Motorola 2006 Annual Report Download - page 29

Download and view the complete annual report

Please find page 29 of the 2006 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 144

  • 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
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

21
The value of our investments in the securities of various companies fluctuates and it may be difficult for us to
realize the value of these investments.
We hold a portfolio of investments in various companies. Since the majority of these securities represent
investments in technology companies, the fair market values of these securities are subject to significant price
volatility. In addition, the realizable value of these securities is subject to market and other conditions.
We also have invested in numerous privately-held companies, many of which can still be considered in startup
or developmental stages. These investments are inherently risky as the market for the technologies or products they
have under development are typically in the early stages and may never materialize. We could lose all or
substantially all of our investments in these companies, and in some cases have.
We purchase a large amount of credit insurance to mitigate some of our credit risks.
Our ability to sell certain of our receivables could be negatively impacted if we are not able to continue to
purchase credit insurance in certain countries and in sufficient quantities. In addition, our success in certain
countries may be dependent on our ability to obtain sufficient credit insurance.
It may be difficult for us to recruit and retain the types of highly-skilled employees that are necessary to remain
competitive.
Competition for key technical personnel in high-technology industries is intense. We believe that our future
success depends in large part on our continued ability to hire, assimilate, retain and leverage the skills of qualified
engineers and other highly-skilled personnel needed to compete and develop successful new products. We may not
be as successful as our competitors at recruiting, assimilating, retaining and utilizing these highly-skilled personnel.
The unfavorable outcome of litigation pending or future litigation could materially impact the Company.
Our financial results could be materially adversely impacted by unfavorable outcomes to any pending or future
litigation. See ""Item 3 Ì Legal Proceedings.'' There can be no assurances as to the favorable outcome of any
litigation.
We are subject to a wide range of environmental, health and safety laws.
Our operations and the products we manufacture and/or sell are subject to a wide range of global
environmental, health and safety laws. Compliance with existing or future environmental, health and safety laws
could subject us to future costs, liabilities, impact our production capabilities, constrict our ability to sell, expand
or acquire facilities and generally impact our financial performance.
Some of these laws relate to the use, disposal, clean up of, and exposure to hazardous substances. In the
United States, laws often require parties to fund remedial studies or action regardless of fault. Motorola continues
to incur disposal cost and has ongoing remediation obligations. Changes to U.S. environmental laws or our
discovery of additional obligations under these laws could have a negative impact on Motorola.
Over the last several years, environmental laws focused on the energy efficiency of electronic products and
accessories; electronic products and packaging, recycling; and reducing or eliminating certain hazardous substances
in electronic products have expanded dramatically. These laws impact our products and make it more expensive to
manufacture and sell product. It may also be difficult to comply with the laws in a timely way and we may not
have compliant products available in the quantities requested by our customers, thereby impacting our sales and
profitability. For example, electronic products sold into Europe were required to meet stringent chemical
restrictions by July 1, 2006 under the EU RoHS Directive. China is adopting similar requirements, the first of which
require labeling and chemical content disclosure for all electronic products sold into or within China after
February 28, 2007. We expect these trends to continue. In addition, we anticipate increased consumer demand for
the voluntary reduction or elimination of certain hazardous constituents from our wireless handsets.