Motorola Solutions Reports Third-Quarter 2012 Financial Results

• Sales of $2.2 billion, up 3 percent from a year ago
• Record Government sales of $1.5 billion, up 12 percent from a year ago
• GAAP earnings per share (EPS) from continuing operations* up 60 percent from a year ago
• Non-GAAP** EPS from continuing operations up 27 percent from a year ago
• Repurchased $308 million of shares in the quarter

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SCHAUMBURG, Ill. – Oct. 24, 2012 – Motorola Solutions, Inc. (NYSE: MSI) announced today its third-quarter 2012 results highlighted by sales of $2.2 billion, up 3 percent from the third quarter of 2011 and driven by strong demand in its Government segment. These results include an unfavorable currency exchange rate impact to revenues of $42 million, or approximately 2 percent.

“We had strong revenue and earnings growth, including record performance in our Government segment,” said Greg Brown, chairman and CEO of Motorola Solutions. “We expanded operating margins, managed our costs and grew earnings per share 27 percent driven by our operating performance and continued return of capital to shareholders.”

GAAP operating earnings in the third quarter of 2012 were $324 million or 15 percent of sales, compared to $254 million or 12.2 percent of sales in the third quarter of 2011. GAAP EPS from continuing operations was $0.72, compared to $0.45 in the third quarter of 2011.

Non-GAAP operating earnings in the third quarter of 2012 were $387 million or 18 percent of sales, compared to $359 million or 17.2 percent of sales in the third quarter of 2011. Non-GAAP EPS from continuing operations was $0.84, compared to $0.66 in the third quarter of 2011.

Non-GAAP financial information excludes after-tax expense of approximately $0.12 per diluted share related to share-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.

During the third quarter of 2012, the company generated $182 million in operating cash flow from continuing operations, including the impact of an early pension payment of $72 million. Additionally, the company repurchased $308 million in shares, paid $63 million in dividends and ended the quarter with total cash*** of $3.5 billion.

Government segment sales were $1.5 billion, up 12 percent from the year-ago quarter, driven by double-digit growth in North America and solid performance in EMEA and Latin America. GAAP operating earnings were $273 million or 17.9 percent of sales compared to $186 million or 13.7 percent in the year-ago quarter. Non-GAAP operating earnings were $310 million or 20.4 percent of sales compared to $224 million or 16.5 percent in the year-ago quarter.

Government highlights:

• Secured multimillion dollar contracts with the state of Alaska; the state of Ohio; Maui County in Hawaii; Prince George’s County in Maryland; York County in South Carolina; the City of Phoenix; the City of Glendale, Calif.; the City of Fort Wayne, Ind.; Rheinbahn public transit in Germany; Wuxi Metro in China; and Codelco Chuquicamata Mining in Chile
• Continued to expand family of APX™ Project 25 (P25) two-way radios including a new accountability solution for the Motorola Tactical Incident Command Solution, which helps incident commanders accurately and quickly keep track of on-scene operations; the APX 4500 mobile radio, which gives P25 interoperable communications for all first responders; and the APX 3000, which enables undercover officers to use a high-powered concealed portable radio
• At APCO (Association of Public-Safety Communications Officials) International, Motorola Solutions demonstrated how the company’s technology and expertise enhance a safer and thriving Connected City by delivering a comprehensive product portfolio and solutions that better serve – and protect – the Connected Officer, the Connected Patrol Vehicle and the Connected Fire Fighter. All integrated solutions enable our public-safety customers to stay connected and leverage technology with their very challenging jobs

Enterprise segment sales were $632 million, down 13 percent from the year-ago quarter, which included the anticipated decline in iDEN sales. GAAP operating earnings were $51 million or 8.1 percent of sales compared to $68 million or 9.4 percent in the year-ago quarter. Non-GAAP operating earnings were $77 million or 12.2 percent of sales compared to $135 million or 18.6 percent in the year-ago quarter.

Enterprise highlights:

• Secured contracts with key customers such as Best Buy, Pharmedium and Flowers Bakery in the United States, Aeon Technology in Shanghai and Grupo Polar Companies in Venezuel
• Introduced the MC67 mobile computer, an ultra-rugged device that offers HSPA+ WAN, which is targeted at task worker applications in the field such as parcel collection and delivery scanning, inventory management, sales order entry, direct store delivery (DSD) and route accounting
• Introduced the Wide-Area Network (WAN) version of the ET1 tablet that brings the ‘go-anywhere’ familiarity and popularity of a consumer-class user experience to a true enterprise-class device that offers enhanced durability, an optional modular barcode scanner and magnetic stripe reader, hot-swappable battery packs and secure system software

Fourth-Quarter and Full-Year 2012 Outlook

The company expects fourth-quarter sales to grow approximately 6 to 7 percent compared with the fourth quarter of 2011, with EPS from continuing operations of $0.98 to $1.03. The company is increasing its full-year 2012 outlook for sales growth to 6 to 6.5 percent to reflect revenues for Psion, which Motorola Solutions acquired on Oct. 1, 2012. Our EPS outlook excludes share-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: