8-KOther Events

Motorola Solutions, Inc. 8-K Report (Apr 8, 2003)

Filed April 8, 2003For Securities:MSI

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.

Frequently Asked Questions

The main reason for this 8-K filing is to inform investors about changes in Motorola's financial reporting format, effective from the first quarter of 2003. These changes are intended to align Motorola's financial statement presentation with other technology companies, thereby enhancing comparability.

No, these changes are purely reclassifications of existing income and expense items. They do not impact Motorola's historical GAAP operating earnings (loss), net earnings (loss), or earnings (loss) per share for the 2001 and 2002 periods that were restated.

Royalty income will now be reported under 'Net sales' instead of being an offset to 'Selling, general and administrative expenses (SG&A)'. Costs related to generating this royalty income will be moved to 'Costs of sales' from SG&A. This results in an increase in reported Net sales and Costs of sales, but no change to overall profitability metrics.

Motorola will no longer classify the amortization of acquired intangibles as a 'special item.' This means these specific expenses will be integrated into the standard operating cost categories, reducing the reported amount of 'special items' in their financial disclosures, though it does not affect the overall GAAP financial results.