Qualcomm 2011 Annual Report Download - page 45

decreased primarily due to a $56 million decrease in QIS revenues, partially offset by a $31 million increase in QES revenues. The decrease in
QIS revenues was primarily attributable to a $39 million decrease in QChat revenues resulting from decreased development efforts under the
licensing agreement with Sprint and a $16 million decrease in Brew revenues resulting from lower consumer demand. The increase in QES
revenues was primarily attributable to a $58 million increase in equipment revenue resulting from higher unit shipments, partially offset by a $31
million decrease in messaging and other services revenue. QWI earnings before taxes for fiscal 2010 were $12 million, compared to $20 million
for fiscal 2009 . The decrease in QWI earnings before taxes was primarily attributable to the decrease in revenues, partially offset by a decrease
in research and development expenses. QWI operating margin percentage was 1% in fiscal 2010 , compared to 3% in fiscal 2009 . The decrease
in QWI operating margin percentage was primarily attributable to a decrease in QIS gross margin percentage, partially offset by the decrease in
research and development expenses.
QSI Segment . QSI earnings before taxes from continuing operations for fiscal 2010 were $7 million, compared to loss before taxes from
continuing operations of $54 million for fiscal 2009 . The increase in QSI earnings before taxes was primarily due to a $62 million gain on the
sale of our Australia spectrum license.
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 $20.9 billion at September 25, 2011 , an increase of $2.5 billion from September 26, 2010 . This increase included cash provided
by operating activities of $4.9 billion and proceeds from the issuance of common stock under our equity compensation plans of $2.6 billion,
partially offset by cash used to acquire Atheros of $3.1 billion, net of cash acquired. Our cash, cash equivalents and marketable securities at
September 25, 2011 consisted of $5.7 billion held domestically and $15.2 billion held by foreign subsidiaries. Of the amount of cash, cash
equivalents and marketable securities held by our foreign subsidiaries at September 25, 2011 , $13.5 billion would be subject to material tax
effects if repatriated. Due to tax and accounting considerations, we derive liquidity for operations primarily from domestic cash flow and
investments held domestically.
During fiscal 2011, we repurchased 2,878,000 shares of our common stock for $142 million. In connection with the stock repurchase
program, we have three put options outstanding, with expiration dates in fiscal 2012, that may require us to repurchase an aggregate of
11,800,000 shares of our common stock upon exercise for $586 million, which would result in an average price per share of $49.64. Any shares
repurchased are retired. At September 25, 2011 , approximately $1.0 billion remained authorized for repurchase under our stock repurchase
program, net of put options outstanding. The stock repurchase program has no expiration date. Since September 25, 2011, we have repurchased
2,046,000 shares of our common stock for $99 million . We continue to evaluate repurchases under this program subject to capital availability
and our view that such repurchases are in the best interest of our stockholders.
We paid dividends totaling $1.3 billion, $1.2 billion and $1.1 billion, or $0.81, $0.72 and $0.66 per common share, during fiscal 2011 , 2010
and 2009 , respectively. On March 8, 2011, we announced an increase in our quarterly cash dividend per share of common stock from $0.190 to
$0.215. We announced cash dividends totaling $361 million, or $0.215 per share, during the fourth quarter of fiscal 2011 , which were paid on
September 23, 2011. On October 11, 2011, we announced a cash dividend of $0.215 per share on our common stock, payable on December 21,
2011 to stockholders of record as of November 23, 2011. 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 36% during fiscal 2011 . Days sales outstanding, on a consolidated basis, were 22 days at both September 25,
2011 and September 26, 2010
. The increase in accounts receivable was primarily due to growth in the QCT business and the accounts receivable
relating to Atheros, which were acquired in the third quarter of fiscal 2011.
We believe our current cash and cash equivalents, 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.
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• Our research and development expenditures were $3.0 billion and $2.5 billion in fiscal 2011 and 2010 , 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.
• Capital expenditures were $593 million and $426 million in fiscal 2011 and 2010 , respectively. We anticipate that capital expenditures
will be higher in fiscal 2012 as compared to fiscal 2011 , primarily due to estimated capital expenditures of more than $600 million in
fiscal 2012 related to the continued construction of a new manufacturing facility in Taiwan for our QMT division. The initial phase of
the facility is primarily being funded using cash held by foreign subsidiaries, and the facility is expected to be operational in fiscal
2012. Future capital expenditures may also be impacted by transactions that are currently not forecasted.