EX-99.1 2 d339345dex991.htm PRESS RELEASE BY MOTOROLA SOLUTIONS, INC. DATED APRIL 25, 2012 Press Release by Motorola Solutions, Inc. dated April 25, 2012

Exhibit 99.1

Motorola Solutions Reports First-Quarter 2012 Financial Results

Record first-quarter sales and operating earnings

 

   

Sales of $2.0 billion, up 7 percent from a year ago

 

   

Government sales of $1.3 billion, up 11 percent from a year ago

 

   

GAAP operating earnings of $232 million, up 37 percent from a year ago

 

   

Non-GAAP operating earnings of $290 million, up 9 percent from a year ago

 

   

Repurchased $1.4 billion of shares in the quarter

 

(In millions, except earnings per share)

   Q1 2012      Q1 2011     Change  

Total sales

   $ 1,956       $ 1,834        7

GAAP operating earnings

   $ 232       $ 169        37

Non-GAAP operating earnings

   $ 290       $ 266        9

GAAP EPS from continuing operations*

   $ 0.50       $ 1.07       (53 )% 

Non-GAAP** EPS from continuing operations*

   $ 0.59       $ 0.54        9

 

Includes $0.69 of income from highlighted items primarily related to a $244 million non-cash gain related to the reversal of valuation allowances on tax assets.

Click here for printable press release and financial tables.

SCHAUMBURG, Ill. – April 25, 2012 – Motorola Solutions, Inc. (NYSE: MSI) announced today its first-quarter 2012 results highlighted by sales of $2 billion, up 7 percent from the first quarter of 2011 and driven by strong worldwide demand in its Government segment.

“Motorola Solutions had a great start to the year by posting record first-quarter sales and operating earnings while also returning approximately $1.4 billion to shareholders,” said Greg Brown, chairman and CEO.

GAAP operating earnings in the first quarter of 2012 were $232 million or 11.9 percent of sales, compared to $169 million or 9.2 percent of sales in the first quarter of 2011. GAAP earnings per share (EPS) from continuing operations* were $0.50, compared to $1.07 in the first quarter of 2011. The first-quarter 2011 GAAP EPS from continuing operations includes $0.69 of income from highlighted items primarily related to a $244 million non-cash gain related to the reversal of valuation allowances on tax assets.

Non-GAAP** operating earnings in the first quarter of 2012 were $290 million or 14.8 percent of sales, compared to $266 million or 14.5 percent of sales in the first quarter of 2011. Non-GAAP earnings per share from continuing operations were $0.59, compared to $0.54 in the first quarter of 2011. Non-GAAP financial information excludes after-tax benefits of approximately $0.09 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 2012, the company generated $69 million in operating cash flow from continuing operations. Operating cash flows in the quarter were impacted by approximately $200 million related to the timing of certain annual incentives historically paid in the second quarter and a legal settlement. During the quarter, the company repurchased $1.4 billion in stock, paid $70 million in dividends and ended the quarter with total cash*** of $3.8 billion.


Government segment sales were $1.3 billion, up 11 percent from the year-ago quarter, driven by growth in all regions. GAAP operating earnings were $150 million or 11.5 percent of sales compared to $99 million or 8.5 percent of sales in the year-ago quarter. Non-GAAP operating earnings were $184 million or 14.1 percent of sales compared to $134 million or 11.5 percent of sales in the year-ago quarter.

Government highlights:

 

   

Awarded prime contractor for the Norwegian nationwide TETRA project, with anticipated revenues of approximately $750 million through 2026

 

   

Secured multi-million dollar contracts with the U.S. Department of Defense, the Canada Department of National Defense, the Royal Australian Airforce, Sumter County in Florida, Colombia County in Georgia, Warren County in Ohio, Adams County in Pennsylvania, Pierce County in Washington, Mumbai Airport, Aerothai Airways in Thailand and Hong Kong Mass Transit

 

   

Continued to demonstrate leadership in public safety LTE with contract to expand the Harris County, Texas, Public Safety LTE wide-area broadband network

 

   

Introduced the LEX 700, the first handheld Public Safety LTE device, which delivers unprecedented access to “street ready” data in a compact, rugged format

 

   

Expanded the MOTOTRBO™ professional digital communications portfolio with the SL Series, the world’s thinnest, lightest digital mobile radio portable for industries such as hospitality, services, security and airlines

Enterprise segment sales were $655 million, down 2 percent from the year-ago quarter, which included a $31 million decline in iDEN sales. Sales excluding iDEN were up, driven by growth in North America and Asia Pacific. GAAP operating earnings were $82 million or 12.5 percent of sales compared to $70 million or 10.5 percent of sales in the year-ago quarter. Non-GAAP operating earnings were $106 million or 16.2 percent of sales compared to $132 million or 19.8 percent of sales in the year-ago quarter.

Enterprise highlights:

 

   

Continued growth with contracts from key customers such as United Airlines, TNT Express (Germany), Commonwealth Edison, Macy’s, and Goya Foods

 

   

Began shipping ET1 tablets with early customer wins such as Mayer Electric, a wholesale-distributor of electrical equipment and supplies, which deployed ET1 tablets in its trucks for drivers to use a direct store delivery application to capture signatures at point of delivery

 

   

Launched the NX Integrated Services Platform to simplify retailers’ deployment and management of branch office networking and communications, allowing retail associates to have mobile access to voice, data and advanced applications, all delivered by a single platform

 

   

Introduced the DS3500-ER series of scanners, capable of scanning 1D, 2D and GS1 codes at extended ranges to improve worker productivity and reduce the need for businesses to purchase multiple devices


Second-Quarter and Full-Year 2012 Outlook

The company expects second-quarter sales to grow approximately 6 percent compared with the second quarter of 2011, with earnings per share from continuing operations of $0.65 to $0.70. The company reaffirms its full year 2012 outlook of sales growth of approximately 5 percent compared with 2011 and operating earnings of approximately 17 percent of sales. This outlook excludes 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.

Consolidated GAAP Results

A comparison of results from operations is as follows:

 

     First Quarter  

(In millions, except per share amounts)

   2012     2011  

Net sales

   $ 1,956      $ 1,834   

Gross margin

     973        924   

Operating earnings

     232        169   

Earnings from continuing operations before income taxes

     244        172   

Income tax expense (benefit)

     85        (189

Earnings from continuing operations*

     159        367   

Earnings (loss) from discontinuing operations, net of tax

     (2     130   

Net earnings *

     157        497   

Diluted earnings per common share from continuing operations: *

   $ 0.50      $ 1.07   

Weighted average diluted common shares outstanding

     317.7        344.2   
  

 

 

   

 

 

 

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 2012.

 

(per diluted common share)

   First Quarter
2012
 

GAAP Earnings per Common Share

   $ 0.50   

Highlighted Items:

  

Reorganization of business charges

     0.02   

Gain on equity investments

     (0.03
  

 

 

 

Total Highlighted Items

     (0.01
  

 

 

 

Stock-based compensation expense

     0.09   


Intangible assets amortization expense

     0.01   
  

 

 

 

Total Stock-Based Compensation Expense and Intangible Assets Amortization Expense

     0.10   
  

 

 

 

Total Non-GAAP Adjustments

     0.09   
  

 

 

 

Non-GAAP Earnings per Common Share

   $ 0.59   
  

 

 

 

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 Wednesday, April 25. 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, Motorola Solutions’ financial outlook for the second quarter of 2012. Motorola Solutions cautions the reader that the risk factors below, as well as those on pages 9 through 22 in Item 1A of Motorola Solutions, Inc.’s 2011 Annual Report on Form 10-K and in its other SEC filings available for free on the SEC’s website at 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) the economic outlook for the government and enterprise communications industries; (2) the level of demand for the company’s products, particularly if businesses and governments defer or cancel purchases in response to tighter credit; (3) the company’s ability to introduce new products and technologies in a timely manner; (4) negative impact on the company’s business from global economic conditions, which may include: (i) potential deferment or cancellation of purchase orders by customers; (ii) the inability of customers to obtain financing for purchases of the company’s products; (iii) increased demand to provide vendor financing to customers; (iv) increased financial pressures on third-party dealers, distributors and retailers; (v) the viability of the company’s suppliers that may no longer have access to necessary financing; (vi) counterparty failures negatively impacting the company’s financial position; (vii) changes in the value of investments held by the company’s pension plan and other defined benefit plans; and (viii) the company’s ability to access the capital markets on acceptable terms and conditions; (5) the company’s ability to purchase sufficient materials, parts and components to meet customer demand, particularly in light of global economic conditions; (6) risks related to dependence on certain key suppliers, subcontractors, third-party distributors and other representatives; (7) the impact on the company’s performance and financial results from strategic acquisitions or divestitures, including those that may occur in the future; (8) risks related to the company’s manufacturing and business operations in foreign countries; (9) the creditworthiness of the company’s customers and distributors, particularly purchasers of large infrastructure systems; (10) exposure under large systems and managed services contracts, including risks related to the fact that certain customers require that the


company build, own and operate their systems, often over a multi-year period; (11) the ownership of certain logos, trademarks, trade names and service marks including “MOTOROLA” by Motorola Mobility Holdings, Inc.; (12) 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; (13) unexpected liabilities or expenses, including unfavorable outcomes to any pending or future litigation or regulatory or similar proceedings; (14) 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; (15) the impact of the percentage of cash and cash equivalents held outside of the United States; (16) the ability of the company to pay future dividends due to possible adverse market conditions or adverse impacts on the company’s cash flow; (17) the ability of the company to repurchase shares under its repurchase program due to possible adverse market conditions or adverse impacts on the company’s cash flow; (18) the impact of changes in governmental policies, laws or regulations; (19) the outcome of currently ongoing and future tax matters; and (20) 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

 

* Amounts attributable to Motorola Solutions, Inc. common stockholders
** Non-GAAP financial information excludes from GAAP results the effects of stock-based compensation expense, intangible assets amortization expense and highlighted items
*** Total cash = Cash and cash equivalents + Sigma Fund (current) and short-term investments

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, MOTO, 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. ©2012 Motorola Solutions, Inc. All rights reserved.


GAAP-1

Motorola Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In millions, except per share amounts)

 

     Three Months Ended  
     March 31, 2012     April 2, 2011  

Net sales from products

   $ 1,444      $ 1,374   

Net sales from services

     512        460   
  

 

 

   

 

 

 

Net sales

     1,956        1,834   

Costs of products sales

     658        624   

Costs of services sales

     325        286   
  

 

 

   

 

 

 

Costs of sales

     983        910   
  

 

 

   

 

 

 

Gross margin

     973        924   
  

 

 

   

 

 

 

Selling, general and administrative expenses

     472        461   

Research and development expenditures

     254        239   

Other charges (income)

     9        5   

Intangibles amortization

     6        50   
  

 

 

   

 

 

 

Operating earnings

     232        169   
  

 

 

   

 

 

 

Other income (expense):

    

Interest expense, net

     (14     (20

Gain on sales of investments and businesses, net

     17        18   

Other

     9        5   
  

 

 

   

 

 

 

Total other income

     12        3   
  

 

 

   

 

 

 

Earnings from continuing operations before income taxes

     244        172   

Income tax expense (benefit)

     85        (189
  

 

 

   

 

 

 

Earnings from continuing operations

     159        361   

Earnings (loss) from discontinued operations, net of tax

     (2     130   
  

 

 

   

 

 

 

Net earnings

     157        491   

Less: Loss attributable to noncontrolling interests

     —          (6
  

 

 

   

 

 

 

Net earnings attributable to Motorola Solutions, Inc.

   $ 157      $ 497   
  

 

 

   

 

 

 

Amounts attributable to Motorola Solutions, Inc. common shareholders

    

Earnings from continuing operations, net of tax

   $ 159      $ 367   

Earnings (loss) from discontinued operations, net of tax

     (2     130   
  

 

 

   

 

 

 

Net earnings

   $ 157      $ 497   
  

 

 

   

 

 

 

Earnings (loss) per common share

    

Basic:

    

Continuing operations

   $ 0.51      $ 1.09   

Discontinued operations

     (0.01     0.38   
  

 

 

   

 

 

 
   $ 0.50      $ 1.47   
  

 

 

   

 

 

 

Diluted:

    

Continuing operations

   $ 0.50      $ 1.07   

Discontinued operations

     (0.01     0.37   
  

 

 

   

 

 

 
   $ 0.49      $ 1.44   
  

 

 

   

 

 

 

Weighted average common shares outstanding

    

Basic

     311.3        337.4   

Diluted

     317.7        344.2   
     Percentage of Net Sales*  

Net sales from products

     73.8     74.9

Net sales from services

     26.2     25.1
  

 

 

   

 

 

 

Net sales

     100     100
  

 

 

   

 

 

 

Costs of products sales

     45.6     45.4

Costs of services sales

     63.5     62.2
  

 

 

   

 

 

 

Costs of sales

     50.3     49.6
  

 

 

   

 

 

 

Gross margin

     49.7     50.4
  

 

 

   

 

 

 

Selling, general and administrative expenses

     24.1     25.1

Research and development expenditures

     13.0     13.0

Other charges (income)

     0.5     0.3

Intangibles amortization

     0.3     2.7
  

 

 

   

 

 

 

Operating earnings

     11.9     9.2
  

 

 

   

 

 

 

Other income (expense):

    

Interest expense, net

     -0.7     -1.1

Gain on sales of investments and businesses, net

     0.9     1.0

Other

     0.5     0.3
  

 

 

   

 

 

 

Total other income (expense)

     0.6     0.2
  

 

 

   

 

 

 

Earnings from continuing operations before income taxes

     12.5     9.4

Income tax expense (benefit)

     4.3     -10.3
  

 

 

   

 

 

 

Earnings from continuing operations

     8.1     19.7

Earnings (loss) from discontinued operations, net of tax

     -0.1     7.1
  

 

 

   

 

 

 

Net earnings

     8.0     26.8

Less: Loss attributable to noncontrolling interests

     0.0     -0.3
  

 

 

   

 

 

 

Net earnings attributable to Motorola Solutions, Inc.

     8.0     27.1
  

 

 

   

 

 

 

 

* Percentages may not add up due to rounding


GAAP- 2

 

Motorola Solutions, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In millions)

 

     March 31,      December 31,  
     2012      2011  

Assets

     

Cash and cash equivalents

   $ 1,720       $ 1,881   

Sigma Fund and short-term investments

     2,047         3,210   

Accounts receivable, net

     1,717         1,866   

Inventories, net

     471         512   

Deferred income taxes

     640         613   

Other current assets

     772         676   

Current assets held for disposition

     10         10   
  

 

 

    

 

 

 

Total current assets

     7,377         8,768   
  

 

 

    

 

 

 

Property, plant and equipment, net

     874         896   

Investments

     168         166   

Deferred income taxes

     2,318         2,375   

Goodwill

     1,430         1,428   

Other assets

     274         294   

Non-current assets held for disposition

     2         2   
  

 

 

    

 

 

 

Total assets

   $       12,443       $       13,929   
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Current portion of long-term debt

   $ 404       $ 405   

Accounts payable

     594         677   

Accrued liabilities

     2,573         2,721   

Current liabilities held for disposition

     12         12   
  

 

 

    

 

 

 

Total current liabilities

     3,583         3,815   
  

 

 

    

 

 

 

Long-term debt

     1,126         1,130   

Other liabilities

     3,624         3,710   

Total Motorola Solutions, Inc. stockholders’ equity

     4,085         5,214   
  

 

 

    

 

 

 

Noncontrolling interests

     25         60   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 12,443       $ 13,929   
  

 

 

    

 

 

 

Total cash*

   $ 3,767       $ 5,091   

Net cash**

     2,237         3,556   

 

* Total cash = Cash and cash equivalents + Sigma Fund + Short-term investments
** Net cash = Total cash—Notes payable and current portion of long-term debt—Long-term debt


GAAP- 3

 

Motorola Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In millions)

 

     Three Months Ended  
     March 31, 2012     April 2, 2011  

Operating

    

Net earnings attributable to Motorola Solutions, Inc.

   $ 157      $ 497   

Loss attributable to noncontrolling interests

     —          (6
  

 

 

   

 

 

 

Net earnings

     157        491   

Earnings (loss) from discontinued operations, net of tax

     (2     130   
  

 

 

   

 

 

 

Earnings from continuing operations

     159        361   

Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities:

    

Depreciation and amortization

     53        91   

Non-cash other expense (income)

     1        (8

Share-based compensation expense

     43        39   

Gain on sales of investments and businesses, net

     (17     (18

Deferred income taxes

     27        (114

Changes in assets and liabilities, net of effects of acquisitions and dispositions:

    

Accounts receivable

     141        175   

Inventories

     9        (10

Other current assets

     (100     (13

Accounts payable and accrued liabilities

     (249     (221

Other assets and liabilities

     2        (49
  

 

 

   

 

 

 

Net cash provided by operating activities from continuing operations

     69        233   
  

 

 

   

 

 

 

Investing

    

Acquisitions and investments, net

     92        —     

Proceeds from (used for) sales of investments and businesses, net

     (54     52   

Capital expenditures

     (49     (27

Proceeds from sales of property, plant and equipment

     —          1   

Proceeds from purchases of Sigma Fund investments, net

     1,163        1,241   
  

 

 

   

 

 

 

Net cash provided by investing activities from continuing operations

     1,152        1,267   
  

 

 

   

 

 

 

Financing

    

Repayment of debt

     (1     —     

Contribution to Motorola Mobility

     —          (3,200

Issuance of common stock

     30        70   

Purchase of common stock

     (1,365     —     

Excess tax benefits from share-based compensation

     6        —     

Payment of dividends

     (70     —     

Distribution from (to) discontinued operations

     (11     209   
  

 

 

   

 

 

 

Net cash provided by used for financing activities from continuing operations

     (1,411     (2,921
  

 

 

   

 

 

 

Discontinued Operations

    

Net cash provided by operating activities from discontinued operations

     2        189   

Net cash used for investing activities from discontinued operations

     —          (6

Net cash provided by (used for) financing activities from discontinued operations

     11        (209

Effect of exchange rate changes on cash and cash equivalents from discontinued operations

     (13     26   
  

 

 

   

 

 

 

Net cash provided by (used for) financing activities from discontinued operations

     —          —     
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents from continuing operations

     29        (23
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (161     (1,444

Cash and cash equivalents, beginning of period

     1,881        4,208   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 1,720      $ 2,764   

Financial Ratios:

    

Free cash flow*

   $ 20      $ 206   

 

* Free cash flow = Net cash provided by operating activities—Capital expenditures


GAAP- 4

 

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 March 31, 2012 and April 2, 2011.

Net Sales

 

     Three Months Ended         
     March 31, 2012      April 2, 2011      % Change  

Government

   $ 1,301       $ 1,167         11

Enterprise

     655         667         -2
  

 

 

    

 

 

    

Company Total

   $ 1,956       $ 1,834         7

Operating Earnings

 

     Three Months Ended         
     March 31, 2012      April 2, 2011      % Change  

Government

   $ 150       $ 99         52

Enterprise

     82         70         17
  

 

 

    

 

 

    

Company Total

   $ 232       $ 169         37


Non-GAAP-1

 

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Adjustments (Intangibles Amortization Expense, Stock-Based Compensation Expense and Highlighted Items)

Q1 2012

 

Highlighted Items

  

Statement Line

   PBT
(Inc)/Exp
    Tax
Inc/(Exp)
    PAT
(Inc)/Exp
    EPS impact  

Intangibles amortization expense

   Intangibles amortization    $ 6      $ 2      $ 4        0.01   

Stock-based compensation expense

   Cost of sales, SG&A and R&D      43        13        30        0.09   

Reorganization of business charges

  

Cost of sales and Other charges

    (income)

     9        3        6        0.02   

Gain on equity investments

  

Gain on sales of investments and

    businesses, net

     (16     (6     (10     (0.03
     

 

 

   

 

 

   

 

 

   

 

 

 

Total continuing operations impact

      $ 42      $ 12      $ 30      $ 0.09   


Non-GAAP-2

 

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Segment Information

(In millions)

Net Sales

 

     Three Months Ended         
     March 31, 2012      April 2, 2011      % Change  

Government

   $ 1,301       $ 1,167         11

Enterprise

     655         667         -2
  

 

 

    

 

 

    

Company Total

   $ 1,956       $ 1,834         7

Non-GAAP Operating Earnings

 

     Three Months Ended         
     March 31, 2012      April 2, 2011      % Change  

Government

   $ 184       $ 134         37

Enterprise

     106         132         -20
  

 

 

    

 

 

    

Company Total

   $ 290       $ 266         9

Non-GAAP Operating Earnings %

 

     Three Months Ended        
     March 31, 2012     April 2, 2011     % Change  

Government

     14.1     11.5     23

Enterprise

     16.2     19.8     -18
  

 

 

   

 

 

   

Company Total

     14.8     14.5     2


Non-GAAP-3

 

Motorola Solutions, Inc. and Subsidiaries

Operating Earnings after Non-GAAP Adjustments

Q1 2012

 

     TOTAL     Government     Enterprise  

Net sales

   $ 1,956      $ 1,301      $ 655   

Operating earnings

   $ 232      $ 150      $ 82   
  

 

 

   

 

 

   

 

 

 

Above-OE non-GAAP adjustments:

      

Stock-based compensation expense

     43        27        16   

Reorganization of business charges

     9        7        2   

Intangibles amortization expense

     6        —          6   
  

 

 

   

 

 

   

 

 

 

Total above-OE non-GAAP adjustments

     58        34        24   
  

 

 

   

 

 

   

 

 

 

Operating earnings after non-GAAP adjustments

   $ 290      $ 184      $ 106   

Operating earnings as a percentage of net sales—GAAP

     11.9     11.5     12.5

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

     14.8     14.1     16.2


Motorola Solutions, Inc. and Subsidiaries

Backlog Information

(In millions)

During the first quarter of 2012, the Company has changed its methodology for reporting backlog. Prior to the first quarter of 2012, the Company excluded service orders such as maintenance and extended warranty contracts from backlog. Additionally, certain product and system installation labor orders that were for delivery beyond a certain time frame, typically 18 months, were excluded from backlog. Our new methodology now includes all service, product, and system installation orders that have been received, and are believed to be firm. Under the “Current Method,” as shown below, 39% of the Government backlog and 79% of the Enterprise backlog as of March 31, 2012 were expected to be recognized as revenue in the next 12 months, although the Company cannot give any assurances of such fulfillment.

The Company’s backlog under the previous method and current method as of March 31, 2012 and December 31, 2011 was as follows:

 

March 31, 2012

   Previous
Method
     Current
Method
 

Government

   $ 2,096       $ 5,076   

Enterprise

     520         954   
  

 

 

    

 

 

 
   $ 2,616       $ 6,030   

 

December 31, 2011

   Previous
Method
     Current
Method
 

Government

   $ 2,005       $ 4,426   

Enterprise

     478         875   
  

 

 

    

 

 

 
   $ 2,483       $ 5,301