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 ~~March 28, 2020~~April 3, 2021


☐			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~~Name of ~~registrant~~Registrant as ~~specified~~Specified in ~~its charter)~~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)~~60661Chicago,Illinois(Address of principal executive offices)~~

(847) 576-5000

(Registrant’s telephone number, including area ~~code~~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 Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock

$0.01

Par Value

MSI

New 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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ 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 filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

~~(Do not check if a smaller reporting 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 ~~outstanding of each~~ of the ~~issuer’s classes of common stock~~registrant's Common Stock, $0.01 par value per share, outstanding as of ~~the close of business on~~ April 15, ~~2020~~2021 was ~~170,067,338~~169,667,685.


	TABLE OF CONTENTS
	For the Quarter Ended April 3, 2021
		~~Page~~
	PART I. F I ~~FINANCIAL~~NANCIAL INFORMATION		Page No.
Item 1 1.	Financial Statements (Unaudited)		1
	Condensed Consolidated Statements of Operations ~~(Unaudited)~~ for the Three Months Ended April 3, 2021 and March 28, 2020 ~~and March 30, 2019~~		1
	Condensed Consolidated Statements of Comprehensive Income ~~(Unaudited)~~ for the Three Months Ended April 3, 2021 and March 28, 2020 ~~and March 30, 2019~~		2
	Condensed Consolidated Balance Sheets as of ~~March 28, 2020 (Unaudited)~~April 3, 2021 and December 31, ~~2019~~2020		3
	Condensed Consolidated Statements of Stockholders’ Equity ~~(Unaudited)~~(Deficit) for the Three Months Ended April 3, 2021 and March 28, 2020 ~~and March 30, 2019~~		4
	Condensed Consolidated Statements of Cash Flows ~~(Unaudited)~~ for the Three Months Ended April 3, 2021 and March 28, 2020 ~~and March 30, 2019~~		5
	Index for Notes to Condensed Consolidated Financial Statements ~~(Unaudited)~~		6
	Notes to Condensed Consolidated Financial Statements		7
Item 2 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2324
Item 3.	~~Item 3~~ Quantitative and Qualitative Disclosures About Market Risk	32
~~Item 4 Controls and Procedures~~	33
Item 4.	~~PART II OTHER INFORMATION~~Controls and Procedures
33
	PART II. OTHER INFORMATION
Item 1 1.	Legal Proceedings		34
Item 1A.	~~Item 1A~~ Risk Factors		34
Item 2.	~~Item 2~~ Unregistered Sales of Equity Securities and Use of Proceeds	35
~~Item 3 Defaults Upon Senior Securities~~	35
Item 3.	~~Item 4~~ Defaults Upon Senior Securities~~Mine Safety Disclosures~~		35
Item 4.	~~Item 5 Other Information~~Mine Safety Disclosures		35
Item 5.	Other Information		35
Item 6 6.	Exhibits		36
	Signatures		37

~~Part~~PART I—FINANCIAL INFORMATION

Item 1. Financial ~~Information~~

Statements

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended
(In millions, except per share amounts) March 28, 2020 March 30, 2019
Net sales from products $ 884 $ 945
Net sales from services 771 712
Net sales 1,655 1,657
Costs of products sales 397 444
Costs of services sales 471 440
Costs of sales 868 884
Gross margin 787 773
Selling, general and administrative expenses 341 327
Research and development expenditures 168 162
Other charges 19 55
Operating earnings 259 229
Other income (expense):
Interest expense, net (52) (55)
Gains on sales of investments and businesses, net — 1
Other, net 17 10
Total other expense (35) (44)
Net earnings before income taxes 224 185
Income tax expense 26 33
Net earnings 198 152
Less: Earnings attributable to non-controlling interests 1 1
Net earnings attributable to Motorola Solutions, Inc. $ 197 $ 151
Earnings per common share:
Basic $ 1.15 $ 0.92
Diluted $ 1.12 $ 0.86
Weighted average common shares outstanding:
Basic 170.6 164.0
Diluted 175.9 174.6
Dividends declared per share $ 0.64 $ 0.57


(In millions, except per share amounts)	Three Months Ended
	April 3, 2021		March 28, 2020
Net sales from products	$	926	$	884
Net sales from services	847		771
Net sales	1,773		1,655
Costs of products sales	438		397
Costs of services sales	475		471
Costs of sales	913		868
Gross margin	860		787
Selling, general and administrative expenses	303		341
Research and development expenditures	180		168
Other charges	79		19
Operating earnings	298		259
Other income (expense):
Interest expense, net	(54)		(52)

Other, net	45		17
Total other expense	(9)		(35)
Net earnings before income taxes	289		224
Income tax expense	44		26
Net earnings	245		198
Less: Earnings attributable to non-controlling interests	1		1
Net earnings attributable to Motorola Solutions, Inc.	$	244	$	197
Earnings per common share:
Basic	$	1.44	$	1.15
Diluted	$	1.41	$	1.12
Weighted average common shares outstanding:
Basic	169.3		170.6
Diluted	173.2		175.9

See accompanying ~~notes~~Notes to ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements (unaudited).

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


		Three Months Ended							Three Months Ended
(In millions)	(In millions)	March 28, 2020		March 30, 2019		(In millions)	April 3, 2021		March 28, 2020
Net earnings	Net earnings	$	198	$	152	Net earnings	$	245	$	198
Other comprehensive income (loss), net of tax (Note 4):	Other comprehensive income (loss), net of tax (Note 4):					Other comprehensive income (loss), net of tax (Note 4):
Foreign currency translation adjustments	Foreign currency translation adjustments	(138)		30		Foreign currency translation adjustments	19		(138)

Defined benefit plans	Defined benefit plans	12		11		Defined benefit plans	17		12
Total other comprehensive income (loss), net of tax	Total other comprehensive income (loss), net of tax	(126)		41		Total other comprehensive income (loss), net of tax	36		(126)
Comprehensive income	Comprehensive income	72		193		Comprehensive income	281		72
Less: Earnings attributable to non-controlling interests	Less: Earnings attributable to non-controlling interests	1		1		Less: Earnings attributable to non-controlling interests	1		1
Comprehensive income attributable to Motorola Solutions, Inc. common shareholders	Comprehensive income attributable to Motorola Solutions, Inc. common shareholders	$	71	$	192	Comprehensive income attributable to Motorola Solutions, Inc. common shareholders	$	280	$	71

See accompanying ~~notes~~Notes to ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements (unaudited).

Condensed Consolidated Balance Sheets

(Unaudited)


(In millions, except par value)	(In millions, except par value)	March 28, 2020		December 31, 2019		(In millions, except par value)	April 3, 2021		December 31, 2020
ASSETS	ASSETS									ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	1,672	$	1,001	Cash and cash equivalents	$	1,320	$	1,254
Accounts receivable, net	Accounts receivable, net	1,122		1,412		Accounts receivable, net	1,090		1,390
Contract assets	Contract assets	958		1,046		Contract assets	767		933
Inventories, net	Inventories, net	442		447		Inventories, net	530		508

Other current assets	Other current assets	287		272		Other current assets	235		242

Total current assets	Total current assets	4,481		4,178		Total current assets	3,942		4,327
Property, plant and equipment, net	Property, plant and equipment, net	932		992		Property, plant and equipment, net	1,028		1,022
Operating lease assets	Operating lease assets	521		554		Operating lease assets	448		468
Investments	Investments	154		159		Investments	168		158
Deferred income taxes	Deferred income taxes	918		943		Deferred income taxes	955		966
Goodwill	Goodwill	2,075		2,067		Goodwill	2,221		2,219
Intangible assets, net	Intangible assets, net	1,242		1,327		Intangible assets, net	1,180		1,234
Other assets	Other assets	393		422		Other assets	481		482
Total assets	Total assets	$	10,716	$	10,642	Total assets	$	10,423	$	10,876
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)									LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current portion of long-term debt	Current portion of long-term debt	$	814	$	16	Current portion of long-term debt	$	11	$	12
Accounts payable	Accounts payable	531		618		Accounts payable	484		612
Contract liabilities	Contract liabilities	1,278		1,449		Contract liabilities	1,419		1,554
Accrued liabilities	Accrued liabilities	1,256		1,356		Accrued liabilities	1,181		1,311

Total current liabilities	Total current liabilities	3,879		3,439		Total current liabilities	3,095		3,489
Long-term debt	Long-term debt	5,111		5,113		Long-term debt	5,164		5,163

Operating lease liabilities	Operating lease liabilities	458		497		Operating lease liabilities	356		402
Other liabilities	Other liabilities	2,198		2,276		Other liabilities	2,286		2,363

Preferred stock, $100 par value		—		—
Preferred stock, $100 par value: 0.5 shares authorized; NaN issued and outstanding						Preferred stock, $100 par value: 0.5 shares authorized; NaN issued and outstanding	0		0
Common stock, $0.01 par value:	Common stock, $0.01 par value:	2		2		Common stock, $0.01 par value:	2		2
Authorized shares: 600.0	Authorized shares: 600.0					Authorized shares: 600.0
Issued shares: 3/28/20—170.7; 12/31/19—171.0
Outstanding shares: 3/28/20—170.0; 12/31/19—170.5
Issued shares: 4/3/21—170.6; 12/31/20—170.2						Issued shares: 4/3/21—170.6; 12/31/20—170.2
Outstanding shares: 4/3/21—169.7; 12/31/20—169.4						Outstanding shares: 4/3/21—169.7; 12/31/20—169.4
Additional paid-in capital	Additional paid-in capital	542		499		Additional paid-in capital	832		759
Retained earnings	Retained earnings	1,074		1,239		Retained earnings	1,080		1,127
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(2,566)		(2,440)		Accumulated other comprehensive loss	(2,410)		(2,446)
Total Motorola Solutions, Inc. stockholders’ equity (deficit)	Total Motorola Solutions, Inc. stockholders’ equity (deficit)	(948)		(700)		Total Motorola Solutions, Inc. stockholders’ equity (deficit)	(496)		(558)
Non-controlling interests	Non-controlling interests	18		17		Non-controlling interests	18		17
Total stockholders’ equity (deficit)	Total stockholders’ equity (deficit)	(930)		(683)		Total stockholders’ equity (deficit)	(478)		(541)
Total liabilities and stockholders’ equity (deficit)	Total liabilities and stockholders’ equity (deficit)	$	10,716	$	10,642	Total liabilities and stockholders’ equity (deficit)	$	10,423	$	10,876

See accompanying ~~notes~~Notes to ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements (unaudited).

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)

(In millions) Shares Common Stock and Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained
Earnings Noncontrolling
Interests
Balance as of December 31, 2019 171.0 $ 501 $ (2,440) $ 1,239 $ 17
Net earnings 197 1
Other comprehensive loss (126)
Issuance of common stock and stock options exercised 1.3 5
Share repurchase program (1.6) (253)
Share-based compensation expenses 38
Dividends declared $0.64 per share (109)
Balance as of March 28, 2020 170.7 $ 544 $ (2,566) $ 1,074 $ 18



(In millions, except per share data)	Shares	Common Stock and Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Noncontrolling Interests
Balance as of December 31, 2020	170.2	$	761	$	(2,446)	$	1,127	$	17
Net earnings						244		1
Other comprehensive income				36
Issuance of common stock and stock options exercised	1.4	44
Share repurchase program	(1.0)					(170)
Share-based compensation expenses		29
Dividends declared $0.71 per share						(121)
Balance as of April 3, 2021	170.6	$	834	$	(2,410)	$	1,080	$	18

(In millions) Shares Common Stock and Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained
Earnings Noncontrolling
Interests
Balance as of December 31, 2018 164.0 $ 421 $ (2,765) $ 1,051 $ 17
Net earnings 151 1
Other comprehensive income 41
Issuance of common stock and stock options exercised 1.2 45
Share repurchase program (1.2) (145)
Share-based compensation expenses 27
Issuance of common stock for acquisition 1.4 160
Dividends declared $0.57 per share (94)
Balance as of March 30, 2019 165.4 $ 653 $ (2,724) $ 963 $ 18


(In millions, except per share data)	Shares	Common Stock and Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Noncontrolling Interests
Balance as of December 31, 2019	171.0	$	501	$	(2,440)	$	1,239	$	17
Net earnings						197		1
Other comprehensive loss				(126)
Issuance of common stock and stock options exercised	1.3	5
Share repurchase program	(1.6)					(253)
Share-based compensation expenses		38
Dividends declared $0.64 per share						(109)
Balance as of March 28, 2020	170.7	$	544	$	(2,566)	$	1,074	$	18

See accompanying ~~notes~~Notes to ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements (unaudited).

Condensed Consolidated Statements of Cash Flows

(Unaudited)


		Three Months Ended							Three Months Ended
(In millions)	(In millions)	March 28, 2020		March 30, 2019		(In millions)	April 3, 2021		March 28, 2020
Operating	Operating					Operating
Net earnings attributable to Motorola Solutions, Inc.		$	197	$	151
Earnings attributable to non-controlling interests		1		1

Net earnings	Net earnings	198		152		Net earnings	$	245	$	198

Adjustments to reconcile Net earnings to Net cash provided by operating activities:	Adjustments to reconcile Net earnings to Net cash provided by operating activities:					Adjustments to reconcile Net earnings to Net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	99		95		Depreciation and amortization	110		99

Non-cash other charges (income)		(51)		10
Non-cash other income						Non-cash other income	(7)		(51)

Share-based compensation expenses	Share-based compensation expenses	38		27		Share-based compensation expenses	29		38
Gain on sales of investments and businesses, net		—		(1)

Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:	Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:					Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:
Accounts receivable	Accounts receivable	275		168		Accounts receivable	298		275
Inventories	Inventories	2		(63)		Inventories	(24)		2
Other current assets and contract assets	Other current assets and contract assets	48		136		Other current assets and contract assets	149		48
Accounts payable, accrued liabilities, and contract liabilities	Accounts payable, accrued liabilities, and contract liabilities	(301)		(261)		Accounts payable, accrued liabilities, and contract liabilities	(426)		(301)
Other assets and liabilities	Other assets and liabilities	(4)		(6)		Other assets and liabilities	(5)		(4)
Deferred income taxes	Deferred income taxes	4		(6)		Deferred income taxes	1		4
Net cash provided by operating activities	Net cash provided by operating activities	308		251		Net cash provided by operating activities	370		308
Investing	Investing					Investing
Acquisitions and investments, net	Acquisitions and investments, net	(36)		(368)		Acquisitions and investments, net	(2)		(36)
Proceeds from sales of investments and businesses, net	Proceeds from sales of investments and businesses, net	2		2		Proceeds from sales of investments and businesses, net	2		2
Capital expenditures	Capital expenditures	(48)		(66)		Capital expenditures	(52)		(48)
Proceeds from sales of property, plant and equipment	Proceeds from sales of property, plant and equipment	56		—		Proceeds from sales of property, plant and equipment	0		56
Net cash used for investing activities	Net cash used for investing activities	(26)		(432)		Net cash used for investing activities	(52)		(26)
Financing	Financing					Financing
Repayments of debt		(4)		(8)
Net proceeds from revolver draw		800		—
Revolving credit facility renewal fees						Revolving credit facility renewal fees	(7)		0

Repayment of debt						Repayment of debt	(3)		(4)
Proceeds from unsecured revolving credit facility draw						Proceeds from unsecured revolving credit facility draw	0		800

Issuances of common stock	Issuances of common stock	5		45		Issuances of common stock	45		5
Purchases of common stock	Purchases of common stock	(253)		(145)		Purchases of common stock	(170)		(253)

Payments of dividends	Payments of dividends	(109)		(93)		Payments of dividends	(121)		(109)

Net cash provided by (used for) financing activities	Net cash provided by (used for) financing activities	439		(201)		Net cash provided by (used for) financing activities	(256)		439

Effect of exchange rate changes on total cash and cash equivalents	Effect of exchange rate changes on total cash and cash equivalents	(50)		22		Effect of exchange rate changes on total cash and cash equivalents	4		(50)
Net increase (decrease) in total cash and cash equivalents		671		(360)
Net increase in total cash and cash equivalents						Net increase in total cash and cash equivalents	66		671
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	1,001		1,257		Cash and cash equivalents, beginning of period	1,254		1,001
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	1,672	$	897	Cash and cash equivalents, end of period	$	1,320	$	1,672
Supplemental Cash Flow Information	Supplemental Cash Flow Information					Supplemental Cash Flow Information
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest paid	Interest paid	$	61	$	72	Interest paid	$	59	$	61
Income and withholding taxes, net of refunds	Income and withholding taxes, net of refunds	22		23		Income and withholding taxes, net of refunds	78		22

See accompanying ~~notes~~Notes to ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements (unaudited).


	INDEX FOR NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Page No.
Note 1	Basis of Presentation	7
Note 2	Revenue from Contracts with Customers	9
Note 3	Leases	10
Note 4	Other Financial Data	11
Note 5	Debt and Credit Facilities	16
Note 6	Risk Management	16
Note 7	Income Taxes	17
Note 8	Retirement and Other Employee Benefits	18
Note 9	Share-Based Compensation Plans	18
Note 10	Fair Value Measurements	19
Note 11	Sales of Receivables	19
Note 12	Commitments and Contingencies	20
Note 13	Segment Information	20
Note 14	Reorganization of Business	21
Note 15	Intangible Assets and Goodwill	21

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in millions, except as noted)

~~(Unaudited)~~

1.Basis of Presentation

The condensed consolidated financial statements as of ~~March 28, 2020~~April 3, 2021 and for the three months ended April 3, 2021 and March 28, 2020 ~~and March 30, 2019~~ include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to ~~present~~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, ~~2019.~~2020 (the "Form 10-K"). The results of operations for the three months ended ~~March 28, 2020~~April 3, 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.

~~Recent Acquisitions and Developments~~Change in Presentation

~~On March 17,~~As further described in the Form 10-K, during the fourth quarter of 2020, the Company ~~announced~~updated its revenue disaggregation presentation of major products and services to provide a more comprehensive view of technologies within the ~~proposed~~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 Analytics, and Command Center Software.

•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 Analytics: 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

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.

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 Analytics, 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 ~~approximately~~ $37 million. The acquisition was settled with $35 million ~~in cash.~~of cash, net of cash acquired and debt assumed. The ~~proposed~~ acquisition complements the Company's ~~video security~~Video Security and ~~analytics portfolio,~~Analytics technology, providing enhanced geographical reach across a wider customer base. The ~~proposed~~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 ~~subject to customary closing conditions for~~ a ~~UK public transaction~~part of the Software and ~~is expected to close in the second quarter of 2020.~~Services segment.

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.

~~On October 16, 2019,~~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 ~~acquired~~on January 1, 2022, including interim periods, with early adoption permitted. The ASU permits the use of either a ~~data solutions business for vehicle location information for a purchase price~~full or modified retrospective method of $85 million, net of cash acquired. The acquisition enhances the Company's video security platform by adding data to the Company’s existing license plate recognition (“LPR”) database within the Software and Services segment.

On March 11, 2019, the Company acquired Avtec, Inc. ("Avtec"), a provider of dispatch communication equipment for U.S. public safety and commercial customers for a purchase price of $136 million in cash, net of cash acquired. This acquisition expands the Company's commercial portfolio with new capabilities, allowing it to offer an enhanced platform for customers to communicate, coordinate resources, and secure their facilities. The business is part of both the Product and Systems Integration segment and the Software and Services segment.

On January 7, 2019, the Company announced that it acquired VaaS International Holdings ("VaaS"), a global provider of data and image analytics for vehicle location for $445 million, inclusive of share-based compensation withheld at a fair value of $38 million that will be expensed over an average service period of one year. The acquisition was settled with $231 million of cash, net of cash acquired, and 1.4 million of shares issued at a fair value of $160 million for a purchase price of $391 million. This acquisition expands the Company's video security platform within both the Product and Systems Integration segment and the Software and Services segment.

~~Change in presentation~~

During the first quarter of 2020, the Company restructured its operations to realize more operational efficiencies, combining EMEA, AP and LA into one region which is now reflected as "International." Accordingly, the Company now reports net sales in the following 2 geographic regions: North America, which includes the United States and Canada, and International.adoption. The Company ~~has updated all periods presented to reflect~~is still evaluating the impact of the adoption of this ~~change in presentation.~~ASU on its financial statements and disclosures.

~~Recent~~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. ~~The ASU is effective~~

~~for the Company on January 1, 2021 with early adoption permitted.~~ Portions of the amendment within the ASU require retrospective, modified retrospective or prospective adoption methods. The Company ~~is still evaluating the impact of adoption on its financial statements and disclosures.~~

~~In August 2018, the FASB issued~~adopted ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) - Changes to the Disclosure Requirements for Defined Benefit Plans,” which modifies the disclosure requirements for the defined benefit pension plans and other postretirement plans. The ASU is effective for the Company on2019-12 as of January 1, 2021 ~~with early~~on a prospective basis and the adoption ~~permitted. The ASU requires a retrospective adoption method. The Company does~~of this standard did not ~~believe the ASU will~~ have a material impact on its financial statement disclosures.

~~Recently Adopted Accounting Pronouncements~~

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. In November 2018, April 2019, May 2019 and November 2019, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," ASU No. 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief," and ASU No. 2019-11," Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” which provided additional implementation guidance on the previously issued ASU. The Company adopted ASC 326 as of January 1, 2020 using a modified retrospective transition approach for all credit losses. Consequently, financial information will not be updated and disclosures required under ASC 326 will not be provided for dates and periods before January 1, 2020.

The Company considered the impact of adoption by reviewing historical losses in conjunction with current and future economic conditions on the following financial assets: i) cash equivalents, ii) accounts receivable, iii) contract assets and iv) long-term receivables. Historical losses for these financial assets were previously insignificant with the exception of accounts receivable. The Company estimates credit losses on accounts receivable based on historical losses and then takes into account estimates of current and future economic conditions. The Company’s historical loss model is based on past due customer receivable balances and considers past collection experience, historical write-offs as well as the customer’s overall financial condition. Customer receivables are considered past due if payments have not been received within the agreed invoice terms. These historical losses are aggregated based on the type of customer (Direct and Indirect) and the geographic region (North America and International). The adoption of this standard did not have a material impact to the Company's financial statements.

~~The following table displays the rollforward of the allowance for credit losses on the Company's trade receivables:~~

Allowance for Credit Losses Balance at January 1, 2020 Charged to Earnings Used Adjustments* Balance at
March 28, 2020
2020 $ 63 $ 11 $ (5) $ (2) $ 67

*Adjustments include translation adjustments

2. Revenue from Contracts with Customers

Disaggregation of Revenue

The following table summarizes the disaggregation of ~~our~~the Company's revenue by segment, geography, major product and service type and customer type for the three months ended April 3, 2021 and March 28, 2020, ~~and March 30, 2019,~~ consistent with the information reviewed by ~~our~~the Company's chief operating decision maker for evaluating the financial performance of ~~operating~~the Company's reportable segments:


		Three Months Ended															Three Months Ended
		March 28, 2020						March 30, 2019							April 3, 2021						March 28, 2020
		Products and Systems Integration		Software and Services		Products and Systems Integration		Software and Services
(In millions)										(In millions)	Products and Systems Integration		Software and Services		Total		Products and Systems Integration		Software and Services		Total
Regions:	Regions:									Regions:
North America	North America	$	748	$	368	$	755	$	320	North America	$	742	$	443	$	1,185	$	748	$	368	$	1,116
International	International	245		294		314		268		International	273		315		588		245		294		539
		$	993	$	662	$	1,069	$	588		$	1,015	$	758	$	1,773	$	993	$	662	$	1,655

Major Products and Services:	Major Products and Services:									Major Products and Services:
Devices		$	620	$	—	$	686	$	—
Systems and Systems Integration		373		—		383		—
Services		—		493		—		452
Software		—		169		—		136
LMR										LMR	$	850	$	551	$	1,401	$	860	$	490	$	1,350
Video Security and Analytics										Video Security and Analytics	165		88		253		133		67		200
Command Center Software										Command Center Software	0		119		119		0		105		105
		$	993	$	662	$	1,069	$	588		$	1,015	$	758	$	1,773	$	993	$	662	$	1,655

Customer Type:	Customer Type:									Customer Type:
Direct	Direct	$	641	$	621	$	657	$	553	Direct	$	604	$	690	$	1,294	$	641	$	621	$	1,262
Indirect	Indirect	352		41		412		35		Indirect	411		68		479		352		41		393
		$	993	$	662	$	1,069	$	588		$	1,015	$	758	$	1,773	$	993	$	662	$	1,655

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 ~~price~~values associated with remaining performance obligations which ~~are~~were not yet satisfied as of ~~March 28, 2020 is $6.7~~April 3, 2021 was $7.2 billion. A total of ~~$2.9~~$3.3 billion iswas from Products and Systems Integration performance obligations that are not yet satisfied, of which ~~$1.4~~$1.6 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 ~~$3.8~~$3.9 billion iswas from Software and Services performance obligations that ~~are~~were not yet satisfied as of ~~March 28, 2020.~~April 3, 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 ~~$1.3~~$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


		March 28, 2020		December 31, 2019
(In millions)						(In millions)	April 3, 2021		December 31, 2020
Accounts receivable, net	Accounts receivable, net	$	1,122	$	1,412	Accounts receivable, net	$	1,090	$	1,390
Contract assets	Contract assets	958		1,046		Contract assets	767		933
Contract liabilities	Contract liabilities	1,278		1,449		Contract liabilities	1,419		1,554
Non-current contract liabilities	Non-current contract liabilities	264		274		Non-current contract liabilities	280		283

Revenue recognized during the three months ended April 3, 2021 which was previously included in Contract liabilities as of December 31, 2020 was $396 million, compared to $382 million of revenue recognized during the three months ended March 28, 2020 which was previously included in Contract liabilities as of December 31, ~~2019 is $382 million, compared to $393 million of revenue recognized during the three months ended March 30, 2019 which was previously included in Contract liabilities as of December 31, 2018.~~2019. Revenue of ~~$19~~$4 million was reversed during the three months ended ~~March 28, 2020,~~April 3, 2021 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 $9$19 million of reversals for the three months ended March ~~30, 2019.~~28, 2020.

There were 0 material expected credit losses recognized on contract assets during each of the three months ended April 3, 2021 and March 28, ~~2020 and March 30, 2019.~~

2020.

Contract Cost Balances


		March 28, 2020		December 31, 2019
(In millions)						(In millions)	April 3, 2021		December 31, 2020
Current contract cost assets	Current contract cost assets	$	21	$	24	Current contract cost assets	$	36	$	23
Non-current contract cost assets	Non-current contract cost assets	99		107		Non-current contract cost assets	105		105

Amortization of non-current contract cost assets was $13 million for the three months ended April 3, 2021 and $11 million for the three months ended March 28, ~~2020 and March 30, 2019.~~2020.

3. Leases

~~The components~~Components of ~~the Company's lease expense are as follows:~~Lease Expense


		Three months ended							Three months ended
(in millions)	(in millions)	March 28, 2020		March 30, 2019		(in millions)	April 3, 2021		March 28, 2020
Lease expense:	Lease expense:					Lease expense:
Operating lease cost	Operating lease cost	$	34	$	33	Operating lease cost	$	33	$	34
Finance lease cost	Finance lease cost					Finance lease cost
Amortization of right-of-use assets	Amortization of right-of-use assets	3		3		Amortization of right-of-use assets	3		3
Interest on lease liabilities		—		1
Total finance lease cost		3		4

Short-term lease cost	Short-term lease cost	—		2		Short-term lease cost	1		0
Variable cost	Variable cost	8		9		Variable cost	9		8
Sublease income	Sublease income	(1)		(1)		Sublease income	(1)		(1)
Net lease expense	Net lease expense	$	44	$	47	Net lease expense	$	45	$	44

Lease ~~assets~~Assets and ~~liabilities consist of the following:~~Liabilities


(in millions)	(in millions)	Statement Line Classification	March 28, 2020		December 31, 2019		(in millions)	Statement Line Classification	April 3, 2021		December 31, 2020
Assets:	Assets:						Assets:
Operating lease assets	Operating lease assets	Operating lease assets	$	521	$	554	Operating lease assets	Operating lease assets	$	448	$	468
Finance lease assets	Finance lease assets	Property, plant, and equipment, net	33		41		Finance lease assets	Property, plant, and equipment, net	27		30
			$	554	$	595			$	475	$	498
Current liabilities:	Current liabilities:						Current liabilities:
Operating lease liabilities	Operating lease liabilities	Accrued liabilities	$	119	$	122	Operating lease liabilities	Accrued liabilities	$	135	$	126
Finance lease liabilities	Finance lease liabilities	Current portion of long-term debt	11		13		Finance lease liabilities	Current portion of long-term debt	10		11
			$	130	$	135			$	145	$	137
Non-current liabilities:	Non-current liabilities:						Non-current liabilities:
Operating lease liabilities	Operating lease liabilities	Operating lease liabilities	$	458	$	497	Operating lease liabilities	Operating lease liabilities	$	356	$	402
Finance lease liabilities	Finance lease liabilities	Long-term debt	11		16		Finance lease liabilities	Long-term debt	3		5
			$	469	$	513			$	359	$	407

Other ~~information related~~Information Related to ~~leases is as follows:~~Leases


		Three months ended							Three Months Ended
(in millions)	(in millions)	March 28, 2020		March 30, 2019		(in millions)	April 3, 2021		March 28, 2020

Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Net cash used for operating activities related to operating leases	Net cash used for operating activities related to operating leases	$	37	$	33	Net cash used for operating activities related to operating leases	$	54	$	37
Net cash used for operating activities related to finance leases		—		1

Net cash used for financing activities related to finance leases	Net cash used for financing activities related to finance leases	3		4		Net cash used for financing activities related to finance leases	3		3
Assets obtained in exchange for lease liabilities:	Assets obtained in exchange for lease liabilities:					Assets obtained in exchange for lease liabilities:
Operating leases	Operating leases	$	19	$	27	Operating leases	$	15	$	19

910


(in millions)	(in millions)	March 28, 2020		December 31, 2019		(in millions)	April 3, 2021		December 31, 2020

Weighted average remaining lease terms (years):	Weighted average remaining lease terms (years):					Weighted average remaining lease terms (years):
Operating leases	Operating leases	7		7		Operating leases	6		6
Finance leases	Finance leases	2		2		Finance leases	1		2
Weighted average discount rate:	Weighted average discount rate:					Weighted average discount rate:
Operating leases	Operating leases	3.64	%	3.61	%	Operating leases	3.16	%	3.30	%
Finance leases	Finance leases	4.27	%	4.28	%	Finance leases	4.18	%	4.21	%

Future ~~lease payments as of March 28, 2020 are as follows:~~Lease Payments


									April 3, 2021
(in millions)	(in millions)	Operating Leases		Finance Leases		Total		(in millions)	Operating Leases		Finance Leases		Total
Remainder of 2020		$	104	$	9	$	113
2021		127		10		137
Remainder of 2021								Remainder of 2021	$	88	$	8	$	96
2022	2022	112		4		116		2022	130		5		135
2023	2023	65		1		66		2023	76		1		77
2024	2024	54		—		54		2024	62		0		62
2025								2025	50		0		50
Thereafter	Thereafter	201		—		201		Thereafter	138		0		138
Total lease payments	Total lease payments	663		24		687		Total lease payments	544		14		558
Less: interest	Less: interest	86		2		88		Less: interest	53		1		54
Present value of lease liabilities	Present value of lease liabilities	$	577	$	22	$	599	Present value of lease liabilities	$	491	$	13	$	504

4. Other Financial Data

Statements of Operations Information

Other Charges ~~(Income)~~

Other charges (income) included in Operating earnings consist of the following:


		Three Months Ended							Three Months Ended
		March 28, 2020		March 30, 2019			April 3, 2021		March 28, 2020
Other charges (income):	Other charges (income):					Other charges (income):
Intangibles amortization (Note 15)	Intangibles amortization (Note 15)	$	53	$	50	Intangibles amortization (Note 15)	$	58	$	53
Reorganization of business (Note 14)	Reorganization of business (Note 14)	12		4		Reorganization of business (Note 14)	14		12

Loss (gain) on legal settlements		2		(1)
Operating lease asset impairments						Operating lease asset impairments	7		0
Acquisition-related transaction fees						Acquisition-related transaction fees	1		2
Losses on legal settlements						Losses on legal settlements	0		2

Gain on sale of property, plant and equipment	Gain on sale of property, plant and equipment	(50)		—		Gain on sale of property, plant and equipment	0		(50)
Acquisition-related transaction fees		2		2
Other						Other	(1)		0
							$	79	$	19
		$	19	$	55

During the three months ended April 3, 2021, the Company recognized $7 million of operating lease asset impairments relating to the consolidation of acquired U.S. manufacturing and distribution facilities. This loss has been recognized in Other charges in the Company's Condensed Consolidated Statements of Operations.

During the three months ended March 28, 2020, the Company recorded a $50 million gain on the sale of a manufacturing facility in Europe. This gain has been recognized in Other charges in the Company's Condensed Consolidated Statements of Operations.

1011

Other Income (Expense)

Interest expense, net, and Other, net, both included in Other income (expense), consist of the following:


		Three Months Ended							Three Months Ended
		March 28, 2020		March 30, 2019			April 3, 2021		March 28, 2020
Interest income (expense), net:	Interest income (expense), net:					Interest income (expense), net:
Interest expense	Interest expense	$	(55)	$	(60)	Interest expense	$	(56)	$	(55)
Interest income	Interest income	3		5		Interest income	2		3
		$	(52)	$	(55)		$	(54)	$	(52)
Other, net:	Other, net:					Other, net:
Net periodic pension and postretirement benefit (Note 8)	Net periodic pension and postretirement benefit (Note 8)	$	20	$	16	Net periodic pension and postretirement benefit (Note 8)	$	30	$	20

Investment impairments		—		(8)
Foreign currency gain (loss)		18		(4)

Foreign currency gain						Foreign currency gain	14		18
Loss on derivative instruments	Loss on derivative instruments	(16)		(4)		Loss on derivative instruments	(8)		(16)
Gains on equity method investments	Gains on equity method investments	1		1		Gains on equity method investments	2		1
Fair value adjustments to equity investments	Fair value adjustments to equity investments	1		(1)		Fair value adjustments to equity investments	5		1
Other	Other	(7)		10		Other	2		(7)
		$	17	$	10		$	45	$	17

Earnings Per Common Share

The computation of basic and diluted earnings per common share is as follows:


		Amounts attributable to Motorola Solutions, Inc. common stockholders							Amounts attributable to Motorola Solutions, Inc. common stockholders
		Three Months Ended							Three Months Ended
		March 28, 2020		March 30, 2019			April 3, 2021		March 28, 2020
Basic earnings per common share:	Basic earnings per common share:					Basic earnings per common share:
Earnings	Earnings	$	197	$	151	Earnings	$	244	$	197
Weighted average common shares outstanding	Weighted average common shares outstanding	170.6		164.0		Weighted average common shares outstanding	169.3		170.6
Per share amount	Per share amount	$	1.15	$	0.92	Per share amount	$	1.44	$	1.15
Diluted earnings per common share:	Diluted earnings per common share:					Diluted earnings per common share:
Earnings	Earnings	$	197	$	151	Earnings	$	244	$	197
Weighted average common shares outstanding	Weighted average common shares outstanding	170.6		164.0		Weighted average common shares outstanding	169.3		170.6
Add effect of dilutive securities:	Add effect of dilutive securities:					Add effect of dilutive securities:
Share-based awards	Share-based awards	5.3		4.9		Share-based awards	3.9		5.3
2.00% senior convertible notes		—		5.7
1.75% senior convertible notes		—		—

Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	175.9		174.6		Diluted weighted average common shares outstanding	173.2		175.9
Per share amount	Per share amount	$	1.12	$	0.86	Per share amount	$	1.41	$	1.12

~~For~~In the computation of diluted earnings per common share for the three months ended ~~March 28, 2020,~~April 3, 2021, the assumed exercise of ~~0.2 million employee stock options, were excluded because their inclusion would have been antidilutive. For the three months ended March 30, 2019, the assumed exercise of 0.5~~0.3 million options, including ~~0.2~~0.1 million subject to market based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the three months ended March 28, 2020, 0.2 million options were excluded because their inclusion would have been antidilutive.

As of ~~March 28, 2020,~~April 3, 2021, the Company had $1.0 billion of 1.75% ~~senior convertible notes~~Senior Convertible Notes outstanding which mature inon September 15, 2024 ("~~New~~ Senior Convertible Notes"). The notes are convertible based on a conversion rate of 4.9140 per $1,000 principal amount (which is equal to an initial conversion price of $203.50 per share). In the event of conversion, the Company intends to settle the principal amount of the ~~New~~ Senior Convertible Notes in cash. Because of the Company’s intention to settle the par value of the ~~New~~ Senior Convertible Notes in cash, Motorola Solutions does not reflect any shares underlying the ~~New~~ Senior Convertible Notes in its diluted weighted average shares outstanding until the average stock price per share for the period exceeds the conversion price. Only the number of shares that would be issuable (under the treasury stock

method of accounting for share dilution) will be included, which is based upon the amount by which the average stock price exceeds the conversion price of $203.50. The conversion price is adjusted for dividends declared through the date of settlement. For the period ended ~~March 28, 2020,~~April 3, 2021, there was no dilutive effect of the ~~New~~ Senior Convertible Notes on diluted earnings per share attributable to Motorola Solutions, Inc. as the average stock price for the period outstanding was below the conversion price. ~~See further discussion in Note 5.~~

Balance Sheet Information

Accounts Receivable, Net

Accounts receivable, net, consists of the following:


		March 28, 2020		December 31, 2019			April 3, 2021		December 31, 2020
Accounts receivable	Accounts receivable	$	1,189	$	1,475	Accounts receivable	$	1,167	$	1,465
Less allowance for credit losses	Less allowance for credit losses	(67)		(63)		Less allowance for credit losses	(77)		(75)
		$	1,122	$	1,412		$	1,090	$	1,390

Inventories, Net

Inventories, net, consist of the following:


		March 28, 2020		December 31, 2019			April 3, 2021		December 31, 2020
Finished goods	Finished goods	$	214	$	209	Finished goods	$	261	$	271
Work-in-process and production materials	Work-in-process and production materials	363		374		Work-in-process and production materials	392		360
		577		583			653		631
Less inventory reserves	Less inventory reserves	(135)		(136)		Less inventory reserves	(123)		(123)
		$	442	$	447		$	530	$	508

Other Current Assets

Other current assets consist of the following:


		March 28, 2020		December 31, 2019			April 3, 2021		December 31, 2020
Current contract cost assets (Note 2)	Current contract cost assets (Note 2)	$	21	$	24	Current contract cost assets (Note 2)	$	36	$	23
Tax-related deposits	Tax-related deposits	60		77		Tax-related deposits	43		52
Other	Other	206		171		Other	156		167
		$	287	$	272		$	235	$	242

Property, Plant and Equipment, Net

Property, plant and equipment, net, ~~consists~~consist of the following:


		March 28, 2020		December 31, 2019			April 3, 2021		December 31, 2020
Land	Land	$	6	$	15	Land	$	6	$	6
Leasehold improvements	Leasehold improvements	379		410		Leasehold improvements	449		439
Machinery and equipment	Machinery and equipment	1,997		2,051		Machinery and equipment	2,331		2,276
		2,382		2,476			2,786		2,721
Less accumulated depreciation	Less accumulated depreciation	(1,450)		(1,484)		Less accumulated depreciation	(1,758)		(1,699)
		$	932	$	992		$	1,028	$	1,022

Depreciation expense for the three months ended April 3, 2021 and March 28, 2020 was $52 million and ~~March 30, 2019 was~~ $46 million, ~~and $45 million,~~ respectively.

Investments

Investments consist of the following:


		March 28, 2020		December 31, 2019			April 3, 2021		December 31, 2020

Common stock	Common stock	$	21	$	25	Common stock	$	24	$	19
Strategic investments, at cost	Strategic investments, at cost	44		40		Strategic investments, at cost	48		46
Company-owned life insurance policies	Company-owned life insurance policies	68		74		Company-owned life insurance policies	79		77
Equity method investments	Equity method investments	21		20		Equity method investments	17		16

		$	154	$	159		$	168	$	158

During the three months ended March 30, 2019, the Company recorded an investment impairment charge of $8 million, representing other-than-temporary declines in the value in the Company's Strategic investment portfolio. Investment impairment charges are included in Other ~~within Other income (expense) in the Company’s Condensed Consolidated Statements of Operations.~~Assets

Other assets consist of the following:


		March 28, 2020		December 31, 2019
							April 3, 2021		December 31, 2020
Defined benefit plan assets	Defined benefit plan assets	$	236	$	223	Defined benefit plan assets	$	308	$	283

Non-current contract cost assets (Note 2)	Non-current contract cost assets (Note 2)	99		107		Non-current contract cost assets (Note 2)	105		105
Other	Other	58		92		Other	68		94
		$	393	$	422		$	481	$	482

Accrued Liabilities

Accrued liabilities consist of the following:


		March 28, 2020		December 31, 2019			April 3, 2021		December 31, 2020
Compensation	Compensation	$	361	$	347	Compensation	$	232	$	291
Tax liabilities	Tax liabilities	48		95		Tax liabilities	89		147
Dividend payable	Dividend payable	109		110		Dividend payable	121		120
Trade liabilities	Trade liabilities	144		161		Trade liabilities	153		164
Operating lease liabilities (Note 3)	Operating lease liabilities (Note 3)	119		122		Operating lease liabilities (Note 3)	135		126
Other	Other	475		521		Other	451		463
		$	1,256	$	1,356		$	1,181	$	1,311

Other Liabilities

Other liabilities consist of the following:


		March 28, 2020		December 31, 2019			April 3, 2021		December 31, 2020
Defined benefit plans	Defined benefit plans	$	1,490	$	1,524	Defined benefit plans	$	1,531	$	1,578

Non-current contract liabilities (Note 2)	Non-current contract liabilities (Note 2)	264		274		Non-current contract liabilities (Note 2)	280		283
Unrecognized tax benefits		55		53

Deferred income taxes	Deferred income taxes	171		184		Deferred income taxes	176		180

Other	Other	218		241		Other	299		322
		$	2,198	$	2,276		$	2,286	$	2,363

Stockholders’ Equity (Deficit)

Share Repurchase Program: During the three months ended ~~March 28, 2020,~~April 3, 2021, the Company paid an aggregate of ~~$253~~$170 million, including transaction costs, to repurchase approximately ~~1.6~~1.0 million shares at an average price of ~~$162.85~~$175.53 per share. As of ~~March 28, 2020,~~April 3, 2021, the Company had ~~$1.0 billion~~$479 million of authority available for future repurchases. Subsequent to quarter end, the Board of Directors approved a $2.0 billion increase to the share repurchase program, raising the remaining authority for future repurchases to $2.5 billion.

Payment of Dividends: During the three months ended April 3, 2021 and March 28, 2020, ~~and March 30, 2019,~~ the Company paid $121 million and $109 million, ~~and $93~~respectively, in cash dividends to holders of its common stock. Subsequent to the quarter, the Company paid an additional $121 million ~~respectively,~~ in cash dividends to holders of its common stock.

Accumulated Other Comprehensive Loss

The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the Condensed Consolidated Statements of Operations during the three months ended April 3, 2021 and March 28, ~~2020 and March 30, 2019:~~2020:


		Three Months Ended							Three Months Ended
		March 28, 2020		March 30, 2019			April 3, 2021		March 28, 2020
Foreign Currency Translation Adjustments:	Foreign Currency Translation Adjustments:					Foreign Currency Translation Adjustments:
Balance at beginning of period	Balance at beginning of period	$	(410)	$	(444)	Balance at beginning of period	$	(360)	$	(410)
Other comprehensive income (loss) before reclassification adjustment	Other comprehensive income (loss) before reclassification adjustment	(136)		34		Other comprehensive income (loss) before reclassification adjustment	17		(136)
Tax expense		(2)		(4)
Tax benefit (expense)						Tax benefit (expense)	2		(2)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	(138)		30		Other comprehensive income (loss), net of tax	19		(138)

Balance at end of period	Balance at end of period	$	(548)	$	(414)	Balance at end of period	$	(341)	$	(548)

Defined Benefit Plans:	Defined Benefit Plans:					Defined Benefit Plans:
Balance at beginning of period	Balance at beginning of period	$	(2,030)	$	(2,321)	Balance at beginning of period	$	(2,086)	$	(2,030)

Reclassification adjustment - Actuarial net losses into Other income (expense)		19		17
Reclassification adjustment - Prior service benefits into Other income (expense)		(4)		(4)
Reclassification adjustment - Actuarial net losses into Other income (Note 8)						Reclassification adjustment - Actuarial net losses into Other income (Note 8)	22		19
Reclassification adjustment - Prior service benefits into Other expense (Note 8)						Reclassification adjustment - Prior service benefits into Other expense (Note 8)	(2)		(4)

Tax expense		(3)		(2)
Tax benefit						Tax benefit	(3)		(3)

Other comprehensive income, net of tax	Other comprehensive income, net of tax	12		11		Other comprehensive income, net of tax	17		12
Balance at end of period	Balance at end of period	$	(2,018)	$	(2,310)	Balance at end of period	$	(2,069)	$	(2,018)
Total Accumulated other comprehensive loss	Total Accumulated other comprehensive loss	$	(2,566)	$	(2,724)	Total Accumulated other comprehensive loss	$	(2,410)	$	(2,566)

1415

5. Debt and Credit Facilities

March 28, 2020 December 31, 2019
$2.2 billion revolving credit facility due April 2022 $ 800 $ —
3.75% senior notes due 2022 550 550
3.5% senior notes due 2023 597 597
4.0% senior notes due 2024 593 593
1.75% senior convertible notes due 2024 990 988
6.5% debentures due 2025 72 72
7.5% debentures due 2025 254 254
4.6% senior notes due 2028 691 691
6.5% debentures due 2028 24 24
4.6% senior notes due 2029 804 804
6.625% senior notes due 2037 37 37
5.5% senior notes due 2044 396 396
5.22% debentures due 2097 92 91
Other long-term debt 28 35
5,928 5,132
Adjustments for unamortized gains on interest rate swap terminations (3) (3)
Less: current portion (814) (16)
Long-term debt $ 5,111 $ 5,113

~~As of~~On March ~~28, 2020,~~24, 2021, the Company ~~had~~entered into a $2.25 billion syndicated, unsecured revolving credit facility maturing in March 2026, which can be used for general corporate purposes and letters of credit (the "2021 Motorola Solutions Credit Agreement"). The 2021 Motorola Solutions Credit Agreement replaces the Company’s $2.2 billion syndicated, unsecured revolving credit facility scheduled to mature in April ~~2022 (the "2017~~2022. The 2021 Motorola Solutions Credit Agreement~~"). The~~ ~~2017 Motorola Solutions Credit Agreement~~ includes a ~~$500 million~~ letter of credit sub-limit ~~with~~and fronting commitments of $450 ~~million of fronting commitments.~~million. Borrowings under the facility bear interest at the prime rate plus the applicable margin, or at a spread above the London Interbank Offered Rate ("LIBOR"), at the Company's option. ~~Following~~The 2021 Motorola Solutions Credit Agreement includes provisions allowing the ~~turmoil~~Company to replace LIBOR with a replacement benchmark rate in the ~~financial markets caused by~~future under certain conditions defined in the COVID-19 Pandemic, the Company borrowed $800 million under the facility to bolster its cash holdings out of precaution, of which, $800 million was outstanding as of March 28, 2020. The weighted average borrowing rate on outstanding amounts was 2.35%.agreement. An annual facility fee is payable on the undrawn amount of the credit line. The interest rate and facility fee are subject to adjustment if the Company's credit rating changes. The Company must comply with certain customary covenants including a maximum leverage ratio, as defined in the ~~2017~~2021 Motorola Solutions Credit ~~Agreement~~.Agreement. The Company was in compliance with its financial covenants as of ~~March 28, 2020.~~

As of March 28, 2020, the Company had $1.0 billion of 1.75% senior convertible notes with Silver Lake, which mature in September 2024 ("New Senior Convertible Notes"). The notes are convertible anytime on or after two years from their issuance date, except in certain limited circumstances. The notes are convertible based on a conversion rate of 4.9140 per $1,000 principal amount (which is equal to an initial conversion price of $203.50 per share). In the event of conversion, the Company intends to settle the principal amount of the New Senior Convertible Notes in cash. The Company has recorded a debt liability associated with the New Senior Convertible Notes by determining the fair value of an equivalent debt instrument without a conversion option. Using a discount rate of 2.45%, which was determined based on a review of relevant market data, the Company has calculated the debt liability to be $986 million, indicating a $14 million discount to be amortized over the expected life of the debt instrument. The remaining proceeds of $14 million were allocated to the conversion option and accordingly, increased Additional paid-in capital.April 3, 2021.

The Company has an unsecured commercial paper program, backed by the ~~revolving credit facility,~~2021 Motorola Solutions Credit Agreement, under which the Company may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $2.2 billion outstanding at any one time. Proceeds from the issuances of the notes are expected to be used for general corporate purposes. The notes are issued at a zero-coupon rate and are issued at a discount which reflects the interest component. At maturity, the notes are paid back in full including the interest component. The notes are not redeemable prior to maturity. As of ~~March 28, 2020~~April 3, 2021 the Company had 0 outstanding debt under the commercial paper program.

6. Risk Management

Foreign Currency Risk

~~As of March 28, 2020, the~~The Company had outstanding foreign exchange contracts with notional amounts totaling ~~$989 million, compared to $1.1~~$1.2 billion ~~outstanding at~~for each of the periods ended April 3, 2021 and December 31, ~~2019.~~2020. The Company does not believe these financial instruments should subject it to undue risk due to foreign exchange movements because gains and losses on these contracts should generally offset gains and losses on the underlying assets, liabilities and transactions.

The following table shows the 5 largest net notional amounts of the positions to buy or sell foreign currency as of ~~March 28, 2020,~~April 3, 2021, and the corresponding positions as of December 31, ~~2019:~~2020:


		Notional Amount							Notional Amount
Net Buy (Sell) by Currency	Net Buy (Sell) by Currency	March 28, 2020		December 31, 2019		Net Buy (Sell) by Currency	April 3, 2021		December 31, 2020
Euro	Euro	$	228	$	134	Euro	$	170	$	177
Canadian dollar						Canadian dollar	50		61
Norwegian krone	Norwegian krone	28		32		Norwegian krone	35		32
Canadian dollar		21		8
Chinese renminbi						Chinese renminbi	(94)		(90)
Australian dollar	Australian dollar	(93)		(123)		Australian dollar	(82)		(88)
Chinese renminbi		(74)		(79)

Counterparty Risk

The use of derivative financial instruments exposes the Company to counterparty credit risk in the event of non-performance by counterparties. However, the Company’s risk is limited to the fair value of the instruments when the derivative is in an asset position. The Company actively monitors its exposure to credit risk. As of ~~March 28, 2020,~~April 3, 2021, all of the counterparties ~~have~~had investment grade credit ratings. As of ~~March 28, 2020,~~April 3, 2021, the Company had ~~$24~~$7 million of exposure to aggregate credit risk with all counterparties.

The following tables summarize the fair values and locations in the Condensed Consolidated Balance Sheets of all derivative financial instruments held by the Company as of ~~March 28, 2020~~April 3, 2021 and December 31, ~~2019:~~2020:

Fair Values of Derivative Instruments
March 28, 2020 Other Current Assets Accrued Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts $ 18 $ —
Derivatives not designated as hedging instruments:
Foreign exchange contracts 6 6
Total derivatives $ 24 $ 6

Fair Values of Derivative Instruments
December 31, 2019 Other Current Assets Accrued Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts $ 3 $ —
Derivatives not designated as hedging instruments:
Foreign exchange contracts 1 5
Total derivatives $ 4 $ 5


	Fair Values of Derivative Instruments
April 3, 2021	Other Current Assets		Accrued Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	6	$	1
Derivatives not designated as hedging instruments:
Foreign exchange contracts	1		11
Total derivatives	$	7	$	12


	Fair Values of Derivative Instruments
December 31, 2020	Other Current Assets		Accrued Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	0	$	5
Derivatives not designated as hedging instruments:
Foreign exchange contracts	14		3
Total derivatives	$	14	$	8

The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three months ended April 3, 2021 and March 28, ~~2020 and March 30, 2019:~~2020:

Three Months Ended

Financial Statement Location

Three Months Ended

Foreign Exchange Contracts

March 28, 2020

March 30, 2019

Financial Statement Location

March 28, 2020

Effective portion

Accumulated other
comprehensive income

Forward points recognized

Other income

Forward points recognized

Other income (expense)

Undesignated derivatives recognized

(16)

(4)

Other expense

Undesignated derivatives recognized

Other income (expense)

(8)

(16)

Net Investment Hedges

The Company uses foreign exchange forward contracts with contract terms of 12 to 15 months to hedge against the effect of the British pound and the Euro exchange rate fluctuations against the U.S. dollar on a portion of its net ~~investment~~investments in certain European operations. The Company recognizes changes in the fair value of the net investment hedges as a component of foreign currency translation adjustments within other comprehensive income to offset a portion of the change in translated value of the net ~~investment~~investments being hedged, until the ~~investment is~~investments are sold or liquidated. As of ~~March 28, 2020,~~April 3, 2021, the Company had ~~€94~~€100 million of net investment hedges in certain Euro functional subsidiaries and ~~£100~~£125 million of net investment hedges in certain British pound functional subsidiaries.

The Company excludes the difference between the spot rate and the forward rate of the forward contract from its assessment of hedge effectiveness. The effect of the excluded components will be amortized on a straight line basis and recognized through interest expense.

7. Income Taxes

At the end of each interim reporting period, the Company makes an estimate of its annual effective income tax rate. Tax expense in interim periods is calculated at the estimated annual effective tax rate plus or minus the tax effects of items of income and expense that are discrete to the period. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods.

The following table provides details of income taxes:


		Three Months Ended										Three Months Ended
		March 28, 2020			March 30, 2019				April 3, 2021			March 28, 2020
Net earnings before income taxes	Net earnings before income taxes	$	224		$	185		Net earnings before income taxes	$	289		$	224
Income tax expense	Income tax expense	26			33			Income tax expense	44			26
Effective tax rate	Effective tax rate	12		%	18		%	Effective tax rate	15		%	12		%

During the three months ended April 3, 2021, the Company recorded $44 million of net tax expense, resulting in an effective tax rate of 15%. During the three months ended March 28, 2020, the Company recorded $26 million of net tax expense, resulting in an effective tax rate of 12%. ~~During~~The effective tax rates for each of the three months ended ~~March 30, 2019, the Company recorded $33 million of net tax expense, resulting in an effective tax rate of 18%. The three months ended~~April 3, 2021 and March 28, 2020 ~~and March 30, 2019 effective tax rates are~~was different from the U.S. federal statutory tax rate of 21% due to state tax expense, offset primarily by ~~excess~~ tax benefits onrelated to share-based compensation. The effective tax rate for the three months ended April 3, 2021 of 15% is higher than the effective tax rate for the three months ended March 28, 2020 of 12% ~~is lower than the effective tax rate for the three months ended March 30, 2019 of 18%~~, primarily due to ~~a higher excess~~lower tax benefits on share-based compensation.

8. Retirement and Other Employee Benefits

Pension and Postretirement Health Care Benefits Plans

The net periodic benefits for Pension and Postretirement Health Care Benefits Plans were as follows:


		U.S. Pension Benefit Plans						Non-U.S. Pension Benefit Plans								Postretirement Health Care Benefits Plan					U.S. Pension Benefit Plans				Non-U.S. Pension Benefit Plans		Postretirement Health Care Benefits Plan
Three Months Ended	Three Months Ended	March 28, 2020		March 30, 2019		March 28, 2020		March 30, 2019		March 28, 2020		March 30, 2019		Three Months Ended	April 3, 2021		March 28, 2020		April 3, 2021		March 28, 2020		April 3, 2021		March 28, 2020
Service cost	Service cost	$	—	$	—	$	1	$	1	$	—	$	—	Service cost	$	0	$	0	$	1	$	1	$	0	$	0
Interest cost	Interest cost	36		51		7		10		1		1		Interest cost	29		36		5		7		0		1
Expected return on plan assets	Expected return on plan assets	(56)		(69)		(22)		(21)		(3)		(3)		Expected return on plan assets	(59)		(56)		(25)		(22)		(3)		(3)
Amortization of:	Amortization of:													Amortization of:
Unrecognized net loss	Unrecognized net loss	14		12		4		4		1		1		Unrecognized net loss	17		14		4		4		1		1
Unrecognized prior service benefit	Unrecognized prior service benefit	—		—		—		—		(4)		(4)		Unrecognized prior service benefit	0		0		(1)		0		(1)		(4)

Net periodic pension benefits	Net periodic pension benefits	$	(6)	$	(6)	$	(10)	$	(6)	$	(5)	$	(5)	Net periodic pension benefits	$	(13)	$	(6)	$	(16)	$	(10)	$	(3)	$	(5)

9. Share-Based Compensation Plans

Compensation expense for the Company’s share-based plans was as follows:


		Three Months Ended							Three Months Ended
		March 28, 2020		March 30, 2019			April 3, 2021		March 28, 2020
Share-based compensation expense included in:	Share-based compensation expense included in:					Share-based compensation expense included in:
Costs of sales	Costs of sales	$	5	$	4	Costs of sales	$	4	$	5
Selling, general and administrative expenses	Selling, general and administrative expenses	21		16		Selling, general and administrative expenses	17		21
Research and development expenditures	Research and development expenditures	12		7		Research and development expenditures	8		12
Share-based compensation expense included in Operating earnings	Share-based compensation expense included in Operating earnings	38		27		Share-based compensation expense included in Operating earnings	29		38
Tax benefit	Tax benefit	(7)		(6)		Tax benefit	(6)		(7)
Share-based compensation expense, net of tax	Share-based compensation expense, net of tax	$	31	$	21	Share-based compensation expense, net of tax	$	23	$	31
Decrease in basic earnings per share	Decrease in basic earnings per share	$	(0.18)	$	(0.13)	Decrease in basic earnings per share	$	(0.14)	$	(0.18)
Decrease in diluted earnings per share	Decrease in diluted earnings per share	$	(0.17)	$	(0.12)	Decrease in diluted earnings per share	$	(0.13)	$	(0.17)

During the three months ended ~~March 28, 2020,~~April 3, 2021, the Company granted 0.3 million restricted stock units ~~("RSUs")~~(RSUs), ~~0.03~~0.07 million performance stock units ~~("PSUs")~~(PSUs) and ~~0.1~~0.05 million market stock units ~~("MSUs")~~(MSUs) with an aggregate grant-date fair value of ~~$46~~$50 million, $7$15 million, and $9$10 million, respectively, and 0.1 million stock options and ~~0.1~~0.2 million performance options ~~("POs")~~(POs) with an aggregate grant-date fair value of $5$6 million and $9$10 million, respectively. The share-based compensation expense will generally be recognized over the vesting period of three years.

The Company granted an additional 0.03 million of restricted stock in connection with the acquisition of a cybersecurity services business, with an aggregate grant-date fair value of $6 million related to compensation withheld from the purchase price that will be expensed over an average service period of two years.

~~10. Fair Value Measurements~~

The Company holds certain fixed income securities, equity securities and derivatives, which are recognized and disclosed at fair value in the financial statements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date and is measured using the fair value hierarchy. This hierarchy prescribes valuation techniques based on whether the inputs to each measurement are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's assumptions about current market conditions. The prescribed fair value hierarchy and related valuation methodologies are as follows:

~~Level 1 — Quoted prices for identical instruments in active markets.~~

Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations, in which all significant inputs are observable, in active markets.

~~Level 3 — Valuations derived from valuation techniques, in which one or more significant inputs are unobservable.~~10. Fair Value Measurements

The fair values of the Company’s financial assets and liabilities by level in the fair value hierarchy as of ~~March 28, 2020~~April 3, 2021 and December 31, ~~2019~~2020 were as follows:


March 28, 2020		Level 1		Level 2		Total
April 3, 2021								April 3, 2021	Level 1		Level 2		Total
Assets:	Assets:							Assets:
Foreign exchange derivative contracts	Foreign exchange derivative contracts	$	—	$	24	$	24	Foreign exchange derivative contracts	$	0	$	7	$	7

Common stock	Common stock	21		—		21		Common stock	24		0		24
Liabilities:	Liabilities:							Liabilities:
Foreign exchange derivative contracts	Foreign exchange derivative contracts	$	—	$	6	$	6	Foreign exchange derivative contracts	$	0	$	12	$	12


December 31, 2019		Level 1		Level 2		Total
December 31, 2020								December 31, 2020	Level 1		Level 2		Total
Assets:	Assets:							Assets:
Foreign exchange derivative contracts	Foreign exchange derivative contracts	$	—	$	4	$	4	Foreign exchange derivative contracts	$	0	$	14	$	14

Common stock	Common stock	25		—		25		Common stock	19		0		19
Liabilities:	Liabilities:							Liabilities:
Foreign exchange derivative contracts	Foreign exchange derivative contracts	$	—	$	5	$	5	Foreign exchange derivative contracts	$	0	$	8	$	8

The Company had no Level 3 holdings as of ~~March 28, 2020~~April 3, 2021 or December 31, ~~2019.~~2020.

At ~~March 28, 2020~~April 3, 2021 and December 31, ~~2019,~~2020, the Company had ~~$914~~$463 million and ~~$322~~$448 million, respectively, of investments in money market government and U.S. treasury ~~and government~~ funds classified (Level 1) as Cash and cash equivalents in its Condensed Consolidated Balance Sheets. The money market funds had quoted market prices that are equivalent to par.

Using quoted market prices and market interest rates, the Company determined that the fair value of long-term debt at ~~March 28, 2020~~April 3, 2021 and December 31, ~~2019~~2020 was ~~$5.9~~$5.6 billion and ~~$5.5~~$5.8 billion (Level 2), respectively.

All other financial instruments are carried at cost, which is not materially different from the instruments’ fair values.

11. Sales of Receivables

Sales of Receivables

The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three months ended April 3, 2021 and March 28, ~~2020 and March 30, 2019:~~2020:


		Three Months Ended							Three Months Ended
		March 28, 2020		March 30, 2019			April 3, 2021		March 28, 2020
Contract-specific discounting facility						Contract-specific discounting facility	$	71	$	44
Accounts receivable sales proceeds	Accounts receivable sales proceeds	$	68	$	24	Accounts receivable sales proceeds	0		24
Long-term receivables sales proceeds	Long-term receivables sales proceeds	41		21		Long-term receivables sales proceeds	54		41
Total proceeds from receivable sales	Total proceeds from receivable sales	$	109	$	45	Total proceeds from receivable sales	$	125	$	109

At ~~March 28, 2020,~~April 3, 2021, the Company had retained servicing obligations for ~~$974~~$927 million of long-term receivables, compared to ~~$984~~$983 million at December 31, ~~2019.~~2020. Servicing obligations are limited to collection activities related to the sales of accounts receivables and long-term receivables. The Company had outstanding commitments to provide long-term financing to third parties totaling ~~$94~~$82 million at ~~March 28, 2020,~~April 3, 2021, compared to $78 million at December 31, ~~2019.~~2020.

During the three months ended April 3, 2021, the Company utilized a contract-specific receivable discounting facility which began during the three months ended March 28, 2020, resulting in accounts receivable sales of $71 million. The net benefit to the Company's operating cash flow from the utilization of the receivable discounting facility for the three months ended April 3, 2021 was $71 million, when adjusted for amounts that were collected under the commercial contract with the customer within the period in the absence of utilizing the discounting facility. The proceeds of the Company's receivable sales are included in Operating activities within the Company's Condensed Consolidated Statements of Cash Flows.

12. Commitments and Contingencies

Legal Matters

On ~~February~~March 14, ~~2020,~~2017, the Company ~~announced that~~filed a ~~jury~~complaint in the U.S. District Court for the Northern District of Illinois ~~decided in the Company's favor in it's trade secret theft and copyright infringement case~~(the “Court”) against Hytera Communications Corporation Limited of Shenzhen, China; Hytera America, Inc.; and Hytera Communications America (West), Inc. (collectively, “Hytera”)., alleging trade secret theft and copyright infringement and seeking, among other things, injunctive relief, compensatory damages, and punitive damages. On February 14, 2020, the Company announced that a jury decided in the Company's favor in its trade secret theft and copyright infringement case. In connection with this verdict, the jury awarded ~~Motorola Solutions~~the Company $345.8 million in compensatory damages and $418.8 million in punitive damages, for a total of $764.6 million. AThe Court denied Hytera’s motion for a new trial ~~was filed~~on October 20, 2020. On December 17, 2020, the Court denied the Company’s motion for a permanent injunction, finding instead that Hytera must pay the Company a forward-looking reasonable royalty on products that use the Company’s stolen trade secrets. The royalty rate is yet to be determined, and will be set by the Court absent agreement of the parties.

On January 11, 2021, the Court granted Hytera’s motion for certain equitable relief and reduced the $764.6 million judgment award to $543.7 million. That same day, the Court also granted the Company’s motion for pre-judgment interest, although the precise amount of interest owed to the Company by Hytera ~~subsequent~~is still to be determined by the Court. On March 25, 2021, the Court entered rulings favorable to the ~~quarter.~~Company with respect to several of the Company's post-trial motions, including the Company's motion for attorneys' fees and its motion to require Hytera to turn over certain assets in satisfaction of the Company’s judgment award.

On May 27, 2020, Hytera America, Inc. and Hytera Communications America (West), Inc. each filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Central District of California (the “Bankruptcy Court”). The Company filed motions in the Bankruptcy Court to dismiss the bankruptcy proceedings in July 2020. On January 22, 2021, the Bankruptcy Court entered an agreed order, allowing a partial sale of Hytera's U.S. assets in the bankruptcy proceedings. The proposed sale does not include Hytera inventory accused of including the Company’s intellectual property.

13. Segment Information

The following table summarizes Net sales by segment:


		Three Months Ended							Three Months Ended
		March 28, 2020		March 30, 2019			April 3, 2021		March 28, 2020
Products and Systems Integration	Products and Systems Integration	$	993	$	1,069	Products and Systems Integration	$	1,015	$	993
Software and Services	Software and Services	662		588		Software and Services	758		662
		$	1,655	$	1,657		$	1,773	$	1,655

The following table summarizes the Operating earnings by segment:


		Three Months Ended							Three Months Ended
		March 28, 2020		March 30, 2019			April 3, 2021		March 28, 2020
Products and Systems Integration	Products and Systems Integration	$	92	$	108	Products and Systems Integration	$	77	$	92
Software and Services	Software and Services	167		121		Software and Services	221		167
Operating earnings	Operating earnings	259		229		Operating earnings	298		259
Total other expense	Total other expense	(35)		(44)		Total other expense	(9)		(35)
Earnings before income taxes	Earnings before income taxes	$	224	$	185	Earnings before income taxes	$	289	$	224

14. Reorganization of Business

2021 Charges

During the three months ended April 3, 2021, the Company recorded net reorganization of business charges of $16 million including $14 million of charges in Other charges and $2 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $16 million were charges of $18 million related to employee separation, partially offset by $2 million of reversals for accruals no longer needed.

The following table displays the net charges incurred by segment:


	Three Months Ended
	April 3, 2021
Products and Systems Integration	$	12
Software and Services	4
	$	16

Reorganization of Businesses Accruals


January 1, 2021		Additional Charges		Adjustments		Amount Used		April 3, 2021
$	79	$	18	$	(2)	$	(37)	$	58

Employee Separation Costs

At January 1, 2021, the Company had an accrual of $79 million for employee separation costs. The 2021 additional charges of $18 million represent severance costs for approximately 200 employees. The adjustment of $2 million reflects reversals for accruals no longer needed. The $37 million used reflects cash payments to severed employees. The remaining accrual of $58 million, which is included in Accrued liabilities in the Company’s Condensed Consolidated Balance Sheets at April 3, 2021, is expected to be paid, primarily within one year, to approximately 1,000 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments.

2020 Charges

During the three months ended March 28, 2020, the Company recorded net reorganization of business charges of $18 million including $12 million of charges in Other charges and $6 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $18 million were charges of $22 million related to employee separation, partially offset by $4 million of reversals for accruals no longer needed.

The following table displays the net charges incurred by segment:


~~March 28, 2020~~	Three Months Ended
	March 28, 2020
Products and Systems Integration	$	14
Software and Services	4
	$	18

~~The following table displays a rollforward of the reorganization of business accruals established for employee separation costs from January 1, 2020 to March 28, 2020:~~

January 1, 2020 Additional
Charges Adjustments Amount
Used March 28, 2020
Employee separation costs $ 78 $ 22 $ (4) $ (22) $ 74

~~Employee Separation Costs~~

At January 1, 2020, the Company had an accrual of $78 million for employee separation costs. The 2020 additional charges of $22 million represent severance costs for approximately 300 employees. The adjustment of $4 million reflects reversals for accruals no longer needed. The $22 million used reflects cash payments to severed employees. The remaining accrual of $74 million, which is included in Accrued liabilities in the Company’s Condensed Consolidated Balance Sheets at March 28, 2020, is expected to be paid, primarily within one year, to approximately 900 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments.

~~2019 Charges~~

During the three months ended March 30, 2019, the Company recorded net reorganization of business charges of $8 million including $4 million of charges in Other charges and $4 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $8 million were charges of $12 million related to employee separation costs and $4 million of reversals for accruals no longer needed.

~~The following table displays the net charges incurred by segment:~~


~~March 30, 2019~~	~~Three Months Ended~~
~~Products and Systems Integration~~	$	7
~~Software and Services~~	1
	$	8

15. Intangible Assets and Goodwill

On August 28, 2020, the Company acquired 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 Motorola Solutions’ existing Command Center Software suite critical mobile technology capabilities that enable information to flow seamlessly from the field to the command center. The Company recognized $38 million of goodwill, $31 million of identifiable intangible assets, and $8 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $27 million of customer relationships and $4 million of developed technology that will be amortized over a period of fourteen and seven years, respectively. The business is part of the Software and Services segment. The purchase accounting was completed as of the first quarter of 2021.

On July 31, 2020, the Company acquired 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 Motorola Solutions’ continued investment in Video Security and Analytics, adding a broad range of products that can be used in a variety of commercial and industrial environments and use cases. The Company recognized $41 million of goodwill, $30 million of identifiable intangible assets, and $36 million of net assets. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $23 million of customer relationships, $4 million of developed technology, and $3 million of trade names that will be amortized over a period of fifteen, two, and five years, respectively. The business is a part of both the

Products and Systems Integration segment and the Software and Services segment. The purchase accounting is not yet complete and as such the final allocation between income tax accounts and goodwill may be subject to change.

On June 16, 2020, the Company acquired 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 Analytics technology, providing enhanced geographical reach across a wider customer base. The Company recognized $14 million of goodwill, $22 million of identifiable intangible assets, and $1 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible asset was classified as $22 million of customer relationships that will be amortized over a period of eleven years. The business is a part of both the Products and Systems Integration and Software and Services segments. The purchase accounting is not yet complete and as such the final allocation between income tax accounts and goodwill may be subject to change.

On April 30, 2020, the Company acquired a cybersecurity services business for a purchase price of $32 million of cash, net of cash acquired. The Company recognized $23 million of goodwill, $10 million of identifiable intangible assets and $1 million of net liabilities. The goodwill is deductible for tax purposes. The identifiable intangible assets were classified as $8 million of customer relationships and $2 million of developed technology that will be amortized over a period of twelve years and three years, respectively. 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. The purchase accounting was completed as of the first quarter of 2021.

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 ~~company~~Company recognized ~~$27~~$28 million of goodwill, $7 million of intangible assets and $1$2 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible asset was classified as a customer relationship that will be amortized over a period of thirteen years. 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. The purchase accounting is not yet complete and as such the final allocation between income tax accounts, intangible assets, goodwill and net liabilities may be subject to change based on the finalization of assumptions and settlement of working capital considerations.

On October 16, 2019, the Company acquired a data solutions business for vehicle location information for a purchase price of $85 million in cash, net of cash acquired. The acquisition enhances the Company's video security platform by adding data to the Company’s existing LPR database within the Software and Services segment. The Company recognized $54 million of goodwill, $28 million of identifiable intangible assets, and $3 million of net assets. The goodwill is deductible for tax purposes. The identifiable intangible assets were classified as $22 million of customer relationships and $6 million of developed technology and will be amortized over a period of sixteen years and five years, respectively. The purchase accounting is not yet complete and as such the final allocation between income tax accounts and goodwill may be subject to change.

On July 11, 2019, the Company acquired WatchGuard, Inc. ("WatchGuard"), a provider of in-car and body-worn video solutions for $271 million, inclusive of share-based compensation withheld at a fair value of $16 million that will be expensed over an average service period of two years. The acquisition was settled with $250 million, net of cash acquired. The acquisition expands the Company's video security solutions platform. The business will be part of both the Products and Systems Integration and Software and Services segments. The Company recognized $156 million of goodwill, $63 million of identifiable intangible assets, and $31 million of net assets. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $33 million of customer relationships and $30 million of completed technology that will be amortized over a period of thirteen years and seven years, respectively. The purchase accounting is not yet complete and as such the final allocation between income tax accounts and goodwill may be subject to change.

On March 11, 2019, the Company announced that it acquired Avtec, Inc. ("Avtec"), a provider of dispatch communication equipment for U.S. public safety and commercial customers for a purchase price of $136 million in cash, net of cash acquired. This acquisition expands the Company's commercial portfolio with new capabilities, allowing it to offer an enhanced platform for customers to communicate, coordinate resources, and secure their facilities. The business will be part of both the Products and Systems Integration and Software and Services segments. The Company recognized $68 million of goodwill, $64 million of identifiable intangible assets, and $4 million of net assets. The goodwill is deductible for tax purposes. The identifiable intangible assets were classified as $43 million of completed technology and $21 million of customer relationship intangibles and will be amortized over a period of 15 years. The purchase accounting was completed as of the third quarter of 2019.

On ~~January 7, 2019, the Company announced that it acquired VaaS International Holdings~~ ("VaaS"), a company that is a global provider of data and image analytics for vehicle location for $445 million, inclusive of share-based compensation withheld at a fair value of $38 million that will be expensed over an average service period of one year. The acquisition was settled with $231 million of cash, net of cash acquired, and 1.4 million of shares issued at a fair value of $160 million for a purchase price of $391 million to be utilized in the purchase price allocation. The business will be part of both the Products and Systems Integration and Software and Services segments. The Company recognized $261 million of goodwill, $141 million of identifiable intangible assets, and $11 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $99 million of completed technology that will be amortized over a period of ten years and $42 million of customer relationship intangibles that will be amortized over a period of 15 years. The purchase accounting was completed as of the first quarter of ~~2020.~~

2021.

Intangible Assets

Amortized intangible assets were comprised of the following:


		March 28, 2020						December 31, 2019							April 3, 2021				December 31, 2020
		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Completed technology	Completed technology	$	736	$	162	$	738	$	148	Completed technology	$	766	$	229	$	766	$	210
Patents	Patents	2		2		2		2		Patents	2		2		2		2
Customer-related	Customer-related	1,144		505		1,222		518		Customer-related	1,350		734		1,335		685
Other intangibles	Other intangibles	72		43		75		42		Other intangibles	79		52		78		50
		$	1,954	$	712	$	2,037	$	710		$	2,197	$	1,017	$	2,181	$	947

Amortization expense on intangible assets was $58 million for the three months ended April 3, 2021. Amortization expense on intangible assets was $53 million for the three months ended March 28, ~~2020 and $50 million for the three months ended March 30, 2019.~~2020. As of ~~March 28, 2020,~~April 3, 2021, annual amortization expense is estimated to be ~~$202~~$209 million in ~~2020, $198~~2021, $206 million ~~2021, $195 million in~~ 2022, ~~$105~~$108 million in 2023, ~~$82~~$83 million in 2024, ~~and $72~~$73 million in ~~2025.~~2025, and $69 million in 2026.

Amortized intangible assets were comprised of the following by segment:


		March 28, 2020						December 31, 2019							April 3, 2021				December 31, 2020
		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Products and Systems Integration	Products and Systems Integration	$	652	$	94	$	652	$	82	Products and Systems Integration	$	694	$	142	$	692	$	129
Software and Services	Software and Services	1,302		618		1,385		628		Software and Services	1,503		875		1,489		818
		$	1,954	$	712	$	2,037	$	710		$	2,197	$	1,017	$	2,181	$	947

Goodwill

The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, ~~2020~~2021 to ~~March 28, 2020:~~April 3, 2021:

Products and Systems Integration Software and Services Total
Balance as of January 1, 2020 $ 973 $ 1,094 $ 2,067
Goodwill acquired — 27 27
Foreign currency — (19) (19)
Balance as of March 28, 2020 $ 973 $ 1,102 $ 2,075


	Products and Systems Integration		Software and Services		Total
Balance as of January 1, 2021	$	1,019	$	1,200	$	2,219




Purchase accounting adjustments	(1)		(1)		(2)
Foreign currency	0		4		4
Balance as of April 3, 2021	$	1,018	$	1,203	$	2,221

2223

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This commentary should be read in conjunction with the condensed consolidated financial statements and related notes thereto of Motorola Solutions, Inc. (“Motorola Solutions” or the “Company,” “we,” “our,” or “us”) for the three months ended April 3, 2021 and March 28, 2020, ~~and March 30, 2019,~~ as well as our consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020 (the "Form 10-K").

Forward-Looking Statements

Statements in this Form 10-Q which are not historical in nature are 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,” “aims,” “estimates” and similar expressions. 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. 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 Form 10-Q. Some of these risks and uncertainties include, but are not limited to, those discussed in Part I, Item 1A “Risk Factors” of the Form 10-K and those described elsewhere in our other SEC filings. Forward-looking statements include, but are not limited to, statements included in: (1) “Management's Discussion and Analysis of Financial Condition and Results of Operations,” about: (a) the continuing and future impact of COVID-19 on our business; (b) the impact of the American Rescue Plan Act of 2021 on our business; (c) the impact of global economic and political conditions on our business; (d) the impact of acquisitions on our business; (e) market growth/contraction, demand, spending and resulting opportunities; (f) our continued ability to reduce our operating expenses; (g) the growth of sales opportunities in our Products and Systems Integration and Software and Services segments; (h) the success of our business strategy and portfolio; (i) future payments, charges, use of accruals and expected cost-saving benefits associated with our reorganization of business programs and employee separation costs; (j) our ability and cost to repatriate funds; (k) the liquidity of our investments; (l) our ability to settle the principal amount of the Senior Convertible Notes (as defined below) in cash; (m) our ability and cost to access the capital markets at our current ratings; (n) our ability to borrow and the amount available under our credit facilities; (o) the return of capital to shareholders through dividends and/or repurchasing shares; and (p) the adequacy of internal resources to fund expected working capital and capital expenditure requirements; (2) the impact of recent accounting pronouncements issued by the Financial Accounting Standards Board on our financial statements; (3) “Quantitative and Qualitative Disclosures about Market Risk,” about the impact of interest rate risks and foreign currency exchange risks; and (4) “Legal Proceedings,” about the outcome and effect of pending legal matters. Motorola Solutions undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except as legally required.

Executive Overview

Business Overview

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 our reporting segments. Accordingly, the Company now reports net sales in the following three major products and services (which we refer to as “technologies” in this Quarterly Report on Form 10-Q): Land Mobile Radio Mission Critical Communication (“LMR” or “LMR Mission Critical Communications”), Video Security and Analytics and Command Center Software.

•Command Center Software: Software suite that enables collaboration and seamless information sharing through the public safety workflow from 911 call to case closure.

First Quarter Financial Results

•Net sales were $1.8 billion in the first quarter of 2021 compared to $1.7 billion ~~for both of~~in the first ~~quarters~~quarter of ~~2020 and 2019.~~2020.

•Operating earnings were $298 million in the first quarter of 2021 compared to $259 million in the first quarter of ~~2020 compared to $229 million in the first quarter of 2019.~~2020.

•Net earnings attributable to Motorola Solutions, Inc. were $244 million, or $1.41 per diluted common share, in the first quarter of 2021, compared to $197 million, or $1.12 per diluted common share, in the first quarter of ~~2020, compared~~2020.

•Operating cash flow increased $62 million to ~~$151~~$370 million ~~or $0.86 per diluted common share,~~ in the first quarter of ~~2019.~~

•~~Our operating cash flow increased $57 million~~2021 compared to $308 million in the first quarter of ~~2020 compared to the first quarter of 2019.~~2020.

•We repurchased ~~$253~~$170 million of common stock and paid ~~$109~~$121 million in dividends in the first quarter of ~~2020.~~2021.

~~Recent Developments~~COVID-19

In ~~March 2020,~~response to the COVID-19 ~~outbreak was declared a~~ pandemic, ~~by the World Health Organization (“WHO”). In response,~~ there have been a broad number of governmental and commercial actions taken to limit the spread of the virus, including social distancing measures, stay-at-home orders, travel restrictions, business shutdowns and ~~slowdowns in an effort~~slowdowns. We continue to ~~limit the spread of coronavirus. These events have resulted in a significant decline in global economic activity,~~adhere to applicable governmental and ~~accordingly, we have assessed~~commercial restrictions and to assess the impact on our employees, customers, communities, liquidity and financial position.

We ~~have implemented~~continue to abide by a number of measures in an effort to protect the health and well-being of our employees and customers, including having office workers work remotely, ~~suspending~~reducing employee travel, withdrawing from certain industry events, ~~increased~~increasing the frequency of cleaning services, encouraging face coverings, and using thermal scanning. ~~Additionally, we~~We have ~~ensured~~continued to ensure customer continuity by fulfilling several emergency orders, completing remote software maintenance where possible, and ~~visitation by field workers~~continuing to ~~customer sites to keep~~service our mission-critical networks ~~operating.~~on-site as needed to ensure seamless operations. Our sales teams have also continued to improve virtual engagement with our customers. Additionally, our engineering teams have adapted our solutions offerings to equip our customers with the latest technology in an effort to protect their workplaces from the spread of COVID-19. Specifically, in Video Security and Analytics, we have adapted our software and hardware offerings to provide analytics addressing occupancy counting, face mask detection, and thermal detection capabilities.

We ~~recognize the effects~~believe our existing balances of ~~the virus on first responders and front-line health care professionals and their families during this time. In response, our charitable foundation has committed $1 million in~~ cash and ~~in-kind donations~~cash equivalents, along with other short-term liquidity arrangements, will continue to be sufficient to satisfy our liquidity requirements associated with our existing operations. We were in ~~support of these groups. We have also reprioritized our foundation funding to support COVID-19 relief efforts~~compliance with all applicable covenants in the ~~communities in which we work and serve.~~

We also assessed the adequacy of our liquidity. We believe the steps we have taken, over the past few years and months, have strengthened our ability to operate under the current conditions. These include the proactive withdrawal in March 2020 of $800 million from our2021 unsecured revolving credit facility as ~~a precaution and to provide additional flexibility during the disruption in the financial markets. This leaves $1.4 billion~~ of ~~capacity on the committed facility.~~April 3, 2021. Additionally, we have no bond maturities until ~~2022.~~2023. We continue to assess our operating expenses and identify cost reducing initiatives, including lower travel costs, contractor spend and reducing our real estate footprint. In addition, our supply chain partners have been supportive and continue to work to fulfill the necessary service levels to the Company and its customers.

~~We evaluated~~Although the COVID-19 pandemic continued to influence our ~~financial position during this economic slowdown.~~activities in the first quarter of 2021, as described above, the negative impacts on our business from COVID-19 have begun to ease. Specifically, in our Software and Services segment, with the largely recurring nature of the business and our strong backlog position, we continue to expect that the ~~impact should~~impacts on net sales and operating margin will be ~~somewhat limited. In our Products and Systems Integration segment, the impact is likely to be more significant with the largest impact occurring during the second quarter. Reduced demand, particularly~~limited in our professional commercial radio business (“PCR”), as well as delays in engagements with our state and local customers in the near term, will most likely lead to year-over-year sales declines for the segment in 2020, as compared to 2019.2021. Within the Products and Systems Integration segment, we are encouraged by strong LMR backlog, and the resiliency of the ~~video security Device~~Video Security and Analytics technology that experienced growth in the first quarter of 2021 and which we expect to continue to grow for the remainder of 2021. In addition, in March 2021, the President of the United States signed into law the American Rescue Plan Act of 2021 (the "ARPA"), which is intended to provide economic stimulus, specifically additional funding to state and local governments, education and healthcare, as well as other funding relief provisions, in order to address the impact of the COVID-19 pandemic. We continue to evaluate the potential impact of the ARPA on our business and ~~expect growth for fiscal year 2020. We have also taken actions in a number~~results of areas to reduce our operating expenses, mostly driven by lower variable compensation, travel costs, contractor spend and reduced real estate footprint to limit the negative effect on operating margins for the year despite the expected reduction of revenue.operations.

Lastly, we evaluated whether there were any impairment indicators ~~in the first quarter,~~as of April 3, 2021, which included a review of our receivables and contract assets, inventory, right-of-use lease assets, long-lived assets, investments, goodwill and intangible assets. ~~We concluded that as~~As of the end of the first quarter of ~~2020,~~2021, we concluded our assets were fairly stated and recoverable.

~~For additional discussion of risks related to the COVID-19 pandemic, please refer to “Item 1A. Risk Factors.”~~

~~Recent Acquisitions~~

On March 17, 2020, we announced the proposed acquisition of IndigoVision Group plc ("IndigoVision") for a purchase price of approximately $37 million in cash. The proposed acquisition complements our video security and analytics portfolio, providing

2325

enhanced geographical reach across a wider customer base. The proposed acquisition is subject to customary closing conditions for a UK public transaction and is currently expected to close in the second quarter of 2020.Recent Acquisitions

On March 3, 2020, we 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 our 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.

On October 16, 2019, we acquired a data solutions business for vehicle location information for a purchase price of $85 million, net of cash acquired. The acquisition enhances our video security platform by adding data to our existing license plate recognition (“LPR”) database within our Software and Services segment.

On July 11, 2019, we acquired WatchGuard, Inc. ("WatchGuard"), a provider of in-car and body-worn video solutions for $271 million, inclusive of share-based compensation withheld at a fair value of $16 million that will be expensed over an average service period of two years. The acquisition was settled with $250 million of cash, net of cash acquired. The acquisition expands our video security platform within both the Product and Systems Integration segment and the Software and Services segment.

On March 11, 2019, we acquired Avtec, Inc. ("Avtec"), a provider of dispatch communications for U.S. public safety and commercial customers for a purchase price of $136 million in cash, net of cash acquired. This acquisition expands our commercial portfolio with new capabilities, allowing us to offer an enhanced platform for customers to communicate, coordinate resources and secure their facilities. The business is part of both the Product and Systems Integration segment and the Software and Services segment.

On January 7, 2019, we announced that we acquired VaaS International Holdings ("VaaS"), a company that is a global provider of data and image analytics for vehicle location for $445 million, inclusive of share-based compensation withheld at a fair value of $38 million that will be expensed over an average service period of one year. The acquisition was settled with $231 million of cash, net of cash acquired, and 1.4 million of shares issued at a fair value of $160 million for a purchase price of $391 million. This acquisition expands our video security platform within both the Product and Systems Integration segment and the Software and Services segment.

~~Change in Presentation~~

During the first quarter of 2020, we restructured our operations to realize more operational efficiencies, combining EMEA, AP and LA into one region which is now reflected as "International." Accordingly, we now report net sales in the following two geographic regions: North America, which includes the United States and Canada, and International. We have updated all periods presented to reflect this change in presentation.

~~Geographic market sales measured by the locale of the end customer as a percent of total net sales are as follows:~~

Three Months Ended Year Ended December 31
March 28, 2020 March 30, 2019 2019 2018 2017
North America 67 % 65 % 67 % 64 % 62 %
International 33 % 35 % 33 % 36 % 38 %

Technology

Segment

Acquisition

Description

Purchase Price

Date of Acquisition

Command Center Software

Software and Services

Callyo

Provider of cloud-based mobile applications for law enforcement in North America, including critical mobile technological capabilities that enable information to flow seamlessly from the field to the command center.

$63 million, inclusive of share-based compensation of $3 million

August 28, 2020

Video Security and Analytics

Products and Systems Integration

Software and Services

Pelco, Inc.

Global provider of video security solutions, adding a broad range of products for a variety of commercial and industrial environments and use cases.

$110 million

July 31, 2020

Video Security and Analytics

Products and Systems Integration

Software and Services

IndigoVision Group plc

Provider of video security solutions to enhance geographical reach across a wider customer base.

$37 million

June 16, 2020

LMR

Software and Services

Unnamed cybersecurity services business

Provider of vulnerability assessments, cybersecurity consulting, and managed services, including security monitoring of network operations.

$32 million

April 30, 2020

LMR

Software and Services

Unnamed cybersecurity services business

Provider of vulnerability assessments, cybersecurity consulting, managed services, and remediation and response capabilities.

$40 million, inclusive of share-based compensation of $6 million

March 3, 2020

~~Segment Financial Highlights~~

~~A summary of our segment results for the first quarter of 2020 is as follows:~~

•In the Products and Systems Integration segment, net sales were $993 million in the first quarter of 2020, a decrease of $76 million, or 7%, compared to $1.1 billion in the first quarter of 2019. On a geographic basis, net sales decreased in both the North America and International regions compared to the year-ago quarter primarily driven by our PCR Devices sales. Operating earnings were $92 million in the first quarter of 2020, compared to $108 million in the first quarter of 2019. Operating earnings decreased in 2020 to 9.3% from 10.1% in 2019 primarily driven by lower sales, gross margin, and higher operating expenses primarily driven by i) $15 million of additional Hytera-related legal expenses, ii) $7 million higher share-based compensation expenses, iii) $7 million higher reorganization of business charges and iv) higher operating expenses from acquisitions, and partially offset by a $50 million gain from the sale of a manufacturing facility in Europe.

•In the Software and Services segment, net sales were $662 million in the first quarter of 2020, an increase of $74 million, or 13%, compared to net sales of $588 million in the first quarter of 2019. On a geographic basis, net sales increased in both the North America and International regions compared to the year-ago quarter. Operating earnings were $167 million in the first quarter of 2020, compared to $121 million in the first quarter of 2019. Operating earnings increased in 2020 to 25.2% from 20.6% in 2019 driven by higher sales and gross margin expansion, and partially offset by higher operating expenses driven by i) $4 million of higher share-based compensation expenses, ii) $3 million of higher reorganization of business charges and iii) $2 million of higher intangible amortization driven by acquisitions.

2426

Results of Operations


		Three Months Ended															Three Months Ended
(Dollars in millions, except per share amounts)	(Dollars in millions, except per share amounts)	March 28, 2020		% of Sales*		March 30, 2019		% of Sales*		(Dollars in millions, except per share amounts)	April 3, 2021		% of Sales*		March 28, 2020		% of Sales*
Net sales from products	Net sales from products	$	884			$	945			Net sales from products	$	926			$	884
Net sales from services	Net sales from services	771				712				Net sales from services	847				771
Net sales	Net sales	1,655				1,657				Net sales	1,773				1,655
Costs of products sales	Costs of products sales	397		44.9	%	444		47.0	%	Costs of products sales	438		47.3	%	397		44.9	%
Costs of services sales	Costs of services sales	471		61.1	%	440		61.8	%	Costs of services sales	475		56.1	%	471		61.1	%
Costs of sales	Costs of sales	868				884				Costs of sales	913				868
Gross margin	Gross margin	787		47.6	%	773		46.7	%	Gross margin	860		48.5	%	787		47.6	%
Selling, general and administrative expenses	Selling, general and administrative expenses	341		20.6	%	327		19.7	%	Selling, general and administrative expenses	303		17.1	%	341		20.6	%
Research and development expenditures	Research and development expenditures	168		10.2	%	162		9.8	%	Research and development expenditures	180		10.2	%	168		10.2	%
Other charges	Other charges	19		1.1	%	55		3.3	%	Other charges	79		4.5	%	19		1.1	%
Operating earnings	Operating earnings	259		15.6	%	229		13.8	%	Operating earnings	298		16.8	%	259		15.6	%
Other income (expense):	Other income (expense):									Other income (expense):
Interest expense, net	Interest expense, net	(52)		(3.1)	%	(55)		(3.3)	%	Interest expense, net	(54)		(3.0)	%	(52)		(3.1)	%
Gains on sales of investments and businesses, net		—		—	%	1		—	%

Other, net	Other, net	17		1.0	%	(10)		(0.6)	%	Other, net	45		2.5	%	17		1.0	%
Total other expense	Total other expense	(35)		(2.1)	%	(44)		(2.7)	%	Total other expense	(9)		(0.5)	%	(35)		(2.1)	%
Net earnings before income taxes	Net earnings before income taxes	224		13.5	%	185		11.2	%	Net earnings before income taxes	289		16.3	%	224		13.5	%
Income tax expense	Income tax expense	26		1.6	%	33		2.0	%	Income tax expense	44		2.5	%	26		1.6	%
Net earnings	Net earnings	198		12.0	%	152		9.2	%	Net earnings	245		13.8	%	198		12.0	%
Less: Earnings attributable to non-controlling interests	Less: Earnings attributable to non-controlling interests	1		0.1	%	1		—	%	Less: Earnings attributable to non-controlling interests	1		0.1	%	1		0.1	%

Net earnings attributable to Motorola Solutions, Inc.	Net earnings attributable to Motorola Solutions, Inc.	$	197	11.9	%	$	151	9.1	%	Net earnings attributable to Motorola Solutions, Inc.	$	244	13.8	%	$	197	11.9	%

Earnings per diluted common share	Earnings per diluted common share	$	1.12			$	0.86			Earnings per diluted common share	$	1.41			$	1.12

* Percentages may not add due to rounding

2527

Results of Operations—Three months ended ~~March 28, 2020~~April 3, 2021 compared to three months ended March ~~30, 2019~~28, 2020

The results of operations for the first quarter of ~~2020~~2021 are not necessarily indicative of the operating results to be expected for the full year. Historically, we have experienced higher revenues in the fourth quarter as compared to the rest of the quarters of our fiscal year as a result of the purchasing patterns of our customers.

We use the following U.S. GAAP key financial performance measures to manage our business on a consolidated basis and by reporting segment, and to monitor and assess our results of operations:

•Net sales—a measure of our revenue for the current period.

•Operating earnings—a measure of our earnings from operations, before non-operating expenses and income taxes.

•Operating margins—a measure of our operating earnings as a percentage of total net sales.

Considered together, we believe these measures are strong indicators of our overall performance and our ability to create shareholder value. A discussion of our results of operations and financial condition follows.


	Three Months Ended
	April 3, 2021									March 28, 2020
(In millions)	Products and Systems Integration			Software and Services			Total			Products and Systems Integration			Software and Services			Total
Net sales by region
North America	$	742		$	443		$	1,185		$	748		$	368		$	1,116
International	273			315			588			245			294			539
	$	1,015		$	758		$	1,773		$	993		$	662		$	1,655
Net sales by technology
LMR	$	850		$	551		$	1,401		$	860		$	490		$	1,350
Video Security and Analytics	165			88			253			133			67			200
Command Center Software	—			119			119			—			105			105
Total	$	1,015		$	758		$	1,773		$	993		$	662		$	1,655

Operating earnings	$	77		$	221		$	298		$	92		$	167		$	259



Operating margins	7.6		%	29.2		%	16.8		%	9.3		%	25.2		%	15.6		%

Net Sales

Three Months Ended
(In millions) March 28, 2020 March 30, 2019 % Change
Net sales from Products and Systems Integration $ 993 $ 1,069 (7) %
Net sales from Software and Services 662 588 13 %
Net sales $ 1,655 $ 1,657 — %

The Products and Systems Integration segment’s net sales represented ~~60%~~57% of our ~~consolidated~~ net sales in the first quarter of ~~2020~~2021 and ~~65%~~60% in the first quarter of ~~2019.~~2020. The Software and Services segment’s net sales represented ~~40%~~43% of our ~~consolidated~~ net sales in the first quarter of ~~2020~~2021 and ~~35%~~40% in the first quarter of ~~2019.~~2020.

Net sales ~~were flat~~increased $118 million, or 7%, in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020. The ~~7% decline~~$22 million, or 2%, increase in net sales within the Products and Systems Integration segment was driven by ~~a 22% decline~~an 11% increase in the International region ~~and~~partially offset by a 1% ~~decline~~decrease in the North America region. The ~~13%~~$96 million, or 15%, increase in net sales within the Software and Services segment was driven by a ~~15%~~21% increase in the North America region and a ~~10%~~7% increase in the International region. Net sales includes:

•~~a decline~~an increase in the Products and ~~System~~Systems Integration segment, inclusive of ~~acquisitions, driven by a decline in PCR Devices, a subset of our Devices portfolio, and partially offset by growth in Video Devices; and~~

•~~$7 million from unfavorable currency rates;~~

•~~partially offset by $48~~$35 million of revenue from ~~acquisitions; and~~

•~~growth in Software and Services~~acquisitions, driven by ~~maintenance~~an increase in Video Security and ~~managed services,~~Analytics and ~~video security and command center software.~~PCR, partially offset by a decrease in public safety LMR;

~~Regional results include:~~

•an increase ~~in the North America region of 4% driven by growth~~ in the Software and Services segment, inclusive of $13 million of revenue from ~~acquisitions;~~acquisitions, driven by an increase in LMR services, Video Security and Analytics, and Command Center Software; and

•$32 million from favorable currency rates.

Regional results include:

•a 6% increase in the North America region, inclusive of revenue from acquisitions, driven by an increase in LMR services, Video Security and Analytics, PCR and Command Center Software, partially offset by a decline in public safety LMR products, which were impacted by supply constraints; and

•a 9% increase in the International region, inclusive of 7%revenue from acquisitions, primarily driven ~~primarily~~ by ~~a decline~~an increase in ~~sales in our PCR Devices.~~Video Security and Analytics and public safety LMR.

Products and Systems Integration

The ~~7% decrease~~2% increase in the Products and Systems Integration segment was driven by the following:

•~~10% decline~~$32 million, or 24% growth in ~~Devices~~Video Security and Analytics, inclusive of revenue ~~primarily~~from acquisitions, driven by ~~a decline in the demand of our PCR devices in~~ both the International and North America ~~regions, inclusive of revenue from acquisitions;~~regions;

•~~3% decline~~$10 million, or 1% decrease in ~~Systems and Systems Integration revenue;~~LMR, primarily impacted by supply constraints in North America public safety LMR, partially offset by an increase in PCR sales; and

•~~partially offset by $24~~$15 million ~~of revenue~~ from ~~acquisitions.~~favorable currency rates.

Software and Services

The ~~13%~~15% increase in the Software and Services segment was driven by the following:

•9%$61 million, or 12% growth in ~~Services,~~LMR services, inclusive of revenue from acquisitions, driven by ~~growth in our maintenance~~both the North America and ~~managed services revenue, inclusive of acquisitions;~~International regions;

•~~25%~~$21 million, or 31% growth in ~~Software, driven primarily by an increase in video security~~Video Security and ~~command center software sales,~~Analytics, inclusive of ~~acquisitions;~~revenue from acquisitions, driven by both the International and North America regions;

•$14 million, or 13% growth in Command Center Software, inclusive of revenue from acquisitions, driven by both the North America and International regions; and

•$2417 million ~~of revenue~~ from ~~acquisitions.~~favorable currency rates.

Gross Margin


		Three Months Ended											Three Months Ended
(In millions)	(In millions)	March 28, 2020		March 30, 2019		% Change		(In millions)	April 3, 2021		March 28, 2020		% Change
Gross margin	Gross margin	$	787	$	773	2	%	Gross margin	$	860	$	787	9	%

Gross margin was ~~47.6%~~48.5% of net sales in the first quarter of ~~2020~~2021 compared to ~~46.7%~~47.6% in the first quarter of ~~2019.~~2020. The primary drivers of ~~the~~this increase ~~are as follows:~~

were:

•higher ~~margins~~gross margin within the Software and Services segment, inclusive of acquisitions, primarily driven by higher gross margin ~~expansion within the Services~~contribution from sales growth and ~~Software businesses and the increased~~improved mix of ~~Software to the total segment, inclusive of acquisitions;~~service offerings; and

•~~partially offset by lower~~higher gross margin ~~contribution~~ in the Products and Systems Integration segment, inclusive of acquisitions, as a result of ~~the decline in Devices sales, inclusive of acquisitions.~~

LMR project mix within North America.

Selling, General and Administrative Expenses


		Three Months Ended											Three Months Ended
(In millions)	(In millions)	March 28, 2020		March 30, 2019		% Change		(In millions)	April 3, 2021		March 28, 2020		% Change
Selling, general and administrative expenses	Selling, general and administrative expenses	$	341	$	327	4	%	Selling, general and administrative expenses	$	303	$	341	(11)	%

SG&A expenses ~~increased 4%~~decreased 11% in the first quarter of 2021 compared to the first quarter of ~~2019.~~2020. SG&A expenses were ~~20.6% of net sales compared to 19.7%~~17.1% of net sales in the first quarter of ~~2019. The increase in SG&A expenditures is primarily due to $25 million in Hytera-related legal expenses incurred during the first quarter of 2020~~2021 compared to ~~$10 million in the first quarter of 2019.~~

~~Research and Development Expenditures~~

Three Months Ended
(In millions) March 28, 2020 March 30, 2019 % Change
Research and development expenditures $ 168 $ 162 4 %

~~R&D expenditures increased 4% primarily due to increased expenses associated with acquired businesses. R&D expenditures were 10.2% of net sales compared to 9.8%~~20.6% of net sales in the first quarter of ~~2019.~~2020. The decrease in SG&A expenses was primarily due to reduced legal expenses, indirect expenses, travel expenses and share-based compensation expenses. The overall reduction in SG&A expenses was partially offset by higher expenses associated with acquired businesses and employee incentive costs.

Research and Development Expenditures


	Three Months Ended
(In millions)	April 3, 2021		March 28, 2020		% Change
Research and development expenditures	$	180	$	168	7	%

R&D expenditures increased 7% in the first quarter of 2021 compared to the first quarter of 2020 primarily due to higher expenses associated with acquired businesses and higher employee incentive costs. R&D expenditures remained flat at 10.2% of net sales in the first quarter of 2021 and the first quarter of 2020.

Other Charges


		Three Months Ended							Three Months Ended
(In millions)	(In millions)	March 28, 2020		March 30, 2019		(In millions)	April 3, 2021		March 28, 2020
Other charges	Other charges	$	19	$	55	Other charges	$	79	$	19

Other charges ~~decreased~~increased by ~~$36~~$60 million in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020. The change iswas driven primarily by the following:

•$50 million gain on the sale of property, plant and equipment in the first quarter of 2020 that did not recur in the first quarter of 2021; and

•$7 million of operating lease asset impairments in the first quarter of 2021.

Operating Earnings


	Three Months Ended
(In millions)	April 3, 2021		March 28, 2020
Operating earnings from Products and Systems Integration	$	77	$	92
Operating earnings from Software and Services	221		167
Operating earnings	$	298	$	259

Operating earnings increased $39 million, or 15%, compared to the first quarter of 2020. The increase in Operating earnings was due to:

•Software and Services increased by $54 million, driven by higher sales and gross margin contribution due to improved mix of service offerings, as well as improved operating leverage; and

•partially offset by a decline of $15 million in Products and Systems Integration, primarily driven by a $50 million gain on the sale of property, plant and equipment in the first quarter of 2020 that did not recur in the first quarter of 2021, as well as higher incentive costs, partially offset by lower legal expenses, indirect spend and travel expenses.

Interest Expense, net


	Three Months Ended
(In millions)	April 3, 2021		March 28, 2020
Interest expense, net	$	(54)	$	(52)

The increase in interest expense, net in the first quarter of 2021 compared to the first quarter of 2020 was a result of lower interest income earned on cash due to lower interest rates for the period ending April 3, 2021 compared to the period ending March 28, 2020.

Other, net


	Three Months Ended
(In millions)	April 3, 2021		March 28, 2020
Other, net	$	45	$	17

The increase in Other, net in the first quarter of 2021 compared to the first quarter of 2020 was driven primarily by:

•$30 million of net periodic pension and postretirement benefit in the first quarter of 2021 compared to $20 million of net periodic pension and postretirement benefit in the first quarter of 2020;

•$8 million loss on derivatives in the first quarter of 2021 compared to a $16 million loss on derivatives in the first quarter of 2020;

•$5 million of gains related to fair value adjustments to equity investments in the first quarter of 2021 compared to $1 million of gains related to fair value adjustments to equity investments in the first quarter of 2020; and

•partially offset by ~~$12~~$14 million of ~~net reorganization business charges~~foreign currency gains in the first quarter of ~~2020~~2021 compared to $4$18 million of foreign currency gains in the first quarter of 2020;

Effective Tax Rate


	Three Months Ended
(In millions)	April 3, 2021		March 28, 2020
Income tax expense	$	44	$	26

Income tax expense increased by $18 million in the first quarter of ~~2019 (see further detail in “Reorganization of Businesses” section); and~~

•~~$53 million of intangible amortization in the first quarter of 2020 compared to $50 million in the first quarter of 2019.~~

Three Months Ended
(In millions) March 28, 2020 March 30, 2019
Operating earnings from Products and Systems Integration $ 92 $ 108
Operating earnings from Software and Services 167 121
Operating earnings $ 259 $ 229

~~Operating earnings were up $30 million, or 13%,~~2021 compared to the first quarter of ~~2019. The increase in Operating earnings was due to:~~

•Software and Services, which was up $46 million, primarily driven by higher sales and gross margin expansion, partially offset by higher operating expenses driven by: i) $4 million of higher share-based compensation expenses ii) $3 million of higher reorganization of business charges and iii) $2 million of higher intangible amortization driven by acquisitions; and

•Products and Systems Integration, which was down $16 million, driven by lower sales, gross margin and higher operating expenses primarily driven by: i) $15 million of additional Hytera-related legal expenses, ii) $7 million higher share-based compensation expenses, iii) $7 million higher reorganization of business charges and iv) higher operating expenses from acquisitions, and partially offset by a $50 million gain from the sale of a manufacturing facility in Europe.

~~Interest Expense, net~~

Three Months Ended
(In millions) March 28, 2020 March 30, 2019
Interest expense, net $ (52) $ (55)

~~The decrease in net interest expense in the first quarter of~~ 2020, ~~compared to the first quarter of 2019 was a result of less average debt outstanding as of and for the period ending March 28, 2020 as compared to the period ending March 30, 2019.~~

~~Other, net~~

Three Months Ended
(In millions) March 28, 2020 March 30, 2019
Other, net $ 17 $ 10

~~The increase in net Other income in the first quarter of 2020 as compared to the first quarter of 2019 was driven by $8 million of investment impairments in the first quarter of 2019.~~

~~Effective Tax Rate~~

Three Months Ended
(In millions) March 28, 2020 March 30, 2019
Income tax expense $ 26 $ 33

~~Income tax expense decreased by $7 million compared to the first quarter of 2019,~~ resulting in an effective tax rate of ~~12%~~15%. Our effective tax rate for the three months ended April 3, 2021 is higher than the effective tax rate for the three months ended March 28, 2020 ~~is lower than the effective tax rate for the three months ended March 30, 2019~~ of ~~18%~~12%, primarily due to ~~a higher excess~~lower tax benefits on share-based compensation.

Reorganization of Business

During the first quarter of 2021, we recorded net reorganization of business charges of $16 million including $14 million of charges recorded within Other charges and $2 million in Costs of sales in our Condensed Consolidated Statements of Operations. Included in the $16 million were charges of $18 million related to employee separation costs, partially offset by $2 million of reversals for accruals no longer needed.

During the first quarter of 2020, we recorded net reorganization of business charges of $18 million including $12 million of charges ~~recorded within~~in Other charges and $6 million of charges in Costs of sales in our Condensed Consolidated Statements of Operations. Included in the $18 million were charges of $22 million related to employee separation costs ~~partially offset by $4 million of reversals for accruals no longer needed.~~

During the first quarter of 2019, we recorded net reorganization of business charges of $8 million including $4 million of charges in Other charges and $4 million of charges in Costs of sales in our Condensed Consolidated Statements of Operations. Included in the $8 million were charges of $12 million related to employee separation costs and $4 million reversals for accruals no longer needed.

The following table displays the net charges incurred by ~~business~~ segment:


		Three Months Ended							Three Months Ended
		March 28, 2020		March 30, 2019			April 3, 2021		March 28, 2020
Products and Systems Integration	Products and Systems Integration	$	14	$	7	Products and Systems Integration	$	12	$	14
Software and Services	Software and Services	4		1		Software and Services	4		4
		$	18	$	8		$	16	$	18

Cash payments for employee severance in connection with the reorganization of business plans were $37 million in the first quarter of 2021 and $22 million in the first quarter of ~~2020 and $14 million in the first quarter of 2019.~~2020. The reorganization of business accrual at ~~March 28, 2020~~April 3, 2021 was ~~$74~~$58 million related to employee separation costs that are expected to be paid within one year.

Liquidity and Capital Resources


		Three Months Ended							Three Months Ended
		March 28, 2020		March 30, 2019			April 3, 2021		March 28, 2020
Cash flows provided by (used for):	Cash flows provided by (used for):					Cash flows provided by (used for):
Operating activities	Operating activities	$	308	$	251	Operating activities	$	370	$	308
Investing activities	Investing activities	(26)		(432)		Investing activities	(52)		(26)
Financing activities	Financing activities	439		(201)		Financing activities	(256)		439
Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	(50)		22		Effect of exchange rates on cash and cash equivalents	4		(50)
Increase (decrease) in cash and cash equivalents	Increase (decrease) in cash and cash equivalents	$	671	$	(360)	Increase (decrease) in cash and cash equivalents	$	66	$	671

Cash and Cash Equivalents

At ~~March 28, 2020, $1.2 billion~~April 3, 2021, $834 million of the ~~$1.7~~$1.3 billion cash and cash equivalents balance was held in the U.S. and ~~$459~~$486 million was held in other countries, with ~~$162~~$122 million held in the United Kingdom.

Operating Activities

The increase in ~~operating~~ cash flows provided by operating activities from the first quarter of ~~2019~~2020 to the first quarter of ~~2020~~2021 was driven primarily by ~~favorable working capital~~an increase in earnings as a result of ~~timing.~~increased sales volume and improved working capital, partially offset by higher income tax payments.

Investing Activities

The ~~decrease~~increase in ~~net~~ cash flows used byfor investing activities from the first quarter of ~~2019~~2020 to the first quarter of ~~2020~~2021 was primarily due to:

•
~~a $332 million decrease in acquisitions and investments, primarily driven by cash used for the purchases of VaaS and Avtec in the first quarter of 2019;~~

•~~a $18~~$56 million decrease ~~in capital expenditures in the first quarter of 2020 as compared to the first quarter of 2019 due to lower payments for the Airwave and ESN networks; and~~

•~~a $56 million increase~~ in the proceeds from the sale of property, plant and equipment driven by the sale of a European manufacturing facility in the first quarter of ~~2020.~~2020; and

•partially offset by $34 million decrease in cash used for acquisitions and investments.

Financing Activities

The increase in cash ~~provided by~~flows used for financing activities infrom the first quarter of 2020 as compared to the cash provided by financing activities in the first quarter of ~~2019~~2021 was primarily driven by (also see further discussion in "Debt," "Share Repurchase Program" and "Dividends" below):

•~~a $800~~$800 million ~~increase in debt due to~~of proceeds received from the draw on our syndicated, unsecured revolving credit facility during the first quarter of 2020;

•~~partially offset by a $108 million increase in share repurchases in the first quarter of 2020 as compared to the first quarter of 2019;~~

•a $40 million decrease in the cash received from the issuance of common stock due to the issuance of stock related to our employee stock purchase program taking place during the second quarter of 2020 compared to the first quarter of 2019; and

•~~a $16~~$12 million increase in the payment of dividends in the first quarter of ~~2020 as~~2021 compared to the first quarter of ~~2019.~~2020;

•$7 million related to the payment of revolving credit facility renewal fees in the first quarter of 2021;

•partially offset by an $83 million decrease in share repurchases in the first quarter of 2021 compared to the first quarter of 2020; and

•$40 million increase of net proceeds from the issuance of common stock in the first quarter of 2021 compared to the first quarter of 2020.

Sales of Receivables

The following table summarizes the proceeds received from sales of accounts receivable and long-term customer financing receivables for the three months ended April 3, 2021 and March 28, 2020:


	Three Months Ended
	April 3, 2021		March 28, 2020
Contract-specific discounting facility	$	71	$	44
Accounts receivable sales proceeds	—		24
Long-term receivables sales proceeds	54		41
Total proceeds from receivable sales	$	125	$	109

During the three months ended April 3, 2021, we utilized a contract-specific receivable discounting facility which began during the three months ended March 28, 2020, ~~and March 30, 2019:~~

Three Months Ended

March 28, 2020 March 30, 2019
Accounts receivable sales proceeds $ 68 $ 24
Long-term receivables sales proceeds 41 21
Total proceeds from sales of accounts receivable $ 109 $ 45

resulting in accounts receivable sales of $71 million. The net benefit to our operating cash flow from the utilization of the receivable discounting facility for the three months ended April 3, 2021 was $71 million, when adjusted for amounts that were collected under the commercial contract with the customer within the period in the absence of utilizing the discounting facility. The proceeds of our receivable sales are included in ~~"Operating activities"~~Operating activities within our Condensed Consolidated Statements of Cash Flows.

Debt

We had outstanding ~~long-term~~ debt of ~~$5.9~~$5.2 billion at both April 3, 2021 and ~~$5.1 billion,~~December 31, 2020, including the current portions of ~~$814~~$11 million and ~~$16~~$12 million at ~~March 28, 2020~~April 3, 2021 and December 31, ~~2019,~~2020, respectively.

~~We have~~On March 24, 2021, we entered into a $2.25 billion syndicated, unsecured revolving credit facility maturing in March 2026, which can be used for general corporate purposes and letters of credit (the "2021 Motorola Solutions Credit Agreement"). The 2021 Motorola Solutions Credit Agreement replaces our $2.2 billion syndicated, unsecured revolving credit facility scheduled to mature in April ~~2022 (the "2017~~2022. The 2021 Motorola Solutions Credit Agreement~~"). The~~ ~~2017 Motorola Solutions Credit Agreement~~ includes a ~~$500~~$450 million letter of credit ~~sub-limit with $450 million~~sublimit and fronting commitments of ~~fronting commitments.~~$450 million. Borrowings under the facility bear interest at the prime rate plus the applicable margin, or at a spread above ~~LIBOR,~~the London Interbank Offered Rate ("LIBOR"), at our option. ~~Following the turmoil~~The 2021 Motorola Solutions Credit Agreement includes provisions allowing us to replace LIBOR with a replacement benchmark rate in the ~~financial markets caused by~~future under certain conditions defined in the COVID-19 Pandemic, we borrowed $800 million under the facility to bolster our cash holdings out of precaution, of which, $800 million was outstanding as of March 28, 2020. The weighted average borrowing rate on outstanding amounts was 2.35%.agreement. An annual facility fee is payable on the undrawn amount of the credit line. The interest rate and facility fee are subject to adjustment if our credit rating changes. We must comply with certain customary covenants including a maximum leverage ratio, as defined in the ~~2017~~2021 Motorola Solutions Credit ~~Agreement~~.Agreement. We were in compliance with ~~our~~the financial covenants as of ~~March 28, 2020.~~April 3, 2021.

On September 5, 2019, we entered into an agreement with Silver Lake Partners to issue $1.0 billion of 1.75% senior convertible notes which mature in September 2024 ("~~New~~ Senior Convertible Notes"). Interest on these notes is payable semiannually. The notes are convertible anytime on or after two years from their issuance date, except in certain limited circumstances. The notes are convertible based on a conversion rate of 4.9140 per $1,000 principal amount (which is equal to an initial conversion price of $203.50 per share). In the event of conversion, we intend to settle the principal amount of the ~~New~~ Senior Convertible Notes in cash. We recorded a debt liability associated with the ~~New~~ Senior Convertible Notes by determining the fair value of an equivalent debt instrument without a conversion option. Using a discount rate of 2.45%, which was determined based on a review of relevant market data, we calculated the debt liability to be $986 million, indicating a $14 million discount to be

amortized over the expected life of the debt instrument. The remaining proceeds of $14 million were allocated to the conversion option and accordingly, increased Additional paid-in capital.

We have an unsecured commercial paper program, backed by the ~~revolving credit facility,~~2021 Motorola Solutions Credit Agreement, under which we may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $2.2 billion outstanding at any one time. Proceeds from the issuances of the notes are expected to be used for general corporate purposes. As of ~~March 28, 2020~~April 3, 2021 we had no outstanding debt under the commercial paper program.

We ~~continue to~~ believe that we ~~hold sufficient liquidity~~have adequate internal resources available to ~~cover~~fund expected working capital and capital expenditure requirements for the ~~day-to-day~~next twelve months as supported by the level of cash and cash equivalents in the U.S., the ability to repatriate funds from foreign jurisdictions, cash provided by operations, ~~of our business~~ as well as ~~any future volatility or uncertainty that may arise~~liquidity provided by our commercial paper program backed by the 2021 Motorola Solutions Credit Agreement. Refer also to “COVID-19” in this Part I, Item 3 of this Form 10-Q for a discussion of the ~~capital markets.~~impact of COVID-19 on our liquidity.

Share Repurchase Program

During the three months ended ~~March 28, 2020,~~April 3, 2021, we paid an aggregate of ~~$253~~$170 million, including transaction costs, to repurchase approximately ~~1.6~~1.0 million shares at an average price of ~~$162.85~~$175.53 per share. As of ~~March 28, 2020,~~April 3, 2021, the Company had used approximately ~~$13.0~~$13.5 billion of the share repurchase authority to repurchase shares, leaving ~~$1.0 billion~~$479 million of authority available for future repurchases. Subsequent to quarter end, the Board of Directors approved a $2.0 billion increase to the share repurchase program, raising the remaining authority for future repurchases to $2.5 billion.

Dividends

During ~~both~~ the first quarter of ~~2020 and subsequent~~2021 we paid $121 million in cash dividends to holders of our common stock. Subsequent to the quarter, we paid ~~$109~~an additional $121 million in cash dividends to holders of our common stock.

Long-Term Customer Financing Commitments

We had outstanding commitments to provide long-term financing to third parties totaling ~~$94~~$82 million at ~~March 28, 2020,~~April 3, 2021, compared to $78 million at December 31, ~~2019.~~2020.

Recent 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~~See “Recent Accounting Pronouncements” and ~~simplifying other areas~~“Recently Adopted Accounting Pronouncements” in Note 1, “Basis of accounting for income taxes. The ASU is effective on January 1, 2021 with early adoption permitted. Portions of the amendment within the ASU require retrospective, modified retrospective or prospective adoption methods. We are still evaluating the impact of adoption on itsPresentation” to our condensed consolidated financial statements ~~and disclosures.~~

In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) - Changes to the Disclosure Requirements for Defined Benefit Plans,” which modifies the disclosure requirements for the defined benefit pension plans and other postretirement plans. The ASU is effective for us on January 1, 2021 with early adoption permitted. The ASU requires a retrospective adoption method. We do not believe the ASU will have a material impact on our financial statement disclosures.

~~Recently Adopted Accounting Pronouncements~~

~~In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement~~included in Part I, Item 1. of Credit Losses on Financial Instruments,” which requires us to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. In November 2018, April 2019, May 2019 and November 2019, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," ASU No. 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transitionthis Form 10-Q.

Relief," and ASU No. 2019-11," Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” which provided additional implementation guidance on the previously issued ASU. We adopted ASC 326 as of January 1, 2020 using a modified retrospective transition approach for all credit losses. Consequently, financial information will not be updated and disclosures required under ASC 326 will not be provided for dates and periods before January 1, 2020.

We considered the impact of adoption by reviewing historical losses in conjunction with current and future economic conditions on the following financial assets: i) cash equivalents, ii) accounts receivable, iii) contract assets and iv) long-term receivables. Historical losses for these financial assets were previously insignificant with the exception of accounts receivable. We estimate credit losses on accounts receivable based on historical losses and then take into account estimates of current and future economic conditions. Our historical loss model is based on past due customer receivable balances and considers past collection experience, historical write-offs as well as the customer’s overall financial condition. Customer receivables are considered past due if payments have not been received within the agreed invoice terms. These historical losses are aggregated based on the type of customer (direct and indirect) and the geographic region (North America and International). The adoption of this standard did not have a material impact on our financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~Derivative Financial Instruments~~

~~As of March 28, 2020, we had outstanding foreign exchange contracts with notional amounts totaling $989 million, compared~~There have been no material changes to ~~$1.1 billion outstanding as of December 31, 2019. Management believes that these financial instruments should not subject us to undue~~our interest rate risk ~~due to foreign exchange movements because gains and losses on these contracts should generally offset gains and losses on the underlying assets, liabilities and transactions.~~

~~The following table shows the five largest net notional amounts of the positions to buy~~ or ~~sell~~ foreign currency ~~as of March 28, 2020, and~~risk during the ~~corresponding positions as of December 31, 2019:~~

Notional Amount
Net Buy (Sell) by Currency March 28, 2020 December 31, 2019
Euro $ 228 $ 134
Norwegian krone 28 32
Canadian dollar 21 8
Australian dollar (93) (123)
Chinese renminbi (74) (79)

~~Forward-Looking Statements~~

Except for historical matters, the matters discussed in this Form 10-Q are 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,” “aims,” “estimates” and similar expressions. 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. Readers are cautioned that such forward-looking statements are subject tothree months ended April 3, 2021. For a variety of risks and uncertainties that could cause our actual results to differ materially from the statements contained in this Form 10-Q. Forward-looking statements include, but are not limited to, statements included in: (1) “Management's Discussion and Analysis,” about: (a) the effect of COVID-19 on our Software and Services segment, Product and System Integration segment, and day-to-day operations, including the effect of governmental lockdowns and restrictions, as well as safety precautions implemented by the Company, (b) the impact of global economic and political conditions, (c) the impact of acquisitions on our business, (d) the expected closing date of the UK public transaction, (e) our business strategies and expected results, (f) future payments, charges, use of accruals and expected cost-saving benefits associated with our productivity improvement plans, reorganization of business programs, and employee separation costs, (g) our ability and cost to repatriate funds, (h) our ability to settle the principal amount of the New Senior Convertible Notes in cash, (i) our ability and cost to access the capital markets at our current ratings, (j) our ability to borrow and the amount available under our credit facilities, (k) the return of capital to shareholders through dividends and/or repurchasing shares, (l) the adequacydiscussion of our ~~cash balances~~exposure to ~~meet current operating requirements,~~interest rate risk and ~~(m) the outcome and effect of ongoing and future legal proceedings, (2) The impact of new FASB Accounting Standards Updates on~~foreign currency risk, refer to our ~~financial statements, (3)~~disclosures set forth in Part II, Item 7A “Quantitative and Qualitative Disclosures ~~about~~About Market Risk,” about the impact of foreign currency exchange risks, (4) “Legal Proceedings,” about the ultimate disposition of pending legal matters, including our ability to obtain an injunction against Hytera. 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.

~~Some~~Risk” of the ~~risk factors that affect our business and financial results are discussed within this document, in Part I, “Item 1A: Risk Factors” on pages 10 through 22 of our~~ ~~201~~9 ~~Annual Report on~~ Form 10-K 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. We wish to caution the reader that the risk factors discussed in each of these documents and those described in our other Securities and Exchange Commission filings, could cause our actual results to differ materially from those stated in the forward-looking statements.10-K.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this ~~quarterly report~~Form 10-Q (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to Motorola Solutions, including our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to Motorola Solutions’ management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the quarter ended ~~March 28, 2020~~April 3, 2021 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

~~Part~~PART II—~~Other Information~~OTHER INFORMATION

Item 1. Legal Proceedings

~~The~~In addition to the matter referenced below, the Company is ~~a defendant in various lawsuits,~~subject to legal proceedings and claims that have not been fully resolved and ~~actions,~~ which ~~arise~~have arisen in the ~~normal~~ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's condensed consolidated financial position, liquidity, or results of operations. However, an unfavorable resolution could have a material adverse effect on the Company's condensed consolidated financial position, liquidity, or results of operations in the periods in which the matters are ultimately resolved, or in the periods in which more information is obtained that changes management's opinion of the ultimate disposition.

~~On February 14, 2020, we announced that a jury~~See Note 12, “Commitments and Contingencies,” to our condensed consolidated financial statements included in ~~the U.S. District Court~~Part I, Item 1 of this Form 10-Q for ~~the Northern District of Illinois decided in~~information regarding our favor in our trade secret theft and copyright infringement case against Hytera Communications Corporation Limited (SHE: 002583) of Shenzhen, China; Hytera America, Inc.; and Hytera Communications America (West), Inc. (collectively, “Hytera”). In connection with this verdict, the jury awarded us $345.8 million in compensatory damages and $418.8 million in punitive damages, for a total of $764.6 million. A motion for a new trial was filed by Hytera subsequent to the quarter.legal proceedings.

Item 1A. Risk Factors

~~Our business results of operations, financial position, cash flows and stock price may be adversely affected by~~In addition to the ~~recent COVID-19 outbreak.~~

~~Health concerns arising from~~other information set forth in this Form 10-Q, you should carefully consider the ~~COVID-19 pandemic may have adverse effects on~~factors discussed in Part I, Item 1A “Risk Factors” in the Form 10-K, which could materially affect our business, results of operations, financial position, cash flows and stock price. COVID-19 could adversely impact our supply chain and distribution systems as well as the demand for our products and services. Although we have been permitted to continue to operate in jurisdictions that have mandated the closure of certain businesses, and we expect to continue to do so in the future, there is no assurance that we will be permitted to operate under every future government order or restriction. Any future restrictions or closures could have a material impact on our business, results of operations, financial condition ~~and cash flow. In particular, any limitations on,~~ or closures of, our manufacturing facilities in Malaysia, Canada, Mexico and the United States (Illinois, California, Texas), or our distribution centers in Malaysia, Germany, Canada and the United States (Illinois, California, Texas), could have a material adverse impact on our ability to manufacture products and service customers and in return, have a material adverse impact on our business, results of operations, financial condition and cash flows. This extends as well to any potential disruptions to transportation including reduced availability of air transportation capacity and ocean freight capacity which can lead to longer transit times and increases in freight costs to deliver our products. If diminished transportation capacity levels continue, the speed at which we deliver our products will continue to be slower than the delivery times that we traditionally provide to our customers and could negatively impact our ability to meet customer demand.

Even after the COVID-19 pandemic has subsided, we could experience materially adverse impacts to our business due to any resulting economic downturns. Additionally, concerns over the economic impact of COVID-19 have caused volatility in financial and other capital markets which has and may continue to adversely impact our stock price. To the extent the COVID-19 pandemic adversely affects our business and financial results it may also have the effect of heightening many of the otherfuture results. The risks described in ~~our 2019 Annual Report, such as those relating to our products, financial performance or access to capital markets.~~“Risk Factors” in the Form 10-K remain current in all material respects.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On March 3, 2020, the Company issued 33,072 shares of common stock in connection with the acquisition of a cybersecurity services business. The stock was issued for an aggregate grant-date fair value of $6 million that will be expensed over an average service period of two years. These shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, in a privately negotiated transaction not involving any public offering or solicitation

The following table provides information with respect to acquisitions by the Company of shares of its common stock during the quarter ended ~~March 28, 2020.~~April 3, 2021.

~~ISSUER PURCHASES OF EQUITY SECURITIES~~Issuer Purchases of Equity Securities

Period (a) Total Number
of Shares
Purchased
(b) Average Price
Paid per
Share ⁽¹⁾
(c) Total Number
of Shares Purchased
as Part of Publicly
Announced Plans
or Program ⁽²⁾
(d) Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under the Plans or
Program⁽²⁾
12/28/19 to 01/22/20 — $ — — $ 1,261,407,490
01/23/20 to 02/18/20 — $ — — $ 1,261,407,490
02/19/20 to 03/25/20 1,554,309 $ 162.85 1,554,309 $ 1,008,283,552
Total 1,554,309 $ 162.85 1,554,309


Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share (1)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Program (2)	(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program(2)
12/30/2020 to 01/27/2021	413,917	$	170.91	413,917	$	586,844,842
01/28/2021 to 02/24/2021	224,133	$	177.71	224,133	$	548,013,011
02/25/2021 to 03/30/2021	329,412	$	179.87	329,412	$	478,763,100
Total	967,462	$	175.53	967,462

(1)Average price paid per share of common stock repurchased is the execution price, including commissions paid to brokers.

(2)~~Through a series of actions,~~As originally announced on July 28, 2011, and subsequently amended, the board of directors has authorized the Company to repurchase an aggregate amount of up to $14.0 billion of its outstanding shares of common stock (the “share repurchase program”). The share repurchase program does not have an expiration date. As of ~~March 28, 2020,~~April 3, 2021, the Company had used approximately ~~$13.0~~$13.5 billion, including transaction costs, to repurchase shares, leaving ~~$1.0 billion~~$479 million of authority available for future repurchases. Subsequent to quarter end, the Board of Directors approved a $2.0 billion increase to the share repurchase program, raising the remaining authority for future repurchases to $2.5 billion.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits

Exhibits 10.1-10.5 listed in this Part II, Item 6 of this Form 10-Q are management contracts or compensatory plans or arrangements.


Exhibit No.						Exhibit
*10.1						*~~10.1~~Motorola Solutions Long Range Incentive Plan (LRIP), as Amended and Restated February 11, 2021.
*10.2						~~2020-2022~~Form of Motorola Solutions, Inc. Performance Stock Unit Award Agreement for grants to Gregory Q. Brown on or after February 11, 2021.
*10.3						Form of Motorola Solutions, Inc. Performance Stock Unit Award Agreement for grants to Section 16 Officers on or after February 11, 2021.
*10.4						Form of Motorola Solutions, Inc. Performance Stock Unit Award Agreement for grants to non-Section 16 Officers on or after February 11, 2021.
*10.5						2021-2023 Performance Measures under the Motorola Solutions Long Range Incentive Plan (LRIP), as approved on February ~~13, 2020.~~11, 2021.
10.6						Revolving Credit Agreement, dated as of March 24, 2021, among Motorola Solutions, Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the several lenders and agents party thereto (incorporated by reference to Exhibit 10.1 to Motorola Solutions, Inc.'s Current Report on Form 8-K filed on March 25, 2021)
*31.1						Certification of Gregory Q. Brown pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2						Certification of ~~Gino A. Bonanotte~~Jason J. Winkler pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
**32.1						Certification of Gregory Q. Brown pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**32.2						Certification of ~~Gino A. Bonanotte~~Jason J. Winkler pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Scheme Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

___________________________________


*			Filed herewith
**			Furnished herewith
			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. ~~©2019~~©2021 Motorola Solutions, Inc. All rights reserved.

SIGNATURES

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 thereunto duly authorized.

MOTOROLA SOLUTIONS, INC.

By:

/S/ DAN PEKOFSKE

Dan Pekofske

Corporate Vice President and

Chief Accounting Officer

(Principal Accounting Officer)

May ~~7, 2020~~6, 2021

~~EXHIBIT INDEX~~


~~Exhibit No.~~						~~Exhibit~~
*10.1						~~2020-2022 Performance Measures under the Motorola Solutions Long Range Incentive Plan (LRIP), as approved on February 13, 2020.~~
*31.1						~~Certification of Gregory Q. Brown pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~
*31.2						~~Certification of Gino A. Bonanotte pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~
*32.1						~~Certification of Gregory Q. Brown pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
*32.2						~~Certification of Gino A. Bonanotte pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
~~101.INS~~						~~XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.~~
~~101.SCH~~						~~XBRL Taxonomy Extension Scheme Document~~
~~101.CAL~~						~~XBRL Taxonomy Extension Calculation Linkbase Document~~
~~101.DEF~~						~~XBRL Taxonomy Extension Definition Linkbase Document~~
~~101.LAB~~						~~XBRL Taxonomy Extension Label Linkbase Document~~
~~101.PRE~~						~~XBRL Taxonomy Extension Presentation Linkbase Document~~
~~104~~						~~Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)~~

~~___________________________________~~


*			~~Filed herewith~~


Allowance for Credit Losses	Balance at January 1, 2020		Charged to Earnings		Used		Adjustments*		Balance at March 28, 2020
2020	$	63	$	11	$	(5)	$	(2)	$	67


	March 28, 2020		December 31, 2019
$2.2 billion revolving credit facility due April 2022	$	800	$	—
3.75% senior notes due 2022	550		550
3.5% senior notes due 2023	597		597
4.0% senior notes due 2024	593		593
1.75% senior convertible notes due 2024	990		988
6.5% debentures due 2025	72		72
7.5% debentures due 2025	254		254
4.6% senior notes due 2028	691		691
6.5% debentures due 2028	24		24
4.6% senior notes due 2029	804		804
6.625% senior notes due 2037	37		37
5.5% senior notes due 2044	396		396
5.22% debentures due 2097	92		91
Other long-term debt	28		35
	5,928		5,132
Adjustments for unamortized gains on interest rate swap terminations	(3)		(3)
Less: current portion	(814)		(16)
Long-term debt	$	5,111	$	5,113


	January 1, 2020		Additional Charges		Adjustments		Amount Used		March 28, 2020

Employee separation costs	$	78	$	22	$	(4)	$	(22)	$	74


	Three Months Ended						Year Ended December 31
	March 28, 2020		March 30, 2019		2019		2018		2017
North America	67	%	65	%	67	%	64	%	62	%
International	33	%	35	%	33	%	36	%	38	%


Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share ⁽¹⁾		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Program ⁽²⁾	(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program⁽²⁾
12/28/19 to 01/22/20	—	$	—	—	$	1,261,407,490
01/23/20 to 02/18/20	—	$	—	—	$	1,261,407,490
02/19/20 to 03/25/20	1,554,309	$	162.85	1,554,309	$	1,008,283,552
Total	1,554,309	$	162.85	1,554,309