BROADCOM INC.

FINANCIAL RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED

(IN MILLIONS, EXCEPT PERCENTAGES)

Fiscal Quarter Ended

Fiscal Year Ended

November 1,

August 2,

November 3,

November 1,

November 3,

2020

2020

2019

2020

2019

Gross margin on GAAP basis

$

3,747

$

3,316

$

3,152

$

13,516

$

12,483

Purchase accounting effect on inventory

-

-

-

11

-

Amortization of acquisition-related intangible assets

962

953

827

3,819

3,314

Stock-based compensation expense

38

37

41

159

163

Restructuring charges

5

15

9

35

77

Acquisition-related costs

6

-

6

12

18

Gross margin on non-GAAP basis

$

4,758

$

4,321

$

4,035

$

17,552

$

16,055

Research and development on GAAP basis

$

1,182

$

1,228

$

1,177

$

4,968

$

4,696

Stock-based compensation expense

318

337

394

1,419

1,532

Acquisition-related costs

1

1

1

14

5

Research and development on non-GAAP basis

$

863

$

890

$

782

$

3,535

$

3,159

Selling, general and administrative expense on GAAP basis

$

405

$

428

$

409

$

1,935

$

1,709

Stock-based compensation expense

93

91

109

398

490

Acquisition-related costs

60

66

65

396

252

Litigation settlements

-

21

-

63

-

Selling, general and administrative expense on non-GAAP basis

$

252

$

250

$

235

$

1,078

$

967

Total operating expenses on GAAP basis

$

2,221

$

2,308

$

2,098

$

9,502

$

9,039

Amortization of acquisition-related intangible assets

599

600

474

2,401

1,898

Stock-based compensation expense

411

428

503

1,817

2,022

Restructuring, impairment and disposal charges

35

52

38

198

736

Litigation settlements

-

21

-

63

-

Acquisition-related costs

61

67

66

410

257

Total operating expenses on non-GAAP basis

$

1,115

$

1,140

$

1,017

$

4,613

$

4,126

Operating income on GAAP basis

$

1,526

$

1,008

$

1,054

$

4,014

$

3,444

Purchase accounting effect on inventory

-

-

-

11

-

Amortization of acquisition-related intangible assets

1,561

1,553

1,301

6,220

5,212

Stock-based compensation expense

449

465

544

1,976

2,185

Restructuring, impairment and disposal charges

40

67

47

233

813

Litigation settlements

-

21

-

63

-

Acquisition-related costs

67

67

72

422

275

Operating income on non-GAAP basis

$

3,643

$

3,181

$

3,018

$

12,939

$

11,929

Interest expense on GAAP basis

$

(420)

$

(464)

$

(361)

$

(1,777)

$

(1,444)

Loss on debt extinguishment

16

55

26

169

54

Interest expense on non-GAAP basis

$

(404)

$

(409)

$

(335)

$

(1,608)

$

(1,390)

Other income, net on GAAP basis

$

31

$

49

$

54

$

206

$

226

Gain from lapse of indemnification

-

-

-

(116)

-

Gains on investments

(10)

(31)

(50)

(31)

(145)

Gain from sale of business

-

(23)

-

(23)

-

Acquisition-related gain

(4)

-

-

(11)

-

Other income (loss), net on non-GAAP basis

$

17

$

(5)

$

4

$

25

$

81

Benefit from income taxes on GAAP basis

$

(187)

$

(96)

$

(100)

$

(518)

$

(510)

Non-GAAP tax reconciling adjustments

578

428

396

1,881

1,678

Provision for income taxes on non-GAAP basis

$

391

$

332

$

296

$

1,363

$

1,168

Net income on GAAP basis

$

1,324

$

688

$

847

$

2,960

$

2,724

Purchase accounting effect on inventory

-

-

-

11

-

Amortization of acquisition-related intangible assets

1,561

1,553

1,301

6,220

5,212

Stock-based compensation expense

449

465

544

1,976

2,185

Restructuring, impairment and disposal charges

40

67

47

233

813

Litigation settlements

-

21

-

63

-

Acquisition-related costs

63

67

72

411

275

Loss on debt extinguishment

16

55

26

169

54

Gain from lapse of indemnification

-

-

-

(116)

-

Gains on investments

(10)

(31)

(50)

(31)

(145)

Gain from sale of business

-

(23)

-

(23)

-

Non-GAAP tax reconciling adjustments

(578)

(428)

(396)

(1,881)

(1,678)

Discontinued operations, net of income taxes

-

1

-

1

12

Net income on non-GAAP basis

$

2,865

$

2,435

$

2,391

$

9,993

$

9,452

Weighted-average shares used in per share calculations - diluted on GAAP basis

426

422

416

421

419

Non-GAAP adjustment ⁽¹⁾

25

29

28

30

25

Weighted-average shares used in per share calculations - diluted on non-GAAP basis

451

451

444

451

444

Net income on non-GAAP basis

$

2,865

$

2,435

$

2,391

$

9,993

$

9,452

Interest expense on non-GAAP basis

404

409

335

1,608

1,390

Provision for income taxes on non-GAAP basis

391

332

296

1,363

1,168

Depreciation

139

138

143

570

569

Amortization of purchased intangibles and right-of-use assets

28

28

-

109

-

Adjusted EBITDA

$

3,827

$

3,342

$

3,165

$

13,643

$

12,579

Net cash provided by operating activities

$

3,348

$

3,178

$

2,479

$

12,061

$

9,697

Purchases of property, plant and equipment

(102)

(105)

(96)

(463)

(432)

Free cash flow

$

3,246

$

3,073

$

2,383

$

11,598

$

9,265

 Fiscal Quarter
Ending 

January 31,

Expected average diluted share count:

2021

Weighted-average shares used in per share calculation - diluted on GAAP basis

427

 Non-GAAP adjustment ⁽¹⁾

23

Weighted-average shares used in per share calculation - diluted on non-GAAP basis

450