¹The Company is not readily able to provide a reconciliation of the projected non-GAAP financial information presented to the relevant projected GAAP measure without unreasonable effort.

BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

(IN MILLIONS, EXCEPT PER SHARE DATA)

Fiscal Quarter Ended

Three Fiscal Quarters Ended

August 2,

May 3,

August 4,

August 2,

August 4,

2020

2020

2019

2020

2019

Net revenue

$

5,821

$

5,742

$

5,515

$

17,421

$

16,821

Cost of revenue:

  Cost of revenue

1,537

1,592

1,651

4,765

4,935

  Amortization of acquisition-related intangible assets

953

954

828

2,857

2,487

  Restructuring charges

15

7

2

30

68

 Total cost of revenue

2,505

2,553

2,481

7,652

7,490

Gross margin

3,316

3,189

3,034

9,769

9,331

Research and development

1,228

1,269

1,235

3,786

3,519

Selling, general and administrative

428

501

410

1,530

1,300

Amortization of acquisition-related intangible assets

600

599

475

1,802

1,424

Restructuring, impairment and disposal charges

52

54

49

163

698

 Total operating expenses

2,308

2,423

2,169

7,281

6,941

Operating income

1,008

766

865

2,488

2,390

Interest expense

(464)

(487)

(362)

(1,357)

(1,083)

Other income, net

49

130

41

175

172

Income from continuing operations before income taxes

593

409

544

1,306

1,479

Benefit from income taxes

(96)

(159)

(171)

(331)

(410)

Income from continuing operations

689

568

715

1,637

1,889

Loss from discontinued operations, net of income taxes

(1)

(5)

-

(1)

(12)

Net income

688

563

715

1,636

1,877

Dividends on preferred stock ⁽¹⁾

(74)

(75)

-

(223)

-

Net income attributable to common stock

$

614

$

488

$

715

$

1,413

$

1,877

Basic income per share attributable to common stock:

  Income per share from continuing operations

$

1.53

$

1.23

$

1.80

$

3.53

$

4.73

  Loss per share from discontinued operations

(0.01)

(0.01)

-

(0.01)

(0.03)

  Net income per share

$

1.52

$

1.22

$

1.80

$

3.52

$

4.70

Diluted income per share attributable to common stock ⁽²⁾ :

  Income per share from continuing operations

$

1.46

$

1.18

$

1.71

$

3.37

$

4.50

  Loss per share from discontinued operations

(0.01)

(0.01)

-

(0.01)

(0.03)

  Net income per share

$

1.45

$

1.17

$

1.71

$

3.36

$

4.47

Weighted-average shares used in per share calculations:

  Basic

403

401

398

401

399

  Diluted

422

417

418

420

420

Stock-based compensation expense included in continuing operations:

  Cost of revenue

$

37

$

41

$

47

$

121

$

122

  Research and development

337

373

456

1,101

1,138

  Selling, general and administrative

91

103

129

305

381

 Total stock-based compensation expense

$

465

$

517

$

632

$

1,527

$

1,641

(1) For the fiscal quarter and three fiscal quarters ended August 2, 2020 and the fiscal quarter ended May 3, 2020, net income attributable to common stock excludes dividends on Mandatory Convertible Preferred Stock issued during the fiscal quarter ended November 3, 2019.

(2) For the fiscal quarter and three fiscal quarters ended August 2, 2020 and the fiscal quarter ended May 3, 2020, diluted income per share excluded the potentially dilutive effect of Mandatory Convertible Preferred Stock as the impact was antidilutive.