Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 29, 2019 | Jul. 15, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 29, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-7221 | |
Entity Registrant Name | MOTOROLA SOLUTIONS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 500 W. Monroe Street, | |
Entity Address, City or Town | Chicago, | |
Entity Tax Identification Number | 36-1115800 | |
Entity Address, Postal Zip Code | 60661 | |
Entity Address, State or Province | IL | |
City Area Code | 847 | |
Local Phone Number | 576-5000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | MSI | |
Security Exchange Name | NYSE | |
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 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 165,555,527 | |
Entity Central Index Key | 0000068505 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Net sales | $ 1,860 | $ 1,760 | $ 3,517 | $ 3,227 |
Costs of sales | 929 | 938 | 1,813 | 1,736 |
Gross margin | 931 | 822 | 1,704 | 1,491 |
Selling, general and administrative expenses | 351 | 316 | 676 | 594 |
Research and development expenditures | 170 | 162 | 333 | 314 |
Other charges | 61 | 71 | 116 | 138 |
Operating earnings | 349 | 273 | 579 | 445 |
Other income (expense): | ||||
Interest expense, net | (56) | (58) | (111) | (104) |
Gains (losses) on sales of investments and businesses, net | 3 | (1) | 4 | 10 |
Other, net | (21) | 13 | (12) | 16 |
Total other expense | (74) | (46) | (119) | (78) |
Net earnings before income taxes | 275 | 227 | 460 | 367 |
Income tax expense | 67 | 46 | 100 | 69 |
Net earnings | 208 | 181 | 360 | 298 |
Less: Earnings attributable to non-controlling interests | 1 | 1 | 2 | 1 |
Net earnings attributable to Motorola Solutions, Inc. | $ 207 | $ 180 | $ 358 | $ 297 |
Earnings per common share: | ||||
Basic (in US$ per share) | $ 1.25 | $ 1.11 | $ 2.18 | $ 1.83 |
Diluted (in US$ per share) | $ 1.18 | $ 1.05 | $ 2.04 | $ 1.73 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 164.9 | 162.2 | 164.4 | 161.7 |
Diluted (in shares) | 176.1 | 171.7 | 175.3 | 171.1 |
Products | ||||
Net sales | $ 1,118 | $ 1,042 | $ 2,063 | $ 1,842 |
Costs of sales | 490 | 485 | 934 | 867 |
Services | ||||
Net sales | 742 | 718 | 1,454 | 1,385 |
Costs of sales | $ 439 | $ 453 | $ 879 | $ 869 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 208 | $ 181 | $ 360 | $ 298 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (23) | (86) | 7 | (38) |
Marketable securities | 0 | 0 | 0 | (6) |
Defined benefit plans | 10 | 14 | 21 | 26 |
Total other comprehensive income (loss), net of tax | (13) | (72) | 28 | (18) |
Comprehensive income | 195 | 109 | 388 | 280 |
Less: Earnings attributable to non-controlling interests | 1 | 1 | 2 | 1 |
Comprehensive income attributable to Motorola Solutions, Inc. common shareholders | $ 194 | $ 108 | $ 386 | $ 279 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 953 | $ 1,246 |
Restricted cash | 11 | 11 |
Total cash and cash equivalents | 964 | 1,257 |
Accounts receivable, net | 1,206 | 1,293 |
Contract assets | 913 | 1,012 |
Inventories, net | 424 | 356 |
Other current assets | 324 | 354 |
Total current assets | 3,831 | 4,272 |
Property, plant and equipment, net | 940 | 895 |
Operating lease assets | 567 | |
Investments | 175 | 169 |
Deferred income taxes | 913 | 985 |
Goodwill | 1,852 | 1,514 |
Intangible assets, net | 1,332 | 1,230 |
Other assets | 364 | 344 |
Total assets | 9,974 | 9,409 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Current portion of long-term debt | 28 | 31 |
Accounts payable | 544 | 592 |
Contract liabilities | 1,187 | 1,263 |
Accrued liabilities | 1,117 | 1,210 |
Total current liabilities | 2,876 | 3,096 |
Long-term debt | 5,315 | 5,289 |
Operating lease liabilities | 504 | |
Other liabilities | 2,233 | 2,300 |
Stockholders’ Equity | ||
Common stock, $.01 par value | 2 | 2 |
Additional paid-in capital | 714 | 419 |
Retained earnings | 1,051 | 1,051 |
Accumulated other comprehensive loss | (2,737) | (2,765) |
Total Motorola Solutions, Inc. stockholders’ equity (deficit) | (970) | (1,293) |
Non-controlling interests | 16 | 17 |
Total stockholders’ equity (deficit) | (954) | (1,276) |
Total liabilities and stockholders’ equity | $ 9,974 | $ 9,409 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 29, 2019 | Dec. 31, 2018 |
Stockholders’ Equity | ||
Common stock par value (in US$ per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock issued (in shares) | 165,700,000 | 164,000,000 |
Common stock outstanding (in shares) | 165,100,000 | 163,500,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock and Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interests |
Balance (in shares) at Dec. 31, 2017 | 161.6 | ||||
Balance at beginning of period at Dec. 31, 2017 | $ 353 | $ (2,562) | $ 467 | $ 15 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 117 | ||||
Other comprehensive income (loss) | 54 | ||||
Issuance of common stock and stock options exercised (in shares) | 1.7 | ||||
Issuance of common stock and stock options exercised | $ 53 | ||||
Share repurchase program (in shares) | (0.6) | ||||
Share repurchase program | (66) | ||||
Share-based compensation expense | $ 17 | ||||
Dividends declared | (84) | ||||
Balance (in shares) at Mar. 31, 2018 | 162.7 | ||||
Balance at end of period at Mar. 31, 2018 | $ 423 | (2,508) | 531 | 15 | |
Balance (in shares) at Dec. 31, 2017 | 161.6 | ||||
Balance at beginning of period at Dec. 31, 2017 | $ 353 | (2,562) | 467 | 15 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | $ 298 | ||||
Other comprehensive income (loss) | (18) | ||||
Dividends paid to non-controlling interest on subsidiary common stock | 1 | ||||
Balance (in shares) at Jun. 30, 2018 | 162.8 | ||||
Balance at end of period at Jun. 30, 2018 | $ 446 | (2,580) | 627 | 15 | |
Balance (in shares) at Mar. 31, 2018 | 162.7 | ||||
Balance at beginning of period at Mar. 31, 2018 | $ 423 | (2,508) | 531 | 15 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 181 | 180 | 1 | ||
Other comprehensive income (loss) | (72) | (72) | |||
Issuance of common stock and stock options exercised (in shares) | 0.1 | ||||
Issuance of common stock and stock options exercised | $ 6 | ||||
Share-based compensation expense | $ 17 | ||||
Dividends declared | (84) | ||||
Dividends paid to non-controlling interest on subsidiary common stock | (1) | ||||
Balance (in shares) at Jun. 30, 2018 | 162.8 | ||||
Balance at end of period at Jun. 30, 2018 | $ 446 | (2,580) | 627 | 15 | |
Balance (in shares) at Dec. 31, 2018 | 164 | ||||
Balance at beginning of period at Dec. 31, 2018 | (1,276) | $ 421 | (2,765) | 1,051 | 17 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 151 | 1 | |||
Other comprehensive income (loss) | 41 | ||||
Issuance of common stock and stock options exercised (in shares) | 1.2 | ||||
Issuance of common stock and stock options exercised | $ 45 | ||||
Share repurchase program (in shares) | (1.2) | ||||
Share repurchase program | (145) | ||||
Share-based compensation expense | $ 27 | ||||
Issuance of common stock for acquisition of Vaas (in shares) | 1.4 | ||||
Issuance of common stock for acquisition of VaaS | $ 160 | ||||
Dividends declared | (94) | ||||
Balance (in shares) at Mar. 30, 2019 | 165.4 | ||||
Balance at end of period at Mar. 30, 2019 | $ 653 | (2,724) | 963 | 18 | |
Balance (in shares) at Dec. 31, 2018 | 164 | ||||
Balance at beginning of period at Dec. 31, 2018 | (1,276) | $ 421 | (2,765) | 1,051 | 17 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 360 | ||||
Other comprehensive income (loss) | $ 28 | ||||
Share repurchase program (in shares) | (1.4) | ||||
Dividends paid to non-controlling interest on subsidiary common stock | $ 3 | ||||
Balance (in shares) at Jun. 29, 2019 | 165.7 | ||||
Balance at end of period at Jun. 29, 2019 | (954) | $ 716 | (2,737) | 1,051 | 16 |
Balance (in shares) at Mar. 30, 2019 | 165.4 | ||||
Balance at beginning of period at Mar. 30, 2019 | $ 653 | (2,724) | 963 | 18 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 208 | 207 | 1 | ||
Other comprehensive income (loss) | $ (13) | (13) | |||
Issuance of common stock and stock options exercised (in shares) | 0.5 | ||||
Issuance of common stock and stock options exercised | $ 33 | ||||
Share repurchase program (in shares) | (0.2) | (0.2) | |||
Share repurchase program | (25) | ||||
Share-based compensation expense | $ 30 | ||||
Dividends declared | (94) | ||||
Dividends paid to non-controlling interest on subsidiary common stock | (3) | ||||
Balance (in shares) at Jun. 29, 2019 | 165.7 | ||||
Balance at end of period at Jun. 29, 2019 | $ (954) | $ 716 | $ (2,737) | $ 1,051 | $ 16 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Stockholders' Equity Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 29, 2019 | Mar. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared (in USD per share) | $ 0.57 | $ 0.57 | $ 0.52 | $ 0.52 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Operating | ||
Net earnings attributable to Motorola Solutions, Inc. | $ 358 | $ 297 |
Earnings attributable to non-controlling interests | 2 | 1 |
Net earnings | 360 | 298 |
Adjustments to reconcile Net earnings to Net cash provided by (used for) operating activities: | ||
Depreciation and amortization | 191 | 178 |
Non-cash other charges | 4 | 6 |
Share-based compensation expense | 57 | 34 |
Gains on sales of investments and businesses, net | (4) | (10) |
Loss from the extinguishment of long term debt | 43 | 0 |
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | ||
Accounts receivable | 110 | 206 |
Inventories | (61) | 37 |
Other current assets and contract assets | 128 | 43 |
Accounts payable, accrued liabilities, and contract liabilities | (345) | (340) |
Other assets and liabilities | 2 | (558) |
Deferred income taxes | 17 | 31 |
Net cash provided by (used for) operating activities | 502 | (75) |
Investing | ||
Acquisitions and investments, net | (371) | (1,153) |
Proceeds from sales of investments and businesses, net | 10 | 79 |
Capital expenditures | (129) | (82) |
Net cash used for investing activities | (490) | (1,156) |
Financing | ||
Repayment of debt | (666) | (197) |
Net proceeds from issuance of debt | 645 | 1,295 |
Issuance of common stock | 70 | 59 |
Purchases of common stock | (170) | (66) |
Payments of dividends | (187) | (168) |
Payments of dividends to non-controlling interests | (3) | (1) |
Net cash provided by (used for) financing activities | (311) | 922 |
Effect of exchange rate changes on total cash and cash equivalents | 6 | (18) |
Net decrease in total cash and cash equivalents | (293) | (327) |
Total cash and cash equivalents, beginning of period | 1,257 | 1,268 |
Total cash and cash equivalents, end of period | 964 | 941 |
Cash paid during the period for: | ||
Interest, net | 112 | 93 |
Income and withholding taxes, net of refunds | $ 70 | $ 56 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements as of June 29, 2019 and for the three and six months ended June 29, 2019 and June 30, 2018 include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, Statements of Stockholders' Equity, and Statements of Cash Flows of Motorola Solutions, Inc. (“Motorola Solutions” or the “Company”) for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2018 . The results of operations for the three and six months ended June 29, 2019 are not necessarily indicative of the operating results to be expected for the full year. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Recent Acquisitions On July 11, 2019, the Company acquired WatchGuard, Inc. ("WatchGuard"), a provider of in-car and body-worn video solutions for $271 million , inclusive of share-based compensation withheld at a fair value of $16 million that will be expensed over an average service period of two years . The acquisition was settled with $250 million of cash, net of cash acquired. The acquisition expands the Company's video security solutions platform. On March 11, 2019, the Company announced that it acquired Avtec, Inc. ("Avtec"), a provider of dispatch communication equipment for U.S. public safety and commercial customers for a purchase price of $136 million in cash, net of cash acquired. This acquisition expands the Company's commercial portfolio with new capabilities, allowing it to offer an enhanced platform for customers to communicate, coordinate resources, and secure their facilities. On January 7, 2019, the Company announced that it acquired VaaS International Holdings ("VaaS"), a company that is a global provider of data and image analytics for vehicle location for $445 million , inclusive of share-based compensation withheld at a fair value of $38 million that will be expensed over an average service period of one year . The acquisition was settled with $231 million of cash, net of cash acquired, and 1.4 million of shares issued at a fair value of $160 million for a purchase price of $391 million . On March 28, 2018, the Company completed the acquisition of Avigilon Corporation ("Avigilon"), a provider of advanced security and video solutions including video analytics, network video management hardware and software, video cameras and access control solutions for a purchase price of $974 million in cash, net of cash acquired, debt assumed, and transaction costs paid. On March 7, 2018, the Company completed the acquisition of Plant Holdings, Inc. ("Plant"), the parent company of Airbus DS Communications for a purchase price of $237 million in cash, net of cash acquired. This acquisition expanded the Company's software portfolio in the command center with additional solutions for Next Generation 9-1-1. Recent Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) - Changes to the Disclosure Requirements for Defined Benefit Plans,” which modifies the disclosure requirements for the defined benefit pension plans and other postretirement plans. The ASU is effective for the Company on January 1, 2021 with early adoption permitted. The ASU requires a retrospective adoption method. The Company does not believe the ASU will have a material impact on its financial statement disclosures. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. In November 2018, April 2019 and May 2019, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” “ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, ” “Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” and “ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief,” which provided additional implementation guidance on the previously issued ASU. The ASU is effective for the Company on January 1, 2020. The ASU requires a modified retrospective adoption method. The Company is still evaluating the impact of adoption on its financial statements and disclosures. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases," which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This was subsequently amended by ASU No. 2018-01, “Land Easement Practical Expedient for Transition to Topic 842,” ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU No. 2018-11, “Targeted Improvements” (collectively "ASC 842"). ASC 842 establishes a right-of-use model ("ROU") that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with an initial term longer than twelve months. Leases will be classified as finance or operating, with classification affecting the pattern and presentation of expense recognition in the income statement. The Company adopted ASC 842 as of January 1, 2019 using a modified retrospective transition approach for all leases existing at January 1, 2019, the date of the initial application. Consequently, financial information will not be updated and disclosures required under ASC 842 will not be provided for dates and periods before January 1, 2019. ASC 842 provides for a number of optional practical expedients in transition. The Company elected the practical expedients, which permit the Company to not reassess prior conclusions about lease identification, lease classification and initial direct costs under ASC 842 . The Company did not elect the "use-of hindsight" practical expedient to determine the lease term or in assessing the likelihood that a lease purchase option will be exercised, allowing it to carry forward the lease term as determined prior to adoption of ASC 842. Finally, the Company also elected the practical expedient related to land easements, which enabled it to continue its accounting treatment for land easements on existing agreements as of January 1, 2019. ASC 842 also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. A short-term lease is one with a term of 12 months or less, including any optional periods that are reasonably certain of exercise. For those leases that qualify, the exemption allows the Company to not recognize ROU assets or lease liabilities, including not recognizing ROU assets or lease liabilities for existing short-term leases at transition. Short-term lease costs are recognized as rent expense on a straight-line basis over the lease term consistent with the Company’s prior accounting. The Company also elected the practical expedient to not separate lease and non-lease components for all current lease categories. As of January 1, 2019, the Company recognized operating lease liabilities of $648 million based on the present value of the remaining minimum rental payments determined under prior lease accounting standards and corresponding ROU assets of $588 million . The $ 60 million difference between operating lease liabilities and ROU assets recognized is due to deferred rent and exit cost accruals recorded under prior lease accounting standards. ASC 842 requires such balances to be reclassified against ROU assets at transition. For arrangements where the Company is the lessor, the adoption of ASC 842 did not have a material impact on its financial statements as the majority of its leases are operating leases embedded within managed services contracts. ASC 842 provides a practical expedient for lessors in which the lessor may elect, by class of underlying asset, to not separate non-lease components from the associated lease component and, instead, to account for these components as a single component if both of the following are met: (i) the timing and pattern of transfer of the non-lease component(s) and associated lease component are the same and (ii) the lease component, if accounted for separately, would be classified as an operating lease. The accounting under the practical expedient depends on which component(s) is predominant in the contract. If the non-lease component is predominant, the single component is accounted under ASC Topic 606 "Revenue from Contracts with Customers" and accounting and disclosure under ASC 842 is not applicable. The Company has elected the above practical expedient and determined that non-lease components are predominant and is accounting for the single components as managed service contracts under ASC Topic 606. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Disaggregation of Revenue The following table summarizes the disaggregation of our revenue by segment, geography, major product and service type and customer type for the three and six months ended June 29, 2019 and June 30, 2018 , consistent with the information reviewed by our chief operating decision maker for evaluating the financial performance of operating segments: Three Months Ended June 29, 2019 June 30, 2018 Products and Systems Integration Services and Software Products and Systems Integration Services and Software Regions: Americas $ 969 $ 378 $ 878 $ 331 EMEA 152 204 188 194 Asia Pacific 117 40 123 46 $ 1,238 $ 622 $ 1,189 $ 571 Major Products and Services: Devices $ 809 $ — $ 725 $ — Systems and Systems Integration 429 — 464 — Services — 469 — 456 Software — 153 — 115 $ 1,238 $ 622 $ 1,189 $ 571 Customer Type: Direct $ 771 $ 582 $ 740 $ 537 Indirect 467 40 449 34 $ 1,238 $ 622 $ 1,189 $ 571 Six Months Ended June 29, 2019 June 30, 2018 Products and Systems Integration Services and Software Products and Systems Integration Services and Software Regions: Americas $ 1,782 $ 730 $ 1,576 $ 627 EMEA 317 402 345 375 Asia Pacific 208 78 220 84 $ 2,307 $ 1,210 $ 2,141 $ 1,086 Major Products and Services: Devices $ 1,495 $ — $ 1,356 $ — Systems and Systems Integration 812 — 785 — Services — 921 — 902 Software — 289 — 184 $ 2,307 $ 1,210 $ 2,141 $ 1,086 Customer Type: Direct $ 1,429 $ 1,135 $ 1,357 $ 1,042 Indirect 878 75 784 44 $ 2,307 $ 1,210 $ 2,141 $ 1,086 Remaining Performance Obligations Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations that are unsatisfied, or partially unsatisfied, as of the end of a period. The transaction price associated with remaining performance obligations which are not yet satisfied as of June 29, 2019 is $7.3 billion . A total of $3.1 billion is from Products and Systems Integration performance obligations that are not yet satisfied, of which $1.7 billion is expected to be recognized in the next 12 months . The remaining amounts will generally be satisfied over time as systems are implemented. A total of $4.2 billion is from Services and Software performance obligations that are not yet satisfied as of June 29, 2019 . The determination of Services and Software performance obligations that are not satisfied takes into account a contract term that may be limited by the customer’s ability to terminate for convenience. Where termination for convenience exists in the Company's service contracts, its disclosure of the remaining performance obligations that are unsatisfied assumes the contract term is limited until renewal. The Company expects to recognize $1.2 billion from unsatisfied Services and Software performance obligations over the next 12 months , with the remaining performance obligations to be recognized over time as services are performed and software is implemented. Contract Balances June 29, 2019 December 31, 2018 Accounts receivable, net $ 1,206 $ 1,293 Contract assets 913 1,012 Contract liabilities 1,187 1,263 Non-current contract liabilities 263 214 Revenue recognized during the three months ended June 29, 2019 which was previously included in Contract liabilities as of March 30, 2019 is $340 million , compared to $365 million of revenue recognized during the three months ended June 30, 2018 which was previously included in Contract liabilities as of April 1, 2018. Revenue recognized during the six months ended June 29, 2019 which was previously included in Contract liabilities as of December 31, 2018 is $600 million , compared to $541 million of revenue recognized during the six months ended June 30, 2018 which was previously included in Contract liabilities as of January 1, 2018. Adjustments to revenue for the three and six months ended June 29, 2019 and June 30, 2018 driven by changes in the estimates of progress on system contracts was immaterial. There were no material impairment losses recognized on contract assets during the three and six months ended June 29, 2019 and June 30, 2018 . Contract Cost Balances June 29, 2019 December 31, 2018 Current contract cost assets $ 37 $ 30 Non-current contract cost assets 98 98 Amortization of contract cost assets was $11 million for the three months ended June 29, 2019 and June 30, 2018 , respectively, and $22 million and $23 million for the six months ended June 29, 2019 and June 30, 2018 , respectively. |
Leases
Leases | 6 Months Ended |
Jun. 29, 2019 | |
Leases [Abstract] | |
Operating Leases | Leases The Company leases certain office, factory and warehouse space, land, and other equipment, principally under non-cancelable operating leases. The Company determines if an arrangement is a lease at inception of the contract. The Company's key decisions in determining whether a contract is or contains a lease include establishing whether the supplier has the ability to use other assets to fulfill its service or whether the terms of the agreement enable the Company to control the use of a dedicated asset during the contract term. In the majority of the Company's contracts where it must identify whether a lease is present, it is readily determinable that the Company controls the use of the assets and obtains substantially all of the economic benefit during the term of the contract. In those contracts where identification is not readily determinable, the Company has determined that the supplier has either the ability to use another asset to provide the service or the terms of the contract give the supplier the rights to operate the asset at its discretion during the term of the contract. ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company's lease payments are typically fixed or contain fixed escalators. The Company has elected to not separate lease and non-lease components for all of its current lease categories and therefore, all consideration is included in the lease liabilities. For the Company's leases consisting of both land and other equipment (i.e. "communication network sites"), future payments are subject to variability due to changes in indices or rates. The Company values its ROU assets and lease liabilities based on the index or rate in effect at lease commencement. Future changes in the indices or rates are accounted for as variable lease costs. Other variable lease costs also include items that are not fixed at lease commencement including property taxes, insurance, and operating charges that vary based on usage. ROU assets also include lease payments made in advance and are net of lease incentives. As the majority of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rates based on the information available at the commencement date in determining the present value of future payments. The Company's incremental borrowing rates are based on the term of the lease, the economic environment of the lease, and the effect of collateralization. The Company's lease terms range from one to twenty-one years and may include options to extend the lease by one to ten years or terminate the lease after the initial non-cancelable term. The Company does not include options in the determination of the lease term for the majority of leases as sufficient economic factors do not exist that would compel it to continue to use the underlying asset beyond the initial non-cancelable term. However, for the Company's communication network site leases that are necessary to provide services to customers under managed service arrangements, the Company includes options in the lease term to the extent of the customer contracts to which those leases relate. The components of lease expense are as follows: June 29, 2019 Three Months Ended Six Months Ended Lease expense: Operating lease cost $ 33 $ 65 Finance lease cost Amortization of right-of-use assets 3 6 Interest on lease liabilities — 1 Total finance lease cost 3 7 Short-term lease cost 1 3 Variable cost 8 17 Sublease income (1 ) (2 ) Net lease expense $ 44 $ 90 Lease assets and liabilities consist of the following: Statement Line Classification June 29, 2019 Assets: Operating lease assets Operating lease assets $ 567 Finance lease assets Property, plant, and equipment, net 50 $ 617 Current liabilities: Operating lease liabilities Accrued liabilities $ 118 Finance lease liabilities Current portion of long-term debt 14 $ 132 Non-current liabilities: Operating lease liabilities Operating lease liabilities $ 504 Finance lease liabilities Long-term debt 22 $ 526 Other information related to leases is as follows: Six Months Ended June 29, 2019 Supplemental cash flow information: Net cash used for operating activities related to operating leases $ 80 Net cash used for operating activities related to finance leases 1 Net cash used for financing activities related to finance leases 8 Assets obtained in exchange for lease liabilities: Operating leases $ 45 June 29, 2019 Weighted average remaining lease terms (years): Operating leases 8 Finance leases 3 Weighted average discount rate: Operating leases 3.76 % Finance leases 4.97 % Future lease payments as of June 29, 2019 are as follows: Operating Leases Finance Leases Total 2019 $ 58 $ 8 $ 66 2020 136 14 150 2021 121 12 133 2022 105 5 110 2023 55 — 55 Thereafter 247 — 247 Total lease payments 722 39 761 Less: Interest 100 3 103 Present value of lease liabilities $ 622 $ 36 $ 658 Rental expense, net of sublease income, for the year ended December 31, 2018 was $108 million . At December 31, 2018, future minimum lease obligations, net of minimum sublease rentals, for the next five years and beyond were as follows: 2019 2020 2021 2022 2023 Beyond $ 131 $ 120 $ 112 $ 101 $ 54 $ 204 |
Finance Leases | Leases The Company leases certain office, factory and warehouse space, land, and other equipment, principally under non-cancelable operating leases. The Company determines if an arrangement is a lease at inception of the contract. The Company's key decisions in determining whether a contract is or contains a lease include establishing whether the supplier has the ability to use other assets to fulfill its service or whether the terms of the agreement enable the Company to control the use of a dedicated asset during the contract term. In the majority of the Company's contracts where it must identify whether a lease is present, it is readily determinable that the Company controls the use of the assets and obtains substantially all of the economic benefit during the term of the contract. In those contracts where identification is not readily determinable, the Company has determined that the supplier has either the ability to use another asset to provide the service or the terms of the contract give the supplier the rights to operate the asset at its discretion during the term of the contract. ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company's lease payments are typically fixed or contain fixed escalators. The Company has elected to not separate lease and non-lease components for all of its current lease categories and therefore, all consideration is included in the lease liabilities. For the Company's leases consisting of both land and other equipment (i.e. "communication network sites"), future payments are subject to variability due to changes in indices or rates. The Company values its ROU assets and lease liabilities based on the index or rate in effect at lease commencement. Future changes in the indices or rates are accounted for as variable lease costs. Other variable lease costs also include items that are not fixed at lease commencement including property taxes, insurance, and operating charges that vary based on usage. ROU assets also include lease payments made in advance and are net of lease incentives. As the majority of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rates based on the information available at the commencement date in determining the present value of future payments. The Company's incremental borrowing rates are based on the term of the lease, the economic environment of the lease, and the effect of collateralization. The Company's lease terms range from one to twenty-one years and may include options to extend the lease by one to ten years or terminate the lease after the initial non-cancelable term. The Company does not include options in the determination of the lease term for the majority of leases as sufficient economic factors do not exist that would compel it to continue to use the underlying asset beyond the initial non-cancelable term. However, for the Company's communication network site leases that are necessary to provide services to customers under managed service arrangements, the Company includes options in the lease term to the extent of the customer contracts to which those leases relate. The components of lease expense are as follows: June 29, 2019 Three Months Ended Six Months Ended Lease expense: Operating lease cost $ 33 $ 65 Finance lease cost Amortization of right-of-use assets 3 6 Interest on lease liabilities — 1 Total finance lease cost 3 7 Short-term lease cost 1 3 Variable cost 8 17 Sublease income (1 ) (2 ) Net lease expense $ 44 $ 90 Lease assets and liabilities consist of the following: Statement Line Classification June 29, 2019 Assets: Operating lease assets Operating lease assets $ 567 Finance lease assets Property, plant, and equipment, net 50 $ 617 Current liabilities: Operating lease liabilities Accrued liabilities $ 118 Finance lease liabilities Current portion of long-term debt 14 $ 132 Non-current liabilities: Operating lease liabilities Operating lease liabilities $ 504 Finance lease liabilities Long-term debt 22 $ 526 Other information related to leases is as follows: Six Months Ended June 29, 2019 Supplemental cash flow information: Net cash used for operating activities related to operating leases $ 80 Net cash used for operating activities related to finance leases 1 Net cash used for financing activities related to finance leases 8 Assets obtained in exchange for lease liabilities: Operating leases $ 45 June 29, 2019 Weighted average remaining lease terms (years): Operating leases 8 Finance leases 3 Weighted average discount rate: Operating leases 3.76 % Finance leases 4.97 % Future lease payments as of June 29, 2019 are as follows: Operating Leases Finance Leases Total 2019 $ 58 $ 8 $ 66 2020 136 14 150 2021 121 12 133 2022 105 5 110 2023 55 — 55 Thereafter 247 — 247 Total lease payments 722 39 761 Less: Interest 100 3 103 Present value of lease liabilities $ 622 $ 36 $ 658 Rental expense, net of sublease income, for the year ended December 31, 2018 was $108 million . At December 31, 2018, future minimum lease obligations, net of minimum sublease rentals, for the next five years and beyond were as follows: 2019 2020 2021 2022 2023 Beyond $ 131 $ 120 $ 112 $ 101 $ 54 $ 204 |
Other Financial Data
Other Financial Data | 6 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Financial Data | Other Financial Data Statements of Operations Information Other Charges (Income) Other charges (income) included in Operating earnings consist of the following: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Other charges: Intangibles amortization (Note 15) $ 52 $ 53 $ 102 $ 94 Reorganization of business (Note 14) 8 18 12 26 Legal settlements 1 — — 1 Acquisition-related transaction fees — — 2 17 $ 61 $ 71 $ 116 $ 138 During the six months ended June 29, 2019 , the Company recognized $2 million of acquisition-related transaction fees for the VaaS and Avtec acquisitions and $17 million for the Avigilon and Plant acquisitions during the six months ended June 30, 2018 . Other Income (Expense) Interest expense, net, and Other, both included in Other income (expense), consist of the following: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Interest income (expense), net: Interest expense $ (59 ) $ (63 ) $ (119 ) $ (117 ) Interest income 3 5 8 13 $ (56 ) $ (58 ) $ (111 ) $ (104 ) Other,net: Net periodic pension and postretirement benefit (Note 8) $ 17 $ 20 $ 33 $ 40 Loss from the extinguishment of long-term debt (Note 5) (43 ) — (43 ) — Investment impairments (3 ) — (11 ) — Foreign currency gain (loss) (7 ) 11 (11 ) — Loss on derivative instruments (3 ) (19 ) (7 ) (23 ) Gains on equity method investments — — 1 1 Fair value adjustments to equity investments 16 — 15 — Other 2 1 11 (2 ) $ (21 ) $ 13 $ (12 ) $ 16 During the three months ended June 29, 2019 , the Company recognized a foreign currency loss of $7 million , primarily driven by the Pakistani rupee, the Euro, and the Israeli Shekel, and a loss of $3 million on derivative instruments put in place to minimize the foreign exchange risk related to currency fluctuations. During the six months ended June 29, 2019 , the Company recognized a foreign currency loss of $11 million , primarily related to the British pound, Pakistani rupee, the Euro, and the Israeli Shekel, and a loss of $7 million on derivative instruments put in place to minimize the foreign exchange risk related to currency fluctuations. During the three months ended June 30, 2018 , the Company recognized a foreign currency gain of $11 million , primarily driven by the Euro and British pound, and a loss of $19 million on derivative instruments put in place to minimize the foreign exchange risk related to currency fluctuations. During the six months ended June 30, 2018 , the Company recognized a loss of $23 million on derivative instruments put in place to minimize the foreign exchange risk related to currency fluctuations, which included a loss of $14 million on foreign currency derivatives put in place to minimize the exposure to the Canadian dollar related to the acquisition of Avigilon. Earnings Per Common Share The computation of basic and diluted earnings per common share is as follows: Amounts attributable to Motorola Solutions, Inc. common stockholders Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Basic earnings per common share: Earnings $ 207 $ 180 $ 358 $ 297 Weighted average common shares outstanding 164.9 162.2 164.4 161.7 Per share amount $ 1.25 $ 1.11 $ 2.18 $ 1.83 Diluted earnings per common share: Earnings $ 207 $ 180 $ 358 $ 297 Weighted average common shares outstanding 164.9 162.2 164.4 161.7 Add effect of dilutive securities: Share-based awards 4.6 3.8 4.7 4.0 Senior Convertible Notes 6.6 5.7 6.2 5.4 Diluted weighted average common shares outstanding 176.1 171.7 175.3 171.1 Per share amount $ 1.18 $ 1.05 $ 2.04 $ 1.73 In the computation of diluted earnings per common share for the three and six months ended June 29, 2019 , the assumed exercise of 0.5 million options, including 0.3 million subject to market-based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the three months ended June 30, 2018 , the assumed exercise of 1.4 million options, including 1.2 million subject to market-based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the six months ended June 30, 2018 , the assumed exercise of 2.9 million options, including 2.4 million subject to market-based contingent stock agreements, were excluded because their inclusion would have been antidilutive. As of June 29, 2019 , the Company had $800 million of 2.0% Senior Convertible Notes outstanding which mature in September 2020 (the "Senior Convertible Notes"), and are fully convertible. In the event of a conversion, the Company intends to settle the principal amount of the Senior Convertible Notes in cash and accordingly, only the number of shares that would be issuable (under the treasury stock method of accounting for share dilution) are included in our computation of diluted earnings per share. The conversion price is adjusted for dividends declared through the date of settlement. Diluted earnings per share has been calculated based upon the amount by which the average stock price exceeds the conversion price. Balance Sheet Information Accounts Receivable, Net Accounts receivable, net, consists of the following: June 29, December 31, Accounts receivable $ 1,264 $ 1,344 Less allowance for doubtful accounts (58 ) (51 ) $ 1,206 $ 1,293 Inventories, Net Inventories, net, consist of the following: June 29, December 31, Finished goods $ 233 $ 206 Work-in-process and production materials 335 293 568 499 Less inventory reserves (144 ) (143 ) $ 424 $ 356 Other Current Assets Other current assets consist of the following: June 29, December 31, Current contract cost assets (Note 2) $ 37 $ 30 Tax-related deposits 106 138 Other 181 186 $ 324 $ 354 Property, Plant and Equipment, Net Property, plant and equipment, net, consists of the following: June 29, December 31, Land $ 10 $ 10 Leasehold improvements 377 362 Machinery and equipment 1,938 1,886 2,325 2,258 Less accumulated depreciation (1,385 ) (1,363 ) $ 940 $ 895 Depreciation expense for the three months ended June 29, 2019 and June 30, 2018 was $44 million and $43 million , respectively. Depreciation expense for the six months ended June 29, 2019 and June 30, 2018 was $89 million and $84 million , respectively. Investments Investments consist of the following: June 29, December 31, 2018 Corporate bonds $ — $ 1 Common stock 42 19 Strategic investments, at cost 40 62 Company-owned life insurance policies 76 75 Equity method investments 17 12 $ 175 $ 169 Strategic investments include investments in non-public technology-driven startup companies. Strategic investments do not have a readily determinable fair value and are recorded at cost, less any impairment, and adjusted for changes resulting from observable, orderly transactions for identical or similar securities. The Company did not recognize any significant adjustments to the recorded cost basis during the six months ended June 29, 2019 , with the exception of one company becoming publicly-traded during the second quarter, which required the investment to be reclassified to common stock. The Company’s common stock portfolio reflects investments in publicly-traded companies within the communications services sector and is valued utilizing active market prices for similar instruments. During the three and six months ended June 29, 2019 , the Company recognized $15 million and $14 million , respectively, in Other income (expense) related to an increase in the fair value of the investments. During the three months ended June 29, 2019 , Gains on the sale of investments and businesses, net were $3 million , related to the sale of a business, compared to losses of $1 million , related to the sale of various strategic investments during the three months ended June 30, 2018 . During the three months ended June 29, 2019 , the Company received $6 million in cash for the sale of $3 million of net assets related to a two-way communications rental business, resulting in the gain on the sale of a business of $3 million . During the six months ended June 29, 2019 , Gains on the sale of investments and businesses, net were $4 million , related to the sale of the two-way communications rental business and various equity method investments, compared to $10 million , related to the sale of various strategic and equity method investments during the six months ended June 30, 2018 . During the three months ended and six months ended June 29, 2019 , the Company recorded investment impairment charges of $3 million and $11 million , respectively, representing other-than-temporary declines in the value of the Company’s strategic investments portfolio. There were no investment impairments recorded during the three months ended and six months ended June 30, 2018 . Investment impairment charges are included in Other within Other income (expense) in the Company’s Condensed Consolidated Statements of Operations. Other Assets Other assets consist of the following: June 29, December 31, Defined benefit plan assets (Note 8) $ 163 $ 135 Tax receivable 39 39 Non-current contract cost assets (Note 2) 98 98 Other 64 72 $ 364 $ 344 Accrued Liabilities Accrued liabilities consist of the following: June 29, December 31, Compensation $ 224 $ 324 Tax liabilities 91 111 Dividend payable 94 93 Trade liabilities 146 185 Operating lease liabilities (Note 3) 118 — Other 444 497 $ 1,117 $ 1,210 Other Liabilities Other liabilities consist of the following: June 29, December 31, Defined benefit plans (Note 8) $ 1,509 $ 1,557 Non-current contract liabilities (Note 2) 263 214 Unrecognized tax benefits 52 51 Deferred income taxes 180 201 Other 229 277 $ 2,233 $ 2,300 Stockholders’ Equity Share Repurchase Program: During the three and six months ended June 29, 2019 , the Company paid an aggregate of $25 million and $170 million , including transaction costs, to repurchase approximately 0.2 million and 1.4 million shares at an average price of $146.65 and $122.31 per share, respectively. As of June 29, 2019 , the Company had used approximately $12.6 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving $1.4 billion of authority available for future repurchases. Payment of Dividends: During the three months ended June 29, 2019 and June 30, 2018 , the Company paid $94 million and $84 million , respectively, in cash dividends to holders of its common stock. During the six months ended June 29, 2019 and June 30, 2018 , the Company paid $187 million and $168 million , respectively, in cash dividends to holders of its common stock. Accumulated Other Comprehensive Loss The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the Condensed Consolidated Statements of Operations during the three and six months ended June 29, 2019 and June 30, 2018 : Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Foreign Currency Translation Adjustments: Balance at beginning of period $ (414 ) $ (305 ) $ (444 ) $ (353 ) Other comprehensive income (loss) before reclassification adjustment (24 ) (81 ) 10 (30 ) Tax benefit (expense) 1 (5 ) (3 ) (8 ) Other comprehensive income (loss), net of tax (23 ) (86 ) 7 (38 ) Balance at end of period $ (437 ) $ (391 ) $ (437 ) $ (391 ) Available-for-Sale Securities: Balance at beginning of period $ — $ — $ — $ 6 Reclassification adjustment into Gains on sales of investments and businesses, net — — — (8 ) Tax benefit — — — 2 Other comprehensive loss, net of tax — — — (6 ) Balance at end of period $ — $ — $ — $ — Defined Benefit Plans: Balance at beginning of period $ (2,310 ) $ (2,203 ) $ (2,321 ) $ (2,215 ) Reclassification adjustment - Actuarial net losses into Other income (expense) 17 18 33 36 Reclassification adjustment - Prior service benefits into Other income (expense) (4 ) (4 ) (7 ) (7 ) Tax expense (3 ) — (5 ) (3 ) Other comprehensive income, net of tax 10 14 21 26 Balance at end of period $ (2,300 ) $ (2,189 ) $ (2,300 ) $ (2,189 ) Total Accumulated other comprehensive loss $ (2,737 ) $ (2,580 ) $ (2,737 ) $ (2,580 ) |
Debt and Credit Facilities
Debt and Credit Facilities | 6 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | Debt and Credit Facilities June 29, December 31, 2.0% Senior Convertible Notes due 2020 $ 800 $ 800 Term Loan due 2021 399 399 3.5% senior notes due 2021 149 397 3.75% senior notes due 2022 550 748 3.5% senior notes due 2023 596 596 4.0% senior notes due 2024 592 591 6.5% debentures due 2025 72 118 7.5% debentures due 2025 254 346 4.6% senior notes due 2028 690 690 6.5% debentures due 2028 24 36 4.6% senior notes due 2029 645 — 6.625% senior notes due 2037 37 54 5.5% senior notes due 2044 396 396 5.22% debentures due 2097 91 91 Other long-term debt 52 62 5,347 5,324 Adjustments for unamortized gains on interest rate swap terminations (4 ) (4 ) Less: current portion (28 ) (31 ) Long-term debt $ 5,315 $ 5,289 As of June 29, 2019 , the Company had a $2.2 billion syndicated, unsecured revolving credit facility scheduled to mature in April 2022 (the " 2017 Motorola Solutions Credit Agreement "). The 2017 Motorola Solutions Credit Agreement includes a $500 million letter of credit sub-limit with $450 million of fronting commitments. Borrowings under the facility bear interest at the prime rate plus the applicable margin, or at a spread above the London Interbank Offered Rate ("LIBOR"), at the Company's option. An annual facility fee is payable on the undrawn amount of the credit line. The interest rate and facility fee are subject to adjustment if the Company's credit rating changes. The Company must comply with certain customary covenants including a maximum leverage ratio, as defined in the 2017 Motorola Solutions Credit Agreement . The Company was in compliance with its financial covenants as of June 29, 2019 . During the first quarter of 2018, the Company borrowed $400 million to facilitate the Avigilon acquisition which was re-paid by December 31, 2018 . There were no borrowings outstanding or letters of credit issued under the revolving credit facility as of December 31, 2018 and June 29, 2019 . In February of 2018, the Company issued $500 million of 4.60% Senior notes due 2028. The Company recognized net proceeds of $497 million after debt issuance costs and debt discounts. These proceeds were then used to make a $500 million contribution to the Company's U.S. pension plan. During the second half of 2018, the Company issued an additional $200 million on the outstanding notes. The Company recognized net proceeds of $196 million after debt issuance costs and debt discounts. In conjunction with the Avigilon acquisition in the first quarter of 2018, the Company entered into a term loan for $400 million with a maturity date of March 26, 2021 (the “Term Loan”). Interest on the Term Loan is variable, indexed to LIBOR, and paid monthly. The weighted average borrowing rate for amounts outstanding during the three and six months ended June 29, 2019 were 3.72% and 3.74% , respectively. No additional borrowings are permitted and amounts borrowed and repaid or prepaid may not be re-borrowed. In May of 2019, the Company issued $650 million of 4.60% Senior notes due 2029. The Company recognized net proceeds of $645 million after debt issuance costs and debt discounts. These proceeds were then used to fund a tender offer which resulted in the repurchase of $614 million in principal amount of its outstanding long-term debt for a purchase price of $654 million , excluding approximately $3 million of accrued interest, all of which occurred during the three months ended June 29, 2019. After accelerating the amortization of debt issuance costs and debt discounts, the Company recognized a loss of approximately $43 million related to this debt tender in Other within Other income (expense) in the Condensed Consolidated Statements of Operations. As of June 29, 2019 , the Company had $800 million of 2.0% Senior Convertible Notes outstanding with Silver Lake Partners which mature in September 2020 and are fully convertible. The notes are convertible based on a conversion rate of 14.8968, as may be adjusted for dividends declared, per $1,000 principal amount (which is currently equal to a conversion price of $67.13 per share). The exercise price adjusts automatically for dividends. The value by which the Senior Convertible Notes exceeded their principal amount if converted as of June 29, 2019 was $ 1.1 billion |
Risk Management
Risk Management | 6 Months Ended |
Jun. 29, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management | Risk Management Foreign Currency Risk As of June 29, 2019 , the Company had outstanding foreign exchange contracts with notional amounts totaling $1.0 billion , compared to $819 million outstanding at December 31, 2018 . The Company does not believe these financial instruments should subject it to undue risk due to foreign exchange movements because gains and losses on these contracts should generally offset gains and losses on the underlying assets, liabilities and transactions. The following table shows the five largest net notional amounts of the positions to buy or sell foreign currency as of June 29, 2019 , and the corresponding positions as of December 31, 2018 : Notional Amount Net Buy (Sell) by Currency June 29, December 31, Euro $ 155 $ 89 British pound 46 139 Canadian dollar 42 (39 ) Australian dollar (107 ) (105 ) Chinese renminbi (55 ) (55 ) Counterparty Risk The use of derivative financial instruments exposes the Company to counterparty credit risk in the event of non-performance by counterparties. However, the Company’s risk is limited to the fair value of the instruments when the derivative is in an asset position. The Company actively monitors its exposure to credit risk. As of June 29, 2019 , all of the counterparties have investment grade credit ratings. As of June 29, 2019 , the Company had $12 million of exposure to aggregate credit risk with all counterparties. The following tables summarize the fair values and locations in the Condensed Consolidated Balance Sheets of all derivative financial instruments held by the Company as of June 29, 2019 and December 31, 2018 : Fair Values of Derivative Instruments June 29, 2019 Other Current Assets Accrued Liabilities Derivatives designated as hedging instruments: Foreign exchange contracts $ 8 $ — Derivatives not designated as hedging instruments: Foreign exchange contracts $ 4 $ 3 Total derivatives $ 12 $ 3 Fair Values of Derivative Instruments December 31, 2018 Other Current Assets Accrued Liabilities Derivatives not designated as hedging instruments: Foreign exchange contracts $ 5 $ 4 The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three and six months ended June 29, 2019 and June 30, 2018 : Three Months Ended Six Months Ended Financial Statement Location Foreign Exchange Contracts June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Effective portion $ 6 $ 5 $ 8 $ 2 Accumulated other Forward points recognized 2 — 3 — Other income Undesignated derivatives recognized (3 ) (19 ) (7 ) (23 ) Other expense Net Investment Hedges The Company uses foreign exchange forward contracts with contract terms of 12 to 15 months to hedge against the effect of the British pound and the Euro exchange rate fluctuations against the U.S. dollar on a portion of its net investment in certain European operations. The Company recognizes changes in the fair value of the net investment hedges as a component of foreign currency translation adjustments within other comprehensive income to offset a portion of the change in translated value of the net investment being hedged, until the investment is sold or liquidated. In accordance with ASU 2017-02, the Company has elected to exclude the difference between the spot rate and the forward rate of the forward contract from its assessment of hedge effectiveness. The effect of the excluded components will be amortized on a straight line basis and recognized through interest expense. As of June 29, 2019 , the Company had €95 million of net investment hedges in certain Euro functional subsidiaries and £100 million of net investment hedges in certain British pound functional subsidiaries. During the three and six months ended June 29, 2019 , the Company amortized $2 million and $3 million , respectively, of income from the excluded components through interest expense. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At the end of each interim reporting period, the Company makes an estimate of its annual effective income tax rate. Tax expense in interim periods is calculated at the estimated annual effective tax rate plus or minus the tax effects of items of income and expense that are discrete to the period. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods. The following table provides details of income taxes: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Net earnings before income taxes $ 275 $ 227 $ 460 $ 367 Income tax expense 67 46 100 69 Effective tax rate 24 % 20 % 22 % 19 % During the three and six months ended June 29, 2019 , the Company recorded $67 million and $100 million of net tax expense, resulting in effective tax rates of 24% and 22% , respectively. During the three and six months ended June 30, 2018 , the Company recorded $46 million and $69 million of net tax expense, resulting in effective tax rates of 20% and 19% , respectively. The three and six months ended June 29, 2019 effective tax rates include state tax expense, offset by excess tax benefits on share-based compensation. The effective tax rates for the three and six months ended June 29, 2019 of 24% and 22% , respectively, is higher than the effective tax rates for the three and six months ended June 30, 2018 of 20% and 19% |
Retirement and Other Employee B
Retirement and Other Employee Benefits | 6 Months Ended |
Jun. 29, 2019 | |
Retirement Benefits [Abstract] | |
Retirement and Other Employee Benefits | Retirement and Other Employee Benefits Pension and Postretirement Health Care Benefits Plans The net periodic benefits for Pension and Postretirement Health Care Benefits Plans were as follows: U.S. Pension Benefit Plans Non-U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Service cost $ — $ — $ 1 $ 1 $ — $ — Interest cost 51 46 10 10 1 1 Expected return on plan assets (69 ) (68 ) (21 ) (24 ) (3 ) (3 ) Amortization of: Unrecognized net loss 12 14 4 3 1 1 Unrecognized prior service benefit — — — — (4 ) (4 ) Net periodic pension benefits $ (6 ) $ (8 ) $ (6 ) $ (10 ) $ (5 ) $ (5 ) U.S. Pension Benefit Plans Non-U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Six Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Service cost $ — $ — $ 2 $ 2 $ — $ — Interest cost 102 92 20 20 1 1 Expected return on plan assets (138 ) (136 ) (42 ) (48 ) (5 ) (5 ) Amortization of: Unrecognized net loss 23 28 8 6 2 2 Unrecognized prior service benefit — — — — (7 ) (7 ) Net periodic pension benefits $ (13 ) $ (16 ) $ (12 ) $ (20 ) $ (9 ) $ (9 ) |
Share-Based Compensation Plans
Share-Based Compensation Plans | 6 Months Ended |
Jun. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans Compensation expense for the Company’s share-based plans was as follows: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Share-based compensation expense included in: Costs of sales $ 3 $ 2 $ 7 $ 5 Selling, general and administrative expenses 15 11 31 21 Research and development expenditures 12 4 19 8 Share-based compensation expense included in Operating earnings 30 17 57 34 Tax benefit (5 ) (4 ) (10 ) (8 ) Share-based compensation expense, net of tax $ 25 $ 13 $ 47 $ 26 Decrease in basic earnings per share $ (0.15 ) $ (0.08 ) $ (0.29 ) $ (0.16 ) Decrease in diluted earnings per share $ (0.14 ) $ (0.08 ) $ (0.27 ) $ (0.15 ) During the six months ended June 29, 2019 , the Company granted 0.5 million restricted stock units ("RSUs") and 0.1 million market stock units ("MSUs") with an aggregate grant-date fair value of $64 million and $7 million , respectively, and 0.2 million stock options and 0.2 million performance options ("POs") with an aggregate grant-date fair value of $6 million and $7 million , respectively. The share-based compensation expense will generally be recognized over the vesting period of three years. During the six months ended June 29, 2019 , the Company granted an additional 0.4 million of restricted stock in connection with the acquisition of VaaS, with an aggregate grant-date fair value of $38 million related to compensation withheld from the purchase price that will be expensed over an average service period of one year. During the three months ended June 29, 2019 , the Company approved the grant of performance stock units ("PSUs") as a portion of the Long Range Incentive Plan ("LRIP") awards issued to certain Company executive officers with an aggregate grant-date fair value of $5.5 million . The 2019 PSUs have a three-year performance period and were granted at a target number of units subject to adjustment based on company performance. The number of PSUs earned will be based on the actual total shareholder return ("TSR") compared to the S&P 500 over the three-year performance period. The Company calculates the value of each PSU using the Monte Carlo simulation, estimated on the date of grant. Each PSU was granted with a fair value of $203.61 . The following assumptions were used for the calculations. 2019 PSUs Expected volatility of common stock 20.6 % Expected volatility of the S&P 500 25.0 % Risk-free interest rate 2.2 % Dividend yield 1.6 % Subsequent to the six months ended June 29, 2019 , the Company granted restricted stock and restricted stock units in connection with the acquisition of WatchGuard for an aggregate grant date fair value of $16 million that will be expensed over an average service period of two years. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company holds certain fixed income securities, equity securities and derivatives, which are recognized and disclosed at fair value in the financial statements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date and is measured using the fair value hierarchy. This hierarchy prescribes valuation techniques based on whether the inputs to each measurement are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's assumptions about current market conditions. The prescribed fair value hierarchy and related valuation methodologies are as follows: Level 1 — Quoted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations, in which all significant inputs are observable, in active markets. Level 3 — Valuations derived from valuation techniques, in which one or more significant inputs are unobservable. The fair values of the Company’s financial assets and liabilities by level in the fair value hierarchy as of June 29, 2019 and December 31, 2018 were as follows: June 29, 2019 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 12 $ 12 Common stock 42 — 42 Liabilities: Foreign exchange derivative contracts $ — $ 3 $ 3 December 31, 2018 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 5 $ 5 Corporate bonds 1 — 1 Common stock 19 — 19 Liabilities: Foreign exchange derivative contracts $ — $ 4 $ 4 The Company had no Level 3 holdings as of June 29, 2019 or December 31, 2018 . At June 29, 2019 and December 31, 2018 , the Company had $419 million and $734 million , respectively, of investments in money market prime and government funds (Level 1) classified as Cash and cash equivalents in its Condensed Consolidated Balance Sheets. The money market funds had quoted market prices that are equivalent to par. Using quoted market prices and market interest rates, the Company determined that the fair value of long-term debt at June 29, 2019 and December 31, 2018 was $5.6 billion and $5.4 billion (Level 2), respectively. All other financial instruments are carried at cost, which is not materially different from the instruments’ fair values. |
Long-term Financing and Sales o
Long-term Financing and Sales of Receivables | 6 Months Ended |
Jun. 29, 2019 | |
Receivables [Abstract] | |
Long-term Financing and Sales of Receivables | Long-term Financing and Sales of Receivables Long-term Financing Long-term receivables consist of receivables with payment terms greater than twelve months and long-term loans. Long-term receivables consist of the following: June 29, December 31, Long-term receivables, gross $ 28 $ 33 Less allowance for losses (2 ) (2 ) Long-term receivables 26 31 Less current portion (10 ) (7 ) Non-current long-term receivables $ 16 $ 24 The current portion of long-term receivables is included in Accounts receivable, net and the non-current portion of long-term receivables is included in Other assets in the Company’s Condensed Consolidated Balance Sheets. The Company had outstanding commitments to provide long-term financing to third parties totaling $53 million at June 29, 2019 , compared to $62 million at December 31, 2018 . Sales of Receivables The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three and six months ended June 29, 2019 and June 30, 2018 : Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Accounts receivable sales proceeds $ 3 $ 22 $ 27 $ 76 Long-term receivables sales proceeds 55 15 76 28 Total proceeds from receivable sales $ 58 $ 37 $ 103 $ 104 At June 29, 2019 , the Company had retained servicing obligations for $971 million of long-term receivables, compared to $970 million at December 31, 2018 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters The Company is a defendant in various lawsuits, claims, and actions, which arise in the normal course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's condensed consolidated financial position, liquidity, or results of operations. However, an unfavorable resolution could have a material adverse effect on the Company's condensed consolidated financial position, liquidity, or results of operations in the periods in which the matters are ultimately resolved, or in the periods in which more information is obtained that changes management's opinion of the ultimate disposition. Other Indemnifications The Company is a party to a variety of agreements pursuant to which it is obligated to indemnify the other party with respect to certain matters. In indemnification cases, payment by the Company is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, which procedures typically allow the Company to challenge the other party's claims. In some instances, the Company may have recourse against third parties for certain payments made by the Company. Some of these obligations arise as a result of divestitures of the Company's assets or businesses and require the Company to indemnify the other party against losses arising from breaches of representations and warranties and covenants and, in some cases, the settlement of pending obligations. The Company's obligations under divestiture agreements for indemnification based on breaches of representations and warranties are generally limited in terms of duration and to amounts not in excess of a percentage of the contract value. The Company had no accruals for any such obligations at June 29, 2019 . In addition, the Company may provide indemnifications for losses that result from the breach of general warranties contained in certain commercial and intellectual property agreements. Historically, the Company has not made significant payments under these agreements. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The following table summarizes Net sales by segment: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Products and Systems Integration $ 1,238 $ 1,189 $ 2,307 $ 2,141 Services and Software 622 571 1,210 1,086 $ 1,860 $ 1,760 $ 3,517 $ 3,227 The following table summarizes the Operating earnings by segment: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Products and Systems Integration $ 201 $ 175 $ 310 $ 265 Services and Software 148 98 269 180 Operating earnings 349 273 579 445 Total other expense (74 ) (46 ) (119 ) (78 ) Earnings before income taxes $ 275 $ 227 $ 460 $ 367 |
Reorganization of Business
Reorganization of Business | 6 Months Ended |
Jun. 29, 2019 | |
Restructuring and Related Activities [Abstract] | |
Reorganization of Business | Reorganization of Business 2019 Charges During the three months ended June 29, 2019 , the Company recorded net reorganization of business charges of $12 million including $8 million of charges in Other charges and $4 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $12 million were charges of $18 million related to employee separation, partially offset by $6 million of reversals for accruals no longer needed. During the six months ended June 29, 2019 , the Company recorded net reorganization of business charges of $20 million including $12 million of charges in Other charges and $8 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $20 million were charges of $30 million related to employee separation, partially offset by $10 million of reversals for accruals no longer needed. The following table displays the net charges incurred by segment: June 29, 2019 Three Months Ended Six Months Ended Products and Systems Integration $ 9 $ 16 Services and Software 3 4 $ 12 $ 20 The following table displays a rollforward of the reorganization of business accruals established for employee separation costs from January 1, 2019 to June 29, 2019 : January 1, 2019 Additional Charges Adjustments Amount Used June 29, 2019 Employee separation costs $ 84 $ 30 $ (10 ) $ (28 ) $ 76 Employee Separation Costs At January 1, 2019 , the Company had an accrual of $84 million for employee separation costs. The 2019 additional charges of $30 million represent severance costs for approximately 300 employees. The adjustment of $10 million reflects reversals for accruals no longer needed. The $28 million used reflects cash payments to severed employees. The remaining accrual of $76 million , which is included in Accrued liabilities in the Company’s Condensed Consolidated Balance Sheets at June 29, 2019 , is expected to be paid, primarily within one year, to approximately 900 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments. As of January 1, 2019, accruals for exit costs are included in Operating lease liabilities with an offsetting impairment to the Company's ROU assets; all within its Condensed Consolidated Balance Sheets (see Note 3). 2018 Charges During the three months ended June 30, 2018 , the Company recorded net reorganization of business charges of $25 million including $18 million of charges in Other charges and $7 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $25 million were charges of $27 million related to employee separation costs and $1 million related to exit costs, partially offset by $3 million of reversals for accruals no longer needed. During the six months ended June 30, 2018 , the Company recorded net reorganization of business charges of $38 million including $26 million of charges in Other charges and $12 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $38 million were charges of $49 million related to employee separation costs and $3 million related to exit costs, partially offset by $14 million of reversals for accruals no longer needed. The following table displays the net charges incurred by segment: June 30, 2018 Three Months Ended Six Months Ended Products and Systems Integration $ 19 $ 28 Services and Software 6 10 $ 25 $ 38 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill The Company accounts for acquisitions using purchase accounting with the results of operations for each acquiree included in the Company's condensed consolidated financial statements for the period subsequent to the date of acquisition. Recent Acquisitions On July 11, 2019, the Company acquired WatchGuard, Inc. ("WatchGuard"), a provider of in-car and body-worn video solutions for $271 million , inclusive of share-based compensation withheld at a fair value of $16 million that will be expensed over an average service period of two years . The acquisition was settled with $250 million , net of cash acquired. The acquisition expands the Company's video security solutions platform. The business will be part of both the Products and Systems Integration and Services and Software segments. The purchase accounting for this acquisition will commence in the third quarter of 2019. On March 11, 2019, the Company announced that it acquired Avtec, Inc. ("Avtec"), a provider of dispatch communication equipment for U.S. public safety and commercial customers for a purchase price of $136 million in cash, net of cash acquired. This acquisition expands the Company's commercial portfolio with new capabilities, allowing it to offer an enhanced platform for customers to communicate, coordinate resources, and secure their facilities. The business will be part of both the Products and Systems Integration and Services and Software segments. The Company recognized $68 million of goodwill, $64 million of identifiable intangible assets, and $4 million of net assets. The goodwill is deductible for tax purposes. The identifiable intangible assets were classified as $43 million of completed technology and $21 million of customer relationship intangibles and will be amortized over a period of 15 years . The purchase accounting is not yet complete and as such the final allocation between goodwill and net assets may be subject to change based on the finalization of working capital considerations. On January 7, 2019, the Company announced that it acquired VaaS International Holdings ("VaaS"), a company that is a global provider of data and image analytics for vehicle location for $445 million , inclusive of share-based compensation withheld at a fair value of $38 million that will be expensed over an average service period of one year . The acquisition was settled with $231 million of cash, net of cash acquired, and 1.4 million of shares issued at a fair value of $160 million for a purchase price of $391 million to be utilized in the purchase price allocation. The business will be part of both the Products and Systems Integration and Services and Software segments. The Company recognized $261 million of goodwill, $141 million of identifiable intangible assets, and $11 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $99 million of completed technology that will be amortized over a period of ten years and $42 million of customer relationship intangibles that will be amortized over a period of 15 years . The purchase accounting is not yet complete and as such the final allocation between deferred income tax accounts, goodwill, and net liabilities may be subject to change based on the settlement of working capital considerations. On March 28, 2018, the Company completed the acquisition of Avigilon Corporation , a provider of advanced security and video solutions including video analytics, network video management hardware and software, video cameras and access control solutions. The purchase price of $974 million , consisted of cash payments of $980 million for outstanding common stock, restricted stock units and employee held stock options, net of cash acquired of $107 million , debt assumed of $75 million and transaction costs of $26 million . Prior to the end of the first quarter of 2018, $35 million of the assumed debt was repaid with the remaining $40 million repaid during the second quarter of 2018. The Company recognized $498 million of identifiable intangible assets, $434 million of goodwill, and $42 million of net assets. Acquired intangible assets consist of $110 million of customer relationships, $380 million of developed technology and $8 million of trade names and will have useful lives of two to twenty years . The fair values of all intangible assets were estimated using the income approach. Customer relationships and developed technology were valued under the excess earnings method which assumes that the value of an intangible asset is equal to the present value of the incremental after-tax cash flows attributable specifically to the intangible asset. Trade names were valued under the relief from royalty method, which assumes value to the extent that the acquired company is relieved of the obligation to pay royalties for the benefits received from them. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. The goodwill is not deductible for tax purposes. On March 7, 2018, the Company completed the acquisition of Plant Holdings, Inc., the parent company of Airbus DS Communications for a purchase price of $237 million in cash, net cash acquired. This acquisition expanded the Company's software portfolio in the command center with additional solutions for Next Generation 9-1-1. The Company recognized $160 million of goodwill, $80 million of identifiable intangible assets, and $3 million of net liabilities. The goodwill is no t deductible for tax purposes. The identifiable intangible assets were classified as $41 million of customer-related intangibles, $27 million of completed technology and $12 million of trade names. The identifiable intangible assets will be amortized over a period of ten to twenty years . The pro forma effects of these acquisitions are not significant. Any devices from these acquisitions are included within the Products and Systems Integration segment and services and software offerings from these acquisitions are included in the Services and Software segment. Intangible Assets Amortized intangible assets were comprised of the following: June 29, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Completed technology $ 701 $ 119 $ 558 $ 92 Customer-related 1,147 434 1,085 364 Other intangibles 76 39 76 33 $ 1,924 $ 592 $ 1,719 $ 489 Amortization expense on intangible assets was $52 million for the three months ended June 29, 2019 and $102 million for the six months ended June 29, 2019 . Amortization expense on intangible assets was $53 million for the three months ended June 30, 2018 and $94 million for the six months ended June 30, 2018 . As of June 29, 2019 , annual amortization expense is estimated to be $204 million in 2019 , $200 million 2020 , $198 million in 2021 , $195 million in 2022 , $98 million in 2023 , and $73 million in 2024 . Amortized intangible assets were comprised of the following by segment: June 29, 2019 December 31, 2018 Gross Accumulated Gross Accumulated Products and Systems Integration $ 610 $ 59 $ 510 $ 38 Services and Software 1,314 533 1,209 451 $ 1,924 $ 592 $ 1,719 $ 489 Goodwill The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2019 to June 29, 2019 : Products and Systems Integration Services and Software Total Balance as of January 1, 2019 $ 722 $ 792 $ 1,514 Goodwill acquired 146 183 329 Purchase accounting adjustments — 9 9 Balance as of June 29, 2019 $ 868 $ 984 $ 1,852 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The condensed consolidated financial statements as of June 29, 2019 and for the three and six months ended June 29, 2019 and June 30, 2018 include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, Statements of Stockholders' Equity, and Statements of Cash Flows of Motorola Solutions, Inc. (“Motorola Solutions” or the “Company”) for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2018 . The results of operations for the three and six months ended June 29, 2019 are not necessarily indicative of the operating results to be expected for the full year. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) - Changes to the Disclosure Requirements for Defined Benefit Plans,” which modifies the disclosure requirements for the defined benefit pension plans and other postretirement plans. The ASU is effective for the Company on January 1, 2021 with early adoption permitted. The ASU requires a retrospective adoption method. The Company does not believe the ASU will have a material impact on its financial statement disclosures. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. In November 2018, April 2019 and May 2019, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” “ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, ” “Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” and “ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief,” which provided additional implementation guidance on the previously issued ASU. The ASU is effective for the Company on January 1, 2020. The ASU requires a modified retrospective adoption method. The Company is still evaluating the impact of adoption on its financial statements and disclosures. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases," which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This was subsequently amended by ASU No. 2018-01, “Land Easement Practical Expedient for Transition to Topic 842,” ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU No. 2018-11, “Targeted Improvements” (collectively "ASC 842"). ASC 842 establishes a right-of-use model ("ROU") that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with an initial term longer than twelve months. Leases will be classified as finance or operating, with classification affecting the pattern and presentation of expense recognition in the income statement. The Company adopted ASC 842 as of January 1, 2019 using a modified retrospective transition approach for all leases existing at January 1, 2019, the date of the initial application. Consequently, financial information will not be updated and disclosures required under ASC 842 will not be provided for dates and periods before January 1, 2019. ASC 842 provides for a number of optional practical expedients in transition. The Company elected the practical expedients, which permit the Company to not reassess prior conclusions about lease identification, lease classification and initial direct costs under ASC 842 . The Company did not elect the "use-of hindsight" practical expedient to determine the lease term or in assessing the likelihood that a lease purchase option will be exercised, allowing it to carry forward the lease term as determined prior to adoption of ASC 842. Finally, the Company also elected the practical expedient related to land easements, which enabled it to continue its accounting treatment for land easements on existing agreements as of January 1, 2019. ASC 842 also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. A short-term lease is one with a term of 12 months or less, including any optional periods that are reasonably certain of exercise. For those leases that qualify, the exemption allows the Company to not recognize ROU assets or lease liabilities, including not recognizing ROU assets or lease liabilities for existing short-term leases at transition. Short-term lease costs are recognized as rent expense on a straight-line basis over the lease term consistent with the Company’s prior accounting. The Company also elected the practical expedient to not separate lease and non-lease components for all current lease categories. As of January 1, 2019, the Company recognized operating lease liabilities of $648 million based on the present value of the remaining minimum rental payments determined under prior lease accounting standards and corresponding ROU assets of $588 million . The $ 60 million difference between operating lease liabilities and ROU assets recognized is due to deferred rent and exit cost accruals recorded under prior lease accounting standards. ASC 842 requires such balances to be reclassified against ROU assets at transition. For arrangements where the Company is the lessor, the adoption of ASC 842 did not have a material impact on its financial statements as the majority of its leases are operating leases embedded within managed services contracts. ASC 842 provides a practical expedient for lessors in which the lessor may elect, by class of underlying asset, to not separate non-lease components from the associated lease component and, instead, to account for these components as a single component if both of the following are met: (i) the timing and pattern of transfer of the non-lease component(s) and associated lease component are the same and (ii) the lease component, if accounted for separately, would be classified as an operating lease. The accounting under the practical expedient depends on which component(s) is predominant in the contract. If the non-lease component is predominant, the single component is accounted under ASC Topic 606 "Revenue from Contracts with Customers" and accounting and disclosure under ASC 842 is not applicable. The Company has elected the above practical expedient and determined that non-lease components are predominant and is accounting for the single components as managed service contracts under ASC Topic 606. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes the disaggregation of our revenue by segment, geography, major product and service type and customer type for the three and six months ended June 29, 2019 and June 30, 2018 , consistent with the information reviewed by our chief operating decision maker for evaluating the financial performance of operating segments: Three Months Ended June 29, 2019 June 30, 2018 Products and Systems Integration Services and Software Products and Systems Integration Services and Software Regions: Americas $ 969 $ 378 $ 878 $ 331 EMEA 152 204 188 194 Asia Pacific 117 40 123 46 $ 1,238 $ 622 $ 1,189 $ 571 Major Products and Services: Devices $ 809 $ — $ 725 $ — Systems and Systems Integration 429 — 464 — Services — 469 — 456 Software — 153 — 115 $ 1,238 $ 622 $ 1,189 $ 571 Customer Type: Direct $ 771 $ 582 $ 740 $ 537 Indirect 467 40 449 34 $ 1,238 $ 622 $ 1,189 $ 571 Six Months Ended June 29, 2019 June 30, 2018 Products and Systems Integration Services and Software Products and Systems Integration Services and Software Regions: Americas $ 1,782 $ 730 $ 1,576 $ 627 EMEA 317 402 345 375 Asia Pacific 208 78 220 84 $ 2,307 $ 1,210 $ 2,141 $ 1,086 Major Products and Services: Devices $ 1,495 $ — $ 1,356 $ — Systems and Systems Integration 812 — 785 — Services — 921 — 902 Software — 289 — 184 $ 2,307 $ 1,210 $ 2,141 $ 1,086 Customer Type: Direct $ 1,429 $ 1,135 $ 1,357 $ 1,042 Indirect 878 75 784 44 $ 2,307 $ 1,210 $ 2,141 $ 1,086 |
Contract Balances | June 29, 2019 December 31, 2018 Accounts receivable, net $ 1,206 $ 1,293 Contract assets 913 1,012 Contract liabilities 1,187 1,263 Non-current contract liabilities 263 214 |
Contract Cost Balances | June 29, 2019 December 31, 2018 Current contract cost assets $ 37 $ 30 Non-current contract cost assets 98 98 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Leases [Abstract] | |
Components of Lease Expense and Other Information | Other information related to leases is as follows: Six Months Ended June 29, 2019 Supplemental cash flow information: Net cash used for operating activities related to operating leases $ 80 Net cash used for operating activities related to finance leases 1 Net cash used for financing activities related to finance leases 8 Assets obtained in exchange for lease liabilities: Operating leases $ 45 The components of lease expense are as follows: June 29, 2019 Three Months Ended Six Months Ended Lease expense: Operating lease cost $ 33 $ 65 Finance lease cost Amortization of right-of-use assets 3 6 Interest on lease liabilities — 1 Total finance lease cost 3 7 Short-term lease cost 1 3 Variable cost 8 17 Sublease income (1 ) (2 ) Net lease expense $ 44 $ 90 June 29, 2019 Weighted average remaining lease terms (years): Operating leases 8 Finance leases 3 Weighted average discount rate: Operating leases 3.76 % Finance leases 4.97 % |
Lease Assets and Liabilities | Lease assets and liabilities consist of the following: Statement Line Classification June 29, 2019 Assets: Operating lease assets Operating lease assets $ 567 Finance lease assets Property, plant, and equipment, net 50 $ 617 Current liabilities: Operating lease liabilities Accrued liabilities $ 118 Finance lease liabilities Current portion of long-term debt 14 $ 132 Non-current liabilities: Operating lease liabilities Operating lease liabilities $ 504 Finance lease liabilities Long-term debt 22 $ 526 |
Future Lease Payments, Finance | Future lease payments as of June 29, 2019 are as follows: Operating Leases Finance Leases Total 2019 $ 58 $ 8 $ 66 2020 136 14 150 2021 121 12 133 2022 105 5 110 2023 55 — 55 Thereafter 247 — 247 Total lease payments 722 39 761 Less: Interest 100 3 103 Present value of lease liabilities $ 622 $ 36 $ 658 |
Future Lease Payments, Operating | Future lease payments as of June 29, 2019 are as follows: Operating Leases Finance Leases Total 2019 $ 58 $ 8 $ 66 2020 136 14 150 2021 121 12 133 2022 105 5 110 2023 55 — 55 Thereafter 247 — 247 Total lease payments 722 39 761 Less: Interest 100 3 103 Present value of lease liabilities $ 622 $ 36 $ 658 |
Future Minimum Lease Obligations, Net of Sublease Rental | At December 31, 2018, future minimum lease obligations, net of minimum sublease rentals, for the next five years and beyond were as follows: 2019 2020 2021 2022 2023 Beyond $ 131 $ 120 $ 112 $ 101 $ 54 $ 204 |
Other Financial Data (Tables)
Other Financial Data (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Charges (Income) | Other charges (income) included in Operating earnings consist of the following: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Other charges: Intangibles amortization (Note 15) $ 52 $ 53 $ 102 $ 94 Reorganization of business (Note 14) 8 18 12 26 Legal settlements 1 — — 1 Acquisition-related transaction fees — — 2 17 $ 61 $ 71 $ 116 $ 138 |
Other Income (Expense) | Interest expense, net, and Other, both included in Other income (expense), consist of the following: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Interest income (expense), net: Interest expense $ (59 ) $ (63 ) $ (119 ) $ (117 ) Interest income 3 5 8 13 $ (56 ) $ (58 ) $ (111 ) $ (104 ) Other,net: Net periodic pension and postretirement benefit (Note 8) $ 17 $ 20 $ 33 $ 40 Loss from the extinguishment of long-term debt (Note 5) (43 ) — (43 ) — Investment impairments (3 ) — (11 ) — Foreign currency gain (loss) (7 ) 11 (11 ) — Loss on derivative instruments (3 ) (19 ) (7 ) (23 ) Gains on equity method investments — — 1 1 Fair value adjustments to equity investments 16 — 15 — Other 2 1 11 (2 ) $ (21 ) $ 13 $ (12 ) $ 16 |
Earnings Per Common Share | The computation of basic and diluted earnings per common share is as follows: Amounts attributable to Motorola Solutions, Inc. common stockholders Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Basic earnings per common share: Earnings $ 207 $ 180 $ 358 $ 297 Weighted average common shares outstanding 164.9 162.2 164.4 161.7 Per share amount $ 1.25 $ 1.11 $ 2.18 $ 1.83 Diluted earnings per common share: Earnings $ 207 $ 180 $ 358 $ 297 Weighted average common shares outstanding 164.9 162.2 164.4 161.7 Add effect of dilutive securities: Share-based awards 4.6 3.8 4.7 4.0 Senior Convertible Notes 6.6 5.7 6.2 5.4 Diluted weighted average common shares outstanding 176.1 171.7 175.3 171.1 Per share amount $ 1.18 $ 1.05 $ 2.04 $ 1.73 |
Accounts Receivable, Net | Accounts receivable, net, consists of the following: June 29, December 31, Accounts receivable $ 1,264 $ 1,344 Less allowance for doubtful accounts (58 ) (51 ) $ 1,206 $ 1,293 Long-term receivables consist of receivables with payment terms greater than twelve months and long-term loans. Long-term receivables consist of the following: June 29, December 31, Long-term receivables, gross $ 28 $ 33 Less allowance for losses (2 ) (2 ) Long-term receivables 26 31 Less current portion (10 ) (7 ) Non-current long-term receivables $ 16 $ 24 |
Inventories, Net | Inventories, net, consist of the following: June 29, December 31, Finished goods $ 233 $ 206 Work-in-process and production materials 335 293 568 499 Less inventory reserves (144 ) (143 ) $ 424 $ 356 |
Other Current Assets | Other current assets consist of the following: June 29, December 31, Current contract cost assets (Note 2) $ 37 $ 30 Tax-related deposits 106 138 Other 181 186 $ 324 $ 354 |
Property, Plant and Equipment, Net | Property, plant and equipment, net, consists of the following: June 29, December 31, Land $ 10 $ 10 Leasehold improvements 377 362 Machinery and equipment 1,938 1,886 2,325 2,258 Less accumulated depreciation (1,385 ) (1,363 ) $ 940 $ 895 |
Investments | Investments consist of the following: June 29, December 31, 2018 Corporate bonds $ — $ 1 Common stock 42 19 Strategic investments, at cost 40 62 Company-owned life insurance policies 76 75 Equity method investments 17 12 $ 175 $ 169 |
Other Assets | Other assets consist of the following: June 29, December 31, Defined benefit plan assets (Note 8) $ 163 $ 135 Tax receivable 39 39 Non-current contract cost assets (Note 2) 98 98 Other 64 72 $ 364 $ 344 |
Accrued Liabilities | Accrued liabilities consist of the following: June 29, December 31, Compensation $ 224 $ 324 Tax liabilities 91 111 Dividend payable 94 93 Trade liabilities 146 185 Operating lease liabilities (Note 3) 118 — Other 444 497 $ 1,117 $ 1,210 |
Other Liabilities | Other liabilities consist of the following: June 29, December 31, Defined benefit plans (Note 8) $ 1,509 $ 1,557 Non-current contract liabilities (Note 2) 263 214 Unrecognized tax benefits 52 51 Deferred income taxes 180 201 Other 229 277 $ 2,233 $ 2,300 |
Accumulated Other Comprehensive Loss | The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the Condensed Consolidated Statements of Operations during the three and six months ended June 29, 2019 and June 30, 2018 : Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Foreign Currency Translation Adjustments: Balance at beginning of period $ (414 ) $ (305 ) $ (444 ) $ (353 ) Other comprehensive income (loss) before reclassification adjustment (24 ) (81 ) 10 (30 ) Tax benefit (expense) 1 (5 ) (3 ) (8 ) Other comprehensive income (loss), net of tax (23 ) (86 ) 7 (38 ) Balance at end of period $ (437 ) $ (391 ) $ (437 ) $ (391 ) Available-for-Sale Securities: Balance at beginning of period $ — $ — $ — $ 6 Reclassification adjustment into Gains on sales of investments and businesses, net — — — (8 ) Tax benefit — — — 2 Other comprehensive loss, net of tax — — — (6 ) Balance at end of period $ — $ — $ — $ — Defined Benefit Plans: Balance at beginning of period $ (2,310 ) $ (2,203 ) $ (2,321 ) $ (2,215 ) Reclassification adjustment - Actuarial net losses into Other income (expense) 17 18 33 36 Reclassification adjustment - Prior service benefits into Other income (expense) (4 ) (4 ) (7 ) (7 ) Tax expense (3 ) — (5 ) (3 ) Other comprehensive income, net of tax 10 14 21 26 Balance at end of period $ (2,300 ) $ (2,189 ) $ (2,300 ) $ (2,189 ) Total Accumulated other comprehensive loss $ (2,737 ) $ (2,580 ) $ (2,737 ) $ (2,580 ) |
Debt and Credit Facilities Debt
Debt and Credit Facilities Debt (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | June 29, December 31, 2.0% Senior Convertible Notes due 2020 $ 800 $ 800 Term Loan due 2021 399 399 3.5% senior notes due 2021 149 397 3.75% senior notes due 2022 550 748 3.5% senior notes due 2023 596 596 4.0% senior notes due 2024 592 591 6.5% debentures due 2025 72 118 7.5% debentures due 2025 254 346 4.6% senior notes due 2028 690 690 6.5% debentures due 2028 24 36 4.6% senior notes due 2029 645 — 6.625% senior notes due 2037 37 54 5.5% senior notes due 2044 396 396 5.22% debentures due 2097 91 91 Other long-term debt 52 62 5,347 5,324 Adjustments for unamortized gains on interest rate swap terminations (4 ) (4 ) Less: current portion (28 ) (31 ) Long-term debt $ 5,315 $ 5,289 |
Risk Management (Tables)
Risk Management (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Largest Net Notional Amounts of The Positions to Buy or Sell Foreign Currency | The following table shows the five largest net notional amounts of the positions to buy or sell foreign currency as of June 29, 2019 , and the corresponding positions as of December 31, 2018 : Notional Amount Net Buy (Sell) by Currency June 29, December 31, Euro $ 155 $ 89 British pound 46 139 Canadian dollar 42 (39 ) Australian dollar (107 ) (105 ) Chinese renminbi (55 ) (55 ) |
Summary of Fair Values and Location In Condensed Consolidated Balance Sheet | The following tables summarize the fair values and locations in the Condensed Consolidated Balance Sheets of all derivative financial instruments held by the Company as of June 29, 2019 and December 31, 2018 : Fair Values of Derivative Instruments June 29, 2019 Other Current Assets Accrued Liabilities Derivatives designated as hedging instruments: Foreign exchange contracts $ 8 $ — Derivatives not designated as hedging instruments: Foreign exchange contracts $ 4 $ 3 Total derivatives $ 12 $ 3 Fair Values of Derivative Instruments December 31, 2018 Other Current Assets Accrued Liabilities Derivatives not designated as hedging instruments: Foreign exchange contracts $ 5 $ 4 |
Summary of Derivative Instruments and The Effect on the Condensed Consolidated Statements Of Operations | The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three and six months ended June 29, 2019 and June 30, 2018 : Three Months Ended Six Months Ended Financial Statement Location Foreign Exchange Contracts June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Effective portion $ 6 $ 5 $ 8 $ 2 Accumulated other Forward points recognized 2 — 3 — Other income Undesignated derivatives recognized (3 ) (19 ) (7 ) (23 ) Other expense |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides details of income taxes: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Net earnings before income taxes $ 275 $ 227 $ 460 $ 367 Income tax expense 67 46 100 69 Effective tax rate 24 % 20 % 22 % 19 % |
Retirement and Other Employee_2
Retirement and Other Employee Benefits (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Plan Costs | The net periodic benefits for Pension and Postretirement Health Care Benefits Plans were as follows: U.S. Pension Benefit Plans Non-U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Service cost $ — $ — $ 1 $ 1 $ — $ — Interest cost 51 46 10 10 1 1 Expected return on plan assets (69 ) (68 ) (21 ) (24 ) (3 ) (3 ) Amortization of: Unrecognized net loss 12 14 4 3 1 1 Unrecognized prior service benefit — — — — (4 ) (4 ) Net periodic pension benefits $ (6 ) $ (8 ) $ (6 ) $ (10 ) $ (5 ) $ (5 ) U.S. Pension Benefit Plans Non-U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Six Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Service cost $ — $ — $ 2 $ 2 $ — $ — Interest cost 102 92 20 20 1 1 Expected return on plan assets (138 ) (136 ) (42 ) (48 ) (5 ) (5 ) Amortization of: Unrecognized net loss 23 28 8 6 2 2 Unrecognized prior service benefit — — — — (7 ) (7 ) Net periodic pension benefits $ (13 ) $ (16 ) $ (12 ) $ (20 ) $ (9 ) $ (9 ) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Compensation Expense | Compensation expense for the Company’s share-based plans was as follows: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Share-based compensation expense included in: Costs of sales $ 3 $ 2 $ 7 $ 5 Selling, general and administrative expenses 15 11 31 21 Research and development expenditures 12 4 19 8 Share-based compensation expense included in Operating earnings 30 17 57 34 Tax benefit (5 ) (4 ) (10 ) (8 ) Share-based compensation expense, net of tax $ 25 $ 13 $ 47 $ 26 Decrease in basic earnings per share $ (0.15 ) $ (0.08 ) $ (0.29 ) $ (0.16 ) Decrease in diluted earnings per share $ (0.14 ) $ (0.08 ) $ (0.27 ) $ (0.15 ) |
Share-based Compensation Fair Value Assumption | The Company calculates the value of each PSU using the Monte Carlo simulation, estimated on the date of grant. Each PSU was granted with a fair value of $203.61 . The following assumptions were used for the calculations. 2019 PSUs Expected volatility of common stock 20.6 % Expected volatility of the S&P 500 25.0 % Risk-free interest rate 2.2 % Dividend yield 1.6 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Company's Financial Assets And Liabilities | The fair values of the Company’s financial assets and liabilities by level in the fair value hierarchy as of June 29, 2019 and December 31, 2018 were as follows: June 29, 2019 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 12 $ 12 Common stock 42 — 42 Liabilities: Foreign exchange derivative contracts $ — $ 3 $ 3 December 31, 2018 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 5 $ 5 Corporate bonds 1 — 1 Common stock 19 — 19 Liabilities: Foreign exchange derivative contracts $ — $ 4 $ 4 |
Long-term Financing and Sales_2
Long-term Financing and Sales of Receivables (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Receivables [Abstract] | |
Long-Term Customer Financing | Accounts receivable, net, consists of the following: June 29, December 31, Accounts receivable $ 1,264 $ 1,344 Less allowance for doubtful accounts (58 ) (51 ) $ 1,206 $ 1,293 Long-term receivables consist of receivables with payment terms greater than twelve months and long-term loans. Long-term receivables consist of the following: June 29, December 31, Long-term receivables, gross $ 28 $ 33 Less allowance for losses (2 ) (2 ) Long-term receivables 26 31 Less current portion (10 ) (7 ) Non-current long-term receivables $ 16 $ 24 |
Proceeds Received From Non-Recourse Sales Of Accounts Receivable And Long-Term Receivables | The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three and six months ended June 29, 2019 and June 30, 2018 : Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Accounts receivable sales proceeds $ 3 $ 22 $ 27 $ 76 Long-term receivables sales proceeds 55 15 76 28 Total proceeds from receivable sales $ 58 $ 37 $ 103 $ 104 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Net Sales and Operating Earnings by Segment | The following table summarizes Net sales by segment: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Products and Systems Integration $ 1,238 $ 1,189 $ 2,307 $ 2,141 Services and Software 622 571 1,210 1,086 $ 1,860 $ 1,760 $ 3,517 $ 3,227 The following table summarizes the Operating earnings by segment: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Products and Systems Integration $ 201 $ 175 $ 310 $ 265 Services and Software 148 98 269 180 Operating earnings 349 273 579 445 Total other expense (74 ) (46 ) (119 ) (78 ) Earnings before income taxes $ 275 $ 227 $ 460 $ 367 |
Reorganization of Business (Tab
Reorganization of Business (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Reportable Segment | The following table displays the net charges incurred by segment: June 29, 2019 Three Months Ended Six Months Ended Products and Systems Integration $ 9 $ 16 Services and Software 3 4 $ 12 $ 20 The following table displays the net charges incurred by segment: June 30, 2018 Three Months Ended Six Months Ended Products and Systems Integration $ 19 $ 28 Services and Software 6 10 $ 25 $ 38 |
Reorganization of Businesses Accruals | The following table displays a rollforward of the reorganization of business accruals established for employee separation costs from January 1, 2019 to June 29, 2019 : January 1, 2019 Additional Charges Adjustments Amount Used June 29, 2019 Employee separation costs $ 84 $ 30 $ (10 ) $ (28 ) $ 76 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Amortized intangible assets were comprised of the following: June 29, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Completed technology $ 701 $ 119 $ 558 $ 92 Customer-related 1,147 434 1,085 364 Other intangibles 76 39 76 33 $ 1,924 $ 592 $ 1,719 $ 489 |
Amortized Intangible Assets | Amortized intangible assets were comprised of the following by segment: June 29, 2019 December 31, 2018 Gross Accumulated Gross Accumulated Products and Systems Integration $ 610 $ 59 $ 510 $ 38 Services and Software 1,314 533 1,209 451 $ 1,924 $ 592 $ 1,719 $ 489 |
Goodwill | The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2019 to June 29, 2019 : Products and Systems Integration Services and Software Total Balance as of January 1, 2019 $ 722 $ 792 $ 1,514 Goodwill acquired 146 183 329 Purchase accounting adjustments — 9 9 Balance as of June 29, 2019 $ 868 $ 984 $ 1,852 |
Basis of Presentation - Recent
Basis of Presentation - Recent Acquisitions (Details) - USD ($) shares in Millions, $ in Millions | Jul. 11, 2019 | Mar. 11, 2019 | Jan. 07, 2019 | Mar. 28, 2018 | Mar. 07, 2018 |
Avtec | |||||
Business Acquisition [Line Items] | |||||
Cash paid for acquisition, net of cash acquired | $ 136 | ||||
VaaS | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 445 | ||||
Share-based compensation acquired | $ 38 | ||||
Share-based compensation withheld, average service period | 1 year | ||||
Cash paid for acquisition, net of cash acquired | $ 231 | ||||
Shares issued (in shares) | 1.4 | ||||
Share value | $ 160 | ||||
Total consideration | $ 391 | ||||
Avigilon | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 974 | ||||
Plant Holdings, Inc. | |||||
Business Acquisition [Line Items] | |||||
Cash paid for acquisition, net of cash acquired | $ 237 | ||||
Subsequent Event | WatchGuard | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 271 | ||||
Share-based compensation acquired | $ 16 | ||||
Share-based compensation withheld, average service period | 2 years | ||||
Cash paid for acquisition, net of cash acquired | $ 250 |
Basis of Presentation - Recentl
Basis of Presentation - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liabilities | $ 622 | |
Operating ROU assets | $ 567 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liabilities | $ 648 | |
Operating ROU assets | 588 | |
Deferred rent and exit cost accruals reclassified | $ 60 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,860 | $ 1,760 | $ 3,517 | $ 3,227 |
Products and Systems Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,238 | 1,189 | 2,307 | 2,141 |
Products and Systems Integration | Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 771 | 740 | 1,429 | 1,357 |
Products and Systems Integration | Indirect | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 467 | 449 | 878 | 784 |
Products and Systems Integration | Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 809 | 725 | 1,495 | 1,356 |
Products and Systems Integration | Systems and Systems Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 429 | 464 | 812 | 785 |
Products and Systems Integration | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Products and Systems Integration | Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Products and Systems Integration | Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 969 | 878 | 1,782 | 1,576 |
Products and Systems Integration | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 152 | 188 | 317 | 345 |
Products and Systems Integration | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 117 | 123 | 208 | 220 |
Services and Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 622 | 571 | 1,210 | 1,086 |
Services and Software | Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 582 | 537 | 1,135 | 1,042 |
Services and Software | Indirect | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 40 | 34 | 75 | 44 |
Services and Software | Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Services and Software | Systems and Systems Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Services and Software | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 469 | 456 | 921 | 902 |
Services and Software | Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 153 | 115 | 289 | 184 |
Services and Software | Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 378 | 331 | 730 | 627 |
Services and Software | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 204 | 194 | 402 | 375 |
Services and Software | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 40 | $ 46 | $ 78 | $ 84 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Remaining Performance Obligation, Future Expected (Details) $ in Billions | Jun. 29, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | Products and Systems Integration | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 1.7 |
Expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | Managed and Support Services | Services and Software | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 1.2 |
Expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 7.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Products and Systems Integration | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | 3.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Services and Software | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 4.2 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Contract with Customer, Asset and Liability [Abstract] | |||||
Accounts receivable, net | $ 1,206 | $ 1,206 | $ 1,293 | ||
Contract assets | 913 | 913 | 1,012 | ||
Contract liabilities | 1,187 | 1,187 | 1,263 | ||
Non-current contract liabilities | 263 | 263 | $ 214 | ||
Contract with customer, liability, revenue recognized | $ 340 | $ 365 | 600 | $ 541 | |
Impairment losses | $ 0 | $ 0 | $ 0 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Contract Cost Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||||
Current contract cost assets | $ 37 | $ 37 | $ 30 | |
Non-current contract cost assets | 98 | 98 | $ 98 | |
Contract cost, amortization | $ 11 | $ 22 | $ 23 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 29, 2019 | Dec. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Rent expense | $ 108 | |
Minimum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Lease terms | 1 year | |
Lease renewal terms | 1 year | |
Maximum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Lease terms | 21 years | |
Lease renewal terms | 10 years |
Leases - Operating Expense (Det
Leases - Operating Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 29, 2019 | Jun. 29, 2019 | |
Lease expense: | ||
Operating lease cost | $ 33 | $ 65 |
Finance lease cost | ||
Amortization of right-of-use assets | 3 | 6 |
Interest on lease liabilities | 0 | 1 |
Total finance lease cost | 3 | 7 |
Short-term lease cost | 1 | 3 |
Variable cost | 8 | 17 |
Sublease income | (1) | (2) |
Net lease expense | $ 44 | $ 90 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) $ in Millions | Jun. 29, 2019USD ($) |
Assets: | |
Operating lease assets | $ 567 |
Finance lease assets | 50 |
Total lease assets | 617 |
Current liabilities: | |
Operating lease liabilities | 118 |
Finance lease liabilities | 14 |
Total lease liabilities, current | 132 |
Non-current liabilities: | |
Operating lease liabilities | 504 |
Finance lease liabilities | 22 |
Total lease liabilities, non-current | $ 526 |
Leases - Cash Flows (Details)
Leases - Cash Flows (Details) $ in Millions | 6 Months Ended |
Jun. 29, 2019USD ($) | |
Supplemental cash flow information: | |
Net cash used for operating activities related to operating leases | $ 80 |
Net cash used for operating activities related to finance leases | 1 |
Net cash used for financing activities related to finance leases | 8 |
Assets obtained in exchange for lease liabilities: | |
Operating leases | $ 45 |
Leases - Terms (Details)
Leases - Terms (Details) | Jun. 29, 2019 |
Leases [Abstract] | |
Weighted average remaining lease terms, operating leases | 8 years |
Weighted average remaining lease terms, finance leases | 3 years |
Weighted average discount rate, operating leases | 3.76% |
Weighted average discount rate, finance leases | 4.97% |
Leases - Future Payments (Detai
Leases - Future Payments (Details) $ in Millions | Jun. 29, 2019USD ($) |
Operating Leases | |
2019 | $ 58 |
2020 | 136 |
2021 | 121 |
2022 | 105 |
2023 | 55 |
Thereafter | 247 |
Total lease payments | 722 |
Interest | 100 |
Present value of lease liabilities | 622 |
Finance Leases | |
2019 | 8 |
2020 | 14 |
2021 | 12 |
2022 | 5 |
2023 | 0 |
Thereafter | 0 |
Total lease payments | 39 |
Interest | 3 |
Present value of lease liabilities | 36 |
Total | |
2019 | 66 |
2020 | 150 |
2021 | 133 |
2022 | 110 |
2023 | 55 |
Thereafter | 247 |
Total lease payments | 761 |
Interest | 103 |
Present value of lease liabilities | $ 658 |
Leases - Future Minimum Payment
Leases - Future Minimum Payment, Net of Sublease Income (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 131 |
2020 | 120 |
2021 | 112 |
2022 | 101 |
2023 | 54 |
Beyond | $ 204 |
Other Financial Data - Other Ch
Other Financial Data - Other Charges (Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Other charges: | ||||
Intangibles amortization | $ 52 | $ 53 | $ 102 | $ 94 |
Reorganization of business | 8 | 18 | 12 | 26 |
Legal settlements | 1 | 0 | 0 | 1 |
Acquisition-related transaction fees | 0 | 0 | 2 | 17 |
Other charges | $ 61 | $ 71 | $ 116 | $ 138 |
Other Financial Data - Other _2
Other Financial Data - Other Charges (Income) - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Business Acquisition [Line Items] | ||||
Acquisition-related transaction fees | $ 0 | $ 0 | $ 2 | $ 17 |
VaaS and Avtec | ||||
Business Acquisition [Line Items] | ||||
Acquisition-related transaction fees | $ 2 | |||
Avigilon and Plant | ||||
Business Acquisition [Line Items] | ||||
Acquisition-related transaction fees | $ 17 |
Other Financial Data - Other In
Other Financial Data - Other Income (Expense) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Interest income (expense), net: | ||||
Interest expense | $ (59,000,000) | $ (63,000,000) | $ (119,000,000) | $ (117,000,000) |
Interest income | 3,000,000 | 5,000,000 | 8,000,000 | 13,000,000 |
Interest income (expense), net | (56,000,000) | (58,000,000) | (111,000,000) | (104,000,000) |
Other,net: | ||||
Net periodic pension and postretirement benefit | 17,000,000 | 20,000,000 | 33,000,000 | 40,000,000 |
Loss from the extinguishment of long-term debt | (43,000,000) | 0 | (43,000,000) | 0 |
Investment impairments | (3,000,000) | 0 | (11,000,000) | 0 |
Foreign currency gain (loss) | (7,000,000) | 11,000,000 | (11,000,000) | 0 |
Loss on derivative instruments | (3,000,000) | (19,000,000) | (7,000,000) | (23,000,000) |
Gains on equity method investments | 0 | 0 | 1,000,000 | 1,000,000 |
Fair value adjustments to equity investments | 16,000,000 | 0 | 15,000,000 | 0 |
Other | 2,000,000 | 1,000,000 | 11,000,000 | (2,000,000) |
Total other income (expense) | $ (21,000,000) | $ 13,000,000 | $ (12,000,000) | $ 16,000,000 |
Other Financial Data - Other _3
Other Financial Data - Other Income (Expense) - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign currency gain (loss) | $ (7) | $ 11 | $ (11) | $ 0 |
Gain (loss) on derivative instruments | $ (3) | $ (19) | $ (7) | (23) |
Canadian dollar | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivative instruments | $ (14) |
Other Financial Data - Earnings
Other Financial Data - Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Basic earnings (loss) per common share: | ||||
Earnings | $ 207 | $ 180 | $ 358 | $ 297 |
Weighted average common shares outstanding (in shares) | 164.9 | 162.2 | 164.4 | 161.7 |
Basic earnings per share amount (in US$ per share) | $ 1.25 | $ 1.11 | $ 2.18 | $ 1.83 |
Diluted earnings per common share: | ||||
Earnings | $ 207 | $ 180 | $ 358 | $ 297 |
Weighted average common shares outstanding (in shares) | 164.9 | 162.2 | 164.4 | 161.7 |
Add effect of dilutive securities: | ||||
Share-based awards (in shares) | 4.6 | 3.8 | 4.7 | 4 |
Senior Convertible Notes (in shares) | 6.6 | 5.7 | 6.2 | 5.4 |
Diluted weighted average common shares outstanding (in shares) | 176.1 | 171.7 | 175.3 | 171.1 |
Per share amount (in US$ per share) | $ 1.18 | $ 1.05 | $ 2.04 | $ 1.73 |
Other Financial Data - Earnin_2
Other Financial Data - Earnings Per Common Share - Additional Information (Details) - USD ($) shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Convertible Notes | 2.0% Senior Convertible Notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | $ 800,000,000 | $ 800,000,000 | ||
Interest rate | 2.00% | 2.00% | ||
Stock Options | ||||
Debt Instrument [Line Items] | ||||
Securities excluded from computation of dilutive shares due to antidilutive nature (in shares) | 0.5 | 1.4 | 0.5 | 2.9 |
Performance Options | ||||
Debt Instrument [Line Items] | ||||
Securities excluded from computation of dilutive shares due to antidilutive nature (in shares) | 0.3 | 1.2 | 0.3 | 2.4 |
Other Financial Data - Accounts
Other Financial Data - Accounts Receivable, Net (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 1,264 | $ 1,344 |
Less allowance for doubtful accounts | (58) | (51) |
Accounts receivable, net | $ 1,206 | $ 1,293 |
Other Financial Data - Inventor
Other Financial Data - Inventories, Net (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Inventory, Net [Abstract] | ||
Finished goods | $ 233 | $ 206 |
Work-in-process and production materials | 335 | 293 |
Inventories, gross | 568 | 499 |
Less inventory reserves | (144) | (143) |
Inventories, net | $ 424 | $ 356 |
Other Financial Data - Other Cu
Other Financial Data - Other Current Assets (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Other Current Assets [Abstract] | ||
Current contract cost assets | $ 37 | $ 30 |
Tax-related deposits | 106 | 138 |
Other | 181 | 186 |
Other current assets | $ 324 | $ 354 |
Other Financial Data - Property
Other Financial Data - Property, Plant And Equipment, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |||||
Land | $ 10 | $ 10 | $ 10 | ||
Leasehold improvements | 377 | 377 | 362 | ||
Machinery and equipment | 1,938 | 1,938 | 1,886 | ||
Property, plant and equipment, gross | 2,325 | 2,325 | 2,258 | ||
Less accumulated depreciation | (1,385) | (1,385) | (1,363) | ||
Property, plant and equipment, net | 940 | 940 | $ 895 | ||
Depreciation expense | $ 44 | $ 43 | $ 89 | $ 84 |
Other Financial Data - Investme
Other Financial Data - Investments (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Corporate bonds | $ 0 | $ 1 |
Common stock | 42 | 19 |
Strategic investments, at cost | 40 | 62 |
Company-owned life insurance policies | 76 | 75 |
Equity method investments | 17 | 12 |
Long-term investments | $ 175 | $ 169 |
Other Financial Data - Invest_2
Other Financial Data - Investments, Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Investment [Line Items] | ||||
Fair value adjustments to equity investments | $ 16,000,000 | $ 0 | $ 15,000,000 | $ 0 |
Gains (losses) on sales of investments and businesses, net | 3,000,000 | (1,000,000) | 4,000,000 | 10,000,000 |
Proceeds from sales of investments and businesses, net | 6,000,000 | 10,000,000 | 79,000,000 | |
Net assets, investments and businesses | 3,000,000 | 3,000,000 | ||
Investment impairments | 3,000,000 | $ 0 | 11,000,000 | $ 0 |
Common stock | ||||
Investment [Line Items] | ||||
Fair value adjustments to equity investments | $ 15,000,000 | $ 14,000,000 |
Other Financial Data - Other As
Other Financial Data - Other Assets (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Other Assets [Abstract] | ||
Defined benefit plan assets | $ 163 | $ 135 |
Tax receivable | 39 | 39 |
Non-current contract cost assets | 98 | 98 |
Other | 64 | 72 |
Other assets, total | $ 364 | $ 344 |
Other Financial Data - Accrued
Other Financial Data - Accrued Liabilities (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Accrued Liabilities [Abstract] | ||
Compensation | $ 224 | $ 324 |
Tax liabilities | 91 | 111 |
Dividend payable | 94 | 93 |
Trade liabilities | 146 | 185 |
Operating lease liabilities | 118 | |
Other | 444 | 497 |
Accrued liabilities | $ 1,117 | $ 1,210 |
Other Financial Data - Other Li
Other Financial Data - Other Liabilities (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Other Liabilities [Abstract] | ||
Defined benefit plans | $ 1,509 | $ 1,557 |
Non-current contract liabilities | 263 | 214 |
Unrecognized tax benefits | 52 | 51 |
Deferred income taxes | 180 | 201 |
Other | 229 | 277 |
Other liabilities | $ 2,233 | $ 2,300 |
Other Financial Data - Stockhol
Other Financial Data - Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Payments for repurchased shares | $ 25 | $ 170 | $ 66 | |
Number of shares repurchased (in shares) | 0.2 | 1.4 | ||
Repurchase of common shares, average cost (in US$ per share) | $ 146.65 | $ 122.31 | ||
Share repurchase authority utilized during period | $ 12,600 | |||
Amount available for future share repurchase | $ 1,400 | 1,400 | ||
Cash dividends paid | $ 94 | $ 84 | $ 187 | $ 168 |
Other Financial Data - Accumula
Other Financial Data - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2019 | Mar. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Balance at beginning of period | $ (1,276) | $ (1,276) | ||||
Total other comprehensive income (loss), net of tax | $ (13) | $ (72) | 28 | $ (18) | ||
Balance at end of period | (954) | (954) | ||||
Accumulated Other Comprehensive Income (Loss) | ||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Balance at beginning of period | (2,724) | (2,765) | (2,508) | $ (2,562) | (2,765) | (2,562) |
Total other comprehensive income (loss), net of tax | (13) | 41 | (72) | 54 | ||
Balance at end of period | (2,737) | (2,724) | (2,580) | (2,508) | (2,737) | (2,580) |
Foreign Currency Translation Adjustments | ||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Balance at beginning of period | (414) | (444) | (305) | (353) | (444) | (353) |
Other comprehensive income (loss) before reclassification adjustment | (24) | (81) | 10 | (30) | ||
Tax benefit (expense) | 1 | (5) | (3) | (8) | ||
Total other comprehensive income (loss), net of tax | (23) | (86) | 7 | (38) | ||
Balance at end of period | (437) | (414) | (391) | (305) | (437) | (391) |
Available-for-Sale Securities | ||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Balance at beginning of period | 0 | 0 | 0 | 6 | 0 | 6 |
Reclassification adjustment before tax | 0 | 0 | 0 | (8) | ||
Tax expense (benefit) | 0 | 0 | 0 | 2 | ||
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | (6) | ||
Balance at end of period | 0 | 0 | 0 | 0 | 0 | 0 |
Defined Benefit Plans | ||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Balance at beginning of period | (2,310) | (2,321) | (2,203) | (2,215) | (2,321) | (2,215) |
Tax expense (benefit) | (3) | 0 | (5) | (3) | ||
Total other comprehensive income (loss), net of tax | 10 | 14 | 21 | 26 | ||
Balance at end of period | (2,300) | $ (2,310) | (2,189) | $ (2,203) | (2,300) | (2,189) |
Reclassification adjustment - Actuarial net losses into Other income (expense) | ||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Reclassification adjustment before tax | 17 | 18 | 33 | 36 | ||
Reclassification adjustment - Prior service benefits into Other income (expense) | ||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Reclassification adjustment before tax | $ (4) | $ (4) | $ (7) | $ (7) |
Debt and Credit Facilities Sche
Debt and Credit Facilities Schedule of Debt (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 5,347 | $ 5,324 |
Adjustments for unamortized gains on interest rate swap terminations | (4) | (4) |
Current portion of long-term debt | (28) | (31) |
Long-term debt | 5,315 | 5,289 |
Other long-term debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 52 | 62 |
Convertible Notes | 2.0% Senior Convertible Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 800 | 800 |
Term Loan | Term Loan due 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 399 | 399 |
Senior Notes | 3.5% senior notes due 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 149 | 397 |
Senior Notes | 3.75% senior notes due 2022 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 550 | 748 |
Senior Notes | 3.5% senior notes due 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 596 | 596 |
Senior Notes | 4.0% senior notes due 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 592 | 591 |
Senior Notes | 4.6% senior notes due 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 690 | 690 |
Senior Notes | 4.6% senior notes due 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 645 | 0 |
Senior Notes | 6.625% senior notes due 2037 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 37 | 54 |
Senior Notes | 5.5% senior notes due 2044 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 396 | 396 |
Unsecured Debt | 6.5% debentures due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 72 | 118 |
Unsecured Debt | 7.5% debentures due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 254 | 346 |
Unsecured Debt | 6.5% debentures due 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 24 | 36 |
Unsecured Debt | 5.22% debentures due 2097 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 91 | $ 91 |
Debt and Credit Facilities (Det
Debt and Credit Facilities (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 31, 2019USD ($) | Feb. 28, 2018USD ($) | Jun. 29, 2019USD ($)$ / shares | Mar. 31, 2018USD ($) | Jun. 29, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | |
U.S. | Pension Benefit Plan | ||||||
Debt Instrument [Line Items] | ||||||
Defined benefit plan contributions | $ 500,000,000 | |||||
Line of Credit | Revolving Credit Facility | 2017 Motorola Solutions Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility borrowing capacity | $ 2,200,000,000 | $ 2,200,000,000 | ||||
Proceeds from line of credit | $ 400,000,000 | |||||
Line of Credit | Letter of Credit | 2017 Motorola Solutions Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility borrowing capacity | 500,000,000 | 500,000,000 | ||||
Fronting commitment sub-limit | 450,000,000 | $ 450,000,000 | ||||
Senior Notes | 4.6% senior notes due 2028 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 500,000,000 | $ 200,000,000 | ||||
Interest rate | 4.60% | |||||
Proceeds from debt, net | $ 497,000,000 | $ 196,000,000 | ||||
Senior Notes | 4.6% senior notes due 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 650,000,000 | |||||
Interest rate | 4.60% | |||||
Proceeds from debt, net | $ 645,000,000 | |||||
Repurchased face amount | 614,000,000 | |||||
Repurchase amount paid | $ 654,000,000 | |||||
Interest expense | 3,000,000 | |||||
Loss on repurchase of debt | $ 43,000,000 | |||||
Term Loan | Term Loan due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 400,000,000 | |||||
Weighted average interest rate | 3.72% | 3.74% | ||||
Additional borrowings available | $ 0 | $ 0 | ||||
Convertible Notes | 2.0% Senior Convertible Notes due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 800,000,000 | $ 800,000,000 | ||||
Interest rate | 2.00% | 2.00% | ||||
Conversion rate | 0.0148968 | |||||
Effective conversion price of convertible shares (in US$ per share) | $ / shares | $ 67.13 | $ 67.13 | ||||
If-converted value in excess of principal | $ 1,100,000,000 |
Risk Management - Foreign Curre
Risk Management - Foreign Currency Risk (Details) $ in Millions | Jun. 29, 2019USD ($)position | Dec. 31, 2018USD ($)position |
Derivative [Line Items] | ||
Number of net notional positions to buy or sell foreign currency disclosed (in number of positions) | position | 5 | 5 |
Foreign Exchange Contract | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | $ (1,000) | $ (819) |
Foreign Exchange Contract | Euro | Long | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | (155) | (89) |
Foreign Exchange Contract | British pound | Long | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | (46) | (139) |
Foreign Exchange Contract | Canadian dollar | Long | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | (42) | |
Foreign Exchange Contract | Canadian dollar | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | (39) | |
Foreign Exchange Contract | Australian dollar | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | (107) | (105) |
Foreign Exchange Contract | Chinese renminbi | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | $ (55) | $ (55) |
Risk Management - Counterparty
Risk Management - Counterparty Risk (Details) $ in Millions | Jun. 29, 2019USD ($) |
Credit Concentration Risk | |
Derivative [Line Items] | |
Aggregate net credit risk | $ 12 |
Risk Management - Summary of Fa
Risk Management - Summary of Fair Values and Location in Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Fair Value | ||
Other Current Assets | $ 12 | |
Accrued Liabilities | 3 | |
Designated as Hedging Instrument | Foreign exchange contracts | Other current assets | ||
Fair Value | ||
Other Current Assets | 8 | |
Designated as Hedging Instrument | Foreign exchange contracts | Accrued liabilities | ||
Fair Value | ||
Accrued Liabilities | 0 | |
Not Designated As Hedging Instruments | Foreign exchange contracts | Other current assets | ||
Fair Value | ||
Other Current Assets | 4 | $ 5 |
Not Designated As Hedging Instruments | Foreign exchange contracts | Accrued liabilities | ||
Fair Value | ||
Accrued Liabilities | $ 3 | $ 4 |
Risk Management - Summary of De
Risk Management - Summary of Derivative Instruments and the Effect on the Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Effective portion | $ 6 | $ 5 | $ 8 | $ 2 |
Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Forward points recognized | 2 | 0 | 3 | 0 |
Not Designated As Hedging Instruments | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Undesignated derivatives recognized | $ (3) | $ (19) | $ (7) | $ (23) |
Risk Management - Net Investmen
Risk Management - Net Investment Hedges (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019USD ($) | Jun. 29, 2019USD ($) | Jun. 29, 2019EUR (€) | Jun. 29, 2019GBP (£) | Dec. 31, 2018USD ($) | |
Minimum | Net Investment Hedging | |||||
Derivative [Line Items] | |||||
Term of contract | 12 months | ||||
Maximum | Net Investment Hedging | |||||
Derivative [Line Items] | |||||
Term of contract | 15 months | ||||
Foreign Exchange Contract | |||||
Derivative [Line Items] | |||||
Notional amounts of outstanding foreign exchange contracts | $ 1,000 | $ 1,000 | $ 819 | ||
Euro | Foreign Exchange Contract | Designated as Hedging Instrument | Net Investment Hedging | |||||
Derivative [Line Items] | |||||
Notional amounts of outstanding foreign exchange contracts | € 95,000,000 | £ 100,000,000 | |||
Interest Expense | Foreign Exchange Contract | Net Investment Hedging | |||||
Derivative [Line Items] | |||||
Amortized income from excluded components | $ 2 | $ 3 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Net earnings before income taxes | $ 275 | $ 227 | $ 460 | $ 367 |
Income tax expense | $ 67 | $ 46 | $ 100 | $ 69 |
Effective tax rate | 24.00% | 20.00% | 22.00% | 19.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 67 | $ 46 | $ 100 | $ 69 |
Effective tax rate | 24.00% | 20.00% | 22.00% | 19.00% |
Retirement and Other Employee_3
Retirement and Other Employee Benefits - Pension and Postretirement Health Care Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Postretirement Health Care Benefits Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 1 | 1 | 1 | 1 |
Expected return on plan assets | (3) | (3) | (5) | (5) |
Amortization of | ||||
Unrecognized net loss | 1 | 1 | 2 | 2 |
Unrecognized prior service benefit | (4) | (4) | (7) | (7) |
Net periodic pension benefits | (5) | (5) | (9) | (9) |
U.S. | Pension Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 51 | 46 | 102 | 92 |
Expected return on plan assets | (69) | (68) | (138) | (136) |
Amortization of | ||||
Unrecognized net loss | 12 | 14 | 23 | 28 |
Unrecognized prior service benefit | 0 | 0 | 0 | 0 |
Net periodic pension benefits | (6) | (8) | (13) | (16) |
Non-U.S. | Pension Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 1 | 2 | 2 |
Interest cost | 10 | 10 | 20 | 20 |
Expected return on plan assets | (21) | (24) | (42) | (48) |
Amortization of | ||||
Unrecognized net loss | 4 | 3 | 8 | 6 |
Unrecognized prior service benefit | 0 | 0 | 0 | 0 |
Net periodic pension benefits | $ (6) | $ (10) | $ (12) | $ (20) |
Share-Based Compensation Plan_2
Share-Based Compensation Plans - Schedule of Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 30 | $ 17 | $ 57 | $ 34 |
Tax benefit | (5) | (4) | (10) | (8) |
Share-based compensation expense, net of tax | $ 25 | $ 13 | $ 47 | $ 26 |
Decrease in basic earnings per share (in US$ per share) | $ (0.15) | $ (0.08) | $ (0.29) | $ (0.16) |
Decrease in diluted earnings per share (in US$ per share) | $ (0.14) | $ (0.08) | $ (0.27) | $ (0.15) |
Costs of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 3 | $ 2 | $ 7 | $ 5 |
Selling, general and administrative expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | 15 | 11 | 31 | 21 |
Research and development expenditures | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 12 | $ 4 | $ 19 | $ 8 |
Share-Based Compensation Plan_3
Share-Based Compensation Plans - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 29, 2019 | Jun. 29, 2019 | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Units granted in period (in shares) | 0.5 | |
Aggregate grant date fair value | $ 64 | |
Market Stock Units (MSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Units granted in period (in shares) | 0.1 | |
Aggregate grant date fair value | $ 7 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted in period (in shares) | 0.2 | |
Aggregate grant date fair value | $ 6 | |
Performance Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate grant date fair value | $ 5.5 | |
Options granted in period (in shares) | 0.2 | |
Aggregate grant date fair value | $ 7 | |
Grant date fair value (in US$ per share) | $ 203.61 | |
VaaS | Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Units granted in period (in shares) | 0.4 | |
Aggregate grant date fair value | $ 38 | |
WatchGuard | Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate grant date fair value | $ 16 |
Share-Based Compensation Plan_4
Share-Based Compensation Plans - Fair Value Assumptions (Details) | 6 Months Ended |
Jun. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Expected volatility of common stock | 20.60% |
Expected volatility of the S&P 500 | 25.00% |
Risk-free interest rate | 2.20% |
Dividend yield | 1.60% |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Assets: | ||
Foreign exchange derivative contracts | $ 12 | |
Available-for-sale securities | 0 | $ 1 |
Common stock | 42 | 19 |
Liabilities: | ||
Foreign exchange derivative contracts | 3 | |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Corporate bonds | ||
Assets: | ||
Available-for-sale securities | 1 | |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Common stock | ||
Assets: | ||
Common stock | 42 | 19 |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange derivative contracts | 12 | 5 |
Liabilities: | ||
Foreign exchange derivative contracts | 3 | 4 |
Recurring basis | Level 1 | Corporate bonds | ||
Assets: | ||
Available-for-sale securities | 1 | |
Recurring basis | Level 1 | Common stock | ||
Assets: | ||
Common stock | 42 | 19 |
Recurring basis | Level 1 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange derivative contracts | 0 | 0 |
Liabilities: | ||
Foreign exchange derivative contracts | 0 | 0 |
Recurring basis | Level 2 | Corporate bonds | ||
Assets: | ||
Available-for-sale securities | 0 | |
Recurring basis | Level 2 | Common stock | ||
Assets: | ||
Common stock | 0 | 0 |
Recurring basis | Level 2 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange derivative contracts | 12 | 5 |
Liabilities: | ||
Foreign exchange derivative contracts | $ 3 | $ 4 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market mutual funds classified as cash and cash equivalents | $ 419 | $ 734 |
Estimate of Fair Value, Fair Value Disclosure | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of long term debt | $ 5,600 | $ 5,400 |
Long-term Financing and Sales_3
Long-term Financing and Sales of Receivables - Long-Term Financing (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Long-term receivables, gross | $ 28 | $ 33 |
Less allowance for losses | (2) | (2) |
Long-term receivables | 26 | 31 |
Less current portion | (10) | (7) |
Non-current long-term receivables | 16 | 24 |
Outstanding commitment to provide long-term financing to third parties | $ 53 | $ 62 |
Long-term Financing and Sales_4
Long-term Financing and Sales of Receivables - Sales Receivables (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Receivables [Abstract] | |||||
Accounts receivable sales proceeds | $ 3 | $ 22 | $ 27 | $ 76 | |
Long-term receivables sales proceeds | 55 | 15 | 76 | 28 | |
Total proceeds from receivable sales | 58 | $ 37 | 103 | $ 104 | |
Servicing obligations for long-term receivables | $ 971 | $ 971 | $ 970 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Jun. 29, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Accrual for obligations of divestitures | $ 0 |
Segment Information - Operating
Segment Information - Operating Business Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 1,860 | $ 1,760 | $ 3,517 | $ 3,227 |
Operating Earnings by Segment | ||||
Operating earnings | 349 | 273 | 579 | 445 |
Total other expense | (74) | (46) | (119) | (78) |
Net earnings before income taxes | 275 | 227 | 460 | 367 |
Products and Systems Integration | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,238 | 1,189 | 2,307 | 2,141 |
Operating Earnings by Segment | ||||
Operating earnings | 201 | 175 | 310 | 265 |
Services and Software | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 622 | 571 | 1,210 | 1,086 |
Operating Earnings by Segment | ||||
Operating earnings | $ 148 | $ 98 | $ 269 | $ 180 |
Reorganization of Business - Na
Reorganization of Business - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019USD ($)employee | Jun. 30, 2018USD ($) | Jun. 29, 2019USD ($)employee | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | $ 12 | $ 25 | $ 20 | $ 38 | |
Reversal of accruals | 6 | ||||
Other charges | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | 8 | 18 | 12 | 26 | |
Costs of sales | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | 4 | 7 | 8 | 12 | |
Employee separation costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 18 | 27 | 30 | 49 | |
Reversal of accruals | 3 | 10 | 14 | ||
Restructuring reserve | $ 76 | $ 76 | $ 84 | ||
Restructuring charges in the period for total employee severance (in number of employees) | employee | 300 | ||||
Payments for restructuring | $ 28 | ||||
Number of employees expected to be paid (in number of employees) | employee | 900 | 900 | |||
Exit costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 1 | $ 3 |
Reorganization of Business - Ne
Reorganization of Business - Net Charges Incurred by Business Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | $ 12 | $ 25 | $ 20 | $ 38 |
Products and Systems Integration | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | 9 | 19 | 16 | 28 |
Services and Software | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | $ 3 | $ 6 | $ 4 | $ 10 |
Reorganization of Business - Re
Reorganization of Business - Reorganization of Businesses Accruals (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Restructuring Reserve [Roll Forward] | ||||
Adjustments | $ (6) | |||
Employee separation costs | ||||
Restructuring Reserve [Roll Forward] | ||||
January 1, 2019 | $ 84 | |||
Additional Charges | 18 | $ 27 | 30 | $ 49 |
Adjustments | $ (3) | (10) | $ (14) | |
Amount Used | (28) | |||
June 29, 2019 | $ 76 | $ 76 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Recent Acquisition (Details) - USD ($) shares in Millions | Jul. 11, 2019 | Mar. 11, 2019 | Jan. 07, 2019 | Mar. 28, 2018 | Mar. 07, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 29, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 1,852,000,000 | $ 1,514,000,000 | |||||||
Avtec | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash paid for acquisition | $ 136,000,000 | ||||||||
Goodwill | 68,000,000 | ||||||||
Intangible assets acquired | 64,000,000 | ||||||||
Acquired assets | $ 4,000,000 | ||||||||
Useful life | 15 years | ||||||||
VaaS | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 445,000,000 | ||||||||
Debt assumed | $ 38,000,000 | ||||||||
Share-based compensation withheld, average service period | 1 year | ||||||||
Cash paid for acquisition | $ 231,000,000 | ||||||||
Goodwill | 261,000,000 | ||||||||
Intangible assets acquired | $ 141,000,000 | ||||||||
Shares acquired (in shares) | 1.4 | ||||||||
Share value | $ 160,000,000 | ||||||||
Total consideration | 391,000,000 | ||||||||
Acquired liabilities | 11,000,000 | ||||||||
Avigilon | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 974,000,000 | ||||||||
Debt assumed | 75,000,000 | ||||||||
Goodwill | 434,000,000 | ||||||||
Intangible assets acquired | 498,000,000 | ||||||||
Acquired liabilities | 42,000,000 | ||||||||
Cash payments | 980,000,000 | ||||||||
Cash acquired from acquisition | 107,000,000 | ||||||||
Transaction costs | 26,000,000 | ||||||||
Repayments of assumed debt | $ 40,000,000 | $ 35,000,000 | |||||||
Plant Holdings, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash paid for acquisition | $ 237,000,000 | ||||||||
Goodwill | 160,000,000 | ||||||||
Intangible assets acquired | 80,000,000 | ||||||||
Acquired liabilities | 3,000,000 | ||||||||
Goodwill expected to be tax deductible | 0 | ||||||||
Technology | Avtec | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets acquired | $ 43,000,000 | ||||||||
Technology | VaaS | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets acquired | $ 99,000,000 | ||||||||
Useful life | 10 years | ||||||||
Technology | Avigilon | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets acquired | 380,000,000 | ||||||||
Technology | Plant Holdings, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets acquired | 27,000,000 | ||||||||
Trade Names | Avigilon | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets acquired | 8,000,000 | ||||||||
Trade Names | Plant Holdings, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets acquired | 12,000,000 | ||||||||
Customer Relationships | Avtec | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets acquired | $ 21,000,000 | ||||||||
Customer Relationships | VaaS | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets acquired | $ 42,000,000 | ||||||||
Useful life | 15 years | ||||||||
Customer Relationships | Avigilon | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets acquired | $ 110,000,000 | ||||||||
Customer Relationships | Plant Holdings, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets acquired | $ 41,000,000 | ||||||||
Subsequent Event | WatchGuard | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 271,000,000 | ||||||||
Debt assumed | $ 16,000,000 | ||||||||
Share-based compensation withheld, average service period | 2 years | ||||||||
Cash paid for acquisition | $ 250,000,000 | ||||||||
Minimum | Avigilon | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life of intangibles | 2 years | ||||||||
Minimum | Plant Holdings, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life of intangibles | 10 years | ||||||||
Maximum | Avigilon | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life of intangibles | 20 years | ||||||||
Maximum | Plant Holdings, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life of intangibles | 20 years |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 1,924 | $ 1,924 | $ 1,719 | ||
Accumulated Amortization | 592 | 592 | 489 | ||
Intangible Assets And Goodwill | |||||
Amortization expense on intangibles | 52 | $ 53 | 102 | $ 94 | |
Finite-Lived Intangible Assets, Future Amortization Expense | |||||
2019 | 204 | 204 | |||
2020 | 200 | 200 | |||
2021 | 198 | 198 | |||
2022 | 195 | 195 | |||
2023 | 98 | 98 | |||
2024 | 73 | 73 | |||
Completed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 701 | 701 | 558 | ||
Accumulated Amortization | 119 | 119 | 92 | ||
Customer-related | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 1,147 | 1,147 | 1,085 | ||
Accumulated Amortization | 434 | 434 | 364 | ||
Other intangibles | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 76 | 76 | 76 | ||
Accumulated Amortization | $ 39 | $ 39 | $ 33 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Amortized Intangible Assets, Excluding Goodwill, By Business Segment (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,924 | $ 1,719 |
Accumulated Amortization | 592 | 489 |
Products and Systems Integration | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 610 | 510 |
Accumulated Amortization | 59 | 38 |
Services and Software | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,314 | 1,209 |
Accumulated Amortization | $ 533 | $ 451 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Carrying Amount of Goodwill (Details) $ in Millions | 6 Months Ended |
Jun. 29, 2019USD ($) | |
Goodwill Activity | |
Balance as of January 1, 2019 | $ 1,514 |
Goodwill acquired | 329 |
Purchase accounting adjustments | 9 |
Balance as of June 29, 2019 | 1,852 |
Products and Systems Integration | |
Goodwill Activity | |
Balance as of January 1, 2019 | 722 |
Goodwill acquired | 146 |
Purchase accounting adjustments | 0 |
Balance as of June 29, 2019 | 868 |
Services and Software | |
Goodwill Activity | |
Balance as of January 1, 2019 | 792 |
Goodwill acquired | 183 |
Purchase accounting adjustments | 9 |
Balance as of June 29, 2019 | $ 984 |
Uncategorized Items - msi06-29x
Label | Element | Value |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 127,000,000 |
Accounting Standards Update 2016-16 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (30,000,000) |