You are on page 1of 31

INVESTOR OVERVIEW

THE MISSION-CRITICAL ECOSYSTEM

Updated August 21, 2020


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. ©2020 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.

Information about factors that could cause, and in some cases have caused, such differences can be found on pages 10 through 22 in Item 1A of Motorola Solutions’
2019 Annual Report on Form 10-K, page 34 in Item 1A of Motorola Solutions’ 2020 First Quarter Report on Form 10-Q, and in our other SEC filings 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 21st day of August, 2020. 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. ©2020 Motorola Solutions, Inc. All rights reserved
MSI ESTIMATED ADDRESSABLE MARKET
2020 SAM
$11B
Motorola Solutions has created
the mission critical ecosystem
built for Public Safety &
Enterprise. Its four platforms
$16B $6B
create the lifeline your safety and
mission depend on.
Our mission is to never stop
advancing that lifeline.
$6B

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

72%
$7.9B 28%

NORTH AMERICA INTERNATIONAL

ANNUAL REVENUE 2019

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

Infrastructure Devices Managed Services Data Platform for Analytics

Integration Video Solutions Command Center Software Video Analytics

$5.3B of 2019 Revenue $2.6B of 2019 Revenue (primarily recurring)

7
PRODUCTS & SYSTEM INTEGRATION
Mission-Critical Voice | Devices, Infrastructure, and Integration
Video Security and Analytics | Devices and Video Solutions

$5.1 $5.3

Systems & System Integration Devices

8
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
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

10
MISSION-CRITICAL COMMUNICATIONS
APX NEXT...PUBLIC SAFETY’S FIRST SMART RADIO

SMARTLOCATE

ViQi SMARTPROGRAMMING
SMARTCONNECT
11
VIDEO 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

12
VIDEO 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

13
SOFTWARE & SERVICES
Software | Command Center Software, Video Analytics, and Data Platform for Analytics
Services | Managed and Support Services

$2.6
$2.2

Software Services

14
MOTOROLA 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

15
CURRENT 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

16
OUR 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.

18
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

19
SERVICES
DELIVERED THROUGH CENTRALIZED OPERATIONS
SERVICE DESK & MONITORING & CYBERSECURITY
TECHNICAL SUPPORT MANAGEMENT SERVICES SERVICES

20
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 21
FINANCIALS
REVENUE AND EPS GROWTH

REVENUE ($B) NON-GAAP EPS ($)

23
BACKLOG
$11.3
($B) $10.4
GROWTH DRIVERS
•Software and Services multi-year agreements
•LMR system upgrades
•North America & EMEA

SOFTWARE & SERVICES

PRODUCTS & SI

24
STRONG CASH GENERATION

ADJUSTED OPERATING CASH FLOW ($B) ADJUSTED FREE CASH FLOW ($B) 2

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.

25
CAPITAL ALLOCATION
BASED ON OPERATING CASH FLOW

CAPEX
20% Asset light model
SHARE REPURCHASES
OR ACQUISITIONS 50% ONGOING
$13B
of share repurchases, retiring 50% of
ANNUAL DIVIDEND
share float at average cost of $60.48 30%
since 2011 Double digit annual increases since 2011

~$4B
of acquisitions since 2011

*As of June 30, 2020


26
STRONG BALANCE SHEET

● Investment grade
● Cash & equivalents $1.3B
● $1.7B committed undrawn capacity
remaining on revolver
● High-quality receivables of $1.1B
● Balanced debt maturity
*As of June 30, 2020
27
MSI PATENT PORTFOLIO EVOLUTION

PATENT PORTFOLIO BY BUSINESS

~5,600 2014 2019

Total Patents Issued

~1,500
Total Patents Pending

*Patent portfolio numbers are estimates


28
WE 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. 92 SUSTAINABILITY
MANAGEMENT TOP 250 NORTH AMERICAN INDEX

-- --
SUPPLY CHAIN
RESPONSIBILITY EMPLOYEE VOLUNTEERISM GENDER-EQUALITY BEST PLACES
2019: 65K HOURS INDEX TO WORK
2019: 218 supplier
assessments

29
SUPPLEMENTAL NON-GAAP MEASURES
P&L Motorola Solutions, Inc. and Subsidiaries Non-GAAP Trend
(In millions, except per share amounts)

30
SUPPLEMENTAL NON-GAAP MEASURES
CASH FLOW

31

You might also like