Motorola 2012 Annual Report Download - page 41

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cost savings of approximately $70 million, consisting of $15 million of savings in Cost of sales, and $55 million of savings in
operating expenses.
During 2011, we recorded net reorganization of business charges of $58 million, including $41 million for employee
separation costs and $19 million for exit costs, partially offset by $2 million for reversals of accruals no longer needed. During
2010 we recorded net reorganization of business charges of $73 million, including $73 million for employee separation costs
and $16 million for exit costs, partially offset by $16 million of reversals of accruals no longer needed.
The following table displays the net charges incurred by business segment:
Year Ended December 31, 2012 2011 2010
Government $33 $40$57
Enterprise 17 18 16
$50
$58$73
Cash payments for exit costs and employee separations in connection with these reorganization plans were $55 million in
2012, as compared to $81 million in 2011, and $53 million in 2010. The $35 million reorganization of businesses accrual at
December 31, 2012, includes: (i) $31 million relating to employee separation costs that are expected to be paid in 2013, and (ii)
$4 million relating to lease termination obligations that are expected to be paid over a number of years.
Liquidity and Capital Resources
We decreased the aggregate of our (i) cash and cash equivalent balances, and (ii) Sigma Fund and short-term investments
by $1.5 billion from $5.1 billion as of December 31, 2011 to $3.6 billion as of December 31, 2012. This decrease was
primarily due to: (i) the return of $2.7 billion of capital to shareholders through share repurchases and dividends paid during
2012, and (ii) the $413 million used for the retirement of debt, partially offset by: (i) $747 million of net proceeds from the
issuance of debt, and (ii) $1.1 billion of operating cash flow.
Cash and Cash Equivalents
At December 31, 2012, our cash and cash equivalents (which are highly-liquid investments with an original maturity of
three months or less) were $1.5 billion, a decrease of $413 million compared to $1.9 billion at December 31, 2011. At
December 31, 2012, approximately $400 million of this amount was held in the U.S. and $1.1 billion was held in other
countries (including $322 million in China). At both December 31, 2012 and December 31, 2011, restricted cash was $63
million (including $3 million held outside the U.S.).
We continue to analyze and review various repatriation strategies to continue to efficiently repatriate cash. In 2012, we
repatriated approximately $1.0 billion in cash to the U.S. from international jurisdictions. We have approximately $1.3 billion
of earnings in foreign subsidiaries that are not permanently reinvested and may be repatriated without an additional income tax
charge to our consolidated statements of operations, given the U.S. federal and foreign income tax provisions accrued on
undistributed earnings and the utilization of available foreign tax credits. On a cash basis, certain of these repatriations from our
non-U.S. subsidiaries will require the payment of additional taxes. Repatriation of some of these funds could be subject to
delay for local country approvals and could have potential adverse tax consequences.
On January 4, 2011, the distribution of Motorola Mobility from Motorola Solutions was completed. As part of the
distribution, we contributed $3.2 billion of cash and cash equivalents to Motorola Mobility. We had an obligation to fund an
additional $300 million, upon receipt of cash distributions as a result of future capital reductions of an overseas subsidiary, of
which $225 million was paid during 2011 and $73 million was paid during 2012. These contributions are reflected as financing
activities in our consolidated statements of cash flows for the years ended, December 31, 2012 and 2011.
Operating Activities
Cash provided by operating activities from continuing operations in 2012 was $1.1 billion, compared to $848 million in
2011 and $803 million in 2010. Operating cash flows in 2012, as compared to 2011, were positively impacted by: (i) our
increased sales and the expansion of our operating margins, (ii) a $156 million decrease in contributions to our pension plans,
and (iii) improvements in our working capital management, including approximately $100 million of sold or collected long-
term receivables related to the Networks divestiture that were retained after the sale. Operating cash flows in 2011, as
compared to 2010, were negatively impacted by timing differences within our working capital accounts, as well as an increase
of $329 million in contributions to our pension plans, partially offset by $150 million of sold or collected long-term receivables
related to the Networks divestiture that were retained after the sale.
We contributed $340 million to our U.S. pension plans during 2012 compared to $489 million in 2011. We contributed
$31 million to our non-U.S. pension plans during 2012 compared to $38 million contributed in 2011. In January 2011, the
Pension Benefit Guaranty Corporation (“PBGC”) announced an agreement with Motorola Solutions under which we would