摩托罗拉公司1967年年报

The role of business is to honorably The illustrations on the following pages serve the needs of society at a profit. relate just a few of Motorola's diverse The serving of these needs, and do- products to some of their applications ing so honorably—both of which are in humanistic situations. required in our free enterprise system—directly relate to the humanistic goals of our society.

CONTENTS 2 Letter to Shareholders 14 Government Electronics Division

4 Balance Sheet 16 Automotive Products Division

6 Statement of Earnings 18 Control Systems Division 7 Source and Use of Funds 20 Annual Meeting 7 Ten Year Financial Summary Directors and Officers 8 Communications Division

10 Semiconductor Products Division

12 Consumer Products Division

For the first time in six years we must report a temporary setback in sales and earnings. Total sales were $629,975,344, off the record pace of 1966 by 8%. Earnings of $18,816,147 or $3.08 per share were down 43% from the record $5.40 in 1966. However, during these six years sales and earnings have nonetheless about doubled.

The fourth quarter represented the

year's most favorable comparison of equivalent quarters. The gap in sale was narrowed to within 3% of the record fourth quarter last year. Ear ings were down by 14%. Over-all the advantage of broad product diversification was manifested. The gains in 1967 sales in four of the six operating divisions offset much of the decline in the largest division, consumer products. One division reported sales volume virtually the same as 1966. The communications and semiconductor products divisions scored advances in earnings as well as in sales. Automotive products and gov-

ernment electronics divisions' earnings were down somewhat, the latter a result of losses in one broad category of products produced for use in Viet Nam by the Chicago Center of our government electronics division. The smaller control systems division increased its sales and improved its anticipated loss position. Each division's progress is discussed in detail on the succeeding pages of

this report.

The major adversities experienced were in the consumer products division. Color television sales fell short of industry forecasts with the consequent runoff of excess inventory at marked down prices. Adding to this problem, the mix of color and monochrome receivers bought by consumers proved contrary to forecasts. The lowered color television production rate reflected adversely on our picture tube plant operation in that it could not readjust quickly to produce profitably at the level of requirements in the finished goods

facilities. Another aspect of the pic- ness in Schaumburg and Pontiac, increase in even greater proportion, ture tube situation bearing on the Illinois; Mesa, Arizona; Toronto, becoming evident in the second, differential in earnings was the re- Canada; Yokohama, Japan; Seoul, third and fourth quarters. duction of some 65 cents per share Korea and Toulouse, France. Electronics is an industry of momenattributable to payments from and A phase of the restructuring the tum and change. There are bound to to National Video Corporation under past year, and continuing in 1968, in- be periods of adversity interrupting the agreement with that company. volved a broadening of management a company's growth pattern. These We have come firmly to grips with talent throughout the corporation to periods test the mettle. We want to the problems in the consumer prod- cope with changing technologies, in- commend our associates for the manucts division. A reorganization was creasing product diversification, and ner in which they have redoubled effected during the year with changes widening international scope. their efforts the past year-and-a-ha in the operations and marketing seg- An Executive Institute aimed at gen- and to express appreciation for the ments. A new marketing concept eralizing the capabilities of special- confidence of our shareholders. was introduced during the fourth ists was started in Vail, Arizona, and For the Board of Directors, quarter in several test markets fea- has graduated its fourth class of turing the company's solid state 14 men. Ten corporate officers were color television line which is setting elected to positions of major responnew standards of reliability for the sibility during the year. Eight were CHAIRMAN OF THE BOARD industry. The results have been most promoted from within the company promising. and two were drawn from outside. Greater emphasis in recruitment and The domestic and foreign plant expansion program activated in 1966 evaluation procedures has been given to the early recognition and PRESIDENT u has been almost completed. On a rapid advancement of deserving comparative cost basis, capital exyoung talent. penditures were $57 million in 1966 and $28 million in 1967. Substantial In 1968, assuming a favorable general new facilities and ventures have economy, sales are expected to be come on stream or approach readi- up significantly and earnings should March 21, 1968

CONSOLIDATED BALANCE SHEET as of December 31 Motorola, Inc. and Subsidiaries

ASSETS

CURRENT ASSETS

Cash

Short-term investments, at cost

Accounts receivable

United States government

Other

Allowance for doubtful accounts

Costs recoverable under United States government contracts, less

Inventories, at the lower of cost (first-in, first-out) or marke

Other current assets

TOTAL CURRENT ASSETS

PLANT AND EQUIPMENT, at Cost

Land

Buildings

Machinery and equipment

Accumulated depreciation

NET PLANT AND EQUIPMENT

Sundry assets, net

NOTES TO FINANCIAL STATEMENTS

1 Long-term debt at December 31 consisted of the following: 1967 1966

43A% debentures due April 1,

1986 (less $500,000 debentures held in treasury for sinking fund payment) $29,000,000 $29,500,000

Revolving credit notes 30,000,000 30,000,000

Notes payable 33A%, due $500,000 annually to 1972 2,500,000 3,000,000 43/s%, due $500,000 annually to 1976 4,500,000 5,000,000 Real estate mortgages 243,584 314,452 66,243,584 67,814,452 Less current maturities, included

in current liabilities 1,164,104 1,070,880 Noncurrent portion of long-

term debt $65,079,480 $66,743,572

1967 1966

$ 22,132,822 $ 21,993,844

596,230 5,763,058

17,955,600 12,537,878

110,155,708 98,954,974

(2,801,000) (3,013,801)

gress billings 13,625,424 14,204,119

103,434,437 106,106,282

5,525,907 5,183,301

270,625,128 261,729,655

8,299,360 7,276,817

103,341,055 91,596,202

92,291,504 82,341,169

(66,969,132) (53,994,969)

136,962,787 127,219,219

3,194,847 3,964,084

$410,782,762 $392,912,958

Under the terms of the revolving credit, the company has the option of converting the notes to a five year term loan on or prior to February 1,1969; no reduction is contemplated during

1968. The agreement contains provisions restricting, among

other things, the payment of cash dividends which are not to exceed $10,000,000 plus earnings (as defined) after December 31,1965. It also requires the company to maintain consolidate

working capital of not less than $75,000,000. At December 31, 1967, $53,000,000 of retained earnings was available for dividend payments.

Under the Employee Share Option Plan, adopted in 1960, options were granted (through 1965) to key employees to purchase Motorola, Inc. shares. During 1967, options on 18,220 shares were exercised; the excess ($931,438) of the option price over the par value of shares issued was credited to add

tional paid-in capital. At year end, 75,685 shares were under

option, all being currently exercisable, at an aggregate opti

price of $4,577,529; if not exercised, these options expire a

various dates through 1973.

LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable

Current maturities of long-term debt

Accounts payable

Accrued compensation Federal income taxes Other (including withheld) taxes Contribution to employees' profit sharing fund Product and service warranties Other

TOTAL CURRENT LIABILITIES

LONG-TERM DEBT (note 1)

SHAREHOLDERS' EQUITY Capital stock, $3.00 par value (note 2) Authorized: 10,000,000 shares Outstanding: 1967, 6,122,483 shares; 1966, 6,104,263 shares Additional paid-in capital (note 2)

Retained earnings (note 1) TOTAL SHAREHOLDERS' EQUITY

The Board of Directors, subject to the approval of the shareholders, authorized the granting of options to key employees to purchase 300,000 Motorola, Inc. shares at not less than market value on date of grant. Options may be granted during the period February 1, 1968 to May, 1973. Options granted in any year shall not exceed 100,000 shares which become exercisable one year from date of grant and expire at the end of five years.

An Executive Incentive Plan, effective in 1968 (subject to sha

holders' approval), provides that certain of the companies may reserve up to 4% of their annual consolidated net earnings (as defined) for the payment of cash incentive awards. Such awards are payable generally in equal annual installments over a period of five years and are generally subject to the recipients' continued employment. If the plan had been in effect in 1967 and the maximum reserve provided, net earnings would have been reduced $412,000 (7iJ per share).

1967 1966

$ 52,000,000 $ 38,500,000

1,164,104 1,070,880

38,788,540 40,689,380

139,416,901 133,571,113

65,079,480 66,743,572

18,367,449 18,312,789 17,712,959 16,781,521

170,205,973 157,503,963 206,286,381 192,598,273

$410,782,762 $392,912,958

The company has a right to share in National Video Corporation's profit from the sale of color television tubes for a th year period ending in November, 1968, but has no obligation to make further repayments. Earnings per share for 1967 include a negative adjustment (repayment) of 16£ of such profit from the cooperative color tube development program compared to 49<J earned in 1966.

Depreciation of plant and equipment is provided on the basis of the estimated useful lives generally by the declining-balan

method for items acquired subsequent to December 31, 1953 and by the straight-line method for items acquired prior to that date.

The companies are obligated under repurchase and other agreements, principally in connection with the financing of sales of products to consumers, and are defendants in suits and claims, which it is believed will have no material effect the business of the companies.

STATEMENT OF CONSOLIDATED EARNINGS AND RETAINED E A R N I N G S Motorola, Inc. and Subsidiaries

YEARS ENDED DECEMBER 31 1967 1966 SALES AND OTHER REVENUES $629,975,344 $682,374,719 Manufacturing and other costs of sales 460,922,148 491,417,637 Selling, service, and administrative expenses 105,132,184 100,452,633 Depreciation of plant and equipment (note 5) 17,771,882 13,859,021 Contribution to employees' profit sharing fund 4,956,347 11,528,890 Interest and amortization of debenture expense 6,621,636 5,103,695 TOTAL COSTS AND OTHER EXPENSES 595,404,197 622,361,876 Income before federal income taxes 34,571,147 60,012,843 Federal income taxes, net of investment credit of $1,230,000 in 1967; $1,793,000 in 1966 15,755,000 27,060,000 EARNINGS

(per share outstanding during the year: 1967, $3.08; 1966, $5.40) (notes 3 and 4) 18,816,147 32,952,843

Retained earnings at beginning of year 157,503,963 130,652,207

176,320,110 163,605,050

Less cash dividends declared—$1.00 per share 6,114,137 6,101,087

Retained earnings at end of year (note 1) $170,205,973 $157,503,963 5ee accompanying notes to financial statements.

PEAT, MARWICK, MITCHELL & CO. or agencies by communication with them but we satisfied ourCERTIFIED PUBLIC ACCOUNTANTS, CHICAGO, ILLINOIS selves as to such accounts by means of other auditing procedures. In our opinion, the accompanying consolidated balance sheet The Board of Directors and Shareholders of Motorola, Inc.: and statement of consolidated earnings and retained earnings present fairly the financial position of Motorola, Inc. and subWe have examined the consolidated balance sheet of Motorola, sidiaries at December 31,1967 and the results of their operations Inc. and subsidiaries as of December 31, 1967 and the related for the year then ended, in conformity with generally accepted statement of earnings and retained earnings and the statement of accounting principles applied on a basis consistent with that of source and use of funds for the year then ended. Our examina- the preceding year. Also, in our opinion, the accompanying tion was made in accordance with generally accepted auditing statement of consolidated source and use of funds for the year standards, and accordingly included such tests of the accounting ended December 31, 1967 presents fairly the information shown records and such other auditing procedures as we considered therein. necessary in the circumstances. It was not practicable to confirm PEAT, MARWICK, MITCHELL & CO. accounts receivable from United States government departments February 27, 1968

STATEMENT OF CONSOLIDATED SOURCE AND USE O F F U N D S Motorola, Inc. and Subsidiaries

YEARS ENDED DECEMBER 31 1967 1966 SOURCE OF FUNDS

Earnings $18,816,147 $32,952,843

Depreciation 17,771,882 13,859,021

Increase (decrease) in long-term debt (1,664,092) 28,429,120

Proceeds from exercise of share options 986,098 744,235

Decrease in sundry assets 769,237 255,382

Total 36,679,272 76,240,601

USE OF FUNDS

Additions to plant and equipment, net 27,515,450 59,995,652

Cash dividends 6,114,137 6,101,087

Increase in working capital 3,049,685 10,143,862

Total $36,679,272 $76,240,601

TEN YEAR FINANCIAL SUMMARY 1958 1959 1960 1961 1962 1963 1964 1965 1966

SALES AND OTHER $218,909,968 293,081,127 301,049,185 298,219,845 346,881,779 377,852,809 419,066,694 516,973,065 682,374,719 REVENUES

INCOME BEFORE $ 15 171 013 27,756,237 26,548,813 19,900,308 26,514,514 27,126,526 38,926,724 57,838,678 60,012,843 INCOME TAXES ' '

EARNINGS $ 7,356,213 14,171,237 12,633,813 9,517,308 13,206,514 12,926,526 20,666,724 31,838,678 32,952,843

EARNINGS 2.39 2.09 1.57 2.02 2.14 3.41 5.23 5.4 PER SHARE* *

ssr 63,336,998 73,790,019 95,078,616 96,804,189 92,358,852 107,625,939 118,014,680 128,158,542

NET INVESTMENT $ 27 615 287 33,436,676 44,594,599 48,427,446 54,783,818 67,283,543 67,836,835 81,082,588 127,219,219 IN PLANT AND ' ' EQUIPMENT

• Earnings per share are based on shares outstanding during the respective years, adjusted for share distributions. Earnings per share shown above for 1962 do not include 17i of nonrecurring capital gain from sale of finance subsidiary.

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Sales continued their steady prog- four-frequency radios, which use ress and were again higher than frequency scramblers to prevent unthe previous year. Profits were also authorized reception, for the Los up, though they were affected by Angeles Police Dept.; a hospital comcrippling snow storms in January munications system for St. Luke's and a major trucking strike in April. Texas Children's Hospital; and seStandard products and services had lective load control equipment for a good year, and significant new Detroit Edison Co. business was realized in certain new In the first quarter of the year, opproducts and markets. erations commenced at the division's As the nation's leading two-way new Schaumburg, Illinois plant. Varicommunications manufacturer, the ous operations from around the Chidivision was called upon in a great cago area will be consolidated into Instant communication aids the number of crises to make rush ship- this facility which will also meet ex war on crime . . . portable ments of radio equipment to co- pansion requirements. The division two-way radio ordinate and control public service will continue to fully utilize the efforts, such as floods, forest fires, Augusta Blvd. plant. civil disorders and the Vietnam war. A 107,000 sq. ft. facility was comIn a number of cases, Motorola re- pleted in a suburb of Toronto, Canceived commendations for respond- ada and Canadian Motorola Elecing on extremely short notice with tronics Co. occupies this building. equipment that performed reliably under the most adverse conditions. COMMUNICATIONS New products introduced during the year include a new line of economy, DIVISION compact mobile radios for industry; Immediate request for a new truck-mount radio in the me- Community Radio Watch, a public emergency aid . . . mobile two-way radio dium price range; new lines of solid service program, has made significant state base stations and control equip- contributions to public safety by ment; a new solid-state Alert Mon- encouraging local law enforcement itor for various public safety uses, authorities to enlist the aid of all particularly volunteer fire protection; two-way radio users as a supplemena line of radio pagers to operate in tary alerting network for police and the 450 mhz. band; a new closed fire departments. Over 440 cities in circuit TV camera sealed against 48 states have adopted the program dust, fumes and moisture, for use in in its first year of operation. Ten hazardous or exposed areas; a Distinguished Service Awards have Medi-Scan bed-status system for been presented to individuals whose high-census hospitals; and a doctor's use of mobile radio has served to Precious minutes and lives register which visually displays save lives or prevent destruction of saved . . . hospital w h i c h d o c t o r s are present in a property. It is hoped that, by the en communications hospital. of 1968, every American city with over 100,000 population will have Major contract awards during the adopted this important public servpast year include new centralized ice program. dispatching centers for the New York City police department and the The division expects continued New York City Transit Dept.; special growth in sales and profits for 1968.

The semiconductor products divi- try's first dual stereo pre-amplifier sion achieved its ninth consecutive and the selection of advancedyear of record sales and earnings. performance MECL II integrated cirIn contrast, the industry in 1967 cuit series by an increasing number was experiencing a decline in sales. of major equipment manufacturers The division now has the broadest gave considerable impetus to inteline of semiconductor devices in the grated circuit sales which increased industry. more than 40% over the previous Wide-spread acceptance of Motorola year. semiconductors, customer-oriented Other product lines showed equally marketing activities, and emphasis significant progress. on highly advanced manufacturing techniques enabled the division to Introduction of the industry's first narrow the gap as the No. 1 chal- plastic silicon power transistors wit lenger in the industry. integral heat sink, 8-amp plastic encapsulated controlled rectifiers, 8New facilities were started, completed or activated in such diverse amp silicon bi-directional triodes, areas of the world as Seoul, Korea; and low-cost bi-lateral semiconducPatient with heart-triggering device gains normal, active life, Toulouse, France; Nogales, Mexico; semiconductors Hong Kong; and Geneva, Switzer- SEMICONDUCTOR land. These new facilities, plus the PRODUCTS Educational progress with Integrated Circuit Center in Mesa, computer-assisted instruction.. DIVISION Arizona, enable the division to supintegrated circuits ply its customers via an international tor triggers, all in the power and network of subsidiaries, sales offices, motor control field, produced large technical assistance centers, and dis- gains for the thyristor product tributors on three continents. Indeed groups. the division is now equipped to Developments such as the first provide two-day delivery of any successful all-aluminum package for Motorola semiconductor device anygermanium power transistors, the where in the free world. fast recovery rectifier line expandin The division was the recipient of the to become the largest in this highly President's "E" Award in recognition competitive field, and an increase of of achievement in export. more than 100% in what was alIn 1967, more than 60 new digital ready the industry's broadest line of integrated circuits were introduced silicon transistors qualified to mili and Motorola is now the only manu- tary specifications made 1967 a banfacturer of all major integrated cir- ner year in these areas. cuit logic families. Similar advances The division anticipates further sigwere made with linear integrated significant growth in both sales and circuits. Introduction of the indus- earnings in 1968. ••if-

The home entertainment products market failed to reach industry expectations in 1967. Color television sales were considerably below forecasts. Inventories became excessive at all levels—factory, wholesaler an retailer. The cost of balancing inventories had a marked impact on sales and profits, both of which wer off-target and substantially below 1966 levels.

Product mix also contributed to the 1967 problems. Typical of this was the unexpectedly high rate of consumer demand for black and white

television in the Fall, a condition which found manufacturers unable

to meet the requirements of this

market.

A significant achievement during

1967 was the introduction of Amer-

ica's first all-transistorized color

vision receiver, except for the rect

fier and picture tube, with modular

chassis circuitry. "The works in the

drawer" concept represents a major

move forward in providing consumers with products which are more reliable and easier to service. These receivers are now being marketed nationally under the promotional name "Quasar."

Console stereo phonograph sales were below expectations, partly restricted by the dollars moving into color television and by lack of sales attention at points along the distribution channel. Radio sales continued at a substantial rate with furthe growth of FM receivers. Auto sound products continue to offer attractive possibilities, with eight-track stereo tape cartridge player moving ahead in sales. This suggests important gains in the immediate and long-term future.

CONSUMER

PRODUCTS

DIVISION

The division continued its reorgan-

ization during 1967. Factory opera-

tions have been restructured and sig-

nificant improvements are resulting.

A new marketing concept has intro-

duced some exciting and promising

programs which are producing effec-

tive results and will be broadened

throughout 1968. The division expects to register 1968 sales increases in all major product categories, with a decided improvement in profit contribution.

14

Reliable communicatio critical times . .. m systems

Increased safety and effectiveness of mann

flights .. . satellit communications system

Record sales were achieved in 1967 as the division continued to support the nation's accelerating defense needs and space exploration programs. A planned mix of product improvement programs and the application of advanced technology to new equipment were significant factors in reaching this sales peak. Despite substantial losses on certain mechanical fuze programs, an overall profit position was maintained. A new, advanced concept for the use of synchronous satellites to rela communications, telemetry, tracking and ranging data from an Eartho r b i t i n g manned spacecraft to ground stations was successfully demonstrated in our Scottsdale lab-

oratories. This concept provides sig-

nificant cost reductions over present methods, marked improvements in

quality and quantity of data handled, and full-time communications during

Earth-orbit.

Deliveries of varied equipment for the Apollo manned lunar program continued. Motorola equipment performed perfectly on the three successful Lunar Orbiter missions and the Mariner 5 Venus probe.

The division's growth prospects were not affected by decreased funding for NASA's missions. Additional support was rendered to accelerated Air Force space programs which require the same advanced technologies. For example, Motorola is providing equipment for the Air Force Space/Ground/Link/System (SGLS), a worldwide space communications network. In support of our troops in Vietnam, the division's side-looking surveil-

lance radar and ground-air-ground communications systems continue to perform effectively. Additional diversified projects involve electroni countermeasures, integrated circuit fuzes, troposcatter microwave equipment, and line-of-sight communications systems, among others. The microwave products line continued to expand, with ready markets for new solid state transmitter receivers and multiplex equipment. Sales for the instrumentation products line more than doubled the previous year's record volume. Internal funding for research and development programs continue to yield successful proprietary product

International sales were up nearly

GOVERNMENT ELECTRONICS DIVISION

four-fold over 1966. While the Brussels office concentrated on serving European customers, other rapidly expanding new markets were developed in Canada, Japan, Taiwan, and Australia.

In 1968 the Chicago Center will concentrate on the design and production of advanced communications systems and displays. The Aerospace Center will pursue the same stateof-the-art military and space business on which it has built an established success pattern, while continuing to expand its instrumentatio products line into new areas. The division foresees continuing sales growth in 1968 with a significant improvement in profits.

Receiving latest medical developments while commu . .. stereo tape player

Fast, reliable starts in emergencies . .. electro alternator systems

Increased sales in stereo tape player alternators and ignition systems offset decreases in car radio volume due to reduced automobile production, reduced percentage of radios for Ford Motor Company, and the effect of the Ford strike. To augment the rapidly expanding 8-track stereo tape player program, a joint-venture company, AlpsMotorola, was formed in Japan in early 1967. The auto, home and portable tape decks and players manufactured by this company meet the high quality standards establishe

by Motorola, while prices remain competitive with other units built in Japan. Facilities are already being e

panded to meet heavy demands for these products.

A significant engineering accomplishment during the year was the design of a new series of combination push-button radio and stereo tape players for 1968 model Ford and Chrysler cars. Capacitor discharge ignition system sales increased substantially. Outboard Marine Corporation includes this unit on three engine models because of increased reliability and performance in adverse marine environments.

The Midland, Ontario plant reached near-capacity level, while meeting the requirements for car radios of Chrysler and American Motors in the United States. Heavy-duty alternators are being adopted by more and more truck manufacturers after proving their durability over several years of performance testing. Production has been doubled to meet the increasing demand. Sales of the standard alternator line continue to expand in agricultural

AUTOMOTIVE

PRODUCTS

DIVISION

and industrial areas. An increasing number of manufacturers are switching from generators to Motorola's all-electronic alternator systems because of their greater reliability an durability. Special alternators for military appl cations are providing a new area for future sales. Negotiations are under way in a number of countries for the manufacture and distribution of the division's products, both on an originalequipment and after-market basis.

Automated attendance checking and test scoring free the faculty for increased student

instruction . .. document rea

Regulated supply and control water flow from dam site to c . . . supervisory control sys

The division completed the best year in its six-year history. Orders increased 40% over the previous year. Additionally, two significant objectives were reached.

The first was a move to achieve international stature in the process controls field. Early in the year, a sales and service organization was established in Puerto Rico to serve the mushrooming petro-chemical industry in that area. Also, early in 19

the division established a fully owned

subsidiary in England. The subsidiary,

known as Motorola Control Systems, Ltd., will service the process control and information processing markets in the United Kingdom and the European Common Market.

Second, through product innovation

and sales penetration, the division

took a giant step in achieving its primary goal — placing Motorola

firmly in the field of information processing. At the Fall joint com-

puter conference in California, the division unveiled its MDR-1000 Document Reader, the first of a family of low-cost input terminals for information processing systems. The MDR-1000 provides a simple means for entering data into an electronic processing system directly from marked or p u n c h e d cards and documents. This offers systems designers a new, low-cost method of getting raw data directly from the source, without need for skilled data processing equipment operators. The i n i t i a l a p p l i c a t i o "industry-first" is in processing dail operating information for one of the Bell Telephone systems. The imme-

diate success of the MDR-1000 resulted in an expansion of this customer's program. Potential applications for the MDR-1000 in business, education, industry and government are virtually endless.

The division's continuing success in marketing its three major product lines — supervisory control systems, data systems and process controls systems — increases its technical skills and disciplines in the related field of information processing. The

primary skill involved is computer

technology.

In the area of process control instru mentation, for instance, the division received several petroleum refinery contracts to supply complete networks of field instruments, plus all

CONTROL

SYSTEMS

DIVISION

related computer interface equip-

ment. Three of these major contracts called for tying in with computers from three different computer manufacturers. Supervisory control system sales also gained impetus during the year. A large system was designed and installed for the Minnesota Power & Light Co., and other systems are under construction for the Getty Oil Co. and Marathon Pipeline Co. The sale of additional equipment for systems installed in previous years continued to increase during the year. This segment of the total sales picture is significant as engineering development costs were generally charged against the original sale.

ANNUAL MEETING The annual meeting will be held on Monday, May 6, 1968. A notice of the meeting, together with a form of proxy and a proxy statement, will be mailed to shareholder on or about April 8, 1968, at which time proxies will be solicited by management.

20

TRANSFER AGENTS Harris Trust and Savings Bank, 111 W. Monroe St., Chicago, Illinois 60690 Chemical Bank New York Trust Company 165 Broadway, New York, New York 10015

MOTOROLA AN

REGISTRARS Continental Illinois National Bank and Trust Company of Chicago 231 S. LaSalle St., Chicago, Illinois 6069 Irving Trust Company 1 Wall St., New York, New York 10015

MAJOR FACILITIES LOCATED ATChicago, Franklin Park, Quincy, Elgin, Pontiac, and Schaumburg, Illinois Phoenix, Scottsdale, and Mesa, Arizona Arcade, New York Midland, Canada Toulouse, France Seoul, Korea

ARE REGISTERED TRADEMARKS OF MOTOROLA INC.

BOARD OF DIRECTORS

ROBERT W. GALVIN MATTHEW J. HICKEY, JR. C. LESTER HOGAN DANIEL E. NOBLE ARTHUR L. REESE WALTER B. SCOTT EDWIN P. VANDERWICKEN ELMER H. WAVERING

OFFICERS ROBERT W. GALVIN Chairman of the Board

ELMER H. WAVERING President

DANIEL E. NOBLE

Vice Chairman of the Board

Group Executive, Technical Divisions

C. LESTER HOGAN

Executive Vice President and General Semiconductor Products Division

ARTHUR L. REESE Executive Vice President and General Consumer Products Division

EDWIN P. VANDERWICKEN Executive Vice President, Finance an

ALLEN H. CENTER Vice President, Public Relations

JOSEPH A. CHAMBERS Vice President, Assistant to the Pre

THOMAS J. CONNORS Vice President and Director of Marke Semiconductor Products Division

HERBERT D. DE BORDE Vice President and Manager of Operat Consumer & Automotive Products

LEO E. DWORK Vice President and Director of Product and Operations Groups Semiconductor Products Division

JOHN T. HICKEY Vice President, Planning

JOHN A. HUBENY Vice President and Controller

J. PAUL JONES Vice President and General Manager Government Electronics Division

OSCAR P. KUSISTO Vice President and General Manager Automotive Products Division

STEPHEN L. LEVY Vice President and Director, Integrated Circuit Operations Semiconductor Products Divisio

HOMER L. MARRS Vice President and Director of Communications Division

JOHN F. MITCHELL Vice President and Director of

Communications Products

Communications Division

KENNETH M . PIPER Vice President, Human Relation

EDWARD P. REAVEY, JR. Vice President, Marketing Consumer Products Division

WALTER B. SCOTT Vice President, Assistant to t

ROGER C. SMITH Treasurer

LEWIS D. SPENCER Vice President and General Att

ROBERT N. SWIFT Vice President and Director of Communications Division

JAMES A. TORRENCE Vice President and Manager Color Tube Plant

WILLIAM J. WEISZ Vice President and General Man Communications Division

RAYMOND A. ZACK Vice President and General Man Control Systems Division

9401 WE FRANKLIN PARK, ILL. 60131