Qualcomm 2004 Annual Report Download - page 53

QUALCOMM 49
In February 2003, we authorized the expenditure of up to $1 billion to repurchase shares of our common stock over a two-year period. In fis-
cal 2003, we bought 9,830,000 shares at a net aggregate cost of $158 million. While we did not repurchase any of our common stock during
fiscal 2004, we continue to evaluate repurchases under this program. In connection with our stock repurchase program, we sold put options
in March 2004 that could have required us to purchase 3,000,000 shares of our common stock upon exercise. We repurchased all of the put
options in July 2004. We recorded $5 million in premiums received for the put options as investment income. At September 30, 2004, $834 mil-
lion remains authorized for repurchases under the program. We announced dividends totaling approximately $307 million and $135 million, or
$0.190 and $0.085 per share, during fiscal 2004 and 2003, respectively.
We believe our current cash and cash equivalents, marketable securities and cash generated from operations will satisfy our expected working
and other capital requirements for the foreseeable future based on current business plans, including investments in other companies and other
assets to support the growth of our business, financing for customers of CDMA infrastructure products in accordance with the agreements with
Ericsson, financing under agreements with CDMA telecommunications operators, other commitments, the payment of dividends and possible
additional stock buy backs. We started construction of two facilities in San Diego, California in fiscal 2003, totaling approximately one million
additional square feet, to meet the requirements projected in our long-term business plan. The remaining cost of these new facilities is expected
to be approximately $250 million through fiscal 2007. We recently announced our plans to expand our current Network Operations Center in
Las Vegas, Nevada, which uses GPS and other technologies to track freight transportation and shipping nationwide. We expect the cost of this
expansion will be approximately $52 million through fiscal 2007. We expect to place the new and expanded facilities in service starting in fiscal
2005 through fiscal 2007.
We intend to continue our strategic investment activities to promote the worldwide adoption of CDMA products and the growth of CDMA-based
wireless data and wireless Internet products, although to a lesser extent than in prior years. As part of these investment activities, we may provide
financing to facilitate the marketing and sale of CDMA equipment by authorized suppliers. In the event additional needs for cash arise, we may
raise additional funds from a combination of sources including potential debt and equity issuance.
During the first quarter of fiscal 2005, we and the Other Investor in Inquam committed to fund an additional $2 million each. While we have
no other obligations to provide funding to Inquam, we continue to have active discussions with Inquam and the Other Investor concerning the
necessary funding for all or part of Inquam’s business plan, potential restructuring and investment by other parties. While we may provide some
additional funding and/or credit supportin furtherance of Inquam’sbusiness plan, the amount and formof such supportis unknown, and none
will be provided without commensurate supportor consideration being provided by the Other Investor.
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. Wehave no off-balance sheet arrangements as defined in S-K 303(a)(4)(ii).
At September 30, 2004, our outstanding contractual obligations included (in millions):
Contractual Obligations
Payments Due By Period
Fiscal Fiscal Fiscal Beyond Fiscal No Expiration
Total 2005 2006-2007 2008-2009 2009 Date
Long-term financing under
Ericsson arrangement(1) $ 118 $ — $ — $ — $ — $118
Purchase obligations 949 885 60 4 — —
Operating leases 111 45 52 11 3 —
Equity investments(1) 19 — — — — 19
Inquam guarantee 28 28 — — — —
Other commitments 1 1 — — — —
Total commitments 1,226 959 112 15 3 137
Other long-term liabilities(2) 90 — 8 22 — 60
Total recorded liabilities 90 — 8 22 — 60
Total $1,316 $ 959 $120 $ 37 $ 3 $197
(1) These commitments do not have fixed funding dates. Amounts are presented based on the expiration of the commitment, but actual funding may occur earlier or
not at all as funding is 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.
(2) Certain long-term liabilities reflected on our balance sheet, such as unearned revenue, are not presented in this table because they do not require cash settlement
in the future.
Additional information regarding our financial commitments at September 30, 2004 is provided in the Notes to our Consolidated Financial
Statements. See “Notes to Consolidated Financial Statements, Note 3 — Composition of Certain Financial Statement Captions, Finance
Receivables, Note 4 — Investments in Other Entities and Note 9 — Commitments and Contingencies.”