10-KPeriod: FY2012

Motorola Solutions, Inc. Annual Report, Year Ended Dec 31, 2012

Filed February 12, 2013For Securities:MSI

Summary

Motorola Solutions, Inc. reported solid financial performance in 2012, with net sales increasing by 6% to $8.7 billion, 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 billion, 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 billion 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.

Financial Highlights

56 data points
Beta

Revenue

$6.27B

50.9% Gross Margin

Net Income

$881.00M

14.1% Net Margin

EPS (Diluted)

$2.96

Total Assets

$12.68B

Cash & Equivalents

$1.47B

Free Cash Flow

$674.00M

Financial Statements
Beta
Revenue$6.27B
Cost of Revenue$3.08B
Gross Profit$3.19B
R&D Expenses$790.00M
SG&A Expenses$1.47B
Operating Income$920.00M
Interest Expense$108.00M
Net Income$881.00M
EPS (Basic)$3.02
EPS (Diluted)$2.96
Shares Outstanding (Basic)292.10M
Shares Outstanding (Diluted)297.40M

Key Highlights

  • 1Net sales grew 6% to $8.7 billion in 2012.
  • 2Government segment sales increased 12% to $6.0 billion, representing 69% of total sales.
  • 3Enterprise segment sales decreased 5% to $2.7 billion.
  • 4Operating earnings increased significantly to $1.3 billion, with operating margin improving to 14.4%.
  • 5Generated $1.1 billion in cash from operating activities.
  • 6Returned $2.7 billion to shareholders through share repurchases ($2.4 billion) and dividends ($270 million).
  • 7Acquired Psion plc to strengthen the mobile computing solutions portfolio.

Frequently Asked Questions

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.

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.

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.

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.