Highlighted items: The company has excluded the effects of highlighted items including, but not limited to, acquisition-related transaction costs, tangible and intangible asset impairments, restructuring charges, non-cash pension adjustments, significant litigation and other contingencies, significant gains and losses on investments, and the income tax effects of significant tax matters, 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. For the purposes of management's internal analysis over operating performance, the company uses financial statements that exclude highlighted items, as these charges do not contribute to a meaningful evaluation of the company's current operating performance or comparisons to the company's past operating performance. Specifically in regards to its restructuring plans, the company has incurred significant restructuring charges as it reduced approximately $700 million of operating expenses in the past four years.
Share-based compensation expense: The company has excluded share-based compensation expense from its non-GAAP operating expenses and net income measurements. Although share-based compensation is a key incentive offered to the company’s employees and the company believes such compensation contributed to the revenue earned during the periods presented and also believes it will contribute to the generation of future period revenues, the company continues to evaluate its performance excluding share-based compensation expense primarily because it represents a significant non-cash expense. Share-based compensation expense will recur in future periods.
Intangible assets amortization expense: The company has excluded intangible assets amortization expense from its Non-GAAP operating expenses and net earnings measurements, primarily because it represents a non-cash expense and because the company evaluates its performance excluding intangible assets amortization expense. Amortization of intangible assets is consistent in amount and frequency but 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.
Constant Currency: The company evaluates its results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. The company calculates constant currency percentages by converting its current period local currency results using prior-period exchange rates, and then comparing these adjusted values to prior period reported results.
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 news 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. The company can give no assurance that any actual or future
results or events discussed in these statements will be achieved. Any
forward-looking statements represent the company’s views only as of
today and should not be relied upon as representing the company’s 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 the company’s 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 first quarter and full year of 2017
and incremental revenues of Airwave. 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 2015 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 communications industry; (2) the impact of foreign currency
fluctuations on the company; (3) the level of demand for the company's
products; (4) the company's ability to refresh existing and introduce
new products and technologies in a timely manner; (5) negative impact on
the company's business from global economic and political conditions,
which may include: (i) continued 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,
which could impact future required or voluntary pension contributions;
and (viii) the company’s ability to access the capital markets on
acceptable terms and conditions; (6) the impact of a security breach or
other significant disruption in the company’s IT systems, those of its
partners or suppliers or those it sells to or operates or maintains for
its customers; (7) the outcome of ongoing and future tax matters; (8)
the company's ability to purchase sufficient materials, parts and
components to meet customer demand, particularly in light of global
economic conditions and reductions in the company’s purchasing power;
(9) risks related to dependence on certain key suppliers,
subcontractors, third-party distributors and other representatives; (10)
the impact on the company's performance and financial results from
strategic acquisitions or divestitures, including the acquisition of
Airwave; (11) risks related to the company's manufacturing and business
operations in foreign countries; (12) the creditworthiness of the
company's customers and distributors, particularly purchasers of large
infrastructure systems; (13) 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; (14) the ownership of certain logos,
trademarks, trade names and service marks including “MOTOROLA” by
Motorola Mobility Holdings, Inc.; (15) 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; (16) unexpected liabilities or expenses, including unfavorable
outcomes to any pending or future litigation or regulatory or similar
proceedings; (17) the impact of the percentage of cash and cash
equivalents held outside of the United States; (18) the ability of the
company to pay future dividends due to possible adverse market
conditions or adverse impacts on the company’s cash flow; (19) 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; (20) the impact of changes in governmental
policies, laws or regulations; (21) negative consequences from the
company's use of third party vendors for various activities, including
certain manufacturing operations, information technology and
administrative functions; (22) the impact of the sale of the company’s
legacy information systems, including components of the enterprise
resource planning (ERP) system and the implementation of a new ERP
system; and (23) the company’s ability to settle the par value of its
Senior Convertible Notes in cash. 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.