EX-99.1 2 dex991.htm PRESS RELEASE BY MOTOROLA SOLUTIONS, INC. DATED APRIL 28, 2011 Press Release by Motorola Solutions, Inc. dated April 28, 2011

Exhibit 99.1

Motorola Solutions Reports First-Quarter Results

 

   

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

SCHAUMBURG, Ill. – April 28, 2011 – 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 Quarter
2011
 

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/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.

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. ©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 Ended
April  2, 2011
     Three Months Ended
April  3, 2010
     % Change from
2010
 

Government

   $ 1,189       $ 1,132         5

Enterprise

     695         608         14
                          

Company Totals

   $ 1,884       $ 1,740         8
                          
     Operating Earnings  
     Three Months Ended
April 2, 2011
     Three Months Ended
April 3, 2010
     % Change from
2010
 

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-GAAP
Adjustments  and
Discontinued
Operations
    Non-GAAP Results     GAAP Results     Non-GAAP
Adjustments  and
Discontinued

Operations
    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
     Tax
Inc/(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