Marvell Technology Group Ltd.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

Three Months Ended

April 30,

May 2,

2016

2015

(Preliminary)

Cash flows from operating activities:

Net income (loss)

$      (22,679)

$      14,090

Adjustments to reconcile net income (loss) to net cash provided

  by operating activities:

Depreciation and amortization

21,788

26,620

Share-based compensation

24,453

33,221

Amortization and write-off of acquired intangible assets

2,946

3,053

Non-cash restructuring and other related charges

896

573

Other non-cash expense, net

1,361

(561)

Excess tax benefits from share-based compensation

—

(18)

Changes in assets and liabilities:

     Accounts receivable

42,642

27,141

     Inventories

13,598

(31,318)

     Prepaid expenses and other assets(a)

38,056

1,969

     Accounts payable

19,922

17,125

     Accrued liabilities and other non-current liabilities (a)

(758,502)

(11,576)

     Accrued employee compensation

7,152

(14,424)

     Deferred income

(1,234)

(7,027)

          Net cash provided by (used in) operating activities

(609,601)

58,868

Cash flows from investing activities:

Purchases of available-for-sale securities

(93,365)

(392,900)

Sales and maturities of available-for-sale securities

316,310

247,495

 Purchase of time deposits

(50,000)

—

Purchases of technology licenses

(4,050)

(3,606)

Purchases of property and equipment

(6,542)

(7,334)

Purchase of equipment previously leased 

—

(10,240)

          Net cash provided by (used in) investing activities

162,353

(166,585)

Cash flows from financing activities:

Repurchase of common stock (b)

—

(20,273)

Proceeds from employee stock plans

315

13,013

Minimum tax withholding paid on behalf of employees 

 for net share settlement

(15,270)

(22,310)

Dividend payments to shareholders

(30,461)

(30,910)

Payments on technology license obligations

(5,294)

(4,067)

Excess tax benefits from share-based compensation

—

18

          Net cash used in financing activities

(50,710)

(64,529)

Net increase (decrease) in cash and cash equivalents

(497,958)

(172,246)

Cash and cash equivalents at beginning of period

1,278,180

1,210,977

Cash and cash equivalents at end of period

$      780,222

$ 1,038,731

(a) 

In the three months ended April 30, 2016, the Company paid a total of $750.0 million to CMU in connection with the settlement agreement that was reached in February 2016. Of this settlement, the  Company recognized a charge of $736.0 million in fiscal 2016. The remaining $14.0 million was recorded in prepaid expenses and other assets, to be recognized in cost of good sold over the remaining term of the license from February 2016 through April 2018. For further detail of the accounting for the settlement, see "Note 15 – Subsequent Events" in the Notes to the Consolidated  Financial Statements included in the Company's Annual Report on Form 10-K for fiscal 2016.

(b) 

Marvell records all repurchases as well as investment purchases and sales, based on trade date in accordance with U.S. GAAP. Cash paid for repurchase of Marvell common shares includes a total of 1.4 million shares repurchased for $22.1 million in the first quarter of fiscal 2016, adjusted for repurchases of $1.8 million made within the final three days of the quarter that are accrued but not yet paid due to the standard settlement period that normally takes up to three days.