Marvell Technology Group Ltd.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

Three Months Ended

Six Months Ended

August 4,
2018

July 29,
2017

August 4,
2018

July 29,
2017

Cash flows from operating activities:

Net income

$

6,759

$

165,259

$

135,371

$

271,880

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

Depreciation and amortization

26,754

20,444

47,097

41,186

Share-based compensation

59,392

22,422

83,244

46,439

Amortization and write-off of acquired intangible assets

25,939

1,065

25,939

2,136

Amortization of inventory fair value adjustment associated with acquisition of Cavium

22,933

—

22,933

—

Amortization of deferred debt issuance costs and debt discounts

7,073

—

7,073

—

Restructuring related impairment charges (gain)

1,993

70

1,993

(446)

Gain from investment in privately-held company

—

(750)

(1,100)

(750)

Amortization of premium /discount on available-for-sale securities

(537)

597

624

803

Other non-cash expense (income), net

3,414

(1,398)

4,227

(1,423)

Deferred income taxes

(22,238)

2,008

(21,414)

2,791

Gain on sale of property and equipment

(137)

(341)

(120)

(283)

Gain on sale of discontinued operations

—

(34,032)

—

(42,187)

Gain on sale of business

—

(5,254)

—

(5,254)

Changes in assets and liabilities:

Accounts receivable

(1,356)

(14,550)

(48,749)

(36,313)

Inventories

4,186

(3,170)

6,866

(14,712)

Prepaid expenses and other assets

(5,396)

2,460

(19,504)

7,854

Accounts payable

(15,015)

(27,455)

(271)

3,968

Accrued liabilities and other non-current liabilities

(32,468)

(21,793)

(11,232)

(33,418)

Accrued employee compensation

(19,429)

(846)

(41,539)

(8,375)

Deferred income

68

(3,732)

(729)

1,284

Net cash provided by operating activities

61,935

101,004

190,709

235,180

Cash flows from investing activities:

Purchases of available-for-sale securities

(1,499)

(177,811)

(14,956)

(376,227)

Sales of available-for-sale securities

553,623

37,936

623,896

116,700

Maturities of available-for-sale securities

59,165

87,377

187,985

169,612

Return of investment from privately-held companies

—

2,388

—

2,388

Purchases of time deposits

—

(75,000)

(25,000)

(150,000)

Maturities of time deposits

75,000

75,000

150,000

150,000

Purchases of technology licenses

(903)

(608)

(1,263)

(1,701)

Purchases of property and equipment

(20,801)

(4,803)

(34,389)

(14,544)

Proceeds from sales of property and equipment

212

1,054

223

1,739

Cash payment for acquisition of Cavium, net of cash and cash equivalents acquired

(2,649,465)

—

(2,649,465)

—

Net proceeds from sale of discontinued operations

—

41,976

—

72,205

Net proceeds from sale of business

1,250

—

1,250

—

Other

—

—

(5,000)

—

Net cash used in investing activities

(1,983,418)

(12,491)

(1,766,719)

(29,828)

Cash flows from financing activities:

Repurchases of common stock

—

(221,265)

—

(387,558)

Proceeds from employee stock plans

33,525

77,872

44,580

97,811

Minimum tax withholding paid on behalf of employees for net share settlement

(12,883)

(3,005)

(36,776)

(24,814)

Dividend payments to shareholders

(39,383)

(30,095)

(69,181)

(60,086)

Payments on technology license obligations

(9,017)

(7,481)

(29,478)

(14,296)

Proceeds from issuance of debt

1,892,605

—

1,892,605

—

Principal payments of debt

(606,128)

—

(606,128)

—

Payment of equity and debt financing costs

(5,835)

—

(9,435)

—

Net cash provided by (used in) financing activities

1,252,884

(183,974)

1,186,187

(388,943)

Net decrease in cash and cash equivalents

(668,599)

(95,461)

(389,823)

(183,591)

Cash and cash equivalents at beginning of period

1,167,258

725,962

888,482

814,092

Cash and cash equivalents at end of period

$

498,659

$

630,501

$

498,659

$

630,501