[May 05, 2016] |
|
Motorola Solutions Reports First-Quarter 2016 Financial Results
Motorola
Solutions, Inc. (NYSE: MSI) today reported its earnings results for
the first quarter of 2016. Click
here for a printable news release and financial tables.
SUPPORTING QUOTE
"We delivered strong earnings growth in the first quarter driven by our
North America business and Managed & Support services," said Greg Brown,
chairman and CEO of Motorola Solutions. "We're encouraged by the
progress in our services business and overall backlog, which positions
us well for continued earnings and cash flow growth."
KEY FINANCIAL RESULTS (presented in millions, except per share data
and percentages)
|
|
|
|
|
|
|
|
|
Q1 2016
|
|
Q1 2015
|
|
% Change
|
Sales
|
|
$
|
1,193
|
|
|
$
|
1,223
|
|
|
|
(2
|
)%
|
GAAP
|
|
|
|
|
|
|
|
Operating Earnings
|
|
$
|
100
|
|
|
$
|
119
|
|
|
|
(16
|
)%
|
% of Sales
|
|
|
8.4
|
%
|
|
|
9.7
|
%
|
|
|
|
EPS from continuing operations
|
|
$
|
0.10
|
|
|
$
|
0.40
|
|
|
|
(75
|
)%
|
Non-GAAP
|
|
|
|
|
|
|
|
Operating Earnings
|
|
$
|
166
|
|
|
$
|
156
|
|
|
|
6
|
%
|
% of Sales
|
|
|
13.9
|
%
|
|
|
12.8
|
%
|
|
|
|
EPS from continuing operations
|
|
$
|
0.52
|
|
|
$
|
0.38
|
|
|
|
37
|
%
|
Product Segment
|
|
|
|
|
|
|
|
Sales
|
|
$
|
702
|
|
|
$
|
758
|
|
|
|
(7
|
)%
|
GAAP Operating Earnings
|
|
$
|
51
|
|
|
$
|
64
|
|
|
|
(20
|
)%
|
% of Sales
|
|
|
7.3
|
%
|
|
|
8.4
|
%
|
|
|
|
Non-GAAP Operating Earnings
|
|
$
|
84
|
|
|
$
|
90
|
|
|
|
(7
|
)%
|
% of Sales
|
|
|
12.0
|
%
|
|
|
11.9
|
%
|
|
|
|
Services Segment
|
|
|
|
|
|
|
|
Sales
|
|
$
|
491
|
|
|
$
|
465
|
|
|
|
6
|
%
|
GAAP Operating Earnings
|
|
$
|
49
|
|
|
$
|
55
|
|
|
|
(11
|
)%
|
% of Sales
|
|
|
10.0
|
%
|
|
|
11.8
|
%
|
|
|
|
Non-GAAP Operating Earnings
|
|
$
|
82
|
|
|
$
|
66
|
|
|
|
24
|
%
|
% of Sales
|
|
|
16.7
|
%
|
|
|
14.2
|
%
|
|
|
|
*Non-GAAP financial information excludes the after-tax impact of
approximately $0.42 per diluted share related to share-based
compensation, intangible assets amortization expense and highlighted
items. Details on these non-GAAP adjustments and the use of non-GAAP
measures are included later in this news release.
OTHER SELECTED FINANCIAL RESULTS
-
Revenue - Sales decreased 2 percent, including $22 million of
unfavorable foreign currency impact and $61 million in sales
associated with the Airwave acquisition. These results include 2
percent growth in North America, which delivered increases in both
Products and Services sales. Overall company product sales declined
due to weakness in Latin America and Europe as well as currency
headwinds. The Services business increased 6 percent due to the
addition of Airwave and solid growth in organic Managed & Support
results. The Services business declined 8 percent excluding the impact
of Airwave, due primarily to currency headwinds and a decline in
systems integration revenues associated with a large project in Europe.
-
Operating margin - GAAP operating margin was 8.4 percent
of sales in the first quarter of 2016, compared with 9.7 percent in
the first quarter of 2015; non-GAAP operating margin was 13.9 percent
of sales, compared with 12.8 percent in the first quarter of 2015,
reflecting $43 million in lower operating expenses compared with the
first quarter of 2015, due to the company's cost reduction initiatives
and a stronger dollar.
-
Taxes - The first quarter of 2016 GAAP effective tax
rate was 23 percent. This compares with a tax rate of 31 percent in
the first quarter of 2015. The first quarter of 2016 non-GAAP tax rate
was 26 percent, compared with a tax rate of 29 percent in the first
quarter of 2015. The full-year non-GAAP tax rate is expected to be
approximately 33 percent.
-
Cash flow - The company generated $13 million in
operating cash from continuing operations during the quarter,
reflecting a decrease of $143 million over the prior year. Free cash
flow2 was a use of $38 million in the quarter. The decrease
was largely driven by incentive costs and higher tax payments during
the quarter.
-
Cash and cash equivalents - The company ended the quarter with
cash and cash equivalents of $1.9 billion and a net debt position of
approximately $3.1 billion3. The company repurchased
approximately $64 million of its common stock in the first quarter of
2016 and paid approximately $71 million in cash dividends.
KEY HIGHLIGHTS
-
Significant win in the United Kingdom to provide interoperability
between the nationwide land-mobile radio (LMR) network and new public
safety long-term evolution (LTE) network with Motorola's WAVE 7000
solution
-
$77 million with five U.S. state and local customers to upgrade their
mission-critical communication networks to Motorola's latest P25
solution
-
$25 million in North Africa for next-generation DMR MOTOTRBO trunking
solution
-
$20 million with a U.S. utility customer for a multi-year Managed &
Support services contract
-
Continued wins and expansion of the Emergency CallWorks Next Gen 9-1-1
solution that now has deployments in more than half of the U.S. states
BUSINESS OUTLOOK
-
Second quarter 2016 - Motorola Solutions expects a
revenue increase of 1 to 3 percent compared with the second quarter of
2015. This assumes approximately $130 million in revenues associated
with the Airwave acquisition. The company expects non-GAAP earnings
per share from continuing operations in the range of $0.82 to $0.88
per share.
-
Full-year 2016 - The company reaffirms its full-year
outlook for revenue growth of 5 to 7 percent compared to 2015. This
revenue outlook includes approximately $450 million in revenues
associated with the Airwave acquisition. The company expects non-GAAP
earnings per share from continuing operations in the range of $4.45 to
$4.65 per share.
CONFERENCE CALL AND WEBCAST
Motorola Solutions will host its quarterly conference call beginning at
4 p.m. U.S. Central Daylight Time (5 p.m. U.S. Eastern Daylight Time) on
Thursday, May 5. The conference call will be webcast live with audio and
slides at www.motorolasolutions.com/investor.
CONSOLIDATED GAAP RESULTS (presented in millions, except per
share data) A comparison of results from operations is as
follows:
|
|
|
|
|
|
|
Q1 2016
|
|
Q1 2015
|
Net sales
|
|
$
|
1,193
|
|
$
|
1,223
|
Gross margin
|
|
|
502
|
|
|
548
|
Operating earnings
|
|
|
100
|
|
|
119
|
Amounts attributable to Motorola Solutions, Inc. common
stockholders
|
|
|
|
|
Earnings from continuing operations, net of tax
|
|
|
17
|
|
|
87
|
Net earnings
|
|
|
17
|
|
|
74
|
Diluted EPS from continuing operations
|
|
$
|
0.10
|
|
$
|
0.40
|
Weighted average diluted common shares outstanding
|
|
|
177.0
|
|
|
217.8
|
HIGHLIGHTED ITEMS AND SHARE-BASED COMPENSATION EXPENSE The
table below includes highlighted items, share-based compensation expense
and intangible amortization for the first quarter of 2016.
|
|
|
(per diluted common share)
|
|
Q1 2016
|
|
|
|
GAAP Earnings from Continuing Operations
|
|
$
|
0.10
|
Highlighted Items:
|
|
|
Share-based compensation expense
|
|
|
0.06
|
Reorganization of business charges
|
|
|
0.08
|
Intangibles amortization expense
|
|
|
0.06
|
Acquisition related transaction fees
|
|
|
0.07
|
Loss on investment in United Kingdom treasuries
|
|
|
0.07
|
Realized foreign currency loss on acquisition
|
|
|
0.04
|
Loss on sale of Malaysia facility and operations
|
|
|
0.04
|
Total Highlighted Items
|
|
|
0.42
|
|
|
|
Non-GAAP Diluted EPS from Continuing Operations
|
|
$
|
0.52
|
USE OF NON-GAAP FINANCIAL INFORMATION
In addition to the GAAP results included in this presentation, Motorola
Solutions also has included non-GAAP measurements of results. The
company has provided these non-GAAP measurements to help investors
better understand its core operating performance, enhance comparisons of
core operating performance from period to period and allow better
comparisons of operating performance to its competitors. Among other
things, management uses these operating results, excluding the
identified items, to evaluate performance of the businesses and to
evaluate results relative to certain incentive compensation targets.
Management uses operating results excluding these items because it
believes this measurement enables it to make better period-to-period
evaluations of the financial performance of core business operations.
The non-GAAP measurements are intended only as a supplement to the
comparable GAAP measurements and the company compensates for the
limitations inherent in the use of non-GAAP measurements by using GAAP
measures in conjunction with the non-GAAP measurements. As a result,
investors should consider these non-GAAP measurements in addition to,
and not in substitution for or as superior to, measurements of financial
performance prepared in accordance with generally accepted accounting
principles.
Highlighted items: The company has excluded the effects of
highlighted items (and any reversals of highlighted items recorded in
prior periods) from its non-GAAP operating expenses and net income
measurements because the company believes that these historical items do
not reflect expected future operating earnings or expenses and do not
contribute to a meaningful evaluation of the company's current operating
performance or comparisons to the company's past operating performance.
Share-based compensation expense: The company has excluded
share-based compensation expense from its non-GAAP operating expenses
and net income measurements. Although share-based compensation is a key
incentive offered to the company's employees and the company believes
such compensation contributed to the revenue earned during the periods
presented and also believes it will contribute to the generation of
future period revenues, the company continues to evaluate its
performance excluding share-based compensation expense primarily because
it represents a significant non-cash expense. Share-based compensation
expense will recur in future periods.
Intangible assets amortization expense: The company has excluded
intangible assets amortization expense from its Non-GAAP operating
expenses and net earnings measurements, primarily because it represents
a non-cash expense and because the company evaluates its performance
excluding intangible assets amortization expense. Amortization of
intangible assets is consistent in amount and frequency but is
significantly affected by the timing and size of the company's
acquisitions. Investors should note that the use of intangible assets
contributed to the company's revenues earned during the periods
presented and will contribute to the company's future period revenues as
well. Intangible assets amortization expense will recur in future
periods.
Constant Currency: The company evaluates its results of
operations on both an as reported and a constant currency basis. The
constant currency presentation, which is a non-GAAP measure, excludes
the impact of fluctuations in foreign currency exchange rates. The
company calculates constant currency percentages by converting the
current period local currency results using prior-period exchange rates,
and then comparing these adjusted values to prior-period reported
results.
Details of the above items and reconciliations of the non-GAAP
measurements to the corresponding GAAP measurements can be found at the
end of this press release.
BUSINESS RISKS
This press release contains "forward-looking statements" within the
meaning of applicable federal securities law. These statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and generally include words such as
"believes," "expects," "intends," "anticipates," "estimates" and similar
expressions. The company can give no assurance that any actual or future
results or events discussed in these statements will be achieved. Any
forward-looking statements represent the company's views only as of
today and should not be relied upon as representing the company's views
as of any subsequent date. Readers are cautioned that such
forward-looking statements are subject to a variety of risks and
uncertainties that could cause the company's actual results to differ
materially from the statements contained in this release. Such
forward-looking statements include, but are not limited to, Motorola
Solutions' financial outlook for the second quarter and full year of
2016, including the incremental revenues of Airwave. Motorola Solutions
cautions the reader that the risk factors below, as well as those on
pages 9 through 22 in Item 1A of Motorola Solutions 2015 Annual Report
on Form 10-K and in its other SEC filings available for free on the
SEC's website at www.sec.gov
and on Motorola Solutions' website at www.motorolasolutions.com/investor,
could cause Motorola Solutions' actual results to differ materially from
those estimated or predicted in the forward-looking statements. Many of
these risks and uncertainties cannot be controlled by Motorola Solutions
and factors that may impact forward-looking statements include, but are
not limited to: (1) the economic outlook for the government
communications industry; (2) the impact of foreign currency fluctuations
on the company; (3) the level of demand for the company's products; (4)
the company's ability to refresh existing and introduce new products and
technologies in a timely manner; (5) negative impact on the company's
business from global economic and political conditions, which may
include: (i) continued deferment or cancellation of purchase orders by
customers; (ii) the inability of customers to obtain financing for
purchases of the company's products; (iii) increased demand to provide
vendor financing to customers; (iv) increased financial pressures on
third-party dealers, distributors and retailers; (v) the viability of
the company's suppliers that may no longer have access to necessary
financing; (vi) counterparty failures negatively impacting the company's
financial position; (vii) changes in the value of investments held by
the company's pension plan and other defined benefit plans, which could
impact future required or voluntary pension contributions; and (viii)
the company's ability to access the capital markets on acceptable terms
and conditions; (6) the impact of a security breach or other significant
disruption in the company's IT systems, those of its partners or
suppliers or those it sells to or operate or maintain for its customers;
(7) the outcome of ongoing and future tax matters; (8) the company's
ability to purchase sufficient materials, parts and components to meet
customer demand, particularly in light of global economic conditions and
reductions in the company's purchasing power; (9) risks related to
dependence on certain key suppliers, subcontractors, third-party
distributors and other representatives; (10) the impact on the company's
performance and financial results from strategic acquisitions or
divestitures, including the acquisition of Airwave; (11) risks related
to the company's manufacturing and business operations in foreign
countries; (12) the creditworthiness of the company's customers and
distributors, particularly purchasers of large infrastructure systems;
(13) exposure under large systems and managed services contracts,
including risks related to the fact that certain customers require that
the company build, own and operate their systems, often over a
multi-year period; (14) the ownership of certain logos, trademarks,
trade names and service marks including "MOTOROLA" by Motorola Mobility
Holdings, Inc.; (15) variability in income received from licensing the
company's intellectual property to others, as well as expenses incurred
when the company licenses intellectual property from others; (16)
unexpected liabilities or expenses, including unfavorable outcomes to
any pending or future litigation or regulatory or similar proceedings;
(17) the impact of the percentage of cash and cash equivalents held
outside of the United States; (18) the ability of the company to pay
future dividends due to possible adverse market conditions or adverse
impacts on the company's cash flow; (19) the ability of the company to
repurchase shares under its repurchase program due to possible adverse
market conditions or adverse impacts on the company's cash flow; (20)
the impact of changes in governmental policies, laws or regulations;
(21) negative consequences from the company's outsourcing of various
activities, including certain manufacturing operations, information
technology and administrative functions; (22) the impact of the sale of
the company's legacy information systems, including components of the
enterprise resource planning (ERP) system and the implementation of a
new ERP system; and (23) the company's ability to settle the par value
of its Senior Convertible Notes in cash. Motorola Solutions undertakes
no obligation to publicly update any forward-looking statement or risk
factor, whether as a result of new information, future events or
otherwise.
DEFINITIONS
1 Amounts attributable to Motorola Solutions, Inc. common
shareholders.
2 Free cash flow represents operating cash flow less capex
3 Net debt represents cash and cash equivalents less
long-term debt, including current portion
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. ©2016 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
|
|
|
April 2, 2016
|
|
April 4, 2015
|
Net sales from products
|
|
$
|
702
|
|
|
$
|
758
|
|
Net sales from services
|
|
|
491
|
|
|
|
465
|
|
Net sales
|
|
|
1,193
|
|
|
|
1,223
|
|
|
|
|
|
|
Costs of products sales
|
|
|
366
|
|
|
|
359
|
|
Costs of services sales
|
|
|
325
|
|
|
|
316
|
|
Costs of sales
|
|
|
691
|
|
|
|
675
|
|
|
|
|
|
|
Gross margin
|
|
|
502
|
|
|
|
548
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
234
|
|
|
|
256
|
|
Research and development expenditures
|
|
|
135
|
|
|
|
159
|
|
Other charges
|
|
|
20
|
|
|
|
12
|
|
Intangibles amortization
|
|
|
13
|
|
|
|
2
|
|
Operating earnings
|
|
|
100
|
|
|
|
119
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
Interest expense, net
|
|
|
(49
|
)
|
|
|
(40
|
)
|
Gains (losses) on sales of investments and businesses, net
|
|
|
(21
|
)
|
|
|
46
|
|
Other
|
|
|
(8
|
)
|
|
|
3
|
|
Total other income (expense)
|
|
|
(78
|
)
|
|
|
9
|
|
Earnings from continuing operations before income taxes
|
|
|
22
|
|
|
|
128
|
|
Income tax expense
|
|
|
5
|
|
|
|
40
|
|
Earnings from continuing operations
|
|
|
17
|
|
|
|
88
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax
|
|
|
-
|
|
|
|
(13
|
)
|
Net earnings
|
|
|
17
|
|
|
|
75
|
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
-
|
|
|
|
1
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
17
|
|
|
$
|
74
|
|
|
|
|
|
|
Amounts attributable to Motorola Solutions, Inc. common
stockholders:
|
|
Earnings from continuing operations, net of tax
|
|
$
|
17
|
|
|
$
|
87
|
|
Loss from discontinued operations, net of tax
|
|
|
-
|
|
|
|
(13
|
)
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
17
|
|
|
$
|
74
|
|
|
|
|
|
|
Earnings (loss) per common share:
|
|
|
|
Basic:
|
|
|
|
|
Continuing operations
|
|
$
|
0.10
|
|
|
$
|
0.40
|
|
Discontinued operations
|
|
|
-
|
|
|
|
(0.06
|
)
|
|
|
$
|
0.10
|
|
|
$
|
0.34
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
Continuing operations
|
|
$
|
0.10
|
|
|
$
|
0.40
|
|
Discontinued operations
|
|
|
-
|
|
|
|
(0.06
|
)
|
|
|
$
|
0.10
|
|
|
$
|
0.34
|
|
Weighted average common shares
outstanding:
|
|
Basic
|
|
|
174.5
|
|
|
|
215.3
|
|
Diluted
|
|
|
177.0
|
|
|
|
217.8
|
|
|
|
|
|
|
|
|
Percentage of Net Sales*
|
Net sales from products
|
|
|
58.8
|
%
|
|
|
62.0
|
%
|
Net sales from services
|
|
|
41.2
|
%
|
|
|
38.0
|
%
|
Net sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
Costs of products sales
|
|
|
52.1
|
%
|
|
|
47.4
|
%
|
Costs of services sales
|
|
|
66.2
|
%
|
|
|
68.0
|
%
|
Costs of sales
|
|
|
57.9
|
%
|
|
|
55.2
|
%
|
|
|
|
|
|
Gross margin
|
|
|
42.1
|
%
|
|
|
44.8
|
%
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
19.6
|
%
|
|
|
20.9
|
%
|
Research and development expenditures
|
|
|
11.3
|
%
|
|
|
13.0
|
%
|
Other charges
|
|
|
1.7
|
%
|
|
|
1.0
|
%
|
Intangibles amortization
|
|
|
1.1
|
%
|
|
|
0.2
|
%
|
Operating earnings
|
|
|
8.4
|
%
|
|
|
9.7
|
%
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
Interest expense, net
|
|
|
(4.1
|
)%
|
|
|
(3.3
|
)%
|
Gains (losses) on sales of investments and businesses, net
|
|
|
(1.8
|
)%
|
|
|
3.8
|
%
|
Other
|
|
|
(0.7
|
)%
|
|
|
0.2
|
%
|
Total other income (expense)
|
|
|
(6.5
|
)%
|
|
|
0.7
|
%
|
Earnings from continuing operations before income taxes
|
|
|
1.8
|
%
|
|
|
10.5
|
%
|
Income tax expense
|
|
|
0.4
|
%
|
|
|
3.3
|
%
|
Earnings from continuing operations
|
|
|
1.4
|
%
|
|
|
7.2
|
%
|
Loss from discontinued operations, net of tax
|
|
|
-
|
%
|
|
|
(1.1
|
)%
|
Net earnings
|
|
|
1.4
|
%
|
|
|
6.1
|
%
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
-
|
%
|
|
|
0.1
|
%
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
|
1.4
|
%
|
|
|
6.1
|
%
|
* Percentages may not add up due to rounding
|
|
|
|
|
|
GAAP-2
|
Motorola Solutions, Inc. and Subsidiaries
|
Condensed Consolidated Balance Sheets
|
(In millions)
|
|
|
|
|
|
|
|
April 2, 2016
|
|
December 31, 2015
|
Assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,940
|
|
|
$
|
1,980
|
|
Accounts receivable, net
|
|
|
1,148
|
|
|
|
1,362
|
|
Inventories, net
|
|
|
287
|
|
|
|
296
|
|
Other current assets
|
|
|
626
|
|
|
|
954
|
|
Current assets held for disposition
|
|
|
-
|
|
|
|
27
|
|
Total current assets
|
|
|
4,001
|
|
|
|
4,619
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
997
|
|
|
|
487
|
|
Investments
|
|
|
228
|
|
|
|
231
|
|
Deferred income taxes
|
|
|
2,330
|
|
|
|
2,278
|
|
Goodwill
|
|
|
590
|
|
|
|
420
|
|
Other assets
|
|
|
884
|
|
|
|
271
|
|
Non-current assets held for disposition
|
|
|
19
|
|
|
|
40
|
|
Total assets
|
|
$
|
9,049
|
|
|
$
|
8,346
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
4
|
|
|
$
|
4
|
|
Accounts payable
|
|
|
424
|
|
|
|
518
|
|
Accrued liabilities
|
|
|
1,604
|
|
|
|
1,671
|
|
Total current liabilities
|
|
|
2,032
|
|
|
|
2,193
|
|
|
|
|
|
|
Long-term debt
|
|
|
5,023
|
|
|
|
4,345
|
|
Other liabilities
|
|
|
2,131
|
|
|
|
1,904
|
|
|
|
|
|
|
Total Motorola Solutions, Inc. stockholders' equity (deficit)
|
|
|
(147
|
)
|
|
|
(106
|
)
|
|
|
|
|
|
Noncontrolling interests
|
|
|
10
|
|
|
|
10
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
9,049
|
|
|
$
|
8,346
|
|
|
|
|
|
|
Financial Ratios:
|
|
|
|
|
Net cash (debt)*
|
|
$
|
(3,087
|
)
|
|
$
|
(2,369
|
)
|
|
|
|
|
|
*Net cash (debt) = Total cash - Current portion of long-term debt
- Long-term debt
|
|
|
|
|
|
GAAP-3
|
Motorola Solutions, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Cash Flows
|
(In millions)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
April 2, 2016
|
|
April 4, 2015
|
Operating
|
|
|
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
17
|
|
|
$
|
74
|
|
Earnings attributable to noncontrolling interests
|
|
|
-
|
|
|
|
1
|
|
Net earnings
|
|
|
17
|
|
|
|
75
|
|
Loss from discontinued operations, net of tax
|
|
|
-
|
|
|
|
(13
|
)
|
Earnings from continuing operations, net of tax
|
|
|
17
|
|
|
|
88
|
|
Adjustments to reconcile Earnings from continuing operations to
Net cash provided by operating activities from continuing
operations:
|
|
|
|
|
Depreciation and amortization
|
|
|
62
|
|
|
|
41
|
|
Non-cash other charges
|
|
|
11
|
|
|
|
1
|
|
Share-based compensation expense
|
|
|
17
|
|
|
|
21
|
|
Losses (gains) on sales of investments and businesses, net
|
|
|
21
|
|
|
|
(46
|
)
|
Deferred income taxes
|
|
|
35
|
|
|
|
23
|
|
Changes in assets and liabilities, net of effects of acquisitions,
dispositions, and foreign currency translation adjustments:
|
|
|
|
|
Accounts receivable
|
|
|
277
|
|
|
|
309
|
|
Inventories
|
|
|
(4
|
)
|
|
|
(44
|
)
|
Other current assets
|
|
|
(43
|
)
|
|
|
26
|
|
Accounts payable and accrued liabilities
|
|
|
(363
|
)
|
|
|
(247
|
)
|
Other assets and liabilities
|
|
|
(17
|
)
|
|
|
(16
|
)
|
Net cash provided by operating activities from continuing operations
|
|
|
13
|
|
|
|
156
|
|
Investing
|
|
|
|
|
Acquisitions and investments, net
|
|
|
(1,053
|
)
|
|
|
(74
|
)
|
Proceeds from sales of investments and businesses, net
|
|
|
481
|
|
|
|
88
|
|
Capital expenditures
|
|
|
(51
|
)
|
|
|
(33
|
)
|
Proceeds from sales of property, plant and equipment
|
|
|
-
|
|
|
|
1
|
|
Net cash used for investing activities from continuing operations
|
|
|
(623
|
)
|
|
|
(18
|
)
|
Financing
|
|
|
|
|
Repayment of debt
|
|
|
(1
|
)
|
|
|
(1
|
)
|
Net proceeds from issuance of debt
|
|
|
673
|
|
|
|
-
|
|
Issuance of common stock
|
|
|
40
|
|
|
|
41
|
|
Purchase of common stock
|
|
|
(64
|
)
|
|
|
(653
|
)
|
Excess tax benefit from share-based compensation
|
|
|
-
|
|
|
|
1
|
|
Payment of dividends
|
|
|
(71
|
)
|
|
|
(75
|
)
|
Net cash provided by (used for) financing activities from continuing
operations
|
|
|
577
|
|
|
|
(687
|
)
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents from
continuing operations
|
|
|
(7
|
)
|
|
|
(52
|
)
|
Net decrease in cash and cash equivalents
|
|
|
(40
|
)
|
|
|
(601
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
1,980
|
|
|
|
3,954
|
|
Cash and cash equivalents, end of period
|
|
$
|
1,940
|
|
|
$
|
3,353
|
|
|
|
|
|
|
Financial Ratios:
|
|
|
|
|
Free cash flow*
|
|
$
|
(38
|
)
|
|
$
|
123
|
|
|
|
|
|
|
*Free cash flow = Net cash provided by operating activities -
Capital Expenditures
|
|
|
|
|
|
|
|
|
GAAP-4
|
Motorola Solutions, Inc. and Subsidiaries
|
Segment Information
|
(In millions)
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
|
% Change
|
|
Products
|
|
$
|
702
|
|
|
$
|
758
|
|
|
(7
|
)%
|
|
Services
|
|
|
491
|
|
|
|
465
|
|
|
6
|
%
|
|
Total Motorola Solutions
|
|
$
|
1,193
|
|
|
$
|
1,223
|
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
|
% Change
|
|
Products
|
|
$
|
51
|
|
|
$
|
64
|
|
|
(20
|
)%
|
|
Services
|
|
|
49
|
|
|
|
55
|
|
|
(11
|
)%
|
|
Total Motorola Solutions
|
|
$
|
100
|
|
|
$
|
119
|
|
|
(16
|
)%
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings %
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
|
|
|
Products
|
|
|
7.3
|
%
|
|
|
8.4
|
%
|
|
|
|
Services
|
|
|
10.0
|
%
|
|
|
11.8
|
%
|
|
|
|
Total Motorola Solutions
|
|
|
8.4
|
%
|
|
|
9.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP-5
|
Motorola Solutions, Inc. and Subsidiaries
|
Regional Revenue Information
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
During the first quarter of 2016, we restructured our regions
operationally combining the Europe and Africa and Middle East
regions into one region which is now reflected as Europe, Middle
East, and Africa ("EMEA"). Accordingly, we now report net sales in
the following four geographic regions: North America, Latin America,
EMEA, and Asia Pacific ("AP"). We have updated all periods presented
to reflect this change in presentation.
|
|
|
|
|
|
|
|
|
|
|
The Company's regional net sales under the new regional alignment
and as previously reported were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revised regional sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
FY
|
|
FY
|
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
2014
|
|
2013
|
North America
|
|
|
770
|
|
|
883
|
|
|
922
|
|
|
1,138
|
|
|
3,713
|
|
|
3,599
|
|
|
3,894
|
Latin America
|
|
|
96
|
|
|
95
|
|
|
85
|
|
|
82
|
|
|
358
|
|
|
508
|
|
|
518
|
EMEA
|
|
|
223
|
|
|
227
|
|
|
244
|
|
|
280
|
|
|
974
|
|
|
1,129
|
|
|
1,066
|
AP
|
|
|
134
|
|
|
163
|
|
|
171
|
|
|
182
|
|
|
650
|
|
|
645
|
|
|
749
|
|
|
$
|
1,223
|
|
$
|
1,368
|
|
$
|
1,422
|
|
$
|
1,682
|
|
$
|
5,695
|
|
$
|
5,881
|
|
$
|
6,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional sales as previously reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
FY
|
|
FY
|
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
2014
|
|
2013
|
North America
|
|
|
770
|
|
|
883
|
|
|
922
|
|
|
1,138
|
|
|
3,713
|
|
|
3,599
|
|
|
3,894
|
Latin America
|
|
|
96
|
|
|
95
|
|
|
85
|
|
|
82
|
|
|
358
|
|
|
508
|
|
|
518
|
EA
|
|
|
192
|
|
|
197
|
|
|
213
|
|
|
247
|
|
|
849
|
|
|
1,034
|
|
|
988
|
AP
|
|
|
134
|
|
|
163
|
|
|
171
|
|
|
182
|
|
|
650
|
|
|
645
|
|
|
749
|
ME
|
|
|
31
|
|
|
30
|
|
|
31
|
|
|
33
|
|
|
125
|
|
|
95
|
|
|
78
|
|
|
$
|
1,223
|
|
$
|
1,368
|
|
$
|
1,422
|
|
$
|
1,682
|
|
$
|
5,695
|
|
$
|
5,881
|
|
$
|
6,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP-1
|
Motorola Solutions, Inc. and Subsidiaries
|
Non-GAAP Adjustments (Intangibles Amortization Expense,
Share-Based Compensation Expense and Highlighted Items)
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2016
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments
|
|
Statement Line
|
|
PBT (Inc)/Exp
|
|
Tax Inc/(Exp)
|
|
PAT (Inc)/Exp
|
|
EPS impact
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense
|
|
Cost of sales, SG&A and R&D
|
|
$
|
17
|
|
|
6
|
|
$
|
11
|
|
|
0.06
|
Reorganization of business charges
|
|
Cost of sales and Other charges
|
|
|
23
|
|
|
8
|
|
|
15
|
|
|
0.08
|
Intangibles amortization expense
|
|
Intangibles amortization
|
|
|
13
|
|
|
3
|
|
|
10
|
|
|
0.06
|
Acquisition related transaction fees
|
|
Other charges
|
|
|
13
|
|
|
-
|
|
|
13
|
|
|
0.07
|
Loss on investment in United Kingdom treasuries
|
|
Other expense (income)
|
|
|
19
|
|
|
7
|
|
|
12
|
|
|
0.07
|
Realized foreign currency loss on acquisition
|
|
Other expense (income)
|
|
|
10
|
|
|
3
|
|
|
7
|
|
|
0.04
|
Loss on sale of Malaysia facility and operations
|
|
Other expense (income)
|
|
|
7
|
|
|
-
|
|
|
7
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
Total impact on Net earnings
|
|
|
|
$
|
102
|
|
$
|
27
|
|
$
|
75
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP-2
|
Motorola Solutions, Inc. and Subsidiaries
|
Non-GAAP Segment Information
|
(In millions)
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
|
% Change
|
|
|
Products
|
|
$
|
702
|
|
|
$
|
758
|
|
|
(7
|
)%
|
|
Services
|
|
|
491
|
|
|
|
465
|
|
|
6
|
%
|
|
Total Motorola Solutions
|
|
$
|
1,193
|
|
|
$
|
1,223
|
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
|
% Change
|
|
|
Products
|
|
$
|
84
|
|
|
$
|
90
|
|
|
(7
|
)%
|
|
Services
|
|
|
82
|
|
|
|
66
|
|
|
24
|
%
|
|
Total Motorola Solutions
|
|
$
|
166
|
|
|
$
|
156
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Earnings %
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
|
|
|
Products
|
|
|
12.0
|
%
|
|
|
11.9
|
%
|
|
|
|
Services
|
|
|
16.7
|
%
|
|
|
14.2
|
%
|
|
|
|
Total Motorola Solutions
|
|
|
13.9
|
%
|
|
|
12.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP-3
|
Motorola Solutions, Inc. and Subsidiaries
|
Operating Earnings after Non-GAAP Adjustments
|
|
|
|
|
|
|
|
Q1 2016
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
Products
|
|
Services
|
Net sales
|
|
$ 1,193
|
|
$ 702
|
|
$ 491
|
Operating earnings ("OE")
|
|
$ 100
|
|
$ 51
|
|
$ 49
|
|
|
|
|
|
|
|
Above-OE non-GAAP adjustments:
|
|
|
|
|
|
|
Share-based compensation expense
|
|
17
|
|
11
|
|
6
|
Reorganization of business charges
|
|
23
|
|
21
|
|
2
|
Intangibles amortization expense
|
|
13
|
|
1
|
|
12
|
Acquisition related transaction fees
|
|
13
|
|
-
|
|
13
|
Total above-OE non-GAAP adjustments
|
|
66
|
|
33
|
|
33
|
|
|
|
|
|
|
|
Operating earnings after non-GAAP adjustments
|
|
$ 166
|
|
$ 84
|
|
$ 82
|
|
|
|
|
|
|
|
Operating earnings as a percentage of net sales - GAAP
|
|
8.4 %
|
|
7.3 %
|
|
10.0 %
|
Operating earnings as a percentage of net sales - after non-GAAP
adjustments
|
|
13.9 %
|
|
12.0 %
|
|
16.7 %
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160505006614/en/
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