SEC Filing | Broadcom Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 29, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Broadcom Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-38449

35-2617337

(State or other jurisdiction of
incorporation or organization)

(Commission file Number)

(I.R.S. Employer
Identification No.)

1320 Ridder Park Drive

San Jose,

95131-2313

(408)

433-8000

(Address, including zip code, of principal executive offices and

registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ


Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.001 par value	AVGO	The NASDAQ Global Select Market

As of February 24, 2023, there were 416,923,664 shares of our common stock outstanding.

BROADCOM INC.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended January 29, 2023

TABLE OF CONTENTS


			Page
PART I — FINANCIAL INFORMATION			1
Item 1. Condensed Consolidated Financial Statements — Unaudited			1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures About Market Risk			29
Item 4. Controls and Procedures			29
PART II — OTHER INFORMATION			29
Item 1. Legal Proceedings			29
Item 1A. Risk Factors			29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			50
Item 3. Defaults Upon Senior Securities			50
Item 4. Mine Safety Disclosures			50
Item 5. Other Information			50
Item 6. Exhibits			51
SIGNATURES			52

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PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements — Unaudited

BROADCOM INC.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED


			Page
Condensed Consolidated Balance Sheets — Unaudited			2
Condensed Consolidated Statements of Operations - Unaudited			3
Condensed Consolidated Statements of Comprehensive Income — Unaudited			4
Condensed Consolidated Statements of Cash Flows — Unaudited			5
Condensed Consolidated Statements of Stockholders’ Equity — Unaudited			6
Notes to Unaudited Condensed Consolidated Financial Statements			8

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BROADCOM INC.

CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED


	January 29, 2023		October 30, 2022

	(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	12,647	$	12,416

Trade accounts receivable, net	3,234		2,958
Inventory	1,899		1,925

Other current assets	1,056		1,205
Total current assets	18,836		18,504
Long-term assets:
Property, plant and equipment, net	2,201		2,223
Goodwill	43,614		43,614
Intangible assets, net	6,225		7,111
Other long-term assets	2,100		1,797
Total assets	$	72,976	$	73,249
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	923	$	998
Employee compensation and benefits	536		1,202
Current portion of long-term debt	1,115		440
Other current liabilities	4,909		4,412
Total current liabilities	7,483		7,052
Long-term liabilities:
Long-term debt	38,167		39,075

Other long-term liabilities	4,016		4,413
Total liabilities	49,666		50,540
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.001 par value; 100 shares authorized; none issued and outstanding	—		—
Common stock, $0.001 par value; 2,900 shares authorized; 417 and 418 shares issued and outstanding as of January 29, 2023 and October 30, 2022, respectively	—		—
Additional paid-in capital	21,119		21,159
Retained earnings	2,371		1,604
Accumulated other comprehensive loss	(180)		(54)
Total stockholders’ equity	23,310		22,709
Total liabilities and equity	$	72,976	$	73,249

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED


	Fiscal Quarter Ended
	January 29, 2023		January 30, 2022

	(In millions, except per share data)
Net revenue:
Products	$	7,082	$	6,053
Subscriptions and services	1,833		1,653
Total net revenue	8,915		7,706
Cost of revenue:
Cost of products sold	2,225		1,769
Cost of subscriptions and services	149		156

Amortization of acquisition-related intangible assets	535		730
Restructuring charges	2		2
Total cost of revenue	2,911		2,657
Gross margin	6,004		5,049
Research and development	1,195		1,206
Selling, general and administrative	348		321
Amortization of acquisition-related intangible assets	348		397
Restructuring, impairment and disposal charges	10		17
Total operating expenses	1,901		1,941
Operating income	4,103		3,108
Interest expense	(406)		(407)

Other income (expense), net	143		(14)
Income before income taxes	3,840		2,687
Provision for income taxes	66		215


Net income	3,774		2,472
Dividends on preferred stock	—		(74)

Net income attributable to common stock	$	3,774	$	2,398

Net income per share attributable to common stock:


Basic	$	9.03	$	5.82




Diluted	$	8.80	$	5.59

Weighted-average shares used in per share calculations:
Basic	418		412
Diluted	429		429

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME — UNAUDITED


	Fiscal Quarter Ended
	January 29, 2023		January 30, 2022

	(In millions)
Net income	$	3,774	$	2,472
Other comprehensive income (loss), net of tax:

Change in unrealized loss on derivative instruments	(126)		—
Change in actuarial loss and prior service costs associated with defined benefit plans	—		1
Other comprehensive income (loss), net of tax	(126)		1
Comprehensive income	$	3,648	$	2,473

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED


	Fiscal Quarter Ended
	January 29, 2023		January 30, 2022

	(In millions)
Cash flows from operating activities:
Net income	$	3,774	$	2,472
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible and right-of-use assets	905		1,151
Depreciation	127		136
Stock-based compensation	391		387
Deferred taxes and other non-cash taxes	(573)		70



Non-cash interest expense	32		32
Other	(39)		15
Changes in assets and liabilities, net of acquisitions and disposals:
Trade accounts receivable, net	(276)		(468)
Inventory	26		(223)
Accounts payable	(80)		—
Employee compensation and benefits	(657)		(528)

Other current assets and current liabilities	570		521
Other long-term assets and long-term liabilities	(164)		(79)
Net cash provided by operating activities	4,036		3,486
Cash flows from investing activities:


Purchases of property, plant and equipment	(103)		(101)

Purchases of investments	—		(200)

Other	—		(8)
Net cash used in investing activities	(103)		(309)
Cash flows from financing activities:

Payments on debt obligations	(260)		(255)



Payments of dividends	(1,926)		(1,764)
Repurchases of common stock - repurchase program	(1,188)		(2,724)
Shares repurchased for tax withholdings on vesting of equity awards	(333)		(375)


Other	5		(3)
Net cash used in financing activities	(3,702)		(5,121)
Net change in cash and cash equivalents	231		(1,944)
Cash and cash equivalents at beginning of period	12,416		12,163
Cash and cash equivalents at end of period	$	12,647	$	10,219

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY — UNAUDITED

Fiscal Quarter Ended January 29, 2023


	Common Stock			Additional Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
			Shares			Par Value

		(In millions)
Balance as of October 30, 2022			418	$	—		$	21,159	$	1,604	$	(54)	$	22,709
Net income			—	—			—		3,774		—		3,774
Other comprehensive loss			—	—			—		—		(126)		(126)


Dividends to common stockholders			—	—			—		(1,926)		—		(1,926)

Common stock issued			2	—			—		—		—		—
Stock-based compensation			—	—			391		—		—		391
Repurchases of common stock			(2)	—			(107)		(1,081)		—		(1,188)
Shares repurchased for tax withholdings on vesting of equity awards			(1)	—			(324)		—		—		(324)
Balance as of January 29, 2023			417	$	—		$	21,119	$	2,371	$	(180)	$	23,310

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY — UNAUDITED

Fiscal Quarter Ended January 30, 2022


	8.00% Mandatory Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Par Value		Shares	Par Value

	(In millions)
Balance as of October 31, 2021	4	$	—	413	$	—	$	24,330	$	748	$	(116)	$	24,962
Net income	—	—		—	—		—		2,472		—		2,472
Other comprehensive income	—	—		—	—		—		—		1		1


Dividends to common stockholders	—	—		—	—		—		(1,689)		—		(1,689)
Dividends to preferred stockholders	—	—		—	—		—		(74)		—		(74)
Common stock issued	—	—		2	—		1		—		—		1
Stock-based compensation	—	—		—	—		387		—		—		387
Repurchases of common stock	—	—		(4)	—		(1,267)		(1,457)		—		(2,724)
Shares repurchased for tax withholdings on vesting of equity awards	—	—		(1)	—		(368)		—		—		(368)
Balance as of January 30, 2022	4	$	—	410	$	—	$	23,083	$	—	$	(115)	$	22,968

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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BROADCOM INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Overview, Basis of Presentation and Significant Accounting Policies

Overview

Broadcom Inc. (“Broadcom”), a Delaware corporation, is a global technology leader that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. We develop semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products. We have a history of innovation in the semiconductor industry and offer thousands of products that are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Our infrastructure software solutions enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms. Our portfolio of infrastructure and security software is designed to modernize, optimize, and secure the most complex hybrid environments, enabling scalability, agility, automation, insights, resiliency and security. We also offer mission critical fibre channel storage area networking (“FC SAN”) products and related software in the form of modules, switches and subsystems incorporating multiple semiconductor products. Unless stated otherwise or the context otherwise requires, references to “Broadcom,” “we,” “our,” and “us” mean Broadcom and its consolidated subsidiaries. We have two reportable segments: semiconductor solutions and infrastructure software.

Basis of Presentation

We operate on a 52- or 53-week fiscal year ending on the Sunday closest to October 31 in a 52-week year and the first Sunday in November in a 53-week year. Our fiscal year ending October 29, 2023 (“fiscal year 2023”) is a 52-week fiscal year. The first quarter of our fiscal year 2023 ended on January 29, 2023, the second quarter ends on April 30, 2023 and the third quarter ends on July 30, 2023. Our fiscal year ended October 30, 2022 (“fiscal year 2022”) was also a 52-week fiscal year.

The accompanying condensed consolidated financial statements include the accounts of Broadcom and its subsidiaries, and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. The financial information included herein is unaudited, and reflects all adjustments which are, in the opinion of our management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. The October 30, 2022 condensed consolidated balance sheet data were derived from Broadcom’s audited consolidated financial statements included in its Annual Report on Form 10-K for fiscal year 2022 as filed with the Securities and Exchange Commission. All intercompany balances and transactions have been eliminated in consolidation. The operating results for the fiscal quarter ended January 29, 2023 are not necessarily indicative of the results that may be expected for fiscal year 2023, or for any other future period.

Significant Accounting Policies

Use of estimates. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic, and many of these estimates could require increased judgment and carry a higher degree of variability and volatility. Actual results could differ materially from these estimates, and such differences could affect the results of operations reported in future periods.

2. Revenue from Contracts with Customers

We account for a contract with a customer when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights can be identified, payment terms can be identified, the contract has commercial substance, and it is probable we will collect substantially all of the consideration we are entitled. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer.

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Disaggregation

We have considered (1) information that is regularly reviewed by our Chief Executive Officer, who has been identified as the chief operating decision maker (the “CODM”) as defined by the authoritative guidance on segment reporting, in evaluating financial performance and (2) disclosures presented outside of our financial statements in our earnings releases and used in investor presentations to disaggregate revenues. The principal category we use to disaggregate revenues is the nature of our products and subscriptions and services, as presented in our condensed consolidated statements of operations. In addition, revenues by reportable segment are presented in Note 10. “Segment Information.”

The following tables present revenue disaggregated by type of revenue and by region for the periods presented:


	Fiscal Quarter Ended January 29, 2023
	Americas		Asia Pacific		Europe, the Middle East and Africa		Total

	(In millions)
Products	$	609	$	5,937	$	536	$	7,082
Subscriptions and services (a)	1,230		200		403		1,833
Total	$	1,839	$	6,137	$	939	$	8,915


	Fiscal Quarter Ended January 30, 2022
	Americas		Asia Pacific		Europe, the Middle East and Africa		Total

	(In millions)
Products	$	548	$	4,984	$	521	$	6,053
Subscriptions and services (a)	1,109		128		416		1,653
Total	$	1,657	$	5,112	$	937	$	7,706

_______________

(a) Subscriptions and services predominantly include software licenses with termination for convenience clauses.

Although we recognize revenue for the majority of our products when title and control transfer in Penang, Malaysia, we disclose net revenue by region based primarily on the geographic shipment location or delivery location specified by our distributors, original equipment manufacturer customers, contract manufacturers, channel partners, or software customers.

Contract Balances


		January 29, 2023		October 30, 2022

	(In millions)
Contract Assets		$	169	$	128

Contract Liabilities		$	3,494	$	3,341

Changes in our contract assets and contract liabilities primarily result from the timing difference between our performance and the customer’s payment. We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. We recognize a contract asset when we transfer products or services to a customer and the right to consideration is conditional on something other than the passage of time. Accounts receivable are recorded when the customer has been billed or the right to consideration is unconditional. We recognize contract liabilities when we have received consideration or an amount of consideration is due from the customer and we have a future obligation to transfer products or services. Contract liabilities include amounts billed or collected and advanced payments on contracts or arrangements, which may include termination for convenience provisions. The amount of revenue recognized during the fiscal quarter ended January 29, 2023 that was included in the contract liabilities balance as of October 30, 2022 was $1,435 million. The amount of revenue recognized during the fiscal quarter ended January 30, 2022 that was included in the contract liabilities balance as of October 31, 2021 was $1,216 million.

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents the transaction price allocated to unsatisfied or partially unsatisfied performance obligations. Remaining performance obligations include unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, but do not include contracts for software, subscriptions or

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services where the customer is not committed. The customer is not considered committed when termination for convenience without payment of a substantive penalty exists, either contractually or through customary business practice. The majority of our customer software contracts include termination for convenience clauses without a substantive penalty and are not considered committed. Additionally, as a practical expedient, we have not included contracts that have an original duration of one year or less, nor have we included contracts with sales-based or usage-based royalties promised in exchange for a license of intellectual property (“IP”).

Certain multi-year customer contracts primarily in our semiconductor solutions segment contain firmly committed amounts and the remaining performance obligations under these contracts as of January 29, 2023 were approximately $22.8 billion. We expect approximately 29% of this amount to be recognized as revenue over the next 12 months. Although the majority of our software contracts are not deemed to be committed, our customers generally do not exercise their termination for convenience rights. In addition, the majority of our contracts for products, subscriptions and services have a duration of one year or less. Accordingly, our remaining performance obligations disclosed above are not indicative of revenue for future periods.

3. Pending Acquisition of VMware, Inc.

On May 26, 2022, we entered into an Agreement and Plan of Merger (the “VMware Merger Agreement”) to acquire all of the outstanding shares of VMware, Inc. (“VMware”) in a cash-and-stock transaction (the “VMware Merger”) that values VMware at approximately $61 billion based on the closing price of Broadcom common stock on May 25, 2022. We will also assume VMware’s closing date outstanding debt, net of expected cash.

Under the terms of the VMware Merger Agreement, each share of VMware common stock issued and outstanding immediately prior to the effective time of the VMware Merger will be indirectly converted into the right to receive, at the election of the holder of such share of VMware common stock, either $142.50 in cash, without interest, or 0.2520 shares of Broadcom common stock. The stockholder election will be subject to proration, such that the total number of shares of VMware common stock entitled to receive cash and the total number of shares of VMware common stock entitled to receive Broadcom common stock, will, in each case, be equal to 50% of the aggregate number of shares of VMware common stock issued and outstanding immediately prior to the effective time of the VMware Merger.

We will assume all outstanding VMware restricted stock unit (“RSU”) awards and performance stock unit awards held by continuing employees. The assumed awards will be converted into RSU awards for shares of Broadcom common stock. All outstanding in-the-money VMware stock options and RSU awards held by non-employee directors will be accelerated and converted into the right to receive cash and shares of Broadcom common stock, in equal parts.

Effective upon the effective time of the VMware Merger, one member of the VMware Board of Directors, to be mutually agreed by us and VMware, will be added to our Board of Directors.

In connection with the execution of the VMware Merger Agreement, we entered into a commitment letter on May 26, 2022, with certain financial institutions that committed to provide, subject to the terms and conditions of the commitment letter, a senior unsecured bridge facility in an aggregate principal amount of $32 billion.

The VMware Merger, which is expected to be completed in our fiscal year 2023, is subject to satisfaction or waiver of customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and clearance under the antitrust laws of the European Union and certain other jurisdictions. On October 3, 2022, we registered approximately 59 million shares of our common stock. On November 4, 2022, VMware stockholders adopted the VMware Merger Agreement. We and VMware each have termination rights under the VMware Merger Agreement and, under specified circumstances, upon termination of the agreement, we and VMware would be required to pay the other a termination fee of $1.5 billion.

4. Supplemental Financial Information

Cash Equivalents

Cash equivalents included $3,520 million and $3,915 million of time deposits and $2,184 million and $2,365 million of money-market funds as of January 29, 2023 and October 30, 2022, respectively. For time deposits, carrying value approximates fair value due to the short-term nature of the instruments. The fair value of money-market funds, which was consistent with their carrying value, was determined using unadjusted prices in active, accessible markets for identical assets, and as such, they were classified as Level 1 assets in the fair value hierarchy.

Accounts Receivable Factoring

We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions pursuant to factoring arrangements. We account for these transactions as sales of receivables and present cash proceeds as cash provided by operating activities in the condensed consolidated statements of cash flows. Total trade accounts receivable sold under the

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factoring arrangements were $1,025 million and $1,200 million during the fiscal quarters ended January 29, 2023 and January 30, 2022, respectively. Factoring fees for the sales of receivables were recorded in other income (expense), net and were not material for any of the periods presented.

Inventory


	January 29, 2023		October 30, 2022

	(In millions)
Finished goods	$	702	$	780
Work-in-process	986		966
Raw materials	211		179
Total inventory	$	1,899	$	1,925

Other Current Assets


	January 29, 2023		October 30, 2022

	(In millions)
Prepaid expenses	$	609	$	864
Other	447		341
Total other current assets	$	1,056	$	1,205

Other Current Liabilities


	January 29, 2023		October 30, 2022

	(In millions)
Contract liabilities	$	3,109	$	2,931
Tax liabilities	915		680
Interest payable	406		393
Other	479		408
Total other current liabilities	$	4,909	$	4,412

Other Long-Term Liabilities


	January 29, 2023		October 30, 2022

	(In millions)
Unrecognized tax benefits	$	2,866	$	3,229
Other	1,150		1,184
Total other long-term liabilities	$	4,016	$	4,413

Supplemental Cash Flow Information


	Fiscal Quarter Ended
	January 29, 2023		January 30, 2022

	(In millions)
Cash paid for interest	$	361	$	240
Cash paid for income taxes	$	273	$	186

During the fiscal quarter ended January 29, 2023 and fiscal year 2022, we entered into treasury rate lock contracts that mature in approximately one year to hedge variability of cash flows due to changes in the benchmark interest rate of anticipated future debt issuances. These treasury rate locks are designated and accounted for as cash flow hedging instruments. As of January 29, 2023 and October 30, 2022, the total notional amounts of these contracts were $5.5 billion and $1.3 billion, respectively. As of January 29, 2023, the fair value of $114 million was recorded in other current liabilities. As of October 30, 2022, the fair value of $47 million was recorded in other long-term assets. The change in fair value was recorded as a component of other comprehensive income (loss), net of tax, in our condensed consolidated statements of comprehensive income.

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5. Intangible Assets


	Gross Carrying Amount		Accumulated Amortization		Net Book Value

	(In millions)
As of January 29, 2023:
Purchased technology	$	19,450	$	(15,956)	$	3,494
Customer contracts and related relationships	7,066		(4,841)		2,225
Order backlog	484		(407)		77
Trade names	700		(389)		311
Other	174		(85)		89
Intangible assets subject to amortization	27,874		(21,678)		6,196
In-process research and development	29		—		29
Total	$	27,903	$	(21,678)	$	6,225

As of October 30, 2022:
Purchased technology	$	19,450	$	(15,422)	$	4,028
Customer contracts and related relationships	7,066		(4,535)		2,531
Order backlog	484		(382)		102
Trade names	700		(372)		328
Other	174		(81)		93
Intangible assets subject to amortization	27,874		(20,792)		7,082
In-process research and development	29		—		29
Total	$	27,903	$	(20,792)	$	7,111

Based on the amount of intangible assets subject to amortization as of January 29, 2023, the expected amortization expense was as follows:


Fiscal Year:	Expected Amortization Expense

	(In millions)
2023 (remainder)	$	2,369
2024	2,388
2025	681
2026	344
2027	216
Thereafter	198
Total	$	6,196

The weighted-average remaining amortization periods by intangible asset category were as follows:


Amortizable intangible assets:						January 29, 2023

						(In years)
Purchased technology						3
Customer contracts and related relationships						2
Order backlog						1
Trade names						8
Other						8

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6. Net Income Per Share

Basic net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period.

Diluted shares outstanding include the dilutive effect of unvested RSUs and employee stock purchase plan rights under the Broadcom Inc. Employee Stock Purchase Plan, as amended (“ESPP”), (collectively referred to as “equity awards”), as well as 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value per share (“Mandatory Convertible Preferred Stock”), which was all converted into shares of our common stock before the end of fiscal year 2022. Potentially dilutive shares whose effect would have been antidilutive are excluded from the computation of diluted net income per share.

The dilutive effect of equity awards is calculated based on the average stock price for each fiscal period, using the treasury stock method. Under the treasury stock method, the amount the employee must pay for purchasing shares under the ESPP and the amount of compensation cost for future service that we have not yet recognized are collectively assumed to be used to repurchase shares. The dilutive effect of Mandatory Convertible Preferred Stock is calculated using the if-converted method. The if-converted method assumes that these securities were converted at the beginning of the reporting period to the extent that the effect is dilutive.

For the fiscal quarter ended January 30, 2022, diluted net income per share excluded the potentially dilutive effect of 12 million shares of common stock issuable upon the conversion of Mandatory Convertible Preferred Stock as their effect was antidilutive.

The following is a reconciliation of the numerators and denominators of the basic and diluted net income per share computations for the periods presented:


	Fiscal Quarter Ended
	January 29, 2023		January 30, 2022

	(In millions, except per share data)
Numerator:
Net income	$	3,774	$	2,472
Dividends on preferred stock	—		(74)
Net income attributable to common stock	$	3,774	$	2,398

Denominator:
Weighted-average shares outstanding - basic	418		412
Dilutive effect of equity awards	11		17
Weighted-average shares outstanding - diluted	429		429




Net income per share attributable to common stock:


Basic	$	9.03	$	5.82




Diluted	$	8.80	$	5.59

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7. Borrowings


	Effective Interest Rate		January 29, 2023		October 30, 2022

	(In millions, except percentages)
April 2022 Senior Notes - fixed rate
4.000% notes due April 2029	4.17	%	$	750	$	750
4.150% notes due April 2032	4.30	%	1,200		1,200
4.926% notes due May 2037	5.33	%	2,500		2,500
			4,450		4,450
September 2021 Senior Notes - fixed rate
3.137% notes due November 2035	4.23	%	3,250		3,250
3.187% notes due November 2036	4.79	%	2,750		2,750
			6,000		6,000
March 2021 Senior Notes - fixed rate
3.419% notes due April 2033	4.66	%	2,250		2,250
3.469% notes due April 2034	4.63	%	3,250		3,250
			5,500		5,500
January 2021 Senior Notes - fixed rate
1.950% notes due February 2028	2.10	%	750		750
2.450% notes due February 2031	2.56	%	2,750		2,750
2.600% notes due February 2033	2.70	%	1,750		1,750
3.500% notes due February 2041	3.60	%	3,000		3,000
3.750% notes due February 2051	3.84	%	1,750		1,750
			10,000		10,000
June 2020 Senior Notes - fixed rate
3.459% notes due September 2026	4.19	%	752		752
4.110% notes due September 2028	5.02	%	1,118		1,118
			1,870		1,870
May 2020 Senior Notes - fixed rate
2.250% notes due November 2023	2.40	%	105		105
3.150% notes due November 2025	3.29	%	900		900
4.150% notes due November 2030	4.27	%	1,856		1,856
4.300% notes due November 2032	4.39	%	2,000		2,000
			4,861		4,861
April 2020 Senior Notes - fixed rate
5.000% notes due April 2030	5.18	%	606		606

April 2019 Senior Notes - fixed rate
3.625% notes due October 2024	3.98	%	622		622
4.750% notes due April 2029	4.95	%	1,655		1,655
			2,277		2,277
2017 Senior Notes - fixed rate
2.650% notes due January 2023	2.78	%	—		260
3.625% notes due January 2024	3.74	%	829		829
3.125% notes due January 2025	3.23	%	495		495
3.875% notes due January 2027	4.02	%	2,922		2,922

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	Effective Interest Rate		January 29, 2023		October 30, 2022

	(In millions, except percentages)
3.500% notes due January 2028	3.60	%	777		777
			5,023		5,283
Assumed CA Senior Notes - fixed rate
4.500% notes due August 2023	4.10	%	143		143
4.700% notes due March 2027	5.15	%	215		215
			358		358
Other senior notes - fixed rate
3.500% notes due August 2024	3.55	%	7		7
4.500% notes due August 2034	4.55	%	6		6
			13		13

Total principal amount outstanding			$	40,958	$	41,218

Current portion of principal amount outstanding			$	1,077	$	403
Short-term finance lease liabilities			38		37
Total current portion of long-term debt			$	1,115	$	440

Non-current portion of principal amount outstanding			$	39,881	$	40,815
Long-term finance lease liabilities			17		22
Unamortized discount and issuance costs			(1,731)		(1,762)
Total long-term debt			$	38,167	$	39,075

Credit Agreement

In January 2021, we entered into a credit agreement (the “Credit Agreement”), which provides for a five-year $7.5 billion unsecured revolving credit facility, of which $500 million is available for the issuance of multi-currency letters of credit. The issuance of letters of credit and certain other instruments would reduce the aggregate amount otherwise available under our revolving credit facility for revolving loans. Subject to the terms of the Credit Agreement, we are permitted to borrow, repay and reborrow revolving loans at any time prior to the earlier of (a) January 19, 2026 and (b) the date of termination in whole of the revolving lenders’ commitments under the Credit Agreement. We had