Ed Gams Sr. VP & Director Investor Relations (847) 576-6873 or Bob Hubberts Manager Investor Relations (847) 576-4995

FOR IMMEDIATE RELEASE January 22, 2002

MOTOROLA REPORTS FOURTH-QUARTER, FULL-YEAR RESULTS

SCHAUMBURG, Ill. - Motorola, Inc. (NYSE:MOT) today reported sales

from ongoing operations, which excludes exited businesses, of $7.3

billion in the fourth quarter of 2001. This is a decrease of 25

percent from $9.8 billion a year earlier. Excluding special items

and exited businesses, the company incurred a net loss of $90

million, or (4) cents per share, compared with net earnings of $362

million, or 16 cents per share, in the year-ago quarter.

Edward Breen, president and chief operating officer, said,

“While the end markets Motorola serves continue to be weak, the

company is making good progress in improving its strategic focus and

in reducing its cost structure. We are particularly pleased with the

improving profitability in the Personal Communications segment. We

are also pleased with the Broadband Communications and Commercial,

Government and Industrial Systems segments’ ability to maintain a

strong level of profitability under current market conditions. We

made great progress in strengthening our balance sheet by generating

$1.9 billion in positive operating cash flow and reducing net debt

by more than one-half, from $7.2 billion to $3.1 billion during

2001. We are confident we are taking the right steps to position the

company to return to the level of profitability that it is capable

of generating as its end markets recover.”

1

In the fourth quarter of 2001, Motorola reported special items

resulting in a net charge of $1.7 billion pre-tax, or $1.1 billion

after-tax. In the fourth quarter of 2000, Motorola reported special

items resulting in a net charge of $113 million pre-tax, or $240

million after-tax. (Details of the special items are presented in a

table preceding the footnotes at the end of this press release.)

Presented on an as reported basis in accordance with generally

accepted accounting principles (GAAP), the company reported fourth-

quarter 2001 sales of $7.3 billion, compared with sales of $10.1

billion a year earlier. The GAAP net loss was $1.2 billion, or (55)

cents per share, compared with net earnings of $135 million, or 6

cents per share, for the fourth quarter of 2000.

For the full year 2001, sales from ongoing operations,

excluding the results of the two businesses sold during the year,

were $29.5 billion, compared with sales of $36.8 billion in 2000.

The full-year net loss during 2001 from ongoing operations,

excluding the results of the two businesses sold during the year and

special items, was $697 million, or (31) cents per share, compared

with full-year net earnings of $2.0 billion, or 91 cents per share,

in 2000.

For the full year 2001, Motorola reported special items

resulting in a net charge of $4.5 billion pre-tax, or $3.3 billion

after-tax. For the full year 2000, Motorola reported special items

resulting in a net charge of $651 million pre-tax, or $733 million

after-tax. (Details of the special items are presented in a table

preceding the footnotes at the end of this press release.)

On a GAAP basis, Motorola reported full year 2001 sales of

$30.0 billion, compared to sales of $37.6 billion in 2000. The 2001

full-year net loss was $3.9 billion, or (1.78) cents per share,

compared to net earnings of $1.3 billion, or 58 cents per share in

2000.

Breen reviewed the following results of major operations for

the fourth quarter of 2001 compared with the fourth quarter of 2000.

This review is based on ongoing operations, excluding the results of

the businesses sold during the year and special items.

2

Personal Communications Segment

Segment sales were $3.0 billion, down 14 percent from the

comparable year-ago quarter. Orders were $2.2 billion, down 23

percent. The segment recorded operating earnings, excluding special

items, of $189 million for the fourth quarter of 2001 versus

operating earnings, excluding special items, of $83 million a year

ago.

Excluding special items, this was the second consecutive

profitable quarter for the segment. Improvements in financial

performance were driven by the segment’s implementation of its

platform design strategy, reductions in product portfolio and parts

complexity, new products, and improved relationships with operators

worldwide.

The segment estimated its worldwide handset market share at

approximately 17 percent in the fourth quarter of 2001 and believes it

maintained its leading market-share position in China.

In Global System for Mobile (GSM) Communications devices,

Motorola maintained its position as the leading handset provider in

China due to very strong consumer demand for its entry-level,

feature-rich Talkabout® 191 and the more stylish V.series 60. In

Europe, shipments increased substantially for both the Talkabout 191

and for the Timeport 280, which helps operators increase average

revenue per unit. A portfolio of fashionable accessories also helped

to drive orders and shipments for the V.series 60 and 66. In North

America, the segment saw volume shipments of the entry-level,

feature-rich Talkabout 193, the V.series 60g and the Timeport 7389i

for GSM.

Motorola continued to strengthen its leadership position in 2.5

Generation (2.5G) General Packet Radio Service (GPRS) by announcing

several agreements with Java 2 Platform Micro Edition (J2ME)

technology developers for applications in gaming, business productivity,

and handset personalization. Availability of applications is key to

increasing consumer demand for GPRS handsets.

Motorola offers a complete portfolio of GPRS handsets including

the Accompli 008, which blends voice, “always-on” Internet access

and personal organizer functionality; the V.series 60 and 66 for

consumers who enjoy fashion and style; the Timeport 280 for business

3

users on the go; and the Talkabout 193 for cost-conscious, entry-

level consumers. During the quarter, Motorola began shipping the

Timeport 280 and the Talkabout 193 to operators in North America who

launched GPRS service.

In December, Motorola introduced the V.series 8060, the company’s

first Code Division Multiple Access (CDMA) phone in China. Motorola also

partnered with China Unicom in October to make its first live CDMA 1X

data call. Earlier this month, Motorola introduced its first CDMA 1X

mobile phone for the Americas, the 120x, the company’s fourth 1X handset

product offering globally.

In Time Division Multiple Access (TDMA) handsets, Motorola began

shipping the V.series 60t in volume in North America and expanded

shipments in Mexico and Brazil.

Motorola, demonstrating its leadership in end-to-end solutions,

introduced two additional iDEN® handsets, the i90c and i80c, which

enable users to download and run applications and to perform a

variety of functions. These new mobile telephones are among the

first five handsets in North America -- all from Motorola -- that

use Java technology to enable users to customize their handsets with

downloadable applications. A variety of business and entertainment

applications can be downloaded over-the-air to this new generation

of devices.

Global Telecom Solutions Segment

Segment sales were $1.4 billion, down 33 percent from the

comparable year-ago quarter. Orders declined 39 percent to $1.1

billion. The segment incurred an operating loss, excluding special

items, of $120 million, compared with operating earnings, excluding

special items, of $193 million a year ago. Operating earnings

declined due to a decrease in sales stemming from lower worldwide

demand for wireless infrastructure equipment by service providers

and lower average selling prices.

In China, Motorola announced two expansions of China Mobile’s

GPRS network. Motorola now has 22 GPRS infrastructure contracts with

15 operators globally. In addition, Motorola won a $178 million

contract for a GSM network in South India, a $70 million contract to

4

install a GSM network in Western India and a $44 million contract to

expand GSM network infrastructure in Malaysia.

Motorola announced two CDMA2000 1X contracts during the quarter

including a $35 million contract with Horizon PCS in the United

States. In China, Motorola signed a $35 million contract with China

Unicom to expand the operator’s CDMA network in Hebei province.

Commercial, Government and Industrial Systems Segment

Segment sales, excluding the business sold, increased 7 percent

to $1.2 billion and orders decreased 6 percent to $1.1 billion.

Operating earnings, excluding the results of the business sold and

special items, decreased to $167 million from $171 million a year

ago.

In the fourth quarter, Motorola won a $68 million order from

the Los Angeles County Metropolitan Transportation Authority for an

integrated voice and data system; a $19 million order from Wake

County, N.C., for Astro® digital equipment and a computer-aided

dispatch system; and a multi-million dollar, 20-year contract to

provide technical support for the Airwave radio network in the U.K.

During the quarter, Motorola achieved several digital

technology milestones. Motorola began shipping its Astro 25 Voice

over IP (VoIP) communications systems, making it the first company

to deliver IP-based, Project 25-compliant equipment. The segment

also announced Dimetra™ IP, the industry’s first fully IP-based,

TETRA-compliant network, as well as Compact TETRA, a scalable

solution for small and medium-sized businesses. Motorola also began

shipping new generation Project 25-compatible and TETRA-compatible

portable and mobile radios.

Motorola’s Printrak subsidiary became the first vendor

certified by the Royal Canadian Mounted Police for criminal and

applicant fingerprint/palm print submissions in Canada and was

selected by the London Fire Authority in the U.K. to implement

Motorola’s advanced command and control emergency response system.

5

Broadband Communications Segment

Segment sales decreased 45 percent to $580 million and orders

decreased 51 percent to $525 million. The year-over-year declines

resulted from a slow down by cable operators in making capital

investments and deploying subscriber equipment. Operating earnings,

excluding special items, decreased to $86 million compared with $163

million a year ago as a result of the decline in sales.

During the fourth quarter, Motorola completed its acquisition

of RiverDelta Networks and earlier this month completed its

acquisition of Synchronous, Inc. These acquisitions provide Motorola

with leading-edge routing and transport technologies that will be

leveraged throughout the company's broadband product lines to offer

comprehensive, integrated end-to-end solutions for the delivery of

video, voice and data. Cox Communications selected Motorola’s

broadband services router for the delivery of high-speed data and

advanced broadband services to more than one million customers in

Orange County, Cleveland and Las Vegas.

Motorola also announced two new digital set-top boxes, the

DCT2500 and DCT2600, that provide multiple applications, improved

graphics, guide enhancements and 'watch and surf' capabilities. AT&T

Broadband has agreed to purchase 200,000 of the DCT2500 set-top

boxes in 2002. Also during the quarter, Motorola shipped its 2

millionth digital set-top to Comcast Communications; saw it's

DVi5000 become the world's first digital set-top terminal to be

EuroDOCSIS-qualified; and, announced that its fourth-generation

SURFboard® cable modem had received SB4200E's certification for

interoperability.

Semiconductor Products Segment

Segment sales fell 41 percent to $1.1 billion and orders fell

36 percent to $1.0 billion. The segment had an operating loss,

excluding special items, of $335 million versus operating earnings,

excluding special items, of $171 million a year ago, due to the

decline in sales as the worldwide semiconductor industry continued

to experience its sharpest decline in history.

6

Last week, the segment announced plans to provide Benq

Corporation, formerly Acer Communication and Multimedia, Inc. of

Taiwan, with Motorola’s 2.5G Innovative Convergence™ (i.250)

platform. The i.250 platform is a comprehensive silicon-to-software

solution for designing and manufacturing 2.5G GSM/GPRS wireless

handsets. The platform is a major advancement in the industry's

ongoing effort to enable anytime, anywhere communication for

consumers by providing a solid architectural foundation to original

equipment manufacturers and original design manufacturers, including

Benq.

During the quarter, the segment announced a number of design

wins from leading global automotive customers for its advanced 16-

bit microcontroller unit family. The microcontroller, which helps

enable smarter, highly personalized vehicles, is expected to be used

beginning in model year 2003 and the design wins are estimated to be

worth more than $1 billion.

Motorola expanded its industry leading PowerQUICC™ II

communication processor family, which has been awarded more than

4,000 networking design wins. The new MPC8250 device is targeted for

use in small-office-home-office routers and edge control plane

applications. Motorola also expanded its PowerPC™-compliant

microcontroller products. These include the MPC500 family, which

offers 32-bit, reprogrammable solutions with on-board flash for

appliances, vehicles, computer peripherals and telephones, and the

MPC600 family for avionics, industrial control, robotics, high-end

motor controllers and analysis equipment applications.

Integrated Electronic Systems Segment

Segment sales decreased 29 percent to $540 million and orders

decreased 32 percent to $483 million compared to the same quarter

last year. The segment incurred an operating loss, excluding special

items, of $32 million versus operating earnings, excluding special

items, of $70 million a year ago due primarily to the downturn in

the telecommunications industry.

Automotive Communications and Electronic Systems (ACES) Group

sales were down and orders decreased compared with the same quarter

7

in 2000, due largely to a decrease in vehicle production in the U.S.

and Europe during the quarter. ACES announced a contract with

Mercedes Benz to provide the V.series 60 hands-free integrated phone

system on all 2002 Mercedes Benz automobiles sold in North America.

Motorola Computer Group (MCG) sales and orders were down very

significantly due to the current downturn in the telecommunications

industry, MCG’s largest market. During the quarter, MCG announced

that Nortel Networks is using Motorola's open, high-availability

embedded computing hardware and software to enhance the power of its

new compact, IP-based softswitch.

Motorola’s Energy Systems Group (ESG) sales were down and

orders were down significantly due to the year-over-year downturn in

wireless handset demand throughout the industry. At the same time,

ESG had record unit shipments of notebook computer batteries during

the quarter. ESG announced a strategic alliance with Elitetron

Electronic Co. (EEC), Ltd., a distributor of electronic components

in the Asia Pacific region, to distribute Motorola’s portfolio of

lithium-ion and lithium-ion polymer technology energy solutions.

Review and Outlook

Christopher B. Galvin, chairman and chief executive officer,

said, “2001 will go down in the history of the global

telecommunications equipment and semiconductor industries as one of

the most difficult years. The global recession, which we began to

anticipate in the third quarter of 2000, began in earnest in early

2001, hurting many strong businesses, especially those involved in

telecommunications and semiconductors. The events of September 11

compounded the impact.

“That stated, while we expect to incur losses in the first and

second quarters of 2002, we expect to return to profitability in the

second half of the year and be profitable for the full year, barring

any unforeseen political or economic disruptions. Motorola has

continued to position its cost structure, R&D investments and

manufacturing capacity for both an expected modest economic recovery

in the second half of 2002 and the expected revitalization of our

strategic markets.

8

“We are staying the course with our five point strategy:

#1: Revitalizing our management team (We have placed new

leaders in 70 of Motorola's 100 most important assignments within

the last 18 months. And, I'm delighted to have chosen Ed Breen as

president and chief operating officer);

#2: Stabilizing our balance sheet and improving financial

flexibility (We generated more than $1.9 billion in positive

operating cash flow this past year and reduced ratio of net debt to

net debt plus equity from 27 percent to 18 percent);

#3: Reducing our costs and manufacturing capacity (We

announced an employee population reduction of about one-third while

closing five businesses, closing five manufacturing facilities and

announced in 2001 the future closure of four additional facilities);

#4: Producing new, innovative products and growing customer

relationships (Some examples include our recent i.250 platform

wireless chipset design win, additional design wins worth a

potential $2 billion, enhancing our market leadership position in

telematics, and the success of our V.60 and GPRS phones worldwide);

and,

#5: Evaluating and re-evaluating our business plans to remain

competitive in this ever-changing business climate (We launched a

renewed China growth strategy, launched an “asset light” business

model for SPS, divested two non-strategic businesses and made

selected strategic acquisitions).

“We are focused on returning Motorola to profitability in 2002,

securing our long-term leadership in the strategic markets in which

we choose to participate, growing our sales and enhancing

shareholder value. The work is not complete. But due to actions

taken in 2001 and our continuing efforts to innovate, find new

business efficiencies and realize cost reductions, we enter 2002 a

much leaner, more competitive and highly energized company. This is

our mandate."

9

Consolidated Results for Ongoing Operations, Excluding Results of

Businesses Sold and Special Items

Excluding the results of the two businesses sold during the

year and special items, a comparison of results from ongoing

operations is as follows:

(Dollars in millions, except per-share amounts)

Fourth Quarter Full Year

2001 2000 2001 2000

Sales $7,324 $9,824 $29,451 $36,755

Net Earnings (Loss) $(90) $362 $(697) $2,045

Net Earnings (Loss) Per Share $(.04) $.16 $(.31) $.91

Net Margin on Sales -1.2% 3.7% -2.4% 5.6%

Consolidated GAAP Results

On an as reported GAAP basis, a comparison of results from

operations is as follows:

(Dollars in millions, except per-share amounts)

Fourth Quarter Full Year

2001 2000 2001 2000

Sales $7,324 $10,064 $30,004 $37,580

Net Earnings (Loss) $(1,237) $135 $(3,937) $1,318

Net Earnings (Loss) Per Share $(.55) $.06 $(1.78) $.58

Net Margin on Sales -16.9% 1.3% -13.1% 3.5%

Special Item Description:

For the fourth quarters and full years of 2001 and 2000,

respectively, Motorola reported special items as follows:

(Dollars in millions)

Fourth Quarter Full Year

2001 2000 2001 2000

10

Employee Severance $463 $114 $1,123 $140

Exit Costs 152 117 376 174

Fixed Asset Impairments 402 167 857 344

Investment Impairments 158 - 1,234 -

Goodwill/Intangible Asset

Impairments 44 - 116 -

Amortization of Goodwill 40 45 165 170

In-Process Research and

Development Charges 20 13 40 332

Litigation/Arbitration

Settlements 365 - 398 87

Product Portfolio

Simplification Write-Offs - 367 583 825

Potentially Uncollectible

Finance Receivables 48 - 1,501 -

General Instrument Merger

Integration Costs - - - 98

Other 61 13 21 51

Gains on Sale of

Investments and Businesses (33) (723) (1,931) (1,570)

Pre-tax Special Items 1,720 113 4,483 651

Income Tax Provision (573) 127 (1,227) 82

After-tax Special Items $1,147 $240 $3,256 $733

The impact on the segment results of the sales of the two

Motorola businesses and the special items above is shown in the

segment information tables at the end of this press release.

Notes: Segment operating earnings (loss) represent earnings (loss) before income taxes for the respective segment. The use of the word “significant” in this press release indicates a change of greater than 25 percent. The use of the words “very significant” indicates a change of greater than 50 percent.

11

Business Risks:

Statements in this press release that are not historical facts are forward-looking statements based on current expectations that involve risks and uncertainties. Such forward-looking statements include, but are not limited to, statements about: the impact of recently completed acquisitions; the impact of design wins on sales and earnings; the commercial availability and performance of new products; as well as, the statements in ``Review and Outlook''. Motorola wishes to caution the reader that the factors below and those on pages F-29 through F-33 of the appendix to Motorola's Proxy Statement for the 2001 annual meeting of stockholders and in its other SEC filings could cause Motorola's actual results to differ materially from those stated in the forward-looking statements. These factors include: (i) the company's ability to effectively carry out the planned cost-reduction actions; (ii) the potential for unanticipated results from cost-reduction activities on productivity; (iii) the impact of the slowdown in the overall economy and the uncertainty of current economic conditions; (iv) the impact of ongoing tax relief, interest rate reduction and liquidity infusion efforts to stimulate the economy; (v) the decline in the telecommunications, semiconductor and broadband industries; (vi) the company's continuing ability to access the capital markets on favorable terms; (vii) demand for the company's products, including products related to new technologies; (viii) the company's ability to continue to increase profitability and market share in its wireless handset business; (ix) the company's success in the emerging 3G market; (x) the demand for vendor financing and the company's ability to provide that financing in order to remain competitive; (xi) unexpected liabilities or expenses, including unfavorable outcomes to any currently pending or future litigation, including any relating to the Iridium project; (xii) the levels at which design wins become actual orders and sales; (xiii) the success of alliances and agreements with other companies to develop new products and services; (xiv) difficulties in integrating the operations of newly-acquired businesses and achieving strategic objectives, cost savings and other benefits; (xv) volatility in the market value of securities held by Motorola; (xvi) the impact of foreign currency fluctuations; and (xvii) the impact of changes in governmental policies, laws or regulations. About Motorola: MOTOROLA and the Stylized M Logo are registered in the U.S. Patent & Trademark Office. All other product or service names are the property of their respective owners. Motorola, Inc. 2002 Java and all other Java-based marks are trademarks or registered trademarks of Sun Microsystems, Inc. in the U.S. and other countries. PowerPC is a trademark of the IBM Corp. and used by Motorola, Inc. under licensing agreements. Motorola, Inc. (NYSE:MOT) is a global leader in providing integrated communications and embedded electronic solutions. Sales in 2001 were $30 billion. # # #

12

Motorola, Inc. and Subsidiaries Consolidated Statements of Operations (In millions, except per share amounts) For the Quarter Ended December 31, 2001 --------------------------------------------------- Ongoing Operations Special Excluding Exited Excluding GAAP Items Special Businesses Special Results Inc/(Exp) Items Inc/(Exp) Items -------- ------------------- -------------------- Net sales $7,324 $- $7,324 $- $7,324 Costs and expenses Manufacturing and other costs of sales 5,035 (152) 4,883 - 4,883 Selling, general and administrative expenses 894 (40) 854 - 854 Research and development expenditures 1,023 - 1,023 - 1,023 Depreciation expense 584 - 584 - 584 Reorganization of businesses 865 (865) - - - Other charges 696 (696) - - - Interest expense, net 113 - 113 - 113 Gains on sales of investments and businesses (33) 33 - - - -------- ------------------- -------------------- Total costs and expenses 9,177 (1,720) 7,457 - 7,457 -------- ------------------- -------------------- Loss before income taxes (1,853) (1,720) (133) - (133) Income tax provision (616) 573 (43) - (43) -------- ------------------- -------------------- Net loss $(1,237) $(1,147) $(90) $- $(90) ======== =================== ==================== Net loss per common share ------------------------- Basic $(0.55) $(0.04) Diluted $(0.55) $(0.04) Weighted average common shares outstanding ------------------------------------------ Basic 2,236.8 2,236.8 Diluted 2,236.8 2,236.8 Dividends paid per share $0.04 $0.04 Net margin on sales -16.9% -1.2%

13

For the Quarter Ended December 31, 2000 --------------------------------------------------- Ongoing Operations Special Excluding Exited Excluding GAAP Items Special Businesses Special Results Inc/(Exp) Items Inc/(Exp) Items -------- ------------------- -------------------- Net sales $10,064 $- $10,064 $240 $9,824 Costs and expenses Manufacturing and other costs of sales 6,790 (388) 6,402 (159) 6,243 Selling, general and administrative expenses 1,346 (61) 1,285 (40) 1,245 Research and development expenditures 1,144 - 1,144 (17) 1,127 Depreciation expense 634 - 634 (6) 628 Reorganization of businesses 376 (376) - - - Other charges 11 (11) - - - Interest expense, net 73 - 73 - 73 Gains on sales of investments and businesses (723) 723 - - - -------- ------------------- -------------------- Total costs and expenses 9,651 (113) 9,538 (222) 9,316 -------- ------------------- -------------------- Earnings (loss) before income taxes 413 (113) 526 18 508 Income tax provision 278 (127) 151 (5) 146 -------- ------------------- -------------------- Net earnings (loss) $135 $(240) $375 $13 $362 ======== =================== ==================== Net earnings per common share ----------------------------- Basic $0.06 $0.17 Diluted $0.06 $0.16 Weighted average common shares outstanding ------------------------------------------ Basic 2,188.7 2,188.7 Diluted 2,240.6 2,240.6 Dividends paid per share $0.04 $0.04 Net margin on sales 1.3% 3.7%

14

Motorola, Inc. and Subsidiaries Consolidated Statements of Operations (In millions, except per share amounts) For the Year Ended December 31, 2001 ----------------------------------------------------- Ongoing Operations Special Excluding Exited Excluding GAAP Items Special Businesses Special Results Inc/(Exp) Items Inc/(Exp) Items ---------- ------------------- -------------------- Net sales $30,004 $- $30,004 $553 $29,451 Costs and expenses Manufacturing and other costs of sales 21,445 (1,081) 20,364 (383) 19,981 Selling, general and administrative expenses(2) 3,703 (125) 3,578 (99) 3,479 Research and development expenditures 4,318 - 4,318 (31) 4,287 Depreciation expense (2) 2,357 - 2,357 (17) 2,340 Reorganization of businesses 1,858 (1,858) - - - Other charges 3,328 (3,328) - - - Interest expense, net 437 (22) 415 - 415 Gains on sales of investments and businesses (1,931) 1,931 - - - ---------- ------------------- -------------------- Total costs and expenses 35,515 (4,483) 31,032 (530) 30,502 ---------- ------------------- -------------------- Earnings (loss) before income taxes (5,511) (4,483) (1,028) 23 (1,051) Income tax provision (1,574) 1,227 (347) (7) (354) ---------- ------------------- -------------------- Net earnings (loss) $(3,937) $(3,256) $(681) $16 $(697) ========== =================== ==================== Net loss per common share ------------------------- Basic $(1.78) $(0.31) Diluted $(1.78) $(0.31) Weighted average common shares outstanding ------------------------------------------ Basic 2,213.3 2,213.3 Diluted 2,213.3 2,213.3 Dividends paid per share $0.16 $0.16 Net margin on sales -13.1% -2.4%

Return on average

invested capital(1) -18.0%

15

For the Year Ended December 31, 2000

----------------------------------------------------- Ongoing Operations Special Excluding Exited Excluding GAAP Items Special Businesses Special Results Inc/(Exp) Items Inc/(Exp) Items ---------- ------------------- -------------------- Net sales $37,580 $- $37,580 $825 $36,755 Costs and expenses Manufacturing and other costs of sales 23,628 (887) 22,741 (555) 22,186 Selling, general and administrative expenses 5,141 (221) 4,920 (180) 4,740 Research and development expenditures 4,437 - 4,437 (57) 4,380 Depreciation expense 2,352 - 2,352 (25) 2,327 Reorganization of businesses 596 (596) - - - Other charges 517 (517) - - - Interest expense, net 248 - 248 - 248 Gains on sales of investments and businesses (1,570) 1,570 - - - ---------- ------------------- -------------------- Total costs and expenses 35,349 (651) 34,698 (817) 33,881 ---------- ------------------- -------------------- Earnings (loss) before income taxes 2,231 (651) 2,882 8 2,874 Income tax provision 913 (82) 831 (2) 829 ---------- ------------------- -------------------- Net earnings (loss) $1,318 $(733) $2,051 $6 $2,045 ========== =================== ==================== Net earnings per common share ----------------------------- Basic $0.61 $0.94 Diluted $0.58 $0.91 Weighted average common shares outstanding ------------------------------------------ Basic 2,170.1 2,170.1 Diluted 2,256.6 2,256.6 Dividends paid per share $0.16 $0.16 Net margin on sales 3.5% 5.6% Return on average invested capital(1) 6.3%

(1) Based on the performance of the four preceding quarters ending

December 31, 2001 and December 31, 2000.

(2) Includes $24 million reclassification of third quarter costs from

selling, general and administrative expenses to depreciation expense.

16

Motorola, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In millions) ASSETS December 31, December 31, 2001 2000 ------------- ------------- Cash and cash equivalents $6,082 $3,301 Short-term investments 80 354 Accounts receivable, net 4,583 7,092 Inventories, net 2,756 5,242 Other current assets 3,648 3,896 ------------- ------------- Total current assets 17,149 19,885 ------------- ------------- Property, plant and equipment, net 8,913 11,157 Investments 2,995 5,926 Other assets 4,341 5,375 ------------- ------------- Total assets $33,398 $42,343 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Notes payable and current portion of long-term debt $870 $6,391 Accounts payable 2,434 3,492 Accrued liabilities 6,394 6,374 ------------- ------------- Total current liabilities 9,698 16,257 ------------- ------------- Long-term debt 8,372 4,293 Other liabilities 1,152 2,696 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely company- guaranteed debentures 485 485 Stockholders' equity 13,691 18,612 ------------- ------------- Total liabilities and stockholders' equity $33,398 $42,343 ============= =============

17

Motorola, Inc. and Subsidiaries Segment Information (In millions)

Summarized below are the Company's segment net sales by reportable segment

for the three months ended December 31, 2001 and December 31, 2000.

For the Quarter Ended December 31, 2001 ------------------------------------------ Segment Net Sales ------------------------------------------ Exited GAAP Businesses Ongoing % Change Results Inc/(Exp) Operations from 2000 ------------------------------------------ Personal Communications Segment $2,975 $- $2,975 -14% Global Telecom Solutions Segment 1,376 - 1,376 -33% Commercial, Govt, and Industrial Systems Segment 1,198 - 1,198 7% Broadband Communications Segment 580 - 580 -45% Semiconductor Products Segment 1,123 - 1,123 -41% Integrated Electronic Systems Segment 540 - 540 -29% Other Products Segment 122 - 122 -46% Adjustments & Eliminations (590) - (590) 25% ------------------------------- Segment Totals $7,324 $- $7,324 -25% ========================================== For the Quarter Ended December 31, 2000 ------------------------------------------ Segment Net Sales ------------------------------------------ Exited GAAP Businesses Ongoing Results Inc/(Exp) Operations ------------------------------------------ Personal Communications Segment $3,478 $- $3,478 Global Telecom Solutions Segment 2,065 - 2,065 Commercial, Govt, and Industrial Systems Segment 1,300 185 1,115 Broadband Communications Segment 1,053 - 1,053 Semiconductor Products Segment 1,905 - 1,905 Integrated Electronic Systems Segment 764 - 764 Other Products Segment 281 55 226 Adjustments & Eliminations (782) - (782) ------------------------------------------ Segment Totals $10,064 $240 $9,824 ==========================================

18

Motorola, Inc. and Subsidiaries Segment Information (In millions)

Summarized below are the Company's segment operating earnings (loss)

before taxes by reportable segment for the three months ended December 31,

2001 and December 31, 2000.

For the Quarter Ended December 31, 2001

------------------------------------------------------- Segment Operating Earnings (Loss) before Taxes ------------------------------------------------------- Ongoing Operations Special Excluding Exited Excluding GAAP Items Special Businesses Special % Results Inc/(Exp) Items Inc/(Exp) Items Sales -------- ------------------- ------------------------- Personal Communications Segment $102 $(87) $189 $- $189 6% Global Telecom Solutions Segment (344) (224) (120) - (120) -9% Commercial, Govt, and Industrial Systems Segment 2 (165) 167 - 167 14% Broadband Communications Segment (84) (170) 86 - 86 15% Semiconductor Products Segment (850) (515) (335) - (335) -30% Integrated Electronic Systems Segment (107) (75) (32) - (32) -6% Other Products Segment (126) (54) (72) - (72) -60% Adjustments & Eliminations 74 - 74 - 74 -13% -------- ------------------- ----------------- Segment Totals (1,333) (1,290) (43) - (43) -1% General Corporate (520) (430) (90) - (90) -------- ------------------- ----------------- Loss Before Income Taxes $(1,853) $(1,720) $(133) $- $(133) -2% ======== =================== =========================

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For the Quarter Ended December 31, 2000 ------------------------------------------------------- Segment Operating Earnings (Loss) before Taxes ------------------------------------------------------- Ongoing Operations Special Excluding Exited Excluding GAAP Items Special Businesses Special % Results Inc/(Exp) Items Inc/(Exp) Items Sales -------- ------------------- ------------------------- Personal Communications Segment $(375) $(458) $83 $- $83 2% Global Telecom Solutions Segment 172 (21) 193 - 193 9% Commercial, Govt, and Industrial Systems Segment 127 (66) 193 22 171 15% Broadband Communications Segment 279 116 163 - 163 15% Semiconductor Products Segment 27 (144) 171 - 171 9% Integrated Electronic Systems Segment 53 (17) 70 - 70 9% Other Products Segment 41 191 (150) (4) (146) -65% Adjustments & Eliminations (66) - (66) - (66) 8% -------- ------------------- ----------------- Segment Totals 258 (399) 657 18 639 7% General Corporate 155 286 (131) - (131) -------- ------------------- ----------------- Earnings (Loss) Before Income Taxes $413 $(113) $526 $18 $508 5% ======== =================== =========================

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Motorola, Inc. and Subsidiaries Segment Information (In millions)

Summarized below are the Company's segment net sales by reportable segment

for the years ended December 31, 2001 and December 31, 2000.

For the Year Ended December 31, 2001 ----------------------------------------- Segment Net Sales ----------------------------------------- Exited GAAP Businesses Ongoing % Change Results Inc/(Exp) Operations from 2000 ----------------------------------------- Personal Communications Segment $10,448 $- $10,448 -21% Global Telecom Solutions Segment 6,548 - 6,548 -16% Commercial, Govt, and Industrial Systems Segment 4,318 456 3,862 -4% Broadband Communications Segment 2,855 - 2,855 -16% Semiconductor Products Segment 4,936 - 4,936 -37% Integrated Electronic Systems Segment 2,239 - 2,239 -22% Other Products Segment 755 97 658 -20% Adjustments & Eliminations (2,095) - (2,095) 36% ----------------------------- Segment Totals $30,004 $553 $29,451 -20% ========================================= For the Year Ended December 31, 2000 ----------------------------------------- Segment Net Sales ----------------------------------------- Exited GAAP Businesses Ongoing Results Inc/(Exp) Operations ----------------------------------------- Personal Communications Segment $13,267 $- $13,267 Global Telecom Solutions Segment 7,791 - 7,791 Commercial, Govt, and Industrial Systems Segment 4,580 572 4,008 Broadband Communications Segment 3,416 - 3,416 Semiconductor Products Segment 7,876 - 7,876 Integrated Electronic Systems Segment 2,869 16 2,853 Other Products Segment 1,057 237 820 Adjustments & Eliminations (3,276) - (3,276) ----------------------------------------- Segment Totals $37,580 $825 $36,755 =========================================

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Motorola, Inc. and Subsidiaries Segment Information (In millions)

Summarized below are the Company's segment operating earnings (loss)

before taxes by reportable segment for the years ended December 31, 2001

and December 31, 2000.

For the Year Ended December 31, 2001 ------------------------------------------------------- Segment Operating Earnings (Loss) before Taxes ------------------------------------------------------- Ongoing Operations Special Excluding Exited Excluding GAAP Items Special Businesses Special % Results Inc/(Exp) Items Inc/(Exp) Items Sales -------- ------------------- ------------------------- Personal Communications Segment $(1,797) $(1,362) $(435) $- $(435) -4% Global Telecom Solutions Segment (1,413) (1,402) (11) - (11) 0% Commercial, Govt, and Industrial Systems Segment 508 151 357 39 318 8% Broadband Communications Segment (436) (916) 480 - 480 17% Semiconductor Products Segment (2,142) (934) (1,208) - (1,208) -24% Integrated Electronic Systems Segment (211) (179) (32) - (32) -1% Other Products Segment 551 815 (264) (16) (248) -38% Adjustments & Eliminations 236 - 236 - 236 -11% -------- ------------------- ---------------- Segment Totals (4,704) (3,827) (877) 23 (900) -3% General Corporate (807) (656) (151) - (151) -------- ------------------- ---------------- Earnings (Loss) Before Income Taxes $(5,511) $(4,483) $(1,028) $23 $(1,051) -4% ======== =================== =========================

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For the Year Ended December 31, 2000 ------------------------------------------------------- Segment Operating Earnings (Loss) before Taxes ------------------------------------------------------- Ongoing Operations Special Excluding Exited Excluding GAAP Items Special Businesses Special % Results Inc/(Exp) Items Inc/(Exp) Items Sales -------- ------------------- ------------------------- Personal Communications Segment $(328) $(789) $461 $- $461 3% Global Telecom Solutions Segment 846 (133) 979 - 979 13% Commercial, Govt, and Industrial Systems Segment 434 (92) 526 34 492 12% Broadband Communications Segment 1,251 692 559 - 559 16% Semiconductor Products Segment 163 (514) 677 - 677 9% Integrated Electronic Systems Segment 184 (25) 209 - 209 7% Other Products Segment (338) 30 (368) (26) (342) -42% Adjustments & Eliminations (66) - (66) - (66) 2% -------- ------------------- ---------------- Segment Totals 2,146 (831) 2,977 8 2,969 8% General Corporate 85 180 (95) - (95) -------- ------------------- ---------------- Earnings (Loss) Before Income Taxes $2,231 $(651) $2,882 $8 $2,874 8% ======== =================== =========================

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