Broadcom Inc. Announces Second Quarter Fiscal Year 2019 Financial Results, Quarterly Dividend and Updated Guidance
SAN JOSE, Calif., June 13, 2019 /PRNewswire/ -- Broadcom Inc. (Nasdaq: AVGO), a global technology leader that designs, develops and supplies semiconductor and infrastructure software solutions, today reported financial results for its second quarter of fiscal year 2019, ended May 5, 2019, announced a quarterly dividend and updated guidance for its fiscal year 2019.
"We executed according to plan in the second quarter with tailwinds from networking offsetting the anticipated headwinds from wireless," said Hock Tan, President and CEO of Broadcom Inc. "We currently see a broad-based slowdown in the demand environment, which we believe is driven by continued geopolitical uncertainties, as well as the effects of export restrictions on one of our largest customers. As a result, our customers are actively reducing their inventory levels, and we are taking a conservative stance for the rest of the year. We remain well-positioned across our various semiconductor and software businesses and are confident this portfolio of franchises will continue to drive sustained long-term revenue growth and increasing free cash flow."
"We achieved record free cash flow of $2.5 billion growing 20% year over year in the second quarter," said Tom Krause, CFO of Broadcom Inc. "Despite the challenging market backdrop and updated revenue outlook, we still expect to grow free cash flow by a double-digit percentage for the year. In addition, we remain focused on completing a total of $8 billion of share repurchases and eliminations in fiscal 2019."
Second Quarter Fiscal Year 2019 GAAP Results from Continuing Operations
Net revenue was $5,517 million, a decrease of 4.7 percent from $5,789 million in the previous quarter and an increase of 10.0 percent from $5,014 million in the same quarter last year.
Gross margin was $3,089 million, or 56.0 percent of net revenue. This compares with gross margin of $3,208 million, or 55.4 percent of net revenue, in the prior quarter, and gross margin of $2,551 million, or 50.9 percent of net revenue, in the same quarter last year.
Operating expenses were $2,119 million. This compares with $2,653 million in the prior quarter and $1,350 million in the same quarter last year.
Operating income was $970 million, or 17.6 percent of net revenue. This compares with operating income of $555 million, or 9.6 percent of net revenue, in the prior quarter, and operating income of $1,201 million, or 24.0 percent of net revenue, in the same quarter last year.
Net income, which includes the impact of discontinued operations, was $691 million, or $1.64 per diluted share. This compares with net income of $471 million, or $1.12 per diluted share, in the prior quarter, and net income of $3,733 million, or $8.33 per diluted share, in the same quarter last year.
Cash from operations was $2,667 million in the quarter, compared to $2,313 million in the same quarter last year.
Second Quarter Fiscal Year 2019 GAAP Results
Change
---
(Dollars in millions, except per share data)
Q2 19
Q1 19
Q2 18
Q/Q
Y/Y
---
Net revenue $5,517 $5,789 $5,014 -4.7% +10.0%
Gross margin 56.0% 55.4% 50.9%
+60bps
+510bps
Operating expenses $2,119 $2,653 $1,350 -$ 534 +$ 769
Net income $691 $471 $3,733 +$ 220 -$ 3,042
Net income attributable to noncontrolling interest
$ -
$ - $15
$ - -$ 15
Net income attributable to common stock $691 $471 $3,718 +$ 220 -$ 3,027
Earnings per share - diluted $1.64 $1.12 $8.33 +$ 0.52 -$ 6.69
The Company's cash and cash equivalents at the end of the second fiscal quarter were $5,328 million, compared to $5,093 million at the end of the prior quarter.
During the second fiscal quarter the Company generated $2,667 million in cash from operations and spent $1,330 million on share repurchases and eliminations consisting of $830 million in repurchases of 2.9 million shares and $500 million on withholding tax payments related to net settled equity awards that vested in the quarter (representing approximately 1.8 million shares withheld), as well as $125 million on capital expenditures.
On March 29, 2019, the Company paid a cash dividend of $2.65 per share of common stock, totaling $1,057 million.
Second Quarter Fiscal Year 2019 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.
Gross margin from continuing operations was $3,971 million, or 72.0 percent of net revenue. This compares with gross margin from continuing operations of $4,133 million, or 71.4 percent of net revenue, in the prior quarter, and $3,342 million, or 66.6 percent of net revenue, in the same quarter last year.
Operating income from continuing operations was $2,949 million, or 53.5 percent of net revenue. This compares with operating income from continuing operations of $3,052 million, or 52.7 percent of net revenue, in the prior quarter, and $2,455 million, or 48.9 percent of net revenue, in the same quarter last year.
Net income from continuing operations was $2,334 million, or $5.21 per diluted share. This compares with net income of $2,446 million, or $5.55 per diluted share, in the prior quarter, and net income of $2,243 million, or $4.88 per diluted share, in the same quarter last year.
Free cash flow from operations, defined as cash from operations less capital expenditures, was $2,542 million in the quarter, compared to $2,124 million in the same quarter last year.
Second Quarter Fiscal Year 2019 Non-GAAP Results
Change
---
(Dollars in millions, except per share data)
Q2 19
Q1 19
Q2 18
Q/Q
Y/Y
---
Gross margin 72.0% 71.4% 66.6%
+60bps
+540bps
Operating expenses $1,022 $1,081 $887 -$ 59 +$ 135
Net income $2,334 $2,446 $2,243 -$ 112 +$ 91
Earnings per share - diluted $5.21 $5.55 $4.88 -$ 0.34 +$ 0.33
Other Quarterly Data
Net revenue by segment
Change
---
(Dollars in millions)
Q2 19
Q1 19
Q2 18
Q/Q
Y/Y
---
Semiconductor solutions $4,088 74% $4,374 76% $4,537 90% -7% -10%
Infrastructure software 1,413 26 1,403 24 447 9 1% 216%
Intellectual property licensing 16 12 30 1 33% -47%
Total net revenue $5,517 100% $5,789 100% $5,014 100%
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
$22,500M
$22,500M
Operating margin 14.75%
$8,470M 52.50%
Net interest expense and other
$1,300M
$1,300M
Provision for (benefit from) income taxes -9% 20% 11%
-- Non-GAAP operating margin excludes $5,210 million of amortization of
acquisition-related intangible assets, $2.2 billion of stock-based
compensation expense, $820 million of restructuring charges, and $240
million of acquisition-related costs; and
-- Non-GAAP tax provision is 20% higher 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 $500 million. For the fiscal year, depreciation is expected to be approximately $600 million and total intangible amortization is expected to be approximately $5,235 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 for CA, Inc., all of which may be revised during the remainder of the measurement period (which will not exceed 12 months from the CA acquisition). The guidance excludes the impact of any future 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 July 2, 2019 to stockholders of record at the close of business (5:00 p.m.) Eastern Time on June 24, 2019.
Financial Results Conference Call
Broadcom Inc. will host a conference call to review its financial results for the second quarter of fiscal year 2019, ended May 5, 2019, and discuss 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 3044229. 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: 3044229. 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. and, prior to that time, are to our predecessor, Broadcom Limited.
The Company's financial results include contributions from CA, Inc.'s continuing operations starting in the first quarter of fiscal year 2019. 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 above, 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 2019.
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, gains on investments, 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, enterprise software, broadband, wireless, storage and industrial. Our solutions include data center networking and storage, enterprise and mainframe software focused on automation, monitoring and security, smartphone components, telecoms and factory automation.
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; 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; global economic conditions and concerns; government regulations and trade restrictions; our ability to accurately estimate customers' demand and adjust our manufacturing and supply chain accordingly; our significant indebtedness 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 and our ability to attract and retain qualified personnel; international political and economic conditions; our dependency on a limited number of suppliers; quarterly and annual fluctuations in operating results; 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; involvement in legal or administrative proceedings; 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; changes in accounting standards; fluctuations in foreign exchange rates; our provision for income taxes and 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:
Broadcom Inc.
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 Two Fiscal Quarters Ended
May 5,
February 3,
May 6,
May 5,
May 6,
2019 2019 2018 2019 2018
Net revenue $5,517 $5,789 $5,014 $11,306 $10,341
Cost of revenue:
Cost of revenue 1,592 1,692 1,696 3,284 3,595
Purchase accounting effect on inventory 70
Amortization of acquisition-related
intangible assets 826 833 765 1,659 1,480
Restructuring charges 10 56 2 66 17
Total cost of revenue 2,428 2,581 2,463 5,009 5,162
Gross margin 3,089 3,208 2,551 6,297 5,179
Research and development 1,151 1,133 936 2,284 1,861
Selling, general and administrative 419 471 294 890 585
Amortization of acquisition-related
intangible assets 473 476 67 949 406
Restructuring, impairment and disposal
charges 76 573 53 649 183
Total operating expenses 2,119 2,653 1,350 4,772 3,035
Operating income 970 555 1,201 1,525 2,144
Interest expense (376) (345) (148) (721) (331)
Other income, net 63 68 46 131 81
Income from continuing operations before
income taxes 657 278 1,099 935 1,894
Benefit from income taxes (36) (203) (2,637) (239) (8,423)
Income from continuing operations 693 481 3,736 1,174 10,317
Loss from discontinued operations, net of
income taxes (2) (10) (3) (12) (18)
Net income 691 471 3,733 1,162 10,299
Net income attributable to noncontrolling
interest (1) 15 351
Net income attributable to common stock $691 $471 $3,718 $1,162 $9,948
Basic income per share:
Income per share from continuing
operations $1.75 $1.20 $8.84 $2.94 $24.01
Loss per share from discontinued
operations (0.01) (0.03) (0.01) (0.03) (0.04)
Net income per share $1.74 $1.17 $8.83 $2.91 $23.97
Diluted income per share(2):
Income per share from continuing
operations $1.64 $1.15 $8.34 $2.80 $23.03
Loss per share from discontinued
operations (0.03) (0.01) (0.03) (0.04)
Net income per share $1.64 $1.12 $8.33 $2.77 $22.99
Shares used in per share calculations:
Basic 397 401 421 399 415
Diluted 422 419 448 420 448
Stock-based compensation expense included in continuing operations:
Cost of revenue $41 $34 $21 $75 $41
Research and development 371 311 205 682 408
Selling, general and administrative 132 120 70 252 146
Total stock-based compensation expense $544 $465 $296 $1,009 $595
(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) There were no LP Units outstanding during the fiscal quarters ended May 5, 2019, February 3, 2019, or two fiscal quarters ended May 5, 2019 due to the Redomiciliation. The diluted income per share calculations include approximately 14 million and 18 million LP Units for the
fiscal quarter and two fiscal quarters ended May 6, 2018, respectively.
BROADCOM INC.
FINANCIAL RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED
(IN MILLIONS)
Fiscal Quarter Ended Two Fiscal Quarters Ended
May 5,
February 3,
May 6,
May 5,
May 6,
2019 2019 2018 2019 2018
Net revenue on GAAP basis $5,517 $5,789 $5,014 $11,306 $10,341
Acquisition-related purchase
accounting revenue adjustment (1) 3 7
Net revenue on non-GAAP basis $5,517 $5,789 $5,017 $11,306 $10,348
Gross margin on GAAP basis $3,089 $3,208 $2,551 $6,297 $5,179
Acquisition-related purchase
accounting revenue adjustment (1) 3 7
Purchase accounting effect on
inventory 70
Amortization of acquisition-related
intangible assets 826 833 765 1,659 1,480
Stock-based compensation expense 41 34 21 75 41
Restructuring charges 10 56 2 66 17
Acquisition-related costs 5 2 7 2
Gross margin on non-GAAP basis $3,971 $4,133 $3,342 $8,104 $6,796
Research and development on GAAP
basis $1,151 $1,133 $936 $2,284 $1,861
Stock-based compensation expense 371 311 205 682 408
Acquisition-related costs 1 2 3 3
Research and development on non-
GAAP basis $779 $820 $731 $1,599 $1,450
Selling, general and administrative
expense on GAAP basis $419 $471 $294 $890 $585
Stock-based compensation expense 132 120 70 252 146
Acquisition-related costs 44 90 68 134 119
Selling, general and administrative
expense on non-GAAP basis $243 $261 $156 $504 $320
Total operating expenses on GAAP
basis $2,119 $2,653 $1,350 $4,772 $3,035
Amortization of acquisition-related
intangible assets 473 476 67 949 406
Stock-based compensation expense 503 431 275 934 554
Restructuring, impairment and
disposal charges 76 573 53 649 183
Acquisition-related costs 45 92 68 137 122
Total operating expenses on non-
GAAP basis $1,022 $1,081 $887 $2,103 $1,770
Operating income on GAAP basis $970 $555 $1,201 $1,525 $2,144
Acquisition-related purchase
accounting revenue adjustment (1) 3 7
Purchase accounting effect on
inventory 70
Amortization of acquisition-related
intangible assets 1,299 1,309 832 2,608 1,886
Stock-based compensation expense 544 465 296 1,009 595
Restructuring, impairment and
disposal charges 86 629 55 715 200
Acquisition-related costs 50 94 68 144 124
Operating income on non-GAAP basis $2,949 $3,052 $2,455 $6,001 $5,026
Interest expense on GAAP basis $(376) $(345) $(148) $(721) $(331)
Debt-related costs 26 26 32
Interest expense on non-GAAP basis $(350) $(345) $(148) $(695) $(299)
Other income, net on GAAP basis $63 $68 $46 $131 $81
Gains on investments (40) (27) (4) (67) (4)
Other income, net on non-GAAP basis $23 $41 $42 $64 $77
Income from continuing operations
before income taxes on GAAP basis $657 $278 $1,099 $935 $1,894
Acquisition-related purchase
accounting revenue adjustment (1) 3 7
Purchase accounting effect on
inventory 70
Amortization of acquisition-related
intangible assets 1,299 1,309 832 2,608 1,886
Stock-based compensation expense 544 465 296 1,009 595
Restructuring, impairment and
disposal charges 86 629 55 715 200
Acquisition-related costs 50 94 68 144 124
Debt-related costs 26 26 32
Gains on investments (40) (27) (4) (67) (4)
Income before income taxes on non-
GAAP basis $2,622 $2,748 $2,349 $5,370 $4,804
Benefit from income taxes on GAAP
basis $(36) $(203) $(2,637) $(239) $(8,423)
Non-GAAP tax reconciling
adjustments 324 505 2,743 829 8,639
Provision for income taxes on non-
GAAP basis $288 $302 $106 $590 $216
Net income on GAAP basis $691 $471 $3,733 $1,162 $10,299
Acquisition-related purchase
accounting revenue adjustment (1) 3 7
Purchase accounting effect on
inventory 70
Amortization of acquisition-related
intangible assets 1,299 1,309 832 2,608 1,886
Stock-based compensation expense 544 465 296 1,009 595
Restructuring, impairment and
disposal charges 86 629 55 715 200
Acquisition-related costs 50 94 68 144 124
Debt-related costs 26 26 32
Gains on investments (40) (27) (4) (67) (4)
Non-GAAP tax reconciling
adjustments (324) (505) (2,743) (829) (8,639)
Discontinued operations, net of
income taxes 2 10 3 12 18
Net income on non-GAAP basis $2,334 $2,446 $2,243 $4,780 $4,588
Shares used in per share calculation
-diluted on GAAP basis 422 419 448 420 448
Non-GAAP adjustment (2) 26 22 12 25 11
Shares used in per share calculation
- diluted on non-GAAP basis 448 441 460 445 459
Net income on non-GAAP basis $2,334 $2,446 $2,243 $4,780 $4,588
Interest expense on non-GAAP basis 350 345 148 695 299
Provision for income taxes on non-
GAAP basis 288 302 106 590 216
Depreciation 142 143 128 285 254
Adjusted EBITDA $3,114 $3,236 $2,625 $6,350 $5,357
Net cash provided by operating
activities $2,667 $2,132 $2,313 $4,799 $3,998
Purchases of property, plant and
equipment (125) (99) (189) (224) (409)
Free cash flow $2,542 $2,033 $2,124 $4,575 $3,589
Fiscal Quarter Ending
August 4,
November 3,
Expected fully diluted share count: 2019 2019
Shares used in per share calculation
-diluted on GAAP basis 419 420
Non-GAAP adjustment (2) 25 23
Shares used in per share calculation
- diluted on non-GAAP basis 444 443
(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.
BROADCOM INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(IN MILLIONS)
May 5,
November 4,
2019 2018
ASSETS
Current assets:
Cash and cash equivalents $5,328 $4,292
Trade accounts receivable, net 3,484 3,325
Inventory 1,034 1,124
Other current assets 831 366
Total current assets 10,677 9,107
Long-term assets:
Property, plant and equipment, net 2,654 2,635
Goodwill 36,662 26,913
Intangible assets, net 20,188 10,762
Other long-term assets 735 707
Total assets $70,916 $50,124
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $759 $811
Employee compensation and benefits 478 715
Current portion of long-term debt 3,537
Other current liabilities 3,729 812
Total current liabilities 8,503 2,338
Long-term liabilities:
Long-term debt 34,011 17,493
Other long-term liabilities 6,230 3,636
Total liabilities 48,744 23,467
Stockholders' equity:
Common stock and additional paid-in capital 22,288 23,285
Retained earnings 3,487
Accumulated other comprehensive loss (116) (115)
Total stockholders' equity 22,172 26,657
Total liabilities and stockholders' equity $70,916 $50,124
BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(IN MILLIONS)
Fiscal Quarter Ended Two Fiscal Quarters Ended
May 5,
February 3,
May 6,
May 5,
May 6,
2019 2019 2018 2019 2018
Cash flows from operating activities:
Net income $691 $471 $3,733 $1,162 $10,299
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets 1,305 1,316 836 2,621 1,894
Depreciation 142 143 128 285 254
Stock-based compensation 544 465 296 1,009 595
Deferred taxes and other non-cash taxes (94) (379) (2,702) (473) (8,534)
Non-cash restructuring, impairment and disposal charges 6 92 5 98 10
Non-cash interest expense 14 13 6 27 12
Other (39) (21) 14 (60) 17
Changes in assets and liabilities, net of acquisitions and disposals:
Trade accounts receivable, net 193 68 (277) 261 (78)
Inventory 40 50 56 90 306
Accounts payable 30 (169) 91 (139) (312)
Employee compensation and benefits (6) (458) 84 (464) (292)
Contributions to defined benefit pension plans (129)
Other current assets and current liabilities (37) 506 70 469 354
Other long-term assets and long-term liabilities (122) 35 (27) (87) (398)
Net cash provided by operating activities 2,667 2,132 2,313 4,799 3,998
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired (16,027) (16,027) (4,786)
Proceeds from sales of businesses 957 957 782
Purchases of property, plant and equipment (125) (99) (189) (224) (409)
Proceeds from disposals of property, plant and equipment 1 238
Purchases of investments (5) (5) (5) (249)
Proceeds from sales of investments 3 54 3 54
Other 21 (24) (16) (3) (12)
Net cash used in investing activities (106) (15,193) (155) (15,299) (4,382)
Cash flows from financing activities:
Proceeds from long-term borrowings 10,897 17,896 28,793
Repayment of debt (12,000) (12,000) (856)
Payment of debt issuance costs (46) (46)
Other borrowings 1,044 531 1,575
Dividend and distribution payments (1,057) (1,067) (766) (2,124) (1,521)
Repurchases of common stock - repurchase program (830) (3,436) (347) (4,266) (347)
Shares repurchased for tax witholdings on vesting of equity awards (500) (77) (2) (577) (2)
Issuance of common stock 121 62 80 183 114
Other (1) (1) (12) (2) (21)
Net cash provided by (used in) financing activities (2,326) 13,862 (1,047) 11,536 (2,633)
Net change in cash and cash equivalents 235 801 1,111 1,036 (3,017)
Cash and cash equivalents at the beginning of period 5,093 4,292 7,076 4,292 11,204
Cash and cash equivalents at end of period $5,328 $5,093 $8,187 $5,328 $8,187
Supplemental disclosure of cash flow information:
Cash paid for interest $189 $423 $1 $612 $233
Cash paid for income taxes $425 $95 $87 $520 $196
View original content:http://www.prnewswire.com/news-releases/broadcom-inc-announces-second-quarter-fiscal-year-2019-financial-results-quarterly-dividend-and-updated-guidance-300867484.html
SOURCE Broadcom Inc.
