Motorola 2012 Annual Report Download - page 54

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Recent Accounting Pronouncements
In December 2011, the FASB issued Accounting Standards Update ("ASU") No. 2011-11 “Disclosures about Offsetting
Assets and Liabilities.” The standard requires additional disclosure to enhance the comparability of U.S. GAAP and
International Financial Reporting Standards financial statements. In January 2013, the FASB issued Accounting Standards
Update 2013-01 "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities." This standard provided
additional guidance on the scope of ASU 2011-11. The new standards are effective for annual and interim periods beginning
January 1, 2013. Retrospective application is required. The guidance concerns disclosure only and will not have an impact on
our consolidated financial position or results of operations.
In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other
Comprehensive Income." Under ASU 2013-02, an entity is required to provide information about the amounts reclassified out
of Accumulated Other Comprehensive Income ("AOCI") by component. In addition, an entity is required to present, either on
the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of
net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For
amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other
disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for
reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for us on January 1,
2013.
Forward-Looking Statements
Except for historical matters, the matters discussed in this Form 10-K are forward-looking statements that involve risks
and uncertainties. Forward-looking statements include, but are not limited to, statements under the following headings:
(1) “Business,” about: (a) industry growth and demand, including opportunities resulting from such growth, (b) customer
spending, (c) the impact of each segment's strategy, (d) the impact from the loss of key customers, (e) competitive position,
(f) increased competition, (g) the impact of regulatory matters, (h) the impact from the allocation and regulation of spectrum,
(i) the availability of materials and components, energy supplies and labor, (j) the seasonality of the business, (k) the firmness
of each segment's backlog, (l) the competitiveness of the patent portfolio, and (m) the impact of research and development;
(2) “Properties,” about the consequences of a disruption in manufacturing; (3) “Legal Proceedings,” about the ultimate
disposition of pending legal matters and timing; (4) “Management's Discussion and Analysis,” about: (a) market growth/
contraction, demand, spending and resulting opportunities, (b) the financial results of Psion and the impact to earnings in 2014,
(c) the decline in the iDEN infrastructure portfolio, (d) the return of capital to shareholders through dividends and/or
repurchasing shares, (e) the success of our business strategy and portfolio, (f) future payments, charges, use of accruals and
expected cost-saving and profitability benefits associated with our reorganization of business programs and employee
separation costs, (g) our ability and cost to repatriate funds, (h) the impact of the timing and level of sales and the geographic
location of such sales, (i) the impact of maintaining inventory, (j) future cash contributions to pension plans or retiree health
benefit plans, (k) our ability to collect on our Sigma Fund and other investments, (l) our ability and cost to access the capital
markets, (m) our ability to borrow and the amount available under our credit facilities, (n) our ability to retire outstanding debt,
(o) our ability and cost to obtain performance related bonds, (p) adequacy of resources to fund expected working capital and
capital expenditure measurements, (q) expected payments pursuant to commitments under long-term agreements, (r) the ability
to meet minimum purchase obligations, (s) our ability to sell accounts receivable and the terms and amounts of such sales,
(t) the outcome and effect of ongoing and future legal proceedings, (u) the impact of recent accounting pronouncements on our
financial statements, (v) the impact of the loss of key customers, and (w) the expected effective tax rate and deductibility of
certain items; and (5) “Quantitative and Qualitative Disclosures about Market Risk,” about: (a) the impact of foreign currency
exchange risks, (b) future hedging activity and expectations of the Company, and (c) the ability of counterparties to financial
instruments to perform their obligations.
Some of the risk factors that affect the Company’s business and financial results are discussed in “Item 1A: Risk
Factors.” We wish to caution the reader that the risk factors discussed in “Item 1A: Risk Factors,” and those 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 the forward-looking statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
As of December 31, 2012, we have $1.9 billion of long-term debt, including the current portion of long-term debt, which
is primarily priced at long-term, fixed interest rates. Of this total long-term debt amount, a $36 million Euro-denominated
variable interest loan has a hedge that changes the interest rate characteristics from variable to fixed-rate. A hypothetical
unfavorable movement of 10% in the interest rates would have an immaterial impact on the hedge’s fair value.