01—Abstract
Summary
Summary of the 10-K filed February 13, 2014. Cited figures are marked; the original filing is the authoritative source.
Motorola Solutions, Inc.'s 2013 10-K filing reveals a company with consistent net sales of $8.7 billiona in both 2013 and 2012, demonstrating stability in a challenging economic environment.
The Government segment, representing 69% of net sales, saw a modest 1% increase, driven by infrastructure and services growth, with strong performance in TETRA product lines internationally. The Enterprise segment experienced a 2% decline in net sales, attributed to delayed customer spending and a shift away from iDEN infrastructure, though core product lines stabilized in the latter half of the year. The company continued its commitment to returning capital to shareholders, repurchasing approximately $1.7 billionb in stock and paying $292 million in dividends during 2013, while also managing its debt levels and focusing on innovation, particularly in public safety LTE technology, anticipating increased revenue from this area starting in 2015.
Despite operational efficiencies and cost improvements, the gross margin percentage saw a slight decrease due to a less favorable product mix and the impact of acquisitions with lower margins. The company is actively investing in research and development, with expenditures of $1.1 billionc in both 2013 and 2012, focusing on next-generation public safety broadband networks based on LTE standards and expanding its Enterprise product portfolio with a focus on Android operating systems and 2D imaging technology.
The government sector remains a significant customer base, with the U.S. government representing 8%d of the Government segment's sales and 6% of the Company's total sales in 2013, highlighting a concentration risk associated with this key customer, as contracts are subject to cancellation at the U.S. government's convenience. Motorola Solutions continues to navigate global economic uncertainties and regulatory landscapes, while maintaining a strong focus on operational efficiency and strategic growth areas.
02—Key points
Key Highlights
- Motorola Solutions reported stable net sales of $8.7 billion for both 2013 and 2012, indicating resilience in its markets.
- The Government segment, comprising 69% of total net sales, grew by 1% to $6.0 billion, driven by strong infrastructure and services, particularly in TETRA technologies.
- The Enterprise segment's net sales declined by 2% to $2.7 billion, impacted by customer spending delays and the winding down of iDEN infrastructure sales.
- The company returned $1.7 billion to shareholders through share repurchases and $292 million in dividends in 2013, underscoring a commitment to capital return.
- Research and Development (R&D) spending remained substantial at $1.1 billion, focused on future growth areas like public safety LTE and Android-based enterprise solutions.
- A significant portion of revenue, 43% in 2013, was generated outside the U.S., indicating a global operational footprint and associated currency risks.
- The U.S. government is a key customer, representing 6% of total net sales, but contracts are subject to cancellation by the government, posing a risk.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Motorola Solutions, Inc. kept $0.18.
- Revenue$6.23B100.0%
- Cost of revenue−$3.12B50.1%
- Gross profit$3.11B49.9%
- Operating costs−$2.16B34.7%
- Operating income$947.0M15.2%
- Interest, other & tax$152.0M2.4%
- Net income$1.10B17.6%
Where FY2013 revenue went
$6.23B- Cost of revenue: $3.12B, 50% of revenue
- SG&A: $1.33B, 21% of revenue
- Operating income: $947.0M, 15% of revenue
- R&D: $761.0M, 12% of revenue
- Other operating costs: $71.0M, 1.1% of revenue
Kept 15% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 13, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $6.23B$6.27B | −0.7% |
| Cost of Revenue | $3.12B$3.08B | +1.4% |
| Gross Profit | $3.11B$3.19B | −2.7% |
| R&D Expenses | $761.00M$790.00M | −3.7% |
| SG&A Expenses | $1.33B$1.47B | −9.6% |
| Operating Income | $947.00M$920.00M | +2.9% |
| Interest Expense | $132.00M$108.00M | +22.2% |
| Net Income | $1.10B$881.00M | +24.7% |
| EPS (Basic) | $4.13$3.02 | +36.8% |
| EPS (Diluted) | $4.06$2.96 | +37.2% |
| Shares Outstanding (Basic) | 266.00M292.10M | −8.9% |
| Shares Outstanding (Diluted) | 270.50M297.40M | −9.0% |
05—Questions
Frequently Asked Questions
What is the revenue breakdown between Motorola Solutions' two main segments, Government and Enterprise, for 2013?
In 2013, the Government segment accounted for approximately 69% of Motorola Solutions' consolidated net sales, while the Enterprise segment represented approximately 31%.
How did Motorola Solutions manage its capital in 2013?
In 2013, Motorola Solutions provided $1.7 billion in cash to shareholders through share repurchases and $292 million in cash dividends. The company also issued $600 million of 3.50% senior notes due 2023, increasing its long-term debt.
What are Motorola Solutions' key areas of investment for future growth?
Motorola Solutions is heavily investing in R&D for next-generation public safety broadband networks based on LTE standards, anticipating increased revenue from this area starting in 2015. In the Enterprise segment, investments are focused on expanding its mobile computing portfolio with Android operating systems and advancing 2D imaging technology.
What are the main risks highlighted in the filing for Motorola Solutions?
Key risks include global economic conditions impacting customer spending, potential delays or cancellations of government contracts (especially with the U.S. government), intense competition, the need for successful new product introductions, and the complexities of expanding its global solutions and services business. There's also a significant dependency on third-party suppliers and partners.
06—Continue