Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Oct. 02, 2021 | Oct. 29, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Oct. 2, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Trading Symbol | REZI | |
Entity Registrant Name | Resideo Technologies, Inc. | |
Entity Central Index Key | 0001740332 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 144,386,057 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NYSE | |
Entity File Number | 001-38635 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-5318796 | |
Entity Address, Address Line One | 901 E 6th Street | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78702 | |
City Area Code | 512 | |
Local Phone Number | 726-3500 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONSOLIDATED INTERIM STATEMENTS
CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Income Statement [Abstract] | ||||
Net revenue | $ 1,496 | $ 1,362 | $ 4,392 | $ 3,570 |
Cost of goods sold | 1,080 | 992 | 3,227 | 2,680 |
Gross profit | 416 | 370 | 1,165 | 890 |
Selling, general and administrative expenses | 229 | 221 | 684 | 676 |
Research and development expenses | 20 | 18 | 63 | 55 |
Operating profit | 167 | 131 | 418 | 159 |
Other expense, net | 58 | 35 | 130 | 106 |
Interest expense | 12 | 14 | 37 | 49 |
Income before taxes | 97 | 82 | 251 | 4 |
Tax expense | 29 | 7 | 76 | 26 |
Net income (loss) | $ 68 | $ 75 | $ 175 | $ (22) |
Weighted Average Number of Common Shares Outstanding (in thousands) | ||||
Basic | 144,284 | 123,421 | 143,865 | 123,194 |
Diluted | 148,559 | 125,235 | 148,260 | 123,194 |
Earnings (Loss) Per Share | ||||
Basic | $ 0.47 | $ 0.61 | $ 1.22 | $ (0.18) |
Diluted | $ 0.46 | $ 0.60 | $ 1.18 | $ (0.18) |
CONSOLIDATED INTERIM STATEMEN_2
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 68 | $ 75 | $ 175 | $ (22) |
Other comprehensive income (loss), net of tax | ||||
Foreign exchange translation adjustment | (24) | 28 | (41) | 6 |
Total other comprehensive income (loss), net of tax | (24) | 28 | (41) | 6 |
Comprehensive income (loss) | $ 44 | $ 103 | $ 134 | $ (16) |
CONSOLIDATED INTERIM BALANCE SH
CONSOLIDATED INTERIM BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Oct. 02, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 686 | $ 517 |
Accounts receivable – net | 932 | 863 |
Inventories – net | 710 | 672 |
Other current assets | 179 | 173 |
Total current assets | 2,507 | 2,225 |
Property, plant and equipment – net | 290 | 318 |
Goodwill | 2,671 | 2,691 |
Other assets | 366 | 376 |
Total assets | 5,834 | 5,610 |
Current liabilities: | ||
Accounts payable | 905 | 936 |
Current maturities of debt | 10 | 7 |
Accrued liabilities | 617 | 595 |
Total current liabilities | 1,532 | 1,538 |
Long-term debt | 1,222 | 1,155 |
Obligations payable under Indemnification Agreements | 587 | 590 |
Other liabilities | 335 | 334 |
COMMITMENTS AND CONTINGENCIES (Note 12) | ||
EQUITY | ||
Common stock, $0.001 par value, 700,000 shares authorized, 145,616 and 144,383 shares issued and outstanding as of October 2, 2021, 143,959 and 143,059 shares issued and outstanding as of December 31, 2020, respectively | 0 | 0 |
Additional paid-in capital | 2,111 | 2,070 |
Treasury stock, at cost | (16) | (6) |
Retained earnings | 250 | 75 |
Accumulated other comprehensive loss | (187) | (146) |
Total equity | 2,158 | 1,993 |
Total liabilities and equity | $ 5,834 | $ 5,610 |
CONSOLIDATED INTERIM BALANCE _2
CONSOLIDATED INTERIM BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Oct. 02, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 700,000,000 | 700,000,000 |
Common stock, shares issued | 145,616,000 | 143,959,000 |
Common stock, shares outstanding | 144,383,000 | 143,059,000 |
CONSOLIDATED INTERIM STATEMEN_3
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Cash flows provided by operating activities: | ||
Net income (loss) | $ 175 | $ (22) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 67 | 64 |
Stock compensation expense | 29 | 21 |
Loss on extinguishment of debt | 41 | |
Other | 4 | 20 |
Changes in assets and liabilities, net of acquired companies: | ||
Accounts receivable | (78) | (64) |
Inventories – net | (40) | 64 |
Other current assets | (6) | 15 |
Accounts payable | (19) | (62) |
Accrued liabilities | 26 | 52 |
Obligations payable under Indemnification Agreements | (3) | (8) |
Other | 7 | 12 |
Net cash provided by operating activities | 203 | 92 |
Cash flows used for investing activities: | ||
Expenditures for property, plant, equipment and other intangibles | (48) | (50) |
Cash paid for acquisitions, net of cash acquired | (11) | (35) |
Other | 3 | |
Net cash used for investing activities | (56) | (85) |
Cash flows provided by financing activities: | ||
Proceeds from long-term debt | 1,250 | |
Payment of debt facility issuance and modification costs | (39) | |
Net proceeds from revolving credit facility | 150 | |
Repayment of long-term debt | (1,185) | (11) |
Other | 2 | (4) |
Net cash provided by financing activities | 28 | 135 |
Effect of foreign exchange rate changes on cash and cash equivalents | (6) | (4) |
Net increase in cash and cash equivalents | 169 | 138 |
Cash and cash equivalents at beginning of period | 517 | 122 |
Cash and cash equivalents at end of period | $ 686 | $ 260 |
CONSOLIDATED INTERIM STATEMEN_4
CONSOLIDATED INTERIM STATEMENTS OF EQUITY (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Treasury Shares | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning Balance at Dec. 31, 2019 | $ 1,602 | $ (3) | $ 1,761 | $ 38 | $ (194) | |
Beginning Balance, Shares at Dec. 31, 2019 | 122,873,000 | 615,000 | ||||
Net income (loss) | (22) | (22) | ||||
Other comprehensive income (loss), net of tax | 6 | 6 | ||||
Stock issuances, net of shares withheld for taxes | (2) | $ (2) | ||||
Stock issuances, net of shares withheld for taxes, Shares | 570,000 | 266,000 | ||||
Stock-based compensation | 21 | 21 | ||||
Ending Balance at Sep. 26, 2020 | 1,605 | $ (5) | 1,782 | 16 | (188) | |
Ending Balance, Shares at Sep. 26, 2020 | 123,443,000 | 881,000 | ||||
Beginning Balance at Jun. 27, 2020 | 1,495 | $ (5) | 1,775 | (59) | (216) | |
Beginning Balance, Shares at Jun. 27, 2020 | 123,378,000 | 852,000 | ||||
Net income (loss) | 75 | 75 | ||||
Other comprehensive income (loss), net of tax | 28 | 28 | ||||
Stock issuances, net of shares withheld for taxes | 0 | |||||
Stock issuances, net of shares withheld for taxes, Shares | 65,000 | 29,000 | ||||
Stock-based compensation | 7 | 7 | ||||
Ending Balance at Sep. 26, 2020 | 1,605 | $ (5) | 1,782 | 16 | (188) | |
Ending Balance, Shares at Sep. 26, 2020 | 123,443,000 | 881,000 | ||||
Beginning Balance at Dec. 31, 2020 | 1,993 | $ (6) | 2,070 | 75 | (146) | |
Beginning Balance, Shares at Dec. 31, 2020 | 143,059,000 | 900,000 | ||||
Net income (loss) | 175 | 175 | ||||
Other comprehensive income (loss), net of tax | (41) | (41) | ||||
Stock issuances, net of shares withheld for taxes | 2 | $ (10) | 12 | |||
Stock issuances, net of shares withheld for taxes, Shares | 1,324,000 | 333,000 | ||||
Stock-based compensation | 29 | 29 | ||||
Ending Balance at Oct. 02, 2021 | 2,158 | $ (16) | 2,111 | 250 | (187) | |
Ending Balance, Shares at Oct. 02, 2021 | 144,383,000 | 1,233,000 | ||||
Beginning Balance at Jul. 03, 2021 | 2,103 | $ (14) | 2,098 | 182 | (163) | |
Beginning Balance, Shares at Jul. 03, 2021 | 144,171,000 | 1,188,000 | ||||
Net income (loss) | 68 | 68 | ||||
Other comprehensive income (loss), net of tax | (24) | (24) | ||||
Stock issuances, net of shares withheld for taxes | 1 | $ (2) | 3 | |||
Stock issuances, net of shares withheld for taxes, Shares | 212,000 | 45,000 | ||||
Stock-based compensation | 10 | 10 | ||||
Ending Balance at Oct. 02, 2021 | $ 2,158 | $ (16) | $ 2,111 | $ 250 | $ (187) | |
Ending Balance, Shares at Oct. 02, 2021 | 144,383,000 | 1,233,000 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements | 9 Months Ended |
Oct. 02, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization, Operations and Basis of Presentation | Note 1. Organization, Operations, and Basis of Presentation Business Description Resideo Technologies, Inc. (“Resideo” or “the Company”), is a leading global manufacturer and developer of technology-driven products that provide critical comfort, residential thermal, and security solutions to homes globally. The Company is also the leading wholesale distributor of low-voltage security products including intrusion, access control and video products, and participates significantly in the broader related markets of smart home, fire, power, audio, ProAV, networking, communications, wire and cable, and data communications. The Company has a global footprint serving commercial and residential end markets. The Company was incorporated in Delaware on April 24, 2018. The Company separated from Honeywell International Inc. (“Honeywell”) on October 29, 2018 , becoming an independent publicly traded company as a result of a pro rata distribution of the Company’s common stock to shareholders of Honeywell (the “Spin-Off”). Basis of Presentation The Company’s financial statements are presented on a consolidated basis (collectively, the “Interim Financial Statements”) and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany transactions have been eliminated for all periods presented. The Interim Financial Statements are unaudited; however, in the opinion of management, they contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to state fairly the financial position, results of operations, and cash flows for the periods presented in conformity with U.S. GAAP applicable to interim periods. The Company reports financial information on a fiscal quarter basis using a “modified” 4-4-5 calendar (modified in that the fiscal year always begins on January 1 and ends on December 31) that requires its businesses to close their first, second, and third quarter books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on business processes. The effects of this practice are generally not significant to reported results for any quarter and only exist within a reporting year. In the event that differences in closing dates are material to year-over-year comparisons of quarterly or year-to-date results, the Company will provide appropriate disclosures. Reclassification The prior year segment information was recast. See Note 4. Segment Financial Data for additional information. Certain reclassifications have been made to the prior period financial statements to conform to the classification adopted in the current period. The prior year unaudited Consolidated Interim Statements of Operations were reclassified to present research and development expenses as a separate line item within the statements. Research and development expenses were formerly included within Selling, general and administrative expenses. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The Company’s accounting policies are set forth in Note 2. Summary of Significant Accounting Policies of the Company’s Notes to Consolidated and Combined Financial Statements included in the 2020 Annual Report on Form 10-K. Recent Accounting Pronouncements —The Company considers the applicability and impact of all recent accounting standards updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s consolidated financial position or results of operations. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which is optional guidance related to reference rate reform that provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance along with its subsequent clarifications, is effective from March 12, 2020 through December 31, 2022 and is applicable for the Company’s A&R Senior Credit Facilities and Swap Agreements, which use LIBOR as a reference rate. Refer to Note 13. Long-term Debt and Credit Agreement for further details on the Company’s A&R Senior Credit Facilities and Note 14. Derivative Instruments for further details on the Company's Swap Agreements. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Oct. 02, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | Note 3. Revenue Recognition Disaggregated Revenue Revenues by geography and business line are as follows: Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Comfort $ 303 $ 297 $ 877 $ 725 Security 172 142 512 379 Residential Thermal Solutions 156 133 446 341 Products & Solutions 631 572 1,835 1,445 U.S. and Canada 727 650 2,125 1,758 EMEA (1) 128 129 402 338 APAC (2) 10 11 30 29 ADI Global Distribution 865 790 2,557 2,125 Net revenue $ 1,496 $ 1,362 $ 4,392 $ 3,570 (1) EMEA represents Europe, the Middle East and Africa. (2) APAC represents Asia and Pacific countries. The Company recognizes the majority of its revenue from performance obligations outlined in contracts with its customers that are satisfied at a point in time. Approximately 3 % of the Company’s revenue is satisfied over time. As of October 2, 2021 and September 26, 2020 , contract assets and liabilities were not material. |
Segment Financial Data
Segment Financial Data | 6 Months Ended |
Jul. 03, 2021 | |
Segment Reporting [Abstract] | |
Segment Financial Data | Note 4. Segment Financial Data During the fourth quarter of 2020, the format of the Chief Operating Decision Maker’s reporting package was modified which resulted in changes to how business operations are presented. The Company continues to monitor its business operations through two operating segments, Products & Solutions and ADI Global Distribution. The Company now reports Corporate separately from the two operating segments. The reporting package also includes segment Operating profit, which replaces Segment Adjusted EBITDA as a performance metric. These changes were designed to better align accountability and authority, give a clearer view into the operational performance of the two segments, and increase accountability for management of corporate spending. As a result, the Company recast prior periods to conform with the new presentation. Products & Solutions —The Products & Solutions business is a leading global provider of products, software solutions and technologies that help homeowners stay connected and in control of their comfort, security, and energy use. ADI Global Distribution —The ADI Global Distribution business is the leading global distributor of low-voltage security products including intrusion, access control, and video products and participates significantly in the broader related markets of smart home, fire, access control, power, audio, ProAV, networking, communications, wire and cable, and data communications. Corporate —Corporate includes expenses associated with legal, finance, information technology, human resources, strategy, and communications related to the Corporate office as well as supporting the operating segments, but do not relate directly to revenue-generating activities. Segment information is consistent with how management reviews the businesses, makes investing and resource allocation decisions, and assesses operating performance. Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Revenue Total Products & Solutions revenue $ 726 $ 674 $ 2,121 $ 1,715 Less: Intersegment revenue 95 102 286 270 External Products & Solutions revenue 631 572 1,835 1,445 External ADI Global Distribution revenue 865 790 2,557 2,125 Total revenue $ 1,496 $ 1,362 $ 4,392 $ 3,570 Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Operating profit (loss) Products & Solutions $ 157 $ 141 $ 416 $ 241 ADI Global Distribution 73 56 198 135 Corporate ( 63 ) ( 66 ) ( 196 ) ( 217 ) Total $ 167 $ 131 $ 418 $ 159 The Company’s Chief Operating Decision Maker does not use segment assets information to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 9 Months Ended |
Oct. 02, 2021 | |
Compensation Related Costs [Abstract] | |
Stock-Based Compensation Plans | Note 5. Stock-Based Compensation Plans Restricted Stock Units (“RSUs”) During the nine months ended October 2, 2021, as part of the Company’s annual long-term compensation under the 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates and the 2018 Stock Incentive Plan for Non-Employee Directors of Resideo Technologies, Inc. as may be amended from time to time (together, the “Stock Incentive Plan”), it granted 500,227 market-based RSUs and 1,125,136 service-based RSUs to eligible employees. The weighted average grant date fair value per share for market-based RSUs and service-based RSUs was $ 42.89 and $ 27.41 , respectively. Stock Options During the nine months ended October 2, 2021 , as part of the Company’s annual long-term compensation under the Stock Incentive Plan, 150,000 stock options were granted to eligible employees at a weighted average exercise price per share of $ 25.48 and weighted average grant date fair value per share of $ 7.69 . |
Leases
Leases | 9 Months Ended |
Oct. 02, 2021 | |
Leases [Abstract] | |
Leases | Note 6. Leases The Company is party to operating leases for the majority of its manufacturing sites, offices, engineering and lab sites, stocking locations, warehouses, automobiles, and certain equipment. Certain of the Company’s real estate leases include variable rental payments which adjust periodically based on inflation, and certain automobile lease agreements include rental payments which fluctuate based on mileage. Generally, the Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s operating lease costs for the three and nine months ended October 2, 2021 and September 26, 2020 consisted of the following: Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Cost of goods sold $ 5 $ 5 $ 13 $ 13 Selling, general and administrative 12 13 34 33 Total operating lease costs $ 17 $ 18 $ 47 $ 46 Total operating lease costs include variable lease costs of $ 5 million and $ 13 million for the three and nine months ended October 2, 2021. For the three and nine months ended September 26, 2020 , total operating lease costs include variable lease costs of $ 5 million and $ 12 million, respectively. Total operating lease costs also include offsetting sublease income which is immaterial for the three and nine months ended October 2, 2021 and September 26, 2020. The Company recognized the following related to its operating leases: Financial At October 2, At December 31, Operating right-of-use assets Other assets $ 134 $ 133 Operating lease liabilities - current Accrued liabilities $ 33 $ 33 Operating lease liabilities - noncurrent Other liabilities $ 112 $ 107 Maturities of the Company’s operating lease liabilities were as follows: At October 2, 2021 $ 10 2022 39 2023 34 2024 23 2025 17 Thereafter 46 Total lease payments 169 Less: imputed interest 24 Present value of operating lease liabilities $ 145 Weighted-average remaining lease term (years) 5.75 Weighted-average incremental borrowing rate 5.39 % Supplemental cash flow information related to the Company’s operating leases was as follows: Nine Months Ended October 2, 2021 September 26, 2020 Operating cash outflows $ 25 $ 22 Operating right-of-use assets obtained in exchange for operating lease liabilities $ 31 $ 22 As of October 2, 2021, the Company has additional operating leases that have not yet commenced. Obligations under these leases are not material. Additionally, as a lessor, the Company leases all or a portion of certain owned properties. Rental income for the three and nine months ended October 2, 2021 and September 26, 2020 was not material. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7. Income Taxes The Company recorded tax expense of $ 29 million and $ 76 million for the three and nine months ended October 2, 2021, respectively. For interim periods, income tax is equal to the total of (1) year-to-date pretax income multiplied by the Company’s forecasted effective tax rate plus (2) tax expense items specific to the period. In situations where the Company expects to report losses for which the Company does not expect to receive tax benefits, the Company is required to apply separate forecasted effective tax rates to those jurisdictions rather than including them in the consolidated forecasted effective tax rate. For the three months ended October 2, 2021 the net tax expense of $ 29 million consists primarily of interim period tax expense of $ 32 million based on year-to-date pretax income multiplied by the Company’s forecasted effective tax rate, partially offset by a tax benefit specific to the period of approximately $ 3 million consisting primarily of changes in estimates related to prior years. In addition to items specific to the period, the Company’s income tax rate is impacted by the mix of earnings across the jurisdictions in which the Company operates, non-deductible expenses, and U.S. taxation of foreign earnings. For the nine months ended October 2, 2021, the net tax expense of $ 76 million consists primarily of interim period tax expense of $ 80 million based on year-to-date pretax income multiplied by the Company’s forecasted effective tax rate, offset by tax benefits specific to the period of approximately $ 4 million, consisting primarily of excess deductions for share-based compensation and changes in estimates related to prior years. In addition to items specific to the period, the Company’s income tax rate is impacted by the mix of earnings across the jurisdictions in which the Company operates, non-deductible expenses, and U.S. taxation of foreign earnings. |
Other Expense, Net
Other Expense, Net | 9 Months Ended |
Oct. 02, 2021 | |
Other Income And Expenses [Abstract] | |
Other Expense, Net | Note 8. Other Expense, Net Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Reimbursement Agreement expense $ 39 $ 38 $ 111 $ 107 Loss on extinguishment of debt 18 - 41 - Other 1 ( 3 ) ( 22 ) ( 1 ) $ 58 $ 35 $ 130 $ 106 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Oct. 02, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 9. Earnings (Loss) Per Share The following table sets forth the computation of basic and diluted earnings per share (in millions except shares in thousands and per share data): Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Net income (loss) $ 68 $ 75 $ 175 $ ( 22 ) Shares used in computing basic earnings per share 144,284 123,421 143,865 123,194 Effect of dilutive securities: Dilutive effect of common stock equivalents 4,275 1,814 4,395 - Shares used in computing diluted earnings per share 148,559 125,235 148,260 123,194 Earnings (loss) per share: Basic $ 0.47 $ 0.61 $ 1.22 $ ( 0.18 ) Diluted $ 0.46 $ 0.60 $ 1.18 $ ( 0.18 ) Diluted earnings per share is computed based upon the weighted average number of common shares outstanding for the period plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of the Company’s common stock for the three and nine months ended October 2, 2021 and September 26, 2020 . In periods where the Company has a net loss, no dilutive common shares are included in the calculation for diluted shares as they are considered anti-dilutive. For the three and nine months ended October 2, 2021 , average options and other rights to purchase approximately 0.2 million shares of common stock were outstanding and anti-dilutive, and therefore excluded from the computation of diluted earnings per common share. In addition, an average of approximately 0.8 million and 0.7 million shares of performance-based unit awards are excluded from the computation of diluted earnings per common share for the three and nine months ended October 2, 2021 as the contingency has not been satisfied. For the three and nine months ended September 26, 2020 , average options and other rights to purchase approximately 1.1 million and 3.6 million shares of common stock, respectively, were outstanding and anti-dilutive, and therefore excluded from the computation of diluted income per common share. An average of approximately 0.8 million and 0.6 million shares of performance-based unit awards are excluded from the computation of diluted earnings per common share for the three and nine months ended September 26, 2020 , as the contingency has not been satisfied. |
Inventories Net
Inventories Net | 9 Months Ended |
Oct. 02, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories Net | Note 10. Inventories—Net October 2, 2021 December 31, 2020 Raw materials $ 161 $ 127 Work in process 18 19 Finished products 531 526 $ 710 $ 672 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Oct. 02, 2021 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | Note 11. Accrued Liabilities October 2, 2021 December 31, 2020 Obligations payable under Indemnification Agreements $ 140 $ 140 Taxes payable 55 62 Compensation, benefit and other employee-related 105 105 Customer rebate reserve 73 91 Litigation reserve 55 3 Restructuring reserve 10 24 Other 179 170 $ 617 $ 595 Refer to Note 12. Commitments and Contingencies for further details on Obligations payable under Indemnification Agreements. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 02, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Environmental Matters The Company is subject to various federal, state, local, and foreign government requirements relating to the protection of the environment and accrues costs related to environmental matters when it is probable that it has incurred a liability related to a contaminated site and the amount can be reasonably estimated. Environmental-related expenses for sites owned and operated by Resideo are presented within Cost of goods sold for operating sites. For the three and nine months ended October 2, 2021 and September 26, 2020, environmental expenses related to these operating sites were not material. Liabilities for environmental costs were $ 22 million as of October 2, 2021 and December 31, 2020. The Company does not currently possess sufficient information to reasonably estimate the amounts of environmental liabilities to be recorded upon future completion of studies, litigation or settlements, and neither the timing nor the amount of the ultimate costs associated with environmental matters can be determined although they could be material to the Company’s unaudited consolidated results of operations and operating cash flows in the periods recognized or paid. Obligations Payable Under Indemnification Agreements The indemnification and reimbursement agreement (the “Reimbursement Agreement”) and the tax matters agreement (the “Tax Matters Agreement”) (collectively, the “Indemnification Agreements”) are described below. Reimbursement Agreement On October 29, 2018, in connection with the Spin-Off, the Company entered into the Reimbursement Agreement with Honeywell pursuant to which the Company has an obligation to make cash payments to Honeywell in amounts equal to 90 % of payments for certain Honeywell environmental-liability payments, which include amounts billed (“payments”), less 90 % of Honeywell’s net insurance receipts relating to such liabilities, and less 90 % of the net proceeds received by Honeywell in connection with (i) affirmative claims relating to such liabilities, (ii) contributions by other parties relating to such liabilities and (iii) certain property sales (the “recoveries”). The amount payable by the Company in respect of such liabilities arising in respect of any given year is subject to a cap of $ 140 million. See Note 19. Commitments and Contingencies in the Company’s 2020 Annual Report on Form 10-K for further discussion. The following table summarizes information concerning the Company’s Reimbursement Agreement liabilities: Nine Months Ended October 2, September 26, Beginning balance $ 591 $ 585 Accruals for indemnification liabilities deemed probable and reasonably estimable 111 107 Indemnification payment ( 105 ) ( 70 ) Ending balance (1) $ 597 $ 622 (1) Reimbursement Agreement liabilities deemed probable and reasonably estimable, however, it is possible the Company could pay $ 140 million per year (exclusive of any late payment fees up to 5 % per annum) until the earlier of (1) December 31, 2043; or (2) December 31 of the third consecutive year during which the annual reimbursement obligation (including in respect of deferred payment amounts) has been less than $ 25 million. For the three and nine months ended October 2, 2021, net expenses related to the Reimbursement Agreement were $ 39 million and $ 111 million, respectively, and for the three and nine months ended September 26, 2020 , net expenses related to the Reimbursement Agreement were $ 38 million and $ 107 million, respectively, and are recorded in Other expense, net. Reimbursement Agreement liabilities are included in the following balance sheet accounts: October 2, 2021 December 31, 2020 Accrued liabilities $ 140 $ 140 Obligations payable under Indemnification Agreements 457 451 $ 597 $ 591 The Company does not currently possess sufficient information to reasonably estimate the amounts of indemnification liabilities to be recorded upon future completion of studies, litigation or settlements, and neither the timing nor the amount of the ultimate costs associated with such indemnification liability payments can be determined although they could be material to the Company’s unaudited consolidated results of operations and operating cash flows in the periods recognized or paid. Tax Matters Agreement In connection with the Spin-Off, the Company entered into the Tax Matters Agreement with Honeywell pursuant to which it is responsible and will indemnify Honeywell for certain taxes, including certain income taxes, sales taxes, VAT and payroll taxes, relating to the business for all periods, including periods prior to the consummation of the Spin-Off. As of October 2, 2021 and December 31, 2020, the Company had an indemnity liability owed to Honeywell for future tax payments of $ 130 million and $ 139 million, respectively, which is included in Obligations payable under Indemnification Agreements. Trademark Agreement In connection with the Spin-Off, the Company and Honeywell entered into a 40 -year Trademark License Agreement (the “Trademark Agreement”) that authorizes the Company’s use of certain licensed trademarks in the operation of Resideo’s business for the advertising, sale, and distribution of certain licensed products. In exchange, the Company pays a royalty fee of 1.5 % on net revenue to Honeywell related to such licensed products which is recorded in Selling, general and administrative expense on the unaudited Consolidated Interim Statements of Operations. For the three and nine months ended October 2, 2021, royalty fees were $ 5 million and $ 14 million, respectively. For the three and nine months ended September 26, 2020 , royalty fees were $ 7 million and $ 18 million, respectively. Other Matters The Company is subject to lawsuits, investigations, and disputes arising out of the conduct of its business, including matters relating to commercial transactions, government contracts, product liability, prior acquisitions and divestitures, employee matters, intellectual property, and environmental, health, and safety matters. The Company recognizes a liability for any contingency that is probable of occurrence and reasonably estimable. The Company continually assesses the likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts. No such matters are material to the Company’s unaudited financial statements. The Company, the Company’s former CEO Michael Nefkens, the Company’s former CFO Joseph Ragan, and the Company’s former CIO Niccolo de Masi are named defendants of a class action securities suit in the U.S. District Court for the District of Minnesota styled In re Resideo Technologies, Inc. Securities Litigation , 19-cv-02863 (the “Securities Litigation”). The defendants filed a motion to dismiss the complaint on July 10, 2020. On March 30, 2021, United States District Judge Wilhelmina M. Wright issued an order and decision denying the motion to dismiss. On April 13, 2021, the Defendants filed an answer in the Securities Litigation. On July 30, 2021, the Company executed a term sheet with plaintiffs’ representatives setting forth an agreement in principle to settle the claims alleged in the complaint, as amended. The total amount to be paid in settlement of the claims as set forth in the agreement in principle is $ 55 million. Insurance recoveries of approximately $ 39 million are expected related to the settlement. The claim settlement payment and related insurance recoveries are recorded in Accrued liabilities and Other current assets, respectively. The net expense of $ 16 million from the claim settlement and related insurance recoveries is recorded in Selling, general and administrative expenses. On August 18, 2021 the Company and plaintiffs’ representative executed a definitive Stipulation and Agreement of Settlement reflecting the terms of the agreement in principle and other customary terms and conditions (the “Settlement”). That same day, on August 18, 2021, the plaintiffs’ representatives filed a motion with the Court seeking preliminary approval of the Settlement. The motion for preliminary approval was deemed fully submitted by the Court on September 14, 2021. On October 21, 2021, the Court granted preliminary approval of the Settlement and scheduled the Settlement hearing for January 27, 2022. The Company intends to vigorously pursue approval of the Settlement, but there can be no assurance that court approval will be granted. Certain current or former directors and officers of the Company are defendants in a consolidated derivative action pending in the District Court for the District of Delaware under the caption In re Resideo Technologies, Inc. Derivative Litigation, 20-cv-00915 (the “Federal Derivative Action”), which has been stayed by agreement of the parties. On September 21, 2021, the parties filed a stipulation requesting the Federal Derivative Action be transferred to the District of Minnesota, where the Securities Litigation is pending, to reserve judicial resources and for the convenience of the parties. The Court ordered the transfer of the Federal Derivative Action on September 23, 2021. The Company intends to defend this action vigorously, but there can be no assurance that the defense will be successful. On September 1, 2021, an additional shareholder derivative complaint was filed by Riviera Beach, part of the leadership group in the Federal Derivative Action, and City of Hialeah Employees Retirement System against certain current or former directors and officers of the Company in the District of Minnesota, alleging substantially the same facts and making substantially the same claims against the same defendants as in the Federal Derivative Action, and additionally referencing board materials obtained through a demand made pursuant to Section 220 of the Delaware Code Title 8. The parties intend to seek consolidation of that action, captioned Riviera Beach Police Pension Fund v. Nefkens, 21-cv-1965 , and the Federal Derivative Action in the Minnesota Court. The Company intends to defend this action vigorously, but there can be no assurance that the defense will be successful. On June 25, 2021, the Bud & Sue Frashier Family Trust U/A DTD 05/05/98, filed a shareholder derivative complaint against certain current or former directors and officers of the Company in the Court of Chancery of the State of Delaware, captioned Bud & Sue Frashier Trust U/A DTD 05/05/98 v. Fradin , 2021-0556 (“Delaware Chancery Derivative Action”). The Delaware Chancery Derivative Action remains stayed by agreement of the parties. The Company intends to defend this action vigorously, but there can be no assurance that the defense will be successful. On August 20, 2021, Alice Burstein, a purported shareholder of the Company, sent a letter demanding that the Company’s Board of Directors undertake an independent internal investigation into certain current or former directors of the Company for violations of state and/or federal law related to the same conduct alleged in the Securities Litigation and derivative complaints (the “Demand Letter”). On September 13, 2021, the Company responded to the Demand Letter stating that the Board had reviewed and considered the demand and determined the best interests of the shareholders and the Company would be served by deferring an investigation pending adjudication or resolution of the outstanding derivative actions. See Note 19. Commitments and Contingencies of Notes to Consolidated and Combined Financial Statements in the Company’s 2020 Annual Report on Form 10-K for further discussion of these matters. Warranties and Guarantees In the normal course of business, the Company issues product warranties and product performance guarantees. It accrues for the estimated cost of product warranties and product performance guarantees based on contract terms and historical experience at the time of sale. Adjustments to initial obligations for warranties and guarantees are made as changes to the obligations become reasonably estimable. Product warranties and product performance guarantees are included in Accrued liabilities. The following table summarizes information concerning recorded obligations for product warranties and product performance guarantees: Nine Months Ended October 2, September 26, Beginning of period $ 22 $ 25 Accruals for warranties/guarantees issued during the year 12 13 Adjustment of pre-existing warranties/guarantees ( 1 ) - Settlement of warranty/guarantee claims ( 13 ) ( 12 ) End of period $ 20 $ 26 |
Long-term Debt and Credit Agree
Long-term Debt and Credit Agreement | 9 Months Ended |
Oct. 02, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Credit Agreement | Note 13. Long-term Debt and Credit Agreement The Company’s debt as of October 2, 2021 and December 31, 2020 consisted of the following: October 2, 2021 December 31, 2020 4.000 % notes due 2029 $ 300 $ - 6.125 % notes due 2026 - 400 Five-year variable rate term loan A due 2023 - 315 Seven-year variable rate term loan B due 2025 - 465 Seven-year variable rate term loan B due 2028 945 - Unamortized deferred financing costs ( 13 ) ( 18 ) Total outstanding indebtedness 1,232 1,162 Less: Amounts expected to be paid within one year 10 7 Total long-term debt due after one year $ 1,222 $ 1,155 On February 12, 2021, the Company entered into an amended and restated credit agreement (the “A&R Credit Agreement”). The A&R Credit Agreement provides for (i) a seven-year senior secured term B loan facility in an aggregate principal amount of $ 950 million (the “A&R Term B Facility”) and (ii) a five-year senior secured revolving credit facility in an aggregate principal amount of $ 500 million (the “A&R Revolving Credit Facility” and, together with the A&R Term B Facility, the “A&R Senior Credit Facilities”). The A&R Credit Agreement replaces the five-year variable rate term loan A due 2023 , the seven-year variable rate term loan B due 2025 and the five-year senior secured first-lien revolving credit facility. In addition to paying interest on outstanding borrowings under the A&R Revolving Credit Facility, the Company is required to pay a quarterly commitment fee based on the unused portion of the A&R Revolving Credit Facility. Borrowings under the A&R Credit Agreement can be prepaid at the Company’s option without premium or penalty other than a 1.00 % prepayment premium that may be payable in connection with certain repricing transactions within a certain period of time after the closing date. Up to $ 75 million may be utilized under the A&R Revolving Credit Facility for the issuance of letters of credit to the Company or any of the Company’s subsidiaries. The A&R Senior Credit Facilities are subject to an interest rate and interest period which the Company will elect. If the Company chooses to make a base rate borrowing on an overnight basis, the interest rate will be based on the highest of (1) the rate of interest last quoted by The Wall Street Journal as the “prime rate” in the United States, (2) the greater of the federal funds effective rate and the overnight bank funding rate, plus 0.5 % and (3) the one month adjusted LIBOR rate, plus 1.00 % per annum. For the A&R Term Loan B, the applicable LIBOR rate will not be less than 0.50 % per annum. The applicable margin for the A&R Term B Facility is 2.25 % per annum (for LIBOR loans) and 1.25 % per annum (for base rate loans). The applicable margin for the A&R Revolving Credit Facility varies from 2.25 % per annum to 1.75 % per annum (for LIBOR loans) and 1.25 % to 0.75 % per annum (for base rate loans) based on the Company’s leverage ratio. The A&R Credit Agreement contains certain financial maintenance covenants and affirmative and negative covenants customary for financings of this type. All obligations under the A&R Senior Credit Facilities are unconditionally guaranteed jointly and severally by the Company and substantially all of the direct and indirect wholly owned subsidiaries of the Company that are organized under the laws of the United States (collectively, the “Guarantors”). The A&R Senior Credit Facilities are secured on a first priority basis by the equity interests of each direct subsidiary of the Company, as well as the tangible and intangible personal property and material real property of the Company and each of the Guarantors. As of October 2, 2021 , there were no borrowings and no letters of credit issued under the Revolving Credit Facility. At October 2, 2021 the interest rate for the A&R Term B Facility was 2.75 % On February 16, 2021 the Company redeemed $ 140 million in principal amount of the 6.125 % senior unsecured notes (the “Senior Notes due 2026 ”) at a redemption price of 106.125 % of par plus accrued interest. As a result of the Senior Notes due 2026 redemption and the execution of the A&R Credit Agreement, debt extinguishment costs of $ 23 million were incurred during the three months ended April 3, 2021 and were recorded in Other expense, net. On August 26, 2021, the Company redeemed the remaining $ 260 million in principal amount of the Senior Notes due 2026 at a redemption price of 105.594 % of par plus accrued interest. As a result, debt extinguishment costs of $ 18 million were incurred during the three months ended October 2, 2021. On August 26, 2021, the Company issued $ 300 million in principal amount 4 % senior unsecured notes due in 2029 (the “Senior Notes due 2029”). The Senior Notes due 2029 are senior unsecured obligations of Resideo guaranteed by Resideo’s existing and future domestic subsidiaries and rank equally with all of Resideo’s senior unsecured debt and senior to all of Resideo’s subordinated debt. Before September 1, 2024 the Company may, at its option, redeem the Senior Notes due 2029 in whole or in part at a redemption price equal to 100 % of the principal amount of the Senior Notes due 2029 redeemed, plus accrued and unpaid interest, if any, plus a “make-whole” premium. On or after September 1, 2024 Resideo may, at its option, redeem the Senior Notes due 2029 in whole or in part at a redemption price equal to 100 % of the principal amount of Senior Notes due 2029 plus accrued and unpaid interest, plus a fixed redemption percentage on the principal amount of the Senior Notes due 2029 redeemed of (i) 102 % if redeemed during the twelve-month period beginning on September 1, 2024 (ii) 101 % if redeemed during the twelve-month period beginning on September 1, 2025 , (iii) 100 % if redeemed on or after November 1, 2026 . The Senior Notes due 2029 limit the Company and its restricted subsidiaries’ ability to, among other things, incur additional secured indebtedness and issue preferred stock; enter into certain sale and leaseback transactions; incur liens; and consolidate, merge or sell all or substantially all of their assets. These covenants are subject to a number of limitations and exceptions. Additionally, upon certain events constituting a change of control together with a ratings downgrade, the holders of the Senior Notes due 2029 have the right to require the Company to offer to repurchase the Senior Notes due 2029 at a purchase price equal to 101 % of their principal amount, plus accrued and unpaid interest, to (but not including) the date of purchase. The Company incurred approximately $ 4 million in debt issuance costs related to the Senior Notes due 2029. The debt issuance costs associated with the Senior Notes due 2029 are recorded as a reduction of the principal balance of the debt. All issuance costs are being amortized through interest expense for the term of the Senior Notes due 2029. The Company assessed the amounts recorded under the A&R Term B Facility, the Senior Notes due 2029, and the Revolving Credit Facility. The Company determined that the Revolving Credit Facility approximated fair value. The A&R Term B Facility and the Senior Notes due 2029’s fair values are approximately $ 948 million and $ 295 million, respectively. The fair values of the debt are based on the quoted inactive prices and are therefore classified as Level 2 within the valuation hierarchy. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Oct. 02, 2021 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Note 14. Derivative Instruments The Company uses interest rate swap agreements to manage exposure to interest rate risks. The Company does not use interest rate swap agreements for speculative or trading purposes. The gain or loss on the interest rate swaps that qualify as derivatives is recorded in Accumulated other comprehensive loss and is subsequently recognized as Interest expense in the Interim Consolidated Statements of Operations when the hedged exposure affects earnings. If the related debt or the interest rate swap is terminated prior to maturity, the fair value of the interest rate swap recorded in Accumulated other comprehensive loss may be recognized in the Consolidated Interim Statements of Operations based on an assessment of the agreements at the time of termination. In March 2021, the Company entered into eight interest rate swap agreements (the “Swap Agreements”) with several financial institutions for a combined notional value of $ 560 million. The effect of the Swap Agreements is to convert a portion of the Company’s variable interest rate obligations based on three-month LIBOR with a minimum rate of 0.50 % per annum to a base fixed weighted average rate of 0.9289 % over terms ranging from three to five years . The Swap Agreements are adjusted to fair value on a quarterly basis. The estimated fair value is based on Level 2 inputs primarily including the forward LIBOR curve available to swap dealers. Contract gains recognized in other comprehensive income (loss) and amounts reclassified from Accumulated other comprehensive loss into earnings were not material for any of the periods presented. The fair value of the Swap Agreements at October 2, 2021 was not material. Amounts expected to be reclassified into earnings in the next 12 months were not material as of October 2, 2021. |
Pension
Pension | 9 Months Ended |
Oct. 02, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension | Note 15. Pension The Company sponsors multiple funded and unfunded U.S. and non-U.S. defined benefit pension plans. Pension benefits for many of its U.S. employees are provided through non-contributory, qualified and non-qualified defined benefit plans. It also sponsors defined benefit pension plans which cover non-U.S. employees who are not U.S. citizens, in certain jurisdictions, principally Germany, Austria, Belgium, France, India, Switzerland, and the Netherlands. The pension obligations as of October 2, 2021 and December 31, 2020 were $ 166 million and $ 168 million, respectively, and are included in Other liabilities in the unaudited Consolidated Interim Balance Sheets. Net periodic benefit cost recognized in Comprehensive income (loss) for the three and nine months ended October 2, 2021 is $ 2 million and $ 7 million, respectively. Net periodic benefit cost recognized in Comprehensive income (loss) for the three and nine months ended September 26, 2020 was $ 2 million and $ 6 million, respectively. The components of net periodic benefit costs other than the service cost are included in Other expense, net in the unaudited Consolidated Interim Statements of Operations for the three and nine months ended October 2, 2021 and September 26, 2020 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements —The Company considers the applicability and impact of all recent accounting standards updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s consolidated financial position or results of operations. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which is optional guidance related to reference rate reform that provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance along with its subsequent clarifications, is effective from March 12, 2020 through December 31, 2022 and is applicable for the Company’s A&R Senior Credit Facilities and Swap Agreements, which use LIBOR as a reference rate. Refer to Note 13. Long-term Debt and Credit Agreement for further details on the Company’s A&R Senior Credit Facilities and Note 14. Derivative Instruments for further details on the Company's Swap Agreements. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregated Revenue | Revenues by geography and business line are as follows: Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Comfort $ 303 $ 297 $ 877 $ 725 Security 172 142 512 379 Residential Thermal Solutions 156 133 446 341 Products & Solutions 631 572 1,835 1,445 U.S. and Canada 727 650 2,125 1,758 EMEA (1) 128 129 402 338 APAC (2) 10 11 30 29 ADI Global Distribution 865 790 2,557 2,125 Net revenue $ 1,496 $ 1,362 $ 4,392 $ 3,570 (1) EMEA represents Europe, the Middle East and Africa. (2) APAC represents Asia and Pacific countries. |
Segment Financial Data (Tables)
Segment Financial Data (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information is consistent with how management reviews the businesses, makes investing and resource allocation decisions, and assesses operating performance. Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Revenue Total Products & Solutions revenue $ 726 $ 674 $ 2,121 $ 1,715 Less: Intersegment revenue 95 102 286 270 External Products & Solutions revenue 631 572 1,835 1,445 External ADI Global Distribution revenue 865 790 2,557 2,125 Total revenue $ 1,496 $ 1,362 $ 4,392 $ 3,570 Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Operating profit (loss) Products & Solutions $ 157 $ 141 $ 416 $ 241 ADI Global Distribution 73 56 198 135 Corporate ( 63 ) ( 66 ) ( 196 ) ( 217 ) Total $ 167 $ 131 $ 418 $ 159 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Leases [Abstract] | |
Schedule of Operating Lease Costs | The Company’s operating lease costs for the three and nine months ended October 2, 2021 and September 26, 2020 consisted of the following: Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Cost of goods sold $ 5 $ 5 $ 13 $ 13 Selling, general and administrative 12 13 34 33 Total operating lease costs $ 17 $ 18 $ 47 $ 46 |
Summary of Lease Recognized Related to Operating Leases | The Company recognized the following related to its operating leases: Financial At October 2, At December 31, Operating right-of-use assets Other assets $ 134 $ 133 Operating lease liabilities - current Accrued liabilities $ 33 $ 33 Operating lease liabilities - noncurrent Other liabilities $ 112 $ 107 |
Maturities of Operating Lease Liabilities | Maturities of the Company’s operating lease liabilities were as follows: At October 2, 2021 $ 10 2022 39 2023 34 2024 23 2025 17 Thereafter 46 Total lease payments 169 Less: imputed interest 24 Present value of operating lease liabilities $ 145 Weighted-average remaining lease term (years) 5.75 Weighted-average incremental borrowing rate 5.39 % |
Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to the Company’s operating leases was as follows: Nine Months Ended October 2, 2021 September 26, 2020 Operating cash outflows $ 25 $ 22 Operating right-of-use assets obtained in exchange for operating lease liabilities $ 31 $ 22 |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Other Income And Expenses [Abstract] | |
Summary of Other Expense Net | Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Reimbursement Agreement expense $ 39 $ 38 $ 111 $ 107 Loss on extinguishment of debt 18 - 41 - Other 1 ( 3 ) ( 22 ) ( 1 ) $ 58 $ 35 $ 130 $ 106 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (in millions except shares in thousands and per share data): Three Months Ended Nine Months Ended October 2, September 26, October 2, September 26, Net income (loss) $ 68 $ 75 $ 175 $ ( 22 ) Shares used in computing basic earnings per share 144,284 123,421 143,865 123,194 Effect of dilutive securities: Dilutive effect of common stock equivalents 4,275 1,814 4,395 - Shares used in computing diluted earnings per share 148,559 125,235 148,260 123,194 Earnings (loss) per share: Basic $ 0.47 $ 0.61 $ 1.22 $ ( 0.18 ) Diluted $ 0.46 $ 0.60 $ 1.18 $ ( 0.18 ) |
Inventories Net (Tables)
Inventories Net (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | October 2, 2021 December 31, 2020 Raw materials $ 161 $ 127 Work in process 18 19 Finished products 531 526 $ 710 $ 672 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Payables And Accruals [Abstract] | |
Summary of Accrued Liabilities | October 2, 2021 December 31, 2020 Obligations payable under Indemnification Agreements $ 140 $ 140 Taxes payable 55 62 Compensation, benefit and other employee-related 105 105 Customer rebate reserve 73 91 Litigation reserve 55 3 Restructuring reserve 10 24 Other 179 170 $ 617 $ 595 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Loss Contingencies [Line Items] | |
Summary of Recorded Obligations for Product Warranties and Product Performance Guarantee | The following table summarizes information concerning recorded obligations for product warranties and product performance guarantees: Nine Months Ended October 2, September 26, Beginning of period $ 22 $ 25 Accruals for warranties/guarantees issued during the year 12 13 Adjustment of pre-existing warranties/guarantees ( 1 ) - Settlement of warranty/guarantee claims ( 13 ) ( 12 ) End of period $ 20 $ 26 |
Honeywell | |
Loss Contingencies [Line Items] | |
Summary of Reimbursement Agreement Liabilities | The following table summarizes information concerning the Company’s Reimbursement Agreement liabilities: Nine Months Ended October 2, September 26, Beginning balance $ 591 $ 585 Accruals for indemnification liabilities deemed probable and reasonably estimable 111 107 Indemnification payment ( 105 ) ( 70 ) Ending balance (1) $ 597 $ 622 (1) Reimbursement Agreement liabilities deemed probable and reasonably estimable, however, it is possible the Company could pay $ 140 million per year (exclusive of any late payment fees up to 5 % per annum) until the earlier of (1) December 31, 2043; or (2) December 31 of the third consecutive year during which the annual reimbursement obligation (including in respect of deferred payment amounts) has been less than $ 25 million. |
Summary of Reimbursement Agreement Liabilities Included in Balance Sheet Accounts | Reimbursement Agreement liabilities are included in the following balance sheet accounts: October 2, 2021 December 31, 2020 Accrued liabilities $ 140 $ 140 Obligations payable under Indemnification Agreements 457 451 $ 597 $ 591 |
Long-term Debt and Credit Agr_2
Long-term Debt and Credit Agreement (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s debt as of October 2, 2021 and December 31, 2020 consisted of the following: October 2, 2021 December 31, 2020 4.000 % notes due 2029 $ 300 $ - 6.125 % notes due 2026 - 400 Five-year variable rate term loan A due 2023 - 315 Seven-year variable rate term loan B due 2025 - 465 Seven-year variable rate term loan B due 2028 945 - Unamortized deferred financing costs ( 13 ) ( 18 ) Total outstanding indebtedness 1,232 1,162 Less: Amounts expected to be paid within one year 10 7 Total long-term debt due after one year $ 1,222 $ 1,155 |
Organization, Operations and Ba
Organization, Operations and Basis of Presentation - Additional Information (Details) | 9 Months Ended |
Oct. 02, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Date of business spin-off | Oct. 29, 2018 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | ||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | $ 1,496 | $ 1,362 | $ 4,392 | $ 3,570 | |
Products & Solutions | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 631 | 572 | 1,835 | 1,445 | |
Products & Solutions | Comfort | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 303 | 297 | 877 | 725 | |
Products & Solutions | Security | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 172 | 142 | 512 | 379 | |
Products & Solutions | Residential Thermal Solutions | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 156 | 133 | 446 | 341 | |
ADI Global Distribution | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 865 | 790 | 2,557 | 2,125 | |
ADI Global Distribution | U.S. and Canada | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 727 | 650 | 2,125 | 1,758 | |
ADI Global Distribution | EMEA | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | [1] | 128 | 129 | 402 | 338 |
ADI Global Distribution | APAC | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | [2] | $ 10 | $ 11 | $ 30 | $ 29 |
[1] | EMEA represents Europe, the Middle East and Africa. | ||||
[2] | APAC represents Asia and Pacific countries. |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) | Oct. 02, 2021 |
Revenue From Contract With Customer [Abstract] | |
Percentage of revenue satisfied over time | 3.00% |
Segment Financial Data - Additi
Segment Financial Data - Additional Information (Details) | 9 Months Ended |
Oct. 02, 2021Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Financial Data - Schedu
Segment Financial Data - Schedule of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Revenue | ||||
Revenue | $ 1,496 | $ 1,362 | $ 4,392 | $ 3,570 |
Operating profit (loss) | ||||
Total | 167 | 131 | 418 | 159 |
Products & Solutions | ||||
Revenue | ||||
Revenue | 631 | 572 | 1,835 | 1,445 |
Operating profit (loss) | ||||
Total | 157 | 141 | 416 | 241 |
ADI Global Distribution | ||||
Revenue | ||||
Revenue | 865 | 790 | 2,557 | 2,125 |
Operating profit (loss) | ||||
Total | 73 | 56 | 198 | 135 |
Corporate | ||||
Operating profit (loss) | ||||
Total | (63) | (66) | (196) | (217) |
Operating Segments | Products & Solutions | ||||
Revenue | ||||
Revenue | 726 | 674 | 2,121 | 1,715 |
Intersegment Revenue Eliminations | Products & Solutions | ||||
Revenue | ||||
Revenue | $ (95) | $ (102) | $ (286) | $ (270) |
Stock-Based Compensation Plans
Stock-Based Compensation Plans - Additional Information (Details) - 2018 Stock Incentive Plan | 9 Months Ended |
Oct. 02, 2021$ / sharesshares | |
Market-Based Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average grant date fair value | $ 42.89 |
Market-Based Restricted Stock Units | Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards granted | shares | 500,227 |
Service-based Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average grant date fair value | $ 27.41 |
Service-based Restricted Stock Units | Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards granted | shares | 1,125,136 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price stock options granted | $ 25.48 |
Weighted average grant date fair value per share | $ 7.69 |
Stock Options | Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of stock options granted | shares | 150,000 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Lessee Lease Description [Line Items] | ||||
Total operating lease costs | $ 17 | $ 18 | $ 47 | $ 46 |
Cost of Goods Sold | ||||
Lessee Lease Description [Line Items] | ||||
Total operating lease costs | 5 | 5 | 13 | 13 |
Selling, General and Administrative Expenses | ||||
Lessee Lease Description [Line Items] | ||||
Total operating lease costs | $ 12 | $ 13 | $ 34 | $ 33 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Leases [Abstract] | ||||
Variable lease costs | $ 5 | $ 5 | $ 13 | $ 12 |
Leases - Summary of Lease Recog
Leases - Summary of Lease Recognized Related to Operating Leases (Details) - USD ($) $ in Millions | Oct. 02, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating right-of-use assets | $ 134 | $ 133 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssets | us-gaap:OtherAssets |
Operating lease liabilities - current | $ 33 | $ 33 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities | Accrued liabilities |
Operating lease liabilities - noncurrent | $ 112 | $ 107 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Millions | Oct. 02, 2021USD ($) |
Leases [Abstract] | |
2021 | $ 10 |
2022 | 39 |
2023 | 34 |
2024 | 23 |
2025 | 17 |
Thereafter | 46 |
Total lease payments | 169 |
Less: imputed interest | 24 |
Present value of operating lease liabilities | $ 145 |
Weighted-average remaining lease term (years) | 5 years 9 months |
Weighted-average incremental borrowing rate | 5.39% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Leases [Abstract] | ||
Operating cash outflows | $ 25 | $ 22 |
Operating right-of-use assets obtained in exchange for operating lease liabilities | $ 31 | $ 22 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Tax expense | $ 29 | $ 7 | $ 76 | $ 26 |
Interim period tax expense (benefit) | 32 | 80 | ||
Tax benefit for changes in estimates related to prior years | $ 3 | $ 4 |
Other Expense, Net - Summary of
Other Expense, Net - Summary of Other Expense Net (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Other Income And Expenses [Abstract] | ||||
Reimbursement Agreement expense | $ 39 | $ 38 | $ 111 | $ 107 |
Loss on extinguishment of debt | 18 | 41 | ||
Other | 1 | (3) | (22) | (1) |
Other expense net | $ 58 | $ 35 | $ 130 | $ 106 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ 68 | $ 75 | $ 175 | $ (22) |
Shares used in computing basic earnings per share | 144,284 | 123,421 | 143,865 | 123,194 |
Effect of dilutive securities: | ||||
Dilutive effect of common stock equivalents | 4,275 | 1,814 | 4,395 | |
Shares used in computing diluted earnings per share | 148,559 | 125,235 | 148,260 | 123,194 |
Earnings (loss) per share: | ||||
Basic | $ 0.47 | $ 0.61 | $ 1.22 | $ (0.18) |
Diluted | $ 0.46 | $ 0.60 | $ 1.18 | $ (0.18) |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Earnings Per Share [Line Items] | ||||
Purchase of outstanding common stock were anti-dilutive | 0 | 0 | 0 | 0 |
Options and Other Rights | ||||
Earnings Per Share [Line Items] | ||||
Purchase of outstanding common stock were anti-dilutive | 200 | 1,100 | 200 | 3,600 |
Performance Based Unit Awards | ||||
Earnings Per Share [Line Items] | ||||
Purchase of outstanding common stock were anti-dilutive | 800 | 800 | 700 | 600 |
Inventories Net (Details)
Inventories Net (Details) - USD ($) $ in Millions | Oct. 02, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 161 | $ 127 |
Work in process | 18 | 19 |
Finished products | 531 | 526 |
Inventory, Net | $ 710 | $ 672 |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Oct. 02, 2021 | Dec. 31, 2020 |
Accrued Liabilities, Current [Abstract] | ||
Obligations payable under Indemnification Agreements | $ 140 | $ 140 |
Taxes payable | 55 | 62 |
Compensation, benefit and other employee-related | 105 | 105 |
Customer rebate reserve | 73 | 91 |
Litigation reserve | 55 | 3 |
Restructuring reserve | 10 | 24 |
Other | 179 | 170 |
Total accrued liabilities | $ 617 | $ 595 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Jul. 30, 2021 | Oct. 29, 2018 | Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Dec. 31, 2020 |
Loss Contingencies [Line Items] | |||||||
Environmental liabilities | $ 22,000,000 | $ 22,000,000 | $ 22,000,000 | ||||
Trademark license agreement | 40 years | ||||||
Settlement to be paid | $ 55,000,000 | ||||||
Insurance recoveries | 39,000,000 | ||||||
Other Expense, Net | |||||||
Loss Contingencies [Line Items] | |||||||
Reimbursement agreement net expenses | 39,000,000 | $ 38,000,000 | $ 111,000,000 | $ 107,000,000 | |||
Selling, General and Administrative Expenses | |||||||
Loss Contingencies [Line Items] | |||||||
Claim settlement expense | $ 16,000,000 | ||||||
Indemnification Agreement | |||||||
Loss Contingencies [Line Items] | |||||||
Indemnification agreement description | On October 29, 2018, in connection with the Spin-Off, the Company entered into the Reimbursement Agreement with Honeywell pursuant to which the Company has an obligation to make cash payments to Honeywell in amounts equal to 90% of payments for certain Honeywell environmental-liability payments, which include amounts billed (“payments”), less 90% of Honeywell’s net insurance receipts relating to such liabilities, and less 90% of the net proceeds received by Honeywell in connection with (i) affirmative claims relating to such liabilities, (ii) contributions by other parties relating to such liabilities and (iii) certain property sales (the “recoveries”). The amount payable by the Company in respect of such liabilities arising in respect of any given year is subject to a cap of $140 million. | ||||||
Indemnification Agreement | Maximum | |||||||
Loss Contingencies [Line Items] | |||||||
Indemnity liability annual cap | $ 140,000,000 | ||||||
Tax Matters Agreement | |||||||
Loss Contingencies [Line Items] | |||||||
Indemnified amount | 130,000,000 | $ 130,000,000 | $ 139,000,000 | ||||
Honeywell | |||||||
Loss Contingencies [Line Items] | |||||||
Indemnity liability annual cap | $ 140,000,000 | 140,000,000 | $ 140,000,000 | 140,000,000 | |||
Honeywell | Trademark Agreement | |||||||
Loss Contingencies [Line Items] | |||||||
Royalty fee on net revenue | 1.50% | 1.50% | |||||
Royalty expense | $ 5,000,000 | $ 7,000,000 | $ 14,000,000 | $ 18,000,000 | |||
Honeywell | Indemnification Agreement | |||||||
Loss Contingencies [Line Items] | |||||||
Indemnification payable percentage of payments | 90.00% | ||||||
Indemnification payable percentage of net insurance receipts | 90.00% | ||||||
Indemnification payable percentage of net proceeds received | 90.00% |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Reimbursement Agreement Liabilities (Details) - Honeywell - USD ($) $ in Millions | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Accrual for Reimbursement Agreement | ||
Beginning balance | $ 591 | $ 585 |
Accruals for indemnification liabilities deemed probable and reasonably estimable | 111 | 107 |
Indemnification payment | (105) | (70) |
Ending balance | $ 597 | $ 622 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Reimbursement Agreement Liabilities (Parenthetical) (Details) - Honeywell - USD ($) | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Loss Contingencies [Line Items] | ||
Indemnity liability annual cap | $ 140,000,000 | $ 140,000,000 |
Maximum | ||
Loss Contingencies [Line Items] | ||
Indemnification payable, late payment fee percentage | 5.00% | 5.00% |
Maximum annual reimbursement obligation amount | $ 25,000,000 | $ 25,000,000 |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Reimbursement Agreement Liabilities Included in Balance Sheet Accounts (Details) - Honeywell - USD ($) $ in Millions | Oct. 02, 2021 | Dec. 31, 2020 | Sep. 26, 2020 | Dec. 31, 2019 |
Loss Contingency, Classification of Accrual [Abstract] | ||||
Reimbursement Agreement liabilities | $ 597 | $ 591 | $ 622 | $ 585 |
Accrued Liabilities | ||||
Loss Contingency, Classification of Accrual [Abstract] | ||||
Reimbursement agreement current portion | 140 | 140 | ||
Obligations Payable under Indemnification Agreement | ||||
Loss Contingency, Classification of Accrual [Abstract] | ||||
Reimbursement agreement Long Term Portion | $ 457 | $ 451 |
Commitments and Contingencies_5
Commitments and Contingencies - Summary of Recorded Obligations for Product Warranties and Product Performance Guarantee (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Product Warranties and Guarantees [Roll forward] | ||
Beginning of period | $ 22 | $ 25 |
Accruals for warranties/guarantees issued during the year | 12 | 13 |
Adjustment of pre-existing warranties/guarantees | (1) | |
Settlement of warranty/guarantee claims | (13) | (12) |
End of period | $ 20 | $ 26 |
Long-term Debt and Credit Agr_3
Long-term Debt and Credit Agreement - Schedule of Debt (Details) - USD ($) $ in Millions | Oct. 02, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Unamortized deferred financing costs | $ (13) | $ (18) |
Total outstanding indebtedness | 1,232 | 1,162 |
Less: Amounts expected to be paid within one year | 10 | 7 |
Total long-term debt due after one year | 1,222 | 1,155 |
4.000% notes due 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 300 | 0 |
6.125% notes due 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 400 |
Five Year Variable Rate Term Loan A Due 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 315 |
Seven Year Variable Rate Term Loan B Due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 465 |
Seven Year Variable Rate Term Loan B Due 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 945 | $ 0 |
Long-term Debt and Credit Agr_4
Long-term Debt and Credit Agreement - Schedule of Debt (Parenthetical) (Details) | Aug. 26, 2021 | Feb. 16, 2021 | Feb. 12, 2021 | Oct. 02, 2021 |
4.000% notes due 2029 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.00% | 4.00% | ||
Debt instrument maturity year | 2029 | 2029 | ||
6.125% notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.125% | 6.125% | ||
Debt instrument maturity year | 2026 | 2026 | ||
Five Year Variable Rate Term Loan A Due 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument maturity year | 2023 | 2023 | ||
Seven Year Variable Rate Term Loan B Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument maturity year | 2025 | 2025 | ||
Seven Year Variable Rate Term Loan B Due 2028 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument maturity year | 2028 |
Long-term Debt and Credit Agr_5
Long-term Debt and Credit Agreement - Additional Information (Details) - USD ($) $ in Millions | Aug. 26, 2021 | Feb. 16, 2021 | Feb. 12, 2021 | Oct. 02, 2021 | Apr. 03, 2021 | Oct. 02, 2021 |
A&R Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment premium percentage in connection with repricing transactions | 1.00% | |||||
A&R Credit Agreement | Federal Funds Effective Rate | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 0.50% | |||||
A&R Credit Agreement | London Interbank Offered Rate LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 1.00% | |||||
A&R Credit Agreement | A&R Term B Facility | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount issued | $ 950 | |||||
Credit facilities term | 7 years | |||||
Interest rate | 2.75% | 2.75% | ||||
Debt Instrument fair value | $ 948 | $ 948 | ||||
A&R Credit Agreement | A&R Term B Facility | London Interbank Offered Rate LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 2.25% | |||||
A&R Credit Agreement | A&R Term B Facility | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 1.25% | |||||
A&R Credit Agreement | A&R Term B Facility | Minimum | London Interbank Offered Rate LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 0.50% | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount issued | $ 500 | |||||
Credit facilities term | 5 years | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | Maximum | London Interbank Offered Rate LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 2.25% | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | Maximum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 1.25% | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | Minimum | London Interbank Offered Rate LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 1.75% | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | Minimum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 0.75% | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | Letter of Credit | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings from credit facility for issuance of letters of credit | $ 75 | |||||
Five Year Variable Rate Term Loan A Due 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity year | 2023 | 2023 | ||||
Seven Year Variable Rate Term Loan B Due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity year | 2025 | 2025 | ||||
4% notes due 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount issued | $ 300 | |||||
Debt instrument maturity year | 2029 | 2029 | ||||
Interest rate | 4.00% | 4.00% | 4.00% | |||
Debt instrument redemption price percentage | 101.00% | |||||
Debt Instrument fair value | $ 295 | $ 295 | ||||
Debt issuance costs | $ 4 | $ 4 | ||||
4% notes due 2029 | Debt Instrument Redemption Period One | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument redemption price percentage | 100.00% | |||||
4% notes due 2029 | Debt Instrument Redemption Period Two | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument redemption price percentage | 100.00% | |||||
4% notes due 2029 | Debt Instrument Redemption Period Three | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument redemption price percentage | 102.00% | |||||
Debt instrument, redemption period, beginning | Sep. 1, 2024 | |||||
4% notes due 2029 | Debt Instrument Redemption Period Four | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument redemption price percentage | 101.00% | |||||
Debt instrument, redemption period, beginning | Sep. 1, 2025 | |||||
4% notes due 2029 | Debt Instrument Redemption Period Five | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument redemption price percentage | 100.00% | |||||
Debt instrument, redemption period, beginning | Nov. 1, 2026 | |||||
6.125% notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity year | 2026 | 2026 | ||||
Debt instrument principal amount redeemed | $ 260 | $ 140 | ||||
Interest rate | 6.125% | 6.125% | 6.125% | |||
Debt instrument redemption price percentage | 105.594% | 106.125% | ||||
6.125% notes due 2026 | Senior Notes Redemption | ||||||
Debt Instrument [Line Items] | ||||||
Debt extinguishment costs | $ 18 | |||||
6.125% notes due 2026 | Other Expense, Net | Senior Notes Redemption | ||||||
Debt Instrument [Line Items] | ||||||
Debt extinguishment costs | $ 23 | |||||
Senior Credit Facilities | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings from credit facility for issuance of letters of credit | 0 | $ 0 | ||||
Senior Credit Facilities | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings from credit facility for issuance of letters of credit | $ 0 | $ 0 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - Swap Agreements $ in Millions | 1 Months Ended | 9 Months Ended |
Mar. 31, 2021USD ($)Interestrateswap | Oct. 02, 2021 | |
Derivative [Line Items] | ||
Number of interest rate swap | Interestrateswap | 8 | |
Notional value | $ | $ 560 | |
Swap agreement description | The effect of the Swap Agreements is to convert a portion of the Company’s variable interest rate obligations based on three-month LIBOR with a minimum rate of 0.50% per annum to a base fixed weighted average rate of 0.9289% over terms ranging from three to five years. The Swap Agreements are adjusted to fair value on a quarterly basis. | |
Minimum | ||
Derivative [Line Items] | ||
Fixed weighted average rate | 0.50% | |
Derivative term | 3 years | |
Maximum | ||
Derivative [Line Items] | ||
Fixed weighted average rate | 0.9289% | |
Derivative term | 5 years |
Pension - Additional Informatio
Pension - Additional Information (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Pension obligations | $ 166 | $ 166 | $ 168 | ||
Net periodic benefit cost | $ 2 | $ 2 | $ 7 | $ 6 |