Qualcomm 2014 Annual Report Download - page 45

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 $32.0 billion at September 28, 2014 , an increase of $2.6 billion from September 29, 2013 . This increase included $1.4 billion in
proceeds from the issuance of common stock under our equity compensation plans and $788 million in net proceeds from the sale of the North
and Latin America operations of our Omnitracs division. Our cash, cash equivalents and marketable securities at September 28, 2014 consisted
of $5.8 billion held by United States-based entities and $26.2 billion held by foreign entities. Most of our cash, cash equivalents and marketable
securities held by foreign entities is indefinitely reinvested and would be subject to material tax effects if repatriated. However, we believe that
our United States sources of cash and liquidity are sufficient to meet our business needs in the United States and do not expect that we will need
to repatriate the funds. Total cash provided by operating activities increased to $8.9 billion during fiscal 2014 , compared to $8.8 billion during
fiscal 2013 .
Accounts receivable increased 13% during fiscal 2014 . Days sales outstanding, on a consolidated basis, were 32 days at September 28,
2014 , compared to 30 days at September 29, 2013 . The increase in accounts receivable was primarily due to the effects of increased revenues
related to integrated circuits and a receivable related to a dispute with a licensee. The increase in days sales outstanding was primarily due to a
receivable related to a dispute with a licensee.
During fiscal 2014 , we repurchased and retired 60,253,000 shares of common stock for $4.5 billion , before commissions. On March 4,
2014 , we announced that we had been authorized to repurchase up to $7.8 billion of our common stock. At September 28, 2014 , approximately
$5.3 billion remained available for repurchase under our stock repurchase program. Since September 28, 2014 , we repurchased and retired
8,595,000 shares of common stock for $638 million . 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 cash dividends totaling $2.6 billion and $2.1 billion , or $1.54 and $1.20 per common share, during fiscal 2014 and 2013 ,
respectively. On March 4, 2014 , we announced an increase in our quarterly dividend from $0.35 to $0.42 per share of common stock. On
October 16, 2014 , we announced a cash dividend of $0.42 per share on our common stock, payable on December 18, 2014 to stockholders of
record as of the close of business on December 1, 2014 . 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.
We intend to return 75% of our free cash flow to stockholders through stock repurchases and dividends over the foreseeable future, where
free cash flow is defined as net cash provided by operating activities less capital expenditures. To meet this goal, we expect to use existing cash
and marketable securities held by, and cash flow generated from, United States-based entities, and we anticipate that we will supplement this by
borrowing additional funds in fiscal 2015. The requirement for and timing of such borrowing is subject to a number of factors, including the cash
flow generated by United States-based entities, acquisitions and strategic investments, acceptable interest rates and changes in corporate income
tax law, among other factors.
Subject to the foregoing paragraph, we believe our current cash, cash equivalents and marketable securities and our expected cash flow
generated from operations will satisfy our working and other capital requirements over the next fiscal year and beyond based on our current
business plans. Recent and expected working and other capital requirements also include:
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• Our research and development expenditures were $5.5 billion and $5.0 billion in fiscal 2014 and 2013 , 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 $1.2 billion and $1.0 billion in fiscal 2014 and 2013 , respectively. 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 2015 , some of which relate to research and development activities and capital expenditures, totaled
$3.4 billion at September 28, 2014 .
• In October 2014, we announced that we had reached agreement with CSR plc on the terms of a recommended cash offer to acquire the
entire issued and to be issued ordinary share capital of CSR for £
9.00 per ordinary share, which values the entire issued and to be issued
share capital of CSR at approximately £1.6 billion (approximately $2.5 billion based upon an exchange rate of USD: GBP 1.6057). We
expect to use existing cash resources to fund the acquisition. The acquisition is subject to a number of conditions, including receipt of
United States and other regulatory approvals and the approval of CSR’
s shareholders. Subject to the satisfaction of these conditions, the
acquisition is expected to close by the end of the summer of 2015.