SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community
 
| More

TMCNet:  MARVELL TECHNOLOGY GROUP LTD - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations

[November 29, 2012]

MARVELL TECHNOLOGY GROUP LTD - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations

(Edgar Glimpses Via Acquire Media NewsEdge) This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are subject to the "safe harbor" created by those sections. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results to differ materially from those implied by the forward-looking statements. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "can," and similar expressions identify such forward-looking statements. We make a number of forward-looking statements that relate to future periods and include statements relating to our anticipation that the rate of new orders and shipments may vary significantly from quarter to quarter; our expectations regarding industry trends; our expectations regarding the impact of the flooding in Thailand; our expectations regarding our inventory levels; our expectations regarding the amount of our future sales in Asia; our expectations regarding competition; our expectations relating to the protection of our intellectual property; our expectations regarding the amount of customer concentration in the future; our plans and expectations regarding our auction rate securities; our expectations regarding acquisitions, investments, strategic alliances and joint ventures; our expectations regarding net revenue, cost of goods sold as a percentage of revenue and operating expenses for the fourth quarter ending February 2, 2013 compared with the third quarter ended October 27, 2012; our expectations regarding the growth of solid state drive revenue; our expectations regarding the impact of legal proceedings and claims; our ability to meet our capital needs for at least the next 12 months; our ability to attract and retain highly skilled personnel; our expectations regarding future growth opportunities; our plan regarding forward exchange contracts and the effect of foreign exchange rates; our expectations regarding unrecognized tax benefits; the effect of recent accounting pronouncements and changes in taxation rules; our expectation regarding the effectiveness of our hedges of foreign currency exposures; our expectations that quarterly operating results will fluctuate from quarter to quarter; our expectations regarding the current economic environment; our expectations regarding arrangements with suppliers; our expectations regarding our ability to develop and introduce new products and achieve market acceptance of our products; our expectations regarding pricing; our expectations regarding demand for our products and the impact of seasonality on demand; our expectations regarding defects; our expectations regarding the implementation and improvement of operational and financial systems, as well as the implementation of additional procedures and other internal management systems; our expectations regarding gross margin and the events that may cause gross margin to fluctuate; our expectations to transition our semiconductor products to increasingly smaller line width geometries; our expectations regarding the portion of our operations and sales outside of the United States; our expectations regarding the adequacy of our internal control over financial reporting; our expectations regarding future impairment review of our goodwill and intangible assets; and the anticipated features and benefits of our technology solutions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Factors that could cause actual results to differ materially from those predicted, include but are not limited to, the impact of international conflict and continued economic volatility in either domestic or foreign markets; our dependence upon the hard disk drive and mobile and wireless markets, which are highly cyclical and intensely competitive; our ability to successfully compete in the markets in which we serve; the outcome of pending or future litigation and legal proceedings; our ability to scale our operations in response to changes in demand for existing or new products and services; our maintenance of an effective system of internal controls; our dependence on a small number of customers; our ability and our customers' ability to develop new and enhanced products; our success in integrating businesses we acquire and the impact such acquisitions may have on our operating results; our ability to estimate customer demand and future sales accurately; the success of our strategic relationships; our reliance on independent foundries and subcontractors for the manufacture, assembly and testing of our products; our ability to manage future growth; the development and evolution of markets for our integrated circuits; our ability to protect our intellectual property; the impact of any change in our application of the United States federal income tax laws and the loss of any beneficial tax treatment that we currently enjoy; the impact of changes in international financial and regulatory conditions and the impact of lengthy and expensive product sales cycles. Additional factors which could cause actual results to differ materially include those set forth in the following discussion, as well as the risks discussed in Part II, Item 1A, "Risk Factors," and other sections of this Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date hereof. Unless required by law, we undertake no obligation to update any forward-looking statements.



Overview We are a leading global semiconductor provider of high performance application specific standard products. Our core strength of expertise is the development of complex System-on-a-Chip devices leveraging our extensive portfolio of technology intellectual property in the areas of analog, mixed-signal, digital signal processing and embedded ARM-based microprocessor integrated circuits. We also develop platforms that we define as integrated hardware along with software that incorporates digital computing technologies designed and configured to provide an optimized computing solution compared to individual components. Our broad product portfolio includes devices for data storage, enterprise-class Ethernet data switching, Ethernet physical-layer transceivers, handheld cellular, Ethernet-based wireless networking, personal area networking, Ethernet-based PC connectivity, control plane communications controllers, video-image processing and power management solutions. Our products serve diverse applications used in carrier, metropolitan, enterprise and PC-client data communications and storage systems. Additionally, we serve the consumer electronics market for the convergence of voice, video and data applications. We are a fabless integrated circuit company, which means that we rely on independent, third party contractors to perform manufacturing, assembly and test functions. This approach allows us to focus on designing, developing and marketing our products and significantly reduces the amount of capital we need to invest in manufacturing products.

22-------------------------------------------------------------------------------- Table of Contents A significant number of our products are being incorporated into consumer electronics products, including gaming devices, which are subject to significant seasonality and fluctuations in demand. Holiday and back to school buying trends may at times negatively impact our results in the first and fourth quarters and positively impact our results in the second and third quarters of our fiscal years.

A relatively large portion of our sales have historically been made on the basis of purchase orders rather than long-term agreements. In addition, the sales cycle for our products is long, which may cause us to experience a delay between the time we incur expenses and the time revenue is generated from these expenditures. We anticipate that the rate of new orders may vary significantly from quarter to quarter. Consequently, if anticipated sales and shipments in any quarter do not occur when expected, expenses and inventory levels could be disproportionately high, and our operating results for that quarter and future quarters may be adversely affected.

In this Quarterly Report on Form 10-Q, we refer to the fiscal year ended February 2, 2008 as fiscal 2008, the fiscal year ended January 31, 2009 as fiscal 2009, the fiscal year ended January 30, 2010 as fiscal 2010, the fiscal year ended January 29, 2011 as fiscal 2011, the fiscal year ended January 28, 2012 as fiscal 2012 and the fiscal year ending February 2, 2013 as fiscal 2013.

Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates, and such differences could affect the results of operations reported in future periods.

For a description of our critical accounting policies and estimates, please refer to the "Critical Accounting Policies and Estimates" section of our Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended January 28, 2012.

Results of Operations Our revenue during the third quarter of fiscal 2013 was down by 4% compared to the prior quarter and 18% compared to the third quarter of fiscal 2012.

Continued slowdown in the global economy during the third quarter resulted in a weaker PC market than previously anticipated as we experienced lower demand from our hard disk drive ("HDD") customers. We also experienced lower demand for wireless connectivity products due to an inventory correction at a major customer for wireless access points. We continued to see a decline in revenue for our mobile products as we are in a product transition phase within the TD-SCDMA market in China. Revenue for our solid state drive ("SSD") products continued to grow as our solutions get adopted in the market.

Despite the lower revenue levels that we have experienced in recent periods, we remain confident in our investments and multiple near-term and long-term growth opportunities such as: • In the mobile market, we believe we have a very strong roadmap based on our unified platform. We are encouraged by the early design activities from our customers who are building phones for both the TD-SCDMA and WCDMA markets. We believe this unified platform will allow us to effectively address both the top OEMs and the rapidly growing whitebox market. We expect customers to begin to bring their products to market early next year. In addition, we are now accelerating our TD and FDD-LTE roadmap and we expect customers to upgrade to these 4G platform solutions over the course of the next year to 18 months.

• In wireless connectivity, we have historically focused on providing integrated 1x1 combo solutions for the mobile market, which demands the lowest power consumption, and high-performance 4x4 solutions for the enterprise market, which demands the highest possible throughput. In addition to our continued strong presence in the 1x1 and 4x4 markets, we are now expanding our footprint by offering integrated 2x2 combo solutions for the tablet and ultrabook markets.

• In our storage business, despite the overall demand challenges within the PC market, we gained market share within HDDs as we have seen strong growth for our 500 gigabyte per platter products. In addition, we have continued to see strong growth for our SSD products. Although a smaller portion of our overall storage revenue, SSD revenue have continued to grow over the past few quarters, and as this market continues to expand and our customers continue to gain success, we will continue to benefit.

• In the networking market, we have outperformed the market during the past year, growing revenue by introducing products in new growth areas such as in passive optical network and 10 gigabyte switching, as well as the programmable network processers introduced following our acquisition of Xelerated. We believe as networks continue to evolve, we will have even more opportunities.

23 -------------------------------------------------------------------------------- Table of Contents Our financial position is strong and we also remain committed to deliver shareholder value through our share repurchase and dividend programs.

• Our cash, cash equivalents and short-term investments were $2.0 billion at October 27, 2012 and generated cash flow from operations of $136 million during the third quarter of fiscal 2013.

• We paid a dividend of $0.06 per share in the third quarter, and recently announced another dividend of $0.06 per share to be paid during the fourth quarter of fiscal 2013.

• We repurchased an additional 22.9 million of common shares for $203.0 million in cash during the quarter.

The following table sets forth information derived from our unaudited condensed consolidated statements of operations expressed as a percentage of net revenue: Three Months Ended Nine Months Ended October 27, October 29, October 27, October 29, 2012 2011 2012 2011 Net revenue 100.0 % 100.0 % 100.0 % 100.0 % Operating costs and expenses: Cost of goods sold 48.0 43.4 46.9 42.4 Research and development 33.8 28.0 32.7 28.6 Selling and marketing 4.9 4.3 5.0 4.5 General and administrative 3.1 3.0 3.2 2.9 Amortization and write-off of acquired intangible assets 1.7 1.2 1.7 1.4 Total operating costs and expenses 91.5 79.9 89.5 79.8 Operating income 8.5 20.1 10.5 20.2 Interest and other income (expense), net 0.3 0.9 0.4 0.3 Income before income taxes 8.8 21.0 10.9 20.5 Provision for income taxes 0.0 0.5 0.2 0.3 Net income 8.8 % 20.5 % 10.7 % 20.2 % Three and Nine Months Ended October 27, 2012 and October 29, 2011 Net Revenue Three Months Ended Nine Months Ended October 27, October 29, % October 27, October 29, % 2012 2011 Change 2012 2011 Change (in thousands, except percentage) Net revenue $ 780,881 $ 950,417 (17.8 ) % $ 2,393,336 $ 2,650,339 (9.7 )% Net revenue for the three months ended October 27, 2012 declined 17.8% compared to the three months ended October 29, 2011 primarily due to declines in the storage end market. The total available market for the HDD market declined compared to the prior year as the global market for PC's contracted. Slightly offsetting this decline, our sales of SSD products increased significantly in the three months ended October 27, 2012 compared to the year-ago period as our products have begun to gain adoption in the market. Within our mobile and wireless end markets, net revenue from our leading North American handset customer declined compared to the year-ago period due to the continued competitive challenges that they face.

Net revenue for the nine months ended October 27, 2012 compared to the nine months ended October 29, 2011 declined 9.7%. In addition to the impacts of the above factors, the nine months ended October 27, 2012 benefited from the ramp of our TD-SCDMA products during the end of fiscal 2012 and beginning of fiscal 2013.

We currently expect overall net revenue for the three months ending February 2, 2013 to be in the range of $700 million to $740 million.

24-------------------------------------------------------------------------------- Table of Contents Historically, a relatively small number of customers have accounted for a significant portion of our net revenue. Net revenue attributable to significant end customers is presented in the following table as a percentage of net revenue: Three Months Ended Nine Months Ended October 27, July 28, April 28, October 27, Customer 2012 2012 2012 2012 Western Digital 24 % 26 % 23 % 24 % Toshiba * 10 % 10 % 10 % Three Months Ended Nine Months Ended October 29, July 29, April 29, October 29, Customer 2011 2011 2011 2011 Western Digital 26 % 27 % 25 % 26 % * Less than 10% of net revenue In May 2012, Western Digital acquired Hitachi's HDD unit. For compatibility purposes, we have presented the percentage of net revenue for Western Digital in the above tables to include the net revenue of the Hitachi HDD unit as if the acquisition had occurred at the beginning of the earliest period presented. In addition to the end customers reported above, one distributor accounted for more than 10% of our net revenue for the three and nine months ended October 27, 2012. For the comparable three and nine months ended October 29, 2011, no single distributor accounted for more than 10% of our net revenue.

Sales to customers located in Asia represented 92% and 90% of our net revenue for the three and nine months ended October 27, 2012, respectively, compared to 90% and 87% of our net revenue for the three and nine months ended October 29, 2011, respectively. A large portion of our OEM partners use contract manufacturing companies in Asia to manufacture their products. These contract manufacturing companies are generally considered our direct customer. Therefore, we expect that a significant portion of our net revenue will continue to come from customers in Asia.

Cost of Goods Sold Three Months Ended Nine Months Ended October 27, October 29, % October 27, October 29, % 2012 2011 Change 2012 2011 Change (in thousands, except percentage) Cost of goods sold $ 374,503 $ 412,100 (9.1 )% $ 1,122,664 $ 1,124,692 (0.2 )% % of net revenue 48.0 % 43.4 % 46.9 % 42.4 % Cost of goods sold as a percentage of net revenue increased for the three and nine months ended October 27, 2012 compared to the three and nine months ended October 29, 2011. This was primarily due to the shift in the mix of our products sold to lower margin products as compared to the corresponding periods of fiscal 2012. In addition, average selling price declines outpaced the cost reductions received from our manufacturing partners. Our cost of goods sold as a percentage of net revenue may fluctuate in future periods due to, among other things, changes in the mix of products sold; the timing of production ramps of new products; increased pricing pressures from our customers and competitors, particularly in the consumer product markets that we are targeting; charges for obsolete or potentially excess inventory; changes in the costs charged by our foundry; assembly and test subcontractors; product warranty costs; changes in commodity prices such as gold; and the margin profiles of our new product introductions.

We currently expect cost of goods sold as a percentage of net revenue for the three months ending February 2, 2013 to be slightly lower compared to the three months ended October 27, 2012, due to a better mix of higher-margin products.

Share-Based Compensation Expense Three Months Ended Nine Months Ended October 27, October 29, October 27, October 29, 2012 2011 2012 2011 (in thousands) Cost of goods sold $ 1,944 $ 1,940 $ 5,842 $ 5,551 Research and development 22,565 21,905 62,152 63,626 Selling and marketing 3,101 3,402 9,595 9,263 General and administrative 2,764 3,364 13,205 10,006 $ 30,374 $ 30,611 $ 90,794 $ 88,446 25 -------------------------------------------------------------------------------- Table of Contents Share-based compensation expense for the three and nine months ended October 27, 2012 included the recovery of previously recognized expense associated with unvested share-based awards that were cancelled as a result of the resignation in October 2012 of our chief financial officer. However, we recognized higher expenses as a result of higher headcount in fiscal 2013, combined with the impact of an increase in expense related to the employee stock purchase plan.

The offering price of the employee stock purchase plan was reset in June 2012 due to the decline in our stock price. As a result, share-base compensation expense during the three months ended October 27, 2012 was essentially flat compared to the three months ended October 29, 2011, while it increased slightly in the nine months ended October 27, 2012 compared to the nine months ended October 29, 2011.

Research and Development Three Months Ended Nine Months Ended October 27, October 29, % October 27, October 29, % 2012 2011 Change 2012 2011 Change (in thousands, except percentage) Research and development $ 263,615 $ 266,255 (1.0 )% $ 783,760 $ 758,396 3.3 % % of net revenue 33.8 % 28.0 % 32.7 % 28.6 % Research and development expense decreased for the three months ended October 27, 2012 by $2.6 million, primarily related to lower personnel-related expenses as compared to the three months ended October 29, 2011. Since personnel-related expenses in the three months ended October 29, 2011 included $4.2 million in assessments related to payroll taxes in certain jurisdictions, excluding those amounts, personnel-related expenses in the three months ended October 27, 2012 reflect an increase due to higher costs associated with increased headcount in fiscal 2013 over fiscal 2012.

Research and development expense increased for the nine months ended October 27, 2012 by $25.4 million, compared to the nine months ended October 29, 2011, primarily attributable to increased headcount to support new designs.

We currently expect that research and development expense for the three months ending February 2, 2013 will be higher than the three months ended October 27, 2012. This is driven primarily by the additional week in our quarter ending February 2, 2013, due to the timing of our fiscal calendar.

Selling and Marketing Three Months Ended Nine Months Ended October 27, October 29, % October 27, October 29, % 2012 2011 Change 2012 2011 Change (in thousands, except percentage) Selling and marketing $ 38,398 $ 40,500 (5.2 )% $ 119,498 $ 119,042 0.4 % % of net revenue 4.9 % 4.3 % 5.0 % 4.5 % Selling and marketing expense decreased for the three months ended October 27, 2012 by $2.1 million, compared to the three months ended October 29, 2011. The decrease primarily reflects lower expenses for contractor services and other professional services as we continue to tightly manage this spending.

Selling and marketing expense increased for the nine months ended October 27, 2012 by $0.5 million, compared to the nine months ended October 29, 2011. The increase was primarily attributable to increased trade show and marketing communication activities, which were partially offset by lower expenses for contractor and other professional services.

We currently expect that selling and marketing expense for the three months ending February 2, 2013 will be higher than the level of expense reported for the three months ended October 27, 2012. This is driven primarily by the additional week in our quarter ending February 2, 2013, due to the timing of our fiscal calendar.

General and Administrative Three Months Ended Nine Months Ended October 27, October 29, % October 27, October 29, % 2012 2011 Change 2012 2011 Change (in thousands, except percentage) General and administrative $ 24,514 $ 29,021 (15.5 )% $ 75,937 $ 77,436 (1.9 )% % of net revenue 3.1 % 3.0 % 3.2 % 2.9 % General and administrative expense for the three and nine months ended October 27, 2012 decreased by $4.5 million and $1.5 million, respectively, compared to the three and nine months ended October 29, 2011. These decreases were due primarily to lower share-based compensation expense combined with lower legal expenses as legal expenses in the comparable period included certain legal settlements.

26 -------------------------------------------------------------------------------- Table of Contents We currently expect that general and administrative expense for the three months ending February 2, 2013 will be higher than the level of expense reported for the three months ended October 27, 2012. This is driven primarily by the additional week in our quarter ending February 2, 2013, due to the timing of our fiscal calendar.

Amortization and Write-Off of Acquired Intangible Assets Three Months Ended Nine Months Ended October 27, October 29, % October 27, October 29, % 2012 2011 Change 2012 2011 Change (in thousands, except percentage) Amortization and write-off of acquired intangible assets $ 13,054 $ 11,155 17.0 % $ 40,432 $ 36,634 10.4 % % of net revenue 1.7 % 1.2 % 1.7 % 1.4 % Amortization and write-off of acquired intangible assets for the three and nine months ended October 27, 2012 increased by $1.9 million and $3.8 million, respectively, as compared to the three and nine months ended October 29, 2011.

These increases were primarily due to the intangible assets acquired in the fourth quarter of fiscal 2012 from a small acquisition. Also, amortization and write-off of acquired intangible assets for the nine months ended October 27, 2012 included a $0.8 million write-off of in-process research and development related to an abandoned project. These increases were partially offset by certain intangible assets acquired in earlier acquisitions that became fully amortized.

Interest and Other Income, Net Three Months Ended Nine Months Ended October 27, October 29, % October 27, October 29, % 2012 2011 Change 2012 2011 Change (in thousands, except percentage) Interest and other income, net $ 2,387 $ 7,729 (69.1 )% $ 9,308 $ 9,575 (2.8 )% % of net revenue 0.3 % 0.9 % 0.4 % 0.3 % Interest and other income, net, decreased for the three months ended October 27, 2012, compared to the three months ended October 29, 2011 primarily due to the impact of the relative weakening of the U.S. dollar on our foreign currency denominated tax liabilities. This was partially offset by lower interest income in the three and nine months ended October 27, 2012 from lower average cash and investment balances, as well as a lower rate of return.

Interest and other income, net, decreased slightly for the nine months ended October 27, 2012, compared to the nine months ended October 29, 2011 primarily due to lower interest income from lower average cash and investment balances, as well as lower rate of return.

Provision for Income Taxes Three Months Ended Nine Months Ended October 27, October 29, % October 27, October 29, % 2012 2011 Change 2012 2011 Change (in thousands, except percentage) Provision for income taxes $ 368 $ 3,994 (90.8 )% $ 3,920 $ 9,340 (58.0 )% % of net revenue - % 0.5 % 0.2 % 0.3 % The income tax provision for the three and nine months ended October 27, 2012 included the current income tax liability of $5.9 million and $14.5 million, respectively, which was primarily offset by net reductions in unrecognized tax benefits of $5.5 million in the three months ended October 27, 2012 and $11.5 million in the nine months ended October 27, 2012. These net reductions in unrecognized tax benefits primarily arose from the expiration of statute of limitations and from the settlement of audits in non-U.S. jurisdictions less increases in current unrecognized tax benefit estimates.

The income tax provision for the three and nine months ended October 29, 2011 included the current income tax liability of $5.9 million and $14.2 million, respectively, which was partially offset by a net reduction in unrecognized tax benefits of $2.8 million in the three months ended October 29, 2011 and $6.2 million in the nine months ended October 29, 2011 primarily due to the expiration of the statute of limitations in non-U.S. jurisdictions less increases in current unrecognized tax benefit estimates.

During the next 12 months, it is reasonably possible that the amount of unrecognized tax benefits could decrease due to a potential settlement with tax authorities and/or the expiration of applicable statutes of limitations.

However, the amount cannot be reasonably estimated as we will have negotiations with various tax authorities throughout the year.

27-------------------------------------------------------------------------------- Table of Contents Liquidity and Capital Resources Our principal source of liquidity as of October 27, 2012 consisted of approximately $2.0 billion of cash, cash equivalents and short-term investments.

We believe that our existing cash, cash equivalents and short term investments, together with cash generated from operations and from the issuance of common shares through our employee stock option and purchase plans, will be sufficient to cover our working capital needs, capital expenditures, investment requirements, commitments, repurchases of our common shares and payment of quarterly dividends for at least the next 12 months. To the extent that our existing cash, cash equivalents and short-term investments and cash generated by operations are insufficient to fund our future activities, we may need to raise additional funds through public or private debt or equity financing. We may enter into additional acquisitions of businesses, assets, products, technologies or other strategic arrangements in the future, which could also require us to seek debt or equity financing. If we elect to raise additional funds, we may not be able to obtain such funds on a timely basis or on acceptable terms, if at all. If we raise additional funds by issuing additional equity or convertible debt securities, the ownership percentages of existing shareholders would be reduced. In addition, the equity or debt securities that we issue may have rights, preferences or privileges senior to our common shares.

Net Cash Provided by Operating Activities Net cash provided by operating activities was $524.4 million for the nine months ended October 27, 2012. The cash inflows from operations for the nine months ended October 27, 2012 were due to $458.8 million of net income adjusted for non-cash items and positive working capital changes of $65.6 million. The increase in working capital for the nine months ended October 27, 2012 was primarily driven by a decrease in accounts receivable and inventories due to lower shipments on lower sales combined with a decrease in prepaid expenses and other assets. This positive impact on working capital was partially offset by a decrease in accounts payable caused by lower spending as production activity declined in the latter part of the third quarter of fiscal 2013.

Net cash provided by operating activities was $702.1 million for the nine months ended October 29, 2011. The cash inflows from operations in the nine months ended October 29, 2011 were primarily due to $740.6 million of net income adjusted for non-cash items, offset by a negative effect from changes in working capital.

Net Cash Provided by and (Used in) Investing Activities Net cash provided by investing activities was $45.9 million for the nine months ended October 27, 2012 compared to net cash used in investing activities of $593.9 million for the nine months ended October 29, 2011. For the nine months ended October 27, 2012, net cash provided by investing activities was primarily generated from the sale and maturities of marketable securities of $1.3 billion less purchases of marketable securities of $1.2 billion. The net cash inflow from marketable securities for the nine months ended October 27, 2012 was partially offset by the purchase of $49.1 million of property and equipment and $10.7 million of IP licenses.

For the nine months ended October 29, 2011, net cash used in investing activities was primarily due to net purchases of marketable securities of $499.7 million. In addition, we paid $62.3 million for the purchase of property and equipment, $18.8 million for acquisitions and $9.6 million for technology licenses.

Net Cash Used in Financing Activities Net cash used in financing activities was $687.0 million for the nine months ended October 27, 2012 compared to net cash used in financing activities of $1.1 billion for the nine months ended October 29, 2011. For the nine months ended October 27, 2012, net cash used in financing activities was primarily attributable to repurchases under our share repurchase program of 57.3 million of its common shares in the open market for $676.5 million and the payment of our quarterly dividends of $67.0 million. The cash outflow was partially offset by net proceeds of $56.4 million from the issuance of our common shares under our share-based plans less the minimum tax withholding paid on behalf of employees for net share settlements. For the nine months ended October 29, 2011, net cash used in financing activities was primarily attributable to repurchases under our share repurchase program of 74.3 million of its common shares in the open market for $1.2 billion. The cash outflow was partially offset net proceeds of $50.4 million from the issuance of common shares under our share-based plans less the minimum tax withholding paid on behalf of employees for net share settlements.

Subsequent to the end of the quarter through November 21, 2012, we repurchased an additional 1.5 million of our common shares for $11.5 million at an average price per share of $7.68.

Off-Balance Sheet Arrangements As of October 27, 2012, we did not have any material off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

28-------------------------------------------------------------------------------- Table of Contents Contractual Obligations We presented our contractual obligations at January 28, 2012 in our Annual Report on Form 10-K for the fiscal year then ended. There has been no material changes outside the ordinary course of business in those obligations during nine months ended October 27, 2012.

[ Back To asia.tmcnet.com's Homepage 's Homepage ]

comments powered by Disqus





Technology Marketing Corporation

800 Connecticut Ave, 1st Floor East, Norwalk, CT 06854 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments: tmc@tmcnet.com.
Comments about this site: webmaster@tmcnet.com.

STAY CURRENT YOUR WAY

© 2014 Technology Marketing Corporation. All rights reserved | Privacy Policy