DEFINITIONS

¹ Amounts attributable to Motorola Solutions, Inc. common shareholders.

²Non-GAAP financial information excludes from GAAP results the effects of share-based compensation expense, intangible assets amortization expense and highlighted items.

³ Net debt represents cash and cash equivalents less long-term debt, including current portion

⁴ Business outlook excludes share-based compensation expense, intangible assets amortization expense and charges associated with items typically highlighted by the company in its quarterly earnings releases.

⁵ Based on currency rates as of May 4, 2015.

ABOUT MOTOROLA SOLUTIONS

Motorola Solutions (NYSE: MSI) creates innovative, mission-critical communication solutions and services that help public safety and commercial customers build safer cities and thriving communities. For ongoing news, visit www.motorolasolutions.com/newsroom or subscribe to a 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. ©2015 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
		April 4, 2015				March 29, 2014
Net sales from products		$	758			$	752
Net sales from services			465				476
Net sales			1,223				1,228
Costs of products sales			359				350
Costs of services sales			316				301
Costs of sales			675				651
Gross margin			548				577
Selling, general and administrative expenses			256				307
Research and development expenditures			159				174
Other charges (income)			12				(12	)
Intangibles amortization			2				1
Operating earnings			119				107
Other income (expense):
Interest expense, net:			(40	)			(25	)
Gains on sales of investments and businesses, net			46				7
Other			3				-
Total other income (expense)			9				(18	)
Earnings from continuing operations before income taxes			128				89
Income tax expense			40				4
Earnings from continuing operations			88				85
							-
Earnings (loss) from discontinued operations, net of tax			(13	)			42
Net earnings			75				127
Less: Earnings attributable to noncontrolling interests			1				-
Net earnings attributable to Motorola Solutions, Inc.		$	74			$	127
Amounts attributable to Motorola Solutions, Inc. common shareholders
Earnings from continuing operations, net of tax		$	87			$	85
Earnings (loss) from discontinued operations, net of tax			(13	)			42
Net earnings attributable to Motorola Solutions, Inc.		$	74			$	127
Earnings (loss) per common share
Basic:
Continuing operations		$	0.40			$	0.33
Discontinued operations			(0.06	)			0.17
		$	0.34			$	0.50
Diluted:
Continuing operations		$	0.40			$	0.33
Discontinued operations			(0.06	)			0.16
		$	0.34			$	0.49
Weighted average common shares outstanding
Basic			215.3				254.1
Diluted			217.8				258.3
		Percentage of Net Sales*
Net sales from products			62.0	%			61.2	%
Net sales from services			38.0	%			38.8	%
Net sales			100	%			100	%
Costs of products sales			47.4	%			46.5	%
Costs of services sales			68.0	%			63.2	%
Costs of sales			55.2	%			53.0	%
Gross margin			44.8	%			47.0	%
Selling, general and administrative expenses			20.9	%			25.0	%
Research and development expenditures			13.0	%			14.2	%
Other charges (income)			1.0	%			-1.0	%
Intangibles amortization			0.2	%			0.1	%
Operating earnings			9.7	%			8.7	%
Other income (expense):
Interest expense, net:			-3.3	%			-2.0	%
Gains on sales of investments and businesses, net			3.8	%			0.6	%
Other			0.2	%			0.0	%
Total other income (expense)			0.7	%			-1.5	%
Earnings from continuing operations before income taxes			10.5	%			7.2	%
Income tax expense			3.3	%			0.3	%
Earnings from continuing operations			7.2	%			6.9	%
Earnings (loss) from discontinued operations, net of tax			-1.1	%			3.4	%
Net earnings			6.1	%			10.3	%
Less: Earnings attributable to noncontrolling interests			0.1	%			0.0	%
Net earnings attributable to Motorola Solutions, Inc.			6.1	%			10.3	%
* Percentages may not add up due to rounding

						GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
		April 4,				December 31,
		2015				2014
Assets
Cash and cash equivalents		$	3,353			$	3,954
Accounts receivable, net			1,084				1,409
Inventories, net			381				345
Deferred income taxes			416				431
Other current assets			650				740
Total current assets			5,884				6,879
Property, plant and equipment, net			530				549
Investments			285				316
Deferred income taxes			2,179				2,151
Goodwill			390				383
Other assets			157				145
Total assets		$	9,425			$	10,423
Liabilities and Stockholders' Equity
Current portion of long-term debt		$	4			$	4
Accounts payable			437				540
Accrued liabilities			1,536				1,706
Total current liabilities			1,977				2,250
Long-term debt			3,392				3,396
Other liabilities			1,962				2,011
Total Motorola Solutions, Inc. stockholders' equity			2,086				2,735
Noncontrolling interests			8				31
Total liabilities and stockholders' equity		$	9,425			$	10,423
Financial Ratios:
Net cash (debt)*		$	(43	)		$	554
*Net cash (debt) = 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
		April 4, 2015				March 29, 2014
Operating
Net earnings attributable to Motorola Solutions, Inc.		$	74			$	127
Earnings attributable to noncontrolling interests			1				-
Net earnings			75				127
Earnings (loss) from discontinued operations, net of tax			(13	)			42
Earnings from continuing operations, net of tax			88				85
Adjustments to reconcile Earnings from continuing operations to Net cash provided by operating activities:
Depreciation and amortization			41				40
Gain on sale of building and land			-				(21	)
Non-cash other charges (income)			1				(3	)
Share-based compensation expense			21				28
Gains on sales of investments and businesses, net			(46	)			(7	)
Deferred income taxes			23				22
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:
Accounts receivable			309				160
Inventories			(44	)			(12	)
Other current assets			26				16
Accounts payable and accrued liabilities			(252	)			(175	)
Other assets and liabilities			(16	)			(121	)
Net cash provided by operating activities from continuing operations			151				12
Investing
Acquisitions and investments, net			(74	)			(4	)
Proceeds from sales of investments and businesses, net			88				11
Capital expenditures			(33	)			(41	)
Proceeds from sales of property, plant and equipment			1				24
Net cash used for investing activities from continuing operations			(18	)			(10	)
Financing
Repayment of debt			(1	)			(1	)
Net proceeds from issuance of debt			-				4
Issuance of common stock			46				14
Repurchase of common stock			(653	)			(57	)
Excess tax benefit from share-based compensation			1				5
Payments of dividends			(75	)			(79	)
Distributions from discontinued operations			-				26
Net cash used for financing activities from continuing operations			(682	)			(88	)
Discontinued Operations
Net cash provided by operating activities from discontinued operations			-				34
Net cash used for investing activities from discontinued operations			-				(8	)
Net cash used for financing activities from discontinued operations			-				(26	)
Net cash provided by discontinued operations			-				-
Effect of exchange rate changes on cash and cash equivalents from continuing operations			(52	)			2
Net decrease in cash and cash equivalents			(601	)			(84	)
Cash and cash equivalents, beginning of period			3,954				3,225
Cash and cash equivalents, end of period		$	3,353			$	3,141
Financial Ratios:
Free cash flow*		$	118			$	(29	)
*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
		April 4,				March 29,
		2015				2014				% Change
Products		$	758			$	752			1	%
Services			465				476			-2	%
Total Motorola Solutions		$	1,223			$	1,228			0	%
Operating Earnings
		Three Months Ended
		April 4,				March 29,
		2015				2014				% Change
Products		$	64			$	39			64	%
Services			55				68			-19	%
Total Motorola Solutions		$	119			$	107			11	%
Operating Earnings %
		Three Months Ended
		April 4,				March 29,
		2015				2014
Products			8.4	%			5.2	%
Services			11.8	%			14.3	%
Total Motorola Solutions			9.7	%			8.7	%

																				GAAP-5
Motorola Solutions, Inc. and Subsidiaries
Regional Revenue Information
(In millions)
During the first quarter of 2015, we restructured our regions operationally separating the Asia Pacific and Middle East region into two regions which are now reflected as Asia Pacific ("AP") and Middle East ("ME"). As a result of this change, our sales force is better aligned and focused on the growth opportunities within each geographic region. Accordingly, we now report net sales in the following five geographic regions: North America, Latin America, Europe and Africa ("EA"), AP, and ME.
The Company’s regional net sales under the new regional alignment and as previously reported were as follows:
		Revised regional sales
		Q1			Q2			Q3			Q4			FY			FY			FY
		2014			2014			2014			2014			2014			2013			2012
North America			727			841			880			1,151			3,599			3,894			3,905
Latin America			125			134			109			140			508			518			577
EA			214			231			277			312			1,034			988			858
AP			141			168			151			185			645			749			816
ME			21			19			19			36			95			78			113
		$	1,228		$	1,393		$	1,436		$	1,824		$	5,881		$	6,227		$	6,269
		Regional sales as previously reported
		Q1			Q2			Q3			Q4			FY			FY			FY
		2014			2014			2014			2014			2014			2013			2012
North America			727			841			880			1,151			3,599			3,894			3,905
Latin America			125			134			109			140			508			518			577
EA			214			231			277			312			1,034			988			858
APME			162			187			170			221			740			827			929
		$	1,228		$	1,393		$	1,436		$	1,824		$	5,881		$	6,227		$	6,269

															Non-GAAP-1
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Adjustments (Intangibles Amortization Expense, Share-Based Compensation Expense and Highlighted Items)
Q1 2015
				PBT				Tax				PAT
Highlighted Items		Statement Line		(Inc)/Exp				Inc/(Exp)				(Inc)/Exp				EPS impact
Share-based compensation expense		Cost of sales, SG&A and R&D		$	21			$	7			$	14			$	0.06
Reorganization of business charges		Cost of sales and Other charges			14				4				10				0.05
Intangibles amortization expense		Intangibles amortization			2				1				1				-
Gain on sale of equity investment		Gains on sales of investments and businesses, net			(46	)			(17	)			(29	)			(0.13	)
Total impact on Net earnings				$	(9	)		$	(5	)		$	(4	)		$	(0.02	)

													Non-GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Segment Information
(In millions)
Net Sales
		Three Months Ended
		April 4,				March 29,
		2015				2014				% Change
Products		$	758			$	752			1	%
Services			465				476			-2	%
Total Motorola Solutions		$	1,223			$	1,228			0	%
Non-GAAP Operating Earnings
		Three Months Ended
		April 4,				March 29,
		2015				2014				% Change
Products		$	90			$	52			73	%
Services			66				74			-11	%
Total Motorola Solutions		$	156			$	126			24	%
Non-GAAP Operating Earnings %
		Three Months Ended
		April 4,				March 29,
		2015				2014
Products			11.9	%			6.9	%
Services			14.2	%			15.5	%
Total Motorola Solutions			12.8	%			10.3	%

					Non-GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Operating Earnings after Non-GAAP Adjustments
Q1 2015
		TOTAL		Products		Services
Net sales		$ 1,223		$ 758		$ 465
Operating earnings ("OE")		$ 119		$ 64		$ 55
Above-OE non-GAAP adjustments:
Share-based compensation expense		21		14		7
Reorganization of business charges		14		10		4
Intangibles amortization expense		2		2		-
Total above-OE non-GAAP adjustments		37		26		11
Operating earnings after non-GAAP adjustments		$ 156		$ 90		$ 66
Operating earnings as a percentage of net sales - GAAP		9.7%		8.4%		11.8%
Operating earnings as a percentage of net sales - after non-GAAP adjustments		12.8%		11.9%		14.2%

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