Motorola 2008 Annual Report Download - page 50

for future opportunities in emerging technologies, including video and wireline and wireless broadband, and enable
the business to maintain profitability in mature technologies.
In our Enterprise Mobility Solutions business, we will build on our leadership position in mission-critical
communications solutions and develop next-generation products and services for our government and public safety
customers around the world. This will enable us to address the continued high priority placed on public safety and
homeland security by our customers. Our business-critical enterprise communications products, including two-way
communications, mobile computing, and advanced data capture products and services, allow our customers to
reduce cost, increase worker mobility and productivity, and enhance their customers’ experiences. We offer this
leading portfolio across a broad spectrum of commercial enterprise markets, including retail, transportation, utility,
manufacturing, and healthcare industries.
Our government and enterprise customers are facing uncertainty and volatility as a result of the ongoing
global financial crisis. This will likely lead to lower capital spending by these customers and slowing demand in the
markets served by our Enterprise Mobility Solutions business. Over 40 U.S. states and many local governments are
facing budget deficits in 2009, and some states may be required to significantly curtail spending. Additionally,
many governments outside the U.S. are facing 2009 budget deficits. Although we continue to believe that our
government customers will prioritize public safety and homeland security spending, budget constraints could
impact the timing and volume of purchases by these customers. We believe that our comprehensive portfolio of
products and services, leadership positions in government and public safety and commercial enterprise markets and
global network of channel partners and distributors make our Enterprise Mobility Solutions business well
positioned to meet these challenges.
On February 17, 2009, the American Recovery and Reinvestment Act of 2009 (the “Stimulus Package”)
became law. The Stimulus Package implements $787 billion of spending and investment by the U.S. federal
government, including spending in areas of infrastructure and technology that may benefit our customers and
Motorola. Our domestic government and public safety customers may benefit from additional funding for state
and local law enforcement agencies and homeland defense initiatives. Opportunities for our Home and Networks
Mobility business may result from Stimulus Package funding for broadband and wireless internet initiatives. In
addition, as many foreign governments consider similar packages as a way to combat the ongoing global financial
crisis, our foreign customers may benefit from additional funding from stimulus packages applicable to them.
During 2008 and in January 2009, the Company initiated a number of global actions to reduce its cost
structure. These actions were primarily focused on our Mobile Devices business, but also included the other
businesses and corporate functions. Actions included workforce reductions, prioritization of investments, spending
controls and changes to compensation and benefit programs. These actions are expected to result in a further
reduction in the Company’s cost structure in 2009. To ensure alignment with changing market conditions, the
Company will continually review its cost structure as it aggressively manages costs throughout 2009 while
maintaining investments in innovation and future growth opportunities.
Our investment priorities include: next-generation wireless converged communications products and services
for enterprise markets; advanced technologies and applications for mission-critical communications in government
and public safety markets; broadband video systems for service providers; and next-generation wireless handsets
with application services. These investments, together with the acquisitions of recent years, are designed to foster
continued innovation and position us for future profitable growth opportunities.
In light of the ongoing global financial crisis and the severe tightening in the worldwide credit markets, the
Company is very focused on the strength of its balance sheet and its overall liquidity position. In 2009, operating
cash flow improvement, working capital management and preservation of total cash will continue to be major
focuses for the Company. We will continue to direct our available funds, including our Sigma Fund investments,
primarily into cash or very highly-rated, short-term securities. In February 2009, the Company announced that its
Board of Directors suspended the declaration of quarterly stock dividends. We also plan to reduce capital
expenditures in 2009 compared to 2008.
In addition to the $2.0 billion of cash, cash equivalents, short-term investments and Sigma Fund investments
(“Cash and Sigma Funds”) the Company held in the U.S. at the end of 2008, the Company held $5.4 billion of
Cash and Sigma Funds in foreign jurisdictions. The Company repatriated over $2 billion to the U.S. in 2008 at
minimal cash tax cost and expects to continue to efficiently repatriate funds from international jurisdictions to the
U.S. in 2009. Given the level of Cash and Sigma Funds, the Company believes it has more than sufficient liquidity
to operate its business.
42 MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS