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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 July 30, 2023
OR
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)
Delaware001-3844935-2617337
(State or other jurisdiction of
incorporation or organization)
(Commission file Number)
(I.R.S. Employer
Identification No.)
1320 Ridder Park Drive
San Jose,CA95131-2313
(408) 
433-8000
(Address, including zip code, of principal executive offices and
registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.001 par valueAVGOThe NASDAQ Global Select Market
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 filerþAccelerated filerNon-accelerated filerSmaller reporting companyEmerging 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

As of August 25, 2023, there were 412,735,504 shares of our common stock outstanding.




BROADCOM INC.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended July 30, 2023

TABLE OF CONTENTS
Page



Table of Contents
PART I — FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements — Unaudited
BROADCOM INC.
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED
Page

1

Table of Contents
BROADCOM INC.
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED
July 30,
2023
October 30,
2022
(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents$12,055 $12,416 
Trade accounts receivable, net2,914 2,958 
Inventory1,842 1,925 
Other current assets1,522 1,205 
Total current assets18,333 18,504 
Long-term assets:
Property, plant and equipment, net2,180 2,223 
Goodwill43,619 43,614 
Intangible assets, net4,654 7,111 
Other long-term assets2,809 1,797 
Total assets$71,595 $73,249 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$992 $998 
Employee compensation and benefits831 1,202 
Current portion of long-term debt1,119 440 
Other current liabilities4,403 4,412 
Total current liabilities7,345 7,052 
Long-term liabilities:  
Long-term debt38,222 39,075 
Other long-term liabilities3,949 4,413 
Total liabilities49,516 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; 413 and 418 shares issued and outstanding as of July 30, 2023 and October 30, 2022, respectively
  
Additional paid-in capital20,855 21,159 
Retained earnings1,178 1,604 
Accumulated other comprehensive income (loss)46 (54)
Total stockholders’ equity22,079 22,709 
Total liabilities and equity$71,595 $73,249 

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

2

Table of Contents
BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
Fiscal Quarter EndedThree Fiscal Quarters Ended
July 30,
2023
July 31,
2022
July 30,
2023
July 31,
2022
(In millions, except per share data)
Net revenue:
Products$6,917 $6,627 $20,740 $19,097 
Subscriptions and services1,959 1,837 5,784 5,176 
Total net revenue8,876 8,464 26,524 24,273 
Cost of revenue:
Cost of products sold2,107 1,921 6,351 5,488 
Cost of subscriptions and services165 156 472 470 
Amortization of acquisition-related intangible assets439 705 1,415 2,142 
Restructuring charges1 1 3 4 
Total cost of revenue2,712 2,783 8,241 8,104 
Gross margin6,164 5,681 18,283 16,169 
Research and development1,358 1,255 3,865 3,722 
Selling, general and administrative388 323 1,174 1,012 
Amortization of acquisition-related intangible assets350 359 1,046 1,154 
Restructuring and other charges
212 7 231 42 
Total operating expenses2,308 1,944 6,316 5,930 
Operating income3,856 3,737 11,967 10,239 
Interest expense(406)(406)(1,217)(1,331)
Other income (expense), net124 6 380 (94)
Income before income taxes3,574 3,337 11,130 8,814 
Provision for income taxes271 263 572 678 
Net income3,303 3,074 10,558 8,136 
Dividends on preferred stock (75) (224)
Net income attributable to common stock$3,303 $2,999 $10,558 $7,912 
Net income per share attributable to common stock:
Basic$8.00 $7.40 $25.44 $19.39 
Diluted$7.74 $7.15 $24.73 $18.70 
Weighted-average shares used in per share calculations:
Basic413 405 415 408 
Diluted427 430 427 435 

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 EndedThree Fiscal Quarters Ended
July 30,
2023
July 31,
2022
July 30,
2023
July 31,
2022
(In millions)
Net income$3,303 $3,074 $10,558 $8,136 
Other comprehensive income, net of tax:
Change in unrealized gain on derivative instruments228  100  
Change in actuarial loss and prior service costs associated with defined benefit plans 1  2 
Other comprehensive income, net of tax228 1 100 2 
Comprehensive income$3,531 $3,075 $10,658 $8,138 

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
Three Fiscal Quarters Ended
July 30,
2023
July 31,
2022
(In millions)
Cash flows from operating activities:
Net income$10,558 $8,136 
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible and right-of-use assets2,525 3,368 
Depreciation378 400 
Stock-based compensation1,533 1,146 
Deferred taxes and other non-cash taxes(1,140)55 
Loss on debt extinguishment 100 
Non-cash interest expense98 97 
Other(18)152 
Changes in assets and liabilities, net of acquisitions and disposals:
Trade accounts receivable, net44 (629)
Inventory83 (540)
Accounts payable(6)(383)
Employee compensation and benefits(382)8 
Other current assets and current liabilities66 610 
Other long-term assets and long-term liabilities(482)(367)
Net cash provided by operating activities13,257 12,153 
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired(17)(239)
Purchases of property, plant and equipment(347)(302)
Purchases of investments(288)(200)
Sales of investments74 200 
Other13 2 
Net cash used in investing activities(565)(539)
Cash flows from financing activities:
Proceeds from long-term borrowings 1,935 
Payments on debt obligations(260)(2,352)
Payments of dividends(5,741)(5,250)
Repurchases of common stock - repurchase program(5,701)(7,000)
Shares repurchased for tax withholdings on vesting of equity awards(1,407)(1,181)
Issuance of common stock63 60 
Other(7)(12)
Net cash used in financing activities(13,053)(13,800)
Net change in cash and cash equivalents(361)(2,186)
Cash and cash equivalents at beginning of period12,416 12,163 
Cash and cash equivalents at end of period$12,055 $9,977 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY — UNAUDITED
Three Fiscal Quarters Ended July 30, 2023
Common Stock Additional
Paid-in Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
SharesPar Value
(In millions)
Balance as of October 30, 2022418 $ $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, 2023417  21,119 2,371 (180)23,310 
Net income— — — 3,481 — 3,481 
Other comprehensive loss— — — — (2)(2)
Dividends to common stockholders
— —  (1,914)— (1,914)
Common stock issued
3  63 — — 63 
Stock-based compensation— — 513 — — 513 
Repurchases of common stock(5) (248)(2,575)— (2,823)
Shares repurchased for tax withholdings on vesting of equity awards
(1) (621)— — (621)
Balance as of April 30, 2023414  20,826 1,363 (182)22,007 
Net income— — — 3,303 — 3,303 
Other comprehensive income— — — — 228 228 
Dividends to common stockholders
— —  (1,901)— (1,901)
Common stock issued
1   — —  
Stock-based compensation— — 629 — — 629 
Repurchases of common stock(2) (127)(1,587)— (1,714)
Shares repurchased for tax withholdings on vesting of equity awards
  (473)— — (473)
Balance as of July 30, 2023413 $ $20,855 $1,178 $46 $22,079 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY — UNAUDITED
Three Fiscal Quarters Ended July 31, 2022
8.00% Mandatory Convertible Preferred Stock
Common Stock Additional
Paid-in Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Stockholders’
Equity
SharesPar ValueSharesPar Value
(In millions)
Balance as of October 31, 20214 $ 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, 20224  410  23,083  (115)22,968 
Net income— — — — — 2,590 — 2,590 
Fair value of partially vested equity awards assumed in connection with an acquisition— — — — 4 — — 4 
Dividends to common stockholders
— — — —  (1,676)— (1,676)
Dividends to preferred stockholders— — — — — (75)— (75)
Common stock issued
— — 2  59 — — 59 
Stock-based compensation— — — — 386 — — 386 
Repurchases of common stock— — (5) (1,937)(839)— (2,776)
Shares repurchased for tax withholdings on vesting of equity awards
— — (1) (517)— — (517)
Balance as of May 1, 20224  406  21,078  (115)20,963 
Net income— — — — — 3,074 — 3,074 
Other comprehensive income— — — — — — 1 1 
Dividends to common stockholders
— — — — (50)(1,611)— (1,661)
Dividends to preferred stockholders— — — — — (75)— (75)
Common stock issued
— — 2   — —  
Stock-based compensation— — — — 373 — — 373 
Repurchases of common stock— — (3) (112)(1,388)— (1,500)
Shares repurchased for tax withholdings on vesting of equity awards
— —   (299)— — (299)
Balance as of July 31, 20224 $ 405 $ $20,990 $ $(114)$20,876 

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 ended on April 30, 2023 and the third quarter ended 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 July 30, 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. Actual results could differ materially from those 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 that we will collect substantially all of the consideration to which 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.
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.”
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The following tables present revenue disaggregated by type of revenue and by region for the periods presented:
Fiscal Quarter Ended July 30, 2023
AmericasAsia PacificEurope, the Middle East and AfricaTotal
(In millions)
Products$656 $5,773 $488 $6,917 
Subscriptions and services (a)
1,433 174 352 1,959 
Total$2,089 $5,947 $840 $8,876 
Fiscal Quarter Ended July 31, 2022
AmericasAsia PacificEurope, the Middle East and AfricaTotal
(In millions)
Products$645 $5,500 $482 $6,627 
Subscriptions and services (a)
1,117 345 375 1,837 
Total$1,762 $5,845 $857 $8,464 
Three Fiscal Quarters Ended July 30, 2023
AmericasAsia PacificEurope, the Middle East and AfricaTotal
(In millions)
Products$2,045 $17,168 $1,527 $20,740 
Subscriptions and services (a)
4,117 500 1,167 5,784 
Total$6,162 $17,668 $2,694 $26,524 
Three Fiscal Quarters Ended July 31, 2022
AmericasAsia PacificEurope, the Middle East and AfricaTotal
(In millions)
Products$1,851 $15,744 $1,502 $19,097 
Subscriptions and services (a)
3,380 598 1,198 5,176 
Total$5,231 $16,342 $2,700 $24,273 
_______________
(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
July 30,
2023
October 30,
2022
(In millions)
Contract Assets$652 $128 
Contract Liabilities$3,256 $3,341 
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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 three fiscal quarters ended July 30, 2023 that was included in the contract liabilities balance as of October 30, 2022 was $2,677 million. The amount of revenue recognized during the three fiscal quarters ended July 31, 2022 that was included in the contract liabilities balance as of October 31, 2021 was $2,482 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 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 July 30, 2023 were approximately $21.4 billion. We expect approximately 27% 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.
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. In connection with our entry into the 2023 Credit Agreement as discussed below, we terminated this commitment letter.
The VMware Merger, which is expected to be completed on October 30, 2023, is subject to satisfaction or waiver of customary closing conditions, including clearance under the antitrust laws of certain jurisdictions. On October 3, 2022, we registered approximately 59 million shares of our common stock. On November 4, 2022, VMware stockholders adopted the
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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.
2023 Term Loans
On August 15, 2023, we entered into a credit agreement (the “2023 Credit Agreement”), which provides us with the ability to borrow up to $28,390 million of term loan commitments (the “2023 Term Facilities”) in connection with the VMware Merger. The 2023 Term Facilities consist of a $10,695 million unsecured term A-2 facility, a $10,695 million unsecured term A-3 facility, and a $7,000 million unsecured term A-5 facility. The funding of the 2023 Term Facilities is dependent on the closing of the VMware Merger, and may be increased by up to $2,000 million.
The 2023 Term Facilities, once funded, will bear interest at floating interest rates and will mature and be payable on the second, third or fifth anniversary of the funding date. Our obligations under the 2023 Credit Agreement are unsecured and are not guaranteed by any of our subsidiaries.
4. Supplemental Financial Information
Cash Equivalents
Cash equivalents included $2,921 million and $3,915 million of time deposits and $2,241 million and $2,365 million of money-market funds as of July 30, 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 factoring arrangements were $900 million and $2,825 million during the fiscal quarter and three fiscal quarters ended July 30, 2023, respectively, and $900 million and $3,000 million during the fiscal quarter and three fiscal quarters ended July 31, 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
July 30,
2023
October 30,
2022
(In millions)
Finished goods$581 $780 
Work-in-process938 966 
Raw materials323 179 
Total inventory$1,842 $1,925 
Other Current Assets
July 30,
2023
October 30,
2022
(In millions)
Prepaid expenses$433 $864 
Other 1,089 341 
Total other current assets $1,522 $1,205 
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Other Current Liabilities
July 30,
2023
October 30,
2022
(In millions)
Contract liabilities$2,941 $2,931 
Tax liabilities515 680 
Interest payable406 393 
Other 541 408 
Total other current liabilities$4,403 $4,412 
Other Long-Term Liabilities
July 30,
2023
October 30,
2022
(In millions)
Unrecognized tax benefits$2,885 $3,229 
Other 1,064 1,184 
Total other long-term liabilities$3,949 $4,413 
Supplemental Cash Flow Information
Fiscal Quarter EndedThree Fiscal Quarters Ended
July 30,
2023
July 31,
2022
July 30,
2023
July 31,
2022
(In millions)
Cash paid for interest$348 $290 $1,106 $989 
Cash paid for income taxes$427 $231 $1,591 $657 
Derivative Instruments
During the fiscal quarter ended January 29, 2023 and fiscal year 2022, we entered into treasury rate lock contracts with original maturities of 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 lock contracts are designated and accounted for as cash flow hedging instruments. As of July 30, 2023 and October 30, 2022, the total notional amounts of these contracts were $5.5 billion and $1.3 billion, respectively. As of July 30, 2023, the fair value of $175 million was recorded in other current assets. 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, net of tax, in our condensed consolidated statements of comprehensive income. In August 2023, we early settled all treasury rate lock contracts for a cumulative gain of $371 million.
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5. Intangible Assets
Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
(In millions)
As of July 30, 2023:   
Purchased technology$19,456 $(16,828)$2,628 
Customer contracts and related relationships7,059 (5,447)1,612 
Order backlog484 (458)26 
Trade names699 (421)278 
Other174 (93)81 
Intangible assets subject to amortization27,872 (23,247)4,625 
In-process research and development29 — 29 
Total$27,901 $(23,247)$4,654 
As of October 30, 2022:   
Purchased technology$19,450 $(15,422)$4,028 
Customer contracts and related relationships7,066 (4,535)2,531 
Order backlog484 (382)102 
Trade names700 (372)328 
Other174 (81)93 
Intangible assets subject to amortization27,874 (20,792)7,082 
In-process research and development29 — 29 
Total$27,903 $(20,792)$7,111 
Based on the amount of intangible assets subject to amortization as of July 30, 2023, the expected amortization expense was as follows:
Fiscal Year:Expected Amortization Expense
(In millions)
2023 (remainder)$789 
20242,389 
2025682 
2026345 
2027218 
Thereafter202 
Total$4,625 
The weighted-average remaining amortization periods by intangible asset category were as follows:
Amortizable intangible assets:July 30,
2023
(In years)
Purchased technology3
Customer contracts and related relationships2
Trade names8
Other8
The weighted-average remaining amortization period of order backlog was less than one year.
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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 by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period.
Potentially dilutive shares outstanding include the dilutive effect of unvested RSUs and employee stock purchase plan (“ESPP”) rights, (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 stock-based compensation expense 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.
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 EndedThree Fiscal Quarters Ended
July 30,
2023
July 31,
2022
July 30,
2023
July 31,
2022
(In millions, except per share data)
Numerator:
Net income$3,303 $3,074 $10,558 $8,136 
Dividends on preferred stock
 (75) (224)
Net income attributable to common stock$3,303 $2,999 $10,558 $7,912 
Denominator:
Weighted-average shares outstanding - basic413405415408
Dilutive effect of equity awards14131215
Dilutive effect of Mandatory Convertible Preferred Stock 12 12
Weighted-average shares outstanding - diluted427430427435
Net income per share attributable to common stock:
Basic$8.00 $7.40 $25.44 $19.39 
Diluted$7.74 $7.15 $24.73 $18.70 

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7. Borrowings
Effective Interest RateJuly 30,
2023
October 30,
2022
(Dollars in millions)
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 RateJuly 30,
2023
October 30,
2022
(Dollars in millions)
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 liabilities42 37 
Total current portion of long-term debt$1,119 $440 
Non-current portion of principal amount outstanding$39,881 $40,815 
Long-term finance lease liabilities8 22 
Unamortized discount and issuance costs(1,667)(1,762)
Total long-term debt$38,222 $39,075 
2021 Credit Agreement
In January 2021, we entered into a credit agreement (the “2021 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 2021 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 2021 Credit Agreement. We had no borrowings outstanding under our revolving credit facility at either July 30, 2023 or October 30, 2022.
Commercial Paper
In February 2019, we established a commercial paper program pursuant to which we may issue unsecured commercial paper notes (“Commercial Paper”) in principal amount of up to $2 billion outstanding at any time with maturities of up to 397 days from the date of issue. Commercial Paper is sold under customary terms in the commercial paper market and may be issued at a discount from par or, alternatively, may be sold at par and bear interest at rates dictated by market conditions at the time of their issuance. The discount associated with the Commercial Paper is amortized to interest expense over its term. Outstanding Commercial Paper reduces the amount that would otherwise be available to borrow for general corporate purposes under our revolving credit facility. We had no Commercial Paper outstanding at either July 30, 2023 or October 30, 2022.
Fair Value of Debt
As of July 30, 2023, the estimated aggregate fair value of debt was $35,072 million. The fair value of our senior notes was determined using quoted prices from less active markets. All of our debt obligations are categorized as Level 2 instruments.
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Future Principal Payments of Debt
The future scheduled principal payments of debt as of July 30, 2023 were as follows:
Fiscal Year:Future Scheduled Principal Payments
(In millions)
2023 (remainder)$143 
20241,563 
2025495 
20261,652 
20273,137 
Thereafter33,968 
Total$40,958 
As of July 30, 2023 and October 30, 2022, we were in compliance with all debt covenants.
8. Stockholders’ Equity
Cash Dividends Declared and Paid
Fiscal Quarter EndedThree Fiscal Quarters Ended
July 30,
2023
July 31,
2022
July 30,
2023
July 31,
2022
(In millions, except per share data)
Dividends per share to common stockholders
$4.60 $4.10 $13.80 $12.30 
Dividends to common stockholders$1,901 $1,661 $5,741 $5,026 
Dividends per share to preferred stockholders
$ $20.00 $ $60.00 
Dividends to preferred stockholders$ $75 $ $224 
On September 30, 2019, we issued approximately 4 million shares of Mandatory Convertible Preferred Stock, which were all converted into shares of our common stock before the end of fiscal year 2022.
Stock Repurchase Programs
In December 2021, our Board of Directors authorized a stock repurchase program to repurchase up to $10 billion of our common stock from time to time through December 31, 2022, which was subsequently extended to December 31, 2023. In May 2022, our Board of Directors authorized another stock repurchase program to repurchase up to an additional $10 billion of our common stock from time to time through December 31, 2023.
We repurchased and retired approximately 2 million and 9 million shares of our common stock for $1,707 million and $5,701 million during the fiscal quarter and three fiscal quarters ended July 30, 2023, respectively, and approximately 3 million and 12 million shares of our common stock for $1,500 million and $7,000 million during the fiscal quarter and three fiscal quarters ended July 31, 2022, respectively, under these stock repurchase programs.
Repurchases under our stock repurchase programs may be effected through a variety of methods, including open market or privately negotiated purchases. The timing and amount of shares repurchased will depend on the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors. We are not obligated to repurchase any specific amount of shares of common stock, and the stock repurchase programs may be suspended or terminated at any time.
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Stock-Based Compensation Expense
Fiscal Quarter EndedThree Fiscal Quarters Ended
July 30,
2023
July 31,
2022
July 30,
2023
July 31,
2022
(In millions)
Cost of products sold$25 $15 $63 $49 
Cost of subscriptions and services36 22 85 60 
Research and development444 259 1,065 788 
Selling, general and administrative124 77 320 249 
Total stock-based compensation expense$629 $373 $1,533 $1,146 
As of July 30, 2023, the total unrecognized compensation cost related to unvested stock-based awards was $6,878 million, which is expected to be recognized over the remaining weighted-average service period of 3.6 years.
Equity Incentive Award Plans
A summary of time- and market-based RSU activity is as follows:
Number of RSUs
Outstanding
Weighted-Average
Grant Date Fair Value Per Share
(In millions, except per share data)
Balance as of October 30, 202218 $238.49 
Granted12 $516.85 
Vested(6)$248.02 
Forfeited(1)$286.21 
Balance as of July 30, 202323 $381.67 
The aggregate fair value of time- and market-based RSUs that vested during the three fiscal quarters ended July 30, 2023 was $4,036 million, which represented the market value of our common stock on the date that the RSUs vested. The number of RSUs vested included shares of common stock that we withheld for settlement of employees’ tax obligations due upon the vesting of RSUs.
9. Income Taxes
The provision for income taxes was $271 million and $572 million for the fiscal quarter and three fiscal quarters ended July 30, 2023, respectively, compared to $263 million and $678 million for the fiscal quarter and three fiscal quarters ended July 31, 2022, respectivel