q4 2007 motorola, inc. earnings conference call presentation

Q4 2007 Earnings Release- January 23, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .

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Motorola Q4 2007 Motorola Q4 2007 Earnings Conference CallEarnings Conference Call

January 23, 2008January 23, 2008


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Dean LindrothDean LindrothInvestor Relations OfficerInvestor Relations Officer

Q4 2007 Earnings Release- January 23, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.

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Safe HarborSafe HarborA 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 such expectations 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 in this morning’s press release, on pages 16 through 24 in item 1A of Motorola’s 2006 Annual Report on Form 10-K and in Motorola’s other SEC filings.

This presentation is being made on the 23rd of January 2008. 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. 2008


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Greg BrownGreg BrownChief Executive OfficerChief Executive Officer


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Q4 2007 Q4 2007 Earnings CallEarnings Call


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Tom MeredithTom MeredithChief Financial OfficerChief Financial Officer

Liquidity

Profitability Growth


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Q4 2007 Financial ResultsQ4 2007 Financial Results($ in Millions) Q4 Q3 Q4GAAP 2007 2007 2006

Sales 9,646$ 8,811$ 11,792$

Operating Earnings (Loss) (19)$ (10)$ 753$

Operating Margin -0.2% -0.1% 6.4%

Earnings from Continuing Operations 111$ 40$ 529$

EPS from Continuing Operations 0.05$ 0.02$ 0.21$

Excluding Highlighted Items

Operating Earnings 381$ 169$ 825$ *

Operating Margin 3.9% 1.9% 7.0% *

Earnings from Continuing Operations 319$ 147$ 614$ *

EPS from Continuing Operations 0.14$ 0.06$ 0.24$ *

* Excludes previously highlighted item for stock compensation expense of $60M from Q4 2006


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Cash Flow and Net CashCash Flow and Net CashQ4 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


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Cash Conversion CycleCash Conversion Cycle

Qtr1 '06 Qtr2 '06 Qtr3 '06 Qtr4 '06 Qtr1 '07 Qtr2 '07 Qtr3 '07 Qtr4 '07Mobile 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

Cash Conversion Cycle

15

25

35

45

55

65

75

Qtr1 '06 Qtr2 '06 Qtr3 '06 Qtr4 '06 Qtr1 '07 Qtr2 '07 Qtr3 '07 Qtr4 '07

Cas

h C

onve

rsio

n D

ays

Mobile Devices Home & Networks Mobility Enterprise Mobility Solutions Total Motorola


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Return on Invested CapitalReturn on Invested Capital

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

17%

4%7%

13%

21%

5%

30%31%

0%

5%

10%

15%

20%

25%

30%

35%

2003 2004 2005 2006 Q1 '07 Q2 '07 Q3 '07 2007

ROIC


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Mobile Devices FinancialsMobile Devices Financials($ in Millions) Q4 Q3 Q4GAAP 2007 2007 2006

Sales 4,811$ 4,496$ 7,806$






Units (M) 40.9 37.2 65.7

Market Share (Estimate) 12.4% 13.0% 23.3%


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Mass Market Feature Multimedia Productivity

Portfolio SegmentationPortfolio Segmentation

W175 / W175 / W180W180

NEWNEW

W377W377

W156 / W156 / W160W160

NEWNEW

U9U9

NEWNEW

V8 V8 LuxLux. Edition. Edition

NEWNEWNEWNEW

Q700Q700W220W220

W375W375

NEWNEW

C115C115

A1200A1200

K1mK1mV3V3

V9mV9m

V9V9

Z8Z8

iC602iC602

Z6Z6

Q9hQ9h

Q9mQ9m

Z6mZ6m

Q8Q8

C139C139

W230W230

W270W270

W510W510

NEWNEW

NEWNEW

Z10Z10E8E8

NEWNEW NEWNEW

Q9cQ9c

NEWNEW


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Home and Networks Mobility Home and Networks Mobility FinancialsFinancials

($ in Millions) Q4 Q3 Q4GAAP 2007 2007 2006

Sales 2,724$ 2,389$ 2,444$

Operating Earnings 192$ 159$ 223$

Operating Margin 7.0% 6.7% 9.1%





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Home and Networks Mobility HighlightsHome 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


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Enterprise Mobility Solutions FinancialsEnterprise Mobility Solutions Financials

($ in Millions) Q4 Q3 Q4GAAP 2007* 2007* 2006

Sales 2,138$ 1,954$ 1,579$






*Includes the results of operations for Symbol Technologies and Good Technology, which were both acquired in January 2007


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Enterprise Mobility Solutions HighlightsEnterprise 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


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Q&A ParticipantsQ&A Participants

Greg BrownChief Executive Officer

Tom MeredithChief Financial Officer

Dean LindrothInvestor Relations Officer


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Safe HarborSafe HarborA 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 such expectations 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 in this morning’s press release, on pages 16 through 24 in item 1A of Motorola’s 2006 Annual Report on Form 10-K and in Motorola’s other SEC filings.

This presentation is being made on the 23rd of January 2008. 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. 2008


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Use of NonUse of Non--GAAP MeasuresGAAP MeasuresIn 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.

q4 2007 motorola, inc. earnings conference call presentation

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