Overview Key strengths Key risks Considerable scale, industry leading margins across both semiconductor and software businesses, and strong free cash flow generation. Acquisition-driven growth strategy, resulting in frequent releveraging, with leverage likely to increase to the mid-2x area after $32 billion of VMWare financing. Robust and diverse semiconductor portfolio supplying data center, enterprise, and networking markets. Limited track record of managing large enterprise software businesses at aggressive margin profiles. A growing share of software revenue--accelerated by the announced acquisition of VMWare--will moderate operating performance cyclicality. Legacy semiconductor business remains cyclical and exposed to the inherent volatility of the industry. The acquisition of VMWare Inc. will increase the share of revenue Broadcom derives from software to nearly 50%, shifting the firm?s
