Motorola 2007 Annual Report Download - page 127

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for the year ended December 31, 2007, representing write-downs of: (i) $81 million of intangible assets, primarily
relating to completed technology and other intangibles, and (ii) $8 million of property, plant and equipment.
The results of operations of TTPCom have been included in the Mobile Devices segment in the Company’s
consolidated financial statements subsequent to the date of acquisition. The pro forma effects of this acquisition on
the Company’s consolidated financial statements were not significant.
Kreatel Communications AB
In February 2006, the Company acquired Kreatel Communications AB (“Kreatel”), a leading developer of
innovative Internet Protocol (“IP”) based digital set-tops and software, for $108 million in cash. The Company
recorded $79 million in goodwill, a portion of which is expected to be deductible for tax purposes, a $1 million
charge for acquired in-process research and development costs, and $22 million in identifiable intangible assets.
The acquired in-process research and development will have no alternative future uses if the products are not
feasible. At the date of the acquisition, a total of two projects were in process. These projects have since been
completed. The average risk adjusted rate used to value these projects was 19%. The allocation of value to in-
process research and development was determined using expected future cash flows discounted at average risk
adjusted rates reflecting both technological and market risk as well as the time value of money. These research and
development costs were expensed at the date of acquisition. Intangible assets are included in Other assets in the
Company’s consolidated balance sheets. The intangible assets are being amortized over periods ranging from 2 to
4 years on a straight-line basis.
The results of operations of Kreatel have been included in the Home and Networks Mobility segment in the
Company’s consolidated financial statements subsequent to the date of acquisition. The pro forma effects of this
acquisition on the Company’s consolidated financial statements were not significant.
Intangible Assets
Amortized intangible assets, excluding goodwill were comprised of the following:
December 31
Gross
Carrying
Amount Accumulated
Amortization
Gross
Carrying
Amount Accumulated
Amortization
2007 2006
Intangible assets:
Completed technology $1,234 $484 $486 $334
Patents 292 69 27 12
Customer-related 264 58 65 21
Licensed technology 123 109 119 107
Other intangibles 166 99 193 62
$2,079 $819 $890 $536
Amortization expense on intangible assets, which is included within Other and Eliminations, was $369 million,
$100 million and $67 million for the years ended December 31, 2007, 2006 and 2005, respectively. As of
December 31, 2007 future amortization expense is estimated to be $318 million for 2008, $287 million in 2009,
$268 million in 2010, $255 million in 2011, and $62 million in 2012.
Amortized intangible assets, excluding goodwill by business segment:
December 31
Gross
Carrying
Amount Accumulated
Amortization
Gross
Carrying
Amount Accumulated
Amortization
2007 2006
Mobile Devices $36 $36 $154 $ 41
Home and Networks Mobility 712 455 588 430
Enterprise Mobility Solutions 1,331 328 148 65
$2,079 $819 $890 $536
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