[February 02, 2017] |
|
Motorola Solutions Reports Fourth-Quarter and Full-Year 2016 Financial Results
Motorola
Solutions, Inc. (NYSE: MSI) today reported its earnings results for
the fourth quarter and full year of 2016. Click
here for a printable news release and financial tables.
SUPPORTING QUOTE
"We ended the year with an outstanding fourth quarter, and I am very
encouraged with our strong competitive position and record backlog
entering 2017," said Greg Brown, chairman and CEO of Motorola Solutions.
KEY FINANCIAL RESULTS (presented in millions, except per
share data and percentages)
|
|
|
Fourth Quarter
|
|
Full Year
|
|
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
Sales
|
|
$1,883
|
|
$1,682
|
|
12
|
%
|
|
$6,038
|
|
$5,695
|
|
6
|
%
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
$403
|
|
$389
|
|
4
|
%
|
|
$1,067
|
|
$994
|
|
7
|
%
|
% of Sales
|
|
21.4
|
%
|
|
23.1
|
%
|
|
|
|
17.7
|
%
|
|
17.5
|
%
|
|
|
EPS from continuing operations
|
|
$1.43
|
|
$1.56
|
|
(8
|
)%
|
|
$3.24
|
|
$3.17
|
|
2
|
%
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
$541
|
|
$458
|
|
18
|
%
|
|
$1,427
|
|
$1,166
|
|
22
|
%
|
% of Sales
|
|
28.7
|
%
|
|
27.2
|
%
|
|
|
|
23.6
|
%
|
|
20.5
|
%
|
|
|
EPS from continuing operations
|
|
$2.03
|
|
$1.58
|
|
28
|
%
|
|
$4.92
|
|
$3.33
|
|
48
|
%
|
Products Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$1,226
|
|
$1,125
|
|
9
|
%
|
|
$3,649
|
|
$3,676
|
|
(1
|
)%
|
GAAP Operating earnings
|
|
$330
|
|
$291
|
|
13
|
%
|
|
$734
|
|
$704
|
|
4
|
%
|
% of Sales
|
|
26.9
|
%
|
|
25.9
|
%
|
|
|
|
20.1
|
%
|
|
19.2
|
%
|
|
|
Non-GAAP Operating earnings
|
|
$407
|
|
$340
|
|
20
|
%
|
|
$910
|
|
$827
|
|
10
|
%
|
% of Sales
|
|
33.2
|
%
|
|
30.2
|
%
|
|
|
|
24.9
|
%
|
|
22.5
|
%
|
|
|
Services Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$657
|
|
$557
|
|
18
|
%
|
|
$2,389
|
|
$2,019
|
|
18
|
%
|
GAAP Operating earnings
|
|
$73
|
|
$98
|
|
(26
|
)%
|
|
$333
|
|
$290
|
|
15
|
%
|
% of Sales
|
|
11.1
|
%
|
|
17.6
|
%
|
|
|
|
13.9
|
%
|
|
14.4
|
%
|
|
|
Non-GAAP Operating earnings
|
|
$134
|
|
$118
|
|
14
|
%
|
|
$517
|
|
$339
|
|
53
|
%
|
% of Sales
|
|
20.4
|
%
|
|
21.2
|
%
|
|
|
|
21.6
|
%
|
|
16.8
|
%
|
|
|
OTHER SELECT FOURTH-QUARTER FINANCIAL RESULTS
-
Revenue - Sales increased 12 percent, including $124 million in
sales from Airwave. Sales grew in every region. The Products segment
sales grew 9 percent, with growth in every region. The Services
segment grew 18 percent including Airwave, while Managed and Support
Services grew 5 percent excluding Airwave.
-
Operating margin - GAAP operating margin was 21.4
percent of sales, compared to 23.1 percent of sales in the year-ago
quarter. Non-GAAP operating margin was 28.7 percent of sales, compared
with 27.2 percent in the year-ago quarter. The improvement is
primarily the result of higher sales.
-
Taxes - The GAAP effective tax rate was 33 percent,
compared with 26 percent in the year-ago quarter. The prior year's
favorable rate was driven primarily by several discrete one-time
items. The non-GAAP tax rate was 31 percent, compared with 31 percent
in the fourth quarter of 2015.
-
Cash flow - The company generated $513 million in
operating cash from continuing operations, up $98 million from the
year-ago quarter primarily driven by earnings from higher revenue.
Free cash flow1 was up $82 million to $453 million.
-
Capital allocation - The company ended the quarter with cash
and cash equivalents of $1.0 billion and a net debt position of
approximately $3.4 billion3. The company repaid the $675
million term loan associated with the Airwave acquisition, repurchased
$114 million of common stock, paid $68 million in dividends and
invested $246 million in acquisitions.
OTHER SELECT FULL-YEAR FINANCIAL RESULTS
-
Revenue - Sales increased 6 percent, including $462 million in
Airwave sales. These results reflect growth in North America and Asia
Pacific in both Products and Services. Growth of 33 percent in the
Europe, Middle East and Africa region was driven by Airwave and
partially offset by lower revenue in Norway associated with completing
the implementation phase of the nationwide project. Latin America was
down 20 percent, primarily on iDEN declines and first-half weakness.
Products segment sales were down 1 percent compared to the prior year,
while the Services segment grew 18 percent on Managed and Support
Services strength.
-
Operating margin - For the full year, GAAP operating
margin was 17.7 percent of sales, compared with 17.5 percent for the
prior year. Non-GAAP operating margin was 23.6 percent of sales,
compared with 20.5 percent for the prior year, driven by higher
revenue and lower operating expenses.
-
Taxes - The 2016 GAAP effective tax rate was 33 percent,
compared to 30 percent for the prior year. The non-GAAP tax rate was
31 percent, compared with 33 percent in the prior year.
-
Cash flow - The company generated $1.2 billion in
operating cash from continuing operations, reflecting an increase of
$144 million from the prior year. Free cash flow1 was $894
million, up $48 million from the prior year. The increase was driven
by higher sales and lower operating costs, partially offset by higher
capital expenditures.
-
Capital allocation - The company invested $1.3 billion in
acquisitions, repurchased approximately $842 million of its common
stock and paid $280 million in dividends.
KEY HIGHLIGHTS
Fourth-quarter strategic wins
-
$140 million P25 system deployment for the Washington, D.C. Metro Area
Transit Authority
-
$60 million P25 system replacement and multiyear services for San
Francisco
-
$40 million P25 system and devices upgrade unifying eight cities in
Argentina
-
$17 million Smart Public Safety Solutions sale of computer-aided
dispatch equipment, software and multiyear services to Indianapolis
Fourth-quarter innovation and investments in
growth
-
Acquired Spillman Technologies, a leading provider of comprehensive
law enforcement and public safety software solutions, which bolsters
the command center portfolio
-
Released new P25 and TETRA devices that provide unmatched features and
functionality. In addition to form factor enhancements, the radios
provide Bluetooth 4.0, Wi-Fi and enhanced location services
that enable future software and services opportunities
-
Following more than three years of collaboration, emergency services
in Norway and Sweden conducted their first major cross-border
emergency response exercise supported by fully inter-operable
multi-vendor radio communications. This land mobile radio (LMR) to LMR
cross-border collaboration using different vendor equipment is
spurring additional interest from neighboring countries and
illustrates the power of the LMR communications platform
BUSINESS OUTLOOK
-
First-quarter 2017 - Motorola Solutions expects revenue
growth of 3 to 5 percent compared with the first quarter of 2016. This
includes approximately $115 million from Airwave versus $61 million in
the year-ago quarter. The company expects non-GAAP earnings per share
from continuing operations in the range of $0.52 to $0.57 per share.
-
Full-year 2017 - The company expects revenue to be up 1
to 2 percent. Airwave revenue is expected to be flat compared with the
prior year due to foreign exchange rates. The company expects non-GAAP
earnings per share from continuing operations in the range of $5.05 to
$5.20 per share.
CONFERENCE CALL AND WEBCAST
Motorola Solutions will host its quarterly conference call beginning at
4 p.m. U.S. Central Standard Time (5 p.m. U.S. Eastern Standard Time)
Thursday, Feb. 2. 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:
|
|
|
|
|
|
|
Fourth Quarter
|
|
Full Year
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net sales
|
|
$1,883
|
|
$1,682
|
|
$6,038
|
|
$5,695
|
Gross margin
|
|
928
|
|
838
|
|
2,869
|
|
2,719
|
Operating earnings
|
|
403
|
|
389
|
|
1,067
|
|
994
|
Amounts attributable to Motorola Solutions, Inc. common
stockholders
|
|
|
|
|
|
|
|
|
Earnings from continuing operations, net of tax
|
|
243
|
|
277
|
|
560
|
|
640
|
Net earnings
|
|
243
|
|
279
|
|
560
|
|
610
|
Diluted EPS from continuing operations
|
|
|
$1.43
|
|
$1.56
|
|
|
$3.24
|
|
$3.17
|
Weighted average diluted common shares outstanding
|
|
170.4
|
|
177.5
|
|
173.1
|
|
201.8
|
HIGHLIGHTED ITEMS AND SHARE-BASED COMPENSATION EXPENSE
The table below includes highlighted items, share-based compensation
expense and intangible amortization for the fourth quarter of 2016.
|
|
|
(per diluted common share)
|
|
Q4 2016
|
|
|
|
GAAP Earnings from Continuing Operations
|
|
$1.43
|
Highlighted Items:
|
|
|
Share-based compensation expense
|
|
$0.06
|
Reorganization of business charges
|
|
$0.31
|
Intangibles amortization expense
|
|
$0.14
|
Loss on pension plan settlement
|
|
$0.15
|
Release of unrecognized tax benefit from audit settlement
|
|
($0.06)
|
Total Highlighted Items
|
|
$0.60
|
|
|
|
Non-GAAP Diluted EPS from Continuing Operations
|
|
$2.03
|
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 including, but not limited to, acquisition-related
transaction costs, tangible and intangible asset impairments,
restructuring charges, non-cash pension adjustments, significant
litigation and other contingencies, significant gains and losses on
investments, and the income tax effects of significant tax matters, 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. For the
purposes of management's internal analysis over operating performance,
the company uses financial statements that exclude highlighted items, as
these charges do not contribute to a meaningful evaluation of the
company's current operating performance or comparisons to the company's
past operating performance. Specifically in regards to its restructuring
plans, the company has incurred significant restructuring charges as it
reduced approximately $700 million of operating expenses in the past
four years.
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 its
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 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 first quarter and full year of 2017
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 use of third party vendors for 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 Free cash flow represents operating cash flow less capital
expenditures
2 Q4 Non-GAAP financial information excludes the after-tax
impact of approximately $0.60 per diluted share related to share-based
compensation, intangible assets amortization expense and highlighted
items for the fourth-quarter. Details on these non-GAAP adjustments and
the use of non-GAAP measures are included later in this news release.
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. ©2017 Motorola Solutions, Inc. All rights reserved.
|
GAAP-1
|
|
Motorola Solutions, Inc. and Subsidiaries
|
Consolidated Statements of Operations
|
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
December 31, 2016
|
|
December 31, 2015
|
Net sales from products
|
|
$
|
1,226
|
|
|
$
|
1,125
|
|
Net sales from services
|
|
|
657
|
|
|
|
557
|
|
Net sales
|
|
|
1,883
|
|
|
|
1,682
|
|
|
|
|
|
|
Costs of products sales
|
|
|
525
|
|
|
|
485
|
|
Costs of services sales
|
|
|
430
|
|
|
|
359
|
|
Costs of sales
|
|
|
955
|
|
|
|
844
|
|
|
|
|
|
|
Gross margin
|
|
|
928
|
|
|
|
838
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
277
|
|
|
|
252
|
|
Research and development expenditures
|
|
|
142
|
|
|
|
152
|
|
Other charges
|
|
|
76
|
|
|
|
43
|
|
Intangibles amortization
|
|
|
30
|
|
|
|
2
|
|
Operating earnings
|
|
|
403
|
|
|
|
389
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
Interest expense, net
|
|
|
(48
|
)
|
|
|
(51
|
)
|
Gains on sales of investments and businesses, net
|
|
|
7
|
|
|
|
47
|
|
Other
|
|
|
-
|
|
|
|
(8
|
)
|
Total other expense
|
|
|
(41
|
)
|
|
|
(12
|
)
|
Earnings from continuing operations before income taxes
|
|
|
362
|
|
|
|
377
|
|
Income tax expense
|
|
|
118
|
|
|
|
99
|
|
Earnings from continuing operations
|
|
|
244
|
|
|
|
278
|
|
|
|
|
|
|
Earnings from discontinued operations, net of tax
|
|
|
-
|
|
|
|
2
|
|
Net earnings
|
|
|
244
|
|
|
|
280
|
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
1
|
|
|
|
1
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
243
|
|
|
$
|
279
|
|
|
|
|
|
|
Amounts attributable to Motorola Solutions, Inc. common
stockholders:
|
|
Earnings from continuing operations, net of tax
|
|
$
|
243
|
|
|
$
|
277
|
|
Earnings from discontinued operations, net of tax
|
|
|
-
|
|
|
|
2
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
243
|
|
|
$
|
279
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
Basic:
|
|
|
|
|
Continuing operations
|
|
$
|
1.47
|
|
|
$
|
1.58
|
|
Discontinued operations
|
|
|
-
|
|
|
|
0.02
|
|
|
|
$
|
1.47
|
|
|
$
|
1.60
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
Continuing operations
|
|
$
|
1.43
|
|
|
$
|
1.56
|
|
Discontinued operations
|
|
|
-
|
|
|
|
0.01
|
|
|
|
$
|
1.43
|
|
|
$
|
1.57
|
|
Weighted average common shares outstanding:
|
|
Basic
|
|
|
165.4
|
|
|
|
174.9
|
|
Diluted
|
|
|
170.4
|
|
|
|
177.5
|
|
|
|
|
|
|
|
|
Percentage of Net Sales*
|
Net sales from products
|
|
|
65.1
|
%
|
|
|
66.9
|
%
|
Net sales from services
|
|
|
34.9
|
%
|
|
|
33.1
|
%
|
Net sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
Costs of products sales
|
|
|
42.8
|
%
|
|
|
43.1
|
%
|
Costs of services sales
|
|
|
65.4
|
%
|
|
|
64.5
|
%
|
Costs of sales
|
|
|
50.7
|
%
|
|
|
50.2
|
%
|
|
|
|
|
|
Gross margin
|
|
|
49.3
|
%
|
|
|
49.8
|
%
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
14.7
|
%
|
|
|
15.0
|
%
|
Research and development expenditures
|
|
|
7.5
|
%
|
|
|
9.0
|
%
|
Other charges
|
|
|
4.0
|
%
|
|
|
2.6
|
%
|
Intangibles amortization
|
|
|
1.6
|
%
|
|
|
0.1
|
%
|
Operating earnings
|
|
|
21.4
|
%
|
|
|
23.1
|
%
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
Interest expense, net
|
|
|
(2.5
|
)%
|
|
|
(3.0
|
)%
|
Gains on sales of investments and businesses, net
|
|
|
0.4
|
%
|
|
|
2.8
|
%
|
Other
|
|
|
-
|
%
|
|
|
(0.5
|
)%
|
Total other expense
|
|
|
(2.2
|
)%
|
|
|
(0.7
|
)%
|
Earnings from continuing operations before income taxes
|
|
|
19.2
|
%
|
|
|
22.4
|
%
|
Income tax expense
|
|
|
6.3
|
%
|
|
|
5.9
|
%
|
Earnings from continuing operations
|
|
|
13.0
|
%
|
|
|
16.5
|
%
|
Earnings from discontinued operations, net of tax
|
|
|
-
|
%
|
|
|
0.1
|
%
|
Net earnings
|
|
|
13.0
|
%
|
|
|
16.6
|
%
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
0.1
|
%
|
|
|
0.1
|
%
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
|
12.9
|
%
|
|
|
16.6
|
%
|
* Percentages may not add up due to rounding
|
|
|
GAAP-2
|
|
|
|
|
|
|
|
Motorola Solutions, Inc. and Subsidiaries
|
Consolidated Statements of Operations
|
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
Net sales from products
|
|
$
|
3,649
|
|
|
$
|
3,676
|
|
|
$
|
3,807
|
|
Net sales from services
|
|
|
2,389
|
|
|
|
2,019
|
|
|
|
2,074
|
|
Net sales
|
|
|
6,038
|
|
|
|
5,695
|
|
|
|
5,881
|
|
|
|
|
|
|
|
|
Costs of products sales
|
|
|
1,649
|
|
|
|
1,625
|
|
|
|
1,678
|
|
Costs of services sales
|
|
|
1,520
|
|
|
|
1,351
|
|
|
|
1,372
|
|
Costs of sales
|
|
|
3,169
|
|
|
|
2,976
|
|
|
|
3,050
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
2,869
|
|
|
|
2,719
|
|
|
|
2,831
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
1,000
|
|
|
|
1,021
|
|
|
|
1,184
|
|
Research and development expenditures
|
|
|
553
|
|
|
|
620
|
|
|
|
681
|
|
Other charges
|
|
|
136
|
|
|
|
76
|
|
|
|
1,968
|
|
Intangibles amortization
|
|
|
113
|
|
|
|
8
|
|
|
|
4
|
|
Operating earnings (loss)
|
|
|
1,067
|
|
|
|
994
|
|
|
|
(1,006
|
)
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(205
|
)
|
|
|
(173
|
)
|
|
|
(126
|
)
|
Gains (losses) on sales of investments and businesses, net
|
|
|
(6
|
)
|
|
|
107
|
|
|
|
5
|
|
Other
|
|
|
(12
|
)
|
|
|
(11
|
)
|
|
|
(34
|
)
|
Total other expense
|
|
|
(223
|
)
|
|
|
(77
|
)
|
|
|
(155
|
)
|
Earnings (loss) from continuing operations before income taxes
|
|
|
844
|
|
|
|
917
|
|
|
|
(1,161
|
)
|
Income tax expense (benefit)
|
|
|
282
|
|
|
|
274
|
|
|
|
(465
|
)
|
Earnings (loss) from continuing operations
|
|
|
562
|
|
|
|
643
|
|
|
|
(696
|
)
|
|
|
|
|
|
|
|
Earnings (loss) from discontinued operations, net of tax
|
|
|
-
|
|
|
|
(30
|
)
|
|
|
1,996
|
|
Net earnings
|
|
|
562
|
|
|
|
613
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
2
|
|
|
|
3
|
|
|
|
1
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
560
|
|
|
$
|
610
|
|
|
$
|
1,299
|
|
|
|
|
|
|
|
|
Amounts attributable to Motorola Solutions, Inc. common
stockholders:
|
|
|
Earnings (loss) from continuing operations, net of tax
|
|
$
|
560
|
|
|
$
|
640
|
|
|
$
|
(697
|
)
|
Earnings (loss) from discontinued operations, net of tax
|
|
|
-
|
|
|
|
(30
|
)
|
|
|
1,996
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
560
|
|
|
$
|
610
|
|
|
$
|
1,299
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share:
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
3.30
|
|
|
$
|
3.21
|
|
|
$
|
(2.84
|
)
|
Discontinued operations
|
|
|
-
|
|
|
|
(0.15
|
)
|
|
|
8.13
|
|
|
|
$
|
3.30
|
|
|
$
|
3.06
|
|
|
$
|
5.29
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
3.24
|
|
|
$
|
3.17
|
|
|
$
|
(2.84
|
)
|
Discontinued operations
|
|
|
-
|
|
|
|
(0.15
|
)
|
|
|
8.13
|
|
|
|
$
|
3.24
|
|
|
$
|
3.02
|
|
|
$
|
5.29
|
|
Weighted average common shares outstanding:
|
|
|
|
|
Basic
|
|
|
169.6
|
|
|
|
199.6
|
|
|
|
245.6
|
|
Diluted
|
|
|
173.1
|
|
|
|
201.8
|
|
|
|
245.6
|
|
|
|
|
|
|
|
|
|
|
Percentage of Net Sales*
|
Net sales from products
|
|
|
60.4
|
%
|
|
|
64.5
|
%
|
|
|
64.7
|
%
|
Net sales from services
|
|
|
39.6
|
%
|
|
|
35.5
|
%
|
|
|
35.3
|
%
|
Net sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
Costs of products sales
|
|
|
45.2
|
%
|
|
|
44.2
|
%
|
|
|
44.1
|
%
|
Costs of services sales
|
|
|
63.6
|
%
|
|
|
66.9
|
%
|
|
|
66.2
|
%
|
Costs of sales
|
|
|
52.5
|
%
|
|
|
52.3
|
%
|
|
|
51.9
|
%
|
|
|
|
|
|
|
|
Gross margin
|
|
|
47.5
|
%
|
|
|
47.7
|
%
|
|
|
48.1
|
%
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
16.6
|
%
|
|
|
17.9
|
%
|
|
|
20.1
|
%
|
Research and development expenditures
|
|
|
9.2
|
%
|
|
|
10.9
|
%
|
|
|
11.6
|
%
|
Other charges
|
|
|
2.3
|
%
|
|
|
1.3
|
%
|
|
|
33.5
|
%
|
Intangibles amortization
|
|
|
1.9
|
%
|
|
|
0.1
|
%
|
|
|
0.1
|
%
|
Operating earnings (loss)
|
|
|
17.7
|
%
|
|
|
17.5
|
%
|
|
|
(17.1
|
)%
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(3.4
|
)%
|
|
|
(3.0
|
)%
|
|
|
(2.1
|
)%
|
Gains (losses) on sales of investments and businesses, net
|
|
|
(0.1
|
)%
|
|
|
1.9
|
%
|
|
|
0.1
|
%
|
Other
|
|
|
(0.2
|
)%
|
|
|
(0.2
|
)%
|
|
|
(0.6
|
)%
|
Total other expense
|
|
|
(3.7
|
)%
|
|
|
(1.4
|
)%
|
|
|
(2.6
|
)%
|
Earnings (loss) from continuing operations before income taxes
|
|
|
14.0
|
%
|
|
|
16.1
|
%
|
|
|
(19.7
|
)%
|
Income tax expense (benefit)
|
|
|
4.7
|
%
|
|
|
4.8
|
%
|
|
|
(7.9
|
)%
|
Earnings (loss) from continuing operations
|
|
|
9.3
|
%
|
|
|
11.3
|
%
|
|
|
(11.8
|
)%
|
Earnings (loss) from discontinued operations, net of tax
|
|
|
-
|
%
|
|
|
(0.5
|
)%
|
|
|
33.9
|
%
|
Net earnings
|
|
|
9.3
|
%
|
|
|
10.8
|
%
|
|
|
22.1
|
%
|
|
|
|
|
|
|
|
Less: Earnings attributable to noncontrolling interests
|
|
|
-
|
%
|
|
|
0.1
|
%
|
|
|
-
|
%
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
|
9.3
|
%
|
|
|
10.7
|
%
|
|
|
22.1
|
%
|
* Percentages may not add up due to rounding
|
|
|
|
|
|
GAAP-3
|
|
|
|
|
|
Motorola Solutions, Inc. and Subsidiaries
|
Consolidated Balance Sheets
|
(In millions)
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
Assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,030
|
|
|
$
|
1,980
|
|
Accounts receivable, net
|
|
|
1,372
|
|
|
|
1,362
|
|
Inventories, net
|
|
|
273
|
|
|
|
296
|
|
Other current assets
|
|
|
755
|
|
|
|
954
|
|
Current assets held for disposition
|
|
|
-
|
|
|
|
27
|
|
Total current assets
|
|
|
3,430
|
|
|
|
4,619
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
789
|
|
|
|
487
|
|
Investments
|
|
|
238
|
|
|
|
231
|
|
Deferred income taxes
|
|
|
2,219
|
|
|
|
2,278
|
|
Goodwill
|
|
|
728
|
|
|
|
420
|
|
Other assets
|
|
|
1,021
|
|
|
|
271
|
|
Non-current assets held for disposition
|
|
|
-
|
|
|
|
40
|
|
Total assets
|
|
$
|
8,425
|
|
|
$
|
8,346
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
4
|
|
|
$
|
4
|
|
Accounts payable
|
|
|
553
|
|
|
|
518
|
|
Accrued liabilities
|
|
|
2,073
|
|
|
|
1,671
|
|
Total current liabilities
|
|
|
2,630
|
|
|
|
2,193
|
|
|
|
|
|
|
Long-term debt
|
|
|
4,392
|
|
|
|
4,345
|
|
Other liabilities
|
|
|
2,355
|
|
|
|
1,904
|
|
|
|
|
|
|
Total Motorola Solutions, Inc. stockholders' equity (deficit)
|
|
|
(964
|
)
|
|
|
(106
|
)
|
|
|
|
|
|
Noncontrolling interests
|
|
|
12
|
|
|
|
10
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
8,425
|
|
|
$
|
8,346
|
|
|
|
|
|
|
Financial Ratios:
|
|
|
|
|
Net cash (debt)*
|
|
$
|
(3,366
|
)
|
|
$
|
(2,369
|
)
|
|
|
|
|
|
*Net cash (debt) = Total cash - Current portion of long-term debt
- Long-term debt
|
|
|
|
|
|
GAAP-4
|
|
|
|
|
|
Motorola Solutions, Inc. and Subsidiaries
|
Consolidated Statements of Cash Flows
|
(In millions)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
December 31, 2016
|
|
December 31, 2015
|
Operating
|
|
|
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
243
|
|
|
$
|
279
|
|
Earnings attributable to noncontrolling interests
|
|
|
1
|
|
|
|
1
|
|
Net earnings
|
|
|
244
|
|
|
|
280
|
|
Earnings from discontinued operations, net of tax
|
|
|
-
|
|
|
|
2
|
|
Earnings from continuing operations, net of tax
|
|
|
244
|
|
|
|
278
|
|
Adjustments to reconcile earnings (loss) from continuing operations
to net cash provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
75
|
|
|
|
37
|
|
Non-cash other charges
|
|
|
11
|
|
|
|
9
|
|
Loss on pension plan settlement
|
|
|
26
|
|
|
|
-
|
|
Share-based compensation expense
|
|
|
16
|
|
|
|
20
|
|
Gains on sales of investments and businesses, net
|
|
|
(7
|
)
|
|
|
(47
|
)
|
Loss from the extinguishment of long-term debt
|
|
|
2
|
|
|
|
-
|
|
Deferred income taxes
|
|
|
71
|
|
|
|
33
|
|
Changes in assets and liabilities, net of effects of acquisitions,
dispositions, and foreign currency translation adjustments:
|
|
|
|
|
Accounts receivable
|
|
|
(213
|
)
|
|
|
(146
|
)
|
Inventories
|
|
|
6
|
|
|
|
37
|
|
Other current assets
|
|
|
(81
|
)
|
|
|
54
|
|
Accounts payable and accrued liabilities
|
|
|
427
|
|
|
|
179
|
|
Other assets and liabilities
|
|
|
(64
|
)
|
|
|
(39
|
)
|
Net cash provided by operating activities from continuing operations
|
|
|
513
|
|
|
|
415
|
|
Investing
|
|
|
|
|
Acquisitions and investments, net
|
|
|
(259
|
)
|
|
|
(436
|
)
|
Proceeds from sales of investments and businesses, net
|
|
|
33
|
|
|
|
80
|
|
Capital expenditures
|
|
|
(60
|
)
|
|
|
(44
|
)
|
Proceeds from sales of property, plant and equipment
|
|
|
4
|
|
|
|
1
|
|
Net cash used for investing activities from continuing operations
|
|
|
(282
|
)
|
|
|
(399
|
)
|
Financing
|
|
|
|
|
Repayment of debt
|
|
|
(683
|
)
|
|
|
(1
|
)
|
Net proceeds from issuance of debt
|
|
|
-
|
|
|
|
(5
|
)
|
Issuance of common stock
|
|
|
14
|
|
|
|
14
|
|
Purchase of common stock
|
|
|
(114
|
)
|
|
|
(179
|
)
|
Excess tax benefit from share-based compensation
|
|
|
-
|
|
|
|
4
|
|
Payment of dividends
|
|
|
(68
|
)
|
|
|
(60
|
)
|
Net cash used for financing activities from continuing operations
|
|
|
(851
|
)
|
|
|
(227
|
)
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents from
continuing operations
|
|
|
(37
|
)
|
|
|
(9
|
)
|
Net decrease in cash and cash equivalents
|
|
|
(657
|
)
|
|
|
(220
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
1,687
|
|
|
|
2,200
|
|
Cash and cash equivalents, end of period
|
|
$
|
1,030
|
|
|
$
|
1,980
|
|
|
|
|
|
|
Financial Ratios:
|
|
|
|
|
Free cash flow*
|
|
$
|
453
|
|
|
$
|
371
|
|
|
|
|
|
|
*Free cash flow = Net cash provided by operating activities -
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
|
|
GAAP-5
|
|
|
|
|
|
|
|
Motorola Solutions, Inc. and Subsidiaries
|
Consolidated Statements of Cash Flows
|
(In millions)
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
Operating
|
|
|
|
|
|
|
Net earnings attributable to Motorola Solutions, Inc.
|
|
$
|
560
|
|
|
$
|
610
|
|
|
$
|
1,299
|
|
Earnings attributable to noncontrolling interests
|
|
|
2
|
|
|
|
3
|
|
|
|
1
|
|
Net earnings
|
|
|
562
|
|
|
|
613
|
|
|
|
1,300
|
|
Earnings (loss) from discontinued operations, net of tax
|
|
|
-
|
|
|
|
(30
|
)
|
|
|
1,996
|
|
Earnings (loss) from continuing operations, net of tax
|
|
|
562
|
|
|
|
643
|
|
|
|
(696
|
)
|
Adjustments to reconcile earnings (loss) from continuing operations
to net cash provided by operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
|
295
|
|
|
|
150
|
|
|
|
173
|
|
Non-cash other charges
|
|
|
54
|
|
|
|
52
|
|
|
|
-
|
|
Non-U.S. pension curtailment gain
|
|
|
-
|
|
|
|
(32
|
)
|
|
|
-
|
|
Gain on sale of building and land
|
|
|
-
|
|
|
|
-
|
|
|
|
(21
|
)
|
Loss on pension plan settlement
|
|
|
26
|
|
|
|
-
|
|
|
|
1,883
|
|
Share-based compensation expense
|
|
|
68
|
|
|
|
78
|
|
|
|
94
|
|
Loss (gains) on sales of investments and businesses, net
|
|
|
6
|
|
|
|
(107
|
)
|
|
|
(5
|
)
|
Loss from the extinguishment of long-term debt
|
|
|
2
|
|
|
|
-
|
|
|
|
37
|
|
Deferred income taxes
|
|
|
213
|
|
|
|
160
|
|
|
|
(557
|
)
|
Changes in assets and liabilities, net of effects of acquisitions,
dispositions, and foreign currency translation adjustments:
|
|
|
|
|
|
Accounts receivable
|
|
|
32
|
|
|
|
21
|
|
|
|
(62
|
)
|
Inventories
|
|
|
6
|
|
|
|
16
|
|
|
|
(5
|
)
|
Other current assets
|
|
|
(185
|
)
|
|
|
92
|
|
|
|
(47
|
)
|
Accounts payable and accrued liabilities
|
|
|
203
|
|
|
|
26
|
|
|
|
(72
|
)
|
Other assets and liabilities
|
|
|
(117
|
)
|
|
|
(78
|
)
|
|
|
(1,359
|
)
|
Net cash provided by (used for) operating activities from continuing
operations
|
|
|
1,165
|
|
|
|
1,021
|
|
|
|
(637
|
)
|
Investing
|
|
|
|
|
|
|
Acquisitions and investments, net
|
|
|
(1,474
|
)
|
|
|
(586
|
)
|
|
|
(47
|
)
|
Proceeds from sales of investments and businesses, net
|
|
|
670
|
|
|
|
230
|
|
|
|
3,403
|
|
Capital expenditures
|
|
|
(271
|
)
|
|
|
(175
|
)
|
|
|
(181
|
)
|
Proceeds from sales of property, plant and equipment
|
|
|
73
|
|
|
|
3
|
|
|
|
33
|
|
Net cash provided by (used for) investing activities from continuing
operations
|
|
|
(1,002
|
)
|
|
|
(528
|
)
|
|
|
3,208
|
|
Financing
|
|
|
|
|
|
|
Repayment of debt
|
|
|
(686
|
)
|
|
|
(4
|
)
|
|
|
(465
|
)
|
Net proceeds from issuance of debt
|
|
|
673
|
|
|
|
971
|
|
|
|
1,375
|
|
Issuance of common stock
|
|
|
93
|
|
|
|
84
|
|
|
|
87
|
|
Purchase of common stock
|
|
|
(842
|
)
|
|
|
(3,177
|
)
|
|
|
(2,546
|
)
|
Excess tax benefit from share-based compensation
|
|
|
-
|
|
|
|
5
|
|
|
|
11
|
|
Payment of dividends
|
|
|
(280
|
)
|
|
|
(277
|
)
|
|
|
(318
|
)
|
Distributions from discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
93
|
|
Net cash used for financing activities from continuing operations
|
|
|
(1,042
|
)
|
|
|
(2,398
|
)
|
|
|
(1,763
|
)
|
Discontinued Operations
|
|
|
|
|
|
|
Net cash provided by operating activities from discontinued
operations
|
|
|
-
|
|
|
|
-
|
|
|
|
95
|
|
Net cash provided by investing activities from discontinued
operations
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
Net cash used for financing activities from discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
(93
|
)
|
Effect of exchange rate changes on cash and cash equivalents from
discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
(6
|
)
|
Net cash provided by discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents from
continuing operations
|
|
|
(71
|
)
|
|
|
(69
|
)
|
|
|
(79
|
)
|
Net decrease in cash and cash equivalents
|
|
|
(950
|
)
|
|
|
(1,974
|
)
|
|
|
729
|
|
Cash and cash equivalents, beginning of period
|
|
|
1,980
|
|
|
|
3,954
|
|
|
|
3,225
|
|
Cash and cash equivalents, end of period
|
|
$
|
1,030
|
|
|
$
|
1,980
|
|
|
$
|
3,954
|
|
|
|
|
|
|
|
|
Financial Ratios:
|
|
|
|
|
|
|
Free cash flow*
|
|
$
|
894
|
|
|
$
|
846
|
|
|
$
|
(818
|
)
|
|
|
|
|
|
|
|
*Free cash flow = Net cash provided by operating activities -
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
GAAP-6
|
|
|
|
|
|
|
|
|
Motorola Solutions, Inc. and Subsidiaries
|
Segment Information
|
(In millions)
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
% Change
|
|
Products
|
|
$
|
1,226
|
|
|
$
|
1,125
|
|
|
9
|
%
|
|
Services
|
|
|
657
|
|
|
|
557
|
|
|
18
|
%
|
|
Total Motorola Solutions
|
|
$
|
1,883
|
|
|
$
|
1,682
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
% Change
|
|
Products
|
|
$
|
3,649
|
|
|
$
|
3,676
|
|
|
(1
|
)%
|
|
Services
|
|
|
2,389
|
|
|
|
2,019
|
|
|
18
|
%
|
|
Total Motorola Solutions
|
|
$
|
6,038
|
|
|
$
|
5,695
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
% Change
|
|
Products
|
|
$
|
330
|
|
|
$
|
291
|
|
|
13
|
%
|
|
Services
|
|
|
73
|
|
|
|
98
|
|
|
(26
|
)%
|
|
Total Motorola Solutions
|
|
$
|
403
|
|
|
$
|
389
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
% Change
|
|
Products
|
|
$
|
734
|
|
|
$
|
704
|
|
|
4
|
%
|
|
Services
|
|
|
333
|
|
|
|
290
|
|
|
15
|
%
|
|
Total Motorola Solutions
|
|
$
|
1,067
|
|
|
$
|
994
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings %
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
|
Products
|
|
|
26.9
|
%
|
|
|
25.9
|
%
|
|
|
|
Services
|
|
|
11.1
|
%
|
|
|
17.6
|
%
|
|
|
|
Total Motorola Solutions
|
|
|
21.4
|
%
|
|
|
23.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
|
Products
|
|
|
20.1
|
%
|
|
|
19.2
|
%
|
|
|
|
Services
|
|
|
13.9
|
%
|
|
|
14.4
|
%
|
|
|
|
Total Motorola Solutions
|
|
|
17.7
|
%
|
|
|
17.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP-1
|
|
|
|
|
|
|
|
|
|
|
|
Motorola Solutions, Inc. and Subsidiaries
|
Non-GAAP Adjustments (Intangibles Amortization Expense,
Share-Based Compensation Expense, and Highlighted Items)
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBT
|
|
Tax
|
|
PAT
|
|
|
Non-GAAP Adjustments
|
|
Statement Line
|
|
(Inc)/Exp
|
|
Inc/(Exp)
|
|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBT
|
|
Tax
|
|
PAT
|
|
|
Non-GAAP Adjustments
|
|
Statement Line
|
|
(Inc)/Exp
|
|
Inc/(Exp)
|
|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBT
|
|
Tax
|
|
PAT
|
|
|
Non-GAAP Adjustments
|
|
Statement Line
|
|
(Inc)/Exp
|
|
Inc/(Exp)
|
|
(Inc)/Exp
|
|
EPS impact
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense
|
|
Cost of sales, SG&A and R&D
|
|
$
|
17
|
|
$
|
5
|
|
$
|
12
|
|
|
$
|
0.07
|
|
Reorganization of business charges
|
|
Cost of sales and Other charges
|
|
|
7
|
|
|
2
|
|
|
5
|
|
|
|
0.03
|
|
Intangibles amortization expense
|
|
Intangibles amortization
|
|
|
31
|
|
|
7
|
|
|
24
|
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
Total impact on Net earnings
|
|
|
|
$
|
55
|
|
$
|
14
|
|
$
|
41
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBT
|
|
Tax
|
|
PAT
|
|
|
Non-GAAP Adjustments
|
|
Statement Line
|
|
(Inc)/Exp
|
|
Inc/(Exp)
|
|
(Inc)/Exp
|
|
EPS impact
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense
|
|
Cost of sales, SG&A and R&D
|
|
$
|
16
|
|
$
|
5
|
|
$
|
11
|
|
|
$
|
0.06
|
|
Reorganization of business charges
|
|
Cost of sales and Other charges
|
|
|
66
|
|
|
14
|
|
|
52
|
|
|
|
0.31
|
|
Intangibles amortization expense
|
|
Intangibles amortization
|
|
|
30
|
|
|
6
|
|
|
24
|
|
|
|
0.14
|
|
Loss on Non-U.S. pension plan settlement
|
|
Other charges
|
|
|
26
|
|
|
-
|
|
|
26
|
|
|
|
0.15
|
|
Release of unrecognized tax benefit from audit settlement
|
|
Income Tax Expense (Benefit)
|
|
|
-
|
|
|
10
|
|
|
(10
|
)
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total impact on Net earnings
|
|
|
|
$
|
138
|
|
$
|
35
|
|
$
|
103
|
|
|
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBT
|
|
Tax
|
|
PAT
|
|
|
Non-GAAP Adjustments
|
|
Statement Line
|
|
(Inc)/Exp
|
|
Inc/(Exp)
|
|
(Inc)/Exp
|
|
EPS impact
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense
|
|
Cost of sales, SG&A and R&D
|
|
$
|
68
|
|
$
|
22
|
|
$
|
46
|
|
|
$
|
0.27
|
|
Reorganization of business charges
|
|
Cost of sales and Other charges
|
|
|
123
|
|
|
31
|
|
|
92
|
|
|
|
0.53
|
|
Intangibles amortization expense
|
|
Intangibles amortization
|
|
|
113
|
|
|
26
|
|
|
87
|
|
|
|
0.50
|
|
Acquisition related transaction fees
|
|
Other charges
|
|
|
13
|
|
|
-
|
|
|
13
|
|
|
|
0.08
|
|
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
|
|
Building impairment
|
|
Other charges
|
|
|
17
|
|
|
6
|
|
|
11
|
|
|
|
0.06
|
|
Loss on Non-U.S. pension plan settlement
|
|
Other charges
|
|
|
26
|
|
|
-
|
|
|
26
|
|
|
|
0.15
|
|
Release of unrecognized tax benefit from audit settlement
|
|
Income Tax Expense (Benefit)
|
|
|
-
|
|
|
10
|
|
|
(10
|
)
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total impact on Net earnings
|
|
|
|
$
|
396
|
|
$
|
105
|
|
$
|
291
|
|
|
$
|
1.68
|
|
|
|
|
|
|
|
|
Non-GAAP-2
|
|
|
|
|
|
|
|
Motorola Solutions, Inc. and Subsidiaries
|
Non-GAAP Segment Information
|
(In millions)
|
|
|
|
|
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
% Change
|
|
Products
|
$
|
1,226
|
|
|
$
|
1,125
|
|
|
9
|
%
|
|
Services
|
|
657
|
|
|
|
557
|
|
|
18
|
%
|
|
Total Motorola Solutions
|
$
|
1,883
|
|
|
$
|
1,682
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
% Change
|
|
Products
|
$
|
3,649
|
|
|
$
|
3,676
|
|
|
(1
|
)%
|
|
Services
|
|
2,389
|
|
|
|
2,019
|
|
|
18
|
%
|
|
Total Motorola Solutions
|
$
|
6,038
|
|
|
$
|
5,695
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Earnings
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
% Change
|
|
Products
|
$
|
407
|
|
|
$
|
340
|
|
|
20
|
%
|
|
Services
|
|
134
|
|
|
|
118
|
|
|
14
|
%
|
|
Total Motorola Solutions
|
$
|
541
|
|
|
$
|
458
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
% Change
|
|
Products
|
$
|
910
|
|
|
$
|
827
|
|
|
10
|
%
|
|
Services
|
|
517
|
|
|
|
339
|
|
|
53
|
%
|
|
Total Motorola Solutions
|
$
|
1,427
|
|
|
$
|
1,166
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Earnings %
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
|
Products
|
|
33.2
|
%
|
|
|
30.2
|
%
|
|
|
|
Services
|
|
20.4
|
%
|
|
|
21.2
|
%
|
|
|
|
Total Motorola Solutions
|
|
28.7
|
%
|
|
|
27.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
|
Products
|
|
24.9
|
%
|
|
|
22.5
|
%
|
|
|
|
Services
|
|
21.6
|
%
|
|
|
16.8
|
%
|
|
|
|
Total Motorola Solutions
|
|
23.6
|
%
|
|
|
20.5
|
%
|
|
|
|
|
|
|
|
|
|
|
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
|
%
|
|
|
|
|
|
|
|
Q3 2016
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
Products
|
|
Services
|
Net sales
|
|
$
|
1,532
|
|
|
$
|
920
|
|
|
$
|
612
|
|
Operating earnings ("OE")
|
|
$
|
341
|
|
|
$
|
225
|
|
|
$
|
116
|
|
|
|
|
|
|
|
|
Above-OE non-GAAP adjustments:
|
|
|
|
|
|
|
Share-based compensation expense
|
|
|
17
|
|
|
|
11
|
|
|
|
6
|
|
Reorganization of business charges
|
|
|
7
|
|
|
|
5
|
|
|
|
2
|
|
Intangibles amortization expense
|
|
|
31
|
|
|
|
2
|
|
|
|
29
|
|
Total above-OE non-GAAP adjustments
|
|
|
55
|
|
|
|
18
|
|
|
|
37
|
|
|
|
|
|
|
|
|
Operating earnings after non-GAAP adjustments
|
|
$
|
396
|
|
|
$
|
243
|
|
|
$
|
153
|
|
|
|
|
|
|
|
|
Operating earnings as a percentage of net sales - GAAP
|
|
|
22.3
|
%
|
|
|
24.5
|
%
|
|
|
19.0
|
%
|
Operating earnings as a percentage of net sales - after non-GAAP
adjustments
|
|
|
25.8
|
%
|
|
|
26.4
|
%
|
|
|
25.0
|
%
|
|
|
|
|
|
|
|
Q4 2016
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
Products
|
|
Services
|
Net sales
|
|
$
|
1,883
|
|
|
$
|
1,226
|
|
|
$
|
657
|
|
Operating earnings ("OE")
|
|
$
|
403
|
|
|
$
|
330
|
|
|
$
|
73
|
|
|
|
|
|
|
|
|
Above-OE non-GAAP adjustments:
|
|
|
|
|
|
|
Share-based compensation expense
|
|
|
16
|
|
|
|
10
|
|
|
|
6
|
|
Reorganization of business charges
|
|
|
66
|
|
|
|
47
|
|
|
|
19
|
|
Loss on Non-U.S. pension plan settlement
|
|
|
26
|
|
|
|
18
|
|
|
|
8
|
|
Intangibles amortization expense
|
|
|
30
|
|
|
|
2
|
|
|
|
28
|
|
Total above-OE non-GAAP adjustments
|
|
|
138
|
|
|
|
77
|
|
|
|
61
|
|
|
|
|
|
|
|
|
Operating earnings after non-GAAP adjustments
|
|
$
|
541
|
|
|
$
|
407
|
|
|
$
|
134
|
|
|
|
|
|
|
|
|
Operating earnings as a percentage of net sales - GAAP
|
|
|
21.4
|
%
|
|
|
26.9
|
%
|
|
|
11.1
|
%
|
Operating earnings as a percentage of net sales - after non-GAAP
adjustments
|
|
|
28.7
|
%
|
|
|
33.2
|
%
|
|
|
20.4
|
%
|
|
|
|
|
|
|
|
FY 2016
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
Products
|
|
Services
|
Net sales
|
|
$
|
6,038
|
|
|
$
|
3,649
|
|
|
$
|
2,389
|
|
Operating earnings ("OE")
|
|
$
|
1,067
|
|
|
$
|
734
|
|
|
$
|
333
|
|
|
|
|
|
|
|
|
Above-OE non-GAAP adjustments:
|
|
|
|
|
|
|
Share-based compensation expense
|
|
|
68
|
|
|
|
44
|
|
|
|
24
|
|
Reorganization of business charges
|
|
|
123
|
|
|
|
94
|
|
|
|
29
|
|
Loss on Non-U.S. pension plan settlement
|
|
|
26
|
|
|
|
18
|
|
|
|
8
|
|
Intangibles amortization expense
|
|
|
113
|
|
|
|
8
|
|
|
|
105
|
|
Acquisition related transaction fees
|
|
|
13
|
|
|
|
-
|
|
|
|
13
|
|
Building impairment
|
|
|
17
|
|
|
|
12
|
|
|
|
5
|
|
Total above-OE non-GAAP adjustments
|
|
|
360
|
|
|
|
176
|
|
|
|
184
|
|
|
|
|
|
|
|
|
Operating earnings after non-GAAP adjustments
|
|
$
|
1,427
|
|
|
$
|
910
|
|
|
$
|
517
|
|
|
|
|
|
|
|
|
Operating earnings as a percentage of net sales - GAAP
|
|
|
17.7
|
%
|
|
|
20.1
|
%
|
|
|
13.9
|
%
|
Operating earnings as a percentage of net sales - after non-GAAP
adjustments
|
|
|
23.6
|
%
|
|
|
24.9
|
%
|
|
|
21.6
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170202006263/en/
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|