01—Abstract
Summary
Summary of the 10-K filed February 23, 2016. Cited figures are marked; the original filing is the authoritative source.
Motorola Solutions, Inc. (MSI) reported its fiscal year 2015 results in this 10-K filing.
The company, a leader in mission-critical communication infrastructure, devices, software, and services for government and public safety sectors, generated $5.7 billiona in net sales. The business is structured into two main segments: Products ($3.7 billion in sales) and Services ($2.0 billion in sales). A significant positive development was the return to operating profitability in 2015, with operating earnings of $1 billion, a substantial improvement from the operating loss reported in 2014, which was heavily impacted by a large pension settlement charge.
The company also reported strong cash flow from operations of $1.0 billionb. MSI demonstrated a commitment to returning capital to shareholders, repurchasing $3.2 billion of its stock and paying $277 million in dividends in 2015. The company ended the year with a record backlog of $6.5 billion, indicating a solid pipeline of future business.
Strategic focus areas include continued innovation in core products, expansion of services (particularly Managed & Support services), and investment in next-generation public safety solutions like LTE. The recent acquisition of Airwave Solutions Limited post-year-end further supports the growth strategy in the Services segment.
02—Key points
Key Highlights
- Motorola Solutions reported net sales of $5.7 billion for fiscal year 2015, with $3.7 billion from the Products segment and $2.0 billion from the Services segment.
- The company achieved operating earnings of $1.0 billion in 2015, a significant turnaround from an operating loss of $1.0 billion in 2014, which included a large pension settlement charge.
- Cash provided by operating activities was strong at $1.0 billion for 2015, compared to cash used of $685 million in 2014.
- Motorola Solutions returned $3.5 billion to shareholders in 2015 through $3.2 billion in share repurchases and $277 million in dividends.
- The company ended 2015 with a record backlog of $6.5 billion, up 12% from the prior year.
- Significant investments were made in R&D ($620 million), focusing on new public safety devices, infrastructure, and LTE solutions.
- The company announced the acquisition of Airwave Solutions Limited in February 2016, strengthening its global Managed & Support services offerings.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Motorola Solutions, Inc. kept $0.11.
- Revenue$5.70B100.0%
- Cost of revenue−$2.98B52.3%
- Gross profit$2.72B47.7%
- Operating costs−$1.73B30.3%
- Operating income$994.0M17.5%
- Interest, other & tax−$384.0M6.7%
- Net income$610.0M10.7%
Where FY2015 revenue went
$5.70B- Cost of revenue: $2.98B, 52% of revenue
- SG&A: $1.02B, 18% of revenue
- Net income: $610.0M, 11% of revenue
- R&D: $620.0M, 11% of revenue
- Other operating costs: $84.0M, 1.5% of revenue
- Interest, other & tax: $384.0M, 6.7% of revenue
Kept 11% as net incomeOther operating costs $84.0M · 1.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 23, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $5.70B$5.88B | −3.2% |
| Cost of Revenue | $2.98B$3.05B | −2.4% |
| Gross Profit | $2.72B$2.83B | −4.0% |
| R&D Expenses | $620.00M$681.00M | −9.0% |
| SG&A Expenses | $1.02B$1.18B | −13.8% |
| Operating Income | $994.00M-$1.01B | +198.8% |
| Interest Expense | $186.00M$147.00M | +26.5% |
| Net Income | $610.00M$1.30B | −53.0% |
| EPS (Basic) | $3.06$5.29 | −42.2% |
| EPS (Diluted) | $3.02$5.29 | −42.9% |
| Shares Outstanding (Basic) | 199.60M245.60M | −18.7% |
| Shares Outstanding (Diluted) | 201.80M245.60M | −17.8% |
05—Questions
Frequently Asked Questions
What were Motorola Solutions' main business segments and their contributions to revenue in 2015?
Motorola Solutions operates through two primary segments: the Products segment, which includes devices and systems, generated $3.7 billion in net sales (65% of total). The Services segment, encompassing integration, managed & support, and iDEN services, generated $2.0 billion in net sales (35% of total).
How did Motorola Solutions' profitability change in 2015 compared to 2014?
Motorola Solutions showed a significant improvement in profitability, reporting operating earnings of $1.0 billion in 2015, a substantial increase from an operating loss of $1.0 billion in 2014. The 2014 results were significantly impacted by a $1.9 billion pension settlement loss, which was largely absent in 2015.
What was the company's strategy for capital allocation in 2015?
In 2015, Motorola Solutions focused on returning capital to shareholders, repurchasing $3.2 billion of its common stock and paying $277 million in dividends. The company also entered into an agreement to issue $1.0 billion in Senior Convertible Notes with Silver Lake Partners to support software and services growth.
What are Motorola Solutions' key growth strategies and future focus areas?
The company's strategy involves partnering with customers through innovative products and services. Key focus areas include driving migration to digital communication standards, investing in next-generation public safety solutions like LTE, expanding its Services portfolio (especially Managed & Support services), and leveraging its global footprint. The acquisition of Airwave Solutions Limited is a key step in expanding its services offerings globally.
06—Continue