Avago Technologies Limited Announces Third Quarter Fiscal Year 2014 Financial Results

Avago Technologies Limited Announces Third Quarter Fiscal Year 2014 Financial
Results

  *GAAP gross margin from continuing operations of 31 percent; Non-GAAP gross
    margin from continuing operations of 57 percent
  *GAAP diluted EPS loss of $0.65; Non-GAAP diluted EPS from continuing
    operations of $1.26
  *Fourth fiscal quarter revenue from continuing operations projected to be
    up 18-22% sequentially

SAN JOSE, Calif., and SINGAPORE, Aug. 28, 2014 (GLOBE NEWSWIRE) -- Avago
Technologies Limited (Nasdaq:AVGO), a leading semiconductor device supplier to
the enterprise storage, wired, wireless and industrial end markets, today
reported financial results for the third quarter of its fiscal year 2014,
ended August 3, 2014, and provided guidance for the fourth quarter of its
fiscal year 2014.

Basis of Presentation

On May 29, 2014, Avago entered into a definitive agreement to sell LSI's flash
businesses to Seagate Technology plc and on August 13, 2014, Avago entered
into a definitive agreement to sell its Axxia networking business to Intel
Corporation, both of which transactions are currently expected to close in
Avago's fourth fiscal quarter of 2014. Therefore the financial results from
the flash and Axxia businesses, both of which were acquired by Avago in the
LSI transaction, have been classified as discontinued operations in the
Company's financial statements and the results of operations from these
businesses are not included in the results presented below, unless otherwise
indicated.

Avago's results for its third fiscal quarter of 2014 include the results from
continuing operations of the acquired LSI businesses for the full quarter,
while the prior periods presented do not, as the LSI acquisition was completed
at the beginning of the third fiscal quarter. The financial results provided
below for the third fiscal quarter do not include any operating results of PLX
Technology, Inc., which the Company acquired on August 12, 2014, after the end
of the third quarter.

Third Quarter Fiscal Year 2014 Total Revenue Compared to Guidance

Avago's guidance for its third fiscal quarter of 2014 included expected
contributions from both the flash and Axxia businesses. On a comparable basis,
including contributions from these businesses, which have been classified as
discontinued operations, GAAP net revenue for the third quarter of fiscal year
2014 would have been $1,373 million and non-GAAP net revenue would have been
$1,394 million.

Third Quarter Fiscal Year 2014 GAAP Results from Continuing Operations

Net revenue from continuing operations was $1,269 million, an increase of 81
percent compared with the previous quarter and an increase of 97 percent from
the same quarter last year.

Gross margin from continuing operations was $393 million, or 31 percent of net
revenue. This compares with gross margin of $357 million, or 51 percent of net
revenue last quarter, and gross margin of $304 million, or 47 percent of net
revenue in the same quarter last year.

Operating expenses from continuing operations were $555 million. This compares
with $197 million in the prior quarter and $164 million for the same quarter
last year.

Loss from operations was $162 million. This compares with income from
operations of $160 million in the prior quarter and with income from
operations of $140 million in the same quarter last year.

Third quarter net loss was $164 million, or ($0.65) per diluted share. This
compares with net income of $158 million, or $0.61 per diluted share, for the
prior quarter, and net income of $142 million, or $0.56 per diluted share, in
the same quarter last year.

The Company's cash balance at the end of the third fiscal quarter was $1,277
million, prior to the closing of the PLX Technology transaction, compared to
$1,278 million at the end of the prior quarter which was prior to the closing
of the LSI transaction.

The Company generated $314 million in cash from operations in the third
quarter and spent $95 million on capital expenditures.

On June 30, 2014 the Company paid a quarterly cash dividend of $0.29 per
ordinary share, totaling approximately $73 million.

Third Quarter Fiscal Year 2014 Non-GAAP Results From Continuing Operations

The differences between our 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 $1,287 million.

Gross margin from continuing operations was $735 million, or 57 percent of net
revenue. This compares with gross margin of $381 million, or 54 percent of net
revenue last quarter, and gross margin of $328 million, or 51 percent of net
revenue in the same quarter last year.

Income from continuing operations was $428 million. This compares with $233
million in the prior quarter and $191 million in the same quarter last year.

Net income from continuing operations was $347 million, or $1.26 per diluted
share. This compares with net income of $223 million, or $0.85 per diluted
share last quarter, and net income of $188 million, or $0.74 per diluted share
in the same quarter last year.

Third Quarter Fiscal Year 2014 Non-GAAP                       Change
Results
(Dollars in millions, except EPS)            Q3 14  Q2 14 Q3 13 Q/Q    Y/Y
Net Revenue                                   $1,287 $701  $644  +84%   +100%
Gross Margin                                  57%    54%   51%   +3ppt  +6ppt
Operating Expenses                            $307   $148  $137  +$159  +$170
Net Income                                    $347   $223  $188  +$124  +$159
Earnings Per Share - Diluted                  $1.26  $0.85 $0.74 +$0.41 +$0.52

"In the third fiscal quarter of the year, our first quarter operating as a
combined Avago and LSI business, we experienced strength in all our end
markets," said Hock Tan, President and CEO of Avago Technologies Limited. "We
made substantial progress integrating the two companies and took decisive
steps to reshape the business, announcing the sales of the non-core Flash and
Axxia businesses. We expect both of these actions to significantly improve our
operating performance going forward."

Other Quarterly Data

                                    Percentage of Net Revenue Growth Rates
Net Revenue by Target Market         Q3 14*    Q2 14   Q3 13   Q/Q    Y/Y
Enterprise Storage                   32        N/A     N/A     N/A    N/A
Wireless Communications              28        50      45      5%     26%
Wired Infrastructure                 27        31      31      59%    73%
Industrial & Other                   13        19      24      27%    10%
                                                                 
* Represents percentages of non-GAAP net revenue
                                                                 
Key Statistics (Dollars in millions) Q3 14     Q2 14   Q3 13         
Cash From Operations                 $314      $251    $137          
Depreciation                         $46       $35     $26           
Amortization                         $211      $26     $20           
Capital Expenditures                 $95       $73     $65           
Non-GAAP Days Sales Outstanding      39        42      52            
Non-GAAP Inventory Days On Hand      79        86      82            

Fourth Quarter Fiscal Year 2014 Business Outlook

Based on current business trends and conditions, the outlook for continuing
operations for the fourth quarter of fiscal year 2014, ending November 2,
2014, including projected contribution from the PLX Technology business, is
expected to be as follows:

                   GAAP                Reconciling Items Non-GAAP
Revenue Range       Up 18% to 22%       $20M              Up 18% to 22%
Gross Margin        46.5% plus/minus 1% $152M             56.0% plus/minus 1%
Operating Expenses  $479M               $172M             $307M
Interest and Other  $53M                                 $53M
Taxes               -$55M               $93               $38M
Diluted Share Count 271M                8M                279M

Reconciling items include:

  *Non-GAAP Revenue includes $20 million of LSI intellectual property
    licensing revenue, not included in GAAP revenue as a result of the effects
    of purchase accounting for the LSI acquisition;
  *Non-GAAP Gross Margin includes $20 million of LSI intellectual property
    licensing revenue and excludes $106 million of amortization of intangible
    assets, $6 million of share-based compensation expense, $4 million of
    restructuring charges, and $16 million of inventory step-up charges to
    record PLX inventory at fair value, as part of the purchase accounting for
    the PLX Technology acquisition;
  *Non-GAAP Operating Expenses exclude $90 million of amortization of
    intangible assets, $46 million of share-based compensation, $22 million of
    restructuring charges, and $14 million of acquisition-related costs; and
  *$93 million provision at the Taxes line, which represents the tax effects
    of the reconciling items noted above.

Capital expenditures for the fourth quarter are expected to be approximately
$220 million. For the fourth quarter depreciation is expected to be $50
million and amortization is expected to be $196 million.

The guidance provided above is only an estimate of what the Company believes
is realizable as of the date of this release, and does not include any
contribution from the Flash and Axxia businesses, which are classified as
discontinued operations. Among other things, this guidance is based on an
initial estimate of purchase accounting adjustments and allocations, for the
PLX transaction, all of which are subject to revision. The guidance also
excludes any impact from any further 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 presenting at the Deutsche Bank Technology Conference in Las
Vegas on September 10, 2014. 

Financial Results Conference Call

Avago Technologies Limited will host a conference call to review its financial
results for the third quarter fiscal year 2014, and to provide guidance for
the fourth quarter of fiscal year 2014, today at 2:00 p.m. Pacific Time. Those
wishing to access the call should dial (800) 591-6942; International +1 (617)
614-4909. The passcode is 86582481. A replay of the call will be accessible
one week after the call. To access the replay dial (888) 286-8010;
International +1 (617) 801-6888; and reference the passcode: 96631549. 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 income,
income from operations, gross margin, operating expenses and other data, on a
non-GAAP basis. This non-GAAP information includes the effect of purchase
accounting on revenues, excludes amortization of intangible assets,
share-based compensation expense, restructuring charges, acquisition-related
costs, purchase accounting effect on inventory, 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. 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 Limited

Avago Technologies Limited is a leading designer, developer and global
supplier of a broad range of analog semiconductor devices with a focus on
III-V based products and complex digital and mixed signal CMOS based devices.
Our product portfolio is extensive and includes thousands of products in four
primary target markets:enterprise storage, wired infrastructure, wireless
communications and industrial & 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 our ability to integrate and
realize the expected benefits from our acquisition of LSI Corporation ("LSI");
loss of our significant customers; global economic conditions and concerns;
cyclicality in the semiconductor industry or in our target markets; quarterly
and annual fluctuations in operating results; fluctuation in the timing and
volume of customer demand; increased dependence on the volatile, wireless
handset market and on the enterprise storage market; delays, challenges and
expenses associated with integrating acquired companies, including LSI and PLX
Technology, Inc. ("PLX"), with our existing businesses and our ability to
achieve the growth prospects and synergies expected from acquisitions we may
make, including our recent acquisitions of LSI and PLX; our competitive
performance and ability to continue achieving design wins with our customers,
as well as the timing of those design wins; market acceptance of the end
products into which our products are designed; our ability to sell to new
types of customers and to keep pace with technological advances; rates of
growth in our target markets; failure to complete our planned asset
dispositions, including the sale of LSI's flash businesses and the sale of the
Axxia products business; the significant indebtedness incurred by us in
connection with the LSI acquisition, including the need to generate sufficient
cashflows to service and repay such debt; 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 any associated increases in litigation expenses;
dependence on and risks associated with distributors of our products; any
expenses or reputational damage associated with resolving customer product and
warranty and indemnification claims; and other events and trends on a
national, regional and global scale, including those of a political, economic,
business, competitive and regulatory nature.Our Report on Form 10-Q filed on
June 10, 2014 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.

AVAGO TECHNOLOGIES LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(IN MILLIONS, EXCEPT PER SHARE DATA)
                                                               
                            Fiscal Quarter Ended      Three Fiscal Quarters
                                                         Ended
                            August 3, May 4,  August 4, August 3,  August 4,
                            2014      2014    2013      2014       2013
                                                               
Net revenue                  $1,269  $701  $644    $2,679   $1,782
Cost of products sold:                                          
Cost of products sold        560      326    321      1,233     883
Purchase accounting effect   200      --     4        200       4
on inventory
Amortization of intangible   105      18     14       141       42
assets
Restructuring charges        11       --     1        16        1
Total cost of products sold  876      344    340      1,590     930
Gross margin                 393      357    304      1,089     852
Research and development     240      114    101      461       289
Selling, general and         137      67     57       278       162
administrative
Amortization of intangible   91       8      6        106       17
assets
Restructuring charges        87       8      --       107       2
Total operating expenses     555      197    164      952       470
(Loss)/income from           (162)    160    140      137       382
operations
Interest expense             (55)     (1)    (1)      (56)      (2)
Other (expense)/income, net  (2)      --     5        (2)       8
(Loss)/income before income  (219)    159    144      79        388
taxes
(Benefit from)/provision for (99)     1      2        (93)      8
income taxes
(Loss)/income from           (120)    158    142      172       380
continuing operations
Loss from discontinued
operations, net of income    (44)     --     --       (44)      --
taxes
Net (loss)/income            $(164)  $158  $142    $128     $380
                                                               
                                                               
Basic (loss)/income per                                         
share:
(Loss)/income from           $(0.48) $0.63 $0.57   $0.69    $1.54
continuing operations
Loss from discontinued
operations, net of income    $(0.17) $--  $--    $(0.18)  $--
taxes
Net (loss)/income            $(0.65) $0.63 $0.57   $0.51    $1.54
                                                               
Diluted (loss)/income per                                       
share:
(Loss)/income from           $(0.48) $0.61 $0.56   $0.65    $1.51
continuing operations
Loss from discontinued
operations, net of income    $(0.17) $--  $--    $(0.17)  $--
taxes
Net (loss)/income            $(0.65) $0.61 $0.56   $0.48    $1.51
                                                               
Shares used in per share                                        
calculations:
Basic                        252      251    248      251       246
Diluted                      252      258    252      265       251
                                                               
Share-based compensation
expense included in                                             
continuing operations:
Cost of products sold        $6      $3    $3      $12      $7
Research and development     20       10     8        38        22
Selling, general and         24       17     9        54        26
administrative
Total share-based            $50     $30   $20     $104     $55
compensation expense
                                                               
                                                               

AVAGO TECHNOLOGIES LIMITED
NON-GAAP FINANCIAL SUMMARY- UNAUDITED (1)
(IN MILLIONS, EXCEPT PERCENTAGES AND PER SHARE DATA)
                                                              
                     Fiscal Quarter Ended           Three Fiscal Quarters
                                                       Ended
                     August 3,   May 4,    August 4,  August 3,   August 4,
                     2014        2014      2013       2014        2013
                                                              
Net revenue           $1,287    $701    $644     $2,697    $1,782
Gross margin          $735      $381    $328     $1,482    $908
% of net revenue      57%         54%       51%        55%         51%
Research and          $219      $101    $91      $418      $265
development
Selling, general and  $88       $47     $46      $179      $132
administrative
Total operating       $307      $148    $137     $597      $397
expenses
% of net revenue      24%         21%       21%        22%         22%
Income from           $428      $233    $191     $885      $511
operations
Income before income  $371      $232    $195     $827      $517
taxes
Provision for income  $24       $9      $7       $40       $13
taxes
                                                              
Net income            $347      $223    $188     $787      $504
Net income per share  $1.26     $0.85   $0.74    $2.90     $1.99
- diluted
Shares used in per
share calculation -   276        263      253       271        253
diluted
                                                              
(1) A reconciliation of the non-GAAP measures presented above to the most
directly comparable GAAP financial data appears on the next page. These
non-GAAP measures are provided in addition to and not as a substitute for
measures of financial performance prepared in accordance with GAAP.The
financial summary excludes acquisition-related revenue adjustments, purchase
accounting effect on inventory, amortization of intangible assets, share-based
compensation expense, restructuring charges, acquisition-related costs, loss
from discontinued operations and income tax effects of non-GAAP reconciling
adjustments.



AVAGO TECHNOLOGIES LIMITED
FINANCIAL RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED
(IN MILLIONS, EXCEPT DAYS)
                                                               
                         Fiscal Quarter Ended        Three Fiscal Quarters
                                                        Ended
                         August 3,  May 4,  August 4,  August 3,   August 4,
                         2014       2014    2013       2014        2013
                                                               
Net revenue on GAAP basis $1,269   $701  $644     $2,679    $1,782
Acquisition-related
purchase accounting       18        --     --        18         --
revenue adjustment
Net revenue on non-GAAP   $1,287   $701  $644     $2,697    $1,782
basis
                                                               
Net revenue on GAAP basis $1,269   $701  $644     $2,679    $1,782
Net revenue contribution
from discontinued         104       --     --        104        --
operations
Net revenue on GAAP basis
including discontinued    1,373     701    644       2,783      1,782
operations
Acquisition-related
purchase accounting       18        --     --        18         --
revenue adjustment from
continuing operations
Acquisition-related
purchase accounting       3         --     --        3          --
revenue adjustment from
discontinued operations
Net revenue on non-GAAP
basis including           $1,394   $701  $644     $2,804    $1,782
discontinued operations
                                                               
Gross margin on GAAP      $393     $357  $304     $1,089    $852
basis
Acquisition-related
purchase accounting       18        --     --        18         --
revenue adjustment
Purchase accounting       200       --     4         200        4
effect on inventory
Amortization of           105       18     14        141        42
intangible assets
Share-based compensation  6         3      3         12         7
expense
Restructuring charges     11        --     1         16         1
Acquisition-related costs 2         3      2         6          2
Gross margin on non-GAAP  $735     $381  $328     $1,482    $908
basis
                                                               
Research and development  $240     $114  $101     $461      $289
on GAAP basis
Share-based compensation  20        10     8         38         22
expense
Acquisition-related costs 1         3      2         5          2
Research and development  $219     $101  $91      $418      $265
on non-GAAP basis
                                                               
Selling, general and
administrative expense on $137     $67   $57      $278      $162
GAAP basis
Share-based compensation  24        17     9         54         26
expense
Acquisition-related costs 25        3      2         45         4
Selling, general and
administrative expense on $88      $47   $46      $179      $132
non-GAAP basis
                                                               
Total operating expenses  $555     $197  $164     $952      $470
on GAAP basis
Amortization of           91        8      6         106        17
intangible assets
Share-based compensation  44        27     17        92         48
expense
Restructuring charges     87        8      --        107        2
Acquisition-related costs 26        6      4         50         6
Total operating expenses  $307     $148  $137     $597      $397
on non-GAAP basis
                                                               
(Loss)/income from        $(162)   $160  $140     $137      $382
operations on GAAP basis
Acquisition-related
purchase accounting       18        --     --        18         --
revenue adjustment
Purchase accounting       200       --     4         200        4
effect on inventory
Amortization of           196       26     20        247        59
intangible assets
Share-based compensation  50        30     20        104        55
expense
Restructuring charges     98        8      1         123        3
Acquisition-related costs 28        9      6         56         8
Income from operations on $428     $233  $191     $885      $511
non-GAAP basis
                                                               
(Loss)/income before
income taxes on GAAP      $(219)   $159  $144     $79       $388
basis
Acquisition-related
purchase accounting       18        --     --        18         --
revenue adjustment
Purchase accounting       200       --     4         200        4
effect on inventory
Amortization of           196       26     20        247        59
intangible assets
Share-based compensation  50        30     20        104        55
expense
Restructuring charges     98        8      1         123        3
Acquisition-related costs 28        9      6         56         8
Income before income      $371     $232  $195     $827      $517
taxes on non-GAAP basis
                                                               
(Benefit from)/provision
for income taxes on GAAP  $(99)    $1    $2       $(93)     $8
basis
Income tax effects of
non-GAAP reconciling      123       8      5         133        5
adjustments
Provision for income      $24      $9    $7       $40       $13
taxes on non-GAAP basis
                                                               
Net (loss)/income on GAAP $(164)   $158  $142     $128      $380
basis
Acquisition-related
purchase accounting       18        --     --        18         --
revenue adjustment
Purchase accounting       200       --     4         200        4
effect on inventory
Amortization of           196       26     20        247        59
intangible assets
Share-based compensation  50        30     20        104        55
expense
Restructuring charges     98        8      1         123        3
Acquisition-related costs 28        9      6         56         8
Income tax effects of
non-GAAP reconciling      (123)     (8)    (5)       (133)      (5)
adjustments
Loss from discontinued
operations, net of income 44        --     --        44         --
taxes
Net income on non-GAAP    $347     $223  $188     $787      $504
basis
                                                               
Shares used in per share
calculation - diluted on  252       258    252       265        251
GAAP basis
Non-GAAP adjustment       24        5      1         6          2
Shares used in per share
calculation - diluted on  276       263    253       271        253
non-GAAP basis(1)
                                                               
Days sales outstanding on 42                                    
GAAP basis
Non-GAAP adjustment       (3)                                   
Days sales outstanding on 39                                    
non-GAAP basis(2)
                                                               
Inventory Days on Hand on 58        84     80                   
GAAP basis
Non-GAAP adjustment       21        2      2                    
Inventory Days on Hand on 79        86     82                   
non-GAAP basis(3)

(1) The number of shares used in the diluted per share calculations on a
non-GAAP basis exclude 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 TARGET MARKET - UNAUDITED
(IN MILLIONS, EXCEPT PERCENTAGES)
                                                                 
                   Fiscal Quarter Ended                              
                   August 3,                   May 4, August           
                                                       4,
                   2014                        2014   2013   Growth Rates
                   GAAP          Non-GAAP      GAAP   GAAP   GAAP    Non-GAAP
Net revenue by      $        %    $        %    $      $      Q/Q Y/Y Q/Q  Y/Y
target market:
Enterprise Storage  $404   32  $404   32  $--  $--  -- -- --  --
Wireless            364     29  364     28  348   288   5%  26% 5%   26%
Communications
Wired               352     27  349     27  219   202   61% 74% 59%  73%
Infrastructure
Industrial & Other  149     12  170     13  134   154   11% -3% 27%  10%
Total net revenue   $1,269 100 $1,287 100 $701 $644           
                                                                 
                                                                 

AVAGO TECHNOLOGIES LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(IN MILLIONS)
                                                            
                                                            
                                             August 3,       November 3,
                                             2014            2013 (1)
ASSETS                                                       
                                                            
Current assets:                                              
Cash and cash equivalents                     $1,277        $985
Trade accounts receivable, net                590            418
Inventory                                     482            285
Assets held for sale                          1,029          --
Other current assets                          442            130
Total current assets                          3,820          1,818
Property, plant and equipment, net            1,016          661
Goodwill                                      1,526          391
Intangible assets, net                        3,620          492
Other long-term assets                        320            53
Total assets                                  $10,302       $3,415
                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                         
                                                            
Current liabilities:                                         
Accounts payable                              $459          $278
Employee compensation and benefits            207            98
Current portion of long-term debt             46             --
Other current liabilities                     228            47
Total current liabilities                     940            423
                                                            
Long-term liabilities:                                       
Pension and post-retirement benefit           481            62
obligations
Long-term debt, less current portion          5,472          --
Other long-term liabilities                   311            44
Total liabilities                             7,204          529
                                                            
Shareholders' equity:                                        
Ordinary shares, no par value                 1,875          1,587
Retained earnings                             1,230          1,305
Accumulated other comprehensive loss          (7)            (6)
Total shareholders' equity                    3,098          2,886
Total liabilities and shareholders' equity    $10,302       $3,415
                                                            
(1) Amounts as of November 3, 2013 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          Three Fiscal Quarters
                                                       Ended
                      August 3,  May 4,    August 4,  August 3,   August 4,
                      2014       2014      2013       2014        2013 (1)
Cash flows from                                                
operating activities:
Net (loss) income      $(164)   $158    $142     $128      $380
                                                              
Adjustments to
reconcile net (loss)
income to net cash                                             
provided by operating
activities:
                                                              
Depreciation and       257       61       46        375        129
amortization
Share-based            55        30       20        109        55
compensation
Tax benefits of
share-based            (12)      8        6         --         6
compensation
Excess tax benefits
from share-based       11        (8)      (3)       --         (3)
compensation
Unrealized gain on     --        --       (4)       --         (5)
trading securities
Amortization of debt
discount and debt      7         --       --        7          --
issuance costs
Gain from
post-retirement
medical plan           --        --       --        (3)        --
curtailment and
settlement
Other                  10        --       3         10         4
Changes in assets and
liabilities, net of                                            
acquisitions:
Trade accounts         11        4        (43)      110        27
receivable
Inventory              215       (15)     (20)      199        (54)
Accounts payable       (23)      8        11        (39)       13
Employee compensation  30        27       16        18         14
and benefits
Other current assets
and current            43        (4)      (33)      30         (54)
liabilities
Other long-term assets
and long-term          (126)     (18)     (4)       (150)      (2)
liabilities
Net cash provided by   314       251      137       794        510
operating activities
                                                              
Cash flows from                                                
investing activities:
Purchases of property, (95)      (73)     (65)      (220)      (179)
plant and equipment
Acquisitions, net of   (5,644)   --       (372)     (5,644)    (409)
cash acquired
Purchases of           --        --       (1)       --         (10)
investments
Proceeds from sale of  --        14       --        14         --
investment
Net cash used in       (5,739)   (59)     (438)     (5,850)    (598)
investing activities
                                                              
Cash flows from                                                
financing activities:
Proceeds from          --        --       --        2          8
government grants
Proceeds from term     4,600     --       --        4,600      --
loan borrowings
Proceeds from issuance
of convertible senior  1,000     --       --        1,000      --
notes
Debt issuance costs    (124)     --       --        (124)      --
Payment on capital     (1)       --       --        (1)        (1)
lease obligation
Issuance of ordinary   33        34       32        86         60
shares
Repurchases of         --        --       (38)      (12)       (62)
ordinary shares
Excess tax benefits
from share-based       (11)      8        3         --         3
compensation
Dividend payments to   (73)      (68)     (52)      (203)      (141)
shareholders
Net cash provided by
(used in) financing    5,424     (26)     (55)      5,348      (133)
activities
                                                              
Net increase
(decrease) in cash and (1)       166      (356)     292        (221)
cash equivalents
Cash and cash
equivalents at the     1,278     1,112    1,219     985        1,084
beginning of period
Cash and cash
equivalents at end of  $1,277   $1,278  $863     $1,277    $863
period
                                                              
(1) The statement of cash flows data for three fiscal quarters ended August 4,
2013 reflects a reclassification of $3 million of government grant
reimbursements related to fixed assets from cash flows provided by operating
activities to cash flows used in financing activities. As a result, net cash
provided by operating activities and net cash used in financing activities for
this period each decreased by a corresponding amount.
                                                              

CONTACT: Avago Technologies Ltd.
         Ashish Saran
         Investor Relations
         +1 408 435 7400
         investor.relations@avagotech.com

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