[August 04, 2016] |
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Motorola Solutions Reports Second-Quarter 2016 Financial Results
Motorola
Solutions, Inc. (NYSE: MSI) today reported its earnings results for
the second quarter of 2016. Click
here for a printable news release and financial tables.
"Q2 was a strong quarter demonstrated by our growth in earnings, cash
flow and backlog," said Greg Brown, chairman and CEO of Motorola
Solutions. "I am pleased with our progress heading into the second half
of the year."
The company also announced that its board of directors has approved a $2
billion increase to the share repurchase program, raising the total
authorization since July 2011 to $14 billion. Under the company's
previously authorized $12 billion share repurchase program,
approximately $400 million remained at the end of the second quarter of
2016. The company may continue to repurchase shares from time to time in
the open market or in other privately negotiated transactions, subject
to market conditions.
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KEY FINANCIAL RESULTS (presented in millions, except per
share data and percentages)
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Q2 2016
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Q2 2015
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% Change
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Sales
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$1,430
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$1,368
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5%
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GAAP
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Operating Earnings
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$224
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$254
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(12)%
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% of Sales
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15.7%
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18.6%
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EPS from continuing operations
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$0.61
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$0.72
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(15)%
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Non-GAAP
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Operating Earnings
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$324
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$260
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25%
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% of Sales
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22.7%
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19.0%
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EPS from continuing operations
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$1.03
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$0.68
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51%
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Product Segment
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Sales
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$801
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$867
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(8)%
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GAAP Operating Earnings
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$129
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$171
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(25)%
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% of Sales
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16.1%
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19.7%
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Non-GAAP Operating Earnings
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$176
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$176
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-%
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% of Sales
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22.0%
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20.3%
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Services Segment
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Sales
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$629
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$501
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26%
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GAAP Operating Earnings
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$95
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$83
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14%
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% of Sales
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15.1%
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16.6%
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Non-GAAP Operating Earnings
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$148
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$84
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76%
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% of Sales
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23.5%
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16.8%
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*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
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Revenue - Sales increased 5 percent, including $146
million in sales associated with the Airwave acquisition. As expected,
Products segment sales declined 8 percent primarily driven by weakness
in Latin America, Europe and China. The Services segment grew 26
percent with the addition of Airwave, and posted growth of 4 percent
in organic managed and support services. Excluding Airwave, the
Services segment declined 4 percent due to lower systems integration
revenues associated with the completion of a large project in Europe.
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Operating margin - GAAP operating margin was 15.7
percent of sales, compared with 18.6 percent in the year-ago quarter,
reflecting higher amortization and restructuring charges. Non-GAAP
operating margin was 22.7 percent of sales, compared with 19.0 percent
in the year-ago quarter, driven by higher sales and $31 million in
lower operating expenses compared with the second quarter of 2015.
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Taxes - The GAAP effective tax rate was 35 percent, compared
with 30 percent in the year-ago quarter. The non-GAAP tax rate was 32
percent, compared with 35 percent in the year-ago quarter. The
full-year non-GAAP tax rate is expected to be approximately 33 percent.
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Cash flow - The company generated $292 million in
operating cash from continuing operations, reflecting an increase of
$143 million over the prior year, driven by higher earnings and
improved working capital. Free cash flow2 was $201 million.
-
Cash and cash equivalents - The company ended the
quarter with cash and cash equivalents of $1.5 billion and a net debt
position of $3.5 billion3. The company repurchased
approximately $555 million of its common stock in the quarter and paid
approximately $72 million in cash dividends.
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Backlog - Ending backlog is $8.2 billion, up $2.2
billion from the year ago period, driven by the addition of $1.6
billion from Airwave and approximately $600 million of organic managed
and support services. Products backlog was up $64 million from the
year-ago period.
KEY HIGHLIGHTS
Strategic sales
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$200 million award for a multi-county, P25 ASTRO system in the
Richmond, Virginia, region
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$44 million contract for P25 ASTRO system and subscribers with a large
U.S. utility
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$19 million service extension with an Australian customer
Innovation and investments in growth
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Introduced WAVE™ 7000 system that enhances work group communications
with a redundant, high-availability push-to-talk capability that links
millions of users regardless of device
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Facilitated TETRA Interop field trial with police in Belgium, the
Netherlands and Germany to test cross-border, multi-network
interoperability
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Introduced ST7000 small TETRA radio with high-quality audio and a
touch screen that appeals to customer-facing staff and executives
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Announced partnership with Singapore Technologies Electronics to
accelerate development of specialized technologies for high-security,
mission-critical broadband, cybersecurity solutions and purpose-built
applications
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Received unconditional clearance for acquisition of Airwave from the
United Kingdom's Competition and Markets Authority
BUSINESS OUTLOOK
-
Third-quarter 2016 - Motorola Solutions expects a revenue
increase of 6 to 7 percent compared with the third quarter of 2015,
which 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 $1.17 to $1.22 per
share.
-
Full-year 2016 - The company continues to expect revenue to
increase 5 to 7 percent and 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, Aug. 4. The conference call will be webcast live with audio
and slides at www.motorolasolutions.com/investor.
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CONSOLIDATED GAAP RESULTS (presented in millions, except
per share data)
A comparison of results from operations is as follows:
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Q2 2016
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Q2 2015
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Net sales
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$1,430
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$1,368
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Gross margin
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676
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648
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Operating earnings
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224
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254
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Amounts attributable to Motorola Solutions, Inc. common
stockholders
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Earnings from continuing operations, net of tax
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107
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150
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Net earnings
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107
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142
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Diluted EPS from continuing operations
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$0.61
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$0.72
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Weighted average diluted common shares outstanding
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174.8
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209.5
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HIGHLIGHTED ITEMS AND SHARE-BASED COMPENSATION EXPENSE
The table below includes highlighted items, share-based
compensation expense and intangible amortization for the second
quarter of 2016.
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(per diluted common share)
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Q2 2016
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GAAP Earnings from Continuing Operations
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$0.61
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Highlighted Items:
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Share-based compensation expense
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0.07
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Reorganization of business charges
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0.12
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Intangibles amortization expense
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0.17
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Building impairment
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0.06
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Total Highlighted Items
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0.42
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Non-GAAP Diluted EPS from Continuing Operations
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$1.03
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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 news 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 third quarter and full year of 2016
and 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,
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 operates or maintains 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 capital
expenditures
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. ©2015 Motorola Solutions, Inc. All rights reserved.
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GAAP-1
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Motorola Solutions, Inc. and Subsidiaries
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Condensed Consolidated Statements of Operations
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(In millions, except per share amounts)
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Three Months Ended
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July 2, 2016
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July 4, 2015
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Net sales from products
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$
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801
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$
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867
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Net sales from services
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629
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501
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Net sales
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1,430
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1,368
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Costs of products sales
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361
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385
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Costs of services sales
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393
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335
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Costs of sales
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754
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720
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Gross margin
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676
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648
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Selling, general and administrative expenses
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240
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254
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Research and development expenditures
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138
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156
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Other charges (income)
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36
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(19
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)
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Intangibles amortization
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38
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3
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Operating earnings
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224
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254
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Other income (expense):
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Interest expense, net
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(54
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)
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(39
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)
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Gains on sales of investments and businesses, net
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1
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4
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Other
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(4
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(4
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Total other expense
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(57
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)
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(39
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Earnings from continuing operations before income taxes
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167
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215
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Income tax expense
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59
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64
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Earnings from continuing operations
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108
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151
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Loss from discontinued operations, net of tax
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-
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(8
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)
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Net earnings
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108
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143
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Less: Earnings attributable to noncontrolling interests
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1
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1
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Net earnings attributable to Motorola Solutions, Inc.
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$
|
107
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$
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142
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Amounts attributable to Motorola Solutions, Inc. common
stockholders:
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Earnings from continuing operations, net of tax
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$
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107
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$
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150
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Loss from discontinued operations, net of tax
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-
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(8
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)
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Net earnings attributable to Motorola Solutions, Inc.
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$
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107
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$
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142
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Earnings (loss) per common share:
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Basic:
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Continuing operations
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$
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0.62
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$
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0.72
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Discontinued operations
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-
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(0.04
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)
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$
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0.62
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$
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0.68
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Diluted:
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Continuing operations
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$
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0.61
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$
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0.72
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Discontinued operations
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-
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(0.04
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$
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0.61
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$
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0.68
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Weighted average common shares
outstanding:
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Basic
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171.9
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208.0
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Diluted
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174.8
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209.5
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Percentage of Net Sales*
|
Net sales from products
|
|
|
|
|
|
56.0
|
%
|
|
|
|
63.4
|
%
|
Net sales from services
|
|
|
|
|
|
44.0
|
%
|
|
|
|
36.6
|
%
|
Net sales
|
|
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
Costs of products sales
|
|
|
|
|
|
45.1
|
%
|
|
|
|
44.4
|
%
|
Costs of services sales
|
|
|
|
|
|
62.5
|
%
|
|
|
|
66.9
|
%
|
Costs of sales
|
|
|
|
|
|
52.7
|
%
|
|
|
|
52.6
|
%
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
47.3
|
%
|
|
|
|
47.4
|
%
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
16.8
|
%
|
|
|
|
18.6
|
%
|
Research and development expenditures
|
|
|
|
|
|
9.7
|
%
|
|
|
|
11.4
|
%
|
Other charges (income)
|
|
|
|
|
|
2.5
|
%
|
|
|
|
(1.4
|
)%
|
Intangibles amortization
|
|
|
|
|
|
2.7
|
%
|
|
|
|
0.2
|
%
|
Operating earnings
|
|
|
|
|
|
15.7
|
%
|
|
|
|
18.6
|
%
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
|
(3.8
|
)%
|
|
|
|
(2.9
|
)%
|
Gains on sales of investments and businesses, net
|
|
|
|
|
|
0.1
|
%
|
|
|
|
0.3
|
%
|
Other
|
|
|
|
|
|
(0.3
|
)%
|
|
|
|
(0.3
|
)%
|
Total other expense
|
|
|
|
|
|
(4.0
|
)%
|
|
|
|
(2.9
|
)%
|
Earnings from continuing operations before income taxes
|
|
|
|
|
|
11.7
|
%
|
|
|
|
15.7
|
%
|
Income tax expense
|
|
|
|
|
|
4.1
|
%
|
|
|
|
4.7
|
%
|
Earnings from continuing operations
|
|
|
|
|
|
7.6
|
%
|
|
|
|
11.0
|
%
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
-
|
%
|
|
|
|
(0.6
|
)%
|
Net earnings
|
|
|
|
|
|
7.6
|
%
|
|
|
|
10.5
|
%
|
|
|
|
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
|
|
|
0.1
|
%
|
|
|
|
0.1
|
%
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
|
|
|
|
7.5
|
%
|
|
|
|
10.4
|
%
|
* Percentages may not add up due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP-2
|
Motorola Solutions, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Operations
|
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
Net sales from products
|
|
|
|
|
$
|
1,503
|
|
|
|
$
|
1,626
|
|
Net sales from services
|
|
|
|
|
|
1,120
|
|
|
|
|
965
|
|
Net sales
|
|
|
|
|
|
2,623
|
|
|
|
|
2,591
|
|
|
|
|
|
|
|
|
|
|
Costs of products sales
|
|
|
|
|
|
726
|
|
|
|
|
745
|
|
Costs of services sales
|
|
|
|
|
|
718
|
|
|
|
|
650
|
|
Costs of sales
|
|
|
|
|
|
1,444
|
|
|
|
|
1,395
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
1,179
|
|
|
|
|
1,196
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
475
|
|
|
|
|
510
|
|
Research and development expenditures
|
|
|
|
|
|
274
|
|
|
|
|
315
|
|
Other charges (income)
|
|
|
|
|
|
55
|
|
|
|
|
(6
|
)
|
Intangibles amortization
|
|
|
|
|
|
52
|
|
|
|
|
4
|
|
Operating earnings
|
|
|
|
|
|
323
|
|
|
|
|
373
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
|
(103
|
)
|
|
|
|
(79
|
)
|
Gains (losses) on sales of investments and businesses, net
|
|
|
|
|
|
(20
|
)
|
|
|
|
50
|
|
Other
|
|
|
|
|
|
(11
|
)
|
|
|
|
(1
|
)
|
Total other expense
|
|
|
|
|
|
(134
|
)
|
|
|
|
(30
|
)
|
Earnings from continuing operations before income taxes
|
|
|
|
|
|
189
|
|
|
|
|
343
|
|
Income tax expense
|
|
|
|
|
|
64
|
|
|
|
|
104
|
|
Earnings from continuing operations
|
|
|
|
|
|
125
|
|
|
|
|
239
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
-
|
|
|
|
|
(21
|
)
|
Net earnings
|
|
|
|
|
|
125
|
|
|
|
|
218
|
|
|
|
|
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
|
|
|
1
|
|
|
|
|
1
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
|
|
|
$
|
124
|
|
|
|
$
|
217
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Motorola Solutions, Inc. common
stockholders:
|
|
|
|
|
|
Earnings from continuing operations, net of tax
|
|
|
|
|
$
|
124
|
|
|
|
$
|
238
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
-
|
|
|
|
|
(21
|
)
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
|
|
|
$
|
124
|
|
|
|
$
|
217
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
$
|
0.72
|
|
|
|
$
|
1.12
|
|
Discontinued operations
|
|
|
|
|
|
-
|
|
|
|
|
(0.09
|
)
|
|
|
|
|
|
$
|
0.72
|
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
$
|
0.71
|
|
|
|
$
|
1.11
|
|
Discontinued operations
|
|
|
|
|
|
-
|
|
|
|
|
(0.10
|
)
|
|
|
|
|
|
$
|
0.71
|
|
|
|
$
|
1.01
|
|
Weighted average common shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
173.0
|
|
|
|
|
211.7
|
|
Diluted
|
|
|
|
|
|
175.7
|
|
|
|
|
213.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Net Sales*
|
Net sales from products
|
|
|
|
|
|
57.3
|
%
|
|
|
|
62.8
|
%
|
Net sales from services
|
|
|
|
|
|
42.7
|
%
|
|
|
|
37.2
|
%
|
Net sales
|
|
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
Costs of products sales
|
|
|
|
|
|
48.3
|
%
|
|
|
|
45.8
|
%
|
Costs of services sales
|
|
|
|
|
|
64.1
|
%
|
|
|
|
67.4
|
%
|
Costs of sales
|
|
|
|
|
|
55.1
|
%
|
|
|
|
53.8
|
%
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
44.9
|
%
|
|
|
|
46.2
|
%
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
18.1
|
%
|
|
|
|
19.7
|
%
|
Research and development expenditures
|
|
|
|
|
|
10.4
|
%
|
|
|
|
12.2
|
%
|
Other charges (income)
|
|
|
|
|
|
2.1
|
%
|
|
|
|
(0.2
|
)%
|
Intangibles amortization
|
|
|
|
|
|
2.0
|
%
|
|
|
|
0.2
|
%
|
Operating earnings
|
|
|
|
|
|
12.3
|
%
|
|
|
|
14.4
|
%
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
|
(3.9
|
)%
|
|
|
|
(3.0
|
)%
|
Gains (losses) on sales of investments and businesses, net
|
|
|
|
|
|
(0.8
|
)%
|
|
|
|
1.9
|
%
|
Other
|
|
|
|
|
|
(0.4
|
)%
|
|
|
|
-
|
%
|
Total other expense
|
|
|
|
|
|
(5.1
|
)%
|
|
|
|
(1.2
|
)%
|
Earnings from continuing operations before income taxes
|
|
|
|
|
|
7.2
|
%
|
|
|
|
13.2
|
%
|
Income tax expense
|
|
|
|
|
|
2.4
|
%
|
|
|
|
4.0
|
%
|
Earnings from continuing operations
|
|
|
|
|
|
4.8
|
%
|
|
|
|
9.2
|
%
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
-
|
%
|
|
|
|
(0.8
|
)%
|
Net earnings
|
|
|
|
|
|
4.8
|
%
|
|
|
|
8.4
|
%
|
|
|
|
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
|
|
|
-
|
%
|
|
|
|
-
|
%
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
|
|
|
|
4.7
|
%
|
|
|
|
8.4
|
%
|
* Percentages may not add up due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP-3
|
Motorola Solutions, Inc. and Subsidiaries
|
Condensed Consolidated Balance Sheets
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
December 31, 2015
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
1,545
|
|
|
|
$
|
1,980
|
|
Accounts receivable, net
|
|
|
|
|
|
1,083
|
|
|
|
|
1,362
|
|
Inventories, net
|
|
|
|
|
|
284
|
|
|
|
|
296
|
|
Other current assets
|
|
|
|
|
|
635
|
|
|
|
|
954
|
|
Current assets held for disposition
|
|
|
|
|
|
-
|
|
|
|
|
27
|
|
Total current assets
|
|
|
|
|
|
3,547
|
|
|
|
|
4,619
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
|
|
778
|
|
|
|
|
487
|
|
Investments
|
|
|
|
|
|
223
|
|
|
|
|
231
|
|
Deferred income taxes
|
|
|
|
|
|
2,261
|
|
|
|
|
2,278
|
|
Goodwill
|
|
|
|
|
|
597
|
|
|
|
|
420
|
|
Other assets
|
|
|
|
|
|
1,061
|
|
|
|
|
271
|
|
Non-current assets held for disposition
|
|
|
|
|
|
-
|
|
|
|
|
40
|
|
Total assets
|
|
|
|
|
$
|
8,467
|
|
|
|
$
|
8,346
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
|
|
|
$
|
5
|
|
|
|
$
|
4
|
|
Accounts payable
|
|
|
|
|
|
409
|
|
|
|
|
518
|
|
Accrued liabilities
|
|
|
|
|
|
1,631
|
|
|
|
|
1,671
|
|
Total current liabilities
|
|
|
|
|
|
2,045
|
|
|
|
|
2,193
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
|
5,028
|
|
|
|
|
4,345
|
|
Other liabilities
|
|
|
|
|
|
2,072
|
|
|
|
|
1,904
|
|
|
|
|
|
|
|
|
|
|
Total Motorola Solutions, Inc. stockholders' equity (deficit)
|
|
|
|
|
|
(689
|
)
|
|
|
|
(106
|
)
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests
|
|
|
|
|
|
11
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
|
|
$
|
8,467
|
|
|
|
$
|
8,346
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios:
|
|
|
|
|
|
|
|
|
Net cash (debt)*
|
|
|
|
|
$
|
(3,488
|
)
|
|
|
$
|
(2,369
|
)
|
|
|
|
|
|
|
|
|
|
*Net cash (debt) = 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
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
Operating
|
|
|
|
|
|
|
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
|
|
|
$
|
107
|
|
|
|
$
|
142
|
|
Earnings attributable to noncontrolling interests
|
|
|
|
|
|
1
|
|
|
|
|
1
|
|
Net earnings
|
|
|
|
|
|
108
|
|
|
|
|
143
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
-
|
|
|
|
|
(8
|
)
|
Earnings from continuing operations, net of tax
|
|
|
|
|
|
108
|
|
|
|
|
151
|
|
Adjustments to reconcile Earnings from continuing operations to Net
cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
82
|
|
|
|
|
40
|
|
Non-cash other charges
|
|
|
|
|
|
24
|
|
|
|
|
4
|
|
Non-U.S. pension curtailment gain
|
|
|
|
|
|
-
|
|
|
|
|
(32
|
)
|
Share-based compensation expense
|
|
|
|
|
|
18
|
|
|
|
|
19
|
|
Gains on sales of investments and businesses, net
|
|
|
|
|
|
(1
|
)
|
|
|
|
(4
|
)
|
Deferred income taxes
|
|
|
|
|
|
35
|
|
|
|
|
32
|
|
Changes in assets and liabilities, net of effects of acquisitions,
dispositions, and foreign currency translation adjustments:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
|
50
|
|
|
|
|
(54
|
)
|
Inventories
|
|
|
|
|
|
2
|
|
|
|
|
19
|
|
Other current assets
|
|
|
|
|
|
(22
|
)
|
|
|
|
3
|
|
Accounts payable and accrued liabilities
|
|
|
|
|
|
1
|
|
|
|
|
(2
|
)
|
Other assets and liabilities
|
|
|
|
|
|
(5
|
)
|
|
|
|
(27
|
)
|
Net cash provided by operating activities
|
|
|
|
|
|
292
|
|
|
|
|
149
|
|
Investing
|
|
|
|
|
|
|
|
|
Acquisitions and investments, net
|
|
|
|
|
|
(67
|
)
|
|
|
|
(19
|
)
|
Proceeds from sales of investments and businesses, net
|
|
|
|
|
|
72
|
|
|
|
|
23
|
|
Capital expenditures
|
|
|
|
|
|
(91
|
)
|
|
|
|
(48
|
)
|
Proceeds from sales of property, plant and equipment
|
|
|
|
|
|
46
|
|
|
|
|
-
|
|
Net cash used for investing activities
|
|
|
|
|
|
(40
|
)
|
|
|
|
(44
|
)
|
Financing
|
|
|
|
|
|
|
|
|
Repayment of debt
|
|
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
Issuance of common stock
|
|
|
|
|
|
(1
|
)
|
|
|
|
(5
|
)
|
Purchase of common stock
|
|
|
|
|
|
(555
|
)
|
|
|
|
(285
|
)
|
Payment of dividends
|
|
|
|
|
|
(72
|
)
|
|
|
|
(72
|
)
|
Net cash used for financing activities
|
|
|
|
|
|
(629
|
)
|
|
|
|
(363
|
)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
|
(18
|
)
|
|
|
|
17
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
(395
|
)
|
|
|
|
(241
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
|
|
|
1,940
|
|
|
|
|
3,353
|
|
Cash and cash equivalents, end of period
|
|
|
|
|
$
|
1,545
|
|
|
|
$
|
3,112
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios:
|
|
|
|
|
|
|
|
|
Free cash flow*
|
|
|
|
|
$
|
201
|
|
|
|
$
|
101
|
|
|
|
|
|
|
|
|
|
|
*Free cash flow = Net cash provided by operating activities -
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP-5
|
Motorola Solutions, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Cash Flows
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
Operating
|
|
|
|
|
|
|
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
|
|
|
$
|
124
|
|
|
|
$
|
217
|
|
Earnings attributable to noncontrolling interests
|
|
|
|
|
|
1
|
|
|
|
|
1
|
|
Net earnings
|
|
|
|
|
|
125
|
|
|
|
|
218
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
-
|
|
|
|
|
(21
|
)
|
Earnings from continuing operations, net of tax
|
|
|
|
|
|
125
|
|
|
|
|
239
|
|
Adjustments to reconcile Earnings from continuing operations to Net
cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
144
|
|
|
|
|
81
|
|
Non-cash other charges
|
|
|
|
|
|
35
|
|
|
|
|
5
|
|
Non-U.S. pension curtailment gain
|
|
|
|
|
|
-
|
|
|
|
|
(32
|
)
|
Share-based compensation expense
|
|
|
|
|
|
35
|
|
|
|
|
40
|
|
Losses (gains) on sales of investments and businesses, net
|
|
|
|
|
|
20
|
|
|
|
|
(50
|
)
|
Deferred income taxes
|
|
|
|
|
|
71
|
|
|
|
|
55
|
|
Changes in assets and liabilities, net of effects of acquisitions,
dispositions, and foreign currency translation adjustments:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
|
327
|
|
|
|
|
255
|
|
Inventories
|
|
|
|
|
|
(2
|
)
|
|
|
|
(25
|
)
|
Other current assets
|
|
|
|
|
|
(65
|
)
|
|
|
|
28
|
|
Accounts payable and accrued liabilities
|
|
|
|
|
|
(362
|
)
|
|
|
|
(248
|
)
|
Other assets and liabilities
|
|
|
|
|
|
(24
|
)
|
|
|
|
(42
|
)
|
Net cash provided by operating activities
|
|
|
|
|
|
304
|
|
|
|
|
306
|
|
Investing
|
|
|
|
|
|
|
|
|
Acquisitions and investments, net
|
|
|
|
|
|
(1,120
|
)
|
|
|
|
(93
|
)
|
Proceeds from sales of investments and businesses, net
|
|
|
|
|
|
553
|
|
|
|
|
111
|
|
Capital expenditures
|
|
|
|
|
|
(143
|
)
|
|
|
|
(81
|
)
|
Proceeds from sales of property, plant and equipment
|
|
|
|
|
|
46
|
|
|
|
|
1
|
|
Net cash used for investing activities
|
|
|
|
|
|
(664
|
)
|
|
|
|
(62
|
)
|
Financing
|
|
|
|
|
|
|
|
|
Repayment of debt
|
|
|
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
Net proceeds from issuance of debt
|
|
|
|
|
|
673
|
|
|
|
|
-
|
|
Issuance of common stock
|
|
|
|
|
|
40
|
|
|
|
|
37
|
|
Purchase of common stock
|
|
|
|
|
|
(619
|
)
|
|
|
|
(939
|
)
|
Excess tax benefit from share-based compensation
|
|
|
|
|
|
-
|
|
|
|
|
1
|
|
Payment of dividends
|
|
|
|
|
|
(143
|
)
|
|
|
|
(148
|
)
|
Net cash used for financing activities
|
|
|
|
|
|
(51
|
)
|
|
|
|
(1,051
|
)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
|
(24
|
)
|
|
|
|
(35
|
)
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
(435
|
)
|
|
|
|
(842
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
|
|
|
1,980
|
|
|
|
|
3,954
|
|
Cash and cash equivalents, end of period
|
|
|
|
|
$
|
1,545
|
|
|
|
$
|
3,112
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios:
|
|
|
|
|
|
|
|
|
Free cash flow*
|
|
|
|
|
$
|
161
|
|
|
|
$
|
225
|
|
|
|
|
|
|
|
|
|
|
*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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
% Change
|
|
Products
|
|
|
|
|
$
|
801
|
|
|
|
$
|
867
|
|
|
|
(8
|
)%
|
|
Services
|
|
|
|
|
|
629
|
|
|
|
|
501
|
|
|
|
26
|
%
|
|
Total Motorola Solutions
|
|
|
|
|
$
|
1,430
|
|
|
|
$
|
1,368
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
% Change
|
|
Products
|
|
|
|
|
$
|
1,503
|
|
|
|
$
|
1,626
|
|
|
|
(8
|
)%
|
|
Services
|
|
|
|
|
|
1,120
|
|
|
|
|
965
|
|
|
|
16
|
%
|
|
Total Motorola Solutions
|
|
|
|
|
$
|
2,623
|
|
|
|
$
|
2,591
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
% Change
|
|
Products
|
|
|
|
|
$
|
129
|
|
|
|
$
|
171
|
|
|
|
(25
|
)%
|
|
Services
|
|
|
|
|
|
95
|
|
|
|
|
83
|
|
|
|
14
|
%
|
|
Total Motorola Solutions
|
|
|
|
|
$
|
224
|
|
|
|
$
|
254
|
|
|
|
(12
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
% Change
|
|
Products
|
|
|
|
|
$
|
179
|
|
|
|
$
|
235
|
|
|
|
(24
|
)%
|
|
Services
|
|
|
|
|
|
144
|
|
|
|
|
138
|
|
|
|
4
|
%
|
|
Total Motorola Solutions
|
|
|
|
|
$
|
323
|
|
|
|
$
|
373
|
|
|
|
(13
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
|
|
Products
|
|
|
|
|
|
16.1
|
%
|
|
|
|
19.7
|
%
|
|
|
|
|
Services
|
|
|
|
|
|
15.1
|
%
|
|
|
|
16.6
|
%
|
|
|
|
|
Total Motorola Solutions
|
|
|
|
|
|
15.7
|
%
|
|
|
|
18.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
|
|
Products
|
|
|
|
|
|
11.9
|
%
|
|
|
|
14.5
|
%
|
|
|
|
|
Services
|
|
|
|
|
|
12.9
|
%
|
|
|
|
14.3
|
%
|
|
|
|
|
Total Motorola Solutions
|
|
|
|
|
|
12.3
|
%
|
|
|
|
14.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
Q2 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
|
|
$
|
18
|
|
$
|
6
|
|
$
|
12
|
|
$
|
0.07
|
Reorganization of business charges
|
|
Cost of sales and Other charges
|
|
|
27
|
|
|
7
|
|
|
20
|
|
|
0.12
|
Intangibles amortization expense
|
|
Intangibles amortization
|
|
|
38
|
|
|
8
|
|
|
30
|
|
|
0.17
|
Building impairment
|
|
Other charges
|
|
|
17
|
|
|
6
|
|
|
11
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
Total impact on Net earnings
|
|
|
|
$
|
100
|
|
$
|
27
|
|
$
|
73
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP-2
|
Motorola Solutions, Inc. and Subsidiaries
|
Non-GAAP Segment Information
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
% Change
|
|
Products
|
|
|
|
|
$
|
801
|
|
|
|
$
|
867
|
|
|
|
(8
|
)%
|
|
Services
|
|
|
|
|
|
629
|
|
|
|
|
501
|
|
|
|
26
|
%
|
|
Total Motorola Solutions
|
|
|
|
|
$
|
1,430
|
|
|
|
$
|
1,368
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
% Change
|
|
Products
|
|
|
|
|
$
|
1,503
|
|
|
|
$
|
1,626
|
|
|
|
(8
|
)%
|
|
Services
|
|
|
|
|
|
1,120
|
|
|
|
|
965
|
|
|
|
16
|
%
|
|
Total Motorola Solutions
|
|
|
|
|
$
|
2,623
|
|
|
|
$
|
2,591
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
% Change
|
|
Products
|
|
|
|
|
$
|
176
|
|
|
|
$
|
176
|
|
|
|
-
|
%
|
|
Services
|
|
|
|
|
|
148
|
|
|
|
|
84
|
|
|
|
76
|
%
|
|
Total Motorola Solutions
|
|
|
|
|
$
|
324
|
|
|
|
$
|
260
|
|
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
% Change
|
|
Products
|
|
|
|
|
$
|
260
|
|
|
|
$
|
266
|
|
|
|
(2
|
)%
|
|
Services
|
|
|
|
|
|
230
|
|
|
|
|
150
|
|
|
|
53
|
%
|
|
Total Motorola Solutions
|
|
|
|
|
$
|
490
|
|
|
|
$
|
416
|
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Earnings %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
|
|
Products
|
|
|
|
|
|
22.0
|
%
|
|
|
|
20.3
|
%
|
|
|
|
|
Services
|
|
|
|
|
|
23.5
|
%
|
|
|
|
16.8
|
%
|
|
|
|
|
Total Motorola Solutions
|
|
|
|
|
|
22.7
|
%
|
|
|
|
19.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
July 4, 2015
|
|
|
|
|
Products
|
|
|
|
|
|
17.3
|
%
|
|
|
|
16.4
|
%
|
|
|
|
|
Services
|
|
|
|
|
|
20.5
|
%
|
|
|
|
15.5
|
%
|
|
|
|
|
Total Motorola Solutions
|
|
|
|
|
|
18.7
|
%
|
|
|
|
16.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
Products
|
|
|
Services
|
Net sales
|
|
|
|
|
$
|
1,430
|
|
|
|
$
|
801
|
|
|
|
$
|
629
|
|
Operating earnings ("OE")
|
|
|
|
|
$
|
224
|
|
|
|
$
|
129
|
|
|
|
$
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Above-OE non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense
|
|
|
|
|
|
18
|
|
|
|
|
12
|
|
|
|
|
6
|
|
Reorganization of business charges
|
|
|
|
|
|
27
|
|
|
|
|
21
|
|
|
|
|
6
|
|
Intangibles amortization expense
|
|
|
|
|
|
38
|
|
|
|
|
2
|
|
|
|
|
36
|
|
Building impairment
|
|
|
|
|
|
17
|
|
|
|
|
12
|
|
|
|
|
5
|
|
Total above-OE non-GAAP adjustments
|
|
|
|
|
|
100
|
|
|
|
|
47
|
|
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings after non-GAAP adjustments
|
|
|
|
|
$
|
324
|
|
|
|
$
|
176
|
|
|
|
$
|
148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings as a percentage of net sales - GAAP
|
|
|
|
|
|
15.7
|
%
|
|
|
|
16.1
|
%
|
|
|
|
15.1
|
%
|
Operating earnings as a percentage of net sales - after non-GAAP
adjustments
|
|
|
|
|
|
22.7
|
%
|
|
|
|
22.0
|
%
|
|
|
|
23.5
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160804006382/en/
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