Motorola Solutions Reports First-Quarter 2014 Financial Results

  Motorola Solutions Reports First-Quarter 2014 Financial Results

  *Sales of $1.8 billion, down 9 percent from a year ago
  *GAAP earnings per share (EPS)* of $0.49
  *Non-GAAP** EPS of $0.50
  *Generated $46 million in operating cash flow

Business Wire

SCHAUMBURG, Ill. -- May 1, 2014

Motorola Solutions, Inc. (NYSE: MSI) today reported its earnings results for
the first quarter of 2014. Click here for printable press release and
financial tables.

REVENUE

  *Government segment sales declined 11 percent to $1.2 billion reflecting
    lower aged backlog in the quarter and a challenging year-ago comparison in
    the Federal business. In addition, North America sales were weaker than
    expected due to lower ASTRO and professional commercial radio subscriber
    volume. Global sales were strong in TETRA, and the Services business grew
    single-digits for the quarter.
  *Enterprise segment sales declined 4 percent to $600 million primarily due
    to the expected decline in iDEN. Excluding the impact of iDEN, Enterprise
    revenues declined less than 1 percent primarily driven by the delay of
    several deals late in the quarter, primarily in North America.

SUPPORTING QUOTE

Greg Brown, chairman and CEO, Motorola Solutions

“First quarter sales results were below expectations due to lower order volume
in both Enterprise and North America Government,” said Greg Brown, chairman
and CEO, Motorola Solutions. “The long-term fundamentals of our Government
business remain solid and, with the announced sale of the Enterprise business,
we will accelerate ongoing cost actions to improve our competitiveness and
operating leverage going forward.”

KEY FINANCIAL RESULTS

                                                 
                                  First Quarter    Change
                                 2014    2013   
Motorola Solutions, Inc.                        
Sales ($M)                        $1,801  $1,973  -9%
GAAP                                            
Operating earnings ($M)           $170    $216    -21%
Percent of sales                  9.4%    10.9%   
Earnings per share                $0.49   $0.68   -28%
Non-GAAP                                        
Operating earnings ($M)           $212    $278    -24%
Percent of sales                  11.8%   14.1%   
Earnings per share                $0.50   $0.66   -24%
                                               
Segments                                        
Government                                      
Revenue ($M)                      $1,201  $1,346  -11%
GAAP operating earnings ($M)      $113    $180    -37%
Percent of sales                  9.4%    13.4%   
Non-GAAP operating earnings ($M)  $140    $217    -35%
Percent of sales                  11.7%   16.1%   
                                               
Enterprise                                      
Revenue ($M)                      $600    $627    -4%
GAAP operating earnings ($M)      $57     $36     58%
Percent of sales                  9.5%    5.7%    
Non-GAAP operating earnings ($M)  $72     $61     18%
Percent of sales                  12.0%   9.7%    
                                          

Non-GAAP financial information excludes after-tax net loss of approximately
$0.01 per diluted share related to share-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.

OTHER SELECTED FINANCIAL RESULTS

  *Operating margin — GAAP operating margin was 9.4 percent of sales;
    non-GAAP operating margin decreased to 11.8 percent. These results include
    $45 million in lower expenses compared to the first quarter of 2013
    primarily due to cost initiatives undertaken in late 2013.
  *Taxes — The GAAP effective tax rate was 16 percent, compared to 6 percent
    for the first quarter of 2013. The non-GAAP effective tax rate was 33
    percent, compared to 30 percent for the first quarter of 2013. The
    increase in the non-GAAP effective tax rate is due to the expiration of
    2013 research and development credits.
  *Cash flow — The company generated $46 million in operating cash flow
    during the quarter. This is a $77 million improvement from the first
    quarter of 2013 primarily driven by the timing of long-term contract
    milestone billings and return of cash that was seized by India tax
    authorities in the first quarter of 2013.
  *Cash and cash equivalents —  The company ended the quarter with cash and
    cash equivalents of $3.1 billion while returning $136 million to
    shareholders through share repurchases and cash dividends.
  *Share repurchase program — The company repurchased $57 million of its
    common stock in the first quarter reflecting lower activity as a result of
    the discussions leading to the Enterprise sale announced on April 15.

KEY HIGHLIGHTS

  *Secured $175 million contract with the Los Angeles Regional Interoperable
    Communications System Authority to provide a public safety LTE network.
  *Secured $113 million contract with the state of Indiana to upgrade its
    statewide infrastructure system including $78 million for 20 years of
    services.
  *Introduced three new model families to industry-leading APX P25 portfolio.
  *Continued to demonstrate leadership in retail and transportation and
    logistics by securing contracts with key customers such as retailers CVS
    and Tesco (UK) and couriers FedEx, Correos (Spain) and GLS (Germany).
  *Introduced DS4800 series of 2D array imagers offering enterprise-class
    scanning capabilities in a modern industrial design that enhances the
    ambiance of the retail point of sale (POS) environment.

BUSINESS OUTLOOK***

  *Second quarter 2014 — Motorola Solutions expects a revenue decline of 5 to
    8 percent compared with the second quarter of 2013, with non-GAAP earnings
    per share in the range of $0.58 to $0.64 per share.
  *Full year 2014 — The company expects a revenue decline of low single
    digits compared with 2013, with non-GAAP operating margins of
    approximately 18.5 percent of sales, consistent with the previous outlook.

CONFERENCE CALL AND WEBCAST

Motorola Solutions will host its quarterly conference call beginning at 7 a.m.
U.S. Central Daylight Time (8 a.m. U.S. Eastern Daylight Time) on Thursday,
May 1. The conference call will be webcast live with audio and slides at
www.motorolasolutions.com/investor.

CONSOLIDATED GAAP RESULTS

A comparison of results from operations is as follows:

                                                   
                                                    First Quarter
                                                   2014    2013
Net sales ($M)                                      $1,801  $1,973
Gross margin ($M)                                   845     955
Operating earnings ($M)                             170     216
Net earnings ($M)                                   127     192
                                                          
Diluted EPS                                         $0.49   $0.68
                                                          
Weighted average diluted common shares outstanding  258.3   280.7
                                                            

HIGHLIGHTED ITEMS, SHARE-BASED COMPENSATION EXPENSE AND INTANGIBLE ASSETS
AMORTIZATION EXPENSE

The table below includes highlighted items, share-based compensation expense
and intangible assets amortization expense for the first quarter of 2014.

                                                                First Quarter
(per diluted common share)                                       2014
                                                               
GAAP Net Earnings                                               $0.49
                                                                 
Highlighted Items:
Reorganization of business charges                               0.06
Gain on sale of building and land                                (0.05)
Recognition of previously unrecognized income tax benefits      (0.12)
Total Highlighted Items                                         (0.11)
                                                                 
Share-based compensation expense                                 0.10
Intangible assets amortization expense                          0.02
Share-Based Compensation Expense and Intangible Assets          0.12
Amortization Expense
                                                               
Total Non-GAAP Adjustments                                      0.01
                                                               
Non-GAAP Diluted Earnings per Common Share                      $0.50
                                                                 

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. The company has
provided these non-GAAP measurements to help investors better understand its
core operating performance, enhance comparisons of core operating performance
from period to period and allow better comparisons of operating performance to
its 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.

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
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. 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 second
quarter and full year of 2014 and statements regarding the proposed
transaction to sell the Enterprise business to Zebra Technologies. Motorola
Solutions cautions the reader that the risk factors below, as well as those on
pages 10 through 21 in Item 1A of Motorola Solutions, Inc.'s 2013 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 or as a result of the pending
transaction to sell the Enterprise business to Zebra Technologies; (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) 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; (5) the
impact of foreign currency fluctuations on the company when competing for
business in foreign markets; (6) the outcome of currently ongoing and future
tax matters; (7) the company's ability to purchase sufficient materials, parts
and components to meet customer demand, particularly in light of global
economic conditions; (8) risks related to dependence on certain key suppliers,
subcontractors, third-party distributors and other representatives; (9) the
impact on the company's performance and financial results from strategic
acquisitions or divestitures, including the sale of the Enterprise business
and those that may occur in the future; (10) risks related to the company's
manufacturing and business operations in foreign countries; (11) the
creditworthiness of the company's customers and distributors, particularly
purchasers of large infrastructure systems; (12) 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; (13) the ownership of certain logos,
trademarks, trade names and service marks including “MOTOROLA” by Motorola
Mobility Holdings, Inc.; (14) 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; (15) unexpected
liabilities or expenses, including unfavorable outcomes to any pending or
future litigation or regulatory or similar proceedings; (16) the impact of the
percentage of cash and cash equivalents held outside of the United States;
(17) the ability of the company to pay future dividends due to possible
adverse market conditions or adverse impacts on the company’s cash flow; (18)
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; (19) the impact of changes in governmental policies, laws or
regulations; (20) negative consequences from the company's outsourcing of
various activities, including certain business operations, information
technology and administrative functions; (21) the impact of the company’s
multi-year phased upgrade and consolidation of its enterprise resource
planning systems into a single global platform; (22) the satisfaction of the
conditions to closing (including receipt of regulatory approvals) the
transaction to sell the Enterprise business to Zebra Technologies; (23) the
expected timeline for completing such transaction; and (24) the ability of
Motorola Solutions to return proceeds of the transaction to its shareholders
and the timing thereof. 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
share-based compensation expense, intangible assets amortization expense and
highlighted items.

*** ^  Business outlook  excludes share-based compensation, intangible
amortization and charges associated with items typically highlighted by the
company in its quarterly earnings releases.

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 newsroom 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.
©2014 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
                                               March 29, 2014   March 30, 2013
Net sales from products                        $   1,211        $   1,381
Net sales from services                           590            592     
Net sales                                          1,801            1,973
                                                                
Costs of products sales                            583              651
Costs of services sales                           373            367     
Costs of sales                                     956              1,018
                                                               
Gross margin                                      845            955     
                                                                
Selling, general and administrative expenses       427              460
Research and development expenditures              243              262
Other charges                                      -                11
Intangibles amortization                          5              6       
Operating earnings                                170            216     
                                                                
Other income (expense):
Interest expense, net:                             (25     )        (25     )
Gains on sales of investments and                  7                7
businesses, net
Other                                             (1      )       7       
Total other expense                               (19     )       (11     )
Earnings before income taxes                       151              205
Income tax expense                                24             13      
Net earnings                                   $   127         $   192     
                                                                
Earnings per common share
Basic                                          $   0.50         $   0.70
Diluted                                            0.49             0.68
                                                                
Weighted average common shares outstanding
Basic                                              254.1            274.5
Diluted                                           258.3          280.7   
                                                                
                                                              
                                               Percentage of Net Sales*
Net sales from products                            67.2    %        70.0    %
Net sales from services                           32.8    %       30.0    %
Net sales                                         100     %       100     %
                                                                
Costs of products sales                            48.1    %        47.1    %
Costs of services sales                           63.2    %       62.0    %
Costs of sales                                     53.1    %        51.6    %
                                                               
Gross margin                                      46.9    %       48.4    %
                                                                
Selling, general and administrative expenses       23.7    %        23.3    %
Research and development expenditures              13.5    %        13.3    %
Other charges                                      0.0     %        0.6     %
Intangibles amortization                          0.3     %       0.3     %
Operating earnings                                9.4     %       10.9    %
                                                                
Other income (expense):
Interest expense, net:                             -1.4    %        -1.3    %
Gains on sales of investments and                  0.4     %        0.4     %
businesses, net
Other                                             -0.1    %       0.4     %
Total other expense                               -1.1    %       -0.6    %
Earnings before income taxes                       8.4     %        10.4    %
Income tax expense                                1.3     %       0.7     %
Net earnings attributable to Motorola             7.1     %       9.7     %
Solutions, Inc.
                                                                
* Percentages may not add up due to rounding

                                                                
                                                                  GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
                                                                 
                                                      March 29,   December 31,
                                                      2014        2013
Assets
Cash and cash equivalents                             $  3,141    $   3,225
Accounts receivable, net                                 1,727        1,920
Inventories, net                                         576          522
Deferred income taxes                                    624          584
Other current assets                                    713         769
Total current assets                                    6,781       7,020
                                                                  
Property, plant and equipment, net                       795          810
Investments                                              260          251
Deferred income taxes                                    2,004        2,076
Goodwill                                                 1,531        1,509
Other assets                                            244         185
Total assets                                          $  11,615   $   11,851
                                                                  
Liabilities and Stockholders' Equity
Current portion of long-term debt                     $  4        $   4
Accounts payable                                         655          814
Accrued liabilities                                     2,367       2,402
Total current liabilities                               3,026       3,220
                                                                  
Long-term debt                                           2,462        2,457
Other liabilities                                        2,380        2,485
                                                                  
Total Motorola Solutions, Inc. stockholders' equity      3,717        3,659
                                                                  
Noncontrolling interests                                30          30
                                                                  
Total liabilities and stockholders' equity            $  11,615  $   11,851
                                                                  
Financial Ratios:
Net cash*                                                675          764
                                                                  
*Net cash = Total cash - Current portion of long-term debt - Long-term debt

                                                              
                                                                GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
                                                              
                                               Three Months Ended
                                               March 29, 2014   March 30, 2013
Operating
Net earnings                                   $   127          $   192
Adjustments to reconcile Net earnings to Net
cash provided by (used for) operating
activities:
Depreciation and amortization                      55               52
Gain on sale of building and land                  (21     )        -
Non-cash other charges (income)                    3                (1      )
Share-based compensation expense                   36               45
Gains on sales of investments and                  (7      )        (7      )
businesses, net
Deferred income taxes                              41               (11     )
Changes in assets and liabilities, net of
effects of acquisitions and dispositions:
Accounts receivable                                191              200
Inventories                                        (54     )        (5      )
Other current assets                               24               (75     )
Accounts payable and accrued liabilities           (216    )        (417    )
Other assets and liabilities                      (133    )       (4      )
Net cash provided by (used for) operating         46             (31     )
activities
Investing
Acquisitions and investments, net                  (10     )        (4      )
Proceeds from sales of investments and             13               19
businesses, net
Capital expenditures                               (45     )        (46     )
Proceeds from sales of property, plant and         24               -
equipment
Purchases of Sigma Fund and short-term            -              (113    )
investments, net
Net cash used for investing activities            (18     )       (144    )
Financing
Repayment of debt                                  (1      )        (1      )
Net proceeds from issuance of debt                 4                593
Issuance of common stock                           14               40
Repurchase of common stock                         (57     )        (357    )
Excess tax benefit from share-based                5                9
compensation
Payments of dividends                             (79     )       (72     )
Net cash provided by (used for) financing         (114    )       212     
activities
                                                                
Effect of exchange rate changes on cash and       2              (35     )
cash equivalents
Net increase (decrease) in cash and cash           (84     )        2
equivalents
Cash and cash equivalents, beginning of           3,225          1,468   
period
Cash and cash equivalents, end of period       $   3,141       $   1,470   
                                                                
Financial Ratios:
Free cash flow*                                $   1            $   (77     )
                                                                
*Free cash flow = Net cash provided by operating activities - Capital
expenditures

                                               
                                                   GAAP-4
Motorola Solutions, Inc. and Subsidiaries
Segment Information
(In millions)
                                           
Net Sales
                          
                Three Months Ended
                           
                March 29,   March 30,   
                2014        2013        % Change
                                                   
Government      $ 1,201     $ 1,346     -11   %
Enterprise       600       627      -4    %
Company Total   $ 1,801    $ 1,973    -9    %
                                                   
                                           
Operating Earnings
                          
                Three Months Ended
                           
                March 29,   March 30,   
                2014        2013        % Change
                                                   
Government      $ 113       $ 180       -37   %
Enterprise       57        36       58    %
Company Total   $ 170      $ 216      -21   %
                                                   
                                           
Operating Earnings %
                          
                Three Months Ended
                           
                March 29,   March 30,
                2014        2013
                                                   
Government        9.4   %     13.4  %
Enterprise        9.5   %     5.7   %
Company Total    9.4   %    10.9  %

                                                               
                                                                    Non-GAAP-1
  Motorola Solutions, Inc. and Subsidiaries
  Non-GAAP Adjustments (Intangibles Amortization Expense, Share-Based
  Compensation Expense and Highlighted Items)
                                                            
  Q1 2014
                                                                    
                                  PBT         Tax         PAT
  Highlighted      Statement      (Inc)/Exp   Inc/(Exp)   (Inc)/Exp   EPS
  Items            Line                                               impact
                                                                      
  Intangibles      Intangibles
  amortization     amortization   $  5        $  1        $  4        $ 0.02
  expense
  Share-based      Cost of
  compensation     sales, SG&A       36          11          25         0.10
  expense          and R&D
  Reorganization   Cost of
  of business      sales and         22          6           16         0.06
  charges          Other
                   charges
  Gain on sale     Other
  of building      charges           (21  )      (8  )       (13  )     (0.05 )
  and land
  Recognition of
  previously       Income tax
  unrecognized     expense           -           30          (30  )     (0.12 )
  income tax
  benefits
                                                                   
  Total impact
  on Net                          $  42       $  40       $  2        $ 0.01
  earnings

                                               
                                                   Non-GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Segment Information
(In millions)
                                           
Net Sales
                          
                Three Months Ended
                           
                March 29,   March 30,   
                2014        2013        % Change
                                                   
Government      $ 1,201     $ 1,346     -11   %
Enterprise       600       627      -4    %
Company Total   $ 1,801    $ 1,973    -9    %
                                                   
                                           
Non-GAAP Operating Earnings
                          
                Three Months Ended
                           
                March 29,   March 30,   
                2014        2013        % Change
                                                   
Government      $ 140       $ 217       -35   %
Enterprise       72        61       18    %
Company Total   $ 212      $ 278      -24   %
                                                   
                                           
Non-GAAP Operating Earnings %
                          
                Three Months Ended
                           
                March 29,   March 30,
                2014        2013
                                                   
Government        11.7  %     16.1  %
Enterprise        12.0  %     9.7   %
Company Total    11.8  %    14.1  %

                                                                
                                                                  Non-GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Operating Earnings after Non-GAAP Adjustments
                                                              
Q1 2014
                                                                 
                                         TOTAL       Government   Enterprise
Net sales                                  $ 1,801     $  1,201     $  600
Operating earnings ("OE")                 $ 170      $  113      $  57    
                                                                    
Above-OE non-GAAP adjustments:
Share-based compensation expense             36           25           11
Reorganization of business charges           22           15           7
Intangibles amortization expense             5            1            4
Gain on sale of building and land           (21   )     (14   )     (7    )
Total above-OE non-GAAP adjustments          42           27           15
                                                                
Operating earnings after non-GAAP         $ 212      $  140      $  72    
adjustments
                                                                  
Operating earnings as a percentage of        9.4   %      9.4   %      9.5   %
net sales - GAAP
Operating earnings as a percentage of       11.8  %     11.7  %     12.0  %
net sales - after non-GAAP adjustments

                                             
                                              Non-GAAP-1
Motorola Solutions, Inc. and Subsidiaries
Pro forma Non-GAAP Adjustments Bridge
(In millions)
                                            
Q1 2012
                                              
                                            TOTAL
Net sales                                     $         1,387
Operating earnings ("OE")                    $         151           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        34
Reorganization of business charges                     7             
Total above-OE non-GAAP adjustments                     41
                                            
Operating earnings after non-GAAP            $         192           
adjustments
                                              
Operating earnings as a percentage                      10.9          %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          13.8          %
adjustments
                                              
                                            
Q2 2012
                                              
                                            TOTAL
Net sales                                     $         1,537
Operating earnings                           $         190           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        42
Reorganization of business charges                     9             
Total above-OE non-GAAP adjustments                     51
                                            
Operating earnings after non-GAAP            $         241           
adjustments
                                              
Operating earnings as a percentage                      12.4          %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          15.7          %
adjustments
                                              
                                            
Q3 2012
                                              
                                            TOTAL
Net sales                                     $         1,580
Operating earnings                           $         252           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        35
Reorganization of business charges                     8             
Total above-OE non-GAAP adjustments                     43
                                            
Operating earnings after non-GAAP            $         295           
adjustments
                                              
Operating earnings as a percentage                      15.9          %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          18.7          %
adjustments
                                              
                                            
Q4 2012
                                              
                                            TOTAL
Net sales                                     $         1,764
Operating earnings                           $         327           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        36
Reorganization of business charges                      9
Legal matter                                           (16           )
Total above-OE non-GAAP adjustments                     29
                                            
Operating earnings after non-GAAP            $         356           
adjustments
                                              
Operating earnings as a percentage                      18.5          %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          20.2          %
adjustments
                                              
                                            
FY 2012
                                              
                                            TOTAL
Net sales                                     $         6,269
Operating earnings                           $         920           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        147
Reorganization of business charges                      33
Intangibles amortization expense                        1
Legal matter                                           (16           )
Total above-OE non-GAAP adjustments                     165
                                            
Operating earnings after non-GAAP            $         1,085         
adjustments
                                              
Operating earnings as a percentage                      14.7          %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          17.3          %
adjustments
                                              
The pro forma financial data presented above reflects the removal of: (i) the
pro forma results of the Enterprise business as a result of the Company’s
anticipated sale of its Enterprise business, excluding the iDEN business and
other specific assets and liabilities, as discussed in the Report on Form 8-K
furnished with the Securities and Exchange Commission on April 15, 2014, and
(ii) certain estimated costs previously allocated to the Enterprise business
which will remain with Motorola Solutions, Inc. after the anticipated sale.
This financial data was prepared on a pro forma basis and, accordingly, the
discontinued operations of the Enterprise business and the financial results
of Motorola Solutions’ continuing operations may differ from what is provided
above.

                                             
                                              Non-GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Pro forma Non-GAAP Adjustments Bridge
(In millions)
                                            
Q1 2013
                                              
                                            TOTAL
Net sales                                     $         1,396
Operating earnings ("OE")                    $         173           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        36
Reorganization of business charges                     7             
Total above-OE non-GAAP adjustments                     43
                                            
Operating earnings after non-GAAP            $         216           
adjustments
                                              
Operating earnings as a percentage                      12.4          %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          15.5          %
adjustments
                                              
                                            
Q2 2013
                                              
                                            TOTAL
Net sales                                     $         1,497
Operating earnings                           $         203           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        27
Reorganization of business charges                     18            
Total above-OE non-GAAP adjustments                     45
                                            
Operating earnings after non-GAAP            $         248           
adjustments
                                              
Operating earnings as a percentage                      13.6          %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          16.6          %
adjustments
                                              
                                            
Q3 2013
                                              
                                            TOTAL
Net sales                                     $         1,517
Operating earnings                           $         244           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        30
Reorganization of business charges                      21
Intangibles amortization expense                       1             
Total above-OE non-GAAP adjustments                     52
                                            
Operating earnings after non-GAAP            $         296           
adjustments
                                              
Operating earnings as a percentage                      16.1          %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          19.5          %
adjustments
                                              
                                            
Q4 2013
                                              
                                            TOTAL
Net sales                                     $         1,817
Operating earnings                           $         325           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        30
Reorganization of business charges                     41            
Total above-OE non-GAAP adjustments                     71
                                            
Operating earnings after non-GAAP            $         396           
adjustments
                                              
Operating earnings as a percentage                      17.9          %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          21.8          %
adjustments
                                              
                                            
FY 2013
                                              
                                            TOTAL
Net sales                                     $         6,227
Operating earnings                           $         946           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        123
Reorganization of business charges                      86
Intangibles amortization expense                       1             
Total above-OE non-GAAP adjustments                     210
                                            
Operating earnings after non-GAAP            $         1,156         
adjustments
                                              
Operating earnings as a percentage                      15.2          %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          18.6          %
adjustments
                                              
The pro forma financial data presented above reflects the removal of: (i) the
pro forma results of the Enterprise business as a result of the Company’s
anticipated sale of its Enterprise business, excluding the iDEN business and
other specific assets and liabilities, as discussed in the Report on Form 8-K
furnished with the Securities and Exchange Commission on April 15, 2014, and
(ii) certain estimated costs previously allocated to the Enterprise business
which will remain with Motorola Solutions, Inc. after the anticipated sale.
This financial data was prepared on a pro forma basis and, accordingly, the
discontinued operations of the Enterprise business and the financial results
of Motorola Solutions’ continuing operations may differ from what is provided
above.

                                             
                                              Non-GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Pro forma Non-GAAP Adjustments Bridge
(In millions)
                                            
Q1 2014
                                              
                                            TOTAL
Net sales                                     $         1,228
Operating earnings ("OE")                    $         102           
                                              
Above-OE non-GAAP adjustments:
Share-based compensation expense                        29
Reorganization of business charges                      15
Intangibles amortization expense                        1
Gain on sale of building and land                      (21           )
Total above-OE non-GAAP adjustments                     24
                                            
Operating earnings after non-GAAP            $         126           
adjustments
                                              
Operating earnings as a percentage                      8.3           %
of net sales - GAAP
Operating earnings as a percentage
of net sales - after non-GAAP                          10.3          %
adjustments
                                              
The pro forma financial data presented above reflects the removal of: (i) the
pro forma results of the Enterprise business as a result of the Company’s
anticipated sale of its Enterprise business, excluding the iDEN business and
other specific assets and liabilities, as discussed in the Report on Form 8-K
furnished with the Securities and Exchange Commission on April 15, 2014, and
(ii) certain estimated costs previously allocated to the Enterprise business
which will remain with Motorola Solutions, Inc. after the anticipated sale.
This financial data was prepared on a pro forma basis and, accordingly, the
discontinued operations of the Enterprise business and the financial results
of Motorola Solutions’ continuing operations may differ from what is provided
above.

Contact:

MEDIA CONTACTS
Nick Sweers
Motorola Solutions
+1 847-576-2462
nicholas.sweers@motorolasolutions.com
or
Kurt Ebenhoch
Motorola Solutions
+1 847-576-1341
kurt.ebenhoch@motorolasolutions.com
or
INVESTOR CONTACTS
Shep Dunlap
Motorola Solutions
+1 847-576-6899
shep.dunlap@motorolasolutions.com
or
Chris Kutsor
Motorola Solutions
+1 847-576-4995
chris.kutsor@motorolasolutions.com
 
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