摩托罗拉公司1963年年报

TABLE OF CONTENTS

HIGHLIGHTS OF 1963/2 BOARD OF DIRECTORS / 2 : LETTER TO SHAREHOLDERS/3 FINANCIAL REPORT: BALANCE SHEET/4 STATEMENT OF EARNINGS / 6 TEN YEAR FINANCIAL SUMMARY / 7 OPERATING DIVISION SUMMARIES / 8-10 PICTORIAL PRESENTATION OF FACILITIES / 11-20

Highlights of 1963 To the Shareholders

SALES AT RECORD $377 MILLION, UP NEARLY 9% OVER $346 MILLION IN 1962.

OPERATING EARNINGS $3.21 PER SHARE, UP NEARLY 6% OVER $3.03 FOR 1962.

CAPITAL EXPENDITURES $22,200,000.

TOTAL NEW FACILITIES IN EXCESS OF 600,000 SQUARE FEET.

COMPLETE NEW TRANSISTORIZED PORTABLE 2-WAY RADIO LINE.

INITIAL PRODUCTION OF COLOR TV SETS WITH MOTOROLA-DEVELOPED PICTURE TUBE.

DOLLAR INCREASE OF 30% IN SEMICONDUCTOR SALES.

NOTEWORTHY PROGRESS IN SALES OF ALTERNATORS AND IGNITION SYSTEMS.

MILITARY DIVISION SALES HIGHEST SINCE WORLD WAR II.

SIGNIFICANT CONTRACTS FOR INTEGRATED CIRCUITS.

INITIAL INSTALLATION OF SOLID STATE DATA, TELEMEMORY AND PROCESS CONTROL SYSTEMS.

AEROSPACE ASSIGNMENTS FOR GEMINI RENDEZVOUS AND APOLLO MOON FLIGHTS.

Board of Directors FIRST ROW Matthew J. Hickey, Jr. Daniel E. Noble Arthur L. Reese

SECOND ROW Walter B. Scott Edward R. Taylor Edwin P. Vanderwicken Elmer H. Wavering

NEXT PAGE Robert W. Galvin

Motorola's businesses are based on the electronic sciences. Since the mid-1950s the electronic sciences have expanded at an accelerating pace. This new knowledge opened many new commercial opportunities. Starting from that period until recently, Motorola's effo have been directed to searching for many of the new applications of this expanding electronic science. One of our basic concerns was selecting the most promising of them. As we searched we found many such opportunities. In consumer products, we could look forward to color television. In auto motive products, we foresaw new electronic applications in alternators and ignition systems. New techniques in communications and new uses such as hospital communications could strengthen our communication service to society. The advent of the solid state science offered new opportunities in componentry and in the general field of controls. In orde to keep abreast of the technologies that were to be learned in the military and space fields, we determined that three separate government products laboratories were desirable. And also, we anticipated potential in aircraft communications/navigation and hearing aids. Although, we elected not to pursue certain potentially proihising business opportunities because we did not feel that we could successfully activate each of them, we felt th it was necessary for timing, competitive and growth reasons to reach out and establish ourselves in many such as outlined above. The important factor that we want to emphasize to the shareholders about these efforts at this time is that in 1963 the corporation turned its attention to the consolidation and firming up of these various efforts as well as the

pruning of a few that no longer fit our objectives. In the course of this consolidating exercise it was evident that one of our military facilities was no longer essential as a separate entity, so we merged our Riverside, California laboratory with our Western Military Center in Phoenix. The aircraft radio business was judged to require either considerable additional investment or consolidation with a company whose products would complement ours. We chose the second course and sold our aircraft radio operations to another firm. The hospital communications activity was moved into our Communications Division. The hearing aid business proved not to fit the Motorola complex. It was sold back early in 1964 to one of the principals from whom it was originally acquired. However, most of the areas of emphasis, selection, and increased commitment are developing and growing soundly. Although not content with their earnings in all cases, we are confident that each of them ultimately, and most of them shortly, will contribute to a stronger company. Our Communications Division again enjoyed growth during 1963 and contributed improved earnings. The prospects are for further growth in 1964. The Automotive Division enjoyed an outstanding sales year in car radio, and firmly established itself in the alternator business. Sales prospects are good for 1964. The Consumer Products Division suffered from the industry-wide reduction in radio sales and the disappointing year in stereophonic phonographs. Its sales of black and white television were well maintained although somewhat affected by lack of color television to complete the line. T Division's efforts to introduce our new 23" rectangular, short-necked color television tube were delayed because of processing difficulties. The tube is now back in production at an accelerating pace and we hope color television will contribute significantly to both sales and earnings in 1964. Motorola's contribution to the military and space programs continues to be important to the nation as well as the company. Military sales continue to represent approximately 15% of our activities. The Division operated at an improved earnings level. The Semiconductor Division again enjoyed significant growth and achieved major advances in device performance as well as in integrated circuit development. Further growth and improved profitability are anticipated. The company has determined that the general field of controls represents a significant long-term opportunity. Losses will be incurred again in 1964 as we prepare for this future. The losses will be reduced during the year, and the prospects for 1965 are brighter. Revenues from Motorola's international business improved in 1963 and are anticipated to increase again in 1964. We expect the corporation will show increases in both sales and earnings in 1964. FOR THE BOARD OF DIRECTORS

MARCH 13, 1964 PRESIDENT

ola, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31

ASSETS

Current assets

Cash Short-term investments, at cost Accounts receivable United States government Other Allowance for doubtful accounts Costs recoverable under United States govern contracts, less progress billings Inventories, at the lower of average cost or Other current assets

Total current assets

Plant and equipment—less depreciation (note 1) Sundry assets, net Patents and debenture expense—less amortizatio

1963 1962

$ 7,876,905 $ 6,951,241 4,766,123 11,815,863

12,803,501 10,317,838 59,888,040 60,907,231 (2,478,099) (1,621,023)

5,839,035 9,915,619 49,348,825 42,633,352 2,452,083 2,702,538

140,496,413 143,622,659

67,283,543 54,783,818 3,206,174 3,889,812 491,284 532,933 $211,477,414 $202,829,222

NOTES TO FINANCIAL STATEMENTS I/The companies' investment in plant and equipment at December 31, 1963 and 1962 was as follows: 1963 1962 Land—at cost $ 3,127,574 $ 3,535,240 Buildings—at cost, less depreciation (1963, $13,719,523; 1962, $11,316,989) 39,950,000 31,283,655

Machinery and equipment—at cost, less depreciation (1963, $18,718,554; 1962, $15,525,093) 21,662,502 17,628,179 Dies, tools, and leasehold improvements—at cost, less amortization 2,543,467 2,336,744 $67,283,543 $54,783,818

Forty-eight per cent ($448,000 in 1963 and $219,000 in 1962) of the "investment credit" in respect of acquisition of qualified facilities, obtained under the Internal Revenue Act of 1962 as a credit against the federal income tax liability of the companies, has been applied by them as a reduction of federal income tax ex-

LIABILITIES 1963 1962

Current liabilities

Current maturities of long-term debt $ 1,570,594 $ 1,567,424 Accounts payable—trade 20,360,029 21,942,506 Federal income taxes, less United States Treasury obligations of $9,450,950 in 1963 and $8,282,316 in 1962 Other taxes 4,109,097 3,681,571 Contribution to employees' profit sharing fund 4,210,417 4,236,647 Product and service warranties 1,237,257 1,178,234 Other 16,650,167 14,212,088

• Total current liabilities 48,137,561 46,818,470

Long-term debt (note 2) 42,604,486 44,175,039 Shareholders' equity Capital stock, $3.00 par value. Authorized, 6,000,000 shares. Outstanding, 4,026,872 shares (net of 3,410 treasury shares) (note 3) 12,080,616 12,080,616 Additional paid-in capital 13,844,820 13,844,820 Retained earnings (note 4) 94,809,931 85,910,277 Total shareholders' equity 120,735,367 111,835,713 $211,477,414 $202,829,222

pense for the respective years; the remaining 52% portion has 3/Under the Employee Share Option Plan adopted in 1960, opbeen deferred to subsequent periods to offset the effect of reduced tions may be granted to key employees to purchase Motorola, Inc. depreciation allowances arising from the total credit. shares at not less than 95% of market value at date of grant. The options granted become exercisable two years after the date 2/Long-term debt at December 31, 1963 and 1962 consisted of of grant; they expire at the end of ten years and are contingent the following: upon continued employment by the company or its subsidiaries. 1963 1962 4%% Debentures due April 1, 1986 During 1963 options to purchase 39,000 shares were granted and (with annual sinking fund require- options on 5,500 shares were terminated; no options were exerments commencing in 1967) $30,000,000 $30,000,000 cised. At the year end 90,080 shares were under option, at an aggregate option price of $6,527,000, of which 45,380 shares were Notes payable currently exercisable, in the total amount of $3,393,000; an addi3%%, due $1,000,000 annually to tional 109,900 shares were reserved for options which may be 1965, $1,500,000 in 1966, and $500,000 granted until May 2, 1965. annually thereafter to 1972 6,500,000 7,500,000 4%%, due $500,000 annually, 1964- 4/At December 31, 1963 approximately $32,435,000 of retained 1976 6,500,000 7,000,000 earnings was free from dividend restrictions contained in the debenture and note agreements. Real estate mortgages 1,175,080 1,242,463 5/The companies are obligated under repurchase and other agree44,175,080 45,742,463 Less current maturities, included in ments, principally in connection with the financing of sales of current liabilities 1,570,594 1,567,424 products to consumers, and are defendants in suits and claims, which it is believed will have no material effect on the business Noncurrent portion of long-term debt $42,604,486 $44,175,039 of the companies.

Motorola, Inc. and Subsidiajjg^ STATEMENT OF CONSOLIDATED EARNINGS AND RETAINED EARN

I YEARS ENDED DECEMBER 31

SALES AND OTHER REVENUES

I Manufacturing and other costs of sales I Selling, service, and administrative expenses I Depreciation of plant and equipment I Contribution to employees' profit sharing fund I Interest and amortization of debenture expense

I Total costs and other expenses

I Income before federal income taxes I Federal income taxes

I EARNINGS (per share outstanding at end of year: 1963, $3.21; 1962, $3.03 plus 25$! of nonrecurring 1 capital gain from sale of finance subsidiary) 1 Retained earnings at beginning of year

1 T

1 Cash dividends declared $1.00 per sh

1 Retained earnings at end of year (note 4)

1 See accompanying notes to financial statements.

ACCOUNTANTS' REPORT

1963 1962

$377,852,809 $346,881,779

275,720,213 250,434,021 60,406,904 55,788,368 8,150,707 7,416,150 4,210,417 4,236,647 2,238,042 2,492,079

350,726,283 320,367,265

27,126,526 26,514,514 14,200,000 13,308,000

12,926,526 13,206,514 85,910,277 76,731,535

98,836,803 89,938,049

4,026,872 4,027,772

$ 94,809,931 $ 85,910,277

The Board of Directors and Shareholders of Motorola, Inc.: We have examined the consolidated balance sheet of Motorola, Inc. and subsidiaries as of December 31, 1963 and the related statement of earnings and retained earnings for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. It was not practicable to confirm accounts receivable from United States government departments or agencies by communication with them but we satisfied ourselves as to such accounts by means of other auditing procedures. In our opinion, the accompanying consolidated balance sheet and statement of consolidated earnings and retained earnings present fairly the financial position of Motorola Inc. and subsidiaries at December 31, 1963 and the results of their operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.

PEAT, MARWICK, MITCHELL & CO.

Chicago, Illinois, February 2A, 196U

SALES AND OTHER $206,821,801 228,428,063 229,266,055 228,431,385 218,909,968 293,081,127 301,049,185 298,219,845 346,881,779 377,852,809 REVENUES :

EARNINGS $7,572,024 8,490,539 7,966,817 7,824,431 7,356,213 14,171,237 12,633,813 9,517,308 13,206,514 12,926,526

CAPITAL $38,308,612 42,892,165 54,936,569 56,425,360 59,585,830 63,336,998 73,790,019 95,078,616 96,804,189 92,358,852

NET INVESTMENT IN PLANT AND $16,579,531 19,179,992 25,388,866 27,167,597 27,615,287 33,436,676 44,594,599 48,427,446 54,783,818 67,283,543 EQUIPMENT [

• Earnings per share are based on the number of shares outstanding at the end of the respective years, adjusted for subsequent share distributions. Earnings per share shown above for 1962 do not include 25c of nonrecurring capital gain from sale of finance subsidiary.

Operating Division Summaries

COMMUNICATIONS

The Communications Division maintained a position of leadership in its field despite increased competition. Realignment of the marketing structure in 1962 involving a new sales area headquartered in Atlanta, contributed to the gain by providing more intensive coverage of prospective customers. Nationwide sales to railroads, trucking companies, airlines and to the Bell and General Telephone companies improved during the year through concentrated sales efforts in these areas. In applying technological advances to specific market requirements, the Division introduced several significant new products in 1963. New models of the industry's leader—the MOTRAC two-way radio—were developed for operation in the 450 megacycle frequency band along with a series of base stations. The 450 me frequencies are the least crowded of those available to commercial radio users. A major customer for this new equipment was the Chicago Yellow Cab Company with 500 units. Important two-way radio contracts during the year included statewide networks for the Iowa Highway Department, the Washington State Highway Patrol, and Washington State Department of Natural Resources. In the public utility field, large systems were delivered to The Detroit Edison Company and Northern Illinois Gas Company. In 1963, the hospital communications product engineering and manufacturing activities were moved from Minneapolis to the Chicago plant for closer coordination with the companion radio paging and closed-circuit television lines. Motorola gained recognition as the leading full line suppli of hospital communications systems. A nationwide series of hospital symposia during the year was attended by more than 1,000 administrators, architects and consultants. Installation of systems for an increasing variety of uses highlighted the progress in the closed-circuit television product line. A few of the applications involved: telecastin United Airline flight information in terminals across the nation; watching steel mill blast furnaces; inspecting othe wise hard-to-reach sewers; and counting railroad cars in yard areas. More progress was made in resolving the intricate problems of traffic control. Motorola radio traffic control sys went on the air in Tampa and Miami, Florida. Existing systems in Los Angeles and Washington, D.C. were expanded.

CONSUMER PRODUCTS

Sales of the Consumer Products Division were approximately the same as 1962 while earnings were reduced as a result of heavy expenditures for the development of the new color television picture tube and the initiation of production at National Video Corporation. The Division had planned to provide its distributors and their dealers with color television receivers employing the Motorola-designed 23-inch rectangular short-neck picture

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tube in the second half of 1963. However, technical problems affecting yields were encountered in getting the tube into production. As a result, output was temporarily suspended and the timetable was delayed by about six months.

All during this period a most rigorous program of field testing was carried out with satisfactory results, and limited production was resumed at year end. Shipments of color receivers with the new picture tube began trickling out to distributors in January and will increase as production accelerates. The delay proved costly during 1963, both in terms of engineering expense and lack of color TV sales volume. An indirect effect was the reluctance of dealers to buy other Motorola consumer products until they received delivery of the wanted rectangular tube color sets. Motorola will continue in 1964 to market color receivers at the lower price ranges with the same 21-inch round tube used by other TV makers, but will be the only manufacturer to deliver 23-inch receivers with the new rectangular color tube for some time to come. Product innovations in 1963 also included several interesting radio and phonograph developments. Among these were the "Tandem" clock-portable radio, a complete line of FM/AM combination car radios, a cushioned window bench stereo phonograph and a uniquely styled line of FM stereo radios. A most unusual challenge was presented by The Greyhound Corp.—to provide personal passenger radio listening

Important new products introduced in 1963 include: 1) transisto 450 megacycle MOTRAC radio; 2) pushbutton radio-telephone; 3) transistorized solid-state "Handie-Talkie" portable radiopho

Top of Motorola's diverse line of color television sets is this color television-stereo phonograph combination in a stunning Tr cabinet by Drexel, with built-in FM/AM stereo radio.

while at the same time overcoming inherent problems of pilferage, sanitation and quality reception. Motorola designed a system and initial installations have been made in Greyhound buses on the east coast. Decided improvement in sales and profits is anticipated for 1964 with the company becoming an increasingly important factor in color television.

SEMICONDUCTOR PRODUCTS

A 45 percent expansion of physical facilities, 30 percent increase in dollar sales volume, introduction of new produc and significant progress in integrated circuitry summarize the year's results for the Semiconductor Products Division. The Division completed more than 400,000 feet of added space designed for the development and production of basic semiconductor materials, semiconductor processing, and manufacture of integrated circuits. Motorola was one of the few firms in the industry that increased sales volume in 1963. This was largely the result of the continuous research and development activity which produced a large number of new products, enabling the Division to compete in every major product area with as broad a line of devices as that offered by any company in the industry. Three major new product lines opening up new markets were: 1) the Silicon Controlled Rectifier—a small device

These four examples of the types of integrated circuits bei

veloped by the Semiconductor Products Division help illustr progress made in this new art during 1963.

This "box" contains miniaturized circuitry which will enabl nauts to communicate with earth in Apollo moon spacecraft. of parts approximates those in five conventional television

with a vast potential in the consumer area, providing infinit control of light and infinite variation of appliance motor speeds; 2) the High Current Rectifier—a versatile device made by a new technique that is helping the Division enter the large "electrical" market which includes such equipment as welding machines and elevators, electroplating equipment and other high-current-usage machinery; 3) the PNP Silicon Transistor—made by a new process (patent applied for) which will give Motorola a leadership position in this portion of the silicon transistor market. The Division also introduced new lines of varactor diodes, high-frequency silicon RF transistors, and multiple devices with two or more silicon transistors in the same package. The highlight of the year was the progress made in integrated circuits. In the new building, the Division put into effect its integrated circuitry plans. A major product introduction was Motorola's MECL system of integrated circuits for logic applications. This new series features a complete complement of circuits for designing entire computer systems using the current mode logic scheme. During the year Motorola also designed, developed and delivered a wide range of both linear and logic integrated circuits and became one of the first manufacturers to supply integrated circuits to military specifications. As a result of this proven performance and capability, the Division has received a number of significant orders for custom-built integrated circuits, including one order to supply seventeen types of integrated circuits for an advanced computer being developed by Autonetics Division of North American Aviation Company.

MILITARY ELECTRONICS

Activities of the Military Electronics Division during 1963 resulted in the largest volume of sales to the government since the close of World War II. Sales were up more than 15 percent, and profits improved over the previous year. The Division's role in military and aerospace systems during 1963 was highlighted by participation in programs ranging from manned space flight to communications and surveillance systems for ground troops. Perhaps the best known of these is the challenging Apollo manned lunar exploration. For Apollo, the Division is building a telecom-

munications system which will provide a link over which

astronauts will transmit information to an anxiously awaiting world. Motorola equipment will play another vital role in the Gemini man-in-space program. This is the program designed as a second step to Mercury and as prerequisite to moon landing. The Division, too, will provide key equipment for the Saturn vehicle, the launch booster which will carry the Apollo spacecraft on its first thrust into space. But, while the aerospace programs of the Division are important and challenging, there are others, less well known, which are equally as important and vital to national defense. Early in the year, the Division received a two-million dollar contract to develop the U.S. Army's new concept in communications called RAD A (Random Access Discrete Address). The system is designed to provide, without a central switching station, private line radio communication for many users.

The Air Force installed a Motorola supplied data acquisition and transmission system at its Edwards test center. The system is for use in test flights of various aircraft ranging from the RS-70 to the X-15. The Division is supplying the Digital Command Guidance System for the Navy's DASH, or drone antisubmarine helicopter. The decision to concentrate research and engineering effort upon selected applications of microcircuitry and integrated circuits in the areas of space exploration and space tactical systems has placed the Division in a very strong competitive position. Governmental spending in these areas is rising, in sharp contrast to the general trend toward reduction of expenditures. Since the Division cannot hope to cover the total military electronics field, selectivity is the key to an approach whic will enable the Division to identify the most rewarding research and development programs and participate in the new pace-making patterns which are developing under pressure from the rapidly changing technology.

Products for the automotive industry manufactured by Motorola include electronic alternator systems with their companion tr sistorized voltage regulators (left), transistor ignition sys right), and car radios (lower right).

Flexibility is provided through these variations in the card equipment which is part of Motorola's data system concept.

AUTOMOTIVE PRODUCTS

The automobile industry's second successive seven-million car year helped boost the Automotive Products Division to record sales for 1963. Motorola supplied fully transistorized radios to Ford Motor Company, Chrysler Corporation, American Motors Corporation, Renault, Inc. (U.S.), Checker Motors Corporation and International Harvester Company. Units supplied 10

to American Motors Corporation included combination AM/FM transistorized radios. Motorola will begin supplying radios for two new customers in 1964—Volkswagen (U.S.) and The White Motor Company. In 1963, the Division established an aftermarket distributor organization for sale of electronic alternator systems and transistor ignition systems. The new organization serves the entire United States and Canada through 55 major distributing points. The alternator product line was expanded during the year giving Motorola a range of systems designed to meet practically any vehicle application. Additions included 30 and 45 ampere alternators featuring an enclosed chamber for protection against high humidity, dust and other adverse atmospheric conditions. The units are especially suited for marine, agricultural, construction and various industrial applications. Also added to the line were heavy duty alternators ranging in capacity from 70 to 120 amps for use in trucks, buses and other heavy equipment. The Division supplied alternators for original equipment to American Motors Corporation, Checker Motors Corporation and Kaiser Jeep Corporation (Willys). Alternator systems are now being built "for three European manufacturers through Motorola's joint venture in France, S.E.V./Motorola S.A. These companies are Renault in France, BMW in Germany, and AB Volvo Penta in Sweden. A new manufacturing plant has been purchased in Blois, France, for alternator production. Sales of transistor ignition systems increased during the year. They are being adopted in growing numbers by fleet operators for the reliability and economy advantages they offer.

SOLID STATE SYSTEMS

The Division's second full year of operation brought significant advances. During the year there were initial installations of contro systems for each of the three major product lines. The sales and field engineering organization was strengthened. By

year end, the successful performance of the initial installations was creating customer acceptance for the technological and economic advantages of solid state systems. The three major product lines are: digital supervisory systems for remote monitoring and control in petroleum, gas, water and power industries; digital data acquisition systems for monitoring loading operations at bulk petroleum plants and terminals; and analog control systems for monitoring and control in the continuous process fields such as the chemical, oil refining, petro-chemical, food processing and paper industries. These product lines were designed specifically in recogni-

tion of the needs existing among industries where there is a high degree of integrated operations in the processing, distribution and transportation of products. In 1963, among the companies contracting for Motorola systems were Humble Oil, Gulf Oil, Pittsburgh Plate Glass, Celanese, Cities Service, Monsanto Chemical, Mountain Fuel Supply, Arizona Public Service, American Oil, Natural Gas Pipeline of America and many others.

It is helpful in the case of Motorola to view the record of Facilities capital expenditures for plant, laboratories and equipment, and the resulting depreciation expense which is incurred as related to company-sponsored research and development expense. Motorola's capital expenditures result from growth of existing businesses but, in even greater degree, from the revolutionary electronic arts which Motorola has been exploring and the policy of the company to diversify into new businesses. Semiconductors, integrated circuits and solid state control systems are examples. Probably the most significant technological revolution in American industry is taking place in these new fields. From the chart below it is apparent that research and development and depreciation expense, combined, have increased from $6 million in 1954 to over $33 million in 1963. Beyond these expenses, there have been losses and costs associated with getting started in the new products and businesses that have grown out of the development efforts. The chart may suggest the fundamental changes in the nature of the company and its physical facilities in the past decade which have originated in great part as the result of the growth of research and development expenditures.

Ji

1954 55 56 57 58 59 60 61 62 63

• M COMPANY-SPONSORED RESEARCH AND DEVELOPMENT

! CAPITAL EXPENDITURES

rr~ DEPRECIATION

In its 35 years, Motorola has grown to 19,000 people in eight major facilities now encompassing nearly four million square feet. The following pages contain a pictorial presentation of our physical facilities in a manner we hope indicates our growth and our increasing capabilities across a broad range of the electronic arts. 11

Franklin Park, Illinois Administrative and manufacturing facilities are combined at this location, covering 907,200 square fee of space. Television receivers and stereophonic high-fidelity phonographs are engineered and produced in this building. Car radios, alternators and transistor ignition systems are engineered here. A modern addition occupied in 1960 serves as administrative and executive headquarters for the corporation and for two operating divisions— Consumer Products and Automotive Products.

12

An extensive line of stereophonic high-fidelity phonograph consoles is manufactured at the Franklin Park plant. One of the final steps in the process involves visual inspection by expert

Conveyor systems add to efficiency in the production of black and white television sets. "Socks" hold picture tubes while hooks and platforms carry chassis to the lines for assembly. Corrugated boxes containing cabinets automatically roll along perimeter of manufacturing area to the proper stations for final assembly.

Motorola's exciting color television product line is being manufactured in the company's modern, efficient Franklin Park facility. Here an experienced engineer checks circuit alignment on Motorola set employing company-developed 23-inch rectangular color tube.

13

Thousands of tiny transistors are manufactured daily in the semiconductor facility.

This important piece of equipment is an electron microscope used to inspect the physical changes in semiconductors caused by process innovations. 14

Carefully controlled conditions enable the Division to manufacture integrated circuit exacting customer specifications. Here are rows of furnaces where various steps, such as diffusion and oxidation, are performed in sequence on integrated circuit wafers. Temperature, pressures and composition of the gases are strictly regulated.

£sr~

Phoenix, Arizona With more than 1,000,000 square feet of space, Motorola's Semiconductor Products Division is producing as wide a range of custom and standard lines of semiconductors as any company in e industry. Three expansions in the past five years have enabled the Division to become the nation's second largest producer of semiconductors.

15

Chicago, Illinois Steadily growing Communications Division now occupies 563,800 square feet of space on Augusta Boulevard in Chicago. Designed, engineered and produced here are all two-way radio equipment, closed-circuit television, hospital and radio paging systems, radio traffic control systems and precision measuring instruments. Communications control consoles such as this one being packaged for shipment to the Utica, New York, Police Department must be designed and built for the exactand distinct functional requirements of the users.

The degree of technical sophistication attained in hospital communi- Lightweight 2-way portable radiophones, frequently used in inclement cations systems requires trained manufacturing skills and constant weather by such agencies as police departments, go through dust, cold attention to quality control procedures. and rain tests. Rigid standards of reliability are applied to all units.

This large antenna—part of the Goddard Range and Division manufacturing facilities are models of efficient operations conducted in controlled Range Rate System which tracks objects between environments where the exacting requirements of space and military projects are met in the the earth and moon with an accuracy of 16 yards production of complex electronic equipment and systems. and within a speed of 4 inches per second—has already been used officially to track NASA's IMP (Interplanetary Monitoring Platform) satellite.

Application of advanced antenna science to ground, space and airborne The Chicago Military Center, part of the Military Electronics Division, is equipment requires extensive simulation and testing facilities. Here operated from this facility consisting of 160,700 square feet of space. an advanced solid state multiplexer undergoes critical design tests in the laboratory. Chicago, Illinois

Scottsdale, Arizona This is Motorola's Military Electronics Division headquarters, a modern 329,000 square-foot facility. The Division develops and produces equipment and systems for Army, Navy, Air Force and NASA programs.

Phoenix, Arizona

Motorola's history in Phoenix started in this building in 1950. Throughout the 1950's, while Motorola's flexibility in providing instrumentation serving as a research laboratory, it was the birthplace of many developments in modern and control systems meeting specific and stringent electronics, including the power transistor and early work in integrated circuitry. Motorola's customer requirements is illustrated by the building newest division—the Solid State Systems Division—is now located here. block approach.

19

Quincy, Illinois

Manufacturing facilities of the 337,000 foot Quincy, Illinois plant are devoted to car, home, portable and clock radios, and stereophonic high-fidelity phonographs.

Twelve separate turnstiles provide efficiency in assembling circuit panels for radios and phonographs.

Arcade, New York

Manufacturing for both the Automotive and Consumer Products Divisions is conducted at Motorola's Arcade, New York plant. Encompassing 120,000 square feet of space on a 19-acre plot of ground, the Arcade facility produces car radio tuners, alternator and transistor ignition systems.

At this station in the Arcade facility, Four housings are made for the elecelectronic alternators are given a series tronic alternator through single operation of electrical tests to check amperage, of this 400-ton aluminum die casting voltage, field current and noise levels. machine at the Arcade facility. 20

The annual meeting will be held on Monday, May 4, 1964. A notice of the meeting, together with a form of proxy and a proxy statement, will be mailed to shareholders on or about April 3, 1964,

at which time proxies will be solicited by management.

TRANSFER AGENTS

Harris Trust and Savings Bank

111 W. Monroe St., Chicago 90, Ill

Chemical Bank New York Trust Compa 165 Broadway, New York 15, New Yor

REGISTRARS

Continental Illinois National Bank Trust Company of Chicago

231 S. La Salle St., Chicago 90, I Irving Trust Company 1 Wall St., New York 15, New York

MOTOROLA INC. 94

and Officers

BOARD OF DIRECTORS

ROBERT W. GALVIN

MATTHEW J. HICKEY, JR.

DANIEL E. NOBLE ARTHUR L. REESE WALTER B. SCOTT EDWARD R. TAYLOR

EDWIN P. VANDERWICKEN

ELMER H. WAVERING

OFFICERS

ROBERT W. GALVIN President DANIEL E. NOBLE Executive Vice President ommunications, Semiconductor, Military ronics, and Solid State Systems Division ARTHUR L. REESE Vice President and General Manager, Communications Division WALTER B. SCOTT Vice President, Consumer and Automotive Production EDWARD R. TAYLOR Executive Vice President, Consumer Products Division EDWIN P. VANDERWICKEN Vice President for Finance, Treasurer, and Secretary ELMER H. WAVERING Executive Vice President, Automotive Products Division ALEX ARNOLD Vice President, Controlle ALLEN H. CENTER Vice President, Public Relations JOSEPH A. CHAMBERS President and Manager, Western Center, Military Electronics Division JOHN I. DAVIS ident, Consumer Products Engineering SYLVESTER R. HERKES President, Consumer Products Marketing C. LESTER HOGAN Vice President and General Manager, Semiconductor Products Division HOMER L. MARRS Vice President, Communications Sales KENNETH M. PIPER Vice President, Human Relations WILLIAM J. WEISZ ice President, Communications Products WILLIAM S. WHEELER Vice President and General Manager, Military Electronics Divisio

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