Motorola 2007 Annual Report Download - page 96

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During the first half of 2005, the Company sold 22.5 million shares of common stock of Nextel
Communications, Inc. (“Nextel”). The Company received approximately $679 million in cash and realized a pre-
tax gain of $609 million from these sales.
On August 12, 2005, Sprint Corporation completed its merger (the “Sprint Nextel Merger”) with Nextel. In
connection with the Sprint Nextel Merger, Motorola received $46 million in cash, 31.7 million voting shares and
37.6 million non-voting shares of Sprint Nextel, in exchange for its remaining 54.7 million shares of Nextel. As a
result of this transaction, the Company realized a gain of $1.3 billion, comprised of a $1.7 billion gain recognized
on the receipt of cash and the 69.3 million shares of Sprint Nextel in exchange for its shares of Nextel, net of a
$418 million loss recognized on its hedge of 25 million shares of common stock of Nextel.
During the fourth quarter of 2005, the Company elected to settle variable share purchase agreements by
delivering 30.3 million shares of Sprint Nextel common stock, with a value of $725 million, to the counterparties
and selling the remaining 1.4 million Sprint Nextel common shares in the open market. The Company received
aggregate cash proceeds of $391 million and realized a loss of $70 million in connection with the settlement and
sale.
On December 14, 2004, in connection with the announcement of the definitive agreement relating to the
Sprint Nextel Merger, Motorola, a Motorola subsidiary and Nextel entered into an agreement pursuant to which
Motorola and its subsidiary agreed to not dispose of their 29.7 million non-voting shares of Nextel (which became
37.6 million shares of non-voting common stock of Sprint Nextel issued in exchange for Nextel non-voting
common stock pursuant to the Sprint Nextel Merger) for a period of no longer than two years. In exchange for
this agreement, Nextel paid Motorola a fee of $50 million in 2005.
Accounts Receivable
Accounts receivable, net, consists of the following:
December 31 2007 2006
Accounts receivable $5,508 $7,587
Less allowance for doubtful accounts (184) (78)
$5,324 $7,509
Inventories
Inventories, net, consist of the following:
December 31 2007 2006
Finished goods $1,737 $1,796
Work-in-process and production materials 1,470 1,782
3,207 3,578
Less inventory reserves (371) (416)
$2,836 $3,162
Other Current Assets
Other current assets consists of the following:
December 31 2007 2006
Costs and earnings in excess of billings $ 995 $ 505
Contractor receivables 960 1,349
Contract related deferred costs 763 369
Other 847 710
$3,565 $2,933
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