Date of report (Date of earliest event reported): August 2, 2018 | ||
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 August 2, 2018 announcing financial results for the quarter ended June 30, 2018. |
MOTOROLA SOLUTIONS, INC. (Registrant) | ||||
Dated: August 2, 2018 | 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 August 2, 2018 announcing financial results for the quarter ended June 30, 2018. |
• | Sales of $1.8 billion, up 18 percent from a year ago |
• | Organic revenue1 growth of 6 percent |
• | Backlog of $9.4 billion, up $919 million or 11 percent from a year ago |
• | GAAP earnings per share (EPS) of $1.05, up 35 percent |
• | Non-GAAP EPS* of $1.46, up 30 percent |
Q2 2018 | Q2 2017 | % Change | ||||
Sales | $1,760 | $1,497 | 18 | % | ||
GAAP | ||||||
Operating Earnings | $273 | $261 | 5 | % | ||
% of Sales | 15.5 | % | 17.4 | % | ||
EPS | $1.05 | $0.78 | 35 | % | ||
Non-GAAP | ||||||
Operating Earnings | $378 | $316 | 20 | % | ||
% of Sales | 21.5 | % | 21.1 | % | ||
EPS | $1.46 | $1.12 | 30% | |||
Products and Systems Integration Segment | ||||||
Sales | $1,189 | $1,047 | 14 | % | ||
GAAP Operating Earnings | $175 | $190 | (8 | )% | ||
% of Sales | 14.7 | % | 18.1 | % | ||
Non-GAAP Operating Earnings | $226 | $204 | 11 | % | ||
% of Sales | 19.0 | % | 19.5 | % | ||
Services and Software Segment | ||||||
Sales | $571 | $450 | 27 | % | ||
GAAP Operating Earnings | $98 | $71 | 38 | % | ||
% of Sales | 17.2 | % | 15.8 | % | ||
Non-GAAP Operating Earnings | $152 | $112 | 36 | % | ||
% of Sales | 26.6 | % | 24.9 | % |
• | Revenue - Sales increased $263 million, or 18 percent from the year-ago quarter, driven by growth in all regions. Approximately $154 million of revenue growth was related to acquisitions, and $24 million was related to the adoption of accounting standard ASC 606. The Products and Systems Integration segment grew 14 percent driven by the Americas and EMEA. The Services and Software segment grew 27 percent led by the Americas and EMEA. |
• | Operating margin - GAAP operating margin was 15.5 percent of sales, compared with 17.4 percent in the year-ago quarter. The decline reflects higher operating expenses related to acquisitions, partially offset by higher gross margins in Services, the adoption of ASC 606 and favorable mix. Non-GAAP operating margin was 21.5 percent of sales, compared with 21.1 percent in the year-ago quarter driven by higher gross margin partially offset by higher operating expenses related to acquisitions. |
• | Cash flow - Operating cash flow was $425 million, compared with $173 million of operating cash generated in the year-ago quarter. Free cash flow2 was $384 million, compared with $120 million of free cash flow generated in the year-ago quarter. Cash flow for the quarter was higher on improved working capital and higher earnings. |
• | Capital allocation - The company paid $84 million in cash dividends. From a debt perspective, the company repaid $100 million on the revolving credit facility ahead of schedule, leaving an outstanding balance of $300 million. The company also repaid the remaining $40 million revolver balance assumed in the Avigilon acquisition and closed this credit facility. |
• | Backlog - The company ended the quarter with backlog of $9.4 billion, up $919 million from the year-ago quarter. Products and Systems Integration segment backlog was up 13 percent or $367 million, and Services and Software was up 10 percent or $552 million. Land mobile radio demand led by the Americas continues to drive backlog growth. |
• | $50 million for a multi-year services agreement for a county wide P25 system in North America |
• | $41 million for command center software and 10-year services award in Asia |
• | $16 million multi-year services renewal in Chile |
• | $71 million P25 system upgrade in Northern Africa |
• | $35 million P25 expansion for New South Wales Telco Authority in Australia |
• | $15 million P25 system replacement for Flagler County, Florida |
• | $495 million five-year IDIQ (indefinite delivery, indefinite quantity) P25 radio upgrade for U.S. Army |
• | Third-quarter 2018 - Motorola Solutions expects revenue growth of approximately 13 percent compared with the third quarter of 2017. The company expects non-GAAP earnings in the range of $1.67 to $1.72 per share. This assumes 173 million fully diluted shares. |
• | Full-year 2018 - The company now expects revenue growth of approximately 14.5 percent, up from the prior outlook of 14 percent including $40 million of unfavorable currency impact since our prior guidance. The company now expects non-GAAP earnings per share in the range of $6.79 to $6.89, up from the prior guidance of $6.70 to $6.85. This assumes current foreign exchange rates, approximately 172 million fully diluted shares and a 25 percent effective tax rate. |
Q2 2018 | Q2 2017 | |||
Net sales | $1,760 | $1,497 | ||
Gross margin | 822 | 690 | ||
Operating earnings | 273 | 261 | ||
Amounts attributable to Motorola Solutions, Inc. common stockholders | ||||
Net earnings | 180 | 131 | ||
Diluted EPS | $1.05 | $0.78 | ||
Weighted average diluted common shares outstanding | 171.7 | 169.0 |
(per diluted common share) | Q2 2018 | |
GAAP Earnings | $1.05 | |
Highlighted Items: | ||
Share-based compensation expense | $0.08 | |
Reorganization of business charges | 0.10 | |
Intangibles amortization expense | 0.23 | |
Avigilon purchase accounting adjustment | 0.04 | |
Sale of investments | 0.01 | |
Loss on foreign currency related to Avigilon purchase | 0.01 | |
FIN 48 reserve | 0.01 | |
State audit settlement | (0.07 | ) |
Non-GAAP Diluted EPS | $1.46 |
Three Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Net sales from products | $ | 1,042 | $ | 848 | |||
Net sales from services | 718 | 649 | |||||
Net sales | 1,760 | 1,497 | |||||
Costs of products sales | 485 | 392 | |||||
Costs of services sales | 453 | 415 | |||||
Costs of sales | 938 | 807 | |||||
Gross margin | 822 | 690 | |||||
Selling, general and administrative expenses | 316 | 254 | |||||
Research and development expenditures | 162 | 138 | |||||
Other charges | 18 | — | |||||
Intangibles amortization | 53 | 37 | |||||
Operating earnings | 273 | 261 | |||||
Other income (expense): | |||||||
Interest expense, net | (58 | ) | (51 | ) | |||
Losses on sales of investments and businesses, net | (1 | ) | (1 | ) | |||
Other | 13 | (4 | ) | ||||
Total other expense | (46 | ) | (56 | ) | |||
Net earnings before income taxes | 227 | 205 | |||||
Income tax expense | 46 | 73 | |||||
Net earnings | 181 | 132 | |||||
Less: Earnings attributable to noncontrolling interests | 1 | 1 | |||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 180 | $ | 131 | |||
Earnings per common share: | |||||||
Basic | $ | 1.11 | $ | 0.80 | |||
Diluted | $ | 1.05 | $ | 0.78 | |||
Weighted average common shares outstanding: | |||||||
Basic | 162.2 | 163.1 | |||||
Diluted | 171.7 | 169.0 |
Percentage of Net Sales* | |||||
Net sales from products | 59.2 | % | 56.6 | % | |
Net sales from services | 40.8 | % | 43.4 | % | |
Net sales | 100.0 | % | 100.0 | % | |
Costs of products sales | 46.5 | % | 46.2 | % | |
Costs of services sales | 63.1 | % | 63.9 | % | |
Costs of sales | 53.3 | % | 53.9 | % | |
Gross margin | 46.7 | % | 46.1 | % | |
Selling, general and administrative expenses | 18.0 | % | 17.0 | % | |
Research and development expenditures | 9.2 | % | 9.2 | % | |
Other charges | 1.0 | % | — | % | |
Intangibles amortization | 3.0 | % | 2.5 | % | |
Operating earnings | 15.5 | % | 17.4 | % | |
Other income (expense): | |||||
Interest expense, net | (3.3 | )% | (3.4 | )% | |
Losses on sales of investments and businesses, net | (0.1 | )% | (0.1 | )% | |
Other | 0.7 | % | (0.3 | )% | |
Total other expense | (2.6 | )% | (3.7 | )% | |
Net earnings before income taxes | 12.9 | % | 13.7 | % | |
Income tax expense | 2.6 | % | 4.9 | % | |
Net earnings | 10.3 | % | 8.8 | % | |
Less: Earnings attributable to noncontrolling interests | 0.1 | % | 0.1 | % | |
Net earnings attributable to Motorola Solutions, Inc. | 10.2 | % | 8.8 | % | |
* Percentages may not add up due to rounding |
Six Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Net sales from products | $ | 1,842 | $ | 1,551 | |||
Net sales from services | 1,385 | 1,226 | |||||
Net sales | 3,227 | 2,777 | |||||
Costs of products sales | 867 | 739 | |||||
Costs of services sales | 869 | 778 | |||||
Costs of sales | 1,736 | 1,517 | |||||
Gross margin | 1,491 | 1,260 | |||||
Selling, general and administrative expenses | 594 | 500 | |||||
Research and development expenditures | 314 | 273 | |||||
Other charges | 44 | (19 | ) | ||||
Intangibles amortization | 94 | 73 | |||||
Operating earnings | 445 | 433 | |||||
Other income (expense): | |||||||
Interest expense, net | (104 | ) | (102 | ) | |||
Gains on sales of investments and businesses, net | 10 | 2 | |||||
Other | 16 | (9 | ) | ||||
Total other expense | (78 | ) | (109 | ) | |||
Net earnings before income taxes | 367 | 324 | |||||
Income tax expense | 69 | 114 | |||||
Net earnings | 298 | 210 | |||||
Less: Earnings attributable to noncontrolling interests | 1 | 2 | |||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 297 | $ | 208 | |||
Earnings per common share: | |||||||
Basic | $ | 1.83 | $ | 1.27 | |||
Diluted | $ | 1.73 | $ | 1.23 | |||
Weighted average common shares outstanding: | |||||||
Basic | 161.7 | 163.7 | |||||
Diluted | 171.1 | 169.5 |
Percentage of Net Sales* | |||||
Net sales from products | 57.1 | % | 55.9 | % | |
Net sales from services | 42.9 | % | 44.1 | % | |
Net sales | 100.0 | % | 100.0 | % | |
Costs of products sales | 47.1 | % | 47.6 | % | |
Costs of services sales | 62.7 | % | 63.5 | % | |
Costs of sales | 53.8 | % | 54.6 | % | |
Gross margin | 46.2 | % | 45.4 | % | |
Selling, general and administrative expenses | 18.4 | % | 18.0 | % | |
Research and development expenditures | 9.7 | % | 9.8 | % | |
Other charges | 1.4 | % | (0.7 | )% | |
Intangibles amortization | 2.9 | % | 2.6 | % | |
Operating earnings | 13.8 | % | 15.6 | % | |
Other income (expense): | |||||
Interest expense, net | (3.2 | )% | (3.7 | )% | |
Gains on sales of investments and businesses, net | 0.3 | % | 0.1 | % | |
Other | 0.5 | % | (0.3 | )% | |
Total other expense | (2.4 | )% | (3.9 | )% | |
Net earnings before income taxes | 11.4 | % | 11.7 | % | |
Income tax expense | 2.1 | % | 4.1 | % | |
Net earnings | 9.2 | % | 7.6 | % | |
Less: Earnings attributable to noncontrolling interests | — | % | 0.1 | % | |
Net earnings attributable to Motorola Solutions, Inc. | 9.2 | % | 7.5 | % | |
* Percentages may not add up due to rounding |
June 30, 2018 | December 31, 2017 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 878 | $ | 1,205 | ||||
Restricted cash | 63 | 63 | ||||||
Total cash and cash equivalents | 941 | 1,268 | ||||||
Accounts receivable, net | 1,159 | 1,523 | ||||||
Contract assets | 760 | — | ||||||
Inventories, net | 391 | 327 | ||||||
Other current assets | 330 | 832 | ||||||
Total current assets | 3,581 | 3,950 | ||||||
Property, plant and equipment, net | 895 | 856 | ||||||
Investments | 172 | 247 | ||||||
Deferred income taxes | 945 | 1,023 | ||||||
Goodwill | 1,528 | 938 | ||||||
Intangible assets | 1,340 | 861 | ||||||
Other assets | 420 | 333 | ||||||
Total assets | $ | 8,881 | $ | 8,208 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current portion of long-term debt | $ | 347 | $ | 52 | ||||
Accounts payable | 430 | 593 | ||||||
Contract liabilities | 1,049 | — | ||||||
Accrued liabilities | 1,096 | 2,286 | ||||||
Total current liabilities | 2,922 | 2,931 | ||||||
Long-term debt | 5,298 | 4,419 | ||||||
Other liabilities | 2,153 | 2,585 | ||||||
Total Motorola Solutions, Inc. stockholders’ equity (deficit) | (1,507 | ) | (1,742 | ) | ||||
Noncontrolling interests | 15 | 15 | ||||||
Total liabilities and stockholders’ equity | $ | 8,881 | $ | 8,208 | ||||
Three Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Operating | |||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 180 | $ | 131 | |||
Earnings attributable to noncontrolling interests | 1 | 1 | |||||
Net earnings | 181 | 132 | |||||
Adjustments to reconcile Net earnings to Net cash provided by (used for) operating activities: | |||||||
Depreciation and amortization | 96 | 86 | |||||
Non-cash other charges | 3 | 6 | |||||
Non-U.S. pension settlement loss | — | 16 | |||||
Share-based compensation expense | 17 | 16 | |||||
Losses on sales of investments and businesses, net | 1 | 1 | |||||
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | |||||||
Accounts receivable, contract assets and contract liabilities | 11 | (117 | ) | ||||
Inventories | 46 | (43 | ) | ||||
Other current assets | 41 | 38 | |||||
Accounts payable and accrued liabilities | 10 | (33 | ) | ||||
Other assets and liabilities | (5 | ) | 31 | ||||
Deferred income taxes | 24 | 40 | |||||
Net cash (used for) provided by operating activities | 425 | 173 | |||||
Investing | |||||||
Acquisitions and investments, net | (28 | ) | (34 | ) | |||
Proceeds from sales of investments and businesses, net | 2 | 19 | |||||
Capital expenditures | (41 | ) | (53 | ) | |||
Net cash used for investing activities | (67 | ) | (68 | ) | |||
Financing | |||||||
Repayment of debt | (147 | ) | (5 | ) | |||
Net proceeds from issuance of debt | (1 | ) | — | ||||
Proceeds from financing through capital leases | — | 7 | |||||
Issuance of common stock | 6 | 6 | |||||
Purchases of common stock | — | (80 | ) | ||||
Payments of dividends | (84 | ) | (77 | ) | |||
Payments of dividend to non-controlling interest | (1 | ) | (2 | ) | |||
Net cash used for financing activities | (227 | ) | (151 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (48 | ) | 22 | ||||
Net increase (decrease) in cash and cash equivalents | 83 | (24 | ) | ||||
Cash and cash equivalents, beginning of period | 858 | 829 | |||||
Cash and cash equivalents, end of period | $ | 941 | $ | 805 | |||
Financial Ratios: | |||||||
Free cash flow* | $ | 384 | $ | 120 | |||
*Free cash flow = Net cash provided by operating activities - Capital Expenditures |
Six Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Operating | |||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 297 | $ | 208 | |||
Earnings attributable to noncontrolling interests | 1 | 2 | |||||
Net earnings | 298 | 210 | |||||
Adjustments to reconcile Net earnings to Net cash provided by (used for) operating activities: | |||||||
Depreciation and amortization | 178 | 166 | |||||
Non-cash other charges | 6 | 21 | |||||
Non-U.S. pension settlement loss | — | 25 | |||||
Share-based compensation expense | 34 | 33 | |||||
Gains on sales of investments and businesses, net | (10 | ) | (2 | ) | |||
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | |||||||
Accounts receivable, contract assets and contract liabilities | 206 | 251 | |||||
Inventories | 37 | (112 | ) | ||||
Other current assets | 43 | (21 | ) | ||||
Accounts payable and accrued liabilities | (340 | ) | (340 | ) | |||
Other assets and liabilities | (558 | ) | 21 | ||||
Deferred income taxes | 31 | 63 | |||||
Net cash provided by (used for) operating activities | (75 | ) | 315 | ||||
Investing | |||||||
Acquisitions and investments, net | (1,153 | ) | (140 | ) | |||
Proceeds from sales of investments and businesses, net | 79 | 72 | |||||
Capital expenditures | (82 | ) | (121 | ) | |||
Net cash used for investing activities | (1,156 | ) | (189 | ) | |||
Financing | |||||||
Repayment of debt | (197 | ) | (6 | ) | |||
Net proceeds from issuance of debt | 1,295 | — | |||||
Proceeds from financing through capital leases | — | 7 | |||||
Issuance of common stock | 59 | 28 | |||||
Purchases of common stock | (66 | ) | (258 | ) | |||
Payments of dividends | (168 | ) | (154 | ) | |||
Payments of dividend to non-controlling interest | (1 | ) | (2 | ) | |||
Net cash provided by (used for) financing activities | 922 | (385 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (18 | ) | 34 | ||||
Net decrease in cash and cash equivalents | (327 | ) | (225 | ) | |||
Cash and cash equivalents, beginning of period | 1,268 | 1,030 | |||||
Cash and cash equivalents, end of period | $ | 941 | $ | 805 | |||
Financial Ratios: | |||||||
Free cash flow* | $ | (157 | ) | $ | 194 | ||
*Free cash flow = Net cash provided by operating activities - Capital Expenditures |
Net Sales | ||||||||||
Three Months Ended | ||||||||||
June 30, 2018 | July 1, 2017 | % Change | ||||||||
Products and systems integration | $ | 1,189 | $ | 1,047 | 14 | % | ||||
Services and software | 571 | 450 | 27 | % | ||||||
Total Motorola Solutions | $ | 1,760 | $ | 1,497 | 18 | % | ||||
Six Months Ended | ||||||||||
June 30, 2018 | July 1, 2017 | % Change | ||||||||
Products and systems integration | $ | 2,141 | $ | 1,901 | 13 | % | ||||
Services and software | 1,086 | 876 | 24 | % | ||||||
Total Motorola Solutions | $ | 3,227 | $ | 2,777 | 16 | % | ||||
Operating Earnings | ||||||||||
Three Months Ended | ||||||||||
June 30, 2018 | July 1, 2017 | % Change | ||||||||
Products and systems integration | $ | 175 | $ | 190 | (8 | )% | ||||
Services and software | 98 | 71 | 38 | % | ||||||
Total Motorola Solutions | $ | 273 | $ | 261 | 5 | % | ||||
Six Months Ended | ||||||||||
June 30, 2018 | July 1, 2017 | % Change | ||||||||
Products and systems integration | $ | 265 | $ | 287 | (8 | )% | ||||
Services and software | 180 | 146 | 23 | % | ||||||
Total Motorola Solutions | $ | 445 | $ | 433 | 3 | % | ||||
Operating Earnings % | |||||||
Three Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Products and systems integration | 14.7 | % | 18.1 | % | |||
Services and software | 17.2 | % | 15.8 | % | |||
Total Motorola Solutions | 15.5 | % | 17.4 | % | |||
Six Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Products and systems integration | 12.4 | % | 15.1 | % | |||
Services and software | 16.6 | % | 16.7 | % | |||
Total Motorola Solutions | 13.8 | % | 15.6 | % | |||
Q1 2018 | ||||||||||||||||||
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 | $ | 4 | $ | 13 | $ | 0.08 | |||||||||
Reorganization of business charges | Cost of sales and Other charges | 13 | 3 | 10 | 0.06 | |||||||||||||
Intangibles amortization expense | Intangibles amortization | 41 | 8 | 33 | 0.19 | |||||||||||||
Loss on legal settlements | Other charges | 1 | — | 1 | 0.01 | |||||||||||||
Loss on derivative instruments related to Avigilon | Other expense | 14 | 4 | 10 | 0.06 | |||||||||||||
Release of FIN 48 reserve | Income tax benefit | — | 1 | (1 | ) | (0.01 | ) | |||||||||||
Sale of investments | Sale of Investment or Business (Gain) or Loss | (11 | ) | (3 | ) | (8 | ) | (0.05 | ) | |||||||||
Acquisition-related transaction fees | Other charges | 17 | 5 | 12 | 0.07 | |||||||||||||
Total impact on Net earnings | $ | 92 | $ | 22 | $ | 70 | $ | 0.41 | ||||||||||
Q2 2018 | ||||||||||||||||||
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 | $ | 4 | $ | 13 | $ | 0.08 | |||||||||
Reorganization of business charges | Cost of sales and Other charges | 25 | 6 | 19 | 0.10 | |||||||||||||
Intangibles amortization expense | Intangibles amortization | 53 | 12 | 41 | 0.23 | |||||||||||||
Avigilon purchase accounting adjustment | Cost of sales | 10 | 3 | 7 | 0.04 | |||||||||||||
Sale of investments | Sale of Investment or Business (Gain) or Loss | 1 | — | 1 | 0.01 | |||||||||||||
Loss on foreign currency related to Avigilon purchase | Other expense | 1 | — | 1 | 0.01 | |||||||||||||
FIN 48 reserve | Income tax expense | — | (1 | ) | 1 | 0.01 | ||||||||||||
State audit settlement | Income tax benefit | — | 12 | (12 | ) | (0.07 | ) | |||||||||||
Total impact on Net earnings | $ | 107 | $ | 36 | $ | 71 | $ | 0.41 | ||||||||||
Net Sales | ||||||||||
Three Months Ended | ||||||||||
June 30, 2018 | July 1, 2017 | % Change | ||||||||
Products and systems integration | $ | 1,189 | $ | 1,047 | 14 | % | ||||
Services and software | 571 | 450 | 27 | % | ||||||
Total Motorola Solutions | $ | 1,760 | $ | 1,497 | 18 | % | ||||
Six Months Ended | ||||||||||
June 30, 2018 | July 1, 2017 | % Change | ||||||||
Products and systems integration | $ | 2,141 | $ | 1,901 | 13 | % | ||||
Services and software | 1,086 | 876 | 24 | % | ||||||
Total Motorola Solutions | $ | 3,227 | $ | 2,777 | 16 | % | ||||
Non-GAAP Operating Earnings | ||||||||||
Three Months Ended | ||||||||||
June 30, 2018 | July 1, 2017 | % Change | ||||||||
Products and systems integration | $ | 226 | $ | 204 | 11 | % | ||||
Services and software | 152 | 112 | 36 | % | ||||||
Total Motorola Solutions | $ | 378 | $ | 316 | 20 | % | ||||
Six Months Ended | ||||||||||
June 30, 2018 | July 1, 2017 | % Change | ||||||||
Products and systems integration | $ | 350 | $ | 306 | 14 | % | ||||
Services and software | 287 | 222 | 29 | % | ||||||
Total Motorola Solutions | $ | 637 | $ | 528 | 21 | % | ||||
Non-GAAP Operating Earnings % | |||||||
Three Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Products and systems integration | 19.0 | % | 19.5 | % | |||
Services and software | 26.6 | % | 24.9 | % | |||
Total Motorola Solutions | 21.5 | % | 21.1 | % | |||
Six Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Products and systems integration | 16.3 | % | 16.1 | % | |||
Services and software | 26.4 | % | 25.3 | % | |||
Total Motorola Solutions | 19.7 | % | 19.0 | % |
Q1 2018 | ||||||||||||
TOTAL | Products and Systems Integration | Services and Software | ||||||||||
Net sales | $ | 1,468 | $ | 952 | $ | 516 | ||||||
Operating earnings ("OE") | $ | 171 | $ | 90 | $ | 81 | ||||||
Above-OE non-GAAP adjustments: | ||||||||||||
Share-based compensation expense | 17 | 12 | 5 | |||||||||
Reorganization of business charges | 13 | 9 | 4 | |||||||||
Intangibles amortization expense | 41 | 1 | 40 | |||||||||
Acquisition-related transaction fees | 17 | 12 | 5 | |||||||||
Loss on legal settlements | 1 | 1 | — | |||||||||
Total above-OE non-GAAP adjustments | 89 | 35 | 54 | |||||||||
Operating earnings after non-GAAP adjustments | $ | 260 | $ | 125 | $ | 135 |
Operating earnings as a percentage of net sales - GAAP | 11.6 | % | 9.5 | % | 15.7 | % | |||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 17.7 | % | 13.1 | % | 26.2 | % |
Q2 2018 | ||||||||||||
TOTAL | Products and Systems Integration | Services and Software | ||||||||||
Net sales | $ | 1,760 | $ | 1,189 | $ | 571 | ||||||
Operating earnings ("OE") | $ | 273 | $ | 175 | $ | 98 | ||||||
Above-OE non-GAAP adjustments: | ||||||||||||
Share-based compensation expense | 17 | 12 | 5 | |||||||||
Reorganization of business charges | 25 | 19 | 6 | |||||||||
Intangibles amortization expense | 53 | 10 | 43 | |||||||||
Avigilon purchase accounting adjustment | 10 | 10 | — | |||||||||
Total above-OE non-GAAP adjustments | 105 | 51 | 54 | |||||||||
Operating earnings after non-GAAP adjustments | $ | 378 | $ | 226 | $ | 152 |
Operating earnings as a percentage of net sales - GAAP | 15.5 | % | 14.7 | % | 17.2 | % | |||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 21.5 | % | 19.0 | % | 26.6 | % |
Total Motorola Solutions | |||||||||||
Three Months Ended | |||||||||||
June 30, 2018 | July 1, 2017 | % Change | |||||||||
Net sales | $ | 1,760 | $ | 1,497 | 18 | % | |||||
Non-GAAP adjustments: | |||||||||||
Acquisitions | (154 | ) | — | ||||||||
ASC 606 impact | (24 | ) | — | ||||||||
Organic revenue | 1,582 | 1,497 | 6 | % | |||||||
Less foreign exchange impact | (26 | ) | — | ||||||||
Organic revenue in constant currency | $ | 1,556 | $ | 1,497 | 4 | % |
Total Motorola Solutions | |||||||||||
Six Months Ended | |||||||||||
June 30, 2018 | July 1, 2017 | % Change | |||||||||
Net sales | $ | 3,227 | $ | 2,777 | 16 | % | |||||
Non-GAAP adjustments: | |||||||||||
Acquisitions | (206 | ) | (5 | ) | |||||||
ASC 606 impact | (39 | ) | — | ||||||||
Organic revenue | 2,982 | 2,772 | 8 | % | |||||||
Less foreign exchange impact | (65 | ) | — | ||||||||
Organic revenue in constant currency | $ | 2,917 | $ | 2,772 | 5 | % |