Motorola Solutions, Inc 8-K, filed Nov 4, 2021

Motorola Solutions, Inc. (MSI)

8-K 2021-11-04 For: 2021-11-04

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Added on April 03, 2026

About this 8-K

Motorola Solutions, Inc filed this 8-K on November 4, 2021.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Date of report (Date of earliest event reported): November 4, 2021

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

Not applicable
(Former Name or Former Address, if Changed Since Last Report)


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Exhibit No.			Description
99.1			Press Release by Motorola Solutions, Inc. dated November 4, 2021 announcing financial results for the quarter ended October 2, 2021.
104			Cover Page Interactive Data File (embedded within the Inline XBRL document).


	MOTOROLA SOLUTIONS, INC. (Registrant)


Dated: November 4, 2021	By:	/s/ Dan Pekofske
		Name:	Dan Pekofske
		Title:	Corporate Vice President and Chief Accounting Officer


	Q3 2021		Q3 2020		% Change
Sales	$2,107		$1,868		13	%
GAAP
Operating Earnings	$451		$352		28	%
% of Sales	21.4	%	18.9	%
EPS	$1.76		$1.18		49	%
Non-GAAP*
Operating Earnings	$555		$463		20	%
% of Sales	26.3	%	24.8	%
EPS	$2.35		$1.95		21	%
Products and Systems Integration Segment
Sales	$1,325		$1,163		14	%
GAAP Operating Earnings	$224		$164		37	%
% of Sales	16.9	%	14.1	%
Non-GAAP Operating Earnings*	$273		$219		25	%
% of Sales	20.6	%	18.9	%
Software and Services Segment
Sales	$782		$705		11	%
GAAP Operating Earnings	$227		$188		21	%
% of Sales	29.1	%	26.7	%
Non-GAAP Operating Earnings*	$282		$244		16	%
% of Sales	36.0	%	34.6	%


	Q3 2021	Q3 2020
Net sales	$2,107	$1,868
Gross margin	$1,045	$909
Operating earnings	$451	$352
Amounts attributable to Motorola Solutions, Inc. common stockholders
Net earnings	$307	$205
Diluted EPS	$1.76	$1.18
Weighted average diluted common shares outstanding	174.1	173.5


(per diluted common share)			Q3 2021

GAAP EPS			$1.76
Highlighted Items:
Intangible assets amortization expense			$0.27
Share-based compensation expenses			0.16
Fair value adjustments to equity investments			0.08
Hytera-related legal expenses			0.04
Reorganization of business charges			0.02
Acquisition-related transaction fees			0.02
Adjustments to uncertain tax positions			0.01
Release of valuation allowance on deferred tax assets			(0.01)


Non-GAAP EPS			$2.35


	Three Months Ended
	October 2, 2021			September 26, 2020
Net sales from products	$	1,221		$	1,044
Net sales from services	886			824
Net sales	2,107			1,868
Costs of products sales	559			487
Costs of services sales	503			472
Costs of sales	1,062			959
Gross margin	1,045			909
Selling, general and administrative expenses	351			313
Research and development expenditures	183			175
Other charges	4			15
Intangibles amortization	56			54
Operating earnings	451			352
Other income (expense):
Interest expense, net	(56)			(58)
Loss on sales of investments and businesses, net	—			(1)
Other, net	10			(42)
Total other expense	(46)			(101)
Net earnings before income taxes	405			251
Income tax expense	97			45



Net earnings	308			206

Less: Earnings attributable to non-controlling interests	1			1
Net earnings attributable to Motorola Solutions, Inc.	$	307		$	205






Earnings per common share:
Basic	$	1.81		$	1.21




Diluted	$	1.76		$	1.18



Weighted average common shares outstanding:
Basic	169.2			169.7
Diluted	174.1			173.5

	Percentage of Net Sales*
Net sales from products	57.9		%	55.9		%
Net sales from services	42.1		%	44.1		%
Net sales	100.0		%	100.0		%
Costs of products sales	45.8		%	46.6		%
Costs of services sales	56.8		%	57.3		%
Costs of sales	50.4		%	51.3		%
Gross margin	49.6		%	48.7		%
Selling, general and administrative expenses	16.7		%	16.7		%
Research and development expenditures	8.7		%	9.4		%
Other charges	0.2		%	0.8		%
Intangibles amortization	2.7		%	2.9		%
Operating earnings	21.4		%	18.9		%
Other income (expense):
Interest expense, net	(2.7)		%	(3.1)		%
Loss on sales of investments and businesses, net	—		%	(0.1)		%
Other, net	0.5		%	(2.2)		%
Total other expense	(2.2)		%	(5.4)		%
Net earnings before income taxes	19.2		%	13.4		%
Income tax expense	4.6		%	2.4		%
Net earnings	14.6		%	11.0		%
Less: Earnings attributable to non-controlling interests	—		%	—		%
Net earnings attributable to Motorola Solutions, Inc.	14.6		%	11.0		%
* Percentages may not add up due to rounding


	Nine Months Ended
	October 2, 2021			September 26, 2020
Net sales from products	$	3,250		$	2,807
Net sales from services	2,601			2,334
Net sales	5,851			5,141
Costs of products sales	1,516			1,325
Costs of services sales	1,478			1,354
Costs of sales	2,994			2,679
Gross margin	2,857			2,462

Selling, general and administrative expenses	985			951
Research and development expenditures	545			505
Other charges	37			20
Intangibles amortization	172			158
Operating earnings	1,118			828

Other income (expense):
Interest expense, net	(154)			(167)
Loss on sales of investments and businesses, net	—			(1)
Other, net	70			(8)
Total other expense	(84)			(176)
Net earnings before income taxes	1,034			652
Income tax expense	186			112



Net earnings	848			540

Less: Earnings attributable to non-controlling interests	4			3
Net earnings attributable to Motorola Solutions, Inc.	$	844		$	537





Earnings per common share:

Basic	$	4.98		$	3.16




Diluted	$	4.87		$	3.08

Weighted average common shares outstanding:
Basic	169.3			170.1
Diluted	173.4			174.3

	Percentage of Net Sales*
Net sales from products	55.5		%	54.6		%
Net sales from services	44.5		%	45.4		%
Net sales	100.0		%	100.0		%
Costs of products sales	46.6		%	47.2		%
Costs of services sales	56.8		%	58.0		%
Costs of sales	51.2		%	52.1		%
Gross margin	48.8		%	47.9		%
Selling, general and administrative expenses	16.8		%	18.5		%
Research and development expenditures	9.3		%	9.8		%
Other charges	0.6		%	0.4		%
Intangibles amortization	2.9		%	3.1		%
Operating earnings	19.1		%	16.1		%
Other income (expense):
Interest expense, net	(2.6)		%	(3.3)		%
Loss on sales of investments and businesses, net	—		%	—		%
Other, net	1.2		%	(0.2)		%
Total other expense	(1.4)		%	(3.4)		%
Net earnings before income taxes	17.7		%	12.7		%
Income tax expense	3.2		%	2.2		%
Net earnings	14.5		%	10.5		%
Less: Earnings attributable to non-controlling interests	0.1		%	0.1		%
Net earnings attributable to Motorola Solutions, Inc.	14.4		%	10.4		%
* Percentages may not add up due to rounding


	October 2, 2021		December 31, 2020
Assets
Cash and cash equivalents	$	1,653	$	1,254
Accounts receivable, net	1,196		1,390
Contract assets	1,030		933
Inventories, net	604		508
Other current assets	252		242
Total current assets	4,735		4,327
Property, plant and equipment, net	1,021		1,022
Operating lease assets	405		468
Investments	214		158
Deferred income taxes	934		966
Goodwill	2,449		2,219
Intangible assets, net	1,134		1,234
Other assets	530		482
Total assets	$	11,422	$	10,876
Liabilities and Stockholders' Equity (Deficit)
Current portion of long-term debt	$	6	$	12
Accounts payable	620		612
Contract liabilities	1,538		1,554
Accrued liabilities	1,265		1,311
Total current liabilities	3,429		3,489
Long-term debt	5,687		5,163
Operating lease liabilities	321		402
Other liabilities	2,233		2,363
Total Motorola Solutions, Inc. stockholders’ equity (deficit)	(263)		(558)
Non-controlling interests	15		17
Total liabilities and stockholders’ equity (deficit)	$	11,422	$	10,876


Operating Earnings %

	Three Months Ended

	October 2, 2021		September 26, 2020
Products and Systems Integration	16.9	%	14.1	%
Software and Services	29.1	%	26.7	%
Total Motorola Solutions	21.4	%	18.9	%

	Nine Months Ended
	October 2, 2021		September 26, 2020
Products and Systems Integration	12.4	%	9.8	%
Software and Services	29.3	%	25.9	%
Total Motorola Solutions	19.1	%	16.1	%


Three Months Ended April 3, 2021
Non-GAAP Adjustments	Statement Line	PBT (Inc)/Exp		Tax Inc/(Exp)		PAT (Inc)/Exp		EPS Impact
Intangible assets amortization expense	Intangibles amortization	$	58	$	13	$	45	$	0.26
Share-based compensation expenses	Cost of sales, SG&A and R&D	29		6		23		0.13
Reorganization of business charges	Cost of sales and Other charges (income)	16		3		13		0.07
Operating lease asset impairments	Other charges (income)	7		1		6		0.03
Hytera-related legal expenses	SG&A	2		1		1		0.01
Acquisition-related transaction fees	Other charges (income)	1		—		1		0.01
Fair value adjustments to equity investments	Other income (expense)	(5)		(1)		(4)		(0.02)
Release of uncertain tax positions	Other income (expense)	(1)		4		(5)		(0.03)
Total impact on Net earnings		$	107	$	27	$	80	$	0.46

Three Months Ended July 3, 2021
Non-GAAP Adjustments	Statement Line	PBT (Inc)/Exp		Tax Inc/(Exp)		PAT (Inc)/Exp		EPS Impact
Intangible assets amortization expense	Intangibles amortization	$	58	$	9	$	49	$	0.28
Share-based compensation expenses	Cost of sales, SG&A and R&D	31		2		29		0.17
Loss from extinguishment of long-term debt	Other expense	18		4		14		0.08
Reorganization of business charges	Cost of sales and Other charges (income)	9		2		7		0.04
Hytera-related legal expenses	SG&A	8		1		7		0.04
Acquisition-related transaction fees	Other charges (income)	3		—		3		0.02
Legal settlements	Other charges (income)	3		1		2		0.01
Impact of tax law changes on deferred tax balances	Income tax expense	—		(2)		2		0.01
Fair value adjustments to equity investments	Other income	(8)		(2)		(6)		(0.03)
Adjustments to uncertain tax positions	Interest income, net and Income tax expense	(9)		(1)		(8)		(0.05)
Release of valuation allowance on deferred tax assets	Income tax expense	—		33		(33)		(0.19)
Total impact on Net earnings		$	113	$	47	$	66	$	0.38

Three Months Ended October 2, 2021
Non-GAAP Adjustments	Statement Line	PBT (Inc)/Exp		Tax Inc/(Exp)		PAT (Inc)/Exp		EPS impact
Intangible assets amortization expense	Intangibles amortization	$	56	$	9	$	47	$	0.27
Share-based compensation expenses	Cost of sales, SG&A and R&D	34		6		28		0.16
Fair value adjustments to equity investments	Other expense	18		4		14		0.08
Hytera-related legal expenses	SG&A	8		1		7		0.04
Reorganization of business charges	Cost of sales and Other charges (income)	4		—		4		0.02
Acquisition-related transaction fees	Other charges (income)	2		—		2		0.02
Adjustments to uncertain tax positions	Interest income, net and Income tax expense	1		—		1		0.01
Release of valuation allowance on deferred tax assets	Income tax expense	—		1		(1)		(0.01)
Total impact on Net earnings		$	123	$	21	$	102	$	0.59


Nine Months Ended October 2, 2021
Non-GAAP Adjustments	Statement Line	PBT (Inc)/Exp		Tax Inc/(Exp)		PAT (Inc)/Exp		EPS impact
Intangible assets amortization expense	Intangibles amortization	$	172	$	31	$	141	$	0.81
Share-based compensation expenses	Cost of sales, SG&A and R&D	94		14		80		0.46
Reorganization of business charges	Cost of sales and Other charges (income)	29		5		24		0.15
Hytera-related legal expenses	SG&A	18		3		15		0.09
Loss from extinguishment of long-term debt	Other expense	18		4		14		0.08
Acquisition-related transaction fees	Other charges (income)	6		—		6		0.03
Operating lease asset impairments	Other charges (income)	7		1		6		0.03
Fair value adjustments to equity investments	Other expense	5		1		4		0.02
Legal settlements	Other charges (income)	3		1		2		0.01
Impact of tax law changes on deferred tax balances	Income tax expense	—		(2)		2		0.01
Adjustments to uncertain tax positions	Interest income, net and Income tax expense	(9)		3		(12)		(0.07)
Release of valuation allowance on deferred tax assets	Income tax expense	—		34		(34)		(0.20)
Total impact on Net earnings		$	343	$	95	$	248	$	1.42


Non-GAAP Operating Earnings %
	Three Months Ended
	October 2, 2021		September 26, 2020
Products and Systems Integration	20.6	%	18.9	%
Software and Services	36.0	%	34.6	%
Total Motorola Solutions	26.3	%	24.8	%

	Nine Months Ended
	October 2, 2021		September 26, 2020
Products and Systems Integration	16.9	%	15.1	%
Software and Services	36.7	%	34.5	%
Total Motorola Solutions	24.7	%	22.7	%


Three Months Ended April 3, 2021
	TOTAL			Products and Systems Integration			Software and Services
Net sales	$	1,773		$	1,015		$	758
Operating earnings ("OE")	$	298		$	77		$	221
Above-OE non-GAAP adjustments:
Intangible assets amortization expense	58			13			45
Share-based compensation expenses	29			22			7
Reorganization of business charges	16			12			4
Operating lease asset impairment	7			5			2
Hytera-related legal expenses	2			2			—
Acquisition-related transaction fees	1			—			1
Total above-OE non-GAAP adjustments	113			54			59
Operating earnings after non-GAAP adjustments	$	411		$	131		$	280

Operating earnings as a percentage of net sales - GAAP	16.8		%	7.6		%	29.1		%
Operating earnings as a percentage of net sales - after non-GAAP adjustments	23.2		%	12.9		%	36.9		%

Three Months Ended July 3, 2021

	TOTAL			Products and Systems Integration			Software and Services
Net sales	$	1,971		$	1,198		$	773
Operating earnings ("OE")	$	370		$	139		$	231
Above-OE non-GAAP adjustments:
Intangible assets amortization expense	58			13			45
Share-based compensation expenses	31			24			7
Reorganization of business charges	9			7			2
Hytera-related legal expenses	8			8			—
Legal settlements	3			2			1
Acquisition-related transaction fees	3			1			2
Total above-OE non-GAAP adjustments	112			55			57
Operating earnings after non-GAAP adjustments	$	482		$	194		$	288

Operating earnings as a percentage of net sales - GAAP	18.8		%	11.6		%	29.9		%
Operating earnings as a percentage of net sales - after non-GAAP adjustments	24.4		%	16.2		%	37.2		%


	Three Months Ended
	October 2, 2021		September 26, 2020
Operating
Net earnings	$	308	$	206
Adjustments to reconcile Net earnings to Net cash provided by operating activities:
Depreciation and amortization	105		103
Non-cash other charges	18		12
Share-based compensation expenses	34		31
Loss on sales of investments and businesses, net	—		1
Loss from the extinguishment of long-term debt	—		56

Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:
Accounts receivable	(32)		26
Inventories	(46)		(1)
Other current assets and contract assets	(270)		(137)
Accounts payable, accrued liabilities, and contract liabilities	259		75
Other assets and liabilities	(25)		(3)
Deferred income taxes	25		23
Net cash provided by operating activities	376		392
Investing
Acquisitions and investments, net	(351)		(181)
Proceeds from sales of investments and businesses, net	1		2
Capital expenditures	(61)		(49)

Net cash used for investing activities	(411)		(228)
Financing

Repayments of debt	(3)		(903)
Repayment of revolving credit facility draw	—		(300)
Net proceeds from issuance of debt	—		892
Issuances of common stock	39		10
Purchases of common stock	(125)		(105)
Payments of dividends	(120)		(109)

Net cash used for financing activities	(209)		(515)