ZEBRATECHNOLOGIESCORPORATION

Transcription

1 UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION WASHINGTON,DC20549 FORM8-K CURRENTREPORT PursuanttoSection13or15(d) ofthesecuritiesexchangeactof1934 Dateofreport(Dateofearliesteventreported):February14,2019 ZEBRATECHNOLOGIESCORPORATION (ExactNameofRegistrantasSpecifiedinCharter) Delaware (StateorOtherJurisdiction ofincorporation) (Commission FileNumber) (IRSEmployer IdentificationNo.) 3OverlookPoint,Lincolnshire,Illinois (AddressofPrincipalExecutiveOffices) Registrant stelephonenumber,includingareacode: (ZipCode) (FormerNameorFormerAddress,ifChangedSinceLastReport) ChecktheappropriateboxbelowiftheForm8-Kfilingisintendedtosimultaneouslysatisfythefilingobligationoftheregistrantunderanyofthefollowing provisions: WrittencommunicationspursuanttoRule425undertheSecuritiesAct(17CFR ) SolicitingmaterialpursuanttoRule14a-12undertheExchangeAct(17CFR240.14a-12) Pre-commencementcommunicationspursuanttoRule14d-2(b)undertheExchangeAct(17CFR240.14d-2(b)) Pre-commencementcommunicationspursuanttoRule13e-4(c)undertheExchangeAct(17CFR240.13c-4(c)) IndicatebycheckmarkwhethertheregistrantisanemerginggrowthcompanyasdefinedinRule405oftheSecuritiesActof1933( ofthischapter)or Rule12b-2oftheSecuritiesExchangeActof1934( b-2ofthischapter). Emerginggrowthcompany Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanynewor revisedfinancialaccountingstandardsprovidedpursuanttosection13(a)oftheexchangeact.

2 Item2.02. ResultsofOperationsandFinancialConditions. TheinformationcontainedinthisForm8-Kshallnotbedeemed"filed"forpurposesofSection18oftheSecuritiesExchangeActof1934,asamended (the"exchangeact"),orincorporatedbyreferenceinanyfilingunderthesecuritiesactof1933,asamended,ortheexchangeact,exceptasshallbeexpresslyset forthbyspecificreferenceinsuchafiling. OnFebruary14,2019,weannouncedourresultsofoperationsandfinancialpositionasofandforthefourthquarterandfullyearended 2018.ThepressreleaseisattachedheretoasExhibit99.1andisincorporatedhereinbyreference. Item9.01. FinancialStatementsandExhibits. (d)exhibits.thefollowingexhibitisbeingfurnishedherewith: ExhibitNumber DescriptionofExhibits 99.1 Registrant spressreleasedatedfebruary14,2019

3 SIGNATURES PursuanttotherequirementsoftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersigned hereuntodulyauthorized. ZEBRATECHNOLOGIESCORPORATION Date:February14,2019 By: /s/cristenkogl CristenKogl SVP,GeneralCounsel

4 EXHIBITINDEX ExhibitNumber DescriptionofExhibits 99.1 Registrant spressreleasedatedfebruary14,2019

5 Exhibit99.1 ZebraTechnologiesCorporation 3OverlookPoint Lincolnshire,IL60069USA ZebraTechnologiesAnnouncesFourth-QuarterandFull-Year2018Results Financial Highlights Strongfourth-quarternetsalesof$1,137million;year-over-yeargrowthof10.8% Fourth-quarternetincomeof$115millionandnetincomeperdilutedshareof$2.11 Fourth-quarternon-GAAPdilutedEPSincreased33%year-over-yearto$3.10 Fourth-quarteradjustedEBITDAincreased17.6%year-over-yearto$240million;andadjustedEBITDAmarginexpanded120bps year-over-yearto21.1% Generated$785millionofcashfromoperationsand$721millionoffreecashflowin2018 Lincolnshire,Ill.,Feb.14,2019 ZebraTechnologiesCorporation(NASDAQ:ZBRA),aninnovatorattheedgeoftheenterprisewith solutionsandpartnersthatenablebusinessestogainaperformanceedge,todayannouncedresultsforthefourthquarterandfullyearended Ourteamsexecutedwellinthefourthquarter,drivingustoanexceptionalfinishto2018.Sales,EBITDAmargin,andearningspershare, eachexceededouroutlook.strongfreecashflowenabledustoreduceournetdebtleverageratioto1.8x, saidandersgustafsson,chief executiveofficerofzebratechnologies. Ourmomentumcontinuesinto2019withourleadingportfolioofsolutionsandstrongorder backlog.wearewell-positionedtoaccelerateourstrategythroughorganicandinorganicinvestmentstodriveourenterpriseassetintelligence vision. $inmillions,exceptpershareamounts 4Q18 4Q17 Change FY18 FY17 Change Selectreportedmeasures: Netsales $ 1,137 $ 1, % $ 4,218 $ 3, % Grossprofit % 1,981 1, % Netincome ,775.0% ,376.5% Netincomeperdilutedshare $ 2.11 $ ,914.3% $ 7.76 $ ,325.0% SelectNon-GAAPmeasures: Adjustednetsales $ 1,137 $ 1, % $ 4,218 $ 3, % Organic net sales growth 9.1% 11.1% Adjustedgrossprofit % 1,988 1, % Adjusted gross margin 47.7% 45.8% 190 bps 47.1% 46.1% 100 bps AdjustedEBITDA % % Adjusted EBITDA margin 21.1% 19.9% 120 bps 20.7% 18.6% 210 bps Non-GAAPnetincome $ 169 $ % $ 598 $ % Non-GAAPearningsperdilutedshare $ 3.10 $ % $ $ % Reported(GAAP)results Netsaleswere$1,137millioninthefourthquarterof2018comparedto$1,026millioninthefourthquarterof2017.Netsalesinthe EnterpriseVisibility&Mobility("EVM")segmentwere$770millioninthefourthquarterof2018comparedwith$675millioninthefourth quarterof2017.assetintelligence&tracking("ait")segmentnetsaleswere$367millioninthefourthquarterof2018comparedto$351 millionintheprioryearperiod.fourth-quarter2018grossprofitwas$539millioncomparedto$469millioninthecomparableprioryear period.net

6 incomeforthefourthquarterof2018was$115million,or$2.11perdilutedshare,comparedtonetincomeof$4million,or$0.07per dilutedshare,forthefourthquarterof2017. Adjusted(Non-GAAP)results Consolidatedadjustednetsaleswere$1,137millioninthefourthquarterof2018comparedto$1,026millionintheprioryearperiod,an increaseof10.8%.consolidatedorganicnetsalesgrowthforthefourthquarterwas9.1%reflectinggrowthinallregions,ledbyapac, NorthAmericaandLatinAmerica.Fourth-quarteryear-over-yearorganicnetsalesgrowthwas11.6%intheEVMsegmentand4.3%inthe AITsegment. Consolidatedadjustedgrossmarginincreasedto47.7%forthefourthquarterof2018,comparedto45.8%intheprioryearperiod.This increasewasprimarilyduetofavorablebusinessmixandthefavorableimpactofcurrencychanges,partiallyoffsetbytheimpositionof tariffsoncertainproductsimportedfromchinaintotheunitedstates.adjustedoperatingexpensesincreasedinthefourthquarterof2018to $320millionfrom$287millionintheprioryearperiodprimarilyduetogrowthinthebusinessandincreasedincentivecompensation expenserelatedtoimprovedoperatingresults. AdjustedEBITDAforthefourthquarterof2018increasedto$240million,or21.1%ofadjustednetsales,comparedto$204million,or 19.9%ofadjustednetsales,forthefourthquarterof2017primarilyduetohighergrossprofitmargin. Non-GAAPnetincomeforthefourthquarterof2018was$169million,or$3.10perdilutedshare,comparedwith$126million,or$2.33 perdilutedshare,forthefourthquarterof2017.alowertaxrateandlowerinterestcostsalsocontributedtotheyear-over-yearimprovement. BalanceSheetandCashFlow Asof2018,thecompanyhadcashandcashequivalentsof$44millionandtotaldebtof$1,600million. Forthefullyear2018,freecashflowwas$721million,whichincludes$33millionreceivedfromcommencementofourprogramtofactor certainofthecompany'saccountsreceivables.thecompanygenerated$785millionofoperatingcashflowandincurredcapitalexpenditures of$64million.in2018,thecompanymadenetdebtrepaymentsof$657million.thecompanyalsomadecashinterestpaymentsof$90 millionandpaid$87millionincashinconnectionwithouracquisitionofxploretechnologies. Outlook FirstQuarter2019 Thecompanyexpectsfirst-quarter2019netsalestoincreaseapproximately6%to9%fromthefirstquarterof2018.Thisexpectation includesanapproximately basispointadditiveimpactfromtheacquisitionofxploretechnologies,andanapproximately100basis pointnegativeimpactfromforeigncurrencytranslation. AdjustedEBITDAmarginisexpectedtobeapproximately21%forthefirstquarterof2019.Non-GAAPearningsperdilutedshareare expectedtobeintherangeof$2.75to$2.95.thisassumesanadjustedeffectivetaxrateofapproximately16%. FullYear2019 Thecompanyexpectsfull-year2019netsalestoincreaseapproximately4%to7%from2018.Thisexpectationincludesanapproximately1 percentagepointpositiveimpactfromtheacquisitionofxploretechnologies,andanapproximately50basispointnegativeimpactfrom foreigncurrencytranslation. AdjustedEBITDAmarginisexpectedtobeslightlyhigherthan21%forthefull-year2019,favorableto2018. Forthefull-year2019,thecompanyexpectstogeneratefreecashflowofatleast$625million. TheoutlookamountsprovidedabovedonotincludeanyprojectedresultsfromtheproposedacquisitionofTemptimeCorporation,whichis expectedtocloseinthefirstquarterof2019.

7 ConferenceCallNotification InvestorsareinvitedtolistentoalivewebcastofZebra sconferencecallregardingthecompany sfinancialresultsforthefourthquarterand fullyearof2018.theconferencecallwillbeheldtoday,thursday,feb.14,at7:30a.m.centraltime(8:30a.m.easterntime).toviewthe webcast,visittheinvestorrelationssectionofthecompany swebsiteatinvestors.zebra.com. AboutZebra Zebra(NASDAQ:ZBRA)empowersthefrontlineofbusinessinretail/ecommerce,manufacturing,transportationandlogistics,healthcare andotherindustriestoachieveaperformanceedge.withmorethan10,000partnersacross100countries,wedeliverindustry-tailored,endto-endsolutionsthatintelligentlyconnectpeople,assetsanddatatohelpourcustomersmakebusiness-criticaldecisions.ourmarket-leading solutionselevatetheshoppingexperience,trackandmanageinventoryaswellasimprovesupplychainefficiencyandpatientcare.ranked onforbes listofamerica sbestemployersforthelastthreeyears,zebrahelpsourcustomerscapturetheiredge.formoreinformation,visit Forward-LookingStatements Thispressreleasecontainsforward-lookingstatements,asdefinedbythePrivateSecuritiesLitigationReformActof1995,including,without limitation,thestatementsregardingthecompany soutlook.actualresultsmaydifferfromthoseexpressedorimpliedinthecompany s forward-lookingstatements.thesestatementsrepresentestimatesonlyasofthedatetheyweremade.zebraundertakesnoobligation,other thanasmayberequiredbylaw,topubliclyupdateorreviseanyforward-lookingstatements,whetherasaresultofnewinformation,future events,changedcircumstancesoranyotherreasonafterthedateofthisrelease. Theseforward-lookingstatementsarebasedoncurrentexpectations,forecastsandassumptionsandaresubjecttotherisksanduncertainties inherentinzebra sindustry,marketconditions,generaldomesticandinternationaleconomicconditions,andotherfactors.thesefactors includecustomeracceptanceofzebra shardwareandsoftwareproductsandcompetitors productofferings,andthepotentialeffectsof technologicalchanges.thecontinueduncertaintyoverfutureglobaleconomicconditions,theavailabilityofcreditandcapitalmarkets volatilitymayhaveadverseeffectsonzebra,itssuppliersanditscustomers.inaddition,adisruptioninourabilitytoobtainproductsfrom vendorsasaresultofsupplychainconstraints,naturaldisastersorothercircumstancescouldrestrictsalesandnegativelyaffectcustomer relationships.profitsandprofitabilitywillbeaffectedbyzebra sabilitytocontrolmanufacturingandoperatingcosts.becauseofitsdebt, interestratesandfinancialmarketconditionswillalsohaveanimpactonresults.foreignexchangerateswillhaveaneffectonfinancial resultsbecauseofthelargepercentageofourinternationalsales.theoutcomeoflitigationinwhichzebramaybeinvolvedisanotherfactor. Thesuccessofintegratingacquisitionscouldalsoaffectprofitability,reportedresultsandthecompany scompetitivepositioninitsindustry. TheseandotherfactorscouldhaveanadverseeffectonZebra ssales,grossprofitmarginsandresultsofoperationsandincreasethevolatility ofourfinancialresults.whenusedinthisreleaseanddocumentsreferenced,thewords anticipate, believe, outlook, and expect and similarexpressions,astheyrelatetothecompanyoritsmanagement,areintendedtoidentifysuchforward-lookingstatements,butarenotthe exclusivemeansofidentifyingthesestatements.descriptionsoftherisks,uncertaintiesandotherfactorsthatcouldaffectthecompany s futureoperationsandresultscanbefoundinzebra sfilingswiththesecuritiesandexchangecommission,includingthecompany smost recentform10-kandform10-q. UseofNon-GAAPFinancialInformation ThispressreleasecontainscertainNon-GAAPfinancialmeasures,consistingof adjustednetsales, adjustedgrossprofit, EBITDA, AdjustedEBITDA, Non-GAAPnetincome, Non-GAAPearningspershare, freecashflow, organicnetsalesgrowth, and adjustedoperatingexpenses. Managementpresentsthesemeasurestofocusontheon-goingoperationsandbelievesitisusefultoinvestors becausetheyenablethemtoperformmeaningfulcomparisonsofpastandpresentoperatingresults.thecompanybelievesitisusefulto presentnon-gaapfinancialmeasures,whichexcludecertainsignificantitems,asameanstounderstandtheperformanceofitsongoing operationsandhowmanagementviewsthebusiness.pleaseseethe ReconciliationofGAAPtoNon-GAAPFinancialMeasures tablesand accompanyingdisclosuresattheendofthispressreleaseformoredetailedinformationregardingnon-gaapfinancialmeasuresherein, includingtheitemsreflectedinadjustednetearnings

8 calculations.thesemeasures,however,shouldnotbeconstruedasanalternativetoanyothermeasureofperformancedeterminedin accordancewithgaap. Thecompanydoesnotprovideareconciliationfornon-GAAPestimatesonaforward-lookingbasis(includingtheinformationunder Outlook above)whereitisunabletoprovideameaningfuloraccuratecalculationorestimationofreconcilingitemsandtheinformationis notavailablewithoutunreasonableeffort.thisisduetotheinherentdifficultyofforecastingthetimingoramountofvariousitemsthathave notyetoccurred,areoutofthecompany scontroland/orcannotbereasonablypredicted,andthatwouldimpactdilutednetearningsper share,themostdirectlycomparableforward-lookinggaapfinancialmeasure.forthesamereasons,thecompanyisunabletoaddressthe probablesignificanceoftheunavailableinformation.forward-lookingnon-gaapfinancialmeasuresprovidedwithoutthemostdirectly comparablegaapfinancialmeasuresmayvarymateriallyfromthecorrespondinggaapfinancialmeasures. Asaglobalcompany,Zebra'soperatingresultsreportedinU.S.dollarsareaffectedbyforeigncurrencyexchangeratefluctuationsbecause theunderlyingforeigncurrenciesinwhichthecompanytransactschangeinvalueovertimecomparedtotheu.s.dollar;accordingly,the companypresentscertainorganicgrowthfinancialinformation,whichincludesimpactsofforeigncurrencytranslation,toprovidea frameworktoassesshowthecompany sbusinessesperformedexcludingtheimpactofforeigncurrencyexchangeratefluctuations.foreign currencyimpactrepresentsthedifferenceinresultsthatareattributabletofluctuationsinthecurrencyexchangeratesusedtoconvertthe resultsforbusinesseswherethefunctionalcurrencyisnottheu.s.dollar.thisimpactiscalculatedbytranslating,forcertaincurrencies, currentperiodresultsatthecurrencyexchangeratesusedinthecomparableperiodintheprioryear,ratherthantheexchangeratesineffect duringthecurrentperiod.inaddition,thecompanyexcludestheimpactofitsforeigncurrencyhedgingprograminboththecurrentyearand prioryearperiods.thecompanybelievesthesemeasuresshouldbeconsideredasupplementtoandnotinlieuofthecompany sperformance measurescalculatedinaccordancewithgaap. Contacts InvestorsMedia MichaelSteele,CFA,IRCThereseVanRyne VicePresident,InvestorRelationsDirector,GlobalPublicRelations Phone: Phone:

9 ZEBRATECHNOLOGIESCORPORATIONANDSUBSIDIARIES CONSOLIDATEDBALANCESHEETS (Inmillions,exceptsharedata) Assets Currentassets: Cashandcashequivalents $ 44 $ 62 Accountsreceivable,netofallowancesfordoubtfulaccountsof$3millionasof2018and 2017,respectively Inventories,net Incometaxreceivable Prepaidexpensesandothercurrentassets TotalCurrentassets 1,162 1,063 Property,plantandequipment,net Goodwill 2,495 2,465 Otherintangibles,net Long-termdeferredincometaxes Otherlong-termassets TotalAssets $ 4,339 $ 4,275 LiabilitiesandStockholders'Equity Currentliabilities: Currentportionoflong-termdebt $ 157 $ 51 Accountspayable Accruedliabilities Deferredrevenue Incometaxespayable TotalCurrentliabilities 1,301 1,000 Long-termdebt 1,434 2,176 Long-termdeferredincometaxes 8 Long-termdeferredrevenue Otherlong-termliabilities TotalLiabilities 3,004 3,441 Stockholders Equity: Preferredstock,$.01parvalue;authorized10,000,000shares;noneissued ClassAcommonstock,$.01parvalue;authorized150,000,0000shares;issued72,151,857shares 1 1 Additionalpaid-incapital Treasurystockatcost,18,280,673and18,915,762sharesat2018and2017, respectively (613) (620) Retainedearnings 1,688 1,248 Accumulatedothercomprehensiveincome(loss) (35) (52) TotalStockholders Equity 1, TotalLiabilitiesandStockholders Equity $ 4,339 $ 4,275-5-

10 ZEBRATECHNOLOGIESCORPORATIONANDSUBSIDIARIES CONSOLIDATEDSTATEMENTSOFOPERATIONS (Inmillions,exceptsharedata) ThreeMonthsEnded TwelveMonthsEnded (Unaudited) Netsales 2017 Tangibleproducts $ 998 $ 899 $ 3,685 $ 3,223 Servicesandsoftware TotalNetsales 1,137 1,026 4,218 3,722 Costofsales: Tangibleproducts ,871 1,677 Servicesandsoftware TotalCostofsales ,237 2,012 Grossprofit ,981 1,710 Operatingexpenses: Sellingandmarketing Researchanddevelopment Generalandadministrative Amortizationofintangibleassets Acquisitionandintegrationcosts 8 50 Exitandrestructuringcosts TotalOperatingexpenses ,371 1,388 Operatingincome Other(expenses)income: Foreignexchangeloss (3) (5) (1) Interestexpense,net (39) (51) (91) (227) Other,net 8 (1) 10 (6) TotalOtherexpenses,net (31) (55) (86) (234) Income(loss)beforeincometax Incometaxexpense Netincome(loss) $ 115 $ 4 $ 421 $ 17 Basicearnings(loss)pershare $ 2.14 $ 0.07 $ 7.86 $ 0.33 Dilutedearnings(loss)pershare $ 2.11 $ 0.07 $ 7.76 $

11 ZEBRATECHNOLOGIESCORPORATIONANDSUBSIDIARIES CONSOLIDATEDSTATEMENTSOFCASHFLOWS (Inmillions) YearEnded Cashflowsfromoperatingactivities: Netincome(loss) $ 421 $ 17 Adjustmentstoreconcilenetincome(loss)tonetcashprovidedbyoperatingactivities: Depreciationandamortization Investment(Gain)/Loss (10) 1 Amortizationofdebtissuancecostsanddiscounts Share-basedcompensation Debtextinguishmentcosts 1 65 Deferredincometaxes 2 (9) Unrealizedgainonforwardinterestrateswaps (8) (2) Other,net 4 4 Changesinoperatingassetsandliabilities: Accountsreceivable,net (31) 161 Inventories,net (43) (110) Otherassets (12) 16 Accountspayable 122 (49) Accruedliabilities Deferredrevenue Incometaxes Otheroperatingactivities (6) (8) Netcashprovidedbyoperatingactivities Cashflowsfrominvestingactivities: Acquisitionofbusinesses,netofcashacquired (72) Purchasesofproperty,plantandequipment (64) (50) Proceedsfromthesaleoflong-terminvestments 2 Purchasesoflong-terminvestments (3) (1) Netcashusedininvestingactivities (137) (51) Cashflowsfromfinancingactivities: Paymentsofdebtissuancecostsanddiscounts (2) (5) Proceedsfromissuanceoflong-termdebt 909 1,371 Paymentsoflongterm-debt (1,566) (1,825) Paymentsofdebtextinguishmentcosts (1) (65) Proceedsfromexerciseofstockoptionsandstockpurchaseplanpurchases Taxespaidrelatedtonetsharesettlementofequityawards (11) (5) Netcashusedinfinancingactivities (661) (517) Effectofexchangeratechangesoncash (5) (4) Netdecreaseincashandcashequivalents (18) (94) Cashandcashequivalentsatbeginningofyear Cashandcashequivalentsatendofyear $ 44 $ 62 Supplementaldisclosuresofcashflowinformation: Incometaxespaid $ 76 $ 65 Interestpaid $ 90 $

12 ZEBRATECHNOLOGIESCORPORATIONANDSUBSIDIARIES RECONCILIATIONOFORGANICNETSALESGROWTH (UNAUDITED) ThreeMonthsEnded 2018 AIT EVM Consolidated ReportedGAAPConsolidatedNetsalesgrowth 4.6% 14.1% 10.8% Adjustments: Impactofforeigncurrencytranslation (1) (0.3)% (0.6)% (0.4)% ImpactofXploreacquisition (2) (1.9)% (1.3)% OrganicNetsalesgrowth 4.3% 11.6% 9.1% TwelveMonthsEnded 2018 AIT EVM Consolidated ReportedGAAPConsolidatedNetsalesgrowth 8.5% 15.8% 13.3% Adjustments: Impactofforeigncurrencytranslation (1) (1.5)% (1.6)% (1.6)% ImpactofXploreacquisition (2) (0.8)% (0.6)% OrganicNetsalesgrowth 7.0% 13.4% 11.1% (1) OperatingresultsreportedinU.S.dollarsareaffectedbyforeigncurrencyexchangeratefluctuations.Foreigncurrencytranslationimpactrepresentsthe differenceinresultsthatareattributabletofluctuationsinthecurrencyexchangeratesusedtoconverttheresultsforbusinesseswherethefunctional currencyisnottheu.s.dollar.thisimpactiscalculatedbytranslating,forcertaincurrencies,thecurrentperiodresultsatthecurrencyexchangerates usedinthecomparableprioryearperiod,ratherthantheexchangeratesineffectduringthecurrentperiod.inaddition,weexcludetheimpactofthe company sforeigncurrencyhedgingprograminboththecurrentandprioryearperiods. (2) ForpurposesofcomputingOrganicNetSales,amountsdirectlyattributabletotheXploreacquisition(includedinourconsolidatedresultsbeginning August14,2018)willbeexcludedfor12-monthsfollowingtheacquisitiondate. -8-

13 ZEBRATECHNOLOGIESCORPORATIONANDSUBSIDIARIES RECONCILIATIONOFGAAPTONON-GAAPGROSSMARGIN (Inmillions) (Unaudited) ThreeMonthsEnded AIT EVM Consolidated AIT EVM Consolidated GAAP ReportedNetsales (1) $ 367 $ 770 $ 1,137 $ 351 $ 675 $ 1,026 ReportedGrossprofit (2) GrossMargin 49.6% 46.6% 47.4% 48.1% 44.4% 45.7% Non-GAAP AdjustedNetsales $ 367 $ 770 $ 1,137 $ 351 $ 675 $ 1,026 AdjustedGrossprofit (3) AdjustedGrossMargin 49.6% 46.8% 47.7% 48.1% 44.6% 45.8% (1) Fiscal2017consolidatedresultsincludecorporateeliminationswhicharerelatedtotheEnterpriseAcquisitioninOctober2014andarenotreportedinsegment results. (2) Fiscal2018consolidatedresultsincludecorporateeliminationswhicharerelatedtotheXploreAcquisitioninAugust2018andarenotreportedinsegment results. (3) AdjustedGrossprofitexcludespurchaseaccountingadjustmentsandshare-basedcompensationexpense. TwelveMonthsEnded AIT EVM Consolidated AIT EVM Consolidated GAAP ReportedNetsales (1) $ 1,423 $ 2,795 $ 4,218 $ 1,311 $ 2,414 $ 3,722 ReportedGrossprofit (2) 710 1,274 1, ,073 1,710 GrossMargin 49.9% 45.6% 47.0% 48.8% 44.4% 45.9% Non-GAAP AdjustedNetsales $ 1,423 $ 2,795 $ 4,218 $ 1,311 $ 2,414 $ 3,725 AdjustedGrossprofit (3) 711 1,277 1, ,075 1,716 AdjustedGrossMargin 50.0% 45.7% 47.1% 48.9% 44.5% 46.1% (1) Fiscal2017consolidatedresultsincludecorporateeliminationswhicharerelatedtotheEnterpriseAcquisitioninOctober2014andarenotreportedinsegment results. (2) Fiscal2018consolidatedresultsincludecorporateeliminationswhicharerelatedtotheXploreAcquisitioninAugust2018andarenotreportedinsegment results. (3) AdjustedGrossprofitexcludespurchaseaccountingadjustmentsandshare-basedcompensationexpense. -9-

14 ZEBRATECHNOLOGIESCORPORATIONANDSUBSIDIARIES RECONCILIATIONOFGAAPTONON-GAAPNETINCOME (Inmillions,exceptsharedata) (Unaudited) ThreeMonthsEnded TwelveMonthsEnded Netincome(loss) $ 115 $ 4 $ 421 $ 17 AdjustmentstoNetsales (1) Purchaseaccountingadjustments 3 TotaladjustmenttoNetsales 3 AdjustmentstoCostofsales (1) Purchaseaccountingadjustments 2 3 Share-basedcompensation TotaladjustmentstoCostofsales AdjustmentstoOperatingexpenses (1) Amortizationofintangibleassets Acquisitionandintegrationcosts 8 50 LegalSettlement 13 Share-basedcompensation Exitandrestructuringcosts TotaladjustmentstoOperatingexpenses AdjustmentstoOtherexpenses,net (1) Debtextinguishmentcosts Amortizationofdebtissuancecostsanddiscounts Investment(gain)/loss (9) 1 (10) 1 Foreignexchangeloss Forwardinterestrateswapsloss/(gain) 18 (1) (6) (2) TotaladjustmentstoOtherexpenses,net Incometaxeffectofadjustments (2) Reportedincometaxexpense Adjustedincometax (33) (31) (115) (105) Totaladjustmentstoincometax 43 (12) (34) Totaladjustments Non-GAAPNetincome $ 169 $ 126 $ 598 $ 379 GAAPearningspershare Basic $ 2.14 $ 0.07 $ 7.86 $ 0.33 Diluted $ 2.11 $ 0.07 $ 7.76 $ 0.32 Non-GAAPearningspershare Basic $ 3.13 $ 2.36 $ $ 7.14 Diluted $ 3.10 $ 2.33 $ $ 7.05 (1) Presentedonapre-taxbasis. (2) RepresentstheadjustmenttotheGAAPbasistaxprovisioncommensuratewithnon-GAAPadjustments. -10-

15 ZEBRATECHNOLOGIESCORPORATIONANDSUBSIDIARIES GAAPtoNON-GAAPRECONCILIATIONTOEBITDA (Inmillions) (Unaudited) ThreeMonthsEnded TwelveMonthsEnded Netincome(loss) $ 115 $ 4 $ 421 $ 17 Addback: Depreciation Amortizationofintangibleassets TotalOtherexpenses,net Incometaxexpense EBITDA(Non-GAAP) AdjustmentstoNetsales Purchaseaccountingadjustments 3 TotaladjustmentstoNetsales 3 AdjustmentstoCostofsales Purchaseaccountingadjustments 2 3 Share-basedcompensation TotaladjustmentstoCostofsales AdjustmentstoOperatingexpenses Acquisitionandintegrationcosts 8 50 LegalSettlement 13 Share-basedcompensation Exitandrestructuringcosts TotaladjustmentstoOperatingexpenses TotaladjustmentstoEBITDA AdjustedEBITDA(Non-GAAP) $ 240 $ 204 $ 873 $ 692 AdjustedEBITDA%ofAdjustedNetSales 21.1% 19.9% 20.7% 18.6% FREECASHFLOW TwelveMonthsEnded Netcashprovidedbyoperatingactivities $ 785 $ 478 Less:Purchasesofproperty,plantandequipment (64) (50) Freecashflow(Non-GAAP) (1) $ 721 $ 428 (1) FreecashflowisdefinedasNetcashprovidedbyoperatingactivitiesinaperiodminuspurchasesofproperty,plantandequipment(capitalexpenditures) madeinthatperiod.thismeasuredoesnotrepresentresidualcashflowsavailablefordiscretionaryexpendituresasthemeasuredoesnotdeductthepayments requiredfordebtserviceandothercontractualobligationsorpaymentsforfuturebusinessacquisitions.therefore,webelieveitisimportanttoviewfreecash flowasameasurethatprovidessupplementalinformationtoourentirestatementsofcashflows. -11-