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Press release from Business Wire

Motorola Solutions Reports Fourth-Quarter and Full-Year 2011 Financial Results

<p class='bwalignc'> <i>Record Fourth-Quarter and Full-Year Sales and Operating Earnings</i> </p>

Wednesday, January 25, 2012

Motorola Solutions Reports Fourth-Quarter and Full-Year 2011 Financial Results07:00 EST Wednesday, January 25, 2012 SCHAUMBURG, Ill. (Business Wire) -- Motorola Solutions, Inc. (NYSE: MSI): Fourth-quarter sales of $2.3 billion, up 5 percent from a year ago Fourth-quarter Government sales of $1.5 billion, up 6 percent from a year ago Fourth-quarter Enterprise sales of $753 million, up 3 percent from a year ago Repurchased $366 million of shares in the quarter; $1.1 billion for the full year Contributed an incremental $250 million to the U.S. pension plan in the quarter, with U.S. contributions for the full year totaling $480 million Ended the quarter with total cash* of $5.1 billion         Fourth Quarter   Full Year(In millions, except earnings per share)   2011   2010   Change   2011   2010   Change Total sales   $2,300   $2,185   5%   $8,203   $7,617   8% GAAP operating earnings   $276   $272   1%   $858   $751   14% Non-GAAP operating earnings   $444   $346   28%   $1,373   $1,064   29% GAAP EPS from continuing operations**   $0.54   $0.49   10%   $2.20   $0.72   206% Non-GAAP*** EPS from continuing operations**   $0.87   $0.64   36%   $2.61   $1.84   42% Click here for printable press release and financial tables. Motorola Solutions, Inc. (NYSE: MSI) announced today its fourth-quarter and full-year 2011 results highlighted by fourth-quarter sales of $2.3 billion, up 5 percent from the fourth quarter of 2010 and full-year sales of $8.2 billion, up 8 percent from 2010. The revenue growth reflects solid demand in all regions across both the Government and Enterprise segments. “Our record fourth quarter capped a very strong and exciting year for our company,” said Greg Brown, chairman and CEO of Motorola Solutions. “We streamlined and strengthened our portfolio, grew operating earnings more than five times revenue growth, expanded operating margins, generated strong cash flow and prioritized return of capital to our shareholders.” GAAP operating earnings in the fourth quarter of 2011 were $276 million or 12 percent of sales, compared to $272 million or 12 percent of sales in the fourth quarter of 2010. GAAP earnings per share from continuing operations** were $0.54, compared to a GAAP earnings of $0.49 in the fourth quarter of 2010. For the full year 2011, GAAP operating earnings were $858 million or 10 percent of sales, compared to $751 million or 10 percent of sales in 2010. GAAP earnings per share from continuing operations** were $2.20, compared to GAAP earnings of $0.72 in 2010. Non-GAAP*** operating earnings in the fourth quarter of 2011 were $444 million or 19 percent of sales, compared to $346 million or 16 percent of sales in the fourth quarter of 2010. Non-GAAP earnings per share from continuing operations were $0.87, compared to $0.64 in the fourth quarter of 2010. Non-GAAP financial information excludes after-tax net charges of approximately $0.33 per diluted share related to stock-based compensation expense, intangible assets amortization expense and highlighted items. Details on these Non-GAAP adjustments and the use of Non-GAAP measures are included later in this press release. For the full year 2011, Non-GAAP operating earnings were $1.4 billion or 17 percent of sales, compared to $1.1 billion or 14 percent of sales in 2010. Non-GAAP earnings per share from continuing operations were $2.61, compared to $1.84 in 2010. During the fourth quarter of 2011, the company generated $44 million in operating cashflow from continuing operations, which included a $250 million incremental contribution to the U.S. pension plan. The company ended the quarter with total cash of $5.1 billion while returning $366 million to shareholders through share repurchases during the quarter. Government segment sales were $1.5 billion, up 6 percent from the year-ago quarter. GAAP operating earnings were $226 million or 15 percent of sales compared to $181 million or 12 percent of sales in the year-ago quarter. Non-GAAP operating earnings were $307 million or 20 percent of sales compared to $221 million or 15 percent of sales in the year-ago quarter. For the full year 2011, Government segment sales were $5.4 billion, up 6 percent from 2010. GAAP operating earnings were $616 million or 11 percent of sales compared to $534 million or 11 percent of sales in 2010. Non-GAAP operating earnings were $833 million or 16 percent of sales compared to $637 million or 13 percent of sales in 2010. Government highlights: Secured multi-million dollar contracts with City of Atlanta; St. Louis County in Missouri; St. Johns, Seminole and Osceola counties in Florida; the state of Tennessee; the Washington State Patrol; the Western Australia Police Service; the Ecuador National Police; and the Mexico Federal Electric Commission Expanded award-winning APX™ mission-critical radio series to include the APX 4000 portable radio for public works, utilities and rural public safety users, making APX the first complete portfolio of Project 25 Phase 2 TDMA two-way portable radios in the industry Continued to demonstrate leadership by completing first commercial release of standards-based LTE technology for public safety and secured an additional LTE contract win in Irving, Texas Enterprise segment sales were $753 million, up 3 percent from the year-ago quarter, which included a $37 million decline in iDEN sales. GAAP operating earnings were $50 million or 7 percent of sales compared to $91 million or 12 percent of sales in the year-ago quarter. Non-GAAP operating earnings were $137 million or 18 percent of sales compared to $125 million or 17 percent of sales in the year-ago quarter. For the full year 2011, Enterprise segment sales were $2.8 billion, up 11 percent from 2010. GAAP operating earnings were $242 million or 9 percent of sales compared to $217 million or 8 percent of sales in 2010. Non-GAAP operating earnings were $540 million or 19 percent of sales compared to $427 million or 17 percent of sales in 2010. Enterprise highlights: Continued growth with demand in retail and transportation & logistics from key customers such as Lord & Taylor, UPS and Poste Italiane Launched the ET1 tablet, the first in an emerging category of enterprise-class tablet computers that brings the familiarity and popularity of a consumer-class user experience to a true enterprise-class device Introduced RhoElements, a state-of-the-art web-based application framework that allows businesses to quickly and cost-effectively develop and deploy web-based applications on mobile computers Results from Discontinued Operations The fourth-quarter GAAP profit from discontinued operations was $7 million, which substantially relates to the divestiture of the company's Point-to-Point (Orthogon) and Point-to-Multipoint (Canopy) wireless broadband networks businesses. First-Quarter and Full-Year Outlook Motorola Solutions' outlook for the first quarter of 2012 is for revenue growth of approximately 4 percent compared with the first quarter of 2011 and earnings per share from continuing operations of $0.50 to $0.55 per share. For the full-year 2012, the company expects revenue growth of approximately 5 percent compared with 2011 and operating earnings of approximately 17 percent of sales. This outlook excludes stock-based compensation expense, intangible assets amortization expense and charges associated with items of the variety typically highlighted by the company in its quarterly earnings releases. Consolidated GAAP Results A comparison of results from operations is as follows:     Fourth QuarterFull Year(In millions, except per share amounts)2011   20102011   2010                   Net sales 2,300 2,185 8,203 7,617 Gross margin 1,160 1,089 4,146 3,812 Operating earnings 276 272 858 751   Earnings from continuing operations** 177 167 747 244 Net earnings ** 184 292 1,158 633   Diluted earnings per common share from continuing operations: ** $0.54 $0.49 $2.20 $0.72   Weighted average diluted common shares outstanding   328.4   341.3   339.7   338.1 Highlighted Items, Stock-Based Compensation Expense and Intangible Assets Amortization Expense The table below includes highlighted items, stock-based compensation expense and intangible assets amortization expense for the fourth quarter of 2011.   Fourth Quarter(per diluted common share)2011       GAAP Earnings per Common Share from Continuing Operations   $0.54   Highlighted Items: Legal matter 0.08 Reorganization of business charges 0.05 Long-term financing receivable reserve 0.02 Tax expense related to undistributed foreign earnings 0.05 Tax benefit from audit settlements and agreements (0.05)       Total Highlighted Items   0.15   Stock-based compensation expense 0.09 Intangible assets amortization expense   0.09 Stock-Based Compensation Expense and Intangible Assets Amortization Expense   0.18       Total Non-GAAP Adjustments   0.33       Non-GAAP Earnings per Common Share   $0.87 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 Wednesday, Jan. 25. The conference call will be webcast live with audio and slides at www.motorolasolutions.com/investor. 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. We have provided these non-GAAP measurements to help investors better understand our core operating performance, enhance comparisons of core operating performance from period to period and allow better comparisons of operating performance to our 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. Stock-based compensation expense: The company has excluded stock-based compensation expense from its non-GAAP operating expenses and net income measurements. Although stock-based compensation is a key incentive offered to our 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 stock-based compensation expense primarily because it represents a significant non-cash expense. Stock-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. We can give no assurance that any future results or events discussed in these statements will be achieved. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our 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 our 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 first quarter and full year of 2012. Motorola Solutions cautions the reader that the risk factors below, as well as those on pages 12 through 25 in Item 1A of Motorola Solutions, Inc.'s 2010 Annual Report on Form 10-K, on page 46 in Item 1A of Motorola Solutions, Inc.'s First Quarter 2011 Quarterly Report on Form 10-Q, on page 50 in Item 1A of Motorola Solutions, Inc.'s Third Quarter 2011 Quarterly Report on Form 10-Q, 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; (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) potential 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; and (viii) the company's ability to access the capital markets on acceptable terms and conditions; (5) the company's ability to purchase sufficient materials, parts and components to meet customer demand, particularly in light of global economic conditions; (6) risks related to dependence on certain key suppliers, subcontractors, third-party distributors and other representatives; (7) the impact on the company's performance and financial results from strategic acquisitions or divestitures, including those that may occur in the future; (8) risks related to the company's manufacturing and business operations in foreign countries; (9) the creditworthiness of the company's customers and distributors, particularly purchasers of large infrastructure systems; (10) 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; (11) the ownership of certain logos, trademarks, trade names and service marks including “MOTOROLA” by Motorola Mobility Holdings, Inc.; (12) 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; (13) unexpected liabilities or expenses, including unfavorable outcomes to any pending or future litigation or regulatory or similar proceedings; (14) the impact of foreign currency fluctuations, including the negative impact of a strengthening U.S. dollar on the company when competing for business in foreign markets; (15) the impact of the percentage of cash and cash equivalents held outside of the United States; (16) the ability of the company to pay future dividends due to possible adverse market conditions or adverse impacts on the company's cash flow; (17) 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; (18) the impact of changes in governmental policies, laws or regulations; (19) the outcome of currently ongoing and future tax matters; and (20) negative consequences from the company's outsourcing of various activities, including certain manufacturing, information technology and administrative functions. 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 * 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 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 media center 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. ©2012 Motorola Solutions, Inc. All rights reserved.       GAAP-1Motorola Solutions, Inc. and SubsidiariesCondensed Consolidated Statements of Operations(In millions, except per share amounts)       Three Months EndedDecember 31, 2011December 31, 2010 Net sales from products $ 1,689 $ 1,626 Net sales from services   611     559   Net sales 2,300 2,185   Costs of products sales 774 743 Costs of services sales   366     353   Costs of sales 1,140 1,096     Gross margin   1,160     1,089     Selling, general and administrative expenses 498 515 Research and development expenditures 266 271 Other charges (income) 70 (20 ) Intangibles amortization   50     51   Operating earnings   276     272     Other income (expense): Interest expense, net (15 ) (32 ) Gain on sales of investments and businesses, net 2 5 Other   4     3   Total other income (expense)   (9 )   (24 )   Earnings from continuing operations before income taxes 267 248   Income tax expense   90     69   Earnings from continuing operations 177 179   Earnings from discontinued operations, net of tax   7     125   Net earnings 184 304   Less: Earnings attributable to noncontrolling interests   -     12   Net earnings attributable to Motorola Solutions, Inc. $ 184   $ 292     Amounts attributable to Motorola Solutions, Inc. common shareholders Earnings from continuing operations, net of tax $ 177 $ 167 Earnings from discontinued operations, net of tax   7     125   Net earnings $ 184   $ 292     Earnings per common share Basic: Continuing operations $ 0.55 $ 0.50 Discontinued operations   0.02     0.37   $ 0.57   $ 0.87     Diluted: Continuing operations $ 0.54 $ 0.49 Discontinued operations   0.02     0.37   $ 0.56   $ 0.86     Weighted average common shares outstanding Basic 323.1 335.9 Diluted   328.4     341.3           Percentage of Net Sales* Net sales from products 73.4 % 74.4 % Net sales from services   26.6 %   25.6 % Net sales   100 %   100 %   Costs of products sales 45.8 % 45.7 % Costs of services sales   59.9 %   63.1 % Costs of sales   49.6 %   50.2 %     Gross margin   50.4 %   49.8 %   Selling, general and administrative expenses 21.7 % 23.6 % Research and development expenditures 11.6 % 12.4 % Other charges 3.0 % -0.9 % Intangibles amortization   2.2 %   2.3 % Operating earnings   12.0 %   12.4 %   Other income (expense): Interest expense, net -0.7 % -1.5 % Gain on sales of investments and businesses, net 0.1 % 0.2 % Other   0.2 %   0.1 % Total other income (expense)   -0.4 %   -1.1 % Earnings from continuing operations before income taxes 11.6 % 11.4 % Income tax expense   3.9 %   3.2 % Earnings from continuing operations 7.7 % 8.2 %   Earnings from discontinued operations, net of tax   0.3 %   5.7 % Net earnings 8.0 % 13.9 %   Less: Earnings attributable to noncontrolling interests   0.0 %   0.5 % Net earnings attributable to Motorola Solutions, Inc.   8.0 %   13.4 %   * Percentages may not add up due to rounding         GAAP-2Motorola Solutions, Inc. and SubsidiariesCondensed Consolidated Statements of Operations(In millions, except per share amounts)           Year EndedDecember 31, 2011December 31, 2010December 31, 2009 Net sales from products $ 6,068 $ 5,616 $ 5,026 Net sales from services   2,135     2,001     1,921   Net sales 8,203 7,617 6,947   Costs of products sales 2,723 2,523 2,221 Costs of services sales   1,334     1,282     1,249   Costs of sales 4,057 3,805 3,470       Gross margin   4,146     3,812     3,477     Selling, general and administrative expenses 1,912 1,874 1,662 Research and development expenditures 1,035 1,037 993 Other charges (income) 141 (53 ) 37 Intangibles amortization   200     203     218   Operating earnings   858     751     567     Other income (expense): Interest expense, net (74 ) (129 ) (133 ) Gain on sales of investments and businesses, net 23 49 108 Other   (69 )   (7 )   91   Total other income (expense)   (120 )   (87 )   66     Earnings from continuing operations before income taxes 738 664 633   Income tax expense (benefit)   (3 )   403     188   Earnings from continuing operations 741 261 445   Earnings (loss) from discontinued operations, net of tax   411     389     (473 ) Net earnings 1,152 650 (28 )   Less: Earnings (loss) attributable to noncontrolling interests   (6 )   17     23   Net earnings attributable to Motorola Solutions, Inc. $ 1,158   $ 633   $ (51 )   Amounts attributable to Motorola Solutions, Inc. common shareholders Earnings from continuing operations, net of tax $ 747 $ 244 $ 422 Earnings (loss) from discontinued operations, net of tax   411     389     (473 ) Net earnings (loss) $ 1,158   $ 633   $ (51 )   Earnings per common share Basic: Continuing operations $ 2.24 $ 0.73 $ 1.29 Discontinued operations   1.23     1.17     (1.45 ) $ 3.47   $ 1.90   $ (0.16 )   Diluted: Continuing operations $ 2.20 $ 0.72 $ 1.28 Discontinued operations   1.21     1.15     (1.43 ) $ 3.41   $ 1.87   $ (0.15 )   Weighted average common shares outstanding Basic 333.8 333.3 327.9 Diluted   339.7     338.1     329.9               Percentage of Net Sales* Net sales from products 74.0 % 73.7 % 72.3 % Net sales from services   26.0 %   26.3 %   27.7 % Net sales   100 %   100 %   100 %   Costs of products sales 44.9 % 44.9 % 44.2 % Costs of services sales   62.5 %   64.1 %   65.0 % Costs of sales   49.5 %   50.0 %   49.9 %       Gross margin   50.5 %   50.0 %   50.1 %   Selling, general and administrative expenses 23.3 % 24.6 % 23.9 % Research and development expenditures 12.6 % 13.6 % 14.3 % Other charges (income) 1.7 % -0.7 % 0.5 % Intangibles amortization   2.4 %   2.7 %   3.1 % Operating earnings   10.5 %   9.9 %   8.2 %   Other income (expense): Interest expense, net -0.9 % -1.7 % -1.9 % Gain on sales of investments and businesses, net 0.3 % 0.6 % 1.6 % Other   -0.8 %   -0.1 %   1.3 % Total other income (expense)   -1.5 %   -1.1 %   1.0 % Earnings from continuing operations before income taxes 9.0 % 8.7 % 9.1 % Income tax expense (benefit)   0.0 %   5.3 %   2.7 % Earnings from continuing operations 9.0 % 3.4 % 6.4 %   Earnings (loss) from discontinued operations, net of tax   5.0 %   5.1 %   -6.8 % Net earnings 14.0 % 8.5 % -0.4 %   Less: Earnings (loss) attributable to noncontrolling interests   -0.1 %   0.2 %   0.3 % Net earnings attributable to Motorola Solutions, Inc.   14.1 %   8.3 %   -0.7 %   * Percentages may not add up due to rounding       GAAP-3Motorola Solutions, Inc. and SubsidiariesCondensed Consolidated Balance Sheets(In millions)     December 31,December 31,20112010 Assets Cash and cash equivalents $ 1,881 $ 4,208 Sigma Fund and short-term investments 3,210 4,655 Accounts receivable, net 1,866 1,547 Inventories, net 512 521 Deferred income taxes 613 871 Other current assets 676 748 Current assets held for disposition   10   4,604 Total current assets   8,768   17,154   Property, plant and equipment, net 896 922 Sigma Fund - 70 Investments 166 172 Deferred income taxes 2,375 1,920 Goodwill 1,428 1,429 Other assets 294 734 Non-current assets held for disposition   2   3,176 Total assets$13,929$25,577   Liabilities and Stockholders' Equity Notes payable and current portion of long-term debt $ 405 $ 605 Accounts payable 677 731 Accrued liabilities 2,721 2,574 Current liabilities held for disposition   12   4,800 Total current liabilities   3,815   8,710   Long-term debt 1,130 2,098 Other liabilities 3,710 3,045 Non-current liabilities held for disposition - 737   Total Motorola Solutions, Inc. stockholders' equity   5,214   10,885   Noncontrolling interests   60   102   Total liabilities and stockholders' equity$13,929$25,577     Total cash* $ 5,091 $ 8,933 Net cash** 3,556 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       GAAP-4Motorola Solutions, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows(In millions)       Three Months EndedDecember 31, 2011December 31, 2010Operating Net earnings attributable to Motorola Solutions, Inc. $ 184 $ 292 Earnings attributable to noncontrolling interests   -     12   Net earnings 184 304 Earnings from discontinued operations, net of tax   7     125   Earnings from continuing operations 177 179 Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities: Depreciation and amortization 93 85 Non-cash other income (6 ) (13 ) Share-based compensation expense 45 36 Gain on sales of investments and businesses, net (1 ) (6 ) Deferred income taxes 32 (14 ) Changes in assets and liabilities, net of effects of acquisitions and dispositions: Accounts receivable (332 ) (3 ) Inventories 23 (21 ) Other current assets 68 5 Accounts payable and accrued liabilities 40 151 Other assets and liabilities   (95 )   (66 ) Net cash provided by operating activities from continuing operations   44     333   Investing Acquisitions and investments, net (5 ) (16 ) Proceeds from sales of investments and businesses, net 59 26 Capital expenditures (83 ) (81 ) Sales of Sigma Fund investments, net   1,283     423   Net cash provided by investing activities from continuing operations   1,254     352   Financing Repayment of debt (601 ) (527 ) Contributions to Motorola Mobility (150 ) - Issuance of common stock 44 27 Purchase of common stock (366 ) - Excess tax benefits from share-based compensation 3 - Payment of dividends (72 ) - Distributions from (to) discontinued operations   (37 )   152   Net cash used for financing activities from continuing operations   (1,179 )   (348 ) Discontinued Operations Net cash provided by (used for) operating activities from discontinued operations (38 ) 321 Net cash used for investing activities from discontinued operations - (183 ) Net cash provided by (used for) financing activities from discontinued operations 37 (152 )   Effect of exchange rate changes on cash and cash equivalents from discontinued operations   1     14   Net cash provided by (used for) financing activities from discontinued operations   -     -     Effect of exchange rate changes on cash and cash equivalents from continuing operations   (23 )   23   Net increase in cash and cash equivalents 96 360 Cash and cash equivalents, beginning of period   1,785     3,848   Cash and cash equivalents, end of period $ 1,881   $ 4,208     Financial Ratios: Free cash flow* $ (39 ) $ 252   *Free cash flow = Net cash provided by operating activities - Capital expenditures         GAAP-5Motorola Solutions, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows(In millions)           Year EndedDecember 31, 2011December 31, 2010December 31, 2009Operating Net earnings (loss) attributable to Motorola Solutions, Inc. $ 1,158 $ 633 $ (51 ) Earnings (loss) attributable to noncontrolling interests   (6 )   17     23   Net earnings (loss) 1,152 650 (28 ) Earnings (loss) from discontinued operations, net of tax   411     389     (473 ) Earnings from continuing operations 741 261 445 Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities: Depreciation and amortization 366 342 388 Non-cash other charges (income) 34 (74 ) (72 ) Share-based compensation expense 168 144 137 Gain on sales of investments and businesses, net (21 ) (49 ) (108 ) Gain (Loss) from the extinguishment of long-term debt 81 12 (67 ) Deferred income taxes 63 384 47 Changes in assets and liabilities, net of effects of acquisitions and dispositions: Accounts receivable (250 ) (83 ) 102 Inventories (14 ) (111 ) 111 Other current assets 61 (48 ) 276 Accounts payable and accrued liabilities (191 ) 333 (621 ) Other assets and liabilities   (190 )   (308 )   (11 ) Net cash provided by operating activities from continuing operations   848     803     627   Investing Acquisitions and investments, net (32 ) (23 ) (17 ) Proceeds from sales of investments and businesses, net 1,123 264 357 Capital expenditures (186 ) (192 ) (136 ) Proceeds from sales of property, plant and equipment 6 27 1 Sales from (purchases of) Sigma Fund investments, net 1,509 453 (922 ) Proceeds from sales (purchases of) short-term investments, net   6     (6 )   186   Net cash provided by (used for) investing activities from continuing operations   2,426     523     (531 ) Financing Repayment of short-term borrowings, net - (5 ) (86 ) Repayment of debt (1,219 ) (1,011 ) (132 ) Contributions to Motorola Mobility (3,425 ) - - Issuance of common stock 192 179 116 Purchase of common stock (1,110 ) - - Excess tax benefits from share-based compensation 42 - - Payment of dividends (72 ) - (114 ) Distributions from (to) discontinued operations 64 797 (67 ) Other, net   -     -     6   Net cash used for financing activities from continuing operations   (5,528 )   (40 )   (277 ) Discontinued Operations Net cash provided by operating activities from discontinued operations 26 1,169 2 Net cash used for investing activities from discontinued operations (8 ) (343 ) (137 ) Net cash provided by (used for) financing activities from discontinued operations (64 ) (797 ) 67   Effect of exchange rate changes on cash and cash equivalents from discontinued operations   46     (29 )   68   Net cash provided by (used for) financing activities from discontinued operations   -     -     -     Effect of exchange rate changes on cash and cash equivalents from continuing operations   (73 )   53     (14 ) Net increase (decrease) in cash and cash equivalents (2,327 ) 1,339 (195 ) Cash and cash equivalents, beginning of period   4,208     2,869     3,064   Cash and cash equivalents, end of period $ 1,881   $ 4,208   $ 2,869     Financial Ratios: Free cash flow* $ 662 $ 611 $ 491   *Free cash flow = Net cash provided by operating activities - Capital expenditures         GAAP-6Motorola Solutions, Inc. and SubsidiariesSegment Information(In millions)   Summarized below are the Company's Net sales and Operating earnings by reportable segment for the three months and year ended December 31, 2011 and December 31, 2010.               Net Sales       Three Months Ended       December 31, 2011December 31, 2010% Change   Government $ 1,547 $ 1,454 6 % Enterprise   753   731 3 % Company Total $ 2,300 $ 2,185 5 %       Year Ended       December 31, 2011December 31, 2010% Change   Government $ 5,358 $ 5,049 6 % Enterprise   2,845   2,568 11 % Company Total $ 8,203 $ 7,617 8 %                 Operating Earnings       Three Months Ended       December 31, 2011December 31, 2010% Change   Government $ 226 $ 181 25 % Enterprise   50   91 -45 % Company Total $ 276 $ 272 1 %       Year Ended       December 31, 2011December 31, 2010% Change   Government $ 616 $ 534 15 % Enterprise   242   217 12 % Company Total $ 858 $ 751 14 %               Non-GAAP-1Motorola Solutions, Inc. and SubsidiariesNon-GAAP Adjustments Bridge(In millions, except per share amounts)                     Three Months EndedThree Months EndedDecember 31, 2011December 31, 2010   Non-GAAP     Non-GAAP   GAAP ResultsAdjustments andNon-GAAP ResultsGAAP ResultsAdjustments andNon-GAAP ResultsDiscontinuedDiscontinuedOperationsOperations             Net sales $ 2,300 $ - $ 2,300 $ 2,185 $ - $ 2,185 Costs of sales   1,140     9     1,131     1,096     11     1,085   Gross margin   1,160     (9 )   1,169     1,089     (11 )   1,100     Selling, general and administrative expenses 498 29 469 515 20 495 Research and development expenditures 266 10 256 271 12 259 Other charges 70 70 - (20 ) (20 ) - Intangibles amortization   50     50     -     51     51     -   Operating earnings   276     (168 )   444     272     (74 )   346     Other income (expense): Interest expense, net (15 ) - (15 ) (32 ) - (32 ) Gain on sales of investments and businesses, net 2 - 2 5 - 5 Other   4     -     4     3     -     3   Total other income (expense)   (9 )   -     (9 )   (24 )   -     (24 ) Earnings from continuing operations before income taxes 267 (168 ) 435 248 (74 ) 322 Income tax expense   90     (59 )   149     69     (23 )   92   Earnings from continuing operations 177 (109 ) 286 179 (51 ) 230   Earnings from discontinued operations, net of tax   7     7     -     125     125     -   Net earnings 184 (102 ) 286 304 74 230   Less: Earnings attributable to noncontrolling interests   -     -     -     12     -     12   Net earnings attributable to Motorola Solutions, Inc. $ 184   $ (102 ) $ 286   $ 292   $ 74   $ 218       Earnings from continuing operations, net of tax $ 177 $ (109 ) $ 286 $ 167 $ (51 ) $ 218 Earnings from discontinued operations, net of tax   7     7     -     125     125     -   Net earnings $ 184   $ (102 ) $ 286   $ 292   $ 74   $ 218     Earnings per common share Basic: Continuing operations $ 0.55 $ (0.34 ) $ 0.89 $ 0.50 $ (0.15 ) $ 0.65 Discontinued operations   0.02     0.02     -     0.37     0.37     -   $ 0.57   $ (0.32 ) $ 0.89   $ 0.87   $ 0.22   $ 0.65     Diluted: Continuing operations $ 0.54 $ (0.33 ) $ 0.87 $ 0.49 $ (0.15 ) $ 0.64 Discontinued operations   0.02     0.02     -     0.37     0.37     -   $ 0.56   $ (0.31 ) $ 0.87   $ 0.86   $ 0.22   $ 0.64     Weighted average common shares outstanding Basic 323.1 323.1 323.1 335.9 335.9 335.9 Diluted   328.4     328.4     328.4     341.3     341.3     341.3       Percentage of Net Sales*         Net sales 100 % 100 % 100 % 100 % Costs of sales   49.6 %   49.2 %   50.2 %   49.7 % Gross margin   50.4 %   50.8 %   49.8 %   50.3 %   Selling, general and administrative expenses 21.7 % 20.4 % 23.6 % 22.7 % Research and development expenditures 11.6 % 11.1 % 12.4 % 11.9 % Other charges 3.0 % 0.0 % -0.9 % 0.0 % Intangibles amortization   2.2 %   0.0 %   2.3 %   0.0 % Operating earnings   12.0 %   19.3 %   12.4 %   15.8 %   Other income (expense): Interest expense, net -0.7 % -0.7 % -1.5 % -1.5 % Gain on sales of investments and businesses, net 0.1 % 0.1 % 0.2 % 0.2 % Other   0.2 %   0.2 %   0.1 %   0.1 % Total other income (expense)   -0.4 %   -0.4 %   -1.1 %   -1.1 % Earnings from continuing operations before income taxes 11.6 % 18.9 % 11.4 % 14.7 % Income tax expense   3.9 %   6.5 %   3.2 %   4.2 % Earnings from continuing operations 7.7 % 12.4 % 8.2 % 10.5 %   Earnings from discontinued operations, net of tax   0.3 %   0.0 %   5.7 %   0.0 % Net earnings 8.0 % 12.4 % 13.9 % 10.5 %   Less: Earnings attributable to noncontrolling interests   0.0 %   0.0 %   0.5 %   0.5 % Net earnings attributable to Motorola Solutions, Inc.   8.0 %   12.4 %   13.4 %   10.0 %   * Percentages may not add up due to rounding               Non-GAAP-2Motorola Solutions, Inc. and SubsidiariesNon-GAAP Adjustments Bridge(In millions, except per share amounts)                     Year EndedYear EndedDecember 31, 2011December 31, 2010   Non-GAAP     Non-GAAP   GAAP ResultsAdjustments andNon-GAAP ResultsGAAP ResultsAdjustments andNon-GAAP ResultsDiscontinuedDiscontinuedOperationsOperations             Net sales $ 8,203 $ - $ 8,203 $ 7,617 $ - $ 7,617 Costs of sales   4,057     26     4,031     3,805     37     3,768   Gross margin   4,146     (26 )   4,172     3,812     (37 )   3,849     Selling, general and administrative expenses 1,912 83 1,829 1,874 82 1,792 Research and development expenditures 1,035 65 970 1,037 44 993 Other charges 141 141 - (53 ) (53 ) - Intangibles amortization   200     200     -     203     203     -   Operating earnings   858     (515 )   1,373     751     (313 )   1,064     Other income (expense): Interest expense, net (74 ) - (74 ) (129 ) - (129 ) Gain on sales of investments and businesses, net 23 - 23 49 31 18 Other   (69 )   (81 )   12     (7 )   -     (7 ) Total other income (expense)   (120 )   (81 )   (39 )   (87 )   31     (118 )   Earnings from continuing operations before income taxes 738 (596 ) 1,334 664 (282 ) 946   Income tax expense   (3 )   (455 )   452     403     97     306   Earnings from continuing operations 741 (141 ) 882 261 (379 ) 640   Earnings from discontinued operations, net of tax   411     411     -     389     389     -   Net earnings 1,152 270 882 650 10 640   Less: Earnings (loss) attributable to noncontrolling interests   (6 )   -     (6 )   17     -     17   Net earnings attributable to Motorola Solutions, Inc. $ 1,158   $ 270   $ 888   $ 633   $ 10   $ 623       Earnings from continuing operations, net of tax $ 747 $ (141 ) $ 888 $ 244 $ (379 ) $ 623 Earnings from discontinued operations, net of tax   411     411     -     389     389     -   Net earnings $ 1,158   $ 270   $ 888   $ 633   $ 10   $ 623     Earnings per common share Basic: Continuing operations $ 2.24 $ (0.42 ) $ 2.66 $ 0.73 $ (1.14 ) $ 1.87 Discontinued operations   1.23     1.23     -     1.17     1.17     -   $ 3.47   $ 0.81   $ 2.66   $ 1.90   $ 0.03   $ 1.87     Diluted: Continuing operations $ 2.20 $ (0.41 ) $ 2.61 $ 0.72 $ (1.12 ) $ 1.84 Discontinued operations   1.21     1.21     -     1.15     1.15     -   $ 3.41   $ 0.80   $ 2.61   $ 1.87   $ 0.03   $ 1.84     Weighted average common shares outstanding Basic 333.8 333.8 333.8 333.3 333.3 333.3 Diluted   339.7     339.7     339.7     338.1     338.1     338.1       Percentage of Net Sales*         Net sales 100 % 100 % 100 % 100 % Costs of sales   49.5 %   49.1 %   50.0 %   49.5 % Gross margin   50.5 %   50.9 %   50.0 %   50.5 %   Selling, general and administrative expenses 23.3 % 22.3 % 24.6 % 23.5 % Research and development expenditures 12.6 % 11.8 % 13.6 % 13.0 % Other charges 1.7 % 0.0 % -0.7 % 0.0 % Intangibles amortization   2.4 %   0.0 %   2.7 %   0.0 % Operating earnings   10.5 %   16.7 %   9.9 %   14.0 %   Other income (expense): Interest expense, net -0.9 % -0.9 % -1.7 % -1.7 % Gain on sales of investments and businesses, net 0.3 % 0.3 % 0.6 % 0.2 % Other   -0.8 %   0.1 %   -0.1 %   -0.1 % Total other income (expense)   -1.5 %   -0.5 %   -1.1 %   -1.5 % Earnings from continuing operations before income taxes 9.0 % 16.3 % 8.7 % 12.4 % Income tax expense   0.0 %   5.5 %   5.3 %   4.0 % Earnings from continuing operations 9.0 % 10.8 % 3.4 % 8.4 %   Earnings from discontinued operations, net of tax   5.0 %   0.0 %   5.1 %   0.0 % Net earnings 14.0 % 10.8 % 8.5 % 8.4 %   Less: Earnings attributable to noncontrolling interests   -0.1 %   -0.1 %   0.2 %   0.2 % Net earnings attributable to Motorola Solutions, Inc.   14.1 %   10.8 %   8.3 %   8.2 %   * Percentages may not add up due to rounding         Non-GAAP-3Motorola Solutions, Inc. and SubsidiariesOperating Earnings after Non-GAAP Adjustments                   Q1 2011                 TOTALGovernmentEnterprise Net sales $ 1,834 $ 1,167 $ 667 Operating earnings       $ 169   $ 99   $ 70     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       $ 266   $ 134   $ 132         Operating earnings as a percentage of net sales - GAAP 9.2 % 8.5 % 10.5 % Operating earnings as a percentage of net sales - after non-GAAP adjustments   14.5 %   11.5 %   19.8 %                   Q2 2011               TOTALGovernmentEnterprise Net sales $ 1,984 $ 1,284 $ 700 Operating earnings       $ 159   $ 105   $ 54     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       $ 304   $ 168   $ 136         Earnings (loss) from discontinued operations, net of tax 8.0 % 8.2 % 7.7 % Operating earnings as a percentage of net sales - after non-GAAP adjustments   15.3 %   13.1 %   19.4 %                   Q3 2011               TOTALGovernmentEnterprise Net sales $ 2,085 $ 1,360 $ 725 Operating earnings       $ 254   $ 186   $ 68     Above-OE non-GAAP adjustments by P&L statement line: Statement Line Stock-based compensation expense Cost of sales 6 4 2 Stock-based compensation expense SG&A and R&D 39 26 13 Reorganization of business charges Other charges 10 7 3 Intangibles amortization expense Intangibles amortization   50     1     49   Less: Total above-OE non-GAAP adjustments 105 38 67               Operating earnings after non-GAAP adjustments       $ 359   $ 224   $ 135         Operating earnings as a percentage of net sales - GAAP 12.2 % 13.7 % 9.4 % Operating earnings as a percentage of net sales - after non-GAAP adjustments   17.2 %   16.5 %   18.6 %                   Q4 2011               TOTALGovernmentEnterprise Net sales $ 2,300 $ 1,547 $ 753 Operating earnings       $ 276   $ 226   $ 50     Above-OE non-GAAP adjustments by P&L statement line: Statement Line Reorganization of business charges Cost of sales $ 3 $ 2 $ 1 Stock-based compensation expense Cost of sales 6 4 2 Stock-based compensation expense SG&A and R&D 39 25 14 Legal matters, net Other charges 40 26 14 Reorganization of business charges Other charges 20 13 7 Long-term financing receivable reserve Other charges 10 10 - Intangibles amortization expense Intangibles amortization   50     1     49   Less: Total above-OE non-GAAP adjustments 168 81 87               Operating earnings after non-GAAP adjustments       $ 444   $ 307   $ 137         Operating earnings as a percentage of net sales - GAAP 12.0 % 14.6 % 6.6 % Operating earnings as a percentage of net sales - after non-GAAP adjustments   19.3 %   19.8 %   18.2 %                   FY 2011               TOTALGovernmentEnterprise Net sales $ 8,203 $ 5,358 $ 2,845 Operating earnings       $ 858   $ 616   $ 242     Above-OE non-GAAP adjustments by P&L statement line: Statement Line Reorganization of business charges Cost of sales $ 6 $ 5 $ 1 Stock-based compensation expense Cost of sales 20 13 7 Stock-based compensation expense SG&A and R&D 148 98 50 Legal matters, net Other charges 88 58 30 Reorganization of business charges Other charges 52 35 17 Pension plan adjustments, net Other charges (9 ) (6 ) (3 ) Long-term financing receivable reserve Other charges 10 10 0 Intangibles amortization expense Intangibles amortization   200     4     196   Less: Total above-OE non-GAAP adjustments 515 217 298               Operating earnings after non-GAAP adjustments       $ 1,373   $ 833   $ 540         Operating earnings as a percentage of net sales - GAAP 10.5 % 11.5 % 8.5 % Operating earnings as a percentage of net sales - after non-GAAP adjustments   16.7 %   15.5 %   19.0 %           Non-GAAP-4Motorola Solutions, Inc. and SubsidiariesNon-GAAP Adjustments (Intangibles Amortization Expense, Stock-Based Compensation Expense and Highlighted Items)                       Q1 2011   PBTTaxPATHighlighted ItemsStatement Line(Inc)/ExpInc/(Exp)(Inc)/ExpEPS 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 0.01 Reduction in deferred tax valuation allowance Income tax benefit - 244 (244 ) (0.71 )         -   Total continuing operations impact $ 97 $ 277 $ (180 ) $ (0.53 )                       Q2 2011   PBTTaxPATHighlighted ItemsStatement Line(Inc)/ExpInc/(Exp)(Inc)/ExpEPS 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                       Q3 2011   PBTTaxPATHighlighted ItemsStatement Line(Inc)/ExpInc/(Exp)(Inc)/ExpEPS impact   Intangibles amortization expense Intangibles amortization 50 18 32 0.10 Stock-based compensation expense Cost of sales, SG&A and R&D 45 14 31 0.09 Reorganization of business charges Other charges   10     3     7     0.02   Total continuing operations impact $ 105 $ 35 $ 70 $ 0.21                       Q4 2011   PBTTaxPATHighlighted ItemsStatement Line(Inc)/ExpInc/(Exp)(Inc)/ExpEPS impact   Intangibles amortization expense Intangibles amortization 50 18 32 0.09 Stock-based compensation expense Cost of sales, SG&A and R&D 45 14 31 0.09 Legal matters, net Other charges 40 15 25 0.08 Reorganization of business charges Cost of sales and Other charges 23 7 16 0.05 Long-term financing receivable reserve Other charges 10 4 6 0.02 Tax expense related to undistributed foreign earnings Income tax (expense) benefit - (17 ) 17 0.05 Tax benefit from audit settlements and agreements Income tax (expense) benefit   -     18     (18 )   (0.05 ) Total continuing operations impact $ 168 $ 59 $ 109 $ 0.33                       FY 2011   PBTTaxPATHighlighted ItemsStatement Line(Inc)/ExpInc/(Exp)(Inc)/ExpEPS impact   Intangibles amortization expense Intangibles amortization 200 72 128 0.37 Stock-based compensation expense Cost of sales, SG&A and R&D 168 51 117 0.34 Legal matters, net Other charges 88 33 55 0.16 Debt extinguishment loss Other income (expense) 81 30 51 0.15 Reorganization of business charges Cost of sales and 'Other charges 58 18 40 0.12 Long-term financing receivable reserve Other charges 10 4 6 0.02 Pension plan adjustments, net Other charges (9 ) 2 (11 ) (0.03 ) Reduction in deferred tax valuation allowance Income tax benefit - 244 (244 ) (0.72 ) Tax expense related to undistributed foreign earnings Income tax (expense) benefit - (17 ) 17 0.05 Tax benefit from audit settlements and agreements Income tax (expense) benefit   -     18     (18 )   (0.05 ) Total continuing operations impact $ 596 $ 455 $ 141 $ 0.41 Media ContactsNick SweersMotorola Solutions+1 847-576-2462nicholas.sweers@motorolasolutions.comorTama McWhinneyMotorola Solutions+1 847-538-1865tama.mcwhinney@motorolasolutions.comorInvestor ContactsShep DunlapMotorola Solutions+1 847-576-6899shep.dunlap@motorolasolutions.comorJason WinklerMotorola Solutions+1 847-576-4995jason.winkler@motorolasolutions.com