R
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
£
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Singapore
(State or Other Jurisdiction of
Incorporation or Organization)
|
98-0682363
(I.R.S. Employer
Identification No.)
|
1 Yishun Avenue 7
Singapore 768923
|
N/A
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Large accelerated filer
R
|
Accelerated filer
£
|
Non-accelerated filer
£
|
Smaller reporting company
£
|
|
|
(Do not check if a smaller reporting company)
|
|
|
Page
|
EX-10.1
|
|
EX-31.1
|
|
EX-31.2
|
|
EX-32.1
|
|
EX-32.2
|
|
EX-101 INSTANCE DOCUMENT
|
|
EX-101 SCHEMA DOCUMENT
|
|
EX-101 CALCULATION LINKBASE DOCUMENT
|
|
EX-101 DEFINITION LINKBASE DOCUMENT
|
|
EX-101 LABELS LINKBASE DOCUMENT
|
|
EX-101 PRESENTATION LINKBASE DOCUMENT
|
|
May 5,
2013 |
|
October 28,
2012 (1)
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,219
|
|
|
$
|
1,084
|
|
Trade accounts receivable, net
|
271
|
|
|
341
|
|
||
Inventory
|
229
|
|
|
194
|
|
||
Other current assets
|
99
|
|
|
72
|
|
||
Total current assets
|
1,818
|
|
|
1,691
|
|
||
Property, plant and equipment, net
|
561
|
|
|
503
|
|
||
Goodwill
|
201
|
|
|
180
|
|
||
Intangible assets, net
|
393
|
|
|
422
|
|
||
Other long-term assets
|
66
|
|
|
66
|
|
||
Total assets
|
$
|
3,039
|
|
|
$
|
2,862
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
240
|
|
|
$
|
248
|
|
Employee compensation and benefits
|
59
|
|
|
61
|
|
||
Capital lease obligations — current
|
1
|
|
|
1
|
|
||
Other current liabilities
|
30
|
|
|
36
|
|
||
Total current liabilities
|
330
|
|
|
346
|
|
||
Long-term liabilities:
|
|
|
|
||||
Capital lease obligations — non-current
|
2
|
|
|
2
|
|
||
Other long-term liabilities
|
96
|
|
|
95
|
|
||
Total liabilities
|
428
|
|
|
443
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Ordinary shares, no par value; 246,852,295 shares and 245,477,491 shares issued and outstanding on May 5, 2013 and October 28, 2012, respectively
|
1,518
|
|
|
1,479
|
|
||
Retained earnings
|
1,100
|
|
|
951
|
|
||
Accumulated other comprehensive loss
|
(7
|
)
|
|
(11
|
)
|
||
Total shareholders’ equity
|
2,611
|
|
|
2,419
|
|
||
Total liabilities and shareholders’ equity
|
$
|
3,039
|
|
|
$
|
2,862
|
|
(1)
|
Amounts as of
October 28, 2012
have been derived from audited consolidated financial statements as of that date.
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 5,
2013 |
|
April 29,
2012 |
|
May 5,
2013 |
|
April 29,
2012 |
||||||||
Net revenue
|
$
|
562
|
|
|
$
|
577
|
|
|
$
|
1,138
|
|
|
$
|
1,140
|
|
Cost of products sold:
|
|
|
|
|
|
|
|
||||||||
Cost of products sold
|
276
|
|
|
284
|
|
|
562
|
|
|
563
|
|
||||
Amortization of intangible assets
|
14
|
|
|
14
|
|
|
28
|
|
|
28
|
|
||||
Restructuring charges
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total cost of products sold
|
290
|
|
|
299
|
|
|
590
|
|
|
592
|
|
||||
Gross margin
|
272
|
|
|
278
|
|
|
548
|
|
|
548
|
|
||||
Research and development
|
95
|
|
|
84
|
|
|
188
|
|
|
166
|
|
||||
Selling, general and administrative
|
52
|
|
|
51
|
|
|
105
|
|
|
101
|
|
||||
Amortization of intangible assets
|
6
|
|
|
5
|
|
|
11
|
|
|
10
|
|
||||
Restructuring charges
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Total operating expenses
|
154
|
|
|
141
|
|
|
306
|
|
|
279
|
|
||||
Income from operations
|
118
|
|
|
137
|
|
|
242
|
|
|
269
|
|
||||
Interest expense
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Other income, net
|
1
|
|
|
3
|
|
|
3
|
|
|
2
|
|
||||
Income before income taxes
|
118
|
|
|
140
|
|
|
244
|
|
|
270
|
|
||||
Provision for income taxes
|
5
|
|
|
6
|
|
|
6
|
|
|
11
|
|
||||
Net income
|
$
|
113
|
|
|
$
|
134
|
|
|
$
|
238
|
|
|
$
|
259
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.46
|
|
|
$
|
0.55
|
|
|
$
|
0.97
|
|
|
$
|
1.05
|
|
Diluted
|
$
|
0.45
|
|
|
$
|
0.54
|
|
|
$
|
0.95
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares :
|
|
|
|
|
|
|
|
||||||||
Basic
|
246
|
|
|
244
|
|
|
246
|
|
|
246
|
|
||||
Diluted
|
251
|
|
|
250
|
|
|
251
|
|
|
251
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared and paid per share
|
$
|
0.19
|
|
|
$
|
0.13
|
|
|
$
|
0.36
|
|
|
$
|
0.25
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 5,
2013 |
|
April 29,
2012 |
|
May 5,
2013 |
|
April 29,
2012 |
||||||||
Net income
|
$
|
113
|
|
|
$
|
134
|
|
|
$
|
238
|
|
|
$
|
259
|
|
Tax effect on defined benefit pension plans
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Change in net unrealized gains on available-for-sale investments
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Net unrealized loss on derivative instruments, net of tax effects of $0
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Other comprehensive income (loss)
|
2
|
|
|
(1
|
)
|
|
4
|
|
|
—
|
|
||||
Total comprehensive income
|
$
|
115
|
|
|
$
|
133
|
|
|
$
|
242
|
|
|
$
|
259
|
|
|
Two Fiscal Quarters Ended
|
||||||
|
May 5,
2013 |
|
April 29,
2012 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
238
|
|
|
$
|
259
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
83
|
|
|
75
|
|
||
Loss on disposal of property, plant and equipment
|
1
|
|
|
1
|
|
||
Other
|
(1
|
)
|
|
2
|
|
||
Share-based compensation
|
35
|
|
|
24
|
|
||
Tax benefits from share-based compensation
|
—
|
|
|
2
|
|
||
Excess tax benefits from share-based compensation
|
—
|
|
|
(1
|
)
|
||
Changes in assets and liabilities, net of acquisition:
|
|
|
|
||||
Trade accounts receivable, net
|
70
|
|
|
54
|
|
||
Inventory
|
(34
|
)
|
|
(24
|
)
|
||
Accounts payable
|
2
|
|
|
13
|
|
||
Employee compensation and benefits
|
(2
|
)
|
|
(32
|
)
|
||
Other current assets and current liabilities
|
(18
|
)
|
|
(18
|
)
|
||
Other long-term assets and long-term liabilities
|
2
|
|
|
(5
|
)
|
||
Net cash provided by operating activities
|
376
|
|
|
350
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of property, plant and equipment
|
(114
|
)
|
|
(103
|
)
|
||
Acquisition and investment, net of cash acquired
|
(46
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(160
|
)
|
|
(103
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from government grants
|
5
|
|
|
2
|
|
||
Payments on capital lease obligations
|
(1
|
)
|
|
(1
|
)
|
||
Issuance of ordinary shares
|
28
|
|
|
22
|
|
||
Repurchase of ordinary shares
|
(24
|
)
|
|
(85
|
)
|
||
Excess tax benefits from share-based compensation
|
—
|
|
|
1
|
|
||
Dividend payments to shareholders
|
(89
|
)
|
|
(61
|
)
|
||
Net cash used in financing activities
|
(81
|
)
|
|
(122
|
)
|
||
Net increase in cash and cash equivalents
|
135
|
|
|
125
|
|
||
Cash and cash equivalents at the beginning of period
|
1,084
|
|
|
829
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,219
|
|
|
$
|
954
|
|
Balance as of October 28, 2012 — included in other current liabilities
|
$
|
2
|
|
Utilized
|
(1
|
)
|
|
Balance as of May 5, 2013 — included in other current liabilities
|
$
|
1
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 5,
2013 |
|
April 29,
2012 |
|
May 5,
2013 |
|
April 29,
2012 |
||||||||
Net income (Numerator):
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
113
|
|
|
$
|
134
|
|
|
$
|
238
|
|
|
$
|
259
|
|
Shares (Denominator):
|
|
|
|
|
|
|
|
||||||||
Basic weighted average ordinary shares outstanding
|
246
|
|
|
244
|
|
|
246
|
|
|
246
|
|
||||
Add: Incremental shares for:
|
|
|
|
|
|
|
|
||||||||
Dilutive effect of share options, RSUs and ESPP rights
|
5
|
|
|
6
|
|
|
5
|
|
|
5
|
|
||||
Shares used in diluted computation
|
251
|
|
|
250
|
|
|
251
|
|
|
251
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.46
|
|
|
$
|
0.55
|
|
|
$
|
0.97
|
|
|
$
|
1.05
|
|
Diluted
|
$
|
0.45
|
|
|
$
|
0.54
|
|
|
$
|
0.95
|
|
|
$
|
1.03
|
|
|
May 5,
2013 |
|
October 28,
2012 |
||||
Finished goods
|
$
|
52
|
|
|
$
|
42
|
|
Work-in-process
|
122
|
|
|
99
|
|
||
Raw materials
|
55
|
|
|
53
|
|
||
Total inventory
|
$
|
229
|
|
|
$
|
194
|
|
Balance as of October 28, 2012
|
$
|
180
|
|
Fiscal year 2013 acquisition (Note 3, "Acquisitions")
|
21
|
|
|
Balance as of May 5, 2013
|
$
|
201
|
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book Value
|
||||||
As of May 5, 2013:
|
|
|
|
|
|
||||||
Purchased technology
|
$
|
738
|
|
|
$
|
(430
|
)
|
|
$
|
308
|
|
Customer and distributor relationships
|
257
|
|
|
(174
|
)
|
|
83
|
|
|||
Other
|
4
|
|
|
(2
|
)
|
|
2
|
|
|||
Total
|
$
|
999
|
|
|
$
|
(606
|
)
|
|
$
|
393
|
|
As of October 28, 2012:
|
|
|
|
|
|
||||||
Purchased technology
|
$
|
728
|
|
|
$
|
(402
|
)
|
|
$
|
326
|
|
Customer and distributor relationships
|
257
|
|
|
(163
|
)
|
|
94
|
|
|||
Other
|
4
|
|
|
(2
|
)
|
|
2
|
|
|||
Total
|
$
|
989
|
|
|
$
|
(567
|
)
|
|
$
|
422
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 5,
2013 |
|
April 29,
2012 |
|
May 5,
2013 |
|
April 29,
2012 |
||||||||
Cost of products sold
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
28
|
|
|
$
|
28
|
|
Operating expenses
|
6
|
|
|
5
|
|
|
11
|
|
|
10
|
|
||||
Total
|
$
|
20
|
|
|
$
|
19
|
|
|
$
|
39
|
|
|
$
|
38
|
|
Fiscal Year
|
Amount
|
||
2013 (remainder)
|
$
|
39
|
|
2014
|
78
|
|
|
2015
|
77
|
|
|
2016
|
60
|
|
|
2017
|
50
|
|
|
2018
|
15
|
|
|
Thereafter
|
74
|
|
|
|
$
|
393
|
|
Amortizable intangible assets:
|
|
Purchased technology
|
7
|
Customer and distributor relationships
|
6
|
Other
|
22
|
|
Portion of Carrying
Value Measured at Fair
Value as of May 5, 2013
|
|
Fair Value
Measurement as
of May 5, 2013 Using
Quoted Prices
In Active Market
For Identical
Assets (Level 1)
|
|
Fair Value Measurement as of May 5, 2013
Using Significant Other Inputs (Level 2)
|
||||||
Assets:
|
|
|
|
|
|
||||||
Trading securities (1)
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
—
|
|
Investment Funds — Deferred Compensation Plan Assets (1)
|
8
|
|
|
8
|
|
|
—
|
|
|||
Available-for-sale securities (2)
|
6
|
|
|
6
|
|
|
—
|
|
|||
Total assets measured at fair value
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Deferred Compensation Plan Liabilities (3)
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
8
|
|
(1)
|
Included in other current assets in our unaudited condensed consolidated balance sheet
|
(2)
|
Included in other long-term assets in our unaudited condensed consolidated balance sheet
|
(3)
|
Included in other current liabilities in our unaudited condensed consolidated balance sheet
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 5,
2013 |
|
April 29,
2012 |
|
May 5,
2013 |
|
April 29,
2012 |
||||||||
Cost of products sold
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
3
|
|
Research and development
|
7
|
|
|
5
|
|
|
14
|
|
|
9
|
|
||||
Selling, general and administrative
|
8
|
|
|
6
|
|
|
17
|
|
|
12
|
|
||||
Total share-based compensation expense
|
$
|
17
|
|
|
$
|
13
|
|
|
$
|
35
|
|
|
$
|
24
|
|
|
Time-based Options
|
||||||||||
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||
|
May 5,
2013 |
|
April 29,
2012 |
|
May 5,
2013 |
|
April 29,
2012 |
||||
Risk-free interest rate
|
0.9
|
%
|
|
0.8
|
%
|
|
0.9
|
%
|
|
0.8
|
%
|
Dividend yield
|
1.9
|
%
|
|
1.4
|
%
|
|
1.9
|
%
|
|
1.4
|
%
|
Volatility
|
48.0
|
%
|
|
53.0
|
%
|
|
48.0
|
%
|
|
54.0
|
%
|
Expected term (in years)
|
5
|
|
|
5
|
|
|
5
|
|
|
5
|
|
|
ESPP Rights
|
||||||||||
|
Fiscal Quarter
Ended
|
|
Two Fiscal Quarters
Ended
|
||||||||
|
May 5,
2013 |
|
April 29,
2012 |
|
May 5,
2013 |
|
April 29,
2012 |
||||
Risk-free interest rate
|
0.1
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
Dividend yield
|
2.1
|
%
|
|
1.4
|
%
|
|
2.0
|
%
|
|
1.3
|
%
|
Volatility
|
46.0
|
%
|
|
52.0
|
%
|
|
45.0
|
%
|
|
52.0
|
%
|
Expected term (in years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
Market-based Options
|
||||
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||
|
May 5,
2013 |
|
May 5,
2013 |
||
Risk-free interest rate
|
1.4
|
%
|
|
1.4
|
%
|
Dividend yield
|
1.9
|
%
|
|
1.9
|
%
|
Volatility
|
50
|
%
|
|
50
|
%
|
|
|
|
Option Awards Outstanding
|
||||||||||||
|
Shares
Available
for Grant
|
|
Number
Outstanding
|
|
Weighted-
Average
Exercise Price
Per Share
|
|
Weighted-
Average
Remaining
Contractual
Life (in years)
|
|
Aggregate
Intrinsic
Value
|
||||||
Balance as of October 28, 2012
|
12
|
|
|
20
|
|
|
$
|
22.45
|
|
|
|
|
|
|
|
Annual increase in shares available for
|
|
|
|
|
|
|
|
|
|
||||||
issuance, per equity incentive plan terms
|
6
|
|
|
|
|
|
|
|
|
|
|||||
Granted
|
(5
|
)
|
|
5
|
|
|
35.33
|
|
|
|
|
|
|||
Exercised
|
—
|
|
|
(2
|
)
|
|
12.58
|
|
|
|
|
|
|||
Cancelled
|
—
|
|
|
—
|
|
|
24.92
|
|
|
|
|
|
|||
Balance as of May 5, 2013
|
13
|
|
|
23
|
|
|
26.27
|
|
|
5.89
|
|
$
|
162
|
|
|
Fully vested as of May 5, 2013
|
|
|
8
|
|
|
18.14
|
|
|
5.31
|
|
113
|
|
|||
Fully vested and expected to vest as of
|
|
|
|
|
|
|
|
|
|
||||||
May 5, 2013
|
|
|
21
|
|
|
25.82
|
|
|
5.86
|
|
130
|
|
|
|
Option Awards Outstanding
|
|
Option Awards Exercisable
|
||||||||||||
Exercise Prices
|
|
Number Outstanding
|
|
Weighted-
Average Remaining Contractual Life (in years) |
|
Weighted-Average
Exercise Price Per Share |
|
Number Exercisable
|
|
Weighted-Average
Exercise Price Per Share |
||||||
$0.00-$10.00
|
|
2
|
|
|
4.52
|
|
$
|
7.63
|
|
|
2
|
|
|
$
|
7.22
|
|
$10.01-$20.00
|
|
4
|
|
|
5.51
|
|
13.33
|
|
|
3
|
|
|
12.73
|
|
||
$20.01-$30.00
|
|
3
|
|
|
7.15
|
|
21.07
|
|
|
1
|
|
|
21.06
|
|
||
$30.01-$40.00
|
|
14
|
|
|
5.97
|
|
34.45
|
|
|
2
|
|
|
33.86
|
|
||
Total
|
|
23
|
|
|
5.89
|
|
26.27
|
|
|
8
|
|
|
18.14
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 5,
2013 |
|
April 29,
2012 |
|
May 5,
2013 |
|
April 29,
2012 |
||||||||
Total net revenue
|
$
|
10
|
|
|
$
|
3
|
|
|
$
|
16
|
|
|
$
|
5
|
|
Total costs and expenses
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
May 5,
2013 |
|
October 28,
2012 |
||||
Total receivables
|
$
|
4
|
|
|
$
|
1
|
|
Total payables
|
—
|
|
*
|
2
|
|
|
Total
|
|
2013 (remainder)
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
||||||||||||||||
Purchase Commitments
|
$
|
139
|
|
|
$
|
139
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other Contractual Commitments
|
$
|
19
|
|
|
$
|
5
|
|
|
$
|
10
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fiscal Quarter Ended
|
||||||||||||
|
May 5,
2013 |
|
April 29,
2012 |
|
May 5,
2013 |
|
April 29,
2012 |
||||||
|
(In millions)
|
|
(As a percentage of net revenue)
|
||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
562
|
|
|
$
|
577
|
|
|
100
|
%
|
|
100
|
%
|
Cost of products sold:
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
276
|
|
|
284
|
|
|
49
|
|
|
49
|
|
||
Amortization of intangible assets
|
14
|
|
|
14
|
|
|
3
|
|
|
3
|
|
||
Restructuring charges
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||
Total cost of products sold
|
290
|
|
|
299
|
|
|
52
|
|
|
52
|
|
||
Gross margin
|
272
|
|
|
278
|
|
|
48
|
|
|
48
|
|
||
Research and development
|
95
|
|
|
84
|
|
|
17
|
|
|
14
|
|
||
Selling, general and administrative
|
52
|
|
|
51
|
|
|
9
|
|
|
9
|
|
||
Amortization of intangible assets
|
6
|
|
|
5
|
|
|
1
|
|
|
1
|
|
||
Restructuring charges
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||
Total operating expenses
|
154
|
|
|
141
|
|
|
27
|
|
|
24
|
|
||
Income from operations
|
118
|
|
|
137
|
|
|
21
|
|
|
24
|
|
||
Interest expense
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Other income, net
|
1
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||
Income before income taxes
|
118
|
|
|
140
|
|
|
21
|
|
|
24
|
|
||
Provision for income taxes
|
5
|
|
|
6
|
|
|
1
|
|
|
1
|
|
||
Net income
|
$
|
113
|
|
|
$
|
134
|
|
|
20
|
%
|
|
23
|
%
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 5,
2013 |
|
April 29,
2012 |
|
May 5,
2013 |
|
April 29,
2012 |
||||||
|
(In millions)
|
|
(As a percentage of net revenue)
|
||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
1,138
|
|
|
$
|
1,140
|
|
|
100
|
%
|
|
100
|
%
|
Cost of products sold:
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
562
|
|
|
563
|
|
|
49
|
|
|
49
|
|
||
Amortization of intangible assets
|
28
|
|
|
28
|
|
|
3
|
|
|
3
|
|
||
Restructuring charges
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||
Total cost of products sold
|
590
|
|
|
592
|
|
|
52
|
|
|
52
|
|
||
Gross margin
|
548
|
|
|
548
|
|
|
48
|
|
|
48
|
|
||
Research and development
|
188
|
|
|
166
|
|
|
17
|
|
|
14
|
|
||
Selling, general and administrative
|
105
|
|
|
101
|
|
|
9
|
|
|
9
|
|
||
Amortization of intangible assets
|
11
|
|
|
10
|
|
|
1
|
|
|
1
|
|
||
Restructuring charges
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||
Total operating expenses
|
306
|
|
|
279
|
|
|
27
|
|
|
24
|
|
||
Income from operations
|
242
|
|
|
269
|
|
|
21
|
|
|
24
|
|
||
Interest expense
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||
Other income, net
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||
Income before income taxes
|
244
|
|
|
270
|
|
|
21
|
|
|
24
|
|
||
Provision for income taxes
|
6
|
|
|
11
|
|
|
—
|
|
|
1
|
|
||
Net income
|
$
|
238
|
|
|
$
|
259
|
|
|
21
|
%
|
|
23
|
%
|
|
|
Fiscal Quarter Ended
|
|
|
|
Two Fiscal Quarters Ended
|
|
|
||||||||||
% of net revenue
|
|
May 5,
2013 |
|
April 29,
2012 |
|
Change
|
|
May 5,
2013 |
|
April 29,
2012 |
|
Change
|
||||||
Wireless communications
|
|
50
|
%
|
|
44
|
%
|
|
6
|
%
|
|
52
|
%
|
|
45
|
%
|
|
7
|
%
|
Wired infrastructure
|
|
27
|
|
|
29
|
|
|
(2
|
)
|
|
26
|
|
|
29
|
|
|
(3
|
)
|
Industrial & other
|
|
23
|
|
|
27
|
|
|
(4
|
)
|
|
22
|
|
|
26
|
|
|
(4
|
)
|
Total net revenue
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
Fiscal Quarter Ended
|
|
|
|
Two Fiscal Quarters Ended
|
|
|
||||||||||||||||
Net revenue (in millions)
|
|
May 5,
2013 |
|
April 29,
2012 |
|
Change
|
|
May 5,
2013 |
|
April 29,
2012 |
|
Change
|
||||||||||||
Wireless communications
|
|
$
|
279
|
|
|
$
|
255
|
|
|
$
|
24
|
|
|
$
|
587
|
|
|
$
|
509
|
|
|
$
|
78
|
|
Wired infrastructure
|
|
153
|
|
|
168
|
|
|
(15
|
)
|
|
296
|
|
|
330
|
|
|
(34
|
)
|
||||||
Industrial & other
|
|
130
|
|
|
154
|
|
|
(24
|
)
|
|
255
|
|
|
301
|
|
|
(46
|
)
|
||||||
Total net revenue
|
|
$
|
562
|
|
|
$
|
577
|
|
|
$
|
(15
|
)
|
|
$
|
1,138
|
|
|
$
|
1,140
|
|
|
$
|
(2
|
)
|
|
Two Fiscal Quarters Ended
|
||||||
|
May 5,
2013 |
|
April 29,
2012 |
||||
Net cash provided by operating activities
|
$
|
376
|
|
|
$
|
350
|
|
Net cash used in investing activities
|
(160
|
)
|
|
(103
|
)
|
||
Net cash used in financing activities
|
(81
|
)
|
|
(122
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
135
|
|
|
$
|
125
|
|
•
|
changes in end-user demand for the products manufactured and sold by our customers;
|
•
|
the timing of receipt, reduction or cancellation of significant orders by customers;
|
•
|
fluctuations in the levels of component inventories held by our customers;
|
•
|
customer concentration and the gain or loss of significant customers;
|
•
|
market acceptance of our products and our customers' products;
|
•
|
changes in our product mix or customer mix and their effect on our gross margin;
|
•
|
our ability to develop, introduce and market new products and technologies on a timely basis;
|
•
|
the timing and extent of our non-product revenue, such as product development revenues and royalty and other payments from intellectual property sales and licensing arrangements;
|
•
|
our ability to successfully and timely integrate, and realize the benefits of, our acquisition of CyOptics and any other significant acquisitions we may make;
|
•
|
new product announcements and introductions by us or our competitors;
|
•
|
the timing of the launch by our customers of new products, such as cell phones, in which our products are included;
|
•
|
timing and amount of research and development and related new product expenditures, and the timing of receipt of any research and development grant monies;
|
•
|
seasonality or cyclical fluctuations in our markets;
|
•
|
currency fluctuations;
|
•
|
utilization of our internal manufacturing facilities;
|
•
|
fluctuations in manufacturing yields;
|
•
|
significant warranty claims, including those not covered by our suppliers or our insurers;
|
•
|
availability and cost of raw materials from our suppliers;
|
•
|
intellectual property disputes and associated litigation expenses;
|
•
|
loss of key personnel or the shortage of available skilled workers;
|
•
|
the effects of competitive pricing pressures, including decreases in average selling prices of our products; and
|
•
|
changes in our tax incentive arrangements or structure, which may adversely affect our net tax expense in any quarter in which such an event occurs.
|
•
|
combining and rationalizing our respective product offerings;
|
•
|
preserving customer, supplier and other important relationships of both CyOptics and Avago;
|
•
|
improving gross margin and maintaining or improving average selling prices of CyOptics products;
|
•
|
coordinating and integrating operations in Mexico, a country in which Avago has not previously operated;
|
•
|
integrating financial forecasting and controls, procedures and reporting cycles; and
|
•
|
integrating employees and related HR systems and benefits, maintaining employee morale and retaining key employees.
|
•
|
inability of our manufacturers to develop manufacturing methods appropriate for our products, manufacturers' lack of sufficient capacity, or their unwillingness to devote adequate capacity, to produce our products and unanticipated changes to their manufacturing processes;
|
•
|
product and manufacturing costs that are higher than anticipated;
|
•
|
reduced control over product reliability and delivery schedules;
|
•
|
more complicated supply chains; and
|
•
|
time, expense and uncertainty in identifying and qualifying additional or replacement manufacturers.
|
•
|
cease the manufacture, use or sale of the infringing products, processes or technology;
|
•
|
pay substantial damages for past, present and future use of the infringing technology;
|
•
|
expend significant resources to develop non-infringing technology;
|
•
|
license technology from the third-party claiming infringement, which license may not be available on commercially reasonable terms, or at all;
|
•
|
enter into cross-licenses with our competitors, which could weaken our overall intellectual property portfolio and our ability to compete in particular product categories;
|
•
|
indemnify customers or distributors;
|
•
|
pay substantial damages to our customers or end users to discontinue use or replace infringing technology with non-infringing technology; or
|
•
|
relinquish intellectual property rights associated with one or more of our patent claims, if such claims are held invalid or otherwise unenforceable.
|
•
|
intellectual property rights that we presently employ in our business will not lapse or be invalidated, circumvented, challenged, or, in the case of third-party intellectual property rights, licensed or sub-licensed to us, be licensed to others;
|
•
|
our intellectual property rights will provide competitive advantages to us;
|
•
|
rights previously granted by third parties to intellectual property rights licensed or assigned to us, including portfolio cross-licenses, will not hamper our ability to assert our intellectual property rights against potential competitors or hinder the settlement of currently pending or future disputes;
|
•
|
any of our pending or future patent, trademark or copyright applications will be issued or have the coverage originally sought; or
|
•
|
our intellectual property rights will be enforced in certain jurisdictions where competition may be intense or where legal protection may be weak.
|
•
|
changes in political, regulatory, legal or economic conditions;
|
•
|
restrictive governmental actions, such as restrictions on the transfer or repatriation of funds and foreign investments and trade protection measures, including export duties and quotas and customs duties and tariffs;
|
•
|
disruptions of capital and trading markets;
|
•
|
changes in import or export licensing requirements;
|
•
|
transportation delays;
|
•
|
civil disturbances or political instability;
|
•
|
geopolitical turmoil, including terrorism, war or political or military coups;
|
•
|
changes in labor standards;
|
•
|
limitations on our ability under local laws to protect our intellectual property;
|
•
|
nationalization of businesses and expropriation of assets;
|
•
|
changes in tax laws;
|
•
|
currency fluctuations, which may result in our products becoming too expensive for foreign customers or foreign-sourced materials and services becoming more expensive for us; and
|
•
|
difficulty in obtaining distribution and support.
|
•
|
changes in environmental or health and safety laws or regulations;
|
•
|
the manner in which environmental or health and safety laws or regulations will be enforced, administered or interpreted;
|
•
|
our ability to enforce and collect under indemnity agreements and insurance policies relating to environmental liabilities; or
|
•
|
the cost of compliance with future environmental or health and safety laws or regulations or the costs associated with any future environmental claims, including the cost of clean-up of currently unknown environmental conditions.
|
•
|
actual or anticipated fluctuations in our financial condition and operating results;
|
•
|
issuance of new or updated research or reports by securities analysts;
|
•
|
fluctuations in the valuation and results of operations of our significant customers as well as companies perceived by investors to be comparable to us;
|
•
|
announcements of proposed acquisitions by us or our competitors;
|
•
|
announcements of, or expectations of additional debt or equity financing efforts;
|
•
|
share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; and
|
•
|
changes in our dividend or share repurchase policies.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares
Purchased as Part of Publicly Announced Plans or Programs (1) |
|
Shares Available Under Repurchase Programs
|
|
|||||
|
|
|
|
|
|
(in millions)
|
|
|||||||
February 4, 2013 - March 3, 2013
|
|
149,984
|
|
|
$
|
34.01
|
|
|
149,984
|
|
|
13.8
|
|
|
March 4, 2013 - March 31, 2013
|
|
167,995
|
|
|
$
|
34.12
|
|
|
167,995
|
|
|
13.6
|
|
|
April 1, 2013 - May 5, 2013
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
13.6
|
|
(2)
|
Total
|
|
317,979
|
|
|
$
|
34.07
|
|
|
317,979
|
|
|
|
|
(1)
|
All share repurchases during the period from February 4, 2013 to
May 5, 2013
were made in open market transactions, pursuant to our publicly announced 2012 share repurchase program. All repurchases were made in accordance with Rule 10b-8 under the Exchange Act.
|
(2)
|
The 2012 share repurchase program expired the day prior to the Company's 2013 AGM on April 10, 2013.
|
|
|
|
|
Incorporated by Reference Herein
|
|
|
|||
Exhibit Number
|
|
Description
|
|
Form
|
|
Filing Date
|
|
Filed Herewith
|
|
2.1
|
|
|
Agreement and Plan of Merger, dated as of April 10, 2013, by and among CyOptics, Avago Technologies Wireless (U.S.A.) Manufacturing Inc., Celsus Acquisition Corp., the Company, Avago Technologies Finance Pte. Ltd. and Shareholder Representative Services LLC*
|
|
Avago Technologies Limited Current Report on Form 8-K (Commission File No. 001-34428).
|
|
April 11, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
|
Memorandum and Articles of Association
|
|
Avago Technologies Limited Current Report on Form 8-K (Commission File No. 001-34428).
|
|
August 14, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1+
|
|
|
Form of Restricted Share Unit Agreement (Sell to Cover) Under Avago Technologies Limited 2009 Equity Incentive Award Plan.
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
Certification of Principal Executive Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
Certification of Principal Financial Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
32.2
|
|
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
101.INS†
|
|
XBRL Instance Document
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH†
|
|
XBRL Schema Document
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL†
|
|
XBRL Calculation Linkbase Document
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF†
|
|
XBRL Definition Linkbase Document
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB†
|
|
XBRL Labels Linkbase Document
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE†
|
|
XBRL Presentation Linkbase Document
|
|
|
|
|
|
X
|
+
|
Indicates management contract or compensatory plan or arrangement.
|
|
|
†
|
Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets at May 5, 2013 and October 28, 2012, (ii) Unaudited Condensed Consolidated Statements of Operations for the fiscal quarter and two fiscal quarters ended May 5, 2013 and April 29, 2012, (iii) Unaudited Condensed Consolidated Statements of Comprehensive Income for the fiscal quarter and two fiscal quarters ended May 5, 2013 and April 29, 2012, (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the two fiscal quarters ended May 5, 2013 and April 29, 2012 and (v) Notes to Unaudited Condensed Consolidated Financial Statements.
|
|
AVAGO TECHNOLOGIES LIMITED
|
||
|
By:
|
/s/ Anthony E. Maslowski
|
|
|
|
Anthony E. Maslowski
|
|
|
|
Vice President, Corporate Controller and interim Chief Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Avago Technologies Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Hock E. Tan
|
|
Hock E. Tan
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Avago Technologies Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Anthony E. Maslowski
|
|
Anthony E. Maslowski
|
|
Vice President, Corporate Controller and interim Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
June 7, 2013
|
/s/ Hock E. Tan
|
|
|
|
Hock E. Tan
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
June 7, 2013
|
/s/ Anthony E. Maslowski
|
|
|
|
Anthony E. Maslowski
|
|
|
|
Vice President, Corporate Controller and interim Chief Financial Officer
|
|
|
|
|
|