BROADCOM INC.

FINANCIAL RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED

(IN MILLIONS)

Fiscal Quarter Ended

January 31,

November 1,

February 2,

2021

2020

2020

Gross margin on GAAP basis

$

3,952

$

3,747

$

3,264

Purchase accounting effect on inventory

-

-

11

Amortization of acquisition-related intangible assets

874

962

950

Stock-based compensation expense

32

38

43

Restructuring charges

15

5

8

Acquisition-related costs

3

6

1

Gross margin on non-GAAP basis

$

4,876

$

4,758

$

4,277

Research and development on GAAP basis

$

1,211

$

1,182

$

1,289

Stock-based compensation expense

328

318

391

Acquisition-related costs

1

1

7

Research and development on non-GAAP basis

$

882

$

863

$

891

Selling, general and administrative expense on GAAP basis

$

339

$

405

$

601

Stock-based compensation expense

84

93

111

Acquisition-related costs

41

60

175

Litigation settlements

-

-

13

Selling, general and administrative expense on non-GAAP basis

$

214

$

252

$

302

Total operating expenses on GAAP basis

$

2,115

$

2,221

$

2,550

Amortization of acquisition-related intangible assets

494

599

603

Stock-based compensation expense

412

411

502

Restructuring, impairment and disposal charges

71

35

57

Litigation settlements

-

-

13

Acquisition-related costs

42

61

182

Total operating expenses on non-GAAP basis

$

1,096

$

1,115

$

1,193

Operating income on GAAP basis

$

1,837

$

1,526

$

714

Purchase accounting effect on inventory

-

-

11

Amortization of acquisition-related intangible assets

1,368

1,561

1,553

Stock-based compensation expense

444

449

545

Restructuring, impairment and disposal charges

86

40

65

Litigation settlements

-

-

13

Acquisition-related costs

45

67

183

Operating income on non-GAAP basis

$

3,780

$

3,643

$

3,084

Interest expense on GAAP basis

$

(570)

$

(420)

$

(406)

Loss on debt extinguishment

172

16

5

Interest expense on non-GAAP basis

$

(398)

$

(404)

$

(401)

Other income (loss), net on GAAP basis

$

117

$

31

$

(4)

(Gains) losses on investments

(119)

(10)

18

Acquisition-related gain

(2)

(4)

(4)

Other income (loss), net on non-GAAP basis

$

(4)

$

17

$

10

Provision for (benefit from) income taxes on GAAP basis

$

6

$

(187)

$

(76)

Non-GAAP tax reconciling adjustments

399

578

399

Provision for income taxes on non-GAAP basis

$

405

$

391

$

323

Net income on GAAP basis

$

1,378

$

1,324

$

385

Purchase accounting effect on inventory

-

-

11

Amortization of acquisition-related intangible assets

1,368

1,561

1,553

Stock-based compensation expense

444

449

545

Restructuring, impairment and disposal charges

86

40

65

Litigation settlements

-

-

13

Acquisition-related costs

43

63

179

Loss on debt extinguishment

172

16

5

(Gains) losses on investments

(119)

(10)

18

Non-GAAP tax reconciling adjustments

(399)

(578)

(399)

Discontinued operations, net of income taxes

-

-

(5)

Net income on non-GAAP basis

$

2,973

$

2,865

$

2,370

Weighted-average shares used in per share calculations - diluted on GAAP basis

428

426

420

Non-GAAP adjustment ⁽¹⁾

22

25

31

Weighted-average shares used in per share calculations - diluted on non-GAAP basis

450

451

451

Net income on non-GAAP basis

$

2,973

$

2,865

$

2,370

Interest expense on non-GAAP basis

398

404

401

Provision for income taxes on non-GAAP basis

405

391

323

Depreciation

138

139

146

Amortization of purchased intangibles and right-of-use assets

27

28

25

Adjusted EBITDA

$

3,941

$

3,827

$

3,265

Net cash provided by operating activities

$

3,113

$

3,348

$

2,322

Purchases of property, plant and equipment

(114)

(102)

(108)

Free cash flow

$

2,999

$

3,246

$

2,214

 Fiscal Quarter
Ending 

May 2,

Expected average diluted share count:

2021

Weighted-average shares used in per share calculation - diluted on GAAP basis

430

Non-GAAP adjustment ⁽¹⁾

20

Weighted-average shares used in per share calculation - diluted on non-GAAP basis

450

(1) Non-GAAP adjustment for the number of shares used in the diluted per share calculations excludes the impact of stock-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. The non-GAAP adjustment also included the impact of Mandatory Convertible Preferred Stock that was
antidilutive on a GAAP basis. For the fiscal quarter ending May 2, 2021, the non-GAAP adjustment includes the impact of Mandatory Convertible
Preferred Stock that is expected to be antidilutive on a GAAP basis.