What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-12-17 compared with 2020-12-18 · 329 added, 580 removed, 1338 unchanged (40% of the section changed)

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Consolidated Statements of Cash Flows

Consolidated Statements of Equity

Consolidated Statements of Stockholders' Equity

Notes to Consolidated Financial Statements

Supplementary Financial Data — Quarterly Data (Unaudited)

Schedule II — Valuation and Qualifying Accounts

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We have audited the accompanying consolidated balance sheets of Broadcom Inc.

and its subsidiaries (the “Company”) as of November 1, 2020 and November 3, 2019, and the related consolidated statements of operations, of comprehensive income, of equity and of cash flows for each of the three years in the period ended November 1, 2020, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of November 1, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 1, 2020 and November 3, 2019, and the results of its operations and its cash flows for each of the three years in the period ended November 1, 2020 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 1, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

and its subsidiaries (the “Company”) as of October 31, 2021 and November 1, 2020, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended October 31, 2021, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of October 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of October 31, 2021 and November 1, 2020, and the results of its operations and its cash flows for each of the three years in the period ended October 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Developed Technology and Customer Contracts and Related Relationships Intangible Assets Acquired - Symantec Corporation Enterprise Security Business

As described in Notes 2 and 4 to the consolidated financial statements, the Company completed the purchase of certain assets and assumption of certain liabilities of the Symantec Corporation Enterprise Security business on November 4, 2019 for $10.7 billion in cash, of which $2.9 billion of finite-lived developed technology and $2.4 billion of finite-lived customer contracts and related relationships intangible assets were recorded.

Management valued the developed technology 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 developed technology less charges representing the contribution of other assets to those cash flows.

Management valued the customer contracts and related relationships using the with-and-without-method under the income approach.

In this method, the fair value was measured by the difference between the present values of the cash flows with and without the existing customers in place over the period of time necessary to reacquire the customers.

Significant estimates and assumptions in estimating the fair value of the developed technology and the customer contracts and related relationships include future expected cash flows from product sales, customer contracts and acquired technologies, revenue growth rate, customer ramp-up period, technology obsolescence rates, and discount rates.

The principal considerations for our determination that performing procedures relating to the valuation of the developed technology and the customer contracts and related relationships intangible assets acquired in the Symantec Corporation Enterprise Security business acquisition is a critical audit matter are (i) a high degree of auditor judgment and subjectivity in performing procedures relating to the fair value measurement of the developed technology and the customer contracts and related relationships due to the significant judgment by management when developing these estimates, (ii) the significant audit effort in evaluating the significant assumptions relating to the valuation of the developed technology and the customer contracts and related relationships related to the revenue growth rate, the customer ramp-up period, the technology obsolescence rates, and the discount rates, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Uncertain Tax Positions (UTPs)

As described in Notes 2 and 12 to the consolidated financial statements, the gross unrecognized tax benefits balance was $5,030 million as of October 31, 2021.

As management has disclosed, management evaluates the exposure associated with various tax filing positions and accrues an income tax liability when such positions do not meet the more-likely-than-not threshold for recognition.

A tax benefit from an UTP may be recognized when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits.

The principal considerations for our determination that performing procedures relating to the UTPs is a critical audit matter are (i) the significant judgment by management when evaluating the technical merits of these tax positions, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the technical merits of the tax positions, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the developed technology and the customer contracts and related relationships and controls over development of the assumptions related to the revenue growth rate, the customer ramp-up period, the technology obsolescence rates, and the discount rates.

These procedures also included, among others, reading the purchase agreement and testing management’s process for determining the fair value of these intangible assets, including evaluating the appropriateness of the valuation methods, testing the completeness and accuracy of data used in the methods, and evaluating the reasonableness of the significant assumptions related to the revenue growth rate, the customer ramp-up period, the technology obsolescence rates, and the discount rates.

Evaluating the reasonableness of the revenue growth rate and the customer ramp-up period involved considering the past performance of the acquired business and industry data.

Evaluating the reasonableness of the technology obsolescence rates involved considering the past performance of the acquired business and benchmarking of peer companies.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of valuation methods and the reasonableness of the customer ramp-up period, the technology obsolescence rates, and the discount rates.

These procedures included testing the effectiveness of controls relating to the identification and recognition of the income tax liability for UTPs, including controls addressing the completeness of the UTPs and the measurement of the income tax liability.

These procedures also included, among others, (i) testing management’s process for identifying potential new UTPs, (ii) for a selection of UTPs, evaluating possible outcomes, and (iii) for a selection of UTPs, testing the calculation of the income tax liability by jurisdiction, including management’s assessment of the technical merits of tax positions and estimates of the amount of tax benefit expected to be sustained.

Professionals with specialized skill and knowledge were used to assist in (i) the evaluation of the completeness of management’s identification of the UTPs and (ii) for a selection of UTPs, the evaluation of the reasonableness of management’s assessment of whether the tax positions are more-likely-than-not of being sustained, the amount of potential benefit to be realized, and the application of relevant tax laws.

/s/ PricewaterhouseCoopers LLP

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8.00 % Mandatory Convertible Preferred Stock, Series A, 4 shares issued and outstanding;

aggregate liquidation value of $ 3,738 as of November 1, 2020 and November 3, 2019

aggregate liquidation value of $ 3,737 and $ 3,738 as of October 31, 2021 and November 1, 2020, respectively

Common stock, $ 0.001 par value;

2,900 shares authorized;

407 and 398 shares issued and outstanding as of November 1, 2020 and November 3, 2019, respectively

413 and 407 shares issued and outstanding as of October 31, 2021 and November 1, 2020, respectively

Additional paid-in capital

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Cost of subscriptions and services 607 626 515

Purchase accounting effect on inventory — — 70

Amortization of acquisition-related intangible assets 3,427 3,819 3,314

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Restructuring, impairment and disposal charges 148 198 736

Litigation settlements — — 14

Total operating expenses 8,325 9,502 9,039

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Interest expense ( 1,885 ) ( 1,777 ) ( 1,444 )

Impairment on investment — — ( 106 )

Other income, net 131 206 226

Income from continuing operations before income taxes 6,765 2,443 2,226

Benefit from income taxes ( 518 ) ( 510 ) ( 8,084 )

Provision for (benefit from) income taxes 29 ( 518 ) ( 510 )

Income from continuing operations 6,736 2,961 2,736

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Dividends on preferred stock ( 299 ) ( 297 ) ( 29 )

Net income attributable to noncontrolling interest — — ( 351 )

Net income attributable to common stock $ 6,437 $ 2,663 $ 2,695

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Comprehensive income $ 6,728 $ 2,984 $ 2,700

Comprehensive income attributable to noncontrolling interest — — 351

Comprehensive income attributable to Broadcom Inc.

stockholders $ 2,984 $ 2,700 $ 12,251

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

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Deferred taxes and other non-cash taxes ( 809 ) ( 1,142 ) ( 934 )

Impairment on investment — — 106

Loss on debt extinguishment 198 169 28

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Employee compensation and benefits 186 217 ( 294 )

Contributions to defined benefit pension plans — — ( 130 )

Other current assets and current liabilities ( 177 ) 331 ( 283 )

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Proceeds from disposals of property, plant and equipment 4 12 88

Purchases of investments — ( 5 ) ( 249 )

Proceeds from sales of investments 169 — —

Other ( 12 ) ( 4 ) ( 2 )

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Proceeds from long-term borrowings 9,904 27,802 28,793

Repayment of debt ( 18,814 ) ( 16,800 ) ( 973 )

Payments on debt obligations ( 11,495 ) ( 18,814 ) ( 16,800 )

Other borrowings, net — ( 1,285 ) 1,241

Payment of dividends and distributions ( 5,534 ) ( 4,235 ) ( 2,998 )

Payment of dividends ( 6,212 ) ( 5,534 ) ( 4,235 )

Repurchases of common stock - repurchase program — — ( 5,435 )

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BROADCOM INC.

CONSOLIDATED STATEMENTS OF EQUITY

Special Preference Preferred Stock 8.00 % Mandatory Convertible Preferred Stock

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

8.00 % Mandatory Convertible Preferred Stock

Common Stock Additional Paid-in Capital Retained

Earnings/(Accumulated Deficit) Accumulated

Earnings Accumulated

Comprehensive

Broadcom Inc.

Stockholders’

Equity Noncontrolling Interest Total

Shares Amount Shares Par Value Shares Par Value

Shares Par Value Shares Par Value

(In millions)

Balance as of October 29, 2017 22 $ — — $ — 409 $ — $ 20,505 $ ( 129 ) $ ( 91 ) $ 20,285 $ 2,901 $ 23,186

Balance as of November 4, 2018 — $ — 408 $ — $ 23,285 $ 3,487 $ ( 115 ) $ 26,657

Net income — — — — — 2,724 — 2,724

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— — — — — 8 ( 1 ) 7

Fair value of partially vested equity awards assumed in connection with the acquisition of Brocade Communications Systems, Inc.

Fair value of partially vested equity awards assumed in connection with the acquisition of CA, Inc.

— — — — 67 — — 67

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— — — — ( 880 ) ( 3,355 ) — ( 4,235 )

Distributions by Broadcom Cayman L.P.

on exchangeable limited partnership units — — — — — — — — — — ( 77 ) ( 77 )

Exchange of exchangeable limited partnership units for common stock and redemption of preferred stock due to the Redomiciliation Transaction

( 22 ) — — — 22 — 3,162 — — 3,162 ( 3,162 ) —

Dividends to preferred stockholders — — — — ( 29 ) — — ( 29 )

Common stock issued

— — 15 — 253 — — 253

Preferred stock issued, net 4 — — — 3,679 — — 3,679

Stock-based compensation — — — — 2,260 — — 2,260

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Net income — — — — — 2,960 — 2,960

Other comprehensive loss

— — — — — — — — ( 24 ) ( 24 ) — ( 24 )

Other comprehensive income — — — — — — 24 24

Cumulative effect of accounting change

— — — — — ( 10 ) 8 ( 2 )

Fair value of partially vested equity awards assumed in connection with the acquisition of CA, Inc.

— — — — — — 67 — — 67 — 67

Fair value of partially vested equity awards assumed in connection with an acquisition — — — — 1 — — 1

Dividends to common stockholders

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— — 12 — 276 — — 276

Preferred stock issued, net — — 4 — — — 3,679 — — 3,679 — 3,679

Stock-based compensation — — — — 1,976 — — 1,976

Repurchases of common stock — — — — ( 21 ) — ( 2,571 ) ( 2,864 ) — ( 5,435 ) — ( 5,435 )

Shares repurchased for tax withholdings on vesting of equity awards

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Net income — — — — — 6,736 — 6,736

Other comprehensive income — — — — — — — — 24 24 — 24

Cumulative effect of accounting change

— — — — — — — ( 10 ) 8 ( 2 ) — ( 2 )

Fair value of partially vested equity awards assumed in connection with an acquisition — — — — — — 1 — — 1 — 1

Other comprehensive loss — — — — — — ( 8 ) ( 8 )

Dividends to common stockholders

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— — ( 3 ) — ( 1,302 ) — — ( 1,302 )

Balance as of November 1, 2020 — $ — 4 $ — 407 $ — $ 23,982 $ — $ ( 108 ) $ 23,874 $ — $ 23,874

Balance as of October 31, 2021 4 $ — 413 $ — $ 24,330 $ 748 $ ( 116 ) $ 24,962

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

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Broadcom Inc.

(“Broadcom”), a Delaware corporation, is the successor to Broadcom Limited (now Broadcom Pte.

Ltd.), a Singapore company (“Broadcom-Singapore”).

On April 4, 2018, all Broadcom-Singapore outstanding ordinary shares were exchanged for newly issued shares of Broadcom common stock (the “Redomiciliation Transaction”).

As a result, Broadcom-Singapore became a wholly-owned subsidiary of Broadcom.

In addition, all outstanding exchangeable limited partnership units (“LP Units”) of Broadcom Cayman L.P.

(the “Partnership”) were mandatorily exchanged (the “Mandatory Exchange”) for newly issued shares of Broadcom common stock and all limited partners of the Partnership became common stockholders of Broadcom.

Also, all related outstanding special preference shares of Broadcom-Singapore were automatically redeemed upon the Mandatory Exchange.

The limited partners no longer hold a noncontrolling interest and we deregistered the Partnership.

The Redomiciliation Transaction was accounted for as an exchange of equity interests among entities under common control and the historical basis of accounting was retained as if the entities had always been combined for financial reporting purposes.

The financial statements relate to Broadcom-Singapore for periods prior to April 4, 2018, the effective date of the Redomiciliation Transaction, and relate to Broadcom for periods after April 4, 2018.

Unless stated otherwise or the context otherwise requires, references to “Broadcom,” “we,” “our” and “us” mean Broadcom 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 global technology leader that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions.

(“Broadcom”), a Delaware corporation, is a global technology leader that designs, develops and supplies 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.

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Our infrastructure software solutions enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.

We offer a cyber security solutions portfolio, including endpoint, network, information and identity security solutions.

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.

Unless stated otherwise or the context otherwise requires, references to “Broadcom,” “we,” “our,” and “us” mean Broadcom and its consolidated subsidiaries.

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 ended November 1, 2020 (“fiscal year 2020”) was a 52-week fiscal year.

The first quarter of our fiscal year 2020 ended on February 2, 2020, the second quarter ended on May 3, 2020 and the third quarter ended on August 2, 2020.

Our fiscal year ended November 3, 2019 (“fiscal year 2019”) was a 52-week fiscal year.

Our fiscal year ended November 4, 2018 (“fiscal year 2018”) was a 53-week fiscal year, with the first fiscal quarter containing 14 weeks.

Our fiscal year ended October 31, 2021 (“fiscal year 2021”) was a 52-week fiscal year.

The first quarter of our fiscal year 2021 ended on January 31, 2021, the second quarter ended on May 2, 2021 and the third quarter ended on August 1, 2021.

Our fiscal year ended November 1, 2020 (“fiscal year 2020”) and fiscal year ended November 3, 2019 (“fiscal year 2019”) were both 52-week fiscal years.

On November 4, 2019, we completed the purchase of certain assets and assumption of certain liabilities of the Symantec Corporation Enterprise Security business (the “Symantec Business”).

On November 5, 2018, we acquired CA, Inc.

On November 17, 2017, we acquired Brocade Communications Systems, Inc.

The accompanying consolidated financial statements include the results of operations of Symantec Business, CA and Brocade commencing as of their respective acquisition dates.

The accompanying consolidated financial statements include the results of operations of the Symantec Business and CA commencing as of their respective acquisition dates.

“Acquisitions” for additional information.

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Reclassifications have also been made to segment operating income.

Segment results from prior years have been recast to conform to the current presentation.

Fiscal year 2019 segment results have been recast to conform to the current presentation.

“Segment Information” for additional information.

These reclassifications have no impact on previously reported consolidated operating income.

The accompanying consolidated financial statements include the accounts of Broadcom and its subsidiaries and have been prepared in accordance with generally accepted principles in the United States (“GAAP”).

The accompanying consolidated financial statements include the accounts of Broadcom and its subsidiaries and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

All intercompany balances and transactions have been eliminated in consolidation.

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dollar functional currency environment.

As such, foreign currency assets and liabilities are remeasured into U.S.

dollars at current exchange rates except for non-monetary items such as inventory and property, plant and equipment, which are remeasured at historical exchange rates.

Foreign currency assets and liabilities for monetary accounts are remeasured into U.S.

dollars at current exchange rates.

Non-monetary items such as inventory and property, plant and equipment, are measured and recorded at historical exchange rates.

The effects of foreign currency remeasurement were not material for any period presented.

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Cash and cash equivalents.

We consider all highly liquid investment securities with original or remaining maturities of three months or less at the date of purchase to be cash equivalents.

We consider all highly liquid investment securities with original maturities of three months or less at the date of purchase to be cash equivalents.

We determine the appropriate classification of our cash and cash equivalents at the time of purchase.

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Trade accounts receivable are recognized at the invoiced amount and do not bear interest.

Accounts receivable are reduced by an allowance for doubtful accounts, which is our best estimate of the amount of probable credit losses in our existing accounts receivable.

We determine the allowance based on customer-specific experience and the aging of such receivables, among other factors.

Allowances for doubtful accounts were not material as of November 1, 2020 or November 3, 2019.

Accounts receivable are reduced by an allowance for doubtful accounts, which is our best estimate of the expected credit losses in our existing accounts receivable.

We determine the allowance based on historical experience, current economic conditions and certain forward-looking information, among other factors.

Allowances for doubtful accounts were not material as of October 31, 2021 or November 1, 2020.

Accounts receivable are also recognized net of sales returns and distributor credit allowances.

These amounts are recognized when it is both probable and estimable that discounts will be granted or products will be returned.

Allowances for sales returns and distributor credit allowances as of November 1, 2020 and November 3, 2019 were $ 174 million and $ 178 million, respectively.

Allowances for sales returns and distributor credit allowances as of October 31, 2021 and November 1, 2020 were $ 129 million and $ 174 million, respectively.

Concentrations of credit risk and significant customers.

Our cash, cash equivalents and accounts receivable are potentially subject to concentration of credit risk.

Cash and cash equivalents may be redeemable upon demand and are maintained with several financial institutions that management believes are of high credit quality and therefore bear minimal credit risk.

Cash and cash equivalents may be redeemable upon demand and are maintained with financial institutions that management believes are of high credit quality and therefore bear minimal credit risk.

We seek to mitigate our credit risks by spreading such risks across multiple counterparties and monitoring the risk profile of these counterparties.

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We operate in markets that are highly competitive and rapidly changing.

Significant technological changes, shifting customer needs, the emergence of competitive products with new capabilities, general economic conditions worldwide, the ability to safeguard patents and other intellectual property in a rapidly evolving market and reliance on assembly and test subcontractors, third-party wafer fabricators and independent distributors and other factors could affect our financial results.

Significant technological changes, shifting customer needs, the emergence of competitive products with new capabilities, general economic conditions worldwide, the ability to safeguard patents and other intellectual property (“IP”) in a rapidly evolving market and reliance on assembly and test subcontractors, third-party wafer fabricators and independent distributors and other factors could affect our financial results.

We value our inventory at the lower of actual cost or net realizable value of the inventory, with cost being determined under the first-in, first-out method.

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Retirement benefits.

For defined benefit pension plans, we consider various factors in determining our respective pension liabilities and net periodic benefit costs, including the number of employees that we expect to receive benefits, their salary levels and years of service, the expected return on plan assets, the discount rate, the timing of the payment of benefits, and other actuarial assumptions.

For defined benefit pension plans, we consider various factors in determining our respective benefit obligations and net periodic benefit (income) cost, including the number of employees that we expect to receive benefits, their salary levels and years of service, the expected return on plan assets, the discount rate, the timing of the payment of benefits, and other actuarial assumptions.

If the actual results and events of the retirement benefit plans differ from our current assumptions, the benefit obligations may be over- or under-valued.

Post-retirement benefit plan assets and liabilities are estimates of benefits that we expect to pay to eligible retirees.

We consider various factors in determining the value of our post-retirement benefit plan assets and liabilities, including the number of employees that we expect to receive benefits and other actuarial assumptions.

Post-retirement benefit plan assets and obligations are estimates of benefits that we expect to pay to eligible retirees.

We consider various factors in determining the value of our post-retirement benefit plan assets and obligations, including the number of employees that we expect to receive benefits and other actuarial assumptions.

The key benefit plan assumptions are the discount rate and the expected rate of return on plan assets.

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For the non-U.S.

set assumptions specific to each country.

plans, we set assumptions specific to each country.

We have elected to measure defined benefit pension plan and post-retirement benefit plan assets and liabilities as of October 31, which is the month end that is closest to our fiscal year end.

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For derivative instruments designated as fair value hedges, the changes in fair value are recognized in other income, net in the periods of change, and are offset by the changes in fair value of the hedged items.

For derivative instruments designated as cash flow hedges, the changes in fair value of the effective portion are initially recognized in other comprehensive income (loss), net of tax in the period of change, and are subsequently reclassified and recognized in other income, net when either the hedged transactions affect earnings or it becomes probable that the hedged transactions will not occur.

For derivative instruments designated as cash flow hedges, the changes in fair value of the effective portion are initially recognized in other comprehensive income (loss), net of tax in the period of change, and are subsequently reclassified and recognized in the same line item as the hedged item when either the hedged transactions affect earnings or it becomes probable that the hedged transactions will not occur.

The changes in the fair value of the ineffective portion of the derivative instruments are recognized in other income, net in the period of change, which have not been material to date.

For derivative instruments not designated as hedges, the changes in fair value are recognized in other income, net in the period of change.

We did not have any outstanding derivative instruments as of November 1, 2020 or November 3, 2019.

We did not have any outstanding derivative instruments as of October 31, 2021 or November 1, 2020.

Property, plant and equipment.

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When assets are retired or disposed of, the assets and related accumulated depreciation and amortization are removed from our property, plant and equipment balances and the resulting gain or loss is reflected in the consolidated statements of operations.

Buildings and leasehold improvements are generally depreciated over 15 to 40 years, or over the lease period, whichever is shorter, and machinery and equipment are generally depreciated over three to ten years .

We use the straight-line method of depreciation for all property, plant and equipment.

We determine if an arrangement is a lease, or contains a lease, at the inception of the arrangement and evaluate whether the lease is an operating lease or a finance lease at the commencement date.

We recognize right-of-use (“ROU”) assets and lease liabilities for operating and finance leases with terms greater than 12 months.

We recognize right-of-use (“ROU”) assets and lease liabilities for operating and finance leases with terms greater than 12 months, and account for the lease and non-lease components as a single component.

ROU assets represent our right to use an asset for the lease term, while lease liabilities represent our obligation to make lease payments.

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Level 3 assets and liabilities include investment in equity securities without readily determinable fair values, goodwill, intangible assets, and property, plant and equipment, which are measured at fair value using a discounted cash flow approach when they are impaired.

Quantitative information for Level 3 assets and liabilities reviewed at each reporting period includes indicators of significant deterioration in the earnings performance, credit

rating, asset quality, business prospects of the investee, and financial indicators of the investee's ability to continue as a going concern.

Quantitative information for Level 3 assets and liabilities reviewed at each reporting period includes indicators of significant deterioration in the earnings performance, credit rating, asset quality, business prospects of the investee, and financial indicators of the investee's ability to continue as a going concern.

Business combinations.

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We have elected to exclude from the transaction price any taxes collected from a customer and to account for shipping and handling activities performed after a customer obtains control of the product as activities to fulfill the promise to transfer the product.

From time to time, certain customers agree to pay us secure supply fees in exchange for prioritized fulfillment of product orders.

Such fees are included in the transaction price of the product orders and are recognized as revenue in the period that control over the products is transferred to the customer.

Subscriptions and services.

Our subscriptions and services revenue consists of sales and royalties from software arrangements, support services, professional services, transfer of intellectual property (“IP”), and non-recurring engineering (“NRE”) arrangements.

Our subscriptions and services revenue consists of sales and royalties from software arrangements, support services, professional services, transfer of IP, and non-recurring engineering (“NRE”) arrangements.

Revenue from software arrangements primarily consists of fees, which may be paid either at contract inception or in installments over the contract term, that provide customers with a right to use the software, access general support and maintenance, and utilize our professional services.

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We do not recognize revenue for products or services that are expected to be returned.

Transition practical expedient elected.

Practical expedient elected.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

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We recognize an estimated loss contingency when the outcome is probable prior to issuance of the consolidated financial statements and we are able to reasonably estimate the amount or range of any possible loss.

Taxes on income.

Income taxes.

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements.

Under this method, deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Under this method, deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

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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.

Diluted shares outstanding include the dilutive effect of unvested RSUs, in-the-money stock options, and ESPP rights (together referred to as “equity awards”), as well as convertible preferred stock and LP Units.

Potentially dilutive shares whose effect would have been antidilutive are excluded from the computation of diluted net income per share.

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Under the treasury stock method, the amount the employee must pay for exercising stock options and purchasing shares under the ESPP and the amount of compensation cost for future service that we have not yet recognized are collectively assumed to be used to repurchase shares.

The dilutive effect of convertible preferred stock and LP Units is calculated using the if-converted method.

The dilutive effect of convertible preferred stock is calculated using the if-converted method.

The if-converted method assumes that these securities were converted at the beginning of the reporting period to the extent that the effect is dilutive.

Recent Accounting Guidance

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (“Topic 842”), which requires a lessee to recognize lease assets and lease liabilities on the balance sheet for operating leases.

At the beginning of fiscal year 2020, we adopted Topic 842 using the optional adoption method, whereby no adjustment to the financial statements of comparative periods is required.

We elected practical expedients which allowed us to account for the lease and non-lease components as a single component.

In addition, we elected not to reassess whether any expired or existing contracts contain leases and the corresponding lease classification and initial direct costs.

The practical expedients were applied across our lease portfolios.

Upon adoption, we recorded net ROU assets of $ 545 million and lease liabilities of $ 591 million and there were no cumulative effect adjustments as of November 4, 2019.

The net ROU assets included the effect of reclassifying deferred rent and a portion of facilities-related restructuring reserves as an offset in accordance with the transition guidance.

The standard did not materially affect the consolidated statement of operations and the consolidated statement of cash flows.

“Leases” for further information.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform .

This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions, subject to meeting certain criteria, that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform.

The amendments in this ASU were effective upon issuance and may be applied through December 31, 2022.

This guidance had no impact on our contracts, hedging relationships and other transactions as of November 1, 2020.

Recent Accounting Guidance Not Yet Adopted

In October 2021, the Financial Accounting Standards Boards issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers , as if it had originated the contracts.

This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value.

The new guidance will be effective for the first quarter of our fiscal year ending October 29, 2023, with early adoption permitted.

The adoption impact of the new standard will depend on the magnitude of future acquisitions.

The standard will not impact acquired contract assets or liabilities from business combinations occurring prior to the adoption date.

Revenue from Contracts with Customers

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We have considered (1) information that is regularly reviewed by our Chief Executive Officer, who has been identified as the chief operating decision maker (the “CODM”) as defined by the authoritative guidance on segment reporting, in evaluating financial performance and (2) disclosures presented outside of our financial statements in our earnings releases and used in investor presentations to disaggregate revenues.

The principal category we use to disaggregate revenues is the nature of our products and subscriptions and services, as presented in our consolidated statements of operations.

The principal category we use to disaggregate revenues is the

nature of our products and subscriptions and services, as presented in our consolidated statements of operations.

In addition, revenues by reportable segment are presented in Note 13.

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The following tables present revenue disaggregated by type of revenue and by region for the periods presented:

Fiscal Year Ended November 1, 2020

Fiscal Year 2021

Americas Asia Pacific Europe, the Middle East and Africa Total

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Total $ 6,099 $ 17,978 $ 3,373 $ 27,450

Fiscal Year Ended November 3, 2019

Fiscal Year 2020

Americas Asia Pacific Europe, the Middle East and Africa Total

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Total $ 5,834 $ 15,323 $ 2,731 $ 23,888

Fiscal Year 2019

Americas Asia Pacific Europe, the Middle East and Africa Total

(In millions)

Products $ 2,023 $ 14,857 $ 1,237 $ 18,117

Subscriptions and services (a)

3,126 374 980 4,480

Total $ 5,149 $ 15,231 $ 2,217 $ 22,597

_____________________________

(a) Subscriptions and services predominantly includes 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 on the geographic shipment or delivery location specified by our distributors, original equipment manufacturer (“OEM”) customers, contract manufacturers, channel partners, or software customers.

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 (“OEM”) customers, contract manufacturers, channel partners, or software customers.

Contract Balances

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(In millions)

Opening balance November 3, 2019 $ 259 $ 1,808

Closing balance November 1, 2020 (a)

Balance as of November 1, 2020

$ 158 $ 3,443

Balance as of October 31, 2021

$ 126 $ 3,185

(a) Contract liabilities associated with the Symantec Business were included in the balance as of November 1, 2020.

Changes in our contract assets and contract liabilities primarily result from the timing difference between our performance and the customer’s payment.

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The amount of revenue recognized during fiscal year 2021 that was included in the contract liabilities balance as of November 1, 2020 was $ 2,617 million.

The amount of revenue recognized during fiscal year 2019 that was included in the contract liabilities balance as of November 5, 2018, the beginning of our fiscal year 2019, was $ 200 million.

The amount of revenue recognized during fiscal year 2020 that was included in the contract liabilities balance as of November 3, 2019 was $ 1,450 million.

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied.

It includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods and does not include contracts for subscriptions and services where the customer is not committed.

Revenue allocated to remaining performance obligations represents 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 accordingly deemed to not be 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 and usage-based royalties promised in exchange for a license of IP.

Because the substantial majority of our customer software contracts allow our customers to terminate for convenience without a substantive penalty or have an original duration of one year or less, the total amount of the transaction price allocated to remaining performance obligations as of November 1, 2020 was not material.

Since the majority of our software contracts are not deemed to be committed, although our customers generally do not exercise their termination for convenience rights, and the majority of the contracts we execute for products, as well as subscriptions and services, have a duration of one year or less, our remaining performance obligations are not indicative of revenue for future periods.

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 IP.

Certain multi-year customer contracts in our semiconductor solutions segment contain firmly committed amounts and the remaining performance obligations under these contracts as of October 31, 2021 were approximately $ 13.6 billion.

We expect approximately 31 % 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 .

Acquisition of the Symantec Corporation Enterprise Security Business

On November 4, 2019 (the “Symantec Acquisition Date”), we completed the purchase of the Symantec Business, which was an established leader in cyber security, for $ 10.7 billion in cash (the “Symantec Asset Purchase”).

On November 4, 2019 (the “Symantec Acquisition Date”), we completed the purchase of the Symantec Business, which was an established leader in cyber security, for $ 10.7 billion in cash.

We acquired the Symantec Business to expand our footprint of mission critical infrastructure software with our existing customer base.

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Goodwill is primarily attributable to the assembled workforce and anticipated synergies and economies of scale expected from the integration of the Symantec Business.

The synergies include certain cost savings, operating efficiencies, and other strategic benefits projected to be achieved as a result of the Symantec Asset Purchase.

The synergies include certain cost savings, operating efficiencies, and other strategic benefits projected to be achieved resulting from the acquisition of the Symantec Business.

Substantially all goodwill is deductible for tax purposes.

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The results of operations of the Symantec Business were included in our infrastructure software segment.

Transaction costs related to the Symantec Asset Purchase of $ 110 million were included in selling, general and administrative expense for fiscal year 2020.

Transaction costs related to the acquisition of the Symantec Business of $ 110 million were included in selling, general and administrative expense for fiscal year 2020.

Intangible Assets

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Unaudited Pro Forma Information

The following unaudited pro forma financial information presents combined results of operations for the periods presented, as if we had completed the Symantec Asset Purchase as of the beginning of fiscal year 2019.

The following unaudited pro forma financial information presents combined results of operations for the periods presented, as if we had completed the acquisition of the Symantec Business as of the beginning of fiscal year 2019.

The unaudited pro forma information includes adjustments to amortization and depreciation for intangible assets and property, plant and equipment acquired, adjustments to interest expense for the additional indebtedness incurred to complete the acquisition, restructuring charges related to the acquisition and transaction costs.

For the fiscal year 2019, non-recurring pro forma adjustments directly attributable to the Symantec Asset Purchase included transaction costs of $ 136 million.

For the fiscal year 2019, non-recurring pro forma adjustments directly attributable to the acquisition of the Symantec Business included transaction costs of $ 136 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 2019 or of the results of our future operations of the combined business.

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Other Acquisitions

During the fiscal year ended November 1, 2020, we also completed three other acquisitions qualifying as business combinations for total consideration of $ 201 million, of which $ 109 million was allocated to goodwill and $ 46 million was allocated to intangible assets.

During fiscal year 2020, we also completed three other acquisitions qualifying as business combinations for total consideration of $ 201 million, of which $ 109 million was allocated to goodwill and $ 46 million was allocated to intangible assets.

Acquisition of CA, Inc.

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Unaudited Pro Forma Information

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented, as if CA had been acquired as of the beginning of fiscal year 2018.

The following unaudited pro forma financial information presents combined results of operations for fiscal year 2019, as if CA had been acquired as of the beginning of our fiscal year ended November 4, 2018 (“fiscal year 2018”).

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, interest expense for the additional indebtedness incurred to complete the acquisition, restructuring charges related to the acquisition and transaction costs.

For fiscal year 2018, non-recurring pro forma adjustments directly attributable to the CA Merger included transaction costs of $ 180 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 2018 or of the results of our future operations of the combined business.

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Pro forma net income attributable to common stock $ 2,535

________________________________

* Pro forma net revenue was presented under ASU 2014-09, Revenue from Contracts with Customers, for fiscal year 2019 and under Accounting Standards Codification 605, Revenue Recognition (“Topic 605”), for fiscal year 2018.

Acquisition of Brocade

On November 17, 2017 (the “Brocade Acquisition Date”), we acquired Brocade (the “Brocade Merger”).

Brocade was a supplier of networking hardware, software and services, including FC SAN products and Internet Protocol Networking (“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 OEM customers.

We financed the Brocade Merger with a portion of the net proceeds from the issuance of the 2017 Senior Notes, as defined in Note 10.

“Borrowings” as well as with 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

cash acquired ( 1,250 )

Total purchase consideration, net of cash acquired $ 4,788

We assumed all unvested Brocade stock options, RSUs and performance stock units (“PSUs”) held by continuing employees.

The portion of the fair value of partially vested equity awards associated with prior service of Brocade employees represents a component of the total consideration as presented above.

All vested in-the-money Brocade stock options, after giving effect to any acceleration, were cashed out upon the completion of the Brocade Merger.

RSUs and PSUs were valued based on our share price as of the Brocade Acquisition Date.

The following table presents our allocation of the total purchase price, net of cash acquired:

(In millions)

Current assets $ 1,297

Goodwill 2,187

Intangible assets 3,396

Other long-term assets 82

Total assets acquired 6,962

Current portion of long-term debt ( 856 )

Other current liabilities ( 374 )

Long-term debt ( 38 )

Other long-term liabilities ( 906 )

Total liabilities assumed ( 2,174 )

Fair value of net assets acquired $ 4,788

Goodwill is 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.

Goodwill is not 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.

On December 1, 2017, we sold this business to ARRIS International plc (“ARRIS”) for cash consideration of $ 800 million, before contractual working capital adjustments.

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.

Current assets also included assets held-for-sale for Brocade’s headquarters, which was sold for $ 224 million during fiscal year 2018, for no gain or loss.

Our results of continuing operations for fiscal year 2018 included $ 1,780 million of net revenue attributable to Brocade.

It was impracticable to determine the effect on net income attributable to Brocade as we had integrated a substantial portion of Brocade into our ongoing operations.

The results of operations of Brocade were primarily included in our infrastructure software segment.

Transaction costs of $ 29 million related to the Brocade Merger were included in selling, general and administrative expense for fiscal year 2018.

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

IPR&D 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 method under the income approach.

The economic useful life was determined based on the technology cycle related to 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-method under the income approach.

The distributor method determines the fair value by measuring the economic profits generated by an intermediary, which in our case represented OEM customers.

In the with-and-without method, the fair value was measured by the difference between the present values of the cash flows with and without the existing customers in place over the period of time necessary to reacquire the customers.

In both instances, the economic useful life was determined based on historical customer turnover rates.

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 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 forecast period.

The fair value of 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 at the Brocade Acquisition Date:

Description IPR&D Percentage of Completion Estimated Cost to Complete Expected Completion 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

A discount rate of 11 % was applied to the projected cash flows to reflect the risk related to these IPR&D projects.

The discount rate represented 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.

During fiscal year 2020, these IPR&D projects were completed and placed in service.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents combined results of operations for the period 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.

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.

(In millions)

Pro forma net revenue* $ 20,978

Pro forma net income attributable to common stock $ 12,408

________________________________

* Pro forma net revenue was presented under Topic 605 for fiscal year 2018.

Supplemental Financial Information

Cash Equivalents

Cash equivalents included $ 2,471 million and $ 850 million of time deposits and $ 790 million and $ 649 million of money-market funds as of November 1, 2020 and November 3, 2019, respectively.

Cash equivalents included $ 4,668 million and $ 2,471 million of time deposits and $ 1,607 million and $ 790 million of money-market funds as of October 31, 2021 and November 1, 2020, respectively.

For time deposits, carrying value approximates fair value due to the short-term nature of the instruments.

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Total trade accounts receivable sold under the factoring arrangements were $ 4,027 million, $ 3,723 million and $ 1,151 million during fiscal years 2021, 2020 and 2019, respectively.

Factoring fees for the sales of receivables were recorded in other income, net and were not material for any period presented.

Factoring fees for the sales of receivables were recorded in other income, net and were not material for any of the periods presented.

2021 November 1,

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Depreciation expense was $ 539 million, $ 570 million and $ 569 million for fiscal years 2021, 2020, and 2019, respectively.

As of November 1, 2020 and November 3, 2019, $ 27 million and $ 35 million, respectively, of unpaid purchases of property, plant and equipment were included in accounts payable.

Amounts reported as unpaid purchases are presented as cash outflows from investing activities for purchases of property, plant and equipment in the consolidated statements of cash flows in the period in which they are paid.

Other Current Assets

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(In millions)

Unrecognized tax benefits $ 3,185 $ 3,269

Unrecognized tax benefits, interest and penalties $ 3,407 $ 3,185

Contract liabilities 566 823

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(In millions)

Gain from lapse of indemnification $ 116 $ — $ —

Gains on investments $ 99 $ 31 $ 145

Other income 26 56 18

Interest income 16 53 98

Gains on investments 31 145 3

Other expense ( 10 ) ( 50 ) ( 35 )

Gain from lapse of indemnification — 116 —

Other income, net $ 131 $ 206 $ 226

Other income includes gains on sales of businesses and other miscellaneous items.

We have entered into operating and finance leases for our facilities, data centers and certain equipment.

Other income includes dividends, gains on sales of businesses and other miscellaneous items.

At the beginning of fiscal year 2020, we adopted ASU 2016-02, Leases (“Topic 842”) using the optional adoption method, whereby no adjustment to the financial statements of comparative periods was required.

We have operating and finance leases for our facilities, data centers and certain equipment.

Operating lease expense was $ 102 million, $ 106 million and $ 244 million for fiscal years 2021, 2020 and 2019, respectively.

Finance lease expense was $ 14 million for fiscal year 2020.

Finance lease expense was $ 16 million and $ 14 million for fiscal years 2021 and 2020, respectively.

Other information related to leases was as follows:

Fiscal Year Ended

(In millions)

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ROU assets obtained in exchange for finance lease liabilities $ 15 $ 74

2021 November 1,

Weighted-average remaining lease term – operating leases (In years) 10 10

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Supplemental balance sheet information related to leases was as follows:

Classification on the Consolidated Balance Sheet November 1,

Classification on the Consolidated Balance Sheets October 31,

2021 November 1,

(In millions)

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Long-term lease liabilities - finance leases Long-term debt $ 39 $ 48

The maturities of lease liabilities were as follows:

Future minimum lease payments under non-cancelable leases as of October 31, 2021 were as follows:

Operating Leases Finance Leases

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Present value of lease liabilities $ 543 $ 65

As of November 3, 2019, future minimum lease payments under non-cancelable lease liabilities prior to our adoption of Topic 842 were as follows:

(In millions)

Thereafter 390

Total minimum lease payments $ 800

Goodwill and Intangible Assets

Wired Infrastructure Wireless Communications Enterprise Storage Industrial & Other Semiconductor Solutions Infrastructure Software IP Licensing Total

Semiconductor Solutions Infrastructure Software IP Licensing Total

(In millions)

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Acquisitions 35 6,712 — 6,747

Balance as of November 3, 2019 — — — — 25,929 10,776 9 36,714

Reallocation due to change in segments — — — — 9 — ( 9 ) —

Acquisitions — — — — 35 6,712 — 6,747

Sale of business ( 14 ) — — ( 14 )

Balance as of November 1, 2020 25,959 17,488 — 43,447

In fiscal years 2020 and 2019, we reassigned goodwill balances among our reportable segments to reflect changes in our segment structure.

The fair value of each segment, generally determined using a combination of the income approach and the market approach, is compared to our total fair value immediately prior to the reorganization to reassign goodwill.

Acquisition — 10 — 10

Sale of business — ( 7 ) — ( 7 )

Balance as of October 31, 2021 $ 25,959 $ 17,491 $ — $ 43,450

In fiscal year 2020, we reassigned goodwill balances among our reportable segments to reflect changes in our segment structure.

During the fourth quarter of fiscal years 2021, 2020 and 2019, we completed our annual impairment assessments and concluded that goodwill was not impaired in any of these years.

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(In millions)

As of November 1, 2020:

As of October 31, 2021:

Purchased technology $ 23,932 $ ( 17,148 ) $ 6,784

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Total $ 36,161 $ ( 19,379 ) $ 16,782

Based on the amount of intangible assets subject to amortization at November 1, 2020, the expected amortization expense for each of the next five fiscal years and thereafter was as follows:

Based on the amount of intangible assets subject to amortization at October 31, 2021, the expected amortization expense for each of the next five fiscal years and thereafter was as follows:

Expected Amortization Expense

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Dividends on preferred stock ( 299 ) ( 297 ) ( 29 )

Income from continuing operations attributable to noncontrolling interest — — ( 352 )

Income from continuing operations attributable to common stock

6,437 2,664 2,707

Loss from discontinued operations, net of income taxes, attributable to common stock (a)

( 1 ) ( 12 ) ( 18 )

Loss from discontinued operations, net of income taxes, attributable to common stock — ( 1 ) ( 12 )

Net income attributable to common stock $ 6,437 $ 2,663 $ 2,695

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Loss per share from discontinued operations

— ( 0.03 ) ( 0.04 )

Net income per share $ 15.70 $ 6.62 $ 6.77

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Loss per share from discontinued operations

— ( 0.03 ) ( 0.04 )

Net income per share $ 15.00 $ 6.33 $ 6.43

Potentially dilutive shares excluded from the calculation of diluted income per share because their effect would have been antidilutive:

Preferred Stock (b)

________________________________

(a) Fiscal year 2018 excludes $ 1 million of loss from discontinued operations, net of income taxes, attributable to noncontrolling interest.

(b) Represents common stock shares issuable upon the conversion of Mandatory Convertible Preferred Stock, as defined in Note 11.

“Stockholders’ Equity.”

(c) Represents common stock shares issuable upon the exchange of LP Units prior to the effective time of the Mandatory Exchange (refer to Note 11.

“Stockholders’ Equity” for additional information).

For fiscal years 2021, 2020 and 2019, diluted net income per share excluded the potentially dilutive effect of 12 million, 12 million and 1 million shares of common stock, respectively, issuable upon the conversion of Mandatory Convertible Preferred Stock, as defined in Note 11.

“Stockholders’ Equity,” as their effect was antidilutive.

Retirement Plans and Post-Retirement Benefits

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employees who meet the retirement eligibility requirements as of their termination dates, may receive post-retirement medical benefits under our retiree medical account program.

Majority of the eligible employees receive a medical benefit spending account of $ 55,000 upon retirement to pay premiums for medical coverage through the maximum age of 75 as a retiree.

The majority of the eligible employees receive a medical benefit spending account of $ 55,000 upon retirement to pay premiums for medical coverage through the maximum age of 75 as a retiree.

Our group life insurance plan offers post-retirement life insurance coverage for certain U.S.

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The components of net periodic benefit (income) cost other than the service cost are included in other income, net.

Service cost is recognized in operating expenses.

Funded Status

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2021 November 1,

2019 November 1,

2020 October 31,

2021 November 1,

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Interest cost 39 45 3 3

Actuarial loss 61 186 2 14

Actuarial (gain) loss ( 11 ) 61 ( 2 ) 2

Benefit payments ( 102 ) ( 96 ) ( 3 ) ( 3 )

12 unchanged sentences

2021 November 1,

2019 November 1,

2020 October 31,

2021 November 1,

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2021 November 1,

2019 November 1,

2020 October 31,

2021 November 1,

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Fair value of plan assets $ 1,508 $ 1,582 $ 84 $ 88

The fair value of pension plan assets as of November 1, 2020 and November 3, 2019 included $ 160 million and $ 151 million, respectively, of assets for our non-U.S.

The fair value of pension plan assets as of October 31, 2021 and November 1, 2020 included $ 174 million and $ 160 million, respectively, of assets for our non-U.S.

pension plans.

The projected benefit obligations as of November 1, 2020 and November 3, 2019 included $ 206 million and $ 184 million, respectively, of obligations related to our non-U.S.

The projected benefit obligations as of October 31, 2021 and November 1, 2020 included $ 217 million and $ 206 million, respectively, of obligations related to our non-U.S.

pension plans.

The accumulated benefit obligations as of November 1, 2020 and November 3, 2019 included $ 190 million and $ 171 million, respectively, of obligations related to our non-U.S.

The accumulated benefit obligations as of October 31, 2021 and November 1, 2020 included $ 199 million and $ 190 million, respectively, of obligations related to our non-U.S.

pension plans.

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We periodically review the allocation of plan assets relative to alternative allocation models to evaluate the need for adjustments based on forecasted liabilities and plan liquidity needs.

For both fiscal years 2020 and 2019, 100 % of the U.

For both fiscal years 2021 and 2020, 100 % of the U.S.

qualified pension plan assets were allocated to fixed income, in line with the target allocation.

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Fair Value Measurement of Defined Benefit Pension Plan Assets

November 1, 2020

October 31, 2021

Fair Value Measurements at Reporting Date Using

Level 1 Level 2 Level 3 Total

Level 1 Level 2 Total

(In millions)

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Fair Value Measurements at Reporting Date Using

Level 1 Level 2 Level 3 Total

Level 1 Level 2 Total

(In millions)

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Health care cost trend rate assumed for next year 6.75 %

4.50 %- 7.40 %

Rate to which the health care cost trend rate is assumed to decline (ultimate health care cost trend rate)

3.50 %- 4.50 %

Year that the rate reaches the ultimate health care cost trend rate 2029 2029

A one percentage point increase or decrease in the assumed health care cost trend rates would not have had a material effect on the accumulated post-retirement benefit obligations or service and interest cost components of the net periodic benefit cost for any periods presented.

Defined Contribution Plans

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employees participate in a company-sponsored 401(k) plan.

Under the plan, we provide matching contributions to employees up to 6 % of their eligible earnings.

Under the plan, we match employees contributions dollar for dollar up to 6 % of their eligible earnings.

All matching contributions vest immediately.

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receive retirement benefits under various defined contribution retirement plans.

November 1, 2020 November 3, 2019

Effective Interest Rate Aggregate Principal Amount Effective Interest Rate Aggregate Principal Amount

(In millions)

Effective Interest Rate October 31,

2021 November 1,

(In millions, except percentages)

September 2021 Senior Notes - fixed rate

3.137 % notes due November 2035

4.23 % $ 3,250 $ —

3.187 % notes due November 2036

4.79 % 2,750 —

March 2021 Senior Notes - fixed rate

3.419 % notes due April 2033

4.66 % 2,250 —

3.469 % notes due April 2034

4.63 % 3,250 —

January 2021 Senior Notes - fixed rate

1.950 % notes due February 2028

2.450 % notes due February 2031

2.56 % 2,750 —

2.600 % notes due February 2033

2.70 % 1,750 —

3.500 % notes due February 2041

3.60 % 3,000 —

3.750 % notes due February 2051

3.84 % 1,750 —

June 2020 Senior Notes - fixed rate

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1.56 % — 4,069

May 2019 Term Loans - floating rate

LIBOR plus 1.250 % term loan due May 2024

LIBOR plus 1.375 % term loan due May 2026

April 2019 Senior Notes - fixed rate

3.125 % notes due April 2021

3.61 % 525 3.61 % 2,000

3.125 % notes due October 2022

3.53 % 693 3.53 % 1,500

3.625 % notes due October 2024

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2.200 % notes due January 2021

— 2.62 % 2,750

3.000 % notes due January 2022

3.21 % 255 842

3.000 % notes due January 2022

3.21 % 842 3.21 % 3,500

Effective Interest Rate October 31,

2021 November 1,

(In millions, except percentages)

2.650 % notes due January 2023

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Assumed CA Senior Notes - fixed rate

5.375 % notes due December 2019

3.600 % notes due August 2022

4.07 % 283 4.07 % 500

4.500 % notes due August 2023

2 unchanged sentences

5.15 % 265 350

November 1, 2020 November 3, 2019

Effective Interest Rate Aggregate Principal Amount Effective Interest Rate Aggregate Principal Amount

(In millions)

Other borrowings

Commercial paper — 2.55 % (a)

1.375 % convertible notes due January 2020

2.500 % - 4.500 % senior notes due August 2022 - August 2034

2.59 % - 4.55 %

22 2.59 %- 4.55 %

Total principal amount outstanding 41,499 41,498

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Total debt $ 39,665 $ 40,994

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(a) Represents the weighted average interest rate on outstanding commercial paper.

As of November 1, 2020, $ 20 million of short-term and $ 48 million of long-term finance lease liabilities were included in the current portion of long-term debt and long-term debt, respectively.

As of October 31, 2021 and November 1, 2020, short-term finance lease liabilities of $ 26 million and $ 20 million, respectively, were included in the current portion of long-term debt and long-term finance lease liabilities of $ 39 million and $ 48 million, respectively, were included in long-term debt.

September 2021 Senior Notes

In September 2021, we completed our private offers to exchange $ 6.0 billion of certain of our outstanding notes maturing between 2025 and 2030 (the “September 2021 Exchange Offer”) for $ 3,250 million of 3.137 % new senior unsecured notes due November 2035 and $ 2,750 million of 3.187 % new senior unsecured notes due November 2036 (collectively, the “September 2021 Senior Notes”).

As a result of the September 2021 Exchange Offer, we paid premiums of $ 762 million, which were included in unamortized discount and issuance costs.

We may redeem or purchase, in whole or in part, any of the September 2021 Senior Notes prior to their respective maturities, subject to a specified make-whole premium determined in accordance with the indenture governing the September 2021 Senior Notes, plus accrued and unpaid interest.

In the event of a change in control, note holders will have the right to require us to repurchase their notes at a price equal to 101 % of the principal amount of such notes, plus accrued and unpaid interest.

As of October 31, 2021, the September 2021 Senior Notes were recorded as long-term debt, net of discount and issuance costs, which are amortized to interest expense over the respective terms of these borrowings.

March 2021 Senior Notes

In March 2021, we completed our private offers to exchange $ 5.5 billion of certain of our outstanding notes maturing between 2024 and 2027 (the “March 2021 Exchange Offer”) for $ 2,250 million of 3.419 % new senior unsecured notes due April 2033 and $ 3,250 million of 3.469 % new senior unsecured notes due April 2034 (collectively, the “March 2021 Senior Notes”).

As a result of the March 2021 Exchange Offer, we paid premiums of $ 581 million, which were included in unamortized discount and issuance costs.

We may redeem or purchase, in whole or in part, any of the March 2021 Senior Notes prior to their respective maturities, subject to a specified make-whole premium determined in accordance with the indenture governing the March 2021 Senior Notes, plus accrued and unpaid interest.

As of October 31, 2021, the March 2021 Senior Notes were recorded as long-term debt, net of discount and issuance costs, which are amortized to interest expense over the respective terms of these borrowings.

In connection with the March 2021 Exchange Offer, Broadcom Corporation (“BRCM”) and Broadcom Technologies Inc.

(“BTI”) were automatically and unconditionally released from their guarantees in accordance with the respective indentures governing the January 2021 Senior Notes, June 2020 Senior Notes, May 2020 Senior Notes, April 2020 Senior Notes, and April 2019 Senior Notes, as defined below respectively.

January 2021 Senior Notes

In January 2021, we issued $ 10 billion of senior unsecured notes (the “January 2021 Senior Notes”).

We may redeem or purchase, in whole or in part, any of the January 2021 Senior Notes prior to their respective maturities, subject to a specified make-whole premium determined in accordance with the indenture governing the January 2021 Senior Notes, plus accrued and unpaid interest.

As of October 31, 2021, the January 2021 Senior Notes were recorded as long-term debt, net of discount and issuance costs, which are amortized to interest expense over the respective terms of these borrowings.

Using the net proceeds from the January 2021 Senior Notes, we repaid the outstanding balance of $ 5,888 million of our unsecured term A-3 facility and unsecured term A-5 facility under the credit agreement entered into on November 4, 2019 (the “November 2019 Credit Agreement”), repurchased $ 3,830 million of certain of our outstanding notes maturing between 2021 and 2023 through a cash tender offer and redemption, and repaid $ 282 million of our 2.200 % notes upon maturity in January 2021.

As a result of these repayments and repurchases, we incurred premiums of $ 151 million and wrote off $ 47 million of unamortized discount and issuance costs, both of which were included in interest expense.

January 2021 Credit Agreement

In January 2021, we entered into a credit agreement (the “January 2021 Credit Agreement”), which provides for a five-year $ 7.5 billion unsecured revolving credit facility (the “Revolving Facility”), of which $ 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 aggregate amount otherwise available under the Revolving Facility for revolving loans.

Subject to the terms of the January 2021 Credit Agreement, we are permitted to borrow, repay and reborrow revolving loans at any time prior to the earlier of (a) January 19, 2026 and (b) the date of termination in whole of the revolving lenders’ commitments under the January 2021 Credit Agreement.

In connection with the January 2021 Credit Agreement, we terminated the credit agreement entered into on May 7, 2019 (the “May 2019 Credit Agreement”), which provided for a five-year $ 5 billion unsecured revolving credit facility, and the November 2019 Credit Agreement.

As of October 31, 2021, we had no borrowings outstanding under the Revolving Facility.

June 2020 Senior Notes

On June 4, 2020, we completed the settlement of our private offers to exchange $ 3,742 million of certain series of our outstanding notes maturing between 2021 and 2024, for $ 1,695 million of new senior notes due 2026 and $ 2,222 million of new senior notes due 2028 (collectively, the “June 2020 Senior Notes”).

As a result of this exchange, we incurred premiums of $ 177 million.

The June 2020 Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, unsubordinated basis by Broadcom Corporation (“BRCM”) and Broadcom Technologies Inc.

In June 2020, we completed our private offers to exchange $ 3,742 million of certain series of our outstanding notes maturing between 2021 and 2024, for $ 1,695 million of new senior notes due 2026 and $ 2,222 million of new senior notes due 2028 (collectively, the “June 2020 Senior Notes”).

As a result of this exchange, we paid premiums of $ 177 million, which were included in unamortized discount and issuance costs.

We may redeem or purchase, in whole or in part, any of the June 2020 Senior Notes prior to their respective maturities, subject to a specified make-whole premium determined in accordance with the indenture governing the June 2020 Senior Notes, plus accrued and unpaid interest.

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May 2020 Senior Notes

On May 8, 2020, we issued $ 8 billion of senior unsecured notes (the “May 2020 Senior Notes”).

The May 2020 Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, unsubordinated basis by BRCM and BTI.

In May 2020, we issued $ 8 billion of senior unsecured notes (the “May 2020 Senior Notes”).

We may redeem or purchase, in whole or in part, any of the May 2020 Senior Notes prior to their respective maturities, subject to a specified make-whole premium determined in accordance with the indenture governing the May 2020 Senior Notes, plus accrued and unpaid interest.

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The May 2020 Senior Notes are recorded as long-term debt, net of discount and issuance costs, which are amortized to interest expense over the respective terms of these borrowings.

The net proceeds from this issuance, together with the remaining net proceeds from the issuance of the April 2020 Senior Notes, as defined below, were used to repay an aggregate of $ 5,424 million of term loans outstanding under the November 2019 Credit Agreement, as defined below, consisting of repayments of $ 2,712 million of each of our unsecured term A-3 and A-5 facilities and $ 3 billion of borrowings outstanding under the Revolving Facility, as defined below.

The net proceeds from this issuance, together with the remaining net proceeds from the issuance of the April 2020 Senior Notes, as defined below, were used to repay an aggregate of $ 5,424 million of term loans outstanding under the November 2019 Credit Agreement, consisting of repayments of $ 2,712 million of each of our unsecured term A-3 and A-5 facilities and $ 3 billion of borrowings outstanding under the unsecured revolving credit facility provided by the May 2019 Credit Agreement.

April 2020 Senior Notes

In April 2020, we issued $ 4.5 billion of senior unsecured notes (the “April 2020 Senior Notes”).

The April 2020 Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, unsubordinated basis by BRCM and BTI.

We may redeem or purchase, in whole or in part, any of the April 2020 Senior Notes prior to their respective maturities, subject to a specified make-whole premium determined in accordance with the indenture governing the April 2020 Senior Notes, plus accrued and unpaid interest.

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The April 2020 Senior Notes are recorded as long-term debt, net of discount and issuance costs, which are amortized to interest expense over the respective terms of these borrowings.

Pursuant to a cash tender offer that we completed on April 23, 2020, we repurchased $ 2,361 million of our 3.000 % notes due January 2022, $ 1,274 million of our 3.125 % notes due April 2021 and $ 351 million of our 2.200 % notes due January 2021 with the net proceeds from the April 2020 Senior Notes.

Pursuant to a cash tender offer that we completed in April 2020, we repurchased $ 2,361 million of our 3.000 % notes due January 2022, $ 1,274 million of our 3.125 % notes due April 2021 and $ 351 million of our 2.200 % notes due January 2021 with the net proceeds from the April 2020 Senior Notes.

As a result of these repurchases, we incurred premiums of $ 78 million and wrote off $ 15 million of unamortized discount and issuance costs, both of which were included in interest expense.

November 2019 Term Loans

On November 4, 2019, in connection with the Symantec Asset Purchase, we entered into a credit agreement (the “November 2019 Credit Agreement”), which provides for a $ 7,750 million unsecured term A-3 facility and a $ 7,750 million unsecured term A-5 facility (collectively, the “November 2019 Term Loans”).

Interest on our November 2019 Term Loans is based on a floating rate.

We used net proceeds from the November 2019 Term Loans to fund the $ 10.7 billion Symantec Asset Purchase and to repay $ 750 million principal amount of 5.375 % notes due December 2019 and $ 2,750 million principal amount of 2.375 % notes due January 2020, on their respective maturity dates.

Our obligations under the November 2019 Credit Agreement are guaranteed on an unsecured basis by BRCM and BTI.

During the fiscal year ended November 1, 2020, we repaid an aggregate of $ 9,612 million of our November 2019 Term Loans, consisting of repayments of $ 5,931 million and $ 3,681 million of our unsecured term A-3 and A-5 facilities, respectively, and wrote off $ 60 million of unamortized discount and issuance costs.

As a result of these repayments, all remaining principal payments are due more than one year after November 1, 2020 and were included in long-term debt.

May 2019 Term Loans

In May 2019, we entered into a credit agreement (the “May 2019 Credit Agreement”), which provided for a $ 2 billion unsecured term A-3 facility, a $ 2 billion unsecured term A-5 facility and a $ 2 billion unsecured term A-7 facility (collectively, the “May 2019 Term Loans”).

Interest on our May 2019 Term Loans is based on a floating rate.

Our obligations under the May 2019 Credit Agreement are guaranteed on an unsecured basis by BRCM, BTI and Broadcom Cayman Finance Limited (“Cayman Finance”), which subsequently merged into BTI during fiscal year 2019 with BTI remaining as the surviving entity.

During fiscal year 2019, we fully repaid our unsecured term A-3 facility of $ 2 billion and repaid $ 1.2 billion of each of our unsecured term A-5 and A-7 facilities under the May 2019 Credit Agreement.

As a result, we wrote off $ 22 million of discount and issuance costs, which is included in interest expense.

During fiscal year 2020, we repaid an aggregate of $ 1.6 billion of the May 2019 Term Loans, representing the outstanding balance of the May 2019 Term Loans.

The May 2019 Credit Agreement also provided for a five-year $ 5 billion unsecured revolving credit facility (the “Revolving Facility”), of which $ 500 million was available for the issuance of multi-currency letters of credit.

The issuance of letters of credit and certain other instruments would reduce the aggregate amount otherwise available under the Revolving Facility for revolving loans.

Subject to the terms of the May 2019 Credit Agreement, we are permitted to borrow, repay and reborrow revolving loans at any time prior to the earlier of (a) May 2024 or (b) the date of termination in whole of the revolving lenders’ commitments under the May 2019 Credit Agreement in accordance with the terms thereof.

As of November 1, 2020 and November 3, 2019, we had no borrowings outstanding under the Revolving Facility.

On November 4, 2019, in connection with the acquisition of the Symantec Business, we entered into the November 2019 Credit Agreement, which provides for a $ 7,750 million unsecured term A-3 facility and a $ 7,750 million unsecured term A-5 facility (collectively, the “November 2019 Term Loans”).

We used net proceeds from the November 2019 Term Loans to fund the $ 10.7 billion Symantec Business acquisition and to repay $ 750 million principal amount of 5.375 % notes due December 2019 and $ 2,750 million principal amount of 2.375 % notes due January 2020, on their respective maturity dates.

During fiscal year 2020, we repaid an aggregate of $ 9,612 million of our November 2019 Term Loans, consisting of repayments of $ 5,931 million and $ 3,681 million of our unsecured term A-3 and A-5 facilities, respectively, and wrote off $ 60 million of unamortized discount and issuance costs.

During fiscal year 2021, we repaid the remaining outstanding balance of the November 2019 Term Loans using the proceeds from the January 2021 Senior Notes.

April 2019 Senior Notes

In April 2019, we issued $ 11 billion of senior unsecured notes (“April 2019 Senior Notes”).

The April 2019 Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, unsubordinated basis by BRCM and BTI.

In April 2019, we issued $ 11 billion of senior unsecured notes (the “April 2019 Senior Notes”).

We may redeem or purchase, in whole or in part, any of the April 2019 Senior Notes prior to their respective maturities, subject to a make-whole premium determined in accordance with the indenture governing the April 2019 Senior Notes, plus accrued and unpaid interest.

The April 2019 Senior Notes are recorded as long-term debt, net of discount and issuance costs, which are amortized to interest expense over the respective terms of these borrowings.

Exchange Offer

In connection with the issuance of the June 2020 Senior Notes, May 2020 Senior Notes, April 2020 Senior Notes (collectively, the “2020 Senior Notes”) and the April 2019 Senior Notes, we entered into registration rights agreements, 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 (the “Exchange Offer”) each series of the 2020 Senior Notes and April 2019 Senior Notes for notes that are registered with the U.S.

Securities and Exchange Commission (the “SEC”) (the “Registered Notes”), with substantially identical terms.

On July 6, 2020, we launched the Exchange Offer, which completed on August 10, 2020.

Substantially all of our 2020 Senior Notes and April 2019 Senior Notes were tendered and exchanged for the corresponding Registered Notes in the Exchange Offer.

Registered Exchange Offer

In connection with the issuance of the June 2020 Senior Notes, the May 2020 Senior Notes, the April 2020 Senior Notes (collectively, the “2020 Senior Notes”) and the April 2019 Senior Notes, we entered into registration rights agreements, pursuant to which we were obligated to use commercially reasonable efforts to file with the Securities and Exchange Commission (the “SEC”), and cause to be declared effective, a registration statement with respect to an offer to exchange (the “Registered Exchange Offer”) each series of the 2020 Senior Notes and the April 2019 Senior Notes for notes that are registered with the SEC (the “Registered Notes”), with substantially identical terms.

We completed the Registered Exchange Offer on August 10, 2020.

Substantially all of our 2020 Senior Notes and April 2019 Senior Notes were tendered and exchanged for the corresponding Registered Notes in the Registered Exchange Offer.

Commercial Paper

In February 2019, we established a commercial paper program pursuant to which we may issue unsecured commercial paper notes (“Commercial Paper”) in an aggregate principal amount of up to $ 2 billion outstanding at any time with

maturities of up to 397 days from the date of issue.

In February 2019, we established a commercial paper program pursuant to which we may issue unsecured commercial paper notes (“Commercial Paper”) in principal amount of up to $ 2 billion outstanding at any time with maturities of up to 397 days from the date of issue.

Commercial Paper is sold under customary terms in the commercial paper market and may be issued at a discount from par or, alternatively, may be sold at par and bear interest at rates dictated by market conditions at the time of their issuance.

The Revolving Facility supports our commercial paper program.

Outstanding Commercial Paper borrowings reduce the amount that would otherwise be available to borrow for general corporate purposes under the Revolving Facility.

We intend to continuously replace our Commercial Paper upon maturity with newly issued commercial paper.

In addition, we have the ability to finance the Commercial Paper borrowings on a long-term basis as they are supported by the Revolving Facility.

We have recorded Commercial Paper, net of discount, as long-term debt.

The discount associated with the Commercial Paper is amortized to interest expense over its term.

As of November 1, 2020, we had no Commercial Paper outstanding.

We had $ 1 billion of Commercial Paper outstanding as of November 3, 2019 with maturities generally less than sixty days.

Outstanding Commercial Paper reduces the amount that would otherwise be available to borrow for general corporate purposes under the Revolving Facility.

As our commercial paper program is supported by the Revolving Facility, we have the ability and intent to continuously refinance Commercial Paper.

As of October 31, 2021 and November 1, 2020, we had no Commercial Paper outstanding.

2017 Senior Notes

During the fiscal year ended October 29, 2017, BRCM and Cayman Finance issued $ 17,550 million of senior unsecured notes (the “2017 Senior Notes”).

During the fiscal year ended October 29, 2017, Broadcom Cayman Finance Limited, which subsequently merged into BTI during fiscal year 2019 with BTI remaining as the surviving entity, and BRCM issued $ 17,550 million of senior unsecured notes (the “2017 Senior Notes”).

Our 2017 Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, unsubordinated basis by Broadcom and BTI.

We may redeem or purchase, in whole or in part, any of the 2017 Senior Notes prior to their respective maturities, subject to a make-whole premium determined in accordance with the indenture governing the 2017 Senior Notes, plus accrued and unpaid interest.

We may redeem or purchase, in whole or in part, any of the 2017

Senior Notes prior to their respective maturities, subject to a make-whole premium determined in accordance with the indenture governing the 2017 Senior Notes, plus accrued and unpaid interest.

In the event of a change in control, note holders will have the right to require us to repurchase their notes at a price equal to 101 % of the principal amount of such notes plus accrued and unpaid interest.

During fiscal year 2018, substantially all of the 2017 Senior Notes were tendered and exchanged for notes registered with the SEC, with substantially identical terms.

During the fiscal year ended November 4, 2018, substantially all of the 2017 Senior Notes were tendered and exchanged for notes registered with the SEC, with substantially identical terms.

Assumed CA Senior Notes

In connection with our acquisition of CA, we assumed $ 2,250 million in aggregate principal amount of CA’s outstanding senior unsecured notes (the “Assumed CA Senior Notes”).

In connection with our acquisition of CA during fiscal year 2019, we assumed $ 2.25 billion CA’s outstanding senior unsecured notes (the “Assumed CA Senior Notes”).

CA remains the sole obligor under the Assumed CA Senior Notes.

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During fiscal year 2019, we fully repaid $ 400 million of our 3.600 % notes due August 2020.

Assumed Brocade Convertible Notes

As a result of our acquisition of Brocade, we assumed $ 575 million in aggregate principal amount of Brocade’s 1.375 % convertible senior unsecured notes (the “Assumed Brocade Convertible Notes”).

During fiscal year 2018, we repurchased $ 537 million in aggregate principal amount for $ 548 million at a conversion rate of $ 1,018 for each $1,000 of principal surrendered for conversion.

We fully repaid the remaining $ 37 million of the Assumed Brocade Convertible Notes during fiscal year 2020.

Fair Value of Debt

As of November 1, 2020, the estimated aggregate fair value of our debt was $ 45,274 million.

As of October 31, 2021, the estimated aggregate fair value of our debt was $ 43,392 million.

The fair value of our senior notes was determined using quoted prices from less active markets.

The estimated fair value of our November 2019 Term Loans approximated the carrying value due to their floating interest rates and consistency in our credit ratings.

All of our debt obligations are categorized as Level 2 instruments.

Future Principal Payments of Debt

The future scheduled principal payments of debt as of November 1, 2020 were as follows:

The future scheduled principal payments of debt as of October 31, 2021 were as follows:

Future Scheduled Principal Payments

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Total $ 41,499

As of November 1, 2020 and November 3, 2019, we accrued interest payable of $ 304 million and $ 214 million, respectively, and were in compliance with all debt covenants .

As of October 31, 2021 and November 1, 2020, we accrued interest payable of $ 282 million and $ 304 million, respectively, and were in compliance with all debt covenants.

Stockholders’ Equity

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The conversion rates are subject to anti-dilution adjustments.

As of November 1, 2020, the minimum conversion rate was 3.0567 and the maximum conversion rate was 3.5729 .

We recognized $ 27 million and $ 29 million of accrued preferred stock dividends, which were presented as temporary equity in our consolidated balance sheets as of November 1, 2020 and November 3, 2019, respectively.

Redomiciliation Transaction

For the period prior to the Redomiciliation Transaction, our stockholders’ equity reflected Broadcom-Singapore’s outstanding ordinary shares.

On April 4, 2018, all Broadcom-Singapore outstanding ordinary shares were exchanged on a one -for-one basis for newly issued shares of Broadcom common stock and Broadcom-Singapore became a wholly-owned subsidiary of Broadcom.

In conjunction with the Redomiciliation Transaction and pursuant to the Mandatory Exchange, all outstanding LP Units held by the limited partners were mandatorily exchanged for approximately 22 million newly issued shares of Broadcom common stock on a one -for-one basis.

As a result, all limited partners of the Partnership became common stockholders of Broadcom.

In addition, all related outstanding special preference shares of Broadcom-Singapore were automatically redeemed upon the Mandatory Exchange.

Noncontrolling Interest

Immediately prior to the Redomiciliation Transaction, 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 consolidated statement of operations for fiscal year 2018 excluded the noncontrolling interest’s proportionate share of our results prior to the Redomiciliation Transaction.

In addition, we presented the proportionate share of equity attributable to the noncontrolling interest as a separate component of total equity within our consolidated statements of equity for the period prior to the Redomiciliation Transaction.

Cash Dividends and Distributions Declared and Paid

As of October 31, 2021, the minimum conversion rate was 3.0822 and the maximum conversion rate was 3.6025 .

We recognized $ 27 million of accrued preferred stock dividends at each of October 31, 2021 and November 1, 2020, which were presented as temporary equity in our consolidated balance sheets.

Cash Dividends Declared and Paid

2021 2020 2019

(In millions, except per share/unit data)

(In millions, except per share data)

Dividends per share to common stockholders $ 14.40 $ 13.00 $ 10.60

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Dividends to preferred stockholders $ 299 $ 299 $ —

Distributions per unit to limited partners $ — $ — $ 3.50

Distributions to limited partners $ — $ — $ 77

Stock Repurchase Program

Pursuant to an $ 18 billion stock repurchase program previously authorized by our Board of Directors, we repurchased and retired approximately 21 million and 32 million shares of our common stock for $ 5,435 million and $ 7,258 million during fiscal years 2019 and 2018, respectively.

Pursuant to an $ 18 billion stock repurchase program previously authorized by our Board of Directors, we repurchased and retired approximately 21 million shares of our common stock for $ 5,435 million during fiscal year 2019.

This authorization ended on November 3, 2019.

Equity Incentive Award Plans

Stock-based incentive awards are provided to employees and directors under the terms of various Broadcom equity incentive plans.

In July 2009, our Board of Directors adopted, and our stockholders approved, the Avago Technologies Limited 2009 Equity Incentive Award Plan (the “2009 Plan”) to authorize the grant of options, stock appreciation rights, RSUs, dividend equivalents, performance awards, and other stock-based awards.

A total of 20 million shares of common stock were initially reserved for issuance under the 2009 Plan, subject to annual increases starting in fiscal year 2012.

The amount of the annual increase was equal to the least of (a) 6 million shares, (b) 3 % of the common stock outstanding on the last day of the immediately preceding fiscal year and (c) such smaller number of common stock as determined by our Board.

However, no more than 90 million shares of common stock may be issued upon the exercise of equity awards issued under the 2009 Plan.

The 2009 Plan became effective on July 27, 2009.

Options issued to employees under the 2009 Plan prior to March 2011 generally expire ten years following the date of grant.

Since March 2011, options issued to employees under the 2009 Plan generally expire seven years after the date of grant.

Options awarded to non-employees under this plan generally expire after five years .

Options issued to both employees and non-employees under the 2009 Plan generally vested over a period of four years from the date of grant and were granted with an exercise price equal to the fair market value on the date of grant.

Any stock options cancelled or forfeited after July 27, 2009 under the equity incentive plans adopted prior to the 2009 Plan became available for issuance under the 2009 Plan.

RSU awards granted to employees under the 2009 Plan generally vest annually over four years .

The 2009 Plan expired in July 2019.

In connection with the acquisition of LSI Corporation (“LSI”), we assumed the LSI 2003 Equity Incentive Plan (the “2003 Plan”) and outstanding unvested stock options and RSUs originally granted by LSI under the 2003 Plan that were held by continuing employees.

Under the 2003 Plan, we may grant to former employees of LSI and other employees who were not employees of Broadcom at the time of the acquisition restricted stock awards, RSUs, stock options and stock appreciation rights with an exercise price that is no less than the fair market value on the date of grant.

No participant may be granted stock options covering more than 4 million shares or more than an aggregate of 1 million shares of restricted stock and RSUs in any fiscal year.

Equity awards granted under the 2003 Plan following the LSI acquisition are on similar terms and consistent with similar grants made pursuant to the 2009 Plan.

As of November 1, 2020, 3 million shares remained available for issuance under the 2003 Plan.

In connection with the acquisition of BRCM, we assumed the BRCM 2012 Stock Incentive Plan (the “2012 Plan”) and outstanding unvested RSUs originally granted by BRCM under the 2012 Plan that were held by continuing employees.

Under the 2012 Plan, we may grant to former employees of BRCM and other employees who were not employees of Broadcom at the time of the acquisition restricted stock awards, RSUs, stock options and stock appreciation rights with an exercise price that is no less than the fair market value on the date of grant.

No participant may be granted stock options, restricted stock or

RSUs, covering more than an aggregate of 4 million shares in any fiscal year.

Equity awards granted under the 2012 Plan following the acquisition of BRCM are on similar terms and consistent with similar grants made pursuant to the 2009 Plan.

As of November 1, 2020, 95 million shares remained available for issuance under the 2012 Plan.

The number of shares available for issuance under the 2012 Plan is subject to an annual increase of 12 million shares.

We also grant market-based RSUs with both a service condition and a market condition as part of our equity compensation programs.

In December 2021, our Board of Directors authorized a stock repurchase program to repurchase up to $ 10 billion of our common stock from time to time on or prior to December 31, 2022.

Repurchases under our stock repurchase program may be effected through a variety of methods, including open market or privately negotiated purchases.

The timing and amount of shares repurchased will depend on the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors.

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.

Equity Incentive Award Plan

In connection with the acquisition of BRCM, we assumed the BRCM 2012 Stock Incentive Plan (the “Original 2012 Plan”) and outstanding unvested RSUs originally granted by BRCM under the Original 2012 Plan that were held by continuing employees.

During the second quarter of fiscal year 2021, our stockholders approved the amendment and restatement of the Original 2012 Plan, now called Broadcom Inc.

2012 Stock Incentive Plan (the “Amended 2012 Plan”).

Under the Amended 2012 Plan, we may grant to employees stock options and stock appreciation rights with an exercise price that is no less than the fair market value on the date of grant, restricted stock awards and RSUs.

No participant may be granted such awards for more than an aggregate of 4 million shares in any fiscal year.

Equity awards granted under the Amended 2012 Plan generally vest over four years .

The Amended 2012 Plan reduced the number of shares available for new equity award grants to 20 million shares and removed the annual share replenishment provision provided under the Original 2012 Plan.

We will make no further equity award grants under our LSI Corporation 2003 Equity Incentive Plan, which we assumed in connection with the acquisition of LSI Corporation.

As of October 31, 2021, 21 million shares remained available for issuance under the Amended 2012 Plan.

We may grant market-based RSUs with both a service condition and a market condition as part of our equity compensation programs.

The market-based RSUs generally vest over four years , subject to satisfaction of market conditions.

During fiscal years 2020, 2019 and 2018, we granted market-based RSUs under which grantees may receive the number of shares ranging from 0 % to 200 % of the original grant at vesting based upon the total stockholder return (“TSR”) on our common stock as compared to the TSR of an index group of companies.

During fiscal years 2021, 2020 and 2019, we granted market-based RSUs under which grantees may receive the number of shares ranging from 0 % to 300 % of the original grant at vesting based upon the total stockholder return (“TSR”) on our common stock on an absolute basis and as compared to the TSR of an index group of companies.

Amendment to the RSU Vesting Schedule

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Estimated income tax benefits for stock-based compensation $ 283 $ 345 $ 400

Income tax benefits for stock-based awards exercised or released $ 147 $ 232 $ 181

Excess income tax benefits for stock-based awards exercised or released $ 310 $ 147 $ 232

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Each Multi-Year Equity Award vests on the same basis as four annual grants made March 15 of each year, beginning in fiscal year 2019, with successive four-year vesting periods.

Stock-based compensation expense related to the Multi-Year Equity Awards was $ 902 million and $ 890 million for fiscal years 2020 and 2019, respectively.

Stock-based compensation expense related to the Multi-Year Equity Awards was $ 816 million, $ 902 million and $ 890 million for fiscal years 2021, 2020 and 2019, respectively.

In connection with the amendment to the vesting of certain time-based RSUs from an annual cycle to a quarterly cycle, we recognized approximately $ 140 million in incremental compensation cost during fiscal year 2019.

As of November 1, 2020, the total unrecognized compensation cost related to unvested stock-based awards was $ 4,021 million, which is expected to be recognized over the remaining weighted-average service period of 3.4 years.

As of October 31, 2021, the total unrecognized compensation cost related to unvested stock-based awards was $ 2,967 million, which is expected to be recognized over the remaining weighted-average service period of 2.9 years.

The following table summarizes the weighted-average assumptions utilized to calculate the fair value of market-based awards granted in the periods presented:

Market-Based Awards

2021 2020 2019

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(In millions, except per share data)

Balance as of October 29, 2017 18 $ 163.42

Balance as of November 4, 2018 18 $ 195.50

Assumed in CA Merger 1 $ 206.14

Granted 33 $ 183.64

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Balance as of November 3, 2019 40 $ 188.52

Assumed in CA Merger 1 $ 206.14

Granted 3 $ 252.36

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Forfeited ( 3 ) $ 189.84

Balance as of November 1, 2020 32 $ 188.35

The aggregate fair value of time- and market-based RSUs that vested in fiscal years 2020, 2019 and 2018 was $ 2,254 million, $ 2,958 million and $ 1,516 million, respectively, which represents the market value of our common stock on the date that the RSUs vested.

Balance as of October 31, 2021 23 $ 200.38

The aggregate fair value of time- and market-based RSUs that vested in fiscal years 2021, 2020 and 2019 was $ 3,715 million, $ 2,254 million and $ 2,958 million, respectively, which represented 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’ tax obligations due upon the vesting of RSUs.

Stock Option Awards

A summary of time- and market-based stock option activity is as follows:

Number of Options

Outstanding Weighted-

Exercise Price

Per Share Weighted-

Life (In years) Aggregate

(In millions, except years and per share data)

Balance as of October 29, 2017 10 $ 49.54

Exercised ( 2 ) $ 47.41 $ 534

Cancelled — * $ 72.37

Balance as of November 4, 2018 8 $ 50.14

Exercised ( 4 ) $ 47.88 $ 761

Cancelled — * $ 49.00

Balance as of November 3, 2019 4 $ 51.83

Exercised ( 3 ) $ 49.05 $ 917

Balance as of November 1, 2020 1 $ 62.35 0.4 $ 266

Fully vested as of November 1, 2020 1 $ 62.39 0.4 $ 264

Fully vested and expected to vest as of November 1, 2020

1 $ 62.35 0.4 $ 266

________________________________

* Represents fewer than 0.5 million shares.

As of October 31, 2021, our stock options outstanding were not material.

The aggregate intrinsic value of stock options exercised in fiscal years 2021, 2020 and 2019 was $ 339 million, $ 917 million and $ 761 million, respectively.

Components of Income from Continuing Operations Before Income Taxes

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Income from continuing operations before income taxes $ 6,765 $ 2,443 $ 2,226

Components of Benefit from Income Taxes

Components of Provision for (Benefit from) Income Taxes

The provision for income taxes in fiscal year 2021 was primarily due to higher income from continuing operations, offset in part by excess tax benefits from stock-based awards, a benefit from foreign derived intangible income, and the recognition of gross unrecognized tax benefits as a result of lapses of statutes of limitations and audit settlements.

The benefit from income taxes in fiscal year 2020 was primarily due to jurisdictional mix of income and expense, the recognition of gross uncertain tax benefits as a result of lapses of statutes of limitations, the remeasurement of certain foreign deferred tax assets and liabilities, and excess tax benefits from stock-based awards.

The benefit from income taxes in fiscal year 2019 was primarily due to excess tax benefits from stock-based awards, the recognition of gross unrecognized tax benefits as a result of audit settlements and lapses of statutes of limitations net of increases in balances related to tax positions taken during the year, deferred tax remeasurement in state and foreign jurisdictions, internal reorganizations, and the partial release of our valuation allowance as a result of the CA Merger, partly offset by a change in estimate of our fiscal year 2018 provision resulting from regulations issued related to the U.S.

The benefit from income taxes in the fiscal year 2019 was primarily due to excess tax benefits from stock-based awards, the recognition of gross unrecognized tax benefits as a result of audit settlements and lapses of statutes of limitations net of increases in balances related to tax positions taken during the year, deferred tax remeasurement in state and foreign jurisdictions, internal reorganizations, and the partial release of our valuation allowance as a result of the CA Merger, partly offset by a change in estimate of our fiscal year 2018 provision resulting from regulations issued related to the U.S.

Tax Cuts and Jobs Act (“2017 Tax Reform Act”).

The benefit from income taxes in the fiscal year 2018 was primarily due to income tax benefits recognized from the enactment of the 2017 Tax Reform Act and as a result of our redomiciliation to the United States on April 4, 2018.

We have obtained several tax incentives from the Singapore Economic Development Board which provide that qualifying income earned in Singapore is subject to tax incentives or reduced rates of Singapore income tax.

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If we cannot, or elect not to, comply with any such conditions specified, we will lose the related tax benefits and we could be required to refund previously realized material tax benefits.

Before taking into consideration the effects of the 2017 Tax Reform Act and other indirect tax impacts, the effect of these tax incentives and tax holiday was to increase the benefit from income taxes by approximately $833 million, $ 923 million and $ 590 million for fiscal years 2020, 2019 and 2018, respectively.

Significant components of benefit from income taxes are as follows:

Before taking into consideration the effects of the 2017 Tax Reform Act and other indirect tax impacts, the effect of these tax incentives and tax holiday was to decrease the provision for income taxes by approximately $ 1,156 million for fiscal year 2021 and increase the benefit from income taxes by approximately $ 833 million and $ 923 million for fiscal years 2020 and 2019, respectively.

Significant components of provision for (benefit from) income taxes are as follows:

2021 2020 2019

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Foreign 534 506 342

1,026 564 277

Deferred tax expense (benefit from):

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( 997 ) ( 1,082 ) ( 787 )

Total benefit from income taxes $ ( 518 ) $ ( 510 ) $ ( 8,084 )

Total provision for (benefit from) income taxes $ 29 $ ( 518 ) $ ( 510 )

Rate Reconciliation

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State, net of federal benefit ( 0.8 ) ( 3.6 ) ( 4.6 )

2017 Tax Reform Act — 5.1 ( 159.0 )

Redomiciliation transaction withholding tax remeasurement — — ( 25.6 )

Foreign income taxed at different rates ( 22.8 ) ( 48.6 ) ( 52.5 )

Deemed inclusion of foreign earnings 12.7 23.3 25.9

Foreign-derived intangible income deduction ( 3.1 ) ( 1.5 ) —

Deferred taxes on unremitted foreign earnings ( 0.7 ) ( 1.1 ) 1.9

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Other, net 1.0 ( 0.4 ) ( 1.7 )

2017 Tax Reform Act — — 5.1

Effective tax rate on income before income taxes 0.4 % ( 21.2 ) % ( 22.9 ) %

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Depreciation and amortization 847 1,477

Unamortized discount and issuance costs 374 57

Foreign earnings not indefinitely reinvested 73 112

Deferred income tax liabilities 1,294 1,646

Net deferred income tax liabilities $ ( 329 ) $ ( 1,481 )

Net deferred income tax assets (liabilities) $ 668 $ ( 329 )

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their basis for income tax purposes and the tax effects of net operating losses and tax credit carryforwards.

The decrease in net deferred income tax liabilities was primarily a result of the amortization of acquisition-related intangible assets included in the consolidated statement of operations.

In connection with the Symantec Asset Purchase in November 2019, we established $ 28 million of net deferred tax assets primarily as a result of the difference in book basis and tax basis related to acquired assets.

The increase in net deferred income tax assets was primarily a result of an increase in deferred revenue and amortization of acquisition-related intangible assets, offset in part by unamortized discount and issuance costs included in the consolidated statement of operations.

In connection with the acquisition of the Symantec Business in November 2019, we established $ 28 million of net deferred tax assets primarily as a result of the difference in book basis and tax basis related to acquired assets.

In connection with the CA Merger in November 2018, we established $ 2,434 million of net deferred tax liabilities on the excess of the book basis over the tax basis of acquired identified intangible assets and investments in certain foreign subsidiaries that had not been indefinitely reinvested, partially offset by acquired tax attributes.

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All other current and future earnings of all our foreign subsidiaries are not considered permanently reinvested.

The following table presents net deferred income tax assets (liabilities) as reflected on the consolidated balance sheets:

2020 November 3,

(In millions)

Other long-term assets $ 240 $ 50

Other long-term liabilities ( 569 ) ( 1,531 )

Net long-term income tax liabilities $ ( 329 ) $ ( 1,481 )

The increase in the valuation allowance to $ 1,707 million in fiscal year 2020 from $ 1,563 million in fiscal year 2019 was primarily due to federal and state deferred tax assets arising from credits and net operating loss carryforwards not expected to be realized.

As of November 1, 2020, we had U.S.

The increase in the valuation allowance to $ 1,782 million in fiscal year 2021 from $ 1,707 million in fiscal year 2020 was primarily due to state and foreign deferred tax assets arising from credits and net operating loss carryforwards not expected to be realized.

As of October 31, 2021, we had U.S.

federal net operating loss carryforwards of $ 51 million, U.S.

state net operating loss carryforwards of $ 2,951 million and other foreign net operating loss carryforwards of $ 1,126 million.

federal and state net operating loss carryforwards begin to expire in our fiscal year ending October 31, 2021 (“fiscal year 2021”).

The other foreign net operating losses expire in various fiscal years beginning 2021.

As of November 1, 2020, we had $ 301 million and $ 1,759 million of U.S.

federal and state research and development tax credits, respectively, which if not utilized, begin to expire in fiscal year 2021.

Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in the case of an “ownership change” of a corporation or separate return loss year limitations.

Any ownership changes, as defined, may restrict the utilization of carryforwards.

As of November 1, 2020, we had approximately $ 67 million of federal net operating loss carryforwards in the U.S.

subject to an annual limitation.

We do not expect these limitations to result in any permanent loss of our tax benefits.

state net operating loss carryforwards of $ 2,610 million and foreign net operating loss carryforwards of $ 782 million, all of which expire in various years beginning fiscal year 2022.

We also had $ 83 million, $ 1,896 million and $ 43 million of U.S.

federal, state, and foreign research and development tax credits, respectively.

federal, state and foreign research and development credits, if not utilized, begin to expire in fiscal years 2022, 2022 and 2023, respectively.

Utilization of our net operating loss and tax credit carryforwards may be subject to substantial annual limitations due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions.

Such annual limitations could result in the expiration of the net operating loss and tax credit carryforwards before their utilization.

The events that may cause ownership changes include, but are not limited to, a cumulative stock ownership change of greater than 50% over a three year period.

Uncertain Tax Positions

Gross unrecognized tax benefits increased by $ 326 million during fiscal year 2020, resulting in gross unrecognized tax benefits of $ 4,748 million as of November 1, 2020.

Gross unrecognized tax benefits increased by $ 282 million during fiscal year 2021, resulting in gross unrecognized tax benefits of $ 5,030 million as of October 31, 2021.

Gross unrecognized tax benefits increased by $ 326 million during fiscal year 2020, resulting in gross unrecognized tax benefits of $ 4,748 million as of November 1, 2020.

Gross unrecognized tax benefits increased by $ 392 million during fiscal year 2019, resulting in gross unrecognized tax benefits of $ 4,422 million as of November 3, 2019.

The increase in gross unrecognized tax benefits was primarily due to the recognition of unrecognized tax positions of $ 1,112 million related to the transition tax on the mandatory deemed repatriation of accumulated non-U.S.

earnings of U.S.

controlled foreign corporations, offset by a reduction of our federal deferred income tax liabilities on accumulated non-U.S.

The increase in gross unrecognized tax benefits was also as a result of our redomiciliation to the United States on April 4, 2018, and to a lesser extent, the Brocade Merger.

We recognize interest and penalties related to unrecognized tax benefits within the benefit from income taxes.

We recognize interest and penalties related to unrecognized tax benefits within the provision for (benefit from) income taxes.

Accrued interest and penalties were included within other long-term liabilities.

During fiscal years 2020 and 2018, we recognized interest and penalties of $ 37 million and $ 59 million, respectively, within the benefit from income taxes.

During fiscal years 2021 and 2020, we recognized interest and penalties of $ 46 million and $ 37 million, respectively, within the provision for (benefit from) income taxes.

There was no amount recognized during fiscal year 2019.

As of November 1, 2020 and November 3, 2019, the combined amount of cumulative accrued interest and penalties was approximately $ 340 million and $ 303 million, respectively.

As of October 31, 2021 and November 1, 2020, the combined amount of cumulative accrued interest and penalties was approximately $ 386 million and $ 340 million, respectively.

The following table reconciles the beginning and ending balance of gross unrecognized tax benefits:

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Increases in balances related to tax positions taken during current period

379 460 1,726

Decreases in balances related to settlements with taxing authorities ( 38 ) ( 42 ) ( 229 )

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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 November 1, 2020 and November 3, 2019, approximately $ 5,088 million and $ 4,725 million of the unrecognized tax benefits and accrued interest and penalties would affect our effective tax rate, respectively.

As of October 31, 2021 and November 1, 2020, approximately $ 5,416 million and $ 5,088 million of the unrecognized tax benefits and accrued interest and penalties would affect our effective tax rate, respectively.

We are subject to U.S.

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semiconductor solutions and infrastructure software.

Each segment represents a component for which separate financial information is available that is utilized on a regular basis by the CODM in determining how to allocate resources and evaluate performance.

Each segment represents a component for which separate financial information is available that is utilized on a regular basis by the CODM in determining how to allocate resources and

evaluate performance.

The reportable segments are determined based on several factors including, but not limited to, customer base, homogeneity of products, technology, delivery channels and similar economic characteristics.

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Infrastructure software.

We provide a portfolio of mainframe, enterprise and storage area networking solutions, which enables customers to leverage the benefits of agility, automation, insights, resiliency and security in managing business processes and technology investments, and to reduce the cost and complexity of managing business information within a shared storage environment.

We also offer a cyber security solutions portfolio, including data loss prevention, endpoint protection, and web, email and cloud security solutions.

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.

We also offer mission critical FC SAN products and related software.

Our CODM assesses the performance of each segment and allocates resources to each segment based on net revenue and operating results and does not evaluate each segment using discrete asset information.

Operating results by segment include items that are directly attributable to each segment and also include shared expenses such as global operations, including manufacturing support, logistics and quality control, expenses associated with selling, general and administrative activities, facilities and information technology expenses.

Shared expenses are primarily allocated based on revenue and headcount.

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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.

Acquisition-related costs 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 operating results for each segment.

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Geographic Information

Net revenue by country is based on the geographic shipment or delivery location as specified by the distributors, OEMs, contract manufacturers, channel partners, or software customers who purchased our products or services.

Net revenue by country is based primarily on the geographic shipment or delivery location as specified by the distributors, OEMs, contract manufacturers, channel partners, or software customers who purchased our products or services.

For the majority of our products, title and control transfer to our customers in Penang, Malaysia.

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Net revenue from the United States for fiscal years 2021, 2020 and 2019 was $ 5,285 million, $ 4,778 million and $ 4,235 million, respectively.

Net revenue from China (including Hong Kong) for fiscal years 2020, 2019 and 2018 was $ 7,808 million, $ 8,056 million and $ 10,305 million, respectively.

Net revenue from Singapore for fiscal year 2019 was $ 2,507 million (amounts were less than 10% for fiscal years 2020 and 2018).

Net revenue from China (including Hong Kong) for fiscal

years 2021, 2020 and 2019 was $ 9,752 million, $ 7,808 million and $ 8,056 million, respectively.

Net revenue from Singapore for fiscal years 2021 and 2019 was $ 2,754 million and $ 2,507 million, respectively (the amount was less than 10% for fiscal year 2020).

Net revenue from other foreign countries for fiscal years 2021, 2020 and 2019 was $ 9,659 million, $ 11,302 million and $ 7,799 million, respectively.

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We sell our products through our direct sales force and a select network of distributors and channel partners globally.

No customer accounted for 10% or more of our net accounts receivable balance at November 1, 2020 compared with one customer which accounted for 24 % of our net accounts receivable balance at November 3, 2019.

No customer accounted for more than 10% of our net accounts receivable balance as of October 31, 2021 or November 1, 2020.

During fiscal years 2021, 2020 and 2019, one customer accounted for 18 %, 13 % and 17 % of our net revenue, respectively.

Revenue from this customer was included in our semiconductor solutions segment.

During fiscal year 2018, no customer accounted for 10% or more of our net revenue.

Commitments and Contingencies

The following table summarizes contractual obligations and commitments as of November 1, 2020:

The following table summarizes contractual obligations and commitments as of October 31, 2021:

Purchase Commitments Other Contractual Commitments

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Purchase obligations exclude agreements that are cancelable without penalty.

Cancellation for outstanding purchase orders for capital expenditures in connection with 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 Contractual Commitments.

Represents amounts payable pursuant to agreements related to IT, human resources, and other service agreements.

Due to the inherent uncertainty with respect to the timing of future cash outflows associated with our unrecognized tax benefits at November 1, 2020, we are unable to reliably estimate the timing of cash settlement with the respective taxing authorities.

Therefore, $ 3,185 million of unrecognized tax benefits and accrued interest classified within other long-term liabilities as of November 1, 2020 have been excluded from the contractual obligations table above.

Standby Letters of Credit

As of November 1, 2020 and November 3, 2019, we had standby letters of credit of $ 65 million and $ 62 million, respectively.

Standby letters of credit are financial guarantees provided by third parties for leases, customs, taxes and certain self-insured risks.

If the guarantees are called, we must reimburse the provider of the guarantees.

Due to the inherent uncertainty with respect to the timing of future cash outflows associated with our unrecognized tax benefits at October 31, 2021, we are unable to reliably estimate the timing of cash settlement with the respective taxing authorities.

Therefore, $ 3,407 million of unrecognized tax benefits and accrued interest and penalties classified within other long-term liabilities on our consolidated balance sheet as of October 31, 2021 have been excluded from the 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 lines 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 IP rights, as well 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 outcome of such proceedings is inherently uncertain, with material adverse outcomes possible.

Legal proceedings and regulatory investigations or inquiries are often complex, may require the expenditure of significant funds and other resources, and the outcome of such proceedings is inherently uncertain, with material adverse outcomes possible.

IP 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 IP.

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Central District Court found willful infringement, which if it had, could have resulted in enhanced damages up to three times the amount awarded.

Broadcom and Apple have appealed to the United States Court of Appeals for the Federal Circuit.

Broadcom and Apple have appealed to the United States Court of Appeals for the Federal Circuit (the “Federal Circuit Court”) and oral arguments were heard on September 1, 2021.

We are unable to predict the date on which the Federal Circuit Court will issue its decision.

We believe that the evidence and the law do not support the U.S.

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We believe the low end of the possible range of loss is zero, but we cannot reasonably estimate the ultimate outcome, as a number of factors (including the appeal by Broadcom and Apple) could significantly change the assessment of damages.

Lawsuits Relating to the Acquisition of Emulex Corporation

On April 8, 2015, a putative class action complaint was filed in the U.S.

Central District Court, entitled Gary Varjabedian, et al.

Emulex Corporation, et al., No.

8:15-cv-554-CJC-JCG.

The complaint names as defendants Emulex Corporation (“Emulex”), its directors, Avago Technologies Wireless (U.S.A.) Manufacturing (“AT Wireless”) and Emerald Merger Sub, and purported to assert claims under Sections 14(d), 14(e) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The complaint alleged, 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, the U.S.

Central District Court issued an order appointing the lead plaintiff 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, which the U.S.

Central District Court granted with prejudice on January 13, 2016.

Plaintiff filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit Court”) on January 15, 2016.

The appeal is captioned Gary Varjabedian, et al.

Emulex Corporation, et al., No.

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, and on October 5, 2016 Plaintiff-Appellant filed his reply brief.

The Ninth Circuit Court heard oral arguments on October 5, 2017.

On April 20, 2018, the Ninth Circuit Court issued an opinion affirming in part and reversing in part 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 Act to the U.S.

Central District Court for reconsideration.

On May 4, 2018, the Defendants-Appellees filed a Petition for Rehearing En Banc with the Ninth Circuit Court.

On July 13, 2018, Plaintiff-Appellant filed an Opposition to the Petition for Rehearing En Banc.

On September 6, 2018, the Ninth Circuit Court issued an order denying the Petition for Rehearing En Banc.

On October 11, 2018, Defendants-Appellees filed a Petition for a Writ of Certiorari to the United States Supreme Court (the “U.S.

Supreme Court”), which was granted on January 4, 2019.

On April 23, 2019, the U.S.

Supreme Court dismissed the writ of certiorari as having been improvidently granted.

On May 28, 2019, the Ninth Circuit

Court remanded the case back to the U.S.

Central District Court.

On October 6, 2019, Plaintiff voluntarily dismissed AT Wireless from this action and the remaining defendants, Emulex and its directors, filed motions to dismiss the complaint on October 7, 2019.

On February 26, 2020, the U.S.

Central District Court dismissed Plaintiff’s complaint with prejudice.

Other Matters

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The following is a summary of significant restructuring expense recognized primarily in operating expenses:

• During fiscal year 2020, we initiated cost reduction activities associated with the Symantec Asset Purchase.

As a result, we recognized $ 174 million of restructuring expense primarily related to employee termination costs.

We have substantially completed the restructuring activities related to the Symantec Asset Purchase.

• During fiscal year 2019, we initiated cost reduction activities associated with the CA Merger.

As a result, we recognized $ 28 million and $ 740 million of restructuring expense primarily related to employee termination and lease and other exit costs during fiscal year 2020 and fiscal year 2019, respectively.

We have substantially completed the restructuring activities related to the CA Merger.

• During fiscal year 2021, we initiated cost reduction activities associated with plans to align our workforce with strategic business activities and to improve efficiencies in our operations.

As a result, we recognized $ 149 million of restructuring expense primarily related to employee termination costs during fiscal year 2021.

We have substantially completed these restructuring activities.

• Restructuring expense during fiscal year 2020 was primarily related to employee termination and other cost reduction activities related to the acquisition of the Symantec Business of $ 174 million and the CA Merger of $ 28 million.

We have substantially completed the restructuring activities related to the acquisition of the Symantec Business and the CA Merger.

The following table summarizes the significant activities within, and components of, the restructuring liabilities:

Employee Termination Costs Lease and Other Exit Costs Total

Employee Termination Costs Other Exit Costs (a)

(In millions)

Balance as of October 29, 2017 $ 28 $ 17 $ 45

Restructuring charges (a)

Utilization ( 165 ) ( 86 ) ( 251 )

Balance as of November 4, 2018 $ 16 $ 6 $ 22

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Balance as of November 3, 2019 69 39 108

Restructuring charges (a)

Restructuring charges (b)

Utilization ( 221 ) ( 50 ) ( 271 )

Effect of adoption of Topic 842 (b)

— ( 36 ) ( 36 )

Balance as of November 1, 2020 (c)

Effect of adoption of Topic 842 (c)

— ( 36 ) ( 36 )

Balance as of November 1, 2020 34 — 34

Restructuring charges 100 13 113

Utilization ( 130 ) ( 13 ) ( 143 )

Balance as of October 31, 2021 (d)

______________________________

(a) Included $ 19 million and $ 2 million of restructuring expense related to discontinued operations recognized during fiscal years 2020 and 2018, respectively, which was included in loss from discontinued operations.

(b) Upon adoption of Topic 842, certain restructuring lease liabilities were required to be recognized as a reduction to the corresponding ROU assets.

(c) The majority of the employee termination costs balance is expected to be paid within the first half of fiscal year 2021.

(a) Included $ 30 million and $ 134 million of restructuring expense related to the write-down of certain lease-related ROU assets and other lease-related charges during fiscal years 2020 and 2019, respectively.

(b) Included $ 19 million of restructuring expense related to discontinued operations recognized during fiscal year 2020, which was included in loss from discontinued operations.

(c) Upon adoption of Topic 842, certain restructuring lease liabilities were required to be recognized as a reduction to the corresponding ROU assets .

(d) The majority of the employee termination costs balance is expected to be paid within the next six months.

Restructuring, impairment and disposal charges in our consolidated statement of operations for the fiscal year ended October 31, 2021 included $ 36 million for the write-down of certain lease-related ROU assets and other lease-related charges.

As of October 31, 2021, short-term and long-term lease liabilities included $ 52 million of liabilities related to restructuring activities.

Impairment and Disposal Charges

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On December 7, 2021 , our Board of Directors declared a quarterly cash dividend of $ 4.10 per share on our common stock, payable on December 31, 2021 to stockholders of record on December 22, 2021 .

Supplementary Financial Data — Quarterly Data (Unaudited)

Fiscal Quarter Ended

(In millions, except per share data)

Total net revenue $ 6,467 $ 5,821 $ 5,742 $ 5,858 $ 5,776 $ 5,515 $ 5,517 $ 5,789

Gross margin 3,747 3,316 3,189 3,264 3,152 3,034 3,089 3,208

Operating income 1,526 1,008 766 714 1,054 865 970 555

Income from continuing operations 1,324 689 568 380 847 715 693 481

Income (loss) from discontinued operations, net of income taxes — ( 1 ) ( 5 ) 5 — — ( 2 ) ( 10 )

Net income 1,324 688 563 385 847 715 691 471

Dividends on preferred stock (9)

( 74 ) ( 74 ) ( 75 ) ( 74 ) ( 29 ) — — —

Net income attributable to common stock $ 1,250 $ 614 $ 488 $ 311 $ 818 $ 715 $ 691 $ 471

Diluted income per share attributable to common stock (10) :

Income per share from continuing operations $ 2.93 $ 1.46 $ 1.18 $ 0.73 $ 1.97 $ 1.71 $ 1.64 $ 1.15

Income (loss) per share from discontinued operations — ( 0.01 ) ( 0.01 ) 0.01 — — — ( 0.03 )

Net income per share $ 2.93 $ 1.45 $ 1.17 $ 0.74 $ 1.97 $ 1.71 $ 1.64 $ 1.12

Dividends declared and paid per share to common stockholders $ 3.25 $ 3.25 $ 3.25 $ 3.25 $ 2.65 $ 2.65 $ 2.65 $ 2.65

Dividends declared and paid per share to common stockholders -full year $ 13.00 $ 10.60

_________________________________

(1) Included amortization of acquisition-related intangible assets of $ 1,561 million.

(2) Included amortization of acquisition-related intangible assets of $ 1,553 million.

(3) Included amortization of acquisition-related intangible assets of $ 1,553 million.

(4) Included the results of Symantec Business beginning with the fiscal quarter ended February 2, 2020 in connection with the Symantec Asset Purchase on November 4, 2019.

Also included amortization of acquisition-related intangible assets of $ 1,553 million.

(5) Included amortization of acquisition-related intangible assets of $ 1,301 million.

(6) Included amortization of acquisition-related intangible assets of $ 1,303 million.

(7) Included amortization of acquisition-related intangible assets of $ 1,299 million.

(8) Included amortization of acquisition-related intangible assets of $ 1,309 million and restructuring, impairment and disposal charges of $ 629 million.

(9) Beginning with the fiscal quarter ended November 3, 2019, net income attributable to common stock excluded dividends on Mandatory Convertible Preferred Stock issued during the fiscal quarter ended November 3, 2019.

(10) The sum of quarterly per share information may not equal annual earnings per share as quarterly earnings per share were computed independently for each period presented.

Schedule II — Valuation and Qualifying Accounts

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Distributor credit allowances (1)

Fiscal year ended November 1, 2020 $ 153 $ 696 $ ( 700 ) $ 149

Fiscal year ended October 31, 2021

$ 149 $ 756 $ ( 777 ) $ 128

Fiscal year ended November 1, 2020

$ 153 $ 696 $ ( 700 ) $ 149

Fiscal year ended November 3, 2019

$ 151 $ 705 $ ( 703 ) $ 153

Other accounts receivable allowances (2)

Fiscal year ended November 1, 2020 $ 38 $ 84 $ ( 94 ) $ 28

Fiscal year ended October 31, 2021

$ 28 $ 14 $ ( 40 ) $ 2

Fiscal year ended November 1, 2020

$ 38 $ 84 $ ( 94 ) $ 28

Fiscal year ended November 3, 2019

$ 12 $ 99 $ ( 73 ) $ 38

Income tax valuation allowances:

Fiscal year ended November 1, 2020 $ 1,563 $ 149 $ ( 5 ) $ 1,707

Fiscal year ended October 31, 2021

$ 1,707 $ 121 $ ( 46 ) $ 1,782

Fiscal year ended November 1, 2020

$ 1,563 $ 149 $ ( 5 ) $ 1,707

Fiscal year ended November 3, 2019

$ 1,347 $ 284 $ ( 68 ) $ 1,563

________________________________

(1) Distributor credit allowances relate to price adjustments and other allowances.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data