Motorola 2007 Annual Report Download - page 124

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employees. The 2005 additional charges of $86 million represented the severance costs for approximately
2,600 employees, of which 1,300 were direct employees and 1,300 were indirect employees. The adjustments of
$14 million represented reversals of accruals no longer needed.
During 2005, approximately 1,400 employees, of which 300 were direct employees and 1,100 were indirect
employees, were separated from the Company. The $60 million used in 2005 reflected cash payments to these
separated employees. The remaining accrual of $53 million was included in Accrued liabilities in the Company’s
consolidated balance sheets at December 31, 2005.
14. Acquisitions and Related Intangibles
The Company accounts for acquisitions using purchase accounting with the results of operations for each
acquiree included in the Company’s consolidated financial statements for the period subsequent to the date of
acquisition. The pro forma effects of these acquisitions on the Company’s consolidated financial statements were
not significant individually nor in the aggregate.
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. Historical pricing, margins and expense levels, where applicable, were used in the valuation of the
in-process products. The in-process research and development acquired will have no alternative future uses if the
products are not feasible.
The developmental products for the companies acquired have varying degrees of timing, technology, costs-to-
complete and market risks throughout final development. If the products fail to become viable, the Company will
unlikely be able to realize any value from the sale of incomplete technology to another party or through internal
re-use. The risks of market acceptance for the products under development and potential reductions in projected
sales volumes and related profits in the event of delayed market availability for any of the products exist. Efforts to
complete all developmental products continue and there are no known delays to forecasted plans except as
disclosed.
The following is a summary of significant acquisitions in 2007, 2006 and 2005:
Quarter
Acquired Consideration, net Form of
Consideration
In-Process
Research and
Development
Charge
2007 Acquisitions
Symbol Technologies, Inc. Q1 $3,528 Cash $95
Good Technology, Inc. Q1 $ 438 Cash —
Netopia, Inc. Q1 $ 183 Cash —
Terayon Communication Systems, Inc. Q3 $ 137 Cash —
2006 Acquisitions
Broadbus Technologies, Inc. Q3 $ 181 Cash $12
TTP Communications plc Q3 $ 193 Cash $17
Kreatel Communications AB Q1 $ 108 Cash $ 1
2005 Acquisitions
No significant acquisitions — — — —
116