[Mobile devices sales were $1.7 billion, down 6% compared with the year-ago quarter. Motorola shipped 8.3 million handsets, including 2.7 million smartphones.]

Schaumburg, Ill -- Motorola, Inc. today reported sales of $5.4 billion in the second quarter of 2010. The GAAP earnings in the second quarter of 2010 were $162 million, or $0.07 per share, which compares to GAAP earnings of $26 million, or $0.01 per share, in the second quarter of 2009. Non-GAAP financial information excludes after-tax costs of approximately $0.02 per share in the second quarter of both 2010 and 2009 related to stock-based compensation expense, intangible assets amortization expense and highlighted items. Details on these non-GAAP adjustments and the use of non-GAAP measures are included later in this press release.

During the quarter, the Company generated positive operating cash flow of $242 million, reduced long-term debt through a $500 million tender offer and ended the quarter with a total cash** position of $8.3 billion. Net cash*** increased to $4.9 billion from $4.6 billion in the first quarter.

Greg Brown, Motorola co-chief executive officer and CEO of Motorola Solutions, said, “In the second quarter, our Enterprise Mobility Solutions and Networks businesses continued to deliver best-in-class market leadership and financial returns, with strong operating earnings and excellent cash generation.”

"In addition, last week, we announced that Nokia Siemens Networks will acquire the majority of our Networks business. We are very proud of the operational and financial performance of our Networks business and are excited to have reached this agreement to combine our Networks team with such an industry leader," Brown continued. "This is great news for our customers, our investors and our people and will allow us to sharpen our strategic focus on providing mission-and business-critical solutions for our government, public safety and enterprise customers.”

"The Droid X launch has been very well received and is seen as one of the best smartphones in the market today with a 4.3 inch high-resolution display, Adobe flash and an 8 megapixel camera. As we continue to execute on our business strategy, we are in a strong position to continue improving our share in the rapidly growing smartphone market and improving our operating performance," said Sanjay Jha, Motorola co-chief executive officer and CEO of Motorola Mobility. "The Mobile Devices and Home businesses remain focused on developing next-generation products to capitalize on the convergence of mobile experiences and home entertainment.”

Operating Results

Mobile Devices segment sales were $1.7 billion, down 6 percent compared with the year-ago quarter. GAAP operating earnings were $87 million, which included income from a significant legal settlement of $228 million, compared to an operating loss of $287 million in the year-ago quarter. The non-GAAP operating loss was $109 million, compared to an operating loss of $239 million in the year-ago quarter.

Mobile Devices highlights:

* Introduced DROID X, a pocket-sized home theater with a 4.3 inch high-resolution display and powerful 1 GHz processor, garnering excitement and attention among media and consumers

* Introduced i1, the world’s first push-to-talk Android-powered smartphone; Motorola FLIPOUT™ with MOTOBLUR™ and Motorola CHARM™ with MOTOBLUR™, bringing our current smartphone portfolio to 12 devices

* Broadened choice of Android applications for consumers in Argentina, Brazil and Mexico with the announcement of SHOP4APPS, Motorola's mobile application storefront

Home segment sales were $886 million, down 13 percent compared with the year-ago quarter. GAAP operating earnings were $29 million, compared to $18 million in the year-ago quarter. Non-GAAP operating earnings were $57 million, compared to $49 million in the year-ago quarter.

Home highlights:

* Launched 3D TV set-top solution in North America and a next-generation HD IP set-top that supports fixed-mobile convergence solutions with KDDI in Japan

* Introduced Motorola M3 Media Server family, which delivers multimedia content and services across television, PCs and mobile devices

* Introduced Medios suite of software solutions for content distribution across multi-screen environments and advanced on-demand services

* Launched DCX700, a next-generation, cost-effective HD set-top solution that supports applications for whole-home content sharing

Enterprise Mobility Solutions segment sales were $1.9 billion, up 10 percent compared with the year-ago quarter. GAAP operating earnings were $181 million, compared to operating earnings of $141 million in the year-ago quarter. Non-GAAP operating earnings were $292 million, compared to $225 million in the year-ago quarter.

Enterprise Mobility Solutions highlights:

* Achieved year-over-year sales growth in all four regional markets

* Received multi-million dollar contracts in North America, including P25 system wins for counties in Georgia, Maryland, New York and Washington

* Announced ES400, the smallest and lightest enterprise digital assistant, which provides field workers access to business-critical applications to overcome productivity challenges

* Awarded the first phase of a private broadband 700MHz LTE network for public safety in the San Francisco Bay area, the first of its kind in the United States

Networks segment sales were $967 million, down 2 percent compared with the year-ago quarter. GAAP operating earnings were $178 million, compared to $92 million in the year-ago quarter. Non-GAAP operating earnings were $191 million, compared to $147 million in the year-ago quarter.

Networks highlights:

* Announced sale of majority of Networks assets to Nokia Siemens Networks

* Completed Phase I TD-LTE field trials with China's Ministry of Industry and Information Technology

* Introduced unique, cost-effective common platform base station solution that can be used for both WiMAX and LTE

* Introduced software release for KDDI to reuse existing CDMA base stations for LTE

Third-Quarter 2010 Outlook

The Company's outlook for the third quarter of 2010 is for earnings of $0.10 to $0.12 per share. This outlook includes the Networks business and excludes stock-based compensation expense and intangible assets amortization expense of approximately $0.04 per share, as well as charges associated with items of the variety typically highlighted by the Company in its quarterly earnings releases.

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