Motorola 2010 Annual Report Download - page 91

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83
Balance Sheet Information
Sigma Fund
Sigma Fund consists of the following:
December 31, 2010 December 31, 2009
Fair Value Current Non-current Current Non-current
Cash $2,355 $— $ 202 $—
Securities:
U.S. government and agency obligations 2,291 — 4,408 —
Corporate bonds — 58 367 63
Asset-backed securities — 1 66 —
Mortgage-backed securities — 11 49 3
$4,646 $70 $5,092 $66
During the years ended December 31, 2010 and 2009, the Company recorded gains related to the Sigma Fund
investments of $11 million and $80 million, respectively, in Other income (expense) in the consolidated statement of
operations. During the year ended December 31, 2008, the Company recorded total charges related to Sigma Fund
investments, including temporary unrealized losses and impairment charges, of $287 million in its consolidated
statement of operations.
During the fourth quarter of 2008, the Company changed its accounting for changes in the fair value of
investments in the Sigma Fund. Prior to the fourth quarter of 2008, the Company distinguished between declines it
considered temporary and declines it considered permanent. When it became probable that the Company would not
collect all amounts it was owed on a security according to its contractual terms, the Company considered the
security to be impaired and recorded the permanent decline in fair value in earnings. During 2008, the Company
recorded $186 million of permanent impairments of Sigma Fund investments in the consolidated statement of
operations. Beginning in the fourth quarter of 2008, the Company began recording all changes in the fair value of
investments in the Sigma Fund in the consolidated statements of operations. In its stand-alone financial statements,
the Sigma Fund uses “investment company” accounting practices and records all changes in the fair value of the
underlying investments in earnings, whether such changes are considered temporary or permanent. The Company
determined the underlying accounting practices of the Sigma Fund in its stand-alone financial statements should be
retained in the Company’s consolidated financial statements. Accordingly, the Company recorded the cumulative
loss of $101 million on investments in the Sigma Fund investments in its consolidated statement of operations
during the fourth quarter of 2008. The Company determined amounts that arose in periods prior to the fourth
quarter of 2008 were not material to the consolidated results of operations in those periods.
Securities with a significant temporary unrealized loss and a maturity greater than 12 months and defaulted
securities have been classified as non-current in the Company’s consolidated balance sheets. At December 31, 2010,
$70 million of the Sigma Fund investments were classified as non-current, and the weighted average maturity of the
Sigma Fund investments classified as non-current (excluding defaulted securities) was 164 months. At December 31,
2009, $66 million of the Sigma Fund investments were classified as non-current.