SAN JOSE, Calif., Sept. 3, 2020 /PRNewswire/
-- Broadcom Inc. (Nasdaq: AVGO), a global technology
leader that designs, develops and supplies semiconductor and
infrastructure software solutions, today reported financial results
for its third quarter of fiscal year 2020, ended August 2, 2020, provided guidance for the fourth
quarter of its fiscal year 2020 and announced its quarterly
dividends.
"We delivered third quarter revenue results in-line with our
expectations, driven by healthy demand from cloud and telecom
customers, which more than offset the expected reset in wireless,"
said Hock Tan, President and CEO of Broadcom Inc. "Our outlook for
the fourth quarter reflects a strong anticipated ramp in wireless,
as well as the continuing surge in demand for networking from cloud
and telecom customers, more than offsetting expected softness in
enterprise."
"We generated record free cash flow of over $3 billion, which represented 33 percent growth
on a year on year basis, and reduced total debt by $1.9 billion in the quarter," said Tom Krause, CFO of Broadcom Inc. "Looking ahead,
our cash flow outlook remains robust and we plan to pay down an
additional $3 billion in debt in the
fourth quarter."
Third Quarter Fiscal Year 2020 Financial Highlights
|
|
GAAP
|
|
Non-GAAP
|
(Dollars in millions,
except per share data)
|
|
Q3 20
|
|
Q3 19
|
|
Change
|
|
Q3 20
|
|
Q3 19
|
|
Change
|
Net
revenue
|
|
$
|
5,821
|
|
$
|
5,515
|
|
+6%
|
|
$
|
5,821
|
|
$
|
5,515
|
|
+6%
|
Net income
|
|
$
|
688
|
|
$
|
715
|
|
-$
27
|
|
$
|
2,435
|
|
$
|
2,281
|
|
+$
154
|
Earnings per common
share - diluted
|
|
$
|
1.45
|
|
$
|
1.71
|
|
-$
0.26
|
|
$
|
5.40
|
|
$
|
5.16
|
|
+$
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
Q3 20
|
|
Q3 19
|
|
Change
|
Cash flow from
operations
|
|
|
|
|
|
|
|
|
|
$
|
3,178
|
|
$
|
2,419
|
|
+$
759
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
$
|
3,342
|
|
$
|
3,064
|
|
+$
278
|
Free cash
flow
|
|
|
|
|
|
|
|
|
|
$
|
3,073
|
|
$
|
2,307
|
|
+$
766
|
Net revenue by
segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Q3 20
|
|
Q3 19
|
|
Change
|
Semiconductor
solutions
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,219
|
|
72%
|
|
$
|
4,375
|
|
79%
|
|
-4%
|
Infrastructure
software
|
|
|
|
|
|
|
|
|
|
|
|
|
1,602
|
|
28
|
|
|
1,140
|
|
21
|
|
+41%
|
Total net
revenue
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,821
|
|
100%
|
|
$
|
5,515
|
|
100%
|
|
|
|
The Company's cash and cash equivalents at the end of the third
fiscal quarter were $8,857 million,
compared to $9,207 million at the end
of the prior quarter.
During the third fiscal quarter, the Company generated
$3,178 million in cash from
operations and spent $105 million on
capital expenditures.
On June 30, 2020, the Company paid
a cash dividend of $3.25 per share of
common stock, totaling $1,312 million
and a cash dividend of $20.00 per
share of mandatory convertible preferred stock, totaling
$74 million.
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.
Fourth Quarter Fiscal Year 2020 Business Outlook
Based on current business trends and conditions, the outlook for
the fourth quarter of fiscal year 2020, ending November 1, 2020, is expected to be as
follows:
- Fourth quarter revenue guidance of $6.4
billion plus or minus $150
million; and
- Fourth quarter Adjusted EBITDA of $3,744
million plus or minus $75
million, or 58.5% of revenue at the midpoint of
guidance.
The guidance provided above is only an estimate of what the
Company believes is realizable as of the date of this release. The
Company is not readily able to provide a reconciliation of
projected Adjusted EBITDA to projected net income without
unreasonable effort. 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.
Broadcom Inc. will be presenting to investors at Deutsche Bank's
Virtual Technology Conference on September
15, 2020.
Quarterly Dividends
The Company's Board of Directors has approved a quarterly cash
dividend on its common stock of $3.25
per share. The common stock dividend is payable on September 30, 2020 to common stockholders of
record at the close of business (5:00 p.m.
Eastern Time) on September 22,
2020.
The Company's Board of Directors has also approved a quarterly
cash dividend on its 8.00% Mandatory Convertible Preferred Stock,
Series A, of $20.00 per share. This
dividend is payable on September 30,
2020 to preferred stockholders of record at the close of
business (5:00 p.m. Eastern Time) on
September 15, 2020.
Financial Results Conference Call
Broadcom Inc. will host a conference call to review its
financial results for the third quarter of fiscal year 2020, ended
August 2, 2020, and to discuss the
business outlook, 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 8878889.
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: 8878889. A
webcast of the conference call will also be available in the
"Investors" section of Broadcom's website at www.broadcom.com.
Basis of Presentation
The Company's financial results include contributions from the
Symantec enterprise security business' continuing operations
starting in the first quarter of fiscal year 2020. The financial
results from businesses that have been classified as discontinued
operations in the Company's financial statements are not included
in the results presented above, unless otherwise stated.
Non-GAAP Financial Measures
In addition to GAAP reporting, Broadcom provides
investors with net revenue, net income, operating income, gross
margin, operating expenses, cash flow and other data on a non-GAAP
basis. This non-GAAP information excludes amortization of
acquisition-related intangible assets, stock-based compensation
expense, restructuring, impairment and disposal charges,
acquisition-related costs, including integration costs, purchase
accounting effect on inventory, litigation settlements, loss on
debt extinguishment, gain from lapse of indemnification, gains
(losses) on investments, gain from sale of business, income (loss)
from discontinued operations and non-GAAP tax reconciling
adjustments. Management does not believe that these items are
reflective of the Company's underlying performance. 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 exclusion of these and other
similar items from Broadcom's non-GAAP financial results should not
be interpreted as implying that these items are non-recurring,
infrequent or unusual. Free cash flow measures have limitations as
they omit certain components of the overall cash flow statement and
do not represent the residual cash flow available for discretionary
expenditures. Investors should not consider presentation of
free cash flow measures as implying that stockholders have any
right to such cash. Broadcom's free cash flow may not be calculated
in a manner comparable to similarly named measures used by other
companies.
Broadcom believes this non-GAAP financial information
provides additional insight into the Company's on-going
performance. Therefore, Broadcom provides 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 Inc.
Broadcom Inc., (NASDAQ: AVGO), a Delaware corporation headquartered in
San Jose, CA, is a global
technology leader that designs, develops and supplies a broad range
of semiconductor and infrastructure software solutions. Broadcom's
category-leading product portfolio serves critical markets
including data center, networking, enterprise software, broadband,
wireless, storage and industrial. Our solutions include data center
networking and storage, enterprise, mainframe and cyber security
software focused on automation, monitoring and security, smartphone
components, telecoms and factory automation. For more information,
go to www.broadcom.com.
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 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: the COVID-19 pandemic,
which has, and will likely continue to, negatively impact the
global economy and disrupt normal business activity, and which may
have an adverse effect on our results of operations; any loss of
our significant customers and fluctuations in the timing and volume
of significant customer demand; our dependence on contract
manufacturing and outsourced supply chain; our dependency on a
limited number of suppliers; global economic conditions and
concerns; international political and economic conditions;
government regulations, trade restrictions and trade tensions; our
significant indebtedness and the need to generate sufficient cash
flows to service and repay such debt; dependence on and risks
associated with distributors and resellers of our products;
dependence on senior management and our ability to attract and
retain qualified personnel; 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 businesses with our
existing businesses and our ability to achieve the benefits, growth
prospects and synergies expected by such acquisitions; involvement
in legal or administrative proceedings; quarterly and annual
fluctuations in operating results; our ability to accurately
estimate customers' demand and adjust our manufacturing and supply
chain accordingly; cyclicality in the semiconductor industry or in
our target markets; our competitive performance and ability to
continue achieving design wins with our customers, as well as the
timing of any design wins; prolonged disruptions of our or our
contract manufacturers' manufacturing facilities, warehouses 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 ability to protect our intellectual
property and the unpredictability of any associated litigation
expenses; compatibility of our software products with operating
environments, platforms or third-party products; our ability to
enter into satisfactory software license agreements; sales to our
government clients; availability of third party software used in
our products; use of open source code sources in our products; any
expenses or reputational damage associated with resolving customer
product warranty and indemnification claims; market acceptance of
the end products into which our products are designed; our ability
to sell to new types of customers and to keep pace with
technological advances; our compliance with privacy and data
security laws; our ability to protect against a breach of security
systems; changes in accounting standards; fluctuations in foreign
exchange rates; our provision for income taxes and overall cash tax
costs, legislation that may impact our overall cash tax costs and
our ability to maintain tax concessions in certain jurisdictions;
and other events and trends on a national, regional and global
scale, including those of a political, economic, business,
competitive and regulatory nature. Many of the foregoing risks and
uncertainties are, and will be, exacerbated by the COVID-19
pandemic and any worsening of the global business and economic
environment as a result.
Our filings with the 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. Actual results may vary from the estimates
provided. We undertake no intent or obligation to publicly update
or revise any of the estimates and other forward-looking statements
made in this announcement, whether as a result of new information,
future events or otherwise, except as required by law.
Contact:
Broadcom Inc.
Beatrice F. Russotto
Investor Relations
408-433-8000
investor.relations@broadcom.com
|
1The
Company is not readily able to provide a reconciliation of the
projected non-GAAP financial information presented to the relevant
projected GAAP measure without unreasonable effort.
|
BROADCOM
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
|
(IN MILLIONS,
EXCEPT PER SHARE DATA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarter
Ended
|
|
Three Fiscal
Quarters Ended
|
|
|
August
2,
|
|
May
3,
|
|
August
4,
|
|
August
2,
|
|
August
4,
|
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
$
|
5,821
|
|
$
|
5,742
|
|
$
|
5,515
|
|
$
|
17,421
|
|
$
|
16,821
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
1,537
|
|
|
1,592
|
|
|
1,651
|
|
|
4,765
|
|
|
4,935
|
Amortization
of acquisition-related intangible assets
|
|
|
953
|
|
|
954
|
|
|
828
|
|
|
2,857
|
|
|
2,487
|
Restructuring
charges
|
|
|
15
|
|
|
7
|
|
|
2
|
|
|
30
|
|
|
68
|
Total cost of
revenue
|
|
|
2,505
|
|
|
2,553
|
|
|
2,481
|
|
|
7,652
|
|
|
7,490
|
Gross
margin
|
|
|
3,316
|
|
|
3,189
|
|
|
3,034
|
|
|
9,769
|
|
|
9,331
|
Research and
development
|
|
|
1,228
|
|
|
1,269
|
|
|
1,235
|
|
|
3,786
|
|
|
3,519
|
Selling, general and
administrative
|
|
|
428
|
|
|
501
|
|
|
410
|
|
|
1,530
|
|
|
1,300
|
Amortization of
acquisition-related intangible assets
|
|
|
600
|
|
|
599
|
|
|
475
|
|
|
1,802
|
|
|
1,424
|
Restructuring,
impairment and disposal charges
|
|
|
52
|
|
|
54
|
|
|
49
|
|
|
163
|
|
|
698
|
Total operating
expenses
|
|
|
2,308
|
|
|
2,423
|
|
|
2,169
|
|
|
7,281
|
|
|
6,941
|
Operating
income
|
|
|
1,008
|
|
|
766
|
|
|
865
|
|
|
2,488
|
|
|
2,390
|
Interest
expense
|
|
|
(464)
|
|
|
(487)
|
|
|
(362)
|
|
|
(1,357)
|
|
|
(1,083)
|
Other income,
net
|
|
|
49
|
|
|
130
|
|
|
41
|
|
|
175
|
|
|
172
|
Income from
continuing operations before income taxes
|
|
|
593
|
|
|
409
|
|
|
544
|
|
|
1,306
|
|
|
1,479
|
Benefit from income
taxes
|
|
|
(96)
|
|
|
(159)
|
|
|
(171)
|
|
|
(331)
|
|
|
(410)
|
Income from
continuing operations
|
|
|
689
|
|
|
568
|
|
|
715
|
|
|
1,637
|
|
|
1,889
|
Loss from
discontinued operations, net of income taxes
|
|
|
(1)
|
|
|
(5)
|
|
|
-
|
|
|
(1)
|
|
|
(12)
|
Net income
|
|
|
688
|
|
|
563
|
|
|
715
|
|
|
1,636
|
|
|
1,877
|
Dividends on
preferred stock (1)
|
|
|
(74)
|
|
|
(75)
|
|
|
-
|
|
|
(223)
|
|
|
-
|
Net income
attributable to common stock
|
|
$
|
614
|
|
$
|
488
|
|
$
|
715
|
|
$
|
1,413
|
|
$
|
1,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share attributable to common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per
share from continuing operations
|
|
$
|
1.53
|
|
$
|
1.23
|
|
$
|
1.80
|
|
$
|
3.53
|
|
$
|
4.73
|
Loss per share
from discontinued operations
|
|
|
(0.01)
|
|
|
(0.01)
|
|
|
-
|
|
|
(0.01)
|
|
|
(0.03)
|
Net income per
share
|
|
$
|
1.52
|
|
$
|
1.22
|
|
$
|
1.80
|
|
$
|
3.52
|
|
$
|
4.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
share attributable to common stock (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per
share from continuing operations
|
|
$
|
1.46
|
|
$
|
1.18
|
|
$
|
1.71
|
|
$
|
3.37
|
|
$
|
4.50
|
Loss per share
from discontinued operations
|
|
|
(0.01)
|
|
|
(0.01)
|
|
|
-
|
|
|
(0.01)
|
|
|
(0.03)
|
Net income per
share
|
|
$
|
1.45
|
|
$
|
1.17
|
|
$
|
1.71
|
|
$
|
3.36
|
|
$
|
4.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
403
|
|
|
401
|
|
|
398
|
|
|
401
|
|
|
399
|
Diluted
|
|
|
422
|
|
|
417
|
|
|
418
|
|
|
420
|
|
|
420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense included in continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
37
|
|
$
|
41
|
|
$
|
47
|
|
$
|
121
|
|
$
|
122
|
Research and
development
|
|
|
337
|
|
|
373
|
|
|
456
|
|
|
1,101
|
|
|
1,138
|
Selling,
general and administrative
|
|
|
91
|
|
|
103
|
|
|
129
|
|
|
305
|
|
|
381
|
Total
stock-based compensation expense
|
|
$
|
465
|
|
$
|
517
|
|
$
|
632
|
|
$
|
1,527
|
|
$
|
1,641
|
|
(1) For the fiscal
quarter and three fiscal quarters ended August 2, 2020 and the
fiscal quarter ended May 3, 2020, net income attributable to common
stock excludes dividends on Mandatory Convertible Preferred Stock
issued during the fiscal quarter ended November 3, 2019.
|
(2) For the fiscal quarter and three fiscal quarters ended August
2, 2020 and the fiscal quarter ended May 3, 2020, diluted income
per share excluded the potentially dilutive effect of Mandatory
Convertible Preferred Stock as the impact was
antidilutive.
|
BROADCOM
INC.
|
FINANCIAL
RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED
|
(IN
MILLIONS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarter
Ended
|
|
Three Fiscal
Quarters Ended
|
|
|
August
2,
|
|
May
3,
|
|
August
4,
|
|
August
2,
|
|
August
4,
|
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin on GAAP
basis
|
|
$
|
3,316
|
|
$
|
3,189
|
|
$
|
3,034
|
|
$
|
9,769
|
|
$
|
9,331
|
Purchase
accounting effect on inventory
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
11
|
|
|
-
|
Amortization
of acquisition-related intangible assets
|
|
|
953
|
|
|
954
|
|
|
828
|
|
|
2,857
|
|
|
2,487
|
Stock-based
compensation expense
|
|
|
37
|
|
|
41
|
|
|
47
|
|
|
121
|
|
|
122
|
Restructuring
charges
|
|
|
15
|
|
|
7
|
|
|
2
|
|
|
30
|
|
|
68
|
Acquisition-related costs
|
|
|
-
|
|
|
5
|
|
|
5
|
|
|
6
|
|
|
12
|
Gross margin on
non-GAAP basis
|
|
$
|
4,321
|
|
$
|
4,196
|
|
$
|
3,916
|
|
$
|
12,794
|
|
$
|
12,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development on GAAP basis
|
|
$
|
1,228
|
|
$
|
1,269
|
|
$
|
1,235
|
|
$
|
3,786
|
|
$
|
3,519
|
Stock-based
compensation expense
|
|
|
337
|
|
|
373
|
|
|
456
|
|
|
1,101
|
|
|
1,138
|
Acquisition-related costs
|
|
|
1
|
|
|
5
|
|
|
1
|
|
|
13
|
|
|
4
|
Research and
development on non-GAAP basis
|
|
$
|
890
|
|
$
|
891
|
|
$
|
778
|
|
$
|
2,672
|
|
$
|
2,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense on GAAP basis
|
|
$
|
428
|
|
$
|
501
|
|
$
|
410
|
|
$
|
1,530
|
|
$
|
1,300
|
Stock-based
compensation expense
|
|
|
91
|
|
|
103
|
|
|
129
|
|
|
305
|
|
|
381
|
Acquisition-related costs
|
|
|
66
|
|
|
95
|
|
|
53
|
|
|
336
|
|
|
187
|
Litigation
settlements
|
|
|
21
|
|
|
29
|
|
|
-
|
|
|
63
|
|
|
-
|
Selling, general and
administrative expense on non-GAAP basis
|
|
$
|
250
|
|
$
|
274
|
|
$
|
228
|
|
$
|
826
|
|
$
|
732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses on GAAP basis
|
|
$
|
2,308
|
|
$
|
2,423
|
|
$
|
2,169
|
|
$
|
7,281
|
|
$
|
6,941
|
Amortization
of acquisition-related intangible assets
|
|
|
600
|
|
|
599
|
|
|
475
|
|
|
1,802
|
|
|
1,424
|
Stock-based
compensation expense
|
|
|
428
|
|
|
476
|
|
|
585
|
|
|
1,406
|
|
|
1,519
|
Restructuring,
impairment and disposal charges
|
|
|
52
|
|
|
54
|
|
|
49
|
|
|
163
|
|
|
698
|
Litigation
settlements
|
|
|
21
|
|
|
29
|
|
|
-
|
|
|
63
|
|
|
-
|
Acquisition-related costs
|
|
|
67
|
|
|
100
|
|
|
54
|
|
|
349
|
|
|
191
|
Total operating
expenses on non-GAAP basis
|
|
$
|
1,140
|
|
$
|
1,165
|
|
$
|
1,006
|
|
$
|
3,498
|
|
$
|
3,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income on
GAAP basis
|
|
$
|
1,008
|
|
$
|
766
|
|
$
|
865
|
|
$
|
2,488
|
|
$
|
2,390
|
Purchase
accounting effect on inventory
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
11
|
|
|
-
|
Amortization
of acquisition-related intangible assets
|
|
|
1,553
|
|
|
1,553
|
|
|
1,303
|
|
|
4,659
|
|
|
3,911
|
Stock-based
compensation expense
|
|
|
465
|
|
|
517
|
|
|
632
|
|
|
1,527
|
|
|
1,641
|
Restructuring,
impairment and disposal charges
|
|
|
67
|
|
|
61
|
|
|
51
|
|
|
193
|
|
|
766
|
Litigation
settlements
|
|
|
21
|
|
|
29
|
|
|
-
|
|
|
63
|
|
|
-
|
Acquisition-related costs
|
|
|
67
|
|
|
105
|
|
|
59
|
|
|
355
|
|
|
203
|
Operating income on
non-GAAP basis
|
|
$
|
3,181
|
|
$
|
3,031
|
|
$
|
2,910
|
|
$
|
9,296
|
|
$
|
8,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on
GAAP basis
|
|
$
|
(464)
|
|
$
|
(487)
|
|
$
|
(362)
|
|
$
|
(1,357)
|
|
$
|
(1,083)
|
Loss on debt
extinguishment
|
|
|
55
|
|
|
93
|
|
|
2
|
|
|
153
|
|
|
28
|
Interest expense on
non-GAAP basis
|
|
$
|
(409)
|
|
$
|
(394)
|
|
$
|
(360)
|
|
$
|
(1,204)
|
|
$
|
(1,055)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net on
GAAP basis
|
|
$
|
49
|
|
$
|
130
|
|
$
|
41
|
|
$
|
175
|
|
$
|
172
|
Gain from lapse of
indemnification
|
|
|
-
|
|
|
(116)
|
|
|
-
|
|
|
(116)
|
|
|
-
|
Gains on investments
|
|
|
(31)
|
|
|
(8)
|
|
|
(28)
|
|
|
(21)
|
|
|
(95)
|
Gain from sale of
business
|
|
|
(23)
|
|
|
-
|
|
|
-
|
|
|
(23)
|
|
|
-
|
Acquisition-related gain
|
|
|
-
|
|
|
(3)
|
|
|
-
|
|
|
(7)
|
|
|
-
|
Other income (loss),
net on non-GAAP basis
|
|
$
|
(5)
|
|
$
|
3
|
|
$
|
13
|
|
$
|
8
|
|
$
|
77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes on GAAP basis
|
|
$
|
593
|
|
$
|
409
|
|
$
|
544
|
|
$
|
1,306
|
|
$
|
1,479
|
Purchase
accounting effect on inventory
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
11
|
|
|
-
|
Amortization
of acquisition-related intangible assets
|
|
|
1,553
|
|
|
1,553
|
|
|
1,303
|
|
|
4,659
|
|
|
3,911
|
Stock-based
compensation expense
|
|
|
465
|
|
|
517
|
|
|
632
|
|
|
1,527
|
|
|
1,641
|
Restructuring,
impairment and disposal charges
|
|
|
67
|
|
|
61
|
|
|
51
|
|
|
193
|
|
|
766
|
Litigation
settlements
|
|
|
21
|
|
|
29
|
|
|
-
|
|
|
63
|
|
|
-
|
Acquisition-related costs
|
|
|
67
|
|
|
102
|
|
|
59
|
|
|
348
|
|
|
203
|
Loss on debt
extinguishment
|
|
|
55
|
|
|
93
|
|
|
2
|
|
|
153
|
|
|
28
|
Gain from
lapse of indemnification
|
|
|
-
|
|
|
(116)
|
|
|
-
|
|
|
(116)
|
|
|
-
|
Gains on
investments
|
|
|
(31)
|
|
|
(8)
|
|
|
(28)
|
|
|
(21)
|
|
|
(95)
|
Gain from sale
of business
|
|
|
(23)
|
|
|
-
|
|
|
-
|
|
|
(23)
|
|
|
-
|
Income before income
taxes on non-GAAP basis
|
|
$
|
2,767
|
|
$
|
2,640
|
|
$
|
2,563
|
|
$
|
8,100
|
|
$
|
7,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit from income
taxes on GAAP basis
|
|
$
|
(96)
|
|
$
|
(159)
|
|
$
|
(171)
|
|
$
|
(331)
|
|
$
|
(410)
|
Non-GAAP tax
reconciling adjustments
|
|
|
428
|
|
|
476
|
|
|
453
|
|
|
1,303
|
|
|
1,282
|
Provision for income
taxes on non-GAAP basis
|
|
$
|
332
|
|
$
|
317
|
|
$
|
282
|
|
$
|
972
|
|
$
|
872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income on GAAP
basis
|
|
$
|
688
|
|
$
|
563
|
|
$
|
715
|
|
$
|
1,636
|
|
$
|
1,877
|
Purchase
accounting effect on inventory
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
11
|
|
|
-
|
Amortization
of acquisition-related intangible assets
|
|
|
1,553
|
|
|
1,553
|
|
|
1,303
|
|
|
4,659
|
|
|
3,911
|
Stock-based
compensation expense
|
|
|
465
|
|
|
517
|
|
|
632
|
|
|
1,527
|
|
|
1,641
|
Restructuring,
impairment and disposal charges
|
|
|
67
|
|
|
61
|
|
|
51
|
|
|
193
|
|
|
766
|
Litigation
settlements
|
|
|
21
|
|
|
29
|
|
|
-
|
|
|
63
|
|
|
-
|
Acquisition-related costs
|
|
|
67
|
|
|
102
|
|
|
59
|
|
|
348
|
|
|
203
|
Loss on debt
extinguishment
|
|
|
55
|
|
|
93
|
|
|
2
|
|
|
153
|
|
|
28
|
Gain from
lapse of indemnification
|
|
|
-
|
|
|
(116)
|
|
|
-
|
|
|
(116)
|
|
|
-
|
Gains on
investments
|
|
|
(31)
|
|
|
(8)
|
|
|
(28)
|
|
|
(21)
|
|
|
(95)
|
Gain from sale
of business
|
|
|
(23)
|
|
|
-
|
|
|
-
|
|
|
(23)
|
|
|
-
|
Non-GAAP tax
reconciling adjustments
|
|
|
(428)
|
|
|
(476)
|
|
|
(453)
|
|
|
(1,303)
|
|
|
(1,282)
|
Discontinued
operations, net of income taxes
|
|
|
1
|
|
|
5
|
|
|
-
|
|
|
1
|
|
|
12
|
Net income on
non-GAAP basis
|
|
$
|
2,435
|
|
$
|
2,323
|
|
$
|
2,281
|
|
$
|
7,128
|
|
$
|
7,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used in per share calculations - diluted on GAAP
basis
|
|
|
422
|
|
|
417
|
|
|
418
|
|
|
420
|
|
|
420
|
Non-GAAP
adjustment (1)
|
|
|
29
|
|
|
35
|
|
|
24
|
|
|
32
|
|
|
24
|
Weighted-average
shares used in per share calculations - diluted on non-GAAP
basis
|
|
|
451
|
|
|
452
|
|
|
442
|
|
|
452
|
|
|
444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income on
non-GAAP basis
|
|
$
|
2,435
|
|
$
|
2,323
|
|
$
|
2,281
|
|
$
|
7,128
|
|
$
|
7,061
|
Interest
expense on non-GAAP basis
|
|
|
409
|
|
|
394
|
|
|
360
|
|
|
1,204
|
|
|
1,055
|
Provision for
income taxes on non-GAAP basis
|
|
|
332
|
|
|
317
|
|
|
282
|
|
|
972
|
|
|
872
|
Depreciation
|
|
|
138
|
|
|
147
|
|
|
141
|
|
|
431
|
|
|
426
|
Amortization
of purchased intangibles and right-of-use assets
|
|
|
28
|
|
|
28
|
|
|
-
|
|
|
81
|
|
|
-
|
Adjusted
EBITDA
|
|
$
|
3,342
|
|
$
|
3,209
|
|
$
|
3,064
|
|
$
|
9,816
|
|
$
|
9,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
3,178
|
|
$
|
3,213
|
|
$
|
2,419
|
|
$
|
8,713
|
|
$
|
7,218
|
Purchases of
property, plant and equipment
|
|
|
(105)
|
|
|
(148)
|
|
|
(112)
|
|
|
(361)
|
|
|
(336)
|
Free cash
flow
|
|
$
|
3,073
|
|
$
|
3,065
|
|
$
|
2,307
|
|
$
|
8,352
|
|
$
|
6,882
|
|
|
Fiscal
Quarter Ending
|
|
|
November
1,
|
Expected average
diluted share count:
|
|
2020
|
|
|
|
|
Weighted-average shares used in per share calculation - diluted on
GAAP basis
|
|
424
|
Non-GAAP
adjustment (1)
|
|
27
|
Weighted-average shares used in per share calculation - diluted on
non-GAAP basis
|
|
451
|
|
(1) Non-GAAP
adjustment for the number of shares used in the diluted per share
calculations excludes the impact of stock-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. For the fiscal quarter and three fiscal quarters
ended August 2, 2020 and the fiscal quarter ended May 3, 2020, the
non-GAAP adjustment included the impact of Mandatory Convertible
Preferred Stock that was antidilutive on a GAAP basis. For the
fiscal quarter ending November 1, 2020, the non-GAAP adjustment
includes the impact of Mandatory Convertible Preferred Stock that
is expected to be antidilutive on a GAAP basis.
|
BROADCOM
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS - UNAUDITED
|
(IN
MILLIONS)
|
|
|
|
|
|
|
|
|
|
|
|
August
2,
|
|
November
3,
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
8,857
|
|
$
|
5,055
|
|
Trade accounts
receivable, net
|
|
|
2,684
|
|
|
3,259
|
|
Inventory
|
|
|
1,081
|
|
|
874
|
|
Other current
assets
|
|
|
1,059
|
|
|
729
|
|
Total current
assets
|
|
|
13,681
|
|
|
9,917
|
|
|
|
|
|
|
|
|
|
Long-term
assets:
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
|
2,567
|
|
|
2,565
|
|
Goodwill
|
|
|
43,447
|
|
|
36,714
|
|
Intangible
assets, net
|
|
|
18,357
|
|
|
17,554
|
|
Other
long-term assets
|
|
|
1,246
|
|
|
743
|
|
Total
assets
|
|
$
|
79,298
|
|
$
|
67,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,092
|
|
$
|
855
|
|
Employee
compensation and benefits
|
|
|
732
|
|
|
641
|
|
Current
portion of long-term debt
|
|
|
822
|
|
|
2,787
|
|
Other current
liabilities
|
|
|
4,056
|
|
|
2,616
|
|
Total current
liabilities
|
|
|
6,702
|
|
|
6,899
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
43,201
|
|
|
30,011
|
|
Other
long-term liabilities
|
|
|
5,810
|
|
|
5,613
|
|
Total
liabilities
|
|
|
55,713
|
|
|
42,523
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividend obligation
|
|
|
28
|
|
|
29
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
-
|
|
Common
stock
|
|
|
-
|
|
|
-
|
|
Additional
paid-in capital
|
|
|
23,688
|
|
|
25,081
|
|
Retained
earnings
|
|
|
-
|
|
|
-
|
|
Accumulated
other comprehensive loss
|
|
|
(131)
|
|
|
(140)
|
|
Total
stockholders' equity
|
|
|
23,557
|
|
|
24,941
|
|
Total
liabilities and equity
|
|
$
|
79,298
|
|
$
|
67,493
|
|
BROADCOM
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
|
(IN
MILLIONS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarter
Ended
|
|
Three Fiscal
Quarters Ended
|
|
|
August
2,
|
|
May
3,
|
|
August
4,
|
|
August
2,
|
|
August
4,
|
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
688
|
|
$
|
563
|
|
$
|
715
|
|
$
|
1,636
|
|
$
|
1,877
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of intangible and right-of-use assets
|
|
|
1,581
|
|
|
1,583
|
|
|
1,309
|
|
|
4,746
|
|
|
3,930
|
Depreciation
|
|
|
138
|
|
|
147
|
|
|
141
|
|
|
431
|
|
|
426
|
Stock-based
compensation
|
|
|
465
|
|
|
517
|
|
|
632
|
|
|
1,527
|
|
|
1,641
|
Deferred taxes
and other non-cash taxes
|
|
|
(436)
|
|
|
(175)
|
|
|
(235)
|
|
|
(683)
|
|
|
(708)
|
Loss on debt
extinguishment
|
|
|
55
|
|
|
93
|
|
|
2
|
|
|
153
|
|
|
2
|
Non-cash
restructuring, impairment and disposal charges
|
|
|
15
|
|
|
6
|
|
|
15
|
|
|
32
|
|
|
113
|
Non-cash
interest expense
|
|
|
22
|
|
|
31
|
|
|
23
|
|
|
83
|
|
|
50
|
Other
|
|
|
(54)
|
|
|
(8)
|
|
|
(23)
|
|
|
(43)
|
|
|
(83)
|
Changes in
assets and liabilities, net of acquisitions and
disposals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts receivable, net
|
|
|
542
|
|
|
440
|
|
|
(60)
|
|
|
590
|
|
|
201
|
Inventory
|
|
|
(128)
|
|
|
(10)
|
|
|
(57)
|
|
|
(98)
|
|
|
33
|
Accounts payable
|
|
|
(123)
|
|
|
233
|
|
|
244
|
|
|
227
|
|
|
105
|
Employee compensation and benefits
|
|
|
231
|
|
|
61
|
|
|
104
|
|
|
75
|
|
|
(360)
|
Other current assets and current liabilities
|
|
|
(2)
|
|
|
118
|
|
|
(354)
|
|
|
462
|
|
|
115
|
Other long-term assets and long-term liabilities
|
|
|
184
|
|
|
(386)
|
|
|
(37)
|
|
|
(425)
|
|
|
(124)
|
Net cash provided
by operating activities
|
|
|
3,178
|
|
|
3,213
|
|
|
2,419
|
|
|
8,713
|
|
|
7,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
of businesses, net of cash acquired
|
|
|
(2)
|
|
|
-
|
|
|
(6)
|
|
|
(10,872)
|
|
|
(16,033)
|
Proceeds from
sales of businesses
|
|
|
50
|
|
|
168
|
|
|
-
|
|
|
218
|
|
|
957
|
Purchases of
property, plant and equipment
|
|
|
(105)
|
|
|
(148)
|
|
|
(112)
|
|
|
(361)
|
|
|
(336)
|
Proceeds from
disposals of property, plant and equipment
|
|
|
10
|
|
|
-
|
|
|
82
|
|
|
10
|
|
|
82
|
Other
|
|
|
1
|
|
|
4
|
|
|
1
|
|
|
(4)
|
|
|
(4)
|
Net cash provided
by (used in) investing activities
|
|
|
(46)
|
|
|
24
|
|
|
(35)
|
|
|
(11,009)
|
|
|
(15,334)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
long-term borrowings
|
|
|
7,953
|
|
|
4,468
|
|
|
-
|
|
|
27,802
|
|
|
28,793
|
Repayment of
debt
|
|
|
(6,825)
|
|
|
(4,452)
|
|
|
-
|
|
|
(15,814)
|
|
|
(12,000)
|
Other
borrowings, net
|
|
|
(3,028)
|
|
|
1,025
|
|
|
(230)
|
|
|
(1,285)
|
|
|
1,345
|
Payment of
dividends
|
|
|
(1,386)
|
|
|
(1,381)
|
|
|
(1,057)
|
|
|
(4,139)
|
|
|
(3,181)
|
Repurchases of
common stock - repurchase program
|
|
|
-
|
|
|
-
|
|
|
(736)
|
|
|
-
|
|
|
(5,002)
|
Shares
repurchased for tax withholdings on vesting of equity
awards
|
|
|
(192)
|
|
|
(219)
|
|
|
(241)
|
|
|
(580)
|
|
|
(818)
|
Issuance of
common stock
|
|
|
46
|
|
|
91
|
|
|
11
|
|
|
174
|
|
|
194
|
Other
|
|
|
(50)
|
|
|
(6)
|
|
|
3
|
|
|
(60)
|
|
|
(45)
|
Net cash provided
by (used in) financing activities
|
|
|
(3,482)
|
|
|
(474)
|
|
|
(2,250)
|
|
|
6,098
|
|
|
9,286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
|
(350)
|
|
|
2,763
|
|
|
134
|
|
|
3,802
|
|
|
1,170
|
Cash and cash
equivalents at the beginning of period
|
|
|
9,207
|
|
|
6,444
|
|
|
5,328
|
|
|
5,055
|
|
|
4,292
|
Cash and cash
equivalents at end of period
|
|
$
|
8,857
|
|
$
|
9,207
|
|
$
|
5,462
|
|
$
|
8,857
|
|
$
|
5,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
269
|
|
$
|
375
|
|
$
|
368
|
|
$
|
1,025
|
|
$
|
980
|
Cash paid for income
taxes
|
|
$
|
44
|
|
$
|
124
|
|
$
|
98
|
|
$
|
299
|
|
$
|
618
|
View original
content:http://www.prnewswire.com/news-releases/broadcom-inc-announces-third-quarter-fiscal-year-2020-financial-results-and-quarterly-dividends-301124153.html
SOURCE Broadcom Inc.