01—Abstract
Summary
Summary of the 10-K filed February 18, 2011. Cited figures are marked; the original filing is the authoritative source.
Motorola Solutions, Inc. (MSI) in its 2010 10-K filing is characterized by a significant corporate transformation, namely the separation of its Mobile Devices and Home businesses into a new independent entity, Motorola Mobility Holdings, Inc., which was completed on January 4, 2011.
Post-separation, Motorola Solutions will focus solely on its Enterprise Mobility Solutions segment, which provides communication products and services to government and public safety agencies, as well as commercial enterprises. This segment demonstrated resilience, with sales increasing by 10%a in 2010, driven by improved demand in retail markets and continued government spending. The company also announced an agreement to sell a majority of its Networks infrastructure assets to Nokia Siemens Networks (NSN) in early 2011.
This divestiture further sharpens the company's strategic focus on its core Enterprise Mobility Solutions business. Despite operational challenges such as component shortages and a complex economic environment, Motorola Solutions reported an improvement in operating earnings in 2010 compared to a loss in 2009, signaling progress in its turnaround efforts. The company maintained a strong liquidity position with significant cash and cash equivalents at year-end 2010.
02—Key points
Key Highlights
- Completion of the separation of Motorola Mobility Holdings, Inc. into a separate publicly traded entity on January 4, 2011, leaving Motorola Solutions focused on its Enterprise Mobility Solutions segment.
- Agreement to sell a majority of its Networks infrastructure assets to Nokia Siemens Networks (NSN) in the first quarter of 2011.
- Net sales increased by 6% to $19.3 billion in 2010, with the Enterprise Mobility Solutions segment growing by 10% to $7.9 billion.
- Operating earnings improved significantly to $789 million in 2010 from an operating loss of $492 million in 2009.
- Research and development expenditures decreased by 3% to $2.5 billion in 2010, reflecting cost-reduction initiatives.
- The company ended 2010 with a strong liquidity position, reporting $4.2 billion in cash and cash equivalents.
- A total of approximately 51,000 employees were employed by the company at the end of 2010, with approximately 19,000 transferring with Motorola Mobility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Motorola Solutions, Inc. kept $0.08.
- Revenue$7.62B100.0%
- Cost of revenue−$3.81B50.0%
- Gross profit$3.81B50.0%
- Operating costs−$3.06B40.2%
- Operating income$751.0M9.9%
- Interest, other & tax−$118.0M1.5%
- Net income$633.0M8.3%
Where FY2010 revenue went
$7.62B- Cost of revenue: $3.81B, 50% of revenue
- SG&A: $1.87B, 25% of revenue
- R&D: $1.04B, 14% of revenue
- Net income: $633.0M, 8.3% of revenue
- Other operating costs: $150.0M, 2.0% of revenue
- Interest, other & tax: $118.0M, 1.5% of revenue
Kept 8.3% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed February 18, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $7.62B$6.95B | +9.6% |
| Cost of Revenue | $3.81B$3.47B | +9.7% |
| Gross Profit | $3.81B$3.48B | +9.6% |
| R&D Expenses | $1.04B$993.00M | +4.4% |
| SG&A Expenses | $1.87B$1.66B | +12.8% |
| Operating Income | $751.00M$567.00M | +32.5% |
| Interest Expense | $217.00M$207.00M | +4.8% |
| Net Income | $633.00M-$51.00M | +1341.2% |
| EPS (Basic) | $1.90$-0.16 | +1287.5% |
| EPS (Diluted) | $1.87$-0.15 | +1346.7% |
| Shares Outstanding (Basic) | 333.30M327.90M | +1.6% |
| Shares Outstanding (Diluted) | 338.10M329.90M | +2.5% |
05—Questions
Frequently Asked Questions
What is the primary strategic change for Motorola Solutions as indicated in this filing?
The primary strategic change is the completion of the separation of Motorola Mobility Holdings, Inc. (which included the Mobile Devices and Home segments) into a separate company. Motorola Solutions is now exclusively focused on its Enterprise Mobility Solutions business.
How did Motorola Solutions' financial performance improve in 2010 compared to 2009?
Motorola Solutions saw a significant improvement in its financial performance in 2010. Net sales increased by 6% to $19.3 billion, and the company reported operating earnings of $789 million, a substantial improvement from the operating loss of $492 million reported in 2009.
What is the status of the Networks business sale?
Motorola Solutions had an agreement to sell a majority of its Networks infrastructure assets to Nokia Siemens Networks (NSN) for $1.2 billion, with the transaction expected to close in the first quarter of 2011, subject to regulatory approvals.
What are the main areas of focus for Motorola Solutions' Enterprise Mobility Solutions segment?
The Enterprise Mobility Solutions segment focuses on designing, manufacturing, selling, installing, and servicing analog and digital two-way radios, wireless LAN and security products, and voice and data communication systems primarily for private networks, wireless broadband systems, and end-to-end enterprise mobility solutions for government, public safety, and commercial customers.
06—Continue