10-KPeriod: FY2016

Motorola Solutions, Inc. Annual Report, Year Ended Dec 31, 2016

Filed February 21, 2017For Securities:MSI

Summary

Motorola Solutions, Inc. (MSI) reported net sales of $6.04 billion for the fiscal year ended December 30, 2016, a 6% increase from $5.7 billion in 2015. This growth was primarily driven by strong performance in the Services segment, bolstered by the significant acquisition of Guardian Digital Communications Limited (GDCL) for approximately $1 billion, which expanded their Managed & Support services. The Products segment saw a slight decline in net sales, though operating margins improved. The company generated $1.2 billion in operating cash flow, an increase from the prior year, and returned $1.1 billion to shareholders through $842 million in share repurchases and $280 million in dividends. MSI continues to invest in future growth areas, particularly in software solutions for command centers and next-generation public safety broadband networks based on LTE technology, indicating a strategic shift towards a more services and software-centric business model.

Financial Highlights

56 data points
Beta

Revenue

$6.04B

47.5% Gross Margin

Net Income

$560.00M

9.3% Net Margin

EPS (Diluted)

$3.24

Total Assets

$8.46B

Cash & Equivalents

$1.03B

Free Cash Flow

$1.17B

Financial Statements
Beta
Revenue$6.04B
Cost of Revenue$3.17B
Gross Profit$2.87B
R&D Expenses$553.00M
SG&A Expenses$1.04B
Operating Income$1.05B
Interest Expense$225.00M
Net Income$560.00M
EPS (Basic)$3.30
EPS (Diluted)$3.24
Shares Outstanding (Basic)169.60M
Shares Outstanding (Diluted)173.10M

Key Highlights

  • 1Net sales increased by 6% to $6.04 billion in 2016, up from $5.7 billion in 2015, driven by growth in the Services segment.
  • 2The acquisition of Guardian Digital Communications Limited (GDCL) for approximately $1 billion significantly boosted the Services segment, particularly Managed & Support services.
  • 3Operating earnings increased to $1.07 billion in 2016 from $994 million in 2015, reflecting improved operational efficiencies.
  • 4Motorola Solutions returned $1.1 billion in capital to shareholders through share repurchases ($842 million) and dividends ($280 million).
  • 5Operating cash flow strengthened to $1.2 billion in 2016, up from $1.0 billion in 2015.
  • 6The company is strategically investing in software solutions for command centers and next-generation public safety broadband (LTE) to drive future growth.
  • 7Backlog grew to a record $8.4 billion at the end of 2016, up 29% from the previous year, indicating strong future revenue potential.

Frequently Asked Questions

Motorola Solutions reported net sales of $6.04 billion for the fiscal year ended December 30, 2016, representing a 6% increase from $5.7 billion in 2015. This growth was primarily driven by the Services segment, significantly boosted by the acquisition of Guardian Digital Communications Limited (GDCL), and organic growth in North America and Asia Pacific within both Products and Services.

In 2016, Motorola Solutions generated $1.2 billion in operating cash flow and returned a total of $1.1 billion to shareholders. This consisted of $842 million through its share repurchase program and $280 million in dividends. The company also increased its quarterly dividend by 15% to $0.47 per share in November 2016.

The company's strategic priorities include expanding its Services portfolio, particularly Managed & Support services, and investing in software solutions for command centers. A key focus is also the development and deployment of next-generation public safety broadband solutions utilizing LTE technology, aiming to leverage its expertise in both public and private networks to meet evolving customer needs.

Motorola Solutions completed two significant acquisitions in 2016: Guardian Digital Communications Limited (GDCL) for approximately $1 billion, which significantly enhanced its Services segment, and Spillman Technologies for $217 million, expanding its Command Center software capabilities. These acquisitions contributed to the company's revenue growth and strategic shift towards software and services.