01—Abstract
Summary
Summary of the 10-K filed February 12, 2013. Cited figures are marked; the original filing is the authoritative source.
Motorola Solutions, Inc. reported solid financial performance in 2012, with net sales increasing by 6% to $8.7 billiona, driven primarily by a 12% growth in its Government segment, which accounted for 69% of total sales.
The Enterprise segment experienced a 5% decline in net sales. The company's operating earnings saw a significant increase of over 46%, reaching $1.3 billionb, with an improved operating margin of 14.4% compared to 10.5% in the prior year. This growth was supported by strong demand for public safety communication systems and the continued transition to digital products.
The company demonstrated strong cash flow generation, with $1.1 billionc from operating activities. Motorola Solutions actively returned capital to shareholders, repurchasing $2.4 billion worth of shares and paying $270 million in dividends.
Looking ahead, Motorola Solutions expressed confidence in its business fundamentals, citing continued investment in R&D for next-generation public safety solutions, including LTE systems, and a broad product portfolio as key drivers for future growth. Despite the challenging macro environment impacting the Enterprise segment, the company remains focused on innovation and disciplined cost management.
02—Key points
Key Highlights
- Net sales grew 6% to $8.7 billion in 2012.
- Government segment sales increased 12% to $6.0 billion, representing 69% of total sales.
- Enterprise segment sales decreased 5% to $2.7 billion.
- Operating earnings increased significantly to $1.3 billion, with operating margin improving to 14.4%.
- Generated $1.1 billion in cash from operating activities.
- Returned $2.7 billion to shareholders through share repurchases ($2.4 billion) and dividends ($270 million).
- Acquired Psion plc to strengthen the mobile computing solutions portfolio.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Motorola Solutions, Inc. kept $0.14.
- Revenue$6.27B100.0%
- Cost of revenue−$3.08B49.1%
- Gross profit$3.19B50.9%
- Operating costs−$2.27B36.3%
- Operating income$920.0M14.7%
- Interest, other & tax−$39.0M0.6%
- Net income$881.0M14.1%
Where FY2012 revenue went
$6.27B- Cost of revenue: $3.08B, 49% of revenue
- SG&A: $1.47B, 23% of revenue
- Net income: $881.0M, 14% of revenue
- R&D: $790.0M, 13% of revenue
- Interest, other & tax: $39.0M, 0.6% of revenue
Kept 14% as net incomeR&D $790.0M · 13%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 12, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $6.27B$8.20B | −23.6% |
| Cost of Revenue | $3.08B$4.06B | −24.2% |
| Gross Profit | $3.19B$4.15B | −23.0% |
| R&D Expenses | $790.00M$1.03B | −23.7% |
| SG&A Expenses | $1.47B$1.91B | −23.0% |
| Operating Income | $920.00M$858.00M | +7.2% |
| Interest Expense | $108.00M$132.00M | −18.2% |
| Net Income | $881.00M$1.16B | −23.9% |
| EPS (Basic) | $3.02$3.47 | −13.0% |
| EPS (Diluted) | $2.96$3.41 | −13.2% |
| Shares Outstanding (Basic) | 292.10M333.80M | −12.5% |
| Shares Outstanding (Diluted) | 297.40M339.70M | −12.5% |
05—Questions
Frequently Asked Questions
What were the main drivers of Motorola Solutions' financial performance in 2012?
The primary driver of Motorola Solutions' financial performance in 2012 was the strong growth in its Government segment, fueled by increased demand for public safety communication systems and the ongoing migration from analog to digital technologies. The Enterprise segment faced headwinds due to a challenging macro environment, leading to reduced sales.
How did Motorola Solutions manage its capital and return value to shareholders in 2012?
Motorola Solutions generated substantial cash from operations and actively managed its capital structure. The company returned a significant amount of capital to shareholders through a robust share repurchase program, buying back $2.4 billion worth of stock, and by paying $270 million in dividends.
What are Motorola Solutions' key strategies for future growth?
Motorola Solutions' growth strategy is centered on continued investment in research and development, particularly in next-generation public safety technologies like LTE systems. The company aims to leverage its broad product portfolio, expand its services offerings, and pursue complementary acquisitions to strengthen its market position.
What are the main risks facing Motorola Solutions, as highlighted in the filing?
Key risks identified include the impact of challenging global economic conditions on customer spending, intense competition, reliance on a few key suppliers, potential disruptions in manufacturing due to global operations, and the evolving regulatory landscape for radio spectrum. The company also noted risks related to intellectual property and the integration of acquired businesses.
06—Continue