UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 3, 2009

 

 

Avago Technologies Limited

(Exact name of registrant as specified in its charter)

 

 

 

Singapore		001-34428		N/A
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

1 Yishun Avenue 7 Singapore 768923		N/A
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (65) 6755-7888

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition

On September 3, 2009, Avago Technologies Limited (the “Company”) distributed its financial results for its third fiscal quarter ended August 2, 2009. The Company also announced that it will host an investor conference call on September 3, 2009 at 2:00 p.m. Pacific Time.

The foregoing description is qualified in its entirety by reference to the press release dated September 3, 2009, a copy of which is attached hereto as Exhibit 99.1.

 

Item 7.01.

Regulation FD Disclosure

On September 3, 2009, the Company announced that its wholly owned subsidiary, Avago Technologies Finance Pte. Ltd., commenced a cash tender offer to purchase up to $250 million aggregate principal amount of its outstanding notes.

The foregoing description is qualified in its entirety by reference to the press release dated September 3, 2009, a copy of which is attached hereto as Exhibit 99.2.

The information contained herein and in the accompanying exhibits shall not be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibits hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

 

Item 9.01.

Financial Statements and Exhibits

 

(d)

Exhibits

 

Exhibit No.		Description
99.1		Press release dated September 3, 2009 entitled “Avago Technologies Limited Announces Third Quarter Fiscal Year 2009 Financial Results”
99.2		Press release dated September 3, 2009 entitled “Avago Technologies Announces Cash Tender Offer for Outstanding Notes”

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: September 3, 2009

 

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EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press release dated September 3, 2009 entitled “Avago Technologies Limited Announces Third Quarter Fiscal Year 2009 Financial Results”
99.2		Press release dated September 3, 2009 entitled “Avago Technologies Announces Cash Tender Offer for Outstanding Notes”

Exhibit 99.1

Avago Technologies Limited Announces Third Quarter

Fiscal Year 2009 Financial Results

SAN JOSE, Calif., and SINGAPORE – September 3, 2009 – Avago Technologies Limited. (Nasdaq: AVGO), a leading designer, developer and global supplier of analog semiconductor devices, today reported financial results for its third quarter of fiscal year 2009, ended August 2, 2009.

 

•

Quarterly revenue of $363 million, up 12 percent from the previous quarter

 

•

GAAP gross margin of 38.8 percent; non-GAAP gross margin of 43.5 percent

 

•

GAAP net income of $0.01 per diluted share

 

•

Non-GAAP net income of $0.18 per diluted share

 

•

Cash and cash equivalents of $254 million

Fourth Quarter Outlook

 

•

Projected revenue growth of 7 percent to 10 percent above the third quarter of fiscal year 2009

Third Quarter Fiscal 2009 GAAP Results

Revenue was $363 million, an increase of 12 percent when compared with the previous quarter, and down 17 percent from the same quarter last year.

Gross margin was $141 million, or 38.8 percent of sales. Third quarter gross margin compares with gross margin of $98 million, or 30.2 percent last quarter, and gross margin of $171 million, or 39.0 percent in the same quarter last year.

Third quarter net income was $2 million, or $0.01 per diluted share. This compares with a net loss of $31 million, or ($0.14) per diluted share last quarter, and net income of $44 million, or $0.20 per diluted share in the same quarter last year.

Cash balances at the end of the quarter increased by $13 million to $254 million from the last quarter. The changes in cash included a semi-annual interest payment of $36 million.

Third Quarter Fiscal 2009 Non-GAAP Results

Gross margin was $158 million, or 43.5 percent of sales. This compares with gross margin of $115 million, or 35.4 percent last quarter, and gross margin of $188 million, or 42.8 percent in the same quarter last year. Included in the second quarter fiscal 2009 gross margin were charges of approximately $24 million, primarily related to inventory write-downs.

Net income was $40 million, or $0.18 per diluted share. This compares with a net loss of $2 million, or ($0.01) per diluted share last quarter, and net income of $48 million, or net income of $0.22 per diluted share in the same quarter last year.

Adjusted EBITDA, as defined in the indentures governing our outstanding debt securities, was $87 million, compared with $40 million in the last quarter and $94 million in the same quarter last year.

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Avago Technologies Limited Reports Third Quarter Fiscal Year 2009 Financial Results

 

Third Quarter Non-GAAP 2009 Results (In millions, except EPS)														Change
		Q3 09				Q2 09				Q3 08				Q/Q				Y/Y
Revenue		$	363			$	325			$	439				+12	%			-17	%
Gross Margin			43.5	%			35.4	%			42.8	%			+810	bps			+70	bps
Operating Expenses		$	96			$	97			$	115			$	-1			$	-19
Net(Loss)/Income		$	40			$	(2	)		$	48			$	+42			$	-8
Earnings Per Share		$	0.18			$	(0.01	)		$	0.22			$	+0.19			$	-0.04

“We saw a sequential improvement in our business during the third quarter with revenue increasing 12 percent. This increase was driven primarily by growth in our wireless communications and consumer and computing peripherals end markets,” said Hock Tan, president and CEO of Avago Technologies Limited. “We believe inventory replenishments across all end markets coupled with seasonality in the wireless and consumer markets will continue to drive growth for the rest of the fiscal year.”

Revenues by End Market

 

		Percentages						Growth Rates
		Q3 09		Q2 09		Q3 08		Q/Q			Y/Y
Wireless Communications		46		43		31		19	%		23	%
Wired Infrastructure		24		28		27		-3	%		-27	%
Industrial & Automotive		19		20		31		6	%		-48	%
Consumer & Computing Peripherals		11		9		11		36	%		-21	%

 

Key Statistics (In millions, except for days)		Q3 09			Q2 09			Q3 08
Cash From Operations		$	31		$	66		$	60
Depreciation		$	20		$	20		$	19
Amortization		$	20		$	19		$	21
Capital Expenditures		$	12		$	13		$	19
Days Sales Outstanding			45			52			44
Inventory Days On Hand			68			65			70

Recent Business Highlights

 

•

Completed initial public offering on August 6, 2009. Sold a total of 49,680,000 ordinary shares, including over-allotment. This included 21,500,000 ordinary shares sold by Avago and 28,180,000 ordinary shares sold by selling shareholders.

 

•

Announced on September 3, 2009 a tender offer to purchase up to $250 million of outstanding debt securities.

 

2

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Avago Technologies Limited Reports Third Quarter Fiscal Year 2009 Financial Results

Based on current business trends, the outlook for the fourth fiscal quarter of 2009 is expected to be as follows.

Fourth Quarter 2009 Business Outlook

 

		GAAP		Reconciling Items		Non-GAAP
Revenue		Up 7% to 10%				Up 7% to 10%
Gross Margin		39% to 41%		$14M		43% to 45%
Operating Expenses		~$170M		~$70M		~$100M
Interest and Other*		$20M				$20M
Taxes		$4M				$4M
Diluted Share Count		243M				245M

 

*	The Interest and Other outlook does not reflect any reduction of interest payments or the loss on the extinguishment of debt from the use of proceeds from our initial public offering.

Included in the fourth quarter GAAP Operating Expenses outlook is $54 million paid to Avago’s equity sponsors in connection with the termination of the Company’s advisory agreement.

Capital expenditures are expected to be in the range of $15 million to $20 million. Depreciation and amortization will be approximately $20 million and $19 million, respectively. Share-based compensation will be in the range of $4 million to $5 million.

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.

Financial Results Conference Call

Avago Technologies Limited will host a conference call to review its financial results for the third quarter of fiscal year 2009 today at 2:00 p.m. Pacific Time. Those wishing to access the call should dial (866) 362-4829; International (617) 597-5346. The passcode is 91072513. A replay of the call is available through September 10, 2009. To access the replay dial (888) 286-8010; International (617) 801-6888 and reference the passcode: 67643443. A webcast of the conference call will be available in the Investors section of the Company’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 earnings 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 and the results of discontinued operations. In addition, Avago also discloses Adjusted EBITDA as measured by the indentures 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 net income (loss) and a derivation of Adjusted EBITDA in accordance with our note indentures are included in the financial tables attached to this press release.

 

3

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Avago Technologies Limited Reports Third Quarter Fiscal Year 2009 Financial Results

About Avago Technologies Limited

Avago Technologies Limited is a leading designer, developer and global supplier of analog semiconductor devices for communications, industrial and consumer applications.

Safe Harbor Statement

This announcement and supporting materials may contain forward-looking statements which 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. For Avago, particular uncertainties which could adversely or positively affect future results include cyclicality in the semiconductor industry or in our end markets; the recent financial crisis and its impact on our business, results of operations, and financial condition; fluctuations in interest rates; our ability to generate cash sufficient to service our debt and to fund our research and development, capital expenditures and other business needs; 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; quarterly and annual fluctuations in operating results; loss of our significant customers; our ability to maintain tax concessions in certain jurisdictions; our ability to protect our intellectual property; 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 Registration Statement on Form S-1 filed with the Securities and Exchange Commission (the “SEC”), the Annual Report of our wholly owned subsidiary Avago Technologies Finance Pte. Ltd. (“Avago Finance”) on Form 20-F filed with the SEC on December 17, 2008, recent Current Reports on Form 6-K, and other Avago and Avago Finance 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.

# # #

*****************************************************************************

Investor Contact

Jim Fanucchi

Summit IR Group Inc.

(408) 404-5400

Investor.relations@avagotech.com

 

4

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AVAGO TECHNOLOGIES LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

(IN MILLIONS, EXCEPT PER SHARE DATA)

 

		Quarter ended												Three quarters ended
		August 2, 2009				May 3, 2009				August 3, 2008				August 2, 2009				August 3, 2008
Net revenue		$	363			$	325			$	439			$	1,056			$	1,252
Costs and expenses:
Cost of products sold:
Cost of products sold			205				210				251				619				718
Amortization of intangible assets			15				14				14				44				42
Restructuring charges			2				3				3				11				5
Total cost of products sold			222				227				268				674				765
Research and development			59				59				68				180				196
Selling, general and administrative			40				42				50				122				148
Amortization of intangible assets			5				5				7				16				21
Restructuring charges			13				3				2				21				5
Total costs and expenses			339				336				395				1,013				1,135
Income (loss) from operations			24				(11	)			44				43				117
Interest expense			(20	)			(20	)			(20	)			(58	)			(65	)
Gain (loss) on extinguishment of debt			—				—				—				1				(10	)
Other income (expense), net			4				(2	)			—				—				2
Income (loss) from continuing operations before income taxes			8				(33	)			24				(14	)			44
Provision for (benefit from) income taxes			6				(2	)			5				9				12
Income (loss) from continuing operations			2				(31	)			19				(23	)			32
Income from and gain on discontinued operations, net of income taxes			—				—				25				—				33
Net income (loss)		$	2			$	(31	)		$	44			$	(23	)		$	65
Net income (loss) per share:
Basic		$	0.01			$	(0.14	)		$	0.21			$	(0.11	)		$	0.30
Diluted		$	0.01			$	(0.14	)		$	0.20			$	(0.11	)		$	0.30
Shares used in per share calculations:
Basic			213				214				214				214				214
Diluted			218				214				219				214				219
Share-based compensation included in:
Research and development		$	1			$	1			$	1			$	3			$	2
Selling, general and administrative			2				3				2				4				10
Operating expenses		$	3			$	4			$	3			$	7			$	12

 

5

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AVAGO TECHNOLOGIES LIMITED

FINANCIAL SUMMARY (NON-GAAP) - UNAUDITED

(IN MILLIONS, except percentages)

 

		Quarter ended												Three quarters ended
		August 2, 2009				May 3, 2009				August 3, 2008				August 2, 2009				August 3, 2008
Net revenue		$	363			$	325			$	439			$	1,056			$	1,252
Gross margin			158				115				188				437				534
% of net revenue			44	%			35	%			43	%			41	%			43	%
Research and development		$	58			$	58			$	67			$	177			$	194
Selling, general and administrative		$	38			$	39			$	48			$	118			$	138
Total operating expenses		$	96			$	97			$	115			$	295			$	332
% of net revenue			26	%			30	%			26	%			28	%			27	%
Income from operations		$	62			$	18			$	73			$	142			$	202
Interest expense		$	(20	)		$	(20	)		$	(20	)		$	(58	)		$	(65	)
Net income (loss)		$	40			$	(2	)		$	48			$	75			$	127

The financial summary excludes amortization of acquisition-related intangibles, share-based compensation, restructuring charges, gain (loss) on extinguishment of debt, and income (loss) from and gain (loss) on discontinued operations.

 

6

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AVAGO TECHNOLOGIES LIMITED

FINANCIAL BRIDGE: GAAP TO NON-GAAP - UNAUDITED

(IN MILLIONS)

 

		Quarter ended													Three quarters ended
		August 2, 2009			May 3, 2009				August 3, 2008						August 2, 2009				August 3, 2008
Net income (loss) on GAAP basis		$	2		$	(31	)		$	44					$	(23	)		$	65
Amortization of acquisition-related intangibles
Cost of products sold			15			14				14						44				42
Operating expenses			5			5				7						16				21
			20			19				21						60				63
Share-based compensation expense
Cost of products sold			—			—				—						—				—
Operating expenses			3			4				3						7				12
			3			4				3						7				12
Restructuring charges
Cost of products sold			2			3				3						11				5
Operating expenses			13			3				2						21				5
			15			6				5						32				10
(Gain) loss on extinguishment of debt			—			—				—						(1	)			10
Income from and gain on discontinued operations			—			—				(25	)					—				(33	)
Net income (loss) on Non-GAAP basis		$	40		$	(2	)		$	48					$	75			$	127

To supplement our unaudited condensed consolidated financial statements presented in accordance with GAAP, we have shown above a non-GAAP presentation of the Company’s net income (loss), which is adjusted to reflect the GAAP results excluding amortization of acquisition-related intangibles, share-based compensation, restructuring charges, (gain) loss on extinguishment of debt, and (income) loss from and (gain) loss on discontinued operations. This non-GAAP presentation is provided to enhance the reader’s overall understanding of the comparability of the Company’s financial performance among periods.

 

7

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AVAGO TECHNOLOGIES FINANCE PTE. LTD.

RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA - UNAUDITED

(IN MILLIONS)

 

		Quarter ended											Three quarters ended
		August 2, 2009			May 3, 2009				August 3, 2008				August 2, 2009				August 3, 2008
Net income (loss)		$	2		$	(31	)		$	44			$	(23	)		$	65
Interest expense			20			20				20				58				65
Provision for (benefit from) income taxes			6			(2	)			5				9				12
Depreciation and amortization expense			40			39				40				120				117
EBITDA			68			26				109				164				259
Restructuring and other unusual charges			16			10				7				38				14
Purchase accounting adjustments			—			—				—				—				1
Share-based compensation			3			4				3				7				12
(Gain) loss on extinguishment of debt			—			—				—				(1	)			10
Income from and gain on discontinued operations			—			—				(25	)			—				(33	)
Adjusted EBITDA		$	87		$	40			$	94			$	208			$	263

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 and senior subordinated notes 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.

 

8

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AVAGO TECHNOLOGIES LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(IN MILLIONS)

 

		August 2, 2009				November 2, 2008 (1)				August 3, 2008
ASSETS
Current assets:
Cash and cash equivalents		$	254			$	213			$	148
Trade accounts receivable, net			178				184				213
Inventory			153				188				193
Other current assets			31				34				28
Total current assets			616				619				582
Property, plant and equipment, net			273				299				288
Goodwill			171				169				156
Intangible assets, net			665				721				731
Other long-term assets			50				63				51
Total assets		$	1,775			$	1,871			$	1,808
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	152			$	174			$	166
Employee compensation and benefits			47				74				70
Accrued interest			13				32				14
Capital lease obligations - current			2				2				2
Other current liabilities			37				46				28
Total current liabilities			251				328				280
Long-term liabilities:
Long-term debt			700				703				703
Capital lease obligations - non-current			3				5				5
Other long-term liabilities			63				55				64
Total liabilities			1,017				1,091				1,052
Shareholders’ equity:
Ordinary shares, no par value			1,084				1,084				1,082
Accumulated deficit			(335	)			(312	)			(330	)
Accumulated other comprehensive income			9				8				4
Total shareholders’ equity			758				780				756
Total liabilities and shareholders’ equity		$	1,775			$	1,871			$	1,808

 

(1)	Amounts as of November 2, 2008 have been derived from audited financial statements as of that date.

 

9

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AVAGO TECHNOLOGIES LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(IN MILLIONS)

 

		Quarter ended
		August 2, 2009				May 3, 2009				August 3, 2008
Cash flows from operating activities:
Net income (loss)		$	2			$	(31	)		$	44
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			40				39				40
Amortization of debt issuance costs			1				1				1
(Gain) loss on sale of discontinued operations			—				—				(25	)
Non-cash portion of restructuring charges			—				1				—
Impairment of investment			—				2				—
Loss on disposal of property, plant and equipment			1				—				1
Share-based compensation			3				4				3
Changes in assets and liabilities, net of acquisitions and dispositions:
Trade accounts receivable			7				1				—
Inventory			(2	)			28				(27	)
Accounts payable			(21	)			1				12
Employee compensation and benefits			7				(3	)			16
Other current assets and current liabilities			(17	)			15				(8	)
Other long-term assets and long-term liabilities			10				8				3
Net cash provided by operating activities			31				66				60
Cash flows from investing activities:
Purchase of property, plant and equipment			(12	)			(13	)			(19	)
Acquisitions and investment, net of cash acquired			—				(7	)			—
Proceeds from sale of discontinued operations			—				2				25
Net cash (used in) provided by investing activities			(12	)			(18	)			6
Cash flows from financing activities:
Debt repayments			—				—				(2	)
Repurchase of ordinary shares			(5	)			(1	)			—
Cash settlement of equity awards			—				(1	)			—
Payment on capital lease obligation			(1	)			—				—
Excess tax benefits from share-based compensation			—				—				1
Net cash used in financing activities			(6	)			(2	)			(1	)
Net increase in cash and cash equivalents			13				46				65
Cash and cash equivalents at the beginning of period			241				195				83
Cash and cash equivalents at end of period		$	254			$	241			$	148

 

10

Exhibit 99.2

Avago Technologies Announces Cash Tender Offer for Outstanding Notes

SAN JOSE, Calif., and SINGAPORE – September 3, 2009 – Avago Technologies Limited (Nasdaq: AVGO), a leading designer, developer and global supplier of analog semiconductor devices, today announced that its wholly owned subsidiary, Avago Technologies Finance Pte. Ltd. (“Avago Finance”), has commenced a cash tender offer to purchase up to $250 million aggregate principal amount (subject to increase, the “Maximum Tender Amount”) of its outstanding notes as described below. The tender offer is described in an offer to purchase, dated September 3, 2009 (the “Offer to Purchase”) and related Letter of Transmittal. Avago Finance reserves the right to increase the Maximum Tender Amount subject to compliance with applicable law. The company expects to use net proceeds from the previously completed initial public offering of Avago Technologies Limited’s ordinary shares and cash on hand to purchase the outstanding notes.

Upon the terms and subject to the conditions described in the Offer to Purchase and the Letter of Transmittal, and any amendments or supplements to the foregoing, Avago Finance is offering to purchase for cash the notes below in the following Acceptance Priority Level:

 

				Aggregate Principal Amount Outstanding			Dollars per $1,000 Principal Amount of Securities									Acceptance Priority Level
Title of Security		CUSIP Number					Tender Offer Consideration			Early Tender Premium			Total Consideration
11 7/8% Senior Subordinated Notes due 2015 (the “11 7/8 % Notes”)		05336XAF8		$	247,500,000		$	1,065.00		$	20.00		$	1,085.00		1
10 1/8% Senior Notes due 2013 (the “10 1/8% Notes”)		05336XAD3 U05212AA0		$	403,121,000		$	1,035.00		$	20.00		$	1,055.00		2
Senior Floating Rate Notes due 2013 (the “Floating Rate Notes”)		05336XAE1		$	50,000,000		$	930.00		$	20.00		$	950.00		3

The tender offer will expire at 12:00 midnight, New York City time, on October 1, 2009, unless extended or earlier terminated (the “Expiration Date”). The consideration for each $1,000 principal amount of each series of notes validly tendered and accepted for purchase pursuant to the tender offer will be the applicable consideration for such series of notes set forth in the table above (with respect to each series, the “Tender Offer Consideration”). Holders of notes that are validly tendered at or prior to 5:00 p.m., New York City time, on September 17, 2009 (the “Early Tender Date”) and accepted for purchase will receive the Tender Offer Consideration for such series, plus the applicable early tender premium set forth in the table above (the “Early Tender Premium” and, together with the Tender Offer Consideration, the “Total Consideration”). Holders of notes validly tendered after the Early Tender Date but before the Expiration Date and accepted for purchase will receive the applicable Tender Offer Consideration, but not the Early Tender Premium. All holders of notes who validly tender their notes on or before the Expiration Date and whose notes are accepted for purchase will receive the applicable consideration set forth in the table above, plus accrued and unpaid interest from the last interest payment date to, but not including, the payment date.

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If notes are validly tendered in the tender offer such that the aggregate principal amount tendered exceeds the Maximum Tender Amount, Avago Finance will accept for purchase, up to the Maximum Tender Amount, notes in accordance with the Acceptance Priority Level (as set forth in the table above) in numerical priority order. Avago Finance will apply the Maximum Tender Amount first to purchase the 11 ⁷/8% Notes. To the extent any amounts remain in the Maximum Tender Amount after Avago Finance purchases the 11 ⁷/8 % Notes, Avago Finance will then apply the balance to purchase the 10 ¹/8% Notes, subject to proration, if applicable, based on the aggregate principal amount of the 10 ¹ /8% Notes validly tendered, rounded down to the nearest integral multiple of $1,000. To the extent any amounts remain in the Maximum Tender Amount after Avago Finance purchases the 11 ⁷/8% Notes and the 10 ¹/8% Notes, Avago Finance will then apply the balance to purchase the Floating Rate Notes, subject to proration, if applicable, based on the aggregate principal amount of the Floating Rate Notes validly tendered, rounded down to the nearest integral multiple of $1,000.

Payment for the 11 ⁷/8% Notes validly tendered at or before the Early Tender Date and accepted for purchase is expected to be made promptly after the Early Tender Date.

Payment for (a) the 11 ⁷/ 8% Notes validly tendered after the Early Tender Date and at or before the Expiration Date and accepted for purchase, and (b) the 10 ¹/8% Notes and the Floating Rate Notes validly tendered at or before the Expiration Date and accepted for purchase is expected to be made promptly after the Expiration Date.

Tenders of the notes may be withdrawn at any time at or prior to 5:00 p.m., New York City time, on September 17, 2009, but may not be withdrawn thereafter.

The consummation of the tender offer is not conditioned upon any minimum amount of notes being tendered, but is conditioned upon the satisfaction or waiver of the conditions set forth in the Offer to Purchase.

Citi is the sole dealer manager of the tender offer. Global Bondholder Services Corporation has been retained to serve as the depositary and information agent. Persons with questions regarding the tender offer should contact Citi at (toll-free) (800) 558-3745 or (collect) (212) 723-6106. Requests for copies of the Offer to Purchase, related Letter of Transmittal and other related materials should be directed to Global Bondholder Services Corporation at (toll-free) (866) 470-4300 or (collect) (212) 430-3774.

None of Avago Finance or its affiliates, its board of directors, the dealer manager, the depositary and information agent or the trustee for the notes, makes any recommendation as to whether holders of the notes should tender or refrain from tendering the notes. This press release is neither an offer to purchase nor a solicitation of an offer to sell the notes or any other securities. The tender offer is made only by the Offer to Purchase and the accompanying Letter of Transmittal. The tender offer is not being made to holders of notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the tender offer is required to be made by a licensed broker or dealer, the tender offer will be deemed to be made on behalf of Avago Finance by the dealer manager, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

About Avago Technologies Limited

Avago Technologies Limited is a leading designer, developer and global supplier of analog semiconductor devices for communications, industrial and consumer applications.

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Safe Harbor Statement

This press release contains forward-looking statements. 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. Factors that could cause or contribute to such differences include, but are not limited to, the amount of notes tendered and satisfaction of the conditions of the tender offer contained in the Offer to Purchase. Other factors that could cause or contribute to actual results differing materially from such forward-looking statements are discussed in greater detail in the filings of Avago Technologies Limited and Avago Technologies Finance Pte. Ltd. made with the U.S. Securities and Exchange Commission (“SEC”) (which you may obtain for free at the SEC’s website at http://www.sec.gov). We undertake no obligation to make any revision to the forward-looking statements contained in this press release or to update them to reflect events or circumstances occurring after the date of this press release.

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Investor Contact

Jim Fanucchi

Summit IR Group Inc.

(408) 404-5400

Investor.relations@avagotech.com

 

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