Motorola 2010 Annual Report Download - page 56

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Contractual Obligations and Other Purchase Commitments
Summarized in the table below are the Company’s obligations and commitments to make future payments
under long-term debt obligations (assuming earliest possible exercise of put rights by holders), lease obligations,
purchase obligations, tax obligations and other obligations as of December 31, 2010.
Payments Due by Period
(in millions) Total 2011 2012 2013 2014 2015
Uncertain
Timeframe Thereafter
Long-Term Debt Obligations $2,660 $ 605 $405 $ 5 $ 4 $ 4 $ — $1,637
Purchase Obligations 586 482 67 36 1 — — —
Lease Obligations 555 205 146 78 54 31 — 41
Tax Obligations 234 100 — — — — 134 —
Other Obligations 100 — — — — 100 — —
Total Contractual Obligations $4,135 $1,392 $618 $119 $59 $135 $134 $1,678
Amounts included represent firm, non-cancelable commitments.
Summarized in the table below are the Company’s obligations and commitments to make future payments as of
January 4 2011, following the Separation of Motorola Mobility.
Payments Due by Period
(in millions) Total 2011 2012 2013 2014 2015
Uncertain
Timeframe Thereafter
Long-Term Debt Obligations $2,660 $605 $405 $ 5 $ 4 $ 4 $ — $1,637
Lease Obligations 343 124 86 52 37 21 — 23
Tax Obligations 209 100 — — — — 109 —
Purchase Obligations 106 63 26 17 — — — —
Other Obligations 100 — — — — 100 — —
Total Contractual Obligations $3,418 $892 $517 $74 $41 $125 $109 $1,660
Amounts included represent firm, non-cancelable commitments.
Long-Term Debt Obligations: All of the publicly-held long-term debt, including the current portion of long-
term debt, remained with Motorola Solutions following the Separation of Motorola Mobility and totaled
$2.7 billion.
Lease Obligations: The Company owns most of its major facilities, but does lease certain office, factory and
warehouse space, land, and information technology and other equipment, principally under non-cancelable
operating leases. Following the Separation of Motorola Mobility, the Motorola Solutions’ future minimum lease
obligations, net of minimum sublease rentals, totaled $343 million. Rental expense, net of sublease income, was
$131 million in 2010, $146 million in 2009 and $171 million in 2008.
Tax Obligations: Following the Separation of Motorola Mobility, Motorola Solutions has approximately
$209 million of unrecognized income tax benefits relating to multiple tax jurisdictions and tax years. 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 change within the next 12 months. The associated net tax impact on the effective tax
rate, exclusive of valuation allowance changes, is estimated to be in the range of a $50 million tax charge to a $75
million tax benefit, with cash payments not expected to exceed $100 million.
Purchase Obligations: The Company has entered into agreements for the purchase of inventory, license of
software, promotional activities, and research and development, which are firm commitments and are not
cancelable. Following the Separation of Motorola Mobility, the Motorola Solutions’ obligations in connection with
these agreements run through 2013, and the total payments expected to be made by the Company under these
agreements totaled $106 million.
The Company enters into a number of arrangements for the sourcing of supplies and materials with take-or-pay
obligations. Following the Separation of Motorola Mobility, the Motorola Solutions’ obligations with these
suppliers run through 2013 and total a minimum purchase obligation of $83 million. The Company does not