UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(MARK ONE)



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

For the quarterly period ended ~~July 31, 2016~~April 30, 2017



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

For the transition period from to



State or Other Jurisdiction of Incorporation or Organization	Exact Name of Registrant as Specified in Its Charter Address of Principal Executive Offices Registrant’s telephone number, including area code	Commission File Number	IRS Employer Identification No.
Singapore	Broadcom Limited	001-37690	98-1254807
	1 Yishun Avenue 7 Singapore 768923
	(65) 6755-7888
Cayman Islands	Broadcom Cayman L.P.	333-2025938	98-1254815
	c/o Broadcom Limited 1 Yishun Avenue 7 Singapore 768923
	(65) 6755-7888

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Broadcom Limited: YES þ NO ¨ Broadcom Cayman L.P. : YES þ NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Broadcom Limited: YES þ NO ¨ Broadcom Cayman L.P. : YES þ NO ¨

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



Broadcom Limited:	Large accelerated filer þ	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨	Emerging growth company ¨
Broadcom Cayman L.P.:	Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer þ	Smaller reporting company ¨	Emerging growth company ¨
			(Do not check if a smaller reporting company)

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Broadcom Limited: YES ¨ NO þ Broadcom Cayman L.P. : YES ¨ NO þ

As of ~~August~~May 26, ~~2016~~2017, Broadcom Limited had ~~397,329,506~~406,592,633 of its ordinary shares, no par value per share, outstanding.

As of ~~August~~May 26, ~~2016~~2017, Broadcom Cayman L.P. had ~~390,237,855~~390,736,766 common partnership units outstanding (all of which are owned by Broadcom Limited) and ~~22,804,591~~22,305,680 restricted exchangeable partnership units outstanding.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31, 2016~~April 30, 2017 of Broadcom Limited and Broadcom Cayman L.P. Unless stated otherwise or the context otherwise requires, references to “Broadcom,” “we,” “our” and “us” mean Broadcom Limited and its consolidated subsidiaries, including Broadcom Cayman L.P. References to the “Partnership” mean Broadcom Cayman L.P. and its consolidated subsidiaries. Financial information and results of operations presented ~~in the Form 10-Q~~ for ~~the period~~periods prior to February 1, 2016 relate only to Avago Technologies Limited, our predecessor, and relate to Broadcom and the Partnership for the ~~period~~periods after February 1, 2016.

As of July 31, 2016, Broadcom owned approximately 95% of the Partnership, represented by common partnership units, or Common Units, and is the sole general partner of the Partnership, or the General Partner. The balance of the partnership units are held by certain former Broadcom Corporation shareholders of common stock, or the Limited Partners, in the form of restricted exchangeable limited partnership units, or Partnership REUs. Broadcom Corporation was indirectly acquired by Broadcom on February 1, 2016 (refer to Note 1. “Overview, Basis of Presentation and Significant Accounting Policies” for additional information).

As of April 30, 2017, Broadcom Limited owned approximately 95% of the Partnership (represented by common partnership units, or Common Units) and is the sole general partner of the Partnership, or the General Partner. The balance of the partnership units represents restricted exchangeable limited partnership units, or Partnership REUs, the holders of which are referred to as the Limited Partners. As the General Partner, Broadcom has the exclusive right, power and authority to manage, control, administer and operate the business and affairs and to make decisions regarding the undertaking and business of the Partnership in accordance with the amended and restated exempted limited partnership agreement, as amended from time to time, and applicable laws. There is no board of directors of the Partnership.

Shareholders’ equity, partners’ capital and the Limited ~~Partner’s~~Partners’ noncontrolling interest in Broadcom are the primary areas of difference between the unaudited condensed consolidated financial statements of Broadcom and those of the Partnership. The Partnership’s capital consists of Common Units owned by Broadcom and Partnership REUs owned by the Limited Partners. The Partnership REUs are accounted for in partners’ capital in the Partnership’s financial statements and as noncontrolling interest in shareholders’ equity in Broadcom’s financial statements.

~~In order to highlight the~~The material differences between Broadcom and the Partnership ~~there~~ are discussed in various sections in this report, ~~that separately discuss Broadcom and the Partnership,~~ including separate financial statements (but combined footnotes), separate disclosure controls and procedures sections, separate ~~certification~~certifications of periodic report under Section 302 of the Sarbanes-Oxley Act of 2002 and separate ~~certification~~certifications pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. In the sections that combine disclosure for Broadcom and the Partnership, this report refers to actions or holdings as being actions or holdings of Broadcom.

Broadcom consolidates the Partnership for financial reporting purposes, and neither Broadcom nor the Partnership has material assets other than its interests in their subsidiaries. Therefore, while shareholders’ equity and partners’ capital differ as discussed above, the assets of Broadcom and the Partnership are materially the same on their respective financial statements.

BROADCOM LIMITED AND BROADCOM CAYMAN L.P.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended ~~July 31, 2016~~April 30, 2017

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements — Unaudited

BROADCOM LIMITED AND BROADCOM CAYMAN L.P.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED



	Page
Financial Statements of Broadcom Limited:
Condensed Consolidated Balance Sheets - Unaudited	5
Condensed Consolidated Statements of Operations - Unaudited	6
Condensed Consolidated Statements of Comprehensive Income (Loss) - Unaudited	7
Condensed Consolidated Statements of Cash Flows - Unaudited	8
~~Condensed Consolidated Statement of Shareholders’ Equity - Unaudited~~	9
Financial Statements of Broadcom Cayman L.P.:
Condensed Consolidated Balance Sheets - Unaudited	109
Condensed Consolidated Statements of Operations - Unaudited	1110
Condensed Consolidated Statements of Comprehensive Income (Loss) - Unaudited	1211
Condensed Consolidated Statements of Cash Flows - Unaudited	13
~~Condensed Consolidated Statement of Partners’ Capital - Unaudited~~	1412
Notes to Unaudited Condensed Consolidated Financial Statements (Broadcom Limited and Broadcom Cayman L.P.)	1513

BROADCOM LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED

(in millions, except share amounts)


	July 31, 2016			November 1, 2015			April 30, 2017			October 30, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	1,961		$	1,822		$	4,254		$	3,097
Short-term investments							200			—
Trade accounts receivable, net	2,181			1,019			2,073			2,181
Inventory	1,306			524			1,311			1,400
Assets held-for-sale	246			22
Other current assets	354			372			630			447
Total current assets	6,048			3,759			8,468			7,125
Long-term assets:
Property, plant and equipment, net	2,573			1,460			2,762			2,509
Goodwill	24,784			1,674			24,706			24,732
Intangible assets, net	15,819			3,277			13,016			15,068
Other long-term assets	528			345			897			532
Total assets	$	49,752		$	10,515		$	49,849		$	49,966
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,127		$	617		$	925		$	1,261
Employee compensation and benefits	424			250			464			517
Current portion of long-term debt	334			46			—			454
Other current liabilities	843			206			663			846
Total current liabilities	2,728			1,119			2,052			3,078
Long-term liabilities:
Long-term debt	13,381			3,826			13,567			13,188
Pension and post-retirement benefit obligations	468			475			508			531
Other long-term liabilities	10,671			381			11,379			11,293
Total liabilities	27,248			5,801			27,506			28,090
Commitments and contingencies (Note 12)
Shareholders’ equity:
Ordinary shares, no par value; 396,440,929 shares and 276,259,120 shares issued and outstanding on July 31, 2016 and November 1, 2015, respectively	18,926			2,547
Non-economic voting preference shares, no par value; 22,804,591 shares and no shares issued and outstanding on July 31, 2016 and November 1, 2015, respectively	—			—
Retained earnings	619			2,240
Ordinary shares, no par value; 406,003,761 shares and 398,281,461 shares issued and outstanding on April 30, 2017 and October 30, 2016, respectively							19,869			19,241
Non-economic voting preference shares, no par value; 22,348,728 shares and 22,804,591 shares issued and outstanding on April 30, 2017 and October 30, 2016, respectively							—			—
Accumulated deficit							(311		)	(215		)
Accumulated other comprehensive loss	(72		)	(73		)	(133		)	(134		)
Total Broadcom Limited shareholders’ equity	19,473			4,714			19,425			18,892
Noncontrolling interest	3,031			—			2,918			2,984
Total shareholders’ equity	22,504			4,714			22,343			21,876
Total liabilities and shareholders’ equity	$	49,752		$	10,515		$	49,849		$	49,966

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

BROADCOM LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED

(in millions, except per share amounts)


	Fiscal Quarter Ended						Three Fiscal Quarters Ended						Fiscal Quarter Ended						Two Fiscal Quarters Ended
	July 31, 2016			August 2, 2015			July 31, 2016			August 2, 2015			April 30, 2017			May 1, 2016			April 30, 2017			May 1, 2016
Net revenue	$	3,792		$	1,735		$	9,104		$	4,984		$	4,190		$	3,541		$	8,329		$	5,312
Cost of products sold:
Cost of products sold	1,520			694			3,656			2,038			1,564			1,437			3,137			2,136
Purchase accounting effect on inventory	271			26			1,099			30			1			828			1			828
Amortization of intangible assets	211			129			539			355
Amortization of acquisition-related intangible assets													639			198			1,198			328
Restructuring charges	8			2			41			5			10			32			16			33
Total cost of products sold	2,010			851			5,335			2,428			2,214			2,495			4,352			3,325
Gross margin	1,782			884			3,769			2,556			1,976			1,046			3,977			1,987
Research and development	814			276			1,868			762			829			787			1,637			1,054
Selling, general and administrative	230			143			582			368			204			238			405			352
Amortization of intangible assets	728			68			1,517			186
Amortization of acquisition-related intangible assets													442			735			882			789
Restructuring, impairment and disposal charges	274			98			592			122			27			287			73			318
Total operating expenses	2,046			585			4,559			1,438			1,502			2,047			2,997			2,513
Operating income (loss)	(264		)	299			(790		)	1,118			474			(1,001		)	980			(526		)
Interest expense	(139		)	(43		)	(479		)	(150		)	(112		)	(256		)	(223		)	(340		)
Gain (loss) on extinguishment of debt	(21		)	3			(74		)	(10		)
Other income, net	4			8			1			24
Loss on extinguishment of debt													—			(53		)	(159		)	(53		)
Other income (expense), net													3			(6		)	34			(3		)
Income (loss) from continuing operations before income taxes	(420		)	267			(1,342		)	982			365			(1,316		)	632			(922		)
Provision for (benefit from) income taxes	(117		)	23			(199		)	61
Benefit from income taxes													(103		)	(99		)	(93		)	(82		)
Income (loss) from continuing operations	(303		)	244			(1,143		)	921			468			(1,217		)	725			(840		)
Income (loss) from discontinued operations, net of income taxes	(12		)	(4		)	(50		)	14
Loss from discontinued operations, net of income taxes													(4		)	(38		)	(9		)	(38		)
Net income (loss)	(315		)	240			(1,193		)	935			464			(1,255		)	716			(878		)
Net loss attributable to noncontrolling interest	(17		)	—			(86		)	—
Net income (loss) attributable to noncontrolling interest													24			(69		)	37			(69		)
Net income (loss) attributable to ordinary shares	$	(298	)	$	240		$	(1,107	)	$	935		$	440		$	(1,186	)	$	679		$	(809	)

Basic income (loss) per share attributable to ordinary shares:
Income (loss) per share from continuing operations	$	(0.72	)	$	0.92		$	(2.99	)	$	3.54		$	1.10		$	(2.93	)	$	1.72		$	(2.31	)
Income (loss) per share from discontinued operations	(0.03		)	(0.01		)	(0.13		)	0.06
Loss per share from discontinued operations													(0.01		)	(0.09		)	(0.03		)	(0.10		)
Net income (loss) per share	$	(0.75	)	$	0.91		$	(3.12	)	$	3.60		$	1.09		$	(3.02	)	$	1.69		$	(2.41	)

Diluted income (loss) per share attributable to ordinary shares:
Income (loss) per share from continuing operations	$	(0.72	)	$	0.85		$	(3.09	)	$	3.25		$	1.06		$	(2.93	)	$	1.65		$	(2.43	)
Income (loss) per share from discontinued operations	(0.03		)	(0.01		)	(0.13		)	0.05
Loss per share from discontinued operations													(0.01		)	(0.09		)	(0.02		)	(0.11		)
Net income (loss) per share	$	(0.75	)	$	0.84		$	(3.22	)	$	3.30		$	1.05		$	(3.02	)	$	1.63		$	(2.54	)

Weighted-average shares:
Basic	396			265			355			260			403			392			401			335
Diluted	419			287			370			283			442			415			440			346

Cash dividends declared and paid per share	$	0.50		$	0.40		$	1.43		$	1.13		$	1.02		$	0.49		$	2.04		$	0.93

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

BROADCOM LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) — UNAUDITED

(in millions)


	Fiscal Quarter Ended					Three Fiscal Quarters Ended					Fiscal Quarter Ended					Two Fiscal Quarters Ended
	July 31, 2016			August 2, 2015		July 31, 2016			August 2, 2015		April 30, 2017		May 1, 2016			April 30, 2017		May 1, 2016
Net income (loss)	$	(315	)	$	240	$	(1,193	)	$	935	$	464	$	(1,255	)	$	716	$	(878	)
Other comprehensive income, net of tax:
Gains on defined benefit pension plans and post-retirement plans	1			—		1			—
Reclassification to net income (loss)	—			—		—			1		1		—			1		—
Other comprehensive income	1			—		1			1		1		—			1		—
Comprehensive income (loss)	(314		)	240		(1,192		)	936		465		(1,255		)	717		(878		)
Comprehensive loss attributable to noncontrolling interest	(17		)	—		(86		)	—
Comprehensive income (loss) attributable to noncontrolling interest											24		(69		)	37		(69		)
Comprehensive income (loss) attributable to ordinary shares	$	(297	)	$	240	$	(1,106	)	$	936	$	441	$	(1,186	)	$	680	$	(809	)

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

BROADCOM LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED

(in millions)

Three Fiscal Quarters Ended
July 31,
2016 August 2,
2015
Cash flows from operating activities:
Net income (loss) $ (1,193 ) $ 935
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 2,342
712
Share-based compensation 474
169
Excess tax benefits from share-based compensation (68 ) (102 )
Non-cash portion of debt extinguishment loss, net 51
10
Non-cash restructuring, impairment and disposal charges 268
75
Gain on sales of businesses (27 ) (14 )
Deferred taxes (353 ) (35 )
Amortization of debt issuance costs and accretion of debt discount 27
18
Other 17
10
Changes in assets and liabilities, net of acquisitions and disposals:
Trade accounts receivable, net (491 ) 22
Inventory 1,088
63
Accounts payable (61 ) (52 )
Employee compensation and benefits 70
(12 )
Other current assets and current liabilities (38 ) (25 )
Other long-term assets and long-term liabilities (47 ) (38 )
Net cash provided by operating activities 2,059
1,736
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired (10,055 ) (394 )
Proceeds from sales of businesses 698
650
Purchases of property, plant and equipment (530 ) (487 )
Proceeds from disposals of property, plant and equipment 5
63
Purchases of investments (58 ) (9 )
Proceeds from sales and maturities of investments 89
—
Other (15 ) —
Net cash used in investing activities (9,866 ) (177 )
Cash flows from financing activities:
Proceeds from term loan borrowings 15,926
—
Debt repayments (6,145 ) (1,627 )
Payments of assumed debt (1,475 ) (178 )
Debt issuance costs (108 ) —
Dividend payments (537 ) (292 )
Issuance of ordinary shares 217
186
Excess tax benefits from share-based compensation 68
102
Net cash provided by (used in) financing activities 7,946
(1,809 )
Net change in cash and cash equivalents 139
(250 )
Cash and cash equivalents at the beginning of period 1,822
1,604
Cash and cash equivalents at end of period $ 1,961
$ 1,354

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

~~BROADCOM LIMITED~~

~~CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY— UNAUDITED~~

~~(in millions)~~

Ordinary Shares Non-Economic Voting Preference Shares
Retained
Earnings

Accumulated
Other
Comprehensive
Loss
Non-controlling Interest
Total
Shareholders’
Equity
Shares Amount Shares Amount
Balance as of November 1, 2015 276
$ 2,547
—
$ —
$ 2,240
$ (73 ) $ —
$ 4,714
Issuance of ordinary shares upon the acquisition of Broadcom Corporation 112
15,438
—
—
—
—
—
15,438
Issuance by the Partnership of restricted exchangeable partnership units upon the acquisition of Broadcom Corporation —
—
—
—
—
—
3,140
3,140
Issuance of non-economic voting preference shares —
—
23
—
—
—
—
—
Issuance of ordinary shares in connection with equity incentive plans 8
217
—
—
—
—
—
217
Share-based compensation —
474
—
—
—
—
—
474
Excess tax benefits from share-based compensation —
68
—
—
—
—
—
68
Cash dividends paid to ordinary shareholders —
—
—
—
(514 ) ��
—
(514 )
Cash distribution paid by the Partnership on restricted exchangeable partnership units —
—
—
—
—
—
(23 ) (23 )
Fair value of partially vested equity awards assumed in connection with the acquisition of Broadcom Corporation —
182
—
—
—
—
—
182
Changes in accumulated other comprehensive loss:

Gains on defined benefit pension plans and post-retirement plans —
—
—
—
—
1
—
1
Net loss —
—
—
—
(1,107 ) —
(86 ) (1,193 )
Balance as of July 31, 2016 396
$ 18,926
23
$ —
$ 619
$ (72 ) $ 3,031
$ 22,504



	Two Fiscal Quarters Ended
	April 30, 2017			May 1, 2016
Cash flows from operating activities:
Net income (loss)	$	716		$	(878	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	2,307			1,284
Share-based compensation	418			255
Excess tax benefits from share-based compensation	—			(58		)
Deferred taxes and other non-cash tax expense	(111		)	(172		)
Non-cash portion of debt extinguishment loss	159			30
Non-cash restructuring, impairment and disposal charges	40			44
Gain on disposition of assets	(23		)	—
Amortization of debt issuance costs and accretion of debt discount	14			17
Other	8			26
Changes in assets and liabilities, net of acquisitions and disposals:
Trade accounts receivable, net	108			(169		)
Inventory	96			920
Accounts payable	(251		)	(217		)
Employee compensation and benefits	(53		)	(51		)
Other current assets and current liabilities	(391		)	86
Other long-term assets and long-term liabilities	(101		)	(21		)
Net cash provided by operating activities	2,936			1,096
Cash flows from investing activities:
Purchases of property, plant and equipment	(581		)	(298		)
Purchases of investments	(200		)	(59		)
Acquisitions of businesses, net of cash acquired	(37		)	(10,035		)
Proceeds from sales of businesses	10			68
Proceeds from sales and maturities of investments	—			32
Other	(4		)	—
Net cash used in investing activities	(812		)	(10,292		)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	13,550			15,926
Debt repayments	(13,668		)	(4,839		)
Payment of assumed debt	—			(1,475		)
Payment of debt issuance costs	(127		)	(108		)
Dividend and distribution payments	(868		)	(326		)
Issuance of ordinary shares	150			179
Excess tax benefits from share-based compensation	—			58
Payment of capital lease obligations	(4		)	—
Net cash provided by (used in) financing activities	(967		)	9,415
Net change in cash and cash equivalents	1,157			219
Cash and cash equivalents at the beginning of period	3,097			1,822
Cash and cash equivalents at end of period	$	4,254		$	2,041

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

BROADCOM CAYMAN L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED

(in millions, except ~~unit/share~~unit data)


	July 31, 2016			November 1, 2015			April 30, 2017			October 30, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	1,915		$	1,822		$	3,797		$	3,044
Short-term investments							200			—
Trade accounts receivable, net	2,181			1,019			2,073			2,181
Inventory	1,306			524			1,311			1,400
Assets held-for-sale	246			22
Other current assets	400			372			1,087			500
Total current assets	6,048			3,759			8,468			7,125
Long-term assets:
Property, plant and equipment, net	2,573			1,460			2,762			2,509
Goodwill	24,784			1,674			24,706			24,732
Intangible assets, net	15,819			3,277			13,016			15,068
Other long-term assets	528			345			897			532
Total assets	$	49,752		$	10,515		$	49,849		$	49,966
LIABILITIES AND PARTNERS’ CAPITAL/SHAREHOLDERS’ EQUITY
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable	$	1,127		$	617		$	925		$	1,261
Employee compensation and benefits	424			250			464			517
Current portion of long-term debt	334			46			—			454
Other current liabilities	843			206			663			846
Total current liabilities	2,728			1,119			2,052			3,078
Long-term liabilities:
Long-term debt	13,381			3,826			13,567			13,188
Pension and post-retirement benefit obligations	468			475			508			531
Other long-term liabilities	10,671			381			11,379			11,293
Total liabilities	27,248			5,801			27,506			28,090
Commitments and contingencies (Note 12)
Partners’ capital/shareholders’ equity:
Common partnership units; 390,237,855 units issued and outstanding on July 31, 2016	19,545			—
Restricted exchangeable units; 22,804,591 units issued and outstanding on July 31, 2016	3,031			—
Ordinary shares, no par value; 276,259,120 shares issued and outstanding on November 1, 2015	—			2,547
Retained earnings	—			2,240
Partners’ capital:
Common partnership units; 390,693,718 units and 390,237,855 units issued and outstanding on April 30, 2017 and October 30, 2016, respectively							19,558			19,026
Restricted exchangeable units; 22,348,728 units and 22,804,591 units issued and outstanding on April 30, 2017 and October 30, 2016, respectively							2,918			2,984
Accumulated other comprehensive loss	(72		)	(73		)	(133		)	(134		)
Total partners’ capital/shareholders’ equity	22,504			4,714
Total liabilities and partners’ capital/shareholders’ equity	$	49,752		$	10,515
Total partners’ capital							22,343			21,876
Total liabilities and partners’ capital							$	49,849		$	49,966

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

BROADCOM CAYMAN L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED

(in millions, except per unit/share amounts)

Fiscal Quarter Ended Three Fiscal Quarters Ended
July 31,
2016 August 2,
2015 July 31,
2016 August 2,
2015
Net revenue $ 3,792
$ 1,735
$ 9,104
$ 4,984
Cost of products sold:
Cost of products sold 1,520
694
3,656
2,038
Purchase accounting effect on inventory 271
26
1,099
30
Amortization of intangible assets 211
129
539
355
Restructuring charges 8
2
41
5
Total cost of products sold 2,010
851
5,335
2,428
Gross margin 1,782
884
3,769
2,556
Research and development 814
276
1,868
762
Selling, general and administrative 230
143
582
368
Amortization of intangible assets 728
68
1,517
186
Restructuring, impairment and disposal charges 274
98
592
122
Total operating expenses 2,046
585
4,559
1,438
Operating income (loss) (264 ) 299
(790 ) 1,118
Interest expense (139 ) (43 ) (479 ) (150 )
Gain (loss) on extinguishment of debt (21 ) 3
(74 ) (10 )
Other income, net 4
8
1
24
Income (loss) from continuing operations before income taxes (420 ) 267
(1,342 ) 982
Provision for (benefit from) income taxes (117 ) 23
(199 ) 61
Income (loss) from continuing operations (303 ) 244
(1,143 ) 921
Income (loss) from discontinued operations, net of income taxes (12 ) (4 ) (50 ) 14
Net income (loss) $ (315 ) $ 240
$ (1,193 ) $ 935

General Partner's interest in net loss $ (298 ) $ —
$ (1,484 ) $ —
Limited Partners' interest in net loss $ (17 ) $ —
$ (86 ) $ —
Net income attributable to ordinary shareholders $ —
$ 240
$ 377
$ 935

Cash distribution paid per restricted exchangeable partnership unit
$ 0.50
$ —
$ 0.99
$ —
Cash distribution paid to General Partner $ 199
$ —
$ 392
$ —
Cash dividends paid per ordinary share $ —
$ 0.40
$ 0.44
$ 1.13



	Fiscal Quarter Ended						Two Fiscal Quarters Ended
	April 30, 2017			May 1, 2016			April 30, 2017			May 1, 2016
Net revenue	$	4,190		$	3,541		$	8,329		$	5,312
Cost of products sold:
Cost of products sold	1,564			1,437			3,137			2,136
Purchase accounting effect on inventory	1			828			1			828
Amortization of acquisition-related intangible assets	639			198			1,198			328
Restructuring charges	10			32			16			33
Total cost of products sold	2,214			2,495			4,352			3,325
Gross margin	1,976			1,046			3,977			1,987
Research and development	829			787			1,637			1,054
Selling, general and administrative	204			238			405			352
Amortization of acquisition-related intangible assets	442			735			882			789
Restructuring, impairment and disposal charges	27			287			73			318
Total operating expenses	1,502			2,047			2,997			2,513
Operating income (loss)	474			(1,001		)	980			(526		)
Interest expense	(112		)	(256		)	(223		)	(340		)
Loss on extinguishment of debt	—			(53		)	(159		)	(53		)
Other income (expense), net	3			(6		)	34			(3		)
Income (loss) from continuing operations before income taxes	365			(1,316		)	632			(922		)
Benefit from income taxes	(103		)	(99		)	(93		)	(82		)
Income (loss) from continuing operations	468			(1,217		)	725			(840		)
Loss from discontinued operations, net of income taxes	(4		)	(38		)	(9		)	(38		)
Net income (loss)	$	464		$	(1,255	)	$	716		$	(878	)

General Partner's interest in net income (loss)	$	440		$	(1,186	)	$	679		$	(1,186	)
Limited Partners' interest in net income (loss)	$	24		$	(69	)	$	37		$	(69	)
Net income attributable to ordinary shareholders	$	—		$	—		$	—		$	377

Cash distributions paid per restricted exchangeable partnership unit	$	1.02		$	0.49		$	2.04		$	0.49
Cash distributions paid to General Partner	$	414		$	193		$	822		$	193
Cash dividends paid per ordinary share	$	—		$	—		$	—		$	0.44

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

BROADCOM CAYMAN L.P.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) — UNAUDITED

(in millions)


	Fiscal Quarter Ended					Three Fiscal Quarters Ended					Fiscal Quarter Ended					Two Fiscal Quarters Ended
	July 31, 2016			August 2, 2015		July 31, 2016			August 2, 2015		April 30, 2017		May 1, 2016			April 30, 2017		May 1, 2016
Net income (loss)	$	(315	)	$	240	$	(1,193	)	$	935	$	464	$	(1,255	)	$	716	$	(878	)
Other comprehensive income, net of tax:
Gains on defined benefit pension plans and post-retirement plans	1			—		1			—
Reclassification to net income (loss)	—			—		—			1		1		—			1		—
Other comprehensive income	1			—		1			1		1		—			1		—
Comprehensive income (loss)	$	(314	)	$	240	$	(1,192	)	$	936	$	465	$	(1,255	)	$	717	$	(878	)

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

BROADCOM CAYMAN L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED

(in millions)


	Three Fiscal Quarters Ended						Two Fiscal Quarters Ended
	July 31, 2016			August 2, 2015			April 30, 2017			May 1, 2016
Cash flows from operating activities:
Net income (loss)	$	(1,193	)	$	935		$	716		$	(878	)
Adjustments to reconcile income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	2,342			712			2,307			1,284
Share-based compensation	474			169			418			255
Excess tax benefits from share-based compensation	(68		)	(102		)	—			(58		)
Non-cash portion of debt extinguishment loss, net	51			10
Deferred taxes and other non-cash tax expense							(111		)	(172		)
Non-cash portion of debt extinguishment loss							159			30
Non-cash restructuring, impairment and disposal charges	268			75			40			44
Gain on sales of businesses	(27		)	(14		)
Deferred taxes	(353		)	(35		)
Gain on disposition of assets							(23		)	—
Amortization of debt discount issuance costs and accretion of debt discount	27			18			14			17
Other	17			10			8			26
Changes in assets and liabilities, net of acquisitions and disposals:
Trade accounts receivable, net	(491		)	22			108			(169		)
Inventory	1,088			63			96			920
Accounts payable	(61		)	(52		)	(251		)	(217		)
Employee compensation and benefits	70			(12		)	(53		)	(51		)
Other current assets and current liabilities	(38		)	(25		)	(391		)	86
Other long-term assets and long-term liabilities	(47		)	(38		)	(101		)	(21		)
Net cash provided by operating activities	2,059			1,736			2,936			1,096
Cash flows from investing activities:
Purchases of property, plant and equipment							(581		)	(298		)
Purchases of investments							(200		)	(59		)
Acquisitions of businesses, net of cash acquired	(10,055		)	(394		)	(37		)	(10,035		)
Proceeds from sales of businesses	698			650			10			68
Purchases of property, plant and equipment	(530		)	(487		)
Proceeds from disposals of property, plant and equipment	5			63
Purchases of investments	(58		)	(9		)
Proceeds from sales and maturities of investments	89			—			—			32
Other	(15		)	—			(4		)	—
Net cash used in investing activities	(9,866		)	(177		)	(812		)	(10,292		)
Cash flows from financing activities:
Proceeds from term loan borrowings	15,926			—
Proceeds from issuance of long-term debt							13,550			15,926
Debt repayments	(6,145		)	(1,627		)	(13,668		)	(4,839		)
Payments of assumed debt	(1,475		)	(178		)
Debt issuance costs	(108		)	—
Payment of assumed debt							—			(1,475		)
Payment of debt issuance costs							(127		)	(108		)
Dividend payments to ordinary shareholders	(122		)	(292		)	—			(122		)
Distributions paid to unit holders	(415		)	—			(868		)	(204		)
Issuance of ordinary shares by General Partner	72			186			—			72
Capital transactions with General Partner	99			—			(254		)	9
Excess tax benefits from share-based compensation	68			102			—			58
Payment of capital lease obligations							(4		)	—
Net cash provided by (used in) financing activities	7,900			(1,809		)	(1,371		)	9,317
Net change in cash and cash equivalents	93			(250		)	753			121
Cash and cash equivalents at the beginning of period	1,822			1,604			3,044			1,822
Cash and cash equivalents at end of period	$	1,915		$	1,354		$	3,797		$	1,943

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

~~BROADCOM CAYMAN L.P.~~

~~CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL— UNAUDITED~~

~~(in millions)~~

Partnership REUs
Partnership
Common Units
Ordinary Shares
Retained
Earnings

Accumulated
Other
Comprehensive
Loss
Total
Units Amount Units Amount Shares Amount
Balance as of November 1, 2015 —
$ —
—
$ —
276
$ 2,547
$ 2,240
$ (73 ) $ 4,714
Issuance of ordinary shares in connection with equity incentive plans —
—
—
—
2
72
—
—
72
Share-based compensation —
—
—
417
—
57
—
—
474
Excess tax benefits from share-based compensation —
—
—
45
—
23
—
—
68
Cash dividends paid to ordinary shareholders —
—
—
—
—
—
(122 ) —
(122 )
Transfer to General Partner —
—
278
5,194
(278 ) (2,699 ) (2,495 ) —
—
Issuance of common partnership units upon the acquisition of Broadcom Corporation —
—
112
15,438
—
—
—
—
15,438
Issuance of restricted exchangeable partnership units upon the acquisition of Broadcom Corporation 23
3,140
—
—
—
—
—
—
3,140
Cash distribution paid to unit holders —
(23 ) —
(392 ) —
—
—
—
(415 )
Capital transactions with General Partner —
—
—
327
—
—
—
—
327
Changes in accumulated other comprehensive loss:
Gains on defined benefit pension plans and post-retirement plans —
—
—
—
—
—
—
1
1
Net income (loss) —
(86 ) —
(1,484 ) —
—
377
—
(1,193 )
Balance as of July 31, 2016 23
$ 3,031
390
$ 19,545
—
$ —
$ —
$ (72 ) $ 22,504

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

BROADCOM LIMITED AND BROADCOM CAYMAN L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Overview, Basis of Presentation and Significant Accounting Policies

Overview

Broadcom Limited, or Broadcom, is a leading designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products. We have a history of innovation and offer thousands of products that are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. We have four reportable segments: wired infrastructure, wireless communications, enterprise storage and industrial & other, which align with our principal target markets.

Broadcom, a company organized under the laws of the Republic of Singapore, is the successor to Avago Technologies Limited, or Avago. Broadcom Cayman L.P., or the Partnership, is an exempted limited partnership formed under the laws of the Cayman Islands in order to effect the business combination between Avago and Broadcom Corporation, a California corporation, or BRCM. On February 1, 2016, pursuant to an Agreement and Plan of Merger dated as of May 28, 2015, or the Broadcom Agreement, Broadcom, Avago, BRCM, the Partnership and various other parties completed various transactions, including a scheme of arrangement under Singapore law between Avago and Broadcom, or the Avago Scheme. Pursuant to the Avago Scheme, all issued ordinary shares of Avago were exchanged on a one-for-one basis for newly issued ordinary shares of Broadcom. Immediately following the consummation of the Avago Scheme, two subsidiaries of Broadcom merged with and into BRCM with BRCM as the surviving corporation of each such merger, or the Broadcom Merger. Following the Avago Scheme and the Broadcom Merger, or the Broadcom Transaction, each of Avago and BRCM became indirect subsidiaries of Broadcom and the Partnership.

Islands. Broadcom is the Partnership’s sole General Partner and currently owns a majority interest (by vote and value) in the Partnership represented by common partnership units, or Common Units. The balance of the partnership units ~~are held by certain former BRCM shareholders, or the Limited Partners, in the form of~~represents restricted exchangeable limited partnership units, or Partnership ~~REUs.~~REUs, the holders of which are referred to as the Limited Partners. As General Partner, Broadcom has the exclusive right, power and authority to manage, control, administer and operate the business and affairs and to make decisions regarding the undertaking and business of the Partnership in accordance with the Partnership’s amended and restated exempted limited partnership agreement, or Partnership Agreement, as amended from time to time, and applicable laws. ~~There is no board of directors of the Partnership.~~

The Avago Scheme was accounted for in all periods presented using a carryover basis, similar to a pooling-of-interests, as the transaction was premised on a non-substantive exchange in order to facilitate the acquisition of BRCM, resulting in the retention of the historical basis of accounting. Under this method of accounting, Broadcom and Avago were treated as if they had always been combined for accounting and financial reporting purposes. The Broadcom Merger is discussed in further detail in Note 2. “Acquisitions.”

The Partnership REUs are deemed to be registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Partnership is subject to the informational requirements of the Exchange Act and the rules and regulations promulgated thereunder.

The condensed consolidated financial statements and accompanying notes are being presented in a combined report being filed by two separate registrants: Broadcom and the Partnership. The differences in the condensed consolidated financial statements relate to the noncontrolling interest that represents the outstanding Partnership REUs and transactions between Broadcom and the Partnership, which are accounted for as capital transactions. Refer to Note 7. “Shareholders’ Equity” and Note 8. “Partners’ Capital” for additional information.

~~We are a leading designer, developer~~Unless stated otherwise or the context otherwise requires, references to “Broadcom,” “we,” “our” and ~~global supplier~~“us” mean Broadcom Limited and its consolidated subsidiaries, including Broadcom Cayman L.P. References to the “Partnership” mean Broadcom Cayman L.P. and its consolidated subsidiaries. Financial information and results of ~~a broad range of analog~~operations for periods prior to February 1, 2016 relate to Avago, our predecessor, and ~~digital semiconductor connectivity solutions with a focus on analog III-V based products~~relate to Broadcom and complex digital and mixed signal complementary metal oxide semiconductor based devices. We have a history of innovation and offer thousands of products that are used in end products such as data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems, and electronic displays. We have four reportable segments: wired infrastructure, wireless communications, enterprise storage and industrial & other, which align with our principal target markets.the Partnership for the periods after February 1, 2016.

Basis of Presentation

We operate on a 52- or 53-week fiscal year ending on the Sunday closest to October 31. Our fiscal year ending October ~~30, 2016,~~29, 2017, or fiscal year ~~2016,~~2017, is a 52-week fiscal year. The first quarter of our fiscal year ~~2016~~2017 ended on January ~~31, 2016,~~29, 2017, the second quarter ended on ~~May 1, 2016~~April 30, 2017 and the third quarter ~~ended~~ends on July ~~31, 2016.~~30, 2017. Our fiscal year ended ~~November 1, 2015,~~October 30, 2016, or fiscal year ~~2015,~~2016, was also a 52-week fiscal year.

The accompanying condensed consolidated financial statements of Broadcom and the Partnership include the accounts of Broadcom and the Partnership, respectively, and their subsidiaries, and have been prepared by us in accordance with generally accepted accounting principles in the United States, or GAAP, for interim financial information. The financial information included herein is unaudited, and reflects all adjustments which are, in the opinion of our management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. The ~~November 1, 2015~~October 30, 2016 condensed consolidated

balance sheet data were derived from ~~Avago’s~~Broadcom’s audited consolidated financial statements included in ~~Avago’s~~Broadcom’s Annual Report on Form 10-K for fiscal year ~~2015,~~2016, as filed with the Securities and Exchange Commission, or SEC, but do not include all disclosures required by GAAP. All intercompany transactions and balances have been eliminated in consolidation.

As a result of Broadcom’s controlling interest in the Partnership, we consolidate the financial results of the Partnership and present a noncontrolling interest for the portion of the Partnership ~~it does~~we do not own in our condensed consolidated financial statements. Net ~~loss~~income (loss) attributable to ~~the~~ noncontrolling interest onin the condensed consolidated statements of operations represents the portion of ~~loss~~income attributable to the economic interest in the Partnership owned by the Limited Partners.

The accompanying condensed consolidated financial statements include the results of operations of Broadcom Corporation, or BRCM, and other acquisitions commencing as of their respective acquisition dates.

The operating results for the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31, 2016~~April 30, 2017 are not necessarily indicative of the results that may be expected for fiscal year ~~2016,~~2017, or for any other future period.

Significant Accounting Policies

Use of estimates. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts ~~reported in our~~of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and ~~accompanying notes.~~the reported amounts of revenues and expenses during the reporting period. Actual results could differ ~~materially~~ from those ~~estimates.~~

~~Reclassifications.~~ ~~Certain reclassifications have been made to~~estimates, and such differences could affect the ~~prior period condensed consolidated balance sheet and condensed consolidated statement~~results of ~~cash flows. These reclassifications have no impact on the previously~~operations reported ~~net assets or net cash activities.~~in future periods.

Recently Adopted Accounting Guidance

In ~~November 2015,~~the first quarter of fiscal year 2017, we early adopted an accounting standards update issued by the Financial Accounting Standards Board, or FASB, ~~issued guidance~~in March 2016 that simplifies the ~~presentation~~accounting for certain aspects of ~~deferred tax assets and liabilities in a classified balance sheet. This guidance~~stock-based payments to employees. The standard eliminates (i) the ~~current~~ requirement to ~~present deferred~~report excess tax ~~assets~~benefits and ~~liabilities~~certain tax deficiencies related to share-based payment transactions as ~~current~~additional paid-in capital and ~~non-current~~(ii) the requirement that excess tax benefits be realized before companies can recognize them. The standard requires a modified-retrospective transition method by means of a cumulative-effect adjustment as of the beginning of the period in which the guidance is adopted. As a ~~classified balance sheet. Instead, all deferred~~result of adoption, we recognized tax ~~assets~~benefits of $139 million and ~~liabilities are classified~~$181 million as ~~non-current. We adopted this guidance during~~discrete items for the fiscal quarter and two fiscal quarters ended ~~January 31, 2016, on~~April 30, 2017, respectively, a ~~prospective basis. The~~$47 million cumulative-effect adjustment to reduce our accumulated deficit and a $3 million cumulative-effect adjustment to increase our noncontrolling interest for previously unrecognized excess tax benefits as of October 30, 2016. In connection with the adoption, ~~resulted in $116 million of net current deferred~~we elected to present excess tax ~~assets being reclassified from other current assets to other long-term assets on our condensed consolidated balance sheet.~~

In April 2015, the FASB issued an amendment to the guidance related to the financial statement presentation of debt issuance costs. The new guidance is required to be applied retrospectively to each prior reporting period presented. The guidance requires certain debt issuance costs to be presentedbenefits within operating activities on the ~~balance sheet as a direct reduction to the carrying amount~~statement of ~~debt, consistent with debt discounts or premiums. In August 2015, the FASB further clarified that entities are permitted to defer~~cash flows prospectively and present debt issuance costs related to line-of-credit arrangements as assets. We early-adopted this guidance during the fiscal quarter ended May 1, 2016, and applied its provisions retrospectively. The adoption resulted in $13 millionwe continued our existing practice of ~~other current assets and $64 million of other long-term assets being reclassified to long-term debt on our condensed consolidated balance sheet as of November 1, 2015.~~estimating forfeitures.

Recent Accounting Guidance Not Yet Adopted

In October 2016, the FASB issued updated guidance related to the recognition of income tax consequences of an intra-entity transfer of an asset other than inventory. This guidance will be effective for the first quarter of our fiscal year 2019; however, early adoption is permitted. The adoption of this guidance will increase our income tax provision for periods in which we perform intra-entity transfers.

In August 2016, the FASB issued guidance related to the classification of certain transactions on the statement of cash flows. This guidance will be effective for the first quarter of our fiscal year ~~2019,~~2019; however, early adoption is permitted. We ~~are currently evaluating the impact that~~will present our statements of cash flows in accordance with this guidance ~~will have on our condensed consolidated financial statements.~~

In June 2016, the FASB issued new guidance requiring measurement and recognition of expected credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. This guidance will be effective for us in the first quarter of our fiscal year 2021; however early adoption is permitted. The new guidance is required to be applied using a modified retrospective approach with certain elements being adopted prospectively. We are currently evaluating the impact that this guidance will have on our condensed consolidated financial statements.

In March 2016, the FASB issued guidance that involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance will be effective for the ~~first quarter of our fiscal year 2018, however early adoption is permitted. We are currently evaluating the impact that this guidance will have on our condensed consolidated financial statements.~~affected transactions occurring subsequent to adoption.

In February 2016, the FASB issued guidance related to the accounting for leases, which among other things, requires a lessee to recognize lease assets and lease liabilities on the balance sheet for operating leases. This guidance will be effective for the first quarter of our fiscal year 2020. The new guidance is required to be applied using a modified retrospective approach. We

are currently evaluating the impact ~~that~~of this guidance ~~will have on our condensed consolidated financial statements.~~

In September 2015, the FASB issued guidance which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Acquirers must recognize measurement-period adjustments during the period of resolution, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The guidance will be effective for the first quarter of our fiscal year 2017, however early adoption is permitted. We are currently evaluating the impact that this guidance will have on our condensed consolidated financial statements.

In August 2015, the FASB deferred the effective date of the guidance that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. This guidance will be effective for the first quarter of our fiscal year 2019. Early adoption is permitted, but not before the first quarter of our fiscal year 2018. The new guidance is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. In addition, in ~~May~~ 2016, the FASB issued ~~final~~ amendments to clarify the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for licenses of intellectual property, and narrow-scope improvements and practical expedients. We have not yet selected a transition method and are currently evaluating the impact of this guidance on our condensed consolidated financial statements.

2. Acquisitions

Acquisition of Broadcom Corporation

The Broadcom Merger closed on February 1, 2016, or the Acquisition Date, pursuant to the terms of the Broadcom Agreement. The aggregate consideration for the Broadcom Merger, which consisted of both cash and equity consideration, was approximately $28,758 million, net of cash acquired.

We funded the cash portion of the Broadcom Merger with the net proceeds from the issuance of the 2016 Term Loans, as defined and discussed in further detail in Note 6. “Borrowings,” as well as cash on hand of the combined companies.

BRCM was a leader in semiconductor solutions for wired and wireless communications and provided a broad portfolio of highly-integrated system-on-a-chip solutions that seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environments. We acquired BRCM to position us as a global diversified leader in wired and wireless communication semiconductors and to deepen our broad portfolios, and to enable us to better address the evolving needs of customers across the wired and wireless end markets.

~~The aggregate consideration for the Broadcom Merger, net of cash acquired, consisted of the following (in millions):~~

Cash for outstanding BRCM common stock $ 16,798
Fair value of Broadcom ordinary shares issued for outstanding BRCM common stock 15,438
Fair value of Partnership REUs issued for outstanding BRCM common stock 3,140
Fair value of partially vested assumed restricted stock unit awards 182
Cash for vested BRCM equity awards 137
Effective settlement of pre-existing relationships 11
Total purchase consideration 35,706
Less: cash acquired 6,948
Total purchase consideration, net of cash acquired $ 28,758

Broadcom issued 112 million ordinary shares and the Partnership issued 23 million Partnership REUs, all of which are valued and presented in the above table, to former BRCM shareholders in the Broadcom Merger. Broadcom also assumed unvested restricted stock unit awards, or RSUs, originally granted by BRCM and converted them into 6 million of Broadcom RSUs. The portion of the fair value of partially vested assumed RSUs associated with prior service of BRCM employees represented a component of the total consideration, as presented above, and was valued based on Broadcom’s ordinary share price as of the Acquisition Date.

We allocated the purchase price to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The fair value of identifiable intangible assets acquired was based on estimates and assumptions made by management at the time of acquisition. As additional information becomes available, such as finalization of the estimated fair value of tax accounts, we may further revise our preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from the Acquisition Date). Any such revisions or changes may be material as we finalize the fair values of the tangible and intangible assets acquired and liabilities assumed.

~~Our preliminary allocation of the total purchase price, net of cash acquired, is as follows (in millions):~~

Estimated Fair Value
Trade accounts receivable $ 669
Inventory 1,853
Assets held-for-sale 833
Other current assets 194
Property, plant and equipment 889
Goodwill 23,076
Intangible assets 14,808
Other long-term assets 121
Total assets acquired 42,443
Accounts payable (559 )
Employee compensation and benefits (104 )
Current portion of long-term debt (1,475 )
Other current liabilities (791 )
Long-term debt (139 )
Other long-term liabilities (10,617 )
Total liabilities assumed (13,685 )
Fair value of net assets acquired $ 28,758

Goodwill was primarily attributable to the assembled workforce, anticipated synergies and economies of scale expected from the operations of the combined company. The synergies include certain cost savings, operating efficiencies, and other strategic benefits projected to be achieved as a result of the Broadcom Merger. Goodwill is not expected to be deductible for tax purposes.

The assets held-for-sale represented BRCM’s businesses that are not aligned with our strategic objectives. Assets held-for-sale are discussed in further detail in Note 3. “Supplemental Financial Information.”

Our results of continuing operations for the fiscal quarter ~~and three fiscal quarters~~ ended ~~July 31,~~May 1, 2016 include ~~$2,314 million and $4,641~~$2,327 million of net revenue ~~respectively,~~ attributable to ~~BRCM.~~BRCM, which we acquired on February 1, 2016, or the Acquisition Date. It is impracticable to determine the effect on net income (loss) attributable to BRCM for the periods presented as we immediately integrated BRCM into our ongoing operations. Transaction costs of $2$29 million and ~~$39~~$37 million incurred in connection with our acquisition of BRCM, or the Broadcom Merger, are included in selling, general and administrative expense in the condensed consolidated statements of operations for the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31,~~May 1, 2016, respectively.

~~Intangible Assets~~

~~Identified intangible assets and their respective useful lives were as follows:~~

Approximate Fair Value
(in millions) Weighted-Average Amortization Periods (in years)
Developed technology $ 9,010
6
Customer contracts and related relationships 2,703
2
Order backlog 750
< 1
Trade name 350
17
Other 45
16
Total identified finite-lived intangible assets 12,858

In-process research and development 1,950
N/A
Total identified intangible assets, net of assets held-for-sale 14,808

Intangible assets included in assets held-for-sale 320

Identified intangible assets $ 15,128

Developed technology relates to products for wired and wireless communication applications. We valued the developed technology using the multi-period excess earnings method under the income approach. This method reflects the present value of the projected cash flows that are expected to be generated by the developed technology less charges representing the contribution of other assets to those cash flows. The economic useful life was determined based on the technology cycle related to each developed technology, as well as the cash flows over the forecast period.

Customer contracts and related relationships represent the fair value of future projected revenue that will be derived from sales of products to existing customers of BRCM. Customer contracts and related relationships were valued using the with-and-without-method under the income approach. In this method, the fair value was measured by the difference between the present values of the cash flows with and without the existing customers in place over the period of time necessary to reacquire the customers. The economic useful life was determined based on historical customer turnover rates.

Order backlog represents business under existing contractual obligations as of the Acquisition Date. The fair value of backlog was determined using the multi-period excess earnings method under the income approach based on expected operating cash flows from future contractual revenue. The economic useful life was determined based on the expected life of the backlog and the cash flows over the forecast period.

Trade name relates to the “Broadcom” trade name. The fair value was determined by applying the relief-from-royalty method under the income approach. This valuation method is based on the application of a royalty rate to forecasted revenue under the trade name. The economic useful life was determined based on the expected life of the trade name and the cash flows anticipated over the forecasted periods.

The fair value of in-process research and development, or IPR&D, was determined using the multi-period excess earnings method under the income approach. This method reflects the present value of the projected cash flows that are expected to be generated by the IPR&D, less charges representing the contribution of other assets to those cash flows.

We believe the amounts of purchased intangible assets recorded above represent the fair values of, and approximate the amounts a market participant would pay for, these intangible assets as of the Acquisition Date.

~~The following table summarizes the details of IPR&D by category as of the Acquisition Date (dollars in millions):~~

Description IPR&D Percentage of Completion Estimated Cost to Complete Expected Release Date (by fiscal year)
Set-top box solutions $ 90
56 % $ 90
2016 - 2017
Broadband carrier access solutions 390
34
376
2016 - 2018
Carrier switch solutions 270
51
255
2016 - 2019
Compute and connectivity solutions 170
61
136
2016 - 2018
Physical layer product solutions 190
51
71
2016 - 2019
Wireless connectivity combo solutions 770
57
364
2016 - 2018
Touch controllers 70
39
21
2016 - 2017

Discount rates of 14% and 16% were applied to the projected cash flows to reflect the risk related to these wired and wireless IPR&D, respectively. These discount rates represent a premium of 2% over the respective wired and wireless weighted-average cost of capital to reflect the higher risk and uncertainty of the cash flows for IPR&D relative to the overall businesses.

Subsequent to the Acquisition Date, $240 million of acquired IPR&D was written-off as we no longer intend to develop and invest in these projects. The majority of these abandoned IPR&D projects were included in the wireless connectivity combo and broadband carrier access solutions above.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented, as if BRCM had been acquired as of the beginning of fiscal year 2015. The unaudited pro forma financial information for the ~~three~~two fiscal quarters ended ~~July 31,~~May 1, 2016 combined the historical results of Avago for the fiscal quarter ended January 31, 2016 and the historical results of BRCM for the three months ended December 31, 2015, representing BRCM’s previous reporting period prior to the Acquisition Date, and the historical results of Broadcom for the fiscal ~~quarters~~quarter ended May 1, ~~2016 and July 31,~~ 2016. The pro forma information includes adjustments to amortization and depreciation for intangible assets and property, plant and equipment acquired, adjustments to share-based compensation expense, the purchase accounting effect on inventory acquired, interest expense for the additional indebtedness incurred to complete the acquisition, restructuring charges in connection with the acquisition and acquisition costs. The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2015 or of the results of future operations of the combined business. Consequently,

actual results will differ from the unaudited pro forma information presented below (in millions, except for per share amounts):



	Fiscal Quarter Ended			Two Fiscal Quarters Ended
	May 1, 2016			May 1, 2016
Pro forma net revenue	$	3,538		$	7,359
Pro forma net loss from continuing operations	$	(607	)	$	(459	)
Pro forma net loss	$	(645	)	$	(497	)
Pro forma net loss attributable to ordinary shares	$	(610	)	$	(470	)
Pro forma net loss per share attributable to ordinary shares - basic and diluted	$	(1.56	)	$	(1.20	)

Fiscal Quarter Ended Three Fiscal Quarters Ended
July 31,
2016 August 2,
2015 July 31,
2016 August 2,
2015
Pro forma net revenue $ 3,789
$ 3,828
$ 11,148
$ 11,272
Pro forma net income (loss) from continuing operations (152 ) 242
(611 ) (717 )
Pro forma net income (loss) (164 ) 238
(661 ) (703 )
Pro forma net income (loss) attributable to ordinary shares (155 ) 225
(624 ) (664 )
Pro forma income (loss) per share attributable to ordinary shares - basic (0.39 ) 0.60
(1.76 ) (1.78 )
Pro forma income (loss) per share attributable to ordinary shares - diluted (0.39 ) 0.59
(1.76 ) (1.78 )
Pending Acquisition of Brocade Communications Systems, Inc.

On November 2, 2016, we entered into an Agreement and Plan of Merger, or the Brocade Agreement, by and among Broadcom, BRCM, Brocade Communications Systems, Inc., a Delaware corporation, or Brocade, and Bobcat Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of BRCM, or Merger Sub. On December 18, 2016, BRCM assigned all of its rights and obligations under the Brocade Agreement and transferred all of the issued and outstanding capital stock of Merger Sub to LSI Corporation, or LSI. The Brocade Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Brocade with Brocade as the surviving corporation, or the Brocade Acquisition. As a result of the Brocade Acquisition, Brocade will become an indirect subsidiary of Broadcom and the Partnership.

Under the Brocade Agreement, at the effective time of the Brocade Acquisition, each issued and outstanding share of Brocade common stock held by Brocade stockholders who do not perfect their appraisal rights with respect to the Brocade Acquisition will be converted into the right to receive $12.75 in cash, without interest. As of November 2, 2016, the Brocade Acquisition was valued at approximately $5.5 billion. We intend to finance the transaction with cash on hand from both companies and new debt financing.

We will also assume certain vested (to the extent not in-the-money) and all unvested Brocade stock options, restricted stock units, or RSUs, and performance stock units held by continuing employees and service providers. All vested in-the-money Brocade stock options, after giving effect to any acceleration, and all other RSUs and performance stock units will be cashed out at the effective time of the Brocade Acquisition.

Consummation of the Brocade Acquisition is subject to the satisfaction or waiver of customary closing conditions, including the expiration or termination of the waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the receipt of regulatory clearance under certain other laws and the absence of certain pending governmental litigation with respect to the transactions contemplated by the Brocade Agreement.

The Brocade Agreement contains certain termination rights for us and Brocade, and further provides that, upon termination of the Brocade Agreement under certain specified circumstances, Brocade will be obligated to pay us a termination fee of $195 million.

We currently expect the Brocade Acquisition to close on or about July 31, 2017, subject to the satisfaction of the remaining closing conditions.

Pending Divestiture of Brocade’s IP Networking Business

Under the Brocade Agreement, Brocade has agreed to cooperate with us to facilitate the sale, disposition or other transfer of its IP Networking business, including its recently acquired Ruckus Wireless business. The consummation of the Brocade Acquisition is not conditioned on the divestiture of Brocade’s IP Networking business.

On February 22, 2017, we announced our agreement to sell a portion of Brocade’s IP Networking business, including the Ruckus Wireless and ICX Switch businesses, to ARRIS International plc for cash consideration of $800 million, plus the additional cost of unvested assumed employee stock awards. The closing is subject to regulatory approvals in various jurisdictions and other customary closing conditions but does not require shareholder approval by either company and is not subject to any financing conditions. We have also entered into an agreement to sell the data center portion of Brocade’s IP networking business to Extreme Networks, Inc. These transactions are contingent on the closing of the Brocade Acquisition and are currently expected to close within one month following the closing of the Brocade Acquisition.

3. Supplemental Financial Information

Cash ~~Cash~~ Equivalents and Short-Term Investments

Cash equivalents included ~~$270~~$2,852 million and ~~$490~~$1,022 million of time deposits as of ~~July 31,~~April 30, 2017 and October 30, 2016, ~~and November 1, 2015,~~ respectively. As of ~~July 31, 2016 and November 1, 2015, cash equivalents also~~April 30, 2017, $200 million short-term investments included ~~$300 million and $100 million of money-market funds, respectively. For~~ time deposits carrying value approximates fair value due to the short-term nature of the instruments. The fair value of money-market funds as of July 31, 2016 and November 1, 2015 approximates the carrying value and is determined using unadjusted prices in active, accessible markets for identical assets, as such they are classified as Level 1 assets in the fair value hierarchy.with original maturities greater than three months but less than one year.

Inventory

Inventory consists of the following (in millions):


	July 31, 2016		November 1, 2015		April 30, 2017		October 30, 2016
Finished goods	$	499	$	177	$	482	$	431
Work-in-process	498		271		632		596
Raw materials	309		76		197		373
Total inventory	$	1,306	$	524	$	1,311	$	1,400

~~Assets Held-for-Sale~~

~~The following table summarizes components of assets held-for-sale (in millions):~~

July 31,
2016 November 1,
2015
Goodwill $ 147
$ —
Intangible assets, net 64
—
Other assets 35
22
Total assets held-for-sale $ 246
$ 22
Property, Plant and Equipment

In connection with our campus rationalization efforts, we entered into an agreement to sell our Irvine campus for $443 million, and we expect the ~~Broadcom Merger, we classified certain BRCM businesses as assets held-for-sale on February 1, 2016. The carrying value of these assets as of July 31, 2016 represents the fair value determined~~transaction, which is subject to customary closing conditions, to be completed in the ~~preliminary purchase price allocation~~third fiscal quarter of 2017. In addition, we will lease back a portion of the Broadcom Merger, adjusted for operating activities since the Acquisition Date. During the fiscal quarter ended July 31, 2016, we completed the sales of certain BRCM businesses for aggregate cash proceeds of $630 million. Subsequent to July 31, 2016, we completed the sale of an additional BRCM business for $200 million in cash. As part of these transactions, we are, in most cases, providing transitional services to provide short-term assistance for the buyers in assuming the operations of the purchased businesses.campus at market rental rates. We do not ~~have any material continuing involvement with these discontinued operations.~~

~~Discontinued Operations~~

~~We have presented the results~~expect to recognize a significant gain or loss upon completion of the BRCM businesses discussed above under “Assets Held-for-Sale,” as well as the sale of our Axxia business in fiscal year 2015, in discontinued operations. The following table summarizes the selected financial information of discontinued operations (in millions):

Fiscal Quarter Ended Three Fiscal Quarters Ended
July 31,
2016 August 2,
2015 July 31,
2016 August 2,
2015
Net revenue $ 35
$ 6
$ 99
$ 59

Income (loss) from discontinued operations before gain on disposals and income taxes $ (54 ) $ (4 ) $ (115 ) $ 13
Gain on disposals of discontinued operations 33
—
33
14
Benefit from (provision for) income taxes 9
—
32
(13 )
Income (loss) from discontinued operations, net of income taxes $ (12 ) $ (4 ) $ (50 ) $ 14
sale.

Accrued Rebate Activity

The following table summarizes activities related to accrued rebates included in other current liabilities on our condensed consolidated balance sheets (in millions):


	Accrued Rebate Liabilities			Two Fiscal Quarters Ended
Balance as of November 1, 2015	$	26
				April 30, 2017			May 1, 2016
Beginning balance				$	317		$	26
Liabilities assumed in acquisitions	359			—			359
Charged as a reduction of revenue	388			120			223
Reversal of unclaimed rebates	(3		)	(36		)	(3		)
Payments	(360		)	(222		)	(215		)
Balance as of July 31, 2016	$	410
Ending balance				$	179		$	390

We recorded customer ~~rebate~~rebates charges of ~~$165~~$56 million and $210 million in the fiscal quarter ended ~~July 31, 2016.~~April 30, 2017 and May 1, 2016, respectively.

Other Long-Term Liabilities

Other long-term liabilities consist of the following (in millions):


	July 31, 2016		November 1, 2015		April 30, 2017		October 30, 2016
Deferred tax liabilities	$	9,614	$	9	$	10,239	$	10,287
Unrecognized tax benefits ^(a)	927		317		1,080		893
Other	130		55		60		113
Total other long-term liabilities	$	10,671	$	381	$	11,379	$	11,293

(a) Includes accrued interest and penalties.

Discontinued Operations

During fiscal year 2016, we sold certain BRCM businesses for aggregate cash proceeds of $830 million. In connection with these sales, we provided transitional services to the buyers as short-term assistance in assuming the operations of the purchased businesses. We do not have any material continuing involvement with these businesses and have presented their results in discontinued operations.

The following table summarizes the selected financial information of discontinued operations (in millions):



	Fiscal Quarter Ended						Two Fiscal Quarters Ended
	April 30, 2017			May 1, 2016			April 30, 2017			May 1, 2016
Net revenue	$	3		$	64		$	5		$	64

Loss from discontinued operations before income taxes	$	(4	)	$	(61	)	$	(9	)	$	(61	)
Benefit from income taxes	—			23			—			23
Loss from discontinued operations, net of income taxes	$	(4	)	$	(38	)	$	(9	)	$	(38	)

Supplemental Cash Flow ~~Disclosures~~Information

The following table summarizes supplement cash flow information (in millions):



	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2017		May 1, 2016		April 30, 2017		May 1, 2016
Cash paid for interest	$	1	$	65	$	103	$	145
Cash paid for income taxes	$	109	$	87	$	206	$	80

At ~~July 31,~~April 30, 2017 and October 30, 2016, ~~and November 1, 2015,~~ we had ~~$119~~$103 million and ~~$78~~$159 million, respectively, of unpaid purchases of property, plant and equipment included in accounts ~~payable. Amounts reported as unpaid purchases are presented as cash outflows from investing activities for purchases of property, plant~~payable and ~~equipment in the condensed consolidated statements of cash flows in the period in which they are paid.~~other current liabilities.

4. Goodwill and Intangible Assets

Goodwill

The following table summarizes changes in goodwill by segment (in millions):

Wired Infrastructure Wireless Communications Enterprise Storage Industrial & Other Total
Balance as of November 1, 2015 $ 287
$ 261
$ 990
$ 136
$ 1,674
Broadcom Merger 17,395
5,681
—
—
23,076
Other acquisitions —
21
11
8
40
Reclassification of goodwill related to certain assets held-for-sale —
—
(6 ) —
(6 )
Balance as of July 31, 2016 $ 17,682
$ 5,963
$ 995
$ 144
$ 24,784



	Wired Infrastructure			Wireless Communications			Enterprise Storage		Industrial & Other		Total
Balance as of October 30, 2016	$	17,641		$	5,952		$	995	$	144	$	24,732
Broadcom Merger adjustments	(25		)	(7		)	—		—		(32		)
Other	6			—			—		—		6
Balance as of April 30, 2017	$	17,622		$	5,945		$	995	$	144	$	24,706

During the ~~three~~first fiscal ~~quarters~~quarter ended ~~July 31, 2016,~~January 29, 2017, we made ~~three immaterial acquisitions in addition~~adjustments to certain tax balances related to the Broadcom ~~Merger.~~Merger, resulting in a $32 million decrease in goodwill.

Intangible Assets

Intangible assets consist of the following (in millions):


	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Net Book Value
As of July 31, 2016:
As of April 30, 2017:
Purchased technology	$	12,179	$	(1,697	)	$	10,482	$	12,553	$	(3,049	)	$	9,504
Customer and distributor relationships	4,401		(1,200		)	3,201
Backlog	848		(848		)	—
Customer contracts and related relationships								4,240		(2,238		)	2,002
Trade names	528		(67		)	461		528		(97		)	431
Other	99		(4		)	95		116		(16		)	100
Intangible assets subject to amortization	18,055		(3,816		)	14,239		17,437		(5,400		)	12,037
IPR&D	1,580		—			1,580
In-process research and development								979		—			979
Total	$	19,635	$	(3,816	)	$	15,819	$	18,416	$	(5,400	)	$	13,016

As of November 1, 2015:
As of October 30, 2016:
Purchased technology	$	2,918	$	(1,165	)	$	1,753	$	12,182	$	(1,855	)	$	10,327
Customer and distributor relationships	1,702		(459		)	1,243
Customer contracts and related relationships								4,231		(1,377		)	2,854
Trade names	178		(41		)	137		528		(77		)	451
Other	120		(101		)	19		107		(7		)	100
Intangible assets subject to amortization	4,918		(1,766		)	3,152		17,048		(3,316		)	13,732
IPR&D	125		—			125
In-process research and development								1,336		—			1,336
Total	$	5,043	$	(1,766	)	$	3,277	$	18,384	$	(3,316	)	$	15,068

During the three fiscal quarters ended July 31, 2016, $267 million of IPR&D was transferred to purchased technology upon completion of the respective project and $246 million of IPR&D was written off to restructuring, impairment and disposal charges for certain IPR&D projects that were abandoned as a result of integration efforts related to the Broadcom Merger.

Based on the amount of intangible assets subject to amortization at ~~July 31, 2016,~~April 30, 2017, the expected amortization expense for each of the next five ~~fiscal~~ years and thereafter iswas as follows (in millions):


Fiscal Year:
2016 (remainder)	$	582
2017	4,197
2017 (remainder)			$	2,198
2018	2,810		2,910
2019	2,046		2,124
2020	1,678		1,754
2021	1,339		1,402
Thereafter	1,587		1,649
Total	$	14,239	$	12,037

The weighted-average amortization periods remaining by intangible asset category as of ~~July 31, 2016~~April 30, 2017 were as follows (in years):



~~Amortizable intangible assets:~~
Purchased technology		65
Customer contracts and ~~distributor~~related relationships		3
Trade name		1413
Other		1312

5. ~~Earnings~~Net Income (Loss) Per Share

Broadcom

Basic net income (loss) per share is computed by dividing net income (loss) attributable to ordinary shares by the weighted-average number of Broadcom ordinary shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to ordinary shares and, if the Partnership REUs are dilutive, net income (loss) attributable to noncontrolling interest by the weighted-average number of Broadcom ordinary shares and potentially dilutive share equivalents outstanding during the period. Diluted shares outstanding include the dilutive effect of in-the-money share options, RSUs and employee share purchase rights under the Amended and Restated Broadcom Limited Employee Share Purchase Plan, or ESPP, (together referred to as equity awards). for the fiscal quarter and two fiscal quarters ended April 30, 2017. Diluted shares outstanding also include Broadcom ordinary shares issuable upon exchange of the Partnership REUs (refer to Note 8. “Partners’ Capital” for additional information) for the fiscal quarter and three fiscal quarters ended July 31, 2016, and Broadcom ordinary shares issuable upon conversion of the 2.0% Convertible Senior Notes due 2021 issued by Avago, or the Convertible Notes, for the fiscal quarter and three fiscal quarters ended August 2, 2015.all periods presented.

The dilutive effect of equity awards is calculated based on the average share price for each fiscal period, using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising share options and to purchase shares under the ESPP and the amount of compensation cost for future service that we have not yet recognized are collectively assumed to be used to repurchase ordinary shares. For the fiscal quarter and two fiscal quarters ended May 1, 2016, the amount of tax benefits that would be recognized when equity awards become deductible for income tax purposes ~~are collectively~~was also assumed to be used to repurchase ordinary shares.

The dilutive effect of the Partnership REUs is calculated using the if-converted method. The if-converted method assumes that the Partnership REUs were converted at the beginning of the reporting period.

The dilutive effect of the Convertible Notes was calculated using the treasury stock method based on our assumption that the Convertible Notes would be settled in cash. The treasury stock method assumed that the carrying value of the Convertible Notes represented proceeds, since settlement of the Convertible Notes tendered for conversion could be settled with cash, Avago ordinary shares or a combination of both at Avago’s option.

During the third quarter of fiscal year 2015, the Convertible Notes were converted in full and settled with a combination of cash and the issuance of 13.8 million Avago ordinary shares. The incremental Avago ordinary shares attributable to the conversion were a component of diluted shares for the period prior to settlement and a component of basic weighted-average shares outstanding subsequent to the conversion.

Diluted net income (loss) per share for the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31,~~May 1, 2016 excluded the potentially dilutive effect of weighted-average outstanding equity awards to acquire 12 million ordinary shares in each period as

their effect was antidilutive. ~~There were no material antidilutive equity awards for the fiscal quarter or three fiscal quarters ended August 2, 2015.~~

The following is a reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share computations for the periods presented (in millions, except per share data):



	Fiscal Quarter Ended						Two Fiscal Quarters Ended
	April 30, 2017			May 1, 2016			April 30, 2017			May 1, 2016
Numerator - Basic:
Income (loss) from continuing operations	$	468		$	(1,217	)	$	725		$	(840	)
Less: Income (loss) from continuing operations attributable to noncontrolling interest	24			(67		)	37			(67		)
Income (loss) from continuing operations attributable to ordinary shares	$	444		$	(1,150	)	$	688		$	(773	)

Loss from discontinued operations, net of income taxes	$	(4	)	$	(38	)	$	(9	)	$	(38	)
Less: Loss from discontinued operations, net of income taxes, attributable to noncontrolling interest	—			(2		)	—			(2		)
Loss from discontinued operations, net of income taxes, attributable to ordinary shares	$	(4	)	$	(36	)	$	(9	)	$	(36	)

Net income (loss) attributable to ordinary shares	$	440		$	(1,186	)	$	679		$	(809	)

Numerator - Diluted:
Income (loss) from continuing operations	$	468		$	(1,217	)	$	725		$	(840	)
Loss from discontinued operations, net of income taxes	(4		)	(38		)	(9		)	(38		)
Net income (loss)	$	464		$	(1,255	)	$	716		$	(878	)

Fiscal Quarter Ended Three Fiscal Quarters Ended
July 31,
2016 August 2,
2015 July 31,
2016 August 2,
2015
Numerator - Basic:
Income (loss) from continuing operations $ (303 ) $ 244
$ (1,143 ) $ 921
Less: Loss from continuing operations attributable to noncontrolling interest (16 ) —
(83 ) —
Income (loss) from continuing operations attributable to ordinary shares $ (287 ) $ 244
$ (1,060 ) $ 921

Income (loss) from discontinued operations, net of income taxes $ (12 ) $ (4 ) $ (50 ) $ 14
Less: Loss from discontinued operations, net of income taxes, attributable to noncontrolling interest (1 ) —
(3 ) —
Income (loss) from discontinued operations, net of income taxes, attributable to ordinary shares $ (11 ) $ (4 ) $ (47 ) $ 14

Net income (loss) attributable to ordinary shares $ (298 ) $ 240
$ (1,107 ) $ 935

Numerator - Diluted:
Income (loss) from continuing operations $ (303 ) $ 244
$ (1,143 ) $ 921
Income (loss) from discontinued operations, net of income taxes (12 ) (4 ) (50 ) 14
Net income (loss) $ (315 ) $ 240
$ (1,193 ) $ 935


Denominator:
Weighted-average ordinary shares outstanding - basic	396			265			355			260		403			392			401			335
Dilutive effect of equity awards	—			13			—			12		16			—			16			—
Dilutive effect of Convertible Notes	—			9			—			11
Exchange of noncontrolling interest for ordinary shares	23			—			15			—		23			23			23			11
Weighted-average ordinary shares outstanding - diluted	419			287			370			283		442			415			440			346

Basic income (loss) per share attributable to ordinary shares:
Income (loss) per share from continuing operations	$	(0.72	)	$	0.92		$	(2.99	)	$	3.54	$	1.10		$	(2.93	)	$	1.72		$	(2.31	)
Income (loss) per share from discontinued operations, net of income taxes	(0.03		)	(0.01		)	(0.13		)	0.06
Loss per share from discontinued operations, net of income taxes												(0.01		)	(0.09		)	(0.03		)	(0.10		)
Net income (loss) per share	$	(0.75	)	$	0.91		$	(3.12	)	$	3.60	$	1.09		$	(3.02	)	$	1.69		$	(2.41	)

Diluted income (loss) per share attributable to ordinary shares:
Income (loss) per share from continuing operations	$	(0.72	)	$	0.85		$	(3.09	)	$	3.25	$	1.06		$	(2.93	)	$	1.65		$	(2.43	)
Income (loss) per share from discontinued operations, net of income taxes	(0.03		)	(0.01		)	(0.13		)	0.05
Loss per share from discontinued operations, net of income taxes												(0.01		)	(0.09		)	(0.02		)	(0.11		)
Net income (loss) per share	$	(0.75	)	$	0.84		$	(3.22	)	$	3.30	$	1.05		$	(3.02	)	$	1.63		$	(2.54	)

The Partnership

Income (loss) per unit for the Partnership is not required to be presented as its Common Units and Partnership REUs are not publicly traded.

6. Borrowings

~~2016 Term Loans~~Senior Notes

On January 19, 2017, two Broadcom subsidiaries, BRCM and ~~Revolving Credit Facility~~

~~In connection with~~Broadcom Cayman Finance Limited, or the ~~completion~~Co-Issuers, completed the issuance and sale of senior unsecured notes, or Senior Notes, in an aggregate principal amount of $13,550 million. Each series of Senior Notes is fully and unconditionally guaranteed, jointly and severally, on an unsecured, unsubordinated basis by Broadcom, the Partnership, and BC Luxembourg S.à r.l., an indirect subsidiary of Broadcom, or collectively, the Guarantors, subject to certain release conditions described in the indenture governing the Senior Notes, or the Indenture. The Co-Issuers may redeem all or a portion of the Senior Notes at any time prior to their maturity, subject to a specified make-whole premium as set forth in the Indenture. In the event of a change of control triggering event, each holder of Senior Notes will have the right to require us to purchase for cash all or a portion of their Senior Notes at a redemption price of 101% of the aggregate principal amount of such Senior Notes plus accrued and unpaid interest. The Indenture also contains covenants that restrict, among other things, the ability of Broadcom ~~Merger,~~and its subsidiaries to incur additional secured debt and consummate certain sale and leaseback transactions, and the ability of the Co-Issuers and the Guarantors to merge, consolidate or sell all or substantially all of their assets.

The Co-Issuers used the net proceeds, plus cash on ~~February 1, 2016, three Broadcom subsidiaries, together with a group~~hand, to repay all of ~~lenders, including Bank of America, N.A., as~~ the ~~administrative agent and collateral agent, entered into a~~term loans outstanding under our guaranteed, collateralized credit agreement, or the 2016 Credit Agreement, ~~which originally provided for a Term A loan facility~~dated February 1, 2016, in the aggregate ~~principal~~ amount of ~~$4,400~~$13,555 million ~~or the Term A Loan, a Term B-1 dollar loan facility~~and to pay $107 million of related fees and expenses. In addition, we paid $20 million in related fees and expenses in the ~~aggregate principal amount~~fiscal quarter ended April 30, 2017. Each series of ~~$9,750~~Senior Notes pays interest semi-annually in cash in arrears on January 15 and July 15 of each year, beginning on July 15, 2017. The Senior Notes are recorded as long-term debt, net of original issue discount and capitalized debt issuance costs. The discount and debt issuance costs associated with the issuance of the Senior Notes are amortized to interest expense over their respective terms. The effective interest rates for fixed-rate debt include the stated interest on the notes, the accretion of the original issue discount and amortization of the debt issuance costs.

As a result of the repayment of the outstanding term loans under the 2016 Credit Agreement during the two fiscal quarters ended April 30, 2017, we wrote-off $159 million ~~or the Term B-1 Loan, a Term B-1 euro loan facility~~of debt issuance costs, which were included in loss on extinguishment of debt in the ~~aggregate principal amount~~condensed consolidated statements of €900 million, equivalent to $978 million as of February 1, 2016, or the Term B-1 Euro Loan, a Term B-2 loan facility in the aggregate principal amount of $500 million, or the Term B-2 Loan, and togetheroperations.

In connection with the ~~Term A Loan, Term B-1 Loan,~~issuance of the Senior Notes, the Co-Issuers and ~~Term B-1 Euro Loan, referred~~Guarantors entered into a registration rights agreement pursuant to which they agreed to use commercially reasonable efforts to file one or more registration statements pursuant to the Securities Act of 1933, as amended, to exchange each series of Senior Notes for new notes, with terms substantially identical in all material respects to such series of Senior Notes and to cause the ~~2016 Term Loans.~~ registration statement to be declared effective on or before July 13, 2018. If the Co-Issuers and Guarantors do not comply with these obligations with respect to a series of the Senior Notes, they will be subject to interest penalties.

The following table summarizes details of our Senior Notes:



	April 30, 2017
	Interest Rate		Effective Interest Rate		Issuance Price		Amount (In millions)
Fixed rate notes due January 2020	2.375	%	2.615	%	99.774	%	$	2,750
Fixed rate notes due January 2022	3.000	%	3.214	%	99.592	%	3,500
Fixed rate notes due January 2024	3.625	%	3.744	%	99.896	%	2,500
Fixed rate notes due January 2027	3.875	%	4.018	%	99.558	%	4,800
Unaccreted discount and unamortized debt issuance costs							(122		)
Carrying value of Senior Notes							$	13,428

Revolving Credit Facility

The 2016 Credit Agreement also provides for a revolving credit facility, or the 2016 Revolving Credit Facility, that permits us to borrow from time to time in an aggregate principal amount of up to $500 million for working capital and other corporate purposes, including swingline loans of up to $150 million in the aggregate and for the issuance of letters of credit of up to $100 million in the aggregate, which, in the case of swingline loans and letters of credit, reduce the available borrowing capacity under the 2016 Revolving Credit Facility on a dollar for dollar basis. Our obligations under the 2016 Credit Agreement are guaranteed by certain of our subsidiaries, or the Guarantors, and are collateralized, subject to certain exceptions, by substantially all of the assets of each Guarantor. The 2016 Term Loans were fully drawn at the time of, and the proceeds used to fund, in part, the completion of the Broadcom Merger.

The 2016 Credit Agreement includes (i) a financial covenant that requires a first lien leverage ratio of less than 3.9:1; (ii) customary restrictive covenants (subject, in each case, to certain exceptions and amounts) that limit our ability to, among other things, incur indebtedness, create liens, merge or consolidate with and into other persons, make acquisitions and sell assets; (iii) customary events of default, upon the occurrence of which, after any applicable grace period, the lenders will have the ability to accelerate all outstanding loans thereunder and terminate the commitments; and (iv) customary representations and warranties. We were in compliance with all of the covenants described in the 2016 Credit Agreement as of July 31, 2016. In addition, subject to certain conditions and availability of commitments, we have the ability to increase the aggregate 2016 Term Loans and/or 2016 Revolving Credit Facility. The 2016 Term Loans under the 2016 Credit Agreement bear interest at floating rates.

Borrowings under the 2016 Credit Agreement principally represent a modification of debt and a partial extinguishment of debt outstanding under the 2014 Credit Agreement as defined below. Unamortized debt issuance costs and debt discount from the 2014 Credit Agreement related to the modification will be amortized over the term of the 2016 Credit Agreement. We recognized $106 million of third-party financing costs related to the 2016 Credit Agreement immediately in interest expense in connection with the modification of debt. We also recognized a $34 million loss on extinguishment of debt.

During the three fiscal quarters ended July 31, 2016, we made principal prepayments totaling $610 million on the Term B-1 Loan and fully repaid the €900 million Term B-1 Euro Loan. We also fully repaid the $500 million Term B-2 Loan, which was partially funded with $325 million of additional Term A Loan borrowings incurred pursuant to an incremental amendment to the 2016 Credit Agreement. As a result, during the fiscal quarter and three fiscal quarters ended July 31, 2016, we wrote-off $21 million and $40 million, respectively, of debt issuance costs, which were included in gain (loss) on extinguishment of debt in the condensed consolidated statements of operations.

As of ~~July 31, 2016,~~April 30, 2017, there were no borrowings outstanding under the 2016 Revolving Credit Facility or any material outstanding letters of credit. ~~As of July 31, 2016, the unamortized~~Unamortized debt issuance costs related to the 2016 Revolving Credit Facility were ~~$10~~$8 million and $9 million as of April 30, 2017 and October 30, 2016, respectively, and were included in other long-term assets on the condensed consolidated balance ~~sheet.~~sheets.

~~During~~

We were in compliance with all of the fiscal quarter and three fiscal quarters ended July 31, 2016, the accretion of discount and amortization of debt issuance costs related to the 2016 Term Loans and 2016 Revolving Credit Facility were $10 million and $23 million, respectively, and were includedcovenants described in ~~interest expense in the condensed consolidated statements of operations.~~

~~In connection with~~ the 2016 Credit Agreement ~~we purchased forward exchange contracts with a notional amount~~as of €600 million, to hedge a portion of the foreign currency exchange risk on the principal repayment of the Term B-1 Euro Loan. Upon fully repaying the Term B-1 Euro Loan mentioned above, we settled the forward exchange contracts.April 30, 2017.

Subsequent to the end of the fiscal quarter ended July 31, 2016, we amended the 2016 Credit Agreement and refinanced all of the outstanding Term B-1 Loans and increased the amount of outstanding Term A Loans. See Note 14. “Subsequent Events.”

~~The following table presents the details of the 2016 Term Loans:~~

July 31, 2016
Interest Rate Effective Interest Rate
Amount
(in millions)
Term A Loan due February 2021 2.23 % 2.52 % $ 4,666
Term B-1 Loan due February 2023 4.25
4.57
9,116
Unaccreted discount and unamortized debt issuance costs (206 )
Carrying value of 2016 Term Loans $ 13,576

Assumed Senior Notes

As a result of the Broadcom Merger, we assumed $1,614 million of BRCM’s outstanding senior unsecured notes, or the Senior Notes, at fair value on the Acquisition Date. During the three fiscal quarters ended July 31, 2016, we tendered for and repaid $1,475 million of the Senior Notes. The following table presents the details of the outstanding long-term debt assumed in connection with the acquisition of BRCM, or the Assumed Senior Notes:

July 31, 2016
Interest Rate Effective Interest Rate Amount
(in millions)
Fixed rate notes due November 2018 2.70 % 2.70 % $ 117
Fixed rate notes due August 2022 2.50
2.50
9
Fixed rate notes due August 2024 3.50
3.50
7
Fixed rate notes due August 2034 4.50
4.50
6
Carrying value of Senior Notes $ 139

~~2014 Term Loans and Revolving Credit Facility~~

During our third quarter of fiscal year 2014, certain of Avago’s subsidiaries entered into a collateralized credit agreement with the lenders named therein, or the 2014 Credit Agreement. The 2014 Credit Agreement provided for a term loan facility of $4,600 million, or the 2014 Term Loans, and a revolving credit facility, or the 2014 Revolving Credit Facility, which permitted certain of Avago’s subsidiaries to borrow up to $500 million.

~~Simultaneously with entering into the 2016 Credit Agreement, we repaid in full the amounts outstanding under the 2014 Credit Agreement and terminated the 2014 Credit Agreement.~~

Amortization of debt issuance costs related to the 2014 Term Loans and 2014 Revolving Credit Facility was $4 million in the three fiscal quarters ended July 31, 2016 and $4 million and $12 million in the fiscal quarter and three fiscal quarters ended August 2, 2015, respectively, and was included in interest expense in the condensed consolidated statements of operations.

~~Convertible Senior Notes~~

In May 2014, Avago completed a private placement of its Convertible Notes to two entities affiliated with Silver Lake Partners, or the Purchasers. During fiscal year 2015, the Purchasers converted all of the Convertible Notes that they held in exchange for cash and Avago ordinary shares. During the fiscal quarter and three fiscal quarters ended August 2, 2015, we recognized interest expense of $2 million and $18 million, respectively, related to the coupon interest and accretion of debt discount.



	April 30, 2017
	Interest Rate		Effective Interest Rate		Amount (in millions)
Fixed rate notes due November 2018	2.70	%	2.70	%	$	117
Fixed rate notes due August 2022 - August 2034	2.50% - 4.50%		2.50% - 4.50%		22
Carrying value of Assumed Senior Notes					$	139

Fair Value of Debt

As of ~~July 31, 2016,~~April 30, 2017, the estimated fair ~~values~~value of ~~the 2016 Term Loans and~~ the Senior Notes ~~approximate their carrying values.~~and Assumed Senior Notes was $13,835 million. The fair value of ~~our 2016 Term Loans is determined using inputs based on discounted cash flow models with observable market inputs~~the Senior Notes and ~~takes into consideration variables such as interest rate changes, comparable instruments, and credit-rating changes and, therefore, is classified as Level 2. The fair value of the~~Assumed Senior Notes is classified as Level 2 as we use quoted prices from less active markets.

Future Principal Payments of Debt

The future scheduled principal payments for the outstanding ~~2016 Term Loans~~Senior Notes and Assumed Senior Notes as of ~~July 31, 2016~~April 30, 2017 were as follows (in millions):


Fiscal Year
2016 (remainder)	$	83
2017	334
Fiscal Year:
2017 (remainder)			$	—
2018	451		117
2019	452		—
2020	2,106		2,750
2021	1,869		—
Thereafter	8,626		10,822
Total	$	13,921	$	13,689

7. Shareholders’ Equity

For the period from November 2, 2015 to January 31, 2016, our shareholders’ equity reflected Avago’s outstanding ordinary shares, all of which were publicly traded on the NASDAQ stock market. As a result of the Broadcom Transaction, our ownership interest changed. Pursuant to the Avago Scheme, Broadcom issued 278 million ordinary shares to holders of Avago ordinary shares and issued 112 million ordinary shares to former BRCM shareholders pursuant to the Broadcom Merger. Consequently, the number of Broadcom ordinary shares outstanding increased from 278 million Avago ordinary shares on January 31, 2016 to 390 million Broadcom ordinary shares on February 1, 2016. Both Avago and BRCM became indirect subsidiaries of Broadcom and the Partnership, and Broadcom is the sole General Partner of the Partnership. As a result, the carrying amount of equity attributable to Broadcom was adjusted to reflect the change in our ownership interest of our subsidiaries. Additionally, Broadcom reflects a noncontrolling interest in its shareholders’ equity, which represents the interest of the Limited Partners in the Partnership, as further discussed below.

In connection with the Broadcom Merger, Broadcom also issued 23 million non-economic voting preference shares, or the Special Voting Shares, which is equal to the number of issued Partnership REUs. The Special Voting Shares were issued to a voting trustee pursuant to a voting trust agreement, dated February 1, 2016, between Broadcom, the Partnership and the voting trustee, or the Voting Trust Agreement.

Noncontrolling Interest

~~Noncontrolling interest represents equity interests in consolidated subsidiaries that are not attributable to Broadcom. As of July 31, 2016, the~~The Limited Partners held a noncontrolling interest of approximately 5%5.2% and 5.4% in the Partnership through their ownership of ~~23 million~~ Partnership REUs ~~issued to former BRCM shareholders pursuant to the Broadcom Merger.~~

~~Pursuant to the terms~~as of ~~the Partnership Agreement, each Partnership REU is entitled to distributions from the Partnership in an amount equal to any dividends or distributions that Broadcom declares~~April 30, 2017 and pays with respect to Broadcom ordinary shares. In addition, each holder of a Partnership REU is entitled to vote with respect to matters on which holders of Broadcom ordinary shares are entitled to vote by directing the voting trustee to vote one Special Voting Share for each Partnership REU they hold, pursuant to the Voting Trust Agreement. After the first anniversary of the Acquisition Date, subject to certain additional requirements and potential deferrals as set forth in the Partnership Agreement, a Limited Partner will have the right to require the Partnership to repurchase some or all of the Limited Partner’s Partnership REUs in consideration for, as determined by Broadcom in its sole discretion, either one Broadcom ordinary share or a cash amount as determined under the Partnership Agreement for each Partnership REU submitted for repurchase.October 30, 2016, respectively.

Broadcom adjusts the net income (loss) in its condensed consolidated statements of operations to exclude the noncontrolling interest’s proportionate share of the results. In addition, Broadcom presents the proportionate share of equity attributable to the noncontrolling interest as a separate component of shareholders’ ~~equity within its condensed consolidated balance sheet and statement of shareholders’~~ equity.

~~Dividends~~

On January 30, 2017, Broadcom ~~paid cash dividends of $0.50 and $0.40 per~~registered 23 million ordinary share, or $199 million and $104 million, during the fiscal quarters ended July 31, 2016 and August 2, 2015, respectively. Broadcom paid cash dividends of $1.43 and $1.13 per ordinary share, or $514 million and $292 million, during the three fiscal quarters ended July 31, 2016 and August 2, 2015, respectively.

~~Share-Based Compensation Expense~~

~~Share-based incentive awards are provided~~shares to ~~employees, directors and other persons who provide services~~allow for Limited Partners to ~~our subsidiaries under the terms of various Broadcom equity incentive plans.~~

The following table summarizes share-based compensation expense reported in continuing operations related to share-based awards granted to employees and directors for the periods presented (in millions):

Fiscal Quarter Ended Three Fiscal Quarters Ended
July 31,
2016 August 2,
2015 July 31,
2016 August 2,
2015
Cost of products sold $ 15
$ 7
$ 34
$ 19
Research and development 144
31
294
77
Selling, general and administrative 54
25
128
73
Total share-based compensation expense ^(a)
$ 213
$ 63
$ 456
$ 169

(a) Does not include $6 million and $18 million of share-based compensation related to discontinued operations recognized during the fiscal quarter and three fiscal quarters ended July 31, 2016, respectively, which was included in income (loss) from discontinued operations in our condensed consolidated statements of operations.

In connection with the Broadcom Merger, Broadcom assumed RSUs originally granted by BRCM. Share-based compensation expense reported in continuing operations in the fiscal quarter and three fiscal quarters ended July 31, 2016 included $72 million and $155 million, respectively, relatedexchange their Partnership REUs pursuant to the ~~assumed BRCM RSUs.~~

The fair value of time-based RSUs was estimated using the closing market price of Broadcom ordinary shares on the date of grant, reduced by the present value of dividends expected to be paid on Broadcom ordinary shares prior to vesting. Certain equity awards granted during the fiscal quarter and three fiscal quarters ended July 31, 2016 and August 2, 2015 included both service and market conditions. The fair value of these market-based awards was estimated using Monte Carlo simulation techniques.

~~The following table summarizes the weighted-average assumptions utilized for our market-based awards granted for the periods presented:~~

Market-Based Awards
Fiscal Quarter Ended Three Fiscal Quarters Ended
July 31,
2016 August 2,
2015 July 31,
2016 August 2,
2015
Risk-free interest rate 0.8 % 1.4 % 1.2 % 1.4 %
Dividend yield 1.3 % 1.1 % 1.3 % 1.2 %
Volatility 35.0 % 35.0 % 35.0 % 36.0 %
Expected term (in years) 3.0
4.0
3.8
4.4

~~The risk-free interest rate was derived from the average U.S. Treasury Strips rate during the period, which approximated the rate in effect at the time of grant.~~

~~The dividend yield was based on the historical and expected dividend payouts as of the respective award grant dates.~~

Expected volatility was based on Broadcom's own historical share price volatility over the period commensurate with the expected life of the awards and the implied volatility from its own traded ordinary shares with a term of 180 days measured at a specific date.

The expected term of market-based share options valued using Monte Carlo simulation techniques was based upon the vesting dates forecasted by the simulation and then assuming that share options which vest, and for which the market condition has been satisfied, are exercised at the midpoint between the forecasted vesting date and their expiration. The expected term of market-based RSUs valued using Monte Carlo simulation techniques was commensurate with the awards’ contractual terms.

The total unrecognized compensation cost of time and market-based share options granted but not yet vested as of July 31, 2016 was $78 million, which is expected to be recognized over the remaining weighted-average service period of 1.7 years. Total unrecognized compensation cost related to unvested time and market-based RSUs as of July 31, 2016 was $1,799 million, which is expected to be recognized over the remaining weighted-average service period of 3.1 years.

~~Equity Incentive Award Plans~~

~~A summary of share option activity related to Broadcom’s equity incentive award plans is as follows (in millions, except years and per share amounts):~~

Number
Outstanding

Weighted-
Average
Exercise Price
Per Share

Weighted-
Average
Remaining
Contractual
Life (in years)

Aggregate
Intrinsic
Value
Balance as of November 1, 2015 21
$ 47.92

Exercised (4 ) 44.01

Cancelled (1 ) 52.66

Balance as of July 31, 2016 16
48.73
3.97 $ 1,763
Fully vested as of July 31, 2016 9
41.94
3.60 1,100
Fully vested and expected to vest as of July 31, 2016 16
48.73
3.97 1,763

The total intrinsic values of share options exercised during the fiscal quarter and three fiscal quarters ended July 31, 2016 were $85 million and $476 million, respectively. The total intrinsic values of share options exercised during the fiscal quarter and three fiscal quarters ended August 2, 2015 were $136 million and $470 million, respectively.

~~A summary of RSU activity related to Broadcom’s equity incentive award plans is as follows (in millions, except years and per share amounts):~~

Number
Outstanding

Weighted-
Average
Grant Date
Fair Market Value

Weighted-
Average
Remaining
Contractual
Life (in years)
Balance as of November 1, 2015 5
$ 95.17

Assumed in Broadcom Merger 6
135.58

Granted 12
137.97

Vested (3 ) 112.08

Forfeited (2 ) 129.13

Balance as of July 31, 2016 18
130.26
1.82

Total grant-date fair values of RSUs vested during the fiscal quarter and three fiscal quarters ended July 31, 2016 were $104 million and $370 million, respectively. Total grant-date fair values of RSUs vested during the fiscal quarter and three fiscal quarters ended August 2, 2015 were $18 million and $76 million, respectively.

~~8. Partners’ Capital~~

~~The partners' capital balance as of November 1, 2015 represents, and is equivalent to, the historical shareholders' equity balance of Avago. At the time of executing the Avago Scheme on~~Partnership Agreement. Effective February 1, ~~2016, the historical shareholders' equity balance of Avago belonged, and continues to belong, to Broadcom, as sole General Partner of the Partnership.~~

Pursuant to the terms of the Partnership Agreement, Broadcom, as the holder of the Common Units, is entitled to receive distributions from the Partnership in an amount equal to the aggregate dividends payable by Broadcom to the holders of Broadcom ordinary shares, and the Limited Partners, as holders of the Partnership REUs, are entitled to receive distributions from the Partnership in an amount per unit equal to the dividend payable by Broadcom per ordinary share. Additionally, if Broadcom proposes to redeem, repurchase, or otherwise acquire any Broadcom ordinary shares, the Partnership Agreement requires that the Partnership, immediately prior to such redemption, repurchase or acquisition, make a distribution to Broadcom on the Common Units in an amount sufficient for Broadcom to fund such redemption, repurchase or acquisition, as the case may be.

~~After the first anniversary of the Acquisition Date,~~2017, subject to certain additional requirements and potential deferrals as set forth in the Partnership Agreement, a Limited ~~Partner will~~Partners have the right to require the Partnership to repurchase some or all of ~~the~~such Limited Partner’s Partnership REUs in consideration for, as determined by Broadcom in its sole discretion, either one Broadcom ordinary share or a cash amount as determined under the Partnership Agreement for each Partnership REU submitted for repurchase.

~~Each Limited Partner is entitled~~During the fiscal quarter ended April 30, 2017, the Partnership exchanged 455,863 Partnership REUs pursuant to ~~vote~~exchange notices received. In accordance with ~~respect to matters on which holders~~the terms of the Partnership Agreement, the Partnership satisfied the exchange notices by exchanging these Partnership REUs for the same number of newly issued Broadcom ordinary shares ~~are entitled~~valued at $60 million. The exchanges represented increases in our ownership interest in the Partnership and were accounted for as equity transactions, with no gain or loss recorded in Broadcom’s condensed consolidated statement of operations. Pursuant to ~~vote~~the terms of the Partnership Agreement, upon the exchange of Partnership REUs, each such Partnership REU was cancelled and the Partnership issued the same number of Common Units to the General Partner concurrently with the exchange.

Dividends

The following table summarizes dividend information for the periods presented (in millions, except per share data):



	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2017		May 1, 2016		April 30, 2017		May 1, 2016
Cash dividends paid per ordinary share	$	1.02	$	0.49	$	2.04	$	0.93
Cash dividends paid to ordinary shareholders	$	414	$	193	$	822	$	315

Share-Based Compensation Expense



	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2017		May 1, 2016		April 30, 2017		May 1, 2016
Cost of products sold	$	15	$	13	$	29	$	19
Research and development	150		122		291		150
Selling, general and administrative	51		51		97		74
Total share-based compensation expense	$	216	$	186	$	417	$	243

Equity Incentive Award Plans

A summary of time and market-based RSU activity under Broadcom’s equity incentive award plans is as follows (in millions, except per share amounts):



	Number of RSUs Outstanding		Weighted- Average Grant Date Fair Value Per Share
Balance as of October 30, 2016	17		$	130.71
Granted	7		$	203.92
Vested	(5	)	$	127.11
Forfeited	(1	)	$	136.93
Balance as of April 30, 2017	18		$	160.43

Total grant-date fair value of RSUs vested during the two fiscal quarters ended April 30, 2017 was $571 million. Total unrecognized compensation cost related to unvested RSUs as of April 30, 2017 was $2,400 million, which is expected to be recognized over the remaining weighted-average service period of 3.3 years.

A summary of time and market-based share option activity under Broadcom’s equity incentive award plans is as follows (in millions, except years and per share amounts):



	Number of Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (In years)	Aggregate Intrinsic Value
Balance as of October 30, 2016	15			$	48.77
Exercised	(3	)		$	44.45		$	390
Cancelled	—		*	$	64.37
Balance as of April 30, 2017	12			$	49.38	3.27	$	2,045
Fully vested as of April 30, 2017	9			$	44.67	3.06	$	1,578
Fully vested and expected to vest as of April 30, 2017	12			$	49.38	3.27	$	2,045

* Represents less than 0.5 million shares.

The total unrecognized compensation cost related to unvested share options as of April 30, 2017 was $35 million, which is expected to be recognized over the remaining weighted-average service period of 1.1 years.

8. Partners’ Capital

Effective February 1, 2017, subject to certain additional requirements and potential deferrals as set forth in the Partnership Agreement, Limited Partners have the right to require the Partnership to repurchase some or all of such Limited Partner’s Partnership REUs in consideration for, as determined by ~~directing~~Broadcom in its sole discretion, either one Broadcom ordinary share or a cash amount as determined under the ~~voting trustee to vote one Special Voting Share~~Partnership Agreement for each Partnership REU ~~held,~~submitted for repurchase.

During the fiscal quarter ended April 30, 2017, the Partnership exchanged 455,863 Partnership REUs pursuant to exchange notices received. In accordance with the ~~Voting Trust Agreement.~~terms of the Partnership Agreement, the Partnership satisfied the exchange notices by exchanging these Partnership REUs for the same number of newly issued Broadcom ordinary shares valued at $60 million. The issuances of shares were accounted for as a capital contribution by Broadcom to the Partnership. The exchanges of Partnership REUs were recorded as increases to the Common Units balance and a reduction to the Partnership REUs balance within partners' capital of the Partnership’s condensed consolidated balance sheet. Pursuant to the terms of the Partnership Agreement, upon the exchange of Partnership REUs, each such Partnership REU was cancelled and the Partnership issued the same number of Common Units to the General Partner concurrently with the exchange.

Share-Based Compensation Expense

Share-based incentive awards are provided to employees, directors and other persons who provide services to our subsidiaries under the terms of various Broadcom equity incentive plans. Refer to Note 7. “Shareholders’ Equity” for further details.

Capital Transactions with General Partner

~~Capital~~The following table summarizes capital transactions with the General Partner ~~of $327 million consist of capital contributions~~for the periods presented (in millions):



	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2017		May 1, 2016		April 30, 2017		May 1, 2016
Capital transactions made by General Partner to Partnership	$	89	$	289	$	150	$	289

Distributions

The following table summarizes distributions by the ~~General Partner to~~Partnership for the ~~Partnership and RSUs originally granted by BRCM that were assumed by Broadcom in connection with the Broadcom Merger.~~

~~Distributions~~

~~The Partnership paid cash distributions of $199 million and $392 million to Broadcom, as General Partner, and cash distributions of $0.50 and $0.99~~periods presented (in millions, except per Partnership ~~REU, or $12 million and $23 million, to the Limited Partners during the fiscal quarter and three fiscal quarters ended July 31, 2016, respectively, in accordance with the Partnership Agreement.~~REU):



	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2017		May 1, 2016		April 30, 2017		May 1, 2016
Cash distributions paid to General Partner	$	414	$	193	$	822	$	193
Cash distributions paid per Partnership REU	$	1.02	$	0.49	$	2.04	$	0.49
Cash distributions paid to Limited Partners	$	23	$	11	$	46	$	11

9. Income Taxes

For the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31, 2016,~~April 30, 2017, our benefit from income ~~tax benefit~~taxes was ~~$117~~$103 million and ~~$199~~$93 million, respectively, compared to ~~an income tax provision of $23~~$99 million and ~~$61~~$82 million for the fiscal quarter and ~~three~~two fiscal quarters ended ~~August 2, 2015,~~May 1, 2016, respectively. The benefit from income taxes in the 2017 fiscal periods was primarily due to a discrete item from the recognition of $139 million and $181 million of excess tax benefits from share-based awards that were vested and/or exercised during the fiscal quarter and two fiscal quarters ended April 30, 2017, respectively. The benefit from income taxes in the 2016 fiscal periods ~~are a result of the loss~~was primarily due to losses from continuing operations, partially offset by ~~a $60 million net~~ discrete ~~expense for the three fiscal quarters ended July 31, 2016, as discussed below.~~

Starting with fiscal quarter ended May 1, 2016, we no longer intend to indefinitely reinvest in operations outside of Singapore. We provided for taxes, including withholding taxes, on $1,854 million of our undistributed earnings as of November 1, 2015, and recognizedexpenses, $93 million of ~~discrete expense in the three fiscal quarters ended July 31, 2016, related to these undistributed earnings. This discrete expense~~which was ~~partially offset by discrete benefits that included $19 million from the release of California state valuation allowance as~~ a result of the Broadcom Merger, $5 million from the net recognition of previously unrecognized tax benefits as a result of the expiration of the statute of limitations for certain audit periods, and $13 million from the retroactive reinstatement of the U.S. Federal Research and Development tax credit from January 1, 2015 to November 1, 2015.our change in assertion on undistributed earnings.

In connection with the Broadcom Merger, $10,023 million of net deferred tax liabilities were established on the excess of book basis over the tax basis of acquired investments in certain foreign subsidiaries that have not been indefinitely reinvested and acquired identifiable intangible assets, partially offset by acquired tax attributes. Net deferred tax liabilities are based upon certain assumptions underlying our preliminary purchase price allocation related to the Broadcom Merger. Upon finalization of the purchase price allocation, additional adjustments to the amount of our net deferred taxes may be required, provided we are within the measurement period.

~~Unrecognized~~Uncertain Tax ~~Benefits~~

During the three fiscal quarters ended July 31, 2016, gross unrecognized tax benefits increased by $1,415 million, net of $7 million of releases due to the lapse of various statutes of limitations. The balance of gross unrecognized tax benefits was $1,993 million as of July 31, 2016. The increase in the gross unrecognized tax benefits was primarily a result of the Broadcom Merger. Uncertain tax positions assumed in connection with the Broadcom Merger are initially estimated as of the Acquisition Date. We continue to re-evaluate these items with any adjustments to our preliminary estimates recognized in goodwill, provided we are within the measurement period and we continue to collect information in order to determine their estimated values.

Accrued interest and penalties are included in other long-term liabilities on the condensed consolidated balance sheets. As of July 31, 2016 and November 1, 2015, the combined amounts of cumulative accrued interest and penalties were approximately $104 million and $43 million, respectively. The increase in cumulative accrued interest and penalties was primarily a result of the Broadcom Merger.

A portion of our unrecognized tax benefits will affect our effective tax rate if they are recognized upon favorable resolution of the uncertain tax positions. As of July 31, 2016, and November 1, 2015, approximately $2,097 million and $615 million, respectively, of the unrecognized tax benefits, including accrued interest and penalties, would affect our effective tax rate if favorably resolved. During the three fiscal quarters ended July 31, 2016, we recognized $7 million of previously unrecognized tax benefits as a result of the expiration of the relevant statute of limitations for certain audit periods.

Positions

We are subject to Singapore income tax ~~examinations~~examination for ~~the~~fiscal years ~~ended October 31,~~ 2011 and later. ~~Our~~Certain of our acquired companies are subject to tax examinations in major jurisdictions outside Singapore for fiscal years ~~2005~~2010 and later. ~~We believe it~~It is possible that we may recognize up to $8$7 million of our existing unrecognized tax benefits within the next 12 months as a result of lapses of ~~the~~ statute of limitations for certain audit periods.

10. Segment Information

Reportable Segments

We have four reportable segments: wired infrastructure, wireless communications, enterprise storage and industrial & other. These segments align with our principal target markets. The segments represent components for which separate financial information is available that is utilized on a regular basis by the Chief Executive Officer of Broadcom, who has been identified as the Chief Operating Decision Maker, or the CODM, as defined by authoritative guidance on segment reporting, in determining how to allocate resources and evaluate performance. The segments are determined based on several factors, including client base, homogeneity of products, technology, delivery channels and similar economic characteristics.

Our CODM assesses the performance of each segment and allocates resources to ~~those segments~~each segment based on net revenue and operating income ~~(loss)~~ and does not evaluate ~~operating~~our segments using discrete asset information. Operating income ~~(loss)~~ by segment includes items that are directly attributable to each segment. Operating income ~~(loss)~~ by segment also includes shared expenses such as global operations, including manufacturing support, logistics and quality control, which are allocated primarily based on headcount, expenses associated with our globally integrated support organizations, such as sales and corporate marketing functions, as well as finance, information technology, human resources, legal and related corporate infrastructure costs, along with certain benefit related expenses, which are allocated primarily based on a percentage of revenue, and facilities allocated based on square footage.

Unallocated Expenses

Depreciation expense directly attributable to each reportable segment is included in operating income ~~(loss)~~ for each segment. However, the CODM does not evaluate depreciation expense by operating segment and, therefore, it is not separately presented. There was no inter-segment revenue. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

The following tables present our net revenue and operating income ~~(loss)~~ by reportable segment for the periods presented (in millions):


	Fiscal Quarter Ended						Three Fiscal Quarters Ended						Fiscal Quarter Ended						Two Fiscal Quarters Ended
	July 31, 2016			August 2, 2015			July 31, 2016			August 2, 2015			April 30, 2017			May 1, 2016			April 30, 2017			May 1, 2016
Net revenue:
Wired infrastructure	$	2,062		$	372		$	4,508		$	1,101		$	2,111		$	2,060		$	4,195		$	2,446
Wireless communications	1,008			616			2,378			1,856			1,150			792			2,325			1,370
Enterprise storage	527			588			1,730			1,541			712			525			1,419			1,203
Industrial & other	195			159			488			486			217			164			390			293
Total net revenue	$	3,792		$	1,735		$	9,104		$	4,984		$	4,190		$	3,541		$	8,329		$	5,312

Operating income (loss):
Wired infrastructure	$	846		$	130		$	1,800		$	345		$	937		$	819		$	1,870		$	954
Wireless communications	308			285			754			871			414			181			841			446
Enterprise storage	223			225			749			588			382			217			757			526
Industrial & other	102			78			256			243			109			91			170			154
Unallocated expenses	(1,743		)	(419		)	(4,349		)	(929		)	(1,368		)	(2,309		)	(2,658		)	(2,606		)
Total operating income (loss)	$	(264	)	$	299		$	(790	)	$	1,118		$	474		$	(1,001	)	$	980		$	(526	)

Significant Customer Information

We sell our products ~~primarily~~ through our direct sales force and a select network of distributors ~~and manufacturers’ representatives.~~globally. One direct customer accounted for ~~16%~~12% and ~~33%~~18% of our net accounts receivable balance at ~~July 31,~~April 30, 2017 and October 30, 2016, ~~and November 1, 2015,~~ respectively. During ~~both~~ the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31,~~April 30, 2017, one direct customer represented 13% and 14% of our net revenue, respectively. During the fiscal quarter and two fiscal quarters ended May 1, 2016, one direct customer represented ~~13% of our net revenue. During the fiscal quarter~~11% and ~~three fiscal quarters ended August 2, 2015, one direct customer represented 21% and 23%~~12% of our net revenue, respectively. The majority of the revenue from this customer was included in our wireless communications and wired infrastructure and wireless communications segments for the fiscal year 2016 periods and the wireless communications segment for the fiscal year 2015 periods. This customer is a contract manufacturer for a number of original equipment manufacturers.segments.

11. Related Party Transactions

~~2.0% Convertible Senior Notes~~

In May 2014, Avago completed a private placement of its Convertible Notes to the Purchasers, who are affiliated with Silver Lake, of which Kenneth Hao, a director of Broadcom, is a Managing Partner and Managing Director. During fiscal year 2015, the Purchasers converted all of the outstanding Convertible Notes in exchange for $1,000 million in cash and 13.8 million Avago ordinary shares.

~~Other~~

During the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31,~~April 30, 2017 and May 1, 2016, ~~and August 2, 2015,~~ in the ordinary course of business, we purchased from, or sold to, ~~several~~ entities of which one of our directors also serves or served as a director, or entities that are otherwise affiliated with one of ~~Broadcom’s~~our directors. ~~We also made purchases from Silicon Manufacturing Partners Pte. Ltd., or SMP, our joint venture with GlobalFoundries.~~

The following tables summarize the transactions and balances with ~~our related parties, including SMP and the Purchasers,~~these entities for the indicated periods (for the portion of such period that they were considered related) (in millions):



	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2017		May 1, 2016		April 30, 2017		May 1, 2016
Total net revenue	$	71	$	90	$	148	$	129
Total costs and expenses, including inventory purchases	$	46	$	24	$	65	$	37

Fiscal Quarter Ended Three Fiscal Quarters Ended
July 31,
2016 August 2,
2015 July 31,
2016 August 2,
2015
Total net revenue $ 101
$ 49
$ 230
$ 140
Total costs and expenses, including inventory purchases 17
19
54
66


	July 31, 2016		November 1, 2015		April 30, 2017		October 30, 2016
Total receivables	$	24	$	7	$	23	$	15
Total payables	8		4		$	11	$	7

12. Commitments and Contingencies

Commitments

The following table summarizes contractual obligations and commitments as of ~~July 31,~~April 30, 2017 that materially changed from the end of fiscal 2016 (in millions):

Fiscal Year
Total 2016 (remainder) 2017 2018 2019 2020 2021 Thereafter
Debt principal, interest and fees $ 16,804
$ 208
$ 829
$ 945
$ 925
$ 2,554
$ 2,250
$ 9,093
Purchase commitments 1,728
1,374
316
38
—
—
—
—
Other contractual commitments 336
46
108
87
64
29
2
—
Operating lease obligations 484
37
142
116
69
43
19
58
Capital lease obligations 112
31
66
15
—
—
—
—
$ 19,464
$ 1,696
$ 1,461
$ 1,201
$ 1,058
$ 2,626
$ 2,271
$ 9,151



			Fiscal Year
	Total		2017 (remainder)		2018		2019		2020		2021		Thereafter
Debt principal, interest and fees	$	16,918	$	221	$	569	$	450	$	3,166	$	383	$	12,129
Purchase commitments	$	1,167	$	1,031	$	104	$	31	$	1	$	—	$	—

Debt Principal, Interest and Fees. Represents principal and interest on borrowings under the Senior Notes and Assumed Senior Notes, as well as commitment fees payable ~~on borrowings and credit facilities~~ under the 2016 Credit ~~Agreement and the Senior Notes.~~Agreement.

Purchase Commitments. Represents unconditional purchase obligations that include agreements to purchase goods or services, primarily inventory, that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable without penalty.

~~We also make~~ Cancellation for outstanding purchase orders for capital expenditures in connection with ~~capacity expansion of our~~ internal fabrication facility ~~in Fort Collins, Colorado, as well as~~expansion and construction atof our new campuses ~~in Orange County, California~~is generally allowed but requires payment of all costs incurred through the date of cancellation and, ~~San Jose, California. These purchases~~therefore, cancelable purchase orders for these capital expenditures are ~~typically conducted on a purchase order basis and the amount shown~~included in the table ~~includes $344 million of cancelable and non-cancelable outstanding purchase obligations under such purchase orders as of July 31, 2016.~~

~~Other Contractual Commitments.~~ ~~Represents amounts payable pursuant to agreements related to IT, human resources, financial infrastructure outsourcing services and other service agreements.~~

~~Operating Lease Obligations.~~ ~~Represents real property and equipment leased from third parties under non-cancelable operating leases.~~

~~Capital Lease Obligations.~~ ~~Represents equipment leased from third parties under non-cancelable capital leases.~~above.

Due to the inherent uncertainty with respect to the timing of future cash outflows associated with our unrecognized tax benefits at ~~July 31, 2016,~~April 30, 2017, we are unable to reliably estimate the timing of cash settlement with the respective taxing authority. Therefore, ~~$927~~$1,080 million of unrecognized tax benefits and accrued interest classified within other long-term liabilities on our condensed consolidated balance sheet as of ~~July 31, 2016~~April 30, 2017 have been excluded from the contractual obligations table above.

There were no other substantial changes to our contractual commitments during the first two quarters of fiscal year 2017 from those disclosed in Broadcom’s 2016 Annual Report on Form 10-K.

Contingencies

From time to time, we are involved in litigation that we believe is of the type common to companies engaged in our line of business, including commercial disputes, employment issues and disputes involving claims by third parties that our activities infringe their patent, copyright, trademark or other intellectual property rights. Legal proceedings are often complex, may require the expenditure of significant funds and other resources, and the outcome of litigation is inherently uncertain, with material adverse outcomes possible. Intellectual property claims generally involve the demand by a third-party that we cease the manufacture, use or sale of the allegedly infringing products, processes or technologies and/or pay substantial damages or royalties for past, present and future use of the allegedly infringing intellectual property. Claims that our products or processes infringe or misappropriate any third-party intellectual property rights (including claims arising through our contractual indemnification of our customers) often involve highly complex, technical issues, the outcome of which is inherently uncertain. Moreover, from time to time we pursue litigation to assert our intellectual property rights. Regardless of the merit or resolution of any such litigation, complex intellectual property litigation is generally costly and diverts the efforts and attention of our management and technical personnel.

Lawsuits Relating to the Brocade Acquisition

On December 13, 2016, December 15, 2016, December 21, 2016, January 5, 2017 and January 18, 2017, six putative class action complaints were filed in the United States District Court for the Northern District of California, or the U.S. Northern District Court, captioned Steinberg v. Brocade Communications Systems, Inc., et al., No. 3:16-cv-7081-EMC, Gross v. Brocade Communications Systems, Inc., et al., No. 3:16-cv-7173-EJD, Jha v. Brocade Communications Systems, Inc., et al., No. 3:16-cv-7270-HRL, Bragan v. Brocade Communications Systems, Inc., et al., No. 3:16-cv-7271-JSD, Chuakay v. Brocade Communications Systems, Inc., et al., No. 3:17-cv-0058-PJH, and Mathew v. Brocade Communications Systems, Inc., et al., No. 3:16-cv-7271-HSG, respectively. The Steinberg, Bragan and Mathew complaints name as defendants Brocade, the members of Brocade’s board of directors, Broadcom, BRCM, and Merger Sub. The Gross, Jha and Chuakay complaints name as defendants Brocade and the members of Brocade’s board of directors. All of the complaints assert claims under Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and Rule 14a-9 promulgated thereunder. The complaints allege, among other things, that the board of directors of Brocade failed to provide material information and/or omitted material information from the Preliminary Proxy Statement filed with the SEC on December 6, 2016 by Brocade. The complaints seek to enjoin the closing of the transaction between Brocade and Broadcom, as well as certain other equitable and declaratory relief and attorneys’ fees and costs. On January 10, 2017, January 27, 2017 and February 15, 2017, the U.S. Northern District Court granted motions to relate the cases, all of which are now related to the Steinberg action and before the Honorable Judge Edward Chen. On January 11, 2017, Plaintiff Jha filed a motion for a preliminary injunction, which was subsequently withdrawn on January 18, 2017. On February 6, 2017, Plaintiff Gross voluntarily dismissed the Gross action without prejudice, which was ordered by the U.S. Northern District Court on February 15, 2017. On April 14, 2017, the U.S. Northern District Court granted the Motion for Consolidation, Appointment as Lead Plaintiff and Approval of Lead Plaintiff’s Selection of Counsel filed by Plaintiff Giulio D. Cessario, a plaintiff in the Steinberg action, which consolidated these actions under the caption In re Brocade Communications Systems, Inc. Securities Litigation, Case No. 3:16-cv-07081-EMC. We believe these claims are all entirely without merit and intend to vigorously defend these actions.

Lawsuits Relating to Tessera, Inc.

On May 23, 2016, Tessera Technologies, Inc., Tessera, Inc., or Tessera, and Invensas ~~Corporation,~~Corp., or Invensas or collectively, the Complainants, filed a complaint to institute an investigation with the U.S. International Trade Commission, or the U.S. ~~ITC, alleging~~ITC. The Complainants allege infringement by Broadcom and our subsidiaries, BRCM, Avago and Avago Technologies U.S. Inc., or Avago U.S., or collectively, the Respondents, of three ~~U.S.~~ patents ~~or the U.S. ITC patents-at-issue,~~ relating to semiconductor packaging and semiconductor manufacturing ~~technologies.~~technology. The ~~proposed~~downstream respondents, ~~also include~~which are customers of the Respondents, are Arista Networks, Inc., ARRIS International plc, ARRIS Group, Inc., ARRIS Technology, Inc., ARRIS Enterprises LLC, ARRIS Solutions, Inc., Pace Ltd., Pace Americas, LLC, Pace USA, LLC, ASUSteK Computer Inc., ASUS Computer International, Comcast Cable Communications, LLC, Comcast Cable Communications Management, LLC, Comcast Business Communications, LLC, HTC Corporation, HTC America, Inc., NETGEAR, Inc., Technicolor S.A., Technicolor USA, Inc., and Technicolor Connected Home USA ~~LLC. The complaint requests institution of an~~LLC, or collectively, the Downstream Respondents. On July 20, 2016, the U.S. ITC instituted the investigation, ~~pursuant to Section 337 of~~or the ~~Tariff Act of 1930, as amended. The requested relief includes~~ITC Investigation. Complainants seek the following relief: (1) a permanent limited exclusion order excluding from ~~entry~~importation into the U.S. all of the ~~proposed respondents'~~Respondents' semiconductor devices and semiconductor device packages and Downstream Respondents’ products containing ~~the same~~Respondents’ semiconductor devices and semiconductor device packages that infringe one or more of the ~~U.S.~~three patents subject to the ITC ~~patents-at-issue~~Investigation and (2) a permanent cease and desist order prohibiting the ~~proposed respondents~~Respondents and Downstream Respondents and related companies from ~~at least~~ importing, marketing, advertising, demonstrating, warehousing inventory for distribution, offering for sale, selling, qualifying for use in the products of others, distributing, or using the ~~proposed respondents'~~Respondents' semiconductor devices and semiconductor device packages and Downstream Respondents’ products containing ~~the same~~Respondents’ semiconductor devices and semiconductor device packages that infringe one or more of the three patents subject to the ITC Investigation. The U.S. ITC ~~patents-at-issue. On~~held the hearing in March 2017, and it is expected to issue the Initial Determination on June ~~20, 2016, the U.S. ITC instituted an investigation.~~26, 2017.

On May 23, 2016, Tessera and Invensas filed a complaint against BRCM in the U.S. District Court for the District of Delaware, Case No. 1-16-cv-00379, alleging infringement of the three patents subject to the ITC Investigation. The complaint seeks compensatory damages in an unspecified amount, as well as an award of reasonable attorneys’ fees, interest, and costs. This case is stayed pending resolution of the ITC Investigation.

On May 23, 2016, Tessera and Tessera Advanced Technologies, Inc. filed a complaint against BRCM in the U.S. ~~ITC patents-at-issue.~~District Court for the District of Delaware, Case No. 1-16-cv-00380, alleging infringement of four patents relating to semiconductor packaging and circuit technologies. On June 19, 2016, the complaint was amended to add three more patents relating to semiconductor packaging technologies for a total of seven patents in this matter. The complaint seeks compensatory damages in an unspecified amount, as well as an award of reasonable attorneys’ fees, interest, and costs.

On May 23, 2016, Invensas filed a Writ of Summons against Broadcom, BRCM, Broadcom Netherlands B.V. and Broadcom Communications Netherlands B.V. in the Hague District Court in the Netherlands, Case No. L1422381, alleging infringement of a single European patent that is a foreign counterpart to one of the ~~U.S.~~patents subject to the ITC ~~patents-at-issue,~~Investigation, or the European ~~patent-at-issue.~~Patent. The named defendants also include distributors EBV Elektronik GmbH, Arrow Central Europe GmbH, and Mouser Electronics Netherlands B.V. The requested relief includes a cease-and-desist order and damages in an unspecified amount.

On May 23, 2016, Invensas also filed a complaint against each of (i) Broadcom Germany GmbH and ~~its~~Broadcom‘s German distributors, Case No. 7 O 97/16, and (ii) Broadcom and BRCM, Case No. 7 O 98/16, in the Mannheim District Court in

Germany, alleging infringement of the European ~~patent-at-issue.~~Patent. The required relief includes damages in an unspecified amount and an injunction preventing the sale of the accused products. On February 3, 2017, the Mannheim District Court held a hearing to determine infringement. On March 17, 2017, the Mannheim District Court issued its ruling. The court found infringement in both cases and granted injunctions preventing the commercialization of certain Broadcom products in Germany. Broadcom is appealing the decision. On March 27, 2017, Broadcom filed a brief with the appellate court in Germany in Case No. 7 O 98/16 seeking: (1) reversal on the merits, (2) a higher bond for enforcement of the injunction, and (3) a stay of enforcement pending the nullity action. On May 22, 2017, Broadcom filed its appeal of Case No. 7 O 97/16 seeking (1) reversal on the merits and (2) a stay of enforcement. On June 1, 2017, the German appellate court denied Broadcom’s request for a stay of enforcement in Case No. 7 O 98/16, but has not yet ruled on our appeal of the decision on the merits or the higher bond amount. Tessera is now enforcing the injunction in both cases against Broadcom.

The nullity action, which could invalidate the patent at issue in both German cases, is scheduled to be decided in January 2018.

On ~~May 23,~~November 7, 2016, ~~Tessera and Tessera Advanced Technologies, Inc. also~~Invensas filed a complaint against ~~Broadcom~~Avago, Avago U.S., Emulex Corporation, or Emulex, LSI and PLX Technology, Inc., or PLX, in the U.S. District Court for the District of Delaware, Case No. ~~1-16-cv-00380,~~1-16-cv-01033, alleging infringement of ~~four additional~~two of the patents subject to the ITC Investigation. The complaint seeks compensatory damages in an unspecified amount, as well as an award of reasonable attorneys’ fees, interest, and costs. This case is stayed pending resolution of the ITC Investigation.

On November 7, 2016, Tessera and Invensas filed a complaint against Avago, Avago U.S., and Avago Technologies Wireless (U.S.A.) Manufacturing Inc. in the U.S. District Court for the District of Delaware, Case No. 1-16-cv-01034, alleging infringement of two patents relating to semiconductor packaging ~~semiconductor manufacturing~~technology. On January 31, 2017, Tessera and ~~circuit technologies. On June 19, 2016,~~Invensas amended the complaint ~~was amended to add~~in this matter and added three ~~more U.S.~~additional patents ~~relating~~related to semiconductor packaging ~~technologies for a total of seven U.S. patents~~technology, which are also at issue in ~~this matter.~~case No. 1-16-cv-00379 pending in Delaware. The complaint seeks compensatory damages in an unspecified amount, as well as an award of reasonable attorneys’ fees, interest, and costs.

We ~~intend~~continue to vigorously defend these actions.

Lawsuits Relating to the Acquisition of BRCM

Since the announcement of the Broadcom ~~Transaction,~~Merger, 11 putative class action complaints have been filed by and purportedly on behalf of alleged BRCM shareholders. Two putative class action complaints were filed in the United States District Court for the Central District of California, or the U.S. Central District Court, captioned: Wytas, et al. v. McGregor, et al., Case No. 8:15-cv-00979, filed on June 18, 2015; and Yassian, et al. v. McGregor, et al., Case No. 8:15-cv-01303, filed on August 15, 2015, or the Federal Actions. On September 2, 2015, plaintiffs in the Wytas, et al. v. McGregor, et al. matter filed an amended complaint adding claims under the U.S. federal securities laws. One putative class action complaint was filed in the Superior Court of the State of California, County of Santa Clara, captioned Jew v. Broadcom Corp., et al., Case No. 1-15-CV-281353, filed June 2, 2015. Eight putative class action complaints were filed in the Superior Court of the State of California, County of Orange, captioned: Xu v. Broadcom Corp., et al., Case No. 30-2015-00790689-CU-SL-CXC, filed June 1, 2015; Freed v. Broadcom Corp., et al., Case No. 30-2015-00790699-CU-SL-CXC, filed June 1, 2015; N.J. Building Laborers Statewide Pension Fund v. Samueli, et al., Case No. 30-2015-00791484-CU-SL-CXC, filed June 4, 2015; Yiu v. Broadcom Corp., et al., Case No. 30-2015-00791490-CU-SL-CXC, filed June 4, 2015; Yiu, et al. v. Broadcom Corp., et al., Case No. 30-2015-00791762-CU-BT-CXC, filed June 5, 2015; Yassian, et al. v. McGregor, et al., Case No. 30-2015-00793360-CU-SL-CXC, filed June 15, 2015; Seafarers’ Pension Plan v. Samueli, et al., Case No. 30-2015-00794492-CU-SL-CXC, filed June 19, 2015; and Engel v. Broadcom Corp., et al., Case No. 30-2015-00797343-CU-SL-CXC, filed on July 2, 2015 (together with Jew v. Broadcom Corp., et al., the State Actions). The Federal Actions and State Actions name as defendants, among other parties, BRCM, members of BRCM’s board of directors and Avago, and allege, among other things, breaches of fiduciary duties and aiding and abetting those alleged breaches. Additionally, the Federal Actions allege violations of Sections 14(a) and 20(a) of the ~~Securities Exchange Act of 1934, as amended, or the~~ Exchange Act and SEC Rule 14-a9.

On August 14, 2015, the Superior Court of the State of California, County of Orange, issued an order coordinating and consolidating the State Actions, captioned Broadcom Shareholder Cases, JCCP 4834. On September 18, 2015, the ~~United States~~U.S. Central District Court ~~for the Central District of California~~ consolidated the Federal Actions under the caption In re Broadcom Corporation Stockholder Litigation, Case No. 8:15-cv-00979. On September 25, 2015, the Superior Court of the State of California, County of Orange, stayed the State Actions pending the outcome of the Federal Actions.

On October 28, 2015, BRCM supplemented its disclosures, and filed additional proxy materials with the SEC. On November 10, 2015, BRCM shareholders voted to approve the Broadcom ~~Transaction.~~

Merger. On November 16, 2015, the ~~United States~~U.S. Central District Court ~~for the Central District of California~~ appointed lead plaintiffs and lead counsel in the Federal Actions.

On January 15, 2016, lead plaintiffs in the Federal Actions filed a Second Amended Consolidated Class Action Complaint, or the Federal Consolidated ~~Compliant,~~Complaint, which names as defendants, among other parties, members of BRCM’s board of directors and Avago, and alleges breaches of fiduciary duties and aiding and abetting those alleged breaches, as well as violation of Sections 14(a) and 20(a) of the Exchange Act and SEC Rule 14-a9.

On February 1, 2016, we completed the acquisition of BRCM.

On September 23, 2016, the parties entered into a Stipulation and Agreement of Compromise and Settlement, or the Stipulation, which has been filed with the U.S. Central District Court. Pursuant to the Stipulation, BRCM agreed to confirm certain facts concerning the Broadcom Merger. Additionally, defendants agreed to pay or cause to be paid attorneys’ fees and expenses as may be awarded by the U.S. Central District Court to plaintiffs’ counsel for their efforts in prosecuting the litigation, as well as the costs of administering the settlement. The Stipulation provides that the settlement is subject to certain conditions, including final approval of the settlement and final certification of a settlement class by the U.S. Central District Court. The Stipulation includes a release of all claims against defendants relating to or arising from the litigation. On December 2, 2016, the U.S. Central District Court granted preliminary approval of the settlement. On February 27, 2017, the U.S. Central District Court granted final approval of the settlement. On March 16, ~~2016, defendants filed a motion~~2017, the State Actions were dismissed with prejudice pursuant to ~~dismiss~~the settlement. The settlement did not have an impact on our financial statements.

We believe that the claims in the litigation, including the Federal Consolidated ~~Complaint.~~Complaint, were without merit and that no misconduct or damages occurred. Defendants entered into the settlement to eliminate the burden, distraction, and expense of further litigation.

Lawsuits Relating to the Acquisition of Emulex

On March 3, 2015, two putative shareholder class action complaints were filed in the Court of Chancery of the State of Delaware, or the Delaware Court of Chancery, against ~~Emulex Corporation, or~~ Emulex, its directors, Avago Technologies Wireless (U.S.A.) Manufacturing Inc., or AT Wireless, and Emerald Merger Sub, Inc., or Emerald Merger Sub, captioned as follows: James Tullman v. Emulex Corporation, et al., Case No. 10743-VCL (Del. Ch.); Moshe Silver ACF/Yehudit Silver U/NY/UTMA v. Emulex Corporation, et al., Case No. 10744-VCL (Del. Ch.). On March 11, 2015, a third complaint was filed in the Delaware Court of Chancery, captioned Hoai Vu v. Emulex Corporation, et al., Case No. 10776-VCL (Del. Ch.). The complaints alleged, among other things, that Emulex’s directors breached their fiduciary duties by approving the Agreement and Plan of Merger, dated February 25, 2015, by and among AT Wireless, Emerald Merger Sub and Emulex ~~or the Merger Agreement,~~ and that AT Wireless and Emerald Merger Sub aided and

abetted these alleged breaches of fiduciary duty. The complaints sought, among other things, either to enjoin the transaction or to rescind it following its completion, as well as damages, including attorneys’ and experts’ fees. The Delaware Court of Chancery has entered an order consolidating the three Delaware actions under the caption In re Emulex Corporation Stockholder Litigation, Consolidated C.A. No. 10743-VCL. On May 5, 2015, we completed our acquisition of Emulex. On June 5, 2015, the Court of Chancery dismissed the consolidated action without prejudice.

On April 8, 2015, a putative class action complaint was filed in the ~~United States~~U.S. Central District Court, ~~for the Central District of California,~~ entitled Gary Varjabedian, et al. v. Emulex Corporation, et al., No. 8:15-cv-554-CJC-JCG. The complaint names as defendants Emulex, its directors, AT Wireless and Emerald Merger Sub, and purported to assert claims under Sections 14(d), 14(e) and 20(a) of the Exchange Act. The complaint alleged, among other things, that the board of directors of Emulex failed to provide material information and/or omitted material information from the Solicitation/Recommendation Statement on Schedule 14D-9 filed with the SEC on April 7, 2015 by Emulex, together with the exhibits and annexes thereto. The complaint sought to enjoin the tender offer to purchase all of the outstanding shares of Emulex common stock, as well as certain other equitable relief and attorneys’ fees and costs. On July 28, 2015, the ~~court~~U.S. Central District Court issued an order appointing the lead plaintiff and approving lead counsel for the putative class. On September 9, 2015, plaintiff filed a first amended complaint seeking rescission of the merger, unspecified money damages, other equitable relief and attorneys’ fees and costs. On October 13, 2015, defendants moved to dismiss the first amended complaint, which the ~~court~~U.S. Central District Court granted with prejudice on January 13, 2016. Plaintiff filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit, or the Ninth Circuit Court, on January 15, 2016. The appeal is captioned Gary Varjabedian, et al. v. Emulex Corporation, et al., No. 16-55088. On June 27, 2016, the Plaintiff-Appellant filed his opening brief, ~~and~~ on August 17 and August 22, 2016, the Defendants-Appellees filed their answering briefs, and on October 5, 2016 Plaintiff-Appellant filed his reply brief. The date of any oral argument has not been determined at this time.

We believe these claims are all entirely without merit and intend to vigorously defend these actions.

Lawsuits Relating to the Acquisition of PLX

In June and July 2014, four lawsuits were filed in the Superior Court for the State of California, County of Santa Clara, or the Superior Court, challenging our acquisition of PLX. On July 22, 2014, the ~~court~~Superior Court consolidated these California actions under the caption In re PLX Technology, Inc. S’holder Litig., Lead Case No. 1-14-CV-267079 (Cal. Super. Ct., Santa Clara) and appointed lead counsel. That same day, the ~~court~~Superior Court also stayed the consolidated action, pending resolution of related actions filed in the Delaware Court of Chancery, described below.

Also in June and July 2014, five similar lawsuits were filed in the Delaware Court of Chancery. On July 21, 2014, the ~~court~~Delaware Court of Chancery consolidated these Delaware actions under the caption In re PLX Technology, Inc. Stockholders Litigation, Consol. C.A. No. 9880-VCL (Del. Ch.), appointed lead plaintiffs and lead counsel, and designated an operative complaint for the consolidated action. On July 31, 2014, counsel for lead plaintiffs in Delaware informed the ~~court~~Delaware Court of Chancery that they would not seek a preliminary injunction, but intend to seek damages and pursue monetary remedies through post-closing litigation. Our acquisition of PLX closed on August 12, 2014.

On October 31, 2014, lead plaintiffs filed a consolidated amended complaint. This complaint alleges, among other things, that PLX’s directors breached their fiduciary duties to PLX’s stockholders by seeking to sell PLX for an inadequate price, pursuant to an unfair process, and by agreeing to preclusive deal protections in the merger agreement. Plaintiffs also allege that Potomac Capital Partners II, L.P., Deutsche Bank Securities, ~~Avago Technologies Wireless (U.S.A.) Manufacturing Inc., or~~ AT Wireless and Pluto Merger Sub, Inc., the acquisition subsidiary, aided and abetted the alleged fiduciary breaches. Plaintiffs also allege that PLX’s Solicitation/Recommendation statement on Schedule 14D-9, as filed with the SEC, contained false and misleading statements and/or omitted material information necessary to inform the shareholder vote. The plaintiffs seek, among other things, monetary damages and attorneys’ fees and costs. On September 3, 2015, the ~~court~~Delaware Court of Chancery granted motions to dismiss filed by AT Wireless, the acquisition subsidiary and two PLX directors, and denied motions to dismiss filed by several other PLX directors, Potomac Capital Partners II, L.P. and Deutsche Bank Securities.

On August 17, 2016, the five remaining PLX director-defendants and Deutsche Bank Securities entered into a stipulation of partial settlement to resolve claims against all of the former PLX directors and Deutsche Bank Securities asserted in the Delaware class action. The partial settlement also provides for a release of all potential claims against AT Wireless, Pluto Merger Sub, Avago and PLX. Defendant Potomac Capital Partners II, L.P. is not a party to the settlement. This partial settlement ~~is subject to court approval following notice to~~was approved by the ~~putative class~~Delaware Court of ~~PLX shareholders. A hearing~~Chancery on ~~the settlement is scheduled for November 17,~~December 20, 2016.

The Delaware class litigation is on-going. On November 9, 2016, the sole remaining defendant, Potomac Capital Partners II, L.P., filed cross-claims against the named individual director defendants and Deutsche Bank for contribution. Under various contracts and statutes, PLX may owe indemnification to each of these parties. The cross-claims are now barred according to the terms of the approved partial settlement, although Potomac Capital Partners II, L.P. might be entitled to an offset (based on contributory fault) of any damages it might owe to the class.

Other Matters

In addition to the matters discussed above, we are currently engaged in a number of legal actions in the ordinary course of our business.

We do not believe, based on currently available facts and circumstances, that the final outcome of any pending legal proceedings, taken individually or as a whole, will have a material adverse effect on our financial condition, results of

operations or cash flows. However, lawsuits may involve complex questions of fact and law and may require the expenditure of significant funds and other resources to defend. The results of litigation are inherently uncertain, and material adverse outcomes are possible. From time to time, we may enter into confidential discussions regarding the potential settlement of such lawsuits. Any settlement of pending litigation could require us to incur substantial costs and other ongoing expenses, such as future royalty payments in the case of an intellectual property dispute.

During the periods presented, no material amounts have been accrued or disclosed in the accompanying condensed consolidated financial statements with respect to loss contingencies associated with any legal proceedings, as potential losses for such matters are not considered probable and ranges of losses are not reasonably estimable. These matters are subject to many uncertainties and the ultimate outcomes are not predictable. There can be no assurances that the actual amounts required to satisfy any liabilities arising from the matters described above will not have a material adverse effect on our results of operations, financial position or cash flows.

Other Indemnifications

As is customary in our industry and as provided for in local law in the United States and other jurisdictions, many of our standard contracts provide remedies to our customers and others with whom we enter into contracts, such as defense, settlement, or payment of judgment for intellectual property claims related to the use of our products. From time to time, we indemnify customers, as well as our suppliers, contractors, lessors, lessees, companies that purchase our businesses or assets and others with whom we enter into contracts, against combinations of loss, expense, or liability arising from various triggering events related to the sale and the use of our products, the use of their goods and services, the use of facilities and state of our owned facilities, the state of the assets and businesses that we sell and other matters covered by such contracts, usually up to a specified maximum amount. In addition, from time to time we also provide protection to these parties against claims related to undiscovered liabilities, additional product liability or environmental obligations. In our experience, claims made under such indemnifications are rare and the associated estimated fair value of the liability is not material.

13. Restructuring, Impairment and Disposal Charges

Restructuring Charges

In the second quarter of fiscal year 2016, we began the implementation of cost reduction activities associated with the Broadcom Merger. In connection with ~~these activities,~~the merger, we ~~currently expect to eliminate approximately 2,400 positions from our workforce across all business~~recognized $22 million and ~~functional areas on a global basis. Management is in the process~~$64 million of ~~further evaluating the resources and business needs of the combined entities. As a result, we may eliminate additional positions and incur additional~~ restructuring costs in continuing operations primarily related to ~~these cost reduction activities.~~

employee termination costs during the fiscal quarter and two fiscal quarters ended April 30, 2017, respectively. During the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31,~~May 1, 2016, we recognized ~~$57~~$297 million and ~~$364~~$307 million, respectively, of restructuring costs in continuing operations primarily related to employee termination costs primarily associated with the Broadcom Merger. ~~During~~

Approximately 3,200 employees have been terminated from our workforce across all business and functional areas on a global basis as a result of the fiscal quarter and three fiscal quarters ended August 2, 2015, we recognized $34 million and $60 million, respectively, of restructuring costs in continuing operations primarily related to employee termination costs related to the Emulex Corporation and LSI Corporation acquisitions.Broadcom Merger.

The following table summarizes the significant activities within, and components of, the restructuring liabilities related to continuing and discontinued operations during the ~~three~~two fiscal quarters ended ~~July 31, 2016~~April 30, 2017 (in millions):

Employee Termination Costs Leases and Other Exit Costs Total
Balance as of November 1, 2015 $ 13
$ 13
$ 26
Liabilities assumed from acquisition 2
13
15
Restructuring charges ^(a)
359
14
373
Utilization (287 ) (16 ) (303 )
Balance as of July 31, 2016 ^(b)
$ 87
$ 24
$ 111



	Employee Termination Costs			Leases and Other Exit Costs			Total
Balance as of October 30, 2016	$	116		$	35		$	151
Restructuring charges ^(a)	56			12			68
Utilization	(126		)	(30		)	(156		)
Balance as of April 30, 2017 ^(b)	$	46		$	17		$	63

(a) Includes $9$4 million of restructuring expense related to discontinued operations recognized during the ~~three~~two fiscal quarters ended ~~July 31, 2016,~~April 30, 2017, which was included in ~~income (loss)~~loss from discontinued operations in our condensed consolidated statements of operations.

(b) The majority of the employee termination costs balance is expected to be paid by the ~~second~~third quarter of fiscal year ~~2018.~~2017. The leases and other exit costs balance isrepresents lease obligations that are expected to be paid ~~during the~~over their remaining terms ofthrough the ~~leases, which extend through~~third quarter of fiscal year ~~2019.~~

2018.

Impairment and Disposal Charges

During the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31,~~April 30, 2017, we recorded impairment and disposal charges of $15 million and $25 million, respectively. These charges included impairment of property, plant and equipment acquired through the Broadcom Merger and an in-process research and development, or IPR&D, project.

During the fiscal quarter and two fiscal quarters ended May 1, 2016, we recorded impairment and disposal charges of ~~$220~~$22 million and ~~$246~~$44 million, ~~respectively, for IPR&D related to our wireless communications segment and enterprise storage segment, which were abandoned as a result of integration efforts related to the Broadcom Merger.~~

In addition, during the fiscal quarter and three fiscal quarters ended July 31, 2016, we recorded losses on disposal and asset impairments of $5 million and $23 million, respectively, compared to $66 million and $67 million for the fiscal quarter and three fiscal quarters ended August 2, 2015, respectively. These charges ~~were primarily related to~~included impairment of IPR&D projects and losses on the sale of certain fiber optics subsystem manufacturing and related assets.

14. Subsequent Events

~~Amendment to 2016 Credit Agreement~~

On August 2, 2016, three Broadcom subsidiaries, together with a group of lenders, including Bank of America, N.A., as the administrative agent and collateral agent, entered into three amendments to the 2016 Credit Agreement, referred to as the August 2016 Amendments. These amendments were: (i) the Second Incremental Term A Facility Amendment, pursuant to which we incurred an additional $2,994 million of Term A Loans, which were used to repay (x) $2,521 million of outstanding Term B-1 Loans and (y) $473 million of outstanding Term A Loan by certain non-continuing lenders; (ii) the First Amendment pursuant to which we (x) incurred $6,595 million of new Term B-3 loans, which were used to repay all of the then outstanding Term B-1 Loan and (y) reduced the applicable margins on the Term B-3 Loans; and (iii) the Second Amendment pursuant to which the Term A Loan and 2016 Revolving Credit Facility lenders agreed to certain changes to the 2016 Credit Agreement to increase our operating flexibility, including the automatic release of all collateral securing the 2016 Term Loans upon (x) repayment of all outstanding Term B-3 Loans and (y) the Company’s achievement of the specified investment grade ratings. The Term A Loans incurred in August 2016 have the same terms as the existing Term A Loans. The Term B-3 Loan matures on February 1, 2023 (the same date as the prior Term B-1 Loan). A summary of the effects of the August 2016 Amendments is set forth in the table below ($ in millions):

Amount Outstanding Immediately Prior to August 2016 Amendments Amount Outstanding Immediately After August 2016 Amendments
Applicable Margins^†
Term A Loans $ 4,666
$ 7,187
Variable based on applicable credit rating. Unchanged by August 2016 Amendments
Term B-1 Loans 9,116
—

Eurocurrency Loans: 3.5%,
Base Rate Loans: 2.5%.
LIBOR floor of 0.75%.^(a)
Term B-3 Loans —
6,595

Eurocurrency Loans: 3.0%,
Base Rate Loans: 2.0%.
No LIBOR floor. ^(b)
Total 2016 Term Loans $ 13,782
$ 13,782

~~† All capitalized terms are as defined in the 2016 Credit Agreement.~~

~~(a) Margins were subject to a step-down adjustment of 0.25% based on achievement of a total leverage ratio of less than or equal to 1.75:1.00.~~

~~(b) Margins are subject to a step-down adjustment of 0.25% upon achievement of a total net leverage ratio of less than or equal to 1.50:1.00.~~

Cash Dividends/Distribution Declared

On ~~August~~May 31, ~~2016,~~2017, Broadcom’s Board of Directors declared an interim cash dividend of ~~$0.51~~$1.02 per Broadcom ordinary share, payable on ~~September~~June 30, ~~2016~~2017 to shareholders of record at the close of business (Eastern Time) on ~~September~~June 19, ~~2016,~~2017, or the Broadcom Dividend.

As a result of the Broadcom Dividend, and pursuant to the Partnership Agreement, the Partnership will pay a cash distribution in an amount equal to the aggregate amount of the Broadcom Dividend to Broadcom, as General Partner, and a ~~$0.51~~$1.02 distribution per Partnership REU, payable on ~~September~~June 30, ~~2016,~~2017, to Limited Partners of record at the close of business (Eastern Time) on ~~September~~June 19, ~~2016.~~2017.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, or Form 10-Q, and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended ~~November 1, 2015,~~October 30, 2016, or fiscal year ~~2015,~~2016, included in the Annual Report on Form 10-K for fiscal year ~~2015,~~2016, or ~~2015~~2016 Annual Report on Form ~~10-K, of Avago Technologies~~10-K. Unless stated otherwise or the context otherwise requires, references to “Broadcom,” “we,” “our” and “us” mean Broadcom Limited ~~or Avago.~~and its consolidated subsidiaries, including Broadcom Cayman L.P. References to the “Partnership” mean Broadcom Cayman L.P. and its consolidated subsidiaries. Financial information and results of operations ~~presented in this Form 10-Q~~ for periods prior to February 1, 2016 relate to Avago Technologies Limited, our predecessor, or Avago, and relate to Broadcom ~~Limited~~ and ~~Broadcom Cayman L.P.~~the Partnership for the ~~period~~periods after February 1, 2016, the date of completion of our acquisition of Broadcom Corporation, or BRCM, and Avago, or the Acquisition Date. Similarly, references to “Broadcom,” “we,” “our” and “us” are to Broadcom Limited and its consolidated subsidiaries, including Broadcom Cayman L.P., from and after the Acquisition Date and, prior to that time, to our predecessor, Avago, unless otherwise specified or the context otherwise requires. References to the “Partnership” mean Broadcom Cayman L.P. and its consolidated subsidiaries.Avago. This Form 10-Q may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, which are made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements may include projections of financial information; statements about historical results that may suggest trends for our business; statements of the plans, strategies, and objectives of management for future ~~operations, including merger, acquisition and divestiture and related activities; statements about~~ (i) the expected benefits of our acquisition of BRCM, (ii) our plans, objectives and intentions with respect to future operations and products, (iii) our competitive position and opportunities, and (iv) the impact of the transaction on the market for our products;operations; statements of expectation or belief regarding future events (including any acquisitions we may make), technology developments, our products, product sales, expenses, liquidity, cash flow and growth rates, customer concentration and relationships, or enforceability of our intellectual property rights, or ~~IP, rights;~~IP; and the effects of seasonality on our ~~results of operations.~~business. Such statements are based on current expectations, estimates, forecasts and projections of our or industry performance and macroeconomic conditions, based on management’s judgment, beliefs, current trends and market conditions, and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Accordingly, we caution you not to place undue reliance on these statements. For example, there can be no assurance that we will achieve the expected benefits of our acquisition of BRCM or our other acquisitions, product sales efforts, revenues or expenses will meet any expectations or follow any trend(s), or that our ability to compete effectively will be successful or yield anticipated results. Important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” in Part II, Item 1A of this Form 10-Q, and in other documents we file from time to time with the Securities and Exchange Commission, or SEC. All of the forward-looking statements in this Form 10-Q are qualified in their entirety by reference to the factors listed above and those discussed under the heading “Risk Factors” below. We undertake no intent or obligation to publicly update or revise any ~~of these~~ forward-looking ~~statements,~~statement, whether as a result of new information, future events or otherwise, except as otherwise required by law.

Overview

~~Broadcom is the successor to Avago Technologies Limited, or Avago.~~ We are a leading designer, developer and global supplier of a broad range of ~~analog and digital~~ semiconductor ~~connectivity solutions~~devices with a focus on ~~analog III-V based products and~~ complex digital and mixed signal complementary metal oxide semiconductor based ~~devices.~~devices and analog III-V based products. We have a history of innovation and offer thousands of products that are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, ~~telecommunications~~telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. ~~We differentiate ourselves through our high performance design and integration capabilities and focus on developing products for target markets where we believe we can earn attractive margins.~~ We have four reportable segments: wired infrastructure, wireless communications, enterprise storage and industrial & other, which align with our principal target markets. ~~Avago historically operated in these same four reportable segments.~~

Broadcom Cayman L.P., or the Partnership, is an exempted limited partnership formed under the laws of the Cayman Islands in order to effect the business combination between Avago and BRCM. ~~In connection with~~Broadcom is the completion of the Broadcom Transaction (as defined below), the Partnership amended and restated its exempted limited partnership agreement, or the Partnership Agreement, whereby it authorized its common partnership units, or Common Units, and its restricted exchangeable limited partnership units, or Partnership REUs. Broadcom remained itsPartnership’s sole General Partner and currently owns a majority interest (by vote and value) in the Partnership. ~~As General Partner,~~The acquisition of BRCM, or the Broadcom has the exclusive right, power and authority to manage, control, administer and operate the business and affairs and to make decisions regarding the undertaking and business of the Partnership in accordance with the Partnership Agreement, as amended from time to time, and applicable

~~laws. There is no board of directors of the Partnership.~~

The Partnership REUs are deemed to be registered under Section 12(b) of the Exchange Act and the Partnership is subject to the informational requirements of the Exchange Act and the rules and regulations promulgated thereunder.Merger, closed on February 1, 2016.

Recent Developments and Highlights

On February 1, 2016, pursuant to the Agreement and Plan of Merger, or the Broadcom Agreement, by and among Broadcom, Avago, BRCM, the Partnership and certain other subsidiaries of Broadcom, (i) Broadcom acquired Avago pursuant to a Scheme of Arrangement, or the Avago Scheme, under Singapore law in accordance with Section 210 of the Companies Act (Chapter 50) of Singapore, and (ii) thereafter, two subsidiaries of Broadcom merged with and into BRCM with BRCM as the surviving corporation of each such merger, or the Broadcom Merger. Following the consummation of the Avago Scheme and the Broadcom Merger, or the Broadcom Transaction, each of Avago and BRCM became indirect subsidiaries of Broadcom and the Partnership.

Pursuant to the Avago Scheme, all of the ordinary shares in the capital of Avago issued and outstanding immediately prior to the effectiveness of the Avago Scheme were exchanged, on a one-for-one basis, for newly issued ordinary shares of Broadcom.

Pursuant to the terms of the Broadcom Agreement, BRCM shareholders received, in aggregate, approximately $16,798 million in cash, 112 million of Broadcom ordinary shares and 23 million Partnership REUs in exchange for all shares of BRCM common stock, par value $0.0001 per share, issued and outstanding immediately prior to the effective time of the Broadcom Merger. Broadcom also assumed unvested restricted stock unit awards, or RSUs, originally granted by BRCM and converted them into 6 million Broadcom RSUs.

The aggregate consideration for the Broadcom Merger was approximately $35,706 million. We funded the cash portion of the Broadcom Merger with net proceeds from the issuance of $15,628 million in term loans under a new collateralized credit facility, or the 2016 Credit Agreement, that we entered into at the time of closing of the Broadcom Merger, which is discussed in detail in “Note 6. Borrowings” included in Part I, Item 1 of this Form 10-Q, as well as cash on hand of the combined companies. The financial results provided in this Form 10-Q include the results of operations of BRCM commencing as of the Acquisition Date.

In the fiscal quarter ended May 1, 2016, Broadcom’s Board of Directors, or the Board, approved the implementation of cost reduction activities associated with the Broadcom Merger. We recorded $277 million and $604 million in restructuring, impairment, and disposal charges related to the Broadcom Merger and related integration effortsHighlights during the ~~fiscal quarter and three~~two fiscal quarters ended ~~July 31, 2016, respectively. In connection with this action, we expect to eliminate approximately 2,400 positions from our workforce across all business and functional areas on a global basis.~~

~~In addition to the Broadcom Transaction, highlights during the three fiscal quarters ended July 31, 2016~~April 30, 2017 include the following:

Our cash and cash equivalents were ~~$1,961~~$4,254 million at ~~July 31, 2016,~~April 30, 2017, compared with ~~$1,822~~$3,097 million at ~~November 1, 2015.~~October 30, 2016.

We generated ~~$2,059~~$2,936 million of cash from operations during the ~~three~~two fiscal quarters ended ~~July 31, 2016.~~April 30, 2017.

Broadcom paid aggregate cash dividends on its ordinary shares of ~~$514~~$822 million, and the Partnership made aggregate distributions of ~~$23~~$46 million on its restricted exchangeable limited partnership units, or Partnership REUs, during the ~~three~~two fiscal quarters ended ~~July 31, 2016.~~April 30, 2017.

~~During the fiscal quarter ended July 31, 2016, we~~

On January 19, 2017, two Broadcom subsidiaries completed the ~~sales~~issuance and sale of ~~certain BRCM businesses for aggregate cash proceeds of $630 million.~~

~~During the three fiscal quarters ended July 31, 2016, we repaid in full our term loan facility of $4,600 million,~~senior unsecured notes, or the ~~2014 Term Loans,~~Senior Notes, in an aggregate principal amount of $13,550 million. The net proceeds, together with cash on hand, were used to repay all of the outstanding term loans under our guaranteed, collateralized credit agreement ~~and fully repaid~~entered into on February 1, 2016, or the ~~€900~~2016 Credit Agreement, in the aggregate amount of $13,555 million ~~Term B-1 Euro Loan (defined below under~~ ~~“Non-Operating Income and Expenses”) and the $500 million Term B-2 Loan (defined below under “Non-Operating Income and Expenses”), partially funded with $325 million of additional Term A Loan (defined below under “Non-Operating Income and Expenses”) borrowings.~~. As a result, during two fiscal quarters ended April 30, 2017, we wrote-off ~~$74~~$159 million of debt issuance costs, which were included in ~~gain (loss)~~loss on extinguishment of debt in ~~our~~the condensed consolidated statements of operations.

Acquisition & Divestitures

Pending Acquisition of Brocade Communications Systems, Inc.

On November 2, 2016, we entered into an Agreement and Plan of Merger, or the Brocade Agreement, by and among Broadcom, BRCM, Brocade Communications Systems, Inc., a Delaware corporation, or Brocade, and Bobcat Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of BRCM, or Merger Sub. On December 18, 2016, BRCM assigned all of its rights and obligations under the Brocade Agreement and transferred all of the issued and outstanding capital stock of Merger Sub to LSI Corporation. The Brocade Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Brocade with Brocade as the surviving corporation, or the Brocade Acquisition. As a result of the Brocade Acquisition, Brocade will become an indirect subsidiary of Broadcom and the Partnership.

We currently expect the Brocade Acquisition to close on or about July 31, 2017, subject to the satisfaction of the remaining closing conditions.

Pending Divestiture of Brocade’s IP Networking Business

Critical Accounting ~~Policies and~~ Estimates

The preparation of financial statements in accordance with generally accepted accounting principles in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the

carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. ~~The~~Our actual financial results ~~experienced by us~~ may differ materially and adversely from our estimates. Our critical accounting policies are those that affect our historical financial statements materially and involve difficult, subjective or complex judgments by management. Those policies include revenue recognition, ~~accounting for~~ business combinations, valuation of long-lived assets, intangible assets and goodwill, inventory valuation, ~~and warranty reserves, accounting for~~ income taxes, retirement and post-retirement benefit plan assumptions, share-based compensation, and employee bonus programs.

There were no significant changes in our critical accounting policies during the ~~three~~two fiscal quarters ended ~~July 31, 2016~~April 30, 2017 compared to those previously disclosed in “Critical Accounting ~~Policies and~~ Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in ~~Avago’s 2015~~our 2016 Annual Report on Form 10-K.

Results of Operations

Fiscal Quarter and ~~Three~~Two Fiscal Quarters Ended ~~July 31, 2016~~April 30, 2017 Compared to Fiscal Quarter and ~~Three~~Two Fiscal Quarters Ended ~~August 2, 2015~~May 1, 2016

The following table sets forth our results of operations for the periods presented:



	Fiscal Quarter Ended
	April 30, 2017		May 1, 2016			April 30, 2017		May 1, 2016
	(In millions)					(As a percentage of net revenue)
Statements of Operations Data:
Net revenue	$	4,190	$	3,541		100	%	100	%
Cost of products sold:
Cost of products sold	1,564		1,437			38		40
Purchase accounting effect on inventory	1		828			—		23
Amortization of acquisition-related intangible assets	639		198			15		6
Restructuring charges	10		32			—		1
Total cost of products sold	2,214		2,495			53		70
Gross margin	1,976		1,046			47		30
Research and development	829		787			20		22
Selling, general and administrative	204		238			5		7
Amortization of acquisition-related intangible assets	442		735			10		21
Restructuring, impairment and disposal charges	27		287			1		8
Total operating expenses	1,502		2,047			36		58
Operating income (loss)	$	474	$	(1,001	)	11	%	(28	)%

Fiscal Quarter Ended
July 31,
2016 August 2,
2015 July 31,
2016 August 2,
2015
(In millions) (As a percentage of net revenue)
Statements of Operations Data:
Net revenue $ 3,792
$ 1,735
100 % 100 %
Cost of products sold:
Cost of products sold 1,520
694
40
40
Purchase accounting effect on inventory 271
26
7
2
Amortization of intangible assets 211
129
6
7
Restructuring charges 8
2
—
—
Total cost of products sold 2,010
851
53
49
Gross margin 1,782
884
47
51
Research and development 814
276
22
16
Selling, general and administrative 230
143
6
8
Amortization of intangible assets 728
68
19
4
Restructuring, impairment and disposal charges 274
98
7
6
Total operating expenses 2,046
585
54
34
Operating income (loss) $ (264 ) $ 299
(7 )% 17 %


	Three Fiscal Quarters Ended									Two Fiscal Quarters Ended
	July 31, 2016			August 2, 2015		July 31, 2016		August 2, 2015		April 30, 2017		May 1, 2016			April 30, 2017		May 1, 2016
	(In millions)					(As a percentage of net revenue)				(In millions)					(As a percentage of net revenue)
Statements of Operations Data:
Net revenue	$	9,104		$	4,984	100	%	100	%	$	8,329	$	5,312		100	%	100	%
Cost of products sold:
Cost of products sold	3,656			2,038		41		41		3,137		2,136			38		40
Purchase accounting effect on inventory	1,099			30		12		1		1		828			—		16
Amortization of intangible assets	539			355		6		7
Amortization of acquisition-related intangible assets										1,198		328			14		6
Restructuring charges	41			5		—		—		16		33			—		1
Total cost of products sold	5,335			2,428		59		49		4,352		3,325			52		63
Gross margin	3,769			2,556		41		51		3,977		1,987			48		37
Research and development	1,868			762		21		15		1,637		1,054			20		20
Selling, general and administrative	582			368		6		7		405		352			5		6
Amortization of intangible assets	1,517			186		17		4
Amortization of acquisition-related intangible assets										882		789			10		15
Restructuring, impairment and disposal charges	592			122		6		2		73		318			1		6
Total operating expenses	4,559			1,438		50		28		2,997		2,513			36		47
Operating income (loss)	$	(790	)	$	1,118	(9	)%	23	%	$	980	$	(526	)	12	%	(10	)%

Net Revenue

Our overall net revenue, as well as the percentage of total net revenue generated by sales in each of our segments, has varied from quarter to quarter, due largely to fluctuations in end-market demand, including the effects of ~~seasonality.~~seasonality, which is discussed in detail below under “Seasonality”.

Historically, a relatively small number of customers have accounted for a significant portion of our net revenue. Direct sales to Foxconn Technology Group companies (including Hon Hai Precision Industries), together referred to as Foxconn,

accounted for 13% ~~of our net revenue during both of the fiscal quarter~~ and ~~three fiscal quarters ended July 31, 2016. Foxconn accounted for 21% and 23%~~14% of our net revenue during the fiscal quarter and ~~three~~two fiscal quarters ended ~~August 2, 2015,~~April 30, 2017, respectively. Foxconn accounted for 11% and 12% of our net revenue during the fiscal quarter and two fiscal quarters ended May 1, 2016, respectively. We believe our aggregate sales to Apple Inc., when our direct sales to it are combined with our sales to the contract manufacturers that it utilizes ~~including Foxconn,~~(which include Foxconn), accounted for ~~more than 10%~~approximately 15% of our net revenue for both the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31,~~April 30, 2017 and May 1, 2016.

~~Our top five direct customers collectively account for a significant portion of our total net revenue.~~ For the fiscal quarter ended ~~July 31, 2016,~~April 30, 2017, our top ~~five~~10 direct customers collectively accounted for ~~34%~~56% of our net revenue and included ~~two~~four distributors. For the ~~three~~two fiscal quarters ended ~~July 31, 2016,~~April 30, 2017, our top ~~five~~10 direct customers collectively accounted for ~~31%~~55% of our net revenue and included ~~two~~four distributors.

From time to time, some of our key customers place large orders or delay orders, causing our quarterly net revenue to fluctuate significantly. This is particularly true in our wireless communications segment as fluctuations may be magnified by the launches of, and seasonal variations in, sales of mobile handsets, as well as changes in the overall economic environment.

In recent years, ~~between 45% and 55%~~approximately 50% of our net revenue has come from sales to distributors, original equipment manufacturers, or OEMs, orand contract manufacturers located in China. However, the end-customers for our products, or for the end products into which our products are incorporated, are frequently located in countries other than China. As a result, we believe that a substantially smaller percentage of our net revenue is ultimately dependent on sales of either our product, or our customers’ product incorporating our product, to ~~end customers~~end-customers located in China.

The following tables set forth net revenue by segment for the ~~fiscal quarters and three fiscal quarters ended July 31, 2016 and August 2, 2015 (in millions, except for percentages):~~periods presented:

Fiscal Quarter Ended Three Fiscal Quarters Ended
Net Revenue July 31, 2016 August 2, 2015 $ Change % Change July 31, 2016 August 2, 2015 $ Change % Change
Wired infrastructure $ 2,062
$ 372
$ 1,690
454 % $ 4,508
$ 1,101
$ 3,407
309 %
Wireless communications 1,008
616
392
64
2,378
1,856
522
28
Enterprise storage 527
588
(61 ) (10 ) 1,730
1,541
189
12
Industrial & other 195
159
36
23
488
486
2
—
Total net revenue $ 3,792
$ 1,735
$ 2,057
119
$ 9,104
$ 4,984
$ 4,120
83


	Fiscal Quarter Ended		Three Fiscal Quarters Ended		Fiscal Quarter Ended								Two Fiscal Quarters Ended
% of Net Revenue	July 31, 2016	August 2, 2015	July 31, 2016	August 2, 2015
Net Revenue					April 30, 2017		May 1, 2016		$ Change		% Change		April 30, 2017		May 1, 2016		$ Change		% Change
					(In millions, except for percentages)
Wired infrastructure	54%	21%	50%	22%	$	2,111	$	2,060	$	51	2	%	$	4,195	$	2,446	$	1,749	72	%
Wireless communications	27	36	26	37	1,150		792		358		45	%	2,325		1,370		955		70	%
Enterprise storage	14	34	19	31	712		525		187		36	%	1,419		1,203		216		18	%
Industrial & other	5	9	5	10	217		164		53		32	%	390		293		97		33	%
Total net revenue	100%	100%	100%	100%	$	4,190	$	3,541	$	649	18	%	$	8,329	$	5,312	$	3,017	57	%



	Fiscal Quarter Ended		Two Fiscal Quarters Ended
% of Net Revenue	April 30, 2017	May 1, 2016	April 30, 2017	May 1, 2016
Wired infrastructure	50%	58%	50%	46%
Wireless communications	28	22	28	26
Enterprise storage	17	15	17	23
Industrial & other	5	5	5	5
Total net revenue	100%	100%	100%	100%

Fiscal quarter ended ~~July 31, 2016~~April 30, 2017 compared to corresponding prior year period. Net revenue from our wired infrastructure ~~and wireless communications segments~~segment increased primarily due to ~~the contributions~~an increase in demand for our networking application-specific integrated circuit and optical products. Net revenue from ~~acquired BRCM products since February 1, 2016.~~our wireless communications segment increased primarily due to an increase in handset demand and an increase in our wireless content in those handsets. Net revenue from our enterprise storage segment ~~decreased~~increased primarily due to ~~a decline~~an increase in demand for our ~~server~~hard disk drive, or HDD, products and ~~storage connectivity~~custom solid state drive controller products. Net revenue from our industrial & other segment increased primarily due to an increase in demand for our optocoupler ~~and industrial fiber optic~~ products. Our total net revenue also included ~~$112~~$162 million from development arrangements and sales and licensing of IP, compared to ~~$76~~$120 million in the corresponding prior year period, which primarily benefited our wired infrastructure ~~and industrial & other segments, respectively.~~segment.

~~Three~~Two fiscal quarters ended ~~July 31, 2016~~April 30, 2017 compared to corresponding prior year period. Total net revenue increased primarily due to two quarters of contributions from acquired BRCM products in 2017 compared to one quarter in 2016. Net revenue from our wired infrastructure segment increased primarily due to ~~the contributions from~~acquired BRCM ~~products acquired in February 2016.~~products. Net revenue from our wireless communications segment increased primarily due to ~~contributions from~~ acquired BRCM products, an increase in handset demand and an increase in our wireless ~~connectivity and related products since February 1, 2016, partially offset by a decrease~~content in ~~demand for our radio frequency, or RF, components from a key North American smartphone customer.~~those handsets. Net revenue from our enterprise storage segment increased primarily due to ~~contributions from the Emulex Corporation business acquired~~an increase in ~~May 2015.~~demand for our HDD products and custom solid state drive controller products. Net revenue from our industrial & other segment ~~was flat.~~increased primarily due to an increase in demand for our optocoupler products. Our total net revenue also included ~~$314~~$281 million from development arrangements and sales and licensing of IP, compared to ~~$226~~$202 million in the corresponding prior year period, which primarily benefited our wired infrastructure ~~and industrial & other segments, respectively.~~segment.

Gross Margin

Gross margin was ~~$1,782~~$1,976 million for the fiscal quarter ended ~~July 31, 2016~~April 30, 2017 compared to ~~$884~~$1,046 million for the fiscal quarter ended ~~August 2, 2015. This $898~~May 1, 2016. The $930 million increase was primarily due to ~~contributions from~~an 18% increase in net revenue and an $827 million reduction in purchase accounting effect on inventory, offset by an increase of $441 million in amortization of acquisition-related intangible assets. Gross margin was $3,977 million for the ~~BRCM businesses acquired~~two fiscal quarters ended April 30, 2017 compared to $1,987 million for the two fiscal quarters ended May 1, 2016. The $1,990 million increase was primarily due to a 57% increase in ~~February 2016.~~ revenue and an $827 million reduction in purchase accounting effect on inventory, offset in part by an increase of $870 million in amortization of acquisition-related intangible assets.

As a percentage of net revenue, gross margin was 47% and ~~51%~~30% for the fiscal quarters ended ~~July 31,~~April 30, 2017 and May 1, 2016, ~~and August 2, 2015,~~ respectively. Gross margin was $3,769 million for the three fiscal quarters ended July 31, 2016 compared to $2,556 million for the three fiscal quarters ended August 2, 2015. This $1,213 million increase was primarily due to contributions from the BRCM businesses acquired in February 2016 to our wired infrastructure and wireless communications segments and contributions from the Emulex business acquired in May 2015 to our enterprise storage segment. As a percentage of net revenue, gross margin was ~~41%~~48% and ~~51%~~37% for the ~~three~~two fiscal quarters ended ~~July 31,~~April 30, 2017 and May 1, 2016, ~~and August 2, 2015,~~ respectively. ~~The 4% and 10% decreases in gross~~Gross margin ~~as a percentage of net revenue for the fiscal quarter and three fiscal quarters ended July 31, 2016, respectively, compared to the same periods in the prior year,~~percentages were ~~largely due to $271 million and $1,099 million, respectively, of costs resulting from the step-up of inventory to fair value and the increase in~~affected by amortization of acquisition-related intangible assets ~~associated with the Broadcom Merger.~~and purchase accounting effect on inventory, as discussed above.

Research and Development Expense

Research and development expense increased ~~$538~~$42 million, or ~~195%~~5%, for the fiscal quarter ended ~~July 31, 2016~~April 30, 2017 compared to the fiscal quarter ended ~~August 2, 2015. Research and development expense increased $1,106 million, or 145%, for the three fiscal quarters ended July 31, 2016 compared to the three fiscal quarters ended August 2, 2015.~~May 1, 2016. Research and development expense as a percentage of net revenue was 20% for the fiscal quarter ended April 30, 2017 compared to 22% for the fiscal quarter ended ~~July 31, 2016~~May 1, 2016. Research and development expense increased $583 million, or 55%, for the two fiscal quarters ended April 30, 2017 compared to ~~16% for~~ the two fiscal ~~quarter~~quarters ended ~~August 2, 2015.~~May 1, 2016. Research and development expense as a percentage of net revenue was ~~21%~~20% for each of the ~~three~~two fiscal quarters ended ~~July 31, 2016 compared to 15% for the three fiscal quarters ended August 2, 2015.~~April 30, 2017 and May 1, 2016. The ~~overall~~ increase in research and development expense dollars ~~and as a percentage of net revenue~~ for the fiscal quarter ended April 30, 2017 compared to the corresponding period in the prior year was primarily due to higher share-based compensation expense. The increase in research and ~~three~~development expense dollars for the two fiscal quarters ended ~~July 31, 2016~~April 30, 2017 compared to the corresponding period in the prior year was primarily due to the ~~acquisition of BRCM.~~Broadcom Merger and higher share-based compensation expense. Share-based compensation ~~included~~expense was higher in ~~research and development expense increased~~fiscal year 2017 due to ~~RSUs assumed in, and integration-awards~~integration equity awards granted to employees acquired in the Broadcom Merger, as well as annual employee equity awards granted at higher grant-date fair values.

Selling, General and Administrative Expense

Selling, general and administrative expense ~~increased $87~~decreased $34 million, or ~~61%~~14%, for the fiscal quarter ended ~~July 31, 2016,~~April 30, 2017, compared to the fiscal quarter ended ~~August 2, 2015.~~May 1, 2016. Selling, general and administrative expense as a percentage of net revenue was 5% for the fiscal quarter ended April 30, 2017 compared to 7% for the fiscal quarter ended May 1, 2016. These decreases were the result of the restructuring actions that we initiated following the Broadcom Merger. Selling, general and administrative expense increased ~~$214~~$53 million, or ~~58%~~15%, for the ~~three~~two fiscal quarters ended ~~July 31, 2016,~~April 30, 2017, compared to the ~~three~~two fiscal quarters ended ~~August 2, 2015. As a percentage of net revenue, selling,~~May 1, 2016. Selling, general and administrative expense was 6%higher in ~~each of~~ the ~~fiscal quarter and three~~two fiscal quarters ended ~~July 31, 2016,~~April 30, 2017, as it reflects two quarters of expense resulting from the Broadcom Merger compared to ~~8% and 7%~~one quarter in the corresponding period of the prior ~~year periods, respectively. The overall increase~~year. Share-based compensation was higher in ~~selling, general and administrative expense dollars for~~ the ~~fiscal quarter and three~~two fiscal quarters ended ~~July 31, 2016 was primarily~~April 30, 2017 due to ~~the acquisition of BRCM. Share-based compensation included in selling, general and administrative expense increased on a dollar basis due to RSUs assumed in, and integration-awards~~integration equity awards granted to employees acquired in the Broadcom ~~Merger.~~Merger, as well as annual employee equity awards granted at higher grant-date fair values.

Amortization of Acquisition-Related Intangible Assets

~~Total amortization~~Amortization of acquisition-related intangible assets recognized in operating expenses was ~~$939~~$442 million and ~~$2,056~~$882 million for the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31, 2016,~~April 30, 2017, respectively, compared to ~~$197~~$735 million and ~~$541~~$789 million~~, respectively,~~ for the fiscal quarter and two fiscal quarters ended May 1, 2016, respectively. Amortization of acquisition-related intangible assets, for each period, primarily consisted of amortization of the intangible assets acquired in the ~~corresponding prior year periods. The increase in~~Broadcom Merger. We expect to incur additional amortization ~~expense in fiscal year 2016 was primarily attributable to an increase in amortizable~~of acquisition-related intangible assets ~~from~~in future periods as a result of any further acquisitions, particularly the ~~Broadcom Merger and, to a lesser extent, the acquisition of Emulex.~~pending Brocade Acquisition.

Restructuring, Impairment and Disposal Charges

Restructuring, impairment and disposal charges recognized ~~primarily~~ in operating expenses, ~~were $282~~primarily related to employee termination costs, was $27 million and ~~$633~~$73 million for the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31, 2016,~~April 30, 2017, respectively, compared to ~~$100~~$287 million and ~~$127~~$318 million for the fiscal quarter and two fiscal quarters ended May 1, 2016, respectively. The decrease was mainly due to a decrease in ~~the corresponding prior year fiscal periods. These increases were due in both cases, primarily to~~restructuring activities resulting from the Broadcom Merger ~~including~~ ~~$220 million and $246 million, respectively, of impairment charges due to the write-off of in-process research and development projects. Restructuring charges~~as these activities were ~~due primarily to employee termination, lease and other exit costs resulting from our acquisitions.~~substantially completed. We expect to incur ~~substantial~~ additional restructuring charges in future periods as a result of ~~the Broadcom Merger and~~ any further acquisitions, ~~that we may make in~~particularly the ~~future.~~pending Brocade Acquisition.

Restructuring, impairment and disposal charges for the three fiscal quarters ended July 31, 2016 also included a $23 million loss primarily related to the disposal of certain fiber optics subsystem manufacturing and related assets. During the three fiscal quarters ended August 2, 2015, we recognized a $67 million loss in restructuring, impairment and disposal charges primarily related to the write down of these fiber optics subsystem manufacturing and related assets to fair value, less costs to sell.

Segment Operating Results

The following ~~tables set~~table sets forth operating income (loss) by segment for the ~~fiscal quarters and three fiscal quarters ended July 31, 2016 and August 2, 2015 (in millions, except for percentages):~~periods presented:


	Fiscal Quarter Ended											Three Fiscal Quarters Ended											Fiscal Quarter Ended										Two Fiscal Quarters Ended
Operating Income	July 31, 2016			August 2, 2015			$ Change			% Change		July 31, 2016			August 2, 2015			$ Change			% Change
Operating Income (Loss)																							April 30, 2017			May 1, 2016			$ Change		% Change		April 30, 2017			May 1, 2016			$ Change			% Change
																							(In millions, except for percentages)
Wired infrastructure	$	846		$	130		$	716		551	%	$	1,800		$	345		$	1,455		422	%	$	937		$	819		$	118	14	%	$	1,870		$	954		$	916		96	%
Wireless communications	308			285			23			8		754			871			(117		)	(13	)	414			181			233		129	%	841			446			395			89	%
Enterprise storage	223			225			(2		)	(1	)	749			588			161			27		382			217			165		76	%	757			526			231			44	%
Industrial & other	102			78			24			31		256			243			13			5		109			91			18		20	%	170			154			16			10	%
Unallocated expenses	(1,743		)	(419		)	(1,324		)	316		(4,349		)	(929		)	(3,420		)	368		(1,368		)	(2,309		)	941		(41	)%	(2,658		)	(2,606		)	(52		)	2	%
Total operating income (loss)	$	(264	)	$	299		$	(563	)	(188	)	$	(790	)	$	1,118		$	(1,908	)	(171	)	$	474		$	(1,001	)	$	1,475	147	%	$	980		$	(526	)	$	1,506		286	%

Fiscal quarter ended ~~July 31, 2016 compared to corresponding prior year period.~~ Operating income from our wired infrastructure and wireless communications segments increased primarily due to contributions from the acquired BRCM products. Operating income from our enterprise storage segment was flat. Operating income from our industrial & other segment increased primarily due to an increase in revenue from our optocoupler and industrial fiber optic products as a result of an increase in demand for these products.

~~Three fiscal quarters ended July 31, 2016~~April 30, 2017 compared to corresponding prior year period. Operating income from our wired infrastructure segment increased primarily due to contributions from ~~the acquired BRCM wired~~our networking application-specific integrated circuit and optical products. Operating income from ~~our~~ wireless communications segment ~~decreased~~increased primarily due to ~~decrease~~the increase in revenue primarily due to an increase in handset demand ~~for~~and an increase in our ~~RF components from a key North American smartphone customer, partially offset by contributions from the BRCM~~ wireless ~~connectivity products.~~content in those handsets. Operating income from our enterprise storage segment increased ~~primarily~~ due to contributions from ~~the acquired Emulex business.~~our HDD and custom solid state drive controller products. Operating income from our industrial & other segment ~~was higher~~increased primarily due to an increase in revenue ~~for~~from our optocoupler products as a result of an increase in demand for these products.

Two fiscal quarters ended April 30, 2017 compared to corresponding prior year period. Operating income from our wired infrastructure segment increased primarily due to contributions from acquired BRCM products included in this segment. Operating income from our wireless communications segment increased primarily due to contributions from acquired BRCM products and the increase in revenue primarily due to an increase in handset demand and an increase in our wireless content in those handsets. Operating income from our enterprise storage segment increased due to contributions from our HDD and custom solid state drive controller products. Operating income from our industrial ~~fiber optic~~& other segment increased primarily due to an increase in revenue from our optocoupler products as a result of an increase in demand for these products.

Unallocated expenses include amortization of acquisition-related intangible assets, share-based compensation expense, restructuring, impairment and disposal charges, acquisition-related costs, ~~including charges related to the step-up of inventory to fair value,~~ and other costs that are not used in evaluating the results of, or in allocating resources to, our segments. Unallocated expenses ~~increased 316% and 368%~~decreased 41% in the fiscal quarter ~~and three fiscal quarters~~ ended ~~July 31, 2016, respectively,~~April 30, 2017 compared with the corresponding prior ~~fiscal~~ year ~~periods,~~period, primarily due to ~~increases~~reduction in ~~charges related to the step-up of~~purchase accounting effect on inventory ~~to fair value, amortization of intangible assets, restructuring, impairment and disposal charges, and costs incurred, in each case, in connection~~primarily associated with the Broadcom Merger. The 2% increase in the two fiscal quarters ended April 30, 2017 compared with the corresponding prior year period was due to an increase in amortization of acquisition-related intangible assets offset by the reduction in purchase accounting effect on inventory. Additionally, share-based compensation ~~increased~~expense was higher in fiscal year 2017 due to ~~RSUs assumed in, and integration-awards~~integration equity awards granted to employees acquired in the Broadcom ~~Merger.~~Merger, as well as annual employee equity awards granted at higher grant-date fair values.

Non-Operating Income and Expenses

Interest expense. Interest expense was ~~$139~~$112 million and ~~$479~~$223 million for the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31, 2016,~~April 30, 2017, respectively, and ~~$43~~$256 million and ~~$150~~$340 million, for the fiscal quarter and ~~three~~two fiscal quarters ended ~~August 2, 2015,~~May 1, 2016, respectively. ~~These increases~~The decreases in interest expense were primarily due to ~~higher outstanding debt balances and~~ the ~~associated interest rates, and~~absence in fiscal year 2017 of one-time debt-related expenses ~~related to debt modification and ticking fees, in each case~~ associated with the financing of the Broadcom Merger.

Loss on extinguishment of debt. ~~During~~Loss on extinguishment of debt was $159 million for the ~~three~~two fiscal quarters ended ~~July 31, 2016, we repaid in full our 2014 Term Loans,~~April 30, 2017, and fully repaid the €900 million Term B-1 Euro Loan (defined below). We also fully repaid the $500 million Term B-2 Loan (defined below), partially funded with $325 million of additional Term A Loan (defined below) borrowings. These payments resulted in the write-off of debt issuance costs of $21 million and $74$53 million for the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31,~~May 1, 2016. We issued Senior Notes to repay all of the term loans outstanding under the 2016 ~~respectively. In March 2015,~~Credit Agreement. As a result, during the two fiscal quarters ended April 30, 2017, we ~~made a $593~~wrote-off $159 million ~~principal prepayment on our 2014 Term Loans, which resulted in a write-off~~ of debt issuance ~~costs of $13 million for the three fiscal quarters ended August 2, 2015.~~costs.

In connection with the completion of the Broadcom Merger, three Broadcom subsidiaries entered into the 2016 Credit Agreement, which originally provided for a Term A loan facility in the aggregate principal amount of $4,400 million, or the Term A Loan, a Term B-1 dollar loan facility in the aggregate principal amount of $9,750 million, or the Term B-1 Loan, a Term B-1 euro loan facility in the aggregate principal amount of €900 million, equivalent to $978 million as of February 1, 2016, or the Term B-1 Euro Loan, a Term B-2 loan facility in the aggregate principal amount of $500 million, or the Term B-2 Loan, and together with the Term A Loan, Term B-1 Loan, and Term B-1 Euro Loan, referred to as the 2016 Term Loans. The 2016 Credit Agreement also provides for a revolving credit facility, or the 2016 Revolving Credit Facility, that permits us to borrow from time to time in an aggregate principal amount of up to $500 million for working capital and other corporate

purposes, including swingline loans of up to $150 million in the aggregate and for the issuance of letters of credit of up to $100 million in the aggregate, which, in the case of swingline loans and letters of credit, reduce the available borrowing capacity under the 2016 Revolving Credit Facility on a dollar for dollar basis.

~~To the extent we prepay our 2016 Term Loans, we would expect a decrease in interest expense and an increase in loss on extinguishment of debt.~~

Other income (expense), net. Other income (expense), net was $4 million and $1 million for the fiscal quarter and three fiscal quarters ended July 31, 2016, respectively, compared to $8 million and $24 million for the fiscal quarter and three fiscal quarters ended August 2, 2015, respectively. This includes interest income, gains (losses) on foreign currency remeasurement and other miscellaneous items. Other income, net was $3 million and $34 million for the fiscal quarter and two fiscal quarters ended April 30, 2017, respectively. Other expense, net was $6 million and $3 million for the fiscal quarter and two fiscal quarters ended May 1, 2016, respectively. Other income for the two fiscal quarters ended April 30, 2017 primarily included a gain on disposal of assets.

~~Provision for (benefit from)~~Benefit from income taxes. For the fiscal quarter and ~~three~~two fiscal quarters ended ~~July 31, 2016, we had a~~April 30, 2017, our benefit from income taxes ~~of $117~~was $103 million and ~~$199~~$93 million, respectively, compared to ~~provisions of $23~~$99 million and ~~$61~~$82 million for the fiscal quarter and ~~three~~two fiscal quarters ended ~~August 2, 2015,~~May 1, 2016, respectively. The benefit from income taxes in the 2017 fiscal periods was primarily due to a discrete benefit from the recognition of $139 million and $181 million of excess tax benefits from share-based awards that were vested and/or exercised during the fiscal quarter and two fiscal quarters ended April 30, 2017, respectively. The benefit from income taxes in the 2016 fiscal periods ~~are a result of the~~was primarily due to losses from continuing operations, partially offset by ~~a $60 million net~~ discrete ~~expense, for the three fiscal quarters ended July 31, 2016, as discussed below.~~

Starting with the fiscal quarter ended May 1, 2016, we no longer intend to indefinitely reinvest in operations outside of Singapore. As a result, we have made a provision for taxes, including withholding taxes, on $1,854 million of our undistributed earnings as of November 1, 2015, and recognizedexpenses, $93 million of ~~discrete expense in the three fiscal quarters ended July 31, 2016, related to these undistributed earnings. This discrete expense~~which was ~~partially offset by discrete benefits that included $19 million from the release of California state valuation allowance as~~ a result of the Broadcom Merger, $5 million from the net recognition of previously unrecognized tax benefits as a result of the expiration of the statute of limitations for certain audit periods, and $13 million from the retroactive reinstatement of the U.S. Federal Research and Development tax credit from January 1, 2015 to November 1, 2015.

~~In connection with the Broadcom Merger, $10,023 million net deferred tax liabilities were established~~our change in assertion on the excess of book basis over the tax basis of acquired investments in certain foreign subsidiaries that have not been indefinitely reinvested and acquired identifiable intangible assets, partially offset by acquired tax attributes. Net deferred tax liabilities are based upon certain assumptions underlying our preliminary purchase price allocation related to the Broadcom Merger. Upon finalization of the purchase price allocation, additional adjustments to the amount of our net deferred taxes may be required, provided we are within the measurement period.undistributed earnings.

Our provision for income taxes in future periods is likely to change as a result of the impact of internal restructuring and reorganizations, excess tax benefits or tax deficiencies from share-based awards, and changes in ~~particular as a result of the Broadcom Transaction.~~tax regulation.

Seasonality

~~Our~~Historically, our net revenue has typically been higher in the second half of the fiscal year ~~has typically been higher~~ than ~~our net revenue~~ in the first half, ~~of the fiscal year,~~ primarily due to seasonality in our wireless communications segment. This segment has historically experienced seasonality due to ~~calendar year-end~~ launches of new mobile handsets manufactured by our OEM customers. However, from time to time, ~~some~~typical seasonality and industry cyclicality are overshadowed by other factors such as wider macroeconomic effects, the timing of significant product transitions and launches by large OEMs, particularly in the wireless communications and enterprise storage segments. As a result of the Broadcom Merger, our wired infrastructure segment represents the majority of our ~~key customers may place, or may delay, large orders, often in connection with their expected new product launches. This often causes our quarterly~~ net revenue, ~~to fluctuate significantly~~ and ~~may overshadow~~our business overall is more diversified. As a result, we believe that the impact of typical seasonality in any ~~seasonal effects~~particular segment on ~~revenue.~~our overall revenue should diminish over time.

Liquidity and Capital Resources

The following section discusses our principal liquidity and capital resources as well as our principal liquidity requirements and uses of cash. Our cash and cash equivalents are maintained in highly liquid investments with remaining maturities of 90 days or less at the time of purchase. Our short-term investments include time deposits with original maturities greater than 90 days but less than one year. We believe our cash equivalents and short-term investments are liquid and accessible.

Our primary sources of liquidity as of ~~July 31, 2016~~April 30, 2017 consisted of: ~~(1) approximately $1,961~~(i) $4,454 million in cash, ~~and~~ cash equivalents ~~(2)~~and short-term investments, (ii) cash we expect to generate from operations, ~~(3)~~and (iii) our outstanding revolving credit facility of up to $500 million aggregate principal amount, or the 2016 Revolving Credit Facility, ~~under the 2016 Credit Agreement,~~ which is committed until February 1, 2021, and substantially all of which was available to be drawn as of ~~July 31, 2016, and (4) our ability~~April 30, 2017. In addition, we may also generate cash from the sale of assets from time to increase the aggregate term loans and revolving credit commitments under the 2016 Credit Agreement, referred to as the accordion feature, subject to the terms and conditions of the 2016 Credit Agreement and the availability of commitments. The 2016 Credit Agreement was entered in connection with the completion of the Broadcom Merger, and replaced our 2014 Credit Agreement. The 2016 Credit Agreement is discussed in more detail in “Note 6. Borrowings” included in Part I, Item 1 of this Form 10-Q.time.

Our short-term and long-term liquidity requirements primarily arise from: (i) ~~interest~~business acquisitions and ~~principal payments related~~investments we may make from time to ~~outstanding indebtedness,~~time, including the pending Brocade Acquisition, (ii) working capital requirements, (iii) research and development and capital expenditure needs, (iv) ~~business acquisitions and investments we may make from time to time, (v)~~ interim cash dividend payments by Broadcom (if and when declared by the Board), ~~(vi)~~(v) cash distributions by the Partnership (if and when declared by the Partnership’s ~~general partner)~~General Partner), (vi) interest and principal payments related to outstanding indebtedness, (vii) payment of income taxes, including taxes resulting from the intercompany transfer of IP acquired in the Broadcom Merger, and ~~(vii)~~(viii) funding employee benefit plan obligations. Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control.

We anticipate that our capital expenditures for fiscal year 2017 will be higher than fiscal year 2016, due primarily to expenditures for construction at our Irvine and San Jose campuses, purchases of test manufacturing equipment and spending on equipment to support various research and development projects.

Our debt and liquidity needs will also increase as a result of the closing of the Brocade Acquisition. We intend to finance the estimated $5.5 billion of cash consideration needed for that transaction with new debt financing and cash on hand from both companies.

We believe that our cash and cash equivalents on hand, short-term investments and cash flows from operations, combined with current borrowing availability under the 2016 Revolving Credit Facility, ~~and~~as well as committed debt funding related to the ~~accordion feature in our 2016 Credit Agreement,~~pending Brocade Acquisition, provide sufficient liquidity, after giving effect to the pending Brocade Acquisition, to operate our business and fund our current and assumed obligations for at least the next 12 months.

We anticipate that our capital expenditures for fiscal year 2016 will be higher than fiscal year 2015, due primarily to expenditures for construction at our Irvine and San Jose campuses acquired in connection with the Broadcom Merger, continued expenditures for capacity expansion in our Fort Collins internal fabrication facility, income tax payments, spending on equipment to support various research and development projects and upgrading our test manufacturing equipment.

From time to time, we engage in discussions with third parties regarding potential acquisitions of, or investments in, businesses, technologies and product lines. Any such transaction could require significant use of our cash and cash equivalents, or require us to increase our borrowings under our 2016 Credit Agreement, or otherwise, to fund the transaction. We could also reduce certain expenditures such as payment of our cash dividend. If we do not have sufficient cash to fund our operations or finance growth opportunities, including acquisitions, or unanticipated capital expenditures, our business and financial condition could suffer. In such circumstances we may also seek to obtain new debt or equity financing. However, we cannot assure you that such additional financing will be available on terms acceptable to us or at all. Our ability to service any indebtedness we may incur, including ~~under~~ the ~~2016 Term Loans and the 2016 Revolving Credit Facility,~~Senior Notes, will depend on our ability to generate cash in the future.

We may also elect to sell additional debt or equity securities, or otherwise increase our outstanding indebtedness, for reasons other than those specified above.

Summary and Highlights ~~for the Three Fiscal Quarters ended July 31, 2016~~

Our cash and cash equivalents increased by ~~$139~~$1,157 million to ~~$1,961~~$4,254 million at ~~July 31, 2016~~April 30, 2017 from ~~$1,822~~$3,097 million at ~~November 1, 2015.~~October 30, 2016. The increase was largely due to ~~$2,059~~$2,936 million in net cash provided by operating activities, ~~$15,926~~$13,550 million of gross proceeds from the issuance of ~~2016 Term Loans, $698 million of proceeds received from~~ the ~~sale of businesses~~Senior Notes and ~~certain assets and $217~~$150 million from the issuance of ordinary shares upon exercises of share options and purchase rights under Broadcom’s employee share purchase plan, partially offset by ~~$9,987 million paid in the Broadcom Merger,~~ the repayment of ~~$6,145~~$13,668 million, in aggregate principal amount, of our ~~2014 Term Loans and~~term loan borrowings under the 2016 ~~Term Loans, $1,475 million repayment~~Credit Agreement, an aggregate of ~~debt assumed in the Broadcom Merger, $537~~$868 million in dividend payments by Broadcom and cash distributions by the Partnership, ~~(discussed in more detail below), $530~~$581 million in capital expenditures, ~~and $108~~$200 million in purchases of investments and $127 million payment of debt issuance costs related to the Senior Notes.

As a result of an amendment to the 2016 ~~Term Loans.~~Credit Agreement, which became effective upon the issuance of the Senior Notes, amounts borrowed under the 2016 Credit Agreement, including under the 2016 Revolving Credit Facility, ceased to be collateralized and will only be guaranteed by Broadcom, the Partnership, and BC Luxembourg S.à r.l., an indirect subsidiary of Broadcom.

Dividends/Distributions

The following table summarizes dividend information paid by Broadcom ~~paid cash dividends of $0.50 and $0.40~~for the periods presented (in millions, except per ~~ordinary~~ share ~~or $199 million and $104 million, during~~data):



	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2017		May 1, 2016		April 30, 2017		May 1, 2016
Cash dividends paid per ordinary share	$	1.02	$	0.49	$	2.04	$	0.93
Cash dividends paid to ordinary shareholders	$	414	$	193	$	822	$	315

The following table summarizes distributions by the ~~fiscal quarters ended July 31, 2016 and August 2, 2015, respectively. Broadcom paid cash dividends of $1.43 and $1.13 per ordinary share, or $514 million and $292 million, during~~Partnership for the ~~three fiscal quarters ended July 31, 2016 and August 2, 2015, respectively.~~

~~The Partnership paid a cash distribution of $199 million and $392 million to Broadcom, as General Partner, and a cash distribution of $0.50 and $0.99~~periods presented (in millions, except per Partnership ~~REU, or $12 million and $23 million, to its limited partners during the fiscal quarter and three fiscal quarters ended July 31, 2016, respectively.~~REU):



	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2017		May 1, 2016		April 30, 2017		May 1, 2016
Cash distributions paid to General Partner	$	414	$	193	$	822	$	193
Cash distributions paid per Partnership REU	$	1.02	$	0.49	$	2.04	$	0.49
Cash distributions paid to Limited Partners	$	23	$	11	$	46	$	11

Cash Flows ~~for the Three Fiscal Quarters Ended July 31, 2016 and August 2, 2015~~

~~Our~~The following table summarizes our cash flows for the ~~three fiscal quarters ended July 31, 2016 and August 2, 2015 were as follows (in millions):~~periods presented:


							Two Fiscal Quarters Ended
	Three Fiscal Quarters Ended						April 30, 2017			May 1, 2016
	July 31, 2016			August 2, 2015			(In millions)
Net cash provided by operating activities	$	2,059		$	1,736		$	2,936		$	1,096
Net cash used in investing activities	(9,866		)	(177		)	(812		)	(10,292		)
Net cash provided by (used in) financing activities	7,946			(1,809		)	(967		)	9,415
Net change in cash and cash equivalents	$	139		$	(250	)	$	1,157		$	219

Operating Activities

Cash provided by operating activities represents net income (loss) adjusted for certain non-cash items and changes in assets and liabilities. The ~~$323~~$1,840 million increase in cash provided by operations during the ~~three~~two fiscal quarters ended ~~July 31, 2016,~~April 30, 2017, compared to the ~~three~~two fiscal quarters ended ~~August 2, 2015,~~May 1, 2016, was due to the impact of net income and adjustments to net income ~~(loss)~~ for non-cash items, ~~and~~offset by changes in assets and ~~liabilities, partially offset by the impact of a net loss during the three fiscal quarters ended July 31, 2016.~~liabilities. The adjustments to net income ~~(loss)~~ for non-cash items were higher, compared to the ~~three~~two fiscal quarters ended

~~August 2, 2015,~~ May 1, 2016, primarily due to increased depreciation and amortization and share-based compensation ~~as well as restructuring, impairment and disposal charges, offset in part by deferred taxes.~~

~~Changes in assets and liabilities as of July 31, 2016, compared~~due to ~~November 1, 2015, primarily reflected~~ the ~~sale of inventory stepped up to fair value as a result~~full year-to-date impact of the Broadcom Merger ~~partially offset by an increase~~ in ~~accounts receivable, net, due to~~fiscal year 2017, as well as the ~~linearity~~non-cash portion of ~~revenue and timing~~the debt extinguishment loss resulting from the repayment of ~~collections, and a decrease in accounts payable due to the timing of disbursements.~~our term loans outstanding under our 2016 Credit Agreement.

On February 1, 2016, we closed the Broadcom Merger. The following table presents the changes in selected balance sheet captions, the assets acquired and liabilities assumed in connection with the Broadcom Merger, and changes due to non-BRCM acquisition activities during the three fiscal quarters ended July 31, 2016 (in millions):

Balances at Balances acquired and assumed from BRCM on Balances at Non-BRCM acquisition
November 1,
2015 February 1,
2016 July 31,
2016 Increase (Decrease)
Trade accounts receivable, net $ 1,019
$ 669
$ 2,181
$ 493
Inventory 524
1,853
1,306
(1,071 )
Assets held-for-sale 22
833
246
(609 )
Other current assets 372
194
354
(212 )
Other long-term assets 345
121
528
62
Accounts payable 617
559
1,127
(49 )
Employee compensation and benefits 250
104
424
70
Other current liabilities 206
791
843
(154 )
Other long-term liabilities 381
10,617
10,671
(327 )

Investing Activities

Cash ~~provided by (used in)~~used in investing activities ~~consists~~consisted primarily of cash used for acquisitions, capital expenditures and investments, offset by proceeds from divestitures. The change in investing cash flows for the ~~three~~two fiscal quarters ended ~~July 31, 2016~~April 30, 2017 compared to the ~~three~~two fiscal quarters ended ~~August 2, 2015~~May 1, 2016 primarily relates to ~~$9,987~~a $9,998 million ~~paid for the Broadcom Merger,~~decrease in acquisitions of businesses, a ~~$49 million increase in purchase of investments, and a $43~~$283 million increase in purchases of property, plant and equipment ~~partially offset by $89 million of proceeds from sales and maturities of investments~~ and a ~~$48~~$141 million increase in ~~proceeds from the sales~~purchase of ~~businesses.~~investments.

Financing Activities

Broadcom

Cash provided by (used in) financing activities ~~consists~~consisted primarily of the proceeds received from the ~~2016 Term Loans,~~issuance and sale of the Senior Notes, proceeds and repayment of the term loan borrowings under the 2014 ~~Term Loans, prepayments made on our~~and 2016 ~~Term Loans,~~Credit Agreements, payment of assumed debt, dividend payments by Broadcom, cash distributions by the Partnership, ~~proceeds from~~ the issuance of ordinary shares ~~through~~pursuant to our employee equity incentive plans and payments of debt issuance costs. The change in financing cash flows for the ~~three~~two fiscal quarters ended ~~July 31, 2016~~April 30, 2017 compared to the ~~three~~two fiscal quarters ended ~~August 2, 2015~~May 1, 2016 was primarily due to the decrease of $9,730 million in net proceeds ~~from the 2016 Term Loans~~ and ~~a $31 million increase in proceeds from the issuance of ordinary shares through employee equity incentive plans, partially offset by repayment of 2014 Term Loans, prepayments made on~~payments related to our ~~2016 Term Loans, payment of assumed~~long-term debt and a ~~$245 million increase in dividend payments.~~

~~The Partnership~~

Cash provided by (used in) financing activities consists primarily of proceeds from the 2016 Term Loans, repayment of 2014 Term Loans, prepayments made on our 2016 Term Loans, payment of assumed debt, dividend/distribution payments, proceeds from the issuance of ordinary shares through Broadcom employee equity incentive plans and payments of debt issuance costs. The change in financing cash flows for the three fiscal quarters ended July 31, 2016 compared to the three fiscal quarters ended August 2, 2015 was due to proceeds from the 2016 Term Loans and $99 million from capital transactions with the General Partner, partially offset by repayment of 2014 Term Loans, prepayments made on our 2016 Term Loans, payment of assumed debt and a $245$542 million increase in dividend and distribution payments.

The Partnership

Cash used in financing activities for the Partnership is materially the same as discussed for Broadcom above. The differences are due to capital transactions with the General Partner, which are a result of the capital contributions from Broadcom to the Partnership.

Indebtedness

See “Note 6. Borrowings” ~~included in Part I, Item 1 of this Form 10-Q.~~

~~2016 Credit Agreement~~

During the three fiscal quarters ended July 31, 2016, we made principal prepayments totaling $610 million on the Term B-1 Loan and fully repaid the €900 million Term B-1 Euro Loan and $500 million Term B-2 Loan. The paydown of the Term B-2 Loan was partially funded with $325 million of additional Term A Loan borrowings. As a result, during the fiscal quarter and three fiscal quarters ended July 31, 2016, we wrote-off $21 million and $40 million, respectively, of debt issuance costs, which were included in loss on extinguishment of debt in the condensed consolidated statements of operations.

As of July 31, 2016, the outstanding balance of 2016 Term Loans, net of the unaccreted discount and unamortized debt issuance costs, was $13,576 million. As of July 31, 2016, there were no borrowings outstanding under the 2016 Revolving Credit Facility or material outstanding letters of credit.

~~We were in compliance with all of the covenants described in the 2016 Credit Agreement as of July 31, 2016.~~

Contractual Commitments

See “Note 12. Commitments and Contingencies” ~~included~~ in Part I, Item 1 of this Form 10-Q.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements at ~~July 31, 2016~~April 30, 2017 as defined in Item 303(a)(4)(ii) of Regulation S-K under the Exchange Act.

Indemnifications

See “Note 12. Commitments and Contingencies” in Part I, Item 1 of this Form 10-Q.

Accounting Changes and Recent Accounting Standards

For a description of accounting changes and recent accounting standards, including the expected dates of adoption and estimated effects, if any, in our condensed consolidated financial statements, see “Note 1. Overview, Basis of Presentation and Significant Accounting Policies” in Part I, Item 1 of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in market risk from the information presented in Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk,” in ~~Avago’s 2015~~our 2016 Annual Report on Form 10-K other than those noted below.

Interest Rate Risk

~~At July 31, 2016, we had $13,782 million of 2016 Term Loans outstanding under our 2016 Credit Agreement, all of which is~~Our Senior Notes bear interest at fixed rates, and therefore are not subject to ~~applicable floating~~ interest ~~rates based on LIBOR. On August 2, 2016, pursuant to~~rate fluctuation risk. The foregoing does not include the ~~amendment to~~effects of any debt we may incur in connection with the ~~2016 Credit Agreement, the maximum interest rates applicable to our outstanding indebtedness~~Brocade Acquisition, or any amounts we may borrow under the 2016 Revolving Credit Agreement were reduced. Following this amendment, a 1% change in LIBOR would increase interest expense for the next 12 months on our outstanding 2016 Term Loans by $138 million, based on the principal amount of the 2016 Term Loans outstanding as of July 31, 2016.Facility.

~~Foreign Currency Derivative Instruments~~

We use foreign exchange forward contracts to hedge a portion of our exposures to changes in currency exchange rates as a result of our global operating and financing activities. Gains and losses from foreign currency transactions, as well as derivative instruments, were not significant for any period presented in the condensed consolidated financial statements included in this Form 10-Q.

~~European Debt Exposures~~

We actively monitor our exposure to the European financial markets, including the impact of sovereign debt issues. We also seek to mitigate our risk by investing in fixed deposits with various financial institutions and we limit the amount we hold with any one institution. We do not have any direct investments in the sovereign debt of European countries. From time to time, we may have deposits with major European financial institutions. We also seek to mitigate collection risks from our customers by performing regular credit evaluations of our customers’ financial condition and require collateral, such as letters of credit and bank guarantees, in certain circumstances. As of July 31, 2016, we do not believe that we have any material direct or indirect exposure to the European financial markets.

Item 4. Controls and Procedures

Broadcom Limited

(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer, or CEO, and ~~acting~~ Chief Financial Officer, or CFO, evaluated the effectiveness of our disclosure controls and procedures as of ~~July 31, 2016.~~April 30, 2017. We maintain disclosure controls and procedures that are intended to ensure that the information required to be disclosed in our Exchange Act filings is properly and timely recorded, processed, summarized and reported. These disclosure controls and procedures are also intended to ensure that information is accumulated and communicated to management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures. Based on this evaluation, our CEO and CFO concluded that, as of ~~July 31, 2016,~~April 30, 2017, our disclosure controls and procedures were effective at the reasonable assurance level.

In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

(b) Changes in Internal Control ~~Over~~over Financial Reporting. There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Broadcom Cayman L.P.

(a) Evaluation of Disclosure Controls and Procedures. An evaluation was conducted under the supervision and with the participation of the management of Broadcom, as ~~our~~ General Partner, including the CEO and CFO of Broadcom as authorized representatives in its capacity as the General Partner of the Partnership, of the effectiveness of the Partnership’s disclosure controls and procedures as of ~~July 31, 2016.~~April 30, 2017. We maintain disclosure controls and procedures that are intended to ensure that the information required to be disclosed in our Exchange Act filings is properly and timely recorded, processed, summarized and reported. These disclosure controls and procedures are also intended to ensure that information is accumulated and communicated to the management of Broadcom, as ~~our~~ General Partner, including the CEO and CFO of Broadcom, as appropriate to allow timely decisions regarding required disclosures. Based on this evaluation, the management of Broadcom, as ~~our~~ General Partner, including the CEO and CFO concluded that, as of ~~July 31, 2016,~~April 30, 2017, our disclosure controls and procedures

were effective at the reasonable assurance level.

In designing and evaluating our disclosure controls and procedures, the management of ~~our~~ General Partner recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and the management of ~~our~~ General Partner is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The information set forth under “Note ~~12,~~12. Commitments and Contingencies” included in Part I, Item 1 of this Form 10-Q, is incorporated herein by reference. For an additional discussion of certain risks associated with legal proceedings, see “Risk Factors” immediately below.

Item 1A. Risk Factors

As noted above, Broadcom is the successor to Avago. Following the acquisition of BRCM, on February 1, 2016, Broadcom became the ultimate parent company of Avago and BRCM. Financial information and results of operations presented in this Form 10-Q for periods prior to February 1, 2016 relate to Avago and relate to us for the periods after February 1, 2016.

Our business, operations and financial results are subject to various risks and uncertainties, including those described below, that could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our ordinary shares. We review and, where applicable, update our risk factors each quarter. The description set forth below supersedes the description of the risk factors previously disclosed in Part ~~II,~~I, Item 1A of our ~~Quarterly~~2016 Annual Report on Form ~~10-Q for the fiscal quarter ended May 1, 2016.~~10-K. The following important factors, among others, could cause our actual results to differ materially from those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors and oral statements.

Risks Related to Our Business

Our acquisition of BRCM and the integration of its business, operations and employees with our own will involve risks and the failure to integrate successfully or realize the anticipated benefits could adversely affect our financial results and the value of our ordinary shares.

We completed the Broadcom Transaction on February 1, 2016. Although we expect significant benefits to result from this acquisition, there can be no assurance that we will actually realize all of the anticipated benefits of the acquisition. The value of our ordinary shares may be affected by our ability to achieve these anticipated benefits. Achieving these benefits depends, in part, on our ability to integrate BRCM’s business successfully and efficiently with our business, and the harmonization of differences in the business cultures between the two companies and their personnel. The challenges and risks involved in this integration, which are complex and time-consuming, include the following:

~~consolidating and integrating information technology, corporate, finance and administrative infrastructures;~~

demonstrating to customers of Avago and BRCM that our new combined organizational structure will not adversely affect our ability to address the needs of customers or result in the loss of attention or business focus;

~~coordinating and integrating independent research and development and engineering teams across technologies and product platforms to enhance product development while reducing costs;~~

~~managing effectively an expanded management structure;~~

~~coordinating sales and marketing efforts to effectively position our capabilities and the direction of product development;~~

~~coordinating and integrating our international operations;~~

~~integrating employees and related HR systems and benefits, maintaining employee morale and retaining key employees;~~

~~servicing the substantial debt we incurred in connection with Broadcom Transaction;~~

~~managing effectively any divestitures of the BRCM businesses;~~

~~integrating financial forecasting and controls, procedures and reporting cycles, including integration of the BRCM businesses onto our enterprise resource planning system; and~~

~~minimizing the diversion of management attention from important business objectives.~~

If we do not successfully manage these issues and the other challenges inherent in integrating an acquired business of the size and complexity of BRCM, then we may not achieve all of the anticipated benefits of the acquisition and our revenue, expenses, operating results and financial condition could be materially adversely affected. The anticipated benefits we expect to realize from the Broadcom Transaction are, necessarily, based on projections and assumptions about the combined businesses. These projections and assumptions may be inaccurate and we may not successfully integrate BRCM into our operations in a timely manner, or at all. In addition, we may be exposed to unexpected contingencies or liabilities of BRCM. For example, goodwill and other intangible assets could be determined to be impaired, which could adversely impact our financial results.

As a result of the acquisition of BRCM, we are implementing a number of cost reduction activities. As part of this exercise we expect to eliminate a substantial number of positions from our combined workforce across all business and functional areas on a global basis. During this time we will be dependent on the services of a number of employees who are transitioning out of our workforce. We may be unable to successfully manage these employees in the performance of their transition activities.

~~The successful integration of the BRCM business will require significant management attention, and may divert the attention of management from our business and operational issues.~~

The majority of our sales come from a small number of customers and a reduction in demand or loss of one or more of our significant customers may adversely affect our business.

We are dependent on a small number of direct customers, OEMs, their respective contract manufacturers, and certain distributors for a majority of our business, revenue and results of operations. ~~During both~~For the ~~fiscal quarter and three~~two fiscal quarters ended ~~July 31, 2016,~~April 30, 2017, our top 10 direct customers, which included four distributors, collectively accounted for 55% of our net revenue, of which direct sales to Foxconn accounted for 13% of our net revenue. For the fiscal quarter and three fiscal quarters ended July 31, 2016, our top five direct customers, which included two distributors, collectively accounted for 34% and 31% of our net revenue, respectively.14%. We also believe our aggregate sales to Apple, Inc.~~, or Apple,~~ when our direct sales to it are combined with our sales to the contract manufacturers that it utilizes (which include Foxconn), accounted for ~~more than 10%~~approximately 15% of our net revenue for ~~both~~ the ~~fiscal quarter and three~~two fiscal quarters ended ~~July 31, 2016.~~

April 30, 2017. This customer concentration increases the risk of quarterly fluctuations in our operating results and our sensitivity to any material, adverse developments experienced by our significant customers.

In addition, our top customers’ purchasing power has, in some cases, given them the ability to make greater demands on us with regard to pricing and contractual terms in general. We expect this trend to continue, which may adversely affect our gross margin on certain ~~products. Although~~products and should we ~~believe~~fail to comply with such terms, might also result in liability that could harm our ~~relationships~~business, financial conditions and results of operations.

Moreover, the terms and conditions under which we do business with most of our ~~major~~ customers ~~are good, we~~ generally do not ~~have long-term contracts with~~include commitments by those customers to purchase any specific quantities of ~~them,~~products from us. Even in those instances where we enter into an arrangement, under which ~~is typical~~a customer agrees to source an agreed portion of ~~our industry.~~its product needs from us (provided that we are able to meet specified development, supply and quality commitments), the arrangement often includes pricing schedules or methodologies that apply regardless of volume of products purchased and those customers may not purchase the amount of product we expect. As a result, we may not generate the amount of revenue or the level of profitability we expect under such arrangements. If we do not perform under these arrangements, we could also be liable for significant monetary damages. In addition, ~~a substantial~~we are selling an increasing amount of our products ~~are sold~~ through aan increasingly limited number of distributors, which ~~increases our~~may expose us to additional customer concentration and related credit risks.

The loss of, or any substantial reduction in sales to, any of our major direct or end customers could have a material adverse effect on our business, financial condition and results of operations and cash flows.

Dependence on contract manufacturing and suppliers of critical components within our supplychain may adversely affect our ability to bring products to market, damage ourreputation and adversely affect our results of operations.

We operate a primarily outsourced manufacturing business model that principally utilizes third-party wafer foundry and module assembly and test capabilities, referred to as contract manufacturers. Our products require semiconductor wafer manufacturers with state-of-the-art fabrication equipment and techniques, and most of our products are designed to be manufactured in a specific process, typically at one particular fab or foundry, either our own or with a particular contract manufacturer.

We depend on our contract manufacturers to allocate sufficient manufacturing capacity to meet our needs, to produce products of acceptable quality at acceptable yields, and to deliver those products to us on a timely basis. Although we often have long-term contracts with our contract manufacturers, we do not generally have long-term capacity commitments. We obtain substantially all of our manufacturing services on a purchase order basis and our contract manufacturers have no obligation to provide us with any specified minimum quantities of product. Further, from time to time our contract manufacturers will cease to, or will become unable to, manufacture a component for us. As the lead time needed to identify,

qualify and establish reliable production, at acceptable yields, with a new contract manufacturer is typically lengthy, there is often no readily available alternative source for the wafer or other contract manufacturing services we require. In addition, qualifying such manufacturers is often expensive, and they may not produce as cost-effectively as our other suppliers, which would reduce our margins. In such circumstances, we may be unable us to meet our customer demand and may fail to meet our contractual obligations. This could result in the payment of significant damages by us to our customers, and our net revenue could decline, adversely affecting our business, financial condition and results of operations.

We utilize Taiwan Semiconductor Manufacturing Company Limited, or TSMC, to produce the substantial majority of our semiconductor wafers. TSMC manufactured approximately three-quarters of the wafers manufactured by our contract manufacturers during the two fiscal quarters ended April 30, 2017. Our wafer requirements represent a significant portion of the total production capacity of TSMC. However, TSMC also fabricates wafers for other companies, including certain of our competitors, and could choose to prioritize capacity for other users or reduce or eliminate deliveries to us on short notice, or raise their prices to us, all of which could harm our business, results of operations and gross margin.

Any substantial disruption in TSMC’s supply of wafers to us, or in the other contract manufacturing services that we utilize, as a result of a natural disaster, political unrest, economic instability, equipment failure or other cause, could materially harm our business, customer relationships and results of operations.

We also depend on our third-party contract manufacturers to timely develop new, advanced manufacturing processes, including, in the case of wafer fabrication, transitions to smaller geometry process technologies. If these new processes are not timely developed or we do not have sufficient access to them, we may be unable to maintain or increase our manufacturing efficiency to the same extent as our competitors or deliver products to our customers, which could result in loss of revenue opportunities and damage our relationships with our customers.

We purchase a significant amount of the materials used in our products from a limited number of suppliers.

Our manufacturing processes rely on many materials, including silicon, gallium arsenide and indium phosphide wafers, copper lead frames, precious and rare earth metals, mold compound, ceramic packages and various chemicals and gases. We purchase a significant portion of our semiconductor materials and finished goods used in our products from a few materials providers, some of which are single source suppliers. During the two fiscal quarters ended April 30, 2017, we purchased approximately two-thirds of the materials for our manufacturing processes from five materials providers. Substantially all of our purchases are on a purchase order basis, and we do not generally have long-term contracts with our materials providers. Suppliers may extend lead times, limit supplies or increase prices due to commodity price increases, capacity constraints or other factors, which may lead to interruption of supply or increased demand in the industry. In the event that we cannot timely obtain sufficient quantities of materials or at reasonable prices, the quality of the material deteriorates or we are not able to pass on higher materials or energy costs to our customers, our business, financial condition and results of operations could be adversely impacted.

We may pursue acquisitions, dispositions, investments and joint ventures, which could adversely affect our results of operations.

Our growth strategy includes the acquisition of, and investment in, businesses that offer complementary products, services and technologies, augment our market coverage, or enhance our technological capabilities, such as the pending Brocade Acquisition. We may also enter into strategic alliances or joint ventures to achieve these goals. We may not be able to identify suitable acquisition, investment, alliance, or joint venture opportunities, or to consummate any such transactions. In addition, our original estimates and assumptions used in assessing any transaction that we make may be inaccurate and we may not realize the expected financial or strategic benefits of any such transaction, including the pending acquisition of Brocade.

Any acquisitions we may undertake, including the pending Brocade Acquisition, involve risks and uncertainties. For example, if we fail to complete an acquisition our share price could fall to the extent the price reflects an assumption that such acquisition will be completed, and we may have incurred significant unrecoverable costs. Further, the failure to consummate an acquisition may result in negative publicity and negatively impact our relationships with our customers, vendors and employees. We may become subject to legal proceedings relating to the acquisition and the integration of acquired businesses may not be successful. The integration of an acquired business involves significant challenges, including, among others: minimizing the disruption of our business, diversion of management’s attention from daily operations and integrating the personnel of acquired businesses; incurring significant restructuring charges and amortization expense, assuming liabilities and ongoing lawsuits, acquiring goodwill and other non-amortization intangible assets, and increasing our expenses and working capital requirements; and implementing our management information systems, operating systems and internal controls over the acquired operations. These difficulties may be complicated by factors such as the size of the business or entity acquired, geographic distances and cultural differences, lack of experience operating in the geographic markets or industry sectors of the acquired business, potential loss of key employees and customers, the potential for deficiencies in

internal controls at the acquired or combined business, performance problems with the acquired business’ technology, exposure to unanticipated liabilities of the acquired business, insufficient revenue to offset increased expenses associated with the acquisition, adverse tax consequences and our potential inability to achieve the growth prospects or synergies expected from any such acquisition.

Failure to manage and successfully integrate the acquisitions we make, or to improve margins of the acquired businesses and products, could materially harm our business, operating results and margins.

Any future acquisitions we make may require significant additional debt or equity financing, which, in the case of debt financing, would increase our leverage and potentially affect our credit ratings, and in the case of an equity or equity-linked financing, would be dilutive to our existing shareholders. Any downgrades in our credit ratings associated with an acquisition could adversely affect our ability to borrow by resulting in more restrictive borrowing terms. As a result, we also may be unable to complete acquisitions or other strategic transactions in the future to the same extent as in the past, or at all. These and other factors could harm our ability to achieve anticipated levels of profitability of acquired businesses or realize other anticipated benefits of an acquisition, and could adversely affect our business, financial condition and results of operations.

From time to time, we may also seek to divest or wind down portions of our business, both acquired or otherwise, that are not strategically important, such as the portions of the Brocade business that we do not intend to retain, or we may exit minority investments, each of which could materially affect our cash flows and results of operations. Under the Brocade Agreement, Brocade has agreed to cooperate with us to facilitate the sale, disposition or other transfer of its IP Networking business, including its recently acquired Ruckus Wireless business. The disposition of the Brocade IP Networking business or any other future dispositions we make may involve risks and uncertainties, including our ability to sell these businesses on terms acceptable to us, or at all. Although we have entered into agreements with third parties to sell portions of the Brocade IP Networking business, including the Ruckus Wireless and ICX Switching businesses, and the data center portion of Brocade’s IP Networking business following the completion of the Brocade Acquisition, there can be no assurance that these or other dispositions will occur in a timely manner, or at all. In addition, any such dispositions could result in disruption to other parts of our business, potential loss of employees or customers, exposure to unanticipated liabilities or result in ongoing obligations and liabilities to us following any such divestiture. For example, in connection with such dispositions, we often enter into transition services agreements or other strategic relationships, including long-term research and development arrangements, sales arrangements or agree to provide certain indemnities to the purchaser in any such transaction, which may result in additional expense and may adversely affect our financial condition and results of operations. In addition, dispositions may include the transfer of technology and/or the licensing of certain IP rights to third-party purchasers, which could limit our ability to assert our IP rights against such third-party purchasers.

Failure to adjust our manufacturing and supply chain ~~due to changing market or other conditions orfailure~~ to accurately ~~estimate our customers’~~meet customers demand could adversely affect our results of operations.

Our customers often provide us with medium- to long-term product roadmaps and related indications of their product needs on a periodic basis, but they generally purchase our products on a weekly or daily basis, often pursuant to purchase orders, and the relationship can be terminated at any time.

We make significant decisions, including determining the levels of business that we will seek and accept, production schedules, levels of reliance on contract manufacturing and outsourcing, ~~personnel needs~~internal fab capacity and other resource requirements, based on our estimates of customer requirements. Factors that can impact our ability to accurately estimate future customer requirements include the short-term nature of many customers’ commitments, ~~from many of~~ our ~~customers, the~~customers’ ability ~~of customers~~ to reschedule, cancel and modify orders with little or no notice and without significant penalty, the accuracy of our customers’ forecasts and the possibility of rapid changes in demand for our customers’ products, as well as seasonal or cyclical trends in their ~~industries. For example,~~industries or the ~~smartphone market is particularly volatile, being subject to the timing of product launches and the year-end holiday selling season.~~semiconductor industry.

Customers often require rapid increases in production on short notice, for example when they are ramping up for a new product launch, which can challenge our resources and reduce margins. We may not be able to purchase sufficient supplies or components or secure sufficient contract manufacturing capacity to meet such increases in product demand. This could harm our reputation, prevent us from taking advantage of opportunities, damage our customer relationships, reduce revenue growth and subject us to additional liabilities if we are not able to timely satisfy customer orders. Conversely, toTo ensure availability of our products, particularly for ~~some of~~ our largest customers, we typically start manufacturing our relevant products based on our customers’ ~~forecasts. These~~ forecasts, which are not ~~binding purchase commitments and, as~~binding. As a result, we incur inventory and manufacturing costs in advance of anticipated ~~sales. Since~~sales that may never materialize or which may be substantially lower than expected. If actual demand for our products ~~may not match these forecasts,~~is lower than forecast, we may ~~be subject to increased risks of high~~also experience higher inventory carrying and operating costs and product obsolescence.

In order to secure components for the production of our products, we may enter into non-cancelable purchase commitments with vendors or make advance payments to suppliers, which could reduce our ability to adjust our inventory or expense levels in response to declining market demands. Downturns in the semiconductor industry have in the past caused, and may in the future cause, our customers to reduce significantly the amount of products ordered from us. If demand for our products is less than we expect, we may experience excess and obsolete inventories and be forced to incur additional charges. Conversely, if OEMs order more of our products in any particular quarter than are ultimately required to satisfy their end-customer demand, inventories at these OEMs may grow in that quarter, which could adversely affect our product revenue in a subsequent quarter, as such OEMs would likely reduce future orders until their inventory levels realign with end-customer demand. In addition, because Because certain of our sales, research and development and internal manufacturing overhead expenses are relatively fixed, a reduction in customer demand may also decrease our gross margin and operating income. Our results of operations could be harmed if we are unable to adjust our supply chain to address customer changes and market fluctuations, including those caused by the seasonal or cyclical nature of the markets

Conversely, customers often require rapid increases in ~~which we operate, or by other unanticipated events such as natural disasters. See “A prolonged disruption of our manufacturing facilities, research and development facilities or other significant operations, or those of our suppliers, could have a material adverse effect~~production on ~~our business, financial condition and results of operations” for additional risks associated with the disruption of our supply chain.~~

~~Unless we and our suppliers continuously improve manufacturing efficiency andquality, our financial performance could be adversely affected.~~

~~Manufacturing semiconductors involves highly complex processes that require advanced equipment.~~short notice. We and our suppliers, as well as our competitors, continuously modify these processes in an effort to improve yields and product performance. Defects or other difficulties in the manufacturing process can reduce yields and increase costs. Our manufacturing efficiency is an important factor in our future financial performance, and we may be unable to ~~maintain~~secure sufficient materials or ~~increase~~contract manufacturing capacity to meet such increases in demand. This could damage our ~~manufacturing efficiency to the same extent as our competitors. For products for which we outsource manufacturing, our product yields~~customer relationships, reduce revenue growth and ~~performance will be~~margins, subject ~~to the manufacturing efficiencies of our third-party suppliers, which we do not control.~~

From time to time, we and our suppliers have experienced difficulty in beginning production at new facilities, transferring production to other facilities, achieving and maintaining a high level of process quality and effecting transitions to new manufacturing processes, all of which have caused us to ~~suffer delays in product deliveries or reduced yields. We~~additional liabilities, harm our reputation, and ~~our suppliers may experience problems in achieving acceptable yields or experience product delivery delays in the future as a result~~prevent us from taking advantage of among other things, capacity constraints, construction delays, transferring production to other facilities, upgrading or expanding existing facilities, including at our Fort Collins facility, or changing our process technologies, including our transition from 6” to 8” wafers at our Fort Collins facility, any of which could result in a loss of future revenue. Our results of operations could be adversely affected by any increase in costs related to increases in production capacity if revenue does not increase proportionately.opportunities.

We are dependent on a ~~small~~limited number of markets, and dynamics in these markets could negatively impact our business or results of operations.

~~Our~~We operate in a limited number of markets. If demand in these markets declines or grows at a significantly slower pace than expected, our results may be adversely affected. The success of our wired infrastructure segment is ~~our largest segment, and accounted for 54% of our net revenue for the fiscal quarter ended July 31, 2016. In this segment, we generate revenue~~ primarily from the sale of custom ASICs, Ethernet switching and physical layer devices, particularly those for data center and enterprise networking products, which are manufactured by an increasingly concentrated group of large OEMs. Our success in these markets is dependent on information technology, or IT, and data center spending, which can vary dramatically from quarter to quarter, consumer

demand for traditional pay-TV services, capital expenditures on the installation of broadband capacity and on our ability to transition our products to increasingly smaller line width geometries. We also generate revenue from products used in set-top box solutions, which is dependent upon consumer demand for traditional cable TV services. As a result, increased consumer demand for products and services that offer subscription video content on demand or the ability to download content that can be viewed on multiple devices, could adversely affect our results of operations. In addition, we generate revenue from products used in broadband access equipment and modem solutions, which is dependent on capital expenditures on the installation of broadband capacity. Our ~~operating results would be negatively impacted by any decrease in demand for broadband capacity.~~

~~During the fiscal quarter ended July 31, 2016, revenue from our~~ wireless communications segment ~~accounted for 27% of our net revenue. A substantial portion of our revenue in this segment~~ is ~~generated from sales of products for use in mobile handsets, particularly our FBAR filter and WiFi and Bluetooth connectivity products,~~primarily dependent on the ~~market for which is growing and becoming increasingly competitive and volatile. The~~ mobile handset market, which is characterized by intense competition, ~~among an increasingly concentrated group of OEMs,~~ rapidly evolving technologies and changing consumer ~~preferences. These factors result in the frequent introduction of new handsets~~preferences, and ~~other mobile devices, aggressive price competition, short life cycles for~~ our products, and continually evolving mobile handset specifications. If we or our mobile handset OEM customers are unable to manage product transitions, our business and results of operations could be negatively affected. Our success ~~in this consumer-driven market~~ is dependent on the overall demand for mobile handsets and macroeconomic conditions in general, as well as relative success of the mobile handsets into which our products are incorporated. ~~For example, if we have more content~~

~~in a handset that is less commercially successful than a handset in which we have less content, this could negatively impact our results of operations.~~

In addition, the timing of new handset launches, which also drive demand, is often unpredictable. If mobile handset OEMs inaccurately forecast consumer demand, this may lead to significant increases or decreases in orders to their component suppliers, including us, both within a quarter and from quarter to quarter.

During the fiscal quarter ended July 31, 2016, revenue from our enterprise storage segment accounted for 14% of our net revenue. We generate segment revenue primarily from our server and storage connectivity products and products used in HDDs. Similar to our wired infrastructure segment, ~~sales of~~ our ~~data center products are~~enterprise storage segment is dependent on data center ~~spending. Additionally, the volume of~~spending, as well as HDD-related ~~sales has decreased sharply over the past several years and is expected to continue to decrease as personal computer sales slow and customers move from HDD to flash memory.~~

sales. In addition, the shift to cloud-based IT solutions and services, such as hyperscale computing, may adversely affect both our wired infrastructure and enterprise storage segments. We currently sell a substantial portion of our products for use in traditional enterprise data centers. As cloud-based IT solutions become more prevalent, our results of operations will suffer if we are unable to increase sales of our products to cloud-based data center providers.

We are subject to risks associated with our distributors, including product inventory levels andproduct sell-through.

We sell many of our products through distributors who maintain their own inventory of our products for sale to dealers and end-customers. Sales to distributors accounted for 26% of our net revenue in the two fiscal quarters ended April 30, 2017. If our distributors are unable to sell an adequate amount of their inventory of our products in a given quarter or if they decide to decrease their inventories for any reason, our sales to these distributors and our revenue may ~~pursue acquisitions, dispositions, investments~~decline. We also face the risk that our distributors may increase inventory levels of our products in any particular quarter in excess of future anticipated sales. If such sales do not occur in the time frame anticipated by these distributors for any reason, these distributors may substantially decrease the amount of product they order from us in subsequent periods until their inventory levels realign with end-customer demand, which would harm our business and ~~joint ventures,~~could adversely affect our revenue in such subsequent periods. We have also streamlined the number of distributors we use, making us increasingly dependent on our remaining distributors, which may exacerbate the foregoing risks.

We limit distributor return rights and we allow limited price adjustments on sales to distributors. Price adjustments may be effected by way of credits for future product or by cash payments to the distributor, either in arrears or in advance, using estimates based on historical transactions. These programs may require us to deploy a substantial amount of cash to fund them. As of April 30, 2017, we had an aggregate of approximately $162 million on deposit with various distributors to fund these programs. The timing and mix of payments and credits associated with such price adjustments could change over time, which could adversely affect our ~~results of operations.~~cash flows.

~~Our growth strategy includes~~We do not always have a direct relationship with the acquisition of, and investment in, businesses that offer complementary products, services and technologies, augment our market coverage, or enhance our technological capabilities. We may also enter into strategic alliances or joint ventures to achieve these goals. We may not be able to identify suitable acquisition, investment, alliance, or joint venture opportunities, or to consummate any such transactions. In addition, our original estimates and assumptions used in assessing any acquisition that we make may be inaccurate and we may not realize the expected financial or strategic benefits of any such acquisition, including the Broadcom Transaction.

The Broadcom Transaction and any other future acquisitions we may undertake involve risks and uncertainties. For example, the integration of acquired businesses may not be successful and could result in disruption to other partsend-customers of our business. In addition, any such integration may require that we incur significant restructuring charges, including as a result of streamlining, or divesting non-core portions of, acquired businesses. To integrate acquired businesses, we must implement our management information systems, operating systems and internal controls over, and assimilate and manage the personnel of, the acquired operations. These difficulties may be complicated by factors such as the size of the business or entity acquired, geographic distances, lack of experience operating in the geographic markets or industry sectors of the acquired business, delays and challenges associated with integrating the business with our existing businesses, diversion of management’s attention from daily operations of the business, potential loss of key employees and customers of the acquired business, the potential for deficiencies in internal controls at the acquired or combined business, performance problems with the acquired business’ technology, difficulties in entering markets in which we have no or limited direct prior experience, exposure to unanticipated liabilities of the acquired business, insufficient revenue to offset increased expenses associated with the acquisition, adverse tax consequences and our potential inability to achieve the growth prospects or synergies expected from any such acquisition.

Any acquisition may also cause us to assume liabilities and ongoing lawsuits, acquire goodwill and other non-amortizable intangible assets that will be subject to impairment testing and potential impairment charges, incur amortization expense related to certain intangible assets, increase our expenses and working capital requirements, and subject us to litigation, which would reduce our return on invested capital. In addition, if the businesses or product lines that we acquire have a different pricing or cost structure than we do, such acquisitions may adversely affect our profitability and reduce our overall margin. Failure to manage and successfully integrate the acquisitions we make, or to improve margins of the acquired businesses and products including with respect to our integration of BRCM, could materially harm our business, operating results and margins. Even when an acquired business such as BRCM has already developed and marketed products, there can be no assurance that product enhancements will be made in a timely fashion or that all pre-acquisition due diligence will have identified all material issues that might arise with respect to such acquired business.

In connection with the Broadcom Transaction, we incurred a significant amount of debt, and any future acquisitions we make may also require significant additional debt or equity financing, which, in the case of debt financing, would increase our leverage and potentially affect our credit ratings, and in the case of an equity or equity-linked financing, would be dilutive to our existing shareholders. Any downgrades in our credit ratings associated with an acquisition could adversely affect our ability to borrow by resulting in more restrictive borrowing terms.sold through distributors. As a result, ~~of the foregoing, we also~~our products may be used in applications for which they were not necessarily designed or tested, including, for example, medical devices, and they may not ~~be able to complete acquisitions or other strategic transactions~~perform as anticipated in ~~the future to the same extent as in the past, or at all. These and other factors could harm our ability to achieve anticipated levels~~such applications. In such event, failure of ~~profitability~~even a small number of ~~acquired operations or realize other anticipated benefits of an acquisition, and could adversely affect our business, financial condition and results of operations.~~

From time to time, we may also divest or wind down portions of our business, both acquired or otherwise, that are no longer strategically important, or we may exit minority investments, which could materially affect our cash flows and results of operations. Any future dispositions we make may also involve risks and uncertainties. Any such dispositions could result in disruption to other parts of our business, potential loss of employees or customers, exposure to unanticipated liabilities or result in ongoing obligations and liabilities to us following any such divestiture. For example, in connection with a disposition, we may enter into transition services agreements or other strategic relationships, including long-term research and development arrangements, sales arrangements or agree to provide certain indemnities to the purchaser in any such transaction, which may result in additional expense and may adversely affect our financial condition and results of operations. In addition, dispositions may include the transfer of technology and/or the licensing of certain IP rights to third party purchasers, which could limit our ability to assert our IP rights against such third party purchasers.

~~See “~~Our acquisition of BRCM and the integration of its business, operations and employees with our own will involve risks and the failure to integrate successfully or realize the anticipated benefits could adversely affect our financial results and the value of our ordinary shares~~” for more detailed discussion relating to risks and uncertainties involved with our integration of BRCM.~~

We have entered into a three-year supply arrangement with Apple to supply them with RF components and modules for their smartphone and mobile devices which commits us to supply product to them on specified terms.

We have entered into a supply arrangement with Apple extending through 2018. Under this arrangement, we have agreed to supply Apple with certain RF front end components and modules for its smartphones and other mobile devices and to maintain and allocate to them sufficient manufacturing capacity to make these products. We have also agreed to certain pricing schedules or methodologies, which apply regardless of the volume of product purchased by Apple under the arrangement. In consideration for this agreement, Apple intends, but is not required, to source fixed and substantial percentages of its RF front end component and module needs from us, provided that we are able to meet certain development, supply, and quality commitments. As a result, we may not generate the amount of revenue or the level of profitability we expect from this arrangement. Our ability to realize a profit under this agreement will be subject to the level of customer demand and to any increases in the cost of maintaining facilities and manufacturing capacity and obtaining the materials and services required for us to perform under the agreement. If we do not perform under the arrangement, we could be liable for significant monetary damages.

We are making substantial capital investments in our wireless product manufacturing facilities to increase our capacity, however this may be insufficient to meet demand. Conversely, if we overestimate demand, we may not realize the benefit we anticipate from these investments.

We are continuing to add manufacturing capacity at our Fort Collins facility to support anticipated growth in sales of our proprietary products, particularly for our wireless communications segment, including to support our three-year supply arrangement with Apple, and to leverage our fixed costs. Substantially all of our FBAR filter products are manufactured at our Fort Collins facility. We also have a manufacturing facility in Eugene, Oregon, which we intend to develop to provide additional FBAR filter manufacturing capacity for our wireless business. These improvements require substantial capital investment. Starting in 2016, at our Fort Collins facility, we began adding an 8” wafer line and starting the conversion of our 6” wafer lines to 8” wafer lines to increase capacity. If such conversions do not go as planned this could result in reduced yields and therefore reduced capacity at this facility.

~~Unanticipated delays in these activities~~ could result in significant ~~additional costs, and could result in~~liabilities to us, being unable to timely satisfy customer demand for the products we plan to manufacture at these expanded facilities. Even with these expansions, our manufacturing capacity may be insufficient to meet demand. From time to time, we have put products for our wireless FBAR filter products on allocation when we have been unable to bring capacity online quickly enough to meet stronger than anticipated demand. If we underestimate customer demand, or if insufficient manufacturing capacity is available at these facilities to satisfy customers’ demands, we could forgo revenue opportunities, potentially lose market share, damage our ~~customer relationships~~reputation and ~~be subject to litigation and additional liabilities, all of which could have a material adverse effect on~~harm our business ~~financial condition~~ and results of operations. Conversely, if we overestimate customer demand we would experience excess capacity at these facilities, which would result in increased fixed costs relative to the revenue we generate and adversely affect our results of operations.

Our operating results are subject to substantial quarterly and annual fluctuations.

Our revenue and operating results have fluctuated in the past and are likely to fluctuate in the future. These fluctuations may occur on a quarterly and annual basis and are due to a number of factors, many of which are beyond our control. These factors include, among others:

~~our ability to successfully~~customer concentration and ~~timely integrate, and realize~~ the ~~benefits~~gain or loss of ~~our recent acquisitions, including BRCM, and any other~~ significant ~~acquisitions we may make;~~

customers;

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;

changes in our product mix or customer mix and their effect on our gross margin;

~~seasonality or cyclical fluctuations in our markets;~~

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;~~

facilities and fluctuations in manufacturing yields;

our ability to successfully and timely integrate, and realize the benefits of acquisitions we may make and the timing of acquisitions or dispositions of, or making and exiting investments in, other entities, businesses or technologies;

~~fluctuations~~changes in ~~interest rates, as~~ our ~~2016 Term Loans bear interest at a floating rate;~~

~~fluctuations~~tax incentive arrangements or structure, which may adversely affect our net tax expense and our cash flow in ~~currency exchange rates;~~any quarter in which such an event occurs;

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 revenue and royalty and other payments from IP sales and licensing arrangements;

new product announcements and introductions by us or our competitors;

seasonality or other fluctuations in our markets;

fluctuations in currency exchange rates;

timing and amount of research and development and related new product expenditures, and the timing of receipt of any research and development grant monies;

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 expense;

loss of key personnel or the shortage of available skilled workers; and

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.~~products.

The foregoing factors are often difficult to ~~forecast,~~predict, and these, as well as other factors, could materially adversely affect our quarterly or annual operating results. In addition, a significant amount of our operating expenses are relatively fixed in nature due to our significant sales, research and development and internal manufacturing overhead costs. Any failure to adjust spending quickly enough to compensate for a revenue shortfall could magnify the adverse impact of such revenue shortfall on our results of operations. As a result, we believe that quarter-to-quarter comparisons of our revenue and operating results may not be meaningful or a reliable indicator of our future performance. If our operating results in one or more future quarters fail to meet the expectations of securities analysts or investors, an immediate and significant decline in the trading price of our ordinary shares may occur.

~~We operate~~Our business would be adversely affected by the departure of existing members of oursenior management team.

Our success depends, in large part, on the ~~highly cyclical semiconductor industry, which~~continued contributions of our senior management team, and in particular, the services of Mr. Hock E. Tan, our President and Chief Executive Officer. Although we sometimes provide certain retention-based incentives to certain executives, none of our senior management is ~~subject~~bound by written employment contracts to ~~significant downturns.~~

remain with us for a specified period. In addition, we do not currently maintain key person life insurance covering our senior management. The ~~semiconductor industry is highly cyclical~~loss of any of our senior management could harm our ability to implement our business strategy and is characterized by constant and rapid technological change and price erosion, evolving technical standards, frequent new product introductions, short product life cycles (for semiconductors and for many ofrespond to the ~~end products~~rapidly changing market conditions in which ~~they~~we operate.

If we are ~~used)~~unable to attract and ~~wide fluctuations in product supply~~retain qualified personnel, especially ourdesign and ~~demand. From~~technical personnel, we may not be able to execute our business strategyeffectively.

Our future success depends on our ability to retain, attract and motivate qualified personnel. We also seek to acquire talented engineering and technical personnel through acquisitions we may make from time to time ~~these factors, together~~or otherwise. We have historically encountered some difficulties in hiring and retaining qualified engineers, particularly in Silicon Valley and Southeast Asia where qualified engineers are in high demand. In addition, our employees, including employees whom we have retained as a result of an acquisition, may decide not to continue working for us and may leave with ~~changes in general economic conditions, cause~~little or no notice. As the source of our technological and product innovations, our design and technical personnel represent a significant ~~upturns and downturns in the industry in general, and in our business in particular. Periods of industry downturns~~asset. Any inability to retain, attract or motivate such personnel could have been characterized by diminished demand for end-user products, high inventory levels and periods of inventory adjustment, under-utilization of manufacturing capacity, changes in revenue mix and accelerated erosion of average selling prices, resulting in ana material adverse effect on our business, financial condition and results of operations. We expect our business to continue to be subject to cyclical downturns even when overall economic conditions are relatively stable. If we cannot offset industry or market downturns, through increased market share or otherwise, our business could be adversely affected, net revenue may decline and financial condition and results of operations may suffer and we may be unable to reduce our costs quickly enough to maintain our operating profitability.

~~Adverse global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity.~~

Adverse global economic conditions have from time to time caused or exacerbated significant slowdowns in the semiconductor industry generally, as well as in our target markets, which have adversely affected our business and results of operations. In recent periods, investor and customer concerns about the global economic outlook, including concerns about the level of growth in China and economic recovery in the United States, have adversely affected market and business conditions in general. Macroeconomic weakness and uncertainty also make it more difficult for us to accurately forecast revenue, gross margin and expenses. Sustained uncertainty about, or worsening of, current global economic conditions may cause our customers and consumers to reduce or delay spending (leading to reduced demand for our products), could lead to the insolvency of key suppliers (resulting in product delays) and customers (impacting their ability to make timely payments to us), and could intensify pricing pressures. Any or all of these factors could negatively affect our business, financial condition and result of operations.

Winning business is subject to lengthy, competitive selection processes that often require us to incur significant expense, from which we may ultimately generate no revenue.

Our business is dependent on us winning competitive bid selection processes, known as “design ~~wins,” to develop semiconductors for use in our customers’ products.~~wins”. These selection processes are typically lengthy and can require us to ~~incur~~dedicate significant ~~design and~~ development expenditures and ~~to dedicate~~ scarce engineering resources in pursuit of a single customer opportunity. ~~We may not win the competitive selection process and may never generate any revenue despite incurring such expenditures.~~ Failure to obtain a particular design win may prevent us from obtaining design wins in subsequent generations of a particular product. This can result in lost revenue and could weaken our position in future competitive selection processes.

~~Furthermore, winning~~Winning a product design does not guarantee sales to a ~~customer. We may experience delays in generating revenue as a result of the lengthy development cycle typically required,~~customer or that we ~~may not~~will realize as much revenue, if any, as anticipated. ~~In addition, a~~A delay or cancellation of a customer’s plans could materially and adversely affect our financial results, as we ~~may have incurred~~incur significant expense in the design process and ~~generated~~may generate little or no revenue from it. In addition, the timing of design wins is unpredictable and implementing production for a major design win, or multiple design wins occurring at the same time, may strain our resources and those of our contract manufacturers. In such event, we may be forced to dedicate significant additional resources and incur additional, unanticipated costs and expenses. Often customers will only purchase limited numbers of evaluation units from us until they qualify the products and/or the manufacturing line for those products. The qualification process can take significant time and resources and we may not always be able to satisfy customers’

qualification requirements. Delays in qualification or failure to qualify our products may cause a customer to discontinue use of our products and result in a significant loss of revenue. ~~Customers~~Finally, customers could choose at any time to stop using our products or may fail to successfully market and sell their products, which could reduce demand for our products, and cause us to hold excess inventory, materially adversely affecting our business, financial condition and results of operations. These risks are exacerbated by the fact that many of our products, and the end products into which our products are incorporated, often have very short life cycles.

The timing of design wins is unpredictable and implementing production for a major design win, or multiple design wins occurring at or around the same time, may strain our resources and those of our contract manufacturers. In such event we may be forced to dedicate significant additional resources and incur additional, unanticipated costs and expenses, which may have a material adverse effect on our results of operations.

Finally, some customers will not purchase any products from us, other than limited numbers of evaluation units, until they qualify the products and/or the manufacturing line for the products. The qualification process can take significant time and resources and we may not always be able to satisfy the qualification requirements of these customers. Delays in qualification or failure to qualify our products may cause a customer to discontinue use of our products and result in a significant loss of revenue.

Competition in our industry could prevent us from growing our revenue.

The global semiconductor market is highly competitive. We ~~compete~~expect competition in ~~different target~~the markets onin which we participate to continue to increase as existing competitors improve or expand their product offerings. Competition may further increase as companies not currently in direct competition with us may introduce competing products in the basis of, among other things and in varying degrees, quality, technical performance, price, product features, product system compatibility, system-level design capability, engineering expertise, responsiveness to customers, new product innovation, product availability, delivery timing and reliability, and customer sales and technical support. Thefuture. In addition, the competitive landscape is changing as a result of a trend toward consolidation within the industry, as some of our direct competitors have merged with or been acquired by other competitors while others have begun collaborating with each other. We expect this consolidation trend to continue.

Some of our competitors may have ~~a more extensive product portfolio or~~ greater resources for manufacturing, distribution, financial, research and development or marketing resources than us. In addition, some of our competitors may also have ~~longer independent operating histories,~~a greater presence in key markets, a larger customer base or more comprehensive patent ~~protection.~~protection than us. We compete with integrated device manufacturers and fabless semiconductor companies as well as the internal resources of large, integrated OEMs. Our competitors range from large, international companies offering a wide range of semiconductor products to smaller companies specializing in niche markets and new technologies. We expect competition in the markets in which we participate to continue to increase as existing competitors improve or expand their product offerings. In addition, companies not currently in direct competition with us may introduce competing products in the future. Because our products are often building block semiconductors, providing functions that in some cases can be integrated into more complex

integrated circuits, or ICs, we also face competition from manufacturers of ICs, as well as customers that may develop their own IC products.

Our ability to compete successfully depends on elements both within and outside of our control, including industry and general economic trends. For example, during past industry downturns, competition in our target markets intensified as semiconductor manufacturers reduced prices to combat production overcapacity and high inventory levels. In industry downturns, manufacturers in financial difficulties or in bankruptcy may implement pricing structures designed to ensure short-term market share and near-term survival, rather than securing long-term viability. If we are unable to compete successfully, ~~or if such actions drive down the prices we are able to charge for our products,~~ we may lose market share for our products or incur significant reduction in our project margins, any of which could have a material adverse effect on our business and results of operations. ~~Also see “The average selling prices of products in our markets have often decreased rapidly and may do so in the future, which could harm our revenue and gross profit~~”.

~~Dependence on contract manufacturing and suppliers of critical components within our supplychain may adversely affect our ability to bring products to market, damage ourreputation and adversely affect our results of operations.~~

We operate a primarily outsourced manufacturing business model that principally utilizes third-party foundry and module assembly and test capabilities. As a result, we are highly reliant on third-party foundry wafer fabrication capacity, including single-sourcing for many components or products. Most of our products are designed to be manufactured in a specific process, typically at one particular fab or foundry, either our own or with a particular contract manufacturer. For example, Taiwan Semiconductor Manufacturing Company Limited supplies the substantial majority of the silicon wafers we use in our products.

The ability and willingness of our contract manufacturers, foundries and materials providers, or, collectively, our suppliers, to perform is largely outside of our control. If one or more of our suppliers fails to perform its obligations in a timely manner or at satisfactory quality levels, our ability to bring products to market and to timely deliver products to our customers, and our reputation could suffer. Suppliers, for example, may extend lead times, limit supplies, increase prices or may discontinue parts due to capacity constraints, or make changes to manufacturing processes.

We also depend on selected foundries to timely develop new, advanced manufacturing processes and we may be unable to deliver products to our customers if these new processes are not timely developed or we do not have sufficient access to them. For example, we have design wins based on manufacturing processes that are currently under development. If these processes are not developed on schedule, we may lose revenue opportunities and damage our relationships with our customers. Further, because of the limited competition among large foundries, it is possible that a particular foundry for products requiring these technologies will price their services at levels that have an adverse impact on our gross margin or make it unprofitable for us to offer these products.

Some components or parts are not readily available from alternate suppliers due to their unique design or the length of time necessary for design work. If one of our suppliers, particularly a single-source supplier, ceases to, or is unable to, manufacture such a component, or changes its manufacturing process, or if supply is otherwise constrained, we may need to source alternative parts, which may be difficult, expensive and take an extended period of time. We may also be forced to make a significant “lifetime” purchase of the affected component or part, in order to enable us to meet our customer demand, or to re-engineer a product. Significant lifetime purchases of such discontinued components could significantly increase our inventory and other expenses, such as insurance costs, and expose us to additional risks, such as the loss of, or damage to, products that may not subsequently be available to us from an alternative source. Such supply issues may also cause us to fail to timely meet customer demand. This could result in the payment of significant damages by us to our customers, and our net revenue could decline. In such events, our business, financial condition and results of operations would be adversely affected.

We review our supply chain on an ongoing basis and may seek to qualify second source manufacturers and suppliers for some components and products. However, only a limited number of foundries provide manufacturing services using the advanced technologies that we require. We may be unable to secure a second source or replacement foundry for some of our more advanced products. Qualifying such second sources, when available, may be a lengthy and potentially costly process and they may not produce as cost-effectively as our other suppliers, which would reduce our margins.

~~To the extent we rely on third-party contract manufacturing relationships, we face the following additional risks:~~

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;

~~inaccurate capacity forecasting of our manufacturing needs;~~

~~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.~~

~~Much of our outsourcing takes place in developing countries, and as a result may additionally be subject to geopolitical uncertainty. Also see “~~Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of the countries in which we conduct business and other factors related to our international operations”.

~~We generally do not have any long-term supply contracts with our contractmanufacturers or materials providers and may not be able to obtain the products orraw materials required for our business, which could have a material adverse effecton our business.~~

We purchase a significant portion of our semiconductor materials and finished goods from a few contract manufacturers and materials providers, some of which are single source suppliers. For the fiscal quarter and three fiscal quarters ended July 31, 2016, we purchased 55% and 54%, respectively, of the materials for our manufacturing processes from two and three materials providers, respectively. For fiscal year 2015, we purchased 51% of the materials for our manufacturing processes from five materials providers. Substantially all of our purchases are on a purchase order basis, and we do not generally have long-term contracts with our contract manufacturers or materials providers. Our manufacturing processes rely on many materials, including silicon, gallium arsenide and indium phosphide wafers, copper lead frames, precious metals, mold compound, ceramic packages and various chemicals and gases. From time to time, suppliers may extend lead times, limit supplies or increase prices due to commodity price increases, capacity constraints or other factors, which may lead to interruption of supply or increased demand in the industry. In the event that we cannot timely obtain sufficient quantities of components or raw materials at reasonable prices, the quality of the material deteriorates or we are not able to pass on higher materials or energy costs to our customers, our business, financial condition and results of operations could be adversely impacted.

A prolonged disruption of our manufacturing facilities, research and development facilities or other significant operations, or those of our suppliers, could have a material adverse effect on our business, financial condition and results of operations.

Although we operate a primarily outsourced manufacturing business model, we also rely on our own manufacturing facilities, in particular in Fort Collins, Colorado, Singapore, and Breinigsville, Pennsylvania. We use these internal manufacturing facilities for products utilizing our innovative materials and proprietary processes, to protect our IP, to develop the technology for manufacturing and to ensure supply of certain components. Our Fort Collins and Breinigsville facilities are the sole sources for the FBAR components used in many of our wireless devices and for the indium phosphide-based wafers used in our fibre optics products, respectively. Many of our facilities, and those of our contract manufacturers and suppliers, are located in California and the Pacific Rim region, which has above average seismic activity and severe weather activity. In addition, our research and development personnel are primarily concentrated in ~~a few locations, primarily~~ China, India, Malaysia, Singapore, South Korea, Fort Collins, Colorado, San Jose, California, Southern California and Breinigsville and Allentown, Pennsylvania, with the expertise of the personnel at each such location tending to be focused on one or two specific areas.

A prolonged disruption at one or more of our manufacturing or research facilities for any reason, especially our Fort Collins, Singapore and Breinigsville facilities, or those of our contract manufacturers or suppliers, due to natural- or man-made ~~disaster~~disasters or other events outside of our control, such as equipment malfunction, widespread outbreaks of acute illness or the failure to maintain our labor force at one or more of these facilities, would limit our capacity to meet customer demands and delay new product development until a replacement facility and equipment, if necessary, were found. Any such event would likely disrupt our operations, delay production, shipments and revenue, result in us being unable to timely satisfy customer demand, expose us to claims by our customers resulting in significant expense to repair or replace our affected facilities, and in some instances could significantly curtail our research and development efforts in a particular product area or target market. As a result, we could forgo revenue opportunities, potentially lose market share, damage our customer relationships and be subject to litigation and additional liabilities, all of which could materially and adversely affect our business. Although we purchase insurance to mitigate certain losses, such ~~losses,~~insurance often carries a high deductible amount and any such uninsured losses could negatively affect our operating results. In addition, even if we were able to promptly resume production of our affected products, if our customers cannot timely resume their own manufacturing following such an event, they may cancel or scale back their orders from us and this may in turn adversely affect our results of operations. Such events could also result in ~~significant expense~~increased fixed costs relative to ~~repair~~the revenue we generate and adversely affect our results of operations.

We may be unable to maintain appropriate manufacturing capacity at our own manufacturing facilities, which could adversely affect our relationships with our customers, our financial results and business condition.

We must maintain appropriate capacity at our own manufacturing facilities to meet anticipated customer demand for our proprietary products. From time to time, this requires us to invest in expansion or ~~replace~~improvements of those facilities, which often involves substantial cost and other risks, such as delays in completion. Such expanded manufacturing capacity may still be insufficient, or may not come online soon enough, to meet demand customer and we may have to put customers on product allocation, forego sales or lose customers as a result. Conversely, if we overestimate customer demand, we would experience excess capacity and fixed costs at these facilities, all of which could adversely affect our ~~affected facilities, and in some instances~~results of operations.

Adverse global economic conditions could ~~significantly curtail our research and development efforts in~~have a ~~particular product area or target market.~~

~~We rely~~negative effect on our ~~own internal information technology,~~business, results of operations and financial condition and liquidity.

Adverse global economic conditions have from time to time caused or ~~IT, systems~~exacerbated significant slowdowns in the semiconductor industry generally, as well as in our target markets, which have adversely affected our business and ~~on third parties~~results of operations. In recent periods, investor and customer concerns about the global economic outlook, have adversely affected market and business conditions in general. Macroeconomic weakness and uncertainty also make it more difficult for us to ~~provide corporate infrastructure services necessary~~accurately forecast revenue, gross margin and expenses. Sustained uncertainty about, or worsening of, current global economic conditions may cause our customers and consumers to reduce or delay spending, could lead to the insolvency of key suppliers and customers, and could intensify pricing pressures. Any or all of these factors could negatively affect demand for ~~the operation~~our products and our business, financial condition and result of ~~our business.~~ operations.

Any failure of our IT systems or one or more of our vendors to provide necessary services could have a material adverse effect on our business.

We depend on various IT systems, including networks, applications, internal IT systems and personnel, and outsourced ~~services.~~services for, among other things, financial reporting and product orders and shipments. We rely on third-party vendors to provide critical corporate infrastructure services, including certain services related to accounting, billing, shipping, human resources, benefit plan administration, IT network development and network monitoring. ~~The ability of these third-party vendors to successfully provide reliable, high-quality services is subject to technical and operational uncertainties that are beyond our control.~~ While we may be entitled to damages if our vendors fail to perform under their

agreements with us, ~~our agreements with these vendors limit the amount of damages~~ we may ~~receive. In addition, we do not know whether we will~~ be ~~able~~unable to collect on any award of damages ~~or that~~and any ~~such damages would~~award may be ~~sufficient~~insufficient to cover the actual costs we ~~would~~may incur as a result of ~~any~~a vendor’s failure to perform under its agreement with us. Upon expiration or termination of any of our ~~agreements with~~ third-party ~~vendors,~~vendor agreements we may not be able to timely replace the ~~services provided to us in a timely manner or~~vendor on terms and conditions, including service levels and cost, that are favorable to ~~us and~~us. In addition, a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.

Any failure of these internal or third-party systems and services to operate effectively could disrupt our operations and could have a material adverse effect on our business, financial condition and results of operations by harming our ability to accurately forecast sales demand, manage our supply chain and production facilities, fulfill customer orders, and report financial and management information on a timely and accurate basis.

Our gross margin is dependent on a number of factors, including our product mix, ~~customer mix, commodity prices, non-product revenue,~~price erosion, acquisitions we may make, ~~and~~level of capacity ~~utilization.~~utilization and commodity prices.

Our gross margin is highly dependent on product mix, which is susceptible to seasonal and other fluctuations in our markets. A shift in sales mix away from our higher margin products, as well as the timing and amount of our non-product and IP-related revenue, could adversely affect our future gross margin percentages. In addition, OEMs are becoming increasingly price conscious when they design semiconductors from third-party suppliers into their products. This sensitivity, combined with large OEMs’ purchasing power, can lead to intense price competition among competing suppliers, which may require us to decreaseAlthough our prices or provide rebates in order to win a design with an OEM customer. This can, in turn, adversely affect our gross margin. Our gross margin may also be affected by fluctuations in commodity prices, either directly in the price of the raw materials we buy, or as a result of price increases passed on to us by our suppliers. We do not hedge our exposure to commodity prices, some of which (including gold and fuel prices) are very volatile, and sudden or prolonged increases in commodities prices may adversely affect our gross margin.

Our gross margin is also affected by the timing and amount of our non-product revenue, including non-refundable payments from customers for research and development projects during product development, and IP-related revenue such as licensing royalty payments and sales of IP. Our non-product revenue is generally high margin, ~~but~~it fluctuates significantly from quarter to quarter. ~~Businesses or companies that we may acquire from time to time may have different gross margin profiles than us and could, therefore, also affect our overall gross margin.~~

In addition, semiconductor manufacturing requires significant capital investment, leading to high fixed costs, including depreciation expense. Although we outsource a significant portion of our manufacturing activities, we do retain some semiconductor fabrication facilities. If we are unable to utilize our owned fabrication facilities at a high level, the fixed costs associated with these facilities, such as depreciation expense, will not be fully absorbed, resulting in higher average unit costs and a lower gross margin. In the past, we have experienced periods where our gross margin declined due to, among other things, reduced factory utilization resulting from reduced customer demand, reduced selling prices and a change in product mix towards lower margin devices. Increasedincreased competition and the existence of product alternatives, more complex engineering requirements, lower demand, reductions in our technological lead, compared to our competitors, and other factors may lead to further price erosion, lower revenue and lower margin for us in the future.

Our gross margin may also be adversely affected by expenses related to the acquisitions of businesses, such as amortization of intangible assets and restructuring and impairment charges. Furthermore, businesses or companies that we acquire may have different gross margin profiles than us and could, therefore, also affect our overall gross margin.

In addition, semiconductor manufacturing requires significant capital investment, leading to high fixed costs, including depreciation expense. If we are unable to utilize our owned internal manufacturing facilities at a high level, the fixed costs associated with these facilities, such as depreciation expense, will not be fully absorbed, resulting in higher average unit costs and a lower gross margin. Furthermore, fluctuations in commodity prices, either directly in the price of the raw materials we buy, or as a result of price increases passed on to us by our suppliers, could negatively impact our margins. We do not hedge our exposure to commodity prices, some of which (including gold and fuel prices) are very volatile, and sudden or prolonged increases in commodities prices may adversely affect our gross margin.

If the tax incentive or tax holiday arrangements we have negotiated in Singapore and other jurisdictions change or cease to be in effect or applicable, in part or in whole, for any reason, or if our assumptions and interpretations regarding tax laws and incentive or holiday arrangements prove to be incorrect, the amount of corporate income taxes we have to pay could significantly increase.

Our operations are currently structured to benefit from the various tax incentives and tax holidays extended to us in various jurisdictions to encourage investment or employment. For example, we have obtained ~~several~~ tax incentives from the Singapore Economic Development Board, an agency of the Government of Singapore, which provide that ~~certain classes of~~qualifying income we earn in Singapore ~~are~~is subject to tax ~~holidays~~holiday or reduced rates of Singapore income tax. Each such tax incentive is separate and distinct from the others, and may be granted, withheld, extended, modified, truncated, complied with or terminated independently without any effect on the other incentives. In order to retain these tax benefits in Singapore, we must meet certain operating conditions specific to each incentive, ~~relating to, among other things,~~including maintenance of a corporate headquarters function and specified IP and related activities in Singapore. Subject to our compliance with these conditions and legislative developments, the Singapore tax incentives are presently scheduled to expire at various dates generally between 2020 and ~~2025,~~2021, subject in certain cases to potential extensions, which we may or may not be able to ~~obtain.~~obtain, and any subsequent changes in incentive scope. Singapore has announced that its current IP pioneer incentive, from which we benefit, will now terminate in 2021, earlier than our originally scheduled expiration date in 2025. A new Singapore IP incentive is expected to be made available in its place, but it is not yet clear what its terms will be or whether we would qualify for it. While our objective is to substantially offset the effects of the early termination of the existing IP pioneer incentive in 2021, either through the new Singapore IP incentive or otherwise, we cannot assure you that we will be able to do so. Our current IP pioneer incentive represents the substantial majority of the overall provision for income taxes provided by all such incentives from which we benefit. Absent these tax incentives, the corporate income tax rate ~~in Singapore~~ that would otherwise apply to usour Singapore taxable income would be 17%. We also have a tax ~~holiday~~holidays on our qualifying ~~Malaysian~~ income in Malaysia, which ~~is effective up~~are scheduled to expire between 2018 and ~~including our fiscal year 2018.~~2028. The tax incentives and tax holidays that we have ~~negotiated~~obtained are also subject to our compliance with various operating and other ~~conditions.~~conditions and may, in some instances, be amended or terminated prior to their scheduled termination date by the relevant governmental authority. If we cannot, or elect not to, comply with the operating conditions included in any particular tax incentive or tax holiday, we ~~will lose the related tax benefits and we~~ could, in some instances, be required to refund previously realized material tax ~~benefits.~~benefits, or if such tax incentive or tax holiday is terminated prior to its expiration absent a new incentive applying, we will lose the related tax benefits earlier than scheduled. Depending on the incentive at issue, we could also be required to modify our operational structure and tax strategy, which may not be as beneficial to us as the benefits provided under the present tax

concession arrangements. ~~For fiscal years 2015, 2014 and 2013, the~~The effect of all these tax incentives and tax holidays, in the aggregate, was to reduce the overall provision for income taxes by approximately $169 million, $207 million and $99 million, for fiscal years 2016, 2015 and ~~$77 million,~~2014, respectively, reduce diluted net loss per share by $0.44 for fiscal year 2016 and increase diluted net income per share by $0.74 and $0.37 for fiscal years 2015 and ~~$0.31,~~2014, respectively.

Our interpretations and conclusions regarding the tax incentives are not binding on any taxing authority, and if our assumptions about tax and other laws are incorrect or if these tax incentives are substantially modified or rescinded we could suffer material adverse tax and other financial consequences, which would increase our expenses, reduce our profitability and adversely affect our cash flows.

Our effective tax rates and cash taxes payable are affected by reorganizations or restructurings of our businesses or assets, changes in our corporate or debt financing structure, jurisdictional revenue mix, changes in tax regulations or policy and the outcome of tax audits and examinations, which could materially, adversely affect financial results.

We are a Singapore-based multinational company subject to tax in various tax jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions where the ultimate tax determination is uncertain. Additionally, our calculations of income taxes are based on our interpretations of applicable tax laws in the jurisdictions in which we are required to file tax returns.

Our provision for income taxes is subject to volatility and could be adversely affected by numerous factors including:

reorganization or restructuring of our businesses, tangible and intangible assets, outstanding indebtedness and corporate structure;

jurisdictional mix of our income and assets, 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;

changes in transfer pricing rules or methods of applying these rules;

changes in tax laws, including in Singapore, changes to the taxation of earnings of foreign subsidiaries, the deductibility of expenses attributable to income and foreign tax credit rules;

tax effects of increases in non-deductible employee compensation;

changes in tax accounting rules or principles and in the valuation of deferred tax assets and liabilities;

outcomes of income tax audits; and

expiration, lapses or termination of tax credits or incentives.

At the time we completed the Broadcom Merger, in connection with the preliminary allocation of the purchase price, we established a deferred tax liability on our balance sheet. This liability is associated with our potential tax liability arising from our planned integration of BRCM’s IP, which was completed in November 2016. This tax liability will become payable as earnings resulting from this integration of IP is distributed over time. In addition, prior to the closing of the Broadcom Merger, our policy was to indefinitely reinvest a portion of our foreign earnings to fund our operations outside Singapore. Effective as of our fiscal quarter ended May 1, 2016, we no longer intend to indefinitely reinvest any of our accumulated and current foreign earnings in our operations outside Singapore. As a result of these events, the amount of our income taxes payable could increase materially and consume an increasing amount of our cash. In addition, our provision for income taxes in future periods is likely to change as a result of the impact of internal restructuring and reorganization, in particular as a result of the Broadcom Merger, which would also affect our overall effective tax rate.

We have also adopted transfer-pricing policies between our affiliated entities. Our policies call for the provision of services, the sale of products, the advance of financing and grant of licenses from one affiliate to another at prices that we believe are negotiated on an arm’s length basis. Our taxable income in any jurisdiction is dependent upon acceptance of our operational practices and intercompany transfer pricing by local tax authorities as being on an arm’s length basis. Due to inconsistencies in application of the arm’s length standard among taxing authorities, as well as lack of adequate treaty-based protection, transfer pricing challenges by tax authorities could, if successful, result in adjustments for prior or future tax years. As a result of these adjustments, we could become subject to higher taxes and our earnings and results of operations would be adversely affected in any period in which such determination is made.

Although we believe our tax estimates are reasonable, there is no assurance that the final determination of our income tax liability will not be materially different than what is reflected in our income tax provisions and accruals. Significant judgment is required to determine the recognition and measurement of tax liabilities prescribed in the relevant accounting guidance for uncertainty in income taxes. The accounting guidance for uncertainty in income taxes applies to all income tax positions, which, if settled unfavorably, could adversely impact our provision for income taxes.

In addition, we are subject to, and are under, tax audit in various jurisdictions, and such jurisdictions may assess additional income tax against us. Although we believe our tax positions are reasonable, the final determination of tax audits could be materially different from our income tax provisions and accruals. The ultimate results of an audit could have a material adverse effect on our results of operations and cash flows in the period or periods for which that determination is made.

The enactment of legislation implementing changes in taxation of international business activities, the adoption of other tax reform policies or changes in tax legislation or policies in Singapore and in jurisdictions outside Singapore could materially impact our financial position and results of operations.

Tax bills are introduced from time to time to reform taxation of international business activities. Corporate tax reform and tax transparency continue to be high priorities in many tax jurisdictions where we have business operations. As a result, policies regarding corporate income and other taxes in numerous jurisdictions are under heightened scrutiny. For example, many countries (including Singapore) are beginning to implement legislation and other guidance to align their international tax rules with the Organisation for Economic Co-operation’s Base Erosion and Profit Shifting recommendations and action plan that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer-pricing documentation rules, and nexus-based tax incentive practices. In addition, in the United States the new administration has indicated that it proposes to make substantial changes to corporate taxation in that country, which may include changes to taxation of the repatriation of non-U.S. income and border adjustment taxes. As a result of the heightened scrutiny of corporate taxation policies, prior decisions by tax authorities regarding treatments and positions of corporate income taxes could be subject to legislative investigation and inquiry, which could also result in changes in tax policies or prior tax rulings. Any such changes in policies or rulings may also result in the taxes we previously paid being subject to change.

Due to the large scale of our international business activities any substantial changes in international corporate tax policies or legislative initiatives may materially and adversely affect our business, our reputation, the amount of taxes we are required to pay and our financial condition and results of operations generally.

We may be ~~subject to claims~~involved in legal proceedings, including IP, anti-trust and securities litigation, which could divert efforts of ~~infringement of third-party IPrights or demands that we license third-party technology, which could~~management and result in significant expense and loss of our IP rights.

We are often involved in legal proceedings, including cases involving our IP rights and those of others, anti-trust and commercial matters, merger related suits, putative securities class action suits and other actions. Some of the actions seek injunctive relief, including injunctions against the sale of our products and substantial monetary damages, which if granted or awarded could materially harm our business, financial condition and results of operations. Litigation or settlement of such actions, regardless of their merit, can be complex, can extend for a protracted period of time, may divert the efforts and attention of our management and technical personnel, is frequently costly and the related expenditures unpredictable.

The semiconductor industry is characterized by companies holding large numbers of patents, copyrights, trademarks and trade secrets and by the vigorous pursuit, protection and enforcement of IP rights, including actions by patent-holding companies that do not make or sell products. From time to time, third parties assert against us and our customers and distributors their patent, copyright, trademark, trade secret and other IP rights to technologies that are important to our business.

Litigation or settlement of claims that our products or processes infringe or misappropriate these rights, regardless of their merit, are frequently costly and divert the efforts and attention of our management and technical personnel. In addition, manyMany of our customer agreements, and in some cases our asset sale agreements, require us to indemnify our customers or purchasers for third-party IP infringement claims, including costs to defend those claims, and payment of damages in the case of adverse rulings. Claims of this sort could also harm our relationships with our customers and might deter future customers from doing business with us. We do not know whether we will prevail in such proceedings, given the complex technical issues and inherent uncertainties in IP litigation. If any pending or future proceedings result in an adverse outcome, we could be required to:

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;~~distributors and/or recall, or accept the return of, infringing products;

pay substantial damages to our direct or ~~end customers~~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.

Any of the foregoing results could have a material adverse effect on our business, financial condition and results of operations.

In addition, we may be obligated to indemnify our current or former directors or employees, or former directors or employees of companies that we have acquired, in connection with litigation or regulatory investigations. These liabilities could be substantial and may include, among other things, the cost of defending lawsuits against these individuals, as well as stockholder derivative suits; the cost of government, law enforcement or regulatory investigations; civil or criminal fines and penalties; legal and other expenses; and expenses associated with the remedial measure, if any, which may be imposed.

We utilize a significant amount of IP in our business. If we are unable or fail to protect our IP, our business could be adversely affected.

Our success depends in part upon protecting our ~~IP, including our proprietary FBAR technology.~~IP. To accomplish this, we rely on a combination of IP rights, including patents, copyrights, trademarks and trade secrets, as well as customary contractual protections with our customers, suppliers, employees and consultants. We may be required to spend significant resources to monitor and protect our IP rights, and even with significant expenditures we may not be able to protect our IP rights that are valuable to our business. We are unable to predict or assure that:

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 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;

our IP rights will be enforced in certain jurisdictions where competition may be intense or where legal protection may be weak; or

we have sufficient IP rights to protect our products or our business.

In addition, our competitors or others may develop products or technologies that are similar or superior to our products or technologies, duplicate our products or technologies or design around our protected technologies. Effective patent, trademark, copyright and trade secret protection may be unavailable or more limited in other jurisdictions, relative to those protections available in the United States, may not be applied for or may be abandoned in one or more relevant jurisdictions. We may elect to abandon or divest patents or otherwise not pursue prosecution of certain pending patent applications, due to strategic concerns or other factors. In addition, when patents expire, we lose the protection and competitive advantages they provided to us.

We also generate some of our revenue from licensing royalty payments and from technology claim settlements relating to certain of our IP. Licensing of our IP rights, particularly exclusive licenses, may limit our ability to assert those IP rights against third parties, including the licensee of those rights. In addition, we may acquire companies having IP that is subject to licensing obligations to other third parties. These licensing obligations may extend to our own IP following any such acquisition and may limit our ability to assert our IP rights. From time to time we pursue litigation to assert our IP rights, including, in some cases, against third parties with whom we have ongoing relationships, such as customers and suppliers. Conversely, third parties may pursue IP litigation against us, including as a result of our IP licensing business. An adverse decision in such types of legal action could limit our ability to assert our IP rights and limit the value of our technology, including the loss of opportunities to sell or license our technology to others or to collect royalty payments based upon successful protection and assertion of our IP against others. In addition, such legal actions or adverse decisions could otherwise negatively impact our business, financial condition and results of operations.

From time to time we may need to obtain additional IP licenses or renew existing license agreements. We are unable to predict whether these license agreements can be obtained or renewed on acceptable terms or at all.

~~If we are unable to attract and retain qualified personnel, especially ourdesign and technical personnel, we may not be able to execute our business strategyeffectively.~~

Our future success depends on our ability to retain, attract and motivate qualified personnel, including our management, sales and marketing, legal and finance personnel, and especially our design and technical personnel. We also seek to acquire talented engineering and technical personnel through acquisitions we may make from time to time or otherwise. We have historically encountered difficulties in hiring and retaining qualified engineers because there is a limited pool of engineers with expertise in analog and optoelectronic semiconductor design. Competition for such personnel is intense in the semiconductor industry, particularly in Silicon Valley and Southeast Asia where qualified engineers are in high demand. In addition, our employees, including employees whom we have retained as a result of the Broadcom Transaction, and employees of any other companies or businesses that we acquire may decide not to continue working for us following such acquisitions. In such cases, employees may decide to leave with little or no notice, for reasons that may include dissatisfaction with our corporate culture, compensation or new roles and responsibilities, integration difficulties or a desire not to remain with the combined company. As the source of our technological and product innovations, our design and technical personnel represent a significant asset. Any inability to retain, attract or motivate such personnel could have a material adverse effect on our business, financial condition and results of operations.

We are subject to warranty claims, product recalls and product liability.

From time to time, we may be subject to warranty or product liability claims that have led, and may in the future lead, to significant expense. We may also be exposed to such claims as a result of ~~the Broadcom Transaction, or~~ any ~~other~~ acquisition we may undertake in the future. Although we maintain reserves for reasonably estimable liabilities and purchase product liability insurance, our reserves may be inadequate to cover the uninsured portion of such claims. Conversely, in some cases, amounts we reserve may ultimately exceed our actual liability for particular claims and may need to be reversed.

Product liability insurance is subject to significant deductibles and there is no guarantee that such insurance will be available or adequate to protect against all such claims, or we may elect to self-insure with respect to certain matters. ~~We may incur costs and expense in the event~~It is possible for one of ~~any~~our customers to recall of a ~~customer’s~~ product containing one of our devices. ~~The process of identifying a recalled product in devices that have been widely distributed may be lengthy and require significant resources, and~~In such an event, we may incur significant costs and expenses, including among others, replacement costs, contract damage claims from our customers and reputational harm. Our customer contracts typically contain warranty and indemnification provisions, and in certain cases may also contain liquidated damages provisions, relating to product quality issues. The potential liabilities associated with such provisions are significant, and in

some cases, including in agreements with some of our largest customers, are potentially unlimited. Any such liabilities may greatly exceed any revenue we receive from the relevant products. Costs, payments or damages incurred or paid by us in connection with warranty and product liability claims and product recalls could materially and adversely affect our financial condition and results of operations.

The complexity of our products could result in unforeseen delays or expense or undetected defects or bugs, which could adversely affect the market acceptance of new products, damage our reputation with current or prospective customers, and materially and adversely affect our operating costs.

Highly complex products, such as those we offer, may contain defects and bugs when they are first introduced or as new versions are released, or their release may be delayed due to unforeseen difficulties during product development. If any of our products, or third-party components used in our products, contain defects or bugs, or have reliability, quality or compatibility problems, we may not be able to successfully design workarounds. Furthermore, if any of these problems are not found until after we have commenced commercial production of a new product, we may be required to incur additional development costs and product recall, repair or replacement costs. Consequently, our reputation may be damaged and customers may be

reluctant to buy, ~~or may delay purchases of,~~ our products, which could materially and adversely affect our ability to retain existing customers and attract new ~~customers, and our financial results.~~customers. To resolve these problems, we may have to invest significant capital and other resources. These problems may also result in claims against us by our customers or others. For example, if a delay in the manufacture and delivery of our products causes the delay of a customer’s ~~product~~end-product delivery, we may be required, under the terms of our agreement with that customer, to compensate the customer for the adverse effects of such delays. In addition, these problems may divert our technical and other resources from other development efforts, and we would likely lose, or experience a delay in, market acceptance of the affected product or products. As a result, our financial results could be materially and adversely affected. ~~As we transition from manufacturing 6” to 8” wafers, these risks are enhanced.~~

~~We are subject to risks associated with our distributors’ product inventories andproduct sell-through.~~

We sell many of our products to customers through distributors who maintain their own inventory of our products for sale to dealers and end customers. We limit distributor return rights and we allow limited price adjustments on sales to distributors. Price adjustments may be effected by way of credits for future product or by cash payments to the distributor, either in arrears or in advance, using estimates based on historical transactions. We recognize reserves for distributor rights related to these limited stock returns and price adjustments. We recognize revenue for sales to distributors upon delivery to the distributors, net of estimated provisions for these stock return and price adjustment programs. We have extended these programs to certain distributorsoperate in the United States, Asia and Europe and may extend them on a selective basis to some of our other distributors in these geographies. The reserves recognized for these programs are based on significant judgments and estimates, using historical experience rates, inventory levels in distribution, current trends and other factors, and there could be significant differences between actual amounts and our estimates. These programs may require us to deploy a substantial amount of cash to fund them. As of July 31, 2016 and November 1, 2015, we had an aggregate of approximately $74 million and $40 million on deposit with various distributors to fund these programs, respectively. The timing and mix of payments and credits associated with such price adjustments could change over time,highly cyclical semiconductor industry, which ~~could adversely affect our cash flows. Sales to distributors accounted for 31% and 21% of our net revenue in the three fiscal quarters ended July 31, 2016 and fiscal year 2015, respectively.~~

If our distributors are unable to sell an adequate amount of their inventory of our products in a given quarter to dealers and end customers or if they decide to decrease their inventories for any reason, such as adverse global economic conditions or a downturn in technology spending, our sales to these distributors and our revenue may decline. We also face the risk that our distributors may purchase, or for other reasons accumulate, inventory levels of our products in any particular quarter in excess of future anticipated sales to end customers. If such sales do not occur in the time frame anticipated by these distributors for any reason, these distributors may substantially decrease the amount of product they order from us in subsequent periods until their inventory levels realign with end-customer demand, which would harm our business and could adversely affect our revenue in such subsequent periods. Our reserve estimates associated with products stocked by our distributors are based largely on reports that our distributors provide to us on a weekly or monthly basis. To date, we believe this resale and channel inventory data has been generally accurate. To the extent that this data are inaccurate or not received in a timely manner, we may not be able to make reserve estimates for future periods accurately or at all.

We do not always have a direct relationship with the end customers of our products sold through distributors. As a result, our products may be used in applications for which they were not necessarily designed or tested, including, for example, medical devices, and they may not perform as anticipated in such applications. In such event, failure of even a small number of parts could result in significant liabilities to us, damage our reputation and harm our business and results of operations.

Our effective tax rates may be adversely affected by reorganization or restructuring of our businesses or assets, changes in our corporate or debt financing structure, jurisdictional revenue mix, changes in tax regulations or policy and the outcome of tax audits and examinations, which could materially, adversely affect financial results.

~~Our provision for income taxes~~ is subject to ~~volatility~~significant downturns.

The semiconductor industry is highly cyclical and ~~could be adversely affected~~is characterized by ~~numerous factors including:~~

~~reorganization or restructuring of our businesses, tangible~~constant and ~~intangible assets, outstanding indebtedness~~rapid technological change and ~~corporate structure;~~

~~jurisdictional mix of our income~~price erosion, evolving technical standards, frequent new product introductions, short product life cycles (for semiconductors and ~~assets, and the resulting tax effects of differing tax rates in different countries;~~

~~repatriation of earnings;~~

~~changes in the allocation of income and expenses, including adjustments related to changes in our corporate structure, acquisitions or tax law;~~

~~changes in transfer pricing rules or methods of applying these rules;~~

~~changes in tax laws, changes to the taxation of earnings of non-U.S. subsidiaries, the deductibility of expenses attributable to non-U.S. income and U.S. foreign tax credit rules;~~

~~tax effects of increases in non-deductible employee compensation;~~

~~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.~~

We have historically fully utilized and reinvested a portion of our foreign cash to fund our foreign operation. This determination is required to be made annually, however, we do not currently intend to indefinitely reinvest in our operations outside Singapore. As a result, the amount of our income taxes payable could increase materially and consume a significant amount of our cash as earnings from our subsidiaries are repatriated to Singapore through our corporate structure. In addition, our provision for ~~income taxes in future periods is likely to change as a result~~many of the ~~impact of internal restructuring and reorganizations, in particular as a result of the Broadcom Transaction, which would also affect our overall effective tax rate.~~

~~We have also adopted transfer-pricing policies between our affiliated entities. Our policies call for the provision of services, the sale of~~end products and licenses from one affiliate to another at prices that we believe are negotiated on an arm’s length basis. Our taxable income in any jurisdiction is dependent upon acceptance of our operational practices and intercompany transfer pricing by local tax authorities as being on an arm’s length basis. Due to inconsistencies in application of the arm’s length standard among taxing authorities, as well as lack of adequate treaty-based protection, transfer pricing challenges by tax authorities could, if successful, result in adjustments for prior or future tax years. As a result of these adjustments, we could become subject to higher taxes and our earnings and results of operations would be adversely affected in any period in which ~~such determination is made.~~

~~Although we believe our tax estimates~~they are ~~reasonable, there is no assurance that the final determination of our income tax liability will not be materially different than what is reflected~~used) and wide fluctuations in ~~our income tax provisions~~product supply and accruals. Significant judgment is required to determine the recognition and measurement of tax liabilities prescribed in the relevant accounting guidance for uncertainty in income taxes. The accounting guidance for uncertainty in income taxes applies to all income tax positions, which, if settled unfavorably, could adversely impact our provision for income taxes.

In addition, we are subject to, and are under, audit in various jurisdictions, and such jurisdictions may assess additional income tax against us. Although we believe our tax positions are reasonable, the final determination of tax audits could be materially different from our income tax provisions and accruals. The ultimate results of an audit could have a material adverse effect on our results of operations and cash flows in the period or periods for which that determination is made.

The enactment of legislation implementing changes in U.S. taxation of international business activities, the adoption of other tax reform policies or changes in tax legislation or policies in jurisdictions outside the U.S. could materially impact our financial position and results of operations.

~~Tax bills are introduced from~~demand. From time to time, ~~to reform U.S. taxation of international business activities. The Organisation for Economic Co-operation and Development, or OECD, also recently released guidance covering various topics, including~~

country-by-country reporting, definitional changes to permanent establishment and guidelines in determining arm’s length transfer pricing. This guidance is collectively referred to as Base Erosion and Profit Shifting, or BEPS, an initiative that aims to standardize and modernize global tax policy. Depending on legislation ultimately enacted in connectionthese factors, together with this guidance, there may be significant consequences for us due to the large scale of our international business activities. For example, adoption of BEPS by foreign jurisdictions in which we operate could result in changes to tax policies, including transfer-pricing policies that could ultimately impact our tax liabilities to foreign jurisdictions. If any of these proposals are enacted into legislation, or if other international, consensus-based tax policies and principles are amended or implemented, they could have material adverse consequences on the amount of tax we pay and thereby on our financial position and results of operations.

In addition, policies regarding corporate income taxes in numerous jurisdictions are under heightened scrutiny. As a result, decisions by tax authorities regarding treatments and positions of corporate income taxes could be subject to legislative investigation and inquiry, which could result in changes in ~~tax policies or prior tax rulings. There can be no assurance as to the outcome of these investigations~~general economic conditions, cause significant upturns and ~~inquiries. As such, the taxes we previously paid may be subject to change and our taxes may increase~~downturns in the ~~future, which could~~industry in general, and in our business in particular. Periods of industry downturns have been characterized by diminished demand for end-user products, high inventory levels and periods of inventory adjustment, under-utilization of manufacturing capacity, changes in revenue mix and accelerated erosion of average selling prices, resulting in an adverse effect on our business, financial condition and results of operations. We expect our business to continue to be subject to cyclical downturns even when overall economic conditions are relatively stable. If we cannot offset industry or market downturns, our net revenue may decline and our financial condition and results of operations ~~financial condition and our corporate reputation.~~may suffer.

We make substantial investments in research and development to ~~improve~~enhance existing and develop new technologies to keep pace with technological advances and to remain competitive in our business, and unsuccessful investments could materially adversely affect our business, financial condition and results of operations.

The semiconductor industry is characterized by rapid technological change, changes in customer requirements, frequent new product introductions and enhancements, short product cycles and evolving industry standards, and requires substantial investment in our research and development in order to develop and bring to market new and enhanced technologies and products. In addition, semiconductor products transition over time to increasingly smaller line width geometries. This requires us to adapt our products and manufacturing processes to these new technologies, which requires expertise in new procedures. Our failure to successfully transition to smaller geometry process technologies could impair our competitive position. In order to remain competitive, we have made, and expect to continue to make, significant investments in research and development. We expect the dollar amount of research and development expenses to increase for the foreseeable future, due to the increasing complexity and number of products we plan to develop. If we fail to develop new and enhanced products and technologies, if we focus on technologies that do not become widely adopted, or if new competitive technologies that we do not ~~support, and which compete with technologies we do~~ support, become widely accepted, demand for our products may be reduced. Significant investments in unsuccessful research and development efforts could materially adversely affect our business, financial condition and results of operations. In addition, increased investments in research and development could cause our cost structure to fall out of alignment with demand for our products, which would have a negative impact on our financial results.

Our business, ~~would be adversely affected by the departure of existing members of oursenior management team.~~

Our success depends, in large part, on the continued contributions of our senior management team, in particular, the services of Mr. Hock E. Tan, our President and Chief Executive Officer. Although we sometimes provide certain retention-based incentives to certain executives, none of our senior management is bound by written employment contracts to remain with us for a specified period. In addition, we do not currently maintain key person life insurance covering our senior management. The loss of any of our senior management could harm our ability to implement our business strategy and respond to the rapidly changing market conditions in which we operate.

~~Our business,~~ financial condition and results of operations could be adversely affected by the political and economic conditions of the countries in which we conduct business and other factors related to our international operations.

WeA majority of our products are produced and sourced in Asia, including China, India, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand, and we sell our products throughout the world. In addition, as of ~~July 31, 2016,~~April 30, 2017, approximately ~~46%~~39% of our employees are located ~~outside the United States.~~in Asia. Multiple factors relating to our international operations and to particular countries in which we operate could have a material adverse effect on our business, financial condition and results of operations. These factors include:

changes in political, regulatory, legal or economic ~~conditions;~~conditions or geopolitical turmoil, including terrorism, war or political or military coups, or civil disturbances or political instability;

restrictive governmental actions, such as restrictions on the transfer or repatriation of funds and foreign investments and trade protection measures, including import/export restrictions, import/export duties and quotas, and customs duties and ~~tariffs;~~tariffs, all of which could increase under the current administration in the United States;

disruptions of capital and trading ~~markets;~~

~~changes in import or export licensing requirements~~markets and ~~the companies required to comply with such 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 product distribution and ~~support.~~support, and transportation delays;

public health or safety concerns;

nationalization of businesses and expropriation of assets; and

changes in tax laws.

A significant legal risk associated with conducting business internationally is compliance with the various and differing laws and regulations, including anti-corruption and anti-bribery laws and regulations, of the countries in which we do business, ~~such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws in China,~~ antitrust and competition laws, data privacy laws and export ~~regulations, including the U.S. Export Administration Regulations.~~regulations. In addition, the anti-corruption laws in various countries are constantly evolving and may, in some cases, conflict with each other. ~~Our~~Although our Code of Ethics and Business Conduct and other policies prohibit us and our employees from ~~offering or giving anything of value to a government official for the purpose of obtaining or retaining business and from~~ engaging in unethical business practices, ~~including kick-backs to or from purely private parties. However,~~ there can be no assurance that all of our employees or agents will refrain from acting in violation of our related anti-corruption policies and procedures. Any such violation could have a material adverse effect on our business.

A majority of our products are produced and sourced in Asia, including in China, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand. We also have personnel in, and conduct business from, India and Israel, areas where we have a limited operating history. Any conflict or uncertainty in these countries, including due to political or civil unrest, public health or safety concerns or natural disasters, could have a material adverse effect on our business, financial condition and results of operations. In addition, if the government of any country in which our products are manufactured or sold sets technical standards for products manufactured in or imported into their country that are not widely shared, it may lead certain of our customers to suspend imports of their products into that country, require manufacturers in that country to manufacture products with different technical standards and disrupt cross-border manufacturing relationships which, in each case, could have a material adverse effect on our business, financial condition and results of operations.

Our business is subject to various governmental regulations, and compliance with these regulations may cause us to incur significant expense. If we fail to maintain compliance with applicable regulations, we may be forced to ~~recall products and~~ cease ~~their~~the manufacture and distribution of certain products, and we could be subject to civil or criminal penalties.

Our business is subject to various ~~significant~~ international ~~and U.S.~~ laws and other legal requirements, including packaging, product content, labor and import/export regulations, and many of our products are regulated or sold into regulated industries, such as the U.S. Export Administration Regulations. These laws and regulations are complex, change frequently, ~~and~~ have generally become more stringent over ~~time.~~time and may intensify under the current administration in the United States. We may be required to incur significant expense to comply with, ~~these regulations~~ or to remedy violations of these regulations. In addition, if our customers fail to comply with these regulations, we may be required to suspend sales to these customers, which could negatively impact our results of operations.

In addition, the manufacture and distribution of our semiconductors must comply with various laws and adapt to changes in regulatory requirements as they occur. For example, ~~on March 8, 2016, the U.S. Department of Commerce added ZTE Corporation, one~~if a country in which our products are manufactured or sold sets technical standards that are not widely shared, it may require us to stop distributing our products commercially until they comply with such new standards, lead certain of our customers to ~~its “Entity List”~~suspend imports of their products into that country, require manufacturers in that country to manufacture products with different technical standards and ~~placed certain export restrictions~~disrupt cross-border manufacturing relationships, any of which could have a material adverse effect on ~~ZTE~~our business, financial condition and ~~its suppliers, which required us~~results of operations. If we fail to ~~suspend sales to ZTE during the pendency of such restrictions. Furthermore, because many of our products are regulated or sold into regulated industries, we must~~ comply with ~~additional regulations in marketing~~these requirements, we could also be required to pay civil penalties or face criminal prosecution. In addition, it is expected that the new U.S. administration’s trade policy will promote U.S. manufacturing and manufacturers. It is unclear what effect this will have on us as a multinational company that conducts business world-wide, or on our ~~products.~~suppliers, customers, contract manufacturers and OEMs.

Our products and operations are also subject to the rules of industrial standards bodies, like the International Standards Organization, as well as regulation by other agencies, such as the U.S. Federal Communications Commission. If we fail to adequately address any of these rules or regulations, our business could be harmed.

We must conform the manufacture and distribution of our semiconductors to comply with various laws and adapt to regulatory requirements in all countries as these requirements change. If we fail to comply with these requirements in the manufacture or distribution of our products, we could be required to pay civil penalties, face criminal prosecution and, in some cases, be prohibited from distributing our products commercially until the products or component substances are brought into compliance.

We are subject to environmental, health and safety laws, which could increase our costs, restrict our operations and require expenditures that could have a material adverse effect on our results of operations and financial condition.

We are subject to a variety of international ~~and U.S.~~ laws and ~~other legal requirements~~regulations relating to the use, disposal, clean-up of and human exposure to, hazardous materials. ~~Any failure by us to comply with environmental, health and safety~~

~~requirements could result in the limitation or suspension of production or subject us to future liabilities in excess of our reserves. In addition, compliance~~Compliance with environmental, health and safety requirements could, among other things, require us to modify our manufacturing processes, restrict our ability to expand our facilities, or require us to acquire ~~costly~~ pollution control equipment, ~~incur other~~all of which can be very costly. Any failure by us to comply with such requirements could result in the limitation or suspension of the manufacture of our products, and could result in litigation against us and the payment of significant ~~expense or modify our manufacturing processes. In~~fines and damages by us in the event of ~~the discovery of new contamination, additional requirements~~a significant adverse judgment. In addition, complying with ~~respect to existing contamination,~~any cleanup or ~~the imposition of other cleanup~~remediation obligations for which we are or become responsible ~~we may~~could be ~~required to take remedial or other measures which could~~costly and have a material adverse effect on our business, financial condition and results of operations.

~~We also face increasing complexity in our product design and procurement operations as we adjust to new~~Changing requirements relating to the materials composition of our products, including the restrictions on lead and certain other substances in electronics that apply to specified electronics products sold in ~~the European Union as of July 1, 2006 under the Restriction of Hazardous Substances in Electrical and Electronic Equipment Directive. Other~~various countries, ~~such as~~including the United States, China, Japan, and ~~Japan, have enacted or may enact laws or regulations similar to~~in the ~~EU legislation. Other environmental regulations~~European Union, increase the complexity and costs of our product design and procurement operations and may require us to re-engineer our ~~products to utilize components that are more environmentally compatible.~~products. Such re-engineering ~~and component substitution~~ may result in excess inventory or other additional costs and could have a material adverse effect on our results of operations.

In addition to the costs of complying with environmental, health and safety requirements, we may in the future incur costs defending against environmental litigation brought by government agencies and private parties. We may be defendants in lawsuits brought by parties in the future alleging environmental damage, personal injury or property damage. A significant judgment against us could harm our business, financial condition and results of operations.

In the last few years, there has been increased media scrutiny and associated reports focusing on a potential link between working in semiconductor manufacturing clean room environments and certain illnesses, primarily different types of cancers. Regulatory agencies and industry associations have begun to study the issue to see if any actual correlation exists. Because we utilize clean rooms, we may become subject to liability claims. In addition, these reports may also ~~affect our ability to recruit and retain employees.~~

~~We cannot predict:~~

~~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~~experience claims ~~including the cost of clean-up of currently unknown environmental conditions, particularly at sites that we may acquire~~from employees from time to ~~time.~~time with regard to exposure to hazardous materials or other workplace related environmental claims.

Social and environmental responsibility regulations, policies and provisions, ~~including, for example, regulations related to “conflict minerals,”~~as well as customer demand, may make our supply chain more complex and may adversely affect our relationships with customers.

There is an increasing focus on corporate social and environmental responsibility in the semiconductor industry, particularly with OEMs that manufacture consumer electronics. A number of our customers have adopted, or may adopt, procurement policies that include social and environmental responsibility provisions that their suppliers should comply with,

or they seek to include such provisions in their procurement terms and conditions. An increasing number of participants in the semiconductor industry are also joining voluntary social responsibility initiatives such as the U.N. Global Compact, a voluntary initiative for businesses to develop, implement and disclose sustainability policies and practices. These social and environmental responsibility provisions and initiatives are subject to change, can be unpredictable, and may be difficult for us to comply with, given the complexity of our supply chain and our significant outsourced manufacturing. If we are unable to comply, or are unable to cause our suppliers or contract manufacturers to comply, with such policies or provisions, a customer may stop purchasing products from us, and may take legal action against us, which could harm our reputation, revenue and results of operations.

We are subject to rules adopted by the SEC requiring us to make disclosures relating to whether certain minerals and metals, known as conflict minerals, used in our products originate from the Democratic Republic of Congo and its adjoining countries, or the DRC Region. In addition, as part of their corporate social and environmental responsibility programs, an increasing number of OEMs are seeking to source products that do not contain ~~conflict~~ minerals sourced from areas where proceeds from the ~~DRC Region.~~sale of such minerals are likely to be used to fund armed conflicts, such as in the Democratic Republic of Congo. This could adversely affect the sourcing, availability and pricing of minerals used in the manufacture of semiconductor devices, including our products. Since our supply chain is complex, we are not currently able to definitively ascertain the origins of all

of these minerals and metals used in our products. As a result, we may face difficulties in satisfying these customers’ demands, which may harm our sales and operating results.

The average selling prices of products in our markets have often decreased rapidly and may do so in the future, which could harm our revenue and gross profit.

The products we develop and sell are used for high volume applications. As a result, the prices of those products have often decreased rapidly. Gross profit on our products may be negatively affected by, among other things, pricing pressures from our customers. In the past, we have reduced the average selling prices of our products in anticipation of future competitive pricing pressures, new product introductions by us or our competitors and other factors. In addition, some of our customer agreements provide for volume-based pricing and product pricing roadmaps, which can also reduce the average selling prices of our products over time. Our ~~gross margin~~margins and financial results will suffer if we are unable to offset any reductions in our average selling prices by increasing our sales volumes, reducing manufacturing costs, or developing new and higher value-added products on a timely basis.

A breach of our security systems may have a material adverse effect on our business.

Our security systems are designed to maintain the physical security of our facilities and protect our customers’, suppliers’ and employees’ confidential information, as well as our own proprietary information. However, we are also dependent on a number of third-party ~~“cloud-based”~~cloud-based and other service providers of critical corporate infrastructure services relating to, among other things, human resources, electronic communication services and certain finance functions, and we are, of necessity, dependent on the security systems of these providers. Accidental or willful security breaches or other unauthorized access by third parties or our employees or contractors of our facilities, our information systems or the systems of our cloud-based or other service providers, or the existence of computer viruses or malware in our or their data or software could expose us to a risk of information loss and misappropriation of proprietary and confidential information, including information relating to our customers and the personal information of our employees. In addition, we have, from time to time, also been subject to unauthorized network intrusions and malware on our own IT networks. Any theft or misuse of confidential, personal or proprietary information as a result of such activities could result in, among other things, unfavorable publicity, damage to our reputation, loss of our trade secrets and other competitive information, difficulty in marketing our products, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties and possible financial obligations for liabilities and damages related to the theft or misuse of such information, as well as fines and other sanctions resulting from any related breaches of data privacy regulations, any of which could have a material adverse effect on our reputation, business, profitability and financial condition. Since the techniques used to obtain unauthorized access or to sabotage systems change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.

We are required to assess our internal control over financial reporting on an annual basis and any adverse findings from such assessment could result in a loss of investor confidence in our financial reports, significant expense to remediate any internal control deficiencies and ultimately have an adverse effect on our share price.

We are required to assess the effectiveness of our internal control over financial reporting annually, as required by Section 404 of the Sarbanes-Oxley Act. Our evaluation of the effectiveness of our internal control over financial reporting as of ~~November 1, 2015~~October 30, 2016 did not include the internal controls of ~~Emulex,~~BRCM, which we acquired in ~~May 2015. For the fiscal year ending 2016, our evaluation of the effectiveness of our internal control over financial reporting will not include the internal controls of BRCM.~~February 2016. Even though, as of ~~November 1, 2015,~~October 30, 2016, we concluded that our internal control over financial reporting (excluding ~~Emulex)~~BRCM) was effective, we need to maintain our processes and systems and adapt them as our business grows and changes, including to reflect our integration of ~~Emulex and~~ BRCM, as well as any future acquisitions we may ~~undertake.~~undertake, including our pending acquisition of Brocade. This continuous process of maintaining and adapting our internal controls and complying with Section 404 is expensive, time consuming and requires significant management attention. We cannot be certain that our internal control measures will continue to provide

adequate control over our financial processes and reporting and ensure compliance with Section 404. Furthermore, as we grow our business or acquire other businesses, our internal controls may become more complex and we may require significantly more resources to ensure they remain effective. Failure to implement required new or improved controls, or difficulties encountered in the implementation of such controls, either in our existing business or in businesses that we have or acquired or may acquire in the future, could harm our operating results or cause us to fail to meet our reporting obligations. If we or our independent registered public accounting firm identify material weaknesses in our internal controls, the disclosure of that fact, even if quickly remedied, may cause investors to lose confidence in our financial statements and the trading price of our ordinary shares may decline.

Remediation of a material weakness could require us to incur significant expenses and if we fail to remedy any material weakness, our financial statements may be inaccurate, our ability to report our financial results on a timely and accurate basis may be adversely affected, our access to the capital markets may be restricted, the trading price of our ordinary shares may

decline, and we may be subject to sanctions or investigation by regulatory authorities, including the SEC or The Nasdaq Global Select Market. We may also be required to restate our financial statements from prior periods.

Our financial condition and results of operations could be adversely affected by employee-benefit related costs and expense.

We sponsor several defined benefit plans and post-retirement medical benefit plans. We are required to make contributions to these plans to comply with minimum funding requirements imposed by laws governing these employee benefit plans. The difference between the obligations and assets of these plans, or the funded status of these plans, is a significant factor in determining our pension expense and the ongoing funding requirements of these plans. Weak economic conditions and related under-performance of asset markets could lead to increased pension and post-retirement benefit expenses. In the United States, we also self-fund our employees’ health benefits. The costs of providing these benefits are unpredictable and have been increasing steadily and significantly in recent years. Also, a significant portion of our employees’ cash compensation is performance-related, based on achievement of annual metrics, which can cause significant fluctuations in our employee compensation expense and in cash flows in the period in which payment occurs. Significant increases in the costs of the benefits we provide to our employees could adversely affect our financial condition and results of operations.

~~We also have defined benefit pension plans under which we are obligated to make future contributions to fund benefits to participants. Most benefit accruals under the plans were frozen in 2009.~~ The projected benefit obligations under these pension plans exceeded the value of the assets of those plans by approximately ~~$459~~$516 million at the end of fiscal year ~~2015.~~2016. We expect to have additional funding requirements ~~with respect to the plans~~ in future years and we may ~~also choose to~~ make additional, voluntary contributions to the plans. Depending on our cash position at the time, any such funding or contributions to our pension plans could impact our operating flexibility and financial position, including adversely affecting our cash flow for the quarter in which they are made.

InFurthermore, in order to reduce the expenses associated with these programs, where practicable, we are seeking to move defined benefit plans to defined contribution plans, or to cash out future retirees not yet receiving benefits, and to replace existing pension obligations with annuities. Any such changes may adversely affect our results of operations, including our profitability and cash flows. Weak economic conditions and related under-performance of asset markets could also lead to an increase in post-retirement benefit expense.

The IRS may not agree that Broadcom Limited should be treated as a foreign corporation for U.S. federal income tax purposes.

A corporation is generally considered a tax resident in the jurisdiction of its organization or incorporation for U.S. federal income tax purposes. Because Broadcom is a Singapore entity, it would generally be classified as a foreign corporation (and, therefore, not a U.S. tax resident) under these rules. Even so, the IRS may assert that we should be treated as a U.S. corporation (and, therefore, a U.S. tax resident) for U.S. federal income tax purposes pursuant to Section 7874 of the Internal Revenue Code of 1986, as amended, or the Code.

Under Section 7874 of the Code, if the former shareholders of BRCM hold 80% or more of the vote or value of the ordinary shares of Broadcom, by reason of their former holding of BRCM common shares (the percentage (by vote and value), of our ordinary shares considered to be held (for purposes of Section 7874 of the Code) by former BRCM shareholders immediately after the Broadcom ~~Transaction~~Merger by reason of holding BRCM common shares is referred to in this disclosure as the “Section 7874 Percentage”), and our expanded affiliated group after the Broadcom Transaction does not have substantial business activities in Singapore relative to our worldwide business activities, Broadcom would be treated as a U.S. corporation for U.S. federal income tax purposes. If the Section 7874 Percentage were determined to be at least 60% (but less than 80%), Section 7874 of the Code would cause Broadcom to be treated as a “surrogate foreign corporation” if we did not have substantial business activities in Singapore relative to our worldwide business activities.

Under current law, Broadcom should not be treated as a U.S. corporation for U.S. federal income tax purposes. However, determining the Section 7874 Percentage is complex and is subject to factual and legal uncertainties, including that such determination takes into account several factors other than the ratio of ownership of our ordinary shares by former BRCM shareholders following the Broadcom ~~Transaction.~~Merger. While we believe the Section 7874 Percentage to be significantly less than 60% (and therefore that Section 7874 should not apply to Broadcom or BRCM), there can be no assurance that the IRS will agree with the position that the Section 7874 Percentage is less than 60%.

If the Section 7874 Percentage were determined to be at least 60% (but less than 80%), several limitations could apply to BRCM. For example, BRCM would be prohibited from using its net operating losses, foreign tax credits or other tax attributes to offset the income or gain recognized by reason of the transfer of property to a foreign related person during the 10-year

period following the Broadcom ~~Transaction~~Merger or any income received or accrued during such period by reason of a license of any property by BRCM to a foreign related person. In addition, the IRS has announced that it will promulgate new rules, which, in that situation, may limit the ability to restructure the non-U.S. members of the BRCM tax group or access cash earned in its non-U.S. subsidiaries. Moreover, in such case, Section 4985 of the Code and rules related thereto would impose an excise tax

on the value of certain stock compensation held directly or indirectly by certain BRCM “disqualified individuals” (including former officers and directors of BRCM) at a rate equal to 15%, but only if gain is otherwise recognized by BRCM shareholders as a result of the Broadcom Transaction.

Risks Relating to Our Indebtedness

Our substantial indebtedness could adversely affect our financial health and our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry ~~expose us to interest rate risk to the extent of our variable rate indebtedness~~ and prevent us from fulfilling our obligations under our indebtedness.

~~In order to fund the Broadcom Transaction~~As of April 30, 2017, our total consolidated indebtedness was $13.7 billion and ~~to refinance our then outstanding term-loan debt,~~ we incurred a substantial amount of indebtedness consisting of an aggregate of $15,628 million in 2016 Term Loans borrowed under and pursuant to the 2016 Credit Agreement. The 2016 Credit Agreement also provides for ourhad approximately $500 million of available borrowing capacity under the 2016 Revolving Credit Facility.~~The borrowers’ obligations under~~ These amounts do not reflect any debt financing that we expect to incur in order to allow us to consummate the ~~2016 Credit Agreement are guaranteed by and are collateralized, subject to certain exceptions, by substantially all of the assets of the Guarantors.~~Brocade Acquisition. Subject to restrictions in the 2016 Credit Agreement and ~~receipt~~in the indenture governing our Senior Notes, or the Indenture, we have the ability to incur a significant amount of ~~commitments, we may incur~~ additional ~~indebtedness.~~indebtedness in the future, in addition to any financing needed for the Brocade Acquisition.

Our substantial indebtedness could have important consequences including:

increasing our vulnerability to adverse general economic and industry conditions;

~~exposing us to interest rate risk to the extent of our variable rate indebtedness, and we do not typically hedge against changes in interest rates;~~

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; and

making it more difficult to borrow additional funds in the future to fund growth, acquisitions, working capital, capital expenditures and other ~~purposes.~~purposes; and

~~The 2016 Term Loans have terms of varying duration with~~exposing us to interest rate risk to the ~~substantial majority thereof becoming due~~extent we incur any variable rate indebtedness, and ~~payable~~we do not typically hedge against changes in ~~2021 and 2023.~~ interest rates.

In addition, the 2016 Credit Agreement ~~contains~~and the Indenture contain customary events of default upon the occurrence of which, after any applicable grace period, the lenders or the noteholders would have the ability to immediately declare the ~~loans~~debt due and payable in whole or in part. In such event, we may not have sufficient available cash to repay such debt at the time it becomes due, or be able to refinance such debt on acceptable terms or at all. ~~Furthermore, our ability to repay our outstanding indebtedness under the 2016 Credit Agreement is dependent upon the receipt of sufficient funds from our subsidiaries.~~ Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

We receive debt ratings from the major credit rating agencies in the United States. Factors that may impact our credit ratings include debt levels, planned asset purchases or sales and near-term and long-term production growth opportunities. Liquidity, asset quality, cost structure, reserve mix and commodity pricing levels could also be considered by the rating agencies. The applicable margins ~~with respect to the Term A Loan and~~on indebtedness incurred under the 2016 ~~Revolving~~ Credit ~~Facility~~Agreement will vary based on the applicable public ratings assigned to the ~~collateralized,~~ long-term indebtedness for borrowed money of our subsidiary, ~~Avago Technologies~~Broadcom Cayman Finance Limited, or Cayman Finance, by Moody’s Investors Service, Inc., Standard & Poor’s Financial Services LLC and any successor to each such rating agency business. A ratings downgrade could adversely impact our ability to access debt markets in the future and increase the cost of current or future ~~debt and may adversely affect our share price.~~debt. Our failure to continuously have a public corporate credit rating from each of Moody’s and Standard & Poor’s may result in a covenant default under the 2016 Credit Agreement.

~~Our 2016 Credit Agreement imposes~~The instruments governing our indebtedness impose significant restrictions on our business.

The 2016 Credit Agreement contains a number of covenants imposing significant restrictions on our business. These restrictions may affect our ability to operate our business, to plan for, or react to, changes in market conditions or our capital needs and may limit our ability to take advantage of potential business opportunities as they arise. The restrictions placed on us include limitations on the ability of our subsidiaries to:

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;

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.

In addition, the 2016 Credit Agreement ~~includes financial covenants requiring our subsidiary, Avago Technologies~~requires Broadcom, the Partnership and Cayman ~~Holdings Ltd,~~Finance to ~~while the Term B-3 Loan remains outstanding,~~ maintain a maximum ~~first lien~~total leverage ratio, at any time the 2016 Revolving Credit Facility (other than undrawn letters of credit, whether or not cash collateralized, and any guarantees and performance or similar bonds issued under the 2016 Revolving Credit Facility) is drawn by more than 35%.ratio. Our ability to meet ~~the~~this financial covenant may be affected by events beyond our control, and we do not know whether we will be able to maintain the ~~applicable~~required maximum ~~first lien~~total leverage ratio.

~~The foregoing restrictions could limit our ability to plan for, or react to, changes in market conditions or our capital needs.~~ We do not know whether we will be granted waivers under, or amendments to, our 2016 Credit Agreement if for any reason we are unable to meet these requirements, or whether we will be able to refinance our indebtedness on terms acceptable to us, or at all.

In addition, the Indenture places limitations on our ability to incur certain secured debt, enter into certain sale and lease-back transactions and consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.

Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.

Our ability to make scheduled payments of the principal of, to pay interest on, and to refinance our debt, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to satisfy our obligations under the 2016 Credit Agreement, the Senior Notes and any future indebtedness we may incur and to make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our outstanding indebtedness or future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms when needed, which could result in a default on our indebtedness.

The trading prices of the Senior Notes may be volatile and can be directly affected by many factors, including our credit rating.

The trading prices of the Senior Notes could be subject to significant fluctuation in response to, among other factors, changes in our operating results, interest rates, the market for debt securities, general economic conditions and securities analysts’ recommendations, if any, regarding our securities.

Credit rating agencies continually revise their ratings for companies they follow, including us. Any ratings downgrade could adversely affect the trading prices of the Senior Notes, or the trading market for the Senior Notes. The condition of the financial and credit markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future and any fluctuation may impact the trading prices of the Senior Notes.

Risks Relating to Investments in Singapore Companies

It may be difficult to enforce a judgment of U.S. courts for civil liabilities under U.S. federal securities laws against us or our directors in Singapore.

~~We are~~Broadcom is incorporated under the laws of the Republic of Singapore, and certain of our directors are resident outside the United States. Moreover, a majority of our consolidated assets are located outside the United States. Although ~~we are~~Broadcom is incorporated outside the United States, we have agreed to accept service of process in the United States through our agent designated for certain purposes. Nevertheless, since a majority of the consolidated assets owned by us are located outside the United States, any judgment obtained in the United States against us may not be collectible within the United States.

There is no ratified treaty between the United States and Singapore providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters and a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon the federal securities laws, would, therefore, not be automatically enforceable in Singapore. There is doubt whether a Singapore court may impose civil liability on usBroadcom or our directors and officers who reside in Singapore in a suit brought in the Singapore courts against us or such persons with respect to a violation solely of the federal securities laws of the United States. Consequently, there can be no assurance as to whether Singapore courts will enter judgments in actions brought in Singapore courts based upon the civil liability provisions of the federal securities laws of the United States.

~~We are~~Broadcom is incorporated in Singapore and our shareholders may have more difficulty in protecting their interest than they would as shareholders of a corporation incorporated in the United States, and we may have more difficulty attracting and retaining qualified board members and executives.

~~Our~~Broadcom’s corporate affairs are governed by ~~our~~its Constitution and by the laws governing corporations incorporated in Singapore. The rights of our shareholders and the responsibilities of the members of our Board, under Singapore law (including under the recently amended Singapore Companies Act) are different from those applicable to a corporation incorporated in the United States. Therefore, our public shareholders may have more difficulty in protecting their interest in connection with actions taken by our management or members of our Board than they would as shareholders of a corporation incorporated in the United States.

In addition, being a public company incorporated in Singapore may make it more expensive for usBroadcom to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board, particularly to serve on committees of our Board, and qualified executive officers.

For a limited period of time, our directors have general authority to allot and issue new ordinary shares on such terms and conditions as may be determined by our Board in its sole discretion.

Under Singapore law, we may only allot and issue new ordinary shares with the prior approval of ~~our~~Broadcom’s shareholders in a general meeting. At our ~~2016~~2017 annual general meeting, ~~our~~Broadcom’s shareholders provided our directors with the general authority to allot and issue any number of new ordinary shares, which will continue in force until the earlier of (i) the conclusion of our annual general meeting in ~~2017,~~2018, (ii) the expiration of the period within which the next annual general meeting is required by law to be held (i.e., within 15 months after the conclusion of the last general meeting) or (iii) the subsequent revocation or modification of such general authority by our shareholders at a duly convened general meeting. Subject to the general authority to allot and issue new ordinary shares provided by our shareholders, the provisions of the Singapore Companies Act and ~~our~~Broadcom’s Constitution, our Board may allot and issue new ordinary shares on such terms and conditions as they may think fit to impose. Any additional issuances of new ordinary shares by our directors may adversely impact the market price of our ordinary shares.

Risks Relating to Owning Our Ordinary Shares

At times, ~~our~~Broadcom’s share price has been volatile and it may fluctuate substantially in the future, which could result in substantial losses for our investors as well as class action litigation against us and our management which could cause us to incur substantial costs and divert our management’s attention and resources.

The trading price of ~~our~~Broadcom ordinary shares has, at times, fluctuated ~~significantly. The trading price of our ordinary shares~~significantly and could be subject to wide fluctuations in response to many of the risk factors listed in this “Risk Factors” section, and ~~others, many~~others. Many of ~~which~~these risks are beyond our control, including:

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;

issuance of ordinary shares upon exchange of Partnership REUs; and

changes in our dividend or share repurchase policies.

These fluctuations are often unrelated or disproportionate to our operating performance. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our ordinary shares. You may not realize any return on your investment in us and may lose some or all of your investment. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. We are also the subject of a number of lawsuits stemming from our acquisitions of PLX and Emulex, and ~~BRCM.~~from our pending acquisition of Brocade. Securities litigation against us, including the lawsuits related to such transactions, could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

A substantial amount of our shares is held by a small number of large investors and significant sales of our ordinary shares in the public market by one or more of these holders could cause our share price to fall.

As of ~~June 30, 2016,~~March 31, 2017, we believe that our ~~five~~two largest shareholders, Capital World Investors and Capital Research Global Investors, hold ~~over 32%~~approximately 20% of ~~our~~Broadcom outstanding ordinary shares in the aggregate. These investors may sell their shares at any time for a variety of reasons ~~including dissatisfaction with our short- or long-term results. These holders may sell their shares at any time~~ and such sales could depress the market price of our ordinary shares, given the large amounts of our shares held by these investors. In addition, entities affiliated with Silver Lake Partners have registration rights with respect to our ordinary shares held by them as a result of their conversion in June 2015 of the Convertible Notes originally issued to them by Avago. Anyany such sales of our ordinary shares by these entities could also impair our ability to raise capital through the sale of additional equity securities.

There can be no assurance that we will continue to declare cash dividends.

Our Board has adopted a dividend policy pursuant to which we currently pay a cash dividend on ~~our~~Broadcom ordinary shares on a quarterly basis. The declaration and payment of any dividend is subject to the approval of our Board and our dividend may be

discontinued or reduced at any time. There can be no assurance that we will declare cash dividends in the future in any particular amounts, or at all. Furthermore, we may declare dividends as interim dividends, which are wholly provisional under Singapore law and may be revoked by our Board at any time prior to the payment thereof.

Future dividends, if any, and their timing and amount, may be affected by, among other factors: management’s views on potential future capital requirements for strategic transactions, including acquisitions; earnings levels; contractual restrictions; cash position and overall financial condition; and changes to our business model. The payment of cash dividends is restricted by applicable law, contractual restrictions and our corporate structure. Pursuant to Singapore law and ~~our~~Broadcom’s Constitution, no dividends may be paid except out of our ~~profits.~~profits or expected profits, based on Singapore accounting standards. Because we are a holding company, our ability to pay cash dividends on ~~our~~Broadcom ordinary shares is also limited by restrictions on our ability to obtain sufficient funds through dividends from subsidiaries, the declaration and payment of which are subject to restrictions under the terms of our 2016 Credit Agreement.

Singapore corporate law may impede a takeover of our company by a third-party, which could adversely affect the value of our ordinary shares.

The Singapore Code on Take-overs and Mergers contains provisions that may delay, deter or prevent a future takeover or change in control of our company for so long as we remain a public company with more than 50 shareholders and net tangible assets of S$5 million or more. Any person acquiring an interest, whether by a series of transactions over a period of time or not, either on their own or together with parties acting in concert with such person, in 30% or more of our voting shares, or, if such person holds, either on their own or together with parties acting in concert with such person, between 30% and 50% (both inclusive) of our voting shares, and such person (or parties acting in concert with such person) acquires additional voting shares representing more than 1% of our voting shares in any six-month period, must, except with the consent of the Securities Industry Council in Singapore, extend a mandatory takeover offer for the remaining voting shares in accordance with the provisions of the Singapore Code on Take-overs and Mergers. While the Singapore Code on Take-overs and Mergers seeks to ensure equality of treatment among shareholders, its provisions may discourage or prevent certain types of transactions involving an actual or threatened change of control of our company. These legal requirements may impede or delay a takeover of our company by a third-party, which could adversely affect the value of our ordinary shares.

Our actual operating results may differ significantly from our guidance.

From time to time, we release guidance regarding our future performance that represents our management’s estimates as of the date of release. This guidance, which consists of forward-looking statements, is prepared by our management and is qualified by, and subject to, the assumptions and the other information contained or referred to in the release. Our guidance is not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither any independent registered public accounting firm nor any other independent expert or outside party compiles, examines or reviews the guidance and, accordingly, no such person expresses any opinion or any other form of assurance with respect thereto.

Guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change. We generally state possible outcomes as high and low ranges which are intended to provide a sensitivity analysis as variables are changed but are not intended to represent that actual results could not fall outside of the suggested ranges. The principal reason that we release this data is to provide a basis for our management to discuss our business outlook with analysts and investors. We do not accept any responsibility for any projections or reports published by any such persons.

Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results, particularly any guidance relating to the results of operations of acquired businesses or companies as our management will, necessarily, be less familiar with their business,

procedures and operations. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release. Actual results will vary from the guidance and the variations may be material. Investors should also recognize that the reliability of any forecasted financial data will diminish the farther in the future that the data ~~is forecasted.~~are forecast. In light of the foregoing, investors are urged to put the guidance in context and not to place undue reliance on it.

Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this Form 10-Q could result in the actual operating results being different than the guidance, and such differences may be adverse and material.

Risks Relating to Restricted Exchangeable Units

~~Holders of Partnership REUs may not transfer, pledge or grant liens on their Partnership REUs for a period of one year following the closing of the Broadcom Transaction.~~

During the restricted period, which will last one year following the effective time of the Broadcom Merger, or the Restricted Period, holders of the Partnership REUs may not sell, transfer, convey, assign, pledge, grant a security interest or other lien, encumber or dispose of (whether directly or indirectly, whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest in any Partnership REUs, except under limited circumstances set forth in the Amended and Restated Exempted Limited Partnership Agreement dated February 1, 2016, among Broadcom, the Partnership and the limited partners, or the Partnership Agreement. Accordingly, any such holder’s investment in the Partnership is illiquid for a period of one year.

~~Holders of Partnership REUs are also prohibited from short sales, hedging and granting liens on their Partnership REUs.~~

Unless otherwise approved in writing by Broadcom, in its sole discretion as our General Partner, during the Restricted Period, holders of Partnership REUs may not be a party to or participate, directly or indirectly, in any short sale, forward contract to sell, option or forward contract to purchase, swap or other hedging, synthetic, “put” equivalent or similar derivative instrument or transaction that transfers, in whole or in part, any of the economic consequences of ownership of the Partnership REUs or any Broadcom ordinary shares, whether settled in cash or securities. Holders of Partnership REUs are subject to and are required to comply with the restrictions, terms and conditions of the Partnership REUs as set forth in the Partnership Agreement. In the event of a breach by a holder of the hedging restrictions in the Partnership Agreement, the Restricted Period applicable to such holder’s Partnership REUs will be extended by two years.

~~An active trading market for Partnership REUs is not expected to develop.~~

The Partnership REUs are not listed on a national exchange in the United States or on a foreign exchange. An active public market for the Partnership REUs is not expected to develop. In addition, although the Partnership REUs are registered under the Exchange Act, our General Partner is under no obligation to continue such registration and is authorized to deregister the Partnership REUs at any time such registration is not legally required. As a result, even after the Restricted Period has concluded, it will be very difficult to sell the Partnership REUs at a price that is attractive, or at all.

~~Future sales of Broadcom ordinary shares in the public market could cause the value of Partnership REUs to fall.~~

Sales of a substantial number of Broadcom ordinary shares in the public market, or the perception that these sales might occur, could depress the value of the Partnership REUs because the value of the Partnership REUs is derivative of the value of Broadcom ordinary shares. During the Restricted Period, holders of Partnership REUs may not sell such units to mitigate losses under such circumstances.

The exchange of the Partnership REUs into Broadcom ordinary shares is subject to significant restrictions, including the right of Broadcom in its sole discretion to cause the Partnership to repurchase such Partnership REUs for cash instead of Broadcom ordinary shares.

~~Under the terms~~As of ~~the Partnership Agreement, the~~February 1, 2017, holders of Partnership REUs, ~~are not exchangeable for Broadcom ordinary shares for a period of up to three years following the closing of the Broadcom Transaction.~~

~~From and after the end of the Restricted Period, which will last one year following the effective time of the Broadcom Merger, holders of the Partnership REUs are entitled,~~or Limited Partners, may, subject to compliance with the procedures set forth in the Partnership’s amended and restated exempted limited partnership agreement, as amended from time to time, or the Partnership Agreement, to require the Partnership to repurchase all or any portion of such ~~holder’s~~Limited Partner’s Partnership REUs in exchange for Broadcom ordinary shares, at a ratio of one Broadcom ordinary share for each Partnership REU, or the Exchange Right. However, Broadcom, in its sole discretion as ~~our~~ General Partner, has the right to cause the Partnership to repurchase the Partnership REUs for cash (in an amount determined in accordance with the terms of the Partnership Agreement based on the market price of Broadcom ordinary shares) in lieu of Broadcom ordinary shares. ~~The ability~~Although we are currently issuing Broadcom ordinary shares upon exchange of Partnership REUs, Broadcom, in its sole discretion as ~~our~~ General Partner, may choose to cause the Partnership to repurchase the Partnership REUs for cash at any time and without notice. The payment of cash upon exchange of Partnership REUs could result in, among other things, tax consequences that differ from those that would have resulted if the holder of such Partnership REUs had received Broadcom ordinary shares.

In addition, prior to the third anniversary following the effective time of the Broadcom Merger, it is a condition precedent to the obligation of the Partnership to repurchase such Partnership REUs, and the holder of such Partnership REUs shall not be permitted to exercise the Exchange Right, unless (i) Broadcom has received a written opinion from an independent nationally recognized law or accounting firm that the Exchange Right should not cause Broadcom to be treated as (a) a “surrogate foreign corporation” (within the meaning of Section 7874(a)(2)(B) of the ~~Code )~~Code) or (b) a “domestic corporation” (within the meaning of Section 7874(b) of the Code) and (ii) Broadcom’s independent auditor has determined that no reserve shall be required for

financial accounting purposes relating to Section 7874 of the Code as a result of the exercise of such Exchange Right. NoAlthough Limited Partners are currently permitted to exercise their Exchange Rights, no assurance can be provided as to whether or not such determinations will be ~~obtainable.~~obtainable in the future.

The exchange of Partnership REUs is a U.S. taxable event.

The exchange of Partnership REUs will be treated for U.S. tax purposes as a taxable sale of the Partnership REUs by the Limited Partner making the exchange. A Limited Partner will recognize gain or loss for U.S. income tax purposes in an amount equal to the fair market value of our ordinary shares or the cash amount received in the exchange, plus the amount of the Partnership’s liabilities allocable to the Partnership REUs being exchanged, less the Limited Partner’s adjusted tax basis in the Partnership REUs exchanged. The recognition of any loss resulting from an exchange of Partnership REUs is subject to a number of limitations set forth in the Code. It is possible that the amount of gain recognized or even the tax liability resulting from the gain could exceed the value of our ordinary shares or cash amount received upon the exchange. In addition, a Limited Partner may have difficulty finding buyers for a substantial number of ordinary shares in order to raise cash to pay tax liabilities associated with the exchange of their Partnership REUs and may not receive a price for the ordinary shares equal to the value of the Partnership REUs at the time of the exchange.

An active trading market for Partnership REUs is not expected to develop.

The Partnership REUs are not listed on a national exchange in the United States or on a foreign exchange. An active public market for the Partnership REUs is not expected to develop. In addition, although the Partnership REUs are registered under the Exchange Act, Broadcom, as General Partner, is under no obligation to continue such registration and is authorized to deregister the Partnership REUs at any time such registration is not legally required. As a result, it will be very difficult to sell the Partnership REUs at a price that is attractive, or at all.

Future sales of Broadcom ordinary shares in the public market could cause the value of Partnership REUs to fall.

The value of the Broadcom ordinary shares received in any exchange of the Partnership REUs, or the cash amount to be paid by us in lieu thereof, may fluctuate.

The value of the Broadcom ordinary shares into which the Partnership REUs may be exchanged, or the cash amount to be paid by the Partnership in lieu thereof, may be subject to significant fluctuations for many reasons.

Consequently, due to these potential fluctuations in value of Broadcom ordinary shares, at the time that the Exchange Right ~~becomes exercisable,~~is exercised, the Broadcom ordinary shares into which Partnership REUs may be exchanged, or the cash amount to be paid ~~by the Partnership~~ in lieu thereof, may have a value that differs from the value of Broadcom ordinary shares as of the effective time of the Broadcom Merger. Also see “At times, ~~our~~Broadcom’s share price has been volatile and it may fluctuate substantially in the future, which could result in substantial losses for our investors as well as class action litigation against us and our management which could cause us to incur substantial costs and divert our management’s attention and resources” regarding fluctuations in the value of Broadcom ordinary shares.

There can be no assurance that the Partnership will continue to declare cash distributions.

Pursuant to the terms of the Partnership Agreement, ~~our~~Broadcom, as General Partner, and our Limited Partners are entitled to receive distributions from the Partnership if and when Broadcom pays dividends to holders of its ordinary shares. There can be no assurance that Broadcom will declare cash dividends in the future in any particular amounts, or at all. Also see “There can be no assurance that we will continue to declare cash dividends” regarding factors that may affect the timing and amount of dividends paid by Broadcom.

In certain circumstances, a Limited Partner may lose its limited liability status.

The Exempted Limited Partnership Law, 2014 of the Cayman Islands, as amended and any successor to such statute, or the Cayman Islands Limited Partnerships Act, provides that a limited partner with the benefits of limited liability unless, in addition to exercising rights and powers as a limited partner, such limited partner takes part in the control or conduct of the business of a limited partnership of which such limited partner is a partner (subject to certain qualifications and exceptions). Subject to the provisions of the Cayman Islands Limited Partnerships Act and of similar legislation in other jurisdictions, the liability of each limited partner for the debts, liabilities and obligations of the Partnership will be limited to the limited partner’s capital contribution, plus the limited partner’s share of any undistributed income of the Partnership. However, pursuant to the Cayman Islands Limited Partnerships Act, where a limited partner has received a payment representing the return of all or part of that limited partner’s capital contribution or is released from any outstanding obligation in respect of his commitment and, at the time that payment was made or release effected, (i) the limited partnership is insolvent; and (ii) the limited partner had actual knowledge of the insolvency of the limited partnership, then for a period of six months, but not thereafter, such limited partner would be liable to the Partnership or, where the Partnership is dissolved, to its creditors, to repay such payment or perform the released obligation with interest to the extent that such contribution or part thereof is, necessary to discharge the liabilities of the Partnership to all creditors who extended credit or whose claims otherwise arose before the return of the capital contribution.

The limitation of liability conferred under the Cayman Limited Partnerships Act may be ineffective outside the Cayman Islands except to the extent it is given extra-territorial recognition or effect by the laws of other jurisdictions. There may also be requirements to be satisfied in each jurisdiction to maintain limited liability. If limited liability is lost, limited partners may be considered to be general partners (and therefore be subject to unlimited liability) in such jurisdiction by creditors and others having claims against the Partnership.

Under certain circumstances, the voting rights of the Partnership REUs will be limited.

Each holder of Partnership REUs has the benefit of a voting trust agreement dated February 1, 2016, among the Partnership, Broadcom and the voting trustee, or the Voting Trust Agreement. Pursuant to the terms of the Voting Trust Agreement, the voting trustee holds non-economic voting preference shares of Broadcom, or Special Voting Shares, that entitle the voting trustee to a number of votes equal to the number of votes that would attach to the Broadcom ordinary shares receivable upon the exchange of the Partnership REUs as of the record date of a Broadcom shareholder meeting. Holders of Partnership REUs are entitled to direct the voting trustee under the Voting Trust Agreement to vote the number of Special Voting Shares equal to the number of Partnership REUs held by such holder in substantially all votes that are presented to the holders of Broadcom ordinary shares. However, in the event that, under applicable law, any matter requires the approval of the holder of record of a Special Voting Share, voting separately as a class, the Voting Trust Agreement restricts the ability of holders of Partnership REUs to exercise such voting rights.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~There were no sales of unregistered securities during the fiscal quarter ended July 31, 2016.~~

~~Issuer Repurchases of Equity Securities~~

~~There were no share repurchases during the fiscal quarter ended July 31, 2016.~~None

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

The exhibits listed in the Exhibit Index immediately preceding the exhibits are filed with or incorporated by reference into this Form 10-Q.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	BROADCOM LIMITED
	By:	/s/ Thomas H. Krause, Jr.
		Thomas H. Krause, Jr.
		~~Acting~~Vice President and Chief Financial Officer ~~and Vice President, Corporate Development~~



	BROADCOM CAYMAN L.P. by Broadcom Limited, its General Partner
	By:	/s/ Thomas H. Krause, Jr.
		Thomas H. Krause, Jr.
		~~Acting~~Vice President and Chief Financial Officer ~~and Vice President, Corporate Development~~

Date: ~~September~~June 8, ~~2016~~2017

EXHIBIT INDEX



		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., Avago Technologies Limited, 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

2.2#	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

2.3#	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

~~2.4#~~2.4	Amendment No. 1 to Agreement and Plan of Merger, dated July 29, 2015, by and between Avago Technologies Limited and Broadcom Corporation.	Avago Technologies Limited Current Report on Form 8-K (Commission File No. 001-34428).	July 31, 2015

2.5#	Agreement and Plan of Merger, dated November 2, 2016, by and among Brocade Communications Systems, Inc., Broadcom Limited, Broadcom Corporation and Bobcat Merger Sub, Inc.	Broadcom Limited Current Report on Form 8-K/A (Commission File No. 001-37690)	November 2, 2016

3.1	Constitution of Broadcom Limited	Broadcom Limited Current Report on Form 8-K12B (Commission File No. 001-37690).	February 2, 2016

3.2	Amended and Restated Exempted Limited Partnership Agreement of Broadcom Cayman L.P. (f/k/a Safari Cayman L.P.), dated February 1, 2016	Broadcom Limited Current Report on Form 8-K12B (Commission File No. 001-37690)	February 2, 2016

3.3	Voting Trust Agreement, dated as of February 1, 2016, by and among Broadcom Limited, Broadcom Cayman L.P. and Computershare Trust Company, N.A., as Trustee	Broadcom Limited Current Report on Form 8-K12B (Commission File No. 001-37690)	February 2, 2016

4.1	Form of Specimen Share Certificate for Registrant’s Ordinary Shares.	Broadcom Limited Registration Statement on Form S-3 (Commission File No. 333-209923)	March 4, 2016



		~~Incorporated by Reference Herein~~
~~Exhibit Number~~	~~Description~~	~~Form~~	~~Filing Date~~	~~Filed Herewith~~
~~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~~	~~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~~	~~Form of Indemnification Agreement (Directors) (effective June 1, 2016)~~	~~Broadcom Limited Quarterly Report on Form 10-Q (Commission File No. 001-37690)~~	~~June 9, 2016~~

~~10.2~~	~~Form of Indemnification Agreement (Officers) (effective June 1, 2016)~~	~~Broadcom Limited Quarterly Report on Form 10-Q (Commission File No. 001-37690)~~	~~June 9, 2016~~

~~10.3~~	~~Performance Share Unit Award Agreement, dated June 15, 2016, between the Company and Hock E. Tan~~	~~Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)~~	~~June 16, 2016~~

~~10.4~~	Second Incremental Term A Facility Amendment, dated as of August 2, 2016, to the Credit Agreement among Avago Technologies Cayman Holdings Ltd., Avago Technologies Cayman Finance Limited, BC Luxembourg S.à r.l., Bank of America, N.A., as administrative agent and the lenders party thereto.	~~Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)~~	~~August 3, 2016~~

~~10.5~~	First Amendment, dated as of August 2, 2016, to the Credit Agreement among Avago Technologies Cayman Holdings Ltd., Avago Technologies Cayman Finance Limited, BC Luxembourg S.à r.l., Bank of America, N.A., as administrative agent and the lenders party thereto.	~~Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)~~	~~August 3, 2016~~

~~10.6~~	Second Amendment, dated as of August 2, 2016, to the Credit Agreement among Avago Technologies Cayman Holdings Ltd., Avago Technologies Cayman Finance Limited, BC Luxembourg S.à r.l., Bank of America, N.A., as administrative agent and the lenders party thereto.	~~Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)~~	~~August 3, 2016~~

~~31.1~~	~~Certification of Principal Executive Officer of Broadcom Limited 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



		Incorporated by Reference Herein
Exhibit Number	Description	Form	Filing Date	Filed Herewith

4.2	Indenture, dated as of January 19, 2017, by and among the Broadcom Corporation and Broadcom Cayman Finance Limited (“Co-Issuers”), the Company, Broadcom Cayman L.P., and BC Luxembourg S.à r.l. (the “Guarantors”) and Wilmington Trust, National Association, as trustee.	Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)	January 20, 2017

4.3	Form of 2.375% Senior Note due 2020 (included in Exhibit 4.2).	Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)	January 20, 2017

4.4	Form of 3.000% Senior Note due 2022 (included in Exhibit 4.2).	Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)	January 20, 2017

4.5	Form of 3.625% Senior Note due 2024 (included in Exhibit 4.2).	Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)	January 20, 2017

4.6	Form of 3.875% Senior Note due 2027 (included in Exhibit 4.2).	Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)	January 20, 2017

4.7	Registration Rights Agreement, dated as of January 19, 2017, by and among the Co-Issuers, the Guarantors and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Barclays Capital Inc., as representatives of the several initial purchasers of the Senior Notes.	Broadcom Limited Current Report on Form 8-K (Commission File No. 001-37690)	January 20, 2017

10.1+	Form of Performance Share Unit Agreement (Relative TSR) under Avago Technologies Limited 2009 Equity Incentive Plan.	Broadcom Limited Quarterly Report on Form 10-Q (Commission File No. 001-37690)	March 9, 2017

10.2+	Form of Performance Share Unit Agreement (Relative TSR) under Broadcom Corporation 2012 Stock Incentive Plan.	Broadcom Limited Quarterly Report on Form 10-Q (Commission File No. 001-37690)	March 9, 2017

31.1	Certification of Principal Executive Officer of Broadcom Limited 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



		Incorporated by Reference Herein
Exhibit Number	Description	Form	Filing Date	Filed Herewith
31.2	Certification of Principal Financial Officer of Broadcom Limited 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~~2002.			X

31.3	Certification of Principal Executive Officer for Broadcom Cayman L.P. 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~~2002.			X

31.4	Certification of Principal Financial Officer for Broadcom Cayman L.P. 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~~2002.			X

32.1	Certification of Principal Executive Officer of Broadcom Limited Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.			X

32.2	Certification of Principal Financial Officer of Broadcom Limited Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.			X

32.3	Certification of Principal Executive Officer for Broadcom Cayman L.P. Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.			X

32.4	Certification of Principal Financial Officer for Broadcom Cayman L.P. Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~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



#	Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Broadcom Limited hereby undertakes to furnish supplementally copies of any omitted schedules upon request by the SEC.
+	Indicates a management contract or compensatory plan or arrangement.
*	~~Certain information omitted pursuant to a request for confidential treatment filed with the SEC.~~

8070



	Ordinary Shares			Non-Economic Voting Preference Shares			Retained Earnings			Accumulated Other Comprehensive Loss			Non-controlling Interest			Total Shareholders’ Equity
	Shares	Amount		Shares	Amount		Retained Earnings			Accumulated Other Comprehensive Loss			Non-controlling Interest			Total Shareholders’ Equity
Balance as of November 1, 2015	276	$	2,547	—	$	—	$	2,240		$	(73	)	$	—		$	4,714
Issuance of ordinary shares upon the acquisition of Broadcom Corporation	112	15,438		—	—		—			—			—			15,438
Issuance by the Partnership of restricted exchangeable partnership units upon the acquisition of Broadcom Corporation	—	—		—	—		—			—			3,140			3,140
Issuance of non-economic voting preference shares	—	—		23	—		—			—			—			—
Issuance of ordinary shares in connection with equity incentive plans	8	217		—	—		—			—			—			217
Share-based compensation	—	474		—	—		—			—			—			474
Excess tax benefits from share-based compensation	—	68		—	—		—			—			—			68
Cash dividends paid to ordinary shareholders	—	—		—	—		(514		)	��			—			(514		)
Cash distribution paid by the Partnership on restricted exchangeable partnership units	—	—		—	—		—			—			(23		)	(23		)
Fair value of partially vested equity awards assumed in connection with the acquisition of Broadcom Corporation	—	182		—	—		—			—			—			182
Changes in accumulated other comprehensive loss:
Gains on defined benefit pension plans and post-retirement plans	—	—		—	—		—			1			—			1
Net loss	—	—		—	—		(1,107		)	—			(86		)	(1,193		)
Balance as of July 31, 2016	396	$	18,926	23	$	—	$	619		$	(72	)	$	3,031		$	22,504



	Partnership REUs				Partnership Common Units				Ordinary Shares					Retained Earnings			Accumulated Other Comprehensive Loss			Total
	Units	Amount			Units	Amount			Shares		Amount			Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balance as of November 1, 2015	—	$	—		—	$	—		276		$	2,547		$	2,240		$	(73	)	$	4,714
Issuance of ordinary shares in connection with equity incentive plans	—	—			—	—			2		72			—			—			72
Share-based compensation	—	—			—	417			—		57			—			—			474
Excess tax benefits from share-based compensation	—	—			—	45			—		23			—			—			68
Cash dividends paid to ordinary shareholders	—	—			—	—			—		—			(122		)	—			(122		)
Transfer to General Partner	—	—			278	5,194			(278	)	(2,699		)	(2,495		)	—			—
Issuance of common partnership units upon the acquisition of Broadcom Corporation	—	—			112	15,438			—		—			—			—			15,438
Issuance of restricted exchangeable partnership units upon the acquisition of Broadcom Corporation	23	3,140			—	—			—		—			—			—			3,140
Cash distribution paid to unit holders	—	(23		)	—	(392		)	—		—			—			—			(415		)
Capital transactions with General Partner	—	—			—	327			—		—			—			—			327
Changes in accumulated other comprehensive loss:
Gains on defined benefit pension plans and post-retirement plans	—	—			—	—			—		—			—			1			1
Net income (loss)	—	(86		)	—	(1,484		)	—		—			377			—			(1,193		)
Balance as of July 31, 2016	23	$	3,031		390	$	19,545		—		$	—		$	—		$	(72	)	$	22,504



Cash for outstanding BRCM common stock	$	16,798
Fair value of Broadcom ordinary shares issued for outstanding BRCM common stock	15,438
Fair value of Partnership REUs issued for outstanding BRCM common stock	3,140
Fair value of partially vested assumed restricted stock unit awards	182
Cash for vested BRCM equity awards	137
Effective settlement of pre-existing relationships	11
Total purchase consideration	35,706
Less: cash acquired	6,948
Total purchase consideration, net of cash acquired	$	28,758



	Estimated Fair Value
Trade accounts receivable	$	669
Inventory	1,853
Assets held-for-sale	833
Other current assets	194
Property, plant and equipment	889
Goodwill	23,076
Intangible assets	14,808
Other long-term assets	121
Total assets acquired	42,443
Accounts payable	(559		)
Employee compensation and benefits	(104		)
Current portion of long-term debt	(1,475		)
Other current liabilities	(791		)
Long-term debt	(139		)
Other long-term liabilities	(10,617		)
Total liabilities assumed	(13,685		)
Fair value of net assets acquired	$	28,758



	Approximate Fair Value (in millions)		Weighted-Average Amortization Periods (in years)
Developed technology	$	9,010	6
Customer contracts and related relationships	2,703		2
Order backlog	750		< 1
Trade name	350		17
Other	45		16
Total identified finite-lived intangible assets	12,858
In-process research and development	1,950		N/A
Total identified intangible assets, net of assets held-for-sale	14,808
Intangible assets included in assets held-for-sale	320
Identified intangible assets	$	15,128



Description	IPR&D		Percentage of Completion		Estimated Cost to Complete		Expected Release Date (by fiscal year)
Set-top box solutions	$	90	56	%	$	90	2016 - 2017
Broadband carrier access solutions	390		34		376		2016 - 2018
Carrier switch solutions	270		51		255		2016 - 2019
Compute and connectivity solutions	170		61		136		2016 - 2018
Physical layer product solutions	190		51		71		2016 - 2019
Wireless connectivity combo solutions	770		57		364		2016 - 2018
Touch controllers	70		39		21		2016 - 2017



	Market-Based Awards
	Fiscal Quarter Ended				Three Fiscal Quarters Ended
	July 31, 2016		August 2, 2015		July 31, 2016		August 2, 2015
Risk-free interest rate	0.8	%	1.4	%	1.2	%	1.4	%
Dividend yield	1.3	%	1.1	%	1.3	%	1.2	%
Volatility	35.0	%	35.0	%	35.0	%	36.0	%
Expected term (in years)	3.0		4.0		3.8		4.4



	Number Outstanding		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Balance as of November 1, 2015	21		$	47.92
Exercised	(4	)	44.01
Cancelled	(1	)	52.66
Balance as of July 31, 2016	16		48.73		3.97	$	1,763
Fully vested as of July 31, 2016	9		41.94		3.60	1,100
Fully vested and expected to vest as of July 31, 2016	16		48.73		3.97	1,763



	Number Outstanding		Weighted- Average Grant Date Fair Market Value		Weighted- Average Remaining Contractual Life (in years)
Balance as of November 1, 2015	5		$	95.17
Assumed in Broadcom Merger	6		135.58
Granted	12		137.97
Vested	(3	)	112.08
Forfeited	(2	)	129.13
Balance as of July 31, 2016	18		130.26		1.82



	Amount Outstanding Immediately Prior to August 2016 Amendments		Amount Outstanding Immediately After August 2016 Amendments		Applicable Margins^†
Term A Loans	$	4,666	$	7,187	Variable based on applicable credit rating. Unchanged by August 2016 Amendments
Term B-1 Loans	9,116		—		Eurocurrency Loans: 3.5%, Base Rate Loans: 2.5%. LIBOR floor of 0.75%.^(a)
Term B-3 Loans	—		6,595		Eurocurrency Loans: 3.0%, Base Rate Loans: 2.0%. No LIBOR floor. ^(b)
Total 2016 Term Loans	$	13,782	$	13,782



	Balances at		Balances acquired and assumed from BRCM on		Balances at		Non-BRCM acquisition
	November 1, 2015		February 1, 2016		July 31, 2016		Increase (Decrease)
Trade accounts receivable, net	$	1,019	$	669	$	2,181	$	493
Inventory	524		1,853		1,306		(1,071		)
Assets held-for-sale	22		833		246		(609		)
Other current assets	372		194		354		(212		)
Other long-term assets	345		121		528		62
Accounts payable	617		559		1,127		(49		)
Employee compensation and benefits	250		104		424		70
Other current liabilities	206		791		843		(154		)
Other long-term liabilities	381		10,617		10,671		(327		)