Motorola 2011 Annual Report Download - page 15

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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.
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.
government customers’ budgetary conditions. As a result of global economic conditions, U.S. and European
unemployment levels, the ongoing recession in Europe 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. 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 sizeable operations in Europe, which have been and will be impacted by the ongoing financial
situation in Europe and the weakening Euro. 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 attacks, increased global conflicts and the escalation of existing conflicts has
created worldwide uncertainties that have negatively impacted, and may continue to negatively impact, demand for
certain of our products.
We continue to face a number of risks related to current global economic conditions, including adverse credit
conditions, low economic growth, risk of sovereign defaults and high levels of unemployment.
Global economic conditions continue to be challenging for government and enterprise communications
markets, as many economies and financial markets remain in a recession resulting from a number of factors,
including adverse credit conditions, low economic growth rates, risk of sovereign defaults, particularly in certain
European countries, continuing high rates of unemployment, reduced corporate capital spending and other factors.
Economic growth in the U.S. and many other countries has remained low and the length of time these adverse
economic conditions may persist are unknown. These global economic conditions have impacted and could continue
to impact our 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 businesses and governments to
defer or cancel purchases in response to tighter credit and 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 Solutions and/or Maintain Their
Business: Some of our customers require substantial financing, including public financing or government grants,
in order to fund their operations and make purchases from us. The inability of these customers to obtain
sufficient credit or other funds 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.
Requests by Customers for Vendor Financing by Motorola Solutions: Certain of our customers, particularly,
but not limited to, those who purchase large infrastructure systems, request that their suppliers provide
financing in connection with equipment purchases or the provision of managed services. In response to reduced
tax revenue at the state and local government level and ongoing tightening of credit for certain customers, these
types of requests have increased in volume and scope. Motorola Solutions, particularly in its Government and
Public Safety business, but also in connection with its Global Services offering, has continued to provide
customer financing in light of these requests. A continuation of the credit market dislocation could force us to