What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-12-14 compared with 2022-12-16 · 195 added, 280 removed, 1211 unchanged (28% of the section changed)

18 unchanged sentences

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 29, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 6 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in fiscal 2020.

Basis for Opinions

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A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

11 unchanged sentences

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

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

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

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

31 unchanged sentences

Commitments and contingencies (Note 13)

Preferred stock dividend obligation — 27

Stockholders’ equity:

1 unchanged sentence

100 shares authorized;

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

none issued and outstanding

Common stock, $ 0.001 par value;

4 unchanged sentences

Retained earnings 2,682 1,604

Accumulated other comprehensive loss ( 54 ) ( 116 )

Accumulated other comprehensive income (loss)

Total stockholders’ equity 23,988 22,709

5 unchanged sentences

2023 October 30,

2021 November 1,

2022 October 31,

(In millions, except per share data)

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Amortization of acquisition-related intangible assets 1,394 1,512 1,976

Restructuring, impairment and disposal charges 57 148 198

Restructuring and other charges

Total operating expenses 8,483 7,870 8,325

2 unchanged sentences

Other income (expense), net 512 ( 54 ) 131

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

Provision for (benefit from) income taxes 939 29 ( 518 )

Income from continuing operations 11,495 6,736 2,961

Loss from discontinued operations, net of income taxes

Income before income taxes

15,097 12,434 6,765

Provision for income taxes

Net income 14,082 11,495 6,736

12 unchanged sentences

2023 October 30,

2021 November 1,

2022 October 31,

(In millions)

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2023 October 30,

2021 November 1,

2022 October 31,

(In millions)

7 unchanged sentences

Loss on debt extinguishment — 100 198

Non-cash restructuring, impairment and disposal charges 13 38 44

Non-cash interest expense 132 129 96

19 unchanged sentences

Payments on debt obligations ( 403 ) ( 2,361 ) ( 11,495 )

Other borrowings, net — — ( 1,285 )

Payments of dividends ( 7,645 ) ( 7,032 ) ( 6,212 )

3 unchanged sentences

Other ( 12 ) ( 17 ) ( 42 )

Net cash provided by (used in) financing activities ( 15,816 ) ( 8,974 ) 1,611

Net cash used in financing activities

( 15,623 ) ( 15,816 ) ( 8,974 )

Net change in cash and cash equivalents 1,773 253 4,545

11 unchanged sentences

Comprehensive

Income (Loss)

Stockholders’

3 unchanged sentences

Net income — — — — — 6,736 — 6,736

Other comprehensive income — — — — — — 24 24

Cumulative effect of accounting change

Other comprehensive loss

— — — — — — ( 8 ) ( 8 )

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

Dividends to common stockholders — — — — ( 224 ) ( 5,689 ) — ( 5,913 )

— — — — ( 2,582 ) ( 2,653 ) — ( 5,235 )

Dividends to preferred stockholders — — — — — ( 299 ) — ( 299 )

Common stock issued — — 9 — 170 — — 170

— — 12 — 276 — — 276

Stock-based compensation — — — — 1,704 — — 1,704

1 unchanged sentence

— — ( 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 )

Dividends to common stockholders

Other comprehensive income

— — — — — — 62 62

Dividends to preferred stockholders

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

— — — — 4 — — 4

Dividends to common stockholders — — — — ( 50 ) ( 6,683 ) — ( 6,733 )

Dividends to preferred stockholders — — — — — ( 272 ) — ( 272 )

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

3 unchanged sentences

Other comprehensive income — — — — — — 261 261

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

Dividends to common stockholders — — — — — ( 7,645 ) — ( 7,645 )

— — — — ( 50 ) ( 6,683 ) — ( 6,733 )

Dividends to preferred stockholders

— — — — — ( 272 ) — ( 272 )

Common stock issued — — 8 — 122 — — 122

1 unchanged sentence

Repurchases of common stock — — ( 9 ) — ( 481 ) ( 5,359 ) — ( 5,840 )

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

Shares repurchased for tax withholdings on vesting of equity awards

10 unchanged sentences

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

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

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

We also offer mission critical fibre channel storage area networking (“FC SAN”) products and related software in the form of modules, switches and subsystems incorporating multiple semiconductor products.

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

Basis of Presentation

We operate on a 52- or 53-week fiscal year ending on the Sunday closest to October 31 in a 52-week year and the first Sunday in November in a 53-week year.

Our fiscal year ended October 30, 2022 (“fiscal year 2022”) was a 52-week fiscal year.

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”).

We have two reportable segments:

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“Segment Information” for additional information.

Basis of Presentation

We operate on a 52- or 53-week fiscal year ending on the Sunday closest to October 31 in a 52-week year and the first Sunday in November in a 53-week year.

Our fiscal year ended October 29, 2023 (“fiscal year 2023”) was a 52-week fiscal year.

The first quarter of our fiscal year 2023 ended on January 29, 2023, the second quarter ended on April 30, 2023 and the third quarter ended on July 30, 2023.

Our fiscal year ended October 30, 2022 (“fiscal year 2022”) and fiscal year ended October 31, 2021 (“fiscal year 2021”) were both 52-week fiscal years.

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, 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.

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

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

We determine the allowance based on historical experience and current economic conditions, among other factors.

Allowances for doubtful accounts were not material as of October 29, 2023 or October 30, 2022.

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

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

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

of these counterparties.

Our accounts receivable are derived from revenue earned from customers located both within and outside the U.S.

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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.

For defined benefit pension plans, we consider various factors in determining our respective benefit obligations and net periodic benefit 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 benefit plans differ from our current assumptions, the benefit obligations may be over- or under-valued.

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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.

During fiscal years 2023 and 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 were 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.

In August 2023, we early settled all treasury rate lock contracts, which had a $ 5.5 billion notional amount, for a cumulative gain of $ 371 million, which was recorded net of tax as a component of accumulated other comprehensive income as of October 29, 2023.

The cumulative gain will be amortized to interest expense associated with future debt to be issued referencing the respective hedged treasury rates.

The cash receipts were included in cash flows from operating activities in the consolidated statements of cash flows.

No derivative instruments that hedge interest rate risk were outstanding as of October 29, 2023.

Property, plant and equipment.

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The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy under the guidance for fair value measurements are described below:

The three levels of the fair value hierarchy under the guidance on fair value measurements are described below:

Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

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Business combinations.

We account for business combinations under the acquisition method of accounting, which requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values, except for revenue contracts acquired, which are recognized in accordance with our revenue recognition policy.

While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement.

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Critical estimates in valuing certain acquired intangible assets under the income approach include growth in future expected cash flows from product sales, customer contracts and acquired technologies, revenue growth rate, customer ramp-up period, technology obsolescence rates, expected costs to develop in-process research and development (“IPR&D”) into commercially viable products, estimated cash flows from the projects when completed and discount rates.

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

Unanticipated events and circumstances may occur which could affect the accuracy or validity of such assumptions, estimates or actual results.

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired.

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If an IPR&D project is abandoned, we recognize the carrying value of the related intangible asset in our consolidated statements of operations in the period it is abandoned.

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.

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

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

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Our shipping and handling costs charged to customers are included in net revenue and the associated expense is included in cost of revenue for all periods presented.

Litigation and settlement cost.

Litigation and settlement costs.

We are involved in legal actions and other matters arising in our recent business acquisitions and in the normal course of business.

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Likewise, if we determine that we are not able to realize all or part of our net deferred tax assets, we increase the provision for income taxes or decrease the benefit from income taxes in the period such determination is made.

Tax Cuts and Jobs Act enacted on December 22, 2017 (the “2017 Tax Act”) introduced significant changes to U.S.

income tax law.

The Global Intangible Low-Taxed Income (“GILTI”) provisions of the 2017 Tax Act require Broadcom to include in its U.S.

income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets.

We have elected to record the impacts of GILTI during the period incurred.

We account for uncertainty in income taxes in accordance with the applicable accounting guidance on income taxes.

9 unchanged sentences

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.

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.

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 recognize contract liabilities when we have received consideration or an amount of consideration is due from the customer and we have a future obligation to transfer products or services.

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

The majority of our contract liabilities represents amounts billed or collected and advanced payments on contracts or arrangements which include termination for convenience provisions.

The amount of revenue recognized during fiscal year 2023 that was included in the contract liabilities balance as of October 30, 2022 was $ 2,915 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.

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.

Remaining Performance Obligations

4 unchanged sentences

Additionally, as a practical expedient, we have not included contracts that have an original duration of one year or less, nor have we included contracts with sales-based or usage-based royalties promised in exchange for a license of IP.

Certain multi-year customer contracts in our semiconductor solutions segment contain firmly committed amounts and the remaining performance obligations under these contracts as of October 30, 2022 were approximately $ 23.6 billion.

Certain multi-year customer contracts, primarily in our semiconductor solutions segment, contain firmly committed amounts and the remaining performance obligations under these contracts as of October 29, 2023 were approximately $ 20.3 billion.

We expect approximately 30 % of this amount to be recognized as revenue over the next 12 months.

2 unchanged sentences

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

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

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

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 borrowings.

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

(In millions)

Current assets $ 273

Goodwill 6,638

Intangible assets 5,411

Other long-term assets 92

Total assets acquired 12,414

Current liabilities ( 1,127 )

Other long-term liabilities ( 587 )

Total liabilities assumed ( 1,714 )

Fair value of net assets acquired $ 10,700

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

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

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 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.

Our results of continuing operations for fiscal year 2020 included $ 1,610 million of net revenue attributable to the Symantec Business.

It was impracticable to determine the effect on net income attributable to the Symantec Business as we had integrated the Symantec Business into our ongoing operations during the year.

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

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

Intangible Assets

Fair Value Weighted-Average Amortization Periods

(In millions) (In years)

Developed technology $ 2,900 5

Customer contracts and related relationships 2,410 5

Trade name 90 6

Order backlog 11 3

Total identified finite-lived intangible assets $ 5,411

Developed technology relates to products used for cyber security solutions, including data loss prevention, endpoint protection, and web, email and cloud security solutions.

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 the Symantec Business.

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.

Trade name relates to the “Symantec” 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.

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.

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 Symantec Acquisition Date.

Unaudited Pro Forma Information

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.

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.

(In millions)

Pro forma net revenue $ 23,264

Pro forma net income attributable to common stock $ 2,368

Other Acquisitions

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

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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 $ 3,975 million, $ 3,700 million and $ 4,027 million during fiscal years 2023, 2022 and 2021, respectively.

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(In millions)

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

Other income 30 26 56

Interest income $ 535 $ 100 $ 16

Other income 15 30 26

Gain (loss) on investments 11 ( 169 ) 99

Other expense ( 49 ) ( 15 ) ( 10 )

Gain from lapse of indemnification — — 116

Other income (expense), net $ 512 $ ( 54 ) $ 131

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.

Other income and other expense include foreign exchange gains and losses, factoring fees for the sales of receivables, dividend income, and other miscellaneous items.

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

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Present value of lease liabilities $ 419 $ 49

As of October 29, 2023, the Company had $ 642 million of future payments under additional leases that will commence in fiscal year ending November 3, 2024 with a lease term of 15 years.

Goodwill and Intangible Assets

1 unchanged sentence

(In millions)

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

Acquisition — 10 10

Sale of business — ( 7 ) ( 7 )

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

1 unchanged sentence

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

Acquisitions 34 5 39

Balance as of October 29, 2023 $ 26,001 $ 17,652 $ 43,653

We completed three acquisitions in fiscal year 2023 and four acquisitions in fiscal year 2022, all of which qualified as business combinations.

The consideration for these acquisitions was primarily allocated to goodwill and intangible assets.

During the fourth quarter of fiscal years 2023, 2022 and 2021, we completed our annual impairment assessments and concluded that goodwill was not impaired in any of these years.

27 unchanged sentences

Total $ 3,857

The weighted-average amortization periods remaining by intangible asset category were as follows:

The weighted-average remaining amortization periods by intangible asset category were as follows:

Amortizable intangible assets:

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Customer contracts and related relationships 1 2

Order backlog 1 2

Order backlog — (a)

Trade names 8 8

(a) Represents less than one year.

Net Income Per Share

1 unchanged sentence

(In millions, except per share data)

Income from continuing operations $ 11,495 $ 6,736 $ 2,961

$ 14,082 $ 11,495 $ 6,736

Dividends on preferred stock — ( 272 ) ( 299 )

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

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

Net income attributable to common stock

$ 14,082 $ 11,223 $ 6,437

Weighted-average shares outstanding - basic 415 409 410

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Diluted $ 32.98 $ 26.53 $ 15.00

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.

For fiscal years 2022 and 2021, diluted net income per share excluded the potentially dilutive effect of 10 million and 12 million shares of common stock, respectively, issuable upon the conversion of 8.00 % Mandatory Convertible Preferred Stock, Series A, $ 0.001 par value per share (“Mandatory Convertible Preferred Stock”) as their effect was antidilutive.

All shares of our Mandatory Convertible Preferred Stock were converted into shares of our common stock before the end of fiscal year 2022.

Retirement Plans

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There are no active participants under the dollar-per-month program.

We also have a non-qualified supplemental pension plan in the United States that principally provides benefits based on compensation in excess of amounts that can be considered under the qualified pension plan.

We also have a frozen non-qualified supplemental pension plan in the United States that principally provides benefits based on compensation in excess of amounts that can be considered under the qualified pension plan.

We also have defined benefit pension plans for certain employees in Austria, France, Germany, India, Israel, Italy, Japan and Taiwan.

18 unchanged sentences

Plan participants’ contributions

Payments from plan assets ( 95 ) ( 102 )

Benefit payments

( 94 ) ( 95 )

Foreign currency impact 4 2

8 unchanged sentences

Benefit payments ( 94 ) ( 95 )

Curtailments — ( 1 )

Foreign currency impact 5 —

156 unchanged sentences

5.18 % 606 606

5.000 % notes due April 2030

5.18 % 606 1,086

April 2019 Senior Notes - fixed rate

2 unchanged sentences

4.750 % notes due April 2029

4.95 % 1,655 1,655

5 unchanged sentences

3.23 % 495 495

3.875 % notes due January 2027

4.02 % 2,922 2,922

Effective Interest Rate October 29,

3 unchanged sentences

3.60 % 777 777

3.875 % notes due January 2027

4.02 % 2,922 2,922

3.500 % notes due January 2028

3.60 % 777 777

Assumed CA Senior Notes - fixed rate

4.500 % notes due August 2023

4.10 % 143 143

4.700 % notes due March 2027

3 unchanged sentences

4.500 % notes due August 2034

Total principal amount outstanding $ 40,815 $ 41,218

7 unchanged sentences

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.

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

Subsequent to the end of fiscal year 2023, we borrowed term loans to finance the acquisition of VMware, Inc.

(“VMware”) and assumed VMware’s outstanding senior unsecured notes.

“Subsequent Events” for additional information.

April 2022 Senior Notes

5 unchanged sentences

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.

September 2021 Senior Notes

1 unchanged sentence

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.

March 2021 Senior Notes

1 unchanged sentence

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.

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

2 unchanged sentences

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

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

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

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

January 2021 Credit Agreement

In January 2021, we entered into a credit agreement (the “January 2021 Credit Agreement”), which provides for a five-year $ 7.5 billion unsecured revolving credit facility (the “Revolving Facility”), of which $ 500 million is available for the issuance of multi-currency letters of credit.

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

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

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

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

2021 Credit Agreement

In January 2021, we entered into a credit agreement (the “2021 Credit Agreement”), which provides for a five-year $ 7.5 billion unsecured revolving credit facility, of which $ 500 million is available for the issuance of multi-currency letters of credit.

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

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

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

We had no borrowings outstanding under the revolving credit facility at either October 29, 2023 or October 30, 2022.

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.

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

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.

In June 2020, we completed our private offers to exchange $ 3,742 million of certain series of our outstanding senior 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”).

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.

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.

Using the net proceeds, we repaid certain term loans under the November 2019 Credit Agreement and all outstanding borrowings under a revolving credit facility.

April 2020 Senior Notes

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

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

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.

Using the net proceeds, we repurchased certain series of our outstanding senior notes maturing between 2021 and 2022, pursuant to a cash tender offer that we completed in April 2020.

April 2019 Senior Notes

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

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

Using the net proceeds, we repaid certain term loans.

Registered Exchange Offer

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2017 Senior Notes

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

During the fiscal year ended October 29, 2017, Broadcom Cayman Finance Limited, which subsequently merged into BTI during the fiscal year ended November 3, 2019 (“fiscal year 2019”) with BTI remaining as the surviving entity, and BRCM issued $ 17,550 million of senior unsecured notes (the “2017 Senior Notes”).

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

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

Using the net proceeds, plus cash on hand, we repaid certain term loans and financed the acquisition of Brocade Communications Systems, Inc.

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

3 unchanged sentences

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

We may redeem all or a portion of the Assumed CA Senior Notes at any time, subject to a specified make-whole premium as set forth with the indenture governing the Assumed CA Senior Notes.

Fair Value of Debt

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Stockholders’ Equity

Mandatory Convertible Preferred Stock

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 and would automatically convert into shares of our common stock on September 30, 2022.

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.

Subject to limited exceptions, no dividends may be declared or paid on shares of our common stock, unless all accumulated dividends have been paid or set aside for payment on all outstanding shares of our Mandatory Convertible Preferred Stock for all past completed dividend periods.

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.

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

5 unchanged sentences

Dividends to preferred stockholders $ — $ 299 $ 299

Stock Repurchase Program

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.

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

On September 30, 2019, we completed an offering of approximately 4 million shares of Mandatory Convertible Preferred Stock, which generated net proceeds of approximately $ 3,679 million and would automatically convert into shares of our common stock on September 30, 2022.

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

Stock Repurchase Programs

In December 2021, our Board of Directors authorized a stock repurchase program to repurchase up to $ 10 billion of our common stock from time to time through December 31, 2022, which was subsequently extended to December 31, 2023.

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.

We repurchased and retired approximately 9 million and 12 million shares of our common stock for $ 5,824 million and $ 7,000 million under these stock repurchase programs during fiscal years 2023 and 2022, respectively.

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

3 unchanged sentences

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

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

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

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

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

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

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

1 unchanged sentence

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.

During the second quarter of fiscal year 2023, our stockholders approved the amendment and restatement of the Amended 2012 Plan to increase the number of shares of common stock authorized for issuance by 25 million shares.

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

2 unchanged sentences

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

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.

During fiscal years 2023, 2022 and 2021, 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.

During fiscal year 2023, we also granted market-based RSUs vesting over five years , subject to satisfaction of stock price performance milestones.

Employee Stock Purchase Plan

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Restricted Stock Unit Awards

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

A summary of time- and market-based RSU activity was as follows:

Number of RSUs

5 unchanged sentences

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 number of RSUs vested included shares of common stock that we withheld for settlement of employees’ tax obligations due upon the vesting of RSUs.

Stock Option Awards

As of October 30, 2022, our stock options outstanding were not material.

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

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

The components of income before income taxes by U.S.

and foreign jurisdictions were as follows:

3 unchanged sentences

Foreign income 15,160 14,454 9,868

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

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

Income before income taxes

$ 15,097 $ 12,434 $ 6,765

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

2023 2022 2021

(In millions)

Current tax expense:

Current tax provision:

Federal $ 952 $ 174 $ 446

2 unchanged sentences

Total 1,516 984 1,026

Deferred tax expense (benefit from):

Deferred tax provision (benefit):

Federal ( 499 ) 68 ( 876 )

2 unchanged sentences

Total ( 501 ) ( 45 ) ( 997 )

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

Total provision for income taxes

$ 1,015 $ 939 $ 29

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

5 unchanged sentences

Foreign-derived intangible income deduction — — ( 3.1 )

Deferred taxes on unremitted foreign earnings 0.1 ( 0.7 ) ( 1.1 )

Uncertain tax benefits

( 1.9 ) 1.6 3.7

Excess tax benefits from stock-based compensation ( 3.4 ) ( 3.0 ) ( 4.6 )

2 unchanged sentences

Effective tax rate on income before income taxes 6.7 % 7.5 % 0.4 %

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.

The increase in provision for income taxes in fiscal year 2023 compared to fiscal year 2022 was primarily due to higher income before income taxes, partially offset by an increase in the recognition of uncertain tax benefits as a result of lapses of statutes of limitations.

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

We derive the effective tax rate benefit attributed to foreign income taxed at different rates primarily from our operations in Singapore and Malaysia.

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.

We have also obtained a tax holiday from our qualifying income earned 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.

Tax Cuts and Jobs Act and other indirect tax impacts, the effect of these tax incentives and tax holiday decreased the provision for income taxes by approximately $ 2,104 million, $ 1,821 million and $ 1,156 million for fiscal years 2023, 2022 and 2021, respectively.

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

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Net operating loss, credit and other carryforwards $ 1,809 $ 1,808

Capitalized research and development

Deferred revenue 208 645

Employee stock awards 190 183

Depreciation and amortization

Other deferred income tax assets 329 343

4 unchanged sentences

Depreciation and amortization 97 341

Unamortized discount and issuance costs 322 374

Unamortized debt discount and issuance costs

Foreign earnings not indefinitely reinvested 86 86

2 unchanged sentences

Net deferred income tax assets $ 698 $ 573

The 2017 Tax Act amended Internal Revenue Code Section 174 to require businesses to capitalize and amortize research and development expenses and became effective in our fiscal year 2023.

In fiscal year 2023, we recorded a deferred tax asset of $275 million for capitalized research and development.

We continue to indefinitely reinvest $ 1,963 million of certain accumulated foreign earnings.

2 unchanged sentences

As of October 29, 2023, 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.

state net operating loss (“NOL”) carryforwards of $ 136 million and foreign NOL carryforwards of $ 128 million.

The state and foreign NOL carryforwards expire in various years beginning in fiscal years 2024 and 2025, respectively.

We had $ 1,462 million of state research and development tax credits which begin to expire in fiscal year 2024.

6 unchanged sentences

Lapses of statutes of limitations ( 634 ) ( 50 ) ( 58 )

Increases in balances related to tax positions taken during prior periods (including those related to acquisitions made during the year)

Increases in balances related to tax positions taken during prior periods

Decreases in balances related to tax positions taken during prior periods ( 13 ) ( 113 ) —

2 unchanged sentences

Ending balance $ 4,655 $ 5,117 $ 5,030

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

We recognize interest and penalties related to unrecognized tax benefits within the provision for 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.

During fiscal years 2023, 2022 and 2021, we recognized interest and penalties of $ 22 million, $ 25 million and $ 46 million respectively, within the provision for income taxes.

As of October 29, 2023 and October 30, 2022, the combined amount of cumulative accrued interest and penalties was approximately $ 389 million and $ 411 million, respectively.

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Semiconductor solutions .

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

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

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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.

Shared expenses are primarily allocated based on revenue and headcount.

Unallocated Expenses

Unallocated expenses include amortization of acquisition-related intangible assets, stock-based compensation expense, restructuring, impairment and disposal charges, acquisition-related costs, 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 and other 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.

Depreciation expense directly attributable to each reportable segment is included in operating results for each segment.

Depreciation expense directly attributable to each reportable segment is included in the operating results of each segment.

However, the CODM does not evaluate depreciation expense by operating segment and, therefore, it is not separately presented.

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Net revenue from China (including Hong Kong) for fiscal years 2023, 2022 and 2021 was $ 11,533 million, $ 11,637 million and $ 9,752 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).

Net revenue from Singapore for fiscal years 2023, 2022 and 2021 was $ 4,479 million, $ 4,003 million and $ 2,754 million, respectively.

Net revenue from other foreign countries for fiscal years 2023, 2022 and 2021 was $ 12,832 million, $ 11,648 million and $ 9,659 million, respectively.

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

One customer accounted for 21 % of our net accounts receivable balance as of October 29, 2023.

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 2023, 2022 and 2021, one customer accounted for 21 %, 20 % and 18 % of our net revenue, respectively.

8 unchanged sentences

Purchase Commitments.

Represents unconditional purchase obligations that include agreements to purchase goods or services, primarily inventory, that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction.

Purchase obligations exclude agreements that are cancelable without penalty.

Represent unconditional purchase obligations to purchase goods or services, primarily inventory, that are enforceable and legally binding on us and specify all significant terms, including fixed or minimum quantities to be purchased, price provisions, and the approximate timing of the transaction.

Purchase obligations exclude agreements that are cancelable without penalty and unconditional purchase obligations with a remaining term of one year or less.

Other Contractual Commitments.

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

Represent amounts payable pursuant to agreements related to IT and other service agreements.

Due to the inherent uncertainty with respect to the timing of future cash outflows associated with our unrecognized tax benefits at October 29, 2023, we are unable to reliably estimate the timing of cash settlement with the respective taxing authorities.

Therefore, $ 3,229 million of unrecognized tax benefits and accrued interest and penalties classified within other long-term liabilities on our consolidated balance sheet as of October 30, 2022 have been excluded from the table above.

Therefore, $ 2,792 million of unrecognized tax benefits and accrued interest and penalties as of October 29, 2023 have been excluded from the table above.

Contingencies

From time to time, we are involved in litigation that we believe is of the type common to companies engaged in our lines of business, including commercial disputes, employment issues, tax disputes and disputes involving claims by third parties that our activities infringe their patent, copyright, trademark or other IP rights, as well as regulatory investigations or inquiries.

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

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

IP property claims generally involve the demand by a third-party that we cease the manufacture, use or sale of the allegedly infringing products, processes or technologies and/or pay substantial damages or royalties for past, present and future use of the allegedly infringing IP.

Claims that our products or processes infringe or misappropriate any third-party IP rights (including claims arising through our contractual indemnification of our customers) often involve highly complex, technical issues, the outcome of which is inherently uncertain.

Claims that our products or processes infringe or misappropriate any

third-party IP rights (including claims arising through our contractual indemnification of our customers) often involve highly complex, technical issues, the outcome of which is inherently uncertain.

Moreover, from time to time, we pursue litigation to assert our IP rights.

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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 appealed to the United States Court of

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

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.

2 unchanged sentences

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

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

Central District Court’s findings of infringement.

We cannot reasonably estimate the ultimate outcome as the Federal Circuit Court 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.

In September 2023, we entered into a settlement and patent license agreement with Caltech pursuant to which we agreed to pay an aggregate of $ 160 million over five years and the case was dismissed with prejudice.

Other Matters

15 unchanged sentences

In our experience, claims made under such indemnifications are rare and the associated estimated fair value of the liability is not material.

Restructuring, Impairment and Disposal Charges

Restructuring and Other Charges

Restructuring Charges

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.

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

We recognized charges of $ 36 million , $ 55 million and $ 149 million during fiscal years 2023, 2022 and 2021, respectively.

1 unchanged sentence

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

Employee Termination Costs Other Exit Costs (a)

Employee Termination Costs Other Exit Costs

(In millions)

Balance as of November 1, 2020 $ 34 $ — $ 34

Restructuring charges (b)

Restructuring charges 100 13 113

Utilization ( 130 ) ( 13 ) ( 143 )

Effect of adoption of Topic 842 (c)

— ( 36 ) ( 36 )

Balance as of November 1, 2020 34 — 34

Balance as of October 31, 2021 4 — 4

Restructuring charges 24 6 30

4 unchanged sentences

Balance as of October 29, 2023 $ 2 $ — $ 2

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(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 .

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

Restructuring charges in our consolidated statement of operations for the fiscal years 2023, 2022 and 2021 included $ 7 million, $ 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 29, 2023 and October 30, 2022, short-term and long-term lease liabilities included $ 44 million and $ 52 million of liabilities related to restructuring activities.

Other Charges

During fiscal year 2023, other charges included $ 204 million of non-recurring charges related to IP litigation and $ 8 million of impairment and disposal charges primarily related to property, plant and equipment.

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

Subsequent Events

Acquisition of VMware, Inc.

On November 22, 2023, we completed the acquisition of VMware in a cash-and-stock transaction (the “VMware Merger”).

Pursuant to the Agreement and Plan of Merger, each share of VMware common stock issued and outstanding immediately prior to the effective time of the VMware Merger was 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 was prorated, 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, in each case, was equal to 50 % of the aggregate number of shares of VMware common stock issued and outstanding.

Based on the VMware stockholders’ elections, the VMware stockholders received approximately $ 30.8 billion in cash and 54.4 million shares of Broadcom common stock in aggregate.

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

The assumed awards were converted into approximately 5 million Broadcom RSU awards.

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

VMware was a leading provider of multi-cloud services for all applications, enabling digital innovation with enterprise control.

We acquired VMware to enhance our infrastructure software capabilities.

Preliminary Purchase Consideration

(In millions)

Fair value of Broadcom common stock issued for outstanding VMware common stock $ 53,398

Cash paid for outstanding VMware common stock 30,788

Cash paid by Broadcom to retire VMware’s term loan

Fair value of partially vested assumed equity awards 805

Fair value of Broadcom common stock issued for accelerated VMware equity awards 23

Cash paid for accelerated VMware equity awards

Effective settlement of pre-existing relationships 6

Total purchase consideration 86,290

cash acquired 6,642

Total purchase consideration, net of cash acquired $ 79,648

We funded the cash portion of the VMware Merger with the net proceeds from the issuance of the 2023 Term Loans, as discussed in further detail below, as well as cash on hand.

We assumed $ 8,250 million of VMware’s outstanding senior unsecured notes.

We are currently evaluating the purchase price allocation following the consummation of the VMware Merger.

It is not practicable to disclose the preliminary purchase price allocation or unaudited pro forma combined financial information for this transaction, given the short period of time between the acquisition date and the issuance of these consolidated financial statements.

2023 Term Loans

On August 15, 2023, we entered into a credit agreement (the “2023 Credit Agreement”), which provided us with the ability to borrow term loans in connection with the VMware Merger.

In connection with entering into the 2023 Credit Agreement, we terminated the commitment letter for a senior unsecured bridge facility in an aggregate principal amount of $ 32 billion that we entered into on May 26, 2022.

Upon completion of the VMware Merger, we entered an $ 11,195 million unsecured term A-2 facility (the "Term A-2 Loan”), an $ 11,195 million unsecured term A-3 facility (the “Term A-3 Loan”), and an $ 8,000 million unsecured term A-5 facility (the “Term A-5 Loan”, collectively, the “2023 Term Loans”).

The term loans under the Term A-2 Loan, Term A-3 Loan and Term A-5 Loan bear interest at floating interest rates and will mature and be payable on the second, third or fifth anniversary, respectively, of the date of the VMware Merger .

Our obligations under the 2023 Credit Agreement are unsecured and are not guaranteed by any of our subsidiaries.

Cash Dividends Declared

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Accounts receivable allowances:

Distributor credit allowances (1)

Distributor credit allowances (a)

Fiscal year ended October 29, 2023

2 unchanged sentences

$ 128 $ 484 $ ( 487 ) $ 125

Fiscal year ended November 1, 2020

Fiscal year ended October 31, 2021

$ 149 $ 756 $ ( 777 ) $ 128

Other accounts receivable allowances (2)

Other accounts receivable allowances (b)

Fiscal year ended October 29, 2023

2 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

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

(2) Other accounts receivable allowances primarily include sales returns and allowance for doubtful accounts.

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

(b) Other accounts receivable allowances primarily include sales returns and allowance for doubtful accounts.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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