Motorola 2010 Annual Report Download - page 20

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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.
We are at risk that the sale of the majority of our Networks infrastructure assets is further delayed or does not close.
We face risks and uncertainties related to the sale of a majority of our Networks infrastructure assets to
Nokia Siemens Networks B.V. (“NSN”), which includes: (i) our ability to satisfy the conditions to closing,
including (a) receipt of China antitrust approval, (b) the absence of any judgment, writ or order preventing the sale
or other legal proceeding which is likely to render it impossible or unlawful to consummate the sale, and (c) the
absence of a material adverse effect on the assets being sold by us; (ii) each company having the ability to
consummate the transaction; (iii) the impact on our performance and financial results deriving from the benefits
from this transaction; and (iv) the expected timeline for completing the transaction. The closing of such sale has
been delayed beyond our initial expectations due to a delay in receipt of China antitrust approval. In addition, we
are currently engaged in litigation with Huawei, a Chinese competitor of our Networks business, who filed for a
preliminary injunction seeking to enjoin the transfer of certain product lines, employees, and its confidential
information to NSN in connection with the sale of our Networks business. We are currently subject to a temporary
restraining order which prohibits the transfer of Huawei confidential information to NSN and are waiting on the
courts ruling on the preliminary injunction motion. There can be no assurance that the sale will be completed. If the
sale is not completed as currently contemplated it may impact our ability to execute on our long-term strategic plan.
There are various other uncertainties and risks relating to this proposed sale 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) difficulties in recruiting and retaining employees in the Networks
business; (iii) perceived uncertainties as to our future direction that have a negative impact on our relationships with
our customers, suppliers, vendors and partners and resulting in the loss of business opportunities; (iv) interference
by certain competitors with certain customers, and (v) the process of completing the sale has been time consuming
and expensive.
Our financial results have been and could further be negatively impacted if sales of our Networks infrastructure
equipment continue to decline in response to our agreement to sell the majority of our Networks infrastructure
assets.
We have experienced declines in the sale of certain of our Networks infrastructure equipment as a result of the
announcement of our agreement to sell the majority of our Networks infrastructure assets to NSN. Our future
financial results could be further negatively impacted if sales of our Networks infrastructure equipment continue to
decline in response to our pending sale. We expect to operate the Networks business until the closing of the sale to
NSN and the Company’s financial results could be further negatively impacted if sales are not at expected levels due
to perceived uncertainty as a result of the pending sale.
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 uncertain. This is particularly true of U.S.
governmental customers’ budgetary conditions. As a result of global economic conditions, 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 U.S. and 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 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 political conflicts and hostilities in this region. The potential for future unrest, terrorist