5 unchanged sentences
Issuer Purchases of Equity Securities
−Removed: Our purchases of our equity securities in the fourth quarter of fiscal 2022 were:
+Added: Our purchases of our common stock in the fourth quarter of fiscal 2023 were:
Total Number of
9 unchanged sentences
(1) Average Price Paid Per Share excludes cash paid for commissions.
−Removed: (2) On October 12, 2021, we announced a stock repurchase program authorizing us to repurchase up to $10.0 billion of our common stock.
+Added: (2) On October 12, 2021, we announced a $10.0 billion stock repurchase program.
At September 24, 2023, $5.1 billion remained authorized for repurchase.
1 unchanged sentence
Shares withheld to satisfy statutory tax withholding requirements related to the vesting of share-based awards are not issued or considered stock repurchases under our stock repurchase program and, therefore, are excluded from the table above.
−Removed: Unregistered Sales of Equity Securities
−Removed: In connection with our acquisition of NuVia, Inc.
−Removed: (Nuvia), which closed in March 2021, we are obligated to issue shares of our common stock to three specific founders of Nuvia and certain affiliated entities of such founders from time to time upon the satisfaction of certain conditions.
−Removed: During the quarter ended September 25, 2022, we issued an aggregate of 106,425 additional shares of our common stock to the founders of Nuvia and their affiliates, each of whom had advised us that he or such entity was an accredited investor.
−Removed: These shares were issued in transactions not involving a public offering pursuant to the exemption from registration set forth in Section 4(a)(2) of the Securities Act.
Stock Performance Graph
7 unchanged sentences
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations
−Removed: In addition to historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties.
−Removed: Actual results may differ materially from those referred to herein due to a number of factors, including but not limited to those described in “Part I, Item 1A.
−Removed: Risk Factors” and elsewhere in this Annual Report.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in “Part II, Item 8.
8 unchanged sentences
Our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments.
−Removed: We also have nonreportable segments, including QGOV (Qualcomm Government Technologies) and our cloud AI inference processing initiative.
+Added: We also have nonreportable segments, including QGOV (Qualcomm Government Technologies) and our cloud computing processing initiative (formerly referred to as our cloud AI inference processing initiative).
Our reportable segments are operated by QUALCOMM Incorporated and its direct and indirect subsidiaries.
7 unchanged sentences
Our revenues have historically fluctuated based on consumer demand for devices, as well as on the timing of customer/licensee device launches and/or innovation cycles (such as the transition to the next generation of wireless technologies).
−Removed: This has resulted in fluctuations in QCT revenues in advance of and during device launches incorporating our products and in QTL revenues when licensees’ sales occur.
+Added: This has resulted in fluctuations in QCT revenues in advance
+Added: of and during device launches incorporating our products and in QTL revenues when licensees’ sales occur.
These trends may or may not continue in the future.
Further, the trends for QTL have been, and may in the future be, impacted by disputes and/or resolutions with licensees and/or governmental investigations or proceedings.
−Removed: Fiscal 2022 Overview and Other Recent Events
−Removed: Revenues were $44.2 billion, an increase of 32% compared to revenues of $33.6 billion in fiscal 2021, with net income of $12.9 billion, an increase of 43% compared to net income of $9.0 billion in fiscal 2021.
−Removed: Highlights from fiscal 2022 and other recent events included:
−Removed: • QCT revenues increased by 39% in fiscal 2022 compared to the prior year, primarily due to an increase in average selling prices and favorable mix toward higher-tier 5G products along with higher integrated circuit shipments in handsets, as well as higher IoT revenues.
−Removed: • On June 15, 2022, the General Court of the European Union issued a ruling annulling in its entirety the European Commission’s (EC) 2018 decision, which previously imposed a fine of 997 million euros for which we had provided financial guarantees to satisfy the obligation in lieu of cash payment.
−Removed: As a result, in the third quarter of fiscal 2022, we recorded a $1.1 billion benefit in other income and a $62 million reduction in interest expense resulting from the reversal of the accrued fine and the associated interest previously recorded.
−Removed: See “Notes to Consolidated Financial Statements, Note 7.
−Removed: Commitments and Contingencies.”
−Removed: • On October 4, 2021, we and SSW Partners entered into a definitive agreement to acquire Veoneer, Inc.
−Removed: The transaction closed on April 1, 2022.
−Removed: We funded substantially all of the total cash consideration paid in the transaction, which was approximately $4.7 billion.
−Removed: The operating results of the Non-Arriver businesses are reported as discontinued operations on a one quarter lag.
−Removed: Additional information related to this acquisition is included in this Annual Report in “Notes to Consolidated Financial Statements, Note 9.
−Removed: Acquisitions.”
+Added: Fiscal 2023 Overview
+Added: Revenues were $35.8 billion, a decrease of 19% compared to revenues of $44.2 billion in fiscal 2022, with net income of $7.2 billion, a decrease of 44% compared to net income of $12.9 billion in fiscal 2022.
+Added: Key items from fiscal 2023 included:
+Added: • Revenues were negatively impacted by the weakness in the macroeconomic environment (which negatively impacted consumer demand for smartphones and other devices that incorporate our products and technologies) and our customers drawing down on their inventory (which were at elevated levels).
+Added: • QCT revenues decreased by 19% in fiscal 2023 compared to the prior year, primarily due to lower handset and IoT revenues.
+Added: • QTL revenues decreased by 17% in fiscal 2023 compared to the prior year.
+Added: • We recorded other expenses of $862 million in fiscal 2023, primarily related to restructuring and restructuring-related charges, compared to a $1.1 billion benefit recorded to other income in fiscal 2022 resulting from the 2018 European Commission (EC) fine reversal.
+Added: • Our effective income tax rate was 1% in fiscal 2023 compared to 13% in the prior year, reflecting certain additional foreign-derived intangible income (FDII) deductions in fiscal 2023.
Results of Operations
4 unchanged sentences
$ 35,820 $ 44,200 $ (8,380)
−Removed: The increase in revenues in fiscal 2022 was primarily due to $10.4 billion in higher equipment and services revenues and $216 million in higher licensing revenues from our QCT segment.
+Added: The decrease in revenues in fiscal 2023 was primarily due to:
+Added: - $7.2 billion in lower equipment and services revenue from our QCT segment
+Added: - $1.1 billion in lower licensing revenues from our QTL segment
Costs and Expenses (in millions, except percentages)
2 unchanged sentences
Gross margin 56 % 58 %
−Removed: Gross margin percentage remained flat in fiscal 2022 primarily due to:
−Removed: + increase in QCT gross margin
−Removed: - decrease in higher margin QTL licensing revenues in proportion to QCT revenues
+Added: Gross margin percentage decreased in fiscal 2023 primarily due to a decrease in QCT gross margin.
2023 2022 Change
2 unchanged sentences
The increase in research and development expenses in fiscal 2023 was due to:
−Removed: + $856 million increase driven by higher costs related to the development of wireless and integrated circuit technologies (including 5G and application processor technologies), primarily driven by an increase in employee-related expenses
+ $375 million increase in share-based compensation expense
−Removed: - $141 million decrease in expenses driven by revaluation of our deferred compensation obligation on lower relative stock market performance (which resulted in a corresponding increase in net losses on deferred compensation plan assets within investment and other (expense) income, net due to the revaluation of the related assets)
+Added: + $125 million increase in expenses driven by revaluation of our deferred compensation obligation on higher relative stock market performance
+Added: + $124 million increase driven by higher costs related to the development of wireless and integrated circuit technologies (including 5G and application processor technologies), primarily driven by an increase in employee-related expenses (which included lower employee cash incentive program costs)
2023 2022 Change
1 unchanged sentence
% of revenues 7 % 6 %
−Removed: The increase in selling, general and administrative expenses in fiscal 2022 was primarily due to:
−Removed: + $110 million increase in acquisition-related expenses, primarily related to the Veoneer transaction
−Removed: + $94 million increase in employee-related expenses
−Removed: + $74 million increase in share-based compensation expense
−Removed: + $33 million increase in litigation costs
−Removed: + $32 million increase in sales and marketing expenses
−Removed: - $127 million decrease in expenses driven by revaluation of our deferred compensation obligation on lower relative stock market performance
+Added: The decrease in selling, general and administrative expenses in fiscal 2023 was primarily due to:
+Added: - $109 million decrease in employee-related expenses (which included lower employee cash incentive program costs)
+Added: - $95 million decrease in acquisition-related expenses, primarily related to the Veoneer transaction which closed in the third quarter of fiscal 2022
+Added: + $99 million increase in expenses driven by revaluation of our deferred compensation obligation on higher relative stock market performance
2023 2022 Change
−Removed: Other (income) expense $ (1,059) $ — $ (1,059)
+Added: Other expense (income)
+Added: $ 862 $ (1,059) $ 1,921
+Added: Other expense in fiscal 2023 consisted of $712 million in restructuring and restructuring-related charges (substantially all of which related to severance costs) resulting from certain cost reduction actions initiated in fiscal 2023, and a $150 million intangible asset impairment charge related to in-process research and development.
+Added: Additional information regarding our restructuring charges is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 2.
+Added: Composition of Certain Financial Statement Items - Other Income, Costs and Expenses.”
Other income in fiscal 2022 consisted of a $1.1 billion benefit resulting from the 2018 EC fine reversal.
−Removed: Interest Expense and Investment and Other (Expense) Income, Net (in millions)
+Added: Interest Expense and Investment and Other Income (Expense), Net (in millions)
2023 2022 Change
Interest expense $ 694 $ 490 $ 204
−Removed: Investment and other (expense) income, net
+Added: Investment and other income (expense), net
Interest and dividend income $ 313 $ 91 $ 222
−Removed: Net (losses) gains on marketable securities (363) 427 (790)
+Added: Net gains (losses) on marketable securities 75 (363) 438
Net gains on other investments 21 113 (92)
−Removed: Net (losses) gains on deferred compensation plan assets (141) 130 (271)
+Added: Net gains (losses) on deferred compensation plan assets 86 (141) 227
Impairment losses on other investments (132) (47) (85)
−Removed: Net losses on derivative instruments (37) (14) (23)
−Removed: Equity in net (losses) earnings of investees (7) 13 (20)
−Removed: Net gains (losses) on foreign currency transactions 19 (32) 51
+Added: Other (14) (25) 11
$ 349 $ (372) $ 721
−Removed: The decrease in interest expense in fiscal 2022 was primarily driven by a $62 million reversal of accrued interest recorded in the third quarter of fiscal 2022 related to the annulled 2018 EC fine.
+Added: Interest expense in fiscal 2022 included a $62 million reversal of accrued interest previously recorded related to the annulled 2018 EC fine.
Net losses on marketable securities in fiscal 2022 was primarily driven by the change in fair value of certain of our QSI marketable equity investments in early or growth stage companies.
−Removed: Net gains on marketable securities in fiscal 2021 was primarily driven by the initial public offerings of certain QSI equity investments.
−Removed: Net gains on other investments in fiscal 2021 was primarily driven by realized gains resulting from the sale of certain of our QSI non-marketable investments.
Income Tax Expense (in millions, except percentages)
1 unchanged sentence
federal statutory rate.
−Removed: Substantially all of our income is taxed in the U.S., of which a significant portion qualifies for preferential treatment as FDII (foreign-derived intangible income) at a 13% effective tax rate.
+Added: Substantially all of our income is taxed in the U.S., of which a significant portion qualifies for preferential treatment as FDII at a 13% effective tax rate.
+Added: Additional information regarding our annual effective tax rate (including discussion related to the impact of the new requirement to capitalize research and development expenditures for federal income tax purposes) is provided in this Annual Report in “Notes to Consolidated Financial Statements, Notes 3.
+Added: Income Taxes.”
Expected income tax provision at federal statutory tax rate $ 1,563 $ 3,150
−Removed: Benefit from FDII deduction (753) (550)
−Removed: Excess tax benefit associated with share-based awards (257) (265)
−Removed: Foreign currency losses related to foreign withholding tax receivable 243 12
−Removed: Nontaxable reversal of 2018 EC fine (224) —
+Added: Benefit from FDII deduction related to capitalizing research and development expenditures (598) —
+Added: Benefit from FDII deduction, excluding the impact of capitalizing research and development expenditures (447) (753)
Benefit related to the research and development tax credit (235) (224)
+Added: Benefit from fiscal 2021 and 2022 FDII deductions related to a change in sourcing of research and development expenditures (126) —
+Added: Benefit from releasing valuation allowance on unutilized foreign loss carryforwards (114) —
+Added: Foreign currency (gains) losses related to foreign withholding tax receivable (66) 243
+Added: Shortfall (excess) tax benefit associated with share-based awards 3 (257)
+Added: Nontaxable reversal of 2018 EC fine — (224)
Income tax expense $ 104 $ 2,012
Effective tax rate 1 % 13 %
−Removed: Unrecognized tax benefits were $2.2 billion and $2.1 billion at September 25, 2022 and September 26, 2021, respectively.
−Removed: The increase in unrecognized tax benefits in fiscal 2022 was primarily due to expected refunds of Korean withholding taxes previously paid as licensees in Korea continue to withhold taxes on payments due under their licensing agreements at a rate higher than we believe is owed (which had an insignificant impact to our income tax provision).
−Removed: If successful, the refund will result in a corresponding reduction in U.S.
−Removed: foreign tax credits.
−Removed: We are subject to income taxes in the U.S.
−Removed: and numerous foreign jurisdictions and are currently under examination by various tax authorities worldwide, primarily related to transfer pricing.
−Removed: These examinations are at various stages with respect to assessments, claims, deficiencies and refunds.
−Removed: 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 giving rise to a revision become known.
−Removed: At September 25, 2022, we believe our reserves are adequate based on facts known.
−Removed: However, the final determination of tax audits and any related legal proceedings could materially differ from amounts reflected in our income tax provision and the related accruals.
−Removed: Beginning in fiscal 2023, for federal income tax purposes, we are required to capitalize and amortize domestic research and development expenditures over five years and foreign research and development expenditures over fifteen years.
−Removed: Prior to such date, such expenditures are deducted as incurred.
−Removed: If this requirement is not delayed or repealed, our cash flow generated from operations will be adversely affected due to significantly higher cash tax payments.
−Removed: However, since the resulting deferred tax asset will be established at the statutory rate of 21% (rather than the effective rate of 13% to 16% after considering the FDII deduction), capitalization will favorably affect our provision for income taxes and results of operations.
−Removed: The adverse cash flow impact and favorable tax provision impact will diminish in future years as capitalized research and development expenditures amortize.
−Removed: In August 2022, the Inflation Reduction Act (IRA) was enacted in the United States, which included, among other items, a 15% book minimum tax on adjusted financial statement earnings beginning in fiscal 2024.
−Removed: We do not expect this provision to have a material impact on our provision for income taxes, results of operations or cash flows.
−Removed: If the requirement to capitalize and amortize research and development expenditures beginning in fiscal 2023 is delayed or repealed, our cash flows may be impacted in future years under the IRA.
Discontinued Operations (in millions)
1 unchanged sentence
Discontinued operations, net of income taxes $ (107) $ (50) $ (57)
−Removed: Discontinued operations in fiscal 2022 related to net losses from the Non-Arriver businesses.
+Added: Discontinued operations in fiscal 2023 and 2022 primarily related to net losses from the Non-Arriver businesses.
+Added: Fiscal 2023 also included a gain on the sale of the Active Safety business and certain write-down charges related to the Restraint Control Systems business based on the expected sales price, the individual and aggregate amounts of which were not material.
Information regarding the Non-Arriver businesses is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 9.
−Removed: Acquisitions.”
+Added: Acquisitions and Divestitures.”
Segment Results
3 unchanged sentences
2023 2022 Change
−Removed: Handsets (1) $ 25,027 $ 16,830 $ 8,197
−Removed: RFFE (2) 4,330 4,158 172
−Removed: Automotive (3) 1,372 975 397
+Added: $ 22,570 $ 28,815 $ (6,245)
+Added: 1,872 1,509 363
IoT (internet of things)
+Added: 5,940 7,353 (1,413)
Total revenues (1)
−Removed: EBT (5) $ 12,837 $ 7,763 $ 5,074
+Added: $ 30,382 $ 37,677 $ (7,295)
+Added: $ 7,924 $ 12,837 $ (4,913)
EBT as a % of revenues 26 % 34 % -8 points
−Removed: (1) Includes revenues from products sold for use in mobile handsets, excluding RFFE (radio frequency front-end) components.
−Removed: (2) Includes all revenues from sales of 4G, 5G sub-6 and 5G millimeter wave RFFE products (a substantial portion of which are sold for use in mobile handsets) and excludes radio frequency transceiver components.
−Removed: (3) Includes revenues from products sold for use in automobiles, including connectivity, digital cockpit and advanced driver assistance and automated driving.
−Removed: (4) Primarily includes products sold for use in the following industries and applications:
−Removed: consumer (including computing, voice and music and XR), edge networking (including mobile broadband and wireless access points) and industrial (including handhelds, retail, transportation and logistics and utilities).
−Removed: (5) Earnings (loss) before income taxes.
+Added: (1) Beginning in the first quarter of fiscal 2023, QCT RFFE (radio frequency front-end) revenues, which were previously presented as a separate revenue stream, are now included within our Handsets, Automotive and internet of things (IoT) revenue streams as applicable.
+Added: Prior period information has been recast to reflect this change.
+Added: Descriptions of our three QCT revenue streams can be found in this Annual Report in “Notes to Consolidated Financial Statements, Note 2.
+Added: Composition of Certain Financial Statement Items.”
+Added: (2) Earnings before income taxes.
Substantially all of QCT’s revenues consist of equipment and services revenues, which were $29.9 billion and $37.0 billion in fiscal 2023 and 2022, respectively.
−Removed: QCT handsets, automotive and IoT revenues mostly relate to sales of our Snapdragon platforms (which include processors and modems), stand-alone Mobile Data Modems, radio frequency transceiver, power management and wireless connectivity integrated chipsets.
−Removed: The increase in QCT revenues in fiscal 2022 was primarily due to:
−Removed: + higher handset revenues, primarily driven by $6.6 billion in higher revenues per integrated circuit from increases in average selling prices and favorable mix toward higher-tier 5G products and $1.3 billion in higher integrated circuit shipments to major OEMs
−Removed: + higher RFFE revenues, driven by an increase in demand for 4G/5G products from major OEMs
+Added: QCT handsets, automotive and IoT revenues mostly relate to sales of our Snapdragon platforms (which include processors and modems), stand-alone Mobile Data Modems, radio frequency transceiver, power management and wireless connectivity integrated chipsets as well as sales of 4G, 5G sub 6 and 5G millimeter wave RFFE products.
+Added: The decrease in QCT revenues in fiscal 2023 was primarily due to:
+Added: - lower handset revenues, primarily driven by $7.9 billion in lower chipset shipments to certain major OEMs (primarily driven by the negative effects of the macroeconomic environment weakness and customers drawing down on their elevated inventory levels), partially offset by $1.7 billion in higher revenues per chipset primarily driven by favorable mix and increases in average selling prices
+Added: - lower IoT revenues, primarily driven by a decrease in demand across consumer, edge networking, and industrial products (primarily driven by the negative effects of the macroeconomic environment weakness and elevated customer inventory levels)
+ higher automotive revenues, primarily driven by an increase in demand for digital cockpit products
−Removed: + higher IoT revenues across consumer, edge networking and industrial products, driven by a $951 million increase in demand, with the remaining increase of $941 million primarily due to favorable mix and higher average selling prices
−Removed: QCT EBT as a percentage of revenues increased in fiscal 2022 due to:
−Removed: + higher revenues
−Removed: + higher gross margin percentage, primarily driven by higher average selling price and favorable mix towards higher-tier 5G products, partially offset by higher product costs
−Removed: - higher operating expenses, primarily driven by higher research and development expenses
+Added: QCT EBT as a percentage of revenues decreased in fiscal 2023 due to:
+Added: - lower revenues
+Added: - lower gross margin percentage, primarily driven by increased product costs
QTL Segment (in millions, except percentages)
2 unchanged sentences
EBT 3,628 4,628 (1,000)
−Removed: EBT as a % of revenues 73 % 73 % —
−Removed: The increase in QTL licensing revenues in fiscal 2022 was primarily due to:
−Removed: + $308 million increase in estimated revenues per unit, which was primarily driven by favorable mix, including 5G
−Removed: - $299 million decrease in estimated sales of 3G/4G/5G-based multimode products
−Removed: QTL EBT as a percentage of revenues remained flat in fiscal 2022.
+Added: EBT as a % of revenues 68 % 73 % -5 points
+Added: The decrease in QTL licensing revenues in fiscal 2023 was primarily due to:
+Added: - $730 million decrease in estimated sales of 3G/4G/5G-based multimode products, primarily driven by the macroeconomic environment weakness
+Added: - $205 million decrease in revenues from the ending of the recognition of certain upfront license fee consideration in the first quarter of fiscal 2023 from our long-term license agreement with Nokia
+Added: QTL EBT as a percentage of revenues decreased in fiscal 2023 primarily due to lower revenues.
QSI Segment (in millions)
1 unchanged sentence
Equipment and services revenues $ 28 $ 31 $ (3)
−Removed: EBT (279) 916 (1,195)
−Removed: The decrease in QSI EBT in fiscal 2022 was primarily due to a $1.1 billion decrease resulting from net losses on investments in fiscal 2022 compared to net gains on investments in fiscal 2021, which were primarily driven by the change in fair value of certain of our marketable equity investments in early or growth stage companies and lower realized gains resulting from the sale of certain of our non-marketable investments.
+Added: Loss before income taxes
+Added: (12) (279) 267
+Added: The decrease in QSI loss before income taxes in fiscal 2023 was primarily due to a $350 million decrease in net losses on investments, which was primarily driven by the change in fair value of certain of our marketable equity investments in early or growth stage companies, partially offset by a $61 million increase in impairment losses on certain investments.
Looking Forward
3 unchanged sentences
As we look forward to the next several quarters:
−Removed: • We expect continued weakness in the macroeconomic environment (which will continue to negatively impact consumer demand for smartphones and other devices that incorporate our products and technologies) and our customers to draw down on their inventory (which is at elevated levels given the rapid deceleration in consumer demand and the easing of supply constraints, and which may take the next couple quarters to resolve), and that both of these dynamics will have a negative impact on our revenues, results of operations and cash flows compared to the prior year.
−Removed: • While capacity constraints have largely abated, we expect to continue to see price increases from certain of our key semiconductor wafer suppliers.
+Added: • We expect certain customers will continue to draw down on their inventory (which remains at elevated levels), which will continue to have a negative impact on our revenues, results of operations and cash flows.
+Added: This dynamic, along with weaker consumer demand for smartphones and other devices that incorporate our products and technologies in fiscal 2023 relative to the prior year, have also contributed to our elevated inventory levels and contribute to the inherent uncertainties in estimating future customer demand, which may increase excess or obsolete
+Added: inventory or reserve charges if we overestimate such demand, negatively impacting our results of operations and cash flows.
+Added: • We expect to continue to see product cost increases from certain of our key semiconductor wafer suppliers.
• We expect commercial 5G network deployments and device launches will continue.
−Removed: • We expect continued intense competition, particularly in China.
+Added: • We expect continued intense competition, including from vertical integration by certain of our customers (for example, Samsung and Huawei).
+Added: • Given the continued uncertainty in the macroeconomic and demand environment, we have initiated certain restructuring actions in the fourth quarter of fiscal 2023 to enable investments in key growth and diversification opportunities.
+Added: We anticipate these actions to be substantially completed in the first half of fiscal 2024.
• Current U.S./China trade relations and/or national security protection policies may negatively impact our business, growth prospects and results of operations.
See “Risk Factors” in this Annual Report, including the Risk Factor titled “ A significant portion of our business is concentrated in China, and the risks of such concentration are exacerbated by U.S./China trade and national security tensions.”
−Removed: The degree to which the COVID-19 pandemic impacts our business, financial condition and results of operations will depend on future developments, which are highly uncertain.
−Removed: See “Risk Factors” in this Annual Report, specifically the Risk Factor titled “ The COVID-19 pandemic, or a similar health crisis, may impact our business or results of operations in the future.”
+Added: Further, while future developments are highly uncertain, we currently do not expect a significant impact on our results of operations in the future due to the Israel-Hamas war.
+Added: See “Risk Factors” in this Annual Report, specifically the Risk Factor titled “ Geopolitical conflicts, natural disasters, pandemics and other health crises, and other factors outside of our control, could significantly disrupt 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 industry and governments as to the benefits of our licensing programs and our extensive technology investments in promoting a highly competitive and innovative wireless industry.
4 unchanged sentences
Liquidity and Capital Resources
−Removed: Our principal sources of liquidity are our existing cash, cash equivalents and marketable securities, cash generated from operations and cash provided by our debt programs.
+Added: Our principal sources of liquidity are our existing cash, cash equivalents and marketable securities, cash generated from operations and cash provided by our debt programs, which we believe will satisfy our working and other capital requirements for at least the next 12 months based on our current business plans.
The following table presents selected financial information related to our liquidity as of and for the years ended September 24, 2023 and September 25, 2022 (in millions):
4 unchanged sentences
Cash, cash equivalents and marketable securities $ 11,324 $ 6,382 $ 4,942
−Removed: (1) Excludes $326 million of cash and cash equivalents classified as held for sale (included in other current assets) at September 25, 2022.
+Added: (1) Excludes $77 million and $326 million of cash and cash equivalents classified as held for sale (included in other current assets) at September 24, 2023 and September 25, 2022, respectively.
2023 2022 Change
Net cash provided by operating activities $ 11,299 $ 9,096 $ 2,203
−Removed: Net cash used by investing activities (5,804) (3,356) (2,448)
+Added: Net cash provided (used) by investing activities
+Added: 762 (5,804) 6,566
Net cash used by financing activities (6,663) (7,196) 533
Cash, cash equivalents and marketable securities.
−Removed: The net decrease in cash, cash equivalents and marketable securities was primarily due to $4.9 billion in cash paid for acquisitions and other investments, net of cash acquired (primarily related to Veoneer), $3.2 billion in cash dividends paid, $3.1 billion in payments to repurchase shares of our common stock, $2.3 billion in capital expenditures and $766 million in payments of tax withholdings related to vesting of share-based awards.
−Removed: This was partially offset by net cash provided by operating activities, which was negatively impacted by advanced payments of $2.3 billion made to suppliers of our integrated circuit products under multi-year capacity commitments (which were included within other current assets and other assets), as well as $4.5 billion of net changes in other operating assets and liabilities (excluding the reversal of the 2018 EC fine), primarily consisting of increased working capital requirements, including higher inventory and related operating liabilities and an increase in accounts receivable as a result of higher revenues combined with the timing of integrated circuit shipments during the period (net of an increase in amounts accrued for customer incentive arrangements recorded as a reduction to accounts receivable).
−Removed: We may continue to see elevated working capital requirements in the near term.
−Removed: In May 2022, we issued an aggregate principal amount of $1.5 billion of unsecured fixed-rate notes with varying maturities.
−Removed: The net proceeds, together with cash on hand, were used to repay $1.5 billion of fixed-rate notes that matured in May 2022.
−Removed: At September 25, 2022 , we had $15.4 billion of principal floating- and fixed-rate notes outstanding, $1.4 billion of which matures in January 2023.
+Added: The net increase in cash, cash equivalents and marketable securities was primarily due to net cash provided by operating activities, the issuance of $1.9 billion of unsecured fixed-rate notes, $1.5 billion in net cash proceeds from the sale of the Active Safety business and $434 million in proceeds from the issuance of common stock (primarily under our Employee Stock Purchase Plan), partially offset by $3.5 billion in cash dividends paid, $3.0 billion in payments to repurchase shares of our common stock, $1.5 billion in capital expenditures, $1.4 billion repayments of notes that matured in January 2023, $521 million in payments of tax withholdings related to the vesting of share-based awards and $498 million in net repayments of commercial paper.
+Added: Net changes in our operating assets and liabilities positively impacted our operating cash flows primarily from a decrease in accounts receivable as a result of lower revenues and a decrease in other assets primarily driven by utilization of prior
+Added: advanced supply agreement payments (which payments were primarily made during 2022 and 2021) and certain settlement payments received associated with our forward starting interest rate swaps, partially offset by lower operating liabilities resulting from lower purchases due to lower customer demand.
+Added: In the first quarter of fiscal 2023, we issued unsecured fixed-rate notes, consisting of $700 million of fixed-rate 5.40% notes and $1.2 billion of fixed-rate 6.00% notes (collectively, November 2022 Notes) that mature on May 20, 2033 and May 20, 2053, respectively.
+Added: The net proceeds from the November 2022 Notes were used to repay $946 million of fixed-rate notes and $500 million of floating-rate notes that matured in January 2023 and the excess was used for general corporate purposes.
+Added: At September 24, 2023 , we had $15.9 billion of principal fixed-rate notes outstanding, $914 million of which matures in May 2024.
The remaining debt has maturity dates in 2025 through 2053.
1 unchanged sentence
Net proceeds from this program are used for general corporate purposes.
−Removed: At September 25, 2022 , we had $499 million of commercial paper outstanding.
+Added: At September 24, 2023 , we had no amounts of commercial paper outstanding.
We also have a Revolving Credit Facility, which provides for unsecured revolving facility loans, swing line loans and letters of credit in an aggregate amount of up to $4.3 billion, which expires on December 8, 2025.
5 unchanged sentences
At September 24, 2023 , we estimated remaining future payments of $1.5 billion for a one-time U.S.
−Removed: repatriation tax accrued in fiscal 2018, after application of certain tax credits, which is payable in installments over the next four years.
−Removed: At September 25, 2022 , other current liabilities included $207 million for the next installment due in January 2023.
−Removed: Beginning in fiscal 2023, we are required to capitalize and amortize research and development expenditures for federal income tax purposes.
−Removed: If this requirement is not delayed or repealed, our cash flow generated from operations will be adversely affected due to significantly higher cash tax payments in the near term.
+Added: repatriation tax accrued in fiscal 2018, after application of certain tax credits, which is payable in installments over the next three years.
+Added: At September 24, 2023 , other current liabilities included $391 million for the next installment due in January 2024 as well as $1.0 billion rela ted to certain postponed U.S.
+Added: federal income tax-payments from fiscal 2023, which were paid in October 2023.
+Added: Beginning in fiscal 2023, for federal income tax purposes, we are required to capitalize and amortize domestic research and development expenditures over five years and foreign research and development expenditures over fifteen years (such expenditures were previously deducted as incurred).
+Added: Our cash flows from operations will be adversely affected due to significantly higher cash tax payments.
Additional information regarding our income taxes is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 3.
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Our stock repurchase programs are subject to periodic evaluations to determine when and if repurchases are in the best interests of our stockholders, and we may accelerate, suspend, delay or discontinue repurchases at any time.
−Removed: On October 14, 2022, we announced a cash dividend of $0.75 per share on our common stock, payable on December 15, 2022 to stockholders of record as of the close of business on December 1, 2022.
+Added: On October 13, 2023, we announced a cash dividend of $0.80 per share on our common stock, payable on December 14, 2023 to stockholders of record as of the close of business on November 30, 2023.
We currently 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, among other factors.
Additional Capital Requirements .
−Removed: We believe our cash, cash equivalents and marketable securities, our expected cash flow generated from operations and our expected financing activities will satisfy our working and other capital requirements for at least the next 12 months based on our current business plans.
Recent and expected working and other capital requirements, in addition to the above matters, also include the items described below:
−Removed: • Our purchase obligations at September 25, 2022 , which primarily relate to purchase commitments with certain suppliers of our integrated circuit products, including those under multi-year capacity commitments, and certain other expenses, some of which relate to research and development activities and capital expenditures, totaled $24.5 billion, of which, $13.3 billion is expected to be paid in the next 12 months.
−Removed: We expect a significant decrease in advance payments made under our multi-year capacity commitments as compared to fiscal 2022.
+Added: • Our purchase obligations at September 24, 2023 , which primarily relate to purchase commitments with certain suppliers of our integrated circuit products, including those under multi-year capacity commitments, totaled $12.2 billion, of which, $6.8 billion is expected to be paid in the next 12 months.
• Our research and development expenditures were $8.8 billion in fiscal 2023 and $8.2 billion in fiscal 2022.
• Cash outflows for capital expenditures were $1.5 billion in fiscal 2023 and $2.3 billion in fiscal 2022.
+Added: We reduced our capital expenditures in fiscal 2023 in response to the weakness in the macroeconomic environment (which negatively impacted consumer demand for smartphones and other devices that incorporate our products and technologies).
• Amounts related to future lease payments for operating lease obligations at September 24, 2023 totaled $872 million, with $116 million expected to be paid within the next 12 months.
+Added: • In the fourth quarter of fiscal 2023, we accrued $385 million of severance costs, substantially all of which is expected to be paid in the first half of fiscal 2024.
• We expect to continue making strategic investments and acquisitions, the amounts of which could vary significantly.
−Removed: For further information related to our most recent acquisitions, including details regarding the Non-Arriver businesses presented as held for sale, see “Notes to Consolidated Financial Statements, Note 9.
−Removed: Acquisitions” in this Annual Report.
Further, regulatory authorities in certain jurisdictions have investigated our business practices and instituted proceedings against us and they or other regulatory authorities may do so in the future.
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We estimate and recognize sales-based royalties on such licensed products in the period in which the licensees’ sales occur, which is based largely on preliminary royalty estimates provided by our licensees.
−Removed: For fiscal 2022 and
−Removed: 2021, actual amounts for sales-based royalties have been materially consistent with such estimates, and no significant reversals of revenues have been required as a result of adjustments to prior period royalty estimates.
+Added: For fiscal 2023 and 2022, actual amounts for sales-based royalties have been materially consistent with such estimates, and no significant reversals of revenues have been required as a result of adjustments to prior period royalty estimates.
Impairment of Non-marketable Equity Investments.
We monitor our investments for events or circumstances that could indicate impairment, including those that result from observable price adjustments.
−Removed: In fiscal 2021, and to a lesser extent in fiscal 2022, significant evaluation and judgments were required in determining whether such investments were impaired due to the continuing effects of the COVID-19 pandemic (as well as the effects of other macroeconomic factors), and if so, the extent of such impairment.
−Removed: This included, among other items:
−Removed: (i) assessing the business impacts that COVID-19 had on our investees, including taking into consideration the investee’s industry and geographic location and the impact to its customers, suppliers and employees, as applicable;
−Removed: (ii) evaluating the investees’ ability to respond to the impacts of COVID-19, including any significant deterioration in the investee’s financial condition and cash flows, as well as assessing liquidity and/or going concern risks;
−Removed: and (iii) considering any appreciation in fair value that has not been recognized in the carrying values of such investments.
+Added: Key considerations in this assessment include the investee’s financial and liquidity position and business forecasts (including their ability to respond to any significant deterioration), industry performance, development and/or market acceptance of the investee’s products or technologies, as well as considering any appreciation in fair value that has not been recognized in the carrying values of such investments and other relevant events and factors (such as the effects of the macroeconomic environment in fiscal 2023 and 2022).
In fiscal 2023 and 2022, there were no significant impairment losses or adjustments to our previous judgments and estimates recorded.
−Removed: We measure inventory at the lower of cost or net realizable value considering judgments and estimates related to future customer demand and other market conditions, such as the impact of certain capacity constraints experienced across the semiconductor industry through the third quarter of fiscal 2022 and in fiscal 2021, as well as the impact of the macroeconomic environment in fiscal 2022.
+Added: We measure inventory at the lower of cost or net realizable value considering judgments and estimates related to future customer demand and other market conditions, such as the impact of certain capacity constraints experienced across the semiconductor industry through the third quarter of fiscal 2022, as well as the impact of the macroeconomic environment in fiscal 2022 and 2023, which negatively impacted consumer demand for smartphones and other devices that incorporate our products and technologies.
Although we believe these estimates are reasonable, any significant changes in customer demand that are less favorable than our previous estimates may require additional inventory write-downs and would be reflected in cost of sales resulting in a negative impact to our gross margin in that period.
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We monitor our goodwill, other indefinite-lived assets and long-lived assets for the existence of impairment indicators and apply judgments in the valuation methods and underlying assumptions utilized in such assessments.
−Removed: During fiscal 2022 and fiscal 2021, impairment charges for long-lived assets were not material.
+Added: During fiscal 2023, we recorded total impairment charges of approximately $400 million related to certain long-lived and other indefinite-lived assets.
+Added: Such impairments (and the related remaining asset values) were not individually material.
+Added: During fiscal 2022, there were no material impairment charges for long-lived or indefinite-lived assets.
Additionally, the estimated fair values of our QCT and QTL reporting units, based on our qualitative assessment, were substantially in excess of their respective carrying values at September 24, 2023.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.