Debt and Credit Facilities

9 Months Ended

Sep. 26, 2020


	September 26, 2020		December 31, 2019
$2.2 billion unsecured revolving credit facility due April 2022	$	200	$	—



3.75% senior notes due 2022	—		550
3.5% senior notes due 2023	323		597
4.0% senior notes due 2024	582		593
1.75% senior convertible notes due 2024	993		988
6.5% debentures due 2025	70		72
7.5% debentures due 2025	252		254
4.6% senior notes due 2028	692		691
6.5% debentures due 2028	24		24
4.6% senior notes due 2029	804		804
2.3% senior notes due 2030	892		—
6.625% senior notes due 2037	37		37
5.5% senior notes due 2044	396		396
5.22% debentures due 2097	92		91
Other long-term debt	19		35
	5,376		5,132
Adjustments for unamortized gains on interest rate swap terminations	(2)		(3)
Less: current portion	(212)		(16)
Long-term debt	$	5,162	$	5,113

As of September 26, 2020, the Company had a $2.2 billion syndicated, unsecured revolving credit facility scheduled to mature in April 2022 (the "2017 Motorola Solutions Credit Agreement"). The 2017 Motorola Solutions Credit Agreement includes a $500 million letter of credit sub-limit with $450 million of fronting commitments. Borrowings under the facility bear interest at the prime rate plus the applicable margin, or at a spread above the London Interbank Offered Rate ("LIBOR"), at the Company's option. Following the turmoil in the financial markets caused by the COVID-19 Pandemic, the Company borrowed $800 million under the facility to bolster its cash holdings out of precaution in the first quarter of 2020, of which $600 million was repaid during the nine months ended September 26, 2020. As of September 26, 2020, the outstanding loan amount was $200 million. Subsequent to the quarter, the company repaid an additional $100 million, bringing the outstanding loan amount to $100 million. The weighted average borrowing rate for amounts outstanding during the three and nine months ended September 26, 2020 were 1.50% and 1.71%, respectively. An annual facility fee is payable on the undrawn amount of the credit line. The interest rate and facility fee are subject to adjustment if the Company's credit rating changes. The Company must comply with certain customary covenants including a maximum leverage ratio, as defined in the 2017 Motorola Solutions Credit Agreement. The Company was in compliance with its financial covenants as of September 26, 2020.

In August of 2020, the Company issued $900 million of 2.30% Senior notes due 2030. The Company recognized net proceeds of $892 million after debt issuance costs and debt discounts. A portion of these proceeds were then used to redeem $552 million in principal amount outstanding of the 3.75% Senior notes due 2022 for a redemption price of $582 million, excluding approximately $7 million of accrued interest. The remaining proceeds were used to repurchase $293 million in principal amount outstanding of its long-term debt under a tender offer, for a purchase price of $315 million, excluding approximately $5 million of accrued interest, all of which occurred during the three months ended September 26, 2020. After accelerating the amortization of debt issuance costs and debt discounts, the Company recognized a loss of approximately $56 million related to the redemption and the repurchase in Other, net within Other income (expense) in the Condensed Consolidated Statements of Operations.

As of September 26, 2020, the Company had $1.0 billion of 1.75% senior convertible notes with Silver Lake, which mature in September 2024 ("New Senior Convertible Notes"). The notes are convertible anytime on or after two years from their issuance date, except in certain limited circumstances. The notes are convertible based on a conversion rate of 4.9140, as may be adjusted for dividends declared, per $1,000 principal amount (which is equal to an initial conversion price of $203.50 per share). The exercise price adjusts automatically for dividends. In the event of conversion, the Company intends to settle the principal amount of the New Senior Convertible Notes in cash. The Company has recorded a debt liability associated with the New Senior Convertible Notes by determining the fair value of an equivalent debt instrument without a conversion option. Using

a discount rate of 2.45%, which was determined based on a review of relevant market data, the Company has calculated the debt liability to be $986 million, indicating a $14 million discount to be amortized over the expected life of the debt instrument. The remaining proceeds of $14 million were allocated to the conversion option and accordingly, increased Additional paid-in capital. The Company has an unsecured commercial paper program, backed by the unsecured revolving credit facility, under which the Company may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $2.2 billion outstanding at any one time. Proceeds from the issuances of the notes are expected to be used for general corporate purposes. The notes are issued at a zero-coupon rate and are issued at a discount which reflects the interest component. At maturity, the notes are paid back in full including the interest component. The notes are not redeemable prior to maturity. As of September 26, 2020 the Company had no outstanding debt under the commercial paper program.