UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
þ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 6, 2018April 30, 2023
OR
¨

☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-38449
Broadcom Inc.
(Exact name of registrant as specified in its charter)
Delaware35-2617337
Delaware
001-3844935-2617337
(State or other jurisdiction of

incorporation or organization)
(Commission file Number)
(I.R.S. Employer

Identification No.)
1320 Ridder Park Drive
San Jose, CA 95131-2313
(408) 433-8000
San Jose,CA95131-2313
(408) 433-8000
(Address, including zip code, of
principal executive offices and registrant’s
registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.001 par valueAVGOThe NASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.YES Yes þ NO No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).YES Yes þ NO No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerþAccelerated filero☐Non-accelerated filero☐Smaller reporting companyo☐Emerging growth companyo
(Do not check if a smaller reporting company)☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).YES o NO Yes ☐No þ

As of June 1, 2018,May 26, 2023, there were 431,680,880412,685,405 shares of our common stock $0.001 par value per share, outstanding.





BROADCOM INC.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended May 6, 2018April 30, 2023


TABLE OF CONTENTS
Page
1
Item 1. Condensed Consolidated Financial Statements — Unaudited
1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
3722
Item 3. Quantitative and Qualitative Disclosures About Market Risk
4730
Item 4. Controls and Procedures
4730
4830
Item 1. Legal Proceedings
4830
Item 1A. Risk Factors
4830
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
6650
Item 3. Defaults Upon Senior Securities
6650
Item 4. Mine Safety Disclosures
6650
Item 5. Other Information
6650
Item 6. Exhibits
6751
7152



Table of Contents

PART I — FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements — Unaudited
BROADCOM INC.
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED
Page
2
3
4
5
6
78


1
Table of Contents
BROADCOM INC.
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED
April 30,
2023		October 30,
2022
(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents$11,553 $12,416 
Trade accounts receivable, net3,031 2,958 
Inventory1,886 1,925 
Other current assets1,401 1,205 
Total current assets17,871 18,504 
Long-term assets:
Property, plant and equipment, net2,209 2,223 
Goodwill43,614 43,614 
Intangible assets, net5,434 7,111 
Other long-term assets2,539 1,797 
Total assets$71,667 $73,249 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$831 $998 
Employee compensation and benefits634 1,202 
Current portion of long-term debt1,117 440 
Other current liabilities4,929 4,412 
Total current liabilities7,511 7,052 
Long-term liabilities:  
Long-term debt38,194 39,075 
Other long-term liabilities3,955 4,413 
Total liabilities49,660 50,540 
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.001 par value; 100 shares authorized; none issued and outstanding— — 
Common stock, $0.001 par value; 2,900 shares authorized; 414 and 418 shares issued and outstanding as of April 30, 2023 and October 30, 2022, respectively— — 
Additional paid-in capital20,826 21,159 
Retained earnings1,363 1,604 
Accumulated other comprehensive loss(182)(54)
Total stockholders’ equity22,007 22,709 
Total liabilities and equity$71,667 $73,249 
  May 6,
2018		 October 29,
2017
     
  (In millions, except par value)
ASSETS    
Current assets:    
Cash and cash equivalents $8,187
 $11,204
Trade accounts receivable, net 2,749
 2,448
Inventory 1,235

1,447
Other current assets 303

724
Total current assets 12,474
 15,823
Long-term assets:    
Property, plant and equipment, net 2,720
 2,599
Goodwill 26,908
 24,706
Intangible assets, net 12,346
 10,832
Other long-term assets 488

458
Total assets $54,936
 $54,418
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Current liabilities:    
Accounts payable $836
 $1,105
Employee compensation and benefits 417
 626
Current portion of long-term debt 117
 117
Other current liabilities 754

681
Total current liabilities 2,124
 2,529
Long-term liabilities:    
Long-term debt 17,481
 17,431
Other long-term liabilities 3,264

11,272
Total liabilities 22,869
 31,232
Commitments and contingencies (Note 11) 

 

Stockholders’ equity:    
Preferred stock, $0.001 par value; 100 shares authorized; none and 22 shares issued and outstanding as of May 6, 2018 and October 29, 2017, respectively —
 —
Common stock and additional paid-in capital, $0.001 par value; 2,900 shares authorized; 436 and 409 shares issued and outstanding as of May 6, 2018 and October 29, 2017, respectively 24,305
 20,505
Retained earnings (accumulated deficit) 7,868
 (129)
Accumulated other comprehensive loss (106) (91)
Total Broadcom Inc. stockholders’ equity 32,067
 20,285
Noncontrolling interest —
 2,901
Total stockholders’ equity 32,067
 23,186
Total liabilities and stockholders’ equity $54,936
 $54,418


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



2
Table of Contents
BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
Fiscal Quarter EndedTwo Fiscal Quarters Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
(In millions, except per share data)
Net revenue:
Products$6,741 $6,417 $13,823 $12,470 
Subscriptions and services1,992 1,686 3,825 3,339 
Total net revenue8,733 8,103 17,648 15,809 
Cost of revenue:
Cost of products sold2,019 1,798 4,244 3,567 
Cost of subscriptions and services158 158 307 314 
Amortization of acquisition-related intangible assets441 707 976 1,437 
Restructuring charges— 1 2 3 
Total cost of revenue2,618 2,664 5,529 5,321 
Gross margin6,115 5,439 12,119 10,488 
Research and development1,312 1,261 2,507 2,467 
Selling, general and administrative438 368 786 689 
Amortization of acquisition-related intangible assets348 398 696 795 
Restructuring, impairment and disposal charges9 18 19 35 
Total operating expenses2,107 2,045 4,008 3,986 
Operating income4,008 3,394 8,111 6,502 
Interest expense(405)(518)(811)(925)
Other income (expense), net113 (86)256 (100)
Income before income taxes3,716 2,790 7,556 5,477 
Provision for income taxes235 200 301 415 
Net income3,481 2,590 7,255 5,062 
Dividends on preferred stock— (75)— (149)
Net income attributable to common stock$3,481 $2,515 $7,255 $4,913 
Net income per share attributable to common stock:
Basic$8.39 $6.16 $17.40 $11.98 
Diluted$8.15 $5.93 $16.95 $11.53 
Weighted-average shares used in per share calculations:
Basic415 408 417 410 
Diluted427 424 428 426 
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions, except per share data)
Net revenue $5,014
 $4,190
 $10,341

$8,329
Cost of products sold:        
Cost of products sold 1,696
 1,564
 3,595
 3,137
Purchase accounting effect on inventory —
 1
 70
 1
Amortization of acquisition-related intangible assets 765
 639
 1,480
 1,198
Restructuring charges 2
 10
 17
 16
Total cost of products sold 2,463
 2,214
 5,162
 4,352
Gross margin 2,551
 1,976
 5,179
 3,977
Research and development 936
 829
 1,861
 1,637
Selling, general and administrative 294
 204
 585
 405
Amortization of acquisition-related intangible assets 67
 442
 406
 882
Restructuring, impairment and disposal charges 53
 27
 183
 73
Total operating expenses 1,350
 1,502
 3,035
 2,997
Operating income 1,201
 474
 2,144
 980
Interest expense (148) (112) (331) (223)
Loss on extinguishment of debt —
 —
 —
 (159)
Other income, net 46
 3
 81
 34
Income from continuing operations before income taxes 1,099
 365
 1,894
 632
Benefit from income taxes (2,637) (103) (8,423) (93)
Income from continuing operations 3,736
 468
 10,317
 725
Loss from discontinued operations, net of income taxes (3) (4) (18) (9)
Net income 3,733
 464
 10,299
 716
Net income attributable to noncontrolling interest 15
 24
 351
 37
Net income attributable to common stock $3,718
 $440
 $9,948
 $679
         
Basic income (loss) per share:        
Income per share from continuing operations $8.84
 $1.10
 $24.01
 $1.72
Loss per share from discontinued operations (0.01) (0.01) (0.04) (0.03)
Net income per share $8.83
 $1.09
 $23.97
 $1.69
         
Diluted income (loss) per share:        
Income per share from continuing operations $8.34
 $1.06
 $23.03
 $1.65
Loss per share from discontinued operations (0.01) (0.01) (0.04) (0.02)
Net income per share $8.33
 $1.05
 $22.99
 $1.63
         
Weighted-average shares:        
Basic 421
 403
 415
 401
Diluted 448
 442
 448
 440
         
Cash dividends declared and paid per share $1.75
 $1.02
 $3.50
 $2.04

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3
Table of Contents
BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME — UNAUDITED
Fiscal Quarter EndedTwo Fiscal Quarters Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
(In millions)
Net income$3,481 $2,590 $7,255 $5,062 
Other comprehensive income (loss), net of tax:
Change in unrealized loss on derivative instruments(2)— (128)— 
Change in actuarial loss and prior service costs associated with defined benefit plans— — — 1 
Other comprehensive income (loss), net of tax(2)— (128)1 
Comprehensive income$3,479 $2,590 $7,127 $5,063 
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions)
Net income $3,733
 $464
 $10,299
 $716
Other comprehensive income (loss), net of tax:        
Change in unrealized gain on available-for-sale investments (9) —
 —
 —
Amortization of actuarial loss and prior service costs associated with defined benefit pension plans and post-retirement benefit plans 1
 1
 1
 1
Other comprehensive income (loss) (8) 1
 1
 1
Comprehensive income 3,725
 465
 10,300
 717
Comprehensive income attributable to noncontrolling interest 15
 24
 351
 37
Comprehensive income attributable to common stock $3,710
 $441
 $9,949
 $680

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

Table of Contents
BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
Two Fiscal Quarters Ended
April 30,
2023		May 1,
2022
(In millions)
Cash flows from operating activities:
Net income$7,255 $5,062 
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible and right-of-use assets1,715 2,280 
Depreciation256 271 
Stock-based compensation904 773 
Deferred taxes and other non-cash taxes(889)70 
Loss on debt extinguishment— 100 
Non-cash interest expense65 65 
Other(18)125 
Changes in assets and liabilities, net of acquisitions and disposals:
Trade accounts receivable, net(91)(1,004)
Inventory39 (370)
Accounts payable(194)(31)
Employee compensation and benefits(566)(313)
Other current assets and current liabilities405 808 
Other long-term assets and long-term liabilities(343)(107)
Net cash provided by operating activities8,538 7,729 
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired— (234)
Purchases of property, plant and equipment(225)(186)
Purchases of investments(197)(200)
Other1 1 
Net cash used in investing activities(421)(619)
Cash flows from financing activities:
Proceeds from long-term borrowings— 1,935 
Payments on debt obligations(260)(2,352)
Payments of dividends(3,840)(3,514)
Repurchases of common stock - repurchase program(3,994)(5,500)
Shares repurchased for tax withholdings on vesting of equity awards(947)(889)
Issuance of common stock63 60 
Other(2)(8)
Net cash used in financing activities(8,980)(10,268)
Net change in cash and cash equivalents(863)(3,158)
Cash and cash equivalents at beginning of period12,416 12,163 
Cash and cash equivalents at end of period$11,553 $9,005 
  Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017
     
  (In millions)
Cash flows from operating activities:    
Net income $10,299
 $716
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 2,148
 2,307
Stock-based compensation 595
 418
Deferred taxes and other non-cash taxes (8,534) (111)
Non-cash portion of debt extinguishment loss —
 159
Non-cash restructuring, impairment and disposal charges 10
 40
Amortization of debt issuance costs and accretion of debt discount 12
 14
Other 17
 (15)
Changes in assets and liabilities, net of acquisitions and disposals:    
Trade accounts receivable, net (78) 108
Inventory 306
 96
Accounts payable (312) (251)
Employee compensation and benefits (292) (53)
Contributions to defined benefit pension plans (129) (11)
Other current assets and current liabilities 354
 (391)
Other long-term assets and long-term liabilities (398) (90)
Net cash provided by operating activities 3,998
 2,936
Cash flows from investing activities:    
Acquisitions of businesses, net of cash acquired (4,786) (37)
Proceeds from sales of businesses 782
 10
Purchases of property, plant and equipment (409) (581)
Proceeds from disposals of property, plant and equipment 238
 —
Purchases of investments (249) (200)
Proceeds from sale of investment 54
 —
Other (12) (4)
Net cash used in investing activities (4,382) (812)
Cash flows from financing activities:    
Proceeds from issuance of long-term debt —
 13,446
Repayment of debt (856) (13,668)
Payment of debt issuance costs —
 (23)
Dividend and distribution payments (1,521) (868)
Repurchases of common stock (347) —
Issuance of common stock, net 112
 150
Payment of capital lease obligations (21) (4)
Net cash used in financing activities (2,633) (967)
Net change in cash and cash equivalents (3,017) 1,157
Cash and cash equivalents at beginning of period 11,204
 3,097
Cash and cash equivalents at end of period $8,187
 $4,254

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5
Table of Contents

BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY — UNAUDITED
Two Fiscal Quarters Ended April 30, 2023
  Preferred Stock 
Common Stock
and Additional
Paid-in Capital
 
Retained
Earnings/(Accumulated Deficit)
 
Accumulated
Other
Comprehensive
Loss
 Noncontrolling Interest 
Total
Stockholders’
Equity
  Shares Amount Shares Amount    
                 
  (In millions)
Balance as of October 29, 2017 22
 $—
 409
 $20,505
 $(129) $(91) $2,901
 $23,186
Net income —
 —
 —
 —
 6,230
 —
 336
 6,566
Other comprehensive income —
 —
 —
 —
 —
 9
 —
 9
Cumulative effect of accounting change —
 —
 —
 —
 (252) —
 (14) (266)
Cash dividends declared and paid to common stockholders —
 —
 —
 —
 (717) —
 —
 (717)
Cash distribution declared and paid by Broadcom Cayman L.P. on exchangeable limited partnership units —
 —
 —
 —
 —
 —
 (38) (38)
Exchange of exchangeable limited partnership units for common stock —
 —
 —
 5
 —
 —
 (5) —
Issuance of common stock in connection with equity incentive plans —
 —
 1
 34
 —
 —
 —
 34
Stock-based compensation —
 —
 —
 299
 —
 —
 —
 299
Fair value of partially vested equity awards assumed in connection with the acquisition of Brocade Communications Systems, Inc. —
 —
 —
 8
 —
 —
 —
 8
Balance as of February 4, 2018 22
 —
 410
 20,851
 5,132
 (82) 3,180
 29,081
Net income —
 —
 —
 —
 3,718
 —
 15
 3,733
Other comprehensive loss —
 —
 —
 —
 —
 (8) —
 (8)
Cumulative effect of accounting change —
 —
 —
 —
 15
 (16) 1
 —
Cash dividends declared and paid to common stockholders —
 —
 —
 —
 (727) —
 —
 (727)
Cash distribution declared and paid by Broadcom Cayman L.P. on exchangeable limited partnership units —
 —
 —
 —
 —
 —
 (39) (39)
Exchange of exchangeable limited partnership units for common stock and redemption of preferred stock due to the Redomiciliation Transaction (22) —
 22
 3,157
   —
 (3,157) —
Issuance of common stock in connection with equity incentive plans, net —
 —
 6
 78
 —
 —
 —
 78
Stock-based compensation —
 —
 —
 296
 —
 —
 —
 296
Repurchases of common stock —
 —
 (2) (77) (270) —
 —
 (347)
Balance as of May 6, 2018 —
 $—
 436
 $24,305
 $7,868
 $(106) $—
 $32,067
Common StockAdditional
Paid-in Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity
SharesPar Value
(In millions)
Balance as of October 30, 2022418 $— $21,159 $1,604 $(54)$22,709 
Net income— — — 3,774 — 3,774 
Other comprehensive loss— — — — (126)(126)
Dividends to common stockholders— — — (1,926)— (1,926)
Common stock issued2 — — — — — 
Stock-based compensation— — 391 — — 391 
Repurchases of common stock(2)— (107)(1,081)— (1,188)
Shares repurchased for tax withholdings on vesting of equity awards(1)— (324)— — (324)
Balance as of January 29, 2023417 — 21,119 2,371 (180)23,310 
Net income— — — 3,481 — 3,481 
Other comprehensive loss— — — — (2)(2)
Dividends to common stockholders— — — (1,914)— (1,914)
Common stock issued3 — 63 — — 63 
Stock-based compensation— — 513 — — 513 
Repurchases of common stock(5)— (248)(2,575)— (2,823)
Shares repurchased for tax withholdings on vesting of equity awards(1)— (621)— — (621)
Balance as of April 30, 2023414 $— $20,826 $1,363 $(182)$22,007 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6
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BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY — UNAUDITED
Two Fiscal Quarters Ended May 1, 2022
8.00% Mandatory Convertible Preferred StockCommon StockAdditional
Paid-in Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity
SharesPar ValueSharesPar Value
(In millions)
Balance as of October 31, 20214 $— 413 $— $24,330 $748 $(116)$24,962 
Net income— — — — — 2,472 — 2,472 
Other comprehensive income— — — — — — 1 1 
Dividends to common stockholders— — — — — (1,689)— (1,689)
Dividends to preferred stockholders— — — — — (74)— (74)
Common stock issued— — 2 — 1 — — 1 
Stock-based compensation— — — — 387 — — 387 
Repurchases of common stock— — (4)— (1,267)(1,457)— (2,724)
Shares repurchased for tax withholdings on vesting of equity awards— — (1)— (368)— — (368)
Balance as of January 30, 20224 — 410 — 23,083 — (115)22,968 
Net income— — — — — 2,590 — 2,590 
Fair value of partially vested equity awards assumed in connection with an acquisition— — — — 4 — — 4 
Dividends to common stockholders— — — — — (1,676)— (1,676)
Dividends to preferred stockholders— — — — — (75)— (75)
Common stock issued— — 2 — 59 — — 59 
Stock-based compensation— — — — 386 — — 386 
Repurchases of common stock— — (5)— (1,937)(839)— (2,776)
Shares repurchased for tax withholdings on vesting of equity awards— — (1)— (517)— — (517)
Balance as of May 1, 20224 $— 406 $— $21,078 $— $(115)$20,963 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
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BROADCOM INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Overview, Basis of Presentation and Significant Accounting Policies
Overview
Broadcom Inc. (“Broadcom”), a Delaware corporation, is the successor to Broadcom Limited, a company organized under the laws of the Republic of Singapore, or Broadcom-Singapore. As part of the plan to cause the publicly traded parent company of Broadcom to be a Delaware corporation, or the Redomiciliation Transaction, after the close of market trading on April 4, 2018, Broadcom Inc.global technology leader that designs, develops and Broadcom-Singapore completed a statutory scheme of arrangement under Singapore law, or the Scheme of Arrangement. Pursuant to the Scheme of Arrangement, all Broadcom-Singapore ordinary shares outstanding immediately prior to the effective time of the Scheme of Arrangement were exchanged on a one-for-one basis for newly issued shares of Broadcom Inc. common stock and Broadcom-Singapore became an indirect wholly-owned subsidiary of Broadcom Inc.
In conjunction with the Redomiciliation Transaction and pursuant to an amendment to the Amended and Restated Limited Partnership Agreement of Broadcom Cayman L.P., or the Partnership, all outstanding exchangeable limited partnership units, or LP Units, were mandatorily exchanged, or the Mandatory Exchange, on a one-for-one basis for newly issued shares of Broadcom Inc. common stock immediately prior to the effective time of the Scheme of Arrangement. As a result, all limited partners of the Partnership became common stockholders of Broadcom Inc. In addition, all related outstanding special preference shares of Broadcom-Singapore were automatically redeemed pursuant to Broadcom-Singapore’s governing documents upon the Mandatory Exchange of the LP Units. Consequently, the limited partners no longer hold a noncontrolling interest in the Partnership and we subsequently deregistered the Partnership.
The Scheme of Arrangement was accounted for as an exchange of equity interests among entities under common control. All assets and liabilities of Broadcom-Singapore were assumed by Broadcom Inc., resulting in the retention of the historical basis of accounting as if they had always been combined for accounting and financial reporting purposes.
The financial statements for periods prior to April 4, 2018, the effective date of the Redomiciliation Transaction, relate to Broadcom-Singapore and relate to Broadcom Inc. for the period after April 4, 2018. Unless stated otherwise or the context otherwise requires, references to “Broadcom,” “we,” “our” and “us” mean Broadcom Inc. and its consolidated subsidiaries from and after the effective time of the Redomiciliation Transaction and, prior to that time, to our predecessor, Broadcom-Singapore.
We are a leading designer, developer and global supplier ofsupplies a broad range of semiconductor and infrastructure software solutions. We develop semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products. We have a history of innovation in the semiconductor industry and offer thousands of products that are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Our infrastructure software solutions enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms. Our portfolio of infrastructure and security software is designed to modernize, optimize, and secure the most complex hybrid environments, enabling scalability, agility, automation, insights, resiliency and security. We also offer mission critical fibre channel storage area networking (“FC SAN”) products and related software in the form of modules, switches and subsystems incorporating multiple semiconductor products. Unless stated otherwise or the context otherwise requires, references to “Broadcom,” “we,” “our,” and “us” mean Broadcom and its consolidated subsidiaries. We have fourtwo reportable segments: wiredsemiconductor solutions and infrastructure wireless communications, enterprise storage and industrial & other, which align with our principal target markets.software.
Basis of Presentation
We operate on a 52- or 53-week fiscal year ending on the Sunday closest to October 31 in a 52-week year and the first Sunday in November in a 53-week year. Our fiscal year ending November 4, 2018, or October 29, 2023 (“fiscal year 2018,2023”) is a 53-week52-week fiscal year, with our first fiscal quarter containing 14 weeks.year. The first quarter of our fiscal year 20182023 ended on February 4, 2018,January 29, 2023, the second quarter ended on May 6, 2018April 30, 2023 and the third quarter ends on August 5, 2018.July 30, 2023. Our fiscal year ended October 29, 2017, or 30, 2022 (“fiscal year 2017,2022”) was also a 52-week fiscal year.
On November 17, 2017, we acquired Brocade Communications Systems, Inc., or Brocade. The unaudited condensed consolidated financial statements include the results of operations of Brocade commencing as of the acquisition date. See Note 2. “Acquisition of Brocade” for additional information.

The accompanying condensed consolidated financial statements include the accounts of Broadcom and ourits subsidiaries, and have been prepared by us in accordance with generally accepted accounting principles in the United States or GAAP,(“GAAP”) for interim financial information. The financial information included herein is unaudited, and reflects all adjustments which are, in the opinion of our management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. The October 29, 201730, 2022 condensed consolidated balance sheet data were derived from Broadcom-Singapore’sBroadcom’s audited consolidated financial statements included in its Annual Report on Form 10-K for fiscal year 20172022 as filed with the Securities and Exchange Commission, or SEC, but do not include all disclosures required by GAAP.Commission. All intercompany transactionsbalances and balancestransactions have been eliminated in consolidation. The operating results for the fiscal quarter and two fiscal quarters ended May 6, 2018April 30, 2023 are not necessarily indicative of the results that may be expected for fiscal year 2018,2023, or for any other future period.
Significant Accounting Policies
Use of estimates.The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic, and many of these estimates could require increased judgment and carry a higher degree of variability and volatility. Actual results could differ materially from thosethese estimates, and such differences could affect the results of operations reported in future periods.
Reclassifications. Certain reclassifications
2. Revenue from Contracts with Customers
We account for a contract with a customer when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights can be identified, payment terms can be identified, the contract has commercial substance, and it is probable that we will collect substantially all of the consideration to which we are entitled. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer.
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Disaggregation
We have considered (1) information that is regularly reviewed by our Chief Executive Officer, who has been made toidentified as the prior period condensed consolidated statement of cash flows. These reclassifications had no impact on the previously reported net cash activities.
Recently Adopted Accounting Guidance
In the first quarter of fiscal year 2018, we early adopted guidance issuedchief operating decision maker (the “CODM”) as defined by the Financial Accounting Standards Board, or FASB,authoritative guidance on segment reporting, in October 2016 related to the recognition of income tax consequences of an intra-entity transfer of an asset other than inventory. The standard requires a modified-retrospective transition method by means of a cumulative-effect adjustment as of the beginning of the period in which the guidance is adopted. The adoption of this guidance resulted in a decrease in currentevaluating financial performance and long-term prepaid tax expense of $67 million and $199 million, respectively, an increase of $252 million to our accumulated deficit and a decrease of $14 million to our noncontrolling interest.
In the second quarter of fiscal year 2018, we early adopted guidance issued by the FASB in February 2018 that allows companies to reclassify stranded income tax effects resulting from the U.S. Tax Cuts and Jobs Act, or the 2017 Tax Reform Act, from accumulated other comprehensive loss to retained earnings. The stranded income tax effects resulted from the change in the federal tax rate for deferred taxes recorded in accumulated other comprehensive loss. The adoption of this guidance resulted in a cumulative-effect adjustment as of the beginning of the second quarter of fiscal year 2018, which consisted of an increase to our accumulated other comprehensive loss of $16 million, an increase to retained earnings of $15 million and a $1 million increase to noncontrolling interest.
Recent Accounting Guidance Not Yet Adopted
In August 2016, the FASB issued guidance related to the classification of certain transactions on the statement of cash flows. This guidance will be effective for the first quarter(2) disclosures presented outside of our fiscal year 2019 on a retrospective basis;financial statements in our earnings releases and early adoptionused in investor presentations to disaggregate revenues. The principal category we use to disaggregate revenues is permitted. We do not intend to adopt this guidance early and will present our statements of cash flows in accordance with this guidance upon adoption.
In February 2016, the FASB issued guidance related to the accounting for leases, which among other things, requires a lessee to recognize lease assets and lease liabilities on the balance sheet for operating leases. This guidance will be effective for the first quarternature of our fiscal year 2020. The new guidance is required to be applied using a modified retrospective approach. We are evaluating the impact this guidance will have onproducts and subscriptions and services, as presented in our condensed consolidated financial statements.statements of operations. In addition, revenues by reportable segment are presented in Note 10. “Segment Information.”
In May 2014, the FASB issued guidance that outlines a single comprehensive model for entities to use in accounting forThe following tables present revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The new standard creates a single sourcedisaggregated by type of revenue guidance under GAAP, eliminating industry-specific guidance. The underlying principle ofand by region for the standard is toperiods presented:
Fiscal Quarter Ended April 30, 2023
AmericasAsia PacificEurope, the Middle East and AfricaTotal
(In millions)
Products$780 $5,458 $503 $6,741 
Subscriptions and services (a)
1,454 126 412 1,992 
Total$2,234 $5,584 $915 $8,733 
Fiscal Quarter Ended May 1, 2022
AmericasAsia PacificEurope, the Middle East and AfricaTotal
(In millions)
Products$658 $5,260 $499 $6,417 
Subscriptions and services (a)
1,154 125 407 1,686 
Total$1,812 $5,385 $906 $8,103 
Two Fiscal Quarters Ended April 30, 2023
AmericasAsia PacificEurope, the Middle East and AfricaTotal
(In millions)
Products$1,389 $11,395 $1,039 $13,823 
Subscriptions and services (a)
2,684 326 815 3,825 
Total$4,073 $11,721 $1,854 $17,648 
Two Fiscal Quarters Ended May 1, 2022
AmericasAsia PacificEurope, the Middle East and AfricaTotal
(In millions)
Products$1,206 $10,244 $1,020 $12,470 
Subscriptions and services (a)
2,263 253 823 3,339 
Total$3,469 $10,497 $1,843 $15,809 
_______________
(a)Subscriptions and services predominantly include software licenses with termination for convenience clauses.
Although we recognize revenue for the majority of our products when title and control transfer in Penang, Malaysia, we disclose net revenue by region based primarily on the geographic shipment location or delivery location specified by our distributors, original equipment manufacturer customers, contract manufacturers, channel partners, or software customers.
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Contract Balances
April 30,
2023		October 30,
2022
(In millions)
Contract Assets$401 $128 
Contract Liabilities$3,793 $3,341 
Changes in our contract assets and contract liabilities primarily result from the timing difference between our performance and the customer’s payment. We fulfill our obligations under a contract with a customer obtains control of promised goods orby transferring products and services at an amount that reflects the consideration that is expected to be received in exchange for those goodsconsideration from the customer. We recognize a contract asset when we transfer products or services to a customer and the right to consideration is conditional on something other than the passage of time. Accounts receivable are recorded when the customer has been billed or the right to consideration is unconditional. We recognize contract liabilities when we have received consideration or an amount of consideration is due from the customer and we have a future obligation to transfer products or services. An entity should apply a five-step approachContract liabilities include amounts billed or collected and advanced payments on contracts or arrangements, which may include termination for recognizingconvenience provisions. The amount of revenue as follows: (i) identifyrecognized during the two fiscal quarters ended April 30, 2023 that was included in the contract with a customer; (ii) identifyliabilities balance as of October 30, 2022 was $2,287 million. The amount of revenue recognized during the two fiscal quarters ended May 1, 2022 that was included in the contract liabilities balance as of October 31, 2021 was $1,974 million.
Remaining Performance Obligations
Revenue allocated to remaining performance obligations in the contract; (iii) determine the transaction price; (iv) allocaterepresents the transaction price allocated to unsatisfied or partially unsatisfied performance obligations. Remaining performance obligations include unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, but do not include contracts for software, subscriptions or services where the customer is not committed. The customer is not considered committed when termination for convenience without payment of a substantive penalty exists, either contractually or through customary business practice. The majority of our customer software contracts include termination for convenience clauses without a substantive penalty and are not considered committed. Additionally, as a practical expedient, we have not included contracts that have an original duration of one year or less, nor have we included contracts with sales-based or usage-based royalties promised in exchange for a license of intellectual property (“IP”).
Certain multi-year customer contracts primarily in our semiconductor solutions segment contain firmly committed amounts and the remaining performance obligations under these contracts as of April 30, 2023 were approximately $21.4 billion. We expect approximately 27% of this amount to be recognized as revenue over the next 12 months. Although the majority of our software contracts are not deemed to be committed, our customers generally do not exercise their termination for convenience rights. In addition, the majority of our contracts for products, subscriptions and services have a duration of one year or less. Accordingly, our remaining performance obligations disclosed above are not indicative of revenue for future periods.
3. Pending Acquisition of VMware, Inc.
On May 26, 2022, we entered into an Agreement and Plan of Merger (the “VMware Merger Agreement”) to acquire all of the outstanding shares of VMware, Inc. (“VMware”) in a cash-and-stock transaction (the “VMware Merger”) that values VMware at approximately $61 billion based on the closing price of Broadcom common stock on May 25, 2022. We will also assume VMware’s closing date outstanding debt, net of expected cash.
Under the terms of the VMware Merger Agreement, each share of VMware common stock issued and outstanding immediately prior to the performance obligations in the contract; and (v) recognize revenue when, or as, the entity satisfies a performance obligation. The standard also requires increased disclosures including the nature, amount, timing, and uncertainty of revenues and cash flows related to contracts with customers.

The standard allows two methods of adoption: (i) retrospectively to each prior period presented (“full retrospective method”), or (ii) retrospectively with the cumulative effect recognized in retained earnings aseffective time of the date of adoption ("modified retrospective method"). We planVMware Merger will be indirectly converted into the right to adopt the new standard using the modified retrospective methodreceive, at the beginningelection of the first quarterholder of fiscal year 2019. We have established a cross-functional teamsuch share of VMware common stock, either $142.50 in cash, without interest, or 0.2520 shares of Broadcom common stock. The stockholder election will be subject to assessproration, such that the potential impacttotal number of shares of VMware common stock entitled to receive cash and the total number of shares of VMware common stock entitled to receive Broadcom common stock, will, in each case, be equal to 50% of the new revenue standardaggregate number of shares of VMware common stock issued and are on schedule in establishing new accounting policies, processes, and internal controls necessaryoutstanding immediately prior to support the requirementseffective time of the new standard. While we are still finalizing our analysis to quantify the adoption impact of the provisions of the new standard, the exact impact of the new standard will be dependent on facts and circumstances at adoption and could vary from quarter to quarter.
2. Acquisition of Brocade
On November 17, 2017, or the Brocade Acquisition Date, we acquired Brocade, or the BrocadeVMware Merger. Brocade was a supplier of networking hardware, software and services, including Fibre Channel Storage Area Network, or FC SAN, solutions and Internet Protocol Networking, or IP Networking, solutions. We acquired Brocade to enhance our position as a provider of enterprise storage connectivity solutions, broaden our portfolio for enterprise storage, and to increase our ability to address the evolving needs of our original equipment manufacturer, or OEM, customers. We financed the Brocade Merger with a portion of the net proceeds from the issuance of the 2017 Senior Notes, as defined and discussed in further detail in Note 6. “Borrowings,” as well as cash on hand.
Purchase Consideration
  (In millions)
Cash paid for outstanding Brocade common stock $5,298
Cash paid by Broadcom to retire Brocade’s term loan 701
Cash paid for Brocade equity awards 31
Fair value of partially vested assumed equity awards 8
Total purchase consideration 6,038
Less: cash acquired 1,250
Total purchase consideration, net of cash acquired $4,788
We assumedwill assume all unvested Brocade stock options,outstanding VMware restricted stock units, or RSUs,unit (“RSU”) awards and performance stock units, or PSUs,unit awards held by continuing employees. The portionassumed awards will be converted into RSU awards for shares of Broadcom common stock. All outstanding in-the-money VMware stock options and RSU awards held by non-employee directors will be accelerated and converted into the right to receive cash and shares of Broadcom common stock, in equal parts.
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Effective upon the effective time of the fair value of partially vested equity awards associated with prior service of Brocade employees represents a componentVMware Merger, one member of the total consideration as presented above. All vested in-the-money Brocade stock options, after giving effectVMware Board of Directors, to any acceleration, were cashed out uponbe mutually agreed by us and VMware, will be added to our Board of Directors.
In connection with the completionexecution of the Brocade Merger. RSUsVMware Merger Agreement, we entered into a commitment letter on May 26, 2022, with certain financial institutions that committed to provide, subject to the terms and PSUs were valued based on our share price asconditions of the Brocade Acquisition Date.
We allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The fair valuecommitment letter, a senior unsecured bridge facility in an aggregate principal amount of identified intangible assets acquired was based on estimates and assumptions made by management at the time of acquisition. As additional information becomes available, such as finalization of the estimated fair value of tax related items, we may further revise our preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from the Brocade Acquisition Date). Any such revisions or changes may be material.

$32 billion.
The following table presents our preliminary allocation of the total purchase price, net of cash acquired:
  Estimated Fair Value
  (In millions)
Current assets $1,294
Goodwill 2,189
Intangible assets 3,396
Other long-term assets 79
Total assets acquired 6,958
Current portion of long-term debt (856)
Other current liabilities (370)
Long-term debt (38)
Other long-term liabilities (906)
Total liabilities assumed (2,170)
Fair value of net assets acquired $4,788
Goodwill was primarily attributable to the assembled workforce and anticipated synergies and economies of scale expected from the integration of the Brocade business. The synergies include certain cost savings, operating efficiencies, and other strategic benefits projected to be achieved as a result of the Brocade Merger. GoodwillVMware Merger, which is not expected to be deductible for tax purposes.
Current assets included assets held-for-sale related to Brocade’s IP Networking business, which was not aligned with our strategic objectives and was sold duringcompleted in our fiscal quarter ended February 4, 2018. The saleyear 2023, is subject to satisfaction or waiver of Brocade’s IP Networking business is discussed further in Note 3. “Supplemental Financial Information.” Current assets also included assets held-for-sale for Brocade’s headquarters, which was sold for $224 million duringcustomary closing conditions, including the first quarter of fiscal year 2018, for no gainexpiration or loss. We leased back a portiontermination of the campus at market rental rates for six months.
Revenue from the Brocade acquisition has been included primarily in our enterprise storage segment. Transaction costs of $8 million and $29 million related to the Brocade Merger were included in selling, general and administrative expense for the fiscal quarter and two fiscal quarters ended May 6, 2018, respectively.
Intangible Assets
  Fair Value Weighted-Average Amortization Periods
  (In millions) (In years)
Developed technology $2,925
 10
Customer contracts and related relationships 255
 11
Trade name and other 61
 6
Total identified finite-lived intangible assets 3,241
  
In-process research and development 155
 N/A
Total identified intangible assets $3,396
  
Developed technology relates to products for FC SAN applications. We valued the developed technology using the multi-period excess earnings methodwaiting period under the income approach. This method reflectsHart-Scott-Rodino Antitrust Improvement Act of 1976 and clearance under the present valueantitrust laws of the projected cash flows that are expected to be generated byEuropean Union and certain other jurisdictions. On October 3, 2022, we registered approximately 59 million shares of our common stock. On November 4, 2022, VMware stockholders adopted the developed technology less charges representing the contribution of other assets to those cash flows. The economic useful life was determined based on the technology cycle related toVMware Merger Agreement. We and VMware each developed technology, as well as the cash flows over the forecast period.
Customer contracts and related relationships represent the fair value of future projected revenue that will be derived from sales of products to existing customers of Brocade. Customer contracts and related relationships were valued using the distributor method and the with-and-without-methodhave termination rights under the income approach. The distributor method determines the fair value by measuring the economic profits generated by an intermediary, which in our case represents OEM customers. In the with-and-without method, the fair value was measured by the difference between the present valuesVMware Merger Agreement and, under specified circumstances, upon termination of the cash flows withagreement, we and withoutVMware would be required to pay the existing customers in place over the periodother a termination fee of time necessary to reacquire the customers. In both instances, the economic useful life was determined based on historical customer turnover rates.$1.5 billion.

Trade name relates to the “Brocade” trade name. The fair value was determined by applying the relief-from-royalty method under the income approach. This valuation method is based on the application of a royalty rate to forecasted revenue under the trade name. The economic useful life was determined based on the expected life of the trade name and the cash flows anticipated over the forecasted periods.
The fair value of in-process research and development, or IPR&D, was determined using the multi-period excess earnings method under the income approach. This method reflects the present value of the projected cash flows that are expected to be generated by the IPR&D, less charges representing the contribution of other assets to those cash flows.
We believe the amounts of purchased intangible assets recorded above represent the fair values of, and approximate the amounts a market participant would pay for, these intangible assets as of the Brocade Acquisition Date.
The following table summarizes the details of IPR&D by category:
Description IPR&D Percentage of Completion Estimated Cost to Complete 
Expected Release Date
(By Fiscal Year)
         
  (Dollars in millions)
Directors $64
 72% $45
 2019
Switches $50
 81% $21
 2018
Embedded $31
 74% $22
 2019
Networking software $10
 73% $27
 2018
The discount rate of 11% was applied to the projected cash flows to reflect the risk related to these IPR&D projects. The discount rate represents a premium of 1% over the weighted-average cost of capital to reflect the higher risk and uncertainty of the cash flows for IPR&D relative to the overall businesses.
Unaudited Pro Forma Information
The following unaudited pro forma financial information presents combined results of operations for each of the periods presented, as if Brocade had been acquired as of the beginning of fiscal year 2017. The unaudited pro forma information includes adjustments to amortization and depreciation for intangible assets and property, plant and equipment acquired, adjustments to stock-based compensation expense, the purchase accounting effect on inventory acquired, restructuring charges related to the acquisition and transaction costs. For fiscal year 2017, non-recurring pro forma adjustments directly attributable to the Brocade Merger included (i) the purchase accounting effect of inventory acquired of $70 million and (ii) acquisition costs of $76 million. The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2017 or of the results of our future operations of the combined business.
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions)
Pro forma net revenue $5,017
 $4,662
 $10,464
 $9,301
Pro forma net income attributable to common stock $3,744
 $442
 $10,077
 $554
3.4. Supplemental Financial Information
Cash Equivalents
Cash equivalents included $4,362$3,018 million and $6,002$3,915 million of time deposits as of May 6, 2018 and October 29, 2017, respectively. As of May 6, 2018 and October 29, 2017, cash equivalents also included $402$2,414 million and $401$2,365 million of money-market funds as of April 30, 2023 and October 30, 2022, respectively. For time deposits, carrying value approximates fair value due to the short-term nature of the instruments. The fair value of money-market funds, which was consistent with their carrying value, was determined using unadjusted prices in active, accessible markets for identical assets, and as such, they were classified as Level 1 assets in the fair value hierarchy.

Accounts Receivable Factoring
In connection with a factoring agreement with a third-party financial institution, weWe sell certain of our trade accounts receivable on a non-recourse basis.basis to third-party financial institutions pursuant to factoring arrangements. We account for these transactions as sales of receivables and present cash proceeds as cash provided by operating activities in the condensed consolidated statements of cash flows. Total trade accounts receivable sold under the factoring agreementarrangements were $57$900 million and $1,925 million during the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively, and $900 million and $2,100 million during the fiscal quarter and two fiscal quarters ended May 6, 2018.1, 2022, respectively. Factoring fees for the sales of receivables were recorded in other income (expense), net and were not material.material for any of the periods presented.
Inventory
April 30,
2023		October 30,
2022
(In millions)
Finished goods$577 $780 
Work-in-process1,038 966 
Raw materials271 179 
Total inventory$1,886 $1,925 
Other Current Assets
April 30,
2023		October 30,
2022
(In millions)
Prepaid expenses$676 $864 
Other725 341 
Total other current assets$1,401 $1,205 
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  May 6,
2018		 October 29,
2017
     
  (In millions)
Finished goods $510
 $562
Work-in-process 542
 696
Raw materials 183
 189
Total inventory $1,235
 $1,447
Other Current Liabilities
April 30,
2023		October 30,
2022
(In millions)
Contract liabilities$3,427 $2,931 
Tax liabilities650 680 
Interest payable382 393 
Other470 408 
Total other current liabilities$4,929 $4,412 
Other current assets
  May 6,
2018		 October 29,
2017
     
  (In millions)
Prepaid expenses $174
 $440
Other receivables 87
 155
Other 42
 129
Total other current assets $303
 $724
Accrued Rebate Activity
  Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017
     
  (In millions)
Beginning balance $124
 $317
Charged as a reduction of revenue 64
 120
Reversal of unclaimed rebates (10) (36)
Payments (125) (222)
Ending balance $53
 $179
We recorded customer rebate charges of $25 million and $56 million in the fiscal quarters ended May 6, 2018 and April 30, 2017, respectively.
Other Long-Term Liabilities
April 30,
2023		October 30,
2022
(In millions)
Unrecognized tax benefits$2,841 $3,229 
Other1,114 1,184 
Total other long-term liabilities$3,955 $4,413 
  May 6,
2018		 October 29,
2017
     
  (In millions)
Deferred tax liabilities (a)
 $266
 $10,019
Unrecognized tax benefits (a) (b)
 2,700
 1,011
Other 298
 242
Total other long-term liabilities $3,264
 $11,272

(a) Refer to Note 8. “Income Taxes” for additional information regarding these balances.
(b) Includes accrued interest and penalties.

Discontinued Operations
On December 1, 2017, we sold Brocade’s IP Networking business to ARRIS International plc, or ARRIS, for cash consideration of $800 million, adjusted for closing working capital balances. In connection with this sale, we indemnified ARRIS for $116 million of potential income tax liabilities. We provided transitional services as short-term assistance to ARRIS in assuming the operations of the purchased business. We do not have any material continuing involvement with this business and have presented its results in discontinued operations.
The following table summarizes the selected financial information of discontinued operations:
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions)
Net revenue $—
 $3
 $18
 $5
Loss from discontinued operations $(3) $(4) $(18) $(9)
Supplemental Cash Flow Information
Fiscal Quarter EndedTwo Fiscal Quarters Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
(In millions)
Cash paid for interest$397 $459 $758 $699 
Cash paid for income taxes$891 $240 $1,164 $426 
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions)
Cash paid for interest $1
 $1
 $233
 $103
Cash paid for income taxes $87
 $121
 $196
 $218
At May 6, 2018 and October 29, 2017, we had $27 million and $122 million, respectively, of unpaid purchases of property, plant and equipment included in accounts payable and other current liabilities.
4. Goodwill and Intangible Assets
Goodwill
  Wired Infrastructure Wireless Communications Enterprise Storage Industrial & Other Total
           
  (In millions)
Balance as of October 29, 2017 $17,622
 $5,945
 $995
 $144
 $24,706
Brocade Merger 70
 —
 2,119
 —
 2,189
Other acquisition 13
 —
 —
 —
 13
Balance as of May 6, 2018 $17,705
 $5,945
 $3,114
 $144
 $26,908
Derivative Instruments
During the two fiscal quartersquarter ended May 6, 2018,January 29, 2023 and fiscal year 2022, we madeentered into treasury rate lock contracts with original maturities of approximately one immaterial acquisitionyear to hedge variability of cash flows due to changes in addition to the Brocade Merger.benchmark interest rate of anticipated future debt issuances. These treasury rate locks are designated and accounted for as cash flow hedging instruments. As of April 30, 2023 and October 30, 2022, the total notional amounts of these contracts were $5.5 billion and $1.3 billion, respectively. As of April 30, 2023, the fair value of $120 million was recorded in other current liabilities. As of October 30, 2022, the fair value of $47 million was recorded in other long-term assets. The change in fair value was recorded as a component of other comprehensive income (loss), net of tax, in our condensed consolidated statements of comprehensive income.

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5. Intangible Assets
Gross Carrying
Amount		Accumulated
Amortization		Net Book
Value
(In millions)
As of April 30, 2023:   
Purchased technology$19,450 $(16,396)$3,054 
Customer contracts and related relationships7,066 (5,147)1,919 
Order backlog484 (432)52 
Trade names700 (405)295 
Other174 (89)85 
Intangible assets subject to amortization27,874 (22,469)5,405 
In-process research and development29 — 29 
Total$27,903 $(22,469)$5,434 
As of October 30, 2022:   
Purchased technology$19,450 $(15,422)$4,028 
Customer contracts and related relationships7,066 (4,535)2,531 
Order backlog484 (382)102 
Trade names700 (372)328 
Other174 (81)93 
Intangible assets subject to amortization27,874 (20,792)7,082 
In-process research and development29 — 29 
Total$27,903 $(20,792)$7,111 
  
Gross Carrying
Amount
 
Accumulated
Amortization
 
Net Book
Value
       
  (In millions)
As of May 6, 2018:      
Purchased technology $15,770
 $(5,295) $10,475
Customer contracts and related relationships 1,792
 (770) 1,022
Trade names 578
 (143) 435
Other 151
 (37) 114
Intangible assets subject to amortization 18,291
 (6,245) 12,046
IPR&D 300
 —
 300
Total $18,591
 $(6,245) $12,346
       
As of October 29, 2017:      
Purchased technology $12,724
 $(4,265) $8,459
Customer contracts and related relationships 4,240
 (3,100) 1,140
Trade names 528
 (117) 411
Other 135
 (25) 110
Intangible assets subject to amortization 17,627
 (7,507) 10,120
IPR&D 712
 —
 712
Total $18,339
 $(7,507) $10,832
Based on the amount of intangible assets subject to amortization at May 6, 2018,as of April 30, 2023, the expected amortization expense for each of the next five years and thereafter was as follows:
Fiscal Year:Expected Amortization Expense
(In millions)
2023 (remainder)$1,578 
20242,388 
2025681 
2026344 
2027216 
Thereafter198 
Total$5,405 
Fiscal Year: Expected Amortization Expense
  (In millions)
2018 (remainder) $1,669
2019 2,872
2020 2,424
2021 1,930
2022 1,425
Thereafter 1,726
Total $12,046
The weighted-average remaining amortization periods remaining by intangible asset category were as follows:
Amortizable intangible assets:April 30,
2023
Amortizable intangible assets:May 6,
2018(In years)
Purchased technology(In years)3
Purchased technology6
Customer contracts and related relationships62
Trade namesOrder backlog121
OtherTrade names98
Other8
13
5.
Table of Contents
6. Net Income Per Share
Basic net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period.

DilutedPotentially dilutive shares outstanding include the dilutive effect of in-the-money stock options,unvested RSUs and employee stock purchase plan rights under the Broadcom Limited Second Amended and RestatedInc. Employee ShareStock Purchase Plan as amended, or ESPP (together(“ESPP”), (collectively referred to as equity awards). Diluted“equity awards”), as well as 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value per share (“Mandatory Convertible Preferred Stock”), which was all converted into shares also includedof our common stock before the end of fiscal year 2022. Potentially dilutive shares issuable upon exchangewhose effect would have been antidilutive are excluded from the computation of the LP Units for the periods presented prior to the effective time of Mandatory Exchange (refer to Note 7. “Stockholders’ Equity” for additional information).diluted net income per share.
The dilutive effect of equity awards is calculated based on the average stock price for each fiscal period, using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options and to purchasepurchasing shares under the ESPP and the amount of stock-based compensation costexpense for future service that we have not yet recognized are collectively assumed to be used to repurchase shares.
The dilutive effect of the LP Units wasMandatory Convertible Preferred Stock is calculated using the if-converted method. The if-converted method assumedassumes that the LP Unitsthese securities were converted at the beginning of the reporting period to the extent that the effect is dilutive.
For each of the fiscal quarter and includedtwo fiscal quarters ended May 1, 2022, diluted net income attributable to noncontrolling interest forper share excluded the period.potentially dilutive effect of 12 million shares of common stock issuable upon the conversion of Mandatory Convertible Preferred Stock as their effect was antidilutive.

The following is a reconciliation of the numerators and denominators of the basic and diluted net income per share computations for the periods presented:
Fiscal Quarter EndedTwo Fiscal Quarters Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
(In millions, except per share data)
Numerator:
Net income$3,481 $2,590 $7,255 $5,062 
Dividends on preferred stock— (75)— (149)
Net income attributable to common stock$3,481 $2,515 $7,255 $4,913 
Denominator:
Weighted-average shares outstanding - basic415408417410
Dilutive effect of equity awards12161116
Weighted-average shares outstanding - diluted427424428426
Net income per share attributable to common stock:
Basic$8.39 $6.16 $17.40 $11.98 
Diluted$8.15 $5.93 $16.95 $11.53 

14
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
Numerator - Basic: (In millions, except per share data)
Income from continuing operations $3,736
 $468
 $10,317
 $725
Less: Income from continuing operations attributable to noncontrolling interest 15
 24
 352
 37
Income from continuing operations attributable to common stock 3,721
 444
 9,965
 688
         
Loss from discontinued operations, net of income taxes (3) (4) (18) (9)
Less: Loss from discontinued operations, net of income taxes, attributable to noncontrolling interest —
 —
 (1) —
Loss from discontinued operations, net of income taxes, attributable to common stock (3) (4) (17) (9)
         
Net income attributable to common stock $3,718
 $440
 $9,948
 $679
         
Numerator - Diluted:        
Income from continuing operations $3,736
 $468
 $10,317
 $725
Loss from discontinued operations, net of income taxes (3) (4) (18) (9)
Net income $3,733
 $464
 $10,299
 $716
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7. Borrowings
Effective Interest RateApril 30,
2023		October 30,
2022
(Dollars in millions)
April 2022 Senior Notes - fixed rate
4.000% notes due April 20294.17 %$750 $750 
4.150% notes due April 20324.30 %1,200 1,200 
4.926% notes due May 20375.33 %2,500 2,500 
4,450 4,450 
September 2021 Senior Notes - fixed rate
3.137% notes due November 20354.23 %3,250 3,250 
3.187% notes due November 20364.79 %2,750 2,750 
6,000 6,000 
March 2021 Senior Notes - fixed rate
3.419% notes due April 20334.66 %2,250 2,250 
3.469% notes due April 20344.63 %3,250 3,250 
5,500 5,500 
January 2021 Senior Notes - fixed rate
1.950% notes due February 20282.10 %750 750 
2.450% notes due February 20312.56 %2,750 2,750 
2.600% notes due February 20332.70 %1,750 1,750 
3.500% notes due February 20413.60 %3,000 3,000 
3.750% notes due February 20513.84 %1,750 1,750 
10,000 10,000 
June 2020 Senior Notes - fixed rate
3.459% notes due September 20264.19 %752 752 
4.110% notes due September 20285.02 %1,118 1,118 
1,870 1,870 
May 2020 Senior Notes - fixed rate
2.250% notes due November 20232.40 %105 105 
3.150% notes due November 20253.29 %900 900 
4.150% notes due November 20304.27 %1,856 1,856 
4.300% notes due November 20324.39 %2,000 2,000 
4,861 4,861 
April 2020 Senior Notes - fixed rate
5.000% notes due April 20305.18 %606 606 
April 2019 Senior Notes - fixed rate
3.625% notes due October 20243.98 %622 622 
4.750% notes due April 20294.95 %1,655 1,655 
2,277 2,277 
2017 Senior Notes - fixed rate
2.650% notes due January 20232.78 %— 260 
3.625% notes due January 20243.74 %829 829 
3.125% notes due January 20253.23 %495 495 
3.875% notes due January 20274.02 %2,922 2,922 
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Denominator:        
Weighted-average shares outstanding - basic 421
 403
 415
 401
Dilutive effect of equity awards 13
 16
 15
 16
Exchange of noncontrolling interest 14
 23
 18
 23
Weighted-average shares outstanding - diluted 448
 442
 448
 440
         
Basic income (loss) per share:        
Income per share from continuing operations $8.84
 $1.10
 $24.01
 $1.72
Loss per share from discontinued operations (0.01) (0.01) (0.04) (0.03)
Net income per share $8.83
 $1.09
 $23.97
 $1.69
         
Diluted income (loss) per share:        
Income per share from continuing operations $8.34
 $1.06
 $23.03
 $1.65
Loss per share from discontinued operations (0.01) (0.01) (0.04) (0.02)
Net income per share $8.33
 $1.05
 $22.99
 $1.63
Effective Interest RateApril 30,
2023		October 30,
2022
(Dollars in millions)
3.500% notes due January 20283.60 %777 777 
5,023 5,283 
Assumed CA Senior Notes - fixed rate
4.500% notes due August 20234.10 %143 143 
4.700% notes due March 20275.15 %215 215 
358 358 
Other senior notes - fixed rate
3.500% notes due August 20243.55 %7 7 
4.500% notes due August 20344.55 %6 6 
13 13 
Total principal amount outstanding$40,958 $41,218 
Current portion of principal amount outstanding$1,077 $403 
Short-term finance lease liabilities40 37 
Total current portion of long-term debt$1,117 $440 
Non-current portion of principal amount outstanding$39,881 $40,815 
Long-term finance lease liabilities12 22 
Unamortized discount and issuance costs(1,699)(1,762)
Total long-term debt$38,194 $39,075 

6. Borrowings
  As of May 6, 2018: As of October 29, 2017:
  Effective Interest Rate Aggregate Principal Amount Effective Interest Rate Aggregate Principal Amount
         
  (In millions, except for percentages)
2017 Senior Notes        
Fixed rate 2.375% notes due January 2020 2.615% $2,750
 2.615% $2,750
Fixed rate 2.200% notes due January 2021 2.406% 750
 2.406% 750
Fixed rate 3.000% notes due January 2022 3.214% 3,500
 3.214% 3,500
Fixed rate 2.650% notes due January 2023 2.781% 1,000
 2.781% 1,000
Fixed rate 3.625% notes due January 2024 3.744% 2,500
 3.744% 2,500
Fixed rate 3.125% notes due January 2025 3.234% 1,000
 3.234% 1,000
Fixed rate 3.875% notes due January 2027 4.018% 4,800
 4.018% 4,800
Fixed rate 3.500% notes due January 2028 3.596% 1,250
 3.596% 1,250
    17,550
   17,550
Assumed BRCM Senior Notes        
Fixed rate 2.70% notes due November 2018 2.70% 117
 2.70% 117
Fixed rate 2.50% - 4.50% notes due August 2022 - August 2034 2.50% - 4.50%
 22
 2.50% - 4.50%
 22
    139
   139
Assumed Brocade Convertible Notes        
Fixed rate 1.375% convertible notes due January 2020 0.628% 38
   —
Total principal amount outstanding   17,727
   17,689
Less: Unaccreted discount and unamortized debt issuance costs   (129)   (141)
Total carrying value of debt   $17,598
   $17,548
Senior Notes and Assumed BRCM Senior NotesCredit Agreement
In fiscal year 2017, Broadcom Corporation, or BRCM, and Broadcom Cayman Finance Limited, or together with BRCM referred to as the Subsidiary Issuers, completed the issuance and sale of senior unsecured notes, or the 2017 Senior Notes, in an aggregate principal amount of $17,550 million. Our 2017 Senior Notes were fully and unconditionally guaranteed, jointly and severally, on an unsecured, unsubordinated basis by Broadcom-Singapore and the Partnership, subject to certain release conditions described in the indentures governing the 2017 Senior Notes, or the 2017 Indentures. On April 9, 2018, Broadcom Inc., or Parent Guarantor, became a guarantor of the 2017 Senior Notes andJanuary 2021, we entered into supplemental indentures with the Subsidiary Issuers and the trusteea credit agreement (the “Credit Agreement”), which provides for a five-year $7.5 billion unsecured revolving credit facility, of the 2017 Senior Notes. At that time, Broadcom-Singapore, a guarantor atwhich $500 million is available for the issuance of multi-currency letters of credit. The issuance of letters of credit and certain other instruments would reduce the 2017 Senior Notes, became an indirect wholly-owned subsidiary of Broadcom Inc. and a subsidiary guarantor, or Subsidiary Guarantor. In addition,aggregate amount otherwise available under our revolving credit facility for revolving loans. Subject to the Partnership was released from its guaranteeterms of the 2017 Senior Notes under each of the 2017 Indentures in accordance with their terms. Each series of 2017 Senior Notes pays interest semi-annually in cash in arrears on January 15Credit Agreement, we are permitted to borrow, repay and July 15 of each year. As of May 6, 2018 and October 29, 2017, we accrued interest payable of $194 million and $136 million, respectively.
We may redeem all or a portion of our 2017 Senior Notesreborrow revolving loans at any time prior to their maturity, subject to a specified make-whole premium as set forththe earlier of (a) January 19, 2026 and (b) the date of termination in the 2017 Indentures. In the event of a change of control triggering event, holders of our 2017 Senior Notes will have the right to require us to purchase for cash all or a portion of their 2017 Senior Notes at a redemption price of 101%whole of the aggregate principal amount of such 2017 Senior Notes plus accrued and unpaid interest. The 2017 Indentures also contain covenants that restrict, among other things,revolving lenders’ commitments under the ability of Broadcom andCredit Agreement. We had no borrowings outstanding under our subsidiaries to incur certain secured debt and consummate certain sale and leaseback transactions, and the ability of the Parent Guarantor, the Subsidiary Issuers and the Subsidiary Guarantor to merge, consolidaterevolving credit facility at either April 30, 2023 or sell all or substantially all of their assets.October 30, 2022.

Commercial Paper
In connection with the issuance of the 2017 Senior Notes,February 2019, we entered into registration rights agreements,established a commercial paper program pursuant to which we were obligated to use commercially reasonable efforts to file with the SEC, and cause to be declared effective, a registration statement with respect to an offer to exchange, or the Exchange Offer, each series of 2017 Senior Notes formay issue unsecured commercial paper notes that are registered with the SEC, or the Registered Notes, with substantially identical terms. On January 9, 2018, we launched the Exchange Offer and on February 21, 2018, substantially all of the 2017 Senior Notes were tendered and exchanged for Registered Notes(“Commercial Paper”) in the Exchange Offer.
We were in compliance with all of the covenants related to the 2017 Senior Notes and senior unsecured notes assumed in the connection with acquisition of BRCM, or the Assumed BRCM Senior Notes, as of May 6, 2018.
Assumed Brocade Debt
As a result of the Brocade Merger, we assumed $575 million in aggregate principal amount of Brocade’s 1.375% convertible senior unsecured notes due 2020, orup to $2 billion outstanding at any time with maturities of up to 397 days from the Assumed Brocade Convertible Notes. The Brocade Merger was a “fundamental change” as well as a “make-whole fundamental change” as defineddate of issue. Commercial Paper is sold under customary terms in the terms of the indenture governing the Assumed Brocade Convertible Notes. Accordingly, the holders of the Assumed Brocade Convertible Notes received the right to require us to repurchase their notes for cash. In the first quarter of fiscal year 2018, we repurchased $537 million in aggregate principal amount for $548 millioncommercial paper market and may be issued at a conversion ratediscount from par or, alternatively, may be sold at par and bear interest at rates dictated by market conditions at the time of $1,018their issuance. The discount associated with the Commercial Paper is amortized to interest expense over its term. Outstanding Commercial Paper reduces the amount that would otherwise be available to borrow for each $1,000 of principal surrendered for conversion. As of May 6, 2018, thegeneral corporate purposes under our revolving credit facility. We had no Commercial Paper outstanding principal amount of the Assumed Brocade Convertible Notes was $38 million. The remaining outstanding Assumed Brocade Convertible Notes are convertible into cash at a conversion rate of $812 for each $1,000 of principal. We were in compliance with all of the covenants related to the Assumed Brocade Convertible Notes as of May 6, 2018.
We also assumed $300 million in aggregate principal amount of Brocade’s 4.625% senior unsecured notes due 2023. On January 16, 2018, we called and redeemed all of these outstanding notes for a total payment of $308 million, including the redemption price.either April 30, 2023 or October 30, 2022.
Fair Value of Debt
As of May 6, 2018,April 30, 2023, the estimated aggregate fair value of the 2017 Senior Notes, the Assumed BRCM Senior Notes and the Assumed Brocade Convertible Notesdebt was $17,024 million and$35,573 million. The fair value of our senior notes was primarily classified as Level 2 as we useddetermined using quoted prices from less active markets. All of our debt obligations are categorized as Level 2 instruments.
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Table of Contents
Future Principal Payments of Debt
The future scheduled principal payments for the outstanding 2017 Senior Notes, Assumed BRCM Senior Notes and Assumed Brocade Convertible Notesof debt as of May 6, 2018April 30, 2023 were as follows:
Fiscal Year: Future Scheduled Principal Payments
  (In millions)
2018 (remainder) $117
2019 —
2020 2,788
2021 750
2022 3,509
Thereafter 10,563
Total $17,727
7. Stockholders’ Equity
Completion of the Redomiciliation Transaction
For the period prior to the Redomiciliation Transaction, our stockholders’ equity reflects Broadcom-Singapore’s outstanding ordinary shares, all of which were publicly traded on the NASDAQ Global Select Market. After the close of market trading on April 4, 2018, pursuant to the Scheme of Arrangement, all Broadcom-Singapore ordinary shares outstanding immediately prior to the effective time of Scheme of Arrangement were exchanged on a one-for-one basis for newly issued shares of Broadcom Inc. common stock and Broadcom-Singapore became an indirect wholly-owned subsidiary of Broadcom Inc.

In conjunction with the Redomiciliation Transaction and pursuant to the Mandatory Exchange, immediately prior to the effective time of the Scheme of Arrangement all outstanding LP Units held by the limited partners were mandatorily exchanged for approximately 22 million newly issued shares of Broadcom Inc. common stock on a one-for-one basis. As a result, all limited partners of the Partnership have become common stockholders of Broadcom Inc. In addition, all related outstanding special preference shares of Broadcom-Singapore were automatically redeemed pursuant to Broadcom-Singapore’s governing documents upon the Mandatory Exchange.
Noncontrolling Interest
Fiscal Year:Future Scheduled Principal Payments
(In millions)
2023 (remainder)$143 
20241,563 
2025495 
20261,652 
20273,137 
Thereafter33,968 
Total$40,958 
As of April 30, 2023 and October 29, 201730, 2022, we were in compliance with all debt covenants.
8. Stockholders’ Equity
Cash Dividends Declared and immediately prior to the effective timePaid
Fiscal Quarter EndedTwo Fiscal Quarters Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
(In millions, except per share data)
Dividends per share to common stockholders$4.60 $4.10 $9.20 $8.20 
Dividends to common stockholders$1,914 $1,676 $3,840 $3,365 
Dividends per share to preferred stockholders$— $20.00 $— $40.00 
Dividends to preferred stockholders$— $74 $— $149 
On September 30, 2019, we issued approximately 4 million shares of the SchemeMandatory Convertible Preferred Stock, which were all converted into shares of Arrangement, the limited partners held a noncontrolling interest of approximately 5% in the Partnership through their ownership of LP Units. Accordingly, net income attributable to our common stock in our condensed consolidated statementsbefore the end of operations excludes the noncontrolling interest’s proportionate share of the results for the periods presented. In addition, we presented the proportionate share of equity attributable to the noncontrolling interest as a separate component of stockholders’ equity within our condensed consolidated balance sheet as of October 29, 2017 and condensed consolidated statements of stockholders’ equity for the periods immediately prior to the effective time of the Scheme of Arrangement.
Dividends and Distributions
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions, except per share data)
Cash dividends and distributions paid per share/unit $1.75
 $1.02
 $3.50
 $2.04
Cash dividends paid to stockholders $727
 $414
 $1,444
 $822
Cash distributions paid to limited partners $39
 $23
 $77
 $46
fiscal year 2022.
Stock Repurchase ProgramPrograms
In April 2018,December 2021, our Board of Directors authorized thea stock repurchase ofprogram to repurchase up to $12$10 billion of our common stock from time to time on or priorthrough December 31, 2022, which was subsequently extended to November 3, 2019, the endDecember 31, 2023. In May 2022, our Board of our fiscal year 2019. Under ourDirectors authorized another stock repurchase program weto repurchase up to an additional $10 billion of our common stock from time to time through December 31, 2023.
We repurchased and retired approximately 1.55 million and 7 million shares of our common stock at a weighted average price of $230.50 infor $2,806 million and $3,994 million during the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively, and approximately 5 million and 9 million shares of our common stock for $2,776 million and $5,500 million during the fiscal quarter and two fiscal quarters ended May 6, 2018. As of May 6, 2018, $11,653 million of the current authorization remained available1, 2022, respectively, under ourthese stock repurchase program.programs.
Repurchases under our stock repurchase programprograms may be effected through a variety of methods, including open market or privately negotiated purchases. The timing and numberamount of shares of common stock repurchased will depend on a variety of factors, includingthe stock price, general business and market conditions, corporate and regulatory requirements, alternative investment opportunities.opportunities, acquisition opportunities, and other factors. We are not obligated to repurchase any specific numberamount of shares of common stock, and wethe stock repurchase programs may suspendbe suspended or discontinue our repurchase programterminated at any time.
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Table of Contents
Stock-Based Compensation Expense
Fiscal Quarter EndedTwo Fiscal Quarters Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
(In millions)
Cost of products sold$22 $16 $38 $34 
Cost of subscriptions and services28 20 49 38 
Research and development354 261 621 529 
Selling, general and administrative109 89 196 172 
Total stock-based compensation expense$513 $386 $904 $773 
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions)
Cost of products sold $21
 $15
 $41
 $29
Research and development 205
 150
 408
 291
Selling, general and administrative 70
 51
 146
 97
Total stock-based compensation expense $296
 $216
 $595
 $417

As of April 30, 2023, the total unrecognized compensation cost related to unvested stock-based awards was $7,357 million, which is expected to be recognized over the remaining weighted-average service period of 3.8 years.
Equity Incentive Award Plans
A summary of time- and market-based RSU activity is as follows:
Number of RSUs
Outstanding		Weighted-Average
Grant Date Fair Value Per Share
(In millions, except per share data)
Balance as of October 30, 202218 $238.49 
Granted12 $513.28 
Vested(5)$224.49 
Forfeited— *$266.60 
Balance as of April 30, 202325 $373.97 
  
Number of RSUs
Outstanding
 
Weighted-
Average
Grant Date
Fair Value
Per Share
     
  (In millions, except per share data)
Balance as of October 29, 2017 18
 $163.42
Granted 7
 $240.87
Vested (5) $155.45
Forfeited (1) $161.95
Balance as of May 6, 2018 19
 $194.00
_______________
* Represents fewer than 1 million shares.
The aggregate fair value of time- and market-based RSUs that vested during the two fiscal quarters ended May 6, 2018April 30, 2023 was $1,355$2,591 million, which representsrepresented the market value of our common stock on the date that the RSUs vested. The number of RSUs vested included shares of common stock that we withheld for settlement of employees’ withholdingtax obligations due upon the vesting of RSUs. Total unrecognized compensation cost related to unvested RSUs as of May 6, 2018 was $3,048 million, which is expected to be recognized over the remaining weighted-average service period of 3.1 years.
A summary of time- and market-based stock option activity is as follows:
  
Number of Options
Outstanding
  
Weighted-
Average
Exercise Price
Per Share
 
Weighted-
Average
Remaining
Contractual
Life (In years)
 
Aggregate
Intrinsic
Value
          
  (In millions, except years and per share data)
Balance as of October 29, 2017 10
  $49.54
    
Exercised (1)  $45.76
   $318
Cancelled —
* $74.66
    
Balance as of May 6, 2018 9
  $50.08
 2.41 $1,593
Fully vested as of May 6, 2018 8
  $48.96
 2.38 $1,543
Fully vested and expected to vest as of May 6, 2018 9
  $50.08
 2.41 $1,593

* Represents fewer than 0.5 million shares.
The total unrecognized compensation cost related to unvested stock options as of May 6, 2018 was $3 million, which is expected to be recognized over the remaining weighted-average service period of 0.5 years.
8.9. Income Taxes
For the fiscal quarter and two fiscal quarters ended May 6, 2018, our benefit fromThe provision for income taxes was $2,637$235 million and $8,423 million, respectively, compared to $103 million and $93$301 million for the fiscal quarter and two fiscal quarters ended April 30, 2017, respectively.
The benefit2023, respectively, compared to $200 million and $415 million for the fiscal quarter ended May 6, 2018 included the impact from the April 4, 2018 completion of the Redomiciliation Transaction and related internal reorganizations. The impact included tax benefits from the reduction of $1,063 million in unrecognized federal tax benefits related to a one-time transition tax, or the Transition Tax, $431 million in the Transition Tax payable and $1,162 million from the remeasurement of withholding taxes on undistributed earnings, partially offset by a $91 million tax provision on foreign earnings and profit subject to U.S. tax.
The benefit from income taxes in the two fiscal quarters ended May 6, 2018 was principally a result of provisional income tax benefits realized from the enactment of the 2017 Tax Reform Act on December 22, 2017 and included the net deferred tax liabilities established in connection with the Brocade Merger.

The 2017 Tax Reform Act makes significant changes to the U.S. Internal Revenue Code, including, but not limited to, a decrease in the U.S. corporate tax rate from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a participation exemption regime, and the Transition Tax on the mandatory deemed repatriation of accumulated non-U.S. earnings of U.S. controlled foreign corporations as of December 31, 2017.
On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118, or SAB 118, to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Reform Act.
Based on our interpretation of the 2017 Tax Reform Act and available guidance, including SAB 118, we recorded a total provisional benefit of $7,303 million, which we believe was a reasonable estimate as of May 6, 2018. The provisional benefit includes $92 million related to the remeasurement of certain deferred tax assets and liabilities, which was based on the tax rates at which they are expected to be reversed in the future as a result of the 2017 Tax Reform Act. The provisional benefit also includes $7,212 million related to the Transition Tax, which was primarily due to a reduction of $10,392 million in our federal deferred income tax liabilities on accumulated non-U.S. earnings, partially offset by $2,116 million of federal provisional long-term Transition Tax payable and $1,116 million of unrecognized federal tax benefits related to the Transition Tax. The provisional benefit includes a $1,494 million reduction of the Transition Tax in the fiscal quarter ended May 6, 2018 primarily as a result of the completion of the Redomiciliation Transaction and related internal reorganizations. Additional detailed analysis of historical foreign earnings, as well as potential correlative adjustments is ongoing. Any subsequent adjustment to these amounts, which must be completed within 12 months of the enactment of the 2017 Tax Reform Act, will be recorded as a discrete adjustment to provision for (benefit from) income taxes in the period in which the analysis is complete.
In connection with the Brocade Merger, we established $845 million of net deferred tax liabilities on the excess of book basis over the tax basis of acquired identified intangible assets and investments in certain foreign subsidiaries that have not been indefinitely reinvested, partially offset by acquired tax attributes. The net deferred tax liabilities are based upon certain assumptions underlying our preliminary purchase price allocation. Upon finalization of the purchase price allocation, additional adjustments to the amount of our net deferred taxes may be required, provided we are within the measurement period.
We also recognized discrete benefits from the recognition of $127 million and $155 million of excess tax benefits from stock-based awards that were vested and/or exercised during the fiscal quarter and two fiscal quarters ended May 6, 2018,1, 2022, respectively.
The benefit fromincrease in the provision for income taxes in the corresponding 2017 fiscal periodsquarter ended April 30, 2023, as compared to the prior year fiscal period, was primarily due to a discrete benefit fromhigher income before income taxes, partially offset by an increase in the recognition of $139 million and $181 million of excessuncertain tax benefits from stock-based awards that were vested and/or exercised duringas a result of lapses of statutes of limitations. The decrease in the fiscal quarter andprovision for income taxes in the two fiscal quarters ended April 30, 2017, respectively.
Uncertain Tax Positions
The balance of gross unrecognized tax benefits was $3,430 million and $2,256 million2023, as of May 6, 2018 and October 29, 2017, respectively. Gross unrecognized tax benefits increased by $1,174 million compared to the balance as of October 29, 2017,prior year fiscal period, was primarily due to the recognition of uncertain tax positions related to the Transition Tax and tobenefits as a lesser extent, the Brocade Merger, which were initially estimated asresult of the Brocade Acquisition Date. We continue to reevaluate these items with any adjustments to our preliminary estimates recognized, provided we are within the measurement period and we continue to collect information in order to determine their estimated values.lapses of statutes of limitations, partially offset by higher income before income taxes.
Accrued interest and penalties are included in other long-term liabilities on the condensed consolidated balance sheets. As of May 6, 2018April 30, 2023, we had $5,384 million of gross unrecognized tax benefits and October 29, 2017, the combined amount of cumulative accrued interest and penalties was approximately $155 million and $132 million, respectively.
A portion of our unrecognized tax benefits will affect our effective tax rate if they are recognized upon favorable resolution of the uncertain tax positions. As of May 6, 2018 and October 29, 2017, approximately $3,586 million and $2,388 million, respectively, of the unrecognized tax benefits, including accrued interest and penalties, would affect our effective tax rate if favorably resolved.
We are subject to U.S. income tax examination for fiscal years 2010 and later. Certain of our acquired companies are subject to tax examinations in major jurisdictions outside the United States for fiscal years 2013 and later.penalties. It is possible that our existing unrecognized tax benefits may change by up to $257$329 million within the next 12 months as a result of lapses of statutes of limitations for certain audit periods, and/oranticipated closures of audit examinations expectedand changes in balances related to tax positions to be completed withintaken during the next 12 months.current fiscal year.

9.10. Segment Information
Reportable Segments
We have fourtwo reportable segments: wiredsemiconductor solutions and infrastructure wireless communications, enterprise storage and industrial & other. These segments align with our principal target markets. The segments represent components for whichsoftware. Each segment has separate financial information is available that is utilized on a regular basis by the Chief Executive Officer of Broadcom, who has been identified as the Chief Operating Decision Maker, or the CODM as defined by authoritative guidance on segment reporting, in determining how to allocate resources and evaluate performance. The reportable segments are determined based on several factors including, clientbut not limited to, customer base, homogeneity of products, technology, delivery channels and similar economic characteristics.
In
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Semiconductor solutions. We provide semiconductor solutions for managing the first quartermovement of fiscal year 2018, we completeddata in data center, service provider, enterprise and embedded networking applications. We provide a broad variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. We also provide semiconductor solutions for enabling the Brocade Merger. The operating results are reported primarily withinset-top box and broadband access markets and for enabling secure movement of digital data to and from host machines, such as servers, personal computers and storage systems, to the enterpriseunderlying storage segment. See Note 2. “Acquisitiondevices, such as hard disk drives and solid state drives. We also provide a broad variety of Brocade"products for additional information.the general industrial and automotive markets. Our semiconductor solutions segment also includes our IP licensing.
Infrastructure software. We provide a portfolio of software solutions that enables customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms. Our portfolio of infrastructure and security software is designed to modernize, optimize, and secure the most complex hybrid environments, enabling scalability, agility, automation, insights, resiliency and security. We also offer mission critical FC SAN products and related software.
Our CODM assesses the performance of each segment and allocates resources to those segmentseach segment based on net revenue and operating results and does not evaluate our segmentseach segment using discrete asset information. Operating results by segment include items that are directly attributable to each segment. Operating results by segment and also include shared expenses such as global operations, including manufacturing support, logistics and quality control, in addition to expenses associated with selling,marketing, general and administrative activities, for the business, which are allocated primarily based on revenue, while facilities and information technology (“IT”) expenses. Shared expenses are primarily allocated based on site-specificrevenue and headcount.
Unallocated Expenses
Unallocated expenses include amortization of acquisition-related intangible assets, stock-based compensation expense, restructuring, impairment and disposal charges, acquisition-related costs, charges related to inventory step-up to fair value, and other costs, which are not used in evaluating the results of, or in allocating resources to, our segments. Acquisition-related costs also include transaction costs and any costs directly related to the acquisition and integration of acquired businesses.
Depreciation expense directly attributable to each reportable segment is included in the operating results forof each segment. However, the CODM does not evaluate depreciation expense by operating segment and, therefore, it is not separately presented. There was no inter-segment revenue.revenue for any of the periods presented. The accounting policies of the segments are the same as those described in the summary“Summary of significant accounting policies.
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions)
Net revenue:        
Wired infrastructure $2,295
 $2,111
 $4,170

$4,195
Wireless communications 1,294
 1,150
 3,504
 2,325
Enterprise storage 1,162
 712
 2,153
 1,419
Industrial & other 263
 217
 514

390
Total net revenue $5,014
 $4,190
 $10,341
 $8,329
         
Operating income:        
Wired infrastructure $1,058
 $937
 $1,845
 $1,870
Wireless communications 522
 414
 1,581
 841
Enterprise storage 720
 382
 1,299
 757
Industrial & other 152
 109
 294
 170
Unallocated expenses (1,251) (1,368) (2,875) (2,658)
Total operating income $1,201
 $474
 $2,144
 $980

Significant Customer Information
We sell our products through our direct sales force and a select network of distributors globally. One direct customer accounted for 13% and 17% of our net accounts receivable balance at May 6, 2018 and October 29, 2017, respectively. During the two fiscal quarters ended May 6, 2018, one direct customer represented 12% of our net revenue. No customer accounted for 10% or more of our net revenue for the fiscal quarter ended May 6, 2018. During the fiscal quarter and two fiscal quarters ended April 30, 2017, one direct customer represented 13% and 14% of our net revenue, respectively. The majority of the revenue from this customer wasAccounting Policies” included in our wireless communications and wired infrastructure segments. This customer is a contract manufacturerthe Annual Report on Form 10-K for a numberfiscal year 2022.
Fiscal Quarter EndedTwo Fiscal Quarters Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
(In millions)
Net revenue:
Semiconductor solutions$6,808 $6,229 $13,915 $12,102 
Infrastructure software1,925 1,874 3,733 3,707 
Total net revenue$8,733 $8,103 $17,648 $15,809 
Operating income:
Semiconductor solutions$4,000 $3,626 $8,123 $6,975 
Infrastructure software1,412 1,313 2,719 2,620 
Unallocated expenses(1,404)(1,545)(2,731)(3,093)
Total operating income$4,008 $3,394 $8,111 $6,502 
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10. Related Party Transactions
During the fiscal quarter and two fiscal quarters ended May 6, 2018 and April 30, 2017, in the ordinary course of business, we purchased from, or sold to, entities of which one of our directors also serves or served as a director, or entities that are otherwise affiliated with one of our directors.
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions)
Total net revenue $200
 $71
 $382
 $148
Total costs and expenses, including inventory purchases $31
 $46
 $67
 $65
  May 6,
2018		 October 29,
2017
     
  (In millions)
Total receivables $76
 $31
Total payables $8
 $12
11. Commitments and Contingencies
Commitments
The following table summarizes contractual obligations and commitments as of May 6, 2018 that materially changed from the end of fiscal year 2017:
April 30, 2023:
    Fiscal Year  
  Total 2018
(remainder)		 2019 2020 2021 2022 Thereafter
               
  (In millions)
Debt principal, interest and fees $21,371
 $430
 $566
 $3,321
 $1,242
 $3,940
 $11,872
Purchase commitments $931
 $843
 $69
 $18
 $1
 $—
 $—
Fiscal Year:Purchase CommitmentsOther Contractual Commitments
(In millions)
2023 (remainder)$55 $146 
2024256 271 
2025136 158 
20269 169 
20277 112 
Thereafter7 447 
    Total$470 $1,303 
Debt Principal, Interest and Fees. Represents principal and interest on borrowings under the 2017 Senior Notes, the Assumed BRCM Senior Notes, and the Assumed Brocade Convertible Notes.
Purchase Commitments. Represents Represent unconditional purchase obligations that include agreements to purchase goods or services, primarily inventory, that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable without penalty. Cancellation for outstandingpenalty and unconditional purchase orders for capital expenditures in connectionobligations with internal fabrication facility expansiona remaining term of one year or less.
Other Contractual Commitments. Represent amounts payable pursuant to agreements related to IT, human resources, and construction of our new campuses is generally allowed but requires payment of all costs incurred through the date of cancellation and, therefore, cancelable purchase orders for these capital expenditures are included in the table above.other service agreements.
Due to the inherent uncertainty with respect to the timing of future cash outflows associated with our unrecognized tax benefits at May 6, 2018,as of April 30, 2023, we are unable to reliably estimate the timing of cash settlement with the respective taxing authorities. Therefore, $2,700$2,841 million of unrecognized tax benefits and accrued interest classified within other long-term liabilities on our condensed consolidated balance sheetand penalties as of May 6, 2018April 30, 2023 have been excluded from the contractual obligations table above.

Contingencies
From time to time, we are involved in litigation that we believe is of the type common to companies engaged in our linelines of business, including commercial disputes, employment issues, tax disputes and disputes involving claims by third parties that our activities infringe their patent, copyright, trademark or other intellectual property rights.IP rights, as well as regulatory investigations or inquiries. Legal proceedings and regulatory investigations or inquiries are often complex, may require the expenditure of significant funds and other resources, and the outcomeoutcomes of litigation issuch proceedings are inherently uncertain, with material adverse outcomes possible. IntellectualIP property claims generally involve the demand by a third-party that we cease the manufacture, use or sale of the allegedly infringing products, processes or technologies and/or pay substantial damages or royalties for past, present and future use of the allegedly infringing intellectual property.IP. Claims that our products or processes infringe or misappropriate any third-party intellectual propertyIP rights (including claims arising through our contractual indemnification of our customers) often involve highly complex, technical issues, the outcome of which is inherently uncertain. Moreover, from time to time, we pursue litigation to assert our intellectual propertyIP rights. Regardless of the merit or resolution of any such litigation, complex intellectual propertyIP litigation is generally costly and diverts the efforts and attention of our management and technical personnel.
Lawsuits Relating to the AcquisitionCalifornia Institute of Brocade Communications Systems,Technology
California Institute of Technology (“Caltech“) filed a complaint against Broadcom and Apple Inc.
On December 13, on May 26, 2016 December 15, 2016, December 21, 2016, January 5, 2017 and January 18, 2017, six putative class action complaints were filed in the United States District Court for the NorthernCentral District of California or the(the “U.S. Central District Court”), and an amended complaint adding Cypress Semiconductor Corporation as a defendant on August 15, 2016. The amended complaint alleged that chips that support certain error correction codes as specified in IEEE Standards 802.11n and 802.11ac willfully infringed four patents related to error correction coding: U.S. Northern District Court, captioned Steinberg v. Brocade Communications Systems, Inc., et al., No. 3:16-cv-7081-EMC, Gross v. Brocade Communications Systems, Inc., et al., No. 3:16-cv-7173-EJD, Jha v. Brocade Communications Systems, Inc., et al., No. 3:16-cv-7270-HRL, Bragan v. Brocade Communications Systems, Inc., et al., No. 3:16-cv-7271-JSD, Chuakay v. Brocade Communications Systems, Inc., et al., No. 3:17-cv-0058-PJH,Patent Nos. 7,116,710; 7,421,032; 7,916,781; and Mathew v. Brocade Communications Systems, Inc., et al., No. 3:16-cv-7271-HSG, respectively.8,284,833 (“’833 patent”). Prior to trial, Caltech dismissed its claims against Cypress and withdrew its infringement allegations as to ‘833 patent. The Steinberg, Bragancomplaint sought a preliminary and Mathew complaints named as defendants Brocade, the members of Brocade’s board of directors, Broadcom, BRCMpermanent injunction, damages, pre- and Bobcat Merger Sub, Inc. The Gross, Jha and Chuakay complaints named as defendants Brocade and the members of Brocade’s board of directors. All of the complaints asserted claims under Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder. The complaints alleged, among other things, that the board of directors of Brocade failed to provide material information and/or omitted material information from the Preliminary Proxy Statement filed with the SEC on December 6, 2016 by Brocade. The complaints sought to enjoin the closing of the transaction between Brocade and Broadcom,post-judgment interest, as well as certain other equitable and declaratory relief and attorneys’ fees, costs, and costs. Onexpenses. The trial was held in January 10, 2017, January 27, 20172020, and February 15, 2017, the U.S. Northern District Court granted motions to relate the cases, all of which were then related to the Steinberg action and before the Honorable Judge Edward Chen. On January 11, 2017, Plaintiff Jha filed a motion for a preliminary injunction, which was subsequently withdrawn on January 18, 2017. On February 6, 2017, Plaintiff Gross voluntarily dismissed29, 2020, the Gross action without prejudice, which was ordered by the U.S. Northern District Court on February 15, 2017. On April 14, 2017, the U.S. Northern District Court granted the Motion for Consolidation, Appointment as Lead Plaintiffjury issued its verdict finding infringement and Approvalawarding Caltech past damages of Lead Plaintiff’s Selection of Counsel filed by Plaintiff Giulio D. Cessario, a plaintiff in the Steinberg action, which consolidated these actions under the caption In re Brocade Communications Systems, Inc. Securities Litigation, Case No. 3:16-cv-07081-EMC. On December 29, 2017, Lead Plaintiff voluntarily dismissed the consolidated action without prejudice and withdrew as Lead Plaintiff. On February 16, 2018, Plaintiffs Gross, Chuakay and Jha filed a joint motion for an award of attorneys’ fees. On March 2, 2018, the defendants filed a joint opposition to the motion for attorneys’ fees. On May 3, 2018, Plaintiffs Gross, Chuakay and Jha withdrew their motion for an award of attorneys’ fees. As of May 6, 2018, all actions have been dismissed and motions withdrawn, thereby concluding all actions with respect to these lawsuits.

Lawsuits Relating to Tessera, Inc.
On May 23, 2016, Tessera Technologies, Inc., Tessera, Inc., or Tessera, and Invensas Corp., an affiliate of Tessera, or Invensas or collectively, the Complainants, filed a complaint to institute an investigation with the U.S. International Trade Commission, or the ITC. The Complainants alleged infringement by$270.2 million from Broadcom and our subsidiaries, BRCM, Avago Technologies Limited, or Avago, and Avago Technologies U.S. Inc., or Avago U.S., or collectively, the Respondents, of three patents relating to semiconductor packaging and semiconductor manufacturing technology. The downstream respondents,$837.8 million from Apple, for which are customers of the Respondents, were Arista Networks, Inc., ARRIS International plc, ARRIS Group, Inc., ARRIS Technology, Inc., ARRIS Enterprises LLC, ARRIS Solutions, Inc., Pace Ltd., Pace Americas, LLC, Pace USA, LLC, ASUSteK Computer Inc., ASUS Computer International, Comcast Cable Communications, LLC, Comcast Cable Communications Management, LLC, Comcast Business Communications, LLC, HTC Corporation, HTC America, Inc., NETGEAR, Inc., Technicolor S.A., Technicolor USA, Inc., and Technicolor Connected Home USA LLC, or collectively, the Downstream Respondents.Apple is seeking indemnification from Broadcom. On July 20, 2016, the ITC instituted the investigation, or the ITC Investigation. Complainants sought the following relief: (1) a permanent limited exclusion order excluding from importation into the U.S. all of the Respondents' semiconductor devices and semiconductor device packages and Downstream Respondents’ products containing Respondents’ semiconductor devices and semiconductor device packages that infringe one or more of the three patents subject to the ITC Investigation and (2) a permanent cease and desist order prohibiting the Respondents and Downstream Respondents and related companies from importing, marketing, advertising, demonstrating, warehousing inventory for distribution, offering for sale, selling, qualifying for use in the products of others, distributing, or using the Respondents' semiconductor devices and semiconductor device packages and Downstream Respondents’ products containing Respondents’ semiconductor devices and semiconductor device packages that infringe one or more of the three patents subject to the ITC Investigation.
On May 23, 2016, Tessera and Invensas filed a complaint against BRCM in the U.S. District Court for the District of Delaware, Case No. 1-16-cv-00379, alleging infringement of the three patents subject to the ITC Investigation. The complaint sought compensatory damages in an unspecified amount, as well as an award of reasonable attorneys’ fees, interest, and costs.
On May 23, 2016, Tessera and Tessera Advanced Technologies, Inc. filed a complaint against BRCM in the U.S. District Court for the District of Delaware, Case No. 1-16-cv-00380, alleging infringement of four patents relating to semiconductor packaging and circuit technologies. On June 19, 2016, the complaint was amended to add three more patents relating to semiconductor packaging technologies for a total of seven patents in this matter. The complaint sought compensatory damages in an unspecified amount, as well as an award of reasonable attorneys’ fees, interest, and costs.
On May 23, 2016, Invensas filed a Writ of Summons against Broadcom, BRCM, Broadcom Netherlands B.V. and Broadcom Communications Netherlands B.V. in the Hague District Court in the Netherlands, Case No. L1422381, alleging infringement of a single European patent that is a foreign counterpart to one of the patents subject to the ITC Investigation, or the European Patent. The named defendants also included distributors EBV Elektronik GmbH, Arrow Central Europe GmbH, and Mouser Electronics Netherlands B.V. The requested relief included a cease-and-desist order and damages in an unspecified amount.
On May 23, 2016, Invensas also filed a complaint against each of (i) Broadcom Germany GmbH and Broadcom‘s German distributors, Case No. 7 O 97/16, and (ii) Broadcom and BRCM, Case No. 7 O 98/16, in the Mannheim District Court in Germany, alleging infringement of the European Patent. The requested relief included damages in an unspecified amount and an injunction preventing the sale of the accused products.
On November 7, 2016, Invensas filed a complaint against Avago, Avago U.S., Emulex Corporation, or Emulex, LSI Corporation and PLX Technology, Inc., a subsidiary of Broadcom, or PLX, in the U.S. District Court for the District of Delaware, Case No. 1-16-cv-01033, alleging infringement of two of the patents subject to the ITC Investigation. The complaint sought compensatory damages in an unspecified amount, as well as an award of reasonable attorneys’ fees, interest, and costs.
On November 7, 2016, Tessera and Invensas filed a complaint against Avago, Avago U.S., and Avago Technologies Wireless (U.S.A.) Manufacturing Inc. in the U.S. District Court for the District of Delaware, Case No. 1-16-cv-01034, alleging infringement of two patents relating to semiconductor packaging technology. On January 31, 2017, Tessera and Invensas amended the complaint in this matter and added three additional patents related to semiconductor packaging technology, which were also at issue in case No. 1-16-cv-00379 pending in Delaware. The complaint sought compensatory damages in an unspecified amount, as well as an award of reasonable attorneys’ fees, interest, and costs.
On December 18, 2017, Broadcom and its subsidiaries entered into comprehensive settlement agreements and a patent license agreement with Tessera and its affiliates resolving all outstanding litigation. Pursuant to the agreements between the parties, the ITC investigation was terminated and all of the other litigations were dismissed, thereby concluding all actions with respect to these matters.

Lawsuits Relating to the Acquisition of Emulex
On MarchAugust 3, 2015, two putative shareholder class action complaints were filed in the Court of Chancery of the State of Delaware, or the Delaware Court of Chancery, against Emulex, its directors, Avago Technologies Wireless (U.S.A.) Manufacturing Inc., or AT Wireless, and Emerald Merger Sub, Inc., or Emerald Merger Sub, captioned as follows: James Tullman v. Emulex Corporation, et al., Case No. 10743-VCL (Del. Ch.); Moshe Silver ACF/Yehudit Silver U/NY/UTMA v. Emulex Corporation, et al., Case No. 10744-VCL (Del. Ch.). On March 11, 2015, a third complaint was filed in the Delaware Court of Chancery, captioned Hoai Vu v. Emulex Corporation, et al., Case No. 10776-VCL (Del. Ch.). The complaints alleged, among other things, that Emulex’s directors breached their fiduciary duties by approving the Agreement and Plan of Merger, dated February 25, 2015, by and among AT Wireless, Emerald Merger Sub and Emulex and that AT Wireless and Emerald Merger Sub aided and abetted these alleged breaches of fiduciary duty. The complaints sought, among other things, either to enjoin the transaction or to rescind it following its completion, as well as damages, including attorneys’ and experts’ fees. The Delaware Court of Chancery has entered an order consolidating the three Delaware actions under the caption In re Emulex Corporation Stockholder Litigation, Consolidated C.A. No. 10743-VCL. On May 5, 2015, we completed our acquisition of Emulex. On June 5, 2015, the Court of Chancery dismissed the consolidated action without prejudice.
On April 8, 2015, a putative class action complaint was filed in the U.S. Central District Court, entitled Gary Varjabedian, et al. v. Emulex Corporation, et al., No. 8:15-cv-554-CJC-JCG. The complaint names as defendants Emulex, its directors, AT Wireless and Emerald Merger Sub, and purported to assert claims under Sections 14(d), 14(e) and 20(a) of the Exchange Act. The complaint alleges, among other things, that the board of directors of Emulex failed to provide material information and/or omitted material information from the Solicitation/Recommendation Statement on Schedule 14D-9 filed with the SEC on April 7, 2015 by Emulex, together with the exhibits and annexes thereto. The complaint sought to enjoin the tender offer to purchase all of the outstanding shares of Emulex common stock, as well as certain other equitable relief and attorneys’ fees and costs. On July 28, 2015,2020, the U.S. Central District Court issued an order appointingits judgment, awarding Caltech past damages in the lead plaintiffamounts awarded by the jury, as well as pre- and approving lead counsel for the putative class. On September 9, 2015, plaintiff filed a first amended complaint seeking rescission of the merger, unspecified money damages, other equitable relief and attorneys’ fees and costs. On October 13, 2015, defendants moved to dismiss the first amended complaint, whichpost-judgment interest. Additionally, the U.S. Central District Court granted with prejudice on January 13, 2016. Plaintiff filed a noticeawarded Caltech an unspecified amount of appealongoing royalties to be determined after the anticipated appeals process is resolved. Neither the jury nor the U.S. Central District Court found willful infringement, which if it had, could have resulted in
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enhanced damages up to three times the amount awarded. Broadcom and Apple appealed to the United States Court of Appeals for the NinthFederal Circuit or(the “Federal Circuit Court”). In February 2022, the NinthFederal Circuit Court affirmed infringement of two patents, both of which expired in August 2020, but it did not address all issues and ordered a new trial on January 15, 2016. The appeal is captioned Gary Varjabedian, et al. v. Emulex Corporation, et al., No. 16-55088. On June 27, 2016, the Plaintiff-Appellant filed his opening brief, on August 17 and August 22, 2016, the Defendants-Appellees filed their answering briefs,damages and on October 5, 2016 Plaintiff-Appellant filed his reply brief. The Ninththe infringement of the 7,916,781 patent, which also expired in August 2020. In May 2022, the Federal Circuit Court heard oral argument on October 5, 2017. On April 20, 2018,denied the Ninth Circuit Court issued an opinion affirming in partpetition for rehearing filed by Broadcom and reversing in partApple, and remanded the decision of the U.S. Central District Court and remanding Plaintiff-Appellant’s claims under Sections 14(e) and 20(a) of the Exchange Actcase to the U.S. Central District Court. Subsequently, Caltech withdrew its infringement allegations as to the 7,916,781 patent.
We believe that the evidence and the law do not support the U.S. Central District Court’s findings of infringement. We cannot reasonably estimate the ultimate outcome as the Federal Circuit Court for reconsideration. On May 4, 2018,vacated the Defendants-Appellees filedabove damages, and a Petition for Rehearing En Bancnumber of factors (including a retrial at the lower court and further appeals) could significantly change the assessment of damages. As a result, we have not recorded a reserve with respect to this litigation, in accordance with the Ninth Circuit Court. We believe these claims are all entirely without merit and intend to vigorously defend these actions.
Lawsuits Relating to the Acquisition of PLX
In June and July 2014, four lawsuits were filed in the Superior Court for the State of California, County of Santa Clara, or the Superior Court, challenging our acquisition of PLX. On July 22, 2014, the Superior Court consolidated these California actions under the caption In re PLX Technology, Inc. S’holder Litig., Lead Case No. 1-14-CV-267079 (Cal. Super. Ct., Santa Clara) and appointed lead counsel. That same day, the Superior Court also stayed the consolidated action, pending resolution of related actions filed in the Delaware Court of Chancery, described below.
Also in June and July 2014, five similar lawsuits were filed in the Delaware Court of Chancery. On July 21, 2014, the Delaware Court of Chancery consolidated these Delaware actions under the caption In re PLX Technology, Inc. Stockholders Litigation, Consol. C.A. No. 9880-VCL (Del. Ch.), appointed lead plaintiffs and lead counsel, and designated an operative complaint for the consolidated action. On July 31, 2014, counsel for lead plaintiffs in Delaware informed the Delaware Court of Chancery that they would not seek a preliminary injunction, but intend to seek damages and pursue monetary remedies through post-closing litigation. Our acquisition of PLX closed on August 12, 2014.

On October 31, 2014, lead plaintiffs filed a consolidated amended complaint. This complaint alleges, among other things, that PLX’s directors breached their fiduciary duties to PLX’s stockholders by seeking to sell PLX for an inadequate price, pursuant to an unfair process, and by agreeing to preclusive deal protections in the merger agreement. Plaintiffs also allege that Potomac Capital Partners II, L.P., Deutsche Bank Securities, AT Wireless and Pluto Merger Sub, Inc., the acquisition subsidiary, aided and abetted the alleged fiduciary breaches. Plaintiffs also allege that PLX’s Solicitation/Recommendation statement on Schedule 14D-9, as filed with the SEC, contained false and misleading statements and/or omitted material information necessary to inform the shareholder vote. The plaintiffs seek, among other things, monetary damages and attorneys’ fees and costs. On September 3, 2015, the Delaware Court of Chancery granted motions to dismiss filed by AT Wireless, the acquisition subsidiary and two PLX directors, and denied motions to dismiss filed by several other PLX directors, Potomac Capital Partners II, L.P. and Deutsche Bank Securities.
On August 17, 2016, the five remaining PLX director-defendants and Deutsche Bank Securities entered into a stipulation of partial settlement to resolve claims against all of the former PLX directors and Deutsche Bank Securities asserted in the Delaware class action. The partial settlement also provides for a release of all potential claims against AT Wireless, Pluto Merger Sub, Inc., Avago and PLX. Defendant Potomac Capital Partners II, L.P. is not a party to the settlement. This partial settlement was approved by the Delaware Court of Chancery on December 20, 2016.
On November 9, 2016, the sole remaining defendant, Potomac Capital Partners II, L.P., filed cross-claims against the named individual director defendants and Deutsche Bank Securities for contribution. Under various contracts and statutes, PLX may owe indemnification to each of these parties. The cross-claims are now barred according to the terms of the approved partial settlement, although Potomac Capital Partners II, L.P. might be entitled to an offset (based on contributory fault) of any damages it might owe to the class. A bench trial was held in the Delaware class action on April 10, 2018 and a decision is expected later this year.applicable accounting standards.
Other Matters
In addition to the matters discussed above, we are currently engaged in a number of legal actions in the ordinary course of our business.
Contingency Assessment
We do not believe, based on currently available facts and circumstances, that the final outcome of any pending legal proceedings or ongoing regulatory investigations, taken individually or as a whole, will have a material adverse effect on our condensed consolidated financial condition, results of operations or cash flows.statements. However, lawsuits may involve complex questions of fact and law and may require the expenditure of significant funds and other resources to defend. The results of litigation or regulatory investigations are inherently uncertain, and material adverse outcomes are possible. From time to time, we may enter into confidential discussions regarding the potential settlement of such lawsuits. Any settlement of pending litigation could require us to incur substantial costs and other ongoing expenses, such as future royalty payments in the case of an intellectual propertyIP dispute.
During the periods presented, no material amounts have been accrued or disclosed in the accompanying condensed consolidated financial statements with respect to loss contingencies associated with any other legal proceedings or regulatory investigations, as potential losses for such matters are not considered probable and ranges of losses are not reasonably estimable. These matters are subject to many uncertainties and the ultimate outcomes are not predictable. There can be no assurances that the actual amounts required to satisfy any liabilities arising from the matters described above will not have a material adverse effect on our results of operations,condensed consolidated financial position or cash flows.statements.
Other Indemnifications
As is customary in our industry and as provided for in local law in the United StatesU.S. and other jurisdictions, many of our standard contracts provide remedies to our customers and others with whom we enter into contracts, such as defense, settlement, or payment of judgment for intellectual propertyIP claims related to the use of our products. From time to time, we indemnify customers, as well as our suppliers, contractors, lessors, lessees, companies that purchase our businesses or assets and others with whom we enter into contracts, against combinations of loss, expense, or liability arising from various triggering events related to the sale and the use of our products, the use of their goods and services, the use of facilities and state of our owned facilities, the state of the assets and businesses that we sell and other matters covered by such contracts, usually up to a specified maximum amount. In addition, from time to time we also provide protection to these parties against claims related to undiscovered liabilities, additional product liabilities or environmental obligations. In our experience, claims made under such indemnifications are rare and the associated estimated fair value of the liability is not material.

12. Restructuring, Impairment and Disposal Charges
Restructuring Charges
The following is a summary of significant restructuring expense recognized in continuing operations, primarily operating expenses:
During the first quarter of fiscal year 2018, we began the implementation of cost reduction activities associated with the Brocade Merger. In connection with the Brocade Merger, we recognized $35 million and $143 million of restructuring costs primarily related to employee termination costs during the fiscal quarter and two fiscal quarters ended May 6, 2018, respectively. Approximately 1,100 employees have been terminated from our workforce across all business and functional areas on a global basis as a result of the Brocade Merger. Management is in the process of further evaluating our resources and business needs and may eliminate additional positions, which would result in additional restructuring costs.
In connection with the acquisition of BRCM in the second quarter of fiscal year 2016, or the Broadcom Merger, we began the implementation of cost reduction activities associated with the Broadcom Merger. Restructuring costs recorded were $14 million and $45 million for the fiscal quarter and two fiscal quarters ended May 6, 2018, respectively, and $22 million and $64 million for the fiscal quarter and two fiscal quarters ended April 30, 2017, respectively. Restructuring costs were primarily related to lease and other exit costs for the fiscal quarter and two fiscal quarters ended May 6, 2018 and employee termination costs for the fiscal quarter and two fiscal quarters ended April 30, 2017.
  Employee Termination Costs Leases and Other Exit Costs Total
       
  (In millions)
Balance as of October 29, 2017 $28
 $17
 $45
Restructuring charges (a)
 129
 61
 190
Utilization (121) (55) (176)
Balance as of May 6, 2018 (b)
 $36
 $23
 $59

(a) Included $2 million of restructuring expense related to discontinued operations recognized during the two fiscal quarters ended May 6, 2018, which was included in loss from discontinued operations in our condensed consolidated statements of operations.
(b) The majority of the employee termination costs balance is expected to be paid in the third quarter of fiscal year 2018. The leases and other exit costs balance is expected to be paid during the remaining terms of the leases, which extend through fiscal year 2025.
Impairment and Disposal Charges
During the fiscal quarter and two fiscal quarters ended May 6, 2018, we recorded impairment and disposal charges of $6 million and $12 million, respectively. These charges primarily related to impairments of leasehold improvements. During the fiscal quarter and two fiscal quarters ended April 30, 2017, we recorded impairment and disposal charges of $15 million and $25 million, respectively. These charges included impairment of property, plant and equipment acquired through the Broadcom Merger and IPR&D projects.
13. Condensed Consolidating Financial Information
In connection with the Exchange Offer, we are required to provide certain financial information regarding the Parent Guarantor, the Subsidiary Guarantor, the Subsidiary Issuers and our other subsidiaries, collectively, the Non-Guarantor Subsidiaries. The following information sets forth the condensed consolidating financial information as of May 6, 2018 and October 29, 2017 and for the fiscal quarter and two fiscal quarters ended May 6, 2018 and April 30, 2017 for the Parent Guarantor, the Subsidiary Guarantor, the Subsidiary Issuers, and the Non-Guarantor Subsidiaries. Investments in subsidiaries are accounted for under the equity method; accordingly, entries necessary to consolidate the Parent Guarantor, the Subsidiary Guarantor, the Subsidiary Issuers and the Non-Guarantor Subsidiaries are reflected in the eliminations column. In the opinion of management, separate complete financial statements of the Subsidiary Issuers would not provide additional material information that would be useful in assessing their financial composition.
See Note 6. “Borrowings” for more information regarding the 2017 Senior Notes and changes in guarantors resulting from the Redomiciliation Transaction. We have applied the impacts from the Redomiciliation Transaction and the change in guarantors retrospectively to all periods presented.

  Condensed Consolidating Balance Sheet
  May 6, 2018
  Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals
             
  (In millions)
ASSETS
Current assets:            
Cash and cash equivalents $—
 $495
 $5,913
 $1,779
 $—
 $8,187
Trade accounts receivable, net —
 —
 —
 2,749
 —
 2,749
Inventory —
 —
 —
 1,235
 —
 1,235
Intercompany receivable 10
 6
 1,693
 1,393
 (3,102) —
Intercompany loan receivable —
 —
 1,320
 2,554
 (3,874) —
Other current assets —
 —
 37
 266
 —
 303
Total current assets 10
 501
 8,963
 9,976
 (6,976) 12,474
Long-term assets:            
Property, plant and equipment, net —
 —
 241
 2,479
 —
 2,720
Goodwill —
 —
 1,360
 25,548
 —
 26,908
Intangible assets, net —
 —
 —
 12,346
 —
 12,346
Investment in subsidiaries 32,405
 32,413
 35,187
 96,595
 (196,600) —
Intercompany loan receivable, long-term —
 —
 43,565
 937
 (44,502) —
Other long-term assets —
 —
 27
 461
 —
 488
Total assets $32,415
 $32,914
 $89,343
 $148,342
 $(248,078) $54,936
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:            
Accounts payable $2
 $22
 $38
 $774
 $—
 $836
Employee compensation and benefits —
 —
 137
 280
 —
 417
Current portion of long-term debt —
 —
 117
 —
 —
 117
Intercompany payable 346
 463
 1,158
 1,135
 (3,102) —
Intercompany loan payable —
 —
 2,554
 1,320
 (3,874) —
Other current liabilities —
 —
 677
 77
 —
 754
Total current liabilities 348
 485
 4,681
 3,586
 (6,976) 2,124
Long-term liabilities:            
Long-term debt —
 —
 17,444
 37
 —
 17,481
Deferred tax liabilities —
 —
 5
 261
 —
 266
Intercompany loan payable, long-term —
 21
 915
 43,566
 (44,502) —
Unrecognized tax benefits —
 —
 1,941
 759
 —
 2,700
Other long-term liabilities —
 —
 163
 135
 —
 298
Total liabilities 348
 506
 25,149
 48,344
 (51,478) 22,869
Total stockholders’ equity 32,067
 32,408
 64,194
 99,998
 (196,600) 32,067
Total liabilities and stockholders' equity $32,415
 $32,914
 $89,343
 $148,342
 $(248,078) $54,936

  Condensed Consolidating Balance Sheet
  October 29, 2017
  Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals
             
  (In millions)
ASSETS
Current assets:            
Cash and cash equivalents $—
 $194
 $7,555
 $3,455
 $—
 $11,204
Trade accounts receivable, net —
 —
 —
 2,448
 —
 2,448
Inventory —
 —
 —
 1,447
 —
 1,447
Intercompany receivable —
 32
 279
 309
 (620) —
Intercompany loan receivable —
 28
 1,891
 8,849
 (10,768) —
Other current assets —
 —
 350
 374
 —
 724
Total current assets —
 254
 10,075
 16,882
 (11,388) 15,823
Long-term assets:            
Property, plant and equipment, net —
 —
 207
 2,392
 —
 2,599
Goodwill —
 —
 1,360
 23,346
 —
 24,706
Intangible assets, net —
 —
 —
 10,832
 —
 10,832
Investment in subsidiaries 20,285
 23,112
 28,049
 63,739
 (135,185) —
Intercompany loan receivable, long-term —
 —
 41,547
 —
 (41,547) —
Other long-term assets —
 —
 213
 245
 —
 458
Total assets $20,285
 $23,366
 $81,451
 $117,436
 $(188,120) $54,418
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:             
Accounts payable $—
 $7
 $72
 $1,026
 $—
 $1,105
Employee compensation and benefits —
 —
 274
 352
 —
 626
Current portion of long-term debt —
 —
 117
 —
 —
 117
Intercompany payable —
 123
 186
 311
 (620) —
Intercompany loan payable —
 50
 8,799
 1,919
 (10,768) —
Other current liabilities —
 —
 254
 427
 —
 681
Total current liabilities —
 180
 9,702
 4,035
 (11,388) 2,529
Long-term liabilities:             
Long-term debt —
 —
 17,431
 —
 —
 17,431
Deferred tax liabilities —
 —
 10,293
 (274) —
 10,019
Intercompany loan payable, long-term —
 —
 —
 41,547
 (41,547) —
Unrecognized tax benefits —
 —
 497
 514
 —
 1,011
Other long-term liabilities —
 —
 76
 166
 —
 242
Total liabilities —
 180
 37,999
 45,988
 (52,935) 31,232
Total stockholders’ equity 20,285
 20,285
 43,452
 71,448
 (135,185) 20,285
Noncontrolling interest —
 2,901
 —
 —
 —
 2,901
Total liabilities and stockholders' equity $20,285
 $23,366
 $81,451
 $117,436
 $(188,120) $54,418

  Condensed Consolidating Statements of Operations and Comprehensive Income
  Fiscal Quarter Ended
  May 6, 2018
  Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals
             
  (In millions)
Net revenue $—
 $—
 $—
 $5,014
 $—
 $5,014
Intercompany revenue —
 —
 566
 —
 (566) —
Total revenue —
 —
 566
 5,014
 (566) 5,014
Cost of products sold:            
Cost of products sold —
 —
 35
 1,661
 —
 1,696
Intercompany cost of products sold —
 —
 —
 37
 (37) —
Amortization of acquisition-related intangible assets —
 —
 —
 765
 —
 765
Restructuring charges —
 —
 —
 2
 —
 2
Total cost of products sold —
 —
 35
 2,465
 (37) 2,463
Gross margin —
 —
 531
 2,549
 (529) 2,551
Research and development —
 —
 407
 529
 —
 936
Intercompany operating expense —
 —
 —
 529
 (529) —
Selling, general and administrative 2
 50
 72
 170
 —
 294
Amortization of acquisition-related intangible assets —
 —
 —
 67
 —
 67
Restructuring, impairment and disposal charges —
 —
 11
 42
 —
 53
Total operating expenses 2
 50
 490
 1,337
 (529) 1,350
Operating income (loss) (2) (50) 41
 1,212
 —
 1,201
Interest expense —
 —
 (148) —
 —
 (148)
Intercompany interest expense —
 —
 (81) (519) 600
 —
Other income, net —
 1
 28
 17
 —
 46
Intercompany interest income —
 —
 519
 81
 (600) —
Intercompany other income (expense), net —
 50
 —
 (50) —
 —
Income (loss) from continuing operations before income taxes and earnings in subsidiaries (2) 1
 359
 741
 —
 1,099
Benefit from income taxes —
 —
 (2,521) (116) —
 (2,637)
Income (loss) from continuing operations before earnings in subsidiaries (2) 1
 2,880
 857
 —
 3,736
Earnings in subsidiaries 3,720
 3,734
 3,680
 10,278
 (21,412) —
Income from continuing operations and earnings in subsidiaries 3,718
 3,735
 6,560
 11,135
 (21,412) 3,736
Loss from discontinued operations, net of income taxes —
 —
 (2) (1) —
 (3)
Net income 3,718
 3,735
 6,558
 11,134
 (21,412) 3,733
Net income attributable to noncontrolling interest —
 15
 —
 —
 —
 15
Net income attributable to common stock $3,718
 $3,720
 $6,558
 $11,134
 $(21,412) $3,718
             
Net income $3,718
 $3,735
 $6,558
 $11,134
 $(21,412) $3,733
Other comprehensive income (loss), net of tax:            
Change in unrealized gain on available-for-sale investments —
 —
 (9) —
 —
 (9)
Amortization of actuarial loss and prior service costs associated with defined benefit pension plans and post-retirement benefit plans —
 —
 —
 1
 —
 1
Other comprehensive income (loss) —
 —
 (9) 1
 —
 (8)
Comprehensive income 3,718
 3,735
 6,549
 11,135
 (21,412) 3,725
Comprehensive income attributable to noncontrolling interest —
 15
 —
 —
 —
 15
Comprehensive income attributable to common stock $3,718
 $3,720
 $6,549
 $11,135
 $(21,412) $3,710

  
Condensed Consolidating Statements of Operations and
Comprehensive Income (Loss)
  Fiscal Quarter Ended
  April 30, 2017
  Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals
             
  (In millions)
Net revenue $—
 $—
 $1
 $4,189
 $—
 $4,190
Intercompany revenue —
 —
 529
 12
 (541) —
Total revenue —
 —
 530
 4,201
 (541) 4,190
Cost of products sold:            
Cost of products sold —
 —
 42
 1,522
 —
 1,564
Intercompany cost of products sold —
 —
 —
 63
 (63) —
Purchase accounting effect on inventory —
 —
 —
 1
 —
 1
Amortization of acquisition-related intangible assets —
 —
 —
 639
 —
 639
Restructuring charges —
 —
 5
 5
 —
 10
Total cost of products sold —
 —
 47
 2,230
 (63) 2,214
Gross margin —
 —
 483
 1,971
 (478) 1,976
Research and development —
 —
 345
 484
 —
 829
Intercompany operating expense —
 —
 —
 478
 (478) —
Selling, general and administrative —
 6
 81
 117
 —
 204
Amortization of acquisition-related intangible assets —
 —
 —
 442
 —
 442
Restructuring, impairment and disposal charges —
 —
 3
 24
 —
 27
Total operating expenses —
 6
 429
 1,545
 (478) 1,502
Operating income (loss) —
 (6) 54
 426
 —
 474
Interest expense —
 —
 (118) 6
 —
 (112)
Intercompany interest expense —
 (2) (16) (972) 990
 —
Other income (expense), net —
 1
 8
 (6) —
 3
Intercompany interest income —
 —
 972
 18
 (990) —
Intercompany other income (expense), net —
 812
 (413) (399) —
 —
Income (loss) from continuing operations before income taxes and earnings in (loss from) subsidiaries —
 805
 487
 (927) —
 365
Provision for (benefit from) income taxes —
 —
 (139) 36
 —
 (103)
Income (loss) from continuing operations, before earnings in (loss from) subsidiaries —
 805
 626
 (963) —
 468
Earnings in (loss from) subsidiaries 440
 (341) (1,830) (762) 2,493
 —
Income (loss) from continuing operations and earnings in (loss from) subsidiaries 440
 464
 (1,204) (1,725) 2,493
 468
Income (loss) from discontinued operations, net of income taxes —
 —
 2
 (6) —
 (4)
Net income (loss) 440
 464
 (1,202) (1,731) 2,493
 464
Net income attributable to noncontrolling interest —
 24
 —
 —
 —
 24
Net income (loss) attributable to common stock $440
 $440
 $(1,202) $(1,731) $2,493
 $440
             
Net income (loss) $440
 $464
 $(1,202) $(1,731) $2,493
 $464
Other comprehensive income, net of tax:            
Amortization of actuarial loss and prior service costs associated with defined benefit pension plans and post-retirement benefit plans —
 —
 —
 1
 —
 1
Other comprehensive income —
 —
 —
 1
 —
 1
Comprehensive income (loss) 440
 464
 (1,202) (1,730) 2,493
 465
Comprehensive income attributable to noncontrolling interest —
 24
 —
 —
 —
 24
Comprehensive income (loss) attributable to common stock $440
 $440
 $(1,202) $(1,730) $2,493
 $441

  Condensed Consolidating Statements of Operations and Comprehensive Income
  Two Fiscal Quarters Ended
  May 6, 2018
  Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals
             
  (In millions)
Net revenue $—
 $—
 $—
 $10,341
 $—
 $10,341
Intercompany revenue —
 —
 1,150
 —
 (1,150) —
Total revenue —
 —
 1,150
 10,341
 (1,150) 10,341
Cost of products sold:            
Cost of products sold —
 —
 67
 3,528
 —
 3,595
Intercompany cost of products sold —
 —
 —
 71
 (71) —
Purchase accounting effect on inventory —
 —
 —
 70
 —
 70
Amortization of acquisition-related intangible assets —
 —
 —
 1,480
 —
 1,480
Restructuring charges —
 —
 2
 15
 —
 17
Total cost of products sold —
 —
 69
 5,164
 (71) 5,162
Gross margin —
 —
 1,081
 5,177
 (1,079) 5,179
Research and development —
 —
 813
 1,048
 —
 1,861
Intercompany operating expense —
 —
 —
 1,079
 (1,079) —
Selling, general and administrative 2
 84
 157
 342
 —
 585
Amortization of acquisition-related intangible assets —
 —
 —
 406
 —
 406
Restructuring, impairment and disposal charges —
 —
 44
 139
 —
 183
Total operating expenses 2
 84
 1,014
 3,014
 (1,079) 3,035
Operating income (loss) (2) (84) 67
 2,163
 —
 2,144
Interest expense —
 —
 (329) (2) —
 (331)
Intercompany interest expense —
 —
 (140) (1,093) 1,233
 —
Other income, net —
 2
 47
 32
 —
 81
Intercompany interest income —
 —
 1,093
 140
 (1,233) —
Intercompany other income (expense), net —
 229
 (57) (172) —
 —
Income (loss) from continuing operations before income taxes and earnings in subsidiaries (2) 147
 681
 1,068
 —
 1,894
Benefit from income taxes —
 —
 (7,981) (442) —
 (8,423)
Income (loss) from continuing operations before earnings in subsidiaries (2) 147
 8,662
 1,510
 —
 10,317
Earnings in subsidiaries 9,950
 10,154
 9,503
 28,113
 (57,720) —
Income from continuing operations and earnings in subsidiaries 9,948
 10,301
 18,165
 29,623
 (57,720) 10,317
Loss from discontinued operations, net of income taxes —
 —
 (2) (16) —
 (18)
Net income 9,948
 10,301
 18,163
 29,607
 (57,720) 10,299
Net income attributable to noncontrolling interest —
 351
 —
 —
 —
 351
Net income attributable to common stock $9,948
 $9,950
 $18,163
 $29,607
 $(57,720) $9,948
             
Net income $9,948
 $10,301
 $18,163
 $29,607
 $(57,720) $10,299
Other comprehensive income, net of tax:            
Amortization of actuarial loss and prior service costs associated with defined benefit pension plans and post-retirement benefit plans —
 —
 —
 1
 —
 1
Other comprehensive income —
 —
 —
 1
 —
 1
Comprehensive income 9,948
 10,301
 18,163
 29,608
 (57,720) 10,300
Comprehensive income attributable to noncontrolling interest —
 351
 —
 —
 —
 351
Comprehensive income attributable to common stock $9,948
 $9,950
 $18,163
 $29,608
 $(57,720) $9,949

  
Condensed Consolidating Statements of Operations and
Comprehensive Income (Loss)
  Two Fiscal Quarters Ended
  April 30, 2017
  Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals
             
  (In millions)
Net revenue $—
 $—
 $74
 $8,255
 $—
 $8,329
Intercompany revenue —
 —
 910
 9
 (919) —
Total revenue —
 —
 984
 8,264
 (919) 8,329
Cost of products sold:            
Cost of products sold —
 —
 87
 3,050
 —
 3,137
Intercompany cost of products sold —
 —
 (12) 122
 (110) —
Purchase accounting effect on inventory —
 —
 —
 1
 —
 1
Amortization of acquisition-related intangible assets —
 —
 7
 1,191
 —
 1,198
Restructuring charges —
 —
 8
 8
 —
 16
Total cost of products sold —
 —
 90
 4,372
 (110) 4,352
Gross margin —
 —
 894
 3,892
 (809) 3,977
Research and development —
 —
 713
 924
 —
 1,637
Intercompany operating expense —
 —
 (80) 889
 (809) —
Selling, general and administrative —
 13
 175
 217
 —
 405
Amortization of acquisition-related intangible assets —
 —
 7
 875
 —
 882
Restructuring, impairment and disposal charges —
 —
 18
 55
 —
 73
Total operating expenses —
 13
 833
 2,960
 (809) 2,997
Operating income (loss) —
 (13) 61
 932
 —
 980
Interest expense —
 —
 (169) (54) —
 (223)
Intercompany interest expense —
 (3) (90) (976) 1,069
 —
Loss on extinguishment of debt —
 —
 (52) (107) —
 (159)
Other income, net —
 1
 6
 27
 —
 34
Intercompany interest income —
 1
 976
 92
 (1,069) —
Intercompany other income (expense), net —
 1,013
 (479) (534) —
 —
Income (loss) from continuing operations before income taxes and earnings in (loss from) subsidiaries —
 999
 253
 (620) —
 632
Provision for (benefit from) income taxes —
 —
 (109) 16
 —
 (93)
Income (loss) from continuing operations, before earnings in (loss from) subsidiaries —
 999
 362
 (636) —
 725
Earnings in (loss from) subsidiaries 679
 (283) (2,061) (1,028) 2,693
 —
Income (loss) from continuing operations and earnings in (loss from) subsidiaries 679
 716
 (1,699) (1,664) 2,693
 725
Loss from discontinued operations, net of income taxes —
 —
 (8) (1) —
 (9)
Net income (loss) 679
 716
 (1,707) (1,665) 2,693
 716
Net income attributable to noncontrolling interest —
 37
 —
 —
 —
 37
Net income (loss) attributable to common stock $679
 $679
 $(1,707) $(1,665) $2,693
 $679
             
Net income (loss) $679
 $716
 $(1,707) $(1,665) $2,693
 $716
Other comprehensive income, net of tax:            
Amortization of actuarial loss and prior service costs associated with defined benefit pension plans and post-retirement benefit plans —
 —
 —
 1
 —
 1
Other comprehensive income —
 —
 —
 1
 —
 1
Comprehensive income (loss) 679
 716
 (1,707) (1,664) 2,693
 717
Comprehensive income attributable to noncontrolling interest —
 37
 —
 —
 —
 37
Comprehensive income (loss) attributable to common stock $679
 $679
 $(1,707) $(1,664) $2,693
 $680

  Condensed Consolidating Statements of Cash Flows
  Two Fiscal Quarters Ended
  May 6, 2018
  Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals
             
  (In millions)
Cash flows from operating activities:            
Net income $9,948
 $10,301
 $18,163
 $29,607
 $(57,720) $10,299
Adjustments to reconcile net income to net cash provided by (used in) operating activities (9,611) (10,001) (18,528) (26,110) 57,949
 (6,301)
Net cash provided by (used in) operating activities 337
 300
 (365) 3,497
 229
 3,998
Cash flows from investing activities:            
Intercompany contributions paid —
 (102) (9,099) (3,002) 12,203
 —
Distributions received from subsidiaries —
 1,521
 —
 1,521
 (3,042) —
Net change in intercompany loans —
 28
 8,346
 2,181
 (10,555) —
Acquisitions of businesses, net of cash acquired —
 —
 —
 (4,786) —
 (4,786)
Proceeds from sales of businesses —
 —
 —
 782
 —
 782
Purchases of property, plant and equipment —
 —
 (114) (295) —
 (409)
Proceeds from disposals of property, plant and equipment —
 —
 1
 237
 —
 238
Purchases of investments —
 —
 (50) (199) —
 (249)
Proceeds from sale of investment —
 —
 54
 —
 —
 54
Other —
 —
 —
 (12) —
 (12)
Net cash provided by (used in) investing activities —
 1,447
 (862) (3,573) (1,394) (4,382)
Cash flows from financing activities:            
Intercompany contributions received —
 —
 3,231
 9,201
 (12,432) —
Dividend and distribution payments —
 (1,521) (1,521) (1,521) 3,042
 (1,521)
Net intercompany borrowings —
 (27) (2,125) (8,403) 10,555
 —
Repayment of debt —
 —
 —
 (856) —
 (856)
Repurchases of common stock (347) —
 —
 —
 —
 (347)
Issuance of common stock, net 10
 102
 —
 —
 —
 112
Payment of capital lease obligations —
 —
 —
 (21) —
 (21)
Net cash used in financing activities (337) (1,446) (415) (1,600) 1,165
 (2,633)
Net change in cash and cash equivalents —
 301
 (1,642) (1,676) —
 (3,017)
Cash and cash equivalents at the beginning of period —
 194
 7,555
 3,455
 —
 11,204
Cash and cash equivalents at end of period $—
 $495
 $5,913
 $1,779
 $—
 $8,187

  Condensed Consolidating Statements of Cash Flows
  Two Fiscal Quarters Ended
  April 30, 2017
  Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals
             
  (In millions)
Cash flows from operating activities:            
Net income (loss) $679
 $716
 $(1,707) $(1,665) $2,693
 $716
Adjustments to reconcile net income (loss) to net cash provided by operating activities (679) (463) 1,912
 4,143
 (2,693) 2,220
Net cash provided by operating activities —
 253
 205
 2,478
 —
 2,936
Cash flows from investing activities:            
Net change in intercompany loans —
 410
 129
 6,393
 (6,932) —
Acquisitions of businesses, net of cash acquired —
 —
 —
 (37) —
 (37)
Proceeds from sale of business —
 —
 —
 10
 —
 10
Purchases of property, plant and equipment —
 —
 (185) (396) —
 (581)
Purchases of investments —
 —
 (200) —
 —
 (200)
Other —
 —
 —
 (4) —
 (4)
Net cash provided by (used in) investing activities —
 410
 (256) 5,966
 (6,932) (812)
Cash flows from financing activities:            
Net intercompany borrowings —
 465
 (6,004) (1,393) 6,932
 —
Proceeds from issuance of long-term debt —
 —
 13,446
 —
 —
 13,446
Repayment of debt —
 —
 (5,705) (7,963) —
 (13,668)
Payment of debt issuance costs —
 —
 (23) —
 —
 (23)
Dividend and distribution payments —
 (868) —
 —
 —
 (868)
Issuance of common stock, net —
 150
 —
 —
 —
 150
Other —
 —
 (2) (2) —
 (4)
Net cash provided by (used in) financing activities —
 (253) 1,712
 (9,358) 6,932
 (967)
Net change in cash and cash equivalents —
 410
 1,661
 (914) —
 1,157
Cash and cash equivalents at the beginning of period —
 53
 1,092
 1,952
 —
 3,097
Cash and cash equivalents at end of period $—
 $463
 $2,753
 $1,038
 $—
 $4,254
14. Subsequent EventEvents
Cash Dividends Declared
On June 6, 2018,May 31, 2023, our Board of Directors declared a quarterly cash dividend of $1.75$4.60 per share on our common stock, payable on June 29, 201830, 2023 to stockholders of record at the close of business on June 20, 2018.22, 2023.

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Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report onForm 10-Qor (“Form 10-Q,10-Q”) and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended October 29, 2017, or 30, 2022 (“fiscal year 2017,2022”) included in theour Annual Report onForm 10-Kfor fiscal year 2017, or 20172022 (“2022 Annual Report onForm 10-K, filed by our predecessor, Broadcom Limited, a company organized under the laws of the Republic of Singapore, or Broadcom-Singapore. This is our first Quarterly Report on Form 10-Q following the redomiciliation on April 4, 2018 of our ultimate parent company to the U.S., or the Redomiciliation Transaction. The financial information and results of operations in this Form 10-Q for periods prior to April 4, 2018 relate to our predecessor for accounting and financial reporting purposes, Broadcom-Singapore, and relate to Broadcom Inc. for the period after April 4, 2018, the effective date of the Redomiciliation Transaction. Similarly, unless stated otherwise or the context otherwise requires, references10-K”). References to “Broadcom,” “we,” “our”“our,” and “us” meanare to Broadcom Inc. and its consolidated subsidiaries, from and afterunless otherwise specified or the effective date of the Redomiciliation Transaction and, prior to that time, to our predecessor.context otherwise requires. This Form 10-Q may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, which are made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended or the Exchange Act.(the “Exchange Act”). These forward-looking statements may include our pending acquisition of VMware, Inc.; projections of financial information; statements about historical results that may suggest trends for our business; statements of the plans, strategies and objectives of management for future operations; and statements of expectation or belief regarding future events (including any acquisitions we may make), technology developments, our products, product sales, expenses, liquidity, cash flow and growth rates, customer concentration and relationships, or enforceability of our intellectual property rights, or IP; and the effects of seasonality on our business.(“IP”) rights. Such statements are based on current expectations, estimates, forecasts and projections of our industry performance and macroeconomic conditions, based on management’s judgment, beliefs, current trends and market conditions, and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Accordingly, we caution you not to place undue reliance on these statements. Important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” in Part II, Item 1A of this Form 10-Q, and in other documents we file from time to time with the Securities and Exchange Commission or SEC.(the “SEC”). All of the forward-looking statements in this Form 10-Q are qualified in their entirety by reference to the factors listed above and those discussed under the heading “Risk Factors” below. We undertake no intent or obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as otherwise required by law.
Overview
Broadcom is the successor to Broadcom-Singapore. Following the Redomiciliation Transaction on April 4, 2018, Broadcom became the ultimate parent company of Broadcom-Singapore.
We are a leading designer, developerglobal technology leader that designs, develops and global supplier ofsupplies a broad range of semiconductor and infrastructure software solutions. We develop semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products. We have a history of innovation in the semiconductor industry and offer thousands of products that are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Our infrastructure software solutions enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms. Our portfolio of industry-leading infrastructure and security software is designed to modernize, optimize, and secure the most complex hybrid environments, enabling scalability, agility, automation, insights, resiliency and security. We also offer mission critical fibre channel storage area networking (“FC SAN”) products and related software in the form of modules, switches and subsystems incorporating multiple semiconductor products.
We have fourtwo reportable segments: wiredsemiconductor solutions and infrastructure wireless communications, enterprise storagesoftware. Our semiconductor solutions segment includes all of our product lines and industrial & other, which align withIP licensing. Our infrastructure software segment includes our principal target markets.mainframe, distributed and cyber security solutions, and our FC SAN business.
Our fiscal year ending November 4, 2018, or fiscal year 2018, is a 53-week fiscal year, with our first fiscal quarter containing 14 weeks compared to 13 weeks in the first fiscal quarter ended January 29, 2017. The additional week in the first quarter of fiscal year 2018 resulted in higher net revenue, gross margin dollars, research and development expense, and selling general and administrative expense in the first quarter and first two quarters of fiscal year 2018, compared to the corresponding prior year periods.
Recent Developments andQuarterly Highlights
Highlights during the two fiscal quartersquarter ended May 6, 2018April 30, 2023 include the following:
•Our cash and cash equivalents were $8,187 million at May 6, 2018. This compares with $11,204 million at October 29, 2017, which included net proceeds of $3,980 million from the issuance of senior unsecured notes in October 2017 used to fund the acquisition of Brocade Communications Systems, Inc., or Brocade.

•On November 17, 2017, or the Brocade Acquisition Date, we completed the acquisition of Brocade for aggregate consideration of approximately $6 billion.
• We had an $8,423 million benefit from incomes taxes primarily due to provisional income tax benefits realized from the enactment of the U.S. Tax Cuts and Jobs Act, or the 2017 Tax Reform Act, and the impact from the Redomiciliation Transaction.
•We generated $3,998$4,502 million of cash from operations.
•We paid $1,521 million for cash dividends and distributions and $347 million to repurchase shares of our common stock.
Redomiciliation to the United States from Singapore
After the close of market trading on April 4, 2018, Broadcom Inc. and Broadcom-Singapore completed a statutory scheme of arrangement under Singapore law, or the Scheme of Arrangement. Pursuant to the Scheme of Arrangement, all Broadcom-Singapore ordinary shares outstanding immediately prior to the effective time of the Scheme of Arrangement were exchanged on a one-for-one basis for newly issued shares of Broadcom Inc. common stock and Broadcom-Singapore became an indirect wholly-owned subsidiary of Broadcom Inc.
In conjunction with the Redomiciliation Transaction and pursuant to an amendment to the Amended and Restated Limited Partnership Agreement of Broadcom Cayman L.P., or the Partnership, all outstanding exchangeable limited partnership units of the Partnership were mandatorily exchanged, or the Mandatory Exchange, on a one-for-one basis for newly issued shares of Broadcom Inc. common stock immediately prior to the completion of the Scheme of Arrangement. As a result, all limited partners of the Partnership, or the Limited Partners, became common stockholders of Broadcom Inc. In addition, all related outstanding special preference shares of Broadcom-Singapore were automatically redeemed upon the Mandatory Exchange. Consequently, the Limited Partners no longer hold a noncontrolling interest in the Partnership and we subsequently deregistered the Partnership.
Acquisition & Divestitures
Acquisition of Brocade
On the Brocade Acquisition Date, one of our indirect subsidiaries merged with and into Brocade with Brocade as the surviving corporation, or the Brocade Merger. As a result of the Brocade Merger, Brocade stockholders received, in aggregate, approximately $5,298$1,914 million in cash in exchange fordividends.
•We repurchased $2,806 million of common stock.
Pending Acquisition of VMware, Inc.
On May 26, 2022, we entered into an Agreement and Plan of Merger (the “VMware Merger Agreement”) to acquire all of the outstanding shares of BrocadeVMware, Inc. (“VMware”) in a cash-and-stock transaction (the “VMware Merger”) that values VMware at approximately $61 billion, based on the closing price of Broadcom common stock on May 25, 2022. We will also assume VMware’s closing date outstanding debt, net of expected cash.
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Table of Contents
Under the terms of the VMware Merger Agreement, each share of VMware common stock issued and outstanding immediately prior to the effective time of the BrocadeVMware Merger will be indirectly converted into the right to receive, at the election of the holder of such share of VMware common stock, either $142.50 in cash, without interest, or 0.2520 shares of Broadcom common stock. The stockholder election will be subject to proration, such that the total number of shares of VMware common stock entitled to receive cash and the total number of shares of VMware common stock entitled to receive Broadcom common stock, will, in each case, be equal to 50% of the aggregate number of shares of VMware common stock issued and outstanding immediately prior to the effective time of the VMware Merger.
We also paid $701 million to retire Brocade’s term loan. In addition, we assumedwill assume all unvested Brocade stock options,outstanding VMware restricted stock unitsunit (“RSU”) awards and performance stock unitsunit awards held by continuing employees. The assumed awards will be converted into RSU awards for shares of Broadcom common stock. All vestedoutstanding in-the-money BrocadeVMware stock options after giving effectand RSU awards held by non-employee directors will be accelerated and converted into the right to any acceleration, were cashed outreceive cash and shares of Broadcom common stock, in equal parts.
Effective upon the Brocade Merger.effective time of the VMware Merger, one member of the VMware Board of Directors, to be mutually agreed by us and VMware, will be added to our Board of Directors.
Brocade wasIn connection with the execution of the VMware Merger Agreement, we entered into a leading suppliercommitment letter on May 26, 2022, with certain financial institutions that committed to provide, subject to the terms and conditions of networking hardware, softwarethe commitment letter, a senior unsecured bridge facility in an aggregate principal amount of $32 billion.
The VMware Merger, which is expected to be completed in our fiscal year ending October 29, 2023 (“fiscal year 2023”), is subject to satisfaction or waiver of customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and services, including Fibre Channel Storage Area Network, or FC SAN, solutionsclearance under the antitrust laws of the European Union and Internet Protocol Networking, or IP Networking, solutions. We acquired Brocade to enhance our position as a leading provider of enterprise storage connectivity solutions, broaden our portfolio for enterprise storage, and to increase our ability to address the evolving needscertain other jurisdictions. On October 3, 2022, we registered approximately 59 million shares of our original equipment manufacturer, or OEM, customers.common stock. On November 4, 2022, VMware stockholders adopted the VMware Merger Agreement. We and VMware each have termination rights under the VMware Merger Agreement and, under specified circumstances, upon termination of the agreement, we and VMware would be required to pay the other a termination fee of $1.5 billion.
We financed the Brocade Merger with the net proceeds from the October 2017 issuance of senior unsecured notes, as well as cash on hand.
Divestiture of Brocade’s IP Networking Business
Following the Brocade Merger, on December 1, 2017, we sold Brocade’s IP Networking business, including the Ruckus Wireless and ICX Switch businesses, to ARRIS International plc for cash consideration of $800 million, adjusted for closing working capital balances.

Critical Accounting Estimates
The preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Our actual financial results may differ materially and adversely from our estimates. Our critical accounting policiesestimates are those that affect our historical financial statements materially and involve difficult, subjective or complex judgments by management. Those policiesestimates include revenue recognition, business combinations, valuation of goodwill and long-lived assets, intangible assets and goodwill, inventory valuation, income taxes, retirement and post-retirement benefit plan assumptions, stock-based compensation, and employee bonus programs.taxes.
There were no significant changes in our critical accounting policiesestimates during the two fiscal quarters ended May 6, 2018April 30, 2023 compared to those previously disclosed in “Critical Accounting Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 20172022 Annual Report on Form 10-K.
Results of Operations
Fiscal Quarter and Two Fiscal Quarters Ended May 6, 2018April 30, 2023 Compared to Fiscal Quarter and Two Fiscal Quarters Ended April 30, 2017May 1, 2022
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Table of Contents
The following tables set forth our results of operations for the periods presented:
Fiscal Quarter Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
(In millions)(As a percentage of net revenue)
Statements of Operations Data:
Net revenue:
Products$6,741 $6,417 77 %79 %
Subscriptions and services1,992 1,686 23 21 
Total net revenue8,733 8,103 100 100 
Cost of revenue:
Cost of products sold2,019 1,798 23 22 
Cost of subscriptions and services158 158 2 2 
Amortization of acquisition-related intangible assets441 707 5 9 
Restructuring charges— 1 — — 
Total cost of revenue2,618 2,664 30 33 
Gross margin6,115 5,439 70 67 
Research and development1,312 1,261 15 16 
Selling, general and administrative438 368 5 4 
Amortization of acquisition-related intangible assets348 398 4 5 
Restructuring, impairment and disposal charges9 18 — — 
Total operating expenses2,107 2,045 24 25 
Operating income$4,008 $3,394 46 %42 %
Two Fiscal Quarters Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
(In millions)(As a percentage of net revenue)
Statements of Operations Data:
Net revenue:
Products$13,823 $12,470 78 %79 %
Subscriptions and services3,825 3,339 22 21 
Total net revenue17,648 15,809 100 100 
Cost of revenue:
Cost of products sold4,244 3,567 24 23 
Cost of subscriptions and services307 314 2 2 
Amortization of acquisition-related intangible assets976 1,437 5 9 
Restructuring charges2 3 — — 
Total cost of revenue5,529 5,321 31 34 
Gross margin12,119 10,488 69 66 
Research and development2,507 2,467 14 16 
Selling, general and administrative786 689 5 4 
Amortization of acquisition-related intangible assets696 795 4 5 
Restructuring, impairment and disposal charges19 35 — — 
Total operating expenses4,008 3,986 23 25 
Operating income$8,111 $6,502 46 %41 %
24
  Fiscal Quarter Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions) (As a percentage of net revenue)
Statements of Operations Data:        
Net revenue $5,014
 $4,190
 100% 100%
Cost of products sold:        
Cost of products sold 1,696
 1,564
 34
 38
Purchase accounting effect on inventory —
 1
 —
 —
Amortization of acquisition-related intangible assets 765
 639
 15
 15
Restructuring charges 2
 10
 —
 —
Total cost of products sold 2,463
 2,214
 49
 53
Gross margin 2,551
 1,976
 51
 47
Research and development 936
 829
 19
 20
Selling, general and administrative 294
 204
 6
 5
Amortization of acquisition-related intangible assets 67
 442
 1
 10
Restructuring, impairment and disposal charges 53
 27
 1
 1
Total operating expenses 1,350
 1,502
 27
 36
Operating income $1,201
 $474
 24% 11%

Table of Contents
  Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions) (As a percentage of net revenue)
Statements of Operations Data:        
Net revenue $10,341
 $8,329
 100% 100%
Cost of products sold: 
      
Cost of products sold 3,595
 3,137
 35
 38
Purchase accounting effect on inventory 70
 1
 1
 —
Amortization of acquisition-related intangible assets 1,480
 1,198
 14
 14
Restructuring charges 17
 16
 —
 —
Total cost of products sold 5,162
 4,352
 50
 52
Gross margin 5,179
 3,977
 50
 48
Research and development 1,861
 1,637
 18
 20
Selling, general and administrative 585
 405
 5
 5
Amortization of acquisition-related intangible assets 406
 882
 4
 10
Restructuring, impairment and disposal charges 183
 73
 2
 1
Total operating expenses 3,035
 2,997
 29
 36
Operating income $2,144
 $980
 21% 12%
Net Revenue
Our overall net revenue, as well as the percentage of total net revenue generated by sales in each of our segments, varies from quarter to quarter, due largely to fluctuations in end-market demand, including the effects of seasonality, which are discussed in detail below under “Seasonality”.
Historically, aA relatively small number of customers has accountedaccount for a significant portion of our net revenue. Direct sales to Foxconn Technology Group companies (including Hon Hai Precision Industries)WT Microelectronics Co., together referred to as Foxconn,Ltd., a distributor, accounted for 12%, 13%17% and 14% of our net revenue for the two fiscal quarters ended May 6, 2018, fiscal quarter ended April 30, 2017 and two fiscal quarters ended April 30, 2017, respectively. No customer accounted for 10% or more19% of our net revenue for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively, and 17% and 20% of our net revenue for the fiscal quarter and two fiscal quarters ended May 6, 2018. 1, 2022, respectively.
We believe aggregate sales to our top five end customers, through all channels, accounted for approximately 38%35% of our net revenue for each of the fiscal quarter and 43%two fiscal quarters ended April 30, 2023 and May 1, 2022. We believe aggregate sales to Apple Inc., through all channels, accounted for approximately 18% and 20% of our net revenue for the fiscal quarter and two fiscal quarters ended May 6, 2018,April 30, 2023, respectively, and approximately 39%20% of our net revenue during bothfor each of the fiscal quarter and two fiscal quarters ended April 30, 2017. We believe aggregate sales to Apple Inc., through all channels, accounted for approximately 17% of our net revenue for the fiscal quarter ended May 6, 2018, 25% of our net revenue for the two fiscal quarters ended May 6, 2018 and 15% of our net revenue for both the fiscal quarter and two fiscal quarters ended April 30, 2017.1, 2022. We expect to continue to experience significant customer concentration in future periods. The loss of, or significant decrease in demand from, any of our top five end customers could have a material adverse effect on our business, results of operations and financial condition.
From time to time, some of our key semiconductor customers place large orders or delay orders, causing our quarterly net revenue to fluctuate significantly. This is particularly true inof our wireless communications segmentproducts as fluctuations may be magnified by the timing of launches, of, and seasonal variations in sales, of mobile handsets, as well as changes indevices. In addition, the overall economic environment.
In recent years, approximately 50% ofmacroeconomic environment remains uncertain and may cause our net revenue has come from sales to distributors, OEMsfluctuate significantly and contract manufacturers located in China. However, the end customers forimpact our products, or for the end products into which our products are incorporated, are frequently located in countries other than China. As a result, we believe that a substantially smaller percentageresults of our net revenue is ultimately dependent on sales of either our product, or our customers’ product incorporating our product, to end customers located in China.operations.

The following tables set forth net revenue by segment for the periods presented:
  Fiscal Quarter Ended Two Fiscal Quarters Ended
Net Revenue May 6, 2018 April 30, 2017 $ Change % Change May 6, 2018 April 30, 2017 $ Change % Change
                 
  (In millions, except for percentages)
Wired infrastructure $2,295
 $2,111
 $184
 9% $4,170
 $4,195
 $(25) (1)%
Wireless communications 1,294
 1,150
 144
 13% 3,504
 2,325
 1,179
 51 %
Enterprise storage 1,162
 712
 450
 63% 2,153
 1,419
 734
 52 %
Industrial & other 263
 217
 46
 21% 514
 390
 124
 32 %
Total net revenue $5,014
 $4,190
 $824
 20% $10,341
 $8,329
 $2,012
 24 %
Fiscal Quarter EndedTwo Fiscal Quarters Ended
Net Revenue by SegmentApril 30, 2023May 1, 2022$ Change% ChangeApril 30, 2023May 1, 2022$ Change% Change
(Dollars in millions)
Semiconductor solutions$6,808 $6,229 $579 9 %$13,915 $12,102 $1,813 15 %
Infrastructure software1,925 1,874 51 3 %3,733 3,707 26 1 %
Total net revenue$8,733 $8,103 $630 8 %$17,648 $15,809 $1,839 12 %
Fiscal Quarter EndedTwo Fiscal Quarters Ended
Net Revenue by SegmentApril 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
(As a percentage of net revenue)
Semiconductor solutions78 %77 %79 %77 %
Infrastructure software22 23 21 23 
Total net revenue100 %100 %100 %100 %
  Fiscal Quarter Ended Two Fiscal Quarters Ended
% of Net Revenue May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
Wired infrastructure 46% 50% 40% 50%
Wireless communications 26
 28
 34
 28
Enterprise storage 23
 17
 21
 17
Industrial & other 5
 5
 5
 5
Total net revenue 100% 100% 100% 100%
Fiscal quarter ended May 6, 2018 compared to corresponding prior year period. Net revenue from our wired infrastructuresemiconductor solutions segment increased primarily in the fiscal quarter and two fiscal quarters ended April 30, 2023 compared to the prior year fiscal periods due to an increase instrong product demand, primarily for our networking, application-specific integrated circuit, or ASIC,server storage and broadband products, and an increase in demand from our data center and enterprise customers for our standard networking products. This increase was partially offset by a decrease inlower demand for our set top box and fiber opticwireless products. Net revenue from our wireless communicationsinfrastructure software segment increasedin the fiscal quarter and two fiscal quarters ended April 30, 2023 compared to the prior year fiscal periods primarily due to an increaseincreases in our wireless content in handsets. Net revenuesales from our enterprise storage segment increased primarily due to contributions from the Brocade FC SAN business and an increase in demand for our server storage connectivitymainframe solutions products, partially offset by a decrease inlower demand for our hard disk drive, or HDD, products. Net revenue from our industrial & other segment increased primarily due to an increase in demand for our optocoupler and motion control products.
Two fiscal quarters ended May 6, 2018 compared to corresponding prior year period. Net revenue from our wired infrastructure segment was relatively flat, reflecting a decrease in demand for our standard networking, optical and set top box products primarily offset by an increase in demand for our networking ASIC products. Net revenue from our wireless communications segment increased primarily due to an increase in our wireless content in handsets, as well as a later than typical new handset ramp with a major customer, which resulted in higher shipments in the two quarters, as compared to the corresponding prior year period. Net revenue from our enterprise storage segment increased primarily due to contributions from the Brocade FC SAN business and an increase in demand for our server storage connectivity products, partially offset by a decrease in demand for our HDD products. Net revenue from our industrial & other segment increased primarily due to an increase in IP licensing revenue and an increase in demand for our optocoupler products.
Gross Margin
Gross margin was $2,551$6,115 million, for the fiscal quarter ended May 6, 2018 compared to $1,976 millionor 70% of net revenue, for the fiscal quarter ended April 30, 2017. Gross margin was $5,1792023 compared to $5,439 million, or 67% of net revenue, for the two fiscal quartersquarter ended May 6, 2018 compared to $3,9771, 2022, and $12,119 million, or 69% of net revenue, for the two fiscal quarters ended April 30, 2017. These increases were primarily due to the increases in net revenue2023 compared to the prior periods, partially offset by increases in amortization of acquisition-related intangible assets.
As a percentage$10,488 million, or 66% of net revenue, gross margin was 51% and 47% for the fiscal quarters ended May 6, 2018 and April 30, 2017, respectively. As a percentage of net revenue, gross margin was 50% and 48% for the two fiscal quarters ended May 6, 2018 and April 30, 2017, respectively. These1, 2022.
The increases were primarily due to thelower amortization of acquisition-related intangible assets, mainly from our 2016 acquisition of Broadcom Corporation, slightly offset by less favorable gross margin impact of FC SAN products, as well as a more favorablewithin our semiconductor solutions segment driven primarily by product mix.

Research and Development Expense
Research and development expense increased $107$51 million, or 13%4%, for the fiscal quarter ended May 6, 2018 compared to the fiscal quarter ended April 30, 2017. Research and development expense increased $224$40 million, or 14%2%, for the two fiscal quarters ended May 6, 2018 compared to the two fiscal quarters ended April 30, 2017. Research and development expense as a percentage of net revenue was 18% and 20% for the two fiscal quarters ended May 6, 2018 and April 30, 2017, respectively. These increases in research and development expense dollars were primarily due to increases in stock-based compensation expense as well as the acquisition of Brocade. Stock-based compensation expense was higher in the fiscal quarter and two fiscal quarters ended May 6, 2018April 30, 2023, respectively, compared to the prior year fiscal periods. The increases were primarily due
25
to higher stock-based compensation expense as a result of annual employee equity awards granted at higher grant-date fair values. Researchvalues and development expense as a percentage of net revenue decreased in the fiscal year 2018 periods compared to the prior year periods, as revenue growth outpaced thean increase in research and developmentheadcount, partially offset by lower variable employee compensation expense.
Selling, General and Administrative Expense
Selling, general and administrative expense increased $90$70 million, or 44%19%, and $97 million, or 14%, for the fiscal quarter and two fiscal quarters ended May 6, 2018,April 30, 2023, respectively, compared to the prior year fiscal quarter ended April 30, 2017.periods. The increase in selling, general and administrative expense dollars wasincreases were primarily due to an increasehigher costs incurred in acquisition-related costs,connection with the acquisition of Brocadepending VMware Merger and an increase inhigher stock-based compensation expense. Stock-based compensation expense was higher in the fiscal quarter ended May 6, 2018 due toas a result of annual employee equity awards granted at higher grant-date fair values.
Selling, general and administrative expense increased $180 million, or 44%, for the two fiscal quarters ended May 6, 2018, compared to the two fiscal quarters ended April 30, 2017. The increase in selling, general and administrative expense dollars was primarily due to the acquisition of Brocade,an increase in acquisition-related costs and an increase in stock-basedvalues, partially offset by lower variable employee compensation expense. Stock-based compensation expense was higher in the fiscal quarter ended May 6, 2018 due to annual employee equity awards granted at higher grant-date fair values.
Amortization of Acquisition-Related Intangible Assets
Amortization of acquisition-related intangible assets recognized in operating expenses was $67decreased $50 million, or 13%, and $406$99 million, or 12%, for the fiscal quarter and two fiscal quarters ended May 6, 2018,April 30, 2023, respectively, compared to $442the prior year fiscal periods. The decreases were primarily due to lower amortization of customer-related intangible assets from our acquisition of LSI Corporation.
Restructuring, Impairment and Disposal Charges
Restructuring, impairment and disposal charges recognized in operating expenses decreased $9 million, or 50%, and $16 million, or 46%, for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively, compared to the prior year fiscal periods. The decreases were primarily due to lower lease-related charges following the completion of key restructuring activities from acquisitions.
Stock-Based Compensation Expense
Total stock-based compensation expense was $513 million and $882$904 million for the fiscal quarter and two fiscal quarters ended April 30, 2017, respectively. The decreases were primarily due to the full amortization of certain intangible assets acquired in our acquisition of Broadcom Corporation, or BRCM, partially offset by the addition of amortization of intangible assets acquired in the Brocade Merger.
Restructuring, Impairment2023, respectively, and Disposal Charges
Restructuring, impairment and disposal charges recognized in operating expenses, primarily related to employee termination costs, were $53$386 million and $183$773 million for the fiscal quarter and two fiscal quarters ended May 6, 2018, respectively, compared1, 2022, respectively. The increases were primarily due to $27 million and $73 million forannual employee equity awards granted at higher grant-date fair values during the fiscal quarter and two fiscal quarters ended April 30, 2017, respectively. These increases were mainly due to increases in restructuring activities resulting from the Brocade Merger.2023.

Segment Operating Results
The following table sets forth operating income by segment for the periods presented:total unrecognized compensation cost related to unvested stock-based awards outstanding and expected to vest as of April 30, 2023. The remaining weighted-average service period was 3.8 years.
Fiscal Year:Unrecognized Compensation Cost, Net of Expected Forfeitures
(In millions)
2023 (remainder)$1,230 
20242,209 
20251,780 
20261,346 
2027670 
Thereafter122 
Total$7,357 
During the first quarter of fiscal year ended November 3, 2019 (“fiscal year 2019”), our Compensation Committee approved a broad-based program of multi-year equity grants of time- and market-based RSUs (the “Multi-Year Equity Awards”) in lieu of our annual employee equity awards historically granted on March 15 of each year. Each Multi-Year Equity Award vests on the same basis as four annual grants made on March 15 of each year, beginning in fiscal year 2019, with successive four-year vesting periods. We recognize stock-based compensation expense related to the Multi-Year Equity Awards from the grant date through their respective vesting date, ranging from 4 years to 7 years.
26
Table of Contents
  Fiscal Quarter Ended Two Fiscal Quarters Ended
Operating Income May 6, 2018 April 30, 2017 $ Change % Change May 6, 2018 April 30, 2017 $ Change % Change
                 
  (In millions, except for percentages)
Wired infrastructure $1,058
 $937
 $121
 13 % $1,845
 $1,870
 $(25) (1)%
Wireless communications 522
 414
 108
 26 % 1,581
 841
 740
 88 %
Enterprise storage 720
 382
 338
 88 % 1,299
 757
 542
 72 %
Industrial & other 152
 109
 43
 39 % 294
 170
 124
 73 %
Unallocated expenses (1,251) (1,368) 117
 (9)% (2,875) (2,658) (217) 8 %
Total operating income $1,201
 $474
 $727
 153 % $2,144
 $980
 $1,164
 (119)%
Segment Operating Results
Fiscal quarter ended May 6, 2018 compared to corresponding prior year period.
Fiscal Quarter EndedTwo Fiscal Quarters Ended
Operating Income by SegmentApril 30,
2023		May 1,
2022		$ Change% ChangeApril 30, 2023May 1, 2022$ Change% Change
(Dollars in millions)
Semiconductor solutions$4,000 $3,626 $374 10 %$8,123 $6,975 $1,148 16 %
Infrastructure software1,412 1,313 99 8 %2,719 2,620 99 4 %
Unallocated expenses(1,404)(1,545)141 (9)%(2,731)(3,093)362 (12)%
Total operating income$4,008 $3,394 $614 18 %$8,111 $6,502 $1,609 25 %
Operating income from our wired infrastructuresemiconductor solutions segment increasedin the fiscal quarter and two fiscal quarters ended April 30, 2023 compared to the prior year fiscal periods primarily due to an increase in demand for ourhigher net revenue from networking, ASIC productsserver storage, and an increase in demand from our data center and enterprise customers for our standard networkingbroadband products, partially offset by a decrease in demand for our set top box and fiber opticlower net revenue from wireless products. Operating income from our wireless communicationsinfrastructure software segment increasedin the fiscal quarter and two fiscal quarters ended April 30, 2023 compared to the prior year fiscal periods primarily due to higher revenue, largely resulting from an increase in our wireless content in handsets. Operating income from our enterprise storage segment increased due to contributions from the Brocade FC SAN business and an increase innet revenue from our server storage connectivitymainframe solutions products, partially offset by a decrease in demand for our HDD products. Operating incomelower net revenue from our industrial & other segment increased primarily due to an increase in demand for our optocoupler and motion control products.
Two fiscal quarters ended May 6, 2018 compared to corresponding prior year period. Operating income from our wired infrastructure segment was largely flat, reflecting a decrease in demand for our standard networking, optical and set top box products primarily offset by an increase in demand for our networking ASIC products. Operating income from our wireless communications segment increased primarily due to an increase in our wireless content in handsets, as well as a later than typical new handset ramp with a major customer, which resulted in higher shipments in the two quarters, as compared to the corresponding prior year period. Operating income from our enterprise storage segment increased primarily due to contributions from the Brocade FC SAN business and an increase in demand for our server storage connectivity products, partially offset by a decrease in demand for our HDD products. Operating income from our industrial & other segment increased primarily due to an increase in revenue from IP licensing and an increase in demand for our optocoupler products.
Unallocated expenses include amortization of acquisition-related intangible assets,assets; stock-based compensation expense,expense; restructuring, impairment and disposal charges,charges; acquisition-related costs,costs; and other costs that are not used in evaluating the results of, or in allocating resources to, our segments. Unallocated expenses decreased 9% in the fiscal quarter ended May 6, 2018 compared with the corresponding prior year period primarily due to a reduction in amortization of acquisition-related intangible assets, partially offset by an increase in stock-based compensation. Unallocated expenses increased 8% in the two fiscal quarters ended May 6, 2018 compared with the corresponding prior year period, primarily due to increases in stock-based compensation expense, restructuring, impairment and disposal charges, purchase accounting effect on inventory and acquisition-related costs, partially offset by a reduction in amortization of acquisition-related intangible assets.
Non-Operating Income and Expenses
Interest expense. Interest expense was $148 million and $331 million12% for the fiscal quarter and two fiscal quarters ended May 6, 2018,April 30, 2023, respectively, compared to the prior year fiscal periods, primarily due to lower amortization of acquisition-related intangible assets, partially offset by higher stock-based compensation expense.
Non-Operating Income and $112Expenses
Interest expense. Interest expense was $405 million and $223$811 million for the fiscal quarter and two fiscal quarters ended April 30, 2017,2023, respectively, compared to $518 million and $925 million for the fiscal quarter and two fiscal quarters ended May 1, 2022, respectively. These increasesThe decreases were primarily due to the issuance and sale of our senior unsecured notes in October 2017 and debt commitment fees related to the Brocade Merger.
Loss on extinguishment of debt. Losslosses on extinguishment of debt was $159 million forrelated to debt transactions incurred in the two fiscal quartersquarter ended April 30, 2017.May 1, 2022. We issued senior unsecured notesexpect to incur additional interest expense in January 2017 to repay all of the term loans outstanding under our guaranteed, collateralized credit agreement dated February 1, 2016. Asfuture periods as a result we wrote-off $159 million of debt issuance costs.indebtedness associated with the pending VMware Merger.
Other income (expense), net. Other income (expense), net, includes interest income, gains (losses)or losses on investments, foreign currency remeasurement and other miscellaneous items. Other income, net, was $46$113 million and $81 million for the fiscal quarter and two fiscal quarters ended May 6, 2018, respectively, and $3 million and $34 million for the fiscal quarter and two fiscal quarters ended April 30, 2017, respectively. These increases were primarily due to an increase in interest income and gains on foreign currency remeasurement.

Benefit from income taxes. For the fiscal quarter and two fiscal quarters ended May 6, 2018, we had a benefit from income taxes of $2,637 million and $8,423 million, respectively, compared to $103 million and $93$256 million for the fiscal quarter and two fiscal quarters ended April 30, 2017, respectively. The benefit from income taxes in the two fiscal quarters ended May 6, 2018 was principally a result2023, respectively, compared to other expense, net, of provisional income tax benefits realized from the enactment of the 2017 Tax Reform Act on December 22, 2017$86 million and included the net deferred tax liabilities established in connection with the Brocade Merger. The benefit$100 million for the fiscal quarter ended May 6, 2018 included the impact from the April 4, 2018 completion of the Redomiciliation Transaction and related internal reorganizations. The impact included tax benefits from the reduction of $1,063 million in unrecognized federal tax benefits related to a one-time transition tax, or the Transition Tax, $431 million in the Transition Tax payable and $1,162 million from the remeasurement of withholding taxes on undistributed earnings, partially offset by a $91 million tax provision on foreign earnings and profit subject to U.S. tax. We also recognized discrete benefits from the recognition of $127 million and $155 million of excess tax benefits from stock-based awards that were vested and/or exercised during the fiscal quarter and two fiscal quarters ended May 6, 2018,1, 2022, respectively.
Our provision for (benefit from) The changes were primarily due to higher interest income taxes in future periods is likely to change as a result of the impact of internal restructuring and reorganizations, excess tax benefits or tax deficiencies from stock-based awards,higher interest rates and changes in tax regulation.investment gains or losses.
Seasonality
Historically, our net revenue has typically been higher in the second half ofProvision for income taxes. The provision for income taxes was $235 million and $301 million for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively, compared to $200 million and $415 million for the fiscal quarter and two fiscal quarters ended May 1, 2022, respectively. The increase for the fiscal quarter ended April 30, 2023 compared to the prior year than in the first half,fiscal period was primarily due to seasonality in our wireless communications segment. This segment has historically experienced seasonality due to launcheshigher income before income taxes, partially offset by the recognition of new mobile handsets manufactured by our OEM customers. However, from time to time, typical seasonality and industry cyclicality are overshadowed by other factors such as wider macroeconomic effects, the timing of significant product transitions and launches by large OEMs, particularly in the wireless communications segment. We have a diversified business portfolio and our wired infrastructure segment generally represents the largest portion of our net revenue. We believe that our overall revenue is less susceptible to seasonal variationsuncertain tax benefits as a result of lapses of statutes of limitations. The decrease for the diversificationtwo fiscal quarters ended April 30, 2023 compared to the prior year fiscal period was primarily due to the recognition of our business portfolio.uncertain tax benefits as a result of lapses of statutes of limitations, partially offset by higher income before income taxes.
Liquidity and Capital Resources
The following section discusses our principal liquidity and capital resources as well as our principal liquidity requirements and uses of cash. Our cash and cash equivalents are maintained in highly liquid investments with remaining maturities of 90 days or less at the time of purchase. We believe our cash equivalents are liquid and accessible.
Our primary sources of liquidity as of May 6, 2018April 30, 2023 consisted of: (i) $8,187$11,553 million in cash and cash equivalents, and (ii) cash we expect to generate from operations.operations and (iii) available capacity under our $7.5 billion unsecured revolving credit facility. In addition, we may also generate cash from the sale of assets and debt or equity financing from time to time.
During the fiscal quarter and two fiscal quarters ended May 6, 2018, we sold $57 million
27
Table of trade accounts receivable in connection with our factoring facility.Contents
Our short-term and long-term liquidity requirements primarily arise from: (i) business acquisitions and investments we may make from time to time, including the pending VMware Merger, (ii) working capital requirements, (iii) research and development and capital expenditure needs, (iv) cash dividend payments (if and when declared by our Board of Directors), (v) stock repurchases, if any, (vi) interest and principal payments related to our $40,958 million of outstanding indebtedness, (vi) share repurchases, and (vii) payment of income taxes, including taxes resulting from the intercompany transfer of IP. Beginning in April 2018, we expect to settle applicable withholding tax amounts due upon vesting of compensatory equity awards using cash on hand, and withholding from the grant recipient that number of shares having a value equivalent to the withholding tax amount, referred to as the Tax Shares. This net settlement method reduces the dilutive effects of such awards as they vest. Previously, Tax Shares were issued and mandatorily sold into the market, and the cash proceeds were used to pay such withholding tax amounts. We expect this change to result in an increased use of our cash, particularly in our second fiscal quarter when the majority of our outstanding equity awards vest.taxes. Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control.
We expect our capital expenditures forto be higher in fiscal year 2018 will be lower than2023 as compared to fiscal year 2017, due primarily2022. Our debt and liquidity needs will increase as a result of the pending VMware Merger, and we intend to completionfund the cash portion of construction at our Irvine and San Jose campuses.the consideration with $32 billion in new, fully committed debt financing.
We believe that our cash and cash equivalents on hand, and cash flows from operations, our revolving credit facility, as well as the committed debt funding related to the pending VMware Merger, will provide sufficient liquidity to operate our business and fund our current and assumed obligations for at least the next 12 months.

For additional information regarding our cash requirement from contractual obligations and indebtedness, see Note 11. “Commitments and Contingencies” and Note 7. “Borrowings” in Part I, Item 1 of this Form 10-Q.
From time to time, we engage in discussions with third parties regarding potential acquisitions of, or investments in, businesses, technologies and product lines. Any such transaction, or evaluation of potential transactions, could require significant use of our cash and cash equivalents, or require us to increase our borrowings to fund such transactions. If we do not have sufficient cash to fund our operations or finance growth opportunities, including acquisitions, or unanticipated capital expenditures, our business and financial condition could suffer. In such circumstances, we may also seek to obtain new debt or equity financing. However, we cannot assure you that such additional financing will be available on terms acceptable to us or at all. Our ability to service our senior unsecured notes and any other indebtedness we may incur will depend on our ability to generate cash in the future. We may also elect to sell additional debt or equity securities for reasons other than those specified above.
SummaryIn addition, we may, at any time and Highlightsfrom time to time, seek to retire or purchase our outstanding debt through cash tenders and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such tenders, exchanges or purchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Our cashWorking Capital
Working capital decreased to $10,360 million at April 30, 2023 from $11,452 million at October 30, 2022. The decrease was primarily attributable to the following:
•Cash and cash equivalents decreased by $3,017 million to $8,187$11,553 million at May 6, 2018April 30, 2023 from $11,204$12,416 million at October 29, 2017.
The decrease was largely30, 2022, primarily due to the following:
•$4,780$3,994 million paid to fund the Brocade Merger;
•$856of common stock repurchases, $3,840 million payment of Brocade’s assumed debt;
•$1,521 million of dividend payments, $947 million of employee withholding tax payments related to net settled equity awards, and distribution payments;
•$409$260 million in capital expenditures;
•$347 million for repurchases of common stock; and
•$249 million for investment purchases.
The decrease was partiallya debt payment, substantially offset by the following:
•$3,998$8,538 million in net cash provided by operating activities;activities.
•$782 millionCurrent portion of proceedslong-term debt increased to $1,117 million at April 30, 2023 from sales$440 million at October 30, 2022 due to certain debt instruments becoming due within the next twelve months, partially offset by a repayment.
•Other current liabilities increased to $4,929 million at April 30, 2023 from $4,412 million at October 30, 2022, primarily due to increases in contract liabilities and derivative liabilities.
These decreases in working capital were offset in part by the following:
•Employee compensation and benefits decreased to $634 million at April 30, 2023 from $1,202 million at October 30, 2022, primarily due to the timing of businesses;employee bonus plan payments.
•$238Other current assets increased to $1,401 million at April 30, 2023 from $1,205 million at October 30, 2022, primarily due to purchases of proceedsshort-term investments and an increase in contract assets, offset in part by a decrease in prepaid income taxes.
•Accounts payable decreased to $831 million at April 30, 2023 from disposals$998 million at October 30, 2022, primarily due to the timing of property, plant and equipment; andvendor payments.

$112 million from shares issued upon exercises
28
Table of stock options and purchase rights under our employee stock purchase plan.Contents
Capital Returns
Two Fiscal Quarters Ended
Cash Dividends Declared and PaidApril 30,
2023		May 1,
2022
(In millions, except per share data)
Dividends per share to common stockholders$9.20 $8.20 
Dividends to common stockholders$3,840 $3,365 
Dividends per share to preferred stockholders$— $40.00 
Dividends to preferred stockholders$— $149 
On September 30, 2019, we issued approximately 4 million shares of 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value per share. These shares were converted into shares of our common stock during fiscal year 2022.
In April 2018,December 2021, our Board of Directors authorized thea stock repurchase ofprogram to repurchase up to $12$10 billion of our common stock from time to time on or priorthrough December 31, 2022, which was subsequently extended to November 3, 2019, the endDecember 31, 2023 (the “December 2021 Authorization”). In May 2022, our Board of Directors authorized another stock repurchase program to repurchase up to an additional $10 billion of our common stock from time to time through December 31, 2023 (the “May 2022 Authorization”). As of April 30, 2023, $9,006 million of the authorized amount remained available for repurchases.
During the two fiscal year 2019. Under our stock repurchase program,quarters ended April 30, 2023 and May 1, 2022, we repurchased and retired approximately 1.57 million and 9 million shares of our common stock at a weighted average price of $230.50 in the fiscal quarter ended May 6, 2018. As of May 6, 2018, $11,653for $3,994 million of the current authorization remained availableand $5,500 million, respectively, under ourthese stock repurchase program.programs.
Repurchases under our stock repurchase programprograms may be effected through a variety of methods, including open market or privately negotiated purchases. The timing and numberamount of shares of common stock repurchased will depend on a variety of factors, includingthe stock price, general business and market conditions, corporate and regulatory requirements, alternative investment opportunities.opportunities, acquisition opportunities, and other factors. We are not obligated to repurchase any specific numberamount of shares of common stock, and wethe stock repurchase programs may suspendbe suspended or discontinue our repurchase programterminated at any time.
During the two fiscal quarters ended April 30, 2023 and May 1, 2022, we paid approximately $947 million and $889 million, respectively, in employee withholding taxes due upon the vesting of net settled equity awards. We withheld approximately 2 million shares of common stock from employees in connection with such net share settlements during each of the two fiscal quarters ended April 30, 2023 and May 1, 2022.
  Fiscal Quarter Ended Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017		 May 6,
2018		 April 30,
2017
         
  (In millions, except per share data)
Cash dividends and distributions paid per share/unit $1.75
 $1.02
 $3.50
 $2.04
Cash dividends and distributions paid $766
 $437
 $1,521
 $868
Stock repurchases $347
 $—
 $347
 $—

Cash Flows
  Two Fiscal Quarters Ended
  May 6,
2018		 April 30,
2017
     
  (In millions)
Net cash provided by operating activities $3,998
 $2,936
Net cash used in investing activities (4,382) (812)
Net cash used in financing activities (2,633) (967)
Net change in cash and cash equivalents $(3,017) $1,157
Two Fiscal Quarters Ended
April 30,
2023		May 1,
2022
(In millions)
Net cash provided by operating activities$8,538 $7,729 
Net cash used in investing activities(421)(619)
Net cash used in financing activities(8,980)(10,268)
Net change in cash and cash equivalents$(863)$(3,158)
Operating Activities
Cash provided by operating activities representsconsisted of net income adjusted for certain non-cash and other items and changes in assets and liabilities. The $1,062$809 million increase in cash provided by operations during the two fiscal quarters ended May 6, 2018,April 30, 2023 compared to the twoprior year fiscal quarters ended April 30, 2017,period was primarily due to the impact of$2,193 million higher net income and adjustments for non-cash items, offset bya $267 million increase resulting from changes in operating assets and liabilities. Net income for the two fiscal quarters ended May 6, 2018 reflects an income tax benefit of $8,423liabilities, offset in part by $1,651 million principally resulting from the enactment of the 2017 Tax Reform Act and the impact from the Redomiciliation Transaction and related internal reorganizations. This benefit was primarilylower non-cash and resulted in a significant adjustment to net income and included in theadjustments including deferred taxes and other non-cash taxes, line in the condensed consolidated statement of cash flows for the two fiscal quarters ended May 6, 2018. Other non-cash adjustments to net income during the two fiscal quarters ended May 6, 2018, as compared to the two fiscal quarters ended April 30, 2017, primarily included a decrease in depreciation and amortization and a decrease in the non-cash portion of the debt extinguishment loss, partially offset by an increase in stock-based compensation.intangible assets.
Investing Activities
Cash used inflows from investing activities primarily consisted primarily of cash used for acquisitions, capital expenditures and investments, offset by proceeds from salespurchases of businesses and assets.investments. The change$198 million decrease in cash used in investing cash flows for the two fiscal quarters ended May 6, 2018 compared toactivities during the two fiscal quarters ended April 30, 20172023 compared to the prior year fiscal period was primarily relateddue to $4,780$234 million in cash paid for the Brocade Merger and a $49 million increase in purchases of investmentsacquisitions in the twoprior year fiscal quarters ended May 6, 2018, partially offset by a $772 million increase in proceeds from salesperiod.
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Financing Activities
Cash used inflows from financing activities primarily consisted primarily of netour stock repurchases, dividend payments, proceeds and payments related to our long-term-debt, dividendlong-term borrowings, and distributionemployee withholding tax payments stock repurchases, the issuance of common stock pursuantrelated to our employeenet settled equity incentive plans and payments of debt issuance costs.awards. The change$1,288 million decrease in cash used in financing cash flows for the two fiscal quarters ended May 6, 2018 compared toactivities during the two fiscal quarters ended April 30, 20172023 compared to the prior year fiscal period was primarily due to an $856a $1,506 million payment of debt assumeddecrease in the Brocade Merger,stock repurchases and a $653$157 million change in net borrowing activities, offset in part by a $326 million increase in dividend and distribution payments and $347 million of stock repurchases.payments.
Indebtedness
See Note 6. “Borrowings” in Part I, Item 1 of this Form 10-Q.
Contractual Commitments
See Note 11. “Commitments and Contingencies” in Part I, Item 1 of this Form 10-Q.
Off-Balance Sheet Arrangements
We had no material off-balance sheet arrangements at May 6, 2018 as defined in Item 303(a)(4)(ii) of Regulation S-K under the Exchange Act.
Indemnifications
See Note 11. “Commitments and Contingencies” in Part I, Item 1 of this Form 10-Q.
Accounting Changes and Recent Accounting Standards
For a description of accounting changes and recent accounting standards, including the expected dates of adoption and estimated effects, if any, in our condensed consolidated financial statements, see Note 1. “Overview,“Overview, Basis of Presentation and Significant Accounting Policies”Policies” in Part I, Item 1 of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in market riskrisks from the information presented in Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk,” in the 20172022 Annual Report on Form 10-K.10-K, except as disclosed below.
Interest Rate Risk
Changes in interest rates affect the fair value of our outstanding debt. As of April 30, 2023, we had $41.0 billion in principal amount of debt outstanding, and the estimated aggregate fair value of debt was $35.6 billion. As of April 30, 2023, a hypothetical 50 basis points increase or decrease in market interest rates would change the fair value of debt, by a decrease or increase of approximately $1.5 billion. However, this hypothetical change in interest rates would not impact the interest expense on our debt as we only had fixed rate senior notes outstanding. To hedge variability of cash flows due to changes in the benchmark interest rate of anticipated future debt issuances, we have entered, and in the future may enter, into treasury rate lock contracts.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer or CEO,(“CEO”) and Chief Financial Officer or CFO,(“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of May 6, 2018.April 30, 2023. We maintain disclosure controls and procedures that are intendeddesigned to ensure that the information required to be disclosed in our Exchange Act filings is properly and timely recorded, processed, summarized and reported. These disclosure controls and procedures are also intended to ensure that information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures. Based on this evaluation, our CEO and CFO concluded that, as of May 6, 2018,April 30, 2023, our disclosure controls and procedures were effective at the reasonable assurance level.
In designing and evaluating our disclosure controls and procedures, our management recognizedrecognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and our management is required to applynecessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
(b) Changes in Internal Control over Financial Reporting. There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The information set forth under Note 11. “Commitments“Commitments and Contingencies”Contingencies” included in Part I, Item 1 of this Form 10-Q, is incorporated herein by reference. For an additional discussion of certain risks associated with legal proceedings, see “Risk Factors” immediately below.
Item 1A. Risk Factors
As noted above, Broadcom Inc. is the successor to Broadcom-Singapore. Following the Redomiciliation Transaction, after close of market trading on April 4, 2018, Broadcom-Singapore became an indirect wholly-owned subsidiary of Broadcom Inc. and we subsequently deregistered the Partnership.
Our business, operations and financial results are subject to various risks and uncertainties, including those described below, that could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. The following importantmaterial factors, among others, could cause our actual results to differ materially from historical results and those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors and oral statements.
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Risk Factors Summary
The following is a summary of the principal risks that could adversely affect our business, operations and financial results.
Risks Related to Our Business
•Adverse global economic conditions could have a negative effect on us.
•We operate in the highly cyclical semiconductor industry.
•The majority of our sales come from a small number of customers and a reduction in demand or loss of one or more of our significant customers may adversely affect our business.
•Dependence on contract manufacturing and suppliers of critical components within our supply chain may adversely affect our ability to bring products to market.
•We purchase a significant amount of the materials used in our products from a limited number of suppliers.
•Our business is subject to various governmental regulations and trade restrictions. Compliance with these regulations may cause us to incur significant expense and, if we fail to maintain compliance, we may be forced to cease manufacture and distribution of certain products or subjected to administrative proceedings and civil or criminal penalties.
•Global political and economic conditions and other factors related to our international operations could adversely affect us.
•We are subject to risks associated with our distributors and other channel partners, including product inventory levels and product sell-through.
•We are dependent on senior management and if we are unable to attract and retain qualified personnel, we may not be able to execute our business strategy effectively.
•The failure to complete or realize the expected benefits of our acquisition of VMware may adversely affect our business and our stock price.
•We may pursue acquisitions, investments, joint ventures and dispositions, which could adversely affect our results of operations.
•We may be involved in legal proceedings, including IP, securities litigation, and employee-related claims that could adversely affect our business.
•Our operating results are subject to substantial quarterly and annual fluctuations.
•Failure to adjust our manufacturing and supply chain to accurately meet customer demand could adversely affect our results of operations.
•Winning business in the semiconductor solutions industry is subject to a lengthy process that often requires us to incur significant expense, from which we may ultimately generate no revenue.
•Competition in our industries could prevent us from growing our revenue.
•A prolonged disruption of our manufacturing facilities, research and development facilities, warehouses or other significant operations, or those of our suppliers, could have a material adverse effect on us.
•We may be unable to maintain appropriate manufacturing capacity or product yields at our own manufacturing facilities.
•An impairment of the confidentiality, integrity, or availability of our information technology (“IT”) systems, or those of one or more of our corporate infrastructure vendors, could have a material adverse effect on our business.
•Our ability to maintain or improve gross margin.
•Our ability to protect the significant amount of IP in our business.
•Incompatibility of our software products with operating environments, platforms, or third-party products, demand for our products and services could decrease.
•Failure to enter into software license agreements on a satisfactory basis could adversely affect us.
•Licensed third party software used in our products may not be available to us in the future, which may delay product development and production or cause us to incur additional expense.
•Use of open source code sources, which, under certain circumstances could materially adversely affect us.
•Failure of our software products to manage and secure IT infrastructures and environments could have a material adverse effect on our business.
•We are subject to warranty claims, product recalls and product liability.
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•The complexity of our products could result in unforeseen delays or expense or undetected defects or bugs.
•We make substantial investments in research and development and unsuccessful investments could materially adversely affect our business, financial condition and results of operations.
•We collect, use, store, or otherwise process personal information, which subjects us to privacy and data security laws and contractual commitments, and our actual or perceived failure to comply with such laws and commitments could harm our business.
•The COVID-19 pandemic has disrupted normal business activity.
•We are subject to environmental, health and safety laws, which could increase our costs, restrict our operations and require expenditures.
•Environmental, social and governance matters may adversely affect our relationships with customers and investors.
•The average selling prices of semiconductor products in our markets have often decreased rapidly and may do so in the future.
•Fluctuations in foreign exchange rates could result in losses.
Risks Relating to Taxes
•Changes in tax legislation or policies could materially impact our financial position and results of operations.
•Our corporate income taxes could significantly increase if we are unable to maintain our tax concessions or if our assumptions and interpretations regarding tax laws and concessions prove to be incorrect.
•Our income taxes and overall cash tax costs are affected by a number of factors that could materially adversely affect financial results.
Risks Relating to Our Indebtedness
•Our substantial indebtedness could adversely affect our financial health and our ability to execute our business strategy.
•The instruments governing our indebtedness impose certain restrictions on our business.
•Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flows from our business to pay our substantial debt.
Risks Relating to Owning Our Common Stock
•Volatility of our stock price could result in substantial losses for our investors as well as class action litigation against us and our management.
•The amount and frequency of our stock repurchases may fluctuate.
•A substantial amount of our stock is held by a small number of large investors.
•There can be no assurance that we will continue to declare cash dividends.
For a more complete discussion of the material risks facing our business, see below.
Risks Related to Our Business
Adverse global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity.
A general slowdown in the global economy, including a recession, or in a particular region or industry, an increase in trade tensions with U.S. trading partners, inflation or a tightening of the credit markets could negatively impact our business, financial condition and liquidity. Adverse global economic conditions have from time to time caused or exacerbated significant slowdowns in the industries and markets in which we operate, which have adversely affected our business and results of operations. Macroeconomic weakness and uncertainty also make it more difficult for us to accurately forecast revenue, gross margin and expenses, and may make it more difficult to raise or refinance debt. An escalation of trade tensions between the U.S. and China has resulted in trade restrictions and increased tariffs that harm our ability to participate in Chinese markets or compete effectively with Chinese companies. Sustained uncertainty about, or worsening of, current global economic conditions and further escalation of trade tensions between the U.S. and its trading partners, especially China, and possible decoupling of the U.S. and China economies, could result in a global economic slowdown and long-term changes to global trade. Such events may also (i) cause our customers and consumers to reduce, delay or forgo technology spending, (ii) result in customers sourcing products from other suppliers not subject to such restrictions or tariffs, (iii) lead to the insolvency or consolidation of key suppliers and customers, and (iv) intensify pricing pressures. Any or all of these factors could negatively affect demand for our products and our business, financial condition and results of operations.
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We operate in the highly cyclical semiconductor industry.
The semiconductor industry is highly cyclical and is characterized by price erosion, wide fluctuations in product supply and demand, constant and rapid technological change, evolving technical standards, frequent new product introductions, and short product life cycles (for semiconductors and for many of the end products in which they are used). From time to time, these factors, together with changes in general economic conditions, cause significant upturns and downturns in the industry in general, and in our business in particular. The industry previously experienced a significant upturn due to a supply imbalance that resulted in record profitability and increases in average selling prices. The industry, however, is currently experiencing a downturn, and historically, such down-cycles have been characterized by diminished demand for end-user products, high inventory levels and periods of inventory adjustment, under-utilization of manufacturing capacity, changes in revenue mix, accelerated erosion of average selling prices and elimination of expedite fees leading to reduced profitability and a decline in our stock price. The Creating Helpful Incentives to Produce Semiconductors for America Act could also result in an increase in supply leading to excess inventory and a decrease in average selling prices. We expect our business to continue to be subject to cyclical downturns even when overall economic conditions are relatively stable. If we cannot offset industry or market downturns, our net revenue may decline and our financial condition and results of operations may suffer.
The majority of our sales come from a small number of customers and a reduction in demand or loss of one or more of our significant customers may adversely affect our business.
We are dependent on a small number of end customers, OEMs,original equipment manufacturers (“OEMs”), their respective contract manufacturers (“CMs”), and certain distributors for a majority of our business revenue and results of operations.revenue. For the two fiscal quarters ended May 6, 2018,April 30, 2023, sales to distributors accounted for 27%53% of our net revenue. DirectWe believe aggregate sales, through all channels, to FoxconnApple and our top five end customers, accounted for 12%approximately 20% and 35%, respectively, of our net revenue for the two fiscal quarters ended May 6, 2018. We believe our aggregate sales to our top five end customers, through all channels, accounted for approximately 38% and 43% of our net revenue for the fiscal quarter and two fiscal quarters ended May 6, 2018, respectively. We believe aggregate sales to Apple Inc., through all channels, accounted for approximately 17% and 25% of our net revenue for the fiscal quarter and two fiscal quarters ended May 6, 2018, respectively.April 30, 2023. This customer concentration increases the risk of quarterly fluctuations in our operating results and our sensitivity to any material adverse developments experienced by our significant customers.
In addition,Our semiconductor customers are not generally required to purchase specific quantities of products. Even when customers agree to source an agreed portion of their product needs from us, such arrangements often include pricing schedules or methodologies that apply regardless of the volume of products purchased, and those customers may not purchase the amount of product we expect. As a result, we may not generate the amount of revenue or achieve the level of profitability we expect under such arrangements. Moreover, our top customers’ purchasing power has, in some cases, given them the ability to make greater demands on us with regard to pricing and contractual terms in general. We expect this trend to continue, which may adversely affect our gross margin on certain products and, should we fail to comply with such terms, might also result in substantial liability that could harm our business, financial condition and results of operations.
Moreover, the terms and conditions under which we do business with most of our customers generally do not include commitments by those customers to purchase any specific quantities of products from us. Even in those instances where we enter into an arrangement under which a customer agrees to source an agreed portion of its product needs from us (provided that we are able to meet specified development, supply and quality commitments), the arrangement often includes pricing schedules or methodologies that apply regardless of volume of products purchased, and those customers may not purchase the amount of product we expect. As a result, we may not generate the amount of revenue or the level of profitability we expect under such arrangements. If we do not perform under these arrangements, we could also be liable for significant monetary damages. In addition, we are selling an increasing amount of our products through a limited number of distributors, which may expose us to additional customer concentration and related credit risks.
The loss of, or any substantial reduction in sales to, any of our majortop customers could have a material adverse effect on our business, financial condition, and results of operations and cash flows.
Dependence on contract manufacturing and suppliers of critical components within our supplychain may adversely affect our ability to bring products to market, damage ourreputation and adversely affect our results of operations.
We operate a primarily outsourced manufacturing business model that principally utilizes CMs, such as third-party wafer foundryfoundries and module assembly and test capabilities, referred to as contract manufacturers.capabilities. Our semiconductor products require semiconductor wafer manufacturers with state-of-the-art fabrication equipment and techniques, and most of our products are designed to be manufactured in a specific process, typically at one particular fab or foundry, either our own or with a particular contract manufacturer.

CM.
We depend on our contract manufacturersCMs to allocate sufficient manufacturing capacity to meet our needs, to produce products of acceptable quality at acceptable yields, and to deliver those products to us on a timely basis. Although we often have long-term contracts with our contract manufacturers, weWe do not generally have long-term capacity commitments. We obtaincommitments with our CMs and substantially all of our manufacturing services are on a purchase order basis andwith no minimum quantities. Further, our contract manufacturers have no obligationCMs may fail to provide us with any specified minimum quantities of product. Further,timely develop new, advanced manufacturing processes, including transitions to smaller geometry process technologies or, from time to time, our contract manufacturers will cease to, or will become unable to, manufacture a component for us. As the lead time neededtimes to identify, qualify and establish reliable production at acceptable yields with a new contract manufacturerCM is typically lengthy, there is often no readily available alternative source for the wafers or other contract manufacturing services we require, and there may be other constraints on our ability to change contract manufacturers.CMs. In addition, qualifying such contract manufacturersnew CMs is often expensive, and they may not produce products as cost-effectively as our current suppliers, which would reduce our margins. In any such circumstances, we may be unable to meet our customer demand and may fail to meet our contractual obligations. This could result in the payment of significant damages by us to our customers, and our net revenue could decline, adversely affecting our business, financial condition and results of operations.suppliers.
We utilize Taiwan Semiconductor Manufacturing Company Limited or TSMC, to produce the substantial majority(“TSMC”), one of our semiconductor wafers. TSMCCMs, manufactured approximately three-quarters90% of the wafers manufactured by our contract manufacturersCMs during the two fiscal quarters ended May 6, 2018. OurApril 30, 2023. We believe our wafer requirements represent a significantmeaningful portion of theTSMC’s total production capacity of TSMC.capacity. However, TSMC also fabricates wafers for other companies, including certainsome of our competitors, and could choose or be required to prioritize capacity for other customers or reduce or eliminate deliveries to us on short notice, ornotice. In addition, TSMC has, and may in the future, raise their prices to us, allus.
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If any of the foregoing circumstances occur, we may be unable to meet our customer demand, or to the same extent as our competitors, fail to meet our contractual obligations or forgo revenue opportunities. This could harmdamage our relationships with our customers or result in litigation for alleged failure to meet our obligations, payment of significant damages, and our net revenue could decline, adversely affecting our business, financial condition, results of operations and gross margin.
AnyFurther, any substantial disruption in the contract manufacturing services that we utilize, including TSMC’s supply of wafers to us, or in the other contract manufacturing services that we utilize, as a result of a natural disaster, climate change, water shortages, political unrest, military conflicts, geopolitical turmoil, trade tensions, government orders, medical epidemics, such as the COVID-19 pandemic, economic instability, equipment failure or other cause, could materially harm our business, customer relationships and results of operations.
We also depend on our contract manufacturers to timely develop new, advanced manufacturing processes, including, in the case of wafer fabrication, transitions to smaller geometry process technologies. If these new processes are not timely developed or we do not have sufficient access to them, we may be unable to maintain or increase our manufacturing efficiency to the same extent as our competitors or deliver products to our customers, which could result in loss of revenue opportunities and damage our relationships with our customers.
We purchase a significant amount of the materials used in our products from a limited number of suppliers.
Our manufacturing processes and those of our CMs rely on many materials, including silicon, gallium arsenide and indium phosphide (“InP”) wafers, copper lead frames, precious and rare earth metals, mold compound, ceramic packages and various chemicals and gases. We purchase a significant portionDuring the two fiscal quarters ended April 30, 2023, we purchased approximately two-thirds of our semiconductormanufacturing materials components and finished goods used in our products from a fewfive materials providers, some of which are single source suppliers. DuringAs certain materials are highly specialized, the two fiscal quarters ended May 6, 2018, we purchased approximately two-thirds of thelead time needed to identify and qualify a new supplier is typically lengthy and there is often no readily available alternative source. We do not generally have long-term contracts with our materials for our manufacturing processes from five materials providers. Substantiallyproviders and substantially all of our purchases are on a purchase order basis, and we do not generally have long-term contracts with our materials providers.basis. Suppliers may extend lead times, limit supplies, place products on allocation or increase prices due to commodity price increases, capacity constraints, inflation, or other factors, any of which maycould lead to interruption of supply or increased demand in the industry. In the event that we cannot timely obtain sufficient quantities of materials or at reasonable prices, the quality of the material deteriorates or we are not able to pass on higher materials or energy costs to our customers, our business, financial condition and results of operations could be adversely impacted.
We may pursue acquisitions, investments, joint ventures and dispositions, which could adversely affect our results of operations.
Our growth strategy includes the acquisition of, and investment in, businesses that offer complementary products, services and technologies, augment our market coverage, or enhance our technological capabilities. We may also enter into strategic alliances or joint ventures to achieve these goals. We may not be able to identify suitable acquisition, investment, alliance, or joint venture opportunities, or to consummate any such transactions. In addition, our original estimates and assumptions used in assessing any transaction that we make may be inaccurate and we may not realize the expected financial or strategic benefits of any such transaction.

Any acquisitions we may undertake involve risks and uncertainties, such as unexpected delays, challenges and related expenses, and diversion of management’s attention. For example, regulatory approvals required in connection with an acquisition, such as those from the U.S. Department of Justice or the Federal Trade Commission, may take longer than anticipated to obtain, may not be obtained at all or may contain materially burdensome conditions. If anymacroeconomic and geopolitical conditions, or changes to the structure of an acquisition are required to obtain these regulatory approvals, they may have the effect of jeopardizing or delaying completion of such acquisition or reducing our anticipated benefits of the transaction. If we agree to any material conditions in order to obtain any such approvals or if we fail to comply with any such conditions, our business and results of operations may be adversely affected. If we fail to complete an acquisition, our stock price could fall to the extent the price reflects an assumption that such acquisition will be completed, and we may have incurred significant unrecoverable costs. Further, the failure to consummate an acquisition may result in negative publicity and adversely impact our relationships with our customers, vendors and employees. We may become subject to legal proceedings relating to the acquisition and the integration of acquired businesses may not be successful. The integration of an acquired business involves significant challenges, including, among others: minimizing the disruption of our business, diversion of management’s attention from daily operations and integrating the personnel of acquired businesses; incurring significant restructuring charges and amortization expense, assuming liabilities and ongoing lawsuits, potential impairment of acquired goodwill and other intangible assets, and increasing our expenses and working capital requirements; and implementing our management information systems, operating systems and internal controls over the acquired operations. These difficulties may be complicated by factors such as the size of the business or entity acquired, geographic distances and cultural differences, lack of experience operating in the industry sectors or geographic markets of the acquired business, potential loss of key employees and customers, the potential for deficiencies in internal controls at the acquired or combined business, performance problems with the acquired business’ technology, exposure to unanticipated liabilities of the acquired business, insufficient revenue to offset increased expenses associated with the acquisition, adverse tax consequences and our potential inability to achieve the growth prospects or synergies expected from any such acquisition.
Failure to manage and successfully integrate the acquisitions we make, or to improve margins of the acquired businesses and products, could materially harm our business, operating results and margins.
Any future acquisitions we make may require significant additional debt or equity financing, which, in the case of debt financing, would increase our leverage and potentially negatively affect our credit ratings, and in the case of an equity or equity-linked financing, would be dilutive to our existing stockholders. Any downgrades in our credit ratings could adversely affect our ability to borrow by resulting in more restrictive borrowing terms or increased borrowing costs. As a result, we may be unable to complete acquisitions or other strategic transactions in the future to the same extent as in the past, or at all. These and other factors could harm our ability to achieve anticipated levels of profitability of acquired businesses or realize other anticipated benefits of an acquisition, and could adversely affect our business, financial condition and results of operations.
From time to time, we may also seek to divest or wind down portions of our business, both acquired or otherwise, or we may exit minority investments, each of which could materially affect our cash flows and results of operations. Any future dispositions we may make could involve risks and uncertainties, including our ability to sell such businesses on terms acceptable to us, or at all. In addition, any such dispositions could result in disruption to other parts of our business, potential loss of employees or customers, exposure to unanticipated liabilities or result in ongoing obligations and liabilities to us following any such dispositions. For example, in connection with such dispositions, we often enter into transition services agreements or other strategic relationships, including long-term research and development arrangements, sales arrangements or agree to provide certain indemnities to the purchaser in any such transaction, which may result in additional expense and may adversely affect our financial condition and results of operations. In addition, dispositions may include the transfer of technology and/or the licensing of certain IP rights to third-party purchasers, which could limit our ability to assert our IP rights against such third-party purchasers.
Failure to adjust our manufacturing and supply chain to accurately meet customers demand could adversely affect ourresults of operations.
We make significant decisions, including determining the levels of business that we will seek and accept, production schedules, levels of reliance on contract manufacturing and outsourcing, internal fabrication utilization and other resource requirements, based on our estimates of customer requirements. Factors that can impact our ability to accurately estimate future customer requirements include the short-term nature of many customers’ commitments, our customers’ ability to reschedule, cancel and modify orders with little or no notice and without significant penalty, the accuracy of our customers’ forecasts and the possibility of rapid changes in demand for our customers’ products, as well as seasonal or cyclical trends in their industries or the semiconductor industry.
To ensure availability of our products, particularly for our largest customers, we typically start manufacturing our relevant products based on our customers’ forecasts, which are not binding. As a result, we incur inventory and manufacturing costs in

advance of anticipated sales that may never materialize or which may be substantially lower than expected. If actual demand for our products is lower than forecast, we may also experience higher inventory carrying and operating costs and product obsolescence. Because certain of our sales, research and development, and internal manufacturing overhead expenses are relatively fixed, a reduction in customer demand may also decrease our gross margin and operating income.
Conversely, customers often require rapid increases in production on short notice. We may be unable to secure sufficient materials or contract manufacturing capacity to meet such increases in demand. This could damage our customer relationships, reduce revenue growth and margins, subject us to additional liabilities, harm our reputation, and prevent us from taking advantage of opportunities.
We are dependent on a limited number of markets, and dynamics in these markets could negatively impact our business or results of operations.
We operate in a limited number of markets. If demand in these markets declines or grows at a significantly slower pace than expected, our results may be adversely affected. The success of our wired infrastructure segment is primarily dependent on information technology, or IT, and data center spending, which can vary dramatically from quarter to quarter, consumer demand for traditional pay-TV services, capital expenditures on the installation of broadband capacity and our ability to transition our products to increasingly smaller line width geometries. Our wireless communications segment is primarily dependent on the mobile handset market, which is characterized by intense competition, rapidly evolving technologies and changing consumer preferences, and our success is dependent on the overall demand for mobile handsets and macroeconomic conditions in general, as well as the relative successCOVID-19 pandemic, caused some supply constraints and increases in prices, including with respect to wafers and substrates. Additionally, the supply of the mobile handsets into which our products are incorporated.
Similar to our wired infrastructure segment, our enterprise storage segment is dependent on data center spending, as well as HDD-related sales. In addition, the shift to cloud-based IT solutions and services, such as hyperscale computing, may adversely affect both our wired infrastructure and enterprise storage segments. We currently sell a substantial portion of our products for use in traditional enterprise data centers. As cloud-based IT solutions become more prevalent, our results of operations will suffer if we are unable to increase sales of our products to cloud-based data center providers.
We are subject to risks associated with our distributors, including product inventory levels andproduct sell-through.
We sell many of our products through distributors who maintain their own inventory of our products for sale to dealers and end customers. Sales to distributors accounted for 27% of our net revenue in the two fiscal quarters ended May 6, 2018. If our distributors are unable to sell an adequate amount of their inventory of our products in a given quarter or if they decide to decrease their inventories for any reason, our sales to these distributors and our revenue may decline. We also face the risk that our distributors may increase inventory levels of our products in any particular quarter in excess of future anticipated sales. If such sales do not occur in the time frame anticipated by these distributors for any reason, these distributors may substantially decrease the amount of product they order from us in subsequent periods until their inventory levels realign with end customer demand, which would harm our business and could adversely affect our revenue in such subsequent periods. We have streamlined the number of distributors we use, making us increasingly dependent on our remaining distributors, which may exacerbate the foregoing risks and increase our related credit risk.
We do not always have a direct relationship with the end customers of our products. As a result, our productsmaterials may be used in applications for which they were not necessarily designed or tested, including, for example, medical devices,negatively impacted by increased trade tensions between the U.S. and they may not perform as anticipated inits trading partners, particularly China. Any such applications. In such event, failure of even a small number of partssupply constraints could result in significant liabilities to us, damage our reputation and harm our business and results of operations.
Our business would be adversely affected by the departure of existing members of our senior management team.
Our success depends, in large part, on the continued contributions of our senior management team, and in particular, the services of Mr. Hock E. Tan, our President and Chief Executive Officer. None of our senior management is bound by written employment contracts. In addition, we do not currently maintain key person life insurance covering our senior management. The loss of any of our senior management could harm our ability to implement our business strategy and respond to the rapidly changing market conditions in which we operate.
Our operating results are subject to substantial quarterly and annual fluctuations.
Our revenue and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations may occur on a quarterly and annual basis and are due to a number of factors, many of which are beyond our control. These factors include, among others:
customer concentration and the gain or loss of significant customers;
the timing of launches by our customers of new products, such as mobile handsets, in which our products are included and changes in end-user demand for the products manufactured and sold by our customers;

changes in our product mix or customer mix and their effect on our gross margin;
the timing of receipt, reduction or cancellation of significant orders by customers;
fluctuations in the levels of component inventories held by our customers;
utilization of our internal manufacturing facilities and fluctuations in manufacturing yields;
our ability to successfully and timely integrate, and realize the benefits of acquisitions we may make and the timing of acquisitions or dispositions of, or making and exiting investments in, other entities, businesses or technologies;
changes in taxation of international businesses, which could increase our overall cash tax costs;
changes in our tax structure or incentive arrangements, which may adversely affect our net tax expense and our cash flow in any quarter in which such an event occurs;
our ability to develop, introduce and market new products and technologies on a timely basis;
the timing and extent of our non-product revenue, such as product development revenue and royalty and other payments from IP sales and licensing arrangements;
new product announcements and introductions by us or our competitors;
seasonality or other fluctuations in our markets;
IP disputes and associated litigation expense;
timing and amount of research and development and related new product expenditures, and the timing of receipt of any research and development grant monies;
significant warranty claims, including those not covered by our suppliers or our insurers;
availability and cost of raw materials and components from our suppliers;
timing of any regulatory updates, particularly with respect to tax reform;
fluctuations in currency exchange rates;
loss of key personnel or the shortage of available skilled workers; and
the effects of competitive pricing pressures, including decreases in average selling prices of our products.
The foregoing factors are often difficult to predict, and these, as well as other factors, could materially adversely affect our quarterly or annual operating results. In addition, a significant amount of our operating expenses are relatively fixed in nature due to our significant sales, research and development, and internal manufacturing overhead costs. Any failure to adjust spending quickly enough to compensate for a revenue shortfall could magnify the adverse impact of such revenue shortfall on our results of operations. As a result, we believe that quarter-to-quarter comparisons of our revenue and operating results may not be meaningful or a reliable indicator of our future performance. If our operating results in one or more future quarters fail to meet the expectations of securities analysts or investors, an immediate and significant decline in the trading price of our common stock may occur.
If we are unable to attract and retain qualified personnel, especially ourengineering and technical personnel, we may not be able to execute our business strategyeffectively.
Our future success depends on our ability to retain, attract and motivate qualified personnel. We also seek to acquire talented engineering and technical personnel through acquisitions we may make from time to time or otherwise. We have historically encountered some difficulties in hiring and retaining qualified engineers, particularly in Silicon Valley and Southeast Asia where qualified engineers are in high demand. In addition, our employees, including employees whom we have retained as a result of an acquisition, may decide not to continue working for us and may leave with little or no notice. As the source of our technological and product innovations, our engineering and technical personnel represent a significant asset. Any inability to retain, attract or motivate such personnel could have a material adverse effect on our business, financial condition and results of operations.

Adverse global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity.
Adverse global economic conditions have from time to time caused or exacerbated significant slowdowns in the semiconductor industry generally, as well as in our target markets, which have adversely affected our business and results of operations. In recent periods, investor and customer concerns about the global economic outlook have adversely affected market and business conditions in general. Macroeconomic weakness and uncertainty also make it more difficult for us to accurately forecast revenue, gross margin and expenses. Sustained uncertainty about, or worsening of, current global economic conditions may cause our customers and consumers to reduce or delay spending, could lead to the insolvency of key suppliers and customers, and could intensify pricing pressures. Any or all of these factors could negatively affect demand for our products and our business, financial condition and result of operations.
We operate in the highly cyclical semiconductor industry, which is subject to significant downturns.
The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change and price erosion, evolving technical standards, frequent new product introductions, short product life cycles (for semiconductors and for many of the end products in which they are used) and wide fluctuations in product supply and demand. From time to time, these factors, together with changes in general economic conditions, cause significant upturns and downturns in the industry in general, and in our business in particular. Periods of industry downturns have been characterized by diminished demand for end-user products, high inventory levels and periods of inventory adjustment, under-utilization of manufacturing capacity, changes in revenue mix and accelerated erosion of average selling prices, resulting in an adverse effect on our business, financial condition and results of operations. We expect our business to continue to be subject to cyclical downturns even when overall economic conditions are relatively stable. If we cannot offset industry or market downturns, our net revenue may decline and our financial condition and results of operations may suffer.
The Redomiciliation Transaction will likely increase our cash tax cost.
As a result of the Redomiciliation Transaction and the effects of the 2017 Tax Reform Act, we expect our cash tax costs and overall effective cash tax rate will increase. There is still significant uncertainty as to how the 2017 Tax Reform Act will be implemented and as a result, our estimates of the overall cash tax impact of the Redomiciliation Transaction are expected to change as we continue to refine our analysis and as additional guidance becomes available. There is no assurance that the final determination of our income tax liability will not be materially different than what is reflected in our income tax provisions and accruals. Significant judgment is required to determine the recognition and measurement of tax liabilities prescribed in the relevant accounting guidance for uncertainty in income taxes.
Winning business is subject to lengthy, competitive bid selection processes that often require us to incur significant expense, from which we may ultimately generate no revenue.
Our business is dependent on us winning competitive bid selection processes, known as “design wins”. These selection processes are typically lengthy and can require us to dedicate significant development expenditures and scarce engineering resources in pursuit of a single customer opportunity. Failure to obtain a particular design win may prevent us from obtaining design wins in subsequent generations of a particular product. This can result in lost revenue and could weaken our position in future competitive bid selection processes.
Winning a product design does not guarantee sales to a customer or that we will realize as much revenue as anticipated, if any. A delay or cancellation of a customer’s plans could materially and adversely affect our financial results, as we incur significant expense in the design process and may generate little or no revenue from it. In addition, the timing of design wins is unpredictable and implementing production for a major design win, or multiple design wins occurring at the same time, may strain our resources and those of our contract manufacturers. In such event, we may be forced to dedicate significant additional resources and incur additional, unanticipated costs and expenses. Often customers will only purchase limited numbers of evaluation units from us until they qualify the products and/or the manufacturing line for those products. The qualification process can take significant time and resources and we may not always be able to satisfy customers’ qualification requirements. Delays in qualification or failure to qualify our products may cause a customer to discontinue use of our products and result in a significant loss of revenue. Finally, customers could choose at any time to stop using our products or may fail to successfully market and sell their products, which could reduce demand for our products, and cause us to hold excess inventory, materially adversely affecting our business, financial condition and results of operations. These risks are exacerbated by the fact that many of our products, and the end products into which our products are incorporated, often have very short life cycles.

Competition in our industry could prevent us from growing our revenue.
The global semiconductor market is highly competitive. We expect competition in the markets in which we participate to continue to increase as existing competitors improve or expand their product offerings. Competition may further increase as companies not currently in direct competition with us may introduce competing products in the future. In addition, the competitive landscape is changing as a result of a trend toward consolidation within the industry, as some of our direct competitors have merged with or been acquired by other competitors while others have begun collaborating with each other. We expect this consolidation trend to continue.
Some of our competitors may have greater resources for manufacturing, distribution, financial, research and development or marketing than us. In addition, some of our competitors may also have a greater presence in key markets, a larger customer base or more comprehensive IP portfolio and patent protection than us. We compete with integrated device manufacturers and fabless semiconductor companies, as well as the internal resources of large, integrated OEMs. Because our products are often building block semiconductors, providing functions that in some cases can be integrated into more complex integrated circuits, or ICs, we also face competition from manufacturers of ICs, as well as customers that may develop their own IC products. Our competitors in these markets range from large, international companies offering a wide range of semiconductor products and devices to smaller companies specializing in niche markets and new technologies.
If we are unable to compete successfully, we may lose market share for our products or incur significant reduction in our gross margins, any of which could have a material adverse effect on our business and results of operations.
A prolonged disruption of our manufacturing facilities, research and development facilities or other significant operations, or those of our suppliers, could have a material adverseeffect on our business, financial condition and results of operations.
Although we operate a primarily outsourced manufacturing business model, we also rely on our own manufacturing facilities, in particular in Fort Collins, Colorado, Singapore, and Breinigsville, Pennsylvania. We use these internal fabrication facilities for products utilizing our innovative and proprietary processes, to protect our IP, to accelerate time to market of our products and to ensure supply of certain components. Our Fort Collins and Breinigsville facilities are the sole sources for the film bulk acoustic resonator components used in many of our wireless devices and for the indium phosphide-based wafers used in our fibre optics products, respectively. Many of our facilities, and those of our contract manufacturers and suppliers, are located in California and the Pacific Rim region, which has above average seismic activity and severe weather activity. In addition, our research and development personnel are primarily concentrated in China, India, Israel, Malaysia, Singapore, South Korea, Taiwan, Fort Collins, Colorado, San Jose, California, Southern California and Breinigsville and Allentown, Pennsylvania, with the expertise of the personnel at each such location tending to be focused on one or two specific areas.
A prolonged disruption at one or more of our manufacturing or research facilities for any reason, especially our Fort Collins, Singapore and Breinigsville facilities, or those of our contract manufacturers or suppliers, due to natural- or man-made disasters or other events outside of our control, such as equipment malfunction or widespread outbreaks of acute illness at one or more of these facilities, would limit our capacity to meet customer demands and delay new product development until a replacement facility and equipment, if necessary, were found. Any such event would likely disrupt our operations, delay production, shipments and revenue, result in us being unable to timely satisfy customer demand, expose us to claims by our customers resulting in significant expense to repair or replace our affected facilities, and in some instances could significantly curtail our research and development efforts in a particular product area or target market. As a result, we could forgo revenue opportunities potentially lose market share, damage our customer relationships and be subject to litigation and additional liabilities, all of which could materially and adversely affect our business. Although we purchase insurance to mitigate certain losses, such insurance often carries a high deductible amount and any such uninsured losses could negatively affect our operating results. In addition, even if we were able to promptly resume production of our affected products, if our customers cannot timely resume their own manufacturing following such an event, they may cancel or scale back their orders from us and this may in turn adversely affect our results of operations. Such events could also result in increased fixed costs relative to the revenue we generate and adversely affect our results of operations.
We may be unable to maintain appropriate manufacturing capacity at our own manufacturing facilities, which could adversely affect our relationships with our customers, and our business, financial condition and results of operations.
We must maintain appropriate capacity at our own manufacturing facilities to meet anticipated customer demand for our proprietary products. From time to time, this requires us to invest in expansion or improvements of those facilities, which often involves substantial cost and other risks, such as delays in completion. Such expanded manufacturing capacity may still be insufficient, or may not come online soon enough, to meet customer demand and we may have to put customers on product allocation, forgo sales or lose customers as a result. Conversely, if we overestimate customer demand, we would experience excess capacity and fixed costs at these facilities, all of which could adversely affect our results of operations.

Any failure of our IT systems or one or more of our corporate infrastructure vendors to providenecessary services could have a material adverse effect on our business.
We depend on various IT systems, including networks, applications, internal IT systems and personnel, and outsourced services for, among other things, financial reporting and product orders and shipments. We rely on third-party vendors to provide critical corporate infrastructure services, including certain services related to accounting, billing, shipping, human resources, benefit plan administration, IT network development and network monitoring. While we may be entitled to damages if our vendors fail to perform under their agreements with us, we may be unable to collect on any award of damages and any award may be insufficient to cover the actual costs we may incur as a result of a vendor’s failure to perform under its agreement with us. Upon expiration or termination of any of our third-party vendor agreements we may not be able to timely replace the vendor on terms and conditions, including service levels and cost, that are favorable to us. In addition, a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.
Any failure of these internal or third-party systems and services to operate effectively could disrupt our operations and could have a material adverse effect on our business, financial condition and results of operations by harming our ability to accurately forecast sales demand, manage our supply chain and production facilities, fulfill customer orders, and report financial and other information on a timely and accurate basis.
Our gross margin is dependent on a number of factors, including our product mix, price erosion, acquisitions we may make, level of capacity utilization and commodity prices.
Our gross margin is highly dependent on product mix, which is susceptible to seasonal and other fluctuations in our markets. A shift in sales mix away from our higher margin products, as well as the timing and amount of our non-product and IP-related revenue, could adversely affect our future gross margin percentages. Although our non-product revenue is generally high margin, it fluctuates significantly from quarter to quarter. In addition, increased competition and the existence of product alternatives, more complex engineering requirements, lower demand or reductions in our technological lead, compared to our competitors, and other factors may lead to further price erosion, lower revenue and lower margin for us in the future.
Our gross margin may also be adversely affected by expenses related to the acquisitions of businesses, such as amortization of intangible assets and restructuring and impairment charges. Furthermore, businesses or companies that we acquire may have different gross margin profiles than us and could, therefore, also affect our overall gross margin.
In addition, semiconductor manufacturing requires significant capital investment, leading to high fixed costs, including depreciation expense. If we are unable to utilize our owned manufacturing facilities at a high level, the fixed costs associated with these facilities, such as depreciation expense, will not be fully absorbed, resulting in higher average unit costs and a lower gross margin. Furthermore, fluctuations in commodity prices, either directly in the price of the raw materials we buy, or as a result of price increases passed on to us by our suppliers, could negatively impact our margins. We do not hedge our exposure to commodity prices, some of which (including gold and fuel prices) are very volatile, and sudden or prolonged increases in commodities prices may adversely affect our gross margin.
We may be involved in legal proceedings, including IP, anti-competition and securities litigation, employee-related claims and governmental investigations, which could, among other things, divert efforts of management and result insignificant expense and loss of our IP rights.
We are often involved in legal proceedings, including cases involving our IP rights and those of others, anti-competition and commercial matters, merger-related suits, securities class action suits, employee-related claims and other actions. Some of these actions may seek injunctive relief, including injunctions or exclusion orders against the sale of our products and substantial monetary damages, which if granted or awarded could materially harm our business, financial condition and results of operations. From time to time, we may also be involved or required to participate in governmental investigations. Litigation or settlement of such actions, regardless of their merit, or involvement in governmental investigations, can be complex, can extend for a protracted period of time, may divert the efforts and attention of our management and technical personnel, is frequently costly and the related expenditures unpredictable. An unfavorable resolution of a governmental investigation may include, among others, fines or other orders to pay money, and/or the issuance of orders to cease certain conduct and/or modify our business practices.
The semiconductor industry is characterized by companies holding large numbers of patents, copyrights, trademarks and trade secrets and by the vigorous pursuit, protection and enforcement of IP rights, including actions by patent-holding companies that do not make or sell products. From time to time, third parties assert against us and our customers and distributors their patent, copyright, trademark, trade secret and other IP rights to technologies that are important to our business.

Many of our customer agreements, and in some cases our asset sale agreements, require us to indemnify our customers or purchasers for third-party IP infringement claims, including costs to defend those claims, and payment of damages in the case of adverse rulings. Claims of this sort could also harm our relationships with our customers and might deter future customers from doing business with us. We do not know whether we will prevail in such proceedings, given the complex technical issues and inherent uncertainties in IP litigation. If any pending or future proceedings result in an adverse outcome, we could be required to:
cease the manufacture, use or sale of the infringing products, processes or technology and/or make changes to our processes or products;
pay substantial damages for past, present and future use of the infringing technology;
expend significant resources to develop non-infringing technology;
license technology from the third-party claiming infringement, which license may not be available on commercially reasonable terms, or at all;
enter into cross-licenses with our competitors, which could weaken our overall IP portfolio and our ability to compete in particular product categories;
indemnify our customers or distributors and/or recall, or accept the return of, infringing products;
pay substantial damages to our direct or end customers to discontinue use or replace infringing technology with non-infringing technology; or
relinquish IP rights associated with one or more of our patent claims, if such claims are held invalid or otherwise unenforceable.
Any of the foregoing results could have a material adverse effect on our business, financial condition and results of operations.
In addition, we may be obligated to indemnify our current or former directors or employees, or former directors or employees of companies that we have acquired, in connection with litigation or regulatory investigations. These liabilities could be substantial and may include, among other things, the cost of defending lawsuits against these individuals, as well as stockholder derivative suits; the cost of government, law enforcement or regulatory investigations; civil or criminal fines and penalties; legal and other expenses; and expenses associated with the remedial measure, if any, which may be imposed.
We utilize a significant amount of IP in our business. If we areunable or fail to protect our IP, our business could be adverselyaffected.
Our success depends in part upon protecting our IP. To accomplish this, we rely on a combination of IP rights, including patents, copyrights, trademarks and trade secrets, as well as customary contractual protections with our customers, suppliers, employees and consultants. We may be required to spend significant resources to monitor and protect our IP rights, and even with significant expenditures we may not be able to protect our IP rights that are valuable to our business. We are unable to predict or assure that:
IP rights that we presently employ in our business will not lapse or be invalidated, circumvented, challenged, or, in the case of third-party IP rights licensed to us, be licensed to others;
our IP rights will provide competitive advantages to us;
rights previously granted by third parties to IP rights licensed or assigned to us, including portfolio cross-licenses, will not hamper our ability to assert our IP rights against potential competitors or hinder the settlement of currently pending or future disputes;
any of our pending or future patent, trademark or copyright applications will be issued or have the coverage originally sought;
our IP rights will be enforced in certain jurisdictions where competition may be intense or where legal protection may be weak; or
we have sufficient IP rights to protect our products or our business.

In addition, our competitors or others may develop products or technologies that are similar or superior to our products or technologies, duplicate our products or technologies or design around our protected technologies. Effective patent, trademark, copyright and trade secret protection may be unavailable or more limited in other jurisdictions, relative to those protections available in the United States, may not be applied for or may be abandoned in one or more relevant jurisdictions. We may elect to abandon or divest patents or otherwise not pursue prosecution of certain pending patent applications, due to strategic concerns or other factors. In addition, when patents expire, we lose the protection and competitive advantages they provided to us.
We also generate some of our revenue from licensing royalty payments and from technology claim settlements relating to certain of our IP. Licensing of our IP rights, particularly exclusive licenses, may limit our ability to assert those IP rights against third parties, including the licensee of those rights. In addition, we may acquire companies with IP that is subject to licensing obligations to other third parties. These licensing obligations may extend to our own IP following any such acquisition and may limit our ability to assert our IP rights. From time to time we pursue litigation to assert our IP rights, including, in some cases, against third parties with whom we have ongoing relationships, such as customers and suppliers. Claims of this sort could also harm our relationships with our customers and might deter future customers from doing business with us. Conversely, third parties may pursue IP litigation against us, including as a result of our IP licensing business. An adverse decision in such types of legal action could limit our ability to assert our IP rights and limit the value of our technology, including the loss of opportunities to sell or license our technology to others or to collect royalty payments based upon successful protection and assertion of our IP against others. In addition, such legal actions or adverse decisions could otherwise negatively impact our business, financial condition and results of operations.
From time to time we may need to obtain additional IP licenses or renew existing license agreements. We are unable to predict whether these license agreements can be obtained or renewed on acceptable terms or at all.
We are subject to warranty claims, product recalls and product liability.
From time to time, we may be subject to warranty or product liability claims that may in the future lead to significant expense. Our customer contracts typically contain warranty and indemnification provisions, and in certain cases may also contain liquidated damages provisions, relating to product quality issues. The potential liabilities associated with such provisions are significant, and in some cases, including in agreements with some of our largest customers, are potentially unlimited. Any such liabilities may greatly exceed any revenue we receive from the relevant products. Costs, payments or damages incurred or paid by us in connection with warranty and product liability claims and product recalls could materially and adversely affect our financial condition and results of operations. We may also be exposed to such claims as a result of any acquisition we may undertake in the future.
Product liability insurance is subject to significant deductibles and there is no guarantee that such insurance will be available or adequate to protect against all such claims, or we may elect to self-insure with respect to certain matters. It is possible for one of our customers to recall a product containing one of our devices. In such an event, we may incur significant costs and expenses, including among others, replacement costs, contract damage claims from our customers and reputational harm. Although we maintain reserves for reasonably estimable liabilities and purchase product liability insurance, our reserves may be inadequate to cover the uninsured portion of such claims. Conversely, in some cases, amounts we reserve may ultimately exceed our actual liability for particular claims and may need to be reversed.
The complexity of our products could result in unforeseen delays or expense or undetected defects or bugs, which could adversely affect the market acceptance of new products, damage our reputation with current or prospective customers, and materially and adversely affect our operating costs.
Highly complex products, such as those we offer, may contain defects and bugs when they are first introduced or as new versions are released, or their release may be delayed due to unforeseen difficulties during product development. If any of our products, including products of companies we have acquired, or third-party components used in our products, contain defects or bugs, or have reliability, quality or compatibility problems, we may not be able to successfully design workarounds. Furthermore, if any of these problems are not found until after we have commenced commercial production of a new product, we may be required to incur additional development costs and product recall, repair or replacement costs. Consequently, our reputation may be damaged and customers may be reluctant to buy our products, which could materially and adversely affect our ability to retain existing customers and attract new customers. To resolve these problems, we may have to invest significant capital and other resources. These problems may also result in claims against us by our customers or others. For example, if a delay in the manufacture and delivery of our products causes the delay of a customer’s end-product delivery, we may be required, under the terms of our agreement with that customer, to compensate the customer for the adverse effects of such delays. In addition, these problems may divert our technical and other resources from other development efforts, and we would likely lose, or experience a delay in, market acceptance of the affected product or products. As a result, our financial results could be materially and adversely affected.

We make substantial investments in research and development to enhance existing and develop new technologies to keep pace with technological advances and to remain competitive in our business, and unsuccessful investments could materially adversely affect our business, financial condition and results of operations.
The semiconductor industry is characterized by rapid technological change, changes in customer requirements, frequent new product introductions and enhancements, short product cycles and evolving industry standards, and requires substantial investment in our research and development in order to develop and bring to market new and enhanced technologies and products. In addition, semiconductor products transition over time to increasingly smaller line width geometries. This requires us to adapt our products and manufacturing processes to these new technologies, which requires expertise in new procedures. Our failure to successfully transition to smaller geometry process technologies could impair our competitive position. In order to remain competitive, we have made, and expect to continue to make, significant investments in research and development. We expect the dollar amount of research and development expenses to increase for the foreseeable future, due to the increasing complexity and number of products we plan to develop. If we fail to develop new and enhanced products and technologies, if we focus on technologies that do not become widely adopted, or if new competitive technologies that we do not support, become widely accepted, demand for our products may be reduced. Significant investments in unsuccessful research and development efforts could materially adversely affect our business, financial condition and results of operations. In addition, increased investments in research and development could cause our cost structure to fall out of alignment with demand for our products, which would have a negative impact on our financial results.
Our business, financial condition and results of operations could be adverselyaffected by the political and economic conditions of the countries in which weconduct business and other factors related to our international operations.
A majority of our products are produced and sourced in Asia, including China, India, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand, and we sell our products throughout the world. In addition, as of May 6, 2018, approximately 38% of our employees are located in Asia. Multiple factors relating to our international operations and to particular countries in which we operate could have a material adverse effect on our business, financial condition and results of operations. These factors include:
changes in political, regulatory, legal or economic conditions or geopolitical turmoil, including terrorism, war or political or military coups, or civil disturbances or political instability;
restrictive governmental actions, such as restrictions on the transfer or repatriation of funds and foreign investments and trade protection measures, including increasing protectionism, import/export restrictions, import/export duties and quotas, trade sanctions and customs duties and tariffs, all of which could increase under the current U.S. administration;
uncertainty regarding social, political and trade policies in the United States and abroad;
disruptions of capital and trading markets and currency fluctuations, which may result in our products becoming too expensive for foreign customers or foreign-sourced materials and services becoming more expensive for us;
difficulty in obtaining product distribution and support, and transportation delays;
difficulty in conducting due diligence with respect to business partners in certain international markets;
public health or safety concerns;
nationalization of businesses and expropriation of assets; and
changes in tax laws.
A significant legal risk associated with conducting business internationally is compliance with the various and differing laws and regulations, including anti-corruption and anti-bribery laws and regulations, of the countries in which we do business, antitrust and competition laws, data privacy laws and export regulations. In addition, the laws in various countries are constantly evolving and may, in some cases, conflict with each other. Although our Code of Ethics and Business Conduct and other policies prohibit us, our employees and our agents from engaging in unethical business practices, there can be no assurance that all of our employees or agents will refrain from acting in violation of our related anti-corruption policies and procedures. Any such violation could have a material adverse effect on our business.

Our business is subject to various governmental regulations, and compliance withthese regulations may cause us to incur significant expense. If we fail to maintaincompliance with applicable regulations, we may be forced to ceasethe manufacture and distribution of certain products, and we could be subject to administrative proceedings and civil or criminalpenalties.
Our business is subject to various domestic and international laws and other legal requirements, including packaging, product content, laboranti-competition and import/export regulations, such as the U.S. Export Administration Regulations, and many of our products are regulated or sold into regulated industries.applicable executive orders. These laws, regulations and regulationsorders are complex, may change frequently and with limited notice, and have generally and may continue to become more stringent over time and may intensify under the current U.S. administration.time. We may be required to incur significant expense to comply with, or to remedy violations of, these regulations. In addition, if our customers fail to comply with these regulations, we may be required to suspend sales to these customers, which could damage our reputation and negatively impact our results of operations. The U.S. government may also add companies to its restricted entity list and/or technologies to its list of prohibited exports to specific countries, which have had and may continue to have an adverse effect on our ability to sell our products and our revenue. For example, Huawei Technologies Co., Ltd., one of our customers, is subject to certain U.S. export restrictions, which has required us to suspend sales to Huawei until we obtain licenses from the U.S. Department of Commerce. We may be unable to obtain or maintain the necessary licenses to allow us to export products to them. These restrictive governmental actions and any similar measures that may be imposed on U.S. companies by other governments, especially in light of ongoing trade tensions with China, will likely limit or prevent us from doing business with certain of our customers or suppliers and harm our ability to compete effectively or otherwise negatively affect our ability to sell our products, and adversely affect our business and results of operations.
Our products and operations are also subject to regulation by U.S. and non-U.S. regulatory agencies, such as the U.S. Federal Trade Commission. From time to time, we may also be involved or required to participate in regulatory investigations or inquiries, such as the ongoing investigation by the Korean Fair Trade Commission into certain of our contracting and business practices, which may evolve into legal or other administrative proceedings. Growing public concern over concentration of economic power in corporations is likely to result in increased anti-competition legislation, regulation, administrative rule making, and enforcement activity. Involvement in regulatory investigations or inquiries, can be costly, lengthy, complex and time consuming, diverting the attention and energies of our management and technical personnel.
If any pending or future governmental investigations result in an unfavorable resolution, we could be required to cease the manufacture and sale of the subject products or technology, pay fines or disgorge profits or other payments, and/or cease certain conduct and/or modify our contracting or business practices, which could have a material adverse effect on our business, financial condition and results of operations. We may be obligated to indemnify our current or former directors or employees, or former directors or employees of companies that we have acquired, in connection with regulatory investigations. These liabilities could be substantial and may include, among other things, the cost of government, law enforcement or regulatory investigations and civil or criminal fines and penalties.
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In addition, the manufacture and distribution of our semiconductors must comply with various laws and adapt to changes in regulatory requirements as they occur. For example, if a country in which our products are manufactured or sold sets technical standards that are not widely shared, it may require us to stop distributing our products commercially until they comply with such new standards, lead certain of our customers to suspend imports of their products into that country, require manufacturers in that country to manufacture products with different technical standards and disrupt cross-border manufacturing relationships, any of which could have a material adverse effect on our business, financial condition and results of operations. If we fail to comply with these requirements, we could also be required to pay civil penalties or face criminal prosecution.
Global political and economic conditions and other factors related to our international operations could adversely affect our business, financial condition and results of operations.
A majority of our products are produced, sourced and sold internationally and our international revenue represents a significant percentage of our overall revenue. In addition, it is expected thatas of April 30, 2023, nearly 49% of our employees were located outside the current U.S. administration’s trade policy will promote U.S. manufacturingMultiple factors relating to our international operations and manufacturers. It is unclear whatto particular countries in which we operate could have a material adverse effect this will have on us as a multinational company that conducts business world-wide, or on our suppliers,business, financial condition and results of operations. These factors include:
•changes in political, regulatory, legal or economic conditions or geopolitical turmoil (including China-Taiwan relations), including terrorism, war or political or military coups, state-sponsored or politically motivated cyber-attacks, or civil disturbances or political instability (foreign and domestic);
•restrictive governmental actions, such as restrictions on the transfer or repatriation of funds and foreign investments, data privacy regulations, imposition of climate change regulations, and trade protection measures, including increasing protectionism, import/export restrictions (including with regards to advanced technologies), import/export duties and quotas, trade sanctions and customs duties and tariffs, all of which have increased in recent years;
•difficulty in obtaining product distribution and support, and transportation delays;
•potential inability to localize software products;
•difficulty in conducting due diligence with respect to business partners;
•public health or safety concerns, medical epidemics or pandemics, such as COVID-19, and other natural- or man-made disasters;
•nationalization of businesses and expropriation of assets; and
•changes in U.S. and foreign tax laws.
A significant legal risk associated with conducting business internationally is compliance with the various and differing laws and regulations of the many countries in which we do business. In addition, the laws in various countries are constantly evolving and may, in some cases, conflict with each other. Although our policies prohibit us, our employees and our agents from engaging in unethical business practices, there can be no assurance that all of our employees, distributors or other agents will refrain from acting in violation of our related anti-corruption or other policies and procedures. Any such violation could have a material adverse effect on our business.
We are subject to risks associated with our distributors and other channel partners, including product inventory levels andproduct sell-through.
We sell our products through a direct sales force and a select network of distributors and other channel partners globally. Sales to distributors accounted for 53% of our net revenue in the two fiscal quarters ended April 30, 2023 and are subject to a number of risks, including:
•fluctuations in demand based on our distributors’ product inventory levels and end customer demand;
•our distributors and other channel partners are generally not subject to minimum sales requirements or any obligation to market our products to their customers;
•our distributors and other channel partners agreements are generally nonexclusive and may be terminated at any time without cause;
•our lack of control over the timing of delivery of our products to end customers; and
•our distributors and other channel partners may market and distribute competing products and may place greater emphasis on the sale of these products.
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In addition, we sell our semiconductor products through an increasingly limited number of distributors, which exposes us to additional customer concentration and related credit risks.
We do not always have a direct relationship with the end customers contract manufacturersof our products. As a result, our semiconductor products may be used in applications for which they were not necessarily designed or tested, including, for example, medical devices, and OEMs.they may not perform as anticipated in such applications. In such event, failure of even a small number of parts could result in significant liabilities to us, damage our reputation and harm our business and results of operations.
Our productsbusiness would be adversely affected by the departure of existing members of our senior management team.
Our success depends, in large part, on the continued contributions of our senior management team, and operationsin particular, the services of Hock E. Tan, our President and Chief Executive Officer. Effective succession planning is also important for our long-term success. Failure to ensure effective transfers of knowledge and smooth transitions involving senior management could hinder our strategic planning and execution. None of our senior management is bound by written employment contracts. In addition, we do not currently maintain key person life insurance covering our senior management. The loss of any of our senior management could harm our ability to implement our business strategy and respond to the rapidly changing market conditions in which we operate.
If we are alsounable to attract and retain qualified personnel, especially ourengineering and technical personnel, we may not be able to execute our business strategyeffectively.
Our future success depends on our ability to attract, retain and motivate qualified personnel. As the source of our technological and product innovations, our engineering and technical personnel (including cyber security experts) are a significant asset. Competition for these employees is significant in many areas of the world in which we operate, particularly in Silicon Valley and Southeast Asia where qualified engineers are in high demand. In addition, current or future immigration laws may make it more difficult to hire or retain qualified engineers, further limiting the pool of available talent. We believe equity awards provide a powerful long-term retention incentive and have historically granted these awards to the substantial majority of our employees. If we are unable to continue our current equity granting philosophy, this could impair our efforts to attract and retain necessary personnel. Any inability to retain, attract or motivate such personnel and provide competitive employment benefits could have a material adverse effect on our business, financial condition and results of operations.
The failure to complete our acquisition of VMware may adversely affect our business and our stock price.
Consummation of the VMware Merger is subject to the rulessatisfaction or waiver of industrial standards bodies, likecustomary closing conditions, including (i) the International Standards Organization,expiration or termination of the waiting period under the HSR Act and clearance under the antitrust laws of the European Union and certain other jurisdictions, (ii) the receipt by VMware of a tax opinion regarding the U.S. federal income tax treatment of certain aspects of the VMware Merger, (iii) the absence of certain orders or laws preventing consummation of the VMware Merger, (iv) authorization for listing additional shares of Broadcom common stock on Nasdaq, and (v) the absence of a material adverse effect with respect to either us or VMware. There can be no assurance that these or other closing conditions will be satisfied in a timely manner or at all. Any delay in completing the acquisition could cause us not to realize some or all of the anticipated benefits when expected, if at all. If the VMware Merger is not completed, our stock price could decline to the extent it reflects an assumption that we will complete the acquisition. Furthermore, if the VMware Merger is not completed, we may suffer other consequences that could adversely affect our business, results of operations and stock price, including incurring significant acquisition costs that we would be unable to recover, negative publicity and a negative impression of us in the investment community. Additionally, under certain specified circumstances, including the termination by either us or VMware because certain required regulatory clearances are not obtained, upon termination we would be required to pay VMware a termination fee of $1.5 billion.
Failure to realize the benefits expected from the VMware Merger could adversely affect the value of our common stock.
Although we expect significant benefits to result from the VMware Merger, there can be no assurance that we will actually realize any of them, or realize them within the anticipated timeframe. Achieving these benefits will depend, in part, on our ability to integrate VMware's business successfully and efficiently. The challenges involved in this integration, which will be complex and time consuming, include the following:
•preserving customer and other important relationships of VMware and attracting new business and operational relationships;
•integrating financial forecasting and controls, procedures and reporting cycles;
•consolidating and integrating corporate, information technology, finance and administrative infrastructures;
•coordinating sales and marketing efforts to effectively position our capabilities;
•coordinating and integrating operations in countries in which we have not previously operated; and
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•integrating employees and related human resources (“HR”) systems and benefits, maintaining employee morale and retaining key employees.
If we do not successfully manage these issues and the other challenges inherent in integrating an acquired business, then we may not achieve the anticipated benefits of the VMware Merger within our anticipated timeframe or at all and our revenue, expenses, operating results, financial condition and stock price could be materially adversely affected. The successful integration of the VMware business will require significant management attention both before and after the completion of the VMware Merger, and may divert the attention of management from our business and operational issues.
We may pursue acquisitions, investments, joint ventures and dispositions, which could adversely affect our results of operations.
Our growth strategy includes acquiring or investing in businesses that offer complementary products, services and technologies, or enhance our market coverage or technological capabilities.
Any acquisitions we may undertake, including the VMware Merger, and their integration involve risks and uncertainties, such as:
•unexpected delays, challenges and related expenses, and disruption of our business;
•diversion of management’s attention from daily operations and the pursuit of other opportunities;
•incurring significant restructuring charges and amortization expense, assuming liabilities (some of which may be unexpected) and ongoing or new lawsuits, potential impairment of acquired goodwill and other intangible assets, and increasing our expenses and working capital requirements;
•the potential for deficiencies in internal controls at the acquired business, as well as regulationimplementing our own management information systems, operating systems and internal controls for the acquired operations;
•our due diligence process may fail to identify significant issues with the acquired business’ products, financial disclosures, accounting practices, legal, tax and other contingencies, compliance with local laws and regulations (and interpretations thereof) in the U.S. and multiple international jurisdictions;
•additional acquisition-related debt, which could increase our leverage and potentially negatively affect our credit ratings resulting in more restrictive borrowing terms or increased borrowing costs thereby limiting our ability to borrow;
•dilution of stock ownership of existing stockholders;
•difficulties integrating the acquired business or company and in managing and retaining acquired employees, vendors and customers; and
•inaccuracies in our original estimates and assumptions used to assess a transaction, which may result in us not realizing the expected financial or strategic benefits of any such transaction.
In addition, current and future changes to the U.S. and foreign regulatory approval process and requirements related to acquisitions, including the VMware Merger, may cause approvals to take longer than anticipated, not be forthcoming or contain burdensome conditions, which may prevent the transaction or jeopardize, delay or reduce the anticipated benefits of the transaction, and impede the execution of our business strategy.
From time to time, we may also seek to divest or wind down portions of our business, either acquired or otherwise, or we may exit minority investments, any of which could materially affect our cash flows and results of operations. Such dispositions involve risks and uncertainties, including our ability to sell such businesses on terms acceptable to us, or at all, disruption to other parts of our business, potential loss of employees or customers, or exposure to unanticipated liabilities or ongoing obligations to us following any such dispositions. In addition, dispositions may include the transfer of technology and/or the licensing of certain IP rights to third-party purchasers, which could limit our ability to utilize such IP rights or assert these rights against such third-party purchasers or other third parties.
We may be involved in legal proceedings, including IP, securities litigation, and employee-related claims, which could, among other things, divert efforts of management and result insignificant expense and loss of our IP rights.
We are often involved in legal proceedings, including cases involving our IP rights and those of others, commercial matters, acquisition-related suits, securities class action suits, employee-related claims and other actions. Litigation or settlement of such actions, regardless of their merit, can be costly, lengthy, complex and time consuming, diverting the attention and energies of our management and technical personnel.
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The industries in which we operate are characterized by companies holding large numbers of patents, copyrights, trademarks and trade secrets and by the vigorous pursuit, protection and enforcement of IP rights, including actions by patent-holding companies that do not make or sell products. From time to time, third parties assert against us and our customers and distributors their IP rights to technologies that are important to our business. For example, in August 2020 judgment was entered against Broadcom and Apple for infringement of certain patents and California Institute of Technology was awarded past damages of $270.2 million from Broadcom and $837.8 million from Apple, for which Apple is seeking indemnification from Broadcom. Although the appellate court recently vacated these damages and ordered a new trial, there are no assurances that we will be successful or what, if any, damages we will be required to pay.
Many of our customer agreements, and in some cases our asset sale agreements, and/or the laws of certain jurisdictions may require us to indemnify our customers or purchasers for third-party IP infringement claims, including costs to defend those claims, and payment of damages in the case of adverse rulings. However, our CMs and suppliers may or may not be required to indemnify us should we or our customers be subject to such third-party claims. Claims of this sort could also harm our relationships with our customers and might deter future customers from doing business with us. If any pending or future proceedings result in an adverse outcome, we could be required to:
•cease the manufacture, use or sale of the infringing products, processes or technology and/or make changes to our processes or products;
•pay substantial damages for past, present and future use of the infringing technology, including up to treble damages if willful infringement is found;
•expend significant resources to develop non-infringing technology;
•license technology from the third-party claiming infringement, which license may not be available on commercially reasonable terms, or at all;
•enter into cross-licenses with our competitors, which could weaken our overall IP portfolio and our ability to compete in particular product categories;
•pay substantial damages to our direct or end customers to discontinue use or replace infringing technology with non-infringing technology; or
•relinquish IP rights associated with one or more of our patent claims.
Any of the foregoing results could have a material adverse effect on our business, financial condition and results of operations.
In addition, we may be obligated to indemnify our current or former directors or employees, or former directors or employees of companies that we have acquired, in connection with such litigation. These liabilities could be substantial and may include, among other agencies,things, the cost of defending lawsuits against these individuals, as well as stockholder derivative suits; civil or criminal fines and penalties; legal and other expenses; and expenses associated with the remedial measure, if any, which may be imposed.
Our operating results are subject to substantial quarterly and annual fluctuations.
Our operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations may occur on a quarterly and annual basis and are due to a number of factors, many of which are beyond our control. In addition to many of the risks described elsewhere in this “Risk Factors” section, these factors include, among others:
•the timing of launches by our customers of new product in which our products are included and changes in end-user demand for our customers’ products;
•fluctuations in the levels of component or product inventories held by our customers, which may lead to increased requests to delay shipment of our products;
•the shift to cloud-based IT solutions and services, such as hyperscale computing, which may adversely affect the timing and volume of sales of our products for use in traditional enterprise data centers;
•the timing of new software contracts and renewals, as well as the timing of any terminations of software contracts that require us to refund to customers any pre-paid amounts under the contract;
•our ability to timely develop, introduce and market new products and technologies;
•the timing and extent of our software license and subscription revenue, and other non-product revenue;
•new product announcements and introductions by us or our competitors;
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•seasonality or other fluctuations in demand in our markets;
•timing and amount of research and development and related new product expenditures, and the timing of receipt of any research and development grant monies; and
•timing of any regulatory changes, particularly with respect to trade sanctions and customs duties and tariffs, and tax reform.
The foregoing factors are often difficult to predict, and these, as well as other factors, could materially adversely affect our quarterly or annual operating results. In addition, a significant amount of our operating expenses are relatively fixed in nature. Any failure to adjust spending quickly enough to compensate for a revenue shortfall could magnify the adverse impact of such revenue shortfall on our results of operations. As a result, we believe that quarter-to-quarter comparisons of our revenue and operating results may not be meaningful or reliable indicators of our future performance. If our operating results in one or more future quarters fail to meet the expectations of securities analysts or investors, a significant decline in the trading price of our common stock may occur, which may happen immediately or over time.
Failure to adjust our manufacturing and supply chain to accurately meet customer demand could adversely affect ourresults of operations.
We make significant decisions, including determining the levels of business that we will seek and accept, production schedules, levels of reliance on contract manufacturing and outsourcing, internal fabrication utilization and other resource requirements, based on customer requirements or estimates thereof, which may not be accurate.
We largely build to order and have extended customer lead times substantially, which has limited and may continue to limit our ability to fulfill orders and satisfy all of the demand for our products. Customers may require rapid increases in production on short notice. If we are unable to meet such increases in demand, this could damage our customer relationships, reduce revenue growth and margins, subject us to additional liabilities, harm our reputation, and prevent us from taking advantage of opportunities.
Conversely, if actual sales of our products is lower than expected, we may also experience higher inventory carrying and operating costs and product obsolescence. Because certain of our sales, research and development, and internal manufacturing overhead expenses are relatively fixed, a reduction in customer demand may also decrease our gross margin and operating income.
Winning business in the semiconductor solutions industry is subject to a lengthy process that often requires us to incur significant expense, from which we may ultimately generate no revenue.
Our semiconductor business is dependent on us winning competitive bid selection processes, known as “design wins”. These selection processes are typically lengthy and can require us to dedicate significant development expenditures and scarce engineering resources in pursuit of a single customer opportunity. Failure to obtain a particular design win may prevent us from obtaining design wins in subsequent generations of a particular product. This can result in lost revenue and can weaken our position in future selection processes.
Winning a product design does not guarantee sales to a customer. A delay or cancellation of a customer’s plans could materially and adversely affect our financial results, as we incur significant expense in the design process and may generate little or no revenue from it. In addition, the timing of design wins is unpredictable and implementing production for a major design win, or multiple design wins at the same time, may strain our resources and those of our CMs. In such event, we may be forced to dedicate significant additional resources and incur additional costs and expenses. Further, often customers will only purchase limited numbers of evaluation units until they qualify the products and/or the manufacturing line for those products. The qualification process can take significant time and resources. Delays in qualification or failure to qualify our products may cause a customer to discontinue use of our products and result in a significant loss of revenue. Finally, customers could choose at any time to stop using our products or could fail to successfully market and sell their products, which could reduce demand for our products, and cause us to hold excess inventory, materially adversely affecting our business, financial condition and results of operations. These risks are exacerbated by the fact that many of our products, and the end products into which our products are incorporated, often have very short life cycles.
Competition in our industries could prevent us from growing our revenue.
The industries in which we operate are highly competitive and characterized by rapid technological changes, evolving industry standards, changes in customer requirements, often aggressive pricing practices and, in some cases, new delivery methods. We expect competition in these industries to continue to increase as existing competitors improve or expand their product offerings or as new competitors enter our markets.
Some of our competitors have longer operating histories, greater name recognition, a larger installed customer base, larger technical staffs, more established relationships with vendors or suppliers, or greater manufacturing, distribution,
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financial, research and development, technical and marketing resources than us. We also face competition from numerous smaller companies that specialize in specific aspects of the highly fragmented software industry, open source authors who provide software and IP for free, competitors who offer their products through try-and-buy or freemium models, and customers who develop competing products.
In addition, the trend toward consolidation is changing the competitive landscape. We expect this trend to continue, which may result in combined competitors having greater resources than us. Some of our competitors may also receive financial and other support from their home country government or may have a greater presence in key markets, a larger customer base, a more comprehensive IP portfolio or better patent protection than us.
The actions of our competitors, in the areas of pricing and product bundling in particular, could have a substantial adverse impact on us. Further, competitors may leverage their superior market position, as well as IP or other proprietary information, including interface, interoperability or technical information, in new and emerging technologies and platforms that may inhibit our ability to compete effectively. If we are unable to compete successfully, we may lose market share for our products or incur significant reduction in our gross margins, either of which could have a material adverse effect on our business and results of operations.
A prolonged disruption of our manufacturing facilities, research and development facilities, warehouses or other significant operations, or those of our suppliers, could have a material adverseeffect on our business, financial condition and results of operations.
Although we operate a primarily outsourced manufacturing business model, we also rely on our own manufacturing facilities, in particular in Fort Collins, Colorado, Singapore, and Breinigsville, Pennsylvania. We use these internal fabrication facilities for products utilizing our innovative and proprietary processes. Our Fort Collins and Breinigsville facilities are the sole sources for the film bulk acoustic resonator components used in many of our wireless devices and for the InP-based wafers used in our fibre optics products, respectively. Many of our facilities, and those of our CMs and suppliers, are located in California and the Pacific Rim region, which have above average seismic activity and severe weather activity. In addition, a significant majority of our research and development personnel are located in the Czech Republic, India, Israel, and the U.S., with the expertise of the personnel at each such location tending to be focused on one or two specific areas, and our primary warehouse is in Malaysia.
A prolonged disruption at or shut-down of one or more of our manufacturing facilities or warehouses, especially our Colorado, Singapore, Malaysia and Pennsylvania facilities, or those of our CMs or suppliers, due to natural- or man-made disasters or other events outside of our control, such as equipment malfunction or widespread outbreaks of acute illness, including COVID-19, or for any other reason, would limit our capacity to meet customer demands and delay new product development until a replacement facility and equipment, if necessary, were found. To date, we have not experienced a material event, however such an event could disrupt our operations, delay production, shipments and revenue, result in us being unable to timely satisfy customer demand, expose us to claims by our customers, result in significant expense to repair or replace our affected facilities, and, in some instances, could significantly curtail our research and development efforts in a particular product area or target market. As a result, we could forgo revenue opportunities, potentially lose market share, damage our customer relationships and be subject to litigation and additional liabilities, all of which could materially and adversely affect our business. Although we purchase insurance to mitigate certain losses, such insurance often carries a high deductible amount and any uninsured losses could negatively affect our operating results. In addition, even if we were able to promptly resume production of our affected products, if our customers cannot timely resume their own manufacturing following such an event, they may cancel or scale back their orders from us and this may in turn adversely affect our results of operations. Such events could also result in increased fixed costs relative to the revenue we generate and adversely affect our results of operations.
We may be unable to maintain appropriate manufacturing capacity or product yields at our own manufacturing facilities, which could adversely affect our relationships with our customers, and our business, financial condition and results of operations.
We must maintain appropriate capacity and product yields at our own manufacturing facilities to meet anticipated customer demand. From time to time, this requires us to invest in expansion or improvements of those facilities, which often involves substantial cost and other risks. Such expanded manufacturing capacity may still be insufficient, or may not come online soon enough, to meet customer demand and we may have to put customers on product allocation, forgo sales or lose customers as a result. Conversely, if we overestimate customer demand, we would experience excess capacity and fixed costs at these facilities will not be fully absorbed, all of which could adversely affect our results of operations. Similarly, reduced product yields, due to design or manufacturing issues or otherwise, may involve significant time and cost to remedy and cause delays in our ability to supply product to our customers, all of which could cause us to forgo sales, incur liabilities or lose customers, and harm our results of operations.
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An impairment of the confidentiality, integrity, or availability of our IT systems, or those of one or more of our corporate infrastructure vendors could have a material adverse effect on our business.
Our business depends on a wide variety of complex IT systems and services, including cloud-based and other critical corporate services relating to, among other things, product research and development, financial reporting, product orders and fulfillment, HR, benefit plan administration, IT network management, and electronic communication and collaboration services. These systems and services are both internally managed and outsourced, and in many cases rely upon third-party data centers. Any failure of these internal or third-party systems and services to operate effectively could disrupt our operations and could have a material adverse effect on our business, financial condition and results of operations. Our operations are dependent upon our ability to protect our IT infrastructure against damage from business continuity events that could have a significant disruptive effect. Although these systems are designed to protect and secure our customers’, suppliers’ and employees’ confidential information, as well as our own proprietary information, we are, out of necessity, dependent on our vendors to adequately address cyber security threats to their own systems. In addition, software products we use (including technologies produced by us) have occasionally had in the past and may have in the future, vulnerabilities that, if left unmanaged, could reduce the overall level of security of the systems on which the software is installed.
Cyber-attacks are increasing in number and sophistication, are well-financed, in some cases supported by state actors, and are designed to not only attack, but also to evade detection. Since the techniques used to obtain unauthorized access to systems, or to otherwise sabotage them, change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Geopolitical instability, such as Russia’s invasion of Ukraine, may increase the likelihood that we will experience direct or collateral consequences from cyber conflicts between nation-states or other politically motivated actors targeting critical technology infrastructure. Accidental or willful security breaches or other unauthorized access to our information systems or the systems of our service providers, or the existence of computer viruses or malware (such as ransomware) in our or their data or software could expose us to a risk of information loss, business disruption, or misappropriation of proprietary and confidential information, including information relating to our products or customers and the personal information of our employees or third parties. Such an event could disrupt our business and result in, among other things, unfavorable publicity, damage to our reputation, loss of our trade secrets and other competitive information, litigation by affected parties and possible financial obligations for liabilities and damages related to the theft or misuse of such information, significant remediation costs, disruption of key business operations and significant diversion of our resources, as well as fines and other sanctions resulting from any related breaches of data privacy regulations (such as the General Data Protection Regulation), any of which could have a material adverse effect on our business, profitability and financial condition. While we may be entitled to damages if our vendors fail to perform under their agreements with us, any award may be insufficient to cover the actual costs incurred by us and, as a result of a vendor’s failure to perform, we may be unable to collect any damages.
Despite our internal controls and investment in security measures, we have, from time to time, been subject to disruptive cyber-attacks and attempts of unauthorized network intrusions and malware on our own IT networks. Although no such cyber security incidents have been material to Broadcom, we continue to devote resources to protect our systems and data from unauthorized access or misuse, and we may be required to expend greater resources in the future. Businesses we acquire may increase the scope and complexity of our IT networks, and this may increase our risk exposure to cyber-attack when there are difficulties integrating diverse legacy systems that support operations for the acquired businesses.
U.S. and foreign regulators, as well as customers and service providers, have also increased their focus on cyber security vulnerabilities and risks. Compliance with laws, regulations and contractual provisions concerning privacy, cyber security, secure technology development, data governance, data protection, confidentiality and IP could result in significant expense, and any failure to comply could result in proceedings against us by regulatory authorities or other third parties and may also increase our overall compliance burden.
Our gross margin is dependent on a number of factors, including our product mix, price erosion, acquisitions we may make, level of capacity utilization and commodity prices.
Our gross margin is highly dependent on product mix, which is susceptible to seasonal and other fluctuations in our markets. A shift in sales mix away from our higher margin products, as well as the timing and amount of our software licensing and non-product revenue, could adversely affect our future gross margin percentages. In addition, increased competition and the existence of product alternatives, more complex engineering requirements, lower demand, industry oversupply or reductions in our technological lead compared to our competitors, and other factors have in the past and may in the future lead to further price erosion, lower revenue and lower margin. Conversely, periods of robust demand that create a supply imbalance can lead to higher gross margins that may not be sustainable over the longer term.
In addition, semiconductor manufacturing requires significant capital investment, leading to high fixed costs, including depreciation expense. If we are unable to utilize our owned manufacturing facilities at a high level, the fixed costs associated with these facilities will not be fully absorbed, resulting in higher average unit costs and a lower gross margin. Furthermore,
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we do not hedge our exposure to commodity prices, some of which are very volatile, and sudden or prolonged increases in commodity prices may adversely affect our gross margin.
Our gross margin may also be adversely affected if businesses or companies that we acquire have different gross margin profiles and by expenses related to such acquisitions.
We utilize a significant amount of IP in our business. If we areunable or fail to protect our IP, our business could be adverselyaffected.
Our success depends in part upon protecting our IP. To accomplish this, we rely on a combination of IP rights, including patents, copyrights, trademarks and trade secrets, as well as customary contractual protections with our customers, suppliers, employees and consultants. We spend significant resources to monitor and protect our IP rights, including the unauthorized use of our products, usage rates of the software seat licenses and subscriptions that we sell, and even with significant expenditures, we may not be able to protect the IP rights that are valuable to our business. We are unable to predict or assure that:
•our IP rights will not lapse or be invalidated, circumvented, challenged, or, in the case of third-party IP rights licensed to us, be licensed to others;
•our IP rights will provide competitive advantages to us;
•rights previously granted by third parties to IP licensed or assigned to us, including portfolio cross-licenses, will not hamper our ability to assert our IP rights or hinder the settlement of currently pending or future disputes;
•any of our pending or future patent, trademark or copyright applications will be issued or have the coverage originally sought;
•our IP rights will be enforced in certain jurisdictions where competition is intense or where legal protection may be weak; or
•we have sufficient IP rights to protect our products or our business.
Effective IP protection may be unavailable or more limited in other jurisdictions, relative to those protections available in the U.S., and may not be applied for or may be abandoned in one or more relevant jurisdictions. In addition, when patents expire, we lose the protection and competitive advantages they provided to us.
We also generate revenue from licensing royalty payments and from technology claim settlements relating to certain of our IP. Licensing of our IP rights, particularly exclusive licenses, may limit our ability to assert those IP rights against third parties, including the licensee of those rights. In addition, we may acquire companies with IP that is subject to licensing obligations to other third parties. These licensing obligations may extend to our own IP following any such acquisition and may limit our ability to assert our IP rights. From time to time, we pursue litigation to assert our IP rights, including, in some cases, against our customers and suppliers. Claims of this sort could also harm our relationships with our customers and might deter future customers from doing business with us. Conversely, third parties have and may in the future pursue IP litigation against us, including as a result of our IP licensing business. An adverse decision in such types of legal action could limit our ability to assert our IP rights and limit the value of our technology, including the loss of opportunities to sell or license our technology to others or to collect royalty payments, which could otherwise negatively impact our business, financial condition and results of operations.
From time to time, we may need to obtain additional IP licenses or renew existing license agreements. We are unable to predict whether these license agreements can be obtained or renewed on acceptable terms or at all.
If our software products do not remain compatible with ever-changing operating environments, platforms, or third-party products, demand for our products and services could decrease, which could materially adversely affect our business.
We may be required to make substantial modification of our products to maintain compatibility with operating systems, systems software and computer hardware used by our customers or to provide our customers with desired features or capabilities. We must also continually address the challenges of dynamic and accelerating market trends and competitive developments, such as the U.S. Federal Communications Commission.emergence of advanced persistent threats in the security space to compete effectively. There can be no assurance that we will be able to adapt our products in response to these developments.
Further, our software solutions interact with a variety of software and hardware developed by third parties. If we lose access to third-party code and specifications for the development of code, this could negatively impact our ability to develop compatible software. In addition, if software providers and hardware manufacturers, including some of our largest vendors, adopt new policies restricting the use or availability of their code or technical documentation for their operating systems, applications, or hardware, or otherwise impose unfavorable terms and conditions for such access, this could result in higher research and development costs for the enhancement and modification of our existing products or development of new
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products. Any additional restrictions could materially adversely affect our business, financial condition and operating results and cash flow.
Failure to enter into software license agreements on a satisfactory basis could materially adversely affect our business.
Many of our existing customers have multi-year enterprise software license agreements, some of which involve substantial aggregate fee amounts. Customer renewal rates may decline or fluctuate as a result of a number of factors, including the level of customer satisfaction with our solutions or customer support, customer budgets and the pricing of our solutions as compared with the solutions offered by our competitors, any of which may cause our revenue to grow more slowly than expected, if at all. The failure to renew customer agreements of similar scope, on terms that are commercially attractive to us, could materially adversely affect our business, financial condition and operating results and cash flow.
Certain software that we use in our products is licensed from third parties and may not be available to us in the future, which may delay product development and production or cause us to incur additional expense.
Some of our solutions contain software licensed from third parties, some of which may not be available to us in the future on terms that are acceptable to us or allow our products to remain competitive. The loss of these licenses or the inability to maintain any of them on commercially acceptable terms could delay development of future products or the enhancement of existing products.
Certain software we use is from open source code sources, which, under certain circumstances could materially adversely affect our business, financial condition, operating results and cash flow.
Some of our products contain software from open source code sources, the use of which may subject us to certain conditions, including the obligation to offer such products for no cost or to make the proprietary source code of those products publicly available. Further, although some open source vendors provide warranty and support agreements, it is common for such software to be available “as-is” with no warranty, indemnity or support. Although we monitor our use of such open source code to avoid subjecting our products to unintended conditions, such use, under certain circumstances, could materially adversely affect our business, financial condition and operating results and cash flow, including if we are required to take remedial action that may divert resources away from our development efforts.
Failure of our software products to manage and secure IT infrastructures and environments could have a material adverse effect on our business.
Certain aspects of our software products are intended to manage and secure IT infrastructures and environments, and as a result, we expect these products to be ongoing targets of cyber-attacks. Open-source code or other third-party software used in these products could also be targeted. Although we continually seek to improve our countermeasures to prevent such incidents, we may be unable to anticipate every scenario and it is possible that certain cyber threats or vulnerabilities will be undetected or unmitigated in time to prevent an attack or an accidental incident on us and our customers. Additionally, efforts by malicious cyber actors or others could cause interruptions, delays or cessation of our product licensing, or modification of our software, which could cause us to lose existing or potential customers. A successful cyber-attack involving our products could cause customers and potential customers to believe our services are ineffective or unreliable and result in, among other things, the loss of customers, unfavorable publicity, damage to our reputation, difficulty in marketing our products, allegations by our customers that we have not performed our contractual obligations and give rise to significant costs, including costs related to developing solutions or indemnification obligations under our agreements. Any such event could adversely impact our revenue and results of operations. See also “An impairment of the confidentiality, integrity, or availability of our IT systems, or those of one or more of our corporate infrastructure vendors, could have a material adverse effect on our business”.
We are subject to warranty claims, product recalls and product liability.
From time to time, we may be subject to warranty or product liability claims that may lead to significant expense. Our customer contracts typically contain warranty and indemnification provisions, and in certain cases may also contain liquidated damages provisions, relating to product quality issues. The potential liabilities associated with such provisions are significant, and in some cases, including in agreements with some of our largest customers, are potentially unlimited. Any such liabilities may greatly exceed any revenue we receive from the relevant products. Costs, payments or damages incurred or paid by us in connection with warranty and product liability claims and product recalls could materially adversely affect our financial condition and results of operations. We may also be exposed to such claims as a result of any acquisition we may undertake in the future.
Product liability insurance is subject to significant deductibles and there is no guarantee that such insurance will be available or adequate to protect against all such claims, or we may elect to self-insure with respect to certain matters. For example, it is possible for one of our customers to recall a product containing one of our semiconductor devices. In such an event, we may incur significant costs and expenses, including among others, replacement costs, contract damage claims from
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our customers and reputational harm. Although we maintain reserves for reasonably estimable liabilities and purchase product liability insurance, our reserves may be inadequate to cover the uninsured portion of such claims. Conversely, in some cases, amounts we reserve may ultimately exceed our actual liability for particular claims and may need to be reversed.
The complexity of our products could result in unforeseen delays or expense or undetected defects or bugs, which could adversely affect the market acceptance of new products, damage our reputation with current or prospective customers, and materially and adversely affect our operating costs.
Highly complex products, such as those we offer, may contain defects and bugs when they are first introduced or as new versions, software documentation or enhancements are released, or their release may be delayed due to unforeseen difficulties during product development. If any of our products or third-party components used in our products, contain defects or bugs, or have reliability, quality or compatibility problems, we may not be able to successfully design workarounds. Furthermore, if any of these problems are not discovered until after we have commenced commercial production or deployment of a new product, we may be required to incur additional development costs and product recall, repair or replacement costs. Significant technical challenges also arise with our software products because our customers license and deploy our products across a variety of computer platforms and integrate them with a number of third-party software applications and databases. As a result, if there is system-wide failure or an actual or perceived breach of information integrity, security or availability occurs in one of our end-user customer’s system, it can be difficult to determine which product is at fault and we could ultimately be harmed by the failure of another supplier’s product. Consequently, our reputation may be damaged and customers may be reluctant to buy our products, which could materially and adversely affect our ability to retain existing customers and attract new customers. To resolve these problems, we may have to invest significant capital and other resources and we would likely lose, or experience a delay in, market acceptance of the affected product or products. These problems may also result in claims against us by our customers or others. For example, if a delay in the manufacture and delivery of our products causes the delay of a customer’s end-product delivery, we may be required, under the terms of our agreement with that customer, to compensate the customer for the adverse effects of such delays. As a result, our financial results could be materially adversely affected.
We make substantial investments in research and development and unsuccessful investments could materially adversely affect our business, financial condition and results of operations.
The industries in which we compete are characterized by rapid technological change, changes in customer requirements, frequent new product introductions and enhancements, short product cycles and evolving industry standards, and new delivery methods. In addition, semiconductor products transition over time to increasingly smaller line width geometries and failure to successfully transition to smaller geometry process technologies could impair our competitive position. In order to remain competitive, we have made, and expect to continue to make, significant investments in research and development. If we fail to adequately address anydevelop new and enhanced products and technologies, if we focus on technologies that do not become widely adopted, or if new competitive technologies that we do not support become widely accepted, demand for our products may be reduced. Increased investments in research and development or unsuccessful research and development efforts could cause our cost structure to fall out of these rulesalignment with demand for our products, which would have a negative impact on our financial results.
We collect, use, store, or regulations,otherwise process personal information, which subjects us to privacy and data security laws and contractual commitments, and our actual or perceived failure to comply with such laws and commitments could harm our business.
We collect, use and store (collectively, “process”) a high volume, variety and velocity of certain personal information in connection with the operation of our business. This creates various levels of privacy risks across different parts of our business, could be harmed.
Datadepending on the type of personal information, the jurisdiction in question and the purpose of their processing. The personal information we process is subject to an increasing number of federal, state, local, and foreign laws and regulations regarding privacy regulations are expanding and compliance with, and any violations of, these regulations may cause us to incur significant expenses.
data security, as well as contractual commitments. Privacy legislation and other data protection regulations, enforcement and policy activity in this area are expanding rapidly in many jurisdictions and creating a complex regulatory compliance environment. CostsSectoral legislation, certification requirements and technical standards applying to complycertain categories of our customers, such as those is the financial services or public sector, have exacerbated this trend. The cost of complying with and implementimplementing these privacy-related and data protectiongovernance measures could be significant. In addition, even our inadvertent failure to comply with federal, state or international privacy-relatedsignificant as they may create additional burdensome security, business process, business record or data protection lawslocalization requirements. Concerns about government interference, sovereignty, expanding privacy, cyber security and regulationsdata governance legislation could resultadversely affect our customers and our products and services, particularly in proceedings against us by governmental entities or others,cloud computing, artificial intelligence and substantial fines and damages.our own data management practices. The theft, loss or misuse of personal data collected, used, stored or transferred by us to run our business could result in significantly increased business and security costs or costs related to defending legal claims. Any inadvertent failure or perceived failure by us to comply with privacy, data governance or cyber security obligations may result in governmental enforcement actions, litigation, substantial fines and damages, and could cause our customers to lose trust in us, which could have an adverse effect on our reputation and business.
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The COVID-19 pandemic has disrupted normal business activity, which has impacted how we operate our business.
The COVID-19 pandemic and the efforts to control it disrupted, and reduced the efficiency of, normal business activities in much of the world. Authorities around the world implemented numerous unprecedented measures that impacted our workforce and operations, and those of our customers, CMs, suppliers and logistics providers resulting in significant logistical challenges and product delays. We experienced some disruption to parts of our global semiconductor supply chain, including procuring necessary components and inputs in a timely fashion, with suppliers increasing lead times or placing products on allocation. As a result of these supply chain disruptions, we increased customer order lead times, placed some products on allocation and are largely building semiconductor products to order, which has limited and may continue to limit our ability to fulfill orders and satisfy all of the demand for our products.
In response to the pandemic, we have taken extensive measures to protect the health and safety of our employees and contractors at our facilities. However, existing or new precautionary measures or modifications in our business practices and policies, may not be sufficient to mitigate the risk of infection, could result in a significant number of COVID-19-related claims or otherwise negatively impact our business or operations. In addition, changes to state workers’ compensation laws, such as those in California, may increase our potential liability for such claims. See also our risk factors “Our business would be adversely affected by the departure of existing members of our senior management team” and “If we are unable to attract and retain qualified personnel, especially our engineering and technical personnel, we may not be able to execute our business strategy effectively.”
The degree to which the pandemic ultimately impacts our business and results of operations will depend on future developments beyond our control, including the extent of actions to contain the virus (including any variants), availability and efficacy of the vaccines or other treatments, public acceptance of the vaccines (including boosters), and to what extent normal economic and operating conditions resume.
We are subject to environmental, health and safety laws, which could increase ourcosts, restrict our operations and require expenditures that could have a materialadverse effect on our results of operations and financial condition.
We are subject to a variety of domestic and international laws and regulations relating to the use, disposal, clean-up of and human exposure to hazardous materials. Compliance with environmental, health and safety requirements could, among other things, require us to modify our manufacturing processes, restrict our ability to expand our facilities, or require us to acquire pollution control equipment, all of which can be very costly. Any failure by us to comply with such requirements could result in the limitation or suspension of the manufacture of our products and could result in litigation against us and the payment of significant fines and damages by us in the event of a significant adverse judgment. In addition, complying with any cleanup or remediation obligations for which we are or become responsible could be costly and have a material adverse effect on our business, financial condition and results of operations.
Changing requirements relating to the materials composition of our semiconductor products, including the restrictions on lead and certain other substances in electronics that apply to specified electronicselectronic products sold in various countries, including the United States,U.S., China and Japan, and in the European Union, increase the complexity and costs of our product design and procurement operations and may require us to re-engineer our products. Such re-engineering may result in excess inventory or other additional costs and could have a material adverse effect on our results of operations. We may also experience claims from employees from time to time with regard to exposure to hazardous materials or other workplace related environmental claims.

SocialEnvironmental, social and environmental responsibility regulations, policies and provisions, as well as customer demand, may make our supply chain more complex andgovernance (“ESG”) matters may adversely affect our relationships with customers.customers and investors.
There is an increasing focus on corporate socialfrom regulators, investors, customers, employees and environmental responsibility in the semiconductor industry, particularly with OEMs that manufacture consumer electronics.other stakeholders concerning ESG matters, including environment, climate, diversity and inclusion, human rights and governance transparency. A number of our customers have adopted, or may adopt, procurement policies that include social and environmental responsibilityESG provisions or requirements that their suppliers should comply with, or they may seek to include such provisions or requirements in their procurement terms and conditions. An increasing number of participants in the semiconductor industryinvestors are also joining voluntary social responsibility initiatives suchrequiring companies to disclose ESG-related policies, practices and metrics. In addition, various jurisdictions are developing climate-related laws or regulations that could cause us to incur additional direct costs for compliance, as the U.N. Global Compact, a voluntary initiative for businesseswell as indirect costs resulting from our customers, suppliers, or additional compliance costs that are passed on to develop, implementus. These legal and disclose sustainability policiesregulatory requirements, as well as investor expectations, on ESG practices and practices. These social and environmental responsibility provisions and initiativesdisclosures, are subject to change, can be unpredictable, and may be difficult and expensive for us to comply with, given the complexity of our supply chain and our significant outsourced manufacturing. If we are unable to comply, or are unable to cause our suppliers or contract manufacturers to comply, with suchESG policies, or provisions,practices and initiatives do not meet the evolving expectations of our various stakeholders, a customer may stop purchasing products from us andor an investor may take legal action against us,sell their shares, which could harm our reputation, revenue and results of operations. Our actual or perceived failure to achieve our ESG-related initiatives could negatively impact our reputation or harm our business.
In addition, as part of their corporate social and environmental responsibilityESG programs, an increasing number of OEMs are seeking to source products that do not contain minerals sourced from areas where proceeds from the sale of such minerals are likely to be used to fund armed
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conflicts, such as in the Democratic Republic of Congo. This could adversely affect the sourcing, availability and pricing of minerals used in the manufacture of semiconductor devices, including our products. Since our supply chain is complex, we are not currently able to definitively ascertain the origins of all of these minerals and metals used in our products. As a result, we may face difficulties in satisfying these customers’ demands, which may harm our sales and operating results.
The average selling prices of semiconductor products in our markets have often decreasedrapidly and may do so in the future, which could harm our revenue and grossprofit.
The semiconductor products we develop and sell are used for high volume applications. As a result, the prices of those products have often decreased rapidly. Gross profit on our products may be negatively affected by, among other things, pricing pressures from our customers. In the past, we have reduced the average selling prices of our products in anticipation of future competitive pricing pressures, new product introductions by us or our competitors and other factors. In addition, some of our customer agreements provide for volume-based pricing and product pricing roadmaps, which can also reduce the average selling prices of our products over time. Our margins and financial results will suffer if we are unable to offset any reductions in our average selling prices by increasing our sales volumes, reducing manufacturing costs, or developing new and higher value-added products on a timely basis.
A breach of our security systems may have a material adverse effect on our business.
Our security systems are designed to maintain the physical security of our facilities and protect our customers’, suppliers’ and employees’ confidential information, as well as our own proprietary information. However, we are also dependent on a number of third-party cloud-based and other service providers of critical corporate infrastructure services relating to, among other things, human resources, electronic communication services and certain finance functions, and we are, of necessity, dependent on the security systems of these providers. Accidental or willful security breaches or other unauthorized access by third parties or our employees or contractors of our facilities, our information systems or the systems of our cloud-based or other service providers, or the existence of computer viruses or malwareFluctuations in our or their data or software could expose us to a risk of information loss and misappropriation of proprietary and confidential information, including information relating to our products or customers and the personal information of our employees. In addition, we have, from time to time, also been subject to unauthorized network intrusions and malware on our own IT networks. Any theft or misuse of confidential, personal or proprietary information as a result of such activitiesforeign exchange rates could result in among other things, unfavorable publicity, damage tolosses.
We operate global businesses and our reputation, lossconsolidated financial results are reported in U.S. dollars. However, some of the revenue and expenses of our trade secrets and other competitive information, difficultyforeign subsidiaries are denominated in marketing our products, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties and possible financial obligations for liabilities and damages related tolocal currencies. Fluctuations in foreign exchange rates against the theft or misuse of such information, as well as fines and other sanctions resulting from any related breaches of data privacy regulations, any of which could have a material adverse effect on our reputation, business, profitability and financial condition. Since the techniques used to obtain unauthorized access or to sabotage systems change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.

We are required to assess our internal control over financial reporting on an annualbasis and any adverse findings from such assessmentU.S. dollar could result in a loss ofinvestor confidencesubstantial changes in our financial reports, significant expense to remediate any internal control deficienciesreported revenues and ultimately have an adverse effect on our stock price.
We are required to assess the effectiveness of our internal control over financial reporting annually, as required by Section 404 of the Sarbanes-Oxley Act. Even though, as of October 29, 2017, we concluded that our internal control over financial reporting was effective, we need to maintain our processes and systems and adapt them as our business grows and changes, including to reflect our integration of Brocade, as well as any future acquisitions we may undertake. This continuous process of maintaining and adapting our internal controls and complying with Section 404 is expensive, time consuming and requires significant management attention. We cannot be certain that our internal control measures will continue to provide adequate control over our financial processes and reporting and ensure compliance with Section 404. Furthermore, as we grow our business or acquire other businesses, our internal controls may become more complex and we may require significantly more resources to ensure they remain effective. Failure to implement required new or improved controls, or difficulties encountered in the implementation of such controls, either in our existing business or in businesses that we acquire, could harm our operating results or cause us to fail to meet our reporting obligations. If we or our independent registered public accounting firm identify material weaknesses in our internal controls, the disclosure of that fact, even if quickly remedied, may cause investors to lose confidence in our financial statements and the trading price of our common stock may decline.
Remediation of a material weakness could require us to incur significant expenses and if we fail to remedy any material weakness, our financial statements may be inaccurate, we may be required to restate our financial statements, our ability to report our financial results on a timely and accurate basis may be adversely affected, our accessdue to the capital markets may be restricted,foreign exchange impact of remeasuring these transactions into U.S. dollars.
In the trading pricenormal course of our common stock may decline, andbusiness, we may be subjectemploy various hedging strategies to sanctions or investigation by regulatory authorities,partially mitigate these risks, including the SEC or The Nasdaq Global Select Market.use of derivative instruments. These strategies may not be effective in protecting us against the effects of fluctuations in foreign exchange rates. As a result, fluctuations in foreign exchange rates could result in financial losses.
The enactment of legislation implementing changes in taxation of international business activities, the adoption of other corporate tax reform policies, or changes
Risks Related to Our Taxes
Changes in tax legislation or policies could materially impact our financial position and results of operations.
Corporate tax reform, base-erosion effortsanti-base-erosion rules and tax transparency continue to be high priorities in many tax jurisdictions where we have business operations.jurisdictions. As a result, policies regarding corporate income and other taxes in numerous jurisdictions are under heightened scrutiny and tax reform legislation is beinghas been, and will likely continue to be, proposed or enacted in a number of jurisdictions. For example,jurisdictions in which we operate.
After the enactment of the U.S. Tax Cuts and Jobs Act (the “2017 Tax Reform Act”), most of our income is taxable in the U.S. with a significant portion taxable under the Global Intangible Low-Taxed Income (“GILTI”) regime. Beginning in fiscal year 2027, the deduction allowable under the GILTI regime will decrease from 50% to 37.5%, which will increase the effective tax rate imposed on our income. The 2017 Tax Reform Act adopting broadalso limits our ability to deduct research and development expenses beginning in fiscal year 2023. These expenses are now capitalized and amortized over 5 years (15 years for foreign expenses), which could materially increase our cash tax costs. The U.S. corporatealso enacted the Inflation Reduction Act of 2022 (“IRA”) in August 2022, which created a new book minimum tax of at least 15% of consolidated GAAP pre-tax income for corporations with average book income in excess of $1 billion. This book minimum tax reform will among other things, reducefirst apply to our fiscal year 2024 and any increase in our effective tax rate or cash tax will depend on a number of factors, including any offsets for foreign tax credits or general business credits, or changes in book income following business combinations. The IRA also created an excise tax of 1% of the value of our stock repurchased after December 31, 2022. While the impact of this excise tax has not been material, it could increase materially depending on various factors, including the amount and frequency of our stock repurchases, applicability to business combination transactions, and any permitted reductions or exceptions to the amount subject to the tax. If (i) the U.S. corporate income tax rate but will impose base-erosion prevention measuresincreases, (ii) the deduction allowable under the GILTI regime is further reduced or eliminated, or (iii) additional limitations are put on earnings of non-U.S. subsidiaries of U.S. entities as well as the Transition Tax on accumulated earnings of non-U.S. subsidiaries of U.S. entities. There is no assurance that the final determination of our ability to deduct interest expense, our provision for income tax liability will nottaxes, net income, and cash flows would be materially different than what is reflected in our income tax provisions and accruals.adversely impacted.
In addition, many countries are beginning to implementimplementing legislation and other guidance to align their international tax rules with the Organisation for Economic Co-operation and Development’s (“OECD”) Base Erosion and Profit Shifting recommendations and action plan that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer pricing documentation rules, and nexus-based tax incentive practices. The OECD is also continuing discussions surrounding fundamental changes in allocation of profits among tax jurisdictions in which companies do business, as well as the implementation of a global minimum tax (namely the “Pillar One” and “Pillar Two” proposals). Some countries intend to implement laws based on Pillar Two proposals, which may adversely impact our provision for income taxes, net income and cash flows. As a result of thethis heightened scrutiny, of corporate taxation policies, prior decisions by tax authorities regarding treatments and positions of corporate income taxes could be subject to enforcement activities, and legislative investigation and inquiry, which could also result in changes in tax policies or prior tax rulings. Any such changes in policies or rulings may also result in the taxes we previously paid being subject to change.
Due to the large scale
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Table of our international business activities anyContents
Any substantial changes in domestic or international corporate tax policies, regulations or guidance, enforcement activities or legislative initiatives may materially and adversely affect our business, the amount of taxes we are required to pay and our financial condition and results of operations generally.

If the tax incentiveincentives or tax holiday arrangements we have negotiated in Singapore andother jurisdictions change or cease to be in effect or applicable in part or in whole, for any reason, or if ourassumptions and interpretations regarding tax laws and incentiveincentives or holidayarrangements prove to be incorrect, the amount ofour corporate income taxes we have topay could significantly increase.
Our operations are currently structured to benefit from the various tax incentives and tax holidays extended to us in various jurisdictions to encourage investment or employment. For example, we have obtainedabsent our principal tax incentives from the Singapore Economic Development Board, an agency of the Government of Singapore, which provide that qualifying income we earn in Singapore is subject to tax holiday or reduced rates of Singapore income tax. Subject to our compliance with the conditions specified in these incentives and legislative developments, the Singapore tax incentives are presently expectedscheduled to expire at various dates generally between 2020 and 2021, subject in certain cases to potential extensions, which we may or may not be able to obtain, and any subsequent changes in incentive scope. Absent these tax incentives,2025, the corporate income tax rate that would otherwise apply to our Singapore taxable income would be 17%. We also have a tax holidaysholiday on our qualifying income in Malaysia, which areis scheduled to expire between 2018 andin fiscal year 2028. TheEach tax incentivesincentive and tax holidays that we have obtained are alsoholiday is subject to our compliance with various operating and other conditions and may, in some instances, be amended or terminated prior to their scheduled termination date by the relevant governmental authority. If we cannot, or elect not to, comply with the operating conditions included in any particular tax incentive or tax holiday, we could, in some instances, be required to refund previously realized material tax benefits, or if such tax incentive or tax holiday is terminated prior to its expiration absent a new incentive applying, we will lose the related tax benefits earlier than scheduled. Depending on the incentive at issue,In addition, we could alsomay be required, or elect, to modify our operational structure and tax strategy in order to keep an incentive, which may not be as beneficial to us ascould result in a decrease in the benefits provided underof the present arrangements. The effect of all theseincentive. Our tax incentives could also be adversely impacted if the global minimum tax provisions (Pillar Two) are adopted in a country in which we have an existing tax incentive. Our tax incentives and tax holidays, inholiday, before taking into consideration U.S. foreign tax credits, decreased the aggregate, was to reduce the overall provision for income taxes by approximately $237$1,821 million $169 millionin the aggregate and $207 million, for fiscal years 2017, 2016 and 2015, respectively, to increaseincreased diluted net income per share by $0.56 and $0.74 in fiscal years 2017 and 2015, respectively, and to reduce diluted net loss per share by $0.44$4.31 for fiscal year 2016.2022.
Our interpretations and conclusions regarding the tax incentives are not binding on any taxing authority, and if our assumptions about tax and other laws are incorrect or if these tax incentives are substantially modified or rescinded, we could suffer material adverse tax and other financial consequences, which would increase our expenses, reduce our profitability and adversely affect our cash flows.
Our income taxes and overall cash tax costs are affected by a number of factors including reorganizations or restructurings of our businesses or assets, jurisdictional revenue mix and changes in tax regulations or policy, and may be further impacted by the Redomiciliation Transaction, all of whichthat could materially, adversely affect financial results.
We are a multinational company subject to tax in various tax jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions where the ultimate tax determination is uncertain. Additionally, our calculations of income taxes payable currently and on a deferred basis are based on our interpretations of applicable tax laws in the jurisdictions in which we are required to file tax returns. Although we believe our tax estimates are reasonable, there is no assurance that the final determination of our income tax liability will not be materially different than what is reflected in our income tax provisions and accruals.
Our provision for income taxes isare subject to volatility and could be adversely affected by numerous factors including:
•reorganization or restructuring of our businesses, tangible and intangible assets, outstanding indebtedness and corporate structure, including the Redomiciliation Transaction;business combinations;
•jurisdictional mix of our income and assets, and the resulting tax effects of differing tax rates in different countries;assets;
•changes in the allocation of income and expenses, including adjustments related to changes in our corporate structure, acquisitions or tax law;
•changes in transfer pricing rules or methods of applying these rules;
changes inU.S and foreign tax laws including in the U.S.,and regulations, changes to the taxation of earnings of foreign subsidiaries, taxation of U.S. income generated from foreign sources, the deductibility of expenses attributable to income and foreign tax credit rules;
•tax effects of increases in non-deductible employee compensation; and
•changes in tax accounting rules or principles and in the valuation of deferred tax assets and liabilities;
outcomes of income tax audits; and
modifications, expiration, lapses or termination of tax credits or incentives.

liabilities.
We have also adopted transfer pricing policies between our affiliated entities. Our policiesthat call for the provision of services, the sale of products, the advancearrangement of financing and the grant of licenses from one affiliate to another at prices that we believe are negotiated on an arm’s length basis. Our taxable income in any jurisdiction is dependent upon acceptance ofby local authorities that our operational practices and intercompany transfer pricing by local tax authorities as beingare on an arm’s length basis. Due to inconsistencies in application of the arm’s length standard among taxing authorities, as well as lack of comprehensive treaty-based protection, transfer pricing challenges by tax authorities could, if successful, result in adjustments for prior or future years. As a resultThe effects of these adjustments, weany such changes could become subject us to higher taxes and our earnings, and results of operations and cash flow would be adversely affected in any period in which such determination is made.affected.
Although we believe our tax estimates are reasonable, there is no assurance that the final determination
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Table of our income tax liability will not be materially different than what is reflected in our income tax provisions and accruals. Significant judgment is required to determine the recognition and measurement of tax liabilities prescribed in the relevant accounting guidance for uncertainty in income taxes. The accounting guidance for uncertainty in income taxes applies to all income tax positions, which, if resolved unfavorably, could adversely impact our provision for income taxes and our payment obligation with respect to any such taxes.Contents
In addition, we are subject to, and are under, tax audit in various jurisdictions, and such jurisdictions may assess additional income tax against us. Although we believe our tax positions are reasonable, the final determination of tax audits could be materially different from our income tax provisions and accruals. The ultimate result of an audit could have a material adverse effect on our results of operations and cash flows in the period or periods for which that determination is made.
The Internal Revenue Service may not agree that prior to the Redomiciliation Transaction Broadcom-Singapore should have been treated as a foreign corporation for U.S. federal income tax purposes.
Although Broadcom-Singapore is a Singapore entity, the Internal Revenue Service, or IRS, may assert that following our acquisition of BRCM, Broadcom-Singapore should have been treated as a U.S. corporation for U.S. federal income tax purposes pursuant to Section 7874 of the Internal Revenue Code of 1986, as amended, or the Code. If the IRS were to determine that under Section 7874 of the Code, the former shareholders of BRCM held at least 60% of the vote or value of the ordinary shares of Broadcom-Singapore immediately after our acquisition of BRCM, such percentage referred to as the “Section 7874 Percentage”, Broadcom-Singapore would be treated as a “surrogate foreign corporation” and several limitations could then apply to BRCM. For example, BRCM would be prohibited from using its net operating losses, foreign tax credits or other tax attributes to offset the income or gain recognized by reason of the transfer of property to a foreign related person during the 10-year period following our acquisition of BRCM or any income received or accrued during such period by reason of a license of any property by BRCM to a foreign related person. Moreover, in such case, Section 4985 of the Code and rules related thereto would impose an excise tax on the value of certain stock compensation held directly or indirectly by certain BRCM “disqualified individuals” (including former officers and directors of BRCM) at a rate equal to 15%, but only if a gain is otherwise recognized by BRCM former shareholders as a result of our acquisition of BRCM. If the IRS were to determine the Section 7874 Percentage was 80% or more, then Broadcom-Singapore would be treated as a U.S. corporation for U.S. federal income tax purposes.
While we believe the Section 7874 Percentage was significantly less than 60%, determining the Section 7874 Percentage is complex and is subject to factual and legal uncertainties. There can be no assurance that the IRS will agree with our position.
Risks RelatingRelated to Our Indebtedness
Our substantial indebtedness could adversely affect our financial health and our ability to raise additional capital to fundexecute our operations, limit our ability to react to changes in the economy or our industry, exposes us to interest rate risk to the extent of our variable rate indebtedness and prevent us from fulfilling our obligations under our indebtedness.business strategy.
As of May 6, 2018, our total consolidatedApril 30, 2023, the aggregate indebtedness under our senior unsecured notes that were issued and soldwas $40,958 million. This amount does not reflect any debt we expect to incur or assume in January 2017 and October 2017, collectivelyconnection with the 2017 Senior Notes, was $17,550 million.VMware Merger.
Our substantial indebtedness could have important consequences including:
•increasing our vulnerability to adverse general economic and industry conditions;
•exposing us to interest rate risk to the extent ofif we draw down on our term facilities, which have variable rate indebtedness, andrates that we do not typically hedge againstagainst;
•limiting our flexibility in planning for, or reacting to, changes in interest rates;the economy and the semiconductor industry;
•placing us at a competitive disadvantage compared to our competitors with less indebtedness;
•making it more difficult to borrow additional funds in the future to fund growth, acquisitions, working capital, capital expenditures and other purposes; and
•potentially requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts, execution of our other business strategy, acquisitions and other general corporate purposes;
limiting our flexibility in planning for, or reacting to, changes in the economy and the semiconductor industry;

placing us at a competitive disadvantage compared to our competitors with less indebtedness; and
making it more difficult to borrow additional funds in the future to fund growth, acquisitions, working capital, capital expenditures and other purposes.needs.
We receive debt ratings from the major credit rating agencies in the United States.U.S. Factors that may impact our credit ratings include debt levels, planned asset purchases or sales and near-term and long-term production growth opportunities. Liquidity, asset quality, cost structure, reserve mix and commodity pricing levels could also be considered by the rating agencies. AWhile we are focused on maintaining investment grade ratings from these agencies, we may be unable to do so. Any downgrade could in our credit rating or the ratings of our indebtedness, or adverse conditions in the debt capital markets, could:
•adversely affect the trading price of, our 2017 Senior Notes or the trading market for, our 2017 Senior Notes. Any credit rating downgrade could adversely impactdebt securities;
•increase interest expense under our ability to access debt markets in the future and term facilities;
•increase the cost of, current or futureand adversely affect our ability to refinance, our existing debt; and
•adversely affect our ability to raise additional debt.
The instruments governing our indebtedness impose restrictioncertain restrictions on our business.
The indenturesinstruments governing the 2017 Senior Notesour indebtedness contain certain covenants imposing restrictions on our business. These restrictions may affect our ability to operate our business, to plan for, or react to, changes in the market conditions or our capital needs and may limit our ability to take advantage of potential business opportunities as they arise. The restrictions placed on us include maintenance of an interest coverage ratio and limitations on our ability to incur certain secured debt, enter into certain sale and lease-back transactions and consolidate, merge, sell or otherwise dispose of all or substantially all of our assets. In addition, the indenturesinstruments contain customary events of default upon the occurrence of which, after any applicable grace period, the noteholders would have the ability toindebtedness could be declared immediately declare the debt due and payable. In such event, we may not have sufficient available cash to repay such debt at the time it becomes due, or be able to refinance such debt on acceptable terms or at all. Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.
Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.
Our ability to make scheduled payments of the principal of, to pay interest on, and to refinance our debt, depends on our future performance, which is subject to economic, financial, competitive and other factors. Our business may not continue to generate cash flow from operations in the future sufficient to satisfy our obligations under the 2017 Senior Notesour current indebtedness and any future indebtedness we may incur and to make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our outstanding indebtedness or future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms when needed, which could result in a default on our indebtedness.
The trading prices
48
Table of the 2017 Senior Notes may be volatile.Contents
To the extent trading markets for the 2017 Senior Notes develop, the trading prices of the 2017 Senior Notes could be subject to significant fluctuation in response to, among other factors, changes in our operating results, interest rates, the market for debt securities, general economic conditions and securities analysts’ recommendations, if any, regarding our securities.
Risks RelatingRelated to Owning Our Common Stock
At times, our stock price has been volatile and it may fluctuate substantially in thefuture, which could result in substantial losses for our investors as well as class action litigation against us and our management which could cause us to incur substantial costs and divert our management’s attention and resources.
The trading price of our common stock has, at times, fluctuated significantly and could be subject to wide fluctuations in response to any of the risk factors listed in this “Risk Factors” section, and others, including:
actual or anticipated fluctuations in our financial condition and operating results;
•issuance of new or updated research or other reports by securities analysts;
•fluctuations in the valuation and results of operations of our significant customers as well as companies perceived by investors to be comparable to us;
•announcements of proposed acquisitions by us or our competitors;
•announcements of, or expectations of, additional debt or equity financing efforts;transactions;
•stock price and volume fluctuations attributable to inconsistent trading volume levels of our common stock;
•hedging or arbitrage trading activity involving our common stock; and
changes in•unsubstantiated news reports or other inaccurate publicity regarding us or our dividend or stock repurchase policies.

business.
These fluctuations are often unrelated or disproportionate to our operating performance. Broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or currency fluctuations, may negatively impact the market price of our common stock. You may not realize any return on your investment in us and may lose some or all of your investment. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. We are alsoIn addition, we have been, and in the future we may be, subject of a number ofto lawsuits stemming from our acquisitions, of PLX Technology, Inc. and Emulex Corporation.including the VMware Merger. Securities litigation against us, including the lawsuits related to such transactions,acquisitions, could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.
The amount and frequency of our stock repurchases may fluctuate.
The amount, timing and execution of our stock repurchase program may fluctuate based on our priorities for the use of cash for other purposes. These purposes includinginclude operational spending, capital spending, acquisitions, repayment of debt and returning cash to our stockholders as dividend payments. Changes in cash flows, tax laws and our stock price could also impact our stock repurchase program. We are not obligated to repurchase any specific amount of shares of common stock, and the stock repurchase program may be suspended or terminated at any time.
A substantial amount of our stock is held by a small number of large investors and significant sales of our common stock in the public market by one or more of these holders could cause our stock price to fall.
As of March 31, 2018,2023, we believe 1510 of our 20 largest stockholdersholders of common stock were active institutional investors who held approximately 35%25% of our outstanding shares of common stock in the aggregate, with Capital World Investors being our largest stockholder with 11% of our outstanding shares of common stock.aggregate. These investors may sell their shares at any time for a variety of reasons and such sales could depress the market price of our common stock. In addition, any such sales of our common stock by these entities could also impair our ability to raise capital through the sale of additional equity securities.
There can be no assurance that we will continue to declare cash dividends.
Our Board of Directors has adopted a dividend policy pursuant to which we currently pay a cash dividend on our common stock on a quarterly basis. The declaration and payment of any dividend is subject to the approval of our Board of Directors and our dividend may be discontinued or reduced at any time. Because we are a holding company, our ability to pay cash dividends is also limited by restrictions or limitations on our ability to obtain sufficient funds through dividends from subsidiaries. There can be no assurance that we will declare cash dividends in the future in any particular amounts, or at all.
Future dividends, if any, and their timing and amount, may be affected by, among other factors: management’s views on potential future capital requirements for strategic transactions, including acquisitions; earnings levels; contractual restrictions; our stock repurchase program; cash position and overall financial condition; and changes to our business model. The payment
49
Our actual operating results may differ significantly from our guidance.
From time to time, we release guidance regarding our future performance that represents our management’s estimates as of the date of release. This guidance, which consists of forward-looking statements, is prepared by our management and is qualified by, and subject to, the assumptions and the other information contained or referred to in the release. Our guidance is not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither any independent registered public accounting firm nor any other independent expert or outside party compiles, examines or reviews the guidance and, accordingly, no such person expresses any opinion or any other form of assurance with respect thereto.
Guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change. We generally state possible outcomes as high and low ranges which are intended to provide a sensitivity analysis as variables are changed but are not intended to represent that actual results could not fall outside of these ranges. The principal reason that we release this data is to provide a basis for our management to discuss our business outlook with analysts and investors. We do not accept any responsibility for any projections or reports published by any such persons.
Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results, particularly any guidance relating to the results of operations of acquired businesses or companies as our management will, necessarily, be less familiar with their business, procedures and operations. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release. Actual results will vary from the guidance and the variations may be material. Investors should also recognize that the reliability of any forecasted financial data will diminish the farther in the future that the data are forecast. In light of the foregoing, investors are urged to put the guidance in context and not to place undue reliance on it.

Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this Quarterly Report on Form 10-Q could result in the actual operating results being different than the guidance, and such differences may be adverse and material.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
As previously disclosed in our Current Report on Form 8-K12B filed with the SEC on April 4, 2018, all issued ordinary shares of Broadcom-Singapore as of immediately prior to the effective time of the Redomiciliation Transaction were exchanged on a one-for-one basis for newly issued shares of our common stock, $0.001 par value per share. The Redomiciliation Transaction was effected by means of a statutory scheme of arrangement under the laws of the Republic of Singapore and was approved by the High Court of the Republic of Singapore.
The 415 million shares of our common stock issued in exchange for Broadcom-Singapore ordinary shares in the Redomiciliation Transaction were issued in reliance upon Section 3(a)(10) of the Securities Act of 1933, as amended, or the Securities Act, which exempts from the registration requirements any security that is issued in exchange for one or more bona fide outstanding securities where the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear, by any court expressly authorized by law to grant such approval. Additional information about the Redomiciliation Transaction was filed by Broadcom-Singapore in a definitive proxy statement on Schedule 14A on March 9, 2018.
Issuer Purchases of Equity Securities
In April 2018, our Board of Directors authorized the repurchase of up to $12 billion of our common stock from time to time on or prior to November 3, 2019, the end of our fiscal year 2019.
The following table presents details of our various repurchases during the fiscal quarter ended April 30, 2023, pursuant to the December 2021 Authorization and the May 6, 2018:2022 Authorization.
Period
Total Number of Shares Purchased (a)
Average Price per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans (a)
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans
(In millions, except per share data)
January 30, 2023 - February 26, 20231.4 $596.57 1.4 $8,435 
February 27, 2023 - March 26, 20231.5 $617.05 1.5 $10,099 
March 27, 2023 - April 30, 20231.7 $629.24 1.7 $9,006 
Total4.6 $615.52 4.6 

(a) We also paid approximately $614 million in employee withholding taxes due upon the vesting of net settled equity awards. We withheld approximately 1 million shares of common stock from employees in connection with such net share settlement at an average price of $618.07 per share. These shares may be deemed to be “issuer purchases” of shares and are not included in this table.
Period Total Number of Shares Purchased Average Price per Share 
Total Number of Shares Purchased as
Part of Publicly Announced Plan
 
Approximate Dollar Value of Shares That
May Yet Be Purchased Under the Plan
         
  (In millions, except per share data)
April 23, 2018 — May 6, 2018 1.5
 $230.50
 1.5
 $11,653
In March 2023, our Board of Directors confirmed the extended duration of the December 2021 Authorization through December 31, 2023.
Repurchases under our stock repurchase programprograms may be effected through a variety of methods, including open market or privately negotiated purchases in compliance with Rule 10b-18 promulgated under the Exchange Act, which may include purchases under plans complying with Rule 10b5-1 of the Exchange Act.purchases. The timing and numberamount of shares of common stock repurchased will depend on a variety of factors, includingthe stock price, general business and market conditions, corporate and regulatory requirements, alternative investment opportunities.opportunities, acquisition opportunities and other factors. We are not obligated to repurchase any specific numberamount of shares of common stock, and we may suspend or discontinue ourthe stock repurchase programprograms may be suspended or terminated at any time.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.

50
Table of Contents
Item 6. Exhibits


EXHIBIT INDEX
Incorporated by Reference Herein
Exhibit NumberDescriptionFormFiling DateFiled Herewith
2.1#
Avago Technologies LimitedBroadcom Inc. Current Report on Form 8-K (Commission File No. 001-34428)001-38449)May 29, 2015July 12, 2018
2.22.2#
Avago Technologies LimitedBroadcom Inc. Current Report on Form 8-K (Commission File No. 001-34428)001-38449)July 31, 2015August 9, 2019
2.3#
Broadcom Inc. Annual Report on Form 10-K (Commission File No. 001-38449)December 18, 2020
2.4 Broadcom LimitedInc. Current Report on Form 8-K/A8-K (Commission File No. 001-37690)001-38449)November 2, 2016May 26, 2022
3.1
Broadcom Inc., adopted as of Current Report on Form 8-K12B (Commission File No.001-38449)April 2,4, 2018
3.2 Broadcom Inc. Current Report on Form 8-K12B (Commission File No. 333-222898)001-38449)April 4, 2018
3.24.1 
Broadcom Inc. Current Report on Form 8-K12B (Commission File No. 333-222898)April 4, 2018
4.1
Form of Common Stock Certificate.
Broadcom Inc. Quarterly Report on Form 10-Q (Commission File No. 001-38449)June 14, 2018X
4.2
Broadcom Inc. Annual Report on Form 10-K (Commission File No. 001-38449)December 20, 2019
4.3 Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)January 20, 2017
4.34.4 
Broadcom Inc. Current Report on Form 8-K (Commission File No. 333-222898)001-38449)April 9, 2018
4.44.5 
Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)January 25, 2019
4.6 Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)January 20, 2017
4.54.7 
Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)January 20, 2017
4.6
Form of 3.625% Senior Note due 2024 (included in Exhibit 4.2).
Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)January 20, 2017
4.7
Form of 3.875% Senior Note due 2027 (included in Exhibit 4.2).
Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)January 20, 2017

4.8 Incorporated by Reference Herein
Exhibit NumberDescriptionFormFiling DateFiled Herewith
4.8
Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)January 20, 2017
4.9
Indenture, dated as of October 17, 2017, by and among the Co-Issuers, the Company and Broadcom Cayman L.P., (the “October Guarantors”)guarantors and Wilmington Trust, National Association, as trustee.
Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)October 17, 2017
4.104.9 
Broadcom Inc. Current Report on Form 8-K (Commission File No. 333-222898)001-38449)April 9, 2018
4.114.10 
Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)January 25, 2019
4.11 Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)October 17, 2017
4.12
Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)October 17, 2017
4.13
Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)October 17, 2017
4.14
Broadcom LimitedInc. Current Report on Form 8-K (Commission File No. 001-37690)001-38449)October 17, 2017April 5, 2019
4.15
Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)April 5, 2019
4.16 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)April 5, 2019
4.17 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)April 9, 2020
4.18 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)April 9, 2020
4.19 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)May 8, 2020
4.20 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)May 8, 2020
4.21 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)May 8, 2020
4.22 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)May 8, 2020
4.23 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)May 8, 2020
4.24 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)May 21, 2020
4.25 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)May 21, 2020
4.26 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)May 21, 2020
4.27 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)January 19, 2021
4.28 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)January 19, 2021
4.29 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)January 19, 2021
4.30 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)January 19, 2021
4.31 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)January 19, 2021
4.32 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)January 19, 2021
4.33 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)January 19, 2021
4.34 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)March 31, 2021
4.35 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)March 31, 2021
4.36 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)March 31, 2021
4.37 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)March 31, 2021
4.38 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)September 30, 2021
4.39 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)September 30, 2021
4.40 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)September 30, 2021
4.41 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)September 30, 2021
4.42 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)April 15, 2022
4.43 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)April 15, 2022
4.44 Broadcom Inc. Current Report on Form 8-K (Commission File No. 001-38449)April 15, 2022
4.45 Broadcom LimitedInc. Current Report on Form 8-K (Commission File No. 001-37690)001-38449)October 17, 2017April 15, 2022
10.14.46 
Broadcom Inc. Current Report on Form 8-K12B8-K (Commission File No. 333-222898)001-38449)April 4, 201818, 2022
10.2+4.47 
Broadcom Inc. Current Report on Form 8-K12B8-K (Commission File No. 333-222898)001-38449)April 4, 201818, 2022
10.3+4.48 
Broadcom Inc. Current Report on Form 8-K12B8-K (Commission File No. 333-222898)001-38449)April 4, 201818, 2022
10.4+
Amendment to the Emulex Corporation 2005 Equity Incentive Plan.
Broadcom Inc. Current Report on Form 8-K12B (Commission File No. 333-222898)April 4, 2018
10.5+
Amendment to the Brocade Communication Systems, Inc., 2009 Stock Plan.
Broadcom Inc. Current Report on Form 8-K12B (Commission File No. 333-222898)April 4, 2018

10.1 X
31.1 
Incorporated by Reference Herein
Exhibit NumberDescriptionFormFiling DateFiled Herewith
10.6+
Broadcom Inc. Current Report on Form 8-K12B (Commission File No. 333-222898)April 4, 2018
10.7+
Amendment to the Broadcom Limited Second Amended and Restated Employee Stock Purchase Plan.
Broadcom Inc. Current Report on Form 8-K12B (Commission File No. 333-222898)April 4, 2018
10.8+
Form of Restricted Stock Unit Award Agreement under Avago Technologies Limited 2009 Equity Incentive Plan (effective April 4, 2018).
X
10.9+
Form of Performance Share Unit Agreement (Relative TSR) under Avago Technologies Limited 2009 Equity Incentive Award Plan (effective March 13, 2018).
Broadcom Limited Quarterly Report on Form 10-Q (Commission File No. 001-37690)March 15, 2018
10.10+
Form of Performance Stock Unit Award Agreement (Relative TSR) under Avago Technologies Limited 2009 Equity Incentive Plan (effective April 4, 2018).
X
10.11+
Form of Restricted Stock Unit Award Agreement under LSI Corporation 2003 Equity Incentive Plan, as amended (effective April 4, 2018).
X
10.12+
Form of Restricted Stock Unit Award Agreement under Broadcom Corporation 2012 Stock Incentive Plan, as amended (effective April 4, 2018).
X
10.13+
Form of Performance Share Unit Agreement (Relative TSR) under Broadcom Corporation 2012 Stock Incentive Plan (effective March 13, 2018).
Broadcom Limited Quarterly Report on Form 10-Q (Commission File No. 001-37690)March 15, 2018
10.14+
Form of Performance Stock Unit Award Agreement (Relative TSR) under Broadcom Corporation 2012 Stock Incentive Plan (effective April 4, 2018).
X
10.15+
Severance Benefit Agreement, dated January 23, 2014, between Avago Technologies Limited and Hock E. Tan.
X
10.16+
Severance Benefit Agreement, dated October 17, 2016, between Broadcom Limited and Thomas H. Krause, Jr. 
X
10.17+
Severance Benefit Agreement, dated June 3, 2015, between Avago Technologies Limited and Charlie Kawwas.
X
10.18+
Severance Benefit Agreement, dated September 26, 2017, between Broadcom Limited and Mark Brazeal.
X
10.19+
Severance Benefit Agreement, dated January  30, 2014, between Avago Technologies Limited and Bryan Ingram.
X
31.1
Certification of Principal Executive Officer of Broadcom Inc. Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X

31.2 
Incorporated by Reference Herein
Exhibit NumberDescriptionFormFiling DateFiled Herewith
31.2
X
32.1
X
32.2
X
101.INS
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X
101.SCH
101.SCH
XBRL Schema DocumentX
101.CAL
101.CAL
XBRL Calculation Linkbase DocumentX
101.DEF
101.DEF
XBRL Definition Linkbase DocumentX
101.LAB
101.LAB
XBRL Labels Linkbase DocumentX
101.PRE
101.PRE
XBRL Presentation Linkbase DocumentX
104Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X
#Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Broadcom Inc. hereby undertakes to furnish supplementally copies of any omitted schedules upon request by the SEC.
+Indicates a management contract or compensatory plan or arrangement.


51
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BROADCOM INC.
By:/s/ Thomas H. Krause, Jr.Kirsten M. Spears
Thomas H. Krause, Jr.Kirsten M. Spears
Vice President and Chief Financial Officer
Date: June 14, 2018

7, 2023
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