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46 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
development, and (ii) Government and Enterprise Mobility Solutions driven by increased investment in new
technologies.
Other Charges (Income)
The Company recorded net charges of $96 million in Other charges (income) in 2004, compared to net other
income of $34 million in 2003. The net charges of $96 million in 2004 primarily consisted of: (i) a $125 million
charge for goodwill impairment, related to the sensor business that was divested in 2005, and (ii) $34 million of
charges for IPR&D related to the acquisitions of MeshNetworks, Inc., CRISNET, Inc., Quantum Bridge and Force
Computers. These items were partially offset by: (i) $44 million in income from the reversal of financing receivable
reserves due to the partial collection of the previously-uncollected receivable from Telsim, and (ii) $15 million in
net reorganization of businesses reversals for reserves no longer needed. The reorganization of businesses costs are
discussed in further detail in the ""Reorganization of Businesses'' section below.
The net other income of $34 million in 2003 primarily consisted of: (i) $69 million in income from the
reversal of accruals no longer needed due to a settlement with the Company's insurer on items related to previous
environmental claims, (ii) $59 million in income due to the reassessment of remaining reserve requirements as a
result of a litigation settlement agreement with The Chase Manhattan Bank regarding Iridium, and (iii) $41 million
in income from the sale of Iridium-related assets that were previously written down. These items were partially
offset by: (i) a $73 million impairment charge relating to goodwill, (ii) $32 million of IPR&D charges, and (iii) a
$23 million net charge for reorganization of businesses. The reorganization of businesses costs are discussed in
further detail in the ""Reorganization of Businesses'' section below.
Net Interest Expense
Net interest expense was $199 million in 2004, compared to $294 million in 2003. Net interest expense in
2004 included interest expense of $353 million, partially offset by interest income of $154 million. Net interest
expense in 2003 included interest expense of $423 million, partially offset by interest income of $129 million. The
decrease in net interest expense in 2004 compared to 2003 reflects: (i) a reduction in total debt during 2004,
(ii) benefits derived from fixed-to-floating interest rate swaps, and (iii) an increase in interest income due to higher
average cash, cash equivalents and Sigma Funds balances.
Gains on Sales of Investments and Businesses
Gains on sales of investments and businesses were $460 million in 2004, compared to $539 million in 2003.
The 2004 net gains were primarily: (i) a $130 million gain on the sale of the Company's remaining shares in
Broadcom Corporation, (ii) a $122 million gain on the sale of a portion of the Company's shares in Nextel,
(iii) an $82 million gain on the sale of a portion of the Company's shares in Telus Corporation, and (iv) a
$68 million gain on the sale of a portion of the Company's shares in Nextel Partners.
The 2003 net gains were primarily: (i) a $255 million gain on the sale of a portion of the Company's shares in
Nextel, (ii) an $80 million gain on the sale of the Company's shares in Symbian Limited, (iii) a $65 million gain
on the sale of the Company's shares in UAB Omnitel of Lithuania, and (iv) a $61 million gain on the sale of a
portion of the Company's shares in Nextel Partners.
Other
Charges classified as Other, as presented in Other income (expense), were $141 million in 2004, compared to
$142 million in 2003. The $141 million of charges in 2004 primarily were: (i) charges of $81 million for costs
related to the redemption of debt, (ii) foreign currency losses of $44 million, and (iii) $36 million of investment
impairment charges.
The $142 million of charges in 2003 primarily related to: (i) $96 million of investment impairment charges,
and (ii) foreign currency losses of $73 million.