Motorola Solutions, Inc.MSI
Motorola Solutions, Inc. Fair Value Disclosure
Fair Value Measurements
Investments and Derivatives
The fair values of the Company’s financial assets and liabilities by level in the fair value hierarchy as of December 31, 2025 and December 31, 2024 were as follows:
| December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Foreign exchange derivative contracts | $ | — | $ | 10 | $ | — | $ | 10 | |||||||||||||||
| Common stock and equivalents | 42 | — | — | 42 | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign exchange derivative contracts | $ | — | $ | 19 | $ | — | $ | 19 | |||||||||||||||
| Contingent earnout consideration (Note 15) | — | — | 37 | 37 | |||||||||||||||||||
| December 31, 2024 | Level 1 | Level 2 | Total | ||||||||||||||
| Assets: | |||||||||||||||||
| Foreign exchange derivative contracts | $ | — | $ | 10 | $ | 10 | |||||||||||
| Common stock and equivalents | 23 | — | 23 | ||||||||||||||
| Liabilities: | |||||||||||||||||
| Foreign exchange derivative contracts | $ | — | $ | 9 | $ | 9 | |||||||||||
| Equity swap contracts | 1 | — | 1 | ||||||||||||||
In connection with the acquisition of Silvus, contingent earnout consideration reflects the estimated fair value of the contingent future payments to the Seller following the achievement of certain financial targets. Refer to "Note 15: Intangible Assets and Goodwill” to our consolidated financial statements in this “Part II. Item 8. Financial Statements and Supplementary Data" of this Form 10-K for more information regarding the details of the contingent earnout consideration. The Company determines the fair value of its contingent earnout consideration liability using a Monte Carlo simulation model, which requires the use of Level 3 inputs, such as projected future net sales, gross margin and cash flows. At the acquisition date, the Company recorded a contingent liability of approximately $38 million, related to the estimated fair value of the contingent earnout consideration, which was included in the purchase price. For the year ended December 31, 2025, the fair value adjustment related to the contingent earnout consideration was $1 million which was recorded to Other income, net in the Company's Consolidated Statement of Operations.
Pension and Postretirement Health Care Benefits Plan Assets
The fair values of the various pension and postretirement health care benefits plans’ assets by level in the fair value hierarchy as of December 31, 2025 and 2024 were as follows:
U.S. Pension Benefit Plans
| December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Equities | $ | 24 | $ | — | $ | — | $ | 24 | |||||||||||||||
| Commingled funds | 1,200 | 422 | — | 1,622 | |||||||||||||||||||
| Government fixed income securities | — | 347 | — | 347 | |||||||||||||||||||
| Corporate fixed income securities | — | 919 | — | 919 | |||||||||||||||||||
| Short-term investment funds | 231 | — | — | 231 | |||||||||||||||||||
| Private assets | — | — | 238 | 238 | |||||||||||||||||||
| Total investment securities | $ | 1,455 | $ | 1,688 | $ | 238 | $ | 3,381 | |||||||||||||||
| Accrued income receivable | 51 | ||||||||||||||||||||||
| Cash | 17 | ||||||||||||||||||||||
| Fair value plan assets | $ | 3,449 | |||||||||||||||||||||
The following table summarizes the changes in fair value of the Level 3 assets:
| 2025 | |||||
| Fair value at January 1, 2025 | $ | 203 | |||
| Actual return on plan assets | 27 | ||||
| Purchases | 8 | ||||
| Fair value at December 31, 2025 | $ | 238 | |||
| December 31, 2024 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Equities | $ | 23 | $ | — | $ | — | $ | 23 | |||||||||||||||
| Commingled funds | 1,039 | 404 | — | 1,443 | |||||||||||||||||||
| Government fixed income securities | — | 239 | — | 239 | |||||||||||||||||||
| Corporate fixed income securities | — | 905 | — | 905 | |||||||||||||||||||
| Short-term investment funds | 258 | — | — | 258 | |||||||||||||||||||
| Private Assets | — | — | 203 | 203 | |||||||||||||||||||
| Total investment securities | $ | 1,320 | $ | 1,548 | $ | 203 | $ | 3,071 | |||||||||||||||
| Accrued income receivable | 162 | ||||||||||||||||||||||
| Cash | 16 | ||||||||||||||||||||||
| Fair value plan assets | $ | 3,249 | |||||||||||||||||||||
Non-U.S. Pension Benefit Plans
| December 31, 2025 | Level 1 | Level 2 | Total | ||||||||||||||
| Equities | $ | 64 | $ | — | $ | 64 | |||||||||||
| Commingled funds | 205 | 33 | 238 | ||||||||||||||
| Government fixed income securities | — | 755 | 755 | ||||||||||||||
| Short-term investment funds | 41 | — | 41 | ||||||||||||||
| Total investment securities | $ | 310 | $ | 788 | $ | 1,098 | |||||||||||
| Cash | 5 | ||||||||||||||||
| Accrued income receivable | 21 | ||||||||||||||||
| Insurance contracts | 48 | ||||||||||||||||
| Fair value plan assets | $ | 1,172 | |||||||||||||||
| December 31, 2024 | Level 1 | Level 2 | Total | ||||||||||||||
| Equities | $ | 53 | $ | — | $ | 53 | |||||||||||
| Commingled funds | 236 | 35 | 271 | ||||||||||||||
| Government fixed income securities | — | 615 | 615 | ||||||||||||||
| Short-term investment funds | 56 | — | 56 | ||||||||||||||
| Total investment securities | $ | 345 | $ | 650 | $ | 995 | |||||||||||
| Cash | 4 | ||||||||||||||||
| Accrued income receivable | 42 | ||||||||||||||||
| Insurance contracts | 42 | ||||||||||||||||
| Fair value plan assets | $ | 1,083 | |||||||||||||||
Postretirement Health Care Benefits Plan
| December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Equities | $ | 1 | $ | — | $ | — | $ | 1 | |||||||||||||||
| Commingled funds | 44 | 17 | — | 61 | |||||||||||||||||||
| Government fixed income securities | — | 13 | — | 13 | |||||||||||||||||||
| Corporate fixed income securities | — | 37 | — | 37 | |||||||||||||||||||
| Short-term investment funds | 9 | — | — | 9 | |||||||||||||||||||
| Private funds | — | — | 9 | 9 | |||||||||||||||||||
| Total investment securities | $ | 54 | $ | 67 | $ | 9 | $ | 130 | |||||||||||||||
| Accrued income receivable | 2 | ||||||||||||||||||||||
| Fair value plan assets | $ | 132 | |||||||||||||||||||||
The following table summarizes the changes in fair value of the Level 3 assets:
2025 | |||||
| Fair value at January 1, 2025 | $ | 8 | |||
| Actual return on plan assets | 1 | ||||
| Fair value at December 31, 2025 | $ | 9 | |||
| December 31, 2024 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Equities | $ | 1 | $ | — | $ | — | $ | 1 | |||||||||||||||
| Commingled funds | 40 | 16 | — | 56 | |||||||||||||||||||
| Government fixed income securities | — | 10 | — | 10 | |||||||||||||||||||
| Corporate fixed income securities | — | 37 | — | 37 | |||||||||||||||||||
| Short-term investment funds | 10 | — | — | 10 | |||||||||||||||||||
| Private funds | — | — | 8 | 8 | |||||||||||||||||||
| Total investment securities | $ | 51 | $ | 63 | $ | 8 | $ | 122 | |||||||||||||||
| Accrued income receivable | 6 | ||||||||||||||||||||||
| Fair value plan assets | $ | 128 | |||||||||||||||||||||
The following is a description of the categories of investments:
Equities — A diversified portfolio of corporate common and preferred stocks.
Commingled funds — A diversified portfolio of assets that includes corporate common and preferred stocks, emerging market and high-yield fixed income securities among others.
Government fixed income securities — Securities issued by municipal, domestic and foreign government agencies, index-linked government bonds as well as interest rate derivatives.
Corporate fixed income securities — A diversified portfolio of primarily investment grade bonds issued by corporations.
Short-term investment funds — Investments in money market accounts and derivatives with a liquidity of less than 90 days.
Private funds — A diversified portfolio of assets that includes private equity funds and private loans.
Level 1 investments include securities which are valued at the closing price reported on the active market in which the individual securities are traded. Level 2 investments consist principally of securities which are valued using independent third party pricing sources. Level 3 investments include securities with valuations derived from valuation techniques, in which one or more significant inputs are unobservable. A variety of inputs are utilized by the independent pricing sources including market based inputs, binding quotes, indicative quotes, and ongoing redemption and subscription activity. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation.
At December 31, 2025, the Company had $735 million of investments in money market government and U.S. treasury funds (Level 1) classified as Cash and cash equivalents in its Consolidated Balance Sheet, compared to $1.2 billion at December 31, 2024. The money market funds had quoted market prices that are approximately at par.
Using quoted market prices and market interest rates, the Company determined that the fair value of its debt at December 31, 2025 was $9.2 billion. The fair value of long-term debt at December 31, 2024 was $5.8 billion. Since considerable judgment is required in interpreting market information, the fair value of the long-term debt is not necessarily indicative of the amount which could be realized in a current market exchange. Refer to "Note 5: Debt and Credit Facilities" to our consolidated financial statements in this “Part II. Item 8. Financial Statements and Supplementary Data” of this Form 10-K for a further discussion of the Company's debt.
All other financial instruments are carried at cost, which is not materially different from the instruments’ fair values.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 16, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 23, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.