adobe pdf q4 2005 motorola inc. earnings conference call presentation
TRANSCRIPT
Q4 2005 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
Slide - 1
Motorola Q4 2005 Earnings Release Conference Call
January 19, 2006
Q4 2005 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
Slide - 2
Ed Gams
Corporate Vice Presidentof Investor Relations
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 3
Safe Harbor StatementA number of forward-looking statements will be made during this presentation. Forward-looking statements are any statements that are not historical facts. These forward-looking statements are based on the current expectations of Motorola and there can be no assurance that suchexpectations will prove to be correct. Because forward-looking statements involve risks and uncertainties, Motorola’s actual results could differ materially from these statements. Information about factors that could cause, and in some cases have caused, such differences can be found on pages 70 through 80 of Motorola’s 2004 Annual Report on Form 10-K and in Motorola’s other SEC filings.
This presentation is being made on the afternoon of January 19, 2006. The content of this presentation contains time-sensitive information that is accurate only as of the time hereof. If any portion of this presentation is rebroadcast, retransmitted or redistributed at a later date, Motorola will not be reviewing or updating the material that is contained herein.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006
Q4 2005 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
Slide - 4
Ed Zander
Chief Executive Officer
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 5
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The Big Bet …Seamless Mobility
Q4 2005 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
Slide - 6
David DevonshireChief Financial Officer
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 7
Motorola Inc. Financial Results
Q4Q4 Q4 Fav/
2005 2004 (Unfav)
Sales ($M) 10,433$ 8,842$ 18%
Earnings Per Share * 0.47$ 0.28$ 68%
Annual Annual Fav/2005 2004 (Unfav)
Sales ($M) 36,843$ 31,323$ 18%
Earnings Per Share * 1.82$ 0.90$ 102%
* From Continuing Operations
ANNUAL
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 8
Significant Items Discussed in the Earnings Press Release
Excluding Significant Items From Both Years, Our Growth in Earnings Per Share for Q4 is 30%
Q4 2005 Reported EPS From Continuing Operations * 0.47$ Includes:Collection Related to Telsim 0.13 Tax Adjustments 0.02 Loss on Sale of Investment (0.02) Charge For Past Use of Kodak Intellectual Property (0.01)
0.12$
Q4 2004 Reported EPS From Continuing Operations * 0.28$ Includes:Gains on Sales of Investments and Businesses 0.02 Reorganization of Businesses 0.01 Collection of Receivables That Had Been Previously Deemed Uncollectible (Telsim) 0.01 CMS Goodwill Impairment (0.02) In Process R&D Related to Acquisitions (Mesh and Crisnet) (0.01)
0.01$
* See appendix for reconciliation
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 9
Motorola Sales Trend
5.1
7.48.2
5.2
7.5
8.8
5.9
7.5
9.4
6.9
8.8
10.4
0
2
4
6
8
10
12
Q1 Q2 Q3 Q4
200320042005
$ Billions
For the Full Year, Sales Increased 18% ’05 vs. ‘04
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 10
Revenue Per Employee
4 Quarter Rolling Average
$(000)’s
$463$472
$486
$513
$534
$300
$350
$400
$450
$500
$550
Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 11
Motorola Operating Earnings Trend
4.6%
9.2%10.6%
5.0%
10.4%11.1%
5.2%
8.6%
11.7%
6.7%
11.5%
16.8%
0.0%
5.0%
10.0%
15.0%
20.0%% of Sales
Q1 Q2 Q3 Q4
200320042005
Excluding Significant Items, Q4’05 Operating Margin Was 12.5% vs. 11.8% in Q4’04
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 12
Cash Flow and Debt
•Debt to Total Capital Now At 20.3% vs. 28.4% at 12/31/04
•$500M Received From Telsim Settlement, $410M Additional Anticipated in 2006
Year End Year End ($ in Billions) Q4 2005 ($ in Billions) 2005 2004
Operating Cash Flow 2.1$ Cash/Equiv/Mkt Sec 14.8$ 10.7$
Short Term/ Current Debt (0.5)$ (0.7)$ Free Cash Flow 1.9$
Long Term Debt (3.8)$ (4.6)$
Total Debt (4.3)$ (5.3)$
Net Cash/ (Net Debt) 10.5$ 5.4$
Cash Flow Cash & Debt
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 13
Stock Repurchase Update
• May 19, 2005 Authorized to Purchase $4B over 3 Years
• In Q4 Purchased ~16M Shares, Average Price of $22.40
• Inception to Date Purchased 41.7M Shares, Cash Used ~ $870M
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 14
Q1 2006 Guidance
$.27-.29
36%
2.56 Billion
$.02 Per Share
Earnings Per Share(excluding Stock Option Expense)
Tax Rate
Shares Outstanding
Stock Option Expense
$9.3B-$9.5BSales
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 15
Comments on 2006• Stock Option Expense Estimated Annual
Impact of $250M - $300M• Estimated Tax Rate is 36%• Additional Collection Related to Telsim
Expected in the First Half • Further Improvement in Operating Margin
Versus 2005, Continuing Progress to 13-15% Goal
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 16
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 17
Mobile Devices Business Results
All-time Motorola record for units!All-time record for Mobile Devices sales!
All-time record for Mobile Devices operating earnings!
… and we increased market-share again,driven by wickedly cool and compelling products
and rich experiences!
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 18
Wickedly Cool ProductsRAZR is world’s best-selling clamshell handset
Ultra-slim SLVR is redefining the “candy bar”Our “Thin Platform” is hot! … 12.9M units in Q4!
UMTS units are up by 87% vs. Q3Another record iDEN performance!
GSMA award driving sales across price tiers in world’s High-Growth Markets
26 new launches: 13 GSM, 6 CDMA, 3 UMTS, 4 iDEN
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 19
Market Share Momentum19% global share: the clear #2 and gaining!
#1 in North America
#1 in Latin American
#2 in Europe
#2 in North Asia
#3 in High-Growth Markets
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 20
Up 3.1 pptsUp 0.4 pts vs. Q3’05
19.0%Market Share Est. – Q4
Down 0.5 pts 10.1% *Operating Margin
Up 40%44.7MUnits
Up 25%$663 Operating Earnings $MUp 30%$6,537Sales $M
Q4’05 vs. Q4’04Q4 2005
* Excluding Significant Items, Q4 Operating Margin Was 11.0% vs. 10.2% in Q4’04
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 21
Up 0.1 pt 10.2% *Operating Margin
Up 40%146.0MUnits
Up 27%$2,198 Operating Earnings $MUp 25%$21,455Sales $M
2005 vs. 20042005
* Excluding Significant Items, 2005 Operating Margin Was 10.7% vs. 9.9% in 2004
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 22
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 23
Source: Motorola, Inc. Shares are calculated on Q4 05 Unit Shipments, includes iDEN.
• #1 at 3 of top 4 wireless operators!• Strong market-share leadership • Units up 8% vs. Q4’04• Launched RAZR for EV-DO in Americas – ahead of plan• Focus: Drive new icons, expand CDMA, strengthen brand
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 24
Source: Motorola, Inc. Shares are calculated on Q4 05 Unit Shipments, includes iDEN.
• #1 in Venezuela, Argentina and Brazil!• Market-share leadership• Units up 29% vs. Q4’04• Delivered strength across price tiers – from C115 to RAZR• Focus: Grow brand and share across price tiers
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 25
• Best quarter ever for sales and units; RAZR is best-selling device in Europe
• Market share up 5 ppts vs. Q4‘04• Units up 60% vs. Q4‘04• Launched V3x for UMTS networks across Europe• Focus: Build brand and share across price tiers
Source: Motorola, Inc. Shares are calculated on Q4 05 Unit Shipments, includes iDEN.
… and growing!
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 26
Source: Motorola, Inc. Shares are calculated on Q4 05 Unit Shipments, includes iDEN.
• RAZR is a hit across region; A780 is #1 smartphone in China!• Market share up 4.7 ppts vs. Q4’04• Units up 90% vs. Q4‘04• Expanded distribution channels throughout China• Focus: Grow brand and share across price tiers
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 27
Source: Motorola, Inc. Shares are calculated on Q4 05 Unit Shipments, includes iDEN.
• RAZR, SLVR and GSMA driving sales
• Market share up more than 4 ppts vs. Q4‘04
• Units up 103% vs. Q4’04
• Expanded distribution channels throughout India
• Focus: Growth and expansion through GSMA awards
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 28
GSM, Edge, CDMA 1X, EV-DO, UMTSSILVER, BLACK, PINK, BLUE & GOLD
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 29
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 30
“Connecting the unconnected”
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 31
Get more music – up to 500 mp3 tracks – even faster!
Get your music in stereo!
And go wireless – discreetly!
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 32
imagingsearching messaging
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 33
The new standard for QWERTY
Productivity: video, still images, voice, data, email and more – and all on Microsoft Windows Mobile 5.0
Only 11.5mm!
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 34
grow profitably with …
wickedly compelling products …
with quality and efficiency.
and rich experiences …
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 35
on a year-over-year basis …• increased sales
• increased units and market share• and continued Op Margin expansion
and on a sequential basis …• less than normal seasonality
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 36
Government & Enterprise Mobility Solutions – Q4
* Excluding Significant Items in Q4 2004 Operating Margin Improved 3.3 pts
*
Q4 2005
Sales $M 1,816$ Up 8%
Operating Earnings $M 314$ Up 41%
Operating Margin 17.3% Up 4.1 pts
Q4'05 vs. Q4'04
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 37
Government Markets - Global Emphasis on Interoperability
United States• State of Indiana • Fresno County (CA)• Laredo, Texas• Nassau County (FL)• Colorado Springs• Petersburg (VA)• Ann Arundel County (MD)
Asia Pacific• Korea Government Radio Network
- 140 agencies on single communications platform
Europe• O2 Airwave Ambulance Fleet
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 38
Product Leadership & InnovationFirst Pocket PDA for TETRA
• 1st PDA to Operate on TETRA Networks• Meets Rugged Public Safety Requirements• Delivers Mission Critical Data Applications to
First Responders on the Move:- Individual Records- Vehicle Records- Crime Reports- Accident Reports
Strong Mesh Momentum• 34 New Orders; 10 New Customers• Shipment of New 4.9 GHz MOTOMESH
Multi-radio Broadband Network
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 39
Q4 – Enterprise & Automotive Activity
Enterprise• Acquired Wireless Valley Communications
- Leading Provider of Software Solutions for Effective Design & Management of Wireless Networks
• HC700-L - First Entry Into the Commercial-off-the-Shelf, Rugged, Handheld Mobile Computing Market
Automotive• More Than $1 billion in New Lifetime Sales Awards• Strong Sales in Automotive Aftermarket Accessories
Q1 Guidance: Sales Up, Operating Earnings Up Versus Prior Year
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 40
Networks Business Q4
Down 2.7 pts
Down 18%
Down 4%
Q4’05/Q4’04
15.1%
225
1,494
Q4 2005
Sales $M
Operating Margin
Operating Earnings $M
* Excluding Significant Items in Q4 2004 Operating Margin Decrease was 2.3 pts
*
A1
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 41
Q4’05 Networks – Other Developments
– CDMA2000 EV-DO award from VIVO in Brazil
– 4 New FTTP Awards - Bulloch Telephone, ComSouth, PBT Telecom and ATMC
– VIBO in Taiwan UMTS Island-Wide Launch
– Canopy Macedonia Nationwide Network Announced on January 16
– Earthlink Metro WiFi Canopy Agreement for Philadelphia, Anaheim, and Other Cities Announced Today
Q1 Guidance: Sales and Operating Earnings Down Versus Prior Year
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 42
Connected Home – Q4
Up 2.5 pts
Up 40%
Up 1%
Q4’05 vs. Q4’04
8.9%Operating Margin
$60Operating Earnings $M
$675Sales $M
Q4 2005
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 43
Connected Home – Q4 Highlights• Shipped ~ 1.4M Set-Tops, Including ~ 700K HD/DVR Enabled
• Chile’s Largest Operator, VTR, Selected Motorola Digital Video Platform
• Began Shipping QIP Set-Tops – First With Built-in Home Media Networking
• Verizon Expands FiOS TV Deployments in Markets in Texas, Virginia, and Florida Using Motorola Digital Video Technology
• Expanded IP Voice Portfolio- Announced Plans for a Joint Development Collaboration with Juniper Networks- Acquired Advanced RF Technology from Broadband Innovations-Shipped ~500K Voice Modems
• In January, Announced Acquisition of Kreatel to Expand IP Video Position
Guidance For Q4 - ?????Q1 Guidance: Sales Flat and Operating Earnings Up Versus Prior Year
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 44
2006 Priorities
“WOW” Products/End-to End Solutions
Strengthen Financial Performance
Customer “Delight”
Market Share/Thought Leadership
Supply Chain Efficiency
Refine and Execute On Strategic Direction
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 45
Chief Executive OfficerEd ZanderEd Zander
Motorola Q&A Participants
David DevonshireDavid Devonshire
Dan MoloneyDan Moloney
Chief Financial Officer
President, Connected Home
Ron GarriquesRon GarriquesPresident, Mobile Devices Business
Greg BrownGreg BrownPresident, Government & Enterprise
Mobility Solutions
Ed GamsEd GamsVice President, Investor Relations
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 46
Use of Non-GAAP MeasurementsIn addition to the GAAP results provided during this conference call, Motorola has presented certain
non-GAAP measurements. Motorola has provided these non-GAAP measurements as a measure to help investors better understand its core operating performance, enhance comparisons of Motorola’s core operating performance from period to period and to allow better comparisons of Motorola’s operating performance to that of its competitors. Among other things, the Company’s management uses these operating results, excluding the identified items, to evaluate the performance of its businesses and to evaluate results relative to incentive compensation targets. Management uses operating results excluding these items because they believe this measure enables them to make better period-to-period evaluations of the financial performance of its core business operations. There are inherent limitations in the use of operating results excluding these items because the company's GAAP results do include the impact of these items. The non-GAAP measures are intended only as a supplement to the comparable GAAP measures and the company compensates for the limitations inherent in the use of non-GAAP measures by using GAAP measures in conjunction with the non-GAAP measures. As a result, investors should consider these non-GAAP measures in addition to, and not in substitution for, or as superior to, measures of financial performance prepared in accordance with GAAP.
Details of the these items and reconciliations of the non-GAAP measurements provided during this call to GAAP measurements can be found: (i) in the Form 8-K filed by Motorola on January 19, 2006 (which attached this afternoon’s earnings press release), (ii) within the text of the slides that accompany this webcast, or (iii) on the company’s website. Each of these items can be found on Motorola’s website at www.motorola.com/investor.
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 47
Significant Items Discussed- Quarter
Q4 2005 PBT (Inc)/Exp
Q4 2005 Tax Inc/(Exp)
Q4 2005 PAT (Inc)/Exp EPS impact
Collection related to Telsim (504)$ (181)$ (323)$ 0.13$ Loss on sale of investment 77 29 48 (0.02) Charge for past use of Kodak IP 57 22 35 (0.01) Tax adjustments - 68 (68) 0.02 TOTAL IMPACT (370)$ (62)$ (308)$ 0.12$
Q4 2004 PBT (Inc)/Exp
Q4 2004 Tax Inc/(Exp)
Q4 2004 PAT (Inc)/Exp EPS impact
Gains on sales of investments and businesses (93) (36) (57) 0.02 Reorganization of business (28) (10) (18) 0.01 Collection of receivables that had been previosuly deemed uncollectible (Telsim) (23) (9) (14) 0.01 CMS Goodwill Impairment 58$ -$ 58$ (0.02)$ IPR&D charges related to acquisitions (Mesh and Crisnet) 17 - 17 (0.01) TOTAL IMPACT (69)$ (54)$ (15)$ 0.01$
Q4 2005
Q4 2004
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 48
OE Reconciliation of Significant Items- Quarter
Net Sales 10,433$
Operating earnings 1,749$ Operating earnings as a percentage of net sales 16.8%
Operating earnings 1,749$
Less: Significant items discussed (447)
Operating earnings excluding significant items discussed 1,302$ Operating earnings as a percentage of net sales 12.5%
Net Sales 8,842$
Operating earnings 1,018$ Operating earnings as a percentage of net sales 11.5%
Operating earnings 1,018$
Less: Significant items discussed 24
Operating earnings excluding significant items discussed 1,042$ Operating earnings as a percentage of net sales 11.8%
Q4 2005
Q4 2004
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 49
OE Reconciliation By Segment of Significant Items From Continuing Operations-Quarter
TOTAL Mobile Devices Networks GEMS Conn.Home Other/Elims
Net Sales 10,433$ 6,537$ 1,494$ 1,816$ 675$ (89)$
Operating earnings 1,749 663 225 314 60 487 Operating earnings as a percentage of net sales 16.8% 10.1% 15.1% 17.3% 8.9% -547.2%
Operating earnings 1,749 663 225 314 60 487
Less: Significant items discussed (447) 57 0 0 0 (504)
Operating earnings excluding significant items discussed 1,302$ 720$ 225$ 314$ 60$ (17)$ Operating earnings as a percentage of net sales 12.5% 11.0% 15.1% 17.3% 8.9% 19.1%
TOTAL Mobile Devices Networks GEMS Conn.Home Other/Elims
Net Sales 8,842$ 5,017$ 1,549$ 1,676$ 669$ (69)$
Operating earnings 1,018 532 275 222 43 (54) Operating earnings as a percentage of net sales 11.5% 10.6% 17.8% 13.2% 6.4% 78.3%
Operating earnings 1,018 532 275 222 43 (54)
Less: Significant items discussed 24 (18) (6) 13 0 35
Operating earnings excluding significant items discussed 1,042$ 514$ 269$ 235$ 43$ (19)$ Operating earnings as a percentage of net sales 11.8% 10.2% 17.4% 14.0% 6.4% 27.5%
Q4 2005
Q4 2004
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 50
Significant Items Discussed- Annual
2005 PBT (Inc)/Exp
2005 Tax Inc/(Exp)
2005 PAT (Inc)/Exp
Reorganization of Business 116$ 29$ 87$ Collection related to Telsim (504) (181) (323) Charge for past use of Kodak IP 57 22 35 Gains on sales of investments and businesses (1,803) (676) (1,127) Sprint/Nextel derivative (52) (19) (33) Debt retirement Costs 137 52 85 Other - Repayment of previously-reserved loan (Iridium) (30) (11) (19) Tax adjustments - 443 (443) TOTAL IMPACT (2,079)$ (342)$ (1,738)$
2004 PBT (Inc)/Exp
2004 Tax Inc/(Exp)
2004 PAT (Inc)/Exp
Reorganization of Business (6)$ (1)$ (5)$ Collection of receivables that had been previously deemed uncollectible (Telsim) (44) (17) (27) IPR&D charges related to acquisitions 32 - 32 Goodwill impairment (CMS) 125 - 125 Gains on sales of investments and businesses (418) (160) (258) Reversal of reserves relating to the previous sale of a business (CPD) (20) (8) (12) Partial recovery of a previously impaired investment (Callahan) (20) (8) (12) Charges related to debt retirement and cancellation of interest rate swaps 81 31 50 Tax adjustments - (236) 236 TOTAL IMPACT (272)$ (399)$ 127$
2004 YTD
2005 YTD
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 51
OE Reconciliation of Significant Items- Annual
Net Sales 36,843$
Operating earnings 4,696 Operating earnings as a percentage of net sales 12.7%
Operating earnings 4,696
Less: Significant items discussed (331)
Operating earnings excluding significant items discussed 4,365$ Operating earnings as a percentage of net sales 11.8%
Net Sales 31,323$
Operating earnings 3,132 Operating earnings as a percentage of net sales 10.0%
Operating earnings 3,132 Less: Significant items discussed 106
Operating earnings excluding significant items discussed 3,238$ Operating earnings as a percentage of net sales 10.3%
2005 YTD
2004 YTD
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 52
OE Reconciliation By Segment of Significant Items From Continuing Operations-Annual
TOTAL Mobile Devices Networks GEMS Conn.Home Other/Elims
Net Sales 36,843$ 21,455$ 6,332$ 6,597$ 2,765$ (306)$
Operating earnings 4,696 2,198 990 882 185 441 Operating earnings as a percentage of net sales 12.7% 10.2% 15.6% 13.4% 6.7% -144.1%
Operating earnings 4,696 2,198 990 882 185 441 Less: Significant items discussed (331) 88 3 67 4 (493)
Operating earnings excluding significant items discussed 4,365$ 2,286$ 993$ 949$ 189$ (52)$ Operating earnings as a percentage of net sales 11.8% 10.7% 15.7% 14.4% 6.8% 17.0%
TOTAL Mobile Devices Networks GEMS Conn.Home Other/Elims
Net Sales 31,323$ 17,108$ 6,026$ 6,228$ 2,214$ (253)$
Operating earnings 3,132 1,728 718 842 146 (302) Operating earnings as a percentage of net sales 10.0% 10.1% 11.9% 13.5% 6.6% 119.4%
Operating earnings 3,132 1,728 718 842 146 (302) Less: Significant items discussed 106 (26) 15 26 (4) 95
Operating earnings excluding significant items discussed 3,238$ 1,702$ 733$ 868$ 142$ (207)$ Operating earnings as a percentage of net sales 10.3% 9.9% 12.2% 13.9% 6.4% 81.8%
2005 YTD
2004 YTD
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 53
Reconciliation of Revenue Per Headcount2003 2004 Q1 '05 Q2 '05 Q3 '05 Q4 '05
Headcount 65,639 67,641 67,952 68,568 68,777 68,971 Rolling 12 Months of Sales 23,155 31,323 32,043 33,326 35,252 36,842 *Revenue / HC (In 000's) 353 463 472 486 513 534
* Revenue Per Head = Rolling 12 Months of Sales / Qtr Ending Headcount
Q4 Earnings Release- January 19, 2006MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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Safe Harbor StatementDuring this call we have made a number of forward-looking statements. Forward-looking statements are any statements that are not historical facts. These forward-looking statements are based on the current expectations of Motorola and there can be no assurance that such expectations will prove to be correct. Such forward-looking statements include, but are not limited to, our comments and answers relating to the following topics: (1) guidance for Motorola’s sales and earnings per share for the first quarter of 2006; (2) Motorola’s expected effective tax rate and shares outstanding in the first quarter of 2006; (3) expectations regarding the volume and impact of our stock repurchase program; (4) Motorola’s expected stock option expense in 2006; (5) expected gains from the sale of investments in 2006; (6) future sales, profitability, operating earnings, operating margin and market share for each of Motorola’s segments; (7) expectations for Motorola’s future operating margin and various factors in its improvement, (8) expected timing for the announcement, launch and shipment ofnew products; (9) the sales impact and pricing of new products; and (10) the size of the worldwide handset and infrastructure markets in 2006. Because forward-looking statements involve risks and uncertainties, Motorola’s actual results could differ materially from those stated in the forward looking statements. Information about factors that could cause such differences can be found in this afternoon's press release, on pages 70 through 80 of Motorola’s 2004 Annual Report on Form 10-K and in Motorola’s other SEC filings.
This presentation is being made on the afternoon of January 19, 2006. The content of this presentation contains time-sensitive information that is accurate only as of the time hereof. If any portion of this presentation is rebroadcast, retransmitted or redistributed at a later date, Motorola will not be reviewing or updating the material that is contained herein.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006