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California
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33-0480482
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Title of Class
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Name of Exchange on Which Registered
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Class A Common Stock, $0.0001 par value
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The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
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(Check one):
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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©
2014 Broadcom Corporation. All rights reserved.
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This Annual Report on Form 10-K is printed on recycled paper.
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Page
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PART I
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PART II
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PART III
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PART IV
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•
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Solutions for the Home -
Highly-integrated and complete platform solutions for set-top boxes and broadband access.
|
•
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Solutions for the Hand -
Platforms primarily for mobile devices that include low-power, high-performance and highly integrated wireless connectivity solutions, cellular SoCs and other technologies.
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•
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Solutions for Infrastructure -
Highly-integrated platforms for Infrastructure deployments that include Ethernet switches and PHYs, automotive Ethernet, communication processors and wireless infrastructure solutions, and Ethernet controllers.
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Net Revenue: $8.31 billion
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Net Revenue: $8.01 billion
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Net Revenue: $7.39 billion
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•
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Data center
- High capacity, low latency switching silicon that supports advanced protocols around virtualization and multi-pathing. Our Trident and DNX Ethernet switching fabric technologies provide the ability to build highly scalable flat networks supporting tens of thousands of servers and supporting 100 gigabits per second (Gbps) Ethernet.
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•
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Service provider
- Our service provider switch portfolio enables carrier/service provider networks to support a large number of services in the wireless backhaul, access, aggregation and core of their networks. Our SBX NPU product family provides a full duplex 100 Gbps fully programmable packet processor.
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•
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Enterprise and small-and-medium businesses (SMB)
- For enterprise applications, our XGS
™
product family combines multi-layer switching capabilities and wire-speed Gigabit, 10, 40 and 100 Gbps Ethernet switching performance for unified wired and wireless enterprise business networks. Our family of SMB Ethernet switch products are designed to support lower power modes and comply with industry standards around energy efficient Ethernet.
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• Alcatel-Lucent
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• Huawei Technologies
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• Apple
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• Pace
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• Arris
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• Samsung
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• Cisco
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• Thomson
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• Hewlett-Packard
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• ZTE
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•
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Taiwan Semiconductor Manufacturing Corporation, or TSMC, in Taiwan;
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•
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United Microelectronics Corporation in Singapore and Taiwan;
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•
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Semiconductor Manufacturing International Corporation in China; and
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•
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GlobalFoundries, Inc. (formerly Chartered Semiconductor Manufacturing) in Singapore and Germany.
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•
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Advanced Semiconductor Engineering (ASE) in Singapore, China and Taiwan (test, assembly and packaging);
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•
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Siliconware Precision in Taiwan (test, assembly and packaging);
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•
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United Test and Assembly Center in Singapore, China and Thailand (test, assembly and packaging);
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•
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Amkor in Korea, Philippines, Taiwan and China (assembly and packaging only); and
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•
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STATSChipPAC in Singapore, Korea, Malaysia and China (test, assembly and packaging);
|
• product quality and reputation
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• market presence
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• product capabilities
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• standards compliance
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• level of integration
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• system cost
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• engineering execution and scale
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• breadth of intellectual property
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• reliability
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• customer interface and support
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• power efficiency
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• time-to-market
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• circuit board footprint
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• security
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Broadband Communications
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Mobile and Wireless
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Infrastructure and Networking
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• Entropic Communications, Inc.
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• CSR plc
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• Cavium, Inc.
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• Intel Corporation
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• Intel Corporation
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• Freescale Semiconductor,Ltd.
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• Marvell Technology Group Ltd.
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• Marvell Technology Group Ltd.
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• Intel Corporation
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• Mediatek Inc.
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• Mediatek Inc.
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• Marvell Technology Group Ltd.
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• STMicroelectronics NV
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• QUALCOMM Incorporated
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• PMC-Sierra, Inc.
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•
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B-Connected Blog (
blog.broadcom.com
)
|
•
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Broadcom's Twitter feed (
www.twitter.com/Broadcom
)
|
•
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Broadcom's Facebook page (
www.facebook.com/Broadcom
)
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•
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changes in economic conditions in the markets we address, including the continuing volatility in the technology sector and semiconductor industry;
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•
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our dependence on a few significant customers and/or design wins for a substantial portion of our revenue;
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•
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changes in customer product needs and market acceptance of our products;
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•
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seasonality in sales of consumer and enterprise products in which our products are incorporated;
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•
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timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory;
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•
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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;
|
•
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goodwill and other purchased intangible impairment charges;
|
•
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the impact of a significant natural disaster, such as an earthquake, severe weather, tsunami or other flooding, or a nuclear crisis, as well as interruptions or shortages in the supply of utilities such as water and electricity, in a key location such as our corporate headquarters or our Northern California facilities, both of which are located near major earthquake fault lines, in our Singapore distribution center or in a key location of one of our suppliers, foundries or customers;
|
•
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the impact of enterprise system failures or network disruptions, the lack of system redundancies, and the potential failure of our disaster recovery planning to cover various unanticipated occurrences; and
|
•
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the impact of tax examinations.
|
•
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agreements with our customers typically do not require them to purchase a minimum quantity of our products; and
|
•
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our customers can stop incorporating our products into their own products with limited notice to us and suffer little or no penalty.
|
•
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effectively identify and capitalize upon opportunities in new markets;
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•
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timely complete and introduce new integrated products;
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•
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transition our semiconductor products to increasingly smaller line width geometries;
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•
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obtain sufficient foundry capacity (including at smaller geometry processes) and packaging materials;
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•
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license any desired third party technology or intellectual property rights; and
|
•
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qualify and obtain industry interoperability certification of our products.
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•
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political, social and economic instability;
|
•
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exposure to different business practices and legal and compliance standards;
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•
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continuation of overseas conflicts and the risk of terrorist attacks and resulting heightened security;
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•
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the imposition of governmental controls and restrictions and unexpected changes in regulatory requirements;
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•
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nationalization of business and blocking of cash flows;
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•
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logistical delays or disruptions;
|
•
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changes in taxation and tariffs; and
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•
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difficulties in staffing and managing international operations.
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•
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lower gross margins, revenue and operating income than originally anticipated at the time of acquisition and other financial challenges;
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•
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delays in the timing and successful integration of an acquired company’s technologies, and/or launch of products;
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•
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the loss of key personnel;
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•
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challenges in obtaining necessary transition services; and
|
•
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becoming subject to intellectual property or other litigation.
|
•
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a lack of guaranteed supply of wafers and other components and potential higher wafer and component prices due to supply constraints;
|
•
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the limited availability of, or potential delays in obtaining access to, key process technologies; and
|
•
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the location of foundries and other suppliers in regions that are subject to earthquakes, tsunamis and other natural disasters.
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•
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our views on potential future capital requirements for investments in acquisitions and the funding of our research and development;
|
•
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use of cash to consummate various acquisition transactions;
|
•
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stock repurchase programs;
|
•
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changes in federal and state income tax laws or corporate laws; and
|
•
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changes to our business model.
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2013
|
|
2012
|
||||||||||||
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High
|
|
Low
|
|
High
|
|
Low
|
||||||||
Fourth Quarter
|
$
|
29.75
|
|
|
$
|
24.60
|
|
|
$
|
35.00
|
|
|
$
|
29.95
|
|
Third Quarter
|
$
|
34.96
|
|
|
$
|
23.25
|
|
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$
|
37.00
|
|
|
$
|
28.60
|
|
Second Quarter
|
$
|
37.85
|
|
|
$
|
31.25
|
|
|
$
|
39.23
|
|
|
$
|
30.95
|
|
First Quarter
|
$
|
35.50
|
|
|
$
|
32.12
|
|
|
$
|
39.66
|
|
|
$
|
29.00
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans
|
|
Approximate Dollar Value of Shares That May yet be Purchased under the Plans
|
||||
|
|
(In millions, except per share data)
|
||||||||||
October 2013
|
|
0.1
|
|
|
$
|
24.97
|
|
|
0.1
|
|
|
|
November 2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
December 2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
Total
|
|
0.1
|
|
|
$
|
24.97
|
|
|
0.1
|
|
|
N/A
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(In millions, except per share data)
|
||||||||||||||||||
Consolidated Statements of Income Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Product revenue
|
$
|
8,219
|
|
|
$
|
7,820
|
|
|
$
|
7,182
|
|
|
$
|
6,612
|
|
|
$
|
4,319
|
|
Income from Qualcomm Agreement
(1)
|
86
|
|
|
186
|
|
|
207
|
|
|
206
|
|
|
171
|
|
|||||
Total net revenue
|
8,305
|
|
|
8,006
|
|
|
7,389
|
|
|
6,818
|
|
|
4,490
|
|
|||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product revenue
(2)
|
4,088
|
|
|
4,027
|
|
|
3,626
|
|
|
3,284
|
|
|
2,210
|
|
|||||
Research and development
(2)
|
2,486
|
|
|
2,318
|
|
|
1,983
|
|
|
1,763
|
|
|
1,535
|
|
|||||
Selling, general and administrative
(2)
|
706
|
|
|
696
|
|
|
682
|
|
|
589
|
|
|
479
|
|
|||||
Amortization of purchased intangible assets
|
57
|
|
|
113
|
|
|
30
|
|
|
28
|
|
|
15
|
|
|||||
Impairments of long-lived assets
|
511
|
|
|
90
|
|
|
92
|
|
|
19
|
|
|
19
|
|
|||||
Restructuring costs, net
|
29
|
|
|
7
|
|
|
16
|
|
|
—
|
|
|
8
|
|
|||||
Settlement costs (gains)
|
(69
|
)
|
|
79
|
|
|
(18
|
)
|
|
53
|
|
|
118
|
|
|||||
Charitable contribution
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
50
|
|
|||||
Total operating costs and expenses
|
7,833
|
|
|
7,330
|
|
|
6,436
|
|
|
5,736
|
|
|
4,434
|
|
|||||
Income from operations
|
472
|
|
|
676
|
|
|
953
|
|
|
1,082
|
|
|
56
|
|
|||||
Interest income (expense), net
|
(30
|
)
|
|
(30
|
)
|
|
(5
|
)
|
|
9
|
|
|
14
|
|
|||||
Other income, net
|
3
|
|
|
10
|
|
|
8
|
|
|
7
|
|
|
2
|
|
|||||
Income before income taxes
|
445
|
|
|
656
|
|
|
956
|
|
|
1,098
|
|
|
72
|
|
|||||
Provision for (benefit of) income taxes
|
21
|
|
|
(63
|
)
|
|
29
|
|
|
16
|
|
|
7
|
|
|||||
Net income
|
$
|
424
|
|
|
$
|
719
|
|
|
$
|
927
|
|
|
$
|
1,082
|
|
|
$
|
65
|
|
Net income per share (basic)
(3)
|
$
|
0.74
|
|
|
$
|
1.29
|
|
|
$
|
1.72
|
|
|
$
|
2.13
|
|
|
$
|
0.13
|
|
Net income per share (diluted)
(3)
|
$
|
0.73
|
|
|
$
|
1.25
|
|
|
$
|
1.65
|
|
|
$
|
1.99
|
|
|
$
|
0.13
|
|
Dividends per share
|
$
|
0.44
|
|
|
$
|
0.40
|
|
|
$
|
0.36
|
|
|
$
|
0.32
|
|
|
$
|
—
|
|
(1)
|
Includes income relating to the Qualcomm Agreement that was entered into with Qualcomm in April 2009. Income from this agreement terminated in April 2013.
|
(2)
|
Includes stock-based compensation expense resulting from stock options and restricted stock units we issued or assumed in connection with acquisitions. See Note 8 of Notes to Consolidated Financial Statements.
|
(3)
|
See Notes 1 and 2 of Notes to Consolidated Financial Statements for an explanation of the calculation of net income per share.
|
|
December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents and short-term and long-term marketable securities
|
$
|
4,371
|
|
|
$
|
3,722
|
|
|
$
|
5,205
|
|
|
$
|
4,058
|
|
|
$
|
2,368
|
|
Working capital
|
2,419
|
|
|
2,099
|
|
|
4,653
|
|
|
2,913
|
|
|
1,767
|
|
|||||
Goodwill and purchased intangible assets, net
|
4,937
|
|
|
5,512
|
|
|
2,187
|
|
|
2,043
|
|
|
1,481
|
|
|||||
Total assets
|
11,495
|
|
|
11,208
|
|
|
9,040
|
|
|
7,944
|
|
|
5,127
|
|
|||||
Total debt
|
1,394
|
|
|
1,693
|
|
|
1,196
|
|
|
697
|
|
|
—
|
|
|||||
Total shareholders’ equity
|
8,371
|
|
|
7,839
|
|
|
6,521
|
|
|
5,826
|
|
|
3,892
|
|
|
Year Ended December 31,
|
|||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|||||
Supplemental Gross Margin Data
|
|
|
|
|
|
|
|
|
|
|||||
Product gross margin
|
50.3
|
%
|
|
48.5
|
%
|
|
49.5
|
%
|
|
50.3
|
%
|
|
48.8
|
%
|
Total gross margin
|
50.8
|
|
|
49.7
|
|
|
50.9
|
|
|
51.8
|
|
|
50.8
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Supplemental Data on Stock-Based Compensation Expense
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product revenue
|
$
|
25
|
|
|
$
|
27
|
|
|
$
|
24
|
|
|
$
|
23
|
|
|
$
|
25
|
|
Research and development
|
363
|
|
|
368
|
|
|
363
|
|
|
342
|
|
|
352
|
|
|||||
Selling, general and administrative
|
130
|
|
|
148
|
|
|
126
|
|
|
119
|
|
|
120
|
|
|
Reportable Segments
|
|
|
|
|
||||||||||||||
|
Broadband
Communications |
|
Mobile and
Wireless |
|
Infrastructure and Networking
|
|
All
Other |
|
Consolidated
|
||||||||||
|
|
|
(In millions)
|
|
|
|
|
||||||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
2,220
|
|
|
$
|
3,919
|
|
|
$
|
2,080
|
|
|
$
|
86
|
|
|
$
|
8,305
|
|
Operating income (loss)
|
538
|
|
|
365
|
|
|
655
|
|
|
(1,086
|
)
|
|
472
|
|
|||||
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
2,156
|
|
|
$
|
3,809
|
|
|
$
|
1,855
|
|
|
$
|
186
|
|
|
$
|
8,006
|
|
Operating income (loss)
|
504
|
|
|
561
|
|
|
484
|
|
|
(873
|
)
|
|
676
|
|
|||||
Year Ended December 31, 2011
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
2,039
|
|
|
$
|
3,484
|
|
|
$
|
1,659
|
|
|
$
|
207
|
|
|
$
|
7,389
|
|
Operating income (loss)
|
391
|
|
|
572
|
|
|
545
|
|
|
(555
|
)
|
|
953
|
|
•
|
Our cash and cash equivalents and marketable securities were
$4.37 billion
at
December 31, 2013
, compared with
$3.72 billion
at
December 31, 2012
. We generated cash flow from operations of
$1.79 billion
during
2013
as compared to
$1.93 billion
in
2012
.
|
•
|
In January 2013 our Board of Directors adopted an amendment to our existing dividend policy pursuant to which we increased our quarterly cash dividend by
10.0%
to
$0.11
per share (
$0.44
per share on an annual basis) payable to holders of our common stock.
|
•
|
We repurchased
20.2 million
shares of our Class A common stock at a weighted average price of
$29.59
.
|
•
|
In June 2013 we recorded purchased intangible impairment charges of $501 million, primarily related to our acquisition of NetLogic and, to a lesser extent, our acquisition of Provigent, Inc.
|
•
|
In July 2013 we received a settlement payment of $75 million and recorded a one-time settlement gain.
|
•
|
In September 2013 we contributed $25 million to the Broadcom Foundation.
|
•
|
In September 2013 our Board of Directors approved and we initiated a global restructuring plan to reduce our expenses and better align our resources to areas of strategic focus. We recorded net restructuring costs of $29 million in 2013, and expect to record additional costs of approximately
$5 million
in the three months ending March 31, 2014.
|
•
|
On October 1, 2013 we completed the Renesas Transaction. In connection with the transaction we paid approximately $142 million in net cash.
|
•
|
our product mix and volume of product sales and corresponding gross margin (see further discussion below under “
Factors That May Impact Net Revenue
” and “
Factors That May Impact Product Gross Margin
”);
|
•
|
levels of research and development and other operating costs (organic or acquired);
|
•
|
stock-based compensation expense;
|
•
|
licensing and income from intellectual property;
|
•
|
impairment of goodwill and other long-lived assets;
|
•
|
deferral of revenue and costs under multiple-element arrangements;
|
•
|
amortization of purchased intangible assets;
|
•
|
settlement costs or gains;
|
•
|
cash-based incentive compensation expense;
|
•
|
litigation costs and insurance recoveries;
|
•
|
changes in tax laws, adjustments to tax reserves and the results of income tax audits;
|
•
|
the loss of interest income resulting from lower average interest rates and investment balance reductions resulting from expenditures on repurchases of our Class A common stock, dividends and acquisitions of businesses;
|
•
|
restructuring costs;
|
•
|
other-than-temporary impairment of marketable securities; and
|
•
|
charitable contributions.
|
•
|
Net Revenue.
We recognize product revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) our price to the customer is fixed or determinable and (iv) collection of the resulting accounts receivable is reasonably assured. These criteria are usually met at the time of product shipment.
|
•
|
Sales Returns and Pricing Adjustments.
Establishing accruals for sales returns and pricing adjustments requires the use of judgment and estimates that impact the amount and timing of revenue recognition. We record reductions of revenue for estimated product returns and pricing adjustments, such as competitive pricing programs and rebates, in the same period that the related revenue is recorded. The amount of these reductions is based on historical sales returns, analysis of credit memo data, specific criteria included in rebate agreements, and other factors known at the time. We accrue 100% of potential rebates at the time of sale and do not apply a breakage factor. We reverse the accrual of unclaimed rebate amounts as specific rebate programs contractually end and when we believe unclaimed rebates are no longer subject to payment and will not be paid. Thus the reversal of unclaimed rebates may have a positive impact on our net revenue and net income in subsequent periods. Additional reductions of revenue would result if actual product returns or pricing adjustments exceed our estimates.
|
•
|
Inventory Write-Downs and Warranty Reserves.
We write down the carrying value of our inventory to net realizable value for estimated obsolescence or unmarketable inventory in an amount equal to the difference between the cost of inventory and its estimated realizable value based upon assumptions about future
|
•
|
Stock-Based Compensation Expense.
All share-based payments are recognized in our financial statements based upon their respective grant date fair values. Beginning in 2011, we stopped granting stock options. We currently issue restricted stock units and maintain an employee stock purchase plan. The fair value of our restricted stock units is based on the closing market price of our Class A common stock on the date of grant less our expected dividend yield. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense.
|
•
|
Goodwill and Purchased Intangible Assets.
We evaluate goodwill by reporting unit either on an annual basis in the fourth quarter or more frequently if we believe indicators of impairment exist that would more likely than not reduce the fair value of a reporting unit below its carrying value or for other purchased intangible assets whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Significant management judgment is required in performing these tests and in the creation of the forecasts of future operating results that are used in the discounted cash flow method of valuation, including (i) estimation of future cash flows, which is dependent on internal forecasts, (ii) estimation of the long-term rate of growth for our business, (iii) estimation of the useful life over which cash flows will occur, (iv) terminal values, if applicable, and (v) the determination of our weighted average cost of capital, which helps determine the discount rate. It is possible that these forecasts may change and our performance projections included in our forecasts of future results prove to be inaccurate. If our actual results, or the forecasts and estimates used in future impairment analyses, are lower than the original estimates used to assess the recoverability of these assets, we could incur additional impairment charges. The value of our goodwill and purchased intangible assets could also be impacted by future adverse changes such as: (i) a decline in the valuation of technology company stocks, including the valuation of our common stock, (ii) a significant slowdown in the worldwide economy or the semiconductor industry, or (iii) the abandonment of any of our acquired in-process research and development, or IPR&D, projects.
|
•
|
Deferred Taxes and Uncertain Tax Positions.
We utilize the asset and liability method of accounting for income taxes. We record a valuation allowance to reduce our deferred tax assets to the amount that we believe is more likely than not to be realized. In assessing the need for a valuation allowance, we consider all positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Forming a conclusion that a valuation allowance is not required is difficult when there is negative evidence such as cumulative losses in recent years. As a result of our cumulative losses in the U.S. and certain foreign jurisdictions, our U.S. tax losses after tax deductions for stock-based compensation, and the full utilization of our loss carryback opportunities, we have concluded that a full valuation allowance against our net deferred tax assets is
|
•
|
Litigation and Settlement Costs.
We are involved in disputes, litigation and other legal proceedings. We prosecute and defend these matters aggressively. However, there are many uncertainties associated with any litigation, and we cannot provide assurance that these actions or other third party claims against us will be resolved without costly litigation and/or substantial settlement costs. In addition, the resolution of intellectual property litigation may require us to pay damages for past alleged infringement or to obtain a license under the other party’s intellectual property rights that could require one-time license fees or running royalties, which could adversely impact product gross margins in future periods, or could prevent us from manufacturing or selling some of our products or limit or restrict the type of work that employees involved in such litigation may perform for Broadcom. If any of those events were to occur, our business, financial condition and results of operations could be materially and adversely affected.
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Net revenue:
|
|
|
|
|
|
|||
Product revenue
|
99.0
|
%
|
|
97.7
|
%
|
|
97.2
|
%
|
Income from Qualcomm Agreement
|
1.0
|
|
|
2.3
|
|
|
2.8
|
|
Total net revenue
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
Costs and expenses:
|
|
|
|
|
|
|||
Cost of product revenue
|
49.2
|
|
|
50.3
|
|
|
49.1
|
|
Research and development
|
29.9
|
|
|
29.0
|
|
|
26.9
|
|
Selling, general and administrative
|
8.5
|
|
|
8.7
|
|
|
9.2
|
|
Amortization of purchased intangible assets
|
0.7
|
|
|
1.4
|
|
|
0.4
|
|
Impairments of long-lived assets
|
6.2
|
|
|
1.1
|
|
|
1.2
|
|
Restructuring costs
|
0.3
|
|
|
0.1
|
|
|
0.2
|
|
Settlement costs (gains)
|
(0.8
|
)
|
|
1.0
|
|
|
(0.2
|
)
|
Charitable contribution
|
0.3
|
|
|
—
|
|
|
0.3
|
|
Total operating costs and expenses
|
94.3
|
|
|
91.6
|
|
|
87.1
|
|
Income from operations
|
5.7
|
|
|
8.4
|
|
|
12.9
|
|
Interest expense, net
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(0.1
|
)
|
Other income, net
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
Income before income taxes
|
5.4
|
|
|
8.2
|
|
|
12.9
|
|
Provision for (benefit of) income taxes
|
0.3
|
|
|
(0.8
|
)
|
|
0.4
|
|
Net income
|
5.1
|
%
|
|
9.0
|
%
|
|
12.5
|
%
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Net Revenue By Reportable Segment
|
|
|
|
|
|
|||
Broadband Communications
|
26.7
|
%
|
|
26.9
|
%
|
|
27.6
|
%
|
Mobile and Wireless
|
47.3
|
|
|
47.6
|
|
|
47.1
|
|
Infrastructure and Networking
|
25.0
|
|
|
23.2
|
|
|
22.5
|
|
All Other (1)
|
1.0
|
|
|
2.3
|
|
|
2.8
|
|
Gross Margin Data
|
|
|
|
|
|
|||
Product gross margin
|
50.3
|
%
|
|
48.5
|
%
|
|
49.5
|
%
|
Total gross margin
|
50.8
|
|
|
49.7
|
|
|
50.9
|
|
Stock-Based Compensation Expense (
included
in each functional line item)
|
|
|
|
|
||||
Cost of product revenue
|
0.3
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
Research and development
|
4.4
|
|
|
4.6
|
|
|
4.9
|
|
Selling, general and administrative
|
1.6
|
|
|
1.8
|
|
|
1.7
|
|
(1)
|
Income from the Qualcomm Agreement.
|
|
Year Ended December 31,
|
|
2013 vs 2012
|
|
2012 vs 2011
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Broadband Communications
|
$
|
2,220
|
|
|
$
|
2,156
|
|
|
$
|
2,039
|
|
|
$
|
64
|
|
|
3.0
|
%
|
|
$
|
117
|
|
|
5.7
|
%
|
Mobile and Wireless
|
3,919
|
|
|
3,809
|
|
|
3,484
|
|
|
110
|
|
|
2.9
|
|
|
325
|
|
|
9.3
|
|
|||||
Infrastructure and Networking
|
2,080
|
|
|
1,855
|
|
|
1,659
|
|
|
225
|
|
|
12.1
|
|
|
196
|
|
|
11.8
|
|
|||||
All Other
(1)
|
86
|
|
|
186
|
|
|
207
|
|
|
(100
|
)
|
|
(53.8
|
)
|
|
(21
|
)
|
|
(10.1
|
)
|
|||||
Total net revenue
|
$
|
8,305
|
|
|
$
|
8,006
|
|
|
$
|
7,389
|
|
|
$
|
299
|
|
|
3.7
|
|
|
$
|
617
|
|
|
8.4
|
|
(1)
|
Income from the Qualcomm Agreement.
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Samsung
|
21.3
|
%
|
|
17.3
|
%
|
|
10.0
|
%
|
Apple
|
13.3
|
|
|
14.6
|
|
|
13.1
|
|
Five largest customers as a group
|
48.3
|
|
|
46.9
|
|
|
42.3
|
|
•
|
general economic and specific conditions in the markets we address, including the continuing volatility in the technology sector and semiconductor industry, and trends in the wired and wireless communications markets in various geographic regions, including seasonality in sales of consumer products into which our products are incorporated;
|
•
|
the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers and distributors, to manage inventory;
|
•
|
the timing of our distributors’ shipments to their customers or when products are taken by our customers under hubbing arrangements;
|
•
|
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;
|
•
|
our ability to successfully ramp cellular SoC's;
|
•
|
the rate at which our present and future customers and end-users adopt and ramp our products and technologies;
|
•
|
the qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; and
|
•
|
the availability of credit and financing, which may lead certain of our customers to reduce their level of purchases or to seek credit or other accommodations from us.
|
|
Year Ended December 31,
|
|
2013 vs 2012
|
|
2012 vs 2011
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Product revenue
|
$
|
8,219
|
|
|
$
|
7,820
|
|
|
$
|
7,182
|
|
|
$
|
399
|
|
|
5.1
|
%
|
|
$
|
638
|
|
|
8.9
|
%
|
Income from Qualcomm Agreement
|
86
|
|
|
186
|
|
|
207
|
|
|
(100
|
)
|
|
(53.8
|
)
|
|
(21
|
)
|
|
(10.1
|
)
|
|||||
Total net revenue
|
$
|
8,305
|
|
|
$
|
8,006
|
|
|
$
|
7,389
|
|
|
$
|
299
|
|
|
3.7
|
|
|
$
|
617
|
|
|
8.4
|
|
Cost of product revenue
|
$
|
4,088
|
|
|
$
|
4,027
|
|
|
$
|
3,626
|
|
|
$
|
61
|
|
|
1.5
|
|
|
$
|
401
|
|
|
11.1
|
|
Product gross margin
|
50.3
|
%
|
|
48.5
|
%
|
|
49.5
|
%
|
|
|
|
|
|
|
|
|
|||||||||
Total gross margin
|
50.8
|
%
|
|
49.7
|
%
|
|
50.9
|
%
|
|
|
|
|
|
|
|
|
•
|
our product mix and volume of product sales (including sales to high volume customers);
|
•
|
introduction of products with lower margins;
|
•
|
the positions of our products in their respective life cycles;
|
•
|
the effects of competition;
|
•
|
the effects of competitive pricing programs and rebates;
|
•
|
provisions for excess and obsolete inventories and their relationship to demand volatility;
|
•
|
manufacturing cost efficiencies and inefficiencies;
|
•
|
our ability to create cost advantages through successful integration and convergence;
|
•
|
fluctuations in direct product costs such as silicon wafer costs and assembly, packaging and testing costs;
|
•
|
our ability to advance to the next technology node faster than our competitors;
|
•
|
licensing royalties payable by us, including licensing fees paid to NPEs;
|
•
|
the consolidation of foundry subcontractors that could potentially drive increased wafer prices;
|
•
|
product warranty costs;
|
•
|
fair value and related amortization of acquired tangible and intangible assets; and
|
•
|
amortization of acquired inventory valuation step-up.
|
|
Year Ended December 31,
|
|
2013 vs 2012
|
|
2012 vs 2011
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Salaries and benefits
|
$
|
1,420
|
|
|
$
|
1,293
|
|
|
$
|
1,096
|
|
|
$
|
127
|
|
|
9.8
|
%
|
|
$
|
197
|
|
|
18.0
|
%
|
Stock-based compensation
|
363
|
|
|
368
|
|
|
363
|
|
|
(5
|
)
|
|
(1.4
|
)
|
|
5
|
|
|
1.4
|
|
|||||
Development and design costs
|
373
|
|
|
351
|
|
|
278
|
|
|
22
|
|
|
6.3
|
|
|
73
|
|
|
26.3
|
|
|||||
Other
|
330
|
|
|
306
|
|
|
246
|
|
|
24
|
|
|
7.8
|
|
|
60
|
|
|
24.4
|
|
|||||
Research and development
|
$
|
2,486
|
|
|
$
|
2,318
|
|
|
$
|
1,983
|
|
|
$
|
168
|
|
|
7.2
|
|
|
$
|
335
|
|
|
16.9
|
|
|
Year Ended December 31,
|
|
2013 vs 2012
|
|
2012 vs 2011
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Salaries and benefits
|
$
|
343
|
|
|
$
|
344
|
|
|
$
|
293
|
|
|
$
|
(1
|
)
|
|
(0.3
|
)%
|
|
$
|
51
|
|
|
17.4
|
%
|
Stock-based compensation
|
130
|
|
|
148
|
|
|
126
|
|
|
(18
|
)
|
|
(12.2
|
)
|
|
22
|
|
|
17.5
|
|
|||||
Legal and accounting fees
|
98
|
|
|
84
|
|
|
149
|
|
|
14
|
|
|
16.7
|
|
|
(65
|
)
|
|
(43.6
|
)
|
|||||
Other
|
135
|
|
|
120
|
|
|
114
|
|
|
15
|
|
|
12.5
|
|
|
6
|
|
|
5.3
|
|
|||||
Selling, general and administrative
|
$
|
706
|
|
|
$
|
696
|
|
|
$
|
682
|
|
|
$
|
10
|
|
|
1.4
|
|
|
$
|
14
|
|
|
2.1
|
|
|
Year Ended December 31,
|
|
2013 vs 2012
|
|
2012 vs 2011
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Cost of product revenue
|
$
|
25
|
|
|
$
|
27
|
|
|
$
|
24
|
|
|
$
|
(2
|
)
|
|
(7.4
|
)%
|
|
$
|
3
|
|
|
12.5
|
%
|
Research and development
|
363
|
|
|
368
|
|
|
363
|
|
|
(5
|
)
|
|
(1.4
|
)
|
|
5
|
|
|
1.4
|
|
|||||
Selling, general and administrative
|
130
|
|
|
148
|
|
|
126
|
|
|
(18
|
)
|
|
(12.2
|
)
|
|
22
|
|
|
17.5
|
|
|||||
|
$
|
518
|
|
|
$
|
543
|
|
|
$
|
513
|
|
|
$
|
(25
|
)
|
|
(4.6
|
)
|
|
$
|
30
|
|
|
5.8
|
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Total
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Unearned stock-based compensation
|
$
|
399
|
|
|
$
|
249
|
|
|
$
|
125
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
796
|
|
|
Year Ended December 31,
|
|
2013 vs 2012
|
|
2012 vs 2011
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Cost of product revenue
|
$
|
171
|
|
|
$
|
198
|
|
|
$
|
54
|
|
|
$
|
(27
|
)
|
|
(13.6
|
)%
|
|
$
|
144
|
|
|
266.7
|
%
|
Other operating expenses
|
57
|
|
|
113
|
|
|
30
|
|
|
(56
|
)
|
|
(49.6
|
)
|
|
83
|
|
|
276.7
|
|
|||||
|
$
|
228
|
|
|
$
|
311
|
|
|
$
|
84
|
|
|
$
|
(83
|
)
|
|
(26.7
|
)
|
|
$
|
227
|
|
|
270.2
|
|
|
Purchased Intangible Asset Amortization by Year
|
||||||||||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Cost of product revenue
|
$
|
197
|
|
|
$
|
180
|
|
|
$
|
159
|
|
|
$
|
137
|
|
|
$
|
116
|
|
|
$
|
294
|
|
|
$
|
1,083
|
|
Other operating expenses
|
34
|
|
|
14
|
|
|
5
|
|
|
3
|
|
|
2
|
|
|
3
|
|
|
61
|
|
|||||||
|
$
|
231
|
|
|
$
|
194
|
|
|
$
|
164
|
|
|
$
|
140
|
|
|
$
|
118
|
|
|
$
|
297
|
|
|
$
|
1,144
|
|
|
Year Ended December 31,
|
|
2013 vs 2012
|
|
2012 vs 2011
|
||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
$ Change
|
||||||||||||
|
(In millions)
|
||||||||||||||||||
Interest expense, net
|
$
|
(30
|
)
|
|
$
|
(30
|
)
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
(25
|
)
|
Other income, net
|
3
|
|
|
10
|
|
|
8
|
|
|
(7
|
)
|
|
2
|
|
|||||
|
$
|
(27
|
)
|
|
$
|
(20
|
)
|
|
$
|
3
|
|
|
$
|
(7
|
)
|
|
$
|
(23
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions, except percentages)
|
||||||||||
Provision for (benefit of) income taxes
|
$
|
21
|
|
|
$
|
(63
|
)
|
|
$
|
29
|
|
Effective tax rates
|
4.7
|
%
|
|
(9.6
|
)%
|
|
3.0
|
%
|
|
December 31,
|
|
|
||||||||
|
2013
|
|
2012
|
|
$ Change
|
||||||
|
(In millions)
|
||||||||||
Working capital
|
$
|
2,419
|
|
|
$
|
2,099
|
|
|
$
|
320
|
|
Cash and cash equivalents
|
$
|
1,657
|
|
|
$
|
1,617
|
|
|
40
|
|
|
Short-term marketable securities
|
775
|
|
|
757
|
|
|
18
|
|
|||
Long-term marketable securities
|
1,939
|
|
|
1,348
|
|
|
591
|
|
|||
Total cash and cash equivalents and marketable securities
|
$
|
4,371
|
|
|
$
|
3,722
|
|
|
$
|
649
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Net cash provided by operating activities
|
$
|
1,785
|
|
|
$
|
1,931
|
|
|
$
|
1,838
|
|
Net cash provided by (used in) investing activities
|
(996
|
)
|
|
(4,796
|
)
|
|
863
|
|
|||
Net cash provided by (used in) financing activities
|
(749
|
)
|
|
336
|
|
|
(177
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
40
|
|
|
(2,529
|
)
|
|
2,524
|
|
|||
Cash and cash equivalents at beginning of period
|
1,617
|
|
|
4,146
|
|
|
1,622
|
|
|||
Cash and cash equivalents at end of period
|
$
|
1,657
|
|
|
$
|
1,617
|
|
|
$
|
4,146
|
|
Date
|
|
Maturity
|
|
Interest
|
|
Effective
|
|
Original
|
|
December 31,
|
|
|
|||||||||||
Issued
|
|
Date
|
|
Rate
|
|
Yield
|
|
Issue Discount
|
|
2013
|
|
2012
|
|
$ Change
|
|||||||||
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|||||||||||||
November 2010
|
|
November 2013
|
|
1.500
|
%
|
|
1.605
|
%
|
|
99.694
|
%
|
|
$
|
—
|
|
|
$
|
300
|
|
|
$
|
(300
|
)
|
November 2010
|
|
November 2015
|
|
2.375
|
|
|
2.494
|
|
|
99.444
|
|
|
400
|
|
|
400
|
|
|
—
|
|
|||
November 2011
|
|
November 2018
|
|
2.700
|
|
|
2.762
|
|
|
99.609
|
|
|
500
|
|
|
500
|
|
|
—
|
|
|||
August 2012
|
|
August 2022
|
|
2.500
|
|
|
2.585
|
|
|
99.255
|
|
|
500
|
|
|
500
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
$
|
1,400
|
|
|
$
|
1,700
|
|
|
$
|
(300
|
)
|
|||
|
|
Unaccreted discount
|
|
(6
|
)
|
|
(7
|
)
|
|
1
|
|
||||||||||||
|
|
Less current portion of long-term debt
|
|
—
|
|
|
(300
|
)
|
|
300
|
|
||||||||||||
|
|
Long-term debt
|
|
$
|
1,394
|
|
|
$
|
1,393
|
|
|
$
|
1
|
|
|
Payment Obligations by Year
|
||||||||||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Operating leases
|
$
|
170
|
|
|
$
|
143
|
|
|
$
|
100
|
|
|
$
|
58
|
|
|
$
|
42
|
|
|
$
|
43
|
|
|
$
|
556
|
|
Inventory and related purchase obligations
|
724
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
724
|
|
|||||||
Other obligations
|
206
|
|
|
41
|
|
|
24
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
274
|
|
|||||||
Long-term debt and related interest
|
36
|
|
|
435
|
|
|
26
|
|
|
26
|
|
|
526
|
|
|
550
|
|
|
1,599
|
|
|||||||
|
$
|
1,136
|
|
|
$
|
619
|
|
|
$
|
150
|
|
|
$
|
87
|
|
|
$
|
568
|
|
|
$
|
593
|
|
|
$
|
3,153
|
|
•
|
general economic and specific conditions in the markets we address, including the continuing volatility in the technology sector and semiconductor industry, and trends in the wired and wireless communications markets in various geographic regions, including seasonality in sales of consumer products into which our products are incorporated;
|
•
|
the overall levels of sales of our semiconductor products, licensing revenue, and product gross margins;
|
•
|
our business, product, capital expenditure and research and development plans, and product and technology roadmaps;
|
•
|
the market acceptance of our products;
|
•
|
acquisitions of businesses, assets, products or technologies;
|
•
|
the unavailability of credit and financing, which may lead certain of our customers to reduce their levels of purchases or to seek credit or other accommodations from us;
|
•
|
litigation expenses, settlements and judgments, customer indemnification claims and other types of litigation risks;
|
•
|
payment of cash dividends;
|
•
|
required levels of research and development and other operating costs;
|
•
|
volume price discounts and customer rebates;
|
•
|
the levels of inventory and accounts receivable that we maintain;
|
•
|
licensing royalties payable by us, including licensing fees paid to NPEs;
|
•
|
capital improvements for new and existing facilities;
|
•
|
changes in our compensation policies;
|
•
|
the issuance of restricted stock units and the related cash payments we make for withholding taxes due from employees;
|
•
|
repurchases of our Class A common stock;
|
•
|
changes in tax laws;
|
•
|
technological upgrades and improvements in our infrastructure technology systems;
|
•
|
our competitors’ responses to our products and our anticipation of and responses to their products;
|
•
|
our relationships with suppliers and customers;
|
•
|
the availability and cost of sufficient foundry, assembly and test capacity and packaging materials; and
|
•
|
the level of exercises of stock options and stock purchases under our employee stock purchase plan.
|
|
Page
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,657
|
|
|
$
|
1,617
|
|
Short-term marketable securities
|
775
|
|
|
757
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $8 million in 2013 and 2012
|
795
|
|
|
740
|
|
||
Inventory
|
525
|
|
|
527
|
|
||
Prepaid expenses and other current assets
|
163
|
|
|
140
|
|
||
Total current assets
|
3,915
|
|
|
3,781
|
|
||
Property and equipment, net
|
593
|
|
|
485
|
|
||
Long-term marketable securities
|
1,939
|
|
|
1,348
|
|
||
Goodwill
|
3,793
|
|
|
3,726
|
|
||
Purchased intangible assets, net
|
1,144
|
|
|
1,786
|
|
||
Other assets
|
111
|
|
|
82
|
|
||
Total assets
|
$
|
11,495
|
|
|
$
|
11,208
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
—
|
|
|
$
|
300
|
|
Accounts payable
|
585
|
|
|
549
|
|
||
Wages and related benefits
|
243
|
|
|
241
|
|
||
Deferred revenue and income
|
21
|
|
|
22
|
|
||
Accrued liabilities
|
647
|
|
|
570
|
|
||
Total current liabilities
|
1,496
|
|
|
1,682
|
|
||
Long-term debt
|
1,394
|
|
|
1,393
|
|
||
Other long-term liabilities
|
234
|
|
|
294
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
||
Convertible preferred stock, $.0001 par value:
Authorized shares - 6 - none issued and outstanding |
—
|
|
|
—
|
|
||
Class A common stock, $.0001 par value:
Authorized shares - 2,500 Issued and outstanding shares - 531 in 2013 and 518 in 2012 |
—
|
|
|
—
|
|
||
Class B common stock, $.0001 par value:
Authorized shares - 400 Issued and outstanding shares - 50 in 2013 and 51 in 2012 |
—
|
|
|
—
|
|
||
Additional paid-in capital
|
12,475
|
|
|
12,403
|
|
||
Accumulated deficit
|
(4,107
|
)
|
|
(4,531
|
)
|
||
Accumulated other comprehensive income (loss)
|
3
|
|
|
(33
|
)
|
||
Total shareholders’ equity
|
8,371
|
|
|
7,839
|
|
||
Total liabilities and shareholders’ equity
|
$
|
11,495
|
|
|
$
|
11,208
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net revenue:
|
|
|
|
|
|
||||||
Product revenue
|
$
|
8,219
|
|
|
$
|
7,820
|
|
|
$
|
7,182
|
|
Income from Qualcomm Agreement
|
86
|
|
|
186
|
|
|
207
|
|
|||
Total net revenue
|
8,305
|
|
|
8,006
|
|
|
7,389
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of product revenue
|
4,088
|
|
|
4,027
|
|
|
3,626
|
|
|||
Research and development
|
2,486
|
|
|
2,318
|
|
|
1,983
|
|
|||
Selling, general and administrative
|
706
|
|
|
696
|
|
|
682
|
|
|||
Amortization of purchased intangible assets
|
57
|
|
|
113
|
|
|
30
|
|
|||
Impairments of long-lived assets
|
511
|
|
|
90
|
|
|
92
|
|
|||
Restructuring costs
|
29
|
|
|
7
|
|
|
16
|
|
|||
Settlement costs (gains)
|
(69
|
)
|
|
79
|
|
|
(18
|
)
|
|||
Charitable contribution
|
25
|
|
|
—
|
|
|
25
|
|
|||
Total operating costs and expenses
|
7,833
|
|
|
7,330
|
|
|
6,436
|
|
|||
Income from operations
|
472
|
|
|
676
|
|
|
953
|
|
|||
Interest expense, net
|
(30
|
)
|
|
(30
|
)
|
|
(5
|
)
|
|||
Other income, net
|
3
|
|
|
10
|
|
|
8
|
|
|||
Income before income taxes
|
445
|
|
|
656
|
|
|
956
|
|
|||
Provision for (benefit of) income taxes
|
21
|
|
|
(63
|
)
|
|
29
|
|
|||
Net income
|
$
|
424
|
|
|
$
|
719
|
|
|
$
|
927
|
|
Net income per share (basic)
|
$
|
0.74
|
|
|
$
|
1.29
|
|
|
$
|
1.72
|
|
Net income per share (diluted)
|
$
|
0.73
|
|
|
$
|
1.25
|
|
|
$
|
1.65
|
|
Weighted average shares (basic)
|
574
|
|
|
558
|
|
|
539
|
|
|||
Weighted average shares (diluted)
|
584
|
|
|
576
|
|
|
563
|
|
|||
Dividends per share
|
$
|
0.44
|
|
|
$
|
0.40
|
|
|
$
|
0.36
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Cost of product revenue
|
$
|
25
|
|
|
$
|
27
|
|
|
$
|
24
|
|
Research and development
|
363
|
|
|
368
|
|
|
363
|
|
|||
Selling, general and administrative
|
130
|
|
|
148
|
|
|
126
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income
|
$
|
424
|
|
|
$
|
719
|
|
|
$
|
927
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net of $0 tax in 2013, 2012 and 2011
|
35
|
|
|
14
|
|
|
(61
|
)
|
|||
Unrealized gains on marketable securities, net of $0 tax in 2013, 2012 and 2011
|
1
|
|
|
3
|
|
|
2
|
|
|||
Other comprehensive income (loss)
|
36
|
|
|
17
|
|
|
(59
|
)
|
|||
Comprehensive income
|
$
|
460
|
|
|
$
|
736
|
|
|
$
|
868
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
Other
|
|
|
|||||||||||
|
|
|
|
|
Additional
|
|
|
|
Comprehensive
|
|
Total
|
|||||||||||
|
Common Stock
|
|
Paid-In
|
|
Accumulated
|
|
Income
|
|
Shareholders’
|
|||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
(Loss)
|
|
Equity
|
|||||||||||
Balance at December 31, 2010
|
539
|
|
|
$
|
—
|
|
|
$
|
11,994
|
|
|
$
|
(6,177
|
)
|
|
$
|
9
|
|
|
$
|
5,826
|
|
Shares issued pursuant to stock awards, net
|
19
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|||||
Employee stock purchase plan
|
4
|
|
|
—
|
|
|
111
|
|
|
—
|
|
|
—
|
|
|
111
|
|
|||||
Repurchases of Class A common stock
|
(17
|
)
|
|
—
|
|
|
(668
|
)
|
|
—
|
|
|
—
|
|
|
(668
|
)
|
|||||
Dividends paid
|
—
|
|
|
—
|
|
|
(194
|
)
|
|
—
|
|
|
—
|
|
|
(194
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
513
|
|
|
—
|
|
|
—
|
|
|
513
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
|
(59
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
927
|
|
|
—
|
|
|
927
|
|
|||||
Balance at December 31, 2011
|
545
|
|
|
—
|
|
|
11,821
|
|
|
(5,250
|
)
|
|
(50
|
)
|
|
6,521
|
|
|||||
Shares issued pursuant to stock awards, net
|
20
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|||||
Employee stock purchase plan
|
5
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|||||
Equity issued in business combinations
|
—
|
|
|
—
|
|
|
137
|
|
|
—
|
|
|
—
|
|
|
137
|
|
|||||
Repurchases of Class A common stock
|
(1
|
)
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|||||
Dividends paid
|
—
|
|
|
—
|
|
|
(224
|
)
|
|
—
|
|
|
—
|
|
|
(224
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
543
|
|
|
—
|
|
|
—
|
|
|
543
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
719
|
|
|
—
|
|
|
719
|
|
|||||
Balance at December 31, 2012
|
569
|
|
|
—
|
|
|
12,403
|
|
|
(4,531
|
)
|
|
(33
|
)
|
|
7,839
|
|
|||||
Shares issued pursuant to stock awards, net
|
26
|
|
|
—
|
|
|
263
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|||||
Employee stock purchase plan
|
6
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|||||
Repurchases of Class A common stock
|
(20
|
)
|
|
—
|
|
|
(597
|
)
|
|
—
|
|
|
—
|
|
|
(597
|
)
|
|||||
Dividends paid
|
—
|
|
|
—
|
|
|
(254
|
)
|
|
—
|
|
|
—
|
|
|
(254
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
521
|
|
|
—
|
|
|
—
|
|
|
521
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
36
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
424
|
|
|
—
|
|
|
424
|
|
|||||
Balance at December 31, 2013
|
581
|
|
|
$
|
—
|
|
|
$
|
12,475
|
|
|
$
|
(4,107
|
)
|
|
$
|
3
|
|
|
$
|
8,371
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
424
|
|
|
$
|
719
|
|
|
$
|
927
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
173
|
|
|
134
|
|
|
108
|
|
|||
Stock-based compensation expense
|
518
|
|
|
543
|
|
|
513
|
|
|||
Acquisition-related items:
|
|
|
|
|
|
||||||
Amortization of purchased intangible assets
|
228
|
|
|
311
|
|
|
84
|
|
|||
Impairments of long-lived assets
|
511
|
|
|
90
|
|
|
92
|
|
|||
Non-cash settlement gains
|
(2
|
)
|
|
(7
|
)
|
|
(14
|
)
|
|||
Gain on strategic investments and other
|
—
|
|
|
(11
|
)
|
|
(1
|
)
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(55
|
)
|
|
(16
|
)
|
|
154
|
|
|||
Inventory
|
2
|
|
|
(5
|
)
|
|
207
|
|
|||
Prepaid expenses and other assets
|
(25
|
)
|
|
(8
|
)
|
|
(28
|
)
|
|||
Accounts payable
|
24
|
|
|
72
|
|
|
(201
|
)
|
|||
Deferred revenue and income
|
(15
|
)
|
|
45
|
|
|
(33
|
)
|
|||
Accrued settlement costs
|
(35
|
)
|
|
54
|
|
|
21
|
|
|||
Other accrued and long-term liabilities
|
37
|
|
|
10
|
|
|
9
|
|
|||
Net cash provided by operating activities
|
1,785
|
|
|
1,931
|
|
|
1,838
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Net purchases of property and equipment
|
(228
|
)
|
|
(244
|
)
|
|
(163
|
)
|
|||
Net cash paid for acquired companies
|
(142
|
)
|
|
(3,582
|
)
|
|
(347
|
)
|
|||
Sales (purchases) of strategic investments
|
(15
|
)
|
|
27
|
|
|
(2
|
)
|
|||
Purchases of marketable securities
|
(2,682
|
)
|
|
(2,551
|
)
|
|
(2,768
|
)
|
|||
Proceeds from sales and maturities of marketable securities
|
2,071
|
|
|
1,554
|
|
|
4,143
|
|
|||
Net cash provided by (used in) investing activities
|
(996
|
)
|
|
(4,796
|
)
|
|
863
|
|
|||
Financing activities
|
|
|
|
|
|
||||||
Issuance of long-term debt, net
|
—
|
|
|
492
|
|
|
494
|
|
|||
Payments of long-term debt
|
(300
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchases of Class A common stock
|
(597
|
)
|
|
(33
|
)
|
|
(670
|
)
|
|||
Dividends paid
|
(254
|
)
|
|
(224
|
)
|
|
(194
|
)
|
|||
Payment of assumed contingent consideration and debt
|
—
|
|
|
(57
|
)
|
|
—
|
|
|||
Proceeds from issuance of common stock
|
532
|
|
|
311
|
|
|
348
|
|
|||
Minimum tax withholding paid on behalf of employees for restricted stock units
|
(130
|
)
|
|
(153
|
)
|
|
(155
|
)
|
|||
Net cash provided by (used in) financing activities
|
(749
|
)
|
|
336
|
|
|
(177
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
40
|
|
|
(2,529
|
)
|
|
2,524
|
|
|||
Cash and cash equivalents at beginning of period
|
1,617
|
|
|
4,146
|
|
|
1,622
|
|
|||
Cash and cash equivalents at end of period
|
$
|
1,657
|
|
|
$
|
1,617
|
|
|
$
|
4,146
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
18
|
|
|
$
|
25
|
|
|
$
|
23
|
|
Interest paid
|
$
|
40
|
|
|
$
|
27
|
|
|
$
|
14
|
|
1.
|
Summary of Significant Accounting Policies
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Product sales through direct sales force
|
76.2
|
%
|
|
77.4
|
%
|
|
79.1
|
%
|
Product sales maintained under fulfillment distributor arrangements
|
6.5
|
|
|
6.2
|
|
|
6.0
|
|
Product sales through distributors
|
17.3
|
|
|
16.4
|
|
|
14.9
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Work in process
|
$
|
202
|
|
|
$
|
187
|
|
Finished goods
|
323
|
|
|
340
|
|
||
|
$
|
525
|
|
|
$
|
527
|
|
|
|
|
December 31,
|
||||||
|
Useful Life
|
|
2013
|
|
2012
|
||||
|
(In years)
|
|
(In millions)
|
||||||
Leasehold improvements
|
1 to 10
|
|
$
|
248
|
|
|
$
|
232
|
|
Office furniture and equipment
|
3 to 7
|
|
45
|
|
|
41
|
|
||
Machinery and equipment
|
5
|
|
725
|
|
|
555
|
|
||
Computer software and equipment
|
2 to 10
|
|
232
|
|
|
183
|
|
||
Construction in progress
|
N/A
|
|
54
|
|
|
27
|
|
||
|
|
|
1,304
|
|
|
1,038
|
|
||
Less accumulated depreciation and amortization
|
|
|
(711
|
)
|
|
(553
|
)
|
||
|
|
|
$
|
593
|
|
|
$
|
485
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Accrued rebates
|
$
|
409
|
|
|
$
|
383
|
|
Accrued royalties
|
15
|
|
|
21
|
|
||
Accrued settlement charges
|
66
|
|
|
68
|
|
||
Accrued legal costs
|
15
|
|
|
15
|
|
||
Accrued taxes
|
20
|
|
|
16
|
|
||
Warranty reserve
|
19
|
|
|
13
|
|
||
Restructuring liabilities
|
17
|
|
|
1
|
|
||
Other
|
86
|
|
|
53
|
|
||
|
$
|
647
|
|
|
$
|
570
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Deferred rent
|
$
|
46
|
|
|
$
|
54
|
|
Accrued taxes
|
72
|
|
|
67
|
|
||
Deferred tax liabilities
|
35
|
|
|
45
|
|
||
Accrued settlement charges
|
25
|
|
|
58
|
|
||
Deferred revenue
|
33
|
|
|
47
|
|
||
Other long-term liabilities
|
23
|
|
|
23
|
|
||
|
$
|
234
|
|
|
$
|
294
|
|
|
Year Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Beginning balance
|
$
|
383
|
|
|
$
|
317
|
|
Charged as a reduction of revenue
|
888
|
|
|
727
|
|
||
Reversal of unclaimed rebates
|
(21
|
)
|
|
(18
|
)
|
||
Payments
|
(841
|
)
|
|
(643
|
)
|
||
Ending balance
|
$
|
409
|
|
|
$
|
383
|
|
|
Year Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Beginning balance
|
$
|
13
|
|
|
$
|
14
|
|
Charged to costs and expenses
|
12
|
|
|
5
|
|
||
Payments
|
(6
|
)
|
|
(6
|
)
|
||
Ending balance
|
$
|
19
|
|
|
$
|
13
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions, except per share data)
|
||||||||||
Numerator: Net income
|
$
|
424
|
|
|
$
|
719
|
|
|
$
|
927
|
|
Denominator for net income per share (basic)
|
574
|
|
|
558
|
|
|
539
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock awards
|
10
|
|
|
18
|
|
|
24
|
|
|||
Denominator for net income per share (diluted)
|
584
|
|
|
576
|
|
|
563
|
|
|||
Net income per share (basic)
|
$
|
0.74
|
|
|
$
|
1.29
|
|
|
$
|
1.72
|
|
Net income per share (diluted)
|
$
|
0.73
|
|
|
$
|
1.25
|
|
|
$
|
1.65
|
|
3.
|
Business Combinations
|
Company or Assets Acquired
|
|
Month Acquired
|
|
Business
|
|
Cash
Consideration
Paid
|
|
Cash
Assumed
|
|
Equity
Consideration
Paid
|
|
Fair Value of Assumed
Contingent
Consideration and Debt
|
|
Contingent
Consideration
Maximum
|
||||||||||
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|
|
||||||||||||
2013 Acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Renesas Transaction
|
|
October 2013
|
|
LTE
|
|
$
|
196
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2012 Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
BroadLight, Inc.
|
|
April 2012
|
|
PON processors
|
|
$
|
200
|
|
|
$
|
22
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
10
|
|
NetLogic Microsystems, Inc.
|
|
February 2012
|
|
Next generation networks
|
|
3,612
|
|
|
219
|
|
|
349
|
|
|
53
|
|
|
110
|
|
|||||
Other
|
|
Various
|
|
Various
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
$
|
3,823
|
|
|
$
|
241
|
|
|
$
|
352
|
|
|
$
|
53
|
|
|
$
|
120
|
|
2011 Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SC Square Ltd.
|
|
May 2011
|
|
Security software
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Provigent, Inc.
|
|
April 2011
|
|
Microwave backhaul systems
|
|
314
|
|
|
10
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
|
Various
|
|
Various
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
$
|
357
|
|
|
$
|
10
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Acquisitions
|
|
|
|
|
|
$
|
4,376
|
|
|
$
|
305
|
|
|
$
|
356
|
|
|
$
|
53
|
|
|
$
|
120
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Fair Market Values
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
54
|
|
|
$
|
241
|
|
|
$
|
10
|
|
Short-term marketable securities
|
—
|
|
|
48
|
|
|
1
|
|
|||
Accounts receivable, net
|
—
|
|
|
46
|
|
|
12
|
|
|||
Inventory
|
—
|
|
|
101
|
|
|
30
|
|
|||
Prepaid and other current assets
|
11
|
|
|
19
|
|
|
4
|
|
|||
Property and equipment, net
|
39
|
|
|
17
|
|
|
3
|
|
|||
Other assets
|
3
|
|
|
29
|
|
|
—
|
|
|||
Purchased intangible assets
|
85
|
|
|
1,782
|
|
|
233
|
|
|||
Goodwill
|
40
|
|
|
1,930
|
|
|
134
|
|
|||
Total assets acquired
|
232
|
|
|
4,213
|
|
|
427
|
|
|||
Accounts payable
|
10
|
|
|
47
|
|
|
7
|
|
|||
Accrued liabilities
|
22
|
|
|
42
|
|
|
6
|
|
|||
Deferred tax liabilities
|
—
|
|
|
67
|
|
|
—
|
|
|||
Contingent consideration and debt
|
—
|
|
|
53
|
|
|
—
|
|
|||
Long-term liabilities
|
4
|
|
|
44
|
|
|
57
|
|
|||
Total liabilities assumed
|
36
|
|
|
253
|
|
|
70
|
|
|||
Purchase price allocation
|
$
|
196
|
|
|
$
|
3,960
|
|
|
$
|
357
|
|
|
Weighted Average Useful Life
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In years)
|
|
(In millions)
|
||||||||||
Purchased Intangible Assets:
|
|
|
|
|
|
|
|
||||||
Developed technology
|
13
|
|
$
|
85
|
|
|
$
|
1,288
|
|
|
$
|
148
|
|
In-process research and development
|
N/A
|
|
—
|
|
|
267
|
|
|
45
|
|
|||
Customer relationships
|
4
|
|
—
|
|
|
212
|
|
|
37
|
|
|||
Other
|
3
|
|
—
|
|
|
15
|
|
|
3
|
|
|||
|
|
|
$
|
85
|
|
|
$
|
1,782
|
|
|
$
|
233
|
|
Company Acquired
|
|
Development Projects
|
|
Weighted Average Estimated Percent Complete
|
|
Average Estimated Time to Complete
|
|
Estimated Cost to Complete
|
|
Risk Adjusted Discount Rate
|
|
IPR&D
|
||||||
|
|
|
|
|
|
(In years)
|
|
(In millions)
|
|
|
|
(In millions)
|
||||||
2012 Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
NetLogic Microsystems, Inc.
|
|
Next generation networks
|
|
10
|
%
|
|
4.3
|
|
$
|
401
|
|
|
17
|
%
|
|
$
|
267
|
|
2011 Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Provigent, Inc.
|
|
Microwave
|
|
41
|
%
|
|
2.1
|
|
74
|
|
|
21
|
%
|
|
45
|
|
4.
|
Fair Value Measurements
|
|
December 31, 2013
|
||||||||||||||||||||||||||
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Short-Term Marketable Securities
|
|
Long-Term Marketable Securities
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Cash
|
$
|
307
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
307
|
|
|
$
|
307
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bank and time deposits
|
474
|
|
|
—
|
|
|
—
|
|
|
474
|
|
|
474
|
|
|
—
|
|
|
—
|
|
|||||||
Money market funds
|
277
|
|
|
—
|
|
|
—
|
|
|
277
|
|
|
277
|
|
|
—
|
|
|
—
|
|
|||||||
U.S. treasury and agency obligations
|
1,005
|
|
|
1
|
|
|
—
|
|
|
1,006
|
|
|
—
|
|
|
205
|
|
|
801
|
|
|||||||
Corporate bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Subtotal
|
1,756
|
|
|
1
|
|
|
—
|
|
|
1,757
|
|
|
751
|
|
|
205
|
|
|
801
|
|
|||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial paper
|
690
|
|
|
—
|
|
|
—
|
|
|
690
|
|
|
599
|
|
|
91
|
|
|
—
|
|
|||||||
Corporate bonds
|
1,591
|
|
|
3
|
|
|
(1
|
)
|
|
1,593
|
|
|
—
|
|
|
477
|
|
|
1,116
|
|
|||||||
Asset-backed securities and other
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
2
|
|
|
22
|
|
|||||||
Subtotal
|
2,305
|
|
|
3
|
|
|
(1
|
)
|
|
2,307
|
|
|
599
|
|
|
570
|
|
|
1,138
|
|
|||||||
Level 3:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
None
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
4,368
|
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
4,371
|
|
|
$
|
1,657
|
|
|
$
|
775
|
|
|
$
|
1,939
|
|
|
December 31, 2012
|
||||||||||||||||||||||||||
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Short-Term Marketable Securities
|
|
Long-Term Marketable Securities
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Cash
|
$
|
213
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
213
|
|
|
$
|
213
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bank and time deposits
|
904
|
|
|
—
|
|
|
—
|
|
|
904
|
|
|
884
|
|
|
20
|
|
|
—
|
|
|||||||
Money market funds
|
250
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|||||||
U.S. treasury and agency obligations
|
936
|
|
|
1
|
|
|
—
|
|
|
937
|
|
|
—
|
|
|
201
|
|
|
736
|
|
|||||||
Corporate bonds
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||||
Subtotal
|
2,091
|
|
|
1
|
|
|
—
|
|
|
2,092
|
|
|
1,134
|
|
|
222
|
|
|
736
|
|
|||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial paper
|
432
|
|
|
—
|
|
|
—
|
|
|
432
|
|
|
270
|
|
|
162
|
|
|
—
|
|
|||||||
Corporate bonds
|
921
|
|
|
2
|
|
|
(1
|
)
|
|
922
|
|
|
—
|
|
|
351
|
|
|
571
|
|
|||||||
Asset-backed securities and other
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
22
|
|
|
41
|
|
|||||||
Subtotal
|
1,416
|
|
|
2
|
|
|
(1
|
)
|
|
1,417
|
|
|
270
|
|
|
535
|
|
|
612
|
|
|||||||
Level 3:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
None
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
3,720
|
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
3,722
|
|
|
$
|
1,617
|
|
|
$
|
757
|
|
|
$
|
1,348
|
|
5.
|
Income Taxes
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Statutory federal provision for income taxes
|
$
|
156
|
|
|
$
|
230
|
|
|
$
|
335
|
|
Increase (decrease) in taxes resulting from:
|
|
|
|
|
|
||||||
Tax credits
|
(240
|
)
|
|
—
|
|
|
(140
|
)
|
|||
Federal valuation allowance changes
|
207
|
|
|
(552
|
)
|
|
154
|
|
|||
Tax rate differential on foreign earnings
|
(190
|
)
|
|
(281
|
)
|
|
(353
|
)
|
|||
Stock-based compensation expense (benefit)
|
20
|
|
|
—
|
|
|
(1
|
)
|
|||
Foreign dividend distribution
|
—
|
|
|
538
|
|
|
—
|
|
|||
Audit settlements and adjustments
|
23
|
|
|
—
|
|
|
—
|
|
|||
Other
|
45
|
|
|
2
|
|
|
34
|
|
|||
Provision for (benefit of) income taxes
|
$
|
21
|
|
|
$
|
(63
|
)
|
|
$
|
29
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Research and development and foreign tax credits
|
$
|
1,062
|
|
|
$
|
818
|
|
Capitalized research and development costs
|
77
|
|
|
106
|
|
||
Net operating loss carryforwards
|
78
|
|
|
53
|
|
||
Reserves and accruals not currently deductible for tax purposes
|
98
|
|
|
100
|
|
||
Stock-based compensation
|
63
|
|
|
98
|
|
||
Other
|
55
|
|
|
51
|
|
||
Gross deferred tax assets
|
1,433
|
|
|
1,226
|
|
||
Valuation allowance
|
(1,367
|
)
|
|
(1,124
|
)
|
||
Deferred tax assets, net
|
66
|
|
|
102
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Goodwill
|
(3
|
)
|
|
—
|
|
||
Purchased intangible assets
|
(87
|
)
|
|
(131
|
)
|
||
Gross deferred tax liabilities
|
$
|
(90
|
)
|
|
$
|
(131
|
)
|
Net deferred tax liabilities
|
$
|
(24
|
)
|
|
$
|
(29
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Beginning balance
|
$
|
331
|
|
|
$
|
212
|
|
|
$
|
187
|
|
Increase in current year
|
58
|
|
|
11
|
|
|
59
|
|
|||
Expiration of the statutes of limitation for the assessment of taxes
|
(6
|
)
|
|
(7
|
)
|
|
(3
|
)
|
|||
Decrease resulting from audits
|
(20
|
)
|
|
—
|
|
|
—
|
|
|||
Increase (decrease) related to prior year tax positions
|
40
|
|
|
—
|
|
|
(31
|
)
|
|||
Increase related to acquisitions
|
—
|
|
|
115
|
|
|
—
|
|
|||
Ending balance
|
$
|
403
|
|
|
$
|
331
|
|
|
$
|
212
|
|
6.
|
Debt and Credit Facility
|
Date
|
|
Maturity
|
|
Interest
|
|
Effective
|
|
Original
|
|
December 31,
|
|||||||||
Issued
|
|
Date
|
|
Rate
|
|
Yield
|
|
Issue Discount
|
|
2013
|
|
2012
|
|||||||
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|||||||||
November 2010
|
|
November 2013
|
|
1.500
|
%
|
|
1.605
|
%
|
|
99.694
|
%
|
|
$
|
—
|
|
|
$
|
300
|
|
November 2010
|
|
November 2015
|
|
2.375
|
|
|
2.494
|
|
|
99.444
|
|
|
400
|
|
|
400
|
|
||
November 2011
|
|
November 2018
|
|
2.700
|
|
|
2.762
|
|
|
99.609
|
|
|
500
|
|
|
500
|
|
||
August 2012
|
|
August 2022
|
|
2.500
|
|
|
2.585
|
|
|
99.255
|
|
|
500
|
|
|
500
|
|
||
|
|
|
|
|
|
|
|
|
|
$
|
1,400
|
|
|
$
|
1,700
|
|
|||
|
|
Unaccreted discount
|
|
(6
|
)
|
|
(7
|
)
|
|||||||||||
|
|
Less current portion of long-term debt
|
|
—
|
|
|
(300
|
)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
$
|
1,394
|
|
|
$
|
1,393
|
|
7.
|
Shareholders’ Equity
|
8.
|
Employee Benefit Plans
|
|
Options Outstanding
|
|||||||||||
|
Number of
Shares
|
|
Weighted Average
Exercise Price
per Share
|
|
Aggregate Intrinsic Value
|
|
Weighted-Average Remaining Contractual Term
|
|||||
|
(In millions, except per share data)
|
|
(In years)
|
|||||||||
Balance at December 31, 2010
|
78
|
|
|
$
|
27.05
|
|
|
|
|
|
||
Options granted under the 1998 Plan
|
—
|
|
|
45.82
|
|
|
|
|
|
|||
Options cancelled
|
(2
|
)
|
|
30.08
|
|
|
|
|
|
|||
Options exercised
|
(10
|
)
|
|
23.48
|
|
|
|
|
|
|||
Balance at December 31, 2011
|
66
|
|
|
27.47
|
|
|
|
|
|
|||
Options assumed
|
4
|
|
|
9.71
|
|
|
|
|
|
|||
Options cancelled
|
(1
|
)
|
|
34.55
|
|
|
|
|
|
|||
Options exercised
|
(11
|
)
|
|
17.09
|
|
|
|
|
|
|||
Balance at December 31, 2012
|
58
|
|
|
28.11
|
|
|
|
|
|
|||
Options cancelled
|
(1
|
)
|
|
37.01
|
|
|
|
|
|
|||
Options exercised
|
(18
|
)
|
|
22.49
|
|
|
$
|
156
|
|
|
|
|
Balance at December 31, 2013
|
39
|
|
|
$
|
30.39
|
|
|
$
|
121
|
|
|
2.6
|
Exercisable at December 31, 2013
|
39
|
|
|
$
|
30.44
|
|
|
$
|
119
|
|
|
2.6
|
Expected to vest after December 31, 2013
|
—
|
|
|
$
|
21.96
|
|
|
$
|
2
|
|
|
6.0
|
|
Restricted Stock Units
Outstanding
|
|||||||||
|
Number of
Shares
|
|
Weighted Average
Grant-Date
Fair Value
per Share
|
|
Aggregate Intrinsic Value
|
|||||
|
(In millions, except per share data)
|
|||||||||
Balance at December 31, 2010
|
28
|
|
|
$
|
27.17
|
|
|
|
||
Restricted stock units granted
|
10
|
|
|
42.45
|
|
|
|
|||
Restricted stock units cancelled
|
(2
|
)
|
|
31.63
|
|
|
|
|||
Restricted stock units vested
|
(14
|
)
|
|
28.84
|
|
|
|
|||
Balance at December 31, 2011
|
22
|
|
|
32.88
|
|
|
|
|||
Restricted stock units granted
|
13
|
|
|
35.76
|
|
|
|
|||
Restricted stock units assumed
|
6
|
|
|
37.54
|
|
|
|
|||
Restricted stock units cancelled
|
(2
|
)
|
|
34.79
|
|
|
|
|||
Restricted stock units vested
|
(14
|
)
|
|
29.18
|
|
|
|
|||
Balance at December 31, 2012
|
25
|
|
|
35.55
|
|
|
|
|||
Restricted stock units granted
|
14
|
|
|
33.01
|
|
|
|
|||
Restricted stock units cancelled
|
(2
|
)
|
|
35.04
|
|
|
|
|||
Restricted stock units vested
|
(13
|
)
|
|
34.03
|
|
|
$
|
408
|
|
|
Balance at December 31, 2013
|
24
|
|
|
$
|
34.91
|
|
|
$
|
708
|
|
|
Employee Stock Purchase Rights
|
|
Employee Stock Options Assumed
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Expected life (in years)
|
1.60
|
|
|
1.43
|
|
|
1.70
|
|
|
—
|
|
1.39
|
|
|
3.60
|
|
|||||
Implied volatility
|
0.35
|
|
|
0.39
|
|
|
0.37
|
|
|
—
|
|
0.41
|
|
|
0.34
|
|
|||||
Risk-free interest rate
|
0.25
|
%
|
|
0.23
|
%
|
|
0.50
|
%
|
|
—
|
|
0.22
|
%
|
|
1.56
|
%
|
|||||
Expected dividend yield
|
1.58
|
%
|
|
1.19
|
%
|
|
0.99
|
%
|
|
—
|
|
1.00
|
%
|
|
0.80
|
%
|
|||||
Weighted average fair value
|
$
|
7.80
|
|
|
$
|
9.61
|
|
|
$
|
11.01
|
|
|
—
|
|
$
|
27.54
|
|
|
$
|
11.72
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Cost of product revenue
|
$
|
25
|
|
|
$
|
27
|
|
|
$
|
24
|
|
Research and development
|
363
|
|
|
368
|
|
|
363
|
|
|||
Selling, general and administrative
|
130
|
|
|
148
|
|
|
126
|
|
|||
|
$
|
518
|
|
|
$
|
543
|
|
|
$
|
513
|
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Total
|
||||||||||||
|
|
|
|
|
(In millions)
|
|
|
|
|
||||||||||||||
Unearned stock-based compensation
|
$
|
399
|
|
|
$
|
249
|
|
|
$
|
125
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
796
|
|
|
Number of Shares
|
|
(In millions)
|
Stock options outstanding
|
39
|
Authorized for future grants under stock incentive plans
|
113
|
Authorized for future issuance under stock purchase plan
|
18
|
Restricted stock units outstanding
|
24
|
Balance at December 31, 2013
|
194
|
9.
|
Commitments and Contingencies
|
|
Payment Obligations by Year
|
||||||||||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Operating leases
|
$
|
170
|
|
|
$
|
143
|
|
|
$
|
100
|
|
|
$
|
58
|
|
|
$
|
42
|
|
|
$
|
43
|
|
|
$
|
556
|
|
Inventory and related purchase obligations
|
724
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
724
|
|
|||||||
Other obligations
|
206
|
|
|
41
|
|
|
24
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
274
|
|
|||||||
Long-term debt and related interest
|
36
|
|
|
435
|
|
|
26
|
|
|
26
|
|
|
526
|
|
|
550
|
|
|
1,599
|
|
|||||||
|
$
|
1,136
|
|
|
$
|
619
|
|
|
$
|
150
|
|
|
$
|
87
|
|
|
$
|
568
|
|
|
$
|
593
|
|
|
$
|
3,153
|
|
10.
|
Goodwill and Other Purchased Intangible Assets
|
|
Reportable Segments
|
|
|
|
|
||||||||||||||
|
Broadband
Communications
|
|
Mobile and
Wireless
|
|
Infrastructure
and Networking
|
|
Foreign
Currency
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Goodwill
|
$
|
597
|
|
|
$
|
1,013
|
|
|
$
|
2,021
|
|
|
$
|
(15
|
)
|
|
$
|
3,616
|
|
Accumulated impairment losses
|
—
|
|
|
(543
|
)
|
|
(1,286
|
)
|
|
—
|
|
|
(1,829
|
)
|
|||||
Goodwill at December 31, 2011
|
597
|
|
|
470
|
|
|
735
|
|
|
(15
|
)
|
|
1,787
|
|
|||||
Goodwill recorded in connection with acquisitions
|
125
|
|
|
—
|
|
|
1,805
|
|
|
—
|
|
|
1,930
|
|
|||||
Transfer
|
48
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|||||
Effects of foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|||||
Goodwill at December 31, 2012
|
770
|
|
|
470
|
|
|
2,492
|
|
|
(6
|
)
|
|
3,726
|
|
|||||
Goodwill recorded in connection with acquisitions
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|||||
Effects of foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
27
|
|
|||||
Goodwill at December 31, 2013
|
$
|
770
|
|
|
$
|
510
|
|
|
$
|
2,492
|
|
|
$
|
21
|
|
|
$
|
3,793
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
|
|
|
|
|
(In millions)
|
|
|
|
|
||||||||||||||
Developed technology
|
$
|
1,492
|
|
|
$
|
(539
|
)
|
|
$
|
953
|
|
|
$
|
1,748
|
|
|
$
|
(443
|
)
|
|
$
|
1,305
|
|
In-process research and development
|
130
|
|
|
—
|
|
|
130
|
|
|
311
|
|
|
—
|
|
|
311
|
|
||||||
Customer relationships
|
232
|
|
|
(176
|
)
|
|
56
|
|
|
380
|
|
|
(222
|
)
|
|
158
|
|
||||||
Other
|
34
|
|
|
(29
|
)
|
|
5
|
|
|
37
|
|
|
(25
|
)
|
|
12
|
|
||||||
|
$
|
1,888
|
|
|
$
|
(744
|
)
|
|
$
|
1,144
|
|
|
$
|
2,476
|
|
|
$
|
(690
|
)
|
|
$
|
1,786
|
|
|
2013
|
|
2012
|
||
Discount rate
|
10.5 - 12.4%
|
|
|
12.0% - 14.3%
|
|
Perpetual growth rate
|
3.0% - 4.0%
|
|
|
4.0
|
%
|
Market participant tax rate
|
15.0
|
%
|
|
15.1
|
%
|
Risk free rate
|
3.5
|
%
|
|
2.4
|
%
|
Peer company beta
|
0.82 - 1.30
|
|
|
1.19 - 1.21
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Cost of product revenue
|
$
|
171
|
|
|
$
|
198
|
|
|
$
|
54
|
|
Other operating expenses
|
57
|
|
|
113
|
|
|
30
|
|
|||
|
$
|
228
|
|
|
$
|
311
|
|
|
$
|
84
|
|
|
Purchased Intangible Asset Amortization by Year
|
||||||||||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Cost of product revenue
|
$
|
197
|
|
|
$
|
180
|
|
|
$
|
159
|
|
|
$
|
137
|
|
|
$
|
116
|
|
|
$
|
294
|
|
|
$
|
1,083
|
|
Other operating expenses
|
34
|
|
|
14
|
|
|
5
|
|
|
3
|
|
|
2
|
|
|
3
|
|
|
61
|
|
|||||||
|
$
|
231
|
|
|
$
|
194
|
|
|
$
|
164
|
|
|
$
|
140
|
|
|
$
|
118
|
|
|
$
|
297
|
|
|
$
|
1,144
|
|
11.
|
Restructuring Costs
|
12.
|
Reportable Segments, Significant Customer and Geographical Information
|
•
|
the integrated circuits marketed by each of our reportable segments are sold to one type of customer: manufacturers of wired and wireless communications equipment, which incorporate our integrated circuits into their electronic products;
|
•
|
the integrated circuits sold by each of our reportable segments use the same standard CMOS manufacturing processes; and
|
•
|
all of our integrated circuits are sold through a centralized sales force and common wholesale distributors.
|
|
Reportable Segments
|
|
|
|
|
||||||||||||||
|
Broadband
Communications
|
|
Mobile and
Wireless
|
|
Infrastructure and Networking
|
|
All
Other
|
|
Consolidated
|
||||||||||
|
|
|
|
|
(In millions)
|
|
|
|
|
||||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
2,220
|
|
|
$
|
3,919
|
|
|
$
|
2,080
|
|
|
$
|
86
|
|
|
$
|
8,305
|
|
Operating income (loss)
|
538
|
|
|
365
|
|
|
655
|
|
|
(1,086
|
)
|
|
472
|
|
|||||
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
2,156
|
|
|
$
|
3,809
|
|
|
$
|
1,855
|
|
|
$
|
186
|
|
|
$
|
8,006
|
|
Operating income (loss)
|
504
|
|
|
561
|
|
|
484
|
|
|
(873
|
)
|
|
676
|
|
|||||
Year Ended December 31, 2011
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
2,039
|
|
|
$
|
3,484
|
|
|
$
|
1,659
|
|
|
$
|
207
|
|
|
$
|
7,389
|
|
Operating income (loss)
|
391
|
|
|
572
|
|
|
545
|
|
|
(555
|
)
|
|
953
|
|
Included in "All Other" category:
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Net revenue
|
$
|
86
|
|
|
$
|
186
|
|
|
$
|
207
|
|
Stock-based compensation
|
$
|
518
|
|
|
$
|
543
|
|
|
$
|
513
|
|
Amortization of purchased intangible assets
|
228
|
|
|
311
|
|
|
84
|
|
|||
Amortization of acquired inventory valuation step-up
|
1
|
|
|
72
|
|
|
24
|
|
|||
Impairments of long-lived assets
|
511
|
|
|
90
|
|
|
92
|
|
|||
Settlement costs (gains)
|
(69
|
)
|
|
79
|
|
|
(18
|
)
|
|||
Restructuring costs, net
|
29
|
|
|
7
|
|
|
16
|
|
|||
Charitable contribution
|
25
|
|
|
—
|
|
|
25
|
|
|||
Non recurring legal fees
|
—
|
|
|
—
|
|
|
25
|
|
|||
Change in contingent earnout liability
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Employer payroll tax on certain stock option exercises
|
6
|
|
|
10
|
|
|
8
|
|
|||
Miscellaneous corporate allocation variances
|
(77
|
)
|
|
(53
|
)
|
|
(6
|
)
|
|||
Total other operating costs and expenses
|
$
|
1,172
|
|
|
$
|
1,059
|
|
|
$
|
762
|
|
Total operating loss for the “All Other” category
|
$
|
(1,086
|
)
|
|
$
|
(873
|
)
|
|
$
|
(555
|
)
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Samsung
|
21.3
|
%
|
|
17.3
|
%
|
|
10.0
|
%
|
Apple
|
13.3
|
|
|
14.6
|
|
|
13.1
|
|
Five largest customers as a group
|
48.3
|
|
|
46.9
|
|
|
42.3
|
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
China (exclusive of Hong Kong)
|
23.7
|
%
|
|
29.0
|
%
|
|
31.5
|
%
|
Hong Kong
|
27.5
|
|
|
26.9
|
|
|
25.9
|
|
Singapore, Taiwan, Thailand and Japan
|
34.5
|
|
|
31.1
|
|
|
27.3
|
|
United States
|
3.6
|
|
|
3.6
|
|
|
3.5
|
|
Europe
|
1.4
|
|
|
1.0
|
|
|
1.6
|
|
Other
|
9.3
|
|
|
8.4
|
|
|
10.2
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Total Net
Revenue |
|
Gross
Profit |
|
Net
Income (Loss) |
|
|
Diluted Net
Income (Loss) Per Share |
||||||||
|
(In millions, except per share data)
|
|||||||||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
Fourth Quarter
|
$
|
2,064
|
|
|
$
|
1,038
|
|
|
$
|
168
|
|
(1)
|
|
$
|
0.29
|
|
Third Quarter
|
2,146
|
|
|
1,102
|
|
|
316
|
|
(2)
|
|
0.55
|
|
||||
Second Quarter
|
2,090
|
|
|
1,060
|
|
|
(251
|
)
|
(3)
|
|
(0.43
|
)
|
||||
First Quarter
|
2,005
|
|
|
1,017
|
|
|
191
|
|
|
|
0.33
|
|
||||
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
||||||||
Fourth Quarter
|
$
|
2,080
|
|
|
$
|
1,055
|
|
|
$
|
251
|
|
|
|
$
|
0.43
|
|
Third Quarter
|
2,128
|
|
|
1,065
|
|
|
220
|
|
(4)
|
|
0.38
|
|
||||
Second Quarter
|
1,971
|
|
|
950
|
|
|
160
|
|
|
|
0.28
|
|
||||
First Quarter
|
1,827
|
|
|
909
|
|
|
88
|
|
(5)
|
|
0.15
|
|
(1)
|
Includes restructuring costs of
$17
million.
|
(2)
|
Includes settlement gains of
$75
million, a charitable contribution of
$25
million and restructuring costs of
$12
million.
|
(3)
|
Includes impairment of long-lived assets of
$501
million.
|
(4)
|
Includes impairment of long-lived assets of
$48
million.
|
(5)
|
Includes settlement costs of
$86
million and impairment of long-lived assets charges of
$28
million.
|
14.
|
Subsequent Events
|
|
BROADCOM CORPORATION,
|
|
a California corporation
|
|
(Registrant)
|
|
|
|
/s/ SCOTT A. MCGREGOR
|
|
Scott A. McGregor
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ S
COTT
A. M
C
G
REGOR
|
|
President and Chief Executive Officer and
|
January 30, 2014
|
Scott A. McGregor
|
|
Director (Principal Executive Officer)
|
|
|
|
|
|
/s/ H
ENRY
S
AMUELI
|
|
Chairman of the Board and Chief Technical Officer
|
January 30, 2014
|
Henry Samueli, Ph.D.
|
|
|
|
|
|
|
|
/s/ E
RIC
K. B
RANDT
|
|
Executive Vice President and Chief Financial
|
January 30, 2014
|
Eric K. Brandt
|
|
Officer (Principal Financial Officer)
|
|
|
|
|
|
/s/ R
OBERT
L. T
IRVA
|
|
Senior Vice President and Corporate Controller
|
January 30, 2014
|
Robert L. Tirva
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
/s/ R
OBERT
J. F
INOCCHIO
, J
R
.
|
|
Director
|
January 30, 2014
|
Robert J. Finocchio, Jr.
|
|
|
|
|
|
|
|
/s/ N
ANCY
H. H
ANDEL
|
|
Director
|
January 30, 2014
|
Nancy H. Handel
|
|
|
|
|
|
|
|
/s/ E
DDY
W. H
ARTENSTEIN
|
|
Director
|
January 30, 2014
|
Eddy W. Hartenstein
|
|
|
|
|
|
|
|
/s/ M
ARIA
M. K
LAWE
|
|
Director
|
January 30, 2014
|
Maria M. Klawe, Ph.D.
|
|
|
|
|
|
|
|
/s/ J
OHN
E. M
AJOR
|
|
Lead Independent Director
|
January 30, 2014
|
John E. Major
|
|
|
|
|
|
|
|
/s/ W
ILLIAM
T. M
ORROW
|
|
Director
|
January 30, 2014
|
William T. Morrow
|
|
|
|
|
|
|
|
/s/ R
OBERT
E. S
WITZ
|
|
Director
|
January 30, 2014
|
Robert E. Switz
|
|
|
|
|
Balance at
|
|
Charged
|
|
Charged to
|
|
|
|
Balance at
|
||||||||||
|
Beginning of
|
|
to Costs and
|
|
Other
|
|
|
|
End of
|
||||||||||
Description
|
Year
|
|
Expenses
|
|
Accounts
|
|
Deductions
|
|
Year
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
Sales returns
|
12
|
|
|
48
|
|
|
—
|
|
|
(53
|
)
|
|
7
|
|
|||||
Restructuring liabilities
|
1
|
|
|
41
|
|
|
—
|
|
|
(25
|
)
|
|
17
|
|
|||||
Total
|
$
|
21
|
|
|
$
|
89
|
|
|
$
|
—
|
|
|
$
|
(78
|
)
|
|
$
|
32
|
|
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
8
|
|
Sales returns
|
10
|
|
|
31
|
|
|
—
|
|
|
(29
|
)
|
|
12
|
|
|||||
Restructuring liabilities
|
8
|
|
|
7
|
|
|
—
|
|
|
(14
|
)
|
|
1
|
|
|||||
Total
|
$
|
27
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
(44
|
)
|
|
$
|
21
|
|
Year ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
Sales returns
|
14
|
|
|
37
|
|
|
—
|
|
|
(41
|
)
|
|
10
|
|
|||||
Restructuring liabilities
|
—
|
|
|
16
|
|
|
—
|
|
|
(8
|
)
|
|
8
|
|
|||||
Total
|
$
|
23
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
(49
|
)
|
|
$
|
27
|
|
|
|
|
|
Where Located
|
||||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
No.
|
|
Filing Date
|
|
Filed
Herewith
|
2.1
|
|
Agreement and plan of Merger, dated as of September 11, 2011, by and among Broadcom, NetLogic Microsystems and I&N Acquisition Corp.
|
|
8-K
|
|
000-
23993
|
|
2.1
|
|
9/12/2011
|
|
|
3.1
|
|
Second Amended and Restated Articles of Incorporation filed with the California Secretary of State on June 8, 2006
|
|
8-K
|
|
000-
23993
|
|
3.1
|
|
8/10/2006
|
|
|
3.2
|
|
Amended and Restated Bylaws, as amended through August 16, 2012
|
|
8-K
|
|
000-
23993
|
|
3.1
|
|
8/16/2012
|
|
|
4.1
|
|
Indenture, dated November 1, 2010, between the registrant and Wilmington Trust FSB
|
|
8-K
|
|
000-
23993
|
|
4.1
|
|
11/1/2010
|
|
|
4.2
|
|
Supplemental Indenture, dated November 1, 2010, between the registrant and Wilmington Trust FSB, including the form of Broadcom’s 2.375% Senior Notes due 2015
|
|
8-K
|
|
000-
23993
|
|
4.2
|
|
11/1/2010
|
|
|
4.3
|
|
Second Supplemental Indenture, dated November 9, 2011, between the registrant and Wilmington Trust, National Association, including the form of Broadcom’s 2.700% Senior Notes due 2018
|
|
8-K
|
|
000-
23993
|
|
4.1
|
|
11/9/2011
|
|
|
4.4
|
|
Third Supplemental Indenture, dated August 16, 2012, between Broadcom and Wilmington Trust, National Association, including the forms of Broadcom's 2.500% Senior Notes due 2022
|
|
8-K
|
|
000-
23993
|
|
4.1
|
|
8/16/2012
|
|
|
10.1*
|
|
Performance Bonus Plan (as amended and restated March 5, 2010)
|
|
8-K
|
|
000-
23993
|
|
99.1
|
|
3/9/2010
|
|
|
10.2*
|
|
Fourth Amendment dated August 9, 2010 to Letter Agreement between the registrant and Scott A. McGregor
|
|
10-Q
|
|
000-
23993
|
|
10.1
|
|
10/26/2010
|
|
|
10.3*
|
|
Third Amendment dated August 9, 2010 to Letter Agreement between the registrant and Eric K. Brandt
|
|
10-Q
|
|
000-
23993
|
|
10.2
|
|
10/26/2010
|
|
|
10.4*
|
|
Form of Revised Letter Agreement for Change in Control Severance Benefit Program dated August 9, 2010 between the registrant and Thomas F. Lagatta; and each of the following executive officers: Arthur Chong, Neil Kim, Daniel A. Marotta, Robert A. Rango, and Terri L. Timberman;
|
|
10-Q
|
|
000-
23993
|
|
10.5
|
|
10/26/2010
|
|
|
10.5*
|
|
Revised Letter Agreement for Change in Control Severance Benefit Program dated August 9, 2010 between the registrant and Robert L. Tirva
|
|
10-Q
|
|
000-
23993
|
|
10.6
|
|
10/26/2010
|
|
|
|
|
|
|
Where Located
|
||||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
No.
|
|
Filing Date
|
|
Filed
Herewith
|
10.6*
|
|
Amendment dated August 9, 2010 to Letter Agreement for Change in Control Severance Benefit Program
between the registrant and Rajiv Ramaswami
|
|
10-Q
|
|
000-
23993
|
|
10.4
|
|
10/26/2010
|
|
|
10.7*
|
|
Agreement for Change in Control Severance Benefit Program dated April 1, 2013 between the registrant and Michael E. Hurlston
|
|
10-Q
|
|
000-
23993
|
|
10.1
|
|
4/23/2013
|
|
|
10.8*
|
|
Severance Benefit Plan for Vice Presidents and Above and Summary Plan Description effective June 1, 2010 (Amended December 16, 2011)
|
|
10-K
|
|
000- 23993
|
|
10.7
|
|
1/31/2013
|
|
|
10.9*
|
|
1998 Stock Incentive Plan, as amended and restated November 11, 2010
|
|
10-K
|
|
000-
23993
|
|
10.14
|
|
2/2/2011
|
|
|
10.10*
|
|
1998 Stock Incentive Plan form of Notice of Grant of Stock Option for executive officers
|
|
10-K
|
|
000-
23993
|
|
10.17
|
|
2/4/2009
|
|
|
10.11*
|
|
1998 Stock Incentive Plan form of Stock Option Agreement for executive officers
|
|
10-K
|
|
000-
23993
|
|
10.21
|
|
2/4/2009
|
|
|
10.12*
|
|
1998 Stock Incentive Plan form of Automatic Stock Option Agreement for Non-Employee Directors (under prior Director Automatic Grant Program)
|
|
10-Q
|
|
000-
23993
|
|
10.2
|
|
11/9/2004
|
|
|
10.13*
|
|
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for Scott A. McGregor
|
|
10-K
|
|
000-
23993
|
|
10.18
|
|
2/2/2011
|
|
|
10.14*
|
|
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for executive officers other than Scott A. McGregor
|
|
10-K
|
|
000-
23993
|
|
10.19
|
|
2/2/2011
|
|
|
10.15*
|
|
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for executive officers (for RSUs governed by the Special RSU Program)
|
|
10-K
|
|
000-
23993
|
|
10.20
|
|
2/2/2011
|
|
|
10.16*
|
|
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for Non-Employee Directors (Annual Award)
|
|
10-K
|
|
000-
23993
|
|
10.29
|
|
2/4/2009
|
|
|
10.17*
|
|
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for Non-Employee Directors (Pro-rated Awards)
|
|
10-K
|
|
000-
23993
|
|
10.30
|
|
2/4/2009
|
|
|
10.18*
|
|
1998 Stock Incentive Plan form of Restricted Stock Unit Award Agreement for Non-Employee Directors (Initial Awards under prior Director Automatic Grant Program)
|
|
10-Q
|
|
000-
23993
|
|
10.3
|
|
5/4/2005
|
|
|
10.19*
|
|
2012 Stock Incentive Plan
|
|
S-8
|
|
333- 186334
|
|
99.1
|
|
1/31/2013
|
|
|
|
|
|
|
Where Located
|
||||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
No.
|
|
Filing Date
|
|
Filed
Herewith
|
10.20*
|
|
2012 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for Scott A. McGregor
|
|
|
|
|
|
|
|
|
|
X
|
10.21*
|
|
2012 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for executive officers other than Scott A. McGregor
|
|
|
|
|
|
|
|
|
|
X
|
10.22*
|
|
2012 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for executive officers (for RSUs governed by the special RSU program (3 year cliff vesting))
|
|
|
|
|
|
|
|
|
|
X
|
10.23*
|
|
2012 Stock Incentive Plan form of Notice of Grant of Stock Option and form of Stock Option Agreement for executive officers
|
|
|
|
|
|
|
|
|
|
X
|
10.24*
|
|
2012 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for Non-Employee Directors (Annual Award)
|
|
|
|
|
|
|
|
|
|
X
|
10.25*
|
|
2012 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for Non-Employee Directors (Pro-rated Awards)
|
|
|
|
|
|
|
|
|
|
X
|
10.26*
|
|
Restricted Stock Units Incentive Award Program
|
|
8-K
|
|
000-
23993
|
|
10.1
|
|
1/20/2011
|
|
|
10.27*
|
|
Restricted Stock Unit Incentive Award Program — Form of Award Letter
|
|
8-K
|
|
000-
23993
|
|
10.2
|
|
1/20/2011
|
|
|
10.28*
|
|
Form of Indemnification Agreement for Directors, Elected Officers and certain
employees or agents of the registrant
|
|
8-K
|
|
000-
23993
|
|
10.1
|
|
6/24/2008
|
|
|
10.29††
|
|
Settlement and Patent License and Non-Assert Agreement by and between Qualcomm Incorporated and the registrant
|
|
8-K/A
|
|
000-
23993
|
|
10.1
|
|
7/23/2009
|
|
|
10.30
|
|
Credit Agreement, dated as of November 19, 2010, by and among the registrant, Bank of America, N.A. and the other lenders party thereto.
|
|
8-K
|
|
000-
23993
|
|
10.1
|
|
11/22/2010
|
|
|
10.31
|
|
First Amendment to Credit Agreement dated as of October 31, 2011 by and among the registrant, the lenders party thereto, and Bank of America, N.A.
|
|
8-K
|
|
000-
2393
|
|
10.1
|
|
11/1/2011
|
|
|
10.32
|
|
Lease Agreement dated May 18, 2000 between M-D Downtown Sunnyvale, LLC and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.21
|
|
3/31/2003
|
|
|
10.33
|
|
Amendment dated September 30, 2005 to Lease Agreement dated May 18, 2000 between M-D Downtown Sunnyvale, LLC and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.43
|
|
2/4/2009
|
|
|
10.34
|
|
Second Amendment dated October 15, 2010 to Lease Agreement dated May 18, 2000 between M-D Downtown Sunnyvale, LLC and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.36
|
|
2/2/2011
|
|
|
|
|
|
|
Where Located
|
||||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
No.
|
|
Filing Date
|
|
Filed
Herewith
|
10.35††
|
|
Lease Agreement dated December 29, 2004 between Irvine Commercial Property Company and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.38
|
|
3/1/2005
|
|
|
10.36
|
|
First Amendment, Second Amendment, and Third Amendment dated June 7, 2005, April 9, 2007 and April 9, 2007, respectively, to Lease dated December 29, 2004 between Irvine Commercial Property Company LLC and the registrant
|
|
10-Q
|
|
000-
23993
|
|
10.20
|
|
10/24/2007
|
|
|
10.37
|
|
Fourth Amendment dated November 19, 2007 to Lease dated December 29, 2004 between Irvine Commercial Property Company LLC and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.43
|
|
1/28/2008
|
|
|
10.38
|
|
Fifth Amendment dated February 26, 2013 to Lease dated December 29, 2004 between The Irvine Company LLC and the registrant
|
|
|
|
|
|
|
|
|
|
X
|
10.39
|
|
Lease Agreement dated October 31, 2007 between Irvine Commercial Property Company LLC and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.44
|
|
1/28/2008
|
|
|
10.40
|
|
First Amendment dated November 12, 2008 to Lease Agreement dated October 31, 2007 between Irvine Commercial Property Company LLC and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.49
|
|
2/4/2009
|
|
|
10.41
|
|
Second Amendment, Third Amendment, and Fourth Amendment dated July 30, 2010, September 14, 2010 and November 15, 2010, respectively, to Lease Agreement dated October 31, 2007 between Irvine Commercial Property Company LLC and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.42
|
|
2/2/2011
|
|
|
10.42
|
|
Fifth and Sixth Amendment dated April 24, 2011 and August 2, 2011, respectively to Lease Agreement dated October 31, 2007 between Irvine Commercial Property Company LLC and the registrant
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10-K
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000-
23993
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10.45
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2/1/2012
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10.43
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Seventh Amendment dated June 28, 2012 to Lease Agreement dated October 31, 2007 between Irvine Commercial Property Company LLC and the registrant
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10-K
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000- 23993
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10.37
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1/30/2013
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10.44
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Eighth Amendment dated February 26, 2013 to Lease Agreement dated October 31, 2007 between The Irvine Company LLC and the registrant
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X
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21.1
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Subsidiaries of the Company
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X
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23.1
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Consent of KPMG LLP
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X
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31.1
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Certification of the Chief Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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X
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Participant:
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_______________________________
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Award Date:
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______________________, 20____
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Vesting Commencement Date:
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______________________, 20___ (the “Vesting Commencement Date”)
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Number of Shares Subject to Award:
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______________ shares of Common Stock (the “Shares”)
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Vesting Schedule:
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The Shares shall vest in a series of sixteen (16) successive equal quarterly installments upon the Participant’s completion of each successive three (3)-month period of Service (each date on which such three (3)-month period ends, a “Vesting Date”) over the forty-eight (48)-month period measured from the Vesting Commencement Date (the “Normal Vesting Schedule”). However, the Shares may also vest in whole or in part on an accelerated basis in accordance with the provisions of Sections 3 and 5 of this Agreement.
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Issuance Schedule:
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Subject to Section 8 of this Agreement, each quarterly installment of Shares to which the Participant becomes entitled in accordance with the Normal Vesting Schedule shall be issued, subject to the Corporation’s collection of the applicable Withholding Taxes, on the date that installment vests in accordance with such schedule or as soon thereafter as administratively practicable, but in no event later than thirty (30) days after the applicable Vesting Date. Any Shares that vest on an accelerated basis pursuant to Section 3 or 5 of this Agreement shall be issued in accordance with the applicable provisions of such section. The Corporation shall in all instances collect the applicable Withholding Taxes with respect to the issued Shares pursuant to the procedures set forth in Section 7 of this Agreement.
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BROADCOM CORPORATION
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By:
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Title:
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PARTICIPANT
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Signature:
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Name:
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Address:
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Participant:
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_______________________________
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Award Date:
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______________________, 20____
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Vesting Commencement Date:
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______________________, 20___ (the “Vesting Commencement Date”)
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Number of Shares Subject to Award:
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______________ shares of Common Stock (the “Shares”)
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Vesting Schedule:
|
The Shares shall vest in a series of sixteen (16) successive equal quarterly installments upon the Participant’s completion of each successive three (3)-month period of continuous Service (each date on which such three (3)-month period ends, a “Vesting Date”) over the forty-eight (48)-month period measured from the Vesting Commencement Date (the “Normal Vesting Schedule”). However, the Shares may also vest in whole or in part on an accelerated basis in accordance with the provisions of Sections 3 and 6 of this Agreement.
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Issuance Schedule:
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Subject to Section 9 of this Agreement, each quarterly installment of Shares to which the Participant becomes entitled in accordance with the Normal Vesting Schedule shall be issued, subject to the Corporation’s collection of the applicable Withholding Taxes, on the date that installment vests in accordance with such schedule or as soon thereafter as administratively practicable, but in no event later than thirty (30) days after the applicable Vesting Date. Any Restricted Stock Units that vest on an accelerated basis pursuant to Section 3 or 6 of this Agreement shall be issued in accordance with the applicable provisions of such section. The Corporation shall in all instances collect the applicable Withholding Taxes with respect to the issued Shares pursuant to the procedures set forth in Section 8 of this Agreement.
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BROADCOM CORPORATION
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By:
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Title:
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PARTICIPANT
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Signature:
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Name:
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Address:
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Participant:
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_______________________________
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Award Date:
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______________________, 20___
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Vesting Commencement Date
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______________________, 20___ (the “Vesting Commencement Date”)
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Number of Shares Subject to Award:
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______________ shares of Common Stock (the “Shares”)
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Vesting Schedule:
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The Shares shall vest upon the Participant’s continuation in Service through the end of the three (3)-year period measured from the Vesting Commencement Date (the “Required Service Period”). However, the Shares may vest in whole or in part on an accelerated basis in accordance with the provisions of Sections 3 and 6 of this Agreement.
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Issuance Schedule:
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Subject to the delayed issuance provisions of Section 9 of this Agreement (to the extent applicable), the Shares to which the Participant becomes entitled upon continuation in Service through the completion of the Required Service Period shall be issued upon the completion of such period or as soon thereafter as administratively practicable, but in no event later than thirty (30) days after the completion of such period. Any Restricted Stock Units which vest on an accelerated basis pursuant to Section 3 or 6 of this Agreement shall be settled in accordance with the applicable provisions of such section. The Corporation shall in all instances collect the applicable Withholding Taxes with respect to the issued Shares pursuant to the procedures set forth in Section 8 of this Agreement.
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BROADCOM CORPORATION
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By:
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Title:
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PARTICIPANT
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Signature:
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Name:
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Address:
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Optionee:
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Grant Date:
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Vesting Commencement Date:
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Exercise Price:
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$ per share
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Number of Option Shares:
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Expiration Date:
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Type of Option:
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Incentive Stock Option or Non-Statutory Stock Option
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A.
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Agreement
shall mean this Stock Option Agreement.
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B.
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Board
shall mean the Corporation’s Board of Directors.
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W.
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Plan
shall mean the Corporation’s 2012 Stock Incentive Plan.
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Award Date:
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______________________, 20__
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Number of Units Subject to Award:
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_____ Units representing an equal number of shares of Common Stock (the “Shares”)
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Vesting Schedule:
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The Units will vest in four (4) successive equal quarterly installments over your period of continued Service measured from the Award Date. Provided you continue in such Service, the first three such quarterly vesting dates will occur on August 5, 20____, November 5, 20____ and February 5, 20____, respectively, and the final quarterly vesting date will occur upon your continuation in Service through the
earlier of
May 5, 20____ or the day immediately preceding the date of the first annual meeting of the Corporation’s shareholders following the Award Date. The Units will also be subject to accelerated vesting in accordance with the applicable provisions of Paragraphs 1 and 6 below.
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Issuance Schedule:
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The Shares will be issued immediately as the Units vest incrementally in accordance with the foregoing Vesting Schedule, but in no event later than the
later
of (i) the close of the calendar year in which the applicable vesting date occurs or (ii) the fifteenth day of the third calendar month following such vesting date.
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Name of Entity
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State or Other Jurisdiction of Incorporation or Organization
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Broadcom International Limited
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Cayman Islands
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Broadcom Singapore Pte Ltd.
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Singapore
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Broadcom Cayman Limited
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Cayman Islands
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Broadcom Bermuda LP
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Bermuda
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NetLogic I LLC (formerly known as NetLogic Microsystems, Inc.)
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Delaware
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ServerWorks Corporation
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Delaware
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ServerWorks International Ltd.
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Cayman Islands
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/s/ S
COTT
A. M
C
G
REGOR
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Scott A. McGregor
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President and Chief Executive Officer
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(Principal Executive Officer)
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/s/ E
RIC
K. B
RANDT
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Eric K. Brandt
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Executive Vice President and
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Chief Financial Officer
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(Principal Financial Officer)
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/
S
/ S
COTT
A. M
C
G
REGOR
|
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Scott A. McGregor
|
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Chief Executive Officer
|
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/
S
/ E
RIC
K. B
RANDT
|
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Eric K. Brandt
|
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Chief Financial Officer
|