Exhibit 99.1
Motorola Solutions Reports First-Quarter 2013
Financial Results
| • | | Sales up 1 percent driven by 3 percent growth in Government |
| • | | GAAP earnings per share (EPS) from continuing operations* up 36 percent from a year ago |
| • | | Non-GAAP** EPS from continuing operations up 12 percent from a year ago |
| • | | Repurchased $357 million of shares in the quarter |
| | | | | | | | | | | | |
| | First Quarter | |
| | 2013 | | | 2012 | | | Change | |
Total sales ($M) | | $ | 1,973 | | | $ | 1,956 | | | | 1 | % |
GAAP operating earnings ($M) | | $ | 216 | | | $ | 232 | | | | -7 | % |
Non-GAAP operating earnings ($M) | | $ | 278 | | | $ | 290 | | | | -4 | % |
GAAP EPS from continuing operations | | $ | 0.68 | | | $ | 0.50 | | | | 36 | % |
Non-GAAP EPS from continuing operations | | $ | 0.66 | | | $ | 0.59 | | | | 12 | % |
Click here for printable press release and financial tables.
SCHAUMBURG, III.– April 24, 2013 –Motorola Solutions, Inc. (NYSE: MSI) announced today first-quarter 2013 sales of $2 billion, up 1 percent from the first quarter of 2012. Government sales were up 3 percent while Enterprise sales were down 4 percent.
“Despite a challenging enterprise market and modest revenue growth in the first quarter, our disciplined focus on cost management and return of capital to shareholders delivered double-digit growth in earnings per share,” said Greg Brown, chairman and CEO of Motorola Solutions. “We remain confident in the fundamental drivers of the business and our ability to drive improved operating earnings for the year.”
GAAP operating earnings in the first quarter of 2013 were $216 million or 10.9 percent of sales, compared to $232 million or 11.9 percent of sales in the first quarter of 2012. GAAP earnings per share from continuing operations were $0.68, compared to $0.50 in the first quarter of 2012.
Non-GAAP operating earnings in the first quarter of 2013 were $278 million or 14.1 percent of sales, compared to $290 million or 14.8 percent of sales in the first quarter of 2012. Non-GAAP earnings per share from continuing operations were $0.66, compared to $0.59 in the first quarter of 2012. Non-GAAP financial information excludes after-tax net loss of approximately $0.02 per diluted share related to stock-based compensation, intangible amortization 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 quarter, the company used $31 million in operating cash flow from continuing operations. The company ended the quarter with total cash*** of $3.7 billion while returning $429 million to shareholders through share repurchases and cash dividends.
Government segment sales were $1.3 billion, up 3 percent from the year-ago quarter. GAAP operating earnings were $180 million or 13.4 percent of sales compared to $150 million or 11.5 percent of sales in the year-ago quarter. Non-GAAP operating earnings were $217 million or 16.1 percent of sales compared to $184 million or 14.1 percent of sales in the year-ago quarter.
Government highlights:
| • | | Secured multimillion-dollar contracts with strategic customers such as Las Vegas Metropolitan Police Department; State of Tennessee; Wyandotte County in Kansas; Butler County in Ohio; Houston Airport; SIBUR in Russia; Medellín Metro in Colombia; Colombia Ministry of Defense; Queensland Gas Company in Australia; Macau Light Rail, Chengdu Government Radio Network and Shangdong Provincial Police in China; and Klang Valley Mass Rail Transit System in Malaysia |
| • | | Introduced Real-Time Crime Center solution, incorporating input from multiple data sources such as video, sensors, alarms, computer-aided dispatch and records to deliver one operational view and help public safety stay one step ahead of criminals through proactive policing |
| • | | Launched the new MTP6750 handheld, the world´s first TETRA radio with a 5 megapixel camera that embeds a special encrypted marking to validate metadata and ensure images have not been tampered with before presentation in court |
| • | | Introduced AME 2000 Secure Mobile Solution based on Motorola’s Assured Mobile Environment, providing end-to-end encrypted voice and data communications through private or public wireless networks to support the missions of federal agencies |
Enterprise segment sales were $627 million, down 4 percent from the year-ago quarter. Excluding Psion, sales were down 12 percent. GAAP operating earnings were $36 million or 5.7 percent of sales compared to $82 million or 12.5 percent of sales in the year-ago quarter. Non-GAAP operating earnings were $61 million or 9.7 percent of sales compared to $106 million or 16.2 percent of sales in the year-ago quarter.
Enterprise highlights:
| • | | Secured contracts with key customers such as Tesco in the U.K., Macy’s, District of Carpenters, OnTrac shipping, Universal Hospital Services, Sligro food wholesaler in the Netherlands, GEPP bottling in Mexico, and Federation of Coffee Growers of Colombia |
| • | | Launched MC45 mobile computer, the company’s first WAN-based solution that addresses the needs of field-based mobile workers in cost-sensitive enterprises |
| • | | Introduced the company’s first-ever bioptic scanner, the MP6000 multi-plane scanner embedded in point-of-sale terminals for retailers |
| • | | Honored with prestigious Red Dot Product Design Awards for MC40 mobile computer and HC1 headset computer for excellence in product design quality |
Second-Quarter Outlook
Motorola Solutions’ outlook for the second quarter of 2013 is for revenues that are flat to down 2 percent compared with the second quarter of 2012 and Non-GAAP earnings per share from continuing operations of $0.66 to $0.71 per share. For the full-year 2013, the company now expects revenue growth of approximately 3 to 4 percent compared with 2012 and Non-GAAP operating margins of approximately 18 percent of sales. This outlook excludes stock-based compensation, intangible amortization and charges associated with items typically highlighted by the company in its quarterly earnings releases.
Consolidated GAAP Results
A comparison of results from operations is as follows:
| | | | | | | | |
| | First Quarter | |
| | 2013 | | | 2012 | |
Net sales ($M) | | $ | 1,973 | | | $ | 1,956 | |
Gross margin ($M) | | | 955 | | | | 973 | |
Operating earnings ($M) | | | 216 | | �� | | 232 | |
Earnings from continuing operations ($M) | | | 192 | | | | 159 | |
Net earnings ($M) | | | 192 | | | | 157 | |
| | |
Diluted EPS from continuing operations | | $ | 0.68 | | | $ | 0.50 | |
| | |
Weighted average diluted common shares outstanding | | | 280.7 | | | | 317.7 | |
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 2013.
| | | | |
| | First Quarter | |
(per diluted common share) | | 2013 | |
GAAP Earnings per Common Share from Continuing Operations* | | $ | 0.68 | |
| |
Highlighted Items: | | | | |
Reorganization of business charges | | | 0.03 | |
Tax benefit for prior period R&D tax credit | | | (0.04 | ) |
Reduction in deferred tax asset valuation allowance | | | (0.04 | ) |
Reduction in deferred tax liability for undistributed earnings | | | (0.09 | ) |
Total Highlighted Items | | | (0.14 | ) |
| |
Stock-based compensation expense | | | 0.11 | |
Intangible assets amortization expense | | | 0.01 | |
Stock-Based Compensation Expense and Intangible Assets Amortization Expense | | | 0.12 | |
| |
Total Non-GAAP Adjustments | | | (0.02 | ) |
| |
Non-GAAP Earnings per Common Share | | $ | 0.66 | |
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, April 24. The conference call will be webcast live with audio and slides atwww.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, Motorola Solutions’ financial outlook for the second quarter and the full year of 2013, 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 8 through 19 in Item 1A of Motorola Solutions, Inc.‘s 2012 Annual Report on Form 10-K and in its other SEC filings available for free on the SEC’s website atwww.sec.gov and on Motorola Solutions’ website atwww.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, including sequestration in the United States, 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, 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; (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 Psion and 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 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 business operations, 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 stock-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 solutions 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, visitwww.motorolasolutions.com. For ongoing news, please visit ourmedia center or subscribe to ournews 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, 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. ©2013 Motorola Solutions, Inc. All rights reserved.
Exhibit 99.1A
| | | | | | | | |
| | | | | | | GAAP-1 | |
|
Motorola Solutions, Inc. and Subsidiaries | |
Condensed Consolidated Statements of Operations | |
(In millions, except per share amounts) | |
| |
| | Three Months Ended | |
| | March 30, 2013 | | | March 31, 2012 | |
Net sales from products | | $ | 1,381 | | | $ | 1,444 | |
Net sales from services | | | 592 | | | | 512 | |
| | | | | | | | |
Net sales | | | 1,973 | | | | 1,956 | |
Costs of products sales | | | 651 | | | | 658 | |
Costs of services sales | | | 367 | | | | 325 | |
| | | | | | | | |
Costs of sales | | | 1,018 | | | | 983 | |
| | | | | | | | |
Gross margin | | | 955 | | | | 973 | |
| | | | | | | | |
Selling, general and administrative expenses | | | 460 | | | | 472 | |
Research and development expenditures | | | 262 | | | | 254 | |
Other charges | | | 11 | | | | 9 | |
Intangibles amortization | | | 6 | | | | 6 | |
| | | | | | | | |
Operating earnings | | | 216 | | | | 232 | |
| | | | | | | | |
Other income (expense): | | | | | | | | |
Interest expense, net | | | (25 | ) | | | (14 | ) |
Gain on sales of investments and businesses, net | | | 7 | | | | 17 | |
Other | | | 7 | | | | 9 | |
| | | | | | | | |
Total other income (expense) | | | (11 | ) | | | 12 | |
| | | | | | | | |
Earnings from continuing operations before income taxes | | | 205 | | | | 244 | |
Income tax expense | | | 13 | | | | 85 | |
| | | | | | | | |
Earnings from continuing operations | | | 192 | | | | 159 | |
Loss from discontinued operations, net of tax | | | — | | | | (2 | ) |
| | | | | | | | |
Net earnings attributable to Motorola Solutions, Inc. | | $ | 192 | | | $ | 157 | |
| | | | | | | | |
Earnings (loss) per common share | | | | | | | | |
Basic: | | | | | | | | |
Continuing operations | | $ | 0.70 | | | $ | 0.51 | |
Discontinued operations | | | — | | | | (0.01 | ) |
| | | | | | | | |
| | $ | 0.70 | | | $ | 0.50 | |
| | | | | | | | |
Diluted: | | | | | | | | |
Continuing operations | | $ | 0.68 | | | $ | 0.50 | |
Discontinued operations | | | — | | | | (0.01 | ) |
| | | | | | | | |
| | $ | 0.68 | | | $ | 0.49 | |
| | | | | | | | |
Weighted average common shares outstanding | | | | | | | | |
Basic | | | 274.5 | | | | 311.3 | |
Diluted | | | 280.7 | | | | 317.7 | |
| |
| | Percentage of Net Sales* | |
Net sales from products | | | 70.0 | % | | | 73.8 | % |
Net sales from services | | | 30.0 | % | | | 26.2 | % |
| | | | | | | | |
Net sales | | | 100 | % | | | 100 | % |
| | | | | | | | |
Costs of products sales | | | 47.1 | % | | | 45.6 | % |
Costs of services sales | | | 62.0 | % | | | 63.5 | % |
| | | | | | | | |
Costs of sales | | | 51.6 | % | | | 50.3 | % |
| | | | | | | | |
Gross margin | | | 48.4 | % | | | 49.7 | % |
| | | | | | | | |
Selling, general and administrative expenses | | | 23.3 | % | | | 24.1 | % |
Research and development expenditures | | | 13.3 | % | | | 13.0 | % |
Other charges | | | 0.6 | % | | | 0.5 | % |
Intangibles amortization | | | 0.3 | % | | | 0.3 | % |
| | | | | | | | |
Operating earnings | | | 10.9 | % | | | 11.9 | % |
| | | | | | | | |
Other income (expense): | | | | | | | | |
Interest expense, net | | | -1.3 | % | | | -0.7 | % |
Gain on sales of investments and businesses, net | | | 0.4 | % | | | 0.9 | % |
Other | | | 0.4 | % | | | 0.5 | % |
| | | | | | | | |
Total other income (expense) | | | -0.6 | % | | | 0.6 | % |
| | | | | | | | |
Earnings from continuing operations before income taxes | | | 10.4 | % | | | 12.5 | % |
Income tax expense | | | 0.7 | % | | | 4.3 | % |
| | | | | | | | |
Earnings from continuing operations | | | 9.7 | % | | | 8.1 | % |
Loss from discontinued operations, net of tax | | | 0.0 | % | | | -0.1 | % |
| | | | | | | | |
Net earnings attributable to Motorola Solutions, Inc. | | | 9.7 | % | | | 8.0 | % |
| | | | | | | | |
* | Percentages may not add up due to rounding |
| | | | | | | | |
| | | | | | | GAAP-2 | |
|
Motorola Solutions, Inc. and Subsidiaries | |
Condensed Consolidated Balance Sheets | |
(In millions) | |
| | |
| | March 30, | | | December 31, | |
| | 2013 | | | 2012 | |
Assets | | | | | | | | |
Cash and cash equivalents | | $ | 1,470 | | | $ | 1,468 | |
Sigma Fund and short-term investments | | | 2,248 | | | | 2,135 | |
Accounts receivable, net | | | 1,644 | | | | 1,881 | |
Inventories, net | | | 515 | | | | 513 | |
Deferred income taxes | | | 621 | | | | 604 | |
Other current assets | | | 868 | | | | 800 | |
| | | | | | | | |
Total current assets | | | 7,366 | | | | 7,401 | |
| | | | | | | | |
Property, plant and equipment, net | | | 825 | | | | 839 | |
Investments | | | 148 | | | | 144 | |
Deferred income taxes | | | 2,422 | | | | 2,416 | |
Goodwill | | | 1,505 | | | | 1,510 | |
Other assets | | | 331 | | | | 369 | |
| | | | | | | | |
Total assets | | $ | 12,597 | | | $ | 12,679 | |
| | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | |
Current portion of long-term debt | | $ | 4 | | | $ | 4 | |
Accounts payable | | | 593 | | | | 705 | |
Accrued liabilities | | | 2,292 | | | | 2,626 | |
| | | | | | | | |
Total current liabilities | | | 2,889 | | | | 3,335 | |
| | | | | | | | |
Long-term debt | | | 2,450 | | | | 1,859 | |
Other liabilities | | | 4,136 | | | | 4,195 | |
Total Motorola Solutions, Inc. stockholders’ equity | | | 3,097 | | | | 3,265 | |
| | | | | | | | |
Noncontrolling interests | | | 25 | | | | 25 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 12,597 | | | $ | 12,679 | |
| | | | | | | | |
Total cash* | | $ | 3,718 | | | $ | 3,603 | |
Net cash** | | | 1,264 | | | | 1,740 | |
* | 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-3 | |
|
Motorola Solutions, Inc. and Subsidiaries | |
Condensed Consolidated Statements of Cash Flows | |
(In millions) | |
| |
| | Three Months Ended | |
| | March 30, 2013 | | | March 31, 2012 | |
Operating | | | | | | | | |
Net earnings attributable to Motorola Solutions, Inc. | | $ | 192 | | | $ | 157 | |
Loss from discontinued operations, net of tax | | | — | | | | (2 | ) |
| | | | | | | | |
Earnings from continuing operations | | | 192 | | | | 159 | |
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities: | | | | | | | | |
Depreciation and amortization | | | 52 | | | | 53 | |
Non-cash other expense (income) | | | (1 | ) | | | 1 | |
Share-based compensation expense | | | 45 | | | | 43 | |
Gain on sales of investments and businesses, net | | | (7 | ) | | | (17 | ) |
Deferred income taxes | | | (11 | ) | | | 27 | |
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | | | | | | | | |
Accounts receivable | | | 200 | | | | 141 | |
Inventories | | | (5 | ) | | | 9 | |
Other current assets | | | (75 | ) | | | (100 | ) |
Accounts payable and accrued liabilities | | | (417 | ) | | | (249 | ) |
Other assets and liabilities | | | (4 | ) | | | 2 | |
| | | | | | | | |
Net cash provided by (used for) operating activities from continuing operations | | | (31 | ) | | | 69 | |
| | | | | | | | |
Investing | | | | | | | | |
Acquisitions and investments, net | | | (4 | ) | | | 92 | |
Proceeds from (used for) sales of investments and businesses, net | | | 19 | | | | (54 | ) |
Capital expenditures | | | (46 | ) | | | (49 | ) |
Proceeds from sales of (purchases of) Sigma Fund and short term investments, net | | | (113 | ) | | | 1,163 | |
| | | | | | | | |
Net cash provided by (used for) investing activities from continuing operations | | | (144 | ) | | | 1,152 | |
| | | | | | | | |
Financing | | | | | | | | |
Net proceeds from issuance of debt | | | 593 | | | | — | |
Repayment of debt | | | (1 | ) | | | (1 | ) |
Issuance of common stock | | | 40 | | | | 30 | |
Purchase of common stock | | | (357 | ) | | | (1,365 | ) |
Excess tax benefits from share-based compensation | | | 9 | | | | 6 | |
Payment of dividends | | | (72 | ) | | | (70 | ) |
Distribution to discontinued operations | | | — | | | | (11 | ) |
| | | | | | | | |
Net cash provided by (used for) financing activities from continuing operations | | | 212 | | | | (1,411 | ) |
| | | | | | | | |
Discontinued Operations | | | | | | | | |
Net cash provided by operating activities from discontinued operations | | | — | | | | 2 | |
Net cash provided by from discontinued operations | | | — | | | | 11 | |
Effect of exchange rate changes on cash and cash equivalents from discontinued operations | | | — | | | | (13 | ) |
| | | | | | | | |
Net cash provided by (used for) financing activities from discontinued operations | | | — | | | | — | |
| | | | | | | | |
Effect of exchange rate changes on cash and cash equivalents from continuing operations | | | (35 | ) | | | 29 | |
| | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | | 2 | | | | (161 | ) |
Cash and cash equivalents, beginning of period | | | 1,468 | | | | 1,881 | |
| | | | | | | | |
Cash and cash equivalents, end of period | | $ | 1,470 | | | $ | 1,720 | |
| | | | | | | | |
Financial Ratios: | | | | | | | | |
Free cash flow* | | $ | (77 | ) | | $ | 20 | |
* | Free cash flow = Net cash provided by operating activities - Capital expenditures |
| | | | | | | | | | | | |
| | | | | | | | | | | GAAP-4 | |
|
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 months ended March 30, 2013 and March 31, 2012. | |
|
Net Sales | |
| | |
| | Three Months Ended | | | | |
| | March 30, 2013 | | | March 31, 2012 | | | % Change | |
Government | | $ | 1,346 | | | $ | 1,301 | | | | 3 | % |
Enterprise | | | 627 | | | | 655 | | | | -4 | % |
| | | | | | | | | | | | |
Company Total | | $ | 1,973 | | | $ | 1,956 | | | | 1 | % |
| | | | | | | | | | | | |
|
Operating Earnings | |
| | |
| | Three Months Ended | | | | |
| | March 30, 2013 | | | March 31, 2012 | | | % Change | |
Government | | $ | 180 | | | $ | 150 | | | | 20 | % |
Enterprise | | | 36 | | | | 82 | | | | -56 | % |
| | | | | | | | | | | | |
Company Total | | $ | 216 | | | $ | 232 | | | | -7 | % |
| | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | Non-GAAP-1 | |
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Motorola Solutions, Inc. and Subsidiaries | |
Non-GAAP Adjustments (Intangibles Amortization Expense, Stock-Based Compensation Expense and Highlighted Items) | |
|
Q1 2013 | |
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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 | | | 45 | | | | 14 | | | | 31 | | | | 0.11 | |
Reorganization of business charges | | Cost of sales and Other charges (income) | | | 11 | | | | 3 | | | | 8 | | | | 0.03 | |
Tax benefit for prior period R&D tax credit | | Income tax expense | | | | | | | 12 | | | | (12 | ) | | | (0.04 | ) |
Reduction in deferred tax asset valuation allowance | | Income tax expense | | | | | | | 11 | | | | (11 | ) | | | (0.04 | ) |
Reduction in deferred tax liability for undistributed earnings | | Income tax expense | | | | | | | 25 | | | | (25 | ) | | | (0.09 | ) |
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Total continuing operations impact | | | | $ | 62 | | | $ | 67 | | | $ | (5 | ) | | $ | (0.02 | ) |
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| | | | | | | | | | | Non-GAAP-2 | |
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Motorola Solutions, Inc. and Subsidiaries | |
Non-GAAP Segment Information | |
(In millions) | |
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Net Sales | |
| | |
| | Three Months Ended | | | | |
| | March 30, 2013 | | | March 31, 2012 | | | % Change | |
Government | | $ | 1,346 | | | $ | 1,301 | | | | 3 | % |
Enterprise | | | 627 | | | | 655 | | | | -4 | % |
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Company Total | | $ | 1,973 | | | $ | 1,956 | | | | 1 | % |
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Non-GAAP Operating Earnings | |
| | |
| | Three Months Ended | | | | |
| | March 30, 2013 | | | March 31, 2012 | | | % Change | |
Government | | $ | 217 | | | $ | 184 | | | | 18 | % |
Enterprise | | | 61 | | | | 106 | | | | -42 | % |
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Company Total | | $ | 278 | | | $ | 290 | | | | -4 | % |
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Non-GAAP Operating Earnings % | |
| | |
| | Three Months Ended | | | | |
| | March 30, 2013 | | | March 31, 2012 | | | % Change | |
Government | | | 16.1 | % | | | 14.1 | % | | | 14 | % |
Enterprise | | | 9.7 | % | | | 16.2 | % | | | -40 | % |
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Company Total | | | 14.1 | % | | | 14.8 | % | | | -5 | % |
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| | | | | | | | | | | Non-GAAP-3 | |
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Motorola Solutions, Inc. and Subsidiaries | |
Operating Earnings after Non-GAAP Adjustments | |
|
Q1 2013 | |
| | | |
| | TOTAL | | | Government | | | Enterprise | |
Net sales | | $ | 1,973 | | | $ | 1,346 | | | $ | 627 | |
Operating earnings | | $ | 216 | | | $ | 180 | | | $ | 36 | |
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Above-OE non-GAAP adjustments: | | | | | | | | | | | | |
Stock-based compensation expense | | | 45 | | | | 30 | | | | 15 | |
Reorganization of business charges | | | 11 | | | | 7 | | | | 4 | |
Intangibles amortization expense | | | 6 | | | | 0 | | | | 6 | |
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Total above-OE non-GAAP adjustments | | | 62 | | | | 37 | | | | 25 | |
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Operating earnings after non-GAAP adjustments | | $ | 278 | | | $ | 217 | | | $ | 61 | |
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Operating earnings as a percentage of net sales - GAAP | | | 10.9 | % | | | 13.4 | % | | | 5.7 | % |
Operating earnings as a percentage of net sales - after non-GAAP adjustments | | | 14.1 | % | | | 16.1 | % | | | 9.7 | % |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-GAAP-4 | |
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Motorola Solutions, Inc. and Subsidiaries | |
Regional Revenue Information | |
(In millions) | |
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The Company restructured its regions operationally to improve the delivery of its products and services, by realigning the net sales for the Middle East. Accordingly, the Company now reports net sales into the following four geographic regions: North America; Latin America; Europe and Africa (“EA”); and Asia Pacific and Middle East (“APME”). The Company has updated all periods presented to reflect this change in presentation. | |
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The Company’s regional net sales under the new regional alignment and as previously reported were as follows: | |
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| | Revised regional sales | |
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| | FY | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | FY | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | FY | |
| | 2010 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
NA | | | 4,422 | | | | 1,028 | | | | 1,145 | | | | 1,183 | | | | 1,300 | | | | 4,656 | | | | 1,124 | | | | 1,258 | | | | 1,286 | | | | 1,415 | | | | 5,083 | |
LA | | | 663 | | | | 195 | | | | 164 | | | | 186 | | | | 188 | | | | 733 | | | | 185 | | | | 180 | | | | 169 | | | | 180 | | | | 714 | |
EA | | | 1,491 | | | | 366 | | | | 389 | | | | 417 | | | | 491 | | | | 1,663 | | | | 366 | | | | 398 | | | | 394 | | | | 505 | | | | 1,663 | |
APME | | | 1,041 | | | | 245 | | | | 286 | | | | 299 | | | | 321 | | | | 1,151 | | | | 281 | | | | 312 | | | | 304 | | | | 341 | | | | 1,238 | |
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| | $ | 7,617 | | | $ | 1,834 | | | $ | 1,984 | | | $ | 2,085 | | | $ | 2,300 | | | $ | 8,203 | | | $ | 1,956 | | | $ | 2,148 | | | $ | 2,153 | | | $ | 2,441 | | | $ | 8,698 | |
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| |
| | Regional sales as previously reported | |
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| | FY | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | FY | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | FY | |
| | 2010 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
NA | | | 4,422 | | | | 1,028 | | | | 1,145 | | | | 1,183 | | | | 1,300 | | | | 4,656 | | | | 1,124 | | | | 1,258 | | | | 1,286 | | | | 1,415 | | | | 5,083 | |
LA | | | 663 | | | | 195 | | | | 164 | | | | 186 | | | | 188 | | | | 733 | | | | 185 | | | | 180 | | | | 169 | | | | 180 | | | | 714 | |
EMEA | | | 1,617 | | | | 392 | | | | 407 | | | | 444 | | | | 527 | | | | 1,770 | | | | 397 | | | | 428 | | | | 430 | | | | 546 | | | | 1,801 | |
APAC | | | 915 | | | | 219 | | | | 268 | | | | 272 | | | | 285 | | | | 1,044 | | | | 250 | | | | 282 | | | | 268 | | | | 300 | | | | 1,100 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 7,617 | | | $ | 1,834 | | | $ | 1,984 | | | $ | 2,085 | | | $ | 2,300 | | | $ | 8,203 | | | $ | 1,956 | | | $ | 2,148 | | | $ | 2,153 | | | $ | 2,441 | | | $ | 8,698 | |
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