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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] | Preliminary Proxy Statement | [_] | CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) |
[X] | Definitive Proxy Statement |
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[_] | Definitive Additional Materials |
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[_] | Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 |
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] | No fee required. |
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[_] | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
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(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) |
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid: |
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[_] | Fee paid previously with preliminary materials. |
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[_] |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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(1) Amount Previously Paid: |
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(2) Form, Schedule or Registration Statement No.: |
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(3) Filing Party: |
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(4) Date Filed: |
Notes:
[MOTOROLA LOGO] | PROXY STATEMENT | |
MANAGEMENT S DISCUSSION | ||
AND ANALYSIS | ||
1999 CONSOLIDATED | ||
FINANCIAL STATEMENTS | ||
AND NOTES |
PRINCIPAL EXECUTIVE
OFFICES:
1303 East Algonquin
Road
Schaumburg,
Illinois 60196
March 23,
2000
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PLACE OF
MEETING:
Hyatt Regency
Woodfield
1800 E. Golf
Road
Schaumburg,
Illinois 60173
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1.
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elect directors for
the next year;
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2.
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approve a proposal
to amend Motorolas Restated Certificate of Incorporation, as
amended, to increase the number of authorized shares of Motorolas
common stock from 1.4 billion shares to 4.2 billion shares;
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3.
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consider and vote
upon the Motorola Omnibus Incentive Plan of 2000; and
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4.
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act upon such other
matters as may properly come before the meeting.
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use the toll-free
telephone number shown on your proxy card;
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visit the website
shown on your proxy card to vote via the Internet; or
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mark, sign, date
and return the enclosed proxy card in the enclosed postage-paid
envelope.
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PLEASE NOTE THAT
ATTENDANCE AT THE MEETING WILL BE LIMITED TO STOCKHOLDERS OF MOTOROLA AS
OF THE RECORD DATE (OR THEIR AUTHORIZED REPRESENTATIVES) HOLDING ADMISSION
TICKETS OR OTHER EVIDENCE OF OWNERSHIP. THE ADMISSION TICKET IS DETACHABLE
FROM YOUR PROXY CARD. IF YOUR SHARES ARE HELD BY A BANK OR BROKER, PLEASE
BRING TO THE MEETING YOUR BANK OR BROKER STATEMENT EVIDENCING YOUR
BENEFICIAL OWNERSHIP OF MOTOROLA STOCK TO GAIN ADMISSION TO THE
MEETING.
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By order of the
Board of Directors,
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[Signature of A.
Peter Lawson]
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A. Peter
Lawson
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Secretary
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[MOTOROLA LOGO]
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1303 E. Algonquin
Road
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Schaumburg, IL
60196
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Chairman of the Board and
Chief Executive Officer
[SIGNATURE OF CHRISTOPHER B. GALVIN]
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·
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Voting by
Telephone. You can vote your shares by telephone by calling the toll-free
telephone number on your proxy card. Telephone voting is available 24
hours a day. If you vote by telephone you should not return your proxy
card.
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·
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Voting by Internet.
You can also vote via the Internet. The website for Internet voting is on
your proxy card, and voting also is available 24 hours a day. If you vote
via the Internet you should not return your proxy card.
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·
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Voting by Mail. If
you choose to vote by mail, mark your proxy, date and sign it, and return
it in the postage-paid envelope provided.
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·
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Sending written
notice of revocation to the Secretary.
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·
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Submitting another
timely proxy by telephone, Internet or paper ballot.
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·
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Attending the
Annual Meeting and voting in person. If your shares are held in the name
of a bank, broker or other holder of record, you must obtain a proxy,
executed in your favor, from the holder of record to be able to vote at
the meeting.
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[photo of
CHRISTOPHER B. GALVIN]
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CHRISTOPHER B.
GALVIN, Principal Occupation: Chairman of the Board and Chief Executive
Officer, Motorola, Inc.
Director since
1988 Age49
Mr. Galvin began
working for the Company in 1967 and he served in sales, sales management,
marketing, product management, service management and general management
positions in the Companys various businesses. He served as president
and chief operating officer from 1993 until he became Chief Executive
Officer on January 1, 1997. In February 1999, Mr. Galvin was elected
Chairman of the Board. Mr. Galvin received a bachelors degree from
Northwestern University and a masters degree from the Kellogg
Graduate School of Management at Northwestern University. Mr. Galvin is
the son of Robert W. Galvin.
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[photo of RONNIE C.
CHAN]
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RONNIE C. CHAN,
Principal Occupation: Chairman, Hang Lung Development
Group
Director since
1997 Age50
Mr. Chan has been
the Chairman of Hong Kong-based Hang Lung Development Group since 1991.
Hang Lung Development Group is involved in property development, property
investment and hotels. In 1986, Mr. Chan co-founded the private
Morningside/Springfield Groups. The Morningside Group directs investments
in private companies. The Springfield Group engages in financial trading,
fund management and investment consulting. He is a member of the Board of
Directors of Enron Corporation and Standard Chartered PLC. Mr. Chan
obtained his first two degrees in biology from California State University
and an MBA from the University of Southern California. Mr. Chan is a U.S.
citizen residing in Hong Kong.
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[photo of H.
LAURANCE FULLER]
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H. LAURANCE
FULLER, Principal Occupation: Co-Chairman of the Board, BP Amoco,
p.l.c.
Director since
1994 Age61
Mr. Fuller will be
retiring as Co-Chairman and a director of BP Amoco, p.l.c., an energy
company, on March 31, 2000. He is a director of The Chase Manhattan
Corporation, The Chase Manhattan Bank, N.A., Abbott Laboratories, Security
Capital Group and Catalyst. Mr. Fuller graduated from Cornell University
with a B.S. degree in chemical engineering and earned a J.D. degree from
DePaul University Law School.
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[photo of ROBERT W.
GALVIN]
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ROBERT W.
GALVIN, Principal Occupation: Chairman of the Executive Committee,
Motorola, Inc.
Director since
1945 Age77
Mr. Galvin started
his career at the Company in 1940. He held the senior officership position
in the Company from 1959 until 1990, when he became Chairman of the
Executive Committee. He continues to serve as a full time officer of the
Company. He attended the University of Notre Dame and the University of
Chicago, and is currently a member of the Board of Trustees of Illinois
Institute of Technology. Mr. Galvin has been awarded a number of honorary
degrees as well as industrial, professional and national
awards.
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[photo of Robert L.
GROWNEY]
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ROBERT L.
GROWNEY, Principal Occupation: President and Chief Operating Officer,
Motorola, Inc.
Director since
1997 Age57
Mr. Growney began
his career with Motorola in 1966, holding various positions in the Company
s wireless communications businesses including president and general
manager of the Messaging, Information and Media Sector from 1994 until he
was elected President and Chief Operating Officer on January 1, 1997. Mr.
Growney received both his bachelors degree in mechanical engineering
and his masters degree in business administration from Illinois
Institute of Technology and is currently a member of the Board of Trustees
of Illinois Institute of Technology.
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[photo of ANNE P.
JONES]
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ANNE P. JONES,
Principal Occupation: Consultant
Director since
1984 Age64
Ms. Jones is
currently working as a consultant. She was a partner in the Washington,
D.C. office of the Sutherland, Asbill & Brennan law firm from 1983
until 1994. Before that, she was a Commissioner of the Federal
Communications Commission. Ms. Jones is a director of the American Express
Mutual Fund Group. She holds B.S. and L.L.B. degrees from Boston College
and its Law School, respectively.
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[photo of JUDY C.
LEWENT]
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JUDY C. LEWENT,
Principal Occupation: Senior Vice President and Chief Financial Officer,
Merck & Co., Inc.
Director since
1995 Age50
Ms. Lewent has been
Senior Vice President and Chief Financial Officer, Merck & Co., Inc.,
a pharmaceuticals company, since 1992. She is also a director of Johnson
& Johnson Merck Consumer Pharmaceuticals Company, The Quaker Oats
Company, Merial Limited, and the National Bureau of Economic Research. Ms.
Lewent is also a trustee of the Rockefeller Family Trust, a trustee board
member of the University of Pennsylvania Health System, and a
Massachusetts Institute of Technology Corporation member. Ms. Lewent
received a B.S. degree from Goucher College and a M.S. degree from the MIT
Sloan School of Management.
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[photo of DR.
WALTER E. MASSEY]
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DR. WALTER E.
MASSEY, Principal Occupation: President of Morehouse
College
Director since
1993 Age61
Dr. Massey is
President of Morehouse College. He has been director of the Argonne
National Laboratory and vice president for research at the University of
Chicago. In 1991 he was appointed by President Bush as the Director of the
National Science Foundation after which he was Provost and Senior Vice
President for the University of California System. Dr. Massey received a
Ph.D. degree in Physics and a Master of Arts degree from Washington
University. He also holds a Bachelor of Science degree in Physics and
Mathematics from Morehouse College. He is a director of BP Amoco p.l.c.,
BankAmerica Corporation and McDonalds, Inc. Dr. Massey previously served
as a director of the Company from May 1984 until May 1991 when he accepted
his appointment to the National Science Foundation.
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[photo of NICHOLAS
NEGROPONTE]
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NICHOLAS
NEGROPONTE, Principal Occupation: Director of the Massachusetts Institute
of Technology Media Laboratory
Director since
1996 Age56
Mr. Negroponte is a
co-founder and director of the Massachusetts Institute of Technology Media
Laboratory, an interdisciplinary, multi-million dollar research center
focusing on the study and experimentation of future forms of human and
machine communication. He founded MITs pioneering Architecture
Machine Group, a combination lab and think tank responsible for many
radically new approaches to the human-computer interface. He joined the
MIT faculty in 1966 and became a full professor in 1980. Mr. Negroponte
received a B.A. and M.A. in Architecture from Massachusetts Institute of
Technology.
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[photo of JOHN E.
PEPPER, JR.]
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JOHN E. PEPPER,
JR., Principal Occupation: Chairman of the Executive Committee of the
Board of Directors, Procter & Gamble Co.
Director since
1994 Age61
Mr. Pepper is
Chairman of the Executive Committee of the Board of Directors of Procter
& Gamble Co., a consumer products company, and its former chairman of
the board and chief executive officer. Mr. Pepper is also a director of
the Xerox Corporation and Boston Scientific Corporation. Mr. Pepper
graduated from Yale University in 1960.
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[photo of SAMUEL C.
SCOTT III]
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SAMUEL C. SCOTT
III, Principal Occupation: President and Chief Operating Officer, Corn
Products International
Director since
1993 Age55
Mr. Scott is
President and Chief Operating Officer of Corn Products International, a
corn refining business. Mr. Scott serves on the Board of Directors of Corn
Products International, Reynolds Metals Company, the Corn Refiners
Association Inroads Chicago and Russell Reynolds Associates. Mr. Scott
graduated from Fairleigh Dickinson University, with a bachelors
degree in engineering in 1966 and an MBA in 1973.
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[photo of GARY L.
TOOKER]
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GARY L. TOOKER,
Principal Occupation: Retired; formerly Chairman of the Board, Motorola,
Inc.
Director since
1986 Age60
Mr. Tooker started
with the Company in 1962, holding ascending marketing and operations
assignments within the semiconductor business and the Company, including
chief executive officer from 1993 through 1996 and chairman of the board
from January 1997 through May 1999. He retired as an officer of the
Company on December 31, 1999. He is a member of the Board of Directors of
Eaton Corporation, Atlantic Richfield Company (ARCO) and Catalyst and the
Morehouse College Board of Trustees. He is a graduate of Arizona State
University where he received a bachelors degree in Electrical
Engineering and did post-graduate studies in Business
Administration.
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[photo of B.
KENNETH WEST]
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B. KENNETH WEST,
Principal Occupation: Senior Consultant for Corporate Governance to
Teachers Insurance and Annuity Association-College Retirement Equities
Fund
Director since
1976 Age66
Mr. West is serving
as Senior Consultant for Corporate Governance to TIAA-CREF, a major
pension fund company. He retired as chairman of Harris Bankcorp, Inc. in
1995 where he had been employed since 1957. He is also a director of The
Pepper Companies, Inc. Mr. West graduated from the University of Illinois
and received an MBA degree from the University of Chicago.
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[photo of DR. JOHN
A. WHITE]
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DR. JOHN A.
WHITE, Principal Occupation: Chancellor, University of
Arkansas
Director since
1995 Age60
Dr. White is
currently Chancellor of the University of Arkansas. Dr. White served as
Dean of Engineering at Georgia Institute of Technology from 1991 to early
1997, having been a member of the faculty since 1975. He is a director of
Eastman Chemical Company, J.B. Hunt Transport Services, Inc., Logility,
Inc., and Russell Corporation. Dr. White received a B.S.I.E. from the
University of Arkansas, a M.S.I.E. from Virginia Polytechnic Institute and
State University and a Ph.D. from The Ohio State University.
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Members: Directors
A. Jones (Chair), Chan, Fuller, D. Jones and White
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Number of Meetings
in 1999: Four
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Functions:
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·
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Oversees internal
controls, audits and compliance programs
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·
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Recommends
independent auditors and oversees the scope of their
activities
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Oversees health,
safety and environmental audit functions and business ethics
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Oversees internal
legal practice and policy
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Members: Directors
Scott (Chair), Fuller and Pepper
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Number of Meetings
in 1999: Seven
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Functions:
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·
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Establishes elected
officers compensation
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·
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Administers or
monitors compensation and benefit plans
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Members: Directors
R. Galvin (Chair), C. Galvin, Growney, Scott, Tooker and West
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Number of Meetings
in 1999: None
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Functions:
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·
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Reviews strategic
planning process, allocation of resources and other specific matters
assigned by the Board
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Members: Directors
D. Jones (Chair), Chan, Growney, Lewent and West
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Number of Meetings
in 1999: Seven
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Functions:
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·
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Reviews current and
long-range financial strategy and planning, including dividends and
borrowings
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Members: Directors
West (Chair), C. Galvin, Scott and Tooker
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Number of Meetings
in 1999: Three
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Functions:
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·
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Reviews the process
and results of the Companys organization and management development
program
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Members: Directors
Pepper (Chair), A. Jones, Massey and Negroponte
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Number of Meetings
in 1999: Four
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Functions:
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·
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Recommends
candidates for membership on the Board based on committee-established
guidelines
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·
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Consults with the
Chairman of the Board on committee assignments
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Considers
candidates for the Board recommended by stockholders
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·
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Considers matters
of corporate governance
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This Committee will
consider a candidate for director proposed by a stockholder. A candidate
must be highly qualified and be both willing and expressly interested in
serving on the Board. A stockholder wishing to propose a candidate for the
Committees consideration should forward the candidates name
and information about the candidates qualifications to the Company
s Secretary as described on page 23.
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Members: Directors
Massey (Chair), Growney, Lewent, Negroponte and White
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Number of Meetings
in 1999: Three
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Functions:
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·
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Identifies and
assesses significant technological issues and needs affecting the
Company
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·
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Representing
Motorola at meetings with U. S. and foreign governments and with councils
and committees associated with U.S. and foreign governments
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Representing
Motorola at various international meetings and trade shows
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Representing
Motorola at meetings of charitable and educational organizations and
institutions
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Continued
involvement with Motorola University activities, both in teaching and in
fostering external relationships
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Other topics as may
from time-to-time be decided upon by consultant and the CEO.
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Name | Shares
Owned(1) |
Shares Under
Exercisable Options(2) |
Total Shares
Beneficially Owned(3)(4) |
||||||
---|---|---|---|---|---|---|---|---|---|
Christopher B. Galvin | 3,287,573 | 553,334 | 3,841,313 | (5) | |||||
Gary L. Tooker | 167,799 | 606,920 | (6) | 776,280 | (6) | ||||
Robert L. Growney | 129,972 | 295,667 | 426,272 | (7) | |||||
Merle L. Gilmore | 106,533 | 274,667 | 381,919 | (8) | |||||
Carl F. Koenemann | 31,308 | 163,644 | 198,226 | (9) | |||||
Ronnie C. Chan | 5,476 | | 5,476 | (10) | |||||
H. Laurance Fuller | 9,878 | 6,000 | 15,878 | (11) | |||||
Robert W. Galvin | 15,129,932 | | 15,164,176 | (12) | |||||
Anne P. Jones | 3,085 | 6,000 | 9,843 | (13) | |||||
Donald R. Jones | 51,906 | 6,000 | 109,108 | (14) | |||||
Judy C. Lewent | 4,641 | 6,000 | 10,641 | (15) | |||||
Walter E. Massey | 3,957 | 3,500 | 7,457 | (16) | |||||
Nicholas Negroponte | 7,628 | 6,000 | 13,628 | ||||||
John E. Pepper, Jr. | 8,200 | 6,000 | 18,550 | (17) | |||||
Samuel C. Scott III | 8,196 | 6,000 | 14,196 | (18) | |||||
B. Kenneth West | 9,132 | 6,000 | 15,132 | (19) | |||||
John A. White | 6,707 | | 6,707 | (20) | |||||
All current
directors, nominees and current
executive officers as a group (30 persons) |
17,362,380 | 4,086,448 | 21,599,524 | (21) | |||||
(1)
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Includes shares
over which the person currently holds or shares voting and/or investment
power but excludes interests, if any, in shares held in the Companys
Profit Sharing Trust and the shares listed under Shares Under
Exercisable Options.
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(2)
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Includes shares
under options exercisable on February 29, 2000 and options which become
exercisable within 60 days thereafter.
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(3)
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Unless otherwise
indicated, each person has sole voting and investment power over the
shares reported.
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(4)
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Includes interests,
if any, in shares held in the Companys Profit Sharing Trust, which
is subject to some investment restrictions, and the shares listed under
Shares Under Exercisable Options. Each director, other than Mr. R.
Galvin, owns less than 1% of the Common Stock. Mr. R. Galvin beneficially
owns 2.1% of the Common Stock. All current directors, nominees and current
executive officers as a group own 3.0%.
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(5)
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Mr. C. Galvin has
or shares investment and voting power with respect to these shares as
follows: sole voting and investment power, 889,151 shares; shared voting
and investment power, 1,611,860 shares; sole voting power only, 403,669
shares; and shared voting power only, 382,893 shares. Included in Mr. C.
Galvins shares are 1,986,593 shares, which are shown in this table
to be owned by Mr. R. Galvin. Mr. C. Galvin disclaims beneficial ownership
of all shares not held directly by him.
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(6)
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Mr. Tooker has
shared voting and investment power over 167,799 of these shares. Mr.
Tooker disclaims beneficial ownership of 51,285 shares held in certain
trusts and of 9,108 shares under exercisable options which are indirectly
held by he and family members.
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(7)
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Mr. Growney does
not have investment power over 90,000 of these shares.
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(8)
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Mr. Gilmore has
shared voting and investment power over 23,778 of these shares, and does
not have investment power over 80,000 of these shares.
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(9)
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Mr. Koenemann has
shared voting and investment power over 30,864 of these
shares.
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(10)
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Mr. Chan does not
have investment power over 1,225 of these shares.
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(11)
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Mr. Fuller does not
have investment power over 312 of these shares.
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(12)
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Mr. R. Galvin has
or shares investment and voting power with respect to these shares as
follows: sole voting and investment power, 9,762,446 shares; sole
investment power only, 4,067,455 shares; and shared voting and investment
power, 1,300,031 shares. Included in Mr. R. Galvins shares are
1,986,593 shares, which are shown in this table to be owned by Mr. C.
Galvin. Mr. R. Galvin disclaims beneficial ownership of all shares not
directly held by him and of 31,222 shares owned by his wife, which are
included for him under Total Shares Beneficially Owned.
Christopher B. Galvin presently serves as co-trustee with his father,
Robert W. Galvin, and his mother, Mary B. Galvin, under certain trusts
established for their benefit, estate planning and charity and holds an
executed general power of attorney from them to manage their assets,
including the voting or selling of Motorola shares, if that becomes
necessary.
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(13)
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Ms. Jones does not
have investment power over 696 of these shares, and disclaims beneficial
ownership of 758 shares held by her husband, which are included for her
under Total Shares Beneficially Owned.
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(14)
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Mr. Jones disclaims
beneficial ownership of 51,202 shares held by his wife, which are included
for him under Total Shares Beneficially Owned.
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(15)
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Ms. Lewent does not
have investment power over 88 of these shares.
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(16)
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Mr. Massey has
shared voting and investment power over 768 of these shares, and does not
have investment power over 654 of these shares.
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(17)
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Mr. Pepper does not
have investment power over 1,571 of these shares, and disclaims beneficial
ownership of 4,350 shares held by his family members, which are included
for him under Total Shares Beneficially Owned.
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(18)
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Mr. Scott does not
have investment power over 1,202 of these shares.
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(19)
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Mr. West does not
have investment power over 4,632 of these shares.
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(20)
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Mr. White does not
have investment power over 180 of these shares.
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(21)
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All directors,
nominees and current executive officers as a group have shared voting and
investment power over 1,873,964 of these shares, and do not have
investment power over 385,560 of these shares.
|
Name and Address | Number of shares
and Nature of
Beneficial Ownership |
Percent of Class | |||
---|---|---|---|---|---|
FMR Corp.
82 Devonshire Street Boston, MA 02109 |
49,983,620 shares of Common Stock (1) | 8.206% | |||
(1)
|
As of December 31,
1999, FMR Corp. had sole voting power over 3,912,440 shares of Common
Stock and sole dispositive power over 49,983,620 shares of Common
Stock.
|
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Annual
Compensation |
Long Term
Compensation |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name and
Principal
Position |
Year | Salary
($) (1) |
Bonus
($)(2) |
Other Annual
Compen- sation ($)(3)(4) |
Restricted
Stock Awards ($)(6) |
Securities
Underlying Options (#)(7)(8) |
LTIP
Payouts ($)(9) |
All Other
Compen- Sation ($)(10)(11) |
||||||||||
Christopher B. Galvin | 1999 | 1,275,000 | 1,900,000 | 7,973 | 13,153,000 | 300,000 | 0 | 6,419 | ||||||||||
Chairman of the Board and | 1998 | 1,200,000 | 600,000 | 13,476 | 0 | 250,000 | 0 | 8,179 | ||||||||||
Chief Executive Officer | 1997 | 990,000 | 955,000 | 5,615 | 0 | 80,000 | 505,260 | 7,661 | ||||||||||
Gary L. Tooker | 1999 | 1,080,000 | 500,000 | 13,048 | 0 | 0 | 0 | 10,062 | ||||||||||
Vice Chairman of the Board | 1998 | 1,080,000 | 250,000 | 25,884 | 0 | 100,000 | 0 | 15,999 | ||||||||||
1997 | 1,080,000 | 760,000 | 14,901 | 0 | 80,000 | 692,928 | 15,732 | |||||||||||
Robert L. Growney | 1999 | 975,000 | 1,200,000 | 7,066 | 11,837,700 | 275,000 | 0 | 8,971 | ||||||||||
President and Chief | 1998 | 920,000 | 450,000 | 5,289 | 0 | 215,000 | 0 | 6,056 | ||||||||||
Operating Officer | 1997 | 720,000 | 695,000 | 4,428,617 | (5) | 0 | 60,000 | 256,640 | 7,225 | |||||||||
Merle L. Gilmore | 1999 | 750,000 | 900,000 | 2,288 | 10,522,400 | 250,000 | 0 | 5,422 | ||||||||||
Executive Vice President | 1998 | 646,558 | 400,000 | 4,074 | 0 | 200,000 | 0 | 5,058 | ||||||||||
1997 | 565,000 | 495,000 | 2,064 | 0 | 40,000 | 232,580 | 6,252 | |||||||||||
Carl F. Koenemann | 1999 | 570,000 | 500,000 | 2,555 | 0 | 110,000 | 0 | 6,918 | ||||||||||
Executive Vice President | 1998 | 550,000 | 180,000 | 4,531 | 0 | 100,000 | 0 | 7,500 | ||||||||||
and Chief Financial Officer | 1997 | 485,000 | 325,000 | 3,916 | 0 | 40,000 | 195,488 | 7,500 | ||||||||||
(1)
|
Including amounts
deferred pursuant to salary reduction arrangements under the Profit
Sharing Plan.
|
(2)
|
These amounts were
earned in each of these years under the Motorola Executive Incentive Plan (
MEIP) for performance during that year.
|
(3)
|
These amounts are
the Companys reimbursements for the income tax liability resulting
from the income imputed to that executive officer as a result of coverage
by a group life insurance policy for elected officers and the use of
Company aircraft.
|
(4)
|
The aggregate
amount of perquisites and other personal benefits, securities or property,
given to each named executive officer valued on the basis of aggregate
incremental cost to the Company, was less than either $50,000 or 10% of
the total of annual salary and bonus for that executive officer during
each of these years.
|
(5)
|
Elected officers
participate in a supplementary retirement plan and generally become vested
in the plan at age 55. A discussion of the Companys pension and
retirement plans is on page 18. At the time of vesting the Company makes a
contribution to the trust for that plan. The purpose of that contribution
is to enable the trust to make payments of the benefits under the plan due
to the participant after retirement. Federal and state tax laws require
that the participant include in income the amount of any contribution in
the year it was made even though the participant receives no cash in
connection with such contribution or any payments from the retirement
plan. Because the participant receives no cash yet incurs a significant
income tax liability, the Company believes that it is appropriate to
reimburse the participant so that he or she is not paying additional taxes
as a result of a contribution. This is the Companys policy with
respect to elected officers all of whom participate in the plan, including
those named in the Summary Compensation Table. In 1997, Mr. Growney was
reimbursed for such a tax liability of $4,423,360.
|
(6)
|
This column shows
the market value of restricted stock awards on the date of grant. The
closing price of the Common Stock on January 31, 2000, the date on which
the shares of restricted stock were granted, was $131.53. The shares of
restricted stock were granted to these executives in recognition of their
successful efforts to significantly improve the Companys performance
during 1999 and to provide them with strong incentive to continue to
increase the value of the Company during their employment as follows:
100,000 shares to Mr. Galvin; 90,000 shares to Mr. Growney; and 80,000
shares to Mr. Gilmore. The restrictions on 50% of the restricted stock
lapse upon the executive officers retirement. The restrictions on
the remaining 50% of the shares lapse on a scheduled basis over the
executive officers career as long as he is employed by the Company
or a subsidiary. These restrictions lapse on 25% of the shares in 4 years
and on 25% of the shares in 6 years after the date of grant. In certain
circumstances, those restrictions could all lapse at retirement. In
addition, for the shares held by these three executives, if total
shareholder return from the date of grant is 125% or greater before the
restrictions on the time-vesting 50% of their shares lapse, the
restrictions on these shares would automatically lapse. Upon death or
total and permanent disability, all restrictions lapse. Regular quarterly
dividends or dividend equivalents are paid on restricted stock held by
these individuals.
|
(7)
|
Stock options
granted in 1997 vested and became exercisable after one year. In 1998, the
Committee granted stock options to key employees at the Company that vest
and become exercisable over a 3-year period. Other than Mr. Tookers
options, the options in the 1998 grant to the named executives vest and
become exercisable as follows: 33.3% on 11/05/99; 33.3% on 11/05/00; and
33.4% on 11/05/01. Mr. Tookers options vested on
11/05/99.
|
(8)
|
The Committee
granted stock options to these executives in recognition of their
successful efforts to significantly improve the Companys performance
during 1999 and to provide them with strong incentive to continue to
increase the value of the Company during their employment. Traditionally,
grants of stock options were made in November or December of each year.
The Committee delayed the 1999 grant to January 31, 2000 so that it could
fully assess the full year 1999 performance of the Company. These options
were granted at fair market value at the time of grant. Other than Mr.
Koenemanns options, the options vest and become exercisable over 4
years as follows: 25% on 1/31/01; 25% on 1/31/02; 25% on 1/31/03; and 25%
on 1/31/04. Mr. Koenemanns options vest and become exercisable as
follows: 60% on 1/31/01 and 40% on 1/31/02.
|
(9)
|
No payments under
this plan will be made for the cycle ending with 1999.
|
(10)
|
These figures for
1999 include the following amounts for the premiums paid under the term
life portion of the split-dollar life insurance for: Mr. C. Galvin,
$2,995; Mr. Tooker, $6,638; Mr. Growney, $5,547; Mr. Gilmore, $1,998; and
Mr. Koenemann, $3,494.
|
(11)
|
These figures
include the following contributions made by the Company to the Profit
Sharing Plan for 1999 for: Mr. C. Galvin, $3,424; Mr. Tooker, $3,424; Mr.
Growney, $3,424; Mr. Gilmore, $3,424; and Mr. Koenemann,
$3,424.
|
Individual
Grants | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of
Securities Underlying Options Granted (# of shares) (1) (2) |
% of Total
Options Granted to Employees in 1999 |
Exercise
or Base Price ($/Sh) |
Expiration
Date (3) |
||||||||||
Potential
Realizable
Value (4) at Assumed Annual Rates of Stock Price Appreciation for Option Term |
||||||||||||||
5% ($) (4) | 10% ($) (4) | |||||||||||||
|
||||||||||||||
Christopher B. Galvin | 300,000 | 1.6 | % | $131.53 | 1/31/15 | 42,573,427 | 125,371,036 | |||||||
Gary L. Tooker | 0 | 0 | % | $131.53 | 1/31/15 | 0 | 0 | |||||||
Robert L. Growney | 275,000 | 1.5 | % | $131.53 | 1/31/15 | 39,025,641 | 114,923,449 | |||||||
Merle L. Gilmore | 250,000 | 1.4 | % | $131.53 | 1/31/15 | 35,477,856 | 104,475,863 | |||||||
Carl F. Koenemann | 110,000 | 0.6 | % | $131.53 | 1/31/15 | 15,610,257 | 45,969,380 | |||||||
|
(1)
|
These are options
granted under the Motorola Incentive Plan of 1998 to acquire shares of
Common Stock. Options were granted on January 31, 2000 relating to
performance during 1999. Traditionally, grants of stock options were made
in November or December of each year. The Committee delayed the 1999 grant
to January 31, 2000 so that it could fully assess the full year 1999
performance of the Company.
|
(2)
|
These options were
granted at fair market value at the time of the grant, and carry with them
the right to elect to have shares withheld upon exercise and/or to deliver
previously-acquired shares of Common Stock to satisfy tax withholding
requirements. Other than Mr. Koenemanns options, the options vest
and become exercisable over 4 years as follows: 25% on 1/31/01; 25% on
1/31/02; 25% on 1/31/03; and 25% on 1/31/04. Mr. Koenemanns options
vest and become exercisable as follows: 60% on 1/31/01 and 40% on 1/31/02.
Options may be transferred to family members or certain entities in which
family members have an interest. In the aggregate, the options described
in this table are exercisable for approximately 0.13% of the shares of
Common Stock outstanding on March 15, 2000.
|
(3)
|
The option term is
15 years from the date of grant. The option term is the same for
substantially all of the options granted to employees on January 31, 2000.
These options could expire earlier in certain situations.
|
(4)
|
These hypothetical
gains are based entirely on assumed annual growth rates of 5% and 10% in
the value of the Companys stock price over the entire 15-year life
of these options. This equates to an increase in stock price of 108% and
318%, respectively. These assumed rates of growth are selected by the
Securities and Exchange Commission for illustration purposes only and are
not intended to predict future stock prices, which will depend upon market
conditions and the Companys future performance. This calculation
does not take into account any taxes or other expenses which might be
owed. For example, the options granted to Mr. Galvin would produce a
pre-tax gain of $125,371,036 only if the Companys stock price
appreciates by 10% per year for 15 years and rises to more than $549 per
share before Mr. Galvin exercises the stock options. Based on the number
of shares of Motorola Common Stock outstanding as of January 31, 2000,
such an increase would produce a corresponding aggregate pre-tax gain of
more than $298 billion for the Companys stockholders. In other
words, Mr. Galvins gain from the options would equal .042% of the
potential gain to all stockholders.
|
|
Name | Shares
Acquired on Exercise (# of shares) |
Value
Realized ($) (1) |
Number of
Securities
Underlying Unexercised Options at end of 1999 (#) |
Value of
Unexercised In-The-
Money (2) Options at end of 1999 ($) (3) |
|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exercisable | Unexercisable (4) | Exercisable | Unexercisable (4) | ||||||||||||||
Christopher B. Galvin | 0 | 0 | 553,334 | 466,666 | 55,239,009 | 20,284,271 | |||||||||||
Gary L. Tooker | 63,080 | (5) | 4,549,363 | (5) | 660,920 | (6) | 0 | 66,372,819 | (6) | 0 | |||||||
Robert L. Growney | 30,373 | 1,647,233 | 295,667 | 418,333 | 26,614,554 | 17,711,736 | |||||||||||
Merle L. Gilmore | 0 | 0 | 274,667 | 383,333 | 25,976,044 | 16,384,636 | |||||||||||
Carl F. Koenemann | 69,690 | 5,286,278 | 163,644 | 176,666 | 14,872,980 | 7,956,471 | |||||||||||
(1)
|
The value
realized represents the difference between the base (or exercise)
price of the option shares and the market price of the option shares on
the date the option was exercised. The value realized was determined
without considering any taxes which may have been owed.
|
(2)
|
In-the-Money
options are options whose base (or exercise) price was less than
the market price of Common Stock at December 31, 1999.
|
(3)
|
Assuming a stock
price of $147.25 per share, which was the closing price of a share of
Common Stock reported for the New York Stock Exchange-Composite
Transactions on December 31, 1999.
|
(4)
|
Includes options
granted on January 31, 2000 relating to performance during 1999.
Traditionally, grants of stock options are made in November or December of
each year. The Committee delayed the grant to January 31, 2000 so that it
could fully assess the full year 1999 performance of the
Company.
|
(5)
|
Includes 18,000
shares acquired upon exercise of options that were previously transferred
by Mr. Tooker to a limited partnership indirectly held by Mr. Tooker and
his family members.
|
(6)
|
Includes 27,108
shares under exercisable options that were transferred by Mr. Tooker to a
limited partnership indirectly held by Mr. Tooker and his family
members.
|
Name | Performance
or Other Period Until Maturation or Payout Maximum ($) |
Estimated Future
Payouts
Under Non-Stock Based Plans |
|||||
---|---|---|---|---|---|---|---|
(1)(2)(4) | |||||||
Target
$(3) |
Maximum
($) |
||||||
Christopher B. Galvin | 4 Years | 1,593,750 | 3,187,500 | ||||
Gary L. Tooker | 4 Years | 1,350,000 | 2,700,000 | ||||
Robert L. Growney | 4 Years | 1,218,750 | 2,437,500 | ||||
Merle L. Gilmore | 4 Years | 937,500 | 1,875,000 | ||||
Carl F. Koenemann | 4 Years | 712,500 | 1,425,000 | ||||
(1)
|
Under the Company
s Long Range Incentive Plan of 1994 (LRIP), at the
beginning of each four-year cycle, the Compensation Committee determines
the objective measures/metrics for that cycle. The measures/metrics used
for this purpose are return on net assets (RONA), stockholder
return and sales growth over a four-year period, each weighted at 25%,
compared to a selected comparator group of companies. The fourth
measurement is fundable growth weighted at 25%. An award is earned only
when Company performance exceeds the minimum specified RONA floor,
notwithstanding superior performance versus the comparator group of
companies, and can range from 0% to 200% of the lesser of (i) 125% of the
executive officers annualized base salary on January 1 of the first
year of the four year cycle, or (ii) 100% of the executive officers
annualized base salary on December 31 of the last year of the four year
cycle.
|
(2)
|
All the payments
shown are potential assumed amounts. There is no assurance that Motorola
will achieve results that would lead to payments under LRIP or that any
payments will be made under this plan.
|
(3)
|
At the performance
target, which is that point at which 50% of the maximum award under the
LRIP would be payable, the indicated payments would be made under the
LRIP.
|
(4)
|
These figures were
calculated using the January 1, 1999 annualized base salary for each
participating executive officer.
|
Respectfully
submitted,
|
Samuel C. Scott
III, Chairman
|
H. Laurance
Fuller
|
John E. Pepper,
Jr.
|
[LINE CHART] Measurement Period S&P (Fiscal Year Covered) MOTOROLA 500 INDEX SUB-GROUPS INDEX - ------------------- -------- --------- ---------------- 1994 $100 $100 $100 1995 $ 99.0 $136.5 $137.5 1996 $107.1 $169.5 $192.4 1997 $100.9 $226.0 $251.6 1998 $108.6 $291.0 $418.0 1999 $262.7 $352.3 $733.9
[LINE CHART] Measurement Period S&P (Fiscal Year Covered) MOTOROLA 500 INDEX SUB-GROUPS INDEX - ------------------- -------- --------- ---------------- 1998 $100 $100 $100 1999 $241.9 $121 $175.6
|
By order of the
Board of Directors,
|
|
[Signature of A.
Peter Lawson]
|
A. Peter
Lawson
|
Secretary
|
|
In accordance with Rule 14a-3(c) under the Securities Exchange Act of 1934 (the Exchange Act), as adapted to the Summary Annual Report procedure, the information contained in the following commentary and consolidated financial statements and notes is provided solely for the information of stockholders and the Securities and Exchange Commission. Such information shall not be deemed to be soliciting material or to be filed with the Commission or subject to Regulation 14A under the Exchange Act (except as provided in Rule 14a-3) or to the liabilities of Section 18 of the Exchange Act, unless, and only to the extent that, it is expressly incorporated by reference into the Form 10-K of Motorola, Inc. for its fiscal year ending December 31, 1999.
($ in Millions except per share amounts) | December 31,
1999 |
% of
Sales |
December 31,
1998 |
% of
Sales |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net sales | $30,931 | $29,398 | |||||||||||
Percent change from prior year | 5 | % | (1 | )% | |||||||||
Costs and expenses | |||||||||||||
Manufacturing and other costs of sales | 19,169 | 62.0 | % | 18,043 | 61.4 | % | |||||||
Selling, general and administrative expenses | 5,045 | 16.3 | % | 5,443 | 18.5 | % | |||||||
Restructuring and other charges | (226 | ) | (0.7 | )% | 1,980 | 6.7 | % | ||||||
Research and development expenditures | 3,438 | 11.1 | % | 2,893 | 9.8 | % | |||||||
Depreciation expense | 2,182 | 7.1 | % | 2,197 | 7.5 | % | |||||||
Interest expense, net | 155 | 0.5 | % | 216 | 0.7 | % | |||||||
Total costs and expenses | 29,763 | 30,772 | |||||||||||
Earnings (loss) before income taxes | 1,168 | 3.8 | % | (1,374 | ) | (4.7 | )% | ||||||
Income tax provision (benefit) | 351 | (412 | ) | ||||||||||
Net earnings (loss) | $ 817 | 2.6 | % | $ (962 | ) | (3.3 | )% | ||||||
Diluted earnings (loss) per common share | $ 1.31 | $ (1.61 | ) | ||||||||||
Geographic
Market Sales
by Locale of End Customer |
1999 | 1998 | |||
---|---|---|---|---|---|
United States | 37% | 41% | |||
Europe | 21% | 21% | |||
China | 10% | 10% | |||
Latin America | 8% | 8% | |||
Asia, excluding China and Japan | 10% | 7% | |||
Japan | 7% | 7% | |||
Other Markets | 7% | 6% | |||
100% | 100% | ||||
$1 billion annual rate of profit improvement from these programs. The Company s restructuring and other charges are described further in the section titled, 1998 Compared to 1997 that follows and is also detailed in Note 12 to the
Consolidated Financial Statements.
($ in Millions)
(Income) Charge |
SG &A | Costs of
Sales |
Restructuring
and Other |
Total | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Iridium related charges | $ 1,176 | $806 | $ | $ 1,982 | ||||||||
In-Process research and development write-off | 67 | | | 67 | ||||||||
Gains from the sale of investments and businesses | (1,139 | ) | | | (1,139 | ) | ||||||
Restructuring & other charges | | | (226 | ) | (226 | ) | ||||||
Net special charge | $ 104 | $806 | $(226 | ) | $ 684 | |||||||
($ in Millions)
(Income) Charge |
SG &A | Restructuring
and Other |
Total | ||||||
---|---|---|---|---|---|---|---|---|---|
Restructuring & other charges | $ | $1,980 | $1,980 | ||||||
In-Process research and development write-off | 109 | | 109 | ||||||
Other charges | 30 | | 30 | ||||||
Gains from the sale of investments and businesses | (250 | ) | | (250 | ) | ||||
Net special charge | $(111 | ) | $1,980 | $1,869 | |||||
Year Ended
($ in Millions except per share amounts) | December 31,
1999 |
% of
Sales |
December 31,
1998 |
% of
Sales |
|||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Net sales | $30,931 | $29,398 | |||||||||
Percent change from prior year | 5 | % | (1 | )% | |||||||
Costs and expenses | |||||||||||
Manufacturing and other costs of sales | 18,363 | 59.4% | 18,043 | 61.4% | |||||||
Selling, general and administrative expenses | 4,941 | 16.0% | 5,554 | 18.9% | |||||||
Restructuring and other charges | | | | | |||||||
Research and development expenditures | 3,438 | 11.1% | 2,893 | 9.8% | |||||||
Depreciation expense | 2,182 | 7.1% | 2,197 | 7.5% | |||||||
Interest expense, net | 155 | 0.5% | 216 | 0.7% | |||||||
Total costs and expenses | 29,079 | 28,903 | |||||||||
Earnings before income taxes | 1,852 | 6.0% | 495 | 1.7% | |||||||
Income tax provision | 556 | 148 | |||||||||
Net earnings | $ 1,296 | 4.2% | $ 347 | 1.2% | |||||||
Diluted earnings per common share | $ 2.08 | $ 0.58 | |||||||||
($ in Millions) | Dec. 31,
1999 |
Dec. 31,
1998 |
|||
---|---|---|---|---|---|
Net sales | $927 | $1,763 | |||
Earnings before income taxes | $126 | $ 42 | |||
($ in Millions except per share amounts) | December
31,
1999 |
% of
Sales |
December 31,
1998 |
% of
Sales |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Net sales | $30,004 | $27,635 | ||||||||||
Percent change from prior year | 9 | % | 4 | % | ||||||||
Costs and expenses | ||||||||||||
Manufacturing and other costs of sales | 17,724 | 59.1 | % | 16,823 | 60.9% | |||||||
Selling, general and administrative expenses | 4,809 | 16.0 | % | 5,157 | 18.7% | |||||||
Restructuring and other charges | | | | | ||||||||
Research and development expenditures | 3,415 | 11.4 | % | 2,850 | 10.3% | |||||||
Depreciation expense | 2,179 | 7.3 | % | 2,145 | 7.8% | |||||||
Interest expense, net | 151 | 0.5 | % | 207 | 0.8% | |||||||
Total costs and expenses | 28,278 | 27,182 | ||||||||||
Earnings before income taxes | 1,726 | 5.8 | % | 453 | 1.6% | |||||||
Income tax provision | 520 | 136 | ||||||||||
Net earnings | $ 1,206 | 4.0 | % | $ 317 | 1.1% | |||||||
Diluted earnings per common share | $ 1.94 | $ 0.53 | ||||||||||
|
($ in Millions except per share amounts) | December
31,
1998 |
% of
Sales |
December 31,
1997 |
% of
Sales |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Net sales | $29,398 | $29,794 | ||||||||||
Percent change from prior year | (1 | )% | 7 | % | ||||||||
Costs and expenses | ||||||||||||
Manufacturing and other costs of sales | 18,043 | 61.4 | % | 17,283 | 58.0% | |||||||
Selling, general and administrative expenses | 5,443 | 18.5 | % | 5,160 | 17.3% | |||||||
Restructuring and other charges | 1,980 | 6.7 | % | 327 | 1.1% | |||||||
Research and development expenditures | 2,893 | 9.8 | % | 2,748 | 9.2% | |||||||
Depreciation expense | 2,197 | 7.5 | % | 2,329 | 7.8% | |||||||
Interest expense, net | 216 | 0.7 | % | 131 | 0.4% | |||||||
Total costs and expenses | 30,772 | 27,978 | ||||||||||
Earnings (loss) before income taxes | (1,374 | ) | (4.7 | )% | 1,816 | 6.1% | ||||||
Income tax provision (benefit) | (412 | ) | 636 | |||||||||
Net earnings (loss) | $ (962) | (3.3 | )% | $ 1,180 | 4.0% | |||||||
Diluted (loss) earnings per common share | $ (1.61 | ) | $ 1.94 | |||||||||
1998 | 1997 | ||||
---|---|---|---|---|---|
United States | 41% | 42% | |||
Europe | 21% | 19% | |||
China | 10% | 11% | |||
Latin America | 8% | 7% | |||
Asia, excluding China and Japan | 7% | 9% | |||
Japan | 7% | 6% | |||
Other Markets | 6% | 6% | |||
100% | 100% | ||||
Accruals at
Dec. 31, 1998 |
1999 Amounts
Used |
Fourth
Quarter
1999 Reversals Into Income |
Accruals at
Dec. 31, 1999 |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Consolidation of manufacturing operations | $155 | $(143 | ) | $ | $12 | ||||||
Business exits | 137 | (31 | ) | (102 | ) | 4 | |||||
Employee separations | 187 | (136 | ) | (40 | ) | 11 | |||||
Total restructuring | $479 | $(310 | ) | $(142 | ) | $27 | |||||
Asset impairments and other charges | 161 | (77 | ) | (84 | ) | | |||||
Totals | $640 | $(387 | ) | $(226 | ) | $27 | |||||
Second
Quarter 1998 Initial Charges |
1998
Reclassifications |
Initial
Charges
As Adjusted |
1998 Amounts
Used |
Accruals at
Dec. 31, 1998 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Consolidation of
manufacturing
operations |
$ 361 | $ (35 | ) | $ 326 | $ (171 | ) | $155 | ||||||
Business exits | 453 | (162 | ) | 291 | (154 | ) | 137 | ||||||
Employee separations | 461 | 197 | 658 | (471 | ) | 187 | |||||||
Total restructuring | $1,275 | $ | $1,275 | $ (796 | ) | $479 | |||||||
Asset impairments and other charges | 705 | | 705 | (544 | ) | 161 | |||||||
Totals | $1,980 | $ | $1,980 | $(1,340 | ) | $640 | |||||||
December 31, 1998. The segment amounts also include the allocation of $55 million in restructuring and other charges recorded at the corporate level.
|
Restructuring
Charges |
Other
Charges |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Segment | Consol of
mfg. ops |
Business
exits |
Employee
separations |
Asset
Impairments |
Other | Total | ||||||
Personal Communications | $113 | $ 38 | $149 | $175 | $122 | $ 597 | ||||||
Network Systems | 11 | | 44 | | 104 | 159 | ||||||
Commercial, Government and | ||||||||||||
Industrial Systems | 18 | | 104 | 5 | | 127 | ||||||
Semiconductor Products | 163 | 101 | 282 | 159 | 26 | 731 | ||||||
Other Products | 21 | 152 | 79 | 41 | 73 | 366 | ||||||
Total | $326 | $291 | $658 | $380 | $325 | $1,980 | ||||||
|
Accruals
at Dec. 31, 1998 |
Adjustments | Amounts
Used |
Accruals
at Dec. 31, 1999 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Q2 1997: | Semiconductor
Products Segment
Exit from DRAM market |
$ 8 | $(3 | ) | $(5 | ) | $ | ||||||
Q3 1997: | Other Products
Segment
Exit from MacOS-compatible computer systems business |
15 | | (2 | ) | 13 | |||||||
Q4 1997: | Former
Messaging, Information and
Media Products Segment Exit from retail analog modem business |
3 | (3 | ) | | | |||||||
Grand Total | $26 | $(6 | ) | $(7 | ) | $13 | |||||||
1997
Initial charges |
Adjust-
ments |
Amounts
Used |
Accruals
at Dec. 31, 1997 |
Adjust-
ments |
Amounts
Used |
Accruals
at Dec. 31, 1998 |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Q2 1997: | Semiconductor
Products
Segment Exit from DRAM market |
$170 | $(9 | ) | $(131 | ) | $ 30 | $(12 | ) | $ (10 | ) | $ 8 | |||||||||
Q3 1997: | Other Products
Segment
Exit from MacOS- compatible computer systems business |
95 | | (28 | ) | 67 | (10 | ) | (42 | ) | 15 | ||||||||||
Q4 1997: | Former Messaging,
Information and Media Products Segment Exit from retail analog modem business |
62 | | | 62 | | (59 | ) | 3 | ||||||||||||
Grand Total | $327 | $(9 | ) | $(159 | ) | $159 | $(22 | ) | $(111 | ) | $26 | ||||||||||
financial statements.
Appendix.
after income taxes. The 1997 earnings include net special charges of $306 million before income taxes, equivalent to 32 cents per share after income taxes.
($ in Millions) | |||||||||
---|---|---|---|---|---|---|---|---|---|
(Income) Charge | SG &A | Restructuring
and Other |
Total | ||||||
Restructuring &
other
charges |
$ | $1,980 | $1,980 | ||||||
In-Process research
and
development write-off |
109 | | 109 | ||||||
Other charges | 30 | | 30 | ||||||
Gains from the sale
of
investments and businesses |
(250 | ) | | (250 | ) | ||||
Net special charge | $(111 | ) | $1,980 | $1,869 | |||||
($ in Millions) | |||||||||
---|---|---|---|---|---|---|---|---|---|
(Income) Charge | SG &A | Restructuring
and Other |
Total | ||||||
Restructuring &
other
charges |
$ | $327 | $327 | ||||||
Other charges | 41 | | 41 | ||||||
Impairment on joint
venture investments |
31 | | 31 | ||||||
Income from
favorable
settlement of patent claims |
(34 | ) | | (34 | ) | ||||
Gains from the sale
of
investments and businesses |
(59 | ) | | (59 | ) | ||||
Net special charge | $(21 | ) | $327 | $306 | |||||
|
December 31, 1998 and 1997:
($ in Millions except per share amounts) | December
31,
1998 |
% of
Sales |
December 31,
1997 |
% of
Sales |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Net sales | $29,398 | $29,794 | ||||||||||
Percent change from prior year | (1 | )% | 7 | % | ||||||||
Costs and expenses | ||||||||||||
Manufacturing and other costs of sales | 18,043 | 61.4 | % | 17,283 | 58.0% | |||||||
Selling, general and administrative expenses | 5,554 | 18.9 | % | 5,181 | 17.4% | |||||||
Restructuring and other charges | | | | | ||||||||
Research and development expenditures | 2,893 | 9.8 | % | 2,748 | 9.2% | |||||||
Depreciation expense | 2,197 | 7.5 | % | 2,329 | 7.8% | |||||||
Interest expense, net | 216 | 0.7 | % | 131 | 0.4% | |||||||
Total costs and expenses | 28,903 | 27,672 | ||||||||||
Earnings before income taxes | 495 | 1.7 | % | 2,122 | 7.1% | |||||||
Income tax provision | 148 | 743 | ||||||||||
Net earnings | $ 347 | 1.2 | % | $ 1,379 | 4.6% | |||||||
Diluted earnings per common share | $ 0.58 | $ 2.26 | ||||||||||
($ in millions)
Years ended December 31 |
1999 | 1998 | 1997 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Orders | $13,694 | $10,653 | $10,406 | |||||||
% change from prior year | 29 | % | (2 | )% | ||||||
Segment sales | $11,932 | $10,132 | $11,026 | |||||||
% change from prior year | 18 | % | (8 | )% | ||||||
Operating profit (loss) before tax | $ 608 | $ (373 | ) | $ 1,122 | ||||||
% change from prior year | 263 | % | (133 | )% | ||||||
Special Items: Income (Expense) | ||||||||||
Iridium Related | $ (97 | ) | $ | $ | ||||||
Restructuring & Other | 112 | (597 | ) | | ||||||
Sale of Investments/Businesses | 10 | 118 | 24 | |||||||
In-Process Research & Development | (7 | ) | | | ||||||
Other Charges | | | (44 | ) | ||||||
Net Special Items | $ 18 | $ (479 | ) | $ (20 | ) | |||||
Operating profit (loss) excluding special items | $ 590 | $ 106 | $ 1,142 | |||||||
% change from prior year | 457 | % | (91 | )% | ||||||
telephones.
($ in millions) | |||||||||
---|---|---|---|---|---|---|---|---|---|
Years ended December 31 | 1999 | 1998 | 1997 | ||||||
Orders | $ 6,510 | $6,403 | $7,800 | ||||||
% change from prior year | 2 | % | (18 | )% | |||||
Segment sales | $ 6,544 | $7,064 | $6,061 | ||||||
% change from prior year | (7 | )% | 17 | % | |||||
Operating profit (loss) before tax | $ (479 | ) | $ 819 | $ 618 | |||||
% change from prior year | (158 | )% | 33 | % | |||||
Special Items: Income (Expense) | |||||||||
Iridium Related | $(1,325 | ) | $ | $ | |||||
Restructuring & Other | 67 | (159 | ) | | |||||
In-Process Research & Development | (14 | ) | | | |||||
Miscellaneous | | (8 | ) | | |||||
Net Special Items | $(1,272 | ) | $ (167 | ) | $ | ||||
Operating profit (loss) excluding special items | $ 793 | $ 986 | $ 618 | ||||||
% change from prior year | (20 | )% | 60 | % | |||||
($ in millions) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Years ended December 31 | 1999 | 1998 | 1997 | ||||||||
Orders | $4,733 | $4,009 | $4,147 | ||||||||
% change from prior year | 18 | % | (3 | )% | |||||||
Segment sales | $4,068 | $4,079 | $4,037 | ||||||||
% change from prior year | 0 | % | 1 | % | |||||||
Operating profit (loss) before tax | $ 609 | $ 412 | $ 345 | ||||||||
% change from prior year | 48 | % | 19 | % | |||||||
Special Items: Income (Expense) | |||||||||||
Iridium Related | $ (8 | ) | $ | $ | |||||||
Restructuring & Other | | (127 | ) | | |||||||
Sale of Investments/Businesses | 198 | 90 | 10 | ||||||||
In-Process Research & Development | (4 | ) | | | |||||||
Miscellaneous | | (9 | ) | | |||||||
Net Special Items | $ 186 | $ (46 | ) | $ 10 | |||||||
Operating profit (loss) excluding special items | $ 423 | $ 458 | $ 335 | ||||||||
% change from prior year | (8 | )% | 37 | % |
|
($ in millions)
Years ended December 31 |
1999 | 1998 | 1997 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Orders | $8,077 | $ 7,425 | $8,416 | |||||||
% change from prior year | 9 | % | (12 | )% | ||||||
Segment sales | $7,370 | $ 7,314 | $8,003 | |||||||
% change from prior year | 1 | % | (9 | )% | ||||||
Operating profit (loss) before tax | $ 619 | $(1,225 | ) | $ 168 | ||||||
% change from prior year | 151 | % | (829 | )% | ||||||
Special Items: Income (Expense) | ||||||||||
Restructuring & Other | $ | $ (731 | ) | $ (170 | ) | |||||
Sale of Investments/Businesses | 373 | | 23 | |||||||
In-Process Research & Development | (42 | ) | | | ||||||
Miscellaneous | | (21 | ) | (27 | ) | |||||
Net Special Items | $ 331 | $ (752 | ) | $ (174 | ) | |||||
Operating profit (loss) excluding special items | $ 288 | $ (473 | ) | $ 342 | ||||||
% change from prior year | 161 | % | (238 | )% | ||||||
Motorola internal business units consumed 22% of the
segments product output in both 1999 and 1998.
|
($ in Millions) | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SG
&A |
Cost
of Sales |
1999
Total |
SG
&A |
Cost
of Sales |
1998
Total |
SG
&A |
Cost
of Sales |
1997
Total |
|||||||||||
Special Charges: | |||||||||||||||||||
Bond Investment write-down | $ 157 | $ | $ 157 | $ | $ | $ | $ | $ | $ | ||||||||||
Development &
Commercialization
provisions |
1,019 | 806 | 1,825 | | | | | | | ||||||||||
Total Special Charges | $1,176 | $806 | $1,982 | $ | $ | $ | $ | $ | $ | ||||||||||
Other Charges: | |||||||||||||||||||
Development &
Commercialization
Provisions |
$ 56 | $ 31 | $ 87 | $ 14 | $81 | $ 95 | $ | $ 132 | $132 | ||||||||||
Companys share of Iridium net losses | 50 | | 50 | 265 | | 265 | 46 | | 46 | ||||||||||
Total Other Charges | $ 106 | $ 31 | $ 137 | $279 | $81 | $360 | $46 | $ 132 | $178 | ||||||||||
Total Charges | $1,282 | $837 | $2,119 | $279 | $81 | $360 | $46 | $ 132 | $178 | ||||||||||
|
Dec. 31,
1999 |
Dec. 31,
1998 |
||||
---|---|---|---|---|---|
Company Assets: | |||||
Investments: | |||||
Equity investment in Iridium | $ | $ 50 | |||
Bond investment in Iridium | | 157 | |||
Investments in and notes
receivable from Iridium gateway companies |
39 | 56 | |||
Total | $ 39 | $ 263 | |||
Accounts Receivable: | |||||
Operations & Maintentance
contract |
|||||
Deferred
amount due to
Company |
$ 400 | $ | |||
Other amounts
due to
Company |
179 | 176 | |||
$ 579 | $ 176 | ||||
Other contracts | 82 | 88 | |||
Total | $ 661 | $ 264 | |||
Company Guarantees and Other: | |||||
Bank Guarantees and Other
Financial Commitments: |
|||||
Senior Secured Credit
Agreement Capital Call |
$ 50 | $ 50 | |||
Senior Guaranteed Credit
Agreement |
| 750 | |||
Conditional Commitment to
Provide Guarantee |
See Below | See Below | |||
Total | $ 50 | $ 800 | |||
Contractual Commitments and
Other Obligations: |
|||||
Obligations to subcontractors | $ 85 | $ 109 | |||
Assets at risk and other
estimated potential contractual obligations |
963 | 791 | |||
Total | $ 1,048 | 900 | |||
Total Company
Assets and
Guarantees |
$ 1,798 | $ 2,227 | |||
Company
Development and
Commercialzation Reserves (See table that follows) |
$ 1,798 | $ 649 | |||
Development and
Commercialization Reserves |
Dec. 31,
1999 |
Dec. 31,
1998 |
Dec. 31,
1997 |
|||||
---|---|---|---|---|---|---|---|---|
Provisions: | ||||||||
Special Charges | $1,825 | $ | $ | |||||
Other Charges | 87 | 95 | 132 | |||||
Total Provisions | $1,912 | $ 95 | $132 | |||||
Amounts Used | ||||||||
Payments under
Guaranteed Credit Agreement |
(743 | ) | | | ||||
Interim Funding to
Iridium |
(20 | ) | | | ||||
Development and
Commercialization Reserves |
$1,798 | $649 | $554 | |||||
|
·
|
The Broadband
Communications Segment, as discussed above, will focus on solutions that
deliver interactive television, the Internet and telephone services over
cable networks. The new segment combines the operations of General
Instrument with the existing cable modem telephony business of the Company
s Internet and Networking Group.
|
·
|
The Integrated
Electronics Systems Sector, IESS, which has been included in the Other
Products seg
ment, will be reported as a separate segment. Management believes that
growth prospects for IESS are strong, particularly for Telematics products
and systems solutions, which blend innovative wireless communications and
automotive technologies to provide security, information, convenience and
entertainment services from a central service center to drivers and
passengers.
|
·
|
The impact of
manufacturing consolidation, cost reduction and restructuring programs on
the Companys ability to effectively compete and to continue to
grow.
|
·
|
The ability of the
Company to integrate its newly acquired businesses, and to achieve
strategic objectives, cost savings and other benefits.
|
·
|
The ability of the
Company to recruit and retain engineers and other highly skilled personnel
needed to compete in an intensely competitive market and develop
successful new products.
|
·
|
During 1999, 10% of
the Companys sales were in China and it has significant operations
in China. An economic downturn in Chinas economy could materially
adversely impact the Company.
|
·
|
During 1999, 17% of
the Companys sales were in Japan and Asia-Pacific (excluding China).
If the economic recession being experienced in some Asian countries fails
to improve, or spreads to other parts of Asia, the Companys
performance will likely continue to be adversely impacted.
|
·
|
Because more than
half of the Companys sales are outside the U.S., the Companys
results could be materially adversely affected by weak economic conditions
in countries in which it does sizable business and emerging markets (in
which there tend to be significant growth) and by changes in foreign
currency exchange rates which can introduce significant volatility to
rates of growth.
|
·
|
The effect of, and
change in, trade, monetary and fiscal policies, laws and regulations,
other activities of U.S. and non-U.S. governments, agencies and similar
organizations, and social and economic conditions, affecting the Company
s operations, including in emerging markets in Asia and Latin
America.
|
·
|
Motorolas
success in partnering with other industry leaders to meet customer product
and service requirements, particularly in its communications
businesses.
|
·
|
Risks related to
the introduction of the euro currency in Europe, including the ability of
the Company to successfully compete in Europe.
|
·
|
During 1998 and
1999, the Company acquired controlling and non-controlling interests in
several businesses that had technology that was not fully developed. If
the technology is not fully developed in a timely manner, the Company
s investments in such companies could be materially adversely
impacted.
|
·
|
The outcome of
pending and future litigation and the protection and validity of patents
and other intellectual property rights. Patent and other intellectual
property rights of the Company are important competitive tools and many
generate income under license agreements. There can be no assurances as to
the favorable outcome of litigation or that intellectual property rights
will not be challenged, invalidated or circumvented in one or more
countries.
|
·
|
The risk that the
actual adverse market conditions differ from the assumed adverse market
conditions that are used in the market risk factors discussion, causing
actual future results to differ materially from projected
results.
|
·
|
The Companys
ability to meet customer demands depends in part on our ability to obtain
timely delivery of parts and components from our suppliers. We have
experienced component shortages in the past, including components for
wireless telephones, that have adversely affected our operations. Although
we work closely with our suppliers to avoid these types of shortages,
there can be no assurances that we will not continue to encounter these
problems in the future.
|
·
|
Continued pricing
pressure on wireless telephones, infrastructure equipment, paging and
messaging products and infrastructure, and the adverse impact on gross
margins for those products, especially because of economic conditions in
Asia and Latin America that have resulted in significant pressure to
reduce the cost of the Companys products in order to compete with
manufacturers in Asia.
|
|
·
|
The ability of the
Companys wireless telephone business to continue its transition to
digital technologies and successfully compete in that business and retain
or gain market share. The Company faces intense competition in these
markets from both established companies and new entrants. Product life
cycles can be short and new products are expensive to develop and bring to
market.
|
·
|
The risks related
to the Companys significant investment in developing and introducing
new products such as digital wireless telephones, two-way and voice
paging, CDMA and other technologies for third generation (3G) wireless,
products for transmission of telephony and high-speed data over hybrid
fiber coaxial cable systems, integrated digital radios, and semiconductor
products. These risks include: difficulties and delays in the development,
production, testing and marketing of products; customer acceptance of
products, particularly as the Companys focus on the consumer market
increases; the development of industry standards; the significant amount
of resources the Company must devote to the development of new technology;
and the ability of the Company to differentiate its products and compete
with other companies in the same market.
|
·
|
The impact of
continued or increased weak demand for paging products particularly in
North America and China, the two largest markets for these
products.
|
·
|
Unfavorable
outcomes to any currently pending or future litigation involving the
Iridium project.
|
·
|
Difficulties,
delays and unexpected liabilities or expenses encountered in connection
with the implementation of Iridiums liquidation proceedings,
including those encountered in finalizing and implementing the deorbiting
process and in resolving any remaining obligations Motorola has under its
agreements related to the Iridium project.
|
·
|
Difficulties,
delays and unexpected liabilities or expenses incurred in effectively
reallocating resources that were previously dedicated to the Iridium
project.
|
·
|
Increasing demand
for customer financing of equipment sales, particularly infrastructure
equipment, and the ability of the Company to provide financing on
competitive terms with other companies.
|
·
|
Risks related to
the trend towards increasingly large system contracts for infrastructure
equipment and the resulting reliance on large customers, the technological
risks of such contracts, especially when the contracts involve new
technology, and financial risks to Motorola under these contracts,
including the difficulty of projecting costs associated with large
contracts.
|
·
|
The need for
continued significant demand for wireless communications equipment,
including of the type the Company manufactures or is
developing.
|
·
|
Continued growth in
the cable industry and that industrys ability to compete with other
entertainment providers.
|
·
|
The impact of the
continued recovery in the semiconductor market and the Companys
participation in that recovery. The semiconductor business has
restructured itself to participate in some of the semiconductor markets
with the best growth potential. There can be no assurances that this
strategy will be successful.
|
·
|
The ability of
Motorolas semiconductor business to compete in the highly
competitive semiconductor market. Factors that could adversely affect
Motorolas ability to compete include: production inefficiencies and
higher costs related to underutilized facilities, including both
wholly-owned and joint venture facilities; shortage of manufacturing
capacity for some products; competitive factors, such as rival chip
architectures, mix of products, acceptance of new products and price
pressures; risk of inventory obsolescence due to shifts in market demand;
the continued growth of embedded technologies and systems and the Company
s ability to compete in that market; and the effect of orders from
Motorolas equipment businesses.
|
·
|
The ability of
Motorolas semiconductor business to increase its utilization of
foundry manufacturing capacity and the impact of such efforts on capital
expenditures, production costs and ability to satisfy delivery
requirements.
|
·
|
Continued
significant increases in the electronic content cars and trucks and
consumer demand for the related products and services.
|
|
Years ended December 31 | 1999(1) | 1998(2) | |||||
---|---|---|---|---|---|---|---|
Net sales | $30,931 | $29,398 | |||||
Earnings (loss) before income taxes | 1,168 | (1,374 | ) | ||||
% to sales | 3.8 | % | (4.7 | )% | |||
Net earnings (loss) | 817 | (962 | ) | ||||
% to sales | 2.6 | % | (3.3 | )% | |||
Diluted earnings (loss) per common share (in dollars) | 1.31 | (1.61 | ) | ||||
Research and development expenditures | 3,438 | 2,893 | |||||
Capital expenditures | 2,684 | 3,221 | |||||
Working capital | 4,087 | 2,091 | |||||
Current ratio | 1.33 | 1.18 | |||||
Return on average invested capital | 5.5 | % | (6.2 | )% | |||
Return on average stockholders equity | 5.9 | % | (7.6 | )% | |||
% of net debt to net debt plus equity | 10.1 | % | 26.8 | % | |||
Book value per common share (in dollars) | 26.67 | 20.33 | |||||
Year-end employment (in thousands) | 121 | 133 | |||||
(1)
|
Earnings before
income taxes, net earnings and diluted earnings per common share include
special charges of $684 million pre-tax, or 77 cents per share after-tax,
resulting primarily from charges related to Iridium offset by gains from
the sales of investments and businesses.
|
(2)
|
The loss before
income taxes, net loss and diluted loss per common share include special
charges of $1.9 billion pre-tax, or $2.19 per share after-tax, resulting
primarily from manufacturing consolidation, cost reduction and
restructuring programs.
|
[Signature of Christopher B. Galvin] | [Signature of Carl F. Koenemann] | |
Christopher B. Galvin | Carl F. Koenemann | |
Chairman of the Board | Executive Vice President | |
and Chief Executive Officer | and Chief Financial Officer |
Motorola, Inc.:
which is as of March 17, 2000
|
Years Ended December 31 | |||||||||
---|---|---|---|---|---|---|---|---|---|
(In millions, except per share amounts) | 1999 | 1998 | 1997 | ||||||
NET SALES | $30,931 | $29,398 | $29,794 | ||||||
COSTS AND EXPENSES | |||||||||
Manufacturing and other costs of sales | 19,169 | 18,043 | 17,283 | ||||||
Selling, general and administrative expenses | 5,045 | 5,443 | 5,160 | ||||||
Restructuring and other charges | (226 | ) | 1,980 | 327 | |||||
Research and development expenditures | 3,438 | 2,893 | 2,748 | ||||||
Depreciation expense | 2,182 | 2,197 | 2,329 | ||||||
Interest expense, net | 155 | 216 | 131 | ||||||
TOTAL COSTS AND EXPENSES | 29,763 | 30,772 | 27,978 | ||||||
EARNINGS (LOSS) BEFORE INCOME TAXES | 1,168 | (1,374 | ) | 1,816 | |||||
INCOME TAX PROVISION (BENEFIT) | 351 | (412 | ) | 636 | |||||
NET EARNINGS (LOSS) | $ 817 | $ (962 | ) | $ 1,180 | |||||
BASIC EARNINGS (LOSS) PER COMMON SHARE | $ 1.35 | $ (1.61 | ) | $ 1.98 | |||||
DILUTED EARNINGS (LOSS) PER COMMON SHARE | $ 1.31 | $ (1.61 | ) | $ 1.94 | |||||
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 606.4 | 598.6 | 595.5 | ||||||
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 624.7 | 598.6 | 612.2 | ||||||
December
31 |
|||||
---|---|---|---|---|---|
(In millions, except per share amounts) | 1999 | 1998 | |||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ 3,345 | $ 1,453 | |||
Short-term investments | 699 | 171 | |||
Accounts receivable, net | 5,125 | 5,057 | |||
Inventories | 3,422 | 3,745 | |||
Deferred income taxes | 3,162 | 2,362 | |||
Other current assets | 750 | 743 | |||
Total current assets | 16,503 | 13,531 | |||
Property, plant and equipment, net | 9,246 | 10,049 | |||
Other assets | 11,578 | 5,148 | |||
TOTAL ASSETS | $37,327 | $28,728 | |||
LIABILITIES AND STOCKHOLDERS EQUITY | |||||
Current liabilities | |||||
Notes payable and current portion of long-term debt | $ 2,504 | $ 2,909 | |||
Accounts payable | 3,015 | 2,305 | |||
Accrued liabilities | 6,897 | 6,226 | |||
Total current liabilities | 12,416 | 11,440 | |||
Long-term debt | 3,089 | 2,633 | |||
Deferred income taxes | 3,481 | 1,188 | |||
Other liabilities | 1,513 | 1,245 | |||
Company-obligated
mandatorily redeemable preferred
securities of subsidiary trust holding solely company- guaranteed debentures |
484 | | |||
Stockholders equity | |||||
Preferred stock,
$100 par value issuable in series
Authorized shares: 0.5 (none issued) |
| | |||
Common stock, $3 par value | |||||
Authorized shares: 1999 and 1998, 1,400 | |||||
Issued and outstanding: 1999, 612.8; 1998, 601.1 | 1,838 | 1,804 | |||
Additional paid-in capital | 2,572 | 1,894 | |||
Retained earnings | 8,780 | 8,254 | |||
Non-owner changes to equity | 3,154 | 270 | |||
Total stockholders equity | 16,344 | 12,222 | |||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | $37,327 | $28,728 | |||
Non-Owner
Changes To Equity |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(In millions, except per share amounts) | Common
Stock and Additional Paid-In Capital |
Fair Value
Adjustment To Certain Cost-Based Investments |
Foreign
Currency Translation Adjustments |
Minimum
Pension Liability Adjustment |
Retained
Earnings |
Comprehensive
Earnings (Loss) |
||||||||||||
Balances at January 1, 1997 | $3,332 | $ (26 | ) | $(121 | ) | $ | $8,610 | |||||||||||
Net earnings | 1,180 | 1,180 | ||||||||||||||||
Conversion of zero
coupon
notes |
7 | |||||||||||||||||
Fair value
adjustment to certain
cost-based investments: |
||||||||||||||||||
Reversal of prior period
adjustment |
26 | 26 | ||||||||||||||||
Recognition of current
period unrecognized gain |
533 | 533 | ||||||||||||||||
Change in foreign
currency
translation adjustments |
(119 | ) | (119 | ) | ||||||||||||||
Minimum pension
liability
adjustment |
(38 | ) | (38 | ) | ||||||||||||||
Stock options and other | 174 | |||||||||||||||||
Dividends declared
($.48 per
share) |
(286 | ) | ||||||||||||||||
Balances at December 31, 1997 | $3,513 | $ 533 | $(240 | ) | $(38 | ) | $9,504 | $1,582 | ||||||||||
Net loss | (962 | ) | (962 | ) | ||||||||||||||
Conversion of zero
coupon
notes |
3 | |||||||||||||||||
Fair value
adjustment to certain
cost-based investments: |
||||||||||||||||||
Reversal of prior period
adjustment |
(533 | ) | (533 | ) | ||||||||||||||
Recognition of current
period unrecognized gain |
476 | 476 | ||||||||||||||||
Change in foreign
currency
translation adjustments |
34 | 34 | ||||||||||||||||
Minimum pension
liability
adjustment |
38 | 38 | ||||||||||||||||
Stock options and other | 182 | |||||||||||||||||
Dividends declared
($.48 per
share) |
(288 | ) | ||||||||||||||||
Balances at December 31, 1998 | $3,698 | $ 476 | $(206 | ) | $ | $8,254 | $ (947 | ) | ||||||||||
Net earnings | 817 | 817 | ||||||||||||||||
Conversion of zero
coupon
notes |
9 | |||||||||||||||||
Fair value
adjustment to certain
cost-based investments: |
||||||||||||||||||
Reversal of prior period
adjustment |
(476 | ) | (476 | ) | ||||||||||||||
Recognition of current
period unrecognized gain |
3,466 | 3,466 | ||||||||||||||||
Change in foreign
currency
translation adjustments |
(33 | ) | (33 | ) | ||||||||||||||
Minimum pension
liability
adjustment |
(73 | ) | (73 | ) | ||||||||||||||
Stock options and other | 703 | |||||||||||||||||
Dividends declared
($.48 per
share) |
(291 | ) | ||||||||||||||||
Balances at December 31, 1999 | $4,410 | $3,466 | $(239 | ) | $(73 | ) | $8,780 | $3,701 | ||||||||||
|
Years Ended
December 31 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
(In millions) | 1999 | 1998 | 1997 | |||||||
OPERATING | ||||||||||
Net earnings (loss) | $ 817 | $ (962 | ) | $ 1,180 | ||||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||||||
Restructuring and other charges | (226 | ) | 1,980 | 327 | ||||||
Iridium charges | 2,119 | 360 | 178 | |||||||
Depreciation | 2,182 | 2,197 | 2,329 | |||||||
Deferred income taxes | (415 | ) | (933 | ) | (98 | ) | ||||
Amortization of debt discount and issue costs | 11 | 11 | 10 | |||||||
Gain on disposition of investments and businesses, net of acquisition charges | (1,034 | ) | (146 | ) | (116 | ) | ||||
Change in assets and liabilities, net of effects of acquisitions and dispositions: | ||||||||||
Accounts receivable | 15 | (238 | ) | (812 | ) | |||||
Inventories | (661 | ) | 254 | (880 | ) | |||||
Other current assets | (30 | ) | 31 | (114 | ) | |||||
Accounts payable and accrued liabilities | 270 | (753 | ) | 698 | ||||||
Other assets and liabilities | (1,120 | ) | (780 | ) | (106 | ) | ||||
Net cash provided by operating activities | 1,928 | 1,021 | 2,596 | |||||||
INVESTING | ||||||||||
Acquisitions and advances to affiliates | (552 | ) | (786 | ) | (286 | ) | ||||
Proceeds from dispositions of investments and businesses | 2,536 | 371 | 248 | |||||||
Capital expenditures | (2,684 | ) | (3,221 | ) | (2,874 | ) | ||||
Proceeds from dispositions of property, plant and equipment | 468 | 507 | 443 | |||||||
(Purchases) sales of short-term investments | (496 | ) | 164 | (37 | ) | |||||
Net cash used for investing activities | (728 | ) | (2,965 | ) | (2,506 | ) | ||||
FINANCING | ||||||||||
(Repayment of) proceeds from commercial paper and short-term borrowings | (403 | ) | 1,627 | (100 | ) | |||||
Proceeds from issuance of debt | 501 | 773 | 312 | |||||||
Repayment of debt | (47 | ) | (293 | ) | (102 | ) | ||||
Issuance of common stock | 481 | 99 | 137 | |||||||
Issuance of preferred securities of subsidiary trust | 484 | | | |||||||
Payment of dividends | (291 | ) | (288 | ) | (286 | ) | ||||
Net cash provided by (used for) financing activities | 725 | 1,918 | (39 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | (33 | ) | 34 | (119 | ) | |||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | $ 1,892 | $ 8 | $ (68 | ) | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | $ 1,453 | $ 1,445 | $ 1,513 | |||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ 3,345 | $ 1,453 | $ 1,445 | |||||||
Supplemental Cash Flow Information | ||||||||||
CASH PAID DURING THE YEAR FOR: | ||||||||||
Interest | $ 265 | $ 286 | $ 211 | |||||||
Income taxes | $ 279 | $ 388 | $ 611 | |||||||
|
1999 | 1998 | 1997 | |||||
---|---|---|---|---|---|---|---|
Total revenue | $ 159 | $ 72 | $ 29 | ||||
Net earnings | 53 | 21 | 11 | ||||
Total assets | 2,015 | 1,152 | 458 | ||||
Total liabilities | 1,768 | 977 | 367 | ||||
Total stockholder s equity | $ 247 | $ 175 | $ 91 | ||||
Years ended December 31 | 1999 | 1998 | 1997 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Research and development | $3,438 | $2,893 | $2,748 | |||||||
Foreign currency losses | 20 | 20 | 2 | |||||||
Interest expense, net: | ||||||||||
Interest expense | 305 | 301 | 216 | |||||||
Interest income | (150 | ) | (85 | ) | (85 | ) | ||||
Interest expense, net | $ 155 | $ 216 | $ 131 | |||||||
Years ended December 31 | 1999 | 1998 | 1997 | |||||
---|---|---|---|---|---|---|---|---|
Basic earnings
(loss) per
common share |
||||||||
Net earnings (loss) | $ 817 | $ (962 | ) | $1,180 | ||||
Weighted average
common
shares outstanding |
606.4 | 598.6 | 595.5 | |||||
Per share amount | $ 1.35 | $(1.61 | ) | $ 1.98 | ||||
Diluted earnings
(loss) per
common share |
||||||||
Net earnings (loss) | $ 817 | $ (962 | ) | $1,180 | ||||
Add: Interest on
zero coupon
notes, net |
2 | | 5 | |||||
Net earnings
(loss), as
adjusted |
$ 819 | $ (962 | ) | $1,185 | ||||
Weighted average
common
shares outstanding |
606.4 | 598.6 | 595.5 | |||||
Add: Effect of
dilutive
securities |
||||||||
Stock options | 16.4 | | 10.4 | |||||
Zero coupon notes | 1.9 | | 6.3 | |||||
Diluted wtd.
average common
shares outstanding |
624.7 | 598.6 | 612.2 | |||||
Per share amount | $ 1.31 | $(1.61 | ) | $ 1.94 | ||||
|
December 31 | 1999 | 1998 | |||||
---|---|---|---|---|---|---|---|
Inventories: | |||||||
Finished goods | $ 987 | $ 1,033 | |||||
Work-in-process and production
materials |
2,435 | 2,712 | |||||
Total | $ 3,422 | $ 3,745 | |||||
Property, plant and equipment: | |||||||
Land | $ 251 | $ 284 | |||||
Buildings | 5,989 | 6,288 | |||||
Machinery and equipment | 15,608 | 16,316 | |||||
21,848 | 22,888 | ||||||
Less accumulated depreciation | (12,602 | ) | (12,839 | ) | |||
Total | $ 9,246 | $ 10,049 | |||||
Other assets: | |||||||
Equity-based investments in
affiliated companies |
$ 1,149 | $ 931 | |||||
Cost-based investments in
affiliated companies |
1,393 | 1,431 | |||||
Fair value adjustment of certain
cost-based investments |
5,734 | 787 | |||||
Long-term finance receivables | 1,679 | 1,062 | |||||
Other | 1,623 | 937 | |||||
Total | $ 11,578 | $ 5,148 | |||||
Accrued liabilities: | |||||||
Dividends payable | $ 74 | $ 72 | |||||
Contribution to employees profit
sharing funds |
172 | 78 | |||||
Income taxes payable | 8 | 84 | |||||
Taxes other than income taxes | 349 | 302 | |||||
Deferred revenue | 583 | 378 | |||||
Accrued warranties | 326 | 333 | |||||
Compensation | 677 | 548 | |||||
Restructuring and other accruals | 40 | 666 | |||||
Customer reserves | 410 | 422 | |||||
Iridium reserves | 869 | 529 | |||||
Other | 3,389 | 2,814 | |||||
Total | $ 6,897 | $ 6,226 | |||||
December 31 | 1999 | 1998 | |||
---|---|---|---|---|---|
7.5% debentures due 2025 | $ 398 | $ 398 | |||
6.75% debentures due 2004 | 497 | | |||
6.5% debentures due
2025 (redeemable
at the holders option in 2005) |
398 | 397 | |||
7.6% notes due 2007 | 300 | 300 | |||
5.8% debentures due 2008 | 323 | 322 | |||
6.5% debentures due 2008 | 199 | 199 | |||
6.5% debentures due 2028 | 439 | 439 | |||
5.22% debentures due 2097 | 226 | 225 | |||
Zero coupon notes due 2009 | 17 | 24 | |||
Zero coupon notes due 2013 | 80 | 80 | |||
8.4% debentures due
2031 (redeemable
at the holders option in 2001) |
200 | 200 | |||
Other long-term debt | 34 | 57 | |||
3,111 | 2,641 | ||||
Less: Current maturities | 22 | 8 | |||
Long-term debt | $3,089 | $2,633 | |||
|
December 31 | 1999 | 1998 | |||||
---|---|---|---|---|---|---|---|
Notes to banks | $ 142 | $ 157 | |||||
Commercial paper | 2,335 | 2,739 | |||||
Other short-term debt | 5 | 5 | |||||
2,482 | 2,901 | ||||||
Add: Current maturities | 22 | 8 | |||||
Notes payable and
current portion of
long-term debt |
$2,504 | $2,909 | |||||
Weighted average
interest rates on
short-term borrowings |
|||||||
Commercial paper | 5.2 | % | 5.4 | % | |||
Other short-term debt | 6.3 | % | 8.0 | % | |||
|
Buy
(Sell) |
|||||||
---|---|---|---|---|---|---|---|
December 31 | 1999 | 1998 | |||||
Japanese Yen | $(1,780 | ) | $(674 | ) | |||
Euro | (580 | ) | (566 | ) | |||
Chinese Renminbi | (460 | ) | (100 | ) | |||
British Pound | 230 | (137 | ) | ||||
Taiwan Dollar | (132 | ) | (102 | ) | |||
|
Years ended December 31 | 1999 | 1998 | 1997 | ||||||
---|---|---|---|---|---|---|---|---|---|
United States | $ (547 | ) | $(2,262 | ) | $ 307 | ||||
Other nations | 1,715 | 888 | 1,509 | ||||||
Total | $1,168 | $(1,374 | ) | $1,816 | |||||
Years ended December 31 | 1999 | 1998 | 1997 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Current: | ||||||||||
United States | $423 | $ 40 | $416 | |||||||
Other nations | 252 | 472 | 234 | |||||||
State (U.S.) | 91 | 9 | 89 | |||||||
766 | 521 | 739 | ||||||||
Deferred | (415 | ) | (933 | ) | (103 | ) | ||||
Income tax provision (benefit) | $351 | $(412 | ) | $636 | ||||||
Years ended December 31 | 1999 | 1998 | 1997 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Income tax expense
(benefit) at
statutory rate |
$409 | $(481 | ) | $636 | ||||||
Taxes on non-U.S. earnings | 172 | 186 | 67 | |||||||
State income taxes | (52 | ) | (122 | ) | (1 | ) | ||||
Foreign Sales Corporation | (157 | ) | (80 | ) | (65 | ) | ||||
Non-deductible
acquisition
charges |
19 | 67 | | |||||||
Other | (40 | ) | 18 | (1 | ) | |||||
Income tax provision (benefit) | $351 | $(412 | ) | $636 | ||||||
December 31 | 1999 | 1998 | |||||
---|---|---|---|---|---|---|---|
Inventory reserves | $ 740 | $ 612 | |||||
Contract accounting methods | 86 | 226 | |||||
Employee benefits | 398 | 179 | |||||
Capitalized items | 207 | 223 | |||||
Tax basis differences on investments | (116 | ) | (83 | ) | |||
Depreciation | (249 | ) | (277 | ) | |||
Undistributed non-U.S. earnings | (1,071 | ) | (636 | ) | |||
Restructuring reserves | 2 | 271 | |||||
Tax carryforwards | 397 | 397 | |||||
Cost-based investment mark-to-market | (2,265 | ) | (311 | ) | |||
Iridium reserves | 650 | 257 | |||||
Other | 902 | 316 | |||||
Net deferred tax asset (liability) | $ (319 | ) | $1,174 | ||||
1999 | 1998 | ||||
---|---|---|---|---|---|
Discount rate for obligations | 7.75% | 7.00% | |||
Future compensation increase rate | 4.50% | 4.00% | |||
Investment return assumption (regular) | 9.00% | 9.00% | |||
Investment return
assumption (elected
officers) |
6.00% | 6.00% | |||
1999 | 1998 | 1997 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Service cost | $191 | $176 | $157 | |||||||
Interest cost | 196 | 174 | 146 | |||||||
Expected return on plan assets | (240 | ) | (205 | ) | (166 | ) | ||||
Amortization of
unrecognized net
asset |
| (11 | ) | (11 | ) | |||||
Net periodic pension cost | $147 | $134 | $126 | |||||||
1999 | 1998 | 1997 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Service cost | $33 | $22 | $22 | |||||||
Interest cost | 15 | 11 | 11 | |||||||
Expected return on plan assets | (5 | ) | (5 | ) | (3 | ) | ||||
Amortization of: | ||||||||||
Unrecognized net loss | 13 | 8 | 5 | |||||||
Unrecognized prior service cost | 2 | 6 | 6 | |||||||
Unrecognized net obligation | 1 | 1 | 1 | |||||||
Settlement expense | 9 | 7 | 4 | |||||||
Net periodic pension cost | $68 | $50 | $46 | |||||||
|
1999 |
1998 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Regular | Elected
Officers And MSPP |
Regular | Elected
Officers and MSPP |
||||||||||
Change in benefit obligation | |||||||||||||
Benefit obligation at January 1 | $2,868 | $174 | $2,165 | $156 | |||||||||
Service cost | 191 | 34 | 176 | 23 | |||||||||
Interest cost | 196 | 16 | 174 | 12 | |||||||||
Divestitures | (86 | ) | | | | ||||||||
Actuarial (gain) loss | (361 | ) | 58 | 398 | 26 | ||||||||
Benefit payments | (67 | ) | (35 | ) | (45 | ) | (43 | ) | |||||
Benefit obligation at December 31 | $2,741 | $247 | $2,868 | $174 | |||||||||
Change in plan assets | |||||||||||||
Fair value at January 1 | $3,086 | $142 | $2,493 | $113 | |||||||||
Actual return on plan assets | 505 | 2 | 508 | 9 | |||||||||
Company contributions | 110 | 50 | 130 | 63 | |||||||||
Divestitures | (76 | ) | | | | ||||||||
Benefit payments | (67 | ) | (35 | ) | (45 | ) | (43 | ) | |||||
Fair value at December 31 | $3,558 | $159 | $3,086 | $142 | |||||||||
Funded status of the plan | 817 | (88 | ) | 218 | (32 | ) | |||||||
Unrecognized net (gain) loss | (829 | ) | 158 | (193 | ) | 99 | |||||||
Unrecognized prior service cost | | 10 | | 12 | |||||||||
Unrecognized net transition (asset) liability | | 1 | | 2 | |||||||||
Prepaid (accrued) pension cost recognized in balance sheet | $ (12 | ) | $ 81 | $ 25 | $ 81 | ||||||||
1999 |
1998 |
||||||||||||
Regular | Elected
Officers And MSPP |
Regular | Elected
Officers and MSPP |
||||||||||
Components of prepaid (accrued) pension cost recognized in balance sheet: | |||||||||||||
Prepaid benefit cost | $ | $ | $ 25 | $ 90 | |||||||||
Intangible asset | | 9 | | 4 | |||||||||
Accrued benefit liability | (12 | ) | (50 | ) | | (13 | ) | ||||||
Deferred income taxes | | 49 | | | |||||||||
Non-owner changes to equity | | 73 | | | |||||||||
Total recognized prepaid (accrued) pension cost | $ (12 | ) | $ 81 | $ 25 | $ 81 | ||||||||
1999 | 1998 | ||||
---|---|---|---|---|---|
Discount rate for obligations | 7.75% | 7.00% | |||
Investment return assumptions | 9.00% | 9.00% | |||
1999 | 1998 | 1997 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Service cost | $17 | $14 | $13 | |||||||
Interest cost | 37 | 32 | 29 | |||||||
Expected return on plan assets | (26 | ) | (22 | ) | (16 | ) | ||||
Amortization of
unrecognized net
loss |
5 | 2 | 3 | |||||||
Net retiree health care expense | $33 | $26 | $29 | |||||||
|
1999 | 1998 | ||||||
---|---|---|---|---|---|---|---|
Change in benefit obligation | |||||||
Benefit obligation at January 1 | $493 | $413 | |||||
Service cost | 17 | 14 | |||||
Interest cost | 37 | 32 | |||||
Divestitures | (5 | ) | | ||||
Actuarial (gain) loss | 7 | 49 | |||||
Benefit payments | (23 | ) | (15 | ) | |||
Other payments | (5 | ) | | ||||
Benefit obligation at December 31 | $521 | $493 | |||||
Change in plan assets | |||||||
Fair value at January 1 | $328 | $263 | |||||
Actual return on plan assets | 53 | 54 | |||||
Company contributions | 31 | 26 | |||||
Benefit payments | (23 | ) | (15 | ) | |||
Fair value at December 31 | $389 | $328 | |||||
Funded status of the plan | (132 | ) | (165 | ) | |||
Unrecognized net loss | 28 | 55 | |||||
Unrecognized prior service cost | | (1 | ) | ||||
Liability
recognized in balance
sheet |
$(104 | ) | $(111 | ) | |||
1% Point
Increase |
1% Point
Decrease |
|||||
---|---|---|---|---|---|---|
Effect on: | ||||||
Accumulated postretirement
benefit obligation |
$34 | $(53 | ) | |||
Net retiree health care expense | 4 | (7 | ) | |||
percentages of pretax earnings, as defined, from those
operations. Company contributions during 1999, 1998 and 1997 were $72 million, $71 million and $108 million,
respectively.
|
1999 | 1998 | 1997 | ||||||
---|---|---|---|---|---|---|---|---|
Net earnings (loss) | ||||||||
As reported | $817 | $ (962 | ) | $1,180 | ||||
Pro forma | $809 | $(1,072 | ) | $1,114 | ||||
Basic earnings
(loss) per
common share |
||||||||
As reported | $1.35 | $ (1.61 | ) | $ 1.98 | ||||
Pro forma | $1.33 | $ (1.79 | ) | $ 1.87 | ||||
Diluted earnings
(loss) per
common share |
||||||||
As reported | $1.31 | $ (1.61 | ) | $ 1.94 | ||||
Pro forma | $1.30 | $ (1.79 | ) | $ 1.83 | ||||
1999 | 1998 | 1997 | |||||
---|---|---|---|---|---|---|---|
Risk-free interest rate | 5.53% | 4.52% | 5.71% | ||||
Dividend yield | 0.56% | 0.80% | 0.77% | ||||
Expected volatility | 33.63% | 31.33% | 29.83% | ||||
Expected life in years | 5 | 5 | 5 | ||||
Per option fair value | $33 | $18 | $16 | ||||
(in thousands,
except exercise price
and employee data) |
1999 |
1998 |
1997 |
|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares
subject to options |
Wtd. avg.
exercise price |
Shares
subject to options |
Wtd. avg.
exercise price |
Shares
subject to options |
Wtd. avg.
exercise price |
|||||||||||
Options outstanding at January 1 | 41,650 | $49 | 33,273 | $46 | 30,646 | $39 | ||||||||||
Additional options granted | 1,125 | $87 | 10,380 | $54 | 6,862 | $65 | ||||||||||
Options exercised | (11,162 | ) | $42 | (1,703 | ) | $24 | (3,867 | ) | $27 | |||||||
Options terminated, cancelled or expired | (320 | ) | $53 | (300 | ) | $59 | (368 | ) | $49 | |||||||
Options outstanding at December 31 | 31,293 | $52 | 41,650 | $49 | 33,273 | $46 | ||||||||||
Options exercisable at December 31 | 26,197 | $50 | 30,778 | $47 | 26,131 | $41 | ||||||||||
Approx. number of employees granted options | 1,500 | 16,100 | 14,800 | |||||||||||||
Exercise price range: | Options
Outstanding |
Options
Exercisable |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
No. of
options |
Wtd. avg.
exercise price |
Wtd. avg.
contractual life (in yrs.) |
No. of
options |
Wtd. avg.
exercise price |
|||||||
$ 9 $ 15 | 2,250 | $ 14 | 1.6 | 2,250 | $14 | ||||||
$ 16$ 30 | 2,442 | $ 26 | 2.9 | 2,442 | $26 | ||||||
$ 31$ 45 | 1,748 | $ 44 | 4.2 | 1,672 | $44 | ||||||
$ 46$ 60 | 18,819 | $ 55 | 7.4 | 14,995 | $55 | ||||||
$ 61$ 75 | 4,857 | $ 65 | 7.9 | 4,605 | $65 | ||||||
$ 76$ 90 | 961 | $ 85 | 8.8 | 233 | $80 | ||||||
$ 91 $105 | 152 | $ 97 | 9.6 | | $ | ||||||
$106 $120 | 19 | $115 | 9.9 | | $ | ||||||
$121 $135 | 45 | $124 | 9.9 | | $ | ||||||
31,293 | 26,197 | ||||||||||
|
1999 |
1998 |
1997 |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SG
&A |
Cost
of Sales |
1999
Total |
SG
&A |
Cost
of Sales |
1998
Total |
SG
&A |
Cost
of Sales |
1997
Total |
||||||||||||
Special Charges: | ||||||||||||||||||||
Bond Investment wirte-down | $ 157 | $ | $ 157 | $ | $ | $ | $ | $ | $ | |||||||||||
Development & Commercialization
provisions |
1,019 | 806 | 1,825 | | | | | | | |||||||||||
Total Special Charges | $1,176 | $806 | $1,982 | $ | $ | $ | $ | $ | $ | |||||||||||
Other Charges: | ||||||||||||||||||||
Development & Commercialization
provisions |
$ 56 | $ 31 | $ 87 | $ 14 | $81 | $ 95 | $ | $132 | $132 | |||||||||||
Companys share of Iridium net losses | 50 | | 50 | 265 | | 265 | 46 | | 46 | |||||||||||
Total Other Charges | $ 106 | $ 31 | $ 137 | $279 | $81 | $360 | $46 | $132 | $178 | |||||||||||
Total Charges | $1,282 | $837 | $2,119 | $279 | $81 | $360 | $46 | $132 | $178 | |||||||||||
|
Dec. 31,
1999 |
Dec. 31,
1998 |
|||
---|---|---|---|---|
Company Assets: | ||||
Investments: | ||||
Equity investment in Iridium | $ | $ 50 | ||
Bond investment in Iridium | | 157 | ||
Investments in and notes
receivable from Iridium gateway companies |
39 | 56 | ||
Total | $ 39 | $ 263 | ||
Accounts Receivable: | ||||
Operations & Maintenance
contract |
||||
Deferred amount due to
Company |
$ 400 | $ | ||
Other amounts due to
Company |
179 | 176 | ||
$ 579 | $ 176 | |||
Other contracts | 82 | 88 | ||
Total | $ 661 | $ 264 | ||
Company Guarantees and Other: | ||||
Bank Guarantees and Other
Financial Commitments: |
||||
Senior Secured Credit
Agreement Capital Call |
$ 50 | $ 50 | ||
Senior Guaranteed Credit
Agreement |
| 750 | ||
Conditional Commitment to
Provide Guarantee |
See Below | See Below | ||
Total | $ 50 | $ 800 | ||
Contractual
Commitments and
Other Obligations: |
||||
Obligations to subcontractors | $ 85 | $ 109 | ||
Assets as risk and other
estimated potential contractual obligations |
963 | 791 | ||
Total | $ 1,048 | $ 900 | ||
Total Company
Assets and
Guarantees |
$ 1,798 | $ 2,227 | ||
Company
Development and
Commercialzation |
||||
Reserves (See table that follows) | $ 1,798 | $ 649 | ||
|
Dec. 31,
1999 |
Dec. 31,
1998 |
Dec. 31,
1997 |
|||||
---|---|---|---|---|---|---|---|
Development and
Commercialization Reserves |
|||||||
Provisions: | |||||||
Special Charges | $1,825 | $ | $ | ||||
Other Charges | 87 | 95 | 132 | ||||
Total Provisions | $1,912 | $ 95 | $132 | ||||
Amounts Used | |||||||
Payments under
Guaranteed Credit Agreement |
(743 | ) | | | |||
Interim Funding to
Iridium |
(20 | ) | | | |||
Development and
Commercialization Reserves |
$1,798 | $649 | $554 | ||||
programs.
|
investments, the fair value adjustment of certain cost-based investments and the administrative headquarters of the
Company.
|
Years ended December 31 | Net
Sales |
Operating Profit
(Loss) Before Taxes |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1999 | 1998 | 1997 | 1999 | 1998 | 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Personal
Communications
Segment |
$11,932 | $10,132 | $11,026 | $ 608 | 5.1% | $ (373 | ) | (3.7% | ) | $ 1,122 | 10.2% | ||||||||||||||||||||||||||||||||||||||||||||
Network Systems Segment | 6,544 | 7,064 | 6,061 | (479 | ) | (7.3% | ) | 819 | 11.6% | 618 | 10.2% | ||||||||||||||||||||||||||||||||||||||||||||
Commercial,
Government and
Industrial Systems Segment |
4,068 | 4,079 | 4,037 | 609 | 15.0% | 412 | 10.1% | 345 | 8.5% | ||||||||||||||||||||||||||||||||||||||||||||||
Semiconductor
Products
Segment |
7,370 | 7,314 | 8,003 | 619 | 8.4% | (1,225 | ) | (16.7% | ) | 168 | 2.1% | ||||||||||||||||||||||||||||||||||||||||||||
Other Products Segment | 3,736 | 3,623 | 3,855 | (261 | ) | (7.0% | ) | (896 | ) | (24.7% | ) | (318 | ) | (8.2% | ) | ||||||||||||||||||||||||||||||||||||||||
Adjustments and
Eliminations |
(2,719 | ) | (2,814 | ) | (3,188 | ) | (4 | ) | 0.1% | 15 | (0.5% | ) | (48 | ) | 1.5% | ||||||||||||||||||||||||||||||||||||||||
Segment totals | $30,931 | $29,398 | $29,794 | 1,092 | 3.5% | (1,248 | ) | (4.2% | ) | 1,887 | 6.3% | ||||||||||||||||||||||||||||||||||||||||||||
General corporate | 76 | (126 | ) | (71 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (loss) before
income taxes |
$ 1,168 | 3.8% | $(1,374 | ) | (4.7% | ) | $ 1,816 | 6.1% | |||||||||||||||||||||||||||||||||||||||||||||||
Years ended December 31 | Assets |
Capital
Expenditures |
Depreciation
Expense |
||||||||||||||||||||||||||||||||||||||||||||||||||||
1999 | 1998 | 1997 | 1999 | 1998 | 1997 | 1999 | 1998 | 1997 | |||||||||||||||||||||||||||||||||||||||||||||||
Personal
Communications
Segment |
$ 6,411 | $ 5,476 | $ 6,105 | $ 450 | $ 442 | $ 749 | $ 398 | $ 422 | $ 539 | ||||||||||||||||||||||||||||||||||||||||||||||
Network Systems Segment | 7,414 | 6,177 | 4,655 | 262 | 345 | 415 | 260 | 222 | 249 | ||||||||||||||||||||||||||||||||||||||||||||||
Commercial,
Government and
Industrial Systems Segment |
2,509 | 2,110 | 2,102 | 152 | 224 | 180 | 170 | 146 | 161 | ||||||||||||||||||||||||||||||||||||||||||||||
Semiconductor
Products
Segment |
7,872 | 8,232 | 7,947 | 1,505 | 1,783 | 1,153 | 1,131 | 1,178 | 1,169 | ||||||||||||||||||||||||||||||||||||||||||||||
Other Products Segment | 4,117 | 3,393 | 3,062 | 183 | 162 | 111 | 146 | 184 | 163 | ||||||||||||||||||||||||||||||||||||||||||||||
Adjustments and
Eliminations |
(1,396 | ) | (420 | ) | (458 | ) | | | | | | | |||||||||||||||||||||||||||||||||||||||||||
Segment totals | 26,927 | 24,968 | 23,413 | 2,552 | 2,956 | 2,608 | 2,105 | 2,152 | 2,281 | ||||||||||||||||||||||||||||||||||||||||||||||
General corporate | 10,400 | 3,760 | 3,865 | 132 | 265 | 266 | 77 | 45 | 48 | ||||||||||||||||||||||||||||||||||||||||||||||
Consolidated totals | $37,327 | $28,728 | $27,278 | $ 2,684 | $ 3,221 | $ 2,874 | $2,182 | $ 2,197 | $2,329 | ||||||||||||||||||||||||||||||||||||||||||||||
Years ended December 31 | Interest
Income |
Interest
Expense |
Net
Interest |
||||||||||||||||||||||||||||||||||||||||||||||||||||
1999 | 1998 | 1997 | 1999 | 1998 | 1997 | 1999 | 1998 | 1997 | |||||||||||||||||||||||||||||||||||||||||||||||
Personal
Communications
Segment |
$ 17 | $ 21 | $ 21 | $ 61 | $ 73 | $ 48 | $ (44 | ) | $ (52 | ) | $ (27 | ) | |||||||||||||||||||||||||||||||||||||||||||
Network Systems Segment | 1 | | | 30 | 33 | 12 | (29 | ) | (33 | ) | (12 | ) | |||||||||||||||||||||||||||||||||||||||||||
Commercial,
Government and
Industrial Systems Segment |
| 2 | 4 | 15 | 17 | 14 | (15 | ) | (15 | ) | (10 | ) | |||||||||||||||||||||||||||||||||||||||||||
Semiconductor
Products
Segment |
6 | 12 | 12 | 81 | 116 | 71 | (75 | ) | (104 | ) | (59 | ) | |||||||||||||||||||||||||||||||||||||||||||
Other Products Segment | 2 | 6 | 2 | 33 | 30 | 14 | (31 | ) | (24 | ) | (12 | ) | |||||||||||||||||||||||||||||||||||||||||||
Segment totals | 26 | 41 | 39 | 220 | 269 | 159 | (194 | ) | (228 | ) | (120 | ) | |||||||||||||||||||||||||||||||||||||||||||
General corporate | 124 | 44 | 46 | 85 | 32 | 57 | 39 | 12 | (11 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Consolidated totals | $ 150 | $ 85 | $ 85 | $ 305 | $ 301 | $ 216 | $ (155 | ) | $ (216 | ) | $ (131 | ) | |||||||||||||||||||||||||||||||||||||||||||
Geographic area information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Years ended December 31 | Net
Sales |
Assets |
Property,
Plant, and
Equipment, Net |
||||||||||||||||||||||||||||||||||||||||||||||||||||
1999 | 1998 | 1997 | 1999 | 1998 | 1997 | 1999 | 1998 | 1997 | |||||||||||||||||||||||||||||||||||||||||||||||
United States | $19,956 | $20,397 | $21,809 | $14,135 | $14,932 | $14,000 | $5,142 | $ 5,294 | $5,661 | ||||||||||||||||||||||||||||||||||||||||||||||
United Kingdom | 6,221 | 5,709 | 5,254 | 2,186 | 2,083 | 2,098 | 947 | 999 | 887 | ||||||||||||||||||||||||||||||||||||||||||||||
Other nations | 20,686 | 12,812 | 12,778 | 13,244 | 8,804 | 7,966 | 2,638 | 3,221 | 2,901 | ||||||||||||||||||||||||||||||||||||||||||||||
Adjustments and Eliminations | (15,932 | ) | (9,520 | ) | (10,047 | ) | (2,638 | ) | (851 | ) | (651 | ) | (88 | ) | (134 | ) | (111 | ) | |||||||||||||||||||||||||||||||||||||
Geographic totals | $30,931 | $29,398 | $29,794 | 26,927 | 24,968 | 23,413 | 8,639 | 9,380 | 9,338 | ||||||||||||||||||||||||||||||||||||||||||||||
General corporate | 10,400 | 3,760 | 3,865 | 607 | 669 | 518 | |||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated totals | $37,327 | $28,728 | $27,278 | $9,246 | $10,049 | $9,856 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Special
Items |
---|
Years ended December 31 | 1999 | 1998 | 1997 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Income (Expense) | ||||||||||
Personal
Communications
Segment |
||||||||||
Iridium Related | $ (97 | ) | $ | $ | ||||||
Restructuring & Other | 112 | (597 | ) | | ||||||
Sales of Investments and
Businesses |
10 | 118 | 24 | |||||||
In-Process Research and
Development |
(7 | ) | | | ||||||
Miscellaneous | | | (44 | ) | ||||||
18 | (479 | ) | (20 | ) | ||||||
Network Systems Segment | ||||||||||
Iridium Related | $ (1,325 | ) | $ | $ | ||||||
Restructuring & Other | 67 | (159 | ) | | ||||||
In-Process Research and
Development |
(14 | ) | | | ||||||
Miscellaneous | | (8 | ) | | ||||||
(1,272 | ) | (167 | ) | | ||||||
Commercial,
Government and
Industrial Systems Segment |
||||||||||
Iridium Related | $ (8 | ) | $ | $ | ||||||
Restructuring & Other | | (127 | ) | | ||||||
Sales of Investments and
Businesses |
198 | 90 | 10 | |||||||
In-Process Research and
Development |
(4 | ) | | | ||||||
Miscellaneous | | (9 | ) | | ||||||
186 | (46 | ) | 10 | |||||||
Semiconductor
Products
Segment |
||||||||||
Restructuring & Other | $ | $ (731 | ) | $(170 | ) | |||||
Sales of Investments and
Businesses |
373 | | 23 | |||||||
In-Process Research and
Development |
(42 | ) | | | ||||||
Miscellaneous | | (21 | ) | (27 | ) | |||||
331 | (752 | ) | (174 | ) | ||||||
Other Products Segment | ||||||||||
Iridium Related | $ (552 | ) | $ | $ | ||||||
Restructuring & Other | 47 | (366 | ) | (157 | ) | |||||
Sales of Investments and
Businesses |
410 | 38 | 59 | |||||||
In-Process Research and
Development |
| (109 | ) | | ||||||
Miscellaneous | | 18 | 4 | |||||||
(95 | ) | (419 | ) | (94 | ) | |||||
Segment totals | (832 | ) | (1,863 | ) | (278 | ) | ||||
General Corporate | ||||||||||
Sales of Investments and
Businesses |
$ 148 | $ 4 | $ 12 | |||||||
Miscellaneous | | (10 | ) | (40 | ) | |||||
148 | (6 | ) | (28 | ) | ||||||
Total special items | $ (684 | ) | $(1,869 | ) | $(306 | ) | ||||
|
Accruals at
Dec. 31, 1998 |
1999 Amounts
Used |
Fourth
Quarter
1999 Reversals Into Income |
Accruals at
Dec. 31, 1999 |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Consolidation of
manufacturing
operations |
$155 | $(143 | ) | $ | $12 | ||||||
Business exits | 137 | (31 | ) | (102 | ) | 4 | |||||
Employee separations | 187 | (136 | ) | (40 | ) | 11 | |||||
Total restructuring | $479 | $(310 | ) | $(142 | ) | $27 | |||||
Asset impairments and other charges | 161 | (77 | ) | (84 | ) | | |||||
Totals | $640 | $(387 | ) | $(226 | ) | $27 | |||||
Second
Quarter 1998 Initial Charges |
1998
Reclassifi- cations |
Initial Charges
As Adjusted |
1998 Amounts
Used |
Accruals at
Dec 31, 1998 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Consolidation of
manufacturing
operations |
$ 361 | $ (35 | ) | $ 326 | $ (171 | ) | $155 | ||||||
Business exits | 453 | (162 | ) | 291 | (154 | ) | 137 | ||||||
Employee separations | 461 | 197 | 658 | (471 | ) | 187 | |||||||
Total restructuring | $1,275 | $ | $1,275 | $ (796 | ) | $479 | |||||||
Asset impairments and other charges | 705 | | 705 | (544 | ) | 161 | |||||||
Totals | $1,980 | $ | $1,980 | $(1,340 | ) | $640 | |||||||
December 31, 1999, represent cash payments to be made by the end of the first quarter of 2000.
|
Restructuring
Charges |
Other
Charges |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Segment | Consol of
mfg. ops. |
Business
exits |
Employee
separations |
Asset
Impair- ments |
Other | Total | ||||||
Personal Communications | $113 | $ 38 | $149 | $175 | $122 | $ 597 | ||||||
Network Systems | 11 | | 44 | | 104 | 159 | ||||||
Commercial,
Government and
Industrial Systems |
18 | | 104 | 5 | | 127 | ||||||
Semiconductor Products | 163 | 101 | 282 | 159 | 26 | 731 | ||||||
Other Products | 21 | 152 | 79 | 41 | 73 | 366 | ||||||
Total | $326 | $291 | $658 | $380 | $325 | $1,980 | ||||||
|
December 31, 1999, for this restructuring category relates to the payment of final shut down costs for these actions, expected to occur early in 2000.
intangibles were based on prevailing market conditions. The
intangibles were patents, communication frequencies and licenses, and goodwill related to the Personal Communications segment.
|
Accruals
at Dec. 31, 1998 |
Adjust-
ments |
Amounts
Used |
Accruals
at Dec. 31, 1999 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Q2 1997: | Semiconductor Products Segment | ||||||||||||
Exit from DRAM market | $ 8 | $(3 | ) | $(5 | ) | $ | |||||||
Q3 1997: | Other Products Segment | ||||||||||||
Exit from
MacOS-compatible
computer systems business |
15 |
|
(2 |
) |
13 |
||||||||
Q4 1997: | Former
Messaging, Information and
Media Products Segment |
||||||||||||
Exit from retail analog modem business | 3 | (3 | ) | | | ||||||||
Grand Total | $26 | $(6 | ) | $(7 | ) | $13 | |||||||
1997
Initial charges |
Adjust-
ments |
Amounts
Used |
Accruals
at Dec. 31, 1997 |
Adjust-
ments |
Amounts
Used |
Accruals
at Dec. 31, 1998 |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Q2 1997: | Semiconductor
Products Segment
Exit from DRAM market |
$170 | $(9 | ) | $(131 | ) | $ 30 | $(12 | ) | $ (10 | ) | $ 8 | |||||||||
Q3 1997: | Other Products
Segment
Exit from MacOS-compatible computer systems business |
95 | | (28 | ) | 67 | (10 | ) | (42 | ) | 15 | ||||||||||
Q4 1997: | Former
Messaging, Information and
Media Products Segment Exit from retail analog modem business |
62 | | | 62 | | (59 | ) | 3 | ||||||||||||
Grand Total | $327 | $(9 | ) | $(159 | ) | $159 | $(22 | ) | $(111 | ) | $26 | ||||||||||
(in millions) | Quarter
Acquired/Disposed |
Consideration | Form of
Consideration |
In-Process
Research and Development Charge |
|||||
---|---|---|---|---|---|---|---|---|---|
Acquisitions: | |||||||||
Digianswer A/S | Q4 1999 | $ 45 | Cash | $14 | |||||
Assumed Liabilities | |||||||||
Software Corporation of America, Inc. | Q4 1999 | $ 28 | Cash | $ 4 | |||||
Metrowerks, Inc. | Q3 1999 | $ 98 | Cash | $35 | |||||
Bosch Telecom,
Inc./SpectraPoint Wireless
LLC |
Q3 1999 | $ 45 | Cash | $14 | |||||
Dispositions: | |||||||||
Semiconductor Components Group | Q3 1999 | $1,600 | Cash | Not Applicable | |||||
Notes | |||||||||
Common Stock | |||||||||
North American Antenna Sites | Q3 1999 | $ 255 | Cash | Not Applicable | |||||
Common Stock | |||||||||
Component Products Group | Q1 1999 | $ 136 | Cash | Not Applicable | |||||
Transfer of Debt | |||||||||
|
(in millions) | Quarter
Acquired |
Consideration | Form of Consideration | In-Process
Research and Development Charge |
|||||
---|---|---|---|---|---|---|---|---|---|
Appeal Telecom Comp., Ltd. | Q4 1998 | $ 49 | Cash | $ 16 | |||||
Starfish Software, Inc. | Q3 1998 | $253 | Cash | $109 | |||||
Common Stock | |||||||||
Assumed Options and Liabilities | |||||||||
NetSpeak Corp. | Q2 1998 | $ 82 | Cash | $ 42 | |||||
Years Ended
December 31 |
|||||||||
---|---|---|---|---|---|---|---|---|---|
(In millions, except per share amounts) | 1999 | 1998 | 1997 | ||||||
NET SALES | $33,075 | $31,340 | $31,498 | ||||||
COSTS AND EXPENSES | |||||||||
Manufacturing and other costs of sales | 20,631 | 19,396 | 18,532 | ||||||
Selling, general and administrative expenses | 5,446 | 5,656 | 5,373 | ||||||
Restructuring and other charges | (226 | ) | 1,980 | 327 | |||||
Research and development expenditures | 3,560 | 3,118 | 2,930 | ||||||
Depreciation expense | 2,243 | 2,255 | 2,394 | ||||||
Interest expense, net | 138 | 215 | 136 | ||||||
TOTAL COSTS AND EXPENSES | 31,792 | 32,620 | 29,692 | ||||||
EARNINGS (LOSS) BEFORE INCOME TAXES | 1,283 | (1,280 | ) | 1,806 | |||||
INCOME TAX PROVISION (BENEFIT) | 392 | (373 | ) | 642 | |||||
NET EARNINGS (LOSS) | $ 891 | $ (907 | ) | $ 1,164 | |||||
BASIC EARNINGS (LOSS) PER COMMON SHARE | $ 1.26 | $ (1.31 | ) | $ 1.71 | |||||
DILUTED EARNINGS (LOSS) PER COMMON SHARE | $ 1.22 | $ (1.31 | ) | $ 1.67 | |||||
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 706.5 | 690.3 | 680.3 | ||||||
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 734.0 | 690.3 | 697.6 | ||||||
|
December
31 |
|||||
---|---|---|---|---|---|
(In millions, except per share amounts) | 1999 | 1998 | |||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ 3,537 | $ 1,602 | |||
Short-term investments | 699 | 171 | |||
Accounts receivable, net | 5,627 | 5,393 | |||
Inventories | 3,707 | 4,026 | |||
Deferred income taxes | 3,247 | 2,463 | |||
Other current assets | 768 | 766 | |||
Total current assets | 17,585 | 14,421 | |||
Property, plant and equipment, net | 9,591 | 10,286 | |||
Other assets | 13,313 | 6,244 | |||
TOTAL ASSETS | $40,489 | $30,951 | |||
LIABILITIES AND STOCKHOLDERS EQUITY | |||||
Current liabilities | |||||
Notes payable and current portion of long-term debt | $ 2,504 | $ 2,909 | |||
Accounts payable | 3,285 | 2,568 | |||
Accrued liabilities | 7,117 | 6,412 | |||
Total current liabilities | 12,906 | 11,889 | |||
Long-term debt | 3,089 | 2,633 | |||
Deferred income taxes | 3,719 | 1,203 | |||
Other liabilities | 1,598 | 1,313 | |||
Company-obligated
mandatorily redeemable preferred
securities of subsidiary trust holding solely company guaranteed debentures |
484 | | |||
Stockholders equity | |||||
Preferred stock, $100 par value issuable in series | | | |||
Common stock, $3 par value | 2,140 | 2,095 | |||
Additional paid-in capital | 4,145 | 3,255 | |||
Retained earnings | 8,890 | 8,290 | |||
Non-owner changes to equity | 3,518 | 273 | |||
Total stockholders equity | 18,693 | 13,913 | |||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | $40,489 | $30,951 | |||
|
|
Years ended December 31 | 1999 | 1998 | 1997 | 1996 | 1995 | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Operating | Net sales | $30,931 | $29,398 | $29,794 | $27,973 | $27,037 | ||||||||||||
Results | Manufacturing and other costs of sales | 19,169 | 18,043 | 17,283 | 16,610 | 15,361 | ||||||||||||
Selling, general and administrative expenses | 5,045 | 5,443 | 5,160 | 4,701 | 4,629 | |||||||||||||
Restructuring and other charges | (226 | ) | 1,980 | 327 | | | ||||||||||||
Research and development expenditures | 3,438 | 2,893 | 2,748 | 2,394 | 2,197 | |||||||||||||
Depreciation expense | 2,182 | 2,197 | 2,329 | 2,308 | 1,919 | |||||||||||||
Interest expense, net | 155 | 216 | 131 | 185 | 149 | |||||||||||||
Total costs and expenses | 29,763 | 30,772 | 27,978 | 26,198 | 24,255 | |||||||||||||
Net gain on Nextel asset exchange | | | | | 443 | |||||||||||||
Earnings (loss) before income taxes | 1,168 | (1,374 | ) | 1,816 | 1,775 | 3,225 | ||||||||||||
Income tax provision (benefit) | 351 | (412 | ) | 636 | 621 | 1,177 | ||||||||||||
Net earnings (loss) | $ 817 | $ (962 | ) | $ 1,180 | $ 1,154 | $ 2,048 | ||||||||||||
Net earnings (loss) as a percent of sales | 2.6 | % | (3.3 | )% | 4.0 | % | 4.1 | % | 7.6 | % | ||||||||
Per Share | Diluted earnings (loss) per common share | $ 1.31 | $ (1.61 | ) | $ 1.94 | $ 1.90 | $ 3.37 | |||||||||||
Data | Diluted weighted average common shares outstanding | 624.7 | 598.6 | 612.2 | 609.0 | 609.7 | ||||||||||||
Dividends declared | $ 0.480 | $ 0.480 | $ 0.480 | $ 0.460 | $ 0.400 | |||||||||||||
Balance | Total assets | $37,327 | $28,728 | $27,278 | $24,076 | $22,738 | ||||||||||||
Sheet | Working capital | 4,087 | 2,091 | 4,181 | 3,324 | 2,717 | ||||||||||||
Long-term debt and redeemable preferred securities | 3,573 | 2,633 | 2,144 | 1,931 | 1,949 | |||||||||||||
Total debt and redeemable preferred securities | 6,077 | 5,542 | 3,426 | 3,313 | 3,554 | |||||||||||||
Total stockholders equity | $16,344 | $12,222 | $13,272 | $11,795 | $10,985 | |||||||||||||
Other Data | Current ratio | 1.33 | 1.18 | 1.46 | 1.42 | 1.35 | ||||||||||||
Return on average invested capital | 5.5 | % | (6.2 | )% | 8.4 | % | 8.4 | % | 16.7 | % | ||||||||
Return on average stockholders equity | 5.9 | % | (7.6 | )% | 9.4 | % | 10.0 | % | 20.2 | % | ||||||||
Capital expenditures | $ 2,684 | $ 3,221 | $ 2,874 | $ 2,973 | $ 4,225 | |||||||||||||
% to sales | 8.7 | % | 11.0 | % | 9.6 | % | 10.6 | % | 15.6 | % | ||||||||
Research and development expenditures | $ 3,438 | $ 2,893 | $ 2,748 | $ 2,394 | $ 2,197 | |||||||||||||
% to sales | 11.1 | % | 9.8 | % | 9.2 | % | 8.6 | % | 8.1 | % | ||||||||
Year-end employment (in thousands) | 121 | 133 | 150 | 139 | 142 | |||||||||||||
1999 | 1998 | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1st | 2nd | 3rd | 4th | 1st | 2nd | 3rd | 4th | ||||||||||||||||||||
Operating | Net sales | $7,232 | $7,513 | $ 7,688 | $ 8,498 | $6,886 | $ 7,023 | $7,152 | $8,337 | ||||||||||||||||||
Results | Gross profit | 2,980 | 3,124 | 2,766 | 2,892 | 2,759 | 2,705 | 2,721 | 3,170 | ||||||||||||||||||
Net earnings (loss) | 171 | 206 | 91 | 349 | 180 | (1,328 | ) | 27 | 159 | ||||||||||||||||||
Net earnings
(loss) as a
percent of sales |
2.4 | % | 2.7 | % | 1.2 | % | 4.1 | % | 2.6 | % | (18.9 | )% | 0.4 | % | 1.9 | % | |||||||||||
Per Share
Data |
Basic earnings
(loss) per
common share |
$ 0.28 | $ 0.35 | $ 0.14 | $ 0.58 | $ 0.30 | $ (2.22 | ) | $ 0.05 | $ 0.26 | |||||||||||||||||
(in dollars) | Diluted earnings
(loss) per
common share |
$ 0.28 | $ 0.33 | $ 0.14 | $ 0.56 | $ 0.30 | $ (2.22 | ) | $ 0.04 | $ 0.26 | |||||||||||||||||
Dividends declared | $0.120 | $0.120 | $ 0.120 | $ 0.120 | $0.120 | $ 0.120 | $0.120 | $0.120 | |||||||||||||||||||
Dividends paid | $0.120 | $0.120 | $ 0.120 | $ 0.120 | $0.120 | $ 0.120 | $0.120 | $0.120 | |||||||||||||||||||
Stock prices | |||||||||||||||||||||||||||
High | $77.38 | $99.13 | $101.50 | $149.50 | $65.88 | $ 61.63 | $55.00 | $64.31 | |||||||||||||||||||
Low | $62.56 | $73.75 | $ 82.00 | $ 85.00 | $52.00 | $ 48.19 | $39.88 | $38.38 | |||||||||||||||||||
The number of
stockholders of record of Motorola common stock on January 31, 2000 was
49,984.
|
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__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
__ __ __ __ __ __ __ __ __ __
__ __ __ __ __ __ __
[MOTOROLA
LOGO]
2000
P
R
O
X
Y
1800 E. Golf Road, Schaumburg, Illinois 60173, (847) 605-1234
[MAP]
PLEASE MARK VOTE IN OVAL
IN THE FOLLOWING MANNER USING DARK INK ONLY.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW, FOR PROPOSAL 2 AND FOR PROPOSAL 3. |
1. | Election of Directors
Nominees: 01 R. Chan, 02 H. Fuller, 03 C. Galvin, 04 R. Galvin, 05 R. Growney, 06 A. Jones, 07 J. Lewent, 08 W. Massey, 09 N. Negroponte, 10 J. Pepper, Jr., 11 S. Scott III, 12 G. Tooker, 13 B. West, 14 J. White (Except nominee(s) written above) |
For
All
[_] |
Withheld
All
[_] |
For All
Except
[_] |
2. | Approval of Increase in Authorized Common Stock | For
[_] |
Against
[_] |
Abstain
[_] |
3. | Adoption of the Motorola Omnibus Incentive Plan of 2000 | For
[_] |
Against
[_] |
Abstain
[_] |
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Signature Date |
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Signature if jointly held Date |
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[___] | Please vote, date, sign
and mail promptly this proxy in the enclosed envelope. When there is more
than one owner, each should sign. When signing as an attorney,
administrator, executor, guardian or trustee, please add your title as
such. If executed by a corporation, the full corporation name should be
given, and this proxy should be signed by a duly authorized officer,
showing his or her title.
Do not mail future Summary Annual Reports for this account. Another is received at this household. |
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IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET PLEASE SEE INSTRUCTION CARD BELOW |
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Enter your
6-digit Control Number found in the box above.
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Press 1 to vote
FOR the recommendations of the Board of Directors, or press 9 if you
do not wish to vote for the recommendations of the Board of
Directors.
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Press 1 if you
receive more than one Summary Annual Report in your household and do not
wish to receive a Summary Annual Report on this account.
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[LOGO OF MOTOROLA]
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