OTHER SELECTED FOURTH-QUARTER FINANCIAL RESULTS
- Revenue – Fourth-quarter sales were flat, including $27 million of unfavorable foreign currency impact, primarily reflecting growth in North America. Fourth-quarter Product sales grew 3 percent driven primarily by an improvement in devices, while Services declined 5 percent driven by lower iDEN and system integration sales.
- Operating margin – Fourth-quarter GAAP operating margin was -80 percent of sales. GAAP operating earnings were impacted by a $1.9 billion non-recurring charge related to the U.S. pension de-risking activity. Non-GAAP operating margin was 26.5 percent of sales reflecting $86 million in lower operating expenses compared with the fourth quarter of 2013, primarily due to staff reductions across all functions and lower pension and variable compensation expense.
- Taxes – The fourth-quarter 2014 GAAP effective tax rate from continuing operations resulted in a benefit of 38 percent, driven by the loss from continuing operations, as well as other benefits recorded throughout the year. The fourth quarter 2014 non-GAAP tax rate from continuing operations was 35 percent. This compares with a negative GAAP effective tax rate of 7 percent and a non-GAAP tax rate of 5 percent in the fourth quarter of 2013. The GAAP and non-GAAP tax rates in the fourth quarter of 2013 include the favorable impact of $113 million or $0.42 per share of net tax benefits associated with the recognition of certain foreign tax credits as a result of the implementation of a holding company structure for certain non-U.S. subsidiaries.
- Cash flow – The company used $700 million in operating cash from continuing operations during the quarter largely driven by incremental pension contributions of $846 million.
- Cash and cash equivalents – The company completed the sale of its Enterprise business to Zebra Technologies for $3.45 billion and ended the year with total cash of $4 billion. The company returned $1.5 billion to shareholders through share repurchases and cash dividends during the quarter and $2.9 billion for the full year.
OTHER SELECTED FULL-YEAR FINANCIAL RESULTS
- Revenue – Full-year sales declined 6 percent to $5.9 billion. The decrease in sales reflects a $302 million, or 7 percent, decrease in the Products segment driven by first-half declines in North America and lower Asia Pacific results.
- Operating margin – For the full year, GAAP operating margin was -17.1 percent of sales, driven by a $1.9 billion non-recurring charge related to the U.S. pension de-risking activities. Non-GAAP operating margin was 18.2 percent of sales, driven by $208 million in operating expense reductions for the full year. Pension expense and variable compensation were lower compared to the previous year.
- Taxes – The 2014 non-GAAP effective tax rate from continuing operations was 32 percent, compared with a non-GAAP effective tax rate from continuing operations of 2 percent in the fourth quarter of 2013. The 2013 GAAP and non-GAAP full-year tax rates include the favorable impact of $337 million or $1.25 per share of net tax benefits associated with the recognition of certain foreign tax credits as a result of the implementation of a holding company structure for certain non-U.S. subsidiaries.
- Cash flow – The company used $685 million in operating cash from continuing operations during the year largely driven by pension contributions of $1.3 billion.
KEY HIGHLIGHTS
Sales Growth
- Secured significant projects that demonstrate strength in core products and services, including a $148 million statewide public safety network, radios and services agreement with the state of Michigan
- Demonstrated growing demand for services offerings with a 10-year, $62 million services agreement with Prince George’s County in Maryland; a two-year, $36 million managed services contract extension with the Victorian Mobile Data Network in Australia; a 10-year, $31 million lifecycle services agreement with Las Vegas Metropolitan Police Department in Nevada; and a multi-year, $15 million managed services contract with Forestal Mininco in Chile
- Showed strength in commercial markets with a multimillion dollar TETRA digital radio system for Dow Chemical Netherlands, a $12 million ASTRO® digital radio system for a U.S. chemical company, and a $2 million WAVE® push-to-talk over broadband contract with a Mexico petroleum company
