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Exhibit 99.1

Motorola Solutions Reports

Third-Quarter 2012 Financial Results

 

   

Sales of $2.2 billion, up 3 percent from a year ago

 

   

Record Government sales of $1.5 billion, up 12 percent from a year ago

 

   

GAAP earnings per share (EPS) from continuing operations* up 60 percent from a year ago

 

   

Non-GAAP** EPS from continuing operations up 27 percent from a year ago

 

   

Repurchased $308 million of shares in the quarter

 

(In millions, except EPS)

   Q3 2012      Q3 2011      Change  

Total sales

   $ 2,153       $ 2,085         3

GAAP operating earnings

   $ 324       $ 254         28

Non-GAAP operating earnings

   $ 387       $ 359         8

GAAP EPS from continuing operations

   $ 0.72       $ 0.45         60

Non-GAAP EPS from continuing operations

   $ 0.84       $ 0.66         27

Click here for printable press release and financial tables.

SCHAUMBURG, Ill. – Oct. 24, 2012 – Motorola Solutions, Inc. (NYSE: MSI) announced today its third-quarter 2012 results highlighted by sales of $2.2 billion, up 3 percent from the third quarter of 2011 and driven by strong demand in its Government segment. These results include an unfavorable currency exchange rate impact to revenues of $42 million, or approximately 2 percent.

“We had strong revenue and earnings growth, including record performance in our Government segment,” said Greg Brown, chairman and CEO of Motorola Solutions. “We expanded operating margins, managed our costs and grew earnings per share 27 percent driven by our operating performance and continued return of capital to shareholders.”

GAAP operating earnings in the third quarter of 2012 were $324 million or 15 percent of sales, compared to $254 million or 12.2 percent of sales in the third quarter of 2011. GAAP EPS from continuing operations was $0.72, compared to $0.45 in the third quarter of 2011.

Non-GAAP operating earnings in the third quarter of 2012 were $387 million or 18 percent of sales, compared to $359 million or 17.2 percent of sales in the third quarter of 2011. Non-GAAP EPS from continuing operations was $0.84, compared to $0.66 in the third quarter of 2011. Non-GAAP financial information excludes after-tax expense of approximately $0.12 per diluted share related to share-based compensation expense, 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 press release.

During the third quarter of 2012, the company generated $182 million in operating cash flow from continuing operations, including the impact of an early pension payment of $72 million. Additionally, the company repurchased $308 million in shares, paid $63 million in dividends and ended the quarter with total cash*** of $3.5 billion.

Government segment sales were $1.5 billion, up 12 percent from the year-ago quarter, driven by double-digit growth in North America and solid performance in EMEA and Latin


America. GAAP operating earnings were $273 million or 17.9 percent of sales compared to $186 million or 13.7 percent in the year-ago quarter. Non-GAAP operating earnings were $310 million or 20.4 percent of sales compared to $224 million or 16.5 percent in the year-ago quarter.

Government highlights:

 

   

Secured multimillion dollar contracts with the state of Alaska; the state of Ohio; Maui County in Hawaii; Prince George’s County in Maryland; York County in South Carolina; the City of Phoenix; the City of Glendale, Calif.; the City of Fort Wayne, Ind.; Rheinbahn public transit in Germany; Wuxi Metro in China; and Codelco Chuquicamata Mining in Chile

 

   

Continued to expand family of APX™ Project 25 (P25) two-way radios including a new accountability solution for the Motorola Tactical Incident Command Solution, which helps incident commanders accurately and quickly keep track of on-scene operations; the APX 4500 mobile radio, which gives P25 interoperable communications for all first responders; and the APX 3000, which enables undercover officers to use a high-powered concealed portable radio

 

   

At APCO (Association of Public-Safety Communications Officials) International, Motorola Solutions demonstrated how the company’s technology and expertise enhance a safer and thriving Connected City by delivering a comprehensive product portfolio and solutions that better serve – and protect – the Connected Officer, the Connected Patrol Vehicle and the Connected Fire Fighter. All integrated solutions enable our public-safety customers to stay connected and leverage technology with their very challenging jobs

Enterprise segment sales were $632 million, down 13 percent from the year-ago quarter, which included the anticipated decline in iDEN sales. GAAP operating earnings were $51 million or 8.1 percent of sales compared to $68 million or 9.4 percent in the year-ago quarter. Non-GAAP operating earnings were $77 million or 12.2 percent of sales compared to $135 million or 18.6 percent in the year-ago quarter.

Enterprise highlights:

 

   

Secured contracts with key customers such as Best Buy, Pharmedium and Flowers Bakery in the United States; Aeon Technology in Shanghai and Grupo Polar Companies in Venezuela

 

   

Introduced the MC67 mobile computer, an ultra-rugged device that offers HSPA+ WAN, which is targeted at task worker applications in the field such as parcel collection and delivery scanning, inventory management, sales order entry, direct store delivery (DSD) and route accounting

 

   

Introduced the Wide-Area Network (WAN) version of the ET1 tablet that brings the ‘go-anywhere’ familiarity and popularity of a consumer-class user experience to a true enterprise-class device that offers enhanced durability, an optional modular barcode scanner and magnetic stripe reader, hot-swappable battery packs and secure system software


Fourth-Quarter and Full-Year 2012 Outlook

The company expects fourth-quarter sales to grow approximately 6 to 7 percent compared with the fourth quarter of 2011, with EPS from continuing operations of $0.98 to $1.03. The company is increasing its full-year 2012 outlook for sales growth to 6 to 6.5 percent to reflect revenues for Psion, which Motorola Solutions acquired on Oct. 1, 2012. Our EPS outlook excludes share-based compensation expense, intangible assets amortization expense and charges associated with items of the variety typically highlighted by the company in its quarterly earnings releases.

Consolidated GAAP Results

A comparison of results from operations is as follows:

 

     Third Quarter  

(In millions, except per share amounts)

   2012      2011  

Net sales

   $ 2,153       $ 2,085   

Gross margin

     1,087         1,055   

Operating earnings

     324         254   

Earnings from continuing operations before income taxes

     324         238   

Income tax expense

     118         83   

Earnings from continuing operations**

     206         153   

Loss from discontinued operations, net of tax

     —           (25

Net earnings

   $ 206       $ 128   

Diluted EPS from continuing operations:

   $ 0.72       $ 0.45   

Weighted average diluted common shares outstanding

     287.4         339.5   

Highlighted Items, Share-Based Compensation Expense and Intangible Assets Amortization Expense

The table below includes highlighted items, share-based compensation expense and intangible assets amortization expense for the third quarter of 2012.

 

(per diluted common share)

   Third Quarter
2012
 

GAAP Earnings Per Common Share from Continuing Operations**

   $ 0.72   

Highlighted Items:

  

Reorganization of business charges

   $ 0.03   

Gain on sale of equity investment

   $ (0.03
  

 

 

 

Total Highlighted Items

   $ 0.00   
  

 

 

 

Share-based compensation expense

   $ 0.11   

Intangible assets amortization expense

   $ 0.01   
  

 

 

 

Total Share-Based Compensation Expense and Intangible Assets Amortization Expense

   $ 0.12   
  

 

 

 

Total Non-GAAP Adjustments

   $ 0.12   
  

 

 

 

Non-GAAP Earnings Per Common Share from Continuing Operations

   $ 0.84   
  

 

 

 


Conference Call and Webcast

Motorola Solutions will host its quarterly conference call beginning at 7 a.m. U.S. Central Daylight Time (8 a.m. U.S. Eastern Daylight Time) on Wednesday, Oct. 24. The conference call will be webcast live with audio and slides at www.motorolasolutions.com/investor.

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. We have provided these Non-GAAP measurements to help investors better understand our core operating performance, enhance comparisons of core operating performance from period to period and allow better comparisons of operating performance to our 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 GAAP.

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 our 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 income measurements, primarily because it represents a significant non-cash expense and because the company evaluates its performance excluding intangible assets amortization expense. Amortization of intangible assets is consistent in amount and frequency but is significantly affected by the timing and size of the company’s acquisitions. Investors should note that the use of intangible assets contributed to the company’s revenues earned during the periods presented and will contribute to the company’s future period revenues as well. Intangible assets amortization expense will recur in future periods.

Details of the above items and reconciliations of the Non-GAAP measurements to the corresponding GAAP measurements can be found at the end of this press release.

Business Risks

This press release contains “forward-looking statements” within the meaning of applicable federal securities law. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as “believes,” “expects,” “intends,” “anticipates,” “estimates” and similar expressions. We can give no assurance that any future results or events discussed in these statements will be achieved. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our 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 our 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 fourth quarter and full year of 2012, payment of a regular quarterly dividend and purchases of shares under the company’s share repurchase program. 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, Inc.’s 2011 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 and enterprise communications industries; (2) the level of demand for the company’s products, particularly if businesses and governments defer or cancel purchases in response to tighter credit; (3) the company’s ability to introduce new products and technologies in a timely manner; (4) negative impact on the company’s business from global economic conditions, which may include: (i) potential 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; and (viii) the company’s ability to access the capital markets on acceptable terms and conditions; (5) the company’s ability to purchase sufficient materials, parts and components to meet customer demand, particularly in light of global economic conditions; (6) risks related to dependence on certain key suppliers, subcontractors, third-party distributors and other representatives; (7) the impact on the


company’s performance and financial results from strategic acquisitions or divestitures, including those that may occur in the future; (8) risks related to the company’s manufacturing and business operations in foreign countries; (9) the creditworthiness of the company’s customers and distributors, particularly purchasers of large infrastructure systems; (10) 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; (11) the ownership of certain logos, trademarks, trade names and service marks including “MOTOROLA” by Motorola Mobility Holdings, Inc.; (12) 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; (13) unexpected liabilities or expenses, including unfavorable outcomes to any pending or future litigation or regulatory or similar proceedings; (14) the impact of foreign currency fluctuations, including the negative impact of a strengthening U.S. dollar on the company when competing for business in foreign markets; (15) the impact of the percentage of cash and cash equivalents held outside of the United States; (16) the ability of the company to pay future dividends due to possible adverse market conditions or adverse impacts on the company’s cash flow; (17) 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; (18) the impact of changes in governmental policies, laws or regulations; (19) the outcome of currently ongoing and future tax matters; (20) negative consequences from the company’s outsourcing of various activities, including certain manufacturing, information technology and administrative functions; and (21) the impact of our multi-year phased upgrade and consolidation of our enterprise resource planning systems into a single global platform. 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

 

* Amounts attributable to Motorola Solutions, Inc. common shareholders
** Non-GAAP financial information excludes from GAAP results the effects of share-based compensation expense, intangible assets amortization expense and highlighted items
*** Total cash = Cash and cash equivalents + Sigma Fund (current) and short-term investments

About Motorola Solutions

Motorola Solutions is a leading provider of mission-critical communication products and services for enterprise and government customers. Through leading-edge innovation and communications technology, it is a global leader that enables its customers to be their best in the moments that matter. Motorola Solutions trades on the New York Stock Exchange under the ticker “MSI.” To learn more, visit www.motorolasolutions.com. For ongoing news, please visit our media center or subscribe to our news feed.

Media Contacts

Nick Sweers

Motorola Solutions

+1 847-576-2462

nicholas.sweers@motorolasolutions.com


Tama McWhinney

Motorola Solutions

+1 847-538-1865

tama.mcwhinney@motorolasolutions.com

Investor Contacts

Shep Dunlap

Motorola Solutions

+1 847-576-6899

shep.dunlap@motorolasolutions.com

Jason Winkler

Motorola Solutions

+1 847-576-4995

jason.winkler@motorolasolutions.com

MOTOROLA, MOTO, 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. ©2012 Motorola Solutions, Inc. All rights reserved.


GAAP-1

Motorola Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In millions, except per share amounts)

 

     Three Months Ended  
     September 29, 2012     October 1, 2011  

Net sales from products

   $ 1,567      $ 1,552   

Net sales from services

     586        533   
  

 

 

   

 

 

 

Net sales

     2,153        2,085   

Costs of product sales

     682        679   

Costs of service sales

     384        351   
  

 

 

   

 

 

 

Costs of sales

     1,066        1,030   
  

 

 

   

 

 

 

Gross margin

     1,087        1,055   
  

 

 

   

 

 

 

Selling, general and administrative expenses

     485        471   

Research and development expenditures

     262        270   

Other charges

     10        10   

Intangibles amortization

     6        50   
  

 

 

   

 

 

 

Operating earnings

     324        254   
  

 

 

   

 

 

 

Other income (expense):

    

Interest expense, net

     (16     (18

Gain on sales of investments and businesses, net

     19        2   

Other

     (3     —     
  

 

 

   

 

 

 

Total other expense

     —          (16
  

 

 

   

 

 

 

Earnings from continuing operations before income taxes

     324        238   

Income tax expense

     118        83   
  

 

 

   

 

 

 

Earnings from continuing operations

     206        155   

Loss from discontinued operations, net of tax

     —          (25
  

 

 

   

 

 

 

Net earnings

     206        130   

Less: Earnings attributable to noncontrolling interests

     —          2   
  

 

 

   

 

 

 

Net earnings attributable to Motorola Solutions, Inc.

   $ 206      $ 128   
  

 

 

   

 

 

 

Amounts attributable to Motorola Solutions, Inc. common shareholders

    

Earnings from continuing operations, net of tax

   $ 206      $ 153   

Loss from discontinued operations, net of tax

     —          (25
  

 

 

   

 

 

 

Net earnings

   $ 206      $ 128   
  

 

 

   

 

 

 

Earnings (loss) per common share

    

Basic:

    

Continuing operations

   $ 0.73      $ 0.46   

Discontinued operations

     —          (0.08
  

 

 

   

 

 

 
   $ 0.73      $ 0.38   
  

 

 

   

 

 

 

Diluted:

    

Continuing operations

   $ 0.72      $ 0.45   

Discontinued operations

     —          (0.07
  

 

 

   

 

 

 
   $ 0.72      $ 0.38   
  

 

 

   

 

 

 

Weighted average common shares outstanding

    

Basic

     283.1        335.4   

Diluted

     287.4        339.5   
     Percentage of Net Sales*  

Net sales from products

     72.8     74.4

Net sales from services

     27.2     25.6
  

 

 

   

 

 

 

Net sales

     100     100
  

 

 

   

 

 

 

Costs of product sales

     43.5     43.8

Costs of service sales

     65.5     65.9
  

 

 

   

 

 

 

Costs of sales

     49.5     49.4
  

 

 

   

 

 

 

Gross margin

     50.5     50.6
  

 

 

   

 

 

 

Selling, general and administrative expenses

     22.5     22.6

Research and development expenditures

     12.2     12.9

Other charges

     0.5     0.5

Intangibles amortization

     0.3     2.4
  

 

 

   

 

 

 

Operating earnings

     15.0     12.2
  

 

 

   

 

 

 

Other income (expense):

    

Interest expense, net

     -0.7     -0.9

Gain on sales of investments and businesses, net

     0.9     0.1

Other

     -0.1     0.0
  

 

 

   

 

 

 

Total other expense

     0.0     -0.8
  

 

 

   

 

 

 

Earnings from continuing operations before income taxes

     15.0     11.4

Income tax expense

     5.5     4.0
  

 

 

   

 

 

 

Earnings from continuing operations

     9.6     7.4

Earnings from discontinued operations, net of tax

     0.0     -1.2
  

 

 

   

 

 

 

Net earnings

     9.6     6.2

Less: Loss attributable to noncontrolling interests

     0.0     0.1
  

 

 

   

 

 

 

Net earnings attributable to Motorola Solutions, Inc.

     9.6     6.1
  

 

 

   

 

 

 

 

* 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)

 

     Nine Months Ended  
     September 29, 2012     October 1, 2011  

Net sales from products

   $ 4,574      $ 4,379   

Net sales from services

     1,683        1,524   
  

 

 

   

 

 

 

Net sales

     6,257        5,903   

Costs of product sales

     2,052        1,949   

Costs of service sales

     1,085        968   
  

 

 

   

 

 

 

Costs of sales

     3,137        2,917   
  

 

 

   

 

 

 

Gross margin

     3,120        2,986   
  

 

 

   

 

 

 

Selling, general and administrative expenses

     1,454        1,414   

Research and development expenditures

     785        769   

Other charges

     30        71   

Intangibles amortization

     18        150   
  

 

 

   

 

 

 

Operating earnings

     833        582   
  

 

 

   

 

 

 

Other income (expense):

    

Interest expense, net

     (46     (59

Gain on sales of investments and businesses, net

     39        21   

Other

     (18     (73
  

 

 

   

 

 

 

Total other expense

     (25     (111
  

 

 

   

 

 

 

Earnings from continuing operations before income taxes

     808        471   

Income tax expense (benefit)

     266        (93
  

 

 

   

 

 

 

Earnings from continuing operations

     542        564   

Earnings from discontinued operations, net of tax

     3        404   
  

 

 

   

 

 

 

Net earnings

     545        968   

Less: Loss attributable to noncontrolling interests

     —          (6
  

 

 

   

 

 

 

Net earnings attributable to Motorola Solutions, Inc.

   $ 545      $ 974   
  

 

 

   

 

 

 

Amounts attributable to Motorola Solutions, Inc. common shareholders

    

Earnings from continuing operations, net of tax

   $ 542      $ 570   

Earnings from discontinued operations, net of tax

     3        404   
  

 

 

   

 

 

 

Net earnings

   $ 545      $ 974   
  

 

 

   

 

 

 

Earnings per common share

    

Basic:

    

Continuing operations

   $ 1.83      $ 1.69   

Discontinued operations

     0.01        1.20   
  

 

 

   

 

 

 
   $ 1.84      $ 2.89   
  

 

 

   

 

 

 

Diluted:

    

Continuing operations

   $ 1.80      $ 1.66   

Discontinued operations

     0.01        1.18   
  

 

 

   

 

 

 
   $ 1.81      $ 2.84   
  

 

 

   

 

 

 

Weighted average common shares outstanding

    

Basic

     296.1        337.3   

Diluted

     301.5        343.4   
     Percentage of Net Sales*  

Net sales from products

     73.1     74.2

Net sales from services

     26.9     25.8
  

 

 

   

 

 

 

Net sales

     100     100
  

 

 

   

 

 

 

Costs of product sales

     44.9     44.5

Costs of service sales

     64.5     63.5
  

 

 

   

 

 

 

Costs of sales

     50.1     49.4
  

 

 

   

 

 

 

Gross margin

     49.9     50.6
  

 

 

   

 

 

 

Selling, general and administrative expenses

     23.2     24.0

Research and development expenditures

     12.5     13.0

Other charges

     0.5     1.2

Intangibles amortization

     0.3     2.5
  

 

 

   

 

 

 

Operating earnings

     13.3     9.9
  

 

 

   

 

 

 

Other income (expense):

    

Interest expense, net

     -0.7     -1.0

Gain on sales of investments and businesses, net

     0.6     0.4

Other

     -0.3     -1.2
  

 

 

   

 

 

 

Total other expense

     -0.4     -1.9
  

 

 

   

 

 

 

Earnings from continuing operations before income taxes

     12.9     8.0

Income tax expense (benefit)

     4.3     -1.6
  

 

 

   

 

 

 

Earnings from continuing operations

     8.7     9.6

Earnings from discontinued operations, net of tax

     0.0     6.8
  

 

 

   

 

 

 

Net earnings

     8.7     16.4

Less: Loss attributable to noncontrolling interests

     0.0     -0.1
  

 

 

   

 

 

 

Net earnings attributable to Motorola Solutions, Inc.

     8.7     16.5
  

 

 

   

 

 

 

 

* Percentages may not add up due to rounding


GAAP-3

Motorola Solutions, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In millions)

 

     September 29,
2012
     December 31,
2011
 

Assets

     

Cash and cash equivalents

   $ 1,779       $ 1,881   

Sigma Fund and short-term investments

     1,760         3,210   

Accounts receivable, net

     1,704         1,866   

Inventories, net

     538         512   

Deferred income taxes

     662         613   

Other current assets

     828         686   
  

 

 

    

 

 

 

Total current assets

     7,271         8,768   
  

 

 

    

 

 

 

Property, plant and equipment, net

     860         896   

Investments

     162         166   

Deferred income taxes

     2,017         2,375   

Goodwill

     1,430         1,428   

Other assets

     280         296   
  

 

 

    

 

 

 

Total assets

   $ 12,020       $ 13,929   
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Current portion of long-term debt

   $ 4       $ 405   

Accounts payable

     646         677   

Accrued liabilities

     2,475         2,733   
  

 

 

    

 

 

 

Total current liabilities

     3,125         3,815   
  

 

 

    

 

 

 

Long-term debt

     1,860         1,130   

Other liabilities

     3,138         3,710   

Total Motorola Solutions, Inc. stockholders’ equity

     3,872         5,214   
  

 

 

    

 

 

 

Noncontrolling interests

     25         60   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 12,020       $ 13,929   
  

 

 

    

 

 

 

Total cash*

   $ 3,539       $ 5,091   

Net cash**

     1,675         3,556   

 

* Total cash = Cash and cash equivalents + Sigma Fund (current and non-current) + Short-term investments
** Net cash = Total cash - Notes payable and 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  
     September 29, 2012     October 1, 2011  

Operating

    

Net earnings attributable to Motorola Solutions, Inc.

   $ 206      $ 128   

Earnings attributable to noncontrolling interests

     —          2   
  

 

 

   

 

 

 

Net earnings

     206        130   

Loss from discontinued operations, net of tax

     —          (25
  

 

 

   

 

 

 

Earnings from continuing operations

     206        155   

Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities:

    

Depreciation and amortization

     45        92   

Non-cash other expense (income)

     13        (6

Share-based compensation expense

     44        45   

Gain on sales of investments and businesses, net

     (19     (1

Deferred income taxes

     110        40   

Changes in assets and liabilities, net of effects of acquisitions and dispositions:

    

Accounts receivable

     (73     (6

Inventories

     (43     (26

Other current assets

     (70     (15

Accounts payable and accrued liabilities

     100        107   

Other assets and liabilities

     (131     92   
  

 

 

   

 

 

 

Net cash provided by operating activities from continuing operations

     182        477   
  

 

 

   

 

 

 

Investing

    

Acquisitions and investments, net

     (7     (24

Proceeds from (used for) sales of investments and businesses, net

     29        (14

Capital expenditures

     (39     (43

Proceeds from sales of property, plant and equipment

     —          2   

Proceeds from (purchases of) sales of Sigma Fund investments, net

     173        (41
  

 

 

   

 

 

 

Net cash provided by (used for) investing activities from continuing operations

     156        (120
  

 

 

   

 

 

 

Financing

    

Repayment of debt

     (1     (1

Issuance of common stock

     16        20   

Purchase of common stock

     (308     (744

Excess tax benefits from share-based compensation

     —          39   

Payment of dividends

     (63     —     

Contribution to Motorola Mobility

     —          (75

Distribution to discontinued operations

     —          19   
  

 

 

   

 

 

 

Net cash used for financing activities from continuing operations

     (356     (742
  

 

 

   

 

 

 

Discontinued Operations

    

Net cash provided by operating activities from discontinued operations

     —          19   

Net cash used for financing activities from discontinued operations

     —          (19

Effect of exchange rate changes on cash and cash equivalents from discontinued operations

     —          —     
  

 

 

   

 

 

 

Net cash provided by (used for) financing activities from discontinued operations

     —          —     
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents from continuing operations

     25        (33
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     7        (418

Cash and cash equivalents, beginning of period

     1,772        2,203   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 1,779      $ 1,785   
  

 

 

   

 

 

 

Financial Ratios:

    

Free cash flow*

   $ 143      $ 434   

 

* 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)

 

     Nine Months Ended  
     September 29, 2012     October 1, 2011  

Operating

    

Net earnings attributable to Motorola Solutions, Inc.

   $ 545      $ 974   

Loss attributable to noncontrolling interests

     —          (6
  

 

 

   

 

 

 

Net earnings

     545        968   

Earnings from discontinued operations, net of tax

     3        404   
  

 

 

   

 

 

 

Earnings from continuing operations

     542        564   

Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities:

    

Depreciation and amortization

     151        273   

Non-cash other income

     12        39   

Share-based compensation expense

     139        123   

Gain on sales of investments and businesses, net

     (39     (21

Loss from the extinguishment of long-term debt

     6        81   

Deferred income taxes

     203        30   

Changes in assets and liabilities, net of effects of acquisitions and dispositions:

    

Accounts receivable

     189        82   

Inventories

     (51     (38

Other current assets

     (147     (6

Accounts payable and accrued liabilities

     (283     (230

Other assets and liabilities

     (218     (93
  

 

 

   

 

 

 

Net cash provided by operating activities from continuing operations

     504        804   
  

 

 

   

 

 

 

Investing

    

Acquisitions and investments, net

     61        (26

Proceeds from (used for) sales of investments and businesses, net

     (38     1,064   

Capital expenditures

     (140     (103

Proceeds from sales of property, plant and equipment

     9        6   

Proceeds from sales of Sigma Fund investments, net

     1,450        225   

Proceeds from sales of short-term investments, net

     —          6   
  

 

 

   

 

 

 

Net cash provided by investing activities from continuing operations

     1,342        1,172   
  

 

 

   

 

 

 

Financing

    

Repayment of debt

     (412     (617

Proceeds from issuance of debt

     747        —     

Issuance of common stock

     79        148   

Purchase of common stock

     (2,112     (744

Excess tax benefits from share-based compensation

     17        39   

Payments of dividends

     (197     —     

Contributions to Motorola Mobility

     (73     (3,275

Distribution from (to) discontinued operations

     (11     102   
  

 

 

   

 

 

 

Net cash used for financing activities from continuing operations

     (1,962     (4,347
  

 

 

   

 

 

 

Discontinued Operations

    

Net cash provided by operating activities from discontinued operations

     2        65   

Net cash used for investing activities from discontinued operations

     —          (8

Net cash provided by (used for) financing activities from discontinued operations

     11        (102

Effect of exchange rate changes on cash and cash equivalents from discontinued operations

     (13     45   
  

 

 

   

 

 

 

Net cash provided by (used for) financing activities from discontinued operations

     —          —     
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents from continuing operations

     14        (52
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (102     (2,423

Cash and cash equivalents, beginning of period

     1,881        4,208   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 1,779      $ 1,785   
  

 

 

   

 

 

 

Financial Ratios:

    

Free cash flow*

   $ 364      $ 701   

 

* Free cash flow = Net cash provided by operating activities - Capital expenditures


GAAP-6

Motorola Solutions, Inc. and Subsidiaries

Segment Information

(In millions)

Summarized below are the Company’s Net sales and Operating earnings by segment for the three and nine months ended September 29, 2012 and October 1, 2011.

Net Sales

 

     Three Months Ended         
     September 29, 2012      October 1, 2011      % Change  

Government

   $ 1,521       $ 1,360         12

Enterprise

     632         725         -13
  

 

 

    

 

 

    

 

 

 

Company Total

   $ 2,153       $ 2,085         3
  

 

 

    

 

 

    

 

 

 
     Nine Months Ended         
     September 29, 2012      October 1, 2011      % Change  

Government

   $ 4,281       $ 3,811         12

Enterprise

     1,976         2,092         -6
  

 

 

    

 

 

    

 

 

 

Company Total

   $ 6,257       $ 5,903         6
  

 

 

    

 

 

    

 

 

 

Operating Earnings

 

     Three Months Ended         
     September 29, 2012      October 1, 2011      % Change  

Government

   $ 273       $ 186         47

Enterprise

     51         68         -25
  

 

 

    

 

 

    

 

 

 

Company Total

   $ 324       $ 254         28
  

 

 

    

 

 

    

 

 

 
     Nine Months Ended         
     September 29, 2012      October 1, 2011      % Change  

Government

   $ 620       $ 390         59

Enterprise

     213         192         11
  

 

 

    

 

 

    

 

 

 

Company Total

   $ 833       $ 582         43
  

 

 

    

 

 

    

 

 

 

Operating Earnings %

 

     Three Months Ended        
     September 29, 2012     October 1, 2011     % Change  

Government

     17.9     13.7     31

Enterprise

     8.1     9.4     -14
  

 

 

   

 

 

   

 

 

 

Company Total

     15.0     12.2     24
  

 

 

   

 

 

   

 

 

 
     Nine Months Ended        
     September 29, 2012     October 1, 2011     % Change  

Government

     14.5     10.2     42

Enterprise

     10.8     9.2     17
  

 

 

   

 

 

   

 

 

 

Company Total

     13.3     9.9     35
  

 

 

   

 

 

   

 

 

 


Non-GAAP-1

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Adjustments (Intangibles Amortization Expense, Stock-Based Compensation Expense and Highlighted Items)

Q1 2012

 

Highlighted Items

  

Statement Line

  PBT
(Inc)/Exp
    Tax
Inc/(Exp)
    PAT
(Inc)/Exp
    EPS impact  

Intangibles amortization expense

  

Intangibles amortization

  $ 6      $ 2      $ 4        0.01   

Stock-based compensation expense

  

Cost of sales, SG&A and R&D

    43        13        30        0.09   

Reorganization of business charges

  

Cost of sales and Other charges

    9        3        6        0.02   

Gain on sale of equity investment

  

Gain on sales of investments and businesses, net

    (16     (6     (10     (0.03
    

 

 

   

 

 

   

 

 

   

 

 

 

Total continuing operations impact

     $ 42      $ 12      $ 30      $ 0.09   
Q2 2012   

Highlighted Items

  

Statement Line

  PBT
(Inc)/Exp
    Tax
Inc/(Exp)
    PAT
(Inc)/Exp
    EPS impact  

Intangibles amortization expense

  

Intangibles amortization

  $ 6      $ 2      $ 4        0.01   

Stock-based compensation expense

  

Cost of sales, SG&A and R&D

    52        21        31        0.10   

Reorganization of business charges

  

Cost of sales and Other charges

    14        5        9        0.03   

Tax expense from audit settlements and agreements

  

Income tax (expense) benefit

    —          13        (13     (0.04
             —     
    

 

 

   

 

 

   

 

 

   

 

 

 

Total continuing operations impact

     $ 72      $ 41      $ 31      $ 0.10   
Q3 2012   

Highlighted Items

  

Statement Line

  PBT
(Inc)/Exp
    Tax
Inc/(Exp)
    PAT
(Inc)/Exp
    EPS impact  

Intangibles amortization expense

  

Intangibles amortization

  $ 6      $ 2      $ 4        0.01   

Stock-based compensation expense

  

Cost of sales, SG&A and R&D

    44        14        30        0.11   

Reorganization of business charges

  

Cost of sales and Other charges

    13        4        9        0.03   

Gain on sale of equity investment

  

Gain on sales of investments and businesses, net

    (13     (5     (8     (0.03
             —     
    

 

 

   

 

 

   

 

 

   

 

 

 

Total continuing operations impact

     $ 50      $ 15      $ 35      $ 0.12   


Non-GAAP-2

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Segment Information

(In millions)

 

Non-GAAP Operating Earnings   
     Three Months Ended        
     September 29, 2012     October 1, 2011     % Change  

Government

   $ 310      $ 224        38

Enterprise

     77        135        -43
  

 

 

   

 

 

   

 

 

 

Company Total

   $ 387      $ 359        8
  

 

 

   

 

 

   

 

 

 
     Nine Months Ended        
     September 29, 2012     October 1, 2011     % Change  

Government

   $ 735      $ 525        40

Enterprise

     292        404        -28
  

 

 

   

 

 

   

 

 

 

Company Total

   $ 1,027      $ 929        11
  

 

 

   

 

 

   

 

 

 
Non-GAAP Operating Earnings %   
     Three Months Ended        
     September 29, 2012     October 1, 2011     % Change  

Government

     20.4     16.5     24

Enterprise

     12.2     18.6     -35
  

 

 

   

 

 

   

 

 

 

Company Total

     18.0     17.2     4
  

 

 

   

 

 

   

 

 

 
     Nine Months Ended        
     September 29, 2012     October 1, 2011     % Change  

Government

     17.2     13.8     25

Enterprise

     14.8     19.3     -23
  

 

 

   

 

 

   

 

 

 

Company Total

     16.4     15.7     4
  

 

 

   

 

 

   

 

 

 


Non-GAAP-3

Motorola Solutions, Inc. and Subsidiaries

Operating Earnings after Non-GAAP Adjustments

Q1 2012

 

     TOTAL     Government     Enterprise  

Net sales

   $     1,956      $ 1,301      $ 655   

Operating earnings

   $ 232      $ 150      $ 82   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Stock-based compensation expense

     43        27        16   

Reorganization of business charges

     9        7        2   

Intangibles amortization expense

     6        —          6   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     58        34        24   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 290      $ 184      $ 106   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales - GAAP

     11.9     11.5     12.5

Operating earnings as a percentage of net sales - after non-GAAP adjustments

     14.8     14.1     16.2
Q2 2012   
     TOTAL     Government     Enterprise  

Net sales

   $ 2,148      $ 1,459      $ 689   

Operating earnings

   $ 278      $ 197      $ 81   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Stock-based compensation expense

     52        34        18   

Reorganization of business charges

     14        9        5   

Intangibles amortization expense

     6        —          6   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     72        43        29   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 350      $ 240      $ 110   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales - GAAP

     12.9     13.5     11.8

Operating earnings as a percentage of net sales - after non-GAAP adjustments

     16.3     16.4     16.0
Q3 2012   
     TOTAL     Government     Enterprise  

Net sales

   $ 2,153      $ 1,521      $ 632   

Operating earnings

   $ 324      $ 273      $ 51   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Stock-based compensation expense

     44        29        15   

Reorganization of business charges

     13        8        5   

Intangibles amortization expense

     6        —          6   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     63        37        26   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 387      $ 310      $ 77   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales - GAAP

     15.0     17.9     8.1

Operating earnings as a percentage of net sales - after non-GAAP adjustments

     18.0     20.4     12.2