Motorola 2009 Annual Report Download - page 34

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We may continue to make strategic acquisitions of other companies or businesses and these acquisitions introduce
significant risks and uncertainties, including risks related to integrating the acquired businesses and achieving
benefits from the acquisitions.
In order to position ourselves to take advantage of growth opportunities, we have made, and may continue
to make, strategic acquisitions that involve significant risks and uncertainties. These risks and uncertainties
include: (i) the difficulty in integrating newly-acquired businesses and operations in an efficient and effective
manner; (ii) the challenges in achieving strategic objectives, cost savings and other benefits from acquisitions;
(iii) the risk that our markets do not evolve as anticipated and that the technologies acquired do not prove to be
those needed to be successful in those markets; (iv) the potential loss of key employees of the acquired businesses;
(v) the risk of diverting the attention of senior management from our operations; (vi) the risks of entering new
markets in which we have limited experience; (vii) risks associated with integrating financial reporting and
internal control systems; (viii) difficulties in expanding information technology systems and other business
processes to accommodate the acquired businesses; and (ix) future impairments of goodwill of an acquired
business.
Acquisition candidates in the industries in which we participate may carry higher relative valuations (based
on their earnings) than we do. This is particularly evident in software and services businesses. Acquiring a
business that has a higher valuation than Motorola may be dilutive to our earnings, especially when the acquired
business has little or no revenue. In addition, we may not pursue opportunities that are highly dilutive to
near-term earnings and have, in the past, foregone certain of these acquisitions.
Key employees of acquired businesses may receive substantial value in connection with a transaction in the
form of change-in-control agreements, acceleration of stock options and the lifting of restrictions on other equity-
based compensation rights. To retain such employees and integrate the acquired business, we may offer additional
retention incentives, but it may still be difficult to retain certain key employees.
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 the value of our investments in these companies, and in some cases have.
The Sigma Fund holds U.S. Dollar-denominated debt obligations which include, among other securities,
corporate bonds and asset- and mortgage-backed securities. The fair value of these holdings may experience
further declines due to widening credit spreads in several debt market segments or if the underlying debtors
should default on their obligations. Such events could result in additional losses in the Sigma Fund investments.
It may be difficult for us to recruit and retain the types of engineers and other 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 develop successful new products. We may not be as
successful as our competitors at recruiting, assimilating, retaining and utilizing these highly-skilled personnel. We
may have more difficulty attracting or retaining highly-skilled personnel during periods of poor operating
performance. For example, in response to the Company’s performance in the last several years, we have
temporarily suspended the Company’s 401(k) contributions to employee accounts, permanently froze all future
benefit accruals under U.S. pension plans and temporarily suspended merit increase programs in the U.S. and
many other markets.
Our success depends in part upon our ability to attract, retain and prepare succession plans for senior
management and key employees.
The performance of our Co-CEOs, senior management and other key employees is critical to our success. If
we are unable to retain talented, highly qualified senior management and other key employees or attract them
when needed, it could negatively impact the Company. We rely on the experience of our senior management, who
have specific knowledge relating to us and our industry that is difficult to replace and competition for