Motorola 2006 Annual Report Download - page 117

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109
accruing $95 million and $1 million as of December 31, 2006 and 2005, respectively, for certain claims that have
been asserted under these provisions.
In addition, the Company may provide indemnifications for losses that result from the breach of general
warranties contained in certain commercial, intellectual property and divestiture agreements. Historically, the
Company has not made significant payments under these agreements, nor have there been significant claims asserted
against the Company.
In all indemnification cases, payment by the Company is conditioned on the other party making a claim
pursuant to the procedures specified in the particular contract, which procedures typically allow the Company to
challenge the other party's claims. Further, the Company's obligations under these agreements for indemnification
based on breach of representations and warranties are generally limited in terms of duration, typically not more
than 24 months, and for amounts not in excess of the contract value, and in some instances, the Company may
have recourse against third parties for certain payments made by the Company.
The Company's operating results are dependent upon our ability to obtain timely and adequate delivery of
quality materials, parts and components to meet the demands of our customers. Furthermore certain of our
components are available only from a single source or limited sources. Even where alternative sources of supply are
available, qualification of the alternative suppliers and establishment of reliable supplies could result in delays and a
possible loss of sales, which may have an adverse effect on the Company's operating results.
11. Information by Segment and Geographic Region
Effective April 2006, the Company reports financial results for the following business segments with all
historical amounts reclassified to conform to the current segment presentation:
‚ The Mobile Devices segment designs, manufactures, sells and services wireless handsets with integrated
software and accessory products, and licenses intellectual property.
‚ The Networks and Enterprise segment designs, manufactures, sells, installs and services: (i) cellular
infrastructure systems and wireless broadband systems to public carriers and other wireless service providers
(referred to as the ""public networks'' market), and (ii) analog and digital two-way radio, voice and data
communications products and systems, as well as wireless broadband systems, to a wide range of public
safety, government, utility, transportation and other worldwide enterprise markets (referred to as the
""private networks'' market). In January 2007, the segment completed the acquisition of Symbol
Technologies Inc., a leader in designing, developing, manufacturing and servicing products and systems used
in end-to-end enterprise mobility solutions. Symbol will become the cornerstone of the segment's enterprise
mobility strategy.
‚ The Connected Home Solutions segment designs, manufactures, sells and services: (i) cable television,
Internet Protocol (""IP'') video and broadcast network set-top boxes (""digital entertainment devices''),
(ii) end-to-end digital video system solutions, (iii) broadband access networks, and (iv) IP-based data and
voice products (including modems).
Segment operating results are measured based on operating earnings adjusted, if necessary, for certain segment-
specific items and corporate allocations. Intersegment and intergeographic sales are accounted for on an arm's-
length pricing basis. Intersegment sales included in other and eliminations were:
Years Ended December 31
2006
2005 2004
Mobile Devices $65 $190 $212
Networks and Enterprise 19 101 44
Connected Home Solutions 1ÌÌ
$85 $291 $256
Identifiable assets (excluding intersegment receivables) are the Company's assets that are identified with classes
of similar products or operations in each geographic region.
For the years ended December 31, 2005 and 2004, approximately 12% and 13%, respectively, of net sales were
to one customer, Sprint Nextel (including Nextel and Nextel affiliates where appropriate). No single customer
accounted for more than 10% of net sales for the year ended December 31, 2006.