Upgrade to SI Premium - Free Trial

Avago Technologies Limited Announces Fourth Quarter and Fiscal Year 2015 Financial Results

December 2, 2015 4:01 PM

SAN JOSE, Calif., and SINGAPORE, Dec. 02, 2015 (GLOBE NEWSWIRE) -- Avago Technologies Limited (Nasdaq: AVGO), a leading semiconductor device supplier to the wireless, enterprise storage, wired, and industrial end markets, today reported financial results for the fourth fiscal quarter and fiscal year ended November 1, 2015, and provided guidance for the first quarter of its fiscal year 2016.

Basis of Presentation

Avago’s financial results include results from LSI Corporation’s (“LSI”) continuing operations starting the third fiscal quarter of 2014, from PLX Technology Inc. starting in the fourth fiscal quarter of 2014, and from Emulex Corporation (“Emulex”) starting the third fiscal quarter of 2015, in each case from the date of their acquisition. The financial results from businesses that have been classified as discontinued operations in the Company’s financial statements are not included in the results presented below, unless otherwise stated.

Fourth Quarter Fiscal Year 2015 GAAP Results

Net revenue was $1,840 million, an increase of 6 percent from $1,735 million in the previous quarter and an increase of 16 percent from $1,590 million in the same quarter last year.

Gross margin was $997 million, or 54 percent of net revenue. This compares with gross margin of $884 million, or 51 percent of net revenue last quarter, and gross margin of $788 million, or 50 percent of net revenue in the same quarter last year.

Operating expenses were $483 million. This compares with $585 million in the prior quarter and $487 million for the same quarter last year.

Operating income was $514 million, or 28 percent of net revenue. This compares with operating income of $299 million, or 17 percent of net revenue, in the prior quarter, and $301 million, or 19 percent of net revenue, in the same quarter last year.

Net income, which includes the impact of discontinued operations, was $429 million, or $1.49 per diluted share. This compares with net income of $240 million, or $0.84 per diluted share, for the prior quarter, and $135 million, or $0.50 per diluted share in the same quarter last year.

The Company’s cash balance at the end of the fourth fiscal quarter was $1,822 million, compared to $1,354 million at the end of the prior quarter.

The Company generated $582 million in cash from operations and spent $106 million on capital expenditures in the fourth fiscal quarter of 2015. In addition, during that quarter, the Company realized $47 million in net proceeds from the sale of Emulex’s prior headquarters building.

On September 30, 2015, the Company paid a cash dividend of $0.42 per ordinary share, totaling $116 million.

Fourth Quarter Fiscal Year 2015 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 $1,853 million, an increase of 6 percent from $1,750 million in the previous quarter, and an increase of 15 percent, from $1,610 million, in the same quarter last year.

Gross margin from continuing operations was $1,149 million, or 62 percent of net revenue. This compares with gross margin of $1,063 million, or 61 percent of net revenue, last quarter and gross margin of $939 million, or 58 percent of net revenue, in the same quarter last year.

Operating income from continuing operations was $811 million, or 44 percent of net revenue. This compares with operating income from continuing operations of $733 million, or 42 percent of net revenue, in the prior quarter, and $636 million, or 40 percent of net revenue, in the same quarter last year.

Net income from continuing operations was $737 million, or $2.51 per diluted share. This compares with net income of $660 million, or $2.24 per diluted share last quarter, and net income of $556 million, or $1.99 per diluted share, in the same quarter last year.

Fourth Quarter Fiscal Year 2015 Non-GAAP Results Change
(Dollars in millions, except EPS) Q4 15 Q3 15 Q4 14 Q/Q Y/Y
Net Revenue $1,853 $1,750 $1,610 +6% +15%
Gross Margin 62% 61% 58% +1ppt +4ppt
Operating Expenses $338 $330 $303 +$8M +$35M
Net Income $737 $660 $556 +$77M +$181M
Earnings Per Share - Diluted $2.51 $2.24 $1.99 +$0.27 +$0.52

“We finished fiscal 2015 on a very strong note, delivering record levels of revenue and profitability in our recently completed fourth quarter. The LSI acquisition and the synergies we have been able to realize through its integration, as well as strong year on year growth in wireless revenues were significant contributors to our 2015 results” said Hock Tan, President and CEO of Avago Technologies Limited. “We are excited by the anticipated opportunities to further increase our earnings potential in fiscal 2016 following completion of our pending Broadcom acquisition.”

Other Quarterly Data

Percentage of Net Revenue* Growth Rates
Net Revenue by Segment Q4 15 Q3 15 Q4 14 Q/Q Y/Y
Wireless Communications 37 35 39 10% 8%
Enterprise Storage 35 34 29 9% 38%
Wired Infrastructure 20 21 22 2% 7%
Industrial & Other 8 10 10 -10% -7%
* Represents percentages of non-GAAP net revenue.
Key Statistics (Dollars in millions) Q4 15 Q3 15 Q4 14
Cash From Operations $582 $592 $381
Depreciation $58 $59 $51
Amortization $192 $197 $199
Capital Expenditures $106 $148 $189
Non-GAAP Days Sales Outstanding 50 42 42
Non-GAAP Inventory Days On Hand 68 67 70

Fiscal Year 2015 Financial Results From Continuing Operations

GAAP net revenue from continuing operations was $6,824 million, an increase of 60 percent from $4,269 million in the prior year. GAAP gross margin was $3,553 million, or 52 percent of net revenue, versus $1,877 million, or 44 percent of net revenue, in fiscal year 2014. GAAP operating income was $1,632 million compared with $438 million in the prior year. GAAP net income, which includes the impact from discontinued operations, was $1,364 million, or $4.85 per diluted share. This compares with GAAP net income of $263 million, or $0.99 per diluted share, in fiscal year 2014.

Non-GAAP net revenue from continuing operations was $6,905 million, an increase of 60 percent from $4,307 million in the prior year. Non-GAAP gross margin was $4,184 million, or 61 percent of net revenue, versus $2,421 million, or 56 percent of net revenue, in fiscal year 2014. Non-GAAP operating income from continuing operations was $2,926 million. This compares with $1,521 million in the prior year. Non-GAAP net income was $2,613 million, or $8.98 per diluted share. This compares with non-GAAP net income of $1,343 million, or $4.90 per diluted share, in fiscal year 2014.

Fiscal Year 2015 Non-GAAP Results Change
(Dollars in millions, except EPS) 2015 2014 Y/Y
Net Revenue $6,905 $4,307 +60%
Gross Margin 61% 56% +5ppt
Operating Expenses $1,258 $900 +$358
Net Income $2,613 $1,343 +$1,270
Earnings Per Share - Diluted $8.98 $4.90 +$4.08

First Quarter Fiscal Year 2016 Business Outlook

Based on current business trends and conditions, the outlook for continuing operations for the first quarter of fiscal year 2016, ending January 31, 2016, is expected to be as follows:

GAAP Reconciling Items Non-GAAP
Net Revenue $1,768M +/- $25M $12M $1,780 +/- $25M
Gross Margin 52.75% +/- 1% $150M 61.00% +/- 1%
Operating Expenses $472M $158M $314M
Interest and Other $84M $47M $37M
Taxes $30M $10M $40M
Diluted Share Count 289M 6M 295M

Projected reconciling items:

Capital expenditures for the first fiscal quarter are expected to be approximately $140 million, which include the purchase of a fabrication facility in Eugene, Oregon for approximately $21 million. For the first fiscal quarter, depreciation is expected to be $61 million and amortization is expected to be $183 million.

The guidance provided above is only an estimate of what the Company believes is realizable as of the date of this release. The guidance also excludes any impact from any 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.

Avago will be meeting investors at the Barclays Global Technology, Media and Telecommunications Conference on December 9, 2015 in San Francisco. Avago will also be meeting with investors on January 5-7, 2016, at the 2016 International CES and presenting at the J.P. Morgan Tech Forum CES 2016 and the Citi Internet, Media and Telecommunication Tech Forum CES 2016 in Las Vegas.

Financial Results Conference Call

Avago Technologies Limited will host a conference call to review its financial results for the fourth quarter and fiscal year ended November 1, 2015, and to provide guidance for the first quarter of fiscal year 2016, 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 77298772. 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: 77298772. A webcast of the conference call will also be available in the “Investors” section of Avago’s website at www.avagotech.com.

Non-GAAP Financial Measures

In addition to GAAP reporting, Avago 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 of purchase accounting on revenues, and excludes amortization of intangible assets, share-based compensation expense, restructuring and asset impairment charges, acquisition-related costs, including integration costs, purchase accounting effect on inventory, write-off of debt issuance costs, gain on extinguishment of debt, income (loss) from and gain (loss) on 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. The presentation of these and other similar items in Avago’s non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent or unusual. Avago 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.

About Avago Technologies LimitedAvago Technologies Limited is a leading designer, developer and global supplier of a broad range of analog, digital, mixed signal and optoelectronics components and subsystems with a focus in III-V compound and CMOS based semiconductor design and processing. Avago’s extensive product portfolio serves four primary target markets: wireless communications, enterprise storage, wired infrastructure, and industrial and other.

Cautionary Note Regarding Forward-Looking Statements

This announcement contains forward-looking statements that address our expected future business and financial performance. These forward-looking statements are based on current expectations, estimates, forecasts and projections of future Company or industry performance, based on management’s judgment, beliefs, current trends and market conditions, and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Accordingly, we caution you not to place undue reliance on these statements. Particular uncertainties that could materially affect future results include any loss of our significant customers and fluctuations in the timing and volume of significant customer demand; risks associated with our pending acquisition of Broadcom Corporation (“Broadcom”), including (1) the risk that the conditions to the closing of the transaction are not satisfied; (2) litigation challenging the transaction; (3) uncertainties as to the timing of the consummation of the transaction and the ability of each party to consummate the transaction; (4) risks that the proposed transaction disrupts our current plans and operations; (5) our ability to retain and hire key personnel; (6) competitive responses to the proposed transaction; (7) unexpected costs, charges or expenses resulting from the transaction; (8) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; (9) our ability to realize the benefits of the acquisition of Broadcom, as well as delays, challenges and expenses associated with integrating the businesses and the indebtedness planned to be incurred in connection with the transaction; and (10) legislative, regulatory and economic developments; delays, challenges and expenses associated with integrating acquired companies with our existing businesses and our ability to achieve the benefits, growth prospects and synergies expected from acquisitions we may make; our ability to increase our internal manufacturing capacity to meet customer demand; our ability to accurately estimate customers’ demand and adjust supply chain and third party manufacturing capacity accordingly; our ability to improve our manufacturing efficiency and quality; increased dependence on a small number of markets; quarterly and annual fluctuations in operating results; cyclicality in the semiconductor industry or in our target markets; global economic conditions and concerns; our competitive performance and ability to continue achieving design wins with our customers, as well as the timing of those design wins; rates of growth in our target markets; our dependence on contract manufacturing and outsourced supply chain and our ability to improve our cost structure through our manufacturing outsourcing program; prolonged disruptions of our or our contract manufacturers’ manufacturing facilities or other significant operations; 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 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; dependence on and risks associated with distributors of our products; 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; the significant indebtedness incurred by us, including the need to generate sufficient cash flows to service and repay such debt; and other events and trends on a national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature. Our Quarterly Report on Form 10-Q filed on September 10, 2015 and our other filings with the Securities and Exchange Commission, or “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.

Additional Information and Where to Find It

This document does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Pavonia Limited (“Holdco”) and Safari Cayman L.P. (“Holdco LP”) filed with the SEC a Registration Statement on Form S-4 which includes the joint proxy statement of Avago and Broadcom and also constitutes a prospectus of Holdco and Holdco LP. On or about September 29, 2015, each of Avago and Broadcom commenced mailing the joint proxy statement/prospectus in definitive form to its shareholders of record as of the close of business on September 25, 2015. Broadcom and Avago also plan to file other documents with the SEC regarding the proposed transaction. This document is not a substitute for any prospectus, proxy statement or any other document which Broadcom and Avago has filed or may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF BROADCOM AND AVAGO ARE URGED TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC’s website (www.sec.gov). In addition, investors and shareholders will be able to obtain free copies of the joint proxy statement/prospectus and other documents filed with the SEC by the parties on Broadcom’s Investor Relations website (www.broadcom.com/investors) (for documents filed with the SEC by Broadcom) or Avago Investor Relations at (408) 433-8000 or [email protected] (for documents filed with the SEC by Avago, Holdco or Holdco LP).

AVAGO TECHNOLOGIES LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(IN MILLIONS, EXCEPT PER SHARE DATA)
Fiscal Quarter Ended Fiscal Year Ended
November 1, August 2, November 2, November 1, November 2,
2015 2015 2014 2015 2014
Net revenue $ 1,840 $ 1,735 $ 1,590 $ 6,824 $ 4,269
Cost of products sold:
Cost of products sold 712 694 678 2,750 1,911
Purchase accounting effect on inventory - 26 10 30 210
Amortization of intangible assets 129 129 108 484 249
Restructuring charges 2 2 6 7 22
Total cost of products sold 843 851 802 3,271 2,392
Gross margin 997 884 788 3,553 1,877
Research and development 287 276 234 1,049 695
Selling, general and administrative 118 143 129 486 407
Amortization of intangible assets 63 68 91 249 197
Restructuring and asset impairment charges 15 98 33 137 140
Total operating expenses 483 585 487 1,921 1,439
Operating income 514 299 301 1,632 438
Interest expense (41) (43) (54) (191) (110)
Other income, net 12 11 16 26 14
Income from continuing operations before income taxes 485 267 263 1,467 342
Provision for income taxes 15 23 126 76 33
Income from continuing operations 470 244 137 1,391 309
Loss from discontinued operations, net of income taxes (41) (4) (2) (27) (46)
Net income $ 429 $ 240 $ 135 $ 1,364 $ 263
Basic income per share:
Income per share from continuing operations $ 1.70 $ 0.92 $ 0.54 $ 5.27 $ 1.23
Loss per share from discontinued operations, net of income taxes $ (0.15) $ (0.01) $ (0.01) $ (0.10) $ (0.18)
Net income per share $ 1.55 $ 0.91 $ 0.53 $ 5.17 $ 1.05
Diluted income per share:
Income per share from continuing operations $ 1.64 $ 0.85 $ 0.50 $ 4.95 $ 1.16
Loss per share from discontinued operations, net of income taxes $ (0.15) $ (0.01) $ - $ (0.10) $ (0.17)
Net income per share $ 1.49 $ 0.84 $ 0.50 $ 4.85 $ 0.99
Shares used in per share calculations:
Basic 276 265 254 264 251
Diluted 287 287 272 281 267
Share-based compensation expense included in continuing operations:
Cost of products sold $ 7 $ 7 $ 6 $ 26 $ 18
Research and development 30 31 19 107 57
Selling, general and administrative 26 25 24 99 78
Total share-based compensation expense $ 63 $ 63 $ 49 $ 232 $ 153

AVAGO TECHNOLOGIES LIMITED
FINANCIAL RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED
(IN MILLIONS, EXCEPT DAYS)
Fiscal Quarter Ended Fiscal Year Ended
November 1, August 2, November 2, November 1, November 2,
2015 2015 2014 2015 2014
Net revenue on GAAP basis $ 1,840 $ 1,735 $ 1,590 $ 6,824 $ 4,269
Acquisition-related purchase accounting revenue adjustment 13 15 20 81 38
Net revenue on non-GAAP basis $ 1,853 $ 1,750 $ 1,610 $ 6,905 $ 4,307
Gross margin on GAAP basis $ 997 $ 884 $ 788 $ 3,553 $ 1,877
Acquisition-related purchase accounting revenue adjustment 13 15 20 81 38
Purchase accounting effect on inventory - 26 10 30 210
Amortization of intangible assets 129 129 108 484 249
Share-based compensation expense 7 7 6 26 18
Restructuring charges 2 2 6 7 22
Acquisition-related costs 1 - 1 3 7
Gross margin on non-GAAP basis $ 1,149 $ 1,063 $ 939 $ 4,184 $ 2,421
Research and development on GAAP basis $ 287 $ 276 $ 234 $ 1,049 $ 695
Share-based compensation expense 30 31 19 107 57
Acquisition-related costs - - 1 9 6
Research and development on non-GAAP basis $ 257 $ 245 $ 214 $ 933 $ 632
Selling, general and administrative expense on GAAP basis $ 118 $ 143 $ 129 $ 486 $ 407
Share-based compensation expense 26 25 24 99 78
Acquisition-related costs 11 33 16 62 61
Selling, general and administrative expense on non-GAAP basis $ 81 $ 85 $ 89 $ 325 $ 268
Total operating expenses on GAAP basis $ 483 $ 585 $ 487 $ 1,921 $ 1,439
Amortization of intangible assets 63 68 91 249 197
Share-based compensation expense 56 56 43 206 135
Restructuring and asset impairment charges 15 98 33 137 140
Acquisition-related costs 11 33 17 71 67
Total operating expenses on non-GAAP basis $ 338 $ 330 $ 303 $ 1,258 $ 900
Operating income on GAAP basis $ 514 $ 299 $ 301 $ 1,632 $ 438
Acquisition-related purchase accounting revenue adjustment 13 15 20 81 38
Purchase accounting effect on inventory - 26 10 30 210
Amortization of intangible assets 192 197 199 733 446
Share-based compensation expense 63 63 49 232 153
Restructuring and asset impairment charges 17 100 39 144 162
Acquisition-related costs 12 33 18 74 74
Operating income on non-GAAP basis $ 811 $ 733 $ 636 $ 2,926 $ 1,521
Other income, net on GAAP basis $ 12 $ 11 $ 16 $ 26 $ 14
Write-off of debt issuance costs - - - 13 -
Other (2) (3) - (5) -
Other income, net on non-GAAP basis $ 10 $ 8 $ 16 $ 34 $ 14
Income from continuing operations before income taxes on GAAP basis $ 485 $ 267 $ 263 $ 1,467 $ 342
Acquisition-related purchase accounting revenue adjustment 13 15 20 81 38
Purchase accounting effect on inventory - 26 10 30 210
Amortization of intangible assets 192 197 199 733 446
Share-based compensation expense 63 63 49 232 153
Restructuring and asset impairment charges 17 100 39 144 162
Acquisition-related costs 12 33 18 74 74
Write-off of debt issuance costs - - - 13 -
Other (2) (3) - (5) -
Income before income taxes on non-GAAP basis $ 780 $ 698 $ 598 $ 2,769 $ 1,425
Provision for income taxes on GAAP basis $ 15 $ 23 $ 126 $ 76 $ 33
Income tax effects of non-GAAP reconciling adjustments 28 15 (84) 80 49
Provision for income taxes on non-GAAP basis $ 43 $ 38 $ 42 $ 156 $ 82
Net income on GAAP basis $ 429 $ 240 $ 135 $ 1,364 $ 263
Acquisition-related purchase accounting revenue adjustment 13 15 20 81 38
Purchase accounting effect on inventory - 26 10 30 210
Amortization of intangible assets 192 197 199 733 446
Share-based compensation expense 63 63 49 232 153
Restructuring and asset impairment charges 17 100 39 144 162
Acquisition-related costs 12 33 18 74 74
Write-off of debt issuance costs - - - 13 -
Other (2) (3) - (5) -
Income tax effects of non-GAAP reconciling adjustments (28) (15) 84 (80) (49)
Discontinued operations, net of income taxes 41 4 2 27 46
Net income on non-GAAP basis $ 737 $ 660 $ 556 $ 2,613 $ 1,343
Shares used in per share calculation - diluted on GAAP basis 287 287 272 281 267
Non-GAAP adjustment 7 7 8 10 7
Shares used in per share calculation - diluted on non-GAAP basis(1) 294 294 280 291 274
Days sales outstanding on GAAP basis 50 43 45
Non-GAAP adjustment - (1) (3)
Days sales outstanding on non-GAAP basis(2) 50 42 42
Inventory Days on Hand on GAAP basis 67 64 69
Non-GAAP adjustment 1 3 1
Inventory Days on Hand on non-GAAP basis(3) 68 67 70
(1) The number of shares used in the diluted per share calculations on a non-GAAP basis 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.
(2) Days sales outstanding on a non-GAAP basis includes the impact of the acquisition-related purchase accounting revenue adjustment and excludes the impact of accounts receivable related to discontinued operations.
(3) Inventory days on hand on a non-GAAP basis excludes the impact of purchase accounting on inventory, amortization of intangible assets, share-based compensation expense, restructuring charges, acquisition-related costs, and cost of products sold attributable to discontinued operations.

AVAGO TECHNOLOGIES LIMITED
GAAP AND NON-GAAP NET REVENUE BY SEGMENT - UNAUDITED
(IN MILLIONS, EXCEPT PERCENTAGES)
Fiscal Quarter Ended
November 1, August 2, November 2,
2015 2015 2014 Growth Rates
GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP
Net revenue by segment: Q/Q Y/Y Q/Q Y/Y
Wireless Communications$ 680 37%$ 680 37%$ 616 36%$ 616 35%$ 628 40% $ 628 39% 10% 8% 10% 8%
Enterprise Storage 639 35 639 35 588 34 588 34 463 29 463 29 9% 38% 9% 38%
Wired Infrastructure 378 20 378 20 372 21 372 21 352 22 352 22 2% 7% 2% 7%
Industrial & Other (1) 143 8 156 8 159 9 174 10 147 9 167 10 -10% -3% -10% -7%
Total net revenue$ 1,840 100% $ 1,853 100% $ 1,735 100% $ 1,750 100% $ 1,590 100% $ 1,610 100%
(1)Non-GAAP data includes the effect of acquisition-related purchase accounting revenue adjustment

AVAGO TECHNOLOGIES LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(IN MILLIONS)
November 1, November 2,
2015 2014 (1)
ASSETS
Current assets:
Cash and cash equivalents $ 1,822 $ 1,604
Trade accounts receivable, net 1,019 782
Inventory 524 519
Assets held-for-sale 22 628
Other current assets 388 302
Total current assets 3,775 3,835
Property, plant and equipment, net 1,460 1,158
Goodwill 1,674 1,596
Intangible assets, net 3,277 3,617
Other long-term assets 406 285
Total assets $ 10,592 $ 10,491
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 617 $ 515
Employee compensation and benefits 250 219
Other current liabilities 206 236
Current portion of long-term debt 46 46
Total current liabilities 1,119 1,016
Long-term liabilities:
Long-term debt 3,903 4,543
Convertible notes payable to related party - non-current - 920
Pension and post-retirement benefit obligations 475 506
Other long-term liabilities 381 263
Total liabilities 5,878 7,248
Shareholders' equity:
Ordinary shares, no par value 2,547 2,009
Retained earnings 2,240 1,284
Accumulated other comprehensive loss (73) (50)
Total shareholders' equity 4,714 3,243
Total liabilities and shareholders' equity $ 10,592 $ 10,491
(1) Amounts as of November 2, 2014 have been derived from audited financial statements as of that date.

AVAGO TECHNOLOGIES LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(IN MILLIONS)
Fiscal Quarter Ended Fiscal Year Ended
November 1, August 2, November 2, November 1, November 2,
2015 2015 2014 2015 2014
Cash flows from operating activities:
Net income $ 429 $ 240 $ 135 $ 1,364 $ 263
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 250 256 250 962 625
Amortization of debt issuance costs and accretion of debt discount 4 4 7 22 14
Share-based compensation 63 63 54 232 163
Tax benefits of share-based compensation 25 32 42 130 42
Excess tax from share-based compensation (23) (32) (39) (125) (39)
Non-cash portion of restructuring and asset impairment charges 2 70 9 77 9
Loss (gain) on sale of businesses 28 - (18) 14 (18)
Deferred taxes (185) (33) (72) (220) (92)
Other 8 1 (8) 28 (1)
Changes in assets and liabilities, net of acquisitions and disposals:
Trade accounts receivable, net (209) (2) (180) (187) (70)
Inventory (1) 20 (6) 62 193
Accounts payable 81 (29) 52 29 13
Employee compensation and benefits 20 29 2 8 20
Other current assets and current liabilities 12 (39) 188 (118) 219
Other long-term assets and long-term liabilities 78 12 (35) 40 (166)
Net cash provided by operating activities 582 592 381 2,318 1,175
Cash flows from investing activities:
Proceeds from sale of businesses - - 450 650 450
Acquisition of businesses, net of cash acquired - (394) (317) (394) (5,961)
Purchases of property, plant and equipment (106) (148) (189) (593) (409)
Proceeds from disposals of property, plant and equipment 47 - - 110 -
Purchases of investments (5) - - (14) -
Proceeds from sale of investments - - 21 - 35
Net cash used in investing activities (64) (542) (35) (241) (5,885)
Cash flows from financing activities:
Debt repayments (12) (1,010) (12) (1,639) (12)
Payment of assumed debt - (178) - (178) -
Proceeds from term loan borrowings - - - - 4,600
Proceeds from issuance of convertible senior notes - - - - 1,000
Debt issuance costs - - - - (124)
Issuance of ordinary shares 55 56 38 241 124
Dividend payments to shareholders (116) (104) (81) (408) (284)
Repurchases of ordinary shares - - - - (12)
Excess tax from share-based compensation 23 32 39 125 39
Other - - (3) - (2)
Net cash (used in) provided by financing activities (50) (1,204) (19) (1,859) 5,329
Net change in cash and cash equivalents 468 (1,154) 327 218 619
Cash and cash equivalents at beginning of period 1,354 2,508 1,277 1,604 985
Cash and cash equivalents at end of period $ 1,822 $ 1,354 $ 1,604 $ 1,822 $ 1,604 
Contacts:
Avago Technologies Limited
Ashish Saran
Investor Relations
+1 408 433 8000
[email protected]

Source: Avago Technologies U.S. Inc.

Categories

Press Releases

Next Articles