Other Financial Data

Statement of Operations Information

Other Charges

Other charges included in Operating earnings consist of the following:



Years ended December 31	2012			2011			2010
Other charges (income):
Intangibles amortization	$	29		$	200		$	203
Reorganization of businesses	41			52			54
Intellectual property settlements and reserve adjustment	—			—			(78		)
Legal and related insurance matters, net	(16		)	88			(29		)
Pension plan adjustments, net	—			(9		)	—
Long-term financing receivable reserve	—			10			—
	$	54		$	341		$	150

During 2012, the Company recorded a $16 million gain in connection with the settlement of a legal matter involving the legacy paging business.

During 2011, the Company recorded $88 million of net charges for legal matters. These charges primarily relate to the Silverman litigation and legal matters related to the legacy paging business.

During 2010, the Company entered into a settlement agreement with another company to resolve certain intellectual property disputes between the two companies. As a result of the settlement agreement, the Company received $65 million in cash and was assigned certain patent properties. As a result of this agreement, the Company recorded a pre-tax gain of $39 million (and $55 million was recorded in discontinued operations) during the year ended December 31, 2010, related to the settlement of the outstanding litigation between the parties.

Other Income (Expense)

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



Years ended December 31	2012			2011			2010
Interest expense, net:
Interest expense	$	(108	)	$	(132	)	$	(217	)
Interest income	42			58			88
	$	(66	)	$	(74	)	$	(129	)
Other:
Investment impairments	$	(8	)	$	(4	)	$	(21	)
Loss from the extinguishment of the Company’s outstanding long-term debt	(6		)	(81		)	(12		)
Foreign currency gain (loss)	(13		)	8			12
Gain on Sigma Fund investments	—			—			11
Other	13			8			3
	$	(14	)	$	(69	)	$	(7	)

Earnings Per Common Share

Basic and diluted earnings per common share from both continuing operations and net earnings attributable to Motorola Solutions, Inc., including discontinued operations, is computed as follows:



	Continuing Operations						Net Earnings attributable to Motorola Solutions, Inc.
Years ended December 31	2012		2011		2010		2012		2011		2010
Basic earnings per common share:
Earnings	$	878	$	747	$	244	$	881	$	1,158	$	633
Weighted average common shares outstanding	292.1		333.8		333.3		292.1		333.8		333.3
Per share amount	$	3.01	$	2.24	$	0.73	$	3.01	$	3.47	$	1.90
Diluted earnings per common share:
Earnings	$	878	$	747	$	244	$	881	$	1,158	$	633
Weighted average common shares outstanding	292.1		333.8		333.3		292.1		333.8		333.3
Add effect of dilutive securities: Share-based awards and other	5.3		5.9		4.8		5.3		5.9		4.8
Diluted weighted average common shares outstanding	297.4		339.7		338.1		297.4		339.7		338.1
Per share amount	$	2.95	$	2.20	$	0.72	$	2.96	$	3.41	$	1.87

In the computation of diluted earnings per common share from both continuing operation and on a net earnings basis for the year ended December 31, 2012, the assumed exercise of 5.9 million stock options was excluded because their inclusion would have been antidilutive. For the year ended December 31, 2011, the assumed exercise of 8.6 million stock options and vesting of 0.2 million restricted stock units were excluded because their inclusion would have been antidilutive. For the year ended December 31, 2010, the assumed exercise of 14.6 million stock options and vesting of 0.7 million restricted stock units were excluded because their inclusion would have been antidilutive.

During 2012, the Company paid an aggregate of $2.4 billion, including transaction costs, to repurchase 49.6 million shares. The share repurchase program is discussed in further detail in the “Stockholders’ Equity Information” section.

Balance Sheet Information

Sigma Fund

Sigma Fund consists of the following:



December 31	2012		2011
Cash	$	149	$	264
Securities:
U.S. government, agency and government-sponsored enterprise obligations	1,984		2,944
	$	2,133	$	3,208

Investments

Investments consist of the following:



	Recorded Value				Less
December 31, 2012	Short-term Investments		Investments		Unrealized Gains		Unrealized Losses		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	—		10		3		—		7
	2		38		3		—		37
Other securities, at cost	—		93		—		—		93
Equity method investments	—		13		—		—		13
	$	2	$	144	$	3	$	—	$	143



	Recorded Value				Less
December 31, 2011	Short-term Investments		Investments		Unrealized Gains		Unrealized Losses			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

During the years ended December 31, 2012, 2011 and 2010, the Company recorded investment impairment charges of $8 million, $4 million and $21 million, respectively, representing other-than-temporary declines in the value of the Company’s available-for-sale investment portfolio. Investment impairment charges are included in Other within Other income (expense) in the Company’s consolidated statements of operations.

Gains on sales of investments and businesses, net, consists of the following:



Years Ended December 31	2012		2011		2010
Gains on sales of investments, net	$	39	$	17	$	49
Gains on sales of businesses, net	—		6		—
	$	39	$	23	$	49

During the year ended December 31, 2010, the $49 million of net gains primarily relate to sales of a number of the Company’s equity investments, of which $31 million of gain was attributable to a single investment.

Accounts Receivable, Net

Accounts receivable, net, consist of the following:



December 31	2012			2011
Accounts receivable	$	1,932		$	1,911
Less allowance for doubtful accounts	(51		)	(45		)
	$	1,881		$	1,866

Inventories, Net

Inventories, net, consist of the following:



December 31	2012			2011
Finished goods	$	244		$	319
Work-in-process and production materials	432			363
	676			682
Less inventory reserves	(163		)	(170		)
	$	513		$	512

Other Current Assets

Other current assets consist of the following:



December 31	2012		2011
Costs and earnings in excess of billings	$	416	$	302
Contract-related deferred costs	141		142
Tax-related refunds receivable	95		85
Other	148		157
	$	800	$	686

Property, Plant and Equipment, Net

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



December 31	2012			2011
Land	$	38		$	69
Building	739			774
Machinery and equipment	1,932			2,052
	2,709			2,895
Less accumulated depreciation	(1,870		)	(1,999		)
	$	839		$	896

Depreciation expense for the years ended December 31, 2012, 2011 and 2010 was $179 million, $165 million and $150 million, respectively.

Other Assets

Other assets consist of the following:



December 31	2012		2011
Intangible assets, net of accumulated amortization	$	109	$	48
Long-term receivables, net of allowances	60		37
Other	200		211
	$	369	$	296

Accrued Liabilities

Accrued liabilities consist of the following:



December 31	2012		2011
Deferred revenue	$	820	$	774
Compensation	424		471
Billings in excess of costs and earnings	387		250
Tax liabilities	95		126
Customer reserves	144		125
Networks purchase price adjustment	—		96
Dividend payable	72		70
Other	684		821
	$	2,626	$	2,733

Other Liabilities

Other liabilities consist of the following:



December 31	2012		2011
Defined benefit plans, including split dollar life insurance policies	$	3,389	$	2,675
Postretirement health care benefits plan	167		295
Deferred revenue	304		275
Unrecognized tax benefits	98		112
Other	237		353
	$	4,195	$	3,710

Stockholders’ Equity Information

Share Repurchase Program: On July 28, 2011, the Company announced that its Board of Directors approved a share repurchase program that allowed 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 in the existing stock repurchase program through the end of 2012. On February 26, 2012, the Company purchased 23,739,362 shares of its common stock for approximately $1.2 billion from Carl C. Icahn and certain of his affiliates. 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. During 2012, the Company paid an aggregate of $2.4 billion, including transaction costs, to repurchase 49.6 million shares at an average price of $49.14 per share. During 2011, the Company paid an aggregate of $1.1 billion, including transaction costs to repurchase 26.6 million shares at an average price of $41.77. As of December 31, 2012, the Company has used approximately $3.5 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving approximately $1.5 billion of authority available for repurchases. All repurchased shares have been retired. During the year ended December 31 2010, the Company did not repurchase any of its common shares.

Payment of Dividends: During the year ended December 31, 2012, the Company paid $270 million in cash dividends to holders of its common stock. During the year ended December 31, 2011, the Company paid $72 million in cash dividends to holders of its common stock. During the year ended December 31, 2010, the Company did not pay cash dividends to holders of its common stock.

During the years ended December 31, 2011, and 2010, the Company paid $8 million and $23 million, respectively, of dividends to minority shareholders in connection with subsidiary common stock.

Motorola Mobility Distribution: On January 4, 2011, the distribution of Motorola Mobility from Motorola Solutions was completed. On January 4, 2011, the stockholders of record as of the close of business on December 21, 2010 (the "Record Date") received one (1) share of Motorola Mobility common stock for each eight (8) shares of the Company's common stock held as of the Record Date. The distribution was completed pursuant to an Amended and Restated Master Separation and Distribution Agreement, effective as of July 31, 2010, among the Company, Motorola Mobility and Motorola Mobility, Inc.

As a result of the distribution on January 4, 2011, certain equity balances were transferred by the Company to Motorola

Mobility including: (i) $1 million in foreign currency translation adjustments, (ii) $9 million in fair value adjustments to available for sale securities, net of tax of $5 million, and (iii) $8 million in retirement benefit adjustments, net of tax of $4 million. The distribution of net assets and these equity balances were effected by way of a pro rata dividend to Motorola Solutions stockholders, which reduced Retained earnings and Additional paid in capital by $5.3 billion.

Reverse Stock Split: On January 4, 2011, immediately following the distribution of Motorola Mobility common stock, the Company completed the Reverse Stock Split. All consolidated per share information presented gives effect to the distribution of Motorola Mobility and the Reverse Stock Split.