Motorola Solutions (MSI) 10-Q/A 26 Aug 09 2009 Q2 Quarterly report (amended) Financial data

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (USD $)
In Millions, unless otherwise specified	3 Months Ended Jul. 04, 2009	3 Months Ended Jun. 28, 2008	6 Months Ended Jul. 04, 2009	6 Months Ended Jun. 28, 2008
Net sales	$5,497	$8,082	$10,868	$15,530
Costs of sales	3,787	5,757	7,662	11,060
Gross margin	1,710	2,325	3,206	4,470
Selling, general and administrative expenses	822	1,115	1,691	2,298
Research and development expenditures	775	1,048	1,622	2,102
Other charges	103	157	332	334
Operating earnings (loss)	10	5	(439)	(264)
Other income (expense):
Interest expense, net	(30)	(10)	(65)	(12)
Gain on sales of investments and businesses, net	30	39	10	58
Other	23	(92)	93	(97)
Total other income (expense)	23	(63)	38	(51)
Earnings (loss) from continuing operations before income taxes	33	(58)	(401)	(315)
Income tax benefit	(2)	(55)	(148)	(122)
Earnings (loss) from continuing operations	35	(3)	(253)	(193)
Earnings from discontinued operations, net of tax	0	0	60	0
Net earnings (loss)	35	(3)	(193)	(193)
Less: Earnings (loss) attributable to noncontrolling interests	9	(7)	12	(3)
Net earnings (loss) attributable to Motorola, Inc.	26	4	(205)	(190)
Amounts attributable to Motorola, Inc. common shareholders:
Earnings (loss) from continuing operations, net of tax	26	4	(265)	(190)
Earnings from discontinued operations, net of tax	0	0	60	0
Net earnings (loss)	$26	$4	($205)	($190)
Basic:
Continuing operations	0.01	$0	-0.12	-0.08
Discontinued operations	$0	$0	0.03	$0
Earnings Per Share, Basic	0.01	$0	-0.09	-0.08
Diluted:
Continuing operations	0.01	$0	-0.12	-0.08
Discontinued operations	$0	$0	0.03	$0
Earnings Per Share, Diluted	0.01	$0	-0.09	-0.08
Weighted average common shares outstanding:
Basic	2293.9	2262.6	2286.5	2260.5
Diluted	2306.4	2269.5	2286.5	2260.5
Dividends paid per share	0	0.05	0.05	0.1

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (USD $)
In Millions	Jul. 04, 2009	Dec. 31, 2008
ASSETS
Cash and cash equivalents	$2,881	$3,064
Sigma Fund	3,489	3,690
Short-term investments	45	225
Accounts receivable, net	3,689	3,493
Inventories, net	1,660	2,659
Deferred income taxes	1,320	1,092
Other current assets	2,630	3,140
Total current assets	15,714	17,363
Property, plant and equipment, net	2,280	2,442
Sigma Fund	72	466
Investments	446	517
Deferred income taxes	2,094	2,428
Goodwill	2,822	2,837
Other assets	1,676	1,816
Total assets	25,104	27,869
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable and current portion of long-term debt	40	92
Accounts payable	2,188	3,188
Accrued liabilities	5,956	7,340
Total current liabilities	8,184	10,620
Long-term debt	3,899	4,092
Other liabilities	3,398	3,562
Stockholders' Equity
Preferred stock, $100 par value	0	0
Common stock: 07/04/09 - $.01 par value; 12/31/08 - $3 par value Issued shares: 07/04/09 - 2,297.0; 12/31/08 - 2,276.9 Outstanding shares: 07/04/09 - 2,295.4; 12/31/08 - 2,276.5	23	6,831
Additional paid-in capital	7,988	1,003
Retained earnings	3,673	3,878
Accumulated other comprehensive income (loss)	(2,161)	(2,205)
Total Motorola, Inc. stockholders' equity	9,523	9,507
Noncontrolling interests	100	88
Total stockholders' equity	9,623	9,595
Total liabilities and stockholders' equity	$25,104	$27,869

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets [Parenthetical] (USD $)
	Jul. 04, 2009	Dec. 31, 2008
Condensed Consolidated Balance Sheets [Parenthetical]
Preferred Stock, Par or Stated Value Per Share	100	100
Common Stock, Par or Stated Value Per Share	0.01	3
Common Stock, Shares, Issued	2,297	2276.9
Common Stock, Shares, Outstanding	2295.4	2276.5

2_Condensed Consolidated Statem

Condensed Consolidated Statement of Stockholders' Equity (USD $)
In Millions	Common stock and Additional Paid-in Capital	Common Stock and Additional Paid-in Capital	Fair Value Adjustment to Available for Sale Securities, Net of Tax	Foreign Currency Translation Adjustments, Net of Tax	Retirement Benefits Adjustments, Net of Tax	Other Items, Net of Tax	Retained Earnings	Noncontrolling Interest	Comprehensive Earnings (Loss)	Total
Balances at Dec. 31, 2008		$7,834	$2	($133)	($2,067)	($7)	$3,878	$88		$9,595
Shares, Balance at Dec. 31, 2008	2276.9
Issuance of common stock and stock options exercised, shares	20.1
Net earnings (loss)							(205)	12	(193)	(193)
Net unrealized gain on securities (net of tax of $8)			14						14
Foreign currency translation adjustments (net of tax of $1)				(8)					(8)
Amortization of retirement benefit adjustments (net of tax of $17)					31				31
Issuance of common stock and stock options exercised, value		87
Tax shortfalls from stock-based compensation		(4)
Stock option and employee stock purchase plan expense		94
Net gain on derivative instruments (net of tax of $4)						7			7
Shares, Balance at Jul. 04, 2009	2,297
Balances at Jul. 04, 2009		$8,011	$16	($141)	($2,036)	$0	$3,673	$100	($149)	$9,623

3_Condensed Consolidated Statem

Condensed Consolidated Statement of Stockholders' Equity [Parenthetical] (USD $)
In Millions	4/5/2009 - 7/4/2009
Condensed Consolidated Statement of Stockholders' Equity [Parenthetical]
Tax effect net unrealized gain on securities	$8
Tax effect foreign currency translation adjustment	1
Tax effect amortization of retirement benefit adjustments	17
Tax effect net gain on derivative instruments	$4

4_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (USD $)
In Millions	6 Months Ended Jul. 04, 2009	6 Months Ended Jun. 28, 2008
Operating
Net earnings (loss)	($205)	($190)
Less: Earnings (loss) attributable to noncontrolling interests	12	(3)
Net earnings (loss)	(193)	(193)
Earnings from discontinued operations, net of tax	60	0
Earnings (loss) from continuing operations	(253)	(193)
Adjustments to reconcile loss from continuing operations to net cash used for operating activities:
Depreciation and amortization	382	416
Non-cash other charges (income)	(5)	116
Share-based compensation expense	150	166
Gain on sales of investments and businesses, net	(10)	(58)
Gain from the extinguishment of long-term debt	(67)	0
Deferred income taxes	(35)	(470)
Change in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable	(203)	873
Inventories	990	137
Other current assets	507	(270)
Accounts payable and accrued liabilities	(2,203)	(795)
Other assets and liabilities	(117)	(61)
Net cash used for operating activities	(864)	(139)
Investing
Acquisitions and investments, net	(21)	(174)
Proceeds from sales of investments and businesses, net	226	71
Distributions from investments	0	82
Capital expenditures	(137)	(231)
Proceeds from sales of property, plant and equipment	6	5
Proceeds from sales of Sigma Fund investments, net	670	787
Proceeds from sales of short-term investments	180	17
Net cash provided by investing activities	924	557
Financing
Repayment of short-term borrowings, net	(54)	(81)
Repayments of debt	(129)	(114)
Issuance of common stock	56	82
Purchase of common stock	0	(138)
Payments of dividends	(114)	(227)
Other, net	6	(7)
Net cash used for financing activities	(235)	(485)
Effect of exchange rate changes on cash and cash equivalents	(8)	72
Net increase (decrease) in cash and cash equivalents	(183)	5
Cash and cash equivalents, beginning of period	3,064	2,752
Cash and cash equivalents, end of period	2,881	2,757
Cash paid during the period for:
Interest, net	133	130
Income taxes, net of refunds	$174	$218

Basis of Presentation

Basis of Presentation
	6 Months Ended Jul. 04, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation	1.Basis of Presentation The condensed consolidated financial statements as of July4, 2009 and for the three and six months ended July4, 2009 and June28, 2008, include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Companys consolidated financial position, results of operations and cash flows for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S.generally accepted accounting principles (U.S.GAAP) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Companys Form10-K for the year ended December31, 2008. The results of operations for the three and six months ended July4, 2009 are not necessarily indicative of the operating results to be expected for the full year. Certain amounts in prior period financial statements and related notes have been reclassified to conform to the 2009 presentation. The preparation of financial statements in conformity with U.S.GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Furthermore, in connection with preparation of the condensed consolidated financial statements and in accordance with recently issued Statement of Financial Accounting Standards No.165 Subsequent Events (SFAS165), the Company evaluated subsequent events after July4, 2009 through the date and time the financial statements were issued on August4, 2009. In June 2009, the FASB issued SFAS168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No 162. SFAS168 established the effective date for use of the FASB codification for interim and annual periods ending after September15, 2009. Companies should account for the adoption of the guidance on a prospective basis. The Company does not anticipate the adoption of SFAS168 will have a material impact on their financial statements. The Company will update their disclosures for the appropriate FASB codification references after adoption, in the third quarter of 2009. In June 2009, the FASB also issued SFAS167 Amendments to FASB Interpretation No.46", and SFAS166 Accounting for Transfers of Financial Assets-an Amendment of FASB Statement No.140. SFAS167 amends the existing guidance around FIN46(R), to address the elimination of the concept of a qualifying special purpose entity. Also, it replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity and the obli

Discontinued Operations

Discontinued Operations
	6 Months Ended Jul. 04, 2009 USD / shares
Discontinued Operations [Abstract]
Discontinued Operations	2.Discontinued Operations During the six months ended July4, 2009, the Company completed the sale of: (i)Good Technology, and (ii)the biometrics business, which includes its Printrak trademark. Collectively, the Company received $163million in net cash and recorded a net gain on sale of the businesses of $175million before income taxes, which is included in Earnings from discontinued operations, net of tax, in the Companys condensed consolidated statements of operations. The operating results of these businesses (each of which was formerly included as part of the Enterprise Mobility Solutions segment), through the date of their respective dispositions are reported as discontinued operations in the condensed consolidated financial statements for the period ending July4, 2009. For all other applicable prior periods, the operating results of these businesses have not been reclassified as discontinued operations, since the results are not material to the Companys condensed consolidated financial statements. The following table displays summarized activity in the Companys condensed consolidated statements of operations for discontinued operations during the six months ended July4, 2009, all of which occurred during the three months ended April4, 2009. The Company had no such activity during the three months ended July4, 2009. Six Months Ended July4, 2009 Net sales $ 19 Operating loss (11) Gains on sales of investments and businesses, net 175 Earnings before income taxes 162 Income tax expense 102 Earnings from discontinued operations, net of tax 60

Other Financial Data

Other Financial Data
	6 Months Ended Jul. 04, 2009 USD / shares
Other Financial Data [Abstract]
Other Financial Data	3.Other Financial Data Statement of Operations Information Other Charges Other charges included in Operating earnings (loss) consist of the following: Three Months Ended Six Months Ended July4, 2009 June28, 2008 July4, 2009 June28, 2008 Amortization of intangible assets $ 70 $ 81 $ 141 $ 164 Reorganization of businesses 49 19 207 93 Facility impairment 39 39 Separation-related transaction costs 20 20 Legal settlements (55) 37 (55) 57 $ 103 $ 157 $ 332 $ 334 During the three months ended July4, 2009, the Company classified a facility as held for sale and wrote it down to its fair value, less estimated selling costs, resulting in an impairment loss of $39million, which was included in Other charges for the period. Other Income (Expense) Interest expense, net, and Other both included in Other income (expense) consist of the following: Three Months Ended Six Months Ended July4, 2009 June28, 2008 July4, 2009 June28, 2008 Interest expense, net: Interest expense $ (49) $ (74) $ (111) $ (152) Interest income 19 64 46 140 $ (30) $ (10) $ (65) $ (12) Other: Mark-to-market on Sigma Fund investments $ 68 $ $ 75 $ Foreign currency gain (loss) (34) 13 (28) 14 Investment impairments (26) (116) (33) (134) Impairment charges on Sigma Fund investments (4) Gain from the extinguishment of the Companys outstanding long-term debt 67 Gain on interest rate swaps 24 Other 15 11 12 3 $ 23 $ (92) $ 93 $ (97) During the three months ended December31, 2007, concurrently with the issuance of debt, the Company entered into several interest rate swaps to convert the fixed rate interest cost of the debt to a floating rate. At the time of entering into these interest rate swaps, the swaps were designated as fair value hedges and qualified for hedge accounting treatment. The swaps were originally designated as fair value hedges of the underlying debt, including the Companys credit spread. During the three months ended March29, 2008, the swaps were no longer considered effective hedges because of the volatility in the price of the Companys fixed-rate domestic term debt and the swaps were dedesignated. In the same period, the Company was able to redesignate the same interest rate swaps as fair value hedges of the underlying debt, exclusive of the Companys credit spread. For the period of time that the swaps were deemed ineffective hedges, the Company recognized a gain of $24million, representing the increase in the fair value of the swaps. Earnings (Loss) Per Common Share The computation of

Debt and Credit Facilities

Debt and Credit Facilities
	6 Months Ended Jul. 04, 2009 USD / shares
Debt and Credit Facilities [Abstract]
Debt and Credit Facilities	4.Debt and Credit Facilities Long-Term Debt During the six months ended July4, 2009, the Company completed the open market purchase of $199million of its outstanding long-term debt for an aggregate purchase price of $133million, including $4million of accrued interest, all of which occurred during the three months ended April4, 2009. Included in the $199million of long-term debt repurchased were repurchases of a principal amount of: (i)$11million of the $400million outstanding of the 7.50%Debentures due 2025, (ii)$20million of the $309million outstanding of the 6.50%Debentures due 2025, (iii)$14million of the $299million outstanding of the 6.50%Debentures due 2028, and (iv)$154million of the $600million outstanding of the 6.625%Senior Notes due 2037. The Company recognized a gain of approximately $67million related to these open market purchases in Other within Other income (expense) in the condensed consolidated statements of operations. Credit Facilities In June 2009, the Company elected to amend its domestic syndicated revolving credit facility (as amended from time to time, the Credit Facility) that is scheduled to mature in December 2011. As part of the amendment, the Company reduced the size of the Credit Facility to the lesser of: (1)$1.5billion, or (2)an amount determined based on eligible domestic accounts receivable and inventory. If the Company elects to borrow under the Credit Facility, it would be required to pledge its domestic accounts receivables and, at its option, domestic inventory. As amended, the Credit Facility does not require the Company to meet any financial covenants unless remaining availability under the Credit Facility is less than $225million. In addition, until borrowings are made under the Credit Facility, the Company is able to use its working capital assets in any capacity in conjunction with other capital market funding alternatives that may be available to the Company. As of and during the six months ended June4, 2009, there were no outstanding borrowings under this Credit Facility.

Risk Management

Risk Management
	6 Months Ended Jul. 04, 2009 USD / shares
Risk Management [Abstract]
Risk Management	5.Risk Management Derivative Financial Instruments Foreign Currency Risk The Company uses financial instruments to reduce its overall exposure to the effects of currency fluctuations on cash flows. The Companys policy prohibits speculation in financial instruments for profit on the exchange rate price fluctuation, trading in currencies for which there are no underlying exposures, or entering into transactions for any currency to intentionally increase the underlying exposure. Instruments that are designated as part of a hedging relationship must be effective at reducing the risk associated with the exposure being hedged and are designated as part of a hedging relationship at the inception of the contract. Accordingly, changes in market values of hedge instruments must be highly correlated with changes in market values of underlying hedged items both at the inception of the hedge and over the life of the hedge contract. The Companys strategy related to foreign exchange exposure management is to offset the gains or losses on the financial instruments against losses or gains on the underlying operational cash flows or investments based on the operating business units assessment of risk. The Company enters into derivative contracts for some of the Companys non-functional currency receivables and payables, which are primarily denominated in major currencies that can be traded on open markets. The Company typically uses forward contracts and options to hedge these currency exposures. In addition, the Company enters into derivative contracts for some firm commitments and some forecasted transactions, which are designated as part of a hedging relationship if it is determined that the transaction qualifies for hedge accounting under the provisions of Statement of Financial Accounting Standards (SFAS) No.133, Accounting for Derivative Instruments and Hedging Activities. A portion of the Companys exposure 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 July4, 2009 and December31, 2008, the Company had outstanding foreign exchange contracts totaling $1.8billion and $2.6billion, respectively. Management believes that these financial instruments should not subject the Company to undue risk due to foreign exchange movements because gains and losses on these contracts should generally offset losses and gains on the underlying assets, liabilities and transactions, except for the ineffective portion of the instruments, which are charged to Other within Other income (expense) in the Companys condensed consolidated statements of operations. The following table shows the five largest net notional amounts of the positions to buy or sell foreign currency as of July4, 2009 and the corresponding positions as of December31, 2008: Notional Amount Net Buy (Sell) by Currency July4, 2009 December31, 2008 Chinese Renminbi $ (469) $ (481) Brazilian Real (401) (356) Euro (297) (445) Japanese Ye

Income Taxes

Income Taxes
	6 Months Ended Jul. 04, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	6.Income Taxes The Company evaluates its deferred income taxes on a quarterly basis to determine if valuation allowances are required by considering available evidence, including historical and projected taxable income and tax planning strategies that are both prudent and feasible. As of December31, 2008, the Companys U.S. operations had generated two consecutive years of pre-tax losses, which are attributable to the Mobile Devices segment. During 2007 and 2008, the Home and Networks Mobility and Enterprise Mobility Solution businesses (collectively referred to as the Broadband Mobility Solutions businesses) were profitable in the U.S.and worldwide. Because of the 2007 and 2008 losses at Mobile Devices and the near-term forecasts for the Mobile Devices business, the Company believes that the weight of negative historic evidence precludes it from considering any forecasted income from the Mobile Devices business in its analysis of the recoverability of deferred tax assets. However, based on the sustained profits of the Broadband Mobility Solutions businesses, the Company believes that the weight of positive historic evidence allows it to include forecasted income from the Broadband Mobility Solutions businesses in its analysis of the recoverability of its deferred tax assets. The Company also considered in its analysis tax planning strategies that are prudent and can be reasonably implemented. Based on all available positive and negative evidence, we concluded that a partial valuation allowance should be recorded against the net deferred tax assets of our U.S. operations. During the year ended December31, 2008, the Company recorded a valuation allowance of $2.1billion for foreign tax credits, general business credits, capital losses and state tax carry forwards that are more likely than not to expire. The Company also recorded valuation allowances of $126million in 2008 relating to tax carryforwards and deferred tax assets of non-U.S.subsidiaries, including Brazil, China and Spain, that the Company believes are more likely than not to expire or go unused. During the six months ended July4, 2009, the Company recorded additional U.S.valuation allowances of approximately $110million, consisting of a $150million increase during the threemonths ended April4, 2009, primarily relating to deferred tax assets generated on the disposition of a subsidiary, offset by a reduction of approximately $40million during the threemonths ended July4, 2009, to reflect an expected cash refund of certain general business credits that the Company plans to claim on its 2008 and 2009 tax returns. Additionally, the Company increased the valuation allowance on non-U.S.subsidiaries by $53million during the six months ended July4, 2009, all of which was recorded during the threemonths ended July4, 2009. The Company had unrecognized tax benefits of $495million and $914million, at July4, 2009 and December31, 2008, respectively, of which approximately $160million and $580million, respectively, if recognized, would affect the effective tax rate, net of resulting changes to valuation allowances. During the six months ended July4, 2009, the Company concluded it

Retirement Benefits

Retirement Benefits
	6 Months Ended Jul. 04, 2009 USD / shares
Retirement Benefits [Abstract]
Retirement Benefits	7.Retirement Benefits Pension Benefit Plans The net periodic pension costs for the Regular Pension Plan, Officers Plan, the Motorola Supplemental Pension Plan (MSPP) and Non-U.S.plans were as follows: July4, 2009 June28, 2008 Three Months Ended Regular Pension Officers and MSPP Non U.S. Regular Pension Officers and MSPP Non U.S. Service cost $ 4 $ $ 5 $ 25 $ 1 $ 2 Interest cost 84 2 15 81 2 1 Expected return on plan assets (95) (1) (12) (98) (1) 3 Amortization of: Unrecognized net loss 19 1 1 13 Unrecognized prior service cost (8) Settlement/curtailment loss 1 1 Net periodic pension cost $ 12 $ 3 $ 9 $ 13 $ 3 $ 6 July4, 2009 June28, 2008 Six Months Ended Regular Pension Officers and MSPP Non U.S. Regular Pension Officers and MSPP Non U.S. Service cost $ 8 $ $ 11 $ 49 $ 1 $ 15 Interest cost 169 4 31 162 3 33 Expected return on plan assets (190) (1) (26) (196) (1) (26) Amortization of: Unrecognized net loss 39 1 2 26 1 Unrecognized prior service cost (15) Settlement/curtailment loss 3 2 Net periodic pension cost $ 26 $ 7 $ 18 $ 26 $ 6 $ 22 During the three months ended July4, 2009, contributions of $20million and $14million were made to the Companys Regular Pension and Non-U.S.plans, respectively. During the six months ended July4, 2009, contributions of $80million and $22million were made to the Companys Regular Pension and Non-U.S.plans, respectively. The Company has amended its Regular Pension Plan, the Officers Plan and MSPP such that: (i)no participant shall accrue any benefits or additional benefits on or after March1, 2009, and (ii)no compensation increases earned by a participant on or after March1, 2009 shall be used to compute any accrued benefit. Postretirement Health Care Benefit Plans Net postretirement health care expenses consist of the following: Three Months Ended Six Months Ended July4, 2009 June28, 2008 July4, 2009 June28, 2008 Service cost $ 1 $ 2 $ 2 $ 3 Interest cost 7 7 14 13 Expected return on plan assets (4) (5) (8) (10) Amortization of: Unrecognized net loss 2 2 4 3 Unrecognized prior service cost (1) (1) (2) (1) Net postretirement health care expense $ 5 $ 5 $ 10 $ 8

Share-Based Compensation Plans

Share-Based Compensation Plans
	6 Months Ended Jul. 04, 2009 USD / shares
Share-Based Compensation Plans [Abstract]
Share-Based Compensation Plans	8.Share-Based Compensation Plans Compensation expense for the Companys employee stock options, stock appreciation rights, employee stock purchase plans, restricted stock and restricted stock units (RSUs) was as follows: Three Months Ended Six Months Ended July4, 2009 June28, 2008 July4, 2009 June28, 2008 Share-based compensation expense included in: Costs of sales $ 8 $ 10 $ 17 $ 18 Selling, general and administrative expenses 43 48 84 95 Research and development expenditures 23 30 49 53 Share-based compensation expense included in Operating earnings (loss) 74 88 150 166 Tax benefit 23 28 47 52 Share-based compensation expense, net of tax $ 51 $ 60 $ 103 $ 114 In the second quarter of 2009, the Companys broad-based equity grant consisted of 34.8million RSUs and 9.7million stock options. The total compensation expense related to RSUs is $162million, net of estimated forfeitures, with a fair market value of $6.22 per RSU. The total compensation expense related to stock options is $26million, net of estimated forfeitures, at a Black-Scholes value of $3.52 per stock option. The expense for substantially all RSUs and stock options will be recognized over a period of 4years. Stock Option Exchange On May14, 2009, the Company initiated a tender offer for certain eligible employees (excluding executive officers and directors) to exchange certain out-of-the-money options for new options with an exercise price equal to the fair market value of the Companys stock as of the grant date. In order to be eligible for the exchange, the options had to have been granted prior to June1, 2007, expire after December31, 2009 and have an exercise price equal to or greater than $12.00. The offering period closed on June12, 2009. On that date, 97million options were tendered and exchanged for 43million new options with an exercise price of $6.73 and a ratable annual vesting period over two years. The exchange program was designed so that the fair market value of the new options would not be greater than the fair market value of the options exchanged. The resulting incremental compensation expense was not material to the Companys consolidated financial statements.

Fair Value Measurements

Fair Value Measurements
	6 Months Ended Jul. 04, 2009 USD / shares
Fair Value Measurements
Fair Value Measurements	9.Fair Value Measurements The Company adopted Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No.157, Fair Value Measurements (SFAS157) on January1, 2008 for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. SFAS157 defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value measurements. SFAS157 does not change the accounting for those instruments that were, under previous GAAP, accounted for at cost or contract value. In February 2008, the FASB issued Staff Position No.157-2 (FSP157-2), which delays the effective date of SFAS157 one year for all non-financial assets and non-financial liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis. Under FSP157-2, the Company has applied the measurement criteria of SFAS157 to the remaining assets and liabilities as of the second quarter of 2009. The Company has no non-financial assets and liabilities that are required to be measured at fair value on a recurring basis as of July4, 2009. The Company holds certain fixed income securities, equity securities and derivatives, which must be measured using the SFAS157 prescribed fair value hierarchy and related valuation methodologies. SFAS157 specifies a hierarchy of valuation techniques based on whether the inputs to each measurement are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Companys assumptions about current market conditions. The prescribed fair value hierarchy and related valuation methodologies are as follows: Level1Quoted prices for identical instruments in active markets. Level2Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets. Level3Valuations derived from valuation techniques, in which one or more significant inputs are unobservable. The levels of the Companys financial assets and liabilities that are carried at fair value were as follows: July4, 2009 Level 1 Level 2 Level 3 Total Assets: Sigma Fund securities: U.S. government and agency obligations $ $ 2,086 $ $ 2,086 Corporate bonds 1,241 62 1,303 Asset-backed securities 83 10 93 Mortgage-backed securities 71 8 79 Available-for-sale securities: U.S. government and agency obligations 26 26 Corporate bonds 13 13 Asset-backed securities 1 1 Mortgage-backed securities 3 3 Common stock and equivalents 78 78 Derivative assets 21 21 Liabilities: Derivative liabilities

Long-term Customer Financing

Long-term Customer Financing
	6 Months Ended Jul. 04, 2009 USD / shares
Long-term Customer Financing
Long-term Customer Financing and sales of receivables	10.Long-term Customer Financing and Sales of Receivables Long-term Customer Financing Long-term receivables consist of trade receivables with payment terms greater than twelve months, long-term loans and lease receivables under sales-type leases. Long-term receivables consist of the following: July4, 2009 December31, 2008 Long-term receivables $ 110 $ 169 Less allowance for losses (3) (7) 107 162 Less current portion (37) (110) Non-current long-term receivables, net $ 70 $ 52 The current portion of long-term receivables is included in Accounts receivable and the non-current portion of long-term receivables is included in Other assets in the Companys condensed consolidated balance sheets. Certain purchasers of the Companys infrastructure equipment may request that the Company provide long-term financing (defined as financing with terms greater than one year) in connection with the sale of equipment. These requests may include all or a portion of the purchase price of the equipment. However, the Companys obligation to provide long-term financing is often conditioned on the issuance of a letter of credit in favor of the Company by a reputable bank to support the purchasers credit or a pre-existing commitment from a reputable bank to purchase the long-term receivables from the Company. The Company had outstanding commitments to provide long-term financing to third parties totaling $343million and $370million at July4, 2009 and December31, 2008, respectively. Of these amounts, $14million and $266million were supported by letters of credit or by bank commitments to purchase long-term receivables at July4, 2009 and December31, 2008, respectively. In addition to providing direct financing to certain equipment customers, the Company also assists customers in obtaining financing directly from banks and other sources to fund equipment purchases. The Company had committed to provide financial guarantees relating to customer financing totaling $30million and $43million at July4, 2009 and December31, 2008, respectively (including $22million and $23million at July4, 2009 and December31, 2008, respectively, relating to the sale of short-term receivables). Customer financing guarantees outstanding were $3million and $6million at July4, 2009 and December31, 2008, respectively (including $1million and $4million at July4, 2009 and December31, 2008, respectively, relating to the sale of short-term receivables). Sales of Receivables From time to time, the Company sells accounts receivable and long-term receivables in transactions that qualify as true-sales. Certain of these accounts receivable and long-term receivables are sold to third parties on a one-time, non-recourse basis, while others are sold to third parties under committed facilities that involve contractual commitments from these parties to purchase qualifying receivables up to an outstanding monetary limit. Committed facilities may be revolving in nature and, typically, must be renewed annually. The Company may or may not retain the obliga

Commitments and Contingencies

Commitments and Contingencies
	6 Months Ended Jul. 04, 2009 USD / shares
Commitments and Contingencies
Commitments and Contingencies	11.Commitments and Contingencies Legal The Company is a defendant in various suits, claims and investigations that arise in the normal course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Companys consolidated financial position, liquidity or results of operations. Other The Company is also a party to a variety of agreements pursuant to which it is obligated to indemnify the other party with respect to certain matters. Some of these obligations arise as a result of divestitures of the Companys assets or businesses and require the Company to hold the other party harmless against losses arising from the settlement of these pending obligations. The total amount of indemnification under these types of provisions is $151million, of which the Company accrued $55million at July4, 2009 for potential claims under these provisions. In addition, the Company may provide indemnifications for losses that result from the breach of general warranties contained in certain commercial and intellectual property. Historically, the Company has not made significant payments under these agreements. However, there is an increasing risk in relation to patent indemnities given the current legal climate. In indemnification cases, payment by the Company is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, which procedures typically allow the Company to challenge the other partys claims. Further, the Companys obligations under these agreements for indemnification based on breach of representations and warranties are generally limited in terms of duration, and for amounts not in excess of the contract value, and, in some instances, the Company may have recourse against third parties for certain payments made by the Company.

Segment Information

Segment Information
	6 Months Ended Jul. 04, 2009 USD / shares
Segment Information
Segment Information	12.Segment Information The Company reports financial results for the following operating business segments: The Mobile Devices segment designs, manufactures, sells and services wireless handsets with integrated software and accessory products, and licenses intellectual property. The Home and Networks Mobility segment designs, manufactures, sells, installs and services: (i)digital video, Internet Protocol video and broadcast network interactive set-tops (digital entertainment devices), end-to-end video delivery systems, broadband access infrastructure platforms, and associated data and voice customer premise equipment to cable television and telecom service providers (collectively, referred to as the home business), and (ii)wireless access systems, including cellular infrastructure systems and wireless broadband systems, to wireless service providers (collectively, referred to as the network business). The Enterprise Mobility Solutions segment designs, manufactures, sells, installs and services analog and digital two-way radio, voice and data communications products and systems for private networks, wireless broadband systems and end-to-end enterprise mobility solutions to a wide range of enterprise markets, including government and public safety agencies (which, together with all sales to distributors of two-way communication products, are referred to as the government and public safety market), as well as retail, energy and utilities, transportation, manufacturing, healthcare and other commercial customers (which, collectively, are referred to as the commercial enterprise market). The following table summarizes the Net sales and Operating earnings (loss) by operating business segment: Net Sales Operating Earnings (Loss) Three Months Ended July4, 2009 June28, 2008 July4, 2009 June28, 2008 Mobile Devices $ 1,829 $ 3,334 $ (253) $ (346) Home and Networks Mobility 2,001 2,738 153 245 Enterprise Mobility Solutions 1,685 2,042 227 377 5,515 8,114 127 276 Other and Eliminations (18) (32) (117) (271) Net sales $ 5,497 $ 8,082 Operating earnings (loss) 10 5 Total other income (expense) 23 (63) Earnings (loss) from continuing operations before income taxes $ 33 $ (58) Net Sales Operating Earnings (Loss) Six Months Ended July4, 2009 June28, 2008 July4, 2009 June28, 2008 Mobile Devices $ 3,630 $ 6,633 $ (762) $ (764) Home and Networks Mobility 3,992 5,121 268 398 Enterprise Mobility Solutions 3,284 3,848 383 627 10,906 15,602 (111) 261 Other and Eliminations (38) (72) (328) (525) Net sales $ 10,868 $ 15,530 Operating earnings (l

Reorganization of Businesses

Reorganization of Businesses
	6 Months Ended Jul. 04, 2009 USD / shares
Reorganization of Businesses
Reorganization of Business	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 as a result of a reduction-in-force or restructuring. The Company recognizes termination benefits based on formulas per the Severance Plan at the point in time that future settlement is probable and can be reasonably estimated based on estimates prepared at the time a restructuring plan is approved by management. Exit costs consist of future minimum lease payments on vacated facilities and other contractual terminations. At each reporting date, the Company evaluates its accruals for employee separation and exit costs to ensure the accruals are still appropriate. In certain circumstances, accruals are no longer needed because of efficiencies in carrying out the plans or because employees previously identified for separation resigned from the Company and did not receive severance or were redeployed due to circumstances not foreseen when the original plans were initiated. In these cases, the Company reverses accruals through the condensed consolidated statements of operations where the original charges were recorded when it is determined they are no longer needed. 2009 Charges During the six months ended July4, 2009, the Company committed to implement various productivity improvement plans aimed at achieving long-term, sustainable profitability by driving efficiencies and reducing operating costs. All three of the Companys business segments, as well as corporate functions, are impacted by these plans, with the majority of the impact in the Mobile Devices segment. The employees affected are located in all regions. During the three months ended July4, 2009, the Company recorded net reorganization of business charges of $58million, including $9million of charges in Costs of sales and $49million of charges under Other charges in the Companys condensed consolidated statements of operations. Included in the aggregate $58million are charges of $60million for employee separation costs, $18million for exit costs and $1million for fixed asset impairment charges, partially offset by $21million of reversals for accruals no longer needed. During the six months ended July4, 2009, the Company recorded net reorganization of business charges of $262million, including $55million of charges in Costs of sales and $207million of charges under Other charges in the Companys condensed consolidated statements of operations. Included in the aggregate $262million are charges of $264million for employee separation costs, $22million for exit costs and $18million for fixed asset impairment charges, partially offset by $42million of reversals for accruals no longer needed. The following table displays the net charges incurred by business segment: July4, 2009 Three Months Ended Six Months Ended Mobile Devices $ 33 $ 161 Home and Networks Mobility 12 33 Enterprise Mobility Solutions

Acquisitions related Intangible

Acquisitions related Intangibles
	6 Months Ended Jul. 04, 2009 USD / shares
Acquisitions related Intangibles
Acquisitions related Intangibles	14.Acquisitions related Intangibles Intangible Assets Amortized intangible assets were comprised of the following: July4, 2009 December31, 2008 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Completed technology $ 1,121 $ 710 $ 1,127 $ 633 Patents 288 151 292 125 Customer-related 276 125 277 104 Licensed technology 130 120 129 118 Other intangibles 149 131 150 126 $ 1,964 $ 1,237 $ 1,975 $ 1,106 Amortization expense on intangible assets, which is included within Other and Eliminations, was $70million and $81million for the three months ended July4, 2009 and June28, 2008, respectively, and $141million and $164million for the six months ended July4, 2009 and June28, 2008, respectively. As of July4, 2009, annual amortization expense is estimated to be $278million for 2009, $256million in 2010, $242million in 2011, $49million in 2012 and $29million in 2013. Amortized intangible assets, excluding goodwill, by business segment: July4, 2009 December31, 2008 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Mobile Devices $ 45 $ 45 $ 45 $ 45 Home and Networks Mobility 712 544 722 522 Enterprise Mobility Solutions 1,207 648 1,208 539 $ 1,964 $ 1,237 $ 1,975 $ 1,106 Goodwill The following tables display a rollforward of the carrying amount of goodwill from January1, 2009 to July4, 2009, by business segment: January1, 2009 Adjustments(1) Dispositions July4, 2009 Home and Networks Mobility $ 1,409 $ (3) $ $ 1,406 Enterprise Mobility Solutions 1,428 (1) (11) 1,416 $ 2,837 $ (4) $ (11) $ 2,822 (1) Includes translation adjustments.

Document Information

Document Information
	6 Months Ended Jul. 04, 2009 USD / shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-07-04

Entity Information

Entity Information (USD $)
In Billions, except Share data	6 Months Ended Jul. 04, 2009	Dec. 31, 2008
Entity Information [Line Items]
Entity Registrant Name	Motorola, Inc.
Entity Central Index Key	0000068505
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		16.7
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding	2,295,364,214