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Motorola Solutions Reports Fourth-Quarter and Full-Year 2012 Financial Results



  Motorola Solutions Reports Fourth-Quarter and Full-Year 2012 Financial
  Results

       Record Fourth-Quarter and Full-Year Sales and Operating Earnings

Business Wire

SCHAUMBURG, Ill. -- January 23, 2013

Motorola Solutions, Inc. (NYSE: MSI):

  * Fourth-quarter and full-year sales up 6 percent from a year ago
  * Fourth-quarter Government sales up 10 percent from a year ago; up 12
    percent for the full year
  * Fourth-quarter GAAP earnings per share (EPS) from continuing operations*
    up 119 percent from a year ago; up 34 percent for the full year
  * Fourth-quarter Non-GAAP** EPS from continuing operations up 26 percent
    from a year ago; up 23 percent for the full year
  * Repurchased $326 million of shares in the quarter; $2.4 billion for the
    full year
  * Generated $564 million in operating cash flow during the quarter; $1.1
    billion for the full year

                                                      
                          Fourth Quarter             Full Year
                          2012     2011     Change   2012     2011     Change
Total sales ($M)          $2,441   $2,300   6%       $8,698   $8,203   6%
GAAP operating earnings   $423     $276     53%      $1,256   $858     46%
($M)
Non-GAAP operating        $476     $444     7%       $1,503   $1,373   9%
earnings ($M)
GAAP EPS from             $1.18    $0.54    119%     $2.95    $2.20    34%
continuing operations
Non-GAAP EPS from         $1.10    $0.87    26%      $3.20    $2.61    23%
continuing operations
                                                                      

Click here for printable press release and financial tables.

Motorola Solutions, Inc. (NYSE: MSI) announced today its fourth-quarter and
full-year 2012 results highlighted by fourth-quarter sales of $2.4 billion, up
6 percent from the fourth quarter of 2011, and full-year sales of $8.7
billion, up 6 percent from 2011. For the full year, Government sales were up
12 percent and Enterprise sales declined 5 percent. These results include
revenue for Psion, which was acquired on Oct. 1, 2012.

“It was another outstanding year for Motorola Solutions as we continued to
deliver strong operational and financial results,” said Greg Brown, chairman
and CEO of Motorola Solutions. “We strengthened our product portfolio,
expanded operating margins, generated $1.1 billion in operating cash and
returned $2.7 billion in capital to our shareholders.”

GAAP operating earnings in the fourth quarter of 2012 were $423 million or
17.3 percent of sales, compared to $276 million or 12 percent of sales in the
fourth quarter of 2011. GAAP earnings per share from continuing operations
were $1.18, compared to $0.54 in the fourth quarter of 2011. For the full year
2012, GAAP operating earnings were $1.3 billion or 14.4 percent of sales,
compared to $858 million or 10.5 percent of sales in 2011. GAAP earnings per
share from continuing operations were $2.95, compared to $2.20 in 2011.

Non-GAAP operating earnings in the fourth quarter of 2012 were $476 million or
19.5 percent of sales, compared to $444 million or 19.3 percent of sales in
the fourth quarter of 2011. Non-GAAP earnings per share from continuing
operations were $1.10, compared to $0.87 in the fourth quarter of 2011.
Non-GAAP financial information excludes after-tax net income of approximately
$0.08 per diluted share related to stock-based compensation, intangible
amortization and highlighted items. Details on these Non-GAAP adjustments and
the use of Non-GAAP measures are included later in this press release. For the
full year 2012, Non-GAAP operating earnings were $1.5 billion or 17.3 percent
of sales, compared to $1.4 billion or 16.7 percent of sales in 2011. Non-GAAP
earnings per share from continuing operations were $3.20, compared to $2.61 in
2011.

During the fourth quarter of 2012, the company generated $564 million in
operating cash flow from continuing operations. The company ended the quarter
with total cash*** of $3.6 billion while returning $399 million to
shareholders through share repurchases and cash dividends during the quarter.
The company repurchased 6.1 million shares of stock during the quarter and
49.6 million shares for the full year.

Government segment sales were $1.7 billion, up 10 percent from the year-ago
quarter. GAAP operating earnings were $346 million or 20.3 percent of sales
compared to $226 million or 14.6 percent of sales in the year-ago quarter.
Non-GAAP operating earnings were $373 million or 21.8 percent of sales
compared to $307 million or 19.8 percent of sales in the year-ago quarter.

For the full year 2012, Government segment sales were $6.0 billion, up 12
percent from 2011. GAAP operating earnings were $1.0 billion or 16.1 percent
of sales compared to $616 million or 11.5 percent of sales in 2011. Non-GAAP
operating earnings were $1.1 billion or 18.5 percent of sales compared to $833
million or 15.5 percent of sales in 2011.

Government highlights:

  * Secured multimillion dollar contracts with U.S. customers such as cities
    of Austin, Texas; El Paso, Texas; Elgin, Ill.; and Tacoma, Wash.; Clayton
    County in Georgia; Camden County in New Jersey; Onslow County in North
    Carolina; Montgomery County in Pennsylvania; and Prince William County in
    Virginia
  * Secured multimillion dollar contracts with international customers such as
    Hampshire Police in the U.K.; State of Brandenburg, Germany; Rosenergoatom
    nuclear power operations in Russia; Middle East Radio Communications in
    Egypt; Communication Authority of Thailand; Shanghai Metro, Shanxi Police
    and Guangdong Police in China; the Brazilian Army; Colombia Ministry of
    Defense; Ecopetrol Andean Pipeline in Colombia; Panama Ministry of Public
    Safety; Pemex in Mexico; and Peru National Police
  * Introduced three new TETRA mobile radios that give customers a choice of
    different form factors and capabilities to provide frontline workers with
    a reliable communications lifeline and faster access to mission-critical
    intelligence

Enterprise segment sales were $733 million, down 3 percent from the year-ago
quarter. Excluding Psion, sales were down 12 percent. GAAP operating earnings
were $77 million or 10.5 percent of sales compared to $50 million or 6.6
percent of sales in the year-ago quarter. Non-GAAP operating earnings were
$103 million or 14.1 percent of sales compared to $137 million or 18.2 percent
of sales in the year-ago quarter.

For the full year 2012, Enterprise segment sales were $2.7 billion, down 5
percent from 2011. GAAP operating earnings were $291 million or 10.7 percent
of sales compared to $242 million or 8.5 percent of sales in 2011. Non-GAAP
operating earnings were $395 million or 14.6 percent of sales compared to $540
million or 19.0 percent of sales in 2011.

Enterprise highlights:

  * Secured contracts with key customers such as Target, Best Buy Canada, The
    Home Depot, Ferguson Enterprises, Grupo Bimbo, Volkswagen Mexico,
    Norwegian Post, Poste Italiane, easyJet in the U.K., Aeon Technology in
    China and Daito Kentsku Construction in Japan
  * Named Best Partner Supplier for the second year in a row by Tesco and also
    received the retailer’s Innovation Partner of the Year award
  * Started shipping the Motorola SB1 smart badge device, which helps
    retailers affordably equip everyone in their organizations with a smart,
    wearable, cost-efficient, mobile device, as well as the MC40, a sleek,
    user-friendly mobile device that provides retail associates access to
    product information and availability, data collection, mobile
    point-of-sale capability and voice without ever leaving the customer’s
    side

First-Quarter and Full-Year Outlook

Motorola Solutions’ outlook for the first quarter of 2013 is for revenue
growth of 4 to 5 percent compared with the first quarter of 2012 and Non-GAAP
earnings per share from continuing operations of $0.62 to $0.67 per share. For
the full-year 2013, the company expects revenue growth of approximately 5 to
5.5 percent compared with 2012 and Non-GAAP operating earnings of
approximately 18 percent of sales. This outlook excludes stock-based
compensation, intangible amortization and charges associated with items
typically highlighted by the company in its quarterly earnings releases.

Consolidated GAAP Results

A comparison of results from operations is as follows:

                                                               
                                            Fourth Quarter    Full Year
                                            2012     2011     2012     2011
Net sales ($M)                              $2,441   $2,300   $8,698   $8,203
Gross margin ($M)                           1,229    1,160    4,348    4,146
Operating earnings ($M)                     423      276      1,256    858
Earnings from continuing operations ($M)    336      177      878      747
Net earnings ($M)                           336      184      881      1,158
                                                                        
Diluted EPS from continuing operations      $1.18    $0.54    $2.95    $2.20
                                                                        
Weighted average diluted common shares      284.4    328.4    297.4    339.7
outstanding
                                                                      

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 fourth quarter of 2012.

                                                                 
                                                                Fourth Quarter
(per diluted common share)                                      2012
                                                                 
GAAP Earnings per Common Share from Continuing Operations*      $1.18
                                                                 
Highlighted Items:
Legal matter                                                    (0.03)
Reorganization of business charges                              0.03
Reduction in international deferred tax asset valuation         (0.21)
allowance
                                                                 
Total Highlighted Items                                         (0.21)
                                                                 
Stock-based compensation expense                                0.11
Intangible assets amortization expense                          0.02
Stock-Based Compensation Expense and Intangible Assets          0.13
Amortization Expense
                                                                 
Total Non-GAAP Adjustments                                      (0.08)
                                                                 
Non-GAAP Earnings per Common Share                              $1.10
                                                                 

Conference Call and Webcast

Motorola Solutions will host its quarterly conference call beginning at 7 a.m.
U.S. Central Standard Time (8 a.m. U.S. Eastern Standard Time) on Wednesday,
Jan. 23. 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 first quarter and full year of 2013,
payment of a regular quarterly dividend and purchases of shares under the
company’s share repurchase program. 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, 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; (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 Psion and 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; (20) negative consequences from the
company's outsourcing of various activities, including certain business
operations, information technology and administrative functions; and (21) the
impact of our multi-year phased upgrade and consolidation of our enterprise
resource planning systems into a single global platform. 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 shareholders

** 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
solutions 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.

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.
©2013 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
                                         December 31, 2012   December 31, 2011
Net sales from products                  $      1,789        $      1,689
Net sales from services                         652                 611
Net sales                                       2,441               2,300
                                                              
Costs of product sales                          791                 774
Costs of service sales                          421                 366
Costs of sales                                  1,212               1,140
                                                              
Gross margin                                    1,229               1,160
                                                              
Selling, general and administrative             510                 498
expenses
Research and development expenditures           290                 266
Other charges (income)                          (4)                 70
Intangibles amortization                        10                  50
Operating earnings                              423                 276
                                                              
Other income (expense):
Interest expense, net                           (20)                (15)
Gain on sales of investments and                -                   2
businesses, net
Other                                           4                   4
Total other expense                             (16)                (9)
Earnings from continuing operations             407                 267
before income taxes
Income tax expense                              71                  90
Earnings from continuing operations             336                 177
                                                              
Earnings from discontinued operations,          -                   7
net of tax
                                                              
Net earnings attributable to Motorola    $      336          $      184
Solutions, Inc.
                                                              
Amounts attributable to Motorola
Solutions, Inc. common shareholders
Earnings from continuing operations,     $      336          $      177
net of tax
Earnings from discontinued operations,          -                   7
net of tax
Net earnings                             $      336          $      184
                                                              
Earnings per common share
Basic:
Continuing operations                    $      1.20         $      0.55
Discontinued operations                         -                   0.02
                                         $      1.20         $      0.57
                                                              
Diluted:
Continuing operations                    $      1.18         $      0.54
Discontinued operations                         -                   0.02
                                         $      1.18         $      0.56
                                                              
Weighted average common shares
outstanding
Basic                                           279.3               323.1
Diluted                                         284.4               328.4
                                                              
                                                              
                                         Percentage of Net Sales*
Net sales from products                         73.3%               73.4%
Net sales from services                         26.7%               26.6%
Net sales                                       100%                100%
                                                              
Costs of product sales                          44.2%               45.8%
Costs of service sales                          64.6%               59.9%
Costs of sales                                  49.7%               49.6%
                                                              
Gross margin                                    50.3%               50.4%
                                                              
Selling, general and administrative             20.9%               21.7%
expenses
Research and development expenditures           11.9%               11.6%
Other charges (income)                          -0.2%               3.0%
Intangibles amortization                        0.4%                2.2%
Operating earnings                              17.3%               12.0%
                                                              
Other income (expense):
Interest expense, net                           -0.8%               -0.7%
Gain on sales of investments and                0.0%                0.1%
businesses, net
Other                                           0.2%                0.2%
Total other expense                             -0.7%               -0.4%
Earnings from continuing operations             16.7%               11.6%
before income taxes
Income tax expense                              2.9%                3.9%
Earnings from continuing operations             13.8%               7.7%
                                                              
Earnings from discontinued operations,          0.0%                0.3%
net of tax
                                                              
Net earnings attributable to Motorola           13.8%               8.0%
Solutions, Inc.
                                                              
* 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)
                                                                   
                                    Years Ended
                                    December 31,   December 31,   December 31,
                                    2012           2011           2010
Net sales from products             $    6,363     $    6,068     $    5,616
Net sales from services                  2,335          2,135          2,001
Net sales                                8,698          8,203          7,617
                                                                   
Costs of product sales                   2,844          2,723          2,523
Costs of service sales                   1,506          1,334          1,282
Costs of sales                           4,350          4,057          3,805
                                                                   
Gross margin                             4,348          4,146          3,812
                                                                   
Selling, general and                     1,963          1,912          1,874
administrative expenses
Research and development                 1,075          1,035          1,037
expenditures
Other charges (income)                   25             141            (53)
Intangibles amortization                 29             200            203
Operating earnings                       1,256          858            751
                                                                   
Other income (expense):
Interest expense, net                    (66)           (74)           (129)
Gain on sales of investments and         39             23             49
businesses, net
Other                                    (14)           (69)           (7)
Total other expense                      (41)           (120)          (87)
Earnings from continuing                 1,215          738            664
operations before income taxes
Income tax expense (benefit)             337            (3)            403
Earnings from continuing                 878            741            261
operations
                                                                   
Earnings from discontinued               3              411            389
operations, net of tax
Net earnings                             881            1,152          650
                                                                   
Less: Gain (loss) attributable to        -              (6)            17
noncontrolling interests
Net earnings attributable to        $    881       $    1,158     $    633
Motorola Solutions, Inc.
                                                                   
Amounts attributable to Motorola
Solutions, Inc. common
shareholders
Earnings from continuing            $    878       $    747       $    244
operations, net of tax
Earnings from discontinued               3              411            389
operations, net of tax
Net earnings                        $    881       $    1,158     $    633
                                                                   
Earnings per common share
Basic:
Continuing operations               $    3.00      $    2.24      $    0.73
Discontinued operations                  0.01           1.23           1.17
                                    $    3.01      $    3.47      $    1.90
                                                                   
Diluted:
Continuing operations               $    2.95      $    2.20      $    0.72
Discontinued operations                  0.01           1.21           1.15
                                    $    2.96      $    3.41      $    1.87
                                                                   
Weighted average common shares
outstanding
Basic                                    292.1          333.8          333.3
Diluted                                  297.4          339.7          338.1
                                                                   
                                                                   
                                    Percentage of Net Sales*
Net sales from products                  73.2%          74.0%          73.7%
Net sales from services                  26.8%          26.0%          26.3%
Net sales                                100%           100%           100%
                                                                   
Costs of product sales                   44.7%          44.9%          44.9%
Costs of service sales                   64.5%          62.5%          64.1%
Costs of sales                           50.0%          49.5%          50.0%
                                                                   
Gross margin                             50.0%          50.5%          50.0%
                                                                   
Selling, general and                     22.6%          23.3%          24.6%
administrative expenses
Research and development                 12.4%          12.6%          13.6%
expenditures
Other charges (income)                   0.3%           1.7%           -0.7%
Intangibles amortization                 0.3%           2.4%           2.7%
Operating earnings                       14.4%          10.5%          9.9%
                                                                   
Other income (expense):
Interest expense, net                    -0.8%          -0.9%          -1.7%
Gain on sales of investments and         0.4%           0.3%           0.6%
businesses, net
Other                                    -0.2%          -0.8%          -0.1%
Total other expense                      -0.5%          -1.5%          -1.1%
Earnings from continuing                 14.0%          9.0%           8.7%
operations before income taxes
Income tax expense (benefit)             3.9%           0.0%           5.3%
Earnings from continuing                 10.1%          9.0%           3.4%
operations
                                                                   
Earnings from discontinued               0.0%           5.0%           5.1%
operations, net of tax
Net earnings                             10.1%          14.0%          8.5%
                                                                   
Less: Gain (loss) attributable to        0.0%           -0.1%          0.2%
noncontrolling interests
Net earnings attributable to             10.1%          14.1%          8.3%
Motorola Solutions, Inc.
                                                                   
* Percentages may not add up due
to rounding
                                                                   

                                                                   
                                                                  GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
                                                                   
                                                  December 31,    December 31,
                                                  2012            2011
Assets
Cash and cash equivalents                         $    1,468      $   1,881
Sigma Fund and short-term investments                  2,135          3,210
Accounts receivable, net                               1,881          1,866
Inventories, net                                       513            512
Deferred income taxes                                  604            613
Other current assets                                   800            686
Total current assets                                   7,401          8,768
                                                                   
Property, plant and equipment, net                     839            896
Investments                                            144            166
Deferred income taxes                                  2,416          2,375
Goodwill                                               1,510          1,428
Other assets                                           369            296
Total assets                                      $    12,679     $   13,929
                                                                   
Liabilities and Stockholders' Equity
Current portion of long-term debt                 $    4          $   405
Accounts payable                                       705            677
Accrued liabilities                                    2,626          2,733
Total current liabilities                              3,335          3,815
                                                                   
Long-term debt                                         1,859          1,130
Other liabilities                                      4,195          3,710
                                                                   
Total Motorola Solutions, Inc. stockholders'           3,265          5,214
equity
                                                                   
Noncontrolling interests                               25             60
                                                                   
Total liabilities and stockholders' equity        $    12,679     $   13,929
                                                                   
                                                                   
Total cash*                                       $    3,603      $   5,091
Net cash**                                             1,740          3,556
                                                                   
*Total cash = Cash and cash equivalents + Sigma Fund + Short-term investments
**Net cash = Total cash - Current portion of long-term debt - Long-term debt
 

                                                              
                                                             GAAP-4
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
                                                              
                                         Three Months Ended
                                         December 31, 2012   December 31, 2011
Operating
Net earnings                                    336                184
Earnings from discontinued operations,          -                  7
net of tax
Earnings from continuing operations             336                177
Adjustments to reconcile earnings from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization                   57                 93
Non-cash other charges                          (1)                (6)
Share-based compensation expense                45                 45
Gain on sales of investments and                -                  2
businesses, net
Deferred income taxes                           39                 32
Changes in assets and liabilities, net
of effects of acquisitions and
dispositions:
Accounts receivable                             (108)              (332)
Inventories                                     48                 23
Other current assets                            29                 68
Accounts payable and accrued                    121                40
liabilities
Other assets and liabilities                    (2)                (98)
Net cash provided by operating                  564                44
activities from continuing operations
Investing
Acquisitions and investments, net               (170)              (5)
Proceeds from sales of investments and          -                  59
businesses, net
Capital expenditures                            (47)               (83)
Proceeds from sales of property, plant          47                 -
and equipment
Proceeds from (purchases of) sales of           (375)              1,283
Sigma Fund investments, net
Net cash provided by (used for)
investing activities from continuing            (545)              1,254
operations
Financing
Repayment of debt                               (1)                (601)
Issuance of common stock                        54                 44
Purchase of common stock                        (326)              (366)
Excess tax benefits from share-based            3                  3
compensation
Payment of dividends                            (73)               (72)
Contribution to Motorola Mobility               -                  (150)
Distribution to discontinued                    -                  (37)
operations
Net cash used for financing activities          (343)              (1,179)
from continuing operations
Discontinued Operations
Net cash used for operating activities          -                  (38)
from discontinued operations
Net cash provided by financing
activities from discontinued                    -                  37
operations
Effect of exchange rate changes on
cash and cash equivalents from                  -                  1
discontinued operations
Net cash provided by (used for)
financing activities from discontinued          -                  -
operations
                                                              
Effect of exchange rate changes on
cash and cash equivalents from                  13                 (23)
continuing operations
Net increase (decrease) in cash and             (311)              96
cash equivalents
Cash and cash equivalents, beginning            1,779              1,785
of period
Cash and cash equivalents, end of        $      1,468        $     1,881
period
                                                              
Financial Ratios:
Free cash flow*                          $      517          $     (39)
                                                              
*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)
                                                                   
                                    Years Ended
                                    December 31,   December 31,   December 31,
                                    2012           2011           2010
Operating
Net earnings attributable to        $   881        $   1,158      $   633
Motorola Solutions, Inc.
Earnings (loss) attributable to         -              (6)            17
noncontrolling interests
Net earnings                            881            1,152          650
Earnings from discontinued              3              411            389
operations, net of tax
Earnings from continuing                878            741            261
operations
Adjustments to reconcile earnings
from continuing operations to net
cash provided by operating
activities:
Depreciation and amortization           208            366            342
Non-cash other income (charges)         11             34             (74)
Share-based compensation expense        184            168            144
Gain on sales of investments and        (39)           (23)           (49)
businesses, net
Loss from the extinguishment of         6              81             12
long-term debt
Deferred income taxes                   242            63             384
Changes in assets and
liabilities, net of effects of
acquisitions and dispositions:
Accounts receivable                     81             (250)          (83)
Inventories                             (3)            (14)           (111)
Other current assets                    (118)          61             (48)
Accounts payable and accrued            (162)          (191)          333
liabilities
Other assets and liabilities            (220)          (188)          (308)
Net cash provided by operating
activities from continuing              1,068          848            803
operations
Investing
Acquisitions and investments, net       (109)          (32)           (23)
Proceeds from (used for) sales of       (38)           1,123          264
investments and businesses, net
Capital expenditures                    (187)          (186)          (192)
Proceeds from sales of property,        56             6              27
plant and equipment
Proceeds from sales of Sigma Fund       1,075          1,509          453
investments, net
Proceeds from (used for) sales of       -              6              (6)
short-term investments, net
Net cash provided by investing
activities from continuing              797            2,426          523
operations
Financing
Repayment of debt                       (413)          (1,219)        (1,016)
Proceeds from issuance of debt          747            -              -
Issuance of common stock                133            192            179
Purchase of common stock                (2,438)        (1,110)        -
Excess tax benefits from                20             42             -
share-based compensation
Payments of dividends                   (270)          (72)           -
Contributions to Motorola               (73)           (3,425)        -
Mobility
Distribution from (to)                  (11)           64             797
discontinued operations
Net cash used for financing
activities from continuing              (2,305)        (5,528)        (40)
operations
Discontinued Operations
Net cash provided by operating
activities from discontinued            2              26             1,169
operations
Net cash used for investing
activities from discontinued            -              (8)            (343)
operations
Net cash provided by (used for)
financing activities from               11             (64)           (797)
discontinued operations
Effect of exchange rate changes
on cash and cash equivalents from       (13)           46             (29)
discontinued operations
Net cash provided by (used for)
financing activities from               -              -              -
discontinued operations
                                                                   
Effect of exchange rate changes
on cash and cash equivalents from       27             (73)           53
continuing operations
Net increase (decrease) in cash         (413)          (2,327)        1,339
and cash equivalents
Cash and cash equivalents,              1,881          4,208          2,869
beginning of period
Cash and cash equivalents, end of   $   1,468      $   1,881      $   4,208
period
                                                                   
Financial Ratios:
Free cash flow*                     $   881        $   662        $   611
                                                                   
*Free cash flow = Net cash provided by operating activities - Capital
expenditures
 

                                                                         
                                                                        GAAP-6
Motorola Solutions, Inc. and Subsidiaries
Segment Information
(In millions)
                                                                         
Summarized below are the Company's Net sales and Operating earnings by segment
for the three months

and years ended December 31, 2012 and December 31, 2011.
                                                                         
Net Sales
                                                              
                 Three Months Ended               Year Ended
                                                              
                 December    December             December   December    
                 31,         31,                  31,        31,
                 2012        2011        %        2012       2011       %
                                         Change                         Change
                                                                         
Government       $  1,708    $  1,547    10%      $  5,989   $  5,358   12%
Enterprise          733         753      -3%         2,709      2,845   -5%
Company Total    $  2,441    $  2,300    6%       $  8,698   $  8,203   6%
                                                                         
Operating Earnings
                                                              
                 Three Months Ended               Year Ended
                                                              
                 December    December             December   December    
                 31,         31,                  31,        31,
                 2012        2011        %        2012       2011       %
                                         Change                         Change
                                                                         
Government       $  346      $  226      53%      $  965     $  616     57%
Enterprise          77          50       54%         291        242     20%
Company Total    $  423      $  276      53%      $  1,256   $  858     46%
                                                                         
 
Operating Earnings %
                                                              
                 Three Months Ended               Year Ended
                                                              
                 December    December             December   December    
                 31,         31,                  31,        31,
                 2012        2011        %        2012       2011       %
                                         Change                         Change
                                                                         
Government          20.3%       14.6%    39%         16.1%      11.5%   40%
Enterprise          10.5%       6.6%     58%         10.7%      8.5%    26%
Company Total       17.3%       12.0%    44%         14.4%      10.5%   38%
                                                                         

                                                                             
                                                                            Non-GAAP-1
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Adjustments (Intangibles Amortization Expense, Stock-Based Compensation
Expense and Highlighted Items)
                                                                               
Q1 2012
                                                                             
Highlighted        Statement        PBT           Tax           PAT           EPS
Items              Line                                                       impact
                                    (Inc)/Exp     Inc/(Exp)     (Inc)/Exp
                                                                               
Intangibles        Intangibles
amortization       amortization     $   6         $   2         $   4           0.01
expense
Stock-based        Cost of
compensation       sales, SG&A          43            13            30          0.09
expense            and R&D
Reorganization     Cost of
of business        sales and            9             3             6           0.02
charges            Other
                   charges
                   Gain on
Gain on sale       sales of
of equity          investments          (16)          (6)           (10)        (0.03)
investment         and
                   businesses,
                   net
                                                                                 
Total
continuing                          $   42        $   12        $   30        $ 0.09
operations
impact
                                                                               
                                                                               
Q2 2012
                                                                               
Highlighted        Statement        PBT           Tax           PAT           EPS
Items              Line                                                       impact
                                    (Inc)/Exp     Inc/(Exp)     (Inc)/Exp
                                                                               
Intangibles        Intangibles
amortization       amortization     $   6         $   2         $   4           0.01
expense
Stock-based        Cost of
compensation       sales, SG&A          52            21            31          0.10
expense            and R&D
Reorganization     Cost of
of business        sales and            14            5             9           0.03
charges            Other
                   charges
Tax expense        Income tax
from audit         (expense)            -             13            (13)        (0.04)
settlements        benefit
and agreements
                                                                               
Total
continuing                          $   72        $   41        $   31        $ 0.10
operations
impact
                                                                               
                                                                               
Q3 2012
                                                                               
Highlighted        Statement        PBT           Tax           PAT           EPS
Items              Line                                                       impact
                                    (Inc)/Exp     Inc/(Exp)     (Inc)/Exp
                                                                               
Intangibles        Intangibles
amortization       amortization     $   6         $   2         $   4           0.01
expense
Stock-based        Cost of
compensation       sales, SG&A          44            14            30          0.11
expense            and R&D
Reorganization     Cost of
of business        sales and            13            4             9           0.03
charges            Other
                   charges
                   Gain on
Gain on sale       sales of
of equity          investments          (13)          (5)           (8)         (0.03)
investment         and
                   businesses,
                   net
                                                                               
Total
continuing                          $   50        $   15        $   35        $ 0.12
operations
impact
                                                                               
                                                                               
Q4 2012
                                                                               
Highlighted        Statement        PBT           Tax           PAT           EPS
Items              Line                                                       impact
                                    (Inc)/Exp     Inc/(Exp)     (Inc)/Exp
                                                                               
Intangibles        Intangibles
amortization       amortization     $   10        $   3         $   7           0.02
expense
Stock-based        Cost of
compensation       sales, SG&A          45            14        $   31          0.11
expense            and R&D
Reorganization     Cost of
of business        sales and            14            5         $   9           0.03
charges            Other
                   charges
Legal matter       Other                (16)          (6)       $   (10)        (0.03)
                   charges
Reduction in
deferred tax       Income tax
asset              (expense)            -             60        $   (60)        (0.21)
valuation          benefit
allowance
                                                                               
Total
continuing                          $   53        $   76        $   (23)      $ (0.08)
operations
impact
                                                                               
                                                                               
FY 2012
                                                                               
Highlighted        Statement        PBT           Tax           PAT           EPS
Items              Line                                                       impact
                                    (Inc)/Exp     Inc/(Exp)     (Inc)/Exp
                                                                               
Intangibles        Intangibles
amortization       amortization     $   29        $   10        $   19          0.06
expense
Stock-based        Cost of
compensation       sales, SG&A          184           62            122         0.41
expense            and R&D
Reorganization     Cost of
of business        sales and            50            17            33          0.11
charges            Other
                   charges
                   Gain on
Gain on sale       sales of
of equity          investments          (29)          (11)          (18)        (0.06)
investment         and
                   businesses,
                   net
Legal matter       Other                (16)          (6)           (10)        (0.03)
                   charges
Tax expense        Income tax
from audit         (expense)            -             13            (13)        (0.04)
settlements        benefit
and agreements
Reduction in
deferred tax       Income tax
asset              (expense)            -             60            (60)        (0.20)
valuation          benefit
allowance
                                                                               
Total
continuing                          $   218       $   145       $   73        $ 0.25
operations
impact
                                                                                 

                                                                     
                                                                    Non-GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Segment Information
(In millions)
                                                                     
Net Sales
                                                          
               Three Months Ended             Year Ended
                                                          
               December   December            December   December    
               31,        31,                 31,        31,
               2012       2011       %        2012       2011       % Change
                                     Change
                                                                     
Government     $  1,708   $  1,547   10%      $  5,989   $  5,358   12%
Enterprise        733        753     -3%         2,709      2,845   -5%
Company        $  2,441   $  2,300   6%       $  8,698   $  8,203   6%
Total
                                                                     
                                                                     
Non-GAAP Operating Earnings
                                                          
               Three Months Ended             Year Ended
                                                          
               December   December            December   December    
               31,        31,                 31,        31,
               2012       2011       %        2012       2011       % Change
                                     Change
                                                                     
Government     $  373     $  307     21%      $  1,108   $  833     33%
Enterprise        103        137     -25%        395        540     -27%
Company        $  476     $  444     7%       $  1,503   $  1,373   9%
Total
                                                                     
                                                                     
Non-GAAP Operating Earnings %
                                                          
               Three Months Ended             Year Ended
                                                          
               December   December            December   December    
               31,        31,                 31,        31,
               2012       2011       %        2012       2011       % Change
                                     Change
                                                                     
Government        21.8%      19.8%   10%         18.5%      15.5%   19%
Enterprise        14.1%      18.2%   -23%        14.6%      19.0%   -23%
Company           19.5%      19.3%   1%          17.3%      16.7%   3%
Total
                                                                     

                                                                   
                                                                  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            $ 290     $   184      $   106
adjustments
                                                                     
Operating earnings as a percentage of net      11.9%       11.5%        12.5%
sales - GAAP
Operating earnings as a percentage of net      14.8%       14.1%        16.2%
sales - after non-GAAP adjustments
                                                                     
                                                                     
Q2 2012
                                                                     
                                             TOTAL     Government   Enterprise
Net sales                                    $ 2,148   $   1,459    $   689
Operating earnings                           $ 278     $   197      $   81
                                                                     
Above-OE non-GAAP adjustments:
Stock-based compensation expense               52          34           18
Reorganization of business charges             14          9            5
Intangibles amortization expense               6           -            6
Total above-OE non-GAAP adjustments            72          43           29
                                                                     
Operating earnings after non-GAAP            $ 350     $   240      $   110
adjustments
                                                                     
Operating earnings as a percentage of net      12.9%       13.5%        11.8%
sales - GAAP
Operating earnings as a percentage of net      16.3%       16.4%        16.0%
sales - after non-GAAP adjustments
                                                                     
                                                                     
Q3 2012
                                                                     
                                             TOTAL     Government   Enterprise
Net sales                                    $ 2,153   $   1,521    $   632
Operating earnings                           $ 324     $   273      $   51
                                                                     
Above-OE non-GAAP adjustments:
Stock-based compensation expense               44          29           15
Reorganization of business charges             13          8            5
Intangibles amortization expense               6           -            6
Total above-OE non-GAAP adjustments            63          37           26
                                                                     
Operating earnings after non-GAAP            $ 387     $   310      $   77
adjustments
                                                                     
Operating earnings as a percentage of net      15.0%       17.9%        8.1%
sales - GAAP
Operating earnings as a percentage of net      18.0%       20.4%        12.2%
sales - after non-GAAP adjustments
                                                                     
                                                                     
Q4 2012
                                                                     
                                             TOTAL     Government   Enterprise
Net sales                                    $ 2,441   $   1,708    $   733
Operating earnings                           $ 423     $   345      $   78
                                                                     
Above-OE non-GAAP adjustments:
Stock-based compensation expense               45          30           15
Reorganization of business charges             14          9            5
Intangibles amortization expense               10          -            10
Legal matter                                   (16)        (11)         (5)
Total above-OE non-GAAP adjustments            53          28           25
                                                                     
Operating earnings after non-GAAP            $ 476     $   373      $   103
adjustments
                                                                     
Operating earnings as a percentage of net      17.3%       20.2%        10.6%
sales - GAAP
Operating earnings as a percentage of net      19.5%       21.8%        14.1%
sales - after non-GAAP adjustments
                                                                     
                                                                     
FY 2012
                                                                     
                                             TOTAL     Government   Enterprise
Net sales                                    $ 8,698   $   5,989    $   2,709
Operating earnings                           $ 1,256   $   965      $   291
                                                                     
Above-OE non-GAAP adjustments:
Stock-based compensation expense               184         120          64
Reorganization of business charges             50          33           17
Intangibles amortization expense               29          1            28
Legal matter                                   (16)        (11)         (5)
Total above-OE non-GAAP adjustments            247         143          104
                                                                     
Operating earnings after non-GAAP            $ 1,503   $   1,108    $   395
adjustments
                                                                     
Operating earnings as a percentage of net      14.4%       16.1%        10.7%
sales - GAAP
Operating earnings as a percentage of net      17.3%       18.5%        14.6%
sales - after non-GAAP adjustments
                                                                         

                                                                       
                                                                      Non-GAAP
                                                                      4
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Revenue Information, Excluding Psion
(In millions)
                                                                       
Summarized below are the Company's Non-GAAP Net sales, excluding the impact of
the acquisition of Psion, for the three months

and years ended December 31, 2012 and December 31, 2011.
                                                                       
Net Sales
                                                            
                Three Months Ended              Year Ended
                                                            
                December    December            December   December    
                31,         31,                 31,        31,
                2012        2011       %        2012       2011       % Change
                                       Change
                                                                       
Enterprise         733         753     -3%         2,709      2,845   -5%
Psion              72          -                   72         -        
Enterprise      $  661      $  753     -12%     $  2,637   $  2,845   -7%
excl. Psion
                                                                       
                                                            
                Three Months Ended              Year Ended
                                                            
                December    December            December   December    
                31,         31,                 31,        31,
                2012        2011       %        2012       2011       % Change
                                       Change
                                                                       
Company            2,441       2,300   6%          8,698      8,203   6%
Total
Psion              72          -                   72         -        
Company
Total excl.     $  2,369    $  2,300   3%       $  8,626   $  8,203   5%
Psion
                                                                       

Contact:

Media Contacts
Nick Sweers
Motorola Solutions
+1 847-576-2462
nicholas.sweers@motorolasolutions.com
or
Tama McWhinney
Motorola Solutions
+1 847-538-1865
tama.mcwhinney@motorolasolutions.com
or
Investor Contacts
Shep Dunlap
Motorola Solutions
+1 847-576-6899
shep.dunlap@motorolasolutions.com
or
Jason Winkler
Motorola Solutions
+1 847-576-4995
jason.winkler@motorolasolutions.com
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