3,189 6,590 (8 ) 56 EBT as a % of revenues 19 % 87 % (1 %) 2012 Revenues $ 12,141 $ 6,327 $ 633 $ — EBT (1) 2,296 5,585 (15 ) (170 ) EBT as a % of revenues 19 % 88 % (2 %) 2011 Revenues $ 8,859 $ 5,422 $ 656 $ — EBT (1) 2,056 4,753 (152 ) (132 ) EBT as a % of revenues 23 % 88 % (23 %) (1) Earnings (loss) before taxes.  charges, was primarily attributable to a $19 million increase in QRS operating loss (before the impairment charges). The $46 million increase in QWI EBT in fiscal 2012, excluding the impairment charges, was primarily attributable to a $26 million decrease in QRS operating loss (before the impairment charges) and a $25 million decrease in QIS operating loss. QSI Segment . QSI costs and expenses for fiscal 2012 included $81 million related to a payment made to the Indian government concurrent with the issuance of the BWA spectrum license. The increases in QSI EBT in fiscal 2013 and 2012 of $145 million and $43 million, respectively, excluding this expense, were primarily due to increases of $67 million and $40 million, respectively, in net realized gains on investments and decreases of $60 million and $20 million, respectively, in interest expense as a result of capitalizing interest starting in the third quarter of fiscal 2012 related to the BWA subsidiaries, which were deconsolidated in fiscal 2013. Liquidity and Capital Resources Our principal sources of liquidity are our existing cash, cash equivalents and marketable securities, cash generated from operations and proceeds from the issuance of common stock under our stock option and employee stock purchase plans. Cash, cash equivalents and marketable securities were $29.4 billion at September 29, 2013 , an increase of $2.6 billion from September 30, 2012 . This increase included $1.5 billion in proceeds from the issuance of common stock under our equity compensation plans. Our cash, cash equivalents and marketable securities at September 29, 2013 consisted of $8.1 billion held by United States-based subsidiaries and $21.3 billion held by foreign subsidiaries. Of our cash, cash equivalents and marketable securities at September 29, 2013 , $21.2 billion is indefinitely reinvested and would be subject to material tax effects if repatriated. Due to tax considerations, we derive liquidity for operations primarily from domestic cash flow and investments held domestically. Total cash provided by operating activities increased to $8.8 billion during fiscal 2013 , compared to $6.0 billion during fiscal 2012 . During fiscal 2013 , we repurchased and retired 71,696,000 shares of common stock for $4.6 billion , before commissions. At September 29, 2013 , approximately $4.9 billion remained available for repurchase under a new stock repurchase program announced in September, and we currently expect to complete a minimum of $4 billion of stock repurchases during fiscal 2014. The stock repurchase program has no expiration date. We continue to evaluate repurchases as a means of returning capital to stockholders, subject to our periodic determinations that repurchases are in the best interests of our stockholders. We paid dividends totaling $2.1 billion and $1.6 billion, or $1.20 and $0.93 per common share, during fiscal 2013 and 2012 , respectively. On March 5, 2013, we announced an increase in our quarterly dividend from $0.25 to $0.35 per share of common stock. On October 24, 2013 , we announced a cash dividend of $0.35 per share of common stock, payable on December 19, 2013 to stockholders of record as of December 2, 2013 . We intend to continue to use cash dividends as a means of returning capital to stockholders, subject to capital availability and our view that cash dividends are in the best interests of our stockholders. Accounts receivable increased 47% during fiscal 2013 . Days sales outstanding, on a consolidated basis, were 30 days at September 29, 2013 compared to 29 days at September 30, 2012 . The increase in accounts receivable and the related days sales outstanding were primarily due to growth of the business and the effects of timing of shipments and customer payments for receivables related to integrated circuits. We believe our current cash, cash equivalents and marketable securities and our expected cash flow generated from operations will provide us with flexibility and satisfy our working and other capital requirements over the next fiscal year and beyond based on our current business plans. 38 • Our research and development expenditures were $5.0 billion and $3.9 billion in fiscal 2013 and 2012 , respectively, and we expect to continue to invest heavily in research and development for new technologies, applications and services for voice and data communications, primarily in the wireless industry. • Cash outflows for capital expenditures were $1.0 billion and $1.3 billion in fiscal 2013 and 2012 , respectively, including approximately $480 million in fiscal 2012 related to the construction of a new manufacturing facility in Taiwan for our QMT division. We expect to continue to incur capital expenditures in the future to support our business, including research and development activities. Future capital expenditures may be impacted by transactions that are currently not forecasted. • Our purchase obligations for fiscal 2014 , some of which relate to research and development activities and capital expenditures, totaled $3.3 billion at September 29, 2013 . • On August 21, 2013, we entered into a definitive agreement under which we agreed to sell the North and Latin American operations of our Omnitracs division for $800 million, subject to closing conditions, including receipt of regulatory approvals. We expect the transaction to close in the first quarter of fiscal 2014.  Contractual Obligations / Off-Balance Sheet Arrangements We have no significant contractual obligations not fully recorded on our consolidated balance sheets or fully disclosed in the notes to our consolidated financial statements. We have no material off-balance sheet arrangements as defined in S-K 303(a)(4)(ii). At September 29, 2013 , our outstanding contractual obligations included (in millions): Contractual Obligations Payments Due By Fiscal Period Additional information regarding our financial commitments at September 29, 2013 is provided in the notes to our consolidated financial statements. See “Notes to Consolidated Financial Statements, Note 7. Commitments and Contingencies.” Recent Accounting Pronouncements In February 2013, the Financial Accounting Standards Board (FASB) issued guidance on disclosure requirements for items reclassified out of accumulated other comprehensive income. This new guidance requires entities to present (either on the face of the statement of operations or in the notes to the financial statements) the effects on the line items in the statement of operations for amounts reclassified out of accumulated other comprehensive income. The new guidance will be effective for us beginning in the first quarter of fiscal 2014. The adoption of the guidance will impact our financial statement presentation and/or our disclosures but will not impact our financial position, results of operations or cash flows. Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk. We invest a portion of our cash in a number of diversified fixed and floating rate securities, consisting of cash equivalents, marketable debt securities, debt funds and derivative instruments, including interest rate swaps, that are subject to interest rate risk. Changes in the general level of interest rates can affect the fair value of our investment portfolio. If interest rates in the general economy were to rise, our holdings could lose value. Historically, we presented a table that disclosed certain information (including principal or notional amounts, interest rates and maturities) regarding our interest-bearing instruments. However, given the increased size and diversity in our investment portfolio, we believe that providing a sensitivity analysis provides more meaningful disclosure regarding the impact to our holdings of potential changes in interest rates. As a result, in lieu of the tabular presentation, we are providing a sensitivity analysis that shows the effect of an assumed 100 basis point adverse movement in interest rates across the entire yield curve. 39 • We expect to continue making strategic investments and acquisitions, the amounts of which could vary significantly, to open new opportunities for our technologies, obtain development resources, grow our patent portfolio or pursue new business. Total 2014 2015-2016 2017-2018 Beyond 2018 No Expiration Date Purchase obligations (1) $ 3,558 $ 3,284 $ 256 $ 8 $ 10 $ — Operating lease obligations 343 89 135 72 47 — Capital lease obligations (2) 36 1 3 3 29 — Equity funding commitments (3) 2 — — — — 2 Other long-term liabilities (4)(5) 42 — 26 8 6 2 Total contractual obligations $ 3,981 $ 3,374 $ 420 $ 91 $ 92 $ 4 (1) Total purchase obligations include $2.8 billion in commitments to purchase integrated circuit product inventories. Integrated circuit product inventory obligations represent purchase commitments for silicon wafers and assembly and test services. Under our manufacturing relationships with our foundry partners and assembly and test service providers, cancelation of outstanding purchase orders is generally allowed but requires payment of all costs incurred through the date of cancelation. (2) Amounts represent future minimum lease payments including interest payments. Capital lease obligations are included in other liabilities in the consolidated balance sheet at September 29, 2013 . (3) These commitments do not have fixed funding dates and are subject to certain conditions. Commitments represent the maximum amounts to be financed or funded under these arrangements; actual financing or funding may be in lesser amounts or not at all. (4) Certain long-term liabilities reflected on our balance sheet, such as unearned revenues, are not presented in this table because they do not require cash settlement in the future. Other long-term liabilities as presented in this table include the related current portions. (5) Our consolidated balance sheet at September 29, 2013 included a $208 million noncurrent liability for uncertain tax positions, all of which may result in cash payment. The future payments related to uncertain tax positions have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.  At September 29, 2013 , a hypothetical increase in interest rates of 100 basis points on our holdings would have resulted in decreases of $9 million and $443 million in the fair values of our holdings classified as trading (including derivative instruments) and our remaining holdings, respectively. At September 30, 2012, the same hypothetical increase in interest rates would have resulted in decreases of $17 million and $430 million in the fair values of our holdings classified as trading (including derivative instruments) and our remaining holdings, respectively. Equity Price Risk. We hold a diversified marketable securities portfolio that includes equity securities and fund shares that are subject to equity price risk. We have made investments in marketable equity securities of companies of varying size, style, industry and geography, and changes in investment allocations may affect the price volatility of our investments. A 10% decrease in the market price of our marketable equity securities and fund shares at September 29, 2013 would cause a decrease in the carrying amounts of these securities of $332 million. At September 29, 2013 , gross unrealized losses of our marketable equity securities and fund shares were $44 million. Although we consider these unrealized losses to be temporary, there is a risk that we may incur other-than-temporary impairment charges or realized losses on the values of these securities if they do not recover in value within a reasonable period. Foreign Exchange Risk. We manage our exposure to foreign exchange market risks, when deemed appropriate, through the use of derivative financial instruments, including foreign currency forward and option contracts with financial counterparties. We utilize such derivative financial instruments for hedging or risk management purposes rather than for speculation purposes. Counterparties to our derivative contracts are all major banking institutions. In the event of the financial insolvency or distress of a counterparty to our derivative financial instruments, we may be unable to settle transactions if the counterparty does not provide us with sufficient collateral to secure its net settlement obligations to us, which could have a negative impact on our results. See “Notes to Consolidated Financial Statements, Note 1. The Company and Its Significant Accounting Policies” for a description of our foreign currency accounting policies. At September 29, 2013 , we had a net asset of $37 million related to foreign currency option contracts that were designated as hedges of foreign currency risk on royalties earned from certain licensees on their sales of CDMA-based devices. If our forecasted royalty revenues were to decline by 20% and foreign exchange rates were to change unfavorably by 20% in our hedged foreign currency, we would incur a loss of $1 million. At September 29, 2013 , we had a net liability of $8 million related to foreign currency forward contracts that were designated as hedges of foreign currency risk on intercompany payments of operating expenditures relating to a wholly-owned foreign subsidiary. If our forecasted operating expenditures were to decline by 20% and foreign exchange rates were to change unfavorably by 20% in each of our hedged foreign currencies, we would not incur a loss. At September 29, 2013 , we had a net liability of $14 million related to foreign currency forwards, futures, options and swaps that were not designated as hedging instruments related to our marketable securities portfolios classified as trading. If the foreign exchange rates relevant to these contracts were to change unfavorably by 10% and we do not have an offset foreign currency exposure relating to debt instruments held in our marketable securities portfolios classified as trading, we would incur a loss of $2 million. Financial assets and liabilities held by consolidated subsidiaries that are not denominated in the functional currency of those entities are subject to the effects of currency fluctuations and may affect reported earnings. As a global company, we face exposure to adverse movements in foreign currency exchange rates. We may hedge currency exposures associated with certain assets and liabilities denominated in nonfunctional currencies and certain anticipated nonfunctional currency transactions. As a result, we could experience unanticipated gains or losses on anticipated foreign currency cash flows, as well as economic loss with respect to the recoverability of investments. While we may hedge certain transactions with non-United States customers, declines in currency values in certain regions may, if not reversed, adversely affect future product sales because our products may become more expensive to purchase in the countries of the affected currencies. Our analysis methods used to assess and mitigate the risks discussed above should not be considered projections of future risks. Item 8. Financial Statements and Supplementary Data Our consolidated financial statements at September 29, 2013 and September 30, 2012 and the Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, are included in this Annual Report on Form 10-K on pages F-1 through F-36. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 40  Item 9A. Controls and Procedures Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such terms are defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under this framework, our management concluded that our internal control over financial reporting was effective as of September 29, 2013 . PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of September 29, 2013 , as stated in its report which appears on page F-1. Inherent Limitations over Internal Controls Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly, even an effective internal control system may not prevent or detect material misstatements on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the fourth quarter of fiscal 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this item regarding directors is incorporated by reference to our Definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with our Annual Meeting of Stockholders to be held in 2014 (the 2014 Proxy Statement) under the headings “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance.” Certain information required by this item regarding executive officers is set forth in Item 1 of Part I of this Report under the caption “Executive Officers,” and certain information is incorporated by reference to the 2014 Proxy Statement under the heading “Section 16(a) Beneficial Ownership Reporting Compliance.” The information required by this item regarding corporate governance is incorporated by reference to the 2014 Proxy Statement under the headings “Code of 41 i. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; ii. provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and iii. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.  Ethics and Corporate Governance Principles and Practices,” “Director Nominations” and “Board Meetings, Committees and Attendance.” Item 11. Executive Compensation The information required by this item is incorporated by reference to the 2014 Proxy Statement under the headings “Executive Compensation and Related Information,” “Director Compensation,” “Compensation Committee Interlocks and Insider Participation in Compensation Decisions” and “Compensation Committee Report.” Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item is incorporated by reference to the 2014 Proxy Statement under the headings “Equity Compensation Plan Information” and “Stock Ownership of Certain Beneficial Owners and Management.” Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item is incorporated by reference to the 2014 Proxy Statement under the headings “Certain Relationships and Related-Person Transactions” and “Director Independence.” Item 14. Principal Accounting Fees and Services The information required by this item is incorporated by reference to the 2014 Proxy Statement under the heading “Fees for Professional Services.” 42  PART IV Item 15. Exhibits and Financial Statement Schedules The following documents are filed as part of this report: Financial statement schedules other than those listed above have been omitted because they are either not required, not applicable or the information is otherwise included in the notes to the consolidated financial statements. (b) Exhibits 43 Page Number (a) Financial Statements: (1) Report of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets at September 29, 2013 and September 30, 2012 F-2 Consolidated Statements of Operations for Fiscal 2013, 2012 and 2011 F-3 Consolidated Statements of Comprehensive Income for Fiscal 2013, 2012 and 2011 F-4 Consolidated Statements of Cash Flows for Fiscal 2013, 2012 and 2011 F-5 Consolidated Statements of Stockholders’ Equity for Fiscal 2013, 2012 and 2011 F-6 Notes to Consolidated Financial Statements F-7 (2) Schedule II - Valuation and Qualifying Accounts S-1 Exhibit Number Description 3.1 Restated Certificate of Incorporation, as amended. (1) 3.4 Amended and Restated Bylaws. (2) 4.1 Amended and Restated Rights Agreement dated as of September 26, 2005 between the Company and Computershare Trust Company, N.A., as successor Rights Agent to Computershare Investor Services LLC. (3) 4.2 Amendment dated as of December 7, 2006 to the Amended and Restated Rights Agreement dated as of September 26, 2005 between the Company and Computershare Trust Company, N.A., as successor Rights Agent to Computershare Investor Services LLC. (4) 10.1 Form of Indemnity Agreement between the Company, each director and certain officers. (5)(6) 10.40 Form of Stock Option Grant Notice and Agreement under the 2001 Stock Option Plan. (5)(7) 10.43 Form of Stock Option Grant Notice and Agreement under the 2001 Non-Employee Directors’ Stock Option Plan. (5)(8) 10.55 2001 Stock Option Plan, as amended. (5)(9) 10.66 2001 Non-Employee Directors’ Stock Option Plan, as amended. (5)(10) 10.84 Form of Grant Notice and Stock Option Agreement under the 2006 Long-Term Incentive Plan. (5)(11) 10.86 Form of Grant Notice and Market Stock Unit Agreement under the 2006 Long-Term Incentive Plan. (5)(12) 10.94 2006 Long-Term Incentive Plan, as amended and restated. (5)(13) 10.95 Amended and Restated QUALCOMM Incorporated 2001 Employee Stock Purchase Plan. (5)(13) 10.96 Atheros Communications, Inc. 2004 Stock Incentive Plan, as amended. (5)(14) 10.97 Atheros Communications, Inc. 2009 Inducement Grant Incentive Plan. (5)(14) 10.98 Atheros Communications, Inc. (formerly T-Span Corporation) 1998 Stock Incentive Plan, as amended. (5)(14) 10.99 Third Amended and Restated Intellon Corporation 2000 Employee Incentive Plan. (5)(14) 10.100 Intellon Corporation 2007 Equity Incentive Plan. (5)(14) 10.101 Resolutions Amending Atheros Communications, Inc. Equity Plans. (5)(14) 10.102 Executive Retirement Matching Contribution Plan, amended and restated generally effective January 1, 2011, as subsequently amended by Amendment Number 1 and Amendment Number 2. (5)(15) 10.103 Amendment to the 2006 Long-Term Incentive Plan, as amended and restated. (5)(15)  44 10.104 Form of Grant Notices and Global Employee Stock Option Agreement under the 2006 Long-Term Incentive Plan. (5)(15) 10.105 Form of Grant Notices and Global Employee Restricted Stock Unit Agreement under the 2006 Long-Term Incentive Plan. (5)(15) 10.106 Form of Grant Notice and Performance Stock Unit Agreement under the 2006 Long-Term Incentive Plan for the November 1, 2010 to October 31, 2013 performance periods. (5)(15) 10.107 Form of Grant Notices and Performance Stock Unit Agreements under the 2006 Long-Term Incentive Plan for the September 26, 2011 to September 26, 2014 performance periods, including variation of forms for employee in the United Kingdom. (5)(15) 10.108 Form of Performance Unit Agreements for the Annual Cash Incentive Plan under the 2006 Long-Term Incentive Plan for the fiscal 2012 performance period. (5)(15) 10.110 Executive Retirement Matching Contribution Plan amended and restated generally effective January 1, 2011, as subsequently amended by Amendment Number 1, Amendment Number 2 and Amendment Number 3. (5)(16) 10.111 Form of Performance Unit Agreements for the Annual Cash Incentive Plan under the 2006 Long-Term Incentive Plan for the fiscal 2013 performance period. (5)(16) 10.112 2006 Long-Term Incentive Plan, as amended and restated. (5)(17) 10.113 Amended and Restated QUALCOMM Incorporated 2001 Employee Stock Purchase Plan. (5)(17) 10.114 Form of Aircraft Time Sharing Agreement. (5)(18) 10.115 Form of Executive Grant Notices and Executive Performance Stock Unit Agreements under the 2006 Long-Term Incentive Plan for the September 30, 2013 to September 27, 2015 performance periods. (5) 10.116 Non-Qualified Deferred Compensation Plan (formerly known as Executive Retirement Matching Contribution Plan) amended and restated effective September 30, 2013. (5) 10.117 Form of Grant Notices and Non-Employee Director Restricted Stock Unit Agreements under the 2006 Long-Term Incentive Plan for non-employee directors residing in the United Kingdom and Hong Kong. (5) 10.118 Form of Executive Grant Notice and Executive Performance Stock Unit Agreement under the 2006 Long-Term Incentive Plan, which includes a September 30, 2013 to June 29, 2014 performance period. (5) 10.119 Form of Grant Notices and Non-Employee Director Deferred Stock Unit Agreements under the 2006 Long-Term Incentive Plan for non-employee directors residing in the United States and Spain. (5) 21 Subsidiaries of the Registrant. 23.1 Consent of Independent Registered Public Accounting Firm. 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Paul E. Jacobs. 31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for George S. Davis. 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Paul E. Jacobs. 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for George S. Davis. 101.INS XBRL Instance Document. 101.SCH XBRL Taxonomy Extension Schema. 101.CAL XBRL Taxonomy Extension Calculation Linkbase. 101.LAB XBRL Taxonomy Extension Labels Linkbase. 101.PRE XBRL Taxonomy Extension Presentation Linkbase. 101.DEF XBRL Taxonomy Extension Definition Linkbase. (1) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 25, 2012. (2) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed on July 11, 2012. (3) Filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 000-19528) filed on September 30, 2005. (4) Filed as an Exhibit to the Registrant’s Current Report on Form 8-K (File No. 000-19528) filed on December 12, 2006. (5) Indicates management or compensatory plan or arrangement required to be identified pursuant to Item 15(a). (6) Filed as an exhibit to the Registrant’s Registration Statement on Form S-1 (No. 33-42782). (7) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-19528) for the quarter ended June 27, 2004. (8) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-19528) for the quarter ended April 1, 2001. (9) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-19528) for the quarter ended March 28, 2004.  45 (10) Filed as an exhibit to the Registrant’s Current Report on Form 8-K/A (File No. 000-19528) filed on May 6, 2005. (11) Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended September 27, 2009. (12) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 27, 2009. (13) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 27, 2011. (14) Filed as an exhibit to the Registrant’s Registration Statement on Form S-8 filed on June 1, 2011. (15) Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended September 30, 2012. (16) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 30, 2012. (17) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013. (18) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.  SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. November 6, 2013 46 QUALCOMM Incorporated By /s/ Paul E. Jacobs Paul E. Jacobs, Chief Executive Officer and Chairman  Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: 47 Signature Title Date /s/ Paul E. Jacobs Chief Executive Officer and Chairman November 6, 2013 Paul E. Jacobs (Principal Executive Officer) /s/ George S. Davis Chief Financial Officer November 6, 2013 George S. Davis (Principal Financial and Accounting Officer) /s/ Barbara T. Alexander Director November 6, 2013 Barbara T. Alexander /s/ Donald G. Cruickshank Director November 6, 2013 Donald G. Cruickshank /s/ Raymond V. Dittamore Director November 6, 2013 Raymond V. Dittamore /s/ Susan Hockfield Director November 6, 2013 Susan Hockfield /s/ Thomas W. Horton Director November 6, 2013 Thomas W. Horton /s/ Sherry L. Lansing Director November 6, 2013 Sherry L. Lansing /s/ Duane A. Nelles Director November 6, 2013 Duane A. Nelles /s/ Clark T. Randt, Jr. Director November 6, 2013 Clark T. Randt, Jr. /s/ Francisco Ros Director November 6, 2013 Francisco Ros /s/ Jonathan J. Rubinstein Director November 6, 2013 Jonathan J. Rubinstein /s/ Brent Scowcroft Director November 6, 2013 Brent Scowcroft /s/ Marc I. Stern Director November 6, 2013 Marc I. Stern  Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of QUALCOMM Incorporated: In our opinion, the accompanying consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of QUALCOMM Incorporated and its subsidiaries at September 29, 2013 and September 30, 2012 and the results of their operations and their cash flows for each of the three years in the period ended September 29, 2013 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 29, 2013 , based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ PricewaterhouseCoopers LLP San Diego, California November 6, 2013 F- 1  QUALCOMM Incorporated CONSOLIDATED BALANCE SHEETS (In millions, except per share data) See accompanying notes. September 29, 2013 September 30, 2012 ASSETS Current assets: Cash and cash equivalents $ 6,142 $ 3,807 Marketable securities 8,824 8,567 Accounts receivable, net 2,142 1,459 Inventories 1,302 1,030 Deferred tax assets 573 309 Other current assets 572 473 Total current assets 19,555 15,645 Marketable securities 14,440 14,463 Deferred tax assets 1,059 1,412 Assets held for sale 72 1,109 Property, plant and equipment, net 2,995 2,851 Goodwill 3,976 3,917 Other intangible assets, net 2,553 2,938 Other assets 866 677 Total assets $ 45,516 $ 43,012 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Trade accounts payable $ 1,554 $ 1,298 Payroll and other benefits related liabilities 839 664 Unearned revenues 501 545 Liabilities held for sale 43 1,072 Other current liabilities 2,276 1,723 Total current liabilities 5,213 5,302 Unearned revenues 3,666 3,739 Other liabilities 550 426 Total liabilities 9,429 9,467 Commitments and contingencies (Note 7) Stockholders’ equity: Qualcomm stockholders’ equity: Preferred stock, $0.0001 par value; issuable in series; 8 shares authorized; none outstanding — — Common stock, $0.0001 par value; 6,000 shares authorized; 1,685 and 1,706 shares issued and outstanding, respectively — — Paid-in capital 9,874 11,956 Retained earnings 25,461 20,701 Accumulated other comprehensive income 753 866 Total Qualcomm stockholders’ equity 36,088 33,523 Noncontrolling interests (1 ) 22 Total stockholders’ equity 36,087 33,545 Total liabilities and stockholders’ equity $ 45,516 $ 43,012 F- 2  QUALCOMM Incorporated CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) See accompanying notes. F- 3 Year Ended September 29, 2013 September 30, 2012 September 25, 2011 Revenues: Equipment and services $ 16,988 $ 12,465 $ 9,223 Licensing 7,878 6,656 5,734 Total revenues 24,866 19,121 14,957 Costs and expenses: Cost of equipment and services revenues 9,820 7,096 4,877 Research and development 4,967 3,915 2,995 Selling, general and administrative 2,518 2,270 1,945 Other (Note 2 and 7) 331 158 114 Total costs and expenses 17,636 13,439 9,931 Operating income 7,230 5,682 5,026 Investment income, n et (Note 3) 964 880 661 Income from continuing operations before income taxes 8,194 6,562 5,687 Income tax expense (1,349 ) (1,279 ) (1,132 ) Income from continuing operations 6,845 5,283 4,555 Discontinued operations, net of income taxes (Note 11) — 776 (313 ) Net income 6,845 6,059 4,242 Net loss attributable to noncontrolling interests 8 50 18 Net income attributable to Qualcomm $ 6,853 $ 6,109 $ 4,260 Basic earnings (loss) per share attributable to Qualcomm: Continuing operations $ 3.99 $ 3.14 $ 2.76 Discontinued operations — 0.45 (0.19 ) Net income $ 3.99 $ 3.59 $ 2.57 Diluted earnings (loss) per share attributable to Qualcomm: Continuing operations $ 3.91 $ 3.06 $ 2.70 Discontinued operations — 0.45 (0.18 ) Net income $ 3.91 $ 3.51 $ 2.52 Shares used in per share calculations: Basic 1,715 1,700 1,658 Diluted 1,754 1,741 1,691 Dividends per share announced $ 1.20 $ 0.93 $ 0.81  QUALCOMM Incorporated CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) See accompanying notes. F- 4 Year Ended September 29, 2013 September 30, 2012 September 25, 2011 Net income $ 6,845 $ 6,059 $ 4,242 Other comprehensive (loss) income, net of income taxes: Foreign currency translation (20 ) (19 ) (9 ) Reclassification of foreign currency translation losses included in net income 11 — — Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities, net of income taxes of $0, $1 and $10, respectively (1 ) 4 (19 ) Reclassification of net other-than-temporary losses on available-for-sale securities included in net income, net of income taxes of $26, $26 and $14, respectively 47 47 25 Net unrealized gains (losses) on other available-for-sale securities and derivative instruments, net of income taxes of $24, $357 and $80, respectively 44 652 (145 ) Reclassification of net realized gains on available-for-sale securities and derivative instruments included in net income, net of income taxes of $107, $93 and $112, respectively (195 ) (169 ) (199 ) Total other comprehensive (loss) income (114 ) 515 (347 ) Total comprehensive income 6,731 6,574 3,895 Comprehensive loss attributable to noncontrolling interests 9 46 21 Comprehensive income attributable to Qualcomm $ 6,740 $ 6,620 $ 3,916  QUALCOMM Incorporated CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) See accompanying notes. Year Ended September 29, 2013 September 30, 2012 September 25, 2011 Operating Activities: Net income $ 6,845 $ 6,059 $ 4,242 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 1,017 897 1,061 Gain on sale of wireless spectrum — (1,179 ) — Goodwill and long-lived asset impairment charges 192 84 128 Revenues related to non-monetary exchanges (123 ) (122 ) (123 ) Income tax provision in excess of (less than) income tax payments 268 395 (1,204 ) Non-cash portion of share-based compensation expense 1,105 1,035 824 Incremental tax benefit from share-based compensation (231 ) (168 ) (183 ) Net realized gains on marketable securities and other investments (369 ) (369 ) (337 ) Net impairment losses on marketable securities and other investments 85 83 52 Other items, net 104 (52 ) (2 ) Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable, net (680 ) (456 ) (140 ) Inventories (300 ) (252 ) (62 ) Other assets (209 ) (240 ) (70 ) Trade accounts payable 307 371 (26 ) Payroll, benefits and other liabilities 752 (341 ) 572 Unearned revenues 15 253 168 Net cash provided by operating activities 8,778 5,998 4,900 Investing Activities: Capital expenditures (1,048 ) (1,284 ) (593 ) Purchases of available-for-sale securities (13,951 ) (15,511 ) (10,948 ) Proceeds from sales and maturities of available-for-sale securities 13,494 9,858 10,661 Purchases of trading securities (3,312 ) (4,009 ) — Proceeds from sales and maturities of trading securities 3,367 3,060 — Proceeds from sale of wireless spectrum — 1,925 — Acquisitions and other investments, net of cash acquired (192 ) (833 ) (3,624 ) Other items, net 64 (83 ) 15 Net cash used by investing activities (1,578 ) (6,877 ) (4,489 ) Financing Activities: Borrowings under loans and debentures 534 710 1,555 Repayments of loans and debentures (439 ) (591 ) (1,555 ) Proceeds from issuance of common stock 1,525 1,714 2,647 Incremental tax benefit from share-based compensation 231 168 183 Repurchases and retirements of common stock (4,610 ) (1,313 ) (142 ) Dividends paid (2,055 ) (1,583 ) (1,346 ) Other items, net (31 ) 138 176 Net cash (used) provided by financing activities (4,845 ) (757 ) 1,518 Changes in cash and cash equivalents held for sale (15 ) — — Effect of exchange rate changes on cash (5 ) (19 ) (14 ) Net increase (decrease) in cash and cash equivalents 2,335 (1,655 ) 1,915 Cash and cash equivalents at beginning of year 3,807 5,462 3,547 Cash and cash equivalents at end of year $ 6,142 $ 3,807 $ 5,462  F- 5  QUALCOMM Incorporated CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In millions) See accompanying notes. F- 6 Common Stock Shares Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income Total Qualcomm Stockholders’ Equity Noncontrolling Interests Total Stockholders’ Equity Balance at September 26, 2010 1,612 $ 6,856 $ 13,305 $ 697 $ 20,858 $ — $ 20,858 Total comprehensive income (1) — — 4,260 (344 ) 3,916 (21 ) 3,895 Common stock issued under employee benefit plans and the related tax benefits 72 2,720 — — 2,720 — 2,720 Repurchase and retirement of common stock (3 ) (142 ) — — (142 ) — (142 ) Share-based compensation — 848 — — 848 — 848 Dividends — — (1,361 ) — (1,361 ) — (1,361 ) Value of stock awards assumed in acquisition — 106 — — 106 — 106 Issuance of subsidiary shares to noncontrolling interests — 14 — — 14 42 56 Other — (8 ) — — (8 ) — (8 ) Balance at September 25, 2011 1,681 10,394 16,204 353 26,951 21 26,972 Total comprehensive income (1) — — 6,109 511 6,620 (46 ) 6,574 Common stock issued under employee benefit plans and the related tax benefits, net of shares withheld for tax 49 1,772 — — 1,772 — 1,772 Repurchase and retirement of common stock (24 ) (1,313 ) — — (1,313 ) — (1,313 ) Share-based compensation — 1,062 — — 1,062 — 1,062 Dividends — — (1,612 ) — (1,612 ) — (1,612 ) Issuance of subsidiary shares to noncontrolling interests — 44 — 2 46 40 86 Other — (3 ) — — (3 ) 7 4 Balance at September 30, 2012 1,706 11,956 20,701 866 33,523 22 33,545 Total comprehensive income — — 6,853 (113 ) 6,740 (9 ) 6,731 Common stock issued under employee benefit plans and the related tax benefits, net of shares withheld for tax 51 1,385 — — 1,385 — 1,385 Repurchase and retirement of common stock (72 ) (4,610 ) — — (4,610 ) — (4,610 ) Share-based compensation — 1,142 — — 1,142 — 1,142 Dividends — — (2,093 ) — (2,093 ) — (2,093 ) Issuance of subsidiary shares to noncontrolling interests — 2 — — 2 9 11 Deconsolidation of subsidiaries — — — — — (23 ) (23 ) Other — (1 ) — — (1 ) — (1 ) Balance at September 29, 2013 1,685 $ 9,874 $ 25,461 $ 753 $ 36,088 $ (1 ) $ 36,087 (1) Income (loss) from discontinued operations, net of income taxes (Note 11), was attributable to Qualcomm.  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. The Company and Its Significant Accounting Policies The Company. QUALCOMM Incorporated, a Delaware corporation, and its subsidiaries (collectively the Company or Qualcomm), develop, design, manufacture and market digital communications products and services. The Company is a leading developer and supplier of integrated circuits and system software based on CDMA (Code Division Multiple Access), OFDMA (Orthogonal Frequency Division Multiple Access) and other technologies for use in voice and data communications, networking, application processing, multimedia and global positioning system products to device and infrastructure manufacturers. The Company grants licenses to use portions of its intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products, and receives fixed license fees (payable in one or more installments) as well as ongoing royalties based on sales by licensees of wireless telecommunications equipment products incorporating its patented technologies. The Company sells equipment, software and services to transportation and other companies to wirelessly connect their assets and workforce. The Company provides software products and services for content enablement across a wide variety of platforms and devices for the wireless industry. The Company also makes strategic investments to support the global adoption of its technologies and services. Principles of Consolidation. The Company’s consolidated financial statements include the assets, liabilities and operating results of majority-owned subsidiaries. In addition, the Company consolidates its investments in certain immaterial less than majority-owned variable interest entities as the Company is the primary beneficiary. The ownership of the other interest holders of consolidated subsidiaries and the variable interest entities is presented separately in the consolidated balance sheets and statements of operations. All significant intercompany accounts and transactions have been eliminated. Certain of the Company’s consolidated subsidiaries are included in the consolidated financial statements one month in arrears to facilitate the timely inclusion of such entities in the Company’s consolidated financial statements. Financial Statement Preparation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform to the current year presentation. Fiscal Year. The Company operates and reports using a 52-53 week fiscal year ending on the last Sunday in September. The fiscal years ended September 29, 2013 and September 25, 2011 included 52 weeks . The fiscal year ended September 30, 2012 included 53 weeks . Cash Equivalents. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents are comprised of money market funds, commercial paper, government agencies’ securities and certain bank time deposits. The carrying amounts approximate fair value due to the short maturities of these instruments. Marketable Securities. Marketable securities include trading securities, available-for-sale securities, securities for which the Company has elected the fair value option and certain bank time deposits. The classification of marketable securities within these categories is determined at the time of purchase and reevaluated at each balance sheet date. The Company classifies portfolios of debt securities that utilize derivative instruments to acquire or reduce foreign exchange and/or equity, prepayment and credit risk as trading. The Company classifies marketable securities as current or noncurrent based on the nature of the securities and their availability for use in current operations. Marketable securities are stated at fair value. The net unrealized gains or losses on available-for-sale securities are recorded as a component of accumulated other comprehensive income, net of income taxes. The unrealized gains or losses on trading securities and securities for which the Company has elected the fair value option are recognized in net investment income. The realized gains and losses on marketable securities are determined using the specific identification method. At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is other than temporary. The Company considers factors including: the significance of the decline in value compared to the cost basis; underlying factors contributing to a decline in the prices of securities in a single asset class; how long the market value of the security has been less than its cost basis; the security’s relative performance versus its peers, sector or asset class; expected market volatility, the market and economy in general; analyst recommendations and price targets; views of external investment managers; news or financial information that has been released specific to the investee; and the outlook for the overall industry in which the investee operates. If a debt security’s market value is below amortized cost and the Company either intends to sell the security or it is more likely than not that the Company will be required to sell the security before its anticipated recovery, the Company records an F- 7  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS other-than-temporary impairment charge to net investment income for the entire amount of the impairment. For the remaining debt securities, if an other-than-temporary impairment exists, the Company separates the other-than-temporary impairment into the portion of the loss related to credit factors, or the credit loss portion, and the portion of the loss that is not related to credit factors, or the noncredit loss portion. The credit loss portion is the difference between the amortized cost of the security and the Company’s best estimate of the present value of the cash flows expected to be collected from the debt security. The noncredit loss portion is the residual amount of the other-than-temporary impairment. The credit loss portion is recorded as a charge to net investment income, and the noncredit loss portion is recorded as a component of other accumulated comprehensive income, net of income taxes. When calculating the present value of expected cash flows to determine the credit loss portion of the other-than-temporary impairment, the Company estimates the amount and timing of projected cash flows, the probability of default and the timing and amount of recoveries on a security-by-security basis. These calculations use inputs primarily based on observable market data, such as credit default swap spreads, historical default and recovery statistics, rating agency data, credit ratings and other data relevant to analyzing the collectibility of the security. The amortized cost basis of a debt security is adjusted for any credit loss portion of the impairment recorded to earnings. The difference between the new cost basis and cash flows expected to be collected is accreted to net investment income over the remaining expected life of the security. Securities that are accounted for as equity securities include investments in common stock, certain preferred stock, equity mutual and exchange-traded funds and debt funds. For equity securities, the Company considers the loss relative to the expected volatility and the likelihood of recovery over a reasonable period of time. If events and circumstances indicate that a decline in the value of an equity security has occurred and is other than temporary, the Company records a charge to net investment income for the difference between fair value and cost at the balance sheet date. Additionally, if the Company has either the intent to sell the equity security or does not have both the intent and the ability to hold the equity security until its anticipated recovery, the Company records a charge to net investment income for the difference between fair value and cost at the balance sheet date. Derivatives. The Company’s primary objective for holding derivative instruments is to manage foreign exchange risk for certain foreign currency revenue and operating expenditure transactions. To a lesser extent, the Company also holds derivative instruments in its investment portfolios to manage risk by acquiring or reducing foreign exchange risk, interest rate risk and/or equity, prepayment and credit risk. The Company also uses derivative instruments as part of its stock repurchase program. Foreign Currency Hedges: The Company manages its exposure to foreign exchange market risks, when deemed appropriate, through the use of derivative instruments, including foreign currency forward and option contracts with financial counterparties. We utilize such derivative financial instruments for hedging or risk management purposes rather than for speculation purposes. Counterparties to the Company’s derivative instruments are all major institutions. The derivative instruments mature between 4 and 28 months . Derivative instruments are recorded at fair value and are included in other current assets, noncurrent assets, other accrued liabilities or other noncurrent liabilities based on their maturity date. Gains and losses arising from the effective portion of foreign currency forward and option contracts that are designated as cash flow hedging instruments are recorded as a component of accumulated other comprehensive income as gains and losses on derivative instruments, net of income taxes. The hedging gains and losses in accumulated other comprehensive income are subsequently reclassified to revenues or costs and expenses, as applicable, in the consolidated statements of operations in the same period in which the underlying transactions affect the Company’s earnings. Gains and losses arising from the ineffective portion of foreign currency forward and option contracts are recorded in net investment income as gains and losses on derivative instruments. The cash flows associated with derivative instruments designated as cash flow or net investment hedging instruments are classified as cash flows from operating activities in the consolidated statements of cash flows, which is the same category as the hedged transaction. The cash flows associated with the ineffective portion of derivatives are classified as cash flows from investing activities in the consolidated statements of cash flows. The aggregate fair value of the Company’s foreign currency option and forward contracts used to hedge foreign currency risk recorded in total assets was $38 million and $11 million at September 29, 2013 and September 30, 2012 , respectively, and the fair value recorded in total liabilities was $9 million and $6 million at September 29, 2013 and September 30, 2012 , respectively, all of which were designated as cash flow hedging instruments. Investment Portfolio Derivatives: The Company also utilizes currency forwards, futures, options and swaps that are not designated as hedging instruments to acquire or reduce foreign exchange risk, interest rate risk and/or equity, prepayment and credit risk in its marketable securities investment portfolios classified as trading. The derivative instruments mature over various periods up to 29 years . Gains and losses arising from changes in the fair values of such contracts are recorded in net investment income as gains and losses on derivative instruments. The cash flows associated with such derivative instruments are classified as cash flows from investing activities in the consolidated statements of cash flows. At September 29, 2013 , the F- 8  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS fair value of these derivative instruments recorded in total assets was negligible. At September 30, 2012 , the fair value of these derivative instruments recorded in total assets was $5 million . At September 29, 2013 and September 30, 2012 , the fair value of these derivative instruments recorded in total liabilities was $14 million and $5 million , respectively. Gross Notional Amounts. The gross notional amounts of the Company's foreign currency and investment portfolio derivatives by instrument type were as follows (in millions): The gross notional amounts by currency were as follows (in millions): Stock Repurchase Program: In connection with the Company’s stock repurchase program, the Company may sell put options that require it to repurchase shares of its common stock at fixed prices. These put options subject the Company to equity price risk. Changes in the fair value of these put options are recorded in net investment income as gains and losses on derivative instruments. The cash flows associated with the put options are classified as cash flows from investing activities in the consolidated statements of cash flows. There were no put options outstanding at September 29, 2013 and September 30, 2012 . Allowances for Doubtful Accounts. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company considers the following factors when determining if collection of required payments is reasonably assured: customer credit-worthiness, past transaction history with the customer, current economic industry trends, changes in customer payment terms, and bank credit-worthiness for letters of credit. If the Company has no previous experience with the customer, the Company typically obtains reports from various credit organizations to determine that the customer has a history of paying its creditors. The Company may also request financial information, including financial statements or other documents to determine that the customer has the means of making payment. If these factors do not indicate collection is reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon receipt of cash. If the financial condition of the Company’s customers was to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Inventories. Inventories are valued at the lower of cost or market (replacement cost, not to exceed net realizable value) using the first-in, first-out method. Recoverability of inventories is assessed based on review of committed purchase orders from customers, as well as purchase commitment projections provided by customers, among other things. Property, Plant and Equipment. Property, plant and equipment are recorded at cost and depreciated or amortized using the straight-line method over their estimated useful lives. Upon the retirement or disposition of property, plant and equipment, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded. Buildings and building improvements on owned land are depreciated over 30 years and 15 years, respectively. Leasehold improvements and buildings F- 9 September 29, 2013 September 30, 2012 Options $ 609 $ 1,093 Currency forwards 544 468 Futures 106 115 Swaps 18 190 Other — 4 $ 1,277 $ 1,870 September 29, 2013 September 30, 2012 Japanese yen $ 617 $ 687 Indian rupee 205 119 Euro 161 312 United States dollar 108 375 Canadian dollar 62 105 British pound sterling 46 110 Australian dollar 11 126 Other 67 36 $ 1,277 $ 1,870  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS on leased land are amortized over the shorter of their estimated useful lives, not to exceed 15 and 30 years, respectively, or the remaining term of the related lease. Other property, plant and equipment have useful lives ranging from 2 to 25 years. Direct external and internal costs of developing software for internal use are capitalized subsequent to the preliminary stage of development. Leased property meeting certain capital lease criteria is capitalized, and the net present value of the related lease payments is recorded as a liability. Amortization of assets under capital leases is recorded using the straight-line method over the shorter of the estimated useful lives or the lease terms. Maintenance, repairs and minor renewals or betterments are charged to expense as incurred. Interest expense related to the broadband wireless access (BWA) spectrum and related construction of the network infrastructure assets in India by the Company’s former BWA subsidiaries was capitalized beginning in May 2012 through the third quarter of fiscal 2013 when the BWA subsidiaries were deconsolidated (Note 10). Interest capitalized by the former BWA subsidiaries totaled $65 million and $29 million in fiscal 2013 and 2012, respectively. Goodwill and Other Intangible Assets. Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. Acquired intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite. For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. For intangible assets acquired in a non-monetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values, unless the values of neither the assets received nor the assets transferred are determinable within reasonable limits, in which case the assets received are measured based on the carrying values of the assets transferred. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. Weighted-average amortization periods for finite-lived intangible assets, by class, were as follows (in years): Impairment of Goodwill and Other Long-Lived Assets. Goodwill and other indefinite-lived intangible assets are tested annually for impairment in the fourth fiscal quarter and in interim periods if certain events occur indicating that the carrying amounts may be impaired. If a qualitative assessment is used and the Company determines that the fair value of a reporting unit or indefinite-lived intangible asset is more likely than not (i.e., a likelihood of more than 50%) less than its carrying amount, a quantitative impairment test will be performed. If goodwill is quantitatively assessed for impairment, a two-step approach is applied. First, the Company compares the estimated fair value of the reporting unit in which the goodwill resides to its carrying value. The second step, if necessary, measures the amount of such impairment by comparing the implied fair value of goodwill to its carrying value. Other indefinite-lived intangible assets are quantitatively assessed for impairment, if necessary, by comparing their estimated fair values to their carrying values. If the carrying value exceeds the fair value, the difference is recorded as an impairment. Long-lived assets, such as property, plant and equipment and intangible assets subject to amortization, are reviewed for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value of the asset or asset group. Long-lived assets to be disposed of by sale are reported at the lower of their carrying amounts or their estimated fair values less costs to sell and are not depreciated. Revenue Recognition. The Company derives revenues principally from sales of integrated circuit products, licensing of its intellectual property and software, and sales of messaging, software hosting, software development and other services and related hardware. The timing of revenue recognition and the amount of revenue actually recognized in each case depends upon a variety of factors, including the specific terms of each arrangement and the nature of the Company’s deliverables and obligations. F- 10 September 29, 2013 September 30, 2012 Wireless spectrum 14 5 Marketing-related 9 9 Technology-based 11 11 Customer-related 2 6 Total finite-lived intangible assets 11 11  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Revenues from sales of the Company’s products are recognized at the time of shipment, or when title and risk of loss pass to the customer and other criteria for revenue recognition are met, if later. Revenues from providing services, including software hosting services, are recognized when earned. Revenues from providing services were less than 10% of total revenues for all periods presented. The Company licenses or otherwise provides rights to use portions of its intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. Licensees typically pay a fixed license fee in one or more installments and royalties based on their sales of products incorporating or using the Company’s licensed intellectual property. License fees are recognized over the estimated period of benefit of the license to the licensee, typically 5 to 15 years . The Company earns royalties on such licensed products sold worldwide by its licensees at the time that the licensees’ sales occur. The Company’s licensees, however, do not report and pay royalties owed for sales in any given quarter until after the conclusion of that quarter. The Company recognizes royalty revenues based on royalties reported by licensees during the quarter and when other revenue recognition criteria are met. The Company records reductions to revenues for customer incentive arrangements, including volume-related and other pricing rebates and cost reimbursements for marketing and other activities involving certain of the Company’s products and technologies. The Company recognizes the maximum potential liability at the later of the date at which the Company records the related revenues or the date at which the Company offers the incentive or, if payment is contingent, when the contingency is resolved. In certain arrangements, the liabilities are based on customer forecasts. The Company reverses accruals for unclaimed incentive amounts to revenues when the unclaimed amounts are no longer subject to payment. Unearned revenues consist primarily of license fees for intellectual property and software product sales with continuing performance obligations. Concentrations. A significant portion of the Company’s revenues is concentrated with a small number of customers/licensees of the Company ’ s QCT and QTL segments. Revenues related to the products of two companies comprised 24% and 19% of total consolidated revenues in fiscal 2013 and 20% and 18% of total consolidated revenues in fiscal 2012. Revenues from two companies each comprised 13% of total consolidated revenues in fiscal 2011 . Aggregate accounts receivable from two customers/licensees comprised 43% of gross accounts receivable at September 29, 2013 . Aggregate accounts receivable from three customers/licensees comprised 48% of gross accounts receivable at September 30, 2012 . Shipping and Handling Costs. Costs incurred for shipping and handling are included in cost of equipment and services revenues at the time the related revenue is recognized. Amounts billed to a customer for shipping and handling are reported as revenue. Share-Based Compensation. Share-based compensation expense for equity-classified awards, principally related to restricted stock units (RSUs) and stock options, is measured at the grant date, or at the acquisition date for awards assumed in business combinations, based on the estimated fair value of the award and is recognized over the employee’s requisite service period. Share-based compensation expense is adjusted to exclude amounts related to share-based awards that are expected to be forfeited. The fair values of RSUs are estimated based on the fair market values of the underlying stock on the dates of grant or dates the RSUs are assumed. If RSUs do not have the right to participate in dividends, the fair values are discounted by the dividend yield. The weighted-average estimated fair values of employee RSUs granted during fiscal 2013 , 2012 and 2011 were $64.21 , $58.57 and $50.14 per share, respectively. For the majority of RSUs, shares are issued on the vesting dates net of the amount of shares needed to satisfy statutory tax withholding requirements to be paid by the Company on behalf of the employees. As a result, the actual number of shares issued will be fewer than the number of RSUs outstanding. The annual pre-vest forfeiture rate for RSUs granted in fiscal 2013 , 2012 and 2011 was estimated to be approximately 3% based on historical experience. The fair values of employee stock options granted are estimated using the lattice binomial option-pricing model, and the fair values of employee stock options assumed in business combinations are estimated using the Black-Scholes option-pricing model. No stock options were granted or assumed during fiscal 2013. The weighted-average estimated fair values of employee stock options granted during fiscal 2012 and 2011 were $14.70 and $13.17 per share, respectively. The following table presents the weighted-average assumptions (annualized) used to estimate the fair values of employee stock options granted or assumed in the periods presented: F- 11  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company uses the implied volatility of market-traded options in the Company’s stock to determine the expected volatility. The term structure of volatility is used for approximately two years, and the Company uses the implied volatility of the option with the longest time to maturity for periods beyond two years . The risk-free interest rate is based on observed interest rates appropriate for the terms of the Company’s employee stock options. The Company does not target a specific dividend yield for its dividend payments but is required to assume a dividend yield as an input to the binomial model. The dividend yield is based on the Company’s history and expectation of future dividend payouts and may be subject to substantial change in the future. The post-vest forfeiture rate and suboptimal exercise factor are based on the Company’s historical option cancelation and employee exercise information, respectively. The expected life of employee stock options is a derived output of the lattice binomial model and is impacted by all of the underlying assumptions used by the Company. The weighted-average expected life of employee stock options granted, as derived from the binomial model, was 5.3 years and 5.6 years during fiscal 2012 and 2011 , respectively. Total share-based compensation expense, related to all of the Company’s share-based awards, was comprised as follows (in millions): The Company recorded $242 million , $270 million and $165 million in share-based compensation expense during fiscal 2013 , 2012 and 2011 , respectively, related to share-based awards granted during those periods. The remaining share-based compensation expense was primarily related to share-based awards granted in earlier periods and share-based awards assumed. In addition, for fiscal 2013 , 2012 and 2011 , $231 million , $168 million and $183 million , respectively, were reclassified to reduce net cash provided by operating activities with an offset to net cash provided (used) by financing activities in the consolidated statements of cash flows to reflect the incremental tax benefits from stock options exercised and restricted stock units and other share-based awards that vested in those periods. The amount of compensation cost capitalized related to share-based awards was negligible for all periods presented. Litigation. The Company is currently involved in certain legal proceedings. The Company records its best estimate of a loss related to pending litigation when the loss is considered probable and the amount can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability related to the claim. As additional information becomes available, the Company assesses the potential liability related to the Company’s pending litigation and revises its estimates. The Company’s legal costs associated with defending itself are recorded to expense as incurred. Foreign Currency. Certain foreign subsidiaries use a local currency as the functional currency. Resulting translation gains or losses are recognized as a component of accumulated other comprehensive income. F- 12 2012 2011 Volatility 31.5 % 30.8 % Risk-free interest rate 1.0 % 2.1 % Dividend yield 1.5 % 1.5 % Post-vest forfeiture rate 9.0 % 9.8 % Suboptimal exercise factor 1.7 1.8 2013 2012 2011 Cost of equipment and services revenues $ 71 $ 75 $ 67 Research and development 643 546 397 Selling, general and administrative 391 414 349 Continuing operations 1,105 1,035 813 Related income tax benefit (217 ) (225 ) (194 ) Continuing operations, net of income taxes 888 810 619 Discontinued operations — 1 8 Related income tax benefit — — (3 ) Discontinued operations, net of income taxes — 1 5 $ 888 $ 811 $ 624  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Transaction gains or losses related to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of operations. Net foreign currency transaction losses included in the Company’s consolidated statements of operations were $4 million , $7 million and $8 million for fiscal 2013 , 2012 and 2011 , respectively. Income Taxes. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Tax law and rate changes are reflected in income in the period such changes are enacted. The Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company includes interest and penalties related to income taxes, including unrecognized tax benefits, within the income tax provision. The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. The Company recognizes windfall tax benefits associated with share-based awards directly to stockholders’ equity only when realized. A windfall tax benefit occurs when the actual tax benefit realized by the Company upon an employee’s disposition of a share-based award exceeds the deferred tax asset, if any, associated with the award that the Company had recorded. When assessing whether a tax benefit relating to share-based compensation has been realized, the Company follows the tax law ordering method, under which current year share-based compensation deductions are assumed to be utilized before net operating loss carryforwards and other tax attributes. Earnings Per Common Share. Basic earnings per common share are computed by dividing net income attributable to Qualcomm by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per common share are computed by dividing net income attributable to Qualcomm by the combination of dilutive common share equivalents, comprised of shares issuable under the Company’s share-based compensation plans and shares subject to written put options, and the weighted-average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an award, if any, the amount of compensation cost for future service that the Company has not yet recognized, if any, and the estimated tax benefits that would be recorded in paid-in capital when an award is settled, if any, are assumed to be used to repurchase shares in the current period. The incremental dilutive common share equivalents, calculated using the treasury stock method, for fiscal 2013 , 2012 and 2011 were 38,670,000 , 40,978,000 and 32,908,000 , respectively. Employee stock options to purchase 355,000 , 1,590,000 and 20,224,000 shares of common stock during fiscal 2013 , 2012 and 2011 , respectively, were outstanding but not included in the calculation of diluted earnings per common share because the effect would be anti-dilutive. Put options outstanding during fiscal 2012 and 2011 were not included in the earnings per common share computation because the put options’ exercise prices were less than the average market price of the common stock while they were outstanding, and therefore, the effect on diluted earnings per common share would be anti-dilutive. No put options were outstanding during fiscal 2013. In addition, other common stock equivalents of 152,000 , 1,947,000 and 1,963,000 shares outstanding during fiscal 2013 , 2012 and 2011 , respectively, were not included in the calculation of diluted earnings per common share because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period. Comprehensive Income. Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including foreign currency translation adjustments and unrealized gains and losses on marketable securities and derivative instruments. Other comprehensive income includes reclassification adjustments for: foreign currency translation gains and losses recognized in the statements of operations as a result of deconsolidation of subsidiaries; net realized gains and losses recognized in the statements of operations when marketable securities are sold or derivative instruments are settled; and unrealized losses on marketable securities recognized in the statements of operations when they are no longer viewed as temporary. The portion of other-than-temporary F- 13  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS impairment losses related to noncredit factors and subsequent changes in fair value included in comprehensive income are shown separately from other unrealized gains or losses on marketable securities. The components of accumulated other comprehensive income in Qualcomm stockholders’ equity were as follows (in millions): At September 29, 2013 and September 30, 2012 , accumulated other comprehensive income included $1 million and $ 7 million , respectively, of other-than-temporary losses on marketable debt securities related to factors other than credit, net of income taxes. Recent Accounting Pronouncements. In February 2013, the Financial Accounting Standards Board (FASB) issued guidance on disclosure requirements for items reclassified out of accumulated other comprehensive income. This new guidance requires entities to present (either on the face of the statement of operations or in the notes to the financial statements) the effects on the line items in the statement of operations for amounts reclassified out of accumulated other comprehensive income. The new guidance will be effective for the Company beginning in the first quarter of fiscal 2014. The adoption of the guidance will impact the Company’s financial statement presentation and/or disclosure but will not impact its financial position, results of operations or cash flows. Note 2. Composition of Certain Financial Statement Items F- 14 September 29, 2013 September 30, 2012 Foreign currency translation $ (115 ) $ (107 ) Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities, net of income taxes 25 29 Net unrealized gains on other available-for-sale securities, net of income taxes 825 942 Net unrealized gains on derivative instruments, net of income taxes 18 2 $ 753 $ 866 Accounts Receivable (in millions) September 29, 2013 September 30, 2012 Trade, net of allowances for doubtful accounts of $2 and $1, respectively $ 2,066 $ 1,418 Long-term contracts 27 32 Other 49 9 $ 2,142 $ 1,459 Inventories (in millions) September 29, 2013 September 30, 2012 Raw materials $ 2 $ 19 Work-in-process 631 531 Finished goods 669 480 $ 1,302 $ 1,030  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Depreciation and amortization expense related to property, plant and equipment for fiscal 2013 , 2012 and 2011 was $515 million , $427 million and $704 million , respectively. The gross book values of property under capital leases included in buildings and improvements were $18 million and $64 million at September 29, 2013 and September 30, 2012 , respectively. These capital leases principally related to base station towers and buildings. At September 29, 2013 , buildings and improvements and leasehold improvements that were leased to third parties or held for lease to third parties were negligible. Future minimum rental income on facilities leased to others is expected to be negligible. At September 30, 2012 , buildings and improvements and leasehold improvements with a net book value of $13 million were leased to third parties or held for lease to third parties. Goodwill and Other Intangible Assets. The Company’s reportable segment assets do not include goodwill. The Company allocates goodwill to its reporting units for annual impairment testing purposes. Goodwill was allocable to reporting units included in the Company’s reportable and nonreportable segments, as described in Note 8, as follows (in millions): During fiscal 2012, the Company’s QMT division (a nonreportable segment) updated its business plan to focus on licensing its next generation interferometric modulator (IMOD) display technology while directly commercializing certain IMOD products. In the course of pursuing its licensing model, the Company considered various alternatives for certain property, plant and equipment. The Company performed interim and subsequent annual goodwill impairment tests in fiscal 2013 and 2012 of the QMT division, which was determined to be a reporting unit for purposes of the goodwill impairment tests, and concluded each time that the fair value of the QMT reporting unit was greater than its carrying value. The Company also assessed the recoverability of QMT’s other long-lived assets. During fiscal 2013 and 2012, as a continuation of evaluating alternatives with respect to certain long-lived assets comprising QMT asset groups, the Company revised its estimates of expected cash flows and recorded impairment charges of $158 million and $54 million , respectively, in other expenses. At September 29, 2013 , the carrying values of the QMT division’s goodwill and long-lived asset groups were $133 million and $707 million , respectively. During fiscal 2012 and 2011, the Company recorded impairment charges of $23 million and $114 million , respectively, in other expenses to write down goodwill related to its QRS division (included in the QWI segment). At September 29, 2013 , $17 million of goodwill remained for the QRS division. F- 15 Property, Plant and Equipment (in millions) September 29, 2013 September 30, 2012 Land $ 212 $ 203 Buildings and improvements 1,733 1,392 Computer equipment and software 1,425 1,409 Machinery and equipment 2,013 1,828 Furniture and office equipment 87 80 Leasehold improvements 218 237 Construction in progress 480 774 6,168 5,923 Less accumulated depreciation and amortization (3,173 ) (3,072 ) $ 2,995 $ 2,851 September 29, 2013 September 30, 2012 QCT $ 2,875 $ 2,816 QTL 706 707 QWI 107 128 Nonreportable segments 288 266 $ 3,976 $ 3,917  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The components of other intangible assets, net were as follows (in millions): All of these intangible assets are subject to amortization, other than acquired in-process research and development with a carrying value of $54 million at September 29, 2013 . Amortization expense related to these intangible assets for fiscal 2013 , 2012 and 2011 was $499 million , $473 million and $357 million , respectively. Amortization expense related to these intangible assets and acquired in-process research and development, beginning upon the expected completion of the underlying projects, is expected to be $484 million , $444 million , $340 million , $226 million and $193 million for fiscal 2014 to 2018 , respectively, and $867 million thereafter. Assets and Liabilities Held for Sale. On August 21, 2013, the Company entered into a definitive agreement under which it agreed to sell the North and Latin American operations of its Omnitracs division to a U.S.-based private equity firm for $800 million in cash, subject to the terms and conditions of the definitive agreement. The transaction is subject to customary closing conditions, including receipt of regulatory approvals, and is expected to close in the first quarter of fiscal 2014. As a result, assets (recorded as other current assets and noncurrent assets held for sale) and liabilities (recorded as current liabilities held for sale and other noncurrent liabilities) of $139 million and $43 million , respectively, were classified as held for sale at September 29, 2013. The Company expects to present the gain on the sale, net of income taxes, as a discontinued operation upon close. However, the revenues and operating results of the North and Latin American operations of the Omnitracs division, which comprise substantially all of the Omnitracs division, were not presented as discontinued operations in any fiscal period because they were immaterial. At September 30, 2012, assets and liabilities held for sale of $1.1 billion each were comprised of the assets and liabilities of the Company’s former BWA subsidiaries (Note 10). F- 16 September 29, 2013 September 30, 2012 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Wireless spectrum $ 19 $ (8 ) $ 20 $ (3 ) Marketing-related 76 (37 ) 79 (28 ) Technology-based 3,964 (1,512 ) 3,960 (1,158 ) Customer-related 87 (36 ) 101 (33 ) $ 4,146 $ (1,593 ) $ 4,160 $ (1,222 ) Other Current Liabilities (in millions) September 29, 2013 September 30, 2012 Customer incentives and other customer-related liabilities $ 1,706 $ 1,107 Other 570 616 $ 2,276 $ 1,723  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 3. Investment Income Investment income, net was comprised as follows (in millions): Net impairment losses on marketable securities related to the noncredit portion of losses on debt securities recognized in other comprehensive income were negligible for all periods presented. Note 4. Income Taxes The components of the income tax provision were as follows (in millions): The foreign component of the income tax provision consists primarily of foreign withholding taxes on royalty fees included in United States earnings. The components of income from continuing operations before income taxes by United States and foreign jurisdictions were as follows (in millions): The following is a reconciliation of the expected statutory federal income tax provision to the Company’s actual income tax provision for continuing operations (in millions): F- 17 2013 2012 2011 Interest and dividend income $ 697 $ 609 $ 500 Interest expense (23 ) (90 ) (114 ) Net realized gains on marketable securities 317 342 335 Net realized gains on other investments 52 27 2 Net impairment losses on marketable securities (72 ) (71 ) (39 ) Impairment losses on other investments (13 ) (12 ) (13 ) Net gains (losses) on derivative instruments — 84 (3 ) Net gains on deconsolidation of subsidiaries 12 — — Equity in losses of investees (6 ) (9 ) (7 ) $ 964 $ 880 $ 661 2013 2012 2011 Current provision: Federal $ 324 $ 140 $ 179 State 15 1 57 Foreign 1,068 934 670 1,407 1,075 906 Deferred (benefit) provision: Federal (32 ) 208 170 State 6 (16 ) 62 Foreign (32 ) 12 (6 ) (58 ) 204 226 $ 1,349 $ 1,279 $ 1,132 2013 2012 2011 United States $ 3,798 $ 3,525 $ 2,984 Foreign 4,396 3,037 2,703 $ 8,194 $ 6,562 $ 5,687  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company’s QCT segment ’ s non-United States headquarters is located in Singapore. The Company has obtained tax incentives in Singapore, which are effective through March 2027, that result in a tax exemption for the first five years provided that the Company meets specified employment and investment criteria. The Company’s Singapore tax rate will increase in fiscal 2017 and again in fiscal 2027 as a result of expiration of these incentives. Had the Company established QCT’s non-United States headquarters in Singapore without these tax incentives, the Company’s income tax expense would have been higher and impacted earnings per share attributable to Qualcomm as follows (in millions, except per share amounts): The revaluation of deferred taxes represents the impact of paying current taxes at a higher state effective tax rate than the effective tax rate that will be in effect when the resulting deferred tax asset or liability is scheduled to reverse. The Company has not recorded a deferred tax liability of approximately $7.6 billion related to the United States federal and state income taxes and foreign withholding taxes on approximately $21.6 billion of undistributed earnings of certain non-United States subsidiaries indefinitely invested outside the United States. Should the Company decide to repatriate the foreign earnings, the Company would have to adjust the income tax provision in the period management determined that the earnings will no longer be indefinitely invested outside the United States. The Company files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. The Company is currently a participant in the Internal Revenue Service (IRS) Compliance Assurance Process, whereby the IRS and the Company endeavor to agree on the treatment of all tax issues prior to the tax return being filed. The IRS completed its examination of the Company’s tax return for fiscal 2011 and issued a final revenue agent’s report during the third quarter of fiscal 2013, resulting in no change to the income tax provision. The Company is no longer subject to United States federal income tax examinations for years prior to fiscal 2012. The Company is subject to examination by the California Franchise Tax Board for fiscal years after 2008. The Company is also subject to income taxes in other taxing jurisdictions in the United States and around the world, many of which are open to tax examinations for periods after fiscal 2000. The Company does not expect the impact of any future state or foreign audits to be material. F- 18 2013 2012 2011 Expected income tax provision at federal statutory tax rate $ 2,868 $ 2,297 $ 1,991 State income tax provision, net of federal benefit 26 24 283 Foreign income taxed at other than U.S. rates (1,362 ) (1,045 ) (1,074 ) Tax credits (195 ) (36 ) (151 ) Valuation allowance (3 ) 55 42 Revaluation of deferred taxes 8 — 69 Other 7 (16 ) (28 ) $ 1,349 $ 1,279 $ 1,132 2013 2012 Additional income tax expense $ 758 $ 193 Reduction to basic earnings per share $ 0.44 $ 0.11 Reduction to diluted earnings per share $ 0.43 $ 0.11  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company had deferred tax assets and deferred tax liabilities as follows (in millions): At September 29, 2013 , the Company had unused federal net operating loss carryforwards of $131 million expiring from 2021 through 2031 , unused state net operating loss carryforwards of $604 million expiring from 2014 through 2033 , and unused foreign net operating loss carryforwards of $75 million , which expire from 2014 through 2021 . At September 29, 2013 , the Company had unused tax credits of $25 million in foreign jurisdictions, which begin to expire in 2014 . The Company does not expect its federal net operating loss carryforwards and its state income tax credits to expire unused. The Company believes, more likely than not, that it will have sufficient taxable income after deductions related to share-based awards to utilize the majority of its deferred tax assets. At September 29, 2013 , the Company has provided a valuation allowance on certain foreign deferred tax assets, state net operating losses and net capital losses of $21 million , $17 million and $13 million , respectively. The valuation allowances reflect the uncertainties surrounding the Company’s ability to generate sufficient future taxable income in certain foreign and state tax jurisdictions to utilize its net operating losses and the Company’s ability to generate sufficient capital gains to utilize all capital losses. A summary of the changes in the amount of unrecognized tax benefits for fiscal 2013 , 2012 and 2011 follows (in millions): F- 19 September 29, 2013 September 30, 2012 Unearned revenues $ 1,305 $ 1,340 Share-based compensation 497 623 Unrealized losses on marketable securities 293 232 Accrued liabilities and reserves 305 260 Unused net operating losses 91 105 Capitalized start-up and organizational costs 71 78 Tax credits 29 50 Other 49 102 Total gross deferred assets 2,640 2,790 Valuation allowance (51 ) (142 ) Total net deferred assets 2,589 2,648 Unrealized gains on marketable securities (536 ) (552 ) Intangible assets (265 ) (261 ) Property, plant and equipment (129 ) (115 ) Other (27 ) (7 ) Total deferred liabilities (957 ) (935 ) Net deferred assets $ 1,632 $ 1,713 Reported as: Current deferred tax assets $ 573 $ 309 Non-current deferred tax assets 1,059 1,412 Non-current assets held for sale 2 — Current deferred tax liabilities (1) — (1 ) Non-current deferred tax liabilities (1) (2 ) (7 ) $ 1,632 $ 1,713 (1) Current deferred tax liabilities and non-current deferred tax liabilities were included in other current liabilities and other liabilities, respectively, in the consolidated balance sheets.  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company does not expect any unrecognized tax benefits recorded at September 29, 2013 to result in cash payment in fiscal 2014 . Unrecognized tax benefits at September 29, 2013 included $218 million for tax positions that, if recognized, would impact the effective tax rate. The unrecognized tax benefits differ from the amount that would affect the Company’s effective tax rate primarily because the unrecognized tax benefits were included on a gross basis and did not reflect secondary impacts such as the federal deduction for state taxes, adjustments to deferred tax assets and the valuation allowance that might be required if the Company’s tax positions are sustained. The increase in unrecognized tax benefits in fiscal 2013 was primarily due to tax positions related to transfer pricing. The decrease in unrecognized tax benefits in fiscal 2012 was primarily due to settlement of the Company’s California tax examination for fiscal 2005 through fiscal 2008, which was partially offset by an increase in unrecognized tax benefits generated in fiscal 2012. The Company does not believe that it is reasonably possible that the total amounts of unrecognized tax benefits at September 29, 2013 will significantly increase or decrease in fiscal 2014 . Interest expense related to uncertain tax positions was negligible in fiscal 2013 , 2012 and 2011 . The amount of accrued interest and penalties was negligible at September 29, 2013 and September 30, 2012 . Cash amounts paid for income taxes, net of refunds received, were $1.1 billion , $1.3 billion and $2.1 billion for fiscal 2013 , 2012 and 2011 , respectively. Note 5. Capital Stock Preferred Stock. The Company has 8,000,000 shares of preferred stock authorized for issuance in one or more series, at a par value of $0.0001 per share. In conjunction with the distribution of preferred share purchase rights, 4,000,000 shares of preferred stock are designated as Series A Junior Participating Preferred Stock, and such shares are reserved for issuance upon exercise of the preferred share purchase rights. At September 29, 2013 and September 30, 2012 , no shares of preferred stock were outstanding. Preferred Share Purchase Rights Agreement. The Company has a Preferred Share Purchase Rights Agreement (Rights Agreement) to protect stockholders’ interests in the event of a proposed takeover of the Company. Under the original Rights Agreement, adopted on September 26, 1995, the Company declared a dividend of one preferred share purchase right (a Right) for each share of the Company’s common stock outstanding. Pursuant to the Rights Agreement, as amended and restated on December 7, 2006, each Right entitles the registered holder to purchase from the Company a one one-thousandth share of Series A Junior Participating Preferred Stock, $0.0001 par value per share, subject to adjustment for subsequent stock splits, at a purchase price of $180 . The Rights are exercisable only if a person or group (an Acquiring Person) acquires beneficial ownership of 20% or more of the Company’s outstanding shares of common stock without approval of the Board of Directors. Upon exercise, holders, other than an Acquiring Person, will have the right, subject to termination, to receive the Company’s common stock or other securities, cash or other assets having a market value, as defined, equal to twice such purchase price. The Rights, which expire on September 25, 2015 , are redeemable in whole, but not in part, at the Company’s option prior to the time such Rights are triggered for a price of $0.001 per Right. Stock Repurchase Program. On September 11, 2013, the Company announced a new repurchase program authorizing it to repurchase up to $5.0 billion of the Company’s common stock. The stock repurchase program has no expiration date. This $5.0 billion stock repurchase program replaced the previous $5.0 billion stock repurchase program, of which $791 million remained available for repurchase. Any shares repurchased are retired, and the amount paid in excess of par value is recorded to paid-in capital. During fiscal 2013 , 2012 and 2011 , the Company repurchased and retired 71,696,000 , 23,893,000 and 2,878,000 shares of common stock, respectively, for $4.6 billion , $1.3 billion and $142 million , respectively, before commissions. At September 29, 2013 , approximately $4.9 billion remained authorized for repurchase under the Company’s stock repurchase program. In connection with the Company’s prior stock repurchase programs, the Company sold three put options on its own stock during fiscal 2011, of which all expired unexercised during fiscal 2012. During fiscal 2012 and 2011, the Company recognized F- 20 2013 2012 2011 Beginning balance of unrecognized tax benefits $ 86 $ 96 $ 353 Additions based on prior year tax positions 1 — 64 Reductions for prior year tax positions and lapse in statute of limitations — (18 ) (10 ) Additions for current year tax positions 145 10 12 Settlements with taxing authorities (11 ) (2 ) (323 ) Ending balance of unrecognized tax benefits $ 221 $ 86 $ 96  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS gains of $80 million and losses of $5 million , respectively, in net investment income due to changes in the fair values of the put options. No put options were outstanding during fiscal 2013 . Dividends. The Company announced increases in its quarterly dividend per share of common stock from $0.19 to $0.215 on March 8, 2011 , from $0.215 to $0.25 on March 6, 2012 , and from $0.25 to $0.35 on March 5, 2013 . Dividends charged to retained earnings in fiscal 2013 , 2012 and 2011 were as follows (in millions, except per share data): On October 24, 2013 , the Company announced a cash dividend of $0.35 per share of common stock, payable on December 19, 2013 to stockholders of record as of December 2, 2013 , which will be reflected in the consolidated financial statements in the first quarter of fiscal 2014 . Note 6. Employee Benefit Plans Employee Savings and Retirement Plan. The Company has a 401(k) plan that allows eligible employees to contribute up to 100% of their eligible compensation, subject to annual limits. The Company matches a portion of the employee contributions and may, at its discretion, make additional contributions based upon earnings. The Company’s contribution expense was $70 million , $60 million and $52 million in fiscal 2013 , 2012 and 2011 , respectively. Equity Compensation Plans. The 2006 Long-Term Incentive Plan (the 2006 Plan) was adopted during the second quarter of fiscal 2006 and replaced the 2001 Stock Option Plan and the 2001 Non-Employee Directors’ Stock Option Plan and their predecessor plans (the Prior Plans). The 2006 Plan provides for the grant of incentive and non-qualified stock options, restricted stock units, stock appreciation rights, restricted stock, performance stock units and other share-based awards and is the source of shares issued under the Non-Qualified Deferred Compensation Plan (the NQDCP), formerly known as the Executive Retirement Matching Contribution Plan. The shares authorized under the 2006 Plan were approximately 573,284,000 at September 29, 2013 , including 90,000,000 shares that were approved by the Company’s stockholders in March 2013. The share reserve remaining under the 2006 Plan was approximately 270,380,000 at September 29, 2013 . Shares subject to any stock option under a Prior Plan that is terminated or canceled (but not a stock option under a Prior Plan that expires) following the date that the 2006 Plan was approved by stockholders, and shares that are subject to an award under the NQDCP and are returned to the Company because they fail to vest, will again become available for grant under the 2006 Plan. The Board of Directors of the Company may amend or terminate the 2006 Plan at any time. Certain amendments, including an increase in the share reserve, require stockholder approval. During fiscal 2011 , the Company assumed a total of 9,564,000 outstanding stock awards under various stock-based incentive plans (the Assumed Plans) as a result of the acquisition of Atheros (Note 9). The Assumed Plans provided for the grant of incentive stock options, non-qualified stock options, restricted stock units and other stock-based awards. The Company can continue to grant stock awards under one of the Assumed Plans, the Atheros Communications, Inc. 2004 Stock Incentive Plan, as amended (the Atheros Plan) to certain employees. The share reserve under the Atheros Plan was 4,075,000 at September 29, 2013 . All other remaining shares available under Assumed Plans were terminated on the date of the acquisition, and no additional shares may be granted under those plans. Net share-based awards, after forfeitures and cancelations, granted during fiscal 2013 , 2012 and 2011 represented 0.8% , 0.9% and 0.7% of outstanding shares as of the beginning of each fiscal year, respectively. Total share-based awards granted during fiscal 2013 , 2012 and 2011 represented 1.0% , 1.0% and 0.9% , respectively, of outstanding shares as of the end of each fiscal year. Restricted Stock Units: RSUs are share awards that entitle the holder to receive shares of the Company’s common stock upon vesting. The RSUs generally include dividend-equivalent rights and vest over periods of three years from the date of grant. A summary of RSU transactions for all equity compensation plans follows: F- 21 2013 2012 2011 Per Share Total Per Share Total Per Share Total First quarter $ 0.250 $ 435 $ 0.215 $ 368 $ 0.190 $ 314 Second quarter 0.250 439 0.215 377 0.190 319 Third quarter 0.350 615 0.250 429 0.215 360 Fourth quarter 0.350 604 0.250 438 0.215 368 $ 1.200 $ 2,093 $ 0.930 $ 1,612 $ 0.810 $ 1,361  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS At September 29, 2013 , total unrecognized estimated compensation expense related to non-vested RSUs granted prior to that date was $1.3 billion , which is expected to be recognized over a weighted-average period of 1.8 years. The total vest-date fair value of RSUs that vested during fiscal 2013 , 2012 and 2011 was $1.0 billion , $352 million and $43 million , respectively. For the majority of RSUs, shares are issued on the vesting dates net of the amount of shares needed to satisfy statutory tax withholding requirements to be paid by the Company on behalf of the employees. The total shares withheld were approximately 5,805,000 , 1,965,000 and 243,000 in fiscal 2013 , 2012 and 2011 , respectively, and were based on the value of the RSUs on their vesting dates as determined by the Company’s closing stock price. Total payments for the employees’ tax obligations to the taxing authorities were $374 million , $131 million and $14 million in fiscal 2013 , 2012 and 2011 , respectively. Stock Options: The Board of Directors may grant stock options to selected employees, directors and consultants to the Company to purchase shares of the Company’s common stock at an exercise price not less than the fair market value of the stock at the date of grant. Stock options vest over periods not exceeding five years and are exercisable for up to 10 years from the grant date . A summary of stock option transactions for all equity compensation plans follows: At September 29, 2013 , total unrecognized estimated compensation expense related to non-vested stock options granted prior to that date was $51 million , which is expected to be recognized over a weighted-average period of 0.5 years. The total intrinsic value of stock options exercised during fiscal 2013 , 2012 and 2011 was $949 million , $1.0 billion and $1.1 billion , respectively. The Company recorded cash received from the exercise of stock options of $1.3 billion , $1.5 billion and $2.5 billion and related tax benefits of $659 million , $438 million and $421 million during fiscal 2013 , 2012 and 2011 , respectively. Upon option exercise, the Company issues new shares of stock. Employee Stock Purchase Plan. The Company has an employee stock purchase plan for eligible employees to purchase shares of common stock at 85% of the lower of the fair market value on the first or the last day of each offering period, which is generally six months. Employees may authorize the Company to withhold up to 15% of their compensation during any offering period, subject to certain limitations. The employee stock purchase plan includes a non-423(b) plan. The shares authorized under the employee stock purchase plan were approximately 46,709,000 at September 29, 2013 . The shares reserved for future issuance were approximately 10,713,000 at September 29, 2013 . During fiscal 2013 , 2012 and 2011 , approximately 4,044,000 , 3,654,000 and 3,778,000 shares, respectively, were issued under the plan at an average price of $52.70 , $48.31 and $36.82 per share, respectively. At September 29, 2013 , total unrecognized estimated compensation expense related to non-vested purchase rights granted prior to that date was $21 million . The Company recorded cash received from the exercise of purchase rights of $213 million , $177 million and $139 million during fiscal 2013 , 2012 and 2011 , respectively. F- 22 Number of Shares Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value (In thousands) (In billions) RSUs outstanding at September 30, 2012 32,922 $ 53.22 RSUs granted 15,509 64.20 RSUs canceled/forfeited (1,549 ) 56.69 RSUs vested (15,804 ) 50.50 RSUs outstanding at September 29, 2013 31,078 $ 59.91 $ 2.1 Number of Shares Weighted- Average Exercise Price Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (Years) (In billions) Stock options outstanding at September 30, 2012 106,601 $ 39.96 Stock options canceled/forfeited/expired (652 ) 40.25 Stock options exercised (34,923 ) 37.51 Stock options outstanding at September 29, 2013 71,026 $ 41.17 4.2 $ 1.9 Exercisable at September 29, 2013 65,243 $ 41.09 4.0 $ 1.7  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 7. Commitments and Contingencies Legal Proceedings. Tessera, Inc. v. QUALCOMM Incorporated : On April 17, 2007, Tessera filed a patent infringement lawsuit in the United States District Court for the Eastern District of Texas and a complaint with the United States International Trade Commission (ITC) pursuant to Section 337 of the Tariff Act of 1930 against the Company and other companies, alleging infringement of two patents. The district court action was stayed pending resolution of the ITC proceeding, including all appeals. On May 20, 2009, the ITC issued a limited exclusion order and a cease and desist order, both of which were terminated when the patents expired on September 24, 2010. During the period of the exclusion order, the Company shifted supply of accused chips for customers who manufacture products that may be imported to the United States to a licensed supplier of Tessera, and the Company continued to supply those customers without interruption. The ITC’s orders were affirmed on appeal, and on November 28, 2011, the United States Supreme Court denied the Company’s petition for review. On January 18, 2012, pursuant to the parties’ stipulation, the District Court in the Eastern District of Texas lifted the stay and ordered that the case be moved to the United States District Court for the Northern District of California. On March 1, 2012, that court consolidated the case with an earlier-filed lawsuit filed by Tessera against multiple parties, including some of the Company’s semiconductor chip package suppliers. The court has set April 24, 2014 as the hearing date for claims construction and any summary judgment motions that may be filed. Trial is scheduled for August 25, 2014. Tessera may continue to seek alleged past damages in the district court, but it cannot obtain injunctive relief due to the expiration of the patents. MOSAID Technologies Incorporated v. Dell, Inc. et al. : On March 16, 2011, MOSAID filed a complaint against Atheros Communications, Inc. (Atheros Communications), which the Company acquired in May 2011 and renamed Qualcomm Atheros, Inc. (Qualcomm Atheros), and 32 other entities in the United States District Court for the Eastern District of Texas alleging that certain Wi-Fi products infringed six MOSAID patents and seeking damages for the relevant statutory period prior to May 2011. On July 17, 2013, MOSAID and the Company entered into an agreement pursuant to which MOSAID agreed to dismiss with prejudice all claims against the Company, licensed to the Company certain MOSAID patents and provided other considerations, and the Company paid to MOSAID an amount that was not material to the Company’s financial statements. The court dismissed the claims against the Company with prejudice on August 2, 2013. ParkerVision, Inc. v. QUALCOMM Incorporated : On July 20, 2011, ParkerVision filed a complaint against the Company in the United States District Court for the Middle District of Florida alleging that certain of the Company’s products infringe seven of its patents alleged to cover direct down-conversion receivers. ParkerVision’s complaint sought damages and injunctive and other relief. On February 28, 2012, ParkerVision filed an amended complaint dropping two patents from the case and adding one new patent. On January 22, 2013, the court granted in part ParkerVision’s motion to dismiss the Company’s counterclaim for inequitable conduct, and the Company subsequently withdrew the remainder of its inequitable conduct counterclaim. On February 20, 2013, the court issued its claim construction order. The Company filed its amended answer and counterclaims on April 11, 2013. Subsequently, ParkerVision narrowed its allegations to assert only four patents. The trial began on October 7, 2013. On October 17, 2013, the jury returned a verdict finding all asserted claims of the four at-issue patents to be infringed and finding that none of the asserted claims are invalid. On October 24, 2013, the jury returned a separate verdict assessing total past damages of approximately $173 million and finding that the Company’s infringement was not willful. The Company recorded a $173 million charge in other expenses in fiscal 2013 as a result of this verdict. The court will set a schedule for post-verdict proceedings, including the parties’ respective motions for judgment as a matter of law and ParkerVision’s request for ongoing equitable relief. The Company intends to appeal. Icera Complaint to the European Commission : On June 7, 2010, the European Commission (the Commission) notified and provided the Company with a redacted copy of a complaint filed with the Commission by Icera, Inc. alleging that the Company has engaged in anticompetitive activity. The Company was asked by the Commission to submit a preliminary response to the portions of the complaint disclosed to it, and the Company submitted its response in July 2010. On October 19, 2011, the Commission notified the Company that it should provide to the Commission additional documents and information. On January 16, 2012, the Company provided additional documents and information in response to that request. On July 10, 2013, the Commission ordered the Company to provide additional documents and information. The Company continues to cooperate fully with the Commission’s preliminary investigation. Korea Fair Trade Commission (KFTC) Complaint : On January 4, 2010, the KFTC issued a written decision finding that the Company had violated South Korean law by offering certain discounts and rebates for purchases of its CDMA chips and for including in certain agreements language requiring the continued payment of royalties after all licensed patents have expired. The KFTC levied a fine, which the Company paid in the second quarter of fiscal 2010. The Company appealed to the Seoul High Court, and on June 19, 2013, the Seoul High Court affirmed the KFTC’s decision. On July 4, 2013, the Company filed an appeal with the Korea Supreme Court. F- 23  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Japan Fair Trade Commission (JFTC) Complaint : The JFTC received unspecified complaints alleging that the Company’s business practices are, in some way, a violation of Japanese law. On September 29, 2009, the JFTC issued a cease and desist order concluding that the Company’s Japanese licensees were forced to cross-license patents to the Company on a royalty-free basis and were forced to accept a provision under which they agreed not to assert their essential patents against the Company’s other licensees who made a similar commitment in their license agreements with the Company. The cease and desist order seeks to require the Company to modify its existing license agreements with Japanese companies to eliminate these provisions while preserving the license of the Company’s patents to those companies. The Company disagrees with the conclusions that it forced its Japanese licensees to agree to any provision in the parties’ agreements and that those provisions violate the Japanese Antimonopoly Act. The Company has invoked its right under Japanese law to an administrative hearing before the JFTC. In February 2010, the Tokyo High Court granted the Company’s motion and issued a stay of the cease and desist order pending the administrative hearing before the JFTC. The JFTC has held hearings on 19 different dates, with another hearing scheduled for January 22, 2014 and additional hearing dates yet to be scheduled. Securities and Exchange Commission (SEC) Formal Order of Private Investigation and Department of Justice Investigation : On September 8, 2010, the Company was notified by the SEC’s Los Angeles Regional office of a formal order of private investigation. The Company understands that the investigation arose from a “whistleblower’s” allegations made in December 2009 to the audit committee of the Company’s Board of Directors and to the SEC. In 2010, the audit committee completed an internal review of the allegations with the assistance of independent counsel and independent forensic accountants. This internal review into the whistleblower’s allegations and related accounting practices did not identify any errors in the Company’s financial statements. On January 27, 2012, the Company learned that the U.S. Attorney’s Office for the Southern District of California/Department of Justice (collectively, DOJ) had begun an investigation regarding the Company’s compliance with the Foreign Corrupt Practices Act (FCPA). FCPA compliance is also a focus of the SEC investigation. The audit committee continues to conduct an internal review into the Company’s compliance with the FCPA with the assistance of independent counsel and independent forensic accountants. As previously disclosed, the Company has discovered, and as a part of its ongoing cooperation with these investigations has informed the SEC and the DOJ of, instances in which special hiring consideration, gifts or other benefits (collectively, benefits) were provided to several individuals associated with Chinese state-owned companies or agencies. Based on the facts currently known, the Company believes the aggregate monetary value of the benefits in question to be less than $250,000, excluding employment compensation. The Company is continuing to cooperate with the SEC and the DOJ, but is unable to predict the outcome of their investigations. The Company will continue to vigorously defend itself in the foregoing matters. However, litigation and investigations are inherently uncertain. Accordingly, the Company cannot predict the outcome of these matters. Other than the amount recorded for the ParkerVision verdict, the Company has not recorded any accrual at September 29, 2013 for contingent losses associated with these matters based on its belief that losses, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time. Nonetheless, the unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows. The Company is engaged in numerous other legal actions not described above arising in the ordinary course of its business and, while there can be no assurance, believes that the ultimate outcome of these other legal actions will not have a material adverse effect on its business, results of operations, financial condition or cash flows. Loans and Debentures. The Company’s former BWA subsidiaries (Note 10) had loan and debenture liabilities in connection with the BWA spectrum won in India in fiscal 2010. The subsidiaries were merged into one remaining former BWA subsidiary in August 2013, and that subsidiary had a loan from a bank related to payment of $81 million to the India Government’s Department of Telecommunications in March 2012 (the DoT loan), which was recorded by the Company as a charge to other expenses in the second quarter of fiscal 2012. On on June 25, 2013, all outstanding debentures ( $492 million , including accrued interest) were redeemed, and on August 30, 2013, all outstanding loans, excluding the DoT loan, ( $368 million ) were repaid, in full using funding provided by Bharti, and the Company’s related guarantee and indemnification agreements were terminated. Prior to the deconsolidation of the BWA subsidiaries on June 25, 2013, cash paid for interest on the loans and debentures was $92 million , $88 million and $94 million for fiscal 2013 , 2012 and 2011 , respectively. The DoT loan was guaranteed by QUALCOMM Incorporated and one of its wholly owned subsidiaries and was denominated in Indian rupees. The fair value of the guarantee was recorded as a liability when the Company deconsolidated the BWA subsidiaries (Note 10). The DoT loan was due and payable on December 1, 2014 and bore interest at an annual rate that was reset quarterly, plus 0.25% ( 10.20% at September 29, 2013 ) with interest payments due monthly. The DoT loan was repaid in full on October 15, 2013 ( $67 million ) using funding provided by Bharti as a condition to Bharti’s acquisition of all of the Company’s interest in the remaining former BWA subsidiary, which occurred on October 17, 2013. F- 24  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Indemnifications. With the exception of the practices of its Qualcomm Atheros subsidiary, the Company generally does not indemnify its customers and licensees for losses sustained from infringement of third-party intellectual property rights. However, the Company is contingently liable under certain product sales, services, license and other agreements to indemnify certain customers against certain types of liability and/or damages arising from qualifying claims of patent infringement by products or services sold or provided by the Company. The Company’s obligations under these agreements may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments made by the Company. Under Qualcomm Atheros’ indemnification agreements, software license agreements and product sale agreements (including its standard software license agreements and standard terms and conditions of semiconductor sales), Qualcomm Atheros agrees, subject to restrictions and after certain conditions are met, to indemnify and defend its licensees and customers against third-party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks or trade secrets, and to pay any judgments entered on such claims against the licensees or customers. Through September 29, 2013 , Qualcomm Atheros has received a number of claims from its direct and indirect customers and other third parties for indemnification under such agreements with respect to alleged infringement of third-party intellectual property rights by its products. These indemnification arrangements are not initially measured and recognized at fair value because they are deemed to be similar to product warranties in that they relate to claims and/or other actions that could impair the ability of the Company’s direct or indirect customers to use the Company’s products or services. Accordingly, the Company records liabilities resulting from the arrangements when they are probable and can be reasonably estimated. Reimbursements under indemnification arrangements have not been material to the Company’s consolidated financial statements. The Company has not recorded any accrual for contingent liabilities at September 29, 2013 associated with these indemnification arrangements, other than insignificant amounts, based on the Company’s belief that additional liabilities, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time. Purchase Obligations. The Company has agreements with suppliers and other parties to purchase inventory, other goods and services and long-lived assets. Obligations, which generally have a remaining term of less than one year, under these agreements at September 29, 2013 for each of the subsequent five years from fiscal 2014 through 2018 were approximately $3.3 billion , $202 million , $54 million , $6 million and $3 million , respectively, and $10 million thereafter. Of these amounts, for fiscal 2014 and 2015 , commitments to purchase integrated circuit product inventories comprised $2.7 billion and $81 million , respectively. Integrated circuit product inventory obligations represent purchase commitments for silicon wafers and assembly and test services. Under the Company’s manufacturing relationships with its foundry partners and assembly and test service providers, cancelation of outstanding purchase orders is generally allowed but requires payment of all costs incurred through the date of cancelation. Leases. The future minimum lease payments for all capital leases and operating leases at September 29, 2013 were as follows (in millions): The Company leases certain of its land, facilities and equipment under noncancelable operating leases, with terms ranging from less than one year to 31 years and with provisions in certain leases for cost-of-living increases. Rental expense for fiscal 2013 , 2012 and 2011 was $90 million , $87 million and $87 million , respectively. The Company leases certain property under capital lease agreements primarily related to site leases that have an initial term of five to seven years with renewal options of up to five additional renewal periods. Capital lease obligations are included in other liabilities. F- 25 Capital Leases Operating Leases Total 2014 $ 2 $ 89 $ 91 2015 2 74 76 2016 1 62 63 2017 1 46 47 2018 1 25 26 Thereafter 29 47 76 Total minimum lease payments 36 $ 343 $ 379 Deduct: Amounts representing interest 19 Present value of minimum lease payments 17 Deduct: Current portion of capital lease obligations — Long-term portion of capital lease obligations $ 17  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 8. Segment Information The Company is organized on the basis of products and services. The Company aggregates four of its divisions into the QWI segment and two of its divisions into the QSI segment. Reportable segments are as follows: The Company evaluates the performance of its segments based on earnings (loss) before income taxes (EBT) from continuing operations. Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to unallocated corporate assets. Certain income and charges are not allocated to segments in the Company’s management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain net investment income; certain share-based compensation; and certain research and development expenses and selling and marketing expenses that were deemed to be not directly related to the businesses of the segments. Additionally, starting with acquisitions in the third quarter of fiscal 2011, unallocated charges include recognition of the step-up of inventories to fair value, amortization and impairment of certain intangible assets and certain other acquisition-related charges. Such charges related to acquisitions that were completed prior to the third quarter of fiscal 2011 are allocated to the respective segments. The table below presents revenues and EBT for reportable segments (in F- 26 • QCT (Qualcomm CDMA Technologies) segment — develops and supplies integrated circuits and system software based on CDMA, OFDMA and other technologies for use in voice and data communications, networking, application processing, multimedia and global positioning system products. • QTL (Qualcomm Technology Licensing) segment — grants licenses or otherwise provides rights to use portions of the Company’s intellectual property portfolio, which, among other rights, includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products, including, without limitation, products implementing CDMA2000, WCDMA, CDMA TDD (including TD-SCDMA), GSM/GPRS/EDGE and/or OFDMA (including LTE) standards and their derivatives, and QTL collects license fees as well as royalties based on sales by licensees of products incorporating or using the Company’s intellectual property. • QWI (Qualcomm Wireless & Internet) segment — comprised of: • Omnitracs division — provides fleet management, satellite- and terrestrial-based two-way wireless information and position reporting and other services, software and hardware to transportation and logistics companies. On August 21, 2013, the Company entered into a definitive agreement to sell the North and Latin American operations of Omnitracs (which comprise substantially all of the Omnitracs division) to a third party, subject to closing conditions (Note 2); • QIS (Qualcomm Internet Services) division — provides content enablement services for the wireless industry and push-to-talk and other software products and services for wireless network operators; • QGOV (Qualcomm Government Technologies) division — provides development and other services and related products involving wireless communications technologies to government agencies and their contractors; and • QRS (Qualcomm Retail Solutions) division — builds and manages software applications that enable certain mobile location-awareness and commerce services. • QSI (Qualcomm Strategic Initiatives) segment — comprised of the Company’s Qualcomm Ventures and Structured Finance & Strategic Investments divisions. QSI makes strategic investments that the Company believes may open new or expand opportunities for its technologies, support the design and introduction of new products or services for voice and data communications or possess unique capabilities or technology. Many of these strategic investments are in early-stage companies. QSI also holds wireless spectrum. Prior to fiscal 2013, QSI’s FLO TV division was presented as discontinued operations. All discontinued operations were attributable to Qualcomm.  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS millions): Segment assets are comprised of accounts receivable and inventories for all reportable segments other than QSI. QSI segment assets include certain marketable securities, notes receivable, wireless spectrum, other investments and all assets of consolidated subsidiaries included in QSI. QSI segment assets related to the discontinued FLO TV business totaled $59 million and $913 million at September 30, 2012 and September 25, 2011 , respectively. QSI assets at September 29, 2013 , September 30, 2012 and September 25, 2011 included $17 million , $11 million and $20 million , respectively, related to investments in equity method investees. Reconciling items for total assets included $892 million , $1.2 billion and $806 million at September 29, 2013 , September 30, 2012 and September 25, 2011 , respectively, of goodwill and other assets related to the Company’s QMT division, a nonreportable segment developing display technology for mobile devices and other applications. Total segment assets also differ from total assets on a consolidated basis as a result of unallocated corporate assets primarily comprised of certain cash, cash equivalents, marketable securities, property, plant and equipment, deferred tax assets, other intangible assets and assets of nonreportable segments. The net book values of long-lived tangible assets located outside of the United States were $896 million , $1.1 billion and $629 million at September 29, 2013 , September 30, 2012 and September 25, 2011 , respectively. The net book values of long-lived tangible assets located in the United States were $2.1 billion , $1.8 billion and $1.8 billion at September 29, 2013 , September 30, 2012 and September 25, 2011 , respectively. Revenues from each of the Company’s divisions aggregated into the QWI reportable segment were as follows (in millions): F- 27 QCT QTL QWI QSI Reconciling Items Total 2013 Revenues $ 16,715 $ 7,554 $ 613 $ — $ (16 ) $ 24,866 EBT 3,189 6,590 (8 ) 56 (1,633 ) 8,194 Total assets 3,305 28 53 511 41,619 45,516 2012 Revenues $ 12,141 $ 6,327 $ 633 $ — $ 20 $ 19,121 EBT 2,296 5,585 (15 ) (170 ) (1,134 ) 6,562 Total assets 2,278 63 129 1,424 39,118 43,012 2011 Revenues $ 8,859 $ 5,422 $ 656 $ — $ 20 $ 14,957 EBT 2,056 4,753 (152 ) (132 ) (838 ) 5,687 Total assets 1,569 36 136 2,386 32,295 36,422 2013 2012 2011 Omnitracs $ 372 $ 371 $ 395 QIS 138 151 150 QGOV 102 109 100 QRS 1 2 11 $ 613 $ 633 $ 656  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Other reconciling items were comprised as follows (in millions): Nonreportable segments’ losses before taxes during fiscal 2013 , 2012 and 2011 were primarily attributable to the Company’s QMT division. Effectively all equity in earnings (losses) of investees was recorded in QSI in fiscal 2013 , 2012 and 2011 . Amounts included in unallocated expenses related to the amortization and impairment of certain intangible assets, contract terminations and the recognition of the step-up of inventories to fair value that resulted from acquisitions were as follows (in millions): In fiscal 2013, 2012 and 2011, interest income included in QSI EBT was $8 million , $19 million and $20 million , respectively, and interest expense included in QSI EBT was $18 million , $79 million and $99 million , respectively. Interest income and interest expense recorded by other segments were negligible in all periods presented. Intersegment revenues are based on prevailing market rates for substantially similar products and services or an approximation thereof, but the purchasing segment may record the cost of revenues at the selling segment’s original cost. In that event, the elimination of the selling segment’s gross margin is included with other intersegment eliminations in reconciling items. QCT revenues for fiscal 2013 , 2012 and 2011 included $3 million , $4 million and $3 million of intersegment revenues, respectively. All other revenues for reportable segments were from external customers for all periods presented. The Company distinguishes revenues from external customers by geographic areas based on the location to which its products, software or services are delivered or, for QTL licensing revenues, the invoiced addresses of its licensees. Sales information by geographic area was as follows (in millions): F- 28 2013 2012 2011 Revenues Nonreportable segments $ (12 ) $ 24 $ 23 Intersegment eliminations (4 ) (4 ) (3 ) $ (16 ) $ 20 $ 20 EBT Unallocated cost of equipment and services revenues $ (335 ) $ (300 ) $ (210 ) Unallocated research and development expenses (789 ) (702 ) (553 ) Unallocated selling, general and administrative expenses (502 ) (549 ) (506 ) Unallocated other expense (173 ) — — Unallocated investment income, net 877 928 756 Nonreportable segments (711 ) (511 ) (324 ) Intersegment eliminations — — (1 ) $ (1,633 ) $ (1,134 ) $ (838 ) 2013 2012 2011 Unallocated cost of equipment and services revenues $ 264 $ 225 $ 143 Unallocated research and development expenses 3 — 6 Unallocated selling, general and administrative expenses 26 43 59 2013 2012 2011 China $ 12,288 $ 7,971 $ 4,744 South Korea 4,983 4,203 2,887 Taiwan 2,683 2,648 2,550 United States 805 967 897 Other foreign 4,107 3,332 3,879 $ 24,866 $ 19,121 $ 14,957  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 9. Acquisitions During fiscal 2013, the Company acquired five businesses for total cash consideration of $115 million . Technology-based intangible assets recognized in the amount of $24 million are being amortized on a straight-line basis over a weighted-average useful life of six years. Goodwill of $82 million was recognized in these transactions, of which $21 million is expected to be deductible for tax purposes. During fiscal 2012, the Company acquired eight businesses for total cash consideration of $774 million . Technology-based intangible assets recognized in the amount of $164 million are being amortized on a straight-line basis over a weighted-average useful life of six years. The Company recorded $62 million related to 10 in-process research and development (IPR&D) projects. At September 29, 2013, the remaining IPR&D of $51 million consisted of six projects, which are expected to be completed within two years. Upon completion, the IPR&D projects will be amortized over their useful lives, which are expected to range between three to nine years. Goodwill of $517 million was recognized in these transactions, of which $71 million is expected to be deductible for tax purposes. On May 24, 2011, the Company acquired Atheros Communications, Inc. (Atheros) for total cash consideration of $3.1 billion (net of $233 million of cash acquired) and the exchange of vested and earned unvested share-based awards with an estimated fair value of $106 million . The primary objective of the acquisition was to help accelerate the expansion of the Company’s technologies and platforms to new businesses beyond cellular, including home, enterprise and carrier networking. Atheros was integrated into the QCT segment. The $3.5 billion total purchase price was allocated as follows: $1.8 billion to goodwill, $856 million to amortizable intangible assets, $150 million to IPR&D and $691 million to other net assets. Goodwill recognized in the Atheros acquisition is not deductible for tax purposes and was allocated to the QCT segment for annual impairment testing purposes. Goodwill largely consists of expected revenue synergies resulting from the combination of product portfolios, cost synergies related to reduction in headcount growth and lower manufacturing costs, assembled workforce and access to additional sales and distribution channels. The intangible assets acquired are being amortized on a straight-line basis over weighted-average useful lives of four years, six years and three years for technology-based, marketing-related and customer-related intangible assets, respectively. At September 29, 2013, the remaining IPR&D of $3 million consisted of one project, which is expected to be completed over the next year . The Company’s results of operations for fiscal 2011 included the operating results of Atheros since the date of acquisition, the amounts of which were not material. Unaudited pro forma revenues and net income attributable to Qualcomm for fiscal 2011, presenting the results of operations of Qualcomm and Atheros as though the companies had been combined as of the beginning of fiscal 2010, were $15.6 billion and $4.3 billion , respectively. This unaudited pro forma information is provided for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of the beginning of fiscal 2010. During fiscal 2011, the Company acquired nine other businesses for total cash consideration of $466 million . Technology-based intangible assets recognized in the amount of $150 million are being amortized on a straight-line basis over a weighted-average useful life of five years. Goodwill of $276 million was recognized in these transactions, of which $234 million is expected to be deductible for tax purposes. Goodwill recognized in these acquisitions was assigned to the Company’s reportable segments as follows (in millions): F- 29 2013 2012 2011 QCT $ 65 $ 364 $ 1,998 QWI — — 36 QTL — 22 6 Nonreportable segments 17 131 8 $ 82 $ 517 $ 2,048  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 10. Deconsolidation of and Retained Investment in the BWA Subsidiaries In fiscal 2010, the Company established subsidiaries in India to operate a wireless network using Broadband Wireless Access (BWA) spectrum (the BWA subsidiaries). In June 2012, Bharti Airtel Limited (Bharti), an Indian wireless network operator, purchased shares in the BWA subsidiaries that were held by two third-party Indian investors, and the BWA subsidiaries issued additional equity interests to Bharti for $85 million , reducing the Company’s ownership interest in each of the BWA subsidiaries to 51% . On June 25, 2013, the BWA subsidiaries issued additional equity interests to Bharti for $11 million , further reducing the Company’s ownership interests to 49% , and redeemed all of the outstanding debentures using funding provided by Bharti through subordinated debt (Note 7). Also, Bharti gained additional power over significant activities through certain leadership changes. These events resulted in a change in control of the BWA subsidiaries and therefore, the BWA subsidiaries were deconsolidated from the Company’s financial statements. Prior to the deconsolidation, the assets and liabilities of the BWA subsidiaries were classified as held for sale. As a result of the deconsolidation, the Company recognized a gain in net investment income of $6 million measured as the difference between (a) the net fair values of the retained noncontrolling investment and the Company’s guarantee of the former BWA subsidiaries’ bank loans (Note 7) and (b) the carrying values of the former BWA subsidiaries’ net assets, including cumulative translation losses and noncontrolling interests. Total assets and total liabilities were reduced by $1.0 billion and $999 million , respectively. Such assets and liabilities consisted primarily of wireless spectrum, network-related assets and loan obligations. The deconsolidation of these amounts represented a noncash investing and noncash financing transaction and was not reflected in the statement of cash flows for the nine months ended June 30, 2013. The fair value of the Company’s retained noncontrolling investment of $34 million was determined by applying a discounted cash flow valuation model to the estimated cash proceeds that the Company expected to receive upon the sale of its interest to Bharti. The former BWA subsidiaries were merged into one entity on August 5, 2013. On August 30, 2013, the remaining former BWA subsidiary repaid all of the outstanding loans, excluding the DoT loan, using funding provided by Bharti in the form of subordinated debt (Note 7). Also on August 30, 2013, Bharti converted the subordinated debt, and the former BWA subsidiary issued additional equity interests to Bharti, further reducing the Company’s ownership interest to 7% . On October 15, 2013, the DoT loan was repaid using funding provided by Bharti (Note 7), and on October 17, 2013, Bharti acquired all of the Company’s interest in the remaining former subsidiary. Note 11. Discontinued Operations On March 27, 2011, the FLO TV business and network were shut down. On December 27, 2011 , the Company completed the sale of substantially all of its 700 MHz spectrum for $1.9 billion , and as a result, the Company recognized a gain in discontinued operations of $1.2 billion during fiscal 2012 . Accordingly, the results of operations of the FLO TV business were presented as discontinued operations. Income (loss) from discontinued operations included share-based compensation and excluded certain general corporate expenses allocated to the FLO TV business during the periods presented. The results of the discontinued FLO TV operations were as follows (in millions): Note 12. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value: F- 30 2012 2011 Revenues $ — $ 5 Income (loss) from discontinued operations $ 1,203 $ (507 ) Income tax (expense) benefit (427 ) 194 Discontinued operations, net of income taxes $ 776 $ (313 )  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at September 29, 2013 (in millions): Cash Equivalents and Marketable Securities. The Company considers all highly liquid investments, including repurchase agreements, with original maturities of three months or less to be cash equivalents. Cash equivalents are comprised of money market funds, certificates of deposit, commercial paper, government agencies’ securities and repurchase agreements fully collateralized by government agencies’ securities. With the exception of auction rate securities, the Company obtains pricing information from quoted market prices, pricing vendors or quotes from brokers/dealers. The Company conducts reviews of its primary pricing vendors to determine whether the inputs used in the vendor’s pricing processes are deemed to be observable. The fair value for interest-bearing securities includes accrued interest. The fair value of U.S. Treasury securities and government-related securities, corporate bonds and notes and common and preferred stock is generally determined using standard observable inputs, including reported trades, quoted market prices, matrix pricing, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets and/or benchmark securities. The fair value of debt and equity funds is reported at published net asset values. The Company assesses the daily frequency and size of transactions at published net asset values and/or the funds’ underlying holdings to determine whether fair value is based on observable or unobservable inputs. F- 31 • Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. • Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument. • Level 3 includes financial instruments for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company’s own assumptions. Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 4,206 $ 1,346 $ — $ 5,552 Marketable securities U.S. Treasury securities and government-related securities 648 434 — 1,082 Corporate bonds and notes — 11,870 — 11,870 Mortgage- and asset-backed securities — 938 239 1,177 Auction rate securities — — 83 83 Common and preferred stock 1,541 818 — 2,359 Equity funds 960 — — 960 Debt funds 2,157 3,576 — 5,733 Total marketable securities 5,306 17,636 322 23,264 Derivative instruments — 40 — 40 Other investments 243 — — 243 Total assets measured at fair value $ 9,755 $ 19,022 $ 322 $ 29,099 Liabilities Derivative instruments $ 2 $ 21 $ — $ 23 Other liabilities 244 — — 244 Total liabilities measured at fair value $ 246 $ 21 $ — $ 267  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The fair value of highly rated mortgage- and asset-backed securities is derived from the use of matrix pricing (prices for similar securities) or, in some cases, cash flow pricing models with observable inputs such as contractual terms, maturity, credit rating and/or securitization structure to determine the timing and amount of future cash flows. Certain mortgage- and asset-backed securities, principally those rated below AAA, may require the use of significant unobservable inputs to estimate fair value, such as default likelihood, recovery rates and prepayment speed. The fair value of auction rate securities is estimated by the Company using a discounted cash flow model that incorporates transaction details such as contractual terms, maturity and timing and amount of future cash flows, as well as assumptions related to liquidity, default likelihood and recovery, the future state of the auction rate market and credit valuation adjustments of market participants. Though certain of the securities held by the Company are pools of student loans guaranteed by the U.S. government, prepayment speeds and illiquidity discounts are considered significant unobservable inputs. These additional inputs are generally unobservable, and therefore, auction rate securities are included in Level 3. Derivative Instruments. Derivative instruments include foreign currency option and forward contracts to manage foreign exchange risk for certain foreign currency transactions and certain balances denominated in a foreign currency; option, forward and swap contracts to acquire or reduce foreign exchange risk and/or equity, prepayment and credit risks for portfolios of marketable securities classified as trading; and warrants to purchase common stock of other companies at fixed prices. Derivative instruments that are traded on an exchange are valued using quoted market prices and are included in Level 1. Derivative instruments that are not traded on an exchange are valued using conventional calculations/models that are primarily based on observable inputs, such as foreign currency exchange rates, the Company’s stock price, volatilities and interest rates, and therefore, such derivative instruments are included in Level 2. Other Investments and Other Liabilities. Other investments and other liabilities included in Level 1 are comprised of the Company’s deferred compensation plan liability and related assets, which consist of mutual funds classified as trading securities and included in other noncurrent assets. Other liabilities included in Level 3 in fiscal 2012 were comprised of put rights held by third parties representing interests in certain of the Company’s subsidiaries. These put rights were terminated during the third quarter of fiscal 2012 and were previously valued with a conventional option pricing model using significant unobservable inputs. Activity between Levels of the Fair Value Hierarchy. There were no significant transfers between Level 1 and Level 2 during fiscal 2013 or 2012 . When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. The following table includes the activity for marketable securities and other liabilities classified within Level 3 of the valuation hierarchy (in millions): The Company recognizes transfers into and out of levels within the fair value hierarchy at the end of the fiscal month in which the actual event or change in circumstances that caused the transfer occurs. Transfers into Level 3 in fiscal 2013 and 2012 primarily consisted of debt securities with significant inputs that became unobservable as a result of an increased likelihood of a shortfall in contractual cash flows or a significant downgrade in credit ratings. Nonrecurring Fair Value Measurements. The Company measures certain assets at fair value on a nonrecurring basis. These assets include cost and equity method investments when they are deemed to be other-than-temporarily impaired or retained upon deconsolidation of a subsidiary, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or F- 32 2013 2012 Auction Rate Securities Mortgage- and Asset-Backed Securities Auction Rate Securities Mortgage- and Asset-Backed Securities Other Liabilities Beginning balance of Level 3 $ 118 $ 203 $ 124 $ 27 $ 7 Total realized and unrealized gains or losses: Included in investment income, net — 8 — 5 (7 ) Included in other comprehensive income 1 (6 ) — 7 — Purchases — 163 — 149 — Sales — (70 ) — — — Settlements (36 ) (77 ) (6 ) (28 ) — Transfers into Level 3 — 18 — 43 — Ending balance of Level 3 $ 83 $ 239 $ 118 $ 203 $ —  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS determined to be impaired. During fiscal 2013 and 2012, certain property, plant and equipment related to the Company’s QMT division were written down to their estimated fair values resulting in impairment charges of $158 million and $54 million , respectively (Note 2). At September 29, 2013 , the carrying value of the QMT division’s property, plant and equipment was $724 million . During fiscal 2013, the Company recorded its retained investment in the former BWA subsidiaries at its estimated fair value of $34 million (Note 10). During fiscal 2012 and 2011, goodwill related to the Company’s QRS division was written down to implied fair value resulting in impairment charges of $23 million and $114 million , respectively. The impairment charges were recorded in other expenses. At September 29, 2013 , the carrying value of the QRS division’s goodwill was $17 million . The estimation of fair values and cash flows used in these fair value measurements required the use of significant unobservable inputs, and as a result, the fair value measurements were classified as Level 3. During fiscal 2013 , 2012 and 2011 , the Company did not have any other significant assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition. Note 13. Marketable Securities Marketable securities were comprised as follows (in millions): The Company holds an investment in a debt fund for which the Company elected the fair value option because the Company is able to redeem its shares at net asset value, which is determined daily. The investment would have otherwise been recorded using the equity method. The debt fund has no single maturity date. At September 29, 2013 , the Company had an effective ownership interest in the debt fund of 21% . Net increases in fair value associated with this investment of $17 million , $45 million and $9 million were recognized in net investment income in fiscal 2013 , 2012 and 2011, respectively. The Company classifies certain portfolios of debt securities that utilize derivative instruments to acquire or reduce foreign exchange risk, interest rate risk and/or equity, prepayment and credit risk as trading. Net losses recognized on debt securities classified as trading still held at September 29, 2013 were $20 million . Net gains recognized on debt securities classified as trading still held at September 30, 2012 were $22 million . The Company did not hold any securities classified as trading during fiscal 2011. At September 29, 2013 , the contractual maturities of available-for-sale debt securities were as follows (in millions): F- 33 Current Noncurrent September 29, 2013 September 30, 2012 September 29, 2013 September 30, 2012 Trading: U.S. Treasury securities and government-related securities $ 241 $ 196 $ 49 $ 254 Corporate bonds and notes 269 283 256 176 Mortgage- and asset-backed securities — — 104 120 Total trading $ 510 479 409 550 Available-for-sale: U.S. Treasury securities and government-related securities $ 721 $ 362 $ 71 $ 592 Corporate bonds and notes 4,533 4,554 6,812 7,570 Mortgage- and asset-backed securities 745 1,157 328 241 Auction rate securities — — 83 118 Common and preferred stock 8 57 2,351 2,030 Equity funds — — 960 1,126 Debt funds 2,307 1,958 2,889 1,716 Total available-for-sale 8,314 8,088 13,494 13,393 Fair value option: Debt fund — — 537 520 Total marketable securities $ 8,824 $ 8,567 $ 14,440 $ 14,463  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Debt securities with no single maturity date included debt funds, mortgage- and asset-backed securities and auction rate securities. The Company recorded realized gains and losses on sales of available-for-sale securities as follows (in millions): Available-for-sale securities were comprised as follows (in millions): The following table shows the gross unrealized losses and fair values of the Company’s investments in individual securities that are classified as available-for-sale and have been in a continuous unrealized loss position deemed to be temporary for less than 12 months and for more than 12 months, aggregated by investment category (in millions): F- 34 Years to Maturity No Single Less Than One to Five to Greater Than Maturity One Year Five Years Ten Years Ten Years Date Total $ 1,695 $ 6,842 $ 2,303 $ 1,296 $ 6,353 $ 18,489 Fiscal Year Gross Realized Gains Gross Realized Losses Net Realized Gains 2013 $ 430 $ (142 ) $ 288 2012 296 (25 ) 271 2011 356 (30 ) 326 Cost Unrealized Gains Unrealized Losses Fair Value September 29, 2013 Equity securities $ 2,570 $ 793 $ (44 ) $ 3,319 Debt securities (including debt funds) 18,255 396 (162 ) 18,489 $ 20,825 $ 1,189 $ (206 ) $ 21,808 September 30, 2012 Equity securities $ 2,599 $ 628 $ (14 ) $ 3,213 Debt securities (including debt funds) 17,714 573 (19 ) 18,268 $ 20,313 $ 1,201 $ (33 ) $ 21,481 September 29, 2013 Less than 12 months More than 12 months Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and government-related securities $ 42 $ (1 ) $ — $ — Corporate bonds and notes 2,084 (31 ) 24 (1 ) Mortgage- and asset-backed securities 367 (5 ) 24 — Auction rate securities — — 83 (1 ) Common and preferred stock 291 (41 ) — — Debt funds 2,776 (123 ) 4 — Equity funds 82 (3 ) — — $ 5,642 $ (204 ) $ 135 $ (2 )  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS At September 29, 2013 , the Company concluded that the unrealized losses on its available-for-sale securities were temporary. Further, for common and certain preferred stock and for equity and debt funds with unrealized losses, the Company has the ability and the intent to hold such securities until they recover, which is expected to be within a reasonable period of time. For debt securities with unrealized losses, the Company does not have the intent to sell, nor is it more likely than not that the Company will be required to sell, such securities before recovery or maturity. The following table shows the activity for the credit loss portion of other-than-temporary impairments on debt securities held by the Company (in millions): F- 35 September 30, 2012 Less than 12 months More than 12 months Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate bonds and notes $ 723 $ (8 ) $ 256 $ (9 ) Mortgage- and asset-backed securities 143 (1 ) 7 — Auction rate securities — — 115 (1 ) Common and preferred stock 105 (5 ) 9 — Equity funds 64 (4 ) 36 (5 ) $ 1,035 $ (18 ) $ 423 $ (15 ) 2013 2012 2011 Beginning balance of credit losses $ 31 $ 46 $ 109 Reductions in credit losses related to securities the Company intends to sell (7 ) (1 ) (40 ) Credit losses recognized on securities previously not impaired 1 5 2 Additional credit losses recognized on securities previously impaired 1 2 — Reductions in credit losses related to securities sold (21 ) (21 ) (20 ) Accretion of credit losses due to an increase in cash flows expected to be collected (1 ) — (5 ) Ending balance of credit losses $ 4 $ 31 $ 46  QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 14. Summarized Quarterly Data (Unaudited) The following financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results of the interim periods. The table below presents quarterly data for fiscal 2013 and 2012 (in millions, except per share data): F- 36 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2013 (1) Revenues $ 6,018 $ 6,124 $ 6,243 $ 6,480 Operating income 2,088 1,877 1,677 1,588 Net income 1,903 1,863 1,578 1,501 Net income attributable to Qualcomm 1,906 1,866 1,580 1,501 Basic earnings per share attributable to Qualcomm (2) $ 1.12 $ 1.08 $ 0.91 $ 0.88 Diluted earnings per share attributable to Qualcomm (2) $ 1.09 $ 1.06 $ 0.90 $ 0.86 2012 (1) Revenues $ 4,681 $ 4,943 $ 4,626 $ 4,871 Operating income 1,551 1,514 1,382 1,235 Income from continuing operations 1,400 1,438 1,206 1,240 Discontinued operations, net of tax (5 ) 761 (3 ) 23 Net income 1,395 2,199 1,203 1,263 Net income attributable to Qualcomm 1,401 2,230 1,207 1,271 Basic earnings per share attributable to Qualcomm (2): Continuing operations $ 0.83 $ 0.86 $ 0.70 $ 0.73 Discontinued operations — 0.45 — 0.02 Net income 0.83 1.31 0.70 0.75 Diluted earnings per share attributable to Qualcomm (2): Continuing operations $ 0.81 $ 0.84 $ 0.69 $ 0.72 Discontinued operations — 0.44 — 0.01 Net income 0.81 1.28 0.69 0.73 (1) Amounts, other than per share amounts, are rounded to millions each quarter. Therefore, the sum of the quarterly amounts may not equal the annual amounts reported. (2) Earnings per share attributable to Qualcomm are computed independently for each quarter and the full year based upon respective average shares outstanding. Therefore, the sum of the quarterly earnings per share amounts may not equal the annual amounts reported.  SCHEDULE II QUALCOMM INCORPORATED VALUATION AND QUALIFYING ACCOUNTS (In millions) S- 1 Balance at Beginning of Period (Charged) Credited to Costs and Expenses Deductions Other Balance at End of Period Year ended September 29, 2013 Allowances: — trade receivables $ (1 ) $ (1 ) $ — $ — $ (2 ) — notes receivables (7 ) (5 ) — 2 (b) (10 ) Valuation allowance on deferred tax assets (142 ) 15 — 76 (c) (51 ) $ (150 ) $ 9 $ — $ 78 $ (63 ) Year ended September 30, 2012 Allowances: — trade receivables $ (2 ) $ — $ 1 $ — $ (1 ) — notes receivable (3 ) (4 ) — — (7 ) Valuation allowance on deferred tax assets (98 ) (43 ) — (1 ) (d) (142 ) $ (103 ) $ (47 ) $ 1 $ (1 ) $ (150 ) Year ended September 25, 2011 Allowances: — trade receivables $ (3 ) $ — $ 1 $ — $ (2 ) — notes receivable (3 ) — — — (3 ) — investment receivables (a) (9 ) 6 3 — — Valuation allowance on deferred tax assets (39 ) (42 ) — (17 ) (e) (98 ) $ (54 ) $ (36 ) $ 4 $ (17 ) $ (103 ) (a) This amount represents the allowance for investment receivables due for redemptions of money market investments. (b) This amount represents notes receivable on strategic investments that were converted to cost method investments. (c) This amount represents $88 million recorded as part of the gain on deconsolidation of certain subsidiaries, partially offset by $12 million recorded as a component of other comprehensive income. (d) This amount was recorded as a component of other comprehensive income. (e) This amount represents $12 million recorded as a result of an acquisition and $5 million recorded as a component of other comprehensive loss. EXHIBIT 10.115 QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN EXECUTIVE PERFORMANCE STOCK UNIT GRANT NOTICE Qualcomm Incorporated (the “Company”), pursuant to its 2006 Long-Term Incentive Plan (the “Plan”) hereby grants you the number of Performance Stock Units set forth below, each of which is a bookkeeping entry representing the equivalent in value of one (1) share of the Company’s common stock. The Performance Stock Unit Award is subject to all of the terms and conditions as set forth herein and the Executive Performance Stock Unit Agreement (attached hereto) and the Plan 1 , which are incorporated herein in their entirety. Capitalized terms not otherwise defined in this Grant Notice or the Executive Performance Stock Unit Agreement shall have the meaning set forth in the Plan. Participant: «First_Name» «Last_Name» Grant No.: «Number» Date of Grant: «Grant_Date» Vesting Date: Except as otherwise provided in the Plan or the Executive Performance Stock Unit Agreement, this Performance Stock Unit Award will vest on the last day of the Performance Period, so long as your Service (as defined in the Plan) is continuous from the Date of Grant through that date. Additional Terms/Acknowledgments: By accepting this Performance Stock Unit Award (in the form determined by the Company) you acknowledge receipt of and represent that you have read, understand, accept and agree to the terms and conditions of, the following: this Grant Notice, the Executive Performance Stock Unit Agreement and the Plan (including, but not limited to, the binding arbitration provision in Section 3.7 of the Plan). In addition, by accepting this Performance Stock Unit Award you agree to all of its terms and conditions and further acknowledge that as of the Date of Grant, this Grant Notice, the Executive Performance Stock Unit Agreement and the Plan set forth the entire understanding between you and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements pertaining to this particular Performance Stock Unit Award. Qualcomm Incorporated: By: _____________________________________ Dr. Paul E. Jacobs Signature Chairman of the Board and Chief Executive Officer _____________________________________ Dated: «Grant_Date» Date Attachment: Executive Performance Stock Unit Agreement Emp #: «ID» Number of Performance Stock Units: «Shares_Granted» Performance Period: From and including September 30, 2013 through and including September 27, 2015 First Measurement Period: From and including September 30, 2013 through and including March 29, 2015 Second Measurement Period: From and including September 30, 2013 through and including September 27, 2015  QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN EXECUTIVE PERFORMANCE STOCK UNIT AGREEMENT Pursuant to the Grant Notice and this Executive Performance Stock Unit Agreement (the “ Agreement ”), Qualcomm Incorporated (the “ Company ”) has granted you a Performance Stock Unit Award with respect to the number of shares of the Company’s common stock (“ Stock ”) indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement but defined in the Qualcomm Incorporated 2006 Long-Term Incentive Plan (the “ Plan ”) shall have the same definitions as in the Plan. The details of this Performance Stock Unit Award are as follows: 1. SERVICE AND VESTING. 1.1 SERVICE. As provided in the Plan and notwithstanding any other provision of this Agreement, the Company reserves the right, in its sole discretion, to determine when your Service has terminated, including in the event of any leave of absence or part-time Service. 1.2 VESTING. Except to the extent that your Performance Stock Units may vest earlier as provided in Section 2.4(a) through (d) and Section 6.1, your Performance Stock Units will vest if and to the extent that you continue in Service through the Vesting Date specified in the Grant Notice (the “ Vesting Date ”). Except to the extent that your Performance Stock Units may vest earlier as provided in Section 2.4(a) through (d) and Section 6.1, if your Service terminates before the Vesting Date, all of your Performance Stock Units shall be forfeited. Notwithstanding any other provision of the Plan or this Agreement, the Company reserves the right, in its sole discretion, to suspend vesting of this Performance Stock Unit Award in the event of any leave of absence or part-time Service. 2. SETTLEMENT OF THE PERFORMANCE STOCK UNITS. 2.1 FORM AND TIMING OF PAYMENT. Subject to the other terms of the Plan and this Agreement, any Performance Stock Units that vest and become nonforfeitable in accordance with the Grant Notice will be paid to you in whole shares of Stock, in the amount specified in Section 2.2 and Section 2.3, no later than 30 days after the later of (i) the Vesting Date specified in the Grant Notice or (ii) the date on which the Committee certifies in writing the number of Shares (if any) that are payable under this Agreement based on the terms and conditions set forth in Section 2.2 and Section 2.3, which certification and determination shall be made by the Committee no later than the November 30th that next follows the end of the Performance Period. Failure to achieve the minimum Performance Target necessary for payment under Section 2.2 shall result in the forfeiture of all Performance Stock Units. 2.2 AMOUNT OF PAYMENT. Subject to modification under Section 2.3 and Section 2.4, the number of shares of Stock that shall be issued to you by the Company on the date specified in Section 2.1 is the sum of the Shares Earned for each Measurement Period. The “ Shares Earned ” for each Measurement Period is equal to the amount determined by multiplying the Target Shares for the Measurement Period by the Payout Percentage, rounding up to the nearest whole share. The “ Target Shares ” for each Measurement Period is a number of shares of Stock equal to 50% of the Number of Performance Stock Units specified in the Grant Notice. For purposes of this Section 2.2, the following additional definitions apply: (a) “ Beginning Period Average Price ” means the average official closing price per share of the issuer over the 20-consecutive-trading days ending with and including the first day of the Measurement Period (if the applicable day is not a trading day, the immediately preceding trading day). (b) “ Ending Period Average Price ” means the average official closing price per share of the issuer over the 20-consecutive-trading days ending with and including the last day of the Measurement Period (if the applicable day is not a trading day, the immediately preceding trading day). (c) “ Measurement Period ” means each period specified in the Grant Notice.  (d) “ Nasdaq-100 Companies ” means the companies that are included in the NASDAQ-100 Index (published by The NASDAQ Stock Market, or its successor) continuously from the beginning through the end of the relevant Measurement Period. The Committee shall have the authority to make appropriate adjustments to the extent necessary to account for extraordinary, unusual and infrequently occurring events and transactions involving that company. (e) “ Payout Percentage ” means the percentage that corresponds to the TSR Percentile Rank specified below: Between the levels specified above, the Payout Percentage is interpolated linearly at a ratio of three-and-one-third (3-1/3) percentage points for each percentile that the TSR Percentile Rank is greater than the 60th percentile, and two-and-one-half (2-1/2) percentage points for each percentile that the TSR Percentile Rank is less than the 60th percentile, in each case rounded up to the nearest decimal point. (f) “ Performance Period ” means the period specified in the Grant Notice, which begins on the first day of the first Measurement Period and ends on the last day of the last Measurement Period. (g) “ TSR ” means total shareholder return as determined by dividing (i) the sum of (A) the Ending Period Average Price minus the Beginning Period Average Price plus (B) all dividends and other distributions paid on the issuer’s shares during the Measurement Period by (ii) the Beginning Period Average Price. In calculating TSR, all dividends are assumed to have been reinvested in shares when paid. The Committee shall have the authority to make appropriate equitable adjustments to account for extraordinary items affecting a company’s TSR for the relevant Measurement Period. (h) “ TSR Percentile Rank ” means the Company’s percentile ranking relative to the Nasdaq-100 Companies, based on TSR. TSR Percentile Rank is determined by ordering the Nasdaq-100 Companies (plus the Company if the Company is not one of the Nasdaq-100 Companies) from highest to lowest based on TSR for the relevant Measurement Period and counting down from the company with the highest TSR (ranked first) to the Company’s position on the list. If two companies are ranked equally, the ranking of the next company shall account for the tie, so that if one company is ranked first, and two companies are tied for second, the next company is ranked fourth. After this ranking, the TSR Percentile Rank will be calculated using the following formula, rounded to the nearest whole percentile by application of regular rounding: “ N ” represents the number of Nasdaq-100 Companies for the relevant Measurement Period (plus the Company if the Company is not one of the Nasdaq-100 Companies for that Measurement Period). “ R ” represents the Company’s ranking among the Nasdaq-100 Companies (plus the Company if the Company is not one of the Nasdaq-100 Companies for the relevant Measurement Period). For example, if there are 100 Nasdaq-100 Companies (including the Company), and the Company ranked 40th, the TSR Percentile Rank would be at the 60th percentile: 60 = (100 – 40)/100 * 100. TSR Percentile Rank Payout Percentage 90th percentile and above 200% 75th percentile 150% 60th percentile 100% (Target) 50th percentile 75% 33rd percentile 33% Below 33rd percentile 0 TSR Percentile Rank = ( N – R ) * 100 N  2.3 LIMITATION ON AMOUNT OF PAYMENT. Notwithstanding anything in this Agreement to the contrary, if the Company’s TSR is negative for the Performance Period, then the maximum number of shares of Stock that shall be issued to you by the Company on the date specified in Section 2.1 will be equal to the Number of Performance Stock Units specified in the Grant Notice. Likewise, if your Service terminates in the first Measurement Period under the circumstances specified in Section 2.4 and the Company’s TSR is negative for that Measurement Period, then the maximum number of shares of Stock that shall be issued to you by the Company pursuant to Section 2.4 will be equal to the number of Target Shares for that Measurement Period. 2.4 EFFECT OF TERMINATION OF SERVICE. Except as otherwise expressly set forth in this Section 2.4, in the event of the termination of your Service for any reason, whether voluntary or involuntary, all unvested Performance Stock Units shall be immediately forfeited without consideration. (a) Disability. If your Service with the Employer terminates because of your Disability, the vesting of your Performance Stock Units shall be accelerated in full effective as of the date on which your Service terminates due to your Disability, but the number of shares of Stock that shall be issued to you by the Company under this Agreement shall be prorated and paid as follows. The Company shall issue to you, within 30 days after the end of the Measurement Period during which your Service terminates due to your Disability, the number of shares (rounded up to the nearest whole Share) equal to the sum of (i) the Shares Earned for any Measurement Period prior to the Measurement Period during which your Service terminates due to your Disability, plus (ii) the Target Shares for the Measurement Period during which your Service terminates. (b) Death. If your Service with the Employer terminates because of your death, the vesting of the Performance Stock Units shall be accelerated in full effective upon your death, but the number of shares of Stock that shall be issued to you by the Company under this Agreement shall be prorated as follows. The Company shall issue to your estate, personal representative, or beneficiary to whom the Performance Stock Units may be transferred by will or by the laws of descent and distribution, within 30 days after the end of the Measurement Period during which your death occurs, the number of shares (rounded up to the nearest whole Share) equal to the sum of (i) the Shares Earned for any Measurement Period prior to the Measurement Period during which your death occurs, plus (ii) the Target Shares for the Measurement Period during which your death occurs. If your Service with the Employer terminates because of your Disability, and you are entitled to payment under Section 2.4(a), and you later die in a subsequent Measurement Period covered by this Agreement, your estate, personal representative, or beneficiary to whom the Performance Stock Units may be transferred by will or by the laws of descent and distribution shall receive within 30 days of the end of the Measurement Period during which your death occurs, rounded up, equal to the Target Shares for the Measurement Period during which your death occurs. (c) Normal Retirement Age. If your Service with the Employer terminates at or after Normal Retirement Age, the vesting of your Performance Stock Units shall be accelerated in full effective as of the date on which your Service terminates, but the number of shares of Stock that shall be issued to you by the Company under this Agreement shall be prorated and paid as follows. The Company shall issue to you, within 30 days after the end of the Measurement Period during which your Service terminates at or after Normal Retirement Age, the number of shares (rounded up to the nearest whole Share) equal to the sum of (i) the Shares Earned for any Measurement Period prior to the Measurement Period during which your Service terminates at or after Normal Retirement Age, plus (ii) the Shares Earned for the Measurement Period during which your Service terminates multiplied by a fraction the numerator of which is the number of whole and partial months (rounded up) from the beginning of that Measurement Period until the date your Service terminates, and the denominator of which is the number of months in that Measurement Period. (d) Termination After Change in Control. If your Service with the Employer terminates as a result of Termination After Change in Control (as defined below), the vesting of any Performance Stock Units that remained outstanding after the Change in Control shall be accelerated in full effective as of the date on which your Service terminates, but the number of shares of Stock that shall be issued to you by the Company under this Agreement shall be prorated and paid as follows. The Company shall issue to you, within 30 days after the end of the Measurement Period during which your Service terminates, the number of shares (rounded up to the nearest whole Share) equal to the sum of (i) the Shares Earned for any Measurement Period prior to the Measurement Period during which your Service terminates, plus (ii) the Shares Earned for the Measurement Period during  which your Service terminates multiplied by a fraction the numerator of which is the number of whole and partial months (rounded up) from the beginning of that Measurement Period until the date your Service terminates, and the denominator of which is the number of months in that Measurement Period. (e) Certain Definitions. (i) “ Cause ” shall mean any of the following: (1) your theft of, dishonesty with respect to, or falsification of any Participating Company documents or records; (2) your improper use or disclosure of a Participating Company’s confidential or proprietary information; (3) any action by you which has a detrimental effect on a Participating Company’s reputation or business; (4) your failure or inability to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (5) any material breach by you of any employment or service agreement between you and a Participating Company, which breach is not cured pursuant to the terms of such agreement; (6) your conviction (including any plea of guilty or nolo contendere ) of any criminal act which impairs your ability to perform your duties with a Participating Company; or (7) violation of a material Company or Participating Company policy. (ii) “ Good Reason ” shall mean any one or more of the following: a) without your express written consent, the assignment to you of any duties, or any limitation of your responsibilities, substantially inconsistent with your positions, duties, responsibilities and status with the Participating Company Group immediately prior to the date of a Change in Control; b) without your express written consent, the relocation of the principal place of your employment or service to a location that is more than fifty (50) miles from your principal place of employment or service immediately prior to the date of a Change in Control, or the imposition of travel requirements substantially more demanding of you than such travel requirements existing immediately prior to the date of the Change in Control; c) any failure by the Participating Company Group to pay, or any material reduction by the Participating Company Group of, (A) your base salary in effect immediately prior to the date of a Change in Control (unless reductions comparable in amount and duration are concurrently made for all other employees of the Participating Company Group with responsibilities, organizational level and title comparable to yours), or (B) your bonus compensation, if any, in effect immediately prior to the date of a Change in Control (subject to applicable performance requirements with respect to the actual amount of bonus compensation earned by you); d) any failure by the Participating Company Group to (A) continue to provide you with the opportunity to participate, on terms no less favorable than those in effect for the benefit of any employee or service provider group which customarily includes a person holding the employment or service provider position or a comparable position with the Participating Company Group then held by you, in any benefit or compensation plans and programs, including, but not limited to, the Participating Company Group’s life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which you were participating immediately prior to the date of the Change in Control, or their equivalent, or (B) provide you with all other fringe benefits (or their equivalent) from time to time in effect for the benefit of any employee group which customarily includes a person holding the employment or service provider position or a comparable position with the Participating Company Group then held by you; e) any breach by the Participating Company Group of any material agreement between you and a Participating Company concerning your employment; or  f) any failure by the Company to obtain the assumption of any material agreement between you and the Company concerning your employment by a successor or assign of the Company. (iii) “ Termination After Change in Control ” shall mean either of the following events occurring within twenty-four (24) months after a Change in Control: a) termination by the Participating Company Group of your Service with the Participating Company Group for any reason other than for Cause; or b) your resignation for Good Reason from all capacities in which you are then rendering Service to the Participating Company Group within a reasonable period of time following the event constituting Good Reason. Notwithstanding any provision herein to the contrary, Termination After Change in Control shall not include any termination of your Service with the Participating Company Group which (1) is for Cause; (2) is a result of your death or Disability; (3) is a result of your voluntary termination of Service other than for Good Reason; or (4) occurs prior to the effectiveness of a Change in Control. 2.5 TAX WITHHOLDING. You acknowledge that the Company and/or the Participating Company that employs you (the “ Employer ”) may be subject to withholding tax obligations arising by reason of the vesting and/or payment of this Performance Stock Unit Award. You authorize your Employer to satisfy the withholding tax obligations by one or a combination of the following methods, as selected by the Company in its sole discretion: (a) withholding from your pay and any other amounts payable to you; (b) withholding of Stock and/or cash from the payment of the Performance Stock Units; (c) arranging for the sale of shares of Stock payable in connection with the Performance Stock Units (on your behalf and at your direction which you authorize by accepting this Performance Stock Unit Award); or (d) any other method allowed by the Plan or applicable law. If your Employer satisfies the withholding obligations by withholding a number of whole shares of Stock as described in subsection (b) herein, you will be deemed to have been issued the full number of shares of Stock subject to this Performance Stock Unit Award, notwithstanding that a number of shares is held back in order to satisfy the withholding obligations. The “ Fair Market Value ” of any Stock withheld pursuant to this Section 2.5 shall be equal to the closing price of a share of Stock as quoted on any national or regional securities exchange or market system constituting the primary market for the Stock on the date of determination (or, if there is no closing price on that day, the last trading day prior to that day) or, if the Stock is not listed on a national or regional securities exchange or market system, the value of a share of Stock as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse. The Company shall not be required to issue any shares of Stock pursuant to this Agreement unless and until the withholding obligations are satisfied. 3. TAX ADVICE. You represent, warrant and acknowledge that the Company and, if different, your Employer, has made no warranties or representations to you with respect to the income tax consequences of the transactions contemplated by this Agreement, and you are in no manner relying on the Company, your Employer or their representatives for an assessment of such tax consequences. YOU UNDERSTAND THAT THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE TAX TREATMENT OF ANY PERFORMANCE STOCK UNITS. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER PENALTIES. 4. DIVIDEND EQUIVALENTS. If the Board declares a cash dividend on the Company’s Stock, you will be entitled to Dividend Equivalents on the dividend payment date established by the Company equal to the cash dividends payable on the same number of shares of Stock as the number of Shares Earned and the number of any Target Shares to which you are entitled upon termination of Service due to death or Disability (“ Target Shares Earned ”) subject to this Performance Stock Unit Award on the dividend record date established by the Company. Any such Dividend Equivalents will be in the form of additional Shares Earned and/or Target Shares Earned, will be subject to the same terms and vesting dates as the underlying Shares Earned and/or Target Shares Earned, and will be paid at the same time and in the same manner as the underlying Shares Earned and/or Target Shares Earned originally subject to this Performance Stock Unit Award, except that any fractional shares attributable to Dividend Equivalents will be paid in cash within thirty (30) days following the date of payment of the Shares Earned and/or Target Shares Earned based on the Fair Market Value (as specified in Section 2.5, above) on the date of payment of the Shares Earned and/or Target Shares Earned. The number of additional Shares Earned and/or Target Shares Earned credited as Dividend Equivalents on the dividend payment date will  be determined by dividing (1) the product of (a) the number of your Shares Earned and/or Target Shares Earned as of the corresponding dividend record date (including any unvested Shares Earned and/or Target Shares Earned previously credited as a result of prior payments of Dividend Equivalents) and (b) the per-share cash dividend paid on the dividend payment date, by (2) the per-share Fair Market Value (as specified in Section 2.5, above) of Stock on the dividend payment date. The Dividend Equivalents will accrue on Shares Earned and/or Target Shares Earned calculated from the Date of Grant. 5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, no shares of Stock will be issued to you upon vesting of this Performance Stock Unit Award unless the Stock is then registered under the Securities Act or, if such Stock is not then so registered, the Company has determined that such vesting and issuance would be exempt from the registration requirements of the Securities Act. By accepting this Performance Stock Unit Award, you agree not to sell any of the shares of Stock received under this Performance Stock Unit Award at a time when applicable laws or Company policies prohibit a sale. 6. CHANGE IN CONTROL. In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “ Acquiring Corporation ”), may, without your consent, either assume the Company’s rights and obligations under this Performance Stock Unit Award or substitute for this Performance Stock Unit Award a substantially equivalent award for the Acquiring Corporation’s stock. 6.1 Payout Pursuant to a Change in Control. In the event the Acquiring Corporation elects not to assume or substitute for this Performance Stock Unit Award in connection with a Change in Control, the vesting of this Performance Stock Unit Award, so long as your Service has not terminated prior to the date of the Change in Control, shall be accelerated, effective as of the date ten (10) days prior to the date of the Change in Control, and the number of shares of Stock that shall be issued to you by the Company under this Agreement shall be determined and paid as follows. The Company shall issue to you, within 30 days after the Change in Control, the number of shares (rounded up to the nearest whole Share) equal to the sum of (a) the Shares Earned for any Measurement Period prior to the Measurement Period during which the Change in Control occurs, plus (b) the Shares Earned for any subsequent Measurement Period as if the Payout Percentage were 100% and the last day of each Measurement Period were the last business day before the date of the Change in Control. 6.2 Vesting Contingent Upon Consummation. The vesting of any Performance Stock Units and any shares of Stock acquired upon the settlement thereof that was permissible solely by reason of this Section 6 shall be conditioned upon the consummation of the Change in Control. 6.3 Applicability of Agreement. Notwithstanding the foregoing, shares of Stock acquired upon settlement of this Performance Stock Unit Award prior to the Change in Control and any consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject to all applicable provisions of this Agreement except as otherwise provided in this Agreement. 6.4 Continuation of Award. Notwithstanding the foregoing, if the corporation the stock of which is subject to this Performance Stock Unit Award immediately prior to an Ownership Change Event constituting a Change in Control is the surviving or continuing corporation and immediately after such Ownership Change Event, less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “ Code ”), without regard to the provisions of Section 1504(b) of the Code, this Performance Stock Unit Award shall not terminate unless the Committee otherwise provides in its discretion. 7. TRANSFERABILITY. Prior to the issuance of shares of Stock in settlement of a Performance Stock Unit Award, the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by your creditors or by your beneficiary (if any), except (i) transfer by will or by the laws of descent and distribution or (ii) to the extent permitted by the Company, transfer by written designation of a beneficiary, in a form acceptable to the Company, with such designation taking effect upon your death. All rights with respect to the Performance Stock Units shall be exercisable during your lifetime only by you or your guardian or legal representative. Prior to actual payment of any vested Performance Stock Units, such Performance Stock Units will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.  8. PERFORMANCE STOCK UNITS NOT A SERVICE CONTRACT. This Performance Stock Unit Award is not an employment or service contract and nothing in this Agreement, the Grant Notice or the Plan shall be deemed to create in any way whatsoever any obligation on your part to continue in the Service of a Participating Company, or of a Participating Company to continue your Service with the Participating Company. In addition, nothing in your Performance Stock Unit Award shall obligate the Company, its stockholders, Board, Officers or Employees to continue any relationship which you might have as a Director or Consultant for the Company. 9. RESTRICTIVE LEGEND. Stock issued pursuant to the vesting of the Performance Stock Units may be subject to such restrictions upon the sale, pledge or other transfer of the Stock as the Company and the Company’s counsel deem necessary under applicable law or pursuant to this Agreement. 10. REPRESENTATIONS, WARRANTIES, COVENANTS, AND ACKNOWLEDGMENTS. You hereby agree that in the event the Company and the Company’s counsel deem it necessary or advisable in the exercise of their discretion, the transfer or issuance of the shares of Stock issued pursuant to the vesting of the Performance Stock Units may be conditioned upon you making certain representations, warranties, and acknowledgments relating to compliance with applicable securities laws. 11. VOTING AND OTHER RIGHTS. Subject to the terms of this Agreement, you shall not have any voting rights or any other rights and privileges of a shareholder of the Company unless and until shares of Stock are issued upon payment of the Performance Stock Units. 12. CODE SECTION 409A. It is the intent that the vesting or the payment of the Performance Stock Units as set forth in this Agreement shall qualify for exemption from the requirements of Section 409A of the Code, and any ambiguities herein will be interpreted to so comply. The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify this Agreement as may be necessary to ensure that all vesting or payments provided for under this Agreement are made in a manner that qualifies for exemption from Section 409A of the Code; provided, however, that the Company makes no representation that the vesting or payments of Performance Stock Units provided for under this Agreement will be exempt from Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the vesting or payments of Performance Stock Units provided for under this Agreement. 13. NOTICES. Any notices provided for in this Agreement, the Grant Notice or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. 14. NATURE OF GRANT. In accepting the Performance Stock Unit Award, you acknowledge and agree that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, (subject to any limitations set forth in the Plan); (b) the award of Performance Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Performance Stock Units, or benefits in lieu of Performance Stock Units, even if Performance Stock Units or other Awards have been awarded repeatedly in the past; (c) all decisions with respect to future Awards, if any, will be at the sole discretion of the Company; (d) your participation in the Plan is voluntary; (e) the Performance Stock Unit Award and the shares of Stock subject to the Performance Stock Unit Award are extraordinary items that do not constitute compensation of any kind for Services of any kind rendered to the Company or the Employer, and which are outside the scope of your employment or service contract, if any; (f) the Performance Stock Unit Award and the shares of Stock subject to the Performance Stock Unit Award are not intended to replace any pension rights or compensation;  (g) the Performance Stock Unit Award and the shares of Stock subject to the Performance Stock Unit Award are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Participating Company; (h) the future value of the underlying shares of Stock is unknown and cannot be predicted with certainty; further, neither the Company, the Employer nor any Participating Company is liable for any foreign exchange fluctuation between your Employer’s local currency and the United States Dollar that may affect the value of this Performance Stock Unit Award; (i) no claim or entitlement to compensation or damages shall arise from forfeiture of your Performance Stock Units resulting from termination of your Service (for any reason whatsoever and whether or not in breach of local labor laws or later found invalid), and in consideration of the grant of the Performance Stock Units to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, waive your ability, if any, to bring any such claim, and release the Company from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claim; (j) the Performance Stock Unit Award and the benefits evidenced by this Agreement do not create any entitlement, not otherwise specifically provided for in the Plan or provided by the Company in its discretion, to have the Performance Stock Unit Award or any such benefits transferred to, or assumed by, another company, nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Company’s Stock; and (k) the Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Stock; you are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. 15. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of California as if the Agreement were between California residents and as if it were entered into and to be performed entirely within the State of California. 16. ARBITRATION. Any dispute or claim concerning any Performance Stock Units granted (or not granted) pursuant to the Plan and any other disputes or claims relating to or arising out of the Plan shall be fully, finally and exclusively resolved by binding arbitration conducted by the American Arbitration Association pursuant to the commercial arbitration rules in San Diego, California. By accepting this Performance Stock Unit Award, you and the Company waive your respective rights to have any such disputes or claims tried by a judge or jury. 17. AMENDMENT. Your Performance Stock Unit Award may be amended as provided in the Plan at any time, provided no such amendment may adversely affect this Performance Stock Unit Award without your consent unless such amendment is necessary to comply with any applicable law or government regulation, or is contemplated in Section 12 hereof. No amendment or addition to this Agreement shall be effective unless in writing or in such electronic form as may be designated by the Company. 18. GOVERNING PLAN DOCUMENT. Your Performance Stock Unit Award is subject to this Agreement, the Grant Notice and all the provisions of the Plan, the provisions of which are hereby made a part of this Agreement, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement, the Grant Notice and those of the Plan, the provisions of the Plan shall control. 19. SEVERABILITY. If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible.  20. DESCRIPTION OF ELECTRONIC DELIVERY . The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement, and any reports of the Company provided generally to the Company’s shareholders, may be delivered to you electronically. In addition, if permitted by the Company, you may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via electronic mail (“e-mail”) or such other means of electronic delivery specified by the Company. 21. WAIVER. The waiver by the Company with respect to your (or any other Participant’s) compliance of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of such party of a provision of this Agreement. 22. REPAYMENT/FORFEITURE. Any benefits you may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with (a) any applicable listing standards of a national securities exchange adopted in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder, (b) similar rules under the laws of any other jurisdiction and (c) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you.  EXHIBIT 10.116 QUALCOMM INCORPORATED NON-QUALIFIED DEFERRED COMPENSATION PLAN  Page TABLE OF CONTENTS ARTICLE I INTRODUCTION 1 ARTICLE II DEFINITIONS 1 ARTICLE III ELIGIBILITY AND PARTICIPATION 7 ARTICLE IV DEFERRALS AND CONTRIBUTIONS 7 ARTICLE V ACCOUNTS 9 ARTICLE VI PLAN INVESTMENTS AND EARNINGS ON PARTICIPANTS’ ACCOUNTS 10 ARTICLE VII BENEFICIARIES 11 ARTICLE VIII VESTING 11 ARTICLE IX BENEFIT DISTRIBUTIONS 12 ARTICLE X ADMINISTRATION 16 ARTICLE XI AMENDMENT AND TERMINATION 18 ARTICLE XII PLAN TRANSFERS 19 ARTICLE XIII MISCELLANEOUS 20  ARTICLE I INTRODUCTION 1.1 History . Qualcomm Incorporated (the “Company”) previously established the Qualcomm Incorporated Voluntary Executive Retirement Contribution Plan (the “ERC”) and the Qualcomm Incorporated Executive Retirement Matching Contribution Plan (the “ERMCP”), both non-qualified deferred compensation plans for a select group of management or highly compensated employees of the Employer, and both originally effective as of December 1, 1995. The Company consolidated the ERC with and into the ERMCP effective as of October 1, 2008, and has amended and restated the ERMCP in its entirety effective as of December 30, 2008, April 1, 2009, and January 1, 2011. The ERMCP is amended and restated effective September 30, 2013, as set forth herein, and the name of the ERMCP is changed to the Qualcomm Incorporated Non-Qualified Deferred Compensation Plan effective as of such date. ARTICLE II DEFINITIONS 2.1 “Account(s)” means the book entry account(s) established under the Plan for each Participant to which are credited the Participant’s Basic Deferrals, Bonus Deferrals, Performance-Based Compensation Deferrals, Matching Contributions, Discretionary Company Contributions and any Investment Returns with respect thereto. Account balances shall be reduced by any distributions made to the Participant or the Participant’s Beneficiary(ies) from the Plan and any charges that may be imposed on such Account(s) pursuant to the terms of the Plan. Separate Subaccounts may be established under the Plan as set forth herein. As the context may require, “Account” shall also refer to such Subaccounts. 2.2 “ Affiliate ” means any entity which controls, is controlled by or is under common control with the Company. 2.3 “ Base Salary ” means the annual base salary to be paid by the Employer, without regard to Basic Deferrals hereunder. Base Salary shall not include, unless specifically authorized by the Committee, bonuses, overtime, distributions from this Plan, commissions, the value of any proceeds from the exercise of any qualified or non-qualified stock option, stock appreciation right, restricted stock award, restricted stock unit, performance share, performance unit, deferred compensation award, or other stock-based award, the proceeds from any stock purchase right under the Company’s employee stock purchase plans, incentive payments, non-monetary awards, auto allowances or any other form of compensation, whether taxable or non-taxable. 2.4 “Basic Deferral(s)” means the percentage of a Participant’s Base Salary and/or Director Fees which the Participant elects to defer pursuant to Section 4.1 of the Plan. 2.5 “Benchmark Fund(s)” means one or more of the mutual funds or contracts selected by the Committee pursuant to Article 6 of the Plan. 2.6 “ Beneficiary(ies) ” means the beneficiary(ies) designated by the Participant who are entitled to receive any distributions from the Plan payable upon the death of the Participant. 2.7 “Benefit(s)” means the total of the vested amount(s) credited to a Participant’s Account. 2.8 “ Board of Directors ” or “Board” means the Company’s Board of Directors. 2.9 “Bonus” means the annual cash incentive bonus normally paid to an Eligible Employee after the end of the fiscal year or such other amounts payable under the bonus policies maintained by the Employer determined without regard to any Bonus Deferral. 2.10 “Bonus Deferral” means the percentage of a Participant’s Bonus which the Participant defers pursuant to Section 4.2 of the Plan. 2.11 “Cause” means any of the following: (i) theft, dishonesty, or falsification of any Company documents or records; (ii) improper use or disclosure of the Company’s confidential or proprietary information; (iii) any action which has a detrimental effect on the Company’s reputation or business; (iv) failure or inability to perform any reasonable assigned duties after written notice from the Company of, and a reasonable opportunity to cure, such failure or inability; (v) any material breach of any employment or service agreement between the Participant and the Company, which breach is not cured pursuant to the terms of  such agreement; (vi) conviction (including any plea of guilty or nolo contendere) of any criminal act which impairs the Participant’s ability to perform his or her duties; or (vii) violation of a material Company policy. 2.12 “Change in Control” means an Ownership Change Event or a series of related Ownership Change Events, as defined below (collectively, a “Transaction”), wherein the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or, in the case of a Transaction described in clause (iii) below, the corporation or other business entity to which the assets of the company were transferred (the “Transferee”), as the case may be. The Board shall determine in its discretion whether multiples sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related. Notwithstanding the preceding sentence, a Change in Control shall not include a Spinoff Transaction, as defined in Section 2.1 of the LTIP. For purposes of the foregoing, an “Ownership Change Event” shall be deemed to have occurred if any of the following occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange or transfer of all or substantially all, as determined by the Board in its discretion, of the assets of the Company; or (iv) a liquidation or dissolution of the Company, provided that the Transaction constitutes a change in ownership or effective control of a corporation or a change in ownership of a substantial portion of the assets of a corporation for purposes of Code Section 409A. 2.13 “Code” means the Internal Revenue Code of 1986, as amended. 2.14 “Committee” means the Executive Retirement Contribution Plan Committee composed of such individuals who may be appointed by the Company’s Executive Vice President, Human Resources, or such other officer serving in that capacity, and the Committee shall function as the administrator of the Plan. 2.15 “Common Stock” means the common stock of the Company, par value $0.0001 per share. 2.16 “Company” means Qualcomm Incorporated, a Delaware corporation, and any successor thereto. 2.17 “ Compensation Committee ” means the Compensation Committee of the Company’s Board of Directors. 2.18 “Deferrals” means, as applicable to a Participant, Basic Deferrals, Bonus Deferrals and/or Performance-Based Compensation Deferrals made pursuant to the terms of the Plan. 2.19 “Deferral Subaccount” means a Subaccount under the Participant's Account to which Deferrals are credited for a given Plan Year. 2.20 “Director Fees” shall mean all fees and retainers, including meeting fees, paid in cash to Non-Employee Directors of the Company, and specifically excludes any annual board retainer paid in stock units. 2.21 “Disability” means, to the extent applicable and determined in accordance with Code Section 409A, a determination that the Participant, (a) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of no less than twelve months, is receiving income replacement benefits for a period of not less than three months under the Company’s long-term disability insurance policy covering the Participant, or, (b) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months. 2.22 “Discretionary Company Contribution” means a Company contribution awarded to an Eligible Employee pursuant to Section 4.6 of the Plan. 2.23 “Distribution Date” means the date on which distribution of a Participant’s Benefits is made or commences pursuant to Article 9 of the Plan. 2.24 “ Effective Date ” means September 30, 2013, except as otherwise provided herein. 2.25 “Election(s)” means the form or forms on which a Participant: (i) elects to make Deferrals, (ii) elects a Distribution Date for Plan Benefits, (iii) elects the method by which his or her Benefits will be distributed; and (iv) specifies his  or her Beneficiary(ies) under the Plan. An Election shall be in such form or forms as may be prescribed by the Committee, including specifically an electronic form. 2.26 “ Eligible Employee ” means an employee of the Employer who is a member of a select group of management or highly compensated employees and who has been designated as eligible to participate in the Plan in accordance with Article 3 of the Plan. 2.27 “ Employer ” means the Company and any other Affiliate of the Company that has adopted the Plan. 2.28 “ Fair Market Value ” shall have the same meaning given such term in the LTIP. 2.29 “Good Reason” means any one or more of the following: (i) without the Participant’s express written consent, the assignment of any duties, or any limitation of responsibilities, substantially inconsistent with the Participant’s positions, duties, responsibilities and status with the Company immediately prior to the date of a Change in Control; (ii) without the Participant’s express written consent, the relocation of his or her principal place of employment or service to a location that is more than fifty (50) miles from the principal place of employment or service immediately prior to the date of a Change in Control, or the imposition of travel requirements substantially more demanding than those existing immediately prior to the date of a Change in Control; (iii) any failure by the Company to pay, or any material reduction by the Company of, (A) base salary in effect immediately prior to the date of a Change in Control (unless reductions comparable in amount and duration are concurrently made for all other employees of the Company with comparable responsibilities, organizational level and title), or (B) bonus compensation, if any, in effect immediately prior to the date of a Change in Control (subject to applicable performance requirements with respect to the actual amount of bonus compensation earned); (iv) any failure by the Company to (A) continue to provide the Participant with the opportunity to participate, on terms no less favorable than those in effect for the benefit of any employee or service provider group which customarily includes a person holding the employment or service provider position or a comparable position with the Company then held by the Participant, in any benefit or compensation plans and programs, including, but not limited to, the Company’s life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which the Participant was participating immediately prior to the date of the Change in Control, or their equivalent, or (B) provide the Participant with all other fringe benefits (or their equivalent) from time to time in effect for the benefit of any employee group which customarily includes a person holding the employment or service provider position or a comparable position with the Company then held by the Participant; (v) any breach by the Company of any material agreement between the Participant and the Company concerning the Participant’s employment; or (vi) any failure by the Company to obtain the assumption of any material agreement between the Participant and the Company concerning the Participant’s employment by a successor or assign of the Company. 2.30 “In-Service Distribution Date” means the date prior to a Separation from Service on which the distribution of a Participant’s Deferral Subaccount(s) is made or commences pursuant to an Election made under Article 9 of the Plan. 2.31 “Investment Return” means the investment return or loss determined in accordance with Article 6 of the Plan, which shall be credited to Participants’ applicable Subaccounts pursuant to the terms of the Plan. 2.32 “LTIP” shall mean the Qualcomm Incorporated 2006 Long-Term Incentive Plan, as amended, or any successor thereto. 2.33 “Matching Contributions” means the Company’s matching contributions to the Plan on behalf of an Eligible Employee who is a Participant, as determined in accordance with Section 4.5 of the Plan. 2.34 “Non-Employee Director” means a director who is not an Employee. 2.35 “Open Enrollment Period” means such period as the Committee may specify for Participants to submit an Election to make Deferrals under the Plan. The Open Enrollment Period shall begin on the date selected by the Committee and end no later than (i) with respect to Basic Deferrals for any Plan Year, the first day of such Plan Year; (ii) with respect to Bonus Deferrals, the first day of the period for which the Bonus may be earned; (iii) with respect to Performance-Based Compensation Deferrals, the date that is six months before the end of the applicable performance period, provided the Participant performs services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date the Deferral Election is made and, provided, further that in no event may a Performance-Based Compensation Deferral Election be made after such Performance Based Compensation has become readily ascertainable within the meaning of Section 1.409A-2(a)(8) of the Treasury Regulations; and (iv) with respect to an Eligible Employee or Non-Employee Director who first becomes eligible to participate in the Plan, the date that is no later than thirty (30) days after first becoming an Eligible  Employee or Non-Employee Director, provided that an Election may be made only with respect to Base Salary or Director Fees (as applicable) paid for services performed after the Election is made and, provided further, that no Bonus Deferral may be made with respect to any Bonus after the first day of the period for which such Bonus may be earned. 2.36 “ Participant ” means an Eligible Employee or Non-Employee Director who becomes a Participant in the Plan as provided in Article 3. 2.37 “Performance-Based Compensation” means any cash compensation paid to an Eligible Employee which is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months, determined without regard to any Performance-Based Compensation Deferral and in accordance with Code Section 409A. 2.38 “Performance-Based Compensation Deferral” means the percentage of a Participant’s Performance-Based Compensation which the Participant defers pursuant to Section 4.2 of the Plan. 2.39 “Plan” means this Qualcomm Incorporated Non-Qualified Deferred Compensation Plan as set forth herein. 2.40 “ Plan Year ” means the 12 consecutive month period beginning on each January 1 and ending on the following December 31. 2.41 “Retirement” means the Participant’s Separation from Service with the Employer after attaining the earlier of: (i) age sixty-five (65) or (ii) age sixty-two and one-half (62 1/2) with at least ten (10) Years of Service. 2.42 “Separation from Service” means separation from Service whether by termination of employment or Board service. A Participant will be presumed to have had a Separation from Service where the level of bona fide services performed by such individual decreases to a level that is less than or equal to 20% of the average level of bona fide services performed in the 36-month period immediately preceding the Separation from Service. Subject to the foregoing and the requirements of Section 409A of the Code and the regulations issued thereunder, the Committee, in its discretion, shall determine whether a Participant has had a Separation from Service and the effects thereof. 2.43 “Service” means an Eligible Employee’s employment or service with the Employer in the capacity of an employee or a member of the Board. An Eligible Employee’s Service shall include periods of employment or service with the Company and any subsidiary, regardless of whether the Company has determined that such a subsidiary will not be an Employer for purposes of the Plan. 2.44 “ Specified Employee ” means any Participant who, as of the date of Separation from Service, is a key employee of the Employer by reason of meeting the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during the 12-month period ending on the last day of the Plan Year, or such other date as may be established by the Committee in a separate document applicable to all deferred compensation plans sponsored by the Company. 2.45 “Subaccount(s)” means the subaccount(s) established within a Participant’s Account with respect to the various types of Deferrals and Company contributions made under the Plan. 2.46 “Total Compensation” for a Plan Year means wages as defined in Section 3401(a) of the Code, any annual cash incentive bonus which is normally paid by the Employer to an Eligible Employee after the end of the fiscal year, and all other payments of compensation to an Eligible Employee by the Employer (in the course of the Employer’s trade or business) for which the Employer is required to furnish the Eligible Employee a written statement under Section 6041(d) or Section 6051(a)(3) of the Code for such Plan Year, excluding the following items: any bonus other than an annual cash incentive bonus which is normally paid by the Employer to an Eligible Employee after the end of the fiscal year, commissions, the value of a qualified, incentive or non-qualified stock option, stock appreciation right, restricted stock award, restricted stock unit, performance share, performance unit, deferred compensation award, or other stock-based award, granted to the Eligible Employee by the Company to the extent such value is includable in the Eligible Employee’s taxable income, reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, deferred compensation and welfare benefits, but including amounts that are not includable in the gross income of the Eligible Employee under a salary reduction agreement by reason of the application of Section 125, 402(e)(3), 402(h), or 403(b) of the Code or by reason of an election of the Eligible Employee to defer amounts of Base Salary under this Plan. Total Compensation must be determined without regard to any rules under Section 3401(a) of the Code that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Section 3401(a)(2) of the Code).  2.47 “ Trust ” means the legal entity created by the Trust Agreement(s). 2.48 “ Trust Agreement ” means the trust agreement entered into between the Company and the Trustee(s) to hold assets with respect to this Plan. 2.49 “ Trustee(s) ” means the person(s) or entity named as Trustee(s) in the Trust Agreement established to hold assets with respect to this Plan and any duly appointed and acting successor Trustee(s) appointed by the Employer pursuant to the terms of the Trust Agreement. 2.50 “Year of Service” means each 12 consecutive month period of completed Service. ARTICLE III ELIGIBILITY AND PARTICIPATION 3.1 Eligibility to Participate . Participation in the Plan shall be limited to Non-Employee Directors and those Eligible Employees selected by the Executive Vice President, Human Resources of the Company and notified as to their eligibility to participate in the Plan. The Committee, in its discretion, may limit the ability of Participants to make certain types of Deferrals or be credited with Company contributions under the Plan. 3.2 Commencement of Participation . Participation in the Plan is voluntary. An Eligible Employee or Non-Employee Director may begin participation in the Plan upon the execution and submission of an Election during the applicable Open Enrollment Period. ARTICLE IV DEFERRALS AND CONTRIBUTIONS 4.1 Basic Deferrals . 4.1.1. An Eligible Employee or Non-Employee Director may elect to reduce his or her Base Salary or Director Fees, as applicable, by the percentage of Base Salary or Director Fees, as applicable, set forth in an Election filed with the Committee, subject to the provisions of this Article 4. Basic Deferrals shall not be paid to the Participant, but shall be withheld from amounts otherwise payable to the Participant, and an amount equal to the Basic Deferrals for the Plan Year shall be credited to the Participant’s Basic Deferral Subaccount under the Plan. 4.1.2. The Election to make Basic Deferrals must be filed with the Committee during the Open Enrollment Period for the Plan Year to which such Election applies. A Participant’s Election with respect to Basic Deferrals shall remain in effect until changed by the Participant during a subsequent Open Enrollment Period. Each Election to make Basic Deferrals shall apply only to Base Salary or Director Fees, as applicable, earned after the effective date of such Election. Elections with respect to Basic Deferrals, once made, shall be irrevocable for the Plan Year. 4.2 Bonus Deferrals and Performance-Based Compensation Deferrals . 4.2.1 An Eligible Employee may elect to defer a percentage of any Bonus and/or Performance-Based Compensation as set forth in an Election with the Committee, subject to the provisions of this Article 4. Such Bonus Deferrals and/or Performance-Based Compensation Deferrals shall not be paid to the Participant, but shall be withheld from the amounts otherwise payable to the Participant and credited to the Participant’s applicable Deferral Subaccount under the Plan. 4.2.2 The Bonus Deferral Election and/or Performance-Based Compensation Deferral Election must be filed with the Committee during the applicable Open Enrollment Period. A Bonus and/or Performance-Based Compensation Deferral Election shall remain in effect until changed by the Participant during a subsequent Open Enrollment Period. Elections with respect to Bonus Deferrals and Performance-Based Compensation Deferrals, once made, shall be irrevocable for the applicable fiscal year or performance period.  4.3 Maximum Deferrals; Cash Deferrals Only . Subject to such further limits as the Committee may establish in its sole discretion: (a) An Eligible Employee may not defer Base Salary in an amount that exceeds 60% of Base Salary determined prior to any reductions for tax withholding amounts (including, but not limited to, FICA and FUTA taxes), contributions to the Company’s 401(k) Plan, employee stock purchase plan(s), or Code Section 125 plan or other amounts that may reduce or be subtracted from Base Salary. (b) An Eligible Employee may not defer Bonus and/or Performance-Based Compensation in an amount that exceeds Bonus and/or Performance-Based Compensation reduced by applicable employment tax withholding amounts (including, but not limited to, FICA and FUTA taxes) attributable to such Bonus and/or Performance Based Compensation, as applicable. (c) A Director may elect to defer up to 100% of his or her cash Director Fees. (d) Notwithstanding anything herein to the contrary, no Participant shall be permitted to defer stock-based compensation under the Plan. 4.4 No Withdrawal . Except as otherwise set forth herein, amounts credited to a Participant’s Account may not be withdrawn by a Participant and shall be paid only in accordance with the provisions of this Plan. 4.5 Matching Contributions . The Company will credit Matching Contributions to the Matching Contribution Subaccount of an Eligible Employee for a Plan Year if (a) the Committee has determined that the Eligible Employee is among those designated as eligible to receive a Matching Contribution; and either (b) the Eligible Employee is actively employed by the Employer on the first day following the end of such Plan Year, or (c) the Eligible Employee’s employment with the Employer is terminated during the Plan Year by the Employer without Cause. The Matching Contribution shall be equal to fifty percent (50%) of the Eligible Employee’s Deferrals credited to his or her Account for the Plan Year; provided, however, that the total Matching Contribution credited to the Matching Contribution Subaccount of any Eligible Employee for any Plan Year shall not exceed 8% of such Eligible Employee’s Total Compensation for the applicable Plan Year. All Matching Contributions to the Plan with respect to Plan Years beginning before January 1, 2014, shall be credited to an Eligible Employee’s Matching Contribution Subaccount solely in the form of shares of the Company’s Common Stock. All Matching Contributions to the Plan with respect to Plan Years beginning on and after January 1, 2014, shall be credited to an Eligible Employee’s Matching Contribution Subaccount in the form of cash unless the Compensation Committee, in its sole discretion, determines that Matching Contributions shall be credited in the form of shares of the Company’s Common Stock. To the extent the Compensation Committee determines that Matching Contributions will be credited in shares of the Company’s Common Stock, for purposes of converting a Company Matching Contribution from a dollar value to a number of shares of the Company’s Common Stock, the Fair Market Value of the Company’s Common Stock shall be the average of the Fair Market Value of the Company’s Common Stock over the two hundred (200) trading days immediately preceding the last day of the applicable calendar year or, with respect to an Eligible Employee whose employment is terminated by the Employer without Cause during the Plan Year, the average of the Fair Market Value of the Company’s Common Stock over the two hundred (200) trading days immediately preceding the last day of his or her employment. 4.6 Discretionary Company Contributions . From time to time the Company may, as recommended by the Compensation Committee in its complete discretion, credit to an Eligible Employee’s Account a Discretionary Company Contribution, in such amounts and at such times as the Compensation Committee may determine. Such Discretionary Company Contributions may be denominated in cash or shares of Company Common Stock, as determined by the Compensation Committee. The Company shall be under no obligation to continue to make Discretionary Company Contributions and may discontinue such contributions at any time. 4.7 Adjustments . Shares to be issued under the Plan are reserved for issuance under the LTIP, and shall be subject to adjustment in the event of a change in the Company’s capital structure, in accordance with Section 4.2 of the LTIP. ARTICLE V ACCOUNTS  Accounts; Subaccounts . Separate Accounts and Subaccounts shall be established and maintained for each Participant in accordance with the terms of the Plan. Each Participant’s applicable Subaccounts shall be credited with the Participant’s Basic Deferrals, Bonus and/or Performance-Based Compensation Deferrals, Matching Contributions and Discretionary Company Contributions, if any. Participants’ Accounts shall be credited (or debited) with the applicable Investment Return as set forth in Article 6. Participants’ Accounts shall be reduced by losses, distributions and any other charges which may be imposed on the Accounts pursuant to the terms of the Plan. ARTICLE VI PLAN INVESTMENTS AND EARNINGS ON PARTICIPANTS’ ACCOUNTS 6.1 Investment of Matching Contributions and Discretionary Company Contributions Credited in Stock . 6.1.1 As set forth in Article 4, each Participant’s Matching Contributions and Discretionary Company Contributions Subaccount (to the extent a contribution is denominated in Company Common Stock) shall be credited to the Participant’s Account in shares of the Company’s Common Stock, and shall be accounted for and reported in terms of shares of the Company’s Common Stock. 6.1.2 In the event that the Trust established with respect to Matching Contributions or Discretionary Company Contributions in the form of the Company’s Common Stock for any reason holds cash or other property sufficient to purchase a share of the Company’s Common Stock, the Trustee shall first arrange to acquire additional shares of the Company’s Common Stock, either by purchasing such shares in the public market or by acquiring such shares directly from the Company, unless the Committee, in its discretion, determines to credit such cash or other property to Participants’ Accounts. In the event that the Trust for any reason holds cash or other property in an amount insufficient to purchase a share of the Company’s Common Stock, such amount shall be held in cash or a cash equivalent determined by the Committee. Notwithstanding any other provision of the Plan to the contrary, in the event there are insufficient shares of the Company’s Common Stock reserved and available for issuance to make Matching or Discretionary Company Contributions in the form of Company Common Stock, the Company may credit cash amounts in lieu of shares of Company Common Stock to the applicable Subaccounts of one or more Participants for some or all of the Matching and Discretionary Company Contribution amounts. 6.1.3 Effective September 27, 2010, if the Board declares a cash dividend on the shares of the Company’s Common Stock, as of the first business day following the dividend payment date with respect to such cash dividend, the Company shall credit a cash amount equal to such per-share cash dividend with respect to each share of Company Common Stock credited to a Participant’s Matching Contributions and/or Discretionary Contributions Subaccount as of the dividend declaration date for such cash dividend. All such cash amounts shall be credited to the Subaccount and be subject to the same terms and conditions relating to vesting and payment as the corresponding shares of Company Common Stock credited to that Subaccount and be deemed to be invested in a money market fund or similar investment as of the first trading day after the dividend payment date with respect to such cash dividend, provided, however, that a Participant may at any time elect to reinvest any such amounts deemed invested in a money market fund or similar investment in any other Benchmark Fund specified under Section 6.2.2, but only after the fund is added to the recordkeeping system. 6.2 Investment of Deferrals, Matching Contributions and Discretionary Company Contributions Denominated in Cash. 6.2.1 The Committee may designate the particular funds or contracts which shall constitute the Benchmark Funds with respect to Basic Deferrals, Bonus and/or Performance-Based Compensation Deferrals, Matching Contributions and Discretionary Company Contributions awarded in cash and the Committee may, in its sole discretion, change or add to the Benchmark Funds; provided, however, that the Committee shall notify Participants of any such change prior to the effective date of the change. 6.2.2 Each Participant may select among the Benchmark Funds and specify the manner in which each of his or her applicable Subaccounts shall be deemed to be invested, solely for purposes of determining the Participant’s Investment Return. The Committee shall establish and communicate the rules, procedures and deadlines for making and changing Benchmark Fund selections. The Company shall have no obligation to acquire investments corresponding to the Participant’s Benchmark Fund selections.  6.2.3 The Investment Return is based on the asset unit value, net of administrative fees and investment management fees and other applicable fees or charges, of the Benchmark Fund(s) designated by the Committee. The Investment Return may be negative if the applicable Benchmark Fund(s) sustain a loss. The Investment Return shall be credited (or debited) monthly, or more frequently as the Committee may specify. ARTICLE VII BENEFICIARIES A Participant shall have the right to designate on an Election prescribed by the Committee one or more Beneficiaries to receive any Benefits due under the Plan in the event of the Participant’s death. If the Participant has not properly designated a Beneficiary, or if for any reason such designation shall not be legally effective, or if said designated Beneficiary shall predecease the Participant, then the Participant’s Beneficiary shall be the Participant’s surviving spouse. In the event there is no surviving spouse, the Participant’s Beneficiary shall be the Participant’s estate. The Participant shall have the right at any time to revoke a previous Beneficiary designation and to substitute one or more other Beneficiary(ies); provided, however, that the most recent Beneficiary Designation received prior to a Participant’s death shall supersede all prior Beneficiary designations made under the Plan. ARTICLE VIII VESTING 8.1 Vesting of Deferrals. All Deferrals credited to a Participant’s Account shall always be 100% vested. 8.2 Vesting of Matching and Discretionary Company Contributions. A Participant’s Matching and Discretionary Company Contribution Subaccounts shall vest in accordance with whichever one of the following vesting schedules results in the largest vested balance in the Participant’s Account. 8.2.1 One hundred percent (100%) shall be vested upon the Participant’s death, Disability, attainment of age 65 while employed by the Employer, or completion of two (2) continuous Years of Service. 8.2.2 A Participant shall be partially or fully vested in the discretion of the Compensation Committee, so long as no acceleration of vesting results in an acceleration of payment prohibited under Section 409A of the Code. 8.2.3 A Participant shall be one hundred percent (100%) vested upon involuntary termination of employment without Cause or voluntary termination of employment for Good Reason, in either case at any time within twenty-four (24) months following a Change in Control. 8.3 Amounts credited to a Participant which are not vested at the time that the Participant has a Separation from Service with the Employer shall be forfeited. A Participant who forfeits any such amounts shall have no rights to the restoration of such amounts in the event that he or she once again becomes eligible to participate in the Plan. ARTICLE IX BENEFIT DISTRIBUTIONS 9.1 Benefit Amount . The value of a Participant’s Benefit shall equal the vested value of the Participant’s Subaccount(s) on the applicable Distribution Date. Distributions from a Participant’s Matching Contributions or Discretionary Company Contributions Subaccount credited as shares of Company Common Stock shall be paid in whole shares of the Company’s Common Stock. 9.2 Timing of Distributions . In accordance with the Participant’s Election made at the time of the original deferral (or a permissible later election, if applicable), Benefits shall be paid (or payments shall commence) within sixty (60) days following the earliest of:  9.2.1 The date of the Participant’s Separation from Service (including due to Retirement); 9.2.2 The In-Service Distribution Date designated by the Participant (solely with respect to distributions of Deferral Subaccounts); 9.2.3 The date of the Participant’s death or Disability; or 9.2.4 The date of a Change in Control of the Company. Notwithstanding anything herein to the contrary, Participants shall not be entitled to elect an In-Service Distribution Date with respect to their Matching and Discretionary Company Contribution Subaccounts. Any Matching Contribution or Company Discretionary Contribution that vests pursuant to Section 8.2.3 of the Plan after the date of a Change of Control shall be distributed upon the Participant’s subsequent Separation from Service. 9.3. Methods of Distribution . 9.3.1 Distribution Methods . A Participant’s Benefit shall be paid in a single lump sum payment, unless the Participant specifies in an Election that (1) a distribution of Deferrals made pursuant to such Election and any Matching Contributions credited with respect to such Election in the event of Retirement or Disability or (2) a distribution of Deferrals made pursuant to such Election (but not any Matching Contributions credited with respect to such Election) upon an In-Service Distribution Date shall be paid in quarterly or annual installment payments of substantially equal amounts over a period as provided below: Reason for Distribution Installment Period Retirement 1 to 10 Years Disability 1 to 10 Years In-Service Distribution Date(s) 2/3/4/5 Years Notwithstanding the foregoing, with respect to Elections made on or after January 1, 2013, only annual installments shall be available. 9.3.2 A Participant may amend a previous lump sum payment Election to take a distribution upon Retirement, Disability or an In-Service Distribution Date in installments, by filing an amended Election at least twelve (12) months in advance of the date specified in the original Election. With respect to a distribution upon Retirement or an In-Service Distribution Date, the new Distribution Date must be at least five (5) years after the date of the first distribution specified in the original Election. No such amendment may accelerate the date that any distribution would be made from the Plan. 9.3.3 The Participant’s method of distribution selected in his or her Election shall remain in effect for all future similar Deferrals until changed by the Participant during a subsequent Open Enrollment Period. The Participant’s method of distribution may be changed only in accordance with the requirements of Section 9.3.2. 9.3.4 Failure to Properly Specify Form of Distribution. If, at the time of his or her Distribution Date, a Participant has failed to elect a form of distribution or a Participant who elects an installment distribution does not satisfy the requirements for the installment term elected, then such Participant’s Benefits shall be distributed in a single lump sum payment. 9.3.5 Installment Amounts . For purposes of this Section 9.3, installment distributions shall commence within sixty (60) days following a Participant’s Retirement or Disability, and shall thereafter be paid within the thirty (30) day period beginning on the last business day of each calendar quarter beginning with the calendar quarter next following the quarter in which the initial payment date occurred (for quarterly installments) or on a date that is within 30 days of each anniversary of the initial payment date (for annual installments). Installment distributions with respect to an In-Service Distribution Date shall commence on the business day corresponding with or immediately following the date elected by the Participant and be paid within the 30-day period beginning on the last business day of each calendar quarter beginning with the calendar quarter next following the quarter in which the initial payment date occurred (for quarterly installments) or on a date that is within 30 days of each subsequent anniversary of the In-Service Distribution Date (for annual installments).  9.3.6 Reemployed After Installments Begin . If a former Participant is reemployed after having begun to receive installment distributions from the Plan, then such former Participant, upon once again becoming an Eligible Employee, may begin a new period of participation in the Plan; provided, however, that the installment distributions previously commenced will continue to be paid to the Participant over the specified installment period. 9.3.7 Minimum Account Balance Necessary for Installments . Notwithstanding anything in the Plan to the contrary, if a Participant’s Account balance is less than $50,000 at the time elected to begin installment distributions, the Participant’s Benefit will automatically be distributed in a single lump sum. 9.4 Election of In-Service Distribution Date . 9.4.1 Initial Election . Upon filing an Election to make Deferrals for any Plan Year, a Participant may specify an In-Service Distribution Date for the Subaccount to which such Deferrals are credited, subject to the following: 9.4.1.1 A Participant may elect one or more In-Service Distribution Dates for all of the Deferrals credited to such Subaccounts for the Plan Year. 9.4.1.2 Any In-Service Distribution Date must be at least two (2) years after the end of the Plan Year for which the initial Election specifying such In-Service Distribution Date is made. 9.4.1.3 Benefits shall be paid (or payments shall commence in accordance with Section 9.3.5) on the elected In-Service Distribution Date elected for such Deferrals. 9.4.2 Revocation or Amendment of In-Service Distribution Election . A Participant who has elected an In-Service Distribution Date may revoke and/or amend the In-Service Distribution Date Election by filing a revocation or an amended Election at least twelve (12) months in advance of the In-Service Distribution Date specified in the Election being revoked or amended. The amended In-Service Distribution Date must be at least five (5) years after the In-Service Distribution Date specified in the prior Election. Nothing in this Section 9.4.2 shall preclude a Participant from amending his or her Election as to the method of distribution in accordance with Section 9.3.2, above. 9.4.3 Separation from Service Before the Planned In-Service Distribution Date . If the Participant has a Separation from Service with the Employer before his In-Service Distribution Date for any reason (other than Retirement or Disability, to the extent of a valid Retirement or Disability election), distribution of the Participant’s Account shall be made in a single lump sum payment within sixty (60) days after the Participant’s Separation from Service. 9.4.4 Separation from Service After Commencement of Installment In-Service Distributions . Notwithstanding any prior Election, if the Participant has a Separation from Service with the Employer for any reason (other than Retirement or Disability, to the extent of a valid Retirement or Disability election) while receiving In-Service Distributions in the form of installments, distribution of the Participant’s remaining installments shall be made in a single lump sum payment within sixty (60) days after the Participant’s Separation from Service. 9.5 Distribution Upon Death of Participant . If a Participant dies before his or her Benefit payments have commenced, then such Participant’s Benefits shall be paid to his or her designated Beneficiary in a single lump sum cash payment within sixty (60) days following the date of the Participant’s death. If a Participant dies after installment payments have commenced, his or her remaining Account balance shall be paid to the Beneficiary in a single lump sum payment within sixty (60) days after the Participant’s death. 9.6 Specified Employees . In the event of a distribution to a Specified Employee based upon such individual’s Separation from Service, distributions will be made or commence, irrespective of any Election or provision of this Plan to the contrary, on the date that is six (6) months and ten (10) days after the date of Separation from Service, or if earlier, the date of death of the Specified Employee. 9.7 Limitation on Distributions to Covered Employees . Notwithstanding any other provision of this Article 9, and subject to the requirements of Code Section 409A, a distribution may be delayed to the extent that the Company reasonably anticipates that if the distribution were made as scheduled, the Company’s deduction with respect to such distribution would not be permitted due to the application of Code Section 162(m). Any amount which is not distributed to the Participant as a result of the foregoing shall be distributed during the Participant’s first taxable year in which the Company reasonably anticipates that if the distribution is made during such year, the deduction of such distribution will not be barred by application of Code Section 162(m).  9.8 Tax Withholding . Distributions under this Article 9 shall be subject to all applicable withholding requirements for federal, state and local income or other taxes. Amounts required to be withheld pursuant to this Section 9.8 shall be taken first from distributions of cash and second, to the extent necessary to satisfy the minimum tax withholding requirements, from the proceeds of the sale of shares of Company Common Stock distributed to the Participant, which sale the Participant authorizes as a condition of participation in the Plan. 9.9 Section 280G Parachute Payment. In the event that any distribution from the Plan received or to be received by a Participant (a “Distribution”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this Section 9.9, cause the Participant to become subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”) or increase such Participant’s Excise Tax liability, then such Distribution may be reduced to the largest amount which the Participant, in his or her sole discretion, determines would result in no portion of the Distribution being subject to the Excise Tax. The determination by a Participant of any reduction shall be conclusive and binding upon the Employer, the Company, and the Committee. The Committee shall reduce a Distribution and/or shall accept the return of some or all of a Distribution previously made to a Participant only upon written notice by the Participant indicating the amount of such reduction. Any amounts returned to the Plan pursuant to this Section 9.9 shall be treated as a forfeiture and shall be used to reduce the Company’s future contributions to the Plan or to pay costs associated with the operation and administration of the Plan. ARTICLE X ADMINISTRATION 10.1 Committee Structure . The initial number of Committee members shall be three (3), until such number is changed by the Company’s Executive Vice President, Human Resources, or such other officer serving in that capacity (the “EVP, Human Resources”). A member of the Committee must be an employee of the Employer or a member of the Board and shall continue to serve until such member (i) resigns, (ii) is removed or (iii) terminates employment with the Employer and no longer serves on the Board for any reason. The EVP, Human Resources is or at his discretion may be a member of the Plan Committee. The EVP, Human Resources may remove a member of the Committee. A majority of the remaining members of the Committee may fill one or more vacancies on the Committee. The Committee may allocate and delegate some or all of its responsibilities described in this Article 10 and otherwise as set forth in the Plan. The Committee’s authority under this Article 10 shall at all times be subject to the ability of the EVP, Human Resources to remove any or all of the members of the Committee for any reason, change the number of members of the Committee, fill vacancies on such committee, and establish rules and procedures for the Committee. 10.2 Committee Powers and Responsibilities . The Committee shall have control of the administration of the Plan, with all powers necessary to enable it properly to carry out its duties in that respect, including, but not limited to, the power and authority to: 10.2.1 Construe the Plan and any Trust Agreement(s) to determine all questions that shall arise as to interpretations of the Plan’s provisions, including determinations of which individuals are Eligible Employees and the extent of their eligibility to participate in the Plan, which individuals are Specified Employees, and determinations related to the amounts credited to a Participant’s Account and the appropriate timing and method of Benefit payments; 10.2.2 Establish reasonable rules and procedures which shall be applied to Elections, the establishment of Accounts and Subaccounts, and all other discretionary provisions of the Plan; 10.2.3 Establish rules, procedures and formats for the electronic administration of the Plan, including specifically the distribution of Participant communications, Elections and tax information; 10.2.4 Establish the rules and procedures by which the Plan will operate that are consistent with the terms of the Plan documents and Code Section 409A; 10.2.5 Compile and maintain all records it determines to be necessary, appropriate or convenient in connection with the administration of the Plan; 10.2.6 Adopt amendments to the Plan which are deemed necessary or desirable to facilitate administration of the Plan and/or to bring Plan-related documents into compliance with all applicable laws and regulations; provided, however, that the Committee shall not have the authority to adopt any Plan amendment that will result in substantially increased costs to the Company unless such amendment is contingent upon ratification by the Compensation Committee before becoming effective;  10.2.7 Employ such persons or organizations to perform services with respect to the administrative responsibilities of the Committee under the Plan as the Committee determines to be necessary and appropriate, including, but not limited to, attorneys, accountants, and benefit, financial and administrative consultants; 10.2.8 Select, review and retain or change the Benchmark Funds which are used for determining the Investment Return under the Plan; 10.2.9 Direct the investment of the assets of the Trust(s); 10.2.10 Review the performance of the Trustee(s) with respect to the Trustee’s duties, responsibilities and obligations under the Plan and the Trust Agreement(s); and 10.2.11 Take such other actions as may be necessary or appropriate to the management and investment of the assets held with respect to this Plan. 10.3 Decisions of the Committee . Decisions of the Committee made in good faith upon any matter within the scope of its authority shall be final, conclusive and binding upon all persons, including Participants and their legal representatives or Beneficiaries. Any discretion granted to the Committee shall be exercised in accordance with rules and policies established by the Committee. 10.4 Indemnification . To the extent permitted by law, the Company shall indemnify each member of the Committee, and any other Employee or member of the Board with duties under the Plan, against losses and expenses (including any amount paid in settlement) reasonably incurred by such person in connection with any claims against such person by reason of such person’s conduct in the performance of his or her duties under the Plan, except in relation to matters as to which such person has acted fraudulently or in bad faith in the performance of his or her duties. Notwithstanding the foregoing, the Company shall not indemnify any person for any expense incurred through any settlement or compromise of any action unless the Company consents in writing to the settlement or compromise. 10.5 Claims Procedure . Benefits shall be provided from this Plan through procedures initiated by the Committee, and the Participant need not file a claim. However, if a Participant or Beneficiary believes he or she is entitled to a Benefit different from the one received, then the Participant or Beneficiary may file a claim for the Benefit by writing a letter to the Committee. 10.5.1 If any claim for Benefits under the Plan is wholly or partially denied, the claimant shall be given notice in writing of such denial within 90 days of the date the letter claiming benefits is received by the Committee. If special circumstances require an extension of time, written notice of the extension shall be furnished to the claimant within the initial 90-day period. 10.5.2 Notice of the denial shall set forth the following information: (a) the specific reason or reasons for the denial; (b) specific references to pertinent Plan provisions on which the denial is based; (c) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; (d) an explanation that a full review by the Committee of the decision denying the claim may be requested by the claimant or his or her authorized representative by filing with the Company, within 60 days after such notice has been received, a written request for such review; and (e) if such request is so filed, the claimant or his or her authorized representative may review pertinent documents and submit issues and comments in writing within the same 60 day period. 10.5.3 The decision of the Committee upon review shall be made promptly, and not later than 60 days after the Committee’s receipt of the request for review, unless special circumstances require an extension of time for processing, in which case the claimant shall be so notified and a decision shall be rendered as soon as possible, but not later than 120 days after receipt of the request for review. If the claim is denied, wholly or in part, the claimant shall be promptly given a copy of the decision. The decision shall be in writing and shall include specific reasons for the denial, specific references to the pertinent Plan provisions on which the denial is based and shall be written in a manner calculated to be understood by the claimant. No further legal action may be initiated claiming benefits under this Plan until the claims procedure set forth in this Article 10 is complete. 10.6 Plan Expenses . The Company shall pay all costs and expenses related to the operation and administration of the Plan. ARTICLE XI AMENDMENT AND TERMINATION  11.1 Right to Amend . The Committee shall have the right to amend the Plan, at any time and with respect to any of its provisions, and all parties claiming any interest under the Plan shall be bound by such amendment; provided, however, that no such amendment shall deprive a Participant of a right accrued under the Plan prior to the date of the amendment, unless such an amendment is required by applicable law or deemed necessary to preserve the preferred tax treatment of the Plan. Notwithstanding anything herein to the contrary, only the Compensation Committee shall have the authority to adopt amendments that result in a change to the matching contribution formula under Section 4.5 of the Plan. 11.2 Amendments to Ensure Proper Characterization of Plan . Notwithstanding the provisions of Section 11.1, the Plan may be amended by the Committee or the Compensation Committee at any time, and retroactively if required, if found necessary, in the opinion of the Committee or the Compensation Committee, in order to conform the Plan to the provisions and requirements of applicable law (including, but not limited to, Section 409A of the Code, and other applicable portions of ERISA and the Code). No such amendment shall be considered prejudicial to any interest of a Participant hereunder. 11.3 Plan Termination or Plan Suspension . The Company reserves the right, by action of the Compensation Committee, to terminate the Plan at any time, to suspend the operation of the Plan for a fixed or indeterminate period of time, or to terminate the Plan and provide for all amounts to be distributed in a lump sum, to the extent permitted under Section 409A of the Code and the regulations issued thereunder. 11.4 Successor to Company . Any corporation or other business organization which is a successor to the Company by reason of a consolidation, merger or purchase of all or substantially all of the assets of the Company, or any other Change in Control, shall have the right to become a party to the Plan by means of a resolution of the entity's board of directors or other appropriate governing body. ARTICLE XII PLAN TRANSFERS 12.1 Transfers to Other Plans . In the event that a Participant becomes employed by any affiliated company, subsidiary corporation, parent corporation or unrelated corporation with which the Company enters into a transaction to acquire the assets or stock of such unrelated corporation, the Committee shall have the right, but not the obligation, to direct the Trustee to transfer funds in an amount equal to the amount credited to such Participant’s Account (the “Transferred Account”) to a trust established under a Transferee Plan. The Committee shall determine, in its sole discretion, whether such transfer shall be made and the timing of such transfer. Such transfer shall be made if, and only to the extent that, approval of such transfer is obtained from the Trustee. 12.1.1 Transferee Plan . For purposes of this Section 12.1, “Transferee Plan” shall mean an unfunded, nonqualified deferred compensation plan described in Sections 201(2), 301(a)(3) and 401(a)(l) of ERISA maintained by any of the Company’s affiliated entities, subsidiary corporations, parent corporations or any corporation unrelated to the Company with which the Company has successfully closed a transaction in which the Company acquired the assets or the outstanding stock of such unrelated corporation. 12.2 Transfers in from Other Plans . There may be transferred directly from the trustee of another nonqualified, funded, deferred compensation plan (an “Other Plan”) to the Trustee, subject to the approval of the transferor corporation maintaining the Other Plan and the Committee, funds in an amount not to exceed the amounts credited to the Other Plan accounts maintained for the benefit of that Eligible Employee. Amounts transferred pursuant to this Section 12.2, and any gains or losses allocable thereto, (i) shall be accounted for separately (“Transfer Account”) from amounts otherwise allocable to the Eligible Employee under this Plan, and (ii) the Transfer Account shall be distributed in accordance with the Eligible Employee’s deferral election under the Other Plan, as such election may be amended pursuant to the terms of the Other Plan. Subsequent earnings on the amount in the Transfer Account shall be credited to a separate Account for the Eligible Employee established pursuant to this Plan and shall be determined under the Plan’s investment procedures in Article 6. 12.3 Effect of Section . This Section 12 shall only be operable to the extent the Committee determines and in its sole and absolute discretion at the time of any proposed transfer that such transfer will not impact the Plan and any deferred amounts in a tax disadvantageous manner under Section 409A of the Code. ARTICLE XIII  MISCELLANEOUS 13.1 No Assignment . The right of any Participant, any Beneficiary or any other person to the payment of any benefits under this Plan shall not be assigned, transferred, pledged or encumbered, including pursuant to domestic relations orders. 13.2 No Secured Interest . The obligations of the Company to Participants under this Plan shall not be funded or otherwise secured, and shall be paid out of the general assets of the Company. Participants are general unsecured creditors of the Company with respect to the Company’s contributions hereunder and shall have no legal or equitable interest in the assets of the Company, including any assets the Company may set aside or reserve against its obligations under this Plan. 13.3 Successors . This Plan shall be binding upon and inure to the benefit of the Employer, its successors and assigns and the Participant and his or her heirs, executors, administrators and legal representatives. 13.4 No Employment Agreement . Nothing contained herein shall be construed as conferring upon any Participant the right to continue in the Service of the Company or any Affiliate. 13.5 Attorneys’ Fees . If the Employer, the Participant, any Beneficiary and/or successor in interest to any of the foregoing, brings legal action to enforce any of the provisions of this Plan, the prevailing party in such legal action shall be reimbursed by the other party for the prevailing party’s legal costs, including, without limitation, reasonable fees of attorneys, accountants and similar advisors and expert witnesses. 13.6 Entire Agreement . This Plan constitutes the entire understanding and agreement with respect to the subject matter contained herein, and supersedes any and all agreements, understandings, restrictions, representations or warranties among any Participant and the Employer other than those set forth or provided for in this Plan. 13.7 Severability . If any provision of this Plan is held to be invalid, illegal or unenforceable, such invalidity, illegality, or unenforceability shall not affect any other provision of this Plan, and the Plan shall be construed and enforced as if such provision had not been included. In addition, if such provision is invalid, illegal or unenforceable due to changes in applicable law or accounting requirements, the Company may amend the Plan, without the consent and without providing any advance notice to any Participant, as may be necessary or desirable to comply with changes in the applicable law or financial accounting of deferred compensation plans. 13.8 Governing Law . This Plan shall be construed under the laws of the State of California, except to the extent preempted by federal law. IN WITNESS WHEREOF, this Plan has been adopted by the Company effective as of the Effective Date. QUALCOMM INCORPORATED Dated: October 11, 2013 By: /s/ David A. Reichel Name: David A. Reichel Title: Senior Director, Total Rewards Management EXHIBIT 10.117 QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN NON-EMPLOYEE DIRECTOR RESTRICTED STOCK UNIT GRANT NOTICE FOR NON-EMPLOYEE DIRECTORS IN THE UNITED KINGDOM Qualcomm Incorporated (the “Company”), pursuant to its 2006 Long-Term Incentive Plan (the “Plan”) hereby grants to the Participant named below the number of Restricted Stock Units set forth below, each of which is a bookkeeping entry representing the equivalent in value of one (1) share of the Company’s common stock. The Restricted Stock Unit Award is subject to all of the terms and conditions as set forth herein and the Restricted Stock Unit Agreement for Directors in the United Kingdom (attached hereto) and the Plan which are incorporated herein in their entirety. Capitalized terms not otherwise defined in this Grant Notice or the Restricted Stock Unit Agreement shall have the meaning set forth in the Plan. Participant: «FIRST_NAME» «LAST_NAME» Grant No.: «NUM» Date of Grant: «GRANT_DATE» Vesting Date This Restricted Stock Unit Award vests on the earliest to occur of the following events provided your Service is continuous from the Date of Grant through the applicable date: (1) April [DD], [YYYY] (the “Scheduled Vesting Date”), (2) the date of the next annual meeting of stockholders of the Company that occurs after the Date of Grant should you not stand for re-election or not be re-elected, (3) your death, (4) your Disability, or (5) a Change in Control. Settlement Date The Restricted Stock Units will be settled and paid as provided in the Restricted Stock Unit Agreement on, or as soon as practicable following, but in no event later than thirty (30) days after April [DD], [YYYY] . However, as provided in Section 2.1 of the Restricted Stock Unit Agreement, these Restricted Stock Units may be settled earlier upon the termination of your Board service and certain other events. Additional Terms/Acknowledgments: The Participant acknowledges (in the form determined by the Company) receipt of, and represents that the Participant has read, understands, accepts and agrees to the terms and conditions of the following: this Grant Notice, the Restricted Stock Unit Agreement and the Plan (including, but not limited to, the binding arbitration provision in Section 3.7 of the Plan). Participant hereby accepts the Restricted Stock Unit Award subject to all of its terms and conditions and further acknowledges that as of the Date of Grant, this Grant Notice, the Restricted Stock Unit Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements pertaining to this particular Restricted Stock Unit Award. Qualcomm Incorporated: Non-Employee Director: By: _____________________________________ Dr. Paul E. Jacobs Signature Chairman of the Board and Chief Executive Officer _____________________________________ Dated: «GRANT_DATE» Date Attachment: Non-Employee Director Restricted Stock Unit Agreement Emp #: «ID» Shares Subject to Restricted Stock Unit: «SHARES»  QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN NON-EMPLOYEE DIRECTOR RESTRICTED STOCK UNIT AGREEMENT FOR NON-EMPLOYEE DIRECTORS IN THE UNITED KINGDOM Pursuant to the Grant Notice and this Non-Employee Director Restricted Stock Unit Agreement for Directors in the United Kingdom (the “Agreement”), Qualcomm Incorporated (the “Company”) has granted you a Restricted Stock Unit Award with respect to the number of shares of the Company’s common stock (“Stock”) indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement but defined in the Qualcomm Incorporated 2006 Long-Term Incentive Plan (the “Plan”) shall have the same definitions as in the Plan. The details of this Restricted Stock Unit Award are as follows: 1. SERVICE AND VESTING. 1.1 SERVICE. As provided in the Plan and notwithstanding any other provision of this Agreement, the Company reserves the right, in its sole discretion, to determine when your Service has terminated. 1.2 VESTING. Except as otherwise provided in the Plan or this Agreement, this Restricted Stock Unit Award will vest on the vesting dates provided in the Grant Notice (the “Vesting Dates”). Except as otherwise expressly set forth in the Grant Notice, in the event of the termination of your Service for any reason, whether voluntary or involuntary, all unvested Restricted Stock Units shall be immediately forfeited without consideration. Unless and until the Restricted Stock Units vest on the applicable Vesting Dates, you will have no right to payment of any such Restricted Stock Units. 2. SETTLEMENT OF THE RESTRICTED STOCK UNITS. 2.1 TIMING OF PAYMENT. The “Settlement Date” of your vested Restricted Stock Units shall be the earliest to occur of the following: (a) the Scheduled Vesting Date specified in the Grant Notice, if any; (b) your separation from Service, to the extent such separation constitutes a “separation from service” pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); (c) your death; (d) your Disability, to the extent such Disability constitutes a “disability” pursuant to Section 409A of the Code; or (e) a Change in Control, to the extent such Change in Control constitutes a “change in ownership or effective control of the corporation” with respect to the Company pursuant to Section 409A of the Code. 2.2 FORM OF PAYMENT. Your vested Restricted Stock Units shall be paid in whole shares of Stock (in cash as to fractional shares) on, or as soon as practicable following, but in no event later than thirty (30) days after, the Settlement Date, except as otherwise specified below. To assist you in satisfying federal, state, local, or non-U.S. income tax or National Insurance Contribution obligations arising from your Restricted Stock Unit Award, the Company will allow you to make a one-time irrevocable election no later than (60) days after the Date of Grant specified in the Grant Notice, authorizing the Company to pay cash in lieu of Stock with respect to a percentage of the Restricted Stock Units equal to the sum of any applicable U.S. and non-U.S. income tax or National Insurance Contribution withholding rates (such sum referred to herein as the “Tax Percentage”). The amount of cash paid in lieu of such shares of Stock shall be equal to (i) the number of Restricted Stock Units (rounded up to the nearest whole Restricted Stock Unit) corresponding to the Tax Percentage, multiplied by, (ii) if the Stock is listed on a national or regional securities exchange or market system, the closing price of a share of Stock as quoted on such national or regional securities exchange or market system constituting the primary market for the Stock on the last trading day prior to the Settlement Date, or, if the Stock is not listed on a national or regional securities exchange or market system, the price of a share of Stock as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse (the price determined under this clause (ii) being hereinafter referred to for purposes of this Agreement as the “Fair Market Value of the Stock”). Any election to receive a portion of the Restricted Stock Unit Award paid in cash as specified in this Section 2.2, shall not be effective with respect to any Settlement Date that occurs within six (6) months after the later of (i) the date of the election or (ii) the Date of Grant specified in the Grant Notice.  3. TAX WITHHOLDING. As a Non-Employee Director of the Company, you should report any income you derive from the Restricted Stock Units and pay all applicable income taxes and National Insurance Contributions on such income. Notwithstanding the foregoing, in the event that a Participating Company has any income tax, National Insurance Contributions, payroll tax or other tax-related withholding (“Tax-Related Items”) obligation with respect to the income you derive from the Restricted Stock Units, you authorize the Participating Company, at its discretion, to withhold all applicable Tax-Related Items legally payable by you by one or a combination of the following methods: (i) withholding from cash compensation payable to you by the Company; (ii) withholding in shares of Stock, with such withholding obligation determined based on any applicable minimum statutory withholding rates; or (iii) arranging for the sale of shares of Stock acquired upon vesting of the Restricted Stock Units (on your behalf and at your direction pursuant to this authorization). Finally, you agree that to pay on demand to the Participating Company any amount of Tax-Related Items that the Participating Company may be required to withhold as a result of your participation in the Plan or the payment of shares of Stock that cannot be satisfied by the means previously described. 4. TAX ADVICE. You acknowledge that you may be subject to federal, state, local, and non-U.S. income tax and National Insurance Contribution obligations arising from your Restricted Stock Unit Award. You represent, warrant and acknowledge that the Company has made no warranties or representations to you with respect to the income tax or National Insurance Contribution consequences of the transactions contemplated by this Agreement, and you are in no manner relying on the Company or its representatives for an assessment of such tax consequences. YOU UNDERSTAND THAT THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE TAX AND NATIONAL INSURANCE CONTRIBUTION TREATMENT OF ANY RESTRICTED STOCK UNITS. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER PENALTIES. 5. DIVIDEND EQUIVALENTS. If the Board declares a cash dividend on the Company’s Stock, you will be entitled to Dividend Equivalents on the dividend payment date established by the Company equal to the cash dividends payable on the same number of shares of Stock as the number of Restricted Stock Units subject to this Restricted Stock Unit Award on the dividend record date established by the Company. Any such Dividend Equivalents will be in the form of additional Restricted Stock Units, will be subject to the same terms and vesting dates as the underlying Restricted Stock Units, and will be paid at the same time and in the same manner as the underlying Restricted Stock Units originally subject to this Restricted Stock Unit Award, except that any fractional shares attributable to Dividend Equivalents will be paid in cash within thirty (30) days following the date of payment of the underlying Restricted Stock Unit based on the Fair Market Value (as specified in Section 2.2, above) on the date of payment of the underlying Restricted Stock Unit. The number of additional Restricted Stock Units credited as Dividend Equivalents on the dividend payment date will be determined by dividing (1) the product of (a) the number of your Restricted Stock Units as of the corresponding dividend record date (including any Restricted Stock Units previously credited as a result of prior payments of Dividend Equivalents) and (b) the per-share cash dividend paid on the dividend payment date, by (2) the per-share Fair Market Value (as specified in Section 2.2, above) of Stock on the dividend payment date. 6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, no shares of Stock will be issued to you upon vesting and settlement of this Restricted Stock Unit Award unless the Stock is then registered under the Securities Act or, if such Stock is not then so registered, the Company has determined that such vesting and issuance would be exempt from the registration requirements of the Securities Act. By accepting the Restricted Stock Unit Award, you agree not to sell any of the shares of Stock received under this Restricted Stock Unit Award at a time when applicable laws or Company policies prohibit a sale. 7. TRANSFERABILITY. Prior to the issuance of shares of Stock in settlement of a Restricted Stock Unit Award, the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by your creditors or by your beneficiary, except (i) transfer by will or by the laws of descent and distribution or (ii) transfer by written designation of a beneficiary, in a form acceptable to the Company, with such designation taking effect upon your death. All rights with respect to the Restricted Stock Unit Award shall be exercisable during your lifetime only by you or your guardian or legal representative. Prior to actual payment of any Restricted Stock Units, such Restricted Stock Units will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.  8. RESTRICTED STOCK UNITS NOT A SERVICE CONTRACT. This Restricted Stock Unit Award is not an employment or service contract and nothing in this Agreement, the Grant Notice or the Plan shall be deemed to create in any way whatsoever any obligation on your part to continue in the service of a Participating Company, or of a Participating Company to continue your Service with the Participating Company. In addition, nothing in your Restricted Stock Unit Award shall obligate the Company, its stockholders, Board, Officers or Employees to continue any relationship which you might have as a Director or Consultant for the Company. 9. RESTRICTIVE LEGEND. Stock issued pursuant to the vesting and settlement of the Restricted Stock Units may be subject to such restrictions upon the sale, pledge or other transfer of the Stock as the Company and the Company’s counsel deem necessary under applicable law or pursuant to this Agreement. 10. REPRESENTATIONS, WARRANTIES, COVENANTS, AND ACKNOWLEDGMENTS. You hereby agree that in the event the Company and the Company’s counsel deem it necessary or advisable in the exercise of their discretion, the transfer or issuance of the shares of Stock issued pursuant to the Restricted Stock Units may be conditioned upon you making certain representations, warranties, and acknowledgments relating to compliance with applicable securities laws. 11. VOTING AND OTHER RIGHTS. Subject to the terms of this Agreement, you shall not have any voting rights or any other rights and privileges of a shareholder of the Company unless and until shares of Stock are issued upon payment of the Restricted Stock Units. 12. CODE SECTION 409A. It is the intent that the payment of Restricted Stock Units as set forth in this Agreement shall qualify for exemption from the requirements of Section 409A of the Code, and any ambiguities herein will be interpreted to so comply. The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify this Agreement as may be necessary to ensure that all payments provided for under this Agreement are made in a manner that qualifies for exemption from Section 409A of the Code; provided, however, that the Company makes no representation that the payments of Restricted Stock Units provided for under this Agreement will be exempt from Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the payments of Restricted Stock Units provided for under this Agreement. 13. NOTICES. Any notices provided for in this Agreement, the Grant Notice or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. 14. DATA PRIVACY . You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement by and among, as necessary and applicable, the Participating Companies, for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that the Company may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, and any shares of stock or directorships held in the Company, and details of the Restricted Stock Units or any other entitlement to shares of Stock, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). Participants residing outside the U.S, should understand the following: Data will be transferred to E*TRADE Financial (“E*TRADE”), or such other stock plan service provider as may be selected by Company in the future, which is assisting Company with the implementation, administration and management of the Plan. You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country ( e.g. , the United States) may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting the Stock Administration department. You authorize the Company, E*TRADE, and any other possible recipients that may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and  transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Stock Administration department. You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact the Stock Administration department at QUALCOMM Incorporated, 5775 Morehouse Drive, San Diego, CA 92121. 15. NATURE OF GRANT. In accepting the Restricted Stock Unit Award, you acknowledge and agree that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan, the Agreement or the Grant Notice; (b) the award of Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units or other Awards have been awarded repeatedly in the past; (c) all decisions with respect to future Awards, if any, will be at the sole discretion of the Company; (d) your participation in the Plan is voluntary; (e) the future value of the underlying shares of Stock is unknown and cannot be predicted with certainty; (f) no claim or entitlement to compensation or damages shall arise from forfeiture of the Restricted Stock Units resulting from termination of your Service (for any reason whatsoever), and in consideration of the grant of the Restricted Stock Units to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, waive your ability, if any, to bring any such claim, and release the Company from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims; (g) the Company is not providing any legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or your acquisition or sale of the underlying shares of Stock; and (h) you are hereby advised to consult with your own personal legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. 16. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of California, U.S.A., as if the Agreement were between California residents and as if it were entered into and to be performed entirely within the State of California. 17. IMPOSITION OF OTHER REQUIREMENTS. The Company reserves the right to impose other requirements on your participation in the Plan, on the Restricted Stock Units, and on any shares of Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. 18. ARBITRATION. Any dispute or claim concerning any Restricted Stock Units granted (or not granted) pursuant to the Plan and any other disputes or claims relating to or arising out of the Plan shall be fully, finally and exclusively resolved by binding arbitration conducted by the American Arbitration Association pursuant to the commercial arbitration rules in San Diego, California. By accepting the Restricted Stock Unit Award, you and the Company waive your respective rights to have any such disputes or claims tried by a judge or jury.  19. AMENDMENT. Your Restricted Stock Unit Award may be amended as provided in the Plan at any time, provided no such amendment may adversely affect the Restricted Stock Unit Award without your consent unless such amendment is necessary to comply with any applicable law or government regulation, or is contemplated in Section 12 hereof. No amendment or addition to this Agreement shall be effective unless in writing or in such electronic form as may be designated by the Company. 20. GOVERNING PLAN DOCUMENT. Your Restricted Stock Unit Award is subject to this Agreement, the Grant Notice and all the provisions of the Plan, the provisions of which are hereby made a part of this Agreement, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement, the Grant Notice and those of the Plan, the provisions of the Plan shall control. 21. SEVERABILITY . If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible. 22. DESCRIPTION OF ELECTRONIC DELIVERY . The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement, and any reports of the Company provided generally to the Company’s shareholders, may be delivered to you electronically. In addition, if permitted by the Company, you may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via electronic mail (“e-mail”) or such other means of electronic delivery specified by the Company.  QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN NON-EMPLOYEE DIRECTOR RESTRICTED STOCK UNIT GRANT NOTICE FOR NON-EMPLOYEE DIRECTORS IN HONG KONG Qualcomm Incorporated (the “Company”), pursuant to its 2006 Long-Term Incentive Plan (the “Plan”) hereby grants to the Participant named below the number of Restricted Stock Units set forth below, each of which is a bookkeeping entry representing the equivalent in value of one (1) share of the Company’s common stock. The Restricted Stock Unit Award is subject to all of the terms and conditions as set forth herein and in the Non-Employee Director Restricted Stock Unit Agreement for Non-Employee Directors in Hong Kong (the “Agreement”) (attached hereto) and the Plan which are incorporated herein in their entirety. Capitalized terms not otherwise defined in this Grant Notice or the Agreement shall have the meaning set forth in the Plan. Participant: «First_Name» «Last_Name» Grant No.: «Number» Date of Grant: «RSU_Date» Vesting Date This Restricted Stock Unit Award vests on the earliest to occur of the following events provided your Service is continuous from the Date of Grant specified above through the applicable date: (1) the one-year anniversary of the Date of Grant, (2) the date of the next annual meeting of stockholders that occurs after the Date of Grant, (3) your death, (4) your Disability, or (5) a Change in Control. Settlement Date The Restricted Stock Units will be settled and paid as provided in the Agreement on, or as soon as practicable following, but in no event later than thirty (30) days after, vesting. Additional Terms/Acknowledgments: The Participant acknowledges (in the form determined by the Company) receipt of, and represents that the Participant has read, understands, accepts and agrees to the terms and conditions of the following: this Grant Notice, the Agreement and the Plan (including, but not limited to, the binding arbitration provision in Section 3.7 of the Plan). Participant hereby accepts the Restricted Stock Unit Award subject to all of its terms and conditions and further acknowledges that as of the Date of Grant, this Grant Notice, the Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements pertaining to this particular Restricted Stock Unit Award. Qualcomm Incorporated: Non-Employee Director: By: _____________________________________ Dr. Paul E. Jacobs Signature Chairman of the Board and Chief Executive Officer _____________________________________ Dated: «RSU_Date» Date Attachment: Non-Employee Director Restricted Stock Unit Agreement Emp #: «ID» Shares Subject to Restricted Stock Unit: «Shares_Granted»  QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN NON-EMPLOYEE DIRECTOR RESTRICTED STOCK UNIT AGREEMENT FOR NON-EMPLOYEE DIRECTORS IN HONG KONG Pursuant to the Grant Notice and this Non-Employee Director Restricted Stock Unit Agreement for Directors in Hong Kong (the “Agreement”), Qualcomm Incorporated (the “Company”) has granted you a Restricted Stock Unit Award with respect to the number of shares of the Company’s common stock (“Stock”) indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement but defined in the Qualcomm Incorporated 2006 Long-Term Incentive Plan (the “Plan”) shall have the same definitions as in the Plan. The details of this Restricted Stock Unit Award are as follows: 1. SERVICE AND VESTING. 1.3 SERVICE. As provided in the Plan and notwithstanding any other provision of this Agreement, the Company reserves the right, in its sole discretion, to determine when your Service has terminated. 1.4 VESTING. Except as otherwise provided in the Plan or this Agreement, this Restricted Stock Unit Award will vest on the applicable vesting date provided in the Grant Notice (the “Vesting Date”). Except as otherwise expressly set forth in the Grant Notice, in the event of the termination of your Service for any reason, whether voluntary or involuntary, all unvested Restricted Stock Units shall be immediately forfeited without consideration. Unless and until the Restricted Stock Units vest on the applicable Vesting Date, you will have no right to payment of any such Restricted Stock Units. 2. SETTLEMENT OF THE RESTRICTED STOCK UNITS. 2.3 TIMING OF PAYMENT. The “Settlement Date” of your vested Restricted Stock Units shall be as soon as practicable following, but in no event later than thirty (30) days after, the Vesting Date. 2.4 FORM OF PAYMENT. Your vested Restricted Stock Units shall be paid in whole shares of Stock (in cash as to fractional shares), except as otherwise specified below. To assist you in satisfying federal, state, local, or non-U.S. income tax or social insurance contribution obligations arising from your Restricted Stock Unit Award, the Company will allow you to make a one-time irrevocable election no later than (60) days after the Date of Grant specified in the Grant Notice, authorizing the Company to pay cash in lieu of Stock with respect to a percentage of the Restricted Stock Units equal to the sum of any applicable U.S. and non-U.S. income tax or social insurance contribution withholding rates (such sum referred to herein as the “Tax Percentage”). The amount of cash paid in lieu of such shares of Stock shall be equal to (i) the number of Restricted Stock Units (rounded up to the nearest whole Restricted Stock Unit) corresponding to the Tax Percentage, multiplied by, (ii) if the Stock is listed on a national or regional securities exchange or market system, the closing price of a share of Stock as quoted on such national or regional securities exchange or market system constituting the primary market for the Stock on the last trading day prior to the Settlement Date, or, if the Stock is not listed on a national or regional securities exchange or market system, the price of a share of Stock as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse (the price determined under this clause (ii) being hereinafter referred to for purposes of this Agreement as the “Fair Market Value of the Stock”). Any election to receive a portion of the Restricted Stock Unit Award paid in cash as specified in this Section 2.2, shall not be effective with respect to any Settlement Date that occurs within six (6) months after the later of (i) the date of the election or (ii) the Date of Grant specified in the Grant Notice. 3. TAX WITHHOLDING. As a Non-Employee Director of the Company, you should report any income you derive from the Restricted Stock Units and pay all applicable income taxes and social insurance contributions on such income. Notwithstanding the foregoing, in the event that a Participating Company has any income tax, social insurance contributions, payroll tax or other tax-related withholding (“Tax-Related Items”) obligation with respect to the income you derive from the Restricted Stock Units, you authorize the Participating Company, at its discretion, to withhold all applicable Tax-Related Items legally payable by you by one or a combination of the following methods: (i) withholding from cash  compensation payable to you by the Company; (ii) withholding in shares of Stock, with such withholding obligation determined based on any applicable minimum statutory withholding rates; or (iii) arranging for the sale of shares of Stock acquired upon vesting of the Restricted Stock Units (on your behalf and at your direction pursuant to this authorization). Finally, you agree that to pay on demand to the Participating Company any amount of Tax-Related Items that the Participating Company may be required to withhold as a result of your participation in the Plan or the payment of shares of Stock that cannot be satisfied by the means previously described. 4. TAX ADVICE. You acknowledge that you may be subject to federal, state, local, and non-U.S. income tax and social insurance contribution obligations arising from your Restricted Stock Unit Award. You represent, warrant and acknowledge that the Company has made no warranties or representations to you with respect to the income tax or social insurance contribution consequences of the transactions contemplated by this Agreement, and you are in no manner relying on the Company or its representatives for an assessment of such tax consequences. YOU UNDERSTAND THAT THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE TAX AND SOCIAL INSURANCE CONTRIBUTION TREATMENT OF ANY RESTRICTED STOCK UNITS. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER PENALTIES. 5. DIVIDEND EQUIVALENTS. If the Board declares a cash dividend on the Company’s Stock, you will be entitled to Dividend Equivalents on the dividend payment date established by the Company equal to the cash dividends payable on the same number of shares of Stock as the number of Restricted Stock Units subject to this Restricted Stock Unit Award on the dividend record date established by the Company. Any such Dividend Equivalents will be in the form of additional Restricted Stock Units, will be subject to the same terms and Vesting Date as the underlying Restricted Stock Units, and will be paid at the same time and in the same manner as the underlying Restricted Stock Units originally subject to this Restricted Stock Unit Award, except that any fractional shares attributable to Dividend Equivalents will be paid in cash within thirty (30) days following the date of payment of the underlying Restricted Stock Unit based on the Fair Market Value (as specified in Section 2.2, above) on the date of payment of the underlying Restricted Stock Unit. The number of additional Restricted Stock Units credited as Dividend Equivalents on the dividend payment date will be determined by dividing (1) the product of (a) the number of your Restricted Stock Units as of the corresponding dividend record date (including any Restricted Stock Units previously credited as a result of prior payments of Dividend Equivalents) and (b) the per-share cash dividend paid on the dividend payment date, by (2) the per-share Fair Market Value (as specified in Section 2.2, above) of Stock on the dividend payment date. 6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, no shares of Stock will be issued to you upon vesting and settlement of this Restricted Stock Unit Award unless the Stock is then registered under the Securities Act or, if such Stock is not then so registered, the Company has determined that such vesting and issuance would be exempt from the registration requirements of the Securities Act. By accepting the Restricted Stock Unit Award, you agree not to sell any of the shares of Stock received under this Restricted Stock Unit Award at a time when applicable laws or Company policies prohibit a sale. 7. TRANSFERABILITY. Prior to the issuance of shares of Stock in settlement of a Restricted Stock Unit Award, the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by your creditors or by your beneficiary, except (i) transfer by will or by the laws of descent and distribution or (ii) transfer by written designation of a beneficiary, in a form acceptable to the Company, with such designation taking effect upon your death. All rights with respect to the Restricted Stock Unit Award shall be exercisable during your lifetime only by you or your guardian or legal representative. Prior to actual payment of any Restricted Stock Units, such Restricted Stock Units will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. 8. RESTRICTED STOCK UNITS NOT A SERVICE CONTRACT. This Restricted Stock Unit Award is not an employment or service contract and nothing in this Agreement, the Grant Notice or the Plan shall be deemed to create in any way whatsoever any obligation on your part to continue in the Service of a Participating Company, or of a Participating Company to continue your Service with the Participating Company. In addition, nothing in your Restricted Stock Unit Award shall obligate the Company, its stockholders, Board, Officers or Employees to continue any relationship which you might have as a Director or Consultant with the Company.  9. RESTRICTIVE LEGEND. Stock issued pursuant to the vesting and settlement of the Restricted Stock Units may be subject to such restrictions upon the sale, pledge or other transfer of the Stock as the Company and the Company’s counsel deem necessary under applicable law or pursuant to this Agreement. 10. REPRESENTATIONS, WARRANTIES, COVENANTS, AND ACKNOWLEDGMENTS. You hereby agree that in the event the Company and the Company’s counsel deem it necessary or advisable in the exercise of their discretion, the transfer or issuance of the shares of Stock issued pursuant to the Restricted Stock Units may be conditioned upon you making certain representations, warranties, and acknowledgments relating to compliance with applicable securities laws. 11. VOTING AND OTHER RIGHTS. Subject to the terms of this Agreement, you shall not have any voting rights or any other rights and privileges of a shareholder of the Company unless and until shares of Stock are issued upon payment of the Restricted Stock Units. 12. CODE SECTION 409A. It is the intent that the payment of Restricted Stock Units as set forth in this Agreement shall qualify for exemption from or comply with the requirements of Section 409A of the Code, and any ambiguities herein will be interpreted to so comply. The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify this Agreement as may be necessary to ensure that all payments provided for under this Agreement are made in a manner that qualifies for exemption from or complies with Section 409A of the Code; provided, however, that the Company makes no representation that the payments of Restricted Stock Units provided for under this Agreement will be exempt from or shall comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the payments of Restricted Stock Units provided for under this Agreement. The Company will have no liability to you or any other party if the Restricted Stock Unit Award, the delivery of shares of Stock upon payment of the Restricted Stock Unit Award or other payment hereunder that is intended to be exempt from, or compliant with, Code Section 409A, is not so exempt or compliant or for any action taken by the Company with respect thereto. 13. NOTICES. Any notices provided for in this Agreement, the Grant Notice or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. 14. DATA PRIVACY . You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement by and among, as necessary and applicable, the Participating Companies, for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that the Company may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, and any shares of stock or directorships held in the Company, and details of the Restricted Stock Units or any other entitlement to shares of Stock, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). Participants residing outside the U.S, should understand the following: Data will be transferred to E*TRADE Financial (“E*TRADE”), or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting the Stock Administration department. You authorize the Company, E*TRADE, and any other possible recipients that may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data,  request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Stock Administration department. You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact the Stock Administration department at QUALCOMM Incorporated, 5775 Morehouse Drive, San Diego, CA 92121. 15. NATURE OF GRANT. In accepting the Restricted Stock Unit Award, you acknowledge and agree that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan, the Agreement or the Grant Notice; (b) the award of Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units or other Awards have been awarded repeatedly in the past; (c) all decisions with respect to future Awards, if any, will be at the sole discretion of the Company; (d) your participation in the Plan is voluntary; (e) the future value of the underlying shares of Stock is unknown and cannot be predicted with certainty; (f) no claim or entitlement to compensation or damages shall arise from forfeiture of the Restricted Stock Units resulting from termination of your Service (for any reason whatsoever), and in consideration of the grant of the Restricted Stock Units to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, waive your ability, if any, to bring any such claim, and release the Company from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims; (g) the Restricted Stock Unit Award and the benefits evidenced by this Agreement do not create any entitlement, not otherwise specifically provided for in the Plan or provided by the Company in its discretion, to have the Restricted Stock Unit Award or any such benefits transferred to, or assumed by, another company, nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Company’s Stock; (h) the Company is not providing any legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or your acquisition or sale of the underlying shares of Stock; and (i) you are hereby advised to consult with your own personal legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. 16. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of California, U.S.A., as if the Agreement were between California residents and as if it were entered into and to be performed entirely within the State of California. 17. SECURITIES LAW NOTICE. Warning: The Restricted Stock Units and any shares of Stock to be issued pursuant to the Restricted Stock Unit Award do not constitute a public offering of securities under Hong Kong law and are available only to Employees, Directors and Consultants of the Company and its Participating Companies. The Plan, the Agreement, and other incidental communication materials have not been prepared in accordance with and are not intended to constitute a ‘prospectus’ for a public offering of securities under the applicable companies and securities legislation in Hong Kong, and the documents have not been reviewed by any regulatory authority in Hong Kong. The Agreement and the incidental communication materials are intended only for the personal use of each Participant and not for distribution to any other person. If you have any doubt about any of the contents of the Agreement or the Plan, you should obtain independent professional advice.  18. RESTRICTION ON SALE OF SHARES OF STOCK. In the event your Restricted Stock Units vest and shares of Stock are issued to you within six months of the Date of Grant, you agree that you will not dispose of the Stock prior to the six-month anniversary of the Date of Grant. 19. IMPOSITION OF OTHER REQUIREMENTS. The Company reserves the right to impose other requirements on your participation in the Plan, on the Restricted Stock Units, and on any shares of Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. 20. ARBITRATION. Any dispute or claim concerning any Restricted Stock Units granted (or not granted) pursuant to the Plan and any other disputes or claims relating to or arising out of the Plan shall be fully, finally and exclusively resolved by binding arbitration conducted by the American Arbitration Association pursuant to the commercial arbitration rules in San Diego, California. By accepting the Restricted Stock Unit Award, you and the Company waive your respective rights to have any such disputes or claims tried by a judge or jury. 21. AMENDMENT. Your Restricted Stock Unit Award may be amended as provided in the Plan at any time, provided no such amendment may adversely affect the Restricted Stock Unit Award without your consent unless such amendment is necessary to comply with any applicable law or government regulation, or is contemplated in Section 12 hereof. No amendment or addition to this Agreement shall be effective unless in writing or in such electronic form as may be designated by the Company. 22. GOVERNING PLAN DOCUMENT. Your Restricted Stock Unit Award is subject to this Agreement, the Grant Notice and all the provisions of the Plan, the provisions of which are hereby made a part of this Agreement, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement, the Grant Notice and those of the Plan, the provisions of the Plan shall control. 23. SEVERABILITY . If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible. 24. DESCRIPTION OF ELECTRONIC DELIVERY . The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to you electronically. In addition, if permitted by the Company, you may deliver electronically accept and acknowledge the Grant Notice and/or this Agreement and/or deliver such documents to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic acknowledgement, acceptance and/or delivery may include but do not necessarily include use of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via electronic mail (“e-mail”) or such other means specified by the Company. You hereby consent to receive the above-listed documents by electronic delivery and, if permitted by the Company, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, as set forth herein. 25. WAIVER. The waiver by the Company with respect to your (or any other Participant’s) compliance of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of such party of a provision of this Agreement. 26. REPAYMENT/FORFEITURE. Any benefits you may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with (a) any applicable listing standards of a national securities exchange adopted in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder, (b) similar rules under the laws of any other jurisdiction and (c) any policies  adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you. By: EXHIBIT 10.118 QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN EXECUTIVE RESTRICTED STOCK UNIT GRANT NOTICE Qualcomm Incorporated (the “Company”), pursuant to its 2006 Long-Term Incentive Plan (the “Plan”) hereby grants you the number of Restricted Stock Units set forth below, each of which is a bookkeeping entry representing the equivalent in value of one (1) share of the Company’s common stock. This Restricted Stock Unit Award is subject to all of the terms and conditions as set forth herein and the Executive Restricted Stock Unit Agreement (attached hereto) and the Plan 1 which are incorporated herein in their entirety. Capitalized terms not otherwise defined in this Grant Notice or the Executive Restricted Stock Unit Agreement shall have the meaning set forth in the Plan. Participant: «Employee» Grant No.: «Number» Date of Grant: «Grant_Date» Performance Period: «Date Range» Performance Measure: Adjusted GAAP Operating Income defined as the Company’s operating income, determined in accordance with U.S. generally accepted accounting principles or accounting standards as may be required by the Financial Accounting Standards Board as of the date hereof (“GAAP”), but determined excluding (a) results from operations of the Qualcomm Strategic Initiative (“QSI”) segment; (b) all share-based compensation other than amounts related to share-based awards granted under a bonus program that may result in the issuance of unrestricted shares of the Company’s common stock; (c) the following items resulting from acquisitions: acquired in-process research and development expenses, recognition of the step-up of inventories to fair value and amortization of certain intangible assets; and (d) losses or expenses attributable to discontinued operations, plant shut-downs, or other restructuring. Performance Target: «$Amount» in Adjusted GAAP Operating Income for the Performance Period Vesting Date Except as otherwise provided in the Plan or the Executive Restricted Stock Unit Agreement, the Restricted Stock Units vest if and to the extent that (A) the Performance Measure equals or exceeds the Performance Target for the Performance Period, determined pursuant to written certification of the Committee as specified in Section 1.2 of the Executive Restricted Stock Unit Agreement, and (B) your Service is continuous from the Date of Grant through the applicable Vesting Date: Shares Vested Vesting Date «Shares» «1st Vesting Date» «Shares» «2nd Vesting Date» «Shares» «3rd Vesting Date» Payment of Vested Restricted Stock Units Any Restricted Stock Units that vest will be paid following the Vesting Date or following such earlier date as provided in the Executive Restricted Stock Unit Agreement. Additional Terms/Acknowledgments: By accepting this Restricted Stock Unit Award (in the form determined by the Company) you acknowledge receipt of and represent that you have read, understand, accept and agree to the terms and conditions of the following: this Grant Notice, the Executive Restricted Stock Unit Agreement and the Plan (including, but not limited to, the binding arbitration provision in Section 3.7 of the Plan). In addition, by accepting this Restricted Stock Unit Award you agree to all of its terms and conditions and further acknowledge that as of the Date of Grant, this Grant Notice, the Executive Restricted Stock Unit Agreement and the Plan set forth the entire understanding between you and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements pertaining to this particular Restricted Stock Unit Award. Emp #: «ID» Number of Restricted Stock Units: «Shares_Granted»  Qualcomm Incorporated: By: _____________________________________ Dr. Paul E. Jacobs Signature Chairman of the Board and Chief Executive Officer _____________________________________ Dated: «Grant_Date» Date Attachment: Executive Restricted Stock Unit Agreement 1 A copy of the Plan can be obtained from the Stock Administration website, located on the Company’s internal webpage, or you may request a hard copy from the Stock Administration Department.  QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN EXECUTIVE RESTRICTED STOCK UNIT AGREEMENT Pursuant to the Grant Notice and this Executive Restricted Stock Unit Agreement including any country-specific terms set forth in the Addendum to the Agreement (together, the Agreement and the Addendum are referred to herein as the “ Agreement ”), Qualcomm Incorporated (the “ Company ”) has granted you a number of Restricted Stock Units with respect to the number of shares of the Company’s common stock (“ Stock ”) specified in the Grant Notice. You must accept or reject this Restricted Stock Unit Award in the manner specified in the Grant Notice. Capitalized terms not explicitly defined in this Agreement but defined in the Qualcomm Incorporated 2006 Long-Term Incentive Plan (the “ Plan ”) shall have the same definitions as in the Plan. The details of this Restricted Stock Unit Award are as follows: 1. SERVICE AND VESTING. 1.1 SERVICE. As provided in the Plan and notwithstanding any other provision of this Agreement, the Company reserves the right, in its sole discretion, to determine when your Service has terminated, including in the event of any leave of absence or part-time Service and to suspend crediting of Service and vesting of your Restricted Stock Units in the event of any leave of absence or part-time Service. Subject to the foregoing, in the event of termination of your Service (whether or not in breach of local labor laws or later found invalid), the date of termination of your rights (if any) with respect to the Restricted Stock Units as set forth in the Plan and this Agreement will be measured from the date that you are no longer actively employed and will not be extended by any notice period mandated under local law ( e.g. , active employment would not include a period of “garden leave” or similar period pursuant to local law). 1.2 VESTING. Except to the extent that your Restricted Stock Units may vest earlier as provided in Section 1.2(a) through (c), below, your Restricted Stock Units will vest if and to the extent that (A) the Performance Measure equals or exceeds the Performance Target for the Performance Period (as each capitalized term is defined in the Grant Notice), if applicable, and (B) you are in Service on the applicable Vesting Date(s) specified in the Grant Notice. Any determination that the Performance Target is achieved shall be made by written certification of the Committee no later than the November 30th that next follows the end of the Performance Period. Unless and until your Restricted Stock Units vest, you will have no right to payment of any such Restricted Stock Units. In the event of the termination of your Service for any reason, whether voluntary or involuntary, all unvested Restricted Stock Units shall be immediately forfeited without consideration, except as follows: (a) DEATH. If your Service terminates because of your death, the vesting of your Restricted Stock Units shall be accelerated in full effective upon your death. (b) DISABILITY. If your Service terminates because of your Disability, the vesting of your Restricted Stock Units shall be accelerated in full effective as of the date on which your Service terminates due to your Disability. (c) TERMINATION AFTER CHANGE IN CONTROL. If your Service terminates as a result of Termination After Change in Control (as defined below), then the vesting of your Restricted Stock Units shall be accelerated in full effective as of the date on which your Service terminates. For this purpose, “ Termination After Change in Control ” shall mean either of the following events occurring within twenty-four (24) months after a Change in Control (as defined in the Plan): (i) termination by the Participating Company Group of your Service with the Participating Company Group for any reason other than for Cause (as defined below); or (ii) your resignation for Good Reason (as defined below) from all capacities in which you are then rendering Service to the Participating Company Group within a reasonable period of time following the event constituting Good Reason. Notwithstanding any provision herein to the contrary, Termination After Change in Control shall not include any termination of your Service with the Participating Company Group which (A) is for Cause; (B) is a result of your death or Disability; (C) is a result of your voluntary termination of Service other than for Good Reason; or (D) occurs prior to the effectiveness of a Change in Control.  For purposes of this Section 1.2: “ Cause ” shall mean any of the following: (i) your theft, dishonesty, or falsification of any Participating Company documents or records; (ii) your improper use or disclosure of a Participating Company’s confidential or proprietary information; (iii) any action by you which has a detrimental effect on a Participating Company’s reputation or business; (iv) your failure or inability to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (v) any material breach by you of any employment or service agreement between you and a Participating Company, which breach is not cured pursuant to the terms of such agreement; (vi) your conviction (including any plea of guilty or nolo contendere ) of any criminal act which impairs your ability to perform your duties with a Participating Company; or (vii) violation of a material Company policy. “ Good Reason ” shall mean any one or more of the following: (i) without your express written consent, the assignment to you of any duties, or any limitation of your responsibilities, substantially inconsistent with your positions, duties, responsibilities and status with the Participating Company Group immediately prior to the date of the Change in Control; (ii) without your express written consent, the relocation of the principal place of your employment or service to a location that is more than fifty (50) miles from your principal place of employment or service immediately prior to the date of the Change in Control, or the imposition of travel requirements substantially more demanding of you than such travel requirements existing immediately prior to the date of the Change in Control; (iii) any failure by the Participating Company Group to pay, or any material reduction by the Participating Company Group of, (A) your base salary in effect immediately prior to the date of the Change in Control (unless reductions comparable in amount and duration are concurrently made for all other employees of the Participating Company Group with responsibilities, organizational level and title comparable to yours), or (B) your bonus compensation, if any, in effect immediately prior to the date of the Change in Control (subject to applicable performance requirements with respect to the actual amount of bonus compensation earned by you); (iv) any failure by the Participating Company Group to (A) continue to provide you with the opportunity to participate, on terms no less favorable than those in effect for the benefit of any employee or service provider group which customarily includes a person holding the employment or service provider position or a comparable position with the Participating Company Group then held by you, in any benefit or compensation plans and programs, including, but not limited to, the Participating Company Group’s life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which you were participating immediately prior to the date of the Change in Control, or their equivalent, or (B) provide you with all other fringe benefits (or their equivalent) from time to time in effect for the benefit of any employee group which customarily includes a person holding the employment or service provider position or a comparable position with the Participating Company Group then held by you; (v) any breach by the Participating Company Group of any material agreement between you and a Participating Company concerning your employment; or (vi) any failure by the Company to obtain the assumption of any material agreement between you and the Company concerning your employment by a successor or assign of the Company. 2. PAYMENT OF YOUR RESTRICTED STOCK UNITS. 2.1 TIMING OF PAYMENT. Subject to the other terms of the Plan and this Agreement, any Restricted Stock Units that vest and become nonforfeitable in accordance with Section 1.2 will be paid to you as follows: (a) the first installment (or, if the Grant Notice specifies a single Vesting Date, all of the Restricted Stock Units) shall be paid to you no later than 30 days after the later of (i) the earliest Vesting Date specified in the Grant Notice or (ii) the date on which the Committee certifies in writing that the Performance Measure equals or exceeds the Performance Target for the Performance Period; and (b) any subsequent installments shall be paid to you no later than 30 days after the date on which the Restricted Stock Units vest. 2.2 FORM OF PAYMENT. Your vested Restricted Stock Units shall be paid in whole shares of Stock except as provided in Section 5 below regarding fractional shares attributable to Dividend Equivalents.  3. TAX WITHHOLDING. Regardless of any action the Company or the Participating Company that employs you (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Unit Award, including, but not limited to, the grant, vesting or payment of the Restricted Stock Unit Award, the issuance of shares of Stock upon payment of the Restricted Stock Unit Award, the subsequent sale of shares of Stock acquired pursuant to such issuance and the receipt of any dividends and/or any Dividend Equivalents; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Restricted Stock Unit Award to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you have become subject to tax in more than one jurisdiction between the Date of Grant and the date of any relevant taxable event, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. Prior to any relevant tax withholding event, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, you authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following methods, as selected by the Company in its sole discretion: (a) withholding from your wages or any other cash compensation payable to you by the Company and/or the Employer; (b) withholding from proceeds of the sale of shares of Stock acquired upon payment of the Restricted Stock Unit Award, either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf and pursuant to your authorization by your acceptance of this Restricted Stock Unit Award); (c) withholding in shares of Stock to be issued upon payment of the Restricted Stock Unit Award; or (d) any other method allowed by the Plan and applicable law. Notwithstanding the foregoing, if you are subject to the short-swing profit rules of Section 16(b) of the Exchange Act, the Company will withhold in shares of Stock upon the relevant tax withholding event, unless the use of such withholding method is prevented by applicable law or has materially adverse accounting or tax consequences, in which case, the Tax-Related Items withholding obligation may be satisfied by one or a combination of methods (a),(b) and (d) above. If the obligation for Tax-Related Items is satisfied by withholding in shares of Stock as described in subsection (c) herein, for tax purposes, you are deemed to have been issued the full number of shares of Stock subject to the vested Restricted Stock Unit Award, notwithstanding that a number of the shares of Stock are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan. The Fair Market Value of any share of Stock withheld pursuant to this Section 3 shall be equal to the closing price of a share of Stock as quoted on any national or regional securities exchange or market system constituting the primary market for the Stock on the day on which tax withholding is required (or, if there is no closing price on that day, the last trading day prior to that day) or, if the Stock is not listed on a national or regional securities exchange or market system, the value of a share of Stock as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse. Finally, you shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company shall not be required to issue or deliver the shares of Stock or the proceeds of the sale of shares of Stock if you fail to comply with your obligations in connection with the Tax-Related Items. 4. TAX ADVICE. You acknowledge that you may be subject to U.S. federal, state, local and/or non-U.S. income tax and social insurance obligations arising from this Restricted Stock Unit Award. You represent, warrant and acknowledge that the Company has made no warranties or representations to you with respect to the income tax or social insurance consequences of the transactions contemplated by this Agreement, and you are in no manner relying on the Company or its representatives for an assessment of such tax consequences. YOU UNDERSTAND THAT THE TAX AND SOCIAL INSURANCE LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE TAX AND SOCIAL INSURANCE TREATMENT OF ANY RESTRICTED STOCK UNITS. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER PENALTIES. 5. DIVIDEND EQUIVALENTS. If the Board declares a cash dividend on the Company’s Stock, you will be entitled to Dividend Equivalents on the dividend payment date established by the Company equal to the cash dividends payable on the same number of shares of Stock as the number of unvested Restricted Stock Units subject to this Restricted Stock Unit Award on the dividend record date established by the Company. Any such Dividend Equivalents will be in the form of additional Restricted Stock Units, will be subject to the same terms and vesting dates as the underlying Restricted Stock Units, and will be paid at the same time and in the same manner as the underlying Restricted Stock Units originally  subject to this Restricted Stock Unit Award, except that any fractional shares attributable to Dividend Equivalents will be paid in cash within thirty (30) days following the date of payment of the underlying Restricted Stock Unit based on the Fair Market Value on the date of payment of the underlying Restricted Stock Unit (where Fair Market Value shall be as specified in Section 3, above, unless you are resident in a country requiring the use of a specific share valuation methodology for tax purposes, in which case Fair Market Value shall mean the value of a share of Stock calculated in accordance with such methodology). The number of additional Restricted Stock Units credited as Dividend Equivalents on the dividend payment date will be determined by dividing (1) the product of (a) the number of your unvested Restricted Stock Units as of the corresponding dividend record date (including any unvested Restricted Stock Units previously credited as a result of prior payments of Dividend Equivalents) and (b) the per-share cash dividend paid on the dividend payment date, by (2) the per-share Fair Market Value (as specified in Section 3 above) of Stock on the dividend payment date. 6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, no shares of Stock will be issued to you upon vesting or payment of this Restricted Stock Unit Award unless the Stock is then registered under the U.S. Securities Act or, if such Stock is not then so registered, the Company has determined that such vesting and issuance would be exempt from the registration requirements of the U.S. Securities Act. By accepting this Restricted Stock Unit Award, you agree not to sell any of the shares of Stock received under this Restricted Stock Unit Award at a time when applicable laws or Company policies prohibit a sale. 7. TRANSFERABILITY. Prior to the issuance of shares of Stock in payment of all Restricted Stock Units, your Restricted Stock Units shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by your creditors or by your beneficiary, except (a) transfer by will or by the laws of descent and distribution or (b) transfer by written designation of a beneficiary, in a form acceptable to the Company, with such designation taking effect upon your death, provided however, that, if you are employed outside the United States, you are not permitted to designate a beneficiary under this Agreement. All rights with respect to your Restricted Stock Units shall be exercisable during your lifetime only by you or your guardian or legal representative. Prior to actual payment of any Restricted Stock Units, such Restricted Stock Units will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. 8. RESTRICTED STOCK UNIT AWARD NOT A SERVICE CONTRACT. This Restricted Stock Unit Award is not an employment or service contract and nothing in this Agreement, the Grant Notice or the Plan shall be deemed to create in any way whatsoever any obligation on your part to continue in the Service of a Participating Company, or of a Participating Company to continue your Service with the Participating Company. In addition, nothing in this Restricted Stock Unit Award shall obligate the Company, its stockholders, Board, Officers or Employees to continue any relationship which you might have as an Employee or otherwise. 9. RESTRICTIVE LEGEND. Stock issued pursuant to the vesting and/or payment of your Restricted Stock Units may be subject to such restrictions upon the sale, pledge or other transfer of the Stock as the Company and the Company’s counsel deem necessary under applicable law or pursuant to this Agreement. 10. REPRESENTATIONS, WARRANTIES, COVENANTS, AND ACKNOWLEDGMENTS. You hereby agree that in the event the Company and the Company’s counsel deem it necessary or advisable in the exercise of their discretion, the transfer or issuance of the shares of Stock issued pursuant to your Restricted Stock Units may be conditioned upon you making certain representations, warranties, and acknowledgments relating to compliance with applicable securities laws. 11. VOTING AND OTHER RIGHTS. You shall not have any voting rights or any other rights and privileges of a shareholder of the Company unless and until shares of Stock are issued upon payment of your Restricted Stock Units. 12. CODE SECTION 409A. For U.S. taxpayers, it is the intent that the payment of Restricted Stock Units as set forth in this Agreement shall qualify for exemption from or comply with the requirements of Section 409A of the Code, and any ambiguities herein will be interpreted to so qualify or comply. Notwithstanding the foregoing, if it is determined that the Restricted Stock Units fail to satisfy the requirements of the “short-term deferral” exemption and are otherwise deferred compensation subject to Section 409A of the Code, and if you are a “specified employee” (as defined under Section 409A(a)(2)(B)(i) of the Code) as of the date of your “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)), then the issuance of any shares of Stock that would otherwise be made upon the date of the separation from service or within the first six (6) months thereafter will not be made on the originally scheduled date and will instead be issued in a lump sum on the date that is six (6) months and one day after the date of the separation from  service, but only if such delay in the issuance of the shares is necessary to avoid the imposition of additional taxation on you in respect of the shares under Section 409A of the Code. The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify this Agreement as may be necessary to ensure that all payments provided for under this Agreement are made in a manner that qualifies for exemption from or complies with Section 409A of the Code; provided, however, that the Company makes no representation that the payments of Restricted Stock Units provided for under this Agreement will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the payments of Restricted Stock Units provided for under this Agreement. The Company will have no liability to you or any other party if the Restricted Stock Unit Award, the delivery of shares of Stock upon payment of the Restricted Stock Unit Award or other payment hereunder that is intended to be exempt from, or compliant with, Code Section 409A, is not so exempt or compliant or for any action taken by the Company with respect thereto. 13. NOTICES. Any notices provided for in this Agreement, the Grant Notice or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. 14. DATA PRIVACY. You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement, the Grant Notice and any other Restricted Stock Unit Award grant materials by and among, as necessary and applicable, the Participating Companies, for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that the Company and/or the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, and any shares of stock or directorships held in the Company, and details of your Restricted Stock Units or any other entitlement to shares of Stock, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). You understand that Data will be transferred to E*TRADE Financial (“E*TRADE”) or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. You understand that the recipients of Data may be located in the United States or elsewhere, and that the recipients’ country ( e.g. , the United States) may have different data privacy laws and protections than your country. If you are employed outside the United States, you understand that you may request a list with the names and addresses of any potential recipients of Data by contacting the Company’s Stock Administration department. You authorize the Company, E*TRADE and any other possible recipients that may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. If you are employed outside the United States, you understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s Stock Administration department. You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact the Stock Administration department at Qualcomm Incorporated, 5775 Morehouse Drive, San Diego, CA 92121. 15. NATURE OF GRANT. In accepting this Restricted Stock Unit Award, you acknowledge and agree that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, (subject to any limitations set forth in the Plan); (b) the award of Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units or other Awards have been awarded repeatedly in the past; (c) all decisions with respect to future Awards, if any, will be at the sole discretion of the Company;  (d) your participation in the Plan is voluntary; (e) the Restricted Stock Unit Award and the shares of Stock subject to the Restricted Stock Unit Award are not intended to replace any pension rights or compensation; (f) the Restricted Stock Unit Award and the shares of Stock subject to the Restricted Stock Unit Award are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Participating Company; (g) the award of the Restricted Stock Units and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company or any Participating Company; (h) the future value of the underlying shares of Stock is unknown and cannot be predicted with certainty; (i) no claim or entitlement to compensation or damages shall arise from forfeiture of your Restricted Stock Units resulting from termination of your Service (for any reason whatsoever and whether or not in breach of local labor laws or later found invalid), and in consideration of the grant of your Restricted Stock Units to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, waive your ability, if any, to bring any such claim, and release the Company from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claim; (j) the Restricted Stock Unit Award and the benefits evidenced by this Agreement do not create any entitlement, not otherwise specifically provided for in the Plan or provided by the Company in its discretion, to have the Restricted Stock Unit Award or any such benefits transferred to, or assumed by, another company, nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Company’s Stock; (k) the Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Stock; you are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan; and (l) if you are employed or providing services outside the United States, (i) the Restricted Stock Unit Award and the shares of Stock subject to the Restricted Stock Unit Award are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and which are outside the scope of your employment or service contract, if any; and (ii) neither the Company, the Employer nor any Participating Company is liable for any foreign exchange fluctuation between your local currency and the United States Dollar that may affect the value of this Restricted Stock Unit Award. 16. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of California, U.S.A., as if the Agreement were between California residents and as if it were entered into and to be performed entirely within the State of California. 17. IMPOSITION OF OTHER REQUIREMENTS. The Company reserves the right to impose other requirements on your participation in the Plan, on your Restricted Stock Units, and on any shares of Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. 18. ARBITRATION. Any dispute or claim concerning any Restricted Stock Units granted (or not granted) pursuant to the Plan and any other disputes or claims relating to or arising out of the Plan shall be fully, finally and exclusively resolved by binding arbitration conducted by the American Arbitration Association pursuant to the commercial arbitration rules in San Diego, California. By accepting this Restricted Stock Unit Award, you and the Company waive your respective rights to have any such disputes or claims tried by a judge or jury.  19. AMENDMENT. This Restricted Stock Unit Award may be amended as provided in the Plan at any time, provided no such amendment may adversely affect this Restricted Stock Unit Award without your consent unless such amendment is necessary to comply with any applicable law or government regulation, or is contemplated in Section 12 hereof. No amendment or addition to this Agreement shall be effective unless in writing or in such electronic form as may be designated by the Company. 20. GOVERNING PLAN DOCUMENT. This Restricted Stock Unit Award is subject to this Agreement, the Grant Notice and all the provisions of the Plan, the provisions of which are hereby made a part of this Agreement, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement, the Grant Notice and those of the Plan, the provisions of the Plan shall control. 21. LANGUAGE. If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control. 22. SEVERABILITY. If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible. 23. DESCRIPTION OF ELECTRONIC DELIVERY . The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement (including any Addendum), and any reports of the Company provided generally to the Company’s stockholders, may be delivered to you electronically. In addition, if permitted by the Company, you may electronically accept and acknowledge the Grant Notice and/or this Agreement and/or deliver such documents to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic acknowledgement, acceptance and/or delivery may include but do not necessarily include use of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via electronic mail (“e-mail”) or such other means specified by the Company. You hereby consent to receive the above-listed documents by electronic delivery and, if permitted by the Company, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, as set forth herein. 24. ADDENDUM. Notwithstanding any provisions in this Agreement, the Restricted Stock Unit Award shall be subject to any special terms and conditions set forth in any Addendum to this Agreement for your country. Moreover, if you relocate to one of the countries included in the Addendum, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Addendum constitutes part of this Agreement. 25. WAIVER. The waiver by the Company with respect to your (or any other Participant’s) compliance of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of such party of a provision of this Agreement. 26. REPAYMENT/FORFEITURE. Any benefits you may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with (a) any applicable listing standards of a national securities exchange adopted in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder, (b) similar rules under the laws of any other jurisdiction and (c) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you.  QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN EXECUTIVE RESTRICTED STOCK UNIT AGREEMENT COUNTRY ADDENDUM The additional terms and conditions set forth below are specifically incorporated into the Executive Restricted Stock Unit Agreement (together, the Agreement and this Addendum are referred to herein as the “Agreement”). These terms and conditions govern the Restricted Stock Units granted to you under the Plan if you are working in one of the countries listed below. If you are a citizen or a resident of a country other than the one in which you are currently working or move to another country after the Date of Grant, the Company shall, in its discretion, determine to what extent the terms and conditions contained herein shall be applicable to you. Due to the complexities of legal, regulatory and tax issues, you are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your individual situation, or if you have any questions regarding the terms and conditions contained herein. Certain capitalized terms used but not defined in this Addendum have the meanings set forth in the Plan and/or the Executive Restricted Stock Unit Agreement. ALL NON-U.S. COUNTRIES Definition of Disability If you are on the payroll of a Participating Company outside of the United States, for purposes of this Agreement the following provision shall replace the definition of “Disability” set forth in the Plan: “Disability” shall mean your inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months. The Company shall have sole discretion to decide whether you have presented sufficient proof that you have a Disability as defined by this Agreement. ARGENTINA Securities Law Notice By accepting the Restricted Stock Unit Award, you acknowledge that you understand that the Restricted Stock Units and the shares of Stock to be issued pursuant to the Restricted Stock Units are offered as a private transaction. This offering is not subject to supervision by any Argentine governmental authority. AUSTRIA Sale of Shares of Stock Consent As set forth in Section 3 of the Agreement, you understand that the Company may, at its discretion, satisfy the withholding obligations for all Tax-Related Items, in whole or in part, by methods including withholding from proceeds of the sale of shares of Stock acquired upon payment of the Restricted Stock Unit Award, either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf and pursuant to your authorization by your acceptance of this Restricted Stock Unit Award). By accepting this Award, you hereby consent to the sale of a portion of any shares of Qualcomm Stock issued to you upon vesting of the Restricted Stock Units and withholding from the proceeds of that sale to satisfy all applicable Tax-Related Items withholding obligations related to your participation in the Plan and legally applicable to you. BRAZIL Compliance Notice By accepting the Restricted Stock Unit Award, you agree to comply with all applicable Brazilian laws and pay any and all applicable taxes associated with the vesting of the Restricted Stock Units and the sale of Stock obtained as a result of the vesting of the Restricted Stock Units. You agree that, for all legal purposes, (a) the benefits provided to you under the Plan are the result of commercial transactions unrelated to your employment; (b) the Plan is not a part of the terms and conditions of your employment; and (c) the income from the Restricted Stock Units, if any, is not part of your remuneration from employment.  CANADA Form of Payment Due to Canadian tax law, you are prohibited from tendering shares of the Company’s Stock to pay any Tax-Related Items in connection with the Restricted Stock Units. Termination of Service The following provision supplements Section 1.1 of the Agreement: In the event of termination of your Service (whether or not in breach of local labor laws or later found invalid), the date of termination of your rights (if any) with respect to the Restricted Stock Units as set forth in the Plan and this Agreement will be measured from: (i) the date that you are no longer actively employed, or at the discretion of the Committee, (ii) the date you receive notice of termination from the Employer, if earlier than (i), regardless of any notice period or period of pay in lieu of such notice required under local law (including, but not limited to statutory law, regulatory law and/or common law). The following provisions apply if you are a resident of Quebec : Consent to Receive Information in English The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English. Les parties reconnaissent avoir expressément souhaité que la convention («Agreement»), ainsi que tous les documents, avis et procédures judiciares, éxécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à la présente convention, soient rédigés en langue anglaise. Authorization to Release Necessary Personal Information The following provision supplements Section 14 of the Agreement: You hereby authorize the Company and the Company’s representatives to discuss and obtain all relevant information from all personnel, professional or non-professional, involved in the administration of the Plan. You further authorize the Company and the Participating Companies to disclose and discuss such information with their advisors. You also authorize the Company and the Participating Companies to record such information and to keep such information in your employment file. CHINA The following provisions govern your participation in the Plan if you are a national of the People’s Republic of China resident in mainland China: Mandatory Sale Restriction Due to regulatory requirements, you acknowledge and agree that you must sell any shares of Stock issued to you upon vesting of the Restricted Stock Units within thirty (30) days following the termination of your Service, or within any other such time frame as may be required by the PRC State Administration of Foreign Exchange. You agree that if you continue to hold any of such shares after this time, the shares will be sold by the Company’s designated broker on your behalf at the instruction of the Company. Therefore, by accepting the Restricted Stock Unit Award, you acknowledge that you understand and agree that the Company is authorized to, and may in its sole discretion, instruct its designated broker to assist with the mandatory sale of Stock (on your behalf pursuant to this authorization) and you expressly authorize the Company’s designated broker to complete the sale of such Stock. You acknowledge that the Company’s designated broker is under no obligation to arrange for the sale of the Stock at any particular price. Upon the sale of the Stock, the proceeds, less any Tax-Related Items and brokerage fees or commissions, will be remitted to you in accordance with any applicable exchange control laws and regulations. Exchange Control Restrictions By accepting the Restricted Stock Unit Award, you acknowledge that you understand and agree that, due to exchange control laws in China, you are not permitted to transfer any shares of Stock acquired under the Plan out of your account established with the Company’s designated broker, and that you will be required to repatriate all proceeds due to you from  your participation in the Plan, including any cash dividends paid by the Company on shares of Stock or any proceeds from the sale of such Stock (together, the “cash proceeds”) to China. In this regard, you acknowledge and agree that, due to these repatriation requirements, you are not eligible to participate in any automatic dividend reinvestment program. You further understand that, under local law, such repatriation of the cash proceeds will need to be effected through a special exchange control account established by the Company, the Employer, or a Participating Company in China, and you hereby consent and agree that the cash proceeds may be transferred to such special account prior to being delivered to you. The cash proceeds may be paid in U.S. dollars or local currency at the Company’s discretion. If the cash proceeds are paid in U.S. dollars, you understand that you may be required to set up a U.S. dollar bank account in China so that the cash proceeds may be deposited into this account. If the cash proceeds are converted to local currency, you acknowledge that the Company is under no obligation to secure any currency conversion rate, and that it may face delays in converting the proceeds to local currency due to exchange control restrictions in China. You acknowledge and agree that you bear the risk of any currency conversion rate fluctuation between the date that the cash dividend is paid and/or the shares of Stock are sold, as applicable, and the date of conversion of the cash proceeds to local currency. You further agree to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in China. Finally, you acknowledge and agree that the Company’s offer of participation in the Plan to you is contingent upon your agreement to abide by the restrictions set forth herein and that any violation of these restrictions will constitute a material breach of the terms of this Agreement, which will affect your ability to participate in the Plan. FRANCE Consent to Receive Information in English By accepting the Restricted Stock Units, you confirm having read and understood the Plan and the Agreement, which were provided in the English language. You accept the terms of those documents accordingly. En acceptant cette attribution gratuite d’actions, vous confirmez avoir lu et comprenez le Plan et ce Contrat, incluant tous leurs termes et conditions, qui ont été transmis en langue anglaise. Vous acceptez les dispositions de ces documents en connaissance de cause. HONG KONG Securities Law Notice Warning: The Restricted Stock Units and any shares of Stock to be issued pursuant to the Restricted Stock Unit Award do not constitute a public offering of securities under Hong Kong law and are available only to Employees, Directors and Consultants of the Company and its Participating Companies. The Plan, the Agreement, and other incidental communication materials have not been prepared in accordance with and are not intended to constitute a ‘prospectus’ for a public offering of securities under the applicable companies and securities legislation in Hong Kong, and the documents have not been reviewed by any regulatory authority in Hong Kong. The Agreement and the incidental communication materials are intended only for the personal use of each Plan Participant and not for distribution to any other person. If you have any doubt about any of the contents of the Agreement or the Plan, you should obtain independent professional advice. Sale of Shares In the event your Restricted Stock Units vest and shares of Stock are issued to you within six months of the Date of Grant, you agree that you will not dispose of the Stock prior to the six-month anniversary of the Date of Grant. INDIA Exchange Control Restrictions By accepting the Restricted Stock Unit Award, you acknowledge that you understand and agree that any proceeds you may receive from the sale of shares of Stock or from any dividends paid on such Shares must be repatriated to India within a reasonable time following the sale ( i.e. , within 90 days). You must maintain the foreign inward remittance certificate received from the bank where the foreign currency is deposited in the event that the Reserve Bank of India or the Employer requests proof of repatriation. It is your responsibility to comply with applicable exchange control laws in India. ISRAEL  Grant Subject to Terms and Conditions of Israeli Sub-Plan The Restricted Stock Unit Award is offered to you subject to, and in accordance with, the terms of the Plan and the Israeli Sub-Plan to the Qualcomm Incorporated 2006 Long-Term Incentive Plan (the “Sub-Plan”). Upon vesting of the Restricted Stock Units, the Stock shall be controlled by the Trustee (as defined in Section 2.2 of the Sub-Plan) for your benefit for at least the Required Minimum Trust Period (as defined in Section 2.2 of the Sub-Plan). Notwithstanding the foregoing, in the event you elect to release any shares of Stock acquired upon vesting of the Restricted Stock Units prior to the conclusion of the Required Minimum Trust Period, the tax consequences under Section 102 of the Israeli Income Tax Ordinance [New Version], 1961 shall apply to and shall be borne solely by you, as further set forth in the Sub-Plan. By accepting the Restricted Stock Unit Award, you agree to be bound by the terms of the Plan, the Sub-Plan, and the Agreement and upon request of the Company or the Employer, to provide written consent to the terms of any tax ruling or agreement obtained by the Company or the Employer with regard to the Plan and the Sub-Plan. The Restricted Stock Unit Award is intended to be a 102 Capital Gains Track Grant (as defined in Section 2.2 of the Sub-Plan) that qualifies for the 102 Capital Gains Track (as defined in Section 2.2 of the Sub-Plan) tax treatment. Notwithstanding the foregoing, by accepting the Restricted Stock Unit Award, you acknowledge that the Company cannot guarantee or represent that the 102 Capital Gains Track tax treatment will apply to the Restricted Stock Unit Award. The Company may at its sole discretion replace the Trustee from time to time and instruct the transfer of all Restricted Stock Units and shares of Stock held and/or administered by such Trustee at such time to its successor and the provisions of your Grant Notice, this Agreement and the Trust Agreement shall apply to the new Trustee mutatis mutandis . ITALY Data Privacy Notice The following provision replaces Section 14 of the Agreement in its entirety: You understand that the Employer, the Company and any Participating Company may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance or other identification number, salary, nationality, job title, any shares of Stock or directorships held in the Company, details of all Options, Restricted Stock Units, or any other entitlement to shares of Stock awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the exclusive purpose of implementing, managing and administering the Plan (“Data”) and in compliance with applicable laws and regulations. You also understand that providing the Company with Data is necessary for the performance of the Plan and that your refusal to provide such Data would make it impossible for the Company to perform its contractual obligations and may affect your ability to participate in the Plan. The Controller of personal data processing is QUALCOMM Incorporated, with registered offices at 5775 Morehouse Drive, San Diego, California 92121, U.S.A., and, pursuant to Legislative Decree no. 196/2003, its representative in Italy is QUALCOMM Europe with registered offices in 3rd Floor, Piazza Indipendenza 11/B Rome, Italy. You understand that your Data will not be publicized, but it may be transferred to E*Trade Financial, banks, and other financial institutions or brokers involved in the management and administration of the Plan. You further understand that the Company, the Employer or a Participating Company will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan, and that the Company, your Employer or a Participating Company may further transfer Data to third parties assisting the Company in the implementation, administration and management of the Plan, including any requisite transfer to E*Trade Financial or another third party with whom you may elect to deposit any shares of Stock acquired under the Plan. Such recipients may receive, possess, use, retain and transfer the Data in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan. You understand that these recipients may be located in the European Economic Area, or elsewhere, such as the U.S. or Asia. Should the Company exercise its discretion in suspending all necessary legal obligations connected with the management and administration of the Plan, it will delete your Data as soon as it has accomplished all the necessary legal obligations connected with the management and administration of the Plan. You understand that Data processing related to the purposes specified above shall take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to Legislative Decree no. 196/2003.  The processing activity, including communication, the transfer of your Data abroad, including outside of the European Economic Area, as herein specified and pursuant to applicable laws and regulations, does not require your consent thereto as the processing is necessary to performance of contractual obligations related to implementation, administration and management of the Plan. You understand that, pursuant to Section 7 of the Legislative Decree no. 196/2003, you have the right to, including but not limited to, access, delete, update, ask for rectification of your Data and stop, for legitimate reason, the Data processing. Further, you are aware that your Data will not be used for direct marketing purposes. In addition, the Data provided can be reviewed and questions or complaints can be addressed by contacting your human resources department. Plan Document Acknowledgment By accepting the Restricted Stock Unit Award, you acknowledge that you have received a copy of the Plan and the Agreement and have reviewed the Plan and the Agreement, including this Addendum, in their entirety and fully understand and accept all provisions of the Plan and the Agreement, including this Addendum. You further acknowledge that you have read and specifically and expressly approve the following clauses in the Agreement: Section 1: Service and Vesting; Section 3: Tax Withholding; Section 8: Restricted Stock Units Not a Service Contract; Section 15: Nature of Grant; Section 16: Applicable Law; and the sections applicable to your country contained in the Addendum. MEXICO Labor Law and Plan Document Acknowledgment By accepting the Restricted Stock Unit Award, you acknowledge that you have received a copy of the Plan and the Agreement, have reviewed these documents in their entirety and fully understand and accept all provisions of the Plan and the Agreement. In addition, in accepting the Restricted Stock Unit Award, you further acknowledge that you understand and agree that: (a) your participation in the Plan does not constitute an acquired right; (b) the Plan and your participation in the Plan is offered by the Company on a wholly discretionary basis, the Company reserves the absolute right to amend the Plan or discontinue it at any time without any liability to you and any such amendment or termination of the Plan shall not constitute a change or impairment of the terms and conditions of your employment or service relationship; (c) your participation in the Plan is voluntary; (d) the Restricted Stock Unit Award granted to you under the Plan is not related to your salary or any other contractual benefits provided to you by your Employer; (e) the Company, with registered offices at 5775 Morehouse Drive, San Diego, California 92121, U.S.A., is solely responsible for the administration of the Plan and your participation in the Plan and any acquisition of shares of Stock does not, in any way, establish an employment or service relationship between you and the Company since you are participating in the Plan on a wholly commercial basis and the Employer in Mexico is your sole employer, nor does it establish any rights between you and your Employer; and (f) neither the Company, your Employer nor any Subsidiary Corporation is responsible for any decrease in the value of the shares of Stock that you may acquire under the Plan. Finally, you hereby declare that you do not reserve to yourself any action or right to bring any claim against the Employer, the Company or any Participating Company for any compensation or damages as a result of your participation in the Plan and that you therefore grant a full and broad release to the Employer and any Participating Company with respect to any claim that may arise. Spanish Translation Reconocimiento de la Ley Laboral y de la Recepción de Documentos Al aceptar el Premio de Unidades de Acciones Restringidas, usted acepta y reconoce haber recibido una copia del Plan y del Contrato; que ha leído y entendido en su totalidad dichos documentos y que por lo tanto los acepta en sus términos. Aunado a lo anterior, al aceptar el Premio de Unidades de Acciones Restringidas, usted entiende y reconoce que: (a) su participación en el Plan no constituye un derecho adquirido; (b) el Plan y su participación en el mismo es ofrecido por la Empresa de manera estrictamente discrecional, la Empresa se reserva el derecho absoluto a modificar el Plan o descontinuarlo en cualquier momento y sin responsabilidad para usted y cualquier modificación o terminación del Plan no deberá constituir un cambio o impedimento respecto de los términos y condiciones de su empleo o relación de servicio (c) su participación en el Plan es voluntaria; (d) el Premio de Unidades de Acciones Restringidas otorgado a usted derivado del Plan no se encuentra relacionado con su salario o cualquier otra prestación contractual proporcionada a usted por la Empresa; (e) la Empresa, con  oficinas registradas en 5775 Morehouse Drive, San Diego, California 92121, EE.UU., es la única responsable de la administración del Plan; su participación en el Plan y la adquisición de las Acciones no establece, de ninguna manera, una relación laboral entre usted y la Empresa debido a que usted participa en el Plan en una base completamente comercial y su único Patrón es y su único patrón lo es el Patron, ni establece derecho alguno entre usted y su Patrón; y (f) que la Empresa, su Patrón o las Compañías Subsidiarias no son responsables por la disminución en el valor de las Acciones adquiridas durante su participación en el Plan. Por último, usted declara que no se reserva ninguna acción o derecho por ejercer en contra de su Patrón, la Empresa o cualquier Compañía Subsidiaria por cualquier compensación o daños como resultado de su participación en el Plan y que por lo tanto usted en este acto exonera a su Patrón, la Empresa o cualquier Compañía Subsidiaria respecto de cualquier demanda o reclamación que pudiera derivar del Plan. PHILIPPINES Securities Law Notice The securities being offered or sold herein have not been registered with the Philippines Securities and Exchange Commission under its Securities Regulation Code (the “SRC”). Any future offer or sale thereof is subject to registration requirements under the SRC unless such offer or sale qualifies as an exempt transaction. Further, you will not be permitted to receive shares of Stock upon vesting of the Restricted Stock Units unless or until the Company, the Employer, or a Participating Company in the Philippines has obtained all necessary approvals or registrations or has submitted all filings required under Philippines law. If the Company, the Employer, or a Participating Company in the Philippines is unable to obtain such approval or registration or does not submit such filings, you acknowledge that you may not receive shares of Stock upon vesting of the Restricted Stock Units and you will not receive any compensation or benefits in lieu of the Restricted Stock Units. You acknowledge that you are permitted to sell shares of Stock acquired under the Plan through the designated Plan broker appointed by the Company (or such other broker to whom you may transfer the shares of Stock), provided that such sale takes place outside of the Philippines through the facilities of the NASDAQ Global Select Market, on which the shares are listed. RUSSIA Securities Law Notice The Agreement, the Grant Notice, the Plan and all other materials you may receive regarding your participation in the Plan do not constitute advertising or an offering of securities in Russia. Absent any requirement under local law, the issuance of securities pursuant to the Plan has not and will not be registered in Russia and therefore, the securities described in any Plan-related documents may not be used for offering or public circulation in Russia. The delivery of Plan documents and the issuance of shares of Stock shall conform to the provisions of Section 6 of the Agreement and this Section of the Addendum. U.S. Transaction By accepting the Restricted Stock Unit Award, you acknowledge that you understand and agree that any Stock to be issued upon vesting of the Restricted Stock Units shall be delivered to you through a brokerage account in the U.S. You may hold the Stock in your brokerage account in the U.S.; however, in no event will Stock issued to you under the Plan be delivered to you in Russia. Further, you agree that you are not permitted to sell the Stock directly to other Russian legal entities or individuals. Mandatory Sale Restriction Due to regulatory requirements, the Company reserves the right to require the immediate sale of any Stock to be issued to you upon vesting of the Restricted Stock Units. By accepting the Restricted Stock Unit Award, you acknowledge that you understand and agree that the Company is authorized to, and may, in its sole discretion, instruct its designated broker to assist with the mandatory sale of Stock issued to you upon vesting of the Restricted Stock Units (on your behalf pursuant to this authorization) and you expressly authorize the Company’s designated broker to complete the sale of such Stock. You acknowledge that the Company’s designated broker is under no obligation to arrange for the sale of the Stock at any particular price. Upon the sale of the Stock, you will receive the proceeds, less any Tax-Related Items and brokerage fees or commissions.  SINGAPORE Securities Law Notice The Restricted Stock Unit Award is being made pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”). The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that the Restricted Stock Unit Award is subject to section 257 of the SFA and you will not be able to make (a) any subsequent sale of the shares of Stock in Singapore or (b) any offer of such subsequent sale of the shares of Stock in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA (Chapter 289, 2006 Ed.). SOUTH AFRICA Tax Obligations By accepting the Restricted Stock Units, you agree to notify your Employer of the amount of gain realized upon the vesting of the Restricted Stock Units. You will be responsible for paying any difference between your actual tax liability and any amount withheld by your Employer. Exchange Control You understand and agree that you are solely responsible for complying with applicable South African exchange control regulations. Because the exchange control regulations change frequently and without notice, you should consult a legal advisor prior to the sale of shares of Stock to ensure compliance with current regulations. It is your responsibility to comply with South African exchange control laws, and neither the Company, the Employer, nor any Participating Company will be liable for any fines or penalties for your failure to do so. SPAIN Nature of Grant This provision supplements Section 8 and Section 15 of the Agreement: By accepting the Restricted Stock Units, you consent to participation in the Plan and acknowledge that you have received a copy of the Plan. You understand that the Company has unilaterally, gratuitously, and in its sole discretion decided to grant Restricted Stock Units under the Plan to individuals who may be employees of the Company or Participating Companies throughout the world. The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not bind the Company or a Participating Company, other than to the extent set forth in the Agreement. Consequently, you understand that the Restricted Stock Units are offered on the assumption and condition that the Restricted Stock Units and any shares of Stock acquired as a result of the vesting of such Restricted Stock Units under the Plan are not part of any employment contract with the Company, the Employer, or any Participating Company and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation), or any other right whatsoever. Further, you understand and agree that, except to the extent expressly permitted under Section 1.2 of the Agreement or otherwise expressly provided for by the Company at the Date of Grant, the Restricted Stock Units will be cancelled without entitlement to shares of Stock or to any amount as indemnification if you terminate employment by reason of, including, but not limited to: resignation, retirement, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without cause, individual or collective layoff on objective grounds, whether adjudged to be with cause or adjudged or recognized to be without cause, material modification of the terms of employment under Article 41 of the Workers’ Statute, relocation under Article 40 of the Workers’ Statute, Article 50 of the Workers’ Statute, unilateral withdrawal by the Employer, and under Article 10.3 of Royal Decree 1382/1985. You understand that this offer would not be made but for the assumptions and conditions referred to above; thus, you acknowledge and freely accept that, should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant of or right to the Restricted Stock Units shall be void. UNITED ARAB EMIRATES Securities Law Notice The Restricted Stock Unit Award is only being offered to eligible Employees, Consultants and Directors and is in the nature of providing equity incentives to Employees, Consultants and Directors of a Participating Company in the United Arab  Emirates. Any documents related to the Restricted Stock Unit Award, including the Plan, the Grant Notice, the Agreement and any other grant-related documents (“Restricted Stock Unit Documents”), are intended for distribution only to such Employees, Consultants and Directors and must not be delivered to, or relied on by, any other person. The relevant securities authorities have no responsibility for reviewing or verifying any Restricted Stock Unit Documents. United Arab Emirates securities or financial/economic authorities have not approved the Restricted Stock Unit Documents, nor taken steps to verify the information set out in them, and thus, are not responsible for their content. You, as a prospective stockholder, should conduct your own due diligence on the securities. If you do not understand the contents of the Restricted Stock Unit Documents, you should consult an authorized financial advisor. UNITED KINGDOM Tax Obligations The following supplements Section 3 of the Agreement: If payment or withholding of the income tax due is not made within 90 days of the event giving rise to the Tax-Related Items (the “Due Date”) or such other period specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, the amount of any uncollected income tax shall constitute a loan owed by you to the Company and/or your Employer, effective on the Due Date. You agree that the loan will bear interest at the then-current HM Revenue and Customs Official Rate (“HMRC”), it will be immediately due and repayable, and the Company and/or your Employer may recover it at any time thereafter by any of the means referred to in Section 3 of the Agreement. You also authorize the Company to withhold the transfer of any shares of Stock unless and until the loan is repaid in full. Notwithstanding the foregoing, if you are a director or executive officer (within the meaning of Section 13(k) of the Exchange Act) of the Company, the terms of this Section will not apply to you. In the event that Tax-Related Items are not collected from or paid by a director or executive officer of the Company by the Due Date, the amount of any uncollected income tax may constitute a benefit to such director or executive officer on which additional income tax and National Insurance Contributions may be payable. You acknowledge that you will be responsible for reporting and paying any income tax and National Insurance Contributions due on this additional benefit directly to the HMRC under the self-assessment regime. VIETNAM Mandatory Sale Restriction Due to regulatory requirements, the Company reserves the right to require the immediate sale of any Stock to be issued to you upon vesting of the Restricted Stock Units. By accepting the Restricted Stock Unit Award, you acknowledge that you understand and agree that the Company is authorized to, and may in its sole discretion, instruct its designated broker to assist with the mandatory sale of Stock issued to you upon vesting of the Restricted Stock Units (on your behalf pursuant to this authorization) and you expressly authorize the Company’s designated broker to complete the sale of such Stock. You acknowledge that the Company’s designated broker is under no obligation to arrange for the sale of the Stock at any particular price. Upon the sale of the Stock, you will receive the proceeds, less any Tax-Related Items and brokerage fees or commissions. Exchange Control Restrictions By accepting the Restricted Stock Unit Award, you acknowledge that you understand and agree that all cash proceeds from the sale of shares acquired under the Plan must be immediately repatriated to Vietnam. Such repatriation of proceeds may need to be effectuated through a special exchange control account established by the Company or your Employer. Further, you consent and agree that the cash proceeds may be transferred to such special account prior to being delivered to you. EXHIBIT 10.119 QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN NON-EMPLOYEE DIRECTOR DEFERRED STOCK UNIT GRANT NOTICE QUALCOMM Incorporated (the “Company”), pursuant to its 2006 Long-Term Incentive Plan (the “Plan”) hereby grants to the Participant named below the number of Deferred Stock Units set forth below, each of which is a bookkeeping entry representing the equivalent in value of one (1) share of the Company’s common stock. The Non-Employee Director Deferred Stock Unit Award is subject to all of the terms and conditions as set forth herein and the Non-Employee Director Deferred Stock Unit Agreement (attached hereto) and the Plan 1 which are incorporated herein in their entirety. Capitalized terms not otherwise defined in this Grant Notice or the Non-Employee Director Deferred Stock Unit Agreement shall have the meaning set forth in the Plan. Participant: «First_Name» «Last_Name» Grant No.: «Number» Date of Grant: «DSU_Date» Vesting «Deferred retainer» « This Deferred Stock Unit Award is fully vested on the Date of Grant. » «Annual award» « This Deferred Stock Unit Award vests on the earliest to occur of the following events provided your Service is continuous from the Date of Grant through the applicable date: (1) the one-year anniversary of the Date of Grant, (2) the date of the next annual meeting of stockholders of the Company that occurs after the Date of Grant, (3) your death, (4) your Disability, or (5) a Change in Control. » Settlement The Deferred Stock Units will be settled and paid as provided in the Non-Employee Director Deferred Stock Unit Agreement on, or as soon as practicable following, but in no event later than thirty (30) days after [ specify date of 3 years from grant or later date specified in valid election ]. However, as provided in Section 2.1 of the Deferred Stock Unit Agreement, these Deferred Stock Units may be settled earlier upon the termination of your Board service and certain other events. Additional Terms/Acknowledgments: The Participant acknowledges (in the form determined by the Company) receipt of, and represents that the Participant has read, understands, accepts and agrees to the terms and conditions of the following: this Grant Notice, the Non-Employee Director Deferred Stock Unit Agreement and the Plan (including, but not limited to, the binding arbitration provision in Section 3.7 of the Plan). Participant hereby accepts the Deferred Stock Unit Award subject to all of its terms and conditions and further acknowledges that as of the Date of Grant, this Grant Notice, the Non-Employee Director Deferred Stock Unit Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements pertaining to this particular Deferred Stock Unit Award. QUALCOMM Incorporated: Non-Employee Director: By: _____________________________________ Dr. Paul E. Jacobs Signature Chairman of the Board and Chief Executive Officer _____________________________________ Dated: «DSU_Date» Date Attachment: Non-Employee Director Deferred Stock Unit Agreement Emp #: «ID» Shares Subject to Deferred Stock Unit: «Shares_Granted»  QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN NON-EMPLOYEE DIRECTOR DEFERRED STOCK UNIT AGREEMENT Pursuant to the Grant Notice and this Non-Employee Director Deferred Stock Unit Agreement (the “Agreement”), Qualcomm Incorporated (the “Company”) has granted you a Deferred Stock Unit Award with respect to the number of shares of the Company’s common stock (“Stock”) indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement but defined in the Qualcomm Incorporated 2006 Long-Term Incentive Plan (the “Plan”) shall have the same definitions as in the Plan. The details of this Deferred Stock Unit Award are as follows: 1. SERVICE AND VESTING. 1.1 SERVICE. As provided in the Plan and notwithstanding any other provision of this Agreement, the Company reserves the right, in its sole discretion, to determine when your Service has terminated. 1.2 VESTING. Except as otherwise provided in the Plan or this Agreement, this Deferred Stock Unit Award will vest on the vesting dates provided in the Grant Notice (the “Vesting Dates”). Except as otherwise expressly set forth in the Grant Notice, in the event of the termination of your Service for any reason, whether voluntary or involuntary, all unvested Deferred Stock Units shall be immediately forfeited without consideration. Unless and until the Deferred Stock Units vest on the applicable Vesting Dates, you will have no right to payment of any such Deferred Stock Units. 2. SETTLEMENT OF THE DEFERRED STOCK UNITS. 2.1 TIMING OF PAYMENT. The “Settlement Date” of your vested Deferred Stock Units shall be the earliest to occur of the following: (a) the third anniversary of the Date of Grant specified in the Grant Notice, or such later date as you may elect in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); (b) your separation from Service, to the extent such separation constitutes a “separation from service” pursuant to Section 409A of the Code; (c) your death; (d) your Disability, to the extent such Disability constitutes a “disability” pursuant to Section 409A of the Code; or (e) a Change in Control, to the extent such Change in Control constitutes a “change in ownership or effective control of the corporation” with respect to the Company pursuant to Section 409A of the Code. 2.2 FORM OF PAYMENT. Your vested Deferred Stock Units shall be paid in whole shares of Stock (in cash as to fractional shares) on, or as soon as practicable following, but in no event later than thirty (30) days after, the Settlement Date, except as otherwise specified below. To assist you in satisfying federal, state, local, or non-U.S. income tax obligations arising from your Deferred Stock Unit Award, the Company will allow you to make a one-time irrevocable election no later than (60) days after the Date of Grant specified in the Grant Notice, authorizing the Company to pay cash in lieu of Stock with respect to a percentage of the Deferred Stock Units equal to the sum of (i) the federal tax rate for supplemental wages in effect under Section 1(i)(2) of the Code and (ii) the California tax rate for supplemental wages other than stock options and bonus payments in effect under Section 18663(b)(1) of the Revenue and Taxation Code (the sum of (i) and (ii) being hereinafter referred to as the “Tax Percentage”). The amount of cash paid in lieu of such shares of Stock shall be equal to (I) the number of Deferred Stock Units (rounded up to the nearest whole Deferred Stock Unit) corresponding to the Tax Percentage, multiplied by (II) if the Stock is listed on a national or regional securities exchange or market system, the closing price of a share of Stock as quoted on such national or regional securities exchange or market system constituting the primary market for the Stock on the last trading day prior to the Settlement Date, or, if the Stock is not listed on a national or regional securities exchange or market system, the price of a share of Stock as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse (the price determined under this clause (II) being hereinafter referred to for purposes of this Agreement as the “Fair Market Value of the Stock”). Any election to receive a portion of the Deferred Stock Unit Award paid in cash as specified in this Section 2.2, shall not be effective with respect to any Settlement Date that occurs within six (6) months after the later of the date of the election or the Date of the Grant specified in the Grant Notice.  3. TAX ADVICE. You acknowledge that you may be subject to federal, state, local, and non-U.S. income tax obligations arising from your Deferred Stock Unit Award. You represent, warrant and acknowledge that the Company has made no warranties or representations to you with respect to the income tax consequences of the transactions contemplated by this Agreement, and you are in no manner relying on the Company or its representatives for an assessment of such tax consequences. YOU UNDERSTAND THAT THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE TAX TREATMENT OF ANY DEFERRED STOCK UNITS. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER PENALTIES. 4. DIVIDEND EQUIVALENTS. If the Board declares a cash dividend on the Company’s Stock, you will be entitled to Dividend Equivalents on the dividend payment date established by the Company equal to the cash dividends payable on the same number of shares of Stock as the number of Deferred Stock Units subject to this Deferred Stock Unit Award on the dividend record date established by the Company. Any such Dividend Equivalents will be in the form of additional Deferred Stock Units, will be subject to the same terms and vesting dates as the underlying Deferred Stock Units, and will be paid at the same time and in the same manner as the underlying Deferred Stock Units originally subject to this Deferred Stock Unit Award, except that any fractional shares attributable to Dividend Equivalents will be paid in cash within thirty (30) days following the date of payment of the underlying Deferred Stock Unit based on the Fair Market Value (as specified in Section 2.2, above) on the date of payment of the underlying Deferred Stock Unit. The number of additional Deferred Stock Units credited as Dividend Equivalents on the dividend payment date will be determined by dividing (1) the product of (a) the number of your Deferred Stock Units as of the corresponding dividend record date (including any Deferred Stock Units previously credited as a result of prior payments of Dividend Equivalents) and (b) the per-share cash dividend paid on the dividend payment date, by (2) the per-share Fair Market Value (as specified in Section 2.2 above) of Stock on the dividend payment date. 5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, no shares of Stock will be issued to you upon vesting and settlement of this Deferred Stock Unit Award unless the Stock is then registered under the Securities Act or, if such Stock is not then so registered, the Company has determined that such vesting and issuance would be exempt from the registration requirements of the Securities Act. By accepting the Deferred Stock Unit Award, you agree not to sell any of the shares of Stock received under this Deferred Stock Unit Award at a time when applicable laws or Company policies prohibit a sale. 6. TRANSFERABILITY. Prior to the issuance of shares of Stock in settlement of a Deferred Stock Unit Award, the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by your creditors or by your beneficiary, except (i) transfer by will or by the laws of descent and distribution or (ii) transfer by written designation of a beneficiary, in a form acceptable to the Company, with such designation taking effect upon your death. All rights with respect to the Deferred Stock Unit Award shall be exercisable during your lifetime only by you or your guardian or legal representative. Prior to actual payment of any Deferred Stock Units, such Deferred Stock Units will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. 7. DEFERRED STOCK UNITS NOT A SERVICE CONTRACT. This Deferred Stock Unit Award is not an employment or service contract and nothing in this Agreement, the Grant Notice or the Plan shall be deemed to create in any way whatsoever any obligation on your part to continue in the service of a Participating Company, or of a Participating Company to continue your Service with the Participating Company. In addition, nothing in your Deferred Stock Unit Award shall obligate the Company, its stockholders, Board, Officers or Employees to continue any relationship which you might have as a Director or Consultant for the Company. 8. RESTRICTIVE LEGEND. Stock issued pursuant to the vesting and settlement of the Deferred Stock Units may be subject to such restrictions upon the sale, pledge or other transfer of the Stock as the Company and the Company’s counsel deem necessary under applicable law or pursuant to this Agreement. 9. REPRESENTATIONS, WARRANTIES, COVENANTS, AND ACKNOWLEDGMENTS. You hereby agree that in the event the Company and the Company’s counsel deem it necessary or advisable in the exercise of their discretion, the transfer or issuance of the shares of Stock issued pursuant to the Deferred Stock Units may be conditioned upon you making certain representations, warranties, and acknowledgments relating to compliance with applicable securities laws.  10. VOTING AND OTHER RIGHTS. Subject to the terms of this Agreement, you shall not have any voting rights or any other rights and privileges of a shareholder of the Company unless and until shares of Stock are issued upon payment of the Deferred Stock Units. 11. CODE SECTION 409A. It is the intent that the payment of Deferred Stock Units as set forth in this Agreement shall qualify for exemption from the requirements of Section 409A of the Code, and any ambiguities herein will be interpreted to so comply. The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify this Agreement as may be necessary to ensure that all payments provided for under this Agreement are made in a manner that qualifies for exemption from Section 409A of the Code; provided, however, that the Company makes no representation that the payments of Deferred Stock Units provided for under this Agreement will be exempt from Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the payments of Deferred Stock Units provided for under this Agreement. 12. NOTICES. Any notices provided for in this Agreement, the Grant Notice or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. 13. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of California as if the Agreement were between California residents and as if it were entered into and to be performed entirely within the State of California. 14. ARBITRATION. Any dispute or claim concerning any Deferred Stock Units granted (or not granted) pursuant to the Plan and any other disputes or claims relating to or arising out of the Plan shall be fully, finally and exclusively resolved by binding arbitration conducted by the American Arbitration Association pursuant to the commercial arbitration rules in San Diego, California. By accepting the Deferred Stock Unit Award, you and the Company waive your respective rights to have any such disputes or claims tried by a judge or jury. 15. AMENDMENT. Your Deferred Stock Unit Award may be amended as provided in the Plan at any time, provided no such amendment may adversely affect the Deferred Stock Unit Award without your consent unless such amendment is necessary to comply with any applicable law or government regulation, or is contemplated in Section 11 hereof. No amendment or addition to this Agreement shall be effective unless in writing or in such electronic form as may be designated by the Company. 16. GOVERNING PLAN DOCUMENT. Your Deferred Stock Unit Award is subject to this Agreement, the Grant Notice and all the provisions of the Plan, the provisions of which are hereby made a part of this Agreement, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement, the Grant Notice and those of the Plan, the provisions of the Plan shall control. 17. SEVERABILITY . If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible. 18. DESCRIPTION OF ELECTRONIC DELIVERY . The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement, and any reports of the Company provided generally to the Company’s shareholders, may be delivered to you electronically. In addition, if permitted by the Company, you may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via electronic mail (“e-mail”) or such other means of electronic delivery specified by the Company.  QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN NON-EMPLOYEE DIRECTOR DEFERRED STOCK UNIT GRANT NOTICE FOR NON-EMPLOYEE DIRECTORS IN SPAIN QUALCOMM Incorporated (the “Company”), pursuant to its 2006 Long-Term Incentive Plan (the “Plan”) hereby grants to the Participant named below the number of Deferred Stock Units set forth below, each of which is a bookkeeping entry representing the equivalent in value of one (1) share of the Company’s common stock. The Non-Employee Director Deferred Stock Unit Award is subject to all of the terms and conditions as set forth herein and the Non-Employee Director Deferred Stock Unit Agreement for Directors in Spain (attached hereto) and the Plan 1 which are incorporated herein in their entirety. Capitalized terms not otherwise defined in this Grant Notice or the Non-Employee Director Deferred Stock Unit Agreement shall have the meaning set forth in the Plan. Participant: «First_Name» «Last_Name» Grant No.: «Number» Date of Grant: «DSU_Date» Vesting «Deferred retainer» « This Deferred Stock Unit Award is fully vested on the Date of Grant. » «Annual award» « This Deferred Stock Unit Award vests on the earliest to occur of the following events provided your Service is continuous from the Date of Grant through the applicable date: (1) the one-year anniversary of the Date of Grant, (2) the date of the next annual meeting of stockholders of the Company that occurs after the Date of Grant, (3) your death, (4) your Disability, or (5) a Change in Control. » Settlement The Deferred Stock Units will be settled and paid as provided in the Non-Employee Director Deferred Stock Unit Agreement on, or as soon as practicable following, but in no event later than thirty (30) days after [ specify date of 3 years from grant or later date specified in valid election ]. However, as provided in Section 2.1 of the Deferred Stock Unit Agreement, these Deferred Stock Units may be settled earlier upon the termination of your Board service and certain other events. Additional Terms/Acknowledgments: The Participant acknowledges (in the form determined by the Company) receipt of, and represents that the Participant has read, understands, accepts and agrees to the terms and conditions of the following: this Grant Notice, the Non-Employee Director Deferred Stock Unit Agreement and the Plan (including, but not limited to, the binding arbitration provision in Section 3.7 of the Plan). Participant hereby accepts the Deferred Stock Unit Award subject to all of its terms and conditions and further acknowledges that as of the Date of Grant, this Grant Notice, the Non-Employee Director Deferred Stock Unit Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements pertaining to this particular Deferred Stock Unit Award. QUALCOMM Incorporated: Non-Employee Director: By: _____________________________________ Dr. Paul E. Jacobs Signature Chairman of the Board and Chief Executive Officer Dated: «DSU_Date» _____________________________________ Date Attachment: Non-Employee Director Deferred Stock Unit Agreement in Spain 1 A copy of the Plan can be obtained from the Stock Administration website, located on the Company’s internal webpage, or you may request a hard copy from the Stock Administration Department. Emp #: «ID» Shares Subject to Deferred Stock Unit: «Shares_Granted»  QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN NON-EMPLOYEE DIRECTOR DEFERRED STOCK UNIT AGREEMENT FOR NON-EMPLOYEE DIRECTORS IN SPAIN Pursuant to the Grant Notice and this Non-Employee Director Deferred Stock Unit Agreement for Directors in Spain (the “Agreement”), Qualcomm Incorporated (the “Company”) has granted you a Deferred Stock Unit Award with respect to the number of shares of the Company’s common stock (“Stock”) indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement but defined in the Qualcomm Incorporated 2006 Long-Term Incentive Plan (the “Plan”) shall have the same definitions as in the Plan. The details of this Deferred Stock Unit Award are as follows: 1. SERVICE AND VESTING. 1.3 SERVICE. As provided in the Plan and notwithstanding any other provision of this Agreement, the Company reserves the right, in its sole discretion, to determine when your Service has terminated. 1.4 VESTING. Except as otherwise provided in the Plan or this Agreement, this Deferred Stock Unit Award will vest on the vesting dates provided in the Grant Notice (the “Vesting Dates”). Except as otherwise expressly set forth in the Grant Notice, in the event of the termination of your Service for any reason, whether voluntary or involuntary, all unvested Deferred Stock Units shall be immediately forfeited without consideration. Unless and until the Deferred Stock Units vest on the applicable Vesting Dates, you will have no right to payment of any such Deferred Stock Units. 2. SETTLEMENT OF THE DEFERRED STOCK UNITS. 2.3 TIMING OF PAYMENT. The “Settlement Date” of your vested Deferred Stock Units shall be the earliest to occur of the following: (a) the third anniversary of the Date of Grant specified in the Grant Notice, or such later date as you may elect in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); (b) your separation from Service, to the extent such separation constitutes a “separation from service” pursuant to Section 409A of the Code; (c) your death; (d) your Disability, to the extent such Disability constitutes a “disability” pursuant to Section 409A of the Code; or (e) a Change in Control, to the extent such Change in Control constitutes a “change in ownership or effective control of the corporation” with respect to the Company pursuant to Section 409A of the Code. 2.4 FORM OF PAYMENT. Your vested Deferred Stock Units shall be paid in whole shares of Stock (in cash as to fractional shares) on, or as soon as practicable following, but in no event later than thirty (30) days after, the Settlement Date, except as otherwise specified below. To assist you in satisfying federal, state, local, or non-U.S. income tax or social insurance obligations arising from your Deferred Stock Unit Award, the Company will allow you to make a one-time irrevocable election no later than (60) days after the Date of Grant specified in the Grant Notice, authorizing the Company to pay cash in lieu of Stock with respect to a percentage of the Deferred Stock Units equal to the sum of any applicable U.S. and non-U.S. income tax or social insurance withholding rates (such sum referred to herein as the “Tax Percentage”). The amount of cash paid in lieu of such shares of Stock shall be equal to (i) the number of Deferred Stock Units (rounded up to the nearest whole Deferred Stock Unit) corresponding to the Tax Percentage, multiplied by (ii) if the Stock is listed on a national or regional securities exchange or market system, the closing price of a share of Stock as quoted on such national or regional securities exchange or market system constituting the primary market for the Stock on the last trading day prior to the Settlement Date, or, if the Stock is not listed on a national or regional securities exchange or market system, the price of a share of Stock as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse (the price determined under this clause (ii) being hereinafter referred to for purposes of this Agreement as the “Fair Market Value of the Stock”). Any election to receive a portion of the Deferred Stock Unit Award paid in cash as specified in this Section 2.2, shall not be effective with respect to any Settlement Date that occurs within six (6) months after the later of the date of the election or the Date of the Grant specified in the Grant Notice. 3. TAX WITHHOLDING. As a non-employee Director of the Company, you should report any income you derive from the Deferred Stock Unit Award and pay all applicable income taxes and social insurance contributions on  such income. Notwithstanding the foregoing, in the event that a Participating Company has any income tax, social insurance contribution, payroll tax or other tax-related withholding (“Tax-Related Items”) obligation with respect to the income you derive from the Deferred Stock Unit Award, you authorize the Participating Company, at its discretion, to withhold all applicable Tax-Related Items legally payable by you by withholding in shares of Stock, with such withholding obligation determined based on any applicable minimum statutory withholding rates. In the event that the Company cannot legally satisfy the Tax-Related Items obligations by such withholding in Shares, the Company shall be entitled to withhold all applicable Tax-Related Items legally payable by you by one or a combination of the following methods: (i) withholding from cash compensation payable to you by the Company or (ii) arranging for the sale of shares of Stock acquired upon payment of the Deferred Stock Unit Award (on your behalf and at your direction pursuant to this authorization). Finally, you agree to pay on demand to the Participating Company any amount of Tax-Related Items that the Participating Company may be required to withhold as a result of your participation in the Plan or the payment of shares of Stock that cannot be satisfied by the means previously described. 4. TAX ADVICE. You acknowledge that you may be subject to federal, state, local, and non-U.S. income tax and social insurance obligations arising from your Deferred Stock Unit Award. You represent, warrant and acknowledge that the Company has made no warranties or representations to you with respect to the income tax or social insurance consequences of the transactions contemplated by this Agreement, and you are in no manner relying on the Company or its representatives for an assessment of such tax consequences. YOU UNDERSTAND THAT THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE TAX AND SOCIAL INSURANCE TREATMENT OF ANY DEFERRED STOCK UNITS. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER PENALTIES. 5. DIVIDEND EQUIVALENTS. If the Board declares a cash dividend on the Company’s Stock, you will be entitled to Dividend Equivalents on the dividend payment date established by the Company equal to the cash dividends payable on the same number of shares of Stock as the number of Deferred Stock Units subject to this Deferred Stock Unit Award on the dividend record date established by the Company. Any such Dividend Equivalents will be in the form of additional Deferred Stock Units, will be subject to the same terms and vesting dates as the underlying Deferred Stock Units, and will be paid at the same time and in the same manner as the underlying Deferred Stock Units originally subject to this Deferred Stock Unit Award, except that any fractional shares attributable to Dividend Equivalents will be paid in cash within thirty (30) days following the date of payment of the underlying Deferred Stock Unit based on the Fair Market Value (as specified in Section 2.2, above) on the date of payment of the underlying Deferred Stock Unit. The number of additional Deferred Stock Units credited as Dividend Equivalents on the dividend payment date will be determined by dividing (1) the product of (a) the number of your Deferred Stock Units as of the corresponding dividend record date (including any Deferred Stock Units previously credited as a result of prior payments of Dividend Equivalents) and (b) the per-share cash dividend paid on the dividend payment date, by (2) the per-share Fair Market Value (as specified in Section 2.2, above) of Stock on the dividend payment date. 6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, no shares of Stock will be issued to you upon vesting and settlement of this Deferred Stock Unit Award unless the Stock is then registered under the Securities Act or, if such Stock is not then so registered, the Company has determined that such vesting and issuance would be exempt from the registration requirements of the Securities Act. By accepting the Deferred Stock Unit Award, you agree not to sell any of the shares of Stock received under this Deferred Stock Unit Award at a time when applicable laws or Company policies prohibit a sale. 7. TRANSFERABILITY. Prior to the issuance of shares of Stock in settlement of a Deferred Stock Unit Award, the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by your creditors or by your beneficiary, except (i) transfer by will or by the laws of descent and distribution or (ii) transfer by written designation of a beneficiary, in a form acceptable to the Company, with such designation taking effect upon your death. All rights with respect to the Deferred Stock Unit Award shall be exercisable during your lifetime only by you or your guardian or legal representative. Prior to actual payment of any Deferred Stock Units, such Deferred Stock Units will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. 8. DEFERRED STOCK UNITS NOT A SERVICE CONTRACT. This Deferred Stock Unit Award is not an employment or service contract and nothing in this Agreement, the Grant Notice or the Plan shall be deemed to  create in any way whatsoever any obligation on your part to continue in the service of a Participating Company, or of a Participating Company to continue your Service with the Participating Company. In addition, nothing in your Deferred Stock Unit Award shall obligate the Company, its stockholders, Board, Officers or Employees to continue any relationship which you might have as a Director or Consultant for the Company. 9. RESTRICTIVE LEGEND. Stock issued pursuant to the vesting and settlement of the Deferred Stock Units may be subject to such restrictions upon the sale, pledge or other transfer of the Stock as the Company and the Company’s counsel deem necessary under applicable law or pursuant to this Agreement. 10. REPRESENTATIONS, WARRANTIES, COVENANTS, AND ACKNOWLEDGMENTS. You hereby agree that in the event the Company and the Company’s counsel deem it necessary or advisable in the exercise of their discretion, the transfer or issuance of the shares of Stock issued pursuant to the Deferred Stock Units may be conditioned upon you making certain representations, warranties, and acknowledgments relating to compliance with applicable securities laws. 11. VOTING AND OTHER RIGHTS. Subject to the terms of this Agreement, you shall not have any voting rights or any other rights and privileges of a shareholder of the Company unless and until shares of Stock are issued upon payment of the Deferred Stock Units. 12. CODE SECTION 409A. It is the intent that the payment of Deferred Stock Units as set forth in this Agreement shall qualify for exemption from the requirements of Section 409A of the Code, and any ambiguities herein will be interpreted to so comply. The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify this Agreement as may be necessary to ensure that all payments provided for under this Agreement are made in a manner that qualifies for exemption from Section 409A of the Code; provided, however, that the Company makes no representation that the payments of Deferred Stock Units provided for under this Agreement will be exempt from Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the payments of Deferred Stock Units provided for under this Agreement. 13. NOTICES. Any notices provided for in this Agreement, the Grant Notice or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. 14. DATA PRIVACY . You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement by and among, as necessary and applicable, the Participating Companies, for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that the Company may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, and any shares of stock or directorships held in the Company, and details of the Deferred Stock Units or any other entitlement to shares of Stock, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). Participants residing outside the U.S, should understand the following: Data will be transferred to E*TRADE Financial (“E*TRADE”), or such other stock plan service provider as may be selected by Company in the future, which is assisting Company with the implementation, administration and management of the Plan. You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country ( e.g. , the United States) may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting the Stock Administration department. You authorize the Company, E*TRADE, and any other possible recipients that may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or  withdraw the consents herein, in any case without cost, by contacting in writing the Stock Administration department. You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact the Stock Administration department at QUALCOMM Incorporated, 5775 Morehouse Drive, San Diego, CA 92121. 15. NATURE OF GRANT. In accepting the Deferred Stock Unit Award, you acknowledge and agree that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan, the Agreement or the Grant Notice; (b) the award of Deferred Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Deferred Stock Units, or benefits in lieu of Deferred Stock Units, even if Deferred Stock Units or other Awards have been awarded repeatedly in the past; (c) all decisions with respect to future Awards, if any, will be at the sole discretion of the Company; (d) your participation in the Plan is voluntary; (e) the future value of the underlying shares of Stock is unknown and cannot be predicted with certainty; (f) no claim or entitlement to compensation or damages shall arise from forfeiture of the Deferred Stock Units resulting from termination of your Service (for any reason whatsoever), and in consideration of the grant of the Deferred Stock Units to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, waive your ability, if any, to bring any such claim, and release the Company from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims; (g) the Company is not providing any legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or your acquisition or sale of the underlying shares of Stock; and (h) you are hereby advised to consult with your own personal legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. 16. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of California as if the Agreement were between California residents and as if it were entered into and to be performed entirely within the State of California. 17. IMPOSITION OF OTHER REQUIREMENTS. The Company reserves the right to impose other requirements on your participation in the Plan, on the Deferred Stock Units, and on any shares of Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. 18. ARBITRATION. Any dispute or claim concerning any Deferred Stock Units granted (or not granted) pursuant to the Plan and any other disputes or claims relating to or arising out of the Plan shall be fully, finally and exclusively resolved by binding arbitration conducted by the American Arbitration Association pursuant to the commercial arbitration rules in San Diego, California. By accepting the Deferred Stock Unit Award, you and the Company waive your respective rights to have any such disputes or claims tried by a judge or jury. 19. AMENDMENT. Your Deferred Stock Unit Award may be amended as provided in the Plan at any time, provided no such amendment may adversely affect the Deferred Stock Unit Award without your consent unless such  amendment is necessary to comply with any applicable law or government regulation, or is contemplated in Section 12 hereof. No amendment or addition to this Agreement shall be effective unless in writing or in such electronic form as may be designated by the Company. 20. GOVERNING PLAN DOCUMENT. Your Deferred Stock Unit Award is subject to this Agreement, the Grant Notice and all the provisions of the Plan, the provisions of which are hereby made a part of this Agreement, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement, the Grant Notice and those of the Plan, the provisions of the Plan shall control. 21. SEVERABILITY . If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible. 22. DESCRIPTION OF ELECTRONIC DELIVERY . The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement, and any reports of the Company provided generally to the Company’s shareholders, may be delivered to you electronically. In addition, if permitted by the Company, you may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via electronic mail (“e-mail”) or such other means of electronic delivery specified by the Company.  EXHIBIT 21 SUBSIDIARIES OF REGISTRANT QUALCOMM Atheros, Inc. (QCA), a Delaware Corporation, is a wholly-owned subsidiary of the Company. QCA and its subsidiaries, Atheros Communications KK, incorporated in Japan; Atheros International LLC, incorporated in Delaware and QUALCOMM Atheros Canada Corporation, incorporated in Canada, do business under their own names. The Company consolidates QCA in its financial statements. QUALCOMM Global Trading Pte. Ltd. (QGT), a Singapore corporation, is a wholly-owned subsidiary of the Company. QGT and its subsidiaries, Atheros Communications India Private Limited, incorporated in India, Atheros India, LLC, incorporated in Delaware; DesignArt Networks Ltd, incorporated in Israel; Global Wireless Application Services Private Limited, incorporated in India; Opulan Technologies Corp., incorporated in the Cayman Islands; Opulan Technologies Corp. HK Limited, incorporated in Hong Kong; QT Technologies Ireland Limited, incorporated in Ireland; QUALCOMM Asia Pacific Pte. Ltd., incorporated in Singapore; QUALCOMM Atheros Finland Oy, incorporated in Finland; QUALCOMM Atheros Hong Kong Limited, incorporated in Hong Kong; QUALCOMM Atheros International Ltd., incorporated in Bermuda; QUALCOMM Atheros International (Shanghai) Co., Ltd., incorporated in China; QUALCOMM Atheros (Macao Commercial Offshore) Limited, incorporated in Macao; QUALCOMM Atheros Networks Ltd., incorporated in Bermuda; QUALCOMM Atheros Taiwan Corporation, incorporated in Taiwan; QUALCOMM Atheros Technology Ltd., incorporated in Bermuda; QUALCOMM Canada Inc., incorporated in Canada; QUALCOMM CDMA Technologies Asia-Pacific Pte. Ltd., incorporated in Singapore; QUALCOMM CDMA Technologies GmbH, incorporated in Germany; QUALCOMM CDMA Technologies (Korea) Y.H., incorporated in South Korea; QUALCOMM CDMA Technologies, Y.K., incorporated in Japan; QUALCOMM Communication Technologies Ltd., incorporated in Taiwan; QUALCOMM Communications Gmbh, incorporated in Germany; QUALCOMM Communications UK Limited, incorporated in the United Kingdom; QUALCOMM Finland Oy, incorporated in Finland; QUALCOMM France SARL, incorporated in France; QUALCOMM Global Trading, Inc., incorporated in the British Virgin Islands; QUALCOMM GT Holdings, Inc., incorporated in the British Virgin Islands; QUALCOMM India Private Limited, incorporated in India; QUALCOMM Israel Ltd, incorporated in Israel; QUALCOMM Mauritius Holdings Limited, incorporated in Mauritius; QUALCOMM New Zealand Limited, incorporated in New Zealand; QUALCOMM Panel Manufacturing Ltd., incorporated in Taiwan; QUALCOMM Saudi Arabia LLC, incorporated in Saudi Arabia; QUALCOMM (Shanghai) Co., Ltd., incorporated in China; QUALCOMM Technologies Netherlands B.V., incorporated in the Netherlands; QUALCOMM (UK) Limited, incorporated in the United Kingdom; QUALCOMM Wireless Semi Conductor Technologies Limited, incorporated in China; Spike Technologies LLC, registered under the laws of the State of California and Wireless Business Services Private Limited, incorporated in India, do business under their own names. The Company consolidates QGT in its financial statements. Qualcomm Technologies, Inc. (QTI), a Delaware Corporation, is a wholly-owned subsidiary of the Company. The names of other subsidiaries are omitted. Such subsidiaries would not, if considered in the aggregate as a single subsidiary, constitute a significant subsidiary within the meaning of Item 601(b)(21)(ii) of Regulation S-K.  EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-119904, No. 333-120948, No. 333-131448, No. 333-131157, No. 333-137692, No. 333-137693, No. 333-150423, No. 333-148177, No. 333-148841, No. 333-148556, No. 333-166246, No. 333-173184, No. 333-174649 and No. 333-188104) of QUALCOMM Incorporated of our report dated November 6, 2013 relating to the consolidated financial statements, the financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP San Diego, California November 6, 2013  EXHIBIT 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Paul E. Jacobs, certify that: 1. I have reviewed this Annual Report on Form 10-K of QUALCOMM Incorporated; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's Board of Directors (or persons performing the equivalent functions): Dated: November 6, 2013 /s/ Paul E. Jacobs Paul E. Jacobs, Chief Executive Officer and Chairman a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.  EXHIBIT 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, George S. Davis, certify that: 1. I have reviewed this Annual Report on Form 10-K of QUALCOMM Incorporated; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's Board of Directors (or persons performing the equivalent functions): Dated: November 6, 2013 /s/ George S. Davis George S. Davis, Executive Vice President and Chief Financial Officer a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.  EXHIBIT 32.1 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350) In connection with the accompanying Annual Report of QUALCOMM Incorporated (the “Company”) on Form 10-K for the fiscal year ended September 29, 2013 (the “Report”), I, Paul E. Jacobs, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: November 6, 2013 /s/ Paul E. Jacobs Paul E. Jacobs, Chief Executive Officer and Chairman  EXHIBIT 32.2 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350) In connection with the accompanying Annual Report of QUALCOMM Incorporated (the “Company”) on Form 10-K for the fiscal year ended September 29, 2013 (the “Report”), I, George S. Davis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: November 6, 2013 /s/ George S. Davis George S. Davis, Executive Vice President and Chief Financial Officer 

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