Motorola 2009 Annual Report Download - page 60

52 MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Capital Expenditures: Capital expenditures were $275 million in 2009, compared to $504 million in 2008
and $527 million in 2007. The Company’s emphasis in making capital expenditures is to focus on strategic
investments driven by customer demand and new design capability.
Sales of Investments and Businesses: The Company received $315 million in proceeds from the sales of
investments and businesses in 2009, compared to proceeds of $93 million in 2008 and proceeds of $411 million
in 2007. The $315 million in proceeds in 2009 was primarily related to: (i) the sale of the Company’s former
biometrics business, which was sold during the first quarter of 2009, and (ii) proceeds received in connection
with the sales of certain of the Company’s equity investments. The $93 million in proceeds in 2008 was primarily
comprised of net proceeds received in connection with the sales of certain of the Company’s equity investments.
Short-Term Investments: At December 31, 2009, the Company had $2 million in short-term investments
(which are highly-liquid fixed-income investments with an original maturity greater than three months but less
than one year), compared to $225 million of short-term investments at December 31, 2008.
Investments: In addition to available cash and cash equivalents, the Sigma Fund balances (current and
non-current) and short-term investments, the Company views its investments as an additional source of liquidity.
The majority of these securities are available-for-sale and cost-method investments in technology companies. The
fair market values of these securities are subject to substantial price volatility. In addition, the realizable values of
these securities are subject to market and other conditions. At December 31, 2009, the Company’s
available-for-sale equity securities portfolio had an approximate fair market value of $147 million, comprised of a
cost basis of $37 million and a net unrealized gain of $110 million. At December 31, 2008, the Company’s
available-for-sale equity securities portfolio had an approximate fair market value of $117 million, comprised of a
cost basis of $114 million and a net unrealized gain of $3 million.
Financing Activities
Net cash used for financing activities was $210 million in 2009, compared to $645 million used in 2008 and
$3.3 billion used in 2007. Cash used for financing activities in 2009 was primarily: (i) $132 million of cash used
for the repurchase of long-term debt, (ii) $114 million of cash used to pay dividends, and (iii) $86 million of cash
used for the repayment of short-term borrowings, partially offset by $116 million of cash received from the
issuance of common stock in connection with the Company’s employee stock option plans and employee stock
purchase plan.
Cash used for financing activities in 2008 was primarily: (i) $453 million of cash used to pay dividends,
(ii) $225 million of cash used for the repayment and repurchase of debt, (iii) $138 million of cash used to
purchase approximately 9.0 million shares of the Company’s common stock under the share repurchase program,
all during the first quarter of 2008, (iv) $90 million in distributions to discontinued operations, and
(v) $50 million of net cash used for the repayment of short-term borrowings, partially offset by: (i) $158 million
of proceeds from the termination of interest rate swaps, and (ii) $145 million of net cash received from the
issuance of common stock in connection with the Company’s employee stock option plans and employee stock
purchase plan.
Short-Term Debt: At December 31, 2009, the Company’s outstanding notes payable and current portion of
long-term debt was $536 million, compared to $92 million at December 31, 2008. During the fourth quarter of
2009, $527 million of 7.625% Senior Notes due November 15, 2010 were reclassified to current portion of
long-term debt.
Net cash used for the repayment of short-term borrowings was $86 million in 2009, compared to repayment
of $50 million of short-term borrowings in 2008.
In March 2008, the Company repaid, at maturity, the entire $114 million outstanding of 6.50% Senior
Notes due March 1, 2008. In October 2008, the Company repaid, at maturity, the entire $84 million outstanding
of 5.80% Notes due October 15, 2008.
Long-term Debt: At December 31, 2009, the Company had outstanding long-term debt of $3.4 billion,
compared to $4.1 billion outstanding at December 31, 2008.
During the first quarter of 2009, the Company repurchased $199 million of its outstanding long-term debt
for an aggregate purchase price of $133 million, including $4 million of accrued interest. The $199 million of
long-term debt repurchased included principal amounts of: (i) $11 million of the $358 million then outstanding of
7.50% Debentures due 2025 (the ‘‘2025 Debentures’’), (ii) $20 million of the $399 million then outstanding of