Q4 2007 Motorola, Inc. Earnings Conference Call Presentation
1. Motorola Q4 2007
Earnings Conference Call
January 23, 2008
Q4 2007 Earnings Release- January 23, 2008 Slide - 1
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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2. Dean Lindroth
Investor Relations Officer
Q4 2007 Earnings Release- January 23, 2008 Slide - 2
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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4. Greg Brown
Chief Executive Officer
Q4 2007 Earnings Release- January 23, 2008 Slide - 4
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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5. Q4 2007
Earnings Call
Q4 2007 Earnings Release- January 23, 2008 Slide - 5
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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6. Tom Meredith
Chief Financial Officer
Liquidity
Profitability Growth
Q4 2007 Earnings Release- January 23, 2008 Slide - 6
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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7. Q4 2007 Financial Results
Q4
($ in Millions) Q3 Q4
GAAP 2007 2007 2006
$ 9,646
Sales $ 8,811 $ 11,792
$ (19)
Operating Earnings (Loss) $ (10) $ 753
-0.2%
Operating Margin -0.1% 6.4%
$ 111
Earnings from Continuing Operations $ 40 $ 529
$ 0.05
EPS from Continuing Operations $ 0.02 $ 0.21
Excluding Highlighted Items
$ 381
Operating Earnings $ 169 $ 825 *
3.9%
Operating Margin 1.9% 7.0% *
$ 319
Earnings from Continuing Operations $ 147 $ 614 *
$ 0.14
EPS from Continuing Operations $ 0.06 $ 0.24 *
* Excludes previously highlighted item for stock compensation expense of $60M from Q4 2006
Slide -- 7
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
8. Cash Flow and Net Cash
Q4 Q3 Q4
($ in Millions) 2007 2007 2006
Earnings from Continuing Operations $ 111 $ 40 $ 529
Depreciation, Amortization, Deferred Income Taxes and Other, net 22 161 429
Change in Assets and Liabilities, net 337 141 (248)
Net Cash provided by Operating Activities $ 470 $ 342 $ 710
($ in Billions)
Cash* $ 8.6 $ 8.4 $ 15.6
Short-term & Current Debt** (0.3) (1.5) (1.7)
Long-Term Debt (4.0) (2.7) (2.7)
Total Debt (4.3) (4.2) (4.4)
Net Cash $ 4.3 $ 4.2 $ 11.2
*Cash and cash equivalents, Sigma funds, and Short-term investments
**Notes payable and current portion of long-term debt
Slide -- 8
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
9. Cash Conversion Cycle
75
65
Cash Conversion Days
55
45
35
25
15
Qtr1 '06 Qtr2 '06 Qtr3 '06 Qtr4 '06 Qtr1 '07 Qtr2 '07 Qtr3 '07 Qtr4 '07
Mobile Devices Home & Networks Mobility Enterprise Mobility Solutions Total Motorola
Cash Conversion Cycle
Qtr1 '06 Qtr2 '06 Qtr3 '06 Qtr4 '06 Qtr1 '07 Qtr2 '07 Qtr3 '07 Qtr4 '07
Mobile Devices 18 26 21 26 48 49 37 26
Home & Networks Mobility 71 67 73 62 71 50 52 38
Enterprise Mobility Solutions 52 57 60 65 65 53 47 40
Total Motorola 31 36 35 38 56 50 43 33
Slide -- 9
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
10. Return on Invested Capital
35%
31% 30%
30%
25%
21%
17%
20%
15% 13%
10%
5% 7%
5% 4%
0%
2003 2004 2005 2006 Q1 '07 Q2 '07 Q3 '07 2007
ROIC
Return on Invested Capital (ROIC)
= (12mth Rolling Operating Earnings excluding Highlighted Items and including Foreign Currency Gain/(Loss)) Tax Affected / 4 Quarter Average of
(Shareholder’s Equity + Total Debt - Excess Cash**)
*Tax rate used is the GAAP tax less taxes on highlighted items divided by the PBT excluding highlighted items for the rolling 12 month period.
**Excess Cash = Rolling 4 Quarter Average of Total Cash & Short-term Investments – 5% of Rolling Net Sales
Slide -- 10
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
11. Mobile Devices Financials
Q4
($ in Millions) Q3 Q4
GAAP 2007 2007 2006
$ 4,811
Sales $ 4,496 $ 7,806
$ (388)
Operating Earnings (Loss) $ (248) $ 341
-8.1%
Operating Margin -5.5% 4.4%
Excluding Highlighted Items
$ (82)
Operating Earnings (Loss) $ (138) $ 341
-1.7%
Operating Margin -3.1% 4.4%
40.9
Units (M) 37.2 65.7
12.4%
Market Share (Estimate) 13.0% 23.3%
Slide -- 11
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
12. Portfolio Segmentation
Q700
V8
iC602
W220 A1200
Lux. Edition
Lux.
NEW
W175 /
W180 NEW
Q9c
W270
NEW
NEW
NEW
U9
V9m Q9m
W375
NEW
Z6m
V9
Z8
W230
W377
NEW
NEW W510
Q9h
W156 /
W160
Q8
Z10
E8
NEW V3
NEW NEW
K1m
Z6
C139 C115
Productivity
Feature Multimedia
Mass Market
Slide -- 12
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
13. Home and Networks Mobility
Financials Q4
($ in Millions) Q3 Q4
GAAP 2007 2007 2006
$ 2,724
Sales $ 2,389 $ 2,444
$ 192
Operating Earnings $ 159 $ 223
7.0%
Operating Margin 6.7% 9.1%
Excluding Highlighted Items
$ 207
Operating Earnings $ 165 $ 234
7.6%
Operating Margin 6.9% 9.6%
Slide -- 13
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
14. Home and Networks Mobility Highlights
• Strong demand trends for Home
• Introduced DCX series of MPEG-4 HD set tops
• 47 active WiMAX trials; 15 WiMAX contracts to date
Slide -- 14
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
15. Enterprise Mobility Solutions Financials
Q4
($ in Millions) Q3 Q4
GAAP 2007* 2007* 2006
$ 2,138
Sales $ 1,954 $ 1,579
$ 451
Operating Earnings $ 328 $ 323
21.1%
Operating Margin 16.8% 20.5%
Excluding Highlighted Items
$ 466
Operating Earnings $ 336 $ 384
21.8%
Operating Margin 17.2% 24.3%
*Includes the results of operations for Symbol Technologies and Good Technology, which were both
acquired in January 2007
Slide -- 15
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
16. Enterprise Mobility Solutions Highlights
• Strong performance in Government & Public Safety and
Enterprise markets
• Closed joint venture with Vertex Standard
• Symbol integration complete
• Announced MC70 with GPS and RF management suite
Slide -- 16
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
17. Q&A Participants
Greg Brown Tom Meredith
Chief Executive Officer Chief Financial Officer
Dean Lindroth
Investor Relations Officer
Slide -- 17
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
19. Use of Non-GAAP Measures
In 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 not 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 these items and reconciliations of the non-GAAP measurements provided during this call to
GAAP measurements can be found on Motorola’s website at www.motorola.com/investor.
Slide -- 19
Q4 2007 Earnings Release- January 23, 2008
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.