To Our Stockholders And Other Friends

Image: Gary L. Tucker and Image: Christopher Galvin

We have tremendous confidence in the

future of our global communications and electronic

businesses.

Motorola in 1995 invested as never before in technology platforms that promise to improve the way people live and work. This investment included research and development, as well as plant and equipment to serve our customers more effectively. These expenditures went into semiconductor, telecommunications and other electronic products and facilities throughout the world.

Sales and earnings again set records, although the rate of growth was lower than in the previous two years. Concern over this slower growth rate was reflected in the price of Motorola common stock. While 1995 was disappointing in this respect, the five-year cumulative total return continues well above the Standard & Poor's 500 Index, with a compound annual growth rate of 35%. We remain optimistic about the long-term growth potential of our businesses, and in this year's summary annual report, we will examine Motorola's core strategies for building on our strengths in some of the fastest-growing arenas in the world.

Financial Results Sales in 1995 increased 22% to $27.0 billion from $22.2 billion in 1994. Earnings were $1.78 billion, or $2.93 per fully diluted common and common equivalent share, compared with $1.56 billion, or $2.65 per share, a year ago. Net margin on sales was 6.6% in 1995 and 7.0% in 1994.
The increases were broad-based throughout the company's major businesses, and growth was highest in international markets. Summary operating and financial results of our various business segments appear on page 22. Detailed results appear in the Proxy Statement.

Board of Directors Judy C. Lewent, senior vice president and chief financial officer, Merck & Co., and John A. White, dean of engineering, Georgia Institute of Technology, were elected to Motorola's Board of Directors in 1995. David R. Clare, John T. Hickey and Gardiner L. Tucker are not standing for reelection to the board, in line with our policy on age and tenure of directors. We acknowledge with appreciation their many contributions to Motorola.

The Future In the following pages, we will share with you our strategic vision, beginning with where we are today, the core competencies on which we are building and the cornerstones that define the corporation. These create exciting opportunities for sustained growth in a global marketplace where technology continually enhances the way people live and work.

In recent years, we have become increasingly global, and we expect that trend to continue. In 1995, 63% of our sales were outside the United States. Leading this growth is capital investment in communications infrastructure, especially in emerging economies that are anxious to become part of the global economy as soon as possible. This growth is expected to continue to be the highest in Asia, as well as in Latin America. Economic expansion is also likely to accelerate in Japan, while the U.S. and European economies should advance more slowly. Wireless markets in the more-developed economies continue to experience pricing pressures, which had a negative impact on net earnings in 1995. These conditions may continue to result in lower sales growth and difficult earnings comparisons for the next few quarters. Our major investments in technology and production capacity have also had a negative impact on net earnings, but we believe they are setting the stage for sustained long-term growth.

In terms of global penetration, wireless communications is still in its early stages of development, especially in consumer markets. As we have seen in cellular and other electronics industries, more-developed markets continue to be stimulated by exciting products and semiconductor applications such as the ones featured in this report. We expect demand for communications equipment to continue to be stimulated by new technologies, new radio frequency spectrum licensed by governments around the world and an increase in the number of service providers. We have tremendous confidence in the future of our global communications and electronics businesses.

Gary L. Tooker Christopher B. Galvin

Vice Chairman and Chief Executive Officer President and Chief Operating Officer


Gary L. Tooker		Christopher B. Galvin
Vice Chairman and Chief Executive Officer		President and Chief Operating Officer