Other Financial Data

Statement of Operations Information

Other Charges

Other charges included in Operating earnings consist of the following:



	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Other charges (income):
Amortization of intangible assets	$	6	$	50	$	18	$	150
Legal matters and intellectual property reserve adjustments, net	—		—		—		48
Pension plan adjustments	—		—		—		(9		)
Reorganization of business charges	10		10		30		32
	$	16	$	60	$	48	$	221

Other Income (Expense)

Interest expense, net, and Other, both included in Other income (expense), consist of the following:



	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Interest income (expense), net:
Interest expense	$	(29	)	$	(31	)	$	(79	)	$	(105	)
Interest income	13			13			33			46
	$	(16	)	$	(18	)	$	(46	)	$	(59	)
Other:
Losses from the extinguishment of long-term debt	$	—		$	—		$	(6	)	$	(81	)
Investment impairments	(6		)	—			(8		)	(3		)
Foreign currency gain (loss)	—			(6		)	(11		)	5
Loss on Sigma Fund investments	—			(2		)	—			(2		)
Other	3			8			7			8
	$	(3	)	$	—		$	(18	)	$	(73	)

Earnings Per Common Share

The computation of basic and diluted earnings per common share attributable to Motorola Solutions, Inc. common stockholders is as follows:



	Amounts attributable to Motorola Solutions, Inc. common stockholders
	Earnings from continuing operations				Net Earnings
Three Months Ended	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Basic earnings per common share:
Earnings	$	206	$	153	$	206	$	128
Weighted average common shares outstanding	283.1		335.4		283.1		335.4
Per share amount	$	0.73	$	0.46	$	0.73	$	0.38
Diluted earnings per common share:
Earnings	$	206	$	153	$	206	$	128
Weighted average common shares outstanding	283.1		335.4		283.1		335.4
Add effect of dilutive securities:
Share-based awards	4.3		4.1		4.3		4.1
Diluted weighted average common shares outstanding	287.4		339.5		287.4		339.5
Per share amount	$	0.72	$	0.45	$	0.72	$	0.38



	Amounts attributable to Motorola Solutions, Inc. common stockholders
	Earnings from Continuing Operations				Net Earnings
Nine Months Ended	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Basic earnings per common share:
Earnings	$	542	$	570	$	545	$	974
Weighted average common shares outstanding	296.1		337.3		296.1		337.3
Per share amount	$	1.83	$	1.69	$	1.84	$	2.89
Diluted earnings per common share:
Earnings	$	542	$	570	$	545	$	974
Weighted average common shares outstanding	296.1		337.3		296.1		337.3
Add effect of dilutive securities:
Share-based awards	5.4		6.1		5.4		6.1
Diluted weighted average common shares outstanding	301.5		343.4		301.5		343.4
Per share amount	$	1.80	$	1.66	$	1.81	$	2.84

In the computation of diluted earnings per common share from both continuing operations and on a net earnings basis for the three and nine months ended September 29, 2012, the assumed exercise of 6.1 million and 6.0 million stock options, respectively, were excluded because their inclusion would have been antidilutive. In the computation of diluted earnings per common share from both continuing operations and on a net earnings basis for the three and nine months ended October 1, 2011, the assumed exercise of 8.9 million and 8.8 million stock options, respectively, and the assumed vesting of 0.3 million and 0.2 million restricted stock units, respectively, were excluded because their inclusion would have been 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 $1.8 billion and $1.9 billion at September 29, 2012 and December 31, 2011, respectively. Of these amounts, $63 million at both September 29, 2012 and December 31, 2011, was restricted.

Sigma Fund

The Sigma Fund consists of the following:



	September 29, 2012		December 31, 2011
Cash	$	—	$	264
Securities:
U.S. government, agency, and government-sponsored enterprise obligations	1,758		2,944
	$	1,758	$	3,208

Investments

Investments consist of the following:



	Recorded Value				Less
September 29, 2012	Short-term Investments		Investments		Unrealized Gains		Unrealized Loss		Cost Basis
Available-for-sale securities:
U.S. government, agency and government-sponsored enterprise obligations	$	—	$	15	$	—	$	—	$	15
Corporate bonds	2		11		—		—		13
Mortgage-backed securities	—		2		—		—		2
Common stock and equivalents	—		30		4		—		26
	2		58		4		—		56
Other securities, at cost	—		90		—		—		90
Equity method investments	—		14		—		—		14
	$	2	$	162	$	4	$	—	$	160



	Recorded Value				Less
December 31, 2011	Short-term Investments		Investments		Unrealized Gains		Unrealized Loss			Cost Basis
Available-for-sale securities:
U.S. government, agency and government-sponsored enterprise obligations	$	—	$	16	$	—	$	—		$	16
Corporate bonds	2		10		—		—			12
Mortgage-backed securities	—		2		—		—			2
Common stock and equivalents	—		11		2		(1		)	10
	2		39		2		(1		)	40
Other securities, at cost	—		106		—		—			106
Equity method investments	—		21		—		—			21
	$	2	$	166	$	2	$	(1	)	$	167

Accounts Receivable, Net

Accounts receivable, net, consists of the following:



	September 29, 2012			December 31, 2011
Accounts receivable	$	1,754		$	1,911
Less allowance for doubtful accounts	(50		)	(45		)
	$	1,704		$	1,866

Inventories, Net

Inventories, net, consist of the following:



	September 29, 2012			December 31, 2011
Finished goods	$	323		$	319
Work-in-process and production materials	378			363
	701			682
Less inventory reserves	(163		)	(170		)
	$	538		$	512

Other Current Assets

Other current assets consist of the following:



	September 29, 2012		December 31, 2011
Costs and earnings in excess of billings	$	445	$	302
Contract-related deferred costs	150		142
Tax-related refunds receivable	83		85
Other	150		157
	$	828	$	686

Property, Plant and Equipment, Net

Property, plant and equipment, net, consists of the following:



	September 29, 2012			December 31, 2011
Land	$	56		$	69
Building	760			774
Machinery and equipment	1,917			2,052
	2,733			2,895
Less accumulated depreciation	(1,873		)	(1,999		)
	$	860		$	896

Depreciation expense for the three months ended September 29, 2012 and October 1, 2011 was $39 million and $42 million, respectively. Depreciation expense for the nine months ended September 29, 2012 and October 1, 2011 was $133 million and $123 million, respectively.

Other Assets

Other assets consist of the following:



	September 29, 2012		December 31, 2011
Intangible assets	$	30	$	48
Long-term receivables	43		37
Other	207		211
	$	280	$	296

Accrued Liabilities

Accrued liabilities consist of the following:



	September 29, 2012		December 31, 2011
Deferred revenue	$	799	$	774
Billings in excess of costs and earnings	389		250
Compensation	352		471
Tax liabilities	70		126
Customer reserves	126		125
Dividend payable	73		70
Networks purchase price adjustment	—		96
Other	666		821
	$	2,475	$	2,733

Other Liabilities

Other liabilities consist of the following:



	September 29, 2012		December 31, 2011
Defined benefit plans, including split dollar life insurance policies	$	2,268	$	2,675
Postretirement health care benefit plan	164		295
Deferred revenue	278		275
Unrecognized tax benefits	97		112
Other	331		353
	$	3,138	$	3,710

Stockholders’ Equity

Share Repurchase Program: On July 28, 2011, the Company announced that its Board of Directors approved a share repurchase program that allows the Company to purchase up to $2.0 billion of its outstanding common stock through December 31, 2012. On January 30, 2012, the Company announced that its Board of Directors authorized up to $1.0 billion in additional funds for use under the existing share repurchase program through the end of 2012. On February 26, 2012, the Company entered into a stock purchase agreement with Carl C. Icahn and certain of his affiliates to purchase 23,739,362 shares of its common stock. On July 25, 2012, the Company announced that its Board of Directors authorized up to $2.0 billion in additional funds for share repurchase, bringing the aggregate amount of the share repurchase program to $5.0 billion, and extended the entire share repurchase program indefinitely with no expiration date. The Company paid an aggregate of $308 million during the third quarter of 2012, including transactions costs, to repurchase 6.5 million shares at an average price of $47.47 per share. During the first nine months of 2012, the Company paid an aggregate of $2.1 billion, including transaction costs, to repurchase 43.5 million shares at an average price of $48.50 per share. As of September 29, 2012, the Company has used approximately $3.2 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving approximately $1.8 billion of authority available for repurchases. All repurchased shares have been retired.

Payment of Dividends: During the three and nine months ended September 29, 2012, the Company paid $63 million and $197 million, respectively, in cash dividends to holders of its common stock.

Noncontrolling Interest: On January 1, 2012, the Company entered into a series of transactions which resulted in exiting the amateur, marine and airband radio businesses. One of those transactions was acquiring the remaining 20% of the land mobile radio business previously owned by our Japanese joint venture. The acquisition of the remaining 20% of this land mobile radio business, in which the Company already had a controlling interest, resulted in a decrease of $35 million to the Company's noncontrolling interest, and an increase of $20 million to the Company's additional paid in capital, which primarily represents the increase in deferred tax assets from the acquisition of the 20% of the land mobile radio business assets.