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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________ 
Form 10-Q
 ____________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission file number: 1-7221
___________________________________________ 
MOTOROLA SOLUTIONS, INC.
(Exact Name of Registrant as Specified in Its Charter)
____________________________________________ 
Delaware 36-1115800
(State of Incorporation)(I.R.S. Employer Identification No.)
500 W. Monroe Street, Chicago, Illinois 60661
(Address of principal executive offices, zip code)
(847576-5000
(Registrant’s telephone number, including area code)
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
____________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock$0.01Par ValueMSINew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer” “accelerated filer” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerAccelerated filer 
Non-accelerated filer 
Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No 
The number of shares of the registrant's Common Stock, $0.01 par value per share, outstanding as of October 15, 2021 was 168,897,488.



TABLE OF CONTENTS
For the Quarter Ended October 2, 2021
 
PART I. FINANCIAL INFORMATION
Page No.
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.




PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations (Unaudited)
(In millions, except per share amounts)Three Months EndedNine Months Ended
October 2, 2021September 26, 2020October 2, 2021September 26, 2020
Net sales from products$1,221 $1,044 $3,250 $2,807 
Net sales from services886 824 2,601 2,334 
Net sales2,107 1,868 5,851 5,141 
Costs of products sales559 487 1,516 1,325 
Costs of services sales503 472 1,478 1,354 
Costs of sales1,062 959 2,994 2,679 
Gross margin1,045 909 2,857 2,462 
Selling, general and administrative expenses351 313 985 951 
Research and development expenditures183 175 545 505 
Other charges60 69 209 178 
Operating earnings451 352 1,118 828 
Other income (expense):
Interest expense, net(56)(58)(154)(167)
Loss on sales of investments and businesses, net (1) (1)
Other, net10 (42)70 (8)
Total other expense(46)(101)(84)(176)
Net earnings before income taxes405 251 1,034 652 
Income tax expense97 45 186 112 
Net earnings308 206 848 540 
Less: Earnings attributable to non-controlling interests1 1 4 3 
Net earnings attributable to Motorola Solutions, Inc.$307 $205 $844 $537 
Earnings per common share:
Basic$1.81 $1.21 $4.98 $3.16 
Diluted$1.76 $1.18 $4.87 $3.08 
Weighted average common shares outstanding:
Basic169.2 169.7 169.3 170.1 
Diluted174.1 173.5 173.4 174.3 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
1


Condensed Consolidated Statements of Comprehensive Income (Unaudited)
 Three Months EndedNine Months Ended
(In millions)October 2, 2021September 26, 2020October 2, 2021September 26, 2020
Net earnings$308 $206 $848 $540 
Other comprehensive income (loss), net of tax (Note 4):
Foreign currency translation adjustments(44)30 (19)(30)
Defined benefit plans16 12 49 37 
Total other comprehensive income (loss), net of tax(28)42 30 7 
Comprehensive income280 248 878 547 
Less: Earnings attributable to non-controlling interests1 1 4 3 
Comprehensive income attributable to Motorola Solutions, Inc. common shareholders$279 $247 $874 $544 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

2


Condensed Consolidated Balance Sheets (Unaudited)
(In millions, except par value)October 2, 2021December 31, 2020
ASSETS
Cash and cash equivalents$1,653 $1,254 
Accounts receivable, net1,196 1,390 
Contract assets1,030 933 
Inventories, net604 508 
Other current assets252 242 
Total current assets4,735 4,327 
Property, plant and equipment, net1,021 1,022 
Operating lease assets405 468 
Investments214 158 
Deferred income taxes934 966 
Goodwill2,449 2,219 
Intangible assets, net1,134 1,234 
Other assets530 482 
Total assets$11,422 $10,876 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current portion of long-term debt$6 $12 
Accounts payable620 612 
Contract liabilities1,538 1,554 
Accrued liabilities1,265 1,311 
Total current liabilities3,429 3,489 
Long-term debt5,687 5,163 
Operating lease liabilities321 402 
Other liabilities2,233 2,363 
Preferred stock, $100 par value: 0.5 shares authorized; none issued and outstanding
  
Common stock, $0.01 par value:
2 2 
Authorized shares: 600.0
Issued shares: 10/2/21—170.0; 12/31/20—170.2
Outstanding shares: 10/2/21—169.1; 12/31/20—169.4
Additional paid-in capital950 759 
Retained earnings1,201 1,127 
Accumulated other comprehensive loss(2,416)(2,446)
Total Motorola Solutions, Inc. stockholders’ equity (deficit)(263)(558)
Non-controlling interests15 17 
Total stockholders’ equity (deficit)(248)(541)
Total liabilities and stockholders’ equity (deficit)$11,422 $10,876 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

3


Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)
(In millions, except per share data)SharesCommon Stock and Additional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Retained
Earnings
Noncontrolling
Interests
Balance as of December 31, 2020170.2 $761 $(2,446)$1,127 $17 
Net earnings244 1 
Other comprehensive income36 
Issuance of common stock and stock options exercised1.4 44 
Share repurchase program(1.0)(170)
Share-based compensation expenses29 
Dividends declared $0.71 per share
(121)
Balance as of April 3, 2021170.6 $834 $(2,410)$1,080 $18 
Net earnings293 1 
Other comprehensive income22 
Issuance of common stock and stock options exercised0.2 14 
Share repurchase program(0.5)(102)
Share-based compensation expenses31 
Dividends declared $0.71 per share
(120)
Dividends paid to non-controlling interest on subsidiary common stock(5)
Balance as of July 3, 2021170.3 $879 $(2,388)$1,151 $14 
Net earnings307 1 
Other comprehensive loss(28)
Issuance of common stock and stock options exercised0.3 39 
Share repurchase program(0.6)(137)
Share-based compensation expenses34 
Dividends declared $0.71 per share
(120)
Balance as of October 2, 2021170.0 $952 $(2,416)$1,201 $15 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
4


(In millions, except per share data)SharesCommon Stock and Additional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Retained
Earnings
Noncontrolling
Interests
Balance as of December 31, 2019171.0 $501 $(2,440)$1,239 $17 
Net earnings197 1 
Other comprehensive loss(126)
Issuance of common stock and stock options exercised1.3 5 
Share repurchase program(1.6)(253)
Share-based compensation expenses38 
Dividends declared $0.64 per share
(109)
Balance as of March 28, 2020170.7 $544 $(2,566)$1,074 $18 
Net earnings135 1 
Other comprehensive income91 
Issuance of common stock and stock options exercised0.6 53 
Share repurchase program(0.6)(83)
Share-based compensation expenses31 
Dividends declared $0.64 per share
(109)
Dividends paid to non-controlling interest on subsidiary common stock(4)
Balance as of June 27, 2020170.7 $628 $(2,475)$1,017 $15 
Net earnings205 1 
Other comprehensive income42 
Issuance of common stock and stock options exercised0.4 10 
Share repurchase program(0.7)(105)
Share-based compensation expenses31 
Dividends declared $0.64 per share
(109)
Balance as of September 26, 2020170.4 $669 $(2,433)$1,008 $16 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
5


Condensed Consolidated Statements of Cash Flows (Unaudited)
 Nine Months Ended
(In millions)October 2, 2021September 26, 2020
Operating
Net earnings$848 $540 
Adjustments to reconcile Net earnings to Net cash provided by operating activities:
Depreciation and amortization325 300 
Non-cash other income(6)(28)
Share-based compensation expenses94 100 
Loss on sales of investments and businesses, net 1 
Loss from the extinguishment of long-term debt18 56 
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:
Accounts receivable189 312 
Inventories(99)2 
Other current assets and contract assets(136)(1)
Accounts payable, accrued liabilities, and contract liabilities(39)(379)
Other assets and liabilities(62)(18)
Deferred income taxes2 24 
Net cash provided by operating activities1,134 909 
Investing
Acquisitions and investments, net(360)(282)
Proceeds from sales of investments and businesses, net4 8 
Capital expenditures(175)(151)
Proceeds from sales of property, plant and equipment6 56 
Net cash used for investing activities(525)(369)
Financing
Net proceeds from issuance of debt844 892 
Repayments of debt(351)(911)
Proceeds from revolving credit facility draw 800 
Repayment of revolving credit facility draw (600)
Revolving credit facility renewal fees(7) 
Issuances of common stock99 59 
Purchases of common stock(397)(441)
Payments of dividends(362)(327)
Payments of dividends to non-controlling interests(5)(4)
Net cash used for financing activities(179)(532)
Effect of exchange rate changes on total cash and cash equivalents(31)(2)
Net increase in total cash and cash equivalents399 6 
Cash and cash equivalents, beginning of period1,254 1,001 
Cash and cash equivalents, end of period$1,653 $1,007 
Supplemental Cash Flow Information  
Cash paid during the period for:
Interest paid$155 $178 
Income and withholding taxes, net of refunds$230 $90 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
6



7


Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in millions, except as noted)
1.Basis of Presentation
The condensed consolidated financial statements as of October 2, 2021 and for the three and nine months ended October 2, 2021 and September 26, 2020 include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to state fairly the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, Statements of Stockholders' Equity (Deficit), and Statements of Cash Flows of Motorola Solutions, Inc. (“Motorola Solutions” or the “Company”) for all periods presented.
The Company operates on a 52-week fiscal year, with each fiscal year ending on December 31. With respect to each fiscal quarter, the Company operates on a 13-week fiscal quarter, with all fiscal quarters ending on a Saturday.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2020 (the "Form 10-K"). The results of operations for the three and nine months ended October 2, 2021 are not necessarily indicative of the operating results to be expected for the full year.
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Change in Presentation
As further described in the Form 10-K, during the fourth quarter of 2020, the Company updated its revenue disaggregation presentation of major products and services to provide a more comprehensive view of technologies within the Company's reporting segments. Accordingly, the Company now reports net sales in the following three major products and services (which the Company refers to as “technologies” in this Quarterly Report on Form 10-Q (this “Form 10-Q”)): Land Mobile Radio Mission Critical Communications (“LMR” or “LMR Mission Critical Communications”), Video Security and Access Control, and Command Center Software. With the Company's acquisition of Openpath Security Inc. (“Openpath”) on July 15, 2021, the Company renamed one of its three major products and services technologies from Video Security and Analytics to Video Security and Access Control to better align with its strategic growth initiatives. The change is to the name of the technology only and no financial information has been reclassified from previous periods presented or for the quarter ended October 2, 2021.
LMR Mission Critical Communications: Infrastructure, devices (two-way radio and broadband, including both for public safety and Professional Commercial Radio ("PCR")) and software that enable communications, inclusive of installation and integration, backed by services, to assure availability, security and resiliency.
Video Security and Access Control: Cameras (fixed, body-worn, in-vehicle), access control, infrastructure, video management, software and artificial intelligence-enabled analytics that enable visibility “on scene” and bring attention to what’s important.
Command Center Software: Software suite that enables collaboration and seamless information sharing through the public safety workflow from 911 call to case closure.
Recent Acquisitions
Subsequent to quarter end, on October 29, 2021, the Company acquired Envysion, Inc. ("Envysion"), a leader in enterprise video security and business analytics, for $124 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $1 million to certain key employees that will be expensed over a service period of one year. This acquisition expands the Company's presence in the industry and reinforces the Company's strategy as a global leader in end-to-end video security solutions within Video Security and Access Control. Due to the timing of the acquisition, the initial accounting for the acquisition is incomplete.
On July 15, 2021, the Company acquired Openpath, a cloud-based mobile access control provider for $297 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $29 million to certain key employees that will be expensed over an average service period of three years. The transaction also includes the potential for the Company to make earn-out payments based on Openpath's achievement of certain financial targets from January 1, 2022 through December 31, 2022. This acquisition expands the Company's ability to combine video security and access control solutions within Video Security and Access Control to help support enterprise customers. The business is a part of both the Products and Systems Integration segment and the Software and Services segment.
On August 28, 2020, the Company acquired the Callyo business ("Callyo"), a cloud-based mobile applications provider for law enforcement in North America for $63 million, inclusive of share-based compensation withheld at a fair value of $3 million that will be expensed over an average service period of two years. The acquisition was settled with $61 million in cash, net of cash acquired. This acquisition adds to the Company's existing Command Center Software suite critical mobile technological capabilities that enable information to flow seamlessly from the field to the command center. The business is a part of the Software and Services segment.
8


On July 31, 2020, the Company acquired Pelco, Inc. ("Pelco"), a global provider of video security solutions for a purchase price of $110 million. The acquisition was settled with $107 million of cash, net of cash acquired. The acquisition demonstrates the Company's continued investment in Video Security and Access Control, adding a broad range of products that can be used in a variety of commercial and industrial environments and use cases. The business is a part of both the Products and Systems Integration segment and the Software and Services segment.
On June 16, 2020, the Company acquired IndigoVision Group plc ("IndigoVision") for a purchase price of $37 million. The acquisition was settled with $35 million of cash, net of cash acquired and debt assumed. The acquisition complements the Company's Video Security and Access Control technology, providing enhanced geographical reach across a wider customer base. The business is a part of both the Products and Systems Integration segment and the Software and Services segment.
On April 30, 2020, the Company acquired a cybersecurity services business for $32 million of cash, net of cash acquired. The acquisition expands the Company's ability to assist customers with cybersecurity needs through vulnerability assessments, cybersecurity consulting, and managed services including security monitoring of network operations. The business is a part of the Software and Services segment.
On March 3, 2020, the Company acquired a cybersecurity services business for $40 million, inclusive of share-based compensation withheld at a fair value of $6 million that will be expensed over a service period of two years. The acquisition was settled with $33 million of cash, net of cash acquired. The acquisition expands the Company's ability to assist customers with cybersecurity needs through vulnerability assessments, cybersecurity consulting, managed services and remediation and response capabilities. The business is a part of the Software and Services segment.
Recent Accounting Pronouncements
In August 2020, the FASB issued ASU No. 2020-06, "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity," which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments. The new guidance removes the separation models for convertible debt with a cash conversion feature or a beneficial conversion feature. In addition, the new standard provides guidance on calculating the dilutive impact of convertible debt on earnings per share. The ASU clarifies that the average market price should be used to calculate the diluted earnings per share denominator when the exercise price or the number of shares that may be issued is variable. The ASU is effective for the Company on January 1, 2022, including interim periods, with early adoption permitted. The ASU permits the use of either a full or modified retrospective method of adoption. The Company is still evaluating the impact of the adoption of this ASU on its financial statements and disclosures.
Recently Adopted Accounting Pronouncements
In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740),” which simplifies the accounting for income taxes by removing certain exceptions and streamlining other areas of accounting for income taxes. Portions of the amendment within the ASU require retrospective, modified retrospective or prospective adoption methods. The Company adopted ASU No. 2019-12 as of January 1, 2021 on a prospective basis and the adoption of this standard did not have a material impact on its financial statements and disclosures.
9


2.    Revenue from Contracts with Customers
Disaggregation of Revenue
The following table summarizes the disaggregation of the Company's revenue by segment, region, major products and services and customer type for the three and nine months ended October 2, 2021 and September 26, 2020, consistent with the information reviewed by the Company's chief operating decision maker for evaluating the financial performance of the Company's reportable segments:
Three Months Ended
October 2, 2021September 26, 2020
(In millions)Products and Systems IntegrationSoftware and ServicesTotalProducts and Systems IntegrationSoftware and ServicesTotal
Regions:
North America$992 $457 $1,449 $863 $405 $1,268 
International333 325 658 300 300 600 
$1,325 $782 $2,107 $1,163 $705 $1,868 
Major Products and Services:
LMR$1,111 $547 $1,658 $989 $510 $1,499 
Video Security and Access Control214 102 316 174 77 251 
Command Center Software 133 133  118 118 
$1,325 $782 $2,107 $1,163 $705 $1,868 
Customer Types:
Direct$838 $703 $1,541 $733 $637 $1,370 
Indirect487 79 566 430 68 498 
$1,325 $782 $2,107 $1,163 $705 $1,868 
Nine Months Ended
October 2, 2021September 26, 2020
Products and Systems IntegrationSoftware and ServicesTotalProducts and Systems IntegrationSoftware and ServicesTotal
Regions:
North America$2,603 $1,343 $3,946 $2,330 $1,146 $3,476 
International935 970 1,905 794 871 1,665 
$3,538 $2,313 $5,851 $3,124 $2,017 $5,141 
Major Products and Services:
LMR$2,948 $1,642 $4,590 $2,685 $1,480 $4,165 
Video Security and Access Control590 284 874 439 196 635 
Command Center Software 387 387  341 341 
$3,538 $2,313 $5,851 $3,124 $2,017 $5,141 
Customer Types:
Direct$2,148 $2,099 $4,247 $2,008 $1,869 $3,877 
Indirect1,390 214 1,604 1,116 148 1,264 
$3,538 $2,313 $5,851 $3,124 $2,017 $5,141 

10


Remaining Performance Obligations
Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations that are unsatisfied, or partially unsatisfied, as of the end of a period. The transaction values associated with remaining performance obligations which were not yet satisfied as of October 2, 2021 was $7.1 billion. A total of $3.6 billion was from Products and Systems Integration performance obligations that were not yet satisfied as of October 2, 2021, of which $1.9 billion is expected to be recognized in the next twelve months. The remaining amounts will generally be satisfied over time as systems are implemented. A total of $3.5 billion was from Software and Services performance obligations that were not yet satisfied as of October 2, 2021. The determination of Software and Services performance obligations that are not satisfied takes into account a contract term that may be limited by the customer’s ability to terminate for convenience. Where termination for convenience exists in the Company's service contracts, its disclosure of the remaining performance obligations that are unsatisfied assumes the contract term is limited until renewal. The Company expects to recognize $1.5 billion from unsatisfied Software and Services performance obligations over the next twelve months, with the remaining performance obligations to be recognized over time as services are performed and software is implemented.
Contract Balances
(In millions)October 2, 2021December 31, 2020
Accounts receivable, net$1,196 $1,390 
Contract assets1,030 933 
Contract liabilities1,538 1,554 
Non-current contract liabilities309 283 
Revenue recognized during the three months ended October 2, 2021 which was previously included in Contract liabilities as of July 3, 2021 was $472 million, compared to $349 million of revenue recognized during the three months ended September 26, 2020 which was previously included in Contract liabilities as of June 27, 2020. Revenue recognized during the nine months ended October 2, 2021 which was previously included in Contract liabilities as of December 31, 2020 was $946 million, compared to $807 million recognized during the nine months ended September 26, 2020 which was previously included in Contract liabilities as of December 31, 2019. Revenue of $2 million and $15 million was reversed during the three and nine months ended October 2, 2021, respectively, related to performance obligations satisfied or partially satisfied, in previous periods, primarily driven by changes in the estimates of progress on system contracts, compared to $12 million and $48 million of reversals for the three and nine months ended September 26, 2020, respectively.
There were no material expected credit losses recorded on contract assets during each of the three and nine months ended October 2, 2021 and September 26, 2020.
Contract Cost Balances
(In millions)October 2, 2021December 31, 2020
Current contract cost assets$26 $23 
Non-current contract cost assets113 105 
Amortization of non-current contract cost assets was $12 million and $37 million for the three and nine months ended October 2, 2021, respectively, and $13 million and $35 million for the three and nine months ended September 26, 2020, respectively.
11


3.    Leases
Components of Lease Expense
Three Months EndedNine Months Ended
(in millions)October 2, 2021September 26, 2020October 2, 2021September 26, 2020
Lease expense:
Operating lease cost$34 $34 $101 $101 
Finance lease cost
Amortization of right-of-use assets2 3 8 9 
Interest on lease liabilities   1 
Total finance lease cost2 3 8 10 
Short-term lease cost 1 2 2 
Variable cost9 10 27 27 
Sublease income(2)(2)(4)(4)
Net lease expense$43 $46 $134 $136 

Lease Assets and Liabilities
(in millions)Statement Line ClassificationOctober 2, 2021December 31, 2020
Assets:
Operating lease assetsOperating lease assets$