Broadcom Limited (Nasdaq:AVGO), a leading semiconductor device
supplier to the wired, wireless, enterprise storage, and industrial
end markets, today reported financial results for the fourth fiscal
quarter and fiscal year ended October 29, 2017, and provided
guidance for the first quarter of its fiscal year 2018. The Company
completed its acquisition of Brocade Communications Systems, Inc.
on November 17, 2017. The financial results provided below for the
fourth quarter and fiscal year 2017 do not include any contribution
from Brocade.
Fourth Quarter Fiscal Year 2017 GAAP
Results
Net revenue was $4,844 million, an increase of 9 percent from
$4,463 million in the previous quarter and an increase of 17
percent from $4,136 million in the same quarter last year.
Gross margin was $2,383 million, or 49.2 percent of net revenue.
This compares with gross margin of $2,149 million, or 48.2 percent
of net revenue, in the prior quarter, and gross margin of $2,171
million, or 52.5 percent of net revenue, in the same quarter last
year.
Operating expenses were $1,518 million. This compares with
$1,501 million in the prior quarter and $1,790 million for the same
quarter last year.
Operating income was $865 million, or 17.9 percent of net
revenue. This compares with operating income of $648 million, or
14.5 percent of net revenue, in the prior quarter, and operating
income of $381 million, or 9.2 percent of net revenue, in the same
quarter last year.
Net income, which includes the impact of discontinued
operations, was $671 million, or $1.50 per diluted share. This
compares with net income of $507 million, or $1.14 per diluted
share, for the prior quarter, and net loss of $668 million, or
$1.59 per diluted share, in the same quarter last year.
Net income attributable to ordinary shares was $636 million. Net
income attributable to the noncontrolling interest (restricted
exchangeable limited partnership units (“REUs”)) in the Company’s
subsidiary, Broadcom Cayman L.P. (the “Partnership”), was $35
million.
Fourth Quarter Fiscal
Year 2017 GAAP Results |
|
|
|
|
|
|
|
Change |
(Dollars
in millions, except per share data) |
|
Q4 17 |
|
Q3 17 |
|
Q4 16 |
|
Q/Q |
|
Y/Y |
Net
revenue |
|
$ |
4,844 |
|
|
$ |
4,463 |
|
|
$ |
4,136 |
|
|
+9% |
|
+17% |
Gross
margin |
|
|
49.2% |
|
|
|
48.2% |
|
|
|
52.5% |
|
|
+100bps |
|
-330bps |
Operating
expenses |
|
$ |
1,518 |
|
|
$ |
1,501 |
|
|
$ |
1,790 |
|
|
+$17 |
|
-$272 |
Net
income (loss) |
|
$ |
671 |
|
|
$ |
507 |
|
|
$ |
(668 |
) |
|
+$164 |
|
+$1,339 |
Net
income (loss) attributable to noncontrolling interest |
|
$ |
35 |
|
|
$ |
26 |
|
|
$ |
(36 |
) |
|
+$9 |
|
+$71 |
Net
income (loss) attributable to ordinary shares |
|
$ |
636 |
|
|
$ |
481 |
|
|
$ |
(632 |
) |
|
+$155 |
|
+$1,268 |
Earnings
(loss) per share - diluted |
|
$ |
1.50 |
|
|
$ |
1.14 |
|
|
$ |
(1.59 |
) |
|
+$0.36 |
|
+$3.09 |
The Company’s cash and short term investment balance at the end
of the fourth fiscal quarter was $11,204 million, compared to
$5,449 million at the end of the prior quarter.
During the fourth quarter, the Company generated $1,959 million
in cash from operations and received $3,980 million from issuance
of long-term debt, and $440 million from the sale of real property.
In the fourth quarter, the Company spent $233 million on capital
expenditures.
On September 29, 2017, the Company paid a cash dividend of $1.02
per ordinary share, totaling $416 million. On the same date, the
Partnership, of which the Company is the General Partner, paid
holders of REUs a corresponding distribution of $1.02 per REU,
totaling $23 million.
Fourth Quarter Fiscal Year 2017 Non-GAAP Results From
Continuing Operations
The differences between the Company’s GAAP and non-GAAP results
are described generally under “Non-GAAP Financial Measures” below,
and presented in detail in the financial reconciliation tables
attached to this release.
Net revenue from continuing operations was $4,848 million, an
increase of 9 percent from $4,467 million in the previous quarter,
and an increase of 17 percent from $4,146 million in the same
quarter last year.
Gross margin from continuing operations was $3,068 million, or
63.3 percent of net revenue. This compares with gross margin of
$2,827 million, or 63.3 percent of net revenue, in the prior
quarter, and gross margin of $2,522 million, or 60.8 percent of net
revenue, in the same quarter last year.
Operating income from continuing operations was $2,293 million,
or 47.3 percent of net revenue. This compares with operating income
from continuing operations of $2,059 million, or 46.1 percent of
net revenue, in the prior quarter, and $1,719 million, or 41.5
percent of net revenue, in the same quarter last year.
Net income from continuing operations was $2,091 million, or
$4.59 per diluted share. This compares with net income of $1,871
million, or $4.10 per diluted share last quarter, and net income of
$1,549 million, or $3.47 per diluted share, in the same quarter
last year.
Fourth Quarter Fiscal
Year 2017 Non-GAAP Results |
|
|
|
|
|
|
|
Change |
(Dollars
in millions, except per share data) |
|
Q4 17 |
|
Q3 17 |
|
Q4 16 |
|
Q/Q |
|
Y/Y |
Net
revenue |
|
$ |
4,848 |
|
$ |
4,467 |
|
$ |
4,146 |
|
+9% |
|
+17% |
Gross
margin |
|
|
63.3% |
|
|
63.3% |
|
|
60.8% |
|
- |
|
+250bps |
Operating
expenses |
|
$ |
775 |
|
$ |
768 |
|
$ |
803 |
|
+$7 |
|
-$28 |
Net
income |
|
$ |
2,091 |
|
$ |
1,871 |
|
$ |
1,549 |
|
+$220 |
|
+$542 |
Earnings
per share - diluted |
|
$ |
4.59 |
|
$ |
4.10 |
|
$ |
3.47 |
|
+$0.49 |
|
+$1.12 |
“On the heels of very strong fiscal 2017 financial
results, and continuing momentum into the new fiscal year, we are
increasing capital returns to our shareholders and have raised our
interim quarterly dividend by 72%,” said Hock Tan, President and
CEO of Broadcom Limited. “We also closed the acquisition of Brocade
early in the first fiscal quarter of 2018, adding to our very
successful track record of highly accretive M&A.”
Other Quarterly Data
|
Q4 17 |
|
Q3 17 |
|
Q4 16 |
|
Growth Rates |
Net revenue by
segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q/Q |
|
Y/Y |
Wired
infrastructure |
$ |
2,146 |
|
45 |
% |
|
$ |
2,208 |
|
50 |
% |
|
$ |
2,074 |
|
50 |
% |
|
-3 |
% |
|
3 |
% |
Wireless
communications |
|
1,796 |
|
37 |
|
|
|
1,283 |
|
29 |
|
|
|
1,346 |
|
32 |
|
|
40 |
% |
|
33 |
% |
Enterprise storage |
|
645 |
|
13 |
|
|
|
735 |
|
16 |
|
|
|
561 |
|
14 |
|
|
-12 |
% |
|
15 |
% |
Industrial & other |
|
257 |
|
5 |
|
|
|
237 |
|
5 |
|
|
|
155 |
|
4 |
|
|
8 |
% |
|
66 |
% |
Total net
revenue |
$ |
4,844 |
|
100 |
% |
|
$ |
4,463 |
|
100 |
% |
|
$ |
4,136 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 17 |
|
Q3 17 |
|
Q4 16 |
|
Growth Rates |
Non-GAAP net revenue by
segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q/Q |
|
Y/Y |
Wired
infrastructure (1) |
$ |
2,150 |
|
45 |
% |
|
$ |
2,211 |
|
50 |
% |
|
$ |
2,077 |
|
50 |
% |
|
-3 |
% |
|
4 |
% |
Wireless
communications |
|
1,796 |
|
37 |
|
|
|
1,283 |
|
29 |
|
|
|
1,346 |
|
32 |
|
|
40 |
% |
|
33 |
% |
Enterprise storage |
|
645 |
|
13 |
|
|
|
735 |
|
16 |
|
|
|
561 |
|
14 |
|
|
-12 |
% |
|
15 |
% |
Industrial & other (1) |
|
257 |
|
5 |
|
|
|
238 |
|
5 |
|
|
|
162 |
|
4 |
|
|
8 |
% |
|
59 |
% |
Total
non-GAAP net revenue |
$ |
4,848 |
|
100 |
% |
|
$ |
4,467 |
|
100 |
% |
|
$ |
4,146 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Non-GAAP data include the effect of acquisition-related purchase
accounting adjustments relating to licensing revenue. |
Key
Statistics (Dollars in millions) |
|
Q4 17 |
|
Q3 17 |
|
Q4 16 |
Cash from
operations |
|
$ |
1,959 |
|
$ |
1,656 |
|
$ |
1,352 |
Depreciation |
|
$ |
117 |
|
$ |
112 |
|
$ |
118 |
Amortization of acquisition-related intangible assets |
|
$ |
1,099 |
|
$ |
1,096 |
|
$ |
580 |
Capital
expenditures |
|
$ |
233 |
|
$ |
255 |
|
$ |
193 |
Days
sales outstanding ("DSO") |
|
|
46 |
|
|
49 |
|
|
48 |
Inventory
days on hand ("DOH") |
|
|
73 |
|
|
78 |
|
|
74 |
Non-GAAP
DSO |
|
|
46 |
|
|
49 |
|
|
48 |
Non-GAAP
Inventory DOH |
|
|
74 |
|
|
79 |
|
|
78 |
Fiscal Year 2017 Financial Results From Continuing
Operations
Net revenue from continuing operations was $17,636 million, an
increase of 33 percent from $13,240 million in the prior year.
Gross margin was $8,509 million, or 48.2 percent of net revenue,
versus $5,940 million, or 44.9 percent of net revenue, in the prior
year. Operating income was $2,493 million compared with an
operating loss of $409 million in the prior year. Net income, which
includes the impact from discontinued operations, was $1,894
million, or $4.27 per diluted share. This compares with a net loss
of $1,861 million, or $4.86 per diluted share, in fiscal year 2016.
Net income attributable to ordinary shares was $1,796 million in
fiscal year 2017. Net income attributable to the
noncontrolling interest REUs in the Partnership was $98
million.
Fiscal Year 2017 GAAP
Results |
|
|
|
|
|
Change |
(Dollars
in millions, except per share data) |
|
|
2017 |
|
|
2016 |
|
|
Y/Y |
Net revenue |
|
$ |
17,636 |
|
$ |
13,240 |
|
|
+33% |
Gross margin |
|
|
48.2% |
|
|
44.9% |
|
|
+330bps |
Operating expenses |
|
$ |
6,016 |
|
$ |
6,349 |
|
|
-$333 |
Net income (loss) |
|
$ |
1,894 |
|
$ |
(1,861 |
) |
|
+$3,755 |
Net income (loss)
attributable to noncontrolling interest |
|
$ |
98 |
|
$ |
(122 |
) |
|
+$220 |
Net income (loss)
attributable to ordinary shares |
|
$ |
1,796 |
|
$ |
(1,739 |
) |
|
+$3,535 |
Earnings (loss) per
share - diluted |
|
$ |
4.27 |
|
$ |
(4.86 |
) |
|
+$9.13 |
Non-GAAP net revenue from continuing operations was $17,665
million, an increase of 33 percent from $13,292 million in the
prior year. Non-GAAP gross margin was $11,137 million, or 63
percent of net revenue, versus $8,046 million, or 60.5 percent of
net revenue, in the prior year. Non-GAAP operating income from
continuing operations was $8,011 million. This compares with $5,320
million in the prior year. Non-GAAP net income was $7,255 million,
or $16.02 per diluted share. This compares with non-GAAP net income
of $4,672 million, or $11.45 per diluted share, in fiscal year
2016.
Fiscal Year 2017
Non-GAAP Results |
|
|
|
|
|
Change |
(Dollars
in millions, except per share data) |
|
|
2017 |
|
|
2016 |
|
Y/Y |
Net revenue |
|
$ |
17,665 |
|
$ |
13,292 |
|
+33% |
Gross margin |
|
|
63.0% |
|
|
60.5% |
|
+250bps |
Operating expenses |
|
$ |
3,126 |
|
$ |
2,726 |
|
+$400 |
Net income |
|
$ |
7,255 |
|
$ |
4,672 |
|
+$2,583 |
Earnings per share -
diluted |
|
$ |
16.02 |
|
$ |
11.45 |
|
+$4.57 |
First Quarter Fiscal Year 2018 Business
Outlook
Due to the Company’s 52/53 week reporting cycle, fiscal year
2018 will include an extra week, compared to fiscal year 2017,
which will fall in the first quarter of fiscal year 2018.
Based on current business trends and conditions, the outlook for
continuing operations for the first quarter of fiscal year 2018,
ending February 4, 2018, including the projected partial quarter
contribution from the acquired Brocade Fibre Channel Storage Area
Networking business, is expected to be as follows:
|
|
GAAP |
|
Reconciling Items |
|
Non-GAAP |
Net revenue |
|
$5,296M +/-$75M |
|
$4M |
|
$5,300M +/-$75M |
Gross margin |
|
47.75%
+/-1% |
|
$864M |
|
64.0%
+/-1% |
Operating expenses |
|
$1,760M |
|
$860M |
|
$900M |
Interest expense and
other |
|
$161M |
|
$35M |
|
$126M |
Provision for income
taxes |
|
$22M |
|
$84M |
|
$106M |
Diluted share
count |
|
427M |
|
31M |
|
458M |
|
|
|
|
|
|
|
- Non-GAAP net revenue includes $4 million of licensing revenue
not included in GAAP revenue, as a result of the effects of
purchase accounting for acquisitions;
- Non-GAAP gross margin includes the effects of $4 million of
licensing revenue, and excludes the effects of $730 million of
amortization of intangible assets, $90 million of charges related
to inventory step-up to fair value, $20 million of share-based
compensation expense, and $20 million of restructuring
charges;
- Non-GAAP operating expenses exclude $340 million of
amortization of intangible assets, $280 million of share-based
compensation expense, $145 million of restructuring charges, and
$95 million of acquisition-related costs;
- Non-GAAP tax provision is $84 million higher than GAAP due to
the tax effects of the projected reconciling items noted
above;
- Non-GAAP interest expense and other excludes $35 million of
debt-related costs; and
- Non-GAAP diluted share count includes the impact of the REUs on
an if-converted basis, which were not included in projected GAAP
diluted share count because their effect is expected to be
antidilutive, and excludes the impact of share-based compensation
expense expected to be incurred in future periods and not yet
recognized in the Company’s financial statements, which would
otherwise be assumed to be used to repurchase shares under the GAAP
treasury stock method.
Capital expenditures for the first fiscal quarter are expected
to be approximately $210 million. For the first fiscal quarter,
depreciation is expected to be $130 million and amortization is
expected to be approximately $1,070 million.
The guidance provided above is only an estimate of what the
Company believes is realizable as of the date of this release.
Among other things, this guidance is based on an initial estimate
of purchase accounting adjustments and allocations, all of which
are subject to revision. The guidance also excludes the impact of
any additional mergers, acquisitions and divestiture activity that
may occur during the quarter. Actual results will vary from the
guidance and the variations may be material. The Company undertakes
no intent or obligation to publicly update or revise any of these
projections, whether as a result of new information, future events
or otherwise, except as required by law.
Update to Long Term Target Operating Model
The Company will continue to target long term annual revenue
growth of 5 percent. The Company is raising its long term target
for non-GAAP gross margin from greater than 60 percent to 65
percent and non-GAAP operating margin from 45 percent to 47.5
percent. The Company is also raising its long term target for free
cash flow from 35 percent to 40 percent of net revenue. These
targets are long term goals and should not be interpreted as
guidance for either the current period or future periods.
Interim Dividend
The Company’s Board of Directors has approved a quarterly,
interim cash dividend of $1.75 per ordinary share. A corresponding
distribution will also be paid by the Partnership, of which the
Company is the General Partner, to holders of REUs, in the amount
of $1.75 per REU.
The dividend and the distribution are both payable on December
29, 2017 to shareholders or unitholders of record, as applicable,
at the close of business (5:00 p.m.) Eastern Time on December 19,
2017.
Financial Results Conference Call
Broadcom Limited will host a conference call to review its
financial results for the fourth quarter and fiscal year 2017,
ended October 29, 2017, and to provide guidance for the first
quarter of fiscal year 2018, today at 2:00 p.m. Pacific Time. Those
wishing to access the call should dial (866) 310-8712;
International +1 (720) 634-2946. The passcode is 7599088. A replay
of the call will be accessible for one week after the call. To
access the replay dial (855) 859-2056; International +1 (404)
537-3406; and reference the passcode: 7599088. A webcast of the
conference call will also be available in the “Investors” section
of Broadcom’s website at www.broadcom.com.
Non-GAAP Financial MeasuresIn addition to GAAP
reporting, Broadcom provides investors with net revenue, net
income, operating income, gross margin, operating expenses and
other data on a non-GAAP basis. This non-GAAP information includes
the effect, where applicable, of purchase accounting on revenues,
and excludes amortization of acquisition-related intangible assets,
share-based compensation expense, restructuring, impairment and
disposal charges, acquisition-related costs, including integration
costs, purchase accounting effect on inventory, debt-related costs,
gain (loss) on extinguishment of debt, gain (loss) on disposition
of assets, income (loss) from discontinued operations and income
tax effects of non-GAAP reconciling adjustments. Management does
not believe that these items are reflective of the Company’s
underlying performance. However, internally, these non-GAAP
measures are significant measures used by management for purposes
of evaluating the core operating performance of the Company,
establishing internal budgets, calculating return on investment for
development programs and growth initiatives, comparing performance
with internal forecasts and targeted business models, strategic
planning, evaluating and valuing potential acquisition candidates
and how their operations compare to the Company’s operations, and
benchmarking performance externally against the Company’s
competitors. The presentation of these and other similar items in
Broadcom’s non-GAAP financial results should not be interpreted as
implying that these items are non-recurring, infrequent or unusual.
Broadcom believes this non-GAAP financial information provides
additional insight into the Company’s on-going performance and has
therefore chosen to provide this information to investors for a
more consistent basis of comparison and to help them evaluate the
results of the Company’s on-going operations and enable more
meaningful period to period comparisons. These non-GAAP measures
are provided in addition to, and not as a substitute for, or
superior to, measures of financial performance prepared in
accordance with GAAP. A reconciliation between GAAP and non-GAAP
financial data is included in the supplemental financial data
attached to this press release.
About Broadcom Limited
Broadcom Limited (NASDAQ:AVGO) is a leading designer, developer
and global supplier of a broad range of digital and analog
semiconductor connectivity solutions. Broadcom Limited’s extensive
product portfolio serves four primary end markets: wired
infrastructure, wireless communications, enterprise storage and
industrial & other. Applications for our products in these end
markets include: data center networking, home connectivity, set-top
box, broadband access, telecommunications equipment, smartphones
and base stations, data center servers and storage, factory
automation, power generation and alternative energy systems, and
electronic displays.
Cautionary Note Regarding Forward-Looking
Statements
This announcement contains forward-looking statements (including
within the meaning of Section 21E of the United States Securities
Exchange Act of 1934, as amended, and Section 27A of the United
States Securities Act of 1933, as amended) concerning Broadcom.
These statements include, but are not limited to, statements that
address our expected future business and financial performance and
statements about (i) the proposed transaction involving Broadcom
and Qualcomm Incorporated, or Qualcomm, and the expected benefits
of the proposed transaction; (ii) the expected benefits of
acquisitions, (iii) our plans, objectives and intentions with
respect to future operations and products, (iv) our competitive
position and opportunities, (v) the impact of acquisitions on the
market for our products, and (vi) other statements identified by
words such as “will”, “expect”, “believe”, “anticipate”,
“estimate”, “should”, “intend”, “plan”, “potential”, “predict”
“project”, “aim”, and similar words, phrases or expressions. These
forward-looking statements are based on current expectations and
beliefs of the management of Broadcom, as well as assumptions made
by, and information currently available to, such management,
current market trends and market conditions and involve risks and
uncertainties, many of which are outside the Company’s and
management’s control, and which may cause actual results to differ
materially from those contained in forward-looking statements.
Accordingly, you should not place undue reliance on such
statements.
Particular uncertainties that could materially affect future
results include risks associated with our proposal to acquire
Qualcomm, including: (i) uncertainty regarding the ultimate outcome
or terms of any possible transaction between Broadcom and Qualcomm,
including as to whether Qualcomm will cooperate with us regarding
the proposed transaction; (ii) the effects of the announcement of
the proposed transaction on the ability of Broadcom and Qualcomm to
retain customers, to retain and hire key personnel and to maintain
favorable relationships with suppliers or customers; (iii) the
timing of the proposed transaction; (iv) the ability to obtain
regulatory approvals and satisfy other closing conditions to the
completion of the proposed transaction (including
shareholders approvals); and (v) other risks related to the
completion of the proposed transaction and actions related thereto;
loss of our significant customers and fluctuations in the timing
and volume of significant customer demand; our dependence on
contract manufacturers and outsourced supply chain; our dependency
on a limited number of suppliers; any acquisitions we may make,
such as delays, challenges and expenses associated with receiving
governmental and regulatory approvals and satisfying other closing
conditions, and with integrating acquired companies with our
existing businesses and our ability to achieve the benefits, growth
prospects and synergies expected from such acquisitions, including
our acquisition of Brocade; our ability to accurately estimate
customers’ demand and adjust our manufacturing and supply chain
accordingly; our significant indebtedness, including the need to
generate sufficient cash flows to service and repay such debt;
increased dependence on a small number of markets and the rate of
growth in these markets; dependence on and risks associated with
distributors of our products; dependence on senior management;
quarterly and annual fluctuations in operating results; global
economic conditions and concerns; our proposed redomiciliation of
our ultimate parent company to the United States; our competitive
performance and ability to continue achieving design wins with our
customers, as well as the timing of those design wins; prolonged
disruptions of our or our contract manufacturers’ manufacturing
facilities or other significant operations; our ability to improve
our manufacturing efficiency and quality; our dependence on
outsourced service providers for certain key business services and
their ability to execute to our requirements; our ability to
maintain or improve gross margin; our effective tax rate,
legislation that may impact our effective tax rate and our ability
to maintain tax concessions in certain jurisdictions; our ability
to protect our intellectual property and the unpredictability of
any associated litigation expenses; any expenses or reputational
damage associated with resolving customer product and warranty and
indemnification claims; cyclicality in the semiconductor industry
or in our target markets; our ability to sell to new types of
customers and to keep pace with technological advances; market
acceptance of the end products into which our products are
designed; and other events and trends on a national, regional and
global scale, including those of a political, economic, business,
competitive and regulatory nature.
Our filings with the Securities and Exchange Commission (“SEC”),
which you may obtain for free at the SEC’s website at
http://www.sec.gov, discuss some of the important risk factors that
may affect our business, results of operations and financial
condition. We undertake no intent or obligation to publicly update
or revise any of these forward looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Contacts:Broadcom LimitedAshish SaranInvestor
Relations+1 408 433 8000investor.relations@broadcom.com
BROADCOM LIMITED |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS - UNAUDITED |
(IN MILLIONS, EXCEPT PER SHARE
DATA) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarter Ended |
|
Fiscal Year Ended |
|
|
October 29, |
|
July 30, |
|
October 30, |
|
October 29, |
|
October 30, |
|
|
|
2017 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
4,844 |
|
|
$ |
4,463 |
|
|
$ |
4,136 |
|
|
$ |
17,636 |
|
|
$ |
13,240 |
|
Cost of products
sold: |
|
|
|
|
|
|
|
|
|
|
Cost of
products sold |
|
|
1,798 |
|
|
|
1,658 |
|
|
|
1,639 |
|
|
|
6,593 |
|
|
|
5,295 |
|
Purchase
accounting effect on inventory |
|
|
2 |
|
|
|
1 |
|
|
|
86 |
|
|
|
4 |
|
|
|
1,185 |
|
Amortization of acquisition-related intangible assets |
|
|
658 |
|
|
|
655 |
|
|
|
224 |
|
|
|
2,511 |
|
|
|
763 |
|
Restructuring charges |
|
|
3 |
|
|
|
- |
|
|
|
16 |
|
|
|
19 |
|
|
|
57 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
cost of products sold |
|
|
2,461 |
|
|
|
2,314 |
|
|
|
1,965 |
|
|
|
9,127 |
|
|
|
7,300 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
2,383 |
|
|
|
2,149 |
|
|
|
2,171 |
|
|
|
8,509 |
|
|
|
5,940 |
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development |
|
|
828 |
|
|
|
827 |
|
|
|
806 |
|
|
|
3,292 |
|
|
|
2,674 |
|
Selling, general and
administrative |
|
|
194 |
|
|
|
200 |
|
|
|
224 |
|
|
|
799 |
|
|
|
806 |
|
Amortization of
acquisition-related intangible assets |
|
|
441 |
|
|
|
441 |
|
|
|
356 |
|
|
|
1,764 |
|
|
|
1,873 |
|
Restructuring,
impairment and disposal charges |
|
|
55 |
|
|
|
33 |
|
|
|
404 |
|
|
|
161 |
|
|
|
996 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses |
|
|
1,518 |
|
|
|
1,501 |
|
|
|
1,790 |
|
|
|
6,016 |
|
|
|
6,349 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
|
865 |
|
|
|
648 |
|
|
|
381 |
|
|
|
2,493 |
|
|
|
(409 |
) |
Interest expense |
|
|
(119 |
) |
|
|
(112 |
) |
|
|
(106 |
) |
|
|
(454 |
) |
|
|
(585 |
) |
Loss on debt
extinguishment |
|
|
(7 |
) |
|
|
- |
|
|
|
(49 |
) |
|
|
(166 |
) |
|
|
(123 |
) |
Other income, net |
|
|
16 |
|
|
|
12 |
|
|
|
9 |
|
|
|
62 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes |
|
|
755 |
|
|
|
548 |
|
|
|
235 |
|
|
|
1,935 |
|
|
|
(1,107 |
) |
Provision for income
taxes |
|
|
89 |
|
|
|
39 |
|
|
|
841 |
|
|
|
35 |
|
|
|
642 |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
|
|
666 |
|
|
|
509 |
|
|
|
(606 |
) |
|
|
1,900 |
|
|
|
(1,749 |
) |
Income (loss) from
discontinued operations, net of income taxes |
|
|
5 |
|
|
|
(2 |
) |
|
|
(62 |
) |
|
|
(6 |
) |
|
|
(112 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
671 |
|
|
|
507 |
|
|
|
(668 |
) |
|
|
1,894 |
|
|
|
(1,861 |
) |
Net income (loss)
attributable to noncontrolling interest |
|
|
35 |
|
|
|
26 |
|
|
|
(36 |
) |
|
|
98 |
|
|
|
(122 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to ordinary shares |
|
$ |
636 |
|
|
$ |
481 |
|
|
$ |
(632 |
) |
|
$ |
1,796 |
|
|
$ |
(1,739 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per
share (1): |
|
|
|
|
|
|
|
|
|
|
Income
(loss) per share from continuing operations |
|
$ |
1.55 |
|
|
$ |
1.19 |
|
|
$ |
(1.44 |
) |
|
$ |
4.45 |
|
|
$ |
(4.46 |
) |
Income
(loss) per share from discontinued operations |
|
|
0.01 |
|
|
|
(0.01 |
) |
|
|
(0.15 |
) |
|
|
(0.02 |
) |
|
|
(0.29 |
) |
Net
income (loss) per share |
|
$ |
1.56 |
|
|
$ |
1.18 |
|
|
$ |
(1.59 |
) |
|
$ |
4.43 |
|
|
$ |
(4.75 |
) |
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per share (2): |
|
|
|
|
|
|
|
|
|
|
Income
(loss) per share from continuing operations |
|
$ |
1.49 |
|
|
$ |
1.14 |
|
|
$ |
(1.44 |
) |
|
$ |
4.28 |
|
|
$ |
(4.57 |
) |
Income
(loss) per share from discontinued operations |
|
|
0.01 |
|
|
|
- |
|
|
|
(0.15 |
) |
|
|
(0.01 |
) |
|
|
(0.29 |
) |
Net
income (loss) per share |
|
$ |
1.50 |
|
|
$ |
1.14 |
|
|
$ |
(1.59 |
) |
|
$ |
4.27 |
|
|
$ |
(4.86 |
) |
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
408 |
|
|
|
407 |
|
|
|
398 |
|
|
|
405 |
|
|
|
366 |
|
Diluted |
|
|
424 |
|
|
|
445 |
|
|
|
421 |
|
|
|
421 |
|
|
|
383 |
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expense included in continuing operations: |
|
|
|
|
|
|
|
|
|
|
Cost of
products sold |
|
$ |
17 |
|
|
$ |
18 |
|
|
$ |
14 |
|
|
$ |
64 |
|
|
$ |
48 |
|
Research
and development |
|
|
171 |
|
|
|
174 |
|
|
|
136 |
|
|
|
636 |
|
|
|
430 |
|
Selling,
general and administrative |
|
|
64 |
|
|
|
59 |
|
|
|
58 |
|
|
|
220 |
|
|
|
186 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
share-based compensation expense |
|
$ |
252 |
|
|
$ |
251 |
|
|
$ |
208 |
|
|
$ |
920 |
|
|
$ |
664 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For
fiscal periods after February 1, 2016, basic income (loss) per
share numerators are reduced by approximately 5% of net income
(loss), attributable to noncontrolling interest. The noncontrolling
interest is related to the restricted exchangeable partnership
units of Broadcom Cayman L.P. (“Partnership REUs”), of which
Broadcom Limited is the General Partner. |
|
(2) For
the fiscal quarters ended July 30, 2017 and October 30, 2016 and
the fiscal year ended October 30, 2016, diluted income (loss) per
share numerators and denominators include the impact of the
noncontrolling interest, which assumes conversion of Partnership
REUs to Broadcom ordinary shares. The diluted income (loss) per
share calculations include approximately 22 million Partnership
REUs for the fiscal quarter ended July 30, 2017, approximately 23
million Partnership REUs for the fiscal quarter ended October 30,
2016, and approximately 17 million Partnership REUs for the fiscal
year ended October 30, 2016, representing an assumed conversion of
100% of the Partnership REUs under the “if converted” method. |
BROADCOM LIMITED |
FINANCIAL RECONCILIATION: GAAP TO NON-GAAP -
UNAUDITED |
(IN MILLIONS, EXCEPT DAYS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarter Ended |
|
Fiscal Year Ended |
|
|
October 29, |
|
July 30, |
|
October 30, |
|
October 29, |
|
October 30, |
|
|
|
2017 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue on GAAP
basis |
|
$ |
4,844 |
|
|
$ |
4,463 |
|
|
$ |
4,136 |
|
|
$ |
17,636 |
|
|
$ |
13,240 |
|
Acquisition-related purchase accounting revenue adjustment (1) |
|
|
4 |
|
|
|
4 |
|
|
|
10 |
|
|
|
29 |
|
|
|
52 |
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue on non-GAAP
basis |
|
$ |
4,848 |
|
|
$ |
4,467 |
|
|
$ |
4,146 |
|
|
$ |
17,665 |
|
|
$ |
13,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin on GAAP
basis |
|
$ |
2,383 |
|
|
$ |
2,149 |
|
|
$ |
2,171 |
|
|
$ |
8,509 |
|
|
$ |
5,940 |
|
Acquisition-related purchase accounting revenue adjustment (1) |
|
|
4 |
|
|
|
4 |
|
|
|
10 |
|
|
|
29 |
|
|
|
52 |
|
Purchase
accounting effect on inventory |
|
|
2 |
|
|
|
1 |
|
|
|
86 |
|
|
|
4 |
|
|
|
1,185 |
|
Amortization of acquisition-related intangible assets |
|
|
658 |
|
|
|
655 |
|
|
|
224 |
|
|
|
2,511 |
|
|
|
763 |
|
Share-based compensation expense |
|
|
17 |
|
|
|
18 |
|
|
|
14 |
|
|
|
64 |
|
|
|
48 |
|
Restructuring charges |
|
|
3 |
|
|
|
- |
|
|
|
16 |
|
|
|
19 |
|
|
|
57 |
|
Acquisition-related costs |
|
|
1 |
|
|
|
- |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin on
non-GAAP basis |
|
$ |
3,068 |
|
|
$ |
2,827 |
|
|
$ |
2,522 |
|
|
$ |
11,137 |
|
|
$ |
8,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development on GAAP basis |
|
$ |
828 |
|
|
$ |
827 |
|
|
$ |
806 |
|
|
$ |
3,292 |
|
|
$ |
2,674 |
|
Share-based compensation expense |
|
|
171 |
|
|
|
174 |
|
|
|
136 |
|
|
|
636 |
|
|
|
430 |
|
Acquisition-related costs |
|
|
- |
|
|
|
1 |
|
|
|
4 |
|
|
|
6 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development on non-GAAP basis |
|
$ |
657 |
|
|
$ |
652 |
|
|
$ |
666 |
|
|
$ |
2,650 |
|
|
$ |
2,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense on GAAP basis |
|
$ |
194 |
|
|
$ |
200 |
|
|
$ |
224 |
|
|
$ |
799 |
|
|
$ |
806 |
|
Share-based compensation expense |
|
|
64 |
|
|
|
59 |
|
|
|
58 |
|
|
|
220 |
|
|
|
186 |
|
Acquisition-related costs |
|
|
12 |
|
|
|
25 |
|
|
|
29 |
|
|
|
103 |
|
|
|
128 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense on non-GAAP basis |
|
$ |
118 |
|
|
$ |
116 |
|
|
$ |
137 |
|
|
$ |
476 |
|
|
$ |
492 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses on GAAP basis |
|
$ |
1,518 |
|
|
$ |
1,501 |
|
|
$ |
1,790 |
|
|
$ |
6,016 |
|
|
$ |
6,349 |
|
Amortization of acquisition-related intangible assets |
|
|
441 |
|
|
|
441 |
|
|
|
356 |
|
|
|
1,764 |
|
|
|
1,873 |
|
Share-based compensation expense |
|
|
235 |
|
|
|
233 |
|
|
|
194 |
|
|
|
856 |
|
|
|
616 |
|
Restructuring, impairment and disposal charges |
|
|
55 |
|
|
|
33 |
|
|
|
404 |
|
|
|
161 |
|
|
|
996 |
|
Acquisition-related costs |
|
|
12 |
|
|
|
26 |
|
|
|
33 |
|
|
|
109 |
|
|
|
138 |
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses on non-GAAP basis |
|
$ |
775 |
|
|
$ |
768 |
|
|
$ |
803 |
|
|
$ |
3,126 |
|
|
$ |
2,726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
on GAAP basis |
|
$ |
865 |
|
|
$ |
648 |
|
|
$ |
381 |
|
|
$ |
2,493 |
|
|
$ |
(409 |
) |
Acquisition-related purchase accounting revenue adjustment (1) |
|
|
4 |
|
|
|
4 |
|
|
|
10 |
|
|
|
29 |
|
|
|
52 |
|
Purchase
accounting effect on inventory |
|
|
2 |
|
|
|
1 |
|
|
|
86 |
|
|
|
4 |
|
|
|
1,185 |
|
Amortization of acquisition-related intangible assets |
|
|
1,099 |
|
|
|
1,096 |
|
|
|
580 |
|
|
|
4,275 |
|
|
|
2,636 |
|
Share-based compensation expense |
|
|
252 |
|
|
|
251 |
|
|
|
208 |
|
|
|
920 |
|
|
|
664 |
|
Restructuring, impairment and disposal charges |
|
|
58 |
|
|
|
33 |
|
|
|
420 |
|
|
|
180 |
|
|
|
1,053 |
|
Acquisition-related costs |
|
|
13 |
|
|
|
26 |
|
|
|
34 |
|
|
|
110 |
|
|
|
139 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income on
non-GAAP basis |
|
$ |
2,293 |
|
|
$ |
2,059 |
|
|
$ |
1,719 |
|
|
$ |
8,011 |
|
|
$ |
5,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on
GAAP basis |
|
$ |
(119 |
) |
|
$ |
(112 |
) |
|
$ |
(106 |
) |
|
$ |
(454 |
) |
|
$ |
(585 |
) |
Debt-related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1 |
|
|
|
149 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on
non-GAAP basis |
|
$ |
(119 |
) |
|
$ |
(112 |
) |
|
$ |
(106 |
) |
|
$ |
(453 |
) |
|
$ |
(436 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net on
GAAP basis |
|
$ |
16 |
|
|
$ |
12 |
|
|
$ |
9 |
|
|
$ |
62 |
|
|
$ |
10 |
|
Gain on
disposition of assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(23 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net on
non-GAAP basis |
|
$ |
16 |
|
|
$ |
12 |
|
|
$ |
9 |
|
|
$ |
39 |
|
|
$ |
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes on GAAP basis |
|
$ |
755 |
|
|
$ |
548 |
|
|
$ |
235 |
|
|
$ |
1,935 |
|
|
$ |
(1,107 |
) |
Acquisition-related purchase accounting revenue adjustment (1) |
|
|
4 |
|
|
|
4 |
|
|
|
10 |
|
|
|
29 |
|
|
|
52 |
|
Purchase
accounting effect on inventory |
|
|
2 |
|
|
|
1 |
|
|
|
86 |
|
|
|
4 |
|
|
|
1,185 |
|
Amortization of acquisition-related intangible assets |
|
|
1,099 |
|
|
|
1,096 |
|
|
|
580 |
|
|
|
4,275 |
|
|
|
2,636 |
|
Share-based compensation expense |
|
|
252 |
|
|
|
251 |
|
|
|
208 |
|
|
|
920 |
|
|
|
664 |
|
Restructuring, impairment and disposal charges |
|
|
58 |
|
|
|
33 |
|
|
|
420 |
|
|
|
180 |
|
|
|
1,053 |
|
Acquisition-related costs |
|
|
13 |
|
|
|
26 |
|
|
|
34 |
|
|
|
110 |
|
|
|
139 |
|
Debt-related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1 |
|
|
|
149 |
|
Loss on
debt extinguishment |
|
|
7 |
|
|
|
- |
|
|
|
49 |
|
|
|
166 |
|
|
|
123 |
|
Gain on
disposition of assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(23 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes on non-GAAP basis |
|
$ |
2,190 |
|
|
$ |
1,959 |
|
|
$ |
1,622 |
|
|
$ |
7,597 |
|
|
$ |
4,894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes on GAAP basis |
|
$ |
89 |
|
|
$ |
39 |
|
|
$ |
841 |
|
|
$ |
35 |
|
|
$ |
642 |
|
Income
tax effects of non-GAAP reconciling adjustments |
|
|
10 |
|
|
|
49 |
|
|
|
(768 |
) |
|
|
307 |
|
|
|
(420 |
) |
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes on non-GAAP basis |
|
$ |
99 |
|
|
$ |
88 |
|
|
$ |
73 |
|
|
$ |
342 |
|
|
$ |
222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) on
GAAP basis |
|
$ |
671 |
|
|
$ |
507 |
|
|
$ |
(668 |
) |
|
$ |
1,894 |
|
|
$ |
(1,861 |
) |
Acquisition-related purchase accounting revenue adjustment (1) |
|
|
4 |
|
|
|
4 |
|
|
|
10 |
|
|
|
29 |
|
|
|
52 |
|
Purchase
accounting effect on inventory |
|
|
2 |
|
|
|
1 |
|
|
|
86 |
|
|
|
4 |
|
|
|
1,185 |
|
Amortization of acquisition-related intangible assets |
|
|
1,099 |
|
|
|
1,096 |
|
|
|
580 |
|
|
|
4,275 |
|
|
|
2,636 |
|
Share-based compensation expense |
|
|
252 |
|
|
|
251 |
|
|
|
208 |
|
|
|
920 |
|
|
|
664 |
|
Restructuring, impairment and disposal charges |
|
|
58 |
|
|
|
33 |
|
|
|
420 |
|
|
|
180 |
|
|
|
1,053 |
|
Acquisition-related costs |
|
|
13 |
|
|
|
26 |
|
|
|
34 |
|
|
|
110 |
|
|
|
139 |
|
Debt-related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1 |
|
|
|
149 |
|
Loss on
debt extinguishment |
|
|
7 |
|
|
|
- |
|
|
|
49 |
|
|
|
166 |
|
|
|
123 |
|
Gain on
disposition of assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(23 |
) |
|
|
- |
|
Income
tax effects of non-GAAP reconciling adjustments |
|
|
(10 |
) |
|
|
(49 |
) |
|
|
768 |
|
|
|
(307 |
) |
|
|
420 |
|
Discontinued operations, net of income taxes |
|
|
(5 |
) |
|
|
2 |
|
|
|
62 |
|
|
|
6 |
|
|
|
112 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income on non-GAAP
basis |
|
$ |
2,091 |
|
|
$ |
1,871 |
|
|
$ |
1,549 |
|
|
$ |
7,255 |
|
|
$ |
4,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculation - diluted on GAAP basis |
|
|
424 |
|
|
|
445 |
|
|
|
421 |
|
|
|
421 |
|
|
|
383 |
|
Non-GAAP
adjustment (2) |
|
|
32 |
|
|
|
11 |
|
|
|
26 |
|
|
|
32 |
|
|
|
25 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculation - diluted on non-GAAP basis |
|
|
456 |
|
|
|
456 |
|
|
|
447 |
|
|
|
453 |
|
|
|
408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory days on hand
on GAAP basis |
|
|
73 |
|
|
|
78 |
|
|
|
74 |
|
|
|
|
|
Non-GAAP
adjustment(3) |
|
|
1 |
|
|
|
1 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory days on hand
on non-GAAP basis |
|
|
74 |
|
|
|
79 |
|
|
|
78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Amounts represent licensing revenue not included in GAAP net
revenue as a result of the effect of purchase accounting for
acquisitions. |
(2)
Non-GAAP adjustment for number of shares used in the diluted per
share calculations excludes the impact of share-based compensation
expense expected to be incurred in future periods and not yet
recognized in the financial statements, which would otherwise be
assumed to be used to repurchase shares under the GAAP treasury
stock method. Non-GAAP adjustment also includes the impact of
Partnership REUs and equity awards, which would otherwise be
antidilutive on a GAAP basis. |
(3)
Non-GAAP adjustment for inventory days on hand represents the
impact of purchase accounting on inventory, share-based
compensation expense, and acquisition-related costs. |
|
|
|
|
|
|
|
|
|
|
|
BROADCOM LIMITED |
CONDENSED CONSOLIDATED BALANCE SHEETS -
UNAUDITED |
(IN MILLIONS) |
|
|
|
|
|
|
|
|
October 29, |
|
October 30, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
11,204 |
|
|
$ |
3,097 |
|
|
Trade
accounts receivable, net |
|
|
2,448 |
|
|
|
2,181 |
|
|
Inventory |
|
|
1,447 |
|
|
|
1,400 |
|
|
Other
current assets |
|
|
724 |
|
|
|
447 |
|
|
|
|
|
|
|
|
Total
current assets |
|
|
15,823 |
|
|
|
7,125 |
|
|
|
|
|
|
|
|
Long-term assets: |
|
|
|
|
|
Property,
plant and equipment, net |
|
|
2,599 |
|
|
|
2,509 |
|
|
Goodwill |
|
|
24,706 |
|
|
|
24,732 |
|
|
Intangible assets, net |
|
|
10,832 |
|
|
|
15,068 |
|
|
Other
long-term assets |
|
|
458 |
|
|
|
532 |
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
54,418 |
|
|
$ |
49,966 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts
payable |
|
$ |
1,105 |
|
|
$ |
1,261 |
|
|
Employee
compensation and benefits |
|
|
626 |
|
|
|
517 |
|
|
Current
portion of long-term debt |
|
|
117 |
|
|
|
454 |
|
|
Other
current liabilities |
|
|
630 |
|
|
|
846 |
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
2,478 |
|
|
|
3,078 |
|
|
|
|
|
|
|
|
Long-term
liabilities: |
|
|
|
|
|
Long-term
debt |
|
|
17,431 |
|
|
|
13,188 |
|
|
Pension
and post-retirement benefit obligations |
|
|
112 |
|
|
|
531 |
|
|
Other
long-term liabilities |
|
|
11,101 |
|
|
|
11,293 |
|
|
|
|
|
|
|
|
Total
liabilities |
|
|
31,122 |
|
|
|
28,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
Ordinary
shares |
|
|
20,505 |
|
|
|
19,241 |
|
|
Accumulated deficit |
|
|
(25 |
) |
|
|
(215 |
) |
|
Accumulated other comprehensive loss |
|
|
(91 |
) |
|
|
(134 |
) |
|
|
|
|
|
|
|
Total
Broadcom Limited shareholders' equity |
|
|
20,389 |
|
|
|
18,892 |
|
|
Noncontrolling interest |
|
|
2,907 |
|
|
|
2,984 |
|
|
Total
shareholders' equity |
|
|
23,296 |
|
|
|
21,876 |
|
|
Total
liabilities and shareholders' equity |
|
$ |
54,418 |
|
|
$ |
49,966 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADCOM LIMITED |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS - UNAUDITED |
(IN MILLIONS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarter Ended |
|
Fiscal Year Ended |
|
|
October 29, |
|
July 30, |
|
October 30, |
|
October 29, |
|
October 30, |
|
|
|
2017 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
671 |
|
|
$ |
507 |
|
|
$ |
(668 |
) |
|
$ |
1,894 |
|
|
$ |
(1,861 |
) |
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,219 |
|
|
|
1,211 |
|
|
|
700 |
|
|
|
4,737 |
|
|
|
3,042 |
|
Share-based compensation |
|
|
252 |
|
|
|
251 |
|
|
|
205 |
|
|
|
921 |
|
|
|
679 |
|
Excess
tax benefits from share-based compensation |
|
|
- |
|
|
|
- |
|
|
|
(21 |
) |
|
|
- |
|
|
|
(89 |
) |
Deferred
taxes and other non-cash taxes |
|
|
(74 |
) |
|
|
12 |
|
|
|
718 |
|
|
|
(173 |
) |
|
|
365 |
|
Non-cash
portion of debt extinguishment loss |
|
|
7 |
|
|
|
- |
|
|
|
49 |
|
|
|
166 |
|
|
|
100 |
|
Non-cash
restructuring, impairment and disposal charges |
|
|
17 |
|
|
|
14 |
|
|
|
394 |
|
|
|
71 |
|
|
|
662 |
|
Amortization of debt issuance costs and accretion of debt
discount |
|
|
5 |
|
|
|
5 |
|
|
|
9 |
|
|
|
24 |
|
|
|
36 |
|
Other |
|
|
9 |
|
|
|
13 |
|
|
|
4 |
|
|
|
7 |
|
|
|
(6 |
) |
Changes
in assets and liabilities, net of acquisitions and disposals: |
|
|
|
|
|
|
|
|
|
|
Trade
accounts receivable, net |
|
|
(31 |
) |
|
|
(344 |
) |
|
|
- |
|
|
|
(267 |
) |
|
|
(491 |
) |
Inventory |
|
|
(16 |
) |
|
|
(119 |
) |
|
|
(92 |
) |
|
|
(39 |
) |
|
|
996 |
|
Accounts
payable |
|
|
(63 |
) |
|
|
217 |
|
|
|
94 |
|
|
|
(97 |
) |
|
|
33 |
|
Employee
compensation and benefits |
|
|
80 |
|
|
|
82 |
|
|
|
93 |
|
|
|
109 |
|
|
|
163 |
|
Contributions to defined benefit pension plans |
|
|
(345 |
) |
|
|
(5 |
) |
|
|
(19 |
) |
|
|
(361 |
) |
|
|
(33 |
) |
Other
current assets and current liabilities |
|
|
29 |
|
|
|
(179 |
) |
|
|
(60 |
) |
|
|
(541 |
) |
|
|
(98 |
) |
Other
long-term assets and long-term liabilities |
|
|
199 |
|
|
|
(9 |
) |
|
|
(54 |
) |
|
|
100 |
|
|
|
(87 |
) |
Net cash
provided by operating activities |
|
|
1,959 |
|
|
|
1,656 |
|
|
|
1,352 |
|
|
|
6,551 |
|
|
|
3,411 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
Purchases
of property, plant and equipment |
|
|
(233 |
) |
|
|
(255 |
) |
|
|
(193 |
) |
|
|
(1,069 |
) |
|
|
(723 |
) |
Proceeds
from disposals of property, plant and equipment |
|
|
440 |
|
|
|
1 |
|
|
|
- |
|
|
|
441 |
|
|
|
5 |
|
Purchases
of investments |
|
|
(7 |
) |
|
|
- |
|
|
|
- |
|
|
|
(207 |
) |
|
|
(58 |
) |
Proceeds
from sales and maturities of investments |
|
|
200 |
|
|
|
- |
|
|
|
15 |
|
|
|
200 |
|
|
|
104 |
|
Acquisitions of businesses, net of cash acquired |
|
|
- |
|
|
|
(3 |
) |
|
|
- |
|
|
|
(40 |
) |
|
|
(10,055 |
) |
Proceeds
from sales of businesses |
|
|
- |
|
|
|
- |
|
|
|
200 |
|
|
|
10 |
|
|
|
898 |
|
Other |
|
|
(4 |
) |
|
|
(1 |
) |
|
|
4 |
|
|
|
(9 |
) |
|
|
(11 |
) |
Net cash
provided by (used in) investing activities |
|
|
396 |
|
|
|
(258 |
) |
|
|
26 |
|
|
|
(674 |
) |
|
|
(9,840 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
Proceeds
from issuance of long-term debt |
|
|
3,980 |
|
|
|
- |
|
|
|
3,584 |
|
|
|
17,426 |
|
|
|
19,510 |
|
Repayment
of debt |
|
|
- |
|
|
|
- |
|
|
|
(3,697 |
) |
|
|
(13,668 |
) |
|
|
(9,842 |
) |
Payment
of assumed debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,475 |
) |
Payment
of debt issuance costs |
|
|
(1 |
) |
|
|
- |
|
|
|
(15 |
) |
|
|
(24 |
) |
|
|
(123 |
) |
Dividend
and distribution payments |
|
|
(439 |
) |
|
|
(438 |
) |
|
|
(213 |
) |
|
|
(1,745 |
) |
|
|
(750 |
) |
Issuance
of ordinary shares |
|
|
66 |
|
|
|
41 |
|
|
|
78 |
|
|
|
257 |
|
|
|
295 |
|
Excess
tax benefits from share-based compensation |
|
|
- |
|
|
|
- |
|
|
|
21 |
|
|
|
- |
|
|
|
89 |
|
Payment
of capital lease obligations |
|
|
(6 |
) |
|
|
(6 |
) |
|
|
- |
|
|
|
(16 |
) |
|
|
- |
|
Net cash
provided by (used in) financing activities |
|
|
3,600 |
|
|
|
(403 |
) |
|
|
(242 |
) |
|
|
2,230 |
|
|
|
7,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and
cash equivalents |
|
|
5,955 |
|
|
|
995 |
|
|
|
1,136 |
|
|
|
8,107 |
|
|
|
1,275 |
|
Cash and cash
equivalents at the beginning of period |
|
|
5,249 |
|
|
|
4,254 |
|
|
|
1,961 |
|
|
|
3,097 |
|
|
|
1,822 |
|
Cash and cash
equivalents at end of period |
|
$ |
11,204 |
|
|
$ |
5,249 |
|
|
$ |
3,097 |
|
|
$ |
11,204 |
|
|
$ |
3,097 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
Cash paid for
interest |
|
$ |
1 |
|
|
$ |
206 |
|
|
$ |
105 |
|
|
$ |
310 |
|
|
$ |
448 |
|
Cash paid for income
taxes |
|
$ |
96 |
|
|
$ |
35 |
|
|
$ |
99 |
|
|
$ |
349 |
|
|
$ |
242 |
|
|
|
|
|
|
|
|
|
|
|
|
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