Motorola 2013 Annual Report Download - page 39

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Acquisitions and Investments: We used cash of $65 million for acquisitions and new investment activities in 2013,
compared to $109 million in 2012 and $32 million in 2011. The cash used in 2013 was for the acquisition of Twisted Pair, a
communications software provider in push-to-talk-over-broadband applications for a purchase price, net of cash acquired, of
$36 million, and other small strategic investments. The cash used in 2012 was primarily for the acquisition of Psion plc, a U.K.
based leader in mobile computing solutions, for approximately $200 million, primarily utilizing foreign cash, partially offset by
net proceeds received related to the agreement with NSN to take over responsibility to implement Norway´s TETRA public
safety network. The cash used in 2011 was for small strategic investments.
Capital Expenditures: Capital expenditures were $191 million in 2013, compared to $187 million in 2012 and $186
million in 2011. Capital spending in 2013 was primarily driven by updating our information technology infrastructure, facility
renovations, and building out factory lines for new product introductions.
Sales of Investments and Businesses: We received $67 million of proceeds in 2013 compared to disbursements of $38
million in 2012 and proceeds received of $1.1 billion in 2011. The $67 million of proceeds received in 2013 were primarily
comprised of proceeds from sales of equity investments. 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 completed in 2011,
partially offset by proceeds from sales of certain of our equity investments. The $1.1 billion in proceeds in 2011 were primarily
comprised of net proceeds received in connection with sales of: (i) the Networks business, (ii) the Wireless Broadband
business, (iii) certain of our equity investments, and (iv) the Israel-based module business.
Financing Activities
Net cash used for financing activities was $1.2 billion in 2013 compared to $2.3 billion in 2012 and $5.5 billion in 2011.
Cash used for financing activities in 2013 was primarily comprised of: (i) $1.7 billion used for purchases of our common stock
under our share repurchase program and (ii) $292 million of cash used for the payment of dividends, partially offset by: (i)
$593 million of net proceeds from the issuance of debt and (ii) $165 million of net proceeds from the issuance of common
stock in connection with our employee stock option and employee stock purchase plans.
Cash used for financing activities in 2012 was primarily comprised of: (i) $2.4 billion used for purchases of our common
stock under our share repurchase program, (ii) $413 million of cash used for the repayment of debt, and (iii) $270 million of
cash used for the payment of dividends, partially offset by: (i) $747 million of net proceeds from the issuance of debt and
(ii) $133 million of net cash received from the issuance of common stock in connection with our employee stock option and
employee stock purchase plans.
Cash used for financing activities in 2011 was primarily comprised of: (i) $3.4 billion of contributions to Motorola
Mobility, (ii) $1.2 billion used for repayment of long-term debt, (iii) $1.1 billion of cash used for purchases of common stock
under our share repurchase program, and (iv) $72 million of cash used for payment of dividends, partially offset by $192
million of net cash received from the issuance of common stock in connection with our employee stock option and employee
stock purchase plans.
Current and Long-Term Debt: At both December 31, 2013 and December 31, 2012, our current portion of long-term debt
was $4 million. We had outstanding long-term debt of $2.5 billion and $1.9 billion at December 31, 2013 and December 31,
2012 respectively.
During 2013, we issued an aggregate face principal amount of $600 million of 3.50% Senior Notes due March 1, 2023,
recognizing net proceeds of $588 million, after debt discount and issuance costs.
During 2012, we issued an aggregate face principal amount of $750 million of 3.75% Senior Notes due May 15, 2022
(the “2022 Senior Notes”). We also redeemed $400 million aggregate principal amount outstanding of our 5.375% Senior
Notes due November 2012 (the “2012 Senior Notes”). All of the 2012 Senior Notes were redeemed for an aggregate purchase
price of approximately $408 million. This debt was repurchased with a portion of the proceeds from the issuance of the 2022
Senior Notes.
During 2011, we repurchased $540 million of our outstanding long-term debt for a purchase price of $615 million,
excluding approximately $6 million of accrued interest. In addition, we repaid the entire $600 million aggregate principal
amount due on notes which had reached maturity. The $540 million of long-term debt repurchased included principal amounts
of: (i) $196 million of the $314 million then outstanding of the 6.50% Debentures due 2025, (ii) $174 million of the
$210 million then outstanding of the 6.50% Debentures due 2028, and (iii) $170 million of the $225 million then outstanding of
the 6.625% Senior Notes due 2037. After accelerating the amortization of debt issuance costs and debt discounts, we
recognized a loss of approximately $81 million related to this debt tender in Other within Other income (expense) in the
consolidated statements of operations.
The three largest U.S. national ratings agencies rate our senior unsecured long-term debt investment grade. We believe
that we will be able to maintain sufficient access to the capital markets at our current ratings. Any future disruptions,