Marvell Technology Group Ltd.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

Three Months Ended

Year Ended

January 28,

January 30,

January 28,

January 30,

2017

2016

2017

2016

Cash flows from operating activities:

Net income (loss)

$        (80,091)

$            4,200

$         21,151

$       (811,400)

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

  by operating activities:

Depreciation and amortization

26,683

22,800

107,851

100,176

Share-based compensation

24,058

32,419

113,970

133,779

Amortization and write-off of acquired intangible assets

1,965

2,947

10,641

12,688

Impairment of long-lived assets and restructuring related charges

50,500

289

52,581

16,032

Other non-cash expense (income), net

(1,013)

7,885

7

13,811

Excess tax benefits from share-based compensation

(27)

1

(37)

(26)

Changes in assets and liabilities:

Accounts receivable

26,811

57,628

(12,084)

97,655

Inventories

18,381

69,544

29,325

90,586

Prepaid expenses and other assets (a)

12,300

(35,245)

9,722

(17,113)

Accounts payable

(38,694)

(62,163)

(28,153)

(105,898)

Accrued liabilities and other non-current liabilities (a)

64,238

(25,933)

(695,497)

720,798

Accrued employee compensation

7,597

(18,702)

18,016

(33,338)

Deferred income

6,138

(2,364)

14,072

(12,398)

Net cash provided by (used in) operating activities

118,846

53,306

(358,435)

205,352

Cash flows from investing activities:

Purchases of available-for-sale securities

(146,046)

(133,215)

(489,856)

(1,056,045)

Sales and maturities of available-for-sale securities

199,217

477,301

856,254

1,303,500

Purchase of time deposits

(75,000)

-

(275,000)

-

Maturities of time deposits

75,000

-

125,000

-

Distribution from (investments in) privately-held companies

(258)

(119)

16

(41)

Purchases of technology licenses

(1,870)

(1,579)

(10,309)

(8,236)

Purchases of property and equipment

(6,786)

(3,894)

(44,510)

(37,255)

Purchase of equipment previously leased 

-

-

-

(10,240)

Net proceeds from sale of equipment held for sale

-

-

-

10,007

Net cash provided by investing activities

44,257

338,494

161,595

201,690

Cash flows from financing activities:

Repurchase of common stock (b)

(125,033)

-

(181,564)

(260,875)

Proceeds from employee stock plans

62,383

21,369

74,219

80,717

Minimum tax withholding paid on behalf of employees 

 for net share settlement

(402)

(482)

(16,683)

(24,358)

Dividend payments to shareholders

(30,457)

(30,447)

(122,292)

(122,821)

Payments on technology license obligations

(7,117)

(1,112)

(20,965)

(12,528)

Excess tax benefits from share-based compensation

27

(1)

37

26

Net cash used in financing activities

(100,599)

(10,673)

(267,248)

(339,839)

Net increase (decrease) in cash and cash equivalents

62,504

381,127

(464,088)

67,203

Cash and cash equivalents at beginning of period

751,588

897,053

1,278,180

1,210,977

Cash and cash equivalents at end of period

$       814,092

$     1,278,180

$       814,092

$      1,278,180

(a) 

The Company agreed to pay 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 October 29, 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.