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Item 8. Financial Statements and Supplementary Data

2022-12-16 compared with 2021-12-17 · 282 added, 458 removed, 1209 unchanged (38% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Balance Sheets

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

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”).

and its subsidiaries (the “Company”) as of October 30, 2022 and October 31, 2021, 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 30, 2022, 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 30, 2022, 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.

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 30, 2022 and October 31, 2021, and the results of its operations and its cash flows for each of the three years in the period ended October 30, 2022 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 30, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

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CONSOLIDATED BALANCE SHEETS

2021 November 1,

2022 October 31,

(In millions, except par value)

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100 shares authorized;

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

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

8.00 % Mandatory Convertible Preferred Stock, Series A, 0 and 4 shares issued and outstanding;

aggregate liquidation value of $ 0 and $ 3,737 as of October 30, 2022 and October 31, 2021, respectively

Common stock, $ 0.001 par value;

2,900 shares authorized;

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

418 and 413 shares issued and outstanding as of October 30, 2022 and October 31, 2021, respectively

Additional paid-in capital

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Fiscal Year Ended

2021 November 1,

2022 October 31,

2021 November 1,

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Interest expense ( 1,737 ) ( 1,885 ) ( 1,777 )

Other income, net 131 206 226

Other income (expense), net ( 54 ) 131 206

Income from continuing operations before income taxes 12,434 6,765 2,443

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Loss from discontinued operations, net of income taxes

— ( 1 ) ( 12 )

Net income 11,495 6,736 2,960

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Net income attributable to common stock $ 11,223 $ 6,437 $ 2,663

Basic income per share attributable to common stock:

Income per share from continuing operations $ 15.70 $ 6.62 $ 6.80

Loss per share from discontinued operations — — ( 0.03 )

Net income per share $ 15.70 $ 6.62 $ 6.77

Diluted income per share attributable to common stock:

Income per share from continuing operations $ 15.00 $ 6.33 $ 6.46

Loss per share from discontinued operations — — ( 0.03 )

Net income per share $ 15.00 $ 6.33 $ 6.43

Net income per share attributable to common stock:

Basic $ 27.44 $ 15.70 $ 6.62

Diluted $ 26.53 $ 15.00 $ 6.33

Weighted-average shares used in per share calculations:

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Fiscal Year Ended

2021 November 1,

2022 October 31,

2021 November 1,

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Other comprehensive income (loss), net of tax:

Change in actuarial loss and prior service costs associated with defined benefit pension plans and post-retirement benefit plans

( 8 ) 24 ( 24 )

Change in unrealized gain on derivative instruments 37 — —

Change in actuarial loss and prior service costs associated with defined benefit plans 25 ( 8 ) 24

Other comprehensive income (loss), net of tax 62 ( 8 ) 24

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Fiscal Year Ended

2021 November 1,

2022 October 31,

2021 November 1,

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Purchases of property, plant and equipment ( 424 ) ( 443 ) ( 463 )

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

Proceeds from sales of investments 169 — —

Purchases of investments ( 200 ) — —

Sales of investments 200 169 —

Other 3 ( 8 ) 8

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Other borrowings, net — — ( 1,285 )

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

Payments of dividends ( 7,032 ) ( 6,212 ) ( 5,534 )

Repurchases of common stock - repurchase program ( 7,000 ) — —

Shares repurchased for tax withholdings on vesting of equity awards ( 1,455 ) ( 1,299 ) ( 765 )

Issuance of preferred stock, net — — 3,679

Issuance of common stock 114 170 276

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Net income — — — — — 2,960 — 2,960

Other comprehensive loss — — — — — — ( 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

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

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

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

Cumulative effect of accounting change

— — — — — ( 10 ) 8 ( 2 )

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

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

Dividends to common stockholders

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Dividends to preferred stockholders

— — — — — ( 299 ) — ( 299 )

Common stock issued

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— — ( 3 ) — ( 1,302 ) — — ( 1,302 )

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

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

Net income — — — — — 11,495 — 11,495

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

Other comprehensive income — — — — — — 62 62

Fair value of partially vested equity awards assumed in connection with an acquisition — — — — 4 — — 4

Dividends to common stockholders

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Common stock issued — — 8 — 114 — — 114

— — 9 — 170 — — 170

Stock-based compensation — — — — 1,533 — — 1,533

Repurchases of common stock — — ( 12 ) — ( 3,316 ) ( 3,684 ) — ( 7,000 )

Common stock issued in connection with Mandatory Convertible Preferred Stock conversion ( 4 ) — 12 — — — — —

Shares repurchased for tax withholdings on vesting of equity awards

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Our fiscal year ended October 30, 2022 (“fiscal year 2022”) 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.

The first quarter of our fiscal year 2022 ended on January 30, 2022, the second quarter ended on May 1, 2022 and the third quarter ended on July 31, 2022.

Our fiscal year ended October 31, 2021 (“fiscal year 2021”) and fiscal year ended November 1, 2020 (“fiscal year 2020”) 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.

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.

Certain reclassifications have been made to the consolidated statement of cash flows for fiscal year 2019.

These reclassifications have no impact on previously reported operating, investing or financing cash flows.

During the first quarter of fiscal year 2020, we changed our organizational structure, resulting in two reportable segments:

We have two reportable segments:

semiconductor solutions and infrastructure software.

Reclassifications have also been made to segment operating income.

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 accounting principles in the United States (“GAAP”).

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The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic.

The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic, and many of these estimates could require increased judgment and carry a higher degree of variability and volatility.

Actual results could differ materially from these estimates, and such differences could affect the results of operations reported in future periods.

As the impact of the COVID-19 pandemic continues to develop, many of these estimates could require increased judgment and carry a higher degree of variability and volatility, and may change materially in future periods.

Cash and cash equivalents.

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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.

Allowances for doubtful accounts were not material as of October 30, 2022 or October 31, 2021.

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 October 31, 2021 and November 1, 2020 were $ 129 million and $ 174 million, respectively.

Allowances for sales returns and distributor credit allowances as of October 30, 2022 and October 31, 2021 were $ 126 million and $ 129 million, respectively.

Concentrations of credit risk and significant customers.

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The excess and obsolete balance determined by this analysis becomes the basis for our excess and obsolete inventory charge and the written-down value of the inventory becomes its new cost basis.

Retirement benefits.

Retirement benefit plans.

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 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.

discount rates are based on the results of matching expected plan benefit payments with cash flows from a hypothetical yield curve constructed with high-quality corporate bond yields.

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

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

discount rates are based on a hypothetical yield curve constructed using high-quality corporate bonds selected to yield cash flows that match the expected timing and amount of the benefit payments.

expected rate of return on plan assets is set equal to the discount rate due to the implementation of our fully-matched, liability-driven investment strategy.

We evaluate these assumptions at least annually.

For the non-U.S.

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.

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

Derivative instruments.

We use derivative financial instruments, primarily foreign exchange forward contracts, to manage exposure to foreign exchange risk.

Our forward contracts generally mature within three months .

We use derivative financial instruments to manage exposure to foreign exchange risk and interest rate risk.

We do not use derivative financial instruments for speculative or trading purposes.

Outstanding derivatives are recognized as either assets or liabilities at their fair values based on Level 2 inputs as defined in the fair value hierarchy.

The accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and its hedging designation.

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 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 October 31, 2021 or November 1, 2020.

Outstanding derivatives are recognized as assets or liabilities at their fair values based on Level 2 inputs, as defined in the fair value hierarchy.

For derivative instruments designated as cash flow hedges, the changes in fair value 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.

We use foreign exchange forward contracts to manage exposure to foreign exchange risk.

These forward contracts are not designated as hedging instruments, and the changes in fair value are recognized in other income (expense), net in the period of change.

We did not have any outstanding foreign exchange forward contracts as of October 30, 2022 or October 31, 2021.

The gains and losses recorded in other income (expense), net for derivative instruments not designated as hedges were not material.

During fiscal year 2022, we entered into treasury rate lock contracts that mature in approximately one year to hedge variability of cash flows due to changes in the benchmark interest rate of anticipated future debt issuances.

These treasury rate locks are designated and accounted for as cash flow hedging instruments.

As of October 30, 2022, the total notional amount of these contracts was $ 1.3 billion, and the fair value of these contracts was $ 47 million, which was recorded as a derivative asset with the gains recorded net of tax as a component of accumulated other comprehensive loss on our consolidated balance sheet.

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 3 to 10 years.

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 3 to 10 years.

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

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On a quarterly basis, we monitor factors and changes in circumstances that could indicate carrying amounts of long-lived assets, including purchased intangible assets and property, plant and equipment, may not be recoverable.

Factors we consider important which could trigger an impairment review include (i) significant under-performance relative to historical or projected future operating results, (ii) significant changes in the manner of our use of the acquired assets or the strategy for our overall business, and (iii) significant negative industry or economic trends.

Factors we consider important which could trigger an impairment review include:

(i) significant under-performance relative to historical or projected future operating results, (ii) significant changes in the manner of our use of the acquired assets or the strategy for our overall business, and (iii) significant negative industry or economic trends.

An impairment loss must be measured if the sum of the expected future cash flows (undiscounted and before interest) from the use and eventual disposition of the asset (or asset group) is less than the net book value of the asset (or asset group).

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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.

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.

Our software licenses have standalone functionality from which customers derive benefit, and the customer obtains control of the software when it is delivered or made available for download.

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The majority of our NRE contract revenues meet the over time criteria.

As such, revenue is recognized over the development period with the measure of progress using the input method based on costs incurred to total cost (“cost-to-cost”) as the services are provided.

As such, revenue is recognized over the development period with the measure of progress using the input method based on costs incurred to total cost as the services are provided.

For NRE contracts that do not meet the over time criteria, revenue is recognized at a point in time when the NRE services are complete.

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When available, we use directly observable transactions to determine the standalone selling prices for performance obligations.

Our estimates of standalone selling price for each performance obligation require judgment that considers multiple factors, including, but not limited to, historical discounting trends for products and services and pricing practices through different sales channels, gross margin objectives, internal costs, competitor pricing strategies, technology lifecycles and market conditions.

When directly observable transactions are not available, our estimates of standalone selling price for each performance obligation require judgment that considers multiple factors, including, but not limited to, historical discounting trends for products and services and pricing practices through different sales channels, gross margin objectives, internal costs, competitor pricing strategies, technology lifecycles and market conditions.

We separately determine the standalone selling prices by product or service type.

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We also estimate the standalone selling price of our material rights.

Lastly, we estimate the value of the customer’s option to purchase or receive additional products or services at a discounted price by estimating the incremental discount the customer would obtain when exercising the option and the likelihood that the option would be exercised.

We estimate the value of the customer’s option to purchase or receive additional products or services at a discounted price by estimating the incremental discount the customer would obtain when exercising the option and the likelihood that the option would be exercised.

Other Policies and Judgments

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Each of the additional products and services is generally considered distinct from those products or services transferred to the customer before the modification.

We evaluate whether the contract price for the additional products and services reflects the standalone selling price as adjusted for facts and circumstances applicable to that contract.

We evaluate whether the contract price for the additional products and services reflects the

standalone selling price as adjusted for facts and circumstances applicable to that contract.

In these cases, we account for the additional products or services as a separate contract.

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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 Not Yet Adopted

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

Recently Adopted Accounting Guidance.

In October 2021, the Financial Accounting Standards Board 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.

We early adopted this guidance at the beginning of fiscal year 2022 and it did not materially impact our consolidated financial statements.

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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Contract assets and contract liabilities balances were as follows:

Contract Assets Contract Liabilities

2022 October 31,

(In millions)

Balance as of November 1, 2020

$ 158 $ 3,443

Balance as of October 31, 2021

$ 126 $ 3,185

Contract Assets $ 128 $ 126

Contract Liabilities $ 3,341 $ 3,185

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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Contract liabilities include amounts billed or collected and advanced payments on contracts or arrangements which may include termination for convenience provisions.

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 2022 that was included in the contract liabilities balance as of October 31, 2021 was $ 2,615 million.

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.

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Accordingly, our remaining performance obligations disclosed above are not indicative of revenue for future periods .

Pending Acquisition of VMware, Inc.

On May 26, 2022, we entered into an Agreement and Plan of Merger (the “VMware Merger Agreement”) to acquire all of the outstanding shares of VMware, Inc.

(“VMware”) in a cash-and-stock transaction (the “VMware Merger”) that values VMware at approximately $ 61 billion based on the closing price of Broadcom common stock on May 25, 2022.

We will also assume VMware’s closing date outstanding debt, net of expected cash.

Under the terms of the VMware Merger Agreement, each share of VMware common stock issued and outstanding immediately prior to the effective time of the VMware Merger will be indirectly converted into the right to receive, at the election of the holder of such share of VMware common stock, either $ 142.50 in cash, without interest, or 0.2520 shares of Broadcom common stock.

The stockholder election will be subject to proration, such that the total number of shares of VMware common stock entitled to receive cash and the total number of shares of VMware common stock entitled to receive Broadcom common stock, will, in each case, be equal to 50 % of the aggregate number of shares of VMware common stock issued and outstanding immediately prior to the effective time of the VMware Merger.

We will assume all outstanding VMware RSU awards and performance stock unit awards held by continuing employees.

The assumed awards will be converted into RSU awards for shares of Broadcom common stock.

All outstanding in-the-money VMware stock options and RSU awards held by non-employee directors will be accelerated and converted into the right to receive cash and shares of Broadcom common stock, in equal parts.

Effective upon the effective time of the VMware Merger, one member of the VMware Board of Directors, to be mutually agreed by us and VMware, will be added to our Board of Directors.

In connection with the execution of the VMware Merger Agreement, we entered into a commitment letter on May 26, 2022, with certain financial institutions that committed to provide, subject to the terms and conditions of the commitment letter, a senior unsecured bridge facility in an aggregate principal amount of $ 32 billion.

The VMware Merger, which is expected to be completed in our fiscal year ending October 29, 2023 (“fiscal year 2023”), is subject to satisfaction or waiver of customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and clearance under the antitrust laws of the European Union and certain other jurisdictions.

On October 3, 2022, we registered approximately 59 million shares of our common stock.

On November 4, 2022, VMware stockholders adopted the VMware Merger Agreement.

We and VMware each have termination rights under the VMware Merger Agreement and, under specified circumstances, upon termination of the agreement, we and VMware would be required to pay the other a termination fee of $ 1.5 billion.

Acquisition of the Symantec Corporation Enterprise Security Business

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The Symantec Business includes a deep and broad mix of products, services and solutions, unifying cloud and on-premises security to provide advanced threat protection and information protection across endpoints, network, email and cloud applications.

We financed this acquisition with the net proceeds from borrowings under the November 2019 Term Loans, as defined in Note 10.

“Borrowings”.

We financed this acquisition with borrowings.

The following table presents our allocation of the total purchase price:

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Substantially all goodwill is deductible for tax purposes.

Current assets and current liabilities included amounts held-for-sale related to the acquired Symantec Cyber Security Services (“CSS”) business.

The CSS business was not aligned with our acquisition-date strategic objectives and was sold on April 30, 2020.

Current assets and current liabilities included amounts held-for-sale related to the acquired Symantec Cyber Security Services business, which was not aligned with our acquisition-date strategic objectives and was sold on April 30, 2020.

We do not have any material continuing involvement with this business and have presented its results in discontinued operations.

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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 acquisition of the Symantec Business as of the beginning of fiscal year 2019.

The following unaudited pro forma financial information presents combined results of operations for the period presented, as if we had completed the acquisition of the Symantec Business as of the beginning of our fiscal year ended November 3, 2019 (“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 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 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.

On November 5, 2018 (the “CA Acquisition Date”), we completed our acquisition of CA (the “CA Merger”), which was a leading provider of information technology (“IT”) management software and solutions.

We acquired CA to enhance our infrastructure software capabilities.

We financed the CA Merger with the net proceeds from $ 18 billion of term loans, as well as with cash on hand of the combined companies.

Purchase Consideration

(In millions)

Cash paid for outstanding CA common stock $ 18,402

Cash paid by Broadcom to retire CA’s term loan 274

Cash paid for vested CA equity awards 101

Fair value of partially vested assumed equity awards 67

Total purchase consideration 18,844

cash acquired ( 2,750 )

Total purchase consideration, net of cash acquired $ 16,094

All vested in-the-money CA stock options, after giving effect to any acceleration, and all outstanding deferred stock units were cashed out upon the completion of the CA Merger.

We assumed all unvested CA equity awards held by continuing employees.

The portion of the fair value of partially vested equity awards associated with prior service of CA employees represents a component of the total consideration as presented above and was valued based on our share price as of the CA Acquisition Date.

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

(In millions)

Current assets $ 1,665

Goodwill 9,796

Intangible assets 12,045

Other long-term assets 240

Total assets acquired 23,746

Current liabilities ( 1,966 )

Long-term debt ( 2,255 )

Other long-term liabilities ( 3,431 )

Total liabilities assumed ( 7,652 )

Fair value of net assets acquired $ 16,094

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

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

Goodwill is not deductible for tax purposes.

Current assets included assets held-for-sale related to CA’s Veracode business, which was not aligned with our strategic objectives.

On December 31, 2018, we sold this business to Thoma Bravo, LLC for cash consideration of $ 950 million, before working capital adjustments.

We do not have any material continuing involvement with this business and have presented its results in discontinued operations.

Current assets also included $ 80 million of real properties held-for-sale.

During fiscal year 2019, we sold a portion of these real properties for $ 62 million and recognized a loss of $ 8 million.

Our results of continuing operations for fiscal year 2019 included $ 3,377 million of net revenue attributable to CA.

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

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

Transaction costs related to the CA Merger of $ 73 million were included in selling, general and administrative expense for fiscal year 2019.

Intangible Assets

Fair Value Weighted-Average Amortization Periods

(In millions) (In years)

Developed technology $ 4,957 6

Customer contracts and related relationships 4,190 6

Order backlog 2,569 3

Trade name and other 137 5

Total identified finite-lived intangible assets 11,853

IPR&D 192 N/A

Total identified intangible assets $ 12,045

Developed technology relates to products used for mission critical business tools for processes and applications, as well as products used for cloud-based planning, development, management and security tools.

We 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.

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 CA.

Customer contracts and related relationships were valued using the with-and-without-method under the income approach.

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.

The economic useful life was determined by evaluating many factors, including the useful life of other intangible assets, the length of time remaining on the acquired contracts and the historical customer turnover rates.

Order backlog represents business under existing contractual obligations.

The fair value of backlog was determined using the multi-period excess earnings method under the income approach based on expected operating cash flows from future contractual revenue.

The economic useful life was determined based on the expected life of the backlog and the cash flows over the forecast period.

Trade name relates to the “CA” 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 CA Acquisition Date.

The following table summarizes the details of IPR&D by category as of the CA Acquisition Date:

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

(By Fiscal Year)

(Dollars in millions)

Mainframe $ 178 67 % $ 138 2019

Enterprise Solutions $ 14 63 % $ 12 2019

Discount rates of 12 % and 14 % were applied to the projected cash flows to reflect the risk related to these mainframe and enterprise solutions IPR&D projects, respectively.

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 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.

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.

(In millions)

Pro forma net revenue $ 21,697

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

During fiscal year 2022, we completed four acquisitions qualifying as business combinations for total consideration of $ 245 million.

For these acquisitions, $ 164 million was allocated to goodwill and $ 110 million was allocated to intangible assets, with additional amounts allocated to tangible assets and liabilities, primarily within our infrastructure software segment.

During fiscal year 2020, we completed three other acquisitions qualifying as business combinations for total consideration of $ 201 million.

For these acquisitions, $ 109 million was allocated to goodwill and $ 46 million was allocated to intangible assets, with additional amounts allocated to tangible assets and liabilities, primarily within our infrastructure software segment.

Supplemental Financial Information

Cash Equivalents

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.

Cash equivalents included $ 3,915 million and $ 4,668 million of time deposits and $ 2,365 million and $ 1,607 million of money-market funds as of October 30, 2022 and October 31, 2021, respectively.

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

2 unchanged sentences

We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions pursuant to factoring arrangements.

We account for these transactions as sales of receivables and present cash proceeds as cash provided by operating activities in the consolidated statements of cash flows .

We account for these transactions as sales of receivables and present cash proceeds as cash provided

by operating activities in the consolidated statements of cash flows .

Total trade accounts receivable sold under the factoring arrangements were $ 3,700 million, $ 4,027 million and $ 3,723 million during fiscal years 2022, 2021 and 2020, respectively.

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,

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

2022 October 31,

(In millions)

4 unchanged sentences

Property, Plant and Equipment, Net

2021 November 1,

2022 October 31,

(In millions)

8 unchanged sentences

Other Current Assets

2021 November 1,

2022 October 31,

(In millions)

Prepaid expenses $ 864 $ 539

Other (miscellaneous) 516 590

Other 341 516

Total other current assets $ 1,205 $ 1,055

Other Current Liabilities

2021 November 1,

2022 October 31,

(In millions)

1 unchanged sentence

Tax liabilities 680 541

Other (miscellaneous) 679 771

Interest payable 393 282

Other 408 397

Total other current liabilities $ 4,412 $ 3,839

Other Long-Term Liabilities

2021 November 1,

2022 October 31,

(In millions)

1 unchanged sentence

Contract liabilities 410 566

Other (miscellaneous) 887 1,418

Other 774 887

Total other long-term liabilities $ 4,413 $ 4,860

Other Income, Net

Other Income (Expense), Net

2022 2021 2020

(In millions)

Gains on investments $ 99 $ 31 $ 145

Gain (loss) on investments $ ( 169 ) $ 99 $ 31

Other income 30 26 56

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Gain from lapse of indemnification — — 116

Other income, net $ 131 $ 206 $ 226

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

Other income (expense), net $ ( 54 ) $ 131 $ 206

Other income includes foreign exchange gains, dividends, 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.

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Operating lease expense was $ 98 million, $ 102 million and $ 106 million for fiscal years 2022, 2021 and 2020, respectively.

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

Finance lease expense was $ 18 million, $ 16 million and $ 14 million for fiscal years 2022, 2021 and 2020 respectively.

Other information related to leases was as follows:

2022 2021 2020

(In millions)

2 unchanged sentences

ROU assets obtained in exchange for finance lease liabilities $ 1 $ 15 $ 74

2021 November 1,

2022 October 31,

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

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Classification on the Consolidated Balance Sheets October 30,

2021 November 1,

2022 October 31,

(In millions)

14 unchanged sentences

Goodwill and Intangible Assets

Semiconductor Solutions Infrastructure Software IP Licensing Total

Semiconductor Solutions Infrastructure Software Total

(In millions)

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

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

Acquisition — 10 10

1 unchanged sentence

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.

Acquisitions 8 156 164

Balance as of October 30, 2022 $ 25,967 $ 17,647 $ 43,614

During the fourth quarter of fiscal years 2022, 2021 and 2020, we completed our annual impairment assessments and concluded that goodwill was not impaired in any of these years.

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Total $ 27,903 $ ( 20,792 ) $ 7,111

As of November 1, 2020:

As of October 31, 2021:

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

13 unchanged sentences

Amortizable intangible assets:

2021 November 1,

2022 October 31,

Purchased technology 3 4

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Income from continuing operations attributable to common stock 11,223 6,437 2,664

6,437 2,664 2,707

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

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Weighted-average shares outstanding - diluted 423 429 421

Basic income per share attributable to common stock:

Income per share from continuing operations $ 15.70 $ 6.62 $ 6.80

Loss per share from discontinued operations

Net income per share $ 15.70 $ 6.62 $ 6.77

Diluted income per share attributable to common stock:

Income per share from continuing operations $ 15.00 $ 6.33 $ 6.46

Loss per share from discontinued operations

Net income per share $ 15.00 $ 6.33 $ 6.43

Net income per share attributable to common stock:

Basic $ 27.44 $ 15.70 $ 6.62

Diluted $ 26.53 $ 15.00 $ 6.33

For fiscal years 2022, 2021 and 2020, diluted net income per share excluded the potentially dilutive effect of 10 million, 12 million and 12 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

Pension and Post-Retirement Benefit Plans

Retirement Plans

Defined Benefit Pension Plans

8 unchanged sentences

Eligibility is generally determined based on the terms of our plans and local statutory requirements.

Post-Retirement Benefit Plans.

Certain of our U.S.

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

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.

Net Periodic Benefit (Income) Cost

Pension Benefits Post-Retirement Benefits

Fiscal Year Fiscal Year

Net Periodic Benefit Cost

2022 2021 2020

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Expected return on plan assets ( 39 ) ( 40 ) ( 46 )

1 ( 3 ) 1 1 1 ( 1 )

Net periodic benefit (income) cost

$ 11 $ 8 $ 10 $ 1 $ 1 $ ( 1 )

Net periodic benefit cost $ 9 $ 11 $ 8

Net actuarial (gain) loss $ ( 17 ) $ 8 $ ( 28 )

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

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

Service cost is recognized in operating expenses.

Funded Status

Pension Benefits Post-Retirement Benefits

2021 November 1,

Benefit Obligations and Plan Assets

2022 October 31,

2021 November 1,

(In millions)

3 unchanged sentences

Employer contributions 10 9

Plan participants’ contributions 1 —

Payments from plan assets ( 95 ) ( 102 )

5 unchanged sentences

Interest cost 39 39

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

Actuarial gain (a)

( 336 ) ( 11 )

Plan participants' contributions 1 —

Benefit payments ( 95 ) ( 102 )

Curtailments — ( 1 )

Benefit obligations assumed in an acquisition — 10 — —

Foreign currency impact — 2

Benefit obligations — end of period 1,143 1,526

Overfunded (underfunded) status of benefit obligations (a)

$ ( 5 ) $ 5 $ ( 9 ) $ ( 7 )

Overfunded (underfunded) status of benefit obligations (b)

Actuarial losses and prior service costs recognized in accumulated other comprehensive loss, net of taxes

1 unchanged sentence

_______________________________

(a) Substantially all amounts recognized in the consolidated balance sheets were recorded in other long-term assets and other long-term liabilities for all periods presented.

(a) The actuarial gain in fiscal year 2022 was primarily due to an increase in discount rates experienced by the majority of our plans.

(b) Substantially all amounts recognized on the consolidated balance sheets were recorded in other long-term assets and other long-term liabilities for all periods presented.

Plans with benefit obligations in excess of plan assets:

Pension Benefits Post-Retirement Benefits

2021 November 1,

2022 October 31,

2021 November 1,

(In millions)

3 unchanged sentences

Plans with benefit obligations less than plan assets:

Pension Benefits Post-Retirement Benefits

2021 November 1,

2022 October 31,

2021 November 1,

(In millions)

2 unchanged sentences

Fair value of plan assets $ 1,148 $ 1,508

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.

The fair value of pension plan assets as of October 30, 2022 and October 31, 2021 included $ 184 million and $ 174 million, respectively, of assets for our non-U.S.

pension plans.

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.

The projected benefit obligations as of October 30, 2022 and October 31, 2021 included $ 185 million and $ 217 million, respectively, of obligations related to our non-U.S.

pension plans.

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.

The accumulated benefit obligations as of October 30, 2022 and October 31, 2021 included $ 168 million and $ 199 million, respectively, of obligations related to our non-U.S.

pension plans.

1 unchanged sentence

Fiscal Years:

Pension Benefits Post-Retirement Benefits

Expected Benefit Payments

(In millions)

2028-2032 $ 444

2023 $ 94 $ 4

2024 $ 94 $ 4

2025 $ 94 $ 4

2026 $ 93 $ 4

2027-2031 $ 447 $ 23

Defined Benefit Pension Plan Investment Policy

Plan assets of the funded defined benefit pension plans are generally invested in funds held by third-party fund managers.

Investment Policy

Plan assets of the U.S.

qualified pension plan, which represent substantially all of the plan assets, are generally invested in funds held by third-party fund managers.

Our benefit plan investment committee has set the investment strategy to fully match the liability.

2 unchanged sentences

The plan assets are invested using the liability-driven investment strategy intended to minimize market and interest rate risks, and those assets are periodically rebalanced toward asset allocation targets.

Substantially all of the plan assets are for the U.S.

qualified pension plan.

The target asset allocation for this plan reflects a risk/return profile that we believe is appropriate relative to the liability structure and return goals for the plan.

The target asset allocation for the U.S.

qualified pension plan reflects a risk/return profile that we believe is appropriate relative to the liability structure and return goals for the plan.

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.

2 unchanged sentences

The fixed income allocation is primarily directed toward long-term core bond investments, with smaller allocations to Treasury Inflation-Protected Securities and high-yield bonds.

Fair Value Measurement of Defined Benefit Pension Plan Assets

Fair Value Measurement of Plan Assets

October 30, 2022

12 unchanged sentences

Total plan assets $ 65 $ 1,095 $ 1,160

November 1, 2020

October 31, 2021

Fair Value Measurements at Reporting Date Using

15 unchanged sentences

(c) These amounts consisted of investments that were traded less frequently than Level 1 securities and were valued using inputs that included quoted prices for similar assets in active markets and inputs other than quoted prices that were observable for the assets, such as interest rates, yield curves, prepayment speeds, collateral performance, broker/dealer quotes and indices that were observable at commonly quoted intervals.

Post-Retirement Benefit Plan Investment Policy

Our overall investment strategy for the group life insurance plan is to allocate assets in a manner that seeks to both maximize the safety of promised benefits and minimize the cost of funding those benefits.

The target asset allocation for plan assets reflects a risk/return profile that we believe is appropriate relative to the liability structure and return goals for the plan.

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.

We set the overall portfolio allocation and use an investment manager that directs the investment of funds consistent with that allocation.

The investment manager invests the plan assets in index funds that it manages.

For both fiscal years 2021 and 2020, 100 % of plan assets were allocated to

commingled funds that invested in fixed income, in line with the target allocation.

The fair value of the commingled funds are measured using net asset value per share as a practical expedient.

The assumptions used to determine the benefit obligations and net periodic benefit (income) cost from our defined benefit pension plans and post-retirement benefit plans are presented in the tables below.

The expected long-term return on assets shown in the tables below represents an estimate of long-term returns on investment portfolios primarily consisting of combinations of debt, equity and other investments, depending on the plan.

The long-term rates of return are then weighted based on the asset classes (both historical and forecasted) in which we expect the pension and post-retirement funds to be invested.

Discount rates reflect the current rate at which defined benefit pension and post-retirement benefit obligations could be settled based on the measurement dates of the plans, which is October 31, the month end closest to our fiscal year end.

The range of assumptions that are used for defined benefit pension plans reflects the different economic environments within various countries.

The assumptions used to determine the benefit obligations and net periodic benefit cost for our defined benefit pension plans are presented in the table below.

The expected long-term return on assets shown in the table below represents an estimate of long-term returns on investment portfolios primarily consisting of combinations of debt, equity and other investments, depending on the plan.

The long-term rates of return are then weighted based on the asset classes in which the pension funds are invested.

Discount rates reflect the current rate at which defined benefit pension obligations could be settled based on the measurement dates of the plans, which is October 31, the month end closest to our fiscal year end.

The range of assumptions reflects the different economic environments within various countries.

Assumptions for Benefit Obligations

as of Assumptions for Net Periodic Benefit (Income) Cost

2021 November 1,

as of Assumptions for Net Periodic Benefit Cost

2022 October 31,

2021 2022 2021 2020

Defined benefit pension plans:

Discount rate 1.25 %- 7.25 %

13 unchanged sentences

1.50 %- 7.80 %

Assumptions for Benefit Obligations

as of Assumptions for Net Periodic Benefit (Income) Cost

2021 November 1,

2020 2021 2020 2019

Post-retirement benefit plans:

Discount rate 2.30 %- 2.90 %

2.10 %- 2.90 %

2.80 %- 3.20 %

4.12 %- 4.60 %

Average increase in compensation levels

3.00 % 3.00 % 3.00 % 3.00 % 3.00 %

Expected long-term return on assets

N/A N/A 2.90 % 3.20 % 4.80 %

Assumed Health Care Cost Trend Rate Used to Measure the Expected Cost of Benefits as of

2021 November 1,

Health care cost trend rate assumed for next year 6.75 %

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

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

Defined Contribution Plans

1 unchanged sentence

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

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

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

All matching contributions vest immediately.

3 unchanged sentences

Effective Interest Rate October 30,

2021 November 1,

2022 October 31,

(In millions, except percentages)

April 2022 Senior Notes - fixed rate

4.000 % notes due April 2029

4.17 % $ 750 $ —

4.150 % notes due April 2032

4.30 % 1,200 —

4.926 % notes due May 2037

5.33 % 2,500 —

September 2021 Senior Notes - fixed rate

10 unchanged sentences

1.950 % notes due February 2028

2.10 % 750 750

2.450 % notes due February 2031

6 unchanged sentences

3.84 % 1,750 1,750

10,000 10,000

June 2020 Senior Notes - fixed rate

17 unchanged sentences

5.18 % 606 1,086

November 2019 Term Loans - floating rate

LIBOR plus 1.125 % term loan due November 2022

1.54 % — 1,819

LIBOR plus 1.250 % term loan due November 2024

1.56 % — 4,069

April 2019 Senior Notes - fixed rate

3.125 % notes due April 2021

3.625 % notes due October 2024

3.98 % 622 622

4.250 % notes due April 2026

4.54 % 944 2,500

4.750 % notes due April 2029

4 unchanged sentences

2.78 % 260 260

Effective Interest Rate October 31,

2021 November 1,

(In millions, except percentages)

3.625 % notes due January 2024

3.74 % 829 829

3.625 % notes due January 2024

3.74 % 829 1,352

Effective Interest Rate October 30,

2022 October 31,

(In millions, except percentages)

3.125 % notes due January 2025

6 unchanged sentences

4.500 % notes due August 2023

4.10 % 143 143

1 unchanged sentence

5.15 % 215 265

Other borrowings

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

2.59 % - 4.55 %

Other senior notes - fixed rate

2.500 % notes due August 2022

3.500 % notes due August 2024

4.500 % notes due August 2034

Total principal amount outstanding $ 41,218 $ 41,499

Current portion of principal amount outstanding $ 403 $ 264

Short-term finance lease liabilities 37 26

Total current portion of long-term debt $ 440 $ 290

Non-current portion of principal amount outstanding $ 40,815 $ 41,235

Long-term finance lease liabilities 22 39

Unamortized discount and issuance costs ( 1,762 ) ( 1,834 )

Total debt $ 39,665 $ 40,994

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.

Total long-term debt $ 39,075 $ 39,440

The senior notes are recorded net of discount and issuance costs, which are amortized to interest expense over the respective terms of such senior notes.

April 2022 Senior Notes

In April 2022, we issued $ 750 million of 4.000 % senior unsecured notes due April 2029 and $ 1,200 million of 4.150 % senior unsecured notes due April 2032.

Using the net proceeds, we redeemed the outstanding balance of $ 1,020 million of our 4.700 % notes due 2025 and $ 944 million of our 4.250 % notes due 2026.

As a result of these redemptions, we incurred premiums of $ 85 million and wrote off $ 15 million of unamortized discount and issuance costs, both of which were included in interest expense.

In April 2022, we issued $ 2,500 million of 4.926 % senior unsecured notes due May 2037 in exchange for $ 2,502 million of certain of our outstanding notes maturing between 2027 and 2030.

As a result of this exchange, we paid premiums of $ 47 million, which were included in unamortized discount and issuance costs.

The 4.926 % notes due 2037, the 4.000 % notes due 2029 and the 4.150 % notes due 2032 are collectively referred as the “April 2022 Senior Notes.”

We may redeem or purchase, in whole or in part, any of the April 2022 Senior Notes prior to their respective maturities, subject to a specified make-whole premium determined in accordance with the indentures governing the April 2022 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.

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

As a result of this exchange, we paid premiums of $ 762 million, which were included in unamortized discount and issuance costs.

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.

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.

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 % senior unsecured notes due April 2033 and $ 3,250 million of 3.469 % senior unsecured notes due April 2034 (collectively, the “March 2021 Senior Notes”).

As a result of this exchange, 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.

4 unchanged sentences

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.

5 unchanged sentences

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.

We had no borrowings outstanding under the Revolving Facility at either October 30, 2022 or October 31, 2021.

June 2020 Senior Notes

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”).

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 senior notes due 2026 and $ 2,222 million of 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.

1 unchanged sentence

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.

The June 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.

May 2020 Senior Notes

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.

unpaid interest.

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, 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.

During fiscal year 2020, we wrote off $ 60 million of unamortized discount and issuance costs as a result of repayments of term loans outstanding under the November 2019 Credit Agreement, which were included in interest expense.

April 2020 Senior Notes

2 unchanged sentences

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 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.

Pursuant to a cash tender offer that we completed in April 2020, we repurchased certain of outstanding notes maturing between 2021 and 2022 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 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

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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.

Registered Exchange Offer

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

Outstanding Commercial Paper reduces the amount that would otherwise be available to borrow for 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.

Outstanding Commercial Paper reduces the amount that would otherwise be available to borrow for general corporate purposes under our revolving credit facility.

We had no Commercial Paper outstanding at either October 30, 2022 or October 31, 2021.

2017 Senior Notes

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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.

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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”).

In connection with our acquisition of CA, Inc.

(“CA”) during fiscal year 2019, we assumed $ 2.25 billion of 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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Total $ 41,218

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.

As of October 30, 2022 and October 31, 2021, we were in compliance with all debt covenants.

Stockholders’ Equity

Mandatory Convertible Preferred Stock Offering

On September 30, 2019, we completed an offering of approximately 4 million shares of 8.00 % Mandatory Convertible Preferred Stock, Series A, $ 0.001 par value per share (“Mandatory Convertible Preferred Stock”), which generated net proceeds of approximately $ 3,679 million.

The holders of Mandatory Convertible Preferred Stock are entitled to receive, when, as and if declared by our Board of Directors, or an authorized committee thereof, out of funds legally available for payment, cumulative dividends at the annual rate of 8.00 % of the liquidation preference of $ 1,000 per share (equivalent to $ 80 annually per share), payable in cash or, subject to certain limitations, by delivery of shares of our common stock or any combination of cash and shares of our common stock, at our election;

Mandatory Convertible Preferred Stock

At any time prior to September 30, 2022, holders could elect to convert each share of Mandatory Convertible Preferred Stock at the then minimum conversion rate.

The conversion rates were subject to anti-dilution adjustments.

The holders of Mandatory Convertible Preferred Stock were entitled to receive, when, as and if declared by our Board of Directors, or an authorized committee thereof, out of funds legally available for payment, cumulative dividends at the annual rate of 8.00 % of the liquidation preference of $ 1,000 per share (equivalent to $ 80 annually per share), payable in cash or, subject to certain limitations, by delivery of shares of our common stock or any combination of cash and shares of our common stock, at our election;

provided, however, that any undeclared and unpaid dividends will continue to accumulate.

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In the event of our voluntary or involuntary liquidation, dissolution or winding-up, no distribution of our assets may be made to holders of our common stock until we have paid to holders of our Mandatory Convertible Preferred Stock a liquidation preference equal to $ 1,000 per share plus accumulated and unpaid dividends.

On September 30, 2022, unless earlier converted, each outstanding share of Mandatory Convertible Preferred Stock will automatically convert into shares of our common stock at a rate between the then minimum and maximum conversion rates.

At any time prior to September 30, 2022, holders may elect to convert each share of Mandatory Convertible Preferred Stock into shares of our common stock at the then minimum conversion rate.

The conversion rates are subject to anti-dilution adjustments.

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.

During fiscal year 2022, outstanding shares of our Mandatory Convertible Preferred Stock converted into an aggregate of approximately 12 million shares of our common stock at conversion rates ranging between 3.0894 and 3.1149 common shares per share of Mandatory Convertible Preferred Stock.

We paid cash in lieu of fractional shares of common stock upon conversion.

As of October 31, 2021, we recognized $ 27 million of accrued preferred stock dividends, which was presented as temporary equity on our consolidated balance sheet.

Cash Dividends Declared and Paid

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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 shares of our common stock for $ 5,435 million during fiscal year 2019.

This authorization ended on November 3, 2019.

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.

During fiscal year 2022, we repurchased and retired approximately 12 million shares of our common stock for $ 7 billion under this stock repurchase program.

In May 2022, our Board of Directors authorized another stock repurchase program to repurchase up to an additional $ 10 billion of our common stock from time to time through December 31, 2023.

Repurchases under our stock repurchase programs 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.

We are not obligated to repurchase any specific amount of shares of common stock, and the stock repurchase programs may be suspended or terminated at any time.

Equity Incentive Award Plan

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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.

Awards cancelled or forfeited and shares withheld to satisfy tax withholding obligations become available for future issuance.

As of October 30, 2022, 21 million shares remained available for issuance under the Amended 2012 Plan.

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During fiscal years 2022, 2021 and 2020, 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

During fiscal year 2019, the Compensation Committee of our Board of Directors approved an amendment to the vesting of time-based RSUs (other than those assumed in an acquisition), held by approximately 16,500 employees below the vice president level, from an annual vesting cycle to a quarterly vesting cycle.

Employee Stock Purchase Plan

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Selling, general and administrative 338 362 398

Total stock-based compensation expense (a)

$ 1,704 $ 1,976 $ 2,185

Total stock-based compensation expense $ 1,533 $ 1,704 $ 1,976

Estimated income tax benefits for stock-based compensation $ 255 $ 283 $ 345

Excess income tax benefits for stock-based awards exercised or released $ 375 $ 310 $ 147

________________________________ _

(a) Fiscal year 2019 stock-based compensation expense does not include $ 75 million restructuring charges for accelerated vesting of assumed equity awards held by employees terminated in connection with the CA Merger.

We have assumed an annualized forfeiture rate for RSUs of 5 %.

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Stock-based compensation expense related to the Multi-Year Equity Awards was $ 794 million, $ 816 million and $ 902 million for fiscal years 2022, 2021 and 2020, 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 October 30, 2022, the total unrecognized compensation cost related to unvested stock-based awards was $ 2,704 million, which is expected to be recognized over the remaining weighted-average service period of 2.7 years.

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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

Balance as of October 31, 2021 23 $ 200.38

Granted 3 $ 527.69

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The aggregate intrinsic value of stock options exercised in fiscal years 2022, 2021 and 2020 was $ 3 million, $ 339 million, and $ 917 million, respectively.

Components of Income from Continuing Operations Before Income Taxes

The following table presents the components of income from continuing operations before income taxes for financial reporting purposes:

The components of income from continuing operations before income taxes by U.S.

and foreign jurisdictions were as follows:

2022 2021 2020

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Income from continuing operations before income taxes $ 12,434 $ 6,765 $ 2,443

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 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”).

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.

Each tax incentive is separate and distinct from the others and may be granted, withheld, extended, modified, truncated, complied with, or terminated independently without any effect on the other incentives.

Subject to our compliance with the conditions specified in these incentives and legislative developments, the Singapore tax incentive is scheduled to expire in November 2025.

We have also obtained a tax holiday on our qualifying income in Malaysia, which is scheduled to expire in fiscal year 2028.

The tax holiday that we negotiated in Malaysia is also subject to our compliance with various operating and other conditions.

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 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:

The components of the provision for and benefit from income taxes were as follows:

2022 2021 2020

(In millions)

Current tax expense (benefit from):

Current tax expense:

Federal $ 174 $ 446 $ 7

1 unchanged sentence

Foreign 762 534 506

1,026 564 277

Total 984 1,026 564

Deferred tax expense (benefit from):

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Foreign ( 98 ) ( 7 ) ( 294 )

( 997 ) ( 1,082 ) ( 787 )

Total ( 45 ) ( 997 ) ( 1,082 )

Total provision for (benefit from) income taxes $ 939 $ 29 $ ( 518 )

Rate Reconciliation

The following is a reconciliation of our effective tax rate to the statutory federal tax rate:

2022 2021 2020

8 unchanged sentences

Other, net 0.3 1.0 ( 0.4 )

2017 Tax Reform Act — — 5.1

Effective tax rate on income before income taxes 7.5 % 0.4 % ( 21.2 ) %

Summary of Deferred Income Taxes

2021 November 1,

The increase in provision for income taxes in fiscal year 2022 compared to fiscal year 2021 was primarily due to higher income from continuing operations.

The provision for income taxes in fiscal year 2021 compared to the benefit from income taxes in fiscal year 2020 was primarily due to higher income from continuing operations, offset in part by higher excess tax benefits from stock-based awards.

The benefit from income taxes in fiscal year 2020 was primarily due to jurisdictional mix of income and expenses, discrete benefits from the remeasurement of certain deferred tax assets and liabilities in a foreign jurisdiction, and excess tax benefits from stock-based awards.

Our tax incentives from the Singapore Economic Development Board provide that any qualifying income earned in Singapore is subject to tax incentives or reduced rates of Singapore income tax, subject to our compliance with the conditions specified in these incentives and legislative developments.

These Singapore tax incentives are expected to expire in November 2025.

We have also obtained a tax holiday on our qualifying income in Malaysia, which is scheduled to expire in fiscal year 2028.

The tax holiday that we negotiated in Malaysia is also subject to our compliance with various operating and other conditions.

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 U.S.

Tax Cuts and Jobs 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 $ 1,821 million and $ 1,156 million for fiscal years 2022 and 2021, respectively, and increase the benefit from income taxes by approximately $ 833 million for fiscal year 2020.

Significant components of our deferred tax assets and liabilities consisted of the following:

2022 October 31,

(In millions)

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Foreign earnings not indefinitely reinvested 86 73

Other deferred income tax liabilities 36 —

Deferred income tax liabilities 785 1,294

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 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.

Net deferred income tax assets $ 573 $ 668

We continue to indefinitely reinvest $ 2,112 million of certain accumulated foreign earnings.

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

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.

As of October 30, 2022, we had tax effected U.S.

state net operating loss carryforwards of $ 200 million and foreign net operating loss carryforwards of $ 190 million, all of which expire in various years beginning fiscal year 2023.

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.

We had $ 1,334 million of state research and development tax credits which begin to expire in fiscal year 2023.

We have provided a valuation allowance on substantially all state tax credits and state and foreign net operating loss carryforwards as we do not expect them to be realized.

Uncertain Tax Positions

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.

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 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 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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Ending balance $ 5,117 $ 5,030 $ 4,748

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 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 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 2022 and 2021, we recognized interest and penalties of $ 25 million and $ 46 million, respectively, within the provision for income taxes.

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

As of October 30, 2022 and October 31, 2021, the combined amount of cumulative accrued interest and penalties was approximately $ 411 million and $ 386 million, respectively.

As of October 30, 2022 and October 31, 2021, approximately $ 5,528 million and $ 5,416 million, respectively, of the unrecognized tax benefits and accrued interest and penalties would, if recognized, benefit our effective income tax rate.

We are subject to U.S.

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Reportable Segments

During the first quarter of fiscal year 2020, we updated our organizational structure resulting in two reportable segments:

We have two reportable segments:

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 has separate financial information 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.

Semiconductor solutions .

We provide semiconductor solutions for managing the movement of data in data center, telecom, enterprise and embedded networking applications.

We provide a broad variety of radio frequency semiconductor devices, wireless connectivity solutions and custom touch controllers for mobile applications.

We provide semiconductor solutions for managing the movement of data in data center, service provider, enterprise and embedded networking applications.

We provide a broad variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications.

We also provide semiconductor solutions for enabling the set-top box and broadband access markets and for enabling secure movement of digital data to and from host machines, such as servers, personal computers and storage systems, to the underlying storage devices, such as hard disk drives and solid state drives.

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We provide a portfolio of software solutions that enables customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.

Our portfolio of 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.

Our portfolio of infrastructure and security software is designed to modernize, optimize, and secure the most complex hybrid environments, enabling scalability, agility, automation, insights, resiliency and security.

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

Our CODM assesses the performance of each segment and allocates resources to 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 IT expenses.

Shared expenses are primarily allocated based on revenue and headcount.

During the fourth quarter of our fiscal year 2020, we refined our allocation methodology for certain selling, general and administrative expenses to more closely align these costs with the segment benefiting from the shared expenses.

Prior period segment results have been recast to conform to the current presentation.

Operating results by segment include items that are directly attributable to each segment and also include shared expenses such as marketing, general and administrative activities, facilities and information technology (“IT”) expenses.

Shared expenses are primarily allocated based on revenue, headcount or evenly between the segments.

Unallocated Expenses

Unallocated expenses include amortization of acquisition-related intangible assets, stock-based compensation expense, restructuring, impairment and disposal charges, acquisition-related costs, charges related to inventory step-up to fair value, and other costs, which are not used in evaluating the results of, or in allocating resources to, our segments.

Unallocated expenses include amortization of acquisition-related intangible assets, stock-based compensation expense, restructuring, impairment and disposal charges, acquisition-related costs, and other costs, which are not used in evaluating the results of, or in allocating resources to, our segments.

Acquisition-related costs include transaction costs and any costs directly related to the acquisition and integration of acquired businesses.

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Net revenue from the United States for fiscal years 2022, 2021 and 2020 was $ 5,915 million, $ 5,285 million and $ 4,778 million, respectively.

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 China (including Hong Kong) for fiscal years 2022, 2021 and 2020 was $ 11,637 million, $ 9,752 million and $ 7,808 million, respectively.

Net revenue from Singapore for fiscal years 2022 and 2021 was $ 4,003 million and $ 2,754 million, respectively (the amount was less than 10% for fiscal year 2020).

3 unchanged sentences

Long-lived assets include property, plant and equipment and are based on the physical location of the assets.

2021 November 1,

2022 October 31,

(In millions)

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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 more than 10% of our net accounts receivable balance as of October 31, 2021 or November 1, 2020.

Two customers accounted for 15 % and 11 % of our net accounts receivable balance as of October 30, 2022.

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

During fiscal years 2022, 2021 and 2020, one customer accounted for 20 %, 18 % and 13 % of our net revenue, respectively.

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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 as regulatory investigations or

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.

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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 (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.

Broadcom and Apple appealed to the United States Court of

Appeals for the Federal Circuit (the “Federal Circuit Court”).

In February 2022, the Federal Circuit Court affirmed infringement of two patents, both of which expired in August 2020, but it did not address all issues and ordered a new trial on damages and on the infringement of the 7,916,781 patent, which also expired in August 2020.

In May 2022, the Federal Circuit Court denied the petition for rehearing filed by Broadcom and Apple, and remanded the case to the U.S.

Central District Court.

Subsequently, Caltech withdrew its infringement allegations as to the 7,916,781 patent.

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

Central District Court’s findings of infringement or the award of damages, including ongoing royalties, and do not believe a material loss is probable at this time.

We believe that there are strong grounds for appeal, and we intend to vigorously challenge the U.S.

Central District Court’s judgment and rulings.

Central District Court’s findings of infringement.

We cannot reasonably estimate the ultimate outcome as the Federal Circuit Court vacated the above damages, and a number of factors (including a retrial at the lower court and further appeals) could significantly change the assessment of damages.

As a result, we have not recorded a reserve with respect to this litigation, in accordance with the applicable accounting standards.

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.

Other Matters

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Restructuring Charges

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

• 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.

From time to time, we initiate cost reduction activities to integrate acquired businesses, to align our workforce with strategic business activities, or to improve efficiencies in our operations.

We recognized charges of $ 55 million , $ 149 million and $ 233 million during fiscal years 2022, 2021 and 2020, respectively.

These charges were primarily recognized in operating expenses.

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

2 unchanged sentences

Balance as of November 3, 2019 $ 69 $ 39 $ 108

Liabilities assumed from CA 29 38 67

Restructuring charges 586 160 746

Utilization ( 562 ) ( 165 ) ( 727 )

Balance as of November 3, 2019 69 39 108

Restructuring charges (b)

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Utilization ( 130 ) ( 13 ) ( 143 )

Balance as of October 31, 2021 (d)

Balance as of October 31, 2021 4 — 4

Restructuring charges 24 6 30

Utilization ( 24 ) ( 4 ) ( 28 )

Balance as of October 30, 2022 $ 4 $ 2 $ 6

______________________________

(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.

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

(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.

Restructuring, impairment and disposal charges in our consolidated statement of operations for the fiscal years 2022 and 2021 included $ 25 million and $ 36 million, respectively, for the write-down of certain lease-related ROU assets and other lease-related charges.

As of each October 30, 2022 and October 31, 2021, short-term and long-term lease liabilities included $ 52 million of liabilities related to restructuring activities.

Impairment and Disposal Charges

During fiscal years 2021 and 2020, impairment and disposal charges of $ 16 million and $ 19 million, respectively, primarily related to leasehold improvements.

During fiscal year 2019, impairment and disposal charges of $ 67 million primarily related to property, plant and equipment.

During fiscal years 2022, 2021 and 2020, impairment and disposal charges of $ 7 million, $ 16 million and $ 19 million, respectively, primarily related to leasehold improvements.

Subsequent Events

Preferred Stock Cash Dividends Declared

On December 7, 2021 , our Board of Directors declared a quarterly cash dividend of $ 20.00 per share on our Mandatory Convertible Preferred Stock, payable on December 31, 2021 to stockholders of record on December 15, 2021 .

Common Stock Cash Dividends Declared

Cash Dividends Declared

On December 6, 2022 , our Board of Directors declared a quarterly cash dividend of $ 4.60 per share on our common stock, payable on December 30, 2022 to stockholders of record on December 20, 2022 .

8 unchanged sentences

$ 128 $ 484 $ ( 487 ) $ 125

Fiscal year ended November 1, 2020

Fiscal year ended October 31, 2021

$ 149 $ 756 $ ( 777 ) $ 128

4 unchanged sentences

$ 2 $ 10 $ ( 11 ) $ 1

Fiscal year ended November 1, 2020

Fiscal year ended October 31, 2021

$ 28 $ 14 $ ( 40 ) $ 2

4 unchanged sentences

$ 1,782 $ 118 $ ( 123 ) $ 1,777

Fiscal year ended November 1, 2020

Fiscal year ended October 31, 2021

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

7 unchanged sentences

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