Motorola 2011 Annual Report Download - page 28

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assurance that the indemnity from Motorola Mobility will be sufficient to protect us against the full amount of such
liabilities, or that Motorola Mobility will be able to fully satisfy its indemnification obligations, even if the pending
acquisition by Google is completed. Third-parties could also seek to hold us responsible for any of the liabilities that
Motorola Mobility has agreed to assume. Even if we ultimately succeed in recovering from Motorola Mobility any
amounts for which we are held liable, we may be temporarily required to bear these losses ourselves. In addition,
indemnities that we may be required to provide Motorola Mobility are not subject to any cap, may be significant
and could negatively impact our business. Each of these risks could negatively affect our business, results of
operations and financial condition. For more detailed information, see the Amended and Restated Master
Separation and Distribution Agreement which was filed as an exhibit to our Form 10-Q for the third quarter 2010.
A change of control of or bankruptcy of Motorola Mobility could result in an incompatible third-party owning the
Motorola Marks or the loss of certain rights, including the license.
Since Motorola Mobility owns the Motorola Marks, in the event Motorola Mobility is acquired, the acquiring
entity would gain control of the Motorola Marks. If the acquisition by Google is completed, the Motorola Marks
will be controlled by Google. In the event of a liquidation of Motorola Mobility or the then owner of the Motorola
Marks, it is possible that a bankruptcy court would permit the Motorola Marks to be assigned to a third-party.
While our right to use the Motorola Marks under our license should continue in our specified field of use in such
situations, it is possible that we could be party to a license arrangement with a third-party whose interests are
incompatible with ours, thereby potentially making the license arrangement difficult to administer, and increasing
the costs and risks associated with sharing the Motorola Marks. In addition, there is a risk that, in the event of a
bankruptcy of Motorola Mobility or the then owner of the Motorola Marks, Motorola Mobility, the then owner or
its bankruptcy trustee may attempt to reject the license, or a bankruptcy court may refuse to uphold the license or
certain of its terms. Such a loss could negatively affect our business, results of operations and financial condition.
We contributed a significant portfolio of intellectual property rights, including patents, to Motorola Mobility and
we are unable to leverage these intellectual property rights as we did prior to the distribution of Motorola Mobility.
We contributed approximately 17,200 granted patents and approximately 8,000 pending patent applications
worldwide to Motorola Mobility in connection with the distribution. Although we have a perpetual, royalty free
license to these patents and other intellectual property rights, we no longer own them. As a result we are unable to
leverage these intellectual property rights for purposes of generating licensing revenue or entering into favorable
licensing arrangements with third parties. As a result we may incur increased license fees or litigation costs.
Although we cannot predict the extent of such unanticipated costs, it is possible such costs could negatively impact
our financial results.
Completion of the distribution of Motorola Mobility may not enhance long-term shareholder value.
We completed the distribution of Motorola Mobility on January 4, 2011. At the time of this distribution, our
board and management team, after consultation with independent financial and legal advisors, believed that the
distribution of Motorola Mobility as planned would enhance long-term shareholder value. There can be no
assurance, however, that the combined value of our common stock and the common stock of Motorola Mobility
will equal or exceed what the value of our common stock would have been in the absence of the distribution in the
long term, particularly if the acquisition of Motorola Mobility by Google is not completed. The combined value of
the common stock of the two companies could be lower than anticipated for a variety of reasons, including, among
others, the inability of Motorola Mobility to complete its acquisition by Google or to compete effectively as an
independent company.
Item 1B: Unresolved Staff Comments
None.
Item 2: Properties
Motorola Solutions’ principal executive offices are located at 1303 East Algonquin Road, Schaumburg, Illinois
60196. Motorola Solutions also operates manufacturing facilities and sales offices in other U.S. locations and in
many other countries.