SAN JOSE, Calif., March 14, 2019 /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 first quarter of fiscal
year 2019, ended February 3, 2019,
and announced a quarterly dividend.
"We had a good start to 2019 as we continued to execute on our
proven business model. Strong results in our networking business
supported our semiconductor solutions segment, despite the
anticipated sharp decline in wireless. Additionally, our
infrastructure software segment performed extremely well as we made
good progress with the CA business integration into Broadcom," said
Hock Tan, President and CEO of Broadcom Inc. "Similar to our peers,
we see a slowdown in China
impacting demand. However, much of this was factored into our
original guidance and we are maintaining our full year fiscal 2019
business outlook."
"We generated over $2 billion in
free cash flow in the quarter, which represented 39% growth on a
year on year basis," said Tom
Krause, CFO of Broadcom Inc. "Consistent with our capital
return plan, we returned $4.6 billion
to stockholders in the quarter including $1.1 billion of cash dividends and $3.5 billion of share repurchases and
eliminations. We remain focused on returning approximately
$12 billion to stockholders in fiscal
2019 via a combination of cash dividends and stock buy backs and
eliminations, while maintaining our investment grade credit
rating."
First Quarter Fiscal Year 2019 GAAP Results from Continuing
Operations
Net revenue was $5,789 million, an
increase of 6.3 percent from $5,444
million in the previous quarter and an increase of 8.7
percent from $5,327 million in the
same quarter last year.
Gross margin was $3,208 million,
or 55.4 percent of net revenue. This compares with gross margin of
$2,935 million, or 53.9 percent of
net revenue, in the prior quarter, and gross margin of $2,628 million, or 49.3 percent of net revenue,
in the same quarter last year.
Operating expenses were $2,653
million. This compares with $1,283
million in the prior quarter and $1,685 million in the same quarter last year.
Operating income was $555 million,
or 9.6 percent of net revenue. This compares with operating income
of $1,652 million, or 30.3 percent of
net revenue, in the prior quarter, and operating income of
$943 million, or 17.7 percent of net
revenue, in the same quarter last year.
Net income, which includes the impact of discontinued
operations, was $471 million, or
$1.12 per diluted share. This
compares with net income of $1,115
million, or $2.64 per diluted
share, in the prior quarter, and net income of $6,566 million, or $14.62 per diluted share, in the same quarter
last year.
Cash from operations was $2,132
million in the quarter, compared to $1,685 million in the same quarter last year.
First Quarter Fiscal
Year 2019 GAAP Results
|
|
|
|
|
|
|
|
Change
|
(Dollars in millions,
except per share data)
|
|
Q1 19
|
|
Q4 18
|
|
Q1 18
|
|
Q/Q
|
|
Y/Y
|
Net
revenue
|
|
$
5,789
|
|
$
5,444
|
|
$
5,327
|
|
+6.3%
|
|
+8.7%
|
Gross
margin
|
|
55.4%
|
|
53.9%
|
|
49.3%
|
|
+150bps
|
|
+610bps
|
Operating
expenses
|
|
$
2,653
|
|
$
1,283
|
|
$
1,685
|
|
+$ 1,370
|
|
+$
968
|
Net income
|
|
$
471
|
|
$
1,115
|
|
$
6,566
|
|
-$
644
|
|
-$ 6,095
|
Net income
attributable to noncontrolling interest
|
|
$
-
|
|
$
-
|
|
$
336
|
|
$
-
|
|
-$
336
|
Net income
attributable to common stock
|
|
$
471
|
|
$
1,115
|
|
$
6,230
|
|
-$
644
|
|
-$ 5,759
|
Earnings per share -
diluted
|
|
$
1.12
|
|
$
2.64
|
|
$
14.62
|
|
-$
1.52
|
|
-$ 13.50
|
|
|
|
|
|
|
|
|
|
|
|
The Company's cash and cash equivalents at the end of the first
fiscal quarter were $5,093 million,
compared to $4,292 million at the end
of the prior quarter.
During the first fiscal quarter the Company generated
$2,132 million in cash from
operations and spent $3,513 million
on share repurchases and eliminations consisting of $3,436 million in repurchases of
13.9 million shares and $77
million on withholding tax payments related to net settled
equity awards that vested in the quarter (representing
approximately 0.3 million shares withheld), as well as
$99 million on capital
expenditures.
On December 28, 2018, the Company
paid a cash dividend of $2.65 per
share of common stock, totaling $1,067
million.
First Quarter Fiscal Year 2019 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.
Gross margin from continuing operations was $4,133 million, or 71.4 percent of net revenue.
This compares with gross margin from continuing operations of
$3,725 million, or 68.4 percent of
net revenue, in the prior quarter, and $3,454 million, or 64.8 percent of net revenue,
in the same quarter last year.
Operating income from continuing operations was $3,052 million, or 52.7 percent of net revenue.
This compares with operating income from continuing operations of
$2,862 million, or 52.5 percent of
net revenue, in the prior quarter, and $2,571 million, or 48.2 percent of net revenue,
in the same quarter last year.
Net income from continuing operations was $2,446 million, or $5.55 per diluted share. This compares with net
income of $2,546 million, or
$5.85 per diluted share, in the prior
quarter, and net income of $2,345
million, or $5.12 per diluted
share, in the same quarter last year.
Free cash flow from operations, defined as cash from operations
less capital expenditures, was $2,033
million in the quarter, compared to $1,465 million in the same quarter last year.
First Quarter Fiscal
Year 2019 Non-GAAP Results
|
|
|
|
|
|
|
|
Change
|
(Dollars in millions,
except per share data)
|
|
Q1 19
|
|
Q4 18
|
|
Q1 18
|
|
Q/Q
|
|
Y/Y
|
Gross
margin
|
|
71.4%
|
|
68.4%
|
|
64.8%
|
|
+300bps
|
|
+660bps
|
Operating
expenses
|
|
$
1,081
|
|
$
863
|
|
$
883
|
|
+$
218
|
|
+$
198
|
Net income
|
|
$
2,446
|
|
$
2,546
|
|
$
2,345
|
|
-$
100
|
|
+$
101
|
Earnings per share -
diluted
|
|
$
5.55
|
|
$
5.85
|
|
$
5.12
|
|
-$
0.30
|
|
+$
0.43
|
Other Quarterly Data
Net revenue by
segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
(Dollars in
millions)
|
|
Q1 19
|
|
Q4 18
|
|
Q1 18
|
|
Q/Q
|
|
Y/Y
|
Semiconductor
solutions
|
|
$ 4,374
|
|
76%
|
|
$
4,874
|
|
90%
|
|
$
4,955
|
|
93%
|
|
-10%
|
|
-12%
|
Infrastructure
software
|
|
1,403
|
|
24
|
|
513
|
|
9
|
|
328
|
|
6
|
|
173%
|
|
328%
|
Intellectual property
licensing
|
|
12
|
|
-
|
|
57
|
|
1
|
|
44
|
|
1
|
|
-79%
|
|
-73%
|
Total net
revenue
|
|
$ 5,789
|
|
100%
|
|
$
5,444
|
|
100%
|
|
$
5,327
|
|
100%
|
|
|
|
|
Fiscal Year 2019 Business Outlook
Based on current business trends and conditions, the outlook for
continuing operations for fiscal year 2019, ending November 3, 2019, including contributions from
CA, is expected to be as follows:
|
|
GAAP
|
|
Reconciling
Items
|
|
Non-GAAP
|
Net
revenue
|
|
$24,500M
|
|
-
|
|
$24,500M
|
Operating
margin
|
|
17.6%
|
|
$8,180M
|
|
51.0%
|
Net interest expense
and other
|
|
$1,250M
|
|
-
|
|
$1,250M
|
Provision for income
taxes
|
|
3%
|
|
8%
|
|
11%
|
- Non-GAAP operating margin excludes an expected $5,210
million of amortization of acquisition-related intangible assets,
$2.0 billion of stock-based
compensation expense, $750 million of
restructuring charges, and $220
million of acquisition-related costs; and
- Non-GAAP tax provision is 8% higher than GAAP due to the tax
effects of the projected reconciling items noted above.
Capital expenditures for the fiscal year are expected to be
approximately $550 million. For the
fiscal year, depreciation is expected to be $600 million and total intangible amortization is
expected to be approximately $5,235
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 excludes the impact of any
mergers, acquisitions, divestiture and stock repurchase activity
that may occur during fiscal year 2019. 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.
Quarterly Dividend
The Company's Board of Directors has approved a quarterly cash
dividend of $2.65 per share.
The dividend is payable on March 29,
2019 to stockholders of record at the close of business
(5:00 p.m.) Eastern Time on
March 21, 2019.
Financial Results Conference Call
Broadcom Inc. will host a conference call to review its
financial results for the first quarter of fiscal year 2019, ended
February 3, 2019, and discuss
guidance for fiscal year 2019, 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 5732459. 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:
5732459. 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
Broadcom Inc. is the successor to Broadcom Limited for financial
reporting purposes effective as of the close of trading on
April 4, 2018. Information provided
for fiscal periods beginning with the fiscal quarter ended
May 6, 2018, relates to Broadcom Inc.
and for prior fiscal periods relates to Broadcom Limited. Unless
the context otherwise requires, references in this press release to
"Broadcom," "the Company," "we," "our," "us" and similar terms are
to Broadcom Inc. from and after the effective time of the
redomiciliation and, prior to that time, are to our predecessor,
Broadcom Limited. The Company's financial results include
contributions from CA, Inc.'s continuing operations starting in the
first fiscal quarter of 2019. 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 below, unless otherwise stated.
Due to the Company's 52/53 week reporting cycle, fiscal year
2018 included an extra week in the first quarter, compared to
fiscal year 2019.
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 includes the effect, where
applicable, of purchase accounting on revenue, and 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,
impairment on investment, debt-related costs, gain (loss) on
extinguishment of debt, unrealized gains on investments, 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 and mainframe software focused
on automation, monitoring and security, smartphone components,
telecoms and factory automation.
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: our acquisition of CA,
including (1) potential difficulties in employee retention, (2)
unexpected costs, charges or expenses, and (3) our ability to
successfully integrate CA's business and achieve the anticipated
benefits of the transaction; 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; any other acquisitions we may make, including
integrating acquired companies with our existing businesses and our
ability to achieve the benefits, growth prospects and synergies
expected by such acquisitions; our ability to accurately estimate
customers' demand and adjust our manufacturing and supply chain
accordingly; our significant indebtedness and the need to generate
sufficient cash flows to service and repay such debt; our
dependency on a limited number of suppliers; dependence on and
risks associated with distributors of our products; dependence on
senior management and our ability to attract and retain qualified
personnel; global economic conditions and concerns; quarterly and
annual fluctuations in operating results; the amount and frequency
of our stock repurchases; 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 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; 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; 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.
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
BROADCOM
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
|
(IN MILLIONS,
EXCEPT PER SHARE DATA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
Quarter Ended
|
|
|
|
February
3,
|
|
November
4,
|
|
February
4,
|
|
|
|
2019
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
$
5,789
|
|
$
5,444
|
|
$
5,327
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
1,692
|
|
1,746
|
|
1,899
|
|
Purchase
accounting effect on inventory
|
|
-
|
|
-
|
|
70
|
|
Amortization
of acquisition-related intangible assets
|
|
833
|
|
762
|
|
715
|
|
Restructuring
charges
|
|
56
|
|
1
|
|
15
|
|
|
|
|
|
|
|
|
|
Total
cost of revenue
|
|
2,581
|
|
2,509
|
|
2,699
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
3,208
|
|
2,935
|
|
2,628
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
1,133
|
|
948
|
|
925
|
|
Selling, general and
administrative
|
|
471
|
|
237
|
|
291
|
|
Amortization of
acquisition-related intangible assets
|
|
476
|
|
67
|
|
339
|
|
Restructuring,
impairment and disposal charges
|
|
573
|
|
17
|
|
130
|
|
Litigation
settlements
|
|
-
|
|
14
|
|
-
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
2,653
|
|
1,283
|
|
1,685
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
555
|
|
1,652
|
|
943
|
|
Interest
expense
|
|
(345)
|
|
(148)
|
|
(183)
|
|
Impairment on
investment
|
|
-
|
|
(106)
|
|
-
|
|
Other income,
net
|
|
68
|
|
24
|
|
35
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
|
278
|
|
1,422
|
|
795
|
|
Provision for
(benefit from) income taxes
|
|
(203)
|
|
307
|
|
(5,786)
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
481
|
|
1,115
|
|
6,581
|
|
Loss from
discontinued operations, net of income taxes
|
|
(10)
|
|
-
|
|
(15)
|
|
|
|
|
|
|
|
|
|
Net income
|
|
471
|
|
1,115
|
|
6,566
|
|
Net income
attributable to noncontrolling interest (1)
|
|
-
|
|
-
|
|
336
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stock
|
|
$
471
|
|
$
1,115
|
|
$
6,230
|
|
|
|
|
|
|
|
|
|
Basic income per
share:
|
|
|
|
|
|
|
|
Income per
share from continuing operations
|
|
$
1.20
|
|
$
2.71
|
|
$
15.23
|
|
Income (loss)
per share from discontinued operations
|
|
(0.03)
|
|
-
|
|
(0.03)
|
|
Net income per
share
|
|
$
1.17
|
|
$
2.71
|
|
$
15.20
|
|
|
|
|
|
|
|
|
|
Diluted income per
share(2):
|
|
|
|
|
|
|
|
Income per
share from continuing operations
|
|
$
1.15
|
|
$
2.64
|
|
$
14.66
|
|
Income (loss)
per share from discontinued operations
|
|
(0.03)
|
|
-
|
|
(0.04)
|
|
Net income per
share
|
|
$
1.12
|
|
$
2.64
|
|
$
14.62
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
Basic
|
|
401
|
|
412
|
|
410
|
|
Diluted
|
|
419
|
|
423
|
|
426
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense included in continuing operations:
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
34
|
|
$
23
|
|
$
20
|
|
Research and
development
|
|
311
|
|
225
|
|
203
|
|
Selling,
general and administrative
|
|
120
|
|
69
|
|
76
|
|
Total
stock-based compensation expense
|
|
$
465
|
|
$
317
|
|
$
299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In connection
with the redomiciliation to the United States on April 4, 2018, or
the Redomiciliation, all outstanding exchangeable limited
partnership units, or LP Units, in Broadcom Cayman L.P. were
exchanged for common stock of Broadcom on a one-for-one basis and
the noncontrolling interest, or NCI, was eliminated. Net income
attributable to NCI prior to the Redomiciliation represents
approximately 5% of net income attributable to LP Units.
|
|
(2) For the fiscal
quarter ended February 4, 2018, diluted income per share excluded
the potentially dilutive effect of the exchange of LP Units as
their effect was antidilutive. There were no LP Units outstanding
during the fiscal quarters ended February 3, 2019 or November 4,
2018 due to the Redomiciliation.
|
BROADCOM
INC.
|
FINANCIAL
RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED
|
(IN
MILLIONS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
Quarter Ended
|
|
|
|
February
3,
|
|
November
4,
|
|
February
4,
|
|
|
|
2019
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue on GAAP
basis
|
|
$
5,789
|
|
$
5,444
|
|
$
5,327
|
|
Acquisition-related purchase accounting revenue adjustment
(1)
|
|
-
|
|
4
|
|
4
|
|
|
|
|
|
|
|
|
|
Net revenue on
non-GAAP basis
|
|
$
5,789
|
|
$
5,448
|
|
$
5,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin on GAAP
basis
|
|
$
3,208
|
|
$
2,935
|
|
$
2,628
|
|
Acquisition-related purchase accounting revenue adjustment
(1)
|
|
-
|
|
4
|
|
4
|
|
Purchase
accounting effect on inventory
|
|
-
|
|
-
|
|
70
|
|
Amortization
of acquisition-related intangible assets
|
|
833
|
|
762
|
|
715
|
|
Stock-based
compensation expense
|
|
34
|
|
23
|
|
20
|
|
Restructuring
charges
|
|
56
|
|
1
|
|
15
|
|
Acquisition-related costs
|
|
2
|
|
-
|
|
2
|
|
|
|
|
|
|
|
|
|
Gross margin on
non-GAAP basis
|
|
$
4,133
|
|
$
3,725
|
|
$
3,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development on GAAP basis
|
|
$
1,133
|
|
$
948
|
|
$
925
|
|
Stock-based
compensation expense
|
|
311
|
|
225
|
|
203
|
|
Acquisition-related costs
|
|
2
|
|
1
|
|
3
|
|
|
|
|
|
|
|
|
|
Research and
development on non-GAAP basis
|
|
$
820
|
|
$
722
|
|
$
719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense on GAAP basis
|
|
$
471
|
|
$
237
|
|
$
291
|
|
Stock-based
compensation expense
|
|
120
|
|
69
|
|
76
|
|
Acquisition-related costs
|
|
90
|
|
27
|
|
51
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense on non-GAAP basis
|
|
$
261
|
|
$
141
|
|
$
164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses on GAAP basis
|
|
$
2,653
|
|
$
1,283
|
|
$
1,685
|
|
Amortization
of acquisition-related intangible assets
|
|
476
|
|
67
|
|
339
|
|
Stock-based
compensation expense
|
|
431
|
|
294
|
|
279
|
|
Restructuring,
impairment and disposal charges
|
|
573
|
|
17
|
|
130
|
|
Litigation
settlements
|
|
-
|
|
14
|
|
-
|
|
Acquisition-related costs
|
|
92
|
|
28
|
|
54
|
|
|
|
|
|
|
|
|
|
Total operating
expenses on non-GAAP basis
|
|
$
1,081
|
|
$
863
|
|
$
883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income on
GAAP basis
|
|
$
555
|
|
$
1,652
|
|
$
943
|
|
Acquisition-related purchase accounting revenue adjustment
(1)
|
|
-
|
|
4
|
|
4
|
|
Purchase
accounting effect on inventory
|
|
-
|
|
-
|
|
70
|
|
Amortization
of acquisition-related intangible assets
|
|
1,309
|
|
829
|
|
1,054
|
|
Stock-based
compensation expense
|
|
465
|
|
317
|
|
299
|
|
Restructuring,
impairment and disposal charges
|
|
629
|
|
18
|
|
145
|
|
Litigation
settlements
|
|
-
|
|
14
|
|
-
|
|
Acquisition-related costs
|
|
94
|
|
28
|
|
56
|
|
|
|
|
|
|
|
|
|
Operating income on
non-GAAP basis
|
|
$
3,052
|
|
$
2,862
|
|
$
2,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on
GAAP basis
|
|
$
(345)
|
|
$
(148)
|
|
$
(183)
|
|
Debt-related
costs
|
|
-
|
|
-
|
|
32
|
|
|
|
|
|
|
|
|
|
Interest expense on
non-GAAP basis
|
|
$
(345)
|
|
$
(148)
|
|
$
(151)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net on
GAAP basis
|
|
$
68
|
|
$
24
|
|
$
35
|
|
Unrealized
gains on investments
|
|
(27)
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Other income, net on
non-GAAP basis
|
|
$
41
|
|
$
24
|
|
$
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes on GAAP basis
|
|
$
278
|
|
$
1,422
|
|
$
795
|
|
Acquisition-related purchase accounting revenue adjustment
(1)
|
|
-
|
|
4
|
|
4
|
|
Purchase
accounting effect on inventory
|
|
-
|
|
-
|
|
70
|
|
Amortization
of acquisition-related intangible assets
|
|
1,309
|
|
829
|
|
1,054
|
|
Stock-based
compensation expense
|
|
465
|
|
317
|
|
299
|
|
Restructuring, impairment and disposal charges
|
|
629
|
|
18
|
|
145
|
|
Litigation
settlements
|
|
-
|
|
14
|
|
-
|
|
Acquisition-related costs
|
|
94
|
|
28
|
|
56
|
|
Impairment on
investment
|
|
-
|
|
106
|
|
-
|
|
Debt-related
costs
|
|
-
|
|
-
|
|
32
|
|
Unrealized
gains on investments
|
|
(27)
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Income before income
taxes on non-GAAP basis
|
|
$
2,748
|
|
$
2,738
|
|
$
2,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
(benefit from) income taxes on GAAP basis
|
|
$
(203)
|
|
$
307
|
|
$
(5,786)
|
|
Non-GAAP tax
reconciling adjustments
|
|
505
|
|
(115)
|
|
5,896
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes on non-GAAP basis
|
|
$
302
|
|
$
192
|
|
$
110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income on GAAP
basis
|
|
$
471
|
|
$
1,115
|
|
$
6,566
|
|
Acquisition-related purchase accounting revenue adjustment
(1)
|
|
-
|
|
4
|
|
4
|
|
Purchase
accounting effect on inventory
|
|
-
|
|
-
|
|
70
|
|
Amortization
of acquisition-related intangible assets
|
|
1,309
|
|
829
|
|
1,054
|
|
Stock-based
compensation expense
|
|
465
|
|
317
|
|
299
|
|
Restructuring,
impairment and disposal charges
|
|
629
|
|
18
|
|
145
|
|
Litigation
settlements
|
|
-
|
|
14
|
|
-
|
|
Acquisition-related costs
|
|
94
|
|
28
|
|
56
|
|
Impairment on
investment
|
|
-
|
|
106
|
|
-
|
|
Debt-related
costs
|
|
-
|
|
-
|
|
32
|
|
Unrealized
gains on investments
|
|
(27)
|
|
-
|
|
-
|
|
Non-GAAP tax
reconciling adjustments
|
|
(505)
|
|
115
|
|
(5,896)
|
|
Discontinued
operations, net of income taxes
|
|
10
|
|
-
|
|
15
|
|
|
|
|
|
|
|
|
|
Net income on
non-GAAP basis
|
|
$
2,446
|
|
$
2,546
|
|
$
2,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculation - diluted on GAAP basis
|
|
419
|
|
423
|
|
426
|
|
Non-GAAP
adjustment (2)
|
|
22
|
|
12
|
|
32
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculation - diluted on non-GAAP basis
|
|
441
|
|
435
|
|
458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income on
non-GAAP basis
|
|
$
2,446
|
|
$
2,546
|
|
$
2,345
|
|
Interest
expense on non-GAAP basis
|
|
345
|
|
148
|
|
151
|
|
Provision for
income taxes on non-GAAP basis
|
|
302
|
|
192
|
|
110
|
|
Depreciation
|
|
143
|
|
132
|
|
126
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
3,236
|
|
$
3,018
|
|
$
2,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
2,132
|
|
$
2,635
|
|
$
1,685
|
|
Purchases of
property, plant and equipment
|
|
(99)
|
|
(106)
|
|
(220)
|
|
|
|
|
|
|
|
|
|
Free cash
flow
|
|
$
2,033
|
|
$
2,529
|
|
$
1,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
Quarter Ending
|
|
|
|
|
|
|
|
May
5,
|
|
|
|
|
|
Expected fully
diluted share count:
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
per share calculation - diluted on GAAP basis
|
|
422
|
|
|
|
|
|
Non-GAAP adjustment (2)
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
per share calculation - diluted on non-GAAP basis
|
|
450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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. Non-GAAP adjustment also includes the impact of LP
Units that are anti-dilutive on a GAAP basis for the fiscal quarter
ended February 4, 2018.
|
BROADCOM
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS - UNAUDITED
|
(IN
MILLIONS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February
3,
|
|
November
4,
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
5,093
|
|
$
4,292
|
|
Trade accounts
receivable, net
|
|
3,677
|
|
3,325
|
|
Inventory
|
|
1,074
|
|
1,124
|
|
Other current
assets
|
|
760
|
|
366
|
|
|
|
|
|
|
|
Total
current assets
|
|
10,604
|
|
9,107
|
|
|
|
|
|
|
|
Long-term
assets:
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
2,684
|
|
2,635
|
|
Goodwill
|
|
36,647
|
|
26,913
|
|
Intangible
assets, net
|
|
21,493
|
|
10,762
|
|
Other
long-term assets
|
|
682
|
|
707
|
|
|
|
|
|
|
|
Total
assets
|
|
$
72,110
|
|
$
50,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
738
|
|
$
811
|
|
Employee
compensation and benefits
|
|
463
|
|
715
|
|
Current
portion of long-term debt
|
|
3,537
|
|
-
|
|
Other current
liabilities
|
|
3,611
|
|
812
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
8,349
|
|
2,338
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Long-term
debt
|
|
34,104
|
|
17,493
|
|
Other
long-term liabilities
|
|
6,433
|
|
3,636
|
|
|
|
|
|
|
|
Total
liabilities
|
|
48,886
|
|
23,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Common stock
and additional paid-in capital
|
|
23,081
|
|
23,285
|
|
Retained
earnings
|
|
259
|
|
3,487
|
|
Accumulated
other comprehensive loss
|
|
(116)
|
|
(115)
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
23,224
|
|
26,657
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
72,110
|
|
$
50,124
|
|
BROADCOM
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
|
(IN
MILLIONS)
|
|
|
|
|
|
|
|
|
|
|
Fiscal
Quarter Ended
|
|
|
|
February
3,
|
|
November
4,
|
|
February
4,
|
|
|
|
2019
|
|
2018
|
|
2018
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
471
|
|
$
1,115
|
|
$
6,566
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Amortization
of intangible assets
|
|
1,316
|
|
836
|
|
1,058
|
|
Depreciation
|
|
143
|
|
132
|
|
126
|
|
Stock-based
compensation
|
|
465
|
|
317
|
|
299
|
|
Deferred taxes
and other non-cash taxes
|
|
(379)
|
|
242
|
|
(5,832)
|
|
Impairment on
investment
|
|
-
|
|
106
|
|
-
|
|
Non-cash
restructuring, impairment and disposal charges
|
|
92
|
|
8
|
|
5
|
|
Non-cash
interest expense
|
|
13
|
|
6
|
|
6
|
|
Other
|
|
(21)
|
|
15
|
|
3
|
|
Changes in
assets and liabilities, net of acquisitions and
disposals:
|
|
|
|
|
|
|
|
Trade accounts receivable, net
|
|
68
|
|
(312)
|
|
199
|
|
Inventory
|
|
50
|
|
92
|
|
250
|
|
Accounts payable
|
|
(169)
|
|
28
|
|
(403)
|
|
Employee compensation and benefits
|
|
(458)
|
|
93
|
|
(376)
|
|
Contributions to defined benefit pension plans
|
|
-
|
|
-
|
|
(129)
|
|
Other current assets and current liabilities
|
|
506
|
|
163
|
|
284
|
|
Other
long-term assets and long-term liabilities
|
|
35
|
|
(206)
|
|
(371)
|
|
|
|
|
|
|
|
|
|
Net cash provided
by operating activities
|
|
2,132
|
|
2,635
|
|
1,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Acquisitions
of businesses, net of cash acquired
|
|
(16,027)
|
|
(7)
|
|
(4,786)
|
|
Business sale
proceeds (repayments)
|
|
957
|
|
(9)
|
|
782
|
|
Purchases of
property, plant and equipment
|
|
(99)
|
|
(106)
|
|
(220)
|
|
Proceeds from
disposals of property, plant and equipment
|
|
-
|
|
1
|
|
237
|
|
Purchases of
investments
|
|
-
|
|
-
|
|
(244)
|
|
Other
|
|
(24)
|
|
3
|
|
4
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(15,193)
|
|
(118)
|
|
(4,227)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
long-term borrowings
|
|
17,896
|
|
-
|
|
-
|
|
Repayment of
debt
|
|
-
|
|
(117)
|
|
(856)
|
|
Payment of
debt issuance costs
|
|
(46)
|
|
-
|
|
-
|
|
Other
borrowings
|
|
531
|
|
-
|
|
-
|
|
Dividend and
distribution payments
|
|
(1,067)
|
|
(723)
|
|
(755)
|
|
Repurchases of
common stock - repurchase program
|
|
(3,436)
|
|
(1,533)
|
|
-
|
|
Shares
repurchased for tax witholdings on vesting of equity
awards
|
|
(77)
|
|
(21)
|
|
-
|
|
Issuance of
common stock
|
|
62
|
|
59
|
|
34
|
|
Other
|
|
(1)
|
|
(26)
|
|
(9)
|
|
|
|
|
|
|
|
|
|
Net cash provided
by (used in) financing activities
|
|
13,862
|
|
(2,361)
|
|
(1,586)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
801
|
|
156
|
|
(4,128)
|
|
Cash and cash
equivalents at the beginning of period
|
|
4,292
|
|
4,136
|
|
11,204
|
|
Cash and cash
equivalents at end of period
|
|
$
5,093
|
|
$
4,292
|
|
$
7,076
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
423
|
|
$
2
|
|
$
232
|
|
Cash paid for income
taxes
|
|
$
95
|
|
$
189
|
|
$
109
|
|
View original
content:http://www.prnewswire.com/news-releases/broadcom-inc-announces-first-quarter-fiscal-year-2019-financial-results-and-quarterly-dividend-300812752.html
SOURCE Broadcom Inc.