Condensed Consolidating Financial Information | Condensed Consolidating Financial Information In connection with the Exchange Offer, we are required to provide certain financial information regarding the Parent Guarantor, the Subsidiary Guarantor, the Subsidiary Issuers and our other subsidiaries, collectively, the Non-Guarantor Subsidiaries. The following information sets forth the condensed consolidating financial information as of May 6, 2018 and October 29, 2017 and for the fiscal quarter and two fiscal quarters ended May 6, 2018 and April 30, 2017 for the Parent Guarantor, the Subsidiary Guarantor, the Subsidiary Issuers, and the Non-Guarantor Subsidiaries. Investments in subsidiaries are accounted for under the equity method; accordingly, entries necessary to consolidate the Parent Guarantor, the Subsidiary Guarantor, the Subsidiary Issuers and the Non-Guarantor Subsidiaries are reflected in the eliminations column. In the opinion of management, separate complete financial statements of the Subsidiary Issuers would not provide additional material information that would be useful in assessing their financial composition. See Note 6 . “ Borrowings ” for more information regarding the 2017 Senior Notes and changes in guarantors resulting from the Redomiciliation Transaction. We have applied the impacts from the Redomiciliation Transaction and the change in guarantors retrospectively to all periods presented. Condensed Consolidating Balance Sheet May 6, 2018 Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In millions) ASSETS Current assets: Cash and cash equivalents $ — $ 495 $ 5,913 $ 1,779 $ — $ 8,187 Trade accounts receivable, net — — — 2,749 — 2,749 Inventory — — — 1,235 — 1,235 Intercompany receivable 10 6 1,693 1,393 (3,102 ) — Intercompany loan receivable — — 1,320 2,554 (3,874 ) — Other current assets — — 37 266 — 303 Total current assets 10 501 8,963 9,976 (6,976 ) 12,474 Long-term assets: Property, plant and equipment, net — — 241 2,479 — 2,720 Goodwill — — 1,360 25,548 — 26,908 Intangible assets, net — — — 12,346 — 12,346 Investment in subsidiaries 32,405 32,413 35,187 96,595 (196,600 ) — Intercompany loan receivable, long-term — — 43,565 937 (44,502 ) — Other long-term assets — — 27 461 — 488 Total assets $ 32,415 $ 32,914 $ 89,343 $ 148,342 $ (248,078 ) $ 54,936 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 2 $ 22 $ 38 $ 774 $ — $ 836 Employee compensation and benefits — — 137 280 — 417 Current portion of long-term debt — — 117 — — 117 Intercompany payable 346 463 1,158 1,135 (3,102 ) — Intercompany loan payable — — 2,554 1,320 (3,874 ) — Other current liabilities — — 677 77 — 754 Total current liabilities 348 485 4,681 3,586 (6,976 ) 2,124 Long-term liabilities: Long-term debt — — 17,444 37 — 17,481 Deferred tax liabilities — — 5 261 — 266 Intercompany loan payable, long-term — 21 915 43,566 (44,502 ) — Unrecognized tax benefits — — 1,941 759 — 2,700 Other long-term liabilities — — 163 135 — 298 Total liabilities 348 506 25,149 48,344 (51,478 ) 22,869 Total stockholders’ equity 32,067 32,408 64,194 99,998 (196,600 ) 32,067 Total liabilities and stockholders' equity $ 32,415 $ 32,914 $ 89,343 $ 148,342 $ (248,078 ) $ 54,936 Condensed Consolidating Balance Sheet October 29, 2017 Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In millions) ASSETS Current assets: Cash and cash equivalents $ — $ 194 $ 7,555 $ 3,455 $ — $ 11,204 Trade accounts receivable, net — — — 2,448 — 2,448 Inventory — — — 1,447 — 1,447 Intercompany receivable — 32 279 309 (620 ) — Intercompany loan receivable — 28 1,891 8,849 (10,768 ) — Other current assets — — 350 374 — 724 Total current assets — 254 10,075 16,882 (11,388 ) 15,823 Long-term assets: Property, plant and equipment, net — — 207 2,392 — 2,599 Goodwill — — 1,360 23,346 — 24,706 Intangible assets, net — — — 10,832 — 10,832 Investment in subsidiaries 20,285 23,112 28,049 63,739 (135,185 ) — Intercompany loan receivable, long-term — — 41,547 — (41,547 ) — Other long-term assets — — 213 245 — 458 Total assets $ 20,285 $ 23,366 $ 81,451 $ 117,436 $ (188,120 ) $ 54,418 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ — $ 7 $ 72 $ 1,026 $ — $ 1,105 Employee compensation and benefits — — 274 352 — 626 Current portion of long-term debt — — 117 — — 117 Intercompany payable — 123 186 311 (620 ) — Intercompany loan payable — 50 8,799 1,919 (10,768 ) — Other current liabilities — — 254 427 — 681 Total current liabilities — 180 9,702 4,035 (11,388 ) 2,529 Long-term liabilities: Long-term debt — — 17,431 — — 17,431 Deferred tax liabilities — — 10,293 (274 ) — 10,019 Intercompany loan payable, long-term — — — 41,547 (41,547 ) — Unrecognized tax benefits — — 497 514 — 1,011 Other long-term liabilities — — 76 166 — 242 Total liabilities — 180 37,999 45,988 (52,935 ) 31,232 Total stockholders’ equity 20,285 20,285 43,452 71,448 (135,185 ) 20,285 Noncontrolling interest — 2,901 — — — 2,901 Total liabilities and stockholders' equity $ 20,285 $ 23,366 $ 81,451 $ 117,436 $ (188,120 ) $ 54,418 Condensed Consolidating Statements of Operations and Comprehensive Income Fiscal Quarter Ended May 6, 2018 Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In millions) Net revenue $ — $ — $ — $ 5,014 $ — $ 5,014 Intercompany revenue — — 566 — (566 ) — Total revenue — — 566 5,014 (566 ) 5,014 Cost of products sold: Cost of products sold — — 35 1,661 — 1,696 Intercompany cost of products sold — — — 37 (37 ) — Amortization of acquisition-related intangible assets — — — 765 — 765 Restructuring charges — — — 2 — 2 Total cost of products sold — — 35 2,465 (37 ) 2,463 Gross margin — — 531 2,549 (529 ) 2,551 Research and development — — 407 529 — 936 Intercompany operating expense — — — 529 (529 ) — Selling, general and administrative 2 50 72 170 — 294 Amortization of acquisition-related intangible assets — — — 67 — 67 Restructuring, impairment and disposal charges — — 11 42 — 53 Total operating expenses 2 50 490 1,337 (529 ) 1,350 Operating income (loss) (2 ) (50 ) 41 1,212 — 1,201 Interest expense — — (148 ) — — (148 ) Intercompany interest expense — — (81 ) (519 ) 600 — Other income, net — 1 28 17 — 46 Intercompany interest income — — 519 81 (600 ) — Intercompany other income (expense), net — 50 — (50 ) — — Income (loss) from continuing operations before income taxes and earnings in subsidiaries (2 ) 1 359 741 — 1,099 Benefit from income taxes — — (2,521 ) (116 ) — (2,637 ) Income (loss) from continuing operations before earnings in subsidiaries (2 ) 1 2,880 857 — 3,736 Earnings in subsidiaries 3,720 3,734 3,680 10,278 (21,412 ) — Income from continuing operations and earnings in subsidiaries 3,718 3,735 6,560 11,135 (21,412 ) 3,736 Loss from discontinued operations, net of income taxes — — (2 ) (1 ) — (3 ) Net income 3,718 3,735 6,558 11,134 (21,412 ) 3,733 Net income attributable to noncontrolling interest — 15 — — — 15 Net income attributable to common stock $ 3,718 $ 3,720 $ 6,558 $ 11,134 $ (21,412 ) $ 3,718 Net income $ 3,718 $ 3,735 $ 6,558 $ 11,134 $ (21,412 ) $ 3,733 Other comprehensive income (loss), net of tax: Change in unrealized gain on available-for-sale investments — — (9 ) — — (9 ) Amortization of actuarial loss and prior service costs associated with defined benefit pension plans and post-retirement benefit plans — — — 1 — 1 Other comprehensive income (loss) — — (9 ) 1 — (8 ) Comprehensive income 3,718 3,735 6,549 11,135 (21,412 ) 3,725 Comprehensive income attributable to noncontrolling interest — 15 — — — 15 Comprehensive income attributable to common stock $ 3,718 $ 3,720 $ 6,549 $ 11,135 $ (21,412 ) $ 3,710 Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Fiscal Quarter Ended April 30, 2017 Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In millions) Net revenue $ — $ — $ 1 $ 4,189 $ — $ 4,190 Intercompany revenue — — 529 12 (541 ) — Total revenue — — 530 4,201 (541 ) 4,190 Cost of products sold: Cost of products sold — — 42 1,522 — 1,564 Intercompany cost of products sold — — — 63 (63 ) — Purchase accounting effect on inventory — — — 1 — 1 Amortization of acquisition-related intangible assets — — — 639 — 639 Restructuring charges — — 5 5 — 10 Total cost of products sold — — 47 2,230 (63 ) 2,214 Gross margin — — 483 1,971 (478 ) 1,976 Research and development — — 345 484 — 829 Intercompany operating expense — — — 478 (478 ) — Selling, general and administrative — 6 81 117 — 204 Amortization of acquisition-related intangible assets — — — 442 — 442 Restructuring, impairment and disposal charges — — 3 24 — 27 Total operating expenses — 6 429 1,545 (478 ) 1,502 Operating income (loss) — (6 ) 54 426 — 474 Interest expense — — (118 ) 6 — (112 ) Intercompany interest expense — (2 ) (16 ) (972 ) 990 — Other income (expense), net — 1 8 (6 ) — 3 Intercompany interest income — — 972 18 (990 ) — Intercompany other income (expense), net — 812 (413 ) (399 ) — — Income (loss) from continuing operations before income taxes and earnings in (loss from) subsidiaries — 805 487 (927 ) — 365 Provision for (benefit from) income taxes — — (139 ) 36 — (103 ) Income (loss) from continuing operations, before earnings in (loss from) subsidiaries — 805 626 (963 ) — 468 Earnings in (loss from) subsidiaries 440 (341 ) (1,830 ) (762 ) 2,493 — Income (loss) from continuing operations and earnings in (loss from) subsidiaries 440 464 (1,204 ) (1,725 ) 2,493 468 Income (loss) from discontinued operations, net of income taxes — — 2 (6 ) — (4 ) Net income (loss) 440 464 (1,202 ) (1,731 ) 2,493 464 Net income attributable to noncontrolling interest — 24 — — — 24 Net income (loss) attributable to common stock $ 440 $ 440 $ (1,202 ) $ (1,731 ) $ 2,493 $ 440 Net income (loss) $ 440 $ 464 $ (1,202 ) $ (1,731 ) $ 2,493 $ 464 Other comprehensive income, net of tax: Amortization of actuarial loss and prior service costs associated with defined benefit pension plans and post-retirement benefit plans — — — 1 — 1 Other comprehensive income — — — 1 — 1 Comprehensive income (loss) 440 464 (1,202 ) (1,730 ) 2,493 465 Comprehensive income attributable to noncontrolling interest — 24 — — — 24 Comprehensive income (loss) attributable to common stock $ 440 $ 440 $ (1,202 ) $ (1,730 ) $ 2,493 $ 441 Condensed Consolidating Statements of Operations and Comprehensive Income Two Fiscal Quarters Ended May 6, 2018 Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In millions) Net revenue $ — $ — $ — $ 10,341 $ — $ 10,341 Intercompany revenue — — 1,150 — (1,150 ) — Total revenue — — 1,150 10,341 (1,150 ) 10,341 Cost of products sold: Cost of products sold — — 67 3,528 — 3,595 Intercompany cost of products sold — — — 71 (71 ) — Purchase accounting effect on inventory — — — 70 — 70 Amortization of acquisition-related intangible assets — — — 1,480 — 1,480 Restructuring charges — — 2 15 — 17 Total cost of products sold — — 69 5,164 (71 ) 5,162 Gross margin — — 1,081 5,177 (1,079 ) 5,179 Research and development — — 813 1,048 — 1,861 Intercompany operating expense — — — 1,079 (1,079 ) — Selling, general and administrative 2 84 157 342 — 585 Amortization of acquisition-related intangible assets — — — 406 — 406 Restructuring, impairment and disposal charges — — 44 139 — 183 Total operating expenses 2 84 1,014 3,014 (1,079 ) 3,035 Operating income (loss) (2 ) (84 ) 67 2,163 — 2,144 Interest expense — — (329 ) (2 ) — (331 ) Intercompany interest expense — — (140 ) (1,093 ) 1,233 — Other income, net — 2 47 32 — 81 Intercompany interest income — — 1,093 140 (1,233 ) — Intercompany other income (expense), net — 229 (57 ) (172 ) — — Income (loss) from continuing operations before income taxes and earnings in subsidiaries (2 ) 147 681 1,068 — 1,894 Benefit from income taxes — — (7,981 ) (442 ) — (8,423 ) Income (loss) from continuing operations before earnings in subsidiaries (2 ) 147 8,662 1,510 — 10,317 Earnings in subsidiaries 9,950 10,154 9,503 28,113 (57,720 ) — Income from continuing operations and earnings in subsidiaries 9,948 10,301 18,165 29,623 (57,720 ) 10,317 Loss from discontinued operations, net of income taxes — — (2 ) (16 ) — (18 ) Net income 9,948 10,301 18,163 29,607 (57,720 ) 10,299 Net income attributable to noncontrolling interest — 351 — — — 351 Net income attributable to common stock $ 9,948 $ 9,950 $ 18,163 $ 29,607 $ (57,720 ) $ 9,948 Net income $ 9,948 $ 10,301 $ 18,163 $ 29,607 $ (57,720 ) $ 10,299 Other comprehensive income, net of tax: Amortization of actuarial loss and prior service costs associated with defined benefit pension plans and post-retirement benefit plans — — — 1 — 1 Other comprehensive income — — — 1 — 1 Comprehensive income 9,948 10,301 18,163 29,608 (57,720 ) 10,300 Comprehensive income attributable to noncontrolling interest — 351 — — — 351 Comprehensive income attributable to common stock $ 9,948 $ 9,950 $ 18,163 $ 29,608 $ (57,720 ) $ 9,949 Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Two Fiscal Quarters Ended April 30, 2017 Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In millions) Net revenue $ — $ — $ 74 $ 8,255 $ — $ 8,329 Intercompany revenue — — 910 9 (919 ) — Total revenue — — 984 8,264 (919 ) 8,329 Cost of products sold: Cost of products sold — — 87 3,050 — 3,137 Intercompany cost of products sold — — (12 ) 122 (110 ) — Purchase accounting effect on inventory — — — 1 — 1 Amortization of acquisition-related intangible assets — — 7 1,191 — 1,198 Restructuring charges — — 8 8 — 16 Total cost of products sold — — 90 4,372 (110 ) 4,352 Gross margin — — 894 3,892 (809 ) 3,977 Research and development — — 713 924 — 1,637 Intercompany operating expense — — (80 ) 889 (809 ) — Selling, general and administrative — 13 175 217 — 405 Amortization of acquisition-related intangible assets — — 7 875 — 882 Restructuring, impairment and disposal charges — — 18 55 — 73 Total operating expenses — 13 833 2,960 (809 ) 2,997 Operating income (loss) — (13 ) 61 932 — 980 Interest expense — — (169 ) (54 ) — (223 ) Intercompany interest expense — (3 ) (90 ) (976 ) 1,069 — Loss on extinguishment of debt — — (52 ) (107 ) — (159 ) Other income, net — 1 6 27 — 34 Intercompany interest income — 1 976 92 (1,069 ) — Intercompany other income (expense), net — 1,013 (479 ) (534 ) — — Income (loss) from continuing operations before income taxes and earnings in (loss from) subsidiaries — 999 253 (620 ) — 632 Provision for (benefit from) income taxes — — (109 ) 16 — (93 ) Income (loss) from continuing operations, before earnings in (loss from) subsidiaries — 999 362 (636 ) — 725 Earnings in (loss from) subsidiaries 679 (283 ) (2,061 ) (1,028 ) 2,693 — Income (loss) from continuing operations and earnings in (loss from) subsidiaries 679 716 (1,699 ) (1,664 ) 2,693 725 Loss from discontinued operations, net of income taxes — — (8 ) (1 ) — (9 ) Net income (loss) 679 716 (1,707 ) (1,665 ) 2,693 716 Net income attributable to noncontrolling interest — 37 — — — 37 Net income (loss) attributable to common stock $ 679 $ 679 $ (1,707 ) $ (1,665 ) $ 2,693 $ 679 Net income (loss) $ 679 $ 716 $ (1,707 ) $ (1,665 ) $ 2,693 $ 716 Other comprehensive income, net of tax: Amortization of actuarial loss and prior service costs associated with defined benefit pension plans and post-retirement benefit plans — — — 1 — 1 Other comprehensive income — — — 1 — 1 Comprehensive income (loss) 679 716 (1,707 ) (1,664 ) 2,693 717 Comprehensive income attributable to noncontrolling interest — 37 — — — 37 Comprehensive income (loss) attributable to common stock $ 679 $ 679 $ (1,707 ) $ (1,664 ) $ 2,693 $ 680 Condensed Consolidating Statements of Cash Flows Two Fiscal Quarters Ended May 6, 2018 Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In millions) Cash flows from operating activities: Net income $ 9,948 $ 10,301 $ 18,163 $ 29,607 $ (57,720 ) $ 10,299 Adjustments to reconcile net income to net cash provided by (used in) operating activities (9,611 ) (10,001 ) (18,528 ) (26,110 ) 57,949 (6,301 ) Net cash provided by (used in) operating activities 337 300 (365 ) 3,497 229 3,998 Cash flows from investing activities: Intercompany contributions paid — (102 ) (9,099 ) (3,002 ) 12,203 — Distributions received from subsidiaries — 1,521 — 1,521 (3,042 ) — Net change in intercompany loans — 28 8,346 2,181 (10,555 ) — Acquisitions of businesses, net of cash acquired — — — (4,786 ) — (4,786 ) Proceeds from sales of businesses — — — 782 — 782 Purchases of property, plant and equipment — — (114 ) (295 ) — (409 ) Proceeds from disposals of property, plant and equipment — — 1 237 — 238 Purchases of investments — — (50 ) (199 ) — (249 ) Proceeds from sale of investment — — 54 — — 54 Other — — — (12 ) — (12 ) Net cash provided by (used in) investing activities — 1,447 (862 ) (3,573 ) (1,394 ) (4,382 ) Cash flows from financing activities: Intercompany contributions received — — 3,231 9,201 (12,432 ) — Dividend and distribution payments — (1,521 ) (1,521 ) (1,521 ) 3,042 (1,521 ) Net intercompany borrowings — (27 ) (2,125 ) (8,403 ) 10,555 — Repayment of debt — — — (856 ) — (856 ) Repurchases of common stock (347 ) — — — — (347 ) Issuance of common stock, net 10 102 — — — 112 Payment of capital lease obligations — — — (21 ) — (21 ) Net cash used in financing activities (337 ) (1,446 ) (415 ) (1,600 ) 1,165 (2,633 ) Net change in cash and cash equivalents — 301 (1,642 ) (1,676 ) — (3,017 ) Cash and cash equivalents at the beginning of period — 194 7,555 3,455 — 11,204 Cash and cash equivalents at end of period $ — $ 495 $ 5,913 $ 1,779 $ — $ 8,187 Condensed Consolidating Statements of Cash Flows Two Fiscal Quarters Ended April 30, 2017 Parent Guarantor Subsidiary Guarantor Subsidiary Issuers Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In millions) Cash flows from operating activities: Net income (loss) $ 679 $ 716 $ (1,707 ) $ (1,665 ) $ 2,693 $ 716 Adjustments to reconcile net income (loss) to net cash provided by operating activities (679 ) (463 ) 1,912 4,143 (2,693 ) 2,220 Net cash provided by operating activities — 253 205 2,478 — 2,936 Cash flows from investing activities: Net change in intercompany loans — 410 129 6,393 (6,932 ) — Acquisitions of businesses, net of cash acquired — — — (37 ) — (37 ) Proceeds from sale of business — — — 10 — 10 Purchases of property, plant and equipment — — (185 ) (396 ) — (581 ) Purchases of investments — — (200 ) — — (200 ) Other — — — (4 ) — (4 ) Net cash provided by (used in) investing activities — 410 (256 ) 5,966 (6,932 ) (812 ) Cash flows from financing activities: Net intercompany borrowings — 465 (6,004 ) (1,393 ) 6,932 — Proceeds from issuance of long-term debt — — 13,446 — — 13,446 Repayment of debt — — (5,705 ) (7,963 ) — (13,668 ) Payment of debt issuance costs — — (23 ) — — (23 ) Dividend and distribution payments — (868 ) — — — (868 ) Issuance of common stock, net — 150 — — — 150 Other — — (2 ) (2 ) — (4 ) Net cash provided by (used in) financing activities — (253 ) 1,712 (9,358 ) 6,932 (967 ) Net change in cash and cash equivalents — 410 1,661 (914 ) — 1,157 Cash and cash equivalents at the beginning of period — 53 1,092 1,952 — 3,097 Cash and cash equivalents at end of period $ — $ 463 $ 2,753 $ 1,038 $ — $ 4,254 |