Broadcom Inc. Announces Fourth Quarter and Fiscal Year 2018 Financial Results and Quarterly Dividend

 

 

Broadcom Inc. Announces Fourth Quarter and Fiscal Year 2018 Financial Results and Quarterly Dividend
Broadcom Inc. Announces Fourth Quarter and Fiscal Year 2018 Financial Results and Quarterly Dividend

SAN JOSE, Calif., Dec. 6, 2018 /PRNewswire/ -- Broadcom Inc. (Nasdaq: AVGO), a global technology leader that designs, develops and supplies semiconductor and infrastructure software solutions, today reported financial results for the fourth fiscal quarter and fiscal year ended November 4, 2018, and provided guidance for its fiscal year 2019. The Company completed its acquisition of CA Technologies on November 5, 2018. The financial results provided below do not include any contribution from CA Technologies.

"Strong operating performance in the fiscal fourth quarter caps a year of solid results that continues to reinforce the sustainability of our business model. Revenues grew 18% to nearly $21 billion on the back of strong demand for our networking, enterprise storage, wireless and industrial products while operating margin continued to progressively expand to 50%," said Hock Tan, President and CEO of Broadcom Inc. "Looking forward to fiscal year 2019, we expect another year of double digit revenue growth. Sustained demand within our semiconductor segment will be augmented by the newly acquired mainframe and enterprise software businesses to our infrastructure software segment. We also expect operating margin to hit another record in fiscal year 2019 driven by improved operating leverage."

"Free cash flow from operations grew 50% in fiscal year 2018 to $8.2 billion. As a result, we are raising our target dividend by 51 percent to $2.65 per share per quarter for fiscal year 2019," said Tom Krause, CFO of Broadcom Inc. "Looking ahead for the year, we expect sustained revenue growth and improving operating leverage to accelerate cash generation from operations. Our capital allocation strategy remains unchanged for fiscal year 2019. We plan to return 50% of our prior fiscal year free cash flows to stockholders in the form of dividends and use the balance of our free cash flows to buy back stock and support additional acquisitions, while remaining focused on maintaining our investment grade credit rating." 

Fourth Quarter Fiscal Year 2018 GAAP Results from Continuing Operations

Net revenue was $5,444 million, an increase of 8 percent from $5,063 million in the previous quarter and an increase of 12 percent from $4,844 million in the same quarter last year.

Gross margin was $2,935 million, or 53.9 percent of net revenue. This compares with gross margin of $2,619 million, or 51.7 percent of net revenue, in the prior quarter, and gross margin of $2,383 million, or 49.2 percent of net revenue, in the same quarter last year.

Operating expenses were $1,283 million. This compares with $1,280 million in the prior quarter and $1,628 million in the same quarter last year.

Operating income was $1,652 million, or 30.3 percent of net revenue. This compares with operating income of $1,339 million, or 26.4 percent of net revenue, in the prior quarter, and operating income of $755 million, or 15.6 percent of net revenue, in the same quarter last year.

Net income, which includes the impact of discontinued operations, was $1,115 million, or $2.64 per diluted share. This compares with net income of $1,196 million, or $2.71 per diluted share, in the prior quarter, and net income of $561 million, or $1.25 per diluted share, in the same quarter last year.

 

Fourth Quarter Fiscal Year 2018 GAAP Results








Change

(Dollars in millions, except per share data)                      


Q4 18


Q3 18


Q4 17


Q/Q


Y/Y

Net revenue


$    5,444


$    5,063


$    4,844


+8%


+12%

Gross margin


53.9%


51.7%


49.2%


+220bps


+470bps

Operating expenses


$    1,283


$    1,280


$    1,628


+$      3


-$      345

Net income


$    1,115


$    1,196


$       561


-$    81


+$      554

Net income attributable to noncontrolling interest


$            -


$            -


$         29


$       -


-$        29

Net income attributable to common stock


$    1,115


$    1,196


$       532


-$    81


+$      583

Earnings per share - diluted


$      2.64


$      2.71


$      1.25


-$ 0.07


+$     1.39

The Company's cash and cash equivalents at the end of the fourth fiscal quarter were $4,292 million, compared to $4,136 million at the end of the prior quarter.

During the fourth fiscal quarter, the Company generated $2,635 million in cash from operations and spent $1,533 million repurchasing an aggregate of 6.4 million shares and $106 million in capital expenditures.

On September 28, 2018, the Company paid a cash dividend of $1.75 per share of common stock, totaling $723 million.

Fourth Quarter Fiscal Year 2018 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 $5,448 million, an increase of 8 percent from $5,066 million in the previous quarter, and an increase of 12 percent from $4,848 million in the same quarter last year.

Gross margin from continuing operations was $3,725 million, or 68.4 percent of net revenue. This compares with gross margin from continuing operations of $3,410 million, or 67.3 percent of net revenue, in the prior quarter, and $3,068 million, or 63.3 percent of net revenue, in the same quarter last year.

Operating income from continuing operations was $2,862 million, or 52.5 percent of net revenue. This compares with operating income from continuing operations of $2,536 million, or 50.1 percent of net revenue, in the prior quarter, and $2,293 million, or 47.3 percent of net revenue, in the same quarter last year.

Net income from continuing operations was $2,546 million, or $5.85 per diluted share. This compares with net income of $2,257 million, or $4.98 per diluted share, in the prior quarter, and net income of $2,091 million, or $4.59 per diluted share, in the same quarter last year.

Free cash flow from operations, defined as cash from operations less capital expenditures, was $2,529 million in the quarter, compared to $1,726 million in the same quarter last year.

 

Fourth Quarter Fiscal Year 2018 Non-GAAP Results








Change

(Dollars in millions, except per share data)                      


Q4 18


Q3 18


Q4 17


Q/Q


Y/Y

Net revenue


$    5,448


$    5,066


$    4,848


+8%


+12%

Gross margin


68.4%


67.3%


63.3%


+110bps


+510bps

Operating expenses


$       863


$       874


$       775


-$      11


+$      88

Net income


$    2,546


$    2,257


$    2,091


+$    289


+$    455

Earnings per share - diluted


$      5.85


$      4.98


$      4.59


+$   0.87


+$   1.26

 

Other Quarterly Data




































Net revenue by segment:

















Change

(Dollars in millions)     


Q4 18


Q3 18


Q4 17


Q/Q


Y/Y

   Wired infrastructure


$  2,208


41%



$  2,297


45%



$  2,146


45%



-4%


3%

   Wireless  
   communications


1,698


31



1,288


25



1,796


37



32%


-5%

   Enterprise storage


1,266


23



1,253


25



645


13



1%


96%

   Industrial & other


272


5



225


5



257


5



21%


6%

   Total net revenue


$  5,444


100%



$  5,063


100%



$  4,844


100%














































Non-GAAP net revenue by segment:

















Change

(Dollars in millions)     


Q4 18


Q3 18


Q4 17


Q/Q


Y/Y

   Wired infrastructure(1)


$  2,212


41%



$  2,300


45%



$  2,150


45%



-4%


3%

   Wireless 
   communications


1,698


31



1,288


25



1,796


37



32%


-5%

   Enterprise storage


1,266


23



1,253


25



645


13



1%


96%

   Industrial & other 


272


5



225


5



257


5



21%


6%

   Total non-GAAP
   net revenue


$  5,448


100%



$  5,066


100%



$  4,848


100%


























(1) Non-GAAP data include the effect of acquisition-related purchase accounting adjustments relating to licensing revenue.



 

Key Statistics                         







(Dollars in millions)             


Q4 18


Q3 18


Q4 17

   Cash from operations


$    2,635


$    2,247


$    1,959

   Depreciation


$       132


$       129


$       117

   Amortization of acquisition-related intangible assets


$       829


$       830


$    1,099

   Capital expenditures


$       106


$       120


$       233

   Days sales outstanding ("DSO")


56


54


46

   Inventory days on hand ("DOH")


59


66


73

   Non-GAAP DSO


56


54


46

   Non-GAAP Inventory DOH


59


67


74

 

Fiscal Year 2018 Financial Results From Continuing Operations

Net revenue from continuing operations was $20,848 million, an increase of 18 percent from $17,636 million in the prior year. Gross margin was $10,733 million, or 51.5 percent of net revenue, versus $8,509 million, or 48.2 percent of net revenue, in the prior year. Operating income was $5,135 million compared with $2,383 million in the prior year. Net income, which includes the impact from discontinued operations, was $12,610 million, or $28.44 per diluted share. This compares with a net income of $1,784 million, or $4.02 per diluted share, in fiscal year 2017.

Fiscal Year 2018 GAAP Results







(Dollars in millions, except per share data)                      


2018


2017


Change

Net revenue


$  20,848


$  17,636


+18%

Gross margin


51.5%


48.2%


+330bps

Operating expenses


$    5,598


$    6,126


-$        528

Net income


$  12,610


$    1,784


+$   10,826

Net income attributable to noncontrolling interest


$       351


$         92


+$        259

Net income attributable to common stock


$  12,259


$    1,692


+$   10,567

Earnings per share - diluted


$    28.44


$      4.02


+$     24.42

Non-GAAP net revenue from continuing operations was $20,862 million, an increase of 18 percent from $17,665 million in the prior year. Non-GAAP gross margin was $13,931 million, or 66.8 percent of net revenue, versus $11,137 million, or 63.0 percent of net revenue, in the prior year. Non-GAAP operating income from continuing operations was $10,424 million. This compares with $8,011 million in the prior year. Non-GAAP net income was $9,391 million, or $20.82 per diluted share. This compares with non-GAAP net income of $7,255 million, or $16.02 per diluted share, in fiscal year 2017.

 

Fiscal Year 2018 Non-GAAP Results







(Dollars in millions, except per share data)                      


2018


2017


Change

Net revenue


$  20,862


$  17,665


+18%

Gross margin


66.8%


63.0%


+380bps

Operating expenses


$    3,507


$    3,126


+$     381

Net income


$    9,391


$    7,255


+$  2,136

Earnings per share - diluted


$    20.82


$    16.02


+$    4.81

 

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


20%


 $ 7,580M 


51%


Net interest expense and other


 $     1,250M 


-


 $     1,250M 


Provision for income taxes


13%


2%


11%

 

  • Non-GAAP operating margin excludes $4,700 million of amortization of acquisition-related intangible assets, $2,100 million of stock-based compensation expense, $570 million of restructuring charges, and $210 million of acquisition-related costs; and
  • Non-GAAP tax provision is 2% lower 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 amortization is expected to be approximately $4,700 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 December 28, 2018 to stockholders of record at the close of business (5:00 p.m.) Eastern Time on December 19, 2018.

Financial Results Conference Call

Broadcom Inc. will host a conference call to review its financial results for the fourth quarter of fiscal year 2018, ended November 4, 2018, and to provide 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 8281408. 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: 8281408. 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 Brocade Communication Systems' continuing operations starting in the first fiscal quarter of 2018. 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 2017.

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, gain (loss) on acquisition-related assets, 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, software, broadband, wireless, storage and industrial.

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; our dependency on a limited number of suppliers; 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, including the additional indebtedness that we incurred in connection with the CA acquisition and the need to generate sufficient cash flows to service and repay such debt; 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; 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; fluctuations in foreign exchange rates; our 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:
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 


 Fiscal Year Ended 



November 4, 


August 5,


October 29,


November 4, 


October 29,



2018


2018


2017


2018


2017












Net revenue


$              5,444


$              5,063


$              4,844


$               20,848


$           17,636

Cost of products sold:











Cost of products sold


1,746


1,680


1,798


7,021


6,593

Purchase accounting effect on inventory


-


-


2


70


4

Amortization of acquisition-related intangible assets


762


762


658


3,004


2,511

Restructuring charges


1


2


3


20


19












Total cost of products sold


2,509


2,444


2,461


10,115


9,127












Gross margin


2,935


2,619


2,383


10,733


8,509












Research and development


948


959


828


3,768


3,292

Selling, general and administrative


237


234


194


1,056


787

Amortization of acquisition-related intangible assets


67


68


441


541


1,764

Restructuring, impairment and disposal charges


17


19


55


219


161

Litigation settlements


14


-


110


14


122












Total operating expenses


1,283


1,280


1,628


5,598


6,126












Operating income


1,652


1,339


755


5,135


2,383

Interest expense


(148)


(149)


(119)


(628)


(454)

Impairment on investment


(106)


-


-


(106)


-

Loss on debt extinguishment


-


-


(7)


-


(166)

Other income, net


24


39


16


144


62












Income from continuing operations before income taxes


1,422


1,229


645


4,545


1,825

Provision for (benefit from) income taxes


307


32


89


(8,084)


35












Income from continuing operations


1,115


1,197


556


12,629


1,790

Income (loss) from discontinued operations, net of income taxes


-


(1)


5


(19)


(6)












Net income


1,115


1,196


561


12,610


1,784

Net income attributable to noncontrolling interest (1)


-


-


29


351


92












Net income attributable to common stock


$              1,115


$              1,196


$                 532


$               12,259


$             1,692























Basic income per share:











Income per share from continuing operations


$                2.71


$                2.78


$                1.29


$                 29.37


$               4.19

Income (loss) per share from discontinued operations


-


-


0.01


(0.04)


(0.01)

Net income per share


$                2.71


$                2.78


$                1.30


$                 29.33


$               4.18












Diluted income per share (2):











Income per share from continuing operations


$                2.64


$                2.71


$                1.24


$                 28.48


$               4.03

Income (loss) per share from discontinued operations


-


-


0.01


(0.04)


(0.01)

Net income per share


$                2.64


$                2.71


$                1.25


$                 28.44


$               4.02












Shares used in per share calculations:











Basic


412


430


408


418


405

Diluted


423


441


424


431


421












Stock-based compensation expense included in continuing operations:











Cost of products sold


$                   23


$                   22


$                   17


$                      86


$                  64

Research and development


225


222


171


855


636

Selling, general and administrative


69


71


64


286


220












Total stock-based compensation expense


$                 317


$                 315


$                 252


$                 1,227


$                920


































(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 year ended November 4, 2018 and for each fiscal year 2017 period presented, 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 November 4, 2018 and August 5, 2018 due to the Redomiciliation.

 

BROADCOM INC.

FINANCIAL RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED

(IN MILLIONS, EXCEPT DAYS)

























 Fiscal Quarter Ended 


 Fiscal Year Ended 



November 4, 


August 5,


October 29,


November 4, 


October 29,



2018


2018


2017


2018


2017























Net revenue on GAAP basis


$              5,444


$              5,063


$              4,844


$           20,848


$           17,636

Acquisition-related purchase accounting revenue adjustment (1)


4


3


4


14


29












Net revenue on non-GAAP basis


$              5,448


$              5,066


$              4,848


$           20,862


$           17,665























Gross margin on GAAP basis


$              2,935


$              2,619


$              2,383


$           10,733


$             8,509

Acquisition-related purchase accounting revenue adjustment (1)


4


3


4


14


29

Purchase accounting effect on inventory


-


-


2


70


4

Amortization of acquisition-related intangible assets


762


762


658


3,004


2,511

Stock-based compensation expense


23


22


17


86


64

Restructuring charges


1


2


3


20


19

Acquisition-related costs


-


2


1


4


1












Gross margin on non-GAAP basis


$              3,725


$              3,410


$              3,068


$           13,931


$           11,137























Research and development on GAAP basis


$                 948


$                 959


$                 828


$             3,768


$             3,292

Stock-based compensation expense


225


222


171


855


636

Acquisition-related costs


1


-


-


4


6












Research and development on non-GAAP basis


$                 722


$                 737


$                 657


$             2,909


$             2,650























Selling, general and administrative expense on GAAP basis


$                 237


$                 234


$                 194


$             1,056


$                787

Stock-based compensation expense


69


71


64


286


220

Acquisition-related costs


27


26


12


172


91












Selling, general and administrative expense on non-GAAP basis


$                 141


$                 137


$                 118


$                598


$                476























Total operating expenses on GAAP basis


$              1,283


$              1,280


$              1,628


$             5,598


$             6,126

Amortization of acquisition-related intangible assets


67


68


441


541


1,764

Stock-based compensation expense


294


293


235


1,141


856

Restructuring, impairment and disposal charges


17


19


55


219


161

Litigation settlements


14


-


110


14


122

Acquisition-related costs


28


26


12


176


97












Total operating expenses on non-GAAP basis


$                 863


$                 874


$                 775


$             3,507


$             3,126























Operating income on GAAP basis


$              1,652


$              1,339


$                 755


$             5,135


$             2,383

Acquisition-related purchase accounting revenue adjustment (1)


4


3


4


14


29

Purchase accounting effect on inventory


-


-


2


70


4

Amortization of acquisition-related intangible assets


829


830


1,099


3,545


4,275

Stock-based compensation expense


317


315


252


1,227


920

Restructuring, impairment and disposal charges


18


21


58


239


180

Litigation settlements


14


-


110


14


122

Acquisition-related costs


28


28


13


180


98












Operating income on non-GAAP basis


$              2,862


$              2,536


$              2,293


$           10,424


$             8,011























Interest expense on GAAP basis


$                (148)


$                (149)


$                (119)


$               (628)


$             (454)

Debt-related costs


-


-


-


32


1












Interest expense on non-GAAP basis


$                (148)


$                (149)


$                (119)


$               (596)


$              (453)























Other income, net on GAAP basis


$                   24


$                   39


$                   16


$                144


$                  62

(Gains) losses on acquisition-related assets


-


1


-


(3)


(23)












Other income, net on non-GAAP basis


$                   24


$                   40


$                   16


$                141


$                  39























Income from continuing operations before income taxes on GAAP basis


$              1,422


$              1,229


$                 645


$             4,545


$             1,825

Acquisition-related purchase accounting revenue adjustment (1)


4


3


4


14


29

Purchase accounting effect on inventory


-


-


2


70


4

Amortization of acquisition-related intangible assets


829


830


1,099


3,545


4,275

Stock-based compensation expense


317


315


252


1,227


920

Restructuring, impairment and disposal charges


18


21


58


239


180

Litigation settlements


14


-


110


14


122

Acquisition-related costs


28


28


13


180


98

Impairment on investment


106


-


-


106


-

Debt-related costs


-


-


-


32


1

Loss on debt extinguishment


-


-


7


-


166

(Gains) losses on acquisition-related assets


-


1


-


(3)


(23)












Income before income taxes on non-GAAP basis


$              2,738


$              2,427


$              2,190


$             9,969


$             7,597























Provision for (benefit from) income taxes on GAAP basis


$                 307


$                   32


$                   89


$            (8,084)


$                  35

Non-GAAP tax reconciling adjustments


(115)


138


10


8,662


307












Provision for income taxes on non-GAAP basis


$                 192


$                 170


$                   99


$                578


$                342























Net income on GAAP basis


$              1,115


$              1,196


$                 561


$           12,610


$             1,784

Acquisition-related purchase accounting revenue adjustment (1)


4


3


4


14


29

Purchase accounting effect on inventory


-


-


2


70


4

Amortization of acquisition-related intangible assets


829


830


1,099


3,545


4,275

Stock-based compensation expense


317


315


252


1,227


920

Restructuring, impairment and disposal charges


18


21


58


239


180

Litigation settlements


14


-


110


14


122

Acquisition-related costs


28


28


13


180


98

Impairment on investment


106


-


-


106


-

Debt-related costs


-


-


-


32


1

Loss on debt extinguishment


-


-


7


-


166

(Gains) losses on acquisition-related assets


-


1


-


(3)


(23)

Non-GAAP tax reconciling adjustments


115


(138)


(10)


(8,662)


(307)

Discontinued operations, net of income taxes


-


1


(5)


19


6












Net income on non-GAAP basis


$              2,546


$              2,257


$              2,091


$             9,391


$             7,255


































Shares used in per share calculation - diluted on GAAP basis


423


441


424


431


421

Non-GAAP adjustment (2)


12


12


32


20


32












Shares used in per share calculation - diluted on non-GAAP basis


435


453


456


451


453























Inventory days on hand on GAAP basis


59


66


73





Non-GAAP adjustment (3)


-


1


1
















Inventory days on hand on non-GAAP basis


59


67


74



























Net income on non-GAAP basis


$              2,546


$              2,257


$              2,091





Interest expense on non-GAAP basis


148


149


119





Provision for income taxes on non-GAAP basis


192


170


99





Depreciation


132


129


117
















Adjusted EBITDA


$              3,018


$              2,705


$              2,426



























Net cash provided by operating activities


$              2,635


$              2,247


$              1,959


$             8,880


$             6,551

Purchases of property, plant and equipment


(106)


(120)


(233)


(635)


(1,069)












Free cash flow


$              2,529


$              2,127


$              1,726


$             8,245


$             5,482


































(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 year ended November 4, 2018 and for each fiscal year 2017 period presented.  

(3) Non-GAAP adjustment for inventory days on hand represents the impact of purchase accounting on inventory, stock-based compensation expense, and acquisition-related costs.

 

 

BROADCOM INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(IN MILLIONS)















November 4, 


October 29,




2018


2017








ASSETS












Current assets:






Cash and cash equivalents


$              4,292


$            11,204


Trade accounts receivable, net


3,325


2,448


Inventory


1,124


1,447


Other current assets


366


724








Total current assets


9,107


15,823








Long-term assets:






Property, plant and equipment, net


2,635


2,599


Goodwill


26,913


24,706


Intangible assets, net


10,762


10,832


Other long-term assets


707


458








Total assets


$            50,124


$            54,418




















LIABILITIES AND EQUITY












Current liabilities:






Accounts payable


$                 811


$              1,105


Employee compensation and benefits


715


626


Current portion of long-term debt


-


117


Other current liabilities


812


681








Total current liabilities


2,338


2,529








Long-term liabilities:






Long-term debt


17,493


17,431


Other long-term liabilities


3,636


11,272








Total liabilities


23,467


31,232














Equity:






Broadcom Inc. stockholders' equity:






Common stock and additional paid-in capital


23,285


20,505


Retained earnings (accumulated deficit)


3,487


(129)


Accumulated other comprehensive loss


(115)


(91)








Total Broadcom Inc. stockholders' equity


26,657


20,285


Noncontrolling interest


-


2,901


Total equity


26,657


23,186








  Total liabilities and equity


$            50,124


$            54,418














 

 

BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(IN MILLIONS)














 Fiscal Quarter Ended 


Fiscal Year Ended



November 4, 


August 5,


October 29,


November 4, 


October 29,



2018


2018


2017


2018


2017

Cash flows from operating activities:











Net income


$              1,115


$              1,196


$                 561


$            12,610


$              1,784

Adjustments to reconcile net income to net cash
provided by operating activities:










Amortization of intangible assets


836


836


1,102


3,566


4,286

Depreciation


132


129


117


515


451

Stock-based compensation


317


315


252


1,227


921

Deferred taxes and other non-cash taxes


242


22


(74)


(8,270)


(173)

Impairment on investment


106


-


-


106


-

Non-cash portion of debt extinguishment loss


-


-


7


-


166

Non-cash restructuring, impairment and
disposal charges


8


3


17


21


71

Amortization of debt issuance costs and accretion of debt discount


6


6


5


24


24

Other


15


5


9


37


7

Changes in assets and liabilities, net of
acquisitions and disposals:











  Trade accounts receivable, net


(312)


(262)


(31)


(652)


(267)

  Inventory


92


19


(16)


417


(39)

  Accounts payable


28


(41)


(63)


(325)


(97)

  Employee compensation and benefits


93


205


80


6


109

  Contributions to defined benefit pension plans


-


(1)


(345)


(130)


(361)

  Other current assets and current liabilities


163


(148)


80


369


(490)

  Other long-term assets and long-term
  liabilities


(206)


(37)


258


(641)


159












Net cash provided by operating activities


2,635


2,247


1,959


8,880


6,551























Cash flows from investing activities:











Acquisitions of businesses, net of cash acquired


(7)


(7)


-


(4,800)


(40)

Business sale proceeds (repayments)


(9)


-


-


773


10

Purchases of property, plant and equipment


(106)


(120)


(233)


(635)


(1,069)

Proceeds from disposals of property, plant and
equipment


1


-


440


239


441

Purchases of investments


-


-


(7)


(249)


(207)

Proceeds from sale and maturity of investments


-


-


200


54


200

Other


3


(47)


(4)


(56)


(9)












Net cash provided by (used in) investing
activities


(118)


(174)


396


(4,674)


(674)























Cash flows from financing activities:











Proceeds from issuance of long-term debt


-


-


3,980


-


17,426

Repayment of debt


(117)


-


-


(973)


(13,668)

Payment of debt issuance costs


-


-


(1)


-


(24)

Dividend and distribution payments


(723)


(754)


(439)


(2,998)


(1,745)

Repurchases of common stock


(1,533)


(5,378)


-


(7,258)


-

Issuance of common stock, net of shares
withheld for employee taxes


38


6


66


156


257

Payment of capital lease obligations


-


-


(6)


(21)


(16)

Other


(26)


2


-


(24)


-












Net cash provided by (used in) financing
activities


(2,361)


(6,124)


3,600


(11,118)


2,230























Net change in cash and cash equivalents


156


(4,051)


5,955


(6,912)


8,107

Cash and cash equivalents at the beginning of
period


4,136


8,187


5,249


11,204


3,097

Cash and cash equivalents at end of period


$              4,292


$              4,136


$            11,204


$              4,292


$            11,204












Supplemental disclosure of cash flow
information:











Cash paid for interest


$                     2


$                 312


$                     1


$                 547


$                 310

Cash paid for income taxes


$                 189


$                 127


$                   96


$                 512


$                 349

 

View original content:http://www.prnewswire.com/news-releases/broadcom-inc-announces-fourth-quarter-and-fiscal-year-2018-financial-results-and-quarterly-dividend-300761627.html

SOURCE Broadcom Inc.

This article was written by cool news network.

 

 

Get the latest news delivered to your inbox

Follow us on social media networks

PREV Koppers Enters into Special Purchase Order at Subsidiary in China
NEXT Therapix Biosciences Reports Third Quarter 2018 Financial Results and Provides Business Update