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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 29, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Broadcom Inc.
(Exact name of registrant as specified in its charter)
Delaware001-3844935-2617337
(State or other jurisdiction of
incorporation or organization)
(Commission file Number)
(I.R.S. Employer
Identification No.)
1320 Ridder Park Drive
San Jose,CA95131-2313
(408) 
433-8000
(Address, including zip code, of principal executive offices and
registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerþAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No þ
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.001 par valueAVGOThe NASDAQ Global Select Market

As of February 24, 2023, there were 416,923,664 shares of our common stock outstanding.




BROADCOM INC.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended January 29, 2023

TABLE OF CONTENTS
Page



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

1

Table of Contents
BROADCOM INC.
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED
January 29,
2023
October 30,
2022
(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents$12,647 $12,416 
Trade accounts receivable, net3,234 2,958 
Inventory1,899 1,925 
Other current assets1,056 1,205 
Total current assets18,836 18,504 
Long-term assets:
Property, plant and equipment, net2,201 2,223 
Goodwill43,614 43,614 
Intangible assets, net6,225 7,111 
Other long-term assets2,100 1,797 
Total assets$72,976 $73,249 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$923 $998 
Employee compensation and benefits536 1,202 
Current portion of long-term debt1,115 440 
Other current liabilities4,909 4,412 
Total current liabilities7,483 7,052 
Long-term liabilities:  
Long-term debt38,167 39,075 
Other long-term liabilities4,016 4,413 
Total liabilities49,666 50,540 
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.001 par value; 100 shares authorized; none issued and outstanding
  
Common stock, $0.001 par value; 2,900 shares authorized; 417 and 418 shares issued and outstanding as of January 29, 2023 and October 30, 2022, respectively
  
Additional paid-in capital21,119 21,159 
Retained earnings2,371 1,604 
Accumulated other comprehensive loss(180)(54)
Total stockholders’ equity23,310 22,709 
Total liabilities and equity$72,976 $73,249 

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

2

Table of Contents
BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
Fiscal Quarter Ended
January 29,
2023
January 30,
2022
(In millions, except per share data)
Net revenue:
Products$7,082 $6,053 
Subscriptions and services1,833 1,653 
Total net revenue8,915 7,706 
Cost of revenue:
Cost of products sold2,225 1,769 
Cost of subscriptions and services149 156 
Amortization of acquisition-related intangible assets535 730 
Restructuring charges2 2 
Total cost of revenue2,911 2,657 
Gross margin6,004 5,049 
Research and development1,195 1,206 
Selling, general and administrative348 321 
Amortization of acquisition-related intangible assets348 397 
Restructuring, impairment and disposal charges10 17 
Total operating expenses1,901 1,941 
Operating income4,103 3,108 
Interest expense(406)(407)
Other income (expense), net143 (14)
Income before income taxes3,840 2,687 
Provision for income taxes66 215 
Net income3,774 2,472 
Dividends on preferred stock (74)
Net income attributable to common stock$3,774 $2,398 
Net income per share attributable to common stock:
Basic$9.03 $5.82 
Diluted$8.80 $5.59 
Weighted-average shares used in per share calculations:
Basic418 412 
Diluted429 429 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

Table of Contents
BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME — UNAUDITED
Fiscal Quarter Ended
January 29,
2023
January 30,
2022
(In millions)
Net income$3,774 $2,472 
Other comprehensive income (loss), net of tax:
Change in unrealized loss on derivative instruments(126) 
Change in actuarial loss and prior service costs associated with defined benefit plans 1 
Other comprehensive income (loss), net of tax(126)1 
Comprehensive income$3,648 $2,473 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

Table of Contents
BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
Fiscal Quarter Ended
January 29,
2023
January 30,
2022
(In millions)
Cash flows from operating activities:
Net income$3,774 $2,472 
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible and right-of-use assets905 1,151 
Depreciation127 136 
Stock-based compensation391 387 
Deferred taxes and other non-cash taxes(573)70 
Non-cash interest expense32 32 
Other(39)15 
Changes in assets and liabilities, net of acquisitions and disposals:
Trade accounts receivable, net(276)(468)
Inventory26 (223)
Accounts payable(80) 
Employee compensation and benefits(657)(528)
Other current assets and current liabilities570 521 
Other long-term assets and long-term liabilities(164)(79)
Net cash provided by operating activities4,036 3,486 
Cash flows from investing activities:
Purchases of property, plant and equipment(103)(101)
Purchases of investments (200)
Other (8)
Net cash used in investing activities(103)(309)
Cash flows from financing activities:
Payments on debt obligations(260)(255)
Payments of dividends(1,926)(1,764)
Repurchases of common stock - repurchase program(1,188)(2,724)
Shares repurchased for tax withholdings on vesting of equity awards(333)(375)
Other5 (3)
Net cash used in financing activities(3,702)(5,121)
Net change in cash and cash equivalents231 (1,944)
Cash and cash equivalents at beginning of period12,416 12,163 
Cash and cash equivalents at end of period$12,647 $10,219 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

Table of Contents

BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY — UNAUDITED
Fiscal Quarter Ended January 29, 2023
Common Stock Additional
Paid-in Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Stockholders’
Equity
SharesPar Value
(In millions)
Balance as of October 30, 2022418 $ $21,159 $1,604 $(54)$22,709 
Net income— — — 3,774 — 3,774 
Other comprehensive loss— — — — (126)(126)
Dividends to common stockholders
— —  (1,926)— (1,926)
Common stock issued
2   — —  
Stock-based compensation— — 391 — — 391 
Repurchases of common stock(2) (107)(1,081)— (1,188)
Shares repurchased for tax withholdings on vesting of equity awards
(1) (324)— — (324)
Balance as of January 29, 2023417 $ $21,119 $2,371 $(180)$23,310 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6

Table of Contents

BROADCOM INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY — UNAUDITED
Fiscal Quarter Ended January 30, 2022
8.00% Mandatory Convertible Preferred Stock
Common Stock Additional
Paid-in Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Stockholders’
Equity
SharesPar ValueSharesPar Value
(In millions)
Balance as of October 31, 20214 $ 413 $ $24,330 $748 $(116)$24,962 
Net income— — — — — 2,472 — 2,472 
Other comprehensive income— — — — — — 1 1 
Dividends to common stockholders
— — — —  (1,689)— (1,689)
Dividends to preferred stockholders— — — — — (74)— (74)
Common stock issued
— — 2  1 — — 1 
Stock-based compensation— — — — 387 — — 387 
Repurchases of common stock— — (4) (1,267)(1,457)— (2,724)
Shares repurchased for tax withholdings on vesting of equity awards
— — (1) (368)— — (368)
Balance as of January 30, 20224 $ 410 $ $23,083 $ $(115)$22,968 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7

Table of Contents
BROADCOM INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Overview, Basis of Presentation and Significant Accounting Policies
Overview
Broadcom Inc. (“Broadcom”), a Delaware corporation, is a global technology leader that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. We develop semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products. We have a history of innovation in the semiconductor industry and offer thousands of products that are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Our infrastructure software solutions enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms. Our portfolio of infrastructure and security software is designed to modernize, optimize, and secure the most complex hybrid environments, enabling scalability, agility, automation, insights, resiliency and security. We also offer mission critical fibre channel storage area networking (“FC SAN”) products and related software in the form of modules, switches and subsystems incorporating multiple semiconductor products. Unless stated otherwise or the context otherwise requires, references to “Broadcom,” “we,” “our,” and “us” mean Broadcom and its consolidated subsidiaries. We have two reportable segments: semiconductor solutions and infrastructure software.
Basis of Presentation
We operate on a 52- or 53-week fiscal year ending on the Sunday closest to October 31 in a 52-week year and the first Sunday in November in a 53-week year. Our fiscal year ending October 29, 2023 (“fiscal year 2023”) is a 52-week fiscal year. The first quarter of our fiscal year 2023 ended on January 29, 2023, the second quarter ends on April 30, 2023 and the third quarter ends on July 30, 2023. Our fiscal year ended October 30, 2022 (“fiscal year 2022”) was also a 52-week fiscal year.
The accompanying condensed consolidated financial statements include the accounts of Broadcom and its subsidiaries, and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. The financial information included herein is unaudited, and reflects all adjustments which are, in the opinion of our management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. The October 30, 2022 condensed consolidated balance sheet data were derived from Broadcom’s audited consolidated financial statements included in its Annual Report on Form 10-K for fiscal year 2022 as filed with the Securities and Exchange Commission. All intercompany balances and transactions have been eliminated in consolidation. The operating results for the fiscal quarter ended January 29, 2023 are not necessarily indicative of the results that may be expected for fiscal year 2023, or for any other future period.
Significant Accounting Policies
Use of estimates. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic, and many of these estimates could require increased judgment and carry a higher degree of variability and volatility. Actual results could differ materially from these estimates, and such differences could affect the results of operations reported in future periods.
2. Revenue from Contracts with Customers
We account for a contract with a customer when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights can be identified, payment terms can be identified, the contract has commercial substance, and it is probable we will collect substantially all of the consideration we are entitled. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer.
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Disaggregation
We have considered (1) information that is regularly reviewed by our Chief Executive Officer, who has been identified as the chief operating decision maker (the “CODM”) as defined by the authoritative guidance on segment reporting, in evaluating financial performance and (2) disclosures presented outside of our financial statements in our earnings releases and used in investor presentations to disaggregate revenues. The principal category we use to disaggregate revenues is the nature of our products and subscriptions and services, as presented in our condensed consolidated statements of operations. In addition, revenues by reportable segment are presented in Note 10. “Segment Information.”
The following tables present revenue disaggregated by type of revenue and by region for the periods presented:
Fiscal Quarter Ended January 29, 2023
AmericasAsia PacificEurope, the Middle East and AfricaTotal
(In millions)
Products$609 $5,937 $536 $7,082 
Subscriptions and services (a)
1,230 200 403 1,833 
Total$1,839 $6,137 $939 $8,915 
Fiscal Quarter Ended January 30, 2022
AmericasAsia PacificEurope, the Middle East and AfricaTotal
(In millions)
Products$548 $4,984 $521 $6,053 
Subscriptions and services (a)
1,109 128 416 1,653 
Total$1,657 $5,112 $937 $7,706 
_______________
(a) Subscriptions and services predominantly include software licenses with termination for convenience clauses.
Although we recognize revenue for the majority of our products when title and control transfer in Penang, Malaysia, we disclose net revenue by region based primarily on the geographic shipment location or delivery location specified by our distributors, original equipment manufacturer customers, contract manufacturers, channel partners, or software customers.
Contract Balances
January 29,
2023
October 30,
2022
(In millions)
Contract Assets$169 $128 
Contract Liabilities$3,494 $3,341 
Changes in our contract assets and contract liabilities primarily result from the timing difference between our performance and the customer’s payment. We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. We recognize a contract asset when we transfer products or services to a customer and the right to consideration is conditional on something other than the passage of time. Accounts receivable are recorded when the customer has been billed or the right to consideration is unconditional. We recognize contract liabilities when we have received consideration or an amount of consideration is due from the customer and we have a future obligation to transfer products or services. Contract liabilities include amounts billed or collected and advanced payments on contracts or arrangements, which may include termination for convenience provisions. The amount of revenue recognized during the fiscal quarter ended January 29, 2023 that was included in the contract liabilities balance as of October 30, 2022 was $1,435 million. The amount of revenue recognized during the fiscal quarter ended January 30, 2022 that was included in the contract liabilities balance as of October 31, 2021 was $1,216 million.
Remaining Performance Obligations
Revenue allocated to remaining performance obligations represents the transaction price allocated to unsatisfied or partially unsatisfied performance obligations. Remaining performance obligations include unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, but do not include contracts for software, subscriptions or
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services where the customer is not committed. The customer is not considered committed when termination for convenience without payment of a substantive penalty exists, either contractually or through customary business practice. The majority of our customer software contracts include termination for convenience clauses without a substantive penalty and are not considered committed. Additionally, as a practical expedient, we have not included contracts that have an original duration of one year or less, nor have we included contracts with sales-based or usage-based royalties promised in exchange for a license of intellectual property (“IP”).
Certain multi-year customer contracts primarily in our semiconductor solutions segment contain firmly committed amounts and the remaining performance obligations under these contracts as of January 29, 2023 were approximately $22.8 billion. We expect approximately 29% of this amount to be recognized as revenue over the next 12 months. Although the majority of our software contracts are not deemed to be committed, our customers generally do not exercise their termination for convenience rights. In addition, the majority of our contracts for products, subscriptions and services have a duration of one year or less. Accordingly, our remaining performance obligations disclosed above are not indicative of revenue for future periods.
3. Pending Acquisition of VMware, Inc.
On May 26, 2022, we entered into an Agreement and Plan of Merger (the “VMware Merger Agreement”) to acquire all of the outstanding shares of VMware, Inc. (“VMware”) in a cash-and-stock transaction (the “VMware Merger”) that values VMware at approximately $61 billion based on the closing price of Broadcom common stock on May 25, 2022. We will also assume VMware’s closing date outstanding debt, net of expected cash.
Under the terms of the VMware Merger Agreement, each share of VMware common stock issued and outstanding immediately prior to the effective time of the VMware Merger will be indirectly converted into the right to receive, at the election of the holder of such share of VMware common stock, either $142.50 in cash, without interest, or 0.2520 shares of Broadcom common stock. The stockholder election will be subject to proration, such that the total number of shares of VMware common stock entitled to receive cash and the total number of shares of VMware common stock entitled to receive Broadcom common stock, will, in each case, be equal to 50% of the aggregate number of shares of VMware common stock issued and outstanding immediately prior to the effective time of the VMware Merger.
We will assume all outstanding VMware restricted stock unit (“RSU”) awards and performance stock unit awards held by continuing employees. The assumed awards will be converted into RSU awards for shares of Broadcom common stock. All outstanding in-the-money VMware stock options and RSU awards held by non-employee directors will be accelerated and converted into the right to receive cash and shares of Broadcom common stock, in equal parts.
Effective upon the effective time of the VMware Merger, one member of the VMware Board of Directors, to be mutually agreed by us and VMware, will be added to our Board of Directors.
In connection with the execution of the VMware Merger Agreement, we entered into a commitment letter on May 26, 2022, with certain financial institutions that committed to provide, subject to the terms and conditions of the commitment letter, a senior unsecured bridge facility in an aggregate principal amount of $32 billion.
The VMware Merger, which is expected to be completed in our fiscal year 2023, is subject to satisfaction or waiver of customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and clearance under the antitrust laws of the European Union and certain other jurisdictions. On October 3, 2022, we registered approximately 59 million shares of our common stock. On November 4, 2022, VMware stockholders adopted the VMware Merger Agreement. We and VMware each have termination rights under the VMware Merger Agreement and, under specified circumstances, upon termination of the agreement, we and VMware would be required to pay the other a termination fee of $1.5 billion.
4. Supplemental Financial Information
Cash Equivalents
Cash equivalents included $3,520 million and $3,915 million of time deposits and $2,184 million and $2,365 million of money-market funds as of January 29, 2023 and October 30, 2022, respectively. For time deposits, carrying value approximates fair value due to the short-term nature of the instruments. The fair value of money-market funds, which was consistent with their carrying value, was determined using unadjusted prices in active, accessible markets for identical assets, and as such, they were classified as Level 1 assets in the fair value hierarchy.
Accounts Receivable Factoring
We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions pursuant to factoring arrangements. We account for these transactions as sales of receivables and present cash proceeds as cash provided by operating activities in the condensed consolidated statements of cash flows. Total trade accounts receivable sold under the
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factoring arrangements were $1,025 million and $1,200 million during the fiscal quarters ended January 29, 2023 and January 30, 2022, respectively. Factoring fees for the sales of receivables were recorded in other income (expense), net and were not material for any of the periods presented.
Inventory
January 29,
2023
October 30,
2022
(In millions)
Finished goods$702 $780 
Work-in-process986 966 
Raw materials211 179 
Total inventory$1,899 $1,925 
Other Current Assets
January 29,
2023
October 30,
2022
(In millions)
Prepaid expenses$609 $864 
Other 447 341 
Total other current assets $1,056 $1,205 
Other Current Liabilities
January 29,
2023
October 30,
2022
(In millions)
Contract liabilities$3,109 $2,931 
Tax liabilities915 680 
Interest payable406 393 
Other 479 408 
Total other current liabilities$4,909 $4,412 
Other Long-Term Liabilities
January 29,
2023
October 30,
2022
(In millions)
Unrecognized tax benefits$2,866 $3,229 
Other 1,150 1,184 
Total other long-term liabilities$4,016 $4,413 
Supplemental Cash Flow Information
Fiscal Quarter Ended
January 29,
2023
January 30,
2022
(In millions)
Cash paid for interest$361 $240 
Cash paid for income taxes$273 $186 
During the fiscal quarter ended January 29, 2023 and fiscal year 2022, we entered into treasury rate lock contracts that mature in approximately one year to hedge variability of cash flows due to changes in the benchmark interest rate of anticipated future debt issuances. These treasury rate locks are designated and accounted for as cash flow hedging instruments. As of January 29, 2023 and October 30, 2022, the total notional amounts of these contracts were $5.5 billion and $1.3 billion, respectively. As of January 29, 2023, the fair value of $114 million was recorded in other current liabilities. As of October 30, 2022, the fair value of $47 million was recorded in other long-term assets. The change in fair value was recorded as a component of other comprehensive income (loss), net of tax, in our condensed consolidated statements of comprehensive income.
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5. Intangible Assets
Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
(In millions)
As of January 29, 2023:   
Purchased technology$19,450 $(15,956)$3,494 
Customer contracts and related relationships7,066 (4,841)2,225 
Order backlog484 (407)77 
Trade names700 (389)311 
Other174 (85)89 
Intangible assets subject to amortization27,874 (21,678)6,196 
In-process research and development29 — 29 
Total$27,903 $(21,678)$6,225 
As of October 30, 2022:   
Purchased technology$19,450 $(15,422)$4,028 
Customer contracts and related relationships7,066 (4,535)2,531 
Order backlog484 (382)102 
Trade names700 (372)328 
Other174 (81)93 
Intangible assets subject to amortization27,874 (20,792)7,082 
In-process research and development29 — 29 
Total$27,903 $(20,792)$7,111 
Based on the amount of intangible assets subject to amortization as of January 29, 2023, the expected amortization expense was as follows:
Fiscal Year:Expected Amortization Expense
(In millions)
2023 (remainder)$2,369 
20242,388 
2025681 
2026344 
2027216 
Thereafter198 
Total$6,196 
The weighted-average remaining amortization periods by intangible asset category were as follows:
Amortizable intangible assets:January 29,
2023
(In years)
Purchased technology3
Customer contracts and related relationships2
Order backlog1
Trade names8
Other8
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6. Net Income Per Share
Basic net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period.
Diluted shares outstanding include the dilutive effect of unvested RSUs and employee stock purchase plan rights under the Broadcom Inc. Employee Stock Purchase Plan, as amended (“ESPP”), (collectively referred to as “equity awards”), as well as 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value per share (“Mandatory Convertible Preferred Stock”), which was all converted into shares of our common stock before the end of fiscal year 2022. Potentially dilutive shares whose effect would have been antidilutive are excluded from the computation of diluted net income per share.
The dilutive effect of equity awards is calculated based on the average stock price for each fiscal period, using the treasury stock method. Under the treasury stock method, the amount the employee must pay for purchasing shares under the ESPP and the amount of compensation cost for future service that we have not yet recognized are collectively assumed to be used to repurchase shares. The dilutive effect of Mandatory Convertible Preferred Stock is calculated using the if-converted method. The if-converted method assumes that these securities were converted at the beginning of the reporting period to the extent that the effect is dilutive.
For the fiscal quarter ended January 30, 2022, diluted net income per share excluded the potentially dilutive effect of 12 million shares of common stock issuable upon the conversion of Mandatory Convertible Preferred Stock as their effect was antidilutive.
The following is a reconciliation of the numerators and denominators of the basic and diluted net income per share computations for the periods presented:
Fiscal Quarter Ended
January 29,
2023
January 30,
2022
(In millions, except per share data)
Numerator:
Net income$3,774 $2,472 
Dividends on preferred stock
 (74)
Net income attributable to common stock$3,774 $2,398 
Denominator:
Weighted-average shares outstanding - basic418412
Dilutive effect of equity awards1117
Weighted-average shares outstanding - diluted429429
Net income per share attributable to common stock:
Basic$9.03 $5.82 
Diluted$8.80 $5.59 

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7. Borrowings
Effective Interest RateJanuary 29,
2023
October 30,
2022
(In millions, except percentages)
April 2022 Senior Notes - fixed rate
4.000% notes due April 2029
4.17 %$750 $750 
4.150% notes due April 2032
4.30 %1,200 1,200 
4.926% notes due May 2037
5.33 %2,500 2,500 
4,450 4,450 
September 2021 Senior Notes - fixed rate
3.137% notes due November 2035
4.23 %3,250 3,250 
3.187% notes due November 2036
4.79 %2,750 2,750 
6,000 6,000 
March 2021 Senior Notes - fixed rate
3.419% notes due April 2033
4.66 %2,250 2,250 
3.469% notes due April 2034
4.63 %3,250 3,250 
5,500 5,500 
January 2021 Senior Notes - fixed rate
1.950% notes due February 2028
2.10 %750 750 
2.450% notes due February 2031
2.56 %2,750 2,750 
2.600% notes due February 2033
2.70 %1,750 1,750 
3.500% notes due February 2041
3.60 %3,000 3,000 
3.750% notes due February 2051
3.84 %1,750 1,750 
10,000 10,000 
June 2020 Senior Notes - fixed rate
3.459% notes due September 2026
4.19 %752 752 
4.110% notes due September 2028
5.02 %1,118 1,118 
1,870 1,870 
May 2020 Senior Notes - fixed rate
2.250% notes due November 2023
2.40 %105 105 
3.150% notes due November 2025
3.29 %900 900 
4.150% notes due November 2030
4.27 %1,856 1,856 
4.300% notes due November 2032
4.39 %2,000 2,000 
4,861 4,861 
April 2020 Senior Notes - fixed rate
5.000% notes due April 2030
5.18 %606 606 
April 2019 Senior Notes - fixed rate
3.625% notes due October 2024
3.98 %622 622 
4.750% notes due April 2029
4.95 %1,655 1,655 
2,277 2,277 
2017 Senior Notes - fixed rate
2.650% notes due January 2023
2.78 % 260 
3.625% notes due January 2024
3.74 %829 829 
3.125% notes due January 2025
3.23 %495 495 
3.875% notes due January 2027
4.02 %2,922 2,922 
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Effective Interest RateJanuary 29,
2023
October 30,
2022
(In millions, except percentages)
3.500% notes due January 2028
3.60 %777 777 
5,023 5,283 
Assumed CA Senior Notes - fixed rate
4.500% notes due August 2023
4.10 %143 143 
4.700% notes due March 2027
5.15 %215 215 
358 358 
Other senior notes - fixed rate
3.500% notes due August 2024
3.55 %7 7 
4.500% notes due August 2034
4.55 %6 6 
13 13 
Total principal amount outstanding$40,958 $41,218 
Current portion of principal amount outstanding$1,077 $403 
Short-term finance lease liabilities38 37 
Total current portion of long-term debt$1,115 $440 
Non-current portion of principal amount outstanding$39,881 $40,815 
Long-term finance lease liabilities17 22 
Unamortized discount and issuance costs(1,731)(1,762)
Total long-term debt$38,167 $39,075 
Credit Agreement
In January 2021, we entered into a credit agreement (the “Credit Agreement”), which provides for a five-year $7.5 billion unsecured revolving credit facility, of which $500 million is available for the issuance of multi-currency letters of credit. The issuance of letters of credit and certain other instruments would reduce the aggregate amount otherwise available under our revolving credit facility for revolving loans. Subject to the terms of the Credit Agreement, we are permitted to borrow, repay and reborrow revolving loans at any time prior to the earlier of (a) January 19, 2026 and (b) the date of termination in whole of the revolving lenders’ commitments under the Credit Agreement. We had no borrowings outstanding under our revolving credit facility at either January 29, 2023 or October 30, 2022.
Commercial Paper
In February 2019, we established a commercial paper program pursuant to which we may issue unsecured commercial paper notes (“Commercial Paper”) in principal amount of up to $2 billion outstanding at any time with maturities of up to 397 days from the date of issue. Commercial Paper is sold under customary terms in the commercial paper market and may be issued at a discount from par or, alternatively, may be sold at par and bear interest at rates dictated by market conditions at the time of their issuance. The discount associated with the Commercial Paper is amortized to interest expense over its term. Outstanding Commercial Paper reduces the amount that would otherwise be available to borrow for general corporate purposes under our revolving credit facility. We had no Commercial Paper outstanding at either January 29, 2023 or October 30, 2022.
Fair Value of Debt
As of January 29, 2023, the estimated aggregate fair value of debt was $35,565 million. The fair value of our senior notes was determined using quoted prices from less active markets. All of our debt obligations are categorized as Level 2 instruments.
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Future Principal Payments of Debt
The future scheduled principal payments of debt as of January 29, 2023 were as follows:
Fiscal Year:Future Scheduled Principal Payments
(In millions)
2023 (remainder)$143 
20241,563 
2025495 
20261,652 
20273,137 
Thereafter33,968 
Total$40,958 
As of January 29, 2023 and October 30, 2022, we were in compliance with all debt covenants.
8. Stockholders’ Equity
Cash Dividends Declared and Paid
Fiscal Quarter Ended
January 29,
2023
January 30,
2022
(In millions, except per share data)
Dividends per share to common stockholders
$4.60 $4.10 
Dividends to common stockholders$1,926 $1,689 
Dividends per share to preferred stockholders
$ $20.00 
Dividends to preferred stockholders$