DEFINITIONS
* Amounts attributable to Motorola Solutions, Inc. common shareholders.
** Non-GAAP financial information excludes from GAAP results the effects of share-based compensation expense, intangible assets amortization expense and highlighted items.
*** Business outlook excludes share-based compensation, intangible amortization and charges associated with items typically highlighted by the company in its quarterly earnings releases.
ABOUT MOTOROLA SOLUTIONS
Motorola Solutions (NYSE: MSI) creates innovative, mission-critical communication solutions and services that help public safety and commercial customers build safer cities and thriving communities. For ongoing news, visit www.motorolasolutions.com/newsroom or subscribe to a news feed.
MOTOROLA, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license. All other trademarks are the property of their respective owners. ©2015 Motorola Solutions, Inc. All rights reserved.
GAAP-1 | ||||||||
Motorola Solutions, Inc. and Subsidiaries | ||||||||
Condensed Consolidated Statements of Operations | ||||||||
(In millions, except per share amounts) | ||||||||
Three Months Ended | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Net sales from products | $ | 1,246 | $ | 1,212 | ||||
Net sales from services | 577 | 605 | ||||||
Net sales | 1,823 | 1,817 | ||||||
Costs of products sales | 513 | 529 | ||||||
Costs of services sales | 398 | 387 | ||||||
Costs of sales | 911 | 916 | ||||||
Gross margin | 912 | 901 | ||||||
Selling, general and administrative expenses | 283 | 346 | ||||||
Research and development expenditures | 165 | 196 | ||||||
Other charges | 1,922 | 34 | ||||||
Intangibles amortization | 1 | - | ||||||
Operating earnings (loss) | (1,459 | ) | 325 | |||||
Other income (expense): | ||||||||
Interest expense, net: | (41 | ) | (28 | ) | ||||
Gains on sales of investments and businesses, net | 2 | 3 | ||||||
Other | - | 6 | ||||||
Total other expense | (39 | ) | (19 | ) | ||||
Earnings (loss) from continuing operations before income taxes | (1,498 | ) | 306 | |||||
Income tax expense (benefit) | (572 | ) | 13 | |||||
Earnings (loss) from continuing operations | (926 | ) | 293 | |||||
Earnings from discontinued operations, net of tax | 1,127 | 50 | ||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 201 | $ | 343 | ||||
Amounts attributable to Motorola Solutions, Inc. common shareholders | ||||||||
Earnings (loss) from continuing operations, net of tax | $ | (926 | ) | $ | 293 | |||
Earnings from discontinued operations, net of tax | 1,127 | 50 | ||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 201 | $ | 343 | ||||
Earnings per common share |
||||||||
Basic: | ||||||||
Continuing operations | $ | (4.02 | ) | $ | 1.14 | |||
Discontinued operations | 4.89 | 0.19 | ||||||
$ | 0.87 | $ | 1.33 | |||||
Diluted: | ||||||||
Continuing operations | $ | (4.02 | ) | $ | 1.12 | |||
Discontinued operations | 4.89 | 0.19 | ||||||
$ | 0.87 | $ | 1.31 | |||||
Weighted average common shares outstanding |
||||||||
Basic | 230.5 | 257.5 | ||||||
Diluted | 230.5 | 261.2 | ||||||
Percentage of Net Sales* | ||||||||
Net sales from products | 68.3 | % | 66.7 | % | ||||
Net sales from services | 31.7 | % | 33.3 | % | ||||
Net sales | 100 | % | 100 | % | ||||
Costs of products sales | 41.2 | % | 43.6 | % | ||||
Costs of services sales | 69.0 | % | 64.0 | % | ||||
Costs of sales | 50.0 | % | 50.4 | % | ||||
Gross margin | 50.0 | % | 49.6 | % | ||||
Selling, general and administrative expenses | 15.5 | % | 19.0 | % | ||||
Research and development expenditures | 9.1 | % | 10.8 | % | ||||
Other charges | 105.4 | % | 1.9 | % | ||||
Intangibles amortization | 0.1 | % | 0.0 | % | ||||
Operating earnings (loss) | -80.0 | % | 17.9 | % | ||||
Other income (expense): | ||||||||
Interest expense, net: | -2.2 | % | -1.5 | % | ||||
Gains on sales of investments and businesses, net | 0.1 | % | 0.2 | % | ||||
Other | 0.0 | % | 0.3 | % | ||||
Total other expense | -2.1 | % | -1.0 | % | ||||
Earnings (loss) from continuing operations before income taxes | -82.2 | % | 16.8 | % | ||||
Income tax expense (benefit) | -31.4 | % | 0.7 | % | ||||
Earnings from continuing operations | -50.8 | % | 16.1 | % | ||||
Earnings from discontinued operations, net of tax | 61.8 | % | 2.8 | % | ||||
Net earnings | 11.0 | % | 18.9 | % | ||||
Less: Earnings attributable to noncontrolling interests | 0.0 | % | 0.0 | % | ||||
Net earnings attributable to Motorola Solutions, Inc. | 11.0 | % | 18.9 | % | ||||
* Percentages may not add up due to rounding |
GAAP-2 | ||||||||||||
Motorola Solutions, Inc. and Subsidiaries | ||||||||||||
Consolidated Statements of Operations | ||||||||||||
(In millions, except per share amounts) | ||||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Net sales from products | $ | 3,807 | $ | 4,109 | $ | 4,236 | ||||||
Net sales from services | 2,074 | 2,118 | 2,033 | |||||||||
Net sales | 5,881 | 6,227 | 6,269 | |||||||||
Costs of products sales | 1,678 | 1,808 | 1,795 | |||||||||
Costs of services sales | 1,372 | 1,310 | 1,280 | |||||||||
Costs of sales | 3,050 | 3,118 | 3,075 | |||||||||
Gross margin | 2,831 | 3,109 | 3,194 | |||||||||
Selling, general and administrative expenses | 1,184 | 1,330 | 1,472 | |||||||||
Research and development expenditures | 681 | 761 | 790 | |||||||||
Other charges | 1,968 | 70 | 11 | |||||||||
Intangibles amortization | 4 | 1 | 1 | |||||||||
Operating earnings (loss) | (1,006 | ) | 947 | 920 | ||||||||
Other income (expense): | ||||||||||||
Interest expense, net: | (126 | ) | (113 | ) | (66 | ) | ||||||
Gains on sales of investments and businesses, net | 5 | 37 | 26 | |||||||||
Other | (34 | ) | 9 | 1 | ||||||||
Total other expense | (155 | ) | (67 | ) | (39 | ) | ||||||
Earnings (loss) from continuing operations before income taxes | (1,161 | ) | 880 | 881 | ||||||||
Income tax expense (benefit) | (465 | ) | (59 | ) | 211 | |||||||
Earnings (loss) from continuing operations | (696 | ) | 939 | 670 | ||||||||
Earnings from discontinued operations, net of tax | 1,996 | 166 | 211 | |||||||||
Net earnings | 1,300 | 1,105 | 881 | |||||||||
Less: Earnings attributable to noncontrolling interests | 1 | 6 | - | |||||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 1,299 | $ | 1,099 | $ | 881 | ||||||
Amounts attributable to Motorola Solutions, Inc. common shareholders | ||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | (697 | ) | $ | 933 | $ | 670 | |||||
Earnings from discontinued operations, net of tax | 1,996 | 166 | 211 | |||||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 1,299 | $ | 1,099 | $ | 881 | ||||||
Earnings (loss) per common share |
||||||||||||
Basic: | ||||||||||||
Continuing operations | $ | (2.84 | ) | $ | 3.51 | $ | 2.29 | |||||
Discontinued operations | 8.13 | 0.62 | 0.73 | |||||||||
$ | 5.29 | $ | 4.13 | $ | 3.02 | |||||||
Diluted: | ||||||||||||
Continuing operations | $ | (2.84 | ) | $ | 3.45 | $ | 2.25 | |||||
Discontinued operations | 8.13 | 0.61 | 0.71 | |||||||||
$ | 5.29 | $ | 4.06 | $ | 2.96 | |||||||
Weighted average common shares outstanding |
||||||||||||
Basic | 245.6 | 266.0 | 292.1 | |||||||||
Diluted | 245.6 | 270.5 | 297.4 | |||||||||
Percentage of Net Sales* | ||||||||||||
Net sales from products | 64.7 | % | 66.0 | % | 67.6 | % | ||||||
Net sales from services | 35.3 | % | 34.0 | % | 32.4 | % | ||||||
Net sales | 100 | % | 100 | % | 100 | % | ||||||
Costs of products sales | 44.1 | % | 44.0 | % | 42.4 | % | ||||||
Costs of services sales | 66.2 | % | 61.9 | % | 63.0 | % | ||||||
Costs of sales | 51.9 | % | 50.1 | % | 49.1 | % | ||||||
Gross margin | 48.1 | % | 49.9 | % | 50.9 | % | ||||||
Selling, general and administrative expenses | 20.1 | % | 21.4 | % | 23.5 | % | ||||||
Research and development expenditures | 11.6 | % | 12.2 | % | 12.6 | % | ||||||
Other charges | 33.5 | % | 1.1 | % | 0.2 | % | ||||||
Intangibles amortization | 0.1 | % | 0.0 | % | 0.0 | % | ||||||
Operating earnings (loss) | -17.1 | % | 15.2 | % | 14.7 | % | ||||||
Other income (expense): | ||||||||||||
Interest expense, net: | -2.1 | % | -1.8 | % | -1.1 | % | ||||||
Gains on sales of investments and businesses, net | 0.1 | % | 0.6 | % | 0.4 | % | ||||||
Other | -0.6 | % | 0.1 | % | 0.0 | % | ||||||
Total other expense | -2.6 | % | -1.1 | % | -0.6 | % | ||||||
Earnings (loss) from continuing operations before income taxes | -19.7 | % | 14.1 | % | 14.1 | % | ||||||
Income tax expense (benefit) | -7.9 | % | -0.9 | % | 3.4 | % | ||||||
Earnings (loss) from continuing operations | -11.8 | % | 15.1 | % | 10.7 | % | ||||||
Earnings from discontinued operations, net of tax | 33.9 | % | 2.7 | % | 3.4 | % | ||||||
Net earnings | 22.1 | % | 17.7 | % | 14.1 | % | ||||||
Less: Earnings attributable to noncontrolling interests | 0.0 | % | 0.1 | % | 0.0 | % | ||||||
Net earnings attributable to Motorola Solutions, Inc. | 22.1 | % | 17.6 | % | 14.1 | % | ||||||
* Percentages may not add up due to rounding |
GAAP-3 | ||||||
Motorola Solutions, Inc. and Subsidiaries | ||||||
Consolidated Balance Sheets | ||||||
(In millions) | ||||||
December 31, | December 31, | |||||
2014 | 2013 | |||||
Assets | ||||||
Cash and cash equivalents | $ | 3,954 | $ | 3,225 | ||
Accounts receivable, net | 1,409 | 1,369 | ||||
Inventories, net | 345 | 347 | ||||
Deferred income taxes | 431 | 451 | ||||
Other current assets | 740 | 635 | ||||
Current assets held for disposition | - | 993 | ||||
Total current assets | 6,879 | 7,020 | ||||
Property, plant and equipment, net | 549 | 610 | ||||
Investments | 316 | 232 | ||||
Deferred income taxes | 2,151 | 1,990 | ||||
Goodwill | 383 | 361 | ||||
Other assets | 145 | 89 | ||||
Non-current assets held for disposition | - | 1,549 | ||||
Total assets | $ | 10,423 | $ | 11,851 | ||
Liabilities and Stockholders' Equity | ||||||
Current portion of long-term debt | $ | 4 | $ | 4 | ||
Accounts payable | 540 | 583 | ||||
Accrued liabilities | 1,706 | 1,763 | ||||
Current liabilities held for disposition | - | 870 | ||||
Total current liabilities | 2,250 | 3,220 | ||||
Long-term debt | 3,396 | 2,457 | ||||
Other liabilities | 2,011 | 2,314 | ||||
Non-current liabilities held for disposition | - | 171 | ||||
Total Motorola Solutions, Inc. stockholders' equity | 2,735 | 3,659 | ||||
Noncontrolling interests | 31 | 30 | ||||
Total liabilities and stockholders' equity | $ | 10,423 | $ | 11,851 | ||
Financial Ratios: | ||||||
Net cash** | $ | 554 | $ | 764 | ||
*Net cash = Total cash - Current portion of long-term debt - Long-term debt |
GAAP-4 | ||||||||
Motorola Solutions, Inc. and Subsidiaries | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(In millions) | ||||||||
Three Months Ended | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Operating | ||||||||
Net earnings | $ | 201 | $ | 343 | ||||
Earnings from discontinued operations, net of tax | 1,127 | 50 | ||||||
Earnings (loss) from continuing operations, net of tax | (926 | ) | 293 | |||||
Adjustments to reconcile Earnings to Net cash provided by operating activities: | ||||||||
Depreciation and amortization | 42 | 43 | ||||||
Non-cash other charges (income) | 2 | (3 | ) | |||||
Loss on pension settlement | 1,883 | - | ||||||
Gains on sales of investments and businesses, net | (2 | ) | (3 | ) | ||||
Share-based compensation expense | 20 | 29 | ||||||
Deferred income taxes | (626 | ) | (25 | ) | ||||
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | ||||||||
Accounts receivable | (264 | ) | (55 | ) | ||||
Inventories | (17 | ) | 1 | |||||
Other current assets | (38 | ) | 38 | |||||
Accounts payable and accrued liabilities | 50 | 269 | ||||||
Other assets and liabilities | (824 | ) | (7 | ) | ||||
Net cash provided by (used for) operating activities | (700 | ) | 580 | |||||
Investing | ||||||||
Acquisitions and investments, net | (26 | ) | (37 | ) | ||||
Proceeds from sales of investments and businesses, net | 3,380 | 13 | ||||||
Capital expenditures | (51 | ) | (59 | ) | ||||
Proceeds from sales of property, plant and equipment | 3 | 51 | ||||||
Proceeds from sales of Sigma Fund and short-term investments, net | - | 1,167 | ||||||
Net cash provided by investing activities | 3,306 | 1,135 | ||||||
Financing | ||||||||
Repayment of debt | (4 | ) | (1 | ) | ||||
Issuance of common stock | 41 | 56 | ||||||
Repurchase of common stock | (1,423 | ) | (362 | ) | ||||
Excess tax benefit from share-based compensation | - | 5 | ||||||
Payments of dividends | (82 | ) | (80 | ) | ||||
Distributions from discontinued operations | 27 | 153 | ||||||
Net cash used for financing activities | (1,441 | ) | (229 | ) | ||||
Discontinued Operations | ||||||||
Net cash provided by operating activities from discontinued operations | 32 | 162 | ||||||
Net cash used for investing activities from discontinued operations | (1 | ) | (8 | ) | ||||
Net cash used for financing activities from discontinued operations | (27 | ) | (153 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents from discontinued operations | (4 | ) | (1 | ) | ||||
Net cash provided by discontinued operations | - | - | ||||||
Effect of exchange rate changes on cash and cash equivalents | (56 | ) | 18 | |||||
Net increase in cash and cash equivalents | 1,109 | 1,504 | ||||||
Cash and cash equivalents, beginning of period | 2,845 | 1,721 | ||||||
Cash and cash equivalents, end of period | $ | 3,954 | $ | 3,225 | ||||
Financial Ratios: | ||||||||
Free cash flow* | $ | (751 | ) | $ | 521 | |||
*Free cash flow = Net cash provided by operating activities - Capital expenditures |
GAAP-5 | ||||||||||||
Motorola Solutions, Inc. and Subsidiaries | ||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||
(In millions) | ||||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Operating | ||||||||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 1,299 | $ | 1,099 | $ | 881 | ||||||
Earnings attributable to noncontrolling interests | 1 | 6 | - | |||||||||
Net earnings | 1,300 | 1,105 | 881 | |||||||||
Earnings from discontinued operations, net of tax | 1,996 | 166 | 211 | |||||||||
Earnings (loss) from continuing operations, net of tax | (696 | ) | 939 | 670 | ||||||||
Adjustments to reconcile Earnings from continuing operations to Net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 173 | 158 | 151 | |||||||||
Non-cash other income | - | (14 | ) | - | ||||||||
Gain on sale of building and land | (21 | ) | - | - | ||||||||
Loss on pension settlement | 1,883 | - | - | |||||||||
Loss from the extinguishment of long term debt | 37 | - | 6 | |||||||||
Share-based compensation expense | 94 | 120 | 146 | |||||||||
Gains on sales of investments and businesses, net | (5 | ) | (37 | ) | (26 | ) | ||||||
Deferred income taxes | (557 | ) | (334 | ) | 114 | |||||||
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | ||||||||||||
Accounts receivable | (62 | ) | (36 | ) | 81 | |||||||
Inventories | (5 | ) | (8 | ) | (2 | ) | ||||||
Other current assets | (47 | ) | 50 | (112 | ) | |||||||
Accounts payable and accrued liabilities | (120 | ) | (232 | ) | (106 | ) | ||||||
Other assets and liabilities | (1,359 | ) | (51 | ) | (248 | ) | ||||||
Net cash provided by (used for) operating activities from continuing operations | (685 | ) | 555 | 674 | ||||||||
Investing | ||||||||||||
Acquisitions and investments, net | (47 | ) | (57 | ) | 83 | |||||||
Proceeds from (used for) sales of investments and businesses, net | 3,403 | 61 | (58 | ) | ||||||||
Capital expenditures | (181 | ) | (169 | ) | (170 | ) | ||||||
Proceeds from sales of property, plant and equipment | 33 | 66 | 40 | |||||||||
Proceeds from sales of Sigma Fund and short-term investments, net | - | 2,133 | 1,075 | |||||||||
Net cash provided by investing activities from continuing operations | 3,208 | 2,034 | 970 | |||||||||
Financing | ||||||||||||
Repayment of debt | (465 | ) | (4 | ) | (413 | ) | ||||||
Net proceeds from issuance of debt | 1,375 | 593 | 747 | |||||||||
Issuance of common stock | 135 | 165 | 133 | |||||||||
Repurchase of common stock | (2,546 | ) | (1,694 | ) | (2,438 | ) | ||||||
Excess tax benefit from share-based compensation | 11 | 25 | 20 | |||||||||
Payments of dividends | (318 | ) | (292 | ) | (270 | ) | ||||||
Contributions to Motorola Mobility | - | - | (73 | ) | ||||||||
Distributions from discontinued operations | 93 | 365 | 217 | |||||||||
Net cash used for financing activities from continuing operations | (1,715 | ) | (842 | ) | (2,077 | ) | ||||||
Discontinued Operations | ||||||||||||
Net cash provided by operating activities from discontinued operations | 95 | 389 | 396 | |||||||||
Net cash provided by (used for) investing activities from discontinued operations | 4 | (24 | ) | (173 | ) | |||||||
Net cash used for financing activities from discontinued operations | (93 | ) | (365 | ) | (217 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents from discontinued operations | (6 | ) | - | (6 | ) | |||||||
Net cash provided by discontinued operations | - | - | - | |||||||||
Effect of exchange rate changes on cash and cash equivalents from continuing operations | (79 | ) | 10 | 20 | ||||||||
Net increase (decrease) in cash and cash equivalents | 729 | 1,757 | (413 | ) | ||||||||
Cash and cash equivalents, beginning of period | 3,225 | 1,468 | 1,881 | |||||||||
Cash and cash equivalents, end of period | $ | 3,954 | $ | 3,225 | $ | 1,468 | ||||||
Financial Ratios: | ||||||||||||
Free cash flow* | $ | (866 | ) | $ | 386 | $ | 504 | |||||
*Free cash flow = Net cash provided by operating activities - Capital expenditures |
GAAP-6 | |||||||||||||
Motorola Solutions, Inc. and Subsidiaries | |||||||||||||
Segment Information | |||||||||||||
(In millions) | |||||||||||||
Net Sales | |||||||||||||
Three Months Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | % Change | |||||||||||
Products | $ | 1,246 | $ | 1,212 | 3 | % | |||||||
Services | 577 | 605 | -5 | % | |||||||||
Total Motorola Solutions | $ | 1,823 | $ | 1,817 | 0 | % | |||||||
Year Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | % Change | |||||||||||
Products | $ | 3,807 | $ | 4,109 | -7 | % | |||||||
Services | 2,074 | 2,118 | -2 | % | |||||||||
Total Motorola Solutions | $ | 5,881 | $ | 6,227 | -6 | % | |||||||
Operating Earnings (loss) | |||||||||||||
Three Months Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | % Change | |||||||||||
Products | $ | (944 | ) | $ | 237 | -498 | % | ||||||
Services | (515 | ) | 88 | -685 | % | ||||||||
Total Motorola Solutions | $ | (1,459 | ) | $ | 325 | -549 | % | ||||||
Year Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | % Change | |||||||||||
Products | $ | (667 | ) | $ | 639 | -204 | % | ||||||
Services | (339 | ) | 308 | -210 | % | ||||||||
Total Motorola Solutions | $ | (1,006 | ) | $ | 947 | -206 | % | ||||||
Operating Earnings % | |||||||||||||
Three Months Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Products | -75.8 | % | 19.6 | % | |||||||||
Services | -89.3 | % | 14.5 | % | |||||||||
Total Motorola Solutions | -80.0 | % | 17.9 | % | |||||||||
Year Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Products | -17.5 | % | 15.6 | % | |||||||||
Services | -16.3 | % | 14.5 | % | |||||||||
Total Motorola Solutions | -17.1 | % | 15.2 | % |
Non-GAAP-1 | ||||||||||||||||||
Motorola Solutions, Inc. and Subsidiaries | ||||||||||||||||||
Non-GAAP Adjustments (Intangibles Amortization Expense, Share-Based Compensation Expense and Highlighted Items) | ||||||||||||||||||
Q1 2014 | ||||||||||||||||||
PBT | Tax | PAT | ||||||||||||||||
Highlighted Items | Statement Line | (Inc)/Exp | Inc/(Exp) | (Inc)/Exp | EPS impact | |||||||||||||
Intangibles amortization expense | Intangibles amortization | $ | 1 | $ | - | $ | 1 | $ | - | |||||||||
Share-based compensation expense | Cost of sales, SG&A and R&D | 29 | 9 | 20 | 0.08 | |||||||||||||
Reorganization of business charges | Cost of sales and Other charges | 10 | 2 | 8 | 0.03 | |||||||||||||
Gain on sale of building and land | Other charges | (21 | ) | (8 | ) | (13 | ) | (0.05 | ) | |||||||||
Recognition of previously unrecognized income tax benefits | Income tax expense | - | 29 | (29 | ) | (0.11 | ) | |||||||||||
Total impact on Net earnings | $ | 19 | $ | 32 | $ | (13 | ) | $ | (0.05 | ) | ||||||||
Q2 2014 | ||||||||||||||||||
PBT | Tax | PAT | ||||||||||||||||
Highlighted Items | Statement Line | (Inc)/Exp | Inc/(Exp) | (Inc)/Exp | EPS impact | |||||||||||||
Intangibles amortization expense | Intangibles amortization | $ | 1 | $ | - | $ | 1 | $ | - | |||||||||
Share-based compensation expense | Cost of sales, SG&A and R&D | 26 | 9 | 17 | 0.07 | |||||||||||||
Reorganization of business charges | Cost of sales and Other charges | 28 | 8 | 20 | 0.08 | |||||||||||||
Legal settlement | Other charges | 8 | 3 | 5 | 0.02 | |||||||||||||
Total impact on Net earnings | $ | 63 | $ | 20 | $ | 43 | $ | 0.17 | ||||||||||
Q3 2014 | ||||||||||||||||||
PBT | Tax | PAT | ||||||||||||||||
Highlighted Items | Statement Line | (Inc)/Exp | Inc/(Exp) | (Inc)/Exp | EPS impact | |||||||||||||
Intangibles amortization expense | Intangibles amortization | $ | 1 | $ | - | $ | 1 | $ | - | |||||||||
Share-based compensation expense | Cost of sales, SG&A and R&D | 20 | 6 | 14 | 0.06 | |||||||||||||
Reorganization of business charges | Cost of sales and Other charges | 20 | 6 | 14 | 0.06 | |||||||||||||
Pension settlement related expenses | Other charges | 11 | 4 | 7 | 0.03 | |||||||||||||
Loss from the extinguishment of long-term debt | Other expense (income) | 37 | 14 | 23 | 0.09 | |||||||||||||
Gain on investment | Other expense (income) | (10 | ) | - | (10 | ) | (0.04 | ) | ||||||||||
Tax expense to establish foreign valuation allowance | Income tax expense | - | (55 | ) | 55 | 0.22 | ||||||||||||
Revaluation of deferred taxes for change in effective state tax rates | Income tax expense | - | 16 | (16 | ) | (0.07 | ) | |||||||||||
Total impact on Net earnings | $ | 79 | $ | (9 | ) | $ | 88 | $ | 0.35 | |||||||||
Q4 2014 | ||||||||||||||||||
PBT | Tax | PAT | ||||||||||||||||
Highlighted Items | Statement Line | (Inc)/Exp | Inc/(Exp) | (Inc)/Exp | EPS impact | |||||||||||||
Intangibles amortization expense | Intangibles amortization | $ | 1 | $ | - | $ | 1 | - | ||||||||||
Stock-based compensation expense | Cost of sales, SG&A and R&D | 20 | 8 | 12 | 0.05 | |||||||||||||
Reorganization of business charges | Cost of sales and Other charges | 15 | 5 | 10 | 0.04 | |||||||||||||
Tax expense on legal entity reorganization | Income tax expense | - | (8 | ) | 8 | 0.04 | ||||||||||||
Reduction in net deferred tax liability for undistributed earnings | Income tax expense | - | 14 | (14 | ) | (0.06 | ) | |||||||||||
Revaluation of deferred taxes for change in effective state tax rates | Income tax expense | - | (12 | ) | 12 | 0.05 | ||||||||||||
Pension settlement loss, including related expenses | Other charges | 1,906 | 721 | 1,185 | 5.15 | |||||||||||||
Total impact on Net earnings | $ | 1,942 | $ | 728 | $ | 1,214 | $ | 5.27 | ||||||||||
FY 2014 | ||||||||||||||||||
PBT | Tax | PAT | ||||||||||||||||
Highlighted Items | Statement Line | (Inc)/Exp | Inc/(Exp) | (Inc)/Exp | EPS impact | |||||||||||||
Intangibles amortization expense | Intangibles amortization | $ | 4 | $ | - | 4 | 0.02 | |||||||||||
Stock-based compensation expense | Cost of sales, SG&A and R&D | 94 | 32 | 62 | 0.26 | |||||||||||||
Reorganization of business charges | Cost of sales and Other charges | 73 | 21 | 52 | 0.21 | |||||||||||||
Gain on sale of building and land | Other charges | (21 | ) | (8 | ) | (13 | ) | (0.05 | ) | |||||||||
Recognition of previously unrecognized income tax benefits | Income tax expense | - | 29 | (29 | ) | (0.12 | ) | |||||||||||
Legal settlement | Other charges | 8 | 3 | 5 | 0.02 | |||||||||||||
Loss from the extinguishment of long-term debt | Other expense (income) | 37 | 14 | 23 | 0.09 | |||||||||||||
Gain on investment | Other expense (income) | (10 | ) | - | (10 | ) | (0.04 | ) | ||||||||||
Tax expense to establish foreign valuation allowance | Income tax expense | - | (55 | ) | 55 | 0.22 | ||||||||||||
Tax expense on legal entity reorganization | Income tax expense | - | (8 | ) | 8 | 0.03 | ||||||||||||
Reduction in net deferred tax liability for undistributed earnings | Income tax expense | - | 14 | (14 | ) | (0.06 | ) | |||||||||||
Revaluation of deferred taxes for change in effective state tax rates | Income tax expense | - | 4 | (4 | ) | (0.02 | ) | |||||||||||
Pension settlement loss, including related expenses | Other charges | 1,917 | 725 | 1,192 | 4.86 | |||||||||||||
Total impact on Net earnings | $ | 2,102 | $ | 771 | $ | 1,331 | $ | 5.42 |
Non-GAAP-2 | |||||||||||||
Motorola Solutions, Inc. and Subsidiaries | |||||||||||||
Non-GAAP Segment Information | |||||||||||||
(In millions) | |||||||||||||
Net Sales | |||||||||||||
Three Months Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | % Change | |||||||||||
Products | $ | 1,246 | $ | 1,212 | 3 | % | |||||||
Services | 577 | 605 | -5 | % | |||||||||
Total Motorola Solutions | $ | 1,823 | $ | 1,817 | 0 | % | |||||||
Year Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | % Change | |||||||||||
Products | $ | 3,807 | $ | 4,109 | -7 | % | |||||||
Services | 2,074 | 2,118 | -2 | % | |||||||||
Total Motorola Solutions | $ | 5,881 | $ | 6,227 | -6 | % | |||||||
Non-GAAP Operating Earnings | |||||||||||||
Three Months Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | % Change | |||||||||||
Products | $ | 394 | $ | 283 | 39 | % | |||||||
Services | 89 | 113 | -21 | % | |||||||||
Total Motorola Solutions | $ | 483 | $ | 396 | 22 | % | |||||||
Year Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | % Change | |||||||||||
Products | $ | 754 | $ | 775 | -3 | % | |||||||
Services | 315 | 381 | -17 | % | |||||||||
Total Motorola Solutions | $ | 1,069 | $ | 1,156 | -8 | % | |||||||
Non-GAAP Operating Earnings % | |||||||||||||
Three Months Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Products | 31.6 | % | 23.3 | % | |||||||||
Services | 15.4 | % | 18.7 | % | |||||||||
Total Motorola Solutions | 26.5 | % | 21.8 | % | |||||||||
Year Ended | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Products | 19.8 | % | 18.9 | % | |||||||||
Services | 15.2 | % | 18.0 | % | |||||||||
Total Motorola Solutions | 18.2 | % | 18.6 | % |
Non-GAAP-3 | ||||||||||||
Motorola Solutions, Inc. and Subsidiaries | ||||||||||||
Operating Earnings after Non-GAAP Adjustments | ||||||||||||
Q1 2014 | ||||||||||||
TOTAL | Products | Services | ||||||||||
Net sales | $ | 1,228 | $ | 753 | $ | 475 | ||||||
Operating earnings ("OE") | $ | 107 | $ | 39 | $ | 68 | ||||||
Above-OE non-GAAP adjustments: | ||||||||||||
Share-based compensation expense | 29 | 19 | 10 | |||||||||
Reorganization of business charges | 10 | 6 | 4 | |||||||||
Intangibles amortization expense | 1 | 1 | - | |||||||||
Gain on sale of building and land | (21 | ) | (14 | ) | (7 | ) | ||||||
Total above-OE non-GAAP adjustments | 19 | 12 | 7 | |||||||||
Operating earnings after non-GAAP adjustments | $ | 126 | $ | 51 | $ | 75 | ||||||
Operating earnings as a percentage of net sales - GAAP | 8.7 | % | 5.2 | % | 14.3 | % | ||||||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 10.3 | % | 6.8 | % | 15.8 | % | ||||||
Q2 2014 | ||||||||||||
TOTAL | Products | Services | ||||||||||
Net sales | $ | 1,393 | $ | 887 | $ | 506 | ||||||
Operating earnings ("OE") | $ | 138 | $ | 95 | $ | 43 | ||||||
Above-OE non-GAAP adjustments: | ||||||||||||
Share-based compensation expense | 26 | 14 | 12 | |||||||||
Reorganization of business charges | 28 | 18 | 10 | |||||||||
Intangibles amortization expense | 1 | 1 | - | |||||||||
Legal settlement | 8 | 5 | 3 | |||||||||
Total above-OE non-GAAP adjustments | 63 | 38 | 25 | |||||||||
Operating earnings after non-GAAP adjustments | $ | 201 | $ | 133 | $ | 68 | ||||||
Operating earnings as a percentage of net sales - GAAP | 9.9 | % | 10.7 | % | 8.5 | % | ||||||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 14.4 | % | 15.0 | % | 13.4 | % | ||||||
Q3 2014 | ||||||||||||
TOTAL | Products | Services | ||||||||||
Net sales | $ | 1,436 | $ | 921 | $ | 515 | ||||||
Operating earnings ("OE") | $ | 207 | $ | 141 | $ | 66 | ||||||
Above-OE non-GAAP adjustments: | ||||||||||||
Share-based compensation expense | 20 | 11 | 9 | |||||||||
Reorganization of business charges | 20 | 14 | 6 | |||||||||
Intangibles amortization expense | 1 | 1 | - | |||||||||
Pension settlement related expenses | 11 | 8 | 3 | |||||||||
Total above-OE non-GAAP adjustments | 52 | 34 | 18 | |||||||||
Operating earnings after non-GAAP adjustments | $ | 259 | $ | 175 | $ | 84 | ||||||
Operating earnings as a percentage of net sales - GAAP | 14.4 | % | 15.3 | % | 12.8 | % | ||||||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 18.8 | % | 19.4 | % | 17.7 | % | ||||||
Q4 2014 | ||||||||||||
TOTAL | Products | Services | ||||||||||
Net sales | $ | 1,823 | $ | 1,246 | $ | 577 | ||||||
Operating earnings | $ | (1,459 | ) | $ | (944 | ) | $ | (515 | ) | |||
Above-OE non-GAAP adjustments: | ||||||||||||
Stock-based compensation expense | 20 | 12 | 8 | |||||||||
Reorganization of business charges | 15 | 10 | 5 | |||||||||
Intangibles amortization expense | 1 | 1 | - | |||||||||
Pension settlement loss, including related expenses | 1,906 | 1,315 | 591 | |||||||||
Total above-OE non-GAAP adjustments | 1,942 | 1,338 | 604 | |||||||||
Operating earnings after non-GAAP adjustments | $ | 483 | $ | 394 | $ | 89 | ||||||
Operating earnings as a percentage of net sales - GAAP | -80.0 | % | -75.8 | % | -89.3 | % | ||||||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 26.5 | % | 31.6 | % | 15.4 | % | ||||||
FY 2014 | ||||||||||||
TOTAL | Products | Services | ||||||||||
Net sales | $ | 5,881 | $ | 3,807 | $ | 2,074 | ||||||
Operating earnings | $ | (1,006 | ) | $ | (667 | ) | $ | (339 | ) | |||
Above-OE non-GAAP adjustments: | ||||||||||||
Stock-based compensation expense | 94 | 55 | 39 | |||||||||
Reorganization of business charges | 73 | 48 | 25 | |||||||||
Intangibles amortization expense | 4 | 4 | - | |||||||||
Gain on sale of building and land | (21 | ) | (14 | ) | (7 | ) | ||||||
Legal settlement | 8 | 5 | 3 | |||||||||
Pension settlement loss, including related expenses | 1,917 | 1,323 | 594 | |||||||||
Total above-OE non-GAAP adjustments | 2,075 | 1,421 | 654 | |||||||||
Operating earnings after non-GAAP adjustments | $ | 1,069 | $ | 754 | $ | 315 | ||||||
Operating earnings as a percentage of net sales - GAAP | -17.1 | % | -17.5 | % | -16.3 | % | ||||||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 18.2 | % | 19.8 | % | 15.2 | % |