How is Motorola Solutions managing its exposure to foreign currency fluctuations?

Motorola Solutions utilizes financial instruments, primarily forward contracts and options, to hedge against foreign currency risks. As of July 1, 2006, the company had $3.1 billion in net outstanding foreign exchange contracts designed to offset potential gains or losses on underlying operational cash flows and investments.

What is the company's strategy for managing interest rate risk?

The company manages interest rate risk by entering into interest rate swaps. These swaps allow Motorola Solutions to convert fixed-rate debt payments into short-term LIBOR-based variable rate payments on approximately $2.6 billion of its long-term debt, aiming to manage the mix of fixed and floating rates in its debt portfolio.

What are the significant legal matters discussed in the filing?

Key legal matters include a class-action suit regarding wireless telephone usage, a substantial claim exceeding $4 billion from the Iridium bankruptcy, shareholder derivative actions related to Iridium and Telsim, and ongoing investigations by the SEC concerning Adelphia matters. While the company believes most proceedings won't materially impact its financial position, the Iridium-related cases still pending could have a material adverse effect.

What is the status of Motorola's share repurchase program?

Motorola Solutions has completed its $4 billion share repurchase program authorized in May 2005. On July 24, 2006, the company announced a new authorization to repurchase up to an additional $4.5 billion of its outstanding common stock over the next 36 months.

MSI 10-Q Quarterly Report Q3 FY2006 — Revenue, Net Income, EPS

Summary

Motorola Solutions, Inc. (MSI) filed its 10-Q for the period ending June 30, 2006, focusing on market risk disclosures, controls, and legal proceedings. The company actively manages its exposure to foreign currency fluctuations through derivative contracts, with net outstanding foreign exchange contracts totaling $3.1 billion as of July 1, 2006. To manage interest rate risk, MSI utilizes interest rate swaps on a significant portion of its long-term debt, aiming to alter fixed-rate payments to variable rates. A notable disclosure involves a derivative on its investment in Sprint Nextel Corporation, which guarantees a minimum proceeds of $853 million and a maximum of $1.1 billion upon sale. The report also details significant legal matters, including ongoing litigation related to wireless telephone usage, Iridium bankruptcy claims (with a substantial potential damages of over $4 billion), and shareholder derivative suits concerning Iridium and Telsim. Motorola has resolved its Telsim loan dispute, receiving a final payment of $410 million. The company also highlights its ongoing share repurchase program, announcing authorization for an additional $4.5 billion in repurchases, following the completion of its previous $4 billion program.

Key Highlights

1Motorola Solutions manages significant foreign currency exposure, with $3.1 billion in net outstanding foreign exchange contracts as of July 1, 2006, primarily using forward contracts and options.
2The company employs interest rate swaps to manage its debt portfolio, converting fixed-rate payments to variable rates on approximately $2.6 billion of its long-term debt.
3MSI holds a derivative on its Sprint Nextel investment, securing a minimum of $853 million and a maximum of $1.1 billion in proceeds from the sale of its 37.6 million shares.
4The company is involved in substantial legal proceedings, including a significant claim of over $4 billion from the Iridium bankruptcy and ongoing litigation concerning wireless telephone usage.
5Motorola successfully resolved its Telsim loan dispute, receiving a final payment of $410 million.
6The company has an active share repurchase program, having completed its $4 billion authorization and announcing a new $4.5 billion authorization.
7A new risk factor highlights potential disruptions due to expanding hostilities in the Middle East, impacting operations in Israel and sales in the region.

Motorola Solutions, Inc. Quarterly Report for Q3 Ended Jul 1, 2006

Summary

Key Highlights

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