EXHIBIT 99.2
BROADCOM CORPORATION
Unaudited GAAP Consolidated Statements of Income
(In thousands, except per share amounts)
Unaudited GAAP Consolidated Statements of Income
(In thousands, except per share amounts)
Three Months Ended | ||||||||||||
March 31, | June 30, | September 30, | ||||||||||
2006 | 2006 | 2006 | ||||||||||
(Restated) | ||||||||||||
(In thousands, except per share data) | ||||||||||||
Net revenue | $ | 900,647 | $ | 941,131 | $ | 902,586 | ||||||
Cost of revenue | 434,209 | 457,374 | 450,164 | |||||||||
Gross profit | 466,438 | 483,757 | 452,422 | |||||||||
Operating expense: | ||||||||||||
Research and development | 251,694 | 280,024 | 272,565 | |||||||||
Selling, general and administrative | 112,899 | 121,982 | 125,281 | |||||||||
Amortization of purchased intangible assets | 1,083 | 605 | 329 | |||||||||
In-process research and development | 5,200 | — | — | |||||||||
Income from operations | 95,562 | 81,146 | 54,247 | |||||||||
Interest income, net | 23,738 | 28,194 | 31,826 | |||||||||
Other income, net | 1,771 | 1,448 | 299 | |||||||||
Income before income taxes | 121,071 | 110,788 | 86,372 | |||||||||
Provision (benefit) for income taxes | 3,373 | 4,702 | (23,809 | ) | ||||||||
Net income | $ | 117,698 | $ | 106,086 | $ | 110,181 | ||||||
Net income per share (basic) | $ | 0.22 | $ | 0.19 | $ | 0.20 | ||||||
Net income per share (diluted) | $ | 0.20 | $ | 0.18 | $ | 0.19 | ||||||
Weighted average shares (basic) | 538,968 | 547,790 | 547,927 | |||||||||
Weighted average shares (diluted) | 601,204 | 594,546 | 572,597 | |||||||||
Listed below are the items included in net income that management excludes in computing the non-GAAP financial measures and described under “Discussion of Non-GAAP Financial Measures”:
(1) | Cost of revenue: | |||||||||||||
Stock-based compensation | $ | 6,286 | $ | 7,105 | $ | 5,742 | ||||||||
Amortization of purchased intangible assets | 2,981 | 2,744 | 2,314 | |||||||||||
Employer payroll tax expense on certain stock option exercises | 600 | 158 | 26 | |||||||||||
$ | 9,867 | $ | 10,007 | $ | 8,082 | |||||||||
(2) | Research and development expense: | |||||||||||||
Stock-based compensation | $ | 70,005 | $ | 86,420 | $ | 78,191 | ||||||||
Charge related to equity award practices | — | — | 1,339 | |||||||||||
Employer payroll tax expense on certain stock option exercises | 5,721 | 1,698 | 365 | |||||||||||
$ | 75,726 | $ | 88,118 | $ | 79,895 | |||||||||
(3) | Selling, general and administrative expense: | |||||||||||||
Stock-based compensation | $ | 31,695 | $ | 38,940 | $ | 37,595 | ||||||||
Charge related to equity award practices | — | — | 260 | |||||||||||
Employer payroll tax expense on certain stock option exercises | 3,083 | 782 | 157 | |||||||||||
$ | 34,778 | $ | 39,722 | $ | 38,012 | |||||||||
(4) | Amortization of purchased intangible assets | $ | 1,083 | $ | 605 | $ | 329 | |||||||
In-process research and development | 5,200 | — | — | |||||||||||
$ | 6,283 | $ | 605 | $ | 329 | |||||||||
(5) | Other income, net: | |||||||||||||
Gains on strategic investments, net | $ | (700 | ) | $ | — | $ | — | |||||||
Non-operating gains | (434 | ) | (48 | ) | — | |||||||||
$ | (1,134 | ) | $ | (48 | ) | $ | — | |||||||
(6) | Provision (benefit) for income taxes: | |||||||||||||
Income tax benefits from adjustments to tax reserves of certain foreign subsidiaries | $ | (1,700 | ) | $ | — | $ | (27,900 | ) | ||||||
Income tax effects | (19,586 | ) | (20,217 | ) | (17,178 | ) | ||||||||
$ | (21,286 | ) | $ | (20,217 | ) | $ | (45,078 | ) | ||||||
BROADCOM CORPORATION
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands, except per share amounts)
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands, except per share amounts)
Three Months Ended | ||||||||||||
March 31, | June 30, | September 30, | ||||||||||
2006 | 2006 | 2006 | ||||||||||
(Restated) | ||||||||||||
(In thousands, except per share data) | ||||||||||||
GAAP net income | $ | 117,698 | $ | 106,086 | $ | 110,181 | ||||||
Non-GAAP Adjustments: | ||||||||||||
Stock-based compensation: | ||||||||||||
Cost of revenue | 6,286 | 7,105 | 5,742 | |||||||||
Research and development | 70,005 | 86,420 | 78,191 | |||||||||
Selling, general and administrative | 31,695 | 38,940 | 37,595 | |||||||||
Additional acquisition-related items: | ||||||||||||
Amortization of purchased intangible assets: | ||||||||||||
Cost of revenue | 2,981 | 2,744 | 2,314 | |||||||||
Other operating expense | 1,083 | 605 | 329 | |||||||||
In-process research and development | 5,200 | — | — | |||||||||
Employer payroll tax on certain stock option exercises: | ||||||||||||
Cost of revenue | 600 | 158 | 26 | |||||||||
Research and development | 5,721 | 1,698 | 365 | |||||||||
Selling, general and administrative | 3,083 | 782 | 157 | |||||||||
Charge related to equity award practices: | ||||||||||||
Research and development | — | — | 1,339 | |||||||||
Selling, general and administrative | — | — | 260 | |||||||||
Gains on strategic investments, net | (700 | ) | — | — | ||||||||
Non-operating gains | (434 | ) | (48 | ) | — | |||||||
Income tax benefits from adjustments to tax reserves of certain foreign subsidiaries | (1,700 | ) | — | (27,900 | ) | |||||||
Income tax effects | (19,586 | ) | (20,217 | ) | (17,178 | ) | ||||||
Total of non-GAAP adjustments | 104,234 | 118,187 | 81,240 | |||||||||
Non-GAAP net income | $ | 221,932 | $ | 224,273 | $ | 191,421 | ||||||
GAAP weighted average shares (diluted) | 601,204 | 594,546 | 572,597 | |||||||||
Non-GAAP adjustment | 16,987 | 21,575 | 22,150 | |||||||||
Non-GAAP weighted average shares (diluted) | 618,191 | 616,121 | 594,747 | |||||||||
GAAP net income per share (diluted) | $ | 0.20 | $ | 0.18 | $ | 0.19 | ||||||
Non-GAAP adjustments detailed above | 0.16 | 0.18 | 0.13 | |||||||||
Non-GAAP net income per share (diluted) | $ | 0.36 | $ | 0.36 | $ | 0.32 | ||||||