Motorola 2012 Annual Report Download

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2012
ANNUAL
REPORT

Table of contents

  • Page 1
    2012 ANNUAL REPORT

  • Page 2
    HELPING PEOPLE BE THEIR BEST IN THE MOMENTS THAT MATTER OUR COMMUNICATION SOLUTIONS SPAN INFRASTRUCTURE, DEVICES, SERVICES AND SOFTWARE TO HELP OUR GOVERNMENT AND ENTERPRISE CUSTOMERS BE MORE EFFICIENT AND MORE EFFECTIVE.

  • Page 3
    ... Psion to strengthen our enterprise mobile-computing portfolio with solutions for manufacturing, ports and warehousing. • We continued to invest in our core value of innovation, funding more than $1 billion in research and development. • The value of our stock increased 20 percent in 2012...

  • Page 4
    ...Chief Executive Officer (In millions, except per share amounts) 2012 FINANCIAL HIGHLIGHTS OPERATING EARNINGS $8,698 $1,064 NONGAAP* REVENUES $7,617 $8,203 $1,373 $1,503 $1,256 23% NON-GAAP EARNINGS PER SHARE GROWTH* $751 GAAP $858 $2.7B IN CAPITAL RETURNED TO SHAREHOLDERS 2010 2011 2012...

  • Page 5
    ..., Schaumburg, Illinois 60196 (847) 576-5000 (Registrant's telephone number) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Common Stock, $.01 Par Value per Share New York Stock Exchange Chicago Stock Exchange Securities...

  • Page 6

  • Page 7
    ...Mine Safety Disclosures Executive Officers of the Registrant PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6. Selected Financial Data Item 7. Management's Discussion and Analysis of Financial Condition and Results of...

  • Page 8

  • Page 9
    ...data capture products, wireless local area network ("WLAN") and integrated digital enhanced network ("iDEN") infrastructure and software. Service revenues included in the Enterprise segment are primarily maintenance contracts associated with the above products. The Company is a corporation organized...

  • Page 10
    ..., which tends to focus on our largest accounts, and sales through our channel partner program. Our channel partners include distributors, value added resellers and independent software vendors. Resellers and distributors each have their own sales organizations that complement and extend the reach of...

  • Page 11
    ... segment designs, manufactures, sells and provides services around rugged and enterprise-grade mobile computers, including tablets, data capture devices, security products and applications, and WLAN and iDEN infrastructure. These are sold to a wide range of enterprise customers, including those...

  • Page 12
    Other Information Backlog During 2012, we changed our methodology for reporting backlog. Prior to the first quarter of 2012, we excluded from backlog service orders such as maintenance and extended warranty contracts. Additionally, certain product and system installation labor orders that were for ...

  • Page 13
    ... Intellectual Property Matters Patent protection is extremely important to our operations. We have an extensive U.S. and international portfolio of patents relating to our products, systems and technologies, including research developments in radio frequency technology and circuits, wireless network...

  • Page 14
    ... financial results. Generally, our contracts do not include a right of return, other than for standard warranty provisions; however, certain distributor partners within the commercial enterprise markets do maintain limited stock rotation rights. Due to buying patterns in the markets we serve, sales...

  • Page 15
    ... be obtained without charge by contacting Investor Relations, Motorola Solutions, Inc., Corporate Offices, 1303 East Algonquin Road, Schaumburg, Illinois 60196, E-mail: [email protected]. Our Annual Report on Form 10-K and Definitive Proxy Statement may also be requested in hardcopy...

  • Page 16
    ... with equipment purchases or the provision of managed services. In response to reduced tax revenue at the state and local government level and ongoing tightening of credit for certain enterprise customers, these types of requests have increased in volume and scope. Motorola Solutions through its...

  • Page 17
    ...instruments. Although the contracts are distributed among several leading financial institutions, all of whom presently have investment grade credit ratings, the default by one or more counterparties could have an adverse impact on our financial statements. • Returns on Pension and Retirement Plan...

  • Page 18
    ... be cancelable on short notice with limited penalties. The termination of funding for a government program could result in a loss of anticipated future revenue attributable to that program, which could have an adverse impact on our profitability. The expansion of our business into managed services...

  • Page 19
    ... may seek alternative means to deploy public safety LTE networks if a centralized architecture inhibits states' ability to operationally control its first responder agencies. Our employees, customers, suppliers and outsource partners are located throughout the world and, as a result, we face risks...

  • Page 20
    ...access funds and other credit related products. In addition, we may avoid taking actions that would otherwise benefit us, such as engaging in certain acquisitions, that would negatively impact our credit rating. Changes in our effective tax rate may have a negative impact on future operating results...

  • Page 21
    ..., which might result in greater product returns, service problems and warranty claims and regulatory compliance issues and could harm our business, financial condition and results of operations. Failure of our suppliers, subcontractors, distributors, resellers and representatives to use acceptable...

  • Page 22
    ... at compromising our intellectual property and our customer information, referred to as advanced persistent threats. We implemented a number of significant business systems upgrades in 2012 and plan to implement a number of additional significant business systems upgrades in 2013 which, if defective...

  • Page 23
    ... from Motorola Mobility to use the Motorola Marks as part of our corporate name and in connection with the manufacture, sale, and marketing of our current products and services. The license of the Motorola Marks is important to us because of the reputation of the Motorola brand for our products and...

  • Page 24
    ... of key employees of the acquired businesses; (v) the risk of diverting the attention of senior management from our operations; (vi) the risks of entering new markets in which we have limited experience; (vii) risks associated with integrating financial reporting and internal control systems; (viii...

  • Page 25
    ... in our financial statements in future periods, which could negatively impact our financial results. Changes in our operations or sales outside the U.S. markets could result in lost benefits in impacted countries and increase our cost of doing business. We have entered into various agreements with...

  • Page 26
    ... of connectors and power supplies, the transportation of lithium-ion batteries and other aspects are also proliferating. There are also demanding and rapidly changing laws around the globe related to issues such as product safety, radio interference, radio frequency radiation exposure, and...

  • Page 27
    ... impact our financial results. Item 1B: Unresolved Staff Comments None. Item 2: Properties Motorola Solutions' principal executive offices are located at 1303 East Algonquin Road, Schaumburg, Illinois 60196. Motorola Solutions also operates manufacturing facilities and sales offices in other...

  • Page 28
    ..., Sales and Field Operations, Motorola Solutions business from August 2010 to January 2011; Senior Vice President, Worldwide Field Operations, Enterprise Mobility Solutions business from April 2009 to August 2010; Senior Vice President, Government and Commercial Markets-Americas, ASTRO Product...

  • Page 29
    PART II Item 5: Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Motorola Solutions' common stock is listed on the New York and Chicago Stock Exchanges. The number of stockholders of record of its common stock on January 31, 2013 was 49,815...

  • Page 30
    ... Solutions, Inc., the S&P 500 Index and the S&P Communications Equipment Index. This graph assumes $100 was invested in the stock or the Index on December 31, 2007 and reflects the payment of dividends, including the Company's distribution to its shareholders of one share of Motorola Mobility...

  • Page 31
    ... Motorola Solutions, Inc. and Subsidiaries Five-Year Financial Summary Years Ended December 31 (Dollars in millions, except as noted) Operating Results Net sales from products Net sales from services Net sales Cost of product sales Cost of service sales Costs of sales Gross margin Selling, general...

  • Page 32
    ... safety networks. Enterprise: Our Enterprise segment includes sales of rugged and enterprise-grade mobile computers and tablets, laser/imaging/RFID based data capture products, WLAN and iDEN infrastructure and software. Service revenues included in the Enterprise segment are primarily maintenance...

  • Page 33
    ... end-to-end solutions that combine managed services and comprehensive device and network management with our existing portfolio. We believe we are uniquely positioned to provide our customers products and services that meet mobile workforce needs, as well as build successful long term relationships...

  • Page 34
    ...in innovative solutions that meet the needs of our customers globally. As we execute on meeting these objectives, we remain focused on taking the necessary action to design and deliver differentiated and innovative products and services that serve the needs of our government and enterprise customers...

  • Page 35
    ... of Operations (Dollars in millions, except per share amounts) Net sales from products Net sales from services Net sales Cost of product sales Cost of service sales Costs of sales Gross margin Selling, general and administrative expenses Research and development expenditures Other charges Operating...

  • Page 36
    ... Selling, general and administrative ("SG&A") expenses increased 3% to $2.0 billion, or 22.6% of net sales in 2012, compared to $1.9 billion, or 23.2% of net sales in 2011. The increase in SG&A expenses is driven by an increase in pension and employee benefit-related expenses, as well as the Psion...

  • Page 37
    ... in 2012, compared to earnings from discontinued operations of $411 million, or $1.21 per diluted share, in 2011. The earnings from discontinued operations in 2011 were primarily from the operations of and the gain on the sale of the Networks business. Results of Operations-2011 Compared to 2010 Net...

  • Page 38
    ... in certain product lines offset by the anticipated decline in iDEN, which has historically yielded strong margins. Selling, General and Administrative Expenses SG&A expenses increased 2% to $1.9 billion, or 23.2% of net sales, in 2011, compared to $1.9 billion, or 24.5% of net sales, in 2010. The...

  • Page 39
    ... diluted share, in 2010. The earnings from discontinued operations in 2011 was primarily from the operations and gain from the sale of the Networks business. The earnings from discontinued operations in 2010 were primarily from the Networks business, partially offset by losses from Motorola Mobility...

  • Page 40
    ...increased employee benefit-related expenses. Enterprise Segment In 2012, the Enterprise segment's net sales represented 31% of our consolidated net sales, compared to 35% in 2011, and 34% in 2010. (Dollars in millions) Segment net sales Operating earnings Years Ended December 31 2012 2011 2010 2,709...

  • Page 41
    ... to our pension plans, and (iii) improvements in our working capital management, including approximately $100 million of sold or collected longterm receivables related to the Networks divestiture that were retained after the sale. Operating cash flows in 2011, as compared to 2010, were negatively...

  • Page 42
    ... this agreement as we were in the process of separating Motorola Mobility and pursuing the sale of certain assets of the Networks business. We made $250 million of pension contributions to our U.S. pension plans over the amounts required in 2011, of which $100 million fulfilled the PBGC financial...

  • Page 43
    ... of $1.1 billion in 2011 and proceeds received of $264 million in 2010. The $38 million of disbursements in 2012 were primarily comprised of payments to NSN related to the purchase price adjustment from the sale of the Networks business, partially offset by proceeds from sales of certain of our...

  • Page 44
    .... Share Repurchase Program: Through actions taken in July 2011 and January 2012, the Board of Directors authorized us to repurchase an aggregate amount of up to $3.0 billion of our outstanding common stock through December 31, 2012. On February 26, 2012, we entered into a stock purchase agreement...

  • Page 45
    ... billion at December 31, 2011. Any future disruptions, uncertainty, or volatility in bank, insurance or capital markets, or a change in our credit ratings could adversely affect our ability to obtain Performance Bonds and may result in higher funding costs. Off-Balance Sheet Arrangements: Under the...

  • Page 46
    ...and were assigned certain patent properties. As a result of this agreement, we recorded a pre-tax gain of $39 million (and $55 million was allocated to discontinued operations) during the year ended December 31, 2010, related to the settlement of the outstanding litigation between the parties. Legal...

  • Page 47
    ... are primarily sold through distributors and value-added resellers (collectively "channel partners"). Channel partners may provide a service or add componentry in order to resell our products to end customers. For sales to channel partners where we cannot reliably estimate the final sales price or...

  • Page 48
    ... of selling price ("ESP"). • VSOE-In many instances, products are sold separately in stand-alone arrangements as customers may support the products themselves or purchase support on a time and materials basis. Additionally, advanced services such as general consulting, network management or...

  • Page 49
    ...life cycle products, lifetime buys at the end of supplier production runs, business exits, and a shift of production to outsourced manufacturing. If future demand or market conditions are less favorable than those projected by management, additional inventory writedowns may be required. Income Taxes...

  • Page 50
    ... held in Sigma Fund generally consist of equity and fixed income securities, which are classified as available-for-sale and are carried at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market...

  • Page 51
    ... and 2011. At December 31, 2012, the Regular Pension Plan and the Postretirement Health Care Benefits Plan investment portfolios were predominantly equity investments and the Officers' Plan investment portfolio was predominantly fixed-income securities. A second key assumption is the discount rate...

  • Page 52
    ... market conditions, cost factors, overall financial performance, changes in share price, and entity-specific events. In addition, we considered the fair value derived for each reporting unit in conjunction with the 2010 goodwill impairment test. We compared this prior fair value against the current...

  • Page 53
    ...expenditures, cost of capital and discount rates as compared to the estimates utilized for the purpose of calculating the fair value of each reporting unit, as well as a decline in macroeconomic conditions, the industry, the market, overall financial performance or our stock price and related market...

  • Page 54
    ... to pension plans or retiree health benefit plans, (k) our ability to collect on our Sigma Fund and other investments, (l) our ability and cost to access the capital markets, (m) our ability to borrow and the amount available under our credit facilities, (n) our ability to retire outstanding debt...

  • Page 55
    ... is from currencies that are not traded in liquid markets and these are addressed, to the extent reasonably possible, by managing net asset positions, product pricing and component sourcing. At December 31, 2012, we had outstanding foreign exchange contracts totaling $523 million, compared to...

  • Page 56
    ® Reg. U.S. Patent & Trademark Office. MOTOROLA MOTO, MOTOROLA SOLUTIONS and the Stylized M Logo, as well as iDEN are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license. All other products or service names are the property of their respective owners...

  • Page 57
    ... Board of Directors and Stockholders Motorola Solutions, Inc.: We have audited the accompanying consolidated balance sheets of Motorola Solutions, Inc. and Subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, stockholders' equity...

  • Page 58
    Motorola Solutions, Inc. and Subsidiaries Consolidated Statements of Operations Years ended December 31 (In millions, except per share amounts) Net sales from products Net sales from services Net sales Cost of product sales Cost of service sales Costs of sales Gross margin Selling, general and ...

  • Page 59
    ... ended December 31 2011 2010 2012 881 177 87 (707) 14 4 1 (424) 457 - 457 $ $ 1,152 132 (77) (723) 19 (3) (2) (654) 498 (6) 504 $ $ 650 112 (6) 81 (63) (2) (58) 64 714 17 697 (In millions) $ Net earnings Other comprehensive income (loss): Amortization of retirement benefit adjustments, net of tax...

  • Page 60
    Motorola Solutions, Inc. and Subsidiaries Consolidated Balance Sheets December 31 (In millions, except per share amounts) ASSETS Cash and cash equivalents Sigma Fund and short-term investments Accounts receivable, net Inventories, net Deferred income taxes Other current assets Total current assets ...

  • Page 61
    ... common stock Sale of noncontrolling interest in subsidiary common stock Purchase of noncontrolling interest in subsidiary Reclassification of share-based awards from liability to equity Dividends declared Balance at December 31, 2011: Net earnings Net unrealized gain on securities, net of tax of...

  • Page 62
    ...Share-based compensation expense Gain on sales of investments and businesses, net Loss from extinguishment of long-term debt Deferred income taxes Changes in assets and liabilities, net of effects of acquisitions and dispositions: Accounts receivable Inventories Other current assets Accounts payable...

  • Page 63
    ... sold through distributors and value-added resellers (collectively "channel partners"). Channel partners may provide a service or add componentry in order to resell the Company's products to end customers. For sales to channel partners where the Company cannot reliably estimate the final sales price...

  • Page 64
    ... of selling price ("ESP"). • VSOE-In many instances, products are sold separately in stand-alone arrangements as customers may support the products themselves or purchase support on a time and materials basis. Additionally, advanced services such as general consulting, network management or...

  • Page 65
    ...high-quality, investment grade (rated at least A/A-1 by Standard & Poor's or A2/P-1 by Moody's Investors Service), U.S. dollar-denominated fixed income obligations, including certificates of deposit, commercial paper, government bonds, corporate bonds and asset- and mortgage-backed securities. Under...

  • Page 66
    ... Motorola Mobility and Reverse Stock Split, which occurred on January 4, 2011. Share-Based Compensation Costs: The Company has incentive plans that reward employees with stock options, stock appreciation rights, restricted stock and restricted stock units, as well as an employee stock purchase plan...

  • Page 67
    ..., risk free rate, dividend yield, and expected life. Compensation cost for share-based awards is recognized on a straight-line basis over the vesting period. Retirement Benefits: The Company records annual expenses relating to its pension benefit and postretirement plans based on calculations...

  • Page 68
    ...ended December 31 Other charges (income): Intangibles amortization Reorganization of businesses Intellectual property settlements and reserve adjustment Legal and related insurance matters, net Pension plan adjustments, net Long-term financing receivable reserve $ 2012 $ 29 41 - (16) - - 54 $ $ 2011...

  • Page 69
    ... to Motorola Solutions, Inc. 2011 2010 2012 2012 $ $ $ (108) $ 42 (66) $ (8) $ (6) (13) - 13 (14) $ 2011 (132) $ 58 (74) $ (4) $ (81) 8 - 8 (69) $ 2010 (217) 88 (129) (21) (12) 12 11 3 (7) Years ended December 31 Basic earnings per common share: Earnings Weighted average common shares outstanding...

  • Page 70
    ... Value Short-term Investments Investments Less Unrealized Gains $ December 31, 2012 Available-for-sale securities: U.S. government, agency and government-sponsored enterprise obligations Corporate bonds Mortgage-backed securities Common stock and equivalents Other securities, at cost Equity method...

  • Page 71
    ...sales of businesses, net 2012 $ $ 39 - 39 $ $ 2011 17 6 23 $ $ 2010 49 - 49 During the year ended December 31, 2010, the $49 million of net gains primarily relate to sales of a number of the Company's equity investments, of which $31 million of gain was attributable to a single investment. Accounts...

  • Page 72
    ... Networks purchase price adjustment Dividend payable Other 2012 $ $ 2011 $ 774 471 250 126 125 96 70 821 2,733 $ Other Liabilities Other liabilities consist of the following: December 31 Defined benefit plans, including split dollar life insurance policies Postretirement health care benefits plan...

  • Page 73
    ... 2011, certain equity balances were transferred by the Company to Motorola Mobility including: (i) $1 million in foreign currency translation adjustments, (ii) $9 million in fair value adjustments to available for sale securities, net of tax of $5 million, and (iii) $8 million in retirement benefit...

  • Page 74
    ... is from currencies that are not traded in liquid markets and these are addressed, to the extent reasonably possible, by managing net asset positions, product pricing and component sourcing. At December 31, 2012, the Company had outstanding foreign exchange contracts totaling $523 million, compared...

  • Page 75
    ...-rate payments. The Interest Agreements are not accounted for as a part of a hedging relationship and, accordingly, the changes in the fair value of the Interest Agreements are included in Other income (expense) in the Company's consolidated statements of operations. The weighted average fixed rate...

  • Page 76
    ...the years ended December 31, 2012, 2011, and 2010: December 31, Loss on Derivative Instruments Derivatives not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Total derivatives not designated as hedging instruments 2012 2011 2010 Statement of Operations Location...

  • Page 77
    ...: Years ended December 31 United States Other nations States (U.S.) Current income tax expense United States Other nations States (U.S.) Deferred income tax expense (benefit) Total income tax expense (benefit) 2012 $ 5 $ 89 1 95 296 (12) (42) 242 337 $ 2011 2 $ 30 3 35 (118) 111 (31) (38) (3) $ 2010...

  • Page 78
    ... analysis, including the historical and projected pre-tax profits generated by the Company's U.S. operations. The Company also considered tax planning strategies that are prudent and can be reasonably implemented. During 2011, the Company recorded $274 million of tax benefits related to the reversal...

  • Page 79
    ...of prior years Reductions for tax positions of prior years Settlements and agreements Lapse of statute of limitations Balance at December 31 $ 191 $ 11 11 (24) (24) (4) 161 $ 2011 198 45 38 (63) (22) (5) 191 $ During 2012, the Company reduced its prior year unrecognized tax benefits by $24 million...

  • Page 80
    ... 2011 tax years. The Company also has several state and nonU.S. audits pending. A summary of open tax years by major jurisdiction is presented below: Jurisdiction United States China France Germany India Israel Japan Malaysia Singapore United Kingdom Tax Years 2008-2012 2002-2012 2009-2012 2008-2012...

  • Page 81
    ... cost Non-U.S. plans Years ended December 31 Service cost Interest cost Expected return on plan assets Amortization of: Unrecognized net loss Unrecognized prior service cost Settlement/curtailment gain Net periodic pension cost 2012 $ 10 $ 75 (78) 22 (3) - 26 $ 2011 17 $ 72 (77) 17 (9) (9) 11 $ 2010...

  • Page 82
    ...January 1 Return on plan assets Company contributions Settlements/curtailments Employee contributions Foreign exchange valuation adjustment Benefit payments from plan assets Fair value at December 31 Funded status of the plan Unrecognized net loss Unrecognized prior service cost Prepaid pension cost...

  • Page 83
    ...and the long-term rate of return on plan assets have a significant effect on the amounts reported for net periodic cost and benefit obligation. The assumed discount rates reflect the prevailing market rates of a universe of high-quality, non-callable, corporate bonds currently available that, if the...

  • Page 84
    ...the agreement as the Company was in the process of separating Motorola Mobility and pursuing the sale of certain assets of the Networks business. The Company made a $250 million pension contribution to its U.S. pension plans over the amounts required in the fourth quarter 2011, of which $100 million...

  • Page 85
    ...1 Return on plan assets Benefit payments made with plan assets Fair value at December 31 Funded status of the plan Unrecognized net loss Unrecognized prior service cost Accrued postretirement health care costs Components of accrued postretirement health care cost: Years ended December 31 Non-current...

  • Page 86
    ... liability and related expense. The Company has no significant Postretirement Health Care Benefit Plans outside the United States. Other Benefit Plans The Company maintains a number of endorsement split-dollar life insurance policies that were taken out on now-retired officers under a plan that was...

  • Page 87
    ... compensation on an after-tax basis. Plan participants cannot purchase more than $25,000 of stock in any calendar year. The price an employee pays per share is 85% of the lower of the fair market value of the Company's stock on the close of the first trading day or last trading day of the purchase...

  • Page 88
    ...received from stock option exercises and the employee stock purchase plan was $133 million, $192 million and $179 million for the years ended December 31, 2012, 2011 and 2010, respectively. The total intrinsic value of options exercised during the years ended December 31, 2012, 2011 and 2010 was $59...

  • Page 89
    ..., employee stock purchase plans, RS and RSUs was as follows: Years ended December 31 Share-based compensation expense included in: Costs of sales Selling, general and administrative expenses Research and development expenditures Share-based compensation expense included in Operating earnings Tax...

  • Page 90
    ... holds certain fixed income securities, equity securities and derivatives, which are recognized and disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly...

  • Page 91
    ... for securities sold Gain on Sigma Fund investments included in Other income (expense) Balance at December 31 There were no significant transfers between Level 1 and Level 2 during 2012 or 2011. Pension and Postretirement Health Care Benefits Plan Assets The fair values of the various pension and...

  • Page 92
    ...by life insurance companies for one of the Company's non-U.S. pension plans The table above includes securities on loan as part of a securities lending arrangement of $29 million of common stock and equivalents, $2 million of U.S. government and agency obligations, and $27 million of corporate bonds...

  • Page 93
    ... in money market mutual funds classified as Cash and cash equivalents in its consolidated balance sheet. The money market funds have quoted market prices that are generally equivalent to par. Using quoted market prices and market interest rates, the Company determined that the fair value of long...

  • Page 94
    ... receivables is included in Accounts receivable and the non-current portion of long-term receivables is included in Other assets in the Company's consolidated balance sheets. Interest income recognized on long-term receivables for the years ended December 31, 2012, 2011 and 2010 was $7 million, $15...

  • Page 95
    ...rating system for establishing customer credit limits. This system is aligned and comparable to the rating systems utilized by independent rating agencies. The Company's policy for valuing the allowance for credit losses is to review for collectability on an individual receivable basis. All customer...

  • Page 96
    ... capture products, wireless local area network ("WLAN") and integrated digital enhanced networks ("iDEN") and software. Service revenues included in the Enterprise segment are primarily maintenance contracts associated with the above products. For the years ended December 31, 2012, 2011 and 2010, no...

  • Page 97
    ...13. Reorganization of Businesses The Company maintains a formal Involuntary Severance Plan (the "Severance Plan"), which permits the Company to offer eligible employees severance benefits based on years of service and employment grade level in the event that employment is involuntarily terminated...

  • Page 98
    ...balance sheet at December 31, 2012, is expected to be paid, generally, within one year to: (i) severed employees who have already begun to receive payments, and (ii) approximately 700 employees to be separated in 2013. 2011 Charges During 2011, the Company continued to implement various productivity...

  • Page 99
    ... liabilities in the Company's consolidated balance sheet at December 31, 2011. 2010 Charges During 2010, the Company continued to implement various productivity improvement plans aimed at achieving longterm, sustainable profitability by driving efficiencies and reducing operating costs. Both of the...

  • Page 100
    ...which is included within Other charges in the consolidated statements of operations, was $29 million, $200 million and $203 million for the years ended December 31, 2012, 2011 and 2010, respectively. The reduction in intangible amortization in 2012 is due to certain intangible assets that have fully...

  • Page 101
    ..., industry and market conditions, cost factors, overall financial performance, changes in share price, and entity-specific events. In addition, the Company considered the fair value derived for each reporting unit in conjunction with the 2010 goodwill impairment test. The Company compared this prior...

  • Page 102
    ... the fair values of both reporting units exceeded their book values, indicating that there was no impairment of goodwill. 15. Valuation and Qualifying Accounts The following table presents the valuation and qualifying account activity for the years ended December 31, 2012, 2011 and 2010: Balance at...

  • Page 103
    ... 177 184 Operating Results Net sales $ Costs of sales Gross margin Selling, general and administrative expenses Research and development expenditures Other charges Operating earnings Earnings from continuing operations* Net earnings* Per Share Data (in dollars) Continuing Operations: Basic earnings...

  • Page 104
    ... communicated to Motorola Solutions' management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Management's Report on Internal Control Over Financial Reporting. Motorola Solutions' management is responsible...

  • Page 105
    ...standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Motorola Solutions, Inc. and Subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows...

  • Page 106
    ... to Investor Relations, Motorola Solutions, Inc., Corporate Offices, 1303 East Algonquin Road, Schaumburg, Illinois 60196, E-mail: [email protected]. Any amendment to, or waiver from, the Code applicable to executive officers will be posted on our Internet website within four business...

  • Page 107
    ... 15: Exhibits, Financial Statement Schedules (a) 1. Financial Statements See Part II, Item 8 hereof. 2. Financial Statement Schedule and Independent Auditors' Report All schedules omitted are inapplicable or the information required is shown in the consolidated financial statements or notes thereto...

  • Page 108
    ...) of Motorola Solutions, Inc. of our reports dated February 12, 2013, with respect to the consolidated balance sheets of Motorola Solutions, Inc. and Subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and...

  • Page 109
    ... Brown Chairman and Chief Executive Officer February 12, 2013 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Motorola Solutions, Inc. and in the capacities and on the dates indicated. Signature Title Date...

  • Page 110
    ... No. 2 to the Form 10 Registration Statement filed on October 8, 2010 by Motorola Mobility Holdings, Inc. (formerly Motorola SpinCo Holdings Corporation (File No. 1-34805)). 10.6 Stock Purchase Agreement, dated as of February 26, 2012, by and between Motorola Solutions, Inc. and Carl C. Icahn and...

  • Page 111
    ...Annual Report on Form 10-K for the fiscal year ended December 31, 2010 ( File No. 1-34805)). 10.9 Form of Motorola, Inc. Award Document-Terms and Conditions Related to Employee Nonqualified Stock Options relating to the Motorola Solutions Omnibus Incentive Plan of 2006 for grants from August 1, 2009...

  • Page 112
    ...to Motorola Solutions' Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 1-34805)). 10.36 Form of Deferred Stock Units Agreement between Motorola, Inc. and its non-employee directors, relating to the deferred stock units issued in lieu of cash compensation to directors...

  • Page 113
    ... Plan (effective January 1, 2013). *10.51 Motorola Solutions Executive Officer Short Term Incentive Plan Term Sheet. 10.52 Motorola Solutions Long Range Incentive Plan (LRIP), as Amended and Restated January 26, 2012 (incorporated by reference to Exhibit 10.53 to Motorola Solutions' Annual Report...

  • Page 114
    ... Are the Directors Compensated" and "Director Retirement Plan and Insurance Coverage" of Motorola Solutions' Proxy Statement for the Annual Meeting of Stockholders to be held on May 6, 2013 ("Motorola Solutions' Proxy Statement")). *10.66 Description of Insurance covering non-employee directors and...

  • Page 115
    ... herewith XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934...

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    ...be directed to: Investor Relations Motorola Solutions, Inc. 1303 E. Algonquin Road Schaumburg, IL 60196 U.S.A. [email protected] +1 847 538 7367 Common Stock Motorola Solutions common stock is listed on the New York and Chicago Stock Exchanges Annual Meeting of Stockholders May 6, 2013...

  • Page 118
    ... of the moment, whether that's fighting a fire, managing a store's half-off sale or matching life-saving drugs to the correct patient. SERVICES We plan, build, manage and secure communications solutions for our customers. Helping customers build value, manage costs and prepare for the future, our...

  • Page 119
    ... RECONCILIATION 2010 GAAP Operating earnings ("OE") Non-GAAP OE Adjustments: Stock-based compensation expense Reorganization of business charges Intangibles amortization expense Intellectual property settlements and reserve adjustment Legal and related insurance matters, net Pension plan adjustments...

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    ... E. Algonquin Road Schaumburg, IL 60196 U.S.A. +1 847 576 5000 www.motorolasolutions.com MOTOROLA, MOTO, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license. All other trademarks are the property of their...