What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-12-20 compared with 2023-12-14 · 450 added, 289 removed, 1117 unchanged (40% of the section changed)

14 unchanged sentences

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

and its subsidiaries (the “Company”) as of October 29, 2023 and October 30, 2022, 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 29, 2023, 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 29, 2023, 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 29, 2023 and October 30, 2022, and the results of its operations and its cash flows for each of the three years in the period ended October 29, 2023 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 29, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

and its subsidiaries (the “Company”) as of November 3, 2024 and October 29, 2023, 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 November 3, 2024, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of November 3, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 3, 2024 and October 29, 2023, and the results of its operations and its cash flows for each of the three years in the period ended November 3, 2024 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 3, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

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

Uncertain Tax Positions (UTPs)

As described in Notes 2 and 11 to the consolidated financial statements, the gross unrecognized tax benefits balance was $4,655 million as of October 29, 2023.

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

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

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

Acquisition of VMware — Valuation of VMware Cloud Foundation (“VCF”) Developed Technology, Certain Customer Contracts and Related Relationships, VCF In-process Research and Development, and VMware Trade Name Intangible Assets

As described in Notes 2 and 4 of the consolidated financial statements, on November 22, 2023, the Company completed the acquisition of VMware LLC for total consideration of $86,290 million.

The Company acquired $45,572 million of intangible assets in connection with the acquisition.

Of these acquired intangible assets, $24,156 million related to developed technology valued using the multi-period excess earnings method under the income approach, of which a significant portion related to VCF;

$15,239 million related to customer contracts and related relationships valued using the with-and-without method under the income approach, of which a significant portion related to certain customer contracts and relationships;

$4,730 million related to in-process research and development valued using the multi-period excess earnings method under the income approach, of which $4,705 million related to VCF;

and $1,205 million related to trade names valued using the relief-from-royalty method, of which a significant portion related to the VMware trade name.

The present value of projected cash flows included significant judgment and assumptions regarding (a) the projected revenues, projected expenses, technology obsolescence rate, contributory asset charges, and the discount rate for the VCF developed technology, (b) the projected revenues, customer retention rate, customer ramp up period, and the discount rate for the certain customer contracts and related relationships, (c) the projected revenues, technology obsolescence rate and the discount rate for the VCF in-process research and development, and (d) the projected revenues, brand asset phase-out pattern, brand asset royalty rate, and the discount rate for the VMware trade name.

The principal considerations for our determination that performing procedures relating to the valuation of the VCF developed technology, certain customer contracts and related relationships, VCF in-process research and development, and the VMware trade name intangible assets acquired in the VMware acquisition is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to (a) the projected revenues, projected expenses, technology obsolescence rate, contributory asset charges, and discount rate for the VCF developed technology, (b) certain projected revenues, customer retention rate, customer ramp up period, and discount rate for the certain customer contracts and related relationships, (c) the projected revenues, technology obsolescence rate and discount rate for the VCF in-process research and development, and (d) certain projected revenues, brand asset phase-out pattern, brand asset royalty rate, and discount rate for the VMware trade name (collectively referred to as “the aforementioned significant assumptions”);

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

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

These procedures included testing the effectiveness of controls relating to the 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, 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.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the acquired developed technology, customer contracts and related relationships, in-process research and development, and the trade names.

These procedures also included, among others, (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimate of the acquired VCF developed technology, certain customer contracts and related relationships, VCF in-process research and development, and the VMware trade name;

(iii) evaluating the appropriateness of the multi-period excess earnings, with-and-without, and relief-from-royalty methods used by management;

(iv) testing the completeness and accuracy of underlying data used in the multi-period excess earnings, with-and-without, and relief-from-royalty methods;

and (v) evaluating the reasonableness of the aforementioned significant assumptions used by management.

Evaluating management’s assumptions related to (a) the projected revenues and projected expenses for the VCF developed technology, (b) certain projected revenues, customer retention rate, and customer ramp up period for the certain customer contracts and related relationships, (c) projected revenues for the VCF in-process research and development, and (d) certain projected revenues for the VMware trade name involved considering (i) the current and past performance of VMware;

(ii) the consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in (i) evaluating the appropriateness of multi-period excess earnings, with-and-without, and relief-from-royalty methods and (ii) the reasonableness of (a) the technology obsolescence rate, contributory asset charge, and discount rate for the VCF developed technology, (b) the discount rate for the certain customer contracts and related relationships, (c) the technology obsolescence rate and discount rate for the VCF in-process research and development, and (d) brand asset phase-out pattern, brand asset royalty rate, and discount rate for the VMware trade name.

/s/ PricewaterhouseCoopers LLP

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29,000 shares authorized;

414 and 418 shares issued and outstanding as of October 29, 2023 and October 30, 2022, respectively

4,686 and 4,139 shares issued and outstanding as of November 3, 2024 and October 29, 2023, respectively

Additional paid-in capital

1 unchanged sentence

Retained earnings — 2,682

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Total stockholders’ equity 67,678 23,988

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Other income (expense), net 406 512 ( 54 )

Income before income taxes

Income from continuing operations before income taxes

9,916 15,097 12,434

Provision for income taxes

3,748 1,015 939

Income from continuing operations 6,168 14,082 11,495

Loss from discontinued operations, net of income taxes ( 273 ) — —

Net income 5,895 14,082 11,495

1 unchanged sentence

Net income attributable to common stock $ 5,895 $ 14,082 $ 11,223

Net income per share attributable to common stock:

Basic $ 33.93 $ 27.44 $ 15.70

Diluted $ 32.98 $ 26.53 $ 15.00

Basic income per share attributable to common stock:

Income per share from continuing operations

$ 1.33 $ 3.39 $ 2.74

Loss per share from discontinued operations

Net income per share

$ 1.27 $ 3.39 $ 2.74

Diluted income per share attributable to common stock:

Income per share from continuing operations $ 1.29 $ 3.30 $ 2.65

Loss per share from discontinued operations ( 0.06 ) — —

Net income per share $ 1.23 $ 3.30 $ 2.65

Weighted-average shares used in per share calculations:

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Net income $ 5,895 $ 14,082 $ 11,495

Other comprehensive income (loss), net of tax:

Other comprehensive income, net of tax:

Change in unrealized gain on derivative instruments ( 1 ) 290 37

Change in actuarial loss and prior service costs associated with defined benefit plans 1 ( 29 ) 25

Other comprehensive income (loss), net of tax 261 62 ( 8 )

Other comprehensive income, net of tax

Comprehensive income $ 5,895 $ 14,343 $ 11,557

26 unchanged sentences

Acquisitions of businesses, net of cash acquired ( 25,978 ) ( 53 ) ( 246 )

Proceeds from sales of businesses — — 45

Proceeds from sale of business

Purchases of property, plant and equipment ( 548 ) ( 452 ) ( 424 )

12 unchanged sentences

Net cash used in financing activities ( 1,733 ) ( 15,623 ) ( 15,816 )

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

Net change in cash and cash equivalents ( 4,841 ) 1,773 253

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(In millions)

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

Balance as of October 31, 2021 4 $ — 4,129 $ 4 $ 24,326 $ 748 $ ( 116 ) $ 24,962

Net income — — — — — 11,495 — 11,495

Other comprehensive loss

Other comprehensive income

— — — — — — 62 62

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

— — — — 4 — — 4

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

2 unchanged sentences

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

Repurchases of common stock

— — ( 117 ) — ( 3,316 ) ( 3,684 ) — ( 7,000 )

Common stock issued in connection with Mandatory Convertible Preferred Stock conversion

( 4 ) — 116 — — — — —

Shares repurchased for tax withholdings on vesting of equity awards

4 unchanged sentences

— — — — — — 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 )

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

Common stock issued — — 77 — 122 — — 122

2 unchanged sentences

— — ( 91 ) — ( 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

2 unchanged sentences

Net income — — — — — 5,895 — 5,895

Other comprehensive income — — — — — — 261 261

Issuance of common stock upon the acquisition of VMware, Inc.

— — 544 1 53,420 — — 53,421

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

— — — — 750 — — 750

Dividends to common stockholders — — — — ( 2,809 ) ( 7,005 ) — ( 9,814 )

4 unchanged sentences

— — ( 38 ) — ( 5,323 ) — — ( 5,323 )

Balance as of October 29, 2023 — $ — 414 $ — $ 21,099 $ 2,682 $ 207 $ 23,988

Balance as of November 3, 2024 — $ — 4,686 $ 5 $ 67,466 $ — $ 207 $ 67,678

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

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We develop semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products.

We have a history of innovation in the semiconductor industry and offer thousands of products that are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays.

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

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

We offer thousands of products that are used in end products such as enterprise and data center networking, including artificial intelligence (“AI”) networking and connectivity, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays.

Our infrastructure software solutions help enterprises simplify their information technology (“IT”) environments so they can increase business velocity and flexibility, and enable customers to plan, develop, deliver, automate, manage and secure applications across mainframe, distributed, edge, mobile, and private and hybrid cloud platforms.

Our portfolio of infrastructure and security software is designed to modernize, optimize, and secure the most complex private and hybrid cloud environments, enabling scalability, agility, automation, insights, resiliency and security making it easy for customers to run their mission-critical workloads.

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.

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“Segment Information” for additional information.

On November 22, 2023, we completed the acquisition of VMware, Inc.

(“VMware”) in a cash-and-stock transaction (the “VMware Merger”).

The VMware stockholders received approximately $ 30,788 million in cash and 544 million shares of Broadcom common stock (on a split adjusted basis) with a fair value of $ 53,398 million.

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.

The accompanying consolidated financial statements include the results of operations of VMware commencing on November 22, 2023.

“Acquisitions” 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.

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

Our fiscal year ended November 3, 2024 (“fiscal year 2024”) was a 53-week fiscal year, with the first fiscal quarter containing 14 weeks.

Our fiscal year ended October 29, 2023 (“fiscal year 2023”) and fiscal year ended October 30, 2022 (“fiscal year 2022”) were both 52-week fiscal years.

1 unchanged sentence

All intercompany balances and transactions have been eliminated in consolidation.

On July 12, 2024, we completed a ten -for-one forward stock split of our common stock through the filing of an amendment (“Amendment”) to our Amended and Restated Certificate of Incorporation.

The Amendment proportionately increased the number of shares of our authorized common stock without changing the par value of $ 0.001 per share.

All share, equity award and per share amounts and related stockholders’ equity balances presented in the accompanying consolidated financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the stock split.

Summary of Significant Accounting Policies

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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.

Allowances for doubtful accounts were not material as of November 3, 2024 or October 29, 2023.

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 29, 2023 and October 30, 2022 were $ 137 million and $ 126 million, respectively.

Allowances for sales returns and distributor credit allowances as of November 3, 2024 and October 29, 2023 were $ 101 million and $ 137 million, respectively.

Concentrations of credit risk and significant customers.

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

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

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

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

15 unchanged sentences

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.

For derivative instruments designated as cash flow hedges, the changes in fair value are initially recognized in other comprehensive income, 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 29, 2023 or October 30, 2022.

We did not have any material foreign exchange forward contracts outstanding as of November 3, 2024 or October 29, 2023.

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

1 unchanged sentence

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.

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.

The cumulative gain was recorded net of tax of $ 44 million as a component of accumulated other comprehensive income as of October 29, 2023.

The cash receipts from the settlement were included in cash flows from operating activities in the consolidated statement of cash flows during fiscal year 2023.

In fiscal year 2024, upon the issuance of our $ 1.75 billion 4.800 % senior notes due October 2034 as discussed in Note 10.

“Borrowings”, $ 75 million out of the $ 371 million pre-tax cumulative gain in accumulated other comprehensive income will be amortized to interest expense through October 15, 2034 using the effective interest method.

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

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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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.

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.

1 unchanged sentence

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in our consolidated statements of operations.

Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date including our estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable.

Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date, for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable.

Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based, in part, on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.

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.

Critical estimates in valuing certain acquired intangible assets include the present value of projected cash flows regarding the projected revenues, projected expenses which include cost of revenue, research and development and selling, general and administrative expenses, technology obsolescence rate, contributory asset charges, discount rate and income tax rate for developed technology;

the projected revenues, customer retention rate, customer ramp up period, discount rate and income tax rate for the customer contracts and related relationships;

the projected revenues, technology obsolescence rate, expected costs to develop in-process research and development (“IPR&D”) into commercially viable products, discount rate and income tax rate for the IPR&D;

and the projected revenues, brand asset phase-out pattern, brand asset royalty rate, discount rate and the income tax rate for the trade name.

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

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Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer.

Payment terms and conditions vary by contract type, and terms between invoicing and when payment is due are short-term in duration.

The timing of revenue recognition and required payments can differ and payment terms are generally structured to provide the customer with predictable and dependable ways to procure our products, not to provide or receive financing from the customer.

Nature of Products and Services

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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.

We believe that for the majority of software arrangements, customers derive significant benefit from the ongoing support we provide.

The majority of our subscriptions and services arrangements permit our customers to unilaterally terminate or cancel these arrangements at any time at the customer’s convenience, referred to as termination for convenience provisions, without substantive termination penalty and receive a pro-rata refund of any prepaid fees.

Certain of our subscriptions and services arrangements permit our customers to unilaterally terminate or cancel these arrangements at any time at the customer’s convenience, referred to as termination for convenience provisions, without substantive termination penalty and receive a pro-rata refund of any prepaid fees.

Accordingly, we account for arrangements with these termination for convenience provisions as a series of daily contracts, resulting in ratable revenue recognition of software revenue over the contractual period.

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

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.

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, reasonably available data points such as costs incurred to provide the good or service, market conditions, entity-specific factors such as pricing strategies and objectives, and information about the customer.

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

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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.

21 unchanged sentences

We estimate forfeitures expected to occur and recognize stock-based compensation expense for such awards expected to vest.

We will recognize additional expense if actual forfeitures are lower than we estimated, and will recognize a benefit if actual forfeitures are higher than we estimated.

Changes in the estimated forfeiture rates can have a significant effect on stock-based compensation expense since the effect of adjusting the rate is recognized in the period the forfeiture estimate is changed.

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Diluted net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period.

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

Potentially dilutive shares outstanding include the dilutive effect of unvested RSUs and ESPP rights (together referred to as “equity awards”), as well as convertible preferred stock.

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

The dilutive effect of equity awards is calculated based on the average stock price for each fiscal period, using the treasury stock method.

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

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

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

11 unchanged sentences

Products $ 2,244 $ 26,219 $ 1,896 $ 30,359

Subscriptions and services (a)

Subscriptions and services

12,726 2,203 6,286 21,215

4 unchanged sentences

Products $ 2,601 $ 23,263 $ 2,027 $ 27,891

Subscriptions and services (a)

Subscriptions and services

5,678 657 1,593 7,928

4 unchanged sentences

Products $ 2,371 $ 21,761 $ 2,145 $ 26,277

Subscriptions and services (a)

Subscriptions and services

4,573 744 1,609 6,926

Total $ 6,944 $ 22,505 $ 3,754 $ 33,203

_____________________________

(a) Subscriptions and services predominantly includes software licenses with termination for convenience clauses.

Although we recognize revenue for the majority of our products when title and control transfer in Penang, Malaysia, we disclose net revenue by region based primarily on the geographic shipment location or delivery location specified by our distributors, original equipment manufacturer (“OEM”) customers, contract manufacturers, channel partners, or software customers.

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

Contract assets and contract liabilities as of November 3, 2024 included the impact of VMware balances acquired on November 22, 2023.

We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer.

2 unchanged sentences

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.

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

As of November 3, 2024 , approximately 55 % of contract liabilities related to contracts subject to termination for convenience provisions .

The amount of revenue recognized during fiscal year 2024 that was included in the contract liabilities balance as of October 29, 2023 was $ 2,440 million.

4 unchanged sentences

The customer is not considered committed when termination for convenience without payment of a substantive penalty exists, either contractually or through customary business practice.

The majority of our customer software contracts include termination for convenience clauses without a substantive penalty and are not considered committed.

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

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

Certain multi-year customer contracts in our semiconductor solutions and infrastructure software segments contain firmly committed amounts and the remaining performance obligations under these contracts as of November 3, 2024 were approximately $ 20.5 billion.

We expect approximately 43 % of this amount to be recognized as revenue over the next 12 months.

Although the majority of our software contracts are not deemed to be committed, our customers generally do not exercise their termination for convenience rights.

In addition, the majority of our contracts for products, subscriptions and services have a duration of one year or less.

For contracts with termination for convenience rights, our customers generally do not exercise those rights.

In addition, the majority of our revenue is from contracts with a duration of one year or less.

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

Acquisition of VMware, Inc.

On November 22, 2023 , we completed the VMware Merger.

Pursuant to the Agreement and Plan of Merger, each share of VMware common stock issued and outstanding immediately prior to 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 or 2.52 shares of Broadcom common stock (on a split adjusted basis).

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 immediately prior to the VMware Merger.

Based on the VMware stockholders’ elections, the VMware stockholders received approximately $ 30,788 million in cash and 544 million shares of Broadcom common stock with a fair value of $ 53,398 million.

We funded the cash portion of the VMware Merger with the net proceeds from the issuance of the 2023 Term Loans, as defined and discussed in Note 10.

“Borrowings”, as well as cash on hand.

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

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 VMware equity awards

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 assumed all outstanding VMware RSU awards and performance stock unit (“PSU”) awards held by continuing employees.

The assumed awards were 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 were accelerated and converted into the right to receive cash and shares of Broadcom common stock, in equal parts.

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

(In millions)

Trade accounts receivable

Assets held-for-sale

Other current assets

Property, plant and equipment

Intangible assets

Other long-term assets

Total assets acquired

Accounts payable ( 359 )

Employee compensation and benefits ( 848 )

Current portion of long-term debt ( 1,264 )

Liabilities held-for-sale

Other current liabilities

Long-term debt

Other long-term liabilities

Total liabilities assumed

Fair value of net assets acquired

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

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

Goodwill is not deductible for tax purposes.

Assets and liabilities held-for-sale primarily included the end-user computing (“EUC”) business and certain other assets and liabilities, which were not aligned with our strategic objectives.

On July 1, 2024, we sold the EUC business to KKR & Co.

for cash consideration of $ 3.5 billion , after working capital adjustments .

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

Our results of continuing operations included $ 12,384 million of net revenue attributable to VMware for fiscal year 2024 .

It is impracticable to determine the effect on net income attributable to VMware as we immediately integrated VMware into our ongoing operations.

Transaction costs related to the VMware Merger of $ 255 million were primarily included in selling, general and administrative expense for fiscal year 2024 .

Intangible Assets

Weighted-Average Amortization Periods

(In millions)

Developed technology $ 24,156 8

Customer contracts and related relationships 15,239 8

Off-market component of customer contracts

Total identified finite-lived intangible assets 40,842

Total identified intangible assets $ 45,572

Developed technology relates to products used for VMware cloud foundation, application management, security, application networking and security, and software-defined edge.

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 VMware.

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 “VMware” 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.

Off-market component of customer contracts relate to rebates and marketing development funds provided to customers prior to the VMware Merger.

We valued these contracts based on their remaining unamortized balances, which approximate their fair value.

The economic useful life was determined based on the remaining terms of customer contracts.

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.

The following table presents the details of IPR&D by category as of the date of the VMware Merger:

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

(By Fiscal Year)

(Dollars in millions)

VMware cloud foundation July 2024 releases

$ 790 67 % $ 38 2024 (a)

VMware cloud foundation March 2025 releases

$ 2,900 58 % $ 185 2025 (b)

VMware cloud foundation July 2025 releases

$ 750 43 % $ 65 2025 (c)

VMware cloud foundation networking and security virtualization

$ 265 21 % $ 59 2024 (a)

Application networking and security

$ 25 21 % $ 47 2024 (a)

____________________________

(a) Released during fiscal year 2024.

(b) $ 1,380 million of the $ 2,900 million was released during fiscal year 2024.

The remaining balance is expected to be released during the second half of the fiscal year ending November 2, 2025 (“fiscal year 2025”) .

VMware cloud foundation is a private cloud platform that integrates compute, storage, networking, and management into a single solution and provides license portability.

It enables customers to modernize infrastructure and accelerate developer productivity with greater resilience and security.

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 date of the VMware Merger.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented, as if VMware had been acquired as of the beginning of fiscal year 2023.

The unaudited pro forma information includes adjustments to amortization for intangible assets acquired, stock-based compensation expense, interest expense for acquisition financing, amortization of deferred assets and liabilities, and depreciation for property and equipment acquired.

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 2023 or of the results of our future operations of the combined business.

(In millions)

Pro forma net revenue $ 52,188 $ 48,227

Pro forma net income

$ 6,473 $ 8,215

Acquisition of Seagate’s SoC Operations

On April 23, 2024, we acquired certain assets related to the design, development, and manufacture of System-on-Chip (“SoC”) operations of Seagate Technology Holdings plc for $ 600 million .

We acquired these assets to strengthen our portfolio of SoC products.

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

Goodwill is allocated to the semiconductor solutions segment and is deductible for tax purposes.

(In millions)

Intangible assets

Total assets acquired $ 600

Intangible Assets

Weighted-Average Amortization Periods

(In millions)

Customer contracts and related relationships

Developed technology

Total identified finite-lived intangible assets 500

Total identified intangible assets $ 570

Customer contracts and related relationships represent the fair value of future projected revenue that will be derived from sales of SoC controller products for hard disk drive applications .

Customer contracts and related relationships were valued 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 customer contracts and related relationships less charges representing the contribution of other assets to those cash flows.

The economic useful life was determined based on the useful lives of other intangible assets and the length of time remaining on the acquired contracts .

Developed technology relates to SoC controller products for hard disk drive applications.

We valued the developed technology using 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 developed technology.

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.

The fair value of IPR&D was determined using the relief-from-royalty method under the income approach.

This method is based on the application of a royalty rate to forecasted revenue from the IPR&D.

Supplemental Financial Information

Cash Equivalents

Cash equivalents included $ 1,470 million and $ 3,915 million of time deposits and $ 1,650 million and $ 2,365 million of money-market funds as of October 29, 2023 and October 30, 2022, respectively.

Cash equivalents included $ 1,716 million and $ 1,470 million of time deposits and $ 1,171 million and $ 1,650 million of money-market funds as of November 3, 2024 and October 29, 2023, respectively.

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

4 unchanged sentences

Total trade accounts receivable sold under the factoring arrangements were $ 5,900 million, $ 3,975 million and $ 3,700 million during fiscal years 2024, 2023 and 2022, respectively.

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

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

periods presented.

2024 October 29,

18 unchanged sentences

(In millions)

Current portion of contract assets $ 1,916 $ 499

Prepaid expenses 1,391 743

12 unchanged sentences

(In millions)

Unrecognized tax benefits, interest and penalties $ 2,792 $ 3,229

Contract liabilities $ 5,100 $ 299

Deferred tax liabilities

Unrecognized tax benefits, interest and penalties 3,669 2,792

Other 1,503 657

8 unchanged sentences

Other income (expense), net $ 406 $ 512 $ ( 54 )

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.

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

Discontinued Operations

During fiscal year 2024, we sold the EUC business for $ 3.5 billion, after working capital adjustments.

In connection with the sale, we agreed to provide transitional services to the buyer on a short-term basis.

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

The following table summarizes the selected financial information of discontinued operations:

(In millions)

Net revenue $ 858

Loss from discontinued operations before income taxes

Provision for income taxes

Loss from discontinued operations, net of income taxes

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

Operating lease expense was $ 187 million, $ 91 million and $ 98 million for fiscal years 2024, 2023 and 2022, respectively.

Finance lease expense was $ 27 million, $ 16 million and $ 18 million for fiscal years 2024, 2023 and 2022, respectively.

Other information related to leases was as follows:

Other lease information, which included the impact of VMware leases acquired on November 22, 2023, was as follows.

2024 2023 2022

8 unchanged sentences

Weighted-average discount rate – finance leases 3.13 % 3.09 %

Supplemental balance sheet information related to leases was as follows:

Classification on the Consolidated Balance Sheets October 29,

Supplemental balance sheet information related to leases, which included the VMware leases acquired on November 22, 2023, was as follows:

Classification on the Consolidated Balance Sheets November 3,

2024 October 29,

6 unchanged sentences

Long-term lease liabilities - finance leases Long-term debt $ 13 $ 4

Future minimum lease payments under non-cancelable leases as of October 29, 2023 were as follows:

Future minimum lease payments under non-cancelable leases as of November 3, 2024 were as follows:

Operating Leases Finance Leases

5 unchanged sentences

Present value of lease liabilities $ 1,350 $ 39

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

4 unchanged sentences

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

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.

Acquisition of VMware — 54,206 54,206

Acquisition of Seagate's SoC operations 14 — 14

Balance as of November 3, 2024 $ 26,015 $ 71,858 $ 97,873

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

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

5 unchanged sentences

(In millions)

As of October 29, 2023:

As of November 3, 2024:

Purchased technology $ 35,467 $ ( 12,551 ) $ 22,916

Customer contracts and related relationships 16,186 ( 2,271 ) 13,915

Order backlog 9 ( 8 ) 1

Trade names 1,720 ( 369 ) 1,351

6 unchanged sentences

Customer contracts and related relationships 7,059 ( 5,753 ) 1,306

Order backlog 484 ( 382 ) 102

Trade names 649 ( 388 ) 261

3 unchanged sentences

Total $ 20,833 $ ( 16,966 ) $ 3,867

Based on the amount of intangible assets subject to amortization at October 29, 2023, the expected amortization expense for each of the next five fiscal years and thereafter was as follows:

Based on the amount of intangible assets subject to amortization at November 3, 2024, the expected amortization expense for each of the next five fiscal years and thereafter was as follows:

Expected Amortization Expense

4 unchanged sentences

Amortizable intangible assets:

2023 October 30,

Purchased technology 7

Customer contracts and related relationships 7

Order backlog — (a)

Trade names 12

(a) Represents less than one year.

Net Income Per Share

1 unchanged sentence

(In millions, except per share data)

Income from continuing operations

$ 6,168 $ 14,082 $ 11,495

Dividends on preferred stock — — ( 272 )

Income from continuing operations attributable to common stock

6,168 14,082 11,223

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

Net income attributable to common stock

3 unchanged sentences

Weighted-average shares outstanding - diluted 4,778 4,272 4,232

Net income per share attributable to common stock:

Basic $ 33.93 $ 27.44 $ 15.70

Diluted $ 32.98 $ 26.53 $ 15.00

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.

Basic income per share attributable to common stock:

Income per share from continuing operations

$ 1.33 $ 3.39 $ 2.74

Loss per share from discontinued operations

Net income per share

$ 1.27 $ 3.39 $ 2.74

Diluted income per share attributable to common stock:

Income per share from continuing operations

$ 1.29 $ 3.30 $ 2.65

Loss per share from discontinued operations

Net income per share

$ 1.23 $ 3.30 $ 2.65

For fiscal year 2022, diluted net income per share excluded the potentially dilutive effect of 104 million shares of common stock 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.

8 unchanged sentences

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.

For certain non-U.S.

countries, we also have defined benefit pension plans for eligible employees.

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

10 unchanged sentences

Benefit Obligations and Plan Assets

Pension Benefits

2024 October 29,

7 unchanged sentences

( 108 ) ( 94 )

Plan assets acquired in VMware acquisition

Foreign currency impact ( 2 ) 4

4 unchanged sentences

Interest cost 63 60

Actuarial gain (a)

( 22 ) ( 336 )

Actuarial (gain) loss

Plan participants’ contributions

Benefit payments ( 108 ) ( 94 )

Curtailments ( 13 ) —

Benefit obligations assumed in VMware acquisition

Foreign currency impact ( 4 ) 5

Benefit obligations — end of period 1,194 1,101

Overfunded (underfunded) status of benefit obligations (b)

Overfunded (underfunded) status of benefit obligations (a)

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

1 unchanged sentence

_______________________________

(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:

(a) 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 less than plan assets:

2024 October 29,

3 unchanged sentences

Fair value of plan assets $ 1,118 $ 1,079

Plans with benefit obligations less than plan assets:

Plans with benefit obligations in excess of plan assets:

2024 October 29,

3 unchanged sentences

Fair value of plan assets $ 40 $ 26

The fair value of pension plan assets as of October 29, 2023 and October 30, 2022 included $ 204 million and $ 184 million, respectively, of assets for our non-U.S.

The fair value of pension plan assets as of November 3, 2024 and October 29, 2023 included $ 229 million and $ 204 million, respectively, of assets for our non-U.S.

pension plans.

The projected benefit obligations as of October 29, 2023 and October 30, 2022 included $ 202 million and $ 185 million, respectively, of obligations related to our non-U.S.

The projected benefit obligations as of November 3, 2024 and October 29, 2023 included $ 260 million and $ 202 million, respectively, of obligations related to our non-U.S.

pension plans.

The accumulated benefit obligations as of October 29, 2023 and October 30, 2022 included $ 188 million and $ 168 million, respectively, of obligations related to our non-U.S.

The accumulated benefit obligations as of November 3, 2024 and October 29, 2023 included $ 229 million and $ 188 million, respectively, of obligations related to our non-U.S.

pension plans.

18 unchanged sentences

Fair Value Measurement of Plan Assets

October 29, 2023

November 3, 2024

Fair Value Measurements at Reporting Date Using

10 unchanged sentences

Asset-backed securities — 1 (c)

Plan assets measured by fair value hierarchy

$ 100 $ 936 1,036

Plan assets measured at net asset value

Total plan assets

14 unchanged sentences

$ 78 $ 1,027 $ 1,105

______________________________

(a) Cash equivalents primarily included short-term investment funds which consisted of short-term money market instruments that were valued based on quoted prices in active markets .

1 unchanged sentence

(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.

(d) Plan assets measured at fair value using net asset value as a practical expedient were excluded from the fair value hierarchy .

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.

28 unchanged sentences

During fiscal years 2024, 2023 and 2022, we made contributions of $ 210 million, $ 100 million and $ 96 million, respectively, to the 401(k) plan.

The increase in fiscal year 2024 was due to the VMware Merger.

In addition, other eligible employees outside of the U.S.

receive retirement benefits under various defined contribution retirement plans.

Effective Interest Rate October 29,

Effective Interest Rate November 3,

2024 October 29,

(In millions, except percentages)

(Dollars in millions)

October 2024 Senior Notes - fixed rate

4.150 % notes due February 2028

4.36 % $ 875 $ —

4.350 % notes due February 2030

4.51 % 1,500 —

4.550 % notes due February 2032

4.800 % notes due October 2034

4.38 % 1,750 —

July 2024 Senior Notes - fixed rate

5.050 % notes due July 2027

5.27 % 1,250 —

5.050 % notes due July 2029

5.23 % 2,250 —

5.150 % notes due November 2031

5.30 % 1,500 —

2023 Term Loans - floating rate

SOFR plus 1.125 % term loan due November 2026

6.23 % 5,595 —

SOFR plus 1.375 % term loan due November 2028

6.31 % 8,000 —

April 2022 Senior Notes - fixed rate

34 unchanged sentences

2.250 % notes due November 2023

2.40 % 105 105

3.150 % notes due November 2025

3.29 % 900 900

Effective Interest Rate November 3,

2024 October 29,

(Dollars in millions)

4.150 % notes due November 2030

7 unchanged sentences

3.625 % notes due October 2024

3.98 % 622 622

4.750 % notes due April 2029

8 unchanged sentences

3.60 % 777 777

Effective Interest Rate October 29,

2023 October 30,

(In millions, except percentages)

3.500 % notes due January 2028

Assumed VMware Senior Notes - fixed rate

4.500 % notes due May 2025

1.400 % notes due August 2026

5.60 % 1,500 —

Assumed CA Senior Notes - fixed rate

4.650 % notes due May 2027

3.900 % notes due August 2027

5.50 % 1,250 —

1.800 % notes due August 2028

4.700 % notes due May 2030

2.200 % notes due August 2031

5.74 % 1,500 —

Assumed CA Senior Notes - fixed rate

4.700 % notes due March 2027

11 unchanged sentences

Total long-term debt $ 66,295 $ 37,621

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.

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

The effective interest rates are calculated based on contractual interest, discount and issuance costs and, if applicable, reclassification of the cumulative gain from derivatives.

"Summary of Significant Accounting Policies" for additional information for derivative instruments.

We issued senior unsecured notes for an aggregate principal amount of $ 5,000 million in October 2024 and $ 5,000 million in July 2024.

In connection with the VMware Merger, we assumed $ 8,250 million of VMware’s outstanding senior unsecured notes.

We repaid $ 1,250 million of 1.000 % notes upon maturity in August 2024.

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

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.”

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 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.

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 % 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.

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

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

January 2021 Senior Notes

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

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.

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.

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”).

During fiscal year 2024, we repaid $ 11,195 million of our Term A-2 Loan using the net proceeds from the senior notes issued in July 2024 and the sale of the EUC business, as well as cash on hand.

We also repaid $ 5,600 million of our Term A-3 Loan using the net proceeds from the senior notes issued in October 2024 and cash on hand.

As a result of these repayments, we wrote off unamortized discount and issuance costs of $ 157 million, which were included in interest expense in the consolidated statement of operations.

The 2023 Term Loans bear interest, payable monthly or every three months at our election, at floating interest rates tied to the Secured Overnight Financing Rate (“SOFR”).

The Term A-3 Loan and Term A-5 Loan will mature and be payable on the third or fifth anniversary, respectively, of the date of the VMware Merger.

Subject to the terms of the 2023 Credit Agreement, we are permitted to v oluntarily make prepayments of the term loans without penalty.

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

2021 Credit Agreement

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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 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”).

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”).

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”).

Using the net proceeds, we repaid certain term loans.

Registered Exchange Offer

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

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

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

We had no borrowings outstanding under the revolving credit facility at either November 3, 2024 or October 29, 2023.

Commercial Paper

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

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

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

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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 29, 2023 or October 30, 2022.

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.

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.

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.

We had no Commercial Paper outstanding at either November 3, 2024 or October 29, 2023.

Fair Value of Debt

As of October 29, 2023, the estimated aggregate fair value of our debt was $ 33,181 million.

As of November 3, 2024, the estimated aggregate fair value of our debt was $ 65,022 million.

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

The carrying value of the 2023 Term Loans approximates their fair value as the 2023 Term Loans are carried at a market observable interest rate that resets periodically.

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

Future Principal Payments of Debt

The future scheduled principal payments of debt as of October 29, 2023 were as follows:

The future scheduled principal payments of debt as of November 3, 2024 were as follows:

Future Scheduled Principal Payments

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Total $ 69,847

As of October 29, 2023 and October 30, 2022, we were in compliance with all debt covenants.

As of November 3, 2024 and October 29, 2023, we were in compliance with all debt covenants.

Stockholders’ Equity

On July 12, 2024, we completed a ten -for-one forward stock split of our common stock, proportionately increasing the number of shares of our authorized common stock from 2.9 billion to 29 billion without changing the par value of $ 0.001 per share.

All share, equity award and per share amounts and related stockholders’ equity balances presented herein have been retroactively adjusted, where applicable, to reflect the stock split.

Cash Dividends Declared and Paid

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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.

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 programs may be suspended or terminated at any time.

Equity Incentive Award Plan

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

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

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

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.

During fiscal years 2024, 2023 and 2022, we repurchased and retired approximately 67 million, 91 million and 117 million shares of our common stock for $ 7,176 million, $ 5,824 million and $ 7,000 million, respectively.

All $ 20 billion of the authorized amount under these stock repurchase programs was utilized prior to expiration on December 31, 2023.

Equity Incentive Award Plans

In connection with the acquisition of Broadcom Corporation, we assumed its 2012 stock incentive plan and outstanding unvested RSUs that were held by its employees.

During the second quarter of fiscal year 2021, our stockholders approved the amendment and restatement of the Broadcom Corporation 2012 stock incentive plan, now called the Broadcom Inc.

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

Under the 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 40 million shares in any fiscal year.

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

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

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.

Equity awards granted generally vest over four years .

The 2012 Plan reduced the number of shares available for new equity award grants to 200 million shares and removed the annual share replenishment provision provided under the Broadcom Corporation 2012 stock incentive plan.

During the second quarter of fiscal year 2023, our stockholders approved the amendment and restatement of the 2012 Plan to increase the number of shares of common stock authorized for issuance by 250 million shares.

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

As of October 29, 2023, 36 million shares remained available for issuance under the Amended 2012 Plan.

As of November 3, 2024, 364 million shares remained available for issuance under the 2012 Plan.

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

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

During fiscal years 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 years 2024, 2023 and 2022, we granted market-based RSUs under which grantees may receive the number of shares ranging from 0 % to 300 % of the original grant on a stock split adjusted basis 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.

In connection with the VMware Merger, we assumed the VMware, Inc.

Amended and Restated 2007 Equity and Incentive Plan (the “2007 Plan”) and outstanding unvested RSU awards and PSU awards originally granted by VMware under the 2007 Plan that were held by continuing employees.

These assumed awards were converted into approximately 46 million Broadcom RSU awards and will vest in accordance with their original terms, generally over four years .

Under the 2007 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, RSUs, and other stock-based or cash-based awards to employees.

Equity awards granted under the 2007 Plan following the VMware Merger are expected to be on similar terms and consistent with similar grants made pursuant to the 2012 Plan.

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

As of November 3, 2024, 62 million shares remained available for issuance under the 2007 Plan.

Employee Stock Purchase Plan

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Selling, general and administrative 1,546 448 338

Total stock-based compensation expense $ 2,171 $ 1,533 $ 1,704

Total stock-based compensation expense (a)

$ 5,670 $ 2,171 $ 1,533

Estimated income tax benefits for stock-based compensation $ 991 $ 367 $ 255

Excess income tax benefits for stock-based awards exercised or released $ 1,296 $ 507 $ 375

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

We will recognize additional expense if actual forfeitures are lower than we estimated, and will recognize a benefit if actual forfeitures are higher than we estimated.

_____________________________

(a) Does not include stock-based compensation expense related to discontinued operations recognized during fiscal year 2024, which was included in loss from discontinued operations, net of income taxes in our consolidated statement of operations.

Fiscal year 2024 stock-based compensation expense included $ 1,613 million related to equity awards assumed in connection with the VMware Merger.

During the first quarter of fiscal year 2019, the Compensation Committee of our Board of Directors approved a broad-based program of multi-year equity grants of time- and market-based RSUs (the “Multi-Year Equity Awards”) in lieu of our annual employee equity awards historically granted on March 15 of each year.

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Stock-based compensation expense related to the Multi-Year Equity Awards was $ 356 million, $ 596 million and $ 794 million for fiscal years 2024, 2023 and 2022, respectively.

As of October 29, 2023, the total unrecognized compensation cost related to unvested stock-based awards was $ 6,375 million, which is expected to be recognized over the remaining weighted-average service period of 3.4 years.

As of November 3, 2024, the total unrecognized compensation cost related to unvested stock-based awards was $ 11,259 million, which is expected to be recognized over the remaining weighted-average service period of 3.0 years.

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

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(In millions, except per share data)

Balance as of November 1, 2020 32 $ 188.35

Balance as of October 31, 2021 234 $ 20.04

Granted 27 $ 52.77

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Balance as of October 29, 2023

Assumed in VMware Merger

Granted 81 $ 115.58

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Forfeited ( 25 ) $ 88.62

Balance as of October 29, 2023

Balance as of November 3, 2024

The aggregate fair value of time- and market-based RSUs that vested in fiscal years 2024, 2023 and 2022 was $ 14,914 million, $ 5,423 million and $ 4,207 million, respectively, which represented the market value of our common stock on the date that the RSUs vested.

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Foreign income 14,767 15,160 14,454

Income before income taxes

Income from continuing operations before income taxes

$ 9,916 $ 15,097 $ 12,434

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Deemed inclusion of foreign earnings 16.3 9.9 8.0

Foreign-derived intangible income deduction — — ( 3.1 )

Impact of non-recurring intra-group transfer of certain IP rights

Uncertain tax benefits

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Effective tax rate on income before income taxes 37.8 % 6.7 % 7.5 %

The increase in provision for income taxes in fiscal year 2024 compared to fiscal year 2023 was primarily due to the impact of a non-recurring intra-group transfer of certain IP rights to the United States as a result of supply chain realignment and the resulting shift in jurisdictional mix of income, partially offset by an increase in 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 from our qualifying income earned in Malaysia, which is scheduled to expire in fiscal year 2028.

These Singapore tax incentives are scheduled to expire in November 2030.

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.

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 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.

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 $ 2,261 million, $ 2,104 million and $ 1,821 million for fiscal years 2024, 2023 and 2022, respectively.

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

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Deferred income tax liabilities 9,507 547

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.

Net deferred income tax assets (liabilities)

$ ( 4,541 ) $ 698

As a result of the acquisition of VMware, we established $ 3,642 million of net deferred tax liabilities on the excess of book basis over the tax basis of acquired assets.

Our net deferred tax liabilities also increased during the year due to the non-recurring intra-group transfer of certain IP rights to the United States.

The valuation allowance disclosed in the table above relates to substantially all U.S.

state and foreign net operating loss carryforwards and research and development tax credits that may not be realized.

We continue to indefinitely reinvest $ 1,785 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.

As of October 29, 2023, we had tax effected U.S.

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.

As of November 3, 2024, we had tax effected U.S.

state net operating loss carryforwards of $ 126 million and foreign net operating loss carryforwards of $ 92 million, all of which expire in various years beginning in fiscal year 2025.

We had $ 2,176 million of state research and development tax credits which begin to expire in fiscal year 2025.

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

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Lapses of statutes of limitations ( 39 ) ( 634 ) ( 50 )

Increases in balances related to tax positions taken during prior periods

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

Decreases in balances related to tax positions taken during prior periods ( 9 ) ( 13 ) ( 113 )

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During fiscal years 2024, 2023 and 2022, we recognized interest and penalties of $ 144 million, $ 22 million and $ 25 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.

As of October 29, 2023 and October 30, 2022, approximately $ 5,044 million and $ 5,528 million, respectively, of the unrecognized tax benefits and accrued interest and penalties would, if recognized, benefit our effective income tax rate.

As of November 3, 2024 and October 29, 2023, the total accrued interest and penalties was approximately $ 701 million and $ 389 million, respectively.

The increase in total accrued interest and penalties was primarily the result of the VMware acquisition in addition to the current year accrual.

As of November 3, 2024 and October 29, 2023, approximately $ 6,544 million and $ 5,044 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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Semiconductor solutions .

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

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

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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Infrastructure software.

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

We provide a portfolio of software solutions that help enterprises simplify their IT environments so they can increase business velocity and flexibility, and enable customers to plan, develop, deliver, automate, manage and secure applications across mainframe, distributed, edge, mobile, and private and hybrid cloud platforms.

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

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

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

Shared expenses are primarily allocated based on revenue and headcount.

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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.

One customer accounted for 18 % and 21 % of our net accounts receivable balance as of November 3, 2024 and October 29, 2023, respectively.

During fiscal years 2024, 2023 and 2022, one customer accounted for 28 %, 21 % and 20 % of our net revenue, respectively.

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Commitments and Contingencies

The following table summarizes contractual obligations and commitments as of October 29, 2023:

The following table summarizes contractual obligations and commitments as of November 3, 2024:

Purchase Commitments Other Contractual Commitments

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

Due to the inherent uncertainty with respect to the timing of future cash outflows associated with our unrecognized tax benefits at November 3, 2024, we are unable to reliably estimate the timing of cash settlement with the respective taxing authorities.

Therefore, $ 3,669 million of unrecognized tax benefits and accrued interest and penalties as of November 3, 2024 have been excluded from the table above.

Contingencies

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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.

Regardless of the merit or resolution of any such litigation, complex IP litigation is generally costly and diverts the efforts and attention of our management and technical personnel.

Lawsuits Relating to California Institute of Technology

California Institute of Technology ("Caltech") filed a complaint against Broadcom and Apple Inc.

on May 26, 2016 in the United States District Court for the Central District of California (the “U.S.

Central District Court”), and an amended complaint adding Cypress Semiconductor Corporation as a defendant on August 15, 2016.

The amended complaint alleged that chips that support certain error correction codes as specified in IEEE Standards 802.11n and 802.11ac willfully infringed four patents related to error correction coding:

and 8,284,833 (“’833 patent”).

Prior to trial, Caltech dismissed its claims against Cypress and withdrew its infringement allegations as to ‘833 patent.

The complaint sought a preliminary and permanent injunction, damages, pre- and post-judgment interest, as well as attorneys’ fees, costs, and expenses.

The trial was held in January 2020, and on January 29, 2020, the jury issued its verdict finding infringement and awarding Caltech past damages of $ 270.2 million from Broadcom and $ 837.8 million from Apple, for which Apple is seeking indemnification from Broadcom.

On August 3, 2020, the U.S.

Central District Court issued its judgment, awarding Caltech past damages in the amounts awarded by the jury, as well as pre- and post-judgment interest.

Additionally, the U.S.

Central District Court awarded Caltech an unspecified amount of ongoing royalties to be determined after the anticipated appeals process is resolved.

Neither the jury nor the U.S.

Central District Court found willful infringement, which if it had, could have resulted in 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”).

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.

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.

Lawsuits Relating to VMware Backlog

On March 31, 2020, a securities class action lawsuit was filed against VMware and certain former officers of VMware in the United States District Court for the Northern District of California (the “California Court”).

On September 18, 2020, the plaintiffs filed a consolidated amended complaint alleging that VMware’s statements about backlog and the related internal controls during the period from August 2018 through February 2020 were materially misleading.

The defendants filed a motion to dismiss, which was granted with leave to amend on September 10, 2021.

On October 8, 2021, the plaintiffs filed their Second Amended Consolidated Complaint based on the same alleged disclosure deficiencies.

The defendants’ motion to dismiss the Second Amended Consolidated Complaint was filed on November 5, 2021.

On April 2, 2023, the California Court denied the defendants’ motion to dismiss finding that the plaintiffs had adequately stated claims under Sections 10 and 20A of the Securities Exchange Act of 1934.

The parties have agreed to settlement terms pending approval by the California Court.

Other Matters

In addition to the matters discussed above, we are currently engaged in a number of legal actions in the ordinary course of our business.

We are currently engaged in a number of legal actions in the ordinary course of our business.

Contingency Assessment

We do not believe, based on currently available facts and circumstances, that the final outcome of any pending legal proceedings or ongoing regulatory investigations, taken individually or as a whole, will have a material adverse effect on our consolidated financial statements.

We do not believe, based on currently available facts and circumstances, that the final outcome of any pending legal proceedings, ongoing regulatory investigations or tax disputes, taken individually or as a whole, will have a material adverse effect on our consolidated financial statements.

However, lawsuits may involve complex questions of fact and law and may require the expenditure of significant funds and other resources to defend.

The results of litigation or regulatory investigations are inherently uncertain, and material adverse outcomes are possible.

The results of litigation, regulatory investigations or tax disputes are inherently uncertain, and material adverse outcomes are possible.

From time to time, we may enter into confidential discussions regarding the potential settlement of such lawsuits.

Any settlement of pending litigation could require us to incur substantial costs and other ongoing expenses, such as future royalty payments in the case of an IP dispute.

During the periods presented, no material amounts have been accrued or disclosed in the accompanying consolidated financial statements with respect to loss contingencies associated with any other legal proceedings or regulatory investigations, as potential losses for such matters are not considered probable and ranges of losses are not reasonably estimable.

During the periods presented, no material amounts have been accrued or disclosed in the accompanying consolidated financial statements with respect to loss contingencies associated with any other legal proceedings, regulatory investigations or tax disputes as potential losses for such matters are not considered probable and ranges of losses are not reasonably estimable.

These matters are subject to many uncertainties and the ultimate outcomes are not predictable.

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Restructuring Charges

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.

These charges were primarily recognized in operating expenses.

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

Employee Termination Costs Other Exit Costs

Employee Termination Costs Lease and Impairment Costs

(In millions)

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

Balance as of October 31, 2021 $ 4 $ — $ 4

Restructuring charges 24 38 62

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Utilization ( 1,393 ) ( 277 ) ( 1,670 )

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

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.

Balance as of November 3, 2024

$ 119 $ — $ 119

In connection with the VMware Merger, we initiated restructuring activities to integrate the acquired business, align our workforce and improve efficiencies in our operations.

Restructuring charges in fiscal year 2024 primarily related to employee termination costs.

We also incurred $ 277 million of impairment charges primarily related to lease assets and property, plant and equipment.

We expect these restructuring activities to be substantially completed by the end of fiscal year 2025.

These charges were recognized primarily in operating expenses.

During fiscal year 2023, we incurred $ 24 million of impairment charges primarily related to lease assets and property, plant and equipment.

During fiscal year 2022, we incurred $ 38 million of impairment charges related to lease assets.

As of November 3, 2024 and October 29, 2023, short-term and long-term lease liabilities included $ 192 million and $ 44 million of obligations related to restructured leases, respectively.

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.

Restructuring and other charges in our consolidated statement of operations for fiscal year 2023 included $ 204 million of non-recurring charges related to IP litigation .

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.

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.

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.

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

7 unchanged sentences

Distributor credit allowances (a)

Fiscal year ended October 29, 2023

Fiscal year ended November 3, 2024

$ 133 $ 351 $ ( 390 ) $ 94

4 unchanged sentences

Other accounts receivable allowances (b)

Fiscal year ended October 29, 2023

Fiscal year ended November 3, 2024

$ 4 $ 17 $ ( 10 ) $ 11

4 unchanged sentences

Income tax valuation allowances:

Fiscal year ended October 29, 2023

Fiscal year ended November 3, 2024

$ 1,789 $ 3,151 $ ( 2,722 ) $ 2,218

9 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