Q1 2006 Motorola Inc. Earnings Conference Call Presentation

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Q1 2006 Motorola Inc. Earnings Conference Call Presentation

  1. 1. Motorola Q1 2006 Earnings Release Conference Call April 18, 2006 Slide - 1 Q1 2006 Earnings Release- April 18, 2006 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
  2. 2. Ed Gams Corporate Vice President of Investor Relations Slide - 2 Q1 2006 Earnings Release- April 18, 2006 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
  3. 3. Safe Harbor Statement A 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 on pages 19 through 27 in item 1A of Motorola’s 2005 Annual Report on Form 10-K and in Motorola’s other SEC filings. This presentation is being made on the afternoon of April 18, 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 Q1 2006 Earnings Release- April 18, 2006 Slide -- 3 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  4. 4. Ed Zander Chief Executive Officer Slide - 4 Q1 2006 Earnings Release- April 18, 2006 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
  5. 5. Q1 2006 Earnings Release- April 18, 2006 Slide -- 5 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  6. 6. David Devonshire Chief Financial Officer Slide - 6 Q1 2006 Earnings Release- April 18, 2006 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
  7. 7. Motorola Inc. Financial Results Q1 2006 Q1 2005 Q1'06 vs. Q1'05 Sales $M $ 10,013 $ 8,161 Up 23% Operating Margin 8.9% 10.6% Down 1.7 pts Earnings Per Share $ 0.27 $ 0.28 Down 4% Excluding Significant Items Operating Margin 10.3% 10.6% Down 0.3 pts Earnings Per Share $ 0.28 $ 0.22 Up 27% Q1 2006 Earnings Release- April 18, 2006 Slide -- 7 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  8. 8. Significant Items Discussed in the Earnings Press Release Q1 2006 Reported EPS * $ 0.27 Includes: Gain on Investments Net of Derivative Loss 0.03 Reorganization of Business Charges (0.02) Stock Compensation Expense (0.02) $ (0.01) Q1 2005 Reported EPS * $ 0.28 Includes: Gains on Sales of Investments and Businesses 0.06 * See appendix for reconciliation Q1 2006 Earnings Release- April 18, 2006 Slide -- 8 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  9. 9. Motorola Sales Trend $ Billions 12 10.4 * Midpoint of Guidance 10.4 10.0 9.4 10 8.8 8.8 8.2 7.5 7.5 7.4 8 2004 6 2005 2006 4 2 0 Q1 Q2 Q3 Q4 Sales Increased ~23% Q1 2006 vs. 2005 Q1 2006 Earnings Release- April 18, 2006 Slide -- 9 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  10. 10. Revenue Per Employee $(000)’s $600 $560 $550 $534 $513 $500 $486 $472 $450 $400 $350 $300 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 4 Quarter Rolling Average Q1 2006 Earnings Release- April 18, 2006 Slide -- 10 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  11. 11. Cash Flow and Debt Cash Flow Cash & Debt Q1 Year End ($ in Billions) Q1 2006 ($ in Billions) 2006 2005 Operating Cash Flow $ 0.7 Cash/Equiv/Mkt Sec $ 14.7 $ 14.8 Short Term/ Current Debt $ (0.5) $ (0.5) Free Cash Flow $ 0.6 Long Term Debt $ (3.8) $ (3.8) Total Debt $ (4.3) $ (4.3) Net Cash/ (Net Debt) $ 10.4 $ 10.5 Debt to Total Capital Now At 20.4% vs. 20.3% at 12/31/05 * * Debt to Total Capital = Debt/ Debt + Stockholders Equity Q1 2006 Earnings Release- April 18, 2006 Slide -- 11 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  12. 12. Stock Repurchase Update • May 19, 2005 Authorized to Purchase $4B of Stock over 3 Years • In Q1: Purchased ~37M Shares, Average Price of $21.99, Cash Used ~$815M • Inception to Date: Purchased 78.7M Shares, Cash Used ~ $1.7B Q1 2006 Earnings Release- April 18, 2006 Slide -- 12 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  13. 13. Q2 2006 Guidance Sales $10.3B-$10.5B Earnings Per Share $.30-.32 (excluding Stock Compensation Expense, any Telsim recovery, impact of Auto business sale, and any further reorganization expenses) Tax Rate 36% 2.55 Billion Shares Outstanding Stock Compensation Expense $.02 Per Share Q1 2006 Earnings Release- April 18, 2006 Slide -- 13 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  14. 14. Comments on 2006 • Stock Compensation Expense Estimated Annual Impact of $275M - $300M • Estimated Tax Rate is 36% • Additional Collection of ~$400M Related to Telsim Expected in Q2 • Completion of Automotive Business Sale Expected in Q2 • Further Reorganization Expenses Expected Related to Global Supply Chain Consolidation and Operating Expense Reduction Initiatives Q1 2006 Earnings Release- April 18, 2006 Slide -- 14 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  15. 15. mobile devices business earnings results Q1 2006 Earnings Release- April 18, 2006 Slide -- 15 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  16. 16. Q1 earnings release - highlights a great start for 2006! Mobile Devices Business Results All-time Motorola record for units! All-time record for Mobile Devices Q1 sales! All-time record for Mobile Devices Q1 operating earnings! 6th consecutive quarter of Y/Y OE% improvement!* 6th consecutive quarter of Q/Q market-share growth! … and we increased global market share to 21% while sequentially expanding GM%! * Excluding Reorganization Charges Q1 2006 Earnings Release- April 18, 2006 Slide -- 16 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  17. 17. Q1 earnings release - highlights wickedly cool products RAZR continues as world’s best-selling clamshell … Motorola will sell 50 millionth RAZR in Q2! Ultra-slim SLVR is redefining the “candy bar” MOTOmusic is hot! … 6-million-unit milestone! 3G units are up nearly 400% vs. Q1 2005 iDEN is strong! … record Q1 units performance! GSMA award is opening doors and driving sales across price tiers in High-Growth Markets … and new launches: 2 GSM, 3 CDMA and 1 iDEN Q1 2006 Earnings Release- April 18, 2006 Slide -- 17 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  18. 18. mobile devices – Q1 Q1 2006 Q1’06 vs. Q1’05 Sales $M $6,400 Up 45% Operating Earnings $M $702 Up 60% year over Operating Margin 11.0% 1.0 ppt Units Q1 46.1M Up 61% year Market Share Est. – Q1 21% Up ~5 ppts Up ~2 ppts vs. Q4’05 Q1 2006 Earnings Release- April 18, 2006 Slide -- 18 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  19. 19. north america – Q1 #1 at top 3 wireless operators #1 in sell-through to consumers Source: Motorola, Inc. Shares are calculated on Q1 06 Unit Shipments, includes iDEN. Q1 2006 Earnings Release- April 18, 2006 Slide -- 19 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  20. 20. latin america – Q1 #1 at top 2 wireless operators #1 in sell-through to consumers Source: Motorola, Inc. Shares are calculated on Q1 06 Unit Shipments, includes iDEN. Q1 2006 Earnings Release- April 18, 2006 Slide -- 20 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  21. 21. europe – Q1 strong #2 and growing up 4 points vs. Q1 2005 Source: Motorola, Inc. Shares are calculated on Q1 06 Unit Shipments, includes iDEN. Q1 2006 Earnings Release- April 18, 2006 Slide -- 21 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  22. 22. north asia – Q1 strong #2 and growing up 8 points vs. Q1 2005 Source: Motorola, Inc. Shares are calculated on Q1 06 Unit Shipments, includes iDEN. Q1 2006 Earnings Release- April 18, 2006 Slide -- 22 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  23. 23. high-growth markets – Q1 strong #2 and growing up 12 points vs. Q1 2005 Source: Motorola, Inc. Shares are calculated on Q1 06 Unit Shipments, includes iDEN. Q1 2006 Earnings Release- April 18, 2006 Slide -- 23 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  24. 24. Q1: RAZR – the “gold standard” Spectrum of Technologies: GSM, GPRS, Edge, CDMA 1X, EV-DO, UMTS, Dual- Mode UMA Array of Colors: Silver, Black, Pink, Hot Pink, Lavendar Pink, Blue, Gold, & Gun-Metal Grey Cool Experiences: Style, Imaging, Music Q1 2006 Earnings Release- April 18, 2006 Slide -- 24 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  25. 25. Q1: SLVR – redefining candy ba SLVR L7 and L6 each outpaced RAZR’s first 180 days in market! Q1 2006 Earnings Release- April 18, 2006 Slide -- 25 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  26. 26. Q1: PEBL – the precious stone PEBL U6 units more than doubled vs. Q4! Q1 2006 Earnings Release- April 18, 2006 Slide -- 26 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  27. 27. Q1: MING – the smart phone We are China’s smart-phone leader. During Q1, MING joined the Motorola A780 – China’s best-selling smart phone. Q1 2006 Earnings Release- April 18, 2006 Slide -- 27 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  28. 28. Q1: Q – countdown to launch Final software and hardware are in pre-launch tests with a leading customer. Q1 2006 Earnings Release- April 18, 2006 Slide -- 28 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  29. 29. Q1: RDIO – design for the mass “connecting the unconnected” FM-equipped style – a new Motorola “must have” for the masses. Q1 2006 Earnings Release- April 18, 2006 Slide -- 29 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  30. 30. mobile devices business our commitment grow profitably with … wickedly compelling products … and rich experiences … with quality and efficiency Q1 2006 Earnings Release- April 18, 2006 Slide -- 30 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  31. 31. mobile devices business Q2 outlook market share – up vs. prior year & Q1 sales – up vs. prior year operating profits – up vs. prior year operating margin – up vs. prior year Q1 2006 Earnings Release- April 18, 2006 Slide -- 31 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  32. 32. Government & Enterprise Mobility Solutions – Q1 Sales $M $ 1,539 Up 2% Operating Earnings $M $ 171 Up 2% Operating Margin 11.1% Flat - Excluding Reorganization Charge Operating Earnings $M $ 179 Up 7% Operating Margin 11.6% Up 0.5 pts Q1 2006 Earnings Release- April 18, 2006 Slide -- 32 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  33. 33. Motorola Announces Agreement to Sell Automotive Electronics Business Definitive Agreement with Continental AG • Approximately $1 Billion in Cash • Includes: Controls, Sensor, Interior Electronics, Telematics • Subject to Customary Closing and Regulatory Conditions • Great Fit for Customers, Employees • Sharpens Motorola’s Strategic Focus on Seamless Mobility Q1 2006 Earnings Release- April 18, 2006 Slide -- 33 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  34. 34. Q1 - Government Market Activity United States • New York City • Pierce County, Washington • King County, Washington • San Diego • State of New Hampshire Latin America • Military Police/State of Sao Paulo, Brazil Europe • O2 Airwave – London Underground Asia • Completed Command & Control Communications System for Hong Kong Police Q1 2006 Earnings Release- April 18, 2006 Slide -- 34 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  35. 35. Q1 – Mesh and Enterprise Market Activity MOTOMESH 4.9 GHz Solution • Delaware County, PA • Thomasville, GA • Port Orange, FL • Ohio (multi-agency project) Q1: Enterprise Activity • Wireless Valley Acquisition Gaining Traction • Focus on Next-Generation Technologies • Fixed Mobile Convergence • Began Shipping Commercial-off-the-Shelf Mobile Computing Device (HC700-L) and Building out Mobile Computing Channel Q1 2006 Earnings Release- April 18, 2006 Slide -- 35 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  36. 36. Government & Enterprise Mobility Solutions Q2 Outlook Up Slightly vs. Prior Year Sales Up Slightly vs. Prior Year Operating Earnings Up Slightly vs. Prior Year Operating Margin Q1 2006 Earnings Release- April 18, 2006 Slide -- 36 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  37. 37. Networks – Q1 Sales $M $ 1,431 Down 14% Operating Earnings $M $ 132 Down 44% Operating Margin 9.2% Down 4.9 pts Excluding Reorganization Charge Operating Earnings $M $ 153 Down 35% Operating Margin 10.7% Down 3.4 pts Q1 2006 Earnings Release- April 18, 2006 Slide -- 37 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  38. 38. Q1 - Networks Market Activity • Earthlink/Google to use Canopy for San Francisco Metro Wi Fi • Canopy Network for the Indian State of Rajasthan • IP Core Network Solution for Vistream for MVNOs in Germany • Continued to Strengthen Leadership in the Push-to-Talk Over Cellular with Recent Contracts: -Vodafone (Spain) -Public Telecommunications Corp (Yemen) • 5-Year Access Network Deal with MTC Namibia Encompassing GSM, GPRS, EDGE and Canopy Q1 2006 Earnings Release- April 18, 2006 Slide -- 38 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  39. 39. Networks – New Initiatives/ Future Revenue • CDMA 1X EV-DO Rev A • MOTOwi4 WiMAX Solutions • Canopy • Softswitch: Push to Everything • FTTP • M-Wallet • Services: GAMA Architecture Q1 2006 Earnings Release- April 18, 2006 Slide -- 39 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  40. 40. Networks Q2 Outlook Flat vs. Prior Year, Up vs. Q1 Sales Down vs. Prior Year, Up vs. Q1 Operating Earnings Down vs. Prior Year, Up vs. Q1 Operating Margin Q1 2006 Earnings Release- April 18, 2006 Slide -- 40 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  41. 41. Motorola Combines GEMS & Networks Businesses Into One Segment The Networks & Enterprise Segment • Strengthen Our Position in End-to-End Network Infrastructure Solutions to Private, Public and Enterprise Customers • Leverage Key Current and Next-Generation Technologies • Improve Cost Structure • Seamless Inside Q1 2006 Earnings Release- April 18, 2006 Slide -- 41 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  42. 42. Connected Home – Q1 Q1 2006 Q1'06 vs. Q1'05 Sales $M $ 710 Up 7% Operating Earnings $M $ 15 Down 21% Operating Margin 2.1% Down 0.8 pts Excluding Reorganization Charge Operating Earnings $M $ 58 Up 205% Operating Margin 8.2% Up 5.3 pts Q1 2006 Earnings Release- April 18, 2006 Slide -- 42 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  43. 43. Connected Home – Q1 Highlights ▪ ShippedOver 2 Million Digital Entertainment Devices, 38% Increase over Q105, Record for a Single Quarter ▪ Completed Acquisition of Kreatel Communications, Leading Developer of IPTV Based Set-Tops ▪ Shipped Quarterly Record of ~ 630K Voice Modems; Total Modem Shipments Were 2.6 Million ▪ Introduced a Residential Seamless Mobility Gateway Allowing Consumers to Use the Same Mobile Device and Phone Number Inside and Outside of the Home ▪ Starhub (Singapore) to Upgrade Hybrid Fiber Coaxial Cable Network to DOCSIS® 3.0-Compatible Leveraging Motorola’s Channel Bonding Technology Q1 2006 Earnings Release- April 18, 2006 Slide -- 43 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  44. 44. Connected Home – Q1 Highlights The Connected Home Belongs to Motorola Delivering Seamless Video and Voice Solutions Today! Operators are Becoming Engaged The Motorola Experience – MOTO ME Q1 2006 Earnings Release- April 18, 2006 Slide -- 44 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  45. 45. Connected Home – Q2 Outlook Up vs. Prior Year Sales Up vs. Prior Year Operating Earnings Up vs. Prior Year Operating Margin Q1 2006 Earnings Release- April 18, 2006 Slide -- 45 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  46. 46. Q1 2006 Summary √ Market Share √ Revenue √ Profit √ Cash Flow √ Balance Sheet √ Cost Structure √ Innovation √ Outlook Q1 2006 Earnings Release- April 18, 2006 Slide -- 46 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  47. 47. Motorola Q&A Participants David Devonshire Ed Zander Chief Financial Officer Chief Executive Officer Greg Brown Ron Garriques President, Networks and Enterprise President, Mobile Devices Business Business Dan Moloney Ed Gams Vice President, Investor Relations President, Connected Home Business Q1 2006 Earnings Release- April 18, 2006 Slide -- 47 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  48. 48. Use of Non-GAAP Measurements 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 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 April 18, 2006 (which is attached to 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. Q1 2006 Earnings Release- April 18, 2006 Slide -- 48 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  49. 49. Significant Items Discussed Q1 2006 Q1 2006 PBT Q1 2006 Tax Q1 2006 PAT (Inc)/Exp Inc/(Exp) (Inc)/Exp EPS impact Gains on sales of investments, net of derivative loss (118) (45) (73) 0.03 Reorganization of business charges 71 15 56 (0.02) Stock compensation expense 70 23 47 (0.02) TOTAL IMPACT $ 23 $ (7) $ 30 (0.01) Q1 2005 Q1 2005 PBT Q1 2005 Tax Q1 2005 PAT (Inc)/Exp Inc/(Exp) (Inc)/Exp EPS impact Gains on sales of investments (234) (89) (145) 0.06 TOTAL IMPACT $ (234) $ (89) $ (145) $ 0.06 Q1 2006 Earnings Release- April 18, 2006 Slide -- 49 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  50. 50. OE Reconciliation of Significant Items Q1 2006 Net Sales $ 10,013 Operating earnings $ 894 Operating earnings as a percentage of net sales 8.9% Operating earnings $ 894 Less: Significant items discussed 141 Operating earnings excluding significant items discussed $ 1,035 Operating earnings as a percentage of net sales 10.3% Q1 2005 Net Sales $ 8,161 Operating earnings $ 865 Operating earnings as a percentage of net sales 10.6% Operating earnings $ 865 Less: Significant items discussed 0 Operating earnings excluding significant items discussed $ 865 Operating earnings as a percentage of net sales 10.6% Q1 2006 Earnings Release- April 18, 2006 Slide -- 50 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  51. 51. OE Reconciliation By Segment of Significant Items From Continuing Operations Q1 2006 TOTAL Mobile Devices GEMS Networks Conn.Home Other/Elims Net Sales $ 10,013 $ 6,400 $ 1,539 $ 1,431 $ 710 $ (67) Operating earnings 894 702 171 132 15 (126) Operating earnings as a percentage of net sales 8.9% 11.0% 11.1% 9.2% 2.1% 188.1% Operating earnings 894 702 171 132 15 (126) Less: Significant items discussed 141 (1) 8 21 43 70 Operating earnings excluding significant items discussed $ 1,035 $ 701 $ 179 $ 153 $ 58 $ (56) Operating earnings as a percentage of net sales 10.3% 11.0% 11.6% 10.7% 8.2% 83.6% Q1 2005 TOTAL Mobile Devices GEMS Networks Conn.Home Other/Elims Net Sales $ 8,161 $ 4,414 $ 1,503 $ 1,657 $ 662 $ (75) Operating earnings 865 440 167 234 19 5 Operating earnings as a percentage of net sales 10.6% 10.0% 11.1% 14.1% 2.9% -6.7% Operating earnings 865 440 167 234 19 5 Less: Significant items discussed 0 0 0 0 0 0 Operating earnings excluding significant items discussed $ 865 $ 440 $ 167 $ 234 $ 19 $ 5 Operating earnings as a percentage of net sales 10.6% 10.0% 11.1% 14.1% 2.9% -6.7% Q1 2006 Earnings Release- April 18, 2006 Slide -- 51 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  52. 52. Reconciliation of Revenue Per Headcount 2004 2005 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Headcount 67,641 68,971 67,952 68,568 68,777 68,971 69,142 Rolling 12 Months of Sales 31,323 36,843 32,043 33,326 35,252 36,843 38,698 *Revenue / HC (In 000's) 463 534 472 486 513 534 560 * Revenue Per Head = Rolling 12 Months of Sales / Qtr Ending Headcount Q1 2006 Earnings Release- April 18, 2006 Slide -- 52 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
  53. 53. Safe Harbor Statement A 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 on pages 19 through 27 in item 1A of Motorola’s 2005 Annual Report on Form 10-K and in Motorola’s other SEC filings. This presentation is being made on the afternoon of April 18, 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 Q1 2006 Earnings Release- April 18, 2006 Slide -- 53 MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.

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