q2 2008 motorola, inc. earnings conference call presentation
TRANSCRIPT
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
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Motorola Q2 2008 Motorola Q2 2008 Earnings Conference CallEarnings Conference Call
July 31, 2008July 31, 2008
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
Slide - 2
Dean LindrothDean LindrothInvestor Relations OfficerInvestor Relations Officer
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 3
Safe HarborSafe HarborA number of forward-looking statements will be made during this presentation. Forward-looking statements are any statements that are not historical facts. These forward-looking statements are based on the current expectations of Motorola and there can be no assurance that such expectations will prove to be correct. Because forward-looking statements involve risks and uncertainties, Motorola’s actual results could differ materially from these statements. Information about factors that could cause, and in some cases have caused, such differences can be found in this morning’s press release, on pages 18 through 27 in item 1A of Motorola’s 2007 Annual Report on Form 10-K and in Motorola’s other SEC filings.
This presentation is being made on the 31st of July 2008. The content of this presentation contains time-sensitive information that is accurate only as of the time hereof. If any portion of this presentation is rebroadcast, retransmitted or redistributed at a later date, Motorola will not be reviewing or updating the material that is contained herein.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2008
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
Slide - 4
Greg BrownGreg BrownPresident andPresident and
Chief Executive OfficerChief Executive Officer
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
Slide - 5
Q2 2008 Q2 2008 Earnings CallEarnings Call
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. .
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Paul Paul LiskaLiskaChief Financial OfficerChief Financial Officer
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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Q2 2008 Financial ResultsQ2 2008 Financial Results($ in Millions) Q2 Q1 Q2GAAP 2008 2008 2007
Sales 8,082$ 7,448$ 8,732$
Operating Earnings (Loss) 5$ (269)$ (158)$
Operating Margin 0.1% -3.6% -1.8%
Earnings (Loss) from Continuing Operations 4$ (194)$ (38)$
EPS from Continuing Operations 0.00$ (0.09)$ (0.02)$
Excluding Highlighted Items
Operating Earnings (Loss) 82$ (140)$ (32)$
Operating Margin 1.0% -1.9% -0.4%
Earnings (Loss) from Continuing Operations 53$ (104)$ 41$
EPS from Continuing Operations 0.02$ (0.05)$ 0.02$
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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Cash Flow and Net CashCash Flow and Net CashQ2 Q1 Q2
($ in Millions) 2008 2008 2007
Earnings (Loss) from Continuing Operations 4$ (194)$ (38)$
Depreciation, Amortization, Deferred Income Taxes and Other, net 186 (16) 132
Change in Assets and Liabilities, net 14 (133) (129)
Net Cash provided by (used for) Operating Activities 204$ (343)$ (35)$
($ in Billions)
Cash* 7.8$ 7.7$ 8.7$
Short-term & Current Debt** (0.2) (0.2) (1.8)
Long-Term Debt (4.0) (4.0) (2.6)
Total Debt (4.2) (4.2) (4.4)
Net Cash 3.6$ 3.5$ 4.3$
*Cash and cash equivalents, Sigma Fund (current and non-current) and Short-term investments**Notes payable and current portion of long-term debt
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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Mobile Devices FinancialsMobile Devices Financials($ in Millions) Q2 Q1 Q2GAAP 2008 2008 2007
Sales 3,334$ 3,299$ 4,273$
Operating Loss (346)$ (418)$ (332)$
Operating Margin -10.4% -12.7% -7.8%
Excluding Highlighted Items
Operating Loss (340)$ (347)$ (264)$
Operating Margin -10.2% -10.5% -6.2%
Units (M) 28.1 27.4 35.5
Market Share (Estimate) 9.5% 9.5% 13.5%
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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Everyday Communications Feature Multimedia/Music Multitask
Portfolio SegmentationPortfolio Segmentation
W175 / W175 / W180W180
A810A810
W375W375
A1800A1800
Z10Z10
Q9hQ9h
Q9mQ9m
U9U9
W230W230
Z8Z8
E8E8
Q9cQ9cQ9c limeQ9c limeZ9Z9Z6wZ6w
W181W181W161W161
V950V950
Z6tvZ6tv
V9V9
Z6mZ6m
Z6Z6V8V8
W377W377
W156 / W156 / W160W160
W510W510
W5W5
W270W270K1mK1m
i877i877
W362W362
A1600A1600
NEWNEW
W755W755
NEWNEW
NEWNEW
W260W260
NEWNEW
NEWNEW NEWNEW
Q700Q700
ZN5ZN5Z8mZ8m
NEWNEW
NEWNEW
E8E8
NEWNEWNEWNEW
V3sV3sV750V750
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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Home and Networks Mobility FinancialsHome and Networks Mobility Financials
($ in Millions) Q2 Q1 Q2GAAP 2008 2008 2007
Sales 2,738$ 2,383$ 2,564$
Operating Earnings 245$ 153$ 191$
Operating Margin 8.9% 6.4% 7.4%
Excluding Highlighted Items
Operating Earnings 248$ 173$ 207$
Operating Margin 9.1% 7.3% 8.1%
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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Home and Networks Mobility HighlightsHome and Networks Mobility Highlights
• Record Home sales
• Improved operating margin
• Global market leader in digital video solutions
• Leading position in GPON
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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Enterprise Mobility Solutions FinancialsEnterprise Mobility Solutions Financials
($ in Millions) Q2 Q1 Q2GAAP 2008 2008 2007
Sales 2,042$ 1,806$ 1,920$
Operating Earnings 377$ 250$ 303$
Operating Margin 18.5% 13.8% 15.8%
Excluding Highlighted Items
Operating Earnings 380$ 259$ 302$
Operating Margin 18.6% 14.3% 15.7%
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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Enterprise Mobility Solutions HighlightsEnterprise Mobility Solutions Highlights• Strong international demand
• Improved operating margin
• Solid growth from MOTOTRBO product line
• Announced the MC75 and two TETRA radios
• Announced intent to acquire AirDefense
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
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Q&A ParticipantsQ&A Participants
Greg BrownPresident and Chief Executive Officer
Paul LiskaChief Financial Officer
Dean LindrothInvestor Relations Officer
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 16
Safe HarborSafe HarborA number of forward-looking statements will be made during this presentation. Forward-looking statements are any statements that are not historical facts. These forward-looking statements are based on the current expectations of Motorola and there can be no assurance that such expectations will prove to be correct. Because forward-looking statements involve risks and uncertainties, Motorola’s actual results could differ materially from these statements. Information about factors that could cause, and in some cases have caused, such differences can be found in this morning’s press release, on pages 18 through 27 in item 1A of Motorola’s 2007 Annual Report on Form 10-K and in Motorola’s other SEC filings.
This presentation is being made on the 31st of July 2008. The content of this presentation contains time-sensitive information that is accurate only as of the time hereof. If any portion of this presentation is rebroadcast, retransmitted or redistributed at a later date, Motorola will not be reviewing or updating the material that is contained herein.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2008
Q2 2008 Earnings Release- July 31, 2008MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office.
Slide -- 17
Use of NonUse of Non--GAAP MeasuresGAAP MeasuresIn addition to the GAAP results provided during this conference call, Motorola has presented certain non-GAAP measurements. Motorola has provided these non-GAAP measurements as a measure to help investors better understand its core operating performance, enhance comparisons of Motorola’s core operating performance from period to period and to allow better comparisons of Motorola’s operating performance to that of its competitors. Among other things, the Company’s management uses these operating results, excluding the identified items, to evaluate the performance of its businesses and to evaluate results relative to incentive compensation targets. Management uses operating results excluding these items because they believe this measure enables them to make better period-to-period evaluations of the financial performance of its core business operations. There are inherent limitations in the use of operating results excluding these items because the company’s GAAP results do not include the impact of these items. The non-GAAP measures are intended only as a supplement to the comparable GAAP measures and the company compensates for the limitations inherent in the use of non-GAAP measures by using GAAP measures in conjunction with the non-GAAP measures. As a result, investors should consider these non-GAAP measures in addition to, and not in substitution for, or as superior to, measures of financial performance prepared in accordance with GAAP.
Details of these items and reconciliations of the non-GAAP measurements provided during this call to GAAP measurements can be found on Motorola’s website at www.motorola.com/investor.