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Technology Stocks : Broadcom (BRCM) -- Ignore unavailable to you. Want to Upgrade?

To: engineer who wrote (6448)	9/13/2006 4:32:38 PM
From: FR1	Read Replies (3) \| Respond to of 6531

Much to do with nothing. I can't help feeling that this is a lot of ranting and raving about nothing significant. Investors are focusing on who is boss and how the growth and performance of the company looks going forward. If they are going to put the CEO in jail then that is a big issue. If they are going to be fined an enormous amount of money so that they cannot function properly then that is a big issue. It doesn't look like either of these items are going to happen. Basically what has happened is that the SEC, who failed to do their job in the past, suddenly woke up one day and told everybody that they are going to inspect all the historical backdating records carefully. So everybody is straightening out their historical records and becoming compliant. It seems to me that people buy a company because it has good leadership and good growth prospects going forward. BRCM has both. What do you think? ***************************************** Form 8-K for BROADCOM CORP ---------------------------------------------- 12-Sep-2006 Non-Reliance on Previous Financials, Audits or Interim Review, Financial Statements Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. As previously announced, on May 18, 2006 Broadcom Corporation commenced a voluntary review of its equity award practices. The review, which covers option grants and other equity awards since the company's initial public offering in 1998, is being directed by the Audit Committee of the Board of Directors with the assistance of outside counsel. At this time, the review has not been completed and is ongoing, and the Audit Committee has not reached any final conclusions. On July 14, 2006 Broadcom announced that its Audit Committee, with the concurrence of the company's outside counsel and Ernst & Young LLP, had determined that the company's financial statements for the years 2000-2005 and for the first quarter of 2006 would need to be restated and should not be relied upon pending completion of the restatements. That determination reflected the conclusion that, pursuant to the requirements of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), the accounting measurement dates for certain stock option grants awarded during the years 2000-2002 differed from the measurement dates previously used in accounting for such awards. Based upon the grants identified through July 14th and the review as conducted through that date, the company stated that it expected to record additional non-cash stock-based compensation expense then estimated to be in excess of $750 million, substantially all of which would be recorded in the years 2000-2003. The company further explained that because its review was ongoing, it was possible that additional issues concerning equity award accounting measurement dates or the affected time periods might be identified and result in additional non-cash stock-based compensation or other expenses. While the equity award review is still ongoing, Broadcom has identified additional stock option grants for which the measurement dates for purposes of APB 25 differ from those originally used to record such awards. As a consequence, the company now expects that the aggregate additional non-cash stock-based compensation expense to be recorded under APB 25 when it completes the restatement of its financial statements will be at least twice the amount previously estimated and could be substantially more depending upon the resolution of certain accounting issues. The incremental non-cash stock-based compensation expense relates to transactions or fiscal periods as to which the review had not commenced or had not been completed prior to the July 14th announcement. The grants at issue were awarded between June 1998 and May 2003. A substantial majority of the aggregate additional non-cash stock-based compensation expense to be recorded by the company as a result of the equity award review will be expensed in 2003 and prior periods. On September 6, 2006 the Audit Committee determined, with the concurrence of its advisers, including Ernst & Young, that the financial statements for 1998 and 1999 should also be restated and that the company's financial statements and the related reports of Ernst & Young, and all earnings press releases and similar communications issued by the company, relating to periods after 1997 should not be relied upon pending completion of the restatements. Broadcom is in the process of determining the appropriate measurement dates for the additional option grants at issue, and is working with outside counsel and Ernst & Young to complete that process as soon as possible. The company expects that the non-cash stock-based compensation expenses will be offset by matching credits to its paid-in capital account and that its net shareholders' equity, cash position and financial resources will remain effectively unchanged by the additional non-cash stock-based compensation expense. Additional non-cash stock-based compensation expense will be recorded in the first quarter of 2006 and thereafter pursuant to the provisions of Statement of Financial Accounting Standards No. 123R, Share-Based Payment (SFAS 123R), which the company adopted effective January 1, 2006. The preliminary expense amounts shown above have been estimated in accordance with the provisions of APB 25 and related interpretations and do not reflect additional expense amounts to be determined based upon the provisions of SFAS 123R or Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, or any additional accounting adjustments recorded in the first quarter of 2006 or prior periods resulting from other accounting standards or rules that may impact the periods under review. Broadcom has not yet completed its assessment of the amount or timing of such additional adjustments or of the tax implications of any adjustments, which adjustments could be significant. On September 8, 2006 Broadcom issued a related press release supplementing its preliminary report on the equity award review and announcing the additional planned restatements. The full text of the press release is attached as Exhibit 99.1 to this report and is hereby incorporated by reference herein. Item 9.01 Financial Statements and Exhibits. (d) Exhibits 99.1 Press release dated September 8, 2006 of the Registrant.