Income Tax Accounting Policy
Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Analyst Adjustments: Removal of Deferred Taxes
Adjusted Ratios: Removal of Deferred Taxes (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Broadcom accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

Broadcom recognizes net deferred tax assets to the extent Broadcom believes these assets will more likely than not be realized. In making such determination, Broadcom considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. If Broadcom determines that Broadcom is able to realize the deferred income tax assets in the future in excess of their net carrying values, Broadcom adjusts the valuation allowance and reduces the provision for income taxes. Likewise, if Broadcom determines that Broadcom is not be able to realize all or part of the net deferred tax assets, Broadcom increases the provision for income taxes in the period such determination is made.

Broadcom accounts for uncertainty in income taxes in accordance with the applicable accounting guidance on income taxes. This guidance provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.

Source: 10-K (filing date: 2018-12-21).

Broadcom Inc., income tax expense (benefit), continuing operations

US$ in millions

	12 months ended	Nov 4, 2018		Oct 29, 2017		Oct 30, 2016		Nov 1, 2015		Nov 2, 2014		Nov 3, 2013
	Domestic
	Foreign
	Current tax expense
	Domestic
	Foreign
	Deferred tax expense (benefit)
	Provision for (benefit from) income taxes

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

Item	Description	The company
Current tax expense	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Broadcom Inc.’s current tax expense increased from 2016 to 2017 and from 2017 to 2018.
Deferred tax expense (benefit)	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Broadcom Inc.’s deferred tax expense (benefit) declined from 2016 to 2017 and from 2017 to 2018.
Provision for (benefit from) income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Broadcom Inc.’s provision for (benefit from) income taxes declined from 2016 to 2017 and from 2017 to 2018.

Broadcom Inc., effective income tax rate (EITR) reconciliation

		Nov 4, 2018	Oct 29, 2017	Oct 30, 2016	Nov 1, 2015	Nov 2, 2014	Nov 3, 2013
	Statutory tax rate
	2017 Tax reform
	Withholding tax
	Foreign income taxed at different rates
	Excess tax benefits from stock-based compensation
	Research and development credit
	Deemed inclusion of foreign earnings
	Tax holidays and concessions
	Other, net
	Valuation allowance
	Actual tax rate on income (loss) before income taxes

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

Item	Description	The company
Actual tax rate on income (loss) before income taxes	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Broadcom Inc.’s actual tax rate on income (loss) before income taxes increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

Broadcom Inc., components of deferred tax assets and liabilities

US$ in millions

		Nov 4, 2018		Oct 29, 2017		Oct 30, 2016		Nov 1, 2015		Nov 2, 2014		Nov 3, 2013
	Depreciation and amortization
	Employee benefits
	Employee stock awards
	Net operating loss carryovers and credit carryovers
	Other deferred income tax assets
	Gross deferred income tax assets
	Valuation allowance
	Deferred income tax assets
	Depreciation and amortization
	Notes receivable
	Other deferred income tax liabilities
	Foreign earnings not indefinitely reinvested
	Deferred income tax liabilities
	Net deferred income tax assets (liabilities)

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

Item	Description	The company
Gross deferred income tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Broadcom Inc.’s gross deferred income tax assets increased from 2016 to 2017 but then declined significantly from 2017 to 2018.
Deferred income tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Broadcom Inc.’s deferred income tax assets increased from 2016 to 2017 but then declined significantly from 2017 to 2018.
Net deferred income tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Broadcom Inc.’s net deferred income tax assets (liabilities) declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Broadcom Inc., deferred tax assets and liabilities, classification

US$ in millions

		Nov 4, 2018	Oct 29, 2017	Oct 30, 2016	Nov 1, 2015	Nov 2, 2014	Nov 3, 2013
	Current deferred income tax assets (in Other current assets)
	Current deferred income tax liabilities (in Other current liabilities)
	Non-current deferred income tax assets (in Other long-term assets)
	Non-current deferred income tax liabilities (in Other long-term liabilities)

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

Item	Description	The company
Non-current deferred income tax assets (in Other long-term assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Broadcom Inc.’s non-current deferred income tax assets (in Other long-term assets) declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.
Non-current deferred income tax liabilities (in Other long-term liabilities)	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Broadcom Inc.’s non-current deferred income tax liabilities (in Other long-term liabilities) declined from 2016 to 2017 and from 2017 to 2018.

Broadcom Inc., adjustments to financial data

US$ in millions

		Nov 4, 2018	Oct 29, 2017	Oct 30, 2016	Nov 1, 2015	Nov 2, 2014	Nov 3, 2013
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Current Liabilities
	Current liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Current liabilities (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Total Broadcom Inc. Stockholders’ Equity
	Total Broadcom Inc. stockholders’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Total Broadcom Inc. stockholders’ equity (adjusted)
	Adjustment to Net Income (loss) Attributable To Common Stock
	Net income (loss) attributable to common stock (as reported)
	Add: Deferred income tax expense (benefit)
	Net income (loss) attributable to common stock (adjusted)

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

Broadcom Inc., Financial Data: Reported vs. Adjusted

Broadcom Inc., adjusted ratios

		Nov 4, 2018	Oct 29, 2017	Oct 30, 2016	Nov 1, 2015	Nov 2, 2014	Nov 3, 2013
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Broadcom Inc.’s adjusted current ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Broadcom Inc.’s adjusted net profit margin improved from 2016 to 2017 and from 2017 to 2018.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Broadcom Inc.’s adjusted total asset turnover improved from 2016 to 2017 and from 2017 to 2018.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Broadcom Inc.’s adjusted financial leverage increased from 2016 to 2017 and from 2017 to 2018.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Broadcom Inc.’s adjusted ROE improved from 2016 to 2017 and from 2017 to 2018.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Broadcom Inc.’s adjusted ROA improved from 2016 to 2017 and from 2017 to 2018.

Broadcom Inc., Ratios: Reported vs. Adjusted

		Nov 4, 2018	Oct 29, 2017	Oct 30, 2016	Nov 1, 2015	Nov 2, 2014	Nov 3, 2013
	As Reported
	Selected Financial Data (US$ in millions)
	Current assets
	Current liabilities
	Ratio
	Current ratio¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted current assets
	Adjusted current liabilities
	Ratio
	Adjusted current ratio²

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

2018 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= hidden ÷ hidden = hidden

² Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Broadcom Inc.’s adjusted current ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level.

		Nov 4, 2018	Oct 29, 2017	Oct 30, 2016	Nov 1, 2015	Nov 2, 2014	Nov 3, 2013
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss) attributable to common stock
	Net revenue
	Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss) attributable to common stock
	Net revenue
	Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

2018 Calculations

¹ Net profit margin = 100 × Net income (loss) attributable to common stock ÷ Net revenue
= 100 × hidden ÷ hidden = hidden

² Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to common stock ÷ Net revenue
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Broadcom Inc.’s adjusted net profit margin improved from 2016 to 2017 and from 2017 to 2018.

		Nov 4, 2018	Oct 29, 2017	Oct 30, 2016	Nov 1, 2015	Nov 2, 2014	Nov 3, 2013
	As Reported
	Selected Financial Data (US$ in millions)
	Net revenue
	Total assets
	Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Net revenue
	Adjusted total assets
	Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

2018 Calculations

¹ Total asset turnover = Net revenue ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Broadcom Inc.’s adjusted total asset turnover improved from 2016 to 2017 and from 2017 to 2018.

		Nov 4, 2018	Oct 29, 2017	Oct 30, 2016	Nov 1, 2015	Nov 2, 2014	Nov 3, 2013
	As Reported
	Selected Financial Data (US$ in millions)
	Total assets
	Total Broadcom Inc. stockholders’ equity
	Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted total assets
	Adjusted total Broadcom Inc. stockholders’ equity
	Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

2018 Calculations

¹ Financial leverage = Total assets ÷ Total Broadcom Inc. stockholders’ equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Broadcom Inc. stockholders’ equity
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Broadcom Inc.’s adjusted financial leverage increased from 2016 to 2017 and from 2017 to 2018.

		Nov 4, 2018	Oct 29, 2017	Oct 30, 2016	Nov 1, 2015	Nov 2, 2014	Nov 3, 2013
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss) attributable to common stock
	Total Broadcom Inc. stockholders’ equity
	Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss) attributable to common stock
	Adjusted total Broadcom Inc. stockholders’ equity
	Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

2018 Calculations

¹ ROE = 100 × Net income (loss) attributable to common stock ÷ Total Broadcom Inc. stockholders’ equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted net income (loss) attributable to common stock ÷ Adjusted total Broadcom Inc. stockholders’ equity
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Broadcom Inc.’s adjusted ROE improved from 2016 to 2017 and from 2017 to 2018.

		Nov 4, 2018	Oct 29, 2017	Oct 30, 2016	Nov 1, 2015	Nov 2, 2014	Nov 3, 2013
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss) attributable to common stock
	Total assets
	Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss) attributable to common stock
	Adjusted total assets
	Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29), 10-K (filing date: 2013-12-20).

2018 Calculations

¹ ROA = 100 × Net income (loss) attributable to common stock ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted net income (loss) attributable to common stock ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Broadcom Inc.’s adjusted ROA improved from 2016 to 2017 and from 2017 to 2018.

	Broadcom Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

Broadcom Inc. (AVGO)

Analysis of Income Taxes

Income Tax Accounting Policy

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Analyst Adjustments: Removal of Deferred Taxes

Broadcom Inc., Financial Data: Reported vs. Adjusted

Adjusted Ratios: Removal of Deferred Taxes (Summary)

Broadcom Inc., Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)