[May 06, 2015] |
|
Motorola Solutions Reports First-Quarter 2015 Financial Results
Motorola
Solutions, Inc. (NYSE: MSI) today reported its earnings results for
the first quarter of 2015. Click
here for a printable news release and financial tables.
SUPPORTING QUOTE
"The company delivered strong double-digit profitability growth in the
first quarter, driven primarily by strength in our North America
business and a leaner cost structure," said Greg Brown, chairman and CEO
of Motorola Solutions. "We remain committed to driving growth through
innovation as well as improving operating leverage and cash flow
generation."
KEY FINANCIAL RESULTS (presented in millions, except per share data
and percentages)
|
|
Q1 2015
|
|
Q1 2014
|
|
% Change
|
Sales
|
|
$1,223
|
|
$1,228
|
|
0%
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
Operating Earnings
|
|
$119
|
|
$107
|
|
11%
|
% of Sales
|
|
9.7%
|
|
8.7%
|
|
|
EPS from continuing operations
|
|
$0.40
|
|
$0.33
|
|
21%
|
Non-GAAP
|
|
|
|
|
|
|
Operating Earnings
|
|
$156
|
|
$126
|
|
24%
|
% of Sales
|
|
12.8%
|
|
10.3%
|
|
|
EPS from continuing operations
|
|
$0.38
|
|
$0.28
|
|
36%
|
Product Segment
|
|
|
|
|
|
|
Sales
|
|
$758
|
|
$752
|
|
1%
|
GAAP Operating Earnings
|
|
$64
|
|
$39
|
|
64%
|
% of Sales
|
|
8.4%
|
|
5.2%
|
|
|
Non-GAAP Operating Earnings
|
|
$90
|
|
$52
|
|
73%
|
% of Sales
|
|
11.9%
|
|
6.9%
|
|
|
Services Segment
|
|
|
|
|
|
|
Sales
|
|
$465
|
|
$476
|
|
-2%
|
GAAP Operating Earnings
|
|
$55
|
|
$68
|
|
-19%
|
% of Sales
|
|
11.8%
|
|
14.3%
|
|
|
Non-GAAP Operating Earnings
|
|
$66
|
|
$74
|
|
-11%
|
% of Sales
|
|
14.2%
|
|
15.5%
|
|
|
|
|
|
|
|
|
|
Non-GAAP financial information excludes the after-tax impact of
approximately $0.02 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 were flat, including $40 million of unfavorable
foreign currency impact. These results reflect 6 percent growth in
North America. Product sales grew 1 percent driven primarily by an
improvement in device sales, while Services declined 2 percent driven
by lower iDEN and system integration sales.
-
Operating margin - GAAP operating margin was 9.7 percent
of sales in the first quarter of 2015, compared with 8.7 percent in
the first quarter of 2014; non-GAAP operating margin was 12.8 percent
of sales, compared with 10.3 percent in the first quarter of 2014,
reflecting $60 million in lower operating expenses compared with the
first quarter of 2014, due largely to cost reduction and
simplification initiatives across all categories as well as lower
pension expense and a stronger dollar.
-
Taxes - The first-quarter GAAP effective tax rate was 31
percent. This compares with a tax rate of 4 percent in the first
quarter of 2014, which included $30 million of net tax benefit
associated with the net reduction in previously unrecognized tax
benefits. The first-quarter non-GAAP tax rate was 29 percent, compared
with a tax rate of 33 percent in the first quarter of 2014. The
full-year non-GAAP tax rate is expected to be approximately 33
percent. The full-year cash tax rate is expected to be approximately
15 percent.
-
Cash flow - The company generated $151 million in
operating cash from continuing operations during the quarter,
reflecting an increase of $139 million over the prior year. The
increase was largely driven by working capital improvements.
-
Cash and cash equivalents - The company ended the quarter with
cash and cash equivalents of $3.4 billion, reflecting a net debt
position of $43 million3. The company repurchased $653
million of its common stock in the first quarter and paid $75 million
in cash dividends.
KEY HIGHLIGHTS
Strategic wins
-
$135 million system upgrade and multi-year managed services contract
for the South Australia Government Radio Network that integrates voice
and data capabilities, and covers more than 20 first responder agencies
-
$46 million contract with $32 million of services for multi-year
software upgrades and maintenance services with Hamilton County, Ohio
-
$20 million contract for both expansion services and core products in
Columbus, Georgia, that incorporates Smart Public Safety Services and
P25 equipment and software
-
$19 million contract to provide 25,000 digital TETRA radios,
accessories, training and logistics services to the Central
Procurement Office of Schleswig-Holstein AöR (GMSH) Germany
-
A Real Time Crime Center win with the St. Louis Metropolitan Police
Department to deploy an intelligence-led policing solution that
integrates video management systems with computer-aided dispatch and
public safety applications
Innovation and investments in growth
-
Completed two acquisitions in the Smart Public Safety business:
Emergency CallWorks and PublicEngines, leading providers of
software-based solutions that solidify Motorola Solutions' offerings
in command and control, next-generation 9-1-1 call center and
intelligence-led policing solutions that enable predictive policing
and citizen engagement capabilities for law enforcement and government
entities
-
Invested in three businesses that complement the company's Smart
Public Safety technology portfolio, through the company's venture
capital arm
-
Announced the APX8000, the first all-band, Wi-Fi-enabled APX P25
portable two-way radio
-
Upgraded the MTP3000 Series TETRA radios to meet mission-critical
demands for improved ruggedness, coverage, encryption and other public
safety-specific functionality
BUSINESS OUTLOOK4
-
Second quarter 2015 - Motorola Solutions expects a revenue
decline of 3 to 5 percent compared with the second quarter of 2014.
This assumes a $45 million5 unfavorable currency impact,
which translates to revenue of flat to down 2 percent in constant
currency. The company expects non-GAAP earnings per share from
continuing operations in the range of $0.51 to $0.56 per share.
-
Full-year 2015 - The company revenue outlook remains unchanged
as revenue is expected to be flat to down 2 percent compared to 2014.
This outlook translates to revenue growth of 1 to 3 percent in
constant currency. The company now expects non-GAAP earnings per share
from continuing operations in the range of $3.20 to $3.40 per share.
CONFERENCE CALL AND WEBCAST
Motorola Solutions will host its quarterly conference call beginning at
7 a.m. U.S. Central Daylight Time (8 a.m. U.S. Eastern Daylight Time)
Wednesday, May 6. 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 2015
|
|
Q1 2014
|
Net sales
|
|
$1,223
|
|
$1,228
|
Gross margin
|
|
548
|
|
577
|
Operating earnings
|
|
119
|
|
107
|
Amounts attributable to Motorola Solutions, Inc. common
stockholders
|
|
|
|
|
Earnings from continuing operations
|
|
87
|
|
85
|
Net earnings
|
|
74
|
|
127
|
Diluted EPS from continuing operations
|
|
$0.40
|
|
$0.33
|
Weighted average diluted common shares outstanding
|
|
217.8
|
|
258.3
|
|
|
|
|
|
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 2015.
|
|
|
(per diluted common share)
|
|
Q1 2015
|
|
|
|
GAAP Earnings from Continuing Operations
|
|
$0.40
|
|
|
|
Highlighted Items:
|
|
|
Share-based compensation expense and intangible amortization
|
|
0.06
|
Reorganization of business charges
|
|
0.05
|
Gain on Sale of equity investment
|
|
(0.13)
|
Total Highlighted Items
|
|
(0.02)
|
|
|
|
Non-GAAP Diluted EPS from Continuing Operations
|
|
$0.38
|
|
|
|
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.
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' expected full-year non-GAAP tax rate, full-year cash tax rate
and financial outlook for the second quarter and full year of 2015,
including the impact of currency rates. Motorola Solutions cautions the
reader that the risk factors below, as well as those on pages 9 through
20 in Item 1A of Motorola Solutions, Inc.'s 2014 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,
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 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 our partners or suppliers or those we
sell to or operate or maintain for our 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; (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 business
operations, information technology and administrative functions; (22)
the impact of the sale of the company's enterprise 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 return proceeds of the sale of the Enterprise
business to shareholders and the timing thereof. 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.
2Non-GAAP financial information excludes from GAAP results
the effects of share-based compensation expense, intangible assets
amortization expense and highlighted items.
3 Net debt represents cash and cash equivalents less
long-term debt, including current portion
4 Business outlook excludes share-based
compensation expense, intangible assets amortization expense and charges
associated with items typically highlighted by the company in its
quarterly earnings releases.
5 Based on currency rates as of May 4, 2015.
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
|
|
|
April 4, 2015
|
|
March 29, 2014
|
Net sales from products
|
|
$
|
758
|
|
|
$
|
752
|
|
Net sales from services
|
|
|
465
|
|
|
|
476
|
|
Net sales
|
|
|
1,223
|
|
|
|
1,228
|
|
|
|
|
|
|
Costs of products sales
|
|
|
359
|
|
|
|
350
|
|
Costs of services sales
|
|
|
316
|
|
|
|
301
|
|
Costs of sales
|
|
|
675
|
|
|
|
651
|
|
|
|
|
|
|
Gross margin
|
|
|
548
|
|
|
|
577
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
256
|
|
|
|
307
|
|
Research and development expenditures
|
|
|
159
|
|
|
|
174
|
|
Other charges (income)
|
|
|
12
|
|
|
|
(12
|
)
|
Intangibles amortization
|
|
|
2
|
|
|
|
1
|
|
Operating earnings
|
|
|
119
|
|
|
|
107
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
Interest expense, net:
|
|
|
(40
|
)
|
|
|
(25
|
)
|
Gains on sales of investments and businesses, net
|
|
|
46
|
|
|
|
7
|
|
Other
|
|
|
3
|
|
|
|
-
|
|
Total other income (expense)
|
|
|
9
|
|
|
|
(18
|
)
|
Earnings from continuing operations before income taxes
|
|
|
128
|
|
|
|
89
|
|
Income tax expense
|
|
|
40
|
|
|
|
4
|
|
Earnings from continuing operations
|
|
|
88
|
|
|
|
85
|
|
|
|
|
|
|
-
|
|
Earnings (loss) from discontinued operations, net of tax
|
|
|
(13
|
)
|
|
|
42
|
|
Net earnings
|
|
|
75
|
|
|
|
127
|
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
1
|
|
|
|
-
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
74
|
|
|
$
|
127
|
|
|
|
|
|
|
Amounts attributable to Motorola Solutions, Inc. common
shareholders
|
|
|
|
|
Earnings from continuing operations, net of tax
|
|
$
|
87
|
|
|
$
|
85
|
|
Earnings (loss) from discontinued operations, net of tax
|
|
|
(13
|
)
|
|
|
42
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
74
|
|
|
$
|
127
|
|
|
|
|
|
|
Earnings (loss) per common share
|
|
|
|
|
Basic:
|
|
|
|
|
Continuing operations
|
|
$
|
0.40
|
|
|
$
|
0.33
|
|
Discontinued operations
|
|
|
(0.06
|
)
|
|
|
0.17
|
|
|
|
$
|
0.34
|
|
|
$
|
0.50
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
Continuing operations
|
|
$
|
0.40
|
|
|
$
|
0.33
|
|
Discontinued operations
|
|
|
(0.06
|
)
|
|
|
0.16
|
|
|
|
$
|
0.34
|
|
|
$
|
0.49
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
Basic
|
|
|
215.3
|
|
|
|
254.1
|
|
Diluted
|
|
|
217.8
|
|
|
|
258.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Net Sales*
|
Net sales from products
|
|
|
62.0
|
%
|
|
|
61.2
|
%
|
Net sales from services
|
|
|
38.0
|
%
|
|
|
38.8
|
%
|
Net sales
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
Costs of products sales
|
|
|
47.4
|
%
|
|
|
46.5
|
%
|
Costs of services sales
|
|
|
68.0
|
%
|
|
|
63.2
|
%
|
Costs of sales
|
|
|
55.2
|
%
|
|
|
53.0
|
%
|
|
|
|
|
|
Gross margin
|
|
|
44.8
|
%
|
|
|
47.0
|
%
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
20.9
|
%
|
|
|
25.0
|
%
|
Research and development expenditures
|
|
|
13.0
|
%
|
|
|
14.2
|
%
|
Other charges (income)
|
|
|
1.0
|
%
|
|
|
-1.0
|
%
|
Intangibles amortization
|
|
|
0.2
|
%
|
|
|
0.1
|
%
|
Operating earnings
|
|
|
9.7
|
%
|
|
|
8.7
|
%
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
Interest expense, net:
|
|
|
-3.3
|
%
|
|
|
-2.0
|
%
|
Gains on sales of investments and businesses, net
|
|
|
3.8
|
%
|
|
|
0.6
|
%
|
Other
|
|
|
0.2
|
%
|
|
|
0.0
|
%
|
Total other income (expense)
|
|
|
0.7
|
%
|
|
|
-1.5
|
%
|
Earnings from continuing operations before income taxes
|
|
|
10.5
|
%
|
|
|
7.2
|
%
|
Income tax expense
|
|
|
3.3
|
%
|
|
|
0.3
|
%
|
Earnings from continuing operations
|
|
|
7.2
|
%
|
|
|
6.9
|
%
|
Earnings (loss) from discontinued operations, net of tax
|
|
|
-1.1
|
%
|
|
|
3.4
|
%
|
Net earnings
|
|
|
6.1
|
%
|
|
|
10.3
|
%
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
0.1
|
%
|
|
|
0.0
|
%
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
|
6.1
|
%
|
|
|
10.3
|
%
|
|
|
|
|
|
* Percentages may not add up due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP-2
|
Motorola Solutions, Inc. and Subsidiaries
|
Condensed Consolidated Balance Sheets
|
(In millions)
|
|
|
|
|
|
|
|
April 4,
|
|
December 31,
|
|
|
2015
|
|
2014
|
Assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,353
|
|
|
$
|
3,954
|
Accounts receivable, net
|
|
|
1,084
|
|
|
|
1,409
|
Inventories, net
|
|
|
381
|
|
|
|
345
|
Deferred income taxes
|
|
|
416
|
|
|
|
431
|
Other current assets
|
|
|
650
|
|
|
|
740
|
Total current assets
|
|
|
5,884
|
|
|
|
6,879
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
530
|
|
|
|
549
|
Investments
|
|
|
285
|
|
|
|
316
|
Deferred income taxes
|
|
|
2,179
|
|
|
|
2,151
|
Goodwill
|
|
|
390
|
|
|
|
383
|
Other assets
|
|
|
157
|
|
|
|
145
|
Total assets
|
|
$
|
9,425
|
|
|
$
|
10,423
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
4
|
|
|
$
|
4
|
Accounts payable
|
|
|
437
|
|
|
|
540
|
Accrued liabilities
|
|
|
1,536
|
|
|
|
1,706
|
Total current liabilities
|
|
|
1,977
|
|
|
|
2,250
|
|
|
|
|
|
Long-term debt
|
|
|
3,392
|
|
|
|
3,396
|
Other liabilities
|
|
|
1,962
|
|
|
|
2,011
|
|
|
|
|
|
Total Motorola Solutions, Inc. stockholders' equity
|
|
|
2,086
|
|
|
|
2,735
|
|
|
|
|
|
Noncontrolling interests
|
|
|
8
|
|
|
|
31
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
9,425
|
|
|
$
|
10,423
|
|
|
|
|
|
Financial Ratios:
|
|
|
|
|
Net cash (debt)*
|
|
$
|
(43
|
)
|
|
$
|
554
|
|
|
|
|
|
*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 4, 2015
|
|
March 29, 2014
|
Operating
|
|
|
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
74
|
|
|
$
|
127
|
|
Earnings attributable to noncontrolling interests
|
|
|
1
|
|
|
|
-
|
|
Net earnings
|
|
|
75
|
|
|
|
127
|
|
Earnings (loss) from discontinued operations, net of tax
|
|
|
(13
|
)
|
|
|
42
|
|
Earnings from continuing operations, net of tax
|
|
|
88
|
|
|
|
85
|
|
Adjustments to reconcile Earnings from continuing operations to Net
cash provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
41
|
|
|
|
40
|
|
Gain on sale of building and land
|
|
|
-
|
|
|
|
(21
|
)
|
Non-cash other charges (income)
|
|
|
1
|
|
|
|
(3
|
)
|
Share-based compensation expense
|
|
|
21
|
|
|
|
28
|
|
Gains on sales of investments and businesses, net
|
|
|
(46
|
)
|
|
|
(7
|
)
|
Deferred income taxes
|
|
|
23
|
|
|
|
22
|
|
Changes in assets and liabilities, net of effects of acquisitions,
dispositions, and foreign currency translation adjustments:
|
|
|
|
|
Accounts receivable
|
|
|
309
|
|
|
|
160
|
|
Inventories
|
|
|
(44
|
)
|
|
|
(12
|
)
|
Other current assets
|
|
|
26
|
|
|
|
16
|
|
Accounts payable and accrued liabilities
|
|
|
(252
|
)
|
|
|
(175
|
)
|
Other assets and liabilities
|
|
|
(16
|
)
|
|
|
(121
|
)
|
Net cash provided by operating activities from continuing operations
|
|
|
151
|
|
|
|
12
|
|
Investing
|
|
|
|
|
Acquisitions and investments, net
|
|
|
(74
|
)
|
|
|
(4
|
)
|
Proceeds from sales of investments and businesses, net
|
|
|
88
|
|
|
|
11
|
|
Capital expenditures
|
|
|
(33
|
)
|
|
|
(41
|
)
|
Proceeds from sales of property, plant and equipment
|
|
|
1
|
|
|
|
24
|
|
Net cash used for investing activities from continuing operations
|
|
|
(18
|
)
|
|
|
(10
|
)
|
Financing
|
|
|
|
|
Repayment of debt
|
|
|
(1
|
)
|
|
|
(1
|
)
|
Net proceeds from issuance of debt
|
|
|
-
|
|
|
|
4
|
|
Issuance of common stock
|
|
|
46
|
|
|
|
14
|
|
Repurchase of common stock
|
|
|
(653
|
)
|
|
|
(57
|
)
|
Excess tax benefit from share-based compensation
|
|
|
1
|
|
|
|
5
|
|
Payments of dividends
|
|
|
(75
|
)
|
|
|
(79
|
)
|
Distributions from discontinued operations
|
|
|
-
|
|
|
|
26
|
|
Net cash used for financing activities from continuing operations
|
|
|
(682
|
)
|
|
|
(88
|
)
|
Discontinued Operations
|
|
|
|
|
Net cash provided by operating activities from discontinued
operations
|
|
|
-
|
|
|
|
34
|
|
Net cash used for investing activities from discontinued operations
|
|
|
-
|
|
|
|
(8
|
)
|
Net cash used for financing activities from discontinued operations
|
|
|
-
|
|
|
|
(26
|
)
|
Net cash provided by discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents from
continuing operations
|
|
|
(52
|
)
|
|
|
2
|
|
Net decrease in cash and cash equivalents
|
|
|
(601
|
)
|
|
|
(84
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
3,954
|
|
|
|
3,225
|
|
Cash and cash equivalents, end of period
|
|
$
|
3,353
|
|
|
$
|
3,141
|
|
|
|
|
|
|
Financial Ratios:
|
|
|
|
|
Free cash flow*
|
|
$
|
118
|
|
|
$
|
(29
|
)
|
|
|
|
|
|
*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 4,
|
|
March 29,
|
|
|
|
|
|
|
2015
|
|
2014
|
|
% Change
|
|
|
Products
|
|
$
|
758
|
|
|
$
|
752
|
|
|
1
|
%
|
|
|
Services
|
|
|
465
|
|
|
|
476
|
|
|
-2
|
%
|
|
|
Total Motorola Solutions
|
|
$
|
1,223
|
|
|
$
|
1,228
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 4,
|
|
March 29,
|
|
|
|
|
|
|
2015
|
|
2014
|
|
% Change
|
|
|
Products
|
|
$
|
64
|
|
|
$
|
39
|
|
|
64
|
%
|
|
|
Services
|
|
|
55
|
|
|
|
68
|
|
|
-19
|
%
|
|
|
Total Motorola Solutions
|
|
$
|
119
|
|
|
$
|
107
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings %
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 4,
|
|
March 29,
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
Products
|
|
|
8.4
|
%
|
|
|
5.2
|
%
|
|
|
|
|
Services
|
|
|
11.8
|
%
|
|
|
14.3
|
%
|
|
|
|
|
Total Motorola Solutions
|
|
|
9.7
|
%
|
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP-5
|
Motorola Solutions, Inc. and Subsidiaries
|
Regional Revenue Information
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the first quarter of 2015, we restructured our regions
operationally separating the Asia Pacific and Middle East region
into two regions which are now reflected as Asia Pacific ("AP") and
Middle East ("ME"). As a result of this change, our sales force is
better aligned and focused on the growth opportunities within each
geographic region. Accordingly, we now report net sales in the
following five geographic regions: North America, Latin America,
Europe and Africa ("EA"), AP, and ME.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2012
|
North America
|
|
|
727
|
|
|
841
|
|
|
880
|
|
|
1,151
|
|
|
3,599
|
|
|
3,894
|
|
|
3,905
|
Latin America
|
|
|
125
|
|
|
134
|
|
|
109
|
|
|
140
|
|
|
508
|
|
|
518
|
|
|
577
|
EA
|
|
|
214
|
|
|
231
|
|
|
277
|
|
|
312
|
|
|
1,034
|
|
|
988
|
|
|
858
|
AP
|
|
|
141
|
|
|
168
|
|
|
151
|
|
|
185
|
|
|
645
|
|
|
749
|
|
|
816
|
ME
|
|
|
21
|
|
|
19
|
|
|
19
|
|
|
36
|
|
|
95
|
|
|
78
|
|
|
113
|
|
|
$
|
1,228
|
|
$
|
1,393
|
|
$
|
1,436
|
|
$
|
1,824
|
|
$
|
5,881
|
|
$
|
6,227
|
|
$
|
6,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional sales as previously reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
FY
|
|
FY
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2012
|
North America
|
|
|
727
|
|
|
841
|
|
|
880
|
|
|
1,151
|
|
|
3,599
|
|
|
3,894
|
|
|
3,905
|
Latin America
|
|
|
125
|
|
|
134
|
|
|
109
|
|
|
140
|
|
|
508
|
|
|
518
|
|
|
577
|
EA
|
|
|
214
|
|
|
231
|
|
|
277
|
|
|
312
|
|
|
1,034
|
|
|
988
|
|
|
858
|
APME
|
|
|
162
|
|
|
187
|
|
|
170
|
|
|
221
|
|
|
740
|
|
|
827
|
|
|
929
|
|
|
$
|
1,228
|
|
$
|
1,393
|
|
$
|
1,436
|
|
$
|
1,824
|
|
$
|
5,881
|
|
$
|
6,227
|
|
$
|
6,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP-1
|
Motorola Solutions, Inc. and Subsidiaries
|
Non-GAAP Adjustments (Intangibles Amortization Expense,
Share-Based Compensation Expense and Highlighted Items)
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBT
|
|
Tax
|
|
PAT
|
|
|
Highlighted Items
|
|
Statement Line
|
|
(Inc)/Exp
|
|
Inc/(Exp)
|
|
(Inc)/Exp
|
|
EPS impact
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense
|
|
Cost of sales, SG&A and R&D
|
|
$
|
21
|
|
|
$
|
7
|
|
|
$
|
14
|
|
|
$
|
0.06
|
|
Reorganization of business charges
|
|
Cost of sales and Other charges
|
|
|
14
|
|
|
|
4
|
|
|
|
10
|
|
|
|
0.05
|
|
Intangibles amortization expense
|
|
Intangibles amortization
|
|
|
2
|
|
|
|
1
|
|
|
|
1
|
|
|
|
-
|
|
Gain on sale of equity investment
|
|
Gains on sales of investments and businesses, net
|
|
|
(46
|
)
|
|
|
(17
|
)
|
|
|
(29
|
)
|
|
|
(0.13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total impact on Net earnings
|
|
|
|
$
|
(9
|
)
|
|
$
|
(5
|
)
|
|
$
|
(4
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP-2
|
Motorola Solutions, Inc. and Subsidiaries
|
Non-GAAP Segment Information
|
(In millions)
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 4,
|
|
March 29,
|
|
|
|
|
|
|
2015
|
|
2014
|
|
% Change
|
|
|
Products
|
|
$
|
758
|
|
|
$
|
752
|
|
|
1
|
%
|
|
|
Services
|
|
|
465
|
|
|
|
476
|
|
|
-2
|
%
|
|
|
Total Motorola Solutions
|
|
$
|
1,223
|
|
|
$
|
1,228
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 4,
|
|
March 29,
|
|
|
|
|
|
|
2015
|
|
2014
|
|
% Change
|
|
|
Products
|
|
$
|
90
|
|
|
$
|
52
|
|
|
73
|
%
|
|
|
Services
|
|
|
66
|
|
|
|
74
|
|
|
-11
|
%
|
|
|
Total Motorola Solutions
|
|
$
|
156
|
|
|
$
|
126
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Earnings %
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 4,
|
|
March 29,
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
Products
|
|
|
11.9
|
%
|
|
|
6.9
|
%
|
|
|
|
|
Services
|
|
|
14.2
|
%
|
|
|
15.5
|
%
|
|
|
|
|
Total Motorola Solutions
|
|
|
12.8
|
%
|
|
|
10.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP-3
|
Motorola Solutions, Inc. and Subsidiaries
|
Operating Earnings after Non-GAAP Adjustments
|
|
|
|
|
|
|
|
Q1 2015
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
Products
|
|
Services
|
Net sales
|
|
$ 1,223
|
|
$ 758
|
|
$ 465
|
Operating earnings ("OE")
|
|
$ 119
|
|
$ 64
|
|
$ 55
|
|
|
|
|
|
|
|
Above-OE non-GAAP adjustments:
|
|
|
|
|
|
|
Share-based compensation expense
|
|
21
|
|
14
|
|
7
|
Reorganization of business charges
|
|
14
|
|
10
|
|
4
|
Intangibles amortization expense
|
|
2
|
|
2
|
|
-
|
Total above-OE non-GAAP adjustments
|
|
37
|
|
26
|
|
11
|
|
|
|
|
|
|
|
Operating earnings after non-GAAP adjustments
|
|
$ 156
|
|
$ 90
|
|
$ 66
|
|
|
|
|
|
|
|
Operating earnings as a percentage of net sales - GAAP
|
|
9.7%
|
|
8.4%
|
|
11.8%
|
Operating earnings as a percentage of net sales - after non-GAAP
adjustments
|
|
12.8%
|
|
11.9%
|
|
14.2%
|
[ Back To TMCnet.com's Homepage ]
|