Cover
Cover - shares | 3 Months Ended | |
Apr. 03, 2021 | Apr. 27, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 3, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-19406 | |
Entity Registrant Name | Zebra Technologies Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-2675536 | |
Entity Address, Address Line One | 3 Overlook Point | |
Entity Address, City or Town | Lincolnshire | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60069 | |
City Area Code | 847 | |
Local Phone Number | 634-6700 | |
Title of 12(b) Security | Class A Common Stock, par value $.01 per share | |
Trading Symbol | ZBRA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 53,511,255 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000877212 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Apr. 03, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 177 | $ 168 |
Accounts receivable, net of allowances for doubtful accounts of $1 million as of April 3, 2021 and December 31, 2020 | 521 | 508 |
Inventories, net | 528 | 511 |
Income tax receivable | 7 | 16 |
Prepaid expenses and other current assets | 110 | 70 |
Total Current assets | 1,343 | 1,273 |
Property, plant and equipment, net | 269 | 274 |
Right-of-use lease assets | 129 | 135 |
Goodwill | 2,989 | 2,988 |
Other intangibles, net | 376 | 402 |
Deferred income taxes | 133 | 139 |
Other long-term assets | 172 | 164 |
Total Assets | 5,411 | 5,375 |
Current liabilities: | ||
Current portion of long-term debt | 134 | 364 |
Accounts payable | 573 | 601 |
Accrued liabilities | 457 | 559 |
Deferred revenue | 344 | 308 |
Income taxes payable | 38 | 19 |
Total Current liabilities | 1,546 | 1,851 |
Long-term debt | 956 | 881 |
Long-term lease liabilities | 122 | 129 |
Long-term deferred revenue | 287 | 273 |
Other long-term liabilities | 89 | 97 |
Total Liabilities | 3,000 | 3,231 |
Stockholders’ Equity: | ||
Preferred stock, $.01 par value; authorized 10,000,000 shares; none issued | 0 | 0 |
Class A common stock, $.01 par value; authorized 150,000,000 shares; issued 72,151,857 shares | 1 | 1 |
Additional paid-in capital | 405 | 395 |
Treasury stock at cost, 18,641,691 and 18,689,775 shares as of April 3, 2021 and December 31, 2020, respectively | (919) | (919) |
Retained earnings | 2,964 | 2,736 |
Accumulated other comprehensive loss | (40) | (69) |
Total Stockholders’ Equity | 2,411 | 2,144 |
Total Liabilities and Stockholders’ Equity | $ 5,411 | $ 5,375 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Apr. 03, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1 | $ 1 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 72,151,857 | 72,151,857 |
Treasury stock, shares (in shares) | 18,641,691 | 18,689,775 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Net sales: | ||
Total Net sales | $ 1,347 | $ 1,052 |
Cost of sales: | ||
Total Cost of sales | 692 | 579 |
Gross profit | 655 | 473 |
Operating expenses: | ||
Selling and marketing | 134 | 122 |
Research and development | 140 | 105 |
General and administrative | 82 | 74 |
Amortization of intangible assets | 26 | 16 |
Acquisition and integration costs | 1 | 1 |
Exit and restructuring costs | 0 | 4 |
Total Operating expenses | 383 | 322 |
Operating income | 272 | 151 |
Other income (expense): | ||
Foreign exchange gain (loss) | 2 | (3) |
Interest income (expense), net | 2 | (45) |
Total Other income (expense), net | 4 | (48) |
Income before income tax | 276 | 103 |
Income tax expense | 48 | 14 |
Net income | $ 228 | $ 89 |
Basic earnings per share (USD per share) | $ 4.26 | $ 1.66 |
Diluted earnings per share (USD per share) | $ 4.22 | $ 1.65 |
Tangible products | ||
Net sales: | ||
Total Net sales | $ 1,153 | $ 901 |
Cost of sales: | ||
Total Cost of sales | 591 | 486 |
Services and software | ||
Net sales: | ||
Total Net sales | 194 | 151 |
Cost of sales: | ||
Total Cost of sales | $ 101 | $ 93 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 228 | $ 89 |
Other comprehensive income (loss), net of tax: | ||
Changes in unrealized gains and losses on anticipated sales hedging transactions | 32 | 2 |
Foreign currency translation adjustment | (3) | (9) |
Comprehensive income | $ 257 | $ 82 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Class A Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2019 | 54,002,932 | |||||
Beginning balance at Dec. 31, 2019 | $ 1,839 | $ 1 | $ 339 | $ (689) | $ 2,232 | $ (44) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuances of treasury shares related to share based-compensation plans, net of forfeitures (in shares) | 15,792 | |||||
Shares withheld to fund withholding tax obligations related to share-based compensation plans (in shares) | (4,361) | |||||
Shares withheld to fund withholding tax obligations related to share-based compensation plans | (1) | (1) | ||||
Share-based compensation | 7 | 7 | ||||
Repurchase of common stock (in shares) | (948,740) | |||||
Repurchases of common stock | (200) | (200) | ||||
Net income | 89 | 89 | ||||
Changes in unrealized gains and losses on anticipated sales hedging transactions (net of income taxes) | 2 | 2 | ||||
Foreign currency translation adjustment | (9) | (9) | ||||
Ending balance (in shares) at Mar. 28, 2020 | 53,065,623 | |||||
Ending balance at Mar. 28, 2020 | 1,727 | $ 1 | 346 | (890) | 2,321 | (51) |
Beginning balance (in shares) at Dec. 31, 2020 | 53,462,082 | |||||
Beginning balance at Dec. 31, 2020 | 2,144 | $ 1 | 395 | (919) | 2,736 | (69) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuances of treasury shares related to share based-compensation plans, net of forfeitures (in shares) | 48,584 | |||||
Issuances of treasury shares related to share-based compensation plans, net of forfeitures | (6) | (6) | ||||
Shares withheld to fund withholding tax obligations related to share-based compensation plans (in shares) | (400) | |||||
Share-based compensation | 16 | 16 | ||||
Repurchase of common stock (in shares) | (100) | |||||
Net income | 228 | 228 | ||||
Changes in unrealized gains and losses on anticipated sales hedging transactions (net of income taxes) | 32 | 32 | ||||
Foreign currency translation adjustment | (3) | (3) | ||||
Ending balance (in shares) at Apr. 03, 2021 | 53,510,166 | |||||
Ending balance at Apr. 03, 2021 | $ 2,411 | $ 1 | $ 405 | $ (919) | $ 2,964 | $ (40) |
CONSOLDATED STATEMENTS OF CASH
CONSOLDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 228 | $ 89 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 44 | 34 |
Share-based compensation | 16 | 7 |
Deferred income taxes | (2) | (2) |
Unrealized (gain) loss on forward interest rate swaps | (12) | 34 |
Other, net | (1) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (15) | 108 |
Inventories, net | (17) | 33 |
Other assets | (18) | (4) |
Accounts payable | (30) | (109) |
Accrued liabilities | (47) | (87) |
Deferred revenue | 50 | 19 |
Income taxes | 28 | (16) |
Other operating activities | 0 | 2 |
Net cash provided by operating activities | 224 | 108 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (10) | (13) |
Purchases of long-term investments | (13) | (2) |
Net cash used in investing activities | (23) | (15) |
Cash flows from financing activities: | ||
Payments of long-term debt | (156) | (36) |
Proceeds from issuance of long-term debt | 0 | 157 |
Payments for repurchases of common stock | 0 | (200) |
Net payments related to share-based compensation plans | (6) | (1) |
Change in unremitted cash collections from servicing factored receivables | (19) | (22) |
Other financing activities | 0 | 4 |
Net cash used in financing activities | (181) | (98) |
Effect of exchange rate changes on cash and cash equivalents, including restricted cash | (2) | (1) |
Net increase (decrease) in cash and cash equivalents, including restricted cash | 18 | (6) |
Cash and cash equivalents, including restricted cash, at beginning of period | 192 | 30 |
Cash and cash equivalents, including restricted cash, at end of period | 210 | 24 |
Less restricted cash, included in Prepaid expenses and other current assets | (33) | 0 |
Cash and cash equivalents | 177 | 24 |
Supplemental disclosures of cash flow information: | ||
Income taxes paid | 22 | 30 |
Interest paid | $ 9 | $ 9 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Apr. 03, 2021 | |
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 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 and solutions, including cloud-based subscriptions, that capture and move data. We also provide a full range of services, including maintenance, technical support, repair, and managed and professional services. End-users of our products, solutions and services include those in retail and e-commerce, manufacturing, transportation and logistics, healthcare, public sector, and other industries around the world. We provide our products, solutions and services globally through a direct sales force and an extensive network of channel partners. Management prepared these unaudited interim consolidated financial statements according to the rules and regulations of the Securities and Exchange Commission for interim financial information and notes. As permitted under Article 10 of Regulation S-X and the instructions of Form 10-Q, these consolidated financial statements do not include all the information and notes required by United States Generally Accepted Accounting Principles (“GAAP”) for complete financial statements, although management believes that the disclosures made are adequate to make the information not misleading. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020. In the opinion of the Company, these interim financial statements include all adjustments (of a normal, recurring nature) necessary to fairly present its Consolidated Balance Sheet as of April 3, 2021, and the Consolidated Statements of Operations, Comprehensive Income, Stockholders’ Equity, and Cash Flows for the three months ended April 3, 2021 and March 28, 2020. These results, however, are not necessarily indicative of the results expected for the full fiscal year ending December 31, 2021. Effective January 1, 2021, we moved our retail solutions offering from our Asset Intelligence & Tracking (“AIT”) segment into our Enterprise Visibility & Mobility (“EVM”) segment contemporaneous with a change in our organizational structure and management of the business. Prior period results have been reclassified to conform to the current period’s presentation. This change does not have an impact to the Consolidated Financial Statements. See Note 15, Segment Information & Geographic Data for additional information related to each segment’s results. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Apr. 03, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). Subject to meeting certain criteria, ASU 2020-04 provides optional expedients and exceptions to applying contract modification accounting under existing generally accepted accounting principles for contracts that are modified to address the expected phase out of the London Inter-bank Offered Rate (“LIBOR”). Some of the Company’s contracts with respect to its borrowings and interest rate swap contracts already contain comparable alternative reference rates that would automatically take effect upon the phasing out of LIBOR, while for others, the Company anticipates negotiating comparable replacement rates with its counterparties. At this stage of its contract assessment, the Company does not expect ASU 2020-04 to have a material impact on its financial results. |
Revenues
Revenues | 3 Months Ended |
Apr. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues The Company recognizes revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which it expects to receive for providing those goods or services. Revenues for products are generally recognized upon shipment, whereas revenues for services and solutions offerings are generally recognized by using an output or time-based method, assuming all other criteria for revenue recognition have been met. Revenues for software are recognized either upon delivery or using a time-based method, depending upon how control is transferred to the customer. In cases where a bundle of products, services, and/or software are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control. Disaggregation of Revenue The following table presents our Net sales disaggregated by product category for each of our segments, AIT and EVM, for the three months ended April 3, 2021 and March 28, 2020 (in millions): Three Months Ended April 3, 2021 March 28, 2020 Segment Tangible Products Services and Software Total Tangible Products Services and Software Total AIT $ 410 $ 26 $ 436 $ 333 $ 22 $ 355 EVM 743 171 914 568 129 697 Corporate, eliminations (1) — (3) (3) — — — Total $ 1,153 $ 194 $ 1,347 $ 901 $ 151 $ 1,052 (1) Amounts included in Corporate, eliminations consist of purchase accounting adjustments. In addition, refer to Note 15, Segment Information & Geographic Data for Net sales to customers by geographic region. Performance Obligations The Company’s remaining performance obligations primarily relate to repair and support services, as well as solutions offerings. The aggregated transaction price allocated to remaining performance obligations for arrangements with an original term exceeding one year was $1,019 million and $974 million, inclusive of deferred revenue, as of April 3, 2021 and December 31, 2020, respectively. On average, remaining performance obligations as of April 3, 2021 and December 31, 2020 are expected to be recognized over a period of approximately two years. Contract Balances Progress on satisfying performance obligations under contracts with customers is reflected on the Consolidated Balance Sheets in Accounts receivable, net for billed revenues. Progress on satisfying performance obligations under contracts with customers related to unbilled revenues (“contract assets”) is reflected on the Consolidated Balance Sheets as Prepaid expenses and other current assets for revenues expected to be billed within the next twelve months, and Other long-term assets for revenues expected to be billed thereafter. The total contract asset balances were $10 million each as of April 3, 2021 and December 31, 2020. These contract assets result from timing differences between the billing and delivery schedules of products, services and software, as well as the impact from the allocation of the transaction price among performance obligations for contracts that include multiple performance obligations. Contract assets are evaluated for impairment and no impairment losses have been recognized during the three months ended April 3, 2021 and March 28, 2020. Deferred revenue on the Consolidated Balance Sheets consists of payments and billings in advance of our performance. The combined short-term and long-term deferred revenue balances were $631 million and $581 million as of April 3, 2021 and December 31, 2020, respectively. During the three months ended April 3, 2021, the Company recognized $110 million in revenue, which was previously included in the beginning balance of deferred revenue as of December 31, 2020. During the three months ended March 28, 2020, the Company recognized $73 million in revenue, which was previously included in the beginning balance of deferred revenue as of December 31, 2019. |
Inventories
Inventories | 3 Months Ended |
Apr. 03, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of Inventories, net are as follows (in millions): April 3, December 31, Raw materials $ 117 $ 117 Work in process 3 4 Finished goods 408 390 Total Inventories, net $ 528 $ 511 |
Investments
Investments | 3 Months Ended |
Apr. 03, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The carrying value of the Company’s investments was $91 million and $77 million as of April 3, 2021 and December 31, 2020, respectively, which are included in Other long-term assets on the Consolidated Balance Sheets. During the first quarter of 2021, the Company paid $13 million for the purchases of two new long-term investments.During the first quarter of 2021, the Company recognized a net gain of approximately $1 million related to one of its investments. |
Exit and Restructuring Costs
Exit and Restructuring Costs | 3 Months Ended |
Apr. 03, 2021 | |
Restructuring and Related Activities [Abstract] | |
Exit and Restructuring Costs | Exit and Restructuring Costs In the fourth quarter of 2019, the Company committed to certain organizational changes designed to generate operational efficiencies (collectively referred to as the “2019 Productivity Plan”). The organizational design changes under the 2019 Productivity Plan principally occurred within the North America and Europe, Middle East, and Africa (“EMEA”) regions. The 2019 Productivity Plan was completed in the fourth quarter of 2020. Exit and restructuring charges, primarily related to employee severance and benefits, for the 2019 Productivity Plan were $4 million during the three months ended March 28, 2020. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 03, 2021 | |
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 Accounting Standards Codification (“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 and money market funds). • Level 2: Observable prices that are based on inputs not quoted in 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 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 April 3, 2021, are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Foreign exchange contracts (1) $ 4 $ 6 $ — $ 10 Money market investments related to deferred compensation plan 33 — — 33 Total Assets at fair value $ 37 $ 6 $ — $ 43 Liabilities: Forward interest rate swap contracts (2) $ — $ 34 $ — $ 34 Liabilities related to the deferred compensation plan 33 — — 33 Total Liabilities at fair value $ 33 $ 34 $ — $ 67 The Company’s financial assets and liabilities carried at fair value as of December 31, 2020, are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Money market investments related to deferred compensation plan $ 30 $ — $ — $ 30 Total Assets at fair value $ 30 $ — $ — $ 30 Liabilities: Foreign exchange contracts (1) $ 3 $ 34 $ — $ 37 Forward interest rate swap contracts (2) — 46 — 46 Liabilities related to the deferred compensation plan 30 — — 30 Total Liabilities at fair value $ 33 $ 80 $ — $ 113 (1) The fair value of the foreign exchange contracts is calculated as follows: • Fair value of regular forward contracts associated with forecasted sales hedges is calculated using the period-end exchange rate adjusted for current forward points. • Fair value of hedges against net assets is calculated at the period-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). |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Apr. 03, 2021 | |
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 Topic 815, Derivatives and Hedging (“ASC 815”). 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) Fair Values as of Balance Sheet Classification April 3, December 31, Derivative instruments designated as hedges: Foreign exchange contracts Prepaid expenses and other current assets $ 6 $ — Foreign exchange contracts Accrued liabilities — (34) Total derivative instruments designated as hedges $ 6 $ (34) Derivative instruments not designated as hedges: Foreign exchange contracts Prepaid expenses and other current assets $ 4 $ — Foreign exchange contracts Accrued liabilities — (3) Forward interest rate swaps Accrued liabilities (17) (17) Forward interest rate swaps Other long-term liabilities (17) (29) Total derivative instruments not designated as hedges $ (30) $ (49) Total net derivative liability $ (24) $ (83) The following table presents the net gains (losses) from changes in fair values of derivatives that are not designated as hedges (in millions): Gains (Losses) Recognized in Income Three Months Ended Statements of Operations Classification April 3, March 28, Derivative instruments not designated as hedges: Foreign exchange contracts Foreign exchange gain (loss) $ 6 $ (1) Forward interest rate swaps Interest income (expense), net 8 (35) Total gains (losses) recognized in income $ 14 $ (36) Activities related to derivative instruments are reflected within Net cash provided by operating activities on the Consolidated 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 concentrations of credit risk. 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 present the assets and liabilities of our derivative financial instruments, for which we have net settlement agreements in place, 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 $5 million as of April 3, 2021 and would have been unchanged as of December 31, 2020. Foreign Currency Exchange Risk Management The Company conducts business on a multinational basis in a variety of foreign currencies. Exposure to market risk for changes in foreign currency exchange rates arises primarily from Euro-denominated external revenues, cross-border financing activities between subsidiaries, and foreign currency denominated monetary assets and liabilities. The Company manages its objective of preserving the economic value of non-functional currency denominated cash flows by initially hedging transaction exposures with natural offsets to the fullest extent possible and, once these opportunities have been exhausted, through foreign exchange forward and option contracts, as deemed appropriate. The Company manages the exchange rate risk of anticipated Euro-denominated sales 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 Accumulated other comprehensive income (loss) (“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 Statements of Operations. Realized amounts reclassified to Net sales were $12 million of losses and $8 million of gains for the three months ended April 3, 2021 and March 28, 2020, respectively. As of April 3, 2021 and December 31, 2020, the notional amounts of the Company’s foreign exchange cash flow hedges were €565 million and €585 million, respectively. The Company has reviewed its cash flow hedges for effectiveness and determined that they are highly effective. The Company uses forward contracts, which are not designated as hedging instruments, to manage its exposures related to net assets denominated in foreign currencies. These forward contracts typically mature within one month after execution. Monetary gains and losses on these forward contracts are recorded in income and are generally offset by the transaction gains and losses related to their net asset positions. The notional values and the net fair value of these outstanding contracts are as follows (in millions): April 3, December 31, Notional balance of outstanding contracts: British Pound/U.S. Dollar £ 28 £ 10 Euro/U.S. Dollar € 157 € 123 Canadian Dollar/U.S. Dollar C$ 4 C$ — Japanese Yen/U.S. Dollar ¥ 173 ¥ 354 Singapore Dollar/U.S. Dollar S$ 17 S$ 12 Mexican Peso/U.S. Dollar Mex$ 62 Mex$ 36 Polish Zloty/U.S. Dollar zł 48 zł — Net fair value of assets (liabilities) of outstanding contracts $ 4 $ (3) Interest Rate Risk Management The Company’s debt consists of borrowings under a term loan (“Term Loan A”), Revolving Credit Facility, and Receivables Financing Facilities, which bear interest at variable rates plus applicable margins. As a result, the Company is exposed to market risk associated with the variable interest rate payments on these borrowings. See Note 9, Long-Term Debt for further details about these borrowings. 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. In December 2017, the Company entered into a long-term forward interest rate swap agreement with a notional amount of $800 million to lock into a fixed LIBOR interest rate base for its debt facilities subject to monthly interest payments. Under the terms of the agreement, $800 million in variable-rate debt will be swapped for a fixed interest rate with net settlement terms starting in December 2018 and ending in December 2022. During the third quarter of 2019, the Company entered into additional long-term forward interest rate swap agreements with a total notional amount of $800 million, containing net settlement terms, which start in December 2022 and end in August 2024. The additional interest rate swap agreements effectively extend the risk management initiative of the Company to coincide with the maturities of Term Loan A and the Revolving Credit Facility. These interest rate swaps are not designated as hedges and changes in fair value are recognized immediately as Interest expense, net on the Consolidated Statements of Operations. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Apr. 03, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The following table shows the carrying value of the Company’s debt (in millions): April 3, December 31, Term Loan A $ 888 $ 917 2020 Term Loan — 100 Receivables Financing Facilities 208 235 Total debt $ 1,096 $ 1,252 Less: Debt issuance costs (4) (5) Less: Unamortized discounts (2) (2) Less: Current portion of debt (134) (364) Total long-term debt $ 956 $ 881 As of April 3, 2021, the future maturities of debt, excluding debt discounts and issuance costs, are as follows (in millions): 2021 $ 122 2022 56 2023 81 2024 837 Total future debt maturities $ 1,096 All borrowings as of April 3, 2021 were denominated in U.S. Dollars. The estimated fair value of the Company’s debt approximated $1.1 billion and $1.3 billion as of April 3, 2021 and December 31, 2020, 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 do not represent the settlement value of these liabilities to the Company. The fair value of the debt will continue to vary each period based on a number of factors, including fluctuations in market interest rates as well as changes to the Company’s credit ratings. Term Loan A The principal on Term Loan A is due in quarterly installments, with the next quarterly installment due in March 2022 and the majority due upon the August 9, 2024 maturity date. The Company may make prepayments, in whole or in part, without premium or penalty, and would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions. As of April 3, 2021, the Term Loan A interest rate was 1.37%. Interest payments are made monthly and are subject to variable rates plus an applicable margin. 2020 Term Loan In September 2020, the Company entered into a new $200 million term loan (“2020 Term Loan”), with the proceeds used to partly fund the acquisition of Reflexis Systems, Inc. The Company repaid $100 million of principal in the fourth quarter of 2020 and repaid the remaining $100 million of principal in the first quarter of 2021. Receivables Financing Facilities The Company has two Receivables Financing Facilities with financial institutions that have a combined total borrowing limit of up to $280 million. As collateral, the Company pledges perfected first-priority security interests in its U.S. domestically originated accounts receivable. The Company has accounted for transactions under its Receivables Financing Facilities as secured borrowings. The Company’s first Receivables Financing Facility, which was originally entered into in December 2017 and most recently amended in March 2021, allows for borrowings of up to $180 million and will mature on March 19, 2024. The most recent amendment to the first Receivables Financing Facility extended the maturity through March 19, 2024 but otherwise did not significantly change the facility. The Company’s second Receivable Financing Facility, which was originally entered into in May 2019 and amended in May 2020, allows for borrowings of up to $100 million and will mature on May 17, 2021. As of April 3, 2021, the Company’s Consolidated Balance Sheets included $498 million of receivables that were pledged under the two Receivables Financing Facilities. As of April 3, 2021, $208 million had been borrowed, of which $122 million was classified as current. Borrowings under the Receivables Financing Facilities bear interest at a variable rate plus an applicable margin. As of April 3, 2021, the Receivables Financing Facilities had an average interest rate of 1.04%. Interest is paid on these borrowings on a monthly basis. Revolving Credit Facility The Company has a Revolving Credit Facility that is available for working capital and other general business purposes, including letters of credit. As of April 3, 2021, the Company had letters of credit totaling $5 million, which reduced funds available for borrowings under the Revolving Credit Facility from $1 billion to $995 million. No borrowings were outstanding under the Revolving Credit Facility as of April 3, 2021. Upon borrowing, interest payments are made monthly and are subject to variable rates plus an applicable margin. The Revolving Credit Facility matures on August 9, 2024. Uncommitted Short-Term Credit Facility The Company also entered into an uncommitted short-term credit facility (“Uncommitted Facility”) in August 2020. The Uncommitted Facility matures on August 26, 2021 and allows for borrowings of up to $20 million. Each borrowing must be repaid within 90 days, or earlier if the facility matures beforehand, and bears interest at a variable rate plus an applicable margin. Along with the Company’s Revolving Credit Facility, the Uncommitted Facility is available for working capital and other general business purposes. As of April 3, 2021, the Company had no outstanding borrowings under the Uncommitted Facility. Each of the Company’s borrowing arrangements described above include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. The Company uses interest rate swaps to manage the interest rate risk associated with its debt. See Note 8 , Derivative Instruments for further information. As of April 3, 2021, the Company was in compliance with all debt covenants. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 03, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Warranties The following table is a summary of the Company’s accrued warranty obligations, which are included in Accrued liabilities on the Consolidated Balance Sheets (in millions): Three Months Ended April 3, March 28, Balance at the beginning of the period $ 24 $ 21 Warranty expense 8 8 Warranties fulfilled (8) (7) Balance at the end of the period $ 24 $ 22 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 their potential effects may change in the future. In 2020, the Company received approval of its exclusion request of customs duties that had been paid on certain products under Section 301 of the U.S. Trade Act of 1974 from September 1, 2019 through September 1, 2020 and commenced a process to request recovery of previously assessed amounts. Recoveries are recognized when the Company has completed all regulatory filing requirements and determined that receipt of amounts is virtually certain. Recoveries totaling $12 million were recorded in the fourth quarter of 2020, of which $4 million related to our AIT segment and $8 million related to our EVM segment. In the first quarter of 2021, the Company recorded additional recoveries of $3 million. The recoveries in the first quarter of 2021 attributable to the AIT and EVM segments were $1 million and $2 million, respectively. Both the initially incurred costs and related recoveries were included within Cost of sales for Tangible products on the Consolidated Statements of Operations. The Company believes that additional import duties that were previously paid are potentially recoverable; however, the final amounts and the timings of any such additional recoveries remain uncertain and, therefore, the Company has not recorded any amounts related to potential future recoveries in its financial statements as of April 3, 2021. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 03, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate for the three months ended April 3, 2021 and March 28, 2020 was 17.4% and 13.6%, respectively. The variance from the 21% federal statutory rate in each period was attributable to the benefits of share-based compensation deductions, lower tax rates on foreign earnings and U.S. tax credits. The Company is continually monitoring the provisions of the American Rescue Plan Act, signed into law on March 11, 2021; the Consolidated Appropriations Act of 2021, signed into law on December 27, 2020; and the Coronavirus Aid, Relief and Economic Security Act, signed into law on March 27, 2020. The provisions of these laws did not have a significant impact to our effective tax rate in either the current or prior year. Management continues to monitor guidance regarding these laws and developments related to other coronavirus tax relief throughout the world for potential impacts. The Company earns a significant amount of its operating income outside of the U.S. that is taxed at rates different than the U.S. federal statutory rate. The Company’s principal foreign jurisdictions that provide sources of operating income are the United Kingdom and Singapore. The Company has received an incentivized tax rate by the Singapore Economic Development Board, which reduces the income tax rate in that jurisdiction effective for calendar years 2019 to 2023. The Company has committed to making additional investments in Singapore over the period 2019 to 2022. However, 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. The Company is not permanently reinvested with respect to its U.S. directly-owned foreign subsidiaries. The Company is subject to U.S. income tax on substantially all foreign earnings under the Global Intangible Low-Taxed Income provisions of the Tax Cuts and Jobs Act (the “Act”), while any remaining foreign earnings are eligible for a dividends received deduction under the Act. As a result, future repatriation of earnings will no longer be subject to U.S. income tax but may be subject to currency translation gains or losses. Where required, the Company has recorded a deferred tax liability for foreign withholding taxes on current earnings. Additionally, gains and losses on any future taxable dispositions of U.S.-owned foreign affiliates continue to be subject to U.S. income tax. Management evaluates all jurisdictions based on historical pre-tax earnings and taxable income to determine the need for valuation allowances on a quarterly basis. Based on this analysis, a valuation allowance has been recorded for any jurisdictions where, in the Company’s judgment, tax benefits are not expected to be realized. There was no change to our valuation allowance for the three months ended April 3, 2021. Uncertain Tax Positions The Company is currently undergoing U.S. federal income tax audits for tax years 2017 and 2018. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Apr. 03, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings 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 per share (in millions, except share data): Three Months Ended April 3, March 28, Basic: Net income $ 228 $ 89 Weighted-average shares outstanding 53,484,265 53,760,873 Basic earnings per share $ 4.26 $ 1.66 Diluted: Net income $ 228 $ 89 Weighted-average shares outstanding 53,484,265 53,760,873 Dilutive shares 480,065 557,171 Diluted weighted-average shares outstanding 53,964,330 54,318,044 Diluted earnings per share $ 4.22 $ 1.65 Anti-dilutive options to purchase common shares are excluded from diluted earnings per share calculations. There were 570 and 68,554 shares that were anti-dilutive for the three months ended April 3, 2021 and March 28, 2020, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Apr. 03, 2021 | |
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 8, 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 U.S. 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 the three months ended April 3, 2021 and March 28, 2020 are as follows (in millions): Unrealized gain (loss) on sales hedging Foreign currency translation adjustments Total Balance at December 31, 2019 $ 2 $ (46) $ (44) Other comprehensive income (loss) before reclassifications 11 (9) 2 Amounts reclassified from AOCI (1) (8) — (8) Tax effect (1) — (1) Other comprehensive income (loss), net of tax 2 (9) (7) Balance at March 28, 2020 $ 4 $ (55) $ (51) Balance at December 31, 2020 $ (28) $ (41) $ (69) Other comprehensive income (loss) before reclassifications 27 (3) 24 Amounts reclassified from AOCI (1) 12 — 12 Tax effect (7) — (7) Other comprehensive income (loss), net of tax 32 (3) 29 Balance at April 3, 2021 $ 4 $ (44) $ (40) (1) See Note 8, Derivative Instruments |
Accounts Receivable Factoring
Accounts Receivable Factoring | 3 Months Ended |
Apr. 03, 2021 | |
Transfers and Servicing [Abstract] | |
Accounts Receivable Factoring | Accounts Receivable Factoring The Company has multiple Receivables Factoring arrangements, pursuant to which certain receivables are sold to banks without recourse in exchange for cash. Transactions under the Receivables Factoring arrangements are accounted for as sales under ASC 860, Transfers and Servicing of Financial Assets , with the sold receivables removed from the Company’s balance sheet. Under these Receivables Factoring arrangements, the Company does not maintain any beneficial interest in the receivables sold. The banks’ purchase of eligible receivables is subject to a maximum amount of uncollected receivables. The Company services the receivables on behalf of the banks, but otherwise maintains no significant continuing involvement with respect to the receivables. Sale proceeds that are representative of the fair value of factored receivables, less a factoring fee, are reflected in Net cash provided by operating activities on the Consolidated Statements of Cash Flows, while sale proceeds in excess of the fair value of factored receivables are reflected in Net cash used in financing activities on the Consolidated Statements of Cash Flows. In May 2020, the Company entered into a new Receivables Factoring arrangement with a bank, which allows for the factoring of up to €150 million of uncollected receivables originated from the EMEA and Asia-Pacific regions. The Company is required to maintain a portion of sales proceeds as deposits in a restricted cash account that is released to the Company as it satisfies its obligations as servicer of sold receivables, which totaled $33 million and $24 million as of April 3, 2021 and December 31, 2020, respectively, and is classified within Prepaid expenses and other current assets on the Consolidated Balance Sheets. The Company’s other active Receivable Factoring arrangements, which were entered into prior to 2020, also allow for the factoring of up to $125 million of uncollected receivables originated from the EMEA region. During the three months ended April 3, 2021 and March 28, 2020, the Company received cash proceeds of $413 million and $162 million, respectively, from the sales of accounts receivables under its factoring arrangements. As of April 3, 2021 and December 31, 2020, there were a total of $77 million and $70 million, respectively, of uncollected receivables that had been sold and removed from the Company’s Consolidated Balance Sheets. As servicer of sold receivables, the Company had $123 million and $142 million of obligations that were not yet remitted to banks as of April 3, 2021 and December 31, 2020, respectively. These obligations are included within Accrued liabilities on the Consolidated Balance Sheets, with changes in such obligations reflected within Net cash used in financing activities on the Consolidated Statements of Cash Flows. Fees incurred in connection with these arrangements were not significant. |
Segment Information & Geographi
Segment Information & Geographic Data | 3 Months Ended |
Apr. 03, 2021 | |
Segment Reporting [Abstract] | |
Segment Information & 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. To the extent applicable, segment operating income excludes business acquisition purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, impairment of goodwill and other intangibles, exit and restructuring costs, and product sourcing diversification costs. Segment assets are not reviewed by the Company’s CODM and therefore are not disclosed below. Effective January 1, 2021, we moved our retail solutions offering from our AIT segment into our EVM segment contemporaneous with a change in our organizational structure and management of the business. Prior period results have been revised to conform to the current segment presentation. This change does not have an impact to the Consolidated Financial Statements. Financial information by segment is presented as follows (in millions): Three Months Ended April 3, March 28, Net sales: AIT $ 436 $ 355 EVM 914 697 Total segment Net sales 1,350 1,052 Corporate, eliminations (1) (3) — Total Net sales $ 1,347 $ 1,052 Operating income: AIT (2) $ 109 $ 82 EVM (2) 193 95 Total segment operating income 302 177 Corporate, eliminations (1) (30) (26) Total Operating income $ 272 $ 151 (1) To the extent applicable, amounts included in Corporate, eliminations consist of business acquisition purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, impairment of goodwill and other intangibles, exit and restructuring costs, and product sourcing diversification costs. (2) AIT and EVM segment operating income includes depreciation and share-based compensation expense. The amounts of depreciation and share-based compensation expense attributable to AIT and EVM are proportionate to each segment’s Net sales. Information regarding the Company’s operations by geographic area is contained in the following table. Net sales amounts are attributed to geographic area based on customer location. We manage our business based on regions rather than by individual countries. Geographic data for Net sales is as follows (in millions): Three Months Ended April 3, March 28, North America $ 673 $ 519 EMEA 490 388 Asia-Pacific 120 97 Latin America 64 48 Total Net sales $ 1,347 $ 1,052 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 03, 2021 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). Subject to meeting certain criteria, ASU 2020-04 provides optional expedients and exceptions to applying contract modification accounting under existing generally accepted accounting principles for contracts that are modified to address the expected phase out of the London Inter-bank Offered Rate (“LIBOR”). Some of the Company’s contracts with respect to its borrowings and interest rate swap contracts already contain comparable alternative reference rates that would automatically take effect upon the phasing out of LIBOR, while for others, the Company anticipates negotiating comparable replacement rates with its counterparties. At this stage of its contract assessment, the Company does not expect ASU 2020-04 to have a material impact on its financial results. |
Revenues | Revenues The Company recognizes revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which it expects to receive for providing those goods or services. Revenues for products are generally recognized upon shipment, whereas revenues for services and solutions offerings are generally recognized by using an output or time-based method, assuming all other criteria for revenue recognition have been met. Revenues for software are recognized either upon delivery or using a time-based method, depending upon how control is transferred to the customer. In cases where a bundle of products, services, and/or software are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control. Contract Balances Progress on satisfying performance obligations under contracts with customers is reflected on the Consolidated Balance Sheets in Accounts receivable, net for billed revenues. Progress on satisfying performance obligations under contracts with customers related to unbilled revenues (“contract assets”) is reflected on the Consolidated Balance Sheets as Prepaid expenses and other current assets for revenues expected to be billed within the next twelve months, and Other long-term assets for revenues expected to be billed thereafter. The total contract asset balances were $10 million each as of April 3, 2021 and December 31, 2020. These contract assets result from timing differences between the billing and delivery schedules of products, services and software, as well as the impact from the allocation of the transaction price among performance obligations for contracts that include multiple performance obligations. Contract assets are evaluated for impairment and no impairment losses have been recognized during the three months ended April 3, 2021 and March 28, 2020. |
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 Accounting Standards Codification (“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 and money market funds). • Level 2: Observable prices that are based on inputs not quoted in 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 to the extent possible. In addition, the Company considers counterparty credit risk in the assessment of fair value. |
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 Topic 815, Derivatives and Hedging (“ASC 815”). 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. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue By Product Category And Segment | The following table presents our Net sales disaggregated by product category for each of our segments, AIT and EVM, for the three months ended April 3, 2021 and March 28, 2020 (in millions): Three Months Ended April 3, 2021 March 28, 2020 Segment Tangible Products Services and Software Total Tangible Products Services and Software Total AIT $ 410 $ 26 $ 436 $ 333 $ 22 $ 355 EVM 743 171 914 568 129 697 Corporate, eliminations (1) — (3) (3) — — — Total $ 1,153 $ 194 $ 1,347 $ 901 $ 151 $ 1,052 (1) Amounts included in Corporate, eliminations consist of purchase accounting adjustments. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventories, Net | The components of Inventories, net are as follows (in millions): April 3, December 31, Raw materials $ 117 $ 117 Work in process 3 4 Finished goods 408 390 Total Inventories, net $ 528 $ 511 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Carried at Fair Value | The Company’s financial assets and liabilities carried at fair value as of April 3, 2021, are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Foreign exchange contracts (1) $ 4 $ 6 $ — $ 10 Money market investments related to deferred compensation plan 33 — — 33 Total Assets at fair value $ 37 $ 6 $ — $ 43 Liabilities: Forward interest rate swap contracts (2) $ — $ 34 $ — $ 34 Liabilities related to the deferred compensation plan 33 — — 33 Total Liabilities at fair value $ 33 $ 34 $ — $ 67 The Company’s financial assets and liabilities carried at fair value as of December 31, 2020, are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Money market investments related to deferred compensation plan $ 30 $ — $ — $ 30 Total Assets at fair value $ 30 $ — $ — $ 30 Liabilities: Foreign exchange contracts (1) $ 3 $ 34 $ — $ 37 Forward interest rate swap contracts (2) — 46 — 46 Liabilities related to the deferred compensation plan 30 — — 30 Total Liabilities at fair value $ 33 $ 80 $ — $ 113 (1) The fair value of the foreign exchange contracts is calculated as follows: • Fair value of regular forward contracts associated with forecasted sales hedges is calculated using the period-end exchange rate adjusted for current forward points. • Fair value of hedges against net assets is calculated at the period-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). |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Assets and Liabilities | The following table presents the fair value of its derivative instruments (in millions): Asset (Liability) Fair Values as of Balance Sheet Classification April 3, December 31, Derivative instruments designated as hedges: Foreign exchange contracts Prepaid expenses and other current assets $ 6 $ — Foreign exchange contracts Accrued liabilities — (34) Total derivative instruments designated as hedges $ 6 $ (34) Derivative instruments not designated as hedges: Foreign exchange contracts Prepaid expenses and other current assets $ 4 $ — Foreign exchange contracts Accrued liabilities — (3) Forward interest rate swaps Accrued liabilities (17) (17) Forward interest rate swaps Other long-term liabilities (17) (29) Total derivative instruments not designated as hedges $ (30) $ (49) Total net derivative liability $ (24) $ (83) |
Schedule of Gains (Losses) from Changes in Fair Values of Derivatives | The following table presents the net gains (losses) from changes in fair values of derivatives that are not designated as hedges (in millions): Gains (Losses) Recognized in Income Three Months Ended Statements of Operations Classification April 3, March 28, Derivative instruments not designated as hedges: Foreign exchange contracts Foreign exchange gain (loss) $ 6 $ (1) Forward interest rate swaps Interest income (expense), net 8 (35) Total gains (losses) recognized in income $ 14 $ (36) |
Schedule of Notional Values and Net Fair Value of Forward Contracts | The notional values and the net fair value of these outstanding contracts are as follows (in millions): April 3, December 31, Notional balance of outstanding contracts: British Pound/U.S. Dollar £ 28 £ 10 Euro/U.S. Dollar € 157 € 123 Canadian Dollar/U.S. Dollar C$ 4 C$ — Japanese Yen/U.S. Dollar ¥ 173 ¥ 354 Singapore Dollar/U.S. Dollar S$ 17 S$ 12 Mexican Peso/U.S. Dollar Mex$ 62 Mex$ 36 Polish Zloty/U.S. Dollar zł 48 zł — Net fair value of assets (liabilities) of outstanding contracts $ 4 $ (3) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Carrying Value of Long-term Debt | The following table shows the carrying value of the Company’s debt (in millions): April 3, December 31, Term Loan A $ 888 $ 917 2020 Term Loan — 100 Receivables Financing Facilities 208 235 Total debt $ 1,096 $ 1,252 Less: Debt issuance costs (4) (5) Less: Unamortized discounts (2) (2) Less: Current portion of debt (134) (364) Total long-term debt $ 956 $ 881 |
Schedule of Future Maturities of Long-term Debt | As of April 3, 2021, the future maturities of debt, excluding debt discounts and issuance costs, are as follows (in millions): 2021 $ 122 2022 56 2023 81 2024 837 Total future debt maturities $ 1,096 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Accrued Warranty Obligation | The following table is a summary of the Company’s accrued warranty obligations, which are included in Accrued liabilities on the Consolidated Balance Sheets (in millions): Three Months Ended April 3, March 28, Balance at the beginning of the period $ 24 $ 21 Warranty expense 8 8 Warranties fulfilled (8) (7) Balance at the end of the period $ 24 $ 22 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Earnings per Share | Earnings per share (in millions, except share data): Three Months Ended April 3, March 28, Basic: Net income $ 228 $ 89 Weighted-average shares outstanding 53,484,265 53,760,873 Basic earnings per share $ 4.26 $ 1.66 Diluted: Net income $ 228 $ 89 Weighted-average shares outstanding 53,484,265 53,760,873 Dilutive shares 480,065 557,171 Diluted weighted-average shares outstanding 53,964,330 54,318,044 Diluted earnings per share $ 4.22 $ 1.65 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Equity [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Loss (AOCI) | The components of AOCI for the three months ended April 3, 2021 and March 28, 2020 are as follows (in millions): Unrealized gain (loss) on sales hedging Foreign currency translation adjustments Total Balance at December 31, 2019 $ 2 $ (46) $ (44) Other comprehensive income (loss) before reclassifications 11 (9) 2 Amounts reclassified from AOCI (1) (8) — (8) Tax effect (1) — (1) Other comprehensive income (loss), net of tax 2 (9) (7) Balance at March 28, 2020 $ 4 $ (55) $ (51) Balance at December 31, 2020 $ (28) $ (41) $ (69) Other comprehensive income (loss) before reclassifications 27 (3) 24 Amounts reclassified from AOCI (1) 12 — 12 Tax effect (7) — (7) Other comprehensive income (loss), net of tax 32 (3) 29 Balance at April 3, 2021 $ 4 $ (44) $ (40) (1) See Note 8, Derivative Instruments |
Segment Information & Geograp_2
Segment Information & Geographic Data (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information by Segments | Financial information by segment is presented as follows (in millions): Three Months Ended April 3, March 28, Net sales: AIT $ 436 $ 355 EVM 914 697 Total segment Net sales 1,350 1,052 Corporate, eliminations (1) (3) — Total Net sales $ 1,347 $ 1,052 Operating income: AIT (2) $ 109 $ 82 EVM (2) 193 95 Total segment operating income 302 177 Corporate, eliminations (1) (30) (26) Total Operating income $ 272 $ 151 (1) To the extent applicable, amounts included in Corporate, eliminations consist of business acquisition purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, impairment of goodwill and other intangibles, exit and restructuring costs, and product sourcing diversification costs. (2) AIT and EVM segment operating income includes depreciation and share-based compensation expense. The amounts of depreciation and share-based compensation expense attributable to AIT and EVM are proportionate to each segment’s Net sales. |
Schedule of Net Sales to Customers by Geographic Region | Geographic data for Net sales is as follows (in millions): Three Months Ended April 3, March 28, North America $ 673 $ 519 EMEA 490 388 Asia-Pacific 120 97 Latin America 64 48 Total Net sales $ 1,347 $ 1,052 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue By Product Category And Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total Net sales | $ 1,347 | $ 1,052 |
Tangible Products | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 1,153 | 901 |
Services and Software | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 194 | 151 |
Operating segments | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 1,350 | 1,052 |
Operating segments | AIT | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 436 | 355 |
Operating segments | AIT | Tangible Products | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 410 | 333 |
Operating segments | AIT | Services and Software | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 26 | 22 |
Operating segments | EVM | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 914 | 697 |
Operating segments | EVM | Tangible Products | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 743 | 568 |
Operating segments | EVM | Services and Software | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 171 | 129 |
Corporate, eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | (3) | 0 |
Corporate, eliminations | Tangible Products | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 0 | 0 |
Corporate, eliminations | Services and Software | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | $ (3) | $ 0 |
Revenues - Remaining Performanc
Revenues - Remaining Performance Obligation (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Dec. 31, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Revenue from Contract with Customer [Abstract] | ||
Remaining performance obligation | $ 974 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation, expected recognition period | 2 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-04 | ||
Revenue from Contract with Customer [Abstract] | ||
Remaining performance obligation | $ 1,019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation, expected recognition period | 2 years |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) | 3 Months Ended | ||
Apr. 03, 2021 | Mar. 28, 2020 | Dec. 31, 2020 | |
Revenue From Contract With Customer, Assets And Liabilities [Line Items] | |||
Capitalized contract, impairment loss | $ 0 | $ 0 | |
Deferred revenue balances | 631,000,000 | $ 581,000,000 | |
Revenue recognized that was included in contract liability | 110,000,000 | $ 73,000,000 | |
Prepaid expenses and other current assets | |||
Revenue From Contract With Customer, Assets And Liabilities [Line Items] | |||
Contract assets recorded in prepaids and other current assets | $ 10,000,000 | $ 10,000,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 117 | $ 117 |
Work in process | 3 | 4 |
Finished goods | 408 | 390 |
Total Inventories, net | $ 528 | $ 511 |
Investments (Details)
Investments (Details) $ in Millions | 3 Months Ended | ||
Apr. 03, 2021USD ($)facility | Mar. 28, 2020USD ($) | Dec. 31, 2020USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |||
Equity securities held | $ 91 | $ 77 | |
Purchases of long-term investments | $ 13 | $ 2 | |
Number of long term investments purchased | facility | 2 | ||
Investment gain | $ 1 |
Exit and Restructuring Costs (D
Exit and Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Exit and restructuring costs | $ 0 | $ 4 |
2019 Productivity Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Exit and restructuring costs | $ 4 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Dec. 31, 2020 |
Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | $ 10 | |
Level 1 | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 4 | |
Level 2 | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 6 | |
Level 3 | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 0 | |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 43 | $ 30 |
Liabilities related to the deferred compensation plan | 33 | 30 |
Total Liabilities at fair value | 67 | 113 |
Recurring | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 37 | |
Recurring | Forward interest rate swap contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 34 | 46 |
Recurring | Money market investments related to deferred compensation plan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market investments related to deferred compensation plan | 33 | 30 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 37 | 30 |
Liabilities related to the deferred compensation plan | 33 | 30 |
Total Liabilities at fair value | 33 | 33 |
Recurring | Level 1 | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 3 | |
Recurring | Level 1 | Forward interest rate swap contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 0 | 0 |
Recurring | Level 1 | Money market investments related to deferred compensation plan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market investments related to deferred compensation plan | 33 | 30 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets at fair value | 6 | 0 |
Liabilities related to the deferred compensation plan | 0 | 0 |
Total Liabilities at fair value | 34 | 80 |
Recurring | Level 2 | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 34 | |
Recurring | Level 2 | Forward interest rate swap contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 34 | 46 |
Recurring | Level 2 | Money market investments related to deferred compensation plan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market investments related to deferred compensation plan | 0 | 0 |
Recurring | 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 | 0 | 0 |
Total Liabilities at fair value | 0 | 0 |
Recurring | Level 3 | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 0 | |
Recurring | Level 3 | Forward interest rate swap contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities at fair value | 0 | 0 |
Recurring | Level 3 | Money market investments related to deferred compensation plan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market investments related to deferred compensation plan | $ 0 | $ 0 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Total net derivative liability | $ (24) | $ (83) |
Derivative instruments designated as hedges | ||
Derivative [Line Items] | ||
Total net derivative liability | 6 | (34) |
Derivative instruments designated as hedges | Foreign exchange contracts | Prepaid expenses and other current assets | ||
Derivative [Line Items] | ||
Total Assets at fair value | 6 | 0 |
Derivative instruments designated as hedges | Foreign exchange contracts | Accrued liabilities | ||
Derivative [Line Items] | ||
Total Liabilities at fair value | 0 | (34) |
Derivative instruments not designated as hedges | ||
Derivative [Line Items] | ||
Total net derivative liability | (30) | (49) |
Derivative instruments not designated as hedges | Foreign exchange contracts | Prepaid expenses and other current assets | ||
Derivative [Line Items] | ||
Total Assets at fair value | 4 | 0 |
Derivative instruments not designated as hedges | Foreign exchange contracts | Accrued liabilities | ||
Derivative [Line Items] | ||
Total Liabilities at fair value | 0 | (3) |
Derivative instruments not designated as hedges | Forward interest rate swaps | Accrued liabilities | ||
Derivative [Line Items] | ||
Total Liabilities at fair value | (17) | (17) |
Derivative instruments not designated as hedges | Forward interest rate swaps | Other long-term liabilities | ||
Derivative [Line Items] | ||
Total Liabilities at fair value | $ (17) | $ (29) |
Derivative Instruments - Gains
Derivative Instruments - Gains (Losses) Recognized in Income (Details) - Derivative instruments not designated as hedges - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) recognized in income | $ 14 | $ (36) |
Foreign exchange contracts | Foreign exchange gain (loss) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) recognized in income | 6 | (1) |
Forward interest rate swaps | Interest income (expense), net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) recognized in income | $ 8 | $ (35) |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) € in Millions | 3 Months Ended | ||||||
Apr. 03, 2021USD ($) | Mar. 28, 2020USD ($) | Apr. 03, 2021EUR (€) | Dec. 31, 2020USD ($) | Dec. 31, 2020EUR (€) | Sep. 28, 2019USD ($) | Dec. 31, 2017USD ($) | |
Net sales | |||||||
Change in unrealized gain (loss) on anticipated sales hedging: | |||||||
Net sales of losses | $ 12,000,000 | ||||||
Net sales of gain | $ 8,000,000 | ||||||
Foreign exchange contracts | |||||||
Change in unrealized gain (loss) on anticipated sales hedging: | |||||||
Derivative, increase in asset (liability) positions | $ 5,000,000 | $ 5,000,000 | |||||
Foreign exchange forward | Derivative instruments designated as hedges | |||||||
Change in unrealized gain (loss) on anticipated sales hedging: | |||||||
Maturity period | 12 months | ||||||
Derivative, notional amount | € | € 565 | € 585 | |||||
Foreign exchange forward | Derivative instruments not designated as hedges | |||||||
Change in unrealized gain (loss) on anticipated sales hedging: | |||||||
Maturity period | 1 month | ||||||
Forward interest rate swaps | Derivative instruments designated as hedges | |||||||
Change in unrealized gain (loss) on anticipated sales hedging: | |||||||
Derivative, notional amount | $ 800,000,000 | $ 800,000,000 |
Derivative Instruments - Notion
Derivative Instruments - Notional Values and Net Fair Value of Outstanding Contracts (Details) - Foreign Exchange Forward € in Millions, ¥ in Millions, £ in Millions, zł in Millions, $ in Millions, $ in Millions, $ in Millions, $ in Millions | Apr. 03, 2021GBP (£) | Apr. 03, 2021EUR (€) | Apr. 03, 2021CAD ($) | Apr. 03, 2021JPY (¥) | Apr. 03, 2021SGD ($) | Apr. 03, 2021MXN ($) | Apr. 03, 2021PLN (zł) | Apr. 03, 2021USD ($) | Dec. 31, 2020GBP (£) | Dec. 31, 2020EUR (€) | Dec. 31, 2020CAD ($) | Dec. 31, 2020JPY (¥) | Dec. 31, 2020SGD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2020PLN (zł) | Dec. 31, 2020USD ($) |
Derivative [Line Items] | ||||||||||||||||
Notional balance of outstanding contracts | £ 28 | € 157 | $ 4 | ¥ 173 | $ 17 | $ 62 | zł 48 | £ 10 | € 123 | $ 0 | ¥ 354 | $ 12 | $ 36 | zł 0 | ||
Net fair value of assets (liabilities) of outstanding contracts | $ 4 | $ (3) |
Long-Term Debt - Summary of Car
Long-Term Debt - Summary of Carrying Value of Debt (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total future debt maturities | $ 1,096 | $ 1,252 |
Less: Debt issuance costs | (4) | (5) |
Less: Unamortized discounts | (2) | (2) |
Less: Current portion of debt | (134) | (364) |
Total long-term debt | 956 | 881 |
Term Loan | Term Loan A | ||
Debt Instrument [Line Items] | ||
Total future debt maturities | 888 | 917 |
Term Loan | 2020 Term Loan | ||
Debt Instrument [Line Items] | ||
Total future debt maturities | 0 | 100 |
Secured Debt | Receivables Financing Facilities | ||
Debt Instrument [Line Items] | ||
Total future debt maturities | $ 208 | $ 235 |
Long-Term Debt - Future Maturit
Long-Term Debt - Future Maturities of Long-Term Debt (Details) $ in Millions | Apr. 03, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 122 |
2022 | 56 |
2023 | 81 |
2024 | 837 |
Total future debt maturities | $ 1,096 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) $ in Billions | Apr. 03, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Long-term debt, fair value | $ 1.1 | $ 1.3 |
Long-Term Debt - Term Loan (Det
Long-Term Debt - Term Loan (Details) - Loans Payable - USD ($) | 3 Months Ended | ||
Apr. 03, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | |
Term Loan A | |||
Debt Instrument [Line Items] | |||
Percentage bearing variable interest, percentage rate | 1.37% | ||
2020 Term Loan | Reflexis | |||
Debt Instrument [Line Items] | |||
Proceeds from debt issuance | $ 200,000,000 | ||
Debt repaid | $ 100,000,000 | $ 100,000,000 |
Long-Term Debt - Receivable Fin
Long-Term Debt - Receivable Financing Facility (Details) - Secured Debt | Apr. 03, 2021USD ($)facility | Mar. 31, 2021USD ($) | May 31, 2020USD ($) |
Receivables Financing Facilities | |||
Line of Credit Facility [Line Items] | |||
Number of receivable financing facilities | facility | 2 | ||
Total borrowing limits | $ 280,000,000 | ||
Accounts receivable pledged | 498,000,000 | ||
Outstanding borrowings | 208,000,000 | ||
Line of credit, current | $ 122,000,000 | ||
Average interest rate | 1.04% | ||
Receivables Financing Facility, due 2021 | |||
Line of Credit Facility [Line Items] | |||
Total borrowing limits | $ 180,000,000 | $ 100,000,000 |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facility (Details) - Revolving Credit Facility | Apr. 03, 2021USD ($) |
Line of Credit Facility [Line Items] | |
Letters of credit | $ 5,000,000 |
Outstanding borrowings | 0 |
Amended and Restated Credit Agreement | |
Line of Credit Facility [Line Items] | |
Revolving credit facility maximum borrowing capacity | 1,000,000,000 |
Funds available for other borrowing | $ 995,000,000 |
Long-Term Debt - Uncommitted Sh
Long-Term Debt - Uncommitted Short-Term Credit Facility (Details) - Uncommitted Short Term Credit Facility - USD ($) | 1 Months Ended | |
Aug. 31, 2020 | Apr. 03, 2021 | |
Line of Credit Facility [Line Items] | ||
Revolving credit facility maximum borrowing capacity | $ 20,000,000 | |
Borrowing repaid | 90 days | |
Outstanding borrowings | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies -Summary of Accrued Warranty Obligation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Balance at the beginning of the period | $ 24 | $ 21 |
Warranty expense | 8 | 8 |
Warranties fulfilled | (8) | (7) |
Balance at the end of the period | $ 24 | $ 22 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Dec. 31, 2020 | |
Loss Contingencies [Line Items] | ||
Recovered, import duties paid previously | $ 3 | $ 12 |
AIT | ||
Loss Contingencies [Line Items] | ||
Recovered, import duties paid previously | 1 | 4 |
EVM | ||
Loss Contingencies [Line Items] | ||
Recovered, import duties paid previously | $ 2 | $ 8 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rates | 17.40% | 13.60% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Basic: | ||
Net income | $ 228 | $ 89 |
Weighted-average shares outstanding (in shares) | 53,484,265 | 53,760,873 |
Basic earnings per share (USD per share) | $ 4.26 | $ 1.66 |
Diluted: | ||
Net income | $ 228 | $ 89 |
Weighted-average shares outstanding (in shares) | 53,484,265 | 53,760,873 |
Dilutive shares (in shares) | 480,065 | 557,171 |
Diluted weighted-average shares outstanding (in shares) | 53,964,330 | 54,318,044 |
Diluted earnings per share (USD per share) | $ 4.22 | $ 1.65 |
Anti-dilutive options to purchase common shares excluded from diluted earnings per share calculations (in shares) | 570 | 68,554 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | $ 2,144 | $ 1,839 |
Other comprehensive income (loss) before reclassifications | 24 | 2 |
Amounts reclassified from AOCI | 12 | (8) |
Tax effect | (7) | (1) |
Other comprehensive income (loss), net of tax | 29 | (7) |
Ending balance | 2,411 | 1,727 |
Unrealized gain (loss) on sales hedging | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (28) | 2 |
Other comprehensive income (loss) before reclassifications | 27 | 11 |
Amounts reclassified from AOCI | 12 | (8) |
Tax effect | (7) | (1) |
Other comprehensive income (loss), net of tax | 32 | 2 |
Ending balance | 4 | 4 |
Foreign currency translation adjustments | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (41) | (46) |
Other comprehensive income (loss) before reclassifications | (3) | (9) |
Amounts reclassified from AOCI | 0 | 0 |
Tax effect | 0 | 0 |
Other comprehensive income (loss), net of tax | (3) | (9) |
Ending balance | (44) | (55) |
Total | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (69) | (44) |
Ending balance | $ (40) | $ (51) |
Accounts Receivable Factoring (
Accounts Receivable Factoring (Details) € in Millions, $ in Millions | 3 Months Ended | ||||
Apr. 03, 2021USD ($) | Mar. 28, 2020USD ($) | Dec. 31, 2020USD ($) | May 31, 2020EUR (€) | Dec. 31, 2019USD ($) | |
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||||
Maximum uncollected receivables available | € 150 | $ 125 | |||
Sale of account receivables | $ 413 | $ 162 | |||
Accounts receivables sold | 77 | $ 70 | |||
Cash collections not yet remitted to banks | 123 | 142 | |||
Prepaid expenses and other current assets | |||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||||
Deposits | $ 33 | $ 24 |
Segment Information & Geograp_3
Segment Information & Geographic Data - Additional Information (Details) | 3 Months Ended |
Apr. 03, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information & Geograp_4
Segment Information & Geographic Data - Financial Information by Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Segment Reporting Information [Line Items] | ||
Total Net sales | $ 1,347 | $ 1,052 |
Total Operating income | 272 | 151 |
Operating segments | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 1,350 | 1,052 |
Total Operating income | 302 | 177 |
Corporate, eliminations | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | (3) | 0 |
Total Operating income | (30) | (26) |
AIT | Operating segments | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 436 | 355 |
Total Operating income | 109 | 82 |
EVM | Operating segments | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 914 | 697 |
Total Operating income | $ 193 | $ 95 |
Segment Information & Geograp_5
Segment Information & Geographic Data - Geographic Data for Net Sales (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Segment Reporting Information [Line Items] | ||
Total Net sales | $ 1,347 | $ 1,052 |
North America | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 673 | 519 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 490 | 388 |
Asia-Pacific | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 120 | 97 |
Latin America | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | $ 64 | $ 48 |