Date of report (Date of earliest event reported): November 2, 2017 | ||
Motorola Solutions, Inc. | ||
(Exact Name of Registrant as Specified in Charter) | ||
DELAWARE | ||
(State or Other Jurisdiction of Incorporation) | ||
1-7221 | 36-1115800 | |
(Commission File Number) | (IRS Employer Identification No.) | |
500 W. Monroe Street Chicago, Illinois | 60661 | |
(Address of Principal Executive Offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (847) 576-5000 | ||
_____________________________ | ||
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description |
Press Release by Motorola Solutions, Inc. dated November 2, 2017 announcing financial results for the quarter ended September 30, 2017. |
MOTOROLA SOLUTIONS, INC. (Registrant) | ||||
Dated: November 2, 2017 | By: | /s/ John K. Wozniak | ||
Name: | John K. Wozniak | |||
Title: | Corporate Vice President and Chief Accounting Officer |
Exhibit No. | Description |
99.1 | Press Release by Motorola Solutions, Inc. dated November 2, 2017 announcing financial results for the quarter ended September 30, 2017. |
• | Sales of $1.6 billion, up 7 percent from a year ago |
• | Organic revenue1 growth of 5 percent; North America organic growth of 5 percent |
• | Record backlog of $8.9 billion, up $768 million, or 9 percent |
• | GAAP earnings per share (EPS) of $1.25, up 11 percent |
• | Non-GAAP EPS 2 of $1.53, up 12 percent |
• | Increasing quarterly dividend by 11 percent |
Q3 2017 | Q3 2016 | % Change | ||||
Sales | $1,645 | $1,532 | 7 | % | ||
GAAP | ||||||
Operating Earnings | $338 | $341 | (1 | )% | ||
% of Sales | 20.5 | % | 22.3 | % | ||
EPS | $1.25 | $1.13 | 11 | % | ||
Non-GAAP | ||||||
Operating Earnings | $423 | $396 | 7 | % | ||
% of Sales | 25.7 | % | 25.8 | % | ||
EPS | $1.53 | $1.37 | 12 | % | ||
Product Segment | ||||||
Sales | $989 | $920 | 8 | % | ||
GAAP Operating Earnings | $253 | $225 | 12 | % | ||
% of Sales | 25.6 | % | 24.5 | % | ||
Non-GAAP Operating Earnings | $287 | $243 | 18 | % | ||
% of Sales | 29.0 | % | 26.4 | % | ||
Services Segment | ||||||
Sales | $656 | $612 | 7 | % | ||
GAAP Operating Earnings | $85 | $116 | (27 | )% | ||
% of Sales | 13.0 | % | 19.0 | % | ||
Non-GAAP Operating Earnings | $136 | $153 | (11 | )% | ||
% of Sales | 20.7 | % | 25.0 | % |
• | Revenue – Sales increased 7 percent overall from the year-ago quarter and grew 5 percent organically driven by the Americas region. Products segment sales grew 8 percent driven by the Americas and Europe, Middle East & Africa (EMEA) regions. The Services segment grew 7 percent driven by the Americas, with global Managed & Support Services growth of 8 percent. |
• | Operating margin – GAAP operating margin was 20.5 percent of sales, compared with 22.3 percent in the year-ago quarter. The decline reflects higher costs related to non-US pension settlement losses and intangible amortization expenses. Non-GAAP operating margin was 25.7 percent of sales, compared with 25.8 percent in the year-ago quarter. |
• | Cash flow – The company generated $270 million in operating cash, a decrease of $78 million from the year-ago quarter. Free cash flow3 was $185 million, down $95 million. Cash flow for the quarter was down due to higher working capital and higher capital expenses associated with implementation of a new enterprise resource planning (ERP) system, and higher tax payments. |
• | Capital Allocation – The company repurchased approximately $100 million of its common stock and paid approximately $76 million in cash dividends. Additionally, the company paid $205 million in cash associated with the acquisition of Kodiak Networks. |
• | Backlog – The company ended the quarter with record backlog of $8.9 billion, up $768 million from the year-ago quarter. Products segment backlog was up 24 percent or $344 million, and Services was up 6 percent or $424 million. LMR demand led by the Americas continues to drive the backlog growth. |
• | $79 million for a P25 system serving three counties in Oregon |
• | $54 million for a P25 system in Memphis, Tenn. |
• | $26 million for a 10-year Managed & Support Services contract for the City of Phoenix |
• | $24 million for a P25 system in Burlington, N.J. |
• | $10 million for a radio system expansion in Ecuador |
• | Introduced the PSX Application Suite providing push-to-talk, messaging and mapping applications designed specifically for public safety LTE users |
• | Completed the acquisition of Kodiak Networks |
• | Announced the LXN 500 ultra-portable standalone LTE network that can provide coverage and public safety applications in remote locations during emergencies |
• | Fourth-quarter 2017 - Motorola Solutions expects revenue growth of approximately 3 percent compared with the fourth quarter of 2016. The company expects non-GAAP earnings in the range of $2.00 to $2.05 per share. |
• | Full-year 2017 - The company now expects revenue growth of approximately 5 percent versus the prior outlook of approximately 3 to 4 percent, and non-GAAP earnings per share now in the range of $5.35 to $5.40 versus the prior outlook of $5.20 to $5.30. This assumes current foreign exchange rates and approximately 169 million fully diluted shares. |
Q3 2017 | Q3 2016 | |||
Net sales | $1,645 | $1,532 | ||
Gross margin | 794 | 762 | ||
Operating earnings | 338 | 341 | ||
Amounts attributable to Motorola Solutions, Inc. common stockholders | ||||
Net earnings | 212 | 192 | ||
Diluted EPS | $1.25 | $1.13 | ||
Weighted average diluted common shares outstanding | 169.0 | 169.6 |
(per diluted common share) | Q3 2017 | |
GAAP Earnings | $1.25 | |
Highlighted Items: | ||
Share-based compensation expense | 0.07 | |
Reorganization of business charges | 0.04 | |
Intangibles amortization expense | 0.17 | |
Non-US pension settlement loss | 0.11 | |
Asset impairment | 0.01 | |
Tax benefit on U.S. capital loss | (0.13 | ) |
Reserve on unrecognized tax benefit | 0.01 | |
Total Highlighted Items | $0.28 | |
Non-GAAP Diluted EPS | $1.53 |
Three Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Net sales from products | $ | 989 | $ | 920 | |||
Net sales from services | 656 | 612 | |||||
Net sales | 1,645 | 1,532 | |||||
Costs of products sales | 428 | 398 | |||||
Costs of services sales | 423 | 372 | |||||
Costs of sales | 851 | 770 | |||||
Gross margin | 794 | 762 | |||||
Selling, general and administrative expenses | 248 | 247 | |||||
Research and development expenditures | 141 | 137 | |||||
Other charges | 28 | 6 | |||||
Intangibles amortization | 39 | 31 | |||||
Operating earnings | 338 | 341 | |||||
Other income (expense): | |||||||
Interest expense, net | (52 | ) | (54 | ) | |||
Gains on sales of investments and businesses, net | — | 7 | |||||
Other | — | (1 | ) | ||||
Total other expense | (52 | ) | (48 | ) | |||
Net earnings before income taxes | 286 | 293 | |||||
Income tax expense | 73 | 100 | |||||
Net earnings | 213 | 193 | |||||
Less: Earnings attributable to noncontrolling interests | 1 | 1 | |||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 212 | $ | 192 | |||
Earnings per common share: | |||||||
Basic | $ | 1.30 | $ | 1.15 | |||
Diluted | $ | 1.25 | $ | 1.13 | |||
Weighted average common shares outstanding: | |||||||
Basic | 162.3 | 166.3 | |||||
Diluted | 169.0 | 169.6 |
Percentage of Net Sales* | |||||
Net sales from products | 60.1 | % | 60.1 | % | |
Net sales from services | 39.9 | % | 39.9 | % | |
Net sales | 100.0 | % | 100.0 | % | |
Costs of products sales | 43.3 | % | 43.3 | % | |
Costs of services sales | 64.5 | % | 60.8 | % | |
Costs of sales | 51.7 | % | 50.3 | % | |
Gross margin | 48.3 | % | 49.7 | % | |
Selling, general and administrative expenses | 15.1 | % | 16.1 | % | |
Research and development expenditures | 8.6 | % | 8.9 | % | |
Other charges | 1.7 | % | 0.4 | % | |
Intangibles amortization | 2.4 | % | 2.0 | % | |
Operating earnings | 20.5 | % | 22.3 | % | |
Other income (expense): | |||||
Interest expense, net | (3.2 | )% | (3.5 | )% | |
Gains on sales of investments and businesses, net | — | % | 0.5 | % | |
Other | — | % | (0.1 | )% | |
Total other expense | (3.2 | )% | (3.1 | )% | |
Net earnings before income taxes | 17.4 | % | 19.1 | % | |
Income tax expense | 4.4 | % | 6.5 | % | |
Net earnings | 12.9 | % | 12.6 | % | |
Less: Earnings attributable to noncontrolling interests | 0.1 | % | 0.1 | % | |
Net earnings attributable to Motorola Solutions, Inc. | 12.9 | % | 12.5 | % | |
* Percentages may not add up due to rounding |
Nine Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Net sales from products | $ | 2,540 | $ | 2,423 | |||
Net sales from services | 1,883 | 1,732 | |||||
Net sales | 4,423 | 4,155 | |||||
Costs of products sales | 1,167 | 1,124 | |||||
Costs of services sales | 1,202 | 1,090 | |||||
Costs of sales | 2,369 | 2,214 | |||||
Gross margin | 2,054 | 1,941 | |||||
Selling, general and administrative expenses | 725 | 722 | |||||
Research and development expenditures | 413 | 411 | |||||
Other charges | 34 | 61 | |||||
Intangibles amortization | 112 | 83 | |||||
Operating earnings | 770 | 664 | |||||
Other income (expense): | |||||||
Interest expense, net | (154 | ) | (157 | ) | |||
Gains (losses) on sales of investments and businesses, net | 3 | (13 | ) | ||||
Other | (9 | ) | (12 | ) | |||
Total other expense | (160 | ) | (182 | ) | |||
Net earnings before income taxes | 610 | 482 | |||||
Income tax expense | 188 | 164 | |||||
Net earnings | 422 | 318 | |||||
Less: Earnings attributable to noncontrolling interests | 2 | 1 | |||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 420 | $ | 317 | |||
Earnings per common share: | |||||||
Basic | $ | 2.57 | $ | 1.85 | |||
Diluted | $ | 2.48 | $ | 1.82 | |||
Weighted average common shares outstanding: | |||||||
Basic | 163.2 | 171.0 | |||||
Diluted | 169.3 | 174.0 |
Percentage of Net Sales* | |||||
Net sales from products | 57.4 | % | 58.3 | % | |
Net sales from services | 42.6 | % | 41.7 | % | |
Net sales | 100.0 | % | 100.0 | % | |
Costs of products sales | 45.9 | % | 46.4 | % | |
Costs of services sales | 63.8 | % | 62.9 | % | |
Costs of sales | 53.6 | % | 53.3 | % | |
Gross margin | 46.4 | % | 46.7 | % | |
Selling, general and administrative expenses | 16.4 | % | 17.4 | % | |
Research and development expenditures | 9.3 | % | 9.9 | % | |
Other charges | 0.8 | % | 1.5 | % | |
Intangibles amortization | 2.5 | % | 2.0 | % | |
Operating earnings | 17.4 | % | 16.0 | % | |
Other income (expense): | |||||
Interest expense, net | (3.5 | )% | (3.8 | )% | |
Gains (losses) on sales of investments and businesses, net | 0.1 | % | (0.3 | )% | |
Other | (0.2 | )% | (0.3 | )% | |
Total other expense | (3.6 | )% | (4.4 | )% | |
Net earnings before income taxes | 13.8 | % | 11.6 | % | |
Income tax expense | 4.3 | % | 3.9 | % | |
Net earnings | 9.5 | % | 7.7 | % | |
Less: Earnings attributable to noncontrolling interests | — | % | — | % | |
Net earnings attributable to Motorola Solutions, Inc. | 9.5 | % | 7.6 | % | |
* Percentages may not add up due to rounding |
September 30, 2017 | December 31, 2016 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 653 | $ | 967 | ||||
Restricted cash | 64 | 63 | ||||||
Total cash and cash equivalents | 717 | 1,030 | ||||||
Accounts receivable, net | 1,382 | 1,410 | ||||||
Inventories, net | 364 | 273 | ||||||
Other current assets | 873 | 755 | ||||||
Total current assets | 3,336 | 3,468 | ||||||
Property, plant and equipment, net | 889 | 789 | ||||||
Investments | 249 | 238 | ||||||
Deferred income taxes | 2,115 | 2,219 | ||||||
Goodwill | 932 | 728 | ||||||
Intangible assets | 896 | 821 | ||||||
Other assets | 201 | 200 | ||||||
Total assets | $ | 8,618 | $ | 8,463 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current portion of long-term debt | $ | 47 | $ | 4 | ||||
Accounts payable | 473 | 553 | ||||||
Accrued liabilities | 2,043 | 2,111 | ||||||
Total current liabilities | 2,563 | 2,668 | ||||||
Long-term debt | 4,423 | 4,392 | ||||||
Other liabilities | 2,450 | 2,355 | ||||||
Total Motorola Solutions, Inc. stockholders’ equity (deficit) | (830 | ) | (964 | ) | ||||
Noncontrolling interests | 12 | 12 | ||||||
Total liabilities and stockholders’ equity | $ | 8,618 | $ | 8,463 | ||||
Financial Ratios: | ||||||||
Net cash (debt)* | $ | (3,753 | ) | $ | (3,366 | ) | ||
*Net cash (debt) = Total cash - Current portion of long-term debt - Long-term debt |
Three Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Operating | |||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 212 | $ | 192 | |||
Earnings attributable to noncontrolling interests | 1 | 1 | |||||
Net earnings | 213 | 193 | |||||
Adjustments to reconcile Net earnings to Net cash provided by operating activities: | |||||||
Depreciation and amortization | 88 | 76 | |||||
Non-cash other charges | 8 | 8 | |||||
Non-U.S. pension settlement loss | 21 | — | |||||
Share-based compensation expense | 16 | 16 | |||||
Gains on sales of investments and businesses, net | — | (7 | ) | ||||
Deferred income taxes | 36 | 72 | |||||
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | |||||||
Accounts receivable | (152 | ) | (82 | ) | |||
Inventories | 29 | 2 | |||||
Other current assets | (129 | ) | (37 | ) | |||
Accounts payable and accrued liabilities | 152 | 138 | |||||
Other assets and liabilities | (12 | ) | (31 | ) | |||
Net cash provided by operating activities | 270 | 348 | |||||
Investing | |||||||
Acquisitions and investments, net | (243 | ) | (95 | ) | |||
Proceeds from sales of investments and businesses, net | 102 | 84 | |||||
Capital expenditures | (85 | ) | (68 | ) | |||
Proceeds from sales of property, plant and equipment | — | 22 | |||||
Net cash used for investing activities | (226 | ) | (57 | ) | |||
Financing | |||||||
Repayment of debt | (9 | ) | (1 | ) | |||
Issuance of common stock | 33 | 41 | |||||
Purchase of common stock | (100 | ) | (109 | ) | |||
Payment of dividends | (76 | ) | (70 | ) | |||
Net cash used for financing activities | (152 | ) | (139 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 20 | (10 | ) | ||||
Net increase (decrease) in cash and cash equivalents | (88 | ) | 142 | ||||
Cash and cash equivalents, beginning of period | 805 | 1,545 | |||||
Cash and cash equivalents, end of period | $ | 717 | $ | 1,687 | |||
Financial Ratios: | |||||||
Free cash flow* | $ | 185 | $ | 280 | |||
*Free cash flow = Net cash provided by operating activities - Capital Expenditures |
Nine Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Operating | |||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 420 | $ | 317 | |||
Earnings attributable to noncontrolling interests | 2 | 1 | |||||
Net earnings | 422 | 318 | |||||
Adjustments to reconcile Net earnings to Net cash provided by operating activities: | |||||||
Depreciation and amortization | 254 | 220 | |||||
Non-cash other charges | 29 | 43 | |||||
Non-U.S. pension settlement loss | 46 | — | |||||
Share-based compensation expense | 49 | 52 | |||||
Losses (gains) on sales of investments and businesses, net | (3 | ) | 13 | ||||
Deferred income taxes | 99 | 143 | |||||
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | |||||||
Accounts receivable | 81 | 245 | |||||
Inventories | (83 | ) | — | ||||
Other current assets | (142 | ) | (102 | ) | |||
Accounts payable and accrued liabilities | (178 | ) | (224 | ) | |||
Other assets and liabilities | 11 | (56 | ) | ||||
Net cash provided by operating activities | 585 | 652 | |||||
Investing | |||||||
Acquisitions and investments, net | (383 | ) | (1,215 | ) | |||
Proceeds from sales of investments and businesses, net | 174 | 637 | |||||
Capital expenditures | (206 | ) | (211 | ) | |||
Proceeds from sales of property, plant and equipment | — | 68 | |||||
Net cash used for investing activities | (415 | ) | (721 | ) | |||
Financing | |||||||
Repayment of debt | (15 | ) | (3 | ) | |||
Net proceeds from issuance of debt | — | 673 | |||||
Proceeds from financing through capital leases | 7 | — | |||||
Issuance of common stock | 61 | 80 | |||||
Purchase of common stock | (358 | ) | (728 | ) | |||
Payment of dividends | (230 | ) | (213 | ) | |||
Payment of dividend to non-controlling interest | (2 | ) | — | ||||
Net cash used for financing activities | (537 | ) | (191 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 54 | (33 | ) | ||||
Net decrease in cash and cash equivalents | (313 | ) | (293 | ) | |||
Cash and cash equivalents, beginning of period | 1,030 | 1,980 | |||||
Cash and cash equivalents, end of period | $ | 717 | $ | 1,687 | |||
Financial Ratios: | |||||||
Free cash flow* | $ | 379 | $ | 441 | |||
*Free cash flow = Net cash provided by operating activities - Capital Expenditures |
Net Sales | ||||||||||
Three Months Ended | ||||||||||
September 30, 2017 | October 1, 2016 | % Change | ||||||||
Products | $ | 989 | $ | 920 | 8 | % | ||||
Services | 656 | 612 | 7 | % | ||||||
Total Motorola Solutions | $ | 1,645 | $ | 1,532 | 7 | % | ||||
Nine Months Ended | ||||||||||
September 30, 2017 | October 1, 2016 | % Change | ||||||||
Products | $ | 2,540 | $ | 2,423 | 5 | % | ||||
Services | 1,883 | 1,732 | 9 | % | ||||||
Total Motorola Solutions | $ | 4,423 | $ | 4,155 | 6 | % | ||||
Operating Earnings | ||||||||||
Three Months Ended | ||||||||||
September 30, 2017 | October 1, 2016 | % Change | ||||||||
Products | $ | 253 | $ | 225 | 12 | % | ||||
Services | 85 | 116 | (27 | )% | ||||||
Total Motorola Solutions | $ | 338 | $ | 341 | (1 | )% | ||||
Nine Months Ended | ||||||||||
September 30, 2017 | October 1, 2016 | % Change | ||||||||
Products | $ | 510 | $ | 404 | 26 | % | ||||
Services | 260 | 260 | — | % | ||||||
Total Motorola Solutions | $ | 770 | $ | 664 | 16 | % | ||||
Operating Earnings % | |||||||
Three Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Products | 25.6 | % | 24.5 | % | |||
Services | 13.0 | % | 19.0 | % | |||
Total Motorola Solutions | 20.5 | % | 22.3 | % | |||
Nine Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Products | 20.1 | % | 16.7 | % | |||
Services | 13.8 | % | 15.0 | % | |||
Total Motorola Solutions | 17.4 | % | 16.0 | % | |||
Q1 2017 | ||||||||||||||||||
Non-GAAP Adjustments | Statement Line | PBT (Inc)/Exp | Tax Inc/(Exp) | PAT (Inc)/Exp | EPS impact | |||||||||||||
Share-based compensation expense | Cost of sales, SG&A and R&D | $ | 17 | $ | 6 | $ | 11 | $ | 0.06 | |||||||||
Reorganization of business charges | Cost of sales and Other charges | 19 | 4 | 15 | 0.09 | |||||||||||||
Intangibles amortization expense | Intangibles amortization | 36 | 9 | 27 | 0.16 | |||||||||||||
Gain on legal settlement | Other charges | (42 | ) | (16 | ) | (26 | ) | (0.15 | ) | |||||||||
Building impairment | Other charges | 8 | — | 8 | 0.05 | |||||||||||||
Non-US pension settlement loss | Other charges | 9 | — | 9 | 0.05 | |||||||||||||
Sale of investments | Sale of Investment or Business (Gain) or Loss | (3 | ) | (1 | ) | (2 | ) | (0.01 | ) | |||||||||
Acquisition-related transaction fees | Other charges | 1 | — | 1 | 0.01 | |||||||||||||
Total impact on Net earnings | $ | 45 | $ | 2 | $ | 43 | $ | 0.26 | ||||||||||
Q2 2017 | ||||||||||||||||||
Non-GAAP Adjustments | Statement Line | PBT (Inc)/Exp | Tax Inc/(Exp) | PAT (Inc)/Exp | EPS impact | |||||||||||||
Share-based compensation expense | Cost of sales, SG&A and R&D | $ | 16 | $ | 5 | $ | 11 | 0.07 | ||||||||||
Reorganization of business charges | Cost of sales and Other charges | 3 | — | 3 | 0.02 | |||||||||||||
Intangibles amortization expense | Intangibles amortization | 37 | 9 | 28 | 0.17 | |||||||||||||
Non-US pension settlement loss | Other charges | 16 | — | 16 | 0.08 | |||||||||||||
Gain on legal settlement | Other charges | (1 | ) | — | (1 | ) | (0.01 | ) | ||||||||||
Sale of business | Sale of Investment or Business (Gain) or Loss | 1 | — | 1 | 0.01 | |||||||||||||
Total impact on Net earnings | $ | 72 | $ | 14 | $ | 58 | $ | 0.34 | ||||||||||
Q3 2017 | ||||||||||||||||||
Non-GAAP Adjustments | Statement Line | PBT (Inc)/Exp | Tax Inc/(Exp) | PAT (Inc)/Exp | EPS impact | |||||||||||||
Share-based compensation expense | Cost of sales, SG&A and R&D | $ | 16 | $ | 5 | $ | 11 | $ | 0.07 | |||||||||
Reorganization of business charges | Cost of sales and Other charges | 8 | 2 | 6 | 0.04 | |||||||||||||
Intangibles amortization expense | Intangibles amortization | 39 | 10 | 29 | 0.17 | |||||||||||||
Non-US pension settlement loss | Other charges | 21 | — | 21 | 0.11 | |||||||||||||
Asset impairment | Other charges | 1 | — | 1 | 0.01 | |||||||||||||
Tax benefit on U.S. capital loss | Tax expense | — | 22 | (22 | ) | (0.13 | ) | |||||||||||
Reserve on unrecognized tax benefit | Tax expense | — | (1 | ) | 1 | 0.01 | ||||||||||||
Total impact on Net earnings | $ | 85 | $ | 38 | $ | 47 | $ | 0.28 | ||||||||||
Net Sales | ||||||||||
Three Months Ended | ||||||||||
September 30, 2017 | October 1, 2016 | % Change | ||||||||
Products | $ | 989 | $ | 920 | 8 | % | ||||
Services | 656 | 612 | 7 | % | ||||||
Total Motorola Solutions | $ | 1,645 | $ | 1,532 | 7 | % | ||||
Nine Months Ended | ||||||||||
September 30, 2017 | October 1, 2016 | % Change | ||||||||
Products | $ | 2,540 | $ | 2,423 | 5 | % | ||||
Services | 1,883 | 1,732 | 9 | % | ||||||
Total Motorola Solutions | $ | 4,423 | $ | 4,155 | 6 | % | ||||
Non-GAAP Operating Earnings | ||||||||||
Three Months Ended | ||||||||||
September 30, 2017 | October 1, 2016 | % Change | ||||||||
Products | $ | 287 | $ | 243 | 18 | % | ||||
Services | 136 | 153 | (11 | )% | ||||||
Total Motorola Solutions | $ | 423 | $ | 396 | 7 | % | ||||
Nine Months Ended | ||||||||||
September 30, 2017 | October 1, 2016 | % Change | ||||||||
Products | $ | 581 | $ | 503 | 16 | % | ||||
Services | 394 | 383 | 3 | % | ||||||
Total Motorola Solutions | $ | 975 | $ | 886 | 10 | % | ||||
Non-GAAP Operating Earnings % | |||||||
Three Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Products | 29.0 | % | 26.4 | % | |||
Services | 20.7 | % | 25.0 | % | |||
Total Motorola Solutions | 25.7 | % | 25.8 | % | |||
Nine Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Products | 22.9 | % | 20.8 | % | |||
Services | 20.9 | % | 22.1 | % | |||
Total Motorola Solutions | 22.0 | % | 21.3 | % |
Q1 2017 | ||||||||||||
TOTAL | Products | Services | ||||||||||
Net sales | $ | 1,281 | $ | 703 | $ | 578 | ||||||
Operating earnings ("OE") | $ | 176 | $ | 89 | $ | 87 | ||||||
Above-OE non-GAAP adjustments: | ||||||||||||
Share-based compensation expense | 17 | 11 | 6 | |||||||||
Reorganization of business charges | 19 | 13 | 6 | |||||||||
Intangibles amortization expense | 36 | 6 | 30 | |||||||||
Acquisition-related transaction fees | 1 | — | 1 | |||||||||
Gain on legal settlement | (42 | ) | (30 | ) | (12 | ) | ||||||
Building impairment | 8 | 6 | 2 | |||||||||
Non-US pension settlement loss | 9 | 6 | 3 | |||||||||
Total above-OE non-GAAP adjustments | 48 | 12 | 36 | |||||||||
Operating earnings after non-GAAP adjustments | $ | 224 | $ | 101 | $ | 123 |
Operating earnings as a percentage of net sales - GAAP | 13.7 | % | 12.7 | % | 15.1 | % | |||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 17.5 | % | 14.4 | % | 21.3 | % |
Q2 2017 | ||||||||||||
TOTAL | Products | Services | ||||||||||
Net sales | $ | 1,497 | $ | 848 | $ | 649 | ||||||
Operating earnings ("OE") | $ | 257 | $ | 168 | $ | 89 | ||||||
Above-OE non-GAAP adjustments: | ||||||||||||
Share-based compensation expense | 16 | 11 | 5 | |||||||||
Reorganization of business charges | 3 | 3 | — | |||||||||
Intangibles amortization expense | 37 | 1 | 36 | |||||||||
Gain on legal settlement | (1 | ) | (1 | ) | — | |||||||
Non-US pension settlement loss | 16 | 11 | 5 | |||||||||
Total above-OE non-GAAP adjustments | 71 | 25 | 46 | |||||||||
Operating earnings after non-GAAP adjustments | 328 | 193 | 135 |
Operating earnings as a percentage of net sales - GAAP | 17.2 | % | 19.8 | % | 13.7 | % | |||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 21.9 | % | 22.8 | % | 20.8 | % |
Q3 2017 | ||||||||||||
TOTAL | Products | Services | ||||||||||
Net sales | $ | 1,645 | $ | 989 | $ | 656 | ||||||
Operating earnings ("OE") | $ | 338 | $ | 253 | $ | 85 | ||||||
Above-OE non-GAAP adjustments: | ||||||||||||
Share-based compensation expense | 16 | 10 | 6 | |||||||||
Reorganization of business charges | 8 | 6 | 2 | |||||||||
Intangibles amortization expense | 39 | 2 | 37 | |||||||||
Non-US pension settlement loss | 21 | 15 | 6 | |||||||||
Asset impairment | 1 | 1 | — | |||||||||
Total above-OE non-GAAP adjustments | 85 | 34 | 51 | |||||||||
Operating earnings after non-GAAP adjustments | 423 | 287 | 136 |
Operating earnings as a percentage of net sales - GAAP | 20.5 | % | 25.6 | % | 13.0 | % | |||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 25.7 | % | 29.0 | % | 20.7 | % |
Total Motorola Solutions | |||||||||||
Three Months Ended | |||||||||||
September 30, 2017 | October 1, 2016 | % Change | |||||||||
Net sales | $ | 1,645 | $ | 1,532 | 7 | % | |||||
Non-GAAP adjustments: | |||||||||||
Acquisitions | (40 | ) | — | ||||||||
Organic revenue | $ | 1,605 | $ | 1,532 | 5 | % |
Nine Months Ended | |||||||||||
September 30, 2017 | October 1, 2016 | % Change | |||||||||
Net sales | $ | 4,423 | $ | 4,155 | 6 | % | |||||
Non-GAAP adjustments: | |||||||||||
Acquisitions | (213 | ) | (61 | ) | |||||||
Organic revenue | $ | 4,210 | $ | 4,094 | 3 | % |
North America | |||||||||||
Three Months Ended | |||||||||||
September 30, 2017 | October 1, 2016 | % Change | |||||||||
Americas net sales | $ | 1,123 | $ | 1,031 | 9 | % | |||||
Adjustments: | |||||||||||
Latin America | (96 | ) | (70 | ) | 37 | % | |||||
North America acquisitions | (19 | ) | — | ||||||||
North America organic revenue | $ | 1,008 | $ | 961 | 5 | % |
Nine Months Ended | |||||||||||
September 30, 2017 | October 1, 2016 | % Change | |||||||||
Americas net sales | $ | 2,989 | $ | 2,804 | 7 | % | |||||
Adjustments: | |||||||||||
Latin America | (262 | ) | (186 | ) | 41 | % | |||||
North America acquisitions | (40 | ) | — | ||||||||
North America organic revenue | $ | 2,687 | $ | 2,618 | 3 | % |