Balance Sheet

Exiting 4Q09, cash, cash equivalents, and short-term marketable securities were $1,929.4 million versus $1,906.5 million in 3Q09. Accounts receivable were $508.6 million in 4Q09 versus $541.6 million in 3Q09. Inventory was $362.4 million in 4Q09 versus $307.2 million in 3Q09.

Cash Flow

Cash flow from operations was $331.9 million in 3Q09 versus $236.5 million in 3Q09. Capital expenditure was $17.8 in 4Q09 versus $22.5 in 3Q09.

Share Repurchase Program/ Dividend

During 4Q09, BRCM repurchased approximately 7 million shares of stock in the quarter at an average price of $29.0 per share as part of its ongoing goal to offset dilution associated with the annual equity grants. The Company has $154.0 million remaining in share repurchase authorization.

On February 3, 2010, BRCM announced that its Board of Directors has adopted a dividend policy pursuant to which the Company intends to pay quarterly cash dividends on its common stock. The Board declared the first quarterly cash dividend of $0.08 per share payable to holders of the Company's common stock. The dividend was declared by the Board of Directors on January 27, 2010 and will be paid on March 8, 2010 to holders of the Company's Class A and Class B common stock of record at the close of business on February 19, 2010. The dividends declared will be paid from the U.S. domestic sources other than the Company's retained earnings and will be treated for accounting purposes as a reduction of shareholders' equity.

Acquisitions

On February 03, 2010, BRCM announced that it has signed a definitive agreement to acquire Teknovus, a leading supplier of Ethernet Passive Optical Network (EPON) chipsets and software. EPON is a technology providing broadband services up to 10 Gigabits per second over fiber optic cables. EPON represents approximately 94% of the FTTx (e.g. Fiber-to-the-Home) connections in the Asia Pacific region. According to the Dell'Oro Group, the Asia Pacific PON market is expected to grow from 22.8 million to 94.5 million subscribers by 2014, a CAGR of 33% (2009-2014)(1).

On November 30, 2009, BRCM announced that it had signed a definitive agreement to acquire Dune Networks, a privately-held company that develops switch fabric solutions for data center networking equipment.

In connection with the acquisition, Broadcom expects to pay approximately $178 million, net of cash assumed from Dune Networks, to acquire all of the outstanding shares of capital stock and other rights of Dune Networks. The purchase price will be paid in cash, apart from a portion of such purchase price attributable to unvested employee stock options that will be paid in Broadcom restricted stock units. Excluding any purchase accounting related adjustments and fair value measurements, Broadcom expects the acquisition of Dune Networks to be neutral to slightly accretive to earnings per share in 2010. The closing, which is expected to occur by the end of Broadcom's first quarter ending March 31, 2010, remains subject to customary closing conditions.

• General risks: BRCM considers equity, such as options and restricted stock, an important part of its employee compensation plan, and expects it to result in higher options-related expenses as compared with other technology companies.
• Maturing communications infrastructure markets: With networking technology widely deployed over the last decade, the longer-term growth outlook for communications infrastructure spending remains mixed.
• Delay in execution: Next-generation Wi-Fi technology continues to be hampered as the new standard equipment companies are not eager to sell a pre-standard product into the market for the fear of increasing confusion.