Google Breaks Down $12.4 Billion Motorola Price Tag

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Google assessed Motorola Mobility's 17,000-plus patent portfolio at approximately $5.5 billion, while it attributed just $730 million of the $12.4 billion total acquisition price to Moto's customer relationships.

Meanwhile, $2.9 billion of the deal price was cash acquired. Google accounted for $2.6 billion of the total as goodwill and $670 million to other net assets acquired.

Google disclosed the accounting in a 10-Q filing Tuesday with the Securities and Exchange Commission. The company said the primary areas of the Motorola purchase price that are not yet finalized are related to "certain legal matters, income taxes and residual goodwill."

The goodwill of $2.6 billion is primarily attributed to the synergies expected to arise after the acquisition, Google said, and the amount of goodwill expected to be deductible for tax purposes is zero.

As part of the acquisition, Google also assumed $401 million of unvested Motorola stock options and restricted stock units, which Google will record as stock-based compensation expense over approximately 2.9 years. Google's transaction costs to buy Motorola Mobility were approximately $50 million, which were recorded as general and administrative expense as incurred.

Last week Google reported operating results for Motorola Mobility from the time the deal closed -- on May 22 -- through June 30, with losses for both Home and Mobile Devices units in shortened period. Motorola revenue was $1.25 billion for the five-week span, with $843 million from the mobile segment and $407 million from the cable-focused home segment. The operating loss for Motorola was $233 million, with $192 million for the mobile segment and $41 million for Home.

Google has hired Marwan Fawaz, previously chief technology officer of Charter Communications, to run the Home unit. Analysts said the move may have been aimed at dispelling cable operators' fears that it is abandoning the cable-technology sector.

Google has pledged to run Motorola Mobility as an independent entity. Executive chairman Eric Schmidt, speaking at Google's annual shareholder meeting last month, said the deal was driven as much by Motorola's products and talent as it was for the large patent portfolio.

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