8-K

UNITED STATES 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): February 8, 2007

BROADCOM CORPORATION

(Exact Name of Registrant as Specified in Charter)

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

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

Registrant’s telephone number, including area code: 949.926.5000

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Item 2.02 Results of Operations and Financial Condition	1
Item 9.01 Exhibits	3
SIGNATURE	4
EXHIBIT INDEX	5
EXHIBIT 99.1

Item 2.02 Results of Operations and Financial Condition

The information in this Current Report, including the accompanying exhibit, 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 filed pursuant to the Securities Act of 1933, as amended, regardless of any general incorporation language contained in such filing.

On February 8, 2007, Broadcom Corporation issued a press release announcing unaudited financial results for the fourth quarter and year ended December 31, 2006. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.

Discussion of Non-GAAP Financial Measures

In addition to our GAAP results, Broadcom reports adjusted net income and net income per share, referred to respectively as “non-GAAP net income” and “non-GAAP net income per share.” Non-GAAP net income consists of net income excluding stock-based compensation expense, as well as charges related to acquisitions and other charges and gains that are driven primarily by discrete events that management does not consider to be directly related to our core operating performance. Non-GAAP net income per share is calculated by dividing non-GAAP net income by adjusted GAAP weighted average shares outstanding (diluted). For purposes of calculating non-GAAP net income per share, the calculation of GAAP weighted average shares outstanding (diluted) is adjusted to exclude the benefits of compensation costs attributable to future services and not yet recognized in the financial statements that are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.

Broadcom believes that the presentation of non-GAAP net income and non-GAAP net income per share provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. Management believes that the use of these non-GAAP financial measures provides consistency and comparability with our past financial reports, and also facilitates comparisons with other companies in our industry, many of which use similar non-GAAP financial measures to supplement their GAAP results. Management has historically used non-GAAP net income and non-GAAP net income per share when evaluating operating performance because we believe that the inclusion or exclusion of the items described below provides an additional measure of our core operating results and facilitates comparisons of our core operating performance against prior periods and our business model objectives. We have chosen to provide this information to investors to enable them to perform additional analyses of past, present and future operating performance and as a supplemental means to evaluate our ongoing core operations. Externally, we believe that non-GAAP net income continues to be useful to investors in their assessment of our operating performance and the valuation of our company.

Internally, non-GAAP net income and non-GAAP net income per share are significant measures used by management for purposes of:

• supplementing the financial results and forecasts reported to our board of directors;

• evaluating Broadcom’s operating performance;

• managing and benchmarking performance internally across our businesses and externally against our peers;

• determining a portion of bonus compensation for executive officers and certain other key employees;

• establishing internal operating budgets;

• calculating return on investment for development programs and growth initiatives;

• comparing performance with internal forecasts and targeted business models; and

• evaluating and valuing potential acquisition candidates.

1

Non-GAAP net income reflects net income adjusted for the following items:

• Stock-based compensation. Stock-based compensation relates primarily to employee stock options and restricted stock units issued by Broadcom and other stock options and restricted stock assumed in acquisitions by Broadcom. Stock-based compensation expense is a non-cash expense that varies in amount from period to period and is affected by market forces that are difficult to predict and are not within the control of management, such as the price of our Class A common stock. Accordingly, management excludes this item from its internal operating forecasts and models. We take into account the dilutive impact of stock options and shares issued pursuant to our stock-based compensation plans at the aggregate company level, but regularly exclude stock-based compensation expense when analyzing individual line items on the financial statements or when making decisions that affect our various businesses.

• Acquisition-related charges. Acquisition-related charges include in-process research and development charges related to (i) products in development that have not reached technological feasibility at the time of acquisition and (ii) the amortization and impairment of purchased intangible assets primarily consisting of goodwill and purchased technology, customer relationships and backlog. These charges are not factored into management’s evaluation of potential acquisitions, or of our performance after completion of acquisitions, because they are non-cash and are not related to our core operating performance, and the frequency and amount of such charges vary significantly based on the timing and magnitude of our acquisition transactions, the then fair market value of Broadcom’s Class A common stock, and the maturities of the businesses being acquired.

• Employer payroll tax expense. Employer payroll tax expense on certain stock option exercises varies greatly in amount from period-to-period and is significantly impacted by factors that are difficult to predict and are not within the control of management, such as the timing and magnitude of employee stock option exercises and the fair market value of Broadcom’s Class A common stock at the time of exercise.

• Other charges and gains. Other charges and gains consists of settlement costs, restructuring costs (reversals), gains or losses on strategic investments, charges related to our historical equity award practices, and non-operating gains, all of which occur on a sporadic basis and vary greatly in amount. Management excludes these items when evaluating our operating performance because these amounts do not affect our core operations.

• Income tax expense (benefit). Income tax expense is adjusted by the amount of additional tax expense or benefit that we would accrue if we used non-GAAP results instead of GAAP results in the calculation of our tax liability, taking into consideration our long-term tax structure as well as income tax benefits from adjustments to tax reserves of certain foreign subsidiaries.

The calculation of non-GAAP net income per share is adjusted for the following item:

• The treasury stock method used to calculate GAAP weighted average shares outstanding (diluted) requires amounts related to compensation costs attributable to future services and not yet recognized in the financial statements to be treated as proceeds that are assumed to be used to repurchase shares. As a result, this reduces the total number of weighted average  shares for purposes of calculating GAAP weighted average shares outstanding (diluted). Since Broadcom does not include the effects of these compensation costs in its non-GAAP net income, management believes these amounts should not be applied to the repurchase of shares in calculating non-GAAP net income per share, and, accordingly, adds such shares back into weighted average shares outstanding for purposes of calculating non-GAAP net income per share.

Non-GAAP net income and non-GAAP net income per share are not calculated in accordance with GAAP, and should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of our business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of Broadcom’s results as reported under GAAP. Broadcom expects to continue to incur expenses similar to the non-GAAP adjustments described above, and

2

exclusion of these items from our non-GAAP net income should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Some of the limitations in relying on non-GAAP net income and non-GAAP net income per share are:

• Non-GAAP net income does not include stock compensation expense related to equity awards granted to our workforce. Broadcom’s stock incentive plans are important components of our employee incentive compensation arrangements and are reflected as expenses in our GAAP results under Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, effective as of January 1, 2006. While we include the dilutive impact of such equity awards in weighted average shares outstanding, the expense associated with stock-based awards is excluded from non-GAAP net income.

• Although amortization and impairment of purchased intangible assets does not directly affect our current cash position, such expense represents the declining value of the technology and other intangible assets that we have acquired. These assets are amortized over their respective expected economic lives or impaired, when appropriate. The expense associated with this decline in value is excluded from the non-GAAP net income presentation, and therefore non-GAAP net income does not reflect the costs of acquired intangible assets that supplement our research and development efforts.

• Broadcom periodically acquires and assimilates other companies or businesses, and we expect to continue to experience acquisition-related charges in the future. These costs can directly impact the amount of our available funds or could be dilutive to our shareholders in the future.

• Other charges and gains can directly impact the amount of our available funds or could be dilutive to our shareholders in the future.

• Broadcom’s income tax expense (benefit) ultimately will be determined based upon our GAAP taxable income and actual tax rates currently in effect, which may differ significantly from the 10% rate assumed in the calculation of our non-GAAP net income.

Item 9.01 Exhibits

(d) Exhibits

          99.1 Press Release dated February 8, 2007 of the Registrant.

3

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
February 8, 2007	By:	/s/ Bruce E. Kiddoo
		Bruce E. Kiddoo
		Vice President, Controller and Acting Chief Financial Officer

4

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated February 8, 2007 of the Registrant.

5

EX-99.1

Exhibit 99.1

NEWS RELEASE

Broadcom Business Press Contact
Bill Blanning
Vice President, Global Media Relations
949-926-5555
blanning@broadcom.com Broadcom Financial Analyst Contact
T. Peter Andrew
Vice President, Investor Relations
949-926-5663
pandrew@broadcom.com

Broadcom Reports Fourth Quarter and Year 2006 Results

Conference Call to be Webcast Today at 1:45 p.m. Pacific Time

IRVINE, Calif. — February 8, 2007 — Broadcom Corporation (Nasdaq: BRCM) today reported unaudited financial results for its fourth quarter and year ended December 31, 2006.

Net revenue for the fourth quarter of 2006 was $923.5 million, an increase of 2.3% from the $902.6 million reported for the third quarter of 2006 and an increase of 12.5% from the $820.6 million reported for the fourth quarter of 2005. Net income computed in accordance with U.S. generally accepted accounting principles (GAAP) for the fourth quarter of 2006 was $45.1 million, or $.08 per share (diluted), compared with GAAP net income of $110.2 million, or $.19 per share (diluted), for the third quarter of 2006, and GAAP net income of $186.7 million, or $.32 per share (diluted), for the fourth quarter of 2005. The 2006 results also reflect the company’s adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised 2004), Share-Based Payment (“SFAS 123R”), effective January 1, 2006. Had the company applied the provisions of SFAS 123R in 2005, it would have recorded an additional $90.1 million in stock-based compensation expense and reported GAAP net income of $96.6 million, or $.17 per share (diluted), for the fourth quarter of 2005.

GAAP net income for the fourth quarter of 2006 is after $50.6 million of charges for payments Broadcom is making to or on behalf of certain current and former employees related to consequences of the company’s recent equity award review, as well as non-cash stock-based compensation expense incurred related to the extension of the post-service stock option exercise period for certain former employees.

Net revenue for the year ended December 31, 2006 was $3.67 billion, an increase of 37.3% from the $2.67 billion reported for the year ended December 31, 2005. GAAP net income for the year ended December 31, 2006 was $379.0 million, or $.64 per share (diluted), compared with GAAP net income of $367.1 million, or $.66 per share (diluted), for the year ended December 31, 2005. Had the company applied the provisions of SFAS 123R in 2005, it would have recorded an additional $461.9 million in stock-based compensation expense and reported a GAAP net loss of $94.8 million, or ($.19) per share (basic and diluted), for the year ended December 31, 2005.

In addition to GAAP results, Broadcom reports adjusted net income and net income per share, referred to respectively as “non-GAAP net income” and “non-GAAP net income per share.” A discussion of Broadcom’s use of these non-GAAP financial measures is set forth below, and reconciliations of GAAP net income to non-GAAP net income for the three months and years ended December 31, 2006 and 2005, respectively, appear in the financial statements portion of this release.

Non-GAAP net income for the fourth quarter of 2006, computed with the adjustments to GAAP reporting set forth in the attached reconciliation, was $184.9 million, or $.31 per share (diluted), compared with non-GAAP net income of $191.4 million, or $.32 per share (diluted), for the third quarter of 2006, and $196.8 million, or $.34 per share (diluted), for the fourth quarter of 2005.

Non-GAAP net income for the year ended December 31, 2006, computed with the adjustments to GAAP reporting set forth in the attached reconciliation, was $822.5 million, or $1.35 per share (diluted), compared with non-GAAP net income of $548.6 million, or $.98 per share (diluted), for the year ended December 31, 2005.

The company’s cash, cash equivalents and marketable securities at December 31, 2006 totaled a record $2.8 billion, an increase of $247.2 million over the comparable balance at September 30, 2006, and an increase of $926.1 million over the comparable balance at December 31, 2005.

“The year 2006 exemplified the ever-changing nature of the semiconductor industry, as strength in the first half of the year was followed by a slowdown in the second. However, on the whole, 2006 turned out to be a very good year for Broadcom as we increased our revenue by 37% and increased our cash and marketable securities by more than $900 million,” said Scott A. McGregor, Broadcom’s President and Chief Executive Officer. “Our continued focus on hiring the world’s best talent, combined with our execution in bringing new products to market and expanding into new end markets, enabled Broadcom’s revenue growth to outpace the overall semiconductor industry four fold in 2006.”

Conference Call Information
As previously announced, Broadcom will conduct a conference call with analysts and investors to discuss its fourth quarter and 2006 financial results and current financial prospects today at 1:45 p.m. Pacific Time (4:45 p.m. Eastern Time). The company will broadcast the conference call via webcast over the Internet. To listen to the webcast, or to view the financial or other statistical information required by Securities and Exchange Commission (SEC) Regulation G, please visit the Investors section of the Broadcom website at www.broadcom.com/investors. The webcast will be recorded and available for replay until 5:00 p.m. Pacific Time, Thursday, February 22, 2007.

The financial results included in this release are unaudited. The complete, audited financial statements of the company for the year ended December 31, 2006 will be included in Broadcom’s Annual Report on Form 10-K to be filed with the SEC later this month.

Discussion of Non-GAAP Financial Measures
Non-GAAP net income consists of net income excluding stock-based compensation expense as well as charges related to acquisitions and other charges and gains that are driven primarily by discrete events that management does not consider to be directly related to the company’s core operating performance. Non-GAAP net income per share is calculated by dividing non-GAAP net income by adjusted GAAP weighted average shares outstanding (diluted). For purposes of calculating non-GAAP net income per share, the calculation of GAAP weighted average shares outstanding (diluted) is adjusted to exclude the benefits of compensation costs attributable to future services and not yet recognized in the financial statements that are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.

Broadcom believes that the presentation of non-GAAP net income and non-GAAP net income per share provides important supplemental information to management and investors regarding financial and business trends relating to the company’s financial condition and results of operations. For further information regarding why Broadcom believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the company’s Current Report on Form 8-K regarding this earnings press release filed today with the SEC. The Form 8-K is available on the SEC’s website at www.sec.gov or under the “Financial Information” tab of the Investors section of the Broadcom website described above.

Effects of 2006 Stock Dividend
All share numbers and per share amounts set forth in this release and the accompanying unaudited financial statements have been adjusted to reflect the company’s three-for-two stock split effected February 21, 2006 through the payment of respective stock dividends to the holders of record of Class A and Class B common stock on February 6, 2006.

About Broadcom

Broadcom Corporation is a global leader in semiconductors for wired and wireless communications. Our products enable the delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment. Broadcom provides the industry’s broadest portfolio of state-of-the-art, system-on-a-chip and software solutions to manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices. These solutions support our core mission: Connecting everything ^®.

Broadcom, one of the world’s largest fabless semiconductor companies with unaudited annual 2006 revenue of $3.67 billion, is headquartered in Irvine, Calif., and has offices and research facilities in North America, Asia and Europe. Broadcom may be contacted at +1.949.926.5900 or at www.broadcom.com.

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

All statements included or incorporated by reference in this release and related conference call for analysts and investors, 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 business and industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change. 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,” “ongoing,” similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.

These risks and uncertainties include, but are not limited to, the risk that the unaudited results reported in this press release could be modified as the audit of our 2006 financial statements is completed, general economic and political conditions and specific conditions in the markets we address, including the continuing volatility in the technology sector and semiconductor industry, trends in the broadband communications markets in various geographic regions, including seasonality in sales of consumer products into which our products are incorporated, and possible disruption in commercial activities related to terrorist activity or armed conflict; those resulting from Broadcom’s recent equity award review, including potential claims and proceedings related to such matters, such as shareholder litigation and any action by the SEC, U.S. Attorney’s Office or other governmental agency that could result in civil or criminal sanctions against the company and/or certain of our current or former officers, directors or employees, other actions taken or required as a result of the review, and negative tax or other implications; the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory; the gain or loss of a key customer, design win or order; the rate at which our present and future customers and end-users adopt Broadcom’s technologies and products in our target markets; our ability to scale our operations in response to changes in demand for our existing products and services or demand for new products requested by our customers; intellectual property disputes and customer indemnification claims and other types of litigation risk; our dependence on a few significant customers for a substantial portion of our revenue; problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration; our ability to specify, develop or acquire, complete, introduce, market and transition to volume production new products and technologies in a cost-effective and timely manner; delays in the adoption and acceptance of industry standards in our target markets; the effectiveness of our expense and product cost control and reduction efforts; our ability to retain, recruit and hire key executives, technical personnel and other employees in the positions and numbers, with the experience and capabilities, and at the compensation levels needed to implement our business and product plans; our ability to timely and accurately predict market requirements and evolving industry standards and to identify opportunities in new markets; the quality of our products and any potential remediation costs; competitive pressures and other factors such as the

qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; the availability and pricing of third party semiconductor foundry, assembly and test capacity and raw materials; the timing of customer-industry qualification and certification of our products and the risks of non-qualification or non-certification; changes in our product or customer mix; the volume of our product sales and pricing concessions on volume sales; fluctuations in the manufacturing yields of our third party semiconductor foundries and other problems or delays in the fabrication, assembly, testing or delivery of our products; the risks of producing products with new suppliers and at new fabrication and assembly and test facilities; the risks and uncertainties associated with our international operations, particularly in light of terrorist activity, armed conflict or political unrest; the effects of natural disasters, public health emergencies, international conflicts and other events beyond our control; and the level of orders received that can be shipped in a fiscal quarter; and other factors.

Our amended Annual Report on Form 10-K/A for 2005, amended Quarterly Report on Form 10-Q/A for the three months ended March 31, 2006, and subsequent Quarterly Reports on Form 10-Q, all filed January 23, 2007, and our recent Current Reports on Form 8-K and other SEC filings discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition. The forward-looking statements in this release and the related conference call for analysts and investors speak only as of the date they are made. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.

Forward-looking statements are not the only statements you should regard with caution. The preparation of our restated consolidated financial statements included in the amended SEC filings for the first quarter of 2006 and prior periods required us to make judgments with respect to the methodologies we selected to calculate the adjustments contained in the restated financial statements, as well as estimates and assumptions regarding the application of those methodologies. These judgments, estimates and assumptions affected the amounts of additional deferred compensation and additional stock-based compensation that we recorded. The application of alternative methodologies, estimates and assumptions could have resulted in materially different assumptions.

Financial information for all periods ended on or before March 31, 2006 included in Broadcom’s previously-filed reports on SEC Forms 10-K, 10-Q and 8-K, the related opinions of the company’s independent registered public accounting firm, and all earnings press releases and similar communications issued by the company relating to such periods, should not be relied upon and are superseded in their entirety by the information contained in Broadcom’s amended Annual Report on Form 10-K/A and amended Quarterly Report on Form 10-Q/A filed with the SEC January 23, 2007.

Broadcom^®, the pulse logo, Connecting everything^® and the Connecting everything logo are among the trademarks of Broadcom Corporation and/or its affiliates in the United States, certain other countries and/or the EU. Any other trademarks or trade names mentioned are the property of their respective owners.

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

	Three Months Ended					Years Ended
	December 31,					December 31,
	2006		2005			2006			2005
Net revenue	$	923,454	$	820,605		$	3,667,818		$	2,670,788
Cost of revenue (1)		453,818		389,146			1,795,565			1,267,799
Gross profit		469,636		431,459			1,872,253			1,402,989
Operating expense:
Research and development (2)		312,731		185,860			1,117,014			681,047
Selling, general and administrative (3)		143,850		75,095			504,012			274,260
Amortization of purchased intangible assets (4)		330		1,041			2,347			4,033
In-process research and development (4)		—		1,800			5,200			43,452
Settlement costs (4)		—		—			—			110,000
Restructuring reversal (4)		—		—			—			(2,500	)
Impairment of other intangible assets (4)		—		500			—			500
Income from operations		12,725		167,163			243,680			292,197
Interest income, net		35,239		18,254			118,997			51,207
Other income, net (5)		446		108			3,964			3,465
Income before income taxes		48,410		185,525			366,641			346,869
Provision (benefit) for income taxes (6)		3,334		(1,219	)		(12,400	)		(20,220	)
Net income	$	45,076	$	186,744		$	379,041		$	367,089
Net income per share (basic)	$	.08	$	.36		$	.69		$	.72
Net income per share (diluted)	$	.08	$	.32		$	.64		$	.66
Weighted average shares (basic)		548,210		521,535			545,724			508,467
Weighted average shares (diluted)		584,927		581,575			588,318			557,838

The amounts included in the three months and year ended December 31, 2006 reflect the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised 2004), Share-Based Payment (“SFAS 123R”), effective January 1, 2006. Had the Company applied the provisions of SFAS 123R in 2005, it would have reported GAAP net income of $96.6 million, or $.17 per share (diluted), in the three months ended December 31, 2005 and a GAAP net loss of $94.8 million, or ($.19) per share (basic and diluted), in the year ended December 31, 2005.

All share numbers and per share amounts set forth in these unaudited financial statements have been adjusted to reflect the company’s three-for-two stock split effected February 21, 2006 through the payment of respective stock dividends to the holders of record of Class A and Class B common stock on February 6, 2006.

Listed below are the items included in net income that management excludes in computing the unaudited non-GAAP financial measures referred to in the text of this press release and further described under “Discussion of Non-GAAP Financial Measures.”

	Three Months Ended				Years Ended
	December 31,				December 31,
	2006		2005		2006		2005
(1) Cost of revenue:
Stock-based compensation	$	5,456	$	1,037	$	24,589	$	4,177
Amortization of purchased intangible assets		2,017		2,773		10,056		11,081
Charges related to equity award review		2,469		—		2,469		—
Employer payroll tax expense on certain stock option exercises		—		172		784		454
	$	9,942	$	3,982	$	37,898	$	15,712
(2) Research and development expense:
Stock-based compensation	$	72,480	$	16,663	$	307,096	$	68,606
Charges related to equity award review		22,286		—		23,625		—
Employer payroll tax expense on certain stock option exercises		—		1,754		7,784		5,440
	$	94,766	$	18,417	$	338,505	$	74,046
(3) Selling, general and administrative expense:
Stock-based compensation	$	28,449	$	7,083	$	136,679	$	29,232
Charges related to equity award review		23,547		—		23,807		—
Employer payroll tax expense on certain stock option exercises		—		579		4,022		1,585
	$	51,996	$	7,662	$	164,508	$	30,817

	Three Months Ended						Years Ended
	December 31,						December 31,
	2006			2005			2006			2005
(4) Amortization of purchased intangible assets	$	330		$	1,041		$	2,347		$	4,033
In-process research and development		—			1,800			5,200			43,452
Settlement costs		—			—			—			110,000
Restructuring reversal		—			—			—			(2,500	)
Impairment of intangible assets		—			500			—			500
	$	330		$	3,341		$	7,547		$	155,485
(5) Other income, net:
Gains on strategic investments, net	$	—		$	(12	)	$	(700	)	$	(1,163	)
Non-operating gains		—			(274	)		(482	)		(920	)
	$	—		$	(286	)	$	(1,182	)	$	(2,083	)
(6) Provision (benefit) for income taxes:
Income tax benefits from adjustments to tax reserves of certain foreign subsidiaries	$	(200	)	$	(3,400	)	$	(29,800	)	$	(29,300	)
Income tax effects		(17,011	)		(19,684	)		(73,992	)		(63,204	)
	$	(17,211	)	$	(23,084	)	$	(103,792	)	$	(92,504	)

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

	Three Months Ended						Years Ended
	December 31,						December 31,
	2006			2005			2006			2005
GAAP net income	$	45,076		$	186,744		$	379,041		$	367,089
Non-GAAP adjustments:
Stock-based compensation:
Cost of revenue		5,456			1,037			24,589			4,177
Research and development		72,480			16,663			307,096			68,606
Selling, general and administrative		28,449			7,083			136,679			29,232
Acquisition-related items:
Amortization of purchased intangible assets:
Cost of revenue		2,017			2,773			10,056			11,081
Other operating expense		330			1,041			2,347			4,033
In-process research and development		—			1,800			5,200			43,452
Employer payroll tax on certain stock option exercises:
Cost of revenue		—			172			784			454
Research and development		—			1,754			7,784			5,440
Selling, general and administrative		—			579			4,022			1,585
Charges related to equity award review:
Cost of revenue		2,469			—			2,469			—
Research and development		22,286			—			23,625			—
Selling, general and administrative		23,547			—			23,807			—
Settlement costs		—			—			—			110,000
Restructuring reversal		—			—			—			(2,500	)
Impairment of intangible assets		—			500			—			500
Gains on strategic investments, net		—			(12	)		(700	)		(1,163	)
Non-operating gains		—			(274	)		(482	)		(920	)
Income tax benefits from adjustments to tax reserves of certain foreign subsidiaries		(200	)		(3,400	)		(29,800	)		(29,300	)
Income tax effects		(17,011	)		(19,684	)		(73,992	)		(63,204	)
Total of non-GAAP adjustments		139,823			10,032			443,484			181,473
Non-GAAP net income	$	184,899		$	196,776		$	822,525		$	548,562
GAAP weighted average shares (diluted)		584,927			581,575			588,318			557,838
Non-GAAP adjustment		19,814			—			20,132			—
Non-GAAP weighted average shares (diluted)		604,741			581,575			608,450			557,838
GAAP net income per share (diluted)	$	.08		$	.32		$	.64		$	.66
Non-GAAP adjustments detailed above		.23			.02			.71			.32
Non-GAAP net income per share (diluted)	$	.31		$	.34		$	1.35		$	.98

Non-GAAP net income per share is calculated by dividing non-GAAP net income by adjusted GAAP weighted average shares outstanding (diluted). For purposes of calculating non-GAAP net income per share, the calculation of GAAP weighted average shares outstanding (diluted) is adjusted to exclude the benefits of compensation costs attributable to future services and not yet recognized in the financial statements that are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.

Broadcom believes that the presentation of non-GAAP net income and non-GAAP net income per share provides important supplemental information to management and investors regarding financial and business trends relating to the company’s financial condition and results of operations. For further information regarding why Broadcom believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the company’s Current Report on Form 8-K regarding this earnings press release filed today with the SEC.

BROADCOM CORPORATION
Unaudited GAAP Condensed Consolidated Statements of Cash Flows
(In thousands)

	Three Months Ended						Years Ended
	December 31,						December 31,
	2006			2005			2006			2005
Operating activities
Net income	$	45,076		$	186,744		$	379,041		$	367,089
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		12,397			12,991			47,602			53,413
Stock-based compensation:
Stock options and employee stock purchase plan		72,277			13,022			340,665			66,820
Restricted stock units and other awards		34,108			11,761			127,699			35,195
Acquisition-related items:
Amortization of purchased intangible assets		2,347			3,814			12,403			15,114
In-process research and development		—			1,800			5,200			43,452
Impairment of intangible assets		—			500			—			500
Gain on strategic investments, net		—			(12	)		(700	)		(1,163	)
Change in operating assets and liabilities:
Accounts receivable		41,476			(31,958	)		(75,423	)		(101,412	)
Inventory		20,734			(31,249	)		(7,598	)		(65,234	)
Prepaid expenses and other assets		6,228			11,915			20,166			(27,456	)
Accounts payable		44,539			10,062			(8,336	)		109,125
Accrued settlement liabilities		(11	)		(79	)		(2,011	)		(10,653	)
Other accrued liabilities		5,631			(55,553	)		52,951			(38,082	)
Net cash provided by operating activities		284,802			133,758			891,659			446,708
Investing activities
Purchase of property and equipment, net		(35,322	)		(16,582	)		(92,477	)		(41,767	)
Net cash paid for acquisitions		75			(33,305	)		(70,050	)		(111,454	)
Net proceeds from sales (purchases) of strategic investments, net		(2,121	)		(336	)		(1,984	)		1,426
Net proceeds (purchases) of marketable securities		(16,862	)		131,972			(205,243	)		(21,286	)
Net cash provided by (used in) investing activities		(54,230	)		81,749			(369,754	)		(173,081	)
Financing activities
Payments on assumed debt and other obligations		—			—			(4,625	)		(2,482	)
Net proceeds from issuance of common stock		78			144,508			479,287			461,291
Excess tax benefit from stock-based compensation		(338	)		—			—			—
Repurchases of Class A common stock		—			(57,860	)		(275,733	)		(153,752	)
Net cash provided by (used in) financing activities		(260	)		86,648			198,929			305,057
Increase in cash and cash equivalents		230,312			302,155			720,834			578,684
Cash and cash equivalents at beginning of period		1,927,798			1,135,121			1,437,276			858,592
Cash and cash equivalents at end of period	$	2,158,110		$	1,437,276		$	2,158,110		$	1,437,276

UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION

	December 31,		September 30,		December 31,
	2006		2006		2005
	(In thousands)
Cash and cash equivalents	$	2,158,110	$	1,927,798	$	1,437,276
Short-term marketable securities		522,340		449,353		295,402
Long-term marketable securities		121,148		177,273		142,843
Total cash, cash equivalents and marketable securities	$	2,801,598	$	2,554,424	$	1,875,521
Increase from prior quarter end	$	247,174
Increase from prior year end	$	926,077

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

	December 31,
	2006		2005
ASSETS
Current assets:
Cash and cash equivalents	$	2,158,110	$	1,437,276
Short-term marketable securities		522,340		295,402
Accounts receivable, net		382,823		307,356
Inventory		202,794		194,571
Prepaid expenses and other current assets		85,721		101,271
Total current assets		3,351,788		2,335,876
Property and equipment, net		164,699		96,438
Long-term marketable securities		121,148		142,843
Goodwill		1,185,145		1,149,602
Purchased intangible assets, net		29,029		7,332
Other assets		24,957		20,108
Total assets	$	4,876,766	$	3,752,199
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	307,972	$	289,069
Wages and related benefits		104,940		74,709
Deferred revenue		1,873		2,053
Accrued liabilities		263,916		233,663
Total current liabilities		678,701		599,494
Commitments and contingencies
Long-term liabilities		6,399		12,138
Shareholders’ equity		4,191,666		3,140,567
Total liabilities and shareholders’ equity	$	4,876,766	$	3,752,199