Motorola Solutions, Inc. (NYSE: MSI):
- Net sales of $1.9 billion, up 8 percent
from first-quarter 2010
- Total cash* of $6.2 billion with
operating cash flow from continuing operations of $231 million,
compared to $59 million in the year-ago quarter
- Government sales of $1.2 billion, up 5
percent from first-quarter 2010
- Enterprise sales of $695 million, up 14
percent from first-quarter 2010
- GAAP EPS from continuing operations of
$1.06, compared to $0.29 in the year-ago quarter
- Non-GAAP** EPS from continuing
operations*** of $0.54, an increase of 64 percent from the year-ago
quarter
(In millions, except earnings per share)
Q1 2011
Q1 2010 Change Total sales
$1,884 $1,740 8% GAAP operating earnings
$170 $120 42% Non-GAAP operating
earnings
$267 $175 53% GAAP EPS from
continuing operations***
$1.06 $0.29
266% Non-GAAP EPS from continuing operations***
$0.54
$0.33 64%
Click here for printable press release and financial tables.
Motorola Solutions, Inc. (NYSE: MSI) announced today its
first-quarter 2011 results highlighted by sales of $1.9 billion, up
8 percent from the first quarter of 2010 and driven by solid demand
across both its Government and Enterprise segments.
“Motorola Solutions had an outstanding first quarter with
revenue growth in all four of our geographic regions,” said Greg
Brown, president and CEO, Motorola Solutions. “We maintained our
focus on solid earnings and cash generation as our government and
enterprise customers continued to seek solutions that drive
improved efficiency and strong return on investment.”
GAAP operating earnings in the first quarter of 2011 were $170
million or 9 percent of sales, compared to $120 million or 7
percent of sales in the first quarter of 2010. GAAP earnings per
share from continuing operations were $1.06, compared to $0.29 in
the first quarter of 2010.
Non-GAAP operating earnings in the first quarter of 2011 were
$267 million or 14 percent of sales, compared to $175 million or 10
percent of sales in the first quarter of 2010. Non-GAAP earnings
per share from continuing operations were $0.54, compared to $0.33
in the first quarter of 2010. Non-GAAP financial information
excludes after-tax benefits of approximately $0.52 per diluted
share related to stock-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 first quarter of 2011, the company generated $231
million in operating cash flow from continuing operations and $191
million in operating cash flow from discontinued operations. We
ended the quarter with total cash of $6.2 billion and net cash****
of $3.5 billion.
Government segment sales were $1.2 billion, up 5 percent
from the year-ago quarter. GAAP operating earnings were $104
million or 9 percent of sales compared to $92 million or 8 percent
of sales in the year-ago quarter. Non-GAAP operating earnings were
$139 million or 12 percent of sales compared to $98 million or 9
percent of sales in the year-ago quarter.
Government highlights:
- Secured multi-million dollar contracts
with Airwave in the United Kingdom; Fondo de Vigilancia y Seguridad
in Colombia; Guarda Civil Metropolitana in Sao Paulo, Brazil;
Cortland County in New York; Johnson County in Kansas; Berks County
in Pennsylvania; and Brown County in Wisconsin
- Announced with Verizon Wireless a
first-of-its-kind solution that combines a private public
safety-controlled broadband network tailored for mission-critical
operations with the benefits of a leading commercial network
- Began shipping APX7000XE Extreme P25
two-way radios for extreme environments with enhanced controls and
increased noise suppression. Additionally, validated the strength
of APX 7000XE product design with prestigious Red Dot Award, an
internationally recognized quality label for excellent design that
emphasizes the importance of design in business
Enterprise segment sales were $695 million, up 14 percent
from the year-ago quarter. GAAP operating earnings were $66 million
or 9 percent of sales compared to $28 million or 5 percent of sales
in the year-ago quarter. Non-GAAP operating earnings were $128
million or 18 percent of sales compared to $77 million or 13
percent of sales in the year-ago quarter.
Enterprise highlights:
- Continued strong growth across all
regions, and particularly in Europe with major contracts such as
transportation and logistics wins with General Logistics Systems in
Germany and Correos in Spain
- Reported results of annual retail
survey, in which 55 percent of retailers cited shoppers are better
connected to information than store associates, emphasizing the
need for technology solutions that deliver real-time information in
store settings
- Recognized by RFID Journal as
best-known brand in radio-frequency identification (RFID)
Networks Financial Results
First-quarter net earnings from discontinued operations were
$132 million. Discontinued operations substantially relate to the
portion of the company’s Networks business expected to be acquired
by Nokia Siemens Networks on April 29, 2011.
Second-Quarter 2011 Outlook
The company expects to see growth across both government and
enterprise segments. Second-quarter sales are expected to grow
between 4 and 5 percent over the second quarter of 2010 with EPS
from continuing operations of $0.46 to $0.51. This outlook excludes
the portion of the Networks business expected to be acquired by
Nokia Siemens Networks as well as stock-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. The company now expects full-year
revenue growth to track toward 4 to 4.5 percent with operating
earnings of 16 to 16.5 percent of sales.
Consolidated GAAP Results
A comparison of results from operations is as follows:
First Quarter (In millions,
except per share amounts)
2011 2010 Net
sales $1,884 $1,740 Gross margin 942 853 Operating earnings
170 120 Earnings from continuing operations*** 365 97 Net earnings
*** 497 69 Diluted earnings per common share from continuing
operations: *** $1.06 $0.29 Weighted average diluted common
shares outstanding 344.2 334.5
Highlighted Items, Stock-Based Compensation Expense and
Intangible Assets Amortization Expense
The table below includes highlighted items, stock-based
compensation expense and intangible assets amortization expense for
the first quarter of 2011.
(per diluted common share)
First Quarter2011
GAAP Earnings per Common Share $1.06
Highlighted Items: Reduction in deferred tax valuation
allowance (0.71) Reorganization of business charges 0.02
Total Highlighted Items (0.69) Stock-based
compensation expense 0.08 Intangible assets amortization expense
0.09
Stock-Based Compensation Expense and Intangible
Assets Amortization Expense 0.17
Total Non-GAAP Adjustments (0.52)
Non-GAAP Earnings per Common Share $0.54
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 Thursday, April 28. 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.
Stock-based compensation expense: The company has excluded
stock-based compensation expense from its non-GAAP operating
expenses and net income measurements. Although stock-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 stock-based
compensation expense primarily because it represents a significant
non-cash expense. Stock-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,
statements about the timing and financial impact of the launch of
new products, the impact of the separation of Motorola, Inc. into
two independent, public companies, and Motorola Solutions’
financial outlook for the second quarter of 2011. Motorola
Solutions cautions the reader that the risk factors below, as well
as those on pages 12 through 25 in Item 1A of Motorola Solutions,
Inc.'s 2010 Annual Report on Form 10-K, and in its other SEC
filings available for free on the SEC’s website at
http://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) possible negative effects on the company's
business operations, financial performance or assets as a result of
the separation into two independent, publicly traded companies,
which may include: (i) diminished purchasing leverage and increased
exposure to market fluctuations as a result of being a smaller,
more focused company, (ii) ongoing obligations relating to certain
debt and pension liabilities and certain corporate litigation
matters retained by Motorola Solutions after the separation, (iii)
the increased percentage of cash and cash equivalents retained by
Motorola Solutions after the separation being held outside of the
U.S., and (iv) the ownership of certain logos, trademarks, trade
names and service marks including “MOTOROLA” by Motorola Mobility
Holdings, Inc.; (2) the economic outlook for the government and
enterprise communications industries; (3) the level of demand for
the company's products, particularly if businesses and governments
defer purchases in response to tighter credit; (4) the company's
ability to introduce new products and technologies in a timely
manner; (5) unexpected negative consequences from the company's
restructuring and cost reduction activities; (6) negative impact on
the company's business from global economic conditions, which may
include: (i) the inability of customers to obtain financing for
purchases of the company's products; (ii) the viability of the
company's suppliers that may no longer have access to necessary
financing; (iii) changes in the value of investments held by the
company's pension plan and other defined benefit plans; (iv) fair
and/or actual value of the company's debt and equity investments
differing significantly from the fair values currently assigned to
them; (v) counterparty failures negatively impacting the company's
financial position; and (vi) difficulties or increased costs for
the company in obtaining financing; (7) the company's ability to
purchase sufficient materials, parts and components to meet
customer demand, particularly in light of global economic
conditions and recent events in Japan; (8) risks related to
dependence on certain key suppliers; (9) the impact on the
company's performance and financial results from strategic
acquisitions or divestitures, including those that may occur in the
future; (10) risks related to the company's manufacturing and
business operations in foreign countries; (11) the creditworthiness
of the company's customers and distributors, particularly
purchasers of large infrastructure systems; (12) risks related to
the fact that certain customers require that the company build, own
and operate their systems, often over a multi-year period; (13)
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; (14)
unexpected liabilities or expenses, including unfavorable outcomes
to any pending or future litigation or regulatory or similar
proceedings; (15) 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; (16) the
impact of changes in governmental policies, laws or regulations;
(17) the outcome of currently ongoing and future tax matters; and
(18) negative consequences from the company's outsourcing of
various activities, including certain manufacturing, information
technology and administrative functions. 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
* Total cash = Cash and cash equivalents + Sigma Fund
(current and non-current) and short-term investments
** Non-GAAP earnings per share excludes from GAAP earnings per
share the effects of stock-based compensation expense, intangible
assets amortization expense and highlighted items
*** Amounts attributable to Motorola Solutions, Inc. common
stockholders
**** Net cash = Total cash - Total debt (Notes payable and
current portion of long-term debt + Long-term debt)
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.
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. ©2011 Motorola Solutions, Inc.
All rights reserved.
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (In
millions, except per share amounts)
Three Months Ended April 2, 2011 April 3, 2010
Net sales from products $ 1,424 $ 1,291 Net sales from services
460 449 Net sales 1,884 1,740
Costs of products sales 656 594 Costs of services sales 286
293 Costs of sales 942 887 Gross
margin 942 853 Selling, general
and administrative expenses 468 454 Research and development
expenditures 249 258 Other charges (income) 5 (30 ) Intangibles
amortization 50 51 Operating earnings
170 120 Other income (expense):
Interest expense, net (20 ) (33 ) Gain on sales of investments and
businesses, net 18 7 Other 5 15 Total
other income (expense) 3 (11 ) Earnings from
continuing operations before income taxes 173 109 Income tax
expense (benefit) (186 ) 13 Earnings from
continuing operations 359 96 Earnings (loss) from
discontinued operations, net of tax 132 (28 )
Net earnings 491 68 Less: Loss attributable to
noncontrolling interests (6 ) (1 ) Net earnings
attributable to Motorola Solutions, Inc. $ 497 $ 69
Amounts attributable to Motorola Solutions, Inc. common
stockholders Earnings from continuing operations, net of tax $ 365
$ 97 Earnings (loss) from discontinued operations, net of tax
132 (28 ) Net earnings $ 497 $ 69
Earnings (loss) per
common share
Basic: Continuing operations $ 1.08 $ 0.29 Discontinued operations
0.39 (0.08 ) $ 1.47 $ 0.21
Diluted: Continuing operations $ 1.06 $ 0.29 Discontinued
operations 0.38 (0.08 ) $ 1.44 $ 0.21
Weighted average
common shares outstanding
Basic 337.4 330.8 Diluted 344.2 334.5
Percentage of Net Sales* Net
sales from products 75.6 % 74.2 % Net sales from services
24.4 % 25.8 % Net sales 100 % 100 %
Costs of products sales 46.1 % 46.0 % Costs of services sales
62.2 % 65.3 % Costs of sales 50.0 %
51.0 % Gross margin 50.0 % 49.0 %
Selling, general and administrative expenses 24.8 % 26.1 %
Research and development expenditures 13.2 % 14.8 % Other charges
(income) 0.3 % -1.7 % Intangibles amortization 2.7 %
2.9 % Operating earnings 9.0 % 6.9 % Other
income (expense): Interest expense, net -1.1 % -1.9 % Gain on sales
of investments and businesses, net 1.0 % 0.4 % Other 0.3 %
0.9 % Total other income (expense) 0.2 % -0.6
% Earnings from continuing operations before income taxes 9.2 % 6.3
% Income tax expense (benefit) -9.9 % 0.7 % Earnings
from continuing operations 19.1 % 5.5 % Earnings (loss) from
discontinued operations, net of tax 7.0 % -1.6 % Net
earnings 26.1 % 3.9 % Less: Loss attributable to
noncontrolling interests -0.3 % -0.1 % Net earnings
attributable to Motorola Solutions, Inc. 26.4 % 4.0 %
* Percentages may not add up due to rounding
Motorola Solutions, Inc. and Subsidiaries Condensed
Consolidated Balance Sheets (In millions)
April 2, December 31, 2011 2010 Assets
Cash and cash equivalents $ 2,764 $ 4,208 Sigma Fund and short-term
investments 3,455 4,655 Accounts receivable, net 1,406 1,547
Inventories, net 521 521 Deferred income taxes 911 871 Other
current assets 751 748 Current assets held for disposition
1,053 4,604 Total current assets 10,861 17,154
Property, plant and equipment, net 915 922 Sigma Fund 29 70
Investments 166 172 Deferred income taxes 1,984 1,920 Goodwill
1,429 1,429 Other assets 720 734 Non-current assets held for
disposition 456 3,176
Total assets $
16,560 $ 25,577 Liabilities and
Stockholders' Equity Notes payable and current portion of long-term
debt $ 605 $ 605 Accounts payable 560 731 Accrued liabilities 2,793
2,574 Current liabilities held for disposition 946
4,800 Total current liabilities 4,904 8,710
Long-term debt 2,093 2,098 Other liabilities 3,011 3,045
Non-current liabilities held for disposition 146 737 Total
Motorola Solutions, Inc. stockholders' equity 6,310
10,885 Noncontrolling interests 96 102
Total liabilities and stockholders' equity $
16,560 $ 25,577 Financial
Ratios: Total cash* $ 6,248 $ 8,933 Net cash** 3,550 6,230
*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
Motorola Solutions, Inc. and
Subsidiaries Condensed Consolidated Statements of Cash
Flows (In millions) Three Months
Ended April 2, 2011 April 3, 2010
Operating Net earnings attributable to Motorola Solutions,
Inc. $ 497 $ 69 Loss attributable to the noncontrolling interest
(6 ) (1 ) Net earnings 491 68 Earnings (loss) from
discontinued operations, net of tax 132 (28 )
Earnings from continuing operations 359 96 Adjustments to reconcile
earnings from continuing operations to net cash provided by
operating activities: Depreciation and amortization 91 87 Non-cash
other charges (8 ) (32 ) Share-based compensation expense 39 33
Gain on sales of investments and businesses, net (18 ) (7 )
Deferred income taxes, including change in valuation allowance (114
) 18 Changes in assets and liabilities, net of effects of
acquisitions and dispositions: Accounts receivable 175 195
Inventories (10 ) (15 ) Other current assets (13 ) (70 ) Accounts
payable and accrued liabilities (221 ) (197 ) Other assets and
liabilities (49 ) (49 )
Net cash provided by operating
activities
231 59
Investing Acquisitions
and investments, net - (3 ) Proceeds from sales of investments and
businesses, net 52 18 Capital expenditures (27 ) (37 ) Proceeds
from sales of property, plant and equipment 1 27 Proceeds from
sales (purchases) of Sigma Fund investments, net 1,241 (116 )
Purchases of short-term investments, net - (4
) Net cash provided by (used for) investing activities 1,267
(115 )
Financing Repayment of short-term
borrowings, net - (4 ) Repayment of debt - (1 ) Distribution of
Motorola Mobility (3,200 ) - Issuance of common stock 70 63
Distribution from discontinued operations 211
398 Net cash provided by (used for) financing activities
(2,919 ) 456
Discontinued Operations
Net cash provided by operating activities from discontinued
operations 191 424 Net cash used for investing activities from
discontinued operations (6 ) (49 ) Net cash used for financing
activities from discontinued operations (211 ) (398 ) Effect
of exchange rate changes on cash and cash equivalents from
discontinued operations 26 23 Net cash
provided by (used for) financing activities from discontinued
operations - - Effect of
exchange rate changes on cash and cash equivalents (23 )
(81 ) Net increase (decrease) in cash and cash equivalents
(1,444 ) 319 Cash and cash equivalents, beginning of period
4,208 2,869 Cash and cash equivalents, end of
period $ 2,764 $ 3,188
Financial
Ratios: Free cash flow* $ 204 $ 22 *Free cash flow = Net
cash provided by operating activities - Capital expenditures
Motorola Solutions, Inc. and Subsidiaries
Segment Information (In millions) Summarized
below are the Company's Net sales and Operating earnings by
reportable segment for the three months ended April 2, 2011 and
April 3, 2010.
Net
Sales
Three Months EndedApril 2,
2011
Three Months EndedApril 3,
2010
% Change from2010
Government $ 1,189 $ 1,132 5 % Enterprise 695
608 14 % Company Totals $ 1,884 $ 1,740 8 %
Operating Earnings
Three Months EndedApril 2,
2011
Three Months EndedApril 3,
2010
% Change from2010
Government $ 104 $ 92 13 % Enterprise 66 28
136 % Company Totals $ 170 $ 120 42 %
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Adjustments Bridge (In millions, except per
share amounts)
Three Months Ended Three Months
Ended April 2, 2011 April 3, 2010
GAAP Results
Non-GAAPAdjustments
andDiscontinuedOperations
Non-GAAP Results
GAAP Results
Non-GAAPAdjustments
andDiscontinuedOperations
Non-GAAP Results
Net sales $ 1,884 $ - $
1,884 $ 1,740 $ - $ 1,740 Costs of sales 942 6
936 887 5
882 Gross margin 942 (6 ) 948
853 (5 ) 858
Selling, general and administrative expenses 468 29 439 454 19 435
Research and development expenditures 249 7 242 258 10 248 Other
charges (income) 5 5 - (30 ) (30 ) - Intangibles amortization
50 50 - 51
51 - Operating earnings 170
(97 ) 267 120 (55
) 175 Other income (expense): Interest
expense, net (20 ) - (20 ) (33 ) - (33 ) Gain on sales of
investments and businesses, net 18 - 18 7 - 7 Other 5
- 5 15 -
15 Total other income (expense) 3
- 3 (11 ) -
(11 ) Earnings from continuing operations before income taxes 173
(97 ) 270 109 (55 ) 164 Income tax expense (benefit) (186 )
(277 ) 91 13 (40 )
53 Earnings from continuing operations 359 180 179 96 (15 )
111 Earnings (loss) from discontinued operations, net of tax
132 132 - (28 )
(28 ) - Net earnings 491 312 179 68 (43 ) 111
Less: Earnings attributable to noncontrolling interests
(6 ) - (6 ) (1 ) -
(1 ) Net earnings attributable to Motorola Solutions, Inc. $
497 $ 312 $ 185 $ 69 $ (43 ) $ 112
Amounts attributable to Motorola Solutions, Inc.
common stockholders Earnings from continuing operations, net of tax
$ 365 $ 180 $ 185 $ 97 $ (15 ) $ 112 Earnings (loss) from
discontinued operations, net of tax 132 132
- (28 ) (28 ) -
Net earnings
$ 497 $ 312 $ 185 $ 69 $ (43 ) $ 112
Earnings (loss) per
common share
Basic: Continuing operations $ 1.08 $ 0.53 $ 0.55 $ 0.29 $ (0.05 )
$ 0.34 Discontinued operations 0.39 0.39
- (0.08 ) (0.08 ) -
$ 1.47 $ 0.92 $ 0.55 $ 0.21 $
(0.13 ) $ 0.34 Diluted: Continuing operations $ 1.06
$ 0.52 $ 0.54 $ 0.29 $ (0.04 ) $ 0.33 Discontinued operations
0.38 0.38 - (0.08
) (0.08 ) - $ 1.44 $ 0.90 $ 0.54
$ 0.21 $ (0.13 ) $ 0.33
Weighted average
common shares outstanding
Basic 337.4 337.4 337.4 330.8 330.8 330.8 Diluted 344.2
344.2 344.2 334.5
334.5 334.5
Percentage
of Net Sales* Net sales 100
% 100 % 100 % 100 % Costs of sales 50.0 % 49.7 %
51.0 % 50.7 % Gross margin 50.0 % 50.3
% 49.0 % 49.3 % Selling, general and
administrative expenses 24.8 % 23.3 % 26.1 % 25.0 % Research and
development expenditures 13.2 % 12.8 % 14.8 % 14.3 % Other charges
(income) 0.3 % 0.0 % -1.7 % 0.0 % Intangibles amortization
2.7 % 0.0 % 2.9 % 0.0 % Operating earnings
9.0 % 14.2 % 6.9 % 10.1 % Other
income (expense): Interest expense, net -1.1 % -1.1 % -1.9 % -1.9 %
Gain on sales of investments and businesses, net 1.0 % 1.0 % 0.4 %
0.4 % Other 0.3 % 0.3 % 0.9 % 0.9 %
Total other income (expense) 0.2 % 0.2 % -0.6
% -0.6 % Earnings from continuing operations before income
taxes 9.2 % 14.3 % 6.3 % 9.4 % Income tax expense (benefit)
-9.9 % 4.8 % 0.7 % 3.0 % Earnings from
continuing operations 19.1 % 9.5 % 5.5 % 6.4 % Earnings
(loss) from discontinued operations, net of tax 7.0 %
0.0 % -1.6 % 0.0 % Net earnings 26.1 % 9.5 % 3.9 %
6.4 % Less: Earnings attributable to noncontrolling
interests -0.3 % -0.3 % -0.1 % -0.1 %
Net earnings attributable to Motorola Solutions, Inc. 26.4 %
9.8 % 4.0 % 6.4 % * Percentages may not
add up due to rounding
Motorola
Solutions, Inc. and Subsidiaries Operating Earnings after
Non-GAAP Adjustments
Q1 2011
TOTAL Government
Enterprise Net sales $ 1,884 $ 1,189 $ 695 Operating
earnings $ 170 $ 104 $ 66
Above-OE non-GAAP adjustments by P&L statement line:
Statement
Line
Reorganization of business charges Cost of sales 3 3 - Stock-based
compensation expense Cost of sales 3 2 1 Stock-based compensation
expense SG&A and R&D 36 24 12 Reorganization of business
charges Other charges (income) 5 5 - Intangibles amortization
expense Intangibles amortization 50 1
49 Less: Total above-OE non-GAAP adjustments 97 35 62
Operating earnings
after non-GAAP adjustments $ 267 $ 139
$ 128 Operating earnings as a
percentage of net sales - GAAP 9.0 % 8.7 % 9.5 % Operating earnings
as a percentage of net sales - after non-GAAP adjustments
14.2 % 11.7 % 18.4 %
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Adjustments (Intangibles Amortization Expense,
Stock-Based Compensation Expense and Highlighted Items)
Q1 2011 Highlighted Items Statement
Line
PBT(Inc)/Exp
TaxInc/(Exp)
PAT(Inc)/Exp
EPS impact Intangibles amortization expense
Intangibles amortization $ 50 $ 18 $ 32 $ 0.09 Stock-based
compensation expense Cost of sales, SG&A and R&D 39 11 28 $
0.08 Reorganization of business charges Cost of sales and Other
charges (income) 8 4 4 $ 0.02 Reduction in deferred tax valuation
allowance Income tax benefit - 244 (244 ) $ (0.71 )
- Total continuing operations impact $ 97 $
277 $ (180 ) $ (0.52 )
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