Financial Analysis

"Commitments and Contingencies 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 it to procure inventory based upon criteria as defined by the Company or establish the parameters defining the Companys requirements. In addition, we have entered into software license agreements which are firm commitments and are not cancellable. As of December 31, 2025, the Company had entered into firm, non-cancelable, and unconditional commitments under such arrangements through 2033. The Company expects to make total payments of $771 million under these arrangements as follows: $250 million in 2026, $197 million in 2027, $127 million in 2028, $108 million in 2029, $46 million in 2030 and $43 million thereafter. Legal Matters Hytera Civil Litigation In 2017, the Company filed a complaint against Hytera Communications Corporation Limited of Shenzhen, China; Hytera America, Inc.; and Hytera Communications America (West), Inc. (collectively, ""Hytera""), in the U.S. District Court for Northern District of Illinois (the ""District Court""), alleging trade secret theft and copyright infringement, and seeking injunctive relief. In 2020, a jury decided in the Company's favor and awarded the Company $543.7 million, plus $51.1 million in pre-judgment interest and $2.6 million in costs, as well as $34.2 million in …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Debt and Credit Facilities Debt December 31 2025 2024 7.5% debentures due 2025 $ $ 252 6.5% debentures due 2025 70 364 day term loan 749 4.6% senior notes due 2028 698 696 Term loan due 2028 748 6.5% debentures due 2028 24 24 5.0% senior notes due 2029 397 396 4.6% senior notes due 2029 802 802 2.3% senior notes due 2030 896 895 4.85% senior notes due 2030 595 2.75% senior notes due 2031 847 846 5.2% senior notes due 2032 496 5.6% senior notes due 2032 597 596 5.4% senior notes due 2034 894 893 5.55% senior notes due 2035 892 6.625% senior notes due 2037 38 38 5.5% senior notes due 2044 397 397 5.22% debentures due 2097 93 93 9,163 5,998 Adjustments for unamortized gains on interest rate swap terminations (1) (1) Less: current portion (749) (322) Long-term debt $ 8,413 $ 5,675 During the year ended December 31, 2025, the Company repaid the $252 million aggregate principal amount of the 7.5% debentures due 2025 and $70 million aggregate principal amount of the 6.5% debentures due 2025. Furthermore, during the year ended December 31, 2025 the Company borrowed and repaid $179 million of short-term borrowings, including commercial paper which had a weighted-average interest rate of 4.29%. On June 16, 2025, the Company issued $600 million of 4.85% senior notes due 2030, $500 million of 5.2% senior notes due 2032 and $900 million of 5.55% senior notes due 2035. The Company recognized net proceeds of approximately $2.0 billion after debt issuance costs and discounts. The proceeds f …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table summarizes the disaggregation of our revenue by segment, geography, major product and service type and customer type for the years ended December 31, 2025, 2024 and 2023, consistent with the information reviewed by our chief operating decision maker, the chief executive officer, for evaluating the financial performance of reportable segments: Years Ended 2025 2024 2023 (in millions) Products and Systems Integration Software and Services Total Products and Systems Integration Software and Services Total Products and Systems Integration Software and Services Total Regions North America $ 5,318 $ 3,044 $ 8,362 $ 5,097 $ 2,723 $ 7,820 $ 4,507 $ 2,425 $ 6,932 International 1,935 1,385 3,320 1,786 1,211 2,997 1,735 1,311 3,046 $ 7,253 $ 4,429 $ 11,682 $ 6,883 $ 3,934 $ 10,817 $ 6,242 $ 3,736 $ 9,978 Major Products and Services Mission Critical Networks (MCN) $ 6,066 $ 2,581 $ 8,647 $ 5,739 $ 2,361 $ 8,100 $ 5,127 $ 2,399 $ 7,526 Video 1,187 933 2,120 1,144 776 1,920 1,115 611 1,726 Command Center 915 915 797 797 726 726 $ 7,253 $ 4,429 $ 11,682 $ 6,883 $ 3,934 $ 10,817 $ 6,242 $ 3,736 $ 9,978 Customer Type Direct $ 4,618 $ 4,037 $ 8,655 $ 4,238 $ 3,586 $ 7,824 $ 3,619 $ 3,396 $ 7,015 Indirect 2,635 392 3,027 2,645 348 2,993 2,623 340 2,963 $ 7,253 $ 4,429 $ 11,682 $ 6,883 $ 3,934 $ 10,817 $ 6,242 $ 3,736 $ 9,978 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

"Share-Based Compensation and Other Incentive Plans The Company grants options to acquire shares of common stock to certain employees. Each option granted 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 ten years and vest over two to three years. In conjunction with a change in control, stock options assumed or replaced with comparable stock options only become exercisable if the holder is also involuntarily terminated (for a reason other than cause) or resigns for good reason within 24 months of a change in control. Restricted stock grants consist of shares or the rights to shares of the Companys common stock which are awarded to certain employees. The grants are restricted in such that they are subject to vesting conditions; however, restricted stock holders have voting rights, and the rights to earn dividends on unvested shares. Restricted stock unit (RSU) grants consist of shares or the rights to shares of the Companys common stock which are awarded to certain 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. In conjunction with a change in control, shares of RSUs assumed or replaced with comparable shares of RSUs will only have the restrictions lapse if the holder is also involuntarily terminated (for a reason other tha …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"Fair Value Measurements Investments and Derivatives The fair values of the Companys financial assets and liabilities by level in the fair value hierarchy as of December 31, 2025 and December 31, 2024 were as follows: December 31, 2025 Level 1 Level 2 Level 3 Total Assets: Foreign exchange derivative contracts $ $ 10 $ $ 10 Common stock and equivalents 42 42 Liabilities: Foreign exchange derivative contracts $ $ 19 $ $ 19 Contingent earnout consideration (Note 15) 37 37 December 31, 2024 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ $ 10 $ 10 Common stock and equivalents 23 23 Liabilities: Foreign exchange derivative contracts $ $ 9 $ 9 Equity swap contracts 1 1 In connection with the acquisition of Silvus, contingent earnout consideration reflects the estimated fair value of the contingent future payments to the Seller following the achievement of certain financial targets. Refer to ""Note 15: Intangible Assets and Goodwill to our consolidated financial statements in this Part II. Item 8. Financial Statements and Supplementary Data"" of this Form 10-K for more information regarding the details of the contingent earnout consideration. The Company determines the fair value of its contingent earnout consideration liability using a Monte Carlo simulation model, which requires the use of Level 3 inputs, such as projected future net sales, gross margin and cash flows. At the acquisition date, the Company recorded a contingent liability of approximately $38 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Intangible Assets and Goodwill The Company accounts for acquisitions using purchase accounting with the results of operations for each acquiree included in the Companys consolidated financial statements for the period subsequent to the date of acquisition. Silvus Acquisition On August 6, 2025, the Company acquired Silvus from Silvus Technologies Group LLC (the ""Seller""). Silvus designs and develops software-defined high-speed MANET technology that enables highly secure data, video and voice communications without the need for fixed infrastructure. This acquisition brings mobile ad-hoc network expertise and new applications to the Company's public safety and enterprise portfolio. The purchase price of $4.4 billion consisted of cash payments of $4.4 billion, net of cash acquired and customary purchase price adjustments, and contingent earnout consideration that had an estimated fair value as of the acquisition date of $38 million. Under the terms of the transaction, the Seller will have the potential to earn contingent earnout consideration upon the achievement of certain financial targets of up to $600 million in total, comprised of up to $150 million for the annual period from July 5, 2026 through July 3, 2027 and up to $450 million for the annual period from July 4, 2027 through July 1, 2028 (with the potential to earn catch-up earnout consideration based on performance in the annual period from July 4, 2027 through July 1, 2028 if the maximum earnout for the annual perio …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"Income Taxes The Company adopted ASU 2023-09, ""Income Taxes (Topic 740): Improvements to Income Tax Disclosures"" under the retrospective transition method for the year ended December 31, 2025; as a result, amounts disclosed throughout this footnote have been revised for the years ended December 31, 2024 and December 31, 2023. Components of Income Tax Expense Components of earnings before income taxes are as follows: Years ended December 31 2025 2024 2023 United States $ 2,130 $ 1,741 $ 1,791 Foreign 682 231 355 $ 2,812 $ 1,972 $ 2,146 Components of income tax expenses are as follows: Years ended December 31 2025 2024 2023 Current income tax expense United States Federal $ 259 $ 410 $ 253 Foreign 183 62 141 States (U.S.) 116 133 70 Total current income tax expense $ 558 $ 605 $ 464 Deferred income tax expense (benefit) United States Federal $ 101 $ (207) $ (24) Foreign 7 23 (17) States (U.S.) (14) (31) 9 Total deferred income tax expense (benefit) $ 94 $ (215) $ (32) Total income tax expense $ 652 $ 390 $ 432 Differences between income tax expense computed at the U.S. federal statutory tax rate of 21% and income tax expense as reflected in the Consolidated Statements of Operations are as follows: Years ended December 31 2025 2024 2023 U.S. Federal Statutory Tax Rate $ 591 21.0 % $ 414 21.0 % $ 450 21.0 % State and Local Income Taxes, Net of Federal Income tax effect (1) 80 2.8 % 81 4.1 % 62 2.9 % Foreign Tax Effects Other foreign jurisdictions 40 1.4 % 24 1.2 % 40 1.9 % Eff …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases The Company leases certain office, factory and warehouse space, land and other equipment under various operating leases. Components of Lease Expense (in millions) December 31, 2025 December 31, 2024 December 31, 2023 Lease expense: Operating lease cost $ 146 $ 140 $ 140 Short-term lease cost 2 1 1 Variable cost 47 47 36 Sublease income (6) (5) (5) Net lease expense from operating leases $ 189 $ 183 $ 172 Operating Lease Assets and Liabilities (in millions) Statement Line Classification December 31, 2025 December 31, 2024 Right-of-use lease assets Operating lease assets $ 581 $ 529 Current lease liabilities Accrued liabilities 133 127 Operating lease liabilities Operating lease liabilities 471 427 Other Information Related to Leases (in millions) December 31, 2025 December 31, 2024 December 31, 2023 Supplemental cash flow information: Net cash used for operating activities related to operating leases $ 156 $ 152 $ 147 Right-of-use assets obtained in exchange for lease liabilities $ 143 $ 150 $ 98 During the year ended December 31, 2025, assets obtained in exchange for lease liabilities were primarily driven by new and renewed real estate leases. During the year ended December 31, 2024, the Company recorded $80 million of assets obtained in exchange for lease liabilities due to an assumption that it is reasonably certain that renewal options will be extended on its radio tower site leases operated within the Airwave radio network, consistent with the Home Office's notice …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recent Accounting Pronouncements: In September 2025, the Financial Accounting Standards Board (""FASB"") issued Accounting Standard Update (""ASU"") No. 2025-06, ""Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software"" to modernize the accounting for internal-use software costs. The ASU is effective for fiscal years beginning after December 15, 2027 and interim periods with annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is still evaluating the complete impact of the adoption of this ASU on its financial statements and disclosures. In July 2025, the FASB issued ASU No. 2025-05, ""Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets"" to introduce a practical expedient in the estimation of expected credit losses for current accounts receivable and current contract assets. The ASU is effective for fiscal years beginning after December 15, 2025 and interim periods with annual reporting periods beginning after December 15, 2025, with early adoption permitted. The Company is still evaluating the complete impact of the adoption of this ASU on its financial statements and disclosures. In November 2024, the Financial Accounting Standards Board (""FASB"") issued Accounting Standard Update (""ASU"") No. 2024-03, ""Disaggregation of Income Statement Expenses"" (DISE), to enhance d …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Retirement Benefits Pension and Postretirement Health Care Benefits Plans U.S. Pension Benefit Plans The Companys non-contributory U.S. defined benefit plans (the ""U.S. Pension Plans"") provide benefits to U.S. employees hired prior to January 1, 2005, who became eligible after one year of service. The Company also has an additional non-contributory supplemental retirement benefit plan, the Motorola Supplemental Pension Plan (""MSPP""), which provided supplemental benefits to individuals by replacing benefits that are lost by such individuals under the retirement formula due to application of the limitations imposed by the Internal Revenue Code. In December 2008, the Company amended the U.S. Pension Plans and MSPP (together 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. Postretirement Health Care Benefits Plan Certain health care benefits are available to eligible domestic employees hired prior to January 1, 2002 and meeting certain age and service requirements upon termination of employment or retirement eligibility (the Postretirement Health Care Benefits Plan). As of January 1, 2005, the Postretirement Health Care Benefits Plan was closed to new participants. After a series of amendments, all eligible retirees under the age of …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

"Reorganization of Businesses 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 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 contractual lease termination costs, costs to exit committed contracts 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 2025, 2024, and 2023 the Company continued to implement various productivity improvement plans aimed at achieving …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

"Revenue from Contracts with Customers Disaggregation of Revenue Following the acquisition of Silvus Technologies Holdings Inc. (Silvus) in August 2025, we renamed our ""Land Mobile Radio Communications"" technology to MCN. We combined our legacy Land Mobile Radio portfolio with the newly acquired Silvus and now report net sales under MCN. This name change does not require any financial information to be reclassified from previous periods. The following table summarizes the disaggregation of our revenue by segment, geography, major product and service type and customer type for the years ended December 31, 2025, 2024 and 2023, consistent with the information reviewed by our chief operating decision maker, the chief executive officer, for evaluating the financial performance of reportable segments: Years Ended 2025 2024 2023 (in millions) Products and Systems Integration Software and Services Total Products and Systems Integration Software and Services Total Products and Systems Integration Software and Services Total Regions North America $ 5,318 $ 3,044 $ 8,362 $ 5,097 $ 2,723 $ 7,820 $ 4,507 $ 2,425 $ 6,932 International 1,935 1,385 3,320 1,786 1,211 2,997 1,735 1,311 3,046 $ 7,253 $ 4,429 $ 11,682 $ 6,883 $ 3,934 $ 10,817 $ 6,242 $ 3,736 $ 9,978 Major Products and Services Mission Critical Networks (MCN) $ 6,066 $ 2,581 $ 8,647 $ 5,739 $ 2,361 $ 8,100 $ 5,127 $ 2,399 $ 7,526 Video 1,187 933 2,120 1,144 776 1,920 1,115 611 1,726 Command Center 915 915 797 797 726 726 $ 7,25 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Information by Segment and Geographic Region The Company conducts its business globally and manages it through the following two segments: Products and Systems Integration: The Products and Systems Integration segment offers an extensive portfolio of infrastructure, devices, accessories, and the implementation and integration of such systems, devices and applications. Within MCN, the Company is a global leader in the two-way radio category, including the Companys Project 25 (P25), Terrestrial Trunked Radio (TETRA), Digital Mobile Radio (DMR), as well as other professional and commercial radio (PCR) solutions. The Company provides LTE solutions for public safety, government, including defense, and enterprise users, including devices that operate in both low-band and mid-band frequencies. Additionally, through the Company's MANET and High Frequency (HF) and Very High Frequency (VHF) communications technologies, it supports defense, government and disaster relief agency customers that require dynamic, mobile and tactical point-to-point voice and data communications in remote or contested environments without the need for fixed infrastructure. The Company's Video technology includes network video management infrastructure, fixed security, certain mobile video equipment and access control solutions. The primary customers of the Products and Systems Integration segment are government, including defense, public safety and enterprise customers who operate private communications syste …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"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, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023, 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, and statements of stockholders' 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 goods and services including the delivery of products, systems and system integration as well as offering software and service solutions. The Company recognizes revenue to reflect the …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"Commitments and Contingencies Legal Matters Hytera Civil Litigation In 2017, the Company filed a complaint against Hytera Communications Corporation Limited of Shenzhen, China; Hytera America, Inc.; and Hytera Communications America (West), Inc. (collectively, ""Hytera""), in the U.S. District Court for the Northern District of Illinois (the ""District Court""), alleging trade secret theft and copyright infringement, and seeking injunctive relief. In 2020, a jury decided in the Company's favor and awarded the Company $543.7 million, plus $51.1 million in pre-judgment interest and $2.6 million in costs, as well as $34.2 million in attorneys' fees. Subsequently, the District Court ordered Hytera to pay the Company a forward-looking reasonable royalty on products (""I-Series"") that use the Companys stolen trade secrets, setting royalty rates for Hytera's sale of relevant products from July 1, 2019 forward. The District Court then ordered Hytera to make royalty payments into a third-party escrow, while it reviewed Hytera's motion to modify the royalty order, which the District Court eventually denied. Hytera refused to make all of its royalty payments. The Company filed a motion to hold Hytera in civil contempt for failing to make every royalty payment, which the District Court granted in 2023. As a result, on September 1, 2023, Hytera made a payment of $56 million into the third-party escrow, in addition to subsequent de minimis quarterly royalty payments between October 2022 …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Debt and Credit Facilities September 27, 2025 December 31, 2024 7.5% debentures due 2025 $ $ 252 6.5% debentures due 2025 70 364-day term loan 749 4.6% senior notes due 2028 697 696 Term loan due 2028 748 6.5% debentures due 2028 24 24 5.0% senior notes due 2029 397 396 4.6% senior notes due 2029 802 802 2.3% senior notes due 2030 896 895 4.85% senior notes due 2030 595 2.75% senior notes due 2031 846 846 5.2% senior notes due 2032 496 5.6% senior notes due 2032 597 596 5.4% senior notes due 2034 894 893 5.55% senior notes due 2035 892 6.625% senior notes due 2037 38 38 5.5% senior notes due 2044 397 397 5.22% debentures due 2097 93 93 Other short-term borrowings 179 9,340 5,998 Adjustments for unamortized gains on interest rate swap terminations (1) (1) Less: current portion (928) (322) Long-term debt $ 8,411 $ 5,675 On June 16, 2025, the Company issued $600 million of 4.85% senior notes due 2030, $500 million of 5.2% senior notes due 2032 and $900 million of 5.55% senior notes due 2035. The Company recognized net proceeds of approximately $2.0 billion after debt issuance costs and discounts. The proceeds from these notes were used to fund a portion of the acquisition of Silvus. On August 6, 2025 the Company borrowed $1.5 billion of senior delayed draw term loan facilities comprised of a $750 million 364-day facility and a $750 million three-year facility (""term loan due 2028"") to fund a portion of the acquisition of Silvus. The Company must comply with certain customary …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table summarizes the disaggregation of the Company's revenue by segment, region, major products and services and customer type for the three and nine months ended September 27, 2025 and September 28, 2024, consistent with the information reviewed by the Company's chief operating decision maker for evaluating the financial performance of the Company's reportable segments: Three Months Ended September 27, 2025 September 28, 2024 (In millions) Products and Systems Integration Software and Services Total Products and Systems Integration Software and Services Total Regions: North America $ 1,360 $ 761 $ 2,121 $ 1,304 $ 703 $ 2,007 International 537 351 888 480 303 783 $ 1,897 $ 1,112 $ 3,009 $ 1,784 $ 1,006 $ 2,790 Major Products and Services: Mission Critical Networks (MCN) $ 1,598 $ 643 $ 2,241 $ 1,492 $ 596 $ 2,088 Video 299 235 534 292 208 500 Command Center 234 234 202 202 $ 1,897 $ 1,112 $ 3,009 $ 1,784 $ 1,006 $ 2,790 Customer Types: Direct $ 1,187 $ 1,006 2,193 $ 1,108 $ 917 $ 2,025 Indirect 710 106 816 676 89 765 $ 1,897 $ 1,112 $ 3,009 $ 1,784 $ 1,006 $ 2,790 Nine Months Ended September 27, 2025 September 28, 2024 (In millions) Products and Systems Integration Software and Services Total Products and Systems Integration Software and Services Total Regions: North America $ 3,789 $ 2,211 $ 6,000 $ 3,631 $ 1,985 $ 5,616 International 1,306 996 2,302 1,302 888 2,190 $ 5,095 $ 3,207 $ 8,302 $ 4,933 $ 2,873 $ 7,806 Major Products and Services: Mission Critical Ne …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Share-Based Compensation Plans Compensation expense for the Companys share-based plans was as follows: Three Months Ended Nine Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Share-based compensation expense included in: Costs of sales $ 14 $ 12 $ 42 $ 36 Selling, general and administrative expenses 41 33 116 97 Research and development expenditures 18 16 55 47 Share-based compensation expense included in Operating earnings 73 61 213 180 Tax benefit (16) (13) (45) (37) Share-based compensation expense, net of tax $ 57 $ 48 $ 168 $ 143 Decrease in basic earnings per share $ (0.34) $ (0.29) $ (1.01) $ (0.86) Decrease in diluted earnings per share $ (0.34) $ (0.28) $ (0.99) $ (0.84) During the nine months ended September 27, 2025, the Company granted 0.6 million restricted stock units (RSUs), 0.1 million performance stock units (PSUs) and 0.04 million market stock units (MSUs) with an aggregate grant-date fair value of $271 million, $24 million and $17 million, respectively, and 0.1 million stock options and 0.1 million performance options (POs) with an aggregate grant-date fair value of $9 million and $17 million, respectively. The share-based compensation expense will generally be recognized over the vesting period of three years. …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements The fair values of the Companys financial assets and liabilities by level in the fair value hierarchy as of September 27, 2025 and December 31, 2024 were as follows: September 27, 2025 Level 1 Level 2 Level 3 Total Assets: Equity swap contracts 1 1 Common stock 45 45 Liabilities: Foreign exchange derivative contracts $ $ 23 $ $ 23 Contingent earnout consideration (Note 15) 38 38 December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Foreign exchange derivative contracts $ $ 10 $ $ 10 Common stock 23 23 Liabilities: Foreign exchange derivative contracts $ $ 9 $ $ 9 Equity swap contracts 1 1 The Company had no foreign exchange derivative contracts, equity swap contracts or common stock investments in Level 3 holdings as of September 27, 2025 or December 31, 2024. At September 27, 2025 and December 31, 2024, the Company had $568 million and $1.2 billion, respectively, of investments in money market government and U.S. treasury funds classified (Level 1) as Cash and cash equivalents in its Condensed Consolidated Balance Sheets. The money market funds had quoted market prices that are equivalent to par. Using quoted market prices and market interest rates, the fair value of the Company's long-term debt as of September 27, 2025 was $9.4 billion. The fair value of long-term debt as of December 31, 2024 was $5.8 billion. In connection with the acquisition of Silvus, contingent earnout consideration reflects the estimated fair value of the contingent future pa …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Intangible Assets and Goodwill Silvus Acquisition On August 6, 2025, the Company acquired Silvus from Silvus Technologies Group LLC (the ""Seller""). Silvus designs and develops software-defined high-speed MANET technology that enables highly secure data, video and voice communications without the need for fixed infrastructure. This acquisition brings mobile ad-hoc network expertise and new applications to the Company's public safety and enterprise portfolio. The purchase price of $4.4 billion consisted of cash payments of $4.4 billion, net of cash acquired and customary purchase price adjustments, and contingent earnout consideration that had an estimated fair value as of the acquisition date of $38 million. Under the terms of the transaction, the Seller will have the potential to earn the contingent earnout consideration upon the achievement of certain financial targets of up to $600 million in total comprised of up to $150 million for the annual period from July 5, 2026 through July 3, 2027 and up to $450 million for the annual period from July 4, 2027 through July 1, 2028 (with the potential to earn a catch-up earnout consideration based on performance in the annual period from July 4, 2027 through July 1, 2028 if the maximum earnout for the annual period from July 5, 2026 through July 3, 2027 is not earned). The contingent earnout consideration, if any, will be paid in shares of common stock. The Company valued the contingent earnout consideration using a Monte Carlo me …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"Income Taxes At the end of each interim reporting period, the Company makes an estimate of its annual effective income tax rate. Tax expense in interim periods is calculated at the estimated annual effective tax rate plus or minus the tax effects of items of income and expense that are discrete to the period. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods. The following table provides details of income taxes: Three Months Ended Nine Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Net earnings before income taxes $ 725 $ 695 $ 1,952 $ 1,184 Income tax expense 161 132 442 214 Effective tax rate 22 % 19 % 23 % 18 % The effective tax rate for the three months ended September 27, 2025 of 22% was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, partially offset by excess tax benefits of share-based compensation. The effective tax rate for the nine months ended September 27, 2025 of 23% was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, partially offset by excess tax benefits of share-based compensation. The effective tax rate for the three months ended September 28, 2024 of 19% was lower than the U.S. federal statutory tax rate of 21% primarily due to favorable U.S. return-to-provision adjustments, excess tax benefits of share-based compensation, and tax benefits recognized upon settlement o …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases Components of Lease Expense Three Months Ended Nine Months Ended (in millions) September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Lease expense: Operating lease cost $ 39 $ 34 $ 114 $ 103 Variable cost 9 12 37 34 Sublease income (1) (1) (5) (4) Net lease expense from operating leases $ 47 $ 45 $ 146 $ 133 Lease Assets and Liabilities (in millions) Statement Line Classification September 27, 2025 December 31, 2024 Right-of-use lease assets Operating lease assets $ 577 $ 529 Current lease liabilities Accrued liabilities 128 127 Operating lease liabilities Operating lease liabilities 469 427 Other Information Related to Leases Nine Months Ended (in millions) September 27, 2025 September 28, 2024 Supplemental cash flow information: Net cash used for operating activities related to operating leases $ 121 $ 118 Right-of-use assets obtained in exchange for lease liabilities 84 123 September 27, 2025 December 31, 2024 Weighted average remaining lease terms (years) 6 5 Weighted average discount rate: 4.17 % 3.97 % Future Lease Payments September 27, 2025 (in millions) Operating Leases Remainder of 2025 $ 26 2026 148 2027 146 2028 120 2029 90 Thereafter 143 Total lease payments 673 Less: interest 76 Present value of lease liabilities $ 597

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"Recent Accounting Pronouncements In September 2025, the Financial Accounting Standards Board (""FASB"") issued Accounting Standard Update (""ASU"") No. 2025-06, ""Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software"" to modernize the accounting for internal-use software costs. The ASU is effective for fiscal years beginning after December 15, 2027 and interim periods with annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is still evaluating the complete impact of the adoption of this ASU on its financial statements and disclosures. In July 2025, the FASB issued ASU No. 2025-05, ""Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets"" to introduce a practical expedient in the estimation of expected credit losses for current accounts receivable and current contract assets. The ASU is effective for fiscal years beginning after December 15, 2025 and interim periods with annual reporting periods beginning after December 15, 2025, with early adoption permitted. The Company is still evaluating the complete impact of the adoption of this ASU on its financial statements and disclosures. In November 2024, the FASB issued ASU No. 2024-03, ""Disaggregation of Income Statement Expenses"" (DISE), to enhance disclosures relating to key income statement expense topics. This was subseque …

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Retirement and Other Employee Benefits Pension and Postretirement Health Care Benefits Plans The net periodic benefits for Pension and Postretirement Health Care Benefits Plans were as follows: U.S. Pension Benefit Plans Non-U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Three Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Interest cost $ 50 $ 47 $ 15 $ 14 $ 1 $ 1 Expected return on plan assets (76) (75) (28) (26) (3) (3) Amortization of: Unrecognized net loss 7 6 2 2 1 1 Unrecognized prior service cost (benefit) (1) (1) 1 1 Net periodic pension benefits $ (19) $ (22) $ (12) $ (11) $ $ U.S. Pension Benefit Plans Non-U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Nine Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Interest cost 150 141 43 42 4 4 Expected return on plan assets (229) (223) (81) (78) (9) (9) Amortization of: Unrecognized net loss 19 17 5 5 4 3 Unrecognized prior service cost (benefit) (2) (2) 2 4 Net periodic pension cost (benefits) $ (60) $ (65) $ (35) $ (33) $ 1 $ 2 …

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Reorganization of Business 2025 Charges During the three months ended September 27, 2025, the Company recorded net reorganization of business charges of $14 million, including $12 million of charges in Other charges and $2 million of charges in Cost of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $14 million were charges of $13 million related to employee separation costs and $1 million related to exit costs. During the nine months ended September 27, 2025, the Company recorded net reorganization of business charges of $45 million, including $33 million of charges in Other charges and $12 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $45 million were charges of $46 million related to employee separation costs and $2 million related to exit costs, partially offset by $3 million of reversals for employee separation accruals no longer needed. The following table displays the net charges incurred by segment: September 27, 2025 Three Months Ended Nine Months Ended Products and Systems Integration $ 9 $ 31 Software and Services 5 14 $ 14 $ 45 Reorganization of Businesses Accruals January 1, 2025 Additional Charges Adjustments Amount Used September 27, 2025 Employee separation costs $ 27 $ 46 $ (3) $ (48) $ 22 Exit costs 1 2 (2) 1 $ 28 $ 48 $ (3) $ (50) $ 23 Exit Costs At January 1, 2025, the Company had an accrual of $1 million for exit costs, related to the Company's …

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Revenue from Contracts with Customers Disaggregation of Revenue The following table summarizes the disaggregation of the Company's revenue by segment, region, major products and services and customer type for the three and nine months ended September 27, 2025 and September 28, 2024, consistent with the information reviewed by the Company's chief operating decision maker for evaluating the financial performance of the Company's reportable segments: Three Months Ended September 27, 2025 September 28, 2024 (In millions) Products and Systems Integration Software and Services Total Products and Systems Integration Software and Services Total Regions: North America $ 1,360 $ 761 $ 2,121 $ 1,304 $ 703 $ 2,007 International 537 351 888 480 303 783 $ 1,897 $ 1,112 $ 3,009 $ 1,784 $ 1,006 $ 2,790 Major Products and Services: Mission Critical Networks (MCN) $ 1,598 $ 643 $ 2,241 $ 1,492 $ 596 $ 2,088 Video 299 235 534 292 208 500 Command Center 234 234 202 202 $ 1,897 $ 1,112 $ 3,009 $ 1,784 $ 1,006 $ 2,790 Customer Types: Direct $ 1,187 $ 1,006 2,193 $ 1,108 $ 917 $ 2,025 Indirect 710 106 816 676 89 765 $ 1,897 $ 1,112 $ 3,009 $ 1,784 $ 1,006 $ 2,790 Nine Months Ended September 27, 2025 September 28, 2024 (In millions) Products and Systems Integration Software and Services Total Products and Systems Integration Software and Services Total Regions: North America $ 3,789 $ 2,211 $ 6,000 $ 3,631 $ 1,985 $ 5,616 International 1,306 996 2,302 1,302 888 2,190 $ 5,095 $ 3,207 $ 8,302 $ 4,933 …

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Segment Information Significant Segment Expenses Three Months Ended September 27, 2025 September 28, 2024 Products and Systems Integration Software and Services Total Products and Systems Integration Software and Services Total Net sales $ 1,897 $ 1,112 $ 3,009 $ 1,784 $ 1,006 $ 2,790 Cost of sales 878 577 1,455 822 535 1,357 Gross margin 1,019 535 1,554 962 471 1,433 Selling, general and administrative expenses 384 101 485 346 93 439 Research and development expenditures 146 91 237 146 88 234 Other charges 31 31 62 24 25 49 Operating earnings $ 458 $ 312 $ 770 $ 446 $ 265 $ 711 Total other expense (45) (16) Earnings before income taxes $ 725 $ 695 Nine Months Ended September 27, 2025 September 28, 2024 Products and Systems Integration Software and Services Total Products and Systems Integration Software and Services Total Net sales $ 5,095 $ 3,207 $ 8,302 $ 4,933 $ 2,873 $ 7,806 Cost of sales 2,349 1,686 4,035 2,322 1,521 3,843 Gross margin 2,746 1,521 4,267 2,611 1,352 3,963 Selling, general and administrative expenses 1,079 292 1,371 1,000 265 1,265 Research and development expenditures 430 270 700 422 249 671 Other charges 64 88 152 54 99 153 Operating earnings $ 1,173 $ 871 $ 2,044 $ 1,135 $ 739 $ 1,874 Total other expense (92) (690) Earnings before income taxes $ 1,952 $ 1,184 Capital Expenditures by Segment Three Months Ended Nine Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Products and Systems Integration $ 34 $ 24 72 $ 64 …

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