INVESTOR OVERVIEW THE MISSION-CRITICAL ECOSYSTEM - February 2021
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INVESTOR OVERVIEW
THE MISSION-CRITICAL ECOSYSTEM
February 2021
USE OF NON-GAAP MEASURES
In addition to the GAAP results in this presentation, Motorola Solutions has provided certain non-GAAP measurements. Motorola Solutions has provided these non-GAAP measurements as a measure to help investors
better understand its core operating performance, enhance comparisons of Motorola Solutions’ core operating performance from period-to-period and to allow better comparisons of Motorola Solutions’ operating
performance to that of its competitors. Among other things, the Company’s management uses these operating results, excluding the identified items, to evaluate the performance of its businesses and to evaluate results
relative to incentive compensation targets. Management uses operating results excluding these items because they believe this measure enables them to make better period-to-period evaluations of the financial
performance of its core business operations. There are inherent limitations in the use of operating results excluding these items because the company’s GAAP results include the impact of these items. The non-GAAP
measures are intended only as a supplement to the comparable GAAP measures and the Company compensates for the limitations inherent in the use of non-GAAP measures by using GAAP measures in conjunction
with the non-GAAP measures. As a result, investors should consider these non-GAAP measures in addition to, and not in substitution for, or as superior to, measures of financial performance prepared in accordance with
GAAP.
Details of these items and reconciliations of the non-GAAP measurements provided during this presentation to GAAP measurements can be found in the Appendix to this presentation and on Motorola Solutions’ website
at investors.motorolasolutions.com
“Adjusted Operating Cash Flow,” “Free Cash Flow,” and “Adjusted Free Cash Flow” are non-GAAP measures and should not be considered as a replacement for results in accordance with accounting principles generally
accepted in the U.S. (“GAAP”). These non-GAAP measures may not be comparable to similarly-titled measures reported by other companies. The primary limitation of these measures are that they exclude the financial
impact of items that would otherwise either increase or decrease our reported results. These limitations are best addressed by using these non-GAAP measures in combination with the most directly comparable GAAP
measures in order to better understand the amounts, character and impact of any increase or decrease in reported amounts. The following provides additional information regarding these non-GAAP measures:
Adjusted Operating Cash Flow - Adjusted operating cash flow information reflects operating cash flow under GAAP excluding a $500 million voluntary, debt-funded U.S. pension contribution in the first quarter 2018. The
Company has excluded the impact of this contribution because the company believes that this item does not reflect expected future operating cash flows and does not contribute to a meaningful evaluation of the
company's current operating cash flow performance or comparisons to the company's past operating cash flow performance.
Free Cash Flow - Operating Cash Flow minus capital expenditures. We believe Free Cash Flow provides useful information to investors as it provides insight into the primary cash flow metric used by management to
monitor and evaluate cash flows generated from our operations. This measure is also used as a component of incentive compensation.
Adjusted Free Cash Flow - Free Cash Flow excluding a $500 million voluntary, debt-funded U.S. pension contribution in the first quarter 2018. The Company has excluded the impact of this contribution because the
company believes that this item does not reflect expected future free cash flows and does not contribute to a meaningful evaluation of the company's current free cash flow performance or comparisons to the
company's past free cash flow performance.
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. ©2021 Motorola Solutions, Inc. All rights reserved
SAFE HARBOR
A number of forward-looking statements will be made during this presentation. Forward-looking statements are any statements that are not historical facts. These forward-looking
statements are based on the current expectations of Motorola Solutions, and we can give no assurance that any future results or events discussed in these statements will be achieved.
Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. 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 presentation.
Risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements include, without limitation: (i) the
impact, including increased costs and potential liabilities, associated with changes in laws and regulations regarding privacy, data protection and information security; (ii) challenges
relating to existing or future legislation and regulations pertaining to artificial intelligence (“AI”) and AI-enabled products; (iii) the impact of government regulation of radio frequencies; (iv)
audits and regulations and laws applicable to our U.S. government customer contracts and grants; (v) impacts of, and associated responses to, COVID-19 and other catastrophic events;
(vi) increased risk and competition associated with the expansion of our platforms within our Products and Systems Integration and Software and Services segments; (vii) the
effectiveness of our investments in new products and technologies; (viii) the effectiveness of our integrations of acquired businesses; (ix) a security breach or other significant disruption
of our IT systems; (x) our inability to protect our intellectual property or potential infringement of intellectual property rights of third parties; (xi) our license of the MOTOROLA, MOTO,
MOTOROLA SOLUTIONS and the Stylized M logo and all derivatives and formatives thereof from Motorola Trademark Holdings, LLC; (xii) the global nature of our employees, customers,
suppliers and outsource partners; (xiii) our use of third-parties to develop, design and/or manufacture many of our components and some of our products, and to perform portions of our
business operations; (xiv) the inability of our subcontractors to perform in a timely and compliant manner; (xv) our inability to purchase at acceptable prices a sufficient amount of
materials, parts, and components, as well as software and services, to meet the demands of our customers; (xvi) risks related to our large, multi-year system and services contracts; (xvii)
the inability of our products to meet our customers’ expectations or regulatory or industry standards; (xviii) impact of current global economic and political conditions in the markets in
which we operate; (xix) the inability to settle for cash our 1.75% senior convertible notes; (xx) impact of returns on pension and retirement plan assets and interest rate changes; (xxi)
inability to attract and retain senior management and key employees; (xxii) impact of product regulatory and safety, consumer, worker safety and environmental laws; (xxiii) inability to
access the capital markets for financing on acceptable terms and conditions; and (xxiv) impact of tax matters. For additional information on identifying factors that may cause actual
results to vary materially from those stated in forward-looking statements, see our reports on Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC from time to time available for
free on the SEC's website at www.sec.gov and on Motorola Solutions' website at www.motorolasolutions.com/investor.
This presentation was updated on the 11th day of February, 2021. The content of this presentation contains time-sensitive information that is accurate only as of the time hereof. If any
portion of this presentation is rebroadcast, retransmitted or redistributed at a later date, Motorola Solutions will not be reviewing or updating the material that is contained herein.
Non-GAAP Statements: Where we have used non-GAAP financial measures, reconciliations to the most comparable GAAP measure are provided, along with a disclosure on the usefulness
of the non-GAAP measure, in the appendix of this presentation. These measures include “Adjusted Operating Cash Flow,“ “Free Cash Flow,” and “Adjusted Free Cash Flow.“
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. ©2021 Motorola Solutions, Inc. All rights reserved
MSI ESTIMATED ADDRESSABLE MARKET
2021 SAM
$10B
Motorola Solutions has created
the mission critical ecosystem
built for Public Safety &
Enterprise. Its technologies create
$15B $5B
the lifeline your safety and
mission depend on.
Our mission is to never stop
advancing that lifeline.
$7B
Source: IHS Markit, a leading provider of global data
4
OUR SCALE AROUND THE WORLD
100K CUSTOMERS IN MORE THAN 100 COUNTRIES AROUND THE WORLD
68% 32%
$7.4B
NORTH AMERICA INTERNATIONAL
ANNUAL REVENUE 2020
5
WHO WE SERVE
WE PROVIDE THE LIFELINE THAT KEEPS YOU SAFE AND EFFECTIVE
HELPING GOVERNMENTS CREATE SAFER CITIES AND ENTERPRISES BUILD STRONGER BUSINESSES
MINING, OIL
FIRE UTILITIES
POLICE & GAS
NATIONAL
EMERGENCY EDUCATION MANUFACTURING
SECURITY
MEDICAL
PUBLIC HOSPITALITY TRANSPORTATION
CRITICAL SERVICES & RETAIL & LOGISTICS
INFRASTRUCTURE
~75% of Revenue ~25% of Revenue
6
SEGMENTS
PRODUCTS AND SYSTEM INTEGRATION SOFTWARE AND SERVICES
LMR Products and Integration LMR Services
Video Solutions Command Center Software Video Analytics
$4.6B of 2020 Revenue $2.8B of 2020 Revenue (primarily recurring)
7
PRODUCTS & SYSTEM INTEGRATION
LMR Mission-Critical Communications | LMR Products and Integration
Video Security & Analytics | Devices and Video Solutions
$5.1 $5.3
$4.6
LMR Products & Integration Video Security & Analytics
8
LMR MISSION-CRITICAL COMMUNICATIONS
MISSION CRITICAL VOICE…LEADER IN PUBLIC SAFETY COMMUNICATIONS
MISSION CRITICAL VOICE PUBLIC SAFETY BROADBAND
PROFESSIONAL
ASTRO DIMETRA COMMERCIAL PUBLIC SAFETY LTE
• Based on APCO P25 standard • Based on TETRA standard • Collection of standards • Broadband for rich media
• Used globally content
• 43 statewide & provincial systems • Primarily EMEA
• Systems & “peer to peer” • Data sharing to and from
• Primarily North America • Over 30 nationwide
command centers
deployments
9
LMR MISSION-CRITICAL COMMUNICATIONS
HELPING PEOPLE BE THEIR BEST IN THE MOMENTS THAT MATTER
MISSION-CRITICAL MEANS BUILT TO STANDARD
POWER RESILIENCE PURPOSE-BUILT DEVICES
● Fewer sites are easier to ● Network design keeps ● Built to withstand harsh
manage, especially in a teams connected, even if conditions.
crisis or when the power no network is available. ● Long battery life so users can
goes out. ● Proven to withstand make it through a long shift.
● 5W radios save critical hurricane force, unlike ● Peer-to-peer communication
seconds with the power for other communications keeps users talking in remote
direct communication. which fail. or low coverage locations.
Hurricane Irma (September 2017)
“In that time, there were no sites down, no outages and all LMR communications worked flawlessly...LMR was the only communication working.”
Greg H., Director of Public Safety Communications for Lake County, FL
10LMR MISSION-CRITICAL COMMUNICATIONS
APX NEXT...PUBLIC SAFETY’S FIRST SMART RADIO
SMARTLOCATE
ViQi SMARTPROGRAMMING
SMARTCONNECT
11VIDEO SECURITY & ANALYTICS
BRINGING ATTENTION TO WHAT MATTERS MOST
VIDEO SECURITY EQUIPMENT
FIXED VIDEO & MOBILE VIDEO
PHYSICAL SECURITY SYSTEMS
CAMERAS & SENSORS BODY-WORN CAMERAS
INFRASTRUCTURE IN-VEHICLE CAMERAS
12VIDEO SECURITY & ANALYTICS
BRINGING ATTENTION TO WHAT MATTERS MOST
VIDEO ANALYTICS | HIGH PRIORITY USE CASES
ACCESS ANOMALY SELF-LEARNING ANALYTICS
CONTROL DETECTION Flag after-hours
Protect ingress & egress Alert to potential safety threats or prohibited loitering
points at a hospital at an airport
UNUSUAL MOTION
LICENSE PLATE APPEARANCE
DETECTION
RECOGNITION SEARCH
Identify a car traveling in the
Detect blacklisted cars Find a missing child at a
wrong direction
entering a school theme park
13SOFTWARE & SERVICES
LMR Mission-Critical Communications | LMR Managed and Support Services
Command Center Software | 911 Software Suite
Video Security & Analytics | Video Management Software and AI enabled Analytics
$2.8
$2.6
$2.2
LMR Services Command Center Software Video Security & Analytics
14MOTOROLA SOLUTIONS SOFTWARE SUITE
COMMANDCENTRAL
An end-to-end software suite built for public safety.
Incident Awareness Incident Management Post-Incident Resolution
VOICE & REAL-TIME RECORDS
COMMUNITY EMERGENCY CALL COMPUTER INTELLIGENCE FIELD RESPONSE & EVIDENCE ANALYSIS & JAIL & INMATE
ENGAGEMENT MANAGEMENT AIDED DISPATCH OPERATIONS & REPORTING MANAGEMENT INVESTIGATION MANAGEMENT
Citizen 911 Call Taker Dispatcher Intelligence Frontline Records Crime Corrections
Analyst Responder Specialist Analyst Officer
CommandCentral CommandCentral CommandCentral CommandCentral CommandCentral CommandCentral CommandCentral CommandCentral
Community 9-1-1 CAD Aware App Records Analytics Jail
COMMANDCENTRAL PLATFORM
15CURRENT STATE
COMMAND CENTER SOFTWARE
SAVE SECONDS. SAVE LIVES.
65% of 911 call centers don’t have the capability
to receive a text
30% of officers’ time is spent on admin duties,
equating to 1,000 officers in the field
10K lives could be saved each year by reducing
911 response times by just one minute
16OUR SOLUTION COMMAND CENTER SOFTWARE
VIDEO SECURITY & ANALYTICS
VIDEO INTELLIGENCE APPEARANCE SEARCH
Deep learning AI locates specific
FOCUS OF ATTENTION persons or vehicles of interest, directed
through simple physical descriptions.
UNUSUAL MOTION DETECTION
AI learns typical activity in a scene,
detects and flags unusual motion without
any predefined rules or setup.
ACCESS CONTROL
Manage access to restricted areas using
a role-based system, with instant
No Motion Motion Detected Analytic Event Alarm Camera Down
detection of people at access points.
18LMR SERVICES
MANAGED AND SUPPORT
EMERGENCY EMERGENCY TECHNICAL SYSTEM SYSTEM FIELD
AWARENESS OPERATIONS SERVICE DESK MONITORING ENGINEERING SERVICES
KEEPING TEAMS CONNECTED DURING A CRISIS IS COMPLEX
HURRICANE IRMA, FLORIDA. SEPTEMBER, 2017
185 mph 7 trillion 50% cell sites $50 billion 6.5 million 90% buildings
winds for 37 hrs watts of energy inoperable cost of damage people evacuated damaged
19LMR SERVICES
DELIVERED THROUGH CENTRALIZED OPERATIONS
SERVICE DESK & MONITORING & CYBERSECURITY
TECHNICAL SUPPORT MANAGEMENT SERVICES SERVICES
20LMR SERVICES
GLOBAL MONITORING & MANAGEMENT
4M
USERS UNDER OUR SCHAUMBURG, IL UNITED KINGDOM NORWAY DENMARK AUSTRIA
MANAGED SERVICE
20M
EVENTS MONITORED
EACH DAY
13K
SYSTEMS
INSTALLED
1M
CUSTOMERS ACROSS
100 COUNTRIES
90+ PALMETTO, SC SANTIAGO, CL PENANG, MY MELBOURNE, AU
YEARS OF
EXPERIENCE
*Count does not reflect LTE sites and/or users
**Statistics obtained from Motorola Solutions Centralized Managed and Support Operations 21FINANCIALS
REVENUE AND EPS GROWTH
REVENUE ($B) NON-GAAP EPS ($)
23BACKLOG
($B) $11.4
$11.3
$10.6
BACKLOG GROWTH DRIVERS
•Software and Services multi-year agreements
•LMR system upgrades
•North America
SOFTWARE & SERVICES
PRODUCTS & SI
24STRONG CASH GENERATION
ADJUSTED OPERATING CASH FLOW ($B) ADJUSTED FREE CASH FLOW ($B) 2
1
1
Operating Cash Flow for 2018 is adjusted to exclude the impact of $500M contribution to the pension plan.
2
Adjusted Free Cash Flow, also a non-GAAP financial measure, is defined as Operating Cash Flow less Capital Expenditures and adjusted to exclude the impact of $500M contribution to the pension plan for 2018. For more information, including the definition and the
reconciliation of this measure to our GAAP financials, see the Appendix to this presentation.
25CAPITAL ALLOCATION
BASED ON OPERATING CASH FLOW
CAPEX
20% Asset light model
SHARE REPURCHASES
OR ACQUISITIONS 50% ONGOING
$13.4B
of share repurchases, retiring 51% of
ANNUAL DIVIDEND
share float at average cost of $61.47 30%
since 2011 Double digit annual increases since 2011
~$4.2B
of acquisitions since 2011
*As of December 31, 2020
26STRONG BALANCE SHEET
● Investment grade
● Cash & equivalents $1.3B
● $2.2B committed undrawn capacity
remaining on revolver
● High-quality receivables of $1.4B
● Balanced debt maturity
*As of December 31, 2020
27MSI PATENT PORTFOLIO EVOLUTION
PATENT PORTFOLIO BY BUSINESS
~6,100 2015 2020
Total Patents Issued
~1,300
Total Patents Pending
*Patent portfolio numbers are estimates
28WE ARE COMMITTED TO CORPORATE RESPONSIBILITY
ESG ISS Quality Score - 1 MSCI ESG Rating - A
-- PHILANTHROPY -- ENVIRONMENT No. 3 MOST No. 9, 100 MOST
2019: $12M+ supporting 2 million 2016 to 2019: ADMIRED COMPANY SUSTAINABLE COMPANIES
students, teachers, first Waste production down 29%
responders and community Water usage down 8%
members around the world
No. 6 U. S. & No. 27 Globally SUSTAINABILITY
100 Most Sustainably Managed NORTH AMERICAN INDEX
Companies
-- --
SUPPLY CHAIN
RESPONSIBILITY EMPLOYEE VOLUNTEERISM GENDER-EQUALITY BEST PLACES
2019: 65K HOURS INDEX TO WORK
2019: 218 supplier
assessments
29SUPPLEMENTAL NON-GAAP MEASURES
P&L Motorola Solutions, Inc. and Subsidiaries Non-GAAP Trend
(In millions, except per share amounts)
30SUPPLEMENTAL NON-GAAP MEASURES
CASH FLOW
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