Form 8-K Broadcom Ltd For: Dec 04 Filed by: Broadcom Cayman L.P.

December 6, 2017 4:11 PM

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 6, 2017 (December 4, 2017)

 

 

Broadcom Limited

Broadcom Cayman L.P.

(Exact name of registrant as specified in its charter)

 

 

 

Singapore

Cayman Islands

 

001-37690

333-205938-01

 

98-1254807

98-1254815

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

Broadcom Limited

1 Yishun Avenue 7

Singapore 768923

Broadcom Cayman L.P.

c/o Broadcom Limited

1 Yishun Avenue 7

Singapore 768923

  N/A
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (65) 6755-7888

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On December 6, 2017, Broadcom Limited (“Broadcom” or the “Company”) issued a press release announcing its unaudited financial results for the fourth quarter and fiscal year ended October 29, 2017. The Company will host an investor conference call on December 6, 2017 at 2:00 p.m. Pacific Time to discuss these results.

The foregoing description is qualified in its entirety by reference to the press release dated December 6, 2017, a copy of which is attached hereto as Exhibit 99.1.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(d) On December 4, 2017, the Board of Directors of the Company (the “Board”) appointed Gayla J. Delly as an independent director of the Company, and a member of each of the Board’s Audit Committee and Nominating and Corporate Governance Committee.

Ms. Delly served as Chief Executive Officer of Benchmark Electronics Inc., a company that provides contract manufacturing, design, engineering, test and distribution services to manufacturers of computers, medical devices, telecommunications equipment and industrial control and test instruments, from January 2012 to September 2016. At Benchmark Electronics Inc., she previously served as President from 2006 to December 2011, Executive Vice President and Chief Financial Officer from 2001 to 2006, and as Corporate Controller and Treasurer from 1995 to 2001. Ms. Delly is a certified public accountant and was a senior audit manager at KPMG before joining Benchmark. Ms. Delly serves as an independent director of Flowserve Corporation, a public company listed on the New York Stock Exchange, and serves as chair of Flowserve’s audit committee and a member of its corporate governance and nominating committee. Ms. Delly’s qualifications to serve on the Board include her leadership experience in senior executive and financial management positions, her international manufacturing experience, her education and experience as an accounting professional, and her experience serving as a director of other public companies.

Ms. Delly will participate in the non-employee director compensation arrangements generally applicable to all of the Company’s non-employee directors. Under the terms of those arrangements, as currently in effect, Ms. Delly received an initial restricted share unit award with a value of $66,558 on December 4, 2017, her first date of service as a director, which will vest in full on the earlier of (i) the first anniversary of the grant date and (ii) the date on which the annual general meeting of Company shareholders immediately following the grant date is held, subject to Ms. Delly’s continuing service on the vesting date. The number of shares subject to this award was determined by dividing the value of the award by the average of the Company’s per share closing market prices, as quoted on the Nasdaq Global Select Market, over the 30 calendar days immediately preceding December 4, 2017. In addition, Ms. Delly will be entitled to receive the annual cash and equity compensation payable to other independent, non-employee directors of the Company. The cash and equity compensation currently payable to our non-employee directors is as set forth in the Company’s proxy statement filed with the Securities and Exchange Commission on February 17, 2017.

(e) On December 5, 2017, the Board approved the Company’s Fiscal Year 2018 Annual Performance Bonus Plan for Executive Employees (the “Plan”), which is the Company’s performance-based annual cash incentive bonus plan for its executive management employees for its fiscal year ending November 4, 2018. The terms of the Plan are substantially the same as the Fiscal Year 2017 Annual Performance Bonus Plan for Executive Employees, adopted in respect of the Company’s fiscal year ended October 29, 2017, other than with regard to the applicable annual performance metrics.

 

Item 8.01. Other Events.

On December 6, 2017, the Company announced that its Board has declared an interim cash dividend on the Company’s ordinary shares of $1.75 per share. A corresponding distribution will also be paid by Broadcom Cayman L.P. (the “Partnership”), of which the Company is the General Partner, to holders of the Partnership’s restricted exchangeable partnership units (“REUs”) in the amount of $1.75 per REU. The dividend and the distribution are both payable on December 29, 2017 to shareholders or unitholders of record, as applicable, at the close of business (5:00 p.m.), Eastern Time, on December 19, 2017.


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
No.

  

Description

99.1    Press release, dated December 6, 2017, entitled “Broadcom Limited Announces Fourth Quarter and Fiscal Year 2017 Financial Results.”

The information contained in Items 2.02 of this report, including Exhibit 99.1, shall not be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Cautionary Note Regarding Forward-Looking Statements

This announcement contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning Broadcom. These statements include, but are not limited to, statements that address our expected future business and financial performance and statements about (i) the proposed transaction involving Broadcom and Qualcomm Incorporated, or Qualcomm, and the expected benefits of the proposed transaction; (ii) the expected benefits of acquisitions, (iii) our plans, objectives and intentions with respect to future operations and products, (iv) our competitive position and opportunities, (v) the impact of acquisitions on the market for our products, and (vi) other statements identified by words such as “will”, “expect”, “believe”, “anticipate”, “estimate”, “should”, “intend”, “plan”, “potential”, “predict” “project”, “aim”, and similar words, phrases or expressions. These forward-looking statements are based on current expectations and beliefs of the management of Broadcom, as well as assumptions made by, and information currently available to, such management, current market trends and market conditions and involve risks and uncertainties, many of which are outside the Company’s and management’s control, and which may cause actual results to differ materially from those contained in forward-looking statements. Accordingly, you should not place undue reliance on such statements.

Particular uncertainties that could materially affect future results include risks associated with our proposal to acquire Qualcomm, including: (i) uncertainty regarding the ultimate outcome or terms of any possible transaction between Broadcom and Qualcomm, including as to whether Qualcomm will cooperate with us regarding the proposed transaction; (ii) the effects of the announcement of the proposed transaction on the ability of Broadcom and Qualcomm to retain customers, to retain and hire key personnel and to maintain favorable relationships with suppliers or customers; (iii) the timing of the proposed transaction; (iv) the ability to obtain regulatory approvals and satisfy other closing conditions to the completion of the proposed transaction (including shareholders approvals); and (v) other risks related to the completion of the proposed transaction and actions related thereto; loss of our significant customers and fluctuations in the timing and volume of significant customer demand; our dependence on contract manufacturers and outsourced supply chain; our dependency on a limited number of suppliers; any acquisitions we may make, such as delays, challenges and expenses associated with receiving governmental and regulatory approvals and satisfying other closing conditions, and with integrating acquired companies with our existing businesses and our ability to achieve the benefits, growth prospects and synergies expected from such acquisitions, including our acquisition of Brocade; our ability to accurately estimate customers’ demand and adjust our manufacturing and supply chain accordingly; our significant indebtedness, including the need to generate sufficient cash flows to service and repay such debt; increased dependence on a small number of markets and the rate of growth in these markets; dependence on and risks associated with distributors of our products; dependence on senior management; quarterly and annual fluctuations in operating results; global economic conditions and concerns; our proposed redomiciliation of our ultimate parent company to the United States; our competitive performance and ability to continue achieving design wins with our customers, as well as the timing of those design wins; prolonged disruptions of our or our contract manufacturers’ manufacturing facilities or other significant operations; our ability to improve our manufacturing efficiency and quality; our dependence on outsourced service providers for certain key business services and their ability to execute to our requirements; our ability to maintain or improve gross margin; our effective tax rate, legislation that may impact our effective tax rate and our ability to maintain tax concessions in certain jurisdictions; our ability to protect our intellectual property and the unpredictability of any associated litigation expenses; any expenses or reputational damage associated with resolving customer product and warranty and indemnification claims; cyclicality in the semiconductor industry or in our target markets; our ability to sell to new types of customers and to keep pace with technological advances; market acceptance of the end products into which our products are designed; and other events and trends on a national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature.


Our filings with the Securities and Exchange Commission (“SEC”), which you may obtain for free at the SEC’s website at http://www.sec.gov, discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no intent or obligation to publicly update or revise any of these forward looking statements, whether as a result of new information, future events or otherwise, except as required by law.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: December 6, 2017

 

Broadcom Limited
By:  

/s/ Thomas H. Krause, Jr.

Name:   Thomas H. Krause, Jr.
Title:   Vice President and Chief Financial Officer

Broadcom Cayman L.P., by its general partner

Broadcom Limited

By:  

/s/ Thomas H. Krause, Jr.

Name:   Thomas H. Krause, Jr.
Title:   Vice President and Chief Financial Officer

Exhibit 99.1

Broadcom Limited Announces Fourth Quarter and

Fiscal Year 2017 Financial Results and Interim Dividend

 

    Quarterly interim dividend increased by 72 percent to $1.75 per share from the prior quarter

 

    Long term free cash flow target increased from 35 percent to 40 percent of net revenue

 

    Quarterly GAAP gross margin of 49.2 percent; Quarterly non-GAAP gross margin from continuing operations of 63.3 percent

 

    Quarterly GAAP diluted earnings per share of $1.50; Quarterly non-GAAP diluted earnings per share from continuing operations of $4.59

SAN JOSE, Calif., and SINGAPORE – December 6, 2017 – Broadcom Limited (Nasdaq: AVGO), a leading semiconductor device supplier to the wired, wireless, enterprise storage, and industrial end markets, today reported financial results for the fourth fiscal quarter and fiscal year ended October 29, 2017, and provided guidance for the first quarter of its fiscal year 2018. The Company completed its acquisition of Brocade Communications Systems, Inc. on November 17, 2017. The financial results provided below for the fourth quarter and fiscal year 2017 do not include any contribution from Brocade.

Fourth Quarter Fiscal Year 2017 GAAP Results

Net revenue was $4,844 million, an increase of 9 percent from $4,463 million in the previous quarter and an increase of 17 percent from $4,136 million in the same quarter last year.

Gross margin was $2,383 million, or 49.2 percent of net revenue. This compares with gross margin of $2,149 million, or 48.2 percent of net revenue, in the prior quarter, and gross margin of $2,171 million, or 52.5 percent of net revenue, in the same quarter last year.

Operating expenses were $1,518 million. This compares with $1,501 million in the prior quarter and $1,790 million for the same quarter last year.

Operating income was $865 million, or 17.9 percent of net revenue. This compares with operating income of $648 million, or 14.5 percent of net revenue, in the prior quarter, and operating income of $381 million, or 9.2 percent of net revenue, in the same quarter last year.

Net income, which includes the impact of discontinued operations, was $671 million, or $1.50 per diluted share. This compares with net income of $507 million, or $1.14 per diluted share, for the prior quarter, and net loss of $668 million, or $1.59 per diluted share, in the same quarter last year.

Net income attributable to ordinary shares was $636 million. Net income attributable to the noncontrolling interest (restricted exchangeable limited partnership units (“REUs”)) in the Company’s subsidiary, Broadcom Cayman L.P. (the “Partnership”), was $35 million.


Fourth Quarter Fiscal Year 2017 GAAP Results

 

                       Change  

(Dollars in millions, except per share data)

   Q4 17     Q3 17     Q4 16     Q/Q     Y/Y  

Net revenue

   $ 4,844     $ 4,463     $ 4,136       +9     +17

Gross margin

     49.2     48.2     52.5     +100bps       -330bps  

Operating expenses

   $ 1,518     $ 1,501     $ 1,790     +$ 17     -$ 272  

Net income (loss)

   $ 671     $ 507     $ (668   +$ 164     +$ 1,339  

Net income (loss) attributable to noncontrolling interest

   $ 35     $ 26     $ (36   +$ 9     +$ 71  

Net income (loss) attributable to ordinary shares

   $ 636     $ 481     $ (632   +$ 155     +$ 1,268  

Earnings (loss) per share - diluted

   $ 1.50     $ 1.14     $ (1.59   +$ 0.36     +$ 3.09  

The Company’s cash and short term investment balance at the end of the fourth fiscal quarter was $11,204 million, compared to $5,449 million at the end of the prior quarter.

During the fourth quarter, the Company generated $1,959 million in cash from operations and received $3,980 million from issuance of long-term debt, and $440 million from the sale of real property. In the fourth quarter, the Company spent $233 million on capital expenditures.

On September 29, 2017, the Company paid a cash dividend of $1.02 per ordinary share, totaling $416 million. On the same date, the Partnership, of which the Company is the General Partner, paid holders of REUs a corresponding distribution of $1.02 per REU, totaling $23 million.

Fourth Quarter Fiscal Year 2017 Non-GAAP Results From Continuing Operations

The differences between the Company’s GAAP and non-GAAP results are described generally under “Non-GAAP Financial Measures” below, and presented in detail in the financial reconciliation tables attached to this release.

Net revenue from continuing operations was $4,848 million, an increase of 9 percent from $4,467 million in the previous quarter, and an increase of 17 percent from $4,146 million in the same quarter last year.

Gross margin from continuing operations was $3,068 million, or 63.3 percent of net revenue. This compares with gross margin of $2,827 million, or 63.3 percent of net revenue, in the prior quarter, and gross margin of $2,522 million, or 60.8 percent of net revenue, in the same quarter last year.

Operating income from continuing operations was $2,293 million, or 47.3 percent of net revenue. This compares with operating income from continuing operations of $2,059 million, or 46.1 percent of net revenue, in the prior quarter, and $1,719 million, or 41.5 percent of net revenue, in the same quarter last year.

Net income from continuing operations was $2,091 million, or $4.59 per diluted share. This compares with net income of $1,871 million, or $4.10 per diluted share last quarter, and net income of $1,549 million, or $3.47 per diluted share, in the same quarter last year.

 

2


Fourth Quarter Fiscal Year 2017 Non-GAAP Results

 

                       Change  

(Dollars in millions, except per share data)

   Q4 17     Q3 17     Q4 16     Q/Q     Y/Y  

Net revenue

   $ 4,848     $ 4,467     $ 4,146       +9     +17

Gross margin

     63.3     63.3     60.8     —         +250bps  

Operating expenses

   $ 775     $ 768     $ 803     +$ 7     -$ 28  

Net income

   $ 2,091     $ 1,871     $ 1,549     +$ 220     +$ 542  

Earnings per share - diluted

   $ 4.59     $ 4.10     $ 3.47     +$ 0.49     +$ 1.12  

“On the heels of very strong fiscal 2017 financial results, and continuing momentum into the new fiscal year, we are increasing capital returns to our shareholders and have raised our interim quarterly dividend by 72%,” said Hock Tan, President and CEO of Broadcom Limited. “We also closed the acquisition of Brocade early in the first fiscal quarter of 2018, adding to our very successful track record of highly accretive M&A.”

Other Quarterly Data

 

     Q4 17     Q3 17     Q4 16     Growth Rates  
                                            Q/Q     Y/Y  

Net revenue by segment:

                   

Wired infrastructure

   $ 2,146        45   $ 2,208        50   $ 2,074        50     -3     3

Wireless communications

     1,796        37       1,283        29       1,346        32       40     33

Enterprise storage

     645        13       735        16       561        14       -12     15

Industrial & other

     257        5       237        5       155        4       8     66
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

     

Total net revenue

   $ 4,844        100   $ 4,463        100   $ 4,136        100    
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

     
     Q4 17     Q3 17     Q4 16     Growth Rates  
                                            Q/Q     Y/Y  

Non-GAAP net revenue by segment:

                   

Wired infrastructure (1)

   $ 2,150        45   $ 2,211        50   $ 2,077        50     -3     4

Wireless communications

     1,796        37       1,283        29       1,346        32       40     33

Enterprise storage

     645        13       735        16       561        14       -12     15

Industrial & other (1)

     257        5       238        5       162        4       8     59
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

     

Total non-GAAP net revenue

   $ 4,848        100   $ 4,467        100   $ 4,146        100    
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

     

 

  (1) Non-GAAP data include the effect of acquisition-related purchase accounting adjustments relating to licensing revenue.

 

Key Statistics (Dollars in millions)

   Q4 17      Q3 17      Q4 16  

Cash from operations

   $ 1,959      $ 1,656      $ 1,352  

Depreciation

   $ 117      $ 112      $ 118  

Amortization of acquisition-related intangible assets

   $ 1,099      $ 1,096      $ 580  

Capital expenditures

   $ 233      $ 255      $ 193  

Days sales outstanding (“DSO”)

     46        49        48  

Inventory days on hand (“DOH”)

     73        78        74  

Non-GAAP DSO

     46        49        48  

Non-GAAP Inventory DOH

     74        79        78  

 

3


Fiscal Year 2017 Financial Results From Continuing Operations

Net revenue from continuing operations was $17,636 million, an increase of 33 percent from $13,240 million in the prior year. Gross margin was $8,509 million, or 48.2 percent of net revenue, versus $5,940 million, or 44.9 percent of net revenue, in the prior year. Operating income was $2,493 million compared with an operating loss of $409 million in the prior year. Net income, which includes the impact from discontinued operations, was $1,894 million, or $4.27 per diluted share. This compares with a net loss of $1,861 million, or $4.86 per diluted share, in fiscal year 2016. Net income attributable to ordinary shares was $1,796 million in fiscal year 2017. Net income attributable to the noncontrolling interest REUs in the Partnership was $98 million.

Fiscal Year 2017 GAAP Results

 

(Dollars in millions, except per share data)

   2017     2016     Change
Y/Y
 

Net revenue

   $ 17,636     $ 13,240       +33

Gross margin

     48.2     44.9     +330bps  

Operating expenses

   $ 6,016     $ 6,349     -$ 333  

Net income (loss)

   $ 1,894     $ (1,861   +$ 3,755  

Net income (loss) attributable to noncontrolling interest

   $ 98     $ (122   +$ 220  

Net income (loss) attributable to ordinary shares

   $ 1,796     $ (1,739   +$ 3,535  

Earnings (loss) per share - diluted

   $ 4.27     $ (4.86   +$ 9.13  

Non-GAAP net revenue from continuing operations was $17,665 million, an increase of 33 percent from $13,292 million in the prior year. Non-GAAP gross margin was $11,137 million, or 63 percent of net revenue, versus $8,046 million, or 60.5 percent of net revenue, in the prior year. Non-GAAP operating income from continuing operations was $8,011 million. This compares with $5,320 million in the prior year. Non-GAAP net income was $7,255 million, or $16.02 per diluted share. This compares with non-GAAP net income of $4,672 million, or $11.45 per diluted share, in fiscal year 2016.

Fiscal Year 2017 Non-GAAP Results

 

(Dollars in millions, except per share data)

   2017     2016     Change
Y/Y
 

Net revenue

   $ 17,665     $ 13,292       +33

Gross margin

     63.0     60.5     +250bps  

Operating expenses

   $ 3,126     $ 2,726     +$ 400  

Net income

   $ 7,255     $ 4,672     +$ 2,583  

Earnings per share - diluted

   $ 16.02     $ 11.45     +$ 4.57  

 

4


First Quarter Fiscal Year 2018 Business Outlook

Due to the Company’s 52/53 week reporting cycle, fiscal year 2018 will include an extra week, compared to fiscal year 2017, which will fall in the first quarter of fiscal year 2018.

Based on current business trends and conditions, the outlook for continuing operations for the first quarter of fiscal year 2018, ending February 4, 2018, including the projected partial quarter contribution from the acquired Brocade Fibre Channel Storage Area Networking business, is expected to be as follows:

 

     GAAP      Reconciling Items      Non-GAAP  

Net revenue

   $ 5,296M +/-$75M      $ 4M      $ 5,300M +/-$75M  

Gross margin

     47.75% +/-1%        $864M        64.0% +/-1%  

Operating expenses

   $ 1,760M      $ 860M      $ 900M  

Interest expense and other

   $ 161M      $ 35M      $ 126M  

Provision for income taxes

   $ 22M      $ 84M      $ 106M  

Diluted share count

     427M        31M        458M  

 

  Non-GAAP net revenue includes $4 million of licensing revenue not included in GAAP revenue, as a result of the effects of purchase accounting for acquisitions;

 

  Non-GAAP gross margin includes the effects of $4 million of licensing revenue, and excludes the effects of $730 million of amortization of intangible assets, $90 million of charges related to inventory step-up to fair value, $20 million of share-based compensation expense, and $20 million of restructuring charges;

 

  Non-GAAP operating expenses exclude $340 million of amortization of intangible assets, $280 million of share-based compensation expense, $145 million of restructuring charges, and $95 million of acquisition-related costs;

 

  Non-GAAP tax provision is $84 million higher than GAAP due to the tax effects of the projected reconciling items noted above;

 

  Non-GAAP interest expense and other excludes $35 million of debt-related costs; and

 

  Non-GAAP diluted share count includes the impact of the REUs on an if-converted basis, which were not included in projected GAAP diluted share count because their effect is expected to be antidilutive, and excludes the impact of share-based compensation expense expected to be incurred in future periods and not yet recognized in the Company’s financial statements, which would otherwise be assumed to be used to repurchase shares under the GAAP treasury stock method.

Capital expenditures for the first fiscal quarter are expected to be approximately $210 million. For the first fiscal quarter, depreciation is expected to be $130 million and amortization is expected to be approximately $1,070 million.

 

5


The guidance provided above is only an estimate of what the Company believes is realizable as of the date of this release. Among other things, this guidance is based on an initial estimate of purchase accounting adjustments and allocations, all of which are subject to revision. The guidance also excludes the impact of any additional mergers, acquisitions and divestiture activity that may occur during the quarter. Actual results will vary from the guidance and the variations may be material. The Company undertakes no intent or obligation to publicly update or revise any of these projections, whether as a result of new information, future events or otherwise, except as required by law.

Update to Long Term Target Operating Model

The Company will continue to target long term annual revenue growth of 5 percent. The Company is raising its long term target for non-GAAP gross margin from greater than 60 percent to 65 percent and non-GAAP operating margin from 45 percent to 47.5 percent. The Company is also raising its long term target for free cash flow from 35 percent to 40 percent of net revenue. These targets are long term goals and should not be interpreted as guidance for either the current period or future periods.

Interim Dividend

The Company’s Board of Directors has approved a quarterly, interim cash dividend of $1.75 per ordinary share. A corresponding distribution will also be paid by the Partnership, of which the Company is the General Partner, to holders of REUs, in the amount of $1.75 per REU.

The dividend and the distribution are both payable on December 29, 2017 to shareholders or unitholders of record, as applicable, at the close of business (5:00 p.m.) Eastern Time on December 19, 2017.

Financial Results Conference Call

Broadcom Limited will host a conference call to review its financial results for the fourth quarter and fiscal year 2017, ended October 29, 2017, and to provide guidance for the first quarter of fiscal year 2018, today at 2:00 p.m. Pacific Time. Those wishing to access the call should dial (866) 310-8712; International +1 (720) 634-2946. The passcode is 7599088. A replay of the call will be accessible for one week after the call. To access the replay dial (855) 859-2056; International +1 (404) 537-3406; and reference the passcode: 7599088. A webcast of the conference call will also be available in the “Investors” section of Broadcom’s website at www.broadcom.com.

Non-GAAP Financial Measures

In addition to GAAP reporting, Broadcom provides investors with net revenue, net income, operating income, gross margin, operating expenses and other data on a non-GAAP basis. This non-GAAP information includes the effect, where applicable, of purchase accounting on revenues, and excludes amortization of acquisition-related intangible assets, share-based compensation expense, restructuring, impairment and disposal charges, acquisition-related costs, including integration costs, purchase accounting effect on inventory, debt-related costs, gain (loss) on extinguishment of debt, gain (loss) on disposition of assets, income (loss) from discontinued operations and income tax effects of non-GAAP reconciling adjustments. Management does not believe that these items are reflective of the Company’s underlying performance. However, internally, these non-GAAP measures are significant measures used by management for purposes of evaluating the core operating performance of the Company, establishing internal budgets, calculating return on investment for development programs and growth initiatives, comparing performance with internal forecasts and targeted business models, strategic planning, evaluating and valuing potential acquisition candidates and how their operations compare to the Company’s operations, and benchmarking performance externally against the Company’s competitors. The presentation of these and other similar items in Broadcom’s non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent or unusual. Broadcom believes this non-GAAP financial information provides additional insight into the Company’s on-going performance and has therefore chosen to provide this information to investors for a more consistent basis of comparison and to help them evaluate the results of the Company’s on-going operations and enable more meaningful period to period comparisons. These non-GAAP measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial data attached to this press release.

 

6


About Broadcom Limited

Broadcom Limited (NASDAQ: AVGO) is a leading designer, developer and global supplier of a broad range of digital and analog semiconductor connectivity solutions. Broadcom Limited’s extensive product portfolio serves four primary end markets: wired infrastructure, wireless communications, enterprise storage and industrial & other. Applications for our products in these end markets include: data center networking, home connectivity, set-top box, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems, and electronic displays.

Cautionary Note Regarding Forward-Looking Statements

This announcement contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning Broadcom. These statements include, but are not limited to, statements that address our expected future business and financial performance and statements about (i) the proposed transaction involving Broadcom and Qualcomm Incorporated, or Qualcomm, and the expected benefits of the proposed transaction; (ii) the expected benefits of acquisitions, (iii) our plans, objectives and intentions with respect to future operations and products, (iv) our competitive position and opportunities, (v) the impact of acquisitions on the market for our products, and (vi) other statements identified by words such as “will”, “expect”, “believe”, “anticipate”, “estimate”, “should”, “intend”, “plan”, “potential”, “predict” “project”, “aim”, and similar words, phrases or expressions. These forward-looking statements are based on current expectations and beliefs of the management of Broadcom, as well as assumptions made by, and information currently available to, such management, current market trends and market conditions and involve risks and uncertainties, many of which are outside the Company’s and management’s control, and which may cause actual results to differ materially from those contained in forward-looking statements. Accordingly, you should not place undue reliance on such statements.

 

7


Particular uncertainties that could materially affect future results include risks associated with our proposal to acquire Qualcomm, including: (i) uncertainty regarding the ultimate outcome or terms of any possible transaction between Broadcom and Qualcomm, including as to whether Qualcomm will cooperate with us regarding the proposed transaction; (ii) the effects of the announcement of the proposed transaction on the ability of Broadcom and Qualcomm to retain customers, to retain and hire key personnel and to maintain favorable relationships with suppliers or customers; (iii) the timing of the proposed transaction; (iv) the ability to obtain regulatory approvals and satisfy other closing conditions to the completion of the proposed transaction (including shareholders approvals); and (v) other risks related to the completion of the proposed transaction and actions related thereto; loss of our significant customers and fluctuations in the timing and volume of significant customer demand; our dependence on contract manufacturers and outsourced supply chain; our dependency on a limited number of suppliers; any acquisitions we may make, such as delays, challenges and expenses associated with receiving governmental and regulatory approvals and satisfying other closing conditions, and with integrating acquired companies with our existing businesses and our ability to achieve the benefits, growth prospects and synergies expected from such acquisitions, including our acquisition of Brocade; our ability to accurately estimate customers’ demand and adjust our manufacturing and supply chain accordingly; our significant indebtedness, including the need to generate sufficient cash flows to service and repay such debt; increased dependence on a small number of markets and the rate of growth in these markets; dependence on and risks associated with distributors of our products; dependence on senior management; quarterly and annual fluctuations in operating results; global economic conditions and concerns; our proposed redomiciliation of our ultimate parent company to the United States; our competitive performance and ability to continue achieving design wins with our customers, as well as the timing of those design wins; prolonged disruptions of our or our contract manufacturers’ manufacturing facilities or other significant operations; our ability to improve our manufacturing efficiency and quality; our dependence on outsourced service providers for certain key business services and their ability to execute to our requirements; our ability to maintain or improve gross margin; our effective tax rate, legislation that may impact our effective tax rate and our ability to maintain tax concessions in certain jurisdictions; our ability to protect our intellectual property and the unpredictability of any associated litigation expenses; any expenses or reputational damage associated with resolving customer product and warranty and indemnification claims; cyclicality in the semiconductor industry or in our target markets; our ability to sell to new types of customers and to keep pace with technological advances; market acceptance of the end products into which our products are designed; and other events and trends on a national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature.

Our filings with the Securities and Exchange Commission (“SEC”), which you may obtain for free at the SEC’s website at http://www.sec.gov, discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no intent or obligation to publicly update or revise any of these forward looking statements, whether as a result of new information, future events or otherwise, except as required by law.

# # #

Contacts:

Broadcom Limited

Ashish Saran

Investor Relations

+1 408 433 8000

investor.relations@broadcom.com

 

8


BROADCOM LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

(IN MILLIONS, EXCEPT PER SHARE DATA)

 

     Fiscal Quarter Ended     Fiscal Year Ended  
     October 29,     July 30,     October 30,     October 29,     October 30,  
     2017     2017     2016     2017     2016  

Net revenue

   $ 4,844     $ 4,463     $ 4,136     $ 17,636     $ 13,240  

Cost of products sold:

          

Cost of products sold

     1,798       1,658       1,639       6,593       5,295  

Purchase accounting effect on inventory

     2       1       86       4       1,185  

Amortization of acquisition-related intangible assets

     658       655       224       2,511       763  

Restructuring charges

     3       —         16       19       57  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of products sold

     2,461       2,314       1,965       9,127       7,300  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

     2,383       2,149       2,171       8,509       5,940  

Research and development

     828       827       806       3,292       2,674  

Selling, general and administrative

     194       200       224       799       806  

Amortization of acquisition-related intangible assets

     441       441       356       1,764       1,873  

Restructuring, impairment and disposal charges

     55       33       404       161       996  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     1,518       1,501       1,790       6,016       6,349  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     865       648       381       2,493       (409

Interest expense

     (119     (112     (106     (454     (585

Loss on debt extinguishment

     (7     —         (49     (166     (123

Other income, net

     16       12       9       62       10  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes

     755       548       235       1,935       (1,107

Provision for income taxes

     89       39       841       35       642  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     666       509       (606     1,900       (1,749

Income (loss) from discontinued operations, net of income taxes

     5       (2     (62     (6     (112
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     671       507       (668     1,894       (1,861

Net income (loss) attributable to noncontrolling interest

     35       26       (36     98       (122
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to ordinary shares

   $ 636     $ 481     $ (632   $ 1,796     $ (1,739
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic income (loss) per share (1):

          

Income (loss) per share from continuing operations

   $ 1.55     $ 1.19     $ (1.44   $ 4.45     $ (4.46

Income (loss) per share from discontinued operations

     0.01       (0.01     (0.15     (0.02     (0.29
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share

   $ 1.56     $ 1.18     $ (1.59   $ 4.43     $ (4.75
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted income (loss) per share (2):

          

Income (loss) per share from continuing operations

   $ 1.49     $ 1.14     $ (1.44   $ 4.28     $ (4.57

Income (loss) per share from discontinued operations

     0.01       —         (0.15     (0.01     (0.29
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share

   $ 1.50     $ 1.14     $ (1.59   $ 4.27     $ (4.86
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in per share calculations:

          

Basic

     408       407       398       405       366  

Diluted

     424       445       421       421       383  

Share-based compensation expense included in continuing operations:

          

Cost of products sold

   $ 17     $ 18     $ 14     $ 64     $ 48  

Research and development

     171       174       136       636       430  

Selling, general and administrative

     64       59       58       220       186  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total share-based compensation expense

   $ 252     $ 251     $ 208     $ 920     $ 664  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) For fiscal periods after February 1, 2016, basic income (loss) per share numerators are reduced by approximately 5% of net income (loss), attributable to noncontrolling interest. The noncontrolling interest is related to the restricted exchangeable partnership units of Broadcom Cayman L.P. (“Partnership REUs”), of which Broadcom Limited is the General Partner.
(2) For the fiscal quarters ended July 30, 2017 and October 30, 2016 and the fiscal year ended October 30, 2016, diluted income (loss) per share numerators and denominators include the impact of the noncontrolling interest, which assumes conversion of Partnership REUs to Broadcom ordinary shares. The diluted income (loss) per share calculations include approximately 22 million Partnership REUs for the fiscal quarter ended July 30, 2017, approximately 23 million Partnership REUs for the fiscal quarter ended October 30, 2016, and approximately 17 million Partnership REUs for the fiscal year ended October 30, 2016, representing an assumed conversion of 100% of the Partnership REUs under the “if converted” method.


BROADCOM LIMITED

FINANCIAL RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED

(IN MILLIONS, EXCEPT DAYS)

 

    Fiscal Quarter Ended     Fiscal Year Ended  
    October 29,     July 30,     October 30,     October 29,     October 30,  
    2017     2017     2016     2017     2016  

Net revenue on GAAP basis

  $ 4,844     $ 4,463     $ 4,136     $ 17,636     $ 13,240  

Acquisition-related purchase accounting revenue adjustment (1)

    4       4       10       29       52  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenue on non-GAAP basis

  $ 4,848     $ 4,467     $ 4,146     $ 17,665     $ 13,292  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin on GAAP basis

  $ 2,383     $ 2,149     $ 2,171     $ 8,509     $ 5,940  

Acquisition-related purchase accounting revenue adjustment (1)

    4       4       10       29       52  

Purchase accounting effect on inventory

    2       1       86       4       1,185  

Amortization of acquisition-related intangible assets

    658       655       224       2,511       763  

Share-based compensation expense

    17       18       14       64       48  

Restructuring charges

    3       —         16       19       57  

Acquisition-related costs

    1       —         1       1       1  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin on non-GAAP basis

  $ 3,068     $ 2,827     $ 2,522     $ 11,137     $ 8,046  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Research and development on GAAP basis

  $ 828     $ 827     $ 806     $ 3,292     $ 2,674  

Share-based compensation expense

    171       174       136       636       430  

Acquisition-related costs

    —         1       4       6       10  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Research and development on non-GAAP basis

  $ 657     $ 652     $ 666     $ 2,650     $ 2,234  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Selling, general and administrative expense on GAAP basis

  $ 194     $ 200     $ 224     $ 799     $ 806  

Share-based compensation expense

    64       59       58       220       186  

Acquisition-related costs

    12       25       29       103       128  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Selling, general and administrative expense on non-GAAP basis

  $ 118     $ 116     $ 137     $ 476     $ 492  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses on GAAP basis

  $ 1,518     $ 1,501     $ 1,790     $ 6,016     $ 6,349  

Amortization of acquisition-related intangible assets

    441       441       356       1,764       1,873  

Share-based compensation expense

    235       233       194       856       616  

Restructuring, impairment and disposal charges

    55       33       404       161       996  

Acquisition-related costs

    12       26       33       109       138  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses on non-GAAP basis

  $ 775     $ 768     $ 803     $ 3,126     $ 2,726  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss) on GAAP basis

  $ 865     $ 648     $ 381     $ 2,493     $ (409

Acquisition-related purchase accounting revenue adjustment (1)

    4       4       10       29       52  

Purchase accounting effect on inventory

    2       1       86       4       1,185  

Amortization of acquisition-related intangible assets

    1,099       1,096       580       4,275       2,636  

Share-based compensation expense

    252       251       208       920       664  

Restructuring, impairment and disposal charges

    58       33       420       180       1,053  

Acquisition-related costs

    13       26       34       110       139  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income on non-GAAP basis

  $ 2,293     $ 2,059     $ 1,719     $ 8,011     $ 5,320  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense on GAAP basis

  $ (119   $ (112   $ (106   $ (454   $ (585

Debt-related costs

    —         —         —         1       149  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense on non-GAAP basis

  $ (119   $ (112   $ (106   $ (453   $ (436
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income, net on GAAP basis

  $ 16     $ 12     $ 9     $ 62     $ 10  

Gain on disposition of assets

    —         —         —         (23     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income, net on non-GAAP basis

  $ 16     $ 12     $ 9     $ 39     $ 10  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes on GAAP basis

  $ 755     $ 548     $ 235     $ 1,935     $ (1,107

Acquisition-related purchase accounting revenue adjustment (1)

    4       4       10       29       52  

Purchase accounting effect on inventory

    2       1       86       4       1,185  

Amortization of acquisition-related intangible assets

    1,099       1,096       580       4,275       2,636  

Share-based compensation expense

    252       251       208       920       664  

Restructuring, impairment and disposal charges

    58       33       420       180       1,053  

Acquisition-related costs

    13       26       34       110       139  

Debt-related costs

    —         —         —         1       149  

Loss on debt extinguishment

    7       —         49       166       123  

Gain on disposition of assets

    —         —         —         (23     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes on non-GAAP basis

  $ 2,190     $ 1,959     $ 1,622     $ 7,597     $ 4,894  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Provision for income taxes on GAAP basis

  $ 89     $ 39     $ 841     $ 35     $ 642  

Income tax effects of non-GAAP reconciling adjustments

    10       49       (768     307       (420
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Provision for income taxes on non-GAAP basis

  $ 99     $ 88     $ 73     $ 342     $ 222  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) on GAAP basis

  $ 671     $ 507     $ (668   $ 1,894     $ (1,861

Acquisition-related purchase accounting revenue adjustment (1)

    4       4       10       29       52  

Purchase accounting effect on inventory

    2       1       86       4       1,185  

Amortization of acquisition-related intangible assets

    1,099       1,096       580       4,275       2,636  

Share-based compensation expense

    252       251       208       920       664  

Restructuring, impairment and disposal charges

    58       33       420       180       1,053  

Acquisition-related costs

    13       26       34       110       139  

Debt-related costs

    —         —         —         1       149  

Loss on debt extinguishment

    7       —         49       166       123  

Gain on disposition of assets

    —         —         —         (23     —    

Income tax effects of non-GAAP reconciling adjustments

    (10     (49     768       (307     420  

Discontinued operations, net of income taxes

    (5     2       62       6       112  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income on non-GAAP basis

  $ 2,091     $ 1,871     $ 1,549     $ 7,255     $ 4,672  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in per share calculation - diluted on GAAP basis

    424       445       421       421       383  

Non-GAAP adjustment (2)

    32       11       26       32       25  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in per share calculation - diluted on non-GAAP basis

    456       456       447       453       408  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Inventory days on hand on GAAP basis

    73       78       74      

Non-GAAP adjustment(3)

    1       1       4      
 

 

 

   

 

 

   

 

 

     

Inventory days on hand on non-GAAP basis

    74       79       78      
 

 

 

   

 

 

   

 

 

     

 

(1) Amounts represent licensing revenue not included in GAAP net revenue as a result of the effect of purchase accounting for acquisitions.
(2) Non-GAAP adjustment for number of shares used in the diluted per share calculations excludes the impact of share-based compensation expense expected to be incurred in future periods and not yet recognized in the financial statements, which would otherwise be assumed to be used to repurchase shares under the GAAP treasury stock method. Non-GAAP adjustment also includes the impact of Partnership REUs and equity awards, which would otherwise be antidilutive on a GAAP basis.
(3) Non-GAAP adjustment for inventory days on hand represents the impact of purchase accounting on inventory, share-based compensation expense, and acquisition-related costs.


BROADCOM LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(IN MILLIONS)

 

     October 29,     October 30,  
     2017     2016  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 11,204     $ 3,097  

Trade accounts receivable, net

     2,448       2,181  

Inventory

     1,447       1,400  

Other current assets

     724       447  
  

 

 

   

 

 

 

Total current assets

     15,823       7,125  

Long-term assets:

    

Property, plant and equipment, net

     2,599       2,509  

Goodwill

     24,706       24,732  

Intangible assets, net

     10,832       15,068  

Other long-term assets

     458       532  
  

 

 

   

 

 

 

Total assets

   $ 54,418     $ 49,966  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 1,105     $ 1,261  

Employee compensation and benefits

     626       517  

Current portion of long-term debt

     117       454  

Other current liabilities

     630       846  
  

 

 

   

 

 

 

Total current liabilities

     2,478       3,078  

Long-term liabilities:

    

Long-term debt

     17,431       13,188  

Pension and post-retirement benefit obligations

     112       531  

Other long-term liabilities

     11,101       11,293  
  

 

 

   

 

 

 

Total liabilities

     31,122       28,090  
  

 

 

   

 

 

 

Shareholders’ equity:

    

Ordinary shares

     20,505       19,241  

Accumulated deficit

     (25     (215

Accumulated other comprehensive loss

     (91     (134
  

 

 

   

 

 

 

Total Broadcom Limited shareholders’ equity

     20,389       18,892  

Noncontrolling interest

     2,907       2,984  
  

 

 

   

 

 

 

Total shareholders’ equity

     23,296       21,876  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 54,418     $ 49,966  
  

 

 

   

 

 

 


BROADCOM LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(IN MILLIONS)

 

     Fiscal Quarter Ended     Fiscal Year Ended  
     October 29,     July 30,     October 30,     October 29,     October 30,  
     2017     2017     2016     2017     2016  

Cash flows from operating activities:

          

Net income (loss)

   $ 671     $ 507     $ (668   $ 1,894     $ (1,861

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

          

Depreciation and amortization

     1,219       1,211       700       4,737       3,042  

Share-based compensation

     252       251       205       921       679  

Excess tax benefits from share-based compensation

     —         —         (21     —         (89

Deferred taxes and other non-cash taxes

     (74     12       718       (173     365  

Non-cash portion of debt extinguishment loss

     7       —         49       166       100  

Non-cash restructuring, impairment and disposal charges

     17       14       394       71       662  

Amortization of debt issuance costs and accretion of debt discount

     5       5       9       24       36  

Other

     9       13       4       7       (6

Changes in assets and liabilities, net of acquisitions and disposals:

          

Trade accounts receivable, net

     (31     (344     —         (267     (491

Inventory

     (16     (119     (92     (39     996  

Accounts payable

     (63     217       94       (97     33  

Employee compensation and benefits

     80       82       93       109       163  

Contributions to defined benefit pension plans

     (345     (5     (19     (361     (33

Other current assets and current liabilities

     29       (179     (60     (541     (98

Other long-term assets and long-term liabilities

     199       (9     (54     100       (87
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     1,959       1,656       1,352       6,551       3,411  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

          

Purchases of property, plant and equipment

     (233     (255     (193     (1,069     (723

Proceeds from disposals of property, plant and equipment

     440       1       —         441       5  

Purchases of investments

     (7     —         —         (207     (58

Proceeds from sales and maturities of investments

     200       —         15       200       104  

Acquisitions of businesses, net of cash acquired

     —         (3     —         (40     (10,055

Proceeds from sales of businesses

     —         —         200       10       898  

Other

     (4     (1     4       (9     (11
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     396       (258     26       (674     (9,840
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

          

Proceeds from issuance of long-term debt

     3,980       —         3,584       17,426       19,510  

Repayment of debt

     —         —         (3,697     (13,668     (9,842

Payment of assumed debt

     —         —         —         —         (1,475

Payment of debt issuance costs

     (1     —         (15     (24     (123

Dividend and distribution payments

     (439     (438     (213     (1,745     (750

Issuance of ordinary shares

     66       41       78       257       295  

Excess tax benefits from share-based compensation

     —         —         21       —         89  

Payment of capital lease obligations

     (6     (6     —         (16     —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     3,600       (403     (242     2,230       7,704  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net change in cash and cash equivalents

     5,955       995       1,136       8,107       1,275  

Cash and cash equivalents at the beginning of period

     5,249       4,254       1,961       3,097       1,822  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 11,204     $ 5,249     $ 3,097     $ 11,204     $ 3,097  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

          

Cash paid for interest

   $ 1     $ 206     $ 105     $ 310     $ 448  

Cash paid for income taxes

   $ 96     $ 35     $ 99     $ 349     $ 242  

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