DEFINITIONS
1 Free cash flow represents operating cash flow less capital expenditures.
ABOUT MOTOROLA SOLUTIONS
Motorola Solutions (NYSE: MSI) is a technology company that provides mission-critical communications, software and video solutions that help build safer cities and thriving communities. Public safety and commercial customers globally depend on the company’s two-way radios, broadband technology, video surveillance and analytics solutions, services and software to keep them connected, from extreme to everyday moments. Learn more at http://www.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. ©2018 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 | ||||||||
| September 29, 2018 | September 30, 2017 | |||||||
| Net sales from products | $ | 1,151 | $ | 989 | ||||
| Net sales from services | 711 | 656 | ||||||
| Net sales | 1,862 | 1,645 | ||||||
| Costs of products sales | 516 | 428 | ||||||
| Costs of services sales | 445 | 423 | ||||||
| Costs of sales | 961 | 851 | ||||||
| Gross margin | 901 | 794 | ||||||
| Selling, general and administrative expenses | 323 | 259 | ||||||
| Research and development expenditures | 158 | 141 | ||||||
| Other charges | 80 | 8 | ||||||
| Intangibles amortization | 46 | 39 | ||||||
| Operating earnings | 294 | 347 | ||||||
| Other income (expense): | ||||||||
| Interest expense, net | (59 | ) | (52 | ) | ||||
| Gains on sales of investments and businesses, net | 6 | — | ||||||
| Other | 29 | (9 | ) | |||||
| Total other expense | (24 | ) | (61 | ) | ||||
| Net earnings before income taxes | 270 | 286 | ||||||
| Income tax expense | 22 | 73 | ||||||
| Net earnings | 248 | 213 | ||||||
| Less: Earnings attributable to noncontrolling interests | 1 | 1 | ||||||
| Net earnings attributable to Motorola Solutions, Inc. | $ | 247 | $ | 212 | ||||
|
Earnings per common share: |
||||||||
| Basic | $ | 1.52 | $ | 1.30 | ||||
| Diluted | $ | 1.43 | $ | 1.25 | ||||
|
Weighted average common shares outstanding: |
||||||||
| Basic | 162.6 | 162.3 | ||||||
| Diluted | 172.6 | 169.0 | ||||||
| Percentage of Net Sales* | ||||||||
| Net sales from products | 61.8 | % | 60.1 | % | ||||
| Net sales from services | 38.2 | % | 39.9 | % | ||||
| Net sales | 100.0 | % | 100.0 | % | ||||
| Costs of products sales | 44.8 | % | 43.3 | % | ||||
| Costs of services sales | 62.6 | % | 64.5 | % | ||||
| Costs of sales | 51.6 | % | 51.7 | % | ||||
| Gross margin | 48.4 | % | 48.3 | % | ||||
| Selling, general and administrative expenses | 17.3 | % | 15.7 | % | ||||
| Research and development expenditures | 8.5 | % | 8.6 | % | ||||
| Other charges | 4.3 | % | 0.5 | % | ||||
| Intangibles amortization | 2.5 | % | 2.4 | % | ||||
| Operating earnings | 15.8 | % | 21.1 | % | ||||
| Other income (expense): | ||||||||
| Interest expense, net | (3.2 | )% | (3.2 | )% | ||||
| Gains on sales of investments and businesses, net | 0.3 | % | — | % | ||||
| Other | 1.6 | % | (0.5 | )% | ||||
| Total other expense | (1.3 | )% | (3.7 | )% | ||||
| Net earnings before income taxes | 14.5 | % | 17.4 | % | ||||
| Income tax expense | 1.2 | % | 4.4 | % | ||||
| Net earnings | 13.3 | % | 12.9 | % | ||||
| Less: Earnings attributable to noncontrolling interests | 0.1 | % | 0.1 | % | ||||
| Net earnings attributable to Motorola Solutions, Inc. | 13.3 | % | 12.9 | % | ||||
| * Percentages may not add up due to rounding | ||||||||
| GAAP-2 | ||||||||
|
Motorola Solutions, Inc. and Subsidiaries |
||||||||
|
Condensed Consolidated Statements of Operations |
||||||||
|
(In millions, except per share amounts) |
||||||||
| Nine Months Ended | ||||||||
| September 29, 2018 | September 30, 2017 | |||||||
| Net sales from products | $ | 2,993 | $ | 2,540 | ||||
| Net sales from services | 2,096 | 1,883 | ||||||
| Net sales | 5,089 | 4,423 | ||||||
| Costs of products sales | 1,383 | 1,167 | ||||||
| Costs of services sales | 1,314 | 1,202 | ||||||
| Costs of sales | 2,697 | 2,369 | ||||||
| Gross margin | 2,392 | 2,054 | ||||||
| Selling, general and administrative expenses | 918 | 760 | ||||||
| Research and development expenditures | 472 | 413 | ||||||
| Other charges | 123 | (11 | ) | |||||
| Intangibles amortization | 140 | 111 | ||||||
| Operating earnings | 739 | 781 | ||||||
| Other income (expense): | ||||||||
| Interest expense, net | (163 | ) | (154 | ) | ||||
| Gains on sales of investments and businesses, net | 16 | 3 | ||||||
| Other | 45 | (20 | ) | |||||
| Total other expense | (102 | ) | (171 | ) | ||||
| Net earnings before income taxes | 637 | 610 | ||||||
| Income tax expense | 91 | 188 | ||||||
| Net earnings | 546 | 422 | ||||||
| Less: Earnings attributable to noncontrolling interests | 2 | 2 | ||||||
| Net earnings attributable to Motorola Solutions, Inc. | $ | 544 | $ | 420 | ||||
|
Earnings per common share: |
||||||||
| Basic | $ | 3.36 | $ | 2.57 | ||||
| Diluted | $ | 3.17 | $ | 2.48 | ||||
|
Weighted average common shares outstanding: |
||||||||
| Basic | 162.0 | 163.2 | ||||||
| Diluted | 171.6 | 169.3 | ||||||
| Percentage of Net Sales* | ||||||||
| Net sales from products | 58.8 | % | 57.4 | % | ||||
| Net sales from services | 41.2 | % | 42.6 | % | ||||
| Net sales | 100.0 | % | 100.0 | % | ||||
| Costs of products sales | 46.2 | % | 45.9 | % | ||||
| Costs of services sales | 62.7 | % | 63.8 | % | ||||
| Costs of sales | 53.0 | % | 53.6 | % | ||||
| Gross margin | 47.0 | % | 46.4 | % | ||||
| Selling, general and administrative expenses | 18.0 | % | 17.2 | % | ||||
| Research and development expenditures | 9.3 | % | 9.3 | % | ||||
| Other charges | 2.4 | % | (0.2 | )% | ||||
| Intangibles amortization | 2.8 | % | 2.5 | % | ||||
| Operating earnings | 14.5 | % | 17.7 | % | ||||
| Other income (expense): | ||||||||
| Interest expense, net | (3.2 | )% | (3.5 | )% | ||||
| Gains on sales of investments and businesses, net | 0.3 | % | 0.1 | % | ||||
| Other | 0.9 | % | (0.5 | )% | ||||
| Total other expense | (2.0 | )% | (3.9 | )% | ||||
| Net earnings before income taxes | 12.5 | % | 13.8 | % | ||||
| Income tax expense | 1.8 | % | 4.3 | % | ||||
| Net earnings attributable to Motorola Solutions, Inc. | 10.7 | % | 9.5 | % | ||||
| * Percentages may not add up due to rounding | ||||||||
| GAAP-3 | ||||||||
| Motorola Solutions, Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (In millions) | ||||||||
| September 29, 2018 | December 31, 2017 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 839 | $ | 1,205 | ||||
| Restricted cash | 12 | 63 | ||||||
| Total cash and cash equivalents | 851 | 1,268 | ||||||
| Accounts receivable, net | 1,179 | 1,523 | ||||||
| Contract assets | 917 | — | ||||||
| Inventories, net | 367 | 327 | ||||||
| Other current assets | 350 | 832 | ||||||
| Total current assets | 3,664 | 3,950 | ||||||
| Property, plant and equipment, net | 892 | 856 | ||||||
| Investments | 176 | 247 | ||||||
| Deferred income taxes | 949 | 1,023 | ||||||
| Goodwill | 1,541 | 938 | ||||||
| Intangible Assets | 1,297 | 861 | ||||||
| Other assets | 444 | 333 | ||||||
| Total assets | $ | 8,963 | $ | 8,208 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current portion of long-term debt | $ | 337 | $ | 52 | ||||
| Accounts payable | 456 | 593 | ||||||
| Contract liabilities | 1,127 | — | ||||||
| Accrued liabilities | 1,168 | 2,286 | ||||||
| Total current liabilities | 3,088 | 2,931 | ||||||
| Long-term debt | 5,095 | 4,419 | ||||||
| Other liabilities | 2,175 | 2,585 | ||||||
| Total Motorola Solutions, Inc. stockholders’ equity (deficit) | (1,411 | ) | (1,742 | ) | ||||
| Noncontrolling interests | 16 | 15 | ||||||
| Total liabilities and stockholders’ equity | $ | 8,963 | $ | 8,208 | ||||
| GAAP-4 | ||||||||
| Motorola Solutions, Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (In millions) | ||||||||
| Three Months Ended | ||||||||
| September 29, 2018 | September 30, 2017 | |||||||
| Operating | ||||||||
| Net earnings attributable to Motorola Solutions, Inc. | $ | 247 | $ | 212 | ||||
| Earnings attributable to noncontrolling interests | 1 | 1 | ||||||
| Net earnings | 248 | 213 | ||||||
| Adjustments to reconcile Net earnings to Net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 89 | 88 | ||||||
| Non-cash other charges | 44 | 8 | ||||||
| Non-U.S. pension settlement loss | — | 21 | ||||||
| Share-based compensation expense | 19 | 16 | ||||||
| Gains on sales of investments and businesses, net | (6 | ) | — | |||||
| Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | ||||||||
| Accounts receivable, contract assets and contract liabilities | (20 | ) | (152 | ) | ||||
| Inventories | 24 | 29 | ||||||
| Other current assets | (180 | ) | (129 | ) | ||||
| Accounts payable and accrued liabilities | 170 | 152 | ||||||
| Other assets and liabilities | (38 | ) | (12 | ) | ||||
| Deferred income taxes | (12 | ) | 36 | |||||
| Net cash provided by operating activities | 338 | 270 | ||||||
| Investing | ||||||||
| Acquisitions and investments, net | (5 | ) | (243 | ) | ||||
| Proceeds from sales of investments and businesses, net | 11 | 102 | ||||||
| Capital expenditures | (46 | ) | (85 | ) | ||||
| Net cash used for investing activities | (40 | ) | (226 | ) | ||||
| Financing | ||||||||
| Repayment of debt | (215 | ) | (9 | ) | ||||
| Issuance of common stock | 80 | 33 | ||||||
| Purchases of common stock | — | (100 | ) | |||||
| Payments of dividends | (84 | ) | (76 | ) | ||||
| Settlement of conversion premium on convertible debt | (169 | ) | — | |||||
| Net cash used for financing activities | (388 | ) | (152 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | — | 20 | ||||||
| Net decrease in cash and cash equivalents | (90 | ) | (88 | ) | ||||
| Cash and cash equivalents, beginning of period | 941 | 805 | ||||||
| Cash and cash equivalents, end of period | $ | 851 | $ | 717 | ||||
| Financial Ratios: | ||||||||
| Free cash flow* | $ | 292 | $ | 185 | ||||
| *Free cash flow = Net cash provided by operating activities - Capital Expenditures | ||||||||
| GAAP-5 | ||||||||
| Motorola Solutions, Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (In millions) | ||||||||
| Nine Months Ended | ||||||||
| September 29, 2018 | September 30, 2017 | |||||||
| Operating | ||||||||
| Net earnings attributable to Motorola Solutions, Inc. | $ | 544 | $ | 420 | ||||
| Earnings attributable to noncontrolling interests | 2 | 2 | ||||||
| Net earnings | 546 | 422 | ||||||
| Adjustments to reconcile Net earnings to Net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 267 | 254 | ||||||
| Non-cash other charges | 50 | 29 | ||||||
| Non-U.S. pension settlement loss | — | 46 | ||||||
| Share-based compensation expense | 53 | 49 | ||||||
| Gains on sales of investments and businesses, net | (16 | ) | (3 | ) | ||||
| Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | ||||||||
| Accounts receivable, contract assets and contract liabilities | 186 | 81 | ||||||
| Inventories | 61 | (83 | ) | |||||
| Other current assets | (137 | ) | (142 | ) | ||||
| Accounts payable and accrued liabilities | (170 | ) | (178 | ) | ||||
| Other assets and liabilities | (596 | ) | 11 | |||||
| Deferred income taxes | 19 | 99 | ||||||
| Net cash provided by operating activities | 263 | 585 | ||||||
| Investing | ||||||||
| Acquisitions and investments, net | (1,158 | ) | (383 | ) | ||||
| Proceeds from sales of investments and businesses, net | 90 | 174 | ||||||
| Capital expenditures | (128 | ) | (206 | ) | ||||
| Net cash used for investing activities | (1,196 | ) | (415 | ) | ||||
| Financing | ||||||||
| Repayment of debt | (412 | ) | (15 | ) | ||||
| Net proceeds from issuance of debt | 1,295 | — | ||||||
| Proceeds from financing through capital leases | — | 7 | ||||||
| Issuance of common stock | 139 | 61 | ||||||
| Purchases of common stock | (66 | ) | (358 | ) | ||||
| Payments of dividends | (252 | ) | (230 | ) | ||||
| Payments of dividend to non-controlling interest | (1 | ) | (2 | ) | ||||
| Settlement of conversion premium on convertible debt | (169 | ) | — | |||||
| Net cash provided by (used for) financing activities | 534 | (537 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (18 | ) | 54 | |||||
| Net decrease in cash and cash equivalents | (417 | ) | (313 | ) | ||||
| Cash and cash equivalents, beginning of period | 1,268 | 1,030 | ||||||
| Cash and cash equivalents, end of period | $ | 851 | $ | 717 | ||||
| Financial Ratios: | ||||||||
| Free cash flow* | $ | 135 | $ | 379 | ||||
| *Free cash flow = Net cash provided by operating activities - Capital Expenditures | ||||||||
| GAAP-6 | ||||||||||||
| Motorola Solutions, Inc. and Subsidiaries | ||||||||||||
| Segment Information | ||||||||||||
| (In millions) | ||||||||||||
| Net Sales | ||||||||||||
| Three Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | % Change | ||||||||||
| Products and systems integration | $ | 1,288 | $ | 1,174 | 10 | % | ||||||
| Services and software | 574 | 471 | 22 | % | ||||||||
| Total Motorola Solutions | $ | 1,862 | $ | 1,645 | 13 | % | ||||||
| Nine Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | % Change | ||||||||||
| Products and systems integration | $ | 3,429 | $ | 3,076 | 11 | % | ||||||
| Services and software | 1,660 | 1,347 | 23 | % | ||||||||
| Total Motorola Solutions | $ | 5,089 | $ | 4,423 | 15 | % | ||||||
| Operating Earnings | ||||||||||||
| Three Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | % Change | ||||||||||
| Products and systems integration | $ | 183 | $ | 266 | (31 | )% | ||||||
| Services and software | 111 | 81 | 37 | % | ||||||||
| Total Motorola Solutions | $ | 294 | $ | 347 | (15 | )% | ||||||
| Nine Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | % Change | ||||||||||
| Products and systems integration | $ | 449 | $ | 553 | (19 | )% | ||||||
| Services and software | 290 | 228 | 27 | % | ||||||||
| Total Motorola Solutions | $ | 739 | $ | 781 | (5 | )% | ||||||
| Operating Earnings % | ||||||||||||
| Three Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | |||||||||||
| Products and systems integration | 14.2 | % | 22.7 | % | ||||||||
| Services and software | 19.3 | % | 17.2 | % | ||||||||
| Total Motorola Solutions | 15.8 | % | 21.1 | % | ||||||||
| Nine Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | |||||||||||
| Products and systems integration | 13.1 | % | 18.0 | % | ||||||||
| Services and software | 17.5 | % | 16.9 | % | ||||||||
| Total Motorola Solutions | 14.5 | % | 17.7 | % | ||||||||
|
Non-GAAP-1 |
||||||||||||||||||
| Motorola Solutions, Inc. and Subsidiaries | ||||||||||||||||||
| Non-GAAP Adjustments (Intangibles Amortization Expense, Share-Based Compensation Expense and Highlighted Items) | ||||||||||||||||||
| Q1 2018 | ||||||||||||||||||
| Non-GAAP Adjustments | Statement Line |
PBT (Inc)/Exp |
Tax Inc/(Exp) |
PAT (Inc)/Exp |
EPS impact | |||||||||||||
| Share-based compensation expense | Cost of sales, SG&A and R&D | $ | 17 | $ | 4 | $ | 13 | $ | 0.08 | |||||||||
| Reorganization of business charges | Cost of sales and Other charges | 13 | 3 | 10 | 0.06 | |||||||||||||
| Intangibles amortization expense | Intangibles amortization | 41 | 8 | 33 | 0.19 | |||||||||||||
| Loss on legal settlements | Other charges | 1 | — | 1 | 0.01 | |||||||||||||
| Loss on derivative instruments related to Avigilon purchase | Other expense | 14 | 4 | 10 | 0.06 | |||||||||||||
| Release of FIN 48 reserve | Income tax expense | — | 1 | (1 | ) | (0.01 | ) | |||||||||||
| Sale of investments | (Gain) or Loss on Sales of Investments and Businesses, net | (11 | ) | (3 | ) | (8 | ) | (0.05 | ) | |||||||||
| Acquisition-related transaction fees | Other charges | 17 | 5 | 12 | 0.07 | |||||||||||||
| Total impact on Net earnings | $ | 92 | $ | 22 | $ | 70 | $ | 0.41 | ||||||||||
| Q2 2018 | ||||||||||||||||||
| Non-GAAP Adjustments | Statement Line |
PBT (Inc)/Exp |
Tax Inc/(Exp) |
PAT (Inc)/Exp |
EPS impact | |||||||||||||
| Share-based compensation expense | Cost of sales, SG&A and R&D | $ | 17 | $ | 4 | $ | 13 | $ | 0.08 | |||||||||
| Reorganization of business charges | Cost of sales and Other charges | 25 | 6 | 19 | 0.10 | |||||||||||||
| Intangibles amortization expense | Intangibles amortization | 53 | 12 | 41 | 0.23 | |||||||||||||
| Avigilon purchase accounting adjustment | Cost of sales | 10 | 3 | 7 | 0.04 | |||||||||||||
| Sale of investments | (Gain) or Loss on Sales of Investments and Businesses, net | 1 | — | 1 | 0.01 | |||||||||||||
| Loss on foreign currency related to Avigilon purchase | Other expense | 1 | — | 1 | 0.01 | |||||||||||||
| FIN 48 reserve | Income tax expense | — | (1 | ) | 1 | 0.01 | ||||||||||||
| State audit settlement | Income tax expense | — | 12 | (12 | ) | (0.07 | ) | |||||||||||
| Total impact on Net earnings | $ | 107 | $ | 36 | $ | 71 | $ | 0.41 | ||||||||||
| Q3 2018 | ||||||||||||||||||
| Non-GAAP Adjustments | Statement Line |
PBT (Inc)/Exp |
Tax Inc/(Exp) |
PAT (Inc)/Exp |
EPS impact | |||||||||||||
| Share-based compensation expense | Cost of sales, SG&A and R&D | $ | 19 | $ | 5 | $ | 14 | $ | 0.08 | |||||||||
| Reorganization of business charges | Cost of sales and Other charges | 25 | 6 | 19 | 0.11 | |||||||||||||
| Intangibles amortization expense | Intangibles amortization | 46 | 10 | 36 | 0.21 | |||||||||||||
| Avigilon purchase accounting adjustment | Cost of sales | 9 | 2 | 7 | 0.04 | |||||||||||||
| Gain from the extinguishment of convertible debt | Other income | (6 | ) | — | (6 | ) | (0.03 | ) | ||||||||||
| Fair value adjustments to equity investments | Other income | (7 | ) | (2 | ) | (5 | ) | (0.03 | ) | |||||||||
| Loss on legal settlement | Other charges | 2 | 1 | 1 | 0.01 | |||||||||||||
| Environmental reserve expense | Other charges | 57 | 14 | 43 | 0.25 | |||||||||||||
| Sale of investments | (Gain) or Loss on Sales of Investments and Businesses, net | (6 | ) | (1 | ) | (5 | ) | (0.03 | ) | |||||||||
| Return-to-provision adjustments as related to federal tax reform | Income tax expense | — | 16 | (16 | ) | (0.10 | ) | |||||||||||
| Total impact on Net earnings | $ | 139 | $ | 51 | $ | 88 | $ | 0.51 | ||||||||||
| Non-GAAP-2 | ||||||||||||
| Motorola Solutions, Inc. and Subsidiaries | ||||||||||||
| Non-GAAP Segment Information | ||||||||||||
| (In millions) | ||||||||||||
| Net Sales | ||||||||||||
| Three Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | % Change | ||||||||||
|
Products and systems integration |
$ | 1,288 | $ | 1,174 | 10 | % | ||||||
| Services and software | 574 | 471 | 22 | % | ||||||||
| Total Motorola Solutions | $ | 1,862 | $ | 1,645 | 13 | % | ||||||
| Nine Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | % Change | ||||||||||
| Products and systems integration | $ | 3,429 | $ | 3,076 | 11 | % | ||||||
| Services and software | 1,660 | 1,347 | 23 | % | ||||||||
| Total Motorola Solutions | $ | 5,089 | $ | 4,423 | 15 | % | ||||||
| Non-GAAP Operating Earnings | ||||||||||||
| Three Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | % Change | ||||||||||
| Products and systems integration | $ | 276 | $ | 285 | (3 | )% | ||||||
| Services and software | 176 | 127 | 39 | % | ||||||||
| Total Motorola Solutions | $ | 452 | $ | 412 | 10 | % | ||||||
| Nine Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | % Change | ||||||||||
| Products and systems integration | $ | 627 | $ | 591 | 6 | % | ||||||
| Services and software | 463 | 349 | 33 | % | ||||||||
| Total Motorola Solutions | $ | 1,090 | $ | 940 | 16 | % | ||||||
| Non-GAAP Operating Earnings % | ||||||||||||
| Three Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | |||||||||||
| Products and systems integration | 21.4 | % | 24.3 | % | ||||||||
| Services and software | 30.7 | % | 27.0 | % | ||||||||
| Total Motorola Solutions | 24.3 | % | 25.0 | % | ||||||||
| Nine Months Ended | ||||||||||||
| September 29, 2018 | September 30, 2017 | |||||||||||
| Products and systems integration | 18.3 | % | 19.2 | % | ||||||||
| Services and software | 27.9 | % | 25.9 | % | ||||||||
| Total Motorola Solutions | 21.4 | % | 21.3 | % | ||||||||
| Non-GAAP-3 | ||||||||||||
| Motorola Solutions, Inc. and Subsidiaries | ||||||||||||
| Operating Earnings after Non-GAAP Adjustments | ||||||||||||
| Q1 2018 | ||||||||||||
| TOTAL |
Products and Systems Integration |
Services and Software |
||||||||||
| Net sales | $ | 1,468 | $ | 952 | $ | 516 | ||||||
| Operating earnings ("OE") | $ | 171 | $ | 90 | $ | 81 | ||||||
| Above-OE non-GAAP adjustments: | ||||||||||||
| Share-based compensation expense | 17 | 12 | 5 | |||||||||
| Reorganization of business charges | 13 | 9 | 4 | |||||||||
| Intangibles amortization expense | 41 | 1 | 40 | |||||||||
| Acquisition-related transaction fees | 17 | 12 | 5 | |||||||||
| Loss on legal settlements | 1 | 1 | — | |||||||||
| Total above-OE non-GAAP adjustments | 89 | 35 | 54 | |||||||||
| Operating earnings after non-GAAP adjustments | $ | 260 | $ | 125 | $ | 135 | ||||||
| Operating earnings as a percentage of net sales - GAAP | 11.6 | % | 9.5 | % | 15.7 | % | ||||||
| Operating earnings as a percentage of net sales - after non-GAAP adjustments | 17.7 | % | 13.1 | % | 26.2 | % | ||||||
| Q2 2018 | ||||||||||||
| TOTAL |
Products and Systems Integration |
Services and Software |
||||||||||
| Net sales | $ | 1,760 | $ | 1,189 | $ | 571 | ||||||
| Operating earnings ("OE") | $ | 273 | $ | 175 | $ | 98 | ||||||
| Above-OE non-GAAP adjustments: | ||||||||||||
| Share-based compensation expense | 17 | 12 | 5 | |||||||||
| Reorganization of business charges | 25 | 19 | 6 | |||||||||
| Intangibles amortization expense | 53 | 10 | 43 | |||||||||
| Avigilon purchase accounting adjustment | 10 | 10 | — | |||||||||
| Total above-OE non-GAAP adjustments | 105 | 51 | 54 | |||||||||
| Operating earnings after non-GAAP adjustments | $ | 378 | $ | 226 | $ | 152 | ||||||
| Operating earnings as a percentage of net sales - GAAP | 15.5 | % | 14.7 | % | 17.2 | % | ||||||
| Operating earnings as a percentage of net sales - after non-GAAP adjustments | 21.5 | % | 19.0 | % | 26.6 | % | ||||||
| Q3 2018 | ||||||||||||
| TOTAL |
Products and Systems Integration |
Services and Software |
||||||||||
| Net sales | $ | 1,862 | $ | 1,288 | $ | 574 | ||||||
| Operating earnings ("OE") | $ | 294 | $ | 183 | $ | 111 | ||||||
| Above-OE non-GAAP adjustments: | ||||||||||||
| Share-based compensation expense | 19 | 13 | 6 | |||||||||
| Reorganization of business charges | 25 | 19 | 6 | |||||||||
| Intangibles amortization expense | 46 | 11 | 35 | |||||||||
| Avigilon purchase accounting adjustment | 9 | 9 | — | |||||||||
| Loss on legal settlement | 2 | 1 | 1 | |||||||||
| Environmental reserve expense | 57 | 40 | 17 | |||||||||
| Total above-OE non-GAAP adjustments | 158 | 93 | 65 | |||||||||
| Operating earnings after non-GAAP adjustments | $ | 452 | $ | 276 | $ | 176 | ||||||
| Operating earnings as a percentage of net sales - GAAP | 15.8 | % | 14.2 | % | 19.3 | % | ||||||
| Operating earnings as a percentage of net sales - after non-GAAP adjustments | 24.3 | % | 21.4 | % | 30.7 | % | ||||||
| Non-GAAP-4 | |||||||||||
| Motorola Solutions, Inc. and Subsidiaries | |||||||||||
| Non-GAAP Organic Revenue | |||||||||||
| Total Motorola Solutions | |||||||||||
| Three Months Ended | |||||||||||
| September 29, 2018 | September 30, 2017 | % Change | |||||||||
| Net sales | $ | 1,862 | $ | 1,645 | 13 | % | |||||
| Non-GAAP adjustments: | |||||||||||
| Acquisitions | (149 | ) | (4 | ) | |||||||
| ASC 606 impact | (19 | ) | — | ||||||||
| Organic revenue | 1,694 | 1,641 | 3 | % | |||||||
| Less foreign exchange impact | 9 | — | |||||||||
| Organic revenue in constant currency | $ | 1,703 | $ | 1,641 | 4 | % | |||||
| Nine Months Ended | |||||||||||
| September 29, 2018 | September 30, 2017 | % Change | |||||||||
| Net sales | $ | 5,089 | $ | 4,423 | 15 | % | |||||
| Non-GAAP adjustments: | |||||||||||
| Acquisitions | (356 | ) | (9 | ) | |||||||
| ASC 606 impact | (58 | ) | — | ||||||||
| Organic revenue | 4,675 | 4,414 | 6 | % | |||||||
| Less foreign exchange impact | (56 | ) | — | ||||||||
| Organic revenue in constant currency | $ | 4,619 | $ | 4,414 | 5 | % | |||||
