Motorola 2013 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 of the 2013 Motorola annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 111

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111

76
The IRS is currently examining the Company's 2010 and 2011 tax years. The Company also has several state and non-
U.S. audits pending. A summary of open tax years by major jurisdiction is presented below:
Jurisdiction Tax Years
United States 2008-2013
China 2002-2013
France 2009-2013
Germany 2008-2013
India 1997-2013
Israel 2012-2013
Japan 2009-2013
Malaysia 2008-2013
Singapore 2009-2013
United Kingdom 2007-2013
Although the final resolution of the Company’s global tax disputes is uncertain, based on current information, in the
opinion of the Company’s management, the ultimate disposition of these matters will not have a material adverse effect on the
Company’s consolidated financial position, liquidity or results of operations. However, an unfavorable resolution of the
Company’s global tax disputes could have a material adverse effect on the Company’s consolidated financial position, liquidity
or results of operations in the periods in which the matters are ultimately resolved.
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 twelve 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 to exceed $25 million.
At December 31, 2013, the Company had $26 million and $29 million accrued for interest and penalties, respectively, on
unrecognized tax benefits. At December 31, 2012, the Company had $24 million and $31 million accrued for interest and
penalties, respectively, on unrecognized tax benefits.
7. Retirement Benefits
Pension and Postretirement Health Care Benefits Plans
The Company’s noncontributory pension plan (the “Regular Pension Plan”) covers U.S. employees hired prior to January
1, 2005, who became eligible after one year of service. The benefit formula is dependent upon employee earnings and years of
service. The Company also provides defined benefit plans which cover non-U.S. employees in certain jurisdictions, principally
the United Kingdom, Germany, and Japan (the “Non U.S. Pension Benefit Plans”). Other pension plans outside of the U.S. are
not material to the Company either individually or in the aggregate.
The Company had a noncontributory supplemental retirement benefit plan (the “Officers’ Plan”) for its officers elected
prior to December 31, 1999. The Officers’ Plan contained provisions for vesting and funding the participants’ expected
retirement benefits when the participants met the minimum age and years of service requirements. Elected officers who were
not yet vested in the Officers’ Plan as of December 31, 1999 had the option to remain in the Officers’ Plan or elect to have their
benefit bought out in restricted stock units. Effective December 31, 1999, newly elected officers were not eligible to participate
in the Officers’ Plan. Effective June 30, 2005, salaries were frozen for this plan. During 2013, the Company settled and
terminated the Officers' Plan.
The Company has an additional noncontributory supplemental retirement benefit plan, the Motorola Supplemental
Pension Plan (“MSPP”), which provides supplemental benefits to individuals by replacing the Regular Pension Plan benefits
that are lost by such individuals under the retirement formula due to application of the limitations imposed by the Internal
Revenue Code. However, elected officers who were covered under the Officers’ Plan were not eligible to participate in the
MSPP. Effective January 1, 2007, eligible compensation was capped at the IRS limit plus $175,000 (the “Cap”) or, for those
already in excess of the Cap as of January 1, 2007, the eligible compensation used to compute such employee’s MSPP benefit
for all future years is the greater of: (i) such employee’s eligible compensation as of January 1, 2007 (frozen at that amount) or
(ii) the relevant Cap for the given year. Effective January 1, 2009, the MSPP was closed to new participants unless such
participation was required under a prior contractual entitlement.