Motorola 2012 Annual Report Download - page 25

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regulations like import or export regulations. As many of our outsource partners operate outside of the U.S., our outsourcing
activity increases our global risks. In addition, we are exposed to the financial viability of our outsource partners. Once a
business activity is outsourced we may be contractually prohibited from or may not practically be able to bring such activity
back within the Company or move it to another outsource partner. The actions of our outsource partners could result in
reputational damage to us and could negatively impact our financial results.
We may be required to record additional goodwill or other long-lived asset impairment charges, which could result in an
additional significant charge to earnings.
Under generally accepted accounting principles, we review our long-lived assets for impairment when events or changes
in circumstances indicate the carrying value may not be recoverable. Goodwill is assessed for impairment at least annually.
Factors that may be considered in assessing whether goodwill or intangible assets may not be recoverable include a decline in
our stock price or market capitalization, reduced estimates of future cash flows and slower growth rates in our industry. No
goodwill or long-lived assets impairment charges were recorded during 2012, 2011 or 2010. Declines in our stock price or
reductions in our future cash flow estimates and future operating results may require us to record significant additional
goodwill or other long-lived asset impairment charges in our financial statements in future periods, which could negatively
impact our financial results.
Changes in our operations or sales outside the U.S. markets could result in lost benefits in impacted countries and increase our
cost of doing business.
We have entered into various agreements with non-U.S. governments, agencies or similar organizations under which we
receive certain benefits relating to its operations and/or sales in the jurisdiction. If our circumstances change, and operations or
sales are not at levels originally anticipated, we may be at risk of having to reimburse benefits already granted, and losing some
or all of these benefits and increasing our cost of doing business.
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 CEO, 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 us. 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 management with experience in the communications industry is intense. A loss of
the CEO, a member of senior management or key employee particularly to a competitor could also place us at a competitive
disadvantage. Further, if we fail to adequately plan for the succession of our CEO, senior management and other key
employees, the Company could be negatively impacted.
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.
The unfavorable outcome of any pending or future litigation, arbitration or administrative action could have a material
adverse effect on our financial condition or results of operations.
From time to time we are made a party to litigation, arbitration or administrative actions. Our financial results and
reputation could be negatively impacted by unfavorable outcomes to any pending or future litigation or administrative actions,
including those related to the Foreign Corrupt Practices Act and other anti-corruption laws. There can be no assurances as to the
favorable outcome of any litigation or administrative proceedings. In addition, it can be very costly to defend litigation or
administrative proceedings and these costs could negatively impact our financial results.
It is important that we are able to obtain many different types of insurance, and if we are not able to obtain insurance or we
exhaust our coverage we are forced to retain the risk.
We have many types of insurance coverage and are also self-insured for some risks and obligations. While the cost and
availability of most insurance is stable, there are still certain types and levels of insurance that remain difficult to obtain. For
example, we recently purchased professional liability insurance, which is expensive to obtain for the amount of coverage often
requested by certain customers. As we grow our global solutions and services organization we are being asked to obtain higher
amounts of professional liability insurance, which could result in higher costs to do business. Natural disasters and certain risks
arising from securities claims, professional liability and public liability are potential self-insured events that could negatively
impact our financial results. In addition, while we maintain insurance for certain risks, the amount of our insurance coverage
may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs from an accident, incident
or claim.