Intel 2014 Annual Report Download - page 46

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Operating Activities
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities.
For 2014 compared to 2013, the $358 million decrease in cash provided by operating activities was due to changes in working
capital, partially offset by higher net income and adjustments for non-cash items. The adjustments for non-cash items were higher
due primarily to higher depreciation in 2014 compared to 2013. Income taxes paid, net of refunds, in 2014 compared to 2013
were $1.8 billion higher due to higher income before taxes in 2014 and 2012 income tax overpayments, which reduced income
taxes paid in 2013.
Changes in assets and liabilities as of December 27, 2014, compared to December 28, 2013, included an income taxes net
receivable resulting from income tax settlement payments in 2014 and higher accounts receivable resulting from a higher portion
of sales at the end of Q4 2014.
For 2014, our three largest customers accounted for 46% of our net revenue (44% in 2013 and 43% in 2012), with HP accounting
for 18% of our net revenue (17% in 2013 and 18% in 2012), Dell accounting for 16% of our net revenue (15% in 2013 and 14% in
2012), and Lenovo accounting for 12% of our net revenue (12% in 2013 and 11% in 2012). These three customers accounted for
43% of our accounts receivable as of December 27, 2014 (34% as of December 28, 2013).
For 2013 compared to 2012, the $1.9 billion increase in cash provided by operating activities was due to changes in working
capital, partially offset by lower net income in 2013.
Investing Activities
Investing cash flows consist primarily of capital expenditures; investment purchases, sales, maturities, and disposals; as well as
proceeds from divestitures and cash used for acquisitions.
The decrease in cash used for investing activities in 2014 compared to 2013 was primarily due to a decrease in purchases of
available-for-sale investments and trading assets,higher maturities, and sales of our available-for-sale investments. This activity
was partially offset by an increase in investments in non-marketable equity investments and lower maturities and sales of trading
assets. Our capital expenditures were $10.1 billion in 2014 ($10.7 billion in 2013 and $11.0 billion in 2012).
Cash used for investing activities increased in 2013 compared to 2012 primarily due to an increase in purchases of available-for-
sale investments and a decrease in maturities and sales of trading assets, partially offset by an increase in maturities and sales of
available-for-sale investments and a decrease in purchases of licensed technology and patents. Net purchases of available-for-
sale investments in 2012 included our purchase of $3.2 billion of equity securities in ASML in Q3 2012.
Financing Activities
Financing cash flows consist primarily of repurchases of common stock, payment of dividends to stockholders, issuance and
repayment of long-term debt, and proceeds from the sale of common stock through employee equity incentive plans.
The increase in cash used for financing activities in 2014 compared to 2013 was primarily due to an increase in repurchases of
common stock under our authorized stock repurchase program partially offset by the issuance of short-term debt in 2014. We
have an ongoing authorization, originally approved by our Board of Directors in 2005, and subsequently amended, to repurchase
up to $65 billion in shares of our common stock in the open market or negotiated transactions. This amount includes an increase
of $20 billion in the authorization limit approved by our Board of Directors in July 2014. During 2014, we repurchased $10.8 billion
of common stock under our authorized common stock repurchase program compared to $2.1 billion in 2013. As of December 27,
2014, $12.4 billion remained available for repurchase under the existing repurchase authorization limit. We base our level of
common stock repurchases on internal cash management decisions, and this level may fluctuate. Proceeds from the sale of
common stock through employee equity incentive plans totaled $1.7 billion in 2014 compared to $1.6 billion in 2013. Our total
dividend payments were $4.4 billion in 2014 compared to $4.5 billion in 2013. We have paid a cash dividend in each of the past
89 quarters. In January 2015, our Board of Directors declared a cash dividend of $0.24 per share of common stock for Q1 2015.
The dividend is payable on March 1, 2015 to stockholders of record on February 7, 2015.
The increase in cash used for financing activities in 2013 compared to 2012 was primarily due to the issuance of long-term debt in
2012 and fewer repurchases of common stock under our authorized common stock repurchase program in 2013.
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