What is an Accelerated Stock Buyback (ASR)?

An Accelerated Stock Buyback (ASR) is a transaction where a company buys back a significant amount of its own stock from an investment bank. The bank typically delivers a substantial portion of the shares immediately, and the final number of shares repurchased is determined later based on the average stock price over a specified period, potentially with adjustments.

How does this ASR fit into Qualcomm's overall capital return strategy?

This $5 billion ASR is a component of Qualcomm's broader $15 billion share repurchase program. It demonstrates the company's active approach to returning capital to shareholders, complementing other potential repurchase methods like open market purchases or Rule 10b5-1 plans.

How is this $5 billion share repurchase being funded?

Qualcomm is funding these accelerated stock buyback agreements using the proceeds from its recently completed $10 billion debt offering, indicating a strategic use of borrowed capital to enhance shareholder value.

When will the final number of shares be determined?

The final settlement of the ASR transactions is scheduled to occur in November 2015. The final number of shares repurchased will be based on the volume-weighted average stock price of Qualcomm's common stock during the transaction term, less a discount and subject to adjustments.

QCOM 8-K: Material Agreements

Summary

Qualcomm Incorporated (QCOM) announced on May 20, 2015, the execution of accelerated stock buyback (ASR) agreements with Goldman Sachs and Morgan Stanley, totaling $5 billion. This move is part of the company's previously announced $15 billion share repurchase program and is being funded by proceeds from a recent $10 billion debt offering. The ASR agreements represent a significant capital allocation strategy aimed at returning value to shareholders. The immediate effect of these agreements is the initial delivery of approximately 28.87 million shares of QCOM common stock to the company on May 21, 2015. The final number of shares repurchased will be determined by the volume-weighted average stock price over a period ending in November 2015, with potential adjustments. This initiative signals management's confidence in the company's stock value and its commitment to enhancing shareholder returns through active share repurchases.

Key Highlights

1Qualcomm entered into accelerated stock buyback (ASR) agreements totaling $5 billion.
2These ASR agreements are with Goldman Sachs and Morgan Stanley.
3The $5 billion buyback is part of a larger $15 billion share repurchase program previously announced by Qualcomm.
4The ASR transactions are funded by proceeds from a recent $10 billion debt offering.
5An initial delivery of approximately 28.87 million shares of Qualcomm common stock is expected on May 21, 2015.
6The final number of shares repurchased will be based on the volume-weighted average stock price during the transaction term, ending around November 2015.

QUALCOMM INC/DE 8-K Report, Material Agreement (May 21, 2015)

Summary

Key Highlights

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