Motorola 2000 Annual Report Download - page 29

recorded immediately when the transaction is no longer expected to occur. Foreign exchange financial
instruments that hedge investments in foreign subsidiaries are marked-to-market, and the results
are included in stockholders’ equity. Other gains or losses on financial instruments that do not qualify
as hedges are recognized immediately as income or expense.
Use of estimates: The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make certain estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contin-
gent assets and liabilities at the date of financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.
Reclassifications: Certain amounts in prior years’ financial statements and related notes have been
reclassified to conform to the 2000 presentation.
Motorola Credit Corporation
Motorola Credit Corporation (MCC), the Company’s wholly owned finance subsidiary, is engaged
principally in financing long-term commercial receivables arising out of equipment sales made by the
Company to customers throughout the United States and internationally.
MCC’s interest revenue is included in the Company’s consolidated net sales. Interest expense
totaled $153 million in 2000, $72 million in 1999 and $37 million in 1998, and is included in manu-
facturing and other costs of sales.
Long-term finance receivables of $2.6 billion and $1.7 billion (net of allowance for losses on
commercial receivables of $233 million and $292 million, respectively) at December 31, 2000
and 1999, respectively, are included in other assets. As of December 31, 2000, approximately
$1.7 billion of the $2.8 billion in gross
long-term finance receivables relates
to one customer.
The company provides financing
to customers in connection with equip-
ment purchases and for working capital.
At December 31, 2000, the Company
had outstanding unfunded commitments
of $494 million.
Information by segment and geographic region
Beginning with the first quarter of 2000, the Company added two operating segments for financial
reporting purposes. The Broadband Communications Segment combines the operations of General
Instrument Corporation with the Company’s cable modem and telephony business. In addition, the
Integrated Electronic Systems Sector, which was previously included in the Other Products Segment,
is now reported as a separate segment. Historical segment data has been restated to reflect
these changes.
During the third quarter of 2000, the Network Systems Segment changed its name to the Global
Telecom Solutions Segment. This was only a name change, and there have been no changes to the
financial information.
Summary financial data of Motorola Credit Corporation
Dollars in millions 2000 1999 1998
Total revenue $÷«265 $÷«159 $÷÷«72
Net earnings 147 53 21
Total assets 2,844 2,015 1,152
Total liabilities 2,417 1,768 977
Total stockholders’ equity 427 247 175
MOTOROLA, INC. AND SUBSIDIARIES 27
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