DEFINITIONS

¹ Free cash flow represents operating cash flow less capital expenditures.

ABOUT MOTOROLA SOLUTIONS

Motorola Solutions is a global leader in mission-critical communications. Our technology platforms in communications, command center software, video and services make cities safer and help communities and businesses thrive. At Motorola Solutions, we are ushering in a new era in public safety and security. Learn more at  www.motorolasolutions.com.

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. ©2019 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 30, 2019				March 31, 2018
Net sales from products		$	945			$	801
Net sales from services			712				667
Net sales			1,657				1,468
Costs of products sales			444				383
Costs of services sales			440				416
Costs of sales			884				799
Gross margin			773				669
Selling, general and administrative expenses			327				279
Research and development expenditures			162				152
Other charges			5				26
Intangibles amortization			50				41
Operating earnings			229				171
Other income (expense):
Interest expense, net			(55	)			(46	)
Gains on sales of investments and businesses, net			1				11
Other			10				4
Total other expense			(44	)			(31	)
Net earnings before income taxes			185				140
Income tax expense			33				23
Net earnings			152				117
Less: Earnings attributable to noncontrolling interests			1				-
Net earnings attributable to Motorola Solutions, Inc.		$	151			$	117
Earnings per common share:
Basic		$	0.92			$	0.73
Diluted		$	0.86			$	0.69
Weighted average common shares outstanding:
Basic			164.0				161.4
Diluted			174.6				170.6
		Percentage of Net Sales*
Net sales from products			57.0	%			54.6	%
Net sales from services			43.0	%			45.4	%
Net sales			100.0	%			100.0	%
Costs of products sales			47.0	%			47.8	%
Costs of services sales			61.8	%			62.4	%
Costs of sales			53.3	%			54.4	%
Gross margin			46.7	%			45.6	%
Selling, general and administrative expenses			19.7	%			19.0	%
Research and development expenditures			9.8	%			10.4	%
Other charges			0.3	%			1.8	%
Intangibles amortization			3.0	%			2.8	%
Operating earnings			13.8	%			11.6	%
Other income (expense):
Interest expense, net			(3.3	)%			(3.1	)%
Gains on sales of investments and businesses, net			-	%			0.7	%
Other			0.6	%			0.3	%
Total other expense			(2.7	)%			(2.1	)%
Net earnings before income taxes			11.2	%			9.5	%
Income tax expense			2.0	%			1.6	%
Net earnings			9.2	%			8.0	%
Less: Earnings attributable to noncontrolling interests			-	%			-	%
Net earnings attributable to Motorola Solutions, Inc.			9.1	%			8.0	%
* Percentages may not add up due to rounding

						GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
		March 30, 2019				December 31, 2018
Assets
Cash and cash equivalents		$	886			$	1,246
Restricted cash			11				11
Total cash and cash equivalents			897				1,257
Accounts receivable, net			1,150				1,293
Contract assets			878				1,012
Inventories, net			425				356
Other current assets			364				354
Total current assets			3,714				4,272
Property, plant and equipment, net			937				895
Operating lease assets			593				-
Investments			163				169
Deferred income taxes			953				985
Goodwill			1,860				1,514
Intangible Assets, net			1,416				1,230
Other assets			357				344
Total assets		$	9,993			$	9,409
Liabilities and Stockholders' Equity
Current portion of long-term debt		$	28			$	31
Accounts payable			558				592
Contract liabilities			1,158				1,263
Accrued liabilities			1,235				1,210
Total current liabilities			2,979				3,096
Long-term debt			5,287				5,289
Operating lease liabilities			553				-
Other liabilities			2,264				2,300
Total Motorola Solutions, Inc. stockholders' equity (deficit)			(1,108	)			(1,293	)
Noncontrolling interests			18				17
Total liabilities and stockholders’ equity		$	9,993			$	9,409

						GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
		Three Months Ended
		March 30, 2019				March 31, 2018
Operating
Net earnings attributable to Motorola Solutions, Inc.		$	151			$	117
Earnings attributable to noncontrolling interests			1				-
Net earnings			152				117
Adjustments to reconcile Net earnings to Net cash provided by (used for) operating activities:
Depreciation and amortization			95				82
Non-cash other charges			10				3
Share-based compensation expense			27				17
Gains on sales of investments and businesses, net			(1	)			(11	)
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:							.
Accounts receivable			168				195
Inventories			(63	)			(9	)
Other current assets and contract assets			136				2
Accounts payable, accrued liabilities, and contract liabilities			(261	)			(350	)
Other assets and liabilities			(6	)			(553	)
Deferred income taxes			(6	)			7
Net cash provided by (used for) operating activities			251				(500	)
Investing
Acquisitions and investments, net			(368	)			(1,125	)
Proceeds from sales of investments and businesses, net			2				77
Capital expenditures			(66	)			(41	)
Net cash used for investing activities			(432	)			(1,089	)
Financing
Repayment of debt			(8	)			(50	)
Net proceeds from issuance of debt			-				1,296
Issuance of common stock			45				53
Purchases of common stock			(145	)			(66	)
Payments of dividends			(93	)			(84	)
Net cash provided by (used for) financing activities			(201	)			1,149
Effect of exchange rate changes on cash and cash equivalents			22				30
Net decrease in cash and cash equivalents			(360	)			(410	)
Cash and cash equivalents, beginning of period			1,257				1,268
Cash and cash equivalents, end of period		$	897			$	858
Financial Ratios:
Free cash flow*		$	185			$	(541	)
*Free cash flow = Net cash provided by (used for) operating activities - Capital expenditures

											GAAP-4
Motorola Solutions, Inc. and Subsidiaries
Segment Information
(In millions)
Net Sales
	Three Months Ended
	March 30, 2019				March 31, 2018				% Change
Products and Systems Integration	$	1,069			$	952			12	%
Services and Software		588				516			14	%
Total Motorola Solutions	$	1,657			$	1,468			13	%
Operating Earnings
	Three Months Ended
	March 30, 2019				March 31, 2018				% Change
Products and Systems Integration	$	108			$	90			20	%
Services and Software		121				81			49	%
Total Motorola Solutions	$	229			$	171			34	%
Operating Earnings %
	Three Months Ended
	March 30, 2019				March 31, 2018
Products and Systems Integration		10.1	%			9.5	%
Services and Software		20.6	%			15.7	%
Total Motorola Solutions		13.8	%			11.6	%

															Non-GAAP-1
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Adjustments (Intangibles Amortization Expense, Share-Based Compensation Expense and Highlighted Items)
(In millions)
Q1 2019
Non-GAAP Adjustments		Statement Line		PBT (Inc)/Exp				Tax Inc/(Exp)			PAT (Inc)/Exp				EPS impact
Share-based compensation expense		Cost of sales, SG&A and R&D		$	27			$	6			21			$	0.12
Reorganization of business charges		Cost of sales and Other charges			8				2			6				0.04
Intangibles amortization expense		Intangibles amortization			50				11			39				0.23
Legal settlement		Other charges			(1	)			-			(1	)			(0.01	)
Fair value adjustments to equity investments		Other expense			1				-			1				0.01
Investment impairments		Investment impairments			8				2			6				0.04
Sale of investments		(Gain) or loss on sales of investments and businesses, net			(1	)			-			(1	)			(0.01	)
Acquisition-related transaction fees		Other charges			2				-			2				0.01
FIN48 release		Income tax expense			-				1			(1	)			(0.01	)
Total impact on Net earnings				$	94			$	22		$	72			$	0.42

											Non-GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Segment Information
(In millions)
Net Sales
	Three Months Ended
	March 30, 2019				March 31, 2018				% Change
Products and Systems Integration	$	1,069			$	952			12	%
Services and Software		588				516			14	%
Total Motorola Solutions	$	1,657			$	1,468			13	%
Non-GAAP Operating Earnings
	Three Months Ended
	March 30, 2019				March 31, 2018				% Change
Products and Systems Integration	$	147			$	125			18	%
Services and Software		168				135			24	%
Total Motorola Solutions	$	315			$	260			21	%
Non-GAAP Operating Earnings %
	Three Months Ended
	March 30, 2019				March 31, 2018
Products and Systems Integration		13.8	%			13.1	%
Services and Software		28.6	%			26.2	%
Total Motorola Solutions		19.0	%			17.7	%

										Non-GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Operating Earnings after Non-GAAP Adjustments
(In millions)
Q1 2019
		TOTAL				Products and Systems Integration				Services and Software
Net sales		$	1,657			$	1,069			$	588
Operating earnings ("OE")		$	229			$	108			$	121
Above-OE non-GAAP adjustments:
Share-based compensation expense			27				21				6
Reorganization of business charges			8				7				1
Intangibles amortization expense			50				11				39
Acquisition-related transaction fees			2				1				1
Legal settlement			(1	)			(1	)			-
Total above-OE non-GAAP adjustments			86				39				47
Operating earnings after non-GAAP adjustments		$	315			$	147			$	168
Operating earnings as a percentage of net sales - GAAP			13.8	%			10.1	%			20.6	%
Operating earnings as a percentage of net sales - after non-GAAP adjustments			19.0	%			13.8	%			28.6	%

										Non-GAAP-4
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Organic Revenue
(In millions)
Total Motorola Solutions
		Three Months Ended
		March 30, 2019				March 31, 2018				% Change
Net sales		$	1,657			$	1,468			13	%
Non-GAAP adjustments:
Acquisitions			(159	)			(22	)
Organic revenue		$	1,498			$	1,446			4	%

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