Motorola 2014 Annual Report Download - page 30

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28
Results of Operations
Years ended December 31
(Dollars in millions, except per share amounts) 2014 % of
Sales ** 2013 % of
Sales ** 2012 % of
Sales **
Net sales from products $ 3,807 $ 4,109 $ 4,236
Net sales from services 2,074 2,118 2,033
Net sales 5,881 6,227 6,269
Costs of product sales 1,678 44.1 % 1,808 44.0 % 1,795 42.4 %
Costs of services sales 1,372 66.2 % 1,310 61.9 % 1,280 63.0 %
Costs of sales 3,050 51.9 % 3,118 50.1 % 3,075 49.1 %
Gross margin 2,831 48.1 % 3,109 49.9 % 3,194 50.9 %
Selling, general and administrative expenses 1,184 20.1 % 1,330 21.4 % 1,472 23.5 %
Research and development expenditures 681 11.6 % 761 12.2 % 790 12.6 %
Other charges 1,972 33.5 % 71 1.1 % 12 0.2 %
Operating earnings (loss) (1,006) (17.1)% 947 15.2 % 920 14.7 %
Other income (expense):
Interest expense, net (126) (2.1)% (113) (1.8)% (66) (1.1)%
Gains on sales of investments 5 0.1 % 37 0.6 % 26 0.4 %
Other (34) (0.6)% 9 0.1 % 1 — %
Total other expense (155) (2.6)% (67) (1.1)% (39) (0.6)%
Earnings (loss) from continuing operations before
income taxes (1,161) (19.7)% 880 14.1 % 881 14.1 %
Income tax expense (benefit) (465) (7.9)% (59) (0.9)% 211 3.4 %
Earnings (loss) from continuing operations (696) (11.8)% 939 15.1 % 670 10.7 %
Less: Earnings attributable to noncontrolling
interests 1 — % 6 0.1 % — — %
Earnings (loss) from continuing operations* (697) (11.9)% 933 15.0 % 670 10.7 %
Earnings from discontinued operations, net of tax 1,996 33.9 % 166 2.7 % 211 3.4 %
Net earnings* $ 1,299 22.1 % $ 1,099 17.6 % $ 881 14.1 %
Earnings (loss) per diluted common share*:
Continuing operations $ (2.84) $ 3.45 $ 2.25
Discontinued operations 8.13 0.61 0.71
Earnings per diluted common share* $ 5.29 $ 4.06 $ 2.96
* Amounts attributable to Motorola Solutions, Inc. common shareholders.
** Percentages may not add due to rounding.
Geographic Market Sales by Locale of End Customer
2014 2013 2012
North America 61% 63% 62%
Latin America 9% 8% 9%
EA 17% 16% 14%
APME 13% 13% 15%
100% 100% 100%
Results of Operations—2014 Compared to 2013
Net Sales
Net sales were $5.9 billion in 2014, down $346 million, or 6%, compared to $6.2 billion in 2013. The decrease in net sales
reflects a $302 million, or 7%, decrease in the Products segment driven by declines in: (i) North America and APME, reflecting
lower devices and systems sales and (ii) Latin America, reflecting lower devices sales, partially offset by single-digit growth in EA