EX-99.2 3 a26609exv99w2.htm EXHIBIT 99.2 exv99w2
 

EXHIBIT 99.2
BROADCOM CORPORATION
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)
                         
    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