Motorola 2009 Annual Report Download - page 109

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The IRS is currently examining the Company’s 2006 and 2007 tax years. The Company also has several state
and non-U.S. audits pending. A summary of open tax years by major jurisdiction is presented below:
Jurisdiction Tax Years
United States 2004—2009
Brazil 2004—2009
China 2000—2009
France 2004—2009
Germany 2005—2009
India 1996—2009
Israel 2007—2009
Japan 2003—2009
Malaysia 1998—2009
Singapore 1999—2009
United Kingdom 2007—2009
Above amounts include federal as well as state, provincial or similar local jurisdictions, as applicable.
Although the final resolution of the Company’s global tax disputes is uncertain, based on current
information, in the opinion of the Company’s management, the ultimate disposition of these matters will not have
a material adverse effect on the Company’s consolidated financial position, liquidity or results of operations.
However, an unfavorable resolution of the Company’s global tax disputes could have a material adverse effect on
the Company’s consolidated financial position, liquidity or results of operations in the periods in which the
matters are ultimately resolved.
Based on the potential outcome of the Company’s global tax examinations, the expiration of the statute of
limitations for specific jurisdictions, or the continued ability to satisfy tax incentive obligations, it is reasonably
possible that the unrecognized tax benefits will decrease within the next 12 months. The associated net tax
benefits, which would favorably impact the effective tax rate, excluding changes to valuation allowances, are
estimated to be in the range of $0 to $225 million, with cash payments in the range of $0 to $125 million.
At December 31, 2009, the Company had $25 million and $15 million accrued for interest and penalties,
respectively, on unrecognized tax benefits. At December 31, 2008, the Company had $47 million and $11 million
accrued for interest and penalties, respectively, on unrecognized tax benefits.
7. Retirement Benefits
Pension Benefit Plans
The Company’s noncontributory pension plan (the ‘‘Regular Pension Plan’’) covers U.S. employees who
became eligible after one year of service. The benefit formula is dependent upon employee earnings and years of
service. Effective January 1, 2005, newly-hired employees were not eligible to participate in the Regular Pension
Plan. The Company also provides defined benefit plans which cover non-U.S. employees in certain jurisdictions,
principally the United Kingdom, Germany, Ireland, Japan and Korea (the ‘‘Non-U.S. Plans’’). Other pension plans
are not material to the Company either individually or in the aggregate.
The Company has a noncontributory supplemental retirement benefit plan (the ‘‘Officers’ Plan’’) for its
officers elected prior to December 31, 1999. The Officers’ Plan contains provisions for vesting and funding the
participants’ expected retirement benefits when the participants meet the minimum age and years of service
requirements. Elected officers who were not yet vested in the Officers’ Plan as of December 31, 1999 had the
option to remain in the Officers’ Plan or elect to have their benefit bought out in restricted stock units. Effective
December 31, 1999, newly elected officers are not eligible to participate in the Officers’ Plan. Effective June 30,
2005, salaries were frozen for this plan.
The Company has an additional noncontributory supplemental retirement benefit plan, the Motorola
Supplemental Pension Plan (‘‘MSPP’’), which provides supplemental benefits to individuals by replacing the
Regular Pension Plan benefits that are lost by such individuals under the retirement formula due to application of
the limitations imposed by the Internal Revenue Code. However, elected officers who are covered under the
Officers’ Plan or who participated in the restricted stock buy-out are not eligible to participate in MSPP. Effective
January 1, 2007, eligible compensation was capped at the IRS limit plus $175,000 (the ‘‘Cap’’) or, for those