Definitions

* Total cash = Cash and cash equivalents + Sigma Fund (current and non-current) and short-term investments

** Amounts attributable to Motorola Solutions, Inc. common stockholders

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

^† Gartner, Inc., MarketScope for the Ruggedized Handheld-Computer Market (Global), Tim Zimmerman, Ken Dulaney, William Clark, March 25, 2011.

About Motorola Solutions

Motorola Solutions is a leading provider of mission-critical communication products 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.

About Gartner’s MarketScope

The MarketScope is copyrighted 2011 by Gartner, Inc. and is reused with permission. The MarketScope is an evaluation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the MarketScope, and does not advise technology users to select only those vendors with the highest rating. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

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. ©2011 Motorola Solutions, Inc. All rights reserved.

Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
		Three Months Ended
		July 2, 2011				July 3, 2010
Net sales from products		$	1,524			$	1,438
Net sales from services			531				498
Net sales			2,055				1,936
Costs of products sales			685				656
Costs of services sales			331				315
Costs of sales			1,016				971
Gross margin			1,039				965
Selling, general and administrative expenses			492				471
Research and development expenditures			271				269
Other charges			56				14
Intangibles amortization			50				50
Operating earnings			170				161
Other income (expense):
Interest expense, net			(21	)			(35	)
Gain on sales of investments and businesses, net			1				33
Other			(77	)			(30	)
Total other income (expense)			(97	)			(32	)
Earnings from continuing operations before income taxes			73				129
Income tax expense			17				122
Earnings from continuing operations			56				7
Earnings from discontinued operations, net of tax			291				159
Net earnings			347				166
Less: Earnings (loss) attributable to noncontrolling interests			(2	)			4
Net earnings attributable to Motorola Solutions, Inc.		$	349			$	162
Amounts attributable to Motorola Solutions, Inc. common shareholders
Earnings from continuing operations, net of tax		$	58			$	3
Earnings from discontinued operations, net of tax			291				159
Net earnings		$	349			$	162
Earnings per common share
Basic:
Continuing operations		$	0.17			$	0.01
Discontinued operations			0.85				0.48
		$	1.02			$	0.49
Diluted:
Continuing operations		$	0.17			$	0.01
Discontinued operations			0.83				0.47
		$	1.00			$	0.48
Weighted average common shares outstanding
Basic			341.2				332.7
Diluted			348.5				337.9
		Percentage of Net Sales*
Net sales from products			74.2	%			74.3	%
Net sales from services			25.8	%			25.7	%
Net sales			100	%			100	%
Costs of products sales			44.9	%			45.6	%
Costs of services sales			62.3	%			63.3	%
Costs of sales			49.4	%			50.2	%
Gross margin			50.6	%			49.8	%
Selling, general and administrative expenses			23.9	%			24.3	%
Research and development expenditures			13.2	%			13.9	%
Other charges			2.7	%			0.7	%
Intangibles amortization			2.4	%			2.6	%
Operating earnings			8.3	%			8.3	%
Other income (expense):
Interest expense, net			-1.0	%			-1.8	%
Gain on sales of investments and businesses, net			0.0	%			1.7	%
Other			-3.7	%			-1.5	%
Total other income (expense)			-4.7	%			-1.7	%
Earnings from continuing operations before income taxes			3.6	%			6.7	%
Income tax expense			0.8	%			6.3	%
Earnings from continuing operations			2.7	%			0.4	%
Earnings from discontinued operations, net of tax			14.2	%			8.2	%
Net earnings			16.9	%			8.6	%
Less: Earnings (loss) attributable to noncontrolling interests			-0.1	%			0.2	%
Net earnings attributable to Motorola Solutions, Inc.			17.0	%			8.4	%
* Percentages may not add up due to rounding

Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
		Six Months Ended
		July 2, 2011				July 3, 2010
Net sales from products		$	2,948			$	2,729
Net sales from services			991				947
Net sales			3,939				3,676
Costs of products sales			1,341				1,250
Costs of services sales			617				608
Costs of sales			1,958				1,858
Gross margin			1,981				1,818
Selling, general and administrative expenses			960				925
Research and development expenditures			520				527
Other charges (income)			61				(16	)
Intangibles amortization			100				101
Operating earnings			340				281
Other income (expense):
Interest expense, net			(41	)			(68	)
Gain on sales of investments and businesses, net			19				40
Other			(72	)			(15	)
Total other income (expense)			(94	)			(43	)
Earnings from continuing operations before income taxes			246				238
Income tax expense (benefit)			(169	)			135
Earnings from continuing operations			415				103
Earnings from discontinued operations, net of tax			423				131
Net earnings			838				234
Less: Earnings (loss) attributable to noncontrolling interests			(8	)			3
Net earnings attributable to Motorola Solutions, Inc.		$	846			$	231
Amounts attributable to Motorola Solutions, Inc. common shareholders
Earnings from continuing operations, net of tax		$	423			$	100
Earnings from discontinued operations, net of tax			423				131
Net earnings		$	846			$	231
Earnings per common share
Basic:
Continuing operations		$	1.24			$	0.30
Discontinued operations			1.25				0.40
		$	2.49			$	0.70
Diluted:
Continuing operations		$	1.22			$	0.30
Discontinued operations			1.22				0.39
		$	2.44			$	0.69
Weighted average common shares outstanding
Basic			339.3				331.7
Diluted			346.3				336.1
		Percentage of Net Sales*
Net sales from products			74.8	%			74.2	%
Net sales from services			25.2	%			25.8	%
Net sales			100	%			100	%
Costs of products sales			45.5	%			45.8	%
Costs of services sales			62.3	%			64.2	%
Costs of sales			49.7	%			50.5	%
Gross margin			50.3	%			49.5	%
Selling, general and administrative expenses			24.4	%			25.2	%
Research and development expenditures			13.2	%			14.3	%
Other charges (income)			1.5	%			-0.4	%
Intangibles amortization			2.5	%			2.7	%
Operating earnings			8.6	%			7.6	%
Other income (expense):
Interest expense, net			-1.0	%			-1.8	%
Gain on sales of investments and businesses, net			0.5	%			1.1	%
Other			-1.8	%			-0.4	%
Total other income (expense)			-2.4	%			-1.2	%
Earnings from continuing operations before income taxes			6.2	%			6.5	%
Income tax expense (benefit)			-4.3	%			3.7	%
Earnings from continuing operations			10.5	%			2.8	%
Earnings from discontinued operations, net of tax			10.7	%			3.6	%
Net earnings			21.3	%			6.4	%
Less: Earnings (loss) attributable to noncontrolling interests			-0.2	%			0.1	%
Net earnings attributable to Motorola Solutions, Inc.			21.5	%			6.3	%
* Percentages may not add up due to rounding

Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
		July 2,			December 31,
		2011			2010
Assets
Cash and cash equivalents		$	2,203		$	4,208
Sigma Fund and short-term investments			4,424			4,655
Accounts receivable, net			1,546			1,547
Inventories, net			522			521
Deferred income taxes			729			871
Other current assets			729			748
Current assets held for disposition			116			4,604
Total current assets			10,269			17,154
Property, plant and equipment, net			899			922
Sigma Fund			28			70
Investments			175			172
Deferred income taxes			2,063			1,920
Goodwill			1,429			1,429
Other assets			641			734
Non-current assets held for disposition			93			3,176
Total assets		$	15,597		$	25,577
Liabilities and Stockholders' Equity
Notes payable and current portion of long-term debt		$	606		$	605
Accounts payable			625			731
Accrued liabilities			2,790			2,574
Current liabilities held for disposition			110			4,800
Total current liabilities			4,131			8,710
Long-term debt			1,548			2,098
Other liabilities			3,015			3,045
Non-current liabilities held for disposition			79			737
Total Motorola Solutions, Inc. stockholders' equity			6,739			10,885
Noncontrolling interests			85			102
Total liabilities and stockholders' equity		$	15,597		$	25,577
Financial Ratios:
Total cash*		$	6,655		$	8,933
Net cash**			4,501			6,230
*Total cash = Cash and cash equivalents + Sigma Fund (current and non-current) + Short-term investments
**Net cash = Total cash - Notes payable and current portion of long-term debt - Long-term debt

Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
		Three Months Ended
		July 2, 2011				July 3, 2010
Operating
Net earnings attributable to Motorola Solutions, Inc.		$	349			$	162
Earnings (loss) attributable to the noncontrolling interests			(2	)			4
Net earnings			347				166
Earnings from discontinued operations, net of tax			291				159
Earnings from continuing operations			56				7
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities:
Depreciation and amortization			90				85
Non-cash other charges (income)			53				(5	)
Share-based compensation expense			39				36
Gain on sales of investments and businesses, net			(1	)			(33	)
Loss from the extinguishment of long-term debt			81				12
Deferred income taxes			104				237
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable			(87	)			(227	)
Inventories			(2	)			(21	)
Other current assets			22				80
Accounts payable and accrued liabilities			(117	)			53
Other assets and liabilities			(136	)			(121	)
Net cash provided by operating activities from continuing operations			102				103
Investing
Acquisitions and investments, net			(2	)			(3	)
Proceeds from sales of investments and businesses, net			1,026				221
Capital expenditures			(33	)			(37	)
Proceeds from sales of property, plant and equipment			3				-
Purchases of Sigma Fund investments, net			(975	)			(132	)
Proceed from sales (purchases) of short-term investments, net			6				(19	)
Net cash provided by investing activities from continuing operations			25				30
Financing
Repayment of short-term borrowings, net			-				(1	)
Repayment of debt			(616	)			(480	)
Issuance of common stock			58				5
Distribution from (to) discontinued operations			(136	)			133
Net cash used for financing activities from continuing operations			(694	)			(343	)
Discontinued Operations
Net cash provided by (used for) operating activities from discontinued operations			(153	)			143
Net cash used for investing activities from discontinued operations			(2	)			(39	)
Net cash provided by (used for) financing activities from discontinued operations			136				(133	)
Effect of exchange rate changes on cash and cash equivalents from discontinued operations			19				29
Net cash provided by (used for) financing activities from discontinued operations			-				-
Effect of exchange rate changes on cash and cash equivalents from continuing operations			6				(85	)
Net decrease in cash and cash equivalents			(561	)			(295	)
Cash and cash equivalents, beginning of period			2,764				3,188
Cash and cash equivalents, end of period		$	2,203			$	2,893
Financial Ratios:
Free cash flow*		$	69			$	66
*Free cash flow = Net cash provided by operating activities - Capital expenditures

Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
		Six Months Ended
		July 2, 2011				July 3, 2010
Operating
Net earnings attributable to Motorola Solutions, Inc.		$	846			$	231
Earnings (loss) attributable to the noncontrolling interests			(8	)			3
Net earnings			838				234
Earnings from discontinued operations, net of tax			423				131
Earnings from continuing operations			415				103
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities:
Depreciation and amortization			181				172
Non-cash other charges (income)			45				(37	)
Share-based compensation expense			78				69
Gain on sales of investments and businesses, net			(19	)			(40	)
Loss from the extinguishment of long-term debt			81				12
Deferred income taxes			(10	)			255
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable			88				(32	)
Inventories			(12	)			(36	)
Other current assets			9				10
Accounts payable and accrued liabilities			(338	)			(144	)
Other assets and liabilities			(185	)			(170	)
Net cash provided by operating activities from continuing operations			333				162
Investing
Acquisitions and investments, net			(2	)			(6	)
Proceeds from sales of investments and businesses, net			1,078				239
Capital expenditures			(60	)			(74	)
Proceeds from sales of property, plant and equipment			4				27
Proceeds from sales (purchases) of Sigma Fund investments, net			266				(248	)
Proceeds from sales (purchases) of short-term investments, net			6				(23	)
Net cash provided by (used for) investing activities from continuing operations			1,292				(85	)
Financing
Repayment of short-term borrowings, net			-				(5	)
Repayment of debt			(616	)			(481	)
Distribution of Motorola Mobility			(3,200	)			-
Issuance of common stock			128				68
Distribution from discontinued operations			75				531
Net cash provided by (used for) financing activities from continuing operations			(3,613	)			113
Discontinued Operations
Net cash provided by operating activities from discontinued operations			38				567
Net cash used for investing activities from discontinued operations			(8	)			(88	)
Net cash used for financing activities from discontinued operations			(75	)			(531	)
Effect of exchange rate changes on cash and cash equivalents from discontinued operations			45				52
Net cash provided by (used for) financing activities from discontinued operations			-				-
Effect of exchange rate changes on cash and cash equivalents from continuing operations			(17	)			(166	)
Net increase (decrease) in cash and cash equivalents			(2,005	)			24
Cash and cash equivalents, beginning of period			4,208				2,869
Cash and cash equivalents, end of period		$	2,203			$	2,893
Financial Ratios:
Free cash flow*		$	273			$	88
*Free cash flow = Net cash provided by operating activities - Capital expenditures

Motorola Solutions, Inc. and Subsidiaries
Segment Information
(In millions)
Summarized below are the Company's Net sales and Operating earnings by reportable segment for the three and six months ended July 2, 2011 and July 3, 2010.
Net Sales
		Three Months Ended
		July 2, 2011			July 3, 2010			% Change
Government		$	1,308		$	1,262		4	%
Enterprise			747			674		11	%
Company Total		$	2,055		$	1,936		6	%
		Six Months Ended
		July 2, 2011			July 3, 2010			% Change
Government		$	2,497		$	2,394		4	%
Enterprise			1,442			1,282		12	%
Company Total		$	3,939		$	3,676		7	%
Operating Earnings
		Three Months Ended
		July 2, 2011			July 3, 2010			% Change
Government		$	111		$	117		-5	%
Enterprise			59			44		34	%
Company Total		$	170		$	161		6	%
		Six Months Ended
		July 2, 2011			July 3, 2010			% Change
Government		$	215		$	209		3	%
Enterprise			125			72		74	%
Company Total		$	340		$	281		21	%

Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Adjustments Bridge
(In millions, except per share amounts)
		Three Months Ended												Three Months Ended
		July 2, 2011												July 3, 2010
		GAAP Results				Non-GAAP Adjustments and Discontinued Operations				Non-GAAP Results				GAAP Results				Non-GAAP Adjustments and Discontinued Operations				Non-GAAP Results
Net sales		$	2,055			$	-			$	2,055			$	1,936			$	-			$	1,936
Costs of sales			1,016				5				1,011				971				10				961
Gross margin			1,039				(5	)			1,044				965				(10	)			975
Selling, general and administrative expenses			492				25				467				471				21				450
Research and development expenditures			271				9				262				269				11				258
Other charges			56				56				-				14				14				-
Intangibles amortization			50				50				-				50				50				-
Operating earnings			170				(145	)			315				161				(106	)			267
Other income (expense):
Interest expense, net			(21	)			-				(21	)			(35	)			-				(35	)
Gain on sales of investments and businesses, net			1				-				1				33				31				2
Other			(77	)			(81	)			4				(30	)			-				(30	)
Total other income (expense)			(97	)			(81	)			(16	)			(32	)			31				(63	)
Earnings from continuing operations before income taxes			73				(226	)			299				129				(75	)			204
Income tax expense			17				(84	)			101				122				46				76
Earnings from continuing operations			56				(142	)			198				7				(121	)			128
Earnings from discontinued operations, net of tax			291				291				-				159				159				-
Net earnings			347				149				198				166				38				128
Less: Earnings (loss) attributable to noncontrolling interests			(2	)			-				(2	)			4				-				4
Net earnings attributable to Motorola Solutions, Inc.		$	349			$	149			$	200			$	162			$	38			$	124
Amounts attributable to Motorola Solutions, Inc. common shareholders
Earnings from continuing operations, net of tax		$	58			$	(142	)		$	200			$	3			$	(121	)		$	124
Earnings from discontinued operations, net of tax			291				291				-				159				159				-
Net earnings		$	349			$	149			$	200			$	162			$	38			$	124
Earnings per common share
Basic:
Continuing operations		$	0.17			$	(0.42	)		$	0.59			$	0.01			$	(0.36	)		$	0.37
Discontinued operations			0.85				0.85				-				0.48				0.48				-
		$	1.02			$	0.43			$	0.59			$	0.49			$	0.12			$	0.37
Diluted:
Continuing operations		$	0.17			$	(0.40	)		$	0.57			$	0.01			$	(0.36	)		$	0.37
Discontinued operations			0.83				0.83				-				0.47				0.47				-
		$	1.00			$	0.43			$	0.57			$	0.48			$	0.11			$	0.37
Weighted average common shares outstanding
Basic			341.2				341.2				341.2				332.7				332.7				332.7
Diluted			348.5				348.5				348.5				337.9				337.9				337.9
Percentage of Net Sales*
Net sales			100	%							100	%			100	%							100	%
Costs of sales			49.4	%							49.2	%			50.2	%							49.6	%
Gross margin			50.6	%							50.8	%			49.8	%							50.4	%
Selling, general and administrative expenses			23.9	%							22.7	%			24.3	%							23.2	%
Research and development expenditures			13.2	%							12.7	%			13.9	%							13.3	%
Other charges			2.7	%							0.0	%			0.7	%							0.0	%
Intangibles amortization			2.4	%							0.0	%			2.6	%							0.0	%
Operating earnings			8.3	%							15.3	%			8.3	%							13.8	%
Other income (expense):
Interest expense, net			-1.0	%							-1.0	%			-1.8	%							-1.8	%
Gain on sales of investments and businesses, net			0.0	%							0.0	%			1.7	%							0.1	%
Other			-3.7	%							0.2	%			-1.5	%							-1.5	%
Total other income (expense)			-4.7	%							-0.8	%			-1.7	%							-3.3	%
Earnings from continuing operations before income taxes			3.6	%							14.5	%			6.7	%							10.5	%
Income tax expense			0.8	%							4.9	%			6.3	%							3.9	%
Earnings from continuing operations			2.7	%							9.6	%			0.4	%							6.6	%
Earnings from discontinued operations, net of tax			14.2	%							0.0	%			8.2	%							0.0	%
Net earnings			16.9	%							9.6	%			8.6	%							6.6	%
Less: Earnings (loss) attributable to noncontrolling interests			-0.1	%							-0.1	%			0.2	%							0.2	%
Net earnings attributable to Motorola Solutions, Inc.			17.0	%							9.7	%			8.4	%							6.4	%
* Percentages may not add up due to rounding

Motorola Solutions, Inc. and Subsidiaries
Operating Earnings after Non-GAAP Adjustments
Q1 2011
			TOTAL				Government				Enterprise
Net sales			$	1,884			$	1,189			$	695
Operating earnings			$	170			$	104			$	66
Above-OE non-GAAP adjustments by P&L statement line:	Statement Line
Reorganization of business charges	Cost of sales			3				3				-
Stock-based compensation expense	Cost of sales			3				2				1
Stock-based compensation expense	SG&A and R&D			36				24				12
Reorganization of business charges	Other charges (income)			5				5				-
Intangibles amortization expense	Intangibles amortization			50				1				49
Less: Total above-OE non-GAAP adjustments				97				35				62
Operating earnings after non-GAAP adjustments			$	267			$	139			$	128
Operating earnings as a percentage of net sales - GAAP				9.0	%			8.7	%			9.5	%
Operating earnings as a percentage of net sales - after non-GAAP adjustments				14.2	%			11.7	%			18.4	%
Q2 2011
			TOTAL				Government				Enterprise
Net sales			$	2,055			$	1,308			$	747
Operating earnings			$	170			$	111			$	59
Above-OE non-GAAP adjustments by P&L statement line:	Statement Line
Stock-based compensation expense	Cost of sales			5				3				2
Stock-based compensation expense	SG&A and R&D			34				23				11
Legal matters, net	Other charges			48				32				16
Reorganization of business charges	Other charges			17				10				7
Pension plan adjustments, net	Other charges			(9	)			(6	)			(3	)
Intangibles amortization expense	Intangibles amortization			50				1				49
Less: Total above-OE non-GAAP adjustments				145				63				82
Operating earnings after non-GAAP adjustments			$	315			$	174			$	141
Operating earnings as a percentage of net sales - GAAP				8.3	%			8.5	%			7.9	%
Operating earnings as a percentage of net sales - after non-GAAP adjustments				15.3	%			13.3	%			18.9	%

	Motorola Solutions, Inc. and Subsidiaries
	Non-GAAP Adjustments (Intangibles Amortization Expense, Stock-Based Compensation Expense and Highlighted Items)
	Q1 2011
	Highlighted Items		Statement Line		PBT (Inc)/Exp				Tax Inc/(Exp)			PAT (Inc)/Exp				EPS impact
	Intangibles amortization expense		Intangibles amortization		$	50			$	18		$	32				0.09
	Stock-based compensation expense		Cost of sales, SG&A and R&D			39				11			28				0.08
	Reorganization of business charges		Cost of sales and Other charges (income)			8				4			4				0.02
	Reduction in deferred tax valuation allowance		Income tax benefit			-				244			(244	)			(0.71	)
																	-
	Total continuing operations impact				$	97			$	277		$	(180	)		$	(0.52	)
	Q2 2011
	Highlighted Items		Statement Line		PBT (Inc)/Exp				Tax Inc/(Exp)			PAT (Inc)/Exp				EPS impact
	Debt extinguishment loss		Other income (expense)		$	81			$	30		$	51				0.14
	Intangibles amortization expense		Intangibles amortization			50				18			32				0.09
	Legal matters, net		Other charges			48				18			30				0.08
	Stock-based compensation expense		Cost of sales, SG&A and R&D			39				12			27				0.08
	Reorganization of business charges		Other charges			17				4			13				0.04
	Pension plan adjustments, net		Other charges			(9	)			2			(11	)			(0.03	)
																	-
	Total continuing operations impact				$	226			$	84		$	142			$	0.40

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