Motorola 2004 Annual Report Download - page 39

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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 7: Management's Discussion and Analysis of Financial Condition and Results of
Operations
The following is a discussion and analysis of our Ñnancial position and results of operations for each of the
three years in the period ended December 31, 2004. This commentary should be read in conjunction with our
consolidated Ñnancial statements and the notes thereto which appear beginning on page 84 under ""Item 8: Financial
Statements and Supplementary Data.''
Executive Overview
What businesses are we in?
Motorola reports six segments as described below.
The Personal Communications segment (""PCS'') designs, manufactures, sells and services wireless handsets
with integrated software and accessory products. PCS's net sales in 2004 were $16.8 billion, representing 54% of the
Company's consolidated net sales.
The Global Telecom Solutions segment (""GTSS'') designs, manufactures, sells, installs and services wireless
infrastructure communication systems, including hardware and software. GTSS provides end-to-end wireless
networks, including radio base stations, base site controllers, associated software and services, mobility soft
switching, application platforms and third-party switching for CDMA, GSM, iDEN» and UMTS. GTSS's net sales in
2004 were $5.5 billion, representing 17% of the Company's consolidated net sales.
The Commercial, Government and Industrial Solutions segment (""CGISS'') designs, manufactures, sells,
installs and services analog and digital two-way radio, voice and data communications products and systems to a
wide range of public-safety, government, utility, courier, transportation and other worldwide markets. The business
continues to invest in the market for broadband data, including infrastructure, devices, service and applications. In
addition, the segment participates in the expanding market for integrated information management, mobile and
biometric applications and services. CGISS's net sales in 2004 were $4.6 billion, representing 15% of the Company's
consolidated net sales.
The Integrated Electronic Systems segment (""IESS'') designs, manufactures and sells: (i) automotive and
industrial electronics systems, (ii) telematics systems that enable automated roadside assistance, navigation and
advanced safety features for automobiles, (iii) portable energy storage products and systems, and (iv) embedded
computing systems. IESS's net sales in 2004 were $2.7 billion, representing 9% of the Company's consolidated net
sales.
The Broadband Communications segment (""BCS'') designs, manufactures and sells a wide variety of
broadband products, including: (i) digital systems and set-top terminals for cable television and broadcast
networks, (ii) high speed data products, including cable modems and cable modem termination systems, as well as
Internet Protocol-based telephony products, (iii) access network technology, including hybrid Ñber coaxial network
transmission systems and Ñber-to-the-premise transmission systems, used by cable television operators, (iv) digital
satellite television systems, (v) direct-to-home satellite networks and private networks for business communications,
and (vi) high-speed data, video and voice broadband systems over existing phone lines. BCS's net sales in 2004
were $2.3 billion, representing 7% of the Company's consolidated net sales.
The Other Products segment includes: (i) various corporate programs representing developmental businesses
and research and development projects that are not included in any major segment and (ii) Motorola Credit
Corporation, the Company's wholly-owned Ñnance subsidiary. The segment's net sales in 2004 were $387 million,
representing 1% of the Company's consolidated net sales.
In April 2004, the Company separated its semiconductor operations into a separate subsidiary, Freescale
Semiconductor, Inc. (""Freescale Semiconductor''). In July 2004, an initial public oÅering of a minority interest of
approximately 32.5% of Freescale Semiconductor was completed. On December 2, 2004, Motorola completed the
spin-oÅ of Freescale Semiconductor from the Company by distributing its remaining 67.5% equity interest in
Note: When discussing the net sales for each of our six segments, we express the segment's net sales as a percentage of the Company's
consolidated net sales. Because certain of our segments sell products to other Motorola businesses, $963 million of intracompany sales were
eliminated as part of the consolidation process in 2004. As a result, the percentages of consolidated net sales for each of our business segments
sum to greater than 100% of the Company's consolidated net sales.