Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 02, 2024 | Jul. 01, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38635 | ||
Entity Registrant Name | Resideo Technologies, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-5318796 | ||
Entity Address, Address Line One | 16100 N. 71st Street | ||
Entity Address, Address Line Two | Suite 550 | ||
Entity Address, City or Town | Scottsdale | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85254 | ||
City Area Code | 480 | ||
Local Phone Number | 573-5340 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | REZI | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2.6 | ||
Entity Common Stock, Shares Outstanding | 145,318,782 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Entity Central Index Key | 0001740332 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Minneapolis, Minnesota |
Auditor Firm ID | 34 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 636 | $ 326 |
Accounts receivable, net | 973 | 1,002 |
Inventories, net | 941 | 975 |
Other current assets | 193 | 199 |
Total current assets | 2,743 | 2,502 |
Property, plant and equipment, net | 390 | 366 |
Goodwill | 2,705 | 2,724 |
Intangible assets, net | 461 | 475 |
Other assets | 346 | 320 |
Total assets | 6,645 | 6,387 |
Current liabilities: | ||
Accounts payable | 905 | 894 |
Current portion of long-term debt | 12 | 12 |
Accrued liabilities | 608 | 640 |
Total current liabilities | 1,525 | 1,546 |
Long-term debt | 1,396 | 1,404 |
Obligations payable under Indemnification Agreements | 609 | 580 |
Other liabilities | 366 | 328 |
Total liabilities | 3,896 | 3,858 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders’ equity | ||
Common stock, $0.001 par value: 700 shares authorized, 151 and 145 shares issued and outstanding at December 31, 2023, respectively, and 148 and 146 shares issued and outstanding at December 31, 2022, respectively | 0 | 0 |
Additional paid-in capital | 2,226 | 2,176 |
Retained earnings | 810 | 600 |
Accumulated other comprehensive loss, net | (194) | (212) |
Treasury stock at cost | (93) | (35) |
Total stockholders’ equity | 2,749 | 2,529 |
Total liabilities and stockholders’ equity | $ 6,645 | $ 6,387 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 151,000,000 | 148,000,000 |
Common stock, shares outstanding (in shares) | 145,000,000 | 146,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Net revenue | $ 6,242,000,000 | $ 6,370,000,000 | $ 5,846,000,000 |
Cost of goods sold | 4,546,000,000 | 4,604,000,000 | 4,262,000,000 |
Gross profit | 1,696,000,000 | 1,766,000,000 | 1,584,000,000 |
Operating expenses: | |||
Research and development expenses | 109,000,000 | 111,000,000 | 86,000,000 |
Selling, general and administrative expenses | 960,000,000 | 974,000,000 | 909,000,000 |
Intangible asset amortization | 38,000,000 | 35,000,000 | 30,000,000 |
Restructuring and impairment expenses | 42,000,000 | 35,000,000 | 0 |
Total operating expenses | 1,149,000,000 | 1,155,000,000 | 1,025,000,000 |
Income from operations | 547,000,000 | 611,000,000 | 559,000,000 |
Other expenses, net | 169,000,000 | 139,000,000 | 159,000,000 |
Interest expense, net | 65,000,000 | 54,000,000 | 47,000,000 |
Income before taxes | 313,000,000 | 418,000,000 | 353,000,000 |
Provision for income taxes | 103,000,000 | 135,000,000 | 111,000,000 |
Net income | $ 210,000,000 | $ 283,000,000 | $ 242,000,000 |
Earnings per share: | |||
Basic (in dollars per share) | $ 1.43 | $ 1.94 | $ 1.68 |
Diluted (in dollars per share) | $ 1.42 | $ 1.90 | $ 1.63 |
Weighted average number of shares outstanding: | |||
Basic (in dollars per share) | 147 | 146 | 144 |
Diluted (in dollars per share) | 148 | 149 | 148 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 210 | $ 283 | $ 242 |
Other comprehensive income (loss), net of tax: | |||
Foreign exchange translation gain (loss) | 47 | (74) | (57) |
Pension liability adjustments | (12) | (9) | 32 |
Changes in fair value of effective cash flow hedges | (17) | 36 | 6 |
Total other comprehensive income (loss), net of tax | 18 | (47) | (19) |
Comprehensive income | $ 228 | $ 236 | $ 223 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows From Operating Activities: | |||
Net income | $ 210,000,000 | $ 283,000,000 | $ 242,000,000 |
Adjustments to reconcile net income to net cash in operating activities: | |||
Depreciation and amortization | 98,000,000 | 94,000,000 | 88,000,000 |
Restructuring and impairment expenses | 42,000,000 | 35,000,000 | 0 |
Stock-based compensation expense | 44,000,000 | 50,000,000 | 39,000,000 |
Deferred income taxes | (28,000,000) | (3,000,000) | 6,000,000 |
Other, net | (14,000,000) | 6,000,000 | 44,000,000 |
Changes in assets and liabilities, net of acquired companies: | |||
Accounts receivable, net | 19,000,000 | (72,000,000) | (30,000,000) |
Inventories, net | 32,000,000 | (122,000,000) | (73,000,000) |
Other current assets | 6,000,000 | (26,000,000) | 27,000,000 |
Accounts payable | 18,000,000 | (43,000,000) | (42,000,000) |
Accrued liabilities | (34,000,000) | (21,000,000) | 14,000,000 |
Other, net | 47,000,000 | (29,000,000) | 0 |
Net cash provided by operating activities | 440,000,000 | 152,000,000 | 315,000,000 |
Cash Flows From Investing Activities: | |||
Capital expenditures | (105,000,000) | (85,000,000) | (63,000,000) |
Proceeds from sale of business | 86,000,000 | 0 | 0 |
Acquisitions, net of cash acquired | (16,000,000) | (665,000,000) | (11,000,000) |
Other investing activities, net | (9,000,000) | (14,000,000) | 9,000,000 |
Net cash used in investing activities | (44,000,000) | (764,000,000) | (65,000,000) |
Cash Flows From Financing Activities: | |||
Common stock repurchases | (41,000,000) | 0 | 0 |
Proceeds from issuance of A&R Term B Facility | 0 | 200,000,000 | 1,250,000,000 |
Repayments of long-term debt | (12,000,000) | (12,000,000) | (1,188,000,000) |
Other financing activities, net | (11,000,000) | (18,000,000) | (42,000,000) |
Net cash (used in) provided by financing activities | (64,000,000) | 170,000,000 | 20,000,000 |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (24,000,000) | (8,000,000) | (8,000,000) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 308,000,000 | (450,000,000) | 262,000,000 |
Cash, cash equivalents and restricted cash at beginning of year | 329,000,000 | 779,000,000 | 517,000,000 |
Cash, cash equivalents and restricted cash at end of year | 637,000,000 | 329,000,000 | 779,000,000 |
Supplemental Cash Flow Information: | |||
Interest paid | 80,000,000 | 54,000,000 | 39,000,000 |
Taxes paid, net of refunds | 123,000,000 | 159,000,000 | 107,000,000 |
Capital expenditures in accounts payable | $ 14,000,000 | $ 21,000,000 | $ 14,000,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning of period at Dec. 31, 2020 | $ 1,993 | $ 0 | $ 2,070 | $ 75 | $ (146) | $ (6) |
Shares outstanding, beginning (in shares) at Dec. 31, 2020 | 143,059,000 | |||||
Treasury stock, beginning (in shares) at Dec. 31, 2020 | 900,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 242 | 242 | ||||
Other comprehensive income, net of tax | (19) | (19) | ||||
Common stock issuance, net of shares withheld for taxes | (3) | 12 | $ (15) | |||
Common stock issuance, net of shares withheld for taxes (in shares) | 1,749,000 | 540,000 | ||||
Stock-based compensation expense | 39 | 39 | ||||
End of period at Dec. 31, 2021 | 2,252 | $ 0 | 2,121 | 317 | (165) | $ (21) |
Shares outstanding, ending (in shares) at Dec. 31, 2021 | 144,808,000 | |||||
Treasury stock, ending (in shares) at Dec. 31, 2021 | 1,440,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 283 | 283 | ||||
Other comprehensive income, net of tax | (47) | (47) | ||||
Common stock issuance, net of shares withheld for taxes | (9) | 5 | $ (14) | |||
Common stock issuance, net of shares withheld for taxes (in shares) | 1,414,000 | 610,000 | ||||
Stock-based compensation expense | 50 | 50 | ||||
End of period at Dec. 31, 2022 | 2,529 | $ 0 | 2,176 | 600 | (212) | $ (35) |
Shares outstanding, ending (in shares) at Dec. 31, 2022 | 146,222,000 | |||||
Treasury stock, ending (in shares) at Dec. 31, 2022 | 2,050,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 210 | 210 | ||||
Other comprehensive income, net of tax | 18 | 18 | ||||
Common stock issuance, net of shares withheld for taxes | (11) | 6 | $ (17) | |||
Common stock issuance, net of shares withheld for taxes (in shares) | 1,726,000 | 927,000 | ||||
Stock-based compensation expense | 44 | 44 | ||||
Common stock repurchases | (41) | $ (41) | ||||
Common stock repurchases (shares) | (2,559,000) | (2,559,000) | ||||
End of period at Dec. 31, 2023 | $ 2,749 | $ 0 | $ 2,226 | $ 810 | $ (194) | $ (93) |
Shares outstanding, ending (in shares) at Dec. 31, 2023 | 145,389,000 | |||||
Treasury stock, ending (in shares) at Dec. 31, 2023 | 5,536,000 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Nature of Operations Resideo is a leading manufacturer and developer of technology-driven products that provide critical comfort, energy, smoke and carbon monoxide detection home safety products, and security solutions to homes globally. We are also a leading wholesale distributor of low-voltage security products including access control, fire detection, fire suppression, security, and video products, and participate significantly in the broader related markets of audio, communications, data communications, networking, power, ProAV, smart home, and wire and cable. Our global footprint serves both commercial and residential end markets. Basis of Consolidation and Reporting The accompanying Consolidated Financial Statements include the accounts of the Company and our wholly-owned subsidiaries and have been prepared in accordance with U.S. GAAP. All intercompany accounts, transactions and profits arising from consolidated entities have been eliminated in consolidation. We report financial information on a fiscal quarter basis using a modified four-four-five week calendar. Our fiscal calendar begins on January 1 and ends on December 31. We have elected the first, second and third quarters to end on a Saturday in order to not disrupt business processes. The effects of this election are generally not significant to reported results for any quarter and only exist within a reporting year. Reclassification For the purposes of comparability, certain prior period amounts have been reclassified to conform to current period classification. Subsequent Events None |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies We consider the following policies to be beneficial in understanding the judgment involved in the preparation of our Consolidated Financial Statements and the uncertainties that could impact our financial condition, results of operations and cash flows. (a) Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities in the Consolidated Financial Statements and accompanying notes. Estimates are used for, but not limited to, provisions for expected credit losses and inventory reserves, accounting for business combinations and dispositions, valuation of reporting units for purposes of assessing goodwill for impairment, valuation of long-lived asset groups for impairment testing, accruals for employee benefits, stock-based compensation, pension benefits, indemnification liabilities, deferred taxes, warranties and certain contingencies. We base our estimates on historical experience, market participant fair value considerations, projected future cash flows, and various other factors that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. (b) Cash, Cash Equivalents and Restricted Cash —Cash and cash equivalents may consist of cash on hand, money market instruments, time deposits and highly liquid investments. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents that are restricted as to the withdrawal or use under terms of certain contractual agreements are recorded in other current assets on the Consolidated Balance Sheets and primarily relate to collateral to support certain bank guarantees. Restricted cash for the periods presented were not material. Cash, cash equivalents and restricted cash are carried at cost, which approximates fair value. (c) Accounts Receivable and Allowance for Doubtful Accounts —Accounts receivable are recorded at the invoiced amount, presented net of allowance for doubtful accounts and do not bear interest. We review the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Allowance for doubtful accounts was not material as of December 31, 2023 and 2022, respectively. (d) Inventories —Inventories are stated at lower of cost or net realizable value and valued by the first-in-first-out method. Inventory reserves are maintained for obsolete and surplus items. The following tables summarize the details of our inventory, net: December 31, (in millions) 2023 2022 Raw materials $ 221 $ 251 Work in process 18 25 Finished products 702 699 Total inventories, net $ 941 $ 975 (e) Property, Plant and Equipment —Property, plant and equipment are stated at cost, less accumulated depreciation. For financial reporting purposes the straight-line method of depreciation is used over the estimated useful lives. Leasehold improvements are capitalized and amortized using the straight-line method over the shorter of their estimated useful lives or the term of the underlying lease. Depreciation is recognized in cost of sales, research and development, and selling, general and administrative expenses based on the nature and use of the underlying assets. The following table summarizes the details of our property, plant and equipment, including useful lives: December 31, (in millions) 2023 2022 Useful Lives Machinery and equipment $ 659 $ 647 3-16 years Buildings and improvements 314 303 10-50 years Construction in progress 85 80 NA Land 10 9 NA Gross property, plant and equipment 1,068 1,039 Accumulated depreciation (678) (673) Total property, plant and equipment, net $ 390 $ 366 NA = Not applicable; assets categorized as construction in progress and land are not depreciated. Depreciation expense was $59 million, $59 million and $58 million for the years ended December 31, 2023, 2022 and 2021, respectively. (f) Impairment of Long-Lived Assets —We assess the recoverability of the carrying amount of property, plant and equipment if events or changes in circumstances indicate that the carrying amount or related group of assets may not be recoverable. If the expected undiscounted cash flows are less than the carrying amount of the asset an impairment loss is recognized. (g) Goodwill and Intangible Assets —We review the carrying values of goodwill and identifiable intangibles whenever events or changes in circumstances indicate that such carrying values may not be recoverable and annually, on the first day of the fourth quarter. If the carrying value of a reporting unit exceeds its fair value, we record a goodwill impairment loss as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Refer to Note 9. Goodwill and Intangible Assets, net to Consolidated Financial Statements. (h) Restructuring —We enter into various restructuring initiatives, optimization projects, strategic transactions, and other business activities that may include the recognition of exit or disposal costs. Exit or disposal costs are typically costs of termination benefits, such as severance and costs associated with the closure or consolidation of operating facilities. Impairment of property and equipment and other current or long-term assets as a result of a restructuring initiative is recognized as a reduction of the appropriate asset. Refer to Note 6. Restructuring to Consolidated Financial Statements. (i) Derivatives —Our interest rate swap agreements effectively modify our exposure to interest rate risk by converting floating rate debt to a fixed rate for the term of the swap agreements, reducing the impact of interest rate changes on future interest expense. These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount. Our interest rate swap agreements are designated as cash flow hedges with effectiveness of the hedges assessed at inception and quarterly thereafter. To the extent the hedging relationship is highly effective, the unrealized gains or losses on the swaps are recorded in accumulated other comprehensive loss and reclassified into earnings within interest expense, net when the payments occur. We classify our cash flows related to interest rate swap agreements as operating activities in the Consolidated Statements of Cash Flows. The fair values of the interest rate swaps are reflected as an other asset or liability in the Consolidated Balance Sheets and the change in fair value is reported in accumulated other comprehensive loss. The fair values of the interest rate swaps are estimated as the net present value of projected cash flows based upon forward interest rates at the balance sheet date. We do not offset fair value amounts recognized in our Consolidated Balance Sheets for presentation purposes. Refer to Note 12. Derivative Financial Instruments to Consolidated Financial Statements. (j) 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. We periodically adjust these provisions to reflect actual experience and other facts and circumstances that impact the status of existing claims. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. (k) Leases —Included in our Consolidated Balance Sheets are certain operating leases that are reported as a component of other assets and other liabilities. The leased assets represent our right to use an underlying asset for the lease term and the lease liabilities represent our obligation to make lease payments arising from the lease. An incremental borrowing rate is used to calculate the present value of the remaining lease payments. Each contract is reviewed at inception to determine if it contains a lease and whether the lease qualifies as an operating or financing lease. For short-term leases (leases with a term of 12 months or less), right-of-use assets or lease liabilities are not recognized in the Consolidated Balance Sheets. Operating leases are expensed on a straight-line basis over the term of the lease. In determining the lease term, we consider the probability of exercising renewal or early termination options. In addition to the monthly base rent, we are often charged separately for common area maintenance, utilities and taxes, which are considered a non-lease component. These non-lease component payments are expensed as incurred and are not included in operating lease assets or liabilities. Right-of-use assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable in accordance with our long-lived asset impairment assessment policy. Refer to Note 10. Leases to Consolidated Financial Statements. (l) Revenue Recognition —We enter into contracts that pertain to products, which are accounted for as separate performance obligations and are typically one year or less in duration. 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. Revenue is measured as the amount of consideration expected to be received in exchange for our products. We recognize the majority of our revenue from performance obligations outlined in contracts with our customers that are satisfied at a point in time, generally when the product has shipped from our facility and control has transferred to the customer. For certain products, it is industry practice that customers take title to products upon delivery, at which time revenue is then recognized. Allowances for cash discounts, volume rebates and other customer incentive programs, as well as gross customer returns, among others, are recorded as a reduction of sales at the time of sale based upon the estimated future outcome. Cash discounts, volume rebates and other customer incentive programs are based upon certain percentages agreed upon with various customers, which are typically earned by the customer over an annual period. Revenue is adjusted for variable consideration, which includes customer volume rebates and prompt payment discounts. We measure variable consideration by estimating expected outcomes using analysis and inputs based upon anticipated performance, historical data, and current and forecasted information. Customer returns are recorded as a reduction to sales on an actual basis throughout the year and also include an estimate at the end of each reporting period for future customer returns related to sales recorded prior to the end of the period. We generally estimate customer returns based upon the time lag that historically occurs between the sale date and the return date, while also factoring in any new business conditions that might impact the historical analysis such as new product introduction. Measurement of variable consideration is reviewed by management periodically and revenue is adjusted accordingly. We do not have significant financing components. Sales, use and value added taxes collected and remitted to various government authorities were not recognized as revenue and are reported on a net basis. Shipping and handling fees billed to customers are included in cost of goods sold. Refer to Note 5. Revenue Recognition to Consolidated Financial Statements. (m) Royalty —In connection with the Spin-Off, we entered into a 40-year Trademark License Agreement (the “Trademark Agreement”) with Honeywell that authorizes our use of certain licensed trademarks in the operation of Resideo’s business for the advertising, sale and distribution of certain licensed products. In exchange, we 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 Statements of Operations. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. (n) Reimbursement Agreement —In connection with the Spin-Off we entered into a Reimbursement Agreement, pursuant to which we have 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 Honeywell properties contaminated through historical business operations prior to the Spin-Off (Honeywell Sites), 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. Reimbursement Agreement expenses are presented within other expense, net in the Consolidated Statements of Operations and within obligations payable under Indemnification Agreements in the Consolidated Balance Sheets. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. (o) Environmental —We accrue costs related to environmental matters when it is probable that we have incurred a liability related to a contaminated site and the amount can be reasonably estimated. Environmental costs for our owned sites are presented within cost of goods sold for operating sites in the Consolidated Statements of Operations. Refer to Note 15. Commitments and Contingencies. (p) 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 taken or omission made (other than actions expressly required or permitted by the Separation and Distribution Agreement, the Tax Matters Agreement or other ancillary agreements) after the consummation of the Spin-Off that gives rise to these taxes. As of December 31, 2023 and 2022, we had an indemnity outstanding to Honeywell for past and potential future tax payments of $97 million and $106 million, respectively. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. (q) Research and Development —We conduct research and development activities, which consist primarily of the development of new products and solutions as well as enhancements and improvements to existing products that substantially change the product. Research and development costs primarily relate to employee compensation and consulting fees, which are charged to expense as incurred. (r) Defined Contribution Plans— We sponsor various defined contribution plans with varying terms depending on the country of employment. For the years ended December 31, 2023, 2022 and 2021, we recognized compensation expense related to the defined contribution plans of $22 million, $22 million, and $19 million, respectively. (s) Stock-Based Compensation Plans —The principal awards issued under our stock-based compensation plans, which are described in Note 8. 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. Some awards are issued with a market condition, which are valued on the grant date utilizing a Monte Carlo simulation model. Stock options are also issued under our stock-based compensation plans and are valued on the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model and the Monte Carlo simulation model require estimates of future stock price volatility, expected term, risk-free interest rate and forfeitures. For all stock-based compensation, the fair value of the award 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 Statements of Operations. Our time-based restricted stock awards are typically subject to graded vesting over a service period; while our performance or market based awards are typically subject to cliff vesting at the end of the service period. (t) Pension —We disaggregate the service cost component of net benefit costs and report those costs in the same line item or items in the Consolidated Statements 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. We have recorded the service cost component of pension expense in costs of goods sold and selling, general and administrative expenses based on the classification of the employees it relates to. The remaining components of net benefit costs within pension expense, primarily interest costs and expected return on plan assets, are recorded in other expense, net. We recognize 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 of each year. This adjustment is reported in other expense, net in the Consolidated Statements of Operations. Refer to Note 7. Pension Plans to Consolidated Financial Statements. (u) Foreign Currency Translation —Assets and liabilities of operations outside the U.S. 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 loss. (v) Income Taxes —Significant judgment is required in evaluating tax positions. We established 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 our subsidiaries are examined by various federal, state and foreign tax authorities. We regularly assess the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of our provision for income taxes. We continually assess 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. Refer to Note 17. Income Taxes to Consolidated Financial Statements. (w) Accounting Pronouncements —We consider the applicability and impact of all recent accounting standards updates (“ASU”) 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 our Consolidated Financial Statements. Adopted Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and subsequent amendment to the initial guidance: ASU 2021-01, Reference Rate Reform (Topic 848): Scope (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 . ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. This guidance may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2024. We adopted these ASUs during the second quarter of 2023. The impact of the adoption of this standard on our financial statements and related disclosures, including accounting policies, processes, and systems, was not material. Refer to Note 11. Long-Term Debt and Note 12. Derivative Financial Instruments |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Pro forma results of operations for the following acquisitions have not been presented, as the impacts on our consolidated financial results were not material. 2023 Genesis Cable —On October 16, 2023, we sold the Genesis Cable business in a cash transaction for $86 million, subject to working capital and other closing adjustments. We recognized a pre-tax gain of $18 million in other expenses, net in our Consolidated Statements of Operations, which includes $5 million of divestiture related costs. The divested business did not represent a strategic shift that has a major effect on our operations and financial results, and, as such, it was not presented as discontinued operations. Sfty AS —On August 9, 2023, we acquired 100% of the outstanding equity of Sfty AS, a developer of cloud-based services providing alerts to multifamily homes and property managers with smoke, carbon monoxide and water leak detection products. We report Sfty AS’s results within the Products and Solutions segment. We completed the accounting for the acquisition during the fourth quarter of 2023, which did not result in any material adjustments. BTX Technologies, Inc. —On January 23, 2023, we acquired 100% of the outstanding equity of BTX Technologies, Inc., (“BTX”) a leading distributor of professional audio, video, data communications, and broadcast equipment. We report BTX’s results within the ADI Global Distribution segment. We completed the accounting for the acquisition during the fourth quarter of 2023, which did not result in any material adjustments. 2022 Teknique Limited —On December 23, 2022, we acquired 100% of the outstanding equity of Teknique Limited, a developer and producer of edge-based, artificial intelligence-enabled video camera solutions. We report Teknique Limited’s results within the Products and Solutions segment. Purchase consideration included cash and a note payable with the former owner. We completed the accounting for the acquisition during the fourth quarter of 2023, which did not result in any material adjustments. Electronic Custom Distributors, Inc. —On July 5, 2022, we acquired 100% of the outstanding equity of Electronic Custom Distributors, Inc., a regional distributor of residential audio, video, automation, security, wire and telecommunication products. We report Electronic Customer Distributors, Inc.’s results within the ADI Global Distribution segment. We completed the accounting for the acquisition during the first quarter of 2023, which did not result in any adjustments. First Alert, Inc. —On March 31, 2022, we acquired 100% of the outstanding equity of First Alert, Inc. (“First Alert”), a leading provider of home safety products. We report First Alert, Inc.’s results within the Products and Solutions segment. We completed the accounting for the acquisition during the first quarter of 2023, which did not result in any adjustments. Arrow Wire and Cable, Inc. —On February 14, 2022, we acquired 100% of the outstanding equity of Arrow Wire and Cable, Inc., a leading regional distributor of data communications, connectivity and security products. The business is included within the ADI Global Distribution segment and is expected to strengthen our global distribution portfolio in the data communications category with an assortment of copper and fiber cabling and connectivity, connectors, racking solutions, and network equipment. We completed the accounting for the acquisition during the first quarter of 2023, which did not result in any adjustments. |
Segment Financial Data
Segment Financial Data | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Financial Data | Segment Financial Data The Company’s segment information is evaluated by our Chief Executive Officer, who is also the CODM and is consistent with how management reviews and assesses the performance of the business as well as makes investing and resource allocation decisions. We monitor our operations through our two reportable segments: Products and Solutions and ADI Global Distribution, and report Corporate separately. These operating segments follow the same accounting policies used for the financial statements. We evaluate a segment’s performance on a U.S. GAAP basis, primarily operating income before corporate expenses. Products and Solutions —The Products and Solutions business is a leading global manufacturer and developer of technology-driven products and components that provide critical comfort, energy management, and safety and security solutions to over 150 million homes globally. Our offerings include temperature and humidity control, thermal water and air solutions, as well as security panels, sensors, peripherals, communications devices, video cameras, other home-related lifestyle convenience solutions, cloud infrastructure, installation and maintenance tools, and related software. ADI Global Distribution —The ADI Global Distribution business is a leading wholesale distributor of low-voltage security products including security and life safety, access control and video products and participates significantly in the broader related markets of smart home, power, audio, ProAV, networking, communications, wire and cable, and data communications. Corporate —Corporate expenses include expenses related to the corporate office as well as supporting the operating segments, but do not relate directly to revenue-generating activities primarily including unallocated stock-based compensation expenses, unallocated pension expense, restructuring expenses, acquisition-related costs, and other expenses related to executive, legal, finance, tax, treasury, human resources, IT, strategy, communications, and corporate travel expenses. Additional unallocated amounts primarily include non-operating items such as Reimbursement Agreement expense, interest income, interest expense, and other income (expense). The Reimbursement Agreement is further described in Note 15. Commitments and Contingencies to Consolidated Financial Statements. The following tables represent summary financial data attributable to the segments: Years Ended December 31, (in millions) 2023 2022 2021 Net revenue Products and Solutions $ 2,672 $ 2,783 $ 2,468 ADI Global Distribution 3,570 3,587 3,378 Total net revenue $ 6,242 $ 6,370 $ 5,846 Years Ended December 31, (in millions) 2023 2022 2021 Income from operations Products and Solutions $ 495 $ 527 $ 541 ADI Global Distribution 270 313 268 Corporate (218) (229) (250) Total income from operations $ 547 $ 611 $ 559 Years Ended December 31, (in millions) 2023 2022 2021 Depreciation and amortization Products and Solutions $ 71 $ 69 $ 65 ADI Global Distribution 18 14 11 Corporate 9 11 12 Total depreciation and amortization $ 98 $ 94 $ 88 Years Ended December 31, (in millions) 2023 2022 2021 Capital expenditures Products and Solutions $ 77 $ 55 $ 37 ADI Global Distribution 26 29 24 Corporate 2 1 2 Total capital expenditures $ 105 $ 85 $ 63 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. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregated Revenue We have two operating segments, Products and Solutions and ADI Global Distribution. Disaggregated revenue information for Products and Solutions is presented by product grouping, while ADI Global Distribution is presented by region. Beginning January 1, 2022, the Products and Solutions operating segment further disaggregated the Comfort product grouping into Air and Water and Residential Thermal Solutions is now referenced as Energy. As of April 1, 2022, the First Alert business is included in the Security and Safety grouping. 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. We recognize the majority of our revenue from performance obligations outlined in contracts with our customers that are satisfied at a point in time. Approximately 2% of our revenue is satisfied over time. As of December 31, 2023 and 2022, contract assets and liabilities were not material. The timing of satisfaction of performance obligations does not significantly vary from the typical timing of payment. For some contracts, we may be entitled to receive an advance payment. We have 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. The following table presents revenue by business line and geographic location, as we believe this presentation best depicts how the nature, amount, timing, and uncertainty of net revenue and cash flows are affected by economic factors: Years Ended December 31, (in millions) 2023 2022 2021 Products and Solutions Air $ 862 $ 953 $ 858 Safety and Security 965 913 667 Energy 525 595 594 Water 320 322 349 Total Products and Solutions 2,672 2,783 2,468 ADI Global Distribution U.S. and Canada 3,085 3,087 2,814 EMEA (1) 485 474 523 APAC (2) — 26 41 Total ADI Global Distribution 3,570 3,587 3,378 Total net revenue $ 6,242 $ 6,370 $ 5,846 (1) EMEA represents Europe, the Middle East and Africa. (2) APAC represents Asia and Pacific countries. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In the fourth quarter of 2022 and during 2023, we took actions to align our cost structure with market conditions. The intent of these actions is to lower costs, increase margins, and position us for long-term growth. Restructuring and impairment expense was $42 million and $35 million for the years ended December 31, 2023 and 2022, respectively. During 2021, there were no new restructuring programs or restructuring and impairment charges. The following table represents restructuring and impairment expense attributable to the segments: Years Ended December 31, (in millions) 2023 2022 Products and Solutions $ 27 $ 29 ADI Global Distribution 12 2 Corporate 3 4 Restructuring and impairment expenses $ 42 $ 35 Restructuring and impairment expense, net is presented in the Consolidated Statements of Operations and relate to workforce reductions as well as the impairment of certain long-lived assets. We expect to fully execute our restructuring initiatives and programs over the next 12 to 24 months, and we may incur future additional restructuring expenses associated with these plans. We are unable at this time to make a good faith determination of cost estimates, or ranges of cost estimates, associated with future phases of the plans or the total costs we may incur in connection with these plans. The following table summarizes the status of our restructuring expenses included within accrued liabilities on the Consolidated Balance Sheets. December 31, (in millions) 2023 2022 2021 Beginning of year $ 27 $ 9 $ 24 Charges 34 26 — Usage (1) (31) (5) (11) Other — (3) (4) End of year $ 30 $ 27 $ 9 |
Pension Plans
Pension Plans | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Pension Plans | Pension Plans We sponsor multiple funded and unfunded U.S. and non-U.S. defined benefit pension plans. Pension benefits for many of our U.S. employees are provided through non-contributory, qualified and non-qualified defined benefit plans. We also sponsor defined benefit pension plans that cover non-U.S. employees, in certain jurisdictions, principally Germany, Switzerland, the Netherlands, Belgium, India, Austria, and France. We triggered settlement accounting and performed a remeasurement of our U.S. qualified defined benefit pension plan as a result of a voluntary lump sum window offering and the purchase of a group annuity contract that transferred a portion of the assets and liabilities to an insurance company during the first quarter of 2023. Non-cash pension settlement losses of $6 million was recognized within other expense, net in the Consolidated Statements of Operations for the year ended December 31, 2023. The corresponding remeasurement of our U.S. qualified defined benefit pension plan resulted in decreases of $83 million in plan assets and $78 million in liabilities for the year ended December 31, 2023. Additionally, there was a curtailment of the non-U.S. defined benefit pension plans as a result of our restructuring activities which resulted in a $2 million gain recognized within other expense, net in the Consolidated Statements of Operations for the year ended December 31, 2023. The following table summarizes the balance sheet impact, including the benefit obligations, assets and funded status associated with the pension plans: U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2021 2023 2022 2021 Change in benefit obligation: Benefit obligation at beginning of year $ 281 $ 348 $ 374 $ 96 $ 141 $ 161 Service cost 3 7 7 4 5 7 Interest cost 13 11 10 3 2 1 Actuarial losses (gains) 23 (66) (20) 8 (45) (18) Net benefits paid (3) (18) (5) 4 — — Settlements and curtailments (83) (1) (18) (13) — (1) Other — — — 1 1 1 Foreign currency translation — — — 5 (8) (10) Benefit obligation at end of year 234 281 348 108 96 141 Change in plan assets: Fair value of plan assets at beginning of year 262 342 340 27 32 28 Actual return on plan assets 20 (62) 25 1 (6) 2 Employer contributions — 1 — 2 3 3 Net benefits paid (3) (18) (5) 4 — 1 Settlements and curtailments (83) (1) (18) (11) — (1) Other 1 — — 1 (1) — Foreign currency translation — — — 2 (1) (1) Fair value of plan assets at end of year 197 262 342 26 27 32 Funded status of plans (non-current) $ (37) $ (19) $ (6) $ (82) $ (69) $ (109) The amounts recognized in accrued liabilities on the Consolidated Balance Sheets were $2 million at December 31, 2023 and 2022. The amounts recognized in other liabilities on the Consolidated Balance Sheets were $117 million and $86 million at December 31, 2023 and 2022, respectively. The benefit obligation generated a global net actuarial loss of $31 million for the year ended December 31, 2023. The main driver of this loss was experience losses of $20 million. The loss was also driven by changes in actuarial assumptions that resulted in losses of $11 million. Actual return on plan assets for the year ended December 31, 2023 was $21 million. The gain was primarily related to the U.S. and the Netherlands, which experienced gains of $20 million and $1 million, respectively. Amounts recognized in accumulated other comprehensive loss associated with pension plans at December 31, 2023 and 2022 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2023 2022 Prior service cost $ — $ — $ 2 $ 2 Net actuarial loss (gain) 20 13 — (8) Net amount recognized $ 20 $ 13 $ 2 $ (6) The estimated actuarial losses and prior service costs that will be amortized from accumulated other comprehensive loss into net periodic pension cost over the next fiscal year are immaterial. The components of net periodic benefit (income) cost for the years ended December 31, 2023, 2022 and 2021 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2021 2023 2022 2021 Net periodic benefit cost (income) Service cost $ 3 $ 7 $ 7 $ 4 $ 5 $ 7 Interest cost 13 11 10 3 2 1 Expected return on plan assets (11) (17) (16) (1) (1) (1) Amortization of prior service credit (1) (1) (1) — — — Amortization of actuarial losses (gains) 2 — — — (33) (3) Settlement and curtailment losses (gains) 6 — — (2) — — Net periodic benefit cost (income) $ 12 $ — $ — $ 4 $ (27) $ 4 The components of net periodic benefit cost (income) other than the service cost are included in other expense, net in the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2021 2023 2022 2021 Other changes in plan assets and benefits obligations recognized in other comprehensive (income) loss Actuarial losses (gains) $ 14 $ (66) $ (20) $ 9 $ (45) $ (18) Prior service costs arising during the year — — — — 2 — Excess return on plan assets (1) — 79 (9) — 6 — Actuarial (losses) gains recognized during the year (8) — — — 33 3 Other 1 — 1 (1) — (1) Total recognized in other comprehensive (income) loss 7 13 (28) 8 (4) (16) Total recognized in net periodic benefit cost (income) and other comprehensive (income) loss $ 19 $ 13 $ (28) $ 12 $ (31) $ (12) (1) Represents actual return on plan assets in excess of the expected return. Significant actuarial assumptions used in determining the benefit obligations and net periodic benefit cost (income) for benefit plans are presented in the following table as weighted averages. U.S. Plans Non-U.S. Plans 2023 2022 2021 2023 2022 2021 Actuarial assumptions used to determine benefit obligations as of December 31: Discount rate 5.2 % 3.1 % 3.0 % 3.4 % 1.2 % 1.2 % Interest crediting rate 6.0 % 6.0 % 6.0 % 2.5 % 1.5 % 1.5 % Expected annual rate of compensation increase 3.5 % 3.2 % 3.2 % 2.6 % 2.4 % 2.4 % Actuarial assumptions used to determine net periodic benefit cost (income) for the year ended December 31: Discount rate - benefit obligation 5.0 % 5.2 % 2.7 % 3.0 % 3.4 % 0.7 % Interest crediting rate 6.0 % 6.0 % 6.0 % 2.2 % 2.5 % 1.5 % Expected rate of return on plan assets 5.3 % 5.3 % 4.7 % 3.4 % 1.3 % 2.3 % Expected annual rate of compensation increase 3.5 % 3.5 % 3.5 % 2.7 % 2.6 % 2.4 % The discount rate for the U.S. pension plans 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 plans, we use 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. We use 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 5.3% 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. We review 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. The following amounts relate to pension plans with accumulated benefit obligations exceeding the fair value of plan assets at December 31, 2023 and 2022. U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2023 2022 Projected benefit obligation $ 234 $ 281 $ 106 $ 96 Accumulated benefit obligation $ 230 $ 278 $ 96 $ 86 Fair value of plan assets $ 197 $ 262 $ 25 $ 27 The following amounts relate to pension plans with projected benefit obligations exceeding the fair value of the plan assets at December 31, 2023 and 2022. U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2023 2022 Projected benefit obligation $ 234 $ 281 $ 108 $ 96 Accumulated benefit obligation $ 230 $ 278 $ 98 $ 87 Fair value of plan assets $ 197 $ 262 $ 26 $ 27 We utilized a third-party investment management firm to serve as our Outsourced Chief Investment Officer; however, we have appointed an internal investment committee that monitors adherence to the investment guidelines the firm will follow. We employ 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. A majority of the U.S. pension plan assets as of December 31, 2023 do not have published pricing and are valued using Net Asset Value (“NAV”), which approximates fair value. NAV and fair value by asset category are as follows for December 31, 2023 and 2022: U.S. Plans NAV (in millions) 2023 2022 Cash and cash equivalents $ 3 $ 6 Equity 64 45 Government bonds 14 21 Corporate bonds 58 132 Real estate / property 24 29 Other 34 29 Total assets at fair value $ 197 $ 262 The fair values of the non-U.S. pension plan assets by asset category are as follows for December 31, 2023 and 2022: Non-U.S. Plans 2023 2022 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Equity $ 7 $ 7 $ — $ — $ 1 $ 1 $ — $ — Government bonds 6 — 6 — 1 — 1 — Insurance contracts 7 — — 7 6 — — 6 Other 6 — — 6 19 — — 19 Total assets at fair value $ 26 $ 7 $ 6 $ 13 $ 27 $ 1 $ 1 $ 25 Refer to Note 13. Fair Value to Consolidated Financial Statements. The following table summarizes changes in the fair value of Level 3 assets for Non-U.S. plans: (in millions) Non-U.S. Plans Balance at January 1, 2021 $ 26 Return on plan assets 1 Purchases, sales and settlements, net 4 Other (1) Balance at December 31, 2021 30 Return on plan assets (3) Other (2) Balance at December 31, 2022 25 Return on plan assets 1 Purchases, sales and settlements, net (14) Other 1 Balance at December 31, 2023 $ 13 Government bonds and Corporate bonds held as of December 31, 2023 and 2022 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. Real estate, insurance contracts, and other investments as of December 31, 2023 and 2022 and are classified as Level 3 as there are neither quoted prices nor other observable inputs for pricing. Insurance contracts are issued by insurance companies and are valued at cash surrender value, which approximates the contract fair value. Other investments consist of a collective pension foundation that is valued and allocated by the plan administrator. We utilize the services of retirement and investment consultants to actively manage the assets of our pension plans. We have established asset allocation targets and investment guidelines based on the guidance of the consultants. Our target allocations are 37% fixed income investments, 33% global equity investments, 12% global real estate investments and 18% cash and other investments. Our general funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards. In 2023, we were not required to make contributions to the U.S. pension plans, however we made immaterial contributions. There is not a requirement to make any contributions to the U.S. pension plans in 2024. In 2023, contributions of $3 million were made to the non-U.S. pension plans to satisfy regulatory funding requirements. In 2024, we expect to make contributions of cash and/or marketable securities of approximately $3 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 our assets. Benefit payments, including amounts to be paid from our assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: (in millions) U.S. Plans Non-U.S. Plans 2024 $ 19 $ 3 2025 $ 19 $ 3 2026 $ 19 $ 3 2027 $ 19 $ 3 2028 $ 19 $ 4 2029-2033 $ 86 $ 26 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation Plans | Stock-Based Compensation Plans The Stock Incentive Plan, which consists of the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates and the 2018 Stock Incentive Plan for Non-Employee Directors of Resideo Technologies, Inc., provides for the grant of stock options, stock appreciation rights, restricted stock units, restricted stock and other stock-based awards. During the second quarter of 2023, the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates was further amended to increase the number of shares of our common stock available for issuance by 3.5 million shares for an aggregate of 19.5 million shares with no more than 7.5 million shares being available for grant in the form of stock options. At December 31, 2023, 12 million shares of our common stock are available to be granted under the Stock Incentive Plan. Summary of Stock-Based Compensation Expense Our stock-based compensation expense, net of tax was $43 million, $48 million and $36 million for the years ended December 31, 2023, 2022 and 2021. Restricted Stock Unit Activity Restricted stock units (“RSUs”) are issued to certain key employees and to non-employee directors. These awards entitle the holder to receive one share of our common stock for each unit upon vesting. RSUs typically become fully vested over a three-year period following the grant date. RSU awards issued to our non-employee directors have a one-year service period. We measure stock-based compensation expense at the grant date based on the estimated fair value of the award. Performance stock units (“PSUs”) are issued to certain key employees. These awards entitle the holder to receive a specified number of our common stock, dependent on our financial metrics or market conditions, for each unit upon vesting. PSUs typically become vested at the end of a three-year period and are payable in our common stock. PSUs granted in 2023 were issued with the shares awarded per unit being based on the difference in performance between the total stockholders’ return of our common stock against that of the S&P 600 Industrials Index. PSUs granted prior to 2023 were issued with the shares awarded per unit being based on the difference in performance between the total stockholders’ return of our common stock against that of the S&P 400 Industrials Index. The fair values estimated from the Monte Carlo simulation for PSUs issued during the years ended December 31, 2023, 2022 and 2021 were calculated using the following assumptions: Years Ended December 31, 2023 2022 2021 Expected volatility 63.37 % 59.01 % 47.43 % Risk-free interest rate % 4.24 % 1.58 % 0.20 % Expected term (in years) 2.88 2.89 2.86 Dividend yield (1) — % — % — % (1) We have never declared or paid any cash dividends on our common stock and we currently do not intend to pay cash dividends. The following table summarizes activity related to the Stock Incentive Plan for employees and non-employee directors: PSUs RSUs (in whole dollars) Number of Weighted Number of Weighted Non-vested as of January 1, 2023 1,722,380 $ 27.23 3,410,962 $ 20.57 Granted 553,071 29.89 2,298,936 18.79 Vested (611,631) 27.03 (1,615,111) 18.35 Forfeited (69,954) 38.47 (238,291) 21.88 Non-vested as of December 31, 2023 1,593,866 $ 35.80 3,856,496 $ 20.16 As of December 31, 2023, unrecognized compensation cost related to unvested awards granted to employees and non-employee directors under the Stock Incentive Plan is as follows: (in millions) Unrecognized Compensation Cost Weighted-Average Period RSUs $ 48 1 year, 9 months PSUs 20 1 year, 2 months Total unrecognized compensation cost $ 68 The fair value of shares vested follows: Years Ended December 31, (in millions) 2023 2022 2021 RSUs $ 29 $ 36 $ 48 PSUs 14 $ 4 NA Total $ 43 $ 40 $ 48 Stock Option Activity Stock option awards entitle the holder to purchase shares of our common stock at a specific price when the options vest. Stock options typically vest over 3 years from the date of grant and expire 7 years from the grant date. There were no stock options granted to employees during the years ended December 31, 2023 and 2022. The fair value of stock options granted during the year ended December 31, 2021 was calculated using the following assumptions in the Black-Scholes model: Year Ended December 31, 2021 Expected stock price volatility 34% Expected term of options 5 years Expected dividend yield (1) —% Risk-free interest rate 0.77% (1) We have never declared or paid any cash dividends on our common stock and we currently do not intend to pay cash dividends. The aggregate intrinsic value disclosed below represents the total intrinsic value (the difference between the fair market value of our common stock as of December 31, 2023 and the exercise price, multiplied by the number of in-the-money service-based common stock options) that would have been received by the option holders had all option holders exercised their options on December 31, 2023. This amount is subject to change based on changes to the fair market value of our common stock. The following table summarizes stock option activity related to the Stock Incentive Plan: Stock Options (in whole dollars) Number of Weighted Weighted Aggregate Stock Options outstanding as of January 1, 2023 1,317,649 $ 15.25 4.0 years $ 6 Granted — — Forfeited — — Expired (96,692) 24.35 Exercised — — — Stock Options outstanding as of December 31, 2023 1,220,957 $ 14.52 3.2 years $ 8 Vested and expected to vest at December 31, 2023 1,220,957 $ 14.52 3.2 years $ 8 Exercisable at December 31, 2023 1,070,957 $ 12.99 2.9 years $ 8 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net Our goodwill balance and changes in carrying value by segment follows: (in millions) Products and Solutions ADI Global Distribution Total Balance at January 1, 2022 $ 2,010 $ 651 $ 2,661 Acquisitions 94 15 109 Divestiture — (4) (4) Impact of foreign currency translation (32) (10) (42) Balance at December 31, 2022 2,072 652 2,724 Acquisitions 7 3 10 Divestitures (46) — (46) Adjustments (5) — (5) Impact of foreign currency translation 17 5 22 Balance at December 31, 2023 $ 2,045 $ 660 $ 2,705 The following table summarizes the net carrying amount of intangible assets: December 31, (in millions) 2023 2022 Intangible assets subject to amortization $ 281 $ 295 Indefinite-lived intangible assets 180 180 Total intangible assets $ 461 $ 475 Intangible assets subject to amortization consisted of the following: December 31, 2023 (in millions) Gross Accumulated Net Useful Lives Weighted Average Amortization Patents and technology $ 64 $ (26) $ 38 7 - 10 years 10 years Customer relationships 319 (138) 181 7 - 15 years 14 years Trademarks 9 (8) 1 5 - 10 years 10 years Software 193 (132) 61 2 - 7 years 5 years Total intangible assets $ 585 $ (304) $ 281 December 31, 2022 (in millions) Gross Accumulated Net Useful Lives Weighted Average Amortization Patents and technology $ 65 $ (28) $ 37 3 - 10 years 10 years Customer relationships 313 (117) 196 7 - 15 years 14 years Trademarks 14 (8) 6 10 years 10 years Software 175 (119) 56 2 - 7 years 6 years Total intangible assets $ 567 $ (272) $ 295 Intangible assets are amortized on a straight-line basis or a basis consistent with the expected future cash flows over their expected useful lives. Intangible assets amortization expense was $38 million, $35 million and $30 million during the years ended December 31, 2023, 2022 and 2021, respectively. The estimated aggregate amortization on these intangible assets for each of the next five years as of December 31, 2023, follows: (in millions) Amortization Expense 2024 $ 38 2025 $ 40 2026 $ 35 2027 $ 29 2028 $ 26 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases We are party to operating leases for the majority of our manufacturing sites, offices, engineering and lab sites, stocking locations, warehouses, automobiles, and certain equipment. Certain real estate leases include variable rental payments, which adjust periodically based on inflation. Other variable amounts paid under operating leases, such as taxes and common area maintenance, are charged to selling, general and administrative expenses as incurred. Generally, lease agreements do not contain any material residual value guarantees or material restrictive covenants. Payments arising from operating lease activity, as well as variable and short-term lease payments not included within the operating lease liability, are included as operating activities of our Consolidated Statements of Cash Flows. Operating lease payments representing costs to ready an asset for its intended use (i.e., leasehold improvements) are represented within investing activities within our Consolidated Statements of Cash Flows. The operating lease expense follows: Years Ended December 31, (in millions) 2023 2022 2021 Operating lease cost: Selling, general and administrative expenses $ 57 $ 50 $ 46 Cost of goods sold 20 19 17 Total operating lease costs $ 77 $ 69 $ 63 Total operating lease costs include variable lease costs of $22 million, $19 million and $17 million for the years ended December 31, 2023, 2022, and 2021, respectively. The following table summarizes the carrying amounts of our operating leased assets and liabilities along with key inputs used to discount our lease liabilities: December 31, (in millions, except weighted-average data) Financial Statement Line Item 2023 2022 Operating lease assets Other assets $ 192 $ 191 Operating lease liabilities - current Accrued liabilities $ 39 $ 37 Operating lease liabilities - non-current Other liabilities $ 166 $ 166 Weighted-average remaining term 6.32 years 6.81 years Weighted-average incremental borrowing rate 6.12 % 5.78 % The following table summarizes our future minimum lease payments under our non-cancelable leases as of December 31, 2023: (in millions) Commitments 2024 $ 46 2025 44 2026 40 2027 34 2028 27 Thereafter 58 Total lease payments 249 Less: Imputed interest 44 Present value of operating lease liabilities $ 205 Supplemental cash flow information related to operating leases follows: Years Ended December 31, (in millions) 2023 2022 2021 Cash paid for operating lease liabilities $ 36 $ 33 $ 33 Non-cash activities: operating lease assets obtained in exchange for new operating lease liabilities (1) $ 39 $ 97 $ 46 (1) The year ended December 31, 2022 includes $25 million of operating lease assets acquired from the First Alert acquisition. As of December 31, 2023, we have additional operating leases that have not yet commenced. Obligations under these leases are not material. Additionally, as a lessor, we lease all or a portion of certain owned properties. Rental income for the years ended December 31, 2023, 2022 and 2021 was not material. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt is comprised of the following: December 31, (in millions) 2023 2022 4.000% senior notes due 2029 $ 300 $ 300 Variable rate A&R Term B Facility 1,119 1,131 Gross debt 1,419 1,431 Less: current portion of long-term debt (12) (12) Less: unamortized deferred financing costs (11) (15) Total long-term debt $ 1,396 $ 1,404 Aggregate required principal payments on long-term debt outstanding at December 31, 2023, follows: (in millions) Payments 2024 $ 12 2025 12 2026 12 2027 12 2028 1,073 Thereafter 300 Total $ 1,419 A&R Senior Credit Facilities On February 12, 2021, we entered into an A&R Credit Agreement with JP Morgan Chase Bank N.A. as administrative agent. This agreement effectively replaced our previous senior secured credit facilities. The A&R Credit Agreement provides for an (i) initial seven - year senior secured Term B loan facility in an aggregate principal amount of $950 million, which was further amended on March 28, 2022 to include an additional aggregate principal amount of $200 million in term loans (the “A&R Term B Facility”), (ii) a five - year senior secured revolving credit facility in an aggregate principal amount of $500 million (the “A&R Revolving Credit Facility” and, together with the A&R Term B Facility, the “A&R Senior Credit Facilities”). We are obligated to make quarterly principal payments throughout the term of the A&R Term B Facility according to the amortization provisions in the A&R Credit Agreement. In addition to paying interest on outstanding borrowings under the A&R Revolving Credit Facility, we are required to pay a quarterly commitment fee based on the unused portion of the A&R Revolving Credit Facility. Borrowings under the A&R Credit Agreement can be prepaid at our option without premium or penalty. Up to $75 million may be utilized under the A&R Revolving Credit Facility for the issuance of letters of credit to us or any of our subsidiaries. The A&R Senior Credit Facilities contain customary LIBOR replacement language, including, but not limited to, the use of rates based on SOFR, which is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase agreement market and is administered by the Federal Reserve Bank of New York. On June 30, 2023, we modified the calculation of interest under the A&R Senior Credit Facilities from being calculated based on LIBOR to being calculated based on SOFR. Therefore, the A&R Senior Credit Facilities bears interest at a rate per annum of Term SOFR plus a credit spread adjustment of 10 basis points for the A&R Revolving Credit Facility and varying credit spread adjustments for the A&R Term B Facility, based on the tenor of each individual borrowing. No other material terms of the A&R Senior Credit Facilities were amended. The A&R Credit Agreement contains certain financial maintenance covenants and affirmative and negative covenants customary for financings of this type. All obligations under the A&R Senior Credit Facilities are unconditionally guaranteed jointly and severally by us and substantially all of the direct and indirect wholly owned subsidiaries of ours that are organized under the laws of the U.S. (collectively, the “Guarantors”). The A&R Senior Credit Facilities are secured on a first priority basis by the equity interests of each direct subsidiary of ours, as well as the tangible and intangible personal property and material real property of ours and each of the Guarantors. At December 31, 2023 and 2022, the weighted average interest rate for the A&R Term B Facility, excluding the effect of the interest rate swaps, was 7.72% and 6.78%, respectively and there were no borrowings and no letters of credit issued under the A&R Revolving Credit Facility. As of December 31, 2023, we were in compliance with all covenants related to the A&R Credit Agreement and Senior Notes due 2029. We entered into certain interest rate swap agreements in March 2021, which were amended in June 2023, to transition from a hedge of LIBOR-based cash flows to a hedge of SOFR-based cash flows. These interest rate swap agreements effectively convert a portion of our variable-rate debt to fixed rate debt. Refer to Note 12. Derivative Financial Instruments to Consolidated Financial Statements. Senior Notes due 2029 On August 26, 2021, we issued $300 million in principal amount of 4.00% Senior Notes due 2029. The Senior Notes due 2029 are senior unsecured obligations of Resideo guaranteed by Resideo’s existing and future domestic subsidiaries and rank equally with all of Resideo’s senior unsecured debt and senior to all of Resideo’s subordinated debt. We may, at our option, redeem the Senior Notes due 2029 in whole (at any time) or in part (from time to time), at varying prices based on the timing of the redemption. The Senior Notes due 2029 limit us and our restricted subsidiaries’ ability to, among other things, incur additional secured indebtedness and issue preferred stocks; enter into certain sale and leaseback transactions; incur liens; and consolidate, merge or sell all or substantially all of their assets. These covenants are subject to a number of limitations and exceptions. Additionally, upon certain events constituting a change of control together with a ratings downgrade, the holders of the Senior Notes due 2029 have the right to require us to offer to repurchase the Senior Notes due 2029 at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, to (but not including) the date of purchase. Senior Notes Redemptions As a result of the redemption of the 6.125% senior unsecured notes (the “Senior Notes due 2026”) and the execution of the A&R Credit Agreement, debt extinguishment costs of $41 million were incurred and recorded in other expense, net for the year ended December 31, 2021. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments In March 2021, we entered into eight interest rate swap agreements (“Swap Agreements”) with several financial institutions for a combined notional value of $560 million. The Swap Agreements were entered into to reduce the consolidated interest rate risk associated with variable rate, long-term debt. In March and April 2023, we modified two of the eight Swap Agreements, each with a notional value of $70 million that matures in May 2024 as follows: (i) the original interest rate swap agreements were cancelled for no termination payment and (ii) we simultaneously entered into new pay-fixed interest rate swap agreements with a notional amount of $70 million each, effectively blending the asset positions of the original interest rate swap agreements into new interest swap agreements and extending the term of our hedged positions to February 2027. In connection with these transactions, no cash was exchanged between us and the counterparty. The new pay-fixed interest rate swap agreements qualify as a hybrid instrument in accordance with Accounting Standards Codification 815, Derivatives and Hedging , consisting of financing components and embedded at-market derivatives that were designated as cash flow hedges. The amounts remaining in accumulated other comprehensive loss for the modified interest rate swap agreements as of December 31, 2023 were approximately $2 million in aggregate and are being amortized as a reduction to interest expense over the effective period of the original interest rate swap agreements, or May 2024. The financing components are accounted for at amortized cost over the life of the swap while the embedded at-market derivatives are accounted for at fair value. On June 23, 2023, we amended the Swap Agreements to transition from a hedge of LIBOR-based cash flows to a hedge of SOFR-based cash flows. Under the amended Swap Agreements, we convert a portion of our variable interest rate obligations based on Term SOFR with a minimum rate of 0.39% per annum to a base fixed weighted average rate of 1.13% over the remaining terms. We designated the Swap Agreements as cash flow hedges of the variability in expected cash outflows for interest payments. The Swap Agreements are adjusted to fair value on a quarterly basis. The fair value of each swap is presented within the Consolidated Balance Sheets, and we recognize any changes in the fair value as an adjustment of accumulated other comprehensive loss within equity to the extent the swap is effective. As interest expense is accrued on the debt obligation, amounts in accumulated other comprehensive loss related to the Swap Agreements are reclassified into income resulting in a net interest expense on the hedged amount of the underlying debt obligation equal to the effective yield of the fixed rate of the swap. The following table summarizes the fair value and presentation of derivative instruments in the Consolidated Balance Sheets as well as the pre-tax gain (loss) recorded in accumulated other comprehensive loss: Fair Value of Derivative Assets December 31, (in millions) Financial Statement Line Item 2023 2022 Derivatives designated as hedging instruments Interest rate swaps Other current assets $ 20 $ 23 Interest rate swaps Other assets 10 22 Total derivative assets designated as hedging instruments $ 30 $ 45 Unrealized gain Accumulated other comprehensive loss $ 25 $ 42 Unrealized gains expected to be reclassified from accumulated other comprehensive loss in the next 12 months are estimated to be $22 million as of December 31, 2023. The following tables summarize the effect of derivative instruments designated as cash flow hedges in other comprehensive income (loss) and the Consolidated Statements of Operations: Years Ended December 31, (in millions) Financial Statement Line Item 2023 2022 Gains recorded in accumulated other comprehensive loss, beginning of year $ 42 $ 6 Current period gain (loss) recognized in/reclassified from other comprehensive income Interest expense, net 25 42 (Gains) losses reclassified from accumulated other comprehensive loss to net income Interest expense, net (42) (6) Gains recorded in accumulated other comprehensive loss, end of year $ 25 $ 42 |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value The estimated fair value of our financial instruments held, and when applicable, issued to finance our operations, is summarized below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that we would realize upon disposition nor do they indicate our intent or ability to dispose of the financial instrument. Assets and liabilities that are carried at fair value are required to be classified and disclosed in one of the following three categories: Level 1—quoted market prices in active markets for identical assets and liabilities Level 2—observable market-based inputs or unobservable inputs that are corroborated by market data Level 3—unobservable inputs that are not corroborated by market data Financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. There were no changes in the methodologies used in our valuation practices as of December 31, 2023 and 2022. The fair values of long-term debt instruments were determined using quoted market prices in inactive markets or discounted cash flows based upon current observable market interest rates and therefore were classified as Level 2 measurements in the fair value hierarchy. The following table provides a summary of the carrying amount and fair value of outstanding debt: December 31, 2023 December 31, 2022 (in millions) Carrying Value Fair Value Carrying Value Fair Value Debt 4.000% Senior Notes due 2029 $ 300 $ 266 $ 300 $ 242 Variable rate A&R Term B Facility 1,119 1,122 1,131 1,125 Total debt $ 1,419 $ 1,388 $ 1,431 $ 1,367 As of December 31, 2023 and 2022, there were no borrowings and no letters of credit issued under the A&R Revolving Credit Facility. Refer to Note 11. Long-Term Debt to Consolidated Financial Statements. Credit and Market Risk— Credit risk represents the loss that would be recognized at the reporting date if counterparties failed to perform as contracted. Market risk represents our exposure to changes associated with our international operations as we generate revenue and incur expenses in various currencies. We continually monitor the creditworthiness of our customers to which we grant 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. Management does not believe we are exposed to any significant concentrations of credit risk that arise from cash and cash equivalent investments, derivatives or accounts receivable. Foreign Currency Risk Management— We conduct business on a multinational basis in a wide variety of foreign currencies. We are 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. We rely on natural offsets to address the exposures. As of December 31, 2023 and 2022, we had no forward or option hedging contracts. Interest Rate Risk— We have exposure to movements in interest rates associated with cash and borrowings. We may enter into various interest rate protection agreements in order to limit the impact of movements in interest rates. The following table provides a summary of the carrying amount and fair value of our interest rate swaps: December 31, 2023 December 31, 2022 (in millions) Carrying Value Significant other Carrying Value Significant other Assets: Interest rate swaps $ 30 $ 30 $ 45 $ 45 There are no Level 1 or Level 3 assets or liabilities for the periods presented. The fair values of derivative financial instruments have been determined based on market value equivalents at the balance sheet date, taking into account the current interest rate environment and therefore were classified as Level 2 measurements in the fair value hierarchy. Refer to Note 12. Derivative Financial Instruments to Consolidated Financial Statements. The fair value calculated during the annual goodwill and indefinite-lived intangible asset impairment test uses the market approach in combination with the income approach for the reporting units and the relief from royalty method for the indefinite-lived intangible assets, respectively. The fair value is a Level 3 valuation based on certain unobservable inputs including estimated future cash flows and discount rates aligned with market-based assumptions, that would be utilized by market participants in valuing these assets or prices of similar assets. In addition, for long-lived assets, we performed an impairment test for certain location level assets. We utilize primarily the replacement cost method (a Level 3 valuation method) for the fair value of property, plant and equipment, and the income method to estimate the fair value of right-of-use assets, which incorporates Level 3 inputs such as internal business plans, real estate market capitalization and rental rates, and discount rates. Refer to Note 2. Summary of Significant Accounting Policies and Note 10. Leases to Consolidated Financial Statements. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following: December 31, (in millions) 2023 2022 Obligations payable under Indemnification Agreements $ 140 $ 140 Compensation, benefit and other employee-related 110 108 Customer rebate reserve 104 98 Restructuring 30 27 Product warranties 24 40 Current operating lease liability 39 37 Taxes payable 34 38 Other (1) 128 152 Total accrued liabilities $ 608 $ 640 (1) Other includes accruals for advertising, legal and professional reserves, freight, royalties, interest, and other miscellaneous items. The Indemnification Agreements are further described in Note 15. Commitments and Contingencies. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental Matters We are subject to various federal, state, local, and foreign government requirements relating to the protection of the environment and accrue costs related to environmental matters when it is probable that we have incurred a liability related to a contaminated site and the amount can be reasonably estimated. We believe that, as a general matter, our policies, practices and procedures are properly designed to prevent unreasonable risk of environmental damage and personal injury and that our handling, manufacture, use and disposal of hazardous substances are in accordance with environmental and safety laws and regulations. We have incurred remedial response and voluntary cleanup costs for site contamination and are a party to claims associated with environmental and safety matters, including products containing hazardous substances. Additional claims and costs involving environmental matters are likely to continue to arise in the future. Environment-related expenses for sites owned and operated by us are presented within cost of goods sold Obligations Payable Under Indemnification Agreements The Reimbursement Agreement and the Tax Matters Agreement (collectively, the “Indemnification Agreements”) are further described below. Reimbursement Agreement In connection with the Spin-Off, we entered into the Reimbursement Agreement, pursuant to which we have 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). While the amount payable by us in respect of such liabilities arising in any given year is subject to a cap of $140 million under the Reimbursement Agreement, the estimated liability for resolution of pending and future environmental-related liabilities recorded on our balance sheets are calculated as if we were responsible for 100% of the environmental-liability payments associated with certain sites. 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 us with a calculation of the amount of payments and the recoveries actually received. Payment amounts under the 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 A&R Credit Agreement, or the payment thereof causes us not to be compliant with certain financial covenants in certain indebtedness, including the A&R 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 Reimbursement Agreement), and the minimum interest coverage ratio. The obligations under the Reimbursement Agreement 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. In 2021 and 2020, several amendments were executed with respect to the Reimbursement Agreement. These amendments included modifications of certain covenants in Exhibit G to conform to the amended covenants included in the Credit Agreement First Amendment, deferment of certain payments under the Reimbursement Agreement to later in the year, and amendment of Exhibit G to, among other things, permit a sale and leaseback transaction. An aggregate amount of up to $150 million would be permitted thereunder so long as the same conditions that are applicable under the Credit Agreement are satisfied. On February 12, 2021, the covenants in Exhibit G of the Reimbursement Agreement were amended and restated in their entirety to substantially conform to the affirmative and negative covenants contained in the A&R Credit Agreement. Tax Matters Agreement In connection with the Spin-Off, we entered into the Tax Matters Agreement with Honeywell, pursuant to which we are responsible and will indemnify Honeywell for certain taxes, including certain income taxes, sales taxes, VAT and payroll taxes, relating to the business for all periods, including periods prior to the consummation of the Spin-Off. 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. We are required to indemnify Honeywell for any taxes 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 our action or omission not permitted by the Separation and Distribution Agreement between Honeywell and Resideo dated as of October 19, 2018 or the Tax Matters Agreement. The following table summarizes information concerning the Reimbursement and Tax Matter Agreements’ liabilities: (in millions) Reimbursement Agreement Tax Matters Agreement Total Beginning balance, January 1, 2022 $ 597 $ 128 $ 725 Accruals for liabilities deemed probable and reasonably estimable (1) 157 (2) 155 Payments to Honeywell (140) (20) (160) Balance as of December 31, 2022 614 106 720 Accruals for liabilities deemed probable and reasonably estimable (1) 178 (9) $ 169 Payments to Honeywell (140) — $ (140) Balance as of December 31, 2023 $ 652 $ 97 $ 749 (1) Reimbursement Agreement liabilities deemed probable and reasonably estimable, however, it is possible we could pay $140 million per year (exclusive of any late payment fees up to 5% per annum) until the earlier of (1) December 31, 2043; or (2) December 31 of the third consecutive year during which the annual reimbursement obligation (including in respect of deferred payment amounts) has been less than $25 million. The liabilities related to the Reimbursement and Tax Matter Agreements are included in the following balance sheet accounts: Years Ended December 31, (in millions) 2023 2022 Accrued liabilities $ 140 $ 140 Obligations payable under Indemnification Agreements 609 580 Total indemnification liabilities $ 749 $ 720 For the years ended December 31, 2023, 2022 and 2021, net expenses related to the Reimbursement Agreement were $178 million, $157 million, and $146 million respectively, and are recorded in other expense, net. We do not currently possess sufficient information to reasonably estimate the amounts of indemnification liabilities to be recorded upon future completion of studies, litigation or settlements, and neither the timing nor the amount of the ultimate costs associated with such indemnification liability payments can be determined although they could be material to our consolidated results of operations and operating cash flows in the periods recognized or paid. Independent of our payments under the Reimbursement Agreement, we will have ongoing liability for certain environmental claims, which are part of our ongoing business. Trademark Agreement We entered into a 40-year Trademark Agreement with Honeywell that authorizes our use of the Honeywell Home trademark in the operation of our business for the advertising, sale and distribution of certain licensed products. In exchange, we pay Honeywell a royalty fee of 1.5% based on net revenue related to such licensed products, which is recorded in selling, general and administrative expense in the Consolidated Statements of Operations. For the years ended December 31, 2023, 2022, and 2021, royalty fees were $18 million, $23 million, and $21 million, respectively. Other Matters We are subject to lawsuits, investigations and disputes arising out of the conduct of our business, including matters relating to commercial transactions, government contracts, product liability, acquisitions and divestitures, employee matters, intellectual property, and environmental, health, and safety matters. We recognize a liability for any contingency that is probable of occurrence and reasonably estimable. We continually assess the likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses, based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts. No such matters are material to our financial statements. Certain current or former directors and officers were defendants in a consolidated derivative action, In re Resideo Technologies, Inc. Derivative Litigation (the “Consolidated Federal Derivative Action”), which was stayed pending entry of final judgment in the related securities litigation and Delaware Chancery derivative action. An additional suit was filed in the Court of Chancery of the State of Delaware in 2021 and not consolidated with the Consolidated Federal Derivative Action. On November 17, 2022, the parties executed a Confidential Term Sheet summarizing the agreed terms of a global settlement to resolve all of the pending lawsuits and derivative claims. Under the terms of the settlement, we agreed to implement or codify certain corporate governance reforms and reimburse the plaintiffs’ attorneys’ fees of up to $1.6 million. The U.S. District Court for the District of Minnesota issued an order granting final approval of the settlement, judgment was entered on January 9, 2024 and the action was dismissed with prejudice. The parties filed a joint stipulation and proposed order of dismissal for the Delaware Chancery action, which the court approved. The settlement liability is included in the other accrued liabilities in the Consolidated Balance Sheets, the expected insurance recovery of approximately $0.6 million is included in accounts receivable, net. On September 16, 2022, Salvatore Badalamenti (“Plaintiff”) filed a putative class action lawsuit (the “Badalamenti Lawsuit”) in the U.S. District Court for the District of New Jersey against Honeywell International Inc. and the Company. Plaintiff alleges, among other things, that the Company violated certain consumer protection laws by falsely advertising the Company’s combination-listed single data-bus burglar and fire alarms system control units (the “Products”) as conforming to Underwriters Laboratories, Inc. (the “UL”) or the National Fire Protection Association (“NFPA”) standards and/or failing to disclose such nonconformance. Plaintiff further alleges that the Products are defective because they do not conform to the UL and NFPA industry standards. Plaintiff does not allege that he, or anyone else, has experienced any adverse event due to the alleged product defect or that the Products did not work. Plaintiff alleges causes of action for violation of the New Jersey Consumer Fraud Act, fraud, negligent misrepresentation, breach of express and implied warranties, violation of the Magnuson-Moss Warranty Act, unjust enrichment, and violation of the Truth-in-Consumer Contract, Warranty, and Notice Act. Plaintiff seeks to represent a putative class of other persons in the U.S. who purchased the Products. Plaintiff, on behalf of himself and the putative class, seeks damages in an unknown amount, which he describes as the cost to repair and/or replace the Products and/or the diminution in value of the Products. We believe we have strong defenses against the allegations and claims asserted in the Badalamenti Lawsuit and our motion to dismiss Plaintiff's complaint was fully briefed on March 3, 2023. We continue to defend the matter vigorously; however, there can be no assurance that we will be successful in such defense. In light of the early stage of the Badalamenti Lawsuit, we are unable to estimate the total costs to defend the matter or the potential liability to us in the event that we are not successful in our defense. On June 28, 2023, Lisset Tredo, a Company employee, filed a putative class action complaint in the San Diego County Superior Court on behalf of all non-exempt employees in California, in which she alleges violations by the Company of the California Labor Code related to sick leave pay, accurate wage statements, recordkeeping, and pay timing, and on August 28, 2023 she filed a first amended complaint adding a claim under the California Private Attorneys General Act (the “Tredo Lawsuit”). In the Tredo Lawsuit, Tredo seeks alleged unpaid wages, restitution, interest, statutory penalties, civil penalties, attorneys’ fees and costs in an unknown amount. The Company answered the Tredo Lawsuit in which it asserted a general denial of plaintiff’s allegations and asserted various defenses. We are investigating the allegations and defenses. At the request of plaintiff’s counsel, the parties have agreed to postpone mediation from January 2024 to May 2024, and to stay formal discovery pending the outcome of the mediation. If the case is not resolved at mediation, we intend to defend the matter vigorously; however, there can be no assurance that we will be successful in such defense. At this stage we are unable to estimate the total costs to defend the matter or the potential liability to us in the event that we are not successful in our defense. Warranties and Guarantees In the normal course of business, we issue product warranties and product performance guarantees. We accrue for the estimated cost of product warranties and product performance guarantees based on contract terms and historical experience at the time of sale. Adjustments to initial obligations for warranties and guarantees are made as changes to the obligations become reasonably estimable. Product warranties and product performance guarantees are included in other accrued liabilities. The following table summarizes information concerning recorded obligations for product warranties and product performance guarantees. December 31, (in millions) 2023 2022 2021 Beginning balance $ 48 $ 23 $ 22 Accruals for warranties/guarantees issued during the year 24 30 22 Adjustment of pre-existing warranties/guarantees — (2) (3) Settlement of warranty/guarantee claims (38) (17) (18) Reserve of acquired company at date of acquisition — 14 — Ending balance $ 34 $ 48 $ 23 Purchase Commitments Our unconditional purchase obligations include purchase commitments with suppliers and other obligations entered into during the normal course of business regarding the purchase of goods and services. For the years ended December 31, 2023, 2022, and 2021, purchases related to these obligations were $91 million, $41 million and $22 million, respectively. Aggregate payments on these obligations at December 31, 2023, follows: (in millions) Payments 2024 $ 142 2025 113 2026 85 2027 2 2028 and thereafter — Total $ 342 |
Other Expense, net
Other Expense, net | 12 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Other Expense, net | Other Expense, net Other expenses, net consists of the following: Years Ended December 31, (in millions) 2023 2022 2021 Reimbursement Agreement expense $ 178 $ 157 $ 146 Return on pension assets 9 (39) (9) Other, net (18) 21 22 Total other expenses, net $ 169 $ 139 $ 159 The Reimbursement Agreement is further described in Note 15. Commitments and Contingencies to the Consolidated Financial Statements . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense is based on pretax financial accounting income. Deferred income taxes are recognized for the temporary differences between the recorded amounts of assets and liabilities for financial reporting purposes and such amounts for income tax purposes. The following is a summary of the components of income before provision for income taxes: Years Ended December 31, (in millions) 2023 2022 2021 U.S. $ 76 $ 124 $ 79 Non-U.S. 237 294 274 Total $ 313 $ 418 $ 353 The components of the provision for income taxes consisted of the following: Years Ended December 31, (in millions) 2023 2022 2021 Current: U.S. $ 80 $ 95 $ 60 Non-U.S. 51 43 45 Total current $ 131 $ 138 $ 105 Deferred: U.S. $ (6) $ (13) $ 5 Non-U.S. (22) 10 1 Total deferred $ (28) $ (3) $ 6 Total provision $ 103 $ 135 $ 111 The reconciliation of income tax computed at the U.S. federal statutory tax rate to the effective income tax rate is as follows: Years Ended December 31, 2023 2022 2021 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % Impact of foreign operations (0.9) (1.6) (0.2) U.S. state income taxes 4.4 3.0 3.6 Non-deductible indemnification costs 10.9 7.7 8.4 Executive compensation over $1 million 1.6 1.0 0.9 Other non-deductible expenses 0.3 (0.6) 0.4 U.S. taxation of foreign earnings 2.8 1.0 1.4 Tax credits (0.8) (0.5) (0.7) Change in tax basis in foreign assets (1) (6.5) — — All other items, net (0.2) 1.3 (3.5) Effective income tax rate 32.7 % 32.3 % 31.3 % (1) The 2023 impact represents the initial recognition of a step-up in the tax basis of intangible assets recorded under Switzerland tax reform, net of valuation allowance. Deferred income taxes reflect the net impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. The tax effects of the temporary differences as of December 31, 2023 and 2022 are as follows: Years Ended December 31, (in millions) 2023 2022 Deferred tax assets: Pension $ 21 $ 16 Intangibles (2) 28 — Other asset basis differences 51 54 Operating lease liabilities 44 43 Employee compensation and benefits 23 17 Inventory costing and related reserves 11 15 Capitalized research and development 13 6 Other accruals and reserves 19 33 Net operating and capital losses 55 49 Other 11 1 Gross deferred tax assets 276 234 Valuation allowance (75) (63) Total deferred tax assets $ 201 $ 171 Deferred tax liabilities: Intangibles $ (42) $ (41) Property, plant and equipment (16) (24) Operating lease assets (41) (40) Other (6) (7) Total deferred tax liabilities $ (105) $ (112) Net deferred tax asset $ 96 $ 59 (2) A valuation allowance brings the net deferred tax effect of the allowed step-up of intangible assets recorded under Switzerland tax reform to the amount more likely than not to be realized. Valuation allowance In assessing the need for a valuation allowance, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We evaluate our ability to realize the tax benefits associated with deferred tax assets by analyzing the relative impact of all the available positive and negative evidence regarding our forecasted taxable income using both historical and projected future operating results, the reversal of existing taxable temporary differences, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. The ultimate realization of deferred tax assets is dependent upon the generation of certain types of future taxable income during the periods in which those temporary differences become deductible. In making this assessment, we consider the scheduled reversal of deferred tax liabilities, our ability to carry back the deferred tax asset, projected future taxable income, and tax planning strategies. A valuation allowance is recorded in each jurisdiction when it is more likely than not that the deferred income tax asset will not be realized. Changes in deferred tax asset valuation allowances typically impact income tax expense. We maintain a valuation allowance of $75 million against a portion of deferred tax assets. Valuation allowances principally relate to foreign net operating loss carryforwards. As of December 31, 2023, we have deferred tax assets relating to foreign net operating loss carryforwards of $52 million. These tax losses can be carried forward to offset the income tax liabilities on future income in these countries. Cumulative tax losses of $46 million can be carried forward indefinitely, while the remaining $9 million of tax losses must be used during tax years 2023 to 2043. The rollforward of the valuation allowance on deferred taxes is as follows for the periods indicated: Years Ended December 31, (in millions) 2023 2022 2021 Beginning balance $ 63 $ 63 $ 60 Additions / (Subtractions) 12 — 3 Ending balance $ 75 $ 63 $ 63 As of December 31, 2023, our total undistributed earnings of foreign affiliates were $2.0 billion, of which $625 million was not considered indefinitely reinvested. While these earnings would not be subject to incremental U.S. tax, if we were to actually distribute these earnings, they could be subject to additional foreign income taxes and/or withholding taxes payable in foreign jurisdictions. Thus, we provide for foreign income taxes payable upon future distributions of the earnings not considered indefinitely reinvested annually. For the year ended December 31, 2023, the tax charge related to earnings that are not considered indefinitely reinvested is not material. Determination of the unrecognized deferred foreign income tax liability related to these undistributed earnings is not practicable due to the complexities associated with this hypothetical calculation. Uncertain tax positions The table below sets forth the changes to our gross unrecognized tax benefit as a result of uncertain tax positions, excluding interest and penalties for the years ended December 31, 2023, 2022 and 2021. We do not anticipate that the total unrecognized tax benefits will change significantly within the next twelve months. Years Ended December 31, (in millions) 2023 2022 2021 Unrecognized tax benefits at beginning of year $ 22 $ 16 $ 10 Decreases related to positions taken on items from prior years (1) — — Increases related to positions taken in the current year 5 6 6 Decreases due to expiration of statutes of limitations (4) — — Unrecognized tax benefits at end of year $ 22 $ 22 16 Included in the balance of unrecognized tax benefits as of December 31, 2023 and December 31, 2022, are potential benefits of $22 million and $22 million, respectively, that if recognized would affect the effective tax rate. We report accrued interest and penalties related to unrecognized tax benefits in income tax expense. For the year ended December 31, 2023, we recognized no net expense for interest and penalties for unrecognized tax benefits and had net accumulated accrued interest and penalties of $2 million as of December 31, 2023. For the year ended December 31, 2022, we recognized a net expense for interest and penalties of $1 million relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $3 million as of December 31, 2022. Open tax periods We file income tax returns in the U.S. federal jurisdiction, all states, and various local and foreign jurisdictions. Our U.S. federal tax returns are no longer subject to income tax examinations for taxable years before 2020. With limited exception, state, local, and foreign income tax returns for taxable years before 2019 are no longer subject to examination. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per share follows: Years Ended December 31, (in millions) 2023 2022 2021 Numerator for basic and diluted earnings per share: Net income $ 210 $ 283 $ 242 Denominator for basic and diluted earnings per share: Weighted average basic number of common shares outstanding 147 146 144 Plus: dilutive effect of common stock equivalents 1 3 4 Weighted average diluted number of common shares outstanding 148 149 148 Earnings per share: Basic $ 1.43 $ 1.94 $ 1.68 Diluted $ 1.42 $ 1.90 $ 1.63 |
Geographic Areas - Financial Da
Geographic Areas - Financial Data | 12 Months Ended |
Dec. 31, 2023 | |
Segments, Geographical Areas [Abstract] | |
Geographic Areas - Financial Data | Geographic Areas - Financial Data Revenue and long-lived assets by geography are as follows: Net Revenue (1) Long-lived Assets (2) Years Ended December 31, December 31, (in millions) 2023 2022 2021 2023 2022 2021 U.S. $ 4,720 $ 4,795 $ 4,181 $ 332 $ 347 $ 244 Europe 1,065 1,111 1,196 143 131 139 Other International 457 464 469 107 79 46 Total $ 6,242 $ 6,370 $ 5,846 $ 582 $ 557 $ 429 (1) Net revenue between geographic areas approximate market and is not significant. Net revenue is classified according to their country of origin. Included in U.S. net revenue are export sales of $41 million, $38 million, and $26 million for the years ended December 31, 2023, 2022, and 2021, respectively. (2) Long-lived assets are comprised of property, plant and equipment, net and right-of-use lease assets. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity On August 3, 2023, we announced that our Board of Directors authorized a share repurchase program for the repurchase of up to $150 million of our common stock over an unlimited time period (the “Share Repurchase Program”). Under the Share Repurchase Program, we may repurchase common stock from time-to-time through various methods, including in open market transactions, block trades, accelerated share repurchases, privately negotiated transactions, derivative transactions or otherwise, certain of which may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in compliance with applicable state and federal securities laws. The Share Repurchase Program can be modified or terminated by our Board of Directors at any time. The timing, as well as the number and value of common stock repurchased under the Share Repurchase Program, will be determined at our discretion and will depend on a variety of factors, including our assessment of the intrinsic value and market price of our common stock, general market and economic conditions, available liquidity, compliance with our debt and other agreements, applicable legal requirements, the nature of other investment opportunities available to us and other considerations. During the twelve months ended December 31, 2023, we repurchased 2.6 million shares of common stock in the open market at a total cost of $41 million. As of December 31, 2023, the Company had approximately $109 million of authorized repurchases remaining under the Share Repurchase Program. Common stock repurchases are recorded at cost and presented as a deduction from stockholders’ equity. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events [OPEN, IF ANY] |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income | $ 210 | $ 283 | $ 242 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Consolidation and Reporting | Basis of Consolidation and Reporting The accompanying Consolidated Financial Statements include the accounts of the Company and our wholly-owned subsidiaries and have been prepared in accordance with U.S. GAAP. All intercompany accounts, transactions and profits arising from consolidated entities have been eliminated in consolidation. |
Reclassification | Reclassification |
Use of Estimates | Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities in the Consolidated Financial Statements and accompanying notes. Estimates are used for, but not limited to, provisions for expected credit losses and inventory reserves, accounting for business combinations and dispositions, valuation of reporting units for purposes of assessing goodwill for impairment, valuation of long-lived asset groups for impairment testing, accruals for employee benefits, stock-based compensation, pension benefits, indemnification liabilities, deferred taxes, warranties and certain contingencies. We base our estimates on historical experience, market participant fair value considerations, projected future cash flows, and various other factors that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash—Cash and cash equivalents may consist of cash on hand, money market instruments, time deposits and highly liquid investments. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents that are restricted as to the withdrawal or use under terms of certain contractual agreements are recorded in other current assets on the Consolidated Balance Sheets and primarily relate to collateral to support certain bank guarantees. Restricted cash for the periods presented were not material. Cash, cash equivalents and restricted cash are carried at cost, which approximates fair value. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts —Accounts receivable are recorded at the invoiced amount, presented net of allowance for doubtful accounts and do not bear interest. We review the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Allowance for doubtful accounts was not material as of December 31, 2023 and 2022, respectively. |
Inventories | Inventories—Inventories are stated at lower of cost or net realizable value and valued by the first-in-first-out method. Inventory reserves are maintained for obsolete and surplus items. |
Property, Plant and Equipment | Property, Plant and Equipment —Property, plant and equipment are stated at cost, less accumulated depreciation. For financial reporting purposes the straight-line method of depreciation is used over the estimated useful lives. Leasehold improvements are capitalized and amortized using the straight-line method over the shorter of their estimated useful lives or the term of the underlying lease. Depreciation is recognized in cost of sales, research and development, and selling, general and administrative expenses based on the nature and use of the underlying assets. The following table summarizes the details of our property, plant and equipment, including useful lives: December 31, (in millions) 2023 2022 Useful Lives Machinery and equipment $ 659 $ 647 3-16 years Buildings and improvements 314 303 10-50 years Construction in progress 85 80 NA Land 10 9 NA Gross property, plant and equipment 1,068 1,039 Accumulated depreciation (678) (673) Total property, plant and equipment, net $ 390 $ 366 |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets—We assess the recoverability of the carrying amount of property, plant and equipment if events or changes in circumstances indicate that the carrying amount or related group of assets may not be recoverable. If the expected undiscounted cash flows are less than the carrying amount of the asset an impairment loss is recognized. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets—We review the carrying values of goodwill and identifiable intangibles whenever events or changes in circumstances indicate that such carrying values may not be recoverable and annually, on the first day of the fourth quarter. If the carrying value of a reporting unit exceeds its fair value, we record a goodwill impairment loss as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. |
Restructuring | Restructuring —We enter into various restructuring initiatives, optimization projects, strategic transactions, and other business activities that may include the recognition of exit or disposal costs. Exit or disposal costs are typically costs of termination benefits, such as severance and costs associated with the closure or consolidation of operating facilities. |
Derivatives | Derivatives —Our interest rate swap agreements effectively modify our exposure to interest rate risk by converting floating rate debt to a fixed rate for the term of the swap agreements, reducing the impact of interest rate changes on future interest expense. These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount. Our interest rate swap agreements are designated as cash flow hedges with effectiveness of the hedges assessed at inception and quarterly thereafter. To the extent the hedging relationship is highly effective, the unrealized gains or losses on the swaps are recorded in accumulated other comprehensive loss and reclassified into earnings within interest expense, net when the payments occur. We classify our cash flows related to interest rate swap agreements as operating activities in the Consolidated Statements of Cash Flows. |
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. We periodically adjust these provisions to reflect actual experience and other facts and circumstances that impact the status of existing claims. |
Leases | Leases —Included in our Consolidated Balance Sheets are certain operating leases that are reported as a component of other assets and other liabilities. The leased assets represent our right to use an underlying asset for the lease term and the lease liabilities represent our obligation to make lease payments arising from the lease. An incremental borrowing rate is used to calculate the present value of the remaining lease payments. Each contract is reviewed at inception to determine if it contains a lease and whether the lease qualifies as an operating or financing lease. For short-term leases (leases with a term of 12 months or less), right-of-use assets or lease liabilities are not recognized in the Consolidated Balance Sheets. Operating leases are expensed on a straight-line basis over the term of the lease. In determining the lease term, we consider the probability of exercising renewal or early termination options. In addition to the monthly base rent, we are often charged separately for common area maintenance, utilities and taxes, which are considered a non-lease component. These non-lease component payments are expensed as incurred and are not included in operating lease assets or liabilities. |
Revenue Recognition | Revenue Recognition —We enter into contracts that pertain to products, which are accounted for as separate performance obligations and are typically one year or less in duration. 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. Revenue is measured as the amount of consideration expected to be received in exchange for our products. We recognize the majority of our revenue from performance obligations outlined in contracts with our customers that are satisfied at a point in time, generally when the product has shipped from our facility and control has transferred to the customer. For certain products, it is industry practice that customers take title to products upon delivery, at which time revenue is then recognized. Allowances for cash discounts, volume rebates and other customer incentive programs, as well as gross customer returns, among others, are recorded as a reduction of sales at the time of sale based upon the estimated future outcome. Cash discounts, volume rebates and other customer incentive programs are based upon certain percentages agreed upon with various customers, which are typically earned by the customer over an annual period. Revenue is adjusted for variable consideration, which includes customer volume rebates and prompt payment discounts. We measure variable consideration by estimating expected outcomes using analysis and inputs based upon anticipated performance, historical data, and current and forecasted information. Customer returns are recorded as a reduction to sales on an actual basis throughout the year and also include an estimate at the end of each reporting period for future customer returns related to sales recorded prior to the end of the period. We generally estimate customer returns based upon the time lag that historically occurs between the sale date and the return date, while also factoring in any new business conditions that might impact the historical analysis such as new product introduction. Measurement of variable consideration is reviewed by management periodically and revenue is adjusted accordingly. We do not have significant financing components. |
Royalty | Royalty—In connection with the Spin-Off, we entered into a 40-year Trademark License Agreement (the “Trademark Agreement”) with Honeywell that authorizes our use of certain licensed trademarks in the operation of Resideo’s business for the advertising, sale and distribution of certain licensed products. In exchange, we 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 Statements of Operations. |
Reimbursement Agreement | Reimbursement Agreement—In connection with the Spin-Off we entered into a Reimbursement Agreement, pursuant to which we have 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 Honeywell properties contaminated through historical business operations prior to the Spin-Off (Honeywell Sites), 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. Reimbursement Agreement expenses are presented within other expense, net in the Consolidated Statements of Operations and within obligations payable under Indemnification Agreements in the Consolidated Balance Sheets. |
Environmental | Environmental—We accrue costs related to environmental matters when it is probable that we have incurred a liability related to a contaminated site and the amount can be reasonably estimated. |
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 taken or omission made (other than actions expressly required or permitted by the Separation and Distribution Agreement, the Tax Matters Agreement or other ancillary agreements) after the consummation of the Spin-Off that gives rise to these taxes. As of December 31, 2023 and 2022, we had an indemnity outstanding to Honeywell for past and potential future tax payments of $97 million and $106 million, respectively. |
Research and Development | Research and Development —We conduct research and development activities, which consist primarily of the development of new products and solutions as well as enhancements and improvements to existing products that substantially change the product. Research and development costs primarily relate to employee compensation and consulting fees, which are charged to expense as incurred. |
Defined Contribution Plans | Defined Contribution Plans—We sponsor various defined contribution plans with varying terms depending on the country of employment. |
Stock-Based Compensation Plans | Stock-Based Compensation Plans —The principal awards issued under our stock-based compensation plans, which are described in Note 8. 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. Some awards are issued with a market condition, which are valued on the grant date utilizing a Monte Carlo simulation model. Stock options are also issued under our stock-based compensation plans and are valued on the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model and the Monte Carlo simulation model require estimates of future stock price volatility, expected term, risk-free interest rate and forfeitures. For all stock-based compensation, the fair value of the award 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 Statements of Operations. Our time-based restricted stock awards are typically subject to graded vesting over a service period; while our performance or market based awards are typically subject to cliff vesting at the end of the service period. |
Pension | Pension —We disaggregate the service cost component of net benefit costs and report those costs in the same line item or items in the Consolidated Statements 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. |
Foreign Currency Translation | Foreign Currency Translation —Assets and liabilities of operations outside the U.S. 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 loss. |
Income Taxes | Income Taxes—Significant judgment is required in evaluating tax positions. We established 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 our subsidiaries are examined by various federal, state and foreign tax authorities. We regularly assess the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of our provision for income taxes. We continually assess 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. |
Accounting Pronouncements | Accounting Pronouncements —We consider the applicability and impact of all recent accounting standards updates (“ASU”) 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 our Consolidated Financial Statements. Adopted Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and subsequent amendment to the initial guidance: ASU 2021-01, Reference Rate Reform (Topic 848): Scope (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 . ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. This guidance may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2024. We adopted these ASUs during the second quarter of 2023. The impact of the adoption of this standard on our financial statements and related disclosures, including accounting policies, processes, and systems, was not material. Refer to Note 11. Long-Term Debt and Note 12. Derivative Financial Instruments to Consolidated Financial Statements. Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires entities to disclose, on an annual and interim basis, significant segment expenses that are regularly reviewed by the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss. The ASU also requires disclosure of the name and title of the CODM. The guidance is effective for fiscal years beginning after December 15, 2023. We are currently assessing the impact of adoption on our Consolidated Financial Statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Inventories | The following tables summarize the details of our inventory, net: December 31, (in millions) 2023 2022 Raw materials $ 221 $ 251 Work in process 18 25 Finished products 702 699 Total inventories, net $ 941 $ 975 |
Schedule of Property, Plant and Equipment | The following table summarizes the details of our property, plant and equipment, including useful lives: December 31, (in millions) 2023 2022 Useful Lives Machinery and equipment $ 659 $ 647 3-16 years Buildings and improvements 314 303 10-50 years Construction in progress 85 80 NA Land 10 9 NA Gross property, plant and equipment 1,068 1,039 Accumulated depreciation (678) (673) Total property, plant and equipment, net $ 390 $ 366 |
Segment Financial Data (Tables)
Segment Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Years Ended December 31, (in millions) 2023 2022 2021 Net revenue Products and Solutions $ 2,672 $ 2,783 $ 2,468 ADI Global Distribution 3,570 3,587 3,378 Total net revenue $ 6,242 $ 6,370 $ 5,846 Years Ended December 31, (in millions) 2023 2022 2021 Income from operations Products and Solutions $ 495 $ 527 $ 541 ADI Global Distribution 270 313 268 Corporate (218) (229) (250) Total income from operations $ 547 $ 611 $ 559 Years Ended December 31, (in millions) 2023 2022 2021 Depreciation and amortization Products and Solutions $ 71 $ 69 $ 65 ADI Global Distribution 18 14 11 Corporate 9 11 12 Total depreciation and amortization $ 98 $ 94 $ 88 Years Ended December 31, (in millions) 2023 2022 2021 Capital expenditures Products and Solutions $ 77 $ 55 $ 37 ADI Global Distribution 26 29 24 Corporate 2 1 2 Total capital expenditures $ 105 $ 85 $ 63 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue By Business Line and Geographic Location | Years Ended December 31, (in millions) 2023 2022 2021 Products and Solutions Air $ 862 $ 953 $ 858 Safety and Security 965 913 667 Energy 525 595 594 Water 320 322 349 Total Products and Solutions 2,672 2,783 2,468 ADI Global Distribution U.S. and Canada 3,085 3,087 2,814 EMEA (1) 485 474 523 APAC (2) — 26 41 Total ADI Global Distribution 3,570 3,587 3,378 Total net revenue $ 6,242 $ 6,370 $ 5,846 (1) EMEA represents Europe, the Middle East and Africa. (2) APAC represents Asia and Pacific countries. |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Expenses | The following table represents restructuring and impairment expense attributable to the segments: Years Ended December 31, (in millions) 2023 2022 Products and Solutions $ 27 $ 29 ADI Global Distribution 12 2 Corporate 3 4 Restructuring and impairment expenses $ 42 $ 35 December 31, (in millions) 2023 2022 2021 Beginning of year $ 27 $ 9 $ 24 Charges 34 26 — Usage (1) (31) (5) (11) Other — (3) (4) End of year $ 30 $ 27 $ 9 |
Pension Plans (Tables)
Pension Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Summary of Balance Sheet Impact, Including Benefit Obligations, Assets and Funded Status | The following table summarizes the balance sheet impact, including the benefit obligations, assets and funded status associated with the pension plans: U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2021 2023 2022 2021 Change in benefit obligation: Benefit obligation at beginning of year $ 281 $ 348 $ 374 $ 96 $ 141 $ 161 Service cost 3 7 7 4 5 7 Interest cost 13 11 10 3 2 1 Actuarial losses (gains) 23 (66) (20) 8 (45) (18) Net benefits paid (3) (18) (5) 4 — — Settlements and curtailments (83) (1) (18) (13) — (1) Other — — — 1 1 1 Foreign currency translation — — — 5 (8) (10) Benefit obligation at end of year 234 281 348 108 96 141 Change in plan assets: Fair value of plan assets at beginning of year 262 342 340 27 32 28 Actual return on plan assets 20 (62) 25 1 (6) 2 Employer contributions — 1 — 2 3 3 Net benefits paid (3) (18) (5) 4 — 1 Settlements and curtailments (83) (1) (18) (11) — (1) Other 1 — — 1 (1) — Foreign currency translation — — — 2 (1) (1) Fair value of plan assets at end of year 197 262 342 26 27 32 Funded status of plans (non-current) $ (37) $ (19) $ (6) $ (82) $ (69) $ (109) |
Summary of Accumulated Other Comprehensive (Loss) Associated with Pension Plans | Amounts recognized in accumulated other comprehensive loss associated with pension plans at December 31, 2023 and 2022 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2023 2022 Prior service cost $ — $ — $ 2 $ 2 Net actuarial loss (gain) 20 13 — (8) Net amount recognized $ 20 $ 13 $ 2 $ (6) |
Summary of Net Periodic Benefit Cost and Other Amounts Recognized in Comprehensive Income | The components of net periodic benefit (income) cost for the years ended December 31, 2023, 2022 and 2021 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2021 2023 2022 2021 Net periodic benefit cost (income) Service cost $ 3 $ 7 $ 7 $ 4 $ 5 $ 7 Interest cost 13 11 10 3 2 1 Expected return on plan assets (11) (17) (16) (1) (1) (1) Amortization of prior service credit (1) (1) (1) — — — Amortization of actuarial losses (gains) 2 — — — (33) (3) Settlement and curtailment losses (gains) 6 — — (2) — — Net periodic benefit cost (income) $ 12 $ — $ — $ 4 $ (27) $ 4 |
Summary of Net Periodic Benefit (Income) Cost Other Than The Service Cost Included in Other Expense, Net | The components of net periodic benefit cost (income) other than the service cost are included in other expense, net in the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2021 2023 2022 2021 Other changes in plan assets and benefits obligations recognized in other comprehensive (income) loss Actuarial losses (gains) $ 14 $ (66) $ (20) $ 9 $ (45) $ (18) Prior service costs arising during the year — — — — 2 — Excess return on plan assets (1) — 79 (9) — 6 — Actuarial (losses) gains recognized during the year (8) — — — 33 3 Other 1 — 1 (1) — (1) Total recognized in other comprehensive (income) loss 7 13 (28) 8 (4) (16) Total recognized in net periodic benefit cost (income) and other comprehensive (income) loss $ 19 $ 13 $ (28) $ 12 $ (31) $ (12) (1) |
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 cost (income) for benefit plans are presented in the following table as weighted averages. U.S. Plans Non-U.S. Plans 2023 2022 2021 2023 2022 2021 Actuarial assumptions used to determine benefit obligations as of December 31: Discount rate 5.2 % 3.1 % 3.0 % 3.4 % 1.2 % 1.2 % Interest crediting rate 6.0 % 6.0 % 6.0 % 2.5 % 1.5 % 1.5 % Expected annual rate of compensation increase 3.5 % 3.2 % 3.2 % 2.6 % 2.4 % 2.4 % Actuarial assumptions used to determine net periodic benefit cost (income) for the year ended December 31: Discount rate - benefit obligation 5.0 % 5.2 % 2.7 % 3.0 % 3.4 % 0.7 % Interest crediting rate 6.0 % 6.0 % 6.0 % 2.2 % 2.5 % 1.5 % Expected rate of return on plan assets 5.3 % 5.3 % 4.7 % 3.4 % 1.3 % 2.3 % Expected annual rate of compensation increase 3.5 % 3.5 % 3.5 % 2.7 % 2.6 % 2.4 % |
Summary of Amounts Relate to Pension Plans with Accumulated Benefit Obligations Exceeding Fair Value of Plan Assets | The following amounts relate to pension plans with accumulated benefit obligations exceeding the fair value of plan assets at December 31, 2023 and 2022. U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2023 2022 Projected benefit obligation $ 234 $ 281 $ 106 $ 96 Accumulated benefit obligation $ 230 $ 278 $ 96 $ 86 Fair value of plan assets $ 197 $ 262 $ 25 $ 27 |
Summary of Amounts Relate to Pension Plans with Accumulated Benefit Obligations Exceeding Fair Value of Plan Assets | The following amounts relate to pension plans with projected benefit obligations exceeding the fair value of the plan assets at December 31, 2023 and 2022. U.S. Plans Non-U.S. Plans (in millions) 2023 2022 2023 2022 Projected benefit obligation $ 234 $ 281 $ 108 $ 96 Accumulated benefit obligation $ 230 $ 278 $ 98 $ 87 Fair value of plan assets $ 197 $ 262 $ 26 $ 27 |
Summary of NAV and Fair Values of Both U.S. and Non-U.S. Pension Plans Assets by Asset Category | A majority of the U.S. pension plan assets as of December 31, 2023 do not have published pricing and are valued using Net Asset Value (“NAV”), which approximates fair value. NAV and fair value by asset category are as follows for December 31, 2023 and 2022: U.S. Plans NAV (in millions) 2023 2022 Cash and cash equivalents $ 3 $ 6 Equity 64 45 Government bonds 14 21 Corporate bonds 58 132 Real estate / property 24 29 Other 34 29 Total assets at fair value $ 197 $ 262 The fair values of the non-U.S. pension plan assets by asset category are as follows for December 31, 2023 and 2022: Non-U.S. Plans 2023 2022 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Equity $ 7 $ 7 $ — $ — $ 1 $ 1 $ — $ — Government bonds 6 — 6 — 1 — 1 — Insurance contracts 7 — — 7 6 — — 6 Other 6 — — 6 19 — — 19 Total assets at fair value $ 26 $ 7 $ 6 $ 13 $ 27 $ 1 $ 1 $ 25 Refer to Note 13. Fair Value to Consolidated Financial Statements. |
Summary of Changes in Fair Value of Level 3 Assets for Non-U.S | The following table summarizes changes in the fair value of Level 3 assets for Non-U.S. plans: (in millions) Non-U.S. Plans Balance at January 1, 2021 $ 26 Return on plan assets 1 Purchases, sales and settlements, net 4 Other (1) Balance at December 31, 2021 30 Return on plan assets (3) Other (2) Balance at December 31, 2022 25 Return on plan assets 1 Purchases, sales and settlements, net (14) Other 1 Balance at December 31, 2023 $ 13 |
Summary of Benefit Payments | Benefit payments, including amounts to be paid from our assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: (in millions) U.S. Plans Non-U.S. Plans 2024 $ 19 $ 3 2025 $ 19 $ 3 2026 $ 19 $ 3 2027 $ 19 $ 3 2028 $ 19 $ 4 2029-2033 $ 86 $ 26 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Fair Values Estimated for PSUs | The fair values estimated from the Monte Carlo simulation for PSUs issued during the years ended December 31, 2023, 2022 and 2021 were calculated using the following assumptions: Years Ended December 31, 2023 2022 2021 Expected volatility 63.37 % 59.01 % 47.43 % Risk-free interest rate % 4.24 % 1.58 % 0.20 % Expected term (in years) 2.88 2.89 2.86 Dividend yield (1) — % — % — % (1) We have never declared or paid any cash dividends on our common stock and we currently do not intend to pay cash dividends. |
Schedule of Stock Incentive Plan For Employees and Non-Employee Directors | The following table summarizes activity related to the Stock Incentive Plan for employees and non-employee directors: PSUs RSUs (in whole dollars) Number of Weighted Number of Weighted Non-vested as of January 1, 2023 1,722,380 $ 27.23 3,410,962 $ 20.57 Granted 553,071 29.89 2,298,936 18.79 Vested (611,631) 27.03 (1,615,111) 18.35 Forfeited (69,954) 38.47 (238,291) 21.88 Non-vested as of December 31, 2023 1,593,866 $ 35.80 3,856,496 $ 20.16 |
Unrecognized Compensation Cost Related to Unvested Awards | As of December 31, 2023, unrecognized compensation cost related to unvested awards granted to employees and non-employee directors under the Stock Incentive Plan is as follows: (in millions) Unrecognized Compensation Cost Weighted-Average Period RSUs $ 48 1 year, 9 months PSUs 20 1 year, 2 months Total unrecognized compensation cost $ 68 |
Fair Value of Shares Vested | The fair value of shares vested follows: Years Ended December 31, (in millions) 2023 2022 2021 RSUs $ 29 $ 36 $ 48 PSUs 14 $ 4 NA Total $ 43 $ 40 $ 48 |
Fair Value of Stock Options in Black-Scholes Model | The fair value of stock options granted during the year ended December 31, 2021 was calculated using the following assumptions in the Black-Scholes model: Year Ended December 31, 2021 Expected stock price volatility 34% Expected term of options 5 years Expected dividend yield (1) —% Risk-free interest rate 0.77% (1) We have never declared or paid any cash dividends on our common stock and we currently do not intend to pay cash dividends. |
Summary of Stock Option Activity Related to the Stock Incentive Plan | The following table summarizes stock option activity related to the Stock Incentive Plan: Stock Options (in whole dollars) Number of Weighted Weighted Aggregate Stock Options outstanding as of January 1, 2023 1,317,649 $ 15.25 4.0 years $ 6 Granted — — Forfeited — — Expired (96,692) 24.35 Exercised — — — Stock Options outstanding as of December 31, 2023 1,220,957 $ 14.52 3.2 years $ 8 Vested and expected to vest at December 31, 2023 1,220,957 $ 14.52 3.2 years $ 8 Exercisable at December 31, 2023 1,070,957 $ 12.99 2.9 years $ 8 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Our goodwill balance and changes in carrying value by segment follows: (in millions) Products and Solutions ADI Global Distribution Total Balance at January 1, 2022 $ 2,010 $ 651 $ 2,661 Acquisitions 94 15 109 Divestiture — (4) (4) Impact of foreign currency translation (32) (10) (42) Balance at December 31, 2022 2,072 652 2,724 Acquisitions 7 3 10 Divestitures (46) — (46) Adjustments (5) — (5) Impact of foreign currency translation 17 5 22 Balance at December 31, 2023 $ 2,045 $ 660 $ 2,705 |
Schedule of Indefinite-Lived Intangible Assets | December 31, (in millions) 2023 2022 Intangible assets subject to amortization $ 281 $ 295 Indefinite-lived intangible assets 180 180 Total intangible assets $ 461 $ 475 |
Schedule of Intangible Assets With Finite Lives | December 31, (in millions) 2023 2022 Intangible assets subject to amortization $ 281 $ 295 Indefinite-lived intangible assets 180 180 Total intangible assets $ 461 $ 475 December 31, 2023 (in millions) Gross Accumulated Net Useful Lives Weighted Average Amortization Patents and technology $ 64 $ (26) $ 38 7 - 10 years 10 years Customer relationships 319 (138) 181 7 - 15 years 14 years Trademarks 9 (8) 1 5 - 10 years 10 years Software 193 (132) 61 2 - 7 years 5 years Total intangible assets $ 585 $ (304) $ 281 December 31, 2022 (in millions) Gross Accumulated Net Useful Lives Weighted Average Amortization Patents and technology $ 65 $ (28) $ 37 3 - 10 years 10 years Customer relationships 313 (117) 196 7 - 15 years 14 years Trademarks 14 (8) 6 10 years 10 years Software 175 (119) 56 2 - 7 years 6 years Total intangible assets $ 567 $ (272) $ 295 |
Estimated Aggregate Amortization On Intangible Assets | The estimated aggregate amortization on these intangible assets for each of the next five years as of December 31, 2023, follows: (in millions) Amortization Expense 2024 $ 38 2025 $ 40 2026 $ 35 2027 $ 29 2028 $ 26 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Expense | The operating lease expense follows: Years Ended December 31, (in millions) 2023 2022 2021 Operating lease cost: Selling, general and administrative expenses $ 57 $ 50 $ 46 Cost of goods sold 20 19 17 Total operating lease costs $ 77 $ 69 $ 63 |
Schedule of Carrying Amounts of Operating Leased Assets and Liabilities | The following table summarizes the carrying amounts of our operating leased assets and liabilities along with key inputs used to discount our lease liabilities: December 31, (in millions, except weighted-average data) Financial Statement Line Item 2023 2022 Operating lease assets Other assets $ 192 $ 191 Operating lease liabilities - current Accrued liabilities $ 39 $ 37 Operating lease liabilities - non-current Other liabilities $ 166 $ 166 Weighted-average remaining term 6.32 years 6.81 years Weighted-average incremental borrowing rate 6.12 % 5.78 % |
Maturities of Operating Lease Liabilities | The following table summarizes our future minimum lease payments under our non-cancelable leases as of December 31, 2023: (in millions) Commitments 2024 $ 46 2025 44 2026 40 2027 34 2028 27 Thereafter 58 Total lease payments 249 Less: Imputed interest 44 Present value of operating lease liabilities $ 205 |
Schedule of Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases follows: Years Ended December 31, (in millions) 2023 2022 2021 Cash paid for operating lease liabilities $ 36 $ 33 $ 33 Non-cash activities: operating lease assets obtained in exchange for new operating lease liabilities (1) $ 39 $ 97 $ 46 (1) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt is comprised of the following: December 31, (in millions) 2023 2022 4.000% senior notes due 2029 $ 300 $ 300 Variable rate A&R Term B Facility 1,119 1,131 Gross debt 1,419 1,431 Less: current portion of long-term debt (12) (12) Less: unamortized deferred financing costs (11) (15) Total long-term debt $ 1,396 $ 1,404 |
Aggregate Required Principal Payments on Long-Term Debt Outstanding | Aggregate required principal payments on long-term debt outstanding at December 31, 2023, follows: (in millions) Payments 2024 $ 12 2025 12 2026 12 2027 12 2028 1,073 Thereafter 300 Total $ 1,419 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Consolidated Balance Sheets and Pre-Tax Gain (Loss) in Accumulated Other Comprehensive Loss | The following table summarizes the fair value and presentation of derivative instruments in the Consolidated Balance Sheets as well as the pre-tax gain (loss) recorded in accumulated other comprehensive loss: Fair Value of Derivative Assets December 31, (in millions) Financial Statement Line Item 2023 2022 Derivatives designated as hedging instruments Interest rate swaps Other current assets $ 20 $ 23 Interest rate swaps Other assets 10 22 Total derivative assets designated as hedging instruments $ 30 $ 45 Unrealized gain Accumulated other comprehensive loss $ 25 $ 42 |
Schedule of Effect of Derivative Instruments Designated as Cash Flow Hedges | The following tables summarize the effect of derivative instruments designated as cash flow hedges in other comprehensive income (loss) and the Consolidated Statements of Operations: Years Ended December 31, (in millions) Financial Statement Line Item 2023 2022 Gains recorded in accumulated other comprehensive loss, beginning of year $ 42 $ 6 Current period gain (loss) recognized in/reclassified from other comprehensive income Interest expense, net 25 42 (Gains) losses reclassified from accumulated other comprehensive loss to net income Interest expense, net (42) (6) Gains recorded in accumulated other comprehensive loss, end of year $ 25 $ 42 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table provides a summary of the carrying amount and fair value of outstanding debt: December 31, 2023 December 31, 2022 (in millions) Carrying Value Fair Value Carrying Value Fair Value Debt 4.000% Senior Notes due 2029 $ 300 $ 266 $ 300 $ 242 Variable rate A&R Term B Facility 1,119 1,122 1,131 1,125 Total debt $ 1,419 $ 1,388 $ 1,431 $ 1,367 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides a summary of the carrying amount and fair value of our interest rate swaps: December 31, 2023 December 31, 2022 (in millions) Carrying Value Significant other Carrying Value Significant other Assets: Interest rate swaps $ 30 $ 30 $ 45 $ 45 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | ccrued liabilities consist of the following: December 31, (in millions) 2023 2022 Obligations payable under Indemnification Agreements $ 140 $ 140 Compensation, benefit and other employee-related 110 108 Customer rebate reserve 104 98 Restructuring 30 27 Product warranties 24 40 Current operating lease liability 39 37 Taxes payable 34 38 Other (1) 128 152 Total accrued liabilities $ 608 $ 640 (1) Other includes accruals for advertising, legal and professional reserves, freight, royalties, interest, and other miscellaneous items. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Reimbursement Agreement Liabilities | The following table summarizes information concerning the Reimbursement and Tax Matter Agreements’ liabilities: (in millions) Reimbursement Agreement Tax Matters Agreement Total Beginning balance, January 1, 2022 $ 597 $ 128 $ 725 Accruals for liabilities deemed probable and reasonably estimable (1) 157 (2) 155 Payments to Honeywell (140) (20) (160) Balance as of December 31, 2022 614 106 720 Accruals for liabilities deemed probable and reasonably estimable (1) 178 (9) $ 169 Payments to Honeywell (140) — $ (140) Balance as of December 31, 2023 $ 652 $ 97 $ 749 (1) Reimbursement Agreement liabilities deemed probable and reasonably estimable, however, it is possible we could pay $140 million per year (exclusive of any late payment fees up to 5% per annum) until the earlier of (1) December 31, 2043; or (2) December 31 of the third consecutive year during which the annual reimbursement obligation (including in respect of deferred payment amounts) has been less than $25 million. |
Schedule of Reimbursement Agreement Liabilities Included in Balance Sheet Accounts | The liabilities related to the Reimbursement and Tax Matter Agreements are included in the following balance sheet accounts: Years Ended December 31, (in millions) 2023 2022 Accrued liabilities $ 140 $ 140 Obligations payable under Indemnification Agreements 609 580 Total indemnification liabilities $ 749 $ 720 |
Schedule of Recorded Obligations for Product Warranties and Product Performance Guarantee | December 31, (in millions) 2023 2022 2021 Beginning balance $ 48 $ 23 $ 22 Accruals for warranties/guarantees issued during the year 24 30 22 Adjustment of pre-existing warranties/guarantees — (2) (3) Settlement of warranty/guarantee claims (38) (17) (18) Reserve of acquired company at date of acquisition — 14 — Ending balance $ 34 $ 48 $ 23 |
Long-Term Purchase Commitment | Aggregate payments on these obligations at December 31, 2023, follows: (in millions) Payments 2024 $ 142 2025 113 2026 85 2027 2 2028 and thereafter — Total $ 342 |
Other Expense, net (Tables)
Other Expense, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Summary of Other Expenses, net | Other expenses, net consists of the following: Years Ended December 31, (in millions) 2023 2022 2021 Reimbursement Agreement expense $ 178 $ 157 $ 146 Return on pension assets 9 (39) (9) Other, net (18) 21 22 Total other expenses, net $ 169 $ 139 $ 159 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Taxes | Years Ended December 31, (in millions) 2023 2022 2021 U.S. $ 76 $ 124 $ 79 Non-U.S. 237 294 274 Total $ 313 $ 418 $ 353 |
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision for income taxes consisted of the following: Years Ended December 31, (in millions) 2023 2022 2021 Current: U.S. $ 80 $ 95 $ 60 Non-U.S. 51 43 45 Total current $ 131 $ 138 $ 105 Deferred: U.S. $ (6) $ (13) $ 5 Non-U.S. (22) 10 1 Total deferred $ (28) $ (3) $ 6 Total provision $ 103 $ 135 $ 111 |
Schedule of Federal Statutory Income Tax Rate Reconciliation with Effective Income Tax Rate | The reconciliation of income tax computed at the U.S. federal statutory tax rate to the effective income tax rate is as follows: Years Ended December 31, 2023 2022 2021 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % Impact of foreign operations (0.9) (1.6) (0.2) U.S. state income taxes 4.4 3.0 3.6 Non-deductible indemnification costs 10.9 7.7 8.4 Executive compensation over $1 million 1.6 1.0 0.9 Other non-deductible expenses 0.3 (0.6) 0.4 U.S. taxation of foreign earnings 2.8 1.0 1.4 Tax credits (0.8) (0.5) (0.7) Change in tax basis in foreign assets (1) (6.5) — — All other items, net (0.2) 1.3 (3.5) Effective income tax rate 32.7 % 32.3 % 31.3 % (1) The 2023 impact represents the initial recognition of a step-up in the tax basis of intangible assets recorded under Switzerland tax reform, net of valuation allowance. |
Schedule of Deferred Tax Liabilities and Assets | Deferred income taxes reflect the net impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. The tax effects of the temporary differences as of December 31, 2023 and 2022 are as follows: Years Ended December 31, (in millions) 2023 2022 Deferred tax assets: Pension $ 21 $ 16 Intangibles (2) 28 — Other asset basis differences 51 54 Operating lease liabilities 44 43 Employee compensation and benefits 23 17 Inventory costing and related reserves 11 15 Capitalized research and development 13 6 Other accruals and reserves 19 33 Net operating and capital losses 55 49 Other 11 1 Gross deferred tax assets 276 234 Valuation allowance (75) (63) Total deferred tax assets $ 201 $ 171 Deferred tax liabilities: Intangibles $ (42) $ (41) Property, plant and equipment (16) (24) Operating lease assets (41) (40) Other (6) (7) Total deferred tax liabilities $ (105) $ (112) Net deferred tax asset $ 96 $ 59 (2) A valuation allowance brings the net deferred tax effect of the allowed step-up of intangible assets recorded under Switzerland tax reform to the amount more likely than not to be realized. |
Summary of Valuation Allowance | The rollforward of the valuation allowance on deferred taxes is as follows for the periods indicated: Years Ended December 31, (in millions) 2023 2022 2021 Beginning balance $ 63 $ 63 $ 60 Additions / (Subtractions) 12 — 3 Ending balance $ 75 $ 63 $ 63 |
Schedule of Unrecognized Tax Benefits Roll Forward | The table below sets forth the changes to our gross unrecognized tax benefit as a result of uncertain tax positions, excluding interest and penalties for the years ended December 31, 2023, 2022 and 2021. We do not anticipate that the total unrecognized tax benefits will change significantly within the next twelve months. Years Ended December 31, (in millions) 2023 2022 2021 Unrecognized tax benefits at beginning of year $ 22 $ 16 $ 10 Decreases related to positions taken on items from prior years (1) — — Increases related to positions taken in the current year 5 6 6 Decreases due to expiration of statutes of limitations (4) — — Unrecognized tax benefits at end of year $ 22 $ 22 16 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per share follows: Years Ended December 31, (in millions) 2023 2022 2021 Numerator for basic and diluted earnings per share: Net income $ 210 $ 283 $ 242 Denominator for basic and diluted earnings per share: Weighted average basic number of common shares outstanding 147 146 144 Plus: dilutive effect of common stock equivalents 1 3 4 Weighted average diluted number of common shares outstanding 148 149 148 Earnings per share: Basic $ 1.43 $ 1.94 $ 1.68 Diluted $ 1.42 $ 1.90 $ 1.63 |
Geographic Areas - Financial _2
Geographic Areas - Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segments, Geographical Areas [Abstract] | |
Schedule of Geographic Areas | Revenue and long-lived assets by geography are as follows: Net Revenue (1) Long-lived Assets (2) Years Ended December 31, December 31, (in millions) 2023 2022 2021 2023 2022 2021 U.S. $ 4,720 $ 4,795 $ 4,181 $ 332 $ 347 $ 244 Europe 1,065 1,111 1,196 143 131 139 Other International 457 464 469 107 79 46 Total $ 6,242 $ 6,370 $ 5,846 $ 582 $ 557 $ 429 (1) Net revenue between geographic areas approximate market and is not significant. Net revenue is classified according to their country of origin. Included in U.S. net revenue are export sales of $41 million, $38 million, and $26 million for the years ended December 31, 2023, 2022, and 2021, respectively. (2) Long-lived assets are comprised of property, plant and equipment, net and right-of-use lease assets. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Raw materials | $ 221 | $ 251 |
Work in process | 18 | 25 |
Finished products | 702 | 699 |
Inventories, net | $ 941 | $ 975 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property, Plant, and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 1,068 | $ 1,039 | |
Accumulated depreciation | (678) | (673) | |
Total property, plant and equipment, net | 390 | 366 | |
Depreciation | 59 | 59 | $ 58 |
Machinery and equipment | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 659 | 647 | |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment | |||
Property, plant and equipment, useful lives (in years) | 3 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment | |||
Property, plant and equipment, useful lives (in years) | 16 years | ||
Buildings and improvements | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 314 | 303 | |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment | |||
Property, plant and equipment, useful lives (in years) | 10 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment | |||
Property, plant and equipment, useful lives (in years) | 50 years | ||
Construction in progress | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 85 | 80 | |
Land | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 10 | $ 9 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 29, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Obligations payable under Indemnification Agreements | $ 609 | $ 580 | ||
Compensation expense related to employer contributions | $ 22 | 22 | $ 19 | |
Defined benefit plan net actuarial gains and losses in excess of fair value of plan assets or plan's projected benefit obligation percentage | 10% | |||
Honeywell | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Indemnity liability annual cap | $ 140 | |||
Honeywell | Indemnification and Reimbursement Agreement | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Indemnification payable percentage of payments | 90% | |||
Indemnification payable percentage of net insurance receipts | 90% | |||
Indemnification payable percentage of net proceeds received | 90% | |||
Honeywell | Tax Matters Agreement | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Obligations payable under Indemnification Agreements | $ 97 | $ 106 | ||
Trademarks | Honeywell | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Trademark license agreement (in years) | 40 years | |||
Trademarks | Honeywell | Selling, general and administrative expenses | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Royalty fee percentage of net revenue | 1.50% | |||
Maximum | Honeywell | Indemnification and Reimbursement Agreement | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Indemnity liability annual cap | $ 140 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Details) - USD ($) $ in Millions | 12 Months Ended | |||||||||
Oct. 16, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 09, 2023 | Jan. 23, 2023 | Dec. 23, 2022 | Jul. 05, 2022 | Mar. 31, 2022 | Feb. 14, 2022 | |
Business Acquisition | ||||||||||
Proceeds from sale of business | $ 86 | $ 0 | $ 0 | |||||||
Sfty SA | ||||||||||
Business Acquisition | ||||||||||
Percentage of capital stock acquired | 100% | |||||||||
BTX Technologies, Inc. | ||||||||||
Business Acquisition | ||||||||||
Percentage of capital stock acquired | 100% | |||||||||
Teknique Limited | ||||||||||
Business Acquisition | ||||||||||
Percentage of capital stock acquired | 100% | |||||||||
Electronic Customer Distributors, Inc. | ||||||||||
Business Acquisition | ||||||||||
Percentage of capital stock acquired | 100% | |||||||||
First Alert | ||||||||||
Business Acquisition | ||||||||||
Percentage of capital stock acquired | 100% | |||||||||
Arrow Wire and Cable, Inc. | ADI Global Distribution | ||||||||||
Business Acquisition | ||||||||||
Percentage of capital stock acquired | 100% | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Genesis Cable | ||||||||||
Business Acquisition | ||||||||||
Proceeds from sale of business | $ 86 | |||||||||
Gain on disposition of Business | 18 | |||||||||
Divestiture related costs | $ 5 |
Segment Financial Data - Additi
Segment Financial Data - Additional Information (Details) home in Millions | 12 Months Ended |
Dec. 31, 2023 segment home | |
Segment Reporting [Abstract] | |
Number of operating segments (segment) | segment | 2 |
Number of homes (in home) | home | 150 |
Segment Financial Data - Schedu
Segment Financial Data - Schedule of Segment Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues [Abstract] | |||
Total net revenue | $ 6,242 | $ 6,370 | $ 5,846 |
Income from operations | |||
Total income from operations | 547 | 611 | 559 |
Depreciation and amortization | |||
Total depreciation and amortization | 98 | 94 | 88 |
Capital expenditures | |||
Total capital expenditures | 105 | 85 | 63 |
Corporate, Non-Segment | |||
Income from operations | |||
Total income from operations | (218) | (229) | (250) |
Depreciation and amortization | |||
Total depreciation and amortization | 9 | 11 | 12 |
Capital expenditures | |||
Total capital expenditures | 2 | 1 | 2 |
Products and Solutions | |||
Revenues [Abstract] | |||
Total net revenue | 2,672 | 2,783 | 2,468 |
Products and Solutions | Operating Segments | |||
Income from operations | |||
Total income from operations | 495 | 527 | 541 |
Depreciation and amortization | |||
Total depreciation and amortization | 71 | 69 | 65 |
Capital expenditures | |||
Total capital expenditures | 77 | 55 | 37 |
ADI Global Distribution | |||
Revenues [Abstract] | |||
Total net revenue | 3,570 | 3,587 | 3,378 |
ADI Global Distribution | Operating Segments | |||
Income from operations | |||
Total income from operations | 270 | 313 | 268 |
Depreciation and amortization | |||
Total depreciation and amortization | 18 | 14 | 11 |
Capital expenditures | |||
Total capital expenditures | $ 26 | $ 29 | $ 24 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2023 segment | |
Revenue from Contract with Customer [Abstract] | |
Number of operating segments (segment) | 2 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | Dec. 31, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period (in years) | 1 year |
Transferred over Time | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of revenue satisfied (percent) | 2% |
Revenue Recognition - Revenue B
Revenue Recognition - Revenue By Business Line and Geographic Location (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation Of Revenue | |||
Net revenue | $ 6,242 | $ 6,370 | $ 5,846 |
Products and Solutions | |||
Disaggregation Of Revenue | |||
Net revenue | 2,672 | 2,783 | 2,468 |
Products and Solutions | Air | |||
Disaggregation Of Revenue | |||
Net revenue | 862 | 953 | 858 |
Products and Solutions | Safety and Security | |||
Disaggregation Of Revenue | |||
Net revenue | 965 | 913 | 667 |
Products and Solutions | Energy | |||
Disaggregation Of Revenue | |||
Net revenue | 525 | 595 | 594 |
Products and Solutions | Water | |||
Disaggregation Of Revenue | |||
Net revenue | 320 | 322 | 349 |
ADI Global Distribution | |||
Disaggregation Of Revenue | |||
Net revenue | 3,570 | 3,587 | 3,378 |
ADI Global Distribution | U.S. and Canada | |||
Disaggregation Of Revenue | |||
Net revenue | 3,085 | 3,087 | 2,814 |
ADI Global Distribution | EMEA | |||
Disaggregation Of Revenue | |||
Net revenue | 485 | 474 | 523 |
ADI Global Distribution | APAC | |||
Disaggregation Of Revenue | |||
Net revenue | $ 0 | $ 26 | $ 41 |
Restructuring - Additional Info
Restructuring - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost And Reserve | |||
Restructuring and impairment expenses | $ 42,000,000 | $ 35,000,000 | $ 0 |
Minimum | |||
Restructuring Cost And Reserve | |||
Restructuring initiatives execution (in months) | 12 months | ||
Maximum | |||
Restructuring Cost And Reserve | |||
Restructuring initiatives execution (in months) | 24 months |
Restructuring - Schedule Restru
Restructuring - Schedule Restructuring and Impairment Expense (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost And Reserve | |||
Restructuring and impairment expenses | $ 42,000,000 | $ 35,000,000 | $ 0 |
Corporate, Non-Segment | |||
Restructuring Cost And Reserve | |||
Restructuring and impairment expenses | 3,000,000 | 4,000,000 | |
Products and Solutions | Operating Segments | |||
Restructuring Cost And Reserve | |||
Restructuring and impairment expenses | 27,000,000 | 29,000,000 | |
ADI Global Distribution | Operating Segments | |||
Restructuring Cost And Reserve | |||
Restructuring and impairment expenses | $ 12,000,000 | $ 2,000,000 |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Reserve | |||
Beginning of year | $ 27 | $ 9 | $ 24 |
Charges | 34 | 26 | 0 |
Usage | (31) | (5) | (11) |
Other | 0 | (3) | (4) |
End of year | $ 30 | $ 27 | $ 9 |
Pension Plans - Additional Info
Pension Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure | |||
Defined benefit liability, current | $ 2 | ||
Defined benefit liability, non-current | 117 | $ 86 | |
Actual return on plan assets | $ 21 | ||
Fixed Income Investments | |||
Defined Benefit Plan Disclosure | |||
Pension assets allocation targets percentage | 37% | ||
Global Equity Investments | |||
Defined Benefit Plan Disclosure | |||
Pension assets allocation targets percentage | 33% | ||
Global Real Estate Investments | |||
Defined Benefit Plan Disclosure | |||
Pension assets allocation targets percentage | 12% | ||
Cash And Other Investments | |||
Defined Benefit Plan Disclosure | |||
Pension assets allocation targets percentage | 18% | ||
U.S. | |||
Defined Benefit Plan Disclosure | |||
Actual return on plan assets | $ 20 | ||
NETHERLANDS | |||
Defined Benefit Plan Disclosure | |||
Actual return on plan assets | 1 | ||
Pension Plan | |||
Defined Benefit Plan Disclosure | |||
Settlement loss | 6 | ||
Decrease in plan assets | 83 | ||
Decrease in plan liabilities | 78 | ||
Net actuarial gain (loss) | (31) | ||
Gain due to change in discount rate | 11 | ||
Pension Plan | U.S. | |||
Defined Benefit Plan Disclosure | |||
Settlement loss | 6 | 0 | $ 0 |
Net actuarial gain (loss) | (23) | 66 | 20 |
Actual return on plan assets | $ 20 | $ (62) | $ 25 |
Expected rate of return on plan assets | 5.30% | 5.30% | 4.70% |
Pension settlement | $ 0 | ||
Pension Plan | Non-U.S. Plans | |||
Defined Benefit Plan Disclosure | |||
Settlement loss | (2) | $ 0 | $ 0 |
Gain from curtailment | 2 | ||
Net actuarial gain (loss) | (8) | 45 | 18 |
Actual return on plan assets | $ 1 | $ (6) | $ 2 |
Expected rate of return on plan assets | 3.40% | 1.30% | 2.30% |
Pension settlement | $ 3 | ||
Expected pension contribution in the next fiscal year | 3 | ||
Pension Plan | Experience Gains | |||
Defined Benefit Plan Disclosure | |||
Net actuarial gain (loss) | $ (20) |
Pension Plans - Summary of Bala
Pension Plans - Summary of Balance Sheet Impact, Including Benefit Obligations, Assets and Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Actual return on plan assets | $ 21 | ||
U.S. | |||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Actual return on plan assets | 20 | ||
Pension Plan | |||
Change in benefit obligation: | |||
Actuarial losses (gains) | 31 | ||
Pension Plan | U.S. | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 281 | $ 348 | $ 374 |
Service cost | 3 | 7 | 7 |
Interest cost | 13 | 11 | 10 |
Actuarial losses (gains) | 23 | (66) | (20) |
Net benefits paid | (3) | (18) | (5) |
Settlements and curtailments | (83) | (1) | (18) |
Other | 0 | 0 | 0 |
Foreign currency translation | 0 | 0 | 0 |
Benefit obligation at end of year | 234 | 281 | 348 |
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Fair value of plan assets at beginning of year | 262 | 342 | 340 |
Actual return on plan assets | 20 | (62) | 25 |
Employer contributions | 0 | 1 | 0 |
Net benefits paid | (3) | (18) | (5) |
Settlements and curtailments | (83) | (1) | (18) |
Other | 1 | 0 | 0 |
Foreign currency translation | 0 | 0 | 0 |
Fair value of plan assets at end of year | 197 | 262 | 342 |
Funded status of plans (non-current) | (37) | (19) | (6) |
Pension Plan | Non-U.S. Plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 96 | 141 | 161 |
Service cost | 4 | 5 | 7 |
Interest cost | 3 | 2 | 1 |
Actuarial losses (gains) | 8 | (45) | (18) |
Net benefits paid | 4 | 0 | 0 |
Settlements and curtailments | (13) | 0 | (1) |
Other | 1 | 1 | 1 |
Foreign currency translation | 5 | (8) | (10) |
Benefit obligation at end of year | 108 | 96 | 141 |
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Fair value of plan assets at beginning of year | 27 | 32 | 28 |
Actual return on plan assets | 1 | (6) | 2 |
Employer contributions | 2 | 3 | 3 |
Net benefits paid | 4 | 0 | 1 |
Settlements and curtailments | (11) | 0 | (1) |
Other | 1 | (1) | 0 |
Foreign currency translation | 2 | (1) | (1) |
Fair value of plan assets at end of year | 26 | 27 | 32 |
Funded status of plans (non-current) | $ (82) | $ (69) | $ (109) |
Pension Plans - Summary of Accu
Pension Plans - Summary of Accumulated Other Comprehensive (Loss) Associated with Pension Plans (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
U.S. | ||
Defined Benefit Plan Disclosure | ||
Prior service cost | $ 0 | $ 0 |
Net actuarial loss (gain) | 20 | 13 |
Net amount recognized | 20 | 13 |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure | ||
Prior service cost | 2 | 2 |
Net actuarial loss (gain) | 0 | (8) |
Net amount recognized | $ 2 | $ (6) |
Pension Plans - Summary of Net
Pension Plans - Summary of Net Periodic Benefit (Income) Cost and Other Amounts Recognized in Comprehensive Income (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure | |||
Settlement and curtailment losses (gains) | $ 6 | ||
U.S. | |||
Defined Benefit Plan Disclosure | |||
Service cost | 3 | $ 7 | $ 7 |
Interest cost | 13 | 11 | 10 |
Expected return on plan assets | (11) | (17) | (16) |
Amortization of prior service credit | (1) | (1) | (1) |
Amortization of actuarial losses (gains) | 2 | 0 | 0 |
Settlement and curtailment losses (gains) | 6 | 0 | 0 |
Net periodic benefit cost (income) | 12 | 0 | 0 |
Non-U.S. Plans | |||
Defined Benefit Plan Disclosure | |||
Service cost | 4 | 5 | 7 |
Interest cost | 3 | 2 | 1 |
Expected return on plan assets | (1) | (1) | (1) |
Amortization of prior service credit | 0 | 0 | 0 |
Amortization of actuarial losses (gains) | 0 | (33) | (3) |
Settlement and curtailment losses (gains) | (2) | 0 | 0 |
Net periodic benefit cost (income) | $ 4 | $ (27) | $ 4 |
Pension Plans - Summary of Ne_2
Pension Plans - Summary of Net Periodic Benefit (Income) Cost Other Than The Service Cost Included in Other Expense, Net (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
U.S. | |||
Defined Benefit Plan Disclosure | |||
Actuarial losses (gains) | $ 14 | $ (66) | $ (20) |
Prior service costs arising during the year | 0 | 0 | 0 |
Excess return on plan assets | 0 | 79 | (9) |
Actuarial (losses) gains recognized during the year | (8) | 0 | 0 |
Other | 1 | 0 | 1 |
Total recognized in other comprehensive (income) loss | 7 | 13 | (28) |
Total recognized in net periodic benefit cost (income) and other comprehensive (income) loss | 19 | 13 | (28) |
Non-U.S. Plans | |||
Defined Benefit Plan Disclosure | |||
Actuarial losses (gains) | 9 | (45) | (18) |
Prior service costs arising during the year | 0 | 2 | 0 |
Excess return on plan assets | 0 | 6 | 0 |
Actuarial (losses) gains recognized during the year | 0 | 33 | 3 |
Other | (1) | 0 | (1) |
Total recognized in other comprehensive (income) loss | 8 | (4) | (16) |
Total recognized in net periodic benefit cost (income) and other comprehensive (income) loss | $ 12 | $ (31) | $ (12) |
Pension Plans - Summary of Sign
Pension Plans - Summary of Significant Actuarial Assumptions Used in Determining Benefit Obligations and Net Periodic Benefit (Income) Cost (Details) - Pension Plan | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
U.S. | |||
Actuarial assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 5.20% | 3.10% | 3% |
Interest crediting rate | 6% | 6% | 6% |
Expected annual rate of compensation increase | 3.50% | 3.20% | 3.20% |
Actuarial assumptions used to determine net periodic benefit cost (income) for the year ended December 31: | |||
Discount rate - benefit obligation | 5% | 5.20% | 2.70% |
Interest crediting rate | 6% | 6% | 6% |
Expected rate of return on plan assets | 5.30% | 5.30% | 4.70% |
Expected annual rate of compensation increase | 3.50% | 3.50% | 3.50% |
Non-U.S. Plans | |||
Actuarial assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 3.40% | 1.20% | 1.20% |
Interest crediting rate | 2.50% | 1.50% | 1.50% |
Expected annual rate of compensation increase | 2.60% | 2.40% | 2.40% |
Actuarial assumptions used to determine net periodic benefit cost (income) for the year ended December 31: | |||
Discount rate - benefit obligation | 3% | 3.40% | 0.70% |
Interest crediting rate | 2.20% | 2.50% | 1.50% |
Expected rate of return on plan assets | 3.40% | 1.30% | 2.30% |
Expected annual rate of compensation increase | 2.70% | 2.60% | 2.40% |
Pension Plans - Summary of Amou
Pension Plans - Summary of Amounts Relate to Pension Plans with Accumulated Benefit Obligations Exceeding Fair Value of Plan Assets (Details) - Pension Plan - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
U.S. | ||
Defined Benefit Plan Disclosure | ||
Projected benefit obligation | $ 234 | $ 281 |
Accumulated benefit obligation | 230 | 278 |
Fair value of plan assets | 197 | 262 |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure | ||
Projected benefit obligation | 106 | 96 |
Accumulated benefit obligation | 96 | 86 |
Fair value of plan assets | $ 25 | $ 27 |
Pension Plans - Summary of Pens
Pension Plans - Summary of Pension Plan with Projected Benefit Obligations Exceeding Fair Value of Plan Assets (Details) - Pension Plan - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
U.S. | ||
Defined Benefit Plan Disclosure | ||
Projected benefit obligation | $ 234 | $ 281 |
Accumulated benefit obligation | 230 | 278 |
Fair value of plan assets | 197 | 262 |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure | ||
Projected benefit obligation | 108 | 96 |
Accumulated benefit obligation | 98 | 87 |
Fair value of plan assets | $ 26 | $ 27 |
Pension Plans - Summary of NAV
Pension Plans - Summary of NAV and Fair Values of U.S. Pension Plans Assets by Asset Category (Details) - Pension Plan - U.S. - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | $ 197 | $ 262 | $ 342 | $ 340 |
NAV | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 197 | 262 | ||
NAV | Cash and cash equivalents | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 3 | 6 | ||
NAV | Equity | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 64 | 45 | ||
NAV | Government bonds | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 14 | 21 | ||
NAV | Corporate bonds | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 58 | 132 | ||
NAV | Real estate / property | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 24 | 29 | ||
NAV | Other | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | $ 34 | $ 29 |
Pension Plans - Summary of Fair
Pension Plans - Summary of Fair Values of Non-U.S. Pension Plans Assets by Asset Category (Details) - Pension Plan - Non-U.S. Plans - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | $ 26 | $ 27 | $ 32 | $ 28 |
Equity | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 7 | 1 | ||
Government bonds | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 6 | 1 | ||
Insurance contracts | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 7 | 6 | ||
Other | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 6 | 19 | ||
Level 1 | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 7 | 1 | ||
Level 1 | Equity | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 7 | 1 | ||
Level 1 | Government bonds | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 0 | 0 | ||
Level 1 | Insurance contracts | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 0 | 0 | ||
Level 1 | Other | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 0 | 0 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 6 | 1 | ||
Level 2 | Equity | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 0 | 0 | ||
Level 2 | Government bonds | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 6 | 1 | ||
Level 2 | Insurance contracts | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 0 | 0 | ||
Level 2 | Other | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 0 | 0 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 13 | 25 | $ 30 | $ 26 |
Level 3 | Equity | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 0 | 0 | ||
Level 3 | Government bonds | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 0 | 0 | ||
Level 3 | Insurance contracts | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | 7 | 6 | ||
Level 3 | Other | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at fair value | $ 6 | $ 19 |
Pension Plans - Summary of Chan
Pension Plans - Summary of Changes in Fair Value of Level 3 Assets for Non-U.S (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure | |||
Actual return on plan assets | $ 21 | ||
Pension Plan | Non-U.S. Plans | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets at beginning of year | 27 | $ 32 | $ 28 |
Actual return on plan assets | 1 | (6) | 2 |
Fair value of plan assets at end of year | 26 | 27 | 32 |
Level 3 | Pension Plan | Non-U.S. Plans | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets at beginning of year | 25 | 30 | 26 |
Actual return on plan assets | 1 | (3) | 1 |
Purchases, sales and settlements, net | (14) | 4 | |
Other | 1 | (2) | (1) |
Fair value of plan assets at end of year | $ 13 | $ 25 | $ 30 |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | Level 3 | Level 3 | Level 3 |
Pension Plans - Summary of Bene
Pension Plans - Summary of Benefit Payments (Details) - Pension Plan $ in Millions | Dec. 31, 2023 USD ($) |
U.S. | |
Defined Benefit Plan Disclosure | |
2024 | $ 19 |
2025 | 19 |
2026 | 19 |
2027 | 19 |
2028 | 19 |
2029-2033 | 86 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure | |
2024 | 3 |
2025 | 3 |
2026 | 3 |
2027 | 3 |
2028 | 4 |
2029-2033 | $ 26 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jul. 01, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Increase in number of shares available for issuance (in shares) | 3,500,000 | |||
Shares available for issuance (in shares) | 19,500,000 | |||
Number of shares available for grant (in shares) | 12,000,000 | |||
Stock-based compensation expense, net of tax | $ 43 | $ 48 | $ 36 | |
Vesting period (in years) | 3 years | |||
Number of stock options exercised | 0 | 0 | ||
Proceeds from stock options exercised | $ 9 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Number of shares available for grant (in shares) | 7,500,000 | |||
Vesting period (in years) | 3 years | |||
Remaining term of unvested awards (in years) | 1 year | |||
Expiration period (in years) | 7 years | |||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Remaining term of unvested awards (in years) | 1 year 9 months | |||
PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Vesting period (in years) | 3 years | |||
Remaining term of unvested awards (in years) | 1 year 2 months | |||
Non-Employee Directors | RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Vesting period (in years) | 1 year |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Summary of Fair Values Estimated for PSUs (Details) - PSUs | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expected volatility (as percentage) | 63.37% | 59.01% | 47.43% |
Risk-free interest rate (as percentage) | 4.24% | 1.58% | 0.20% |
Expected term of options (in years) | 2 years 10 months 17 days | 2 years 10 months 20 days | 2 years 10 months 9 days |
Dividend yield (as percentage) | 0% | 0% | 0% |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Summarized RSU and PSU Activity Related to Stock Incentive Plan (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
PSUs | |
Number of Stock Units Granted | |
Non-vested, beginning balance (in shares) | shares | 1,722,380 |
Number of stock units granted (in shares) | shares | 553,071 |
Vested (in shares) | shares | (611,631) |
Forfeited (in shares) | shares | (69,954) |
Non-vested, ending balance (in shares) | shares | 1,593,866 |
Weighted average grant date fair value per share | |
Non-vested, beginning balance (in dollars per share) | $ / shares | $ 27.23 |
Granted (in dollars per share) | $ / shares | 29.89 |
Vested (in dollars per share) | $ / shares | 27.03 |
Forfeited (in dollars per share) | $ / shares | 38.47 |
Non-vested, ending balance (in dollars per share) | $ / shares | $ 35.80 |
RSUs | |
Number of Stock Units Granted | |
Non-vested, beginning balance (in shares) | shares | 3,410,962 |
Number of stock units granted (in shares) | shares | 2,298,936 |
Vested (in shares) | shares | (1,615,111) |
Forfeited (in shares) | shares | (238,291) |
Non-vested, ending balance (in shares) | shares | 3,856,496 |
Weighted average grant date fair value per share | |
Non-vested, beginning balance (in dollars per share) | $ / shares | $ 20.57 |
Granted (in dollars per share) | $ / shares | 18.79 |
Vested (in dollars per share) | $ / shares | 18.35 |
Forfeited (in dollars per share) | $ / shares | 21.88 |
Non-vested, ending balance (in dollars per share) | $ / shares | $ 20.16 |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans - Unrecognized Compensation Cost Related to Unvested Awards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Unrecognized Compensation Cost | $ 68 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Unrecognized Compensation Cost | $ 48 |
Weighted-Average Period (in years) | 1 year 9 months |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Unrecognized Compensation Cost | $ 20 |
Weighted-Average Period (in years) | 1 year 2 months |
Stock-Based Compensation Plan_6
Stock-Based Compensation Plans - Fair Value of Shares Vested (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Fair value of RSUs and PSUs vested | $ 43 | $ 40 | $ 48 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Fair value of RSUs and PSUs vested | 29 | 36 | $ 48 |
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Fair value of RSUs and PSUs vested | $ 14 | $ 4 |
Stock-Based Compensation Plan_7
Stock-Based Compensation Plans - Summary of Fair Value of Stock Options (Details) - Stock Options | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Expected stock price volatility (as percentage) | 34% |
Expected term of options (in years) | 5 years |
Dividend yield (as percentage) | 0% |
Risk-free interest rate (as percentage) | 0.77% |
Stock-Based Compensation Plan_8
Stock-Based Compensation Plans - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Stock Options | ||
Options outstanding, beginning balances (in shares) | 1,317,649 | |
Granted (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Expired (in shares) | (96,692) | |
Exercised (in shares) | 0 | 0 |
Options outstanding, ending balances (in shares) | 1,220,957 | 1,317,649 |
Vested and expected to vest (in shares) | 1,220,957 | |
Exercisable (in shares) | 1,070,957 | |
Weighted Average Exercise Price | ||
Options outstanding, beginning balance (in dollars per share) | $ 15.25 | |
Granted (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 0 | |
Expired (in dollars per share) | 24.35 | |
Exercised (in dollars per share) | 0 | |
Options outstanding, ending balance (in dollars per share) | 14.52 | $ 15.25 |
Vested and expected to vest (in dollars per share) | 14.52 | |
Exercisable (in dollars per share) | $ 12.99 | |
Stock Options Additional Disclosures | ||
Weighted Average Contractual Life (in years) | 3 years 2 months 12 days | 4 years |
Weighted Average Contractual Life (in years), vested and expected to vest | 3 years 2 months 12 days | |
Weighted Average Contractual Life (in years), exercisable | 2 years 10 months 24 days | |
Aggregate Intrinsic Value of shares outstanding | $ 8 | $ 6 |
Aggregate Intrinsic Value, exercised | 0 | |
Aggregate Intrinsic Value, vested and expected to vest | 8 | |
Aggregate Intrinsic Value, exercisable | $ 8 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Schedule of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill | ||
Goodwill, beginning balance | $ 2,724 | $ 2,661 |
Acquisitions | 10 | 109 |
Divestiture | (46) | (4) |
Adjustments | (5) | |
Impact of foreign currency translation | 22 | (42) |
Goodwill, ending balance | 2,705 | 2,724 |
Products and Solutions | ||
Goodwill | ||
Goodwill, beginning balance | 2,072 | 2,010 |
Acquisitions | 7 | 94 |
Divestiture | (46) | 0 |
Adjustments | (5) | |
Impact of foreign currency translation | 17 | (32) |
Goodwill, ending balance | 2,045 | 2,072 |
ADI Global Distribution | ||
Goodwill | ||
Goodwill, beginning balance | 652 | 651 |
Acquisitions | 3 | 15 |
Divestiture | 0 | (4) |
Adjustments | 0 | |
Impact of foreign currency translation | 5 | (10) |
Goodwill, ending balance | $ 660 | $ 652 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Summary of Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets subject to amortization | $ 281 | $ 295 |
Indefinite-lived intangible assets | 180 | 180 |
Total intangible assets | $ 461 | $ 475 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net - Schedule of Other Intangible Assets With Finite Lives (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finite Lived Intangible Assets | ||
Gross Carrying Amount | $ 585 | $ 567 |
Accumulated Amortization | (304) | (272) |
Net Carrying Amount | 281 | 295 |
Patents and technology | ||
Finite Lived Intangible Assets | ||
Gross Carrying Amount | 64 | 65 |
Accumulated Amortization | (26) | (28) |
Net Carrying Amount | $ 38 | $ 37 |
Weighted Average Amortization (in years) | 10 years | 10 years |
Patents and technology | Minimum | ||
Finite Lived Intangible Assets | ||
Useful lives (in years) | 7 years | 3 years |
Patents and technology | Maximum | ||
Finite Lived Intangible Assets | ||
Useful lives (in years) | 10 years | 10 years |
Customer relationships | ||
Finite Lived Intangible Assets | ||
Gross Carrying Amount | $ 319 | $ 313 |
Accumulated Amortization | (138) | (117) |
Net Carrying Amount | $ 181 | $ 196 |
Weighted Average Amortization (in years) | 14 years | 14 years |
Customer relationships | Minimum | ||
Finite Lived Intangible Assets | ||
Useful lives (in years) | 7 years | 7 years |
Customer relationships | Maximum | ||
Finite Lived Intangible Assets | ||
Useful lives (in years) | 15 years | 15 years |
Trademarks | ||
Finite Lived Intangible Assets | ||
Gross Carrying Amount | $ 9 | $ 14 |
Accumulated Amortization | (8) | (8) |
Net Carrying Amount | $ 1 | $ 6 |
Weighted Average Amortization (in years) | 10 years | 10 years |
Trademarks | Minimum | ||
Finite Lived Intangible Assets | ||
Useful lives (in years) | 5 years | |
Trademarks | Maximum | ||
Finite Lived Intangible Assets | ||
Useful lives (in years) | 10 years | 10 years |
Software | ||
Finite Lived Intangible Assets | ||
Gross Carrying Amount | $ 193 | $ 175 |
Accumulated Amortization | (132) | (119) |
Net Carrying Amount | $ 61 | $ 56 |
Weighted Average Amortization (in years) | 5 years | 6 years |
Software | Minimum | ||
Finite Lived Intangible Assets | ||
Useful lives (in years) | 2 years | 2 years |
Software | Maximum | ||
Finite Lived Intangible Assets | ||
Useful lives (in years) | 7 years | 7 years |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible asset amortization | $ 38 | $ 35 | $ 30 |
Goodwill and Intangible Asset_7
Goodwill and Intangible Assets, net - Estimated Aggregate Amortization on Intangible Assets (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 38 |
2025 | 40 |
2026 | 35 |
2027 | 29 |
2028 | $ 26 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee Lease Description | |||
Total operating lease costs | $ 77 | $ 69 | $ 63 |
Selling, general and administrative expenses | |||
Lessee Lease Description | |||
Total operating lease costs | 57 | 50 | 46 |
Cost of goods sold | |||
Lessee Lease Description | |||
Total operating lease costs | $ 20 | $ 19 | $ 17 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Variable lease costs | $ 22 | $ 19 | $ 17 |
Leases - Summary of Lease Recog
Leases - Summary of Lease Recognized Related to Operating Leases (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease assets | $ 192 | $ 191 |
Operating lease liabilities - current | 39 | 37 |
Operating lease liabilities - non-current | $ 166 | $ 166 |
Weighted-average remaining lease term (years) | 6 years 3 months 25 days | 6 years 9 months 21 days |
Weighted-average incremental borrowing rate | 6.12% | 5.78% |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities | Accrued liabilities |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 46 |
2025 | 44 |
2026 | 40 |
2027 | 34 |
2028 | 27 |
Thereafter | 58 |
Total lease payments | 249 |
Less: Imputed interest | 44 |
Present value of operating lease liabilities | $ 205 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee Lease Description | |||
Cash paid for operating lease liabilities | $ 36 | $ 33 | $ 33 |
Non-cash activities: operating lease assets obtained in exchange for new operating lease liabilities (1) | $ 39 | 97 | $ 46 |
2022 Acquisitions | |||
Lessee Lease Description | |||
Non-cash activities: operating lease assets obtained in exchange for new operating lease liabilities (1) | $ 25 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 26, 2021 |
Debt Instrument | |||
Gross debt | $ 1,419 | $ 1,431 | |
Less: current portion of long-term debt | (12) | (12) | |
Less: unamortized deferred financing costs | (11) | (15) | |
Long-term debt | 1,396 | 1,404 | |
4.000% senior notes due 2029 | |||
Debt Instrument | |||
Gross debt | $ 300 | 300 | |
Interest rate (as a percent) | 4% | 4% | |
Variable rate A&R Term B Facility | |||
Debt Instrument | |||
Gross debt | $ 1,119 | $ 1,131 |
Long-Term Debt - Scheduled Prin
Long-Term Debt - Scheduled Principal Repayments Under Senior Credit Facilities and Senior Notes (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2024 | $ 12 | |
2025 | 12 | |
2026 | 12 | |
2027 | 12 | |
2028 | 1,073 | |
Thereafter | 300 | |
Total | $ 1,419 | $ 1,431 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | 12 Months Ended | |||||||
Jun. 30, 2023 | Mar. 28, 2022 | Feb. 12, 2021 | Dec. 31, 2023 | Dec. 31, 2021 | Dec. 31, 2022 | Aug. 26, 2021 | Feb. 16, 2021 | |
Debt Instrument | ||||||||
Loss on extinguishment of debt | $ 41,000,000 | |||||||
A&R Term B Facility | ||||||||
Debt Instrument | ||||||||
Interest rate (as a percent) | 7.72% | 6.78% | ||||||
A&R Credit Agreement | A&R Term B Facility | ||||||||
Debt Instrument | ||||||||
Credit facilities term (in years) | 7 years | |||||||
Principal amount issued | $ 200,000,000 | $ 950,000,000 | ||||||
A&R Credit Agreement | A&R Revolving Credit Facility | ||||||||
Debt Instrument | ||||||||
Credit facilities term (in years) | 5 years | |||||||
Principal amount issued | $ 500,000,000 | |||||||
A&R Credit Agreement | A&R Revolving Credit Facility | Maximum | ||||||||
Debt Instrument | ||||||||
Borrowings from credit facility | $ 75,000,000 | |||||||
A&R Credit Agreement | A&R Revolving Credit Facility | SOFR | ||||||||
Debt Instrument | ||||||||
Debt instrument, basis spread on variable rate | 0.10% | |||||||
Senior Credit Facilities | A&R Revolving Credit Facility | ||||||||
Debt Instrument | ||||||||
Borrowings from credit facility | 0 | $ 0 | ||||||
Senior Credit Facilities | Letter of Credit | ||||||||
Debt Instrument | ||||||||
Borrowings from credit facility | $ 0 | $ 0 | ||||||
4.000% senior notes due 2029 | ||||||||
Debt Instrument | ||||||||
Principal amount issued | $ 300,000,000 | |||||||
Interest rate (as a percent) | 4% | 4% | ||||||
Redemption price percentage | 101% | |||||||
6.125% notes due 2026 | ||||||||
Debt Instrument | ||||||||
Interest rate (as a percent) | 6.125% |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) $ in Millions | 2 Months Ended | 12 Months Ended | |||
Apr. 30, 2023 USD ($) derivative | Dec. 31, 2023 USD ($) | Jun. 23, 2023 | Mar. 31, 2023 USD ($) | Mar. 31, 2021 USD ($) derivative | |
Derivative | |||||
Unrealized gains expected to be reclassified from AOCI in next 12 months | $ 22 | ||||
Swap Agreements | |||||
Derivative | |||||
Number of interest rate derivatives held | derivative | 8 | 8 | |||
Notional value | $ 70 | $ 70 | $ 560 | ||
Number of interest rate swap agreements modified | derivative | 2 | ||||
AOCI remaining due to modified interest rate swap agreements to be amortized as reduction to interest expense | $ 2 | ||||
Fixed weighted average rate (as percentage) | 0.39% | ||||
Maximum | Swap Agreements | |||||
Derivative | |||||
Fixed weighted average rate (as percentage) | 1.13% |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Derivative Instruments in Statement of Financial Position (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Apr. 01, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Derivative | |||
Derivative asset designated as hedging instruments | $ 30 | $ 45 | |
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Other current assets | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | ||
Accumulated other comprehensive loss | |||
Derivative | |||
Unrealized gain | $ 42 | $ 25 | |
Interest rate swaps | Other current assets | Designated as Hedging Instrument | |||
Derivative | |||
Derivative asset designated as hedging instruments | 20 | 23 | |
Interest rate swaps | Other assets | Designated as Hedging Instrument | |||
Derivative | |||
Derivative asset designated as hedging instruments | $ 10 | $ 22 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Summary of Effect of Derivative Instruments Designated As Cash Flow Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Derivatives used in Net Investment Hedge, Net of Tax | ||
Beginning of period | $ 2,529 | $ 2,252 |
End of period | 2,749 | 2,529 |
Accumulated other comprehensive loss | ||
Derivatives used in Net Investment Hedge, Net of Tax | ||
Beginning of period | 42 | 6 |
Current period gain (loss) recognized in/reclassified from other comprehensive income | 25 | 42 |
(Gains) losses reclassified from accumulated other comprehensive loss to net income | (42) | (6) |
End of period | $ 25 | $ 42 |
Fair Value - Schedule of Carryi
Fair Value - Schedule of Carrying Values and Estimated Fair Value of Debt Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 26, 2021 |
Debt Instrument | |||
Debt, carrying value | $ 1,419 | $ 1,431 | |
Debt, fair value | $ 1,388 | 1,367 | |
4.000% senior notes due 2029 | |||
Debt Instrument | |||
Interest rate (as a percent) | 4% | 4% | |
Debt, carrying value | $ 300 | 300 | |
Debt, fair value | 266 | 242 | |
Variable rate A&R Term B Facility | |||
Debt Instrument | |||
Debt, carrying value | 1,119 | 1,131 | |
Debt, fair value | $ 1,122 | $ 1,125 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - Senior Credit Facilities - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
A&R Revolving Credit Facility | ||
Debt Instrument | ||
Borrowings from credit facility | $ 0 | $ 0 |
Letter of Credit | ||
Debt Instrument | ||
Borrowings from credit facility | $ 0 | $ 0 |
Fair Value - Summary of the Car
Fair Value - Summary of the Carrying Amount and Fair Value of Interest Rate Swap (Details) - Fair Value, Recurring - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||
Carrying value, assets, interest rate swaps | $ 30 | $ 45 |
Level 2 | ||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||
Assets, interest rate swaps | $ 30 | $ 45 |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Liabilities, Current [Abstract] | ||||
Obligations payable under Indemnification Agreements | $ 140 | $ 140 | ||
Compensation, benefit and other employee-related | 110 | 108 | ||
Customer rebate reserve | 104 | 98 | ||
Restructuring | 30 | 27 | $ 9 | $ 24 |
Product warranties | 24 | 40 | ||
Current operating lease liability | 39 | 37 | ||
Taxes payable | 34 | 38 | ||
Other | 128 | 152 | ||
Total accrued liabilities | $ 608 | $ 640 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Nov. 17, 2022 | Oct. 29, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Loss Contingencies | |||||
Environmental liabilities | $ 22 | $ 22 | |||
Reimbursement Agreement expense | 178 | 157 | $ 146 | ||
Claim settlement expense | $ 1.6 | ||||
Settlement liabilities | 0.6 | ||||
Total | $ 342 | ||||
Environmental Loss Contingency, Statement of Financial Position [Extensible Enumeration] | Cost of goods sold | ||||
Purchase Commitments | |||||
Loss Contingencies | |||||
Total | $ 91 | 41 | 22 | ||
Other Expense | |||||
Loss Contingencies | |||||
Reimbursement Agreement expense | 178 | 157 | 146 | ||
Maximum | |||||
Loss Contingencies | |||||
Sale leaseback transaction, aggregate amount | 150 | ||||
Indemnification Agreement | |||||
Loss Contingencies | |||||
Maximum annual reimbursement obligation amount | 25 | ||||
Honeywell | |||||
Loss Contingencies | |||||
Indemnity liability annual cap | $ 140 | ||||
Honeywell | Trademark Agreement | |||||
Loss Contingencies | |||||
Trademark license agreement (in years) | 40 years | ||||
Royalty fee on net revenue | 1.50% | ||||
Royalty expense | $ 18 | $ 23 | $ 21 | ||
Honeywell | Indemnification Agreement | |||||
Loss Contingencies | |||||
Indemnification payable percentage of payments | 90% | ||||
Indemnification payable percentage of net insurance receipts | 90% | ||||
Indemnification payable percentage of net proceeds received | 90% | ||||
Honeywell | Indemnification Agreement | Maximum | |||||
Loss Contingencies | |||||
Indemnity liability annual cap | $ 140 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Reimbursement Agreement Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Indemnification Agreement | ||
Accrual for Reimbursement Agreement | ||
Maximum annual reimbursement obligation amount | $ 25 | |
Honeywell | ||
Accrual for Reimbursement Agreement | ||
Beginning balance | 720 | $ 725 |
Accruals for liabilities deemed probable and reasonably estimable | 169 | 155 |
Payments to Honeywell | (140) | (160) |
Ending balance | 749 | 720 |
Reimbursement Agreement liabilities | $ 140 | |
Reimbursement Agreement liabilities, late payment fee percentage | 5% | |
Honeywell | Reimbursement Agreement | ||
Accrual for Reimbursement Agreement | ||
Beginning balance | $ 614 | 597 |
Accruals for liabilities deemed probable and reasonably estimable | 178 | 157 |
Payments to Honeywell | (140) | (140) |
Ending balance | 652 | 614 |
Honeywell | Tax Matters Agreement | ||
Accrual for Reimbursement Agreement | ||
Beginning balance | 106 | 128 |
Accruals for liabilities deemed probable and reasonably estimable | (9) | (2) |
Payments to Honeywell | 0 | (20) |
Ending balance | $ 97 | $ 106 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Reimbursement Agreement Liabilities Included in Balance Sheet Accounts (Details) - Honeywell - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Loss Contingency, Classification of Accrual [Abstract] | |||
Total indemnification liabilities | $ 749 | $ 720 | $ 725 |
Accrued liabilities | |||
Loss Contingency, Classification of Accrual [Abstract] | |||
Accrued liabilities | 140 | 140 | |
Obligations payable under Indemnification Agreements | |||
Loss Contingency, Classification of Accrual [Abstract] | |||
Obligations payable under Indemnification Agreements | $ 609 | $ 580 |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Recorded Obligations for Product Warranties and Product Performance Guarantee (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Warranties and Guarantees | |||
Beginning balance | $ 48 | $ 23 | $ 22 |
Accruals for warranties/guarantees issued during the year | 24 | 30 | 22 |
Adjustment of pre-existing warranties/guarantees | 0 | (2) | (3) |
Settlement of warranty/guarantee claims | (38) | (17) | (18) |
Reserve of acquired company at date of acquisition | 0 | 14 | 0 |
Ending balance | $ 34 | $ 48 | $ 23 |
Commitments and Contingencies_5
Commitments and Contingencies - Purchase Commitments (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2024 | $ 142 |
2025 | 113 |
2026 | 85 |
2027 | 2 |
2028 and thereafter | 0 |
Total | $ 342 |
Other Expense, net - Summary of
Other Expense, net - Summary of Other Expenses, net (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |||
Reimbursement Agreement expense | $ 178 | $ 157 | $ 146 |
Return on pension assets | 9 | (39) | (9) |
Other, net | (18) | 21 | 22 |
Total other expenses, net | $ 169 | $ 139 | $ 159 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ 76 | $ 124 | $ 79 |
Non-U.S. | 237 | 294 | 274 |
Income before taxes | $ 313 | $ 418 | $ 353 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
U.S. | $ 80 | $ 95 | $ 60 |
Non-U.S. | 51 | 43 | 45 |
Total current | 131 | 138 | 105 |
Deferred: | |||
U.S. | (6) | (13) | 5 |
Non-U.S. | (22) | 10 | 1 |
Total deferred | (28) | (3) | 6 |
Total provision | $ 103 | $ 135 | $ 111 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation, Income Tax expense (Benefit) (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 21% | 21% | 21% |
Impact of foreign operations | (0.90%) | (1.60%) | (0.20%) |
U.S. state income taxes | 4.40% | 3% | 3.60% |
Non-deductible indemnification costs | 10.90% | 7.70% | 8.40% |
Executive compensation over $1 million | 1.60% | 1% | 0.90% |
Other non-deductible expenses | 0.30% | (0.60%) | 0.40% |
U.S. taxation of foreign earnings | 2.80% | 1% | 1.40% |
Tax credits | (0.80%) | (0.50%) | (0.70%) |
Change in tax basis in foreign assets (1) | (6.50%) | 0% | 0% |
All other items, net | (0.20%) | 1.30% | (3.50%) |
Effective income tax rate | 32.70% | 32.30% | 31.30% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes [Line Items] | ||||
Valuation allowance | $ 63 | $ 75 | $ 63 | $ 60 |
Net operating loss carryforwards | 52 | |||
Undistributed earnings from foreign subsidiaries | 2,000 | |||
Undistributed earnings from foreign subsidiaries not considered indefinitely reinvested | 625 | |||
Unrecognized tax benefits | 22 | 22 | $ 16 | $ 10 |
Accrued interest and penalties expense | 3 | 2 | ||
Interest and penalties expense | $ 1 | |||
Non-U.S. | ||||
Income Taxes [Line Items] | ||||
Operating carryforward not subject to expiration | 46 | |||
Operating carryforward subject to expiration | $ 9 |
Income Taxes - Summary of Valua
Income Taxes - Summary of Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Valuation Allowance, Deferred Taxes | |||
Beginning balance | $ 63 | $ 63 | $ 60 |
Additions / (Subtractions) | 12 | 0 | 3 |
Ending balance | $ 75 | $ 63 | $ 63 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Unrecognized Tax Benefits | |||
Unrecognized tax benefits at beginning of year | $ 22 | $ 16 | $ 10 |
Decreases due to expiration of statutes of limitations | (1) | 0 | 0 |
Increases related to positions taken in the current year | 5 | 6 | 6 |
Decreases due to expiration of statutes of limitations | (4) | 0 | 0 |
Unrecognized tax benefits at end of year | $ 22 | $ 22 | $ 16 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Liabilities and Assets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||||
Pension | $ 21 | $ 16 | ||
Intangibles | 28 | 0 | ||
Other asset basis differences | 51 | 54 | ||
Operating lease liabilities | 44 | 43 | ||
Employee compensation and benefits | 23 | 17 | ||
Inventory costing and related reserves | 11 | 15 | ||
Capitalized research and development | 13 | 6 | ||
Other accruals and reserves | 19 | 33 | ||
Net operating and capital losses | 55 | 49 | ||
Other | 11 | 1 | ||
Gross deferred tax assets | 276 | 234 | ||
Valuation allowance | (75) | (63) | $ (63) | $ (60) |
Total deferred tax assets | 201 | 171 | ||
Deferred tax liabilities: | ||||
Intangibles | (42) | (41) | ||
Property, plant and equipment | (16) | (24) | ||
Operating lease assets | (41) | (40) | ||
Other | (6) | (7) | ||
Total deferred tax liabilities | (105) | (112) | ||
Net deferred tax asset | $ 96 | $ 59 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator for basic and diluted earnings per share: | |||
Net income | $ 210 | $ 283 | $ 242 |
Denominator for basic and diluted earnings per share: | |||
Weighted average basic number of common shares outstanding (in shares) | 147 | 146 | 144 |
Plus: dilutive effect of common stock equivalents (in shares) | 1 | 3 | 4 |
Weighted average diluted number of common shares outstanding (in shares) | 148 | 149 | 148 |
Earnings per share: | |||
Basic (in dollars per share) | $ 1.43 | $ 1.94 | $ 1.68 |
Diluted (in dollars per share) | $ 1.42 | $ 1.90 | $ 1.63 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Options and Other Rights | |||
Earnings Per Share | |||
Purchase of outstanding common stock were anti-dilutive (in shares) | 1.5 | 0.1 | 0.2 |
Performance Based Unit Awards | |||
Earnings Per Share | |||
Purchase of outstanding common stock were anti-dilutive (in shares) | 1.2 | 0.6 | 0.6 |
Geographic Areas - Financial _3
Geographic Areas - Financial Data - Schedule of Geographic Areas (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues From External Customers And Long Lived Assets | |||
Net revenue | $ 6,242 | $ 6,370 | $ 5,846 |
Long-lived assets | 582 | 557 | 429 |
United States | |||
Revenues From External Customers And Long Lived Assets | |||
Net revenue | 4,720 | 4,795 | 4,181 |
Long-lived assets | 332 | 347 | 244 |
Europe | |||
Revenues From External Customers And Long Lived Assets | |||
Net revenue | 1,065 | 1,111 | 1,196 |
Long-lived assets | 143 | 131 | 139 |
Other International | |||
Revenues From External Customers And Long Lived Assets | |||
Net revenue | 457 | 464 | 469 |
Long-lived assets | $ 107 | $ 79 | $ 46 |
Geographic Areas - Financial _4
Geographic Areas - Financial Data - Schedule of Geographic Areas (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues From External Customers And Long Lived Assets | |||
Net revenue | $ 6,242 | $ 6,370 | $ 5,846 |
United States | |||
Revenues From External Customers And Long Lived Assets | |||
Net revenue | 4,720 | 4,795 | 4,181 |
United States | Export Sales | |||
Revenues From External Customers And Long Lived Assets | |||
Net revenue | $ 41 | $ 38 | $ 26 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) shares in Millions | 12 Months Ended | |
Dec. 31, 2023 | Aug. 03, 2023 | |
Class of Stock | ||
Common stock repurchases | $ 41,000,000 | |
Share Repurchase Program | ||
Class of Stock | ||
Stock repurchase program, authorized amount | $ 150,000,000 | |
Remaining authorized repurchase amount | $ 109,000,000 | |
Common Stock | ||
Class of Stock | ||
Treasury stock, shares, acquired | 2.6 | |
Common stock repurchases | $ 41,000,000 |