Document and Company Informatio
Document and Company Information (USD $) | ||
In Billions, except Share data in Millions | 12 Months Ended
Dec. 31, 2009 | Jun. 30, 2009
|
Entity Registrant Name | BROADCOM CORP | |
Entity Central Index Key | 0001054374 | |
Document Type | 10-K | |
Document Period End Date | 2009-12-31 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | 10.8 | |
Class A common stock, $.0001 par value: Authorized shares - 2,500,000 Issued and outstanding shares - 438,557 in 2009 and 426,095 in 2008 | ||
Entity Common Stock, Shares Outstanding | 438.6 | |
Class B common stock, $.0001 par value: Authorized shares - 400,000 Issued and outstanding shares - 56,999 in 2009 and 62,923 in 2008 | ||
Entity Common Stock, Shares Outstanding | 57 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Thousands | Dec. 31, 2009
| Dec. 31, 2008
|
Current assets: | ||
Cash and cash equivalents | $1,397,093 | $1,190,645 |
Short-term marketable securities | 532,281 | 707,477 |
Accounts receivable (net of allowance for doubtful accounts of $6,787 in 2009 and $5,354 in 2008) | 508,627 | 372,311 |
Inventory | 362,428 | 366,106 |
Prepaid expenses and other current assets | 113,903 | 114,674 |
Total current assets | 2,914,332 | 2,751,213 |
Property and equipment, net | 229,317 | 234,691 |
Long-term marketable securities | 438,616 | 0 |
Goodwill | 1,329,614 | 1,279,243 |
Purchased intangible assets, net | 150,927 | 61,958 |
Other assets | 64,436 | 66,160 |
Total assets | 5,127,242 | 4,393,265 |
Current liabilities: | ||
Accounts payable | 437,353 | 310,487 |
Wages and related benefits | 190,315 | 151,551 |
Deferred revenue and income | 87,388 | 12,338 |
Accrued liabilities | 433,294 | 242,727 |
Total current liabilities | 1,148,350 | 717,103 |
Commitments and Contingencies | ||
Long-term deferred revenue | 608 | 3,898 |
Other long-term liabilities | 86,438 | 65,197 |
Shareholders' equity: | ||
Convertible preferred stock, $.0001 par value: Authorized shares - 6,432 - none issued and outstanding | 0 | 0 |
Additional paid-in capital | 11,153,060 | 10,930,315 |
Accumulated deficit | (7,259,069) | (7,324,330) |
Accumulated other comprehensive income (loss) | (2,195) | 1,033 |
Total shareholders' equity | 3,891,846 | 3,607,067 |
Total liabilities and shareholders' equity | 5,127,242 | 4,393,265 |
Class A common stock, $.0001 par value: Authorized shares - 2,500,000 Issued and outstanding shares - 438,557 in 2009 and 426,095 in 2008 | ||
Shareholders' equity: | ||
Common stock | 44 | 43 |
Class B common stock, $.0001 par value: Authorized shares - 400,000 Issued and outstanding shares - 56,999 in 2009 and 62,923 in 2008 | ||
Shareholders' equity: | ||
Common stock | $6 | $6 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
In Thousands | Dec. 31, 2009
| Dec. 31, 2008
|
Current assets: | ||
Allowance for doubtful accounts | $6,787 | $5,354 |
Shareholders' equity: | ||
Convertible preferred stock, par value | 0.0001 | 0.0001 |
Convertible preferred stock, shares authorized | 6,432 | 6,432 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Class A common stock, $.0001 par value: Authorized shares - 2,500,000 Issued and outstanding shares - 438,557 in 2009 and 426,095 in 2008 | ||
Shareholders' equity: | ||
Common stock, par value | 0.0001 | 0.0001 |
Common stock, shares authorized | 2,500,000 | 2,500,000 |
Common stock, shares issued | 438,557 | 426,095 |
Common stock, shares outstanding | 438,557 | 426,095 |
Class B common stock, $.0001 par value: Authorized shares - 400,000 Issued and outstanding shares - 56,999 in 2009 and 62,923 in 2008 | ||
Shareholders' equity: | ||
Common stock, par value | 0.0001 | 0.0001 |
Common stock, shares authorized | 400,000 | 400,000 |
Common stock, shares issued | 56,999 | 62,923 |
Common stock, shares outstanding | 56,999 | 62,923 |
Consolidated Statements of Inco
Consolidated Statements of Income (USD $) | |||
In Thousands, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Net revenue: | |||
Product revenue | $4,272,726 | $4,485,239 | $3,739,312 |
Income from Qualcomm Agreement (see Note 2) | 170,611 | 0 | 0 |
Licensing revenue | 46,986 | 172,886 | 37,083 |
Total net revenue | 4,490,323 | 4,658,125 | 3,776,395 |
Costs and expenses: | |||
Cost of product revenue | 2,210,559 | 2,213,015 | 1,832,178 |
Research and development | 1,534,918 | 1,497,668 | 1,348,508 |
Selling, general and administrative | 479,362 | 543,117 | 492,737 |
Amortization of purchased intangible assets | 14,548 | 3,392 | 1,027 |
Impairment of goodwill and other long-lived assets | 18,895 | 171,593 | 1,500 |
Settlement costs, net | 118,468 | 15,810 | 0 |
Restructuring costs (reversals) | 7,501 | (1,000) | 0 |
In-process research and development | 0 | 42,400 | 15,470 |
Charitable contribution | 50,000 | 0 | 0 |
Total operating costs and expenses | 4,434,251 | 4,485,995 | 3,691,420 |
Income from operations | 56,072 | 172,130 | 84,975 |
Interest income, net | 13,901 | 52,201 | 131,069 |
Other income (expense), net | 2,218 | (2,016) | 3,412 |
Income before income taxes | 72,191 | 222,315 | 219,456 |
Provision for income taxes | 6,930 | 7,521 | 6,114 |
Net income | $65,261 | $214,794 | $213,342 |
Net income per share (basic) | 0.13 | 0.42 | 0.39 |
Net income per share (diluted) | 0.13 | 0.41 | 0.37 |
Weighted average shares (basic) | 494,038 | 512,648 | 542,412 |
Weighted average shares (diluted) | 512,645 | 524,208 | 577,682 |
1_Consolidated Statements of In
Consolidated Statements of Income (Stock-based Compensation Expense) (USD $) | |||
In Thousands | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Stock-based Compensation Expense Included in the Following: | |||
Cost of product revenue | $24,545 | $24,997 | $26,470 |
Research and development | 351,884 | 358,018 | 353,649 |
Selling, general and administrative | $119,918 | $126,359 | $139,533 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders Equity and Comprehensive Income (USD $) | |||||
In Thousands | Additional Paid-In Capital
| Accumulated Deficit
| Accumulated Other Comprehensive Income (Loss)
| Common Stock
| Total
|
Balance, Shares at Dec. 31, 2006 | 548,314 | ||||
Balance at Dec. 31, 2006 | $11,948,908 | ($7,757,202) | ($95) | $55 | $4,191,666 |
Cumulative effect to prior year accumulated deficit related to the adoption of FIN 48 | 4,736 | 4,736 | |||
Shares issued pursuant to stock awards, Shares | 22,689 | ||||
Shares issued pursuant to stock awards, net | 234,616 | 234,616 | |||
Employee stock purchase plan, Shares | 2,044 | ||||
Employee stock purchase plan | 55,350 | 55,350 | |||
Repurchases of Class A common stock, Shares | (35,789) | ||||
Repurchases of Class A common stock | (1,156,279) | (1) | (1,156,280) | ||
Stock-based compensation expense | 519,652 | 519,652 | |||
Stock option exchange | (26,205) | (26,205) | |||
Components of comprehensive income: | |||||
Translation adjustments | (729) | (729) | |||
Net income | 213,342 | 213,342 | |||
Balance, Shares at Dec. 31, 2007 | 537,258 | ||||
Balance at Dec. 31, 2007 | 11,576,042 | (7,539,124) | (824) | 54 | 4,036,148 |
Shares issued pursuant to stock awards, Shares | 12,573 | ||||
Shares issued pursuant to stock awards, net | 34,059 | 1 | 34,060 | ||
Employee stock purchase plan, Shares | 4,413 | ||||
Employee stock purchase plan | 78,720 | 78,720 | |||
Repurchases of Class A common stock, Shares | (65,226) | ||||
Repurchases of Class A common stock | (1,267,880) | (6) | (1,267,886) | ||
Stock-based compensation expense | 509,374 | 509,374 | |||
Components of comprehensive income: | |||||
Unrealized gain (loss) on marketable securities | 5,213 | 5,213 | |||
Translation adjustments | (3,356) | (3,356) | |||
Net income | 214,794 | 214,794 | |||
Balance, Shares at Dec. 31, 2008 | 489,018 | ||||
Balance at Dec. 31, 2008 | 10,930,315 | (7,324,330) | 1,033 | 49 | 3,607,067 |
Shares issued pursuant to stock awards, Shares | 15,680 | ||||
Shares issued pursuant to stock awards, net | 59,054 | 1 | 59,055 | ||
Employee stock purchase plan, Shares | 5,858 | ||||
Employee stock purchase plan | 85,491 | 85,491 | |||
Repurchases of Class A common stock, Shares | (15,000) | ||||
Repurchases of Class A common stock | (421,869) | (421,869) | |||
Stock-based compensation expense | 500,069 | 500,069 | |||
Components of comprehensive income: | |||||
Unrealized gain (loss) on marketable securities | (4,624) | (4,624) | |||
Translation adjustments | 1,396 | 1,396 | |||
Net income | 65,261 | 65,261 | |||
Balance, Shares at Dec. 31, 2009 | 495,556 | ||||
Balance at Dec. 31, 2009 | $11,153,060 | ($7,259,069) | ($2,195) | $50 | $3,891,846 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | |||
In Thousands | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Operating activities | |||
Net income | $65,261 | $214,794 | $213,342 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 74,435 | 78,236 | 64,082 |
Stock-based compensation expense: | |||
Stock options and other awards | 159,790 | 224,244 | 324,261 |
Restricted stock units | 336,557 | 285,130 | 195,391 |
Acquisition-related items: | |||
Amortization of purchased intangible assets | 30,744 | 19,249 | 14,512 |
Impairment of goodwill and other long-lived assets | 18,895 | 171,593 | 1,500 |
In-process research and development | 0 | 42,400 | 15,470 |
Loss on strategic investments, net | 0 | 4,266 | 1,809 |
Non-cash restructuring reversals, net | (1,944) | (1,000) | 0 |
Loss (gain) on sale of marketable securities | (1,046) | 1,781 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (131,656) | (3,294) | 18,400 |
Inventory | 12,013 | (112,173) | (27,082) |
Prepaid expenses and other assets | 8,714 | (11,273) | (59,691) |
Accounts payable | 122,985 | 616 | 13,698 |
Deferred revenue and income | 71,760 | (7,736) | 22,099 |
Accrued settlement costs | 170,500 | (2,000) | (2,000) |
Other accrued and long-term liabilities | 49,885 | 14,782 | 29,526 |
Net cash provided by operating activities | 986,893 | 919,615 | 825,317 |
Investing activities | |||
Net purchases of property and equipment | (66,570) | (82,808) | (150,427) |
Net cash paid for acquired companies | (165,258) | (170,541) | (219,324) |
Sales (purchases) of strategic investments | (2,000) | (355) | 312 |
Purchases of marketable securities | (1,138,681) | (1,115,704) | (667,384) |
Proceeds from sales and maturities of marketable securities | 871,152 | 624,026 | 1,091,228 |
Net cash provided by (used in) investing activities | (501,357) | (745,382) | 54,405 |
Financing activities | |||
Repurchases of Class A common stock | (421,869) | (1,283,952) | (1,140,213) |
Proceeds from issuance of common stock | 227,209 | 171,853 | 358,629 |
Minimum tax withholding paid on behalf of employees for restricted stock units | (84,428) | (58,061) | (69,676) |
Net cash used in financing activities | (279,088) | (1,170,160) | (851,260) |
Increase (decrease) in cash and cash equivalents | 206,448 | (995,927) | 28,462 |
Cash and cash equivalents at beginning of year | 1,190,645 | 2,186,572 | 2,158,110 |
Cash and cash equivalents at end of year | 1,397,093 | 1,190,645 | 2,186,572 |
Supplemental disclosure of cash flow information | |||
Income taxes paid | $16,747 | $9,799 | $6,463 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Our Company Broadcom Corporation (including our subsidiaries, referred to collectively in this Report as Broadcom, we, our and us) is a major technology innovator and global leader in semiconductors for wired and wireless communications. Our system-on-a-chip (SoC) and software solutions enable the delivery of voice, video, data and rich multimedia content to mobile devices, consumer electronics (CE) devices in the home and business networking products for the workplace, data centers, service providers and carriers. We provide the industrys broadest portfolio of cutting-edge SoC solutions to manufacturers of computing and networking equipment, CE and broadband access products, and mobile devices. Basis of Presentation Our consolidated financial statements include the accounts of Broadcom and our subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In June 2009 the Financial Accounting Standards Board, or FASB, established the Accounting Standards Codification, or Codification, as the source of authoritative GAAP recognized by the FASB. The Codification is effective in the first interim and annual periods ending after September15, 2009 and had no effect on our consolidated financial statements. Certain prior period amounts in the consolidated statements of income have been reclassified to conform with the current period presentation of the separate display of product revenue, income from the Qualcomm agreement and licensing revenue (see Note2). We have evaluated subsequent events through February3, 2010, the date of issuance of the consolidated financial statements (see Note 14). Foreign Currency The functional currency for most of our international operations is the U.S.dollar. The functional currency for a small number of our foreign subsidiaries is the local currency. Assets and liabilities denominated in foreign currencies are translated using the exchange rates on the balance sheet dates. Revenues and expenses are translated using the average exchange rates prevailing during the year. Any translation adjustments resulting from this process are shown separately as a component of accumulated other comprehensive income (loss) within shareholders equity in the consolidated balance sheets. Foreign currency transaction gains and losses are reported in other income (expense), net in the consolidated statements of income. Use of Estimates The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of total net revenue and expenses in the reporting periods. We regularly evaluate estimates and assumptions related to revenue recognition, rebates, allowances for doubtful accounts, sales returns and allowances, warranty reserves, inventory reserves, stock-based compensation expense, goodwill and purchased intangible asset valuations, strategic investments, d |
Supplemental Financial Informat
Supplemental Financial Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Supplemental Financial Information [Abstract] | |
Supplemental Financial Information | 2. Supplemental Financial Information Inventory The following table presents details of our inventory: December31, 2009 2008 (In thousands) Work in process $ 157,148 $ 166,811 Finished goods 205,280 199,295 $ 362,428 $ 366,106 Property and Equipment The following table presents details of our property and equipment: December31, Useful Life 2009 2008 (In years) (In thousands) Leasehold improvements 1 to 10 $ 163,302 $ 154,594 Office furniture and equipment 3 to 7 26,382 25,059 Machinery and equipment 3 to 5 235,142 193,993 Computer software and equipment 2 to 4 122,213 113,501 Construction in progress N/A 6,666 3,893 553,705 491,040 Less accumulated depreciation and amortization (324,388 ) (256,349 ) $ 229,317 $ 234,691 In 2009 and 2008, we disposed of property and equipment with net book values of $2.6million and $3.8million, respectively. In addition, we wrote down $0.3million and $19.8million of property and equipment primarily included in our Mobile Platforms reporting unit in 2009 and 2008, respectively. See Note9. Goodwill The following table summarizes the activity related to the carrying value of our goodwill: Year Ended December31, 2009 2008 2007 (In thousands) Beginning balance $ 1,279,243 $ 1,376,721 $ 1,185,145 Goodwill recorded in connection with acquisitions (Note3) 52,512 43,891 196,019 Contingent consideration 10,000 10,155 Impairment of goodwill (149,658 ) Escrow related and other (2,141 ) (1,711 ) (14,598 ) Ending balance $ 1,329,614 $ 1,279,243 $ 1,376,721 For a detailed discussion of our annual impairment assessment of goodwill, see Note9. Purchased Intangible Assets The following table presents details of our purchased intangible assets: December31, December31, 2009 2008 Accumulated Accumulated Gross Amortization(1) Net Gross Amortization Net (In thousands) Developed technology $ 278,297 $ (207,517 ) $ 70,780 $ 220,669 $ (190,074 ) $ 30,595 In-process researc |
Business Combinations
Business Combinations | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Business Combinations [Abstract] | |
Business Combinations | 3. Business Combinations From January1, 2007 through December31, 2009 we completed several acquisitions. The consolidated financial statements include the results of operations of these acquired companies commencing as of their respective acquisition dates. In December 2009 we acquired Dune Networks, Inc., which specializes in the design of switch fabric solutions for data center networking equipment, for $185.4million, exclusive of $27.8million of cash acquired. We issued 0.5million restricted stock units to certain former employees of Dune Networks who became employees of Broadcom upon the closing. We did not assume any of Dune Networks equity awards. The restricted stock units had a fair value of $13.9million, of which $0.9million was recorded as goodwill, in exchange for all of the outstanding and unvested stock options which will be recognized as stock-based compensation expense over the next four years. In addition, we recorded a settlement cost of $12.1million related to a payment to the Israeli government associated with a post-acquisition technology transfer fee. We also made three additional acquisitions in 2009 totaling $12.1million, which includes contingent consideration of $1.5million relating to certain performance goals. In October 2008 we acquired certain assets of the digital TV business of Advance Micro Devices, Inc., or DTV Business of AMD, which designs and markets applications and communications processors for the digital television market, for $140.7million. Broadcom issued 1.2million restricted stock units with a fair value of $19.7million to certain former employees of AMD, who became employees of Broadcom upon the closing. We did not assume any of AMDs equity awards. In 2009 we received $2.1million from AMD for a final purchase price adjustment. In February 2008 we acquired Sunext Design, Inc, a wholly-owned subsidiary of Sunext Technology Corporation, Ltd., which specializes in the design of optical storage semiconductor products, for $9.9million. In connection with our acquisition of Sunext Design, Inc., we were required to pay up to an additional $38.0million in license fees and royalties related to optical disk reader and writer technology, assuming Sunext Technology successfully delivered the technologies as defined in a separate license agreement. We have paid $34.0million related to these technologies and prepaid royalties, which concludes our obligations to purchase technology under the terms of the agreement. In July 2007 we acquired Global Locate, Inc., a privately-held, fabless provider of industry-leading global positioning system and assisted GPS semiconductor products and software, for $139.7million. In connection with our acquisition of Global Locate, Inc. in 2007, additional cash consideration of up to $80.0million could have been paid to the former holders of Global Locate capital stock and other rights upon satisfaction of certain future performance goals. We previously paid $20.2million in 2007 and 2008 to the former holders of Global Locate capital stock and other rights upon satisfaction of certain performance goals. The time remaining for completion of the o |
Cash, Cash Equivalents and Mark
Cash, Cash Equivalents and Marketable Securities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Cash, Cash Equivalents and Marketable Securities [Abstract] | |
Cash, Cash Equivalents and Marketable Securities | 4. Cash, Cash Equivalents and Marketable Securities At December31, 2009 we had $2.368billion in cash, cash equivalents and marketable securities. We maintain an investment portfolio of various security holdings, types and maturities. The fair value of substantially all of our cash equivalents and marketable securities is determined based on Level1 inputs, which consist of quoted prices in active markets for identical assets. The fair value of commercial paper included in cash equivalents was determined based on Level2 inputs, which were derived based on quoted prices for identical or similar assets, which had few transactions near the measurement period. We place our cash investments in instruments that meet credit quality standards, as specified in our investment policy guidelines. These guidelines also limit the amount of credit exposure to any one issue, issuer or type of instrument. All of our marketable securities are rated AA, Aa2, A-1 or P-1 or above by the major credit rating agencies. A summary of our cash, cash equivalents and short- and long-term marketable securities by major security type follows: Short-Term Long-Term Cash and Marketable Marketable Cash Equivalents Securities Securities Total (In thousands) December31, 2009 Cash $ 74,044 $ $ $ 74,044 Time deposits 571,959 571,959 U.S. Treasury and agency money market funds 515,930 515,930 U.S. Treasury and agency obligations 521,022 436,518 957,540 Commercial paper and corporate bonds(1) 79,988 11,259 2,098 93,345 Institutional money market funds 155,172 155,172 $ 1,397,093 $ 532,281 $ 438,616 $ 2,367,990 December31, 2008 Cash $ 88,366 $ $ $ 88,366 Time deposits 273,654 273,654 U.S. Treasury and agency money market funds 828,586 828,586 U.S. Treasury and agency obligations 703,722 703,722 Commercial paper and corporate bonds 3,755 3,755 Institutional money market funds 39 39 $ 1,190,645 $ 707,477 $ $ 1,898,122 (1) The fair value of the $80.0million of commercial paper included in cash equivalents was determined based on Level2 inputs, which were derived based on quoted prices for identical or similar assets, which had few transactions near the mea |
Income Taxes
Income Taxes | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | 5. Income Taxes For financial reporting purposes, income (loss) before income taxes includes the following components: Year Ended December31, 2009 2008 2007 (In thousands) United States $ (365,563 ) $ (424,374 ) $ (146,945 ) Foreign 437,754 646,689 366,401 $ 72,191 $ 222,315 $ 219,456 A reconciliation of the provision for income taxes at the federal statutory rate compared to our provision for income taxes follows: Year Ended December31, 2009 2008 2007 (In thousands) Statutory federal provision for income taxes $ 25,266 $ 77,810 $ 76,809 Increase (decrease) in taxes resulting from: In-process research and development 3,815 5,415 Impairment of goodwill 20,779 State taxes, net of federal benefit (163 ) 394 (1,108 ) Refundable research and development credit (3,037 ) (3,000 ) Benefit of tax credits (79,984 ) (42,087 ) (70,104 ) Valuation allowance changes 193,096 (504,723 ) 60,778 Increase in deferred tax assets resulting from changes in tax law (6,654 ) Reversal of taxes previously accrued (including penalties and interest) (7,649 ) (6,498 ) (6,000 ) Tax rate differential on foreign earnings (155,351 ) (145,779 ) (112,633 ) Stock-based compensation expense 56,493 91,253 52,251 Foreign dividend distribution 491,240 Other (15,087 ) 24,317 706 Provision for income taxes $ 6,930 $ 7,521 $ 6,114 The income tax provision consists of the following components: Year Ended December31, 2009 2008 2007 (In thousands) Current: Federal $ (1,607 ) $ (2,966 ) $ State (250 ) 606 (1,704 ) Foreign 14,202 11,649 7,935 12,345 9,289 6,231 Deferred: Federal State Foreign (5,415 ) (1,768 ) (117 ) (5,415 ) (1,768 ) (117 ) $ 6,930 $ 7,521 $ 6,114 Def |
Commitments and Other Contractu
Commitments and Other Contractual Obligations | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Commitments and Other Contractual Obligations [Abstract] | |
Commitments and Other Contractual Obligations | 6. Commitments and Other Contractual Obligations Commitments We lease facilities in Irvine (our corporate headquarters) and SantaClara County, California. Each of these facilities includes administration, sales and marketing, research and development and operations functions. In addition to our principal design facilities in Irvine and SantaClara County, we lease design facilities throughout the United States. Internationally, we lease a distribution center that includes engineering design and administrative facilities in Singapore as well as engineering design and administrative facilities in several other countries. The following table summarizes our contractual obligations and commitments as of December31, 2009: Obligations by Year 2010 2011 2012 2013 2014 Thereafter Total (In thousands) Operating leases $ 111,142 $ 79,540 $ 55,562 $ 39,307 $ 38,300 $ 107,709 $ 431,560 Inventory and related purchase obligations 477,700 477,700 Other purchase obligations 80,908 5,427 1,550 87,885 Estimated settlement costs 176,707 176,707 Unrecognized tax benefits 400,782 400,782 Total $ 1,247,239 $ 84,967 $ 57,112 $ 39,307 $ 38,300 $ 107,709 $ 1,574,634 Facilities rent expense in 2009, 2008 and 2007 was $69.6million, $68.0million and $65.2million, respectively. Inventory and related purchase obligations represent purchase commitments for silicon wafers and assembly and test services. We depend upon third party subcontractors to manufacture our silicon wafers and provide assembly and test services. Due to lengthy subcontractor lead times, we must order these materials and services from subcontractors well in advance. We expect to receive and pay for these materials and services within the ensuing six months. Our subcontractor relationships typically allow for the cancellation of outstanding purchase orders, but require payment of all expenses incurred through the date of cancellation. Other purchase obligations represent purchase commitments for lab test equipment, computer hardware, information systems infrastructure, mask and prototyping costs, and other purchase commitments made in the ordinary course of business. Estimated settlement costs represent costs that we expect to pay within the next year. See Note10. For purposes of the table above, obligations for the purchase of goods or services are defined as agreements that are enforceable and legally binding and that specify all significant term |
Shareholders Equity
Shareholders Equity | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Stockholders' Equity [Abstract] | |
Shareholders' Equity | 7. Shareholders Equity Common Stock At December31, 2009 we had 2,500,000,000 authorized shares of ClassA common stock and 400,000,000 authorized shares of ClassB common stock. The shares of ClassA common stock and ClassB common stock are substantially identical, except that holders of ClassA common stock are entitled to one vote for each share held, and holders of ClassB common stock are entitled to ten votes for each share held, on all matters submitted to a vote of the shareholders. In addition, holders of ClassB common stock are entitled to vote separately on the proposed issuance of additional shares of ClassB common stock in certain circumstances. The shares of ClassB common stock are not publicly traded. Each share of ClassB common stock is convertible at any time at the option of the holder into one share of ClassA common stock and in most instances automatically converts upon sale or other transfer. The ClassA common stock and ClassB common stock are sometimes collectively referred to herein as common stock. In 2009, 2008 and 2007, 5.9million shares, 6.1million shares and 6.4million shares, respectively, of ClassB common stock were automatically converted into a like number of shares of ClassA common stock upon sale or other transfer pursuant to the terms of our Articles of Incorporation. In June 2006 we clarified that we are only authorized to issue 6,432,161shares of convertible preferred stock and eliminated all statements referring to the rights, preferences, privileges and restrictions of SeriesA, SeriesB, SeriesC, SeriesD and SeriesE preferred stock, all outstanding shares of which automatically converted into shares of ClassB common stock upon consummation of our initial public offering. Share Repurchase Programs From time to time our Board of Directors has authorized various programs to repurchase shares of our ClassA common stock depending on market conditions and other factors. Under such programs, we repurchased a total of 15.0million, 65.2million and 35.8million shares of ClassA common stock at weighted average prices of $28.12, $19.44 and $32.31 per share, in the years ended December31, 2009, 2008 and 2007, respectively. In July 2008 the Board of Directors authorized our current program to repurchase shares of Broadcoms ClassA common stock having an aggregate value of up to $1.0billion. Repurchases under the program may be made from time to time during the period that commenced July31, 2008 and continuing through and including July31, 2011. As of December31, 2009, $154.0million remained authorized for repurchase under this program. Repurchases under our share repurchase programs were and will be made in open market or privately negotiated transactions in compliance with Rule10b-18 promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Registration Statements We have filed a universal shelf registration statement on SEC FormS-3 and an acquisition shelf registration statement on the SEC FormS-4. The universal shelf registration statement on FormS-3 permits Broadcom to sell, in one or more public offerings, shares of our ClassA common st |
Employee Benefit Plans
Employee Benefit Plans | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | 8. Employee Benefit Plans Employee Stock Purchase Plan We have an employee stock purchase plan, or ESPP, for all eligible employees. Under the ESPP, employees may purchase shares of our ClassA common stock at six-month intervals at 85% of fair market value (calculated in the manner provided in the plan). Employees purchase such stock using payroll deductions, which may not exceed 15% of their total cash compensation. Shares of ClassA common stock are offered under the ESPP through a series of successive offering periods, generally with a maximum duration of 24months, subject to an additional 3-month extension under certain circumstances. The plan imposes certain limitations upon an employees right to acquire ClassA common stock, including the following: (i)no employee may purchase more than 9,000shares of ClassA common stock on any one purchase date, (ii)no employee may be granted rights to purchase more than $25,000 worth of ClassA common stock for each calendar year that such rights are at any time outstanding, and (iii)the maximum number of shares of ClassA common stock purchasable in total by all participants in the ESPP on any purchase date is limited to 4.0million shares. The number of shares of ClassA common stock reserved for issuance under the plan automatically increases in January each year. The increase is equal to a percentage of the total number of shares of common stock outstanding on the last trading day of the immediately preceding year, subject to an annual share limit. In March 2007 the Board of Directors approved an amendment and restatement of the ESPP, as previously amended and restated, to increase the limitation on the amount by which the share reserve of the plan is to automatically increase each year to not more than 10million shares of ClassA common stock. This amendment and restatement was approved by the shareholders at the Annual Meeting of Shareholders held in May 2007. In March 2008 the Board of Directors approved an amendment and restatement of the ESPP, as previously amended and restated, to (i)extend the term of the plan through April30, 2018, (ii)increase the number of shares of ClassA common stock that will be automatically added to the share reserve on the first trading day of January in each calendar year from 1.00% to 1.25% of the total number of shares of common stock outstanding on the last trading day of the immediately preceding calendar year, and (iii)effect various technical revisions. This amendment and restatement was approved by the shareholders at the Annual Meeting of Shareholders held in June 2008. In 2009, 2008 and 2007, 5.9million, 4.4million and 2.0million shares, respectively, were issued under this plan at average per share prices of $14.59, $17.84 and $27.07, respectively. At December31, 2009, 11.1million shares were available for future issuance under this plan. Stock Incentive Plans We have in effect stock incentive plans under which incentive stock options have been granted to employees and restricted stock units and non-qualified stock options have been granted to employees and non-employee members of the Board of Directors. Our 1998 |
Goodwill and Long-Lived Assets
Goodwill and Long-Lived Assets | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Goodwill and Long Lived Assets [Abstract] | |
Goodwill and Long-Lived Assets | 9. Goodwill and Long-Lived Assets We performed annual impairment assessments of the carrying value of goodwill in October 2009, 2008 and 2007. We compared the carrying value of each of our reporting units that existed at those times to its estimated fair value. We estimated the fair values of our reporting units primarily using the income approach valuation methodology that includes the discounted cash flow method, taking into consideration the market approach and certain market multiples as a validation of the values derived using the discounted cash flow methodology. The discounted cash flows for each reporting unit were based on discrete financial forecasts developed by management for planning purposes. Cash flows beyond the discrete forecasts were estimated using a terminal value calculation, which incorporated historical and forecasted financial trends for each identified reporting unit and considered long-term earnings growth rates for publicly traded peer companies. Future cash flows were discounted to present value by incorporating appropriate present value techniques. Specifically, the income approach valuations included the following assumptions: Valuation Assumptions 2009 2008 Discount Rate 12.0% - 17.5% 15.0% - 17.0% Perpetual Growth Rate 4.0% 4.0% - 5.0% Tax 17.0% 10.0% Risk Free Rate 4.0% 4.3% Peer Company Beta 1.24 - 1.69 1.83 - 2.50 Based on our 2009 impairment assessment at December31, 2009, we believe we have no at-risk goodwill. At December31, 2009 our Broadband Communications, Enterprise Networking, Wireless Connectivity and Mobile Platforms reporting units had the following goodwill balances, $483.0million, $587.5million and $259.1million and none, respectively. At December31, 2008 our Broadband Communications, Enterprise Networking, Wireless Connectivity and Mobile Platforms reporting units had the following goodwill balances, $483.8million, $536.4million and $259.1million and none, respectively. Upon completion of the October 2009 and 2007 annual impairment assessments, we determined no impairment was indicated as the estimated fair value of each of the reporting units exceeded its respective carrying value. Upon completion of the October 2008 assessment, we determined that the carrying value of our Mobile Platforms reporting unit exceeded its estimated fair value. Because indicators of impairment existed for this business group, we performed the second step of the test to determine the fair value of the goodwill of our Mobile Platforms reporting unit. The implied fair value of goodwill was determined in the same manner utilized to estimate the amount of goodwill recognized in a business combination. As part of the second step of the impairment test performed in 2008, we calculated the fair value of certain assets, including developed technology, IPRD assets and customer relationships. To determine the implied value of goodwill, fair values were allocated to the assets and liabilities of the Mobile Platforms reporting unit as of October1, 2008. The implied fair value of |
Settlement Costs, Net
Settlement Costs, Net | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Settlement Costs, Net [Abstract] | |
Settlement Costs, Net | 10. Settlement Costs, Net In 2009 we incurred settlement costs of $183.8million partially offset by settlement gains of $65.3million, resulting in $118.5million of net settlement costs. In December 2009 we agreed in principle to the settlement of the securities class action litigation pending against Broadcom and certain of its current and former officers and directors. Under the proposed settlement, the claims will be dismissed with prejudice and released in exchange for a $160.5million cash payment by Broadcom. We recorded the settlement amount as a one-time charge in our statement of income for the three months and year ended December31, 2009 as our best estimate of our liability based upon current facts and circumstances. The proposed settlement remains subject to the satisfaction of various conditions, including negotiation and execution of a final stipulation of settlement and court approval. If these conditions are satisfied, the proposed settlement will resolve all claims in the settlement of the securities class action litigation against Broadcom and the individual defendants. We recorded settlement gains of $65.3million related to the Qualcomm Agreement in 2009. For a further discussion of this agreement, see Note2. In addition, we recorded settlement costs of $12.1million related to a payment to the Israeli government associated with a post-acquisition technology transfer fee related to our acquisition of Dune Networks. We also recorded $11.2million in settlement costs in 2009 for estimated settlements associated with certain employment tax items, other employment matters and a patent infringement claim. In April 2008 we entered into a settlement with the SEC relating to the previously-disclosed SEC investigation of Broadcoms historical stock option granting practices. Without admitting or denying the SECs allegations, we agreed to pay a civil penalty of $12.0million, which we recorded as a settlement cost in 2008. The settlement was approved by the United States District Court for the Central District of California in late April 2008. In addition, we settled a patent infringement claim for $3.8million in 2008. For further discussion of income tax and litigation matters, see Notes5 and 11, respectively. |
Litigation
Litigation | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Litigation [Abstract] | |
Litigation | 11. Litigation Intellectual Property Proceedings.In April 2009 we entered into the Qualcomm Agreement that resulted in the parties dismissing with prejudice all outstanding litigation between them, and Broadcom withdrawing its complaints with foreign competition authorities. For further discussion of the Qualcomm Agreement, see Notes2 and 10. In December 2006 SiRF Technology, Inc., or SiRF, filed a complaint in the United States District Court for the Central District of California against Global Locate, Inc., a privately-held company that became a wholly-owned subsidiary of Broadcom in July 2007, alleging that certain Global Locate products infringe four SiRF patents relating generally to GPS technology. In January 2007 Global Locate filed an answer denying the allegations in SiRFs complaint and asserting counterclaims. The counterclaims seek a declaratory judgment that the four SiRF patents are invalid and not infringed, assert that SiRF has infringed four Global Locate patents relating generally to GPS technology, and assert unfair competition and antitrust violations related to the filing of sham litigation. In May 2007 the court granted Global Locates motion to stay the case until the U.S.International Trade Commission, or ITC, actions between Global Locate and SiRF, discussed below, become final. In February 2007 SiRF filed a complaint in the ITC alleging that Global Locate engaged in unfair trade practices by importing integrated circuits and other products that infringe, both directly and indirectly, four SiRF patents relating generally to GPS technology. The complaint seeks an exclusion order to bar importation of those Global Locate products into the United States and a cease and desist order to bar further sales of infringing Global Locate products that have already been imported. In March 2007 the ITC instituted an investigation of Global Locate based upon the allegations made in the SiRF complaint. SiRF withdrew two patents from the investigation, and an ITC administrative law judge conducted a hearing on SiRFs remaining two patents in suit in March 2008. In June 2008 the ITC administrative law judge issued an initial determination finding SiRFs two patents not infringed and one patent invalid. In August 2008 the ITC denied SiRFs petition to review the administrative law judges initial determination finding no violation, thereby adopting the administrative law judges initial determination as the final determination of the ITC and terminating the investigation. In October 2008 SiRF filed a notice of appeal with the United States Court of Appeal for the Federal Circuit. In March 2009, SiRF filed a request to withdraw its appeal which was subsequently granted by the United States Court of Appeal for the Federal Circuit. In April 2007 Global Locate filed a complaint in the ITC against SiRF and four of its customers, e-TEN Corporation, Pharos Science Applications, Inc., MiTAC International Corporation and Mio Technology Limited, referred to collectively as the SiRF Defendants, asserting that the SiRF Defendants engaged in unfair trade practices by importing GPS devices, including integrated circuits an |
Business Enterprise Segments, S
Business Enterprise Segments, Significant Customer, Supplier and Geographical Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Business Enterprise Segments, Significant Customer, Supplier and Geographical Information [Abstract] | |
Business Enterprise Segments, Significant Customer, Supplier and Geographical Information | 12. Business Enterprise Segments, Significant Customer, Supplier and Geographical Information Business Enterprise Segments Broadcom has three reportable segments consistent with our target markets. Our three reportable segments are as follows: Solutions for the Home (Broadband Communications) enabling such products as digital cable, satellite and Internet Protocol (IP) set-top boxes and media servers; cable and digital subscriber line (DSL) modems and residential gateways; high definition televisions (HDTVs); high definition Blu-ray Disc players; and digital video recorders (DVRs). Solutions for the Hand (Mobile Wireless)integrating solutions in applications for wireless and personal area networking; cellular communications; personal navigation and global positioning; processing multimedia content in smartphones; and for managing the power in mobile devices. This reportable segment comprises our Mobile Platforms and Wireless Connectivity businesses;and Solutions for Network Infrastructure (Enterprise Networking)incorporating solutions for the business network requirements of enterprise, data center, small-to-medium-sized businesses (SMBs), and carriers and service providers, featuring high-speed controllers, switches and physical layer (PHY) devices supporting transmission and switching for local, metropolitan, wide area and storage networking. Historically, we reported one segment. In 2009 several factors contributed to our decision to report in three segments. First, entering into the Qualcomm Agreement resulted in significant licensing income and triggered the need to display licensing revenue separately in our consolidated statements of income. Second, the narrative we use to communicate our strategic focus to investors and help them understand our business evolved to our present framework of Home (Broadband Communications), Hand (Mobile Wireless) and Infrastructure (Enterprise Networking). Accordingly, we believe that a segment presentation consistent with this would represent better disclosure and increase transparency. Third, and consistent with this approach, in our annual reexamination of the economics of our businesses, we found that the financial metrics for our Enterprise Networking business were diverging from those of our other businesses, and that our Broadband Communications business was becoming dissimilar from our Mobile Wireless business. Accordingly, we now report three segments: Broadband Communication, Mobile Wireless and Enterprise Networking. Our Chief Executive Officer, who is our chief operating decision maker, or CODM, reviews financial information at the operating segment level. Our Mobile Platforms and Wireless Connectivity businesses (originally operated as a single operating segment) are reported separately to the CODM to allow greater management focus on our Mobile Platform opportunity. However as the customers, economics, and competitors substantially overlap, and the product functionality is being integrated across these products in our own and competitor roadmaps, we aggregate these two businesses into one reportable segment, Mobile Wirele |
Quarterly Financial Data
Quarterly Financial Data (Unaudited) | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Quarterly Financial Data (Unaudited) [Abstract] | |
Quarterly Financial Data (Unaudited) | 13. Quarterly Financial Data (Unaudited) The following table presents our unaudited quarterly financial data. In our opinion, this information has been prepared on a basis consistent with that of our audited consolidated financial statements and all necessary material adjustments, consisting of normal recurring accruals and adjustments, have been included to present fairly the unaudited quarterly financial data. Our quarterly results of operations for these periods are not necessarily indicative of future results of operations. Diluted Net Net Income Total Net Income (Loss) Revenue (Loss) Per Share (In thousands, except per share data) Year Ended December31, 2009 Fourth Quarter $ 1,342,746 $ 59,204 (1) $ 0.11 Third Quarter 1,254,197 84,596 (2) 0.16 Second Quarter 1,039,944 13,401 (3) 0.03 First Quarter 853,436 (91,940 )(4) (0.19 ) Year Ended December31, 2008 Fourth Quarter $ 1,126,509 $ (159,215 )(5) $ (0.32 ) Third Quarter 1,298,475 164,906 (6) 0.31 Second Quarter 1,200,931 134,789 (7) 0.25 First Quarter 1,032,210 74,314 (8) 0.14 (1) Includes settlement costs of $175.7million, net recovery of legal expenses of $63.2 million and restructuring reversals of $4.8million. (2) Includes impairment of long-lived assets of $7.6million and restructuring costs of $4.8million. (3) Includes impairment of long-lived assets of $11.3million, restructuring costs of $0.4million, net settlement gains of $58.4million and a charitable contribution of $50.0million. (4) Includes settlement costs of $1.2million and restructuring costs of $7.1million. (5) Includes impairment of goodwill and other long-lived assets of $169.4million and IPRD of $31.5million. (6) Includes other-than-temporary impairment of marketable securities of $1.8million and loss on strategic investment of $2.5million. (7) Includes impairment of intangible assets of $1.9million, restructuring reversal of $1.0million and a loss on strategic investment of $1.8million. (8) Includes IPRD of $10.9million and settlement costs of $15.8million. |
Subsequent Events
Subsequent Events | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events On January27, 2010 our Board of Directors adopted a dividend policy pursuant to which we intend to pay quarterly cash dividends on our common stock and declared the first quarterly cash dividend of $0.08 per share payable to holders of our common stock. The dividend will be paid on March8, 2010 to holders of our ClassA and ClassB common stock of record at the close of business on February19, 2010. The dividend so declared will be paid from U.S. domestic sources other than our retained earnings and will be treated for accounting purposes as a reduction of shareholders equity. On February2, 2010 we entered into an agreement to acquire Teknovus, Inc., or Teknovus. Teknovus develops and supplies EPON (Ethernet Passive Optical Networking) access chips and embedded software. Under the terms of the agreement, Broadcom will acquire all of the outstanding equity interests (including all outstanding options and warrants) in Teknovus for aggregate consideration of approximately $123.0million in cash, subject to adjustments for the amount of indebtedness and cash of Teknovus and certain fees and expenses of Teknovus, in each case as of the closing of the transaction. Broadcom currently expects the transaction to close in the first or second calendar quarter of 2010, subject to the satisfaction of customary closing conditions. |
Consolidated Valuation and Qual
Consolidated Valuation and Qualifying Accounts | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Consolidated Valuation and Qualifying Accounts [Abstract] | |
CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS | SCHEDULEII CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS BROADCOM CORPORATION Balance at Charged (Credited) Charged to Balance at Beginning of to Costs and Other End of Description Year Expenses Accounts(a) Deductions Year (In thousands) Year ended December31, 2009: Deducted from asset accounts: Allowance for doubtful accounts $ 5,354 $ 1,561 $ $ (128 ) $ 6,787 Sales returns 4,273 22,773 (23,418 ) 3,628 Restructuring liabilities 4,179 13,167 (16,018 ) 1,328 Total $ 13,806 $ 37,501 $ $ (39,564 ) $ 11,743 Year ended December31, 2008: Deducted from asset accounts: Allowance for doubtful accounts $ 5,472 $ 143 $ $ (261 ) $ 5,354 Sales returns 3,245 22,327 (21,299 ) 4,273 Restructuring liabilities 7,457 (1,000 ) (2,278 ) 4,179 Total $ 16,174 $ 21,470 $ $ (23,838 ) $ 13,806 Year ended December31, 2007: Deducted from asset accounts: Allowance for doubtful accounts $ 6,894 $ (1,576 ) $ 386 $ (232 ) $ 5,472 Sales returns 3,411 12,331 (12,497 ) 3,245 Restructuring liabilities 10,723 749 (4,015 ) 7,457 Total $ 21,028 $ 10,755 $ 1,135 $ (16,744 ) $ 16,174 (a) Amounts represent balances acquired through acquisitions. |