BROADCOM INC. | ||||||||||
FINANCIAL RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED | ||||||||||
(IN MILLIONS) | ||||||||||
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| Fiscal Quarter Ended |
| Two Fiscal Quarters Ended | ||||||
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| May 3, |
| February 2, |
| May 5, |
| May 3, |
| May 5, |
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| 2020 |
| 2020 |
| 2019 |
| 2020 |
| 2019 |
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Gross margin on GAAP basis |
| $ 3,189 |
| $ 3,264 |
| $ 3,089 |
| $ 6,453 |
| $ 6,297 |
Purchase accounting effect on inventory |
| - |
| 11 |
| - |
| 11 |
| - |
Amortization of acquisition-related intangible assets |
| 954 |
| 950 |
| 826 |
| 1,904 |
| 1,659 |
Stock-based compensation expense |
| 41 |
| 43 |
| 41 |
| 84 |
| 75 |
Restructuring charges |
| 7 |
| 8 |
| 10 |
| 15 |
| 66 |
Acquisition-related costs |
| 5 |
| 1 |
| 5 |
| 6 |
| 7 |
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Gross margin on non-GAAP basis |
| $ 4,196 |
| $ 4,277 |
| $ 3,971 |
| $ 8,473 |
| $ 8,104 |
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| Research and development on GAAP basis |
| $ 1,269 |
| $ 1,289 |
| $ 1,151 |
| $ 2,558 |
| $ 2,284 |
| Stock-based compensation expense |
| 373 |
| 391 |
| 371 |
| 764 |
| 682 |
| Acquisition-related costs |
| 5 |
| 7 |
| 1 |
| 12 |
| 3 |
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| Research and development on non-GAAP basis |
| $ 891 |
| $ 891 |
| $ 779 |
| $ 1,782 |
| $ 1,599 |
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| Selling, general and administrative expense on GAAP basis |
| $ 501 |
| $ 601 |
| $ 419 |
| $ 1,102 |
| $ 890 |
| Stock-based compensation expense |
| 103 |
| 111 |
| 132 |
| 214 |
| 252 |
| Acquisition-related costs |
| 95 |
| 175 |
| 44 |
| 270 |
| 134 |
| Litigation settlements |
| 29 |
| 13 |
| - |
| 42 |
| - |
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| Selling, general and administrative expense on
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| $ 274 |
| $ 302 |
| $ 243 |
| $ 576 |
| $ 504 |
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| Total operating expenses on GAAP basis |
| $ 2,423 |
| $ 2,550 |
| $ 2,119 |
| $ 4,973 |
| $ 4,772 |
| Amortization of acquisition-related intangible assets |
| 599 |
| 603 |
| 473 |
| 1,202 |
| 949 |
| Stock-based compensation expense |
| 476 |
| 502 |
| 503 |
| 978 |
| 934 |
| Restructuring, impairment and disposal charges |
| 54 |
| 57 |
| 76 |
| 111 |
| 649 |
| Litigation settlements |
| 29 |
| 13 |
| - |
| 42 |
| - |
| Acquisition-related costs |
| 100 |
| 182 |
| 45 |
| 282 |
| 137 |
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| Total operating expenses on non-GAAP basis |
| $ 1,165 |
| $ 1,193 |
| $ 1,022 |
| $ 2,358 |
| $ 2,103 |
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| Operating income on GAAP basis |
| $ 766 |
| $ 714 |
| $ 970 |
| $ 1,480 |
| $ 1,525 |
| Purchase accounting effect on inventory |
| - |
| 11 |
| - |
| 11 |
| - |
| Amortization of acquisition-related intangible assets |
| 1,553 |
| 1,553 |
| 1,299 |
| 3,106 |
| 2,608 |
| Stock-based compensation expense |
| 517 |
| 545 |
| 544 |
| 1,062 |
| 1,009 |
| Restructuring, impairment and disposal charges |
| 61 |
| 65 |
| 86 |
| 126 |
| 715 |
| Litigation settlements |
| 29 |
| 13 |
| - |
| 42 |
| - |
| Acquisition-related costs |
| 105 |
| 183 |
| 50 |
| 288 |
| 144 |
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| Operating income on non-GAAP basis |
| $ 3,031 |
| $ 3,084 |
| $ 2,949 |
| $ 6,115 |
| $ 6,001 |
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| Interest expense on GAAP basis |
| $ (487) |
| $ (406) |
| $ (376) |
| $ (893) |
| $ (721) |
| Loss on debt extinguishment |
| 93 |
| 5 |
| 26 |
| 98 |
| 26 |
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| Interest expense on non-GAAP basis |
| $ (394) |
| $ (401) |
| $ (350) |
| $ (795) |
| $ (695) |
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| Other income (expense), net on GAAP basis |
| $ 130 |
| $ (4) |
| $ 63 |
| $ 126 |
| $ 131 |
| Gain from lapse of indemnification |
| (116) |
| - |
| - |
| (116) |
| - |
| (Gains) losses on investments |
| (8) |
| 18 |
| (40) |
| 10 |
| (67) |
| Acquisition-related gain |
| (3) |
| (4) |
| - |
| (7) |
| - |
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| Other income, net on non-GAAP basis |
| $ 3 |
| $ 10 |
| $ 23 |
| $ 13 |
| $ 64 |
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| Income from continuing operations before income taxes
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| $ 409 |
| $ 304 |
| $ 657 |
| $ 713 |
| $ 935 |
| Purchase accounting effect on inventory |
| - |
| 11 |
| - |
| 11 |
| - |
| Amortization of acquisition-related intangible assets |
| 1,553 |
| 1,553 |
| 1,299 |
| 3,106 |
| 2,608 |
| Stock-based compensation expense |
| 517 |
| 545 |
| 544 |
| 1,062 |
| 1,009 |
| Restructuring, impairment and disposal charges |
| 61 |
| 65 |
| 86 |
| 126 |
| 715 |
| Litigation settlements |
| 29 |
| 13 |
| - |
| 42 |
| - |
| Acquisition-related costs |
| 102 |
| 179 |
| 50 |
| 281 |
| 144 |
| Loss on debt extinguishment |
| 93 |
| 5 |
| 26 |
| 98 |
| 26 |
| Gain from lapse of indemnification |
| (116) |
| - |
| - |
| (116) |
| - |
| (Gains) losses on investments |
| (8) |
| 18 |
| (40) |
| 10 |
| (67) |
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| Income before income taxes on non-GAAP basis |
| $ 2,640 |
| $ 2,693 |
| $ 2,622 |
| $ 5,333 |
| $ 5,370 |
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| Benefit from income taxes on GAAP basis |
| $ (159) |
| $ (76) |
| $ (36) |
| $ (235) |
| $ (239) |
| Non-GAAP tax reconciling adjustments |
| 476 |
| 399 |
| 324 |
| 875 |
| 829 |
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| Provision for income taxes on non-GAAP basis |
| $ 317 |
| $ 323 |
| $ 288 |
| $ 640 |
| $ 590 |
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| Net income on GAAP basis |
| $ 563 |
| $ 385 |
| $ 691 |
| $ 948 |
| $ 1,162 |
| Purchase accounting effect on inventory |
| - |
| 11 |
| - |
| 11 |
| - |
| Amortization of acquisition-related intangible assets |
| 1,553 |
| 1,553 |
| 1,299 |
| 3,106 |
| 2,608 |
| Stock-based compensation expense |
| 517 |
| 545 |
| 544 |
| 1,062 |
| 1,009 |
| Restructuring, impairment and disposal charges |
| 61 |
| 65 |
| 86 |
| 126 |
| 715 |
| Litigation settlements |
| 29 |
| 13 |
| - |
| 42 |
| - |
| Acquisition-related costs |
| 102 |
| 179 |
| 50 |
| 281 |
| 144 |
| Loss on debt extinguishment |
| 93 |
| 5 |
| 26 |
| 98 |
| 26 |
| Gain from lapse of indemnification |
| (116) |
| - |
| - |
| (116) |
| - |
| (Gains) losses on investments |
| (8) |
| 18 |
| (40) |
| 10 |
| (67) |
| Non-GAAP tax reconciling adjustments |
| (476) |
| (399) |
| (324) |
| (875) |
| (829) |
| Discontinued operations, net of income taxes |
| 5 |
| (5) |
| 2 |
| - |
| 12 |
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| Net income on non-GAAP basis |
| $ 2,323 |
| $ 2,370 |
| $ 2,334 |
| $ 4,693 |
| $ 4,780 |
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| Weighted-average shares used in per share calculations
|
| 417 |
| 420 |
| 422 |
| 419 |
| 420 |
| Non-GAAP adjustment (1) |
| 35 |
| 31 |
| 26 |
| 33 |
| 25 |
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| Weighted-average shares used in per share calculations
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| 452 |
| 451 |
| 448 |
| 452 |
| 445 |
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| Net income on non-GAAP basis |
| $ 2,323 |
| $ 2,370 |
| $ 2,334 |
| $ 4,693 |
| $ 4,780 |
| Interest expense on non-GAAP basis |
| 394 |
| 401 |
| 350 |
| 795 |
| 695 |
| Provision for income taxes on non-GAAP basis |
| 317 |
| 323 |
| 288 |
| 640 |
| 590 |
| Depreciation |
| 147 |
| 146 |
| 142 |
| 293 |
| 285 |
| Amortization on non-GAAP basis |
| 28 |
| 25 |
| - |
| 53 |
| - |
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| Adjusted EBITDA |
| $ 3,209 |
| $ 3,265 |
| $ 3,114 |
| $ 6,474 |
| $ 6,350 |
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| Net cash provided by operating activities |
| $ 3,213 |
| $ 2,322 |
| $ 2,667 |
| $ 5,535 |
| $ 4,799 |
| Purchases of property, plant and equipment |
| (148) |
| (108) |
| (125) |
| (256) |
| (224) |
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| Free cash flow |
| $ 3,065 |
| $ 2,214 |
| $ 2,542 |
| $ 5,279 |
| $ 4,575 |
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| Fiscal Quarter
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| August 2, |
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| Expected average diluted share count: |
| 2020 |
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| Weighted-average shares used in per share calculation
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| 419 |
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| Non-GAAP adjustment (1) |
| 33 |
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| Weighted-average shares used in per share calculation
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| 452 |
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| (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 two fiscal quarters ended May 3, 2020 and the fiscal quarter ended February 2, 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 August 2, 2020, the non-GAAP adjustment includes the impact of Mandatory Convertible Preferred Stock that is expected to be antidilutive on a GAAP basis. |
