Marvell Technology Group Ltd.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

Three Months Ended

Nine Months Ended

October 29,

October 31,

October 29,

October 31,

2016

2015

2016

2015

Cash flows from operating activities:

Net income (loss)

$     72,616

$    (57,750)

$   101,242

$  (815,600)

Adjustments to reconcile net income (loss) to net cash provided

  by operating activities:

Depreciation and amortization

27,188

25,565

81,168

77,376

Share-based compensation

28,263

31,465

89,912

101,360

Amortization and write-off of acquired intangible assets

2,784

3,635

8,676

9,741

Non-cash restructuring and other related charges

1,056

14,270

2,081

15,743

Other non-cash expense (income), net

(930)

4,205

1,020

5,926

Excess tax benefits from share-based compensation

(5)

(2)

(10)

(27)

Changes in assets and liabilities:

Accounts receivable

(13,512)

36,793

(38,895)

40,027

Inventories

3,710

39,457

10,944

21,042

Prepaid expenses and other assets (a)

6,457

6,804

(2,578)

18,132

Accounts payable

(29,818)

(55,693)

10,541

(43,735)

Accrued liabilities and other non-current liabilities (a)

6,508

5,116

(759,735)

746,731

Accrued employee compensation

25,537

14,295

10,419

(14,636)

Deferred income

(8,393)

(1,566)

7,934

(10,034)

Net cash provided by (used in) operating activities

121,461

66,594

(477,281)

152,046

Cash flows from investing activities:

Purchases of available-for-sale securities

(140,087)

(356,465)

(343,810)

(922,830)

Sales and maturities of available-for-sale securities

170,472

356,409

657,037

826,199

Purchase of time deposits

(75,000)

-

(200,000)

-

Maturities of time deposits

50,000

-

50,000

-

Distribution from (investments in) privately-held companies

274

(130)

274

78

Purchases of technology licenses

(394)

(980)

(8,439)

(6,657)

Purchases of property and equipment

(13,347)

(9,041)

(37,724)

(33,361)

Purchase of equipment previously leased 

-

-

-

(10,240)

Net proceeds from sale of equipment held for sale

-

10,007

-

10,007

Net cash provided by (used in) investing activities

(8,082)

(200)

117,338

(136,804)

Cash flows from financing activities:

Repurchase of common stock (b)

(56,531)

(65,291)

(56,531)

(260,875)

Proceeds from employee stock plans

11,277

2,174

11,836

59,348

Minimum tax withholding paid on behalf of employees 

 for net share settlement

(899)

(869)

(16,281)

(23,876)

Dividend payments to shareholders

(30,699)

(30,270)

(91,835)

(92,374)

Payments on technology license obligations

(3,696)

(2,617)

(13,848)

(11,416)

Excess tax benefits from share-based compensation

5

2

10

27

Net cash used in financing activities

(80,543)

(96,871)

(166,649)

(329,166)

Net increase (decrease) in cash and cash equivalents

32,836

(30,477)

(526,592)

(313,924)

Cash and cash equivalents at beginning of period

718,752

927,530

1,278,180

1,210,977

Cash and cash equivalents at end of period

$   751,588

$   897,053

$   751,588

$   897,053

(a) 

In the nine months ended October 29, 2016, the Company paid a total of $750.0 million to CMU in connection with the settlement agreement that was reached in February 2016. Of this settlement, the Company recognized a charge of $736.0 million in fiscal 2016. The remaining $14.0 million was recorded in prepaid expenses and other assets, to be recognized in cost of goods sold over the remaining term of the license from February 2016 through April 2018. For further detail of the accounting for the settlement, see "Note 13 – Carnegie Mellon University Settlement" in the Notes to the Unaudited Condensed  Consolidated Financial Statements included in the Company's Quarterly Report on Form 10-Q for the quarter ended July 30, 2016. 

(b) 

Marvell records all repurchases of common stock consistent with the way it records investment purchases and sales, based on trade date in accordance with U.S. GAAP.