Motorola Solutions (MSI) 8-K Results of Operations and Financial Condition

Exhibit 99.1

GAAP-1

Motorola Solutions, Inc. and Subsidiaries

GAAP Segment Information

(In millions)

Net Sales

	Q1 2014
Products	$	753
Services		475
Motorola Solutions, Inc.	$	1,228
	Q1 2013		Q2 2013		Q3 2013		Q4 2013		2013
Products	$	914	$	986	$	998	$	1,211	$	4,109
Services		482		511		519		606		2,118
Motorola Solutions, Inc.	$	1,396	$	1,497	$	1,517	$	1,817	$	6,227
	Q1 2012		Q2 2012		Q3 2012		Q4 2012		2012
Products	$	945	$	1,021	$	1,069	$	1,201	$	4,236
Services		442		516		511		563		2,033
Motorola Solutions, Inc.	$	1,387	$	1,537	$	1,580	$	1,764	$	6,269
									2011
Products									$	3,901
Services										1,837
Motorola Solutions, Inc.									$	5,738

Operating Earnings
	Q1 2014
Products	$	39
Services		68
Motorola Solutions, Inc.	$	107
	Q1 2013		Q2 2013		Q3 2013		Q4 2013		2013
Products	$	106	$	125	$	171	$	237	$	639
Services		68		78		75		88		308
Motorola Solutions, Inc.	$	174	$	203	$	246	$	325	$	947
	Q1 2012		Q2 2012		Q3 2012		Q4 2012		2012
Products	$	100	$	125	$	190	$	241	$	656
Services		52		65		62		86		264
Motorola Solutions, Inc.	$	152	$	190	$	252	$	327	$	920
									2011
Products									$	338
Services										260
Motorola Solutions, Inc.									$	598

Non-GAAP-1

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Financial Measures

The financial data presented on the following schedules Non-GAAP-2 through Non-GAAP-5 provide reconciliations of the Company’s Non-GAAP adjustments for the full fiscal years of 2011, 2012, and 2013, the four quarters of 2012 and 2013, and the first quarter of 2014 to bridge from GAAP Operating Earnings to Non-GAAP Operating Earnings.

The Company uses certain non-GAAP financial information to provide important supplemental information to both management and investors regarding financial and business trends used in assessing our financial condition and results of operations. We have disclosed this non-GAAP financial information in our past quarterly earnings releases and are providing the same non-GAAP financial information in Exhibit 99.1 to this Form 8-K, as adjusted to reflect our new segments, so that investors have the same financial data that we use to make comparisons with our historical operating results and analyze our underlying performance.

The non-GAAP financial measures have been presented for informational purposes only. The non-GAAP financials measures do not purport to project our results of operations or financial condition for any period.

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 its businesses and to evaluate results relative to certain incentive compensation targets. Management uses operating results excluding these items because it believes this 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 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 can be 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.

Non-GAAP-2

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Adjustments Bridge

(In millions)

FY 2011

	MSI			Products			Services
Net sales	$	5,738		$	3,901		$	1,837
Operating earnings (“OE”)	$	598		$	338		$	260
Above-OE non-GAAP adjustments:
Share-based compensation expense		133			87			46
Reorganization of business charges		40			27			13
Intangibles amortization expense		5			5			—
Legal matters		90			61			29
Total above-OE non-GAAP adjustments		268			180			88
Operating earnings after non-GAAP adjustments	$	866		$	518		$	348
Operating earnings as a percentage of net sales—GAAP		10.4	%		8.7	%		14.2	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		15.1	%		13.3	%		18.9	%

Non-GAAP-3

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Adjustments Bridge

(In millions)

Q1 2012

	MSI			Products			Services
Net sales	$	1,387		$	945		$	442
Operating earnings (“OE”)	$	152		$	100		$	52
Above-OE non-GAAP adjustments:
Share-based compensation expense		34			22			12
Reorganization of business charges		7			5			2
Total above-OE non-GAAP adjustments		41			27			14
Operating earnings after non-GAAP adjustments	$	193		$	127		$	66
Operating earnings as a percentage of net sales—GAAP		11.0	%		10.6	%		11.8	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		13.9	%		13.4	%		14.9	%
Q2 2012
	MSI			Products			Services
Net sales	$	1,537		$	1,021		$	516
Operating earnings	$	190		$	125		$	65
Above-OE non-GAAP adjustments:
Share-based compensation expense		42			28			14
Reorganization of business charges		9			6			3
Total above-OE non-GAAP adjustments		51			34			17
Operating earnings after non-GAAP adjustments	$	241		$	159		$	82
Operating earnings as a percentage of net sales—GAAP		12.4	%		12.2	%		12.6	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		15.7	%		15.6	%		15.9	%
Q3 2012
	MSI			Products			Services
Net sales	$	1,580		$	1,069		$	511
Operating earnings	$	252		$	190		$	62
Above-OE non-GAAP adjustments:
Share-based compensation expense		35			23			12
Reorganization of business charges		8			5			3
Total above-OE non-GAAP adjustments		43			28			15
Operating earnings after non-GAAP adjustments	$	295		$	218		$	77
Operating earnings as a percentage of net sales—GAAP		15.9	%		17.8	%		12.1	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		18.7	%		20.4	%		15.1	%
Q4 2012
	MSI			Products			Services
Net sales	$	1,764		$	1,201		$	563
Operating earnings	$	327		$	241		$	86
Above-OE non-GAAP adjustments:
Share-based compensation expense		36			23			13
Reorganization of business charges		9			6			3
Legal matter		(16	)		(11	)		(5	)
Total above-OE non-GAAP adjustments		29			18			11
Operating earnings after non-GAAP adjustments	$	356		$	259		$	97
Operating earnings as a percentage of net sales—GAAP		18.5	%		20.1	%		15.3	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		20.2	%		21.6	%		17.2	%
FY 2012
	MSI			Products			Services
Net sales	$	6,269		$	4,236		$	2,033
Operating earnings	$	920		$	656		$	264
Above-OE non-GAAP adjustments:
Share-based compensation expense		146			95			51
Reorganization of business charges		33			22			11
Intangibles amortization expense		1			1			—
Legal matter		(16	)		(11	)		(5	)
Total above-OE non-GAAP adjustments		164			107			57
Operating earnings after non-GAAP adjustments	$	1,084		$	763		$	321
Operating earnings as a percentage of net sales—GAAP		14.7	%		15.5	%		13.0	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		17.3	%		18.0	%		15.8	%

Non-GAAP-4

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Adjustments Bridge

(In millions)

Q1 2013

	MSI			Products			Services
Net sales	$	1,396		$	914		$	482
Operating earnings (“OE”)	$	174		$	106		$	68
Above-OE non-GAAP adjustments:
Share-based compensation expense		35			23			12
Reorganization of business charges		7			5			2
Total above-OE non-GAAP adjustments		42			28			14
Operating earnings after non-GAAP adjustments	$	216		$	134		$	82
Operating earnings as a percentage of net sales—GAAP		12.5	%		11.6	%		14.1	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		15.5	%		14.7	%		17.0	%
Q2 2013
	MSI			Products			Services
Net sales	$	1,497		$	986		$	511
Operating earnings	$	203		$	125		$	78
Above-OE non-GAAP adjustments:
Share-based compensation expense		27			17			10
Reorganization of business charges		18			12			6
Total above-OE non-GAAP adjustments		45			29			16
Operating earnings after non-GAAP adjustments	$	248		$	154		$	94
Operating earnings as a percentage of net sales—GAAP		13.6	%		12.7	%		15.3	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		16.6	%		15.6	%		18.4	%
Q3 2013
	MSI			Products			Services
Net sales	$	1,517		$	998		$	519
Operating earnings	$	246		$	171		$	75
Above-OE non-GAAP adjustments:
Share-based compensation expense		29			19			10
Reorganization of business charges		21			14			7
Total above-OE non-GAAP adjustments		50			33			17
Operating earnings after non-GAAP adjustments	$	296		$	204		$	92
Operating earnings as a percentage of net sales—GAAP		16.2	%		17.1	%		14.5	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		19.5	%		20.4	%		17.7	%
Q4 2013
	MSI			Products			Services
Net sales	$	1,817		$	1,211		$	606
Operating earnings	$	325		$	237		$	88
Above-OE non-GAAP adjustments:
Share-based compensation expense		29			19			10
Reorganization of business charges		41			27			14
Total above-OE non-GAAP adjustments		70			46			24
Operating earnings after non-GAAP adjustments	$	395		$	283		$	112
Operating earnings as a percentage of net sales—GAAP		17.9	%		19.6	%		14.5	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		21.7	%		23.4	%		18.5	%
FY 2013
	MSI			Products			Services
Net sales	$	6,227		$	4,109		$	2,118
Operating earnings	$	947		$	639		$	308
Above-OE non-GAAP adjustments:
Share-based compensation expense		121			79			42
Reorganization of business charges		86			56			30
Intangibles amortization expense		1			1			—
Total above-OE non-GAAP adjustments		208			136			72
Operating earnings after non-GAAP adjustments	$	1,155		$	775		$	380
Operating earnings as a percentage of net sales—GAAP		15.2	%		15.6	%		14.5	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		18.5	%		18.9	%		17.9	%

Non-GAAP-5

Motorola Solutions, Inc. and Subsidiaries

Non-GAAP Adjustments Bridge

(In millions)

Q1 2014

	MSI			Products			Services
Net sales	$	1,228		$	753		$	475
Operating earnings (“OE”)	$	107		$	39		$	68
Above-OE non-GAAP adjustments:
Share-based compensation expense		29			19			10
Reorganization of business charges		10			6			4
Intangibles amortization expense		1			1			—
Gain on Sale of building and land		(21	)		(13	)		(8	)
Total above-OE non-GAAP adjustments		19			13			6
Operating earnings after non-GAAP adjustments	$	126		$	52		$	74
Operating earnings as a percentage of net sales—GAAP		8.7	%		5.2	%		14.3	%
Operating earnings as a percentage of net sales—after non-GAAP adjustments		10.3	%		6.9	%		15.6	%