R
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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)
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98-0682363
(I.R.S. Employer
Identification No.)
|
1 Yishun Avenue 7
Singapore 768923
|
N/A
|
(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
R
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Accelerated filer
£
|
Non-accelerated filer
£
|
Smaller reporting company
£
|
|
|
(Do not check if a smaller reporting company)
|
|
|
Page
|
|
May 3,
2015 |
|
November 2,
2014 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,508
|
|
|
$
|
1,604
|
|
Trade accounts receivable, net
|
758
|
|
|
782
|
|
||
Inventory
|
490
|
|
|
519
|
|
||
Other current assets
|
316
|
|
|
302
|
|
||
Assets held-for-sale
|
4
|
|
|
628
|
|
||
Total current assets
|
4,076
|
|
|
3,835
|
|
||
Property, plant and equipment, net
|
1,344
|
|
|
1,158
|
|
||
Goodwill
|
1,596
|
|
|
1,596
|
|
||
Intangible assets, net
|
3,280
|
|
|
3,617
|
|
||
Other long-term assets
|
236
|
|
|
285
|
|
||
Total assets
|
$
|
10,532
|
|
|
$
|
10,491
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
501
|
|
|
$
|
515
|
|
Employee compensation and benefits
|
181
|
|
|
219
|
|
||
Other current liabilities
|
178
|
|
|
236
|
|
||
Current portion of long-term debt
|
46
|
|
|
46
|
|
||
Total current liabilities
|
906
|
|
|
1,016
|
|
||
Long-term liabilities:
|
|
|
|
||||
Convertible notes payable to related party
|
926
|
|
|
920
|
|
||
Long-term debt
|
3,926
|
|
|
4,543
|
|
||
Pension and post-retirement benefit obligations
|
481
|
|
|
506
|
|
||
Other long-term liabilities
|
232
|
|
|
263
|
|
||
Total liabilities
|
6,471
|
|
|
7,248
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Ordinary shares, no par value; 259,521,268 shares and 254,330,630 shares issued and outstanding on May 3, 2015 and November 2, 2014, respectively
|
2,319
|
|
|
2,009
|
|
||
Retained earnings
|
1,791
|
|
|
1,284
|
|
||
Accumulated other comprehensive loss
|
(49
|
)
|
|
(50
|
)
|
||
Total shareholders’ equity
|
4,061
|
|
|
3,243
|
|
||
Total liabilities and shareholders’ equity
|
$
|
10,532
|
|
|
$
|
10,491
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||||||
Net revenue
|
$
|
1,614
|
|
|
$
|
701
|
|
|
$
|
3,249
|
|
|
$
|
1,410
|
|
Cost of products sold:
|
|
|
|
|
|
|
|
||||||||
Cost of products sold
|
654
|
|
|
326
|
|
|
1,348
|
|
|
673
|
|
||||
Amortization of intangible assets
|
113
|
|
|
18
|
|
|
226
|
|
|
36
|
|
||||
Restructuring charges
|
1
|
|
|
—
|
|
|
3
|
|
|
5
|
|
||||
Total cost of products sold
|
768
|
|
|
344
|
|
|
1,577
|
|
|
714
|
|
||||
Gross margin
|
846
|
|
|
357
|
|
|
1,672
|
|
|
696
|
|
||||
Research and development
|
251
|
|
|
114
|
|
|
486
|
|
|
221
|
|
||||
Selling, general and administrative
|
108
|
|
|
67
|
|
|
225
|
|
|
141
|
|
||||
Amortization of intangible assets
|
59
|
|
|
8
|
|
|
118
|
|
|
15
|
|
||||
Restructuring charges
|
10
|
|
|
8
|
|
|
24
|
|
|
20
|
|
||||
Total operating expenses
|
428
|
|
|
197
|
|
|
853
|
|
|
397
|
|
||||
Operating income
|
418
|
|
|
160
|
|
|
819
|
|
|
299
|
|
||||
Interest expense
|
(53
|
)
|
|
(1
|
)
|
|
(107
|
)
|
|
(1
|
)
|
||||
Other income (expense), net
|
(1
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Income from continuing operations before income taxes
|
364
|
|
|
159
|
|
|
715
|
|
|
298
|
|
||||
Provision for income taxes
|
25
|
|
|
1
|
|
|
38
|
|
|
6
|
|
||||
Income from continuing operations
|
339
|
|
|
158
|
|
|
677
|
|
|
292
|
|
||||
Income from discontinued operations (including a gain on disposal of $14 million for the two fiscal quarters ended May 3, 2015), net of income taxes
|
5
|
|
|
—
|
|
|
18
|
|
|
—
|
|
||||
Net income
|
$
|
344
|
|
|
$
|
158
|
|
|
$
|
695
|
|
|
$
|
292
|
|
|
|
|
|
|
|
|
|
||||||||
Basic income per share:
|
|
|
|
|
|
|
|
||||||||
Income per share from continuing operations
|
$
|
1.31
|
|
|
$
|
0.63
|
|
|
$
|
2.63
|
|
|
$
|
1.17
|
|
Income per share from discontinued operations
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
0.07
|
|
|
$
|
—
|
|
Net income per share
|
$
|
1.33
|
|
|
$
|
0.63
|
|
|
$
|
2.70
|
|
|
$
|
1.17
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted income per share:
|
|
|
|
|
|
|
|
||||||||
Income per share from continuing operations
|
$
|
1.19
|
|
|
$
|
0.61
|
|
|
$
|
2.41
|
|
|
$
|
1.14
|
|
Income per share from discontinued operations
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
0.06
|
|
|
$
|
—
|
|
Net income per share
|
$
|
1.21
|
|
|
$
|
0.61
|
|
|
$
|
2.47
|
|
|
$
|
1.14
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
258
|
|
|
251
|
|
|
257
|
|
|
250
|
|
||||
Diluted
|
284
|
|
|
258
|
|
|
281
|
|
|
256
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared and paid per share
|
$
|
0.38
|
|
|
$
|
0.27
|
|
|
$
|
0.73
|
|
|
$
|
0.52
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||||||
Net income
|
$
|
344
|
|
|
$
|
158
|
|
|
$
|
695
|
|
|
$
|
292
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Unrealized gains and amendment on retirement-related benefit plans
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Reclassification to net income
|
—
|
|
|
—
|
|
|
1
|
|
|
(3
|
)
|
||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
||||
Comprehensive income
|
$
|
344
|
|
|
$
|
158
|
|
|
$
|
696
|
|
|
$
|
291
|
|
|
Two Fiscal Quarters Ended
|
||||||
|
May 3,
2015 |
|
May 4,
2014 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
695
|
|
|
$
|
292
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
456
|
|
|
118
|
|
||
Amortization of debt issuance costs and accretion of debt discount
|
14
|
|
|
—
|
|
||
Share-based compensation
|
106
|
|
|
54
|
|
||
Tax benefits from share-based compensation
|
73
|
|
|
12
|
|
||
Excess tax benefits from share-based compensation
|
(70
|
)
|
|
(11
|
)
|
||
Gain on sale of business
|
(14
|
)
|
|
—
|
|
||
Deferred taxes
|
(2
|
)
|
|
(2
|
)
|
||
Other
|
24
|
|
|
(3
|
)
|
||
Changes in assets and liabilities, net of acquisitions and disposals:
|
|
|
|
||||
Trade accounts receivable, net
|
24
|
|
|
99
|
|
||
Inventory
|
43
|
|
|
(16
|
)
|
||
Accounts payable
|
(23
|
)
|
|
(16
|
)
|
||
Employee compensation and benefits
|
(41
|
)
|
|
(12
|
)
|
||
Other current assets and current liabilities
|
(91
|
)
|
|
(11
|
)
|
||
Other long-term assets and long-term liabilities
|
(50
|
)
|
|
(24
|
)
|
||
Net cash provided by operating activities
|
1,144
|
|
|
480
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Proceeds from sale of business
|
650
|
|
|
—
|
|
||
Purchases of property, plant and equipment
|
(339
|
)
|
|
(125
|
)
|
||
Proceeds from disposal of property, plant and equipment
|
63
|
|
|
—
|
|
||
Proceeds from sale of investments
|
—
|
|
|
14
|
|
||
Purchases of investments
|
(9
|
)
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
365
|
|
|
(111
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Debt repayments
|
(617
|
)
|
|
—
|
|
||
Issuance of ordinary shares
|
130
|
|
|
53
|
|
||
Repurchases of ordinary shares
|
—
|
|
|
(12
|
)
|
||
Excess tax benefits from share-based compensation
|
70
|
|
|
11
|
|
||
Dividend payments to shareholders
|
(188
|
)
|
|
(130
|
)
|
||
Proceeds from government grants
|
—
|
|
|
2
|
|
||
Net cash used in financing activities
|
(605
|
)
|
|
(76
|
)
|
||
Net increase in cash and cash equivalents
|
904
|
|
|
293
|
|
||
Cash and cash equivalents at the beginning of period
|
1,604
|
|
|
985
|
|
||
Cash and cash equivalents at end of period
|
$
|
2,508
|
|
|
$
|
1,278
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||||||
Net income (Numerator):
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
339
|
|
|
$
|
158
|
|
|
$
|
677
|
|
|
$
|
292
|
|
Income from discontinued operations
|
5
|
|
|
—
|
|
|
18
|
|
|
—
|
|
||||
Net income
|
$
|
344
|
|
|
$
|
158
|
|
|
$
|
695
|
|
|
$
|
292
|
|
Shares (Denominator):
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average ordinary shares outstanding
|
258
|
|
|
251
|
|
|
257
|
|
|
250
|
|
||||
Add incremental shares for:
|
|
|
|
|
|
|
|
||||||||
Dilutive effect of share options, RSUs and ESPP rights
|
13
|
|
|
7
|
|
|
12
|
|
|
6
|
|
||||
Dilutive effect of Convertible Notes
|
13
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Shares used in diluted computation
|
284
|
|
|
258
|
|
|
281
|
|
|
256
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic income per share:
|
|
|
|
|
|
|
|
||||||||
Income per share from continuing operations
|
$
|
1.31
|
|
|
$
|
0.63
|
|
|
$
|
2.63
|
|
|
$
|
1.17
|
|
Income per share from discontinued operations
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
0.07
|
|
|
$
|
—
|
|
Net income per share
|
$
|
1.33
|
|
|
$
|
0.63
|
|
|
$
|
2.70
|
|
|
$
|
1.17
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted income per share:
|
|
|
|
|
|
|
|
||||||||
Income per share from continuing operations
|
$
|
1.19
|
|
|
$
|
0.61
|
|
|
$
|
2.41
|
|
|
$
|
1.14
|
|
Income per share from discontinued operations
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
0.06
|
|
|
$
|
—
|
|
Net income per share
|
$
|
1.21
|
|
|
$
|
0.61
|
|
|
$
|
2.47
|
|
|
$
|
1.14
|
|
|
May 3,
2015 |
|
November 2,
2014 |
||||
Finished goods
|
$
|
162
|
|
|
$
|
185
|
|
Work-in-process
|
243
|
|
|
250
|
|
||
Raw materials
|
85
|
|
|
84
|
|
||
Total inventory
|
$
|
490
|
|
|
$
|
519
|
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Book
Value
|
||||||
As of May 3, 2015:
|
|
|
|
|
|
||||||
Purchased technology
|
$
|
2,651
|
|
|
$
|
(908
|
)
|
|
$
|
1,743
|
|
Customer and distributor relationships
|
1,570
|
|
|
(358
|
)
|
|
1,212
|
|
|||
Other
(1)
|
282
|
|
|
(111
|
)
|
|
171
|
|
|||
Intangible assets subject to amortization
|
4,503
|
|
|
(1,377
|
)
|
|
3,126
|
|
|||
In-process research and development
|
154
|
|
|
—
|
|
|
154
|
|
|||
Total
|
$
|
4,657
|
|
|
$
|
(1,377
|
)
|
|
$
|
3,280
|
|
|
|
|
|
|
|
||||||
As of November 2, 2014:
|
|
|
|
|
|
||||||
Purchased technology
|
$
|
2,651
|
|
|
$
|
(682
|
)
|
|
$
|
1,969
|
|
Customer and distributor relationships
|
1,570
|
|
|
(264
|
)
|
|
1,306
|
|
|||
Other
(1)
|
275
|
|
|
(87
|
)
|
|
188
|
|
|||
Intangible assets subject to amortization
|
4,496
|
|
|
(1,033
|
)
|
|
3,463
|
|
|||
In-process research and development
|
154
|
|
|
—
|
|
|
154
|
|
|||
Total
|
$
|
4,650
|
|
|
$
|
(1,033
|
)
|
|
$
|
3,617
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||||||
Cost of products sold
|
$
|
113
|
|
|
$
|
18
|
|
|
$
|
226
|
|
|
$
|
36
|
|
Operating expenses
|
59
|
|
|
8
|
|
|
118
|
|
|
15
|
|
||||
Total amortization of intangible assets
|
$
|
172
|
|
|
$
|
26
|
|
|
$
|
344
|
|
|
$
|
51
|
|
Fiscal Year
|
|
|
||
2015 (remainder)
|
|
$
|
344
|
|
2016
|
|
626
|
|
|
2017
|
|
559
|
|
|
2018
|
|
437
|
|
|
2019
|
|
373
|
|
|
2020
|
|
313
|
|
|
Thereafter
|
|
474
|
|
|
|
|
$
|
3,126
|
|
Amortizable intangible assets:
|
|
Purchased technology
|
8
|
Customer and distributor relationships
|
7
|
Other
|
7
|
|
Pension Benefits
|
|||||||||||||
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
|||||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
|||||||
Service cost
|
$
|
1
|
|
|
$
|
—
|
|
|
1
|
|
|
$
|
1
|
|
Interest cost
|
15
|
|
|
1
|
|
|
31
|
|
|
1
|
|
|||
Expected return on plan assets
|
(19
|
)
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|||
Net actuarial loss and prior service cost
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||
Total net periodic benefit cost (income)
|
$
|
(3
|
)
|
|
$
|
1
|
|
|
(6
|
)
|
|
$
|
2
|
|
|
May 3,
2015 |
|
November 2,
2014 |
||||
Convertible notes liability component:
|
|
|
|
||||
Principal balance
|
$
|
1,000
|
|
|
$
|
1,000
|
|
Less: debt discount
|
74
|
|
|
80
|
|
||
Net carrying amount
|
$
|
926
|
|
|
$
|
920
|
|
|
|
|
|
||||
Equity component carrying amount
|
$
|
85
|
|
|
$
|
85
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||
|
May 3,
2015 |
|
May 3,
2015 |
||||
Contractual coupon interest
|
$
|
5
|
|
|
$
|
10
|
|
Accretion of debt discount
|
3
|
|
|
6
|
|
||
|
$
|
8
|
|
|
$
|
16
|
|
Fiscal Year
|
|
|
||
2015 (remainder)
|
|
$
|
23
|
|
2016
|
|
46
|
|
|
2017
|
|
46
|
|
|
2018
|
|
46
|
|
|
2019
|
|
46
|
|
|
2020
|
|
46
|
|
|
Thereafter
|
|
4,719
|
|
|
Total
|
|
$
|
4,972
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||||||
Cost of products sold
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
12
|
|
|
$
|
6
|
|
Research and development
|
27
|
|
|
10
|
|
|
46
|
|
|
18
|
|
||||
Selling, general and administrative
|
24
|
|
|
17
|
|
|
48
|
|
|
30
|
|
||||
Total share-based compensation expense
|
$
|
57
|
|
|
$
|
30
|
|
|
$
|
106
|
|
|
$
|
54
|
|
|
Time-Based Options
|
||||||||||
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||
Risk-free interest rate
|
1.3
|
%
|
|
1.3
|
%
|
|
1.3
|
%
|
|
1.3
|
%
|
Dividend yield
|
1.3
|
%
|
|
1.7
|
%
|
|
1.4
|
%
|
|
1.8
|
%
|
Volatility
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Expected term (in years)
|
4.0
|
|
|
4.3
|
|
|
4.0
|
|
|
4.2
|
|
|
ESPP Purchase Rights
|
||||||||||
|
Fiscal Quarter
Ended
|
|
Two Fiscal Quarters Ended
|
||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||
Risk-free interest rate
|
0.2
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
Dividend yield
|
1.2
|
%
|
|
1.7
|
%
|
|
1.3
|
%
|
|
2.0
|
%
|
Volatility
|
37.0
|
%
|
|
31.0
|
%
|
|
32.0
|
%
|
|
34.0
|
%
|
Expected term (in years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
Market-Based Awards
|
||||||||||
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||
Risk-free interest rate
|
1.3
|
%
|
|
2.3
|
%
|
|
1.4
|
%
|
|
2.3
|
%
|
Dividend yield
|
1.2
|
%
|
|
1.7
|
%
|
|
1.2
|
%
|
|
1.8
|
%
|
Volatility
|
35.0
|
%
|
|
45.0
|
%
|
|
36.0
|
%
|
|
45.0
|
%
|
Expected term (in years)
|
4.0
|
|
|
7.0
|
|
|
4.5
|
|
|
7.0
|
|
|
Option Awards Outstanding
|
|||||||||||
|
Number
Outstanding
|
|
Weighted-
Average
Exercise Price
Per Share
|
|
Weighted-
Average
Remaining
Contractual
Life (in years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Balance as of November 2, 2014
|
29
|
|
|
$
|
44.97
|
|
|
|
|
|
||
Granted
|
1
|
|
|
$
|
96.52
|
|
|
|
|
|
||
Exercised
|
(4
|
)
|
|
$
|
31.20
|
|
|
|
|
|
||
Cancelled
|
(1
|
)
|
|
$
|
65.27
|
|
|
|
|
|
||
Balance as of May 3, 2015
|
25
|
|
|
$
|
47.33
|
|
|
5.08
|
|
$
|
1,843
|
|
Vested as of May 3, 2015
|
9
|
|
|
$
|
32.88
|
|
|
4.31
|
|
$
|
821
|
|
Fully vested and expected to vest as of May 3, 2015
|
23
|
|
|
$
|
46.86
|
|
|
5.06
|
|
$
|
1,780
|
|
|
|
RSU Awards Outstanding
|
|||||||
|
|
Number
Outstanding
|
|
Weighted-
Average
Grant Date
Fair Market Value
|
|
Weighted-
Average
Remaining
Contractual
Life (in years)
|
|||
Balance as of November 2, 2014
|
|
4
|
|
|
$
|
48.82
|
|
|
|
Granted
|
|
3
|
|
|
$
|
115.77
|
|
|
|
Vested
|
|
(1
|
)
|
|
$
|
53.12
|
|
|
|
Forfeited
|
|
(1
|
)
|
|
$
|
65.64
|
|
|
|
Balance as of May 3, 2015
|
|
5
|
|
|
$
|
89.51
|
|
|
2.04
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||||||
Net revenue:
|
|
|
|
|
|
|
|
||||||||
Wireless communications
|
$
|
576
|
|
|
$
|
348
|
|
|
$
|
1,240
|
|
|
$
|
697
|
|
Enterprise storage
|
467
|
|
|
—
|
|
|
953
|
|
|
—
|
|
||||
Wired infrastructure
|
382
|
|
|
219
|
|
|
729
|
|
|
447
|
|
||||
Industrial & other
|
189
|
|
|
134
|
|
|
327
|
|
|
266
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income:
|
|
|
|
|
|
|
|
||||||||
Wireless communications
|
$
|
264
|
|
|
$
|
125
|
|
|
$
|
586
|
|
|
$
|
231
|
|
Enterprise storage
|
177
|
|
|
—
|
|
|
363
|
|
|
—
|
|
||||
Wired infrastructure
|
120
|
|
|
45
|
|
|
215
|
|
|
102
|
|
||||
Industrial & other
|
109
|
|
|
63
|
|
|
165
|
|
|
124
|
|
||||
Unallocated expenses
|
(252
|
)
|
|
(73
|
)
|
|
(510
|
)
|
|
(158
|
)
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
|
||||||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
|
||||||||
Total net revenue
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
—
|
|
|
Total costs and expenses including inventory purchases (1)
|
$
|
27
|
|
|
$
|
—
|
|
*
|
$
|
47
|
|
|
$
|
—
|
|
*
|
|
May 3,
2015 |
|
November 2,
2014 |
|
||||
Total receivables
|
$
|
7
|
|
|
$
|
14
|
|
|
Total payables (1)
|
$
|
8
|
|
|
$
|
8
|
|
|
Carrying value of the Convertible Notes and accrued interest
|
$
|
926
|
|
|
$
|
930
|
|
|
|
Total
|
|
2015 (remainder)
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
||||||||||||||||
Debt principal, interest and fees
|
$
|
6,002
|
|
|
$
|
109
|
|
|
$
|
208
|
|
|
$
|
216
|
|
|
$
|
214
|
|
|
$
|
211
|
|
|
$
|
209
|
|
|
$
|
4,835
|
|
|
Purchase commitments
|
$
|
389
|
|
|
$
|
385
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Operating lease obligations
|
$
|
145
|
|
|
$
|
14
|
|
|
$
|
21
|
|
|
$
|
16
|
|
|
$
|
14
|
|
|
$
|
11
|
|
|
$
|
8
|
|
|
$
|
61
|
|
|
•
|
We implemented planned cost reduction and restructuring activities, primarily in our enterprise storage segment, in connection with the acquisition of LSI. As a result, we recognized
$8 million
and
$22 million
of employee termination costs, primarily in operating expenses during the fiscal quarter and
two fiscal quarters
ended
May 3, 2015
, respectively.
|
•
|
We closed a fabrication facility in Italy related to our wired infrastructure segment. As a result, we recognized
$5 million
in cost of products sold and
$8 million
in operating expenses during the
two fiscal quarters
ended
May 4, 2014
related to employee termination costs.
|
•
|
We recognized
$6 million
of employee termination costs in operating expenses during the fiscal quarter and
two fiscal quarters
ended
May 4, 2014
related to Avago's pre-acquisition workforce in order to achieve annual cost savings from the LSI acquisition.
|
|
|
Employee Termination Costs
|
|
Leases and Other Exit Costs
|
|
Total
|
||||||
Balance as of November 2, 2014
|
|
$
|
34
|
|
|
$
|
6
|
|
|
$
|
40
|
|
Cost of product sold
|
|
3
|
|
|
—
|
|
|
3
|
|
|||
Operating expenses (a)
|
|
21
|
|
|
8
|
|
|
29
|
|
|||
Cash payments
|
|
(37
|
)
|
|
(9
|
)
|
|
(46
|
)
|
|||
Balance as of May 3, 2015 (b)
|
|
$
|
21
|
|
|
$
|
5
|
|
|
$
|
26
|
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||
|
May 3, 2015
|
|
May 3, 2015
|
||||
Net revenue
|
$
|
12
|
|
|
$
|
53
|
|
Income from discontinued operations, net of income taxes
|
$
|
5
|
|
|
$
|
18
|
|
|
Fiscal Quarter Ended
|
||||||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||||
|
(In millions)
|
|
(As a percentage of net revenue)
|
||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
1,614
|
|
|
$
|
701
|
|
|
100
|
%
|
|
100
|
%
|
Cost of products sold:
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
654
|
|
|
326
|
|
|
41
|
|
|
46
|
|
||
Amortization of intangible assets
|
113
|
|
|
18
|
|
|
7
|
|
|
3
|
|
||
Restructuring charges
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total cost of products sold
|
768
|
|
|
344
|
|
|
48
|
|
|
49
|
|
||
Gross margin
|
846
|
|
|
357
|
|
|
52
|
|
|
51
|
|
||
Research and development
|
251
|
|
|
114
|
|
|
15
|
|
|
16
|
|
||
Selling, general and administrative
|
108
|
|
|
67
|
|
|
7
|
|
|
10
|
|
||
Amortization of intangible assets
|
59
|
|
|
8
|
|
|
3
|
|
|
1
|
|
||
Restructuring charges
|
10
|
|
|
8
|
|
|
1
|
|
|
1
|
|
||
Total operating expenses
|
428
|
|
|
197
|
|
|
26
|
|
|
28
|
|
||
Operating income
|
418
|
|
|
160
|
|
|
26
|
|
|
23
|
|
||
Interest expense
|
(53
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
||
Other expense, net
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Income from continuing operations before income taxes
|
364
|
|
|
159
|
|
|
23
|
|
|
23
|
|
||
Provision for income taxes
|
25
|
|
|
1
|
|
|
2
|
|
|
—
|
|
||
Income from continuing operations
|
339
|
|
|
158
|
|
|
21
|
|
|
23
|
|
||
Income from discontinued operations, net of income taxes
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Net income
|
$
|
344
|
|
|
$
|
158
|
|
|
21
|
%
|
|
23
|
%
|
|
Two Fiscal Quarters Ended
|
||||||||||||
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||||
|
(In millions)
|
|
(As a percentage of net revenue)
|
||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
3,249
|
|
|
$
|
1,410
|
|
|
100
|
%
|
|
100
|
%
|
Cost of products sold:
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
1,348
|
|
|
673
|
|
|
42
|
|
|
48
|
|
||
Amortization of intangible assets
|
226
|
|
|
36
|
|
|
7
|
|
|
3
|
|
||
Restructuring charges
|
3
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||
Total cost of products sold
|
1,577
|
|
|
714
|
|
|
49
|
|
|
51
|
|
||
Gross margin
|
1,672
|
|
|
696
|
|
|
51
|
|
|
49
|
|
||
Research and development
|
486
|
|
|
221
|
|
|
15
|
|
|
16
|
|
||
Selling, general and administrative
|
225
|
|
|
141
|
|
|
7
|
|
|
10
|
|
||
Amortization of intangible assets
|
118
|
|
|
15
|
|
|
3
|
|
|
1
|
|
||
Restructuring charges
|
24
|
|
|
20
|
|
|
1
|
|
|
1
|
|
||
Total operating expenses
|
853
|
|
|
397
|
|
|
26
|
|
|
28
|
|
||
Operating income
|
819
|
|
|
299
|
|
|
25
|
|
|
21
|
|
||
Interest expense
|
(107
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
||
Other income, net
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Income from continuing operations before income taxes
|
715
|
|
|
298
|
|
|
22
|
|
|
21
|
|
||
Provision for income taxes
|
38
|
|
|
6
|
|
|
1
|
|
|
—
|
|
||
Income from continuing operations
|
677
|
|
|
292
|
|
|
21
|
|
|
21
|
|
||
Income from and gain on discontinued operations, net of income taxes
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Net income
|
$
|
695
|
|
|
$
|
292
|
|
|
21
|
%
|
|
21
|
%
|
|
Fiscal Quarter Ended
|
|
Two Fiscal Quarters Ended
|
||||||||
% of Net Revenue
|
May 3,
2015 |
|
May 4,
2014 |
|
May 3,
2015 |
|
May 4,
2014 |
||||
Wireless communications
|
36
|
%
|
|
50
|
%
|
|
38
|
%
|
|
49
|
%
|
Enterprise storage
|
29
|
|
|
—
|
|
|
29
|
|
|
—
|
|
Wired infrastructure
|
23
|
|
|
31
|
|
|
23
|
|
|
32
|
|
Industrial & other
|
12
|
|
|
19
|
|
|
10
|
|
|
19
|
|
Total net revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Fiscal Quarter Ended
|
|
|
|
|
|
Two Fiscal Quarters Ended
|
|
|
|
|
||||||||||||||||||
Net Revenue
|
|
May 3,
2015 |
|
May 4,
2014 |
|
Change
|
|
May 3,
2015 |
|
May 4,
2014 |
|
Change
|
||||||||||||||||||
Wireless communications
|
|
$
|
576
|
|
|
$
|
348
|
|
|
$
|
228
|
|
|
66
|
%
|
|
$
|
1,240
|
|
|
$
|
697
|
|
|
$
|
543
|
|
|
78
|
%
|
Enterprise storage
|
|
467
|
|
|
—
|
|
|
467
|
|
|
*
|
|
|
953
|
|
|
—
|
|
|
953
|
|
|
*
|
|
||||||
Wired infrastructure
|
|
382
|
|
|
219
|
|
|
163
|
|
|
74
|
%
|
|
729
|
|
|
447
|
|
|
282
|
|
|
63
|
%
|
||||||
Industrial & other
|
|
189
|
|
|
134
|
|
|
55
|
|
|
41
|
%
|
|
327
|
|
|
266
|
|
|
61
|
|
|
23
|
%
|
||||||
Total net revenue
|
|
$
|
1,614
|
|
|
$
|
701
|
|
|
$
|
913
|
|
|
|
|
$
|
3,249
|
|
|
$
|
1,410
|
|
|
$
|
1,839
|
|
|
|
|
|
Fiscal Quarter Ended
|
|
|
|
Two Fiscal Quarters Ended
|
|
|
|
||||||||||||||||
Operating Income
|
|
May 3,
2015 |
|
May 4,
2014 |
|
Change
|
|
May 3,
2015 |
|
May 4,
2014 |
|
Change
|
|
||||||||||||
Wireless communications
|
|
$
|
264
|
|
|
$
|
125
|
|
|
$
|
139
|
|
|
$
|
586
|
|
|
$
|
231
|
|
|
$
|
355
|
|
|
Enterprise storage
|
|
177
|
|
|
—
|
|
|
177
|
|
|
363
|
|
|
—
|
|
|
363
|
|
|
||||||
Wired infrastructure
|
|
120
|
|
|
45
|
|
|
75
|
|
|
215
|
|
|
102
|
|
|
113
|
|
|
||||||
Industrial & other
|
|
109
|
|
|
63
|
|
|
46
|
|
|
165
|
|
|
124
|
|
|
41
|
|
|
||||||
Unallocated expenses
|
|
(252
|
)
|
|
(73
|
)
|
|
(179
|
)
|
|
(510
|
)
|
|
(158
|
)
|
|
(352
|
)
|
|
||||||
Total operating income
|
|
$
|
418
|
|
|
$
|
160
|
|
|
$
|
258
|
|
|
$
|
819
|
|
|
$
|
299
|
|
|
$
|
520
|
|
|
|
Two Fiscal Quarters Ended
|
||||||
|
May 3,
2015 |
|
May 4,
2014 |
||||
Net cash provided by operating activities
|
$
|
1,144
|
|
|
$
|
480
|
|
Net cash provided by (used in) investing activities
|
365
|
|
|
(111
|
)
|
||
Net cash used in financing activities
|
(605
|
)
|
|
(76
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
904
|
|
|
$
|
293
|
|
•
|
we could be required to pay a termination fee of
$1 billion
to Broadcom under certain circumstances as described in the Broadcom Agreement;
|
•
|
we could be required to pay a termination fee of approximately
$333 million
to Broadcom in the event our shareholders fail to approve the Transaction;
|
•
|
we would have incurred significant costs in connection with the acquisition that we would be unable to recover;
|
•
|
we may be subject to legal proceedings related to the acquisition;
|
•
|
the failure to consummate the acquisition may result in negative publicity and a negative impression of us in the investment community; and
|
•
|
any disruptions to our business resulting from the announcement and pendency of the acquisition, including any adverse changes in our relationships with our customers, vendors and employees, may continue or intensify in the event the merger is not consummated.
|
•
|
improving LSI's operating margins;
|
•
|
modifications, if any, to tax structure;
|
•
|
leveraging banking relationships; and
|
•
|
rationalization of corporate structure.
|
•
|
the timing of launches by our customers of new products, such as mobile handsets, in which our products are included and 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;
|
•
|
utilization of our internal manufacturing facilities;
|
•
|
fluctuations in manufacturing yields;
|
•
|
the timing of acquisitions of, or making and exiting investments in, other entities, businesses or technologies;
|
•
|
our ability to successfully and timely integrate, and realize the benefits of, our acquisitions of LSI, PLX and Emulex and any other significant acquisitions we may make, including our pending acquisition of Broadcom;
|
•
|
interest rate and currency fluctuations;
|
•
|
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 IP sales and licensing arrangements;
|
•
|
new product announcements and introductions by us or our competitors;
|
•
|
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;
|
•
|
significant warranty claims, including those not covered by our suppliers or our insurers;
|
•
|
availability and cost of raw materials from our suppliers;
|
•
|
IP 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.
|
•
|
inability of our manufacturers to develop and maintain manufacturing methods appropriate for our products, manufacturers' unwillingness or inability to devote adequate capacity to produce our products, and unanticipated discontinuation of, or changes to, their relevant manufacturing processes;
|
•
|
inaccuracies in the forecasts of our product needs from our manufacturers;
|
•
|
product and manufacturing costs that are higher than anticipated;
|
•
|
reduced control over product reliability, quality, manufacturing yields and delivery schedules;
|
•
|
difficulties in obtaining insurance to fully cover all business interruption risk in respect of our suppliers;
|
•
|
more complicated supply chains; and
|
•
|
time, expense and uncertainty in identifying and qualifying additional or replacement manufacturers and suppliers.
|
•
|
cease the manufacture, use or sale of the infringing products, processes or technology and/or make changes to our processes or products;
|
•
|
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 IP portfolio and our ability to compete in particular product categories;
|
•
|
indemnify our customers or distributors;
|
•
|
pay substantial damages to our direct or end customers to discontinue use or replace infringing technology with non-infringing technology; or
|
•
|
relinquish IP rights associated with one or more of our patent claims, if such claims are held invalid or otherwise unenforceable.
|
•
|
IP rights that we presently employ in our business will not lapse or be invalidated, circumvented, challenged, or, in the case of third-party IP rights, licensed or sub-licensed to us, be licensed to others;
|
•
|
our IP rights will provide competitive advantages to us;
|
•
|
rights previously granted by third parties to IP rights licensed or assigned to us, including portfolio cross-licenses, will not hamper our ability to assert our IP 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 IP rights will be enforced in certain jurisdictions where competition may be intense or where legal protection may be weak.
|
•
|
jurisdictional mix of our income and the resulting tax effects of differing tax rates in different countries;
|
•
|
changes in the allocation of income and expenses, including adjustments related to changes in our corporate structure, acquisitions or tax law;
|
•
|
tax effects of increases in non-deductible employee compensation;
|
•
|
changes in transfer pricing regulations;
|
•
|
changes in tax laws including, in the United States, changes to the taxation of earnings of non-U.S. subsidiaries, the deductibility of expenses attributable to non-U.S. income and non-U.S. tax credit rules;
|
•
|
changes in accounting rules or principles and in the valuation of deferred tax assets and liabilities;
|
•
|
outcomes of income tax audits; and
|
•
|
expiration or lapses of tax credits or incentives.
|
•
|
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 IP;
|
•
|
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, particularly at sites that we may acquire from time to time.
|
•
|
making it more difficult for us to satisfy our obligations with respect to our Convertible Notes, including our repurchase obligations;
|
•
|
increasing our vulnerability to adverse general economic and industry conditions;
|
•
|
requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts, execution of our business strategy, acquisitions and other general corporate purposes;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in the economy and the semiconductor industry;
|
•
|
placing us at a competitive disadvantage compared to our competitors with less indebtedness;
|
•
|
exposing us to interest rate risk to the extent of our variable rate indebtedness; and
|
•
|
making it more difficult to borrow additional funds in the future to fund growth, acquisitions, working capital, capital expenditures and other purposes.
|
•
|
incur additional indebtedness and issue preferred or redeemable shares;
|
•
|
incur or create liens;
|
•
|
consolidate, merge or transfer all or substantially all of their assets;
|
•
|
make investments, acquisitions, loans or advances or guarantee indebtedness;
|
•
|
transfer or sell certain assets;
|
•
|
engage in sale and lease back transactions;
|
•
|
pay dividends or make other distributions on, redeem or repurchase shares or make other restricted payments;
|
•
|
engage in transactions with affiliates; and
|
•
|
prepay certain other indebtedness.
|
•
|
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, including the announcement of our pending acquisition of Broadcom;
|
•
|
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.
|
|
AVAGO TECHNOLOGIES LIMITED
|
||
|
By:
|
/s/ Anthony E. Maslowski
|
|
|
|
Anthony E. Maslowski
|
|
|
|
Chief Financial Officer
|
|
|
|
|
Incorporated by Reference Herein
|
|
|
|||
Exhibit Number
|
|
Description
|
|
Form
|
|
Filing Date
|
|
Filed Herewith
|
|
2.1*
|
|
|
Agreement and Plan of Merger, dated December 15, 2013, by and among LSI Corporation, Avago Technologies Limited, Avago Technologies Wireless (U.S.A.) Manufacturing, Inc. and Leopold Merger Sub, Inc.
|
|
Avago Technologies Limited Current Report on Form 8-K/A (Commission File No. 001-34428).
|
|
December 16, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
2.2*
|
|
|
Agreement and Plan of Merger, dated May 28, 2015, by and among Pavonia Limited, Avago Technologies Limited, Safari Cayman L.P., Avago Technologies Cayman Holdings Ltd., Avago Technologies Cayman Finance Limited, Buffalo CS Merger Sub, Inc., Buffalo UT Merger Sub, Inc. and Broadcom Corporation.
|
|
Avago Technologies Limited Current Report on Form 8-K (Commission File No. 001-34428).
|
|
May 29, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
|
Memorandum and Articles of Association
|
|
Avago Technologies Limited Current Report on Form 8-K (Commission File No. 001-34428).
|
|
August 14, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
Form of Specimen Share Certificate for Registrant’s Ordinary Shares.
|
|
Amendment No. 3 to Avago Technologies Limited Registration Statement on Form S-1 (Commission File No. 333-153127)
|
|
July 14, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
|
Indenture, dated as of May 6, 2014, between Avago Technologies Limited and U.S. Bank National Association as Trustee, related to 2.0% Convertible Senior Notes due 2021.
|
|
Avago Technologies Limited Current Report on Form 8-K (Commission File No. 001-34428).
|
|
May 6, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
4.3
|
|
|
Form of Note (included in Exhibit 4.2).
|
|
Avago Technologies Limited Current Report on Form 8-K (Commission File No. 001-34428)
|
|
May 6, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
4.4
|
|
|
Registration Rights Agreement, dated as of May 6, 2014, related to 2.0% Convertible Senior Notes due 2021 among Avago Technologies Limited, SLP Argo I Ltd. and SLP Argo II Ltd.
|
|
Avago Technologies Limited Current Report on Form 8-K (Commission File No. 001-34428).
|
|
May 6, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1+
|
|
|
Continuing Employment Offer Letter, dated June 3, 2015, between Avago Technologies Limited and Charlie Kawwas.
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
10.2+
|
|
|
Severance Benefits Agreement, dated June 3, 2015, between Avago Technologies Limited and Charlie Kawwas.
|
|
|
|
|
|
X
|
|
|
|
|
Incorporated by Reference Herein
|
|
|
|||
Exhibit Number
|
|
Description
|
|
Form
|
|
Filing Date
|
|
Filed Herewith
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
99.1
|
|
|
Support Agreement, dated as of May 28, 2015, by and among Pavonia Limited, Avago Technologies Limited and Dr. Henry T. Nicholas III (together with certain of his affiliated entities).
|
|
Avago Technologies Limited Current Report on Form 8-K (Commission File No. 001-34428).
|
|
May 29, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
99.1
|
|
|
Support Agreement, dated as of May 28, 2015, by and among Pavonia Limited, Avago Technologies Limited and Dr. Henry Samueli (together with certain of his affiliated entities).
|
|
Avago Technologies Limited Current Report on Form 8-K (Commission File No. 001-34428).
|
|
May 29, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS†
|
|
XBRL Instance Document
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH†
|
|
XBRL Schema Document
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL†
|
|
XBRL Calculation Linkbase Document
|
|
|
|
|
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X
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101.DEF†
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XBRL Definition Linkbase Document
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X
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101.LAB†
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XBRL Labels Linkbase Document
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X
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101.PRE†
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XBRL Presentation Linkbase Document
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X
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*
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Pursuant to Item 601(b)(2) of Regulation S-K promulgated by the SEC, certain exhibits and schedules to the Agreement and Plan of Merger have been omitted. Avago hereby agrees to furnish supplementally to the SEC, upon its request, any or all of such omitted exhibits or schedules.
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+
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Indicates a management contract or compensatory plan or arrangement.
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†
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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 3, 2015 and November 2, 2014, (ii) Unaudited Condensed Consolidated Statements of Operations for the fiscal quarter and two fiscal quarters ended May 3, 2015 and May 4, 2014, (iii) Unaudited Condensed Consolidated Statements of Comprehensive Income for the fiscal quarter and two fiscal quarters ended May 3, 2015 and May 4, 2014, (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the fiscal quarter and two fiscal quarters ended May 3, 2015 and May 4, 2014 and (v) Notes to Unaudited Condensed Consolidated Financial Statements.
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1.
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Effective as of July 1, 2015, your employment will be transferred to Avago Technologies U.S. Inc., our U.S. subsidiary, and you will be based in San Jose, California reporting to me. Your annual base salary is US$465,000 (paid on a biweekly basis). All compensation will be subject to applicable taxes and withholdings. Subject to, and with effect from, approval by the Board of Directors of Avago Technologies Limited (the “Company”), you will be Senior Vice President and Chief Sales Officer, as well as an executive officer, of the Company.
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2.
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You will be entitled to participate in the Avago Technologies Performance Bonus plan (APB) at an annual target variable percentage of 75% of your annual base salary. Your participation in the APB is entirely discretionary and Avago Technologies reserves the right to withdraw, vary or amend the plan at any time. Participation in the plan in one year does not guarantee you the right to participate in the plan in future years. A copy of the plan document is available on the Avago HR intranet portal. The bonus amount stated above is a target amount and therefore is not guaranteed. The actual annual payout under the APB will be based on the attainment of targets which have been set at both the Corporate and Divisional/Functional levels.
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3.
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In consideration of the relocation of you and your family to the United States, we will provide you with a one-time lump sum payment of US$300,000, less applicable taxes and withholdings. The relocation must be completed on or prior to September 1, 2015 in order for you to be eligible for the relocation payment, which shall be paid to you within thirty (30) days following its completion. You acknowledge and agree that this relocation payment is taxable to you and shall not be grossed up by the Company. You further acknowledge and agree that the payment provided to you pursuant to this Section 3 shall not be earned prior to the first anniversary of the [relocation date] and will only be earned on the first anniversary of the [relocation date] if you remain continuously employed with the Company through the first anniversary of the [relocation date]. In the event you terminate employment with the Company for any reason prior to the first anniversary of the [relocation date], you hereby agree to repay to the Company the payment made to you by the Company pursuant to this Section 3 reduced as to 1/12th of
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4.
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Avago will pay for preparation of your 2015 US tax returns and perform or cause to be performed a tax differential analysis for 2015 related to your employment in Canada and the United States for portions of the 2015 tax year. While you will be responsible for payment of U.S. Federal and state income taxes, you will also be subject to Canadian income taxes. We agree to make a one-time tax differential payment to you equal to the excess between (i) your Canadian and U.S. Federal and state income tax liability during the applicable period of 2015; and (ii) your Canadian income tax liability assuming you were subject only to Canadian income taxes during the applicable period of 2015. You acknowlege and agree that this tax differential payment is taxable to you and shall not be grossed up by the Company.
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5.
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Effective as of July 1, 2015, you will be eligible to participate in Avago Technologies’ U.S. benefit plans and perquisites on at least the same level as the company’s other senior executive officers, in accordance with our policies. Please note that Avago Technologies reserves the right to terminate, modify, or add to their benefits and benefit plans at any time (subject in each case to the terms of such plans). We will also be providing you with severance benefits under the Avago Technologies Limited Severance Benefit Agreement, a copy of which is enclosed.
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6.
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Your continued employment with Avago Technologies will be consistent with the terms and conditions set forth in this letter of continuing employment and in accordance with Avago Technologies’ standard employment policies and practices. Adherence to general standards of business conduct, as well as all other applicable Avago Technologies policies and procedures, including subsequent changes, is required of all employees.
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7.
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This letter of continuing employment and the benefits and agreements specified herein is our binding agreement with respect to your employment and its terms merging and superseding in their entirety all other or prior offers, agreements and communications, whether written or oral, by you and Avago Technologies relating to the terms and conditions of your employment, except as set forth above. In addition, the invention assignment and confidentiality agreement between you and Avago Technologies will remain in effect.
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/s/ Charlie Kawwas
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06/09/2015
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Signature: Charlie Kawwas
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Date Signed
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Avago Technologies Limited;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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/s/ Hock E. Tan
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Hock E. Tan
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Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Avago Technologies Limited;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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/s/ Anthony E. Maslowski
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Anthony E. Maslowski
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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June 10, 2015
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/s/ Hock E. Tan
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Hock E. Tan
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Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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June 10, 2015
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/s/ Anthony E. Maslowski
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Anthony E. Maslowski
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Chief Financial Officer
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