Motorola Solutions 10-Q 2024-03-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

For the quarterly period ended March 30, 2024

or

For the transition period from to

Commission file number: 1-7221

MOTOROLA SOLUTIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

500 W. Monroe Street, Chicago, Illinois 60661(Address of Principal Executive Offices, Zip Code)

(847) 576-5000

(Registrant’s Telephone Number, Including Area Code)

Not applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares of the registrant's Common Stock, $0.01 par value per share, outstanding as of April 26, 2024 was 166,787,080.

PART I—FINANCIAL INFORMATION

Condensed Consolidated Statements of Operations (Unaudited)

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Condensed Consolidated Balance Sheets (Unaudited)

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

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This commentary should be read in conjunction with the condensed consolidated financial statements and related notes thereto of Motorola Solutions, Inc. (“Motorola Solutions,” the “Company,” “we,” “our,” or “us”) for the three months ended March 30, 2024 and April 1, 2023, as well as our consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2023 (the "Form 10-K").

Forward-Looking Statements

Statements in this Quarterly Report on Form 10-Q for the quarter ended March 30, 2024 (this “Form 10-Q”) which are not historical in nature are forward-looking statements within the meaning of applicable federal securities law. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as “believes,” “expects,” “intends,” “aims,” “estimates” and similar expressions. We can give no assurance that any future results or events discussed in these statements will be achieved. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Readers are cautioned that such forward-looking statements are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from the statements contained in this Form 10-Q. Some of these risks and uncertainties include, but are not limited to, those discussed in Part I, Item 1A “Risk Factors” of the Form 10-K, and those described elsewhere in our other SEC filings. Forward-looking statements include, but are not limited to, statements included in: (1) “Management's Discussion and Analysis of Financial Condition and Results of Operations,” about: (a) the impact of the United Kingdom's Competition and Markets Authority's legal order regarding Airwave (including our actions in response); (b) the impact of our proceedings in the UK High Court regarding the notice of contract extension from the UK Home Office relating to Airwave; (c) the impact of acquisitions on our business; (d) the return of capital to shareholders through dividends and/or repurchasing shares; (e) the impact and success of our business strategy and portfolio; (f) future payments, charges, and use of accruals associated with our reorganization of business programs and employee separation costs; (g) expected payments of exit costs related to our exit of the Emergency Services Network ("ESN") contract with the UK Home Office; (h) our ability and cost to repatriate funds; (i) the liquidity of our investments; (j) our ability and cost to access the capital markets; (k) our ability to borrow and the amount available under our credit facilities; (l) adequacy of internal resources to generate an adequate amount of cash to meet expected working capital, capital expenditure and cash requirements; (m) future cash flows generated from operations, and future uses of such cash; and (n) the impact of the adoption of accounting pronouncements on our financial results; (2) “Quantitative and Qualitative Disclosures about Market Risk,” about: (a) the impact of foreign currency risk; (b) the impact of interest rate risk; and (c) future hedging activity and expectations of the Company; and (3) “Legal Proceedings,” about the ultimate disposition of legal matters and timing. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except as legally required.

Executive Overview

Business Overview

The Company manages the business organizationally through two segments: “Products and Systems Integration” and “Software and Services." Within these segments the Company has three principal product lines in which the Company reports net sales: Land Mobile Radio Communications (“LMR” or “LMR Communications”), Video Security and Access Control ("Video") and Command Center.

• LMR Communications: Infrastructure, devices (two-way radio and broadband, including both for public safety and professional and commercial radio (PCR)) and software that enable communications, inclusive of installation and integration, backed by services, to assure availability, security and resiliency.

• Video: Cameras (fixed, body-worn, in-vehicle), access control, infrastructure, video management, software and artificial intelligence (AI)-powered analytics that help enable visibility “on scene” and bring attention to what’s important.

• Command Center: Command center solutions and software applications that unify voice, video, data and analytics from public safety agencies, enterprises and the community to create a broad informational view to help simplify workflows and improve the accuracy and speed of decisions.

First Quarter Financial Results

• Net sales were $2.4 billion in the first quarter of 2024 compared to $2.2 billion in the first quarter of 2023.

• Operating earnings were $519 million in the first quarter of 2024 compared to $399 million in the first quarter of 2023.

• Net loss attributable to Motorola Solutions, Inc. was $39 million, or $(0.23) per diluted common share, in the first quarter of 2024, compared to net earnings of $278 million, or $1.61 per diluted common share, in the first quarter of 2023.

• Operating cash flow increased $390 million to $382 million in the first quarter of 2024 compared to $8 million used in the first quarter of 2023.

• We repurchased $39 million of common stock and paid $163 million in dividends in the first quarter of 2024. Additionally, we extinguished the $1.0 billion of 1.75% senior convertible notes issued to Silver Lake Partners and scheduled to mature in September 2024 (the "Silver Lake Convertible Debt") for $1.59 billion in cash, inclusive of the conversion premium.

Recent Events

UK Home Office Update

In October 2021, the Competition and Markets Authority ("CMA") opened a market investigation into the Mobile Radio Network Services market. This investigation included Airwave, our private mobile radio communications network that we acquired in 2016. Airwave provides mission-critical voice and data communications to emergency services and other agencies in Great Britain.

In 2023, the CMA imposed a legal order on Airwave which implemented a prospective price control on Airwave (the "Charge Control"). After the Competition Appeal Tribunal ("CAT") dismissed our appeal of the CMA's final decision on December 22, 2023, we filed an application with the United Kingdom Court of Appeal on February 13, 2024, requesting that it hear our appeal of the CAT judgment; the Court of Appeal has not yet responded to this request. Since August 1, 2023, revenue under the Airwave contract has been recognized in accordance with the Charge Control, and will continue to be unless the United Kingdom Court of Appeal were to reverse the CAT's judgment and overturn the Charge Control.

On March 13, 2024, we received a notice of contract extension (the “Deferred National Shutdown Notice”) from the UK Home Office. The Deferred National Shutdown Notice extends the “national shutdown target date” of the Airwave service from December 31, 2026 to December 31, 2029, at the Charge Control rates.

Our backlog for Airwave services contracted with the UK Home Office through December 31, 2026 was previously reduced by $777 million to align with the Charge Control. In the first quarter of 2024, as a result of the UK Home Office's notice of a contract extension pursuant to their Deferred National Shutdown Notice, we have recorded additional backlog of $748 million to reflect the incremental three years of services. On April 11, 2024, we filed proceedings in the UK High Court challenging the decision of the UK Home Office to issue the Deferred National Shutdown Notice as being in breach of applicable UK procurement and public law. The backlog related to the incremental years of service contemplated in the Deferred National Shutdown Notice could change depending on the outcome of the proceedings.

Recent Acquisitions

Results of Operations

** Percentages may not add due to rounding*

Results of Operations—Three months ended March 30, 2024 compared to three months ended April 1, 2023

The results of operations for the first quarter of 2024 are not necessarily indicative of the operating results to be expected for the full year. Historically, we have experienced higher revenues in the fourth quarter as compared to the rest of the quarters of our fiscal year as a result of the purchasing patterns of our customers.

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

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

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

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

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

Net Sales

The Products and Systems Integration segment’s net sales represented 62% of our net sales in the first quarter of 2024 and 60% in the first quarter of 2023. The Software and Services segment’s net sales represented 38% of our net sales in the first quarter of 2024 and 40% in the first quarter of 2023.

Net sales increased $218 million, or 10%, in the first quarter of 2024 compared to the first quarter of 2023. The $187 million, or 14%, increase in net sales within the Products and Systems Integration segment was driven by an increase of 14% in the North America region and an increase of 16% in the International region. The $31 million, or 4%, increase in net sales within the Software and Services segment was driven by an increase of 13% in the North America region and partially offset by a decrease of 12% in the International region. Net sales includes:

• an increase in the Products and Systems Integration segment, inclusive of $10 million of revenue from acquisitions, driven by an increase in LMR and Video;

• an increase in the Software and Services segment, driven by an increase in Video and Command Center, partially offset by a decrease LMR services; and

• inclusive of $1 million from favorable currency rates.

Regional results include:

• a 13% increase in the North America region, inclusive of revenue from acquisitions, driven by an increase in LMR, Video and Command Center; and

• a 3% increase in the International region, inclusive of revenue from acquisitions, driven by an increase in Video and LMR, partially offset by the revenue reduction on Airwave services in accordance with the Charge Control.

Products and Systems Integration

The 14% increase in the Products and Systems Integration segment was driven by the following:

• $175 million, or 16% growth in LMR, driven by the North America and International regions; and

• $12 million, or 5% growth in Video, inclusive of revenue from acquisitions, driven by the International and North America regions.

Software and Services

The 4% increase in the Software and Services segment was driven by the following:

• $27 million, or 20% growth in Video, driven by the North America and International regions;

• $14 million, or 9% growth in Command Center, driven by the North America region, partially offset by the International region; partially offset by

• $10 million, or 2% decrease in LMR, driven by the International region and the revenue reduction on Airwave services in accordance with the Charge Control, partially offset by the North America region; and

• inclusive of $1 million from favorable currency rates.

Gross Margin

Gross margin was 49.9% of net sales in the first quarter of 2024 compared to 48.2% in the first quarter of 2023. The primary drivers of this increase in gross margin as a percentage of net sales were:

• higher gross margin as a percentage of net sales in the Products and Systems Integration segment, inclusive of acquisitions, primarily driven by higher sales and favorable mix; partially offset by

• lower gross margin as a percentage of net sales in the Software and Services segment, primarily driven by the revenue reduction on Airwave services in accordance with the Charge Control and partially offset by higher sales.

Selling, General and Administrative Expenses

SG&A expenses increased 8% in the first quarter of 2024 compared to the first quarter of 2023. The increase in SG&A expenses was primarily due to higher employee incentive costs and higher expenses associated with acquired businesses. SG&A expenses were 16.6% of net sales in the first quarter of 2024 compared to 17.0% of net sales in the first quarter of 2023.

Research and Development Expenditures

R&D expenditures increased 4% in the first quarter of 2024 compared to the first quarter of 2023 primarily due to higher employee incentive costs and higher expenses associated with acquired businesses. R&D expenditures were 9.1% of net sales in the first quarter of 2024 compared to 9.7% of net sales in the first quarter of 2023.

Other Charges

Other charges decreased by $11 million in the first quarter of 2024 compared to the first quarter of 2023. The change was driven primarily by the following:

• $39 million of intangible asset amortization expense in the first quarter of 2024 compared to $55 million of intangible asset amortization expense in the first quarter of 2023; partially offset by

• $6 million of legal settlement charges in the first quarter of 2024 that did not occur in the first quarter 2023.

Operating Earnings

Operating earnings increased $120 million, or 30%, in the first quarter of 2024 compared to the first quarter of 2023. The increase in Operating earnings was due to:

• $134 million increase in the Products and Systems Integration segment, primarily driven by higher sales and favorable change in year-over-year mix, partially offset by higher employee incentive costs and higher expenses associated with acquired businesses; partially offset by

• $14 million decrease in the Software and Services segment, primarily driven by lower revenue as a result of the revenue reduction on Airwave services in accordance with the Charge Control and higher employee incentive costs, partially offset by higher sales and a reduction in intangible amortization expenses.

Interest Expense, net

The $10 million decrease in Interest expense, net in the first quarter of 2024 compared to the first quarter of 2023 was primarily driven by higher interest income earned on cash.

Other, net

The $577 million decrease in Other, net in the first quarter of 2024 compared to the first quarter of 2023 was primarily driven by:

• $585 million loss from the extinguishment of Silver Lake Convertible Debt in the first quarter of 2024;

• $10 million loss on derivatives in the first quarter of 2024 compared to a $7 million gain on derivatives in the first quarter of 2023; and

• $2 million loss on fair value adjustments to equity investments in the first quarter of 2024 compared to a $3 million gain on fair value adjustments to equity investments in the first quarter of 2023; partially offset by

• $1 million of foreign currency gains in the first quarter of 2024 compared to $19 million of foreign currency losses in the first quarter of 2023;

• $32 million of net periodic pension and postretirement benefit in the first quarter of 2024 compared to $25 million of net periodic pension and postretirement benefit in the first quarter of 2023; and

• $3 million loss on investment impairments in the first quarter of 2024 compared to a $6 million loss on investment impairments in the first quarter of 2023.

Effective Tax Rate

Income tax expense decreased by $131 million in the first quarter of 2024 compared to the first quarter of 2023, resulting in an effective tax rate of 58%. Our effective tax rate for the three months ended March 30, 2024 of 58% was higher than the effective tax rate for the three months ended April 1, 2023 of 22%, primarily due to the non-tax deductible loss on the extinguishment of Silver Lake Convertible Debt in 2024, offset by the tax benefit recognized due to our ability to utilize additional foreign tax credit carryforwards and a higher federal derived intangible income deduction on our 2023 U.S. tax return as a result of our decision to implement a business initiative in 2024.

Reorganization of Business

During the first quarter of 2024, we recorded net reorganization of business charges of $10 million, including $7 million of charges recorded within Other charges and $3 million of charges recorded in Costs of sales in our Condensed Consolidated Statements of Operations. Included in the $10 million were charges of $12 million related to employee separation costs, partially offset by $2 million of reversals for employee separation accruals no longer needed.

During the first quarter of 2023, we recorded net reorganization of business charges of $13 million, including $7 million of charges in Other charges and $6 million of charges in Costs of sales in our Condensed Consolidated Statements of Operations. Included in the $13 million were charges of $15 million related to employee separation costs, partially offset by $2 million of reversals for accruals no longer needed.

The following table displays the net charges incurred by segment:

Cash payments for employee severance in connection with the reorganization of business plans were $9 million in the first quarter of 2024 and $10 million in the first quarter of 2023. The reorganization of business accrual at March 30, 2024 was $24 million related to employee separation costs that are expected to be paid within one year.

At January 1, 2024, we had an accrual of $5 million for exit costs related to our exit of the ESN contract with the UK Home Office. The $5 million of exit costs are recorded in Accrued liabilities in our Condensed Consolidated Balance Sheets at March 30, 2024, and are expected to be paid within one year.

Liquidity and Capital Resources

Cash and Cash Equivalents

At March 30, 2024, $1.2 billion of the $1.5 billion cash and cash equivalents balance was held in the U.S. and $317 million was held in other countries.

Operating Activities

The increase in cash flows provided by operating activities from the first quarter of 2023 to the first quarter of 2024 was driven primarily by higher earnings, net of cash adjustments, improved working capital and lower income taxes due to a one time payment in the first quarter of 2023 of $70 million which did not recur in 2024.

Investing Activities

The decrease in cash flows used for investing activities in the first quarter of 2024 compared to the first quarter of 2023 was primarily due to proceeds from the sale of our Richmond, British Columbia and Richardson, Texas video manufacturing operations and lower capital expenditures, offset by an increase in cash used for acquisitions and investments.

Financing Activities

The increase in cash flows used for financing activities in the first quarter of 2024 compared to the first quarter of 2023 was primarily driven by (see also further discussion in the "Debt," "Share Repurchase Program" and "Dividends" sections below in this Part I, Item 2 of this Form 10-Q):

• $1.59 billion increase in repayments of debt driven by the repurchase of the Silver Lake Convertible Debt in the first quarter of 2024;

• $31 million decrease in net proceeds from the issuance of common stock in connection with our employee stock option and employee stock purchase plans in the first quarter of 2024 compared to the first quarter of 2023; and

• $15 million increase in the payment of dividends in the first quarter of 2024 compared to the first quarter of 2023; partially offset by

• $1.3 billion increase in net proceeds in the first quarter of 2024 driven the issuance of our 5.0% senior notes due 2029 and 5.4% senior notes due 2034; and

• $101 million decrease in share repurchases in the first quarter of 2024 compared to the first quarter of 2023.

Sales of Receivables

The following table summarizes the proceeds received from sales of accounts receivable and long-term customer financing receivables for the three months ended March 30, 2024 and April 1, 2023:

Debt

We had outstanding debt of $6.3 billion at March 30, 2024, of which $313 million of our 4.0% senior notes due 2024 was current. We had outstanding debt of $6.0 billion at December 31, 2023, of which $1.3 billion was current.

On September 5, 2019, we entered into an agreement with Silver Lake Partners to issue the Silver Lake Convertible Debt, which became fully convertible on September 5, 2021. On February 14, 2024, we agreed with Silver Lake Partners to repurchase $1.0 billion aggregate principal amount of the Silver Lake Convertible Debt for aggregate consideration of $1.59 billion in cash, inclusive of the conversion premium. The cash consideration was paid during the first quarter of 2024. The repurchase of the Silver Lake Convertible Debt was accounted for as an extinguishment of debt, as the repurchase was negotiated under economically favorable terms outside of the original contractual conversion rate. A loss on the extinguishment of $585 million was recorded, representing the excess of amounts repurchased over the carrying value of debt of $593 million, offset by accrued interest of $8 million. The loss on the extinguishment of debt was recorded within Other Income (Expense) in the Condensed Consolidated Statements of Operations during the three months ended March 30, 2024.

On March 25, 2024, we issued $400 million of 5.0% senior notes due 2029 and $900 million of 5.4% senior notes due 2034. We recognized net proceeds of $1.3 billion after debt issuance costs and discounts. A portion of proceeds from the issuance was used to repurchase the $1.0 billion aggregate principal amount of the Silver Lake Convertible Debt.

We have a $2.25 billion syndicated, unsecured revolving credit facility scheduled to mature in March 2026 (the "2021 Motorola Solutions Credit Agreement"). The 2021 Motorola Solutions Credit Agreement includes a letter of credit sub-limit and fronting commitments of $450 million. Borrowings under the facility bear interest at the prime rate plus the applicable margin, or at a spread above the Secured Overnight Financing Rate ("SOFR"), at our option. An annual facility fee is payable on the undrawn amount of the credit line. The interest rate and facility fee are subject to adjustment if our credit rating changes. We must comply with certain customary covenants including a maximum leverage ratio, as defined in the 2021 Motorola Solutions Credit Agreement. We were in compliance with our financial covenants as of March 30, 2024.

We have an unsecured commercial paper program, backed by the 2021 Motorola Solutions Credit Agreement, under which we may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $2.2 billion outstanding at any one time. Proceeds from the issuances of the notes are expected to be used for general corporate purposes. As of March 30, 2024 we had no outstanding debt under the commercial paper program.

We have investment grade ratings on our senior unsecured long-term debt. During the first quarter of 2024, S&P Global Ratings and Fitch Ratings upgraded our credit rating to BBB from BBB-. We continue to believe that we will be able to maintain sufficient access to the capital markets in the next twelve months and the foreseeable future.

Share Repurchase Program

During the three months ended March 30, 2024, we repurchased approximately 0.1 million shares at an average price of $317.45 per share for an aggregate amount of $39 million, excluding transaction costs and excise tax. As of March 30, 2024, we had used approximately $15.6 billion of the share repurchase authority to repurchase shares, leaving $2.4 billion of authority available for future repurchases.

Dividends

During the first quarter of 2024 we paid $163 million in cash dividends to holders of our common stock. Subsequent to the quarter, we paid an additional $163 million in cash dividends to holders of our common stock.

Adequate Internal Funding Resources

We believe that we have adequate internal resources available to generate adequate amounts of cash to meet our expected working capital, capital expenditure and cash requirements for the next twelve months and the foreseeable future, as supported by the level of cash and cash equivalents in the U.S., the ability to repatriate funds from foreign jurisdictions, cash provided by operations, as well as liquidity provided by our commercial paper program backed by the 2021 Motorola Solutions Credit Agreement.

We do not anticipate a material decrease to net future cash flows generated from operations. We expect to use our available cash, investments, and debt facilities to support and invest in our business. This includes investing in our existing products and technologies, seeking new acquisition opportunities related to our strategic growth initiatives and returning cash to shareholders through common stock cash dividend payments (subject to the discretion of our Board of Directors) and share repurchases.

Long-Term Customer Financing Commitments

We had outstanding commitments to provide long-term financing to third parties totaling $67 million at March 30, 2024, compared to $103 million at December 31, 2023.

Recent Accounting Pronouncements

See “Recent Accounting Pronouncements” in Note 1, “Basis of Presentation” to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

There have been no material changes to our interest rate risk or foreign currency risk during the three months ended March 30, 2024. For a discussion of our exposure to interest rate risk and foreign currency risk, refer to our disclosures set forth in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of the Form 10-K.

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

(b) Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 30, 2024 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

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

Refer to the description of "Hytera Litigation" in Note 12, “Commitments and Contingencies,” to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for information regarding our legal proceedings.

There have been no material changes to the risk factors previously disclosed in the Form 10-K.

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

Issuer Purchases of Equity Securities

The following table provides information with respect to acquisitions by the Company of shares of its common stock during the quarter ended March 30, 2024.

**(1)**Average price paid per share of common stock repurchased excludes commissions paid to brokers and excise tax. As of January 1, 2023, the Company's share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act of 2022. The amount of excise tax incurred is included in the Company's Condensed Consolidated Statement of Stockholders' Equity for the quarter ended March 30, 2024.

**(2)**As originally announced on July 28, 2011, and subsequently amended, the Board of Directors has authorized the Company to repurchase an aggregate amount of up to $18.0 billion of its outstanding shares of common stock (the “share repurchase program”). The share repurchase program does not have an expiration date. As of March 30, 2024, the Company had used approximately $15.6 billion, including transaction costs, to repurchase shares, leaving $2.4 billion of authority available for future repurchases.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

During the three months ended March 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

May 2, 2024