MOTOROLA SOLUTIONS, INC.

Transcription

1 MOTOROLA SOLUTIONS, INC. FORM 8-K (Current report filing) Filed 04/15/14 for the Period Ending 04/14/14 Address 1303 E ALGONQUIN RD SCHAUMBURG, IL Telephone CIK Symbol MSI SIC Code Radio and Television Broadcasting and Communications Equipment Industry Communications Equipment Sector Technology Fiscal Year 12/31 Copyright 2014, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): April 14, 2014 Motorola Solutions, Inc. (Exact Name of Registrant as Specified in Charter) DELAWARE (State or Other Jurisdiction of Incorporation) (Commission (IRS Employer File Number) Identification No.) 1303 East Algonquin Road Schaumburg, Illinois (Address of Principal Executive Offices) (Zip Code) Registrant s telephone number, including area code: (847) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): Written communications pursuant to Rule 425 under the Securities Act (17 CFR ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR e-4(c))

3 Item Results of Operations and Financial Condition. The information in this Form 8-K that is furnished under Item Results of Operations and Financial Condition and Exhibit 99.1 attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. On April 15, 2014, Motorola Solutions, Inc. (the Company ) issued the press release attached to this Current Report on Form 8-K as Exhibit 99.1 announcing that it expects revenue for the quarter ended March 29, 2014 to be $1.8 billion, down approximately 9% from the first quarter of 2013, and now expects full year sales to decline low single digits while operating margins are expected to be comparable to previous guidance. The Company also announced its expectations for certain first quarter 2014 operating results. Item Regulation FD Disclosure. The Company will host a live webcast with audio and slides, to review the transaction described below in Item 8.01 and our preliminary earnings results, at 8:30 a.m. Eastern time, on April 15, The webcast will be available to the public on Motorola Solutions website at A replay of the webcast and related materials will be available at that site. The slide presentation is attached to this Current Report on Form 8-K and furnished as Exhibit 99.2 A copy of the joint press release issued by the Company and Zebra Technologies Corporation on April 15, 2014 announcing the transaction described below in Item 8.01 is attached to this Current Report on Form 8-K and furnished as Exhibit Item Other On April 14, 2014, the Company entered into a Master Acquisition Agreement (the Acquisition Agreement ) with Zebra Technologies Corporation (the Purchaser ) to purchase the Enterprise business of the Company. The Purchaser has agreed to pay $3.45 billion in cash to the Company on the closing date of the transaction. Certain assets of the Company relating to the Enterprise business will be excluded from the transaction and retained by the Company, including the Company s iden infrastructure business, and other assets and certain liabilities as specified in the Acquisition Agreement. The terms of the Acquisition Agreement, including the conditions thereto, will be described in a subsequent filing on Form 8-K. Item (d) Financial Statements and Exhibits Exhibits Exhibit No. Description 99.1 Press Release dated April 15, 2014 announcing preliminary earnings results for the fiscal quarter ended March 29, 2014 and updated guidance Slide Presentation dated April 15, Joint Press Release dated April 15, 2014 announcing the sale of the Enterprise business to Zebra Technologies Corporation.

4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MOTOROLA SOLUTIONS, INC. (Registrant) Dated: April 15, 2014 By: /s/ Gino A. Bonanotte Name: Gino A. Bonanotte Title: Executive Vice President and Chief Financial Officer

5 EXHIBIT INDEX Exhibit No. Description 99.1 Press Release dated April 15, 2014 announcing preliminary earnings results for the fiscal quarter ended March 29, 2014 and updated guidance Slide Presentation dated April 15, Joint Press Release dated April 15, 2014 announcing the sale of the Enterprise business to Zebra Technologies Corporation.

6 Exhibit 99.1 Motorola Solutions Reports Preliminary Fiscal 2014 First Quarter Results SCHAUMBURG, Ill. April 15, 2014 Motorola Solutions, Inc. (NYSE: MSI) today announced preliminary financial results for its first quarter Sales results were below the company s previous revenue outlook, primarily due to softer demand in the North America Government business along with lower than anticipated Enterprise sales. Non-GAAP earnings per share were within the range of the company s previous earnings outlook. First quarter sales are expected to be approximately $1.8 billion, down approximately 9 percent from the first quarter of Full-year total company 2014 sales are now expected to decline low single digits while operating margins are expected to be comparable to previous guidance. This full-year sales outlook assumes Enterprise growth and a low- to mid-single digit decline for the combined Government and iden business. The company will provide full earnings results on its call, now scheduled for May 1. GAAP operating earnings in the first quarter of 2014 are expected to be $170 million or 9.4 percent of sales. GAAP earnings per share are expected to be $0.49. Non-GAAP* operating earnings in the first quarter are expected to be $212 million or 11.8 percent of sales. Non-GAAP earnings per share for the quarter are expected to be $0.50, within the company s previous guidance. Greg Brown, chairman and CEO of Motorola Solutions, said: Revenues in the quarter did not meet our expectations due primarily to lower than expected volumes in our North America Government business in addition to a push out of certain Enterprise orders late in the quarter. While revenues were less than anticipated in the first quarter, we remain confident that we are well positioned for long-term profitable growth based on our strong pipeline position. We remain committed to our value creation strategy for our shareholders, which combines profitable growth with significant and consistent capital return programs. In a separate press release issued today, Motorola Solutions announced the sale of its Enterprise business to Zebra Technologies for $3.45 billion. The release can be found on the company s website at Transaction Conference Call and Webcast Investors are invited to listen to a live webcast of the Motorola Solutions conference call discussing the announced pending transaction between Motorola Solutions and Zebra. The conference call will be held at 8:30 a.m. U.S. Eastern Daylight Time today. To listen to the call, visit the company s website at First Quarter Conference Call and Webcast Motorola Solutions will host its quarterly conference call beginning at 8 a.m. U.S. Eastern Daylight Time on Thursday, May 1. The conference call will be webcast live with audio and slides at

7 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. *Non-GAAP financial information excludes from GAAP results the effects of share-based compensation expense, intangible assets amortization expense and highlighted items. Highlighted items: The company has excluded the effects of highlighted items (and any reversals of highlighted items recorded in prior periods) from its Non-GAAP operating expenses and net income measurements because the company believes that these historical items do not reflect expected future operating earnings or expenses and do not contribute to a meaningful evaluation of the company s current operating performance or comparisons to the company s past operating performance. Share-based compensation expense: The company has excluded share-based compensation expense from its Non-GAAP operating expenses and net income measurements. Although share-based compensation is a key incentive offered to 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 share-based compensation expense primarily because it represents a significant non-cash expense. Share-based compensation expense will recur in future periods. Intangible assets amortization expense: The company has excluded intangible assets amortization expense from its Non-GAAP operating expenses and net income measurements, primarily because it represents a 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 company s website at

8 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 actual or 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 expected results for the first quarter of 2014 and financial outlook for the full year of 2014, statements regarding the proposed transaction to sell the Enterprise business to Zebra technologies, and the return of capital to shareholders. Motorola Solutions cautions the reader that the risk factors below, as well as those on pages 10 through 21 in Item 1A of Motorola Solutions, Inc. s 2013 Annual Report on Form 10-K and in its other SEC filings available for free on the SEC s website at and on Motorola Solutions website at 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 satisfaction of the conditions to closing (including receipt of regulatory approvals) of the transaction to sell the Enterprise business to Zebra Technologies; (2) the expected timeline for completing such transaction; (3) the ability of Motorola Solutions to return proceeds of the transaction to its shareholders and the timing thereof; (4) the economic outlook for the government and enterprise communications industries; (5) the level of demand for the company s products, particularly if businesses and governments defer or cancel purchases in response to tighter credit or as a result of the pending transaction to sell the Enterprise business to Zebra Technologies; (6) the company s ability to introduce new products and technologies in a timely manner; (7) negative impact on the company s business from global economic conditions, including sequestration in the United States, which may include: (i) continued 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, which could impact future required or voluntary pension contributions; and (viii) the company s ability to access the capital markets on acceptable terms and conditions; (8) the impact of foreign currency fluctuations on the company when competing for business in foreign markets; (9) the outcome of currently ongoing and future tax matters; (10) the company s ability to purchase sufficient materials, parts and components to meet customer demand, particularly in light of global economic conditions; (11) risks related to dependence on certain key suppliers, subcontractors, third-party distributors and other representatives; (12) the impact on the company s performance and financial results from strategic acquisitions or divestitures, including the sale of the Enterprise business and those that may occur in the future; (13) risks related to the company s manufacturing and business

9 operations in foreign countries; (14) the creditworthiness of the company s customers and distributors, particularly purchasers of large infrastructure systems; (15) 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; (16) the ownership of certain logos, trademarks, trade names and service marks including MOTOROLA by Motorola Mobility Holdings, Inc.; (17) 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; (18) unexpected liabilities or expenses, including unfavorable outcomes to any pending or future litigation or regulatory or similar proceedings; (19) the impact of the percentage of cash and cash equivalents held outside of the United States; (20) the ability of the company to pay future dividends due to possible adverse market conditions or adverse impacts on the company s cash flow; (21) 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; (22) the impact of changes in governmental policies, laws or regulations; (23) negative consequences from the company s outsourcing of various activities, including certain business operations, information technology and administrative functions; and (24) the impact of our multi-year phased upgrade and consolidation of our enterprise resource planning systems into a single global platform. 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. 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 For ongoing news, please visit our newsroom or subscribe to our news feed. Media Contacts Nick Sweers Motorola Solutions nicholas.sweers@motorolasolutions.com Investor Contacts Shep Dunlap Motorola Solutions shep.dunlap@motorolasolutions.com 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 Motorola Solutions, Inc. All rights reserved.

10 Non-GAAP-1 Motorola Solutions, Inc. and Subsidiaries Non-GAAP Adjustments (Intangibles Amortization Expense, Stock-Based Compensation Expense and Highlighted Items) Q PBT (Inc)/Exp Tax Inc/(Exp) PAT (Inc)/Exp Highlighted Items Statement Line EPS impact Intangibles amortization expense Intangibles amortization $ 5 $ 1 $ 4 $ 0.02 Share-based compensation expense Cost of sales, SG&A and R&D Reorganization of business charges Cost of sales and Other charges Gain on sale of building and land Other charges (21) (8) (13) (0.05) Recognition of previously unrecognized income tax benefits Income tax expense 30 (30) (0.12) Total impact on Net earnings $ 42 $ 40 $ 2 $ 0.01

11 Non-GAAP-2 Motorola Solutions, Inc. and Subsidiaries Operating Earnings after Non-GAAP Adjustments Q Net sales $ 1,801 Operating earnings ( OE ) $ 170 Above-OE non-gaap adjustments: Share-based compensation expense 36 Reorganization of business charges 22 Intangibles amortization expense 5 Gain on sale of building and land (21) Total above-oe non-gaap adjustments 42 Operating earnings after non-gaap adjustments $ 212 Operating earnings as a percentage of net sales GAAP 9.4 % Operating earnings as a percentage of net sales after non-gaap adjustments 11.8 %

12 Exhibit 99.2 MSI Business Global Communications APRIL to Leader Sell 15, 2014 Enterprise in Mission-Critical Public Safety

13 SAFE A expectations and from Information SEC This retransmitted Page number should presentation filings 2 the HARBOR statements of not available about of forward-looking be Motorola redistributed relied factors being contained upon free Solutions, that made on as statements could in a on representing the this later the and SEC s cause, presentation. date, 15th we will and website can of Motorola our be April in give made views some at no Solutions during cases assurance of The any have this content will subsequent presentation. that caused, not and any of be this future such reviewing Motorola date. presentation differences results Forward-looking Solutions updating contains events can be website the discussed found time-sensitive statements material on are in pages that these are any information is 10 subject statements contained through a 21 that variety herein. will is are Item be accurate of not achieved. 1A risks historical of only and Motorola Any uncertainties as facts. of forward-looking the Solutions These time that forward-looking hereof could statements If Annual cause any portion our Report statements represent actual of on this results our Form are presentation views based to 10-K, differ only and the materially is as in rebroadcast, current of our today other

14 USE In investors operating evaluate Management are comparable should Details website Page addition inherent OF 3 consider of results NON-GAAP better performance these limitations uses the understand relative items these operating measures non-gaap MEASURES results that the reconciliations incentive its results and use of core provided its the of measures excluding competitors. compensation operating Company of during the performance, these addition results compensates non-gaap this Among targets. items event, excluding to, other because and enhance Motorola measurements for things, not these they comparisons limitations substitution Solutions items the believe Company s provided because this inherent has of for, measure provided Motorola during the or management company s superior the this enables certain Solutions use presentation of uses to, them non-gaap measures these core to results to make operating GAAP measurements. of measures include better financial performance results, period-to-period the by performance impact using excluding Motorola GAAP from of can these be evaluations Solutions prepared period measures found identified items. to in has period The the in of accordance provided items, conjunction the non-gaap Appendix and financial to evaluate these allow with to with measures performance this GAAP. non-gaap better the presentation non-gaap performance comparisons are intended of measurements its and core measures. of only its Motorola businesses as a As a supplement measure operations. a Solutions result, and investors help There the

15 TRANSACTION Strategic Government Positions Great operating Attractive $3.45B Provides Expect Subject franchise proceeds valuation to opportunity rationale MSI leverage close customary and as transaction with Enterprise a in OVERVIEW Improved singularly be all for closing returned cash excellent the sustainable by Enterprise businesses deal, cash conditions focused end to leadership effectively shareholders flow of capital 2014 business have stability and return position differentiated regulatory tax in mission for and free timely and MSI increasing and leverage approvals critical MSI shareholders manner strong customer recurring communications aligned install channels base with revenue of stable and customers streams opportunities business More profile than Positions $6B in Zebra revenue as an with industry presence leader in more in enterprise than 100 asset countries intelligence Stable, long-term growth in core business with demonstrated

16 MSI Products Core devices Worldwide * Page $4.1B 18.8% Proforma REMAINING 5 public public in OE** Services sales* leadership 2013 safety safety 18.0% sales $2.1B and BUSINESS OE** position are commercial in Government sales* OVERVIEW systems and iden & Systems combined. integration, ** OE managed = Proforma services, non-gaap smart operating earnings and includes corporate costs previously allocated to Enterprise business

17 COMPETITIVELY TECHNOLOGY DOMAIN GO SCALE STRONG Unparalleled More 800+ Global $6B* * Page Proforma TO 6 sales in than customer MARKET revenues, FINANCIAL EXPERTISE 70 force FY 13 product years & base 4.3% annual extensive of DIFFERENTIATED portfolio with public CAGR POSITION number 10,000+ safety partner breadth ** for and systems network Government and radio BUSINESS depth installed Strong experience Presence Backwards business, margin R&D Leader more and excluding expansion compatible than technology developing 100 iden; & countries FCF forward leadership ** industry generation Government migratable Significant standards *** excluding Strong Deep industry backlog expertise iden; leadership *** position, that Free position anticipates Cash currently Flow market $5.4B = operating shifts & cash solutions flow less capital expenditures

18 DIVERSIFIED 2013 Apps Public 2% Europe 16% Services Integration * 3% North Revenue IDEN safety Africa radio iden 32% America Support systems 2013 includes REVENUE PCR Revenue 63% Managed Latin Services services America % Services ** Accessories Revenue Proforma 19% by Page Services 38% technology** 746% 46% Asia 8% by Pacific service** 6% Middle by region** East 13%

19 MULTIPLE CORE UNDERPENETRATED VERTICAL ANALOG RADIO EXPECT Page 8 BUSINESS LIFECYCLE LOW TO EXPANSION GROWTH DIGITAL to MID GROWTH & SINGLE-DIGIT DRIVERS MANAGED GEOGRAPHIES MIGRATION GROWTH SMART PUBLIC LONG ADJACENCIES & DRIVE PUBLIC TERM SAFETY LTE NEW GROWTH PRODUCT SERVICES TRANSITIONS REAL TIME CRIME CENTER

20 STRONG 10,000+ NETWORK TODAY MUCH PRIVATE 4G DATA 3G P25 DIGITAL 2G FUNCTIONALITY ANALOG CONVENTIONAL FEATURES YEARS Page PHASE 9 + OF Systems FUTURE NEXT INSTALL TRUNKING BROADBAND MUCH II MIGRATION 1-5 GEN YEARS Globally OPPORTUNITY OF & BASE APPS P25 DIGITAL 33% 1G 6-10 PHASE OPPORTUNITY 22% TRUNKING 24% I ANALOG-ONLY >15 21% YEARS AGE OLD OF SYSTEMS YEARS OLD (WORLDWIDE) YEARS OLD OLD

21 RESILIENT $5.99 CAGR=4.3% Government 19.4% 18.5% 15.6% 14.4% 12.6% *Excludes CAGR=12.1% ** 2007 Non-GAAP; 2008 $ % 12.6% iden 2009 $5.18 Segment GROWTH Excludes 2010 business $ Revenues* Profitability** & $5.05 iden OPERATING 2012 $4.68 business 2013 $4.80 Page and LEVERAGE 10 corporate costs previously allocated to Enterprise business

22 DEMONSTRATED CUMULATIVE $M&A 343M DIVIDENDS REDUCTION $0.6B SHARE $5.2B ~$6.7B ~$1.7B 254M 0.3B Total remaining REPURCHASE CAPEX Q % CASH on Q4 13 TRACK current DEPLOYMENT repurchase RECORD OF authorization SHARE CAPITAL COUNT * RETURN Represents REDUCTION* ending share count for respective periods Page 11

23 FUTURE Committed Capital Will Expect Page retain 12 transaction ongoing expenditures CAPITAL sufficient to strong free proceeds cash ~20% balance flexibility STRUCTURE flow of to sheet operating returned be to support and investment through cash bolt-on to flow shareholders grade opportunities repurchase rating timely and that fashion continued are close to dividends our core or support our targeted growth areas

24 SUMMARY Enterprise Expect MSI Strong Long-term Sustainable Page becomes 13 competitive to return transaction growth capital a singularly transaction driven deployment differentiation expected by focused, proceeds large model to close with installed industry to aligned leading by shareholders end base, leading with portfolio of differentiated 2014, a company business timely subject and sales that fashion portfolio, to capabilities, customary has generated strong closing positioned solutions dependable conditions capability for growth continued and and regulatory operating continued strong approvals cash leverage innovation flow

25

26 USE In investors operating evaluate Management are comparable should Details website Page addition inherent OF 15 consider of results NON-GAAP better performance these limitations uses the understand relative items these operating measures non-gaap MEASURES results that the reconciliations incentive its results and use of core provided its the of measures excluding competitors. compensation operating Company of during the performance, these addition results compensates non-gaap this Among targets. items event, excluding to, other because and enhance Motorola measurements for things, not these they comparisons limitations substitution Solutions items the believe Company s provided because this inherent has of for, measure provided Motorola during the or management company s superior the this enables certain Solutions use presentation of uses to, them non-gaap measures these core to results to make operating GAAP measurements. of measures include better financial performance results, period-to-period the by performance impact using excluding Motorola GAAP from of can these be evaluations Solutions prepared period measures found identified items. to in has period The the in of accordance provided items, conjunction the non-gaap Appendix and financial to evaluate these allow with to with measures performance this GAAP. non-gaap better the presentation non-gaap performance comparisons are intended of measurements its and core measures. of only its Motorola businesses as a As a supplement measure operations. a Solutions result, and investors help There the

27 SUPPLEMENTAL Motorola FY TOTAL Above-OE Share-based Reorganization Intangibles Total Pro-forma Page above-oe Products Solutions, revenues GAAP operating pro-forma amortization compensation of pro-forma Services operating business NON-GAAP $ Inc. earnings non-gaap 6,227 expense and non-gaap charges earnings $ Subsidiaries after as 4,109 a 1 MEASURES adjustments: percentage non-gaap $ , Pro-forma 2935 of 317 adjustments net 190 sales GAAP sales after Remainco 126 $ 64 1,154 Non-GAAP non-gaap 15.5% $ 773 $ 15.8% 381 Operating adjustments 15.0% Earnings 18.5% 18.8% 18.0%

28 Exhibit 99.3 Zebra Technologies to Acquire Enterprise Business from Motorola Solutions for $3.45 Billion Transaction strengthens Zebra s asset tracking portfolio to create a global leader in Enterprise Asset Intelligence for the Connected Age Motorola to become singularly focused on driving continued leadership in mission-critical communications for Government and Public Safety customers Lincolnshire, Ill. and Schaumburg, Ill., April 15, 2014 Zebra Technologies Corporation (NASDAQ: ZBRA) and Motorola Solutions, Inc. (NYSE: MSI) today announced that they have entered into a definitive agreement in which Zebra will acquire Motorola s Enterprise business for $3.45 billion in an all-cash transaction. The acquisition will be funded through a combination of cash on hand and new debt. The transaction, which was approved by the Boards of Directors of both companies, is subject to customary closing conditions including regulatory approvals. The transaction is expected to be completed by the end of This acquisition will transform Zebra into a leading provider of solutions that deliver greater intelligence and insights into our customers enterprises and extended value chains, stated Anders Gustafsson, Zebra s chief executive officer. The Enterprise business will generate significant value for our shareholders by driving further product innovation and deeper engagement with our customers and partners. It positions Zebra as a leading technology innovator, with the accelerating convergence of mobility, data analytics and cloud computing. Our Enterprise business is an ideal fit for Zebra, stated Greg Brown, Motorola Solutions chairman and CEO. This transaction will enable us to further sharpen our strategic focus on providing mission-critical solutions for our government and public safety customers. Upon closing of the transaction, we intend to return the proceeds to our shareholders in a timely fashion. With 2013 pro-forma sales of approximately $2.5 billion (excluding sales of its iden products), Motorola s Enterprise business is an industry leader in mobile computing and advanced data capture communications technologies and services. Through this transaction, Zebra will enter the segment where Motorola s Enterprise business competes and strengthen its position in key industries including Retail, Transportation & Logistics, and Manufacturing and serve approximately 95 percent of the Fortune 500.

29 Zebra Technologies, with 2013 sales of $1.0 billion, is an industry leader in barcode and enterprise printing, asset tracking, Internet of Things (IoT) solutions, and motion and location sensing. The combination of these technology offerings and asset tracking solutions, together with Motorola s Enterprise business, will create an industry leader in enterprise asset intelligence for the Connected Age. The combined Zebra Technologies with Motorola s Enterprise business would have had pro-forma sales in 2013 of approximately $3.5 billion. Approximately 4,500 employees are expected to join Zebra upon completing this transaction. Motorola Solutions will retain its iden product portfolio that was part of its Enterprise business and will continue its Government business, including its professional commercial radio product portfolio. Motorola Solutions will continue to manufacture, design, integrate and deliver industry-leading voice and data communication solutions for government and public safety customers worldwide. Motorola Solutions sells these secure, mission-critical and innovative products, services and solutions with unique software designs that are the cutting edge in public safety technology. It also holds a unique portfolio of intellectual property. Strategic Fit for Zebra The transaction will significantly expand Zebra s geographic reach; the combined company will have about 20,000 channel partners in more than 100 countries, and will hold a robust portfolio of intellectual property, with approximately 4,500 U.S. and international patents issued and pending. Key benefits to Zebra and its shareholders include: Stronger combined platform with multiple growth opportunities New and comprehensive product, technology and IP portfolio Leading end-to-end solutions across key industries with global reach Highly diversified business mix Creating synergies by maximizing efficiencies and scale Attractive growth and free cash flow profile Strategic Rationale for Motorola Solutions Last year, we undertook a thorough review of our strategy and concluded that the synergies between our Government and Enterprise businesses were not as great as the value we could create by being singularly focused on our core Government & Public Safety business, Motorola s Brown said. Going forward, we will have absolute clarity of purpose and mission as we serve customers globally with our suite of mission-critical communications solutions. This business is truly distinctive in its industry leadership, strong pipeline position, long-term track record of consistent profitability and cash flow, and an array of growth opportunities.

30 Transaction Details Under the agreement, Zebra will acquire the Enterprise business from Motorola Solutions in an all-cash transaction valued at $3.45 billion, which Zebra management expects to be immediately accretive on a cash earnings basis. Zebra expects to fund the transaction with approximately $200 million of available cash on hand and $3.25 billion that is fully committed to be raised through a new credit facility and the issuance of debt securities. The transaction is not subject to a financing condition and is expected to be completed by the end of Morgan Stanley is serving as financial adviser to Zebra and is providing a fully underwritten financing commitment for the debt component of the transaction. Kirkland & Ellis LLP is serving as legal advisor to Zebra. Goldman, Sachs & Co., and J.P. Morgan Securities LLC are serving as financial advisers to Motorola in connection with this transaction. Winston & Strawn LLP is serving as legal adviser to Motorola. Wachtell, Lipton, Rosen & Katz is serving as legal adviser to the Motorola Board of Directors. Conference Call Notifications For Zebra: Investors are invited to listen to a live webcast of Zebra s conference call discussing of the pending acquisition announced today. The conference call will be held at 8:00 a.m. EDT today. To listen to the call, visit the company s website at For Motorola: Investors are invited to listen to a live webcast of the Motorola Solutions conference call discussing the announced pending transaction. The conference call will be held at 8:30 a.m. EDT today. To listen to the call, visit the company s website at Forward-looking Statement This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties. Actual results may differ from those expressed or implied in the company s forward-looking statements. When used in this release and documents referenced herein, the words anticipate, believe, estimate, intend, and expect and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying these statements. Similarly, statements herein that describe the proposed transaction between Zebra and Motorola Solutions, including its financial impact, and other statements of managements beliefs, intentions or goals also are forward-looking statements. These forward-looking statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties inherent in both Zebra s and Motorola s respective industries, including the Enterprise business, market conditions, general domestic and international economic conditions, and other factors. These factors also include the satisfaction of

31 the conditions to closing of the transaction (including receipt of regulatory approvals), the completion of the acquisition of the Enterprise business from Motorola Solutions, the successful financing of the transaction, the expected timeline for completing the transaction, the successful integration of the operations by Zebra, and Zebra s ability to implement plans, forecasts and other expectations with respect to the Enterprise business after the acquisition is completed and the ability of Motorola Solutions to return proceeds of the transaction to its shareholders and the timing thereof. Customer acceptance of Zebra s products and solutions and competitors product offerings, and the potential effects of technological changes are inherent risks associated with the ongoing combined business. The continued uncertainty over future global economic conditions, the availability of credit, capital markets volatility, may have adverse effects on Zebra, its suppliers and its customers. In addition, a disruption in Zebra s ability to obtain products from vendors as a result of supply chain constraints, natural disasters or other circumstances could restrict sales and negatively affect customer relationships. Profits and profitability will be affected by Zebra s ability to control manufacturing and operating costs. Because of a large investment portfolio, interest rates and financial market conditions will also have an impact on results. Foreign exchange rates will have an effect on financial results because of the large percentage of Zebra s international sales. These and other factors could have an adverse effect on Zebra s sales, gross profit margins and results of operations and increase the volatility of Zebra s financial results. Descriptions of the risks, uncertainties and other factors that could affect Zebra s future operations and results can be found in Zebra s filings with the Securities and Exchange Commission. A detailed description of other risks and uncertainties affecting Zebra is contained in Item 1A of Zebra s 2013 Annual Report on Form 10-K and in its other filings with the Securities and Exchange Commission... A detailed description of other risks and uncertainties affecting Motorola Solutions, is contained in Item 1A of Motorola Solution s 2013 Annual Report on Form 10-K and in its other filings with the Securities and Exchange Commission. These filings are available for free on the SEC s website at on Zebra s website at m and on Motorola Solutions website at The forward-looking statements made herein speak only as of the date hereof and none of Zebra, Motorola Solutions or any of their respective affiliates assumes any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, developments or otherwise, except as required by law. About Zebra A global leader respected for innovation and reliability, Zebra Technologies (NASDAQ: ZBRA) offers technologies that give a virtual voice to an organization s assets, people and transactions, enabling organizations to unlock greater business value. The company s extensive portfolio of marking and printing technologies, including RFID and real-time location solutions, illuminates mission-critical information to help customers take smarter business actions. For more information about Zebra s solutions, visit

32 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 For ongoing news, please visit our newsroom or subscribe to our news feed. Media Resources Information related to today s transaction, including executive pictures and biographies, can be found at Contact: Investors: Financial Media Trade Media Douglas A. Fox, CFA Vice President, Investor Relations and Treasurer dfox@zebra.com Kerry F. Kelly F T I Consulting kerry.guiliano@fticonsulting.com Stephanie Kneisler Manager, Public Relations skneisler@zebra.com For Zebra Technologies For Motorola Solutions Shep Dunlap Vice President, Investor Relations shep.dunlap@motorolasolutions.com Nicholas Sweers Vice President, Global Communications nicholas.sweers@motorolasolutions.com Nicholas Sweers Vice President, Global Communications nicholas.sweers@motorolasolutions.com