# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

# ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# For	the	fiscal	year	ended	December	31,	2014

TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

Commission	File	number	1-7221

# MOTOROLA	SOLUTIONS,	INC.

(Exact	name	of	registrant	as	specified	in	its	charter)

DELAWARE

(State	of	Incorporation)

Title	of	Each	Class

Common	Stock,	$.01	Par	Value	per	Share

(I.R.S.	Employer	Identification	No.)

1303	East	Algonquin	Road,	Schaumburg,	Illinois	60196

(Address	of	principal	executive	offices)

(Registrant's	telephone	number)

Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

Name	of	Each	Exchange	on	Which	Registered

New	York	Stock	Exchange

Chicago	Stock	Exchange

Securities	registered	pursuant	to	Section	12(g)	of	the	Act:

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.				Yes		ý				No		¨

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934.				Yes		¨				No		ý

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		ý				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		ý				No		¨

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of	registrant's knowledge,	in	definitive	proxy	or	information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to	this	Form	10-K.		ý

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	or	a	smaller	reporting	company.	See	the	definitions	of "large	accelerated	filer,"	"accelerated	filer"	and	"smaller	reporting	company"	in	Rule	12b-2	of	the	Exchange	Act.	(Check	one):

Large	accelerated	filer		x

Accelerated	filer			¨

Non-accelerated	filer			¨

Smaller	reporting	company		¨

(Do	not	check	if	a	smaller	reporting	company)

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).				Yes		¨					No		ý

The	aggregate	market	value	of	voting	and	non-voting	common	equity	held	by	non-affiliates	of	the	registrant	as	of	June	27,	2014	(the	last	business	day	of	the	Registrant's	most recently	completed	second	quarter)	was	approximately	$14.8	billion.

# DOCUMENTS	INCORPORATED	BY	REFERENCE

Portions	of	the	registrant's	definitive	Proxy	Statement	to	be	delivered	to	stockholders	in	connection	with	its	Annual	Meeting	of	Stockholders	to	be	held	on	May	18,	2015,	are incorporated	by	reference	into	Part	III.

# PART	I

Throughout	this	10-K	report	we	"incorporate	by	reference"	certain	information	in	parts	of	other	documents	filed	with	the	Securities	and	Exchange	Commission (the	"SEC").	The	SEC	allows	us	to	disclose	important	information	by	referring	to	it	in	that	manner.	Please	refer	to	such	information.

We	are	making	forward-looking	statements	in	this	report.	In	"Item	1A:	Risk	Factors"	we	discuss	some	of	the	risk	factors	that	could	cause	actual	results	to	differ materially	from	those	stated	in	the	forward-looking	statements.

"Motorola	Solutions"	(which	may	be	referred	to	as	the	"Company,"	"we,"	"us,"	or	"our")	means	Motorola	Solutions,	Inc.	or	Motorola	Solutions,	Inc.	and	its subsidiaries,	or	one	of	our	segments,	as	the	context	requires.	MOTOROLA,	MOTO,	MOTOROLA	SOLUTIONS	and	the	Stylized	M	Logo,	as	well	as	iDEN	are trademarks	or	registered	trademarks	of	Motorola	Trademark	Holdings,	LLC	and	are	used	under	license.

During	2014,	we	reclassified	the	financial	results	of	the	Enterprise	business	to	discontinued	operations	and	completed	the	sale	of	certain	assets	and	liabilities	of the	Enterprise	business	to	Zebra	Technologies	Corporation	("Zebra").	The	results	from	discontinued	operations	are	discussed	in	further	detail	in	the	"Discontinued Operations"	footnote	in	our	financial	statements	included	in	Item	8.

# Item	1:	Business

# General

We	are	a	leading	global	provider	of	mission-critical	communication	infrastructure,	devices,	accessories,	software	and	services.	Our	products	and	services	help government,	public	safety	and	commercial	customers	improve	their	operations	through	increased	effectiveness,	efficiency,	and	safety	of	their	mobile	workforces.	We serve	our	customers	with	a	global	footprint	of	sales	in	more	than	100	countries	based	on	our	industry	leading	innovation	and	a	deep	portfolio	of	products	and	services.

We	are	incorporated	under	the	laws	of	the	State	of	Delaware	as	the	successor	to	an	Illinois	corporation,	Motorola,	Inc.,	organized	in	1928.	We	changed	our name	from	Motorola,	Inc.	to	Motorola	Solutions,	Inc.	on	January	4,	2011.	Our	principal	executive	offices	are	located	at	1303	East	Algonquin	Road,	Schaumburg, Illinois	60196.

# Business	Organization

We	conduct	our	business	globally	and	manage	it	through	two	segments:	Products	and	Services.

# Products	Segment

The	Products	segment	offers	an	extensive	portfolio	of	infrastructure,	devices,	accessories,	and	software.	The	primary	customers	of	the	Products	segment	are government,	public	safety	and	first-responder	agencies,	municipalities,	and	commercial	and	industrial	customers	who	operate	private	communications	networks	and manage	a	mobile	workforce.	In	2014,	the	segment's	net	sales	were	$3.8	billion,	representing	65%	of	our	consolidated	net	sales.	The	Products	segment	has	the following	two	principal	product	lines:

Devices:	Devices	includes:	(i)	two-way	portable	radios	and	vehicle-mounted	radios,	(ii)	accessories	such	as	speaker	microphones,	batteries,	earpieces, headsets,	carry	cases	and	cables,	and	(iii)	software	features	and	upgrades.	Devices	represented	72%	of	the	net	sales	of	the	Products	segment	in	2014.

Systems:	Systems	includes:	(i)	the	radio	network	core	and	central	processing	software,	(ii)	base	stations,	(iii)	consoles,	(iv)	repeaters,	and	(v)	software applications	and	features.	Systems	represented	28%	of	the	net	sales	of	the	Products	segment	in	2014.

Our	Devices	and	Systems	are	based	on	the	following	industry	technology	standards:

Industry	standard	definition The	Association	of	Public	Safety Communications	Officials Project	25	standard	("APCO-25") The	European	Telecommunications Standards	Institute	("ETSI") Terrestrial	Trunked	Radio	standard ("TETRA") ETSI,	Digital	mobile	radio	("DMR")	and professional	commercial	radio	("PCR") standards Industry	standard	name APCO	P25 TETRA DMR Motorola	Solutions	product	name ASTRO Dimetra	IP MOTOTRBO	(Digital)	PCR	(Analog) Primary	end	users Government,	Public	Safety Government,	Public	Safety Commercial Primary	geographic	region	of	use North	America,	Latin	America,	Asia, Middle	East,	Africa Europe,	Asia,	Latin	America,	Middle East,	Africa All	regions

# Services	Segment

The	Services	segment	provides	a	full	set	of	service	offerings	for	government,	public	safety	and	commercial	communication	networks.	In	2014,	the	segment's	net sales	were	$2.1	billion,	representing	35%	of	our	consolidated	net	sales.	The	Services	segment	has	the	following	principal	product	lines:

# Integration	services

Integration	services	includes	the	implementation,	optimization,	and	integration	of	systems,	devices,	software	and	applications. Integration	services	represented	45%	of	the	net	sales	of	the	Services	segment	in	2014.

# Lifecycle	Support	services

Lifecycle	Support	services	includes	software	and	hardware	maintenance,	security	patches	and	upgrades,	call	center	support,	network monitoring	and	repair	services.	Lifecycle	Support	services	represented	38%	of	the	net	sales	of	the	Services	segment	in	2014.

# Managed	services

Managed	services	includes	management	and	operation	of	our	customers'	systems	and/or	devices	on	their	behalf	at	defined	service levels.	Managed	services	includes	the	Company	acting	as	either	a	hosted	or	mobile	virtual	network	operator	and	the	management	of end-user	customers	on	a	Motorola	Solutions	owned	system.	Managed	services	represented	10%	of	the	net	sales	of	the	Services segment	in	2014.

# Smart	Public	Safety

# Solutions

Smart	Public	Safety	Solutions	includes	servicing	our	customers'	"Command	&	Control"	centers	with	both	software	and	hardware solutions.	These	solutions	support	video	monitoring,	data	analytics,	and	content	management	with	the	objective	of	enabling	smart policing.	Smart	Public	Safety	Solutions	represented	3%	of	the	net	sales	of	the	Services	segment	in	2014.

iDEN	services Integrated	Digital	Enhanced	Network	("iDEN")	is	a	Motorola	Solutions	proprietary	push-to-talk	technology.	iDEN	services	consists primarily	of	hardware	and	software	maintenance	services	for	our	legacy	iDEN	customers	and	represented	4%	of	the	net	sales	of	the Services	segment	in	2014.

# Strategy	and	Focus	Areas

Our	strategy	is	to	partner	with	our	customers	to	enable	them	to	efficiently	deliver	reliable	services	through	our	innovative	products	and	best-in-class	services.	We have	a	history	of	delivering	these	products	and	services	by	focusing	on	the	following	areas:

•Building	technology	that	is	second	nature	to	the	mission-critical	user;

•Building	technology	that	improves	productivity	and

safety;

•Driving	innovation	and	thought	leadership;

•Ensuring	security	and

resiliency;

•Providing	ongoing	support	for	customer	investments;

•Delivering	complete	solutions,	comprised	of	infrastructure,	devices,	system	software	and	applications,	and	services	to	solve	complex	communication needs.

This	focus	provides	us	with	the	leadership	position	we	have	in	our	core	products.	We	define	our	core	products	as	our	standards-based	voice	and	data communication	devices	and	systems	and	the	related	Integration	and	Lifecycle	Support	services.	We	expect	to	demonstrate	strong	results	from	our	core	products	and services	through:	(i)	leading	the	ongoing	global	migration	to	digital	products,	(ii)	managing	the	public/private	convergence	of	700MHz	public	safety	systems	in	the	U.S. and	the	digital	dividend	spectrum	worldwide;	(iii)	continuing	to	innovate	APCO	P25,	TETRA,	and	DMR	standards-based	voice	and	data	communication	devices	and systems;	(iv)	innovating	new	products	and	technologies	for	the	future;	(v)	enhancing	and	expanding	our	services	offerings	including	Lifecycle	Support	and	Integration services;	and	(vi)	expanding	our	direct	sales	and	channel	partner	programs	both	geographically	and	across	new	commercial	verticals.

We	believe	we	have	the	scale	and	global	presence	to	continue	to	maintain	a	leadership	position	in	our	core	products.	We	have	over	12,000	systems	deployed	in over	180	countries	around	the	world.	These	systems	have	a	multi-year	useful	life	to	the	customer.	We	believe	many	of	our	government	and	commercial	customers have	yet	to	replace	aged	analog	communications	networks	with	next-generation	digital	systems	that	enable	enhanced	features	and	more	efficient	use	of	spectrum, providing	us	opportunities	to	help	customers	migrate	to	these	digital	systems.	In	addition,	we	believe	government	and	commercial	customers	are	just	beginning	to experience	the	benefits	of	converged	wireless	communications	and	the	efficiencies	realized	through	a	connected,	mobile	workforce	which,	we	believe,	will	provide opportunities	for	the	implementation	of	new	public	safety	communications	systems.	We	believe	we	are	well-positioned	to	assist	our	customers	in	the	deployment	of new	networks	as	additional	public	safety	dedicated	spectrum	becomes	available.

In	addition,	we	continue	to	innovate	around	our	existing	core	products	and	services	by	finding	innovative	ways	to	improve	our	products	by	adding	features	and functionality	to	improve	the	user	experience.	By	partnering	with	customers	and	observing	how	our	products	are	used,	our	goal	is	to	enhance	our	customers' experience	through	future	product	enhancements	and	upgrades.

In	addition	to	focused	research	and	development	("R&D")	efforts	on	existing	technologies,	our	strategy	for	long-term	growth	and	the	evolution	of	our	business includes	the	development	of:	(i)	next-generation	public	safety	solutions'	including	public	safety	LTE	systems	and	devices;	(ii)	Smart	Public	Safety	Solutions	including critical	command	center	applications	that	incorporate	voice,	data	and	video,	and	(iii)	new	product	introductions	for	expansion	into	core-adjacent	markets	and geographic	regions.

We	have	been	investing	in	next-generation	public	safety	broadband	networks	based	on	the	LTE	standard	since	2010,	which	reflects	our	belief	that	broadband	is a	foundational	long-term	trend	for	our	government	and	public	safety	customers	globally.	We	believe	that	the	application	of	these	new	broadband	technologies	will	also generate	innovation	and	lead	to	new	smart	public	safety	technologies,	products	and	services	which	will	change	how	government	and	public	safety	organizations create,	organize,	and	effectively	manage	vast	amounts	of	data.	These	changes	will	also	require	a	more	comprehensive	approach	to	the	services	required	to	assist	our customers	in	managing	an	ever	more	complex	world	of	real-time,	interconnected	technology	and	processes.

Our	strategy	includes	leveraging	our	products	and	services	for	markets	outside	of	the	public	safety	and	commercial	markets	we	traditionally	serve.	A	portion	of our	new	product	introductions	in	recent	years	include	products	which	may	also	be	used	in	the	hospitality,	mining,	military,	transportation,	education	and	utility	vertical markets	("verticals").

Geographical	diversification	is	accelerated	by	our	investments	supporting:	(i)	different	regional	interfaces,	(ii)	multiple	languages,	(iii)	tailored	form	factors,	and (iv)	unique	feature	sets.

In	addition	to	organic	development	opportunities	and	growth,	we	continually	evaluate	opportunities	for	inorganic	growth	through	acquisitions	or	targeted investments	in	innovative	technology	companies	that	align	with	our	strategic	initiatives.

# Our	Customers	and	Contracts

We	address	the	communication	needs	of	government	agencies,	state	and	local	public	safety	and	first-responder	agencies,	and	commercial	and	industrial customers	who	utilize	private	communications	networks	and	manage	a	mobile	workforce.	Our	customer	base	is	fragmented	and	widespread	when	considering	the many	levels	of	governmental	and	first-responder	decision-makers	that	procure	and	use	our	products	and	services.	Serving	this	global	customer	base	spanning federal,	state,	county,	province,	territory,	municipal,	and	departmental	independent	bodies,	along	with	our	commercial	and	industrial	customers,	requires	a	significant go-to-market	investment.

Our	sales	model	includes	both	direct	sales	by	our	in-house	sales	force,	which	tends	to	focus	on	our	largest	accounts,	and	sales	through	our	channel	partner program.	Our	trained	channel	partners	include	independent	dealers,	distributors,	and	independent	software	vendors	around	the	world.	The	dealers	and	distributors each	have	their	own	sales	organizations	that	complement	and	extend	the	reach	of	our	sales	force.	The	independent	software	vendors	offer	customized	applications that	meet	specific	needs	in	the	verticals	we	serve.

Our	largest	customer	is	the	U.S.	federal	government	(through	multiple	contracts	with	its	various	branches	and	agencies,	including	the	armed	services), representing	approximately	8%	of	our	consolidated	net	sales	in	2014.	The	loss	of	this	customer	could	have	a	material	adverse	effect	on	our	revenue	and	earnings over	several	quarters,	because	some	of	our	contracts	with	the	U.S.	federal	government	are	long-term.	All	contracts	with	the	U.S.	federal	government,	and	certain other	government	agencies,	are	subject	to	cancellation	at	the	customer's	convenience.	For	a	discussion	of	risks	related	to	government	contracting	requirements, please	refer	to	"Item	1A.	Risk	Factors."

Net	sales	in	North	America	continued	to	comprise	a	significant	portion	of	our	business,	accounting	for	61%,	63%	and	62%	of	our	consolidated	net	sales	in	2014, 2013,	and	2012,	respectively.

Payment	terms	with	our	customers	vary	worldwide.	Generally,	contractual	payment	terms	range	from	30	to	45	days	from	the	invoice	date	within	North	America and	typically	do	not	exceed	90	days	from	the	invoice	date	in	regions	outside	of	North	America.	A	portion	of	our	contracts	include	implementation	milestones,	such	as delivery,	installation	and	system	acceptance,	which	generally	take	30	to	180	days	to	complete.	Invoicing	the	customer	is	dependent	on	completion	of	the	milestones. We	generally	do	not	grant	extended	payment	terms.	As	required	for	competitive	reasons,	we	may	provide	long-term	financing	in	connection	with	equipment purchases.	Financing	may	cover	all	or	a	portion	of	the	purchase	price.

Generally,	our	contracts	do	not	include	a	right	of	return,	other	than	for	standard	warranty	provisions.	Due	to	customer	purchasing	patterns	and	the	cyclical nature	of	the	markets	we	serve,	our	sales	tend	to	be	somewhat	higher	in	the	fourth	quarter.

# Competition

The	markets	in	which	we	operate	are	highly	competitive.	Key	competitive	factors	include:	performance,	features,	quality,	availability,	warranty,	price,	vendor financing,	and	availability	of	service,	company	reputation	and	financial	strength,	partner	community,	and	relationships	with	customers.	Our	strong	reputation	with customers	and	partners,	trusted	brand,	technology	leadership,	breadth	of	portfolio,	product	performance	and	specialized	support	services	position	us	well	for	success.

We	experience	widespread	competition	from	a	growing	number	of	existing	and	new	competitors,	including	large	system	integrators	and	manufacturers	of	private and	public	wireless	network	equipment	and	devices.	Traditional	Land	Mobile	Radio	competitors	include:	Harris,	Airbus,	Kenwood,	Hytera,	and	Sepura.

As	demand	for	fully	integrated	voice,	data,	and	broadband	systems	continue	to	grow,	we	may	face	additional	competition	from	public	telecommunications carriers	and	telecommunications	equipment	providers.	As	we	continue	to	evolve	our	Integration	services	and	Managed	services	strategy	we	may	work	with	other companies	on	a	consortium	or	joint	venture	basis	as	customer's	delivery	needs	become	more	complex	to	fulfill.

Several	other	competitive	factors	may	have	an	impact	on	our	future	business	including:	evolving	spectrum	mandates	by	government	regulators,	evolving developments	in	the	700	MHz	band	in	the	U.S.,	increasing	investment	by	broadband	and	IP	solution	providers,	and	new	low-tier	competitors.

# Other	Information

# Backlog

Our	backlog	for	the	Products	and	Services	segments	includes	all	product	and	service	orders	that	have	been	received	and	are	believed	to	be	firm.	As	of December	31,	2014	and	December	31,	2013	our	backlog	was	as	follows:

|  | December	31 | December	31 |
| :--- | :--- | :--- |
| (In\tmillions) | 2014 | 2013 |
| Products | $1,194 | $1,141 |
| Services | 4,582 | 4,314 |
|  | $5,776 | $5,455 |

Approximately	58%	of	the	Products	backlog	and	26%	of	the	Services	segment	backlog	is	expected	to	be	recognized	as	revenue	during	2015.	The	forward- looking	estimate	of	the	firmness	of	such	orders	is	subject	to	future	events	that	may	cause	the	amount	recognized	to	change.

# Research	and	Development

We	continue	to	prioritize	investments	in	R&D	to	expand	and	improve	our	portfolio	of	products	through	both	new	product	introductions	and	continuous enhancements	to	our	core	products.		Our	R&D	programs	are	focused	on	the	development	of:	(i)	new	public	safety	devices,	infrastructure,	and	solutions,	(ii)	public safety	broadband	solutions	based	on	the	LTE	technology,	(iii)	smart	public	safety	applications	that	include	voice,	data,	and	video.

R&D	expenditures	were	$681	million	in	2014,	$761	million	in	2013,	and	$790	million	in	2012.	As	of	December	31,	2014,	we	had	approximately	5,000	employees engaged	in	R&D	activities.	In	addition,	we	engage	in	R&D	activities	with	joint	development	and	manufacturing	partners	and	outsource	certain	activities	to	engineering firms	to	further	supplement	our	internal	spend.

# Intellectual	Property	Matters

Patent	protection	is	important	to	our	operations.	We	have	a	U.S.	and	international	portfolio	of	patents	relating	to	our	products,	systems	and	technologies, including	research	developments	in	radio	frequency	technology	and	circuits,	wireless	network	technologies,	over-the-air	protocols,	and	mission	critical	two-way	radio communications.	We	have	filed	patent	applications	with	the	U.S.	Patent	and	Trademark	Office,	as	well	as	with	foreign	patent	offices.

We	license	some	of	our	patents	to	third-parties,	but	licensing	revenue	is	not	significant.	We	are	also	licensed	to	use	certain	patents	owned	by	others.	Royalty and	licensing	fees	vary	from	year-to-year	and	are	subject	to	the	terms	of	the	agreements	and	sales	volumes	of	the	products	subject	to	licenses.	In	addition,	Motorola Solutions	has	a	royalty	free-license	under	all	of	the	patents	and	patent	applications	assigned	to	Motorola	Mobility	at	the	time	of	the	separation	of	the	two	businesses	in 2011.

We	actively	participate	in	the	development	of	standards	for	interoperable,	mission-critical	digital	two-way	radio	systems.	Our	patents	are	used	in	standards	in which	our	products	and	services	are	based.	We	offer	licenses	to	those	patents	on	fair,	reasonable	and	non-discriminatory	terms.

We	believe	that	our	patent	portfolio	will	continue	to	provide	us	with	a	competitive	advantage	in	our	core	product	areas	as	well	as	provide	leverage	for	the development	of	future	technologies.	Furthermore,	we	believe	we	are	not	dependent	upon	a	single	patent	or	a	few	patents.	Our	success	depends	more	upon	our extensive	know-how,	innovative	culture,	technical	leadership	and	distribution	channel.	We	do	not	rely	primarily	on	patents	or	other	intellectual	property	rights	to protect	or	establish	our	market	position;	however,	we	will	enforce	our	intellectual	property	rights	in	certain	technologies	when	attempts	to	negotiate	mutually agreeable	licenses	are	not	successful.

We	seek	to	obtain	patents	and	trademarks	to	protect	our	proprietary	position	whenever	possible	and	practical.	As	of	December	31,	2014,	we	owned approximately	4,300	patents	in	the	U.S.	and	in	foreign	countries.	As	of	December	31,	2014,	we	had	approximately	1,200	U.S.	and	foreign	patent	applications pending.	Foreign	patents	and	patent	applications	are	mostly	counterparts	of	our	U.S.	patents.	During	2014,	we	were	granted	approximately	450	patents	in	the	U.S. and	in	foreign	countries.

We	no	longer	own	certain	logos	and	other	trademarks,	trade	names	and	service	marks,	including	MOTOROLA,	MOTO,	MOTOROLA	SOLUTIONS	and	the Stylized	M	logo	and	all	derivatives	thereof	("Motorola	Marks")	and	we	license	the	Motorola	Marks	from	Motorola	Mobility,	which	is	currently	owned	by	Lenovo.

# Inventory	and	Raw	Materials

Our	practice	is	to	carry	reasonable	amounts	of	inventory	to	meet	customers'	delivery	requirements	in	a	manner	consistent	with	industry	standards.	We	provide custom	products	which	require	the	stocking	of	inventories	and	a	large	variety	of	piece	parts	and	replacement	parts	in	order	to	meet	delivery	and	warranty requirements.	To	the	extent	suppliers'	product	life	cycles	are	shorter	than	ours,	stocking	of	lifetime	buy	inventories	is	required	to	meet	long-term	warranty	and contractual	requirements.	In	addition,	replacement	parts	are	stocked	for	delivery	on	customer	demand	within	a	short	delivery	cycle.

Availability	of	required	materials	and	components	is	generally	dependable;	however,	fluctuations	in	supply	and	market	demand	could	cause	selective	shortages and	affect	our	results	of	operations.	We	currently	procure	certain	materials	and	components	from	single-source	vendors.	A	material	disruption	from	a	single-source vendor	may	have	a	material	adverse	impact

on	our	results	of	operations.	If	certain	single-source	suppliers	were	to	become	capacity	constrained	or	insolvent,	it	could	result	in	a	reduction	or	interruption	in	supplies or	an	increase	in	the	price	of	supplies	and	adversely	impact	our	financial	results.

Natural	gas,	electricity	and,	to	a	lesser	extent,	oil	are	the	primary	sources	of	energy	for	our	manufacturing	operations.	Each	of	these	resources	is	currently	in adequate	supply	for	our	operations.	The	cost	to	operate	our	facilities	and	freight	costs	are	dependent	on	world	oil	prices,	although	given	current	oil	spot	rates,	we	are not	expecting	material	cost	savings.	Labor	is	generally	available	in	reasonable	proximity	to	our	manufacturing	facilities.	Difficulties	in	obtaining	any	of	the aforementioned	resources	or	a	significant	cost	increase	could	affect	our	financial	results.

# Environmental	Quality	and	Regulatory	Matters

Some	of	our	operations	use	substances	regulated	under	various	federal,	state,	local	and	international	laws	governing	the	environment	and	worker	health	and safety,	including	those	governing	the	discharge	of	pollutants	into	the	ground,	air	and	water,	the	management	and	disposal	of	hazardous	substances	and	wastes	and the	cleanup	of	contaminated	sites,	as	well	as	relating	to	the	protection	of	the	environment.	Certain	of	our	products	are	subject	to	various	federal,	state,	local	and international	laws	governing	chemical	substances	in	electronic	products.	During	2014,	compliance	with	these	U.S.	federal,	state	and	local,	and	international	laws	did not	have	a	material	effect	on	our	capital	expenditures,	earnings	or	competitive	position.

Radio	spectrum	is	required	to	provide	wireless	voice,	data	and	video	communications	service.	The	allocation	of	spectrum	is	regulated	in	the	U.S.	and	other countries	and	limited	spectrum	space	is	allocated	to	wireless	services	and	specifically	to	public	safety	users.	In	the	U.S.,	the	Federal	Communications	Commission ("FCC")	and	the	National	Telecommunications	and	Information	Administration	("NTIA")	regulate	spectrum	use	by	non-federal	entities	and	federal	entities,	respectively. Similarly,	countries	around	the	world	have	one	or	more	regulatory	bodies	that	define	and	implement	the	rules	for	use	of	radio	spectrum,	pursuant	to	their	respective national	laws	and	international	coordination	under	the	International	Telecommunications	Union	("ITU").	We	manufacture	and	market	products	in	spectrum	bands already	made	available	by	regulatory	bodies.	These	include	voice	and	data	infrastructure,	mobile	radios	and	portable,	or	hand-held	devices.	Consequently,	our	results could	be	positively	or	negatively	affected	by	the	rules	and	regulations	adopted	from	time	to	time	by	the	FCC,	NTIA,	ITU	or	regulatory	agencies	in	other	countries.	Our products	operate	both	on	licensed	and	unlicensed	spectrum.	The	availability	of	additional	radio	spectrum	may	provide	new	business	opportunities,	and	consequently, the	loss	of	available	radio	spectrum	may	result	in	the	loss	of	business	opportunities.	Regulatory	changes	in	current	spectrum	bands	may	also	provide	opportunities	or may	require	modifications	to	some	of	our	products	so	they	can	continue	to	be	manufactured	and	marketed.

As	television	transmission	and	reception	technology	transitions	from	analog	to	more	efficient	digital	modes,	various	countries	around	the	world	are	examining, and	in	some	cases	already	pursuing,	the	redevelopment	of	portions	of	the	television	spectrum.	In	the	U.S.,	spectrum	historically	used	for	broadcast	television,	known as	the	700MHz	band,	has	been	redeveloped	and	deployed	for	new	uses	(the	so-called	"digital	dividend"	spectrum),	including	broadband	and	narrowband	wireless communications.

In	the	U.S.,	thirty-four	MHz	of	spectrum	in	the	700	MHz	band	is	now	allocated	to	support	public	safety	narrowband	and	broadband	communications	systems. This	includes	24	MHz	of	spectrum	previously	allocated	by	the	FCC	and	an	additional	ten	MHz	of	spectrum	(the	"D	block")	allocated	in	February	2012	as	part	of	the Middle	Class	Tax	Relief	and	Job	Creation	Act	of	2012	in	response	to	public	safety	requests	for	additional	broadband	spectrum.	The	resulting	law	also	identified	up	to $7	billion	in	funding	for	the	nationwide	public	safety	broadband	network.	The	law	further	provides	for	the	establishment	of	a	centralized	governance	model	through	an independent	authority	within	NTIA	designated	as	the	"First-Responder	Network	Authority"	or	"FirstNet"	to	manage	deployment	and	operation	of	the	network.	Additional work,	currently	ongoing	in	FirstNet,	is	required	to	enable	deployment	of	the	nationwide	public	safety	broadband	network.	During	2013,	FirstNet	released	multiple Requests	for	Information	seeking	information	concerning	this	initiative.	FirstNet	is	expected	to	issue	a	network	Request	for	Proposal	in	the	second	half	of	2015.

The	law	allows	for	states	to	opt	out	of	the	plan	to	develop	a	nationwide	public	safety	network	and	perform	their	own	competitive	procurements	if	certain	criteria are	met.	States	that	opt	out	would	still	be	eligible	for	funding	and	would	also	be	allowed	to	generate	revenue	through	leases	to	secondary	users.	FirstNet	and	the	FCC have	also	enabled	the	early	deployment	of	broadband	systems	in	several	areas	so	that	field	experience	can	be	gained	regarding	the	benefits	of	broadband communications	for	public	safety	operations.	In	September	2012,	the	State	of	Texas	received	a	Special	Temporary	Authorization	("STA")	for	deployment	of	14 broadband	sites	in	the	Harris	County	area	around	Houston.	That	authorization	was	extended	through	2013	and	they	are	currently	in	negotiations	with	FirstNet.	The State	of	Texas	and	Harris	County,	with	assistance	from	Motorola	Solutions,	have	deployed	broadband	equipment	and	applications	and	successfully	demonstrated	the benefits	such	systems	can	bring	to	FirstNet	and	other	officials.	FirstNet	also	entered	into	a	spectrum	lease	with	the	Los	Angeles	Regional	Interoperable Communications	System	Authority	("LA-RICS")	to	allow	for	a	radio	system	that	will	provide	mission	critical	communications	for	the	region's	more	than	34,000	law enforcement,	fire	service	and	health	service	professionals	and	more	than	80	public	safety	agencies.	LA-RICS	selected	Motorola	Solutions	to	develop	this	radio system.

Although	the	law	has	been	enacted,	the	implementation	of	a	nationwide	public	safety	network	under	FirstNet	has	been	slow	to	progress	and	could	be	reduced significantly.	For	a	discussion	of	risks	related	to	the	implementation	of	a	nationwide	public	safety	network,	please	refer	to	"Item	1A,	Risk	Factors".

Internationally,	the	ITU	World	Radio	Conference	("WRC")	is	held	every	three	to	four	years	to	discuss	and	promote	global	agreement	on	the	use	and	cooperation of	spectrum	usage.	The	next	WRC	will	be	held	in	November	2015.	During	this	conference,	leaders	from	United	Nations	member	countries	consider	a	number	of initiatives,	including	whether	to	allocate	additional	spectrum	for	commercial	broadband	use	as	well	as	whether	to	allocate	spectrum	dedicated	for	public	safety

broadband.	The	WRC	has	agreed	to	consider	spectrum	for	public	safety	broadband.	Studies	are	underway	to	assess	whether	and	how	much	spectrum	is	needed	and to	develop	recommendations	on	where	in	the	spectrum	range	the	spectrum	should	be	allocated	(taking	into	account	regional	and	global	harmonization	to	the	extent practicable).	Motorola	Solutions	continues	to	work	with	its	customers	and	governments	around	the	world	to	advocate	for	future	allocations	of	dedicated	broadband spectrum	for	public	safety	which	will	provide	new	business	opportunities	for	us	in	the	future.

Several	major	markets	including:	Australia,	Canada,	the	United	States,	Mexico	and	South	Korea	have	already	set	aside	broadband	spectrum	for	use	by	public safety	and	the	wider	first-responder	community.	We	believe	this	trend	will	continue	over	time	and	the	planned	implementation	of	nationwide	broadband	public	safety networks	provides	new	opportunities	for	our	broadband	portfolio	and	services	growth	strategy.

In	addition,	certain	countries,	in	response	to	increasing	security	concerns,	already	have	spectrum	landscapes	that	permit	country	administrations	to	allocate public	safety	spectrum	quickly	without	a	protracted	process	or	agreement.

# Employees

# Material	Dispositions

•On	October	27,	2014,	we	completed	the	sale	of	certain	assets	and	liabilities	of	the	Enterprise	business	to	Zebra.	The	financial	results	of	the	disposed business	have	been	reclassified	to	discontinued	operations	for	all	periods	presented.	The	results	of	discontinued	operations	are	discussed	in	further	detail	in the	"Discontinued	Operations"	footnote	included	in	Item	8.

•On	January	1,	2012,	we	completed	a	series	of	transactions	which	resulted	in	exiting	the	amateur,	marine	and	airband	radio businesses.

•On	October	28,	2011,	we	completed	the	sale	of	our	wireless	broadband

businesses.

•On	April	29,	2011,	we	completed	the	sale	of	certain	assets	and	liabilities	of	our	Networks	business	to	Nokia	Siemens	Networks ("NSN").

•On	January	4,	2011,	the	distribution	of	Motorola	Mobility	was	completed.	The	stockholders	of	record	as	of	the	close	of	business	on	December	21,	2010 received	one	(1)	share	of	Motorola	Mobility	common	stock	for	each	eight	(8)	shares	of	our	common	stock	held.

# Financial	Information	About	Geographic	Areas

The	response	to	this	section	of	Item	1	incorporates	by	reference	Note	11,	"Commitments	and	Contingencies"	and	Note	12,	"Information	by	Segment	and Geographic	Region"	of	Part	II,	Item	8:	Financial	Statements	and	Supplementary	Data	of	this	document,	the	"Results	of	Operations—2014	Compared	to	2013"	and "Results	of	Operations—2013	Compared	to	2012"	sections	of	Part	II,	"Item	7:	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of Operations"	and	"Item	1A:	Risk	Factors"	of	this	document.

# Financial	Information	About	Segments

The	response	to	this	section	of	Item	1	incorporates	by	reference	Note	12,	"Information	by	Segment	and	Geographic	Region,"	of	Part	II,	Item	8:	Financial Statements	and	Supplementary	Data	of	this	document.

# Available	Information

We	make	available	free	of	charge	through	our	website,	www.motorolasolutions.com/investors,	our	annual	reports	on	Form	10-K,	quarterly	reports	on	Form	10- Q,	current	reports	on	Form	8-K,	proxy	statements,	other	reports	filed	under	the	Securities	Exchange	Act	of	1934	("Exchange	Act")	and	all	amendments	to	those reports	simultaneously	or	as	soon	as	reasonably	practicable	after	such	material	is	electronically	filed	with,	or	furnished	to,	the	SEC.	Our	reports	are	also	available	free of	charge	on	the	SEC's	website,	www.sec.gov.	Also	available	free	of	charge	on	our	website	are	the	following	corporate	governance	documents:

•Motorola	Solutions,	Inc.	Restated	Certificate	of	Incorporation	with

Amendments

•Conformed	Restated	Certificate	of	Incorporation	of	Motorola	Solutions,	Inc.	(amended	Jan.	4,

•Certificate	of	Amendment	to	the	Restated	Certificate	of	Incorporation	of	Motorola,	Inc.	(effective	Jan.	4,

•Certificate	of	Ownership	and	Merger	of	Motorola	Name	Change	Corporation	into	Motorola,	Inc.	(effective	Jan.	4, 2011)

•Motorola	Solutions,	Inc.	Amended	and	Restated Bylaws

•Board	Governance

Guidelines

•Director	Independence	Guidelines

•Principles	of	Conduct	for	Members	of	the	Motorola	Solutions,	Inc.	Board	of Directors

•Motorola	Solutions	Code	of	Business	Conduct,	which	is	applicable	to	all	Motorola	Solutions	employees,	including	the	principal	executive	officers,	the principal	financial	officer	and	the	controller	(principal	accounting	officer)

•Audit	Committee	Charter

# •Compensation	and	Leadership	Committee

# Charter

# •Governance	and	Nominating	Committee	Charter

All	of	our	reports	and	corporate	governance	documents	may	also	be	obtained	without	charge	by	contacting	Investor	Relations,	Motorola	Solutions,	Inc., Corporate	Offices,	1303	East	Algonquin	Road,	Schaumburg,	Illinois	60196,	E-mail:	investors@motorolasolutions.com.	This	annual	report	on	Form	10-K	and	Definitive Proxy	Statement	are	available	on	the	Internet	at	www.motorolasolutions.com/investors	and	may	also	be	requested	in	hardcopy	by	completing	the	on-line	request	form available	on	our	website	at	www.motorolasolutions.com/investors.	Our	Internet	website	and	the	information	contained	therein	or	incorporated	therein	are	not	intended to	be	incorporated	into	this	Annual	Report	on	Form	10-K.

# Item	1A:	Risk	Factors

We	face	a	number	of	risks	related	to	current	global	economic	and	political	conditions,	including	low	economic	growth	rates	in	certain	markets,	the	impact of	currency	fluctuations,	falling	oil	prices,	and	unstable	political	conditions	that	have	and	could	continue	to	unfavorably	impact	our	business.

Global	economic	and	political	conditions	continue	to	be	challenging	for	many	of	our	government	and	commercial	markets,	as	economic	growth	in	many countries,	particularly	in	Europe	and	in	emerging	markets,	has	remained	low,	currency	fluctuations	have	impacted	profitability,	credit	markets	have	remained	tight	for certain	of	our	counterparties	and	many	of	our	customers	remain	dependent	on	government	grants	to	fund	purchases	of	our	products	and	services.	Falling	global	oil prices	are	also	impacting	government	customers	in	oil-dependent	economies,	particularly	in	the	Middle	East,	South	America	and	Russia.	In	addition,	conflicts	in	the Middle	East	and	elsewhere	have	created	many	economic	and	political	uncertainties	that	continue	to	impact	worldwide	markets.	The	length	of	time	these	adverse economic	and	political	conditions	may	persist	is	unknown.	These	global	economic	and	political	conditions	have	impacted	and	could	continue	to	impact	our	business	in a	number	of	ways,	including:

•Requests	by	Customers	for	Vendor	Financing	by	Motorola	Solutions:	Certain	of	our	customers,	particularly,	but	not	limited	to,	those	who	purchase large	infrastructure	systems,	request	that	their	suppliers	provide	financing	in	connection	with	equipment	purchases	and/or	the	provision	of	solutions	and services,	particularly	as	the	size	and	length	of	these	types	of	contracts	increases	and	as	we	increase	our	business	in	developing	countries.	Requests	for vendor	financing	continue	to	increase	in	volume	and	scope,	including	in	response	to	reduced	tax	revenue	at	the	state	and	local	government	level	and ongoing	tightening	of	credit	for	certain	commercial	customers.	Motorola	Solutions	has	continued	to	provide	vendor	financing	to	both	our	government	and commercial	customers.	We	have	been	faced	with	and	expect	to	continue	to	be	faced	with	choosing	between	further	increasing	our	level	of	vendor	financing or	potentially	losing	sales,	as	some	of	our	competitors,	particularly	those	in	Asia,	have	been	more	willing	to	provide	vendor	financing	to	customers	around the	world,	particularly	customers	in	Africa	and	Latin	America.	To	the	extent	we	are	unable	to	sell	these	receivables	on	terms	acceptable	to	us	we	may	retain exposure	to	the	credit	quality	of	our	customers	who	we	finance.

•Customers'	Inability	to	Obtain	Financing	to	Make	Purchases	from	Motorola	Solutions	and/or	Maintain	Their	Business:	Some	of	our	customers require	substantial	financing,	including	public	financing	or	government	grants,	in	order	to	fund	their	operations	and	make	purchases	from	us.	The	inability	of these	customers	to	obtain	sufficient	credit	or	other	funds,	including	as	a	result	of	lower	tax	revenues,	falling	oil	prices,	currency	fluctuations	or	unavailability of	government	grants,	to	finance	purchases	of	our	products	and	services	and/or	to	meet	their	payment	obligations	to	us	could	have,	and	in	some	cases	has had,	a	negative	impact	on	our	financial	results.	This	risk	increases	as	the	size	and	length	of	our	contracts	increase.	In	addition,	if	global	economic	conditions result	in	insolvencies	for	our	customers,	it	will	negatively	impact	our	financial	results.

•Challenges	in	Budgeting	and	Forecasting:	It	is	difficult	to	estimate	changes	in	various	parts	of	the	U.S.	and	world	economy,	including	the	markets in	which	we	participate.	Components	of	our	budgeting	and	forecasting	are	dependent	upon	estimates	of	demand	for	our	products	and	estimates	of	foreign exchange	rates.	The	prevailing	economic	uncertainties	render	estimates	of	future	income	and	expenditures	challenging.

•Potential	Deferment	or	Cancellation	of	Purchases	and	Orders	by	Customers:	Uncertainty	about	current	and	future	global	economic	conditions	may cause,	and	in	some	cases	has	caused,	businesses	and	governments	to	defer	or	cancel	purchases	in	response	to	tighter	credit,	decreased	cash	availability and	de-prioritization	of	communications	equipment	within	the	budgeting	process.	If	future	demand	for	our	products	declines	due	to	economic	conditions,	it will	negatively	impact	our	financial	results.

•Inability	to	operate	and	grow	in	certain	markets:	We	operate	in	a	number	of	markets	with	a	risk	of	intensifying	political	instability,	including	Russia, the	Middle	East	and	Africa.	If	political	instability	continues	in	these	markets	and	in	other	parts	of	the	world	in	which	we	operate	it	could	have	a	significant impact	on	our	ability	to	grow	and	operate	in	those	locations,	which	will	negatively	impact	our	financial	results.

# A	significant	amount	of	our	international	business	is	transacted	in	local	currency	and	a	significant	percentage	of	our	cash	and	cash	equivalents	are	held outside	of	the	United	States,	which	exposes	us	to	risk	relating	to	currency	fluctuations,	changes	in	foreign	exchange	regulations	and	repatriation	delays and	costs,	which	could	negatively	impact	our	sales,	profitability	and	financial	flexibility.

We	have	sizable	sales	and	operations	in	Canada	and	our	Europe	and	Africa,	Asia	and	Middle	East,	and	Latin	America	regions.	A	significant	amount	of	this business	is	transacted	in	local	currency.	As	a	result,	our	financial	performance	is	impacted	by	currency	fluctuations.	We	are	also	experiencing	increased	pressure	to agree	to	established	currency	conversion	rates	and	cost	of	living	adjustments	as	a	result	of	foreign	currency	fluctuations.

A	significant	percentage	of	our	cash	and	cash	equivalents	is	currently	held	outside	the	U.S.	and	we	continue	to	generate	profits	outside	of	the	U.S.,	while	many of	our	liabilities,	such	as	our	public	debt,	the	majority	of	our	pension	liabilities	and	certain	other	cash	payments,	such	as	dividends	and	share	repurchases,	are payable	in	the	U.S.	While	we	have	regularly	repatriated	funds	with	minimal	adverse	financial	impact,	repatriation	of	some	of	the	funds	has	been	and	could	continue	to be	subject	to	delay	for	local	country	approvals	and	could	have	potential	adverse	tax	consequences.	In	addition,	foreign	exchange	regulations	may	limit	our	ability	to convert	or	repatriate	foreign	currency.	As	a	result	of	having	a	lower	amount	of	cash	and	cash	equivalents	in	the	U.S.,	our	financial	flexibility	may	be	reduced.

# A	portion	of	our	business	is	dependent	upon	U.S.	government	contracts	and	grants,	which	are	highly	regulated	and	subject	to	oversight	audits	by	U.S. government	representatives	and	subject	to	cancellations.	Such	audits	could	result	in	adverse	findings	and	negatively	impact	our	business.

Our	U.S.	government	business	is	subject	to	specific	procurement	regulations	with	numerous	compliance	requirements.	These	requirements,	although customary	in	U.S.	government	contracting,	increase	our	performance	and	compliance	costs.	These	costs	may	increase	in	the	future,	thereby	reducing	our	margins, which	could	have	an	adverse	effect	on	our	financial	condition.	Failure	to	comply	with	these	regulations	could	lead	to	suspension	or	debarment	from	U.S.	government contracting	or	subcontracting	for	a	period	of	time,	and	the	inability	to	receive	future	grants.	Among	the	causes	for	debarment	are	violations	of	various	laws	or	policies, including	those	related	to	procurement	integrity,	export	control,	U.S.	government	security	regulations,	employment	practices,	protection	of	criminal	justice	data, protection	of	the	environment,	accuracy	of	records,	proper	recording	of	costs,	foreign	corruption	and	the	False	Claims	Act.

Generally,	U.S.	government	contracts	and	grants	are	subject	to	oversight	audits	by	U.S.	government	representatives.	Such	audits	could	result	in	adjustments	to our	contracts	or	grants.	Any	costs	found	to	be	improperly	allocated	to	a	specific	contract	or	grant	may	not	be	allowed,	and	such	costs	already	reimbursed	may	have	to be	refunded.	Future	audits	and	adjustments,	if	required,	may	materially	reduce	our	revenues	or	profits	upon	completion	and	final	negotiation	of	audits.	Negative	audit findings	could	also	result	in	investigations,	termination	of	a	contract	or	grant,	forfeiture	of	profits	or	reimbursements,	suspension	of	payments,	fines	and	suspension	or prohibition	from	doing	business	with	the	U.S.	government.	All	contracts	with	the	U.S.	government	are	subject	to	cancellation	at	the	convenience	of	the	U.S. government.

In	addition,	contacts	with	government	officials	and	participation	in	political	activities	are	areas	that	are	tightly	controlled	by	federal,	state,	local	and	international laws.	Failure	to	comply	with	these	laws	could	cost	us	opportunities	to	seek	certain	government	sales	opportunities	or	even	result	in	fines,	prosecution,	or	debarment.

# Government	regulation	of	radio	frequencies	may	limit	the	growth	of	public	safety	broadband	systems	or	reduce	barriers	to	entry	for	new	competitors.

Radio	frequencies	are	required	to	provide	wireless	services.	The	allocation	of	frequencies	is	regulated	in	the	U.S.	and	other	countries	and	limited	spectrum space	is	allocated	to	wireless	services	and	specifically	to	public	safety	users.	The	growth	of	public	safety	broadband	communications	systems	may	be	affected:	(i)	by regulations	relating	to	the	access	to	allocated	spectrum	for	public	safety	users,	(ii)	if	adequate	frequencies	are	not	allocated,	or	(iii)	if	new	technologies	are	not developed	to	better	utilize	the	frequencies	currently	allocated	for	such	use.	Industry	growth	may	also	be	affected	by	new	licensing	fees	required	to	use	frequencies.

The	U.S.	leads	the	world	in	allocating	spectrum	to	enable	wireless	communications	including	LTE.	Other	countries	have	also	allocated	spectrum	to	allow deployment	of	these	and	other	technologies.	This	changing	landscape	may	introduce	new	competition	and	new	opportunities	for	us.

The	Middle	Class	Tax	Relief	and	Job	Creation	Act	of	2012	(the	"Legislation")	authorized	an	additional	ten	MHz	of	broadband	spectrum	for	public	safety	use	for	a total	of	20	MHz	of	broadband	spectrum	for	public	safety.	In	addition,	public	safety	retained	14	MHz	of	the	700	MHz	narrowband	spectrum,	subject	to	the	FCC's authority	to	determine	whether	such	spectrum	should	be	authorized	for	future	broadband	use.	The	Legislation	further	provides	for	the	establishment	of	a	centralized governance	model	through	an	independent	authority	within	NTIA	designated	as	the	"First-Responder	Network	Authority"	or	"FirstNet"	but	allows	for	states	to	opt	out	of the	plan	to	develop	a	nationwide	public	safety	network	and	perform	their	own	competitive	procurements	if	certain	criteria	are	met.	States	that	opt	out	would	still	be eligible	for	funding	and	would	also	be	allowed	to	generate	revenue	through	leases	to	secondary	users.

Although	the	Legislation	has	been	enacted,	the	implementation	of	a	nationwide	public	safety	network	under	FirstNet	has	been	slow	to	progress	and	could	be reduced	significantly	in	scope	due	to:	(i)	complexities	in	the	acquisition	of	a	nationwide	network,	which	involves	regulatory	requirements,	(ii)	writing	of	the specifications	and	statement	of	work,	(iii)	decision	making	on	the	system	architecture	or	(iv)	potential	political	opposition	from	certain	states.	Any	such	delays	or changes	in	scope	of	the	FirstNet	initiative	could	negatively	impact	our	ability	to	further	develop	and	expand	our	public	safety	LTE	business	in	the	U.S.	For

example,	FirstNet	may	define	specifications	for	the	nationwide	network	which	make	it	impossible	or	impractical	for	commercial	LTE	infrastructure	and	equipment vendors	to	compete	for	contracts	to	build	out	the	network.	Furthermore,	states	may	seek	alternative	means	to	deploy	public	safety	LTE	networks	if	a	centralized architecture	inhibits	states'	ability	to	operationally	control	its	first-responder	agencies.

# We	derive	a	portion	of	our	revenue	from	government	customers	who	award	business	through	competitive	bidding	which	can	involve	significant	upfront costs	and	risks.	This	effort	may	not	result	in	awards	of	business	or	we	may	fail	to	accurately	estimate	the	costs	to	fulfill	contracts	awarded	to	us,	which could	have	adverse	consequences	on	our	future	profitability.

Many	government	customers,	including	most	U.S.	government	customers,	award	business	through	a	competitive	bidding	process,	which	results	in	greater competition	and	increased	pricing	pressure.	The	competitive	bidding	process	involves	significant	cost	and	managerial	time	to	prepare	bids	for	contracts	that	may	not be	awarded	to	us.	Even	if	we	are	awarded	contracts,	we	may	fail	to	accurately	estimate	the	resources	and	costs	required	to	fulfill	a	contract,	or	to	resolve	problems with	our	subcontractors	or	suppliers,	which	could	negatively	impact	the	profitability	of	any	contract	award	to	us.	In	addition,	following	the	award	of	a	contract,	we	have experienced	and	may	continue	to	experience	significant	expense	or	delay,	contract	modification	or	contract	rescission	as	a	result	of	customer	delay	or	our	competitors protesting	or	challenging	contracts	awarded	to	us	in	competitive	bidding.

# We	enter	into	fixed-price	contracts	that	could	subject	us	to	losses	in	the	event	we	fail	to	properly	estimate	our	costs	or	hedge	our	risks	associated	with currency	fluctuations.

We	enter	into	a	number	of	firm	fixed-price	contracts.	If	our	initial	cost	estimates	are	incorrect,	we	can	lose	money	on	these	contracts.	Because	certain	of	these contracts	involve	new	technologies	and	applications,	require	us	to	engage	subcontractors	and/or	can	last	multiple	years,	unforeseen	events,	such	as	technological difficulties,	fluctuations	in	the	price	of	raw	materials,	problems	with	our	subcontractors	or	suppliers	and	other	cost	overruns,	can	result	in	the	contract	pricing	becoming less	favorable	or	even	unprofitable	to	us	and	have	an	adverse	impact	on	our	financial	results.	In	addition,	a	significant	increase	in	inflation	rates	or	currency fluctuations	could	have	an	adverse	impact	on	the	profitability	of	longer-term	contracts.

We	no	longer	own	a	number	of	our	enterprise	legacy	information	systems,	including	components	of	our	Enterprise	Resource	Planning	(ERP)	system.	We are	planning	to	implement	a	new	ERP	system	and	we	rely	on	complex	and	in	some	cases	aging	information	technology	systems	and	networks	to	operate our	business.	Any	system	or	network	disruption	could	have	a	negative	impact	on	our	operations,	sales	and	operating	results.

We	rely	on	the	efficient	and	uninterrupted	operation	of	complex	information	technology	systems	and	networks,	some	of	which	are	within	the	Company	and	some of	which	are	outsourced.	In	connection	with	the	sale	of	our	Enterprise	business	to	Zebra	Technologies	Corporation	("Zebra"),	we	transferred	ownership	of	a	number	of our	enterprise	legacy	information	systems	including	components	of	our	Enterprise	Resource	Planning	(ERP)	system	to	Zebra.	We	are	currently	in	a	transition	services agreement	to	co-use	these	systems	with	Zebra	until	2017	which	limits	our	ability	to	make	changes	to	these	systems.	We	are	planning	to	implement	a	new	ERP system	to	replace	pieces	of	the	systems	now	owned	by	Zebra.	If	this	implementation	is	delayed	or	introduces	defective,	or	improperly	installed	or	implemented computer	code,	it	may	result	in	a	business	disruption.

We	also	currently	rely	on	a	number	of	older	legacy	information	systems	that	are	harder	to	maintain	and	when	we	begin	to	implement	our	new	ERP	system	we will	have	fewer	resources	to	maintain	these	older	legacy	systems.	A	system	failure	could	negatively	impact	our	operations	and	financial	results.

In	addition,	as	we	have	outsourced	more	of	our	business	operations	we	have	increased	our	dependence	on	the	IT	systems	of	our	outsourced	business	partners which	are	not	under	our	direct	management	or	control.	Any	disruption	to	either	those	outsourced	systems	or	the	communication	links	between	Motorola	Solutions	and the	outsourced	supplier,	may	negatively	impact	our	ability	to	manufacture,	distribute,	or	repair	products.	We	may	incur	additional	costs	to	remedy	the	damages caused	by	these	disruptions.

# A	security	breach	or	other	significant	disruption	of	our	IT	systems,	those	of	our	outsource	partners,	suppliers	or	those	we	manufacture,	install,	and	in some	cases	operate	and	maintain	for	our	customers,	caused	by	cyber	attack	or	other	means,	could	have	a	negative	impact	on	our	operations,	sales,	and operating	results.

All	information	technology	systems	are	potentially	vulnerable	to	damage,	unauthorized	access	or	interruption	from	a	variety	of	sources,	including	but	not	limited to,	cyber	attack,	cyber	intrusion,	computer	viruses,	security	breach,	energy	blackouts,	natural	disasters,	terrorism,	sabotage,	war,	and	telecommunication	failures.	As a	provider	of	mission-critical	communications	systems	for	customers	in	critical	infrastructure	sectors	of	the	U.S.	and	globally,	including	systems	that	we	operate	and maintain	for	certain	of	our	customers,	we	face	additional	risk	as	a	target	of	sophisticated	attacks	aimed	at	compromising	both	our	Company's	and	our	customers' sensitive	information	and	intellectual	property,	through	means	referred	to	as	advanced	persistent	threats.	This	risk	is	heightened	because	these	systems	may	contain sensitive	governmental	information	or	personally	identifiable	or	other	protected	information.	While	we	employ	a	number	of	countermeasures	and	security	controls, including	training	and	audits	and	utilization	of	commercial	information	security	threat	sharing	networks	to	protect	against	such	attacks,	we	have	experienced	a	gradual and	steady	increase	in	the	sophistication	of	these	threats,	most	noticeably	through	well-crafted	social	engineering	and	phishing	attempts.	We	cannot	guarantee	that	all threat	attempts	will	be	successfully	thwarted	even	with	these	countermeasures.	Further,	we	are	dependent,	in	certain	instances,	upon	our	outsourced	business partners,	suppliers,	and	customers	to	adequately	protect	our	IT	systems	and	those	IT	systems	that	we	manage	for	our	customers.	In	addition,	some	of	our	customers are	exploring	broadband	solutions	that	use	public	carrier	networks	on	which	our	solutions	would	operate.	We	do	not	have	direct	oversight	or	influence	over	how	public carrier	networks	manage	the	security,	quality,	or	resiliency	of	their	networks,	and	because	they	are	an	attractive	high	value	target	due	to	their	role	in	critical infrastructure,	they	expose	customers'	to	an	elevated	risk	over	our	private	networks.

Our	Company	outsources	certain	business	operations,	including,	but	not	limited	to	IT,	HR	information	systems,	manufacturing,	repair,	distribution	and engineering	services.	These	arrangements	are	governed	by	various	contracts	and	agreements	which	reference	and	mandate	Company	and	international	standards	of information	protection,	as	appropriate.	In	addition,	we	maintain	certain	networked	equipment	at	customer	locations	and	are	reliant	on	those	customers	to	protect	and maintain	that	equipment.	The	"attack	surface"	for	us	to	protect	against	our	adversaries	is	thus	often	extended	to	these	partners	and	customers,	as	well	as	our suppliers,	and	we	may	be	dependent	upon	their	cyber	security	capabilities	as	well	as	their	willingness	to	exchange	threat	and	response	information	with	us.

A	cyber	attack	or	other	significant	disruption	involving	our	IT	systems	or	those	of	our	outsource	partners,	suppliers	or	our	customers	could	result	in	the unauthorized	release	of	proprietary,	confidential	or	sensitive	information	of	ours	or	our	customers.	Such	unauthorized	access	to,	or	release	of,	this	information	could: (i)	allow	others	to	unfairly	compete	with	us,	(ii)	compromise	safety	or	security,	given	the	mission-critical	nature	of	our	customers'	systems,	(iii)	subject	us	to	claims	for breach	of	contract,	and	(iv)	damage	our	reputation.	We	could	face	regulatory	penalties,	enforcement	actions,	remediation	obligations	and/or	private	litigation	by parties	whose	data	is	improperly	disclosed	or	misused.	In	addition,	there	has	been	a	sharp	increase	in	laws	in	Europe,	the	U.S.	and	elsewhere,	imposing requirements	for	the	handling	of	personal	data,	including	data	of	employees,	consumers	and	business	contacts.	There	is	a	risk	that	our	Company,	directly	or	as	the result	of	some	third-party	service	provider	we	use,	could	be	found	to	have	failed	to	comply	with	the	laws	or	regulations	of	some	country	regarding	the	collection, consent,	handling,	transfer,	retention	or	disposal	of	such	personal	data,	and	therefore	subject	us	to	fines	or	other	sanctions.	Any	or	all	of	the	foregoing	could	have	a negative	impact	on	our	business,	financial	condition,	results	of	operations,	and	cash	flow.

Our	future	operating	results	depend	on	our	ability	to	purchase	a	sufficient	amount	of	materials,	parts,	and	components,	as	well	as	services	and	software to	meet	the	demands	of	our	customers	and	any	disruption	to	our	suppliers	or	significant	increase	in	the	price	of	supplies	could	have	a	negative	impact	on our	results	of	operations.

Our	ability	to	meet	customers'	demands	depends,	in	part,	on	our	ability	to	timely	obtain	an	adequate	delivery	of	quality	materials,	parts,	and	components,	as	well as	services	and	software	from	our	suppliers.	In	addition,	certain	supplies,	including	for	some	of	our	critical	components,	are	available	only	from	a	single	source	or limited	sources	and	we	may	not	be	able	to	diversify	sources	in	a	timely	manner.	If	demand	for	our	products	or	services	increases	from	our	current	expectations	or	if suppliers	are	unable	to	meet	our	demand	for	other	reasons,	including	as	a	result	of	natural	disasters	or	financial	issues,	we	could	experience	an	interruption	in supplies	or	a	significant	increase	in	the	price	of	supplies,	including	as	a	result	of	having	to	move	to	an	alternative	source,	that	could	have	a	negative	impact	on	our business	as	a	result	of	increased	cost	or	delay	in	or	inability	to	deliver	our	products.	This	risk	may	increase	as	a	result	of	consolidation	of	certain	of	our	suppliers.	We have	experienced	shortages	in	the	past	that	have	negatively	impacted	our	results	of	operations	and	may	experience	such	shortages	in	the	future.	In	addition,	credit constraints	at	our	suppliers	could	cause	us	to	accelerate	payment	of	accounts	payable	by	us,	impacting	our	cash	flow.

We	have	seen	and	expect	to	continue	to	see	increases	in	the	price	of	certain	supplies	as	we	no	longer	qualify	for	certain	volume	discounts	given	our	significant decrease	in	direct	material	spend	over	the	last	several	years	as	a	result	of	our	spin-offs	and	divestitures.	We	have	also	experienced	less	support	and	focus	from	our suppliers	as	our	spend	has	diminished,	making	it	more	difficult	for	us	to	resolve	gaps	in	supply	due	to	unforeseen	changes	in	forecast	and	demand.	In	addition,	our current	contractual	arrangements	with	certain	suppliers	may	be	cancelled	or	not	extended	by	such	suppliers	and,	therefore,	not	afford	us	with	sufficient	protection against	a	reduction	or	interruption	in	supplies.	Moreover,	in	the	event	any	of	these	suppliers	breach	their	contracts	with	us,	our	legal	remedies	associated	with	such	a breach	may	be	insufficient	to	compensate	us	for	any	damages	we	may	suffer.

# Our	sales	within	a	quarter	are	not	linear,	with	a	substantial	percentage	of	products	shipping	in	the	final	month	of	the	quarter.	This	lack	of	linearity	creates inefficiencies	in	our	business	performance	and	any	interruption	during	this	final	month	could	have	a	substantial	impact	on	our	quarterly	financial	results.

On	average,	a	substantial	percentage	of	our	quarterly	sales	ship	in	the	final	month	of	a	quarter.	Any	interruption	in	our	ability	to	ship	products	during	this	final month,	such	as	unavailability	of	critical	components,	disruption	to	our	manufacturing	capabilities	or	disruptions	in	our	distribution	channel,	will	have	a disproportionately	large	impact	on	our	quarterly	financial	results,	as	we	may	be	unable	to	recover	in	time	to	ship	the	products	and	recognize	revenue	in	that	quarter.

In	addition,	this	lack	of	linearity	results	in	inefficiencies	in	our	financial	performance,	as	we	must	invest	in	capacity	and	resources	to	support	this	business	model, meaning	we	have	underutilized	operations	during	the	first	two	months	of	the	quarter.	We	also	must	maintain	additional	component	inventory	and	engage	in	pre-builds of	finished	goods	to	mitigate	the	impact	of	this	lack	of	linearity	and	meet	potential	last	month	demand.	This	could	result	in	our	carrying	excess	inventory,	which	is costly	and	may	result	in	increased	inventory	obsolesce	over	time.

We	no	longer	own	certain	logos	and	other	trademarks,	trade	names	and	service	marks,	including	MOTOROLA,	MOTO,	MOTOROLA	SOLUTIONS	and	the Stylized	M	logo	and	all	derivatives	and	formatives	thereof	("Motorola	Marks")	and	we	license	the	Motorola	Marks	from	Motorola	Trademark	Holdings,	LLC ("MTH"),	which	is	currently	owned	by	Motorola	Mobility,	a	subsidiary	of	Lenovo.	Our	joint	use	of	the	Motorola	Marks	could	result	in	product	and	market confusion	and	negatively	impact	our	ability	to	expand	our	business	under	the	Motorola	brand.	In	addition,	if	we	do	not	comply	with	the	terms	of	the license	agreement	we	could	lose	our	rights	to	the	Motorola	Marks.	Because	of	the	change	of	control	of	Motorola	Mobility,	which	is	now	owned	by	Lenovo, we	may	find	that	an	incompatible	third-party	owns	the	Motorola	Marks.

We	have	a	worldwide,	perpetual	and	royalty-free	license	from	MTH	to	use	the	Motorola	Marks	as	part	of	our	corporate	name	and	in	connection	with	the manufacture,	sale,	and	marketing	of	our	current	products	and	services.	The	license	of	the	Motorola	Marks	is	important	to	us	because	of	the	reputation	of	the	Motorola brand	for	our	products	and	services.	There	are	risks	associated	with	both	Motorola	Mobility	and	the	Company	using	the	Motorola	Marks	and	with	this	loss	of ownership.	As	both	Motorola	Mobility	and	the	Company	will	be	using	the	Motorola	Marks,	confusion	could	arise	in	the	market,	including	customer	confusion	regarding the	products	offered	by	and	the	actions	of	the	two	companies.	Motorola	Mobility	was	acquired	by	Lenovo	in	2014,	which	resulted	in	Lenovo	having	effective	control over	the	Motorola	Marks.	This	risk	could	increase	as	both	Motorola	Mobility's	and	our	products	continue	to	converge.	This	risk	could	increase	under	Lenovo's	control	if they	expand	their	use	of	the	Motorola	Marks.	Also,	any	negative	publicity	associated	with	either	company	in	the	future	could	adversely	affect	the	public	image	of	the other.	In	addition	because	our	license	of	the	Motorola	Marks	will	be	limited	to	products	and	services	within	our	specified	fields	of	use,	we	will	not	be	permitted	to	use the	Motorola	Marks	in	other	fields	of	use	without	the	approval	of	Motorola	Mobility,	which	is	now	controlled	by	Lenovo.	In	the	event	that	we	desire	to	expand	our business	into	any	other	fields	of	use,	we	may	need	to	do	so	with	a	brand	other	than	the	Motorola	brand.	Developing	a	brand	as	well-known	and	with	as	much	brand equity	as	Motorola	could	take	considerable	time	and	expense.	The	risk	of	needing	to	develop	a	second	brand	increases	as	Motorola	Mobility's	and	our	products continue	to	converge	and	if	our	business	expands	into	other	fields	of	use.	In	addition,	we	could	lose	our	rights	to	use	the	Motorola	Marks	if	we	do	not	comply	with	the terms	of	the	license	agreement.	Such	a	loss	could	negatively	affect	our	business,	results	of	operations	and	financial	condition.	Furthermore,	MTH	has	the	right	to license	the	brand	to	third-parties	and	either	Motorola	Mobility	or	licensed	third-parties	may	use	the	brand	in	ways	that	make	the	brand	less	attractive	for	customers	of Motorola	Solutions,	creating	increased	risk	that	Motorola	Solutions	may	need	to	develop	an	alternate	or	additional	brand.	In	2013	Motorola	Mobility	modified	certain Motorola	Marks	used	by	the	Company.	Motorola	Mobility	may	require	the	Company	to	adopt	the	use	of	the	modified	Motorola	Marks,	which	would	result	in	the Company	incurring	the	costs	of	rebranding.

In	addition,	neither	Motorola	Mobility	nor	Lenovo	are	prohibited	from	selling	the	Motorola	Marks.	In	the	event	of	a	liquidation	of	Motorola	Mobility	or	the	then owner	of	the	Motorola	Marks,	it	is	possible	that	a	bankruptcy	court	would	permit	the	Motorola	Marks	to	be	assigned	to	a	third-party.	While	our	right	to	use	the	Motorola Marks	under	our	license	should	continue	in	our	specified	field	of	use	in	such	situations,	it	is	possible	that	we	could	be	party	to	a	license	arrangement	with	a	third-party whose	interests	are	incompatible	with	ours,	thereby	potentially	making	the	license	arrangement	difficult	to	administer,	and	increasing	the	costs	and	risks	associated with	sharing	the	Motorola	Marks.	In	addition,	there	is	a	risk	that,	in	the	event	of	a	bankruptcy	of	Motorola	Mobility	or	the	then	owner	of	the	Motorola	Marks,	Motorola Mobility,	the	then	owner	or	its	bankruptcy	trustee	may	attempt	to	reject	the	license,	or	a	bankruptcy	court	may	refuse	to	uphold	the	license	or	certain	of	its	terms.	Such a	loss	could	negatively	affect	our	business,	results	of	operations	and	financial	condition.

# We	transferred	a	significant	portfolio	of	intellectual	property	rights,	including	patents,	to	Motorola	Mobility	and	Zebra	and	we	are	unable	to	leverage	these intellectual	property	rights	as	we	did	prior	to	the	distribution	of	Motorola	Mobility	or	the	sale	of	our	Enterprise	business.

We	contributed	approximately	17,200	granted	patents	and	approximately	8,000	pending	patent	applications	worldwide	to	Motorola	Mobility	in	connection	with the	distribution.	We	also	transferred	approximately	2,700	granted	patents	and	approximately	800	pending	patent	applications	to	Zebra	in	connection	with	the	sale	of the	Enterprise	business.	Although	we	have	a	perpetual,	royalty-free	license	to	these	patents	and	other	intellectual	property	rights,	we	no	longer	own	them.	As	a	result we	are	unable	to	leverage	these	intellectual	property	rights	for	purposes	of	generating	licensing	revenue	or	entering	into	favorable	licensing	arrangements	with	third- parties.	As	a	result	we	may	incur	increased	license	fees	or	litigation	costs.	Although	we	cannot	predict	the	extent	of	such	unanticipated	costs,	it	is	possible	such	costs could	negatively	impact	our	financial	results.

# Over	the	last	several	years	we	have	outsourced	portions	of	certain	business	operations	like	IT,	HR	information	systems,	manufacturing,	repair,

# distribution	and	engineering	services	and	expect	to	outsource	additional	business	operations	which	limits	our	control	over	these	business	operations and	exposes	us	to	additional	risk	as	a	result	of	the	actions	of	our	outsource	partners.

As	we	outsource	more	of	our	business	operations	we	are	not	able	to	directly	control	these	activities.	Our	outsource	partners	may	not	prioritize	our	business	over that	of	their	other	customers	and	they	may	not	meet	our	desired	level	of	quality,	performance,	service,	cost	reductions	or	other	metrics.	Failure	to	meet	key performance	indicators	may	result	in	our	being	in	default	with	our	customers.	In	addition,	we	may	rely	on	our	outsource	partners	to	secure	materials	from	our suppliers	with	whom	our	outsource	partners	may	not	have	existing	relationships	and	we	may	be	required	to	continue	to	manage	these	relationships	even	after	we outsource	certain	business	operations.

As	we	outsource	business	operations	we	become	dependent	on	the	IT	systems	of	our	outsource	partners,	including	to	transmit	demand	and	purchase	orders	to suppliers,	which	can	result	in	a	delay	in	order	placement.	In	addition,	in	an	effort	to	reduce	costs	and	limit	their	liabilities	our	outsource	partners	may	not	have	robust systems	or	make	commitments	in	as	timely	a	manner	as	we	require.

In	some	cases	the	actions	of	our	outsource	partners	may	result	in	our	being	found	to	be	in	violation	of	laws	or	regulations	like	import	or	export	regulations.	As many	of	our	outsource	partners	operate	outside	of	the	U.S.,	our	outsourcing	activity	exposes	us	to	information	security	vulnerabilities	and	increases	our	global	risks.	In addition,	we	are	exposed	to	the	financial	viability	of	our	outsource	partners.	Once	a	business	activity	is	outsourced	we	may	be	contractually	prohibited	from	or	may not	practically	be	able	to	bring	such	activity	back	within	the	Company	or	move	it	to	another	outsource	partner.	The	actions	of	our	outsource	partners	could	result	in reputational	damage	to	us	and	could	negatively	impact	our	financial	results.

# We	utilize	the	services	of	subcontractors	to	perform	under	many	of	our	contracts	and	the	inability	of	our	subcontractors	to	perform	in	a	timely	and compliant	manner	could	negatively	impact	our	performance	obligations	as	the	prime	contractor.

We	engage	subcontractors,	including	third-party	integrators	on	many	of	our	contracts	and	as	we	expand	our	solutions	and	services	business	our	use	of subcontractors	has	and	will	continue	to	increase.	Our	subcontractors	may	further	subcontract	performance	and	may	supply	third-party	products	and	software	from	a number	of	smaller	companies.	We	may	have	disputes	with	our	subcontractors,	including	disputes	regarding	the	quality	and	timeliness	of	work	performed	by	the subcontractor	or	its	subcontractors	and	the	functionality,	warranty	and	indemnities	of	products,	software	and	services	supplied	by	our	subcontractor.	We	are	not always	successful	in	passing	down	customer	requirements	to	our	subcontractors,	and	thus	in	some	cases	may	be	required	to	absorb	contractual	risks	from	our customers	without	corresponding	back-to-back	coverage	from	our	subcontractor.	Our	subcontractors	may	not	be	able	to	acquire	or	maintain	the	quality	of	the materials,	components,	subsystems	and	services	they	supply,	or	secure	preferred	warranty	and	indemnity	coverage	from	their	suppliers	which	might	result	in	greater product	returns,	service	problems,	warranty	claims	and	costs	and	regulatory	compliance	issues	and	could	harm	our	business,	financial	condition	and	results	of operations.

# Failure	of	our	suppliers,	subcontractors,	distributors,	resellers	and	representatives	to	use	acceptable	legal	or	ethical	business	practices	and	adhere	to our	Supplier	Code	of	Conduct	or	our	Human	Rights	Policy	could	negatively	impact	our	business.

It	is	our	policy	to	require	our	suppliers,	subcontractors,	distributors,	resellers,	and	third-party	sales	representatives	("TPSRs")	to	operate	in	compliance	with applicable	laws,	rules	and	regulations	regarding	working	conditions,	employment	practices,	environmental	compliance,	anti-corruption	and	trademark	and	copyright licensing.	However,	we	do	not	control	their	labor	and	other	business	practices.	If	one	of	our	suppliers,	subcontractors,	brokers,	distributors,	resellers,	or	TPSRs violates	labor	or	other	laws	or	implements	labor	or	other	business	practices	that	are	regarded	as	unethical,	the	shipment	of	finished	products	to	us	could	be interrupted,	orders	could	be	canceled,	relationships	could	be	terminated	and	our	reputation	could	be	damaged.	If	one	of	our	suppliers	or	subcontractors	fails	to procure	necessary	license	rights	to	trademarks,	copyrights	or	patents,	legal	action	could	be	taken	against	us	that	could	impact	the	salability	of	our	products	and expose	us	to	financial	obligations	to	a	third-party.	Any	of	these	events	could	have	a	negative	impact	on	our	sales	and	results	of	operations.

# Our	employees,	customers,	suppliers	and	outsource	partners	are	located	throughout	the	world	and,	as	a	result,	we	face	risks	that	other	companies	that are	not	global	may	not	face.

Most	of	our	products	that	are	manufactured	by	us	outside	the	U.S.	are	manufactured	in	Malaysia.	If	manufacturing	in	our	facility	in	Malaysia	is	disrupted,	our overall	capacity	would	be	significantly	reduced	and	sales	or	profitability	could	be	negatively	impacted.

Our	customers	and	suppliers	are	located	throughout	the	world.	In	2014,	approximately	39	percent	of	our	revenue	was	generated	outside	the	U.S.	In	addition,	we have	a	number	of	research	and	development,	administrative	and	sales	facilities	outside	the	U.S.	and	more	than	50%	of	our	employees	are	employed	outside	the	U.S. Most	of	our	suppliers'	operations	are	outside	the	U.S.	and	most	of	our	products	are	manufactured	outside	the	U.S.,	both	internally	and	by	third-parties.

Because	we	have	sizable	sales	and	operations,	including	outsourcing	and	procurement	arrangements,	outside	of	the	U.S.,	we	have	more	complexity	in	our operations	and	are	exposed	to	a	unique	set	of	global	risks	that	could	negatively	impact	sales	or	profitability,	including	but	not	limited	to:	(i)	currency	fluctuations,	(ii) import/export	regulations,	tariffs,	trade	barriers	and	trade	disputes,	customs	classifications	and	certifications,	including	but	not	limited	to	changes	in	classifications	or errors	or	omissions	related	to	such	classifications	and	certifications,	(iii)	changes	in	U.S.	and	non-U.S.	rules	related	to	trade,	environmental,	health

and	safety,	technical	standards,	consumer	and	intellectual	property	and	consumer	protection,	(iv)	longer	payment	cycles,	(v)	tax	issues,	such	as	tax	law	changes, variations	in	tax	laws	from	country	to	country	and	as	compared	to	the	U.S.,	obligations	under	tax	incentive	agreements,	difficulties	in	repatriating	cash	generated	or held	abroad	in	a	tax-efficient	manner	and	difficulties	in	securing	local	country	approvals	for	cash	repatriations,	(vi)	changes	in	foreign	exchange	regulations,	(vii) challenges	in	collecting	accounts	receivable,	(viii)	cultural	and	language	differences,	(ix)	employment	regulations	and	local	labor	conditions,	(x)	privacy	and	data protections	regulations	and	restrictions,	(xi)	difficulties	protecting	intellectual	property	in	foreign	countries,	(xii)	instability	in	economic	or	political	conditions,	including inflation,	recession	and	actual	or	anticipated	military	or	political	conflicts	and	terrorism,	(xiii)	natural	disasters,	(xiv)	public	health	issues	or	outbreaks,	(xv)	changes	in laws	or	regulations	that	negatively	impact	benefits	being	received	by	us	or	that	require	costly	modifications	in	products	sold	or	operations	performed	in	such	countries, and	(xvi)	litigation	in	foreign	court	systems	and	foreign	administrative	proceedings.

We	have	a	number	of	employees	in,	and	sell	our	products	and	services	throughout,	the	Middle	East	and	our	operations,	as	well	as	demand	for	our	products	and services,	could	be	negatively	impacted	by	political	conflicts	and	hostilities	in	this	region.	The	potential	for	future	unrest,	terrorist	attacks,	increased	global	conflicts, hostility	against	U.S.-based	multinational	companies	and	the	escalation	of	existing	conflicts	has	created	worldwide	uncertainties	that	have	negatively	impacted,	and may	continue	to	negatively	impact,	demand	for	certain	of	our	products.

We	also	are	subject	to	risks	that	our	operations	could	be	conducted	by	our	employees,	contractors,	representatives	or	agents	in	ways	that	violate	the	Foreign Corrupt	Practices	Act,	the	U.K.	Bribery	Act,	or	other	similar	anti-corruption	laws.	While	we	have	policies	and	procedures	to	comply	with	these	laws,	our	employees, contractors,	representatives	and	agents	may	take	actions	that	violate	our	policies.	Any	such	violations	could	have	a	negative	impact	on	our	business.	Moreover,	we face	additional	risks	that	our	anti-corruption	policies	and	procedures	may	be	violated	by	TPSRs	or	other	third-parties	that	help	sell	our	products	or	provide	other solutions	and	services,	because	such	representatives	or	agents	are	not	our	employees	it	is	more	difficult	to	oversee	their	conduct.

Many	of	our	components	and	some	of	our	products,	including	software,	are	developed	and/or	manufactured	by	third-parties	and	in	some	cases	designed by	third-parties	and	if	such	third-parties	lack	sufficient	quality	control,	change	the	design	of	components	or	if	there	are	significant	changes	in	the	financial or	business	condition	of	such	third-parties,	it	may	have	a	negative	impact	on	our	business.

We	rely	on	third-parties	to	develop	and/or	manufacture	many	of	our	components	and	some	of	our	finished	products,	and	to	design	certain	components	and finished	products,	as	well	as	provide	us	with	software	necessary	for	the	operation	of	those	products	and	we	may	increase	our	reliance	such	third-parties	in	the	future. We	could	have	difficulties	fulfilling	our	orders	and	our	sales	and	profits	could	decline	if:	(i)	we	are	not	able	to	engage	such	third-parties	with	the	capabilities	or capacities	required	by	our	business,	(ii)	such	third-parties	lack	sufficient	quality	control	and	fail	to	deliver	quality	components,	products,	services	or	software	on	time and	at	reasonable	prices	or	deliver	products,	services	or	software	that	do	not	meet	regulatory	or	industry	standards	or	requirements,	(iii)	if	there	are	significant changes	in	the	financial	or	business	condition	of	such	third-parties,	or	(iv)	if	we	have	difficulties	transitioning	operations	to	such	third-parties.

Because	of	the	long	life-cycle	of	many	of	our	products,	we	need	access	to	limited	quantities	of	components	for	manufacturing	and	repair	and	suppliers	have been	and	may	continue	to	be	unwilling	to	manufacture	such	components	or	may	only	do	so	at	high	prices.	Certain	key	component	suppliers	are	reducing	the expected	lifetime	of	key	components,	in	particular	semiconductor	and	electrical	components,	on	some	of	our	products	which	could	result	in	the	need	for	more	frequent product	redesigns	and	increased	engineering	costs	on	some	products	or	costly	last	time	buys,	which	may	negatively	impact	our	financial	performance.	In	addition,	we may	be	unable	to	meet	our	repair	obligations	to	our	customers.

# We	are	exposed	to	risks	under	large,	multi-year	system	and	solutions	and	services	contracts	that	may	negatively	impact	our	business.

We	enter	into	large,	multi-year	system	and	solutions	and	services	contracts	with	large	municipal,	state,	nation-wide	government	and	commercial	customers.	In some	cases	we	may	not	be	the	prime	contractor	and	may	be	dependent	on	other	third-parties	such	as	commercial	carriers	or	systems	integrators.	This	exposes	us	to risks,	including	among	others:	(i)	the	technological	risks,	especially	when	the	contracts	involve	new	technology,	(ii)	risk	of	defaults	by	third-parties	on	whom	we	are relying	for	products	or	service	as	part	of	our	offering	or	who	are	the	prime	contractors,	(iii)	financial	risks,	including	the	estimates	inherent	in	projecting	costs associated	with	large,	long-term	contracts,	the	impact	of	currency	fluctuations,	inflation,	and	the	related	impact	on	operating	results,	(iv)	cyber	security	risk,	especially in	managed	services	contracts	with	public	safety	and	commercial	customers	that	process	data,	and	(v)	political	risk,	especially	related	to	the	contracts	with government	customers.	In	addition,	multi-year	awards	from	governmental	customers	may	often	only	receive	partial	funding	initially	and	may	typically	be	cancelable	on short	notice	with	limited	penalties.	Recovery	of	front	loaded	capital	expenditures	in	long-term	managed	services	contracts	is	dependent	on	the	continued	viability	of such	customers.	The	termination	of	funding	for	a	government	program	or	insolvency	of	commercial	customer	could	result	in	a	loss	of	anticipated	future	revenue attributable	to	that	program,	which	could	have	an	adverse	impact	on	our	profitability.

# The	expansion	of	our	solutions	and	services	business	creates	new	competitors	and	new	and	increased	areas	of	risk	that	we	have	not	been	exposed	to	in the	past	and	that	we	may	not	be	able	to	properly	assess	or	mitigate.

We	plan	to	continue	to	expand	our	solutions	and	services	business	by	offering	additional	and	expanded	managed	services	for	existing	and	new	types	of customers,	such	as	designing,	building,	operating,	managing	and	in	some	cases	owning	a	public-safety	system	or	other	commercial	system.	The	offering	of	managed services	involves	the	integration	of	multiple	services,	multiple	vendors	and	multiple	technologies,	requiring	that	we	partner	with	other	solutions	and	services	providers, often	on	multi-year	projects.	In	some	cases	we	must	compete	with	a	company	in	some	business	areas	and	cooperate	with	the	same	company	in	other	business areas.	From	time	to	time	such	projects	may	require	that	we	form	a	joint	venture	with	or	engage	in	joint	development	with	our	partners.	Risks	associated	with expanding	our	managed	services	offerings	include:

•We	may	be	unable	to	recognize	revenue	from	the	sale	of	equipment	in	connection	with	managed	services	contracts	for	a	period	of	time,	which	may be	several	years.

•The	managed	services	business	is	one	characterized	by	large	subcontracting	arrangements	and	we	may	not	be	able	to	obtain	favorable	contract terms	or	adequate	indemnities	or	other	protections	from	our	subcontractors	to	adequately	mitigate	our	risk	to	our	customers.

•We	may	face	increasing	competition	from	traditional	system	integrators	and	the	defense	industry	as	solutions	and	services	contracts	become	larger and	more	complicated.

•Expansion	will	bring	us	into	contact	with	new	regulatory	requirements	and	restrictions,	such	as	data	residency	or	data	localization	obligations,	with which	we	will	have	to	comply	and	may	increase	the	costs	of	doing	business,	reduce	margins	and	delay	or	limit	the	range	of	new	solutions	and	services	which we	will	be	able	to	offer.

•We	may	be	required	to	agree	to	specific	performance	metrics	that	meet	the	customer's	requirement	for	network	security,	availability,	reliability, maintenance	and	support	and,	in	some	cases,	if	these	performance	metrics	are	not	met	we	may	not	be	paid.

# Our	success	depends	in	part	on	our	timely	introduction	of	new	products	and	technologies	and	our	results	can	be	impacted	by	the	effectiveness	of	our significant	investments	in	new	products	and	technologies.

The	markets	for	certain	of	our	products	are	characterized	by	changing	technologies	and	evolving	industry	standards.	In	some	cases	it	is	unclear	what	specific technology	will	be	adopted	in	the	market	or	what	delivery	model	will	prevail,	including	whether	public	safety	LTE	will	be	delivered	via	private	networks,	public	carriers or	some	combination	thereof.	In	addition,	new	technologies	such	as	voice	over	LTE	or	push-to-talk	clients	over	LTE	could	reduce	sales	of	our	traditional	products.	The shift	to	smart	public	safety	and	the	prevalence	of	data	in	our	customer's	use	cases	results	in	our	competing	in	a	more	fragmented	marketplace.	In	addition,	new technologies	and	new	competitors	continue	to	enter	our	markets	at	a	faster	pace	than	we	have	experienced	in	the	past,	resulting	in	increased	competition	from	non- traditional	suppliers,	including	public	carriers,	telecom	equipment	providers,	consumer	device	manufacturers	and	software	companies.	New	products	are	expensive	to develop	and	bring	to	market	and	additional	complexities	are	added	when	this	process	is	outsourced	as	we	have	done	in	certain	cases	or	as	we	increase	our	reliance on	third-party	content	and	technology.	Our	success	depends,	in	substantial	part,	on	the	timely	and	successful	introduction	of	new	products,	upgrades	and enhancements	of	current	products	to	comply	with	emerging	industry	standards,	laws	and	regulations,	such	as	China's	proprietary	technology,	PDT,	and	to	address competing	technological	and	product	developments	carried	out	by	our	competitors.	Developing	new	technologies	to	compete	in	a	specific	market	may	not	be financially	viable,	resulting	in	our	inability	to	compete	in	that	market.	The	R&D	of	new,	technologically-advanced	products	is	a	complex	and	uncertain	process requiring	high	levels	of	innovation	and	investment,	as	well	as	the	accurate	anticipation	of	technology	and	market	trends.	Many	of	our	products	and	systems	are complex	and	we	may	experience	delays	in	completing	development	and	introducing	new	products	or	technologies	in	the	future.	We	may	focus	our	resources	on technologies	that	do	not	become	widely	accepted	or	are	not	commercially	viable	or	involve	compliance	obligations	with	additional	areas	of	regulatory	requirements.

Our	results	are	subject	to	risks	related	to	our	significant	investment	in	developing	and	introducing	new	products.	These	risks	include	among	others:	(i)	difficulties and	delays	in	the	development,	production,	testing	and	marketing	of	products,	particularly	when	such	activities	are	done	through	third-parties,	(ii)	customer acceptance	of	products,	(iii)	the	development	of,	approval	of,	and	compliance	with	industry	standards	and	regulatory	requirements,	(iv)	the	significant	amount	of resources	we	must	devote	to	the	development	of	new	technologies,	and	(v)	the	ability	to	differentiate	our	products	and	compete	with	other	companies	in	the	same markets.

# If	the	quality	of	our	products	does	not	meet	our	customers'	expectations	or	regulatory	or	industry	standards,	then	our	sales	and	operating	earnings,	and ultimately	our	reputation,	could	be	negatively	impacted.

Some	of	the	products	we	sell	may	have	quality	issues	resulting	from	the	design	or	manufacture	of	the	product,	or	from	the	software	used	in	the	product. Sometimes,	these	issues	may	be	caused	by	components	we	purchase	from	other	manufacturers	or	suppliers.	Often	these	issues	are	identified	prior	to	the	shipment of	the	products	and	may	cause	delays	in	shipping	products	to	customers,	or	even	the	cancellation	of	orders	by	customers.	Sometimes,	we	discover	quality	issues	in the	products	after	they	have	been	shipped	to	our	customers,	requiring	us	to	resolve	such	issues	in	a	timely	manner	that	is	the	least	disruptive	to	our	customers, particularly	in	light	of	the	mission-critical	nature	of	our	communications	products.	Such	pre-shipment	and	post-shipment	quality	issues	can	have	legal	and	financial ramifications,	including:	(i)	delays	in	the	recognition	of	revenue,	loss	of	revenue	or	future	orders,	(ii)	customer-imposed	penalties	on	us	for	failure	to	meet	contractual requirements,	(iii)	increased	costs	associated	with	repairing	or	replacing	products,	and	(iv)	a	negative	impact	on	our	goodwill	and	brand	name	reputation.

In	some	cases,	if	the	quality	issue	affects	the	product's	performance,	safety	or	regulatory	compliance,	then	such	a	"defective"	product	may	need	to	be	"stop- shipped"	or	recalled.	Depending	on	the	nature	of	the	quality	issue	and	the	number	of	products	in	the	field,	it	could	cause	us	to	incur	substantial	recall	or	corrective	field action	costs,	in	addition	to	the	costs	associated	with	the	potential	loss	of	future	orders	and	the	damage	to	our	goodwill	or	brand	reputation.	In	addition,	we	may	be required,	under	certain	customer	contracts,	to	pay	damages	for	failed	performance	that	might	exceed	the	revenue	that	we	receive	from	the	contracts.	Recalls	and	field actions	involving	regulatory	non-compliance	could	also	result	in	fines	and	additional	costs.	Recalls	and	field	actions	could	result	in	third-party	litigation	by	persons	or companies	alleging	harm	or	economic	damage	as	a	result	or	the	use	of	the	products.

# We	have	completed	a	number	of	large	divestitures	over	the	last	several	years	and	have	ongoing	potential	liabilities	and	obligations	associated	with	those transactions	and	the	businesses	we	divested.	In	addition,	these	divestitures	have	resulted	in	less	diversity	of	our	business	and	our	customer	base,	which could	negatively	impact	our	financial	results	in	the	event	of	a	downturn	in	our	mission-critical	communications	business.

Over	the	last	several	years	we	have	spun-off	or	sold	a	number	of	large	businesses,	including	Motorola	Mobility,	our	Networks	business	and	our	Enterprise business.	In	connection	with	our	divestitures	we	typically	remain	liable	for	certain	pre-closing	liabilities	associated	with	the	divested	business,	such	as	pension liabilities,	taxes,	employment,	environmental	liabilities	and	litigation.	In	the	case	of	the	sale	of	our	Enterprise	business	we	agreed	to	a	multi-year	non-compete	which may	limit	our	ability	to	develop	and	sell	products	for	our	commercial	customers.	In	addition,	although	we	often	assign	contracts	associated	with	the	divested	business to	a	buyer	in	a	divestiture,	often	that	assignment	will	be	subject	to	the	consent	of	the	contractual	counterparty,	which	may	not	be	obtained	or	may	be	conditioned, resulting	in	the	company	remaining	liable	under	the	contract.	In	connection	with	our	divestitures	we	make	representations	and	warranties	and	agree	to	covenants relating	to	the	business	divested.	We	remain	liable	for	a	period	of	time	for	breaches	of	representations,	warranties	and	covenants	and	we	also	indemnify	buyers	in	the event	of	such	breaches	and	for	other	specific	risks.	Even	though	we	establish	reserves	for	any	expected	ongoing	liability	associated	with	divested	businesses,	those reserves	may	not	be	sufficient	if	unexpected	liabilities	arise	and	this	could	negatively	impact	our	financial	condition	and	future	results	of	operations.

Because	we	are	now	singularly	focused	on	mission-critical	communications	for	public	safety	and	commercial	customers	we	have	less	diversity	in	our	business and	our	customer	base.	A	downturn	in	this	business	could	have	a	greater	negative	impact	on	our	financial	results	than	when	we	were	a	more	diversified communications	provider.

# We	expect	to	continue	to	make	strategic	acquisitions	of	other	companies	or	businesses	and	these	acquisitions	introduce	significant	risks	and uncertainties,	including	risks	related	to	integrating	the	acquired	businesses	and	achieving	benefits	from	the	acquisitions.

In	order	to	position	ourselves	to	take	advantage	of	growth	opportunities	or	to	meet	other	strategic	needs	such	as	product	or	technology	gaps,	we	have	made, and	expect	to	continue	to	make,	strategic	acquisitions	that	involve	significant	risks	and	uncertainties.	These	risks	and	uncertainties	include:	(i)	the	difficulty	or	inability in	integrating	newly-acquired	businesses	and	operations	in	an	efficient	and	effective	manner,	particularly	in	light	of	the	fact	that	certain	of	our	enterprise	legacy information	systems	including	components	of	our	ERP	system	are	owned	by	Zebra	and	we	are	unable	to	make	significant	changes	to	these	systems	until	completion of	our	new	ERP	implementation,	(ii)	risks	associated	with	integrating	financial	reporting	and	internal	control	systems,	particularly	in	light	of	the	ERP	system	changes, (iii)	the	challenges	in	achieving	strategic	objectives,	cost	savings	and	other	benefits	from	acquisitions,	(iv)	the	risk	that	our	markets	do	not	evolve	as	anticipated	and that	the	technologies	acquired	do	not	prove	to	be	those	needed	to	be	successful	in	those	markets,	(v)	the	potential	loss	of	key	employees	of	the	acquired	businesses, (vi)	the	risk	of	diverting	the	attention	of	senior	management	from	our	operations,	(vii)	the	risks	of	entering	new	markets	in	which	we	have	limited	experience,	(viii) difficulties	in	integrating	information	technology	systems	and	other	business	processes	to	accommodate	the	acquired	businesses	and	(ix)	future	impairments	of goodwill	of	an	acquired	business.	In	particular,	failure	to	achieve	targeted	cost	and	revenue	synergies	could	negatively	impact	our	business	performance.

Certain	acquisition	candidates	in	the	industries	in	which	we	participate	may	carry	higher	relative	valuations	(based	on	revenues,	earnings,	cash	flow,	or	other relevant	multiples)	than	we	do.	This	is	particularly	evident	in	software	and	certain	services	businesses.	Acquiring	a	business	that	has	a	higher	relative	valuation	than Motorola	Solutions	may	be	dilutive	to	our	earnings.	In	addition,	we	may	not	pursue	opportunities	that	are	highly	dilutive	to	near-term	earnings.

Key	employees	of	acquired	businesses	may	receive	substantial	value	in	connection	with	a	transaction	in	the	form	of	cash	payments	for	their	ownership	interest, particularly	in	the	case	of	founders,	change-in-control	agreements,	acceleration	of	stock	options	and	the	lifting	of	restrictions	on	other	equity-based	compensation rights.	To	retain	such	employees	and	integrate	the	acquired	business,	we	may	offer	additional	retention	incentives,	but	it	may	still	be	difficult	to	retain	certain	key employees.

# We	face	many	risks	relating	to	intellectual	property	rights.

Our	business	will	be	harmed	if:	(i)	we,	our	customers	and/or	our	suppliers	are	found	to	have	infringed	intellectual	property	rights	of	third-parties,	(ii)	the intellectual	property	indemnities	in	our	supplier	agreements	are	inadequate	to	cover	damages	and	losses	due	to	infringement	of	third-party	intellectual	property	rights by	supplier	products,	(iii)	we	are	required	to	provide	broad	intellectual	property	indemnities	to	our	customers,	(iv)	our	intellectual	property	protection	is	inadequate	to protect	against	threats	of	misappropriation	from	internal	or	external	sources	or	otherwise	inadequate	to	protect	our	proprietary	rights,	or	(v)	our	competitors	negotiate significantly	more	favorable	terms	for	licensed	intellectual	property.	We	may	be	harmed	if	we	are	forced	to	make	publicly	available,	under	the	relevant	open-source licenses,	certain	internally	developed	software-related	intellectual	property	as	a	result	of	either	our	use	of	open-source	software	code	or	the	use	of	third-party	software that	contains	open-source	code.

Since	our	products	are	comprised	of	complex	technology,	much	of	which	we	acquire	from	suppliers	through	the	purchase	of	components	or	licensing	of software,	we	are	often	involved	in	or	impacted	by	assertions,	including	both	requests	for	licenses	and	litigation,	regarding	patent	and	other	intellectual	property	rights. Third-parties	have	asserted,	and	in	the	future	may	assert,	intellectual	property	infringement	claims	against	us	and	against	our	customers	and	suppliers.	Many	of	these assertions	are	brought	by	non-practicing	entities	whose	principle	business	model	is	to	secure	patent	licensing-based	revenue	from	product	manufacturing	companies. The	patent	holders	often	make	broad	and	sweeping	claims	regarding	the	applicability	of	their	patents	to	our	products,	seeking	a	percentage	of	sales	as	licenses	fees, seeking	injunctions	to	pressure	us	into	taking	a	license,	or	a	combination	thereof.	Defending	claims	may	be	expensive	and	divert	the	time	and	efforts	of	our management	and	employees.	Increasingly,	third-parties	have	sought	broad	injunctive	relief	which	could	limit	our	ability	to	sell	our	products	in	the	U.S.	or	elsewhere with	intellectual	property	subject	to	the	claims.	If	we	do	not	succeed	in	any	such	litigation,	we	could	be	required	to	expend	significant	resources	to	pay	damages, develop	non-infringing	products	or	to	obtain	licenses	to	the	intellectual	property	that	is	the	subject	of	such	litigation,	each	of	which	could	have	a	negative	impact	on	our financial	results.	However,	we	cannot	be	certain	that	any	such	licenses,	if	available	at	all,	will	be	available	to	us	on	commercially	reasonable	terms.	In	some	cases, we	might	be	forced	to	stop	delivering	certain	products	if	we	or	our	customer	or	supplier	are	subject	to	a	final	injunction.

We	attempt	to	negotiate	favorable	intellectual	property	indemnities	with	our	suppliers	for	infringement	of	third-party	intellectual	property	rights.	However,	there	is no	assurance	that	we	will	be	successful	in	our	negotiations	or	that	a	supplier's	indemnity	will	cover	all	damages	and	losses	suffered	by	us	and	our	customers	due	to the	infringing	products	or	that	a	supplier	will	choose	to	accept	a	license	or	modify	or	replace	its	products	with	non-infringing	products	which	would	otherwise	mitigate such	damages	and	losses.	Further,	we	may	not	be	able	to	participate	in	intellectual	property	litigation	involving	a	supplier	and	may	not	be	able	to	influence	any ultimate	resolution	or	outcome	that	may	negatively	impact	our	sales	if	a	court	enters	an	injunction	that	enjoins	the	supplier's	products	or	if	the	International	Trade Commission	issues	an	exclusionary	order	that	blocks	our	products	from	importation	into	the	U.S.	Intellectual	property	disputes	involving	our	suppliers	have	resulted	in our	involvement	in	International	Trade	Commission	proceedings	from	time	to	time.	These	proceedings	are	costly	and	entail	the	risk	that	we	will	be	subjected	to	a	ban on	the	importation	of	our	products	into	the	U.S.	solely	as	a	result	of	our	use	of	a	supplier's	components.

In	addition,	our	customers	increasingly	demand	that	we	indemnify	them	broadly	from	all	damages	and	losses	resulting	from	intellectual	property	litigation	against them.	These	demands	stem	from	the	increasing	trend	of	the	non-practicing	entities	that	engage	in	patent	enforcement	and	litigation	targeting	the	end	users	of	our products.	End	users	are	targeted	so	the	non-practicing	entities	can	seek	royalties	and	litigation	judgments	in	proportion	to	the	value	of	the	use	of	our	products,	rather than	in	proportion	to	the	cost	of	our	products.	Such	demands	can	amount	to	many	times	the	selling	price	of	our	products.

Our	patent	and	other	intellectual	property	rights	are	important	competitive	tools	and	may	generate	income	under	license	agreements.	We	regard	our	intellectual property	as	proprietary	and	attempt	to	protect	it	with	patents,	copyrights,	trademarks,	trade	secret	laws,	confidentiality	agreements	and	other	methods.	We	also generally	restrict	access	to	and	distribution	of	our	proprietary	information.	Despite	these	precautions,	it	may	be	possible	for	a	third-party	to	obtain	and	use	our proprietary	information	or	develop	similar	technology	independently.	In	addition,	effective	patent,	copyright,	trademark	and	trade	secret	protection	may	be	unavailable or	limited	in	certain	foreign	countries.	Unauthorized	use	of	our	intellectual	property	rights	by	third-parties	and	the	cost	of	any	litigation	necessary	to	enforce	our intellectual	property	rights	could	have	a	negative	impact	on	our	financial	results.

As	we	expand	our	business,	including	through	acquisitions,	and	compete	with	new	competitors	in	new	markets,	the	breadth	and	strength	of	our	intellectual property	portfolio	in	those	new	areas	may	not	be	as	developed	as	in	our	longer-standing	businesses.	This	may	expose	us	to	a	heightened	risk	of	litigation	and	other challenges	from	competitors	in	these	new	markets.	Further,	competitors	may	be	able	to	negotiate	significantly	more	favorable	terms	for	licensed	intellectual	property than	we	are	able	to,	which	puts	them	at	a	competitive	advantage.

# Tax	matters	could	have	a	negative	impact	on	our	financial	condition	and	results	of	operations.

We	are	subject	to	income	taxes	in	the	U.S.	and	numerous	foreign	tax	jurisdictions.	Our	provision	for	income	taxes	and	cash	tax	liability	may	be	negatively impacted	by:	(i)	changes	in	the	mix	of	earnings	taxable	in	jurisdictions	with	different	statutory	tax	rates,	(ii)	changes	in	tax	laws	and	accounting	principles,	(iii)	changes in	the	valuation	of	our	deferred	tax	assets	and	liabilities,	(iv)	failure	to	meet	commitments	under	tax	incentive	agreements,	(v)	discovery	of	new	information	during	the course	of	tax	return	preparation,	(vi)	increases	in	nondeductible	expenses,	or	(vii)	difficulties	in	repatriating	cash	held	abroad	in	a	tax-efficient	manner.

Tax	audits	may	also	negatively	impact	our	financial	condition	and	results	of	operations.	We	are	subject	to	continued	examination	of	our	income	tax	returns,	and tax	authorities	may	disagree	with	our	tax	positions	and	assess	additional	tax.	We	regularly	evaluate	the	likelihood	of	adverse	outcomes	resulting	from	these examinations	to	determine	the	adequacy	of	our	provision	for	income	taxes.	There	can	be	no	assurance	that	the	outcomes	from	these	continuing	examinations	will	not have	a	negative	impact	on	our	future	financial	condition	and	operating	results.

# Our	success	depends	in	part	upon	our	ability	to	attract,	retain	and	prepare	succession	plans	for	senior	management	and	key	employees.

The	performance	of	our	CEO,	senior	management	and	other	key	employees	is	critical	to	our	success.	If	we	are	unable	to	retain	talented,	highly	qualified	senior management	and	other	key	employees	or	attract	them	when	needed,	it	could	negatively	impact	us.	We	rely	on	the	experience	of	our	senior	management,	most	of	who have	been	with	the	Company	for	many	years	and	as	a	result	have	specific	knowledge	relating	to	us	and	our	industry	that	is	difficult	to	replace	and	competition	for management	with	experience	in	the	communications	industry	is	intense.	A	loss	of	the	CEO,	a	member	of	senior	management	or	key	employee	particularly	to	a competitor	could	also	place	us	at	a	competitive	disadvantage.	Further,	if	we	fail	to	adequately	plan	for	the	succession	of	our	CEO,	senior	management	and	other	key employees,	the	Company	could	be	negatively	impacted.

# It	may	be	difficult	for	us	to	recruit	and	retain	the	types	of	engineers	and	other	highly-skilled	employees	that	are	necessary	to	remain	competitive	and layoffs	of	such	skilled	employees	as	a	result	of	divestitures,	restructuring	activities	or	cost	reductions	may	benefit	our	competitors.

Competition	for	key	technical	personnel	in	high-technology	industries	is	intense.	As	we	expand	our	solutions	and	services	business	we	have	an	even	greater demand	for	technical	personnel	in	areas	like	software	development	than	we	have	historically	had	and	competition	for	such	resources	is	greater.	We	believe	that	our future	success	depends	in	large	part	on	our	continued	ability	to	hire,	assimilate,	retain	and	leverage	the	skills	of	qualified	engineers	and	other	highly-skilled	personnel needed	to	develop	successful	new	products	or	services.	We	may	not	be	as	successful	as	our	competitors	at	recruiting,	assimilating,	retaining	and	utilizing	these highly-skilled	personnel.	In	addition,	as	we	have	divested	businesses	and	restructured	our	operations	we	have,	in	some	cases,	had	to	layoff	engineers	and	other highly	skilled	employees.	If	these	employees	were	to	go	to	work	for	our	competitors	it	could	have	a	negative	impact	on	our	business.

# We	may	not	continue	to	have	access	to	the	capital	markets	for	financing	on	acceptable	terms	and	conditions,	particularly	if	our	credit	ratings	are downgraded.

From	time	to	time	we	access	the	capital	markets	to	obtain	financing.	Our	access	to	the	capital	markets	and	the	bank	credit	markets	at	acceptable	terms	and conditions	are	impacted	by	many	factors,	including:	(i)	our	credit	ratings,	(ii)	the	liquidity	of	the	overall	capital	markets,	(iii)	strength	and	credit	availability	in	the banking	markets,	and	(iv)	the	current	state	of	the	economy.	There	can	be	no	assurances	that	we	will	continue	to	have	access	to	the	capital	markets	or	bank	credit markets	on	terms	acceptable	to	us.

We	are	rated	investment	grade	by	all	three	national	rating	agencies.	Any	downward	changes	by	the	rating	agencies	to	our	credit	rating	may	negatively	impact the	value	and	liquidity	of	both	our	debt	and	equity	securities.	Under	certain	circumstances,	an	increase	in	the	interest	rate	payable	by	us	under	our	revolving	credit facility	could	result.	In	addition,	a	downgrade	in	our	credit	ratings	could	limit	our	ability	to:	(i)	access	the	capital	markets	or	bank	credit	markets,	(ii)	provide performance	bonds,	bid	bonds,	standby	letters	of	credit	and	surety	bonds,	(iii)	hedge	foreign	exchange	risk,	(iv)	fund	our	foreign	affiliates,	and	(v)	sell	receivables.	A downgrade	in	our	credit	rating	could	also	result	in	less	favorable	trade	terms	with	suppliers.	In	addition,	any	downgrades	in	our	credit	ratings	may	affect	our	ability	to obtain	additional	financing	in	the	future	and	may	affect	the	terms	of	any	such	financing.	Any	future	disruptions,	uncertainty	or	volatility	in	the	capital	markets	may result	in	higher	funding	costs	for	us	and	adversely	affect	our	ability	to	access	funds	and	other	credit	related	products.	In	addition,	we	may	avoid	taking	actions	that would	otherwise	benefit	us	or	our	stockholders,	such	as	engaging	in	certain	acquisitions	or	engaging	in	stock	repurchases,	that	would	negatively	impact	our	credit rating.

# Returns	on	pension	and	retirement	plan	assets	and	interest	rate	changes	could	affect	our	earnings	and	cash	flow	in	future	periods.

Although	we	engaged	in	pension	de-risking	activities	in	2014,	we	continue	to	have	large	underfunded	pension	obligations,	in	part	resulting	from	the	fact	that	we retained	almost	all	of	the	U.S.	pension	liabilities	and	a	major	portion	of	our	non-U.S.	pension	liabilities	following	our	divestitures,	including	the	distribution	of	Motorola Mobility,	the	sale	of	our	Networks	business	and	the	sale	of	our	Enterprise	business.	The	funding	position	of	our	pension	plans	is	affected	by	the	performance	of	the financial	markets,	particularly	the	equity	and	debt	markets,	and	the	interest	rates	used	to	calculate	our	pension	obligations	for	funding	and	expense	purposes. Minimum	annual	pension	contributions	are	determined	by	government	regulations	and	calculated	based	upon	our	pension	funding	status,	interest	rates,	and	other factors.	If	the	financial	markets	perform	poorly,	we	have	been	and	could	be	required	to	make	additional	large	contributions.	The	equity	and	debt	markets	can	be volatile,	and	therefore	our	estimate	of	future	contribution	requirements	can	change	dramatically	in	relatively	short	periods	of	time.	Similarly,	changes	in	interest	rates can	affect	our	contribution	requirements.	In	volatile	interest	rate	environments,	the	likelihood	of	material	changes	in	the	future	minimum	required	contributions increases.

# Changes	in	our	operations	or	sales	outside	the	U.S.	markets	could	result	in	lost	benefits	in	impacted	countries	and	increase	our	cost	of	doing	business.

We	have	entered	into	various	agreements	with	non-U.S.	governments,	agencies	or	similar	organizations	under	which	we	receive	certain	benefits	relating	to	its operations	and/or	sales	in	the	jurisdiction.	If	our	circumstances	change,	and	operations	or	sales	are	not	at	levels	originally	anticipated,	we	may	be	at	risk	of	having	to reimburse	benefits	already	granted,	and	losing	some	or	all	of	these	benefits	and	increasing	our	cost	of	doing	business.

# We	are	subject	to	a	wide	range	of	product	regulatory	and	safety,	consumer,	worker	safety	and	environmental	laws	that	continue	to	expand	and	could impact	our	ability	to	grow	our	business,	could	subject	us	to	unexpected	costs	and	liabilities	and	could	impact	our	financial	performance.

Our	operations	and	the	products	we	manufacture	and/or	sell	are	subject	to	a	wide	range	of	product	regulatory	and	safety,	consumer,	worker	safety	and environmental	laws.	Compliance	with	such	existing	or	future	laws	could	subject	us	to	future	costs	or	liabilities,	impact	our	production	capabilities,	constrict	our	ability	to sell,	expand	or	acquire	facilities,	restrict	what	products	and	services	we	can	offer,	and	generally	impact	our	financial	performance.	Some	of	these	laws	are environmental	and	relate	to	the	use,	disposal,	clean	up	of,	and	exposure	to	certain	substances.	For	example,	in	the	U.S.,	laws	often	require	parties	to	fund	remedial studies	or	actions	regardless	of	fault	and	often	times	in	response	to	action	or	omissions	that	were	legal	at	the	time	they	occurred.	We	continue	to	incur	disposal	costs and	have	ongoing	remediation	obligations.	Changes	to	environmental	laws	or	our	discovery	of	additional	obligations	under	these	laws	could	have	a	negative	impact on	our	financial	performance.

Laws	focused	on:	(i)	the	energy	efficiency	of	electronic	products	and	accessories,	(ii)	recycling	of	both	electronic	products	and	packaging,	(iii)	reducing	or eliminating	certain	hazardous	substances	in	electronic	products,	(iv)	and	the	transportation	of	batteries	continue	to	expand	significantly.	Laws	pertaining	to accessibility	features	of	electronic	products,	standardization	of	connectors	and	power	supplies,	the	transportation	of	lithium-ion	batteries	and	other	aspects	of	our products	are	also	proliferating.	There	are	also	demanding	and	rapidly	changing	laws	around	the	globe	related	to	issues	such	as	product	safety,	radio	interference, radio	frequency	radiation	exposure,	medical	related	functionality,	and	consumer	and	social	mandates	pertaining	to	use	of	wireless	or	electronic	equipment.	These laws,	and	changes	to	these	laws,	could	have	a	substantial	impact	on	whether	we	can	offer	certain	products,	solutions	and	services,	on	product	costs,	and	on	what capabilities	and	characteristics	our	products	or	services	can	or	must	include.

These	laws	could	impact	our	products	and	negatively	affect	our	ability	to	manufacture	and	sell	products	competitively.	We	expect	these	trends	to	continue.	In addition,	we	anticipate	that	we	will	see	increased	demand	to	meet	voluntary	criteria	related	to	reduction	or	elimination	of	certain	constituents	from	products,	increasing energy	efficiency,	and	providing	additional	accessibility.

# We	may	be	unable	to	obtain	components	and	parts	that	are	verified	to	be	Democratic	Republic	of	Congo	("DRC")	Conflict	Free,	which	could	result	in reputational	damage	if	we	disclose	that	our	products	include	minerals	that	have	been	identified	as	"not	found	to	be	DRC	conflict	free"	or	if	we	disclose that	we	are	unable	to	determine	whether	such	minerals	are	included	in	our	products.

The	Dodd-Frank	Wall	Street	Reform	and	Consumer	Protection	Act	included	disclosure	requirements	regarding	the	use	of	tin,	tantalum,	tungsten	and	gold	(which are	defined	as	"conflict	minerals")	in	our	products	and	if	the	origin	of	these	materials	were	from	the	DRC	or	an	adjoining	country.	If	the	minerals	originated	from	the DRC	or	an	adjoining	country	then	a	company	must	disclose	the	measures	it	has	taken	to	exercise	due	diligence	and	chain	of	custody	to	prevent	the	sourcing	of	such minerals	that	have	been	found	to	be	financing	conflict	in	the	DRC.	There	is	a	limited	pool	of	suppliers	who	can	provide	verifiable	DRC	Conflict	Free	components	and parts,	particularly	since	our	supply	chain	is	complex.	As	a	result,	we	may	be	required	to	publicly	disclose	that	we	are	not	currently	able	to	determine	if	the	products	we manufactured	in	2014	are	DRC	Conflict	Free.	For	future	reporting	years,	if	the	industry	systems	that	we	are	relying	on	are	not	mature	enough	for	us	to	make	a definitive	Conflict	Free	determination,	we	may	have	to	declare	our	products	as	"not	found	to	be	DRC	conflict	free,"	or	such	other	definitional	standard	as	determined by	the	SEC	and/or	the	judicial	system	and	we	may	face	reputational	challenges	with	our	customers,	other	stockholders	and	the	activist	community	as	a	result.	In addition	the	European	Union	is	in	the	process	of	drafting	conflict	minerals	legislation	which	may	have	an	impact	on	our	reporting	obligations	and	compliance programs	in	Europe.

# Item	1B:	Unresolved	Staff	Comments

None.

# Item	2:	Properties

Motorola	Solutions'	principal	executive	offices	are	located	at	1303	East	Algonquin	Road,	Schaumburg,	Illinois	60196.	Motorola	Solutions	also	operates manufacturing	facilities	and	sales	offices	in	other	U.S.	locations	and	in	many	other	countries.

As	of	December	31,	2014,	we:	(i)	owned	10	facilities	(manufacturing,	sales,	service	and	office),	seven	of	which	were	located	in	North	America	and	three	of	which were	located	in	other	countries;	(ii)	leased	157	facilities,	60	of	which	were	located	in	North	America	and	South	America	and	97	of	which	were	located	in	other countries;	and	(iii)	primarily	utilized	five	major	facilities	for	the	manufacturing	and	distribution	of	our	products,	located	in:	Penang,	Malaysia;	Schaumburg,	Illinois;	Elgin, Illinois;	Berlin,	Germany;	and	Reynosa,	Mexico.

We	generally	consider	the	productive	capacity	of	our	manufacturing	facilities	to	be	adequate	and	sufficient	for	our	requirements.	The	extent	of	utilization	of	each manufacturing	facility	varies	throughout	the	year.

In	2014,	a	substantial	portion	of	our	products	were	manufactured	in	facilities	in	our	owned	facilities	in	Malaysia,	Illinois,	and	Mexico.	Approximately	25%	of	our manufacturing,	based	on	volume,	is	done	by	a	small	number	of	non-affiliated	electronics	manufacturing	suppliers	and	distribution	and	logistics	services	providers, most	of	which	are	outside	the	U.S.	We	rely	on	these	third-party	providers	in	order	to	enhance	our	ability	to	lower	costs	and	deliver	products	that	meet	demand.	If manufacturing	in	Malaysia,	Illinois,	or	by	third-parties	were	disrupted,	our	overall	productive	capacity	could	be	significantly	reduced.

# Item	3:	Legal	Proceedings

We	are	a	defendant	in	various	suits,	claims	and	investigations	that	arise	in	the	normal	course	of	business.	In	the	opinion	of	management,	the	ultimate	disposition of	our	pending	legal	proceedings	will	not	have	a	material	adverse	effect	on	our

consolidated	financial	position,	liquidity	or	results	of	operations.	However,	an	unfavorable	resolution	could	have	a	material	adverse	effect	on	our	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	obtained	changes management's	opinion	of	the	ultimate	disposition.

# Item	4:	Mine	Safety	Disclosures

Not	applicable.

# Executive	Officers	of	the	Registrant

The	following	are	the	persons	who	were	the	executive	officers	of	Motorola	Solutions,	their	ages,	and	their	current	titles	as	of	February	13,	2015	and	the	positions they	have	held	during	the	last	five	years	with	the	Company:

Gregory	Q.	Brown;	age	54;	Chairman	and	Chief	Executive	Officer	since	May	3,	2011;	President	and	Chief	Executive	Officer	from	January	2011	to	May	2011;	Co- Chief	Executive	Officer	and	Chief	Executive	Officer	of	Broadband	Mobility	Solutions	business	from	August	2008	to	January	2011.

Gino	A.	Bonanotte;	age	50;	Executive	Vice	President	and	Chief	Financial	Officer	since	November	13,	2013;	Corporate	Vice	President	and	Acting	Chief	Financial Officer	from	August	2013	to	November	2013;	Corporate	Vice	President,	Finance,	Sales	and	Field	Operations,	from	October	2012	to	August	2013;	Corporate	Vice President,	Finance,	Product	and	Business	Operations	and	Americas	Field	Operations	from	September	2010	to	October	2012;	and	Vice	President,	Finance,	North America	&	Latin	America	Field	Operations,	Enterprise	Mobility	Solutions	business	from	December	2009	to	September	2010.

Eduardo	F.	Conrado;	age	48;	Senior	Vice	President,	and	Chief	Innovation	Officer	since	January	23,	2015;	Senior	Vice	President,	Marketing	and	IT	from	January 2013	to	January	2015;	Senior	Vice	President,	Chief	Marketing	Officer	from	January	2011	to	January	2013;	Senior	Vice	President	and	Chief	Marketing	Officer, Motorola	Solutions	business	from	September	2010	to	January	2011;	and	Senior	Vice	President,	Chief	Marketing	Officer,	Enterprise	Mobility	Solutions	business	and Home	&	Networks	Mobility	business	from	March	2009	to	September	2010.

Mark	S.	Hacker;	age	43;	Executive	Vice	President,	General	Counsel	and	Chief	Administrative	Officer	since	January	21,	2015;	Senior	Vice	President	and General	Counsel	from	June	2013	to	January	2015;	Corporate	Vice	President,	Law,	Sales	and	Product	Operations,	International	and	Legal	Operations	from	January 2013	to	June	2013;	Corporate	Vice	President,	Law,	Sales	and	Field	Operations	and	Legal	Operations	from	January	2012	to	January	2013;	Vice	President,	Sales	and Field	Operations	and	Legal	Operations	from	November	2011	to	January	2012;	Vice	President,	Legal	Operations	and	International	Law	from	April	2011	to	November 2011;	Vice	President,	Law	from	September	2010	to	April	2011;	Vice	President,	Enterprise	Mobility	Solutions	and	Networks	business,	from	August	2010	to	September 2010;	Vice	President,	Law,	Networks	business	from	April	2010	to	August	2010;	and	Vice	President	and	Lead	Counsel,	Home	and	Networks	Mobility	business	from March	2009	to	April	2010.

Kelly	S.	Mark;	age	43;	Corporate	Vice	President,	Strategy	since	July	25,	2011;	Corporate	Vice	President,	Strategy	and	Staff	Operations,	from	January	2011	to July	2011;	Corporate	Vice	President,	Strategy,	Motorola	Solutions	business,	from	September	2010	to	January	2011;	and	Vice	President,	Chief	of	Staff,	from	January 2008	to	September	2010.

Mark	F.	Moon;	age	51;	Executive	Vice	President	and	President,	Sales	and	Product	Operations	since	January	7,	2013;	Executive	Vice	President,	Sales	and	Field Operations	from	May	2011	to	January	2013;	Senior	Vice	President,	Sales	and	Field	Operations	from	January	2011	to	May	2011;	Senior	Vice	President,	Sales	and Field	Operations,	Motorola	Solutions	business	from	August	2010	to	January	2011;	and	Senior	Vice	President,	Worldwide	Field	Operations,	Enterprise	Mobility Solutions	business	from	April	2009	to	August	2010.

Robert	C.	Schassler;	age	51;	Executive	Vice	President,	Solutions	&	Services	since	May	2014;	Senior	Vice	President,	Government	Solutions	business	from January	2009	to	May	2014.

John	K.	Wozniak;	age	43;	Corporate	Vice	President	and	Chief	Accounting	Officer	since	November	3,	2009.

The	above	executive	officers	will	serve	as	executive	officers	of	Motorola	Solutions	until	the	regular	meeting	of	the	Board	of	Directors	in	May	2015	or	until	their respective	successors	are	elected.	There	is	no	family	relationship	between	any	of	the	executive	officers	listed	above.

# PART	II

# Item	5:	Market	for	Registrant's	Common	Equity,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity

# Securities

Motorola	Solutions'	common	stock	is	listed	on	the	New	York	and	Chicago	Stock	Exchanges.	The	number	of	stockholders	of	record	of	its	common	stock	on January	31,	2015	was	38,205.

Information	regarding	securities	authorized	for	issuance	under	equity	compensation	plans	is	incorporated	by	reference	to	the	information	under	the	caption "Equity	Compensation	Plan	Information"	of	Motorola	Solutions'	Proxy	Statement	for	the	2015	Annual	Meeting	of	Stockholders.	The	remainder	of	the	response	to	this Item	incorporates	by	reference	Note	16,	"Quarterly	and	Other	Financial	Data	(unaudited)"	of	the	Notes	to	Consolidated	Financial	Statements	appearing	under	"Item	8: Financial	Statements	and	Supplementary	Data.''

The	following	table	provides	information	with	respect	to	acquisitions	by	the	Company	of	shares	of	its	common	stock	during	the	quarter	ended	December	31, 2014.

# ISSUER	PURCHASES	OF	EQUITY	SECURITIES

| Period | (a)	Total	Number<br>of	Shares<br>Purchased | (b)	Average	Price<br>Paid	per<br>Share	(1) | (c)	Total	Number<br>of	Shares	Purchased<br>as	Part	of	Publicly<br>Announced	Plans<br>or	Program	(2) | (d)	Approximate	Dollar<br>Value	of	Shares	that<br>May	Yet	Be	Purchased<br>Under	the	Plans	or<br>Program	(2) |
| :--- | :--- | :--- | :--- | :--- |
| 9/28/14\tto\t10/25/14 | 3,596,438 | $60.97 | 3,596,438 | $414,128,579 |
| 10/26/14\tto\t11/23/14\t(3) | 14,414,401 | $65.74 | 14,414,401 | $4,466,227,450 |
| 11/24/14\tto\t12/31/14 | 3,934,678 | $65.10 | 3,934,678 | $4,210,081,265 |
| Total | 21,945,517 | $64.85 | 21,945,517 |  |

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

(2) Through	actions	taken	on	July	28,	2011,	January	30,	2012,	July	25,	2012,	July	22,	2013,	and	November	4,	2014	the	Board	of	Directors	has	authorized	the Company	to	repurchase	an	aggregate	amount	of	up	to	$12.0	billion	of	its	outstanding	shares	of	common	stock	(the	"share	repurchase	program").	The	share repurchase	program	does	not	have	an	expiration	date.

(3) On	November	4,	2014	the	Company	entered	into	a	stock	purchase	agreement	with	ValueAct	to	purchase	11,319,047	shares	of	the	Company's	common	stock.

# PERFORMANCE	GRAPH

The	following	graph	compares	the	five-year	cumulative	total	returns	of	Motorola	Solutions,	Inc.,	the	S&P	500	Index	and	the	S&P	Communications	Equipment

# Index.

This	graph	assumes	$100	was	invested	in	the	stock	or	the	indices	on	December	31,	2009	and	reflects	the	payment	of	dividends,	including	the	Company's distribution	to	its	shareholders	of	one	share	of	Motorola	Mobility	for	every	eight	shares	of	its	common	stock	on	January	4,	2011.	For	purposes	of	this	graph,	the Motorola	Mobility	distribution	is	treated	as	a	dividend	of	$26.46	per	share	(post	the	1-for-7	reverse	stock	split	announced	on	the	same	day,	January	4,	2011)	paid	at the	close	of	business	January	4,	2011.

# Item	6:	Selected	Financial	Data

|  |  | Years	Ended	December	31 | Years	Ended	December	31 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tmillions,\texcept\tper\tshare\tamounts) | 2014 | 2013 | 2012 | 2011 | 2010 |
| Operating\tResults |  |  |  |  |  |
| Net\tsales | $5,881 | $6,227 | $6,269 | $5,738 | $5,482 |
| Operating\tearnings\t(loss) | (1,006) | 947 | 920 | 598 | 591 |
| Earnings\t(loss)\tfrom\tcontinuing\toperations,\tnet\tof\ttax* | (697) | 933 | 670 | 582 | 125 |
| Per\tShare\tData\t(in\tdollars) |  |  |  |  |  |
| Diluted\tearnings\t(loss)\tfrom\tcontinuing\toperations\tper\tcommon\tshare* | $(2.84) | $3.45 | $2.25 | $1.71 | $0.37 |
| Earnings\tper\tdiluted\tcommon\tshare* | 5.29 | 4.06 | 2.96 | 3.41 | 1.87 |
| Diluted\tweighted\taverage\tcommon\tshares\toutstanding\t(in\tmillions) | 245.6 | 270.5 | 297.4 | 339.7 | 338.1 |
| Dividends\tdeclared\tper\tshare | $1.30 | $1.14 | $0.96 | $0.22 | $— |
| Balance\tSheet |  |  |  |  |  |
| Total\tassets | $10,423 | $11,851 | $12,679 | $13,929 | $25,577 |
| Total\tlong-term\tdebt | 3,400 | 2,461 | 1,863 | 1,535 | 2,703 |
| Other\tData |  |  |  |  |  |
| Capital\texpenditures | $181 | $169 | $170 | $165 | $172 |
| %\tof\tsales | 3.1% | 2.7% | 2.7% | 2.9% | 3.1% |
| Research\tand\tdevelopment\texpenditures | $681 | $761 | $790 | $778 | $791 |
| %\tof\tsales | 11.6% | 12.2% | 12.6% | 13.6% | 14.4% |

# Item	7:	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations

The	following	is	a	discussion	and	analysis	of	our	financial	position	as	of	December	31,	2014	and	2013	and	results	of	operations	for	each	of	the	three	years	in the	period	ended	December	31,	2014.	This	commentary	should	be	read	in	conjunction	with	our	consolidated	financial	statements	and	the	notes	thereto	appearing under	"Item	8:	Financial	Statements	and	Supplementary	Data."

# Executive	Overview

# Recent	Developments

On	April	14,	2014,	we	entered	into	a	Master	Acquisition	Agreement	(the	"Acquisition	Agreement")	with	Zebra	Technologies	Corporation	to	sell	our	Enterprise business	for	$3.5	billion	in	cash.	The	transaction	closed	on	October	27,	2014.	As	a	result	of	the	sale,	we	have	reported	the	Enterprise	business	as	a	discontinued operation	in	our	consolidated	financial	statements	and	footnotes	for	all	periods	presented.

# Our	Business

We	conduct	our	business	globally	and	manage	it	by	two	segments:

Products:	The	Products	segment	offers	an	extensive	portfolio	of	infrastructure,	devices,	accessories,	and	software.	The	primary	customers	of	the Products	segment	are	government,	public	safety	and	first-responder	agencies,	municipalities,	and	commercial	and	industrial	customers	who	operate	private communications	networks	and	manage	a	mobile	workforce.	Our	Products	segment	is	comprised	of	Devices	and	Systems.	Devices	includes	two-way	portable and	vehicle	mounted	radios,	accessories,	and	software	features	and	upgrades.	Systems	includes	the	radio	network	core	and	central	processing	software, base	stations,	consoles,	repeaters,	and	software	applications	and	features.	In	2014,	the	segment's	net	sales	were	$3.8	billion,	representing	65%	of	our consolidated	net	sales.

Services:	The	Services	segment	provides	a	full	set	of	service	offerings	for	government,	public	safety	and	commercial	communication	networks including:	(i)	Integration	services,	(ii)	Lifecycle	Support	services,	(iii)	Managed	services,	(iv)	Smart	Public	Safety	Solutions,	and	(v)	iDEN	services.	Integration services	includes	implementation,	optimization,	and	integration	of	networks,	devices,	software,	and	applications.		Lifecycle	Support	services	includes	lifecycle planning,	software	and	hardware	maintenance,	security	patches	and	upgrades,	call	center	support,	network	monitoring,	and	repair	services.		Managed services	includes	managing	and	operating	customer	systems	and	devices	at	defined	services	levels.	Smart	Public	Safety	Solutions	includes	software	and hardware	solutions	for	our	customers'	"Command	&	Control"	centers	providing	video	monitoring	support,	data	analytics,	and	content	management	with	the objective	of	enabling	smart	policing.	iDEN	services	consists	primarily	of	hardware	and	software	maintenance	services	for	our	legacy	iDEN	customers.	In 2014,	the	segment's	net	sales	were	$2.1	billion,	representing	35%	of	our	consolidated	net	sales.

# What	were	our	2014	financial	results?

•We	had	an	operating	loss	of	$1.0	billion	in	2014,	compared	to	operating	earnings	of	$947	million	in	2013.	Included	in	the	2014	operating	loss	was	a	$1.9 billion	pension	settlement	loss,	including	related	expenses.

•Loss	from	continuing	operations	was	$697	million,	or	$(2.84)	per	diluted	common	share	in	2014,	compared	to	earnings	of	$933	million,	or	$3.45	per	diluted common	share	in	2013.

•Cash	used	for	operating	activities	was	$685	million	in	2014,	compared	to	cash	provided	by	operating	activities	of	$555	million	in	2013.	We	contributed	$1.3 billion	to	our	pension	plans	during	2014,	compared	to	$182	million	in	2013.

•We	provided	cash	to	shareholders	through	repurchases	of	$2.5	billion	in	shares	and	$318	million	in	cash	dividends	during 2014.

# What	were	the	financial	results	for	our	two	segments	in 2014?

•In	the	Products	segment,	net	sales	were	$3.8	billion	in	2014,	a	decrease	of	$302	million,	or	7%,	compared	to	$4.1	billion	in	2013.	On	a	geographic	basis,	net sales	decreased	in	North	America,	Latin	America	and	Asia	Pacific	and	Middle	East	("APME")	and	increased	in	Europe	and	Africa	("EA")	compared	to	2013. Operating	losses	were	$667	million	in	2014,	compared	to	operating	earnings	of	$639	million	in	2013.	Operating	margin	decreased	in	2014	to	(17.5)%	from 15.6%	in	2013.	Approximately	$1.3	billion	of	pension	settlement	losses	were	allocated	to	the	Products	segment	in	2014.

•In	the	Services	segment,	net	sales	were	$2.1	billion	in	2014,	a	decrease	of	$44	million,	or	2%,	compared	to	$2.1	billion	in	2013.	On	a	geographic	basis,	net sales	decreased	in	North	America,	Latin	America	and	APME	and	increased	in	EA,	compared	to	2013.	Operating	losses	were	$339	million	in	2014,	compared to	operating	earnings	of	$308	million	in

2013.	Operating	margin	decreased	in	2014	to	(16.3)%	from	14.5%	in	2013.	Approximately	$584	million	of	pension	settlement	losses	were	allocated	to	the Services	segment	in	2014.

# What	were	our	major	accomplishments	in	2014?

2014	was	a	transformational	year	both	structurally	and	financially.	In	addition	to	selling	our	Enterprise	business	for	$3.5	billion,	we	restructured	our	operations and	financial	profile	to	become	a	more	focused,	streamlined	business.	We	had	pockets	of	growth	in	2014,	most	notably	in	EA,	while	the	North	America	downturn during	the	first	half	of	the	year	pressured	overall	top-line	growth.	North	America	ended	2014	with	growth	driven	by	record	fourth	quarter	sales	and	backlog.	Finally,	our overall	financial	profile	improved	with	a	lower	structural	cost	base,	growing	backlog	position,	significantly	lower	share	count	and	a	material	reduction	in	our	pension obligations,	reducing	volatility.

# Structural	highlights

•Sold	our	Enterprise	business	for	$3.5	billion,	enabling	us	to	focus	on	the	core	government	and	public	safety	mission-critical	communications	business	and associated	expansion	opportunities;

•De-risked	our	U.S.	Pension	plan	by	significantly	reducing	the	total	liability	of	the	plan	and	cutting	the	number	of	participants	by	approximately	half,	with	the	effect of	reducing	expected	future	contributions	and	volatility;

•Reduced	operating	expenses	by	more	than	$200	million	as	compared	to	2013,	including	reorganizing	our	R&D	and	SG&A	functions.	This	reorganization	both reduced	costs	and	enabled	efficiencies	that	shifted	more	investment	into	key	areas	such	as	Services	and	Public	Safety	LTE	solutions;	and

•Returned	approximately	$2.9	billion	in	capital	to	shareholders	through	share	repurchases	and dividends.

# Business	highlights

•Services	backlog	up	over	$250	million	versus	2013, including:

◦Significant	growth	in	multi-year	software	&	hardware	maintenance contracts;

◦Significant	growth	in	managed	services	orders	and	pipeline	opportunities;

◦Won	six	public	safety	accounts	for	our	Smart	Public	Safety Solutions.

•Awarded	largest	public	safety	LTE	system	in	the	world	for	$175 million;

•North	America	ended	2014	with	record	fourth	quarter	sales	and	orders; and

•EA	grew	sales	5%	year-over-year	on	a	difficult comparison.

# Looking	Forward

Entering	2015,	we	believe	we	are	well-positioned	to	compete	in	both	our	core	markets	and	adjacent	growth	areas.	We	have	a	broad,	compelling	product	and services	portfolio	specifically	tailored	for	our	mission-critical	communications	customer	base	that	spans	many	layers	of	governments,	public	safety,	and	first responders,	as	well	as	commercial	and	industrial	customers	in	a	number	of	key	verticals.	As	we	add	new	products,	features,	and	software	upgrades,	we	ensure	our solutions	are	interoperable	and	backward-compatible,	enabling	customers	to	confidently	invest	for	their	future	needs	while	allowing	them	to	utilize	their	prior investment	in	our	technology.

Our	backlog	position	has	improved	as	compared	to	last	year,	and	we	believe	the	funding	environment	of	our	largest	government	customers	and	the	economics surrounding	our	commercial	customers	appears	to	be	relatively	healthy,	although	we	are	experiencing	some	challenges	relating	to	currency	fluctuations,	particularly in	Europe	and	Asia.

We	expect	our	core	business	serving	existing	private	network	customers	to	continue	to	provide	opportunity	for	growth	into	new	systems,	as	there	are	thousands of	old,	analog	systems	still	being	used	today	that	require	upgrades	for	customers	to	experience	full	voice,	data	and	video	capabilities.	These	systems	are	typically converted	from	analog	into	new	digital	systems,	and	are	upgraded	for	reasons	that	include:	spectrum-efficiency	mandates,	capacity	constraints,	coverage	expansion, or	new	feature	upgrades.	We	will	continue	to	offer	devices	and	systems	that	meet	our	customers'	specific	needs	for	private	mission-critical	communications	around the	world.

Supplementing	our	traditional	core	business	is	our	Services	business,	which	has	been	a	focus	area	for	us	in	recent	years.	As	communication	networks	have become	increasingly	complex,	software-centric,	and	data-driven,	we	have	shifted	our	offerings	to	align	with	this	technology	trend,	and	our	customers	have	shown interest	in	these	offerings.	Thus,	we	expect	to	continue	to	see	growing	demand	for	our	Managed	services,	Lifecycle	Support	services	offerings,	and	Smart	Public Safety	Solutions.	These	services	offerings	help	customers	manage,	support,	and	upgrade	their	networks	as	well	as	utilize	features,	applications,	and	data	in	new ways	including	predictive	policing,	proactive	support,	or	smarter	response	strategies.	We	expect	our	overall	revenue	mix	to	continue	to	shift	towards	services overtime.

Another	key	technology	trend	complementing	our	existing	business	is	the	use	of	broadband	LTE	by	our	customers.	We	have	been	proactively	investing	in	next generation	public	safety	broadband	solutions	for	years,	as	we	believe	public	safety	LTE	solutions	are	the	next	generation	tool	for	our	public	safety	first-responder customers.	We	believe	our	expertise	in	both	public	and	private	networks	makes	us	uniquely	qualified	to	provide	these	LTE	solutions	to	this	customer	base.	We	have won	the	three

largest	public	safety	LTE	network	deals	awarded	and	we	expect	these	deals,	among	others,	to	begin	to	generate	revenue	in	2015.

We	expect	our	iDEN	revenues	to	continue	to	decline	in	accordance	with	our	contractual	service	arrangements	over	the	next	two	to	three	years.	The	majority	of iDEN	sales	are	accounted	for	in	our	Services	segment.

We	remain	committed	to	employing	disciplined	financial	policies,	including	an	additional	reduction	of	over	$100	million	in	selling,	general,	administrative, research,	and	development	expenses	in	2015,	brining	our	cumulative	reduction	in	these	operating	expenses	to	over	$300	million	during	2014	and	2015.	We	continue to	explore	opportunities	to	transition	our	capital	structure	in	a	way	that	is	reflective	of	our	ability	to	generate	solid	operating	cash	flow	and	prioritize	targeted investments	in	the	business.	We	expect	to	continue	the	quarterly	dividends	that	were	initiated	in	2011	and	intend	to	continue	to	invest	organically	in	capital expenditures	and	R&D.	We	will	also	evaluate	acquisition	opportunities	along	with	the	opportunities	to	return	capital	to	shareholders	via	share	repurchases	in accordance	with	our	share	repurchase	program.	As	of	December	31,	2014,	we	had	approximately	$4.2	billion	of	authority	available	for	share	repurchases.

# Results	of	Operations

# Years	ended	December	31

|  |  |  | Years	ended	December	31 | Years	ended	December	31 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (Dollars\tin\tmillions,\texcept\tper\tshare\tamounts) | 2014 | %\tof\nSales\t** | 2013 | %\tof\nSales\t** | 2012 | %\tof\nSales\t** |
| Net\tsales\tfrom\tproducts | $3,807 |  | $4,109 |  | $4,236 |  |
| Net\tsales\tfrom\tservices | 2,074 |  | 2,118 |  | 2,033 |  |
| Net\tsales | 5,881 |  | 6,227 |  | 6,269 |  |
| Costs\tof\tproduct\tsales | 1,678 | 44.1\t% | 1,808 | 44.0\t% | 1,795 | 42.4\t% |
| Costs\tof\tservices\tsales | 1,372 | 66.2\t% | 1,310 | 61.9\t% | 1,280 | 63.0\t% |
| Costs\tof\tsales | 3,050 | 51.9\t% | 3,118 | 50.1\t% | 3,075 | 49.1\t% |
| Gross\tmargin | 2,831 | 48.1\t% | 3,109 | 49.9\t% | 3,194 | 50.9\t% |
| Selling,\tgeneral\tand\tadministrative\texpenses | 1,184 | 20.1\t% | 1,330 | 21.4\t% | 1,472 | 23.5\t% |
| Research\tand\tdevelopment\texpenditures | 681 | 11.6\t% | 761 | 12.2\t% | 790 | 12.6\t% |
| Other\tcharges | 1,972 | 33.5\t% | 71 | 1.1\t% | 12 | 0.2\t% |
| Operating\tearnings\t(loss) | (1,006) | (17.1)% | 947 | 15.2\t% | 920 | 14.7\t% |
| Other\tincome\t(expense): |  |  |  |  |  |  |
| Interest\texpense,\tnet | (126) | (2.1)% | (113) | (1.8)% | (66) | (1.1)% |
| Gains\ton\tsales\tof\tinvestments | 5 | 0.1\t% | 37 | 0.6\t% | 26 | 0.4\t% |
| Other | (34) | (0.6)% | 9 | 0.1\t% | 1 | —\t% |
| Total\tother\texpense | (155) | (2.6)% | (67) | (1.1)% | (39) | (0.6)% |
| Earnings\t(loss)\tfrom\tcontinuing\toperations\tbefore\tincome\ntaxes | (1,161) | (19.7)% | 880 | 14.1\t% | 881 | 14.1\t% |
| Income\ttax\texpense\t(benefit) | (465) | (7.9)% | (59) | (0.9)% | 211 | 3.4\t% |
| Earnings\t(loss)\tfrom\tcontinuing\toperations | (696) | (11.8)% | 939 | 15.1\t% | 670 | 10.7\t% |
| Less:\tEarnings\tattributable\tto\tnoncontrolling\tinterests | 1 | —\t% | 6 | 0.1\t% | — | —\t% |
| Earnings\t(loss)\tfrom\tcontinuing\toperations* | (697) | (11.9)% | 933 | 15.0\t% | 670 | 10.7\t% |
| Earnings\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 1,996 | 33.9\t% | 166 | 2.7\t% | 211 | 3.4\t% |
| Net\tearnings* | $1,299 | 22.1\t% | $1,099 | 17.6\t% | $881 | 14.1\t% |
| Earnings\t(loss)\tper\tdiluted\tcommon\tshare*: |  |  |  |  |  |  |
| Continuing\toperations | $(2.84) |  | $3.45 |  | $2.25 |  |
| Discontinued\toperations | 8.13 |  | 0.61 |  | 0.71 |  |
| Earnings\tper\tdiluted\tcommon\tshare* | $5.29 |  | $4.06 |  | $2.96 |  |

# Results	of	Operations—2014	Compared	to	2013

# Net	Sales

Net	sales	were	$5.9	billion	in	2014,	down	$346	million,	or	6%,	compared	to	$6.2	billion	in	2013.	The	decrease	in	net	sales	reflects	a	$302	million,	or	7%, decrease	in	the	Products	segment	driven	by	declines	in:	(i)	North	America	and	APME,	reflecting	lower	devices	and	systems	sales	and	(ii)	Latin	America,	reflecting lower	devices	sales,	partially	offset	by	single-digit	growth	in	EA

as	a	result	of	higher	devices	sales.	In	addition,	the	decrease	in	net	sales	includes	a	$44	million,	or	2%,	decrease	in	net	sales	relating	to	the	Services	segment	driven by	declines	in:	(i)	North	America,	as	a	result	of	declines	in	iDEN	services	and	integration	services,	(ii)	APME,	reflecting	lower	sales	in	Lifecycle	Support	services	and Integration	services,	and	(iii)	Latin	America,	reflecting	a	decrease	in	iDEN	services,	partially	offset	by	an	increase	in	EA,	as	a	result	of	increased	Integration	and Managed	services	sales.	Sales	in	2014	were	positively	impacted	in	the	fourth	quarter	by	increased	order	activity	and	faster-than-expected	conversion	of	certain orders.

# Gross	Margin

Gross	margin	was	$2.8	billion,	or	48.1%	of	net	sales	in	2014,	compared	to	$3.1	billion,	or	49.9%	of	net	sales,	in	2013.	The	decrease	in	gross	margin	percentage is	driven	primarily	by:	(i)	a	decline	in	gross	margin	as	a	percentage	of	sales	in	North	America	and	Latin	America,	as	a	result	of	lower	net	sales	in	iDEN	services	which have	a	slightly	higher	gross	margin	percentage	compared	to	the	rest	of	the	Services	portfolio	and	(ii)	a	decline	in	gross	margin	as	a	percentage	of	sales	in	EA,	as	a result	of	the	mix	of	projects	in	the	field.

# Selling,	General	and	Administrative	Expenses

Selling,	general	and	administrative	("SG&A")	expenses	decreased	11%	to	$1.2	billion,	or	20.1%	of	net	sales	in	2014,	compared	to	$1.3	billion,	or	21.4%	of	net sales	in	2013.	The	decrease	in	SG&A	expenditures	is	primarily	due	to:	(i)	the	reduction	of	sales	support	costs	by	lowering	our	overall	non-quota	carrying	employee base,	(ii)	lower	pension	expenses,	(iii)	lower	incentive	compensation	expenses,	and	(iv)	reduced	costs	through	the	increased	use	of	centralized	services.

# Research	and	Development	Expenditures

R&D	expenditures	decreased	11%	to	$681	million,	or	11.6%	of	net	sales	in	2014,	compared	to	$761	million,	or	12.2%	of	net	sales	in	2013.	The	decrease	in	R&D expenditures	is	primarily	due	to:	(i)	headcount	reductions	enacted	during	previous	periods,	(ii)	lower	incentive	compensation	expenses,	(iii)	the	consolidation	of	testing processes	and	lab	sites,	and	(iv)	the	movement	of	employees	to	lower	cost	work	sites.

# Other	Charges

We	recorded	net	charges	of	$2.0	billion	in	Other	charges	in	2014,	compared	to	net	charges	of	$71	million	in	2013.	The	charges	in	2014	included:	(i)	a	$1.9	billion charge	related	to	the	settlement	of	a	U.S.	pension	plan,	(ii)	$64	million	of	net	reorganization	of	business	charges,	and	(iii)	$8	million	of	legal	settlement	charges, partially	offset	by	a	$21	million	gain	on	the	sale	of	a	building	and	land.	The	charges	in	2013	included	$70	million	of	charges	related	to	the	reorganization	of	business. The	net	reorganization	of	business	charges	and	the	settlement	of	a	U.S.	pension	plan	are	discussed	in	further	detail	in	the	"Reorganization	of	Businesses"	and "Liquidity	and	Capital	Resources"	sections,	respectively.

# Net	Interest	Expense

Net	interest	expense	was	$126	million	in	2014,	compared	to	net	interest	expense	of	$113	million	in	2013.	Net	interest	expense	in	2014	included	interest	expense of	$147	million,	partially	offset	by	interest	income	of	$21	million.	Net	interest	expense	in	2013	included	interest	expense	of	$132	million,	partially	offset	by	interest income	of	$19	million.	The	increase	in	interest	expense	in	2014	compared	to	2013	is	primarily	attributable	to	an	increase	in	average	debt	outstanding	during	2014 compared	to	2013.

# Gains	on	Sales	of	Investments

Gains	on	sales	of	investments	were	$5	million	in	2014,	compared	to	$37	million	in	2013.	These	gains	consist	of	gains	on	the	sale	of	multiple	equity	investments	in both	2014	and	2013.

# Other

Net	Other	expense	was	$34	million	in	2014,	compared	to	net	Other	income	of	$9	million	in	2013.	The	net	Other	expense	in	2014	was	primarily	comprised	of:	(i) a	$37	million	loss	on	the	extinguishment	of	debt,	(ii)	a	$7	million	foreign	currency	loss,	and	(iii)	$6	million	of	other	non-operating	losses,	partially	offset	by	$16	million	of equity	method	investment	earnings.	Net	Other	income	in	2013	was	primarily	comprised	of:	(i)	$11	million	of	other	non-operating	gains	and	(ii)	$10	million	of	equity method	investment	earnings,	partially	offset	by:	(i)	a	$9	million	foreign	currency	loss	and	(ii)	investment	impairments	of	$3	million.

# Effective	Tax	Rate

We	recorded	a	$465	million	net	tax	benefit,	resulting	in	a	40%	effective	tax	rate,	in	2014	on	our	pre-tax	loss	compared	to	$59	million	of	net	tax	benefit,	resulting in	an	effective	tax	rate	of	negative	7%,	in	2013.		Our	effective	tax	rate	in	2014	was	favorably	impacted	by:	(i)	state	tax	benefits	on	the	pension	settlement	loss,	(ii)	$29 million	in	tax	benefits	associated	with	the	net	reduction	in	unrecognized	tax	benefits	and	(iii)	$19	million	in	net	reduction	in	our	deferred	tax	liability	for	undistributed foreign	earnings	primarily	due	to	changes	in	permanent	reinvestment	assertions.	These	benefits	were	partially	offset	by	tax	expense	for	the	establishment	of	a	$55 million	valuation	allowance	on	certain	foreign	deferred	tax	assets.

Our	negative	effective	tax	rate	in	2013	was	lower	than	the	U.S.	statutory	tax	rate	of	35%	due	to:	(i)	$337	million	associated	with	excess	foreign	tax	credits	on undistributed	foreign	earnings,	(ii)	a	$25	million	reduction	in	our	deferred	tax	liability	for	undistributed	foreign	earnings	primarily	due	to	changes	in	permanent reinvestment	assertions,	and	(iii)	a	$9	million	tax	benefit	for	R&D	tax	credits.

Our	effective	tax	rate	will	change	from	period	to	period	based	on	non-recurring	events,	such	as	the	settlement	of	income	tax	audits,	changes	in	valuation allowances	and	the	tax	impact	of	significant	unusual	or	extraordinary	items,	as	well	as	recurring	factors	including	changes	in	the	geographic	mix	of	income	and	effects of	various	global	income	tax	strategies.

# Earnings	(Loss)	from	Continuing	Operations	Attributable	to	Motorola	Solutions,	Inc.

We	had	a	net	loss	from	continuing	operations	attributable	to	Motorola	Solutions,	Inc.	of	$697	million,	or	$2.84	per	diluted	share,	in	2014,	compared	to	net earnings	from	continuing	operations	attributable	to	Motorola	Solutions,	Inc.	of	$933	million,	or	$3.45	per	diluted	share,	in	2013.

The	decrease	in	net	earnings	(loss)	from	continuing	operations	attributable	to	Motorola	Solutions,	Inc.	in	2014,	as	compared	to	2013,	was	primarily	driven	by:	(i) a	$1.9	billion	charge	related	to	the	settlement	of	a	U.S.	pension	plan	and	(ii)	a	$278	million	decrease	in	gross	margin	primarily	due	to	sales	declines	and	a	change	in sales	mix,	partially	offset	by:	(i)	a	$146	million	decrease	in	SG&A	and	(ii)	an	$80	million	decrease	in	R&D.	The	decrease	in	earnings	(loss)	per	diluted	share	from continuing	operations	was	driven	by	lower	net	earnings,	partially	offset	by	a	reduction	in	shares	outstanding	as	a	result	of	our	share	repurchase	program.

# Earnings	from	Discontinued	Operations

In	2014,	we	had	$2.0	billion	in	earnings	from	discontinued	operations,	net	of	tax,	or	$8.13	per	diluted	share,	compared	to	$166	million	of	earnings	from discontinued	operations,	net	of	tax,	or	$0.61	per	diluted	share,	in	2013.	The	earnings	from	discontinued	operations	in	both	2014	and	2013	were	related	to	the Enterprise	business.	The	increase	in	2014,	as	compared	to	2013	is	primarily	related	to	the	gain	from	the	sale	of	the	Enterprise	business	of	$1.9	billion.

Net	sales	were	$6.2	billion	in	2013	compared	to	$6.3	billion	in	2012.	The	slight	decrease	in	net	sales	reflects	a	$127	million,	or	3%,	decrease	in	the	Products segment	driven	by	declines	in:	(i)	North	America,	reflecting	lower	devices	sales,	(ii)	APME,	as	a	result	of	lower	devices	and	systems	sales,	and	(iii)	Latin	America, reflecting	lower	Systems	sales,	partially	offset	by	double-digit	growth	in	EA	as	a	result	of	higher	systems	sales.	The	decrease	in	net	sales	was	offset	by	an	$85 million,	or	4%,	increase	in	net	sales	relating	to	the	Services	segment	driven	by	increases	in:	(i)	North	America,	as	a	result	of	higher	net	sales	in	Lifecycle	Support services	and	Integration	services	and	(ii)	EA,	reflecting	higher	Integration	services	sales,	partially	offset	by	a	decline	in	APME	as	a	result	of	lower	Integration	and Managed	services	sales.

Gross	margin	was	$3.1	billion,	or	49.9%	of	net	sales	in	2013,	compared	to	$3.2	billion,	or	50.9%	of	net	sales,	in	2012.	The	decrease	in	gross	margin	percentage is	driven	primarily	by:	(i)	a	decline	in	gross	margin	as	a	percentage	of	sales	in	North	America,	as	a	result	of	sales	mix	between	the	Products	and	Services	segments, (ii)	a	decline	in	gross	margin	as	a	percentage	of	sales	in	APME,	relating	to	lower	gross	margin	as	a	percentage	of	sales	in	devices	and	systems,	and	(iii)	a	decline	in gross	margin	as	a	percentage	of	sales	in	EA,	as	a	result	of	lower	gross	margin	as	a	percentage	of	sales	in	Integration	services.

SG&A	expenses	decreased	10%	to	$1.3	billion,	or	21.4%	of	net	sales	in	2013,	compared	to	$1.5	billion,	or	23.5%	of	net	sales	in	2012.	The	decrease	in	SG&A	is primarily	driven	by:	(i)	a	number	of	structural	cost	improvements,	including	defined	benefit	expenses,	and	(ii)	decreases	in	variable	compensation	expenses.

R&D	expenditures	decreased	4%	to	$761	million,	or	12.2%	of	net	sales	in	2013,	compared	to	$790	million,	or	12.6%	of	net	sales	in	2012.	The	decrease	in	R&D expenditures	is	primarily	due	to:	(i)	reduced	compensation	expenses	and	(ii)	reduced	spending	in	certain	development	programs,	such	as	iDEN.

We	recorded	net	charges	of	$71	million	in	Other	charges	in	2013,	compared	to	net	charges	of	$12	million	in	2012.	The	charges	in	2013	included:	(i)	$70	million	of net	reorganization	of	business	charges	and	(ii)	$1	million	of	charges	relating	to	amortization	of	intangibles.	The	charges	in	2012	included:	(i)	$27	million	of	charges relating	to	reorganization	of	business	charges	and	(ii)	$1	million	of	charges	relating	to	amortization	of	intangibles,	partially	offset	by	$16	million	of	income	related	to	a legal	matter.	The	net	reorganization	of	business	charges	are	discussed	in	further	detail	in	the	"Reorganization	of	Businesses"	section.

Net	interest	expense	was	$113	million	in	2013,	compared	to	net	interest	expense	of	$66	million	in	2012.	Net	interest	expense	in	2013	included	interest	expense of	$132	million,	partially	offset	by	interest	income	of	$19	million.	Net	interest	expense	in	2012	included	interest	expense	of	$108	million,	partially	offset	by	interest income	of	$42	million.	The	increase	in	net	interest	expense	in	2013	compared	to	2012	is	primarily	attributable	to:	(i)	higher	interest	expense	driven	by	an	increase	in average	debt	outstanding	and	$5	million	of	income	tax-related	interest	charges	and	(ii)	a	decrease	in	interest	income	due	to	lower	average	cash	and	cash	equivalents during	2013	compared	to	2012.

Gains	on	sales	of	investments	and	businesses	were	$37	million	in	2013,	compared	to	$26	million	in	2012.	These	gains	consist	of	gains	on	the	sale	of	multiple equity	investments	in	both	2013	and	2012.

Net	Other	income	was	$9	million	in	2013,	compared	to	net	Other	income	of	$1	million	in	2012.	The	net	Other	income	in	2013	was	primarily	comprised	of:	(i)	$10 million	of	equity	method	investment	earnings	and	(ii)	$11	million	of	other	non-operating	gains,	partially	offset	by:	(i)	a	$9	million	loss	on	foreign	currency	and	(ii) investment	impairments	of	$3	million.	The	net	Other	income	in	2012	was	primarily	comprised	of:	(i)	$3	million	of	equity	method	investment	earnings	and	(ii)	$9	million of	other	non-operating	gains,	partially	offset	by:	(i)	$6	million	loss	from	the	extinguishment	of	debt	and	(ii)	investment	impairments	of	$4	million.

We	recorded	$59	million	of	net	tax	benefit	in	2013,	resulting	in	a	negative	effective	tax	rate	of	7%,	compared	to	$211	million	of	net	tax	expense	in	2012,	resulting in	an	effective	tax	rate	of	24%.	Our	effective	tax	rate	in	2013	was	favorably	impacted	by:	(i)	$337	million	of	net	tax	benefit,	or	$1.25	of	diluted	earnings	per	share	from continuing	operations,	associated	with	excess	foreign	tax	credits,	(ii)	a	$25	million	reduction	in	our	deferred	tax	liability	for	undistributed	foreign	earnings	primarily	due to	our	assertion	that	certain	earnings	are	now	permanently	reinvested,	and	(iii)	a	$9	million	tax	benefit	for	prior	year	R&D	tax	credits.	The	tax	benefit	associated	with the	excess	foreign	tax	credits	relates	to	the	earnings	of	certain	non-U.S.	subsidiaries	reorganized	under	our	holding	company	structure	implemented	during	2013.	Our effective	tax	rate	in	2013	was	unfavorably	impacted	by	a	$20	million	tax	charge	associated	with	the	liquidation	of	the	Sigma	Fund,	as	discussed	within	"Liquidity	and Capital	Resources."

Our	effective	tax	rate	in	2012	was	lower	than	the	U.S.	statutory	tax	rate	of	35%	primarily	due	to:	(i)	a	$60	million	tax	benefit	related	to	the	reversal	of	a	significant portion	of	the	valuation	allowance	established	on	certain	foreign	deferred	tax	assets	and	(ii)	a	$13	million	reduction	in	unrecognized	tax	benefits	for	facts	that	then indicated	the	extent	to	which	certain	tax	positions	were	more-likely-than-not	of	being	sustained.

# Earnings	from	Continuing	Operations	Attributable	to	Motorola	Solutions,	Inc.

We	had	net	earnings	from	continuing	operations	attributable	to	Motorola	Solutions,	Inc.	of	$933	million,	or	$3.45	per	diluted	share,	in	2013,	compared	to	$670 million,	or	$2.25	per	diluted	share,	in	2012.

The	increase	in	net	earnings	from	continuing	operations	attributable	to	Motorola	Solutions,	Inc.	in	2013,	as	compared	to	2012,	was	primarily	driven	by:	(i)	a lower	effective	tax	rate	due	to	the	$337	million	net	tax	benefit	associated	with	foreign	tax	credits	and	(ii)	decreased	defined	benefit	expenses	of	over	$100	million, partially	offset	by:	(i)	a	$85	million	decrease	in	gross	margin,	(ii)	a	$43	million	increase	in	reorganization	of	business	charges,	and	(iii)	a	$47	million	increase	in	net interest	expense.	The	increase	in	earnings	per	diluted	share	from	continuing	operations	was	driven	by	higher	net	earnings	as	well	as	the	reduction	in	shares outstanding	as	a	result	of	our	share	repurchase	program.

In	2013,	we	had	$166	million	in	earnings	from	discontinued	operations,	net	of	tax,	or	$0.61	per	diluted	share,	compared	to	$211	million	of	earnings	from discontinued	operations,	net	of	tax,	or	$0.71	per	diluted	share,	in	2012.	The	earnings	from	discontinued	operations	in	2013	and	2012	were	primarily	from	the Enterprise	business.	The	decrease	from	2012	to	2013	is	primarily	related	to	an	increase	in	amortization	of	intangible	assets,	as	a	result	of	the	purchase	of	Psion	at the	end	of	2012.

# Segment	Information

The	following	commentary	should	be	read	in	conjunction	with	the	financial	results	of	each	operating	business	segment	as	detailed	in	Note	12,	"Information	by Segment	and	Geographic	Region,"	to	our	consolidated	financial	statements.	Net	sales	and	operating	results	for	our	two	segments	for	2014,	2013,	and	2012	are presented	below.

|  |  | Years	ended	December	31 |  | Percent	Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (Dollars\tin\tmillions) | 2014 | 2013 | 2012 | 2014—2013 | 2013—2012 |
| Segment\tnet\tsales | $3,807 | $4,109 | $4,236 | (7)% | (3)% |
| Operating\tearnings\t(loss) | (667) | 639 | 656 | (204)% | (3)% |

In	2014,	the	segment's	net	sales	were	$3.8	billion,	a	7%	decrease	compared	to	2013	reflecting	a	decrease	in:	(i)	devices	sales	in	North	America,	Latin	America, and	APME,	partially	offset	by	an	increase	in	devices	sales	within	EA	and	(ii)	system	sales	in	North	America,	APME	and	EA,	partially	offset	by	an	increase	in	system sales	in	Latin	America.	On	a	geographic	basis,	net	sales	declined	in	North	America,	Latin	America	and	APME,	and	increased	in	EA	in	2014	compared	to	2013.	The fourth	quarter	of	2014	was	positively	impacted	by	a	return	to	growth	in	the	North	America	region,	as	compared	to	the	fourth	quarter	of	2013,	and

reflected	increased	order	activity	and	faster-than-expected	conversion	of	certain	orders.	The	segment's	backlog	was	$1.2	billion	at	December	31,	2014	and	$1.1	billion at	December	31,	2013.

The	segment	had	an	operating	loss	of	$667	million	in	2014,	compared	to	operating	earnings	of	$639	million	in	2013	driven	by	an	allocation	of	$1.3	billion	of expense	related	to	the	settlement	of	a	U.S	pension	plan.	As	a	percentage	of	net	sales	in	2014	compared	to	2013,	gross	margin	decreased,	SG&A	expenditures decreased,	R&D	expenditures	decreased,	and	Other	charges	increased.	The	decrease	in	operating	earnings	was	primarily	driven	by:	(i)	an	increase	in	Other	charges, reflecting	$1.3	billion	of	allocated	charges	related	to	the	settlement	of	a	U.S.	pension	plan	and	(ii)	a	decrease	in	net	sales,	resulting	in	lower	gross	margin,	partially offset	by	lower	SG&A	and	R&D	expenditures	as	a	result	of	cost	savings	actions	taken	and	lower	variable	compensation	expenses.

In	2013,	the	segment's	net	sales	were	$4.1	billion,	a	3%	decrease	compared	to	2012	reflecting	a	decrease	in:	(i)	devices	sales	in	North	America	and	APME, partially	offset	by	an	increase	in	devices	sales	within	EA	and	Latin	America	and	(ii)	system	sales	in	Latin	America	and	APME,	partially	offset	by	an	increase	within North	America	and	EA.	On	a	geographic	basis,	net	sales	declined	in	North	America,	Latin	America	and	APME,	and	increased	in	EA	in	2013	compared	to	2012.	The segment's	backlog	was	$1.1	billion	at	December	31,	2013	and	$1.6	billion	at	December	31,	2012.

The	segment	had	operating	earnings	of	$639	million	in	2013,	compared	to	operating	earnings	of	$656	million	in	2012.	As	a	percentage	of	net	sales	in	2013	as compared	to	2012,	gross	margin	was	down	slightly,	SG&A,	and	R&D	expenditures	decreased.	The	decrease	in	operating	earnings	was	primarily	due	to	an	increase	in Other	charges	as	a	result	of	increased	reorganization	of	business	charges	in	2013	as	compared	to	2012,	partially	offset	by	a	decrease	in	SG&A	expenses	as	a	result of	lower	variable	compensation	expenses	and	reduced	defined	benefit	plan	expenses.

|  |  | Years	ended	December	31 |  | Percent	Change |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (Dollars\tin\tmillions) | 2014 | 2013 | 2012 | 2014—2013 | 2013—2012 |
| Segment\tnet\tsales | $2,074 | $2,118 | $2,033 | (2)% | 4% |
| Operating\tearnings\t(loss) | (339) | 308 | 264 | (210)% | 17% |

In	2014,	the	segment's	net	sales	were	$2.1	billion,	a	2%	decrease	compared	to	2013	reflecting	a	decrease	in	sales	of:	(i)	iDEN	services	in	North	America	and Latin	America	and	(iii)	Lifecycle	Support	services	in	APME	and	EA,	partially	offset	by	an	increase	in	Managed	services	sales	in	APME	and	EA.	On	a	geographic	basis, net	sales	for	2014	declined	in	North	America	and	APME,	increased	in	EA,	and	remained	relatively	constant	in	Latin	America,	compared	to	2013.	Overall,	Integration services	remained	flat	due	to	the	timing	of	certain	projects	in	2014,	as	compared	to	2013.	Lifecycle	Support	services	decreased	slightly;	however,	demand	increased	in the	fourth	quarter	of	2014	for	our	software	maintenance	and	hardware	upgrade	offerings.	Managed	services	grew	modestly	as	increasing	complexity	and	the	need	for enhanced	capabilities	to	support	software-centric,	information	technology-based	networks	continued	to	drive	demand	in	all	regions.	The	segment's	backlog	was	$4.6 billion	at	December	31,	2014,	compared	to	$4.3	billion	at	December	31,	2013.

The	segment	had	an	operating	loss	of	$339	million	in	2014,	compared	to	operating	earnings	of	$308	million	in	2013.	As	a	percentage	of	net	sales	in	2014	as compared	to	2013,	gross	margin,	SG&A	expenditures,	and	R&D	expenditures	decreased,	and	Other	charges	increased.	The	decrease	in	operating	earnings	was primarily	driven	by:	(i)	an	increase	in	Other	charges,	reflecting	$584	million	of	allocated	charges	related	to	the	settlement	of	a	U.S.	pension	plan	and	(ii)	a	decrease	in net	sales,	resulting	in	lower	gross	margin,	partially	offset	by	lower	SG&A	and	R&D	expenditures	as	a	result	of	cost	savings	actions	taken	and	lower	variable compensation	expenses.

In	2013,	the	segment's	net	sales	were	$2.1	billion,	a	4%	increase	compared	to	2012	reflecting	an	increase	in	sales	of:	(i)	Integration	services	in	North	America and	EA,	and	(ii)	Lifecycle	Support	services	in	North	America,	partially	offset	by	a	decrease	in	sales	of	Managed	services	in	APME.	On	a	geographic	basis,	net	sales for	2013	increased	in	North	America,	EA	and	Latin	America	and	decreased	in	APME,	compared	to	2012.	The	segment's	backlog	was	$4.3	billion	at	December	31, 2013,	compared	to	$3.4	billion	at	December	31,	2012.

The	segment	had	operating	earnings	of	$308	million	in	2013,	compared	to	operating	earnings	of	$264	million	in	2012.	As	a	percentage	of	net	sales	in	2013	as compared	to	2012,	gross	margin	was	slightly	higher	and	SG&A	and	R&D	expenditures	decreased.	The	increase	in	operating	earnings	was	primarily	due	to:	(i)	an increase	in	gross	margin	as	a	result	of	higher	margin	from	Integration	services	and	(ii)	decreases	in	SG&A	expenses	as	a	result	of	lower	variable	compensation expenses	and	reduced	defined	benefit	plan	expenses,	partially	offset	by	higher	Other	charges	as	a	result	of	higher	reorganization	of	business	charges.

# Reorganization	of	Businesses

During	2014	we	implemented	various	productivity	improvement	plans	aimed	at	continuing	operating	margin	improvements	by	driving	efficiencies	and	reducing operating	costs.	In	2014,	we	recorded	net	reorganization	of	business	charges	of	$96	million	relating	to	the	separation	of	1,200	employees,	of	which	900	were	indirect employees	and	300	were	direct	employees.	Of	these	charges,	$23	million	related	to	discontinued	operations.	The	remaining	$73	million	of	charges	in	earnings	(loss) from	continuing	operations	included	$9	million	recorded	to	Cost	of	sales	and	$64	million	recorded	to	Other	charges.	Included	in	the	aggregate	$73	million	are	charges of:	(i)	$67	million	for	employee	separation	costs	and	(ii)	$7	million	for	exit	costs,	partially	offset	by	$1	million	of	reversals	for	accruals	no	longer	needed.

We	realized	cost-saving	benefits	of	approximately	$26	million	in	2014	from	the	plans	that	were	initiated	during	2014,	primarily	in	operating	expenses.	Beyond 2014,	we	expect	the	reorganization	plans	initiated	during	2014	to	provide	annualized	cost	savings	of	approximately	$90	million,	consisting	of	$12	million	of	savings	in Cost	of	sales,	and	$78	million	of	savings	in	operating	expenses.	These	cost	savings	include	reduced	payroll	and	other	operating	expenses;	however,	as	we	continue to	outsource	manufacturing	and	other	functions,	some	of	these	cost	savings	may	not	be	realizable	as	variable	outsourced	manufacturing	and	other	activities	increase.

During	2013,	we	recorded	net	reorganization	of	business	charges	of	$133	million	relating	to	the	separation	of	2,200	employees,	of	which	1,400	were	indirect employees	and	800	were	direct	employees.	Of	these	charges,	$47	million	related	to	discontinued	operations.	The	remaining	$86	million	of	charges	in	earnings	from continuing	operations	included	$16	million	recorded	to	Cost	of	sales	and	$70	million	recorded	to	Other	charges.	Included	in	the	aggregate	$86	million	are	charges	of: (i)	$94	million	for	employee	separation	costs	and	(ii)	$2	million	related	to	charges	for	exit	costs,	partially	offset	by	$10	million	for	reversals	of	accruals	no	longer needed.

During	2012,	we	recorded	net	reorganization	of	business	charges	of	$50	million	relating	to	the	separation	of	1,000	employees,	of	which	700	were	indirect employees	and	300	were	direct	employees.	Of	these	charges,	$17	million	related	to	discontinued	operations.	The	remaining	$33	million	of	charges	in	earnings	from continuing	operations	included	$6	million	recorded	to	Cost	of	sales	and	$27	million	recorded	to	Other	charges.	Included	in	the	aggregate	$33	million	are	charges	of:	(i) $35	million	for	employee	separation	costs	and	(ii)	$5	million	for	building	impairments,	partially	offset	by	$7	million	of	reversals	for	accruals	no	longer	needed.

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

| Years	ended	December	31 | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Products | $48 | $57 | $22 |
| Services | 25 | 29 | 11 |
|  | $73 | $86 | $33 |

Cash	payments	for	exit	costs	and	employee	separations	in	connection	with	these	reorganization	plans	were	$148	million,$59	million,	and	$55	million	in	2014, 2013,	and	2012,	respectively.	The	cash	payments	included	$50	million	in	2014,	$20	million	in	2013,	and	$20	million	in	2012	related	to	employees	of	discontinued operations.	The	$57	million	reorganization	of	businesses	accrual	remaining	at	December	31,	2014,	relates	entirely	to	employee	separation	costs	that	are	expected	to be	paid	in	2015.	As	part	of	the	sale	of	its	Enterprise	business,	the	Company	retained	the	reorganization	of	business	charges	accruals	and	the	responsibility	to	pay affected	employees	for	those	charges	incurred	prior	to	the	closing	of	the	sale	of	the	Enterprise	business.

# Liquidity	and	Capital	Resources

At	December	31,	2014,	our	cash	and	cash	equivalents	(which	are	highly-liquid	investments	purchased	with	an	original	maturity	of	three	months	or	less)	were $4.0	billion,	an	increase	of	$729	million,	compared	to	$3.2	billion	at	December	31,	2013.	The	increase	in	cash	and	cash	equivalents	is	primarily	due	to:	(i)	$3.4	billion	of cash	generated	from	the	sale	of	the	Enterprise	business	and	(ii)	the	issuance	of	$1.4	billion	of	Senior	Notes,	partially	offset	by:	(i)	the	return	of	$2.9	billion	of	capital	to shareholders	through	share	repurchases	and	dividends	paid	during	2014,	(ii)	$685	million	of	cash	used	for	operating	activity,	including	pension	contributions	of	$1.3 billion,	and	(iii)	$465	million	of	debt	repayment.	At	December	31,	2014,	$3.3	billion	of	the	$4.0	billion	cash	and	cash	equivalents	balance	was	held	in	the	U.S.	and	$647 million	was	held	in	other	countries.	Subsequent	to	December	31,	2014,	we	transferred	$423	million	of	cash	proceeds	from	the	sale	of	the	Enterprise	business	from	the U.S	to	our	foreign	subsidiaries.	At	both	December	31,	2014	and	December	31,	2013,	restricted	cash	was	$63	million.

We	continue	to	analyze	and	review	various	repatriation	strategies	to	efficiently	repatriate	cash.	In	2014,	we	repatriated	approximately	$570	million	in	cash	to	the U.S.	from	international	jurisdictions.	At	December	31,	2014,	we	had	approximately	$400	million	of	foreign	earnings	that	are	not	permanently	reinvested	and	may	be repatriated	without	an	additional	tax	charge	to	our	consolidated	statements	of	operations,	given	the	U.S.	federal	and	foreign	income	tax	accrued	on	the	undistributed earnings	and	the	utilization	of	available	foreign	tax	credits.	Undistributed	earnings	that	we	intend	to	reinvest	indefinitely,	and	for	which	no	income	taxes	have	been provided,	aggregate	to	$1.5	billion	at	December	31,	2014.	We	currently	have	no	plans	to	repatriate	the	foreign	earnings	permanently	reinvested.		If	circumstances change	and	it	becomes	apparent	that	some	or	all	of	the	permanently	reinvested	earnings	will	be	remitted	to	the	U.S.	in	the	foreseeable	future,	an	additional	income tax	charge	may	be	necessary.

Where	appropriate,	we	may	also	pursue	capital	reduction	activities;	however,	such	activities	can	be	involved	and	lengthy.	While	we	regularly	repatriate	funds, and	a	portion	of	offshore	funds	can	be	repatriated	with	minimal	adverse	financial	impact,

repatriation	of	some	of	these	funds	may	be	subject	to	delay	for	local	country	approvals	and	could	have	potential	adverse	cash	tax	consequences.

# Operating	Activities

Cash	used	for	operating	activities	from	continuing	operations	in	2014	was	$685	million,	compared	to	cash	provided	by	operating	activities	from	continuing operations	of	$555	million	in	2013	and	$674	million	in	2012.	Operating	cash	flows	in	2014,	as	compared	to	2013,	were	negatively	impacted	by	contributions	to	our pension	plans	of	$1.3	billion,	an	increase	of	$1.1	billion	compared	to	2013,	primarily	related	to	a	U.S.	pension	plan	settlement.	Operating	cash	flows	in	2013,	as compared	to	2012,	were	negatively	impacted	by:	(i)	higher	cash	tax	payments,	including	Indian	tax	deposits	of	$43	million,	and	(ii)	lower	collections	and	sales	of	long- term	receivables,	including	receivables	related	to	the	Networks	divestiture	that	were	retained	after	the	sale	and	sold	or	collected	in	2012,	partially	offset	by approximately	$190	million	of	lower	defined	benefit	plan	contributions	in	2012	as	compared	to	2013.

In	September	2014,	we	entered	into	a	Definitive	Purchase	Agreement	("the	Agreement")	by	and	among	Motorola	Solutions,	The	Prudential	Insurance	Company of	America	("PICA"),	Prudential	Financial,	Inc.	and	State	Street	Bank	and	Trust	Company,	as	Independent	Fiduciary	of	one	of	our	U.S.	Pension	Plans	(the	"Regular Pension	Plan",	as	defined	in	Note	7	to	our	consolidated	financial	statements).		Under	the	Agreement,	the	Regular	Pension	Plan	planned	to	purchase	from	PICA	a group	annuity	contract	that	requires	PICA	to	pay	and	administer	certain	future	annuity	payments	to	approximately	30,000	of	our	retirees.		In	anticipation	of	the Agreement,	we	established	a	new	pension	plan	with	substantially	the	same	terms	as	the	Regular	Pension	Plan	(the	"New	Plan")	to	accommodate	our	remaining active	employees	and	non-retirees.		On	December	3,	2014,	the	Regular	Pension	Plan	closed	its	planned	purchase	of	a	group	annuity	from	PICA.		The	total	premium paid	by	the	Regular	Pension	Plan	to	PICA	was	the	transfer	of	approximately	$3.2	billion	in	plan	assets,	and	is	subject	to	customary	post-closing	true-ups.	The	Regular Pension	Plan	was	then	terminated.

Also	in	September	2014,	we	announced	that	the	New	Plan	was	offering	a	maximum	of	$1.0	billion	of	lump-sum	distributions	to	certain	participants	who	had accrued	a	pension	benefit,	had	left	the	Company	prior	to	June	30,	2014,	and	had	not	yet	started	receiving	pension	benefit	payments	("the	Eligible	Participants").		The aggregate	amount	of	lump-sum	elections	accepted	by	Eligible	Participants	exceeded	the	maximum	of	$1.0	billion,	and	$1.0	billion	was	paid	from	plan	assets	in December	2014.

We	contributed	$1.1	billion,	$150	million,	and	$340	million	to	our	U.S.	pension	plans	during	2014,	2013,	and	2012,	respectively.	In	addition,	we	contributed	$237 million,	$32	million,	and	$31	million	to	our	Non-U.S.	Pension	Plans	during	2014,	2013,	and	2012,	respectively.	We	expect	to	make	no	cash	contributions	to	our	U.S. Pension	Benefit	Plans	and	approximately	$12	million	to	our	Non-U.S.	Pension	Benefit	Plans	in	2015.

# Investing	Activities

Net	cash	provided	by	investing	activities	from	continuing	operations	was	$3.2	billion	in	2014,	compared	to	$2.0	billion	in	2013	and	$1.0	billion	in	2012.	The	$1.2 billion	increase	in	net	cash	provided	by	investing	activities	from	2013	to	2014	was	primarily	due	to	a	$3.3	billion	increase	of	proceeds	from	sales	of	investments	and businesses,	related	to	the	sale	of	our	Enterprise	business,	partially	offset	by	a	$2.1	billion	decrease	in	proceeds	from	sales	of	Sigma	Fund	investments,	which	we exited	in	the	fourth	quarter	of	2013.	The	$1.1	billion	increase	in	net	cash	provided	by	investing	activities	from	2012	to	2013	was	primarily	due	to	a	$1.1	billion	increase in	proceeds	from	net	sales	of	Sigma	Fund	investments.

Sigma	Fund:	Prior	to	December	2013,	we	invested	most	of	our	U.S.	dollar-denominated	cash	in	a	fund	(the	"Sigma	Fund")	that	was	managed	by	independent investment	management	firms	under	specific	investment	guidelines	restricting	the	type	of	investments	held	and	their	time	to	maturity.	In	December	2013,	we completed	the	liquidation	of	the	Sigma	Fund	and	migrated	the	international	U.S	dollar-denominated	cash	to	a	U.S.	dollar	cash	pool	invested	primarily	in	U.S.	dollar prime	money	market	funds.	The	creation	of	the	international	cash	pool	enhances	our	flexibility	to	repatriate	excess	overseas	cash	and	fund	global	operations.	These money	market	funds	are	classified	as	Cash	and	cash	equivalents	within	the	consolidated	balance	sheets	as	of	December	31,	2014	and	2013.	We	had	net	proceeds	of $2.1	billion	in	2013	compared	to	$1.1	billion	in	net	proceeds	of	Sigma	Fund	investments	in	2012.

Acquisitions	and	Investments:	We	used	cash	of	$47	million	for	acquisitions	and	new	investment	activities	in	2014,	compared	to	$57	million	in	2013	and receiving	cash	of	$83	million	in	2012.	The	cash	used	in	2014	was	for	the	acquisition	of	an	equipment	provider	for	$22	million	and	a	number	of	equity	investments.	The cash	used	in	2013	was	for	the	acquisition	of	a	communications	software	provider	in	push-to-talk-over-broadband	applications	for	a	purchase	price,	net	of	cash acquired,	of	$36	million,	and	other	small	strategic	equity	investments.	The	cash	received	in	2012	was	primarily	for	the	agreement	with	Nokia	Siemens	Networks ("NSN")	to	take	over	responsibility	to	implement	Norway´s	TETRA	public	safety	network,	offset	by	other	small	strategic	investments.

In	accordance	with	the	Acquisition	Agreement,	the	sale	of	our	Enterprise	business	is	subject	to	certain	customary	purchase	price	adjustments.		Among	those adjustments	for	which	we	expect	reimbursement	is	the	refund	of	$49	million	of	cash	from	Zebra	for	legal	entities	that	had	cash	balances	which	were	effected	through	a stock	sale.		The	$49	million,	and	other	purchase	price	adjustments,	are	expected	to	be	settled	in	2015.

Capital	Expenditures:	Capital	expenditures	were	$181	million	in	2014,	compared	to	$169	million	in	2013,	and	$170	million	in	2012.	Capital	spending	in	2014, 2013,	and	2012	was	primarily	comprised	of:	(i)	updates	to	our	information	technology	infrastructure,	(ii)	network	build	out	expenditures	related	to	our	Services segment	and	(iii)	facility	renovations.	The	increase	in

capital	spending	in	2014,	as	compared	to	2013	and	2012,	was	primarily	driven	by	an	increase	in	revenue-generating	network	build	out	expenditures.

Sales	of	Property,	Plant,	and	Equipment:	We	had	$33	million	of	proceeds	related	to	the	sale	of	property,	plant,	and	equipment	in	2014,	compared	to	$66 million	in	2013	and	$40	million	in	2012.	The	proceeds	in	all	periods	were	primarily	comprised	of	sales	of	buildings	and	land.

Sales	of	Investments	and	Businesses:	We	received	$3.4	billion	of	proceeds	in	2014	compared	to	$61	million	in	2013	and	disbursements	of	$58	million	in 2012.	The	$3.4	billion	of	proceeds	received	in	2014	were	primarily	comprised	of	proceeds	from	the	sale	of	the	Enterprise	business.	The	$61	million	of	cash	received	in 2013	was	primarily	comprised	of	proceeds	from	sales	of	equity	investments.	The	$58	million	in	disbursements	in	2012	were	primarily	comprised	of	payments	to	NSN related	to	the	purchase	price	adjustment	from	the	sale	of	the	Networks	business	completed	in	2011,	partially	offset	by	proceeds	from	sales	of	certain	equity investments.

# Financing	Activities

Net	cash	used	for	financing	activities	was	$1.7	billion	in	2014	compared	to	$842	million	in	2013	and	$2.1	billion	in	2012.	Cash	used	for	financing	activities	in 2014	was	primarily	comprised	of:	(i)	$2.5	billion	used	for	purchases	of	common	stock	under	our	share	repurchase	program,	(ii)	$465	million	of	cash	used	for	the repayment	of	debt,	and	(iii)	$318	million	of	cash	used	for	the	payment	of	dividends,	partially	offset	by:	(i)	$1.4	billion	of	net	proceeds	from	the	issuance	of	debt,	(ii) $135	million	of	net	proceeds	from	the	issuance	of	common	stock	in	connection	with	our	employee	stock	option	and	employee	stock	purchase	plans,	and	(iii)	$93 million	of	distributions	received	from	discontinued	operations.

Cash	used	for	financing	activities	in	2013	was	primarily	comprised	of:	(i)	$1.7	billion	used	for	purchases	of	our	common	stock	under	our	share	repurchase program	and	(ii)	$292	million	of	cash	used	for	the	payment	of	dividends,	partially	offset	by:	(i)	$593	million	of	net	proceeds	from	the	issuance	of	debt,	(ii)	$365	million of	distributions	received	from	discontinued	operations,	and	(iii)	$165	million	of	net	proceeds	from	the	issuance	of	common	stock	in	connection	with	our	employee	stock option	and	employee	stock	purchase	plans.

Cash	used	for	financing	activities	in	2012	was	primarily	comprised	of:	(i)	$2.4	billion	used	for	purchases	of	our	common	stock	under	our	share	repurchase program,	(ii)	$413	million	of	cash	used	for	the	repayment	of	debt,	and	(iii)	$270	million	of	cash	used	for	the	payment	of	dividends,	partially	offset	by:	(i)	$747	million	of net	proceeds	from	the	issuance	of	debt,	(ii)	$217	million	of	distributions	received	from	discontinued	operations,	and	(iii)	$133	million	of	net	cash	received	from	the issuance	of	common	stock	in	connection	with	our	employee	stock	option	and	employee	stock	purchase	plans.

Current	and	Long-Term	Debt:		At	both	December	31,	2014	and	2013,	our	current	portion	of	long-term	debt	was	$4	million.	We	had	outstanding	long-term	debt of	$3.4	billion	and	$2.5	billion	at	December	31,	2014	and	December	31,	2013,	respectively.

During	the	year	ended	December	31,	2014,	we	redeemed	$400	million	aggregate	principal	amount	outstanding	of	our	6.000%	Senior	Notes	due	November	2017 for	an	aggregate	purchase	price	of	approximately	$456	million.	After	accelerating	the	amortization	of	debt	issuance	costs,	debt	discounts,	and	hedge	adjustments,	we recognized	a	loss	of	$37	million	related	to	the	redemption	within	Other	income	(expense)	in	the	consolidated	statements	of	operations.	In	addition,	we	issued	an aggregate	face	principal	amount	of	$1.4	billion	including:	(i)	$600	million	of	4.000%	Senior	Notes	due	2024,	of	which,	after	debt	issuance	costs	and	debt	discounts,	we recognized	net	proceeds	of	$583	million,	(ii)	$400	million	of	3.500%	Senior	Notes	due	2021,	of	which,	after	debt	issuance	costs	and	debt	discounts,	we	recognized	net proceeds	of	$393	million,	and	(iii)	$400	million	of	5.500%	Senior	notes	due	2044,	of	which,	after	debt	issuance	costs	and	debt	discounts,	we	recognized	net	proceeds of	$394	million.

During	2013,	we	issued	an	aggregate	face	principal	amount	of	$600	million	of	3.50%	Senior	Notes	due	March	1,	2023,	recognizing	net	proceeds	of	$588	million, after	debt	discount	and	issuance	costs.

During	2012,	we	issued	an	aggregate	face	principal	amount	of	$750	million	of	3.75%	Senior	Notes	due	May	15,	2022	(the	"2022	Senior	Notes").		We	also redeemed	$400	million	aggregate	principal	amount	outstanding	of	our	5.375%	Senior	Notes	due	November	2012	(the	"2012	Senior	Notes").		All	of	the	2012	Senior Notes	were	redeemed	for	an	aggregate	purchase	price	of	approximately	$408	million.		This	debt	was	repurchased	with	a	portion	of	the	proceeds	from	the	issuance	of the	2022	Senior	Notes.

We	have	investment	grade	ratings	on	our	senior	unsecured	long-term	debt	from	the	three	largest	U.S.	national	rating	agencies.	We	believe	that	we	will	be	able to	maintain	sufficient	access	to	the	capital	markets.	Any	future	disruptions,	uncertainty	or	volatility	in	the	capital	markets	may	result	in	higher	funding	costs	for	us	and adversely	affect	our	ability	to	access	funds.

We	may,	from	time	to	time,	seek	to	retire	certain	of	our	outstanding	debt	through	open	market	cash	purchases,	privately-negotiated	transactions	or	otherwise. Such	repurchases,	if	any,	will	depend	on	prevailing	market	conditions,	our	liquidity	requirements,	contractual	restrictions	and	other	factors.

Share	Repurchase	Program:	Through	actions	taken	on	July	28,	2011,	January	30,	2012,	July	25,	2012,	July	22,	2013,	and	November	4,	2014,	the	Board	of Directors	has	authorized	an	aggregate	share	repurchase	amount	of	up	to	$12.0	billion	of	our	outstanding	shares	of	common	stock	(the	"share	repurchase	program"). The	share	repurchase	program	does	not	have	an	expiration	date.	As	of	December	31,	2014,	we	have	used	approximately	$7.8	billion	of	the	share	repurchase authority,	including	transaction	costs,	to	repurchase	shares,	leaving	approximately	$4.2	billion	of	authority	available	for	future	repurchases.

We	paid	an	aggregate	of	$2.5	billion	during	2014,	including	transaction	costs,	to	repurchase	approximately	39.4	million	shares	at	an	average	price	of	$64.63	per share.	During	2013,	we	paid	an	aggregate	of	$1.7	billion,	including	transaction	costs,	to

repurchase	approximately	28.6	million	shares	at	an	average	price	of	$59.30	per	share.	During	2012,	we	paid	an	aggregate	of	$2.4	billion,	including	transaction	costs, to	repurchase	approximately	49.6	million	shares	at	an	average	price	of	$49.14	per	share.	All	repurchased	shares	have	been	retired.

# Credit	Facilities

As	of	December	31,	2014,	we	had	a	$2.1	billion	unsecured	syndicated	revolving	credit	facility	(the	"2014	Motorola	Solutions	Credit	Agreement")	scheduled	to mature	on	May	29,	2019	which	replaced	the	previous	$1.5	billion	unsecured	syndicated	revolving	credit	facility	(the	"2011	Motorola	Solutions	Credit	Agreement").	We must	comply	with	certain	customary	covenants,	including	maximum	leverage	ratio	as	defined	in	the	2014	Motorola	Solutions	Credit	Agreement.	We	are	no	longer subject	to	a	minimum	interest	coverage	covenant	under	the	new	facility.	We	were	in	compliance	with	our	financial	covenants	as	of	December	31,	2014.	We	did	not borrow	under	the	2011	Motorola	Solutions	Credit	Agreement	or	the	2014	Motorola	Solutions	Credit	Agreement	during	the	twelve	months	ended	December	31,	2014.

As	of	December	31,	2014,	we	had	a	letter	of	credit	sub-limit	of	$450	million	under	the	2014	Motorola	Solutions	Credit	Agreement.	No	letters	of	credit	were	issued under	the	revolving	credit	facility	as	of	December	31,	2014.

# Contractual	Obligations	and	Other	Purchase	Commitments

Summarized	in	the	table	below	are	our	obligations	and	commitments	to	make	future	payments	under	long-term	debt	obligations,	lease	obligations,	purchase obligations	and	tax	obligations	as	of	December	31,	2014.

| (in	millions) | Total | 2015 | 2016 | 2017 | 2018 | 2019 | Uncertain<br>Timeframe | Thereafter |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Long-term\tdebt\tobligations | $3,456 | $4 | $5 | $5 | $6 | $11 | $— | $3,425 |
| Lease\tobligations | 454 | 68 | 56 | 45 | 35 | 33 | — | 217 |
| Purchase\tobligations* | 40 | 23 | 14 | 3 | — | — | — | — |
| Tax\tobligations | 96 | 25 | — | — | — | — | 71 |  |
| Total\tcontractual\tobligations | $4,046 | $120 | $75 | $53 | $41 | $44 | $71 | $3,642 |

*Amounts	included	represent	firm,	non-cancelable	commitments.

Lease	Obligations:		We	lease	certain	office,	factory	and	warehouse	space,	land,	information	technology	and	other	equipment,	principally	under	non-cancelable operating	leases.	Our	future	minimum	lease	obligations,	net	of	minimum	sublease	rentals,	totaled	$454	million.	Rental	expense,	net	of	sublease	income,	was	$62 million	in	2014,	$51	million	in	2013,	and	$45	million	in	2012.

Purchase	Obligations:		During	the	normal	course	of	business,	in	order	to	manage	manufacturing	lead	times	and	help	ensure	adequate	component	supply,	we enter	into	agreements	with	contract	manufacturers	and	suppliers	that	either	allow	them	to	procure	inventory	based	upon	criteria	as	defined	by	us	or	establish	the parameters	defining	our	requirements.		In	addition,	we	have	entered	into	software	license	agreements	which	are	firm	commitments	and	are	not	cancelable.	As	of December	31,	2014,	we	had	entered	into	firm,	noncancelable,	and	unconditional	commitments	under	such	arrangements	through	2017.	The	total	payments	expected to	be	made	under	these	agreements	are	$40	million,	of	which	$38	million	relate	to	take	or	pay	obligations	from	arrangements	with	suppliers	for	the	sourcing	of inventory	supplies	and	materials	and	$2	million	relate	to	information	technology	software	and	services	arrangements.	We	do	not	anticipate	the	cancellation	of	any	of our	take	or	pay	agreements	in	the	future	and	estimate	that	purchases	from	these	suppliers	will	exceed	the	minimum	obligations	during	the	agreement	periods.

Tax	Obligations:		We	have	approximately	$96	million	of	unrecognized	income	tax	benefits	relating	to	multiple	tax	jurisdictions	and	tax	years.	Based	on	the potential	outcome	of	our	global	tax	examinations,	or	the	expiration	of	the	statute	of	limitations	for	specific	jurisdictions,	it	is	reasonably	possible	that	the	unrecognized tax	benefits	will	change	within	the	next	twelve	months.	The	associated	net	tax	impact	on	the	effective	tax	rate,	exclusive	of	valuation	allowance	changes,	is	estimated to	be	in	the	range	of	a	$50	million	tax	charge	to	a	$50	million	tax	benefit,	with	cash	payments	not	expected	to	exceed	$25	million.

Commitments	Under	Other	Long-Term	Agreements:		We	have	entered	into	certain	long-term	agreements	to	purchase	software,	components,	supplies	and materials	from	suppliers	which	are	not	"take	or	pay"	in	nature.	Most	of	the	agreements	extend	for	periods	of	one	to	three	years	(three	to	five	years	for	software). Generally,	these	agreements	do	not	obligate	us	to	make	any	purchases,	and	many	permit	us	to	terminate	the	agreement	with	advance	notice	(usually	ranging	from 60	to	180	days).	If	we	were	to	terminate	these	agreements,	we	generally	would	be	liable	for	certain	termination	charges,	typically	based	on	work	performed	and supplier	on-hand	inventory	and	raw	materials	attributable	to	canceled	orders.	Our	liability	would	only	arise	in	the	event	we	terminate	the	agreements	for	reasons	other than	"cause."

We	outsource	certain	corporate	functions,	such	as	benefit	administration	and	information	technology-related	services,	the	longest	of	which	is	expected	to	expire in	2019.	Our	remaining	payments	under	these	contracts	are	approximately	$319	million	over	the	remaining	life	of	the	contracts;	however,	these	contracts	can	be terminated.	Termination	would	result	in	a	penalty

substantially	less	than	the	remaining	annual	contract	payments.	We	would	also	be	required	to	find	another	source	for	these	services,	including	the	possibility	of performing	them	in-house.

As	is	customary	in	bidding	for	and	completing	certain	projects	and	pursuant	to	a	practice	we	have	followed	for	many	years,	we	have	a	number	of performance/bid	bonds,	standby	letters	of	credit	and	surety	bonds	outstanding	(collectively,	referred	to	as	"Performance	Bonds"),	primarily	relating	to	projects	with	our government	customers.	These	Performance	Bonds	normally	have	maturities	of	multiple	years	and	are	standard	in	the	industry	as	a	way	to	give	customers	a convenient	mechanism	to	seek	resolution	if	a	contractor	does	not	satisfy	certain	requirements	under	a	contract.	Typically,	a	customer	can	draw	on	the	Performance Bond	only	if	we	do	not	fulfill	all	terms	of	a	project	contract.	If	such	an	occasion	occurred,	we	would	be	obligated	to	reimburse	the	institution	that	issued	the Performance	Bond	for	the	amounts	paid.	In	our	long	history,	it	has	been	rare	for	us	to	have	a	Performance	Bond	drawn	upon.	At	December	31,	2014,	outstanding Performance	Bonds	totaled	approximately	$1.6	billion,	compared	to	$1.8	billion	at	December	31,	2013.	Any	future	disruptions,	uncertainty,	or	volatility	in	bank, insurance	or	capital	markets,	or	a	change	in	our	credit	ratings	could	adversely	affect	our	ability	to	obtain	Performance	Bonds	and	may	result	in	higher	funding	costs	to obtain	such	Performance	Bonds.

Off-Balance	Sheet	Arrangements:		Under	the	definition	contained	in	Item	303(a)(4)(ii)	of	Regulation	S-K,	we	do	not	have	any	off-balance	sheet	arrangements.

# Long-term	Customer	Financing	Commitments

Outstanding	Commitments:		Certain	purchasers	of	our	products	and	services	may	request	that	we	provide	long-term	financing	(defined	as	financing	with	a term	of	greater	than	one	year)	in	connection	with	the	sale	of	equipment.	These	requests	may	include	all	or	a	portion	of	the	purchase	price	of	the	products	and services.	Our	obligation	to	provide	long-term	financing	may	be	conditioned	on	the	issuance	of	a	letter	of	credit	in	favor	of	us	by	a	reputable	bank	to	support	the purchaser's	credit	or	a	pre-existing	commitment	from	a	reputable	bank	to	purchase	the	long-term	receivables	from	us.	We	had	outstanding	commitments	to	provide long-term	financing	to	third-parties	totaling	$293	million	at	December	31,	2014,	compared	to	$50	million	at	December	31,	2013.

Outstanding	Long-Term	Receivables:		We	had	net	non-current	long-term	receivables	of	$31	million	at	December	31,	2014,	compared	to	net	non-current	long- term	receivables	of	$1	million	(net	of	allowances	for	losses	of	$14	million)	at	December	31,	2013.	These	long-term	receivables	are	generally	interest	bearing,	with interest	rates	ranging	from	0%	to	13%.

# Sales	of	Receivables

From	time	to	time,	we	sell	accounts	receivable	and	long-term	receivables	to	third-parties	under	one-time	arrangements	while	others	have	been	sold	to	third- parties.	We	may	or	may	not	retain	the	obligation	to	service	the	sold	accounts	receivable	and	long-term	receivables.

The	following	table	summarizes	the	proceeds	received	from	sales	of	accounts	receivable	and	long-term	receivables	for	the	years	ended	December	31,	2014, 2013,	and	2012:

| Years	ended	December	31 | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Accounts\treceivable\tsales\tproceeds | $50 | $14 | $12 |
| Long-term\treceivables\tsales\tproceeds | 124 | 131 | 178 |
| Total\tproceeds\tfrom\treceivable\tsales | $174 | $145 | $190 |

At	December	31,	2014,	the	Company	had	retained	servicing	obligations	for	$496	million	of	long-term	receivables,	compared	to	$434	million	of	long-term receivables	at	December	31,	2013.	Servicing	obligations	are	limited	to	collection	activities	for	sold	accounts	receivables	and	long-term	receivables.

# Adequate	Internal	Funding	Resources

We	believe	that	we	have	adequate	internal	resources	available	to	fund	expected	working	capital	and	capital	expenditure	requirements	for	the	next	twelve months	as	supported	by	the	level	of	cash	and	cash	equivalents	in	the	U.S.	and	the	ability	to	repatriate	funds	from	foreign	jurisdictions.

# Other	Contingencies

Potential	Contractual	Damage	Claims	in	Excess	of	Underlying	Contract	Value:		In	certain	circumstances,	our	businesses	may	enter	into	contracts	with customers	pursuant	to	which	the	damages	that	could	be	claimed	by	the	other	party	for	failed	performance	might	exceed	the	revenue	we	receive	from	the	contract. Contracts	with	these	types	of	uncapped	damage	provisions	are	fairly	rare,	but	individual	contracts	could	still	represent	meaningful	risk.	There	is	a	possibility	that	a damage	claim	by	a	counterparty	to	one	of	these	contracts	could	result	in	expenses	to	us	that	are	far	in	excess	of	the	revenue	received	from	the	counterparty	in connection	with	the	contract.

Indemnification	Provisions:		We	may	provide	indemnifications	for	losses	that	result	from	the	breach	of	general	warranties	contained	in	certain	commercial, intellectual	property	and	divestiture	agreements.	Historically,	we	have	not	made	significant	payments	under	these	agreements,	nor	have	there	been	significant	claims asserted	against	us.	However,	there	is	an	increasing	risk	in	relation	to	intellectual	property	indemnities	given	the	current	legal	climate.	In	indemnification	cases, payment	by	us	is	conditioned	on	the	other	party	making	a	claim	pursuant	to	the	procedures	specified	in	the	particular	contract,	which	procedures	typically	allow	us	to challenge	the	other	party's	claims.	In	some	instances	we	may	have	recourse	against	third-

parties	for	certain	payments	made	by	us.	Further,	our	obligations	under	divestiture	agreements	for	indemnification	based	on	breach	of	representations	and	warranties are	generally	limited	in	terms	of	duration,	typically	not	more	than	18	months,	and	for	amounts	not	in	excess	of	a	percentage	of	the	contract	value.

Legal	Matters:		We	are	a	defendant	in	various	lawsuits,	claims	and	actions,	which	arise	in	the	normal	course	of	business.	In	the	opinion	of	management,	the ultimate	disposition	of	these	matters	will	not	have	a	material	adverse	effect	on	our	consolidated	financial	position,	liquidity	or	results	of	operations.	However,	an unfavorable	resolution	could	have	a	material	adverse	effect	on	our	consolidated	financial	position,	liquidity	or	results	of	operations	in	the	periods	in	which	the	matters are	ultimately	resolved.

# Significant	Accounting	Policies

Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	discusses	our	consolidated	financial	statements,	which	have	been prepared	in	accordance	with	U.S.	generally	accepted	accounting	principles.	The	preparation	of	these	financial	statements	requires	management	to	make	estimates and	assumptions	that	affect	the	reported	amounts	of	assets	and	liabilities	and	the	disclosure	of	contingent	assets	and	liabilities	at	the	date	of	the	financial	statements, as	well	as	the	reported	amounts	of	revenues	and	expenses	during	the	reporting	period.

Management	bases	its	estimates	and	judgments	on	historical	experience,	current	economic	and	industry	conditions	and	on	various	other	factors	that	are believed	to	be	reasonable	under	the	circumstances.	This	forms	the	basis	for	making	judgments	about	the	carrying	values	of	assets	and	liabilities	that	are	not	readily apparent	from	other	sources.	Actual	results	may	differ	from	these	estimates	under	different	assumptions	or	conditions.	Management	believes	the	following	significant accounting	policies	require	significant	judgment	and	estimates.

# Revenue	Recognition

Net	sales	consist	of	a	wide	range	of	activities	including	the	delivery	of	stand-alone	equipment	or	services,	custom	design	and	installation	over	a	period	of	time, and	bundled	sales	of	equipment,	software	and	services.	We	enter	into	revenue	arrangements	that	may	consist	of	multiple	deliverables	of	our	products	and	services due	to	the	needs	of	our	customers.	We	recognize	revenue	when	persuasive	evidence	of	an	arrangement	exists,	delivery	has	occurred,	the	sales	price	is	fixed	or determinable,	and	collectability	of	the	sales	price	is	reasonably	assured.	We	recognize	revenue	from	the	sale	of	equipment,	equipment	containing	both	software	and nonsoftware	components	that	function	together	to	deliver	the	equipment's	essential	functionality,	and	services	in	accordance	with	general	revenue	recognition accounting	principles.	We	recognize	revenue	in	accordance	with	software	accounting	guidance	for	the	following	types	of	sales	transactions:	(i)	standalone	sales	of software	products	or	software	upgrades,	(ii)	standalone	sales	of	software	maintenance	agreements,	and	(iii)	sales	of	software	bundled	with	equipment	where	the software	is	not	essential	to	the	functionality	of	that	equipment.

# Products

For	equipment	sales,	in	addition	to	the	criteria	mentioned	above,	revenue	recognition	occurs	when	title	and	risk	of	loss	has	transferred	to	the	customer,	objective evidence	exists	that	customer	acceptance	provisions	have	been	met,	no	significant	obligations	remain	and	allowances	for	discounts,	price	protection,	returns	and customer	incentives	can	be	reliably	estimated.	Recorded	revenues	are	reduced	by	these	allowances.	We	base	our	estimates	of	these	allowances	on	historical experience	taking	into	consideration	the	type	of	products	sold,	the	type	of	customer,	and	the	specific	type	of	transaction	in	each	arrangement.	Where	customer incentives	cannot	be	reliably	estimated,	we	defer	revenue	until	the	incentive	has	been	finalized	with	the	customer.	We	include	shipping	charges	billed	to	customers	in net	revenue,	and	include	the	related	shipping	costs	in	cost	of	sales.

We	sell	software	and	equipment	obtained	from	other	companies.	We	establish	our	own	pricing	and	retain	related	inventory	risk,	are	the	primary	obligor	in	sales transactions	with	customers,	and	assume	the	credit	risk	for	amounts	billed	to	customers.	Accordingly,	we	generally	recognize	revenue	for	the	sale	of	products obtained	from	other	companies	based	on	the	gross	amount	billed.

# Long-Term	Contracts

For	long-term	contracts	that	involve	customization	of	equipment	and/or	software,	we	generally	recognize	revenue	using	the	percentage	of	completion	method based	on	the	percentage	of	costs	incurred	to	date	compared	to	the	total	estimated	costs	to	complete	the	contract	("Estimated	Costs	at	Completion").	The	components of	estimated	costs	to	complete	a	contract	and	management's	process	for	reviewing	Estimated	Costs	at	Completion	and	progress	toward	completion	is	discussed further	below.	Contracts	may	be	combined	or	segmented	in	accordance	with	the	applicable	criteria	under	contract	accounting	principles.	In	certain	instances,	when revenues	or	costs	associated	with	long-term	contracts	cannot	be	reliably	estimated	or	the	contract	contains	other	inherent	uncertainties,	revenues	and	costs	are deferred	until	the	project	is	complete	and	customer	acceptance	is	obtained.

Total	Estimated	Costs	at	Completion	include	direct	labor,	material	and	subcontracting	costs.	Due	to	the	nature	of	the	work	required	to	be	performed	under	many of	our	long-term	contracts,	determining	Estimated	Costs	at	Completion	is	complex	and	subject	to	many	variables.	We	have	a	standard	and	disciplined	quarterly Estimated	Costs	at	Completion	process	in	which	management	reviews	the	progress	and	performance	of	open	contracts.	As	part	of	this	process,	management	reviews information	including,	but	not	limited	to,	any	outstanding	key	contract	matters,	progress	towards	completion,	the	project	schedule,	identified	risks	and	opportunities, and	the	related	changes	in	estimates	of	revenues	and	costs.	The	risks	and	opportunities	include	management's	judgment	about	the	ability	and	cost	to	achieve	the project	schedule,	technical	requirements,	and	other	contract	requirements.	Management	must	make	assumptions	and	estimates	regarding	labor	productivity	and availability,	the	complexity

of	the	work	to	be	performed,	the	availability	of	materials,	and	performance	by	subcontractors,	among	other	variables.	Based	on	this	analysis,	any	quarterly adjustments	to	net	sales,	cost	of	sales,	and	the	related	impact	to	operating	income	are	recorded	as	necessary	in	the	period	they	become	known.	These	adjustments may	result	from	positive	project	performance,	and	may	result	in	an	increase	in	operating	income	during	the	performance	of	individual	contracts.	Likewise,	these adjustments	may	result	in	a	decrease	in	operating	income	if	Estimated	Costs	at	Completion	increase.	Changes	in	estimates	of	net	sales	or	cost	of	sales	could	affect the	profitability	of	one	or	more	of	our	contracts.	The	impact	on	Operating	earnings	as	a	result	of	changes	in	Estimated	Costs	at	Completion	was	not	significant	for	the years	2014,	2013,	and	2012.	When	estimates	of	total	costs	to	be	incurred	on	a	contract	exceed	total	estimates	of	revenue	to	be	earned,	a	provision	for	the	entire	loss on	the	contract	is	recorded	in	the	period	the	loss	is	determined.

# Hardware	and	Software	Services	Support

Revenue	under	equipment	and	software	support	and	maintenance	agreements,	which	do	not	contain	specified	future	software	upgrades,	is	recognized	ratably over	the	contract	term	as	services	are	performed.

# Software	and	Licenses

Revenue	from	pre-paid	perpetual	licenses	is	recognized	at	the	inception	of	the	arrangement,	presuming	all	other	relevant	revenue	recognition	criteria	are	met. Revenue	from	non-perpetual	licenses	or	term	licenses	is	recognized	ratably	over	the	period	that	the	licensee	uses	the	license.

# Multiple-Element	Arrangements

Arrangements	with	customers	may	include	multiple	deliverables,	including	any	combination	of	products,	services	and	software.	These	multiple-element arrangements	could	also	include	an	element	accounted	for	as	a	long-term	contract	coupled	with	other	products,	services	and	software.	For	multiple-element arrangements	that	include	products	containing	software	that	functions	together	with	the	equipment	to	deliver	its	essential	functionality,	undelivered	software	elements that	relate	to	the	product's	essential	software,	and	undelivered	non-software	services,	deliverables	are	separated	into	more	than	one	unit	of	accounting	when:	(i)	the delivered	element(s)	have	value	to	the	customer	on	a	stand-alone	basis	and	(ii)	delivery	of	the	undelivered	element(s)	is	probable	and	substantially	in	our	control.

In	these	arrangements,	we	allocate	revenue	to	all	deliverables	based	on	their	relative	selling	prices.	We	use	the	following	hierarchy	to	determine	the	selling price	to	be	used	for	allocating	revenue	to	deliverables:	(i)	vendor-specific	objective	evidence	of	fair	value	("VSOE"),	(ii)	third-party	evidence	of	selling	price	("TPE"), and	(iii)	best	estimate	of	selling	price	("ESP").

We	determine	VSOE	based	on	our	normal	pricing	and	discounting	practices	for	the	specific	product	or	service	when	that	same	product	or	service	is	sold separately.	In	determining	VSOE,	we	require	that	a	substantial	majority	of	the	selling	prices	for	a	product	or	service	fall	within	a	reasonably	narrow	pricing	range, generally	evidenced	by	the	pricing	rates	of	approximately	80%	of	such	historical	stand-alone	transactions	falling	within	plus	or	minus	15%	of	the	median	rate.

When	VSOE	does	not	exist,	we	attempt	to	determine	TPE	based	on	competitor	prices	for	similar	deliverables	when	sold	separately.	Generally,	our	go-to-market strategy	for	many	of	our	products	differs	from	that	of	our	competitors	and	our	offerings	contain	a	significant	level	of	customization	and	differentiation	such	that	the comparable	pricing	of	products	with	similar	functionality	sold	by	other	companies	cannot	be	obtained.	Furthermore,	we	are	unable	to	reliably	determine	what	similar competitor	products'	selling	prices	are	on	a	stand-alone	basis.	Therefore,	we	typically	are	not	able	to	determine	TPE.

When	both	VSOE	and	TPE	are	unavailable,	we	use	ESP.	We	determine	ESP	by:	(i)	collecting	all	reasonably	available	data	points	including	sales,	cost	and margin	analysis	of	the	product,	and	other	inputs	based	on	our	normal	pricing	and	discounting	practices,	(ii)	making	any	reasonably	required	adjustments	to	the	data based	on	market	and	Company-specific	factors,	and	(iii)	stratifying	the	data	points,	when	appropriate,	based	on	customer,	magnitude	of	the	transaction	and	sales volume.

We	also	consider	the	geographies	in	which	the	products	or	services	are	sold,	major	product	and	service	groups,	customer	classification,	and	other environmental	or	marketing	variables	in	determining	VSOE,	TPE,	and	ESP.

Once	elements	of	an	arrangement	are	separated	into	more	than	one	unit	of	accounting,	revenue	is	recognized	for	each	separate	unit	of	accounting	based	on the	nature	of	the	revenue	as	described	above.

Our	arrangements	with	multiple	deliverables	may	also	contain	one	or	more	software	deliverables	that	are	subject	to	software	revenue	recognition	guidance.	The revenue	for	these	multiple-element	arrangements	is	allocated	to	the	software	deliverable(s)	and	the	non-software	deliverable(s)	based	on	the	relative	selling	prices	of all	of	the	deliverables	in	the	arrangement	using	the	fair	value	hierarchy	outlined	above.	In	circumstances	where	we	cannot	determine	VSOE	or	TPE	for	any	of	the deliverables	in	the	arrangement,	ESP	is	used	for	the	purpose	of	allocating	the	arrangement	consideration	between	software	and	non-software	deliverables.

We	allocate	arrangement	consideration	to	multiple	software	or	software-related	deliverables,	including	the	sale	of	software	upgrades	or	software	support agreements	to	previously	sold	software,	in	accordance	with	software	accounting	guidance.	For	such	arrangements,	revenue	is	allocated	to	the	deliverables	based	on the	relative	fair	value	of	each	element,	and	fair	value	is	determined	using	VSOE.	Where	VSOE	does	not	exist	for	the	undelivered	software	element,	revenue	is deferred	until	either	the	undelivered	element	is	delivered	or	VSOE	is	established,	whichever	occurs	first.	When	the	final	undelivered	software	element	is	post	contract support,	service	revenue	is	recognized	on	a	ratable	basis	over	the	remaining	service	period.	When	VSOE	of	a	delivered	element	has	not	been	established,	but	VSOE exists	for	the	undelivered	elements,	we	use	the	residual	method	to	recognize	revenue	when	the	fair	value	of	all	undelivered	elements	is	determinable.	Under	the residual	method,	the	fair	value	of

the	undelivered	elements	is	deferred	and	the	remaining	portion	of	the	arrangement	consideration	is	allocated	to	the	delivered	elements	and	is	recognized	as	revenue.

# Inventory	Valuation

We	record	valuation	reserves	on	our	inventory	for	estimated	excess	or	obsolescence.	The	amount	of	the	reserve	is	equal	to	the	difference	between	the	cost	of the	inventory	and	the	estimated	market	value	based	upon	assumptions	about	future	demand	and	market	conditions.	On	a	quarterly	basis,	management	performs	an analysis	based	on	future	demand	requirement	estimates	of	the	underlying	inventory	to	identify	reserves	needed	for	excess	and	obsolescence.	We	use	our	best judgment	to	estimate	appropriate	reserves	based	on	this	analysis.	In	addition,	we	adjust	the	carrying	value	of	inventory	if	the	current	market	value	of	that	inventory	is below	our	cost.

At	December	31,	2014	and	2013,	Inventories	consisted	of	the	following:

| December	31 | 2014 | 2013 |
| :--- | :--- | :--- |
| Finished\tgoods | $163 | $157 |
| Work-in-process\tand\tproduction\tmaterials | 313 | 315 |
|  | 476 | 472 |
| Less\tinventory\treserves | (131) | (125) |
|  | $345 | $347 |

We	balance	the	need	to	maintain	strategic	inventory	levels	to	ensure	competitive	delivery	performance	to	our	customers	against	the	risk	of	inventory obsolescence	due	to	rapidly	changing	technology	and	customer	requirements.	As	reflected	above,	our	inventory	reserves	represented	28%	of	the	gross	inventory balance	at	December	31,	2014,	compared	to	26%	of	the	gross	inventory	balance	at	December	31,	2013.	We	have	inventory	reserves	for	excess	inventory,	pending cancellations	of	product	lines	due	to	technology	changes,	long-life	cycle	products,	lifetime	buys	at	the	end	of	supplier	production	runs,	business	exits,	and	a	shift	of production	to	outsourced	manufacturing.

If	future	demand	or	market	conditions	are	less	favorable	than	those	projected	by	management,	additional	inventory	writedowns	may	be	required.

# Income	Taxes

Our	effective	tax	rate	is	based	on	pre-tax	income	and	the	tax	rates	applicable	to	such	income	in	the	various	jurisdictions	in	which	we	operate.	An	estimated effective	tax	rate	for	the	year	is	applied	to	our	quarterly	operating	results.	In	the	event	that	there	is	a	significant	unusual	or	discrete	item	recognized,	or	expected	to	be recognized,	in	our	quarterly	operating	results,	the	tax	attributable	to	that	item	is	separately	calculated	and	recorded	at	the	same	time	as	the	unusual	or	discrete	item. We	consider	the	resolution	of	prior	year	tax	matters	to	be	such	items.	Significant	judgment	is	required	in	determining	our	effective	tax	rate	and	in	evaluating	our	tax positions.	We	adjust	reserves	for	unrecognized	income	tax	benefits	in	light	of	changing	facts	and	circumstances.	We	recognize	the	tax	benefit	of	a	tax	position	only	if	it is	more-likely-than-not	to	be	sustained.

Tax	regulations	may	require	items	of	income	and	expense	to	be	included	in	a	tax	return	in	different	periods	than	the	items	are	reflected	in	the	consolidated financial	statements.	As	a	result,	the	effective	tax	rate	reflected	in	the	consolidated	financial	statements	may	be	different	than	the	tax	rate	reported	in	the	income	tax return.	Some	of	these	differences	are	permanent,	such	as	expenses	that	are	not	deductible	on	the	tax	return,	and	some	are	temporary	differences,	such	as depreciation	expense.	Temporary	differences	create	deferred	tax	assets	and	liabilities.	Deferred	tax	assets	generally	represent	items	that	can	be	used	as	a	tax deduction	or	credit	in	the	tax	return	in	future	years	for	which	we	have	already	recorded	the	tax	benefit	in	the	consolidated	financial	statements.	Deferred	tax	liabilities generally	represent	tax	expense	recognized	in	the	consolidated	financial	statements	for	which	the	tax	payment	has	been	deferred	or	expense	for	which	we	have already	taken	a	deduction	on	an	income	tax	return,	but	has	not	yet	been	recognized	in	the	consolidated	financial	statements.

We	account	for	income	taxes	by	recognizing	deferred	tax	assets	and	liabilities	using	enacted	tax	rates	for	the	effect	of	the	temporary	differences	between	the book	and	tax	basis	of	recorded	assets	and	liabilities.	We	make	estimates	and	judgments	with	regard	to	the	calculation	of	certain	income	tax	assets	and	liabilities. Deferred	tax	assets	are	reduced	by	valuation	allowances	if,	based	on	the	consideration	of	all	available	evidence,	it	is	more-likely-than-not	that	all	or	some	portion	of the	deferred	tax	asset	will	not	be	realized.	Significant	weight	is	given	to	evidence	that	can	be	objectively	verified.

We	evaluate	deferred	income	taxes	on	a	quarterly	basis	to	determine	if	valuation	allowances	are	required	by	considering	available	evidence,	including	historical and	projected	taxable	income	and	tax	planning	strategies	that	are	both	prudent	and	feasible.

During	2014,	the	movement	in	our	deferred	tax	valuation	allowances	primarily	relates	to	deferred	tax	assets	that	are	not	more-likely-than-not	to	be	realizable based	on	estimates	of	future	taxable	income,	net	of	expiration	of	carryforwards.	During	2013,	our	deferred	tax	valuation	allowances	were	adjusted	primarily	for	current year	movement	in	deferred	taxes	and	expiration	of	carryforwards.

We	have	a	total	deferred	tax	asset	valuation	allowance	of	approximately	$226	million	against	gross	deferred	tax	assets	of	approximately	$3.6	billion	as	of December	31,	2014,	compared	to	total	deferred	tax	asset	valuation	allowance	of	approximately	$200	million	against	net	deferred	tax	assets	of	approximately	$3.7 billion	as	of	December	31,	2013.

# Retirement	Benefits

Our	benefit	obligations	and	net	periodic	pension	cost	(benefits)	associated	with	our	domestic	noncontributory	pension	plans	("U.S.	Pension	Benefit	Plans"),	our foreign	noncontributory	pension	plans	("Non-U.S.	Plans"),	as	well	as	our	domestic	postretirement	health	care	plan	("Postretirement	Health	Care	Benefits"),	are determined	using	actuarial	assumptions.		The	assumptions	are	based	on	management's	best	estimates,	after	consulting	with	outside	investment	advisors	and actuaries.

Accounting	methodologies	use	an	attribution	approach	that	generally	spreads	the	effects	of	individual	events	over	the	service	lives	of	the	participants	in	the plan,	or	estimated	average	lifetime	when	almost	all	of	the	plan	participants	are	considered	"inactive."	Examples	of	"events"	are	plan	amendments	and	changes	in actuarial	assumptions	such	as	discount	rate,	expected	long-term	rate	of	return	on	plan	assets,	and	rate	of	compensation	increases.

There	are	various	assumptions	used	in	calculating	the	net	periodic	benefit	expense	and	related	benefit	obligations.	One	of	these	assumptions	is	the	expected long-term	rate	of	return	on	plan	assets.	The	required	use	of	the	expected	long-term	rate	of	return	on	plan	assets	may	result	in	recognized	pension	income	that	is greater	or	less	than	the	actual	returns	of	those	plan	assets	in	any	given	year.	Over	time,	however,	the	expected	long-term	returns	are	designed	to	approximate	the actual	long-term	returns.	We	use	a	five-year,	market-related	asset	value	method	of	recognizing	asset	related	gains	and	losses.

We	use	long-term	historical	actual	return	experience	with	consideration	of	the	expected	investment	mix	of	the	plans'	assets,	as	well	as	future	estimates	of	long- term	investment	returns,	to	develop	our	expected	rate	of	return	assumption	used	in	calculating	the	net	periodic	pension	cost	and	the	net	retirement	healthcare expense.	Our	investment	return	assumption	for	the	U.S.	Pension	Benefit	Plans	and	Postretirement	Healthcare	Benefits	Plan	was	7.00%	in	both	2014	and	2013.	At December	31,	2014,	the	pension	plans	and	the	Postretirement	Health	Care	Benefits	Plan	investment	portfolios	were	comprised	of	approximately	43	percent	and	20 percent	equity	investments,	respectively.

A	second	key	assumption	is	the	discount	rate.	The	discount	rate	assumptions	used	for	pension	benefits	and	postretirement	health	care	benefits	reflect,	at December	31	of	each	year,	the	prevailing	market	rates	for	high-quality,	fixed-income	debt	instruments	that,	if	the	obligation	was	settled	at	the	measurement	date, would	provide	the	necessary	future	cash	flows	to	pay	the	benefit	obligation	when	due.	Our	discount	rates	for	measuring	our	U.S.	pension	benefit	obligations	were 4.30%	and	5.15%	at	December	2014	and	2013,	respectively.	Our	discount	rates	for	measuring	the	Postretirement	Health	Care	Benefits	Plan	obligation	were	3.90% and	4.65%	at	December	31,	2014	and	2013,	respectively.

A	final	set	of	assumptions	involves	the	cost	drivers	of	the	underlying	benefits.	The	rate	of	compensation	increase	is	a	key	assumption	used	in	the	actuarial model	for	pension	accounting	and	is	determined	by	us	based	upon	our	long-term	plans	for	such	increases.	Our	2014	and	2013	rate	for	future	compensation	increase for	the	U.S.	Pension	Benefit	Plans	was	0%,	as	the	salaries	to	be	utilized	for	calculation	of	benefits	under	these	plans	have	been	frozen.	For	the	Postretirement	Health Care	Benefits	Plan,	we	review	external	data	and	our	own	historical	trends	for	health	care	costs	to	determine	the	health	care	cost	trend	rates.	The	health	care	cost trend	rate	used	to	determine	the	accumulated	postretirement	benefit	obligation	and	2015	net	periodic	benefit	was	7.75%,	then	grading	down	to	a	rate	of	5.00%	in 2021.		The	health	care	cost	trend	rate	used	to	determine	the	December	31,	2013	accumulated	postretirement	benefit	obligation	was	8.50%	for	2014,	remaining	flat	at 8.50%	through	2015,	then	grading	down	to	a	rate	of	5.00%	in	2020.

Prior	to	2013,	unrecognized	gains	and	losses	were	amortized	over	periods	ranging	from	three	to	thirteen	years.	At	the	close	of	fiscal	2012,	we	determined	that the	majority	of	the	plan	participants	in	our	Regular	and	United	Kingdom	pension	plans	were	no	longer	actively	employed	due	to	significant	employee	exits	as	a	result of	our	recent	divestitures.	Under	relevant	accounting	rules,	when	almost	all	of	the	plan	participants	are	considered	inactive,	the	amortization	period	for	certain unrecognized	losses	changes	from	the	average	remaining	service	period	to	the	average	remaining	lifetime	of	the	participant.		As	such,	depending	on	the	specific	plan, we	amortize	gains	and	losses	over	periods	ranging	from	four	to	thirty-six	years.	Prior	service	costs	are	being	amortized	over	periods	ranging	from	six	to	twelve	years. Benefits	under	all	pension	plans	are	valued	based	on	the	projected	unit	credit	cost	method.

Our	pension	deficit	is	impacted	by	the	volatility	of	corporate	bond	rates	which	are	used	to	determine	the	plan	discount	rate	as	well	as	returns	on	the	pension	plan asset	portfolio.	The	discount	rate	used	to	measure	the	New	Plan	liability	at	the	end	of	2014	was	4.30%,	compared	to	5.15%	in	the	prior	year.	As	of	December	31, 2014,	changing	the	New	Plan	discount	rate	by	one	percentage	point	would	change	the	net	periodic	pension	cost	in	2015	as	follows:

# Valuation	and	Recoverability	of	Goodwill

We	assess	the	recorded	amount	of	goodwill	for	recovery	on	an	annual	basis	in	the	fourth	quarter	of	each	fiscal	year.	Goodwill	is	assessed	more	frequently	if	an event	occurs	or	circumstances	change	that	would	indicate	it	is	more-likely-than-not	that	the	fair	value	of	a	reporting	unit	is	below	its	carrying	amount.	We	continually assess	whether	any	such	events	and	circumstances	have	occurred,	which	requires	a	significant	amount	of	judgment.	Such	events	and	circumstances	may	include: adverse	changes	in	macroeconomic	conditions,	adverse	changes	in	the	entity's	industry	or	market,	changes	in	cost	factors	negatively	impacting	earnings	and	cash flows,	negative	or	declining	overall	financial	performance,	events	affecting	the	carrying

value	or	composition	of	a	reporting	unit,	or	a	sustained	decrease	in	share	price,	among	others.	Any	such	adverse	event	or	change	in	circumstances	could	have	a significant	impact	on	the	recoverability	of	goodwill	and	could	have	a	material	impact	on	our	consolidated	financial	statements.

The	goodwill	impairment	assessment	is	performed	at	the	reporting	unit	level.	A	reporting	unit	is	an	operating	segment	or	one	level	below	an	operating	segment (referred	to	as	a	"component").	A	component	of	an	operating	segment	is	a	reporting	unit	if	the	component	constitutes	a	business	for	which	discrete	financial information	is	available	and	segment	management	regularly	reviews	the	operating	results	of	that	component.	When	two	or	more	components	of	an	operating	segment have	similar	economic	characteristics,	the	components	are	aggregated	and	deemed	a	single	reporting	unit.	An	operating	segment	is	deemed	to	be	a	reporting	unit	if all	of	its	components	are	similar,	if	none	of	its	components	is	a	reporting	unit,	or	if	the	segment	comprises	only	a	single	component.	Based	on	this	guidance,	we	have determined	that	our	Products	and	Services	segments	each	meet	the	definition	of	a	reporting	unit.	We	performed	a	qualitative	assessment	of	goodwill	and	determined that	it	was	not	more-likely-than-not	that	the	fair	value	of	each	reporting	unit	was	less	than	its	carrying	amount	for	the	fiscal	years	2014,	2013,	and	2012.	In	performing this	qualitative	assessment	we	assessed	relevant	events	and	circumstances	including	macroeconomic	conditions,	industry	and	market	conditions,	cost	factors,	overall financial	performance,	changes	in	share	price,	and	entity-specific	events.	For	fiscal	years	2014,	2013,	and	2012,	we	concluded	it	was	more-likely-than-not	that	the	fair value	of	each	reporting	unit	exceeded	its	carrying	value.	Therefore,	the	two-step	goodwill	impairment	test	was	not	required	and	there	was	no	impairment	of	goodwill. Therefore,	the	two-step	goodwill	impairment	test	was	not	required	and	there	was	no	impairment	of	goodwill.

# Recent	Accounting	Pronouncements

In	May	2014,	the	FASB	issued	ASU	No.	2014-09,	"Revenue	from	Contracts	with	Customers."	This	new	standard	will	replace	most	existing	revenue	recognition guidance	in	U.S.	GAAP.	The	core	principle	of	the	ASU	is	that	an	entity	should	recognize	revenue	for	the	transfer	of	goods	or	services	equal	to	the	amount	it	expects to	receive	for	those	goods	and	services.	The	ASU	requires	additional	disclosure	about	the	nature,	amount,	timing	and	uncertainty	of	revenue	and	cash	flows	arising from	customer	contracts,	including	significant	judgments	and	estimates	and	changes	in	those	estimates.	The	ASU	will	be	effective	for	us	beginning	January	1,	2017, and	allows	for	both	retrospective	and	modified-retrospective	methods	of	adoption.	We	are	in	the	process	of	determining	the	method	of	adoption	we	will	elect	and	are currently	assessing	the	impact	of	this	ASU	on	our	consolidated	financial	statements	and	footnote	disclosures.

# Forward-Looking	Statements

Except	for	historical	matters,	the	matters	discussed	in	this	Form	10-K	are	forward-looking	statements	that	involve	risks	and	uncertainties.	Forward-looking statements	include,	but	are	not	limited	to,	statements	under	the	following	headings:	(1)	"Business,"	about:	(a)	industry	growth	and	demand,	including	opportunities resulting	from	such	growth,	(b)	future	product	development	and	the	demand	for	new	products,	(c)	customer	spending,	(d)	the	impact	of	our	strategy	and	focus	areas, (e)	the	impact	from	the	loss	of	key	customers,	(f)	competitive	position	and	our	ability	to	maintain	a	leadership	position	in	our	core	products,	(g)	increased	competition, (h)	the	impact	of	regulatory	matters,	(i)	the	impact	from	the	allocation	and	regulation	of	spectrum,	particularly	with	respect	to	broadband	spectrum,	(j)	the	firmness	of each	segment's	backlog,	(k)	the	competitiveness	of	the	patent	portfolio,	(l)	the	impact	of	research	and	development	(m)	the	availability	of	materials	and	components, energy	supplies	and	labor,	and	(n)	the	seasonality	of	the	business,;	(2)	"Properties,"	about	the	sufficiency	of	our	manufacturing	capacity	and	the	consequences	of	a disruption	in	manufacturing;	(3)	"Legal	Proceedings,"	about	the	ultimate	disposition	of	pending	legal	matters	and	timing;	(4)	"Management's	Discussion	and	Analysis," about:	(a)	market	growth/contraction,	demand,	spending	and	resulting	opportunities,	(b)	the	increase	in	public	safety	LTE	revenues	in	2015,	(c)	the	decline	in	iDEN, (d)	the	return	of	capital	to	shareholders	through	dividends	and/or	repurchasing	shares,	(e)	the	success	of	our	business	strategy	and	portfolio,	(f)	future	payments, charges,	use	of	accruals	and	expected	cost-saving	and	profitability	benefits	associated	with	our	reorganization	of	business	programs	and	employee	separation	costs, (g)	our	ability	and	cost	to	repatriate	funds,	(h)	the	impact	of	the	timing	and	level	of	sales	and	the	geographic	location	of	such	sales,	(i)	the	impact	of	maintaining inventory,	(j)	future	cash	contributions	to	pension	plans	or	retiree	health	benefit	plans,	(k)	the	liquidity	of	our	investments,	(l)	our	ability	and	cost	to	access	the	capital markets,	(m)	our	ability	to	borrow	and	the	amount	available	under	our	credit	facilities,	(n)	our	ability	to	retire	outstanding	debt,	(o)	our	ability	and	cost	to	obtain Performance	Bonds,	(p)	adequacy	of	internal	resources	to	fund	expected	working	capital	and	capital	expenditure	measurements,	(q)	expected	payments	pursuant	to commitments	under	long-term	agreements,	(r)	the	ability	to	meet	minimum	purchase	obligations,	(s)	our	ability	to	sell	accounts	receivable	and	the	terms	and	amounts of	such	sales,	(t)	the	outcome	and	effect	of	ongoing	and	future	legal	proceedings,	(u)	the	impact	of	recent	accounting	pronouncements	on	our	financial	statements, (v)	the	impact	of	the	loss	of	key	customers,	and	(w)	the	expected	effective	tax	rate	and	deductibility	of	certain	items;	and	(5)	"Quantitative	and	Qualitative	Disclosures about	Market	Risk,"	about:	(a)	the	impact	of	foreign	currency	exchange	risks,	(b)	future	hedging	activity	and	expectations	of	the	Company,	and	(c)	the	ability	of counterparties	to	financial	instruments	to	perform	their	obligations.

Some	of	the	risk	factors	that	affect	our	business	and	financial	results	are	discussed	in	"Item	1A:	Risk	Factors."	We	wish	to	caution	the	reader	that the	risk	factors	discussed	in	"Item	1A:	Risk	Factors,"	and	those	described	elsewhere	in	this	report	or	in	our	other	Securities	and	Exchange	Commission filings,	could	cause	our	actual	results	to	differ	materially	from	those	stated	in	the	forward-looking	statements.

# Item	7A.	Quantitative	and	Qualitative	Disclosures	About	Market	Risk

# Interest	Rate	Risk

As	of	December	31,	2014,	we	have	$3.4	billion	of	long-term	debt,	including	the	current	portion	of	long-term	debt,	which	is	primarily	priced	at	long-term,	fixed interest	rates.	Of	this	total	long-term	debt	amount,	a	$36	million	Euro-denominated	variable

interest	loan	has	a	hedge	that	changes	the	interest	rate	characteristics	from	variable	to	fixed-rate.	A	hypothetical	unfavorable	movement	of	10%	in	the	interest	rates would	have	an	immaterial	impact	on	the	hedge's	fair	value.

# Foreign	Currency	Risk

We	use	financial	instruments	to	reduce	our	overall	exposure	to	the	effects	of	currency	fluctuations	on	cash	flows.	Our	policy	prohibits	speculation	in	financial instruments	for	profit	on	exchange	rate	price	fluctuations,	trading	in	currencies	for	which	there	are	no	underlying	exposures,	or	entering	into	transactions	for	any currency	to	intentionally	increase	the	underlying	exposure.	Instruments	that	are	designated	as	part	of	a	hedging	relationship	must	be	effective	at	reducing	the	risk associated	with	the	exposure	being	hedged	and	are	designated	as	part	of	a	hedging	relationship	at	the	inception	of	the	contract.	Accordingly,	changes	in	the	market values	of	hedge	instruments	must	be	highly	correlated	with	changes	in	market	values	of	the	underlying	hedged	items	both	at	the	inception	of	the	hedge	and	over	the life	of	the	hedge	contract.

Our	strategy	related	to	foreign	exchange	exposure	management	is	to	offset	the	gains	or	losses	on	the	financial	instruments	against	losses	or	gains	on	the underlying	operational	cash	flows	or	investments	based	on	our	assessment	of	risk.	We	enter	into	derivative	contracts	for	some	of	our	non-functional	currency	cash, receivables,	and	payables,	which	are	primarily	denominated	in	major	currencies	that	can	be	traded	on	open	markets.	We	typically	use	forward	contracts	and	options to	hedge	these	currency	exposures.	In	addition,	we	enter	into	derivative	contracts	for	some	forecasted	transactions,	which	are	designated	as	part	of	a	hedging relationship	if	it	is	determined	that	the	transaction	qualifies	for	hedge	accounting	under	the	provisions	of	the	authoritative	accounting	guidance	for	derivative instruments	and	hedging	activities.	A	portion	of	our	exposure	is	from	currencies	that	are	not	traded	in	liquid	markets	and	these	are	addressed,	to	the	extent reasonably	possible,	by	managing	net	asset	positions,	product	pricing	and	component	sourcing.

At	December	31,	2014,	we	had	outstanding	foreign	exchange	contracts	totaling	$628	million,	compared	to	$837	million	outstanding	at	December	31,	2013. Management	believes	that	these	financial	instruments	should	not	subject	us	to	undue	risk	due	to	foreign	exchange	movements	because	gains	and	losses	on	these contracts	should	generally	offset	losses	and	gains	on	the	underlying	assets,	liabilities	and	transactions,	except	for	the	ineffective	portion	of	the	instruments,	which	is charged	to	Other	within	Other	income	(expense)	in	our	consolidated	statements	of	operations.

The	following	table	shows	the	five	largest	net	notional	amounts	of	the	positions	to	buy	or	sell	foreign	currency	as	of	December	31,	2014	and	the	corresponding positions	as	of	December	31,	2013:

|  | Notional	Amount | Notional	Amount |
| :--- | :--- | :--- |
| Net\tBuy\t(Sell)\tby\tCurrency | 2014 | 2013 |
| Euro | $214 | $(132) |
| Chinese\tRenminbi | (161) | (181) |
| Norwegian\tKrone | (90) | (95) |
| Australian\tDollar | (42) | (17) |
| British\tPound | 34 | 257 |

Foreign	exchange	financial	instruments	that	are	subject	to	the	effects	of	currency	fluctuations,	which	may	affect	reported	earnings,	include	derivative	financial instruments	and	other	monetary	assets	and	liabilities	denominated	in	a	currency	other	than	the	functional	currency	of	the	legal	entity	holding	the	instrument. Derivative	financial	instruments	consist	primarily	of	currency	forward	contracts	and	options.	Other	monetary	assets	and	liabilities	denominated	in	a	currency	other	than the	functional	currency	of	the	legal	entity	consist	primarily	of	cash,	cash	equivalents,	short-term	investments,	as	well	as	accounts	payable	and	receivable.	Accounts payable	and	receivable	are	reflected	at	fair	value	in	the	financial	statements.	Assuming	the	amounts	of	the	outstanding	foreign	exchange	contracts	represent	our underlying	foreign	exchange	risk	related	to	monetary	assets	and	liabilities,	a	hypothetical	unfavorable	10%	movement	in	the	foreign	exchange	rates,	from	current levels,	would	reduce	the	value	of	those	monetary	assets	and	liabilities	by	approximately	$62	million.	Our	market	risk	calculation	represents	an	estimate	of	reasonably possible	net	losses	that	would	be	recognized	assuming	hypothetical	10%	movements	in	future	currency	market	pricing	and	is	not	necessarily	indicative	of	actual results,	which	may	or	may	not	occur.	It	does	not	represent	the	maximum	possible	loss	or	any	expected	loss	that	may	occur,	since	actual	future	gains	and	losses	will differ	from	those	estimated,	based	upon,	among	other	things,	actual	fluctuation	in	market	rates,	operating	exposures,	and	the	timing	thereof.	We	believe,	however, that	any	such	loss	incurred	would	be	offset	by	the	effects	of	market	rate	movements	on	the	respective	underlying	derivative	financial	instruments	transactions.	The foreign	exchange	financial	instruments	are	held	for	purposes	other	than	trading.

®	Reg.	U.S.	Patent	&	Trademark	Office.

MOTOROLA	MOTO,	MOTOROLA	SOLUTIONS	and	the	Stylized	M	Logo,	as	well	as	iDEN	are	trademarks	or	registered	trademarks	of	Motorola	Trademark Holdings,	LLC	and	are	used	under	license.	All	other	products	or	service	names	are	the	property	of	their	respective	owners.

# Item	8:	Financial	Statements	and	Supplementary	Data

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

The	Board	of	Directors	and	Stockholders

We	have	audited	the	accompanying	consolidated	balance	sheets	of	Motorola	Solutions,	Inc.	and	Subsidiaries	as	of	December	31,	2014	and	2013,	and	the related	consolidated	statements	of	operations,	comprehensive	income,	stockholders'	equity,	and	cash	flows	for	each	of	the	years	in	the	three-year	period	ended December	31,	2014.	These	consolidated	financial	statements	are	the	responsibility	of	the	Company's	management.	Our	responsibility	is	to	express	an	opinion	on these	consolidated	financial	statements	based	on	our	audits.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that we	plan	and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement.	An	audit	includes	examining, on	a	test	basis,	evidence	supporting	the	amounts	and	disclosures	in	the	financial	statements.	An	audit	also	includes	assessing	the	accounting	principles	used	and significant	estimates	made	by	management,	as	well	as	evaluating	the	overall	financial	statement	presentation.	We	believe	that	our	audits	provide	a	reasonable	basis for	our	opinion.

In	our	opinion,	the	consolidated	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	financial	position	of	Motorola	Solutions,	Inc.	and Subsidiaries	as	of	December	31,	2014	and	2013,	and	the	results	of	their	operations	and	their	cash	flows	for	each	of	the	years	in	the	three-year	period	ended December	31,	2014,	in	conformity	with	U.S.	generally	accepted	accounting	principles.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	Motorola	Solutions,	Inc.'s	internal control	over	financial	reporting	as	of	December	31,	2014,	based	on	criteria	established	in	Internal	Control	-	Integrated	Framework	(2013)	issued	by	the	Committee	of Sponsoring	Organizations	of	the	Treadway	Commission	(COSO),	and	our	report	dated	February	13,	2015	expressed	an	unqualified	opinion	on	the	effectiveness	of the	Company's	internal	control	over	financial	reporting.

Chicago,	Illinois

# Consolidated	Statements	of	Operations

| (In	millions,	except	per	share	amounts) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Net\tsales\tfrom\tproducts | $3,807 | $4,109 | $4,236 |
| Net\tsales\tfrom\tservices | 2,074 | 2,118 | 2,033 |
| Net\tsales | 5,881 | 6,227 | 6,269 |
| Costs\tof\tproduct\tsales | 1,678 | 1,808 | 1,795 |
| Costs\tof\tservices\tsales | 1,372 | 1,310 | 1,280 |
| Costs\tof\tsales | 3,050 | 3,118 | 3,075 |
| Gross\tmargin | 2,831 | 3,109 | 3,194 |
| Selling,\tgeneral\tand\tadministrative\texpenses | 1,184 | 1,330 | 1,472 |
| Research\tand\tdevelopment\texpenditures | 681 | 761 | 790 |
| Other\tcharges | 1,972 | 71 | 12 |
| Operating\tearnings\t(loss) | (1,006) | 947 | 920 |
| Other\tincome\t(expense): |  |  |  |
| Interest\texpense,\tnet | (126) | (113) | (66) |
| Gains\ton\tsales\tof\tinvestments | 5 | 37 | 26 |
| Other | (34) | 9 | 1 |
| Total\tother\texpense | (155) | (67) | (39) |
| Earnings\t(loss)\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | (1,161) | 880 | 881 |
| Income\ttax\texpense\t(benefit) | (465) | (59) | 211 |
| Earnings\t(loss)\tfrom\tcontinuing\toperations | (696) | 939 | 670 |
| Earnings\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 1,996 | 166 | 211 |
| Net\tearnings | 1,300 | 1,105 | 881 |
| Less:\tEarnings\tattributable\tto\tnoncontrolling\tinterests | 1 | 6 | — |
| Net\tearnings\tattributable\tto\tMotorola\tSolutions,\tInc. | $1,299 | $1,099 | $881 |
| Amounts\tattributable\tto\tMotorola\tSolutions,\tInc.\tcommon\tstockholders: |  |  |  |
| Earnings\t(loss)\tfrom\tcontinuing\toperations,\tnet\tof\ttax | $(697) | $933 | $670 |
| Earnings\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 1,996 | 166 | 211 |
| Net\tearnings | $1,299 | $1,099 | $881 |
| Earnings\t(loss)\tper\tcommon\tshare: |  |  |  |
| Basic: |  |  |  |
| Continuing\toperations |  |  |  |
|  | $(2.84) | $3.51 | $2.29 |
| Discontinued\toperations | 8.13 | 0.62 | 0.73 |
|  | $5.29 | $4.13 | $3.02 |
| Diluted: |  |  |  |
| Continuing\toperations | $(2.84) | $3.45 | $2.25 |
| Discontinued\toperations | 8.13 | 0.61 | 0.71 |
|  | $5.29 | $4.06 | $2.96 |
| Weighted\taverage\tcommon\tshares\toutstanding: |  |  |  |
| Basic | 245.6 | 266.0 | 292.1 |
| Diluted | 245.6 | 270.5 | 297.4 |
| Dividends\tdeclared\tper\tshare | $1.30 | $1.14 | $0.96 |

See	accompanying	notes	to	consolidated	financial	statements.

# Consolidated	Statements	of	Comprehensive	Income

|  |  | Years	ended	December	31 |  |
| :--- | :--- | :--- | :--- |
| (In\tmillions) | 2014 | 2013 | 2012 |
| Net\tearnings | $1,300 | $1,105 | $881 |
| Other\tcomprehensive\tincome\t(loss): |  |  |  |
| Amortization\tof\tretirement\tbenefit\tadjustments,\tnet\tof\ttax\tof\t$17,\t$40,\tand\t$99 | 44 | 70 | 177 |
| Mid-year\tremeasurement\tof\tretirement\tbenefit\tadjustments\tand\tother\tamendment,\tnet\tof\ttax\tof\t$(294),\t$-,\nand\t$52 | (353) | — | 87 |
| Year-end\tremeasurement\tof\tretirement\tbenefit\tadjustments,\tnet\tof\ttax\tof\t$(153),\t$571,\tand\t$(419) | (365) | 953 | (707) |
| Pension\tsettlement\tadjustment,\tnet\tof\ttax\tof\t$715 | 1,168 | — | — |
| Foreign\tcurrency\ttranslation\tadjustment,\tnet\tof\ttax\tof\t$(9),\t$(7),\tand\t$(4) | (49) | (4) | 14 |
| Net\tgain\t(loss)\ton\tderivative\thedging\tinstruments,\tnet\tof\ttax\tof\t$-,\t$1,\tand\t$(1) | 1 | (2) | 4 |
| Net\tunrealized\tgain\t(loss)\ton\tsecurities,\tnet\tof\ttax\tof\t$26,\t$1,\tand\t$1 | 46 | (4) | 1 |
| Disposition\tof\tthe\tEnterprise\tbusiness,\tnet\tof\ttax\tof\t$(16) | (60) | — | — |
| Total\tother\tcomprehensive\tincome\t(loss) | 432 | 1,013 | (424) |
| Comprehensive\tincome | 1,732 | 2,118 | 457 |
| Less:\tEarnings\tattributable\tto\tnoncontrolling\tinterest | 1 | 6 | — |
| Comprehensive\tincome\tattributable\tto\tMotorola\tSolutions,\tInc.\tcommon\tshareholders | $1,731 | $2,112 | $457 |

# Consolidated	Balance	Sheets

|  | December	31 |  |
| :--- | :--- | :--- |
| (In\tmillions,\texcept\tpar\tvalue) | 2014 | 2013 |
| ASSETS |  |  |
| Cash\tand\tcash\tequivalents | $3,954 | $3,225 |
| Accounts\treceivable,\tnet | 1,409 | 1,369 |
| Inventories,\tnet | 345 | 347 |
| Deferred\tincome\ttaxes | 431 | 451 |
| Other\tcurrent\tassets | 740 | 635 |
| Current\tassets\theld\tfor\tdisposition | — | 993 |
| Total\tcurrent\tassets | 6,879 | 7,020 |
| Property,\tplant\tand\tequipment,\tnet | 549 | 610 |
| Investments | 316 | 232 |
| Deferred\tincome\ttaxes | 2,151 | 1,990 |
| Goodwill | 383 | 361 |
| Other\tassets | 145 | 89 |
| Non-current\tassets\theld\tfor\tdisposition | — | 1,549 |
| Total\tassets | $10,423 | $11,851 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |
| Current\tportion\tof\tlong-term\tdebt | $4 | $4 |
| Accounts\tpayable | 540 | 583 |
| Accrued\tliabilities | 1,706 | 1,763 |
| Current\tliabilities\theld\tfor\tdisposition | — | 870 |
| Total\tcurrent\tliabilities | 2,250 | 3,220 |
| Long-term\tdebt | 3,396 | 2,457 |
| Other\tliabilities | 2,011 | 2,314 |
| Non-current\tliabilities\theld\tfor\tdisposition | — | 171 |
| Stockholders'\tEquity |  |  |
| Preferred\tstock,\t$100\tpar\tvalue | — | — |
| Common\tstock,\t$.01\tpar\tvalue: | 2 | 3 |
| Authorized\tshares:\t600.0 |  |  |
| Issued\tshares:\t12/31/14—220.5;\t12/31/13—255.5 |  |  |
| Outstanding\tshares:\t12/31/14—219.8;\t12/31/13—254.5 |  |  |
| Additional\tpaid-in\tcapital | 1,178 | 3,518 |
| Retained\tearnings | 3,410 | 2,425 |
| Accumulated\tother\tcomprehensive\tloss | (1,855) | (2,287) |
| Total\tMotorola\tSolutions,\tInc.\tstockholders'\tequity | 2,735 | 3,659 |
| Noncontrolling\tinterests | 31 | 30 |
| Total\tstockholders'\tequity | 2,766 | 3,689 |
| Total\tliabilities\tand\tstockholders'\tequity | $10,423 | $11,851 |

# Consolidated	Statements	of	Stockholders'	Equity

|  |  | Common	Stock	and | Accumulated	Other |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Additional\tPaid-in | Comprehensive\tIncome | Retained |  |
| (In\tmillions,\texcept\tper\tshare\tamounts) | Shares | Capital | (Loss) | Earnings | Noncontrolling\tInterests |
| Balance\tas\tof\tJanuary\t1,\t2012 | 320 | $7,074 | $(2,876) | $1,016 | $60 |
| Net\tearnings |  |  |  | 881 | — |
| Net\tunrealized\tgain\ton\tsecurities,\tnet\tof\ttax\tof\t$1 |  |  | 1 |  |  |
| Foreign\tcurrency\ttranslation\tadjustments,\tnet\tof\ttax\tbenefit\tof\t$(4) |  |  | 14 |  |  |
| Amortization\tof\tretirement\tbenefit\tadjustments,\tnet\tof\ttax\tof\t$99 |  |  | 177 |  |  |
| Remeasurement\tof\tretirement\tbenefits,\tnet\tof\ttax\tof\t$52 |  |  | 87 |  |  |
| Year-end\tand\tother\tretirement\tadjustments,\tnet\tof\ttax\tof\t$(419) |  |  | (707) |  |  |
| Issuance\tof\tcommon\tstock\tand\tstock\toptions\texercised | 6.9 | 80 |  |  |  |
| Share\trepurchase\tprogram | (49.6) | (2,438) |  |  |  |
| Excess\ttax\tbenefit\tfrom\tshare-based\tcompensation |  | 20 |  |  |  |
| Share-based\tcompensation\texpense |  | 184 |  |  |  |
| Net\tgain\ton\tderivative\thedging\tinstruments,\tnet\tof\ttax\tof\t$(1) |  |  | 4 |  |  |
| Acquisition\tof\tnoncontrolling\tinterest\tfrom\tJapanese\tsubsidiary |  | 20 |  |  | (35) |
| Dividends\tdeclared |  |  |  | (272) |  |
| Balance\tas\tof\tDecember\t31,\t2012 | 277.3 | $4,940 | $(3,300) | $1,625 | $25 |
| Net\tearnings |  |  |  | 1,099 | 6 |
| Net\tunrealized\tloss\ton\tsecurities,\tnet\tof\ttax\tof\t$1 |  |  | (4) |  |  |
| Foreign\tcurrency\ttranslation\tadjustments,\tnet\tof\ttax\tof\t$(7) |  |  | (4) |  |  |
| Amortization\tof\tretirement\tbenefit\tadjustments,\tnet\tof\ttax\tof\t$40 |  |  | 70 |  |  |
| Year-end\tand\tother\tretirement\tadjustments,\tnet\tof\ttax\tof\t$571 |  |  | 953 |  |  |
| Issuance\tof\tcommon\tstock\tand\tstock\toptions\texercised | 6.8 | 100 |  |  |  |
| Share\trepurchase\tprogram | (28.6) | (1,694) |  |  |  |
| Excess\ttax\tbenefit\tfrom\tshare-based\tcompensation |  | 25 |  |  |  |
| Share-based\tcompensation\texpense |  | 153 |  |  |  |
| Net\tloss\ton\tderivative\thedging\tinstruments,\tnet\tof\ttax\tof\t$1 |  |  | (2) |  |  |
| Purchase\tof\tnoncontrolling\tinterest\tin\tsubsidiary |  | (3) |  |  | (1) |
| Dividends\tdeclared |  |  |  | (299) |  |
| Balance\tas\tof\tDecember\t31,\t2013 | 255.5 | $3,521 | $(2,287) | $2,425 | $30 |
| Net\tearnings |  |  |  | 1,299 | 1 |
| Net\tunrealized\tgain\ton\tsecurities,\tnet\tof\ttax\tof\t$26 |  |  | 46 |  |  |
| Foreign\tcurrency\ttranslation\tadjustments,\tnet\tof\ttax\tof\t$(9) |  |  | (49) |  |  |
| Mid-year\tremeasurement\tof\tretirement\tbenefits,\tnet\tof\ttax\tof\t$(294) |  |  | (353) |  |  |
| Pension\tsettlement\tadjustment,\tnet\tof\ttax\tof\t$715 |  |  | 1,168 |  |  |
| Amortization\tof\tretirement\tbenefit\tadjustments,\tnet\tof\ttax\tof\t$17 |  |  | 44 |  |  |
| Year-end\tretirement\tadjustments,\tnet\tof\ttax\tof\t$(153) |  |  | (365) |  |  |
| Issuance\tof\tcommon\tstock\tand\tstock\toptions\texercised | 4.4 | 86 |  |  |  |
| Share\trepurchase\tprogram | (39.4) | (2,546) |  |  |  |
| Excess\ttax\tbenefit\tfrom\tshare-based\tcompensation |  | 5 |  |  |  |
| Share-based\tcompensation\texpense |  | 114 |  |  |  |
| Net\tgain\ton\tderivative\thedging\tinstruments,\tnet\tof\ttax\tof\t$- |  |  | 1 |  |  |
| Dividends\tdeclared |  |  |  | (314) |  |
| Disposition\tof\tthe\tEnterprise\tbusiness,\tnet\tof\ttax\tof\t($16) |  |  | (60) |  |  |
| Balance\tas\tof\tDecember\t31,\t2014 | 220.5 | $1,180 | $(1,855) | $3,410 | $31 |

# Consolidated	Statements	of	Cash	Flows

| (In	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Operating |  |  |  |
| Net\tearnings\tattributable\tto\tMotorola\tSolutions,\tInc. | $1,299 | $1,099 | $881 |
| Earnings\tattributable\tto\tnoncontrolling\tinterests | 1 | 6 | — |
| Net\tearnings | 1,300 | 1,105 | 881 |
| Earnings\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 1,996 | 166 | 211 |
| Earnings\t(loss)\tfrom\tcontinuing\toperations,\tnet\tof\ttax | (696) | 939 | 670 |
| Adjustments\tto\treconcile\tearnings\t(loss)\tfrom\tcontinuing\toperations\tto\tnet\tcash\tprovided\tby\t(used\tfor)\toperating\tactivities: |  |  |  |
| Depreciation\tand\tamortization | 173 | 158 | 151 |
| Non-cash\tother\tincome | — | (14) | — |
| Gain\ton\tsale\tof\tbuilding\tand\tland | (21) | — | — |
| Loss\ton\tpension\tplan\tsettlement | 1,883 | — | — |
| Share-based\tcompensation\texpense | 94 | 120 | 146 |
| Gains\ton\tsales\tof\tinvestments | (5) | (37) | (26) |
| Loss\tfrom\tthe\textinguishment\tof\tlong-term\tdebt | 37 | — | 6 |
| Deferred\tincome\ttaxes | (557) | (334) | 114 |
| Changes\tin\tassets\tand\tliabilities,\tnet\tof\teffects\tof\tacquisitions\tand\tdispositions: |  |  |  |
| Accounts\treceivable | (62) | (36) | 81 |
| Inventories | (5) | (8) | (2) |
| Other\tcurrent\tassets | (47) | 50 | (112) |
| Accounts\tpayable\tand\taccrued\tliabilities | (120) | (232) | (106) |
| Other\tassets\tand\tliabilities | (1,359) | (51) | (248) |
| Net\tcash\tprovided\tby\t(used\tfor)\toperating\tactivities\tfrom\tcontinuing\toperations | (685) | 555 | 674 |
| Investing |  |  |  |
| Acquisitions\tand\tinvestments,\tnet | (47) | (57) | 83 |
| Proceeds\tfrom\t(used\tfor)\tsales\tof\tinvestments\tand\tbusinesses,\tnet | 3,403 | 61 | (58) |
| Capital\texpenditures | (181) | (169) | (170) |
| Proceeds\tfrom\tsales\tof\tproperty,\tplant\tand\tequipment | 33 | 66 | 40 |
| Proceeds\tfrom\tsales\tof\tSigma\tFund\tinvestments\tand\tshort-term\tinvestments,\tnet | — | 2,133 | 1,075 |
| Net\tcash\tprovided\tby\tinvesting\tactivities\tfrom\tcontinuing\toperations | 3,208 | 2,034 | 970 |
| Financing |  |  |  |
| Repayment\tof\tdebt | (465) | (4) | (413) |
| Net\tproceeds\tfrom\tissuance\tof\tdebt | 1,375 | 593 | 747 |
| Contributions\tto\tMotorola\tMobility | — | — | (73) |
| Issuance\tof\tcommon\tstock |  |  |  |
|  | 135 | 165 | 133 |
| Purchase\tof\tcommon\tstock | (2,546) | (1,694) | (2,438) |
| Excess\ttax\tbenefit\tfrom\tshare-based\tcompensation | 11 | 25 | 20 |
| Payment\tof\tdividends | (318) | (292) | (270) |
| Distributions\tfrom\tdiscontinued\toperations | 93 | 365 | 217 |
| Net\tcash\tused\tfor\tfinancing\tactivities\tfrom\tcontinuing\toperations | (1,715) | (842) | (2,077) |
| Net\tcash\tprovided\tby\toperating\tactivities\tfrom\tdiscontinued\toperations | 95 | 389 | 396 |
| Net\tcash\tprovided\tby\t(used\tfor)\tinvesting\tactivities\tfrom\tdiscontinued\toperations | 4 | (24) | (173) |
| Net\tcash\tused\tfor\tfinancing\tactivities\tfrom\tdiscontinued\toperations | (93) | (365) | (217) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents\tfrom\tdiscontinued\toperations | (6) | — | (6) |
| Net\tcash\tprovided\tby\tdiscontinued\toperations | — | — | — |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents\tfrom\tcontinuing\toperations | (79) | 10 | 20 |
| Net\tincrease\tin\tcash\tand\tcash\tequivalents | 729 | 1,757 | (413) |
| Cash\tand\tcash\tequivalents,\tbeginning\tof\tperiod | 3,225 | 1,468 | 1,881 |
| Cash\tand\tcash\tequivalents,\tend\tof\tperiod | $3,954 | $3,225 | $1,468 |
| Supplemental\tCash\tFlow\tInformation |  |  |  |
| Cash\tpaid\tduring\tthe\tperiod\tfor: |  |  |  |
| Interest,\tnet | $128 | $122 | $109 |
| Income\tand\twithholding\ttaxes,\tnet\tof\trefunds | 105 | 246 | 127 |

# Notes	to	Consolidated	Financial	Statements

# (Dollars	in	millions,	except	as	noted)

# 1.				Summary	of	Significant	Accounting	Policies

Principles	of	Consolidation:				The	consolidated	financial	statements	include	the	accounts	of	Motorola	Solutions,	Inc.	(the	"Company"	or	"Motorola Solutions")	and	all	controlled	subsidiaries.	All	intercompany	transactions	and	balances	have	been	eliminated.

The	consolidated	financial	statements	as	of	December	31,	2014	and	2013	and	for	the	years	ended	December	31,	2014,	2013	and	2012,	include,	in	the	opinion of	management,	all	adjustments	(consisting	of	normal	recurring	adjustments	and	reclassifications)	necessary	to	present	fairly	the	Company's	consolidated	financial position,	results	of	operations,	statements	of	comprehensive	income,	statement	of	stockholder's	equity,	and	cash	flows	for	all	periods	presented.

Use	of	Estimates:	The	preparation	of	financial	statements	in	conformity	with	United	States	("U.S.")	Generally	Accepted	Accounting	Principles	("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.

Revenue	Recognition:	Net	sales	consist	of	a	wide	range	of	activities	including	the	delivery	of	stand-alone	equipment	or	services,	custom	design	and installation	over	a	period	of	time,	and	bundled	sales	of	equipment,	software	and	services.	The	Company	enters	into	revenue	arrangements	that	may	consist	of multiple	deliverables	of	its	products	and	services	due	to	the	needs	of	its	customers.	The	Company	recognizes	revenue	when	persuasive	evidence	of	an	arrangement exists,	delivery	has	occurred,	the	sales	price	is	fixed	or	determinable,	and	collectability	of	the	sales	price	is	reasonably	assured.	The	Company	recognizes	revenue from	the	sale	of	equipment,	equipment	containing	both	software	and	nonsoftware	components	that	function	together	to	deliver	the	equipment's	essential	functionality, and	services	in	accordance	with	general	revenue	recognition	accounting	principles.	The	Company	recognizes	revenue	in	accordance	with	software	accounting guidance	for	the	following	types	of	sales	transactions:	(i)	standalone	sales	of	software	products	or	software	upgrades,	(ii)	standalone	sales	of	software	maintenance agreements,	and	(iii)	sales	of	software	bundled	with	equipment	where	the	software	is	not	essential	to	the	functionality	of	that	equipment.

For	equipment	sales,	in	addition	to	the	criteria	mentioned	above,	revenue	recognition	occurs	when	title	and	risk	of	loss	has	transferred	to	the	customer, objective	evidence	exists	that	customer	acceptance	provisions	have	been	met,	no	significant	obligations	remain	and	allowances	for	discounts,	price	protection,	returns and	customer	incentives	can	be	reliably	estimated.	Recorded	revenues	are	reduced	by	these	allowances.	The	Company	bases	its	estimates	of	these	allowances	on historical	experience	taking	into	consideration	the	type	of	products	sold,	the	type	of	customer,	and	the	specific	type	of	transaction	in	each	arrangement.	Where customer	incentives	cannot	be	reliably	estimated,	the	Company	defers	revenue	until	the	incentive	has	been	finalized	with	the	customer.	The	Company	includes shipping	charges	billed	to	customers	in	net	revenue,	and	includes	the	related	shipping	costs	in	cost	of	sales.

The	Company	sells	software	and	equipment	obtained	from	other	companies.	The	Company	establishes	its	own	pricing	and	retains	related	inventory	risk,	is	the primary	obligor	in	sales	transactions	with	customers,	and	assumes	the	credit	risk	for	amounts	billed	to	customers.	Accordingly,	the	Company	generally	recognizes revenue	for	the	sale	of	products	obtained	from	other	companies	based	on	the	gross	amount	billed.

For	long-term	contracts	that	involve	customization	of	equipment	and/or	software,	the	Company	generally	recognizes	revenue	using	the	percentage	of completion	method	based	on	the	percentage	of	costs	incurred	to	date	compared	to	the	total	estimated	costs	to	complete	the	contract	("Estimated	Costs	at Completion").	The	components	of	estimated	costs	to	complete	a	contract	and	management's	process	for	reviewing	Estimated	Costs	at	Completion	and	progress toward	completion	is	discussed	further	below.	Contracts	may	be	combined	or	segmented	in	accordance	with	the	applicable	criteria	under	contract	accounting principles.	In	certain	instances,	when	revenues	or	costs	associated	with	long-term	contracts	cannot	be	reliably	estimated	or	the	contract	contains	other	inherent uncertainties,	revenues	and	costs	are	deferred	until	the	project	is	complete	and	customer	acceptance	is	obtained.

Total	Estimated	Costs	at	Completion	include	direct	labor,	material	and	subcontracting	costs.	Due	to	the	nature	of	the	work	required	to	be	performed	under	many of	the	Company's	long-term	contracts,	determining	Estimated	Costs	at	Completion	is	complex	and	subject	to	many	variables.	The	Company	has	a	standard	and disciplined	quarterly	Estimated	Costs	at	Completion	process	in	which	management	reviews	the	progress	and	performance	of	open	contracts.	As	part	of	this	process, management	reviews	information	including,	but	not	limited	to,	any	outstanding	key	contract	matters,	progress	towards	completion,	the	project	schedule,	identified risks	and	opportunities,	and	the	related	changes	in	estimates	of	revenues	and	costs.	The	risks	and	opportunities	include	management's	judgment	about	the	ability	and cost	to	achieve	the	project	schedule,	technical	requirements,	and	other	contract	requirements.	Management	must	make	assumptions	and	estimates	regarding	labor productivity	and	availability,	the	complexity	of	the	work	to	be	performed,	the	availability	of	materials,	and	performance	by	subcontractors,	among	other	variables. Based	on	this	analysis,	any	quarterly	adjustments	to	net	sales,	cost	of	sales,	and	the	related	impact	to	operating	income	are	recorded	as	necessary	in	the	period	they become	known.	These	adjustments	may	result	from	positive	project	performance,	and	may	result	in	an	increase	in	operating	income	during	the	performance	of individual	contracts.	Likewise,	these

adjustments	may	result	in	a	decrease	in	operating	income	if	Estimated	Costs	at	Completion	increase.	Changes	in	estimates	of	net	sales	or	cost	of	sales	could	affect the	profitability	of	one	or	more	of	our	contracts.	The	impact	on	Operating	earnings	as	a	result	of	changes	in	Estimated	Costs	at	Completion	was	not	significant	for	the years	2014,	2013,	and	2012.	When	estimates	of	total	costs	to	be	incurred	on	a	contract	exceed	total	estimates	of	revenue	to	be	earned,	a	provision	for	the	entire	loss on	the	contract	is	recorded	in	the	period	the	loss	is	determined.

Revenue	under	equipment	and	software	maintenance	agreements,	which	do	not	contain	specified	future	software	upgrades,	is	recognized	ratably	over	the contract	term	as	services	are	performed.

Arrangements	with	customers	may	include	multiple	deliverables,	including	any	combination	of	products,	services	and	software.	These	multiple-element arrangements	could	also	include	an	element	accounted	for	as	a	long-term	contract	coupled	with	other	products,	services	and	software.	For	multiple-element arrangements	that	include	products	containing	software	that	functions	together	with	the	equipment	to	deliver	its	essential	functionality,	undelivered	software	elements that	relate	to	the	product's	essential	software,	and	undelivered	non-software	services	deliverables	are	separated	into	more	than	one	unit	of	accounting	when:	(i)	the delivered	element(s)	have	value	to	the	customer	on	a	stand-alone	basis	and	(ii)	delivery	of	the	undelivered	element(s)	is	probable	and	substantially	in	the	control	of the	Company.

In	these	arrangements,	the	Company	allocates	revenue	to	all	deliverables	based	on	their	relative	selling	prices.	The	Company	uses	the	following	hierarchy	to determine	the	selling	price	to	be	used	for	allocating	revenue	to	deliverables:	(i)	vendor-specific	objective	evidence	of	fair	value	("VSOE"),	(ii)	third-party	evidence	of selling	price	("TPE"),	and	(iii)	best	estimate	of	selling	price	("ESP").

The	Company	determines	VSOE	based	on	its	normal	pricing	and	discounting	practices	for	the	specific	product	or	service	when	that	same	product	or	service	is sold	separately.	In	determining	VSOE,	the	Company	requires	that	a	substantial	majority	of	the	selling	prices	for	a	product	or	service	fall	within	a	reasonably	narrow pricing	range,	generally	evidenced	by	the	pricing	rates	of	approximately	80%	of	such	historical	stand-alone	transactions	falling	within	plus	or	minus	15%	of	the	median rate.

When	VSOE	does	not	exist,	the	Company	attempts	to	determine	TPE	based	on	competitor	prices	for	similar	deliverables	when	sold	separately.	Generally,	the Company's	go-to-market	strategy	for	many	of	its	products	differs	from	that	of	its	competitors	and	its	offerings	contain	a	significant	level	of	customization	and differentiation	such	that	the	comparable	pricing	of	products	with	similar	functionality	sold	by	other	companies	cannot	be	obtained.	Furthermore,	the	Company	is unable	to	reliably	determine	what	similar	competitor	products'	selling	prices	are	on	a	stand-alone	basis.	Therefore,	the	Company	is	typically	not	able	to	determine TPE.

When	both	VSOE	and	TPE	are	unavailable,	the	Company	uses	ESP.	The	Company	determines	ESP	by:	(i)	collecting	all	reasonably	available	data	points including	sales,	cost	and	margin	analysis	of	the	product,	and	other	inputs	based	on	its	normal	pricing	and	discounting	practices,	(ii)	making	any	reasonably	required adjustments	to	the	data	based	on	market	and	Company-specific	factors,	and	(iii)	stratifying	the	data	points,	when	appropriate,	based	on	customer,	magnitude	of	the transaction	and	sales	volume.

The	Company	also	considers	the	geographies	in	which	the	products	or	services	are	sold,	major	product	and	service	groups,	customer	classification,	and	other environmental	or	marketing	variables	in	determining	VSOE,	TPE,	and	ESP.

The	Company's	arrangements	with	multiple	deliverables	may	also	contain	one	or	more	software	deliverables	that	are	subject	to	software	revenue	recognition guidance.	The	revenue	for	these	multiple-element	arrangements	is	allocated	to	the	software	deliverable(s)	and	the	non-software	deliverable(s)	based	on	the	relative selling	prices	of	all	of	the	deliverables	in	the	arrangement	using	the	fair	value	hierarchy	outlined	above.	In	circumstances	where	the	Company	cannot	determine	VSOE or	TPE	of	the	selling	price	for	any	of	the	deliverables	in	the	arrangement,	ESP	is	used	for	the	purpose	of	allocating	the	arrangement	consideration	between	software and	non-software	deliverables.

The	Company	allocates	arrangement	consideration	to	multiple	software	or	software-related	deliverables,	including	the	sale	of	software	upgrades	or	software support	agreements	to	previously	sold	software,	in	accordance	with	software	accounting	guidance.	For	such	arrangements,	revenue	is	allocated	to	the	deliverables based	on	the	relative	fair	value	of	each	element,	and	fair	value	is	determined	using	VSOE.	Where	VSOE	does	not	exist	for	the	undelivered	software	element,	revenue is	deferred	until	either	the	undelivered	element	is	delivered	or	VSOE	is	established,	whichever	occurs	first.	When	the	final	undelivered	software	element	is	post contract	support,	service	revenue	is	recognized	on	a	ratable	basis	over	the	remaining	service	period.	When	VSOE	of	a	delivered	element	has	not	been	established, but	VSOE	exists	for	the	undelivered	elements,	the	Company	uses	the	residual	method	to	recognize	revenue	when	the	fair	value	of	all	undelivered	elements	is determinable.	Under	the	residual	method,	the	fair	value	of	the	undelivered	elements	is	deferred	and	the	remaining	portion	of	the	arrangement	consideration	is allocated	to	the	delivered	elements	and	is	recognized	as	revenue.

Cash	Equivalents:				The	Company	considers	all	highly-liquid	investments	purchased	with	an	original	maturity	of	three	months	or	less	to	be	cash	equivalents. Restricted	cash	was	$63	million	at	both	December	31,	2014	and	December	31,	2013.

Sigma	Fund:				Prior	to	December	2013,	the	Company	invested	most	of	its	U.S.	dollar-denominated	cash	in	a	fund	(the	"Sigma	Fund")	which	was	managed	by independent	investment	management	firms	under	specific	investment	guidelines	restricting	the	type	of	investments	held	and	their	time	to	maturity.	In	December	2013, the	Company	completed	the	liquidation	of	the	Sigma	Fund	and	migrated	the	international	U.S.	dollar	denominated	cash	to	a	U.S.	dollar	cash	pool	invested	primarily in	U.S.	dollar	prime	money	market	funds.	These	money	market	funds	are	classified	as	Cash	and	cash	equivalents	within	the	consolidated	balance	sheet	as	of	both December	31,	2014	and	2013

Investments:				Investments	in	equity	and	debt	securities	classified	as	available-for-sale	are	carried	at	fair	value.	When	applicable,	debt	securities	classified	as held-to-maturity	are	carried	at	amortized	cost.	Equity	securities	that	are	restricted	for	more	than	one	year	or	that	are	not	publicly	traded	are	carried	at	cost.	Certain investments	are	accounted	for	using	the	equity	method	if	the	Company	has	significant	influence	over	the	issuing	entity.

The	Company	assesses	declines	in	the	fair	value	of	investments	to	determine	whether	such	declines	are	other-than-temporary.	This	assessment	is	made considering	all	available	evidence,	including	changes	in	general	market	conditions,	specific	industry	and	individual	company	data,	the	length	of	time	and	the	extent	to which	the	fair	value	has	been	less	than	cost,	the	financial	condition	and	the	near-term	prospects	of	the	entity	issuing	the	security,	and	the	Company's	ability	and	intent to	hold	the	investment	until	recovery.	Other-than-temporary	impairments	of	investments	are	recorded	to	Other	within	Other	income	(expense)	in	the	Company's consolidated	statements	of	operations	in	the	period	in	which	they	become	impaired.

Inventories:				Inventories	are	valued	at	the	lower	of	average	cost	(which	approximates	cost	on	a	first-in,	first-out	basis)	or	market	(net	realizable	value	or replacement	cost).

Property,	Plant	and	Equipment:				Property,	plant	and	equipment	are	stated	at	cost	less	accumulated	depreciation.	Depreciation	is	recorded	on	a	straight- line	basis,	based	on	the	estimated	useful	lives	of	the	assets	(buildings	and	building	equipment,	five	to	forty	years;	machinery	and	equipment,	two	to	ten	years)	and commences	once	the	assets	are	ready	for	their	intended	use.

Goodwill	and	Intangible	Assets:				Goodwill	is	assessed	for	impairment	at	least	annually	at	the	reporting	unit	level.	The	Company	performs	its	annual assessment	of	goodwill	for	impairment	in	the	fourth	quarter	of	each	fiscal	year.	The	annual	assessment	is	performed	using	the	two-step	goodwill	test	which	may	also include	the	optional	qualitative	assessment	to	determine	whether	it	is	more-likely-than-not	that	the	fair	value	of	a	reporting	unit	is	less	than	its	carrying	amount	prior	to performing	the	two-step	goodwill	impairment	test.	If	this	is	the	case,	the	two-step	goodwill	impairment	test	is	required.	If	it	is	more-likely-than-not	that	the	fair	value	of a	reporting	unit	is	greater	than	its	carrying	amount,	the	two-step	goodwill	impairment	test	is	not	required.

If	the	two-step	goodwill	impairment	test	is	performed,	first,	the	fair	value	of	each	reporting	unit	is	compared	to	its	book	value.	If	the	fair	value	of	the	reporting	unit is	less	than	its	book	value,	the	Company	performs	a	hypothetical	purchase	price	allocation	based	on	the	reporting	unit's	fair	value	to	determine	the	fair	value	of	the reporting	unit's	goodwill.	Fair	value	is	determined	using	a	combination	of	present	value	techniques	and	market	prices	of	comparable	businesses.

Intangible	assets	are	amortized	on	a	straight	line	basis	over	their	respective	estimated	useful	lives	ranging	from	one	to	ten	years.	The	Company	has	no intangible	assets	with	indefinite	useful	lives.

Impairment	of	Long-Lived	Assets:	Long-lived	assets,	which	include	intangible	assets,	held	and	used	by	the	Company,	are	reviewed	for	impairment whenever	events	or	changes	in	circumstances	indicate	that	the	carrying	amount	of	assets	may	not	be	recoverable.	The	Company	evaluates	recoverability	of	assets	to be	held	and	used	by	comparing	the	carrying	amount	of	an	asset	(group)	to	future	net	undiscounted	cash	flows	to	be	generated	by	the	asset	(group).	If	an	asset (group)	is	considered	to	be	impaired,	the	impairment	to	be	recognized	is	equal	to	the	amount	by	which	the	carrying	amount	of	the	asset	(group)	exceeds	the	asset's (group's)	fair	value	calculated	using	a	discounted	future	cash	flows	analysis	or	market	comparables.	Assets	held	for	sale,	if	any,	are	reported	at	the	lower	of	the carrying	amount	or	fair	value	less	cost	to	sell.

Income	Taxes:	Deferred	tax	assets	and	liabilities	are	recognized	for	the	future	tax	consequences	attributable	to	differences	between	the	financial	statement carrying	amounts	of	existing	assets	and	liabilities	and	their	respective	tax	bases	and	operating	loss	and	tax	credit	carryforwards.	Deferred	tax	assets	and	liabilities	are measured	using	enacted	tax	rates	expected	to	apply	to	taxable	income	in	the	years	in	which	those	temporary	differences	are	expected	to	be	recovered	or	settled.	The effect	on	deferred	tax	assets	and	liabilities	from	a	change	in	tax	rates	is	recognized	in	the	period	that	includes	the	enactment	date.

Deferred	tax	assets	are	reduced	by	valuation	allowances	if,	based	on	the	consideration	of	all	available	evidence,	it	is	more-likely-than-not	that	all	or	some portion	of	the	deferred	tax	asset	will	not	be	realized.	Significant	weight	is	given	to	evidence	that	can	be	objectively	verified.	The	Company	evaluates	deferred	tax assets	on	a	quarterly	basis	to	determine	if	valuation	allowances	are	required	by	considering	available	evidence.	Deferred	tax	assets	are	realized	by	having	sufficient future	taxable	income	to	allow	the	related	tax	benefits	to	reduce	taxes	otherwise	payable.	The	sources	of	taxable	income	that	may	be	available	to	realize	the	benefit	of deferred	tax	assets	are	future	reversals	of	existing	taxable	temporary	differences,	future	taxable	income,	exclusive	of	reversing	temporary	differences	and carryforwards,	taxable	income	in	carry-back	years	and	tax	planning	strategies	that	are	both	prudent	and	feasible.

The	Company	recognizes	the	effect	of	income	tax	positions	only	if	sustaining	those	positions	is	more-likely-than-not.	Changes	in	recognition	or	measurement are	reflected	in	the	period	in	which	a	change	in	judgment	occurs.	The	Company	records

interest	related	to	unrecognized	tax	benefits	in	Interest	expense	and	penalties	in	Selling,	general	and	administrative	expenses	in	the	Company's	consolidated statements	of	operations.

Sales	and	Use	Taxes:	The	Company	records	taxes	imposed	on	revenue-producing	transactions,	including	sales,	use,	value	added	and	excise	taxes,	on	a net	basis	with	such	taxes	excluded	from	revenue.

Long-term	Receivables:				Long-term	receivables	include	trade	receivables	where	contractual	terms	of	the	note	agreement	are	greater	than	one	year.	Long- term	receivables	are	considered	impaired	when	management	determines	collection	of	all	amounts	due	according	to	the	contractual	terms	of	the	note	agreement, including	principal	and	interest,	is	no	longer	probable.	Impaired	long-term	receivables	are	valued	based	on	the	present	value	of	expected	future	cash	flows	discounted at	the	receivable's	effective	interest	rate,	or	the	fair	value	of	the	collateral	if	the	receivable	is	collateral	dependent.	Interest	income	and	late	fees	on	impaired	long-term receivables	are	recognized	only	when	payments	are	received.	Previously	impaired	long-term	receivables	are	no	longer	considered	impaired	and	are	reclassified	to performing	when	they	have	performed	under	a	workout	or	restructuring	for	four	consecutive	quarters.

Foreign	Currency:				Certain	of	the	Company's	non-U.S.	operations	use	their	respective	local	currency	as	their	functional	currency.	Those	operations	that	do not	have	the	U.S.	dollar	as	their	functional	currency	translate	assets	and	liabilities	at	current	rates	of	exchange	in	effect	at	the	balance	sheet	date	and	revenues	and expenses	using	rates	that	approximate	those	in	effect	during	the	period.	The	resulting	translation	adjustments	are	included	as	a	component	of	Accumulated	other comprehensive	loss	in	the	Company's	consolidated	balance	sheets.	For	those	operations	that	have	the	U.S.	dollar	as	their	functional	currency,	transactions denominated	in	the	local	currency	are	measured	in	U.S.	dollars	using	the	current	rates	of	exchange	for	monetary	assets	and	liabilities	and	historical	rates	of	exchange for	nonmonetary	assets.	Gains	and	losses	from	remeasurement	of	monetary	assets	and	liabilities	are	included	in	Other	within	Other	income	(expense)	within	the Company's	consolidated	statements	of	operations.

Derivative	Instruments:				Gains	and	losses	on	hedges	of	existing	assets	or	liabilities	are	marked-to-market	and	the	result	is	included	in	Other	within	Other income	(expense)	within	the	Company's	consolidated	statements	of	operations.	Certain	financial	instruments	are	used	to	hedge	firm	future	commitments	or forecasted	transactions.		Gains	and	losses	pertaining	to	those	instruments	that	qualify	for	hedge	accounting	are	deferred	until	such	time	as	the	underlying transactions	are	recognized	and	subsequently	recognized	in	the	same	line	within	the	consolidated	statements	of	operations	as	the	hedged	item.	Gains	and	losses pertaining	to	those	instruments	that	do	not	qualify	for	hedge	accounting	are	recorded	immediately	in	Other	income	(expense)	within	the	consolidated	statements	of operations.

Earnings	Per	Share:				The	Company	calculates	its	basic	earnings	(loss)	per	share	based	on	the	weighted-average	effect	of	all	common	shares	issued	and outstanding.	Net	earnings	(loss)	attributable	to	Motorola	Solutions,	Inc.	is	divided	by	the	weighted	average	common	shares	outstanding	during	the	period	to	arrive	at the	basic	earnings	(loss)	per	share.	Diluted	earnings	(loss)	per	share	is	calculated	by	dividing	net	earnings	(loss)	attributable	to	Motorola	Solutions,	Inc.	by	the	sum	of the	weighted	average	number	of	common	shares	used	in	the	basic	earnings	(loss)	per	share	calculation	and	the	weighted	average	number	of	common	shares	that would	be	issued	assuming	exercise	or	conversion	of	all	potentially	dilutive	securities,	excluding	those	securities	that	would	be	anti-dilutive	to	the	earnings	(loss)	per share	calculation.	Both	basic	and	diluted	earnings	(loss)	per	share	amounts	are	calculated	for	earnings	(loss)	from	continuing	operations	and	net	earnings	attributable to	Motorola	Solutions,	Inc.	for	all	periods	presented.

Share-Based	Compensation	Costs:				The	Company	has	incentive	plans	that	reward	employees	with	stock	options,	stock	appreciation	rights,	restricted stock	and	restricted	stock	units,	as	well	as	an	employee	stock	purchase	plan.	The	amount	of	compensation	cost	for	these	share-based	awards	is	generally	measured based	on	the	fair	value	of	the	awards	as	of	the	date	that	the	share-based	awards	are	issued	and	adjusted	to	the	estimated	number	of	awards	that	are	expected	to vest.	The	fair	values	of	stock	options	and	stock	appreciation	rights	are	generally	determined	using	a	Black-Scholes	option	pricing	model	which	incorporates assumptions	about	expected	volatility,	risk	free	rate,	dividend	yield,	and	expected	life.	Compensation	cost	for	share-based	awards	is	recognized	on	a	straight-line basis	over	the	vesting	period.

Retirement	Benefits:				The	Company	records	annual	expenses	relating	to	its	pension	benefit	and	postretirement	plans	based	on	calculations	which	include various	actuarial	assumptions,	including	discount	rates,	assumed	asset	rates	of	return,	compensation	increases,	turnover	rates	and	health	care	cost	trend	rates.	The Company	reviews	its	actuarial	assumptions	on	an	annual	basis	and	makes	modifications	to	the	assumptions	based	on	current	rates	and	trends.	The	effects	of	the gains,	losses,	and	prior	service	costs	and	credits	are	amortized	either	over	the	average	service	life	or	over	the	average	remaining	lifetime	of	the	participants, depending	on	the	number	of	active	employees	in	the	plan.	The	funded	status,	or	projected	benefit	obligation	less	plan	assets,	for	each	plan,	is	reflected	in	the Company's	consolidated	balance	sheets	using	a	December	31	measurement	date.

Advertising	Expense:				Advertising	expenses,	which	are	the	external	costs	of	marketing	the	Company's	products,	are	expensed	as	incurred.	Advertising expenses	were	$61	million,	$76	million	and	$80	million	for	the	years	ended	December	31,	2014,	2013	and	2012,	respectively.

Recent	Accounting	Pronouncements:	In	May	2014,	the	FASB	issued	ASU	No.	2014-09,	"Revenue	from	Contracts	with	Customers."	This	new	standard will	replace	most	existing	revenue	recognition	guidance	in	U.S.	GAAP.	The	core	principle	of	the	ASU	is	that	an	entity	should	recognize	revenue	for	the	transfer	of goods	or	services	equal	to	the	amount	it	expects	to	receive	for	those	goods	and	services.	The	ASU	requires	additional	disclosure	about	the	nature,	amount,	timing and	uncertainty	of	revenue	and	cash	flows	arising	from	customer	contracts,	including	significant	judgments	and	estimates,	and	changes	in	those

estimates.	The	ASU	will	be	effective	for	the	Company	beginning	January	1,	2017,	and	allows	for	both	retrospective	and	modified-retrospective	methods	of	adoption. The	Company	is	in	the	process	of	determining	the	method	of	adoption	it	will	elect	and	is	currently	assessing	the	impact	of	this	ASU	on	its	consolidated	financial statements	and	footnote	disclosures.

# 2.				Discontinued	Operations

On	April	14,	2014,	the	Company	entered	into	a	Master	Acquisition	Agreement	(the	"Acquisition	Agreement")	with	Zebra	Technologies	Corporation	("Zebra")	to sell	the	Company's	Enterprise	business	for	$3.5	billion	in	cash.	The	transaction	closed	on	October	27,	2014.	The	historical	financial	results	of	the	Enterprise	business, excluding	those	assets	and	liabilities	retained	in	the	transaction,	are	reflected	in	the	Company's	consolidated	financial	statements	and	footnotes	as	discontinued operations	for	all	periods	presented.

On	January	1,	2012,	the	Company	completed	a	series	of	transactions	which	resulted	in	exiting	the	amateur,	marine	and	airband	radio	businesses.		The operating	results	of	the	amateur,	marine	and	airband	radio	businesses	are	reported	as	discontinued	operations	in	the	consolidated	statements	of	operations	for	the year	ended	December	31,	2012.

The	following	table	displays	summarized	activity	in	the	Company's	consolidated	statements	of	operations	for	discontinued	operations	during	the	years	ended December	31,	2014,	2013,	and	2012.

| Years	ended	December	31 | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Net\tsales | $1,904 | $2,469 | $2,429 |
| Operating\tearnings | 203 | 268 | 347 |
| Gains\ton\tsales\tof\tinvestments\tand\tbusinesses,\tnet | 1,888 | 3 | 7 |
| Earnings\tbefore\tincome\ttaxes | 2,074 | 266 | 341 |
| Income\ttax\texpense | 78 | 100 | 130 |
| Earnings\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 1,996 | 166 | 211 |

# 3.				Other	Financial	Data

# Statement	of	Operations	Information

# Other	Charges	(income)

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

| Years	ended	December	31 | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Other\tcharges\t(income): |  |  |  |
| Intangibles\tamortization\t(see\tNote\t14) | $4 | $1 | $1 |
| Reorganization\tof\tbusinesses\t(see\tNote\t13) | 64 | 70 | 27 |
| Settlement\tof\tpension\tplan,\tincluding\ttransaction\tfees\t(see\tNote\t7) | 1,917 | — | — |
| Legal\tand\trelated\tinsurance\tmatters,\tnet | 8 | — | (16) |
| Gain\ton\tsale\tof\tbuilding\tand\tland | (21) | — | — |
|  | $1,972 | $71 | $12 |

During	2014,	the	Company	completed	the	sale	of	a	building	and	parcel	of	land	on	its	Schaumburg,	Illinois	campus	with	a	net	book	value	of	$3	million	for	net	cash proceeds	of	$24	million	resulting	in	a	gain	on	sale	of	$21	million.	Also,	the	Company	recognized	an	$8	million	loss	related	to	the	settlement	of	a	legal	matter.

During	2012,	the	Company	recorded	a	$16	million	gain	in	connection	with	the	settlement	of	a	legal	matter	involving	the	legacy	paging	business.

# Other	Income	(Expense)

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

| Years	ended	December	31 | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Interest\texpense,\tnet: |  |  |  |
| Interest\texpense | $(147) | $(132) | $(108) |
| Interest\tincome | 21 | 19 | 42 |
|  | $(126) | $(113) | $(66) |
| Other: |  |  |  |
| Loss\tfrom\tthe\textinguishment\tof\tlong-term\tdebt | $(37) | $— | $(6) |
| Investment\timpairments | — | (3) | (4) |
| Foreign\tcurrency\tloss | (7) | (9) | (1) |
| Gains\ton\tequity\tmethod\tinvestments | 16 | 10 | 3 |
| Other | (6) | 11 | 9 |
|  | $(34) | $9 | $1 |

# Earnings	Per	Common	Share

Basic	and	diluted	earnings	per	common	share	from	both	continuing	operations	and	net	earnings	attributable	to	Motorola	Solutions,	Inc.	is	computed	as	follows:

|  | Earnings	(loss)	from	Continuing	Operations | Earnings	(loss)	from	Continuing	Operations | Earnings	(loss)	from	Continuing	Operations |  | Net	Earnings |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Years\tended\tDecember\t31 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 |
| Basic\tearnings\tper\tcommon\tshare: |  |  |  |  |  |  |
| Earnings\t(loss) | $(697) | $933 | $670 | $1,299 | $1,099 | $881 |
| Weighted\taverage\tcommon\tshares\noutstanding | 245.6 | 266.0 | 292.1 | 245.6 | 266.0 | 292.1 |
| Per\tshare\tamount | $(2.84) | $3.51 | $2.29 | $5.29 | $4.13 | $3.02 |
| Diluted\tearnings\tper\tcommon\nshare: |  |  |  |  |  |  |
| Earnings\t(loss) | $(697) | $933 | $670 | $1,299 | $1,099 | $881 |
| Weighted\taverage\tcommon\tshares\noutstanding | 245.6 | 266.0 | 292.1 | 245.6 | 266.0 | 292.1 |
| Add\teffect\tof\tdilutive\tsecurities: |  |  |  |  |  |  |
| Share-based\tawards | — | 4.5 | 5.3 | — | 4.5 | 5.3 |
| Diluted\tweighted\taverage\tcommon\nshares\toutstanding | 245.6 | 270.5 | 297.4 | 245.6 | 270.5 | 297.4 |
| Per\tshare\tamount | $(2.84) | $3.45 | $2.25 | $5.29 | $4.06 | $2.96 |

For	the	year	ended	December	31,	2014,	the	Company	had	a	net	loss	from	continuing	operations	and,	accordingly,	the	basic	and	diluted	weighted	average shares	outstanding	are	equal	because	any	increase	to	the	basic	shares	would	be	antidilutive,	including	the	assumed	exercise	of	6.3	million	stock	options	and	the assumed	vesting	of	1.1	million	restricted	stock	units.	In	the	computation	of	diluted	earnings	per	common	share	from	continuing	operations	and	on	a	net	earnings	basis for	the	years	ended	December	31,	2013	and	December	31,	2012,	the	assumed	exercise	of	5.6	million	and	5.9	million	stock	options,	respectively,	were	excluded because	their	inclusion	would	have	been	antidilutive.

# Balance	Sheet	Information

# Investments

Investments	consist	of	the	following:

|  | Recorded	Value | Less |  |
| :--- | :--- | :--- | :--- |
| December\t31,\t2014 | Investments | \t\tUnrealized\nGains | \t\tCost\nBasis |
| Available-for-sale\tsecurities: |  |  |  |
| Government,\tagency,\tand\tgovernment-sponsored\tenterprise\tobligations | $14 | $— | $14 |
| Corporate\tbonds | 16 | — | 16 |
| Mutual\tfunds | 2 | — | 2 |
| Common\tstock\tand\tequivalents | 71 | 70 | 1 |
|  | 103 | 70 | 33 |
| Other\tinvestments,\tat\tcost | 191 | — | 191 |
| Equity\tmethod\tinvestments | 22 | — | 22 |
|  | $316 | $70 | $246 |

During	the	years	ended	December	31,	2013	and	2012,	the	Company	recorded	investment	impairment	charges	of	$3	million	and	$4	million,	respectively, representing	other-than-temporary	declines	in	the	value	of	the	Company's	equity	investment	portfolio.	Investment	impairment	charges	are	included	in	Other	within Other	income	(expense)	in	the	Company's	consolidated	statements	of	operations.

# Accounts	Receivable,	Net

Accounts	receivable,	net,	consist	of	the	following:

| December	31 | 2014 | 2013 |
| :--- | :--- | :--- |
| Accounts\treceivable | $1,444 | $1,422 |
| Less\tallowance\tfor\tdoubtful\taccounts | (35) | (53) |
|  | $1,409 | $1,369 |

# Inventories,	Net

Inventories,	net,	consist	of	the	following:

In	conjunction	with	the	sale	of	the	Enterprise	business	to	Zebra,	the	Company	transfered	legal	entities	which	maintained	cash	balances.	Approximately	$49 million	of	cash	balances	will	be	reimbursed	by	Zebra	in	accordance	with	the	Acquisition	Agreement.

# Property,	Plant	and	Equipment,	Net

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

| December	31 | 2014 | 2013 |
| :--- | :--- | :--- |
| Land | $18 | $22 |
| Building | 559 | 582 |
| Machinery\tand\tequipment | 1,672 | 1,642 |
|  | 2,249 | 2,246 |
| Less\taccumulated\tdepreciation | (1,700) | (1,636) |
|  | $549 | $610 |

# Other	Assets

Other	assets	consist	of	the	following:

# Stockholders'	Equity	Information

Share	Repurchase	Program:	During	2014,	the	Company	paid	an	aggregate	of	$2.5	billion,	including	transaction	costs,	to	repurchase	39.4	million	shares	at	an average	price	of	$64.63	per	share.	During	2013,	the	Company	paid	an	aggregate	of	$1.7	billion,	including	transaction	costs,	to	repurchase	28.6	million	shares	at	an average	price	of	$59.30.	During	2012,	the	Company	paid	an	aggregate	of	$2.4	billion,	including	transaction	costs,	to	repurchase	49.6	million	shares	at	an	average price	of	$49.14.

On	November	4,	2014,	the	Company	announced	that	its	Board	of	Directors	authorized	up	to	$5.0	billion	in	additional	funds	for	share	repurchases,	bringing	the aggregate	amount	of	the	share	repurchase	program	to	$12.0	billion.	As	of	December	31,	2014,	the	Company	had	used	approximately	$7.8	billion	of	the	share repurchase	authority,	including	transaction	costs,	to	repurchase	shares,	leaving	$4.2	billion	of	authority	available	for	future	repurchases.

Payment	of	Dividends:		On	July	31,	2014,	the	Company	announced	that	its	Board	of	Directors	approved	an	increase	in	the	quarterly	cash	dividend	from	$0.31 per	share	to	$0.34	per	share	of	common	stock.	During	the	years	ended	December	31,	2014,	2013,	and	2012	the	Company	paid	$318	million,	$292	million,	and	$270 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,	net	of	tax,	by	component	from	January	1,	2014	to	December	31,	2014:

|  | Gains	and	Losses<br>on	Cash	Flow<br>Hedges | Unrealized	Gains<br>and	Losses	on<br>Available-for-Sale<br>Securities | Retirement	Benefit<br>Items | Foreign	Currency<br>Translation<br>Adjustments | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tas\tof\tDecember\t31,\t2013 | $(1) | $(2) | $(2,188) | $(96) | $(2,287) |
| Other\tcomprehensive\tincome\t(loss)\tbefore\nreclassifications | — | 46 | (718) | (49) | (721) |
| Amounts\treclassified\tfrom\taccumulated\tother\ncomprehensive\tincome\t(loss) | 1 | — | 1,211 | (59) | 1,153 |
| Net\tcurrent-period\tother\tcomprehensive\tincome\t(loss) | 1 | 46 | 493 | (108) | 432 |
| Balance\tas\tof\tDecember\t31,\t2014 | $— | $44 | $(1,695) | $(204) | $(1,855) |

The	following	table	displays	the	amounts	reclassified	from	Accumulated	other	comprehensive	loss	and	the	affected	line	item	in	the	consolidated	statements	of operations	during	2014:

# 4.				Debt	and	Credit	Facilities

# Long-Term	Debt

| December	31 | 2014 | 2013 |
| :--- | :--- | :--- |
| 6.0%\tsenior\tnotes\tdue\t2017 | $— | $399 |
| 3.5%\tsenior\tnotes\tdue\t2021 | 395 | — |
| 3.75%\tsenior\tnotes\tdue\t2022 | 748 | 747 |
| 3.5%\tsenior\tnotes\tdue\t2023 | 594 | 593 |
| 4.0%\tsenior\tnotes\tdue\t2024 | 589 | — |
| 6.5%\tdebentures\tdue\t2025 | 118 | 118 |
| 7.5%\tdebentures\tdue\t2025 | 346 | 346 |
| 6.5%\tdebentures\tdue\t2028 | 36 | 36 |
| 6.625%\tsenior\tnotes\tdue\t2037 | 54 | 54 |
| 5.5%\tsenior\tnotes\tdue\t2044 | 400 | — |
| 5.22%\tdebentures\tdue\t2097 | 91 | 89 |
| Other\tlong-term\tdebt | 36 | 58 |
|  | 3,407 | 2,440 |
| Adjustments\tfor\tunamortized\tgains\ton\tinterest\trate\tswap\tterminations | (7) | 21 |
| Less:\tcurrent\tportion | (4) | (4) |
| Long-term\tdebt | $3,396 | $2,457 |

During	the	year	ended	December	31,	2014,	the	Company	redeemed	$400	million	aggregate	principal	amount	outstanding	of	its	6.000%	Senior	Notes	due November	2017	for	an	aggregate	purchase	price	of	approximately	$456	million.	After	accelerating	the	amortization	of	debt	issuance	costs,	debt	discounts,	and	hedge adjustments,	the	Company	recognized	a	loss	of	$37	million	related	to	the	redemption	within	Other	income	(expense)	in	the	consolidated	statement	of	operations.	The Company	issued	an	aggregate	face	principal	amount	of	$1.4	billion	including:	(i)	$600	million	of	4.000%	Senior	Notes	due	2024,	of	which,	after	debt	issuance	costs and	debt	discounts,	the	Company	recognized	net	proceeds	of	$583	million,	(ii)	$400	million	of	3.500%	Senior	Notes	due	2021,	of	which,	after	debt	issuance	costs	and debt	discounts,	the	Company	recognized	net	proceeds	of	$393	million,	and	(iii)	$400	million	of	5.500%	Senior	Notes	due	2044,	of	which,	after	debt	issuance	costs	and debt	discounts,	the	Company	recognized	net	proceeds	of	$394	million.

During	the	year	ended	December	31,	2013,	the	Company	issued	an	aggregate	face	principal	amount	of	$600	million	of	3.500%	Senior	Notes	due	March	1, 2023,	recognizing	net	proceeds	of	$588	million,	after	debt	issuance	costs	and	debt	discounts.

During	the	year	ended	December	31,	2012,	the	Company	issued	an	aggregate	face	principal	amount	of	$750	million	of	3.750%	Senior	Notes	due	2022	(the "2022	Senior	Notes").		The	Company	also	redeemed	$400	million	aggregate	principal	amount	outstanding	of	its	5.375%	Senior	Notes	due	November	2012	for	an aggregate	purchase	price	of	approximately	$408	million.		After	accelerating	the	amortization	of	debt	issuance	costs	and	debt	discounts,	the	Company	recognized	a loss	of	approximately	$6	million	related	to	this	redemption	within	Other	income	(expense)	in	the	consolidated	statements	of	operations.		This	debt	was	repurchased with	a	portion	of	the	proceeds	from	the	issuance	of	the	2022	Senior	Notes.

As	of	December	31,	2014,	the	Company	had	a	$2.1	billion	unsecured	syndicated	revolving	credit	facility	(the	"2014	Motorola	Solutions	Credit	Agreement") scheduled	to	mature	on	May	29,	2019	which	replaced	the	previous	$1.5	billion	unsecured	syndicated	revolving	credit	facility	(the	"2011	Motorola	Solutions	Credit Agreement").	The	Company	must	comply	with	certain	customary	covenants,	including	maximum	leverage	ratio	as	defined	in	the	2014	Motorola	Solutions	Credit Agreement.	The	Company	is	no	longer	subject	to	a	minimum	interest	coverage	covenant	under	the	new	facility.	The	Company	was	in	compliance	with	its	financial covenants	as	of	December	31,	2014.	The	Company	did	not	borrow	under	the	2011	Motorola	Solutions	Credit	Agreement	or	the	2014	Motorola	Solutions	Credit Agreement	during	the	twelve	months	ended	December	31,	2014.

As	of	December	31,	2014,	the	Company	had	a	letter	of	credit	sub-limit	of	$450	million	under	the	2014	Motorola	Solutions	Credit	Agreement.	No	letters	of	credit were	issued	under	the	revolving	credit	facility	as	of	December	31,	2014.

# 5.				Risk	Management

The	Company	uses	financial	instruments	to	reduce	its	overall	exposure	to	the	effects	of	currency	fluctuations	on	cash	flows.	The	Company's	policy	prohibits speculation	in	financial	instruments	for	profit	on	exchange	rate	price	fluctuations,	trading	in	currencies	for	which	there	are	no	underlying	exposures,	or	entering	into transactions	for	any	currency	to	intentionally	increase	the	underlying	exposure.	Instruments	that	are	designated	as	part	of	a	hedging	relationship	must	be	effective	at reducing	the	risk	associated	with	the	exposure	being	hedged	and	are	designated	as	part	of	a	hedging	relationship	at	the	inception	of	the	contract.	Accordingly, changes	in	the	market	values	of	hedge	instruments	must	be	highly	correlated	with	changes	in	market	values	of	the	underlying	hedged	items	both	at	the	inception	of the	hedge	and	over	the	life	of	the	hedge	contract.

The	Company's	strategy	related	to	foreign	exchange	exposure	management	is	to	offset	the	gains	or	losses	on	the	financial	instruments	against	gains	or	losses on	the	underlying	operational	cash	flows	or	investments	based	on	the	Company's	assessment	of	risk.	The	Company	enters	into	derivative	contracts	for	some	of	its non-functional	currency	cash,	receivables,	and	payables,	which	are	primarily	denominated	in	major	currencies	that	can	be	traded	on	open	markets.	The	Company typically	uses	forward	contracts	and	options	to	hedge	these	currency	exposures.	In	addition,	the	Company	enters	into	derivative	contracts	for	some	forecasted transactions,	which	are	designated	as	part	of	a	hedging	relationship	if	it	is	determined	that	the	transaction	qualifies	for	hedge	accounting	under	the	provisions	of	the authoritative	accounting	guidance	for	derivative	instruments	and	hedging	activities.	A	portion	of	the	Company's	exposure	is	from	currencies	that	are	not	traded	in	liquid markets	and	these	are	addressed,	to	the	extent	reasonably	possible,	by	managing	net	asset	positions,	product	pricing	and	component	sourcing.

At	December	31,	2014,	the	Company	had	outstanding	foreign	exchange	contracts	totaling	$628	million,	compared	to	$837	million	outstanding	at	December	31, 2013.	Management	believes	that	these	financial	instruments	should	not	subject	the	Company	to	undue	risk	due	to	foreign	exchange	movements	because	gains	and losses	on	these	contracts	should	generally	offset	losses	and	gains	on	the	underlying	assets,	liabilities	and	transactions,	except	for	the	ineffective	portion	of	the instruments,	which	is	charged	to	Other	within	Other	income	(expense)	in	the	Company's	consolidated	statements	of	operations.

As	part	of	its	liability	management	program,	one	of	the	Company's	European	subsidiaries	has	outstanding	interest	rate	agreements	("Interest	Agreements") relating	to	Euro-denominated	loans.	The	interest	on	the	Euro-denominated	loans	is	variable.	The	Interest	Agreements	change	the	characteristics	of	interest	rate payments	from	variable	to	maximum	fixed-rate	payments.	The	Interest	Agreements	are	not	accounted	for	as	a	part	of	a	hedging	relationship	and,	accordingly,	the changes	in	the	fair	value	of	the	Interest	Agreements	are	included	in	Other	income	(expense)	in	the	Company's	consolidated	statements	of	operations.	The	weighted average	fixed	rate	payment	on	the	Interest	Agreements	for	the	year	ended	December	31,	2014	was	4.02%.	The	fair	value	of	the	Interest	Agreements	was	a	liability position	of	$2	million	at	December	31,	2014,	compared	to	a	liability	position	of	$3	million	at	December	31,	2013.

# Counterparty	Risk

The	use	of	derivative	financial	instruments	exposes	the	Company	to	counterparty	credit	risk	in	the	event	of	nonperformance	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.	At present	time,	all	of	the	counterparties	have	investment	grade	credit	ratings.	The	Company	is	not	exposed	to	material	credit	risk	with	any	single	counterparty.	As	of December	31,	2014,	the	Company	was	exposed	to	an	aggregate	credit	risk	of	approximately	$1	million	with	all	counterparties.

# Derivative	Financial	Instruments

The	following	tables	summarize	the	fair	values	and	location	in	the	consolidated	balance	sheets	of	all	derivative	financial	instruments	held	by	the	Company	at December	31,	2014	and	2013:

| December	31,	2014 | Fair<br>Value | Balance<br>Sheet<br>Location | Fair<br>Value | Balance<br>Sheet<br>Location |
| :--- | :--- | :--- | :--- | :--- |
| Derivatives\tnot\tdesignated\tas\thedging\tinstruments: |  |  |  |  |
| Foreign\texchange\tcontracts | 1 | Other\tassets | 5 | Other\tliabilities |
| Interest\tagreements | — | Other\tassets | 2 | Other\tliabilities |
| Total\tderivatives | $1 |  | $7 |  |

| December	31,	2013 | Fair<br>Value | Balance<br>Sheet<br>Location | Fair<br>Value | Balance<br>Sheet<br>Location |
| :--- | :--- | :--- | :--- | :--- |
| Derivatives\tdesignated\tas\thedging\tinstruments: |  |  |  |  |
| Foreign\texchange\tcontracts | $— | Other\tassets | $1 | Other\tliabilities |
| Derivatives\tnot\tdesignated\tas\thedging\tinstruments: |  |  |  |  |
| Foreign\texchange\tcontracts | 4 | Other\tassets | 1 | Other\tliabilities |
| Interest\tagreements | — | Other\tassets | 3 | Other\tliabilities |
| Total\tderivatives\tnot\tdesignated\tas\thedging\tinstruments | 4 |  | 4 |  |
| Total\tderivatives | $4 |  | $5 |  |

The	following	table	summarizes	the	effect	of	derivative	instruments	in	the	Company's	consolidated	statements	of	operations,	including	immaterial	amounts related	to	discontinued	operations,	for	the	years	ended	December	31,	2014,	2013	and	2012:

|  |  | December	31 |  | Statement	of |
| :--- | :--- | :--- | :--- | :--- |
| Gain\t(Loss)\ton\tDerivative\tInstruments | 2014 | 2013 | 2012 | Operations\tLocation |
| Derivatives\tnot\tdesignated\tas\thedging\tinstruments: |  |  |  |  |
| Interest\trate\tcontracts | $1 | $2 | $(1) | Other\tincome\t(expense) |
| Foreign\texchange\tcontracts | (5) | 6 | (13) | Other\tincome\t(expense) |
| Total\tderivatives\tnot\tdesignated\tas\thedging\tinstruments | $(4) | $8 | $(14) |  |

The	following	table	summarizes	the	gains	and	losses	reclassified	from	Accumulated	other	comprehensive	loss	into	Net	earnings	(loss),	including	immaterial amounts	related	to	discontinued	operations,	for	the	years	ended	December	31,	2014,	2013	and	2012:

|  |  | December	31 |  | Financial	Statement |
| :--- | :--- | :--- | :--- | :--- |
| Foreign\tExchange\tContracts | 2014 | 2013 | 2012 | Location |
| Derivatives\tin\tcash\tflow\thedging\trelationships |  |  |  |  |
| Other\tcomprehensive\tgains\t(losses)\tbefore\treclassifications |  |  |  | Accumulated\tother |
|  | $— | $(1) | $3 | comprehensive\tloss |
| Gains\t(losses)\treclassified\tfrom\tAccumulated\tother\tcomprehensive\tloss\ninto\tNet\tearnings\t(loss) | (1) | 1 | (1) | Cost\tof\tsales |

Derivative	instruments	activity,	net	of	tax,	included	in	Accumulated	other	comprehensive	loss	within	the	consolidated	statements	of	stockholders'	equity	for	the years	ended	December	31,	2014,	2013	and	2012	were	as	follows:

|  | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tJanuary\t1 | $(1) | $1 | $(3) |
| Increase\t(decrease)\tin\tfair\tvalue | — | (1) | 3 |
| Reclassifications\tto\tearnings,\tnet\tof\ttax | 1 | (1) | 1 |
| Balance\tat\tDecember\t31 | $— | $(1) | $1 |

Components	of	earnings	(loss)	from	continuing	operations	before	income	taxes	are	as	follows:

Deferred	tax	balances	that	were	recorded	within	Accumulated	other	comprehensive	loss	in	the	Company's	consolidated	balance	sheets	resulted	from	retirement benefit	adjustments,	currency	translation	adjustments,	net	gains	(losses)	on	derivative	instruments	and	fair	value	adjustments	to	available-for-sale	securities.	The adjustments	were	$286	million,	$606	million	and	$(272)	million	for	the	years	ended	December	31,	2014,	2013	and	2012,	respectively.

The	Company	evaluates	its	permanent	reinvestment	assertions	with	respect	to	foreign	earnings	at	each	reporting	period	and,	except	for	certain	earnings	that the	Company	intends	to	reinvest	indefinitely	due	to	the	capital	requirements	of	the	foreign	subsidiaries	or	due	to	local	country	restrictions,	accrues	for	the	U.S.	federal and	foreign	income	tax	applicable	to	the	earnings.	During	the	fourth	quarter	of	2014,	the	Company	reassessed	its	unremitted	earnings	position	and	concluded	that certain	of	its	non-U.S.	subsidiaries'	earnings	were	permanently	reinvested	overseas.	The	Company	intends	to	utilize	these	offshore	earnings	for	working	capital	needs in	its	international	operations.	During	2014,	the	Company	recorded	a	net	tax	benefit	of	$19	million	related	to	reversals	of	deferred	tax	liabilities	related	to	undistributed foreign	earnings	due	to	the	change	in	permanent	reinvestment	assertion.	During	2013,	the	Company	reassessed	its	unremitted	earnings	position	concluding	that certain	of	its	non-U.S.	subsidiaries'	earnings	were	permanently	reinvested	overseas.	As	a	result,	the	Company	recognized	a	tax	benefit	of	$25	million	during	2013	for the	reversal	of	related	deferred	tax	liabilities.

Undistributed	earnings	that	the	Company	intends	to	reinvest	indefinitely,	and	for	which	no	income	taxes	have	been	provided,	aggregate	to	$1.5	billion December	31,	2014.	The	Company	currently	has	no	plans	to	repatriate	the	foreign	earnings	permanently	reinvested	and	therefore,	the	time	and	manner	of	repatriation is	uncertain.		If	circumstances	change	and	it	becomes	apparent	that	some	or	all	of	the	permanently	reinvested	earnings	will	be	remitted	to	the	U.S.	in	the	foreseeable future,	an	additional	income	tax	charge	may	be	necessary;	however,	given	the	uncertain	repatriation	time	and	manner	at	December	31,	2014,	it	is	not	practicable	to estimate	the	amount	of	any	additional	income	tax	charge	on	permanently	reinvested	earnings.		On	a	cash	basis,	these	repatriations	from	the	Company's	non-U.S. subsidiaries	could	require	the	payment	of	additional	taxes.	The	portion	of	earnings	not	reinvested	indefinitely	may	be	distributed	without	an	additional	charge	given	the U.S.	federal	and	foreign	income	tax	accrued	on	undistributed	earnings	and	the	utilization	of	available	foreign	tax	credits.	At	December	31,	2014,	the	Company	has approximately	$400	million	of	foreign	earnings	not	considered	permanently	reinvested	and	which	may	be	repatriated	without	an	additional	tax	charge.

In	2013,	the	Company	reorganized	certain	of	its	non-U.S.	subsidiaries	under	a	holding	company	structure	in	order	to	facilitate	the	efficient	movement	of	non-U.S. cash	and	provide	a	platform	to	fund	foreign	investments,	such	as	potential

acquisitions	and	capital	expenditures.	During	2013,	the	Company	recognized	a	$337	million	tax	benefit	associated	with	the	excess	tax	credits	relating	to	the	earnings of	certain	non-U.S.	subsidiaries	reorganized	under	the	holding	company	structure.

Differences	between	income	tax	expense	(benefit)	computed	at	the	U.S.	federal	statutory	tax	rate	of	35%	and	income	tax	expense	(benefit)	as	reflected	in	the consolidated	statements	of	operations	are	as	follows:

| Years	ended	December	31 | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Income\ttax\texpense\tat\tstatutory\trate | $(406) | $308 | $308 |
| Tax\ton\tnon-U.S.\tearnings | (27) | 17 | (10) |
| State\tincome\ttaxes,\tnet\tof\tfederal\tbenefit | (30) | 8 | (32) |
| Recognition\tof\tpreviously\tunrecognized\tincome\ttax\tbenefits | (29) | 6 | — |
| Other\tprovisions | 9 | (4) | (10) |
| Valuation\tallowances | 55 | (3) | (60) |
| Section\t199\tdeduction | (12) | (14) | (14) |
| Tax\ton\tundistributed\tnon-U.S.\tearnings | (19) | (22) | 29 |
| Research\tcredits | (6) | (18) | — |
| Tax\tbenefit\tof\trepatriated\tnon-U.S.\tearnings | — | (337) | — |
|  | $(465) | $(59) | $211 |

Gross	deferred	tax	assets	were	$3.6	billion	and	$3.7	billion	at	December	31,	2014	and	2013,	respectively.	Deferred	tax	assets,	net	of	valuation	allowances,	were $3.4	billion	and	$3.5	billion	at	December	31,	2014	and	2013,	respectively.	Gross	deferred	tax	liabilities	were	$774	million	and	$1.1	billion	at	December	31,	2014	and 2013,	respectively.

Significant	components	of	deferred	tax	assets	(liabilities)	are	as	follows:

| December	31 | 2014 | 2013 |
| :--- | :--- | :--- |
| Inventory | $34 | $46 |
| Accrued\tliabilities\tand\tallowances | 148 | 129 |
| Employee\tbenefits | 799 | 814 |
| Capitalized\titems | 379 | 144 |
| Tax\tbasis\tdifferences\ton\tinvestments | (10) | 17 |
| Depreciation\ttax\tbasis\tdifferences\ton\tfixed\tassets | 52 | 12 |
| Undistributed\tnon-U.S.\tearnings | (18) | (6) |
| Tax\tcarryforwards | 1,246 | 1,294 |
| Business\treorganization | 22 | 39 |
| Warranty\tand\tcustomer\tliabilities | 19 | 19 |
| Deferred\trevenue\tand\tcosts | 136 | 159 |
| Valuation\tallowances | (226) | (200) |
| Deferred\tcharges | 39 | 38 |
| Other | (38) | (64) |
|  | $2,582 | $2,441 |

At	December	31,	2014	and	2013,	the	Company	had	valuation	allowances	of	$226	million	and	$200	million,	respectively,	against	its	deferred	tax	assets,	including $195	million	and	$178	million,	respectively,	relating	to	deferred	tax	assets	for	non-U.S.	subsidiaries.	The	Company's	valuation	allowances	for	its	non-U.S.	subsidiaries had	a	net	increase	of	$17	million	during	2014	and	a	net	decrease	of	$56	million	during	2013.	The	increase	in	the	valuation	allowance	relating	to	deferred	tax	assets	of non-U.S.	subsidiaries	during	2014	relates	to	deferred	tax	assets	that	are	not	more-likely-than-not	to	be	realizable	based	on	estimates	of	future	taxable	income.	The decrease	in	the	valuation	allowance	relating	to	deferred	tax	assets	of	non-U.S.	subsidiaries	during	2013	reflects	current	year	deferred	tax	movements,	expiration	of loss	carryforwards	and	exchange	rate	variances.

The	Company's	U.S.	valuation	allowance	had	a	net	increase	of	$9	million	during	2014	and	a	net	decrease	of	$4	million	during	2013.	The	U.S.	valuation allowance	of	$31	million	as	of	December	31,	2014	primarily	relates	to	state	tax	carryforwards.	The	Company	believes	that	the	remaining	deferred	tax	assets	are	more- likely-than-not	to	be	realizable	based	on	estimates	of	future	taxable	income	and	the	implementation	of	tax	planning	strategies.

# Tax	carryforwards	are	as	follows:

The	IRS	is	currently	examining	the	Company's	2012	and	2013	tax	years.	The	Company	also	has	several	state	and	non-U.S.	audits	pending.	A	summary	of	open tax	years	by	major	jurisdiction	is	presented	below:

Although	the	final	resolution	of	the	Company's	global	tax	disputes	is	uncertain,	based	on	current	information,	in	the	opinion	of	the	Company's	management,	the ultimate	disposition	of	these	matters	will	not	have	a	material	adverse	effect	on	the	Company's	consolidated	financial	position,	liquidity	or	results	of	operations. However,	an	unfavorable	resolution	of	the	Company's	global	tax	disputes	could	have	a	material	adverse	effect	on	the	Company's	consolidated	financial	position, liquidity	or	results	of	operations	in	the	periods	in	which	the	matters	are	ultimately	resolved.

Based	on	the	potential	outcome	of	the	Company's	global	tax	examinations,	the	expiration	of	the	statute	of	limitations	for	specific	jurisdictions,	or	the	continued ability	to	satisfy	tax	incentive	obligations,	it	is	reasonably	possible	that	the	unrecognized	tax	benefits	will	change	within	the	next	twelve	months.	The	associated	net	tax impact	on	the	effective	tax	rate,	exclusive	of	valuation	allowance	changes,	is	estimated	to	be	in	the	range	of	a	$50	million	tax	charge	to	a	$50	million	tax	benefit,	with cash	payments	not	to	exceed	$25	million.

At	December	31,	2014,	the	Company	had	$26	million	accrued	for	interest	and	$26	million	accrued	for	penalties	on	unrecognized	tax	benefits.	At	December	31, 2013,	the	Company	had	$25	million	and	$27	million	accrued	for	interest	and	penalties,	respectively,	on	unrecognized	tax	benefits.

# Pension	and	Postretirement	Health	Care	Benefits	Plans

The	Company's	noncontributory	pension	plan	(the	"Regular	Pension	Plan")	covered	U.S.	employees	hired	prior	to	January	1,	2005,	who	became	eligible	after one	year	of	service.	The	benefit	formula	was	dependent	upon	employee	earnings	and	years	of	service.	During	2014,	the	Company	terminated	this	plan.	The Company	also	provides	defined	benefit	plans	which	cover	non-U.S.	employees	in	certain	jurisdictions,	principally	the	United	Kingdom	and	Germany	(the	"Non	U.S. Pension	Benefit	Plans").	Other	pension	plans	outside	of	the	U.S.	are	not	material	to	the	Company	either	individually	or	in	the	aggregate.

The	Company	had	a	noncontributory	supplemental	retirement	benefit	plan	(the	"Officers'	Plan")	for	its	officers	elected	prior	to	December	31,	1999.	The	Officers' Plan	contained	provisions	for	vesting	and	funding	the	participants'	expected	retirement	benefits	when	the	participants	met	the	minimum	age	and	years	of	service requirements.	Elected	officers	who	were	not	yet	vested	in	the	Officers'	Plan	as	of	December	31,	1999	had	the	option	to	remain	in	the	Officers'	Plan	or	elect	to	have their	benefit	bought	out	in	restricted	stock	units.	Effective	December	31,	1999,	newly	elected	officers	were	not	eligible	to	participate	in	the	Officers'	Plan.	Effective June	30,	2005,	salaries	were	frozen	for	this	plan.	During	2013,	the	Company	settled	and	terminated	the	Officers'	Plan.

The	Company	has	an	additional	noncontributory	supplemental	retirement	benefit	plan,	the	Motorola	Supplemental	Pension	Plan	("MSPP"),	which	provides supplemental	benefits	to	individuals	by	replacing	the	Regular	Pension	Plan	benefits	that	are	lost	by	such	individuals	under	the	retirement	formula	due	to	application	of the	limitations	imposed	by	the	Internal	Revenue	Code.	However,	elected	officers	who	were	covered	under	the	Officers'	Plan	were	not	eligible	to	participate	in	the MSPP.	Effective	January	1,	2007,	eligible	compensation	was	capped	at	the	IRS	limit	plus	$175,000	(the	"Cap")	or,	for	those	already	in	excess	of	the	Cap	as	of January	1,	2007,	the	eligible	compensation	used	to	compute	such	employee's	MSPP	benefit	for	all	future	years	is	the	greater	of:	(i)	such	employee's	eligible compensation	as	of	January	1,	2007	(frozen	at	that	amount)	or	(ii)	the	relevant	Cap	for	the	given	year.	Effective	January	1,	2009,	the	MSPP	was	closed	to	new participants	unless	such	participation	was	required	under	a	prior	contractual	entitlement.

In	February	2007,	the	Company	amended	the	Regular	Pension	Plan	and	the	MSPP,	modifying	the	definition	of	average	earnings.	For	the	years	ended	prior	to December	31,	2007,	benefits	were	calculated	using	the	rolling	average	of	the	highest	annual	earnings	in	any	five	years	within	the	previous	ten	calendar	year	period. Beginning	in	January	2008,	the	benefit	calculation	was	based	on	the	set	of	the	five	highest	years	of	earnings	within	the	ten	calendar	years	prior	to	December	31, 2007,	averaged	with	earnings	from	each	year	after	2007.	In	addition,	effective	January	2008,	the	Company	amended	the	Regular	Pension	Plan,	modifying	the	vesting period	from	five	years	to	three	years.

In	December	2008,	the	Company	amended	the	Regular	Pension	Plan,	the	Officers'	Plan	and	the	MSPP	(collectively,	the	"U.S.	Pension	Benefit	Plans")	such that,	effective	March	1,	2009:	(i)	no	participant	shall	accrue	any	benefit	or	additional	benefit	on	or	after	March	1,	2009,	and	(ii)	no	compensation	increases	earned	by	a participant	on	or	after	March	1,	2009	shall	be	used	to	compute	any	accrued	benefit.

Certain	health	care	benefits	are	available	to	eligible	domestic	employees	meeting	certain	age	and	service	requirements	upon	termination	of	employment	(the "Postretirement	Health	Care	Benefits	Plan").	For	eligible	employees	hired	prior	to	January	1,	2002,	the	Company	offsets	a	portion	of	the	postretirement	medical	costs to	the	retired	participant.	As	of	January	1,	2005,	the	Postretirement	Health	Care	Benefits	Plan	was	closed	to	new	participants.	During	2012,	the	Postretirement	Health Care	Benefits	Plan	was	amended	("the	Original	Amendment").	As	of	January	1,	2013,	benefits	under	the	Postretirement	Health	Care	Benefits	Plan,	are	paid	to	a retiree	health	reimbursement	account	instead	of	directly	providing	health	insurance	coverage	to	certain	participants.		Covered	retirees	are	now	able	to	use	the	annual subsidy	they	receive	through	this	account	toward	the	purchase	of	their	own	health	care	coverage	from	private	insurance	companies	and	for	reimbursement	of	eligible health	care	expenses.	The	Original	Amendment	to	the	Postretirement	Health	Care	Benefits	Plan	effective	January	1,	2013	resulted	in	a	remeasurement	of	the	plan generating	an	$87	million	decrease	in	accumulated	other	comprehensive	loss,	net	of	taxes.	The	majority	of	that	$87	million	decrease	will	be	recognized	by	the	end	of 2015.

In	September	2014,	the	Postretirement	Health	Care	Benefits	Plan	was	amended	("the	New	Amendment").	As	a	result	of	the	New	Amendment,	beginning	March 1,	2015,	all	eligible	retirees	under	the	age	of	65,	will	be	able	to	use	the	annual	subsidy	they	receive	through	their	retiree	health	reimbursement	account	toward	the purchase	of	their	own	health	care	coverage	from	private	insurance	companies	and	for	the	reimbursement	of	eligible	health	care	expenses.	Additionally,	the	New Amendment	eliminated	dental	benefits	under	the	plan.	The	New	Amendment	required	a	remeasurement	of	the	plan,	resulting	in	a	$45	million	decrease	in Accumulated	other	comprehensive	loss,	net	of	taxes.	A	substantial	portion	of	the	decrease	is	related	to	a	prior	service	credit	and	will	be	recognized	as	a	credit	to	the consolidated	statements	of	operations	over	almost	three	years,	or	the	period	in	which	the	remaining	employees	eligible	for	the	plan	will	qualify	for	benefits	under	the plan.

During	the	years	ended	December	31,	2014,	2013,	and	2012,	$50	million,	$43	million,	and	$16	million	of	prior	service	cost	credit,	respectively,	was	recognized into	the	Company's	consolidated	statements	of	operations	for	amendments	to	the	Postretirement	Health	Care	Benefits	Plan.

In	September	2014,	the	Company	entered	into	a	Definitive	Purchase	Agreement	(the	"Agreement")	by	and	among	the	Company,	The	Prudential	Insurance Company	of	America	("PICA"),	Prudential	Financial,	Inc.	and	State	Street	Bank	and	Trust	Company,	as	Independent	Fiduciary	of	the	Company's	Regular	Pension Plan.	Under	the	Agreement,	the	Regular	Pension	Plan	planned	to	purchase	from	PICA	a	group	annuity	contract	that	requires	PICA	to	pay	and	administer	certain future	annuity	payments	to	approximately	30,000	of	the	Company's	retirees.	In	anticipation	of	the	Agreement,	the	Company	established	a	new	pension	plan	with substantially	the	same	terms	as	the	Regular	Pension	Plan	(the	"New	Plan")	to	accommodate	the	Company's	remaining	active	employees	and	non-retirees.	The establishment	of	the	New	Plan	resulted	in	a	mid-year	remeasurement.	On	December	3,	2014,	the	Regular	Pension	Plan	closed	its	planned	purchase	of	a	group annuity	from	PICA.	The	total	premium	paid	by	the	Regular	Pension	Plan	to	PICA	was	the	transfer	of	approximately	$3.2	billion	in	plan	assets,	and	is	subject	to customary	post-closing	true-ups.	The	Regular	Pension	Plan	was	then	terminated.

Also	in	September	2014,	the	Company	announced	that	the	New	Plan	was	offering	a	maximum	of	$1.0	billion	of	lump-sum	distributions	to	certain	participants	who had	accrued	a	pension	benefit,	had	left	the	Company	prior	to	June	30,	2014,	and	had	not	yet	started	receiving	pension	benefit	payments	(the	"Eligible	Participants"). The	aggregate	amount	of	lump-sum	elections	accepted	by	Eligible	Participants	exceeded	the	maximum	of	$1.0	billion,	and	$1.0	billion	was	paid	out	from	plan	assets in	December	2014.

As	a	result	of	the	actions	taken	to	the	Plans,	the	Company	recorded	a	settlement	loss	of	$1.9	billion	in	2014	which	is	recorded	in	"Other	charges"	within	the statement	of	operations.

# Net	Periodic	Cost	(Benefit)

The	net	periodic	costs	(benefit)	for	pension	and	Postretirement	Health	Care	Benefits	plans	were	as	follows:

|  |  | U.S.	Pension	Benefit	Plans | U.S.	Pension	Benefit	Plans | Non	U.S.	Pension	Benefit	Plans | Non	U.S.	Pension	Benefit	Plans |  | Postretirement	Health	Care	Benefits	Plan | Postretirement	Health	Care	Benefits	Plan | Postretirement	Health	Care	Benefits	Plan |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Years\tended\tDecember\t31 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 |
| Service\tcost | $— | $— | $— | $15 | $11 | $10 | $2 | $2 | $3 |
| Interest\tcost | 370 | 352 | 349 | 80 | 69 | 73 | 10 | 11 | 16 |
| Expected\treturn\ton\tplan\tassets | (381) | (364) | (421) | (90) | (77) | (77) | (10) | (10) | (12) |
| Amortization\tof: |  |  |  |  |  |  |  |  |  |
| Unrecognized\tnet\tloss | 97 | 130 | 260 | 12 | 13 | 22 | 9 | 14 | 12 |
| Unrecognized\tprior\tservice\nbenefit | — | — | — | (7) | (6) | (3) | (50) | (43) | (16) |
| Settlement/loss | 1,883 | — | — | — | — | — | — | — | — |
| Net\tperiodic\tpension\tcost\n(benefit) | $1,969 | $118 | $188 | $10 | $10 | $25 | $(39) | $(26) | $3 |

The	status	of	the	Company's	plans	are	as	follows:

|  | U.S.	Pension	Benefit	Plans | U.S.	Pension	Benefit	Plans | Non	U.S.	Pension	Benefit<br>Plans | Non	U.S.	Pension	Benefit<br>Plans | Postretirement	Health	Care<br>Benefits	Plan | Postretirement	Health	Care<br>Benefits	Plan |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Change\tin\tbenefit\tobligation: |  |  |  |  |  |  |
| Benefit\tobligation\tat\tJanuary\t1 | $7,317 | $8,288 | $1,904 | $1,771 | $278 | $322 |
| Service\tcost | — | — | 15 | 11 | 2 | 2 |
| Interest\tcost | 370 | 352 | 80 | 69 | 10 | 11 |
| Plan\tamendments | — | — | — | — | (41) | — |
| Settlements | (4,227) | — | — | — | — | — |
| Actuarial\tloss\t(gain) | 1,357 | (1,012) | 263 | 91 | (14) | (37) |
| Foreign\texchange\tvaluation\tadjustment | — | — | (146) | (1) | — | — |
| Employee\tcontributions | — | — | 2 | 2 | — | — |
| Benefit\tpayments | (281) | (311) | (43) | (39) | (23) | (20) |
| Benefit\tobligation\tat\tDecember\t31 | 4,536 | 7,317 | 2,075 | 1,904 | 212 | 278 |
| Change\tin\tplan\tassets: |  |  |  |  |  |  |
| Fair\tvalue\tat\tJanuary\t1 | 6,071 | 5,426 | 1,513 | 1,343 | 161 | 155 |
| Return\ton\tplan\tassets | 642 | 806 | 191 | 182 | 21 | 22 |
| Company\tcontributions | 1,112 | 150 | 237 | 32 | — | — |
| Settlements | (3,196) | — | — | — | — | — |
| Employee\tcontributions | — | — | 2 | 2 | — | — |
| Foreign\texchange\tvaluation\tadjustment | — | — | (96) | (8) | — | — |
| Lump\tsum\tsettlements | (1,031) | — | — | — | — | — |
| Benefit\tpayments | (281) | (311) | (41) | (38) | (19) | (16) |
| Fair\tvalue\tat\tDecember\t31 | 3,317 | 6,071 | 1,806 | 1,513 | 163 | 161 |
| Funded\tstatus\tof\tthe\tplan | (1,219) | (1,246) | (269) | (391) | (49) | (117) |
| Unrecognized\tnet\tloss | 1,846 | 2,732 | 593 | 483 | 109 | 143 |
| Unrecognized\tprior\tservice\tbenefit | — | — | (35) | (44) | (83) | (92) |
| Prepaid\t(accrued)\tpension\tcost | $627 | $1,486 | $289 | $48 | $(23) | $(66) |
| Components\tof\tprepaid\t(accrued)\tpension\tcost: |  |  |  |  |  |  |
| Non-current\tbenefit\tliability | $(1,219) | $(1,246) | $(269) | $(391) | $(49) | $(117) |
| Deferred\tincome\ttaxes | 701 | 1,002 | 51 | 28 | 10 | 19 |
| Accumulated\tother\tcomprehensive\tloss | 1,145 | 1,730 | 507 | 411 | 16 | 32 |
| Prepaid\t(accrued)\tpension\tcost | $627 | $1,486 | $289 | $48 | $(23) | $(66) |

The	benefit	obligation	and	plan	assets	for	the	Company's	plans	are	measured	as	of	December	31,	2014.	The	Company	utilizes	a	five-year,	market-related	asset value	method	of	recognizing	asset	related	gains	and	losses.

Prior	to	2013,	unrecognized	gains	and	losses	were	amortized	over	periods	ranging	from	three	to	thirteen	years.	At	the	close	of	fiscal	2012,	the	Company determined	that	the	majority	of	the	Company's	plan	participants	in	its	Regular	Pension	Plan	and	United	Kingdom	pension	plan	were	no	longer	actively	employed	by the	Company	due	to	significant	employee	exits	as	a	result	of	the	Company's	divestitures.	Under	relevant	accounting	rules,	when	almost	all	of	the	plan	participants	are considered	inactive,	the	amortization	period	for	certain	unrecognized	losses	changes	from	the	average	remaining	service	period	to	the	average	remaining	lifetime	of the	participants.	As	such,	depending	on	the	specific	plan,	the	Company	amortizes	gains	and	losses	over	periods	ranging	from	four	to	thirty-six	years.	Prior	service costs	are	amortized	over	periods	ranging	from	six	to	twelve	years.	Benefits	under	all	pension	plans	are	valued	based	on	the	projected	unit	credit	cost	method.

The	net	periodic	cost	for	2015	will	include	amortization	of	the	unrecognized	net	loss	and	prior	service	costs	for	the	U.S.	Pension	Benefit	Plans	and	Non	U.S. Pension	Benefit	Plans,	currently	included	in	Accumulated	other	comprehensive	loss,	of	$47	million	and	$11	million,	respectively.		It	is	estimated	that	the	2015	net periodic	expense	for	the	Postretirement	Health	Care	Benefits	Plan	will	include	amortization	of	a	net	credit	of	$49	million,	comprised	of	the	unrecognized	prior	service gain	and	unrecognized	actuarial	loss,	currently	included	in	Accumulated	other	comprehensive	loss.

# Actuarial	Assumptions

Certain	actuarial	assumptions	such	as	the	discount	rate	and	the	long-term	rate	of	return	on	plan	assets	have	a	significant	effect	on	the	amounts	reported	for	net periodic	cost	and	benefit	obligation.	The	assumed	discount	rates	reflect	the	prevailing	market	rates	of	a	universe	of	high-quality,	non-callable,	corporate	bonds currently	available	that,	if	the	obligation	were	settled	at	the	measurement	date,	would	provide	the	necessary	future	cash	flows	to	pay	the	benefit	obligation	when	due. The	long-term	rates	of	return	on	plan	assets	represent	an	estimate	of	long-term	returns	on	an	investment	portfolio	consisting	of	a	mixture	of	equities,	fixed	income, cash	and	other	investments	similar	to	the	actual	investment	mix.	In	determining	the	long-term	return	on	plan	assets,	the	Company	considers	long-term	rates	of	return on	the	asset	classes	(both	historical	and	forecasted)	in	which	the	Company	expects	the	plan	funds	to	be	invested.

Weighted	average	actuarial	assumptions	used	to	determine	costs	for	the	plans	at	the	beginning	of	the	fiscal	year	were	as	follows:

|  | U.S.	Pension	Benefit	Plans | U.S.	Pension	Benefit	Plans | Non	U.S.	Pension	Benefit<br>Plans | Non	U.S.	Pension	Benefit<br>Plans | Postretirement	Health	Care<br>Benefits	Plan | Postretirement	Health	Care<br>Benefits	Plan |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Discount\trate | 5.15% | 4.35% | 4.24% | 4.20% | 4.65% | 3.80% |
| Investment\treturn\tassumption | 7.00% | 7.00% | 5.92% | 6.13% | 7.00% | 7.00% |

Weighted	average	actuarial	assumptions	used	to	determine	benefit	obligations	for	the	plans	were	as	follows:

|  | U.S.	Pension	Benefit	Plans | U.S.	Pension	Benefit	Plans | Non	U.S.	Pension	Benefit<br>Plans | Non	U.S.	Pension	Benefit<br>Plans | Postretirement	Health	Care<br>Benefits	Plan | Postretirement	Health	Care<br>Benefits	Plan |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Discount\trate | 4.30% | 5.15% | 3.19% | 4.24% | 3.90% | 4.65% |
| Future\tcompensation\tincrease\trate | n/a | n/a | 2.54% | 2.58% | n/a | n/a |

|  | U.S.	Pension	Benefit	Plans | U.S.	Pension	Benefit	Plans | Non	U.S.	Pension	Benefit<br>Plans | Non	U.S.	Pension	Benefit<br>Plans |
| :--- | :--- | :--- | :--- | :--- |
| December\t31 | 2014 | 2013 | 2014 | 2013 |
| Accumulated\tbenefit\tobligation | $4,536 | $7,317 | $2,059 | $1,900 |

In	September	2014,	as	a	result	of	establishing	the	New	Plan,	the	Company	remeasured	the	Regular	Pension	Plan	using	a	weighted	average	discount	rate	and expected	long-term	rate	of	return	on	assets	of	4.25%.	The	Regular	Pension	Plan	was	subsequently	terminated.	The	New	Plan,	which	is	the	surviving	plan,	was measured	using	a	discount	rate	and	expected	long-term	rate	of	return	on	assets	of	4.70%	and	7.00%,	respectively.

In	September	2014,	as	a	result	of	retiree	healthcare	design	plan	changes,	the	company	remeasured	the	retiree	healthcare	plan	using	a	weighted	average discount	rate	and	expected	long-term	rates	of	return	on	assets	of	4.15%	and	7.00%,	respectively.

During	2014,	the	Company	adopted	the	"RP	2014	White	Collar"	mortality	table	for	purposes	of	calculating	the	projected	benefit	obligation	for	the	Company's New	Plan.

The	health	care	cost	trend	rate	used	to	determine	the	December	31,	2014	accumulated	postretirement	benefit	obligation	and	2015	net	periodic	benefit	for	the Postretirement	Health	Care	Benefits	Plan	was	7.75%,	grading	down	to	a	rate	of	5.00%	in	2021.	The	health	care	cost	trend	rate	used	to	determine	the	December	31, 2013	accumulated	postretirement	benefit	obligation	and	2014	net	periodic	benefit	was	8.50%,	remaining	flat	at	8.50%	through	2015,	then	grading	down	to	a	rate	of 5.00%	in	2020.

The	effect	of	changing	the	health	care	trend	rate	by	one	percentage	point	on	the	accumulated	postretirement	benefit	obligation	and	the	net	periodic	cost	of	the Postretirement	Health	Care	Benefits	Plan	is	de	minimis.	The	Company	maintains	a	lifetime	cap	on	postretirement	health	care	costs,	which	reduces	the	liability duration	of	the	plan.	A	result	of	this	lower	duration,	is	a	decreased	sensitivity	to	a	change	in	the	discount	rate	trend	and	health	care	cost	assumptions	with	respect	to the	liability	and	related	expense.

# Investment	Policy

The	individual	plans	have	adopted	an	investment	policy	designed	to	meet	or	exceed	the	expected	rate	of	return	on	plan	assets	assumption.	To	achieve	this,	the plans	retain	professional	advisors	and	investment	managers	that	invest	plan	assets	into	various	classes	including,	but	are	not	limited	to,	equity,	fixed	income securities,	cash,	cash	equivalents,	commodities,	hedge	funds,	infrastructure/utilities,	insurance	contracts,	leveraged	loan	funds	and	real	estate.	In	addition,	some plans	invest	in	insurance	contracts.	The	Company	uses	long-term	historical	actual	return	experience	with	consideration	of	the	expected	investment	mix	of	the	plans' assets,	as	well	as	future	estimates	of	long-term	investment	returns,	to	develop	its	expected	rate	of	return	assumption	used	in	calculating	the	net	periodic	cost.	The individual	plans	have	target	mixes	for	these	asset	classes	for	all	plans,	which	are	readjusted	periodically	when	an	asset	class	weighting	deviates	from	the	target	mix, with	the	goal	of	achieving	the	required	return	at	a	reasonable	risk	level.

The	weighted-average	asset	allocations	by	asset	categories	for	all	pension	and	the	Postretirement	Health	Care	Benefits	plans	were	as	follows:

|  | All	Pension	Benefit	Plans |  | Postretirement	Health	Care	Benefits	Plan | Postretirement	Health	Care	Benefits	Plan |
| :--- | :--- | :--- | :--- | :--- |
| December\t31 | 2014 | 2013 | 2014 | 2013 |
| Target\tMix: |  |  |  |  |
| Equity\tsecurities | 41% | 55% | 37% | 57% |
| Fixed\tincome\tsecurities | 44% | 43% | 42% | 42% |
| Cash\tand\tother\tinvestments | 15% | 2% | 21% | 1% |
| Actual\tMix: |  |  |  |  |
| Equity\tsecurities | 43% | 55% | 20% | 58% |
| Fixed\tincome\tsecurities | 44% | 42% | 20% | 40% |
| Cash\tand\tother\tinvestments | 13% | 3% | 60% | 2% |

Within	the	equity	securities	asset	class,	the	investment	policy	provides	for	investments	in	a	broad	range	of	publicly-traded	securities	including	both	domestic	and foreign	equities.	Within	the	fixed	income	securities	asset	class,	the	investment	policy	provides	for	investments	in	a	broad	range	of	publicly-traded	debt	securities including	U.S.	Treasury	issues,	corporate	debt	securities,	mortgage	and	asset-backed	securities,	as	well	as	foreign	debt	securities.	In	the	cash	and	other	investments asset	class,	investments	may	include,	but	are	not	limited	to,	cash,	cash	equivalents,	commodities,	hedge	funds,	infrastructure/utilities,	insurance	contracts,	leveraged loan	funds	and	real	estate.

# Cash	Funding

The	Company	contributed	$1.1	billion	to	its	U.S.	Pension	Benefit	Plans	during	2014,	compared	to	$150	million	contributed	in	2013.	The	Company	contributed $237	million	to	its	Non	U.S.	Pension	Benefit	Plans	during	2014,	compared	to	$32	million	contributed	in	2013.	The	Company	expects	to	make	no	cash	contributions	to its	U.S.	Pension	Benefit	Plans	and	approximately	$12	million	to	its	Non	U.S.	Pension	Benefit	Plans	in	2015.	The	Company	does	not	expect	to	make	cash contributions	to	the	Postretirement	Health	Care	Benefits	Plan	in	2015.

# Expected	Future	Benefit	Payments

The	following	benefit	payments	are	expected	to	be	paid:

| Year | U.S.	Pension	Benefit<br>Plans | Non	U.S.	Pension<br>Benefit	Plans | Postretirement	Health<br>Care	Benefits	Plan |
| :--- | :--- | :--- | :--- |
| 2015 | $95 | $42 | $20 |
| 2016 | 93 | 43 | 19 |
| 2017 | 108 | 44 | 18 |
| 2018 | 122 | 45 | 17 |
| 2019 | 143 | 46 | 16 |
| 2020-2024 | 1,030 | 245 | 67 |

# Other	Benefit	Plans

# Split-Dollar	Life	Insurance	Arrangements

The	Company	maintains	a	number	of	endorsement	split-dollar	life	insurance	policies	on	now-retired	officers	under	a	plan	that	was	frozen	prior	to	December	31, 2004.	The	Company	had	purchased	the	life	insurance	policies	to	insure	the	lives	of	employees	and	then	entered	into	a	separate	agreement	with	the	employees	that split	the	policy	benefits	between	the	Company	and	the	employee.	Motorola	Solutions	owns	the	policies,	controls	all	rights	of	ownership,	and	may	terminate	the insurance	policies.	To	effect	the	split-dollar	arrangement,	Motorola	Solutions	endorsed	a	portion	of	the	death	benefits	to	the	employee	and

upon	the	death	of	the	employee,	the	employee's	beneficiary	typically	receives	the	designated	portion	of	the	death	benefits	directly	from	the	insurance	company	and the	Company	receives	the	remainder	of	the	death	benefits.	It	is	currently	expected	that	minimal	cash	payments	will	be	required	to	fund	these	policies.

The	net	periodic	pension	cost	for	these	split-dollar	life	insurance	arrangements	was	$5	million	for	the	years	ended	December	31,	2014,	2013	and	2012.	The Company	has	recorded	a	liability	representing	the	actuarial	present	value	of	the	future	death	benefits	as	of	the	employees'	expected	retirement	date	of	$66	million	and $51	million	as	of	December	31,	2014	and	December	31,	2013,	respectively.

# Deferred	Compensation	Plan

The	Company	amended	and	reinstated	its	deferred	compensation	plan	("the	Plan")	effective	June	1,	2013	to	reopen	the	Plan	to	certain	participants.	Under	the Plan,	participants	may	elect	to	defer	base	salary	and	cash	incentive	compensation	in	excess	of	401(k)	plan	limitations.		Participants	under	the	Plan	may	choose	to invest	their	deferred	amounts	in	the	same	investment	alternatives	available	under	the	Company's	401(k)	plan.	The	Plan	also	allows	for	Company	matching contributions	for	the	following:	(i)	the	first	4%	of	compensation	deferred	under	the	Plan,	subject	to	a	maximum	of	$50,000	for	board	officers,	(ii)	lost	matching	amounts that	would	have	been	made	under	the	401(k)	plan	if	participants	had	not	participated	in	the	Plan,	and	(iii)	discretionary	amounts	as	approved	by	the	Compensation and	Leadership	Committee	of	the	Board	of	Directors.

# Defined	Contribution	Plan

The	Company	and	certain	subsidiaries	have	various	defined	contribution	plans,	in	which	all	eligible	employees	may	participate.	In	the	U.S.,	the	401(k)	plan	is	a contributory	plan.	Matching	contributions	are	based	upon	the	amount	of	the	employees'	contributions.	The	Company's	expenses	for	material	defined	contribution plans	for	the	years	ended	December	31,	2014,	2013	and	2012	were	$31	million,	$32	million	and	$30	million,	respectively.

Beginning	January	1,	2012,	the	Company	may	make	an	additional	discretionary	401(k)	plan	matching	contribution	to	eligible	employees.	For	the	years	ended December	31,	2014,	2013,	and	2012	the	Company	made	no	discretionary	matching	contributions.

# 8.				Share-Based	Compensation	Plans	and	Other	Incentive	Plans

# Stock	Options,	Stock	Appreciation	Rights	and	Employee	Stock	Purchase	Plan

The	Company	grants	options	to	acquire	shares	of	common	stock	to	certain	employees	and	to	existing	option	holders	of	acquired	companies	in	connection	with the	merging	of	option	plans	following	an	acquisition.	Each	option	granted	and	stock	appreciation	right	has	an	exercise	price	of	no	less	than	100%	of	the	fair	market value	of	the	common	stock	on	the	date	of	the	grant.	The	awards	have	a	contractual	life	of	five	to	fifteen	years	and	vest	over	two	to	four	years.	Stock	options	and	stock appreciation	rights	assumed	or	replaced	with	comparable	stock	options	or	stock	appreciation	rights	in	conjunction	with	a	change	in	control	of	the	Company	only become	exercisable	if	the	holder	is	also	involuntarily	terminated	(for	a	reason	other	than	cause)	or	quits	for	good	reason	within	24	months	of	a	change	in	control.

The	employee	stock	purchase	plan	allows	eligible	participants	to	purchase	shares	of	the	Company's	common	stock	through	payroll	deductions	of	up	to	20%	of eligible	compensation	on	an	after-tax	basis.	Plan	participants	cannot	purchase	more	than	$25,000	of	stock	in	any	calendar	year.	The	price	an	employee	pays	per share	is	85%	of	the	lower	of	the	fair	market	value	of	the	Company's	stock	on	the	close	of	the	first	trading	day	or	last	trading	day	of	the	purchase	period.	The	plan	has two	purchase	periods,	the	first	from	October	1	through	March	31	and	the	second	from	April	1	through	September	30.	For	the	years	ended	December	31,	2014,	2013 and	2012,	employees	purchased	1.4	million,	1.5	million	and	1.4	million	shares,	respectively,	at	purchase	prices	of	$51.76	and	$53.79,	$43.02	and	$50.47,	and	$34.52 and	$42.96,	respectively.

The	Company	calculates	the	value	of	each	employee	stock	option,	estimated	on	the	date	of	grant,	using	the	Black-Scholes	option	pricing	model.	The	weighted- average	estimated	fair	value	of	employee	stock	options	granted	during	2014,	2013	and	2012	was	$11.02,	$9.52	and	$9.60,	respectively,	using	the	following	weighted- average	assumptions:

|  | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Expected\tvolatility | 21.7% | 22.1% | 24.0% |
| Risk-free\tinterest\trate | 1.6% | 0.9% | 0.8% |
| Dividend\tyield | 2.5% | 2.4% | 2.2% |
| Expected\tlife\t(years) | 5.2 | 5.9 | 6.1 |

The	Company	uses	the	implied	volatility	for	traded	options	on	the	Company's	stock	as	the	expected	volatility	assumption	required	in	the	Black-Scholes	model. The	selection	of	the	implied	volatility	approach	was	based	upon	the	availability	of	actively	traded	options	on	the	Company's	stock	and	the	Company's	assessment	that implied	volatility	is	more	representative	of	future	stock	price	trends	than	historical	volatility.

The	risk-free	interest	rate	assumption	is	based	upon	the	average	daily	closing	rates	during	the	year	for	U.S.	Treasury	notes	that	have	a	life	which	approximates the	expected	life	of	the	option.	The	dividend	yield	assumption	is	based	on	the	Company's	future	expectation	of	dividend	payouts.	The	expected	life	of	employee	stock options	represents	the	average	of	the	contractual	term	of	the	options	and	the	weighted-average	vesting	period	for	all	option	tranches.

The	Company	has	applied	forfeiture	rates,	estimated	based	on	historical	data,	of	10%-50%	to	the	option	fair	values	calculated	by	the	Black-Scholes	option pricing	model.	These	estimated	forfeiture	rates	are	applied	to	grants	based	on	their	remaining	vesting	term	and	may	be	revised	in	subsequent	periods	if	actual forfeitures	differ	from	these	estimates.

Stock	option	activity	was	as	follows	(in	thousands,	except	exercise	price	and	employee	data):

|  |  | 2014 |  | 2013 |  | 2012 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Years\tended\tDecember\t31 | Shares\nSubject\tto\nOptions | Wtd.\tAvg.\nExercise\nPrice | Shares\nSubject\tto\nOptions | Wtd.\tAvg.\nExercise\nPrice | Shares\nSubject\tto\nOptions | Wtd.\tAvg.\nExercise\nPrice |
| Options\toutstanding\tat\tJanuary\t1 | 10,937 | $79 | 13,132 | $70 | 15,729 | $63 |
| Options\tgranted | 1,340 | 66 | 1,652 | 57 | 1,286 | 51 |
| Options\texercised | (1,526) | 39 | (2,950) | 31 | (2,831) | 29 |
| Options\tterminated,\tcancelled\tor\texpired | (1,067) | 65 | (897) | 65 | (1,052) | 60 |
| Options\toutstanding\tat\tDecember\t31 | 9,684 | 85 | 10,937 | 79 | 13,132 | 70 |
| Options\texercisable\tat\tDecember\t31 | 7,282 | 94 | 7,628 | 91 | 9,242 | 81 |
| Approx.\tnumber\tof\temployees\tgranted\toptions | 118 |  | 123 |  | 115 |  |

At	December	31,	2014,	the	Company	had	$21	million	of	total	unrecognized	compensation	expense,	net	of	estimated	forfeitures,	related	to	stock	option	plans	and the	employee	stock	purchase	plan	that	will	be	recognized	over	the	weighted	average	period	of	approximately	two	years.	Cash	received	from	stock	option	exercises and	the	employee	stock	purchase	plan	was	$135	million,	$165	million	and	$133	million	for	the	years	ended	December	31,	2014,	2013	and	2012,	respectively.	The total	intrinsic	value	of	options	exercised	during	the	years	ended	December	31,	2014,	2013	and	2012	was	$38	million,	$85	million	and	$59	million,	respectively.	The aggregate	intrinsic	value	for	options	outstanding	and	exercisable	as	of	December	31,	2014	was	$119	million	and	$103	million,	respectively,	based	on	a	December	31, 2014	stock	price	of	$67.08	per	share.

The	following	table	summarizes	information	about	stock	options	outstanding	and	exercisable	at	December	31,	2014	(in	thousands,	except	exercise	price	and

years):

|  |  | Options	Outstanding |  | Options<br>Exercisable | Options<br>Exercisable |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Exercise\tprice\trange | No.\tof\noptions | Wtd.\tavg.\nExercise\nPrice | Wtd.\tavg.\ncontractual\nlife\t(in\tyrs.) | No.\tof\noptions | Wtd.\tavg.\nExercise\nPrice |
| Under\t$30 | 699 | $27 | 5 | 699 | $27 |
| $30-$40 | 2,222 | 39 | 5 | 2,222 | 39 |
| $41-$50 | 231 | 45 | 6 | 222 | 45 |
| $51-$60 | 1,786 | 54 | 8 | 584 | 54 |
| $61-$70 | 1,430 | 66 | 8 | 239 | 65 |
| $71-$80 | 197 | 74 | 2 | 197 | 74 |
| $81\tand\tover | 3,119 | 161 | 0 | 3,119 | 161 |
|  | 9,684 |  |  | 7,282 |  |

As	of	December	31,	2014	and	2013,	the	weighted	average	contractual	life	for	options	outstanding	and	exercisable	was	five	and	four	years,	respectively.

# Restricted	Stock	and	Restricted	Stock	Units

Restricted	stock	("RS")	and	restricted	stock	unit	("RSU")	grants	consist	of	shares	or	the	rights	to	shares	of	the	Company's	common	stock	which	are	awarded	to employees	and	non-employee	directors.	The	grants	are	restricted	such	that	they	are	subject	to	substantial	risk	of	forfeiture	and	to	restrictions	on	their	sale	or	other transfer	by	the	employee.	Shares	of	RS	and	RSUs	assumed	or	replaced	with	comparable	shares	of	RS	or	RSUs	in	conjunction	with	a	change	in	control	will	only	have the	restrictions	lapse	if	the	holder	is	also	involuntarily	terminated	(for	a	reason	other	than	cause)	or	quits	for	good	reason	within	24	months	of	a	change	in	control.

Restricted	stock	and	restricted	stock	unit	activity	was	as	follows	(in	thousands,	except	fair	value	and	employee	data):

|  |  | 2014 | 2013 | 2013 |  | 2012 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Years\tended\tDecember\t31 | RS\tand\tRSU | Wtd.\tAvg.\nGrant\nDate\tFair\nValue | RS\tand\tRSU | Wtd\tAvg.\nGrant\nDate\tFair\nValue | RS\tand\tRSU | Wtd\tAvg.\nGrant\nDate\tFair\nValue |
| RS\tand\tRSU\toutstanding\tat\tJanuary\t1 | 3,728 | $49 | 6,299 | $41 | 8,990 | $40 |
| Granted | 1,235 | 63 | 1,558 | 54 | 1,657 | 49 |
| Vested | (2,445) | 48 | (3,610) | 38 | (3,845) | 41 |
| Terminated,\tcanceled\tor\texpired | (765) | 54 | (519) | 45 | (503) | 33 |
| RS\tand\tRSU\toutstanding\tat\tDecember\t31 | 1,753 | 58 | 3,728 | 49 | 6,299 | 41 |
| Approx.\tnumber\tof\temployees\tgranted\tRS\tand\tRSUs | 1,979 |  | 2,295 |  | 2,355 |  |

At	December	31,	2014,	the	Company	had	unrecognized	compensation	expense	related	to	RS	and	RSUs	of	$65	million	net	of	estimated	forfeitures,	expected	to be	recognized	over	the	weighted	average	period	of	approximately	two	years.	The	total	fair	value	of	RS	and	RSU	shares	vested	during	the	years	ended	December	31, 2014,	2013	and	2012	was	$160	million,	$138	million	and	$144	million,	respectively.	The	aggregate	fair	value	of	outstanding	RS	and	RSUs	as	of	December	31,	2014 was	$110	million.

# Total	Share-Based	Compensation	Expense

Compensation	expense	for	the	Company's	employee	stock	options,	stock	appreciation	rights,	employee	stock	purchase	plans,	RS	and	RSUs	was	as	follows:

| Years	ended	December	31 | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Share-based\tcompensation\texpense\tincluded\tin: |  |  |  |
| Costs\tof\tsales | $10 | $16 | $20 |
| Selling,\tgeneral\tand\tadministrative\texpenses | 61 | 73 | 88 |
| Research\tand\tdevelopment\texpenditures | 23 | 31 | 38 |
| Share-based\tcompensation\texpense\tincluded\tin\tOperating\tearnings | 94 | 120 | 146 |
| Tax\tbenefit | 30 | 37 | 49 |
| Share-based\tcompensation\texpense,\tnet\tof\ttax | $64 | $83 | $97 |
| Decrease\tin\tbasic\tearnings\tper\tshare | $(0.28) | $(0.31) | $(0.33) |
| Decrease\tin\tdiluted\tearnings\tper\tshare | $(0.28) | $(0.31) | $(0.33) |
| Share-based\tcompensation\texpense\tin\tdiscontinued\toperations | $20 | $33 | $38 |

At	December	31,	2014	and	2013,	19.7	million	and	20.4	million	shares,	respectively,	were	available	for	future	share-based	award	grants	under	the	current	share- based	compensation	plan,	covering	all	equity	awards	to	employees	and	non-employee	directors.

# Motorola	Solutions	Incentive	Plans

The	Company's	incentive	plans	provide	eligible	employees	with	an	annual	payment,	calculated	as	a	percentage	of	an	employee's	eligible	earnings,	in	the	year after	the	close	of	the	current	calendar	year	if	specified	business	goals	and	individual	performance	targets	are	met.	The	expense	for	awards	under	these	incentive plans	for	the	years	ended	December	31,	2014,	2013	and	2012	was	$53	million,	$87	million	and	$145	million,	respectively.

# Long-Range	Incentive	Plan

The	Long-Range	Incentive	Plan	("LRIP")	rewards	participating	elected	officers	for	the	Company's	achievement	of	specified	business	goals	during	the	period, based	on	a	single	performance	objective	measured	over	a	three	year	period.	The	expense	for	LRIP	for	the	years	ended	December	31,	2014,	2013	and	2012	was	$3 million,	$4	million	and	$9	million,	respectively.

# 9.				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	on	a	recurring	basis.	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.	Fair	value	is	measured	using	the	fair	value	hierarchy	and	related	valuation	methodologies	as	defined	in	the authoritative	literature.	This	guidance	specifies	a	hierarchy	of	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	as	they	pertain	to	the	Company	are as	follows:

Level	1	-	Quoted	market	prices	in	active	markets	are	available	for	investments	in	common	and	preferred	stock	and	common	stock	equivalents.

Level	2	-	The	securities	classified	as	Level	2	are	comprised	primarily	of	corporate,	government,	agency,	and	government	sponsored	enterprise	fixed	income securities.	Our	pension	plan	assets	also	include	commingled	equities	classified	as	Level	2.	These	securities	are	priced	using	pricing	services,	bid/offer,	and	last	trade. Prices	may	also	be	obtained	from	brokers,	counterparties,	fund	administrators,	online	securities	data	services,	or	investment	managers.	Fixed	income	securities	and commingled	equities,	including	short-term	instruments,	may	be	priced	using	pricing	models	comprised	of	observable	inputs	which	include,	but	are	not	limited	to, market	quotations,	yields,	maturities,	call	features,	and	the	security's	terms	and	conditions.

In	determining	the	fair	value	of	the	Company's	foreign	currency	derivatives,	the	Company	uses	forward	contract	and	option	valuation	models	employing	market observable	inputs,	such	as	spot	currency	rates,	time	value	and	option	volatilities.	Since	the	Company	primarily	uses	observable	inputs	in	its	valuation	of	its	derivative assets	and	liabilities,	they	are	classified	as	Level	2	assets.

Level	3	-	The	securities	classified	as	Level	3	primarily	consist	of	corporate	bonds	held	in	one	of	our	non-U.S.	pension	plans.	These	corporate	bonds	are	valued using	pricing	models	which	contain	unobservable	inputs	and	have	limited	liquidity.	Determining	the	fair	value	of	these	securities	requires	the	use	of	unobservable inputs,	such	as	indicative	quotes	from	dealers,	extrapolated	data,	proprietary	models	and	qualitative	input	from	investment	advisors.

# Investments	and	Derivatives

The	fair	values	of	the	Company's	financial	assets	and	liabilities	by	level	in	the	fair	value	hierarchy	as	of	December	31,	2014	and	2013	were	as	follows:

# Pension	and	Postretirement	Health	Care	Benefits	Plan	Assets

The	fair	values	of	the	various	pension	and	postretirement	health	care	benefits	plans'	assets	by	level	in	the	fair	value	hierarchy	as	of	December	31,	2014	and 2013	were	as	follows:

# U.S.	Pension	Benefit	Plans

| December	31,	2014 | Level	1 | Level	2 | Total |
| :--- | :--- | :--- | :--- |
| Common\tstock\tand\tequivalents | $902 | $— | $902 |
| Commingled\tequity\tfunds | — | 565 | 565 |
| Preferred\tstock | 3 | — | 3 |
| Government,\tagency\tand\tgovernment-sponsored\tenterprise\tobligations | — | 520 | 520 |
| Other\tgovernment\tbonds | — | 91 | 91 |
| Corporate\tbonds | — | 795 | 795 |
| Mortgage-backed\tbonds | — | 16 | 16 |
| Commingled\tshort-term\tinvestment\tfunds | — | 422 | 422 |
| Total\tinvestment\tsecurities | $905 | $2,409 | $3,314 |
| Accrued\tincome\treceivable |  |  | 3 |
| Fair\tvalue\tplan\tassets |  |  | $3,317 |

The	table	above	includes	no	securities	on	loan	as	part	of	a	securities	lending	arrangement.

| December	31,	2013 | Level	1 | Level	2 | Total |
| :--- | :--- | :--- | :--- |
| Common\tstock\tand\tequivalents | $1,424 | $— | $1,424 |
| Commingled\tequity\tfunds | — | 2,045 | 2,045 |
| Preferred\tstock | 6 | — | 6 |
| Government,\tagency\tand\tgovernment-sponsored\tenterprise\tobligations | — | 238 | 238 |
| Other\tgovernment\tbonds | — | 42 | 42 |
| Corporate\tbonds | — | 336 | 336 |
| Mortgage-backed\tbonds | — | 15 | 15 |
| Commingled\tbond\tfunds | — | 1,862 | 1,862 |
| Commingled\tshort-term\tinvestment\tfunds | — | 96 | 96 |
| Total\tinvestment\tsecurities | $1,430 | $4,634 | $6,064 |
| Accrued\tincome\treceivable |  |  | 7 |
| Fair\tvalue\tplan\tassets |  |  | $6,071 |

The	table	above	includes	securities	on	loan	as	part	of	a	securities	lending	arrangement	of	$125	million	of	common	stock	and	equivalents,	$199	million	of government,	agency,	and	government-sponsored	enterprise	obligations,	and	$19	million	of	corporate	bonds.	All	securities	on	loan	are	fully	cash	collateralized.

There	were	no	significant	transfers	between	Level	1	and	Level	2	during	2014	or	2013.

# Non-U.S.	Pension	Benefit	Plans

| December	31,	2014 | Level	1 | Level	2 | Total |
| :--- | :--- | :--- | :--- |
| Common\tstock\tand\tequivalents | $194 | $— | $194 |
| Commingled\tequity\tfunds | — | 569 | 569 |
| Government,\tagency,\tand\tgovernment-sponsored\tenterprise\tobligations | — | 26 | 26 |
| Corporate\tbonds | — | 316 | 316 |
| Commingled\tbond\tfunds | — | 399 | 399 |
| Commingled\tshort-term\tinvestment\tfunds | — | 9 | 9 |
| Total\tinvestment\tsecurities | $194 | $1,319 | $1,513 |
| Cash |  |  | 233 |
| Accrued\tincome\treceivable |  |  | 5 |
| Insurance\tcontracts |  |  | 55 |
| Fair\tvalue\tplan\tassets |  |  | $1,806 |

The	table	above	includes	securities	on	loan	as	part	of	a	securities	lending	arrangement	of	$16	million	of	common	stock	and	equivalents	and	$12	million	of corporate	bonds.	All	securities	on	loan	are	fully	collateralized.

The	following	table	summarizes	the	changes	in	fair	value	of	the	Level	3	assets:

| December	31,	2013 | Level	1 | Level	2 | Level	3 | Total |
| :--- | :--- | :--- | :--- | :--- |
| Common\tstock\tand\tequivalents | $172 | $— | $— | $172 |
| Commingled\tequity\tfunds | — | 558 | — | 558 |
| Government,\tagency,\tand\tgovernment-sponsored\tenterprise\tobligations | — | 21 | 3 | 24 |
| Corporate\tbonds | — | 289 | 23 | 312 |
| Commingled\tbond\tfunds | — | 361 | — | 361 |
| Commingled\tshort-term\tinvestment\tfunds | — | 11 | — | 11 |
| Total\tinvestment\tsecurities | $172 | $1,240 | $26 | $1,438 |
| Accrued\tincome\treceivable |  |  |  | 61 |
| Insurance\tcontracts |  |  |  | 14 |
| Fair\tvalue\tplan\tassets |  |  |  | $1,513 |

# Postretirement	Health	Care	Benefits	Plan

| December	31,	2014 | Level	1 | Level	2 | Total |
| :--- | :--- | :--- | :--- |
| Common\tstock\tand\tequivalents | $20 | $— | $20 |
| Commingled\tequity\tfunds | — | 13 | 13 |
| Government,\tagency,\tand\tgovernment-sponsored\tenterprise\tobligations | — | 11 | 11 |
| Other\tgovernment\tbonds | — | 2 | 2 |
| Corporate\tbonds | — | 18 | 18 |
| Commingled\tbond\tfunds | — | — | — |
| Commingled\tshort-term\tinvestment\tfunds | — | 99 | 99 |
| Fair\tvalue\tplan\tassets | $20 | $143 | $163 |

| December	31,	2013 | Level	1 | Level	2 | Total |
| :--- | :--- | :--- | :--- |
| Common\tstock\tand\tequivalents | $38 | $— | $38 |
| Commingled\tequity\tfunds | — | 55 | 55 |
| Government,\tagency,\tand\tgovernment-sponsored\tenterprise\tobligations | — | 6 | 6 |
| Other\tgovernment\tbonds | — | 1 | 1 |
| Corporate\tbonds | — | 9 | 9 |
| Commingled\tbond\tfunds | — | 49 | 49 |
| Commingled\tshort-term\tinvestment\tfunds | — | 3 | 3 |
| Fair\tvalue\tplan\tassets | $38 | $123 | $161 |

The	table	above	includes	securities	on	loan	as	part	of	a	securities	lending	arrangement	of	$3	million	of	common	stock	and	equivalents	and	$5	million	of government,	agency,	and	government-sponsored	enterprise	obligations.	All	securities	on	loan	are	fully	cash	collateralized.

At	December	31,	2014,	the	Company	had	$3.3	billion	of	investments	in	money	market	funds	(Level	2)	classified	as	Cash	and	cash	equivalents	in	its	consolidated balance	sheet,	compared	to	$2.1	billion	at	December	31,	2013.	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	December	31,	2014	was	$3.6	billion (Level	2),	compared	to	a	face	value	of	$3.5	billion.	Since	considerable	judgment	is	required	in	interpreting	market	information,	the	fair	value	of	the	long-term	debt	is	not necessarily	indicative	of	the	amount	which	could	be	realized	in	a	current	market	exchange.

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

# 10.				Long-term	Customer	Financing	and	Sales	of	Receivables

# Long-term	Customer	Financing

Long-term	receivables	consist	of	trade	receivables	with	payment	terms	greater	than	twelve	months,	long-term	loans	and	lease	receivables	under	sales-type leases.	Long-term	receivables	consist	of	the	following:

| December	31 | 2014 | 2013 |
| :--- | :--- | :--- |
| Long-term\treceivables | $49 | $27 |
| Less\tcurrent\tportion | (18) | (26) |
| Non-current\tlong-term\treceivables,\tnet | $31 | $1 |

The	current	portion	of	long-term	receivables	is	included	in	Accounts	receivable	and	the	non-current	portion	of	long-term	receivables	is	included	in	Other	assets in	the	Company's	consolidated	balance	sheets.	There	was	$1	million	Interest	income	recognized	on	long-term	receivables	for	the	year	ended	December	31,	2014. There	was	no	interest	income	recognized	on	long-term	receivables	for	the	year	ended	2013	and	$5	million	for	the	year	ended	2012.

Certain	purchasers	of	the	Company's	products	and	services	may	request	that	the	Company	provide	long-term	financing	(defined	as	financing	with	a	term	greater than	one	year)	in	connection	with	the	sale	of	products	and	services.	These	requests	may	include	all	or	a	portion	of	the	purchase	price	of	the	products	and	services. The	Company's	obligation	to	provide	long-term	financing	may	be	conditioned	on	the	issuance	of	a	letter	of	credit	in	favor	of	the	Company	by	a	reputable	bank	to support	the	purchaser's	credit	or	a	pre-existing	commitment	from	a	reputable	bank	to	purchase	the	long-term	receivables	from	the	Company.

The	Company	had	outstanding	commitments	to	provide	long-term	financing	to	third-parties	totaling	$293	million	at	December	31,	2014,	compared	to	$50	million	at December	31,	2013.

From	time	to	time,	the	Company	sells	accounts	receivable	and	long-term	receivables	to	third-parties	under	one-time	arrangements	while	others	are	sold	to	third- parties.	The	Company	may	or	may	not	retain	the	obligation	to	service	the	sold	accounts	receivable	and	long-term	receivables.

| Years	ended	December	31 | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Cumulative\tannual\tproceeds\treceived\tfrom\tsales: |  |  |  |
| Accounts\treceivable\tsales\tproceeds | $50 | $14 | $12 |
| Long-term\treceivables\tsales\tproceeds | 124 | 131 | 178 |
| Total\tproceeds\tfrom\treceivable\tsales | $174 | $145 | $190 |

At	December	31,	2014,	the	Company	had	retained	servicing	obligations	for	$496	million	of	long-term	receivables,	compared	to	$434	million	of	long-term receivables	at	December	31,	2013.	Servicing	obligations	are	limited	to	collection	activities	of	sold	accounts	receivables	and	long-term	receivables.

# Credit	Quality	of	Customer	Financing	Receivables	and	Allowance	for	Credit	Losses

An	aging	analysis	of	financing	receivables	at	December	31,	2014	and	December	31,	2013	is	as	follows:

| December	31,	2014 | Long-term<br>Receivable | Past	Due	Over	90	Days |
| :--- | :--- | :--- |
| Municipal\tleases\tsecured\ttax\texempt | $14 | $— |
| Commercial\tloans\tand\tleases\tsecured | 35 | 12 |
| Total\tgross\tlong-term\treceivables,\tincluding\tcurrent\tportion | $49 | $12 |

| December	31,	2013 | Long-term<br>Receivable | Current	Billed<br>Due | Past	Due	Under	90<br>Days | Past	Due	Over	90<br>Days |
| :--- | :--- | :--- | :--- | :--- |
| Municipal\tleases\tsecured\ttax\texempt | $1 | $— | $— | $— |
| Commercial\tloans\tand\tleases\tsecured | 26 | 10 | 2 | 10 |
| Total\tgross\tlong-term\treceivables,\tincluding\tcurrent\nportion | $27 | $10 | $2 | $10 |

The	Company	uses	an	internally	developed	credit	risk	rating	system	for	establishing	customer	credit	limits.	This	system	is	aligned	and	comparable	to	the	rating systems	utilized	by	independent	rating	agencies.

The	Company's	policy	for	valuing	the	allowance	for	credit	losses	is	to	review	all	customer	financing	receivables	for	collectability	on	an	individual	receivable basis.	For	those	receivables	where	collection	risk	is	probable,	the	Company	calculates	the	value	of	impairment	based	on	the	net	present	value	of	expected	future cash	flows	from	the	customer.

The	Company	had	a	total	of	$12	million	of	financing	receivables	past	due	over	90	days	as	of	December	31,	2014	in	relation	to	two	loans.	The	Company	is	not accruing	interest	on	these	loans	as	of	December	31,	2014,	which	are	adequately	reserved.

# 11.				Commitments	and	Contingencies

# Lease	Obligations

The	Company	leases	certain	office,	factory	and	warehouse	space,	land,	and	information	technology	and	other	equipment	under	principally	non-cancelable operating	leases.	Rental	expense,	net	of	sublease	income,	for	the	years	ended	December	31,	2014,	2013	and	2012	was	$62	million,	$51	million,	and	$45	million, respectively.

At	December	31,	2014,	future	minimum	lease	obligations,	net	of	minimum	sublease	rentals,	for	the	next	five	years	and	beyond	are	as	follows:

| Year |  |
| :--- | :--- |
| 2015 | $68 |
| 2016 | 56 |
| 2017 | 45 |
| 2018 | 35 |
| 2019 | 33 |
| Beyond | 217 |

# Purchase	Obligations

During	the	normal	course	of	business,	in	order	to	manage	manufacturing	lead	times	and	help	ensure	adequate	component	supply,	the	Company	enters	into agreements	with	contract	manufacturers	and	suppliers	that	either	allow	them	to	procure	inventory	based	upon	criteria	as	defined	by	the	Company	or	establish	the parameters	defining	the	Company's	requirements.	In	addition,	we	have	entered	into	software	license	agreements	which	are	firm	commitments	and	are	not cancelable.	As	of	December	31,	2014,	the	Company	had	entered	into	firm,	noncancelable,	and	unconditional	commitments	under	such	arrangements	through	2017. The	Company	expects	to	make	total	payments	of	$40	million	under	these	arrangements	as	follows:	$23	million	in	2015,	$14	million	in	2016,	and	$3	million	in	2017.

The	Company	outsources	certain	corporate	functions,	such	as	benefit	administration	and	information	technology	related	services,	the	longest	of	which	is expected	to	expire	in	2019.	The	remaining	payments	under	these	contracts	are	approximately	$319	million	over	the	remaining	life	of	the	contracts;	however,	these contracts	can	be	terminated.	Termination	would	result	in	a	penalty	substantially	less	than	the	remaining	annual	contract	payments.	The	Company	would	also	be required	to	find	another	source	for	these	services,	including	the	possibility	of	performing	them	in-house.

# Legal

The	Company	is	a	defendant	in	various	lawsuits,	claims	and	actions	that	arise	in	the	normal	course	of	business.	While	the	outcome	of	these	matters	is	currently not	determinable,	the	Company	does	not	expect	the	ultimate	disposition	of	these	matters	to	have	a	material	adverse	effect	on	the	Company's	consolidated	financial position,	liquidity	or	results	of	operations.

# Indemnifications

The	Company	is	a	party	to	a	variety	of	agreements	pursuant	to	which	it	is	obligated	to	indemnify	the	other	party	with	respect	to	certain	matters.	In indemnification	cases,	payment	by	the	Company	is	conditioned	on	the	other	party	making	a	claim	pursuant	to	the	procedures	specified	in	the	particular	contract, which	procedures	typically	allow	the	Company	to	challenge	the	other	party's	claims.	In	some	instances,	the	Company	may	have	recourse	against	third-parties	for certain	payments	made	by	the	Company.

Some	of	these	obligations	arise	as	a	result	of	divestitures	of	the	Company's	assets	or	businesses	and	require	the	Company	to	indemnify	the	other	party	against losses	arising	from	breaches	of	representations	and	warranties	and	covenants	and,	in	some	cases,	the	settlement	of	pending	obligations.	The	Company's	obligations under	divestiture	agreements	for	indemnification	based	on	breaches	of	representations	and	warranties	are	generally	limited	in	terms	of	duration,	and	for	amounts	for breaches	of	such	representations	and	warranties	in	connection	with	prior	divestitures	not	in	excess	of	a	percentage	of	the	contract	value.	The	Company	had	no pending	claims	at	December	31,	2014.

In	addition,	the	Company	may	provide	indemnifications	for	losses	that	result	from	the	breach	of	general	warranties	contained	in	certain	commercial	and intellectual	property	agreements.	Historically,	the	Company	has	not	made	significant	payments	under	these	agreements.

# 12.				Information	by	Segment	and	Geographic	Region

The	Company	conducts	its	business	globally	and	manages	through	following	two	segments:

Products:	The	Products	segment	offers	an	extensive	portfolio	of	infrastructure,	devices,	accessories,	and	software.	The	primary	customers	of	the Products	segment	are	government,	public	safety	and	first-responder	agencies,	municipalities,	and	commercial	and	industrial	customers	who	operate	private communications	networks	and	manage	a	mobile	workforce.	The	Products	segment	is	comprised	of	Devices	and	Systems.	Devices	includes	two-way portable	and	vehicle-mounted	radios,	accessories,	software	features	and	upgrades.	Systems	includes	the	radio	network	core	and	central	processing software,	base	stations,	consoles,	repeaters,	and	software	applications	and	features.	In	2014,	the	segment's	net	sales	were	$3.8	billion,	representing	65%	of the	Company's	consolidated	net	sales.

Services:	The	Services	segment	provides	a	full	set	of	offerings	for	government,	public	safety	and	commercial	communication	networks	including:	(i) Integration	services,	(ii)	Lifecycle	Support	services,	(iii)	Managed	services,	(iv)	Smart	Public	Safety	Solutions,	and	(v)	iDEN	services.	Integration	services includes	implementation,	optimization,	and	integration	of	networks,	devices,	software,	and	applications.		Lifecycle	Support	services	includes	lifecycle planning,

software	and	hardware	maintenance,	security	patches	and	upgrades,	call	center	support,	network	monitoring,	and	repair	services.		Managed	services includes	managing	and	operating	customer	systems	and	devices	at	defined	services	levels.	Smart	Public	Safety	Solutions	includes	software	and	hardware solutions	for	our	customers'	"Command	&	Control"	centers	providing	video	monitoring	support,	data	analytics,	and	content	management	with	the	objective	of enabling	smart	policing.		iDEN	services	consists	primarily	of	hardware	and	software	maintenance	services	for	our	legacy	iDEN	customers.	In	2014,	the segment's	net	sales	were	$2.1	billion,	representing	35%	of	the	Company's	consolidated	net	sales.

For	the	years	ended	December	31,	2014,	2013	and	2012,	no	single	customer	accounted	for	more	than	10%	of	the	Company's	net	sales.

|  |  | Net	Sales |  | Operating	Earnings	(Loss) | Operating	Earnings	(Loss) | Operating	Earnings	(Loss) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Years\tended\tDecember\t31 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 |
| Products | $3,807 | $4,109 | $4,236 | $(667) | $639 | $656 |
| Services | 2,074 | 2,118 | 2,033 | (339) | 308 | 264 |
|  | $5,881 | $6,227 | $6,269 | (1,006) | 947 | 920 |
| Total\tother\texpense |  |  |  | (155) | (67) | (39) |
| Earnings\t(loss)\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes |  |  |  | $(1,161) | $880 | $881 |

The	Company's	"chief	operating	decision	maker"	does	not	review	and	allocate	resources	by	segment	assets.

# Geographic	Area	Information

# *	Excluding	assets	held	for	disposition

The	Company	maintains	a	formal	Involuntary	Severance	Plan	(the	"Severance	Plan"),	which	permits	the	Company	to	offer	eligible	employees	severance benefits	based	on	years	of	service	and	employment	grade	level	in	the	event	that	employment	is	involuntarily	terminated	as	a	result	of	a	reduction-in-force	or restructuring.	The	Severance	Plan	includes	defined	formulas	to	calculate	employees'	termination	benefits.		In	addition	to	the	Involuntary	Severance	Plan,	during	the year	ended	December	31,	2013,	the	Company	accepted	voluntary	applications	to	its	Severance	Plan	from	a	defined	subset	of	employees	within	the	United	States. Voluntary	applicants	received	termination	benefits	based	on	the	formulas	defined	in	the	Severance	Plan;	however,	termination	benefits,	which	are	normally	capped	at six	months	of	salary,	were	capped	at	a	full	year's	salary.

The	Company	recognizes	termination	benefits	based	on	formulas	per	the	Severance	Plan	at	the	point	in	time	that	future	settlement	is	probable	and	can	be reasonably	estimated	based	on	estimates	prepared	at	the	time	a	restructuring	plan	is	approved	by	management.	Exit	costs	consist	of	future	minimum	lease	payments on	vacated	facilities	and	other	contractual	terminations.	At	each	reporting	date,	the	Company	evaluates	its	accruals	for	employee	separation	and	exit	costs	to	ensure the	accruals	are	still	appropriate.	In	certain	circumstances,	accruals	are	no	longer	needed	because	of	efficiencies	in	carrying	out	the	plans	or	because	employees previously	identified	for	separation	resigned	from	the	Company	and	did	not	receive	severance,	or	were	redeployed	due	to	circumstances	not	foreseen	when	the original	plans	were	approved.	In	these	cases,	the	Company

reverses	accruals	through	the	consolidated	statements	of	operations	where	the	original	charges	were	recorded	when	it	is	determined	they	are	no	longer	needed.

During	2014,	2013,	and	2012	the	Company	continued	to	implement	various	productivity	improvement	plans	aimed	at	achieving	long-term,	sustainable profitability	by	driving	efficiencies	and	reducing	operating	costs.	Both	of	the	Company's	segments	were	impacted	by	these	plans.	The	employees	affected	were located	in	all	geographic	regions.

During	2014,	the	Company	recorded	net	reorganization	of	business	charges	of	$73	million,	including	$9	million	of	charges	in	Costs	of	sales	and	$64	million	of charges	in	Other	charges	in	the	Company's	consolidated	statements	of	operations.	Included	in	the	aggregate	$73	million	are	charges	of	$67	million	for	employee separation	costs	and,	$7	million	for	exit	costs,	partially	offset	by	$1	million	of	reversals	for	accruals	no	longer	needed.

The	following	table	displays	the	net	charges	incurred	by	segment:

The	following	table	displays	a	rollforward	of	the	reorganization	of	businesses	accruals	established	for	exit	costs	and	employee	separation	costs,	including	those related	to	discontinued	operations	which	were	maintained	by	the	Company	after	the	sale	of	the	Enterprise	business,	from	January	1,	2014	to	December	31,	2014:

|  | Accruals	at<br>January	1 | Additional<br>Charges | Adjustments | Amount<br>Used | Accruals	at<br>December	31 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Exit\tcosts | $6 | $7 | $— | $(13) | $— |
| Employee\tseparation\tcosts | 103 | 93 | (4) | (135) | 57 |
|  | $109 | $100 | $(4) | $(148) | $57 |

# Exit	Costs

At	January	1,	2014,	the	Company	had	an	accrual	of	$6	million	for	exit	costs	attributable	to	lease	terminations.	There	were	$7	million	of	additional	charges	in 2014.	The	$13	million	used	in	2014	reflects	cash	payments.	There	is	no	remaining	accrual	as	of	December	31,	2014.

# Employee	Separation	Costs

At	January	1,	2014,	the	Company	had	an	accrual	of	$103	million	for	employee	separation	costs.	The	2014	additional	charges	of	$93	million	represent	severance costs	for	approximately	an	additional	1,200	employees,	of	which	300	were	direct	employees	and	900	were	indirect	employees.	The	adjustments	of	$4	million	reflect reversals	of	accruals	no	longer	needed.	The	$135	million	used	in	2014	reflects	cash	payments	to	separated	employees,	including	$50	million	related	to	employees	of the	Enterprise	business	and	included	in	cash	flow	from	discontinued	operations.	The	remaining	accrual	of	$57	million,	which	is	included	in	Accrued	liabilities	in	the Company's	consolidated	balance	sheet	at	December	31,	2014,	is	expected	to	be	paid,	generally,	within	one	year	to:	(i)	severed	employees	who	have	already	begun	to receive	payments	and	(ii)	approximately	500	employees	to	be	separated	in	2015.

During	2013,	the	Company	recorded	net	reorganization	of	business	charges	of	$86	million,	including	$16	million	of	charges	in	Costs	of	sales	and	$70	million	of charges	under	Other	charges	in	the	Company's	consolidated	statements	of	operations.	Included	in	the	aggregate	$86	million	are	charges	of	(i)	$94	million	for employee	separation	costs,	and	(ii)	$2	million	of	charges	for	exit	costs,	partially	offset	by	$10	million	of	reversals	for	accruals	no	longer	needed.

|  | Accruals	at<br>January	1 | Additional<br>Charges | Adjustments | Amount<br>Used | Accruals	at<br>December	31 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Exit\tcosts | $4 | $3 | $— | $(1) | $6 |
| Employee\tseparation\tcosts | 31 | 146 | (16) | (58) | 103 |
|  | $35 | $149 | $(16) | $(59) | $109 |

At	January	1,	2013,	the	Company	had	an	accrual	of	$4	million	for	exit	costs	attributable	to	lease	terminations.	There	were	$3	million	of	additional	charges	in 2013.	The	$1	million	used	in	2013	reflects	cash	payments.	The	remaining	accrual	of	$6	million,	which	is	included	in	Accrued	liabilities	in	the	Company's	consolidated balance	sheet	at	December	31,	2013,	represents	future	cash	payments,	primarily	for	lease	termination	obligations.

At	January	1,	2013,	the	Company	had	an	accrual	of	$31	million	for	employee	separation	costs,	representing	the	severance	costs	for	approximately	400 employees.	The	additional	2013	charges	of	$146	million	represent	severance	costs	for	approximately	an	additional	2,200	employees,	of	which	800	were	direct employees	and	1,400	were	indirect	employees.	The	adjustments	of	$16	million	reflect	accruals	no	longer	needed.	The	$58	million	used	in	2013	reflects	cash payments	to	these	separated	employees,	including	$20	million	related	to	employees	of	the	Enterprise	business	and	included	in	cash	flow	from	discontinued operations.	The	remaining	accrual	of	$103	million	was	included	in	Accrued	liabilities	in	the	Company's	consolidated	balance	sheet	at	December	31,	2013.

The	Company	recorded	net	reorganization	of	business	charges	of	$33	million,	including	$6	million	of	charges	in	Costs	of	sales	and	$27	million	of	charges	in Other	charges	in	the	Company's	consolidated	statements	of	operations.	Included	in	the	aggregate	$33	million	are	charges	of	$35	million	for	employee	separation costs	and	$5	million	for	building	impairment	charges,	partially	offset	by	$7	million	of	reversals	for	accruals	no	longer	needed.

|  | Accruals	at<br>January	1 | Additional<br>Charges | Adjustments | Amount<br>Used | Accruals	at<br>December	31 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Exit\tcosts | $14 | $— | $1 | $(11) | $4 |
| Employee\tseparation\tcosts | 30 | 54 | (9) | (44) | 31 |
|  | $44 | $54 | $(8) | $(55) | $35 |

At	January	1,	2012,	the	Company	had	an	accrual	of	$14	million	for	exit	costs	attributable	to	lease	terminations.	The	adjustment	of	$1	million	reflects	an adjustment	for	additional	accruals	needed.	The	$11	million	used	in	2012	reflects	cash	payments.	The	remaining	accrual	of	$4	million,	which	was	included	in	Accrued liabilities	in	the	Company's	consolidated	balance	sheets	at	December	31,	2012,	represented	future	cash	payments,	primarily	for	lease	termination	obligations.

At	January	1,	2012,	the	Company	had	an	accrual	of	$30	million	for	employee	separation	costs,	representing	the	severance	costs	for	approximately	700 employees.	The	additional	2012	charges	of	$54	million	were	severance	costs	for	approximately	an	additional	1,000	employees,	of	which	300	were	direct	employees and	700	were	indirect	employees.	The	adjustments	of	$9	million	reflect	accruals	no	longer	required.	The	$44	million	used	in	2012	reflects	cash	payments	to	these separated	employees,	including	$20	million	related	to	employees	of	the	Enterprise	business	and	included	in	cash	flow	from	discontinued	operations.	The	remaining accrual	of	$31	million	was	included	in	Accrued	liabilities	in	the	Company's	consolidated	balance	sheet	at	December	31,	2012.

# 14.						Intangible	Assets	and	Goodwill

The	Company	accounts	for	acquisitions	using	purchase	accounting	with	the	results	of	operations	for	each	acquiree	included	in	the	Company's	consolidated financial	statements	for	the	period	subsequent	to	the	date	of	acquisition.	The	pro	forma	effects	of	the	acquisitions	completed	in	2014,	2013,	and	2012	were	not significant	individually	or	in	the	aggregate.	The	Company	did	not	have	any	significant	acquisitions	during	the	years	ended	December	31,	2014,	2013	and	2012.

# Intangible	Assets

Amortized	intangible	assets	are	comprised	of	the	following:

|  |  | 2014 |  | 2013 |
| :--- | :--- | :--- | :--- | :--- |
| December\t31 | Gross\nCarrying\nAmount | Accumulated\nAmortization | Gross\nCarrying\nAmount | Accumulated\nAmortization |
| Intangible\tassets: |  |  |  |  |
| Completed\ttechnology | $37 | $27 | $24 | $24 |
| Patents | 8 | 4 | 8 | 3 |
| Customer-related | 15 | 8 | 6 | 6 |
| Other\tintangibles | 17 | 15 | 15 | 14 |
|  | $77 | $54 | $53 | $47 |

Amortization	expense	on	intangible	assets,	which	is	included	within	Other	charges	in	the	consolidated	statements	of	operations,	was	$4	million,	$1	million	and $1	million	for	the	years	ended	December	31,	2014,	2013	and	2012,	respectively.	As	of	December	31,	2014,	future	amortization	expense	is	estimated	to	be	$4	million	in 2015,	2016,	and	2017,	and	$3	million	in	2018	and	2019.

As	of	both	December	31,	2014,	and	December	31,	2013,	all	of	the	Company's	amortized	intangible	assets,	excluding	goodwill,	were	aligned	with	the	Products segment.

# Goodwill

The	following	table	displays	a	rollforward	of	the	carrying	amount	of	goodwill	by	segment	from	January	1,	2013	to	December	31,	2014:

|  | Products | Services | Total |
| :--- | :--- | :--- | :--- |
| Balance\tas\tof\tJanuary\t1,\t2013 |  |  |  |
| Aggregate\tgoodwill\tacquired | $249 | $112 | $361 |
| Accumulated\timpairment\tlosses | — | — | — |
| Goodwill,\tnet\tof\timpairment\tlosses | 249 | 112 | 361 |
| Balance\tas\tof\tDecember\t31,\t2013 |  |  |  |
| Aggregate\tgoodwill\tacquired/disposed | 249 | 112 | 361 |
| Accumulated\timpairment\tlosses | — | — | — |
| Goodwill,\tnet\tof\timpairment\tlosses | 249 | 112 | 361 |
| Goodwill\tacquired | 15 | 7 | 22 |
| Balance\tas\tof\tDecember\t31,\t2014 |  |  |  |
| Aggregate\tgoodwill\tacquired | 264 | 119 | 383 |
| Accumulated\timpairment\tlosses | — | — | — |
| Goodwill,\tnet\tof\timpairment\tlosses | $264 | $119 | $383 |

On	December	31,	2013,	the	Company	completed	the	acquisition	of	a	communication	software	provider	in	push-to-talk-over-broadband	applications	for	a	gross purchase	price	of	$48	million.	As	a	result	of	the	acquisition,	the	Company	recognized	$22	million	of	goodwill	and	$20	million	of	identifiable	intangible	assets.

On	November	18,	2014,	the	Company	completed	the	acquisition	of	an	equipment	provider	for	a	gross	purchase	price	of	$22	million	with	$3	million	of	net	tangible assets.	The	Company	will	complete	the	purchase	price	allocation	for	this	acquisition	during	the	first	quarter	of	2015,	pending	completion.		As	of	December	31,	2014, $19	million	is	included	in	Other	assets	in	the	Company's	consolidated	balance	sheet.

The	Company	conducts	its	annual	assessment	of	goodwill	for	impairment	in	the	fourth	quarter	of	each	year.	The	goodwill	impairment	assessment	is	performed at	the	reporting	unit	level.	A	reporting	unit	is	an	operating	segment	or	one	level	below	an

operating	segment.	The	Company	has	determined	that	the	Products	segment	and	Services	segment	each	meet	the	definition	of	a	reporting	unit.

The	Company	performed	a	qualitative	assessment	to	determine	whether	it	was	more-likely-than-not	that	the	fair	value	of	each	reporting	unit	was	less	than	its carrying	amount	for	the	fiscal	years	2014,	2013,	and	2012.	In	performing	this	qualitative	assessment	the	Company	assessed	relevant	events	and	circumstances including	macroeconomic	conditions,	industry	and	market	conditions,	cost	factors,	overall	financial	performance,	changes	in	share	price,	and	entity-specific	events. For	fiscal	years	2014,	2013,	and	2012,	the	Company	concluded	it	was	more-likely-than-not	that	the	fair	value	of	each	reporting	unit	exceeded	its	carrying	value. Therefore,	the	two-step	goodwill	impairment	test	was	not	required	and	there	was	no	impairment	of	goodwill.

# 15.				Valuation	and	Qualifying	Accounts

The	following	table	presents	the	valuation	and	qualifying	account	activity	for	the	years	ended	December	31,	2014,	2013	and	2012:

|  | Balance	at<br>January	1 | Charged	to<br>Earnings | Used | Adjustments* | Balance	at<br>December	31 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 2014 |  |  |  |  |  |
| Allowance\tfor\tdoubtful\taccounts | $53 | $19 | $(35) | $(2) | $35 |
| Inventory\treserves | 125 | 24 | (15) | (3) | 131 |
| 2013 |  |  |  |  |  |
| Allowance\tfor\tdoubtful\taccounts | 50 | 13 | (8) | (2) | 53 |
| Inventory\treserves | 112 | 25 | (14) | 2 | 125 |
| 2012 |  |  |  |  |  |
| Allowance\tfor\tdoubtful\taccounts | 44 | 7 | (3) | 2 | 50 |
| Inventory\treserves | 126 | 17 | (31) | — | 112 |

# 16.				Quarterly	and	Other	Financial	Data	(unaudited)

|  |  | 2014 |  |  |  | 2013 | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 1st | 2nd | 3rd | 4th | 1st | 2nd | 3rd | 4th |
| Operating\tResults |  |  |  |  |  |  |  |  |
| Net\tsales | $1,228 | $1,393 | $1,436 | $1,824 | $1,396 | $1,497 | $1,517 | $1,817 |
| Costs\tof\tsales | 651 | 737 | 751 | 911 | 703 | 747 | 752 | 916 |
| Gross\tmargin | 577 | 656 | 685 | 913 | 693 | 750 | 765 | 901 |
| Selling,\tgeneral\tand\nadministrative\texpenses | 307 | 308 | 287 | 282 | 325 | 339 | 319 | 347 |
| Research\tand\tdevelopment\nexpenditures | 174 | 176 | 166 | 165 | 187 | 195 | 183 | 196 |
| Other\tcharges | (11) | 34 | 25 | 1,924 | 7 | 13 | 17 | 34 |
| Operating\tearnings\t(loss) | 107 | 138 | 207 | (1,458) | 174 | 203 | 246 | 324 |
| Earnings\t(loss)\tfrom\tcontinuing\noperations* | 85 | 78 | 66 | (926) | 157 | 223 | 261 | 292 |
| Net\tearnings* | 127 | 824 | 147 | 201 | 192 | 258 | 307 | 342 |
| Per\tShare\tData\t(in\tdollars) |  |  |  |  |  |  |  |  |
| Earnings\t(loss)\tfrom\tContinuing\noperations*: |  |  |  |  |  |  |  |  |
| Basic\tearnings\t(loss)\tper\ncommon\tshare | $0.33 | $0.31 | $0.27 | $(4.02) | $0.57 | $0.83 | $1.00 | $1.13 |
| Diluted\tearnings\t(loss)\tper\ncommon\tshare | 0.33 | 0.30 | 0.27 | (4.02) | 0.56 | 0.81 | 0.98 | 1.12 |
| Net\tearnings*: |  |  |  |  |  |  |  |  |
| Basic\tearnings\tper\tcommon\nshare | $0.50 | $3.25 | $0.60 | $0.87 | $0.70 | $0.96 | $1.17 | $1.33 |
| Diluted\tearnings\tper\tcommon\nshare | 0.49 | 3.22 | 0.59 | 0.87 | 0.68 | 0.94 | 1.16 | 1.31 |
| Dividends\tdeclared | $0.31 | $0.31 | $0.34 | $0.34 | $0.26 | $0.26 | $0.31 | $0.31 |
| Dividends\tpaid | 0.31 | 0.31 | 0.31 | 0.34 | 0.26 | 0.26 | 0.26 | 0.31 |
| Stock\tprices |  |  |  |  |  |  |  |  |
| High | $67.11 | $67.80 | $67.41 | $67.87 | $64.03 | $64.69 | $60.39 | $67.50 |
| Low | $62.72 | $62.50 | $58.89 | $58.50 | $55.94 | $55.50 | $54.01 | $59.38 |

*	Amounts	attributable	to	Motorola	Solutions,	Inc.	common	shareholders.

# Item	9.	Changes	in	and	Disagreements	with	Accountants	on	Accounting	and	Financial	Disclosure

# Item	9A.	Controls	and	Procedures

# 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	annual	report	(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.

# Management's	Report	on	Internal	Control	Over	Financial	Reporting.

Motorola	Solutions'	management	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting	as	such	term	is	defined	in Rule	13a-15(f)	of	the	Exchange	Act.	Under	the	supervision	and	with	the	participation	of	our	senior	management,	including	our	chief	executive	officer	and	chief financial	officer,	we	assessed	the	effectiveness	of	our	internal	control	over	financial	reporting	as	of	December	31,	2014,	using	the	criteria	set	forth	in	the	Internal Control—Integrated	Framework	(2013)	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO).	Based	on	this	assessment, management	has	concluded	that	our	internal	control	over	financial	reporting	is	effective	as	of	December	31,	2014.	The	Company's	independent	registered	public accounting	firm,	KPMG	LLP,	has	issued	a	report	on	the	Company's	internal	control	over	financial	reporting.	The	report	on	the	audit	of	internal	control	over	financial reporting	appears	in	this	Form	10-K.

# 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	December	31,	2014,	that	have	materially affected	or	are	reasonably	likely	to	materially	affect	our	internal	control	over	financial	reporting.

We	previously	were	in	the	process	of	a	multi-year	phased	upgrade	and	consolidation	of	our	enterprise	resource	planning	("ERP")	systems	into	a	single	global platform	across	our	businesses.	With	the	sale	of	the	Enterprise	business	which	included	the	transfer	of	our	existing	ERP	system	to	Zebra,	we	have	entered	into transition	service	agreements	which	require	us	to	operate	in	a	shared	information	technology	environment	with	Zebra	for	a	period	of	up	to	two	years.	We	are	currently in	the	planning	phases	of	determining	our	future	ERP	needs,	which	may	include	the	redesign	of	current	processes	and	controls.

# Item	9B.	Other	Information

We	have	audited	Motorola	Solutions,	Inc.'s	internal	control	over	financial	reporting	as	of	December	31,	2014,	based	on	criteria	established	in	Internal	Control	- Integrated	Framework	(2013)	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO).	Motorola	Solutions,	Inc.'s	management	is responsible	for	maintaining	effective	internal	control	over	financial	reporting	and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting, included	in	the	accompanying	Management's	Report	on	Internal	Control	Over	Financial	Reporting	in	Item	9A:	Controls	and	Procedures.	Our	responsibility	is	to express	an	opinion	on	the	Company's	internal	control	over	financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we plan	and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects. Our	audit	included	obtaining	an	understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	and	testing	and evaluating	the	design	and	operating	effectiveness	of	internal	control	based	on	the	assessed	risk.	Our	audit	also	included	performing	such	other	procedures	as	we considered	necessary	in	the	circumstances.	We	believe	that	our	audit	provides	a	reasonable	basis	for	our	opinion.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over	financial reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions and	dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in	accordance	with authorizations	of	management	and	directors	of	the	company;	and	(3)	provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized acquisition,	use,	or	disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with the	policies	or	procedures	may	deteriorate.

In	our	opinion,	Motorola	Solutions,	Inc.	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	December	31,	2014,	based	on criteria	established	in	Internal	Control	-	Integrated	Framework	(2013)	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	balance	sheets	of Motorola	Solutions,	Inc.	and	Subsidiaries	as	of	December	31,	2014	and	2013,	and	the	related	consolidated	statements	of	operations,	comprehensive	income, stockholders'	equity,	and	cash	flows	for	each	of	the	years	in	the	three-year	period	ended	December	31,	2014,	and	our	report	dated	February	13,	2015	expressed	an unqualified	opinion	on	those	consolidated	financial	statements.

# PART	III

# Item	10.	Directors,	Executive	Officers	and	Corporate	Governance

The	response	to	this	Item	required	by	Item	401	of	Regulation	S-K,	with	respect	to	directors,	incorporates	by	reference	the	information	under	the	caption	"2015 Director	Nominees"	of	Motorola	Solutions'	Proxy	Statement	for	the	2015	Annual	Meeting	of	Stockholders	(the	"Proxy	Statement")	and,	with	respect	to	executive officers,	is	contained	in	Part	I	hereof	under	the	caption	"Executive	Officers	of	the	Registrant"	and,	with	respect	to	the	audit	committee,	incorporates	by	reference	the information	under	the	caption	"Corporate	Governance	-	Committees	of	the	Board"	and	"Audit	Committee	Matters	-	Report	of	Audit	Committee"	of	the	Proxy	Statement.

The	response	to	this	Item	required	by	Item	405	of	Regulation	S-K	incorporates	by	reference	the	information	under	the	caption	"Security	Ownership	Information- Section	16	(a)	Beneficial	Ownership	Reporting	Compliance"	of	the	Proxy	Statement.

The	response	to	this	Item	also	incorporates	by	reference	the	information	under	the	caption	"Important	Dates	for	the	2016	Annual	Meeting	-	Recommending	a Director	Candidate	to	the	Governance	and	Nominating	Committee"	of	the	Proxy	Statement.

Motorola	Solutions	has	adopted	a	code	of	ethics,	the	Motorola	Solutions	Code	of	Business	Conduct	(the	"Code"),	that	applies	to	all	employees,	including	the Company's	principal	executive	officer,	principal	financial	officer	and	controller	(principal	accounting	officer).	The	Code	is	posted	on	Motorola	Solutions'	Internet website,	www.motorolasolutions.com/investors,	and	is	available	free	of	charge,	upon	request	to	Investor	Relations,	Motorola	Solutions,	Inc.,	Corporate	Offices,	1303 East	Algonquin	Road,	Schaumburg,	Illinois	60196,	E-mail:	investors@motorolasolutions.com.	Any	amendment	to,	or	waiver	from,	the	Code	applicable	to	executive officers	will	be	posted	on	our	Internet	website	within	four	business	days	following	the	date	of	the	amendment	or	waiver.	Motorola	Solutions'	Code	of	Business Conduct	applies	to	all	of	the	Company's	employees	worldwide,	without	exception,	and	describes	employee	responsibilities	to	the	various	stakeholders	involved	in	our business.	The	Code	goes	beyond	the	legal	minimums	by	implementing	the	values	we	share	as	employees	of	Motorola	Solutions—our	key	beliefs—uncompromising integrity	and	constant	respect	for	people.	The	Code	places	special	responsibility	on	managers	and	prohibits	retaliation	for	reporting	issues.

# Item	11.	Executive	Compensation

The	response	to	this	Item	incorporates	by	reference	the	information	under	the	captions	"Director	Compensation	-	Determining	Director	Compensation	-	How	the Directors	are	Compensated,"	"Compensation	Discussion	and	Analysis,"	"Compensation	and	Leadership	Committee	Report,"	"Compensation	and	Leadership Committee	Interlocks	and	Insider	Participation,"	and	under	"Named	Executive	Officer	Compensation,"	the	following	subsections:	"2014	Summary	Compensation Table,"	"Grants	of	Plan-Based	Awards	in	2014,"	"Outstanding	Equity	Awards	at	2014	Fiscal	Year-End,"	"Option	Exercises	and	Stock	Vested	in	2014,"	"Nonqualified Deferred	Compensation	in	2014,"	"Retirement	Plans,"	"Pension	Benefits	in	2014,"	"Employment	Contracts,"	and	"Termination	of	Employment	and	Change	in	Control Arrangements,"	of	the	Proxy	Statement.

# Item	12.	Security	Ownership	of	Certain	Beneficial	Owners	and	Management	and	Related	Stockholder	Matters

The	response	to	this	Item	incorporates	by	reference	the	information	under	the	captions	"Equity	Compensation	Plan	Information"	and	"Security	Ownership Information"	of	the	Proxy	Statement.

# Item	13.	Certain	Relationships	and	Related	Transactions,	and	Director	Independence

The	response	to	this	Item	incorporates	by	reference	the	relevant	information	under	the	caption	"Corporate	Governance	-	Related	Person	Transaction	Policy	and Procedures"	and	"Independent	Directors"	of	the	Proxy	Statement.

# Item	14.	Principal	Accounting	Fees	and	Services

The	response	to	this	Item	incorporates	by	reference	the	information	under	the	caption	"Audit	Committee	Matters	-	Independent	Registered	Public	Accounting Firm	Fees"	and	"Audit	Committee	Matters	-	Audit	Committee	Pre-Approval	Policies"	of	the	Proxy	Statement.

# PART	IV

# Item	15.	Exhibits,	Financial	Statement	Schedules

See	Part	II,	Item	8	hereof.

# 2. Financial	Statement	Schedules	and	Independent	Auditors'	Report

All	schedules	omitted	are	inapplicable	or	the	information	required	is	shown	in	the	consolidated	financial	statements	or	notes	thereto.

# 3. Exhibits

Exhibits	required	to	be	attached	by	Item	601	of	Regulation	S-K	are	listed	in	the	Exhibit	Index	attached	hereto,	which	is	incorporated	herein	by	this reference.	Exhibit	numbers	10.7	through	10.71,	listed	in	the	attached	Exhibit	Index,	are	management	contracts	or	compensatory	plans	or	arrangements required	to	be	filed	as	exhibits	to	this	form	by	Item	15(b)	hereof.

# (b) Exhibits:

# CONSENT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

# The	Board	of	Directors

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	Motorola	Solutions,	Inc.	has	duly	caused	this	report	to be	signed	on	its	behalf	by	the	undersigned,	thereunto	duly	authorized.

/S/		GREGORY	Q.	BROWN

Gregory	Q.	Brown

Chairman	and	Chief	Executive	Officer

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of Motorola	Solutions,	Inc.	and	in	the	capacities	and	on	the	dates	indicated.

# EXHIBIT	INDEX

2.1 Master	Acquisition	Agreement,	dated	April	14,	2014,	by	and	between	Motorola	Solutions,	Inc.	and	Zebra	Technologies,	Inc.	(incorporated	by	reference to	Exhibit	2.1	to	Motorola	Solutions'	Current	Report	on	Form	8-K	filed	on	April	16,	2014	(File	No.	1-7221)).

3.1	(a) Restated	Certificate	of	Incorporation	of	Motorola,	Inc.,	as	amended	through	May	5,	2009	(incorporated	by	reference	to	Exhibit	3(i)(b)	to	Motorola,	Inc.'s Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	July	4,	2009	(File	No.	1-7221)).

3.1	(b) Certificate	of	Amendment	to	the	Restated	Certificate	of	Incorporation	of	Motorola,	Inc.,	effective	January	4,	2011,	as	filed	with	the	Secretary	of	State	of the	State	of	Delaware	(incorporated	by	reference	to	Exhibit	3.1	to	Motorola	Solutions'	Current	Report	on	Form	8-K	filed	on	January	10,	2011	(File No.	1-7221)).

3.1	(c) Certificate	of	Ownership	and	Merger	merging	Motorola	Name	Change	Corporation	into	Motorola,	Inc.,	effective	January	4,	2011,	as	filed	with	the Secretary	of	State	of	the	State	of	Delaware	(incorporated	by	reference	to	Exhibit	3.2	to	Motorola	Solutions'	Current	Report	on	Form	8-K	filed	on January	10,	2011	(File	No.	1-7221)).

3.2 Amended	and	Restated	Bylaws	of	Motorola	Solutions,	Inc.	as	of	November	13,	2014	(incorporated	by	reference	to	Exhibit	3.1	to	Motorola	Solutions' Current	Report	on	Form	8-K	filed	on	November	14,	2014	(File	No.	1-7221)).

4.1	(a) Senior	Indenture,	dated	as	of	May	1,	1995,	between	The	Bank	of	New	York	Mellon	Trust	Company,	N.A.	(as	successor	Trustee	to	JPMorgan	Chase Bank	(as	successor	in	interest	to	Bank	One	Trust	Company)	and	BNY	Midwest	Trust	Company	(as	successor	in	interest	to	Harris	Trust	and	Savings Bank)	and	Motorola,	Inc.	(incorporated	by	reference	to	Exhibit	4(d)	of	the	Registrant's	Registration	Statement	on	Form	S-3	dated	September	25,	1995 (Registration	No.	33-62911)).

4.1	(b) Instrument	of	Resignation,	Appointment	and	Acceptance,	dated	as	of	January	22,	2001,	among	Motorola,	Inc.,	Bank	One	Trust	Company,	N.A.	and BNY	Midwest	Trust	Company	(as	successor	in	interest	to	Harris	Trust	and	Savings	Bank)	(incorporated	by	reference	to	Exhibit	4.2(b)	to	Motorola, Inc.'s	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31,	2000	(File	No.	1-7221)).

4.1	(c) Indenture	dated	as	of	August	19,	2014	between	Motorola	Solutions,	Inc.	and	The	Bank	of	New	York	Mellon	Trust	Company,	N.A.,	as	trustee. (incorporated	by	reference	to	Exhibit	4.1	to	Motorola	Solutions'	Current	Report	on	Form	8-K	filed	on	August	19,	2014	(File	No.	1-7221)).

Certain	instruments	defining	the	rights	of	holders	of	long-term	debt	of	Motorola,	Inc.	and	of	all	its	subsidiaries	for	which	consolidated	or	unconsolidated financial	statements	are	required	to	be	filed	are	being	omitted	pursuant	to	paragraph	(b)(4)(iii)(A)	of	Item	601	of	Regulation	S-K.	Motorola	Solutions agrees	to	furnish	a	copy	of	any	such	instrument	to	the	Commission	upon	request.

10.1 Amended	and	Restated	Master	Separation	and	Distribution	Agreement	among	Motorola	Mobility	Holdings,	Inc.	(f/k/a	Motorola	SpinCo	Holdings Corporation),	Motorola	Mobility,	Inc.	and	Motorola,	Inc.	effective	as	of	July	31,	2010	(incorporated	by	reference	to	Exhibit	2.1	to	Amendment	No.	1	to the	Form	10	Registration	Statement	filed	on	August	31,	2010	by	Motorola	Mobility	Holdings,	Inc.	(formerly	Motorola	SpinCo	Holdings	Corporation) (File	No.	1-34805)).

10.2 Amended	and	Restated	Intellectual	Property	License	Agreement	between	Motorola	Mobility,	Inc.	and	Motorola,	Inc.	effective	as	of	July	31,	2010 (incorporated	by	reference	to	Exhibit	10.2	to	Amendment	No.	1	to	the	Form	10	Registration	Statement	filed	on	August	31,	2010	by	Motorola	Mobility Holdings,	Inc.	(formerly	Motorola	SpinCo	Holdings	Corporation	(File	No.	1-34805)).

10.5 Amended	and	Restated	Employee	Matters	Agreement	among	Motorola	Mobility	Holdings,	Inc.	(f/k/a	Motorola	SpinCo	Holdings	Corporation),	Motorola Mobility,	Inc.	and	Motorola,	Inc.	effective	as	of	July	31,	2010	(incorporated	by	reference	to	Exhibit	10.7	to	Amendment	No.	2	to	the	Form	10 Registration	Statement	filed	on	October	8,	2010	by	Motorola	Mobility	Holdings,	Inc.	(formerly	Motorola	SpinCo	Holdings	Corporation	(File	No.	1- 34805)).

10.6 Stock	Purchase	Agreement,	dated	as	of	November	4,	2014,	by	and	among	Motorola	Solutions,	Inc.	and	ValueAct	(incorporated	by	reference	to	Exhibit 10.1	to	Motorola	Solutions'	Current	Report	on	Form	8-K	filed	on	November	5,	2014	(File	No.	1-7221)).

10.7 Motorola	Solutions	Omnibus	Incentive	Plan	of	2006,	as	amended	and	restated	November	8,	2011	(incorporated	by	reference	to	Exhibit	10.10	to Motorola	Solutions'	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31,	2011	(File	No.	1-7221)).

10.8 Form	of	Motorola	Solutions,	Inc.	Award	Document-Terms	and	Conditions	Related	to	Employee	Nonqualified	Stock	Options	for	grants	to	Section	16 Officers	on	or	after	May	6,	2013	(incorporated	by	reference	to	Exhibit	10.2	to	Motorola	Inc's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter ended	June	30,	2013	(File	No.	1-7221)).

10.9 Form	of	Motorola	Solutions	Inc.	Award	Document-Terms	and	Conditions	Related	to	Employee	Nonqualified	Stock	Options	relating	to	the	Motorola Solutions	Omnibus	Incentive	Plan	of	2006	for	grants	on	or	after	February	3,	2014.

10.10 Form	of	Motorola	Solutions	Inc.	Award	Document-Terms	and	Conditions	Related	to	Employee	Nonqualified	Stock	Options	relating	to	the	Motorola Solutions	Omnibus	Incentive	Plan	of	2006	for	grants	on	or	after	January	4,	2011	(incorporated	by	reference	to	Exhibit	10.11	to	Motorola	Solutions' Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31,	2010	(File	No.	1-7221)).

10.11 Form	of	Motorola,	Inc.	Award	Document-Terms	and	Conditions	Related	to	Employee	Nonqualified	Stock	Options	relating	to	the	Motorola	Solutions Omnibus	Incentive	Plan	of	2006	for	grants	from	August	1,	2009	to	January	3,	2011	(incorporated	by	reference	to	Exhibit	10.1	to	Motorola	Inc.'s Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	July	4,	2009	(File	No.	1-7221)).

10.12 Form	of	Motorola,	Inc.	Award	Document-Terms	and	Conditions	Related	to	Employee	Nonqualified	Stock	Options	relating	to	the	Motorola	Solutions Omnibus	Incentive	Plan	of	2006	for	grants	from	May	6,	2008	to	August	1,	2009	(incorporated	by	reference	to	Exhibit	10.54	to	Motorola	Inc.'s	Quarterly Report	on	Form	10-Q	for	the	fiscal	quarter	ended	March	29,	2008	(File	No.	1-7221)).

10.22 Motorola	Solutions,	Inc.	Amended	Award	Document-Terms	and	Conditions	Related	to	Employee	Nonqualified	Stock	Options	and	Addendum	A Motorola	Solutions,	Inc.	Award	Document-Terms	and	Conditions	Related	to	Employee	Stock	Appreciation	Rights,	relating	to	the	Motorola	Solutions Omnibus	Incentive	Plan	of	2006	for	a	grant	on	February	22,	2011	to	Gregory	Q.	Brown.	(incorporated	by	reference	to	Motorola	Solutions'	Quarterly Report	on	Form	10-Q	for	the	fiscal	quarter	ended	April	2,	2011	(File	No.	1-7221)).

10.23 Form	of	Motorola	Solutions	Award	Document-Terms	and	Conditions	Related	to	Employee	Nonqualified	Stock	Options	for	Gregory	Q.	Brown,	relating to	the	Motorola	Solutions	Omnibus	Incentive	Plan	of	2006	for	grant	on	February	1,	2011	pursuant	to	the	terms	of	the	Employment	Agreement	dated August	27,	2008,	as	amended,	by	and	between	Motorola,	Inc.	and	Gregory	Q.	Brown	(incorporated	by	reference	to	Exhibit	10.24	to	Motorola Solutions'	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31,	2010	(File	No.	1-7221)).

10.24 Form	of	Motorola	Solutions	Award	Document-Terms	and	Conditions	Related	to	Employee	Nonqualified	Stock	Options	for	Gregory	Q.	Brown,	relating to	the	Motorola	Solutions	Omnibus	Incentive	Plan	of	2006	for	grants	on	or	after	January	4,	2011	(incorporated	by	reference	to	Exhibit	10.25	to Motorola	Solutions'	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31,	2010	(	File	No.	1-7221)).

10.26 Form	of	Motorola	Solutions	Stock	Option	Consideration	Agreement	for	Gregory	Q.	Brown	for	grants	on	or	after	January	4,	2011	under	the	Motorola Solutions	Omnibus	Incentive	Plan	of	2006	(incorporated	by	reference	to	Exhibit	10.27	to	Motorola	Solutions'	Annual	Report	on	Form	10-K	for	the	fiscal year	ended	December	31,	2010)(File	No.	1-7221)).

10.27 Form	of	Motorola,	Inc.	Stock	Option	Consideration	Agreement	for	Gregory	Q.	Brown	for	grants	from	May	7,	2009	to	January	3,	2011	under	the Motorola	Solutions	Omnibus	Incentive	Plan	of	2006	(incorporated	by	reference	to	Exhibit	10.14	to	Motorola,	Inc.'s	Quarterly	Report	on	Form	10-Q	for the	fiscal	quarter	ended	April	4,	2009	(File	No.	1-7221)).

10.31 Form	of	Motorola	Solutions	Deferred	Stock	Units	Agreement	between	Motorola	Solutions,	Inc.	and	its	non-employee	directors,	relating	to	the	deferred stock	units	issued	in	lieu	of	cash	compensation	to	directors	under	the	Motorola	Solutions	Omnibus	Incentive	Plan	of	2006,	for	acquisitions	on	or	after January	1,	2012	(incorporated	by	reference	to	Exhibit	10.37	to	Motorola	Solutions'	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December 31,	2011	(File	No.	1-7221)).

10.32 Form	of	Motorola	Solutions	Deferred	Stock	Units	Agreement	between	Motorola	Solutions,	Inc.	and	its	non-employee	directors,	relating	to	the	deferred stock	units	issued	in	lieu	of	cash	compensation	to	directors	under	the	Motorola	Solutions	Omnibus	Incentive	Plan	of	2006,	for	acquisitions	on	or	after January	4,	2011	(incorporated	by	reference	to	Exhibit	10.37	to	Motorola	Solutions'	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December 31,	2010	(File	No.	1-7221)).

10.33 Form	of	Deferred	Stock	Units	Agreement	between	Motorola,	Inc.	and	its	non-employee	directors,	relating	to	the	deferred	stock	units	issued	in	lieu	of cash	compensation	to	directors	under	the	Motorola	Omnibus	Incentive	Plan	of	2006	or	any	successor	plan,	for	acquisitions	from	February	11,	2007	to January	3,	2011	(incorporated	by	reference	to	Exhibit	10.8	to	Motorola,	Inc.'s	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31, 2006	(File	No.	1-7221)).

10.43 Form	of	Motorola,	Inc.	Award	Document-Terms	and	Conditions	Related	to	Employee	Nonqualified	Stock	Options,	relating	to	the	Motorola	Omnibus Incentive	Plan	of	2003,	the	Motorola	Omnibus	Incentive	Plan	of	2002,	the	Motorola	Omnibus	Incentive	Plan	of	2000,	the	Motorola	Amended	and Restated	Incentive	Plan	of	1998	and	the	Motorola	Compensation/Acquisition	Plan	of	2000	for	grants	on	or	after	May	2,	2005	(incorporated	by reference	to	Exhibit	10.46	to	Motorola,	Inc.'s	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	April	2,	2005	(File	No.	1-7221)).

10.44 Form	of	Deferred	Stock	Units	Agreement	between	Motorola,	Inc.	and	its	non-employee	directors,	relating	to	the	deferred	stock	units	issued	in	lieu	of cash	compensation	to	directors	under	the	Motorola	Omnibus	Incentive	Plan	of	2003	or	any	successor	plan,	for	acquisitions	from	January	1,	2006	to February	11,	2007	(incorporated	by	reference	to	Exhibit	No.	10.25	to	Motorola,	Inc.'s	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended December	31,	2005	(File	No.	1-7221)).

10.65 Definitive	Purchase	Agreement	by	and	among	Motorola	Solutions,	Inc.,	The	Prudential	Insurance	Company	of	America,	Prudential	Financial,	Inc.,	and State	Street	Bank	and	Trust	Company,	as	Independent	Fiduciary	of	the	Motorola	Solutions	Pension	Plan,	dated	as	of	September	22,	2014 (incorporated	by	reference	to	Exhibit	10.1	to	Motorola	Solutions'	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	September	27,	2014	(File No.	1-7221))**

*12 Statement	regarding	Computation	of	Ratio	of	Earnings	to	Fixed	Charges.

*21 Subsidiaries	of	Motorola	Solutions,	Inc.

23 Consent	of	Independent	Registered	Public	Accounting	Firm,	see	page	xx	of	the	Annual	Report	on	Form	10-K	of	which	this	Exhibit	Index	is	a	part.

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

* Filed

herewith

** Confidential	treatment	has	been	requested	for	portions	of	this agreement



Question: what is the percent change in expected volatility between 2012 and 2013?
Answer: -8.7%