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8-K - 8-K - Motorola Solutions, Inc.d765253d8k.htm

Exhibit 99.1

GAAP-1

Motorola Solutions, Inc. and Subsidiaries

GAAP Segment Information

(In millions)

Net Sales

 

     Q1 2014                              

Products

   $ 753               

Services

     475               
  

 

 

             

Motorola Solutions, Inc.

   $ 1,228               
  

 

 

             
     Q1 2013      Q2 2013      Q3 2013      Q4 2013      2013  

Products

   $ 914       $ 986       $ 998       $ 1,211       $ 4,109   

Services

     482         511         519         606         2,118   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Motorola Solutions, Inc.

   $ 1,396       $ 1,497       $ 1,517       $ 1,817       $ 6,227   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Q1 2012      Q2 2012      Q3 2012      Q4 2012      2012  

Products

   $ 945       $ 1,021       $ 1,069       $ 1,201       $ 4,236   

Services

     442         516         511         563         2,033   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Motorola Solutions, Inc.

   $ 1,387       $ 1,537       $ 1,580       $ 1,764       $ 6,269   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                                 2011  

Products

               $ 3,901   

Services

                 1,837   
              

 

 

 

Motorola Solutions, Inc.

               $ 5,738   
              

 

 

 

 

Operating Earnings  
     Q1 2014                              

Products

   $ 39               

Services

     68               
  

 

 

             

Motorola Solutions, Inc.

   $ 107               
  

 

 

             
     Q1 2013      Q2 2013      Q3 2013      Q4 2013      2013  

Products

   $ 106       $ 125       $ 171       $ 237       $ 639   

Services

     68         78         75         88         308   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Motorola Solutions, Inc.

   $ 174       $ 203       $ 246       $ 325       $ 947   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Q1 2012      Q2 2012      Q3 2012      Q4 2012      2012  

Products

   $ 100       $ 125       $ 190       $ 241       $ 656   

Services

     52         65         62         86         264   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Motorola Solutions, Inc.

   $ 152       $ 190       $ 252       $ 327       $ 920   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                                 2011  

Products

               $ 338   

Services

                 260   
              

 

 

 

Motorola Solutions, Inc.

               $ 598   
              

 

 

 


Non-GAAP-1

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Financial Measures

The financial data presented on the following schedules Non-GAAP-2 through Non-GAAP-5 provide reconciliations of the Company’s Non-GAAP adjustments for the full fiscal years of 2011, 2012, and 2013, the four quarters of 2012 and 2013, and the first quarter of 2014 to bridge from GAAP Operating Earnings to Non-GAAP Operating Earnings.

The Company uses certain non-GAAP financial information to provide important supplemental information to both management and investors regarding financial and business trends used in assessing our financial condition and results of operations. We have disclosed this non-GAAP financial information in our past quarterly earnings releases and are providing the same non-GAAP financial information in Exhibit 99.1 to this Form 8-K, as adjusted to reflect our new segments, so that investors have the same financial data that we use to make comparisons with our historical operating results and analyze our underlying performance.

The non-GAAP financial measures have been presented for informational purposes only. The non-GAAP financials measures do not purport to project our results of operations or financial condition for any period.

The Company has provided these non-GAAP measurements to help investors better understand its core operating performance, enhance comparisons of core operating performance from period to period and allow better comparisons of operating performance to its competitors. Among other things, management uses these operating results, excluding the identified items, to evaluate performance of its businesses and to evaluate results relative to certain incentive compensation targets. Management uses operating results excluding these items because it believes this 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.

Share-based compensation expense: The Company has excluded share-based compensation expense from its non-GAAP operating expenses and net income measurements. Although share-based compensation is a key incentive offered to the Company’s 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 share-based compensation expense primarily because it represents a significant non-cash expense. Share-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 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 can be 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.


Non-GAAP-2

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Adjustments Bridge

(In millions)

FY 2011

 

     MSI     Products     Services  

Net sales

   $ 5,738      $ 3,901      $ 1,837   

Operating earnings (“OE”)

   $ 598      $ 338      $ 260   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     133        87        46   

Reorganization of business charges

     40        27        13   

Intangibles amortization expense

     5        5        —     

Legal matters

     90        61        29   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     268        180        88   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 866      $ 518      $ 348   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     10.4     8.7     14.2

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     15.1     13.3     18.9


Non-GAAP-3

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Adjustments Bridge

(In millions)

Q1 2012

 

     MSI     Products     Services  

Net sales

   $ 1,387      $ 945      $ 442   

Operating earnings (“OE”)

   $ 152      $ 100      $ 52   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     34        22        12   

Reorganization of business charges

     7        5        2   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     41        27        14   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 193      $ 127      $ 66   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     11.0     10.6     11.8

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     13.9     13.4     14.9
Q2 2012   
     MSI     Products     Services  

Net sales

   $ 1,537      $ 1,021      $ 516   

Operating earnings

   $ 190      $ 125      $ 65   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     42        28        14   

Reorganization of business charges

     9        6        3   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     51        34        17   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 241      $ 159      $ 82   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     12.4     12.2     12.6

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     15.7     15.6     15.9
Q3 2012   
     MSI     Products     Services  

Net sales

   $ 1,580      $ 1,069      $ 511   

Operating earnings

   $ 252      $ 190      $ 62   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     35        23        12   

Reorganization of business charges

     8        5        3   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     43        28        15   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 295      $ 218      $ 77   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     15.9     17.8     12.1

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     18.7     20.4     15.1
Q4 2012   
     MSI     Products     Services  

Net sales

   $ 1,764      $ 1,201      $ 563   

Operating earnings

   $ 327      $ 241      $ 86   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     36        23        13   

Reorganization of business charges

     9        6        3   

Legal matter

     (16     (11     (5
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     29        18        11   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 356      $ 259      $ 97   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     18.5     20.1     15.3

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     20.2     21.6     17.2
FY 2012   
     MSI     Products     Services  

Net sales

   $ 6,269      $ 4,236      $ 2,033   

Operating earnings

   $ 920      $ 656      $ 264   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     146        95        51   

Reorganization of business charges

     33        22        11   

Intangibles amortization expense

     1        1        —     

Legal matter

     (16     (11     (5
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     164        107        57   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 1,084      $ 763      $ 321   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     14.7     15.5     13.0

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     17.3     18.0     15.8


Non-GAAP-4

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Adjustments Bridge

(In millions)

Q1 2013

 

     MSI     Products     Services  

Net sales

   $ 1,396      $ 914      $ 482   

Operating earnings (“OE”)

   $ 174      $ 106      $ 68   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     35        23        12   

Reorganization of business charges

     7        5        2   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     42        28        14   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 216      $ 134      $ 82   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     12.5     11.6     14.1

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     15.5     14.7     17.0
Q2 2013   
     MSI     Products     Services  

Net sales

   $ 1,497      $ 986      $ 511   

Operating earnings

   $ 203      $ 125      $ 78   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     27        17        10   

Reorganization of business charges

     18        12        6   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     45        29        16   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 248      $ 154      $ 94   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     13.6     12.7     15.3

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     16.6     15.6     18.4
Q3 2013   
     MSI     Products     Services  

Net sales

   $ 1,517      $ 998      $ 519   

Operating earnings

   $ 246      $ 171      $ 75   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     29        19        10   

Reorganization of business charges

     21        14        7   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     50        33        17   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 296      $ 204      $ 92   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     16.2     17.1     14.5

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     19.5     20.4     17.7
Q4 2013   
     MSI     Products     Services  

Net sales

   $ 1,817      $ 1,211      $ 606   

Operating earnings

   $ 325      $ 237      $ 88   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     29        19        10   

Reorganization of business charges

     41        27        14   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     70        46        24   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 395      $ 283      $ 112   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     17.9     19.6     14.5

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     21.7     23.4     18.5
FY 2013   
     MSI     Products     Services  

Net sales

   $ 6,227      $ 4,109      $ 2,118   

Operating earnings

   $ 947      $ 639      $ 308   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     121        79        42   

Reorganization of business charges

     86        56        30   

Intangibles amortization expense

     1        1        —     
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     208        136        72   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 1,155      $ 775      $ 380   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     15.2     15.6     14.5

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     18.5     18.9     17.9


Non-GAAP-5

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Adjustments Bridge

(In millions)

Q1 2014

 

     MSI     Products     Services  

Net sales

   $ 1,228      $ 753      $ 475   

Operating earnings (“OE”)

   $ 107      $ 39      $ 68   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Share-based compensation expense

     29        19        10   

Reorganization of business charges

     10        6        4   

Intangibles amortization expense

     1        1        —     

Gain on Sale of building and land

     (21     (13     (8
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     19        13        6   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 126      $ 52      $ 74   
  

 

 

   

 

 

   

 

 

 

Operating earnings as a percentage of net sales—GAAP

     8.7     5.2     14.3

Operating earnings as a percentage of net sales—after non-GAAP adjustments

     10.3     6.9     15.6