Motorola 2004 Annual Report Download - page 131

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123
MOTOROLA INC. AND SUBSIDIARIES NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS(Dollars in millions, except as noted)
The results of operations of Winphoria have been included in the Global Telecom Solutions segment in the
Company's consolidated Ñnancial statements subsequent to the date of acquisition. The pro forma eÅects of this
acquisition on the Company's consolidated Ñnancial statements were not signiÑcant.
Synchronous
In January 2002, the Broadband Communications segment acquired Synchronous, Inc. (""Synchronous''), a
leading provider of Ñber optic systems for video, data and voice transmission. Approximately 16.2 million shares of
the Company's common stock were exchanged for Synchronous' outstanding shares. The total purchase price was
$270 million, which includes transaction costs.
The acquisition was accounted for using the purchase method of accounting. The Company recorded
$194 million in goodwill, an $11 million charge for acquired in-process research and development and $60 million
in other intangibles. At the date of acquisition, a total of four projects were in process. The average risk adjusted
rate used to value these projects was 40%. The acquired in-process research and development is included in Other
Charges in the Company's consolidated statements of operations for the year ended December 31, 2002. Goodwill
and other intangible assets are included in Other Assets in the Company's consolidated balance sheets. Other
intangibles are being amortized over periods ranging from 7 to 10 years on a straight-line basis.
Intangible Assets
Amortized intangible assets, excluding goodwill were comprised of the following:
2004
2003
Gross
Gross
Carrying Accumulated
Carrying Accumulated
December 31
Amount Amortization
Amount Amortization
Intangible assets:
Licensed technology $112 $102 $102 $101
Completed technology 395 242 359 203
Other intangibles 72 23 27 11
$579 $367 $488 $315
Amortization expense on intangible assets was $52 million, $101 million and $66 million for the years ended
December 31, 2004, 2003 and 2002, respectively. Future amortization expense is estimated to be as follows:
2005Ì$57 million; 2006Ì$52 million; 2007Ì$45 million; 2008Ì$31 million; and 2009Ì$22 million.
The following tables display a rollforward of the carrying amount of goodwill from January 1, 2003 to
December 31, 2004, by business segment:
January 1, December 31,
Segment 2004 Acquired Adjustments 2004
Personal Communications $ 17 $ Ì $ Ì $ 17
Global Telecom Solutions 97 Ì Ì 97
Commercial, Government and Industrial Solutions 123 134 Ì 257
Integrated Electronic Systems 71 59 Ì 130
Broadband Communications 782 Ì Ì 782
Other Products 125 Ì (125) Ì
$1,215 $193 $(125) $1,283