Summary
Motorola, Inc. (MSI) filed an 8-K on April 8, 2003, to announce significant changes in its financial reporting format, effective Q1 2003. The primary purpose is to align its financial statements with industry peers and improve comparability. These changes involve reclassifying royalty income and certain expense items across 'Net sales,' 'Costs of sales,' 'Selling, general and administrative expenses (SG&A),' and 'Research and development expenditures (R&D).' Crucially, these reclassifications are purely presentational and do not alter Motorola's historical Generally Accepted Accounting Principles (GAAP) operating earnings (loss), net earnings (loss), or earnings (loss) per share for 2001 and 2002. The filing provides detailed breakdowns of these adjustments, showing increased net sales and costs but unchanged net income and EPS figures for the affected periods. Additionally, Motorola will no longer classify amortization of acquired intangibles as a "special item," a change that reduces reported special items but also does not impact GAAP earnings.
Key Highlights
- 1Motorola is changing its financial reporting format starting Q1 2003 to better align with industry peers.
- 2Key reclassifications include royalty income moving to 'Net sales' and certain employee benefits and production planning costs shifting across expense categories.
- 3These changes are purely presentational and do NOT impact historical GAAP operating earnings, net earnings, or EPS for 2001 and 2002.
- 4The filing provides adjusted financial data for 2001 and 2002 to ensure comparability with the new 2003 presentation.
- 5Amortization of acquired intangibles will no longer be treated as a 'special item,' reducing the reported amount of special items.
- 6The company is also adjusting historical 'Orders' data to include royalty income for segment comparability.
- 7This 8-K is furnished to assist investors in analyzing historical and future financial performance.