Date of report (Date of earliest event reported): August 1, 2019 | ||
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 | ||
_____________________________ | ||
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||
Common Stock; | $0.01 | Par Value | MSI | New York Stock Exchange |
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 1, 2019 announcing financial results for the quarter ended June 29, 2019. |
MOTOROLA SOLUTIONS, INC. (Registrant) | ||||
Dated: August 1, 2019 | By: | /s/ Dan Pekofske | ||
Name: | Dan Pekofske | |||
Title: | Corporate Vice President and Chief Accounting Officer |
Exhibit No. | Description |
99.1 | Press Release by Motorola Solutions, Inc. dated August 1, 2019 announcing financial results for the quarter ended June 29, 2019. |
• | Revenue of $1.9 billion, up 6% from a year ago |
• | GAAP earnings per share (EPS) of $1.18, up 12% |
• | Non-GAAP EPS* of $1.69, up 16% |
• | Backlog of $10.9 billion, up $1.5 billion or 16% from a year ago |
• | Generated $251 million of operating cash flow |
Q2 2019 | Q2 2018 | % Change | ||||
Sales | $1,860 | $1,760 | 6 | % | ||
GAAP | ||||||
Operating Earnings | $349 | $273 | 28 | % | ||
% of Sales | 18.8 | % | 15.5 | % | ||
EPS | $1.18 | $1.05 | 12 | % | ||
Non-GAAP | ||||||
Operating Earnings | $444 | $378 | 17 | % | ||
% of Sales | 23.9 | % | 21.5 | % | ||
EPS | $1.69 | $1.46 | 16 | % | ||
Products and Systems Integration Segment | ||||||
Sales | $1,238 | $1,189 | 4 | % | ||
GAAP Operating Earnings | $201 | $175 | 15 | % | ||
% of Sales | 16.2 | % | 14.7 | % | ||
Non-GAAP Operating Earnings | $242 | $226 | 7 | % | ||
% of Sales | 19.5 | % | 19.0 | % | ||
Services and Software Segment | ||||||
Sales | $622 | $571 | 9 | % | ||
GAAP Operating Earnings | $148 | $98 | 51 | % | ||
% of Sales | 23.8 | % | 17.2 | % | ||
Non-GAAP Operating Earnings | $202 | $152 | 33 | % | ||
% of Sales | 32.5 | % | 26.6 | % |
• | Revenue - Sales were $1.9 billion, up $100 million, or 6% from the year-ago quarter, driven by growth in the Americas. Revenue from acquisitions was $33 million, and currency headwinds were $37 million in the quarter. The Products and Systems Integration segment grew 4%, and the Services and Software segment grew 9%. Both segments were driven by growth in the Americas, partially offset by unfavorable currency rates. |
• | Operating margin - GAAP operating margin was 18.8% of sales, up from 15.5% in the year-ago quarter. The improvement was primarily due to higher sales and gross margin, partially offset by higher operating expenses related to acquisitions. Non-GAAP operating margin was 23.9% of sales, up from 21.5% in the year-ago quarter due to higher sales and gross margin, partially offset by higher operating expenses related to acquisitions. |
• | Cash flow - Operating cash flow was $251 million, compared with $425 million in the year-ago quarter. Free cash flow was $188 million, compared with $384 million in the year-ago quarter. Cash flow for the quarter decreased year over year primarily due to the timing of incentive payments made in 2019 versus 2018. For the first half of 2019, operating cash flow and free cash flow were higher versus the first half of 2018 primarily driven by a $500 million voluntary pension contribution in the prior year and higher earnings. |
• | Capital allocation - The company paid $94 million in cash dividends, incurred $63 million of capital expenditures and repurchased $25 million of common stock. From a debt perspective, the company issued $650 million of new 10 year senior unsecured notes and used the proceeds to repurchase existing notes, resulting in an extended weighted average debt maturity profile. |
• | Backlog - The company ended the quarter with backlog of $10.9 billion, up $1.5 billion from the year-ago quarter. Services and Software backlog was up 24% or $1.5 billion due to growth in EMEA and the Americas, partially offset by unfavorable changes in currency rates. Products and Systems Integration segment backlog was down 2% or $48 million primarily due to two large system deployments in the Middle East and Africa in the prior year and unfavorable changes in currency rates, partially offset by growth in the Americas. |
• | Signed $200 million ESN service extension through the end of 2024 |
• | $60 million P25 multi-year service contract with the state of Tennessee, extending service through 2028 |
• | $59 million five-year contract extension to provide license plate data and analytical software |
• | $5 million records management contract with Baltimore County |
• | $60 million P25 additional orders for statewide system in North Dakota |
• | $46 million P25 order from Oakland County, Michigan |
• | $34 million P25 order from Washington Metropolitan Area Transit Authority |
• | $5 million of public safety video security contracts in Broward County, FL and the Cleveland metro area |
• | Several multi-million dollar video security wins in education |
• | Third-quarter 2019 - Motorola Solutions expects revenue growth of approximately 6.5% compared with the third quarter of 2018. The company expects non-GAAP earnings per share in the range of $1.91 to $1.96. This assumes current foreign exchange rates, approximately 177 million fully diluted shares and an effective tax rate of approximately 25%. |
• | Full-year 2019 - The company now expects revenue growth of 7 to 7.5%, up from the prior guidance of 6 to 7%. The company now expects non-GAAP earnings per share in the range of $7.67 to $7.77, up from the prior guidance of $7.60 to $7.72. This assumes current foreign exchange rates, approximately 176 million fully diluted shares and an effective tax rate of 24 to 25%. |
Q2 2019 | Q2 2018 | |||
Net sales | $1,860 | $1,760 | ||
Gross margin | 931 | 822 | ||
Operating earnings | 349 | 273 | ||
Amounts attributable to Motorola Solutions, Inc. common stockholders | ||||
Net earnings | 207 | 180 | ||
Diluted EPS | $1.18 | $1.05 | ||
Weighted average diluted common shares outstanding | 176.1 | 171.7 |
(per diluted common share) | Q2 2019 | |
GAAP Earnings | $1.18 | |
Highlighted Items: | ||
Intangibles amortization expense | 0.23 | |
Loss from the extinguishment of long-term debt | 0.18 | |
Share-based compensation expense | 0.13 | |
Reorganization of business charges | 0.05 | |
Legal settlements | 0.01 | |
Investment impairments | 0.01 | |
Sale of a business | (0.01 | ) |
FIN48 releases | (0.02 | ) |
Fair value adjustments to equity investments | (0.07 | ) |
Non-GAAP Diluted EPS | $1.69 |
Three Months Ended | |||||||
June 29, 2019 | June 30, 2018 | ||||||
Net sales from products | $ | 1,118 | $ | 1,042 | |||
Net sales from services | 742 | 718 | |||||
Net sales | 1,860 | 1,760 | |||||
Costs of products sales | 490 | 485 | |||||
Costs of services sales | 439 | 453 | |||||
Costs of sales | 929 | 938 | |||||
Gross margin | 931 | 822 | |||||
Selling, general and administrative expenses | 351 | 316 | |||||
Research and development expenditures | 170 | 162 | |||||
Other charges | 9 | 18 | |||||
Intangibles amortization | 52 | 53 | |||||
Operating earnings | 349 | 273 | |||||
Other income (expense): | |||||||
Interest expense, net | (56 | ) | (58 | ) | |||
Gains (losses) on sales of investments and businesses, net | 3 | (1 | ) | ||||
Other, net | (21 | ) | 13 | ||||
Total other expense | (74 | ) | (46 | ) | |||
Net earnings before income taxes | 275 | 227 | |||||
Income tax expense | 67 | 46 | |||||
Net earnings | 208 | 181 | |||||
Less: Earnings attributable to non-controlling interests | 1 | 1 | |||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 207 | $ | 180 | |||
Earnings per common share: | |||||||
Basic | $ | 1.25 | $ | 1.11 | |||
Diluted | $ | 1.18 | $ | 1.05 | |||
Weighted average common shares outstanding: | |||||||
Basic | 164.9 | 162.2 | |||||
Diluted | 176.1 | 171.7 |
Percentage of Net Sales* | |||||
Net sales from products | 60.1 | % | 59.2 | % | |
Net sales from services | 39.9 | % | 40.8 | % | |
Net sales | 100.0 | % | 100.0 | % | |
Costs of products sales | 43.8 | % | 46.5 | % | |
Costs of services sales | 59.2 | % | 63.1 | % | |
Costs of sales | 49.9 | % | 53.3 | % | |
Gross margin | 50.1 | % | 46.7 | % | |
Selling, general and administrative expenses | 18.9 | % | 18.0 | % | |
Research and development expenditures | 9.1 | % | 9.2 | % | |
Other charges | 0.5 | % | 1.0 | % | |
Intangibles amortization | 2.8 | % | 3.0 | % | |
Operating earnings | 18.8 | % | 15.5 | % | |
Other income (expense): | |||||
Interest expense, net | (3.0 | )% | (3.3 | )% | |
Gains (losses) on sales of investments and businesses, net | 0.2 | % | (0.1 | )% | |
Other, net | (1.1 | )% | 0.7 | % | |
Total other expense | (4.0 | )% | (2.6 | )% | |
Net earnings before income taxes | 14.8 | % | 12.9 | % | |
Income tax expense | 3.6 | % | 2.6 | % | |
Net earnings | 11.2 | % | 10.3 | % | |
Less: Earnings attributable to non-controlling interests | 0.1 | % | 0.1 | % | |
Net earnings attributable to Motorola Solutions, Inc. | 11.1 | % | 10.2 | % | |
* Percentages may not add up due to rounding |
Six Months Ended | |||||||
June 29, 2019 | June 30, 2018 | ||||||
Net sales from products | $ | 2,063 | $ | 1,842 | |||
Net sales from services | 1,454 | 1,385 | |||||
Net sales | 3,517 | 3,227 | |||||
Costs of products sales | 934 | 867 | |||||
Costs of services sales | 879 | 869 | |||||
Costs of sales | 1,813 | 1,736 | |||||
Gross margin | 1,704 | 1,491 | |||||
Selling, general and administrative expenses | 676 | 594 | |||||
Research and development expenditures | 333 | 314 | |||||
Other charges | 14 | 44 | |||||
Intangibles amortization | 102 | 94 | |||||
Operating earnings | 579 | 445 | |||||
Other income (expense): | |||||||
Interest expense, net | (111 | ) | (104 | ) | |||
Gains on sales of investments and businesses, net | 4 | 10 | |||||
Other, net | (12 | ) | 16 | ||||
Total other expense | (119 | ) | (78 | ) | |||
Net earnings before income taxes | 460 | 367 | |||||
Income tax expense | 100 | 69 | |||||
Net earnings | 360 | 298 | |||||
Less: Earnings attributable to non-controlling interests | 2 | 1 | |||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 358 | $ | 297 | |||
Earnings per common share: | |||||||
Basic | $ | 2.18 | $ | 1.83 | |||
Diluted | $ | 2.04 | $ | 1.73 | |||
Weighted average common shares outstanding: | |||||||
Basic | 164.4 | 161.7 | |||||
Diluted | 175.3 | 171.1 |
Percentage of Net Sales* | |||||
Net sales from products | 58.7 | % | 57.1 | % | |
Net sales from services | 41.3 | % | 42.9 | % | |
Net sales | 100.0 | % | 100.0 | % | |
Costs of products sales | 45.3 | % | 47.1 | % | |
Costs of services sales | 60.5 | % | 62.7 | % | |
Costs of sales | 51.5 | % | 53.8 | % | |
Gross margin | 48.5 | % | 46.2 | % | |
Selling, general and administrative expenses | 19.2 | % | 18.4 | % | |
Research and development expenditures | 9.5 | % | 9.7 | % | |
Other charges | 0.4 | % | 1.4 | % | |
Intangibles amortization | 2.9 | % | 2.9 | % | |
Operating earnings | 16.5 | % | 13.8 | % | |
Other income (expense): | |||||
Interest expense, net | (3.2 | )% | (3.2 | )% | |
Gains on sales of investments and businesses, net | 0.1 | % | 0.3 | % | |
Other, net | (0.3 | )% | 0.5 | % | |
Total other expense | (3.4 | )% | (2.4 | )% | |
Net earnings before income taxes | 13.1 | % | 11.4 | % | |
Income tax expense | 2.8 | % | 2.1 | % | |
Net earnings | 10.2 | % | 9.2 | % | |
Less: Earnings attributable to non-controlling interests | 0.1 | % | — | % | |
Net earnings attributable to Motorola Solutions, Inc. | 10.2 | % | 9.2 | % | |
* Percentages may not add up due to rounding |
June 29, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 953 | $ | 1,246 | ||||
Restricted cash | 11 | 11 | ||||||
Total cash and cash equivalents | 964 | 1,257 | ||||||
Accounts receivable, net | 1,206 | 1,293 | ||||||
Contract assets | 913 | 1,012 | ||||||
Inventories, net | 424 | 356 | ||||||
Other current assets | 324 | 354 | ||||||
Total current assets | 3,831 | 4,272 | ||||||
Property, plant and equipment, net | 940 | 895 | ||||||
Operating lease assets | 567 | — | ||||||
Investments | 175 | 169 | ||||||
Deferred income taxes | 913 | 985 | ||||||
Goodwill | 1,852 | 1,514 | ||||||
Intangible assets, net | 1,332 | 1,230 | ||||||
Other assets | 364 | 344 | ||||||
Total assets | $ | 9,974 | $ | 9,409 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current portion of long-term debt | $ | 28 | $ | 31 | ||||
Accounts payable | 544 | 592 | ||||||
Contract liabilities | 1,187 | 1,263 | ||||||
Accrued liabilities | 1,117 | 1,210 | ||||||
Total current liabilities | 2,876 | 3,096 | ||||||
Long-term debt | 5,315 | 5,289 | ||||||
Operating lease liabilities | 504 | — | ||||||
Other liabilities | 2,233 | 2,300 | ||||||
Total Motorola Solutions, Inc. stockholders’ equity (deficit) | (970 | ) | (1,293 | ) | ||||
Non-controlling interests | 16 | 17 | ||||||
Total liabilities and stockholders’ equity | $ | 9,974 | $ | 9,409 | ||||
Three Months Ended | |||||||
June 29, 2019 | June 30, 2018 | ||||||
Operating | |||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 207 | $ | 180 | |||
Earnings attributable to non-controlling interests | 1 | 1 | |||||
Net earnings | 208 | 181 | |||||
Adjustments to reconcile Net earnings to Net cash provided by (used for) operating activities: | |||||||
Depreciation and amortization | 96 | 96 | |||||
Non-cash other (income) charges | (6 | ) | 3 | ||||
Share-based compensation expense | 30 | 17 | |||||
Losses (gains) on sales of investments and businesses, net | (3 | ) | 1 | ||||
Loss from the extinguishment of long term debt | 43 | — | |||||
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | |||||||
Accounts receivable | (58 | ) | 11 | ||||
Inventories | 2 | 46 | |||||
Other current assets and contract assets | (8 | ) | 41 | ||||
Accounts payable, accrued liabilities, and contract liabilities | (84 | ) | 10 | ||||
Other assets and liabilities | 8 | (5 | ) | ||||
Deferred income taxes | 23 | 24 | |||||
Net cash provided by operating activities | 251 | 425 | |||||
Investing | |||||||
Acquisitions and investments, net | (3 | ) | (28 | ) | |||
Proceeds from sales of investments and businesses, net | 8 | 2 | |||||
Capital expenditures | (63 | ) | (41 | ) | |||
Net cash used for investing activities | (58 | ) | (67 | ) | |||
Financing | |||||||
Repayment of debt | (658 | ) | (147 | ) | |||
Net proceeds from issuance of debt | 645 | (1 | ) | ||||
Issuance of common stock | 25 | 6 | |||||
Purchases of common stock | (25 | ) | — | ||||
Payments of dividends | (94 | ) | (84 | ) | |||
Payments of dividends to non-controlling interests | (3 | ) | (1 | ) | |||
Net cash used for financing activities | (110 | ) | (227 | ) | |||
Effect of exchange rate changes on total cash and cash equivalents | (16 | ) | (48 | ) | |||
Net increase in total cash and cash equivalents | 67 | 83 | |||||
Total cash and cash equivalents, beginning of period | 897 | 858 | |||||
Total cash and cash equivalents, end of period | $ | 964 | $ | 941 | |||
Financial Ratios: | |||||||
Free cash flow* | $ | 188 | $ | 384 | |||
*Free cash flow = Net cash provided by (used for) operating activities - Capital expenditures |
Six Months Ended | |||||||
June 29, 2019 | June 30, 2018 | ||||||
Operating | |||||||
Net earnings attributable to Motorola Solutions, Inc. | $ | 358 | $ | 297 | |||
Earnings attributable to non-controlling interests | 2 | 1 | |||||
Net earnings | 360 | 298 | |||||
Adjustments to reconcile Net earnings to Net cash provided by (used for) operating activities: | |||||||
Depreciation and amortization | 191 | 178 | |||||
Non-cash other charges | 4 | 6 | |||||
Share-based compensation expense | 57 | 34 | |||||
Gains on sales of investments and businesses, net | (4 | ) | (10 | ) | |||
Loss from the extinguishment of long term debt | 43 | — | |||||
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | |||||||
Accounts receivable | 110 | 206 | |||||
Inventories | (61 | ) | 37 | ||||
Other current assets and contract assets | 128 | 43 | |||||
Accounts payable, accrued liabilities, and contract liabilities | (345 | ) | (340 | ) | |||
Other assets and liabilities | 2 | (558 | ) | ||||
Deferred income taxes | 17 | 31 | |||||
Net cash provided by (used for) operating activities | 502 | (75 | ) | ||||
Investing | |||||||
Acquisitions and investments, net | (371 | ) | (1,153 | ) | |||
Proceeds from sales of investments and businesses, net | 10 | 79 | |||||
Capital expenditures | (129 | ) | (82 | ) | |||
Net cash used for investing activities | (490 | ) | (1,156 | ) | |||
Financing | |||||||
Repayment of debt | (666 | ) | (197 | ) | |||
Net proceeds from issuance of debt | 645 | 1,295 | |||||
Issuance of common stock | 70 | 59 | |||||
Purchases of common stock | (170 | ) | (66 | ) | |||
Payments of dividends | (187 | ) | (168 | ) | |||
Payments of dividends to non-controlling interests | (3 | ) | (1 | ) | |||
Net cash provided by (used for) financing activities | (311 | ) | 922 | ||||
Effect of exchange rate changes on total cash and cash equivalents | 6 | (18 | ) | ||||
Net decrease in total cash and cash equivalents | (293 | ) | (327 | ) | |||
Total cash and cash equivalents, beginning of period | 1,257 | 1,268 | |||||
Total cash and cash equivalents, end of period | $ | 964 | $ | 941 | |||
Financial Ratios: | |||||||
Free cash flow* | $ | 373 | $ | (157 | ) | ||
*Free cash flow = Net cash provided by (used for) operating activities - Capital expenditures |
Net Sales | ||||||||||
Three Months Ended | ||||||||||
June 29, 2019 | June 30, 2018 | % Change | ||||||||
Products and Systems Integration | $ | 1,238 | $ | 1,189 | 4 | % | ||||
Services and Software | 622 | 571 | 9 | % | ||||||
Total Motorola Solutions | $ | 1,860 | $ | 1,760 | 6 | % | ||||
Six Months Ended | ||||||||||
June 29, 2019 | June 30, 2018 | % Change | ||||||||
Products and Systems Integration | $ | 2,307 | $ | 2,141 | 8 | % | ||||
Services and Software | 1,210 | 1,086 | 11 | % | ||||||
Total Motorola Solutions | $ | 3,517 | $ | 3,227 | 9 | % | ||||
Operating Earnings | ||||||||||
Three Months Ended | ||||||||||
June 29, 2019 | June 30, 2018 | % Change | ||||||||
Products and Systems Integration | $ | 201 | $ | 175 | 15 | % | ||||
Services and Software | 148 | 98 | 51 | % | ||||||
Total Motorola Solutions | $ | 349 | $ | 273 | 28 | % | ||||
Six Months Ended | ||||||||||
June 29, 2019 | June 30, 2018 | % Change | ||||||||
Products and Systems Integration | $ | 310 | $ | 265 | 17 | % | ||||
Services and Software | 269 | 180 | 49 | % | ||||||
Total Motorola Solutions | $ | 579 | $ | 445 | 30 | % | ||||
Operating Earnings % | |||||||
Three Months Ended | |||||||
June 29, 2019 | June 30, 2018 | ||||||
Products and Systems Integration | 16.2 | % | 14.7 | % | |||
Services and Software | 23.8 | % | 17.2 | % | |||
Total Motorola Solutions | 18.8 | % | 15.5 | % | |||
Six Months Ended | |||||||
June 29, 2019 | June 30, 2018 | ||||||
Products and Systems Integration | 13.4 | % | 12.4 | % | |||
Services and Software | 22.2 | % | 16.6 | % | |||
Total Motorola Solutions | 16.5 | % | 13.8 | % | |||
Q1 2019 | ||||||||||||||||||
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 | $ | 27 | $ | 6 | $ | 21 | $ | 0.12 | |||||||||
Reorganization of business charges | Cost of sales and Other charges | 8 | 2 | 6 | 0.04 | |||||||||||||
Intangibles amortization expense | Intangibles amortization | 50 | 11 | 39 | 0.23 | |||||||||||||
Legal settlement | Other charges | (1 | ) | — | (1 | ) | (0.01 | ) | ||||||||||
Fair value adjustments to equity investments | Other expense | 1 | — | 1 | 0.01 | |||||||||||||
Investment impairments | Investment impairments | 8 | 2 | 6 | 0.04 | |||||||||||||
Sale of investments | (Gain) or loss on sales of investments and businesses, net | (1 | ) | — | (1 | ) | (0.01 | ) | ||||||||||
Acquisition-related transaction fees | Other charges | 2 | — | 2 | 0.01 | |||||||||||||
FIN48 release | Income tax expense | — | 1 | (1 | ) | (0.01 | ) | |||||||||||
Total impact on Net earnings | $ | 94 | $ | 22 | $ | 72 | $ | 0.42 | ||||||||||
Q2 2019 | ||||||||||||||||||
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 | $ | 30 | $ | 7 | $ | 23 | $ | 0.13 | |||||||||
Reorganization of business charges | Cost of sales and Other charges | 12 | 3 | 9 | 0.05 | |||||||||||||
Intangibles amortization expense | Intangibles amortization | 52 | 11 | 41 | 0.23 | |||||||||||||
Loss from the extinguishment of long-term debt | Other expense | 43 | 11 | 32 | 0.18 | |||||||||||||
Sale of a business | (Gain) or loss on sales of investments and businesses, net | (3 | ) | (1 | ) | (2 | ) | (0.01 | ) | |||||||||
Legal settlements | Other charges | 1 | — | 1 | 0.01 | |||||||||||||
Investment impairments | Investment impairments | 3 | 1 | 2 | 0.01 | |||||||||||||
Fair value adjustments to equity investments | Other income | (16 | ) | (4 | ) | (12 | ) | (0.07 | ) | |||||||||
FIN48 releases | Other income, Income tax expense | (4 | ) | (1 | ) | (3 | ) | (0.02 | ) | |||||||||
Total impact on Net earnings | $ | 118 | $ | 27 | $ | 91 | $ | 0.51 | ||||||||||
Net Sales | ||||||||||
Three Months Ended | ||||||||||
June 29, 2019 | June 30, 2018 | % Change | ||||||||
Products and Systems Integration | $ | 1,238 | $ | 1,189 | 4 | % | ||||
Services and Software | 622 | 571 | 9 | % | ||||||
Total Motorola Solutions | $ | 1,860 | $ | 1,760 | 6 | % | ||||
Six Months Ended | ||||||||||
June 29, 2019 | June 30, 2018 | % Change | ||||||||
Products and Systems Integration | $ | 2,307 | $ | 2,141 | 8 | % | ||||
Services and Software | 1,210 | 1,086 | 11 | % | ||||||
Total Motorola Solutions | $ | 3,517 | $ | 3,227 | 9 | % | ||||
Non-GAAP Operating Earnings | ||||||||||
Three Months Ended | ||||||||||
June 29, 2019 | June 30, 2018 | % Change | ||||||||
Products and Systems Integration | $ | 242 | $ | 226 | 7 | % | ||||
Services and Software | 202 | 152 | 33 | % | ||||||
Total Motorola Solutions | $ | 444 | $ | 378 | 17 | % | ||||
Six Months Ended | ||||||||||
June 29, 2019 | June 30, 2018 | % Change | ||||||||
Products and Systems Integration | $ | 389 | $ | 350 | 11 | % | ||||
Services and Software | 370 | 287 | 29 | % | ||||||
Total Motorola Solutions | $ | 759 | $ | 637 | 19 | % | ||||
Non-GAAP Operating Earnings % | |||||||
Three Months Ended | |||||||
June 29, 2019 | June 30, 2018 | ||||||
Products and Systems Integration | 19.5 | % | 19.0 | % | |||
Services and Software | 32.5 | % | 26.6 | % | |||
Total Motorola Solutions | 23.9 | % | 21.5 | % | |||
Six Months Ended | |||||||
June 29, 2019 | June 30, 2018 | ||||||
Products and Systems Integration | 16.9 | % | 16.3 | % | |||
Services and Software | 30.6 | % | 26.4 | % | |||
Total Motorola Solutions | 21.6 | % | 19.7 | % |
Q1 2019 | ||||||||||||
TOTAL | Products and Systems Integration | Services and Software | ||||||||||
Net sales | $ | 1,657 | $ | 1,069 | $ | 588 | ||||||
Operating earnings ("OE") | $ | 229 | $ | 108 | $ | 121 | ||||||
Above-OE non-GAAP adjustments: | ||||||||||||
Share-based compensation expense | 27 | 21 | 6 | |||||||||
Reorganization of business charges | 8 | 7 | 1 | |||||||||
Intangibles amortization expense | 50 | 11 | 39 | |||||||||
Acquisition-related transaction fees | 2 | 1 | 1 | |||||||||
Legal settlement | (1 | ) | (1 | ) | — | |||||||
Total above-OE non-GAAP adjustments | 86 | 39 | 47 | |||||||||
Operating earnings after non-GAAP adjustments | $ | 315 | $ | 147 | $ | 168 |
Operating earnings as a percentage of net sales - GAAP | 13.8 | % | 10.1 | % | 20.6 | % | |||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 19.0 | % | 13.8 | % | 28.6 | % |
Q2 2019 | ||||||||||||
TOTAL | Products and Systems Integration | Services and Software | ||||||||||
Net sales | $ | 1,860 | $ | 1,238 | $ | 622 | ||||||
Operating earnings ("OE") | $ | 349 | $ | 201 | $ | 148 | ||||||
Above-OE non-GAAP adjustments: | ||||||||||||
Share-based compensation expense | 30 | 19 | 11 | |||||||||
Reorganization of business charges | 12 | 9 | 3 | |||||||||
Intangibles amortization expense | 52 | 12 | 40 | |||||||||
Legal settlements | 1 | 1 | — | |||||||||
Total above-OE non-GAAP adjustments | 95 | 41 | 54 | |||||||||
Operating earnings after non-GAAP adjustments | $ | 444 | $ | 242 | $ | 202 |
Operating earnings as a percentage of net sales - GAAP | 18.8 | % | 16.2 | % | 23.8 | % | |||
Operating earnings as a percentage of net sales - after non-GAAP adjustments | 23.9 | % | 19.5 | % | 32.5 | % |
Total Motorola Solutions | |||||||||||
Three Months Ended | |||||||||||
June 29, 2019 | June 30, 2018 | % Change | |||||||||
Net sales | $ | 1,860 | $ | 1,760 | 6 | % | |||||
Non-GAAP adjustments: | |||||||||||
Acquisitions | (37 | ) | (4 | ) | |||||||
Organic revenue | $ | 1,823 | $ | 1,756 | 4 | % |
Total Motorola Solutions | |||||||||||
Six Months Ended | |||||||||||
June 29, 2019 | June 30, 2018 | % Change | |||||||||
Net sales | $ | 3,517 | $ | 3,227 | 9 | % | |||||
Non-GAAP adjustments: | |||||||||||
Acquisitions | (196 | ) | (26 | ) | |||||||
Organic revenue | $ | 3,321 | $ | 3,201 | 4 | % |