Motorola Spins Off Chip BizMotorola Spins Off Chip Biz

SCHAUMBURG, Ill. -- Motorola, Inc. (NYSE: MOT - News) today announced that a Registration Statement on Form S-1 has been filed with the U.S. Securities and Exchange Commission (SEC) in connection with the proposed separation of Motorola's semiconductor operations into a publicly traded company. The filing was made by SPS Spinco, Inc., the temporary name of the entity that will operate Motorola's semiconductor operations following the initial public offering. The new name of the entity will be selected prior to the offering.

Under the transaction, SPS Spinco intends to issue shares of its Class A common stock in an initial public offering. Following the initial public offering, Motorola will own all the outstanding shares of SPS Spinco's Class B common stock. Motorola later intends to distribute all of its ownership interest in SPS Spinco to Motorola's common shareholders in a tax-free spin- off by means of a special dividend. The distribution is anticipated to occur prior to the end of 2004.

Completion of the distribution is contingent upon the satisfaction or waiver of a variety of conditions, including, among other things, the receipt of a favorable tax ruling from the IRS and/or a favorable opinion of Motorola's tax advisor as to the tax-free nature of the distribution for U.S. federal income tax purposes. As a result, the distribution may not occur at the contemplated time and may not occur at all.

Motorola Inc.