Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 07, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ZBRA | ||
Entity Registrant Name | ZEBRA TECHNOLOGIES CORP | ||
Entity Central Index Key | 877,212 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
EntityShellCompany | false | ||
Entity Common Stock, Shares Outstanding | 53,870,497 | ||
Entity Public Float | $ 7.6 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 44 | $ 62 |
Accounts receivable, net of allowances for doubtful accounts of $3 million as of December 31, 2018 and 2017, respectively | 520 | 479 |
Inventories, net | 520 | 458 |
Income tax receivable | 24 | 40 |
Prepaid expenses and other current assets | 54 | 24 |
Total Current assets | 1,162 | 1,063 |
Property, plant and equipment, net | 249 | 264 |
Goodwill | 2,495 | 2,465 |
Other intangibles, net | 232 | 299 |
Long-term deferred income taxes | 114 | 119 |
Other long-term assets | 87 | 65 |
Total Assets | 4,339 | 4,275 |
Current liabilities: | ||
Current portion of long-term debt | 157 | 51 |
Accounts payable | 552 | 424 |
Accrued liabilities | 322 | 296 |
Deferred revenue | 210 | 186 |
Income taxes payable | 60 | 43 |
Total Current liabilities | 1,301 | 1,000 |
Long-term debt | 1,434 | 2,176 |
Long-term deferred income taxes | 8 | 0 |
Long-term deferred revenue | 172 | 148 |
Other long-term liabilities | 89 | 117 |
Total Liabilities | 3,004 | 3,441 |
Stockholders’ Equity: | ||
Preferred stock, $.01 par value; authorized 10,000,000 shares; none issued | 0 | 0 |
Class A common stock, $.01 par value; authorized 150,000,0000 shares; issued 72,151,857 shares | 1 | 1 |
Additional paid-in capital | 294 | 257 |
Treasury stock at cost, 18,280,673 and 18,915,762 shares at December 31, 2018 and December 31, 2017, respectively | (613) | (620) |
Retained earnings | 1,688 | 1,248 |
Accumulated other comprehensive income (loss) | (35) | (52) |
Total Stockholders’ Equity | 1,335 | 834 |
Total Liabilities and Stockholders’ Equity | $ 4,339 | $ 4,275 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 3 | $ 3 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares Issued | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 72,151,857 | 0 |
Treasury stock, shares | 18,280,673 | 18,915,762 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net sales | |||
Total Net sales | $ 4,218 | $ 3,722 | $ 3,574 |
Cost of sales: | |||
Total Cost of sales | 2,237 | 2,012 | 1,932 |
Gross profit | 1,981 | 1,710 | 1,642 |
Operating expenses: | |||
Selling and marketing | 483 | 448 | 444 |
Research and development | 444 | 389 | 376 |
General and administrative | 328 | 301 | 307 |
Amortization of intangible assets | 97 | 184 | 229 |
Acquisition and integration costs | 8 | 50 | 125 |
Impairment of goodwill and other intangibles | 0 | 0 | 62 |
Exit and restructuring costs | 11 | 16 | 19 |
Total Operating expenses | 1,371 | 1,388 | 1,562 |
Operating income | 610 | 322 | 80 |
Other (expenses) income: | |||
Foreign exchange loss | (5) | (1) | (5) |
Interest expense, net | (91) | (227) | (193) |
Other, net | 10 | (6) | (11) |
Total Other expenses, net | (86) | (234) | (209) |
Income (loss) before income tax | 524 | 88 | (129) |
Income tax expense | 103 | 71 | 8 |
Net income (loss) | $ 421 | $ 17 | $ (137) |
Basic earnings (loss) per share (in USD per share) | $ 7.86 | $ 0.33 | $ (2.65) |
Diluted earnings (loss) per share (in USD per share) | $ 7.76 | $ 0.32 | $ (2.65) |
Tangible Products | |||
Net sales | |||
Total Net sales | $ 3,685 | $ 3,223 | $ 3,056 |
Cost of sales: | |||
Total Cost of sales | 1,871 | 1,677 | 1,593 |
Services and Software | |||
Net sales | |||
Total Net sales | 533 | 499 | 518 |
Cost of sales: | |||
Total Cost of sales | $ 366 | $ 335 | $ 339 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 421 | $ 17 | $ (137) |
Other comprehensive income (loss), net of tax: | |||
Unrealized gain (loss) on anticipated sales hedging transactions | 21 | (15) | 7 |
Unrealized gain on forward interest rate swaps hedging transactions | 9 | 6 | 0 |
Foreign currency translation adjustment | (13) | 2 | (4) |
Comprehensive income (loss) | $ 438 | $ 10 | $ (134) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | New Accounting Pronouncement, Early Adoption, Effect | Class A Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Retained EarningsNew Accounting Pronouncement, Early Adoption, Effect | Accumulated Other Comprehensive Income (Loss) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning Balance, Shares | 52,161,851 | |||||||
Beginning Balance at Dec. 31, 2015 | $ 893 | $ 1 | $ 194 | $ (631) | $ 1,377 | $ (48) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning Balance, Shares | 52,884,588 | |||||||
Issuance of treasury shares upon exercise of stock options, purchases under stock purchase plan and grants of restricted stock awards, shares | 817,943 | |||||||
Issuance of treasury shares upon exercise of stock options, purchases under stock purchase plan and grants of restricted stock awards net of cancellations | 11 | (14) | 25 | |||||
Shares withheld related to net share settlement (in shares) | (95,206) | |||||||
Shares withheld related to net share settlement | (8) | (8) | ||||||
Additional tax benefit resulting from exercise of options | 3 | 3 | ||||||
Share-based compensation | 27 | 27 | ||||||
Net income (loss) | (137) | (137) | ||||||
Unrealized loss on anticipated sales hedging transactions (net of income taxes) | 7 | 7 | ||||||
Unrealized gain on forward interest rate swaps hedging transactions (net of income taxes) | 0 | |||||||
Foreign currency translation adjustment | (4) | (4) | ||||||
Ending Balance at Dec. 31, 2016 | 792 | $ 1 | 210 | (614) | 1,240 | (45) | ||
Ending Balance, Shares at Dec. 31, 2016 | 52,884,588 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning Balance, Shares | 52,884,588 | |||||||
Beginning Balance, Shares | 53,236,095 | |||||||
Issuance of treasury shares upon exercise of stock options, purchases under stock purchase plan and grants of restricted stock awards, shares | 410,239 | |||||||
Issuance of treasury shares upon exercise of stock options, purchases under stock purchase plan and grants of restricted stock awards net of cancellations | 12 | 12 | 0 | |||||
Shares withheld related to net share settlement (in shares) | (58,732) | |||||||
Shares withheld related to net share settlement | (6) | (6) | ||||||
Share-based compensation | 35 | 35 | ||||||
Net income (loss) | 17 | 17 | ||||||
Unrealized loss on anticipated sales hedging transactions (net of income taxes) | (15) | (15) | ||||||
Unrealized gain on forward interest rate swaps hedging transactions (net of income taxes) | 6 | 6 | ||||||
Foreign currency translation adjustment | 2 | 2 | ||||||
Ending Balance at Dec. 31, 2017 | 834 | $ 1 | 257 | (620) | 1,248 | (52) | ||
Ending Balance, Shares at Dec. 31, 2017 | 53,236,095 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning Balance, Shares | 53,236,095 | |||||||
Cumulative effect of change in accounting principle | 9 | (9) | ||||||
Beginning Balance, Shares | 53,871,184 | |||||||
Issuance of treasury shares upon exercise of stock options, purchases under stock purchase plan and grants of restricted stock awards, shares | 704,137 | |||||||
Issuance of treasury shares upon exercise of stock options, purchases under stock purchase plan and grants of restricted stock awards net of cancellations | 10 | (8) | 18 | |||||
Shares withheld related to net share settlement (in shares) | (69,048) | |||||||
Shares withheld related to net share settlement | (11) | (11) | ||||||
Share-based compensation | 45 | 45 | ||||||
Net income (loss) | 421 | 421 | ||||||
Unrealized loss on anticipated sales hedging transactions (net of income taxes) | 21 | 21 | ||||||
Unrealized gain on forward interest rate swaps hedging transactions (net of income taxes) | 9 | 9 | ||||||
Foreign currency translation adjustment | (13) | (13) | ||||||
Ending Balance at Dec. 31, 2018 | $ 1,335 | $ 1 | $ 294 | $ (613) | $ 1,688 | $ (35) | ||
Ending Balance, Shares at Dec. 31, 2018 | 53,871,184 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning Balance, Shares | 53,871,184 | |||||||
Cumulative effect of change in accounting principle | ASU 2016-16 | $ 19 | $ 19 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 421 | $ 17 | $ (137) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 175 | 263 | 304 |
Impairment of goodwill, intangibles and other assets | 0 | 0 | 62 |
Investment (Gain)/Loss | (10) | 1 | 7 |
Amortization of debt issuance costs and discounts | 15 | 38 | 23 |
Share-based compensation | 45 | 35 | 27 |
Debt extinguishment costs | 1 | 65 | 0 |
Deferred income taxes | 2 | (9) | (44) |
Unrealized gain on forward interest rate swaps | (8) | (2) | 0 |
Other, net | 4 | 4 | 3 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (31) | 161 | 34 |
Inventories, net | (43) | (110) | 34 |
Other assets | (12) | 16 | 7 |
Accounts payable | 122 | (49) | 122 |
Accrued liabilities | 35 | 13 | (26) |
Deferred revenue | 51 | 17 | 7 |
Income taxes | 24 | 26 | (41) |
Other operating activities | (6) | (8) | (2) |
Net cash provided by operating activities | 785 | 478 | 380 |
Cash flows from investing activities: | |||
Acquisition of businesses, net of cash acquired | (72) | 0 | 0 |
Purchases of property, plant and equipment | (64) | (50) | (77) |
Proceeds from the sale of a business | 0 | 0 | 39 |
Proceeds from the sale of long-term investments | 2 | 0 | 0 |
Purchases of long-term investments | (3) | (1) | (1) |
Net cash used in investing activities | (137) | (51) | (39) |
Cash flows from financing activities: | |||
Payments of debt issuance costs and discounts | (2) | (5) | (5) |
Proceeds from issuance of long-term debt | 909 | 1,371 | 102 |
Payments of long term-debt | (1,566) | (1,825) | (484) |
Payments of debt extinguishment costs | (1) | (65) | 0 |
Proceeds from exercise of stock options and stock purchase plan purchases | 10 | 12 | 11 |
Taxes paid related to net share settlement of equity awards | (11) | (5) | (8) |
Net cash used in financing activities | (661) | (517) | (384) |
Effect of exchange rate changes on cash | (5) | (4) | 7 |
Net decrease in cash and cash equivalents | (18) | (94) | (36) |
Cash and cash equivalents at beginning of year | 62 | 156 | 192 |
Cash and cash equivalents at end of year | 44 | 62 | 156 |
Supplemental disclosures of cash flow information: | |||
Income taxes paid | 76 | 65 | 81 |
Interest paid | $ 90 | $ 195 | $ 180 |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Zebra Technologies Corporation and its wholly-owned subsidiaries (“Zebra” or the “Company”) is a global leader providing innovative Enterprise Asset Intelligence (“EAI”) solutions in the automatic identification and data capture solutions industry. We design, manufacture, and sell a broad range of products that capture and move data. We also provide a full range of services, including maintenance, technical support, repair, and managed services, including cloud-based subscriptions. End-users of our products and services include those in retail and e-commerce, transportation and logistics, manufacturing, healthcare, hospitality, warehouse and distribution, energy and utilities, and education industries around the world. We provide our products and services globally through a direct sales force and an extensive network of channel partners. The Company reclassified $41 million of costs from Accrued liabilities to Accounts payable on the Consolidated Balance Sheets for the year ended December 31, 2017 to conform to the current year presentation. This reclassification was made to the Consolidated Balance Sheets to more accurately present these current liabilities. A similar reclassification was made to the Consolidated Statement of Cash Flows resulting in a change to Accounts payable and Accrued liabilities within Net cash provided by operating activities for the years ended December 31, 2017 and 2016. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation These accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States and include the accounts of Zebra and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Fiscal Calendar The Company’s fiscal year is a 52-week period ending on December 31. Interim fiscal quarters end on a Saturday and generally include 13 weeks of operating activity. During the 2018 fiscal year, the Company’s quarter end dates were March 31, June 30, September 29 and December 31. Use of Estimates These consolidated financial statements were prepared using estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Examples of accounting estimates include: cash flow projections and other valuation assumptions included in business acquisition purchase price allocations as well as annual goodwill impairment testing; the allocation of transaction price to performance obligations in revenue transactions; inventory and product warranty reserves; useful lives of our tangible and intangible assets; and the recognition and measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. Cash and Cash Equivalents Cash consists primarily of deposits with banks. In addition, the Company considers highly liquid short-term investments with original maturities of less than three months to be cash equivalents. These highly liquid short-term investments are readily convertible to known amounts of cash and are so near their maturity that they present insignificant risk of a change in value because of changes in interest rates. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist primarily of amounts due to us from our customers in the course of normal business activities. Collateral on trade accounts receivable is generally not required. The Company maintains an allowance for doubtful accounts for estimated uncollectible accounts receivable. The allowance is based on historical experience and our assessment of delinquent accounts. Accounts are written off against the allowance account when they are determined to be no longer collectible. Inventories Inventories are stated at the lower of a moving-average cost (which approximates cost on a first-in, first-out basis) and net realizable value. Manufactured inventory cost includes materials, labor, and manufacturing overhead. Purchased inventory cost also includes internal purchasing overhead costs. Provisions are made to reduce excess and obsolete inventories to their estimated net realizable values. Inventory provisions are based on forecasted demand, experience with specific customers, the age and nature of the inventory, and the ability to redistribute inventory to other programs or to rework other consumable inventory. Property, Plant and Equipment Property, plant and equipment is stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the various classes of property, plant and equipment, which are 30 years for buildings and range from 3 to 10 years for all other asset categories. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or 10 years. Income Taxes The Company accounts for income taxes under the liability method in accordance with ASC 740, Income Taxes . Accordingly, deferred income taxes are provided for the future tax consequences attributable to differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Deferred tax assets and liabilities are measured using tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes the benefit of tax positions when it is more likely than not to be sustained on its technical merits. The Company recognizes interest and penalties related to income tax matters as part of income tax expense. The Company has elected consolidated tax filings in certain of its jurisdictions which may allow the group to offset one member’s income with losses of other members in the current period and on a carryover basis. The income tax effects of non-inventory intra-entity asset transfers are recognized in the period in which the transfer occurs. The Company classifies its balance sheet accounts by applying jurisdictional netting principles for locations where consolidated tax filing elections are in place. The Tax Cut and Jobs Act (“TCJA” or “the Act”) enacted on December 22, 2017 contains the Global Intangible Low-Taxed Income and Deduction for Foreign-Derived Intangible Income provisions (collectively referred to as “GILTI”), which relate to the taxation of certain foreign income and are effective for tax years beginning on or after January 1, 2018. The Company recognizes its GILTI inclusions as a charge to tax expense in the year included in its U.S. tax return. The effects of changes in tax rates and laws on deferred tax balances are recorded in the period of enactment as a component of income tax expense within continuing operations, even if they relate to items recorded within accumulated other comprehensive income (loss) (“AOCI”). The Company has elected to not reclassify the tax effects of these changes associated with the Act from AOCI to retained earnings. Such tax effects will be released into earnings when the underlying portfolio of assets or liabilities giving rise to the AOCI position are fully derecognized. Goodwill Goodwill is not amortized, rather it is tested annually for impairment, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Our annual impairment testing consists of comparing the estimated fair value of each reporting unit to it carrying value. If the carrying value of a reporting unit exceeds its estimated fair value, goodwill would be considered to be impaired and reduced to its implied fair value. We estimate the fair value of reporting units with valuation techniques including both the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected future operating results, economic projections, anticipated future cash flows and discount rates. The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry group. Fair value determinations require judgment and are sensitive to changes in underlying assumptions, estimates as well as market factors. Estimating the fair value of reporting units requires that we make a number of assumptions and estimates regarding our long-term growth and cash flow expectations as well as overall industry and economic conditions. These estimates and assumptions include, but are not limited to, projections of revenue and income growth rates, capital investments, competitive and customer trends, appropriate peer group selection, market-based discount rates and other market factors. We performed our annual goodwill impairment testing in the fourth quarter of 2018 using a quantitative approach which did not result in any impairments. See Note 6 , Goodwill and Other Intangibles, net for additional information. We believe our fair value estimates are reasonable. If actual financial results differ materially from current estimates or there are significant negative changes in market factors beyond our control, there could be an impairment of goodwill in the future. Other Intangible Assets Other intangible assets consist primarily of current technology, customer relationships, trade names, unpatented technology, and patents and patent rights. These assets are recorded at cost and amortized on a straight-line basis over the asset’s useful life which range from 3 years to 15 years . Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of The Company accounts for long-lived assets in accordance with the provisions of ASC 360, Property, Plant and Equipment which requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the sum of the undiscounted cash flows expected to result from the use and the eventual disposition of the asset. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Investments in Equity Securities The Company’s investments in equity securities are accounted for at cost, adjusted for impairment losses or changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. These investments are primarily in venture capital backed technology companies, where the Company's ownership interest is less than 20% of each investee and the Company does not have the ability to exercise significant influence. The Company held investments in equity securities in the amount of $25 million as of December 31, 2018 and 2017 , respectively. These investments are included in Other long-term assets on the Consolidated Balance Sheets. During the fiscal year ended December 31, 2018 , the Company recognized a pre-tax gain upon the sale of investments in equity securities totaling $10 million . The Company recognized impairment losses of $0 million , $1 million , and $7 million during the fiscal years ended December 31, 2018 , 2017 , and 2016 , respectively. These gains and losses were included within Other, net in the Consolidated Statements of Operations. Revenue Recognition Revenue includes sales of hardware, supplies and services (including repair services and product maintenance service contracts, which typically occur over time, and professional services such as installation, integration and provisioning, which typically occur in the early stages of a project). The average life of repair and maintenance service contracts is approximately three years. Professional service arrangements range in duration from a day to several weeks or months. We recognize revenues when we transfer control of promised goods or services to our customers in an amount that reflects the consideration to which we expect to receive in exchange for those goods or services. The Company elects to exclude from the transaction price sales and other taxes assessed by a governmental authority and collected by the Company from a customer. The Company also considers shipping and handling activities as part of the fulfillment costs, not as a separate performance obligation. See Note 3 , Revenues for additional information. Research and Development Costs Research and development (“R&D”) costs are expensed as incurred, and include: • Salaries, benefits, and other R&D personnel related costs; • Consulting and other outside services used in the R&D process; • Engineering supplies; • Engineering related information systems costs; and • Allocation of building and related costs. Advertising Advertising is expensed as incurred. Advertising costs totaled $18 million each for the years ended 2018 , 2017 and 2016 , respectively. Warranty In general, the Company provides warranty coverage of one year on mobile computers, printers and batteries. Advanced data capture products are warrantied from one to five years, depending on the product. Thermal printheads are warrantied for six months and battery-based products, such as location tags, are covered by a 90 -day warranty. A provision for warranty expense is adjusted quarterly based on historical and expected warranty experience. Contingencies The Company establishes a liability for loss contingencies when the loss is both probable and estimable. In addition, for some matters for which a loss is probable or reasonably possible, an estimate of the amount of loss or range of loss is not possible, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies. Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Our financial assets and liabilities that require recognition and fair value measurement under the accounting guidance generally include our employee deferred compensation plan investments, foreign currency derivatives, and interest rate swaps. In accordance with ASC 815, Derivatives and Hedging, we recognize derivative instruments and hedging activities as either assets or liabilities on the Consolidated Balance Sheets and measure them at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. See Note 10 , Derivative Instruments for additional information on the Company’s derivatives and hedging activities. The Company utilizes foreign currency forwards to hedge certain foreign currency exposures and interest rate swaps to hedge a portion of the variability in future cash flows on debt. We use broker quotations or market transactions, in either the listed or over-the-counter markets to value our foreign currency exchange contracts and relevant observable market inputs at quoted intervals, such as forward yield curves and the Company’s own credit risk to value our interest rate swaps. The Company’s securities held for its deferred compensation plans are measured at fair value using quoted prices in active markets for identical assets. If active markets for identical assets are not available to determine fair value, then we use quoted prices for similar assets or inputs that are observable either directly or indirectly. The carrying amounts of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these financial instruments. See Note 9 , Fair Value Measurements for financial assets and liabilities carried at fair value. Share-Based Compensation The Company has share-based compensation plans and an employee stock purchase plan under which shares of Class A Common Stock are available for future grants and sales. The Company recognizes compensation costs over the vesting period of up to 4 years, net of estimated forfeitures. Compensation costs associated with awards with graded vesting terms are recognized on a straight-line basis. See Note 13 , Share-Based Compensation for additional information. Foreign Currency Translation The balance sheet accounts of the Company’s subsidiaries that have not designated the U.S. dollar as its functional currency, are translated into U.S. dollars using the year-end exchange rate, and statement of earnings items are translated using the average exchange rate for the year. The resulting translation gains or losses are recorded in Stockholders’ equity as a cumulative translation adjustment, which is a component of AOCI within the Consolidated Balance Sheets. Acquisitions We account for acquired businesses using the acquisition method of accounting. This method requires that the purchase price be allocated to the identifiable assets acquired and liabilities assumed at their estimated fair values. The excess of the purchase price over the identifiable assets acquired and liabilities assumed is recorded as goodwill. The estimates used to determine the fair value of long-lived assets, such as intangible assets, can be complex and require judgment. We use information available to us to make fair value determinations and engage independent valuation specialists, when necessary, to assist in the fair value determination of significant acquired long-lived assets. While we use our best estimates and assumptions as a part of the purchase price allocation process, our estimates are inherently uncertain and subject to refinement during the measurement period. Critical estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from revenues and operating activities, customer attrition rates, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but due to the inherent uncertainty during the measurement period, we may record adjustments to the fair value of assets acquired and liabilities assumed, with the corresponding adjustment to goodwill. Recently Adopted Accounting Pronouncements On January 1, 2018, we adopted Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”) applying the modified retrospective method to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605, Revenue Recognition (“ASC 605”). Under ASC 606, revenue is recognized upon the transfer of control of goods or services under a five-step model, whereas under ASC 605 revenue was recognized under a risk and reward-based model. The adoption of ASC 606 did not have a material effect on the Company’s consolidated financial statements or results of operations. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet related to the adoption of ASC 606 were as follows (in millions): As Reported December 31, 2017 Adjustment As Adjusted January 1, 2018 Assets: Inventories, net (1) $ 458 $ (3 ) $ 455 Prepaid expenses and other current assets (2) 24 7 31 Long-term deferred income taxes (3) 119 (5 ) 114 Other long-term assets (4) 65 12 77 Liabilities: Deferred revenue (5) 186 (2 ) 184 Long-term deferred revenue (6) 148 (6 ) 142 Stockholders’ Equity: Retained earnings 1,248 19 1,267 (1) Reflects an adjustment of $(3) million related to changes in revenue recognition patterns. (2) Reflects an adjustment of $ 7 million related to the recognition of contract assets. (3) Reflects the income tax effect of $ (5) million related to the adjustments made for the adoption of ASC 606. (4) Reflects an adjustment of $ 12 million related to the capitalization of costs to obtain contracts (primarily comprised of sales commissions associated with longer term support service contracts). (5) Reflects an adjustment of $ (3) million related to reallocation of revenue between performance obligations and $ 1 million related to changes in the timing of revenue recognition. (6) Reflects an adjustment of $ (6) million related to reallocation of revenue between performance obligations. Under the modified retrospective method of adoption, we are required to disclose the impact to the Consolidated Financial Statements had we continued to follow our accounting policies under the previous revenue recognition guidance. Had the Company applied the previous revenue recognition guidance, revenue would have been $4 million lower for the year ended December 31, 2018. See Note 3 , Revenues for further information. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. The Company adopted this ASU as of January 1, 2018, in conjunction therewith, the Company elected to measure equity investments without readily determinable fair values at cost, adjusted only for impairment losses or for observable price changes in orderly transactions for the identical or similar investment of the same issuer. Prior to ASU 2016-01, such equity investments of the Company were measured at cost, adjusted only for impairment losses. The adoption of this ASU did not have a material impact to the Company's consolidated financial statements or related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) -Measurement of Credit Losses on Financial Instruments . The new standard requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. It replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. There are two transition methods available under the new standard dependent upon the type of financial instrument, either cumulative effect or prospective. The standard will be effective for the Company in the first quarter of 2020. Earlier adoption is permitted only for annual periods after December 15, 2018. Management has assessed the impact of the new standard and determined, based on current operations, that there will not be a material impact to the Company’s consolidated financial statements and disclosures upon adoption in the first quarter of 2020. In February 2016, the FASB issued ASU 2016-02, Leases (Subtopic 842). Also, in July 2018, the FASB issued ASU 2018-11, Leases (Subtopic 842): Targeted Improvements. Together, these ASUs increase the transparency and comparability of organizations by recognizing Right-of-use (“ROU”) assets and Lease liabilities on the Consolidated Balance Sheets and disclosing key quantitative and qualitative information about leasing arrangements. The principal difference from previous guidance is that the ROU assets and Lease liabilities arising from operating leases were not previously recognized in the Consolidated Balance Sheets. The recognition, measurement and cash flows arising from a lease by a lessee have not significantly changed. The ASUs will be effective for the Company in the first quarter of 2019. In transition, lessees and lessors are required to recognize and measure leases at either the beginning of the earliest period presented or the beginning of the period adopted, using a modified retrospective approach. Management expects to elect to not adjust the comparative reporting periods, and apply the ASUs beginning in the period of adoption. In transition, there are also a number of optional practical expedients that entities may elect to apply. Management expects to elect certain practical expedients that it will apply upon transition, which principally include the election to not reassess existing or expired contracts to determine if such contracts contain a lease or if the lease classification would differ, as well as the election to not separate lease and non-lease components for arrangements where the Company is a lessee. Management is finalizing its assessment of the impact of these elections and adoption of this standard on its consolidated financial statements. Management has identified and collected data on its significant leases and selected a system to support future accounting and disclosure requirements and expects to recognize ROU assets related to operating leases of approximately $100 million and Lease liabilities of approximately $120 million on its Consolidated Balance Sheet upon adoption in the first quarter of 2019. The lease liabilities to be recognized will be measured based upon the present value of minimum future payments and the ROU assets to be recognized will be equal to lease liabilities, adjusted for prepaid and accrued rent balances which are recorded in the Consolidated Balance Sheets as of December 31, 2018. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This ASU clarifies existing guidance related to implementation costs incurred in cloud computing arrangements, including the recognition, subsequent measurement, and financial statement presentation of such costs. The standard will be effective for the Company in the first quarter of 2020, with earlier adoption permitted. Management is still assessing the impact of adoption on its consolidated financial statements. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues As prescribed in ASC 606, the Company recognizes revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Performance Obligations We enter into contract arrangements that may include various combinations of tangible products and services, which generally are capable of being distinct and accounted for as separate performance obligations. For these types of contract arrangements, we evaluate whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract has more than one performance obligation. This evaluation requires judgment and the decision to combine a group of contracts or separate the combined or single contract into multiple performance obligations could change the amount of revenue recorded in the reporting period. We use the accounting guidance on “capable of being distinct” and “distinct within the context of the contract” to assist with the evaluation. For contract arrangements that include multiple performance obligations, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices for the products and/or services underlying each performance obligation. When the standalone selling prices are not directly observable, we estimate the standalone selling prices primarily based on the expected cost-plus margin approach. For arrangements comprised strictly of the sale of product and performance of maintenance type services where the standalone selling price of the maintenance service is not discernible, we estimate the standalone selling price of the maintenance contract using the residual approach. When the residual approach cannot be applied, regional pricing, marketing strategies and business practices are evaluated and analyzed to derive the estimated standalone selling price using a cost-plus margin methodology. The Company recognizes revenue when transfer of control has occurred for the goods or services sold. Control is deemed to have been transferred when the customer has the ability to direct the use of and has obtained substantially all of the remaining benefits from the goods and services sold. The Company uses judgment in the evaluation of the following criteria: 1) the customer simultaneously receives and consumes the benefits provided by the transfer of goods or service; 2) the performance creates or enhances an asset that is under control of the customer; 3) the performance does not create an asset with an alternative use to the Company; and 4) the Company has an enforceable right to payment, in order to determine whether control transfers at a point in time or over time. For each performance obligation satisfied over time, the Company measures its progress toward completion to determine the timing of revenue recognition. Judgment is also used in the evaluation of the following transfer of control criteria: 1) the Company has a present right to payment for the asset; 2) the legal title to the asset has transferred to the customer; 3) the customer has physical possession of the asset; 4) the customer has the significant risks and rewards of ownership of the asset; and 5) the customer has accepted the asset, in order to determine when revenue should be recognized in a point in time revenue recognition pattern. Assuming all other criteria for revenue recognition have been met, for products and services sold on a standalone basis, revenue is generally recognized upon shipment and by using an output method or time-based method respectively. In cases where a bundle of products and services are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control. The Company’s remaining obligations that are greater than one year in duration relate primarily to repair and support services. The aggregated transaction price allocated to remaining performance obligations related to these types of service arrangements was $489 million as of December 31, 2018 . We expect to recognize these remaining performance obligations over a period of approximately two years. For some of our transactions, products are sold with a right of return, and we may also provide other rebates, price protection, or incentives, which are accounted for as variable consideration. The Company estimates the amount of variable consideration by using the expected value or the most likely amount method and reduces the revenue by those estimated amounts, only to the extent it is probable that a significant reversal in the cumulative revenue recognized will not occur. These estimates are reviewed and updated, as necessary, at the end of each reporting period. Revenue recognized in the reporting period from performance obligations satisfied in previous periods was not material for the year ended December 31, 2018 . Disaggregation of Revenue The following table presents our revenues disaggregated by product category for each of our segments, AIT and EVM, for the year ended December 31, 2018 (in millions): Year Ended December 31, 2018 Product Category Segment Tangible Products Services and Software Total AIT $ 1,298 $ 125 $ 1,423 EVM 2,387 408 2,795 Total $ 3,685 $ 533 $ 4,218 In addition, refer to Note 18 , Segment Information & Geographic Data for Net sales to customers by geographic region. We recognize revenue arising from performance obligations outlined in contracts with our customers that are satisfied at a point in time and over time. Substantially all of our revenue for tangible products is recognized at a point in time, whereby revenue for services and software is predominantly recognized over time. Contract Balances Progress on satisfying performance obligations under contracts with customers and the related billings and cash collections are recorded on the Consolidated Balance Sheets in Accounts receivable, net and Prepaid expenses and other current assets. The opening and closing contract assets balances were $7 million and $5 million , as of January 1, 2018 and December 31, 2018 , respectively, and were recorded within Prepaid expenses and other current assets on the Consolidated Balance Sheets. These contract assets result from timing differences between the billing schedule and the products and services delivery schedules, as well as, the impact from the allocation of the transaction price among performance obligations for contracts that include multiple performance obligations. Our policy is to test these contract asset balances for impairment in accordance with ASC 310, Receivables . No impairment losses have been recorded for the year ended December 31, 2018 . Deferred revenue on the Consolidated Balance Sheets, consist of payments and billings in advance of our performance. The combined short-term and long-term deferred revenue balances were $382 million and $334 million as of December 31, 2018 and December 31, 2017, respectively. During the year ended December 31, 2018 , the Company recognized $181 million in revenue which was previously included in the beginning balance of deferred revenue. Our payment terms vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts do not include a significant financing component. Costs to obtain a contract Our incremental direct costs of obtaining a contract, which consist of sales commissions and incremental fringe benefits, are deferred and amortized over the weighted-average contract term, consistent with the guidance in ASC 340 Other Assets and Deferred Costs . The incremental costs to obtain a contract, which were previously expensed as incurred under ASC 605, and the determination of the amortization period are derived at a portfolio level and the amortization is recognized on a straight-line basis. The adoption of ASC 606 required the capitalization of these costs which resulted in an adjustment to increase retained earnings. The Company recorded a $12 million increase to Other long-term assets on the Consolidated Balance Sheet as of January 1, 2018. The Company recognized amortization expense related to commissions during the year ended December 31, 2018 of $10 million . The ending balance of the deferred commissions was $15 million as of December 31, 2018 . The Company elected a practical expedient permitted by ASC 606, whereby the incremental costs of obtaining a contract are expensed as incurred if the amortization period of the assets would otherwise be one year or less. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of Inventories, net are as follows (in millions): December 31, December 31, Raw material $ 125 $ 116 Work in process 3 1 Finished goods 392 341 Total $ 520 $ 458 |
Business Acquisition and Divest
Business Acquisition and Divestiture | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Business Acquisition and Divestiture | Business Acquisition and Divestiture Acquisition On August 14, 2018 , the Company acquired all outstanding equity interests of Xplore Technologies Corporation (“Xplore”) . The Xplore business designs, integrates, markets and sells rugged tablets that are primarily used by industrial, government, and field service organizations. The acquisition of Xplore is intended to expand the Company’s portfolio of mobile computing devices to serve a wider range of customers. The Xplore acquisition was accounted for under the acquisition method of accounting for business combinations. In connection with this acquisition, the Company paid $87 million in cash during the third quarter of 2018, which included, $72 million for the net assets acquired, a $9 million payment of Xplore debt as well as $6 million of other Xplore transaction-related obligations . Additionally, we incurred $8 million of cash acquisition-related costs during 2018 (primarily third-party transaction and advisory fees), which are reflected as Acquisition and integration costs on the Consolidated Statements of Operations. The Company utilized estimated fair values as of August 14, 2018 to allocate the total consideration paid to the net tangible and intangible assets acquired and liabilities assumed. The fair value of these net assets acquired was based on a number of estimates and assumptions as well as customary valuation procedures and techniques, including relief from royalty and excess earnings methodologies. During the fourth quarter of 2018, the Company recorded measurement period adjustments relating to facts and circumstances existing as of the acquisition date. The primary measurement period adjustments were $1 million increase in other liabilities assumed, $1 million decrease in inventory and $2 million increase in goodwill. While we believe these estimates provide a reasonable basis to record the net assets acquired, the purchase price allocation is considered preliminary and subject to adjustment during the measurement period, which is up to one year from the acquisition date of August 14, 2018. The primary fair value estimates considered preliminary are identifiable intangible assets and income tax-related items. The preliminary opening balance sheet of Xplore was included in the Company’s Consolidated Balance Sheet and operating results beginning August 14, 2018. The Company has not included unaudited proforma results, as if Xplore had been acquired as of January 1, 2018, as it would not yield materially different results. The preliminary purchase price allocation, reflecting interim measurement period adjustments, to assets acquired and liabilities assumed was as follows (in millions): Accounts receivable $ 10 Inventory 22 Identifiable intangible assets 32 Other assets acquired 4 Debt (9 ) Accounts payable (8 ) Deferred revenues (7 ) Other liabilities assumed (7 ) Net Assets Acquired $ 37 Goodwill on acquisition 35 Total consideration $ 72 The $35 million of goodwill will be non-deductible for tax purposes. The goodwill principally relates to the planned expansion of the Xplore product offerings into current and new markets. This goodwill has been allocated to the EVM segment. The preliminary purchase price allocation to identifiable intangible assets acquired was: Fair Value (in millions) Life (in years) Customer relationships $ 16 9 Current technology 15 7 Trade names 1 3 Total identifiable intangible assets $ 32 Divestiture On September 13, 2016, the Company entered into an Asset Purchase Agreement with Extreme Networks, Inc. to dispose of the Company’s wireless LAN (“WLAN”) business. On October 28, 2016, the Company completed the disposition of WLAN and recorded net proceeds of $39 million . In 2017, the Company and Extreme Networks, Inc. finalized the net working capital amounts for the Divestiture Group. The finalized amount did not differ materially from the original estimate. The Company incurred a non-cash pre-tax charge related to the disposal group during the third quarter of 2016. This charge, which totaled $62 million , consisted of impairments of goodwill for $32 million and other intangibles for $30 million and is shown separately on the Consolidated Statements of Operations for the year ended December 31, 2016. WLAN operating results are reported in the EVM segment through the closing date of the WLAN divestiture of October 28, 2016. Within the fiscal year ended December 31, 2016 Consolidated Statement of Operations, the Company generated revenue and gross profit from these assets of $106 million and $47 million , respectively. |
Goodwill and Other Intangibles,
Goodwill and Other Intangibles, net | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles, net | Goodwill and Other Intangibles, net Goodwill Changes in the net carrying value amount of goodwill were as follows (in millions): Total Goodwill as of December 31, 2016 $ 2,458 Foreign exchange impact 7 Goodwill as of December 31, 2017 2,465 Xplore acquisition (1) 35 Foreign exchange impact (5 ) Goodwill as of December 31, 2018 $ 2,495 (1) See Note 5 , Business Acquisition and Divestiture for detail on the Xplore acquisition. As of December 31, 2018 , goodwill totaled $2.3 billion for the EVM reportable segment and $154 million for the AIT reportable segment. The Company’s goodwill balance consists of five reporting units with an aggregate carrying value of $2.5 billion . The majority of the goodwill relates to the 2014 Enterprise acquisition. The Company completed its annual goodwill impairment testing during the fourth quarter of 2018 utilizing a quantitative approach. The estimated fair value of each reporting unit exceeded its carrying value by at least 40% . There is risk of future impairment to the extent that individual reporting unit performance does not meet projections. Additionally, if our current assumptions and estimates, including projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors, are not met, or if other valuation factors outside of our control change unfavorably, the estimated fair value of our reporting units could be adversely affected, leading to a potential impairment in the future. No events occurred during the years ended December 31, 2018 and 2017 that indicated it was more likely than not that our goodwill was impaired. During the year ended December 31, 2016, goodwill impairment of $32 million was recorded related to the WLAN business divestiture and reflected within the EVM segment. Other Intangibles, net The balances in Other Intangibles, net consisted of the following (in millions): As of December 31, 2018 As of December 31, 2017 Gross Carrying Amount Accumulated Net Gross Carrying Amount Accumulated Net Amortized intangible assets Current technology $ 40 $ (26 ) $ 14 $ 24 $ (23 ) $ 1 Trade Names 41 (41 ) — 41 (41 ) — Unpatented technology 241 (221 ) 20 242 (205 ) 37 Patent and patent rights 233 (223 ) 10 235 (215 ) 20 Customer relationships 493 (305 ) 188 481 (240 ) 241 Total $ 1,048 $ (816 ) $ 232 $ 1,023 $ (724 ) $ 299 Amortization expense was $97 million , $184 million , and $229 million for fiscal years ended 2018, 2017 and 2016, respectively. Aside from amortization expense, the change in other intangible assets in 2018 relates to the addition of Xplore acquisition as well as foreign currency translation. Estimated future intangible asset amortization expense is as follows (in millions): Year Ended December 31, Amount 2019 $ 87 2020 42 2021 41 2022 35 2023 6 Thereafter 21 Total $ 232 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, net is comprised of the following (in millions): December 31, 2018 2017 Buildings $ 57 $ 54 Land 7 8 Machinery and equipment 204 233 Furniture and office equipment 18 19 Software and computer equipment 161 235 Leasehold improvements 75 69 Projects in progress 24 23 546 641 Less accumulated depreciation (297 ) (377 ) Property, plant and equipment, net $ 249 $ 264 Depreciation expense was $78 million , $79 million and $75 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. The reduction in gross cost and accumulated depreciation balances is due to a significant level of substantially depreciated asset retirements in the current year. |
Costs Associated with Exit and
Costs Associated with Exit and Restructuring Activities | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Costs Associated with Exit and Restructuring Activities | Costs Associated with Exit and Restructuring Activities In the first quarter of 2017, the Company’s executive leadership approved an initiative to continue the Company’s efforts to increase operational efficiency (the “Productivity Plan”). The Company expects the Productivity Plan to build upon the exit and restructuring initiatives specific to the October 2014 acquisition of the Enterprise business from Motorola Solutions, Inc. (the “Acquisition Plan”). The Company substantially completed all initiatives under the Acquisition Plan as of December 31, 2017. Actions under the Productivity Plan include organizational design changes, process improvements and automation. Exit and restructuring costs are not included in the operating results of our segments as they do not impact the specific segment measures as reviewed by our Chief Operating Decision Maker and therefore are reported as a component of Corporate, eliminations. See Note 18 , Segment Information & Geographic Data . Total exit and restructuring charges of $23 million life-to-date specific to the Productivity Plan have been recorded through December 31, 2018 . Exit and restructuring charges related to the Productivity Plan were $11 million and $12 million for the years ended December 31, 2018 and 2017 , respectively. The Company has substantially completed the activities associated with this plan. Total exit and restructuring charges of $69 million life-to-date specific to the Acquisition Plan have been recorded through December 31, 2018 . Exit and restructuring charges were $0 million , $4 million and $19 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. There are no remaining charges associated with this plan. Total life-to-date costs associated with the Productivity Plan and Acquisition Plan of $92 million consist of $80 million related to severance, stay bonuses, and other employee-related expenses and $12 million related to obligations for future lease payments. A rollforward of the exit and restructuring accruals is as follows (in millions): Year Ended December 31, 2018 2017 2016 Balance at beginning of year $ 8 $ 10 $ 15 Charged to earnings 11 16 19 Cash paid (14 ) (18 ) (22 ) WLAN Divestiture — — (2 ) Balance at the end of year $ 5 $ 8 $ 10 The $5 million accrual as of December 31, 2018 is reflected within the Consolidated Balance Sheet as $4 million within Accrued liabilities and $1 million within Other long-term liabilities. The long-term portion of the accrual relates to non-cancellable lease payments associated with exited facilities whose latest term expires May 2021 . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities are measured using inputs from three levels of the fair value hierarchy in accordance with ASC Topic 820, Fair Value Measurements . 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 at the measurement date. It establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into the following three broad levels: Level 1: Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs (e.g. U.S. Treasuries & money market funds). Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. In addition, the Company considers counterparty credit risk in the assessment of fair value. The Company’s financial assets and liabilities carried at fair value as of December 31, 2018 , are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Foreign exchange contracts (1) $ 1 $ 15 $ — $ 16 Forward interest rate swap contracts (2) — 5 — 5 Money market investments related to the deferred compensation plan 17 — — 17 Total Assets at fair value $ 18 $ 20 $ — $ 38 Liabilities: Liabilities related to the deferred compensation plan 17 — — 17 Total Liabilities at fair value $ 17 $ — $ — $ 17 The Company’s financial assets and liabilities carried at fair value as of December 31, 2017 , are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Money market investments related to the deferred compensation plan $ 15 $ — $ — $ 15 Total Assets at fair value $ 15 $ — $ — $ 15 Liabilities: Forward interest rate swap contracts (2) $ — $ 18 $ — $ 18 Foreign exchange contracts (1) 2 9 — 11 Liabilities related to the deferred compensation plan 15 — — 15 Total Liabilities at fair value $ 17 $ 27 $ — $ 44 (1) The fair value of the foreign exchange contracts is calculated as follows: a. Fair value of a put option contract associated with forecasted sales hedges is calculated using bid and ask rates for similar contracts. b. Fair value of regular forward contracts associated with forecasted sales hedges is calculated using the year-end exchange rate adjusted for current forward points. c. Fair value of hedges against net assets is calculated at the year-end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at year end (Level 2). If this is the case, the fair value is calculated at the rate at which the hedge is being settled (Level 1). (2) The fair value of forward interest rate swaps is based upon a valuation model that uses relevant observable market inputs at the quoted intervals, such as forward yield curves, and is adjusted for the Company’s credit risk and the interest rate swap terms. See gross balance reporting in Note 10 , Derivative Instruments . |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments In the normal course of business, the Company is exposed to global market risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company uses derivative instruments to manage its exposure to such risks and may elect to designate certain derivatives as hedging instruments under ASC 815, Derivatives and Hedging . The Company formally documents all relationships between designated hedging instruments and hedged items as well as its risk management objectives and strategies for undertaking hedge transactions. The Company does not hold or issue derivatives for trading or speculative purposes. In accordance with ASC 815, the Company recognizes derivative instruments as either assets or liabilities on the Consolidated Balance Sheets and measures them at fair value. The following table presents the fair value of its derivative instruments (in millions): Asset / (Liability) Balance Sheets Classification Fair Values as of December 31, 2018 2017 Derivative instruments designated as hedges: Foreign exchange contracts Prepaid expenses and other current assets $ 15 $ — Foreign exchange contracts Accrued liabilities — (9 ) Forward interest rate swaps Accrued liabilities — (2 ) Forward interest rate swaps Other long-term liabilities — (8 ) Total derivative instruments designated as hedges $ 15 $ (19 ) Derivative instruments not designated as hedges: Foreign exchange contracts Prepaid expenses and other current assets $ 1 $ — Forward interest rate swaps Prepaid expenses and other current assets 2 — Forward interest rate swaps Other long-term assets 3 — Foreign exchange contracts Accrued liabilities — (2 ) Forward interest rate swaps Accrued liabilities — (1 ) Forward interest rate swaps Other long-term liabilities — (7 ) Total derivative instruments not designated as hedges 6 (10 ) Total net derivative asset (liability) $ 21 $ (29 ) The following table presents the net gains (losses) from changes in fair values of derivatives that are not designated as hedges (in millions): Gain (Loss) Recognized in Income Year Ended December 31, Statements of Operations Classification 2018 2017 2016 Derivative instruments not designated as hedges: Foreign exchange contracts Foreign exchange loss $ 1 $ (24 ) $ 5 Forward interest rate swaps Interest expense, net 8 2 — Total gain (loss) recognized in income $ 9 $ (22 ) $ 5 Activities related to derivative instruments are included within Net cash provided by operating activities within the Statements of Cash Flows. Credit and Market Risk Management Financial instruments, including derivatives, expose the Company to counterparty credit risk of nonperformance and to market risk related to currency exchange rate and interest rate fluctuations. The Company manages its exposure to counterparty credit risk by establishing minimum credit standards, diversifying its counterparties, and monitoring its concentrations of credit. The Company’s counterparties are commercial banks with expertise in derivative financial instruments. The Company evaluates the impact of market risk on the fair value and cash flows of its derivative and other financial instruments by considering reasonably possible changes in interest rates and currency exchange rates. The Company continually monitors the creditworthiness of the customers to which it grants credit terms in the normal course of business. The terms and conditions of the Company’s credit policies are designed to mitigate or eliminate concentrations of credit risk with any single customer. The Company’s master netting and other similar arrangements with the respective counterparties allow for net settlement under certain conditions, which are designed to reduce credit risk by permitting net settlement with the same counterparty. We elect to present the assets and liabilities of our derivative financial instruments on a net basis on the Consolidated Balance Sheets. If the derivative financial instruments had been presented gross on the Consolidated Balance Sheets, the asset and liability positions each would have been increased by $1 million and $11 million as of December 31, 2018 and 2017 , respectively. Foreign Currency Exchange Risk Management The Company conducts business on a multinational basis in a wide variety of foreign currencies. Exposure to market risk for changes in foreign currency exchange rates arises from euro denominated external revenues, cross-border financing activities between subsidiaries, and foreign currency denominated monetary assets and liabilities. The Company generally seeks to preserve the economic value of non-functional currency denominated cash flows by reducing transaction exposures with natural offsets, and secondarily through foreign exchange forward and option contracts, as deemed appropriate. The Company manages the exchange rate risk of anticipated euro denominated sales by using forward contracts which typically mature within twelve months of execution. The Company designates these derivative contracts as cash flow hedges. Unrealized gains and losses on these contracts are deferred in AOCI on the Consolidated Balance Sheets until the contract is settled and the hedged sale is realized. The realized gain or loss is then recorded as an adjustment to Net sales on the Consolidated Statement of Operations. Realized gains or (losses) reclassified to Net sales were $13 million , $(8) million , and $(7) million for the years ending December 31, 2018 , 2017 and 2016 , respectively. As of December 31, 2018 and 2017 , the notional amounts of the Company’s foreign exchange cash flow hedges were €496 million and €389 million , respectively. The Company has reviewed its cash flow hedges for effectiveness and determined they are highly effective . The Company uses forward contracts, which are not designated as hedging instruments, to manage its exposures related to net assets denominated in foreign currencies. These forward contracts typically mature within one month after execution. Monetary gains and losses on these forward contracts are recorded in income each quarter and are generally offset by the transaction gains and losses related to their net asset positions. The notional values and the net fair value of these outstanding contracts are as follows (in millions): December 31, 2018 2017 Notional balance of outstanding contracts: British Pound/U.S. Dollar £ 1 £ 13 Euro/U.S. Dollar € 45 € 108 British Pound/Euro £ 6 £ 5 Canadian Dollar/U.S. Dollar C$ 6 C$ 12 Czech Koruna/U.S. Dollar Kč Kč 361 Brazilian Real/U.S. Dollar R$ — R$ 34 Australian Dollar/U.S. Dollar A$ 47 A$ 55 Swedish Krona/U.S. Dollar kr — kr 13 Japanese Yen/U.S. Dollar ¥ 396 ¥ 151 Singapore Dollar/U.S. Dollar S$ 7 S$ 4 Mexican Peso/U.S. Dollar Mex$ 225 Mex$ Chinese Yuan/U.S. Dollar ¥ 71 ¥ South African Rand/U.S. Dollar $ 42 $ — Net fair value of asset (liability) outstanding contracts $ 1 $ (2 ) Beginning in the third quarter of 2018, the Company significantly reduced the use of non-designated forward contracts to manage Euro exposure with the commencement of Euro denominated borrowings on the Revolving Credit Facility. See Note 11 , Long-Term Debt . Interest Rate Risk Management The Company’s debt consists of borrowings under two term loans (“Term Loan A” and “Term Loan B”, also referred to collectively as the “Term Loans”), the Revolving Credit Facility and the Receivables Financing Facility which bear interest at variable rates plus an applicable margin. See Note 11 , Long-Term Debt . As a result, the Company is exposed to market risk associated with the variable interest rate payments on the Term Loans, Revolving Credit Facility and Receivables Financing Facility. The Company manages its exposure to changes in interest rates by utilizing interest rate swaps to hedge this exposure and to achieve a desired proportion of fixed versus floating-rate debt, based on current and projected market conditions. The Company does not enter into derivative instruments for trading or speculative purposes. In December 2017, the Company entered into a forward long-term interest rate swap agreement with a notional amount of $800 million to lock into a fixed LIBOR interest rate base for debt facilities subject to monthly interest payments, including Term Loan A, the Revolving Credit Facility and Receivables Financing Facility. Under the terms of the agreement, $800 million in variable-rate debt will be swapped for a fixed interest rate with net settlement terms due effective starting in December 2018 and ending in December 2022. The changes in fair value of these swaps are not designated as hedges and are recognized immediately as Interest expense, net on the Consolidated Statement of Operations. The Company previously had a floating-to-fixed interest rate swap, which was designated as a cash flow hedge. This swap was terminated and hedge accounting treatment was discontinued in 2014. The terminated swap has approximately $2 million of pretax losses remaining in AOCI as of December 31, 2018 , which will be reclassified into Interest expense, net on the Consolidated Statements of Operations through June 2021. There was $2 million expensed by the Company in the year ended December 31, 2018 . During the fourth quarter of 2018, the Company terminated three interest rate swaps. The first swap was entered into with a syndicated group of commercial banks for the purpose of fixing the interest rate on the Company’s floating-rate debt. The second swap largely offset the first swap, causing interest payments to again be exposed to rate fluctuations. Neither of these instruments were designated as accounting hedges, with changes in fair value recognized in Interest expense, net on the Consolidated Statements of Operations. The third interest rate swap converted the floating-rate debt to fixed-rate debt and was designated as a cash flow hedge. As part of the termination, the Company settled all three swaps resulting in $7 million cash payment to counterparties that was classified within Net cash provided by operating activities. Hedge accounting treatment was discontinued on the third swap, which has less than $1 million of pretax losses remaining in AOCI as of December 31, 2018 . This $1 million will be reclassified into Interest expense, net on the Consolidated Statements of Operations through June 2021. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The following table shows the carrying value of the Company’s debt (in millions): December 31, 2018 2017 Term Loan A $ 608 $ 679 Term Loan B 445 1,160 Revolving Credit Facility 408 275 Receivables Financing Facility 139 135 Total debt 1,600 2,249 Less: Debt issuance costs (5 ) (7 ) Less: Unamortized discounts (4 ) (15 ) Less: Current portion of long-term debt (157 ) (51 ) Total long-term debt $ 1,434 $ 2,176 At December 31, 2018 , the future maturities of long-term debt, excluding debt discounts and issuance costs, are as follows (in millions): 2019 $ 157 2020 55 2021 1,388 2022 — 2023 — Thereafter — Total future maturities of long-term debt $ 1,600 All borrowings as of December 31, 2018 were denominated in U.S. Dollars, except for €92 million under the Revolving Credit Facility that was borrowed in Euros. The estimated fair value of our long-term debt approximated $1.6 billion and $2.2 billion as of December 31, 2018 and 2017 , respectively. These fair value amounts, developed based on inputs classified as Level 2 within the fair value hierarchy, represent the estimated value at which the Company’s lenders could trade its debt within the financial markets and does not represent the settlement value of these long-term debt liabilities to the Company. The fair value of the long-term debt will continue to vary each period based a number of factors including fluctuations in market interest rates, as well as changes to the Company’s credit ratings. Credit Facilities On July 26, 2017, the Company entered into an Amended and Restated Credit Agreement which provided for the issuance of Term Loan A and increased funding available under the Revolving Credit Facility to $500 million . In conjunction therewith, the Company capitalized $5 million of debt issuance costs and partially paid down and repriced Term Loan B. The Company applied the provisions of ASC Subtopic 470- 50, Modifications and Extinguishments (“ASC 470-50”) on a creditor by creditor basis concluding that the terms of Term Loan B were not substantially different and that modification accounting was appropriate to apply. As part of Term Loan B activity, the Company recorded approximately $6 million of pre-tax charges for third-party fees for arranger, legal and other services and accelerated discount and amortization of debt issuance costs within Other, net on the Company’s Consolidated Statements of Operations. During 2017, the Company fully redeemed $1.1 billion of outstanding principal of other debt obligations which had a scheduled maturity in 2022. In accounting for the early termination, the Company applied the provisions of ASC 470-50 and concluded extinguishment accounting was appropriate to apply. The Company recognized a $65 million make whole premium and $16 million acceleration of debt issuance costs within Interest expense, net on the Company’s Consolidated Statements of Operations. On May 31, 2018, the Company entered into Amendment No.1. to the Amended and Restated Credit Agreement (“Amendment No. 1”). Amendment No. 1 replaced the existing Term Loan A with a new Term Loan A of $670 million and increased the existing Revolving Credit Facility from $500 million to $800 million . As part of the Amendment No. 1, the Company entered into a partial early debt termination of $300 million and repricing of Term Loan B, lowering the index rate spread for LIBOR loans from LIBOR + 200 bp to LIBOR + 175 bp. In accounting for the impact of Amendment No. 1, the Company applied the provisions of ASC 470-50, which resulted in approximately $6 million of non-cash accelerated debt issuance cost amortization and approximately $1 million of pre-tax charges related to third party fees associated with the amendments that are included within Interest expense, net on the Company’s Consolidated Statements of Operations. Additionally, the issuance of new Term Loan A and the increase to the Revolving Credit Facility resulted in $2 million of third party fees for arranger, legal, and other services, which were capitalized and will be amortized over the term of the credit facilities. As of December 31, 2018 , the Term Loan A interest rate was 3.84% , and the Term Loan B interest rate was 4.09% . Borrowings under the Term Loan A and Term Loan B bear interest at a variable rate plus an applicable margin. Interest payments are payable monthly or quarterly on Term Loan A and quarterly on Term Loan B. Amendment No. 1 also requires the Company to prepay certain amounts in the event of certain circumstances or transactions. The Company may make prepayments against the Term Loans, in whole or in part, without premium or penalty. Under Amendment No. 1, Term Loan A will mature on July 27, 2021 and Term Loan B will mature on October 27, 2021 . The remaining principal on Term Loan A is due in quarterly installments starting in the third quarter of 2019, with the majority due upon maturity. All remaining principal on Term Loan B is due upon maturity. The Revolving Credit Facility is available for working capital and other general corporate purposes including letters of credit. As of December 31, 2018 , the Company had letters of credit totaling $5 million , which reduced funds available for other borrowings under the Revolving Credit Facility to $795 million . Borrowings bear interest at a variable rate plus an applicable margin. As of December 31, 2018 , the Revolving Credit Facility had an average interest rate of 3.26% . The facility allows for interest payments payable monthly or quarterly. The Revolving Credit Facility will mature and the related commitments will terminate on July 27, 2021 . All remaining principal on the Revolving Credit Facility is due upon maturity. Receivables Financing Facility In December 2017, the Company entered into a Receivables Financing Facility with a financial institution that has a borrowing limit of up to $180 million . As collateral, the Company pledges a perfected first-priority security interest in its domestically originated accounts receivable. The Company has accounted for transactions under this Receivable Financing Facility as secured borrowings. At December 31, 2018 , the Company’s Consolidated Balance Sheets included $459 million of receivables that were pledged under the Receivables Financing Facility, of which $139 million had been borrowed against. Borrowings under the Receivables Financing Facility bear interest at a variable rate plus an applicable margin. As of December 31, 2018 , the Receivables Financing Facility had an average interest rate of 3.36% and requires monthly interest payments. The Receivables Financing Facility will mature on November 29, 2019 , accordingly, amounts borrowed as of December 31, 2018 are included in Current portion of long-term debt on the Company’s Consolidated Balance Sheets. Both the Revolving Credit Facility and Receivables Financing Facility include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. The Company has entered into interest rate swaps to manage the interest rate risk associated with its debt. See Note 10 , Derivative Instruments for further information. On December 31, 2018, the Company was in compliance with all debt covenants. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | following table is a summary of the Company’s accrued warranty obligation (in millions): Year Ended December 31, Warranty Reserve 2018 2017 2016 Balance at the beginning of the year $ 18 $ 21 $ 22 Acquisition 1 — — Warranty expense 34 28 31 Warranty payments (31 ) (31 ) (32 ) Balance at the end of the year $ 22 $ 18 $ 21 Contingencies The Company is subject to a variety of investigations, claims, suits, and other legal proceedings that arise from time to time in the ordinary course of business, including but not limited to, intellectual property, employment, tort, and breach of contract matters. The Company currently believes that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on its business, cash flows, financial position, or results of operations. Any legal proceedings are subject to inherent uncertainties, and the Company’s view of these matters and its potential effects may change in the future. In connection with the acquisition of the Enterprise business from Motorola Solutions, Inc., the Company acquired Symbol Technologies, Inc., a subsidiary of Motorola Solutions (“Symbol”). A putative federal class action lawsuit, Waring v. Symbol Technologies, Inc., et al., was filed on August 16, 2005 against Symbol Technologies, Inc. and two of its former officers in the United States District Court for the Eastern District of New York by Robert Waring. After the filing of the Waring action, several additional purported class actions were filed against Symbol and the same former officers making substantially similar allegations (collectively, “the New Class Actions”). The Waring action and the New Class Actions were consolidated for all purposes and on April 26, 2006, the Court appointed the Iron Workers Local # 580 Pension Fund as lead plaintiff and approved its retention of lead counsel on behalf of the putative class. At a mediation held on March 15, 2018, the parties reached an agreement in principle to settle the matter, and Zebra reached agreements with certain of its insurers to fund the settlement and therefore, no amounts have been recorded. On October 30, 2018, the Court entered the Final Judgment Approving Class Action Settlement and Order of Dismissal with Prejudice. The time to appeal expired on November 29, 2018, with no appeals filed. The case is concluded. During 2018, the Company settled in its entirety a commercial lawsuit resulting in a $13 million pre-tax charge reflected within General and administrative expenses within the Consolidated Statements of Operations. Unclaimed Property Voluntary Disclosure Agreement (“VDA”) and Audits: During fiscal 2018, the Company completed several state audits related to its reporting of unclaimed property liabilities and submitted a VDA with the State of Delaware. There were no significant impacts to the results of operations from these activities. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | On May 17, 2018, shareholders approved the Zebra Technologies 2018 Long-Term Incentive Plan (“2018 Plan”), which authorizes for additional awards to be granted in the future. The 2018 Plan superseded and replaced the Zebra Technologies Corporation Long-Term Incentive Plan (“2015 Plan”) on the approval date, except that the 2015 Plan shall remain in effect with respect to outstanding awards under the 2015 Plan until such awards have been exercised, forfeited, canceled, expired or otherwise terminated in accordance with their terms. Together, the 2018 Plan and 2015 Plan provide for incentive compensation to the Company’s non-employee directors, officers and employees. The awards available under the plans include Stock Appreciation Rights (“SARs”), Restricted Stock Awards (“RSAs”), Performance Share Awards (“PSAs”), Cash-settled Stock Appreciation Rights (“CSRs”), Restricted Stock Units (“RSUs”), and Performance Stock Units (“PSUs”). Non-qualified stock options are not authorized for grant under the 2018 Plan or 2015 Plan. A summary of the equity awards authorized and available for future grants under the 2018 Plan is as follows: Available for future grants at December 31, 2017 — Newly authorized options 3,800,000 Granted (10,200 ) Cancellation and forfeitures — Plan termination — Available for future grants at December 31, 2018 3,789,800 A summary of the equity awards authorized and available for future grants under the 2015 Plan is as follows: Available for future grants at December 31, 2017 1,437,435 Newly authorized options — Granted (360,999 ) Cancellation and forfeitures — Plan termination (1,076,436 ) Available for future grants at December 31, 2018 — The compensation expense and related income tax benefit from the Company’s share-based compensation plans were included in the Consolidated Statements of Operations as follows (in millions): Year Ended December 31, Compensation costs and related income tax benefit 2018 2017 2016 Cost of sales $ 4 $ 3 $ 2 Selling and marketing 13 8 6 Research and development 15 11 9 General and administration 21 16 11 Total compensation expense $ 53 $ 38 $ 28 Income tax benefit $ 10 $ 11 $ 9 As of December 31, 2018 , total unearned compensation costs related to the Company’s share-based compensation plans was $57 million , which will be amortized to expense over the weighted average remaining service period of 1.5 years . The Company uses outstanding treasury shares as its source for issuing shares under the share-based compensation programs. Stock Appreciation Rights (“SARs”) Upon exercise of SARs, the Company issues whole shares of Class A Common Stock to participants based on the difference between the fair market value of the stock at the time of exercise and the exercise price. Fractional shares are settled in cash upon exercise. SARs typically vest over a period of 4 years. A summary of the Company’s SARs outstanding is as follows: 2018 2017 2016 SARs Shares Weighted- Shares Weighted- Shares Weighted- Outstanding at beginning of year 1,817,991 $ 65.73 1,740,786 $ 56.15 1,397,611 $ 56.78 Granted 88,042 149.75 402,029 98.87 627,971 52.13 Exercised (598,249 ) 55.93 (250,326 ) 48.66 (160,946 ) 35.37 Forfeited (46,161 ) 80.41 (66,550 ) 75.38 (115,215 ) 65.74 Expired (438 ) 108.20 (7,948 ) 108.20 (8,635 ) 88.65 Outstanding at end of year 1,261,185 $ 75.71 1,817,991 $ 65.73 1,740,786 $ 56.15 Exercisable at end of year 595,086 $ 60.85 874,942 $ 50.86 828,754 $ 45.14 The fair value of share-based compensation is estimated on the date of grant using a binomial model. Volatility is based on an average of the implied volatility in the open market and the annualized volatility of the Company’s stock price over its entire stock history. The following table shows the weighted-average assumptions used for grants of SARs, as well as the fair value of the grants based on those assumptions: 2018 2017 2016 Expected dividend yield 0% 0% 0% Forfeiture rate 8.40% 9.37% 9.01% Volatility 35.93% 35.49% 43.14% Risk free interest rate 2.96% 1.77% 1.29% Range of interest rates 1.68%-3.00% 0.71%-2.41% 0.25%-1.75% Expected weighted-average life (in years) 4.11 4.13 5.33 Weighted-average grant date fair value of SARs granted $47.63 $29.86 $20.18 The following table summarizes information about SARs outstanding as of December 31, 2018 : Outstanding Exercisable Aggregate intrinsic value (in millions) $ 105 $ 59 Weighted-average remaining contractual term (in years) 5.6 4.8 The intrinsic value for SARs exercised in fiscal 2018 , 2017 and 2016 was $59 million , $14 million and $6 million , respectively. The total fair value of SARs vested in fiscal 2018 , 2017 and 2016 was $12 million , $8 million and $3 million , respectively. Restricted Stock Awards (“RSAs”) and Performance Share Awards (“PSAs”) The Company’s restricted stock grants consist of time-vested restricted stock awards (“RSAs”) and performance vested restricted stock awards (“PSAs”). The RSAs and PSAs hold voting rights and therefore are considered participating securities. The outstanding RSAs and PSAs are included as part of the Company’s Class A Common Stock outstanding. The RSAs and PSAs vest at each vesting date subject to restrictions such as continuous employment except in certain cases as set forth in each stock agreement. The Company’s RSAs and PSAs are expensed over the vesting period of the related award, which is typically 3 years . Some awards, including those granted annually to non-employee directors as an equity retainer fee, were vested upon grant. PSA targets are set based on certain Company-wide financial metrics. Compensation cost is calculated as the market date fair value of the Company’s Class A Common Stock on grant date multiplied by the number of shares granted. The Company also issues stock awards to non-employee directors. Each director receives an equity grant of shares every year during the month of May. The number of shares granted to each director is determined by dividing the value of the annual grant by the price of a share of common stock. In fiscal 2018 , there were 7,980 shares granted to non-employee directors compared to 12,488 shares and 25,088 shares in fiscal 2017 and 2016 , respectively. New directors in any fiscal year earned a prorated amount. The shares vest immediately upon the grant date. A summary of information relative to the Company’s RSAs is as follows: 2018 2017 2016 Restricted Stock Awards Shares Weighted-Average Shares Weighted-Average Shares Weighted-Average Outstanding at beginning of year 628,642 $ 77.70 622,814 $ 70.19 566,447 $ 77.68 Granted 206,922 150.60 199,629 98.90 389,193 51.93 Released (154,878 ) 107.22 (165,846 ) 75.90 (275,229 ) 59.39 Forfeited (22,962 ) 88.77 (27,955 ) 72.81 (57,597 ) 70.50 Outstanding at end of year 657,724 $ 93.45 628,642 $ 77.70 622,814 $ 70.19 The fair value of each PSA granted includes assumptions around the Company’s performance goals. A summary of information relative to the Company’s PSAs is as follows: 2018 2017 2016 Performance Share Awards Shares Weighted-Average Shares Weighted-Average Shares Weighted-Average Outstanding at beginning of year 265,747 $ 77.04 379,226 $ 70.14 332,630 $ 73.40 Granted 59,849 146.83 79,423 98.97 172,024 51.01 Released (57,074 ) 107.31 (2,029 ) 62.70 (111,325 ) 46.58 Forfeited (8,795 ) 81.07 (190,873 ) 73.09 (14,103 ) 75.73 Outstanding at end of year 259,727 $ 86.41 265,747 $ 77.04 379,226 $ 70.14 Other Award Types The Company also has cash-settled compensation awards including cash-settled Stock Appreciation Rights (“CSRs”), Restricted Stock Units (“RSUs”), and Performance Stock Units (“PSUs”) (the “Awards”) that are expensed over the vesting period of the related award, which is not more than 4 years. Compensation cost is calculated at the fair value on grant date multiplied by the number of share-equivalents granted, and the fair value is remeasured at the end of each reporting period based on the Company’s stock price. Cash settlement is based on the fair value of share equivalents at the time of vesting, which was $2 million , $2 million and $1 million in 2018, 2017 and 2016, respectively. Share-equivalents issued under these programs totaled 20,393 , 45,781 and 95,210 in fiscal 2018 , 2017 and 2016 , respectively. Non-qualified Stock Options A summary of the Company’s non-qualified options outstanding under the 2006 Plan is as follows: 2018 2017 2016 Non-qualified Options Shares Weighted- Shares Weighted- Shares Weighted- Outstanding at beginning of year 15,705 $ 26.34 154,551 $ 35.96 204,434 $ 36.66 Granted — — — — — — Exercised (15,705 ) 26.34 (132,905 ) 36.86 (47,393 ) 38.60 Forfeited — — — — — — Expired — — (5,941 ) 41.25 (2,490 ) 43.35 Outstanding at end of year — $ — 15,705 $ 26.34 154,551 $ 35.96 Exercisable at end of year — $ — 15,705 $ 26.34 154,551 $ 35.96 As of December 31, 2018, there were no non-qualified stock options remaining outstanding. The intrinsic value for non-qualified options exercised in fiscal 2018 , 2017 and 2016 was $2 million , $8 million and $2 million , respectively. There were no non-qualified options vested in fiscal 2018 , 2017 and 2016 . Cash received from the exercise of non-qualified options was less than $1 million during fiscal 2018 compared to $5 million and $2 million during fiscal years 2017 and 2016 , respectively. The related income tax benefit realized in fiscal 2018 , 2017 and 2016 was $2 million , $2 million and $1 million , respectively. Employee Stock Purchase Plan The Zebra Technologies Corporation 2011 Employee Stock Purchase Plan (“2011 Plan”), which became effective in fiscal 2011, permits eligible employees to purchase common stock at 95% of the fair market value at the date of purchase. Employees may make purchases by cash or payroll deductions up to certain limits. The aggregate number of shares that may be purchased under this plan is 1.5 million shares. At December 31, 2018 , 840,262 shares were available for future purchase. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The geographical sources of income (loss) before income taxes were as follows (in millions): Year Ended December 31, 2018 2017 2016 United States $ (25 ) $ (152 ) $ (120 ) Outside United States 549 240 (9 ) Total $ 524 $ 88 $ (129 ) Income tax expense (benefit) consisted of the following (in millions): Year Ended December 31, 2018 2017 2016 Current: Federal $ 20 $ 10 $ 14 State 3 8 6 Foreign 77 62 31 Total current 100 80 51 Deferred: Federal (11 ) 20 (31 ) State 5 (10 ) (6 ) Foreign 9 (19 ) (6 ) Total deferred 3 (9 ) (43 ) Total $ 103 $ 71 $ 8 The Company’s effective tax rates were 19.7% , 80.7% and (6.2)% for the years ended December 31, 2018 , 2017 and 2016 respectively. The Company’s effective tax rate was lower than the federal statutory rate of 21% for the year ended December 31, 2018 primarily due to lower tax rates in foreign jurisdictions and the generation of tax credits. These benefits were partially offset by increases related to foreign earnings subject to U.S. taxation, the U.S. impact of the Enterprise acquisition and certain discrete items. The discrete items included the favorable impacts of reductions in valuation allowances and share-based compensation benefits, which were offset by audit settlements with the U.S. Internal Revenue Service for the fiscal years 2013, 2014, and 2015 and an increase in uncertain tax positions resulting from interpretive guidance issued during the year. For the year ended December 31, 2017, the Company’s effective tax rate was higher than the federal statutory rate of 35%, primarily due to an increase in valuation allowance on foreign deferred tax assets, the one-time transition tax and remeasurement of net U.S. deferred tax assets under U.S. Tax Reform, the U.S. impact of the Enterprise acquisition, and an increase in uncertain tax benefits. These expenses were partially offset by remeasurement of foreign net deferred tax assets, the benefit of lower tax rates in foreign jurisdictions, the recognition of deferred tax assets on intercompany asset transfers, the generation of tax credits and share-based compensation benefits. For the year ended December 31, 2016, the Company’s effective tax rate, applied to an overall pre-tax loss, was lower than the federal statutory rate of 35%, primarily due to the benefits of lower tax rates in foreign jurisdictions, the U.S. impact of the Enterprise acquisition as well as foreign earnings subject to U.S. taxation, partially offset by the generation of income tax credits. A reconciliation of the U.S. federal statutory income tax rate to our actual income tax rate is provided below: Year Ended December 31, 2018 2017 2016 Provision computed at statutory rate 21.0 % 35.0 % 35.0 % U.S. Tax Reform - one-time transition tax (0.6 ) 41.8 0.0 Remeasurement of deferred taxes 0.7 (56.0 ) 0.0 Change in valuation allowance (4.5 ) 96.4 (1.0 ) U.S. impact of Enterprise acquisition 1.1 12.9 (14.1 ) Change in contingent income tax reserves 3.2 14.0 (1.6 ) Foreign earnings subject to U.S. taxation 2.0 2.0 (6.6 ) Foreign rate differential (2.0 ) (29.1 ) (16.0 ) Intra-entity transactions 0.0 (18.8 ) 0.0 State income tax, net of federal tax benefit 0.8 (5.3 ) (1.0 ) Tax credits (1.9 ) (5.7 ) 9.5 Equity compensation deductions (2.0 ) (5.6 ) (0.4 ) Return to provision and other true ups 1.1 (3.2 ) (3.7 ) Other 0.8 2.3 (6.3 ) Provision for income taxes 19.7 % 80.7 % (6.2 )% The Company earns a significant amount of its operating income outside of the U.S., primarily in the United Kingdom, Singapore, and Luxembourg, with statutory rates of 19% , 17% , and 27% , respectively. During 2017, the Company affirmed an incentivized tax rate of 10% with the Singapore Economic Development Board with the Company’s commitment to make increased investments in Singapore. During 2018, the Company applied for and was granted a second extension of its incentivized tax rate by the Singapore Economic Development Board. The incentive reduces the income tax rate to 10.5% from the statutory rate of 17% and is effective for calendar years 2019 to 2023. The Company has committed to making additional investments in Singapore over the period 2019 to 2022; should the Company not make these investments in accordance with the agreement, any incentive benefit would have to be repaid to the Singapore tax authorities. Tax effects of temporary differences that resulted in deferred tax assets and liabilities are as follows (in millions): December 31, 2018 2017 Deferred tax assets: Capitalized research expenditures $ 28 $ 32 Deferred revenue 21 21 Tax credits 28 31 Net operating loss carryforwards 394 338 Other accruals 20 20 Inventory items 20 20 Capitalized software costs 8 14 Sales return/rebate reserve 41 33 Share-based compensation expense 15 12 Accrued bonus 3 1 Unrealized gains and losses on securities and investments — 8 Valuation allowance (56 ) (134 ) Total deferred tax assets 522 396 Deferred tax liabilities: Depreciation and amortization 411 275 Unrealized gains and losses on securities and investments 2 — Undistributed earnings 3 2 Total deferred tax liabilities $ 416 $ 277 Net deferred tax assets $ 106 $ 119 At December 31, 2018 , the Company has approximately $394 million (tax effected) of net operating losses (“NOLs”) and approximately $28 million of credit carryforwards. Approximately $39 million of NOLs will expire beginning in 2019 through 2032, and $14 million of credits will expire beginning in 2023 through 2032; $355 million of NOLs and $14 million of credit carryforwards have no expiration dates. Impact of U.S. Tax Reform Overview Enacted on December 22, 2017, the Act reduced the U.S. federal corporate tax rate from 35% to 21%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign sourced earnings. Based on current operations, the Company is subject to the GILTI provisions of the Act. We are not currently subject to the new limitations which defer U.S. interest deductions in excess of 30% of adjusted taxable income or the Base Erosion Anti-Avoidance Tax (“BEAT”). However, the application of the interest limitations and BEAT regime may apply in the future, depending on changes in the Company’s business model or the level of taxable income in any given year. Additionally, the Company is no longer able to deduct performance-based compensation for its covered employees which exceeds the limitation under amended Internal Revenue Code Section 162(m). These impacts are included in the calculation of our effective tax rate. Foreign Tax Effects As part of the Act, the Company recognized a one-time transition tax based on its total post-1986 earnings and profits that were previously deferred from U.S. income taxes. The Company earns a significant amount of its operating income outside of the U.S. As of December 31, 2018, the Company is indefinitely reinvested with respect to its U.S. directly-owned subsidiary earnings. Under the Act, the Company has recorded a current provision related to deemed foreign inclusions through December 31, 2017 as a result of the transition tax. For periods after 2017, the Company is subject to U.S. income tax on substantially all foreign earnings under the GILTI provisions of the Act, while any remaining foreign earnings are eligible for the new dividends received deduction. As a result, future repatriation of earnings will no longer be subject to U.S. income tax, but may be subject to state and local income taxes, as well as currency translation gains or losses. Additionally, gains and losses on any future taxable dispositions of U.S.-owned foreign affiliates continue to be subject to U.S. income tax. The Company has not recognized deferred tax liabilities in the U.S. with respect to its outside basis differences in its directly-owned foreign affiliates. It is not practicable to determine the amount of unrecognized deferred tax liabilities on these indefinitely reinvested earnings. Certain foreign affiliate parent companies are not indefinitely reinvested, and thus, the Company has recorded a deferred tax liability for foreign withholdings taxes on those earnings. Performance-Based Executive Compensation The Act amends the rules related to the exclusion of performance-based compensation under Internal Revenue Code 162(m). The Company will no longer be able to claim a deduction for compensation accrued after January 1, 2018 for a covered employee which exceeds $1 million , unless the compensation is earned in respect of a binding contract in existence on November 2, 2017 (“Grandfathered Contracts”). The Company has remeasured the Section 162(m)-grandfathered deferred tax assets at 21% for its covered employees for equity award agreements issued and executed prior to November 2, 2017. Additionally, the Company has determined that its short-term bonus plan will not qualify for the grandfathered contract provisions, and thus any associated deferred tax assets have been derecognized. Provisional and Final Effects During 2017, the Company provisionally recognized an income tax expense of $72 million associated with the Act, including a one-time transition tax of $37 million and $35 million remeasurement of its net U.S. deferred tax assets based on a 21% rate. During 2018, the Company finalized its analysis of the Act, including the one-time transition tax and measurement of net deferred tax assets, and recorded a $3 million income tax benefit for the year ended December 31, 2018 as a result of differences between its final analysis and provisional analysis from the prior year. The final analysis included both federal and state tax effects based on legislative pronouncements through December 31, 2018. The Company also utilized a total of $28 million of available net operating losses, research and development credits, alternative minimum tax credits, and foreign tax credits, in order to reduce its future cash payments for the one-time transition tax, resulting in a net liability for the one-time transition tax of $6 million , of which $1 million has been classified as a short term liability and $5 million as a long term liability. The final one-time transition tax installment payment will be made in 2024. During 2018, the Company estimated and recognized an income tax expense of $10 million related to GILTI, based on current law and regulations; as guidance continues to be published, the estimate could result in filing positions significantly different than our current estimates. Unrecognized tax benefits A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions): Year ended December 31, 2018 2017 Balance at beginning of year $ 51 $ 42 Additions for tax positions related to the current year 1 0 Additions for tax positions related to prior years 22 11 Reductions for tax positions related to prior years (11 ) (1 ) Settlements for tax positions (13 ) (1 ) Balance at end of year $ 50 $ 51 At December 31, 2018 and December 31, 2017 , there are $48 million and $47 million of unrecognized tax benefits that if recognized would affect the annual effective tax rate. The Company continues to believe its positions are supportable, however, the Company anticipates that $20 million of uncertain tax benefits may be paid within the next twelve months and, as such, is reflected as a current liability within the Company’s Consolidated Balance Sheets. The Company is engaged in an inquiry from the UK Her Majesty’s Revenue and Customs (“HMRC”) for the years 2012 to 2016. The tax years 2004 through 2016 remain open to examination by multiple foreign and U.S. state taxing jurisdictions. Due to uncertainties in any tax audit outcome, the Company’s estimates of the ultimate settlement of uncertain tax positions may change and the actual tax benefits may differ significantly from the estimates. The Company recognized $8 million , $2 million and $1 million of interest and/or penalties related to income tax matters as part of income tax expense for the years ended December 31, 2018 , 2017 and 2016 , respectively. The Company had $14 million and $6 million of interest and penalties reflected in the Consolidated Balance Sheets as of December 31, 2018 and 2017 , respectively. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic net earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares assuming dilution. Dilutive common shares outstanding is computed using the Treasury Stock method and in periods of income, reflects the additional shares that would be outstanding if dilutive stock options were exercised for common shares during the period. Earnings (loss) per share (in millions, except share data): Year Ended December 31, 2018 2017 2016 Basic: Net income (loss) $ 421 $ 17 $ (137 ) Weighted-average shares outstanding (1) 53,591,655 53,021,761 51,579,112 Basic earnings (loss) per share $ 7.86 $ 0.33 $ (2.65 ) Diluted: Net income (loss) $ 421 $ 17 $ (137 ) Weighted-average shares outstanding (1) 53,591,655 53,021,761 51,579,112 Dilutive shares (2) 708,157 667,071 — Diluted weighted-average shares outstanding 54,299,812 53,688,832 51,579,112 Diluted earnings (loss) per share $ 7.76 $ 0.32 $ (2.65 ) (1) In periods of net loss, restricted stock awards that are classified as participating securities are excluded from the weighted-average shares outstanding computation. (2) In periods of net loss, options are anti-dilutive and therefore excluded from the earnings (loss) per share calculation. Anti-dilutive options to purchase common shares are excluded from diluted earnings per share calculations. Anti-dilutive options consist primarily of stock appreciation rights (“SARs”) with an exercise price greater than the average market closing price of the Class A common stock. There were 72,856 , 259,142 , and 1,391,567 anti-dilutive shares for the years ended December 31, 2018 , 2017 , and 2016 , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Stockholders’ equity includes certain items classified as AOCI, including: • Unrealized gain (loss) on anticipated sales hedging transactions relates to derivative instruments used to hedge the exposure related to currency exchange rates for forecasted Euro sales. These hedges are designated as cash flow hedges, and the Company defers income statement recognition of gains and losses until the hedged transaction occurs. See Note 10 , Derivative Instruments for more details. • Unrealized (loss) gain on forward interest rate swaps hedging transactions refers to the hedging of the interest rate risk exposure associated with the variable rate commitment entered into for the Enterprise Acquisition. See Note 10 , Derivative Instruments for more details. • Foreign currency translation adjustments relate to the Company’s non-U.S. subsidiary companies that have designated a functional currency other than the U.S. dollar. The Company is required to translate the subsidiary functional currency financial statements to dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of AOCI. The components of AOCI for each of the three years ended December 31 are as follows (in millions): Unrealized gain (loss) on sales hedging Unrealized (loss) gain on forward interest rate swaps Foreign Currency translation adjustments Total Balance at December 31, 2015 $ (1 ) $ (15 ) $ (32 ) $ (48 ) Other comprehensive income (loss) before reclassifications 1 (1 ) (4 ) (4 ) Amounts reclassified from AOCI (1) 7 2 — 9 Tax expense (1 ) (1 ) — (2 ) Other comprehensive income (loss) 7 — (4 ) 3 Balance at December 31, 2016 6 (15 ) (36 ) (45 ) Other comprehensive (loss) income before reclassifications (26 ) 1 2 (23 ) Amounts reclassified from AOCI (1) 8 8 — 16 Tax benefit (expense) 3 (3 ) — — Other comprehensive (loss) income (15 ) 6 2 (7 ) Balance at December 31, 2017 (9 ) (9 ) (34 ) (52 ) Other comprehensive income (loss) before reclassifications 38 8 (13 ) 33 Amounts reclassified from AOCI (1) (13 ) 4 — (9 ) Tax expense (4 ) (3 ) — (7 ) Other comprehensive income (loss) 21 9 (13 ) 17 Balance at December 31, 2018 $ 12 $ — $ (47 ) $ (35 ) (1) See Note 10 , Derivative Instruments regarding timing of reclassifications to operating results. |
Accounts Receivable Factoring
Accounts Receivable Factoring | 12 Months Ended |
Dec. 31, 2018 | |
Transfers and Servicing [Abstract] | |
Accounts Receivable Factoring | Accounts Receivable Factoring In 2018, the Company entered into a Receivables Factoring arrangement, pursuant to which, certain receivables originated from the Europe, Middle East, and Africa region are sold to a bank in exchange for cash without the Company maintaining a beneficial interest in the receivables sold. At any time, the bank’s purchase of eligible receivables is subject to a maximum of $90 million of uncollected receivables. The Company services the receivables on behalf of the bank, but otherwise maintains no continuing involvement with respect to the receivables. Transactions under the Receivables Factoring arrangement are accounted for as sales under ASC 860, Transfers and Servicing of Financial Assets with related cash flows reflected in operating cash flows. As of December 31, 2018 , $33 million of uncollected receivables have been sold and removed from the Company’s Consolidated Balance Sheet. |
Segment Information and Geograp
Segment Information and Geographic Data | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information and Geographic Data | Segment Information & Geographic Data The Company’s operations consist of two reportable segments: Asset Intelligence & Tracking (“AIT”) and Enterprise Visibility & Mobility (“EVM”). The reportable segments have been identified based on the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker or “CODM”) to assess segment performance and allocate resources among the Company’s segments. The CODM reviews adjusted operating income to assess segment profitability. Adjusted operating income excludes purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, and exit and restructuring costs. Segment assets are not reviewed by the Company’s CODM and therefore are not disclosed below. Financial information by segment is presented as follows (in millions): Year Ended December 31, 2018 2017 2016 Net sales: AIT $ 1,423 $ 1,311 $ 1,247 EVM 2,795 2,414 2,337 Total segment Net sales 4,218 3,725 3,584 Corporate, eliminations (1) — (3 ) (10 ) Total Net sales $ 4,218 $ 3,722 $ 3,574 Operating income: AIT (2)(3) $ 325 $ 274 $ 281 EVM (2)(3) 404 301 245 Total segment operating income 729 575 526 Corporate, eliminations (4) (119 ) (253 ) (446 ) Total Operating income $ 610 $ 322 $ 80 (1) Amounts included in Corporate, eliminations consist of purchase accounting adjustments related to the Enterprise Acquisition. (2) During 2018, the Company revised its methodology for allocating certain operating expenses across its two reportable segments to more accurately reflect where these operating costs are being incurred. The reallocations relate primarily to facilities, information technology, marketing and human resources expenses. All periods are presented on a comparable basis and reflect these changes which reclassified operating expenses from AIT to EVM of $14 million and $41 million for the years ended December 31, 2017 and 2016, respectively. There was no impact to the Consolidated Financial Statements as a result of these reallocations. (3) AIT and EVM segment operating income includes depreciation expense and share-based compensation expense. The amounts of depreciation expense and share-based compensation attributable to AIT and EVM are proportionate to each segment’s Net sales. (4) Amounts included in Corporate, eliminations consist of purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, and exit and restructuring costs. Information regarding the Company’s operations by geographic area is contained in the following table. These amounts are reported in the geographic area of the destination of the final sale. We manage our business based on regions rather than by individual countries. Geographic data for Net sales is as follows (in millions): Year Ended December 31, 2018 2017 2016 North America $ 2,041 $ 1,798 $ 1,739 Europe, Middle East, and Africa 1,409 1,221 1,138 Asia-Pacific 520 468 483 Latin America 248 235 214 Total Net sales $ 4,218 $ 3,722 $ 3,574 Geographic data for long-lived assets, defined as property, plant and equipment is as follows (in millions): Year Ended December 31, 2018 2017 2016 North America $ 225 $ 238 $ 267 Europe, Middle East, and Africa 14 14 13 Asia-Pacific 7 9 9 Latin America 3 3 3 Total long-lived assets $ 249 $ 264 $ 292 Net sales by country that are greater than 10% of total Net sales are as follows (in millions): Year Ended December 31, 2018 2017 2016 United States $ 2,247 $ 1,984 $ 1,950 United Kingdom 1,403 1,196 1,065 Singapore 508 454 362 Other 60 88 197 Total Net sales $ 4,218 $ 3,722 $ 3,574 Net sales by country are determined by the country from where the products are invoiced when they leave the Company’s warehouses. Generally, our United States sales company serves North America and Latin America; United Kingdom sales company serves Europe, Middle East, and Africa; and our Singapore sales company serves Asia-Pacific. Our Net sales to significant customers as a percentage of the total Company’s Net sales by segment were as follows: Year Ended December 31, 2018 2017 2016 AIT EVM Total AIT EVM Total AIT EVM Total Customer A 6.2 % 14.1 % 20.3 % 6.3 % 15.0 % 21.3 % 5.9 % 14.2 % 20.1 % Customer B 5.6 % 10.1 % 15.7 % 5.3 % 8.9 % 14.2 % 5.0 % 8.2 % 13.2 % Customer C 6.2 % 7.9 % 14.1 % 6.2 % 7.0 % 13.2 % 5.3 % 7.1 % 12.4 % All three of the above customers are distributors and not end-users. No other customer accounted for 10% or more of total Net sales during the years presented. There are three customers at December 31, 2018 and December 31, 2017 that each accounted for more than 10% of outstanding accounts receivable. In 2018 , the three largest customers accounted for 23.0% , 16.9% , and 14.6% , respectively of accounts receivable while in 2017 , the three largest customers accounted for 19.5% , 14.0% and 11.7% , respectively. |
Supplementary Financial Informa
Supplementary Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Supplementary Financial Information | Supplementary Financial Information Prepaid expenses and other current assets consist of the following (in millions): December 31, 2018 2017 Foreign Exchange Contracts $ 16 $ — Other 38 24 Prepaid expenses and other current assets $ 54 $ 24 The components of Accrued liabilities are as follows (in millions): December 31, 2018 2017 Accrued incentive compensation $ 127 $ 101 Customer reserves 45 41 Accrued payroll 55 50 Interest payable 5 15 Accrued other expenses 90 89 Accrued liabilities $ 322 $ 296 Summary of Quarterly Results of Operations (unaudited, in millions): 2018 First Second Third Fourth Total Year Total Net sales $ 977 $ 1,012 $ 1,092 $ 1,137 $ 4,218 Gross profit 465 472 505 539 1,981 Net income 109 70 127 115 421 Net earnings per common share: Basic earnings per share: $ 2.04 $ 1.31 $ 2.37 $ 2.14 $ 7.86 Diluted earnings per share: 2.01 1.29 2.34 2.11 7.76 2017 First Second Third Fourth Total Year Total Net sales $ 865 $ 896 $ 935 $ 1,026 $ 3,722 Gross profit 401 411 429 469 1,710 Net (loss) income 8 17 (12 ) 4 17 Net earnings per common share: Basic (loss) earnings per share: $ 0.16 $ 0.33 $ (0.23 ) $ 0.07 $ 0.33 Diluted (loss) earnings per share: 0.16 0.32 (0.23 ) 0.07 0.32 |
Subsequent Event Subsequent Eve
Subsequent Event Subsequent Event | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On January 25, 2019, Zebra entered into a definitive agreement under which Zebra will wholly acquire Temptime Corporation, a developer and manufacturer of temperature-monitoring labels and devices. Zebra expects to fund the transaction with a combination of cash on hand along with fully committed financing available under its Revolving Credit Facility. The transaction is subject to customary closing conditions and is expected to close in the first quarter of 2019. The acquired business will become part of the AIT segment. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Valuation and Qualifying Accounts (In millions) Description Balance at Beginning of Period Charged to Costs and Expenses Deductions Balance at End of Period Valuation account for accounts receivable: Year ended December 31, 2018 $ 3 $ 1 $ 1 $ 3 Year ended December 31, 2017 3 1 1 3 Year ended December 31, 2016 6 — 3 3 Valuation account for deferred tax assets: Year ended December 31, 2018 $ 134 $ — $ 78 $ 56 Year ended December 31, 2017 47 91 4 134 Year ended December 31, 2016 48 18 19 47 See accompanying report of independent registered public accounting firm. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation These accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States and include the accounts of Zebra and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Fiscal Calendar | Fiscal Calendar The Company’s fiscal year is a 52-week period ending on December 31. Interim fiscal quarters end on a Saturday and generally include 13 weeks of operating activity. During the 2018 fiscal year, the Company’s quarter end dates were March 31, June 30, September 29 and December 31. |
Use of Estimates | Use of Estimates These consolidated financial statements were prepared using estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Examples of accounting estimates include: cash flow projections and other valuation assumptions included in business acquisition purchase price allocations as well as annual goodwill impairment testing; the allocation of transaction price to performance obligations in revenue transactions; inventory and product warranty reserves; useful lives of our tangible and intangible assets; and the recognition and measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash consists primarily of deposits with banks. In addition, the Company considers highly liquid short-term investments with original maturities of less than three months to be cash equivalents. These highly liquid short-term investments are readily convertible to known amounts of cash and are so near their maturity that they present insignificant risk of a change in value because of changes in interest rates. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist primarily of amounts due to us from our customers in the course of normal business activities. Collateral on trade accounts receivable is generally not required. The Company maintains an allowance for doubtful accounts for estimated uncollectible accounts receivable. The allowance is based on historical experience and our assessment of delinquent accounts. Accounts are written off against the allowance account when they are determined to be no longer collectible. |
Inventories | Inventories Inventories are stated at the lower of a moving-average cost (which approximates cost on a first-in, first-out basis) and net realizable value. Manufactured inventory cost includes materials, labor, and manufacturing overhead. Purchased inventory cost also includes internal purchasing overhead costs. Provisions are made to reduce excess and obsolete inventories to their estimated net realizable values. Inventory provisions are based on forecasted demand, experience with specific customers, the age and nature of the inventory, and the ability to redistribute inventory to other programs or to rework other consumable inventory. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the various classes of property, plant and equipment, which are 30 years for buildings and range from 3 to 10 years for all other asset categories. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or 10 years. |
Income Taxes | Income Taxes The Company accounts for income taxes under the liability method in accordance with ASC 740, Income Taxes . Accordingly, deferred income taxes are provided for the future tax consequences attributable to differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Deferred tax assets and liabilities are measured using tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes the benefit of tax positions when it is more likely than not to be sustained on its technical merits. The Company recognizes interest and penalties related to income tax matters as part of income tax expense. The Company has elected consolidated tax filings in certain of its jurisdictions which may allow the group to offset one member’s income with losses of other members in the current period and on a carryover basis. The income tax effects of non-inventory intra-entity asset transfers are recognized in the period in which the transfer occurs. The Company classifies its balance sheet accounts by applying jurisdictional netting principles for locations where consolidated tax filing elections are in place. The Tax Cut and Jobs Act (“TCJA” or “the Act”) enacted on December 22, 2017 contains the Global Intangible Low-Taxed Income and Deduction for Foreign-Derived Intangible Income provisions (collectively referred to as “GILTI”), which relate to the taxation of certain foreign income and are effective for tax years beginning on or after January 1, 2018. The Company recognizes its GILTI inclusions as a charge to tax expense in the year included in its U.S. tax return. The effects of changes in tax rates and laws on deferred tax balances are recorded in the period of enactment as a component of income tax expense within continuing operations, even if they relate to items recorded within accumulated other comprehensive income (loss) (“AOCI”). The Company has elected to not reclassify the tax effects of these changes associated with the Act from AOCI to retained earnings. Such tax effects will be released into earnings when the underlying portfolio of assets or liabilities giving rise to the AOCI position are fully derecognized. |
Goodwill | Goodwill Goodwill is not amortized, rather it is tested annually for impairment, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Our annual impairment testing consists of comparing the estimated fair value of each reporting unit to it carrying value. If the carrying value of a reporting unit exceeds its estimated fair value, goodwill would be considered to be impaired and reduced to its implied fair value. We estimate the fair value of reporting units with valuation techniques including both the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected future operating results, economic projections, anticipated future cash flows and discount rates. The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry group. Fair value determinations require judgment and are sensitive to changes in underlying assumptions, estimates as well as market factors. Estimating the fair value of reporting units requires that we make a number of assumptions and estimates regarding our long-term growth and cash flow expectations as well as overall industry and economic conditions. These estimates and assumptions include, but are not limited to, projections of revenue and income growth rates, capital investments, competitive and customer trends, appropriate peer group selection, market-based discount rates and other market factors. We performed our annual goodwill impairment testing in the fourth quarter of 2018 using a quantitative approach which did not result in any impairments. See Note 6 , Goodwill and Other Intangibles, net for additional information. We believe our fair value estimates are reasonable. If actual financial results differ materially from current estimates or there are significant negative changes in market factors beyond our control, there could be an impairment of goodwill in the future. |
Other Intangible Assets | Other Intangible Assets Other intangible assets consist primarily of current technology, customer relationships, trade names, unpatented technology, and patents and patent rights. These assets are recorded at cost and amortized on a straight-line basis over the asset’s useful life which range from 3 years to 15 years |
Impairment of Long-lived Assets and Long Lived Assets to be Disposed of | Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of The Company accounts for long-lived assets in accordance with the provisions of ASC 360, Property, Plant and Equipment which requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the sum of the undiscounted cash flows expected to result from the use and the eventual disposition of the asset. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Investments in Equity Securities | Investments in Equity Securities The Company’s investments in equity securities are accounted for at cost, adjusted for impairment losses or changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. These investments are primarily in venture capital backed technology companies, where the Company's ownership interest is less than 20% of each investee and the Company does not have the ability to exercise significant influence. The Company held investments in equity securities in the amount of $25 million as of December 31, 2018 and 2017 , respectively. These investments are included in Other long-term assets on the Consolidated Balance Sheets. |
Revenue Recognition | Revenue Recognition Revenue includes sales of hardware, supplies and services (including repair services and product maintenance service contracts, which typically occur over time, and professional services such as installation, integration and provisioning, which typically occur in the early stages of a project). The average life of repair and maintenance service contracts is approximately three years. Professional service arrangements range in duration from a day to several weeks or months. We recognize revenues when we transfer control of promised goods or services to our customers in an amount that reflects the consideration to which we expect to receive in exchange for those goods or services. The Company elects to exclude from the transaction price sales and other taxes assessed by a governmental authority and collected by the Company from a customer. The Company also considers shipping and handling activities as part of the fulfillment costs, not as a separate performance obligation. See Note 3 , Revenues for additional information. Revenues As prescribed in ASC 606, the Company recognizes revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Performance Obligations We enter into contract arrangements that may include various combinations of tangible products and services, which generally are capable of being distinct and accounted for as separate performance obligations. For these types of contract arrangements, we evaluate whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract has more than one performance obligation. This evaluation requires judgment and the decision to combine a group of contracts or separate the combined or single contract into multiple performance obligations could change the amount of revenue recorded in the reporting period. We use the accounting guidance on “capable of being distinct” and “distinct within the context of the contract” to assist with the evaluation. For contract arrangements that include multiple performance obligations, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices for the products and/or services underlying each performance obligation. When the standalone selling prices are not directly observable, we estimate the standalone selling prices primarily based on the expected cost-plus margin approach. For arrangements comprised strictly of the sale of product and performance of maintenance type services where the standalone selling price of the maintenance service is not discernible, we estimate the standalone selling price of the maintenance contract using the residual approach. When the residual approach cannot be applied, regional pricing, marketing strategies and business practices are evaluated and analyzed to derive the estimated standalone selling price using a cost-plus margin methodology. The Company recognizes revenue when transfer of control has occurred for the goods or services sold. Control is deemed to have been transferred when the customer has the ability to direct the use of and has obtained substantially all of the remaining benefits from the goods and services sold. The Company uses judgment in the evaluation of the following criteria: 1) the customer simultaneously receives and consumes the benefits provided by the transfer of goods or service; 2) the performance creates or enhances an asset that is under control of the customer; 3) the performance does not create an asset with an alternative use to the Company; and 4) the Company has an enforceable right to payment, in order to determine whether control transfers at a point in time or over time. For each performance obligation satisfied over time, the Company measures its progress toward completion to determine the timing of revenue recognition. Judgment is also used in the evaluation of the following transfer of control criteria: 1) the Company has a present right to payment for the asset; 2) the legal title to the asset has transferred to the customer; 3) the customer has physical possession of the asset; 4) the customer has the significant risks and rewards of ownership of the asset; and 5) the customer has accepted the asset, in order to determine when revenue should be recognized in a point in time revenue recognition pattern. Assuming all other criteria for revenue recognition have been met, for products and services sold on a standalone basis, revenue is generally recognized upon shipment and by using an output method or time-based method respectively. In cases where a bundle of products and services are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control. For some of our transactions, products are sold with a right of return, and we may also provide other rebates, price protection, or incentives, which are accounted for as variable consideration. The Company estimates the amount of variable consideration by using the expected value or the most likely amount method and reduces the revenue by those estimated amounts, only to the extent it is probable that a significant reversal in the cumulative revenue recognized will not occur. These estimates are reviewed and updated, as necessary, at the end of each reporting period. Our payment terms vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts do not include a significant financing component. Costs to obtain a contract Our incremental direct costs of obtaining a contract, which consist of sales commissions and incremental fringe benefits, are deferred and amortized over the weighted-average contract term, consistent with the guidance in ASC 340 Other Assets and Deferred Costs . The incremental costs to obtain a contract, which were previously expensed as incurred under ASC 605, and the determination of the amortization period are derived at a portfolio level and the amortization is recognized on a straight-line basis. The adoption of ASC 606 required the capitalization of these costs which resulted in an adjustment to increase retained earnings. Revenues As prescribed in ASC 606, the Company recognizes revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Performance Obligations We enter into contract arrangements that may include various combinations of tangible products and services, which generally are capable of being distinct and accounted for as separate performance obligations. For these types of contract arrangements, we evaluate whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract has more than one performance obligation. This evaluation requires judgment and the decision to combine a group of contracts or separate the combined or single contract into multiple performance obligations could change the amount of revenue recorded in the reporting period. We use the accounting guidance on “capable of being distinct” and “distinct within the context of the contract” to assist with the evaluation. For contract arrangements that include multiple performance obligations, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices for the products and/or services underlying each performance obligation. When the standalone selling prices are not directly observable, we estimate the standalone selling prices primarily based on the expected cost-plus margin approach. For arrangements comprised strictly of the sale of product and performance of maintenance type services where the standalone selling price of the maintenance service is not discernible, we estimate the standalone selling price of the maintenance contract using the residual approach. When the residual approach cannot be applied, regional pricing, marketing strategies and business practices are evaluated and analyzed to derive the estimated standalone selling price using a cost-plus margin methodology. The Company recognizes revenue when transfer of control has occurred for the goods or services sold. Control is deemed to have been transferred when the customer has the ability to direct the use of and has obtained substantially all of the remaining benefits from the goods and services sold. The Company uses judgment in the evaluation of the following criteria: 1) the customer simultaneously receives and consumes the benefits provided by the transfer of goods or service; 2) the performance creates or enhances an asset that is under control of the customer; 3) the performance does not create an asset with an alternative use to the Company; and 4) the Company has an enforceable right to payment, in order to determine whether control transfers at a point in time or over time. For each performance obligation satisfied over time, the Company measures its progress toward completion to determine the timing of revenue recognition. Judgment is also used in the evaluation of the following transfer of control criteria: 1) the Company has a present right to payment for the asset; 2) the legal title to the asset has transferred to the customer; 3) the customer has physical possession of the asset; 4) the customer has the significant risks and rewards of ownership of the asset; and 5) the customer has accepted the asset, in order to determine when revenue should be recognized in a point in time revenue recognition pattern. Assuming all other criteria for revenue recognition have been met, for products and services sold on a standalone basis, revenue is generally recognized upon shipment and by using an output method or time-based method respectively. In cases where a bundle of products and services are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control. |
Research and Development Costs | Research and Development Costs Research and development (“R&D”) costs are expensed as incurred, and include: • Salaries, benefits, and other R&D personnel related costs; • Consulting and other outside services used in the R&D process; • Engineering supplies; • Engineering related information systems costs; and • Allocation of building and related costs. |
Advertising | Advertising Advertising is expensed as incurred. |
Warranty | Warranty In general, the Company provides warranty coverage of one year on mobile computers, printers and batteries. Advanced data capture products are warrantied from one to five years, depending on the product. Thermal printheads are warrantied for six months and battery-based products, such as location tags, are covered by a 90 -day warranty. A provision for warranty expense is adjusted quarterly based on historical and expected warranty experience. |
Contingencies | Contingencies The Company establishes a liability for loss contingencies when the loss is both probable and estimable. In addition, for some matters for which a loss is probable or reasonably possible, an estimate of the amount of loss or range of loss is not possible, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Our financial assets and liabilities that require recognition and fair value measurement under the accounting guidance generally include our employee deferred compensation plan investments, foreign currency derivatives, and interest rate swaps. In accordance with ASC 815, Derivatives and Hedging, we recognize derivative instruments and hedging activities as either assets or liabilities on the Consolidated Balance Sheets and measure them at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. See Note 10 , Derivative Instruments for additional information on the Company’s derivatives and hedging activities. The Company utilizes foreign currency forwards to hedge certain foreign currency exposures and interest rate swaps to hedge a portion of the variability in future cash flows on debt. We use broker quotations or market transactions, in either the listed or over-the-counter markets to value our foreign currency exchange contracts and relevant observable market inputs at quoted intervals, such as forward yield curves and the Company’s own credit risk to value our interest rate swaps. The Company’s securities held for its deferred compensation plans are measured at fair value using quoted prices in active markets for identical assets. If active markets for identical assets are not available to determine fair value, then we use quoted prices for similar assets or inputs that are observable either directly or indirectly. The carrying amounts of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these financial instruments. |
Share-Based Compensation | Share-Based Compensation The Company has share-based compensation plans and an employee stock purchase plan under which shares of Class A Common Stock are available for future grants and sales. The Company recognizes compensation costs over the vesting period of up to 4 years, net of estimated forfeitures. Compensation costs associated with awards with graded vesting terms are recognized on a straight-line basis. |
Foreign Currency Translation | Foreign Currency Translation The balance sheet accounts of the Company’s subsidiaries that have not designated the U.S. dollar as its functional currency, are translated into U.S. dollars using the year-end exchange rate, and statement of earnings items are translated using the average exchange rate for the year. The resulting translation gains or losses are recorded in Stockholders’ equity as a cumulative translation adjustment, which is a component of AOCI within the Consolidated Balance Sheets. |
Acquisitions | Acquisitions We account for acquired businesses using the acquisition method of accounting. This method requires that the purchase price be allocated to the identifiable assets acquired and liabilities assumed at their estimated fair values. The excess of the purchase price over the identifiable assets acquired and liabilities assumed is recorded as goodwill. The estimates used to determine the fair value of long-lived assets, such as intangible assets, can be complex and require judgment. We use information available to us to make fair value determinations and engage independent valuation specialists, when necessary, to assist in the fair value determination of significant acquired long-lived assets. While we use our best estimates and assumptions as a part of the purchase price allocation process, our estimates are inherently uncertain and subject to refinement during the measurement period. Critical estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from revenues and operating activities, customer attrition rates, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but due to the inherent uncertainty during the measurement period, we may record adjustments to the fair value of assets acquired and liabilities assumed, with the corresponding adjustment to goodwill. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements On January 1, 2018, we adopted Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”) applying the modified retrospective method to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605, Revenue Recognition (“ASC 605”). Under ASC 606, revenue is recognized upon the transfer of control of goods or services under a five-step model, whereas under ASC 605 revenue was recognized under a risk and reward-based model. The adoption of ASC 606 did not have a material effect on the Company’s consolidated financial statements or results of operations. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet related to the adoption of ASC 606 were as follows (in millions): As Reported December 31, 2017 Adjustment As Adjusted January 1, 2018 Assets: Inventories, net (1) $ 458 $ (3 ) $ 455 Prepaid expenses and other current assets (2) 24 7 31 Long-term deferred income taxes (3) 119 (5 ) 114 Other long-term assets (4) 65 12 77 Liabilities: Deferred revenue (5) 186 (2 ) 184 Long-term deferred revenue (6) 148 (6 ) 142 Stockholders’ Equity: Retained earnings 1,248 19 1,267 (1) Reflects an adjustment of $(3) million related to changes in revenue recognition patterns. (2) Reflects an adjustment of $ 7 million related to the recognition of contract assets. (3) Reflects the income tax effect of $ (5) million related to the adjustments made for the adoption of ASC 606. (4) Reflects an adjustment of $ 12 million related to the capitalization of costs to obtain contracts (primarily comprised of sales commissions associated with longer term support service contracts). (5) Reflects an adjustment of $ (3) million related to reallocation of revenue between performance obligations and $ 1 million related to changes in the timing of revenue recognition. (6) Reflects an adjustment of $ (6) million related to reallocation of revenue between performance obligations. Under the modified retrospective method of adoption, we are required to disclose the impact to the Consolidated Financial Statements had we continued to follow our accounting policies under the previous revenue recognition guidance. Had the Company applied the previous revenue recognition guidance, revenue would have been $4 million lower for the year ended December 31, 2018. See Note 3 , Revenues for further information. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. The Company adopted this ASU as of January 1, 2018, in conjunction therewith, the Company elected to measure equity investments without readily determinable fair values at cost, adjusted only for impairment losses or for observable price changes in orderly transactions for the identical or similar investment of the same issuer. Prior to ASU 2016-01, such equity investments of the Company were measured at cost, adjusted only for impairment losses. The adoption of this ASU did not have a material impact to the Company's consolidated financial statements or related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) -Measurement of Credit Losses on Financial Instruments . The new standard requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. It replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. There are two transition methods available under the new standard dependent upon the type of financial instrument, either cumulative effect or prospective. The standard will be effective for the Company in the first quarter of 2020. Earlier adoption is permitted only for annual periods after December 15, 2018. Management has assessed the impact of the new standard and determined, based on current operations, that there will not be a material impact to the Company’s consolidated financial statements and disclosures upon adoption in the first quarter of 2020. In February 2016, the FASB issued ASU 2016-02, Leases (Subtopic 842). Also, in July 2018, the FASB issued ASU 2018-11, Leases (Subtopic 842): Targeted Improvements. Together, these ASUs increase the transparency and comparability of organizations by recognizing Right-of-use (“ROU”) assets and Lease liabilities on the Consolidated Balance Sheets and disclosing key quantitative and qualitative information about leasing arrangements. The principal difference from previous guidance is that the ROU assets and Lease liabilities arising from operating leases were not previously recognized in the Consolidated Balance Sheets. The recognition, measurement and cash flows arising from a lease by a lessee have not significantly changed. The ASUs will be effective for the Company in the first quarter of 2019. In transition, lessees and lessors are required to recognize and measure leases at either the beginning of the earliest period presented or the beginning of the period adopted, using a modified retrospective approach. Management expects to elect to not adjust the comparative reporting periods, and apply the ASUs beginning in the period of adoption. In transition, there are also a number of optional practical expedients that entities may elect to apply. Management expects to elect certain practical expedients that it will apply upon transition, which principally include the election to not reassess existing or expired contracts to determine if such contracts contain a lease or if the lease classification would differ, as well as the election to not separate lease and non-lease components for arrangements where the Company is a lessee. Management is finalizing its assessment of the impact of these elections and adoption of this standard on its consolidated financial statements. Management has identified and collected data on its significant leases and selected a system to support future accounting and disclosure requirements and expects to recognize ROU assets related to operating leases of approximately $100 million and Lease liabilities of approximately $120 million on its Consolidated Balance Sheet upon adoption in the first quarter of 2019. The lease liabilities to be recognized will be measured based upon the present value of minimum future payments and the ROU assets to be recognized will be equal to lease liabilities, adjusted for prepaid and accrued rent balances which are recorded in the Consolidated Balance Sheets as of December 31, 2018. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This ASU clarifies existing guidance related to implementation costs incurred in cloud computing arrangements, including the recognition, subsequent measurement, and financial statement presentation of such costs. The standard will be effective for the Company in the first quarter of 2020, with earlier adoption permitted. Management is still assessing the impact of adoption on its consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Cummulative Effect of Changes to the Balance Sheet Related to the Adoption of ASC 606 | The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet related to the adoption of ASC 606 were as follows (in millions): As Reported December 31, 2017 Adjustment As Adjusted January 1, 2018 Assets: Inventories, net (1) $ 458 $ (3 ) $ 455 Prepaid expenses and other current assets (2) 24 7 31 Long-term deferred income taxes (3) 119 (5 ) 114 Other long-term assets (4) 65 12 77 Liabilities: Deferred revenue (5) 186 (2 ) 184 Long-term deferred revenue (6) 148 (6 ) 142 Stockholders’ Equity: Retained earnings 1,248 19 1,267 (1) Reflects an adjustment of $(3) million related to changes in revenue recognition patterns. (2) Reflects an adjustment of $ 7 million related to the recognition of contract assets. (3) Reflects the income tax effect of $ (5) million related to the adjustments made for the adoption of ASC 606. (4) Reflects an adjustment of $ 12 million related to the capitalization of costs to obtain contracts (primarily comprised of sales commissions associated with longer term support service contracts). (5) Reflects an adjustment of $ (3) million related to reallocation of revenue between performance obligations and $ 1 million related to changes in the timing of revenue recognition. (6) Reflects an adjustment of $ (6) million related to reallocation of revenue between performance obligations. |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents our revenues disaggregated by product category for each of our segments, AIT and EVM, for the year ended December 31, 2018 (in millions): Year Ended December 31, 2018 Product Category Segment Tangible Products Services and Software Total AIT $ 1,298 $ 125 $ 1,423 EVM 2,387 408 2,795 Total $ 3,685 $ 533 $ 4,218 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of Inventories, net are as follows (in millions): December 31, December 31, Raw material $ 125 $ 116 Work in process 3 1 Finished goods 392 341 Total $ 520 $ 458 |
Business Acquisition and Dive_2
Business Acquisition and Divestiture (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Purchase Price Allocation to Assets Acquired and Liabilities Assumed | The preliminary purchase price allocation, reflecting interim measurement period adjustments, to assets acquired and liabilities assumed was as follows (in millions): Accounts receivable $ 10 Inventory 22 Identifiable intangible assets 32 Other assets acquired 4 Debt (9 ) Accounts payable (8 ) Deferred revenues (7 ) Other liabilities assumed (7 ) Net Assets Acquired $ 37 Goodwill on acquisition 35 Total consideration $ 72 |
Schedule of Preliminary Purchase Price Allocation to Identifiable Intangible Assets Acquired | The preliminary purchase price allocation to identifiable intangible assets acquired was: Fair Value (in millions) Life (in years) Customer relationships $ 16 9 Current technology 15 7 Trade names 1 3 Total identifiable intangible assets $ 32 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Net Carrying Value of Goodwill | Changes in the net carrying value amount of goodwill were as follows (in millions): Total Goodwill as of December 31, 2016 $ 2,458 Foreign exchange impact 7 Goodwill as of December 31, 2017 2,465 Xplore acquisition (1) 35 Foreign exchange impact (5 ) Goodwill as of December 31, 2018 $ 2,495 (1) See Note 5 , Business Acquisition and Divestiture for detail on the Xplore acquisition. |
Amortized Intangible Assets | The balances in Other Intangibles, net consisted of the following (in millions): As of December 31, 2018 As of December 31, 2017 Gross Carrying Amount Accumulated Net Gross Carrying Amount Accumulated Net Amortized intangible assets Current technology $ 40 $ (26 ) $ 14 $ 24 $ (23 ) $ 1 Trade Names 41 (41 ) — 41 (41 ) — Unpatented technology 241 (221 ) 20 242 (205 ) 37 Patent and patent rights 233 (223 ) 10 235 (215 ) 20 Customer relationships 493 (305 ) 188 481 (240 ) 241 Total $ 1,048 $ (816 ) $ 232 $ 1,023 $ (724 ) $ 299 |
Schedule of Future Amortization Expense | Estimated future intangible asset amortization expense is as follows (in millions): Year Ended December 31, Amount 2019 $ 87 2020 42 2021 41 2022 35 2023 6 Thereafter 21 Total $ 232 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Components of Property, Plant and Equipment | Property, plant and equipment, net is comprised of the following (in millions): December 31, 2018 2017 Buildings $ 57 $ 54 Land 7 8 Machinery and equipment 204 233 Furniture and office equipment 18 19 Software and computer equipment 161 235 Leasehold improvements 75 69 Projects in progress 24 23 546 641 Less accumulated depreciation (297 ) (377 ) Property, plant and equipment, net $ 249 $ 264 |
Costs Associated with Exit an_2
Costs Associated with Exit and Restructuring Activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Rollforward of Exit and Restructuring Accruals | A rollforward of the exit and restructuring accruals is as follows (in millions): Year Ended December 31, 2018 2017 2016 Balance at beginning of year $ 8 $ 10 $ 15 Charged to earnings 11 16 19 Cash paid (14 ) (18 ) (22 ) WLAN Divestiture — — (2 ) Balance at the end of year $ 5 $ 8 $ 10 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Carried at Fair Value | The Company’s financial assets and liabilities carried at fair value as of December 31, 2018 , are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Foreign exchange contracts (1) $ 1 $ 15 $ — $ 16 Forward interest rate swap contracts (2) — 5 — 5 Money market investments related to the deferred compensation plan 17 — — 17 Total Assets at fair value $ 18 $ 20 $ — $ 38 Liabilities: Liabilities related to the deferred compensation plan 17 — — 17 Total Liabilities at fair value $ 17 $ — $ — $ 17 The Company’s financial assets and liabilities carried at fair value as of December 31, 2017 , are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Money market investments related to the deferred compensation plan $ 15 $ — $ — $ 15 Total Assets at fair value $ 15 $ — $ — $ 15 Liabilities: Forward interest rate swap contracts (2) $ — $ 18 $ — $ 18 Foreign exchange contracts (1) 2 9 — 11 Liabilities related to the deferred compensation plan 15 — — 15 Total Liabilities at fair value $ 17 $ 27 $ — $ 44 (1) The fair value of the foreign exchange contracts is calculated as follows: a. Fair value of a put option contract associated with forecasted sales hedges is calculated using bid and ask rates for similar contracts. b. Fair value of regular forward contracts associated with forecasted sales hedges is calculated using the year-end exchange rate adjusted for current forward points. c. Fair value of hedges against net assets is calculated at the year-end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at year end (Level 2). If this is the case, the fair value is calculated at the rate at which the hedge is being settled (Level 1). (2) The fair value of forward interest rate swaps is based upon a valuation model that uses relevant observable market inputs at the quoted intervals, such as forward yield curves, and is adjusted for the Company’s credit risk and the interest rate swap terms. See gross balance reporting in Note 10 , Derivative Instruments . |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Assets and Liabilities | The following table presents the fair value of its derivative instruments (in millions): Asset / (Liability) Balance Sheets Classification Fair Values as of December 31, 2018 2017 Derivative instruments designated as hedges: Foreign exchange contracts Prepaid expenses and other current assets $ 15 $ — Foreign exchange contracts Accrued liabilities — (9 ) Forward interest rate swaps Accrued liabilities — (2 ) Forward interest rate swaps Other long-term liabilities — (8 ) Total derivative instruments designated as hedges $ 15 $ (19 ) Derivative instruments not designated as hedges: Foreign exchange contracts Prepaid expenses and other current assets $ 1 $ — Forward interest rate swaps Prepaid expenses and other current assets 2 — Forward interest rate swaps Other long-term assets 3 — Foreign exchange contracts Accrued liabilities — (2 ) Forward interest rate swaps Accrued liabilities — (1 ) Forward interest rate swaps Other long-term liabilities — (7 ) Total derivative instruments not designated as hedges 6 (10 ) Total net derivative asset (liability) $ 21 $ (29 ) |
Net Gains (Losses) from Changes in Fair Values of Derivatives Not Designated as Hedges | The following table presents the net gains (losses) from changes in fair values of derivatives that are not designated as hedges (in millions): Gain (Loss) Recognized in Income Year Ended December 31, Statements of Operations Classification 2018 2017 2016 Derivative instruments not designated as hedges: Foreign exchange contracts Foreign exchange loss $ 1 $ (24 ) $ 5 Forward interest rate swaps Interest expense, net 8 2 — Total gain (loss) recognized in income $ 9 $ (22 ) $ 5 |
Schedule of Notional Value and Net Fair Value of Outstanding Contracts | The notional values and the net fair value of these outstanding contracts are as follows (in millions): December 31, 2018 2017 Notional balance of outstanding contracts: British Pound/U.S. Dollar £ 1 £ 13 Euro/U.S. Dollar € 45 € 108 British Pound/Euro £ 6 £ 5 Canadian Dollar/U.S. Dollar C$ 6 C$ 12 Czech Koruna/U.S. Dollar Kč Kč 361 Brazilian Real/U.S. Dollar R$ — R$ 34 Australian Dollar/U.S. Dollar A$ 47 A$ 55 Swedish Krona/U.S. Dollar kr — kr 13 Japanese Yen/U.S. Dollar ¥ 396 ¥ 151 Singapore Dollar/U.S. Dollar S$ 7 S$ 4 Mexican Peso/U.S. Dollar Mex$ 225 Mex$ Chinese Yuan/U.S. Dollar ¥ 71 ¥ South African Rand/U.S. Dollar $ 42 $ — Net fair value of asset (liability) outstanding contracts $ 1 $ (2 ) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Carrying Value of Debt | The following table shows the carrying value of the Company’s debt (in millions): December 31, 2018 2017 Term Loan A $ 608 $ 679 Term Loan B 445 1,160 Revolving Credit Facility 408 275 Receivables Financing Facility 139 135 Total debt 1,600 2,249 Less: Debt issuance costs (5 ) (7 ) Less: Unamortized discounts (4 ) (15 ) Less: Current portion of long-term debt (157 ) (51 ) Total long-term debt $ 1,434 $ 2,176 |
Schedule of Maturities of Long-term Debt | At December 31, 2018 , the future maturities of long-term debt, excluding debt discounts and issuance costs, are as follows (in millions): 2019 $ 157 2020 55 2021 1,388 2022 — 2023 — Thereafter — Total future maturities of long-term debt $ 1,600 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The Company’s minimum future lease obligations under all non-cancellable operating leases as of December 31, 2018 are as follows (in millions): Future Minimum Payments 2019 $ 34 2020 29 2021 23 2022 17 2023 13 Thereafter 37 Total minimum lease obligations $ 153 |
Schedule of Accrued Warranty Obligations | The following table is a summary of the Company’s accrued warranty obligation (in millions): Year Ended December 31, Warranty Reserve 2018 2017 2016 Balance at the beginning of the year $ 18 $ 21 $ 22 Acquisition 1 — — Warranty expense 34 28 31 Warranty payments (31 ) (31 ) (32 ) Balance at the end of the year $ 22 $ 18 $ 21 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Equity Awards Activity | A summary of the equity awards authorized and available for future grants under the 2018 Plan is as follows: Available for future grants at December 31, 2017 — Newly authorized options 3,800,000 Granted (10,200 ) Cancellation and forfeitures — Plan termination — Available for future grants at December 31, 2018 3,789,800 A summary of the equity awards authorized and available for future grants under the 2015 Plan is as follows: Available for future grants at December 31, 2017 1,437,435 Newly authorized options — Granted (360,999 ) Cancellation and forfeitures — Plan termination (1,076,436 ) Available for future grants at December 31, 2018 — |
Schedule of Compensation Expense and Related Income Tax benefit | The compensation expense and related income tax benefit from the Company’s share-based compensation plans were included in the Consolidated Statements of Operations as follows (in millions): Year Ended December 31, Compensation costs and related income tax benefit 2018 2017 2016 Cost of sales $ 4 $ 3 $ 2 Selling and marketing 13 8 6 Research and development 15 11 9 General and administration 21 16 11 Total compensation expense $ 53 $ 38 $ 28 Income tax benefit $ 10 $ 11 $ 9 |
Summary of SARs Activity | A summary of the Company’s SARs outstanding is as follows: 2018 2017 2016 SARs Shares Weighted- Shares Weighted- Shares Weighted- Outstanding at beginning of year 1,817,991 $ 65.73 1,740,786 $ 56.15 1,397,611 $ 56.78 Granted 88,042 149.75 402,029 98.87 627,971 52.13 Exercised (598,249 ) 55.93 (250,326 ) 48.66 (160,946 ) 35.37 Forfeited (46,161 ) 80.41 (66,550 ) 75.38 (115,215 ) 65.74 Expired (438 ) 108.20 (7,948 ) 108.20 (8,635 ) 88.65 Outstanding at end of year 1,261,185 $ 75.71 1,817,991 $ 65.73 1,740,786 $ 56.15 Exercisable at end of year 595,086 $ 60.85 874,942 $ 50.86 828,754 $ 45.14 |
Weighted-Average Assumptions Used for Grants of SARs | The following table shows the weighted-average assumptions used for grants of SARs, as well as the fair value of the grants based on those assumptions: 2018 2017 2016 Expected dividend yield 0% 0% 0% Forfeiture rate 8.40% 9.37% 9.01% Volatility 35.93% 35.49% 43.14% Risk free interest rate 2.96% 1.77% 1.29% Range of interest rates 1.68%-3.00% 0.71%-2.41% 0.25%-1.75% Expected weighted-average life (in years) 4.11 4.13 5.33 Weighted-average grant date fair value of SARs granted $47.63 $29.86 $20.18 |
Summary of Outstanding and Exercisable Options | The following table summarizes information about SARs outstanding as of December 31, 2018 : Outstanding Exercisable Aggregate intrinsic value (in millions) $ 105 $ 59 Weighted-average remaining contractual term (in years) 5.6 4.8 |
Summary of Restricted Stock Award Activity | A summary of information relative to the Company’s RSAs is as follows: 2018 2017 2016 Restricted Stock Awards Shares Weighted-Average Shares Weighted-Average Shares Weighted-Average Outstanding at beginning of year 628,642 $ 77.70 622,814 $ 70.19 566,447 $ 77.68 Granted 206,922 150.60 199,629 98.90 389,193 51.93 Released (154,878 ) 107.22 (165,846 ) 75.90 (275,229 ) 59.39 Forfeited (22,962 ) 88.77 (27,955 ) 72.81 (57,597 ) 70.50 Outstanding at end of year 657,724 $ 93.45 628,642 $ 77.70 622,814 $ 70.19 |
Summary of Performance Share Award Activity | A summary of information relative to the Company’s PSAs is as follows: 2018 2017 2016 Performance Share Awards Shares Weighted-Average Shares Weighted-Average Shares Weighted-Average Outstanding at beginning of year 265,747 $ 77.04 379,226 $ 70.14 332,630 $ 73.40 Granted 59,849 146.83 79,423 98.97 172,024 51.01 Released (57,074 ) 107.31 (2,029 ) 62.70 (111,325 ) 46.58 Forfeited (8,795 ) 81.07 (190,873 ) 73.09 (14,103 ) 75.73 Outstanding at end of year 259,727 $ 86.41 265,747 $ 77.04 379,226 $ 70.14 |
Summary of Non-qualified Option Activity | A summary of the Company’s non-qualified options outstanding under the 2006 Plan is as follows: 2018 2017 2016 Non-qualified Options Shares Weighted- Shares Weighted- Shares Weighted- Outstanding at beginning of year 15,705 $ 26.34 154,551 $ 35.96 204,434 $ 36.66 Granted — — — — — — Exercised (15,705 ) 26.34 (132,905 ) 36.86 (47,393 ) 38.60 Forfeited — — — — — — Expired — — (5,941 ) 41.25 (2,490 ) 43.35 Outstanding at end of year — $ — 15,705 $ 26.34 154,551 $ 35.96 Exercisable at end of year — $ — 15,705 $ 26.34 154,551 $ 35.96 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Geographical Sources of Income (Loss) Before Income Taxes | The geographical sources of income (loss) before income taxes were as follows (in millions): Year Ended December 31, 2018 2017 2016 United States $ (25 ) $ (152 ) $ (120 ) Outside United States 549 240 (9 ) Total $ 524 $ 88 $ (129 ) |
Components of Income Tax Expense (Benefit) | Income tax expense (benefit) consisted of the following (in millions): Year Ended December 31, 2018 2017 2016 Current: Federal $ 20 $ 10 $ 14 State 3 8 6 Foreign 77 62 31 Total current 100 80 51 Deferred: Federal (11 ) 20 (31 ) State 5 (10 ) (6 ) Foreign 9 (19 ) (6 ) Total deferred 3 (9 ) (43 ) Total $ 103 $ 71 $ 8 |
Reconciliation of U.S. Federal Statutory Income Tax Rate to Actual Income Tax Rate | A reconciliation of the U.S. federal statutory income tax rate to our actual income tax rate is provided below: Year Ended December 31, 2018 2017 2016 Provision computed at statutory rate 21.0 % 35.0 % 35.0 % U.S. Tax Reform - one-time transition tax (0.6 ) 41.8 0.0 Remeasurement of deferred taxes 0.7 (56.0 ) 0.0 Change in valuation allowance (4.5 ) 96.4 (1.0 ) U.S. impact of Enterprise acquisition 1.1 12.9 (14.1 ) Change in contingent income tax reserves 3.2 14.0 (1.6 ) Foreign earnings subject to U.S. taxation 2.0 2.0 (6.6 ) Foreign rate differential (2.0 ) (29.1 ) (16.0 ) Intra-entity transactions 0.0 (18.8 ) 0.0 State income tax, net of federal tax benefit 0.8 (5.3 ) (1.0 ) Tax credits (1.9 ) (5.7 ) 9.5 Equity compensation deductions (2.0 ) (5.6 ) (0.4 ) Return to provision and other true ups 1.1 (3.2 ) (3.7 ) Other 0.8 2.3 (6.3 ) Provision for income taxes 19.7 % 80.7 % (6.2 )% |
Components of Deferred Tax Assets and Liabilities | Tax effects of temporary differences that resulted in deferred tax assets and liabilities are as follows (in millions): December 31, 2018 2017 Deferred tax assets: Capitalized research expenditures $ 28 $ 32 Deferred revenue 21 21 Tax credits 28 31 Net operating loss carryforwards 394 338 Other accruals 20 20 Inventory items 20 20 Capitalized software costs 8 14 Sales return/rebate reserve 41 33 Share-based compensation expense 15 12 Accrued bonus 3 1 Unrealized gains and losses on securities and investments — 8 Valuation allowance (56 ) (134 ) Total deferred tax assets 522 396 Deferred tax liabilities: Depreciation and amortization 411 275 Unrealized gains and losses on securities and investments 2 — Undistributed earnings 3 2 Total deferred tax liabilities $ 416 $ 277 Net deferred tax assets $ 106 $ 119 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions): Year ended December 31, 2018 2017 Balance at beginning of year $ 51 $ 42 Additions for tax positions related to the current year 1 0 Additions for tax positions related to prior years 22 11 Reductions for tax positions related to prior years (11 ) (1 ) Settlements for tax positions (13 ) (1 ) Balance at end of year $ 50 $ 51 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Earnings (Loss) Per Share | Earnings (loss) per share (in millions, except share data): Year Ended December 31, 2018 2017 2016 Basic: Net income (loss) $ 421 $ 17 $ (137 ) Weighted-average shares outstanding (1) 53,591,655 53,021,761 51,579,112 Basic earnings (loss) per share $ 7.86 $ 0.33 $ (2.65 ) Diluted: Net income (loss) $ 421 $ 17 $ (137 ) Weighted-average shares outstanding (1) 53,591,655 53,021,761 51,579,112 Dilutive shares (2) 708,157 667,071 — Diluted weighted-average shares outstanding 54,299,812 53,688,832 51,579,112 Diluted earnings (loss) per share $ 7.76 $ 0.32 $ (2.65 ) (1) In periods of net loss, restricted stock awards that are classified as participating securities are excluded from the weighted-average shares outstanding computation. (2) In periods of net loss, options are anti-dilutive and therefore excluded from the earnings (loss) per share calculation. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | The components of AOCI for each of the three years ended December 31 are as follows (in millions): Unrealized gain (loss) on sales hedging Unrealized (loss) gain on forward interest rate swaps Foreign Currency translation adjustments Total Balance at December 31, 2015 $ (1 ) $ (15 ) $ (32 ) $ (48 ) Other comprehensive income (loss) before reclassifications 1 (1 ) (4 ) (4 ) Amounts reclassified from AOCI (1) 7 2 — 9 Tax expense (1 ) (1 ) — (2 ) Other comprehensive income (loss) 7 — (4 ) 3 Balance at December 31, 2016 6 (15 ) (36 ) (45 ) Other comprehensive (loss) income before reclassifications (26 ) 1 2 (23 ) Amounts reclassified from AOCI (1) 8 8 — 16 Tax benefit (expense) 3 (3 ) — — Other comprehensive (loss) income (15 ) 6 2 (7 ) Balance at December 31, 2017 (9 ) (9 ) (34 ) (52 ) Other comprehensive income (loss) before reclassifications 38 8 (13 ) 33 Amounts reclassified from AOCI (1) (13 ) 4 — (9 ) Tax expense (4 ) (3 ) — (7 ) Other comprehensive income (loss) 21 9 (13 ) 17 Balance at December 31, 2018 $ 12 $ — $ (47 ) $ (35 ) (1) See Note 10 , Derivative Instruments regarding timing of reclassifications to operating results. |
Segment Information and Geogr_2
Segment Information and Geographic Data (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Financial Information by Segment | Financial information by segment is presented as follows (in millions): Year Ended December 31, 2018 2017 2016 Net sales: AIT $ 1,423 $ 1,311 $ 1,247 EVM 2,795 2,414 2,337 Total segment Net sales 4,218 3,725 3,584 Corporate, eliminations (1) — (3 ) (10 ) Total Net sales $ 4,218 $ 3,722 $ 3,574 Operating income: AIT (2)(3) $ 325 $ 274 $ 281 EVM (2)(3) 404 301 245 Total segment operating income 729 575 526 Corporate, eliminations (4) (119 ) (253 ) (446 ) Total Operating income $ 610 $ 322 $ 80 (1) Amounts included in Corporate, eliminations consist of purchase accounting adjustments related to the Enterprise Acquisition. (2) During 2018, the Company revised its methodology for allocating certain operating expenses across its two reportable segments to more accurately reflect where these operating costs are being incurred. The reallocations relate primarily to facilities, information technology, marketing and human resources expenses. All periods are presented on a comparable basis and reflect these changes which reclassified operating expenses from AIT to EVM of $14 million and $41 million for the years ended December 31, 2017 and 2016, respectively. There was no impact to the Consolidated Financial Statements as a result of these reallocations. (3) AIT and EVM segment operating income includes depreciation expense and share-based compensation expense. The amounts of depreciation expense and share-based compensation attributable to AIT and EVM are proportionate to each segment’s Net sales. (4) Amounts included in Corporate, eliminations consist of purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, and exit and restructuring costs. |
Information Regarding Operations by Geographic Area | Geographic data for Net sales is as follows (in millions): Year Ended December 31, 2018 2017 2016 North America $ 2,041 $ 1,798 $ 1,739 Europe, Middle East, and Africa 1,409 1,221 1,138 Asia-Pacific 520 468 483 Latin America 248 235 214 Total Net sales $ 4,218 $ 3,722 $ 3,574 Geographic data for long-lived assets, defined as property, plant and equipment is as follows (in millions): Year Ended December 31, 2018 2017 2016 North America $ 225 $ 238 $ 267 Europe, Middle East, and Africa 14 14 13 Asia-Pacific 7 9 9 Latin America 3 3 3 Total long-lived assets $ 249 $ 264 $ 292 |
Net Sales by Country | Net sales by country that are greater than 10% of total Net sales are as follows (in millions): Year Ended December 31, 2018 2017 2016 United States $ 2,247 $ 1,984 $ 1,950 United Kingdom 1,403 1,196 1,065 Singapore 508 454 362 Other 60 88 197 Total Net sales $ 4,218 $ 3,722 $ 3,574 |
Significant Customers as Percentage of Total Net Sales | Our Net sales to significant customers as a percentage of the total Company’s Net sales by segment were as follows: Year Ended December 31, 2018 2017 2016 AIT EVM Total AIT EVM Total AIT EVM Total Customer A 6.2 % 14.1 % 20.3 % 6.3 % 15.0 % 21.3 % 5.9 % 14.2 % 20.1 % Customer B 5.6 % 10.1 % 15.7 % 5.3 % 8.9 % 14.2 % 5.0 % 8.2 % 13.2 % Customer C 6.2 % 7.9 % 14.1 % 6.2 % 7.0 % 13.2 % 5.3 % 7.1 % 12.4 % |
Supplementary Financial Infor_2
Supplementary Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in millions): December 31, 2018 2017 Foreign Exchange Contracts $ 16 $ — Other 38 24 Prepaid expenses and other current assets $ 54 $ 24 |
Components of Accrued Liabilities | The components of Accrued liabilities are as follows (in millions): December 31, 2018 2017 Accrued incentive compensation $ 127 $ 101 Customer reserves 45 41 Accrued payroll 55 50 Interest payable 5 15 Accrued other expenses 90 89 Accrued liabilities $ 322 $ 296 |
Summary of Quarterly Results of Operations | Summary of Quarterly Results of Operations (unaudited, in millions): 2018 First Second Third Fourth Total Year Total Net sales $ 977 $ 1,012 $ 1,092 $ 1,137 $ 4,218 Gross profit 465 472 505 539 1,981 Net income 109 70 127 115 421 Net earnings per common share: Basic earnings per share: $ 2.04 $ 1.31 $ 2.37 $ 2.14 $ 7.86 Diluted earnings per share: 2.01 1.29 2.34 2.11 7.76 2017 First Second Third Fourth Total Year Total Net sales $ 865 $ 896 $ 935 $ 1,026 $ 3,722 Gross profit 401 411 429 469 1,710 Net (loss) income 8 17 (12 ) 4 17 Net earnings per common share: Basic (loss) earnings per share: $ 0.16 $ 0.33 $ (0.23 ) $ 0.07 $ 0.33 Diluted (loss) earnings per share: 0.16 0.32 (0.23 ) 0.07 0.32 |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassified costs from Accrued liabilities to Accounts payable | $ 41 |
Significant Accounting Polici_4
Significant Accounting Policies - Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Building | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 30 years |
Property, Plant and Equipment, Other | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 3 years |
Property, Plant and Equipment, Other | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 10 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 10 years |
Significant Accounting Polici_5
Significant Accounting Policies - Other Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Capitalized intangible assets, useful life | 3 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Capitalized intangible assets, useful life | 15 years |
Significant Accounting Polici_6
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Equity securities held | $ 25,000,000 | $ 25,000,000 | |
Net gain on sale of equity securities | 10,000,000 | ||
Impairment losses | 0 | 1,000,000 | $ 7,000,000 |
Advertising expenses | $ 18,000,000 | $ 18,000,000 | $ 18,000,000 |
Unearned compensation cost, expected to be recognized over period (years) | 1 year 6 months |
Significant Accounting Polici_7
Significant Accounting Policies - Warranty Coverage (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Mobile computers printers and batteries | |
Product Warranty Liability [Line Items] | |
Product warranty term | 1 year |
Printheads | |
Product Warranty Liability [Line Items] | |
Product warranty term | 6 months |
Battery-based products | |
Product Warranty Liability [Line Items] | |
Product warranty term | 90 days |
Minimum | Advanced data capture products | |
Product Warranty Liability [Line Items] | |
Product warranty term | 1 year |
Maximum | Advanced data capture products | |
Product Warranty Liability [Line Items] | |
Product warranty term | 5 years |
Significant Accounting Polici_8
Significant Accounting Policies - Compensation Expense and Related Tax Benefit for Equity Based Payments (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Vesting period for SARs (years) | 1 year 6 months |
Significant Accounting Polici_9
Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 30, 2019 |
Assets | |||||||||||||
Inventories, net | $ 455 | $ 520 | $ 458 | $ 520 | $ 458 | ||||||||
Prepaid expenses and other current assets | 31 | 54 | 24 | 54 | 24 | ||||||||
Long-term deferred income taxes | 114 | 114 | 119 | 114 | 119 | ||||||||
Other long-term assets | 77 | 87 | 65 | 87 | 65 | ||||||||
Liabilities [Abstract] | |||||||||||||
Deferred revenue | 184 | 210 | 186 | 210 | 186 | ||||||||
Long-term deferred revenue | 142 | 172 | 148 | 172 | 148 | ||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||
Retained earnings | 1,267 | 1,688 | 1,248 | $ 1,688 | 1,248 | ||||||||
Adjustment related to changes in timing of revenue recognition | 1 | ||||||||||||
Revenues | Revenues As prescribed in ASC 606, the Company recognizes revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Performance Obligations We enter into contract arrangements that may include various combinations of tangible products and services, which generally are capable of being distinct and accounted for as separate performance obligations. For these types of contract arrangements, we evaluate whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract has more than one performance obligation. This evaluation requires judgment and the decision to combine a group of contracts or separate the combined or single contract into multiple performance obligations could change the amount of revenue recorded in the reporting period. We use the accounting guidance on “capable of being distinct” and “distinct within the context of the contract” to assist with the evaluation. For contract arrangements that include multiple performance obligations, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices for the products and/or services underlying each performance obligation. When the standalone selling prices are not directly observable, we estimate the standalone selling prices primarily based on the expected cost-plus margin approach. For arrangements comprised strictly of the sale of product and performance of maintenance type services where the standalone selling price of the maintenance service is not discernible, we estimate the standalone selling price of the maintenance contract using the residual approach. When the residual approach cannot be applied, regional pricing, marketing strategies and business practices are evaluated and analyzed to derive the estimated standalone selling price using a cost-plus margin methodology. The Company recognizes revenue when transfer of control has occurred for the goods or services sold. Control is deemed to have been transferred when the customer has the ability to direct the use of and has obtained substantially all of the remaining benefits from the goods and services sold. The Company uses judgment in the evaluation of the following criteria: 1) the customer simultaneously receives and consumes the benefits provided by the transfer of goods or service; 2) the performance creates or enhances an asset that is under control of the customer; 3) the performance does not create an asset with an alternative use to the Company; and 4) the Company has an enforceable right to payment, in order to determine whether control transfers at a point in time or over time. For each performance obligation satisfied over time, the Company measures its progress toward completion to determine the timing of revenue recognition. Judgment is also used in the evaluation of the following transfer of control criteria: 1) the Company has a present right to payment for the asset; 2) the legal title to the asset has transferred to the customer; 3) the customer has physical possession of the asset; 4) the customer has the significant risks and rewards of ownership of the asset; and 5) the customer has accepted the asset, in order to determine when revenue should be recognized in a point in time revenue recognition pattern. Assuming all other criteria for revenue recognition have been met, for products and services sold on a standalone basis, revenue is generally recognized upon shipment and by using an output method or time-based method respectively. In cases where a bundle of products and services are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control. The Company’s remaining obligations that are greater than one year in duration relate primarily to repair and support services. The aggregated transaction price allocated to remaining performance obligations related to these types of service arrangements was $489 million as of December 31, 2018 . We expect to recognize these remaining performance obligations over a period of approximately two years. For some of our transactions, products are sold with a right of return, and we may also provide other rebates, price protection, or incentives, which are accounted for as variable consideration. The Company estimates the amount of variable consideration by using the expected value or the most likely amount method and reduces the revenue by those estimated amounts, only to the extent it is probable that a significant reversal in the cumulative revenue recognized will not occur. These estimates are reviewed and updated, as necessary, at the end of each reporting period. Revenue recognized in the reporting period from performance obligations satisfied in previous periods was not material for the year ended December 31, 2018 . Disaggregation of Revenue The following table presents our revenues disaggregated by product category for each of our segments, AIT and EVM, for the year ended December 31, 2018 (in millions): Year Ended December 31, 2018 Product Category Segment Tangible Products Services and Software Total AIT $ 1,298 $ 125 $ 1,423 EVM 2,387 408 2,795 Total $ 3,685 $ 533 $ 4,218 In addition, refer to Note 18 , Segment Information & Geographic Data for Net sales to customers by geographic region. We recognize revenue arising from performance obligations outlined in contracts with our customers that are satisfied at a point in time and over time. Substantially all of our revenue for tangible products is recognized at a point in time, whereby revenue for services and software is predominantly recognized over time. Contract Balances Progress on satisfying performance obligations under contracts with customers and the related billings and cash collections are recorded on the Consolidated Balance Sheets in Accounts receivable, net and Prepaid expenses and other current assets. The opening and closing contract assets balances were $7 million and $5 million , as of January 1, 2018 and December 31, 2018 , respectively, and were recorded within Prepaid expenses and other current assets on the Consolidated Balance Sheets. These contract assets result from timing differences between the billing schedule and the products and services delivery schedules, as well as, the impact from the allocation of the transaction price among performance obligations for contracts that include multiple performance obligations. Our policy is to test these contract asset balances for impairment in accordance with ASC 310, Receivables . No impairment losses have been recorded for the year ended December 31, 2018 . Deferred revenue on the Consolidated Balance Sheets, consist of payments and billings in advance of our performance. The combined short-term and long-term deferred revenue balances were $382 million and $334 million as of December 31, 2018 and December 31, 2017, respectively. During the year ended December 31, 2018 , the Company recognized $181 million in revenue which was previously included in the beginning balance of deferred revenue. Our payment terms vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts do not include a significant financing component. Costs to obtain a contract Our incremental direct costs of obtaining a contract, which consist of sales commissions and incremental fringe benefits, are deferred and amortized over the weighted-average contract term, consistent with the guidance in ASC 340 Other Assets and Deferred Costs . The incremental costs to obtain a contract, which were previously expensed as incurred under ASC 605, and the determination of the amortization period are derived at a portfolio level and the amortization is recognized on a straight-line basis. The adoption of ASC 606 required the capitalization of these costs which resulted in an adjustment to increase retained earnings. The Company recorded a $12 million increase to Other long-term assets on the Consolidated Balance Sheet as of January 1, 2018. The Company recognized amortization expense related to commissions during the year ended December 31, 2018 of $10 million . The ending balance of the deferred commissions was $15 million as of December 31, 2018 . The Company elected a practical expedient permitted by ASC 606, whereby the incremental costs of obtaining a contract are expensed as incurred if the amortization period of the assets would otherwise be one year or less. | ||||||||||||
Impact on revenue if previous revenue recognition guidance was applied | $ (1,137) | $ (1,092) | $ (1,012) | $ (977) | (1,026) | $ (935) | $ (896) | $ (865) | $ (4,218) | (3,722) | $ (3,574) | ||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||||
Assets | |||||||||||||
Inventories, net | 458 | 458 | |||||||||||
Prepaid expenses and other current assets | 24 | 24 | |||||||||||
Long-term deferred income taxes | 119 | 119 | |||||||||||
Other long-term assets | 65 | 65 | |||||||||||
Liabilities [Abstract] | |||||||||||||
Deferred revenue | 186 | 186 | |||||||||||
Long-term deferred revenue | 148 | 148 | |||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||
Retained earnings | $ 1,248 | $ 1,248 | |||||||||||
ASU 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||
Impact on revenue if previous revenue recognition guidance was applied | $ 4 | ||||||||||||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||||||
Assets | |||||||||||||
Inventories, net | (3) | ||||||||||||
Prepaid expenses and other current assets | 7 | ||||||||||||
Long-term deferred income taxes | (5) | ||||||||||||
Other long-term assets | 12 | ||||||||||||
Liabilities [Abstract] | |||||||||||||
Deferred revenue | (2) | ||||||||||||
Long-term deferred revenue | (6) | ||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||
Retained earnings | 19 | ||||||||||||
Adjustment related to reallocation of revenue between performance obligations | $ (3) | ||||||||||||
Scenario, Forecast | ASU 2016-02 | |||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||
Expected to recognize operating lease, Right-of-Use asset | $ 100 | ||||||||||||
Expected to recognize operating lease, liability | $ 120 |
Revenues (Details)
Revenues (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | |||
Remaining performance obligation | $ 489,000,000 | ||
Remaining performance obligation period of recognition | 2 years | ||
Capitalized Contract Cost [Line Items] | |||
Capitalized contract, impairment loss | $ 0 | ||
Deferred revenue | 382,000,000 | $ 334,000,000 | |
Revenue recognized which was previously included in deferred revenue | 181,000,000 | ||
Other long-term assets | 87,000,000 | $ 77,000,000 | $ 65,000,000 |
Sales Commissions | |||
Capitalized Contract Cost [Line Items] | |||
Amortization expense related to commissions | 10,000,000 | ||
Deferred commissions | 15,000,000 | ||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
Capitalized Contract Cost [Line Items] | |||
Other long-term assets | 12,000,000 | ||
Prepaid expenses and other current assets | |||
Capitalized Contract Cost [Line Items] | |||
Contract assets | $ 5,000,000 | $ 7,000,000 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total Net sales | $ 1,137 | $ 1,092 | $ 1,012 | $ 977 | $ 1,026 | $ 935 | $ 896 | $ 865 | $ 4,218 | $ 3,722 | $ 3,574 |
Tangible Products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total Net sales | 3,685 | 3,223 | 3,056 | ||||||||
Services and Software | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total Net sales | 533 | $ 499 | $ 518 | ||||||||
AIT | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total Net sales | 1,423 | ||||||||||
AIT | Tangible Products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total Net sales | 1,298 | ||||||||||
AIT | Services and Software | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total Net sales | 125 | ||||||||||
EVM | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total Net sales | 2,795 | ||||||||||
EVM | Tangible Products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total Net sales | 2,387 | ||||||||||
EVM | Services and Software | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total Net sales | $ 408 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | |||
Raw material | $ 125 | $ 116 | |
Work in process | 3 | 1 | |
Finished goods | 392 | 341 | |
Total | $ 520 | $ 455 | $ 458 |
Business Acquisition and Dive_3
Business Acquisition and Divestiture - Additional Information (Detail) - USD ($) $ in Millions | Aug. 14, 2018 | Oct. 28, 2016 | Dec. 31, 2018 | Sep. 29, 2018 | Oct. 01, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||||
Acquisition and integration costs | $ 8 | $ 50 | $ 125 | |||||
Goodwill | $ 2,495 | 2,495 | 2,465 | 2,458 | ||||
Proceeds from divestiture of business | 0 | $ 0 | 39 | |||||
Wireless LAN (WLAN) | Divestiture Group | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from divestiture of business | $ 39 | |||||||
Non-cash pre-tax charge related to disposal group | $ 62 | |||||||
Goodwill Impairment charge – wireless LAN divestiture | (32) | (32) | ||||||
Revenue from sale of assets | 106 | |||||||
Gross profit from sale of assets | $ 47 | |||||||
Wireless LAN (WLAN) | Divestiture Group | Other Intangibles | ||||||||
Business Acquisition [Line Items] | ||||||||
Impairment of other intangibles | $ 30 | |||||||
Xplore Technologies Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Preliminary purchase price | $ 87 | |||||||
Consideration transferred for net assets acquired | $ 72 | 72 | ||||||
Consideration paid, debt assumed | 9 | 9 | ||||||
Consideration paid, other liabilities | 7 | $ 6 | ||||||
Acquisition and integration costs | $ 8 | |||||||
Measurement period adjustments, other liabilities assumed | (1) | |||||||
Measurement period adjustment, decrease inventory | 1 | |||||||
Goodwill adjustments | $ 2 | |||||||
Goodwill | $ 35 |
Business Acquisition and Dive_4
Business Acquisition and Divestiture - Schedule of Preliminary Purchase Price Allocation to Assets and Liabilities (Details) - USD ($) $ in Millions | Aug. 14, 2018 | Sep. 29, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||
Goodwill on acquisition | $ 2,495 | $ 2,465 | $ 2,458 | ||
Xplore Technologies Corporation | |||||
Business Acquisition [Line Items] | |||||
Accounts receivable | $ 10 | ||||
Inventory | 22 | ||||
Identifiable intangible assets | 32 | ||||
Other assets acquired | 4 | ||||
Debt | (9) | $ (9) | |||
Accounts payable | (8) | ||||
Deferred revenues | (7) | ||||
Other liabilities assumed | (7) | (6) | |||
Net Assets Acquired | 37 | ||||
Goodwill on acquisition | 35 | ||||
Consideration transferred for net assets acquired | $ 72 | $ 72 |
Business Acquisition and Dive_5
Business Acquisition and Divestiture - Schedule of Preliminary Purchase Price Allocation to Intangible Assets Acquired (Details) - Xplore Technologies Corporation $ in Millions | Aug. 14, 2018USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired | $ 32 |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired | $ 16 |
Life (in years) | 9 years |
Current technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired | $ 15 |
Life (in years) | 7 years |
Trade names | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired | $ 1 |
Life (in years) | 3 years |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles, net - Changes in Net Carrying Value of Goodwill (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 2,465 | $ 2,458 |
Foreign exchange impact | (5) | 7 |
Xplore acquisition | 35 | |
Ending balance | $ 2,495 | $ 2,465 |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles, net - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Oct. 01, 2016 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||||
Goodwill | $ 2,458 | $ 2,495 | $ 2,465 | |
Fair value exceeding carrying value (at least), percent | 40.00% | |||
Divestiture Group | Wireless LAN (WLAN) | ||||
Goodwill [Line Items] | ||||
Goodwill impairment | $ 32 | $ 32 | ||
EVM | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 2,300 | |||
AIT | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 154 |
Goodwill and Other Intangible_5
Goodwill and Other Intangibles, net - Amortized Intangible Assets (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 1,048 | $ 1,023 | |
Accumulated Amortization | (816) | (724) | |
Net | 232 | 299 | |
Amortization expense | 97 | 184 | $ 229 |
Current technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 40 | 24 | |
Accumulated Amortization | (26) | (23) | |
Net | 14 | 1 | |
Trade Names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 41 | 41 | |
Accumulated Amortization | (41) | (41) | |
Net | 0 | 0 | |
Unpatented technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 241 | 242 | |
Accumulated Amortization | (221) | (205) | |
Net | 20 | 37 | |
Patent and patent rights | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 233 | 235 | |
Accumulated Amortization | (223) | (215) | |
Net | 10 | 20 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 493 | 481 | |
Accumulated Amortization | (305) | (240) | |
Net | $ 188 | $ 241 |
Goodwill and Other Intangible_6
Goodwill and Other Intangibles, net - Estimated Amortization Expense for Future Periods (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Year Ended December 31, | |
2,019 | $ 87 |
2,020 | 42 |
2,021 | 41 |
2,022 | 35 |
2,023 | 6 |
Thereafter | 21 |
Total | $ 232 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 546 | $ 641 | |
Less accumulated depreciation | (297) | (377) | |
Property, plant and equipment, net | 249 | 264 | |
Depreciation | 78 | 79 | $ 75 |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 57 | 54 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 7 | 8 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 204 | 233 | |
Furniture and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 18 | 19 | |
Software and computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 161 | 235 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 75 | 69 | |
Projects in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 24 | $ 23 |
Costs Associated with Exit an_3
Costs Associated with Exit and Restructuring Activities - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||
Exit and restructuring costs | $ 11,000,000 | $ 16,000,000 | $ 19,000,000 | |
Life to date restructuring costs | 92,000,000 | |||
Restructuring accrual | 5,000,000 | 8,000,000 | $ 10,000,000 | $ 15,000,000 |
Accrued liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring accrual | 4,000,000 | |||
Other long-term liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring accrual | 1,000,000 | |||
Severance, stay bonuses, and other employee-related expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Life to date restructuring costs | 80,000,000 | |||
Obligations for future lease payments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Life to date restructuring costs | 12,000,000 | |||
Productivity Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Exit and restructuring charges incurred | 23,000,000 | |||
Exit and restructuring costs | 11,000,000 | 12,000,000 | ||
Acquisition Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Exit and restructuring charges incurred | 69,000,000 | |||
Exit and restructuring costs | $ 0 | $ 4,000,000 |
Costs Associated with Exit an_4
Costs Associated with Exit and Restructuring Activities - Rollforward of Exit and Restructuring Accrual (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of year | $ 8 | $ 10 | $ 15 |
Charged to earnings | 11 | 16 | 19 |
Cash paid | (14) | (18) | (22) |
WLAN Divestiture | 0 | 0 | (2) |
Balance at the end of year | $ 5 | $ 8 | $ 10 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Carried at Fair Value (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | $ 38 | $ 15 |
Total Liabilities at fair value | 17 | 44 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 18 | 15 |
Total Liabilities at fair value | 17 | 17 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 20 | 0 |
Total Liabilities at fair value | 0 | 27 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 0 | 0 |
Total Liabilities at fair value | 0 | 0 |
Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 16 | |
Total Liabilities at fair value | 11 | |
Foreign exchange contracts | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 1 | |
Total Liabilities at fair value | 2 | |
Foreign exchange contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 15 | |
Total Liabilities at fair value | 9 | |
Foreign exchange contracts | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 0 | |
Total Liabilities at fair value | 0 | |
Forward interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 5 | |
Total Liabilities at fair value | 18 | |
Forward interest rate swaps | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 0 | |
Total Liabilities at fair value | 0 | |
Forward interest rate swaps | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 5 | |
Total Liabilities at fair value | 18 | |
Forward interest rate swaps | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 0 | |
Total Liabilities at fair value | 0 | |
Money market investments related to the deferred compensation plan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 17 | 15 |
Money market investments related to the deferred compensation plan | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 17 | 15 |
Money market investments related to the deferred compensation plan | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 0 | 0 |
Money market investments related to the deferred compensation plan | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 0 | 0 |
Liabilities related to the deferred compensation plan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 17 | 15 |
Liabilities related to the deferred compensation plan | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 17 | 15 |
Liabilities related to the deferred compensation plan | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 0 | 0 |
Liabilities related to the deferred compensation plan | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | $ 0 | $ 0 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Total Net Derivative Liability | $ 21 | $ (29) |
Derivative instruments designated as hedges | ||
Derivative [Line Items] | ||
Total Net Derivative Liability | 15 | (19) |
Derivative instruments not designated as hedges | ||
Derivative [Line Items] | ||
Total Net Derivative Liability | 6 | (10) |
Prepaid expenses and other current assets | Foreign exchange contracts | Derivative instruments designated as hedges | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 15 | 0 |
Prepaid expenses and other current assets | Foreign exchange contracts | Derivative instruments not designated as hedges | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 1 | 0 |
Prepaid expenses and other current assets | Forward interest rate swaps | Derivative instruments not designated as hedges | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 2 | 0 |
Accrued liabilities | Foreign exchange contracts | Derivative instruments designated as hedges | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 0 | (9) |
Accrued liabilities | Foreign exchange contracts | Derivative instruments not designated as hedges | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 0 | (2) |
Accrued liabilities | Forward interest rate swaps | Derivative instruments designated as hedges | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 0 | (2) |
Accrued liabilities | Forward interest rate swaps | Derivative instruments not designated as hedges | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 0 | (1) |
Other long-term assets | Forward interest rate swaps | Derivative instruments not designated as hedges | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 3 | 0 |
Other long-term liabilities | Forward interest rate swaps | Derivative instruments designated as hedges | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 0 | (8) |
Other long-term liabilities | Forward interest rate swaps | Derivative instruments not designated as hedges | ||
Derivative [Line Items] | ||
Derivative liability, fair value | $ 0 | $ (7) |
Derivative Instruments - Net Ga
Derivative Instruments - Net Gains (Losses) from Changes in Fair Value (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total gain (loss) recognized in income | $ 13 | $ (8) | $ (7) |
Derivative instruments not designated as hedges: | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total gain (loss) recognized in income | 9 | (22) | 5 |
Foreign exchange contracts | Foreign exchange loss | Derivative instruments not designated as hedges: | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total gain (loss) recognized in income | 1 | (24) | 5 |
Forward interest rate swaps | Interest expense, net | Derivative instruments not designated as hedges: | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total gain (loss) recognized in income | $ 8 | $ 2 | $ 0 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) € in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018USD ($)swap | Dec. 31, 2018USD ($)swap | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018EUR (€)swap | Dec. 31, 2017EUR (€) | |
Change in unrealized gain (loss) on anticipated sales hedging: | ||||||
Gain or loss on contract | $ 13 | $ (8) | $ (7) | |||
Foreign currency cash flow hedge derivative | € | € 496 | € 389 | ||||
To be amortized through AOCI and subsequently reclassified into interest expense | 2 | |||||
Interest expense | $ 91 | 227 | $ 193 | |||
Number of Interest rate swaps | swap | 3 | 3 | 3 | |||
One-time payment classified within Net Cash provided by Operating Activities | $ 7 | |||||
Derivative instruments designated as hedges | ||||||
Change in unrealized gain (loss) on anticipated sales hedging: | ||||||
Derivative, term of contract | 12 months | |||||
Foreign exchange contracts | ||||||
Change in unrealized gain (loss) on anticipated sales hedging: | ||||||
Derivative, increase In gross asset and gross liability, Net | 1 | $ 1 | $ 11 | |||
Forward interest rate swaps | ||||||
Change in unrealized gain (loss) on anticipated sales hedging: | ||||||
To be amortized through AOCI and subsequently reclassified into interest expense | 1 | |||||
Forward interest rate swaps | Derivative instruments designated as hedges | ||||||
Change in unrealized gain (loss) on anticipated sales hedging: | ||||||
Derivative forward long-term interest rate swap | $ 800 | 800 | ||||
Interest expense | $ 2 |
Derivative Instruments - Notion
Derivative Instruments - Notional Values and Net Fair Value of Outstanding Contracts (Details) - Foreign Exchange Forward € in Millions, ¥ in Millions, ¥ in Millions, £ in Millions, kr in Millions, R$ in Millions, Kč in Millions, $ in Millions, $ in Millions, $ in Millions, $ in Millions, $ in Millions | Dec. 31, 2018CZK (Kč) | Dec. 31, 2018SEK (kr) | Dec. 31, 2018USD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2018AUD ($) | Dec. 31, 2018JPY (¥) | Dec. 31, 2018GBP (£) | Dec. 31, 2018MXN ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018EUR (€) | Dec. 31, 2018BRL (R$) | Dec. 31, 2018SGD ($) | Dec. 31, 2017CZK (Kč) | Dec. 31, 2017SEK (kr) | Dec. 31, 2017USD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2017AUD ($) | Dec. 31, 2017JPY (¥) | Dec. 31, 2017GBP (£) | Dec. 31, 2017MXN ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2017EUR (€) | Dec. 31, 2017BRL (R$) | Dec. 31, 2017SGD ($) |
Derivative [Line Items] | ||||||||||||||||||||||||
Net fair value of asset (liability) outstanding contracts | $ | $ 1 | $ (2) | ||||||||||||||||||||||
US Dollar | ||||||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||||||
Notional balance of outstanding contracts: | Kč 0 | kr 0 | $ 42 | $ 6 | $ 47 | ¥ 396 | £ 1 | $ 225 | ¥ 71 | € 45 | R$ 0 | $ 7 | Kč 361 | kr 13 | $ 0 | $ 12 | $ 55 | ¥ 151 | £ 13 | $ 0 | ¥ 0 | € 108 | R$ 34 | $ 4 |
Euro | ||||||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||||||
Notional balance of outstanding contracts: | £ | £ 6 | £ 5 |
Long-Term Debt - Summary of Car
Long-Term Debt - Summary of Carrying Value of Debt (Detail) € in Millions, $ in Millions | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,600 | $ 2,249 | |
Less debt issuance costs | (5) | (7) | |
Less unamortized discounts | (4) | (15) | |
Less: Current portion of long-term debt | (157) | (51) | |
Total long-term debt | 1,434 | 2,176 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | 408 | € 92 | 275 |
Term Loan A | Loans Payable | |||
Debt Instrument [Line Items] | |||
Long-term debt | 608 | 679 | |
Term Loan B | Loans Payable | |||
Debt Instrument [Line Items] | |||
Long-term debt | 445 | 1,160 | |
Receivables Financing Facility | Secured Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 139 | $ 135 |
Long-Term Debt - Future Maturit
Long-Term Debt - Future Maturities of Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2,019 | $ 157 | |
2,020 | 55 | |
2,021 | 1,388 | |
2,022 | 0 | |
2,023 | 0 | |
Thereafter | 0 | |
Total future maturities of long-term debt | $ 1,600 | $ 2,249 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) € in Millions, $ in Millions | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||
Long-term debt borrowed in Euros | $ 1,600 | $ 2,249 | |
Fair value of long-term debt | 1,600 | 2,200 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt borrowed in Euros | $ 408 | € 92 | $ 275 |
Long-Term Debt - Credit Facilit
Long-Term Debt - Credit Facility (Details) - USD ($) | May 31, 2018 | Jul. 26, 2017 | Oct. 27, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Line of Credit Facility [Line Items] | ||||||
Debt issuance costs | $ 5,000,000 | |||||
Accelerated amortization of debt issuance costs | $ 6,000,000 | 6,000,000 | $ 1,000,000 | $ 65,000,000 | $ 0 | |
A&R Credit Agreement | LIBOR | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate spread (as a percent) | 1.75% | 2.00% | ||||
Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Accelerated amortization of debt issuance costs | 16,000,000 | |||||
Outstanding principal redeemed | 1,100,000,000 | |||||
Make whole premium | $ 65,000,000 | |||||
Loans Payable | Term Loan A | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility maximum borrowing capacity | 670,000,000 | |||||
Debt issuance costs, one time pretax charges | $ 2,000,000 | |||||
Percentage bearing variable interest, percentage rate | 3.84% | |||||
Loans Payable | Term Loan B | ||||||
Line of Credit Facility [Line Items] | ||||||
Extinguishment of debt | 300,000,000 | |||||
Debt issuance costs, one time pretax charges | 1,000,000 | |||||
Percentage bearing variable interest, percentage rate | 4.09% | |||||
Revolving Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility maximum borrowing capacity | $ 500,000,000 | |||||
Letters of credit | $ 5,000,000 | |||||
Funds available for other borrowings | $ 795,000,000 | |||||
Revolving credit facility interest rate | 3.26% | |||||
Revolving Credit Agreement | A&R Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility maximum borrowing capacity | $ 800,000,000 |
Long-Term Debt - Receivables Fi
Long-Term Debt - Receivables Financing Facility (Details) | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |
Accounts receivable securitized | $ 459,000,000 |
Secured Debt | Receivables Financing Facility | |
Debt Instrument [Line Items] | |
Facility amount | 180,000,000 |
Total outstanding debt | $ 139,000,000 |
Receivable financing facility, average interest rate | 3.36% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Aug. 16, 2005officer | |
Operating Leased Assets [Line Items] | ||||
Rent expense | $ 33 | $ 34 | $ 39 | |
Number of former officers being sued | officer | 2 | |||
Pre-tax charge for litigation settlement | $ 13 | |||
Minimum | ||||
Operating Leased Assets [Line Items] | ||||
Lease terms | 1 year | |||
Maximum | ||||
Operating Leased Assets [Line Items] | ||||
Lease terms | 16 years |
Commitments and Contingencies -
Commitments and Contingencies -Schedule of Minimum Lease Payments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 34 |
2,020 | 29 |
2,021 | 23 |
2,022 | 17 |
2,023 | 13 |
Thereafter | 37 |
Total minimum lease obligations | $ 153 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Accrued Warranty Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | |||
Balance at the beginning of the year | $ 18 | $ 21 | $ 22 |
Acquisition | 1 | 0 | 0 |
Warranty expense | 34 | 28 | 31 |
Warranty payments | (31) | (31) | (32) |
Balance at the end of the year | $ 22 | $ 18 | $ 21 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Equity Awards Authorized and Available for Future Grant and Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018shares | |
2018 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant [Roll Forward] | |
Available for future grants, beginning (in shares) | 0 |
Newly authorized options (in shares) | 3,800,000 |
Equity awards granted (in shares) | (10,200) |
Cancellation and forfeitures (in shares) | 0 |
Plan termination (in shares) | 0 |
Available for future grants, ending (in shares) | 3,789,800 |
2015 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant [Roll Forward] | |
Available for future grants, beginning (in shares) | 1,437,435 |
Newly authorized options (in shares) | 0 |
Equity awards granted (in shares) | (360,999) |
Cancellation and forfeitures (in shares) | 0 |
Plan termination (in shares) | (1,076,436) |
Available for future grants, ending (in shares) | 0 |
Share-Based Compensation - Comp
Share-Based Compensation - Compensation Expense and Related Income Tax Benefit (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total compensation expense | $ 53 | $ 38 | $ 28 |
Income tax benefit | 10 | 11 | 9 |
Unearned compensation costs related to awards granted | $ 57 | ||
Unearned compensation cost, expected to be recognized over period (years) | 1 year 6 months | ||
Cost of sales | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total compensation expense | $ 4 | 3 | 2 |
Selling and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total compensation expense | 13 | 8 | 6 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total compensation expense | 15 | 11 | 9 |
General and administration | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total compensation expense | $ 21 | $ 16 | $ 11 |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of SAR's Outstanding (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for SARs (years) | 1 year 6 months | ||
SARs | |||
SARs, Shares Outstanding | |||
Shares, Outstanding at beginning of year | 1,817,991 | 1,740,786 | 1,397,611 |
Shares Granted | 88,042 | 402,029 | 627,971 |
Shares, Exercised | (598,249) | (250,326) | (160,946) |
Shares, Forfeited | (46,161) | (66,550) | (115,215) |
Shares, Expired | (438) | (7,948) | (8,635) |
Shares, Outstanding at end of year | 1,261,185 | 1,817,991 | 1,740,786 |
Shares, Exercisable at end of year | 595,086 | 874,942 | 828,754 |
Weighted- Average Exercise Price | |||
Outstanding at beginning of year (in USD per share) | $ 65.73 | $ 56.15 | $ 56.78 |
Granted (in USD per share) | 149.75 | 98.87 | 52.13 |
Exercised (in USD per share) | 55.93 | 48.66 | 35.37 |
Forfeited (in USD per share) | 80.41 | 75.38 | 65.74 |
Expired (in USD per share) | 108.20 | 108.20 | 88.65 |
Outstanding at end of year (in USD per share) | 75.71 | 65.73 | 56.15 |
Exercisable at end of year (in USD per share) | $ 60.85 | $ 50.86 | $ 45.14 |
SARs | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for SARs (years) | 4 years |
Share-Based Compensation - Weig
Share-Based Compensation - Weighted-Average Assumptions Used for Grants of Stock Options and SARs (Detail) - SARs - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Forfeiture rate | 8.40% | 9.37% | 9.01% |
Volatility | 35.93% | 35.49% | 43.14% |
Risk free interest rate | 2.96% | 1.77% | 1.29% |
Range of interest rates, minimum | 1.68% | 0.71% | 0.25% |
Range of interest rates, maximum | 3.00% | 2.41% | 1.75% |
Expected weighted-average life (in years) | 4 years 1 month 8 days | 4 years 1 month 17 days | 5 years 3 months 29 days |
Weighted-average grant date fair value of SARs granted (per underlying share) (in USD per share) | $ 47.63 | $ 29.86 | $ 20.18 |
Share-Based Compensation - Su_3
Share-Based Compensation - Summary of Outstanding and Exercisable Options and SARs (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of SARs outstanding | |||
Fair value of SARs vested | $ 12,000,000 | $ 8,000,000 | $ 3,000,000 |
SARs | |||
Summary of SARs outstanding | |||
Aggregate intrinsic value, Outstanding | 105,000,000 | ||
Aggregate intrinsic value, Exercisable | $ 59,000,000 | ||
Weighted-average remaining contractual term, Outstanding | 5 years 7 months 12 days | ||
Weighted-average remaining contractual term, Exercisable | 4 years 9 months 30 days | ||
Intrinsic value of SARs exercised | $ 59,000,000 | $ 14,000,000 | $ 6,000,000 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Awards and Performance Share Awards Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock | |||
Restricted Stock Awards and Performance Share Awards | |||
Outstanding at beginning of year (in shares) | 628,642 | 622,814 | 566,447 |
Granted (in shares) | 206,922 | 199,629 | 389,193 |
Released (in shares) | (154,878) | (165,846) | (275,229) |
Forfeited (in shares) | (22,962) | (27,955) | (57,597) |
Outstanding at end of year (in shares) | 657,724 | 628,642 | 622,814 |
Weighted-Average Grant Date Fair Value | |||
Outstanding at beginning of year (in USD per share) | $ 77.70 | $ 70.19 | $ 77.68 |
Granted (in USD per share) | 150.60 | 98.90 | 51.93 |
Released (in USD per share | 107.22 | 75.90 | 59.39 |
Forfeited (in USD per share) | 88.77 | 72.81 | 70.50 |
Outstanding at end of year (in USD per share) | $ 93.45 | $ 77.70 | $ 70.19 |
Performance Share Awards | |||
Restricted Stock Awards and Performance Share Awards | |||
Outstanding at beginning of year (in shares) | 265,747 | 379,226 | 332,630 |
Granted (in shares) | 59,849 | 79,423 | 172,024 |
Released (in shares) | (57,074) | (2,029) | (111,325) |
Forfeited (in shares) | (8,795) | (190,873) | (14,103) |
Outstanding at end of year (in shares) | 259,727 | 265,747 | 379,226 |
Weighted-Average Grant Date Fair Value | |||
Outstanding at beginning of year (in USD per share) | $ 77.04 | $ 70.14 | $ 73.40 |
Granted (in USD per share) | 146.83 | 98.97 | 51.01 |
Released (in USD per share | 107.31 | 62.70 | 46.58 |
Forfeited (in USD per share) | 81.07 | 73.09 | 75.73 |
Outstanding at end of year (in USD per share) | $ 86.41 | $ 77.04 | $ 70.14 |
Maximum | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Maximum | Performance Share Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Non-employee Directors | Restricted Stock | |||
Restricted Stock Awards and Performance Share Awards | |||
Granted (in shares) | 7,980 | 12,488 | 25,088 |
Share-Based Compensation - Othe
Share-Based Compensation - Other Award Types (Details) - Other Award Types - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based liabilities paid | $ 2 | $ 2 | $ 1 |
Number of shares that became available under the Plan | 20,393 | 45,781 | 95,210 |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (not more than) | 4 years |
Share-Based Compensation - Su_4
Share-Based Compensation - Summary of Non-qualified Option Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted- Average Exercise Price | |||
Income tax benefit | $ 10,000,000 | $ 11,000,000 | $ 9,000,000 |
Non-qualified Options | |||
Non-qualified Options | |||
Shares, Outstanding at beginning of year | 15,705 | 154,551 | 204,434 |
Shares Granted | 0 | 0 | 0 |
Shares, Exercised | (15,705) | (132,905) | (47,393) |
Shares, Forfeited | 0 | 0 | 0 |
Shares, Expired | 0 | (5,941) | (2,490) |
Shares, Outstanding at end of year | 0 | 15,705 | 154,551 |
Shares, Exercisable at end of period | 0 | 15,705 | 154,551 |
Weighted- Average Exercise Price | |||
Outstanding at beginning of year (in USD per share) | $ 26.34 | $ 35.96 | $ 36.66 |
Granted (in USD per share) | 0 | 0 | 0 |
Exercised (in USD per share) | 26.34 | 36.86 | 38.60 |
Forfeited (in USD per share) | 0 | 0 | 0 |
Expired (in USD per share) | 0 | 41.25 | 43.35 |
Outstanding at end of year (in USD per share) | 0 | 26.34 | 35.96 |
Exercisable at end of year (in USD per share) | $ 0 | $ 26.34 | $ 35.96 |
Options outstanding | $ 0 | ||
Intrinsic value for options exercised | $ 2,000,000 | $ 8,000,000 | $ 2,000,000 |
Options vested in period | 0 | 0 | 0 |
Cash received from the exercise of options | $ 1,000,000 | $ 5,000,000 | $ 2,000,000 |
Income tax benefit | $ 2,000,000 | $ 2,000,000 | $ 1,000,000 |
Share-Based Compensation - Empl
Share-Based Compensation - Employee Stock Purchase Plan (Details) - 2011 Employee Stock Purchase Plan - Employee Stock Option - Common Stock | 12 Months Ended |
Dec. 31, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares available for grant | 840,262 |
Date Of Purchase | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Purchase price equal to lesser of fair market value percentage | 95.00% |
Date Of Grant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares that became available under the Plan | 1,500,000 |
Income Taxes - Geographical Sou
Income Taxes - Geographical Sources of Income (Loss) Before Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (25) | $ (152) | $ (120) |
Outside United States | 549 | 240 | (9) |
Income (loss) before income taxes | $ 524 | $ 88 | $ (129) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ 20 | $ 10 | $ 14 |
State | 3 | 8 | 6 |
Foreign | 77 | 62 | 31 |
Total current | 100 | 80 | 51 |
Deferred: | |||
Federal | (11) | 20 | (31) |
State | 5 | (10) | (6) |
Foreign | 9 | (19) | (6) |
Total deferred | 3 | (9) | (43) |
(Benefit) provision for income taxes | $ 103 | $ 71 | $ 8 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | |||
Effective income tax rate | 19.70% | 80.70% | (6.20%) |
Federal statutory rate | 21.00% | 35.00% | 35.00% |
Operating loss carryforwards | $ 394 | ||
Tax credits | 28 | ||
Net operating loss carryforwards | $ 355 | ||
Tax Cuts And Jobs Act Of 2017, nondeductible impact to bonus compensation expense, percent | 21.00% | ||
Tax Cuts And Jobs Act Of 2017, incomplete accounting, provisional income tax expense | $ 72 | ||
Tax Cuts And Jobs Act Of 2017, incomplete accounting, transition tax for accumulated foreign earnings, provisional income tax expense (benefit) | $ (3) | 37 | |
Tax Cuts And Jobs Act Of 2017, incomplete accounting, change in tax rate, remeasurement of net deferred tax assets | $ 35 | ||
Deferred tax assets rate expected to reverse in the future (as percent) | 21.00% | ||
Deferred income taxes undistributed foreign earnings | 6 | ||
Tax Cuts And Jobs Act Of 2017, incomplete accounting, Provisional Income Tax Expense, GILTI, net of FDII | 10 | ||
Unrecognized tax benefits that would affect annual effective tax rate | 48 | $ 47 | |
Unrecognized tax benefits that may reverse | 20 | ||
Interest and or penalties related to Income tax matters | 8 | 2 | $ 1 |
Penalties and interest accrued | 14 | $ 6 | |
Expire Year 2019 thru 2032 | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards | 39 | ||
Expire Year 2023 thru 2032 | |||
Income Tax Contingency [Line Items] | |||
Tax credits | 14 | ||
No Expiration Period | |||
Income Tax Contingency [Line Items] | |||
Tax credits | $ 14 | ||
United Kingdom (HMRC) | |||
Income Tax Contingency [Line Items] | |||
Federal statutory rate | 19.00% | ||
Singapore (IRAS) | |||
Income Tax Contingency [Line Items] | |||
Federal statutory rate | 17.00% | ||
Luxembourg Inland Revenue | |||
Income Tax Contingency [Line Items] | |||
Federal statutory rate | 27.00% | ||
Singapore Economic Development Board | |||
Income Tax Contingency [Line Items] | |||
Effective income tax rate | 10.50% | ||
Federal statutory rate | 10.00% | ||
Short-term liability | |||
Income Tax Contingency [Line Items] | |||
Deferred income taxes undistributed foreign earnings | $ 1 | ||
Long-term liability | |||
Income Tax Contingency [Line Items] | |||
Deferred income taxes undistributed foreign earnings | $ 5 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of U. S. Federal Statutory Income Tax Rate to Actual Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Provision computed at statutory rate | 21.00% | 35.00% | 35.00% |
U.S. Tax Reform - one-time transition tax | (0.60%) | 41.80% | 0.00% |
Remeasurement of deferred taxes | 0.70% | (56.00%) | 0.00% |
Change in valuation allowance | (4.50%) | 96.40% | (1.00%) |
US impact of Enterprise acquisition and integration | 1.10% | 12.90% | (14.10%) |
Change in contingent income tax reserves | 3.20% | 14.00% | (1.60%) |
Foreign earnings subject to U.S. taxation | 2.00% | 2.00% | (6.60%) |
Foreign rate differential | (2.00%) | (29.10%) | (16.00%) |
Intra-entity transactions | 0.00% | (18.80%) | 0.00% |
State income tax, net of Federal tax benefit | 0.80% | (5.30%) | (1.00%) |
Tax credits | (1.90%) | (5.70%) | 9.50% |
Equity compensation deductions | (2.00%) | (5.60%) | (0.40%) |
Return to provision and other true ups | 1.10% | (3.20%) | (3.70%) |
Other | 0.80% | 2.30% | (6.30%) |
Provision for income taxes | 19.70% | 80.70% | (6.20%) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Capitalized research expenditures | $ 28 | $ 32 |
Deferred revenue | 21 | 21 |
Tax credits | 28 | 31 |
Net operating loss carryforwards | 394 | 338 |
Other accruals | 20 | 20 |
Inventory items | 20 | 20 |
Capitalized software costs | 8 | 14 |
Sales return/rebate reserve | 41 | 33 |
Share-based compensation expense | 15 | 12 |
Accrued bonus | 3 | 1 |
Unrealized gain and losses on securities and investments | 0 | 8 |
Valuation allowance | (56) | (134) |
Total deferred tax assets | 522 | 396 |
Deferred tax liabilities: | ||
Depreciation and amortization | 411 | 275 |
Unrealized gains and losses on securities and investments | 2 | 0 |
Undistributed earnings | 3 | 2 |
Total deferred tax liabilities | 416 | 277 |
Net deferred tax assets | $ 106 | $ 119 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits | ||
Balance at beginning of year | $ 51 | $ 42 |
Additions for tax positions related to the current year | 1 | 0 |
Additions for tax positions related to prior years | 22 | 11 |
Reductions for tax positions related to prior years | (11) | (1) |
Settlements for tax positions | (13) | (1) |
Balance at end of year | $ 50 | $ 51 |
Earnings (Loss) Per Share - Com
Earnings (Loss) Per Share - Computation (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic: | |||||||||||
Net income (loss) | $ 421 | $ 17 | $ (137) | ||||||||
Weighted-average shares outstanding | 53,591,655 | 53,021,761 | 51,579,112 | ||||||||
Basic earnings (loss) per share (in USD per share) | $ 2.14 | $ 2.37 | $ 1.31 | $ 2.04 | $ 0.07 | $ (0.23) | $ 0.33 | $ 0.16 | $ 7.86 | $ 0.33 | $ (2.65) |
Diluted: | |||||||||||
Net income (loss) | $ 421 | $ 17 | $ (137) | ||||||||
Weighted-average shares outstanding | 53,591,655 | 53,021,761 | 51,579,112 | ||||||||
Dilutive shares | 708,157 | 667,071 | 0 | ||||||||
Diluted weighted average shares outstanding (in shares) | 54,299,812 | 53,688,832 | 51,579,112 | ||||||||
Diluted earnings (loss) per share (in USD per share) | $ 2.11 | $ 2.34 | $ 1.29 | $ 2.01 | $ 0.07 | $ (0.23) | $ 0.32 | $ 0.16 | $ 7.76 | $ 0.32 | $ (2.65) |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Anti-dilutive shares | 72,856 | 259,142 | 1,391,567 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Components of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income [Roll Forward] | |||
Other comprehensive income (loss) before reclassifications | $ 33 | $ (23) | $ (4) |
Amounts reclassified from AOCI | (9) | 16 | 9 |
Tax benefit (expense) | (7) | 0 | (2) |
Other comprehensive income (loss) | 17 | (7) | 3 |
Unrealized gain (loss) on sales hedging | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning balance | (9) | 6 | (1) |
Other comprehensive income (loss) before reclassifications | 38 | (26) | 1 |
Amounts reclassified from AOCI | (13) | 8 | 7 |
Tax benefit (expense) | (4) | 3 | (1) |
Other comprehensive income (loss) | 21 | (15) | 7 |
Ending balance | 12 | (9) | 6 |
Unrealized (loss) gain on forward interest rate swaps | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning balance | (9) | (15) | (15) |
Other comprehensive income (loss) before reclassifications | 8 | 1 | (1) |
Amounts reclassified from AOCI | 4 | 8 | 2 |
Tax benefit (expense) | (3) | (3) | (1) |
Other comprehensive income (loss) | 9 | 6 | 0 |
Ending balance | 0 | (9) | (15) |
Foreign Currency translation adjustments | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning balance | (34) | (36) | (32) |
Other comprehensive income (loss) before reclassifications | (13) | 2 | (4) |
Amounts reclassified from AOCI | 0 | 0 | 0 |
Tax benefit (expense) | 0 | 0 | 0 |
Other comprehensive income (loss) | (13) | 2 | (4) |
Ending balance | (47) | (34) | (36) |
Total | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning balance | (52) | (45) | (48) |
Ending balance | $ (35) | $ (52) | $ (45) |
Accounts Receivable Factoring (
Accounts Receivable Factoring (Details) $ in Millions | Dec. 31, 2018USD ($) |
Transfers and Servicing [Abstract] | |
Eligible uncollected receivables available, maximum | $ 90 |
Uncollected receivables sold and removed from the balance sheet | $ 33 |
Segment Information and Geogr_3
Segment Information and Geographic Data - Additional Information (Detail) - segment | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Reportable segments | 2 | |
Customer A | Customer Concentration Risk | Accounts Receivable | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk percentage | 23.00% | 19.50% |
Customer B | Customer Concentration Risk | Accounts Receivable | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk percentage | 16.90% | 14.00% |
Customer C | Customer Concentration Risk | Accounts Receivable | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk percentage | 14.60% | 11.70% |
Segment Information and Geogr_4
Segment Information and Geographic Data - Financial Information by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Operating Expenses | $ 1,371 | $ 1,388 | $ 1,562 | ||||||||
Net sales | |||||||||||
Total Net sales | $ 1,137 | $ 1,092 | $ 1,012 | $ 977 | $ 1,026 | $ 935 | $ 896 | $ 865 | 4,218 | 3,722 | 3,574 |
Operating income: | |||||||||||
Total Operating income | 610 | 322 | 80 | ||||||||
Operating segments | |||||||||||
Net sales | |||||||||||
Total Net sales | 4,218 | 3,725 | 3,584 | ||||||||
Operating income: | |||||||||||
Total Operating income | 729 | 575 | 526 | ||||||||
Corporate, eliminations | |||||||||||
Net sales | |||||||||||
Total Net sales | 0 | (3) | (10) | ||||||||
Operating income: | |||||||||||
Total Operating income | (119) | (253) | (446) | ||||||||
AIT | |||||||||||
Net sales | |||||||||||
Total Net sales | 1,423 | ||||||||||
AIT | Operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Expenses | (14) | (41) | |||||||||
Net sales | |||||||||||
Total Net sales | 1,423 | 1,311 | 1,247 | ||||||||
Operating income: | |||||||||||
Total Operating income | 325 | 274 | 281 | ||||||||
EVM | |||||||||||
Net sales | |||||||||||
Total Net sales | 2,795 | ||||||||||
EVM | Operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Expenses | 14 | 41 | |||||||||
Net sales | |||||||||||
Total Net sales | 2,795 | 2,414 | 2,337 | ||||||||
Operating income: | |||||||||||
Total Operating income | $ 404 | $ 301 | $ 245 |
Segment Information and Geogr_5
Segment Information and Geographic Data - Information Regarding Operations by Geographic Area (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total Net sales | $ 1,137 | $ 1,092 | $ 1,012 | $ 977 | $ 1,026 | $ 935 | $ 896 | $ 865 | $ 4,218 | $ 3,722 | $ 3,574 |
Long-lived assets | 249 | 264 | 249 | 264 | 292 | ||||||
North America | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total Net sales | 2,041 | 1,798 | 1,739 | ||||||||
Long-lived assets | 225 | 238 | 225 | 238 | 267 | ||||||
Europe, Middle East & Africa | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total Net sales | 1,409 | 1,221 | 1,138 | ||||||||
Long-lived assets | 14 | 14 | 14 | 14 | 13 | ||||||
Asia | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total Net sales | 520 | 468 | 483 | ||||||||
Long-lived assets | 7 | 9 | 7 | 9 | 9 | ||||||
Latin America | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total Net sales | 248 | 235 | 214 | ||||||||
Long-lived assets | $ 3 | $ 3 | $ 3 | $ 3 | $ 3 |
Segment Information and Geogr_6
Segment Information and Geographic Data - Net Sales by Country (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue, Major Customer [Line Items] | |||||||||||
Total Net sales | $ 1,137 | $ 1,092 | $ 1,012 | $ 977 | $ 1,026 | $ 935 | $ 896 | $ 865 | $ 4,218 | $ 3,722 | $ 3,574 |
United States | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total Net sales | 2,247 | 1,984 | 1,950 | ||||||||
United Kingdom | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total Net sales | 1,403 | 1,196 | 1,065 | ||||||||
Singapore | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total Net sales | 508 | 454 | 362 | ||||||||
Other | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total Net sales | $ 60 | $ 88 | $ 197 |
Segment Information and Geogr_7
Segment Information and Geographic Data - Net Sales to Significant Customers as a Percent of Total Net Sales (Detail) - Sales Revenue, Net - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Customer A | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 20.30% | 21.30% | 20.10% |
Customer A | AIT | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 6.20% | 6.30% | 5.90% |
Customer A | EVM | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 14.10% | 15.00% | 14.20% |
Customer B | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 15.70% | 14.20% | 13.20% |
Customer B | AIT | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 5.60% | 5.30% | 5.00% |
Customer B | EVM | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 10.10% | 8.90% | 8.20% |
Customer C | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 14.10% | 13.20% | 12.40% |
Customer C | AIT | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 6.20% | 6.20% | 5.30% |
Customer C | EVM | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 7.90% | 7.00% | 7.10% |
Supplementary Financial Infor_3
Supplementary Financial Information Supplemental Financial Information (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Quarterly Financial Information Disclosure [Abstract] | |||
Foreign Exchange Contracts | $ 16 | $ 0 | |
Other | 38 | 24 | |
Prepaid expenses and other current assets | 54 | $ 31 | 24 |
Accrued incentive compensation | 127 | 101 | |
Customer reserves | 45 | 41 | |
Accrued payroll | 55 | 50 | |
Interest payable | 5 | 15 | |
Accrued other expenses | 90 | 89 | |
Accrued liabilities | $ 322 | $ 296 |
Supplementary Financial Infor_4
Supplementary Financial Information - Summary of Quarterly Results of Operations (unaudited) (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total Net sales | $ 1,137 | $ 1,092 | $ 1,012 | $ 977 | $ 1,026 | $ 935 | $ 896 | $ 865 | $ 4,218 | $ 3,722 | $ 3,574 |
Gross profit | 539 | 505 | 472 | 465 | 469 | 429 | 411 | 401 | 1,981 | 1,710 | $ 1,642 |
Net (loss) income | $ 115 | $ 127 | $ 70 | $ 109 | $ 4 | $ (12) | $ 17 | $ 8 | $ 421 | $ 17 | |
Net earnings per common share: | |||||||||||
Basic earnings (loss) per share (in USD per share) | $ 2.14 | $ 2.37 | $ 1.31 | $ 2.04 | $ 0.07 | $ (0.23) | $ 0.33 | $ 0.16 | $ 7.86 | $ 0.33 | $ (2.65) |
Diluted earnings (loss) per share (in USD per share) | $ 2.11 | $ 2.34 | $ 1.29 | $ 2.01 | $ 0.07 | $ (0.23) | $ 0.32 | $ 0.16 | $ 7.76 | $ 0.32 | $ (2.65) |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation account for accounts receivable: | |||
Valuation Account | |||
Balance at Beginning of Period | $ 3 | $ 3 | $ 6 |
Charged to Costs and Expenses | 1 | 1 | 0 |
Deductions | 1 | 1 | 3 |
Balance at End of Period | 3 | 3 | 3 |
Valuation account for deferred tax assets: | |||
Valuation Account | |||
Balance at Beginning of Period | 134 | 47 | 48 |
Charged to Costs and Expenses | 0 | 91 | 18 |
Deductions | 78 | 4 | 19 |
Balance at End of Period | $ 56 | $ 134 | $ 47 |