Broadcom Financial Analysis

8/7/2019 Broadcom Financial Analysis

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Key items

(amounts in thousands) 2006 2007 2008

Sales 3,667,818 3,776,395 4,658,125

net income 379,041 213,342 214,794

Cost of goods sold 1,795,565 1,832,178 2,213,015

cash 2,158,110 2,186,572 1,190,645

receivables 382,823 369,004 372,311

inventory 202,794 231,313 366,106

current assets 3,351,788 3,054,280 2,751,213

total assets 4,876,766 4,838,193 4,393,265

current liabilities 678,701 757,609 717,103

long term debt 6,399 44,436 69,095

total liabilities 685,100 802,045 786,198

total equity 4,191,666 4,036,148 3,607,067

Liquidity ratios 2006 2007 2008

Current ratio 4.94 4.03 3.84

Quick ratio 4.64 3.73 3.33

INDUSTRY

Leverage ratios 2006 2007 2008

Debt ratio 14.05% 16.58% 17.90%

Debt to equity ratio 16.34% 19.87% 21.80%

INDUSTRY

Activity ratios 2006 2007 2008

Inventory turnover 18.09 16.33 12.72

Average collection period 38.10 35.67 29.17

Asset turnover 0.75 0.78 1.06INDUSTRY

Profitability ratios 2006 2007 2008

Profit margin ratio 10.33% 5.65% 4.61%



ROA 7.77% 4.41% 4.89%

ROE 9.04% 5.29% 5.95%

INDUSTRY

Profitability ratios 2006 2007 2008

EPS 0.64 0.37 0.41

PE ratio* 50.15 70.78 41.42

Gross Margin 51.05% 51.48% 52.49%

INDUSTRY

*Use close price as of December 31: source: Yahoo Finance



Kipley Pereles

Ratios for Broadcom

2009 Industry (2009)

Texas Instr. Qualcomm4,490,323 10,427,000 10,568,000

65,261 1,470,000 2,091,000

2,210,559 5,428,000 3,242,000

1,397,093 1,182,000 3,660,000

508,627 1,277,000 616,000

362,428 1,202,000 350,000

2,914,332 6,114,000 13,574,000

5,127,242 12,119,000 28,903,000

1,148,350 1,587,000 2,948,000

87,046 810,000 3,775,000

1,235,396 2,397,000 7,550,000

3,891,846 9,722,000 21,353,000

2009 Industry comparison

2.54 3.66 lower Times



24.09% 23.33% higher percentage

31.74% 30.59% higher percentage



41.34 35.77 higher Days

0.88 0.70 higher Times


1.45% 11.78% lower percentage






0.13 0.84 lower Dollars

247.21 111.08 higher Times

50.77% 56.01% lower Percentage



PROJECTED

2010 2011

Sales 4,665,129 4,850,359

net income 127,379 190,352

cost of goods sold 2,203,846 2,274,960

cash 1,501,174 1,738,445

receivables 528,534 549,384

inventory 376,609 388,815

current assets 3,052,501 3,322,827

total assets 5,289,411 5,556,137

current liabilities 1,164,806 1,179,577

long term debt 30,000 30,000

total liabilities 1,281,852 1,296,623

total equity 4,007,559 4,185,079

Liquidity ratios 2010 2011

Current ratio 2.62 2.82

Quick ratio 2.30 2.49

Leverage ratios 2010 2011

Debt ratio 24.23% 23.34%

Debt to equity ratio 31.99% 30.98%

Activity ratios 2010 2011

Inventory turns 12.39 12.47

Average collection period 41.35 41.34

Asset turnover 0.88 0.87

Profitability ratios 2010 2011

Profit margin ratio 2.73% 3.92%



ROA 2.41% 3.43%

ROE 3.18% 4.55%

Profitability ratios

EPS 0.22 0.33

PE ratio* 149.23 79.33

Gross Margin 52.76% 53.10%



2012

5,046,789

266,159

2,349,701

2,034,485

571,631

401,727

3,654,027

5,891,177

1,195,109

30,000

1,312,155

4,430,152

2012

3.06

2.72

2012

22.27%

29.62%

2012

12.56

41.34

0.86

2012

5.27%



4.52%

6.01%

0.51

33.42

53.44%



roadcom vs. Industry Liquidity Ratios: Current Rati Broadc

Broadcom vs. Industry Leverage Ratios: Debt Ratio com



om vs. Industry Activity Ratios: Inventory Turnove m vs.

com vs. Industry Activity Ratios: Asset Turnover om



m vs. Industry Profitability Ratios: Return on Asse mvs.

vs. Industry Profitability Ratios: Earnings per Sh m vs.



com vs. Industry Profitability Ratios: Gross Margin



om vs. Industry Liquidity Ratios: Quick Rati

s. Industry Leverage Ratios: Debt-to-Equity



Industry Activity Ratios: Avg Collection Peri

s. Industry Profitability Ratios: Profit Margi



Industry Profitability Ratios: Return on Equi

Industry Profitability Ratios: Price-to-Earnin





Created by EDGAR Online, Inc.

BROADCOM CORP

BALANCE_SHEET

Form Type: 10-K

Period End: Dec 31, 2009

Date Filed: Feb 03, 2010

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

December 31,

2009

Assets

Current assets:

Cash and cash equivalents $1,397,09

Short-term marketable securities 532,281Accounts receivable (net of allowance for doubtful accounts

of $6,787 in 2009, $5,354 in 2008, $5,472 in 2007 and $6,894 in 2006 ) 508,627

Inventory 362,428

Prepaid expenses and other current assets 113,903

Total current assets 2,914,332

Property and equipment, net 229,317

Long-term marketable securities 438,616

Goodwill 1,329,614

Purchased intangible assets, net 150,927

Other assets 64,436

Total assets $5,127,24

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable $437,35

Wages and related benefits 190,315

Deferred revenue and income 87,388

Accrued liabilities 433,294

Total current liabilities 1,148,350

Commitments and contingencies

Long-term deferred revenue 608

Other long-term liabilities 86,438Shareholders' equity:

Convertible preferred stock, $.0001 par value:

Authorized shares - 6,432 - none issued and outstanding -

Class A common stock, $.0001 par value:

Authorized shares - 2,500,000

Issued and outstanding shares -

438,557 in 2009, 426,095 in 2008, 468,858 in 2007 and 473,533 in 2006 44

Class B common stock, $.0001 par value:

Authorized shares - 400,000


56,999 in 2009, 62,923 in 2008, 68,400 in 2007 and 74,781 in 2006 6

Additional paid-in capital 11,153,060

Accumulated deficit (7,259,069)

Accumulated other comprehensive income (loss) (2,195)




BROADCOM CORP

INCOME_STATEMENT2

Form Type: 10-K



CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

Year Ended Decembe

2009

Net revenue:

Product revenue $4,272,726

Income from Qualcomm Agreement (see Note 2) 170,611

Licensing revenue 46,986

Total net revenue 4,490,323

Costs and expenses:

Cost of product revenue 2,210,559

Research and development 1,534,918

Selling, general and administrative 479,362

Amortization of purchased intangible assets 14,548

Impairment of goodwill and other long-lived assets 18,895

Settlement costs, net 118,468

Restructuring costs (reversals) 7,501

In-process research and development -

Charitable contribution 50,000

Total operating costs and expenses 4,434,251

Income from operations 56,072

Interest income, net 13,901

Other income (expense), net 2,218

Income before income taxes 72,191

Provision for income taxes 6,930

Net income $65,261

Net income per share (basic) $0.13

Net income per share (diluted) $0.13

Weighted average shares (basic) 494,038

Weighted average shares (diluted) 512,645




BROADCOM CORP

CASH_FLOW

Form Type: 10-K



CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Year End

2009

Operating activities

Net income $65,261

Adjustments to reconcile net income to net cashprovided by operating activities:

Depreciation and amortization 74,435

Stock-based compensation expense:

Stock options and other awards 159,790

Restricted stock units 336,557

Acquisition-related items:


Impairment of goodwill and long-lived assets 18,895

In-process research and development -

Loss on strategic investments, net

Non-cash restructuring reversals, net (1,944)

Loss (gain) on sale of marketable securities (1,046)

Changes in operating assets and liabilities:

Accounts receivable (131,656)

Inventory 12,013

Prepaid expenses and other assets 8,714

Accounts payable 122,985

Deferred revenue and income 71,760

Accrued settlement costs 170,500

Other accrued and long-term liabilities 49,885

Net cash provided by operating activities 986,893

Investing activities

Net purchases of property and equipment (66,570) Net cash paid for acquired companies (165,258)

Sales (purchases) of strategic investments (2,000)

Purchases of marketable securities (1,138,681)

Proceeds from sales and maturities of marketable

securities 871,152

Net cash provided by (used in) investing

activities (501,357)

Financing activities

Repurchases of Class A common stock (421,869)

Proceeds from issuance of common stock 227,209

Payments of assumed debt and other obligations 0

Repayment of notes receivable by employees 0

Minimum tax withholding paid on behalf of




BROADCOM CORP

STOCKHOLDERS_EQUITY

Form Type: 10-K



CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE IN

(In thousands)

Common Stock

Shares

Balance at December 31, 2006 548,314

Cumulative effect to prior year accumulated

deficit related to the adoption of FIN 48 -

Shares issued pursuant to stock awards, net 22,689

Employee stock purchase plan 2,044


Stock-based compensation expense -

Stock option exchange -

Components of comprehensive income:

Translation adjustments -

Net income -

Comprehensive income -







Unrealized gain on marketable securities -

Translation adjustments -

Net income -










Unrealized loss on marketable securities -

Translation adjustments -Net income -





COME

Accumulated

Other

Additional Comprehensive

Paid-In Accumulated Income

Amount Capital Deficit (Loss)

$55 $11,948,908 $(7,757,202) $(95)

- - 4,736 -

- 234,616 - -

- 55,350 - -

(1) (1,156,279) - -

- 519,652 - -

- (26,205) - -

- - - (729)

- - 213,342 -

- - - -

54 11,576,042 (7,539,124) (824)

1 34,059 - -

- 78,720 - -

(6) (1,267,880) - -

- 509,374 - -

- - - 5,213

- - - (3,356)

- - 214,794 -

- - - -

49 10,930,315 (7,324,330) 1,033



1 59,054 - -

- 85,491 - -

- (421,869) - -

- 500,069 - -

- - - (4,624)

- - - 1,396- - 65,261 -

- - - -

$50 $11,153,060 $(7,259,069) $(2,195)



Total

Shareholders'

Equity

$4,191,666

4,736

234,616

55,350

(1,156,280)

519,652

(26,205)

(729)

213,342

212,613

4,036,148

34,060

78,720

(1,267,886)

509,374

5,213

(3,356)

214,794

216,651

3,607,067



59,055

85,491

(421,869)

500,069

(4,624)

1,39665,261

62,033

$3,891,846



R&D Expense Broadcom Texas Instruments Qualcomm

2006 1,117,014 2,195,000 1,538,000

2007 1,349,508 2,140,000 1,829,000

2008 1,497,668 1,940,000 2,281,000

2009 1,534,918 1,476,000 2,432,000

Percentage of Revenue Broadcom Texas Instruments Qualcomm

2006 30.45% 15.40% 20.44%

2007 35.74% 15.47% 20.62%

2008 32.15% 15.52% 20.47%

2009 34.18% 14.16% 22.82%

1 2 3

30.45%

35.74%32.15%

5.40% 15.47% 15.52%

0.44% 20.62% 20.47%

R&D Expenditure Ratios

Column B Column C Column D



4

3

14.16

22.82

1 2 3

17,014

1,349,5081,497,668

95,000 2,140,0001,940,000

38,000

1,829,000

2,281,000

R&D Expenditure Ratios

Column B Column C Column D



4

1,534,91,476,0

2,432,0




BROADCOM CORP

INCOME_STATEMENT

Form Type: 10-K



Broadband

Communications

Year ended December 31, 2009

Net revenue $1,525,193

Operating income (loss) 172,702









Reportable Segments

Mobile & Enterprise All

Wireless Networking Other

(In thousands)

$1,719,998 $1,055,553 $189,579

116,882 286,303 (519,815)

$1,528,178 $1,258,044 $149,232

33,974 390,293 (633,558)

$1,192,634 $1,139,668 $31,800

4,955 267,946 (500,598)



Consolidated

$4,490,323

56,072

$4,658,125

172,130

$3,776,395

84,975



TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheets

(Millions of dollars, except share amounts)

2009Assets

Current assets:

Cash and cash equivalents $ 1,182

Short-term investments 1,743

Accounts receivable, net of allowances 1,277

Inventories 1,202

Deferred income taxes 546

Prepaid expenses and other current assets 164

Total current assets 6,114

Property, plant and equipment at cost 6,705Less accumulated depreciation (3,547)

Property, plant and equipment, net 3,158

Long-term investments 637

Goodwill 926

Acquisition-related intangibles 124


Capitalized software licenses, net 119

Overfunded retirement plans 64

Other assets 51

Total assets $ 12,119

Liabilities and Stockholders’ Equity


Accounts payable $ 503

Accrued expenses and other liabilities 841

Income taxes payable 128

Accrued profit sharing and retirement 115

Total current liabilities 1,587

Underfunded retirement plans 425


Deferred credits and other liabilities 318

Total liabilities 2,397

Stockholders’ equity:

Preferred stock, $25 par value. Authorized -- 10,000,000 shares.

Participating cumulative preferred. None issued. --

Common stock, $1 par value. Authorized --2,400,000,000

shares. Shares issued: 2009 -- 1,739,811,721 1,740






Consolidated Statements of Income

(Millions of dollars, except share and per-share amounts)

2009

Revenue $ 10,427

Cost of revenue 5,428

Gross profit 4,999

Research and development (R&D) 1,476

Selling, general and administrative (SG&A) 1,320

Restructuring Expense 212

Operating profit 1,991

Other income (expense) net 26

Income before income taxes 2,017Provision for income taxes 547

Net income $ 1,470

Earnings per common share:

Basic $ 1 .16

Diluted $ 1 .15

Average shares outstanding (millions):

Basic 1,260

Diluted 1,269

Cash dividends declared per share of common stock $ .45






Consolidated Statements of Cash Flows

(Millions of dollars)

Cash flows from operating activities:

Net income $

Adjustments to net income:

Depreciation

Stock-based compensation

Amortization of acquisition-related intangibles

Deferred income taxes

Increase (decrease) from changes in:

Accounts receivable

InventoriesPrepaid expenses and other current assets

Accounts payable and accrued expenses

Income taxes payable

Accrued profit sharing and retirement

Other

Net cash provided by operating activities

Cash flows from investing activities:

Additions to property, plant and equipment

Purchases of short-term investments

Sales and maturities of short-term investments

Purchases of long-term investments

Sales of long-term investments

Acquisitions, net of cash acquired

Net cash used in investing activities

Cash flows from financing activities:

Dividends paid

Sales and other common stock transactions

Excess tax benefit from share-based payments

Stock repurchases

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year $



2009

1470

877

186

48

146

(364)

17735

(17)

73

(16)

28

2,643

(753)

(2,273)

2,030

(9)

64

(155)

(1096)

(567)

109

1

(954)

(1,411)

136

1,046

1,182



assets: 3/31/2009 6/30/2009

Cash and cash equivalents 3892 3729

Marketable securities 5523 6159

Accounts receivable, net 804 943

Inventories 409 375

Deferred tax assets 280 286Collateral held under securities lending 0 0

Other current assets 324 247

Total current assets 11232 11739

Marketable securities 4560 5801

Deferred tax assets 941 822

Property, plant and equipment, net 2282 2311

Goodwill 1502 1512

Other intangible assets, net 3123 3138

Other assets 444 398

Total assets 24084 25721LIABILITIES AND STOCKHOLDERS’ EQUITY


Trade accounts payable 444 561

Payroll and other benefits related liabilities 313 459

Income taxes payable 109

Unearned revenues 421 447

Obligations under securities lending 0 0

Other current liabilities 970 905

Total current liabilities 2257 2372

Unearned revenues 3599 3528

Income taxes payable 276 263

Other liabilities 839 839

Total liabilities 6971 7002

Commitments and contingencies (Note 7)

Stockholders’ equity:

Preferred stock, $0.0001 par value; issuable in series;

2009 and September 28, 2008

Common stock, 6,000 shares authorized; 1,653 and 1,656 shares issued

outstanding at March 29, 2009 and September 28, 2008, respectively

Paid-in capital 7648 7988

Retained earnings 10241 10716Accumulated other comprehensive loss -776 7

Total stockholders’ equity 17113 18711

Total liabilities and stockholders’ equity 24084 25713



9/30/2009 12/27/2009

$2,717 $3,660

8,352 8,504

700 616

453 350

149 199

199 245

12570 13574

6,673 6,764

843 1,118

2,387 2,384

1,492 1,490

3,065 3,142

415 431

27445 28903

636 415

480 385

458

441 567

1256 1123

2813 2948

3464 3775

47

805 827

7129 7550

8493 8817

11235 11792588 744

20316 21353

27445 28903









Effect of exchange rate changes on cash

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period



3/31/2009 6/30/2009 9/30/2009 12/27/2009 12/27/2009

3 mo 3 mo 3 mo 3 mo 12 mo

52 790 802 841 2485

306 460 175 162 1103

-57 -86 -28 -37 -208

166 222 -255 32 165

285 436 148 151 1020

-32 -54 -14 -13 -11333 -57 -22 -102 -148

602 717 -91 57 1285

-20 -22 58 4 20

2824 2691 392 87 5994

113 143 -74 101 283

-30 -17 -41 -32 -120

-103 -8 65 -226 -272

710 737 247 -124 1570

-84 -101 -41 338 112

4765 5851 1321 1239 13176

-468 -617 -144 -88 -1317

-4296 -6497 -3946 -2098 -16837

2461 3606 1668 2013 9748

317 349 8 674

-40 -47 -7 -6 -100

173 173 346

6 6 -1 -1 10

-1847 -3027 -2430 -172 -7476

101 276 366 152 895

32 54 25 13 124

-528 -810 -808 -284 -2430

-285 -285 525 -45

-174 -173 -347

-3 0 -3 -1 -7

-857 -938 105 -120 -1810



-9 -5 -4 -18

2052 1881 -1004 943 3872



Broadcom Bluetooth Earpiece - Voice to Text (Base Case)

Capital investment 30,000,000

0.2000 0.3200 0.1920 0.1152

5 years MACRS 6,000,000 9,600,000 5,760,000 3,456,000

Book Value 24,000,000 14,400,000 8,640,000 5,184,000

ending WC 8,755,000 9,468,533 10,240,615 11,074,582A/R to sales 9,605,000 10,387,808 11,234,850 12,149

Inventory to sales 6,859,500 7,418,549 8,023,472 8,676

A/Payables to sales 7,709,500 8,337,824 9,017,707 9,752

Sales price 0 $85.00 $87.55 $90.18 $92.88

Cost 0 25 25.75 26.52 27.32

Unit Forecast 1,000,000 1050000 1,102,500 1,157,625

Base case Capital Budgeting-Bluetooth Earpiece

Yr 0 Yr 1 Yr 2 Yr 3 Yr 4

Revenue 85,000,000 91,927,500 99,423,450 107,520,210Cost 25,000,000 27,037,500 29,241,056 31,624,202

Dep 6,000,000 9,600,000 5,760,000 3,456,000

EBIT 54,000,000 55,290,000 64,422,394 72,440,008

tax 0.34 18,360,000 18,798,600 21,903,614 24,629,603

NI 35,640,000 36,491,400 42,518,780 47,810,405

Dep 6,000,000 9,600,000 5,760,000 3,456,000

OCF 41,640,000 46,091,400 48,278,780 51,266,405

NWC -8,755,000 -713,533 -772,083 -833,966

WC recovery

Net change in WC -8,755,000 -713,533 -772,083 -833,966

Capital investment -30,000,000

resale value

Tax savings 0

Net Cap spending -30,000,000 0 0 0 0

OCF 41,640,000 46,091,400 48,278,780 51,266,405

NWC -8,755,000 -713,533 -772,083 -833,966

Net Cap Spend -30,000,000 0 0 0 0

Net CFs -30,000,000 32,885,000 45,377,868 47,506,697 50,432,439

PVIF 1 0.87 0.76 0.66 0.57

DCFs -$30,000,000 $28,596,796 $34,310,206 $31,235,653 $28,837,268

NPV = $152,539,536

IRR = 129.7%

Payback = 1.67yrs

cum ncf -$30,000,000 2,885,000 48,262,868 95,769,565 146,202,003



Bluetooth earpiece - voice to text

Best Case Scenario Broadcom's bluetooth earpiece took off and sa


0.2000 0.3200

5 years MACRS 6,000,000 9,600,000

Book Value 24,000,000 14,400,000

ending WC 8,755,000 13,029,500A/R to sales 9,605,000 14,294,500

Inventory to sales 6,859,500 10,208,550

A/Payables to sales 7,709,500 11,473,550

Sales price 0 $85.00 $110.00

Cost 0 25 25.75

Unit Forecast 1,000,000 1150000

Yr 0 Yr 1 Yr 2Revenue 85,000,000 126,500,000

Cost 25,000,000 29,612,500

Dep 6,000,000 9,600,000

EBIT 54,000,000 87,287,500

tax 0.34 18,360,000 29,677,750

NI 35,640,000 57,609,750

Dep 6,000,000 9,600,000

OCF 41,640,000 67,209,750

NWC -8,755,000 -4,274,500

WC recovery

Net change in WC -8,755,000 -4,274,500


resale value

Tax savings

Net Cap spending -30,000,000 0 0

OCF 41,640,000 67,209,750

NWC -8,755,000 -4,274,500

Net Cap Spend -30,000,000 0 0Net CFs -30,000,000 32,885,000 62,935,250

PVIF 1 0.87 0.76

DCFs -$30,000,000 $28,596,796 $47,585,343

NPV = $244,245,199



IRR = 156.1%

Payback = 1.38yrs

cum ncf -$30,000,000 2,885,000 65,820,250

Broadcom Bluetooth earpiece - voice to text

Worst Case Scenario After year 1 there is no demand and there is a


0.2000 0.3200

5 years MACRS 6,000,000 9,600,000

Book Value 24,000,000 14,400,000

ending WC 8,500,000 6,363,637

Sales price 85 $85.00 $70.00

Cost 30

Unit Forecast 1,000,000 909,091

Yr 0 Yr 1 Yr 2

Revenue 85,000,000 63,636,370

Cost 30,000,000 27,272,730

Dep 6,000,000 9,600,000

EBIT 49,000,000 26,763,640

tax 0.34 16,660,000 9,099,638

NI 32,340,000 17,664,002

Dep 6,000,000 9,600,000

OCF 38,340,000 27,264,002

NWC -8,500,000 2,136,363

WC recovery

Net change in WC -8,500,000 2,136,363


resale value

Tax savings


OCF 38,340,000 27,264,002

NWC -8,500,000 2,136,363

Net Cap Spend -30,000,000 0 0

Net CFs -30,000,000 29,840,000 29,400,365

PVIF 1 0.87 0.76

DCFs -$30,000,000 $25,948,864 $22,229,616



NPV = $87,957,375

IRR = 97.3%

Payback = 4.24yrs

cum ncf -$30,000,000 -160,000 29,240,365



15% growth in sales and a price increased to $110 after year 1.

0.1920 0.1152 0.1152 0.0576

5,760,000 3,456,000 3,456,000 1,728,000

8,640,000 5,184,000 1,728,000 0

14,983,925 17,231,514 19,816,249 22,788,68616,438,675 18,904,476 21,740,157 25,001,180

11,739,833 13,500,807 15,525,935 17,854,825

13,194,583 15,173,770 17,449,843 20,067,319

$110.00 $110.00 $110.00 $110.00

26.52 27.32 28.14 28.98

1,322,500 1,520,875 1,749,007 2,011,358

Yr 3 Yr 4 Yr 5 Yr 6145,475,000 167,296,250 192,390,770 221,249,380

35,076,006 41,547,529 49,213,070 58,292,880

5,760,000 3,456,000 3,456,000 1,728,000

104,638,994 122,292,721 139,721,700 161,228,500

35,577,258 41,579,525 47,505,378 54,817,690

69,061,736 80,713,196 92,216,322 106,410,810

5,760,000 3,456,000 3,456,000 1,728,000

74,821,736 84,169,196 95,672,322 108,138,810

-1,954,425 -2,247,589 -2,584,736 -2,972,437

$22,788,686

-1,954,425 -2,247,589 -2,584,736 19,816,249

$6,000,000.00

0 -2,040,000 (bk-resale)*.34

0 0 0 3,960,000

74,821,736 84,169,196 95,672,322 108,138,810

-1,954,425 -2,247,589 -2,584,736 19,816,249

0 0 0 3,960,00072,867,311 81,921,607 93,087,587 131,915,060

0.66 0.57 0.5 0.43

$47,910,257 $46,842,775 $46,283,148 $57,026,880



138,687,561 220,609,168 313,696,754 445,611,814

-2.38

teady decrease of 10% each year. Due to lack of demand sale price is reduced to $70 a

0.1920 0.1152 0.1152 0.0576

5,760,000 3,456,000 3,456,000 1,728,000

8,640,000 5,184,000 1,728,000 0

5,785,129 5,259,205 4,781,098 4,346,454

$70.00 $70.00 $70.00 $70.00

826,447 751,315 683,014 620,922

Yr 3 Yr 4 Yr 5 Yr 6

57,851,290 52,592,050 47,810,980 43,464,540

24,793,410 0 0 0

5,760,000 3,456,000 3,456,000 1,728,000

27,297,880 49,136,050 44,354,980 41,736,540

9,281,279 16,706,257 15,080,693 14,190,424

18,016,601 32,429,793 29,274,287 27,546,116

5,760,000 3,456,000 3,456,000 1,728,000

23,776,601 35,885,793 32,730,287 29,274,116

578,508 525,924 478,107 434,644

$4,346,454.00

578,508 525,924 478,107 4,781,098

$6,000,000.00

0 -2,040,000 (bk-resale)*.34

0 0 0 3,960,000

23,776,601 35,885,793 32,730,287 29,274,116

578,508 525,924 478,107 4,781,098

0 0 0 3,960,000

24,355,109 36,411,717 33,208,394 38,015,214

0.66 0.57 0.5 0.43

$16,013,484 $20,820,220 $16,511,213 $16,433,977



53,595,474 90,007,191 123,215,585 161,230,799

3.24





d costs increase to $30






Increased tax rate of 38%

$10,000 Concept design cost is irrelevant


0.2000 0.3200

5 years MACRS 6,000,000 9,600,000Book Value 24,000,000 14,400,000

ending WC 8,755,000 9,468,533

A/R to sales 9,605,000 10,387,808

Inventory to sales 6,859,500 7,418,549

A/Payables to sales 7,709,500 8,337,824

Sales price 0 $85.00 $87.55

Cost 0 25 25.75

Unit Forecast 1,000,000 1050000

Yr 0 Yr 1 Yr 2

Revenue 85,000,000 91,927,500

Cost 25,000,000 27,037,500

Dep 6,000,000 9,600,000

EBIT 54,000,000 55,290,000

tax 0.38 20,520,000 21,010,200

NI 33,480,000 34,279,800

Dep 6,000,000 9,600,000

OCF 39,480,000 43,879,800

NWC -8,755,000 -713,533

WC recovery

Net change in WC -8,755,000 -713,533


resale value

Tax savings


OCF 39,480,000 43,879,800

NWC -8,755,000 -713,533

Net Cap Spend -30,000,000 0 0

Net CFs -30,000,000 30,725,000 43,166,268

PVIF 1 0.87 0.76

DCFs -$30,000,000 $26,718,460 $32,638,015



NPV = $142,464,195

IRR = 122.8%

Payback = 3.63yrs

cum ncf -$30,000,000 725,000 43,891,268



0.1920 0.1152 0.1152 0.0576

5,760,000 3,456,000 3,456,000 1,728,0008,640,000 5,184,000 1,728,000 0

10,240,615 11,074,582 11,977,618 12,959,025

11,234,850 12,149,784 13,140,494 14,217,183

8,023,472 8,676,881 9,384,406 10,153,334

9,017,707 9,752,083 10,547,281 11,411,491

$90.18 $92.88 $95.67 $98.58

26.52 27.32 28.14 28.98

1,102,500 1,157,625 1,215,507 1,276,281

Yr 3 Yr 4 Yr 5 Yr 6

99,423,450 107,520,210 116,287,555 125,815,781

29,241,056 31,624,202 34,201,596 36,988,987

5,760,000 3,456,000 3,456,000 1,728,000

64,422,394 72,440,008 78,629,959 87,098,794

24,480,510 27,527,203 29,879,384 33,097,542

39,941,884 44,912,805 48,750,574 54,001,252

5,760,000 3,456,000 3,456,000 1,728,000

45,701,884 48,368,805 52,206,574 55,729,252

-772,083 -833,966 -903,037 -981,407

$12,959,025.44

-772,083 -833,966 -903,037 11,977,618

$6,000,000.00

0 -2,280,000 (bk-resale)*.34

0 0 0 3,720,000

45,701,884 48,368,805 52,206,574 55,729,252

-772,083 -833,966 -903,037 11,977,618

0 0 0 3,720,000

44,929,801 47,534,838 51,303,538 71,426,870

0.66 0.57 0.5 0.43

$29,541,344 $27,180,421 $25,508,119 $30,877,836






Return of 10%

$10,000 Concept design cost is irrelevant


0.2000 0.3200

5 years MACRS 6,000,000 9,600,000Book Value 24,000,000 14,400,000

ending WC 8,755,000 9,468,533

A/R to sales 9605000.00 10387807.50

Inventory to sales 6859500.00 7418549.25

A/Payables to sales 7709500.00 8337824.25

Sales price 0 $85.00 $87.55

Cost 0 25 25.75

Unit Forecast 1,000,000 1050000

Yr 0 Yr 1 Yr 2

Revenue 85,000,000 91,927,500

Cost 25,000,000 27,037,500

Dep 6,000,000 9,600,000

EBIT 54,000,000 55,290,000

tax 0.34 18,360,000 18,798,600

NI 35,640,000 36,491,400

Dep 6,000,000 9,600,000

OCF 41,640,000 46,091,400

NWC -8,755,000 -713,533

WC recovery

Net change in WC -8,755,000 -713,533


resale value

Tax savings


OCF 41,640,000 46,091,400

NWC -8,755,000 -713,533

Net Cap Spend -30,000,000 0 0

Net CFs -30,000,000 32,885,000 45,377,868

PVIF 1 0.91 0.83

DCFs -$30,000,000 $29,895,754 $37,500,270



NPV = $183,763,020

IRR = 129.7%

Payback = 3.67yrs

cum ncf -$30,000,000 2,885,000 48,262,868



0.1920 0.1152 0.1152 0.0576

5,760,000 3,456,000 3,456,000 1,728,0008,640,000 5,184,000 1,728,000 0

10,240,615 11,074,582 11,977,618 12,959,025

11234849.85 12149783.73 13140493.68 14217183.25

8023472.42 8676880.95 9384405.66 10153333.53

9017706.92 9752083.05 10547281.21 11411491.33

$90.18 $92.88 $95.67 $98.58

26.52 27.32 28.14 28.98

1,102,500 1,157,625 1,215,507 1,276,281

Yr 3 Yr 4 Yr 5 Yr 6

99,423,450 107,520,210 116,287,555 125,815,781

29,241,056 31,624,202 34,201,596 36,988,987

5,760,000 3,456,000 3,456,000 1,728,000

64,422,394 72,440,008 78,629,959 87,098,794

21,903,614 24,629,603 26,734,186 29,613,590

42,518,780 47,810,405 51,895,773 57,485,204

5,760,000 3,456,000 3,456,000 1,728,000

48,278,780 51,266,405 55,351,773 59,213,204

-772,083 -833,966 -903,037 -981,407

$12,959,025.44

-772,083 -833,966 -903,037 11,977,618

$6,000,000.00

0 -2,040,000 (bk-resale)*.34

0 0 0 3,960,000

48,278,780 51,266,405 55,351,773 59,213,204

-772,083 -833,966 -903,037 11,977,618

0 0 0 3,960,000

47,506,697 50,432,439 54,448,736 75,150,822

0.75 0.68 0.62 0.56

$35,691,781 $34,445,356 $33,807,220 $42,422,639



95,769,565 146,202,003 200,650,740 275,801,562

2.67



Broadcom Bluetooth Earpiece - Voice to Text (Base Case)

Using WACC - 35.55%


0.2000 0.3200 0.1920 0.1152 0

5 years MACRS 6,000,000 9,600,000 5,760,000 3,456,000 3,45

Book Value 24,000,000 14,400,000 8,640,000 5,184,000 1,72

ending WC 8,755,000 9,468,533 10,240,615 11,074,582 11,97

A/R to sales 9,605,000 10,387,808 11,234,850 12,149,784

Inventory to sales 6,859,500 7,418,549 8,023,472 8,676,881

A/Payables to sales 7,709,500 8,337,824 9,017,707 9,752,083

Sales price 0 $85.00 $87.55 $90.18 $92.88 $

Cost 0 25 25.75 26.52 27.32

Unit Forecast 1,000,000 1050000 1,102,500 1,157,625 1,21

Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Revenue 85,000,000 91,927,500 99,423,450 107,520,210 116,28

Cost 25,000,000 27,037,500 29,241,056 31,624,202 34,20

Dep 6,000,000 9,600,000 5,760,000 3,456,000 3,4

EBIT 54,000,000 55,290,000 64,422,394 72,440,008 78,62tax 0.34 18,360,000 18,798,600 21,903,614 24,629,603 26,7

NI 35,640,000 36,491,400 42,518,780 47,810,405 51,89

Dep 6,000,000 9,600,000 5,760,000 3,456,000 3,4

OCF 41,640,000 46,091,400 48,278,780 51,266,405 55,35

NWC -8,755,000 -713,533 -772,083 -833,966 -90

WC recovery

Net change in WC -8,755,000 -713,533 -772,083 -833,966 -90


resale value

Tax savings 0

Net Cap spending -30,000,000 0 0 0 0

OCF 41,640,000 46,091,400 48,278,780 51,266,405 55,35

NWC -8,755,000 -713,533 -772,083 -833,966 -90

Net Cap Spend -30,000,000 0 0 0 0

Net CFs -30,000,000 32,885,000 45,377,868 47,506,697 50,432,439 54,44

PVIF 1 0.74 0.54 0.4 0.29

DCFs -$30,000,000 $24,180,341 $24,535,813 $18,883,912 $14,741,402 $11,70

NPV = $75,916,331

IRR = 129.7%

Payback = 1.67 yrs

cum ncf -$30,000,000 2,885,000 48,262,868 95,769,565 146,202,003 200,65



Project Projections:

Year 1 revenue based on 1million units sold @ $85 per unit

Cost Price & Sale Price per unit to increase 3% after 1st year

Units sold to increased 5% after 1st year

Depreciation over based on MACRS (Year 1 20%, 2 32%, 3 19.2%)

Inventory will increase by ?????% in years 1, 2, & 3

Tax rate is 34%

Year 6 resale value is $6,000,000

Working capital is 25% of sales revenue

Base Values

Year 0 Year 1 Year 2

Project Cost 30,000,000.00Project Revenue 0.00 85,000,000 91,927,500

Project Cogs 0.00 25,000,000 27,037,500

Depreciation 0.00 6,000,000 9,600,000

EBIT 54,000,000 55,290,000

Taxes (34%) 18,360,000 18,798,600

35,640,000 36,491,400

Depreciation 6,000,000 9,600,000

OCF 41,640,000 46,091,400

Net Income

WC at 25% 21,250,000 22,981,875



Year 3

99,423,450

29,241,056

5,760,000

64,422,394

21,903,614

42,518,780

5,760,000

48,278,780

48,278,780

24,855,863



Broadcom Pro Formas Pro Forma Income Statement

Consolidated Statement of Earnings

(in thousands except per share amounts)

Base Yr 1 Yr 1 project

Fiscal Year 2% growth

Net sales 4,490,323 4,580,129 85,000

Total revenues 4,490,323 4,580,129 85,0

Costs and expenses:

Depreciation expense 74,435 74,435 6

Cost of product revenue 2,136,124 2,178,846 25

Research and development 1,534,918 1,565,616

Selling, general and administrative 479,362 479,362

Amortization of purchased intangible asset 14,548 14,548

Impairment of goodwill and other long-live 18,895 18,895

Settlement costs, net 118,468 118,468

Restructuring costs (reversals) 7,501 7,501

Charitable contribution 50,000 50,000

Total Cost of sales 4,434,251 4,507,672 31,0Earnings before interest & income taxes 56,072 72,458 54,0

Interest Income/Expense, Net 13,901 13,901 (1,671)

Other income (expense), net 2,218 2,218 -

Other income & expense, net 72,191 88,577 52,329

Provision for income taxes (6,930) (8,503) (5

Net Earnings 65,261 80,073 47,3

q1 853,436.00 0.19006

q2 1,039,944.00 0.23160

q3 1,254,197.00 0.27931

q4 1,342,746.00 0.29903

t r 4490323



Yr 3 Project Yr 3

Total

99,423 5,046,789

99,423 5,046,789

5,760 80,195.00

29,241 2,349,701

- 1,628,867

- 498,728

14,548

18,895

118,468

7,501

50,000

35,001 4,766,90364,422 279,886

(1,671) 12,230

- 2,308

62,751 294,424

(6,024) (28,265)

56,727 266,159



Pro Forma Balance Sheet A = B

Yr

Base

Assets

Current assets:

Cash and cash equivalents 1,

0.1133 Accounts receivable

0.1697 Inventory

Short-term marketable securities

Prepaid expenses and other current assets

Total current assets: 2,9

Gross PPE

Accumlated Depreciation (

Property and equipment, net

Other Assets 1,

Total Assets



0.20474 Accounts payable

Other Current Liabilities

Total current liabilities: 1,1

Long Term Debt (Bonds Payable)

Long-term deferred revenue

Shareholders' equity:

Convertible preferred stock, $.0001 par value:

Authorized shares - 6,432 - none issued and outstanding

Class A common stock, $.0001 par value:

Authorized shares - 2,500,000


438,557 in 2009, 426,095 in 2008, 468,858 in 2007 and 473,533 in 2006


Authorized shares - 400,000


56,999 in 2009, 62,923 in 2008, 68,400 in 2007 and 74,781 in 2006

Additional paid-in capital 11,Accumulated deficit (Retained Earnings) (7,

Accumulated other comprehensive income (loss)

Total shareholders' equity

Total liabilities and shareholders' equity



Broadcom Annual Plan

Consolidated Statement of Earnings

(in thousands except per share amounts)

Base Yr

Fiscal Year 2% g

Net sales 4,490,323

Total revenues 4,490,323 4

Costs and expenses:

Depreciation expense 74,435

Cost of product revenue 2,136,124

Research and development 1,534,918

Selling, general and administrative 479,362


Impairment of goodwill and other long-lived assets 18,895

Settlement costs, net 118,468

Restructuring costs (reversals) 7,501

Charitable contribution 50,000

Total Cost of sales 4,434,251 4Income From Operations 56,072

Interest Income/Expense, Net 13,901

Other income (expense), net 2,218

Other Income Before Taxes 1.6 72,191

Provision for income taxes (6,930)

Net Earnings 1.5 65,261

Quarter Revenue Per Quarter Revenue % by Quarter

q1 853,436.00 0.19006

q2 1,039,944.00 0.23160

q3 1,254,197.00 0.27931

q4 1,342,746.00 0.29903

Total Revenue 2009 4,490,323



Q3 Q4 YEAR 1

Total VARIANCE

1,303,022 1,395,019 4,665,129

1,303,022 1,395,019 4,665,129 -

-

-

20,109 20,109 80,435 -

615,559 659,019 2,203,846 -

391,404 391,404 1,565,616 0

119,841 119,841 479,362 -

3,637 3,637 14,548 -

4,724 4,724 18,895 -

29,617 29,617 118,468 -

1,875 1,875 7,501 -

12,500 12,500 50,000 -

1,199,265 1,242,725 4,538,671 0.36103,757 152,294 126,458 (0.36)

3,058 3,058 12,230

555 555 2,218

107,369 155,906 140,906

(10,307) (14,967) (13,527)

97,062 140,939 127,379



Broadcom Annual Plan Balance Sheet

inventory/cost or product revenue = % for growth A = Base B = Growth = S

Yr 0 Yr 1 Y

Base (A) Growth (B) Proje

Assets

Current assets:

Cash and cash equivalents 1,397,093 1,468,289

Accounts receivable 508,627 518,929

0.1697 Inventory 362,428 369,750

Short-term marketable securities 532,281 532,281

Prepaid expenses and other current assets 113,903 113,903

Total current assets: total CA 2,914,332 3,003,152

Gross PPE 553,705 553,705

Accumlated Depreciation -324,388 -324,388

Property and equipment, net 229,317 229,317

Other Assets 1,983,593 1,983,593

Total Assets 5,127,242 5,216,062 85,0



0.20474 Accounts payable 437,353 446,100

Other Current Liabilities 710,997 710,997

Total current liabilities: 1,148,350 1,157,097 7,7

Long Term Debt (Bonds Payable) 0

Long-term deferred revenue 87,046 87,046

Shareholders' equity:

438,557 in 2009, 426,095 in 2008, 468,858 in 200 44 44


Additional paid-in capital 11,153,060 11,153,060

Accumulated deficit (Retained Earnings) -7,259,069 -7,178,996

Accumulated other comprehensive income (loss) -2,195 -2,195

Total shareholders' equity 3,891,846 3,971,919

Total liabilities and shareholders' equity 5,127,242 5,216,062

Quarter Revenue Per Qu Reve

q1 853,436.00

q2 1,039,944.00 q3 1,254,197.00

q4 1,342,746.00

Total Revenue 4,490,323





VARIANCE

19,907

14,181

0

0

0

149,834

0

30,000

-6,000

24,000

0

0

173,834

0

0

0

16,456

0

16,456

0

30,000

0

-

-

-

0

0

0

127,379

0

127,379

173,835













Broadcom Corporation WACC Analysis

WACC= E/V * R(e) + D/V * R(D) * (1-Tc)

Cost of Equity:

Er=Rf + (Rm-Rf) x β

Risk-free Rate R(f) 3.6%

Market Return R(m): 23.50%

(S&P 500 2009)

Market Risk Premium 19.90%

(Rm-Rf)

Beta Coefficient: 1.31

(yahoo finance)

R(e)= 29.67%

Market Value of Equity

# of Outstanding Shares 512,645,000

Stock Price: $32.31

MVE (E): $16,563,559,950.00

Cost Of Debt (D): 0

V: $16,563,559,950.00

Market value of the firm (V)= Market value of debt + Market value of equity

E/V: 1.00

D/V: 0

Tax Rate (34%) 0.34

WACC 29.67%

According to the most recent 10-k (ending Dec-31-2009) Broadcom has no (0) interest bearing debt.



Ideal Capital Structure

Current Capital Structure:

Values Current Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6

R(e): 29.67% 29.67% 29.67% 29.67% 29.67% 29.67% 29.67%

E/V: 1 0.75 0.50 0.3333 0.25 0.10 0.00

D: 0 0 0 0 0 0 0

D/V: 0 0.25 0.50 0.6667 0.75 0.90 1.00

1-Tc: 0.66 0.66 0.66 0.66 0.66 0.66 0.66

WACC: 29.67% 22.25% 14.84% 9.89% 7.42% 2.97% 0.00%

As we have illustrated the cost of capital for the overall firm is high at 33.55%.

This result is due to the firm not having any interest bearing debt where they are leveraging

the firms equity to raise capital.

All required returns come from the cost of equity where the WACC equals R(e).

Since we know too much debt for a fi rm may lead to bankruptcy, Broadcom has avoided that risk.

In turn, as mentioned in the 10-k, there may be the need for the company to raise debt in the future

due to both internal and external pressures. As of now Broadcom has opted for the use of cash

and equity to fund investments but may be required to barrow at some point.

Therefore, we believe Broadcom, when necessary, will have to find the ideal structure #3

which technically represents a better balance.

Option 2 use of debt:

Values Current Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6

R(e): 29.67% 29.67% 29.67% 29.67% 29.67% 29.67% 29.67%

E/V: 99.80 0.75 0.50 0.3333 0.25 0.10 0.00

D: 5.57% 5.57% 5.57% 5.57% 5.57% 5.57% 5.57%

D/V: 0.20 0.25 0.50 0.6667 0.75 0.90 1.00

1-Tc: 0.66 0.66 0.66 0.66 0.66 0.66 0.66

WACC: 2961.80% 23.17% 16.67% 12.34% 10.17% 6.28% 3.68%

V: Total market value= $16,563,559,950 + $30,000,000 = $16,593,559,950

E: $16,563,559,950

D: 5.57% per Valubond 20 yr AA



Raising Capital Funds

Cost of Investment for project: $30,000,000

Ideal capital structure: If Broadcom were to float an offering it would be best to use 100% debt as

listed in our option #2

Equity 0

Amount $0

Stock Price: 32.31

#of Shares Issued 0

Debt 1.00

Amount $30,000,000

#Bonds Issued: 30,000

Indenture Explaination

# of Bonds Issued: 30,000 Bonds Issued 30,000

Amount of Issue: $30,000,000 The company has issued $30,000,00 worth of

Date of issue: 6/1/2010 The bonds will be sold on 6/1/2010 and will ma

Maturity: 6/1/2030 6/1/2030. Interest is payable annually on June

Face value: $1,000 year to the person in whose name the bond is

Coupon rate: 5.57% at close of business on May 15.

Annual coupon: $55.70 Each bondholder will receive $55.70 per bond

Offer price: $995.43

Coupon payment dates: 1-Jun Bonds not secured by specific assets.

Security: None

Sinking fund: None At any time/ do not have a "deferred call"

Call provision: The bonds have a "make-whole" call feature.Call price: Treasury rate Plus 0.15%

Rating: S&P AA The bonds are in the top grade of investment.

Moody's A Negative Covenants include:

* The firm cannot pledge any assets t

* The firm cannot sell or lease any mwithout approval of lender

Positive Covenants include:

*The company must periodically furnifinancial statements to lender.

* The firm must maintain any collater

good condition.





Annual Cost Calculator

Broadcom

2010 %

Sales $45,585,000 100.00%

Cost/ Goods Sold (COGS) 17,000,000 37.29%

Gross Profit $28,585,000 62.71%

Operating Expenses

Salary (Office & Overhead) $3,800,000 8.34% 100 Number Em

Payroll (Taxes etc.) 380,000 0.83% 0.10 Tax Rate

Outside Services 33,750 0.07% 25 Number Co

Supplies (Office Operation) 37,000 0.08%

Repairs/ Maintenance 113,000 0.25%

Advertising 325,000 0.71%

Vehicle, Delivery and Travel 225,010 0.49%

Accounting and Legal 127,500 0.28%

Building Lease 956,231 2.10%

Telephone/Internet/IT Service 275,000 0.60%

Utilities 79,000 0.17%

Insurance 1,254,891 2.75% 34 Percent

Taxes 809,908 1.78% 0.0283 Annual Rat

Transaction Fees (POS) 345,000 0.76%

Depreciation 1,258,974 2.76%

Litigation 2,963,025 6.50% 0.07 Percent

Professional Services 376,000 0.82%

Equipment Lease 1,003,645 2.20%

Armoured Car Contracts 475,356 1.04%

Service Continuation (RMA) 758,612 1.66%

Vehicle Lease 431,520 0.95% time (1 yr) Total Inves

Consulting Services 251,000 0.55% 1

Total Expenses $16,279,422 35.71% 0.75

0.5

0.25

Net Profit Before Tax 12,305,578

Income Taxes (13%) 1,599,725

Net Profit After Tax 10,705,853

Owner Draw/ Dividends 0

Adj. to Retained Earnings $10,705,853

More Demand Than Supply -



Base Price Discounted Price

Sale Price $85.00

Initial markup 100%

List Price $170.00

Units Request Order 200,000

Cash Discount 15%

Savings per base unit

Total Price

Lump sum total $34,000,000

Tax 34%

Shipping and handling $25,000

Total $45,585,000

Total Savings

Shipping & Handling per Units 1 $13.99 Minimum Orde

10 $32.99

100 $189.99

1000 $643.99

10000 $1,250.00 Maximum Orde

If Payment In Full Within 30 Days $38,751,000

If Payment In Full Within 60 Days $45,585,000

If Payment Greater Than 60 Days $3,190,950

7%

Total units paid



Samsung-United States

Termination Costs

Cost Items: Percent From Operating Expenses

Salary (Office & Overhead) 316,770.87 0.0834

Payroll (Taxes etc.) 3,167.71 0.0083

Outside Services 24.99 0.0007Supplies (Office Operation) 30.03 0.0008

Repairs/ Maintenance 280.11 0.0025

Advertising 2,317.10 0.0071

Vehicle, Delivery and Travel 1,110.66 0.0049

Accounting and Legal 356.61 0.0028

Building Lease 20,058.74 0.0210

Telephone/Internet/IT Service 1,658.99 0.0060

Utilities 136.91 0.0017

Insurance 34,545.39 0.0275

Taxes 14,389.63 0.0178

Depreciation 34,770.55 0.0276Parts:

Depreciation 34,770.55 0.0276

Assests:

Unearned Discount 6,834,000.00 0.1500

Equipment Lease 22,097.25 0.0220

One-time Costs:

Transaction Fees (POS) 2,611.06 0.0076

Professional Services 3,101.37 0.0082

Third Party Contracts:

Vehicle Lease 4,084.89 0.0095

Armoured Car Contracts 4,956.97 0.0104Litigation 192,596.63 0.0650

Consulting Services 1,382.06 0.0055

Wind Down Services:

Service Continuation (RMA) 12,624.60 0.02

Professional Services 273,801.00

Consulting to New Supplier 102,549.00

Risk @ 20% $22,792,500

Documents

Broadcom Financial Analysis