8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): August 8, 2003

BROADCOM CORPORATION
(Exact Name of Registrant as Specified in Charter)

California	000-23993	33-0480482
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

16215 Alton Parkway, Irvine, California 92618
(Address of Principal Executive Offices)(Zip Code)

Registrant’s telephone number, including area code: (949) 450-8700

Not Applicable
(Former Name or Former Address, if Changed since Last Report)

TABLE OF CONTENTS

	Item 7. Exhibits
	Item 12. Results of Operations and Financial Condition
SIGNATURE
Exhibit Index
EXHIBIT 99.1
EXHIBIT 99.2

Item 7. Exhibits

     (a)  Not applicable.

     (b)  Not applicable.

     (c)  Exhibits

99.1	Press Release dated August 8, 2003 of the Registrant.
99.2	Certain Financial results for the second quarter of 2003.

Item 12. Results of Operations and Financial Condition

The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

On August 8, 2003 Broadcom Corporation issued a press release attached hereto as Exhibit 99.1 announcing the settlement of all outstanding litigation between the company and Intel Corporation, as well as all litigation involving the companies’ affiliates. In connection with the settlement Broadcom will pay Intel $60.0 million in cash in two equal installments in the third and fourth fiscal quarters of 2003. Although the settlement was reached in August, Broadcom recorded a one-time charge for the payment at June 30, 2003 as required by Statement of Financial Accounting Standard No. 5, Accounting for Contingencies (“SFAS 5”). A copy of Broadcom’s financial results for the second quarter ended June 30, 2003 that reflects this charge is furnished as Exhibit 99.2 and is incorporated herein by reference. This charge was not reflected in the earnings press release issued on July 22, 2003 with respect to Broadcom’s financial results for the second quarter of 2003, as, under SFAS 5, it was not required to be recorded at that time.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BROADCOM CORPORATION, a California corporation
August 12, 2003	By:	/s/ Bruce E. Kiddoo
		Bruce E. Kiddoo Vice President and Corporate Controller (Principal Accounting Officer)

Exhibit Index

99.1	Press Release dated August 8, 2003 of the Registrant.
99.2	Certain Financial results for the second quarter of 2003.

EX-99.1 3 a92372exv99w1.htm EXHIBIT 99.1

Exhibit 99.1

NEWS RELEASE

Broadcom Business Press Contact	Intel Press Contact
Laura Brandlin	Chuck Mulloy
Director, Marketing Communications	Public Relations
(949) 926-5108	(408) 765-3484
lbrandlin@broadcom.com	chuck.mulloy@intel.com

Broadcom Investor Relations Contact
Peter Andrew
Sr. Director, Investor Relations
(949) 926-5663
andrewtp@broadcom.com

Broadcom, Intel Settle All Litigation,
Execute Patent Cross-License

IRVINE and SANTA CLARA, Calif., August 8, 2003 — Broadcom Corporation (Nasdaq: BRCM) and Intel Corporation today announced they have settled all outstanding litigation between the companies as well as all litigation involving their affiliates.

Broadcom, Intel and certain of their subsidiaries have been engaged in several patent lawsuits in the federal courts as well as proceedings in the International Trade Commission. Under the settlement agreement, all outstanding claims and counterclaims in those actions will be dismissed with prejudice. The parties also entered into reciprocal releases covering all patent claims and certain other claims. In connection with the settlement, Broadcom will pay Intel $60 million in cash in two equal installments in the third and fourth fiscal quarters of 2003.

Additionally, Broadcom and Intel entered into a separate comprehensive cross-license agreement covering patents owned or controlled by either party or its subsidiaries, and having a first effective filing date, at any time through August 7, 2008. Under the agreement, products of each party and its subsidiaries are licensed under the patents of the other for the respective lives of the patents. All existing products of each party are

licensed by the other. Certain proprietary products of each party are not licensed to the other, but neither company believes that the license exceptions are material to its business as currently conducted or planned. No fees or royalties are payable by either party with respect to its business as currently conducted or planned.

The companies each expressed satisfaction with the litigation settlement as well as the patent cross-license agreement.

Broadcom said that it will take a one-time charge for the $60 million settlement payment in its financial statements for the fiscal quarter ended June 30, 2003, which the company expects to file with the Securities and Exchange Commission on Form 10-Q on or before August 14, 2003.

About Broadcom

Broadcom Corporation is the leading provider of highly integrated silicon solutions that enable broadband communications and networking of voice, video and data services. Using proprietary technologies and advanced design methodologies, Broadcom designs, develops and supplies complete system-on-a-chip solutions and related hardware and software applications for every major broadband communications market. Broadcom’s diverse product portfolio includes solutions for digital cable and satellite set-top boxes; cable and DSL modems and residential gateways; high-speed transmission and switching for local, metropolitan, wide area and storage networking; home and wireless networking; cellular and terrestrial wireless communications; Voice over Internet Protocol (VoIP) gateway and telephony systems; broadband network processors; and SystemI/O™ server solutions. These technologies and products support Broadcom’s core mission: Connecting everything®.

Broadcom has headquarters in Irvine, Calif., and may be contacted at (949) 450-8700 or at www.broadcom.com.

About Intel

Intel, the world’s largest chip maker, is also a leading manufacturer of computer, networking and communications products. Additional information about Intel is available at www.intel.com/pressroom.

Safe Harbor Statement of Broadcom Corporation under the Private Securities Litigation Reform Act of 1995:

All statements included or incorporated by reference in this release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” similar expressions, and variations or negatives of these words. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements speak only as of the date hereof and are based upon the information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. These statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, the actual results of Broadcom could differ materially and adversely from those expressed in any forward-looking statement as a result of various factors.

The Securities and Exchange Commission filings of Broadcom,including without limitation its Annual Reports on Form 10-K, subsequent Quarterly Reports on Form 10-Q, and recent Current Reports on Form 8-K, discuss important risk factors that could contribute to such differences or otherwise affect its business, results of operations and financial condition. Broadcom undertakes no obligation to revise or update publicly any forward-looking statement for any reason.

Broadcom®, the pulse logo, SystemI/O™ and Connecting everything® are trademarks of Broadcom Corporation and/or its affiliates in the United States and certain other countries. Intel is a registered trademark of Intel Corporation. All other trademarks mentioned are the property of their respective owners.

EX-99.2 4 a92372exv99w2.htm EXHIBIT 99.2

EXHIBIT 99.2

BROADCOM CORPORATION
Unaudited GAAP Consolidated Statements of Operations
(In thousands, except per share amounts)

				Three Months Ended						Six Months Ended
				June 30,						June 30,
				2003			2002			2003			2002
Net revenue				$	377,879		$	258,203		$	705,343		$	497,003
Cost of revenue (a)					206,853			143,577			378,873			277,699
Gross profit					171,026			114,626			326,470			219,304
Operating expense:
	Research and development (b) (c)				106,378			114,727			209,501			226,421
	Selling, general and administrative (b) (c)				47,373			40,607			88,732			81,081
	Stock-based compensation (d)				74,706			81,696			143,534			183,160
	Amortization of purchased intangible assets (d)				1,168			5,866			2,700			11,250
	Impairment of goodwill				438,611			—			438,611			—
	Stock option exchange				209,266			—			209,266			—
	Settlement costs				178,302			—			178,302			—
	Restructuring costs				2,165			—			2,932			4,822
Loss from operations					(886,943	)		(128,270	)		(947,108	)		(287,430	)
Interest income, net					1,310			3,313			3,500			6,753
Other income (expense), net					569			428			(47	)		(3,919	)
Loss before income taxes					(885,064	)		(124,529	)		(943,655	)		(284,596	)
Provision for income taxes					6,678			4,889			15,993			10,889
Net loss				$	(891,742	)	$	(129,418	)	$	(959,648	)	$	(295,485	)
Net loss per share (basic and diluted)				$	(3.08	)	$	(.49	)	$	(3.39	)	$	(1.12	)
Weighted average shares (basic and diluted)					289,745			265,356			283,031			263,678
Notes:
(a) Cost of revenue includes the following:
			Stock-based compensation expense	$	1,845		$	3,330		$	4,372		$	6,679
			Amortization of purchased intangible assets		4,473			13,643			10,526			26,807
			Stock option exchange expense		11,454			—			11,454			—
			Employer payroll tax expense on certain stock option exercises		24			14			26			26
				$	17,796		$	16,987		$	26,378		$	33,512
(b) Stock-based compensation expense is excluded from the following (and presented as a separate line item):
			Research and development expense	$	63,327		$	55,007		$	114,260		$	124,793
			Selling, general and administrative expense		11,379			26,689			29,274			58,367
				$	74,706		$	81,696		$	143,534		$	183,160
		Amortization of purchased intangible assets is excluded from the following (and presented as a separate line item):
			Research and development expense	$	—		$	4,903		$	815		$	10,064
			Selling, general and administrative expense		1,168			963			1,885			1,186
				$	1,168		$	5,866		$	2,700		$	11,250
		Stock option exchange expense is excluded from the following (and presented as a separate line item):
			Research and development expense	$	164,798		$	—		$	164,798		$	—
			Selling, general and administrative expense		44,468			—			44,468			—
				$	209,266		$	—		$	209,266		$	—
(c) Employer payroll tax expense on certain stock option exercises is included in the following:
			Research and development expense	$	356		$	106		$	446		$	333
			Selling, general and administrative expense		270			51			289			127
				$	626		$	157		$	735		$	460

(d) Represents non-cash acquisition-related expenses charged to operations.

BROADCOM CORPORATION
Unaudited Reconciliation of Pro Forma Non-GAAP Adjustments
(In thousands)

The following represents a reconciliation (unaudited) of GAAP net loss to pro forma non-GAAP net income (loss). Over 95% of the reconciling amounts for each period presented are non-cash charges.

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2003			2002			2003			2002
GAAP net loss		$	(891,742	)	$	(129,418	)	$	(959,648	)	$	(295,485	)
Acquisition-related and other special charges:
	Stock-based compensation		76,551			85,026			147,906			189,839
	Amortization of purchased intangible assets		5,641			19,509			13,226			38,057
	Employer payroll tax expense on certain stock option exercises		650			171			761			486
	Impairment of goodwill		438,611			—			438,611			—
	Stock option exchange		220,720			—			220,720			—
	Settlement costs		178,302			—			178,302			—
	Restructuring costs		2,165			—			2,932			4,822
	Loss on strategic investments		72			—			72			4,146
	Non-operating gains		(588	)		(1,182	)		(588	)		(1,182	)
	Income tax effects		(734	)		9,090			4,335			20,574
Pro forma non-GAAP net income (loss)		$	29,648		$	(16,804	)	$	46,629		$	(38,743	)

BROADCOM CORPORATION
Unaudited Pro Forma Non-GAAP Consolidated Statements of Operations
(In thousands, except per share amounts)

		Three Months Ended					Six Months Ended
		June 30,					June 30,
		2003		2002			2003			2002
Net revenue		$	377,879	$	258,203		$	705,343		$	497,003
Cost of revenue			189,057		126,590			352,495			244,187
Gross profit			188,822		131,613			352,848			252,816
Operating expense:
	Research and development		106,022		114,621			209,055			226,088
	Selling, general and administrative		47,103		40,556			88,443			80,954
Income (loss) from operations			35,697		(23,564	)		55,350			(54,226	)
Interest income, net			1,310		3,313			3,500			6,753
Other income (expense), net			53		(754	)		(563	)		(955	)
Income (loss) before income taxes			37,060		(21,005	)		58,287			(48,428	)
Provision (benefit) for income taxes			7,412		(4,201	)		11,658			(9,685	)
Pro forma non-GAAP net income (loss)		$	29,648	$	(16,804	)	$	46,629		$	(38,743	)
Pro forma non-GAAP net income (loss) per share (basic)		$	.10	$	(.06	)	$	.16		$	(.15	)
Pro forma non-GAAP net income (loss) per share (diluted)		$	.10	$	(.06	)	$	.16		$	(.15	)
Weighted average shares (basic)			289,745		265,356			283,031			263,678
Weighted average shares (diluted)			307,077		265,356			298,030			263,678

Pro Forma Non-GAAP Only

The above pro forma non-GAAP statements are based upon our unaudited consolidated statements of operations for the periods shown, with certain adjustments. This presentation is not in accordance with, or an alternative for, U.S. Generally Accepted Accounting Principles (GAAP) and may not be consistent with the presentation used by other companies. However, Broadcom believes pro forma non-GAAP reporting provides meaningful insight into the company’s on-going economic performance and therefore uses pro forma non-GAAP reporting internally to evaluate and manage the company’s operations. Broadcom has chosen to provide this supplemental information to investors to enable them to perform additional comparisons of operating results and as a means to emphasize the results of on-going operations.

BROADCOM CORPORATION
Unaudited Condensed GAAP Consolidated Balance Sheets
(In thousands)

			June 30,		December 31,
			2003		2002
ASSETS
Current assets:
	Cash and cash equivalents		$	453,435	$	389,555
	Short-term marketable securities			12,566		56,031
	Short-term restricted marketable securities			28,777		57,117
	Accounts receivable, net			182,905		128,215
	Inventory			85,000		46,036
	Prepaid expenses and other current assets			49,971		44,830
		Total current assets		812,654		721,784
Property and equipment, net				157,476		177,557
Long-term marketable securities				4,220		5,067
Long-term restricted marketable securities				17,458		35,137
Goodwill				841,307		1,228,603
Purchased intangible assets, net				14,152		24,036
Other assets				12,589		23,969
		Total assets	$	1,859,856	$	2,216,153
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
	Accounts payable		$	210,570	$	168,236
	Wages and related benefits			35,983		34,278
	Deferred revenue			7,815		15,129
	Accrued liabilities			290,496		204,116
	Short-term debt and current portion of long-term debt			57,626		112,258
		Total current liabilities		602,490		534,017
Long-term restructuring liabilities				29,974		36,403
Long-term debt, less current portion				—		1,212
Shareholders’ equity				1,227,392		1,644,521
		Total liabilities and shareholders’ equity	$	1,859,856	$	2,216,153

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EX-99.1

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EX-99.2

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