Discontinued Operations

9 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Motorola Mobile

On January 29, 2014, we entered into an agreement with Lenovo providing for the disposition of the Motorola Mobile business for a total purchase price of approximately $2.9 billion (subject to certain adjustments), including $1.4 billion to be paid at close, comprised of $660 million in cash and $750 million in Lenovo ordinary shares (subject to a share cap and floor). The remaining $1.5 billion will be paid in the form of an interest-free, three-year prepayable promissory note.

We will maintain ownership of the vast majority of the Motorola Mobile patent portfolio, including current patent applications and invention disclosures, which will be licensed back to Motorola Mobile for its continued operations. Additionally, in connection with the sale, we will indemnify Lenovo for certain potential liabilities of the Motorola Mobile business. The transaction is subject to the satisfaction of regulatory requirements, customary closing conditions and any other needed approvals and is expected to close in the fourth quarter of 2014.

Financial results of Motorola Mobile are presented as "Net income (loss) from discontinued operations" on the Consolidated Statements of Income for the three and nine months ended September 30, 2013 and 2014; and assets and liabilities of Motorola Mobile to be disposed of are presented as "Assets held for sale" and "Liabilities held for sale" on the Consolidated Balance Sheet as of September 30, 2014, respectively.

The following table presents financial results of the Motorola Mobile business included in "Net income (loss) from discontinued operations" for the three and nine months ended September 30, 2013 and 2014 (in millions, unaudited):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2014			2013			2014
Revenues	$	1,139		$	1,718		$	3,155		$	4,901
Loss from discontinued operations before income taxes	(307		)	(217		)	(909		)	(590		)
Benefits from income taxes	99			32			277			139
Net loss from discontinued operations	$	(208	)	$	(185	)	$	(632	)	$	(451	)

The following table presents the aggregate carrying amounts of the major classes of assets and liabilities related to the Motorola Mobile business to be disposed of as of September 30, 2014 (in millions, unaudited):

Assets:
Cash and cash equivalents	$	160
Accounts receivable	1,086
Inventories	123
Prepaid expenses and other current assets	424
Prepaid expenses and other assets, non-current	254
Property and equipment, net	523
Intangible assets, net	947
Goodwill	71
Total assets	$	3,588
Liabilities:
Accounts payable	$	1,005
Accrued compensation and benefits	117
Accrued expenses and other current liabilities	593
Deferred revenue, current	190
Other long-term liabilities	294
Total liabilities	$	2,199

Motorola Home

In December 2012, we entered into an agreement with Arris and certain other persons providing for the disposition of the Motorola Home business. The transaction closed on April 17, 2013 (the date of divestiture). As such, financial results of Motorola Home through the date of divestiture were included in "Net income (loss) from discontinued operations" for the three and nine months ended September 30, 2013.

The following table presents financial results of the Motorola Home business included in "Net income (loss) from discontinued operations" for the three and nine months ended September 30, 2013 (in millions, unaudited):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013		2013 (1)
Revenues	$	0	$	804
Loss from discontinued operations before income taxes	0		(67		)
Benefits from income taxes	0		16
Gain on disposal	15		762
Net income from discontinued operations	$	15	$	711

⁽¹⁾ The operating results of Motorola Home were included in our Consolidated Statements of Income from January 1, 2013 through the date of divestiture.