Motorola 2009 Annual Report Download - page 25

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Item 1A: Risk Factors
We wish to caution the reader that the following important risk factors, and those risk factors described
elsewhere in this report or in our other Securities and Exchange Commission filings, could cause our actual
results to differ materially from those stated in forward-looking statements contained in this document and
elsewhere. These risks are not presented in order of importance or probability of occurrence.
Our strategy to separate our businesses into two publicly-traded companies may have a negative impact on our
business operations, operating results and assets.
In March 2008, the Company announced a strategy to separate into two publicly-traded companies. In
February 2010, the Company announced that it is targeting the first quarter of 2011 for the completion of this
separation. There are various uncertainties and risks relating to this proposed separation that could have, and in
some cases have had, a negative impact on our business operations, operating results or assets, including: (i) the
distraction of management and disruption of operations; (ii) perceived uncertainties as to our future direction may
result in increased difficulties in recruiting and retaining employees, particularly highly qualified employees;
(iii) perceived uncertainties as to our future direction may have a negative impact on our relationships with our
customers, suppliers, vendors and partners and may result in the loss of business opportunities; (iv) the process of
completing the separation may be time consuming and expensive and may result in the loss of business
opportunities; and (v) we may not be able to successfully achieve the benefits of any strategic alternative
undertaken by us.
The uncertainty of current economic and political conditions makes budgeting and forecasting very difficult and
may reduce demand for our products.
Current conditions in the domestic and world economies remain very uncertain. The global financial crisis,
U.S. unemployment levels and ongoing political conflicts in the Middle East and elsewhere have created many
economic and political uncertainties that have impacted worldwide markets. As a result, it is difficult to estimate
changes in various parts of the world economy, including the markets in which we participate. Because all
components of our budgeting and forecasting are dependent upon estimates of demand for our products, the
prevailing economic uncertainties render estimates of future income and expenditures difficult.
We have manufacturing operations and engineering resources in Israel that could be disrupted as a result of
hostilities in the region. We also sell our products and services throughout the Middle East and demand for our
products and services could be negatively impacted by hostilities in this region.
The potential for future terrorist attacks, increased global conflicts and the escalation of existing conflicts
and public health issues has created worldwide uncertainties that have negatively impacted, and may continue to
negatively impact, demand for certain of our products.
We face a number of risks related to the financial crisis and severe tightening in the global credit markets that
began in late 2008 and continued throughout 2009.
The global financial crisis that affected the banking system and financial markets during late 2008 and
throughout 2009 resulted in a severe tightening in the worldwide credit markets, a low level of liquidity in many
financial markets and extreme volatility in credit and equity markets. This financial crisis has impacted, and could
continue to impact, Motorola’s business in a number of ways, including:
•Potential Deferment or Cancellation of Purchases and Orders by Customers: Uncertainty about current
and future global economic conditions may cause, and in some cases has caused, consumers, businesses
and governments to defer or cancel purchases in response to tighter credit, decreased cash availability and
declining consumer confidence. If future demand for our products declines due to global economic
conditions, it will negatively impact our financial results.
•Customers’ Inability to Obtain Financing to Make Purchases from Motorola and/or Maintain Their
Business: Some of our customers require substantial financing in order to fund their operations and make
purchases from Motorola. The inability of these customers to obtain sufficient credit to finance purchases
of our products and/or meet their payment obligations to us could have, and in some cases has had, a
negative impact on our financial results. In addition, if global economic conditions result in insolvencies
for our customers, it will negatively impact our financial results.
•Increased Requests by Customers for Vendor Financing by Motorola: Certain of the Company’s customers,
particularly, but not limited to, those who purchase large infrastructure systems, request that their suppliers