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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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©
2015 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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Net Revenue: $8.43 billion
|
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Net Revenue: $8.31 billion
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Net Revenue: $8.01 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 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. In addition, we also offer 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, we offer product families that combine 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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• Humax
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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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• Technicolor
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• Huawei Technologies
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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).
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• 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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•
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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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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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our exit or entry into various markets and our ability to align our resources to areas of strategic focus;
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•
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changes in customer product needs and market acceptance of our products;
|
•
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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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•
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goodwill and other purchased intangible impairment charges;
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•
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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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•
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the impact of tax examinations.
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•
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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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political, social and economic instability;
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•
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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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logistical delays or disruptions;
|
•
|
changes in taxation and tariffs; and
|
•
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difficulties in staffing and managing international operations.
|
•
|
lower revenue, gross margins and operating income than originally anticipated at the time of acquisition and other financial challenges;
|
•
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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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the loss of key personnel;
|
•
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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
|
•
|
the location of foundries and other suppliers in regions that are subject to earthquakes, tsunamis and other natural disasters.
|
•
|
use of cash to consummate various transactions;
|
•
|
our views on potential future capital requirements for investments in acquisitions and the funding of our research and development;
|
•
|
changes in federal and state income tax laws or corporate laws; and
|
•
|
changes to our business model.
|
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2014
|
|
2013
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
Fourth Quarter
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$
|
44.33
|
|
|
$
|
34.50
|
|
|
$
|
29.75
|
|
|
$
|
24.60
|
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Third Quarter
|
$
|
41.65
|
|
|
$
|
36.55
|
|
|
$
|
34.96
|
|
|
$
|
23.25
|
|
Second Quarter
|
$
|
38.85
|
|
|
$
|
28.86
|
|
|
$
|
37.85
|
|
|
$
|
31.25
|
|
First Quarter
|
$
|
32.31
|
|
|
$
|
28.30
|
|
|
$
|
35.50
|
|
|
$
|
32.12
|
|
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 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
November 2014
|
|
2.5
|
|
|
41.69
|
|
|
2.5
|
|
|
|
|
December 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
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Total
|
|
2.5
|
|
|
$
|
41.69
|
|
|
2.5
|
|
|
N/A
|
|
Year Ended December 31,
|
||||||||||||||||||
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2014
(1)
|
|
2013
(2)
|
|
2012
(3)
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|
2011
(4)
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|
2010
(5)
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||||||||||
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(In millions, except per share data)
|
||||||||||||||||||
Consolidated Statements of Income Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
(6)
|
$
|
8,428
|
|
|
$
|
8,305
|
|
|
$
|
8,006
|
|
|
$
|
7,389
|
|
|
$
|
6,818
|
|
Income from operations
|
694
|
|
|
472
|
|
|
676
|
|
|
953
|
|
|
1,082
|
|
|||||
Net income
|
652
|
|
|
424
|
|
|
719
|
|
|
927
|
|
|
1,082
|
|
|||||
Net income per share (diluted)
|
$
|
1.08
|
|
|
$
|
0.73
|
|
|
$
|
1.25
|
|
|
$
|
1.65
|
|
|
$
|
1.99
|
|
Dividends per share
|
$
|
0.48
|
|
|
$
|
0.44
|
|
|
$
|
0.40
|
|
|
$
|
0.36
|
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents and short-term and long-term marketable securities
|
$
|
5,989
|
|
|
$
|
4,371
|
|
|
$
|
3,722
|
|
|
$
|
5,205
|
|
|
$
|
4,058
|
|
Working capital
|
3,522
|
|
|
2,419
|
|
|
2,099
|
|
|
4,653
|
|
|
2,913
|
|
|||||
Goodwill and purchased intangible assets
|
4,374
|
|
|
4,937
|
|
|
5,512
|
|
|
2,187
|
|
|
2,043
|
|
|||||
Total assets
|
12,471
|
|
|
11,495
|
|
|
11,208
|
|
|
9,040
|
|
|
7,944
|
|
|||||
Total debt
|
1,593
|
|
|
1,394
|
|
|
1,693
|
|
|
1,196
|
|
|
697
|
|
|||||
Total shareholders’ equity
|
9,051
|
|
|
8,371
|
|
|
7,839
|
|
|
6,521
|
|
|
5,826
|
|
(1)
|
Includes impairment of long-lived assets of $404 million, restructuring costs of $158 million related to our exit of the cellular baseband business, other gains of $60 million and settlement costs of $16 million.
|
(2)
|
Includes impairment of long-lived assets of $511 million, settlement gains of $69 million, restructuring costs of $29 million and a charitable contribution of $25 million.
|
(3)
|
Includes impairment of long-lived assets of $90 million, settlement costs of $79 million, and restructuring costs of $7 million. In addition, includes the impact of the NetLogic Microsystems, Inc. acquisition in February 2012.
|
(4)
|
Includes impairment of long-lived assets of $92 million, settlement gains of $18 million, restructuring costs of $16 million, and a charitable contribution of $25 million.
|
(5)
|
Includes settlement costs of $53 million and impairment of long-lived assets of $19 million.
|
(6)
|
Includes income relating to the Qualcomm Agreement, entered into with Qualcomm Corporation in April 2009, of $86 million, $186 million, $207 million and $206 million, 2013, 2012, 2011 and 2010, respectively. Income from this agreement terminated in April 2013.
|
•
|
Our cash and cash equivalents and marketable securities were
$5.99 billion
at
December 31, 2014
, compared with
$4.37 billion
at
December 31, 2013
. We generated cash flow from operations of
$1.93 billion
during
2014
, as compared to
$1.79 billion
in
2013
.
|
•
|
In January 2014 our Board of Directors adopted an amendment to our existing dividend policy pursuant to which we increased our quarterly cash dividend by
9.0%
to
$0.12
per share (
$0.48
per share on an annual basis) payable to holders of our common stock.
|
•
|
We repurchased
14.7 million
shares of our Class A common stock at a weighted average price of
$35.53
.
|
•
|
In March 2014 we sold certain Ethernet controller-related assets and provided non-exclusive licenses to intellectual property, including a non-exclusive patent license, to QLogic for a total of $209 million, referred to as the QLogic Transaction. In connection with the transaction, we recorded a gain on the sale of assets of $48 million (net of a goodwill adjustment of $37 million) and deferred revenue of $120 million.
|
•
|
In March 2014 we recorded impairment charges, primarily for completed technology, of $25 million related mainly to our acquisition of SC Square Ltd., or SC Square, and the Renesas Transaction.
|
•
|
In June 2014 and September 2014, we recorded purchased intangible impairment charges of $35 million and $200 million, respectively, related to our acquisition of NetLogic Microsystems, Inc., or NetLogic, in 2012.
|
•
|
As discussed below under “Exit of Cellular Baseband Business,” we recorded $152 million of restructuring costs, $144 million of non-cash charges for the impairment of certain long-lived assets, and $27 million for inventory charges in 2014.
|
•
|
In July 2014 we issued senior unsecured notes in an aggregate principal amount of $600 million, which consist of (i) $350 million aggregate principal amount of notes that mature in August 2024 and bear
|
•
|
In August 2014 we utilized a portion of our net proceeds from the issuance of senior unsecured notes discussed above to redeem $400 million principal aggregate amount of our 2.375% senior notes that were due November 2015. As a result of this transaction, we recorded interest expense of $11 million in the three months ended September 30, 2014, primarily due to the premium paid upon redemption of those notes.
|
•
|
In November 2014 our Board of Directors adopted an amendment to our existing dividend policy pursuant to which we intend to increase the quarterly cash dividend by
17%
to
$0.14
per share for each quarter in 2015 (
$0.56
per share on an annual basis).
|
•
|
In November 2014 our Board of Directors authorized a share repurchase program for the repurchase of up to $1.0 billion.
|
|
Reportable Segments
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Broadband and
Connectivity |
|
Infrastructure and Networking
|
|
Total Reportable Segments
|
|
Cellular Baseband
|
|
All
Other |
|
Consolidated
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net revenue
|
$
|
5,535
|
|
|
$
|
2,525
|
|
|
$
|
8,060
|
|
|
$
|
368
|
|
|
$
|
—
|
|
|
$
|
8,428
|
|
Operating income (loss)
|
1,086
|
|
|
685
|
|
|
1,771
|
|
|
(339
|
)
|
|
(738
|
)
|
|
694
|
|
||||||
Operating margin
|
19.6
|
%
|
|
27.1
|
%
|
|
22.0
|
%
|
|
(92.1
|
)%
|
|
|
|
8.2
|
%
|
|||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net revenue
|
$
|
5,430
|
|
|
$
|
2,155
|
|
|
$
|
7,585
|
|
|
$
|
634
|
|
|
$
|
86
|
|
|
$
|
8,305
|
|
Operating income (loss)
|
1,003
|
|
|
412
|
|
|
1,415
|
|
|
(369
|
)
|
|
(574
|
)
|
|
472
|
|
||||||
Operating margin
|
18.5
|
%
|
|
19.1
|
%
|
|
18.7
|
%
|
|
(58.2
|
)%
|
|
|
|
5.7
|
%
|
|||||||
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net revenue
|
$
|
5,232
|
|
|
$
|
1,911
|
|
|
$
|
7,143
|
|
|
$
|
677
|
|
|
$
|
186
|
|
|
$
|
8,006
|
|
Operating income (loss)
|
990
|
|
|
189
|
|
|
1,179
|
|
|
(169
|
)
|
|
(334
|
)
|
|
676
|
|
||||||
Operating margin
|
18.9
|
%
|
|
9.9
|
%
|
|
16.5
|
%
|
|
(25.0
|
)%
|
|
|
|
8.4
|
%
|
•
|
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 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; and
|
•
|
charitable contributions.
|
•
|
Net Revenue and Related Pricing Adjustments.
Establishing accruals for pricing adjustments requires the use of judgment and estimates that impact the amount and timing of revenue recognition. We record reductions of revenue for pricing adjustments, such as competitive pricing programs and rebates, in the same period that the related revenue is recorded. 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 pricing adjustments exceed our estimates.
|
•
|
Inventory.
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 demand and market conditions. If our judgments about actual demand and market conditions are less favorable than those projected at the time we issue our financial statements, additional inventory write-downs could be required, which would increase our cost of revenue and reduce our gross margins.
|
•
|
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 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. Significant judgment is required in assessing all the future tax consequences that have been recognized in our consolidated financial statements. Variations in the actual outcome of these future tax consequences could materially impact our consolidated financial statements. Forming a conclusion that a valuation allowance is not required is very difficult when there is negative evidence such as cumulative losses in recent years. In the future, if we realize a deferred tax asset that currently carries a valuation allowance, we may record a reduction of income tax expense in the period of such realization. Conversely, if we were to determine that we would not be able to realize all or a portion of our deferred tax assets in the future, we would reduce such amounts through an increase to tax expense in the period in which that determination is made.
|
•
|
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 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,
|
|
2014 vs 2013
|
|
2013 vs 2012
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Broadband and Connectivity
|
$
|
5,535
|
|
|
$
|
5,430
|
|
|
$
|
5,232
|
|
|
$
|
105
|
|
|
1.9
|
%
|
|
$
|
198
|
|
|
3.8
|
%
|
Infrastructure and Networking
|
2,525
|
|
|
2,155
|
|
|
1,911
|
|
|
370
|
|
|
17.2
|
|
|
244
|
|
|
12.8
|
|
|||||
Total reportable segments
|
8,060
|
|
|
7,585
|
|
|
7,143
|
|
|
475
|
|
|
6.3
|
|
|
442
|
|
|
6.2
|
|
|||||
Cellular Baseband
|
368
|
|
|
634
|
|
|
677
|
|
|
(266
|
)
|
|
(42.0
|
)
|
|
(43
|
)
|
|
(6.4
|
)
|
|||||
All Other
|
—
|
|
|
86
|
|
|
186
|
|
|
(86
|
)
|
|
(100.0
|
)
|
|
(100
|
)
|
|
(53.8
|
)
|
|||||
Total net revenue
|
$
|
8,428
|
|
|
$
|
8,305
|
|
|
$
|
8,006
|
|
|
$
|
123
|
|
|
1.5
|
|
|
$
|
299
|
|
|
3.7
|
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
|
(as a % of net revenue)
|
|||||||
Broadband and Connectivity
|
65.6
|
%
|
|
65.5
|
%
|
|
65.3
|
%
|
Infrastructure and Networking
|
30.0
|
|
|
25.9
|
|
|
23.9
|
|
Total reportable segments
|
95.6
|
|
|
91.4
|
|
|
89.2
|
|
Cellular Baseband
|
4.4
|
|
|
7.6
|
|
|
8.5
|
|
All Other
|
—
|
|
|
1.0
|
|
|
2.3
|
|
Total net revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Samsung
|
14.2
|
%
|
|
21.3
|
%
|
|
17.3
|
%
|
Apple
|
14.0
|
|
|
13.3
|
|
|
14.6
|
|
Five largest customers as a group
|
44.1
|
|
|
48.3
|
|
|
46.9
|
|
•
|
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;
|
•
|
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,
|
|
2014 vs 2013
|
|
2013 vs 2012
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Net revenue
|
$
|
8,428
|
|
|
$
|
8,305
|
|
|
$
|
8,006
|
|
|
$
|
123
|
|
|
1.5
|
|
|
$
|
299
|
|
|
3.7
|
|
Cost of revenue
|
$
|
4,098
|
|
|
$
|
4,088
|
|
|
$
|
4,027
|
|
|
$
|
10
|
|
|
0.2
|
|
|
$
|
61
|
|
|
1.5
|
|
Gross profit
|
$
|
4,330
|
|
|
$
|
4,217
|
|
|
$
|
3,979
|
|
|
113
|
|
|
2.7
|
%
|
|
$
|
238
|
|
|
6.0
|
%
|
|
Gross margin
|
51.4
|
%
|
|
50.8
|
%
|
|
49.7
|
%
|
|
|
|
|
|
|
|
|
•
|
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,
|
|
2014 vs 2013
|
|
2013 vs 2012
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Salaries and benefits
|
$
|
1,691
|
|
|
$
|
1,783
|
|
|
$
|
1,661
|
|
|
$
|
(92
|
)
|
|
(5.2
|
)%
|
|
$
|
122
|
|
|
7.3
|
%
|
Development and design costs
|
354
|
|
|
373
|
|
|
351
|
|
|
(19
|
)
|
|
(5.1
|
)
|
|
22
|
|
|
6.3
|
|
|||||
Other
|
328
|
|
|
330
|
|
|
306
|
|
|
(2
|
)
|
|
(0.6
|
)
|
|
24
|
|
|
7.8
|
|
|||||
Research and development
|
$
|
2,373
|
|
|
$
|
2,486
|
|
|
$
|
2,318
|
|
|
$
|
(113
|
)
|
|
(4.5
|
)
|
|
$
|
168
|
|
|
7.2
|
|
(as a % of net revenue)
|
28.2
|
%
|
|
29.9
|
%
|
|
29.0
|
%
|
|
|
|
|
|
|
|
|
|||||||||
Employees
|
8,000
|
|
|
9,800
|
|
|
8,700
|
|
|
(1,800
|
)
|
|
(18.4
|
)%
|
|
1,100
|
|
|
12.6
|
%
|
|
Year Ended December 31,
|
|
2014 vs 2013
|
|
2013 vs 2012
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Salaries and benefits
|
$
|
476
|
|
|
$
|
473
|
|
|
$
|
492
|
|
|
$
|
3
|
|
|
0.6
|
%
|
|
$
|
(19
|
)
|
|
(3.9
|
)%
|
Legal and accounting fees
|
74
|
|
|
98
|
|
|
84
|
|
|
(24
|
)
|
|
(24.5
|
)
|
|
14
|
|
|
16.7
|
|
|||||
Other
|
166
|
|
|
135
|
|
|
120
|
|
|
31
|
|
|
23.0
|
|
|
15
|
|
|
12.5
|
|
|||||
Selling, general and administrative
|
$
|
716
|
|
|
$
|
706
|
|
|
$
|
696
|
|
|
$
|
10
|
|
|
1.4
|
|
|
$
|
10
|
|
|
1.4
|
|
(as a % of net revenue)
|
8.5
|
%
|
|
8.5
|
%
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|||||||||
Employees
|
1,950
|
|
|
2,000
|
|
|
1,900
|
|
|
(50
|
)
|
|
(2.5
|
)%
|
|
100
|
|
|
5.3
|
%
|
|
Year Ended December 31,
|
|
2014 vs 2013
|
|
2013 vs 2012
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Cost of revenue
|
$
|
22
|
|
|
$
|
25
|
|
|
$
|
27
|
|
|
$
|
(3
|
)
|
|
(12.0
|
)%
|
|
$
|
(2
|
)
|
|
(7.4
|
)%
|
Research and development
|
304
|
|
|
363
|
|
|
368
|
|
|
(59
|
)
|
|
(16.3
|
)
|
|
(5
|
)
|
|
(1.4
|
)
|
|||||
Selling, general and administrative
|
111
|
|
|
130
|
|
|
148
|
|
|
(19
|
)
|
|
(14.6
|
)
|
|
(18
|
)
|
|
(12.2
|
)
|
|||||
Total stock-based compensation
|
$
|
437
|
|
|
$
|
518
|
|
|
$
|
543
|
|
|
$
|
(81
|
)
|
|
(15.6
|
)
|
|
$
|
(25
|
)
|
|
(4.6
|
)
|
(as of % of net revenue)
|
5.2
|
%
|
|
6.3
|
%
|
|
6.7
|
%
|
|
|
|
|
|
|
|
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Total
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Unearned stock-based compensation
|
$
|
295
|
|
|
$
|
188
|
|
|
$
|
98
|
|
|
$
|
16
|
|
|
$
|
2
|
|
|
$
|
599
|
|
|
Year Ended December 31,
|
|
2014 vs 2013
|
|
2013 vs 2012
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Cost of revenue
|
$
|
185
|
|
|
$
|
171
|
|
|
$
|
198
|
|
|
$
|
14
|
|
|
8.2
|
%
|
|
$
|
(27
|
)
|
|
(13.6
|
)%
|
Other operating expenses
|
29
|
|
|
57
|
|
|
113
|
|
|
(28
|
)
|
|
(49.1
|
)
|
|
(56
|
)
|
|
(49.6
|
)
|
|||||
|
$
|
214
|
|
|
$
|
228
|
|
|
$
|
311
|
|
|
$
|
(14
|
)
|
|
(6.1
|
)
|
|
$
|
(83
|
)
|
|
(26.7
|
)
|
|
Purchased Intangible Asset Amortization by Year
|
||||||||||||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Cost of revenue
|
$
|
144
|
|
|
$
|
116
|
|
|
$
|
98
|
|
|
$
|
83
|
|
|
$
|
64
|
|
|
$
|
145
|
|
|
$
|
650
|
|
Other operating expenses
|
4
|
|
|
3
|
|
|
2
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
14
|
|
|||||||
|
$
|
148
|
|
|
$
|
119
|
|
|
$
|
100
|
|
|
$
|
86
|
|
|
$
|
66
|
|
|
$
|
145
|
|
|
$
|
664
|
|
|
Year Ended December 31,
|
|
2014 vs 2013
|
|
2013 vs 2012
|
||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
$ Change
|
||||||||||||
|
(In millions)
|
||||||||||||||||||
Interest expense, net
|
$
|
(36
|
)
|
|
$
|
(30
|
)
|
|
$
|
(30
|
)
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
Other income, net
|
9
|
|
|
3
|
|
|
10
|
|
|
6
|
|
|
(7
|
)
|
|||||
|
$
|
(27
|
)
|
|
$
|
(27
|
)
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions, except percentages)
|
||||||||||
Provision for (benefit of) income taxes
|
$
|
15
|
|
|
$
|
21
|
|
|
$
|
(63
|
)
|
Effective tax rates
|
2.2
|
%
|
|
4.7
|
%
|
|
(9.6
|
)%
|
|
December 31,
|
|
|
||||||||
|
2014
|
|
2013
|
|
$ Change
|
||||||
|
(In millions)
|
||||||||||
Working capital
|
$
|
3,522
|
|
|
$
|
2,419
|
|
|
$
|
1,103
|
|
Cash and cash equivalents
|
$
|
2,545
|
|
|
$
|
1,657
|
|
|
888
|
|
|
Short-term marketable securities
|
1,061
|
|
|
775
|
|
|
286
|
|
|||
Long-term marketable securities
|
2,383
|
|
|
1,939
|
|
|
444
|
|
|||
Total cash and cash equivalents and marketable securities
|
$
|
5,989
|
|
|
$
|
4,371
|
|
|
$
|
1,618
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Net cash provided by operating activities
|
$
|
1,925
|
|
|
$
|
1,785
|
|
|
$
|
1,931
|
|
Net cash used in investing activities
|
(914
|
)
|
|
(996
|
)
|
|
(4,796
|
)
|
|||
Net cash provided by (used in) financing activities
|
(123
|
)
|
|
(749
|
)
|
|
336
|
|
|||
Increase (decrease) in cash and cash equivalents
|
888
|
|
|
40
|
|
|
(2,529
|
)
|
|||
Cash and cash equivalents at beginning of period
|
1,657
|
|
|
1,617
|
|
|
4,146
|
|
|||
Cash and cash equivalents at end of period
|
$
|
2,545
|
|
|
$
|
1,657
|
|
|
$
|
1,617
|
|
Date
|
|
Maturity
|
|
Interest
|
|
Effective
|
|
Issuance
|
|
December 31,
|
|
|
|||||||||||
Issued
|
|
Date
|
|
Rate
|
|
Yield
|
|
Price
|
|
2014
|
|
2013
|
|
$ Change
|
|||||||||
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|||||||||||||
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
|
|
|
—
|
|
|||
July 2014
|
|
August 2024
|
|
3.500
|
|
|
3.546
|
|
|
99.615
|
|
|
350
|
|
|
—
|
|
|
350
|
|
|||
July 2014
|
|
August 2034
|
|
4.500
|
|
|
4.546
|
|
|
99.400
|
|
|
250
|
|
|
—
|
|
|
250
|
|
|||
|
|
|
|
|
|
|
|
|
|
$
|
1,600
|
|
|
$
|
1,400
|
|
|
$
|
200
|
|
|||
|
|
Unaccreted discount
|
|
(7
|
)
|
|
(6
|
)
|
|
(1
|
)
|
||||||||||||
|
|
Long-term debt
|
|
$
|
1,593
|
|
|
$
|
1,394
|
|
|
$
|
199
|
|
|
Payment Obligations by Year
|
||||||||||||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Operating leases
|
$
|
197
|
|
|
$
|
142
|
|
|
$
|
95
|
|
|
$
|
56
|
|
|
$
|
24
|
|
|
$
|
23
|
|
|
$
|
537
|
|
Inventory and related purchase obligations
|
725
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
725
|
|
|||||||
Other obligations
|
155
|
|
|
36
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195
|
|
|||||||
Long-term debt and related interest
|
50
|
|
|
49
|
|
|
49
|
|
|
550
|
|
|
36
|
|
|
1,368
|
|
|
2,102
|
|
|||||||
|
$
|
1,127
|
|
|
$
|
227
|
|
|
$
|
148
|
|
|
$
|
606
|
|
|
$
|
60
|
|
|
$
|
1,391
|
|
|
$
|
3,559
|
|
•
|
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 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,
|
||||||
|
2014
|
|
2013
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,545
|
|
|
$
|
1,657
|
|
Short-term marketable securities
|
1,061
|
|
|
775
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $10 million in 2014 and $8 million in 2013
|
804
|
|
|
795
|
|
||
Inventory
|
531
|
|
|
525
|
|
||
Prepaid expenses and other current assets
|
131
|
|
|
163
|
|
||
Total current assets
|
5,072
|
|
|
3,915
|
|
||
Property and equipment, net
|
516
|
|
|
593
|
|
||
Long-term marketable securities
|
2,383
|
|
|
1,939
|
|
||
Goodwill
|
3,710
|
|
|
3,793
|
|
||
Purchased intangible assets, net
|
664
|
|
|
1,144
|
|
||
Other assets
|
126
|
|
|
111
|
|
||
Total assets
|
$
|
12,471
|
|
|
$
|
11,495
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
503
|
|
|
$
|
585
|
|
Wages and related benefits
|
220
|
|
|
243
|
|
||
Deferred revenue and income
|
36
|
|
|
21
|
|
||
Accrued liabilities
|
791
|
|
|
647
|
|
||
Total current liabilities
|
1,550
|
|
|
1,496
|
|
||
Long-term debt
|
1,593
|
|
|
1,394
|
|
||
Other long-term liabilities
|
277
|
|
|
234
|
|
||
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 - 550 in 2014 and 531 in 2013 |
—
|
|
|
—
|
|
||
Class B common stock, $.0001 par value:
Authorized shares - 400 Issued and outstanding shares - 49 in 2014 and 50 in 2013 |
—
|
|
|
—
|
|
||
Additional paid-in capital
|
12,595
|
|
|
12,475
|
|
||
Accumulated deficit
|
(3,455
|
)
|
|
(4,107
|
)
|
||
Accumulated other comprehensive income (loss)
|
(89
|
)
|
|
3
|
|
||
Total shareholders’ equity
|
9,051
|
|
|
8,371
|
|
||
Total liabilities and shareholders’ equity
|
$
|
12,471
|
|
|
$
|
11,495
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Net revenue
|
$
|
8,428
|
|
|
$
|
8,305
|
|
|
$
|
8,006
|
|
Cost of revenue
|
4,098
|
|
|
4,088
|
|
|
4,027
|
|
|||
Gross profit
|
4,330
|
|
|
4,217
|
|
|
3,979
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
2,373
|
|
|
2,486
|
|
|
2,318
|
|
|||
Selling, general and administrative
|
716
|
|
|
706
|
|
|
696
|
|
|||
Amortization of purchased intangible assets
|
29
|
|
|
57
|
|
|
113
|
|
|||
Impairments of long-lived assets
|
404
|
|
|
511
|
|
|
90
|
|
|||
Restructuring costs, net
|
158
|
|
|
29
|
|
|
7
|
|
|||
Settlement costs (gains)
|
16
|
|
|
(69
|
)
|
|
79
|
|
|||
Other charges (gains), net
|
(60
|
)
|
|
25
|
|
|
—
|
|
|||
Total operating expenses
|
3,636
|
|
|
3,745
|
|
|
3,303
|
|
|||
Income from operations
|
694
|
|
|
472
|
|
|
676
|
|
|||
Interest expense, net
|
(36
|
)
|
|
(30
|
)
|
|
(30
|
)
|
|||
Other income, net
|
9
|
|
|
3
|
|
|
10
|
|
|||
Income before income taxes
|
667
|
|
|
445
|
|
|
656
|
|
|||
Provision for (benefit of) income taxes
|
15
|
|
|
21
|
|
|
(63
|
)
|
|||
Net income
|
$
|
652
|
|
|
$
|
424
|
|
|
$
|
719
|
|
Net income per share (basic)
|
$
|
1.11
|
|
|
$
|
0.74
|
|
|
$
|
1.29
|
|
Net income per share (diluted)
|
$
|
1.08
|
|
|
$
|
0.73
|
|
|
$
|
1.25
|
|
Weighted average shares (basic)
|
590
|
|
|
574
|
|
|
558
|
|
|||
Weighted average shares (diluted)
|
601
|
|
|
584
|
|
|
576
|
|
|||
Dividends per share
|
$
|
0.48
|
|
|
$
|
0.44
|
|
|
$
|
0.40
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Cost of revenue
|
$
|
22
|
|
|
$
|
25
|
|
|
$
|
27
|
|
Research and development
|
304
|
|
|
363
|
|
|
368
|
|
|||
Selling, general and administrative
|
111
|
|
|
130
|
|
|
148
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net income
|
$
|
652
|
|
|
$
|
424
|
|
|
$
|
719
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net of $0 tax in 2014, 2013 and 2012
|
(87
|
)
|
|
35
|
|
|
14
|
|
|||
Unrealized gains (losses) on marketable securities, net of $0 tax in 2014, 2013 and 2012
|
(5
|
)
|
|
1
|
|
|
3
|
|
|||
Other comprehensive income (loss)
|
(92
|
)
|
|
36
|
|
|
17
|
|
|||
Comprehensive income
|
$
|
560
|
|
|
$
|
460
|
|
|
$
|
736
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
Other
|
|
|
|||||||||||
|
|
|
|
|
Additional
|
|
|
|
Comprehensive
|
|
Total
|
|||||||||||
|
Common Stock
|
|
Paid-In
|
|
Accumulated
|
|
Income
|
|
Shareholders’
|
|||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
(Loss)
|
|
Equity
|
|||||||||||
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
|
|
|||||
Shares issued pursuant to stock awards, net
|
27
|
|
|
—
|
|
|
346
|
|
|
—
|
|
|
—
|
|
|
346
|
|
|||||
Employee stock purchase plan
|
6
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|||||
Repurchases of Class A common stock
|
(15
|
)
|
|
—
|
|
|
(522
|
)
|
|
—
|
|
|
—
|
|
|
(522
|
)
|
|||||
Dividends paid
|
—
|
|
|
—
|
|
|
(283
|
)
|
|
—
|
|
|
—
|
|
|
(283
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
439
|
|
|
—
|
|
|
—
|
|
|
439
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92
|
)
|
|
(92
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
652
|
|
|
—
|
|
|
652
|
|
|||||
Balance at December 31, 2014
|
599
|
|
|
$
|
—
|
|
|
$
|
12,595
|
|
|
$
|
(3,455
|
)
|
|
$
|
(89
|
)
|
|
$
|
9,051
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
652
|
|
|
$
|
424
|
|
|
$
|
719
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
178
|
|
|
173
|
|
|
134
|
|
|||
Stock-based compensation expense
|
437
|
|
|
518
|
|
|
543
|
|
|||
Acquisition-related items:
|
|
|
|
|
|
||||||
Amortization of purchased intangible assets
|
214
|
|
|
228
|
|
|
311
|
|
|||
Impairments of long-lived assets
|
404
|
|
|
511
|
|
|
90
|
|
|||
Gain on sale of assets and other
|
(41
|
)
|
|
(2
|
)
|
|
(18
|
)
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(9
|
)
|
|
(55
|
)
|
|
(16
|
)
|
|||
Inventory
|
(7
|
)
|
|
2
|
|
|
(5
|
)
|
|||
Prepaid expenses and other assets
|
14
|
|
|
(25
|
)
|
|
(8
|
)
|
|||
Accounts payable
|
(79
|
)
|
|
24
|
|
|
72
|
|
|||
Deferred revenue
|
87
|
|
|
(15
|
)
|
|
45
|
|
|||
Other accrued and long-term liabilities
|
75
|
|
|
2
|
|
|
64
|
|
|||
Net cash provided by operating activities
|
1,925
|
|
|
1,785
|
|
|
1,931
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Net purchases of property and equipment
|
(262
|
)
|
|
(228
|
)
|
|
(244
|
)
|
|||
Net cash paid for acquired companies
|
(14
|
)
|
|
(142
|
)
|
|
(3,582
|
)
|
|||
Proceeds from sale (purchases) of certain assets and other
|
92
|
|
|
(15
|
)
|
|
27
|
|
|||
Purchases of marketable securities
|
(3,871
|
)
|
|
(2,682
|
)
|
|
(2,551
|
)
|
|||
Proceeds from sales and maturities of marketable securities
|
3,141
|
|
|
2,071
|
|
|
1,554
|
|
|||
Net cash used in investing activities
|
(914
|
)
|
|
(996
|
)
|
|
(4,796
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Issuance of long-term debt, net
|
592
|
|
|
—
|
|
|
492
|
|
|||
Payments of long-term debt
|
(400
|
)
|
|
(300
|
)
|
|
—
|
|
|||
Repurchases of Class A common stock
|
(522
|
)
|
|
(597
|
)
|
|
(33
|
)
|
|||
Dividends paid
|
(283
|
)
|
|
(254
|
)
|
|
(224
|
)
|
|||
Payment of assumed contingent consideration and debt
|
—
|
|
|
—
|
|
|
(57
|
)
|
|||
Proceeds from issuance of common stock
|
617
|
|
|
532
|
|
|
311
|
|
|||
Minimum tax withholding paid on behalf of employees for restricted stock units
|
(127
|
)
|
|
(130
|
)
|
|
(153
|
)
|
|||
Net cash provided by (used in) financing activities
|
(123
|
)
|
|
(749
|
)
|
|
336
|
|
|||
Increase (decrease) in cash and cash equivalents
|
888
|
|
|
40
|
|
|
(2,529
|
)
|
|||
Cash and cash equivalents at beginning of period
|
1,657
|
|
|
1,617
|
|
|
4,146
|
|
|||
Cash and cash equivalents at end of period
|
$
|
2,545
|
|
|
$
|
1,657
|
|
|
$
|
1,617
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
27
|
|
|
$
|
18
|
|
|
$
|
25
|
|
Interest paid
|
$
|
43
|
|
|
$
|
40
|
|
|
$
|
27
|
|
1.
|
Summary of Significant Accounting Policies
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Sales through direct sales force
|
71.0
|
%
|
|
76.3
|
%
|
|
77.8
|
%
|
Sales under fulfillment distributor arrangements
|
8.5
|
|
|
6.5
|
|
|
6.1
|
|
Sales through distributors
|
20.5
|
|
|
17.2
|
|
|
16.1
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Work in process
|
$
|
180
|
|
|
$
|
202
|
|
Finished goods
|
351
|
|
|
323
|
|
||
|
$
|
531
|
|
|
$
|
525
|
|
|
|
|
December 31,
|
||||||
|
Useful Life
|
|
2014
|
|
2013
|
||||
|
(In years)
|
|
(In millions)
|
||||||
Leasehold improvements
|
1 to 10
|
|
$
|
237
|
|
|
$
|
248
|
|
Office furniture and equipment
|
3 to 7
|
|
43
|
|
|
45
|
|
||
Machinery and equipment
|
5
|
|
553
|
|
|
725
|
|
||
Computer software and equipment
|
2 to 10
|
|
234
|
|
|
232
|
|
||
Construction in progress
|
N/A
|
|
147
|
|
|
54
|
|
||
|
|
|
1,214
|
|
|
1,304
|
|
||
Less accumulated depreciation and amortization
|
|
|
(698
|
)
|
|
(711
|
)
|
||
|
|
|
$
|
516
|
|
|
$
|
593
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Accrued rebates
|
$
|
574
|
|
|
$
|
409
|
|
Accrued royalties
|
19
|
|
|
15
|
|
||
Accrued settlement charges
|
17
|
|
|
66
|
|
||
Accrued legal costs
|
10
|
|
|
15
|
|
||
Accrued taxes
|
28
|
|
|
20
|
|
||
Warranty reserve
|
6
|
|
|
19
|
|
||
Restructuring liabilities
|
28
|
|
|
17
|
|
||
Other
|
109
|
|
|
86
|
|
||
|
$
|
791
|
|
|
$
|
647
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Deferred revenue
|
$
|
105
|
|
|
$
|
33
|
|
Accrued taxes
|
77
|
|
|
72
|
|
||
Deferred rent
|
38
|
|
|
46
|
|
||
Deferred tax liabilities
|
17
|
|
|
35
|
|
||
Accrued settlement charges
|
17
|
|
|
25
|
|
||
Other long-term liabilities
|
23
|
|
|
23
|
|
||
|
$
|
277
|
|
|
$
|
234
|
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Beginning balance
|
$
|
409
|
|
|
$
|
383
|
|
Charged as a reduction of revenue
|
881
|
|
|
888
|
|
||
Reversal of unclaimed rebates
|
(33
|
)
|
|
(21
|
)
|
||
Payments
|
(683
|
)
|
|
(841
|
)
|
||
Ending balance
|
$
|
574
|
|
|
$
|
409
|
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Beginning balance
|
$
|
19
|
|
|
$
|
13
|
|
Charged to costs and expenses
|
4
|
|
|
12
|
|
||
Payments
|
(17
|
)
|
|
(6
|
)
|
||
Ending balance
|
$
|
6
|
|
|
$
|
19
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions, except per share data)
|
||||||||||
Numerator: Net income
|
$
|
652
|
|
|
$
|
424
|
|
|
$
|
719
|
|
Denominator for net income per share (basic)
|
590
|
|
|
574
|
|
|
558
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock awards
|
11
|
|
|
10
|
|
|
18
|
|
|||
Denominator for net income per share (diluted)
|
601
|
|
|
584
|
|
|
576
|
|
|||
Net income per share (basic)
|
$
|
1.11
|
|
|
$
|
0.74
|
|
|
$
|
1.29
|
|
Net income per share (diluted)
|
$
|
1.08
|
|
|
$
|
0.73
|
|
|
$
|
1.25
|
|
3.
|
Fair Value Measurements
|
|
December 31, 2014
|
||||||||||||||||||||||||||
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Short-Term Marketable Securities
|
|
Long-Term Marketable Securities
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Cash
|
$
|
659
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
659
|
|
|
$
|
659
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bank and time deposits
|
943
|
|
|
—
|
|
|
—
|
|
|
943
|
|
|
943
|
|
|
—
|
|
|
—
|
|
|||||||
Money market funds
|
83
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|||||||
U.S. treasury and agency obligations
|
1,434
|
|
|
—
|
|
|
(1
|
)
|
|
1,433
|
|
|
12
|
|
|
192
|
|
|
1,229
|
|
|||||||
Subtotal
|
2,460
|
|
|
—
|
|
|
(1
|
)
|
|
2,459
|
|
|
1,038
|
|
|
192
|
|
|
1,229
|
|
|||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial paper
|
800
|
|
|
—
|
|
|
—
|
|
|
800
|
|
|
798
|
|
|
2
|
|
|
—
|
|
|||||||
Corporate bonds
|
1,931
|
|
|
1
|
|
|
(2
|
)
|
|
1,930
|
|
|
50
|
|
|
859
|
|
|
1,021
|
|
|||||||
Asset-backed securities and other
|
141
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|
—
|
|
|
8
|
|
|
133
|
|
|||||||
Subtotal
|
2,872
|
|
|
1
|
|
|
(2
|
)
|
|
2,871
|
|
|
848
|
|
|
869
|
|
|
1,154
|
|
|||||||
Level 3: None
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
5,991
|
|
|
$
|
1
|
|
|
$
|
(3
|
)
|
|
$
|
5,989
|
|
|
$
|
2,545
|
|
|
$
|
1,061
|
|
|
$
|
2,383
|
|
|
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
|
|
|||||||
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
|
|
4.
|
Income Taxes
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Statutory federal provision for income taxes
|
$
|
234
|
|
|
$
|
156
|
|
|
$
|
230
|
|
Increase (decrease) in taxes resulting from:
|
|
|
|
|
|
||||||
Tax credits
|
(107
|
)
|
|
(240
|
)
|
|
—
|
|
|||
Federal valuation allowance changes
|
96
|
|
|
207
|
|
|
(552
|
)
|
|||
Tax rate differential on foreign earnings
|
(215
|
)
|
|
(190
|
)
|
|
(281
|
)
|
|||
Stock-based compensation expense
|
(46
|
)
|
|
20
|
|
|
—
|
|
|||
Goodwill adjustment
|
13
|
|
|
—
|
|
|
—
|
|
|||
Foreign dividend distribution
|
—
|
|
|
—
|
|
|
538
|
|
|||
Audit settlements and adjustments
|
20
|
|
|
23
|
|
|
—
|
|
|||
Other
|
20
|
|
|
45
|
|
|
2
|
|
|||
Provision for (benefit of) income taxes
|
$
|
15
|
|
|
$
|
21
|
|
|
$
|
(63
|
)
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Research and development and foreign tax credits
|
$
|
1,190
|
|
|
$
|
1,062
|
|
Capitalized research and development costs
|
49
|
|
|
77
|
|
||
Net operating loss carryforwards
|
100
|
|
|
78
|
|
||
Reserves and accruals not currently deductible for tax purposes
|
80
|
|
|
98
|
|
||
Stock-based compensation
|
40
|
|
|
63
|
|
||
Other
|
97
|
|
|
55
|
|
||
Gross deferred tax assets
|
1,556
|
|
|
1,433
|
|
||
Valuation allowance against U.S. deferred tax assets
|
(1,413
|
)
|
|
(1,286
|
)
|
||
Valuation allowance against deferred tax assets of certain foreign subsidiaries
|
(92
|
)
|
|
(81
|
)
|
||
Valuation allowance
|
(1,505
|
)
|
|
(1,367
|
)
|
||
Deferred tax assets, net
|
51
|
|
|
66
|
|
||
Deferred tax liabilities (primarily related to purchased intangible assets)
|
$
|
(49
|
)
|
|
$
|
(90
|
)
|
Net deferred tax assets (liabilities)
|
$
|
2
|
|
|
$
|
(24
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Beginning balance
|
$
|
403
|
|
|
$
|
331
|
|
|
$
|
212
|
|
Increase in current year
|
54
|
|
|
58
|
|
|
11
|
|
|||
Expiration of the statutes of limitation for the assessment of taxes
|
(7
|
)
|
|
(6
|
)
|
|
(7
|
)
|
|||
Decrease resulting from audits
|
(83
|
)
|
|
(20
|
)
|
|
—
|
|
|||
Increase (decrease) related to prior year tax positions
|
(3
|
)
|
|
40
|
|
|
—
|
|
|||
Increase related to acquisitions
|
—
|
|
|
—
|
|
|
115
|
|
|||
Ending balance
|
$
|
364
|
|
|
$
|
403
|
|
|
$
|
331
|
|
5.
|
Debt and Credit Facility
|
Date
|
|
Maturity
|
|
Interest
|
|
Effective
|
|
Issuance
|
|
December 31,
|
|||||||||
Issued
|
|
Date
|
|
Rate
|
|
Yield
|
|
Price
|
|
2014
|
|
2013
|
|||||||
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|||||||||
November 2010
|
|
November 2015
|
|
2.375
|
%
|
|
2.494
|
%
|
|
99.444
|
%
|
|
$
|
—
|
|
|
$
|
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
|
|
||
July 2014
|
|
August 2024
|
|
3.500
|
|
|
3.546
|
|
|
99.615
|
|
|
350
|
|
|
—
|
|
||
July 2014
|
|
August 2034
|
|
4.500
|
|
|
4.546
|
|
|
99.400
|
|
|
250
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
$
|
1,600
|
|
|
$
|
1,400
|
|
|||
|
|
Unaccreted discount
|
|
(7
|
)
|
|
(6
|
)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
$
|
1,593
|
|
|
$
|
1,394
|
|
6.
|
Shareholders’ Equity
|
7.
|
Employee Benefit Plans
|
|
Employee Stock Purchase Rights
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Expected life (in years)
|
0.88
|
|
|
1.60
|
|
|
1.43
|
|
|||
Implied volatility
|
0.26
|
|
|
0.35
|
|
|
0.39
|
|
|||
Risk-free interest rate
|
0.13
|
%
|
|
0.25
|
%
|
|
0.23
|
%
|
|||
Expected dividend yield
|
1.51
|
%
|
|
1.58
|
%
|
|
1.19
|
%
|
|||
Weighted average fair value
|
$
|
7.28
|
|
|
$
|
7.80
|
|
|
$
|
9.61
|
|
|
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, 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
|
|
|
$
|
480
|
|
|
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
|
|
|
|
|||
Restricted stock units granted
|
14
|
|
|
30.35
|
|
|
|
|||
Restricted stock units cancelled
|
(6
|
)
|
|
32.49
|
|
|
|
|||
Restricted stock units vested
|
(12
|
)
|
|
34.97
|
|
|
$
|
521
|
|
|
Balance at December 31, 2014
|
20
|
|
|
$
|
32.38
|
|
|
$
|
888
|
|
|
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, 2011
|
66
|
|
|
$
|
27.47
|
|
|
|
|
|
||
Options assumed
|
4
|
|
|
9.71
|
|
|
|
|
|
|||
Options cancelled
|
(1
|
)
|
|
34.55
|
|
|
|
|
|
|||
Options exercised
|
(11
|
)
|
|
17.09
|
|
|
$
|
198
|
|
|
|
|
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
|
|
|
|
|
|
|||
Options cancelled
|
(1
|
)
|
|
38.21
|
|
|
|
|
|
|||
Options exercised
|
(18
|
)
|
|
26.08
|
|
|
$
|
209
|
|
|
|
|
Balance at December 31, 2014
|
20
|
|
|
$
|
33.84
|
|
|
$
|
187
|
|
|
2.1
|
Exercisable and vested at December 31, 2014
|
20
|
|
|
$
|
33.84
|
|
|
$
|
187
|
|
|
2.1
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Cost of revenue
|
$
|
22
|
|
|
$
|
25
|
|
|
$
|
27
|
|
Research and development
|
304
|
|
|
363
|
|
|
368
|
|
|||
Selling, general and administrative
|
111
|
|
|
130
|
|
|
148
|
|
|||
|
$
|
437
|
|
|
$
|
518
|
|
|
$
|
543
|
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Total
|
||||||||||||
|
|
|
|
|
(In millions)
|
|
|
|
|
||||||||||||||
Unearned stock-based compensation
|
$
|
295
|
|
|
$
|
188
|
|
|
$
|
98
|
|
|
$
|
16
|
|
|
$
|
2
|
|
|
$
|
599
|
|
|
Number of Shares
|
|
(In millions)
|
Stock options outstanding
|
20
|
Authorized for future grants under stock incentive plans
|
131
|
Authorized for future issuance under stock purchase plan
|
19
|
Restricted stock units outstanding
|
20
|
Balance at December 31, 2014
|
190
|
8.
|
Commitments and Contingencies
|
|
Payment Obligations by Year
|
||||||||||||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Operating leases
|
$
|
197
|
|
|
$
|
142
|
|
|
$
|
95
|
|
|
$
|
56
|
|
|
$
|
24
|
|
|
$
|
23
|
|
|
$
|
537
|
|
Inventory and related purchase obligations
|
725
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
725
|
|
|||||||
Other obligations
|
155
|
|
|
36
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195
|
|
|||||||
Long-term debt and related interest
|
50
|
|
|
49
|
|
|
49
|
|
|
550
|
|
|
36
|
|
|
1,368
|
|
|
2,102
|
|
|||||||
|
$
|
1,127
|
|
|
$
|
227
|
|
|
$
|
148
|
|
|
$
|
606
|
|
|
$
|
60
|
|
|
$
|
1,391
|
|
|
$
|
3,559
|
|
9.
|
Goodwill and Other Purchased Intangible Assets
|
|
Reportable Segments
|
|
|
|
|
||||||||||
|
Broadband
Communications
|
|
Infrastructure and Networking
|
|
Foreign
Currency
|
|
Consolidated
|
||||||||
|
(In millions)
|
||||||||||||||
Goodwill
|
$
|
1,783
|
|
|
$
|
3,778
|
|
|
$
|
(6
|
)
|
|
$
|
5,555
|
|
Accumulated impairment losses
|
(543
|
)
|
|
(1,286
|
)
|
|
—
|
|
|
(1,829
|
)
|
||||
Goodwill at December 31, 2012
|
1,240
|
|
|
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
|
1,280
|
|
|
2,492
|
|
|
21
|
|
|
3,793
|
|
||||
Goodwill recorded in connection with acquisitions
|
5
|
|
|
1
|
|
|
—
|
|
|
6
|
|
||||
Transfer due to reorganization (Note 11)
|
$
|
(26
|
)
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Adjustment due to sale of certain assets (Note 2)
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
(37
|
)
|
||||
Effects of foreign currency translation
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
(52
|
)
|
||||
Goodwill at December 31, 2014
|
$
|
1,259
|
|
|
$
|
2,482
|
|
|
$
|
(31
|
)
|
|
$
|
3,710
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
|
|
|
|
|
(In millions)
|
|
|
|
|
||||||||||||||
Developed technology
|
$
|
1,250
|
|
|
$
|
(619
|
)
|
|
$
|
631
|
|
|
$
|
1,492
|
|
|
$
|
(539
|
)
|
|
$
|
953
|
|
In-process research and development
|
19
|
|
|
—
|
|
|
19
|
|
|
130
|
|
|
—
|
|
|
130
|
|
||||||
Customer relationships
|
177
|
|
|
(164
|
)
|
|
13
|
|
|
232
|
|
|
(176
|
)
|
|
56
|
|
||||||
Other
|
32
|
|
|
(31
|
)
|
|
1
|
|
|
34
|
|
|
(29
|
)
|
|
5
|
|
||||||
|
$
|
1,478
|
|
|
$
|
(814
|
)
|
|
$
|
664
|
|
|
$
|
1,888
|
|
|
$
|
(744
|
)
|
|
$
|
1,144
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Cost of revenue
|
$
|
185
|
|
|
$
|
171
|
|
|
$
|
198
|
|
Other operating expenses
|
29
|
|
|
57
|
|
|
113
|
|
|||
|
$
|
214
|
|
|
$
|
228
|
|
|
$
|
311
|
|
|
Purchased Intangible Asset Amortization by Year
|
||||||||||||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Cost of revenue
|
$
|
144
|
|
|
$
|
116
|
|
|
$
|
98
|
|
|
$
|
83
|
|
|
$
|
64
|
|
|
$
|
145
|
|
|
$
|
650
|
|
Other operating expenses
|
4
|
|
|
3
|
|
|
2
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
14
|
|
|||||||
|
$
|
148
|
|
|
$
|
119
|
|
|
$
|
100
|
|
|
$
|
86
|
|
|
$
|
66
|
|
|
$
|
145
|
|
|
$
|
664
|
|
|
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
|
|
10.
|
Exit of Cellular Baseband Business and Other Restructuring Costs
|
|
2014
|
|
2013
|
|
|
||||||
|
Plan
|
|
Plan
|
|
Total
|
||||||
|
(In millions)
|
|
|
||||||||
Balance at December 31, 2012
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charged to expense
|
—
|
|
|
41
|
|
|
41
|
|
|||
Cash payments
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
|||
Balance at December 31, 2013
|
—
|
|
|
17
|
|
|
17
|
|
|||
Charged to expense
|
152
|
|
|
6
|
|
|
158
|
|
|||
Cash payments
|
(121
|
)
|
|
(21
|
)
|
|
(142
|
)
|
|||
Balance at December 31, 2014
|
$
|
31
|
|
|
$
|
2
|
|
|
$
|
33
|
|
11.
|
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;
|
•
|
all of our integrated circuits are manufactured, assembled and tested using the same or similar group of independent, third-party subcontractors; and
|
•
|
all of our integrated circuits are sold through a centralized sales force and common wholesale distributors.
|
|
Reportable Segments
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Broadband and
Connectivity
|
|
Infrastructure and Networking
|
|
Total Reportable Segments
|
|
Cellular Baseband
|
|
All
Other
|
|
Consolidated
|
|||||||||||
|
(In millions)
|
|||||||||||||||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net revenue
|
$
|
5,535
|
|
|
$
|
2,525
|
|
|
8,060
|
|
|
$
|
368
|
|
|
$
|
—
|
|
|
$
|
8,428
|
|
Operating income (loss)
|
1,086
|
|
|
685
|
|
|
1,771
|
|
|
(339
|
)
|
|
(738
|
)
|
|
694
|
|
|||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net revenue
|
$
|
5,430
|
|
|
$
|
2,155
|
|
|
7,585
|
|
|
$
|
634
|
|
|
$
|
86
|
|
|
$
|
8,305
|
|
Operating income (loss)
|
1,003
|
|
|
412
|
|
|
1,415
|
|
|
(369
|
)
|
|
(574
|
)
|
|
472
|
|
|||||
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net revenue
|
$
|
5,232
|
|
|
$
|
1,911
|
|
|
7,143
|
|
|
$
|
677
|
|
|
$
|
186
|
|
|
$
|
8,006
|
|
Operating income (loss)
|
990
|
|
|
189
|
|
|
1,179
|
|
|
(169
|
)
|
|
(334
|
)
|
|
676
|
|
Included in “All Other” category:
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Net revenue
|
$
|
—
|
|
|
$
|
86
|
|
|
$
|
186
|
|
Amortization of purchased intangible assets
|
214
|
|
|
228
|
|
|
311
|
|
|||
Amortization of acquired inventory step-up and inventory charges related to the exit of the cellular baseband business
|
27
|
|
|
1
|
|
|
72
|
|
|||
Impairments of long-lived assets
|
404
|
|
|
511
|
|
|
90
|
|
|||
Settlement costs (gains)
|
16
|
|
|
(69
|
)
|
|
79
|
|
|||
Restructuring costs, net
|
158
|
|
|
29
|
|
|
7
|
|
|||
Other charges (gains), net
|
(60
|
)
|
|
25
|
|
|
—
|
|
|||
Miscellaneous corporate allocation variances
|
(21
|
)
|
|
(65
|
)
|
|
(39
|
)
|
|||
Total other operating costs and expenses
|
$
|
738
|
|
|
$
|
660
|
|
|
$
|
520
|
|
Total operating loss for the “All Other” category
|
$
|
(738
|
)
|
|
$
|
(574
|
)
|
|
$
|
(334
|
)
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Samsung
|
14.2
|
%
|
|
21.3
|
%
|
|
17.3
|
%
|
Apple
|
14.0
|
|
|
13.3
|
|
|
14.6
|
|
Five largest customers as a group
|
44.1
|
|
|
48.3
|
|
|
46.9
|
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Hong Kong
|
31.2
|
%
|
|
27.5
|
%
|
|
26.9
|
%
|
China (exclusive of Hong Kong)
|
24.1
|
|
|
23.7
|
|
|
29.0
|
|
Singapore, Taiwan, Thailand and Japan
|
29.0
|
|
|
34.5
|
|
|
31.1
|
|
United States
|
4.3
|
|
|
3.6
|
|
|
3.6
|
|
Europe
|
2.3
|
|
|
1.4
|
|
|
1.0
|
|
Other
|
9.1
|
|
|
9.3
|
|
|
8.4
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Net
Revenue |
|
Gross
Profit |
|
Net
Income (Loss) |
|
|
Diluted Net
Income (Loss) Per Share |
||||||||
|
(In millions, except per share data)
|
|||||||||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Fourth Quarter
|
$
|
2,143
|
|
|
$
|
1,131
|
|
|
$
|
390
|
|
(1)
|
|
$
|
0.64
|
|
Third Quarter
|
2,260
|
|
|
1,183
|
|
|
98
|
|
(2)
|
|
0.16
|
|
||||
Second Quarter
|
2,041
|
|
|
1,036
|
|
|
(1
|
)
|
(3)
|
|
—
|
|
||||
First Quarter
|
1,984
|
|
|
980
|
|
|
165
|
|
(4)
|
|
0.28
|
|
||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
Fourth Quarter
|
$
|
2,064
|
|
|
$
|
1,038
|
|
|
$
|
168
|
|
(5)
|
|
$
|
0.29
|
|
Third Quarter
|
2,146
|
|
|
1,102
|
|
|
316
|
|
(6)
|
|
0.55
|
|
||||
Second Quarter
|
2,090
|
|
|
1,060
|
|
|
(251
|
)
|
(7)
|
|
(0.43
|
)
|
||||
First Quarter
|
2,005
|
|
|
1,017
|
|
|
191
|
|
(8)
|
|
0.33
|
|
(1)
|
Includes restructuring costs of
$16 million
and impairment of long-lived assets of
$14 million
.
|
(2)
|
Includes impairment of long-lived assets charges of
$200 million
and restructuring costs of
$114 million
.
|
(3)
|
Includes impairment of long-lived assets charges of
$165 million
and restructuring costs of
$23 million
.
|
(4)
|
Includes impairment of long-lived assets of
$25 million
.
|
(5)
|
Includes restructuring costs of
$17
million.
|
(6)
|
Includes settlement gains of
$75
million, a charitable contribution of
$25
million and restructuring costs of
$12
million.
|
(7)
|
Includes impairment of long-lived assets of
$501
million.
|
(8)
|
Includes impairment of long-lived assets of
$10 million
.
|
|
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 29, 2015
|
Scott A. McGregor
|
|
Director (Principal Executive Officer)
|
|
|
|
|
|
/s/ H
ENRY
S
AMUELI
|
|
Chairman of the Board and Chief Technical Officer
|
January 29, 2015
|
Henry Samueli, Ph.D.
|
|
|
|
|
|
|
|
/s/ E
RIC
K. B
RANDT
|
|
Executive Vice President and Chief Financial Officer
|
January 29, 2015
|
Eric K. Brandt
|
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ CINDY A. FIORILLO
|
|
Senior Vice President, Finance and Corporate Controller
|
January 29, 2015
|
Cindy A. Fiorillo
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
/s/ R
OBERT
J. F
INOCCHIO
, J
R
.
|
|
Director
|
January 29, 2015
|
Robert J. Finocchio, Jr.
|
|
|
|
|
|
|
|
/s/ N
ANCY
H. H
ANDEL
|
|
Director
|
January 29, 2015
|
Nancy H. Handel
|
|
|
|
|
|
|
|
/s/ E
DDY
W. H
ARTENSTEIN
|
|
Director
|
January 29, 2015
|
Eddy W. Hartenstein
|
|
|
|
|
|
|
|
/s/ M
ARIA
M. K
LAWE
|
|
Director
|
January 29, 2015
|
Maria M. Klawe, Ph.D.
|
|
|
|
|
|
|
|
/s/ J
OHN
E. M
AJOR
|
|
Director
|
January 29, 2015
|
John E. Major
|
|
|
|
|
|
|
|
/s/ W
ILLIAM
T. M
ORROW
|
|
Director
|
January 29, 2015
|
William T. Morrow
|
|
|
|
|
|
|
|
/s/ R
OBERT
E. S
WITZ
|
|
Lead Independent Director
|
January 29, 2015
|
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, 2014:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Sales returns
|
7
|
|
|
25
|
|
|
—
|
|
|
(24
|
)
|
|
8
|
|
|||||
Restructuring liabilities
|
17
|
|
|
158
|
|
|
—
|
|
|
(142
|
)
|
|
33
|
|
|||||
Total
|
$
|
32
|
|
|
$
|
185
|
|
|
$
|
—
|
|
|
$
|
(166
|
)
|
|
$
|
51
|
|
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
|
|
|
|
|
|
Where Located
|
||||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
No.
|
|
Filing Date
|
|
Filed
Herewith
|
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 December 4, 2014
|
|
8-K
|
|
000-
23993
|
|
3.1
|
|
12/19/2014
|
|
|
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
|
|
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
|
|
|
4.3
|
|
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
|
|
|
4.4
|
|
Fourth Supplemental Indenture, dated July 29, 2014, between Broadcom and Wilmington Trust, National Association, including the forms of Broadcom’s 3.500% Senior Notes due 2024 and 4.500% Senior Notes due 2034
|
|
8-K
|
|
000-
23993
|
|
4.1
|
|
7/29/2014
|
|
|
10.1*
|
|
Performance Bonus Plan (as amended and restated October 19, 2014)
|
|
10-Q
|
|
000-
23993
|
|
10.4
|
|
10/21/2014
|
|
|
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 each of the following executive officers: Arthur Chong, Neil Kim, and Daniel A. Marotta
|
|
10-Q
|
|
000-
23993
|
|
10.5
|
|
10/26/2010
|
|
|
10.5*
|
|
Letter Agreement for Change in Control Severance Benefit Program dated November 18, 2013 between the registrant and Cindy A. Fiorillo
|
|
10-Q
|
|
000-
23993
|
|
10.2
|
|
10/21/2014
|
|
|
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
|
|
|
|
|
|
|
Where Located
|
||||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
No.
|
|
Filing Date
|
|
Filed
Herewith
|
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*
|
|
Agreement for Change in Control Severance Benefit Program dated August 20, 2014 between the registrant and Nancy R. Phillips
|
|
10-Q
|
|
000-
23993
|
|
10.3
|
|
10/21/2014
|
|
|
10.9*
|
|
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
|
|
|
10.10*
|
|
1998 Stock Incentive Plan, as amended and restated November 11, 2010
|
|
10-K
|
|
000-
23993
|
|
10.14
|
|
2/2/2011
|
|
|
10.11*
|
|
1998 Stock Incentive Plan form of Notice of Grant of Stock Option for executive officers
|
|
10-K
|
|
000-
23993
|
|
10.17
|
|
2/4/2009
|
|
|
10.12*
|
|
1998 Stock Incentive Plan form of Stock Option Agreement for executive officers
|
|
10-K
|
|
000-
23993
|
|
10.21
|
|
2/4/2009
|
|
|
10.13*
|
|
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
|
|
|
10.14*
|
|
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for Scott A. McGregor
|
|
10-K
|
|
000-
23993
|
|
10.18
|
|
2/2/2011
|
|
|
10.15*
|
|
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
|
|
|
10.16*
|
|
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
|
|
|
10.17*
|
|
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
|
|
|
10.18*
|
|
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
|
|
|
10.19*
|
|
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
|
|
|
10.20*
|
|
2012 Stock Incentive Plan (as amended and restated January 28, 2015)
|
|
|
|
|
|
|
|
|
|
X
|
10.21*
|
|
2012 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for Scott A. McGregor
|
|
10-K
|
|
000- 23993
|
|
10.20
|
|
1/30/2014
|
|
|
|
|
|
|
Where Located
|
||||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
No.
|
|
Filing Date
|
|
Filed
Herewith
|
10.22*
|
|
2012 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for executive officers other than Scott A. McGregor
|
|
10-K
|
|
000- 23993
|
|
10.21
|
|
1/30/2014
|
|
|
10.23*
|
|
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))
|
|
10-K
|
|
000- 23993
|
|
10.22
|
|
1/30/2014
|
|
|
10.24*
|
|
2012 Stock Incentive Plan form of Notice of Grant of Stock Option and form of Stock Option Agreement for executive officers
|
|
10-K
|
|
000- 23993
|
|
10.23
|
|
1/30/2014
|
|
|
10.25*
|
|
2012 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for Non-Employee Directors (Annual Award)
|
|
10-K
|
|
000- 23993
|
|
10.24
|
|
1/30/2014
|
|
|
10.26*
|
|
2012 Stock Incentive Plan form of Restricted Stock Unit Issuance Agreement for Non-Employee Directors (Pro-rated Awards)
|
|
10-K
|
|
000- 23993
|
|
10.25
|
|
1/30/2014
|
|
|
10.27*
|
|
Restricted Stock Units Incentive Award Program (amended and restated February 20, 2014)
|
|
10-Q
|
|
000-
23993
|
|
10.2
|
|
4/24/2014
|
|
|
10.28*
|
|
Restricted Stock Unit Incentive Award Program — Form of Award Letter
|
|
10-Q
|
|
000-
23993
|
|
10.3
|
|
4/24/2014
|
|
|
10.29*
|
|
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
|
|
|
10.30††
|
|
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
|
|
|
10.31
|
|
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
|
|
|
10.32
|
|
First Amendment to Credit Agreement dated as of October 31, 2011 by and among the registrant, Bank of America, N.A and other lenders party thereto.
|
|
8-K
|
|
000-
23993
|
|
10.1
|
|
11/1/2011
|
|
|
10.33
|
|
Second Amendment to Credit Agreement dated as of July 31, 2014 by and among the registrant, Bank of America, N.A and other lenders party thereto.
|
|
8-K
|
|
000-
23993
|
|
10.1
|
|
7/31/2014
|
|
|
10.34
|
|
Lease Agreement dated May 18, 2000 between M-D Downtown Sunnyvale, LLC and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.21
|
|
3/31/2003
|
|
|
10.35
|
|
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
|
|
|
|
|
|
|
Where Located
|
||||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
No.
|
|
Filing Date
|
|
Filed
Herewith
|
10.36
|
|
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
|
|
|
10.37††
|
|
Lease Agreement dated December 29, 2004 between Irvine Commercial Property Company and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.38
|
|
3/1/2005
|
|
|
10.38
|
|
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
|
|
|
10.39
|
|
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
|
|
|
10.40
|
|
Fifth Amendment dated February 26, 2013 to Lease dated December 29, 2004 between The Irvine Company LLC and the registrant
|
|
10-K
|
|
000- 23993
|
|
10.38
|
|
1/30/2014
|
|
|
10.41
|
|
Sixth Amendment dated May 22, 2014 to Lease dated December 29, 2004 between The Irvine Company LLC and the registrant
|
|
|
|
|
|
|
|
|
|
X
|
10.42
|
|
Lease Agreement dated October 31, 2007 between Irvine Commercial Property Company LLC and the registrant
|
|
10-K
|
|
000-
23993
|
|
10.44
|
|
1/28/2008
|
|
|
10.43
|
|
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
|
|
|
10.44
|
|
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
|
|
|
10.45
|
|
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
|
|
10-K
|
|
000-
23993
|
|
10.45
|
|
2/1/2012
|
|
|
10.46
|
|
Seventh Amendment dated June 28, 2012 to Lease Agreement dated October 31, 2007 between Irvine Commercial Property Company LLC and the registrant
|
|
10-K
|
|
000- 23993
|
|
10.37
|
|
1/30/2013
|
|
|
•
|
the Discretionary Grant Program, under which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase shares of Common Stock or stock appreciation rights tied to the value of such Common Stock,
|
•
|
the Stock Issuance Program, under which eligible persons may be issued shares of Common Stock pursuant to restricted stock or restricted stock unit awards or other stock-based awards, made by and at the discretion of the Plan Administrator, that vest upon the completion of a designated service period and/or the attainment of pre-established performance milestones, or under which shares of Common Stock may be issued through direct purchase or as a bonus for services rendered the Corporation (or any Parent or Subsidiary), and
|
•
|
the Director Automatic Grant Program, under which Eligible Directors shall automatically receive restricted stock units at designated intervals over their period of Board service.
|
III.
|
ADMINISTRATION OF THE PLAN
|
1.
|
The following provisions shall govern the exercise of any options held by the Optionee at the time of cessation of Service or death:
|
Name of Entity
|
State or Other Jurisdiction of Incorporation or Organization
|
Broadcom International Limited
|
Cayman Islands
|
Broadcom Singapore Pte Ltd.
|
Singapore
|
Broadcom Cayman Limited
|
Cayman Islands
|
Broadcom Bermuda LP
|
Bermuda
|
NetLogic I LLC (formerly known as NetLogic Microsystems, Inc.)
|
Delaware
|
ServerWorks Corporation
|
Delaware
|
ServerWorks International Ltd.
|
Cayman Islands
|
|
|
|
/s/ S
COTT
A. M
C
G
REGOR
|
|
Scott A. McGregor
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
|
/s/ E
RIC
K. B
RANDT
|
|
Eric K. Brandt
|
|
Executive Vice President and
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
/
S
/ S
COTT
A. M
C
G
REGOR
|
|
Scott A. McGregor
|
|
Chief Executive Officer
|
|
/
S
/ E
RIC
K. B
RANDT
|
|
Eric K. Brandt
|
|
Chief Financial Officer
|