BROADCOM INC.

FINANCIAL RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED

(IN MILLIONS)

Fiscal Quarter Ended

October 31,

January 31,

2022

2021

2021

Gross margin on GAAP basis

$

5,049

$

4,638

$

3,952

Amortization of acquisition-related intangible assets

730

849

874

Stock-based compensation expense

36

37

32

Restructuring charges

2

-

15

Acquisition-related costs

4

3

3

Gross margin on non-GAAP basis

$

5,821

$

5,527

$

4,876

Research and development on GAAP basis

$

1,206

$

1,200

$

1,211

Stock-based compensation expense

268

279

328

Acquisition-related costs

-

-

1

Research and development on non-GAAP basis

$

938

$

921

$

882

Selling, general and administrative expense on GAAP basis

$

321

$

337

$

339

Stock-based compensation expense

83

98

84

Acquisition-related costs

11

17

41

Selling, general and administrative expense on non-GAAP basis

$

227

$

222

$

214

Total operating expenses on GAAP basis

$

1,941

$

2,057

$

2,115

Amortization of acquisition-related intangible assets

397

494

494

Stock-based compensation expense

351

377

412

Restructuring, impairment and disposal charges

17

26

71

Acquisition-related costs

11

17

42

Total operating expenses on non-GAAP basis

$

1,165

$

1,143

$

1,096

Operating income on GAAP basis

$

3,108

$

2,581

$

1,837

Amortization of acquisition-related intangible assets

1,127

1,343

1,368

Stock-based compensation expense

387

414

444

Restructuring, impairment and disposal charges

19

26

86

Acquisition-related costs

15

20

45

Operating income on non-GAAP basis

$

4,656

$

4,384

$

3,780

Interest expense on GAAP basis

$

(407)

$

(434)

$

(570)

Loss on debt extinguishment

-

23

172

Interest expense on non-GAAP basis

$

(407)

$

(411)

$

(398)

Other income (expense), net on GAAP basis

$

(14)

$

22

$

117

(Gains) losses on investments

16

(9)

(119)

Other

-

(8)

(2)

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

$

2

$

5

$

(4)

Provision for income taxes on GAAP basis

$

215

$

180

$

6

Non-GAAP tax reconciling adjustments

295

297

399

Provision for income taxes on non-GAAP basis

$

510

$

477

$

405

Net income on GAAP basis

$

2,472

$

1,989

$

1,378

Amortization of acquisition-related intangible assets

1,127

1,343

1,368

Stock-based compensation expense

387

414

444

Restructuring, impairment and disposal charges

19

26

86

Acquisition-related costs

15

20

43

Loss on debt extinguishment

-

23

172

(Gains) losses on investments

16

(9)

(119)

Other

-

(8)

-

Non-GAAP tax reconciling adjustments

(295)

(297)

(399)

Net income on non-GAAP basis

$

3,741

$

3,501

$

2,973

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

429

430

428

Non-GAAP adjustment ⁽¹⁾

17

18

22

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

446

448

450

Net income on non-GAAP basis

$

3,741

$

3,501

$

2,973

Interest expense on non-GAAP basis

407

411

398

Provision for income taxes on non-GAAP basis

510

477

405

Depreciation

136

134

138

Amortization of purchased intangibles and right-of-use assets

24

24

27

Adjusted EBITDA

$

4,818

$

4,547

$

3,941

Net cash provided by operating activities

$

3,486

$

3,541

$

3,113

Purchases of property, plant and equipment

(101)

(88)

(114)

Free cash flow

$

3,385

$

3,453

$

2,999

 Fiscal Quarter Ending 

May 1,

Expected average diluted share count ⁽²⁾ : 

2022

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

426

Non-GAAP adjustment ⁽¹⁾

16

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

442

(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. In addition, the non-GAAP adjustment includes the impact of Mandatory Convertible Preferred Stock that is antidilutive on a GAAP basis. For the fiscal quarter ending May 1, 2022, the non-GAAP adjustment includes the impact of Mandatory Convertible Preferred Stock that is expected to be antidilutive on a GAAP basis.

(2) Excludes the effects of potential share repurchases.