Motorola Reports Second-Quarter Results.Business Editors/Telecommunications Writers SCHAUMBURG Schaum·burg A village of northeast Illinois, a suburb of Chicago. Population: 74,900. , Ill.--(BUSINESS WIRE)--July 11, 2001 Motorola (Motorola, Inc., Schaumburg, IL, www.motorola.com) A leading manufacturer of semiconductor devices, electronics, telecommunications and satellite systems. Founded in Chicago in 1928 by Paul V. , Inc. (NYSE NYSE See: New York Stock Exchange :MOT (OpenView Managed Object Toolkit) An OpenView toolkit from HP for developing network management applications based on CMIS. The toolkit contains library routines that handle the transmission and receipt of CMIS requests and responses. ) today reported sales of $7.5 billion in the second quarter of 2001. For ongoing operations, this is a decrease of 19 percent from $9.3 billion a year earlier. Including pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma adjustments, the company incurred a loss of $232 million, or (11) cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared with earnings of $551 million, or 25 cents per share a year ago. Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. L. Growney, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , said, "Despite the difficulties the telecom and semiconductor industries continue to experience and our operational loss for the second quarter, we continue to strengthen our balance sheet. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was strongly positive at approximately $1 billion. The actions we have taken to improve the performance of the wireless telephone segment of our business are beginning to show positive results with new products and orders. The Office of the Chairman is also working very closely with our semiconductor management in efforts to revitalize re·vi·tal·ize tr.v. re·vi·tal·ized, re·vi·tal·iz·ing, re·vi·tal·iz·es To impart new life or vigor to: plans to revitalize inner-city neighborhoods; tried to revitalize a flagging economy. that business." In the second quarter of 2001, Motorola reported pro forma adjustments resulting in a net charge of $496 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta , or 24 cents per share after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. . Charges were incurred primarily relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc various cost-reduction activities and asset impairments, many of which did not result in a tax benefit. These charges were partially offset by gains from sales of investments. In the second quarter of 2000, the company reported pro forma adjustments resulting in a net charge of $355 million pre-tax, or 16 cents per share after-tax, which was largely comprised of in-process research and development charges, not deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). for tax purposes, related to acquisitions completed during that quarter. Excluding pro forma adjustments, the second-quarter 2001 loss was $759 million, or (35) cents per share, compared with earnings of $204 million, or 9 cents per share, in the second quarter of 2000.
Consolidated Results for Ongoing Operations, Including Pro Forma
Adjustments
------------------------------------------------------------------
Including pro forma adjustments, a comparison of results from
ongoing operations is as follows:
(Dollars in millions, except per-share amounts)
Second Quarter Six Months
-------------- ----------
2001 2000 2001 2000
---- ---- ---- ----
Sales $7,522 $9,255 $15,274 $18,007
Net Earnings (Loss) $(232) $551 $(438) $1,032
Earnings (Loss) Per Share $(.11) $.25 $(.20) $.46
Net Margin on Sales -3.1% 6.0% -2.9% 5.7%
Total Consolidated Results
--------------------------
Excluding pro forma adjustments, a comparison of results from
operations is as follows:
(Dollars in millions, except per-share amounts)
Second Quarter Six Months
-------------- ----------
2001 2000 2001 2000
---- ---- ---- ----
Sales $7,522 $9,255 $15,274 $18,023
Net Earnings (Loss) $(759) $204 $(1,292) $652
Earnings (Loss) Per Share $(.35) $.09 $(.59) $.29
Net Margin on Sales -10.1% 2.2% -8.5% 3.6%
The impact of pro forma adjustments (as defined in a footnote Text that appears at the bottom of a page that adds explanation. It is often used to give credit to the source of information. When accumulated and printed at the end of a document, they are called "endnotes." to this press release) on segment results is shown in the segment information tables at the end of this press release. Growney reviewed the following results of major operations for the second quarter of 2001 compared with the second quarter of 2000. This review is based on ongoing operations, including pro forma adjustments. Personal Communications Segment Segment sales were $2.5 billion, down 25 percent. Orders were $2.9 billion, down 9 percent. The segment incurred an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $237 million versus operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before of $136 million a year ago. The decline in financial performance is due to lower worldwide demand for wireless telephones by service providers and average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. declines resulting from substantial shipments of end-of-life end-of-life Cardiac pacing noun The point at which a pacemaker signals need for replacement, as its battery is nearing depletion Medtalk adjective products. In the Americas A·mer·i·cas , the See America. , sales and orders for wireless telephones were down. In Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , sales were down very significantly and orders were
significantly lower. In Asia, sales were lower, while orders were
significantly higher.Shortly after the close of the quarter, Motorola and Hutchison Whampoa Hutchison Whampoa Limited or HWL (Traditional Chinese: 和記黃埔有限公司, HKSE: 0013 Group signed a Third-Generation (3G) handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. contract that runs through 2003. Motorola was named a Hutchison Hutchison may refer to: People with the surname Hutchison:
1. Any service provided by a telecommunication provider. 2. (UMTS (Universal Mobile Telecommunications System) The GSM implementation of the 3G wireless phone system. Part of IMT-2000, UMTS provides service in the 2 GHz band and offers global roaming and personalized features. ) devices in its key markets including Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , Austria Austria (ô`strēə), Ger. Österreich [eastern march], officially Republic of Austria, federal republic (2005 est. pop. 8,185,000), 32,374 sq mi (83,849 sq km), central Europe. , Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. , Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. and the United Kingdom. The contract has an estimated value of more than $700 million. Shipments are expected to begin in the second half of 2002. In North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , two new wireless telephones for Code Division Multiple Access (CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. ) technology, the V.Series(TM) 60c and V120c The Motorola V120c is a CDMA cell phone sold in 2002 by Motorola. It was mainly used with Verizon and Alltel networks, and included a number of simple features. It had an extensible antenna. , became available nationwide in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Motorola also began shipping its Timeport(TM) 270c phone in regional markets. All three CDMA devices are tailored to specific consumer segments and include Motorola's new and improved user interface. Motorola began U.S. shipments of its V.Series V100 personal communicator A concept for a handheld device that was co-created by Toronto engineer Robert J. Fraser in 1991, who also coined the term. The personal communicator was conceived to provide always-on, wireless connectivity to a nationwide, packet-switched communications network that would enable mobile . Based on Global System for Mobile (GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. ) Communications technology Noun 1. communications technology - the activity of designing and constructing and maintaining communication systems engineering, technology - the practical application of science to commerce or industry , the first-of-its-kind device includes a full keyboard and oversize o·ver·size n. 1. A size that is larger than usual. 2. An oversize article or object. adj. o·ver·size also o·ver·sized Larger in size than usual or necessary. Adj. 1. display for fast and easy text messaging Sending short messages to a smartphone, pager, PDA or other handheld device. Text messaging implies sending short messages generally no more than a couple of hundred characters in length. , plus a full-featured wireless phone. Motorola also began delivering its new, compact and easy-to-use Talkabout
TalkAbout is a two-way radio produced by Motorola. (R) 189 phone in Asia and began shipping to Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. its first 3G phone based on CDMA 1X technology. Motorola also shipped its one millionth Talkabout T900 2-Way text messaging device less than a year after its introduction. The first two Java(TM) technology-enabled wireless telephones in North America, the Motorola iDEN(R) i85s and i50sx models, were made available to subscribers. Global Telecom Solutions Segment Segment sales were $1.7 billion, down 14 percent. Orders declined 6 percent to $2.0 billion. Operating earnings declined to $47 million, compared with $258 million a year ago. Operating earnings declined due to a decrease in sales stemming from lower worldwide demand for wireless infrastructure equipment by service providers and an increase in manufacturing costs. In the Americas, sales and orders were lower. In Europe, sales and orders were down significantly. In Asia, sales were down while orders were up. Motorola won 11 contracts valued at $407 million as part of China Unicom's nationwide deployment of CDMA digital network technology. Motorola also was awarded more than $600 million in additional contracts with China Mobile and China Unicom China Unicom, full name China United Telecommunications Corporation, 中国联通, HKSE: 0762 NYSE: CHU, is a telecommunication operator in the People's Republic of China. 52. during the second quarter for GSM networks. Motorola will provide a 3G radio access network under a supply contract awarded by Hutchison Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. for a UMTS network in Brisbane Brisbane (brĭz`bən), city (1991 pop. 1,145,537), capital of Queensland, E Australia, on the Brisbane River above its mouth on Moreton Bay. and Sydney Sydney, city, Australia Sydney, city (1991 pop. 3,097,956), capital of New South Wales, SE Australia, surrounding Port Jackson inlet on the Pacific Ocean. Sydney is Australia's largest city, chief port, and main cultural and industrial center. , Australia. After the quarter ended, Motorola announced it had won its first two contracts to supply 3G CDMA infrastructure in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . The contracts, awarded by Portugal Telecom Portugal Telecom (Euronext: PTC, NYSE: PT) is the biggest telecommunications operator in Portugal. It operates mainly in Portugal and Brazil. It also has a significant presence in Morocco, Guinea-Bissau, Cape Verde, Mozambique, Timor-Leste, Angola, Kenya, the People's Republic and valued at approximately $147 million, are for its Brazilian cellular operators Telesp Telesp - Telecomunicações de São Paulo S.A. (NYSE: TSP) is a telecommunications company in São Paulo state, Brazil. The company was originally formed as part of Telebrás, the state-owned telecom monopoly at the time. Celular and Global Telecom. Motorola also announced a $150 million GSM infrastructure expansion contract with BT Cellnet, a leading UK mobile operator. Commercial, Government and Industrial Systems Segment Segment sales declined 8 percent to $1.0 billion and orders decreased 4 percent to $1.2 billion. Operating earnings decreased to $66 million from $117 million a year ago due to a decline in sales and an increase in manufacturing costs as a percentage of sales. In the Americas, two-way radio A voice network that provides an always-on connection enabling the user to just "push the button and talk." Also called "dispatch radio," two-way radio has traditionally been used by police, fire, taxi and other mobile fleets. equipment sales and orders were down. In Europe, sales were down significantly and orders were down. In Asia, sales were down and orders were down significantly. Motorola was awarded contracts for TETRA tetra: see characin. tetra Any of numerous attractively coloured freshwater South American and African fishes (family Characidae), often kept in home aquariums. Tetras are small, lively, hardy, and unaggressive. (TErrestrial Trunked RAdio TErrestrial Trunked RAdio (TETRA) (formerly known as Trans European Trunked RAdio) is a specialist Professional Mobile Radio and two-way transceiver (colloquially known as a walkie talkie), designed for use by government agencies, and specifically emergency )-compliant radio equipment in China and the UK. Motorola and SAIT-STENTO were granted a license from the Danish Telecom Authority to establish and provide service on a new, TETRA-based digital mobile radio network. Motorola was awarded a contract for a statewide ASTRO 25(TM) digital radio system from the State of South Dakota South Dakota (dəkō`tə), state in the N central United States. It is bordered by North Dakota (N), Minnesota and Iowa (E), Nebraska (S), and Wyoming and Montana (W). . The company also signed an agreement to purchase, operate and upgrade SCANA SCANA South Carolina Association of Nurse Anesthetists SCANA Self Contained Adverse Night Attack Communications' statewide radio system, which serves public safety agencies and utilities throughout South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. . Additional large radio equipment contracts were received in Asia, Australia, Europe, Latin America and the United States. Motorola announced that it was exploring strategic alternatives for its Integrated Information Systems Group (IISG IISG Internationaal Instituut voor Sociale Geschiedenis (Dutch: International Institute of Social History; Amsterdam, Netherlands) ) business, including a possible divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). . IISG is an Arizona-based government communication/information technology business. Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). Communications Segment Segment sales increased 7 percent to $820 million but orders fell 16 percent to $760 million. Operating earnings increased to $145 million from $137 million a year ago. Digital Network Systems had a significant increase in sales but a decline in orders. Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. Network Systems had lower sales and higher orders. Transmission Network Systems had a significant decline in sales and in orders. Satellite Broadcast and Network Systems had an increase in sales and in orders. Motorola announced two important industry milestones during the quarter by shipping its 15 millionth interactive digital cable set-top terminal and its five millionth cable modem cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. . Motorola is the first and only supplier to reach these broadband-industry milestones. Motorola's commercial deployment of Voice over IP (Internet Protocol) solutions continues to see progress. Kabel Kabel may refer to:
NRW Non-Revenue Water NRW Northern Right Whale NRW Nicolson-Ross-Weir (measurement technique) NRW Nonradioactive Waste , a network operator affiliated with Callahan Callahan, an Irish surname, can refer to: People In sports
emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. markets. In China, Motorola was selected to supply optical and RF transmission products to Beijing Beijing (bā-jĭng) or Peking (pē-kĭng, pā–), city (1994 est. urban pop. 6,093,300; 1994 est. total pop. 7,240,700), capital of the People's Republic of China. It is in central Hebei prov. Gehua CATV (Community Antenna TV) The original name for cable TV. It used a single antenna at the highest location in the community in order to deliver a quality signal to homes in areas with hilly terrain or other interference. Network Co., which are intended to enable Beijing Gehua CATV to offer advanced video, voice, high-speed Internet See broadband. access, and other data services. Semiconductor Products Segment Segment sales decreased 38 percent to $1.3 billion and orders declined 51 percent to $1.0 billion. The segment had an operating loss of $381 million versus operating earnings of $176 million a year ago due to the decline in sales and orders, which are part of a very substantial downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. occurring across the worldwide semiconductor industry. This also caused an increase in manufacturing costs as a percentage of sales. Sales were down significantly in Europe and the Americas and down in Asia/Pacific and Japan. Sales among major markets were down very significantly in standard embedded Inserted into. See embedded system. solutions, down significantly in wireless and network/computing and down in imaging/entertainment and transportation. Orders were down very significantly in the Americas and Europe, down significantly in Japan and Asia/Pacific. Among major markets, orders were down very significantly in standard embedded solutions, wireless and networking/computing, down significantly in imaging/entertainment and down in transportation. Motorola announced several new members of its PowerQUICC(TM) family, the industry's most widely used communication processors. Built on the Smart Networks Platform, these products are used in cellular base stations, telecom switching, remote access concentrators A remote access server that supports one or more T1/E1 lines, allowing multiple analog and ISDN calls to come in over one port from the telephone company. Remote access concentrators can handle much higher call densities than remote access servers. and ATM (asynchronous transfer mode See ATM. (communications) Asynchronous Transfer Mode - (ATM, or "fast packet") A method for the dynamic allocation of bandwidth using a fixed-size packet (called a cell). See also ATM Forum, Wideband ATM. ATM acronyms. Indiana acronyms. ) applications. Motorola also introduced two new products within its DragonBall(TM) microprocessor microprocessor, integrated circuit containing the arithmetic, logic, and control circuitry required to interpret and execute instructions from a computer program. (MPU See microprocessor. ) family, the industry's leading MPUs for handheld computers A computing device that can be easily held in one hand while the other hand is used to operate it. The Palm devices are a popular example. See Palm, smartphone and palmtop. and portable wireless devices. The new ARM core-based MX1 multimedia platform and the MC68000-based SuperVZ both offer system solutions for 2.5G and 3G portable wireless devices. Motorola's mobileGT(TM) architecture for driver information systems was selected by Hyundai Autonet Co. Motorola is a key member of the mobileGT alliance of companies whose technologies are enabling automakers worldwide to bring "smart cars" to consumers. Integrated Electronic Systems Segment Segment sales decreased 19 percent to $549 million and orders decreased 21 percent to $554 million. The segment incurred an operating loss of $3 million versus operating earnings of $45 million a year ago due to a decline in sales of higher margin products. During the quarter, the Automotive and Industrial Electronics Group was combined with the Telematics Communications Group to form the new Automotive Communications and Electronic Systems (ACES) Group. This reorganization is expected to enable Motorola to offer a broader automotive communications solutions portfolio. ACES sales and orders decreased. Sales and orders of automotive electronics and communications systems In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. were down due to lower production in the automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. . Sales of telematics systems were up very significantly and orders were higher. ACES and Trafficmaster, PLC announced plans to jointly produce a dynamic navigation system A GPS-based electronic system in a car or truck that provides a real time map of the vehicle's current location as well as step-by-step directions to a programmed destination. See GPS and vehicle tracking. , called T-nav service, which is expected to incorporate real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. , traffic-flow data. Motorola Computer Group (MCG mcg microgram. mcg abbr. microgram mcg microgram. mcg Microgram, see there; the preferred written abbreviation is µg ) sales were down significantly while orders were down very significantly due to the downturn in the telecommunications industry, its major market. After the quarter ended, Motorola completed its acquisition of Blue Wave Systems, Inc., a leading supplier of high-channel Digital Signal Processing See DSP. Digital Signal Processing - (DSP) Computer manipulation of analog signals (commonly sound or image) which have been converted to digital form (sampled). (DSP (1) (Digital Signal Processor) A special-purpose CPU used for digital signal processing applications (see definition #2 below). It provides ultra-fast instruction sequences, such as shift and add, and multiply and add, which are commonly used in math-intensive ) subsystems used in telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. infrastructure equipment. The acquisition is intended to strengthen MCG's ability to provide DSP solutions to that market and gives MCG a stronger presence in Europe. Energy Systems Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. and orders were down due to the decrease in demand for portable and handheld devices. Other Motorola announced that it had completed the sale of its investments in four cellular operating companies operating company A business that engages in transactions with outsiders. in northern Mexico to Telefonica, SA. Motorola also sold its investments in cellular operating companies in Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , southern Mexico and South Korea. After the quarter ended, Motorola announced that it had signed an agreement to sell its Multiservice Networks Division to Platinum Equity Platinum Equity is an American information technology and private equity firm. It was founded by billionaire Tom Gores in 1995 and is headquartered in Beverly Hills, California. . Motorola has a loan of approximately $2 billion to Telsim, a GSM operator in Turkey. At the end of April, $728 million of the loan became due and was not paid. In June, following Telsim's event of default, Motorola accelerated all payments due under the loan. Motorola continues to explore alternatives for repayment of the loan, including legal action. Review and Outlook Christopher B. Galvin, chairman and chief executive officer, said, "During the second quarter, Motorola recorded strong, positive cash flow from operations; reduced receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed ; reduced inventories; reduced short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. and total debt; while simultaneously, increasing its cash position. We know how to manage in recessionary environments and all businesses in Motorola will continue to be very focused on maintaining a strong balance sheet and improving operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. . "Motorola sensed the downturn of the telecom and semiconductor industries over 10 months ago and began reducing its costs early. Most industry participants and experts have acknowledged the reality of the sharpest downturns in high-tech in decades. Newly revised government data shows that the decline in communications equipment orders is worse than many in the industry first believed. The industry's fundamentals are weak and the imbalance imbalance /im·bal·ance/ (im-bal´ans) 1. lack of balance, such as between two opposing muscles or between electrolytes in the body. 2. dysequilibrium (2). between inventories and demand has spilled over into Europe. "Despite the economy, our new products are again capturing the imagination of service providers and consumers. Our wireless telephone business, for example, is already beginning to show signs of recovery and we expect to see an increase in customer demand, especially for our new 2.5G products, starting in the third quarter. "The semiconductor industry should resume a double-digit growth pattern next year. Renewed demand, fueled by new products, combined with a reduction in excess manufacturing capacity in both the wireless telephone and semiconductor industries, is reducing inventories, and over time, inventories are expected to return to normal levels. "We continue to review, renew and adjust our strategies to ensure Motorola is in attractive businesses. We will continue to invest to develop or acquire the technologies necessary to ensure the success of our businesses. All of our efforts are focused on leading Motorola out of this high-tech recession and creating value for our shareholders." Note: Pro Forma adjustments include unusual charges, amortization of goodwill, asset impairments, and gains (losses) on sale of investments. The use of the word "significant" in this press release indicates a change of greater than 25 percent. The use of the words "very significant" indicates a change of greater than 50 percent. Business Risks: Statements in this press release that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based on current expectations that involve risks and uncertainties. Such forward-looking statements include, but are not limited to, statements about: the future performance of Motorola's wireless telephone and semiconductor businesses; the value of contracts to supply 3G products; expected shipments of 3G wireless telephones; the commercial availability and performance of new products; the impact of Motorola's reorganization and cost-reduction activities; the impact of recent acquisitions and divestitures and the completion of pending transactions; as well as, the statements in "Review and Outlook". Motorola wishes to caution the reader that the factors below and those on pages F-29 through F-33 of the appendix to Motorola's Proxy Statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. for the 2001 annual meeting of stockholders and in its other SEC filings could cause Motorola's actual results to differ materially from those stated in the forward-looking statements. These factors include: (i) the impact of the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the overall economy and the uncertainty of current economic conditions; (ii) ongoing difficulties experienced by the entire telecommunications and semiconductor industries; (iii) the success of Motorola's ongoing cost-reduction efforts; (iv) Motorola's continuing ability to access the capital markets on favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms; (v) demand for Motorola's products, including products related to new technologies; (vi) Motorola's ability to achieve profitability in its wireless telephone business, especially as it competes in the lower-tier wireless telephone market; (vii) the demand for vendor financing Vendor Financing The lending of money by a company to one of its customers so that the customer can buy products from it. By doing this, the company increases its sales even though it is basically buying its own products. and Motorola's ability to provide that financing in order to remain competitive; (viii) the creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. of Motorola's customers, especially purchasers of large infrastructure systems; (ix) the repayment of Motorola's loan to Telsim; (x) unexpected liabilities or expenses, including unfavorable outcomes to any currently pending or future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , including any relating to the Iridium iridium (ĭrĭd`ēəm), metallic chemical element; symbol Ir; at. no. 77; at. wt. 192.22; m.p. about 2,410°C;; b.p. about 4,130°C;; sp. gr. 22.55 at 20°C;; valence +3 or +4. project; (xi) the success of alliances and agreements with other companies to develop new products and services; (xii) product and technology development and commercialization risks; (xiii) difficulties in integrating the operations of newly-acquired businesses and achieving strategic objectives, cost savings and other benefits; (xiv) the impact of foreign currency fluctuations; and (xv) the impact of changes in governmental policies, laws or regulations. MOTOROLA and the Stylized styl·ize tr.v. styl·ized, styl·iz·ing, styl·iz·es 1. To restrict or make conform to a particular style. 2. To represent conventionally; conventionalize. M Logo are registered in the U.S. Patent & Trademark Office. All other product or service names are the property of their respective owners.(c)Motorola, Inc. 2001 Java is a trademark owned by Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. , Inc.
Motorola, Inc. and Subsidiaries
Consolidated Statements of Operations
(In millions, except per share amounts)
For the Quarter Ended June 30, 2001
------------------------------------------------------
Total Excl
Pro Forma Pro Forma Impact of Pro Forma
Total Adjustments Total Exited Ongoing
Motorola Inc/(Exp) Motorola Businesses Operations
---------- ---------- ---------- ---------- ----------
Net sales $ 7,522 $ - $ 7,522 $ - $ 7,522
Costs and
expenses
Manufacturing
and other
costs of sales 5,434 (307) 5,127 - 5,127
Selling,
general and
administrative
expenses 989 (19) 970 - 970
Research and
development
expenditures 1,086 - 1,086 - 1,086
Depreciation
expense 589 - 589 - 589
Reorganization
of businesses 619 (619) - - -
Other charges 293 (293) - - -
Interest
expense, net 102 - 102 - 102
Gains on sales
of investments
and businesses (742) 742 - - -
---------- --------------------- ---------------------
Total costs and
expenses 8,370 (496) 7,874 - 7,874
---------- --------------------- ---------------------
Earnings (loss)
before income
taxes (848) 496 (352) - (352)
Income tax
provision
(benefit) (89) (31) (120) (120)
---------- --------------------- ---------------------
Net earnings
(loss) $ (759)$ 527 $ (232)$ - $ (232)
========== ===================== =====================
Net earnings (loss) per common share
------------------------------------
Basic $ (0.35)$ 0.24 $ (0.11)$ - $ (0.11)
Diluted $ (0.35)$ 0.24 $ (0.11)$ - $ (0.11)
Weighted average common shares outstanding
------------------------------------------
Basic 2,202.9 2,202.9 2,202.9 2,202.9 2,202.9
Diluted 2,202.9 2,202.9 2,202.9 2,202.9 2,202.9
Dividends Paid
per share $ 0.04 $ 0.04 $ 0.04
Net Margin on
sales -10.1% -3.1% -3.1%
For the Quarter Ended July 1, 2000
------------------------------------------------------
Total Excl
Pro Forma Pro Forma Impact of Pro Forma
Total Adjustments Total Exited Ongoing
Motorola Inc/(Exp) Motorola Businesses Operations
---------- ---------- ---------- ---------- ----------
Net sales $ 9,255 $ - $ 9,255 - $ 9,255
Costs and
expenses
Manufacturing
and other
costs of sales 5,508 - 5,508 - 5,508
Selling,
general and
administrative
expenses 1,311 (68) 1,243 - 1,243
Research and
development
expenditures 1,107 - 1,107 - 1,107
Depreciation
expense 568 - 568 - 568
Reorganization
of businesses - - - - -
Other charges 306 (306) - - -
Interest
expense, net 54 - 54 - 54
Gains on sales
of investments
and businesses (19) 19 - - -
---------- --------------------- ---------------------
Total costs and
expenses 8,835 (355) 8,480 - 8,480
---------- --------------------- ---------------------
Earnings (loss)
before income
taxes 420 355 775 - 775
Income tax
provision
(benefit) 216 8 224 - 224
---------- --------------------- ---------------------
Net earnings
(loss) $ 204 $ 347 $ 551 $ - $ 551
========== ===================== =====================
Net earnings (loss) per common share
------------------------------------
Basic $ 0.09 $ 0.16 $ 0.25 $ - $ 0.25
Diluted $ 0.09 $ 0.16 $ 0.25 $ - $ 0.25
Weighted average common shares outstanding
------------------------------------------
Basic 2,165.0 2,165.0 2,165.0 2,165.0 2,165.0
Diluted 2,249.7 2,249.7 2,249.7 2,249.7 2,249.7
Dividends Paid
per share $ 0.04 $ 0.04 $ 0.04
Net Margin on
sales 2.2% 6.0% 6.0%
Motorola, Inc. and Subsidiaries
Consolidated Statements of Operations
(In millions, except per share amounts)
For the Six Months Ended June 30, 2001
------------------------------------------------------
Total Excl
Pro Forma Pro Forma Impact of Pro Forma
Total Adjustments Total Exited Ongoing
Motorola Inc/(Exp) Motorola Businesses Operations
---------- ---------- ---------- ---------- ----------
Net sales $ 15,274 $ - $ 15,274 $ - $ 15,274
Costs and
expenses
Manufacturing
and other
costs of
sales (2) 11,154 (831) 10,323 - 10,323
Selling,
general and
administrative
expenses (2) 1,999 (46) 1,953 - 1,953
Research and
development
expenditures 2,258 - 2,258 - 2,258
Depreciation
expense 1,216 - 1,216 - 1,216
Reorganization
of businesses 860 (860) - - -
Other charges 394 (394) - - -
Interest
expense, net 188 - 188 - 188
Gains on sales
of investments
and businesses (1,356) 1,356 - - -
---------- --------------------- ---------------------
Total costs and
expenses 16,713 (775) 15,938 - 15,938
---------- --------------------- ---------------------
Earnings (loss)
before income
taxes (1,439) 775 (664) - (664)
Income tax
provision
(benefit) (147) (79) (226) (226)
---------- --------------------- ---------------------
Net earnings
(loss) $ (1,292)$ 854 $ (438)$ - $ (438)
========== ===========================================
Net earnings (loss) per common share
------------------------------------
Basic $ (0.59)$ 0.39 $ (0.20)$ - $ (0.20)
Diluted $ (0.59)$ 0.39 $ (0.20)$ - $ (0.20)
Weighted average common shares outstanding
------------------------------------------
Basic 2,198.8 2,198.8 2,198.8 2,198.8 2,198.8
Diluted 2,198.8 2,198.8 2,198.8 2,198.8 2,198.8
Dividends Paid
per share $ 0.08 $ 0.08 $ 0.08
Net Margin on
sales -8.5% -2.9% -2.9%
Return on
average
invested
capital (1) -2.7%
For the Six Months Ended July 1, 2000
------------------------------------------------------
Total Excl
Pro Forma Pro Forma Impact of Pro Forma
Total Adjustments Total Exited Ongoing
Motorola Inc/(Exp) Motorola Businesses Operations
---------- ---------- ---------- ---------- ----------
Net sales $ 18,023 $ - $ 18,023 $ (16)$ 18,007
Costs and expenses
Manufacturing
and other
costs of sales 10,708 - 10,708 (15) 10,693
Selling,
general and
administrative
expenses 2,610 (98) 2,512 - 2,512
Research and
development
expenditures 2,122 - 2,122 - 2,122
Depreciation
expense 1,126 - 1,126 - 1,126
Reorganization
of businesses - - - - -
Other charges 416 (416) - - -
Interest
expense, net 101 - 101 - 101
Gains on sales
of investments
and businesses (120) 120 - - -
---------- --------------------- ---------------------
Total costs and
expenses 16,963 (394) 16,569 (15) 16,554
---------- --------------------- ---------------------
Earnings (loss)
before income
taxes 1,060 394 1,454 (1) 1,453
Income tax
provision
(benefit) 408 13 421 - 421
---------- --------------------- ---------------------
Net earnings
(loss) $ 652 $ 381 $ 1,033 $ (1)$ 1,032
========== ===================== =====================
Net earnings (loss) per common share
------------------------------------
Basic $ 0.30 $ 0.18 $ 0.48 $ - $ 0.48
Diluted $ 0.29 $ 0.17 $ 0.46 $ - $ 0.46
Weighted average common shares outstanding
------------------------------------------
Basic 2,156.0 2,156.0 2,156.0 2,156.0 2,156.0
Diluted 2,254.2 2,254.2 2,254.2 2,254.2 2,254.2
Dividends Paid
per share $ 0.08 $ 0.08 $ 0.08
Net Margin on
sales 3.6% 5.7% 5.7%
Return on
average
invested
capital (1) 6.1%
(1) Based on the performance of the four preceding quarters ending
June 30, 2001 and July 1, 2000.
(2) Includes $242 million reclassification of first quarter 2001 costs
from selling, general and administrative expenses to manufacturing
and other costs of sales to correct improper classification.
Motorola, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
ASSETS June 30, Dec. 31,
2001 2000
---------- ----------
Cash and cash equivalents $ 4,451 $ 3,301
Short-term investments 302 354
Accounts receivable, net 4,995 7,092
Inventories, net 3,842 5,242
Other current assets 5,924 3,896
---------- ----------
Total current assets 19,514 19,885
---------- ----------
Property, plant and equipment, net 10,245 11,157
Investments 4,328 5,926
Other assets 4,641 5,375
---------- ----------
Total assets $ 38,728 $ 42,343
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable and current portion of
long-term debt $ 3,982 $ 6,391
Accounts payable 2,761 3,492
Accrued liabilities 6,182 6,374
---------- ----------
Total current liabilities 12,925 16,257
---------- ----------
Long-term debt 6,814 4,293
Other liabilities 2,203 2,696
Company-obligated mandatorily redeemable
preferred securities of subsidiary
trust holding solely company-
guaranteed debentures 485 485
Stockholders' equity 16,301 18,612
---------- ----------
Total liabilities and stockholders' equity $ 38,728 $ 42,343
========== ==========
Motorola, Inc. and Subsidiaries
Segment Information
(In millions)
Summarized below are the Company's segment sales as defined by
reportable segment for the three months ended June 30, 2001 and July
1, 2000.
For the Quarter Ended June 30, 2001
-----------------------------------------------
Segment Sales
-----------------------------------------------
Excl Impact
Total of Exited Ongoing % Change
Motorola Businesses Operations from 2000
-----------------------------------------------
Personal Communications
Segment $ 2,496 $ - $ 2,496 -25%
Global Telecom
Solutions Segment 1,679 - 1,679 -14%
Commercial, Govt, and
Industrial Systems
Segment 1,041 - 1,041 -8%
Broadband
Communications Segment 820 - 820 7%
Semiconductor Products
Segment 1,250 - 1,250 -38%
Integrated Electronic
Systems Segment 549 - 549 -19%
Other Products Segment 248 - 248 1%
Adjustments &
Eliminations (561) - (561) 35%
------------------------------------
Segment Totals $ 7,522 $ - $ 7,522 -19%
==============================================
For the Quarter Ended July 1, 2000
-----------------------------------------------
Segment Sales
-----------------------------------------------
Excl Impact
Total of Exited Ongoing
Motorola Businesses Operations
-----------------------------------------------
Personal Communications
Segment $ 3,332 $ - $ 3,332
Global Telecom
Solutions Segment 1,957 - 1,957
Commercial, Govt, and
Industrial Systems
Segment 1,137 - 1,137
Broadband
Communications Segment 768 - 768
Semiconductor Products
Segment 2,000 - 2,000
Integrated Electronic
Systems Segment 678 - 678
Other Products Segment 245 - 245
Adjustments &
Eliminations (862) - (862)
----------------------------------------------
Segment Totals $ 9,255 $ - $ 9,255
==============================================
Motorola, Inc. and Subsidiaries
Segment Information
(In millions)
Summarized below are the Company's segment operating earnings (loss)
before taxes as defined by reportable segment for the three months
ended June 30, 2001 and July 1, 2000.
For the Quarter Ended June 30, 2001
----------------------------------------------------------------------
Segment Operating Earnings (Loss) before Taxes
----------------------------------------------------------------------
Total
Pro Excl
Forma Impact Pro
Adjust- Pro of Forma
ments Forma Exited Ongoing
Total (Inc)/ Total Busin- Opera-
Motorola Exp Motorola esses tions % Sales
-------- --------------- ------------------------
Personal
Communications
Segment $ (645) $ 408 $ (237) $ - $ (237) -9 %
Global Telecom
Solutions Segment (126) 173 47 - 47 3 %
Commercial, Govt,
and Industrial
Systems Segment (6) 72 66 - 66 6 %
Broadband
Communications
Segment 39 106 145 - 145 18 %
Semiconductor
Products Segment (518) 137 (381) - (381) -30 %
Integrated Electronic
Systems Segment (50) 47 (3) - (3) -1 %
Other Products
Segment 418 (487) (69) - (69) -28 %
Adjustments &
Eliminations 61 - 61 - 61 -11 %
-------- --------------- ------------------------
Segment Totals (827) 456 (371) - (371) -5 %
General Corporate (21) 40 19 - 19
-------- --------------- ------------------------
Earnings (Loss) Before
Income Taxes $ (848) $ 496 $ (352) $ - $ (352) -5 %
======== =============== ========================
For the Quarter Ended July 1, 2000
----------------------------------------------------------------------
Segment Operating Earnings (Loss) before Taxes
----------------------------------------------------------------------
Total
Pro Excl
Forma Impact Pro
Adjust- Pro of Forma
ments Forma Exited Ongoing
Total (Inc)/ Total Busin- Opera-
Motorola Exp Motorola esses tions % Sales
-------- --------------- ------------------------
Personal
Communications
Segment $ 132 $ 4 $ 136 $ - $ 136 4 %
Global Telecom
Solutions
Segment 258 - 258 - 258 13 %
Commercial, Govt,
and Industrial
Systems Segment 108 9 117 - 117 10 %
Broadband
Communications
Segment 124 13 137 - 137 18 %
Semiconductor
Products Segment (55) 231 176 - 176 9 %
Integrated Electronic
Systems Segment 38 7 45 - 45 7 %
Other Products
Segment (169) 92 (77) - (77) -31 %
Adjustments &
Eliminations 3 (1) 2 2 0 %
-------- --------------- ------------------------
Segment Totals 439 355 794 - 794 9 %
General Corporate (19) - (19) - (19)
-------- --------------- ------------------------
Earnings (Loss)
Before Income
Taxes $ 420 $ 355 $ 775 $ - $ 775 8 %
======== =============== ========================
Motorola, Inc. and Subsidiaries
Segment Information
(In millions)
Summarized below are the Company's segment sales as defined by
reportable segment for the six months ended June 30, 2001 and July 1,
2000.
For the Six Months Ended June 30, 2001
-----------------------------------------------
Segment Sales
-----------------------------------------------
Excl Impact
Total of Exited Ongoing % Change
Motorola Businesses Operations from 2000
-----------------------------------------------
Personal Communications
Segment $ 4,780 $ - $ 4,780 -27%
Global Telecom
Solutions Segment 3,401 - 3,401 -10%
Commercial, Govt, and
Industrial Systems
Segment 2,091 - 2,091 -2%
Broadband
Communications Segment 1,638 - 1,638 13%
Semiconductor Products
Segment 2,733 - 2,733 -30%
Integrated Electronic
Systems Segment 1,186 - 1,186 -12%
Other Products Segment 493 - 493 -2%
Adjustments &
Eliminations (1,048) - (1,048) 37%
------------------------------------
Segment Totals $ 15,274 $ - $ 15,274 -15%
==============================================
For the Six Months Ended July 1, 2000
-----------------------------------------------
Segment Sales
-----------------------------------------------
Excl Impact
Total of Exited Ongoing
Motorola Businesses Operations
-----------------------------------------------
Personal Communications
Segment $ 6,568 $ - $ 6,568
Global Telecom
Solutions Segment 3,766 - 3,766
Commercial, Govt, and
Industrial Systems
Segment 2,135 - 2,135
Broadband
Communications Segment 1,446 - 1,446
Semiconductor Products
Segment 3,900 - 3,900
Integrated Electronic
Systems Segment 1,368 (16) 1,352
Other Products Segment 504 - 504
Adjustments &
Eliminations (1,664) - (1,664)
----------------------------------------------
Segment Totals $ 18,023 $ (16) $ 18,007
==============================================
Motorola, Inc. and Subsidiaries
Segment Information
(In millions)
Summarized below are the Company's segment operating earnings (loss)
before taxes as defined by reportable segment for the six months ended
June 30, 2001 and July 1, 2000.
For the Six Months Ended June 30, 2001
----------------------------------------------------------------------
Segment Operating Earnings (Loss) before Taxes
----------------------------------------------------------------------
Total
Pro Excl
Forma Impact Pro
Adjust- Pro of Forma
ments Forma Exited Ongoing
Total (Inc)/ Total Busin- Opera-
Motorola Exp Motorola esses tions % Sales
-------- --------------- ------------------------
Personal
Communications
Segment $ (1,557) $ 918 $ (639) $ - $ (639) -13 %
Global Telecom
Solutions Segment (87) 188 101 - 101 3 %
Commercial, Govt,
and Industrial
Systems Segment 32 90 122 - 122 6 %
Broadband
Communications
Segment 137 138 275 - 275 17 %
Semiconductor
Products Segment (805) 293 (512) - (512) -19 %
Integrated Electronic
Systems Segment (46) 62 16 - 16 1 %
Other Products
Segment 878 (977) (99) - (99) -20 %
Adjustments &
Eliminations 91 - 91 - 91 - 9 %
-------- --------------- ------------------------
Segment Totals (1,357) 712 (645) - (645) - 4 %
General Corporate (82) 63 (19) - (19)
-------- --------------- ------------------------
Earnings (Loss) Before
Income Taxes $(1,439) $ 775 $ (664) $ - $ (664) - 4 %
======== =============== ========================
For the Six Months Ended July 1, 2000
----------------------------------------------------------------------
Segment Operating Earnings (Loss) before Taxes
----------------------------------------------------------------------
Total
Pro Excl
Forma Impact Pro
Adjust- Pro of Forma
ments Forma Exited Ongoing
Total (Inc)/ Total Busin- Opera-
Motorola Exp Motorola esses tions % Sales
-------- --------------- ------------------------
Personal
Communications
Segment $ 244 $ (55) $ 189 $ - $ 189 3 %
Global Telecom
Solutions Segment 538 1 539 - 539 14 %
Commercial, Govt,
and Industrial
Systems Segment 198 15 213 - 213 10 %
Broadband
Communications
Segment 215 21 236 - 236 16 %
Semiconductor
Products Segment 68 236 304 - 304 8 %
Integrated Electronic
Systems Segment 117 (25) 92 (1) 91 7 %
Other Products
Segment (207) 102 (105) - (105) -21 %
Adjustments &
Eliminations 1 (1) - - - 0 %
-------- --------------- ------------------------
Segment Totals 1,174 294 1,468 (1) 1,467 8 %
General Corporate (114) 100 (14) - (14)
-------- --------------- ------------------------
Earnings (Loss) Before
Income Taxes $ 1,060 $ 394 $ 1,454 $ (1) $ 1,453 8 %
======== =============== ========================
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