Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 11, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
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 | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Common Stock, Shares Outstanding | 122,686,190 | ||
Entity Public Float | $ 0 |
CONSOLIDATED AND COMBINED STATE
CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Income Statement [Abstract] | ||||||
Net revenue | [1] | $ 4,827 | $ 4,519 | $ 4,455 | ||
Cost of goods sold | 3,461 | 3,203 | 3,090 | |||
Gross profit | 1,366 | 1,316 | 1,365 | |||
Selling, general and administrative expenses | 873 | 871 | 870 | |||
Other expense, net | 369 | 279 | 185 | |||
Interest expense | 20 | |||||
Operating and non-operating expenses, net | 1,262 | 1,150 | 1,055 | |||
Income before taxes | 104 | 166 | 310 | |||
Tax (benefit) expense | (301) | 560 | 133 | |||
Net income (loss) | $ 405 | $ (394) | $ 177 | |||
Weighted Average Number of Common Shares Outstanding | ||||||
Basic (in thousands) | 122,499 | 122,499 | 122,499 | |||
Diluted (in thousands) | 122,624 | 122,499 | 122,499 | |||
Earnings (Loss) Per Share | ||||||
Basic net income (loss) per share | $ 3.31 | [2] | $ (3.22) | [2] | $ 1.44 | |
Diluted net income (loss) per share | $ 3.30 | [2] | $ (3.22) | [2] | $ 1.44 | |
[1] | Revenue between geographic areas approximate market and are not significant. Net revenue are classified according to their country of origin. Included in United States net revenue are export sales of $31 million, $29 million and $43 million in 2018, 2017 and 2016, respectively. | |||||
[2] | On October 29, 2018, the date of the Spin-Off, 122,498,794 shares of the Company's Common Stock were distributed to Honeywell stockholders of record as of October 16, 2018. Basic and Diluted EPS for all periods prior to Spin-Off reflect the number of distributed shares, or 122,498,794 shares. |
CONSOLIDATED AND COMBINED STA_2
CONSOLIDATED AND COMBINED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income (loss) | $ 405 | $ (394) | $ 177 |
Other comprehensive income (loss), net of tax | |||
Foreign exchange translation adjustment | (77) | 70 | (46) |
Pension actuarial loss | (7) | ||
Changes in fair value of effective cash flow hedges | (1) | ||
Total other comprehensive income (loss), net of tax | (84) | 69 | (46) |
Comprehensive income (loss) | $ 321 | $ (325) | $ 131 |
CONSOLIDATED AND COMBINED BALAN
CONSOLIDATED AND COMBINED BALANCE SHEET - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | |
Current assets: | |||
Cash and cash equivalents | $ 265 | $ 56 | |
Due from related parties, current | 23 | ||
Accounts receivables – net | 821 | 779 | |
Inventories | 628 | 465 | |
Other current assets | 95 | 69 | |
Total current assets | 1,809 | 1,392 | |
Property, plant and equipment – net | [1] | 300 | 265 |
Goodwill | 2,634 | 2,648 | |
Other intangible assets – net | 133 | 140 | |
Deferred income taxes | 84 | 5 | |
Other assets | 12 | 23 | |
Total assets | 4,972 | 4,473 | |
Current liabilities: | |||
Accounts payable | 964 | 678 | |
Due to related parties, current | 60 | ||
Current maturities of long-term debt | 22 | ||
Accrued liabilities | 503 | 409 | |
Total current liabilities | 1,489 | 1,147 | |
Long-term debt | 1,179 | ||
Deferred income taxes | 25 | 377 | |
Pension obligations | 88 | ||
Obligations payable to Honeywell | 629 | ||
Other liabilities | 29 | 346 | |
COMMITMENTS AND CONTINGENCIES (Note 21) | |||
EQUITY | |||
Common stock, $0.001 par value, 700,000,000 shares authorized, 122,498,794 and 122,966,558 shares issued and outstanding, respectively | 0 | 0 | |
Additional paid-in capital | 1,720 | ||
Retained earnings | 2 | ||
Invested equity | 2,703 | ||
Accumulated other comprehensive (loss) | (189) | (100) | |
Total equity | 1,533 | 2,603 | |
Total liabilities and equity | $ 4,972 | $ 4,473 | |
[1] | Long-lived assets are comprised of property, plant and equipment—net. |
CONSOLIDATED AND COMBINED BAL_2
CONSOLIDATED AND COMBINED BALANCE SHEET (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
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 | 122,498,794 | 122,966,558 |
Common stock, shares outstanding | 122,498,794 | 122,966,558 |
CONSOLIDATED AND COMBINED STA_3
CONSOLIDATED AND COMBINED STATEMENT OF CASH FLOW - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 405 | $ (394) | $ 177 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 45 | 57 | 57 |
Amortization | 21 | 10 | 7 |
Repositioning charges | 5 | 23 | 19 |
Net payments for repositioning charges | (9) | (17) | (18) |
Stock compensation expense | 20 | 16 | 13 |
Pension expense | 11 | 16 | 16 |
Deferred income taxes | (323) | 297 | (4) |
Other | 11 | 3 | 4 |
Changes in assets and liabilities: | |||
Accounts, notes and other receivables | (62) | (31) | (106) |
Inventories | (172) | (17) | (49) |
Other current assets | (27) | (17) | 1 |
Other assets | (4) | 2 | |
Accounts payable | 231 | 11 | 61 |
Accrued liabilities | 65 | (5) | (11) |
Pension obligations | 5 | ||
Obligations payable to Honeywell | 24 | ||
Other Liabilities | 216 | 85 | (18) |
Net cash provided by operating activities | 462 | 37 | 151 |
Cash flows used for investing activities: | |||
Expenditures for property, plant and equipment | (64) | (49) | (60) |
Expenditures for software | (17) | (2) | (11) |
Payments related to amounts due from related parties | (13) | (12) | |
Cash paid for acquisitions, net of cash acquired | (120) | ||
Proceeds received related to amounts due from related parties | 7 | 13 | 12 |
Net cash used for investing activities | (74) | (51) | (191) |
Cash flows from financing activities: | |||
Proceeds from long-term debt | 1,225 | ||
Payment of debt issuance costs | (24) | ||
Payment of revolving credit facility fees | (5) | ||
Distribution to Honeywell in connection with Spin-Off | (1,415) | ||
Net increase in invested equity | 39 | 19 | 1 |
Non-operating obligations from Honeywell, net | 26 | ||
Proceeds received related to amounts due from related parties | 1 | 2 | |
Payments related to amounts due to related parties | (4) | (2) | |
Net cash flow from (used by) cash pooling | (13) | 5 | 3 |
Net cash (used for) provided by financing activities | (167) | 21 | 4 |
Effect of foreign exchange rate changes on cash and cash equivalents | (12) | 2 | 1 |
Net increase (decrease) in cash and cash equivalents | 209 | 9 | (35) |
Cash and cash equivalents at beginning of period | 56 | 47 | 82 |
Cash and cash equivalents at end of period | 265 | 56 | 47 |
Supplemental Cash Flow Information: | |||
Income taxes paid (net of refunds) | 28 | 261 | 136 |
Capital expenditures in accounts payable | $ 23 | $ 14 | $ 14 |
CONSOLIDATED AND COMBINED STA_4
CONSOLIDATED AND COMBINED STATEMENT OF EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Invested Equity | Accumulated Other Comprehensive Loss |
Beginning Balance at Dec. 31, 2015 | $ 2,719 | $ 2,842 | $ (123) | |||
Net income (loss) | 177 | 177 | ||||
Other comprehensive income (loss), net of tax | (46) | (46) | ||||
Change in invested equity | 24 | 24 | ||||
Ending Balance at Dec. 31, 2016 | 2,874 | 3,043 | (169) | |||
Net income (loss) | (394) | (394) | ||||
Other comprehensive income (loss), net of tax | 69 | 69 | ||||
Change in invested equity | 54 | 54 | ||||
Ending Balance at Dec. 31, 2017 | 2,603 | 2,703 | (100) | |||
Net income (loss) | Successor | $ 2 | |||||
Net income (loss) | 405 | 403 | ||||
Other comprehensive income (loss), net of tax | (84) | (84) | ||||
Change in invested equity | (1,398) | (1,398) | ||||
Issuance of common stock and reclassification of invested equity | $ 1,713 | $ (1,708) | (5) | |||
Issuance of common stock and reclassification of invested equity (in thousands), Shares | 122,499,000 | |||||
Stock-based compensation | 4 | 4 | ||||
Other | 3 | 3 | ||||
Ending Balance at Dec. 31, 2018 | $ 1,533 | $ 1,720 | $ 2 | $ (189) | ||
Ending Balance, Shares at Dec. 31, 2018 | 122,499,000 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements | 12 Months Ended |
Dec. 31, 2018 | |
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 global provider of products, software, solutions and technologies that help owners of homes stay connected and in control of their comfort, security and energy use. The Company is a leader in the home heating, ventilation and air conditioning controls and security markets, and a leading global distributor of security and fire protection products. Separation from Honeywell 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 ( “Spin-Off”). Exhibit 99.1 to Amendment No. 2 to the Company’s Registration Statement on Form 10 as filed with the Securities and Exchange Commission (“SEC”) on October 2, 2018 (the “Form 10”) was declared effective by the SEC on October 3, 2018. On October 29, 2018 (“Spin-Off Date”), Honeywell’s shareholders of record as of October 16, 2018 ( “Record Date”) received one share of the Company’s common stock, par value $0.001 per share, for every six shares of Honeywell’s common stock, par value $1.00 per share, held as of the Record Date, and cash for any fractional shares of the Company’s common stock. The Company began trading “regular way” under the ticker symbol “REZI” on the New York Stock Exchange on October 29, 2018. In connection with the separation, Resideo and Honeywell entered into a Separation and Distribution Agreement, an Employee Matters Agreement, a Tax Matters Agreement, a Transaction Services Agreement, a Trademark License Agreement and a Patent Cross-License Agreement. The agreements govern the relationship between Resideo and Honeywell following the separation and provide for the allocation of various assets, liabilities, rights and obligations. These agreements also include arrangements for transition services to be provided by Honeywell to Resideo and by Resideo to Honeywell. Basis of Presentation The Consolidated Balance Sheet as of December 31, 2018 consists of the consolidated balances of Resideo as prepared on a stand-alone basis. The Combined Balance Sheet as of December 31, 2017, and Consolidated and Combined Statements of Operations, Comprehensive Income (Loss), Equity, and Cash Flows for the years ended December 31, 2018, 2017 and 2016, have been prepared on a “carve-out” basis for the periods and dates prior to the Spin-Off and include stand-alone results for the period subsequent to the date of Spin-Off. Prior to the separation, these Consolidated and Combined Financial Statements were derived from the consolidated financial statements and accounting records of Honeywell. These Consolidated and Combined Financial Statements reflect the Company’s consolidated historical financial position, results of operations and cash flows as they have been historically managed in conformity with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). All intracompany transactions have been eliminated for all periods presented. As described in Note 5. Related Party Transactions with Honeywell, all significant transactions between the Company and Honeywell occurring prior to the Spin-Off have been included in these Consolidated and Combined Financial Statements. Prior to the Spin-Off, transactions between the Company and Honeywell were reflected in the Consolidated and Combined Balance Sheet as Due from related parties, current or Due to related parties, current. In the Consolidated and Combined Statements of Cash Flows, the cash flows related to related party notes receivables presented in the Consolidated and Combined Balance Sheet in Due from related parties, current are reflected as investing activities since these balances represent amounts loaned to Honeywell. The cash flows related to related party notes payables presented in the Combined Balance Sheet in Due to related parties, current are reflected as financing activities since these balances represent amounts financed by Honeywell. While the Company was owned by Honeywell, a centralized approach to cash management and financing was used. Prior to the consummation of the Spin-Off, the majority of the Company’s cash was transferred to Honeywell daily and Honeywell funded the Company’s operating and investing activities as needed. Cash transfers to and from Honeywell’s cash management accounts are reflected in the Combined Balance Sheet as Due to and Due from related parties, current and in the Consolidated and Combined Statements of Cash Flows as net financing activities. The Combined Financial Statements prior to the Spin-Off include certain assets and liabilities that have historically been held at the Honeywell corporate level but were specifically identifiable or otherwise attributable to the Company. The cash and cash equivalents held by Honeywell at the corporate level were not specifically identifiable to the Company and therefore were not attributed for any of the periods presented. Honeywell third-party debt and the related interest expense were not allocated for any of the periods presented as Honeywell’s borrowings were not directly attributable to the Company. Prior to the consummation of the Spin-Off, Honeywell provided certain services, such as legal, accounting, information technology, human resources and other infrastructure support, on behalf of the Company. The cost of these services has been allocated to the Company on the basis of the proportion of net revenue. The Company and Honeywell consider these allocations to be a reasonable reflection of the benefits received by the Company. However, the financial information presented in these Consolidated and Combined Financial Statements may not reflect the consolidated and combined financial position, operating results and cash flows of the Company had the Company been a separate stand-alone entity during the periods presented. Actual costs that would have been incurred if the Company had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. Both Resideo and Honeywell consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefits received by the Company during the periods presented. After the Spin-Off, a number of the above services have continued under a transition service agreement with Honeywell, which the Company will expense as incurred based on the contractual pricing terms. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies. Accounting Principles —The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. The following is a description of Resideo’s significant accounting policies. Principles of Co nsolidation —The Consolidated and Combined Financial Statements incl ude the accounts of Resideo Technologies, Inc. and all of its subsidiaries in which a controlling interest is maintained. All intercompany transactions and balances are eliminated in consolidation. Cash and Cash Equivalents —Cash and cash equivalents include cash on hand and highly liquid investments having an original maturity of three months or less. Trade Receivables and Allowance for Doubtful Accounts —Trade accounts receivable are recorded at the invoiced amount as a result of transactions with customers. The Company maintains allowances for doubtful accounts for estimated losses as a result of customers’ inability to make required payments. The Company estimates anticipated losses from doubtful accounts based on days past due as measured from the contractual due date and historical collection history. The Company also takes into consideration changes in economic conditions that may not be reflected in historical trends, for example customers in bankruptcy, liquidation or reorganization. Receivables are written-off against the allowance for doubtful accounts when they are determined uncollectible. Such determination includes analysis and consideration of the particular conditions of the account, including time intervals since last collection, customer performance against agreed upon payment plans, solvency of customer and any bankruptcy proceedings. Inventories —Inventories in the Products and Solutions business are stated at the lower of cost or net realizable value, determined on a first-in, first-out basis, including direct material costs and direct and indirect manufacturing costs, or net realizable value. Inventories in the Global Distribution business are stated at average cost. Reserves are maintained for obsolete, inactive and surplus items. Property, Plant and Equipment —Property, plant and equipment are recorded at cost, less accumulated depreciation. For financial reporting, the straight-line method of depreciation is used over the estimated useful lives of 10 to 50 years for buildings and improvements, 3 to 16 years for machinery and equipment and 3 to 10 years for tooling equipment. Goodwill —Goodwill is subject to impairment testing annually as of October 1, and whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. This testing compares carrying values to fair values and, when necessary, the carrying value of these assets is impaired. The Company completed its annual goodwill impairment test as of the Spin-Off date and determined that no impairment was necessary. No impairment indicators have been identified since the last impairment test date. Other Intangible Assets with Determinable Lives —Other intangible assets with determinable lives consist of customer lists, technology, patents and trademarks and software intangibles and are amortized over their estimated useful lives, ranging from 4 to 15 years. Warranties and Guarantees —Expected warranty costs for products sold are recognized based on an estimate of the amount that eventually will be required to settle such obligations. These accruals are based on factors such as past experience, length of the warranty and various other considerations. Costs of product recalls, which may include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the recalled part, are accrued as part of the warranty accrual at the time an obligation becomes probable and can be reasonably estimated. These estimates are adjusted from time to time based on facts and circumstances that impact the status of existing claims. Revenue Recognition — Product and service revenues are recognized when or as the Company transfers control of the promised products or services to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. In the sale of products, the terms of a contract or the historical business practice can give rise to variable consideration due to, but not limited to, discounts and bonuses. The Company estimates variable consideration at the most likely amount that will be received from customers and reduce revenues recognized accordingly. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company. The Company adopted the revenue recognition standard as of January 1, 2018 (see Note 6 Revenue Recognition and Contracts with Customers). Prior to adoption, product and service revenues were recognized when there was evidence of a sales agreement, delivery of goods had occurred or services had been rendered, the sales price was fixed or determinable, and the collectability of revenue was reasonably assured. Service sales, principally representing network subscription services, were recognized over the contractual period or as services were rendered. Revenues from contracts with multiple element arrangements were recognized as each element was earned based on the relative fair value of each element provided the delivered elements had value to customers on a stand-alone basis. Amounts allocated to each element were based on its objectively determined fair value, such as the sales price for the product or service when it was sold separately or competitor prices for similar products or services. Sales incentives and allowances were recognized as a reduction to revenue at the time of the related sale. Sales, use and value added taxes collected by the Company and remitted to various government authorities were not recognized as revenues and are reported on a net basis. Shipping and handling fees billed to customers were included in Cost of goods sold. Royalty — 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 will pay a royalty fee of 1.5% of net revenue of the licensed products to Honeywell which is recorded in Selling, general and administrative expense on the Consolidated and Combined Statement of Operations. Environmental —The Company 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 costs are presented within Cost of goods sold for operating sites and Other expense, net for non-operating sites in the Consolidated and Combined Statements of Operations. For additional information, see Note 21 . Commitments and Contingencies. Honeywell Reimbursement Agreement — In connection with the Spin-Off, the Company entered into an Indemnification and Reimbursement Agreement with Honeywell (the “Honeywell Reimbursement Agreement”) on October 14, 2018, pursuant to which it has an obligation to make cash payments to Honeywell in amounts equal to 90% of payments, which include amounts billed, with respect to certain environmental claims, remediation and, to the extent arising after the Spin-Off, hazardous exposure or toxic tort claims, in each case, including consequential damages (the “liabilities”) in respect of specified properties contaminated through historical business operations, including the legal and other costs of defending and resolving such liabilities, 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 amount payable in respect of such liabilities arising in any given year is subject to a cap of $140 million (exclusive of any late payment fees up to 5% per annum). Honeywell reimbursement expenses are presented within Other expense, net in the Consolidated and Combined Statement of Operations and within Accrued liabilities and Obligations payable to Honeywell in the Consolidated and Combined Balance She et. For additional information, see Note 21. Commitments and Contingencies. Tax Indemnification Agreement —The Tax Matters Agreement provides that Resideo is required to indemnify Honeywell for any taxes (and reasonable expenses) resulting from the failure of the Spin-Off and related internal transactions to qualify for their intended tax treatment under U.S. federal, state and local income tax law, as well as foreign tax law, where such taxes result from (a) breaches of covenants and representations we make and agree to in connection with the Spin-Off, (b) the application of certain provisions of U.S. federal income tax law to these transactions or (c) any other action or omission (other than actions expressly required or permitted by the Separation and Distribution Agreement, the Tax Matters Agreement or other ancillary agreements) we take after the consummation of the Spin-Off that gives rise to these taxes. As of December 31, 2018, the Company has indemnified Honeywell for $153 million. See “Certain Relationships and Related Party Transactions—Agreements with Honeywell—Tax Matters Agreement.” Research and Development —The Company conducts research and development (“R&D”) activities, which consist primarily of the development of new products and product applications. R&D costs are charged to expense as incurred. Such costs are included in Cost of goods sold and amount to $ 105 million, $1 20 million and $1 06 million for the years ended December 31, 201 8 , 201 7 and 201 6 , respectively Stock-Based Compensation Plans —The principal awards issued under Resideo’s stock-based compensation plans, which are desc ribed in Note 20. Stock-Based Compensation Plans, are restricted stock units. The cost for such awards is measured at the grant date based on the fair value of the award. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods (generally the vesting period of the equity award) and is included in Selling, general and administrative expenses in the Consolidated and Combined Statements of Operations. Forfeitures are estimated at the time of grant to recognize expense for those awards that are expected to vest and are based on historical forfeiture rates. Pension Benefits — The guidance requires that the Company disaggregates the service cost component of net benefit costs and report those costs in the same line item or items in the Consolidated Statement of Operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other non-service components of net benefit costs are required to be presented separately from the service cost component and outside of income from operations. The Company has recorded the service cost component of Pension ongoing (income) expense in Costs of goods sold and Selling, general and administrative expenses. The remaining components of net benefit costs within Pension ongoing (income) expense, primarily interest costs and assumed return on plan assets, are recorded in Other expense, net. The Company recognizes net actuarial gains or losses in excess of 10% of the greater of the fair value of plan assets or the plans’ projected benefit obligation (the corridor) annually in the fourth quarter each year (MTM Adjustment). The MTM Adjustment will also be reported in Other expense, net. Foreign Currency Translation —Assets and liabilities of operations outside the United States with a functional currency other than U.S. Dollars are translated into U.S. Dollars using year-end exchange rates. Revenue, costs and expenses are translated at the average exchange rates in effect during the year. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive income (loss). Income Taxes —Significant judgment is required in evaluating tax positions. The Company establishes additional reserves for income taxes when, despite the belief that tax positions are fully supportable, there remain certain positions that do not meet the minimum recognition threshold. The approach for evaluating certain and uncertain tax positions is defined by the authoritative guidance which determines when a tax position is more likely than not to be sustained upon examination by the applicable taxing authority. In the normal course of business, the Company and its subsidiaries are examined by various federal, state and foreign tax authorities. The Company regularly assesses the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability and deferred taxes in the period in which the facts that give rise to a change in estimate become known. Earnings (Loss) Per Share — Basic earnings (loss) per share is based on the weighted average number of common shares outstanding. Diluted earnings (loss) per share is based on the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. For additional information, see Note 3. Earnings Per Share. Use of Estimates —The preparation of the Company ’s Consolidated and Combined Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the Consolidated and Combined Financial Statements and related disclosures in the accompanying Notes. Actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of changes are reflected in the Consolidated and Combined Financial Statements in the period they are determined to be necessary. Estimates are used when accounting for, stock-based compensation, pension benefits, contingent consideration, indemnification liabilities, goodwill and intangible assets, and valuation allowances for receivables and inventory reserves, deferred tax assets, and the amounts of revenue and expenses reported during the period. Reclassification — A reclassification of a prior period amount has been made to conform to the presentation adopted for the current period. For the years ended December 31, 2017 and December 31, 2016 we reclassified $(2) and $(3) million respectively from Interest to Other expense, net in the Consolidated and Combined Statement of Operations to conform with the current period presentation. 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 combined financial position or results of operations. In February 2016, the FASB issued new guidance on accounting for leases, which was further amended in July 2018 and December 2018. The new guidance requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases, but does not significantly impact the manner in which expense is recognized on the income statement. Enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases are also required. Lessor accounting is substantially unchanged from existing guidance. The Company adopted the new guidance effective January 1, 2019, and will apply the changes prospectively, recognizing a cumulative-effect adjustment to the beginning balance of retained earnings as of the adoption date. The primary impact upon adoption of the new guidance is the recognition of right of use assets and lease liabilities for qualifying operating leases on the Company’s balance sheet, predominantly related to real estate. Upon adoption, the Company currently expects to recognize an aggregate lease liability ranging from $105 million to $117 million, with a corresponding right of use asset, calculated based on the present value of the remaining minimum lease payments for qualifying leases as of January 1, 2019. The adoption of the new guidance is not expected to have a material impact to the consolidated statements of operations, stockholders’ equity, and cash flows. The new guidance also provides practical expedients and policy elections for an entity’s ongoing accounting. The Company will elect the short-term lease exception for qualifying leases, which excludes those leases that qualify as short-term leases from lease liability and right of use asset recognition. The Company also currently expects to elect the practical expedient to not separate lease and non-lease components for its real estate and automobile leases. In October 2016, the FASB issued an accounting standard update which requires an entity to recognize the income tax consequences of an intra- entity transfer of an asset, other than inventory, at the time the entity transfer occurs rather than when the asset is ultimately transferred to a third party, as required under current U.S. GAAP. The guidance is intended to reduce diversity in practice, particularly for transfers involving intellectual property. Subsequent to 2017 fiscal year, the Company adopted the accounting standard update as of January 1, 2018. The guidance requires application on a modified retrospective basis. The adoption of this guidance increases the Company’s deferred tax assets by approximately $0.2 million with a cumulative-effect adjustment to retained earnings of the same amount. In January 2017, the FASB issued guidance which eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. The annual assessment of goodwill impairment will be determined by using the difference between the carrying amount and the fair value of the reporting unit. The standard is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019 and is to be applied on a prospective basis. The Company early adopted this standard as of Spin-Off date. The adoption had no impact on the consolidated financial statements as of the date of adoption or for the year ended December 31, 2018. In February 2018, the FASB issued guidance that allows for an entity to elect to reclassify the income tax effects on items within accumulated other comprehensive income resulting from the U.S. Tax Cuts and Jobs Act (“U.S. Tax Reform”) to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. Upon adoption, the Company does not expect to elect to reclassify the stranded income tax effects of U.S. Tax Reform from accumulated other comprehensive income to retained earnings. In August 2018, the FASB issued guidance which amends the current disclosure requirements regarding defined benefit pensions and other post retirement plans and allows for the removal of certain disclosures, while adding certain new disclosure requirements. This standard is effective for fiscal years beginning after December 15, 2020 and allows for early adoption. The Company does not expect this new standard to have a significant impact to its disclosures. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 3. Earnings Per Share On October 29, 2018, the date of consummation of the Spin-Off, 122,498,794 The details of the earnings per share calculations for the years ended December 31, 2018, 2017 and 2016 are as follows: Years Ended December 31, Basic: 2018 2017 2016 Net income (loss) $ 405 $ (394 ) $ 177 Weighted average common shares outstanding (in thousands) 122,499 122,499 122,499 Earnings (Loss) Per Share - Basic $ 3.31 $ (3.22 ) $ 1.44 Years Ended December 31, Diluted: 2018 2017 2016 Net income (loss) $ 405 $ (394 ) $ 177 Weighted average common shares outstanding - Basic (in thousands) 122,499 122,499 122,499 Dilutive effect of unvested RSUs 125 - - Weighted average common shares outstanding - Diluted (in thousands) 122,624 122,499 122,499 Earnings (Loss) Per Share - Diluted $ 3.30 $ (3.22 ) $ 1.44 Diluted Earnings (Loss) Per Share is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the period from the spin-off date to December 31, 2018. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Note 4. Acquisitions In March 2016, the Company completed the acquisition of RSI Video Technologies (“RSI”), a leading provider of wireless battery-powered motion detectors, for an aggregate value of $124 million in cash and $2 million in contingent consideration. $42 million in net assets were assumed at the acquisition date using fair value estimates, including $38 million in intangible assets and $84 million of goodwill. RSI was acquired to enhance the Company’s ability to meet increasing global customer need for video verification and the acquisition was attributed to the Products and Solutions Segment. |
Related Party Transactions with
Related Party Transactions with Honeywell | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions with Honeywell | Note 5. Related Party Transactions with Honeywell The Consolidated and Prior to consummation of the Spin-Off, Honeywell was a related party that provided certain services, such as legal, accounting, information technology, human resources and other infrastructure support, on behalf of the . The cost of these services has been allocated to the Company on the basis of the proportion of net revenue. The and Honeywell consider the allocations to be a reasonable reflection of the benefits received by the . During the period from January 1, 2018 until October 29, 2018 and the the Company Consolidated and Consolidated and the Company All significant intercompany transactions between the Company Consolidated and October 29, 2018 period from January 1, 2018 until October 29, 2018 and the d December 31, 2017 and 2016 were $19 million, $29 million and $38 million, respectively. Purchases from Honeywell during the period from January 1, 2018 until October 29, 2018 and the years ended December 31, 2017 and 2016 were $212 million, $213 million and $205 million, respectively. Consolidated and Consolidated and Prior to the consummation of the Spin-Off, Honeywell managed the Company’s hedging activity which included centrally hedg its exposure to changes in foreign exchange rates principally with forward contracts. Certain contracts specifically designated to and entered on behalf of the with as a counterparty and used to hedge known or probable anticipated foreign currency sales and purchases. The designat these hedges as cash flow hedges. These hedges marked-to-market with the effective portion of the changes in fair value of the derivatives recorded in Accumulated other comprehensive income (loss) and subsequently recognized in earnings when the hedged items impacted earnings. See Note . Other Expense, Net and Note 1 . Accumulated Other Comprehensive Income (Loss), for the net impact of these economic foreign currency hedges in Other expense, net and Accumulated other comprehensive income, respectively, and Note 1 . Financial Instruments and Fair Value Measures, for further details of these financial instruments. Resideo has no hedging activity as of December 31, 2018. The following two tables presents related party activity prior to the consummation of the Spin-Off: As Honeywell is no longer a related party, there are no balances as of December 31, 2018. Due from related parties, current consists of the following: December 31, 2017 Cash pooling and short-term notes receivables $ 10 Related party note receivables, current 7 Receivables from related parties 6 $ 23 Due to related parties, current consists of the following: December 31, 2017 Cash pooling and short-term notes payables $ 23 Payables to related parties 36 Related parties notes payables, current 1 $ 60 While the Company was owned by Honeywell, a centralized approach to cash management and financing of operations was used. Prior to consummation of the Spin-Off, the Company’s cash was transferred to Honeywell daily and Honeywell funded the Company’s operating and investing activities as needed. Net transfers to and from Honeywell are included within nvested equity on the Combined Statements of Equity. The components of the net transfers to and from Honeywell as of December 31, 2018, 2017 and 2016 are as follows: Years Ended December 31, 2018 2017 2016 General financing activities $ (383 ) $ (547 ) $ (384 ) Distribution to Honeywell in connection with Spin-Off (1,415 ) - - Net contribution of assets and liabilities upon Spin-Off 81 - - Unbilled corporate allocations 228 260 240 Purchases from Honeywell 161 168 160 Mandatory transition tax (85 ) 156 - Sales to Honeywell (12 ) (13 ) (18 ) Stock compensation expense and other compensation awards 16 16 13 Unbilled pension expense 11 14 13 Net increase (decrease) in invested equity $ (1,398 ) $ 54 $ 24 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | Note 6. Revenue Recognition Recently Adopted Accounting Pronouncement On January 1, 2018, the Company adopted new guidance on revenue from contracts with customers using the modified retrospective method applied to contracts that were not completed as of January 1, 2018. As a result of adopting the new guidance, the Company determined there are no material impacts on the Consolidated and Combined Financial Statements as the Company’s previous revenue recognition was consistent with the new standard. Disaggregated Revenue Revenues by channel are as follows: 2018 U.S. and Canada $ 2,147 EMEA (1) 456 India 55 Global Distribution 2,658 Comfort 1,114 Security 479 RTS 576 Products and Solutions (2) 2,169 Net revenue $ 4,827 (1) EMEA represents Europe, the Middle East and Africa. (2) Products and Solutions sales channel naming convention changed from what was disclosed in the 10-Q. Comfort & Care was broken out into Comfort and RTS. 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. Less than 3% of the Company’s revenue is satisfied over time. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable and unbilled receivables (contract assets), reported in Accounts, notes and other receivables - net, and customer advances and deposits (contract liabilities), reported in Accrued Liabilities, on the Consolidated and Combined Balance Sheet. As of December 31, 2018, contract assets and liabilities are not material. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is defined as the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For product sales, typically each product sold to a customer represents a distinct performance obligation. The majority of the Company’s performance obligations are satisfied as of a point in time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. All performance obligations are expected to be satisfied within one year. The timing of satisfaction of the Company’s performance obligations does not significantly vary from the typical timing of payment. For some contracts, the Company may be entitled to receive an advance payment. The Company has applied the practical expedient to not disclose the value of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which it recognizes revenue in proportion to the amount it has the right to invoice for services performed. |
Repositioning Charges
Repositioning Charges | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Repositioning Charges | Note 7. Repositioning Charges A summary of repositioning charge follows: Years Ended December 31, 2018 2017 2016 Severance $ 4 $ 23 $ 21 Asset impairments 1 1 - Reserve adjustments - (1 ) (2 ) Total net repositioning charge $ 5 $ 23 $ 19 The following table summarizes the pretax distribution of total net repositioning charges by statement of operations classification: Years Ended December 31, 2018 2017 2016 Cost of goods sold $ 4 $ 17 $ - Selling, general and administrative expenses 1 6 19 $ 5 $ 23 $ 19 All of the pretax impact of total net repositioning charges are related to the Products and Solutions 2016. T he Company recognized repositioning charges totaling $5 million, million for the years en mainly for severance costs related to workforce reductions. The workforce reductions were primarily related to cost savings actions taken in connection with the Company’s productivity and ongoing functional transformation initiatives; factory transitions to more cost-effective locations and site consolidations and organizational realignments The following table summarizes the status of total repositioning reserves related to severance cost: Total Balance at December 31, 2015 $ 13 2016 Charges 21 2016 Usage – cash (18 ) 2016 Usage – noncash - Adjustments (2 ) Foreign currency translation 1 Balance at December 31, 2016 15 2017 Charges (a) 24 2017 Usage – cash (17 ) 2017 Usage – noncash (a) (1 ) Adjustments (1 ) Foreign currency translation 2 Balance at December 31, 2017 22 2018 Charges 5 2018 Usage – cash (9 ) 2018 Usage – noncash - Other (4 ) Foreign currency translation (1 ) Balance at December 31, 2018 $ 13 (a) Includes asset impairment of $1 million Certain repositioning projects in each of the reportable operating segments in 2018, 2017 and 2016 included exit or disposal activities, the costs related to which will be recognized in future periods when the actual liability is incurred. The remaining exit and disposal costs relating to repositioning actions as of December 31, 201 8 |
Other Expense, Net
Other Expense, Net | 12 Months Ended |
Dec. 31, 2018 | |
Other Income And Expenses [Abstract] | |
Other Expense, Net | Note 8. Other Expense, Net Years Ended December 31, 2018 2017 2016 Environmental expense $ 323 $ 281 $ 188 Honeywell reimbursement agreement expense 49 - - Other, net (3 ) (2 ) (3 ) $ 369 $ 279 $ 185 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9. Income Taxes Prior to the consummation of the Spin-Off, Resideo’s operating results were included in Honeywell’s various consolidated U.S. federal and state income tax returns, as well as non-U.S. filings. For the purposes of the Company's Consolidated and Combined Financial Statements for periods prior to the Separation, income tax expense and deferred tax balances have been recorded as if the Company filed tax returns on a standalone basis separate from Honeywell. The Separate Return Method applies the accounting guidance for income taxes to the standalone financial statements as if the Company was a separate taxpayer and a standalone enterprise prior to the separation from Honeywell. Income before taxes Years Ended December 31, 2018 2017 2016 U.S. $ (169 ) $ (107 ) $ 47 Non-U.S. 273 273 263 $ 104 $ 166 $ 310 Income tax expense (benefit) Years Ended December 31, 2018 2017 2016 Tax expense (benefit) consists of: Current: U.S. $ (26 ) $ 215 $ 88 Non-U.S. 48 48 49 $ 22 $ 263 $ 137 Deferred: U.S. $ (15 ) $ (6 ) $ 2 Non-U.S. (308 ) 303 (6 ) (323 ) 297 (4 ) $ (301 ) $ 560 $ 133 Years Ended December 31, 2018 2017 2016 The U.S. federal statutory income tax rate is reconciled to the effective income tax rate as follows: U.S. federal statutory income tax rate 21.0 % 35.0 % 35.0 % Taxes on non-U.S. earnings below U.S. tax rate (7.3 ) (33.4 ) (15.2 ) U.S. state income taxes 6.4 3.4 2.5 Reserves for tax contingencies (4.3 ) 3.2 0.8 U.S. Tax Reform and related items (385.1 ) 273.1 - GILTI/FDII 6.0 - - Non-deductible expenses 75.4 58.8 20.5 Tax credits (2.1 ) (1.4 ) (1.0 ) All other items – net (a) 0.6 (1.4 ) 0.3 (289.4 ) % 337.3 % 42.9 % ( a ) Prior years adjusted to separately state “Tax Credits”. The effective tax rate decreased in 2018 compared to 2017. The decrease was primarily attributable to tax benefits attributable to the internal restructuring of Resideo’s business in advance of its anticipated spin-off, adjustments to the provisional tax amount related to U.S. Tax Reform, adjustments to income tax reserves, partially offset by tax expense related to Global Intangible Low Taxed Income (“GILTI”). The Company’s non-U.S. effective tax rate was (95.2)%, a decrease The effective tax rate increased in 2017 compared to 2016. The increase was primarily attributable to the provisional impact of U.S. tax reform (see “the Tax Act” further discussed below) and an increase in non-deductible expenses. The Company’s non-U.S. effective tax rate was 128.6%, an increase compared to 2016. The year-over-year increase in the non-U.S. effective tax rate was primarily driven by Honeywell’s change in assertion regarding foreign unremitted earnings in connection with the Tax Act. Deferred tax assets (liabilities) The tax effects of temporary differences and tax carryforwards which give rise to future income tax benefits and payables are as follows: Years Ended December 31, 2018 2017 Deferred tax assets: Pension $ 25 $ - Other asset basis differences 73 - Accruals and reserves 34 11 Net operating and capital losses 31 38 Gross deferred tax assets 163 49 Valuation allowance (29 ) (36 ) Total deferred tax assets $ 134 $ 13 Deferred tax liabilities: Intangibles $ (53 ) $ (55 ) Property, plant and equipment (16 ) (14 ) Unremitted earnings of foreign subsidiaries - (314 ) Other (6 ) (2 ) Total deferred tax liabilities (75 ) (385 ) Net deferred tax asset / (liability) $ 59 $ (372 ) Deferred tax assets: Gross deferred tax assets include $134 million related to non-U.S. operations comprised principally of deductible temporary differences attributable to fixed assets and intangibles. The Company maintains a valuation allowance of $29 4 9 8 7 6 The Company has not provided deferred taxes on unremitted earnings of its foreign affiliates that exist at December 31, 2018 as the earnings are considered permanently reinvested. The Company intends to continue to reinvest these earnings in international operations. If the Company determines at a later date to distribute these earnings to the U.S., the Company would be required to provide the net tax effects on these distributions. The Company estimates the total tax effect of these distributions would be approximately $18 million under current enacted tax laws. As of December 31, 201 8 Jurisdiction Expiration Period Net Operating Loss Carryforwards Non-U.S. 2023 $ 11 Non-U.S. Indefinite 104 $ 115 Many jurisdictions impose limitations on the timing and utilization of net operating loss carryforwards. In those instances where the net operating loss or tax credit carryforward will not be utilized in the carryforward period due to the limitation, the deferred tax asset and amount of the carryforward have been reduced. 2018 2017 2016 Change in unrecognized tax benefits: Balance at beginning of year $ 20 $ 20 $ 19 Gross increases related to current period tax positions - 2 2 Gross increases related to prior periods tax positions 2 4 1 Gross decreases related to prior periods tax positions - (3 ) - Decrease related to resolutions of audits with tax authorities (2 ) (4 ) (1 ) Expiration of the statute of limitations for the assessment of taxes - - (1 ) Reclass to indemnity payable (18 ) - - Foreign Currency Translation - 1 - Balance at end of year $ 2 $ 20 $ 20 As of December 31, 201 8 7 6 2 20 Unrecognized tax benefits for examinations in progress were $ - 7 8 8 7 6 f income taxes are classified as a component of Tax expense in the Consolidated and Combined Statement of Operations and totaled $(1) million of expense, $1 million of expense and $2 million expense for the years ended December 31, 2018, 2017 and 2016, respectively. Accrued interest and penalties were $1 million, $7 million and $7 million, as of December 31, 2018, 2017 and 2016, respectively. U.S. Tax Reform On December 22, 2017, the U.S. government enacted U.S. Tax Reform, which included changes to the taxation of foreign earnings by implementing a dividend exemption system, expansion of the current anti-deferral rules, a minimum tax on low-taxed foreign earnings and new measures to deter base erosion. The U.S. Tax Reform also included a permanent reduction in the corporate tax rate, repeal of the corporate alternative minimum tax, expensing of capital investment, and limitation of the deduction for interest expense. Furthermore, as part of the transition to the new tax system, a one-time transition tax was imposed on a U.S. shareholder’s historical undistributed earnings of foreign affiliates. As described in the Combined Financial Statements for the year ended December 31, 2017, the Company reasonably estimated certain effects of U.S. Tax Reform and, therefore, recorded provisional amounts, including the deemed repatriation transition tax and withholding taxes on undistributed earnings. For the year ended December 31, 2018, the Company recorded an adjustment to the provisional tax amount related to the deemed repatriation transition tax and taxes on undistributed earnings of $(85.4) million and $(234.7) million, respectively. This adjustment results in a decrease to the effective tax rate for the year ended December 31, 2018 of Corporate Tax Rate Change —The Company recorded a total tax benefit of approximately $17 million due to the decrease in the corporate statutory tax rate from 35% to 21%. The tax benefit from the change in tax rates results from the Company’s deferred tax liability position as of December 31, 2017 for the excess of its net book value over its tax basis of its U.S. assets and liabilities that will generate future taxable income in excess of book income. This additional taxable income will be subject to tax at a lower corporate tax rate, consequently reducing the Company’s deferred tax liability. There was no measurement period adjustment related to the Corporate Tax Rate Change. Mandatory Transition Tax —The Company recorded a total tax charge of approximately $70.6 million due to the imposition of the mandatory transition tax (“MTT”) on the deemed repatriation of undistributed foreign earnings. The amount reflects a provisional charge of $156 million decreased by a measurement period adjustment of approximately $85.4 million recorded during 2018. The change in the provisional estimate primarily relates to the revised determination of the fair value of assets and liabilities of legal entities included in the Company’s business, which is utilized to allocate earnings and profit for purposes of calculating the deemed repatriation tax. Undistributed Foreign Earnings — The Company recorded a total tax charge of approximately $79.3million due to Honeywell’s intent at December 31, 2017 to no longer permanently reinvest the historical unremitted earnings of its foreign affiliates that existed as of December 31, 2017. This amount includes a provisional charge of $314 million decreased by measurement period adjustment of $234.7 million recorded as a reduction to tax expense. The change in the provisional estimate primarily relates to the revised determination of the fair value of assets and liabilities of legal entities included in the Company’s business, which is utilized to allocate earnings and profit for purposes of calculating the undistributed foreign earnings prior to the spin and the Company’s decision, after the separation, to permanently reinvest the historical unremitted earnings of its foreign affiliates. Global Intangible Low Taxed Income —U.S. Tax Reform imposes a U.S. tax on global intangible low taxed income (“GILTI”) that is earned by certain foreign affiliates owned by a U.S. shareholder. GILTI is generally intended to impose tax on the earnings of a foreign corporation that are deemed to exceed a certain threshold return relative to the underlying business investment. The Company has made a policy election to treat future taxes related to GILTI as a current period expense in the reporting period in which the tax is incurred. |
Accounts Receivables - Net
Accounts Receivables - Net | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Receivable Net Current [Abstract] | |
Accounts Receivables—Net | Note 10. Accounts Receivables—Net December 31, 2018 2017 Accounts receivables, net $ 833 $ 792 Less - Allowance for doubtful accounts (12 ) (13 ) $ 821 $ 779 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 11. Inventories December 31, 2018 2017 Raw materials $ 167 $ 108 Work in process 34 21 Finished products 427 336 $ 628 $ 465 |
Property, Plant, and Equipment
Property, Plant, and Equipment - Net | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment - Net | Note 12. Property, Plant and Equipment—Net December 31, 2018 2017 Land and improvements $ 6 $ 6 Machinery and equipment 510 532 Buildings and improvements 246 245 Construction in progress 64 39 Others 27 16 853 838 Less - Accumulated depreciation (553 ) (573 ) $ 300 $ 265 Depreciation expense was $ 45 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets - Net | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets - Net | Note 13. Goodwill and Other Intangible Assets—Net The change in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 by segment is as follows: Global Distribution Goodwill Products and Solutions Goodwill Total Balance as of December 31, 2016 $ 629 $ 1,965 $ 2,594 Acquisitions/Divestitures - 4 4 Currency translation adjustment 16 34 50 Balance as of December 31, 2017 645 2,003 2,648 Acquisitions/Divestitures - - - Currency translation adjustment (6 ) (8 ) (14 ) Balance as of December 31, 2018 $ 639 $ 1,995 $ 2,634 Other intangible assets with finite lives are comprised of: December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Determinable life intangibles: Patents and technology $ 27 $ (16 ) $ 11 $ 25 $ (11 ) $ 14 Customer relationships 170 (95 ) 75 178 (89 ) 89 Trademarks 9 (6 ) 3 9 (6 ) 3 Software 122 (78 ) 44 105 (71 ) 34 $ 328 $ (195 ) $ 133 $ 317 $ (177 ) $ 140 Intangible assets amortization expense was $ 21 10 7 8 7 6 , and $9 million in 2023. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | Note 14. Accrued Liabilities December 31, 2018 2017 Obligations payable to Honeywell $ 140 $ - Taxes payable 76 - Compensation, benefit and other employee related 73 65 Customer rebate reserve 59 49 Product warranties and performance guarantees 26 17 Repositioning 13 22 Environmental costs 2 204 Other (primarily operating expenses) 114 52 $ 503 $ 409 Refer to Note 21. Commitments and Contingencies for further details on environmental and Honeywell reimbursement expense. |
Long-term Debt and Credit Agree
Long-term Debt and Credit Agreement | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Credit Agreement | Note 15. Long-term Debt and Credit Agreement The Company had no debt outstanding as of December 31, 2017. The Company’s debt at December 31, 2018 consisted of the following: December 31, December 31, 2018 2017 6.125% notes due 2026 $ 400 $ - Five year variable rate term loan A due 2023 350 Seven year variable rate term loan B due 2025 475 - Unamortized debt issuance costs (24 ) - Total outstanding indebtedness 1,201 - Less: amounts due within one year (22 ) - Total long-term debt due after one year $ 1,179 $ - Scheduled principal repayments under the Senior Credit Facilities (defined below) and Senior Notes (defined below) subsequent to December 31, 2018 are as follows: December 31, 2018 2019 $ 22 2020 22 2021 40 2022 57 2023 232 Thereafter 852 1,225 Less: amounts due within one year (22 ) $ 1,203 Senior Notes In October of 2018, the Company issued $400 million in principal amount 6.125% senior unsecured notes due in 2026 (the "Senior Notes"). The Senior Notes are senior unsecured and unsubordinated obligations of Resideo and rank equally with all of Resideo’s existing and future senior unsecured debt and senior to all of Resideo’s subordinated debt. Resideo may at its option, redeem the Senior Notes in whole or part prior to November 1, 2021, at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus accrued and unpaid interest, if any, plus a “make- whole” premium. On or after November 1, 2021 Resideo may at its option, redeem the Senior Notes in whole or in part plus accrued and unpaid interest, plus a fixed redemption percentage on the principal amount of the Senior Notes redeemed of (i) 104.594% if redeemed during the twelve-month period beginning on November 1, 2021 (ii) 103.063% if redeemed during the twelve-month period beginning on November 1, 2022, (iii) 101.531% if redeemed during the twelve-month period beginning on November 1, 2023, (iv) 100% if redeem on or after November 1, 2024. The Company incurred approximately $8 million in debt issuance costs related to the Senior Notes. The debt issuance costs associated with the Senior Notes are recorded as a reduction of the principal balance of the debt. All issuance costs are being amortized through interest expense for the duration of each respective debt facility. Credit Agreement On October 25, 2018, in connection with the consummation of the Spin-Off, the Company as the borrower, entered into a Credit Agreement with JP Morgan Chase Bank N.A. as administrative agent (the “Credit Agreement”). In October of 2018, the Company incurred substantial indebtedness in the form of a seven-year LIBOR plus 2.00% senior secured first-lien term B loan facility in an aggregate principal amount of $475 million (the "Term B Facility") and a five-year LIBOR plus 2.00% senior secured first-lien term A loan facility in an aggregate principal amount of $350 (the "Term A Facility" and, together with the Term B Facility, the "Term Loan Facilities"). The Term Loan Facilities interest rate for the period ending December 31, 2018 was 4.49%. The Company is obligated to make quarterly principal payments throughout the term of the Term Loan Facilities according to the amortization provisions in the Credit Agreement. Borrowings under the Credit Agreement are able to 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. Amounts repaid or prepaid in respect of Term Loan Facilities may not be re-borrowed. In October of 2018, the Company established a five-year senior secured first-lien revolving credit facility to be used for the Company’s working capital and other cash needs from time to time in an aggregate principal amount of $350 million (the "Revolving Credit Facility" and, together with the Term Loan Facilities, the "Senior Credit Facilities"). The interest rate on the Revolving Credit Facility borrowings, are based on, at the option of the Company, either, (i) the rate of interest last quoted by The Wall Street Journal as the “prime rate” in the United States, (ii) the greater of the federal funds effective rate and the overnight bank funding rate, plus 0.5% and (iii) the one month adjusted LIBOR rate, plus 1.00% per annum. If the Company chooses to make a LIBOR borrowing on a one, two, three or six-month basis, the interest rate will be based on an adjusted LIBOR rate (which shall not be less than zero) based on the interest period for the borrowing. The applicable margin for the Term B Facility is currently 2.00% per annum (for LIBOR loans) and 1.00% per annum (for base rate loans). The applicable margin for each of the Term A Facility and the Revolving Credit Facility varies from 2.00% per annum to 1.50% per annum (for LIBOR loans) and 1.00% to 0.50% per annum (for base rate loans) based on the Company’s leverage ratio. Accordingly, the interest rates for the Senior Credit Facilities will fluctuate during the term of the Credit Agreement based on changes in the base rate, LIBOR or future changes in our leverage ratio. Interest payments with respect to the borrowings are required either on a quarterly basis (for base rate loans) or at the end of each interest period (for LIBOR loans) or, if the duration of the applicable interest period exceeds three months, then every three months. The Revolving Credit Facility has a quarterly commitment fee based on the unused portion, which is determined by the Company’s leverage ratio and ranges from 0.25% to 0.35% per annum. At December 31, 2018, there were no borrowings and $19 million of letters of credit issued under the $350 million Credit Facility. The Company incurred approximately $16 million in debt issuance costs related to the Term Loans and $5 million in costs related to the Revolving Credit Facility. The debt issuance costs associated with the Term Loans were recorded as a reduction of the principal balance of the debt, and the Revolving Credit Facility costs were capitalized in Other assets. The issuance costs are being amortized through Interest expense for the duration of each respective debt facility. The net proceeds from the borrowings under the Credit Agreement and the offering of the Senior Notes were used as part of the financing for the Spin-Off. The interest expense during the year ended December 31, 2018 was $13 million . The Credit Agreement and Senior Notes contain customary covenants limiting the ability of the Company and its subsidiaries to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock of the Company, enter into transactions with affiliates, make investments, make capital expenditures, merge or consolidate with others or dispose of assets. The Credit Agreement also contains financial covenants that require the Company to maintain a Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 2:75 to 1:00 and to maintain a Consolidated Total Leverage Ratio of (i) 4:00 to 1:00 or less for the fiscal quarter ending December 31, 2018, through and including the fiscal quarter ending September 30, 2019, (ii) 3:75 to 1:00 or less for the fiscal quarter ending December 31, 2019, through and including the fiscal quarter ending September 31, 2020, (iii) 3:50 to 1:00 or less for the fiscal quarter ending December 31, 2020, through and including the fiscal quarter ending September 30, 2021 and (iv) 3:25 to 1:00 or less for the fiscal quarter ending December 31, 2021, and each fiscal quarter thereafter. As of December 31, 2018, the Company was in compliance with all covenants related to the Credit Agreement and Senior Notes. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Lease Commitments | Note 16. Lease Commitments Future minimum lease payments under operating leases having initial or remaining non cancellable lease terms in excess of one year are as follows: At December 31, 2018 2019 $ 39 2020 33 2021 28 2022 22 2023 15 Thereafter 17 $ 154 Rent expense was $39 million, $39 million and $38 million in 2018, 2017 and 2016, respectively. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measures | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments And Fair Value Measures [Abstract] | |
Financial Instruments and Fair Value Measures | Note 17. Financial Instruments and Fair Value Measures Credit and Market Risk— The Company continually monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The terms and conditions of credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer. Deferred Incentive Compensation Plan— Represents investments held in a deferred incentive compensation plan, which are included in Other assets on the accompanying Consolidated and Combined Balance Sheet. The fair value of the assets held in the funded deferred incentive compensation plan is based on quoted market prices. Foreign Currency Risk Management— The Company conducts its business on a multinational basis in a wide variety of foreign currencies. It is exposed to market risks from changes in currency exchange rates. These exposures may impact future earnings and/or operating cash flows. The exposure to market risk for changes in foreign currency exchange rates arises from transactions arising from international trade, foreign currency denominated monetary assets and liabilities, and international financing activities between subsidiaries. The Company relies primarily on natural offsets to address the exposures and may supplement this approach from time to time by entering into forward and option hedging contracts. As of December 31, 2018 there were no forward or hedging contracts. Senior Notes and Credit Agreement— As of December 31, 2018, the Company assessed the amount recorded under the Term Loans, the Senior Notes, and the Revolving Credit Facility and determined such amounts approximated fair value. The fair values of the debt are based on the quoted inactive prices and are therefore classified as Level 2 within the valuation hierarchy. The carrying value of cash and cash equivalents, account receivables, due from related parties, account payables and due to related parties contained in the Consolidated and Combined Balance Sheet approximates fair value. Fair Value of Financial Instruments — The FASB’s accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The FASB’s guidance classifies the inputs used to measure fair value into the following hierarchy: Level 1 Quoted prices in active markets for identical assets or liabilities; Level 2 Observable inputs other than the quoted prices in active markets for identical assets and liabilities; and Level 3 Unobservable inputs for which there is little or no market data, which require the Company to develop assumptions of what market participants would use in pricing the asset or liability. Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 18. Other Liabilities Years Ended December 31, 2018 2017 Environmental $ 18 $ 333 Other 11 13 $ 29 $ 346 Refer to Note 21. Commitments and Contingencies for further details on environmental and Honeywell reimbursement expense |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 19. Accumulated Other Comprehensive Income (Loss) The changes in Accumulated other comprehensive income (loss) are provided in the tables below. Changes in Accumulated Other Comprehensive Income (Loss) by Component Foreign Exchange Translation Adjustment Pension Adjustments Changes in Fair Value of Effective Cash Flow Hedges Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2016 $ (170 ) $ - $ 1 $ (169 ) Other comprehensive income (loss) before reclassifications 70 - (3 ) 67 Amounts reclassified from accumulated other comprehensive (loss) (a) - - 2 2 Net current period other comprehensive income (loss) 70 - (1 ) 69 Balance at December 31, 2017 $ (100 ) $ - $ - $ (100 ) Other comprehensive income (loss) before reclassifications (b) (77 ) (7 ) (4 ) (88 ) Amounts reclassified from accumulated other comprehensive (loss) (a) - - 4 4 Net current period other comprehensive income (loss) (77 ) (7 ) - (84 ) Pension transfers (c) - (5 ) - (5 ) Balance at December 31, 2018 $ (177 ) $ (12 ) $ - $ (189 ) (a) Amount reclassified to net revenue (b) The Pension adjustment of $7 million is shown net of a $2 million tax benefit (c) Transferred at the spin date and is shown net of a $3 million tax benefit |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2018 | |
Compensation Related Costs [Abstract] | |
Stock-Based Compensation Plans | Note 20. Stock-Based Compensation Plans On October 29, 2018, the Board adopted, and Honeywell, as the Company’s sole shareholder, approved, the 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates, as may be amended from time to time (the “Stock Incentive Plan”). On or about December 21, 2018, our Board adopted the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates. The Stock Incentive Plan provides for the grant of Stock Options, Stock Appreciation Rights, Restricted Stock Units, Restricted Stock, Other Stock-Based Awards and Cash-Based Awards. The maximum aggregate number of shares of the Company’s common stock that may be issued under the restricted stock units granted under the Stock Incentive Plan is 15,000,000. Summary of Restricted Stock Unit Activity Restricted stock unit (“RSU”) awards entitle the holder to receive one share of common stock for each unit when the units vest. RSUs are issued to certain key employees and to non-employee directors. RSUs typically become fully vested over periods ranging from 1 to 7 years and are payable in Resideo common stock upon vesting. As of December 31, 2018 11,661,816 shares were available to be granted as RSUs under the Stock Incentive Plan. Since the Spin-Off on October 29, 2018, the Company has granted the following awards: • 1,809,644 RSUs were granted to employees of Resideo with 4 year vesting periods in accordance with the Stock Incentive Plan • Honeywell stock options, RSUs, and performance based awards • 117,145 RSUs were granted to members of the Board of Directors for annual director compensation with 1 to 4 year vesting periods in accordance with the Stock Incentive Plan The following table summarizes RSU activity related to the Stock Incentive Plan: RSUs Number of Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Non-vested as of October 30, 2018 - $ - Granted 3,338,184 24.05 Vested - - Forfeited - - Non-vested as of December 31, 2018 3,338,184 $ 24.05 As of December 31, 2018, there was approximately $55 million of total unrecognized compensation cost related to non-vested RSUs granted under the Stock Incentive Plan, which is expected to be recognized over a weighted-average period of 3.53 years. Summary of Stock-Based Compensation The following table summarizes stock-based compensation expense and the related tax benefits under the Company’s plans: 2018 Stock-based compensation expense before income taxes $ 20 Less income tax benefit (5 ) Stock-based compensation expense, net of income taxes $ 15 Certain share-based compensation expense relates to stock based awards awarded to key employees of the Company as part of Honeywell’s incentive compensation plans prior to the Spin-Off. Such share-based compensation expense was $16 million, $16 million and $13 million for the period from January 1, 2018 until October 29, 2018 and the years ended December 31, 2017 and 2016, respectively, of which approximately $6 million, $5 million and $3 million, respectively, are specifically identifiable to the Company’s employees, and $10 million, $11 million and $10 million, respectively, are attributable to shared employees not specifically identifiable to the Company. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 21. 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. It believes that, as a general matter, its policies, practices and procedures are properly designed to prevent unreasonable risk of environmental damage and personal injury and that its handling, manufacture, use and disposal of hazardous substances are in accordance with environmental and safety laws and regulations. The Company has incurred remedial response and voluntary cleanup costs for site contamination and are a party to lawsuits and claims associated with environmental and safety matters, including products containing hazardous substances. Additional lawsuits, claims and costs involving environmental matters are likely to continue to arise in the future. With respect to environmental matters involving site contamination, the Company continually conducts studies, individually or jointly with other potentially responsible parties, to determine the feasibility of various remedial techniques. It is its policy to record appropriate liabilities for environmental matters when remedial efforts or damage claim payments are probable and the costs can be reasonably estimated. Such liabilities are based on the best estimate of the undiscounted future costs required to complete the remedial work. The recorded liabilities are adjusted periodically as remediation efforts progress or as additional technical, regulatory or legal information becomes available. Given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of other potentially responsible parties, technology and information related to individual sites, the Company does not believe it is possible to develop an estimate of the range of reasonably possible environmental loss in excess of our recorded liabilities. The Company expects to fund expenditures for these matters from operating cash flow. The timing of cash expenditures depends on a number of factors, including the timing of remedial investigations and feasibility studies, the timing of litigation and settlements of remediation liability, personal injury and property damage claims, regulatory approval of cleanup projects, remedial techniques to be utilized and agreements with other parties. The Company 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 are presented within Cost of goods sold for operating sites and Other expense, net for non-operating sites in the Combined Statements of Operations. The following table summarizes information concerning the recorded liabilities for environmental costs. On October 29, 2018, upon the consummation of the Spin-Off, certain environmental liabilities became subject to the Honeywell Reimbursement Agreement and were reclassified to Obligations payable to Honeywell. For additional information, see Honeywell Reimbursement Agreement below. Years Ended December 31, 2018 2017 2016 Beginning of year $ 537 $ 453 $ 474 Accruals for environmental matters deemed probable and reasonably estimable 340 282 190 Environmental liability payments (179 ) (198 ) (211 ) Less: Change due to the Honeywell Reimbursement Agreement Payments (86 ) - - Less: Liabilities subject to the Honeywell Reimbursement Agreement Payments (592 ) - - End of year $ 20 $ 537 $ 453 The Environmental liabilities are included in the following balance sheet accounts: December 31, 2018 2017 Accrued liabilities $ 2 $ 204 Other liabilities 18 333 $ 20 $ 537 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 our combined results of operations and operating cash flows in the periods recognized or paid. Honeywell Reimbursement Agreement On October 29, 2018, in connection with the Spin-Off, the Company entered into the Honeywell 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 will be subject to a cap of $140 million (exclusive of any late payment fees up to 5% per annum). The scope of the Company’s current environmental remediation obligations subject to the Honeywell Reimbursement Agreement relates to approximately 230 sites or groups of sites that are undergoing environmental remediation under U.S. federal or state law and agency oversight for contamination associated with Honeywell legacy business operations. The ongoing environmental remediation is designed to address contaminants at upland and sediment sites, which include, among others, metals, organic compounds and polychlorinated biphenyls, through a variety of methods, which include, among others, excavation, capping, in-situ stabilization, groundwater treatment and dredging. In addition, the company obligations subject to the Honeywell Reimbursement Agreement will include certain liability with respect to (i) hazardous exposure or toxic tort claims associated with the specified sites that arise after the Spin-Off, if any, (ii) currently unidentified releases of hazardous substances at or associated with the specified sites, (iii) other environmental claims associated with the specified sites and (iv) consequential damages. Payments in respect of the liabilities arising in a given year will be made quarterly throughout such year on the basis of an estimate of the liabilities and recoveries provided by Honeywell. Following the end of any such year, Honeywell will provide the company with a calculation of the amount of payments and the recoveries actually received. Payment amounts under the Honeywell Reimbursement Agreement will be deferred to the extent that a specified event of default has occurred and is continuing under certain indebtedness, including under the Company’s principal credit agreement, or the payment thereof causes the Company to not be compliant with certain financial covenants in certain indebtedness, including the Company’s principal credit agreement on a pro forma basis, including the maximum total leverage ratio (ratio of consolidated debt to consolidated EBITDA, which excludes any amounts owed to Honeywell under the Honeywell Reimbursement Agreement), and the minimum interest coverage ratio. A 5% late payment fee will accrue on all amounts that are not otherwise entitled to be deferred under the terms of the Honeywell Reimbursement Agreement, without prejudice to any other rights that Honeywell may have for late payments. The obligation will continue 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. The following table summarizes information concerning our Honeywell Reimbursement Agreement liabilities: Year Ended December 31, 2018 Beginning of year $ - Liabilities subject to the Honeywell Reimbursement Agreement Payments 592 Accruals for indemnification liabilities deemed probable and reasonably estimable 49 Indemnification payment (25 ) End of year $ 616 Honeywell Reimbursement Agreement liabilities are included in the following balance sheet accounts: Year Ended December 31, 2018 Accrued liabilities $ 140 Obligations payable to Honeywell 476 $ 616 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 environmental matters can be determined although they could be material to our combined results of operations and operating cash flows in the periods recognized or paid. Independent of the company’s payments under the Honeywell Reimbursement Agreement, the company will have ongoing liability for certain environmental claims which are part of the Company’s going forward business. Tax Matters Agreement On October 29, 2018, in connection with the Spin-Off, the Company entered into a Tax Matters Agreement (the “Tax Matters Agreement”) with Honeywell pursuant to which it is responsible and will indemnify Honeywell for all taxes, including income taxes, sales taxes, VAT and payroll taxes, relating to our business for all periods, including periods prior to the consummation of the Spin-Off. In addition, the Tax Matters Agreement addresses the allocation of liability for taxes that are incurred as a result of restructuring activities undertaken to effectuate the Spin-Off. In addition, the Tax Matters Agreement provides that the Company is required to indemnify Honeywell for any taxes (and reasonable expenses) resulting from the failure of the Spin-Off and related internal transactions to qualify for their intended tax treatment under U.S. federal, state and local income tax law, as well as foreign tax law, where such taxes result from (a) breaches of covenants and representations it makes and agrees to in connection with the Spin-Off, (b) the application of certain provisions of U.S. federal income tax law to these transactions or (c) any other action or omission (other than actions expressly required or permitted by the Separation and Distribution Agreement, the Tax Matters Agreement or other ancillary agreements) the Company takes after the consummation of the Spin-Off that gives rise to these taxes. As of December 31, 2018, the Company has indemnified Honeywell for $153 million, which is included in Obligations payable to Honeywell. The Tax Matters Agreement imposes certain restrictions on us and our subsidiaries (including restrictions on share issuances, redemptions or repurchases, business combinations, sales of assets and similar transactions) that are designed to address compliance with Section 355 of the Internal Revenue Code of 1986, as amended, and are intended to preserve the tax-free nature of the Spin-Off. Under the Tax Matters Agreement, these restrictions will apply for two years following the consummation of the Spin-Off, unless Honeywell gives its consent for us to take a restricted action, which it is permitted to grant or withhold at its sole discretion. Even if Honeywell does consent to our taking an otherwise restricted action, the Company will remain liable to indemnify Honeywell in the event such restricted action gives rise to an otherwise indemnifiable liability. These restrictions may limit the Company’s ability to pursue strategic transactions or engage in new businesses or other transactions that may maximize the value of its business, and might discourage or delay a strategic transaction that stockholders may consider favorable. Trademark Agreements The Company and Honeywell entered into a 40-year Trademark License Agreement (“the Trademark Agreement”) that authorizes the Company’s use of certain license trademarks in the operation of Resideo’s business for the advertising, sale and distribution of certain licensed products. In exchange, the Company will pay 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 Consolidated and Combined Statements of Operations. For the period ended December 31, 2018, royalty fees were $4 million, net of a one-time credit of $2 million received for inventory on hand as of the Spin-Off. Other Matters The Company is subject to other 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 benefit plans, 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 of outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on a careful Consolidated and 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 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. Years Ended December 31, 2018 2017 2016 Beginning of year $ 17 $ 24 $ 27 Accruals for warranties/guarantees issued during the year 17 10 7 Adjustment of pre-existing warranties/guarantees (1 ) (4 ) - Settlement of warranty/guarantee claims (7 ) (13 ) (10 ) End of year $ 26 $ 17 $ 24 |
Pension
Pension | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension | Note 22. Pension Prior to the Spin-Off, certain of Resideo’s employees participated in multiple U.S. and non-U.S. defined benefit pension plans (the “Shared Plans”) sponsored by Honeywell which includes participants of other Honeywell subsidiaries and operations. The Company accounted for participation in the Shared Plans as a multiemployer benefit plan. Accordingly, it did not record an asset or liability to recognize the funded status of the Shared Plans. The related pension expense was allocated based on annual service cost of active participants and reported within Costs of goods sold and Selling, general and administrative expenses in the Consolidated and Combined Statements of Operations. The pension expense related to participation in the Shared Plan for the period from January 1, 2018 until October 29, 2018 and years ended December 31, 2017 and 2016 was $11 million, $16 million and $16 million, respectively. As of the date of separation from Honeywell, these employees’ and certain former Honeywell employees’ entitlement to benefits in Honeywell’s plans were transferred to Resideo sponsored plans. The Resideo defined benefit pension plans have substantially similar benefit formulas as the Honeywell defined benefit pension plans. Moreover, vesting service, benefit accrual service and compensation credited under the Honeywell defined benefit pension plans apply to the determination of pension benefits under the Resideo defined benefit pension plan. 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 and Switzerland. The following tables summarize the balance sheet impact, including the benefit obligations, assets and funded status associated with the significant pension plans. Pension Benefits U.S. Plans Non-U.S. Plans Change in benefit obligation: Benefit obligation at October 29, 2018 (Spin-Off) $ 279 $ 95 Service cost 1 1 Interest cost 2 - Actuarial (gains) losses 5 (3 ) Benefits paid (1 ) - Foreign currency translation - - Benefit obligation at December 31, 2018 $ 286 $ 93 Change in plan assets: Fair value of plan assets at October 29, 2018 (Spin-Off) $ 279 $ 20 Actual loss on plan assets (4 ) - Company contributions - - Benefits paid (1 ) - Foreign currency translation - - Fair value of plan assets at December 31, 2018 274 20 Funded status of plans $ (12 ) $ (73 ) Amounts recognized in the Balance Sheet consist of: Accrued pension liabilities - noncurrent (1) $ (12 ) $ (73 ) Net amount recognized $ (12 ) $ (73 ) (1) Included in Pension obligations Amounts recognized in Accumulated other comprehensive (income) loss associated with significant pension plans at December 31, 2018 are as follows: Pension Benefits U.S. Plans Non-U.S. Plans Prior service credit $ (4 ) $ - Net actuarial loss 16 5 Net amount recognized $ 12 $ 5 The components of net periodic benefit cost and other amounts recognized in Comprehensive (income) loss for significant pension plan include the following components: Pension Benefits U.S. Plans Non-U.S. Plans 2018 2017 2016 2018 2017 2016 Net Periodic Benefit Cost Service cost $ 1 $ - $ - $ 1 $ - $ - Interest cost 2 - - - - - Expected return on plan assets (3 ) - - - - - Amortization of prior service (credit) cost - - - - - - Actuarial losses - - - - - - Net periodic benefit cost $ - $ - $ - $ 1 $ - $ - The components of net periodic benefit cost other than the service cost are included in Other expense, Net in the Consolidated and Combined Statements of Operations for the years ended December 31, 2018, 2017 and 2016, respectively. Pension Benefits U.S. Plans Non-U.S. Plans 2018 2017 2016 2018 2017 2016 Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive (Income) Loss Actuarial losses (gains) $ 12 $ - $ - $ (3 ) $ - $ - Prior service (credit) - - - - - - Foreign currency translation - - - - - - Total recognized in other comprehensive loss (income) $ 12 $ - $ - $ (3 ) $ - $ - Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 12 $ - $ - $ (2 ) $ - $ - The estimated prior service (credit) for pension benefits that will be amortized from Accumulated other comprehensive (income) loss into net periodic benefit (income) cost in 2019 are expected to be $(1) million and $- million for U.S. and non-U.S. pension plans. Significant actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for benefit plans are presented in the following table as weighted averages. Pension Benefits 2018 U.S. Plans Non-U.S. Plans Actuarial assumptions used to determine benefit obligations as of December 31: Discount rate 4.5 % 1.9 % Expected annual rate of compensation increase 3.4 % 2.3 % Actuarial assumptions used to determine net periodic benefit (income) cost for the two months ended December 31: Discount rate - benefit obligation 4.5 % 1.9 % Expected rate of return on plan assets 5.7 % 3.3 % Expected annual rate of compensation increase 3.4 % 2.3 % The discount rate for the U.S. pension plan reflects the current rate at which the associated liabilities could be settled at the measurement date of December 31. To determine discount rates for the U.S. pension plan, the Company uses a modeling process that involves matching the expected cash outflows of its benefit plans to a yield curve constructed from a portfolio of high quality, fixed-income debt instruments. The Company uses the single weighted-average yield of this hypothetical portfolio as a discount rate benchmark. The expected rate of return on U.S. plan assets of 5.7% is a long-term rate based on historical plan asset returns over varying long-term periods combined with current market conditions and broad asset mix considerations. The Company reviews the expected rate of return on an annual basis and revise it as appropriate. For non-U.S. benefit plans actuarial assumptions reflect economic and market factors relevant to each country. Pension Benefits The following amounts relate to significant pension plans with accumulated benefit obligations exceeding the fair value of plan assets. December 31, 2018 U.S. Plans Non-U.S. Plans Projected benefit obligation $ 286 $ 93 Accumulated benefit obligation $ 281 $ 80 Fair value of plan assets $ 274 $ 20 The Company has retained Aon as its Outsourced Chief Investment Officer; however, the Company has appointed an internal fiduciary committee that monitors adherence to the investment guidelines Aon will follow. The Company employs an investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities and plan funded status. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value and small and large capitalizations. Other assets such as real estate and hedge funds, may be used to improve portfolio diversification. The non-U.S. investment policies are different for each country as local regulations, funding requirements, and financial and tax considerations are part of the funding and investment allocation process in each country. The fair values of both U.S. and non-U.S. pension plans assets by asset category are as follows: U.S. Plans December 31, 2018 Total Level 1 Level 2 Level 3 Equities: U.S. equities $ 45 $ 45 $ - $ - Non-U.S. equities 48 48 - - Real estate investment funds 26 26 - - Fixed Income: Short term investments 12 12 - - Corporate bonds 143 143 - - Total assets at fair value $ 274 $ 274 $ - $ - Non-U.S. Plans December 31, 2018 Total Level 1 Level 2 Level 3 Equities: U.S. equities $ 1 $ 1 $ - $ - Non-U.S. equities 3 3 - - Real estate investment funds 2 2 - - Fixed Income: Short term investments 4 4 - - Government securities 1 1 - - Corporate bonds 2 2 - - Insurance contracts 6 - - 6 Direct investments: Other 1 1 - - Total assets at fair value $ 20 $ 14 $ - $ 6 The following table summarizes changes in the fair value of Level 3 assets for both U.S. and Non-U.S. plans: U.S. Plans Non-U.S. Plans Balance at October 29, 2018 $ - $ 5 Actual return on plan assets: Relating to assets still held at year-end - 1 Relating to assets sold during the year - - Purchases, sales and settlements, net - - Balance at December 31, 2018 $ - $ 6 Common stocks, preferred stocks, real estate investment trusts, and short-term investments are valued at the closing price reported in the active market in which the individual securities are traded. Corporate bonds, mortgages, asset-backed securities, and government securities are valued either by using pricing models, bids provided by brokers or dealers, quoted prices of securities with similar characteristics or discounted cash flows and as such include adjustments for certain risks that may not be observable such as credit and liquidity risks. Certain securities are held in collective trust funds which are valued using net asset values provided by the administrators of the funds. Investments in private equity, debt, real estate funds and direct investments are valued at estimated fair value based on quarterly financial information received from the investment advisor and/or general partner. Valuation estimates are periodically supplemented by third party appraisals. The Company’s general funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards. In 2018, it was not required to make contributions to the U.S. pension plans and no contributions were made. It will not be required to make any contributions to the U.S. pension plans in 2019. In 2018, contributions of less than $1 million were made to the non-U.S. pension plans to satisfy regulatory funding requirements. In 2019, the Company expects to make contributions of cash and/or marketable securities of approximately $1 million to the non-U.S. pension plans to satisfy regulatory funding standards. Contributions for both the U.S. and non-U.S. pension plans do not reflect benefits paid directly from Company assets. Benefit payments, including amounts to be paid from Company assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: U.S. Plans Non-U.S. Plans 2019 $ 13 $ 1 2020 $ 17 $ 1 2021 $ 18 $ 2 2022 $ 18 $ 2 2023 $ 20 $ 2 2024-2028 $ 106 $ 13 |
Segment Financial Data
Segment Financial Data | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Financial Data | Note 23. Segment Financial Data The Company globally manages its business operations through two reportable operating segments, Products and Solutions Products and Solutions —The Products and Solutions business is a leading global provider of residential security and intrusion products, consumer thermostats, consumer HVAC and consumer awareness systems, residential thermal solutions and residential water controls that allow owners of homes to stay connected and in control of their comfort, security and energy use. Global Distribution —The Global Distribution business is a leading global distributor of security and low voltage fire protection products. Segment information is consistent with how management reviews the businesses, makes investing and resource allocation decisions and assesses operating performance. The Company ’s CODM evaluates segment performance based on segment profit. Segment profit is measured as segment income (loss) before taxes excluding other expense, net (primarily environmental cost now subject to the Honeywell Reimbursement Agreement), interest expense, pension expense, environmental expense related to Resideo’s owned sites and repositioning charges. Years Ended December 31, 2018 2017 2016 Revenue Total Products and Solutions revenue $ 2,474 $ 2,379 $ 2,471 Less: Intersegment revenue 305 337 371 External Products and Solutions revenue 2,169 2,042 2,100 External Global Distribution revenue 2,658 2,477 2,355 Total revenue $ 4,827 $ 4,519 $ 4,455 Years Ended December 31, 2018 2017 2016 Depreciation and amortization Products and Solutions $ 55 $ 57 $ 53 Global Distribution 11 10 11 Total $ 66 $ 67 $ 64 Years Ended December 31, 2018 2017 2016 Segment profit Products and Solutions $ 381 $ 353 $ 426 Global Distribution 148 131 104 Total $ 529 $ 484 $ 530 Years Ended December 31, 2018 2017 2016 Capital expenditures Products and Solutions $ 73 $ 44 $ 60 Global Distribution 8 7 11 Total $ 81 $ 51 $ 71 A reconciliation of segment profit to consolidated and combined income from continuing operations before taxes is as follows: Years Ended December 31, 2018 2017 2016 Segment profit $ 529 $ 484 $ 530 Pension expense (13 ) (16 ) (16 ) Repositioning (5 ) (23 ) (19 ) Other expense, net (1) (369 ) (279 ) (185 ) Interest expense (20 ) - - Environmental expense (18 ) - - Income before taxes $ 104 $ 166 $ 310 (1) Includes $2 million of pension expense for the year ended December 31, 2018. The Company’s CODM 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. |
Geographic Areas - Financial
Geographic Areas - Financial | 12 Months Ended |
Dec. 31, 2018 | |
Segments Geographical Areas [Abstract] | |
Geographic Areas - Financial | Note 24. Geographic Areas—Financial Net Revenue (1) Years Ended December 31, Long-lived Assets (2) December 31, 2018 2017 2016 2018 2017 2016 United States $ 3,289 $ 3,074 $ 3,047 $ 184 $ 162 $ 163 Europe 1,138 1,063 1,051 91 82 70 Other International 400 382 357 25 21 28 $ 4,827 $ 4,519 $ 4,455 $ 300 $ 265 $ 261 (1) Revenue between geographic areas approximate market and are not significant. Net revenue are classified according to their country of origin. Included in United States net revenue are export sales of $31 million, $29 million and $43 million in 2018, 2017 and 2016, respectively. (2) Long-lived assets are comprised of property, plant and equipment—net. |
Unaudited Quarterly Financial I
Unaudited Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
Unaudited Quarterly Financial Information | Note 25. Unaudited Quarterly Financial Information The following tables show selected unaudited quarterly results of operations for 2018 and 2017. The quarterly data have been prepared on the same basis as the audited annual financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the results of operations for these periods. 2018 March 31 June 30 September 30 (b) (c) December 31 Year Ended December 31, Net Revenue $ 1,165 $ 1,196 $ 1,200 $ 1,266 $ 4,827 Gross Profit 343 346 347 330 1,366 Net Income 45 33 311 16 405 Earnings per share -basic (a) 0.37 0.27 2.54 0.13 3.31 Earnings per share - diluted (a) 0.37 0.27 2.54 0.13 3.30 2017 March 31 June 30 September 30 (b) December 31 (c) Year Ended December 31, Net Revenue $ 1,062 $ 1,096 $ 1,152 $ 1,209 $ 4,519 Gross Profit 311 308 336 361 1,316 Net Income (Loss) 16 16 23 (449 ) (394 ) Earnings (loss) per share - basic (a) 0.13 0.13 0.19 (3.67 ) (3.22 ) Earnings (loss) per share - diluted (a) 0.13 0.13 0.19 (3.67 ) (3.22 ) (a) On October 29, 2018, the date of the Spin-Off, 122,498,794 122,498,794 (b) Basic and diluted EPS for the three months ended September 30, 2018 and September 30, 2017 has been revised from the third quarter 10-Q to correctly reflect the exclusion of 467,764 treasury shares received by Resideo as part of the Spin-Off. This increased earnings per share by $0.01 and $0.02 for the three and nine months ended September 30, 2018, respectively, and had no impact on earnings per share for the three and nine months ended September 30, 2017. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting Principles —The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. The following is a description of Resideo’s significant accounting policies. |
Principles of Consolidation | Principles of Co nsolidation —The Consolidated and Combined Financial Statements incl ude the accounts of Resideo Technologies, Inc. and all of its subsidiaries in which a controlling interest is maintained. All intercompany transactions and balances are eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents —Cash and cash equivalents include cash on hand and highly liquid investments having an original maturity of three months or less. |
Trade Receivables and Allowance for Doubtful Accounts | Trade Receivables and Allowance for Doubtful Accounts —Trade accounts receivable are recorded at the invoiced amount as a result of transactions with customers. The Company maintains allowances for doubtful accounts for estimated losses as a result of customers’ inability to make required payments. The Company estimates anticipated losses from doubtful accounts based on days past due as measured from the contractual due date and historical collection history. The Company also takes into consideration changes in economic conditions that may not be reflected in historical trends, for example customers in bankruptcy, liquidation or reorganization. Receivables are written-off against the allowance for doubtful accounts when they are determined uncollectible. Such determination includes analysis and consideration of the particular conditions of the account, including time intervals since last collection, customer performance against agreed upon payment plans, solvency of customer and any bankruptcy proceedings. |
Inventories | Inventories —Inventories in the Products and Solutions business are stated at the lower of cost or net realizable value, determined on a first-in, first-out basis, including direct material costs and direct and indirect manufacturing costs, or net realizable value. Inventories in the Global Distribution business are stated at average cost. Reserves are maintained for obsolete, inactive and surplus items. |
Property, Plant and Equipment | Property, Plant and Equipment —Property, plant and equipment are recorded at cost, less accumulated depreciation. For financial reporting, the straight-line method of depreciation is used over the estimated useful lives of 10 to 50 years for buildings and improvements, 3 to 16 years for machinery and equipment and 3 to 10 years for tooling equipment. |
Goodwill | Goodwill —Goodwill is subject to impairment testing annually as of October 1, and whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. This testing compares carrying values to fair values and, when necessary, the carrying value of these assets is impaired. The Company completed its annual goodwill impairment test as of the Spin-Off date and determined that no impairment was necessary. No impairment indicators have been identified since the last impairment test date. |
Other Intangible Assets with Determinable Lives | Other Intangible Assets with Determinable Lives —Other intangible assets with determinable lives consist of customer lists, technology, patents and trademarks and software intangibles and are amortized over their estimated useful lives, ranging from 4 to 15 years. |
Warranties and Guarantees | Warranties and Guarantees —Expected warranty costs for products sold are recognized based on an estimate of the amount that eventually will be required to settle such obligations. These accruals are based on factors such as past experience, length of the warranty and various other considerations. Costs of product recalls, which may include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the recalled part, are accrued as part of the warranty accrual at the time an obligation becomes probable and can be reasonably estimated. These estimates are adjusted from time to time based on facts and circumstances that impact the status of existing claims. |
Revenue Recognition | Revenue Recognition — Product and service revenues are recognized when or as the Company transfers control of the promised products or services to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. In the sale of products, the terms of a contract or the historical business practice can give rise to variable consideration due to, but not limited to, discounts and bonuses. The Company estimates variable consideration at the most likely amount that will be received from customers and reduce revenues recognized accordingly. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company. The Company adopted the revenue recognition standard as of January 1, 2018 (see Note 6 Revenue Recognition and Contracts with Customers). Prior to adoption, product and service revenues were recognized when there was evidence of a sales agreement, delivery of goods had occurred or services had been rendered, the sales price was fixed or determinable, and the collectability of revenue was reasonably assured. Service sales, principally representing network subscription services, were recognized over the contractual period or as services were rendered. Revenues from contracts with multiple element arrangements were recognized as each element was earned based on the relative fair value of each element provided the delivered elements had value to customers on a stand-alone basis. Amounts allocated to each element were based on its objectively determined fair value, such as the sales price for the product or service when it was sold separately or competitor prices for similar products or services. Sales incentives and allowances were recognized as a reduction to revenue at the time of the related sale. Sales, use and value added taxes collected by the Company and remitted to various government authorities were not recognized as revenues and are reported on a net basis. Shipping and handling fees billed to customers were included in Cost of goods sold. |
Royalty | Royalty — 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 will pay a royalty fee of 1.5% of net revenue of the licensed products to Honeywell which is recorded in Selling, general and administrative expense on the Consolidated and Combined Statement of Operations. |
Environmental | Environmental —The Company 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 costs are presented within Cost of goods sold for operating sites and Other expense, net for non-operating sites in the Consolidated and Combined Statements of Operations. For additional information, see Note 21 . Commitments and Contingencies. |
Honeywell Reimbursement Agreement | Honeywell Reimbursement Agreement — In connection with the Spin-Off, the Company entered into an Indemnification and Reimbursement Agreement with Honeywell (the “Honeywell Reimbursement Agreement”) on October 14, 2018, pursuant to which it has an obligation to make cash payments to Honeywell in amounts equal to 90% of payments, which include amounts billed, with respect to certain environmental claims, remediation and, to the extent arising after the Spin-Off, hazardous exposure or toxic tort claims, in each case, including consequential damages (the “liabilities”) in respect of specified properties contaminated through historical business operations, including the legal and other costs of defending and resolving such liabilities, 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 amount payable in respect of such liabilities arising in any given year is subject to a cap of $140 million (exclusive of any late payment fees up to 5% per annum). Honeywell reimbursement expenses are presented within Other expense, net in the Consolidated and Combined Statement of Operations and within Accrued liabilities and Obligations payable to Honeywell in the Consolidated and Combined Balance She et. For additional information, see Note 21. Commitments and Contingencies. |
Tax Indemnification Agreement | Tax Indemnification Agreement —The Tax Matters Agreement provides that Resideo is required to indemnify Honeywell for any taxes (and reasonable expenses) resulting from the failure of the Spin-Off and related internal transactions to qualify for their intended tax treatment under U.S. federal, state and local income tax law, as well as foreign tax law, where such taxes result from (a) breaches of covenants and representations we make and agree to in connection with the Spin-Off, (b) the application of certain provisions of U.S. federal income tax law to these transactions or (c) any other action or omission (other than actions expressly required or permitted by the Separation and Distribution Agreement, the Tax Matters Agreement or other ancillary agreements) we take after the consummation of the Spin-Off that gives rise to these taxes. As of December 31, 2018, the Company has indemnified Honeywell for $153 million. See “Certain Relationships and Related Party Transactions—Agreements with Honeywell—Tax Matters Agreement.” |
Research and Development | Research and Development —The Company conducts research and development (“R&D”) activities, which consist primarily of the development of new products and product applications. R&D costs are charged to expense as incurred. Such costs are included in Cost of goods sold and amount to $ 105 million, $1 20 million and $1 06 million for the years ended December 31, 201 8 , 201 7 and 201 6 , respectively |
Stock-Based Compensation Plans | Stock-Based Compensation Plans —The principal awards issued under Resideo’s stock-based compensation plans, which are desc ribed in Note 20. Stock-Based Compensation Plans, are restricted stock units. The cost for such awards is measured at the grant date based on the fair value of the award. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods (generally the vesting period of the equity award) and is included in Selling, general and administrative expenses in the Consolidated and Combined Statements of Operations. Forfeitures are estimated at the time of grant to recognize expense for those awards that are expected to vest and are based on historical forfeiture rates. |
Pension Benefits | Pension Benefits — The guidance requires that the Company disaggregates the service cost component of net benefit costs and report those costs in the same line item or items in the Consolidated Statement of Operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other non-service components of net benefit costs are required to be presented separately from the service cost component and outside of income from operations. The Company has recorded the service cost component of Pension ongoing (income) expense in Costs of goods sold and Selling, general and administrative expenses. The remaining components of net benefit costs within Pension ongoing (income) expense, primarily interest costs and assumed return on plan assets, are recorded in Other expense, net. The Company recognizes net actuarial gains or losses in excess of 10% of the greater of the fair value of plan assets or the plans’ projected benefit obligation (the corridor) annually in the fourth quarter each year (MTM Adjustment). The MTM Adjustment will also be reported in Other expense, net. |
Foreign Currency Translation | Foreign Currency Translation —Assets and liabilities of operations outside the United States with a functional currency other than U.S. Dollars are translated into U.S. Dollars using year-end exchange rates. Revenue, costs and expenses are translated at the average exchange rates in effect during the year. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive income (loss). |
Income Taxes | Income Taxes —Significant judgment is required in evaluating tax positions. The Company establishes additional reserves for income taxes when, despite the belief that tax positions are fully supportable, there remain certain positions that do not meet the minimum recognition threshold. The approach for evaluating certain and uncertain tax positions is defined by the authoritative guidance which determines when a tax position is more likely than not to be sustained upon examination by the applicable taxing authority. In the normal course of business, the Company and its subsidiaries are examined by various federal, state and foreign tax authorities. The Company regularly assesses the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability and deferred taxes in the period in which the facts that give rise to a change in estimate become known. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share — Basic earnings (loss) per share is based on the weighted average number of common shares outstanding. Diluted earnings (loss) per share is based on the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. For additional information, see Note 3. Earnings Per Share. |
Use of Estimates | Use of Estimates —The preparation of the Company ’s Consolidated and Combined Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the Consolidated and Combined Financial Statements and related disclosures in the accompanying Notes. Actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of changes are reflected in the Consolidated and Combined Financial Statements in the period they are determined to be necessary. Estimates are used when accounting for, stock-based compensation, pension benefits, contingent consideration, indemnification liabilities, goodwill and intangible assets, and valuation allowances for receivables and inventory reserves, deferred tax assets, and the amounts of revenue and expenses reported during the period. |
Reclassification | Reclassification — A reclassification of a prior period amount has been made to conform to the presentation adopted for the current period. For the years ended December 31, 2017 and December 31, 2016 we reclassified $(2) and $(3) million respectively from Interest to Other expense, net in the Consolidated and Combined Statement of Operations to conform with the current period presentation. |
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 combined financial position or results of operations. In February 2016, the FASB issued new guidance on accounting for leases, which was further amended in July 2018 and December 2018. The new guidance requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases, but does not significantly impact the manner in which expense is recognized on the income statement. Enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases are also required. Lessor accounting is substantially unchanged from existing guidance. The Company adopted the new guidance effective January 1, 2019, and will apply the changes prospectively, recognizing a cumulative-effect adjustment to the beginning balance of retained earnings as of the adoption date. The primary impact upon adoption of the new guidance is the recognition of right of use assets and lease liabilities for qualifying operating leases on the Company’s balance sheet, predominantly related to real estate. Upon adoption, the Company currently expects to recognize an aggregate lease liability ranging from $105 million to $117 million, with a corresponding right of use asset, calculated based on the present value of the remaining minimum lease payments for qualifying leases as of January 1, 2019. The adoption of the new guidance is not expected to have a material impact to the consolidated statements of operations, stockholders’ equity, and cash flows. The new guidance also provides practical expedients and policy elections for an entity’s ongoing accounting. The Company will elect the short-term lease exception for qualifying leases, which excludes those leases that qualify as short-term leases from lease liability and right of use asset recognition. The Company also currently expects to elect the practical expedient to not separate lease and non-lease components for its real estate and automobile leases. In October 2016, the FASB issued an accounting standard update which requires an entity to recognize the income tax consequences of an intra- entity transfer of an asset, other than inventory, at the time the entity transfer occurs rather than when the asset is ultimately transferred to a third party, as required under current U.S. GAAP. The guidance is intended to reduce diversity in practice, particularly for transfers involving intellectual property. Subsequent to 2017 fiscal year, the Company adopted the accounting standard update as of January 1, 2018. The guidance requires application on a modified retrospective basis. The adoption of this guidance increases the Company’s deferred tax assets by approximately $0.2 million with a cumulative-effect adjustment to retained earnings of the same amount. In January 2017, the FASB issued guidance which eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. The annual assessment of goodwill impairment will be determined by using the difference between the carrying amount and the fair value of the reporting unit. The standard is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019 and is to be applied on a prospective basis. The Company early adopted this standard as of Spin-Off date. The adoption had no impact on the consolidated financial statements as of the date of adoption or for the year ended December 31, 2018. In February 2018, the FASB issued guidance that allows for an entity to elect to reclassify the income tax effects on items within accumulated other comprehensive income resulting from the U.S. Tax Cuts and Jobs Act (“U.S. Tax Reform”) to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. Upon adoption, the Company does not expect to elect to reclassify the stranded income tax effects of U.S. Tax Reform from accumulated other comprehensive income to retained earnings. In August 2018, the FASB issued guidance which amends the current disclosure requirements regarding defined benefit pensions and other post retirement plans and allows for the removal of certain disclosures, while adding certain new disclosure requirements. This standard is effective for fiscal years beginning after December 15, 2020 and allows for early adoption. The Company does not expect this new standard to have a significant impact to its disclosures. Recently Adopted Accounting Pronouncement On January 1, 2018, the Company adopted new guidance on revenue from contracts with customers using the modified retrospective method applied to contracts that were not completed as of January 1, 2018. As a result of adopting the new guidance, the Company determined there are no material impacts on the Consolidated and Combined Financial Statements as the Company’s previous revenue recognition was consistent with the new standard. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The details of the earnings per share calculations for the years ended December 31, 2018, 2017 and 2016 are as follows: Years Ended December 31, Basic: 2018 2017 2016 Net income (loss) $ 405 $ (394 ) $ 177 Weighted average common shares outstanding (in thousands) 122,499 122,499 122,499 Earnings (Loss) Per Share - Basic $ 3.31 $ (3.22 ) $ 1.44 Years Ended December 31, Diluted: 2018 2017 2016 Net income (loss) $ 405 $ (394 ) $ 177 Weighted average common shares outstanding - Basic (in thousands) 122,499 122,499 122,499 Dilutive effect of unvested RSUs 125 - - Weighted average common shares outstanding - Diluted (in thousands) 122,624 122,499 122,499 Earnings (Loss) Per Share - Diluted $ 3.30 $ (3.22 ) $ 1.44 |
Related Party Transactions wi_2
Related Party Transactions with Honeywell (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Summary of Due from Related Parties, Current | Due from related parties, current consists of the following: December 31, 2017 Cash pooling and short-term notes receivables $ 10 Related party note receivables, current 7 Receivables from related parties 6 $ 23 |
Summary of Due to Related Parties, Current | Due to related parties, current consists of the following: December 31, 2017 Cash pooling and short-term notes payables $ 23 Payables to related parties 36 Related parties notes payables, current 1 $ 60 |
Summary of Components of Net Transfers to and from Honeywell | The components of the net transfers to and from Honeywell as of December 31, 2018, 2017 and 2016 are as follows: Years Ended December 31, 2018 2017 2016 General financing activities $ (383 ) $ (547 ) $ (384 ) Distribution to Honeywell in connection with Spin-Off (1,415 ) - - Net contribution of assets and liabilities upon Spin-Off 81 - - Unbilled corporate allocations 228 260 240 Purchases from Honeywell 161 168 160 Mandatory transition tax (85 ) 156 - Sales to Honeywell (12 ) (13 ) (18 ) Stock compensation expense and other compensation awards 16 16 13 Unbilled pension expense 11 14 13 Net increase (decrease) in invested equity $ (1,398 ) $ 54 $ 24 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregated Revenue | Revenues by channel are as follows: 2018 U.S. and Canada $ 2,147 EMEA (1) 456 India 55 Global Distribution 2,658 Comfort 1,114 Security 479 RTS 576 Products and Solutions (2) 2,169 Net revenue $ 4,827 (1) EMEA represents Europe, the Middle East and Africa. (2) Products and Solutions sales channel naming convention changed from what was disclosed in the 10-Q. Comfort & Care was broken out into Comfort and RTS. |
Repositioning Charges (Tables)
Repositioning Charges (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Summary of Repositioning Charge | A summary of repositioning charge follows: Years Ended December 31, 2018 2017 2016 Severance $ 4 $ 23 $ 21 Asset impairments 1 1 - Reserve adjustments - (1 ) (2 ) Total net repositioning charge $ 5 $ 23 $ 19 |
Summary of Pretax Distribution of Total Net Repositioning Charges by Statement of Operations Classification | The following table summarizes the pretax distribution of total net repositioning charges by statement of operations classification: Years Ended December 31, 2018 2017 2016 Cost of goods sold $ 4 $ 17 $ - Selling, general and administrative expenses 1 6 19 $ 5 $ 23 $ 19 |
Summary of Status of Total Repositioning Reserves Related to Severance Cost | The following table summarizes the status of total repositioning reserves related to severance cost: Total Balance at December 31, 2015 $ 13 2016 Charges 21 2016 Usage – cash (18 ) 2016 Usage – noncash - Adjustments (2 ) Foreign currency translation 1 Balance at December 31, 2016 15 2017 Charges (a) 24 2017 Usage – cash (17 ) 2017 Usage – noncash (a) (1 ) Adjustments (1 ) Foreign currency translation 2 Balance at December 31, 2017 22 2018 Charges 5 2018 Usage – cash (9 ) 2018 Usage – noncash - Other (4 ) Foreign currency translation (1 ) Balance at December 31, 2018 $ 13 (a) Includes asset impairment of $1 million |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income And Expenses [Abstract] | |
Summary of Other Expense Net | Years Ended December 31, 2018 2017 2016 Environmental expense $ 323 $ 281 $ 188 Honeywell reimbursement agreement expense 49 - - Other, net (3 ) (2 ) (3 ) $ 369 $ 279 $ 185 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Taxes | Income before taxes Years Ended December 31, 2018 2017 2016 U.S. $ (169 ) $ (107 ) $ 47 Non-U.S. 273 273 263 $ 104 $ 166 $ 310 |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) Years Ended December 31, 2018 2017 2016 Tax expense (benefit) consists of: Current: U.S. $ (26 ) $ 215 $ 88 Non-U.S. 48 48 49 $ 22 $ 263 $ 137 Deferred: U.S. $ (15 ) $ (6 ) $ 2 Non-U.S. (308 ) 303 (6 ) (323 ) 297 (4 ) $ (301 ) $ 560 $ 133 |
Schedule of Federal Statutory Income Tax Rate Reconciliation with Effective Income Tax Rate | Years Ended December 31, 2018 2017 2016 The U.S. federal statutory income tax rate is reconciled to the effective income tax rate as follows: U.S. federal statutory income tax rate 21.0 % 35.0 % 35.0 % Taxes on non-U.S. earnings below U.S. tax rate (7.3 ) (33.4 ) (15.2 ) U.S. state income taxes 6.4 3.4 2.5 Reserves for tax contingencies (4.3 ) 3.2 0.8 U.S. Tax Reform and related items (385.1 ) 273.1 - GILTI/FDII 6.0 - - Non-deductible expenses 75.4 58.8 20.5 Tax credits (2.1 ) (1.4 ) (1.0 ) All other items – net (a) 0.6 (1.4 ) 0.3 (289.4 ) % 337.3 % 42.9 % ( a ) Prior years adjusted to separately state “Tax Credits”. |
Schedule of Tax Effects of Temporary Differences and Tax Carryforwards | The tax effects of temporary differences and tax carryforwards which give rise to future income tax benefits and payables are as follows: Years Ended December 31, 2018 2017 Deferred tax assets: Pension $ 25 $ - Other asset basis differences 73 - Accruals and reserves 34 11 Net operating and capital losses 31 38 Gross deferred tax assets 163 49 Valuation allowance (29 ) (36 ) Total deferred tax assets $ 134 $ 13 Deferred tax liabilities: Intangibles $ (53 ) $ (55 ) Property, plant and equipment (16 ) (14 ) Unremitted earnings of foreign subsidiaries - (314 ) Other (6 ) (2 ) Total deferred tax liabilities (75 ) (385 ) Net deferred tax asset / (liability) $ 59 $ (372 ) |
Summary of Net Operating Loss,Capital Loss and Tax Credit Carryforwards | As of December 31, 201 8 Jurisdiction Expiration Period Net Operating Loss Carryforwards Non-U.S. 2023 $ 11 Non-U.S. Indefinite 104 $ 115 |
Schedule of Change in Unrecognized Tax Benefits | Many jurisdictions impose limitations on the timing and utilization of net operating loss carryforwards. In those instances where the net operating loss or tax credit carryforward will not be utilized in the carryforward period due to the limitation, the deferred tax asset and amount of the carryforward have been reduced. 2018 2017 2016 Change in unrecognized tax benefits: Balance at beginning of year $ 20 $ 20 $ 19 Gross increases related to current period tax positions - 2 2 Gross increases related to prior periods tax positions 2 4 1 Gross decreases related to prior periods tax positions - (3 ) - Decrease related to resolutions of audits with tax authorities (2 ) (4 ) (1 ) Expiration of the statute of limitations for the assessment of taxes - - (1 ) Reclass to indemnity payable (18 ) - - Foreign Currency Translation - 1 - Balance at end of year $ 2 $ 20 $ 20 |
Accounts Receivables - Net (Tab
Accounts Receivables - Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Receivable Net Current [Abstract] | |
Accounts Receivables - Net | December 31, 2018 2017 Accounts receivables, net $ 833 $ 792 Less - Allowance for doubtful accounts (12 ) (13 ) $ 821 $ 779 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | December 31, 2018 2017 Raw materials $ 167 $ 108 Work in process 34 21 Finished products 427 336 $ 628 $ 465 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment - Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property, Plant and Equipment - Net | December 31, 2018 2017 Land and improvements $ 6 $ 6 Machinery and equipment 510 532 Buildings and improvements 246 245 Construction in progress 64 39 Others 27 16 853 838 Less - Accumulated depreciation (553 ) (573 ) $ 300 $ 265 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets - Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount Of Goodwill | The change in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 by segment is as follows: Global Distribution Goodwill Products and Solutions Goodwill Total Balance as of December 31, 2016 $ 629 $ 1,965 $ 2,594 Acquisitions/Divestitures - 4 4 Currency translation adjustment 16 34 50 Balance as of December 31, 2017 645 2,003 2,648 Acquisitions/Divestitures - - - Currency translation adjustment (6 ) (8 ) (14 ) Balance as of December 31, 2018 $ 639 $ 1,995 $ 2,634 |
Schedule of Other Intangible Assets With Finite Lives | Other intangible assets with finite lives are comprised of: December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Determinable life intangibles: Patents and technology $ 27 $ (16 ) $ 11 $ 25 $ (11 ) $ 14 Customer relationships 170 (95 ) 75 178 (89 ) 89 Trademarks 9 (6 ) 3 9 (6 ) 3 Software 122 (78 ) 44 105 (71 ) 34 $ 328 $ (195 ) $ 133 $ 317 $ (177 ) $ 140 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables And Accruals [Abstract] | |
Summary of Accrued Liabilities | December 31, 2018 2017 Obligations payable to Honeywell $ 140 $ - Taxes payable 76 - Compensation, benefit and other employee related 73 65 Customer rebate reserve 59 49 Product warranties and performance guarantees 26 17 Repositioning 13 22 Environmental costs 2 204 Other (primarily operating expenses) 114 52 $ 503 $ 409 |
Long-term Debt and Credit Agr_2
Long-term Debt and Credit Agreement (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company had no debt outstanding as of December 31, 2017. The Company’s debt at December 31, 2018 consisted of the following: December 31, December 31, 2018 2017 6.125% notes due 2026 $ 400 $ - Five year variable rate term loan A due 2023 350 Seven year variable rate term loan B due 2025 475 - Unamortized debt issuance costs (24 ) - Total outstanding indebtedness 1,201 - Less: amounts due within one year (22 ) - Total long-term debt due after one year $ 1,179 $ - |
Scheduled Principal Repayments Under Senior Credit Facilities and Senior Notes | Scheduled principal repayments under the Senior Credit Facilities (defined below) and Senior Notes (defined below) subsequent to December 31, 2018 are as follows: December 31, 2018 2019 $ 22 2020 22 2021 40 2022 57 2023 232 Thereafter 852 1,225 Less: amounts due within one year (22 ) $ 1,203 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments under Operating Leases | Future minimum lease payments under operating leases having initial or remaining non cancellable lease terms in excess of one year are as follows: At December 31, 2018 2019 $ 39 2020 33 2021 28 2022 22 2023 15 Thereafter 17 $ 154 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Liabilities | Years Ended December 31, 2018 2017 Environmental $ 18 $ 333 Other 11 13 $ 29 $ 346 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component | Changes in Accumulated Other Comprehensive Income (Loss) by Component Foreign Exchange Translation Adjustment Pension Adjustments Changes in Fair Value of Effective Cash Flow Hedges Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2016 $ (170 ) $ - $ 1 $ (169 ) Other comprehensive income (loss) before reclassifications 70 - (3 ) 67 Amounts reclassified from accumulated other comprehensive (loss) (a) - - 2 2 Net current period other comprehensive income (loss) 70 - (1 ) 69 Balance at December 31, 2017 $ (100 ) $ - $ - $ (100 ) Other comprehensive income (loss) before reclassifications (b) (77 ) (7 ) (4 ) (88 ) Amounts reclassified from accumulated other comprehensive (loss) (a) - - 4 4 Net current period other comprehensive income (loss) (77 ) (7 ) - (84 ) Pension transfers (c) - (5 ) - (5 ) Balance at December 31, 2018 $ (177 ) $ (12 ) $ - $ (189 ) (a) Amount reclassified to net revenue (b) The Pension adjustment of $7 million is shown net of a $2 million tax benefit (c) Transferred at the spin date and is shown net of a $3 million tax benefit |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Compensation Related Costs [Abstract] | |
Summarized RSU Activity Related to Stock Incentive Plan | The following table summarizes RSU activity related to the Stock Incentive Plan: RSUs Number of Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Non-vested as of October 30, 2018 - $ - Granted 3,338,184 24.05 Vested - - Forfeited - - Non-vested as of December 31, 2018 3,338,184 $ 24.05 |
Summarized Stock-Based Compensation Expense and Related Tax Benefits | The following table summarizes stock-based compensation expense and the related tax benefits under the Company’s plans: 2018 Stock-based compensation expense before income taxes $ 20 Less income tax benefit (5 ) Stock-based compensation expense, net of income taxes $ 15 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |
Summary of Environmental Liabilities | The following table summarizes information concerning the recorded liabilities for environmental costs. On October 29, 2018, upon the consummation of the Spin-Off, certain environmental liabilities became subject to the Honeywell Reimbursement Agreement and were reclassified to Obligations payable to Honeywell. For additional information, see Honeywell Reimbursement Agreement below. Years Ended December 31, 2018 2017 2016 Beginning of year $ 537 $ 453 $ 474 Accruals for environmental matters deemed probable and reasonably estimable 340 282 190 Environmental liability payments (179 ) (198 ) (211 ) Less: Change due to the Honeywell Reimbursement Agreement Payments (86 ) - - Less: Liabilities subject to the Honeywell Reimbursement Agreement Payments (592 ) - - End of year $ 20 $ 537 $ 453 |
Summary of Information Concerning Recorded Liabilities for Environmental Costs | Environmental liabilities are included in the following balance sheet accounts: December 31, 2018 2017 Accrued liabilities $ 2 $ 204 Other liabilities 18 333 $ 20 $ 537 |
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. Years Ended December 31, 2018 2017 2016 Beginning of year $ 17 $ 24 $ 27 Accruals for warranties/guarantees issued during the year 17 10 7 Adjustment of pre-existing warranties/guarantees (1 ) (4 ) - Settlement of warranty/guarantee claims (7 ) (13 ) (10 ) End of year $ 26 $ 17 $ 24 |
Honeywell | |
Loss Contingencies [Line Items] | |
Summary of Honeywell Reimbursement Agreement Liabilities | The following table summarizes information concerning our Honeywell Reimbursement Agreement liabilities: Year Ended December 31, 2018 Beginning of year $ - Liabilities subject to the Honeywell Reimbursement Agreement Payments 592 Accruals for indemnification liabilities deemed probable and reasonably estimable 49 Indemnification payment (25 ) End of year $ 616 |
Summary of Honeywell Reimbursement Agreement Liabilities Included in Balance Sheet Accounts | Honeywell Reimbursement Agreement liabilities are included in the following balance sheet accounts: Year Ended December 31, 2018 Accrued liabilities $ 140 Obligations payable to Honeywell 476 $ 616 |
Pension (Tables)
Pension (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |
Summary of Balance Sheet Impact, Including Benefit Obligations, Assets and Funded Status | The following tables summarize the balance sheet impact, including the benefit obligations, assets and funded status associated with the significant pension plans. Pension Benefits U.S. Plans Non-U.S. Plans Change in benefit obligation: Benefit obligation at October 29, 2018 (Spin-Off) $ 279 $ 95 Service cost 1 1 Interest cost 2 - Actuarial (gains) losses 5 (3 ) Benefits paid (1 ) - Foreign currency translation - - Benefit obligation at December 31, 2018 $ 286 $ 93 Change in plan assets: Fair value of plan assets at October 29, 2018 (Spin-Off) $ 279 $ 20 Actual loss on plan assets (4 ) - Company contributions - - Benefits paid (1 ) - Foreign currency translation - - Fair value of plan assets at December 31, 2018 274 20 Funded status of plans $ (12 ) $ (73 ) Amounts recognized in the Balance Sheet consist of: Accrued pension liabilities - noncurrent (1) $ (12 ) $ (73 ) Net amount recognized $ (12 ) $ (73 ) (1) Included in Pension obligations |
Summary of Accumulated Other Comprehensive (Income) Loss Associated with Pension Plans | Amounts recognized in Accumulated other comprehensive (income) loss associated with significant pension plans at December 31, 2018 are as follows: Pension Benefits U.S. Plans Non-U.S. Plans Prior service credit $ (4 ) $ - Net actuarial loss 16 5 Net amount recognized $ 12 $ 5 |
Summary of Net Periodic Benefit Cost and Other Amounts Recognized in Comprehensive (Income) Loss | The components of net periodic benefit cost and other amounts recognized in Comprehensive (income) loss for significant pension plan include the following components: Pension Benefits U.S. Plans Non-U.S. Plans 2018 2017 2016 2018 2017 2016 Net Periodic Benefit Cost Service cost $ 1 $ - $ - $ 1 $ - $ - Interest cost 2 - - - - - Expected return on plan assets (3 ) - - - - - Amortization of prior service (credit) cost - - - - - - Actuarial losses - - - - - - Net periodic benefit cost $ - $ - $ - $ 1 $ - $ - |
Summary of Net Periodic Benefit (Income) Cost Other Than The Service Cost Included in Other Expense, Net | The components of net periodic benefit cost other than the service cost are included in Other expense, Net in the Consolidated and Combined Statements of Operations for the years ended December 31, 2018, 2017 and 2016, respectively. Pension Benefits U.S. Plans Non-U.S. Plans 2018 2017 2016 2018 2017 2016 Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive (Income) Loss Actuarial losses (gains) $ 12 $ - $ - $ (3 ) $ - $ - Prior service (credit) - - - - - - Foreign currency translation - - - - - - Total recognized in other comprehensive loss (income) $ 12 $ - $ - $ (3 ) $ - $ - Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 12 $ - $ - $ (2 ) $ - $ - |
Summary of Amounts Relate to Significant Pension Plans with Accumulated Benefit Obligations Exceeding Fair Value of plan Assets | The following amounts relate to significant pension plans with accumulated benefit obligations exceeding the fair value of plan assets. December 31, 2018 U.S. Plans Non-U.S. Plans Projected benefit obligation $ 286 $ 93 Accumulated benefit obligation $ 281 $ 80 Fair value of plan assets $ 274 $ 20 |
Summary of Fair Values of Both U.S. and Non-U.S. Pension Plans Assets by Asset Category | The fair values of both U.S. and non-U.S. pension plans assets by asset category are as follows: U.S. Plans December 31, 2018 Total Level 1 Level 2 Level 3 Equities: U.S. equities $ 45 $ 45 $ - $ - Non-U.S. equities 48 48 - - Real estate investment funds 26 26 - - Fixed Income: Short term investments 12 12 - - Corporate bonds 143 143 - - Total assets at fair value $ 274 $ 274 $ - $ - Non-U.S. Plans December 31, 2018 Total Level 1 Level 2 Level 3 Equities: U.S. equities $ 1 $ 1 $ - $ - Non-U.S. equities 3 3 - - Real estate investment funds 2 2 - - Fixed Income: Short term investments 4 4 - - Government securities 1 1 - - Corporate bonds 2 2 - - Insurance contracts 6 - - 6 Direct investments: Other 1 1 - - Total assets at fair value $ 20 $ 14 $ - $ 6 |
Summary of Changes in Fair Value of Level 3 Assets for Both U.S. and Non-U.S | The following table summarizes changes in the fair value of Level 3 assets for both U.S. and Non-U.S. plans: U.S. Plans Non-U.S. Plans Balance at October 29, 2018 $ - $ 5 Actual return on plan assets: Relating to assets still held at year-end - 1 Relating to assets sold during the year - - Purchases, sales and settlements, net - - Balance at December 31, 2018 $ - $ 6 |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Summary of Significant Actuarial Assumptions Used in Determining Benefit Obligations and Net Periodic Benefit (Income) Cost | Significant actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for benefit plans are presented in the following table as weighted averages. Pension Benefits 2018 U.S. Plans Non-U.S. Plans Actuarial assumptions used to determine benefit obligations as of December 31: Discount rate 4.5 % 1.9 % Expected annual rate of compensation increase 3.4 % 2.3 % Actuarial assumptions used to determine net periodic benefit (income) cost for the two months ended December 31: Discount rate - benefit obligation 4.5 % 1.9 % Expected rate of return on plan assets 5.7 % 3.3 % Expected annual rate of compensation increase 3.4 % 2.3 % |
Summary of Benefit Payments | Benefit payments, including amounts to be paid from Company assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: U.S. Plans Non-U.S. Plans 2019 $ 13 $ 1 2020 $ 17 $ 1 2021 $ 18 $ 2 2022 $ 18 $ 2 2023 $ 20 $ 2 2024-2028 $ 106 $ 13 |
Segment Financial Data (Tables)
Segment Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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.The Company ’s CODM evaluates segment performance based on segment profit. Segment profit is measured as segment income (loss) before taxes excluding other expense, net (primarily environmental cost now subject to the Honeywell Reimbursement Agreement), interest expense, pension expense, environmental expense related to Resideo’s owned sites and repositioning charges. Years Ended December 31, 2018 2017 2016 Revenue Total Products and Solutions revenue $ 2,474 $ 2,379 $ 2,471 Less: Intersegment revenue 305 337 371 External Products and Solutions revenue 2,169 2,042 2,100 External Global Distribution revenue 2,658 2,477 2,355 Total revenue $ 4,827 $ 4,519 $ 4,455 Years Ended December 31, 2018 2017 2016 Depreciation and amortization Products and Solutions $ 55 $ 57 $ 53 Global Distribution 11 10 11 Total $ 66 $ 67 $ 64 Years Ended December 31, 2018 2017 2016 Segment profit Products and Solutions $ 381 $ 353 $ 426 Global Distribution 148 131 104 Total $ 529 $ 484 $ 530 Years Ended December 31, 2018 2017 2016 Capital expenditures Products and Solutions $ 73 $ 44 $ 60 Global Distribution 8 7 11 Total $ 81 $ 51 $ 71 |
Schedule of Reconciliation of Segment Profit to Consolidated and Combined Income from Continuing Operations Before Taxes | A reconciliation of segment profit to consolidated and combined income from continuing operations before taxes is as follows: Years Ended December 31, 2018 2017 2016 Segment profit $ 529 $ 484 $ 530 Pension expense (13 ) (16 ) (16 ) Repositioning (5 ) (23 ) (19 ) Other expense, net (1) (369 ) (279 ) (185 ) Interest expense (20 ) - - Environmental expense (18 ) - - Income before taxes $ 104 $ 166 $ 310 (1) Includes $2 million of pension expense for the year ended December 31, 2018. |
Geographic Areas - Financial (T
Geographic Areas - Financial (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segments Geographical Areas [Abstract] | |
Schedule of Geographic Areas | Net Revenue (1) Years Ended December 31, Long-lived Assets (2) December 31, 2018 2017 2016 2018 2017 2016 United States $ 3,289 $ 3,074 $ 3,047 $ 184 $ 162 $ 163 Europe 1,138 1,063 1,051 91 82 70 Other International 400 382 357 25 21 28 $ 4,827 $ 4,519 $ 4,455 $ 300 $ 265 $ 261 (1) Revenue between geographic areas approximate market and are not significant. Net revenue are classified according to their country of origin. Included in United States net revenue are export sales of $31 million, $29 million and $43 million in 2018, 2017 and 2016, respectively. (2) Long-lived assets are comprised of property, plant and equipment—net. |
Unaudited Quarterly Financial_2
Unaudited Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
Unaudited Quarterly Results of Operations | The following tables show selected unaudited quarterly results of operations for 2018 and 2017. The quarterly data have been prepared on the same basis as the audited annual financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the results of operations for these periods. 2018 March 31 June 30 September 30 (b) (c) December 31 Year Ended December 31, Net Revenue $ 1,165 $ 1,196 $ 1,200 $ 1,266 $ 4,827 Gross Profit 343 346 347 330 1,366 Net Income 45 33 311 16 405 Earnings per share -basic (a) 0.37 0.27 2.54 0.13 3.31 Earnings per share - diluted (a) 0.37 0.27 2.54 0.13 3.30 2017 March 31 June 30 September 30 (b) December 31 (c) Year Ended December 31, Net Revenue $ 1,062 $ 1,096 $ 1,152 $ 1,209 $ 4,519 Gross Profit 311 308 336 361 1,316 Net Income (Loss) 16 16 23 (449 ) (394 ) Earnings (loss) per share - basic (a) 0.13 0.13 0.19 (3.67 ) (3.22 ) Earnings (loss) per share - diluted (a) 0.13 0.13 0.19 (3.67 ) (3.22 ) (a) On October 29, 2018, the date of the Spin-Off, 122,498,794 122,498,794 (b) Basic and diluted EPS for the three months ended September 30, 2018 and September 30, 2017 has been revised from the third quarter 10-Q to correctly reflect the exclusion of 467,764 treasury shares received by Resideo as part of the Spin-Off. This increased earnings per share by $0.01 and $0.02 for the three and nine months ended September 30, 2018, respectively, and had no impact on earnings per share for the three and nine months ended September 30, 2017. |
Organization, Operations and Ba
Organization, Operations and Basis of Presentation - Additional Information (Details) - $ / shares | Oct. 29, 2018 | Oct. 16, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Spin-off transaction, common stock share conversion | one share | six shares | ||
Spin-off transaction, common stock conversion of par value per share | $ 0.001 | $ 0.001 | $ 0.001 | |
Spin-off transaction record date | Oct. 16, 2018 | |||
Date of business spin-off | Oct. 29, 2018 | |||
Spin-off common stock, description | On October 29, 2018 (“Spin-Off Date”), Honeywell’s shareholders of record as of October 16, 2018 ( “Record Date”) received one share of the Company’s common stock, par value $0.001 per share, for every six shares of Honeywell’s common stock, par value $1.00 per share, held as of the Record Date, and cash for any fractional shares of the Company’s common stock. | |||
Rezi | ||||
Spin-off transaction, common stock conversion of par value per share | $ 0.001 | |||
Honeywell | ||||
Spin-off transaction, common stock conversion of par value per share | $ 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | Oct. 29, 2018 | Oct. 14, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Trademark license agreement | 40 years | |||||
Defined benefit plan net actuarial gains and losses in excess of fair value of plan assets or plan's projected benefit obligation percentage | 10.00% | |||||
Reclassification from interest to other expenses | $ (2,000,000) | $ (3,000,000) | ||||
Accounting Standards Update 2016-16 | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Adoption of accounting standard, cumulative-effect increase to retained earnings and deferred tax assets | $ 200,000 | |||||
Indemnification and Reimbursement Agreement | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Indemnification payable, late payment fee percentage | 5.00% | |||||
Tax Matters Agreement | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Indemnified amount | 153,000,000 | |||||
Cost of Goods Sold | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Research and development expense | $ 105,000,000 | $ 120,000,000 | $ 106,000,000 | |||
Honeywell | Indemnification and Reimbursement Agreement | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Indemnification payable percentage of payments | 90.00% | 90.00% | ||||
Indemnification payable percentage of net insurance receipts | 90.00% | 90.00% | ||||
Indemnification payable percentage of net proceeds received | 90.00% | 90.00% | ||||
Indemnification payable, late payment fee percentage | 5.00% | |||||
Trademarks | Honeywell | Selling, General and Administrative Expenses | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Royalty fee percentage of net revenue | 1.50% | |||||
Minimum | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Aggregate lease,liability | $ 105,000,000 | |||||
Minimum | Software Intangibles Assets | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Intangible assets, useful life | 4 years | |||||
Maximum | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Aggregate lease,liability | $ 117,000,000 | |||||
Maximum | Indemnification and Reimbursement Agreement | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Indemnity liability annual cap | $ 140,000,000 | |||||
Maximum | Honeywell | Indemnification and Reimbursement Agreement | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Indemnity liability annual cap | $ 140,000,000 | |||||
Maximum | Software Intangibles Assets | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Intangible assets, useful life | 15 years | |||||
Buildings and Improvements | Minimum | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, estimated useful lives | 10 years | |||||
Buildings and Improvements | Maximum | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, estimated useful lives | 50 years | |||||
Machinery and Equipment | Minimum | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, estimated useful lives | 3 years | |||||
Machinery and Equipment | Maximum | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, estimated useful lives | 16 years | |||||
Tooling Equipment | Minimum | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, estimated useful lives | 3 years | |||||
Tooling Equipment | Maximum | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, estimated useful lives | 10 years |
Earnings Per Share - Addtional
Earnings Per Share - Addtional Information (Details) - $ / shares | Oct. 29, 2018 | Oct. 16, 2018 | Dec. 31, 2018 | Oct. 28, 2018 | Dec. 31, 2017 |
Earnings Per Share [Line Items] | |||||
Spin-off transaction, common stock par value per share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, shares outstanding | 122,498,794 | 0 | 122,966,558 | ||
Honeywell | Spin-Off | |||||
Earnings Per Share [Line Items] | |||||
Shares issued | 122,498,794 | ||||
Distribution made at spin-off date of record | Oct. 16, 2018 | ||||
Treasury shares excluded from earnings per share calculation | 467,764 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | [1] | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | [1] | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||
Basic: | |||||||||||||||||||||
Net income (loss) | $ 16 | $ 311 | $ 33 | $ 45 | $ (449) | $ 23 | $ 16 | $ 16 | $ 405 | $ (394) | $ 177 | ||||||||||
Weighted average common shares outstanding (in thousands) | 122,499 | 122,499 | 122,499 | ||||||||||||||||||
Earnings (Loss) Per Share - Basic | $ 0.13 | [2] | $ 2.54 | [2] | $ 0.27 | [2] | $ 0.37 | [2] | $ (3.67) | [2] | $ 0.19 | [2] | $ 0.13 | [2] | $ 0.13 | [2] | $ 3.31 | [2] | $ (3.22) | [2] | $ 1.44 |
Diluted: | |||||||||||||||||||||
Dilutive effect of unvested RSUs | 125 | ||||||||||||||||||||
Diluted (in thousands) | 122,624 | 122,499 | 122,499 | ||||||||||||||||||
Earnings (Loss) Per Share - Diluted | $ 0.13 | [2] | $ 2.54 | [2] | $ 0.27 | [2] | $ 0.37 | [2] | $ (3.67) | [2] | $ 0.19 | [2] | $ 0.13 | [2] | $ 0.13 | [2] | $ 3.30 | [2] | $ (3.22) | [2] | $ 1.44 |
[1] | Basic and diluted EPS for the three months ended September 30, 2018 and September 30, 2017 has been revised from the third quarter 10-Q to correctly reflect the exclusion of 467,764 treasury shares received by Resideo as part of the Spin-Off. This increased earnings per share by $0.01 and $0.02 for the three and nine months ended September 30, 2018, respectively, and had no impact on earnings per share for the three and nine months ended September 30, 2017 | ||||||||||||||||||||
[2] | On October 29, 2018, the date of the Spin-Off, 122,498,794 shares of the Company's Common Stock were distributed to Honeywell stockholders of record as of October 16, 2018. Basic and Diluted EPS for all periods prior to Spin-Off reflect the number of distributed shares, or 122,498,794 shares. |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,634 | $ 2,648 | $ 2,594 | |
RSI Video Technologies (“RSI”) | ||||
Business Acquisition [Line Items] | ||||
Business acquisition period | 2016-03 | |||
Business acquisition aggregate value | $ 124 | |||
Business acquisition contingent consideration | 2 | |||
Business acquisition, net assets acquired | 42 | |||
Business acquisition, intangible assets acquired | 38 | |||
Goodwill | $ 84 |
Related Party Transactions wi_3
Related Party Transactions with Honeywell - Additional Information (Details) - USD ($) $ in Millions | 10 Months Ended | 12 Months Ended | ||
Oct. 29, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Honeywell | ||||
Related Party Transaction [Line Items] | ||||
General corporate expenses incurred | $ 228 | $ 260 | $ 240 | |
Sales to related party | $ 24 | 36 | 50 | |
Costs of goods sold to related party | 19 | 29 | 38 | |
Purchases from related party | 212 | 213 | 205 | |
Selling, General and Administrative Expenses | ||||
Related Party Transaction [Line Items] | ||||
General corporate expenses incurred | $ 228 | $ 289 | $ 264 |
Related Party Transactions wi_4
Related Party Transactions with Honeywell - Summary of Due from Related Parties, Current (Details) $ in Millions | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | |
Due from related parties, current | $ 23 |
Honeywell | |
Related Party Transaction [Line Items] | |
Cash pooling and short-term notes receivables | 10 |
Related party note receivables, current | 7 |
Receivables from related parties | 6 |
Due from related parties, current | $ 23 |
Related Party Transactions wi_5
Related Party Transactions with Honeywell - Summary of Due to Related Parties, Current (Details) $ in Millions | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | |
Due to related parties, current | $ 60 |
Honeywell | |
Related Party Transaction [Line Items] | |
Cash pooling and short-term notes payables | 23 |
Payables to related parties | 36 |
Related parties notes payables, current | 1 |
Due to related parties, current | $ 60 |
Related Party Transactions wi_6
Related Party Transactions with Honeywell - Summary of Components of Net Transfers to and from Honeywell (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Net increase (decrease) in invested equity | $ (39) | $ (19) | $ (1) |
Honeywell | |||
Related Party Transaction [Line Items] | |||
General financing activities | (383) | (547) | (384) |
Distribution to Honeywell in connection with Spin-Off | (1,415) | ||
Net contribution of assets and liabilities upon Spin-Off | 81 | ||
Unbilled corporate allocations | 228 | 260 | 240 |
Purchases from Honeywell | 161 | 168 | 160 |
Mandatory transition tax | (85) | 156 | |
Sales to Honeywell | (12) | (13) | (18) |
Stock compensation expense and other compensation awards | 16 | 16 | 13 |
Unbilled pension expense | 11 | 14 | 13 |
Net increase (decrease) in invested equity | $ (1,398) | $ 54 | $ 24 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | [1] | $ 4,827 | $ 4,519 | $ 4,455 | |
Global Distribution | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 2,658 | 2,477 | 2,355 | ||
Global Distribution | U.S. and Canada | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 2,147 | ||||
Global Distribution | EMEA | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | [2] | 456 | |||
Global Distribution | India | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 55 | ||||
Products and Solutions | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 2,169 | [3] | $ 2,042 | $ 2,100 | |
Products and Solutions | Comfort | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 1,114 | ||||
Products and Solutions | Security | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | 479 | ||||
Products and Solutions | RTS | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue | $ 576 | ||||
[1] | Revenue between geographic areas approximate market and are not significant. Net revenue are classified according to their country of origin. Included in United States net revenue are export sales of $31 million, $29 million and $43 million in 2018, 2017 and 2016, respectively. | ||||
[2] | EMEA represents Europe, the Middle East and Africa. | ||||
[3] | Products and Solutions sales channel naming convention changed from what was disclosed in the 10-Q. Comfort & Care was broken out into Comfort and RTS. |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | |
Revenue, performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, performance obligation satisfied at point in time, transfer of control | The majority of the Company’s performance obligations are satisfied as of a point in time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. |
Revenue, performance obligation, description of payment terms | The timing of satisfaction of the Company’s performance obligations does not significantly vary from the typical timing of payment. For some contracts, the Company may be entitled to receive an advance payment. |
Revenue, practical expedient, financing component | true |
Maximum | |
Disaggregation Of Revenue [Line Items] | |
Percentage of revenue satisfied over time | 3.00% |
Revenue Recognition - Additio_2
Revenue Recognition - Additional Information (Details 1) | Dec. 31, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-01-01 | |
Disaggregation Of Revenue [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Repositioning Charges - Summary
Repositioning Charges - Summary of Repositioning Charge (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring And Related Activities [Abstract] | |||
Severance | $ 4 | $ 23 | $ 21 |
Asset impairments | 1 | 1 | |
Reserve adjustments | (1) | (2) | |
Total net repositioning charge | $ 5 | $ 23 | $ 19 |
Repositioning Charges - Summa_2
Repositioning Charges - Summary of Pretax Distribution of Total Net Repositioning Charges by Statement of Operations Classification (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost And Reserve [Line Items] | |||
Total net repositioning charges | $ 5 | $ 23 | $ 19 |
Cost of Goods Sold | |||
Restructuring Cost And Reserve [Line Items] | |||
Total net repositioning charges | 4 | 17 | 0 |
Selling, General and Administrative Expenses | |||
Restructuring Cost And Reserve [Line Items] | |||
Total net repositioning charges | $ 1 | $ 6 | $ 19 |
Repositioning Charges - Additio
Repositioning Charges - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | [1] | Dec. 31, 2016 | |
Restructuring And Related Activities [Abstract] | ||||
Total repositioning charges | $ 5 | $ 24 | $ 21 | |
Remaining exit and disposal costs relating to repositioning actions | $ 7 | |||
[1] | Includes asset impairment of $1 million |
Repositioning Charges - Summa_3
Repositioning Charges - Summary of Status of Total Repositioning Reserves Related to Severance Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Restructuring And Related Activities [Abstract] | |||||
Beginning Balance | $ 22 | $ 15 | $ 13 | ||
Charges | 5 | 24 | [1] | 21 | |
Usage - cash | (9) | (17) | (18) | ||
Usage - noncash | [1] | (1) | |||
Other | (4) | ||||
Adjustments | (1) | (2) | |||
Foreign currency translation | (1) | 2 | 1 | ||
Ending Balance | $ 13 | $ 22 | $ 15 | ||
[1] | Includes asset impairment of $1 million |
Repositioning Charges - Summa_4
Repositioning Charges - Summary of Status of Total Repositioning Reserves Related to Severance Cost (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring And Related Activities [Abstract] | ||
Asset impairments | $ 1 | $ 1 |
Other Expense, Net - Summary of
Other Expense, Net - Summary of Other Expense Net (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Income And Expenses [Abstract] | |||
Environmental expense | $ 323 | $ 281 | $ 188 |
Honeywell reimbursement agreement expense | 49 | ||
Other, net | (3) | (2) | (3) |
Other expense net | $ 369 | $ 279 | $ 185 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (169) | $ (107) | $ 47 |
Non-U.S. | 273 | 273 | 263 |
Income before taxes | $ 104 | $ 166 | $ 310 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
U.S. | $ (26) | $ 215 | $ 88 |
Non-U.S. | 48 | 48 | 49 |
Income tax expense (benefit), current | 22 | 263 | 137 |
Deferred: | |||
U.S. | (15) | (6) | 2 |
Non-U.S. | (308) | 303 | (6) |
Income tax expense (benefit), deferred | (323) | 297 | (4) |
Income tax expense (benefit) | $ (301) | $ 560 | $ 133 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation, Income Tax expense (Benefit) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 21.00% | 35.00% | 35.00% |
Taxes on non-U.S. earnings below U.S. tax rate | (7.30%) | (33.40%) | (15.20%) |
U.S. state income taxes | 6.40% | 3.40% | 2.50% |
Reserves for tax contingencies | (4.30%) | 3.20% | 0.80% |
U.S. Tax Reform and related items | (385.10%) | 273.10% | |
GILTI/FDII | 6.00% | ||
Non-deductible expenses | 75.40% | 58.80% | 20.50% |
Tax credits | (2.10%) | (1.40%) | (1.00%) |
All other items – net (a) | 0.60% | (1.40%) | 0.30% |
Effective income tax rate | (289.40%) | 337.30% | 42.90% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Line Items] | |||
Effective income tax rate | (289.40%) | 337.30% | 42.90% |
Gross deferred tax assets | $ 163 | $ 49 | |
Valuation allowance | 29 | 36 | |
Increase (decrease) in tax expense | (1) | 4 | $ 9 |
Remaining reduction amount relates to the reversal of net operating lossess | 6 | ||
Estimated net tax effect on distributions of unremitted earning of foreign affiliates to U.S. | 18 | ||
Unrecognized tax benefits | 2 | 20 | 20 |
Unrecognized tax benefits for examinations in progress | 7 | 8 | |
Interest and penalties expense | (1) | 1 | 2 |
Accrued interest and penalties | 1 | $ 7 | $ 7 |
Adjustment to the provisional tax amount related to repatriation transition tax | (85.4) | ||
taxes on undistributed earnings | $ (234.7) | ||
A decrease to the effective tax rate as a result of adjustment | 307.80% | ||
Income tax benefit from the change in tax rate | $ 17 | ||
Effective tax rate | 21.00% | 35.00% | 35.00% |
Total tax charge due to the imposition of the mandatory transition tax (“MTT”) | $ 70.6 | ||
Provisional tax charge due to imposition of mandatory transition tax MTT | 156 | ||
A measurement period adjustment included in tax charge | $ 85.4 | ||
Honeywell | |||
Income Taxes [Line Items] | |||
Adjustment to the provisional tax amount related to repatriation transition tax | $ 234.7 | ||
Tax charge on unremitted earnings of foreign affiliates | 79.3 | ||
Provisional charge | $ 314 | ||
Non-U.S. | |||
Income Taxes [Line Items] | |||
Effective income tax rate | (95.20%) | 128.60% | |
Gross deferred tax assets | $ 134 | ||
Valuation allowance | $ 29 |
Income Taxes - Schedule of Tax
Income Taxes - Schedule of Tax Effects of Temporary Differences and Tax Carryforwards (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Pension | $ 25 | |
Other asset basis differences | 73 | |
Accruals and reserves | 34 | $ 11 |
Net operating and capital losses | 31 | 38 |
Gross deferred tax assets | 163 | 49 |
Valuation allowance | (29) | (36) |
Total deferred tax assets | 134 | 13 |
Deferred tax liabilities: | ||
Intangibles | (53) | (55) |
Property, plant and equipment | (16) | (14) |
Unremitted earnings of foreign subsidiaries | 0 | (314) |
Other | (6) | (2) |
Total deferred tax liabilities | (75) | (385) |
Net deferred (liability) | $ (372) | |
Net deferred tax asset | $ 59 |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Operating Loss, Capital Loss and Tax Credit Carryforwards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 115 |
Non-US Expiration Period 2023 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 11 |
Expiration period | 2023 |
Non-Us Indefinite Expiration Period | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 104 |
Expiration period | Indefinite |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in unrecognized tax benefits: | |||
Balance at beginning of year | $ 20 | $ 20 | $ 19 |
Gross increases related to current period tax positions | 2 | 2 | |
Gross increases related to prior periods tax positions | 2 | 4 | 1 |
Gross decreases related to prior periods tax positions | (3) | ||
Decrease related to resolutions of audits with tax authorities | (2) | (4) | (1) |
Expiration of the statute of limitations for the assessment of taxes | (1) | ||
Reclass to indemnity payable | (18) | ||
Foreign Currency Translation | 1 | ||
Balance at end of year | $ 2 | $ 20 | $ 20 |
Accounts Receivables Net (Detai
Accounts Receivables Net (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Receivable Net Current [Abstract] | ||
Accounts receivables, net | $ 833 | $ 792 |
Less - Allowance for doubtful accounts | (12) | (13) |
Accounts receivables – net | $ 821 | $ 779 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 167 | $ 108 |
Work in process | 34 | 21 |
Finished products | 427 | 336 |
Inventory, Net | $ 628 | $ 465 |
Property Plant and Equipment -
Property Plant and Equipment - Net - Schedule of Property Plant and Equipment - Net (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Line Items] | ||||
Property, plant and equipment, gross | $ 853 | $ 838 | ||
Less - Accumulated depreciation | (553) | (573) | ||
Property, plant and equipment, net | [1] | 300 | 265 | $ 261 |
Land and improvements | ||||
Property Plant And Equipment [Line Items] | ||||
Property, plant and equipment, gross | 6 | 6 | ||
Machinery and equipment | ||||
Property Plant And Equipment [Line Items] | ||||
Property, plant and equipment, gross | 510 | 532 | ||
Buildings and improvements | ||||
Property Plant And Equipment [Line Items] | ||||
Property, plant and equipment, gross | 246 | 245 | ||
Construction in progress | ||||
Property Plant And Equipment [Line Items] | ||||
Property, plant and equipment, gross | 64 | 39 | ||
Others | ||||
Property Plant And Equipment [Line Items] | ||||
Property, plant and equipment, gross | $ 27 | $ 16 | ||
[1] | Long-lived assets are comprised of property, plant and equipment—net. |
Property Plant and Equipment _2
Property Plant and Equipment - Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment Net [Abstract] | |||
Depreciation | $ 45 | $ 57 | $ 57 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Net - Schedule of Changes in the Carrying Amount Of Goodwill (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Beginning balance goodwill | $ 2,648 | $ 2,594 |
Acquisitions/Divestitures | 4 | |
Currency translation adjustment | (14) | 50 |
Ending balance goodwill | 2,634 | 2,648 |
Global Distribution | ||
Goodwill [Line Items] | ||
Beginning balance goodwill | 645 | 629 |
Currency translation adjustment | (6) | 16 |
Ending balance goodwill | 639 | 645 |
Products and Solutions | ||
Goodwill [Line Items] | ||
Beginning balance goodwill | 2,003 | 1,965 |
Acquisitions/Divestitures | 4 | |
Currency translation adjustment | (8) | 34 |
Ending balance goodwill | $ 1,995 | $ 2,003 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Net - Schedule of Other Intangible Assets With Finite Lives (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 328 | $ 317 |
Accumulated Amortization | (195) | (177) |
Net Carrying Amount | 133 | 140 |
Patent and Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 27 | 25 |
Accumulated Amortization | (16) | (11) |
Net Carrying Amount | 11 | 14 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 170 | 178 |
Accumulated Amortization | (95) | (89) |
Net Carrying Amount | 75 | 89 |
Trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9 | 9 |
Accumulated Amortization | (6) | (6) |
Net Carrying Amount | 3 | 3 |
Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 122 | 105 |
Accumulated Amortization | (78) | (71) |
Net Carrying Amount | $ 44 | $ 34 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Amortization | $ 21 | $ 10 | $ 7 |
2019 | 18 | ||
2020 | 17 | ||
2021 | 13 | ||
2022 | 11 | ||
2023 | $ 9 |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Liabilities, Current [Abstract] | ||||
Obligations payable to Honeywell | $ 140 | |||
Taxes payable | 76 | |||
Compensation, benefit and other employee related | 73 | $ 65 | ||
Customer rebate reserve | 59 | 49 | ||
Product warranties and performance guarantees | 26 | 17 | $ 24 | $ 27 |
Repositioning | 13 | 22 | ||
Environmental costs | 2 | 204 | ||
Other (primarily operating expenses) | 114 | 52 | ||
Total accrued liabilities | $ 503 | $ 409 |
Long-term Debt and Credit Agr_3
Long-term Debt and Credit Agreement - Schedule of Debt (Details) $ in Millions | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |
Long-term debt, gross | $ 1,225 |
Unamortized debt issuance costs | (24) |
Total outstanding indebtedness | 1,201 |
Less: amounts due within one year | (22) |
Long-term debt | 1,179 |
6.125% notes due 2026 | |
Debt Instrument [Line Items] | |
Long-term debt, gross | 400 |
Five Year Variable Rate Term Loan A Due 2023 | |
Debt Instrument [Line Items] | |
Long-term debt, gross | 350 |
Seven Year Variable Rate Term Loan B Due 2025 | |
Debt Instrument [Line Items] | |
Long-term debt, gross | $ 475 |
Long-term Debt and Credit Agr_4
Long-term Debt and Credit Agreement - Schedule of Debt (Parenthetical) (Details) | 12 Months Ended | |
Dec. 31, 2018 | Oct. 30, 2018 | |
6.125% notes due 2026 | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.125% | 6.125% |
Debt instrument maturity year | 2026 | |
Five Year Variable Rate Term Loan A Due 2023 | ||
Debt Instrument [Line Items] | ||
Debt instrument maturity year | 2023 | |
Seven Year Variable Rate Term Loan B Due 2025 | ||
Debt Instrument [Line Items] | ||
Debt instrument maturity year | 2025 |
Long-term Debt and Credit Agr_5
Long-term Debt and Credit Agreement - Scheduled Principal Repayments Under Senior Credit Facilities and Senior Notes (Details) $ in Millions | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2019 | $ 22 |
2020 | 22 |
2021 | 40 |
2022 | 57 |
2023 | 232 |
Thereafter | 852 |
Long-term debt, gross | 1,225 |
Less: amounts due within one year | (22) |
Long-term debt noncurrent, gross | $ 1,203 |
Long-term Debt and Credit Agr_6
Long-term Debt and Credit Agreement - Additional Information (Details) - USD ($) | Oct. 25, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2018 | Oct. 30, 2018 |
Debt Instrument [Line Items] | |||||||
Interest expense, debt | $ 13,000,000 | ||||||
6.125% notes due 2026 | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount issued | $ 400,000,000 | ||||||
Interest rate | 6.125% | 6.125% | 6.125% | ||||
Debt instrument maturity year | 2026 | ||||||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | $ 8,000,000 | $ 8,000,000 | |||||
Senior Notes | Debt Instrument Redemption Period One | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 100.00% | ||||||
Senior Notes | Debt Instrument Redemption Period Two | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 104.594% | ||||||
Debt instrument, redemption period, beginning | Nov. 1, 2021 | ||||||
Senior Notes | Debt Instrument Redemption Period Three | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 103.063% | ||||||
Debt instrument, redemption period, beginning | Nov. 1, 2022 | ||||||
Senior Notes | Debt Instrument Redemption Period Four | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 101.531% | ||||||
Debt instrument, redemption period, beginning | Nov. 1, 2023 | ||||||
Senior Notes | Debt Instrument Redemption Period Five | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 100.00% | ||||||
Debt instrument, redemption period, beginning | Nov. 1, 2024 | ||||||
Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Credit agreement description | On October 25, 2018, in connection with the consummation of the Spin-Off, the Company as the borrower, entered into a Credit Agreement with JP Morgan Chase Bank N.A. as administrative agent (the “Credit Agreement”). | ||||||
Consolidated interest coverage ratio | 275.00% | ||||||
Consolidated total coverage ratio | 400.00% | ||||||
Credit Agreement | Scenario, Forecast | |||||||
Debt Instrument [Line Items] | |||||||
Consolidated total coverage ratio | 325.00% | 350.00% | 375.00% | ||||
Credit Agreement | Term B Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount issued | $ 475,000,000 | ||||||
Credit facilities term | 7 years | ||||||
Debt instrument, basis spread on variable rate | 2.00% | ||||||
Credit Agreement | Term B Loan Facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 2.00% | ||||||
Credit Agreement | Term B Loan Facility | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 1.00% | ||||||
Credit Agreement | Term Loan Facilities | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 4.49% | 4.49% | |||||
Credit Agreement | Term A Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount issued | $ 350,000,000 | ||||||
Credit facilities term | 5 years | ||||||
Debt instrument, basis spread on variable rate | 2.00% | ||||||
Credit Agreement | Term A Loan Facility | London Interbank Offered Rate (LIBOR) | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 1.50% | ||||||
Credit Agreement | Term A Loan Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 2.00% | ||||||
Credit Agreement | Term A Loan Facility | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 0.50% | ||||||
Credit Agreement | Term A Loan Facility | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 1.00% | ||||||
Credit Agreement | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | $ 5,000,000 | ||||||
Credit facilities term | 5 years | ||||||
Credit facility, maximum borrowing amount | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | ||||
Borrowings from credit facility | 0 | 0 | |||||
Credit Agreement | Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee on unused portion, percentage | 0.25% | ||||||
Credit Agreement | Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee on unused portion, percentage | 0.35% | ||||||
Credit Agreement | Revolving Credit Facility | Federal Funds Effective Rate | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 0.05% | ||||||
Credit Agreement | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 1.00% | ||||||
Credit Agreement | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 1.50% | ||||||
Credit Agreement | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 2.00% | ||||||
Credit Agreement | Revolving Credit Facility | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 0.50% | ||||||
Credit Agreement | Revolving Credit Facility | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 1.00% | ||||||
Credit Agreement | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings from credit facility | $ 19,000,000 | $ 19,000,000 | |||||
Credit Agreement | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | $ 16,000,000 |
Lease Commitments - Additional
Lease Commitments - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Lessee Lease Description [Line Items] | |||
Rent expense | $ 39 | $ 39 | $ 38 |
Minimum | |||
Lessee Lease Description [Line Items] | |||
Lease term | 1 year |
Lease Commitments - Schedule of
Lease Commitments - Schedule of Future Minimum Lease Payments under Operating Leases (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 39 |
2020 | 33 |
2021 | 28 |
2022 | 22 |
2023 | 15 |
Thereafter | 17 |
Total future minimum lease payments | $ 154 |
Other Liabilities - Summary of
Other Liabilities - Summary of Other Liabilites (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Environmental | $ 18 | $ 333 |
Other | 11 | 13 |
Other liabilities | $ 29 | $ 346 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | $ 2,603 | $ 2,874 | $ 2,719 |
Other comprehensive income (loss) before reclassifications | (88) | 67 | |
Amounts reclassified from accumulated other comprehensive (loss) | 4 | 2 | |
Total other comprehensive income (loss), net of tax | (84) | 69 | (46) |
Pension transfers | (5) | ||
Ending Balance | 1,533 | 2,603 | 2,874 |
Foreign Exchange Translation Adjustment | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | (100) | (170) | |
Other comprehensive income (loss) before reclassifications | (77) | 70 | |
Total other comprehensive income (loss), net of tax | (77) | 70 | |
Ending Balance | (177) | (100) | (170) |
Pension Adjusments | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Other comprehensive income (loss) before reclassifications | (7) | ||
Total other comprehensive income (loss), net of tax | (7) | ||
Pension transfers | (5) | ||
Ending Balance | (12) | ||
Changes in Fair Value of Effective Cash Flow Hedges | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | 1 | ||
Other comprehensive income (loss) before reclassifications | (4) | (3) | |
Amounts reclassified from accumulated other comprehensive (loss) | 4 | 2 | |
Total other comprehensive income (loss), net of tax | (1) | ||
Ending Balance | 1 | ||
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | (100) | (169) | (123) |
Ending Balance | $ (189) | $ (100) | $ (169) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive income (loss) before reclassifications | $ 88 | $ (67) |
Pension Adjusments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive income (loss) before reclassifications | 7 | |
Other comprehensive income (loss) before reclassifications, tax | 2 | |
Pension transfer tax portion | $ 3 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Additional Information (Details) - USD ($) $ in Millions | Oct. 29, 2018 | Dec. 31, 2018 | Oct. 29, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 20 | |||||
Spin-Off | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 16 | $ 16 | $ 13 | |||
Employees | Spin-Off | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | 6 | 5 | 3 | |||
Shared Employees | Spin-Off | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 10 | $ 11 | $ 10 | |||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of stock units granted | 15,000,000 | 15,000,000 | ||||
Number of shares available for grant | 11,661,816 | 11,661,816 | ||||
Number of restricted stock units granted | 3,338,184 | |||||
Remaining term of unvested awards | 3 years 6 months 10 days | |||||
Total unrecognized compensation cost | $ 55 | $ 55 | ||||
Restricted Stock Units (RSUs) | Spin-Off | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Replacement grants issued | 1,411,395 | |||||
Restricted Stock Units (RSUs) | Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Number of restricted stock units granted | 1,809,644 | |||||
Restricted Stock Units (RSUs) | Board of Directors | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of restricted stock units granted | 117,145 | |||||
Restricted Stock Units (RSUs) | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
Restricted Stock Units (RSUs) | Minimum | Spin-Off | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Remaining term of unvested awards | 1 year | |||||
Restricted Stock Units (RSUs) | Minimum | Board of Directors | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
Restricted Stock Units (RSUs) | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 7 years | |||||
Restricted Stock Units (RSUs) | Maximum | Spin-Off | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Remaining term of unvested awards | 4 years | |||||
Restricted Stock Units (RSUs) | Maximum | Board of Directors | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Summarized RSU Activity Related to Stock Incentive Plan (Details) - Restricted Stock Units (RSUs) | 3 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of restricted stock units, Granted | shares | 3,338,184 |
Number of restricted stock units, Non-vested, ending balance | shares | 3,338,184 |
Weighted Average Grant Date Fair Value Per. Granted Share | $ / shares | $ 24.05 |
Weighted Average Grant Date Fair Value Per Share, Non-vested, Ending balance | $ / shares | $ 24.05 |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Summarized Stock-Based Compensation Expense and Related Tax Benefits (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Compensation Related Costs [Abstract] | |
Stock-based compensation expense before income taxes | $ 20 |
Less income tax benefit | (5) |
Stock-based compensation expense, net of income taxes | $ 15 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Information Concernin Recorded Liabilities for Environmental Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accrual for Environmental Loss Contingencies | |||
Beginning of year | $ 537 | $ 453 | $ 474 |
Accruals for environmental matters deemed probable and reasonably estimable | 340 | 282 | 190 |
Environmental liability payments | (179) | (198) | (211) |
End of year | 20 | $ 537 | $ 453 |
Honeywell | |||
Accrual for Environmental Loss Contingencies | |||
Less: Change due to the Honeywell Reimbursement Agreement Payments | (86) | ||
Less: Liabilities subject to the Honeywell Reimbursement Agreement Payments | $ (592) |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Details) | Oct. 29, 2018USD ($)Site | Oct. 14, 2018USD ($) | Dec. 31, 2018USD ($) |
Loss Contingencies [Line Items] | |||
Change due to the indemnification and reimbursement | $ 86,000,000 | ||
Percentage of environmental liability payments | 100.00% | ||
Trademark license agreement | 40 years | ||
Trademarks | |||
Loss Contingencies [Line Items] | |||
Royalty fee on net revenue | 1.50% | ||
Royalty Expense | $ 4,000,000 | ||
One time credit received from inventoy on hand | $ 2,000,000 | ||
Indemnification and Reimbursement Agreement | |||
Loss Contingencies [Line Items] | |||
Indemnification payable, late payment fee percentage | 5.00% | ||
Site contingency, number of sites | Site | 230 | ||
Indemnification agreement description | On October 29, 2018, in connection with the Spin-Off, the Company entered into the Honeywell 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 will be subject to a cap of $140 million (exclusive of any late payment fees up to 5% per annum). The scope of the Company’s current environmental remediation obligations subject to the Honeywell Reimbursement Agreement relates to approximately 230 sites or groups of sites that are undergoing environmental remediation under U.S. federal or state law and agency oversight for contamination associated with Honeywell legacy business operations. The ongoing environmental remediation is designed to address contaminants at upland and sediment sites, which include, among others, metals, organic compounds and polychlorinated biphenyls, through a variety of methods, which include, among others, excavation, capping, in-situ stabilization, groundwater treatment and dredging. In addition, the company obligations subject to the Honeywell Reimbursement Agreement will include certain liability with respect to (i) hazardous exposure or toxic tort claims associated with the specified sites that arise after the Spin-Off, if any, (ii) currently unidentified releases of hazardous substances at or associated with the specified sites, (iii) other environmental claims associated with the specified sites and (iv) consequential damages. | ||
Maximum annual reimbursement obligation amount | $ 25,000,000 | ||
Indemnification and Reimbursement Agreement | Maximum | |||
Loss Contingencies [Line Items] | |||
Indemnity liability annual cap | $ 140,000,000 | ||
Tax Matters Agreement | |||
Loss Contingencies [Line Items] | |||
Indemnified amount | $ 153,000,000 | ||
Honeywell | Indemnification and Reimbursement Agreement | |||
Loss Contingencies [Line Items] | |||
Indemnification payable percentage of payments | 90.00% | 90.00% | |
Indemnification payable percentage of net insurance receipts | 90.00% | 90.00% | |
Indemnification payable percentage of net proceeds received | 90.00% | 90.00% | |
Indemnification payable, late payment fee percentage | 5.00% | ||
Honeywell | Indemnification and Reimbursement Agreement | Maximum | |||
Loss Contingencies [Line Items] | |||
Indemnity liability annual cap | $ 140,000,000 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Environmental Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Loss Contingency, Classification of Accrual [Abstract] | ||||
Environmental liabilities | $ 20 | $ 537 | $ 453 | $ 474 |
Accrued Liabilities | ||||
Loss Contingency, Classification of Accrual [Abstract] | ||||
Environmental liabilities | 2 | 204 | ||
Other Liabilities | ||||
Loss Contingency, Classification of Accrual [Abstract] | ||||
Environmental liabilities | $ 18 | $ 333 |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Honeywell Reimbursement Agreement Liabilities (Details) - Honeywell $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Accrual for Honeywell Reimbursement Agreement | |
Liabilities subject to the Honeywell Reimbursement Agreement Payments | $ 592 |
Accruals for indemnification liabilities deemed probable and reasonably estimable | 49 |
Indemnification payment | (25) |
End of year | $ 616 |
Commitments and Contingencies_5
Commitments and Contingencies - Summary of Honeywell Reimbursement Agreement Liabilities Included in Balance Sheet Accounts (Details) - Honeywell $ in Millions | Dec. 31, 2018USD ($) |
Loss Contingency, Classification of Accrual [Abstract] | |
Honeywell Reimbursement Agreement liabilities | $ 616 |
Accrued Liabilities | |
Loss Contingency, Classification of Accrual [Abstract] | |
Honeywell Reimbursement agreement current portion | 140 |
Obligations Payable to Honeywell | |
Loss Contingency, Classification of Accrual [Abstract] | |
Honeywell Reimbursement Agreement Long Term Portion | $ 476 |
Commitments and Contingencies_6
Commitments and Contingencies - Summary of Recorded Obligations for Product Warranties and Product Performance Guarantee (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Product Warranties and Guarantees [Roll forward] | |||
Beginning of year | $ 17 | $ 24 | $ 27 |
Accruals for warranties/guarantees issued during the year | 17 | 10 | 7 |
Adjustment of pre-existing warranties/guarantees | (1) | (4) | |
Settlement of warranty/guarantee claims | (7) | (13) | (10) |
End of year | $ 26 | $ 17 | $ 24 |
Pension - Additional Informatio
Pension - Additional Information (Details) - USD ($) | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Oct. 29, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Pension expense | $ 13,000,000 | $ 16,000,000 | $ 16,000,000 | ||
Pension Plan | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Pension expense | $ 11,000,000 | $ 16,000,000 | $ 16,000,000 | ||
Pension Plan | UNITED STATES | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Net periodic benefit (income) cost expected in 2019 | $ (1,000,000) | $ (1,000,000) | |||
Expected rate of return on plan assets | 5.70% | 5.70% | |||
Pension contribution | $ 0 | ||||
Pension Plan | Non-U.S. Plans | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Expected rate of return on plan assets | 3.30% | ||||
Pension contribution | 1,000,000 | ||||
Expected pension contribution in the next fiscal year | $ 1,000,000 | $ 1,000,000 |
Pension - Summary of Balance Sh
Pension - Summary of Balance Sheet Impact, Including Benefit Obligations, Assets and Funded Status (Details) $ in Millions | 2 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |||
Defined Benefit Plan Disclosure [Line Items] | ||||
Accrued pension liabilities - noncurrent | $ (88) | $ (88) | ||
Pension Plan | UNITED STATES | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Benefit obligation at Spin-Off | 279 | |||
Service cost | 1 | 1 | ||
Interest cost | 2 | 2 | ||
Actuarial (gains) losses | 5 | |||
Benefits paid | (1) | |||
Benefit obligation at end of year | 286 | 286 | ||
Fair value of plan assets at Spin-Off | 279 | |||
Actual loss on plan assets | (4) | |||
Benefits paid | (1) | |||
Fair value of plan assets at end of year | 274 | 274 | ||
Funded status of plans | (12) | (12) | ||
Accrued pension liabilities - noncurrent | (12) | [1] | (12) | [1] |
Net amount recognized | (12) | (12) | ||
Pension Plan | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Benefit obligation at Spin-Off | 95 | |||
Service cost | 1 | 1 | ||
Actuarial (gains) losses | (3) | |||
Benefit obligation at end of year | 93 | 93 | ||
Fair value of plan assets at Spin-Off | 20 | |||
Fair value of plan assets at end of year | 20 | 20 | ||
Funded status of plans | (73) | (73) | ||
Accrued pension liabilities - noncurrent | (73) | [1] | (73) | [1] |
Net amount recognized | $ (73) | $ (73) | ||
[1] | Included in Pension obligations |
Pension - Summary of Accumulate
Pension - Summary of Accumulated Other Comprehensive (Income) Loss Associated with Pension Plans (Details) - Pension Plan $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
UNITED STATES | |
Defined Benefit Plan Disclosure [Line Items] | |
Prior service credit | $ (4) |
Net actuarial loss | 16 |
Net amount recognized | 12 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Net actuarial loss | 5 |
Net amount recognized | $ 5 |
Pension - Summary of Net Period
Pension - Summary of Net Periodic Benefit (Income) Cost and Other Amounts Recognized in Comprehensive (Income) Loss (Details) - Pension Plan - USD ($) $ in Millions | 2 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2018 | |
UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1 | $ 1 |
Interest cost | 2 | 2 |
Expected return on plan assets | (3) | |
Amortization of prior service (credit) cost | 4 | |
Actuarial losses | (5) | |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 1 | 1 |
Actuarial losses | $ 3 | |
Net periodic benefit cost | $ 1 |
Pension - Summary of Net Peri_2
Pension - Summary of Net Periodic Benefit (Income) Cost Other Than The Service Cost Included in Other Expense, Net (Details) - Pension Plan $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
UNITED STATES | |
Defined Benefit Plan Disclosure [Line Items] | |
Actuarial losses (gains) | $ 12 |
Total recognized in other comprehensive loss (income) | 12 |
Total recognized in net periodic benefit cost and other comprehensive income (loss) | 12 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Actuarial losses (gains) | (3) |
Total recognized in other comprehensive loss (income) | (3) |
Total recognized in net periodic benefit cost and other comprehensive income (loss) | $ (2) |
Pension - Summary of Significan
Pension - Summary of Significant Actuarial Assumptions Used in Determining Benefit Obligations and Net Periodic Benefit (Income) Cost (Details) - Pension Plan | 2 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2018 | |
UNITED STATES | ||
Actuarial assumptions used to determine benefit obligations as of December 31: | ||
Discount rate | 4.50% | 4.50% |
Expected annual rate of compensation increase | 3.40% | 3.40% |
Actuarial assumptions used to determine net periodic benefit (income) cost for the two months ended December 31: | ||
Discount rate - benefit obligation | 4.50% | |
Expected rate of return on plan assets | 5.70% | 5.70% |
Expected annual rate of compensation increase | 3.40% | |
Non-U.S. Plans | ||
Actuarial assumptions used to determine benefit obligations as of December 31: | ||
Discount rate | 1.90% | 1.90% |
Expected annual rate of compensation increase | 2.30% | 2.30% |
Actuarial assumptions used to determine net periodic benefit (income) cost for the two months ended December 31: | ||
Discount rate - benefit obligation | 1.90% | |
Expected rate of return on plan assets | 3.30% | |
Expected annual rate of compensation increase | 2.30% |
Pension - Summary of Amounts Re
Pension - Summary of Amounts Relate to Significant Pension Plans with Accumulated Benefit Obligations Exceeding Fair Value of plan Assets (Details) - Pension Plan $ in Millions | Dec. 31, 2018USD ($) |
UNITED STATES | |
Defined Benefit Plan Disclosure [Line Items] | |
Projected benefit obligation | $ 286 |
Accumulated benefit obligation | 281 |
Fair value of plan assets | 274 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Projected benefit obligation | 93 |
Accumulated benefit obligation | 80 |
Fair value of plan assets | $ 20 |
Pension - Summary of Fair Value
Pension - Summary of Fair Values of Both U.S. and Non-U.S. Pension Plans Assets by Asset Category (Details) - Pension Plan - USD ($) $ in Millions | Dec. 31, 2018 | Oct. 29, 2018 |
UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | $ 274 | $ 279 |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 20 | 20 |
Fair Value, Inputs, Level 1 | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 274 | |
Fair Value, Inputs, Level 1 | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 14 | |
Fair Value, Inputs, Level 3 | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 6 | $ 5 |
U.S. Equities | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 45 | |
U.S. Equities | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 1 | |
U.S. Equities | Fair Value, Inputs, Level 1 | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 45 | |
U.S. Equities | Fair Value, Inputs, Level 1 | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 1 | |
Non-U.S. Equities | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 48 | |
Non-U.S. Equities | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 3 | |
Non-U.S. Equities | Fair Value, Inputs, Level 1 | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 48 | |
Non-U.S. Equities | Fair Value, Inputs, Level 1 | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 3 | |
Real Estate Investment Funds | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 26 | |
Real Estate Investment Funds | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 2 | |
Real Estate Investment Funds | Fair Value, Inputs, Level 1 | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 26 | |
Real Estate Investment Funds | Fair Value, Inputs, Level 1 | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 2 | |
Short Term Investments | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 12 | |
Short Term Investments | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 4 | |
Short Term Investments | Fair Value, Inputs, Level 1 | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 12 | |
Short Term Investments | Fair Value, Inputs, Level 1 | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 4 | |
Corporate Bonds | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 143 | |
Corporate Bonds | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 2 | |
Corporate Bonds | Fair Value, Inputs, Level 1 | UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 143 | |
Corporate Bonds | Fair Value, Inputs, Level 1 | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 2 | |
Government Securities | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 1 | |
Government Securities | Fair Value, Inputs, Level 1 | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 1 | |
Insurance Contracts | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 6 | |
Insurance Contracts | Fair Value, Inputs, Level 3 | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 6 | |
Other | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | 1 | |
Other | Fair Value, Inputs, Level 1 | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension plan assets | $ 1 |
Pension - Summary of Changes in
Pension - Summary of Changes in Fair Value of Level 3 Assets for Both U.S. and Non-U.S (Details) - Pension Plan $ in Millions | 2 Months Ended |
Dec. 31, 2018USD ($) | |
UNITED STATES | |
Defined Benefit Plan Disclosure [Line Items] | |
Fair value of plan assets at Spin-Off | $ 279 |
Fair value of plan assets at end of year | 274 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Fair value of plan assets at Spin-Off | 20 |
Fair value of plan assets at end of year | $ 20 |
Fair Value, Inputs, Level 3 | UNITED STATES | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | us-gaap:FairValueInputsLevel3Member |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | us-gaap:FairValueInputsLevel3Member |
Fair Value, Inputs, Level 3 | Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Fair value of plan assets at Spin-Off | $ 5 |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | us-gaap:FairValueInputsLevel3Member |
Relating to assets still held at year-end | $ 1 |
Fair value of plan assets at end of year | $ 6 |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | us-gaap:FairValueInputsLevel3Member |
Pension - Summary of Benefit Pa
Pension - Summary of Benefit Payments (Details) - Pension Plan $ in Millions | Dec. 31, 2018USD ($) |
UNITED STATES | |
Defined Benefit Plan Disclosure [Line Items] | |
2019 | $ 13 |
2020 | 17 |
2021 | 18 |
2022 | 18 |
2023 | 20 |
2024-2028 | 106 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2019 | 1 |
2020 | 1 |
2021 | 2 |
2022 | 2 |
2023 | 2 |
2024-2028 | $ 13 |
Segment Financial Data - Additi
Segment Financial Data - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Financial Data - Schedu
Segment Financial Data - Schedule of Segment Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Revenue | |||||
Total revenue | [1] | $ 4,827 | $ 4,519 | $ 4,455 | |
Depreciation and amortization | |||||
Total | 66 | 67 | 64 | ||
Segment profit | |||||
Total | 529 | 484 | 530 | ||
Capital expenditures | |||||
Total | 81 | 51 | 71 | ||
Products and Solutions | |||||
Revenue | |||||
Total revenue | 2,169 | [2] | 2,042 | 2,100 | |
Depreciation and amortization | |||||
Total | 55 | 57 | 53 | ||
Segment profit | |||||
Total | 381 | 353 | 426 | ||
Capital expenditures | |||||
Total | 73 | 44 | 60 | ||
Global Distribution | |||||
Revenue | |||||
Total revenue | 2,658 | 2,477 | 2,355 | ||
Depreciation and amortization | |||||
Total | 11 | 10 | 11 | ||
Segment profit | |||||
Total | 148 | 131 | 104 | ||
Capital expenditures | |||||
Total | 8 | 7 | 11 | ||
Operating Segments | Products and Solutions | |||||
Revenue | |||||
Total revenue | 2,474 | 2,379 | 2,471 | ||
Intersegment Revenue Eliminations | Products and Solutions | |||||
Revenue | |||||
Total revenue | $ (305) | $ (337) | $ (371) | ||
[1] | Revenue between geographic areas approximate market and are not significant. Net revenue are classified according to their country of origin. Included in United States net revenue are export sales of $31 million, $29 million and $43 million in 2018, 2017 and 2016, respectively. | ||||
[2] | Products and Solutions sales channel naming convention changed from what was disclosed in the 10-Q. Comfort & Care was broken out into Comfort and RTS. |
Segment Financial Data - Sche_2
Segment Financial Data - Schedule of Reconciliation of Segment Profit to Consolidated and Combined Income from Continuing Operations Before Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting [Abstract] | |||
Segment profit | $ 529 | $ 484 | $ 530 |
Pension expense | (13) | (16) | (16) |
Repositioning | (5) | (23) | (19) |
Other expense, net (1) | (369) | (279) | (185) |
Interest expense | (20) | ||
Environmental expense | (18) | ||
Income before taxes | $ 104 | $ 166 | $ 310 |
Segment Financial Data - Sche_3
Segment Financial Data - Schedule of Reconciliation of Segment Profit to Consolidated and Combined Income from Continuing Operations Before Taxes (Parenthetical) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Segment Reporting [Abstract] | |
Pension expense | $ 2 |
Geographic Areas - Financial -
Geographic Areas - Financial - Schedule of Geographic Areas (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Net revenue | [1] | $ 4,827 | $ 4,519 | $ 4,455 |
Long-lived Assets | [2] | 300 | 265 | 261 |
UNITED STATES | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Net revenue | [1] | 3,289 | 3,074 | 3,047 |
Long-lived Assets | [2] | 184 | 162 | 163 |
Europe | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Net revenue | [1] | 1,138 | 1,063 | 1,051 |
Long-lived Assets | [2] | 91 | 82 | 70 |
Other International | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Net revenue | [1] | 400 | 382 | 357 |
Long-lived Assets | [2] | $ 25 | $ 21 | $ 28 |
[1] | Revenue between geographic areas approximate market and are not significant. Net revenue are classified according to their country of origin. Included in United States net revenue are export sales of $31 million, $29 million and $43 million in 2018, 2017 and 2016, respectively. | |||
[2] | Long-lived assets are comprised of property, plant and equipment—net. |
Geographic Areas - Financial _2
Geographic Areas - Financial - Schedule of Geographic Areas (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Net revenue | [1] | $ 4,827 | $ 4,519 | $ 4,455 |
UNITED STATES | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Net revenue | [1] | 3,289 | 3,074 | 3,047 |
UNITED STATES | Export Sales | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Net revenue | $ 31 | $ 29 | $ 43 | |
[1] | Revenue between geographic areas approximate market and are not significant. Net revenue are classified according to their country of origin. Included in United States net revenue are export sales of $31 million, $29 million and $43 million in 2018, 2017 and 2016, respectively. |
Unaudited Quaterly Financial In
Unaudited Quaterly Financial Information - Unaudited Quarterly Results of Operations (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | [1] | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | [1] | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||
Net Revenue | $ 1,266 | $ 1,200 | $ 1,196 | $ 1,165 | $ 1,209 | $ 1,152 | $ 1,096 | $ 1,062 | $ 4,827 | $ 4,519 | |||||||||||
Gross Profit | 330 | 347 | 346 | 343 | 361 | 336 | 308 | 311 | 1,366 | 1,316 | $ 1,365 | ||||||||||
Net Income (Loss) | $ 16 | $ 311 | $ 33 | $ 45 | $ (449) | $ 23 | $ 16 | $ 16 | $ 405 | $ (394) | $ 177 | ||||||||||
Earnings (Loss) Per Share - Basic | $ 0.13 | [2] | $ 2.54 | [2] | $ 0.27 | [2] | $ 0.37 | [2] | $ (3.67) | [2] | $ 0.19 | [2] | $ 0.13 | [2] | $ 0.13 | [2] | $ 3.31 | [2] | $ (3.22) | [2] | $ 1.44 |
Earnings (Loss) Per Share - Diluted | $ 0.13 | [2] | $ 2.54 | [2] | $ 0.27 | [2] | $ 0.37 | [2] | $ (3.67) | [2] | $ 0.19 | [2] | $ 0.13 | [2] | $ 0.13 | [2] | $ 3.30 | [2] | $ (3.22) | [2] | $ 1.44 |
[1] | Basic and diluted EPS for the three months ended September 30, 2018 and September 30, 2017 has been revised from the third quarter 10-Q to correctly reflect the exclusion of 467,764 treasury shares received by Resideo as part of the Spin-Off. This increased earnings per share by $0.01 and $0.02 for the three and nine months ended September 30, 2018, respectively, and had no impact on earnings per share for the three and nine months ended September 30, 2017 | ||||||||||||||||||||
[2] | On October 29, 2018, the date of the Spin-Off, 122,498,794 shares of the Company's Common Stock were distributed to Honeywell stockholders of record as of October 16, 2018. Basic and Diluted EPS for all periods prior to Spin-Off reflect the number of distributed shares, or 122,498,794 shares. |
Unaudited Quaterly Financial _2
Unaudited Quaterly Financial Information - Unaudited Quarterly Results of Operations (Parenthetical) (Details) - $ / shares | Oct. 29, 2018 | Oct. 16, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Impact on earnings per share | $ 0.01 | $ 0.02 | |||
Spin-Off | |||||
Exclusion of shares from computation of EPS | 467,764 | 467,764 | 467,764 | ||
Honeywell | Spin-Off | |||||
Shares issued | 122,498,794 | ||||
Distribution made at spin-off date of record | Oct. 16, 2018 |