Motorola 2012 Annual Report Download - page 90

Download and view the complete annual report

Please find page 90 of the 2012 Motorola annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

82
Long-Range Incentive Plan
The Long-Range Incentive Plan (“LRIP”) rewards participating elected officers for the Company’s achievement of
specified business goals during the period, based on two performance objectives measured over three-year cycles. The expense
for LRIP (net of the reversals of previously recognized reserves) for the years ended December 31, 2012, 2011 and 2010 was
$12 million, $3 million and $11 million, respectively.
9. Fair Value Measurements
The Company holds certain fixed income securities, equity securities and derivatives, which are recognized and disclosed
at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Fair value
is measured using the fair value hierarchy and related valuation methodologies as defined in the authoritative literature. This
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:
Level 1-Quoted prices for identical instruments in active markets.
Level 2-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.
Level 3-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 December 31,
2012 and 2011 were as follows:
December 31, 2012 Level 1 Level 2 Total
Assets:
Sigma Fund securities:
U.S. government, agency and government-sponsored enterprise
obligations $ — $ 1,984 $ 1,984
Foreign exchange derivative contracts —33
Available-for-sale securities:
U.S. government, agency and government-sponsored enterprise
obligations —1515
Corporate bonds —1111
Mortgage-backed securities —22
Common stock and equivalents 3710
Liabilities:
Foreign exchange derivative contracts $—$3$3
Interest agreement derivative contracts —44