Qualcomm to Acquire Atheros

SAN DIEGO AND SAN JOSE — January 5, 2011 — Qualcomm Incorporated (NASDAQ: QCOM) and Atheros Communications, Inc. (NASDAQ: ATHR), today announced that they have entered into a definitive agreement whereby Qualcomm intends to acquire Atheros, a leader in innovative technologies for wireless and wired local area connectivity in the computing, networking and consumer electronics industries. The acquisition is intended to help accelerate the expansion of Qualcomm’s technologies and platforms to new businesses beyond cellular and provide access to significant new growth opportunities.

Qualcomm has entered into a definitive agreement to purchase Atheros for $45 per share in cash, representing an enterprise value of $3.1 billion. The transaction has been approved by the Qualcomm and Atheros boards of directors and is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Atheros’ stockholders. The transaction is expected to close in the first half of 2011. Excluding amortization of acquired intangibles, Qualcomm expects the acquisition to be modestly accretive to earnings per share in fiscal year 2012, the first full year of combined operations. Qualcomm intends to finalize its estimates of the transaction’s financial impact, as well as the accounting for the transaction, upon deal close.

“It is Qualcomm’s strategy to continually integrate additional technologies into mobile devices to make them the primary way that people communicate, compute and access content. This acquisition is a natural extension of that strategy into other types of devices,” said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. “The combination of Qualcomm and Atheros is intended to accelerate this opportunity by utilizing best-in-class products for communications, computing and consumer electronics to broaden existing customer relationships and expand access to new partners and distribution channels.”

Atheros’ current president and CEO, Dr. Craig H. Barratt, is expected to join Qualcomm as president of Qualcomm Networking & Connectivity.

Atheros to Acquire Intellon

SANTA CLARA, CA and ORLANDO, FL--(Marketwire - September 8, 2009) - Atheros Communications, Inc. (NASDAQ: ATHR) and Intellon Corporation (NASDAQ: ITLN) today announced that the companies have entered into a definitive agreement for Atheros to acquire Intellon in a stock and cash transaction valued at approximately $244 million, or $181 million net of Intellon's cash, cash equivalents and short-term investments as of June 30, 2009.
The acquisition of Intellon is another significant step by Atheros toward its goal of enabling the very best connectivity experiences across the networking, computing and mobile device markets. Intellon's powerline communications (PLC) technology operates on today's most pervasive wired medium, the home power circuit. By combining Atheros' best-in-class wireless LAN and Ethernet products with Intellon's market-leading PLC products, Atheros will further drive the adoption of universal, easy-to-use, networking solutions throughout the digital home.
"We are deeply committed to providing our customers with innovative communications solutions based on our expanding portfolio of technologies, and the addition of Intellon's market-leading PLC products further demonstrates that commitment," said Craig Barratt, president and chief executive officer of Atheros Communications. "Our unmatched combination of connectivity technologies will enable dynamic meshing of wireless and wired bandwidth, providing robust transmission of data, voice and multi-media content on the growing number of networked devices in the home."

As the leading provider of HomePlug® compatible products, Intellon's extensive experience in delivering PLC solutions has enabled it to build a strong portfolio of products and intellectual property. By leveraging the Intellon team's experience, Atheros will further expand its ability to serve the needs of the digitally-connected consumer, as well as extend its opportunities for growth in new applications and markets, including Ethernet-over-Coax and smart grid solutions.
"Having played a major role in the development and commercialization of PLC technology across the globe, and with more than 40 million chipsets shipped and 50 service provider deployments, the Intellon team is excited about the opportunity to combine its knowledge and expertise in wired networking with Atheros' leadership in wireless LAN and other network communications," said Charles E. Harris, Intellon's chief executive officer and chairman of the board. "With the cultures of innovation and commitment to customer success that both companies share, this powerful combination will bring a new level of seamless connectivity to operators and consumers alike."

Pursuant to the terms of the definitive agreement, the overall acquisition consideration consists of an amount of Atheros common stock and equivalents (including the assumption of outstanding Intellon restricted stock units and stock options) representing between 45 and 55 percent of the total consideration with the remainder paid in cash, providing an overall value of $7.30 per share based on the five-day average closing price of Atheros as of September 4, 2009. Intellon shareholders may elect to receive either: 1) approximately 0.135 shares of Atheros common stock and approximately $3.60 in cash, 2) $7.30 in cash, or 3) approximately 0.267 shares of Atheros common stock, for each share of Intellon common stock; however, each of these elections will be subject to adjustment and proration provisions (as further detailed in the definitive agreement). In the aggregate, Atheros expects to issue approximately 4.2 - 5.1 million shares of Atheros common stock and equivalents and pay approximately $115 - $141 million in cash, depending on the overall elections that are made and pursuant to the terms in the definitive agreement.

Atheros expects to close the transaction in the fourth quarter of 2009, subject to Intellon shareholder approval as well as customary closing conditions and regulatory approvals. Intellon shareholders representing approximately 22% percent of Intellon's outstanding common stock have signed an agreement to vote their shares in favor of this transaction. It is anticipated that the transaction will be accretive to Atheros' non-GAAP earnings per share in the first half of 2010.

Atheros 10Q

Litigation updates:

Broadcom Corporation and Atheros Communications, Inc. v. Wi-LAN, Inc.
On December 10, 2008, the Company and Broadcom filed a complaint for declaratory judgment against Wi-LAN, Inc. in the U.S. District Court for Northern District of California, requesting the court to declare, among other things, that U.S. patent number6,549,759, (“‘759 Patent”), assigned to Wi-LAN is invalid, unenforceable and that the Company does not infringe any valid claims of the ‘759 Patent. This declaratory judgment action stemmed from Wi-LAN’s threat to add this patent into the complaints filed by Wi-LAN against the Company and others, now pending in the Eastern District of Texas. Similar declaratory judgment actions were filed by a number of other companies against Wi-LAN. There can be no assurance that the Company will be successful in seeking declaratory relief from Wi-LAN’s threat.

Atheros Communications, Inc. v. Lehman Brothers, Inc.
On January 30, 2009, the Company filed a Proof of Claim in the United States Bankruptcy Court for the Southern District of New York against Lehman Brothers, Inc. seeking compensatory damages incurred in connection with Lehman Brothers’ investment of the Company’s cash in auction-rate securities and resulting losses of income and liquidity, as well as punitive damages. On the same day and for related reasons, the Company filed a Customer Claim against Lehman Brothers with the federal Securities Investor Protection Corporation. There can be no assurance that the Company will obtain compensation for the Company’s claims.

PACid Group, LLC v. Apple Inc. et al.
On March 30, 2009, PACid Group, LLC (“PACid”) filed a complaint against the Company and 18 other defendants in the United States District Court for the Eastern District of Texas, Tyler Division. In the complaint, PACid alleges that certain of the Company’s products infringe U.S. Patent Numbers 5,963,646 and 6,049,612 which relate to generation of encryption keys and methods of protecting information files using such keys. PACid seeks unspecified damages and other relief. The Company has answered the complaints, denying all allegations and asserting affirmative defenses. The Company also asserted counterclaims requesting declaratory judgment for non-infringement and invalidity. However, there can be no assurance that the Company will be successful in such defense.

Specht et al. v. Google Inc. et al.
On April 28, 2009, Erich Specht and The Android’s Dungeon Incorporated filed a complaint against Google Inc., the Open Handset Alliance and its numerous members, including the Company, in the United States District Court for the Northern District of Illinois, Chicago Division. In the complaint, Specht alleges infringing use of the ANDROID DATA mark, U.S. Trademark Registration Number 2,639,556. Specht seeks unspecified damages and other relief. The Company has not yet answered the complaint.

Atheros Communications 10K

Customer list including primary ODM and sell-throughs: "In 2008 and 2007, Hon Hai Precision Industry Co. Ltd. accounted for 19% and 25% of our net revenue, respectively. In 2006, Hon-Hai Precision Industry Co. Ltd. and UTStarcom, Inc. accounted for 20% and 10% of our net revenue, respectively. While we primarily sell directly to ODMs, the ODM generally identifies on its purchase order the OEM for whom they are purchasing our product. Based on the sell-through information provided to us by the ODMs, the following companies or their subsidiaries are among those that have incorporated our products through ODMs during the year ended December 31, 2008: 2Wire, Inc., 3Com Corp., Acer, Inc., Apple, Inc., Aruba Wireless Networks, Inc., AsusTEK Computer, Inc., AVM GmbH, Belkin Corp., Buffalo, Inc., Dell Inc., Cisco Systems, Inc. (including the Linksys Group, Inc.), D-Link Systems, Inc., Fujitsu Ltd., Fujitsu Siemens Co., Hewlett-Packard Co., Lenovo Pte. Ltd., MikroTik Ltd., NEC Electronics Corp., NETGEAR, Inc., Nintendo Co., Ltd., Ruckus Wireless, Inc., Sagem Communications, Samsung Group, Siemens AG, Sony Corporation, Thomson, Toshiba Technology Corp., TP-Link Technologies Co., Ltd., Ubiquiti Networks, Inc., UTStarcom, Inc., Verizon Inc., ZyXEL Communications Corporation"

Patent Portfolio and activity: "As of December 31, 2008, we held 132 issued U.S. patents and 175 pending U.S. patent applications, in addition to international patents and pending patent applications."

Wafer Foundries and Assembly & Test: "We currently have in production products using 0.25 micron, 0.18-micron, 0.13-micron and 0.09-micron process geometries and a variety of foundries. We depend on a range of foundry contractors to manufacture substantially all of our products.......We depend on six independent foundries to manufacture substantially all of our products. Our key silicon foundries for wafer production are Chartered in Singapore, SMIC in China, Silterra in Malaysia, TSMC in Taiwan, Tower Semiconductor Ltd. in Israel and UMC in Taiwan........key test and assembly subcontractors including, but not limited to Amkor Technology, Inc. in China, Taiwan and Korea, Casio Micronics Co., Ltd. In Japan, Greatek Electronics, Inc. in Taiwan, Microelectronics Corporation in Taiwan, Sigurd Microelectronics Corp. in Taiwan , Siliconware Precision Industries Co., Ltd. in China and Taiwan and United Test and Assembly Center Ltd. in Singapore."

Staffing: "As of December 31, 2008, we employed 1,079 full-time employees, including 752 in research and development and operations, 240 in sales and marketing and 87 in general and administration."

New litigation:

Broadcom Corporation and Atheros Communications, Inc. v. Wi-LAN, Inc.
On December 10, 2008, we and Broadcom filed a complaint for declaratory judgment against Wi-LAN, Inc. in the U.S. District Court for Northern District of California, requesting the court to declare, among other things, that U.S. patent number 6,549,759, or the ‘759 Patent, assigned to Wi-LAN is invalid, unenforceable and that we do not infringe any valid claims of the ‘759 Patent. This declaratory judgment action stemmed from Wi-LAN’s threat to add this patent into the complaints filed by Wi-LAN against Atheros and others, now pending in the Eastern District of Texas. Similar declaratory judgment actions were filed by a number of other companies against Wi-LAN. However, there can be no assurance that we will be successful in seeking declaratory relief from Wi-LAN’s threat.

Atheros Communications, Inc. v. Lehman Brothers, Inc.
On January 30, 2009, we filed a Customer Claim pursuant to the Securities Investor Protection Act, or SIPA, with the SIPA Trustee overseeing the bankruptcy of Lehman Brothers, Inc., in an effort to gain access to money that may be available to former Lehman clients through the Securities Investor Protection Corporation. For related reasons, we plan to file a Proof of Claim in the United States Bankruptcy Court for the Southern District of New York against Lehman Brothers, Inc. related to compensatory and punitive damages incurred in Lehman Brothers’ investment of the Company’s cash in auction-rate securities and the resulting losses of income and liquidity. There can be no assurance that we will obtain compensation for our claims.

Project status: At December 31, 2008, the single-chip GPS device project associated with our acquisition of u-Nav was approximately 65% complete, with an estimated 0.8 years remaining to complete at an estimated cost of $3.0 million. At December 31, 2008, the Ethernet controller and switch projects associated with our acquisition of Attansic were substantially complete, and actual results were materially consistent with our assumptions at the time of the acquisition. As of December 31, 2008, the mobile communications IC projects associated with our acquisition of ZyDAS were discontinued, however we do not expect discontinuation of the project to have a material impact on our consolidated results of operations or financial condition. The original assumptions consisted of expected completion dates for the IPR&D projects, estimated costs to complete the projects, and revenue and expense projects for the products once they entered the market.