Motorola Solutions (MSI) 10-Q 4 May 10 2010 Q1 Quarterly report Financial data

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (USD $)
In Millions, except Per Share data	3 Months Ended Apr. 03, 2010	3 Months Ended Apr. 04, 2009
Condensed Consolidated Statements of Operations
Net sales	$5,044	$5,371
Costs of sales	3,258	3,875
Gross margin	1,786	1,496
Selling, general and administrative expenses	876	869
Research and development expenditures	757	847
Other charges	77	229
Operating earnings (loss)	76	(449)
Other income (expense):
Interest expense, net	(33)	(35)
Gain (loss) on sales of investments and businesses, net	8	(20)
Other	12	70
Total other income (expense)	(13)	15
Earnings (loss) from continuing operations before income taxes	63	(434)
Income tax benefit	(5)	(146)
Earnings (loss) from continuing operations	68	(288)
Earnings from discontinued operations, net of tax		60
Net earnings (loss)	68	(228)
Less: Earnings (loss) attributable to noncontrolling interests	(1)	3
Net earnings (loss) attributable to Motorola, Inc.	69	(231)
Amounts attributable to Motorola, Inc. common shareholders:
Earnings (loss) from continuing operations, net of tax	69	(291)
Earnings from discontinued operations, net of tax		60
Net earnings (loss)	$69	($231)
Basic:
Continuing operations (in dollars per share)	0.03	-0.13
Discontinued operations (in dollars per share)		0.03
Earnings (Loss) Per Share, Basic (in dollars per share)	0.03	-0.1
Diluted:
Continuing operations (in dollars per share)	0.03	-0.13
Discontinued operations (in dollars per share)		0.03
Earnings (Loss) Per Share, Diluted (in dollars per share)	0.03	-0.1
Weighted average common shares outstanding:
Basic (in shares)	2315.7	2280.5
Diluted (in shares)	2341.3	2280.5
Dividends paid per share (in dollars per share)	$0	0.05

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (USD $)
In Millions	Apr. 03, 2010	Dec. 31, 2009
ASSETS
Cash and cash equivalents	$3,188	$2,869
Sigma Fund	5,174	5,092
Short-term investments	6	2
Accounts receivable, net	3,086	3,495
Inventories, net	1,251	1,308
Deferred income taxes	1,125	1,082
Other current assets	2,066	2,184
Total current assets	15,896	16,032
Property, plant and equipment, net	2,088	2,154
Sigma Fund	116	66
Investments	408	459
Deferred income taxes	2,253	2,284
Goodwill	2,830	2,823
Other assets	1,669	1,785
Total assets	25,260	25,603
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable and current portion of long-term debt	532	536
Accounts payable	2,147	2,429
Accrued liabilities	5,194	5,296
Total current liabilities	7,873	8,261
Long-term debt	3,372	3,365
Other liabilities	3,970	4,094
Stockholders' Equity
Preferred stock, $100 par value	0	0
Common stock: 04/03/10 - $.01 par value; 12/31/09 - $.01 par value Authorized shares: 04/03/10-4,200.0; 12/31/09-4,200.0 Issued shares: 04/03/10 - 2,326.7; 12/31/09 - 2,314.2 Outstanding shares: 04/03/10 - 2,324.1; 12/31/09 - 2,312.1	23	23
Additional paid-in capital	8,336	8,211
Retained earnings	3,896	3,827
Accumulated other comprehensive loss	(2,311)	(2,286)
Total Motorola, Inc. stockholders' equity	9,944	9,775
Noncontrolling interests	101	108
Total stockholders' equity	10,045	9,883
Total liabilities and stockholders' equity	$25,260	$25,603

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Share data in Millions, except Per Share data	Apr. 03, 2010	Dec. 31, 2009
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$100	$100
Common stock, par value (in dollars per share)	0.01	0.01
Common stock, Authorized shares	4,200	4,200
Common stock, Issued shares	2326.7	2314.2
Common stock, Outstanding shares	2324.1	2312.1

2_Condensed Consolidated Statem

Condensed Consolidated Statement of Stockholders' Equity (USD $)
In Millions	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 Interests	Comprehensive Earnings (Loss)	Total
Balances at Dec. 31, 2009	$8,234	$70	($63)	($2,295)	$2	$3,827	$108		$9,883
Balance (in shares) at Dec. 31, 2009	2314.2
Increase (Decrease) in Stockholders' Equity
Net earnings (loss)						69	(1)	68	68
Net unrealized gain on securities, net of tax of $(14)		(24)						(24)
Foreign currency translation adjustments, net of tax of $4			(56)					(56)
Amortization of retirement benefit adjustments, net of tax of $15				31				31
Curtailment adjustment, net of tax of $0				22				22
Issuance of common stock and stock options exercised	58
Issuance of common stock and stock options exercised (in shares)	12.5
Tax shortfalls from stock-based compensation	(5)
Share-based compensation expense	72
Net gain on derivative instruments, net of tax of $1					2			2
Dividends paid to noncontrolling interest on subsidiary common stock							(6)
Balances at Apr. 03, 2010	$8,359	$46	($119)	($2,242)	$4	$3,896	$101	$43	$10,045
Balance (in shares) at Apr. 03, 2010	2326.7

3_Condensed Consolidated Statem

Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) (USD $)
In Millions	3 Months Ended Apr. 03, 2010
Condensed Consolidated Statement of Stockholders' Equity
Net unrealized gain on securities, tax	($14)
Foreign currency translation adjustments, tax	4
Amortization of retirement benefit adjustments, tax	15
Curtailment adjustment, tax	0
Net gain on derivative instruments, tax	$1

4_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (USD $)
In Millions	3 Months Ended Apr. 03, 2010	3 Months Ended Apr. 04, 2009
Operating
Net earnings (loss) attributable to Motorola, Inc.	$69	($231)
Earnings (loss) attributable to noncontrolling interests	(1)	3
Net earnings (loss)	68	(228)
Earnings from discontinued operations		60
Earnings (loss) from continuing operations	68	(288)
Adjustments to reconcile earnings (loss) from continuing operations to net cash provided by (used for) operating activities:
Depreciation and amortization	173	190
Non-cash other charges (income)	(21)	4
Share-based compensation expense	72	76
Loss (gain) on sales of investments and businesses, net	(8)	20
Gain from the extinguishment of long-term debt		(67)
Deferred income taxes	(22)	(197)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable	411	(204)
Inventories	58	582
Other current assets	114	217
Accounts payable and accrued liabilities	(388)	(1,355)
Other assets and liabilities	28	8
Net cash provided by (used for) operating activities	485	(1,014)
Investing
Acquisitions and investments, net	(23)	(15)
Proceeds from sales of investments and businesses, net	22	137
Capital expenditures	(70)	(71)
Proceeds from sales of property, plant and equipment	28	3
Proceeds from sales (purchases) of Sigma Fund investments, net	(116)	1,319
Proceeds from sales (purchases) of short-term investments, net	(4)	206
Net cash provided by (used for) investing activities	(163)	1,579
Financing
Repayment of short-term borrowings, net	(4)	(31)
Repayment of debt	(2)	(129)
Issuance of common stock	63	56
Payment of dividends		(114)
Other, net	(8)
Net cash provided by (used for) financing activities	49	(218)
Effect of exchange rate changes on cash and cash equivalents from continuing operations	(52)	(146)
Net increase in cash and cash equivalents	319	201
Cash and cash equivalents, beginning of period	2,869	3,064
Cash and cash equivalents, end of period	3,188	3,265
Cash paid during the period for:
Interest, net	20	28
Income taxes, net of refunds	$44	$51

Basis of Presentation

Basis of Presentation
	3 Months Ended Apr. 03, 2010
Basis of Presentation
Basis of Presentation	1.Basis of Presentation The condensed consolidated financial statements as of April3, 2010 and for the three months ended April3, 2010 and April4, 2009, include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly Motorola, Inc.'s (the "Company's") 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 Company's Form10-K for the year ended December31, 2009. The results of operations for the three months ended April3, 2010 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 2010 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. Change in Segment Presentation On February11, 2010, the Company announced that it is targeting the first quarter of 2011 for the completion of its planned separation into two independent, publicly traded companies. The Company currently expects that, upon separation, one public company will be comprised of the Company's Mobile Devices and Home businesses and the other public company will be comprised of the Company's Enterprise Mobility Solutions and Networks businesses. As a result of this announcement, Motorola,Inc. has realigned its businesses as of the first quarter of 2010 and now reports financial results for the following four operating business segments: Mobile Devices:This segment designs, manufactures, sells and services wireless handsets, including smartphones, with integrated software and accessory products, and licenses intellectual property. Home:This segment designs, manufactures, sells, installs and services digital video, Internet Protocol video and broadcast network interactive set-tops, end-to-end video distribution systems, broadband access infrastructure platforms, and associated data and voice customer premise equipment for cable television and telecom service providers. Enterprise Mobility Solutions:This segment designs, manufactures, sells, installs and services analog and digital two-way radios, wireless LAN and security products, voice and data communications products and systems for private networks, wireless broadband systems and end-to-end enterprise mobility solutions. Networks:This segment designs, manufactures, sells, installs and services wireless network

Discontinued Operations

Discontinued Operations
	3 Months Ended Apr. 03, 2010
Discontinued Operations
Discontinued Operations	2.Discontinued Operations During the three months ended April4, 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 Company's condensed consolidated statements of operations. The operating results of these businesses, formerly included as part of the Enterprise Mobility Solutions segment, are reported as discontinued operations in the condensed consolidated financial statements for the period ending April4, 2009. The following table displays summarized activity in the Company's condensed consolidated statements of operations for discontinued operations during the three months ended April4, 2009. Three Months Ended April4, 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
	3 Months Ended Apr. 03, 2010
Other Financial Data
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 April3, 2010 April4, 2009 Other charges: Amortization of intangible assets $ 65 $ 71 Separation-related transaction costs 25 Reorganization of businesses 16 158 Legal settlement (29 ) $ 77 $ 229 Other Income (Expense) Interest expense, net, and Other both included in Other income (expense) consist of the following: Three Months Ended April3, 2010 April4, 2009 Interest income (expense), net: Interest expense $ (61 ) $ (62 ) Interest income 28 27 $ (33 ) $ (35 ) Other: Gain on Sigma Fund investments $ 16 $ 7 Foreign currency gains 3 6 Investment impairments (9 ) (7 ) Gain from the extinguishment of the Company's outstanding long-term debt 67 Other 2 (3 ) $ 12 $ 70 Earnings (Loss) Per Common Share The computation of basic and diluted earnings (loss) per common share attributable to Motorola, Inc. common shareholders is as follows: Amounts attributable to Motorola, Inc. common shareholders Continuing Operations Net Earnings (Loss) Three Months Ended April3, 2010 April4, 2009 April3, 2010 April4, 2009 Basic earnings (loss) per common share: Earnings (loss) $ 69 $ (291 ) $ 69 $ (231 ) Weighted average common shares outstanding 2,315.7 2,280.5 2,315.7 2,280.5 Per share amount $ 0.03 $ (0.13 ) $ 0.03 $ (0.10 ) Diluted earnings (loss) per common share: Earnings (loss) $ 69 $ (291 ) $ 69 $ (231 ) Weighted average common shares outstanding 2,315.7 2,280.5 2,315.7 2,280.5 Add effect of dilutive securities: Share-based awards and other 25.6 25.6 Diluted weighted average common shares outstanding 2,341.3 2,280.5 2,341.3 2,280.5 Per share amount $ 0.03 $ (0.13 ) $ 0.03 $ (0.10 ) In the computation of diluted earnings per common share from both continuing operations and on a net earnings basis for the three months ended April3, 2010, the assumed exercise of 144.4million stock options and the assumed vesting of 39.0million restricted stock units were excluded because their inclusion would have been antidilutive. For the three months ended April4, 2009, the Company was in a net loss position and, accordingly, the basic and diluted weighted average shares outstanding are equal because any increase to the basic shares would be antidilutive. Balance Sheet Information Cash and Cash Equivalents The Company's cash and cash equivalents (which are highly-liquid investments with an original maturity of three months or less) were $3.2billion

Debt and Credit Facilities

Debt and Credit Facilities
	3 Months Ended Apr. 03, 2010
Debt and Credit Facilities
Debt and Credit Facilities	4.Debt and Credit Facilities Long-Term Debt During the three months ended April4, 2009, the Company repurchased $199million of its outstanding long-term debt for an aggregate purchase price of $133million, including $4million of accrued interest. The $199million of long-term debt repurchased included principal amounts of: (i)$11million of the $358million then outstanding of the 7.50% Debentures due 2025, (ii)$20million of the $399million then outstanding of the 6.50% Debentures due 2025, (iii)$14million of the $299million then outstanding of the 6.50% Debentures due 2028, and (iv)$154million of the $600million then 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 consolidated statements of operations.

Risk Management

Risk Management
	3 Months Ended Apr. 03, 2010
Risk Management
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 Company's 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 the market values of hedge instruments must be highly correlated with changes in market values of the underlying hedged items both at the inception of the hedge and over the life of the hedge contract. The Company's 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 Company's 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 the authoritative accounting guidance for derivative instruments and hedging activities. A portion of the Company's 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. April3, 2010 and December31, 2009, the Company had outstanding foreign exchange contracts with notional values totaling $1.5billion and $1.7billion, 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 Company's 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 April3, 2010 and the corresponding positions as of December31, 2009: Notional Amount Net Buy (Sell) by Currency April3, 2010 December31, 2009 Chinese Renminbi $ (386 ) $ (297 ) Brazilian Real (318 ) (342 ) Euro (284 ) (377 ) Japanese Yen (129 ) (236 ) British Pound

Income Taxes

Income Taxes
	3 Months Ended Apr. 03, 2010
Income Taxes
Income Taxes	6.Income Taxes At April3, 2010 and December31, 2009, the Company had valuation allowances of $2.9billion, including $403million and $422million, respectively, relating to deferred tax assets for non-U.S. subsidiaries. During the three months ended April3, 2010, there was no adjustment to the U.S. valuation allowance. The valuation allowance relating to deferred tax assets of non-U.S. subsidiaries was adjusted primarily for exchange rate variances. In March 2008, the Company announced a strategy to separate into two publicly-traded companies. In February 2010, the Company announced that it is targeting the first quarter of 2011 for the completion of this separation. When evaluating the Company's valuation allowances the Company is precluded from taking into consideration events dependent on future market conditions, such as the announced separation transaction. The Company will reassess its valuation allowance needs based on two separate publicly traded companies in the period the separation transaction occurs or when the transaction is imminent. The valuation allowances determined for two separate publicly traded companies may differ from the Company's current valuation allowance balances. In the first quarter of 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 were signed into law, which eliminated the favorable income tax treatment of Medicare PartD Subsidy receipts effective for tax years starting in 2013. As a result of the tax law change, the Company recorded an $18million non-cash tax charge to reduce its deferred tax asset associated with Medicare PartD subsidies currently estimated to be received after 2012. The Company had unrecognized tax benefits of $401million and $466million, at April3, 2010 and December31, 2009, respectively, of which approximately $80million and $100million, respectively, if recognized, would affect the effective tax rate, net of resulting changes to valuation allowances. During the three months ended April3, 2010, the Company recorded a $53million tax benefit representing a reduction in unrecognized tax benefits relating to facts that now indicate the extent to which certain tax positions are more-likely-than-not of being sustained. 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 12months. The associated net tax impact on the effective tax rate, exclusive of valuation allowance changes, is estimated to be in the range of a $75million tax charge to a $175million tax benefit, with cash payments in the range of $0 to $150million. During the first quarter of 2010, the Internal Revenue Service ("IRS") concluded its audit of Symbol's 2004 through January9, 2007 pre-acquisition tax years. The Company has audits pending in several tax jurisdictions. Although the final resolution of the Company's global tax disputes is uncertain, based on current information, in the opinion of the Company's

Retirement Benefits

Retirement Benefits
	3 Months Ended Apr. 03, 2010
Retirement Benefits
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: April3, 2010 April4, 2009 Three Months Ended Regular Pension Officers' and MSPP Non U.S. Regular Pension Officers' and MSPP Non U.S. Service cost $ $ $ 7 $ 4 $ $ 6 Interest cost 86 1 28 85 2 16 Expected return on plan assets (95 ) (28 ) (95 ) (14 ) Amortization of: Unrecognized net loss 38 1 6 20 1 Unrecognized prior service cost (1 ) Settlement/curtailment loss 1 2 Net periodic pension cost $ 29 $ 3 $ 12 $ 14 $ 4 $ 9 During the three months ended April3, 2010, contributions of $20million were made to the Company's Non-U.S. plans and no contributions were made to the Company's Regular Pension Plan. During the first three months of 2010, the Company recognized a curtailment in one of its Non-U.S. plans resulting in a reduction of the amounts recognized in Accumulated Other Comprehensive Income of $22million. No gain or loss was recognized in the Company's condensed consolidated statement of operations as a result of the curtailment. Postretirement Health Care Benefit Plans Net postretirement health care expenses consist of the following: Three Months Ended April3, 2010 April4, 2009 Service cost $ 2 $ 1 Interest cost 6 7 Expected return on plan assets (4 ) (4 ) Amortization of: Unrecognized net loss 3 2 Unrecognized prior service cost (1 ) (1 ) Net postretirement health care expense $ 6 $ 5 The Company made no contributions to its postretirement healthcare fund during the three months ended April3, 2010.

Share-Based Compensation Plans

Share-Based Compensation Plans
	3 Months Ended Apr. 03, 2010
Share-Based Compensation Plans
Share-Based Compensation Plans	8.Share-Based Compensation Plans Compensation expense for the Company's employee stock options, stock appreciation rights, employee stock purchase plans, restricted stock and restricted stock units ("RSUs") was as follows: Three Months Ended April3, 2010 April4, 2009 Share-based compensation expense included in: Costs of sales $ 8 $ 9 Selling, general and administrative expenses 42 41 Research and development expenditures 22 26 Share-based compensation expense included in Operating earnings (loss) 72 76 Tax benefit 24 24 Share-based compensation expense, net of tax $ 48 $ 52 Decrease in basic earnings per share $ (0.02 ) $ (0.02 ) Decrease in diluted earning per share $ (0.02 ) $ (0.02 )

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Apr. 03, 2010
Fair Value Measurements
Fair Value Measurements	9.Fair Value Measurements The Company holds certain fixed income securities, equity securities and derivatives, which must be measured using the fair value hierarchy and related valuation methodologies. The guidance 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 Company's assumptions about current market conditions. The prescribed fair value hierarchy and related valuation methodologies are as follows: Level1 Quoted prices for identical instruments in active markets. Level2 Quoted 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. Level3 Valuations derived from valuation techniques, in which one or more significant inputs are unobservable. The fair values of the Company's financial assets and liabilities by level in the fair value hierarchy as of April3, 2010 and December31, 2009 were as follows: April3, 2010 Level1 Level2 Level3 Total Assets: Sigma Fund securities: U.S. government, agency and government-sponsored enterprise obligations $ $ 4,894 $ $ 4,894 Corporate bonds 173 22 195 Asset-backed securities 45 45 Mortgage-backed securities 50 50 Available-for-sale securities: U.S. government, agency and government-sponsored enterprise obligations 23 23 Corporate bonds 11 11 Mortgage-backed securities 3 3 Common stock and equivalents 114 10 124 Foreign exchange derivative contracts 15 15 Liabilities: Foreign exchange derivative contracts 8 8 Interest agreement derivative contracts 4 4 December31, 2009 Level1 Level2 Level3 Total Assets: Sigma Fund securities: U.S. government, agency and government-sponsored enterprise obligations $ $ 4,408 $ $ 4,408 Corporate bonds 411 19 430 Asset-backed securities 66 66 Mortgage-backed securities 52 52 Available-for-sale securities: U.S. government, agency and government-sponsored enterprise obligations 23 23 Corporate bonds 10 10 Mortgage-backed securities 3 3 Common stock and equivalents 136 11 147 Foreign exchange derivative contracts 15 15 Liabilities: Foreign exchange derivative contracts 17 17 Interest agreement derivative contracts 4 4 The following table summarizes the changes in fair va

Long-term Customer Financing an

Long-term Customer Financing and Sales of Receivables
	3 Months Ended Apr. 03, 2010
Long-term Customer Financing and Sales of Receivables
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: April3, 2010 December31, 2009 Long-term receivables $ 152 $ 154 Less allowance for losses (9 ) (9 ) 143 145 Less current portion (20 ) (28 ) Non-current long-term receivables, net $ 123 $ 117 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 Company's condensed consolidated balance sheets. Certain purchasers of the Company's infrastructure equipment may request that the Company provide long-term financing (defined as financing with a term of 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. The Company's obligation to provide long-term financing may be conditioned on the issuance of a letter of credit in favor of the Company by a reputable bank to support the purchaser's 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 $443million and $444million at April3, 2010 and December31, 2009, respectively. Of these amounts, $10million and $13million were supported by letters of credit or by bank commitments to purchase long-term receivables at April3, 2010 and December31, 2009, respectively. The majority of the outstanding commitments at April3, 2010 are to a small number of network operators in the Middle East region. In response to the recent tightening in the credit markets, certain customers of the Company have requested financing in connection with equipment purchases, and these types of requests have increased in volume and scope. 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 $31million at April3, 2010 and December31, 2009, respectively (including $26million and $27million at April3, 2010 and December31, 2009, respectively, relating to the sale of short-term receivables). Customer financing guarantees outstanding were $3million and $4million at April3, 2010 and December31, 2009, respectively (including $1million and $2million at April3, 2010 and December31, 2009, 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 other

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Apr. 03, 2010
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 Company's 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 Company's 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 $143million, of which the Company accrued $51million at April3, 2010 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 party's claims. Further, the Company's 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
	3 Months Ended Apr. 03, 2010
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, including smartphones, with integrated software and accessory products, and licenses intellectual property. The Home segment designs, manufactures, sells, installs and services digital video, Internet Protocol ("IP") video and broadcast network interactive set-tops, end-to-end video distribution systems, broadband access infrastructure platforms, and associated data and voice customer premise equipment to cable television and telecom service providers. The Enterprise Mobility Solutions segment designs, manufactures, sells, installs and services analog and digital two-way radios, wireless LAN and security products, voice and data communications products and systems for private networks, wireless broadband systems and end-to-end enterprise mobility solutions. The Networks segment designs, manufactures, sells, installs and services wireless network systems, including cellular infrastructure systems and wireless and cellular broadband systems, to wireless service providers. The following table summarizes the Net sales and Operating earnings (loss) by operating business segment: Net Sales Operating Earnings (Loss) Three Months Ended April3, 2010 April4, 2009 April3, 2010 April4, 2009 Mobile Devices $ 1,641 $ 1,801 $ (192 ) $ (545 ) Home 838 1,025 20 3 Enterprise Mobility Solutions 1,694 1,599 141 66 Networks 896 966 112 62 5,069 5,391 81 (414 ) Other and Eliminations (25 ) (20 ) (5 ) (35 ) $ 5,044 $ 5,371 Operating earnings (loss) 76 (449 ) Total other income (expense) (13 ) 15 Earnings (loss) from continuing operations before income taxes $ 63 $ (434 ) The Operating loss in Other and Eliminations consists of the following: Three Months Ended April3, 2010 April4, 2009 Separation-related transaction costs $ 25 $ Corporate expenses 11 10 Reorganization of business charges (2 ) 25 Legal settlements (29 ) $ 5 $ 35 Corporate expense are primarily comprised of: (i)general corporate-related expenses, and (ii)the Company's wholly-owned finance subsidiary.

Reorganization of Businesses

Reorganization of Businesses
	3 Months Ended Apr. 03, 2010
Reorganization of Businesses
Reorganization of Businesses	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 consolidated statements of operations where the original charges were recorded when it is determined they are no longer needed. 2010 Charges During the three months ended April3, 2010, the Company continued to implement various productivity improvement plans aimed at achieving long-term, sustainable profitability by driving efficiencies and reducing operating costs. All four of the Company's business segments are impacted by these plans, with the majority of the impact in the Mobile Devices segment. The employees affected are located in all geographic regions. During the three months ended April3, 2010, the Company recorded net reorganization of business charges of $21million, including $5million of charges in Costs of sales and $16million of charges under Other charges in the Company's consolidated statements of operations. Included in the aggregate $21million are charges of $32million for employee separation costs, partially offset by $11million of reversals for accruals no longer needed. The following table displays the net charges incurred by business segment: Three Months Ended April3, 2010 Mobile Devices $ 15 Home 5 Enterprise Mobility Solutions 2 Networks 1 23 Corporate (2 ) $ 21 The following table displays a rollforward of the reorganization of businesses accruals established for exit costs and employee separation costs from January1, 2010 to April3, 2010: Accrualsat January1, 2010 Additional Charges Adjustments Amount Used Accrualsat April3, 2010 Exit costs $ 58 $ $ (3 ) $ (5 ) $ 50 Employee separation costs 80 32 (9 ) (46 ) 57 $ 138 $ 32 $ (12 ) $ (51 ) $ 107 Adjustments include translation adjustments. Exit Costs At January1, 2010, the Company had an accrual of $58million for exit c

Intangible Assets and Goodwill

Intangible Assets and Goodwill
	3 Months Ended Apr. 03, 2010
Intangible Assets and Goodwill
Intangible Assets and Goodwill	14.Intangible Assets and Goodwill Intangible Assets Amortized intangible assets were comprised of the following: April3, 2010 December31, 2009 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Completed technology $ 1,126 $ 850 $ 1,123 $ 792 Patents 288 179 288 179 Customer-related 279 151 278 145 Licensed technology 130 122 130 122 Other intangibles 152 138 149 137 $ 1,975 $ 1,440 $ 1,968 $ 1,375 Amortization expense on intangible assets, which is included within Other and Eliminations, was $65million and $71million for the three months ended April3, 2010 and April4, 2009, respectively. As of April3, 2010, annual amortization expense is estimated to be $259million in 2010, $227million in 2011, $66million in 2012, $29million in 2013 and $10million in 2014. Amortized intangible assets, excluding goodwill, by business segment: April3, 2010 December31, 2009 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Mobile Devices $ 45 $ 45 $ 45 $ 45 Home 654 523 647 509 Enterprise Mobility Solutions 1,207 808 1,207 758 Networks 69 64 69 63 $ 1,975 $ 1,440 $ 1,968 $ 1,375 Goodwill The following table displays a rollforward of the carrying amount of goodwill by reportable segment from January1, 2010 to April3, 2010: Mobile Devices Home Enterprise Mobility Solutions Networks Total Motorola Balances as of January1, 2010: Aggregate goodwill acquired $ 55 $ 1,358 $ 2,981 $ 121 $ 4,515 Accumulated impairment losses (55 ) (73 ) (1,564 ) (1,692 ) Goodwill, net of impairment losses 1,285 1,417 121 2,823 Goodwill acquired 7 7 Impairment losses Adjustments Balances as of April3, 2010: Aggregate goodwill acquired 55 1,365 2,981 121 4,522 Accumulated impairment losses (55 ) (73 ) (1,564 ) (1,692 ) Goodwill, net of impairment losses $ $ 1,292 $ 1,417 $ 121 $ 2,830 The Company tests the recorded amount of goodwill for recovery on an annual basis in the fourth quarter of each fiscal year. Goodwill is tested more frequently if indicators of impairment exist. The Company continually assesses whether any indicators of impairment exist, which requires a significant amount of judgment. Such indicators may include: a sustained significant decline in our share price and market capitalization; a decline in our expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; the testing for recoverability of a significant asset group within a reporting unit; or slower growth ra

Document and Entity Information

Document and Entity Information
	3 Months Ended Apr. 03, 2010
Document and Entity Information
Entity Registrant Name	MOTOROLA INC
Entity Central Index Key	0000068505
Document Type	10-Q
Document Period End Date	2010-04-03
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	2,324,084,852
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1