- Net revenue up 13 percent sequentially to $515 million
- GAAP gross margin increased to 45.2 percent; Non-GAAP gross margin up to 48.2 percent
SAN JOSE, Calif. & SINGAPORE, May 26, 2010 (BUSINESS WIRE) --Avago Technologies Limited (Nasdaq:AVGO), a leading designer, developer and global supplier of a broad range of analog semiconductor devices with a focus on III-V based products, today reported financial results for its second quarter fiscal year 2010, ended May 2, 2010, and provided guidance for the third quarter fiscal year 2010.
Second Quarter Fiscal Year 2010 GAAP Results
Net revenue was $515 million, an increase of 13 percent compared with the previous quarter, and up 58 percent from the same quarter last year.
Gross margin was $233 million, or 45.2 percent of net revenue. This compares with gross margin of $194 million, or 42.5 percent of net revenue last quarter, and gross margin of $98 million, or 30.2 percent of net revenue in the same quarter last year.
Second quarter net income was $90 million, or $0.37 per diluted share. This compares with net income of $38 million, or $0.16 per diluted share last quarter, and a net loss of $31 million, or ($0.14) per diluted share in the same quarter last year.
The Company's cash balance at the end of the second quarter was $256 million, compared to $144 million at the end of the prior quarter. The increase in cash over the quarter is primarily due to $115 million of cash generated from operations.
Second Quarter Fiscal Year 2010 Non-GAAP Results
Gross margin was $248 million, or 48.2 percent of net revenue. This compares with gross margin of $209 million, or 45.8 percent of net revenue last quarter, and gross margin of $115 million, or 35.4 percent of net revenue in the same quarter last year.
Net income was $117 million, or $0.47 per diluted share. This compares with net income of $88 million, or $0.36 per diluted share last quarter, and a net loss of $2 million, or ($0.01) per diluted share in the same quarter last year.
Adjusted EBITDA, as defined in the indenture governing the Company's outstanding debt securities, was $154 million, compared with $122 million last quarter and $40 million in the same quarter last year.
| Second Quarter Fiscal Year 2010 Non-GAAP Results | Change | |||||||||||||||
| (Dollars in millions, except EPS) | Q2 10 | Q1 10 | Q2 09 | Q/Q | Y/Y | |||||||||||
| Net Revenue | $515 | $456 |
$325 |
+13% | +58% | |||||||||||
| Gross Margin | 48.2% | 45.8% | 35.4% | +240bps | +1280bps | |||||||||||
| Operating Expenses | $113 | $105 | $97 | +$8 | +$16 | |||||||||||
| Net Income | $117 | $88 | ($2) | +$29 | +$119 | |||||||||||
| Earnings Per Share - Diluted | $0.47 | $0.36 | ($0.01) | +$0.11 | +$0.48 | |||||||||||
"Our business continued to demonstrate strong growth in the second quarter of fiscal 2010," said Hock Tan, President and CEO of Avago Technologies Limited. "This was driven by strong industrial infrastructure spending, especially in China, and continued market acceptance of new products in several of our target markets."
|
Other Quarterly Data |
||||||||||||||||
| Percentage of Net Revenue | Growth Rates | |||||||||||||||
| Net Revenues by Target Market | Q2 10 | Q1 10 | Q2 09 | Q/Q | Y/Y | |||||||||||
| Wireless Communications | 38 | 38 | 43 | 14% | 40% | |||||||||||
| Industrial & Automotive | 29 | 26 | 20 | 26% | 123% | |||||||||||
| Wired Infrastructure | 24 | 26 | 28 | 3% | 37% | |||||||||||
| Consumer & Computing Peripherals | 9 | 10 | 9 | 4% | 71% | |||||||||||
| Key Statistics |
Q2 10 |
Q1 10 | Q2 09 | |||||||||||||
| (Dollars in millions) | ||||||||||||||||
| Cash From Operations | $115 | $41 | $66 | |||||||||||||
| Depreciation | $20 | $19 | $20 | |||||||||||||
| Amortization | $20 | $20 | $19 | |||||||||||||
| Capital Expenditures | $18 | $9 | $13 | |||||||||||||
| Days Sales Outstanding | 44 | 41 | 52 | |||||||||||||
| Inventory Days On Hand | 60 | 61 | 65 | |||||||||||||
Third Quarter Fiscal Year 2010 Business Outlook
Based on current business trends, the outlook for the third fiscal quarter of 2010, ending August 1, 2010, is expected to be as follows:
|
GAAP |
Reconciling Items |
Non-GAAP | ||||
| Net Revenue | Up 4% to 7% | Up 4% to 7% | ||||
| Gross Margin | 46.0% plus/minus 1ppt. | $15M | 49.0% plus/minus 1ppt. | |||
| Operating Expenses | $127M | $11M | $116M | |||
| Interest and Other | $8M | $8M | ||||
| Taxes | $4M | $4M | ||||
| Diluted Share Count | 247M | 251M |
Reconciling items include $14 million of amortization of acquisition-related intangibles and $1 million of share-based compensation expenses at the Gross Margin line and $5 million of amortization of acquisition-related intangibles and $6 million of share-based compensation expenses at the Operating Expenses line.
Capital expenditures are expected to be in the range of $20 million to $25 million. Depreciation and amortization are both expected to be approximately $20 million in the third quarter.
The guidance provided above is only an estimate of what the Company believes is realizable as of the date of this release. Actual results will vary from the guidance and the variations may be material. We undertake 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 UBS Global Technology and Services Conference in New York on June 10, 2010 and at the Nasdaq OMX Investor Conference in London on June 23, 2010. Both of these presentations will be webcast and available for replay on the Investors section of Avago's website.
Financial Results Conference Call
Avago Technologies Limited will host a conference call to review its financial results for the second quarter fiscal year 2010, and to provide guidance for the third quarter of fiscal year 2010, today at 2:00 p.m. Pacific Time. Those wishing to access the call should dial 866-356-4281; International 617-597-5395. The passcode is 24808425. A replay of the call will be available through June 3, 2010. To access the replay dial 888-286-8010; International 617-801-6888 and reference the passcode: 84036907. A webcast of the conference call will be available in the Investors section of Avago's website at www.avagotech.com.
Non-GAAP Financial Measures
In addition to GAAP reporting, Avago reports net income or loss, as well as gross margin and operating expenses, on a non-GAAP basis. This non-GAAP information excludes amortization of acquisition-related intangibles, share-based compensation expense, asset impairment charges, restructuring charges, acquired in-process research and development, debt extinguishment (gains) losses, selling shareholder expenses, and the results of discontinued operations. In addition, Avago also discloses Adjusted EBITDA as measured by the indenture governing our outstanding debt securities. Avago believes this non-GAAP earnings 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 emphasize the results of on-going operations. These historical non-GAAP measures are in addition to, and not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial data and a derivation of Adjusted EBITDA are 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. Our product portfolio is extensive and includes approximately 7,000 products in four primary target markets: wireless communications, wired infrastructure, industrial and automotive electronics and consumer and computing peripherals.
Cautionary Note Regarding Forward-Looking Statements
This announcement contains forward-looking statements that address our expected future business and financial performance. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, any projections of financial information; any statements about historical results that may suggest trends for our business; any statements of the plans, strategies and objectives of management for future operations; any statements of expectation or belief regarding future events, technology developments, or enforceability of our intellectual property rights; and any statements of assumptions underlying any of the foregoing. 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. For Avago, particular uncertainties that could materially affect future results include cyclicality in the semiconductor industry or in our target markets; the recent economic downturn and financial crisis and their impact on our business, results of operations, and financial condition; quarterly and annual fluctuations in operating results; our ability to generate cash sufficient to fund our research and development, capital expenditures and other business needs and to service our debt; our increased dependence on outsourced service providers for certain key business services and their ability to execute to our requirements; our dependence on contract manufacturing and outsourced supply chain; loss of our significant customers; our ability to maintain tax concessions in certain jurisdictions; our ability to protect our intellectual property and any associated increases in litigation expenditures; our competitive performance and ability to continue achieving design wins with our customers; any expenses associated with resolving customer product and warranty claims; our ability to achieve the growth prospects and synergies expected from our acquisitions; delays and challenges associated with integrating acquired companies with our existing businesses; our ability to improve our cost structure through our manufacturing outsourcing program; 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 with the Securities and Exchange Commission (the "SEC") on March 4, 2010, as amended, and other Avago filings with the 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) | ||||||||||||||||||||
| Quarter ended | Two quarters ended | |||||||||||||||||||
|
May 2, |
January 31, |
May 3, |
May 2, |
May 3, | ||||||||||||||||
| 2010 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
| Net revenue | $ | 515 | $ | 456 | $ | 325 | $ | 971 | $ | 693 | ||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Cost of products sold: | ||||||||||||||||||||
| Cost of products sold | 268 | 247 | 210 | 515 | 414 | |||||||||||||||
| Amortization of intangible assets | 14 | 15 | 14 | 29 | 29 | |||||||||||||||
| Restructuring charges | - | - | 3 | - | 9 | |||||||||||||||
| Total cost of products sold | 282 | 262 | 227 | 544 | 452 | |||||||||||||||
| Gross margin | 233 | 194 | 98 | 427 | 241 | |||||||||||||||
| Research and development | 70 | 64 | 59 | 134 | 121 | |||||||||||||||
| Selling, general and administrative | 48 | 46 | 42 | 94 | 82 | |||||||||||||||
| Amortization of intangible assets | 6 | 5 | 5 | 11 | 11 | |||||||||||||||
| Restructuring charges | 1 | 1 | 3 | 2 | 8 | |||||||||||||||
| Total operating expenses | 125 | 116 | 109 | 241 | 222 | |||||||||||||||
| Income(loss) from operations | 108 | 78 | (11 | ) | 186 | 19 | ||||||||||||||
| Interest expense | (8 | ) | (11 | ) | (20 | ) | (19 | ) | (38 | ) | ||||||||||
| (Loss) gain on extinguishment of debt | - | (24 | ) | - | (24 | ) | 1 | |||||||||||||
| Other income (expense), net | (1 | ) | (1 | ) | (2 | ) | (2 | ) | (4 | ) | ||||||||||
| Income (loss) before income taxes | 99 | 42 | (33 | ) | 141 | (22 | ) | |||||||||||||
| Provision for (benefit from) income taxes | 9 | 4 | (2 | ) | 13 | 3 | ||||||||||||||
| Net income (loss) | $ | 90 | $ | 38 | $ | (31 | ) | $ | 128 | $ | (25 | ) | ||||||||
| Net income (loss) per share: | ||||||||||||||||||||
| Basic | $ | 0.38 | $ | 0.16 | $ | (0.14 | ) | $ | 0.54 | $ | (0.12 | ) | ||||||||
| Diluted | $ | 0.37 | $ | 0.16 | $ | (0.14 | ) | $ | 0.52 | $ | (0.12 | ) | ||||||||
| Shares used in per share calculations: | ||||||||||||||||||||
| Basic | 238 | 236 | 214 | 237 | 214 | |||||||||||||||
| Diluted | 246 | 244 | 214 | 244 | 214 | |||||||||||||||
| Share-based compensation included in: | ||||||||||||||||||||
| Cost of products sold | $ | 1 | $ | - | $ | - | $ | 1 | $ | - | ||||||||||
| Research and development | 2 | 1 | 1 | 3 | 2 | |||||||||||||||
| Selling, general and administrative | 3 | 4 | 3 | 7 | 2 | |||||||||||||||
| $ | 6 | $ | 5 | $ | 4 | $ | 11 | $ | 4 | |||||||||||
| AVAGO TECHNOLOGIES LIMITED | ||||||||||||||||||||
| FINANCIAL SUMMARY (NON-GAAP) - UNAUDITED | ||||||||||||||||||||
| (IN MILLIONS, EXCEPT PERCENTAGES AND PER SHARE DATA) | ||||||||||||||||||||
| Quarter ended | Two quarters ended | |||||||||||||||||||
| May 2, | January 31, | May 3, | May 2, | May 3, | ||||||||||||||||
| 2010 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
| Net revenue | $ | 515 | $ | 456 | $ | 325 | $ | 971 | $ | 693 | ||||||||||
| Gross margin | 248 | 209 | 115 | 457 | 279 | |||||||||||||||
| % of net revenue | 48 | % | 46 | % | 35 | % | 47 | % | 40 | % | ||||||||||
| Research and development | $ | 68 | $ | 63 | $ | 58 | $ | 131 | $ | 119 | ||||||||||
| Selling, general and administrative | $ | 45 | $ | 42 | $ | 39 | $ | 87 | $ | 80 | ||||||||||
| Total operating expenses | $ | 113 | $ | 105 | $ | 97 | $ | 218 | $ | 199 | ||||||||||
| % of net revenue | 22 | % | 23 | % | 30 | % | 22 | % | 29 | % | ||||||||||
| Income from operations | $ | 135 | $ | 104 | $ | 18 | $ | 239 | $ | 80 | ||||||||||
| Interest expense | $ | (8 | ) | $ | (11 | ) | $ | (20 | ) | $ | (19 | ) | $ | (38 | ) | |||||
| Net income(loss) | $ | 117 | $ | 88 | $ | (2 | ) | $ | 205 | $ | 35 | |||||||||
| Net income per share - diluted | $ | 0.47 | $ | 0.36 | $ | (0.01 | ) | $ | 0.83 | $ | 0.16 | |||||||||
| Shares used in per share calculation - diluted(1) | 249 | 247 | 214 | 247 | 218 | |||||||||||||||
| The financial summary excludes amortization of acquisition-related intangibles, share-based compensation, restructuring charges, advisory agreement termination fee, selling shareholder expenses and (loss)gain on extinguishment of debt. | ||||||||||||||||||||
| (1) The shares used in diluted per share calculation exclude the impact of share-based compensation. | ||||||||||||||||||||
| AVAGO TECHNOLOGIES LIMITED | |||||||||||||||||
| FINANCIAL RECONCILIATION: GAAP TO NON-GAAP - UNAUDITED | |||||||||||||||||
| (IN MILLIONS) | |||||||||||||||||
| Quarter ended | Two quarters ended | ||||||||||||||||
|
May 2, |
January 31, |
May 3, |
May 2, |
May 3, | |||||||||||||
| 2010 | 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net income (loss) on GAAP basis | $ | 90 | $ | 38 | $ | (31 | ) | $ | 128 | $ | (25 | ) | |||||
| Amortization of acquisition-related intangibles | 20 | 20 | 19 | 40 | 40 | ||||||||||||
| Share-based compensation expense | 6 | 5 | 4 | 11 | 4 | ||||||||||||
| Restructuring charges | 1 | 1 | 6 | 2 | 17 | ||||||||||||
| Loss(gain) on extinguishment of debt | - | 24 | - | 24 | (1 | ) | |||||||||||
| Net income(loss) on Non-GAAP basis | $ | 117 | $ | 88 | $ | (2 | ) | $ | 205 | $ | 35 | ||||||
| Gross margin on GAAP basis | $ | 233 | $ | 194 | $ | 98 | $ | 427 | $ | 241 | |||||||
| Amortization of acquisition-related intangibles | 14 | 15 | 14 | 29 | 29 | ||||||||||||
| Share-based compensation expense | 1 | - | - | 1 | - | ||||||||||||
| Restructuring charges | - | - | 3 | - | 9 | ||||||||||||
| Gross margin on Non-GAAP basis | $ | 248 | $ | 209 | $ | 115 | $ | 457 | $ | 279 | |||||||
| Research and development on GAAP basis | $ | 70 | $ | 64 | $ | 59 | $ | 134 | $ | 121 | |||||||
| Share-based compensation expense | 2 | 1 | 1 | 3 | 2 | ||||||||||||
| Research and development on Non-GAAP basis | $ | 68 | $ | 63 | $ | 58 | $ | 131 | $ | 119 | |||||||
| Selling, general and administrative on GAAP basis | $ | 48 | $ | 46 | $ | 42 | $ | 94 | $ | 82 | |||||||
| Share-based compensation expense | 3 | 4 | 3 | 7 | 2 | ||||||||||||
| Selling, general and administrative on Non-GAAP basis | $ | 45 | $ | 42 | $ | 39 | $ | 87 | $ | 80 | |||||||
| Total operating expenses on GAAP basis | $ | 125 | $ | 116 | $ | 109 | $ | 241 | $ | 222 | |||||||
| Amortization of acquisition-related intangibles | 6 | 5 | 5 | 11 | 11 | ||||||||||||
| Share-based compensation expense | 5 | 5 | 4 | 10 | 4 | ||||||||||||
| Restructuring charges | 1 | 1 | 3 | 2 | 8 | ||||||||||||
| Total operating expenses on Non-GAAP basis | $ | 113 | $ | 105 | $ | 97 | $ | 218 | $ | 199 | |||||||
| Income(loss) from operations on GAAP basis | $ | 108 | $ | 78 | $ | (11 | ) | $ | 186 | $ | 19 | ||||||
| Amortization of acquisition-related intangibles | 20 | 20 | 19 | 40 | 40 | ||||||||||||
| Share-based compensation expense | 6 | 5 | 4 | 11 | 4 | ||||||||||||
| Restructuring charges | 1 | 1 | 6 | 2 | 17 | ||||||||||||
| Income from operations on Non-GAAP basis | $ | 135 | $ | 104 | $ | 18 | $ | 239 | $ | 80 | |||||||
| AVAGO TECHNOLOGIES FINANCE PTE. LTD | |||||||||||||||||
| RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA - UNAUDITED | |||||||||||||||||
| (IN MILLIONS) | |||||||||||||||||
| Quarter ended | Two quarters ended | ||||||||||||||||
| May 2, | January 31, | May 3, | May 2, | May 3, | |||||||||||||
| 2010 | 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net income (loss) | $ | 90 | $ | 38 | $ | (31 | ) | $ | 128 | $ | (25 | ) | |||||
| Interest expense | 8 | 11 | 20 | 19 | 38 | ||||||||||||
| Provision for (benefit from) income taxes | 9 | 4 | (2 | ) | 13 | 3 | |||||||||||
| Depreciation and amortization expense | 40 | 39 | 39 | 79 | 80 | ||||||||||||
| EBITDA | 147 | 92 | 26 | 239 | 96 | ||||||||||||
| Restructuring and other unusual charges | 1 | 1 | 10 | 2 | 22 | ||||||||||||
| Share-based compensation | 6 | 5 | 4 | 11 | 4 | ||||||||||||
| Loss(gain) on extinguishment of debt | - | 24 | - | 24 | (1 | ) | |||||||||||
| Adjusted EBITDA | $ | 154 | $ | 122 | $ | 40 | $ | 276 | $ | 121 | |||||||
| EBITDA represents net income (loss) before interest expense, provision for income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to give effect to certain items that are required in calculating covenant compliance under our senior subordinated notes indenture as well as under our senior secured credit facility. Adjusted EBITDA is calculated by subtracting from or adding to EBITDA items of income or expense described above. EBITDA and Adjusted EBITDA do not represent net income, as that term is defined under GAAP, and should not be considered as an alternative to net income (loss) as an indicator of our operating performance. | |||||||||||||||||
| Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management or discretionary use as such measures do not consider certain cash requirements such as capital expenditures, tax payments and debt service requirements. EBITDA and Adjusted EBITDA as presented herein are not necessarily comparable to similarly titled measures used by other companies. | |||||||||||||||||
| AVAGO TECHNOLOGIES LIMITED | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED | ||||||||
| (IN MILLIONS) | ||||||||
| May 2, | November 1, | |||||||
| 2010 | 2009 (1) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 256 | $ | 472 | ||||
| Trade accounts receivable, net | 249 | 186 | ||||||
| Inventory | 178 | 162 | ||||||
| Other current assets | 44 | 44 | ||||||
| Total current assets | 727 | 864 | ||||||
| Property, plant and equipment, net | 261 | 264 | ||||||
| Goodwill | 171 | 171 | ||||||
| Intangible assets, net | 607 | 647 | ||||||
| Other long-term assets | 16 | 24 | ||||||
| Total assets | $ | 1,782 | $ | 1,970 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 169 | $ | 154 | ||||
| Employee compensation and benefits | 59 | 55 | ||||||
| Accrued interest | 12 | 25 | ||||||
| Capital lease obligations - current | 2 | 2 | ||||||
| Other current liabilities | 39 | 33 | ||||||
| Current portion of long-term debt | - | 364 | ||||||
| Total current liabilities | 281 | 633 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt | 230 | 230 | ||||||
| Capital lease obligations - non-current | 4 | 3 | ||||||
| Other long-term liabilities | 67 | 64 | ||||||
| Total liabilities | 582 | 930 | ||||||
| Shareholders' equity: | ||||||||
| Ordinary shares, no par value | 1,425 | 1,393 | ||||||
| Accumulated deficit | (228 | ) | (356 | ) | ||||
| Accumulated other comprehensive income | 3 | 3 | ||||||
| Total shareholders' equity | 1,200 | 1,040 | ||||||
| Total liabilities and shareholders' equity | $ | 1,782 | $ | 1,970 | ||||
| (1) Amounts for the year ended November 1, 2009 have been derived from audited financial statements as of that date. | ||||||||
| AVAGO TECHNOLOGIES LIMITED | ||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED | ||||||||||||||||||||
| (IN MILLIONS) | ||||||||||||||||||||
| Quarter ended | Two quarters ended | |||||||||||||||||||
|
May 2, |
January 31, |
May 3, |
May 2, |
May 3, | ||||||||||||||||
| 2010 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net income (loss) | $ | 90 | $ | 38 | $ | (31 | ) | $ | 128 | $ | (25 | ) | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 40 | 39 | 39 | 79 | 80 | |||||||||||||||
| Amortization of debt issuance costs | - | 1 | 1 | 1 | 2 | |||||||||||||||
| Non-cash portion of restructuring charges | - | - | 1 | - | 1 | |||||||||||||||
| Impairment of investment | - | - | 2 | - | 2 | |||||||||||||||
| (Gain) loss on extinguishment of debt | - | 8 | - | 8 | (1 | ) | ||||||||||||||
| Loss on disposal of property, plant and equipment | - | 1 | - | 1 | - | |||||||||||||||
| Share-based compensation | 6 | 5 | 4 | 11 | 4 | |||||||||||||||
| Excess tax benefits from share-based compensation | (1 | ) | - | - | (1 | ) | - | |||||||||||||
| Changes in assets and liabilities, net of acquisitions and dispositions: | ||||||||||||||||||||
| Trade accounts receivable | (46 | ) | (17 | ) | 1 | (63 | ) | 1 | ||||||||||||
| Inventory | (12 | ) | (4 | ) | 28 | (16 | ) | 38 | ||||||||||||
| Accounts payable | 2 | 5 | 1 | 7 | (4 | ) | ||||||||||||||
| Employee compensation and benefits | 13 | (9 | ) | (3 | ) | 4 | (34 | ) | ||||||||||||
| Other current assets and current liabilities | 14 | (28 | ) | 15 | (14 | ) | (9 | ) | ||||||||||||
| Other long-term assets and long-term liabilities | 9 | 2 | 8 | 11 | 7 | |||||||||||||||
| Net cash provided by operating activities | 115 | 41 | 66 | 156 | 62 | |||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Purchase of property, plant and equipment | (18 | ) | (9 | ) | (13 | ) | (27 | ) | (25 | ) | ||||||||||
| Acquisitions and investment, net of cash acquired | (1 | ) | - | (7 | ) | (1 | ) | (7 | ) | |||||||||||
| Proceeds from disposal of property, plant, and equipment | 1 | - | - | 1 | - | |||||||||||||||
| Proceeds from sale of discontinued operations | - | - | 2 | - | 2 | |||||||||||||||
| Net cash used in investing activities | (18 | ) | (9 | ) | (18 | ) | (27 | ) | (30 | ) | ||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Debt repayments | - | (364 | ) | - | (364 | ) | (2 | ) | ||||||||||||
| Issuance of ordinary shares, net of issuance costs | 15 | 4 | - | 19 | - | |||||||||||||||
| Repurchase of ordinary shares | - | - | (1 | ) | - | (1 | ) | |||||||||||||
| Cash settlement of equity awards | - | - | (1 | ) | - | (1 | ) | |||||||||||||
| Payment on capital lease obligation | (1 | ) | - | - | (1 | ) | ||||||||||||||
| Excess tax benefits from share-based compensation | 1 | - | - | 1 | - | |||||||||||||||
| Net cash (used in) provided by financing activities | 15 | (360 | ) | (2 | ) | (345 | ) | (4 | ) | |||||||||||
| Net (decrease) increase in cash and cash equivalents | 112 | (328 | ) | 46 | (216 | ) | 28 | |||||||||||||
| Cash and cash equivalents at the beginning of period | 144 | 472 | 195 | 472 | 213 | |||||||||||||||
| Cash and cash equivalents at end of period | $ | 256 | $ | 144 | $ | 241 | $ | 256 | $ | 241 | ||||||||||
SOURCE: Avago Technologies Ltd.
Avago Technologies Ltd.
Jacob Sayer, 408-435-7400
VP Business Development and Investor Relations
investor.relations@avagotech.com