Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 15, 2023 | Jul. 01, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38635 | ||
Entity Registrant Name | Resideo Technologies, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-5318796 | ||
Entity Address, Address Line One | 16100 N. 71st Street | ||
Entity Address, Address Line Two | Suite 550 | ||
Entity Address, City or Town | Scottsdale | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85254 | ||
City Area Code | 480 | ||
Local Phone Number | 573-5340 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | REZI | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2.8 | ||
Entity Common Stock, Shares Outstanding | 146,615,940 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the registrant’s 2023 Annual Meeting of Shareholders, which will be filed subsequent to the date hereof, are incorporated by reference into Part III of this Form 10-K. Such proxy statement will be filed with the Securities and Exchange Commission not later than 120 days following the end of the registrant’s fiscal year ended December 31, 2022 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Entity Central Index Key | 0001740332 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Minneapolis, Minnesota |
Auditor Firm ID | 34 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 326 | $ 775 |
Accounts receivable, net | 1,002 | 876 |
Inventories, net | 975 | 740 |
Other current assets | 199 | 150 |
Total current assets | 2,502 | 2,541 |
Property, plant and equipment, net | 366 | 287 |
Goodwill | 2,724 | 2,661 |
Total intangible assets | 475 | 120 |
Other assets | 320 | 244 |
Total assets | 6,387 | 5,853 |
Current liabilities: | ||
Accounts payable | 894 | 883 |
Current portion of long-term debt | 12 | 10 |
Accrued liabilities | 640 | 601 |
Total current liabilities | 1,546 | 1,494 |
Long-term debt | 1,404 | 1,220 |
Obligations payable under Indemnification Agreements | 580 | 585 |
Other liabilities | 328 | 302 |
Total liabilities | 3,858 | 3,601 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders’ equity | ||
Common stock, $0.001 par value: 700 shares authorized, 148 and 146 shares issued and outstanding at December 31, 2022 and 146 and 145 shares issued and outstanding at December 31, 2021, respectively | 0 | 0 |
Additional paid-in capital | 2,176 | 2,121 |
Retained earnings | 600 | 317 |
Accumulated other comprehensive loss, net | (212) | (165) |
Treasury stock at cost | (35) | (21) |
Total stockholders’ equity | 2,529 | 2,252 |
Total liabilities and stockholders’ equity | $ 6,387 | $ 5,853 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 148,000,000 | 146,000,000 |
Common stock, shares outstanding (in shares) | 146,000,000 | 145,000,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Net revenue | $ 6,370,000,000 | $ 5,846,000,000 | $ 5,071,000,000 |
Cost of goods sold | 4,604,000,000 | 4,262,000,000 | 3,727,000,000 |
Gross profit | 1,766,000,000 | 1,584,000,000 | 1,344,000,000 |
Research and development expenses | 111,000,000 | 86,000,000 | 74,000,000 |
Selling, general and administrative expenses | 974,000,000 | 909,000,000 | 889,000,000 |
Intangible asset amortization | 35,000,000 | 30,000,000 | 30,000,000 |
Restructuring and impairment expenses | 35,000,000 | 0 | 40,000,000 |
Income from operations | 611,000,000 | 559,000,000 | 311,000,000 |
Other expenses, net | 135,000,000 | 158,000,000 | 147,000,000 |
Interest expense, net | 58,000,000 | 48,000,000 | 63,000,000 |
Income before taxes | 418,000,000 | 353,000,000 | 101,000,000 |
Provision for income taxes | 135,000,000 | 111,000,000 | 64,000,000 |
Net income | $ 283,000,000 | $ 242,000,000 | $ 37,000,000 |
Earnings Per Share | |||
Basic (in dollars per share) | $ 1.94 | $ 1.68 | $ 0.30 |
Diluted (in dollars per share) | $ 1.90 | $ 1.63 | $ 0.29 |
Weighted average number of shares outstanding: | |||
Basic (in dollars per share) | 146 | 144 | 125 |
Diluted (in dollars per share) | 149 | 148 | 126 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 283 | $ 242 | $ 37 |
Other comprehensive (loss) income, net of tax: | |||
Foreign exchange translation (loss) gain | (74) | (57) | 63 |
Pension liability adjustments | (9) | 32 | (15) |
Changes in fair value of effective cash flow hedges | 36 | 6 | 0 |
Total other comprehensive (loss) income, net of tax | (47) | (19) | 48 |
Comprehensive income | $ 236 | $ 223 | $ 85 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows From Operating Activities: | |||
Net income | $ 283,000,000 | $ 242,000,000 | $ 37,000,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 94,000,000 | 88,000,000 | 86,000,000 |
Restructuring and impairment expenses | 35,000,000 | 0 | 40,000,000 |
Stock-based compensation expense | 50,000,000 | 39,000,000 | 29,000,000 |
Deferred income taxes | (3,000,000) | 6,000,000 | 22,000,000 |
Other, net | 6,000,000 | 3,000,000 | 21,000,000 |
Loss on extinguishment of debt | 0 | 41,000,000 | 0 |
Changes in assets and liabilities, net of acquired companies: | |||
Accounts receivable, net | (72,000,000) | (30,000,000) | (27,000,000) |
Inventories, net | (122,000,000) | (73,000,000) | 19,000,000 |
Other current assets | (26,000,000) | 27,000,000 | 5,000,000 |
Accounts payable | (43,000,000) | (42,000,000) | (1,000,000) |
Accrued liabilities | (54,000,000) | 14,000,000 | (9,000,000) |
Other, net | 4,000,000 | 0 | 22,000,000 |
Net cash provided by operating activities | 152,000,000 | 315,000,000 | 244,000,000 |
Cash Flows From Investing Activities: | |||
Capital expenditures | (85,000,000) | (63,000,000) | (70,000,000) |
Acquisitions, net of cash acquired | (665,000,000) | (11,000,000) | (35,000,000) |
Other investing activities, net | (14,000,000) | 9,000,000 | 2,000,000 |
Net cash used in investing activities | (764,000,000) | (65,000,000) | (103,000,000) |
Cash Flows From Financing Activities: | |||
Proceeds from issuance of A&R Term B Facility | 200,000,000 | 1,250,000,000 | 0 |
Repayments of long-term debt | (12,000,000) | (1,188,000,000) | (22,000,000) |
Payment of debt facility issuance and modification costs | (4,000,000) | (39,000,000) | 0 |
Other financing activities, net | (14,000,000) | (3,000,000) | (4,000,000) |
Issuance of common stock through public offering, net of issuance costs | 0 | 0 | 279,000,000 |
Net cash provided by financing activities | 170,000,000 | 20,000,000 | 253,000,000 |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (8,000,000) | (8,000,000) | 1,000,000 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (450,000,000) | 262,000,000 | 395,000,000 |
Cash, cash equivalents and restricted cash at beginning of year | 779,000,000 | 517,000,000 | 122,000,000 |
Cash, cash equivalents and restricted cash at end of year | 329,000,000 | 779,000,000 | 517,000,000 |
Supplemental Cash Flow Information: | |||
Interest paid | 54,000,000 | 39,000,000 | 57,000,000 |
Taxes paid, net of refunds | 159,000,000 | 107,000,000 | 32,000,000 |
Capital expenditures in accounts payable | $ 21,000,000 | $ 14,000,000 | $ 15,000,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Shares outstanding, beginning (in shares) at Dec. 31, 2019 | 122,873,000 | |||||
Beginning balance at Dec. 31, 2019 | $ 1,602 | $ 1,761 | $ 38 | $ (194) | $ (3) | |
Treasury stock, beginning (in shares) at Dec. 31, 2019 | 615,000 | |||||
Net income | 37 | 37 | ||||
Other comprehensive income, net of tax | 48 | 48 | ||||
Common stock issuance, net of shares withheld for taxes (in shares) | 636,000 | 285,000 | ||||
Common stock issuance, net of shares withheld for taxes | (2) | 1 | $ (3) | |||
Stock-based compensation expense | 29 | 29 | ||||
Common stock issuances through public offering, net of issuance costs (in shares) | 19,550,000 | |||||
Common stock issuance through public offering, net of issuance costs | 279 | 279 | ||||
Shares outstanding, ending (in shares) at Dec. 31, 2020 | 143,059,000 | |||||
Treasury stock, ending (in shares) at Dec. 31, 2020 | 900,000 | |||||
Ending balance at Dec. 31, 2020 | 1,993 | 2,070 | 75 | (146) | $ (6) | |
Net income | 242 | 242 | ||||
Other comprehensive income, net of tax | (19) | (19) | ||||
Common stock issuance, net of shares withheld for taxes (in shares) | 1,749,000 | 540,000 | ||||
Common stock issuance, net of shares withheld for taxes | (3) | 12 | $ (15) | |||
Stock-based compensation expense | 39 | 39 | ||||
Shares outstanding, ending (in shares) at Dec. 31, 2021 | 144,808,000 | |||||
Treasury stock, ending (in shares) at Dec. 31, 2021 | 1,440,000 | |||||
Ending balance at Dec. 31, 2021 | 2,252 | 2,121 | 317 | (165) | $ (21) | |
Net income | 283 | 283 | ||||
Other comprehensive income, net of tax | (47) | (47) | ||||
Common stock issuance, net of shares withheld for taxes (in shares) | 1,414,000 | 610,000 | ||||
Common stock issuance, net of shares withheld for taxes | (9) | 5 | $ (14) | |||
Stock-based compensation expense | 50 | 50 | ||||
Shares outstanding, ending (in shares) at Dec. 31, 2022 | 146,222,000 | |||||
Treasury stock, ending (in shares) at Dec. 31, 2022 | 2,050,000 | |||||
Ending balance at Dec. 31, 2022 | $ 2,529 | $ 2,176 | $ 600 | $ (212) | $ (35) |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Nature of Operations Resideo Technologies, Inc. is a leading manufacturer and developer of technology-driven products that provide critical comfort, energy, smoke and carbon monoxide detection home safety products, and security solutions to homes globally. We are also a leading wholesale distributor of low-voltage security products including access control, fire detection, fire suppression, security, and video products, and participate significantly in the broader related markets of audio, communications, data communications, networking, power, ProAV, smart home, and wire and cable. Our global footprint serves both commercial and residential end markets. The Company was incorporated in Delaware on April 24, 2018 and we separated from Honeywell on October 29, 2018, becoming an independent publicly traded company as a result of a pro rata distribution of our common stock to shareholders of Honeywell. Basis of Consolidation and Reporting The accompanying Consolidated Financial Statements include the accounts of the Company and our wholly-owned subsidiaries and have been prepared in accordance with U.S. GAAP. All intercompany accounts, transactions and profits arising from consolidated entities have been eliminated in consolidation. We report financial information on a fiscal quarter basis using a modified four-four-five week calendar. Our fiscal calendar begins on January 1 and ends on December 31. We have elected the first, second and third quarters to end on a Saturday in order to not disrupt business processes. The effects of this election are generally not significant to reported results for any quarter and only exist within a reporting year. Reclassification For the purposes of comparability, certain prior period amounts have been reclassified to conform to current period classification. During the year, we changed the presentation of intangible asset amortization on the Consolidated Statements of Operations, whereas they were previously included in cost of goods sold and selling, general and administrative expenses. The reclassification decreased cost of goods sold by $23 million and $22 million for the years ended December 31, 2021 and 2020, respectively, and decreased selling, general and administrative expenses by $7 million and $8 million for the years ended December 31, 2021 and 2020, respectively. The reclassification had no impact on income from operations, income before taxes, net income, earnings per share or stockholders’ equity. Additionally, we changed the presentation of restructuring and impairment expenses on the Consolidated Statements of Operations, where as they were previously presented in cost of goods sold, research and development expenses, and selling, general and administrative expenses. The reclassification decreased cost of goods sold, research and development expenses, and selling, general and administrative expenses by $9 million, $3 million and $28 million for the year ended December 31, 2020, respectively. There were no restructuring and impairment expenses in 2021. The reclassification had no impact on income from operations, income before taxes, net income, earnings per share or stockholders’ equity. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies We consider the following policies to be beneficial in understanding the judgment involved in the preparation of our Consolidated Financial Statements and the uncertainties that could impact our financial condition, results of operations and cash flows. (a) Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities in the Consolidated Financial Statements and accompanying notes. Estimates are used for, but not limited to, provisions for expected credit losses and inventory reserves, accounting for business combinations, valuation of reporting units for purposes of assessing goodwill for impairment, valuation of long-lived asset groups for impairment testing, accruals for employee benefits, stock-based compensation, pension benefits, indemnification liabilities, deferred taxes, warranties and certain contingencies. We base our estimates on historical experience, market participant fair value considerations, projected future cash flows, and various other factors that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. (b) Cash, Cash Equivalents and Restricted Cash —Cash and cash equivalents may consist of cash on hand, money market instruments, time deposits and highly liquid investments. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents that are restricted as to the withdrawal or use under terms of certain contractual agreements are recorded in other current assets on the Consolidated Balance Sheets and primarily relate to collateral to support certain bank guarantees. Restricted cash for the periods presented were not material. Cash, cash equivalents and restricted cash are carried at cost, which approximates fair value. (c) Accounts Receivable and Allowance for Doubtful Accounts —Accounts receivable are recorded at the invoiced amount, presented net of allowance for doubtful accounts and do not bear interest. We review the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Allowance for doubtful accounts was not material as of December 31, 2022 and 2021, respectively. (d) Inventories —Inventories are stated at lower of cost or net realizable value and valued by the first-in-first-out method. Inventory reserves are maintained for obsolete and surplus items. The following tables summarize the details of our inventory, net: December 31, (in millions) 2022 2021 Raw materials $ 251 $ 174 Work in process 25 17 Finished products 699 549 Total inventories, net $ 975 $ 740 The expense charged to inventory obsolesce was approximately $13 million, $8 million and $31 million for the years ended December 31, 2022, 2021 and 2020, respectively. (e) Property, Plant and Equipment —Property, plant and equipment are stated at cost, less accumulated depreciation. For financial reporting purposes the straight-line method of depreciation is used over the estimated useful lives. Leasehold improvements are capitalized and amortized using the straight-line method over the shorter of their estimated useful lives or the term of the underlying lease. Depreciation is recognized in cost of sales, research and development, and selling, general and administrative expenses based on the nature and use of the underlying assets. The following table summarizes the details of our property, plant and equipment, including useful lives: December 31, (in millions) 2022 2021 Useful Lives Machinery and equipment $ 647 $ 602 3-16 years Buildings and improvements 303 292 10-50 years Construction in progress 80 35 NA Land 9 4 NA Gross property, plant and equipment 1,039 933 Accumulated depreciation (673) (646) Total property, plant and equipment, net $ 366 $ 287 NA = Not applicable; assets categorized as construction in progress and land are not depreciated. Depreciation expense was $59 million, $58 million and $56 million for the years ended December 31, 2022, 2021 and 2020, respectively. (f) Impairment of Long-Lived Assets —We assess the recoverability of the carrying amount of property, plant and equipment if events or changes in circumstances indicate that the carrying amount or related group of assets may not be recoverable. If the expected undiscounted cash flows are less than the carrying amount of the asset an impairment loss is recognized. (g) Goodwill and Intangible Assets —We review the carrying values of goodwill and identifiable intangibles whenever events or changes in circumstances indicate that such carrying values may not be recoverable and annually, on the first day of the fourth quarter. If the carrying value of a reporting unit exceeds its fair value, we record a goodwill impairment loss as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Refer to Note 9. Goodwill and Intangible Assets, net to Consolidated Financial Statements. (h) Restructuring —We enter into various restructuring initiatives, optimization projects, strategic transactions, and other business activities that may include the recognition of exit or disposal costs. Exit or disposal costs are typically costs of termination benefits, such as severance and costs associated with the closure or consolidation of operating facilities. Impairment of property and equipment and other current or long-term assets as a result of a restructuring initiative is recognized as a reduction of the appropriate asset. Refer to Note 6. Restructuring Expenses to Consolidated Financial Statements. (i) Derivatives —Our interest rate swap agreements effectively modify our exposure to interest rate risk by converting floating rate debt to a fixed rate for the term of the swap agreements, reducing the impact of interest rate changes on future interest expense. These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount. Our interest rate swap agreements are designated as cash flow hedges with effectiveness of the hedges assessed at inception and quarterly thereafter. To the extent the hedging relationship is highly effective, the unrealized gains or losses on the swaps are recorded in accumulated other comprehensive loss and reclassified into earnings within interest expense, net when the payments occur. We classify our cash flows related to interest rate swap agreements as operating activities in the Consolidated Statements of Cash Flows. The fair values of the interest rate swaps are reflected as an other asset or liability in the Consolidated Balance Sheets and the change in fair value is reported in accumulated other comprehensive loss. The fair values of the interest rate swaps are estimated as the net present value of projected cash flows based upon forward interest rates at the balance sheet date. We do not offset fair value amounts recognized in our Consolidated Balance Sheets for presentation purposes. Refer to Note 12. Derivative Financial Instruments to Consolidated Financial Statements. (j) Warranties and Guarantees —Expected warranty costs for products sold are recognized based on an estimate of the amount that eventually will be required to settle such obligations. These accruals are based on factors such as past experience, length of the warranty and various other considerations. Costs of product recalls, which may include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the recalled part, are accrued as part of the warranty accrual at the time an obligation becomes probable and can be reasonably estimated. We periodically adjust these provisions to reflect actual experience and other facts and circumstances that impact the status of existing claims. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. (k) Leases —Included in our Consolidated Balance Sheets are certain operating leases that are reported as a component of other assets and other liabilities. The leased assets represent our right to use an underlying asset for the lease term and the lease liabilities represent our obligation to make lease payments arising from the lease. An incremental borrowing rate is used to calculate the present value of the remaining lease payments. Each contract is reviewed at inception to determine if it contains a lease and whether the lease qualifies as an operating or financing lease. For short-term leases (leases with a term of 12 months or less), right-of-use assets or lease liabilities are not recognized in the Consolidated Balance Sheets. Operating leases are expensed on a straight-line basis over the term of the lease. In determining the lease term, we consider the probability of exercising renewal or early termination options. In addition to the monthly base rent, we are often charged separately for common area maintenance, utilities and taxes, which are considered a non-lease component. These non-lease component payments are expensed as incurred and are not included in operating lease assets or liabilities. Right-of-use assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable in accordance with our long-lived asset impairment assessment policy. Refer to Note 10. Leases to Consolidated Financial Statements. (l) Revenue Recognition —We enter into contracts that pertain to products, which are accounted for as separate performance obligations and are typically one year or less in duration. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For product sales, typically each product sold to a customer represents a distinct performance obligation. Revenue is measured as the amount of consideration expected to be received in exchange for our products. We recognize the majority of our revenue from performance obligations outlined in contracts with our customers that are satisfied at a point in time, generally when the product has shipped from our facility and control has transferred to the customer. For certain products, it is industry practice that customers take title to products upon delivery, at which time revenue is then recognized. Allowances for cash discounts, volume rebates and other customer incentive programs, as well as gross customer returns, among others, are recorded as a reduction of sales at the time of sale based upon the estimated future outcome. Cash discounts, volume rebates and other customer incentive programs are based upon certain percentages agreed upon with various customers, which are typically earned by the customer over an annual period. Revenue is adjusted for variable consideration, which includes customer volume rebates and prompt payment discounts. We measure variable consideration by estimating expected outcomes using analysis and inputs based upon anticipated performance, historical data, and current and forecasted information. Customer returns are recorded as a reduction to sales on an actual basis throughout the year and also include an estimate at the end of each reporting period for future customer returns related to sales recorded prior to the end of the period. We generally estimate customer returns based upon the time lag that historically occurs between the sale date and the return date, while also factoring in any new business conditions that might impact the historical analysis such as new product introduction. Measurement of variable consideration is reviewed by management periodically and revenue is adjusted accordingly. We do not have significant financing components. Sales, use and value added taxes collected and remitted to various government authorities were not recognized as revenue and are reported on a net basis. Shipping and handling fees billed to customers are included in cost of goods sold. Refer to Note 5. Revenue Recognition to Consolidated Financial Statements. (m) Royalty —In connection with the Spin-Off, we entered into a 40-year Trademark License Agreement (the “Trademark Agreement”) with Honeywell that authorizes our use of certain licensed trademarks in the operation of Resideo’s business for the advertising, sale and distribution of certain licensed products. In exchange, we pay a royalty fee of 1.5% of net revenue of the licensed products to Honeywell, which is recorded in selling, general and administrative expense on the Consolidated Statements of Operations. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. (n) Reimbursement Agreement —In connection with the Spin-Off we entered into a Reimbursement Agreement, pursuant to which we have an obligation to make cash payments to Honeywell in amounts equal to 90% of payments, which include amounts billed, with respect to certain environmental claims, remediation and, to the extent arising after the Spin-Off, hazardous exposure or toxic tort claims, in each case, including consequential damages (the liabilities) in respect of specified Honeywell properties contaminated through historical business operations prior to the Spin-Off (Honeywell Sites), including the legal and other costs of defending and resolving such liabilities, less 90% of Honeywell’s net insurance receipts relating to such liabilities, and less 90% of the net proceeds received by Honeywell in connection with (i) affirmative claims relating to such liabilities, (ii) contributions by other parties relating to such liabilities and (iii) certain property sales. The amount payable in respect of such liabilities arising in any given year is subject to a cap of $140 million. Reimbursement Agreement expenses are presented within other expense, net in the Consolidated Statements of Operations and within obligations payable under Indemnification Agreements in the Consolidated Balance Sheets. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. (o) Environmental —We accrue costs related to environmental matters when it is probable that we have incurred a liability related to a contaminated site and the amount can be reasonably estimated. Environmental costs for our owned sites are presented within cost of goods sold for operating sites in the Consolidated Statements of Operations. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. (p) Tax Indemnification Agreement —The Tax Matters Agreement provides that Resideo is required to indemnify Honeywell for any taxes (and reasonable expenses) resulting from the failure of the Spin-Off and related internal transactions to qualify for their intended tax treatment under U.S. federal, state and local income tax law, as well as foreign tax law, where such taxes result from (a) breaches of covenants and representations we make and agree to in connection with the Spin-Off, (b) the application of certain provisions of U.S. federal income tax law to these transactions or (c) any other action taken or omission made (other than actions expressly required or permitted by the Separation and Distribution Agreement, the Tax Matters Agreement or other ancillary agreements) after the consummation of the Spin-Off that gives rise to these taxes. As of December 31, 2022 and 2021, we had an indemnity outstanding to Honeywell for past and potential future tax payments of $106 million and $128 million, respectively. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. (q) Research and Development —We conduct research and development activities, which consist primarily of the development of new products and solutions as well as enhancements and improvements to existing products that substantially change the product. Research and development costs primarily relate to employee compensation and consulting fees, which are charged to expense as incurred. (r) Defined Contribution Plans— We sponsor various defined contribution plans with varying terms depending on the country of employment. For the years ended December 31, 2022, 2021 and 2020, we recognized compensation expense related to the defined contribution plans of $22 million, $19 million, and $18 million, respectively. (s) Stock-Based Compensation Plans —The principal awards issued under our stock-based compensation plans, which are described in Note 8. Stock-Based Compensation Plans , are restricted stock units. The cost for such awards is measured at the grant date based on the fair value of the award. Some awards are issued with a market condition, which are valued on the grant date utilizing a Monte Carlo simulation model. Stock options are also issued under our stock-based compensation plans and are valued on the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model and the Monte Carlo simulation model require estimates of future stock price volatility, expected term, risk-free interest rate and forfeitures. For all stock-based compensation, the fair value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods (generally the vesting period of the equity award) and is included in selling, general and administrative expenses in the Consolidated Statements of Operations. Our time-based restricted stock awards are typically subject to graded vesting over a service period; while our performance or market based awards are typically subject to cliff vesting at the end of the service period. Forfeitures are estimated at the time of grant to recognize expense for those awards that are expected to vest and are based on historical forfeiture rates. (t) Pension —We disaggregate the service cost component of net benefit costs and report those costs in the same line item or items in the Consolidated Statements of Operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other non-service components of net benefit costs are required to be presented separately from the service cost component and outside of income from operations. We have recorded the service cost component of pension expense in costs of goods sold and selling, general and administrative expenses based on the classification of the employees it relates to. The remaining components of net benefit costs within pension expense, primarily interest costs and expected return on plan assets, are recorded in other expense, net. We recognize net actuarial gains or losses in excess of 10% of the greater of the fair value of plan assets or the plans’ projected benefit obligation (the “corridor”) annually in the fourth quarter of each year. This adjustment is reported in other expense, net in the Consolidated Statements of Operations. Refer to Note 7. Pension Plans to Consolidated Financial Statements. (u) Foreign Currency Translation —Assets and liabilities of operations outside the U.S. with a functional currency other than U.S. Dollars are translated into U.S. Dollars using year-end exchange rates. Revenue, costs and expenses are translated at the average exchange rates in effect during the year. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss. (v) Income Taxes —Significant judgment is required in evaluating tax positions. We established additional reserves for income taxes when, despite the belief that tax positions are fully supportable, there remain certain positions that do not meet the minimum recognition threshold. The approach for evaluating certain and uncertain tax positions is defined by the authoritative guidance, which determines when a tax position is more likely than not to be sustained upon examination by the applicable taxing authority. In the normal course of business, the Company and our subsidiaries are examined by various federal, state and foreign tax authorities. We regularly assess the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of our provision for income taxes. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability and deferred taxes in the period in which the facts that give rise to a change in estimate become known. Refer to Note 17. Income Taxes to Consolidated Financial Statements. (w) Accounting Pronouncements —We consider the applicability and impact of all recent accounting standards updates issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on our Consolidated Financial Statements. Adopted Accounting Pronouncements In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This guidance requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASU No. 2014-19, Revenue from Contracts with Customers (Topic 606) , as if it had originated the contracts. Deferred revenue acquired in a business combination is no longer required to be measured at its fair value, which had historically resulted in a deferred revenue impairment at the date of acquisition. We early adopted this ASU as of March 31, 2022, on a prospective basis, as permitted by the ASU. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements. Recent Accounting Pronouncements In September 2022, the FASB issued ASU No. 2022-04, Liabilities-Supplier Finance Programs (Topic 405): Disclosure of Supplier Finance Program Obligations. This guidance enhances transparency about an entity’s use of supplier finance programs by requiring quarterly and annual disclosures about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts annually, and a description of where in the financial statements outstanding amounts are presented. The guidance is effective for fiscal years beginning after December 15, 2022. We are currently assessing the impact of adoption on our Consolidated Financial Statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued because of reference rate reform. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued Accounting Standards Update 2021-01, Reference Rate Reform (Topic 848): Scope , which clarified the scope and application of the original guidance. These ASUs are applicable for the A&R Senior Credit Facilities and Swap Agreements, which use LIBOR as a reference rate. The A&R Senior Credit Facilities include a transition clause to a new reference rate in the event LIBOR is discontinued and Swap Agreements will be amended to match the new reference rate. We have evaluated the potential impact of adopting this standard and do not expect it to have a material impact on our financial statements. Refer to Note 11. Long-Term Debt and Note 12. Derivative Financial Instruments |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions 2022 Acquisitions Teknique Limited —On December 23, 2022, we acquired 100% of the outstanding equity of Teknique, a niche producer of edge-based, artificial intelligence-enabled video camera development and solutions. The Company reports Teknique’s results within the Products and Solutions segment. Purchase consideration includes cash and a note payable with the former owner. We have made a preliminary purchase price allocation that is subject to change as additional information is obtained. Electronic Custom Distributors, Inc. —On July 5, 2022, we acquired 100% of the outstanding equity of Electronic Custom Distributors, Inc., a regional distributor of residential audio, video, automation, security, wire and telecommunication products. The Company reports Electronic Customer Distributors, Inc. results within the ADI Global Distribution segment. We have made a preliminary purchase price allocation that is subject to change as additional information is obtained. First Alert —On March 31, 2022, we acquired 100% of the issued and outstanding capital stock of First Alert, a leading provider of home safety products, and its results are included within the Products and Solutions segment. This acquisition expands and leverages our footprint in the home with complementary smoke and carbon monoxide detection home safety products and fire suppression products. We preliminarily determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of the fair value of the acquisition consideration over such fair values, as follows: (in millions) Assets acquired: Cash $ 2 Accounts receivable 72 Inventories 117 Property, plant and equipment 82 Goodwill (1) 86 Other intangible assets 349 Other assets 33 Total assets acquired 741 Liabilities assumed: Accounts payable 57 Other liabilities 69 Total liabilities assumed 126 Net assets acquired $ 615 (1) Goodwill from this acquisition is partially deductible for tax purposes. Refer to Note 9. Goodwill and Intangible Assets, net to the Consolidated Financial Statements. First Alert contributed $341 million in net revenue for the year ended December 31, 2022, which has been included within our Consolidated Statements of Operations. Pro forma results of operations have not been presented, as the impact on our consolidated financial results was not material. We expensed $11 million of costs related to the acquisition of First Alert during the year ended December 31, 2022. These costs, which consist primarily of advisory, insurance, and legal fees, are included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. We have made a purchase price allocation that is subject to change as additional information is obtained. Arrow Wire and Cable, Inc. —On February 14, 2022, we acquired 100% of the outstanding equity of Arrow Wire and Cable, Inc., a leading regional distributor of data communications, connectivity and security products. The business is included within the ADI Global Distribution segment and is expected to strengthen our global distribution portfolio in the data communications category with an assortment of copper and fiber cabling and connectivity, connectors, racking solutions, and network equipment. We have made a purchase price allocation that is subject to change as additional information is obtained. 2021 Acquisitions |
Segment Financial Data
Segment Financial Data | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Financial Data | Segment Financial Data The Company’s segment information is evaluated by our Chief Executive Officer, who is also the chief operating decision maker and is consistent with how management reviews and assesses the performance of the business as well as makes investing and resource allocation decisions. We monitor our operations through two reportable segments: Products and Solutions and ADI Global Distribution, and report Corporate separately. These operating segments follow the same accounting policies used for our Consolidated Financial Statements. We evaluate a segment’s performance on a U.S. GAAP basis, primarily operating income before corporate expenses. Products and Solutions —The Products and Solutions business is a leading global manufacturer and developer of technology-driven products and components that provide critical comfort, energy management, and safety and security solutions to over 150 million homes globally. Our offerings include temperature and humidity control, thermal water and air solutions, as well as security panels, sensors, peripherals, wire and cable, communications devices, video cameras, other home-related lifestyle convenience solutions, cloud infrastructure, installation and maintenance tools, and related software. ADI Global Distribution —The ADI Global Distribution business is a leading wholesale distributor of low-voltage security products including security and life safety, access control and video products and participates significantly in the broader related markets of smart home, power, audio, ProAV, networking, communications, wire and cable, and data communications. Corporate —Corporate expenses include expenses related to the Corporate office as well as supporting the operating segments, but do not relate directly to revenue-generating activities primarily including unallocated stock-based compensation expenses, unallocated pension expense, restructuring expenses, acquisition-related costs, and other expenses related to executive, legal, finance, tax, treasury, human resources, IT, strategy, communications, and corporate travel expenses. Additional unallocated amounts primarily include non-operating items such as Reimbursement Agreement expense, interest income, interest expense, and other income (expense). Summary financial data attributable to the segments for the periods indicated is as follows: Years Ended December 31, (in millions) 2022 2021 2020 Net revenue Products and Solutions $ 2,783 $ 2,468 $ 2,121 ADI Global Distribution 3,587 3,378 2,950 Total net revenue $ 6,370 $ 5,846 $ 5,071 Years Ended December 31, (in millions) 2022 2021 2020 Income from operations Products and Solutions $ 527 $ 541 $ 407 ADI Global Distribution 313 268 194 Corporate (229) (250) (290) Total income from operations $ 611 $ 559 $ 311 Years Ended December 31, (in millions) 2022 2021 2020 Depreciation and amortization Products and Solutions $ 69 $ 65 $ 63 ADI Global Distribution 14 11 12 Corporate 11 12 11 Total depreciation and amortization $ 94 $ 88 $ 86 Years Ended December 31, (in millions) 2022 2021 2020 Capital expenditures Products and Solutions $ 55 $ 37 $ 41 ADI Global Distribution 29 24 15 Corporate 1 2 14 Total capital expenditures $ 85 $ 63 $ 70 The Company’s chief operating decision maker does not use segment assets information to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregated Revenue We have two operating segments, Products and Solutions and ADI Global Distribution. Disaggregated revenue information for Products and Solutions is presented by product grouping while ADI Global Distribution is presented by region. Beginning January 1, 2022, the Products and Solutions operating segment further disaggregated the Comfort product grouping into Air and Water and Residential Thermal Solutions is now referenced as Energy. As of April 1, 2022, the First Alert business is included in the Security and Safety grouping. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For product sales, typically each product sold to a customer represents a distinct performance obligation. We recognize the majority of our revenue from performance obligations outlined in contracts with our customers that are satisfied at a point in time. Approximately 2% of our revenue is satisfied over time. As of December 31, 2022 and 2021, contract assets and liabilities were not material. The timing of satisfaction of performance obligations does not significantly vary from the typical timing of payment. For some contracts, we may be entitled to receive an advance payment. We have applied the practical expedient to not disclose the value of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which it recognizes revenue in proportion to the amount it has the right to invoice for services performed. Revenue presented by business line and geographic location, as we believe this presentation best depicts how the nature, amount, timing and uncertainty of net revenue and cash flows are affected by economic factors, are as follows: Years Ended December 31, (in millions) 2022 2021 2020 Products and Solutions Air $ 953 $ 858 $ 761 Safety and Security 913 667 561 Energy 595 594 505 Water 322 349 294 Total Products and Solutions 2,783 2,468 2,121 ADI Global Distribution U.S. and Canada 3,087 2,814 2,427 EMEA (1) 474 523 480 APAC (2) 26 41 43 Total ADI Global Distribution 3,587 3,378 2,950 Total net revenue $ 6,370 $ 5,846 $ 5,071 (1) EMEA represents Europe, the Middle East and Africa. (2) APAC represents Asia and Pacific countries. |
Restructuring Expenses
Restructuring Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Expenses | Restructuring Expenses 2022 Restructuring Programs During 2022, we executed certain restructuring programs to lower costs, increase margins and position us for growth (“2022 Plan”). For the year ended December 31, 2022, the Company recognized restructuring and impairment expenses of $35 million ($29 million in the Product and Solutions segment, $2 million in the ADI Global Distribution segment and $4 million in the Corporate segment), related to employee termination cost and the impairment of certain long-lived assets, classified in the caption restructuring and impairment expenses, net on the Consolidated Statements of Operations. We expect to fully execute our restructuring initiatives and programs over the next 12-24 months, and we may incur future additional restructuring expenses associated with these plans. We are unable at this time to make a good faith determination of cost estimates, or ranges of cost estimates, associated with future phases of the plans or the total costs we may incur in connection with these plans. Restructuring Programs Initiated Prior to 2022 During 2021, there were no new restructuring programs. During 2019, certain restructuring actions were implemented with the goal of right-sizing the business. Restructuring expenses for the year ended December 31, 2020 were $19 million in the Product and Solutions segment, $6 million in the ADI Global Distribution segment $15 million in the Corporate segment. Restructuring expenses for all periods are primarily related to severance. The following table summarizes the status of our restructuring expenses included within accrued liabilities on the Consolidated Balance Sheets. December 31, (in millions) 2022 2021 2020 Beginning of year $ 9 $ 24 $ 19 Charges 26 — 40 Usage (5) (11) (35) Other (3) (4) — End of year $ 27 $ 9 $ 24 |
Pension Plans
Pension Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Pension Plans | Pension Plans We sponsor multiple funded and unfunded U.S. and non-U.S. defined benefit pension plans. Pension benefits for many of our U.S. employees are provided through non-contributory, qualified and non-qualified defined benefit plans. We also sponsor defined benefit pension plans which cover non-U.S. employees, in certain jurisdictions, principally Germany, Austria , Belgium, France, India, Switzerland, and the Netherlands. The following tables summarize the balance sheet impact, including the benefit obligations, assets and funded status associated with the pension plans: U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2020 2022 2021 2020 Change in benefit obligation: Benefit obligation at beginning of year $ 348 $ 374 $ 344 $ 141 $ 161 $ 137 Service cost 7 7 7 5 7 7 Interest cost 11 10 11 2 1 1 Actuarial (gains) losses (66) (20) 38 (45) (18) 6 Net benefits paid (18) (5) (4) — — — Settlements (1) (18) (22) — (1) (6) Other — — — 1 1 2 Foreign currency translation — — — (8) (10) 14 Benefit obligation at end of year 281 348 374 96 141 161 Change in plan assets: Fair value of plan assets at beginning of year 342 340 331 32 28 27 Actual return on plan assets (62) 25 35 (6) 2 — Employer contributions 1 — 1 3 3 2 Net benefits paid (18) (5) (4) — 1 — Settlements (1) (18) (22) — (1) (6) Other — — (1) (1) — 3 Foreign currency translation — — — (1) (1) 2 Fair value of plan assets at end of year 262 342 340 27 32 28 Funded status of plans (non-current) $ (19) $ (6) $ (34) $ (69) $ (109) $ (133) The amount recognized in accrued liabilities on the Consolidated Balance Sheets were $2 million and $1 million at December 31, 2022 and 2021, respectively. The amounts recognized in other liabilities on the Consolidated Balance Sheets were $86 million and $114 million at December 31, 2022 and 2021, respectively. The benefit obligation generated a global net actuarial gain of $111 million for the year ended December 31, 2022. A global increase in discount rates over the course of the year was the main driver, generating a total gain of $140 million across all plans. These gains were partially offset by experience losses amounting to $11 million globally, demographic assumptions losses of $7 million (driven primarily by the U.S. Plans), and losses from other changes in other assumptions of $10 million. Actual return on plan assets for the year ended December 31, 2022 was lower than expected driven by the global drop in equities resulting in an asset loss of $85 million. The loss was primarily related to the U.S., Switzerland, and the Netherlands, which experienced losses of $78 million, $3 million and $3 million, respectively. Amounts recognized in accumulated other comprehensive loss associated with pension plans at December 31, 2022 and 2021 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2022 2021 Prior service (credit) cost $ — $ (2) $ 2 $ — Net actuarial loss (gain) 13 2 (8) (2) Net amount recognized $ 13 $ — $ (6) $ (2) The estimated actuarial losses and prior service costs that will be amortized from accumulated other comprehensive loss into net periodic pension cost over the next fiscal year are immaterial. The components of net periodic benefit (income) cost for the years ended December 31, 2022, 2021 and 2020 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2020 2022 2021 2020 Net periodic benefit (income) cost Service cost $ 7 $ 7 $ 7 $ 5 $ 7 $ 7 Interest cost 11 10 11 2 1 1 Expected return on plan assets (17) (16) (17) (1) (1) (1) Amortization of prior service credit (1) (1) (1) — — — Amortization of actuarial (gains) losses — — — (33) (3) 6 Other — — 3 — — — Net periodic benefit (income) cost $ — $ — $ 3 $ (27) $ 4 $ 13 The components of net periodic benefit cost other than the service cost are included in other expense, net in the Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2020 2022 2021 2020 Other changes in plan assets and benefits obligations recognized in other comprehensive loss (income) Actuarial (gains) losses $ (66) $ (20) $ 38 $ (45) $ (18) $ 6 Prior service costs arising during the year — — — 2 — — Excess return on plan assets (1) 79 (9) (17) 6 — — Actuarial (gains) losses recognized during the year — — (2) 33 3 (6) Other — 1 — — (1) 1 Total recognized in other comprehensive loss (income) 13 (28) 19 (4) (16) 1 Total recognized in net periodic benefit (income) cost and other comprehensive loss (income) $ 13 $ (28) $ 22 $ (31) $ (12) $ 14 (1) Represents actual return on plan assets in excess of the expected return. Significant actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for benefit plans are presented in the following table as weighted averages. U.S. Plans Non-U.S. Plans 2022 2021 2020 2022 2021 2020 Actuarial assumptions used to determine benefit obligations as of December 31: Discount rate 3.1 % 3.0 % 2.7 % 1.2 % 1.2 % 0.7 % Interest crediting rate 6.0 % 6.0 % 6.0 % 1.5 % 1.5 % 1.5 % Expected annual rate of compensation increase 3.2 % 3.2 % 3.5 % 2.4 % 2.4 % 2.4 % Actuarial assumptions used to determine net periodic benefit (income) cost for the year ended December 31: Discount rate - benefit obligation 5.2 % 2.7 % 3.3 % 3.4 % 0.7 % 1.1 % Interest crediting rate 6.0 % 6.0 % 6.0 % 2.5 % 1.5 % 1.5 % Expected rate of return on plan assets 5.3 % 4.7 % 5.4 % 1.3 % 2.3 % 2.7 % Expected annual rate of compensation increase 3.5 % 3.5 % 3.4 % 2.6 % 2.4 % 2.4 % The discount rate for the U.S. pension plans reflects the current rate at which the associated liabilities could be settled at the measurement date of December 31. To determine discount rates for the U.S. pension plans, we use a modeling process that involves matching the expected cash outflows of its benefit plans to a yield curve constructed from a portfolio of high-quality, fixed income debt instruments. We use the single weighted-average yield of this hypothetical portfolio as a discount rate benchmark. The expected rate of return on U.S. plan assets of 5.3% is a long-term rate based on historical plan asset returns over varying long-term periods combined with current market conditions and broad asset mix considerations. We review the expected rate of return on an annual basis and revises it as appropriate. For non-U.S. benefit plans, actuarial assumptions reflect economic and market factors relevant to each country. The following amounts relate to pension plans with accumulated benefit obligations exceeding the fair value of plan assets at December 31, 2022 and 2021. U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2022 2021 Projected benefit obligation $ 281 $ 3 $ 96 $ 139 Accumulated benefit obligation $ 278 $ 2 $ 86 $ 124 Fair value of plan assets $ 262 $ — $ 27 $ 31 The following amounts relate to pension plans with projected benefit obligations exceeding the fair value of the plan assets at December 31, 2022 and 2021. U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2022 2021 Projected benefit obligation $ 281 $ 348 $ 96 $ 141 Accumulated benefit obligation $ 278 $ 337 $ 87 $ 125 Fair value of plan assets $ 262 $ 342 $ 27 $ 32 We utilized a third-party investment management firm to serve as our Outsourced Chief Investment Officer; however, we have appointed an internal fiduciary committee that monitors adherence to the investment guidelines the firm will follow. We employ an investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities and plan funded status. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value and small and large capitalizations. Other assets such as real estate and hedge funds may be used to improve portfolio diversification. The non-U.S. investment policies are different for each country as local regulations, funding requirements, and financial and tax considerations are part of the funding and investment allocation process in each country. A majority of the U.S. pension plan assets as of December 31, 2022 do not have published pricing and are valued using Net Asset Value (“NAV”), which approximates fair value. NAV and fair value by asset category are as follows for December 31, 2022 and 2021: U.S. Plans 2022 2021 (in millions) NAV NAV Cash and cash equivalents $ 6 $ 4 Equity 45 95 Investment funds — 16 Government bonds 21 39 Corporate bonds 132 153 Real estate / property 29 35 Other 29 — Total assets at fair value $ 262 $ 342 The fair values of the non-U.S. pension plan assets as by asset category are as follows for December 31, 2022 and 2021: Non-U.S. Plans 2022 2021 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Equity $ 1 $ 1 $ — $ — $ 1 $ 1 $ — $ — Government bonds 1 — 1 — 1 — 1 — Insurance contracts 6 — — 6 10 — — 10 Other 19 — — 19 20 — — 20 Total assets at fair value $ 27 $ 1 $ 1 $ 25 $ 32 $ 1 $ 1 $ 30 Refer to Note 13. - Fair Value to Consolidated Financial Statements. The following table summarizes changes in the fair value of Level 3 assets for Non-U.S. plans: (in millions) Non-U.S. Plans Balance at December 31, 2019 $ 24 Return on plan assets — Purchases, sales and settlements, net (1) Other 3 Balance at December 31, 2020 26 Return on plan assets 1 Purchases, sales and settlements, net 4 Other (1) Balance at December 31, 2021 30 Return on plan assets (3) Other (2) Balance at December 31, 2022 $ 25 Government bonds and Corporate bonds held as of December 31, 2022 and 2021 are valued either by using pricing models, bids provided by brokers or dealers, quoted prices of securities with similar characteristics or discounted cash flows and as such include adjustments for certain risks that may not be observable such as credit and liquidity risks. Other investments as of December 31, 2022 and 2021 and insurance contracts are classified as Level 3 as there are neither quoted prices nor other observable inputs for pricing. Insurance contracts are issued by insurance companies and are valued at cash surrender value, which approximates the contract fair value. Other investments consist of a collective pension foundation that is valued and allocated by the plan administrator. We utilize the services of retirement and investment consultants to actively manage the assets of our pension plans. We have established asset allocation targets and investment guidelines based on the guidance of the consultants. Our target allocations are 64% fixed income investments, 22% global equity investments, 7% global real estate investments and 7% cash and other investments. Our general funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards. In 2022, we were not required to make contributions to the U.S. pension plans, however we made approximately $1 million in contributions. There is not a requirement to make any contributions to the U.S. pension plans in 2023. In 2022, contributions of $3 million were made to the non-U.S. pension plans to satisfy regulatory funding requirements. In 2023, we expect to make contributions of cash and/or marketable securities of approximately $3 million to the non-U.S. pension plans to satisfy regulatory funding standards. Contributions for both the U.S. and non-U.S. pension plans do not reflect benefits paid directly from our assets. Benefit payments, including amounts to be paid from our assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: (in millions) U.S. Plans Non-U.S. Plans 2023 $ 22 $ 3 2024 $ 22 $ 3 2025 $ 22 $ 3 2026 $ 22 $ 3 2027 $ 22 $ 3 2028-2032 $ 105 $ 26 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation Plans | Stock-Based Compensation Plans The Stock Incentive Plan, which consists of the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates and the 2018 Stock Incentive Plan for Non-Employee Directors of Resideo Technologies, Inc., provides for the grant of stock options, stock appreciation rights, restricted stock units, restricted stock and other stock-based awards. The maximum aggregate number of shares of our common stock that may be granted under the Stock Incentive Plan is 16 million with 4 million shares of our common stock available to be granted at December 31, 2022. Summary of Stock-Based Compensation Expense Our stock-based compensation expense, net of tax was $48 million, $36 million and $30 million for the years ended December 31, 2022, 2021 and 2020. Restricted Stock Unit Activity Restricted stock units (“RSUs”) are issued to certain key employees and to non-employee directors. These awards entitle the holder to receive one share of our common stock for each unit upon vesting. RSUs typically become fully vested over a three-year period following the grant date. Performance stock units (“PSUs”) are issued to certain key employees. These awards entitle the holder to receive a specified number of our common stock, dependent on our financial metrics or market conditions, for each unit when the units vest. PSUs typically become vested at the end of a three-year period and are payable in our common stock upon vesting. For the years ended December 31, 2022, 2021 and 2020, PSUs were issued with the shares awarded per unit being based on the difference in performance between the total stockholders’ return of our common stock against that of the S&P 400 Industrials Index. The fair values estimated from the Monte Carlo simulation for PSUs issued during the years ended December 31, 2022, 2021 and 2020 were calculated using the following assumptions: Years Ended December 31, 2022 2021 2020 Expected volatility 59.01 % 47.43 % 33.70 % Risk-free interest rate % 1.58 % 0.20 % 0.80 % Expected term (in years) 2.89 2.86 2.79 Dividend yield (1) — % — % — % (1) We have never declared or paid any cash dividends on our common stock and we currently do not intend to pay cash dividends. The following table summarizes activity related to the Stock Incentive Plan for employees and non-employee directors during the years ended December 31, 2022, 2021 and 2020: PSUs RSUs (in whole dollars) Number of Weighted Number of Weighted Non-vested as of January 1, 2020 276,281 $ 24.33 3,518,250 $ 23.05 Granted 795,099 6.33 2,262,676 10.55 Vested — — (921,060) 21.07 Forfeited (158,580) 16.06 (572,902) 19.27 Non-vested as of December 31, 2020 912,800 $ 10.09 4,286,964 $ 17.38 Granted 500,227 42.98 1,142,310 27.39 Vested — — (1,714,810) 19.27 Forfeited (95,467) 17.20 (237,331) 20.44 Non-vested as of December 31, 2021 1,317,560 $ 22.06 3,477,133 $ 19.52 Granted 672,453 36.11 1,799,632 22.69 Vested (155,803) 24.20 (1,664,167) 20.46 Forfeited (111,830) 23.91 (201,636) 21.89 Non-vested as of December 31, 2022 1,722,380 $ 27.23 3,410,962 $ 20.57 As of December 31, 2022, unrecognized compensation cost related to unvested awards granted to employees and non-employee directors under the Stock Incentive Plan is as follows: (in millions) Unrecognized Compensation Cost Weighted-Average Period RSUs $ 23 1 year, 5 months PSUs 18 1 year, 9 months Total unrecognized compensation cost $ 41 The fair value of shares vested follows: Years Ended December 31, (in millions) 2022 2021 2020 RSUs $ 36 $ 48 $ 9 PSUs (1) 4 NA NA Total $ 40 $ 48 $ 9 (1) NA = Not applicable; there were no PSUs that vested during the years ended December 31, 2021 and 2020. Stock Option Activity Stock option awards entitle the holder to purchase shares of our common stock at a specific price when the options vest. Stock options typically vest over 3 years from the date of grant and expire 7 years from the grant date. There were no stock options granted to employees during the year ended December 31, 2022. The fair value of stock options was calculated using the following assumptions in the Black-Scholes model: Years Ended December 31, 2021 2020 Expected stock price volatility 34% 31% - 37% Expected term of options 5 years 4.5 years Expected dividend yield (1) —% —% Risk-free interest rate 0.77% 0.25% - 1.41% (1) We have never declared or paid any cash dividends on our common stock and we currently do not intend to pay cash dividends. The aggregate intrinsic value disclosed below represents the total intrinsic value (the difference between the fair market value of our common stock as of December 31, 2022 and the exercise price, multiplied by the number of in-the-money service-based common stock options) that would have been received by the option holders had all option holders exercised their options on December 31, 2022. This amount is subject to change based on changes to the fair market value of our common stock. The following table summarizes stock option activity related to the Stock Incentive Plan: Stock Options (in whole dollars) Number of Weighted Weighted Aggregate Stock Options outstanding as of January 1, 2020 990,254 $ 24.36 6.0 years $ — Granted 1,083,665 9.17 Forfeited (348,696) 18.39 Exercised — — Stock Options outstanding as of December 31, 2020 1,725,223 $ 15.98 4.9 years $ 12 Granted 150,000 25.48 Forfeited (152,831) 16.47 Exercised (376,424) 21.62 3 Stock Options outstanding as of December 31, 2021 1,345,968 $ 15.41 4.9 years $ 14 Granted — — Forfeited (7,267) 24.39 Exercised (21,052) 22.36 — Stock Options outstanding as of December 31, 2022 1,317,649 $ 15.25 4.0 years $ 6 Vested and expected to vest at December 31, 2022 1,258,797 $ 15.08 3.9 years $ 6 Exercisable at December 31, 2022 750,887 $ 17.26 3.4 years $ 2 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net Our goodwill balance and changes in carrying value by segment follows: (in millions) Products and Solutions ADI Global Distribution Total Balance at December 31, 2020 $ 2,037 $ 654 $ 2,691 Acquisitions — 5 5 Divestiture (2) — (2) Impact of foreign currency translation (25) (8) (33) Balance at December 31, 2021 2,010 651 2,661 Acquisitions 94 15 109 Divestitures — (4) (4) Impact of foreign currency translation (32) (10) (42) Balance at December 31, 2022 $ 2,072 $ 652 $ 2,724 The following table is a summary of the net carrying amount of intangible assets as of December 31: December 31, (in millions) 2022 2021 Intangible assets subject to amortization $ 295 $ 120 Indefinite-lived intangible assets 180 — Total intangible assets $ 475 $ 120 Intangible assets subject to amortization for the years ended December 31, consisted of the following: December 31, 2022 (in millions) Gross Accumulated Net Useful Lives Weighted Average Amortization Patents and technology $ 65 $ (28) $ 37 3 - 10 years 10 years Customer relationships 313 (117) 196 7 - 15 years 14 years Trademarks 14 (8) 6 10 years 10 years Software 175 (119) 56 2 - 7 years 6 years Total intangible assets $ 567 $ (272) $ 295 December 31, 2021 (in millions) Gross Accumulated Net Useful Lives Weighted Average Amortization Patents and technology $ 31 $ (23) $ 8 3 - 10 years 9 years Customer relationships 162 (106) 56 7 - 15 years 14 years Trademarks 14 (8) 6 10 years 10 years Software 162 (112) 50 2 - 7 years 6 years Total intangible assets $ 369 $ (249) $ 120 Intangible assets are amortized on a straight-line basis or a basis consistent with the expected future cash flows over their expected useful lives. Intangible assets amortization expense was $35 million, $30 million and $30 million during the years ended December 31, 2022, 2021 and 2020, respectively. The estimated aggregate amortization on these intangible assets for each of the next five years as of December 31, 2022, follows: (in millions) Amortization Expense 2023 $ 39 2024 $ 37 2025 $ 36 2026 $ 31 2027 $ 25 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases We are party to operating leases for the majority of our manufacturing sites, offices, engineering and lab sites, stocking locations, warehouses, automobiles, and certain equipment. Certain real estate leases include variable rental payments, which adjust periodically based on inflation. Other variable amounts paid under operating leases, such as taxes and common area maintenance, are charged to selling, general and administrative expenses as incurred. Generally, lease agreements do not contain any material residual value guarantees or material restrictive covenants. Payments arising from operating lease activity, as well as variable and short-term lease payments not included within the operating lease liability, are included as operating activities of our Consolidated Statements of Cash Flows. Operating lease payments representing costs to ready an asset for its intended use (i.e. leasehold improvements) are represented within investing activities within our Consolidated Statements of Cash Flows. The operating lease expense follows: Years Ended December 31, (in millions) 2022 2021 2020 Operating lease cost: Selling, general and administrative expenses $ 50 $ 46 $ 44 Cost of goods sold 19 17 17 Total operating lease costs $ 69 $ 63 $ 61 Total operating lease costs include variable lease costs of $19 million, $17 million and $16 million for the years ended December 31, 2022, 2021, and 2020, respectively. The following table summarizes the carrying amounts of our operating leased assets and liabilities along with key inputs used to discount our lease liabilities: December 31, (in millions, except weighted-average data) Financial Statement Line Item 2022 2021 Operating lease assets Other assets $ 191 $ 141 Operating lease liabilities - current Accrued liabilities $ 37 $ 32 Operating lease liabilities - non-current Other liabilities $ 166 $ 120 Weighted-average remaining term 6.81 years 6.04 years Weighted-average incremental borrowing rate 5.78 % 5.42 % The following table summarizes our future minimum lease payments under our non-cancelable leases as of December 31, 2022: (in millions) Commitments 2023 $ 47 2024 40 2025 35 2026 32 2027 27 Thereafter 70 Total lease payments 251 Less: Imputed interest 48 Present value of operating lease liabilities $ 203 Supplemental cash flow information related to operating leases follows: Years Ended December 31, (in millions) 2022 2021 2020 Cash paid for operating leases $ 33 $ 33 $ 30 Non-cash activities: operating lease assets obtained in exchange for new operating lease liabilities (1) $ 97 $ 46 $ 26 (1) Includes $25 million of operating lease assets acquired from current year acquisitions. Refer to Note 3. Acquisitions to Consolidated Financial Statements. As of December 31, 2022, we have additional operating leases that have not yet commenced. Obligations under these leases are not material. Additionally, as a lessor, we lease all or a portion of certain owned properties. Rental income for the years ended December 31, 2022, 2021 and 2020 was not material. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt is comprised of the following: December 31, (in millions) 2022 2021 4.000% senior notes due 2029 $ 300 $ 300 Variable rate A&R Term B Facility 1,131 943 Gross debt 1,431 1,243 Less: current portion of long-term debt (12) (10) Less: unamortized deferred financing costs (15) (13) Total long-term debt $ 1,404 $ 1,220 Aggregate required principal payments on long-term debt outstanding at December 31, 2022, follows: (in millions) Payments 2023 $ 12 2024 12 2025 12 2026 11 2027 11 Thereafter 1,373 Total $ 1,431 A&R Senior Credit Facilities On February 12, 2021, we entered into an A&R Credit Agreement with JP Morgan Chase Bank N.A. as administrative agent. This agreement effectively replaced our previous senior secured credit facilities. The A&R Credit Agreement provides for an (i) initial seven - year senior secured Term B loan facility in an aggregate principal amount of $950 million, which was further amended on March 28, 2022 to include an additional aggregate principal amount of $200 million in term loans (the “A&R Term B Facility”), (ii) a five - year senior secured revolving credit facility in an aggregate principal amount of $500 million (the “A&R Revolving Credit Facility” and, together with the A&R Term B Facility, the “A&R Senior Credit Facilities”). We are obligated to make quarterly principal payments throughout the term of the A&R Term B Facility according to the amortization provisions in the A&R Credit Agreement. In addition to paying interest on outstanding borrowings under the A&R Revolving Credit Facility, we are required to pay a quarterly commitment fee based on the unused portion of the A&R Revolving Credit Facility. Borrowings under the A&R Credit Agreement can be prepaid at our option without premium or penalty. Up to $75 million may be utilized under the A&R Revolving Credit Facility for the issuance of letters of credit to us or any our subsidiaries. The A&R Senior Credit Facilities are subject to an interest rate and interest period which we will elect. If we choose to make a base rate borrowing on an overnight basis, the interest rate will be based on the highest of (1) the rate of interest last quoted by The Wall Street Journal as the “prime rate” in the U.S., (2) the greater of the federal funds effective rate and the overnight bank funding rate, plus 0.5% and (3) the one month adjusted LIBOR rate, plus 1.00% per annum. For the A&R Term Loan B Facility, the applicable LIBOR rate will not be less than 0.50% per annum. The applicable margin for the A&R Term B Facility is 2.25% per annum (for LIBOR loans) and 1.25% per annum (for base rate loans). The applicable margin for the A&R Revolving Credit Facility varies from 2.25% per annum to 1.75% per annum (for LIBOR loans) and 1.25% to 0.75% per annum (for base rate loans) based on the our leverage ratio. The A&R Credit Agreement contains certain financial maintenance covenants and affirmative and negative covenants customary for financings of this type. All obligations under the A&R Senior Credit Facilities are unconditionally guaranteed jointly and severally by us and substantially all of the direct and indirect wholly owned subsidiaries of ours that are organized under the laws of the U.S. (collectively, the “Guarantors”). The A&R Senior Credit Facilities are secured on a first priority basis by the equity interests of each direct subsidiary of ours, as well as the tangible and intangible personal property and material real property of ours and each of the Guarantors. At December 31, 2022 and 2021, the weighted average interest rate for the A&R Term B Facility was 6.78% and 2.75%, respectively and there were no borrowings and no letters of credit issued under the A&R Revolving Credit Facility. As of December 31, 2022, we were in compliance with all covenants related to the A&R Credit Agreement and Senior Notes due 2029. We entered into certain interest rate swaps agreements in 2021 to effectively convert a portion of our variable interest rate debt to fixed rate debt. Refer to Note 12. Derivative Financial Instruments to Consolidated Financial Statements. Senior Notes due 2029 On August 26, 2021, we issued $300 million in principal amount of 4.000% Senior Notes due 2029. The Senior Notes due 2029 are senior unsecured obligations of Resideo guaranteed by Resideo’s existing and future domestic subsidiaries and rank equally with all of Resideo’s senior unsecured debt and senior to all of Resideo’s subordinated debt. We may, at our option, redeem the Senior Notes due 2029 in whole (at any time) or in part (from time to time), at varying prices based on the timing of the redemption. The Senior Notes due 2029 limit us and our restricted subsidiaries’ ability to, among other things, incur additional secured indebtedness and issue preferred stocks; enter into certain sale and leaseback transactions; incur liens; and consolidate, merge or sell all or substantially all of their assets. These covenants are subject to a number of limitations and exceptions. Additionally, upon certain events constituting a change of control together with a ratings downgrade, the holders of the Senior Notes due 2029 have the right to require us to offer to repurchase the Senior Notes due 2029 at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, to (but not including) the date of purchase. Senior Notes Redemptions As a result of the redemption of the 6.125% senior unsecured notes (the “Senior Notes due 2026”) and the execution of the A&R Credit Agreement, debt extinguishment costs of $41 million were incurred and recorded in other expense, net for the year ended December 31, 2021. |
Long-Term Debt_2
Long-Term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt is comprised of the following: December 31, (in millions) 2022 2021 4.000% senior notes due 2029 $ 300 $ 300 Variable rate A&R Term B Facility 1,131 943 Gross debt 1,431 1,243 Less: current portion of long-term debt (12) (10) Less: unamortized deferred financing costs (15) (13) Total long-term debt $ 1,404 $ 1,220 Aggregate required principal payments on long-term debt outstanding at December 31, 2022, follows: (in millions) Payments 2023 $ 12 2024 12 2025 12 2026 11 2027 11 Thereafter 1,373 Total $ 1,431 A&R Senior Credit Facilities On February 12, 2021, we entered into an A&R Credit Agreement with JP Morgan Chase Bank N.A. as administrative agent. This agreement effectively replaced our previous senior secured credit facilities. The A&R Credit Agreement provides for an (i) initial seven - year senior secured Term B loan facility in an aggregate principal amount of $950 million, which was further amended on March 28, 2022 to include an additional aggregate principal amount of $200 million in term loans (the “A&R Term B Facility”), (ii) a five - year senior secured revolving credit facility in an aggregate principal amount of $500 million (the “A&R Revolving Credit Facility” and, together with the A&R Term B Facility, the “A&R Senior Credit Facilities”). We are obligated to make quarterly principal payments throughout the term of the A&R Term B Facility according to the amortization provisions in the A&R Credit Agreement. In addition to paying interest on outstanding borrowings under the A&R Revolving Credit Facility, we are required to pay a quarterly commitment fee based on the unused portion of the A&R Revolving Credit Facility. Borrowings under the A&R Credit Agreement can be prepaid at our option without premium or penalty. Up to $75 million may be utilized under the A&R Revolving Credit Facility for the issuance of letters of credit to us or any our subsidiaries. The A&R Senior Credit Facilities are subject to an interest rate and interest period which we will elect. If we choose to make a base rate borrowing on an overnight basis, the interest rate will be based on the highest of (1) the rate of interest last quoted by The Wall Street Journal as the “prime rate” in the U.S., (2) the greater of the federal funds effective rate and the overnight bank funding rate, plus 0.5% and (3) the one month adjusted LIBOR rate, plus 1.00% per annum. For the A&R Term Loan B Facility, the applicable LIBOR rate will not be less than 0.50% per annum. The applicable margin for the A&R Term B Facility is 2.25% per annum (for LIBOR loans) and 1.25% per annum (for base rate loans). The applicable margin for the A&R Revolving Credit Facility varies from 2.25% per annum to 1.75% per annum (for LIBOR loans) and 1.25% to 0.75% per annum (for base rate loans) based on the our leverage ratio. The A&R Credit Agreement contains certain financial maintenance covenants and affirmative and negative covenants customary for financings of this type. All obligations under the A&R Senior Credit Facilities are unconditionally guaranteed jointly and severally by us and substantially all of the direct and indirect wholly owned subsidiaries of ours that are organized under the laws of the U.S. (collectively, the “Guarantors”). The A&R Senior Credit Facilities are secured on a first priority basis by the equity interests of each direct subsidiary of ours, as well as the tangible and intangible personal property and material real property of ours and each of the Guarantors. At December 31, 2022 and 2021, the weighted average interest rate for the A&R Term B Facility was 6.78% and 2.75%, respectively and there were no borrowings and no letters of credit issued under the A&R Revolving Credit Facility. As of December 31, 2022, we were in compliance with all covenants related to the A&R Credit Agreement and Senior Notes due 2029. We entered into certain interest rate swaps agreements in 2021 to effectively convert a portion of our variable interest rate debt to fixed rate debt. Refer to Note 12. Derivative Financial Instruments to Consolidated Financial Statements. Senior Notes due 2029 On August 26, 2021, we issued $300 million in principal amount of 4.000% Senior Notes due 2029. The Senior Notes due 2029 are senior unsecured obligations of Resideo guaranteed by Resideo’s existing and future domestic subsidiaries and rank equally with all of Resideo’s senior unsecured debt and senior to all of Resideo’s subordinated debt. We may, at our option, redeem the Senior Notes due 2029 in whole (at any time) or in part (from time to time), at varying prices based on the timing of the redemption. The Senior Notes due 2029 limit us and our restricted subsidiaries’ ability to, among other things, incur additional secured indebtedness and issue preferred stocks; enter into certain sale and leaseback transactions; incur liens; and consolidate, merge or sell all or substantially all of their assets. These covenants are subject to a number of limitations and exceptions. Additionally, upon certain events constituting a change of control together with a ratings downgrade, the holders of the Senior Notes due 2029 have the right to require us to offer to repurchase the Senior Notes due 2029 at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, to (but not including) the date of purchase. Senior Notes Redemptions As a result of the redemption of the 6.125% senior unsecured notes (the “Senior Notes due 2026”) and the execution of the A&R Credit Agreement, debt extinguishment costs of $41 million were incurred and recorded in other expense, net for the year ended December 31, 2021. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments We have eight interest rate swap agreements entered into in March 2021 with several financial institutions for a combined notional value of $560 million. Under the Swap Agreements, we convert a portion of our variable interest rate obligations based on three-month LIBOR with a minimum rate of 0.50% per annum to a base fixed weighted average rate of 0.9289% over the remaining terms, ranging from 1.5 years to 3 years. The Swap Agreements were entered into to reduce the consolidated interest rate risk associated with variable rate, long-term debt. We designated the Swap Agreements as cash flow hedges of the variability in expected cash outflows for interest payments. The Swap Agreements are adjusted to fair value on a quarterly basis. The fair value of the swap is presented within the Consolidated Balance Sheets, and we recognize any changes in the fair value as an adjustment of accumulated other comprehensive loss within equity to the extent the swap is effective. As interest expense is accrued on the debt obligation, amounts in accumulated other comprehensive loss related to the interest rate swap agreements are reclassified into income resulting in a net interest expense on the hedged amount of the underlying debt obligation equal to the effective yield of the fixed rate of the swap. The following table summarizes the fair value and presentation of derivative instruments in the Consolidated Balance Sheets as well as the pre-tax gain (loss) recorded in accumulated other comprehensive loss: Fair Value of Derivative Assets December 31, (in millions) Financial Statement Line Item 2022 2021 Derivatives designated as hedging instruments: Interest rate swaps Other current assets $ 23 $ — Interest rate swaps Other assets 22 7 Total derivative assets $ 45 $ 7 Fair Value of Derivative Liabilities December 31, (in millions) Financial Statement Line Item 2022 2021 Derivatives designated as hedging instruments: Interest rate swaps Accrued liabilities $ — $ 1 Total derivative liabilities $ — $ 1 Unrealized gain (loss) Accumulated other comprehensive loss $ 42 $ 6 Unrealized gains expected to be reclassified from accumulated other comprehensive loss in the next 12 months are estimated to be $23 million as of December 31, 2022. The following tables summarize the effect of derivative instruments designated as cash flow hedges in other comprehensive loss and the Consolidated Statements of Operations: Years Ended December 31, (in millions) Financial Statement Line Item 2022 2021 Gains recorded in accumulated other comprehensive loss, beginning of period: $ 6 $ — Current period gains recognized in other comprehensive income 42 6 Gains reclassified from accumulated other comprehensive loss to net income Interest expense, net (6) — Gains recorded in accumulated other comprehensive loss, end of period $ 42 $ 6 |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value The estimated fair value of our financial instruments held, and when applicable, issued to finance our operations, is summarized below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that we would realize upon disposition nor do they indicate our intent or ability to dispose of the financial instrument. Assets and liabilities that are carried at fair value are required to be classified and disclosed in one of the following three categories: Level 1—quoted market prices in active markets for identical assets and liabilities Level 2—observable market-based inputs or unobservable inputs that are corroborated by market data Level 3—unobservable inputs that are not corroborated by market data Financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. There were no changes in the methodologies used in our valuation practices as of December 31, 2022 and 2021. The fair values of long-term debt instruments were determined using quoted market prices in inactive markets or discounted cash flows based upon current observable market interest rates and therefore were classified as Level 2 measurements in the fair value hierarchy. The following table provides a summary of the carrying amount and fair value of outstanding debt: December 31, 2022 December 31, 2021 (in millions) Carrying Value Fair Value Carrying Value Fair Value Debt: 4.000% Senior Notes due 2029 $ 300 $ 242 $ 300 $ 294 Variable rate A&R Term B Facility 1,131 1,125 943 943 Total long-term debt $ 1,431 $ 1,367 $ 1,243 $ 1,237 As of December 31, 2022 and 2021, there were no borrowings and no letters of credit issued under the A&R Revolving Credit Facility. Refer to Note 11. Long-Term Debt to Consolidated Financial Statements. Credit and Market Risk— Credit risk represents the loss that would be recognized at the reporting date if counterparties failed to perform as contracted. Market risk represents our exposure to changes associated with our international operations as we generate revenue and incur expenses in various currencies. We continually monitor the creditworthiness of our customers to which we grant credit terms in the normal course of business. The terms and conditions of credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer. Management does not believe we are exposed to any significant concentrations of credit risk that arise from cash and cash equivalent investments, derivatives or accounts receivable. Foreign Currency Risk Management— We conduct business on a multinational basis in a wide variety of foreign currencies. We are exposed to market risks from changes in currency exchange rates. These exposures may impact future earnings and/or operating cash flows. The exposure to market risk for changes in foreign currency exchange rates arises from transactions arising from international trade, foreign currency denominated monetary assets and liabilities, and international financing activities between subsidiaries. We rely on natural offsets to address the exposures. As of December 31, 2022 and 2021, we had no forward or option hedging contracts. Interest Rate Risk— We have exposure to movements in interest rates associated with cash and borrowings. We may enter into various interest rate protection agreements in order to limit the impact of movements in interest rates. The following table provides a summary of the carrying amount and fair value of our interest rate swaps: December 31, 2022 December 31, 2021 (in millions) Carrying Value Quoted prices in Significant other Carrying Value Quoted prices in Significant other Assets: Interest rate swaps $ 45 $ — $ 45 $ 7 $ — $ 7 Liabilities: Interest rate swaps — — — 1 — 1 Total $ 45 $ — $ 45 $ 6 $ — $ 6 There are no Level 1 or Level 3 assets or liabilities for the periods presented. The fair values of derivative financial instruments have been determined based on market value equivalents at the balance sheet date, taking into account the current interest rate environment and therefore were classified as Level 2 measurements in the fair value hierarchy. Refer to Note 12. Derivative Financial Instruments to Consolidated Financial Statements. The fair value calculated during the annual goodwill and indefinite-lived intangible asset impairment test uses the market approach in combination with the income approach for the reporting units and the relief from royalty method for the indefinite-lived intangible assets, respectively. The fair value is a Level 3 valuation based on certain unobservable inputs including estimated future cash flows and discount rates aligned with market-based assumptions, that would be utilized by market participants in valuing these assets or prices of similar assets. In addition, for long-lived assets, we performed an impairment test for certain location level assets. We utilize primarily the replacement cost method (a Level 3 valuation method) for the fair value of property, plant and equipment, and the income method to estimate the fair value of right-of-use assets, which incorporates Level 3 inputs such as internal business plans, real estate market capitalization and rental rates, and discount rates. Refer to Note 2. Summary of Significant Accounting Policies and Note 10. Leases to Consolidated Financial Statements. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Other current accrued liabilities consist of the following: December 31, (in millions) 2022 2021 Obligations payable under Indemnification Agreements $ 140 $ 140 Compensation, benefit and other employee-related 108 114 Customer rebate reserve 98 94 Product warranties 40 22 Current operating lease liability 37 32 Taxes payable 38 54 Other (1) 179 145 Total accrued liabilities $ 640 $ 601 (1) Other includes accruals for advertising, legal and professional reserves, freight, royalties, interest, and other miscellaneous items. The Indemnification Agreements are further described in Note 15. Commitments and Contingencies. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental Matters We are subject to various federal, state, local, and foreign government requirements relating to the protection of the environment and accrue costs related to environmental matters when it is probable that we have incurred a liability related to a contaminated site and the amount can be reasonably estimated. We believe that, as a general matter, our policies, practices and procedures are properly designed to prevent unreasonable risk of environmental damage and personal injury and that our handling, manufacture, use and disposal of hazardous substances are in accordance with environmental and safety laws and regulations. We have incurred remedial response and voluntary cleanup costs for site contamination and are a party to claims associated with environmental and safety matters, including products containing hazardous substances. Additional claims and costs involving environmental matters are likely to continue to arise in the future. Environment-related expenses for sites owned and operated by us are presented within cost of goods sold Obligations Payable Under Indemnification Agreements The Reimbursement Agreement and the Tax Matters Agreement (collectively, the “Indemnification Agreements”) are further described below. Reimbursement Agreement In connection with the Spin-Off, we entered into the Reimbursement Agreement pursuant to which we have an obligation to make cash payments to Honeywell in amounts equal to 90% of payments for certain Honeywell environmental-liability payments, which include amounts billed (payments), less 90% of Honeywell’s net insurance receipts relating to such liabilities, and less 90% of the net proceeds received by Honeywell in connection with (i) affirmative claims relating to such liabilities, (ii) contributions by other parties relating to such liabilities and (iii) certain property sales (the recoveries). The amount payable by us in respect of such liabilities arising in respect of any given year is subject to a cap of $140 million. Payments in respect of the liabilities arising in a given year will be made quarterly throughout such year on the basis of an estimate of the liabilities and recoveries provided by Honeywell. Following the end of any such year, Honeywell will provide us with a calculation of the amount of payments and the recoveries actually received. Payment amounts under the Reimbursement Agreement will be deferred to the extent that a specified event of default has occurred and is continuing under certain indebtedness, including under the A&R Credit Agreement, or the payment thereof causes us not to be compliant with certain financial covenants in certain indebtedness, including the A&R Credit Agreement on a pro forma basis, including the maximum total leverage ratio (ratio of consolidated debt to consolidated EBITDA, which excludes any amounts owed to Honeywell under the Reimbursement Agreement), and the minimum interest coverage ratio. The obligations under the Reimbursement Agreement will continue until the earlier of: (1) December 31, 2043; or (2) December 31 of the third consecutive year during which the annual reimbursement obligation (including in respect of deferred payment amounts) has been less than $25 million. In 2021 and 2020, several amendments were executed with respect to the Reimbursement Agreement. These amendments included modifications of certain covenants in Exhibit G to conform to the amended covenants included in the Credit Agreement First Amendment, deferment of certain payments under the Reimbursement Agreement to later in the year, and amendment of Exhibit G to, among other things, permit a sale and leaseback transaction. An aggregate amount of up to $150 million would be permitted thereunder so long as the same conditions that are applicable under the Credit Agreement are satisfied. On February 12, 2021, the covenants in Exhibit G of the Reimbursement Agreement were amended and restated in their entirety to substantially conform to the affirmative and negative covenants contained in the A&R Credit Agreement. Tax Matters Agreement In connection with the Spin-Off, we entered into the Tax Matters Agreement with Honeywell, pursuant to which it is responsible and will indemnify Honeywell for certain taxes, including certain income taxes, sales taxes, VAT and payroll taxes, relating to the business for all periods, including periods prior to the consummation of the Spin-Off. In addition, the Tax Matters Agreement addresses the allocation of liability for taxes that are incurred as a result of restructuring activities undertaken to effectuate the Spin-Off. We are required to indemnify Honeywell for any taxes resulting from the failure of the Spin-Off and related internal transactions to qualify for their intended tax treatment under U.S. federal, state and local income tax law, as well as foreign tax law, where such taxes result from our action or omission not permitted by the Separation and Distribution Agreement or the Tax Matters Agreement. The following table summarizes information concerning the Reimbursement and Tax Matter Agreements’ liabilities: (in millions) Reimbursement Agreement Tax Matters Agreement Total Beginning balance, December 31, 2020 $ 591 $ 139 $ 730 Accruals for liabilities deemed probable and reasonably estimable (1) 146 11 157 Payments to Honeywell (140) (22) (162) Balance as of December 31, 2021 597 128 725 Accruals for liabilities deemed probable and reasonably estimable (1) 157 (2) $ 155 Payments to Honeywell (140) (20) $ (160) Balance as of December 31, 2022 $ 614 $ 106 $ 720 (1) Reimbursement Agreement liabilities deemed probable and reasonably estimable, however, it is possible we could pay $140 million per year (exclusive of any late payment fees up to 5% per annum) until the earlier of (1) December 31, 2043; or (2) December 31 of the third consecutive year during which the annual reimbursement obligation (including in respect of deferred payment amounts) has been less than $25 million. The liabilities related to the Reimbursement and Tax Matter Agreements are included in the following balance sheet accounts: Years Ended December 31, (in millions) 2022 2021 Accrued liabilities $ 140 $ 140 Obligations payable under Indemnification Agreements 580 585 Total indemnification liabilities $ 720 $ 725 For the years ended December 31, 2022, 2021 and 2020, net expenses related to the Reimbursement Agreement were $157 million, $146 million and $146 million, respectively, and are recorded in other expense, net. We do not currently possess sufficient information to reasonably estimate the amounts of indemnification liabilities to be recorded upon future completion of studies, litigation or settlements, and neither the timing nor the amount of the ultimate costs associated with such indemnification liability payments can be determined although they could be material to our consolidated results of operations and operating cash flows in the periods recognized or paid. Independent of our payments under the Reimbursement Agreement, we will have ongoing liability for certain environmental claims, which are part of our ongoing business. Trademark Agreement We and Honeywell entered into a 40-year Trademark Agreement that authorizes our use of certain licensed trademarks in the operation of our business for the advertising, sale and distribution of certain licensed products. In exchange, we will pay a royalty fee of 1.5% on net revenue to Honeywell related to such licensed products which is recorded in selling, general and administrative expense on the Consolidated Statements of Operations. For the years ended December 31, 2022, 2021, and 2020, royalty fees were $23 million, $21 million, and $26 million, respectively. Other Matters We are subject to lawsuits, investigations, and disputes arising out of the conduct of our business, including matters relating to commercial transactions, government contracts, product liability, prior acquisitions and divestitures, employee matters, intellectual property, and environmental, health, and safety matters. We recognize a liability for any contingency that is probable of occurrence and reasonably estimable. We continually assess the likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts. No such matters are material to our financial statements. Certain current or former directors and officers were defendants in a consolidated derivative action In re Resideo Technologies, Inc. Derivative Litigation (the “Consolidated Federal Derivative Action”) and was stayed pending entry of final judgment in the Securities Litigation and the Delaware Chancery Derivative Action. An additional suit was filed in the Court of Chancery of the State of Delaware in 2021 and not consolidated with the Consolidated Federal Derivative Action. On November 17, 2022, the parties executed a Confidential Term Sheet summarizing the agreed terms of a global settlement to resolve all of the pending lawsuits and derivative claims. Under the terms of the settlement, we have agreed to implement or codify certain corporate governance reforms and reimburse the plaintiffs’ attorneys’ fees of up to $1.6 million. On February 3, 2023, the parties executed a definitive stipulation of settlement, which remains subject to, among other things, court approval. The settlement liability is included in the other accrued liabilities in the Consolidated Balance Sheets, the expected insurance recovery of approximately $0.6 million is included in Accounts receivable, net. On September 16, 2022, Salvatore Badalamenti (“Plaintiff”) filed a putative class action lawsuit (the “Badalamenti Lawsuit”) in the U.S. District Court for the District of New Jersey against Honeywell International Inc. and the Company. Plaintiff alleges, among other things, that the Company violated certain consumer protection laws by falsely advertising the Company’s combination-listed single data-bus burglar and fire alarms system control units (the “Products”) as conforming to Underwriters Laboratories, Inc. (the “UL”) or the National Fire Protection Association (“NFPA”) standards and/or failing to disclose such nonconformance. Plaintiff further alleges that the Company’s Products are defective because they do not conform to the UL and NFPA industry standards. Plaintiff does not allege that he, or anyone else, has experienced any adverse event due to the alleged product defect or that the Products did not work. Plaintiff alleges causes of action for violation of the New Jersey Consumer Fraud Act, fraud, negligent misrepresentation, breach of express and implied warranties, violation of the Magnuson-Moss Warranty Act, unjust enrichment, and violation of the Truth-in-Consumer Contract, Warranty, and Notice Act. Plaintiff seeks to represent a putative class of other persons in the U.S. who purchased the Products. Plaintiff, on behalf of himself and the putative class, seeks damages in an unknown amount, which he describes as the cost to repair and/or replace the Products and/or the diminution in value of the Products. We believe we have strong defenses against the allegations and claims asserted in the Badalamenti Lawsuit and filed a motion to dismiss Plaintiff's complaint in December of 2022. We intend to defend the matter vigorously; however, there can be no assurance that we will be successful in such defense. In light of the early stage of the Badalamenti Lawsuit, we are unable to estimate the total costs to defend the matter or the potential liability to us in the event that we are not successful in our defense. Warranties and Guarantees In the normal course of business, we issue product warranties and product performance guarantees. We accrue for the estimated cost of product warranties and product performance guarantees based on contract terms and historical experience at the time of sale. Adjustments to initial obligations for warranties and guarantees are made as changes to the obligations become reasonably estimable. Product warranties and product performance guarantees are included in other accrued liabilities. The following table summarizes information concerning recorded obligations for product warranties and product performance guarantees. December 31, (in millions) 2022 2021 2020 Beginning balance $ 23 $ 22 $ 25 Accruals for warranties/guarantees issued during the year 30 22 21 Adjustment of pre-existing warranties/guarantees (2) (3) (7) Settlement of warranty/guarantee claims (17) (18) (17) Reserve of acquired company at date of acquisition 14 — — Ending balance $ 48 $ 23 $ 22 Purchase Commitments Our unconditional purchase obligations include purchase commitments with suppliers and other obligations entered into during the normal course of business regarding the purchase of goods and services. For the years ended December 31, 2022, 2021, and 2020, purchases related to these obligations were $41 million, $22 million and $22 million, respectively. Aggregate payments on these obligations at December 31, 2022, follows: (in millions) Payments 2023 $ 51 2024 50 2025 10 2026 4 2027 and thereafter — Total $ 115 |
Other Expense, net
Other Expense, net | 12 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Other Expense, net | Other Expense, net Other expenses, net consists of the following: Years Ended December 31, (in millions) 2022 2021 2020 Reimbursement Agreement expense $ 157 $ 146 $ 146 Loss on extinguishment of debt — 41 — Return on pension assets (39) (9) (17) Settlement of pre-Spin-Off litigation 13 — — Other, net 4 (20) 18 Total other expenses, net $ 135 $ 158 $ 147 Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense is based on pretax financial accounting income. Deferred income taxes are recognized for the temporary differences between the recorded amounts of assets and liabilities for financial reporting purposes and such amounts for income tax purposes. The following is a summary of the components of income (loss) before provision for income taxes: Years Ended December 31, (in millions) 2022 2021 2020 U.S. $ 124 $ 79 $ (93) Non-U.S. 294 274 194 Total $ 418 $ 353 $ 101 The components of the provision for income taxes consisted of the following: Years Ended December 31, (in millions) 2022 2021 2020 Current: U.S. $ 95 $ 60 $ 21 Non-U.S. 43 45 21 Total current $ 138 $ 105 $ 42 Deferred: U.S. $ (13) $ 5 $ 11 Non-U.S. 10 1 11 Total deferred $ (3) $ 6 $ 22 Total provision $ 135 $ 111 $ 64 The reconciliation of income tax computed at the U.S. federal statutory tax rate to the effective income tax rate is as follows: Years Ended December 31, 2022 2021 2020 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % Impact of foreign operations (1.6) (0.2) (5.4) U.S. state income taxes 3.0 3.6 6.4 Non-deductible indemnification costs 7.7 8.4 29.0 Executive compensation over $1 million 1.0 0.9 2.5 Other non-deductible expenses (0.6) 0.4 3.7 U.S. taxation of foreign earnings 1.0 1.4 3.5 Tax credits (0.5) (0.7) (0.2) Change in tax rates — (1.0) 1.3 All other items, net 1.3 (2.5) 1.8 Effective income tax rate 32.3 % 31.3 % 63.6 % Deferred income taxes reflect the net impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. The tax effects of the temporary differences as of December 31, 2022 and 2021 are as follows: Years Ended December 31, (in millions) 2022 2021 Deferred tax assets: Pension $ 16 $ 24 Other asset basis differences 54 63 Operating lease liabilities 43 33 Accruals and reserves 63 50 Net operating and capital losses 49 48 Other 2 2 Gross deferred tax assets 227 220 Valuation allowance (63) (63) Total deferred tax assets $ 164 $ 157 Deferred tax liabilities: Other intangible assets $ (34) $ (39) Property, plant and equipment (24) (23) Operating lease assets (40) (33) Other (7) (5) Total deferred tax liabilities $ (105) $ (100) Net deferred tax asset $ 59 $ 57 Valuation allowance In assessing the need for a valuation allowance, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We evaluate our ability to realize the tax benefits associated with deferred tax assets by analyzing the relative impact of all the available positive and negative evidence regarding our forecasted taxable income using both historical and projected future operating results, the reversal of existing taxable temporary differences, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. The ultimate realization of deferred tax assets is dependent upon the generation of certain types of future taxable income during the periods in which those temporary differences become deductible. In making this assessment, we consider the scheduled reversal of deferred tax liabilities, our ability to carry back the deferred tax asset, projected future taxable income, and tax planning strategies. A valuation allowance is recorded in each jurisdiction when it is more likely than not that the deferred income tax asset will not be realized. Changes in deferred tax asset valuation allowances typically impact income tax expense. We maintain a valuation allowance of $63 million against a portion of non-U.S. deferred tax assets. Valuation allowances principally relate to foreign net operating loss carryforwards. As of December 31, 2022, we have deferred tax assets relating to foreign net operating loss carryforwards of $49 million. These tax losses can be carried forward to offset the income tax liabilities on future income in these countries. Cumulative tax losses of $42 million can be carried forward indefinitely, while the remaining $7 million of tax losses must be used during tax years 2023 to 2040. The rollforward of the valuation allowance on deferred taxes is as follows for the periods indicated: Years Ended December 31, (in millions) 2022 2021 2020 Beginning balance $ 63 $ 60 $ 32 Additions — 3 28 Ending balance $ 63 $ 63 $ 60 As of December 31, 2022, our total undistributed earnings of foreign affiliates were $2.0 billion, of which $4 million was not considered indefinitely reinvested. While these earnings would not be subject to incremental U.S. tax, if we were to actually distribute these earnings, they could be subject to additional foreign income taxes and/or withholding taxes payable in foreign jurisdictions. Thus, we provide for foreign income taxes payable upon future distributions of the earnings not considered indefinitely reinvested annually. For the year ended December 31, 2022, the tax charge related to earnings that are not considered indefinitely reinvested is not material. Determination of the unrecognized deferred foreign income tax liability related to these undistributed earnings is not practicable due to the complexities associated with this hypothetical calculation. Uncertain tax positions The table below sets forth the changes to our gross unrecognized tax benefit as a result of uncertain tax positions, excluding interest and penalties for the years ended December 31, 2022, 2021 and 2020. We do not anticipate that the total unrecognized tax benefits will change significantly within the next twelve months. Years Ended December 31, (in millions) 2022 2021 2020 Unrecognized tax benefits at beginning of year $ 16 $ 10 $ 6 Additions based on tax positions related to the respective year 6 6 4 Unrecognized tax benefits at end of year $ 22 $ 16 10 Included in the balance of unrecognized tax benefits as of December 31, 2022 and December 31, 2021 are potential benefits of $22 million and $16 million respectively, that, if recognized, would affect the effective tax rate. We report accrued interest and penalties related to unrecognized tax benefits in income tax expense. For the year ended December 31, 2022, we recognized a net expense for interest and penalties of $1 million relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $3 million as of December 31, 2022. For the year ended December 31, 2021, we recognized a net expense for interest and penalties of $1 million relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $1 million as of December 31, 2021. Open tax periods We file income tax returns in the U.S. federal jurisdiction, all states, and various local and foreign jurisdictions. Our U.S. federal tax returns are no longer subject to income tax examinations for taxable years before 2019. With limited exception, state, local, and foreign income tax returns for taxable years before 2018 are no longer subject to examination. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per share follows: Years Ended December 31, (in millions) 2022 2021 2020 Numerator for Basic and Diluted Earnings Per Share: Net income $ 283 $ 242 $ 37 Denominator for Basic and Diluted Earnings Per Share: Weighted average basic number of common shares outstanding 146 144 125 Plus: dilutive effect of common stock equivalents 3 4 1 Weighted average diluted number of common shares outstanding 149 148 126 Earnings per share: Basic $ 1.94 $ 1.68 $ 0.30 Diluted $ 1.90 $ 1.63 $ 0.29 |
Geographic Areas - Financial Da
Geographic Areas - Financial Data | 12 Months Ended |
Dec. 31, 2022 | |
Segments, Geographical Areas [Abstract] | |
Geographic Areas - Financial Data | Geographic Areas - Financial Data Revenue and long-lived assets by geography are as follows: Net Revenue (1) Long-lived Assets (2) Years Ended December 31, December 31, (in millions) 2022 2021 2020 2022 2021 2020 U.S. $ 4,795 $ 4,181 $ 3,543 $ 347 $ 244 $ 260 Europe 1,111 1,196 1,121 131 139 144 Other International 464 469 407 79 46 47 Total $ 6,370 $ 5,846 $ 5,071 $ 557 $ 429 $ 451 (1) Net revenue between geographic areas approximate market and is not significant. Net revenue is classified according to their country of origin. Included in U.S. net revenue are export sales of $38 million, $26 million and $21 million for the years ended December 31, 2022, 2021 and 2020, respectively. (2) Long-lived assets are comprised of property, plant and equipment, net and right-of-use lease assets. |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation and Reporting | Basis of Consolidation and Reporting The accompanying Consolidated Financial Statements include the accounts of the Company and our wholly-owned subsidiaries and have been prepared in accordance with U.S. GAAP. All intercompany accounts, transactions and profits arising from consolidated entities have been eliminated in consolidation. |
Reclassification | ReclassificationFor the purposes of comparability, certain prior period amounts have been reclassified to conform to current period classification. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates—The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities in the Consolidated Financial Statements and accompanying notes. Estimates are used for, but not limited to, provisions for expected credit losses and inventory reserves, accounting for business combinations, valuation of reporting units for purposes of assessing goodwill for impairment, valuation of long-lived asset groups for impairment testing, accruals for employee benefits, stock-based compensation, pension benefits, indemnification liabilities, deferred taxes, warranties and certain contingencies. We base our estimates on historical experience, market participant fair value considerations, projected future cash flows, and various other factors that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash—Cash and cash equivalents may consist of cash on hand, money market instruments, time deposits and highly liquid investments. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents that are restricted as to the withdrawal or use under terms of certain contractual agreements are recorded in other current assets on the Consolidated Balance Sheets and primarily relate to collateral to support certain bank guarantees. Restricted cash for the periods presented were not material. Cash, cash equivalents and restricted cash are carried at cost, which approximates fair value. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts—Accounts receivable are recorded at the invoiced amount, presented net of allowance for doubtful accounts and do not bear interest. We review the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Allowance for doubtful accounts was not material as of December 31, 2022 and 2021, respectively. |
Inventories | Inventories—Inventories are stated at lower of cost or net realizable value and valued by the first-in-first-out method. Inventory reserves are maintained for obsolete and surplus items. The following tables summarize the details of our inventory, net: December 31, (in millions) 2022 2021 Raw materials $ 251 $ 174 Work in process 25 17 Finished products 699 549 Total inventories, net $ 975 $ 740 |
Property, Plant and Equipment | Property, Plant and Equipment—Property, plant and equipment are stated at cost, less accumulated depreciation. For financial reporting purposes the straight-line method of depreciation is used over the estimated useful lives. Leasehold improvements are capitalized and amortized using the straight-line method over the shorter of their estimated useful lives or the term of the underlying lease. Depreciation is recognized in cost of sales, research and development, and selling, general and administrative expenses based on the nature and use of the underlying assets. The following table summarizes the details of our property, plant and equipment, including useful lives: December 31, (in millions) 2022 2021 Useful Lives Machinery and equipment $ 647 $ 602 3-16 years Buildings and improvements 303 292 10-50 years Construction in progress 80 35 NA Land 9 4 NA Gross property, plant and equipment 1,039 933 Accumulated depreciation (673) (646) Total property, plant and equipment, net $ 366 $ 287 NA = Not applicable; assets categorized as construction in progress and land are not depreciated. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets—We assess the recoverability of the carrying amount of property, plant and equipment if events or changes in circumstances indicate that the carrying amount or related group of assets may not be recoverable. If the expected undiscounted cash flows are less than the carrying amount of the asset an impairment loss is recognized. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets —We review the carrying values of goodwill and identifiable intangibles whenever events or changes in circumstances indicate that such carrying values may not be recoverable and annually, on the first day of the fourth quarter. If the carrying value of a reporting unit exceeds its fair value, we record a goodwill impairment loss as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Refer to Note 9. Goodwill and Intangible Assets, net |
Restructuring | Restructuring —We enter into various restructuring initiatives, optimization projects, strategic transactions, and other business activities that may include the recognition of exit or disposal costs. Exit or disposal costs are typically costs of termination benefits, such as severance and costs associated with the closure or consolidation of operating facilities. Impairment of property and equipment and other current or long-term assets as a result of a restructuring initiative is recognized as a reduction of the appropriate asset. Refer to Note 6. Restructuring Expenses to Consolidated Financial Statements. |
Derivatives | Derivatives—Our interest rate swap agreements effectively modify our exposure to interest rate risk by converting floating rate debt to a fixed rate for the term of the swap agreements, reducing the impact of interest rate changes on future interest expense. These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount. Our interest rate swap agreements are designated as cash flow hedges with effectiveness of the hedges assessed at inception and quarterly thereafter. To the extent the hedging relationship is highly effective, the unrealized gains or losses on the swaps are recorded in accumulated other comprehensive loss and reclassified into earnings within interest expense, net when the payments occur. We classify our cash flows related to interest rate swap agreements as operating activities in the Consolidated Statements of Cash Flows. The fair values of the interest rate swaps are reflected as an other asset or liability in the Consolidated Balance Sheets and the change in fair value is reported in accumulated other comprehensive loss. The fair values of the interest rate swaps are estimated as the net present value of projected cash flows based upon forward interest rates at the balance sheet date. We do not offset fair value amounts recognized in our Consolidated Balance Sheets for presentation purposes. Refer to Note 12. Derivative Financial Instruments to Consolidated Financial Statements. |
Warranties and Guarantees | Warranties and Guarantees—Expected warranty costs for products sold are recognized based on an estimate of the amount that eventually will be required to settle such obligations. These accruals are based on factors such as past experience, length of the warranty and various other considerations. Costs of product recalls, which may include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the recalled part, are accrued as part of the warranty accrual at the time an obligation becomes probable and can be reasonably estimated. We periodically adjust these provisions to reflect actual experience and other facts and circumstances that impact the status of existing claims. Refer to Note 15. Commitments and Contingencies |
Leases | Leases—Included in our Consolidated Balance Sheets are certain operating leases that are reported as a component of other assets and other liabilities. The leased assets represent our right to use an underlying asset for the lease term and the lease liabilities represent our obligation to make lease payments arising from the lease. An incremental borrowing rate is used to calculate the present value of the remaining lease payments.Each contract is reviewed at inception to determine if it contains a lease and whether the lease qualifies as an operating or financing lease. For short-term leases (leases with a term of 12 months or less), right-of-use assets or lease liabilities are not recognized in the Consolidated Balance Sheets. Operating leases are expensed on a straight-line basis over the term of the lease. In determining the lease term, we consider the probability of exercising renewal or early termination options. In addition to the monthly base rent, we are often charged separately for common area maintenance, utilities and taxes, which are considered a non-lease component. These non-lease component payments are expensed as incurred and are not included in operating lease assets or liabilities. Right-of-use assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable in accordance with our long-lived asset impairment assessment policy. Refer to Note 10. Leases |
Revenue Recognition | Revenue Recognition—We enter into contracts that pertain to products, which are accounted for as separate performance obligations and are typically one year or less in duration. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For product sales, typically each product sold to a customer represents a distinct performance obligation. Revenue is measured as the amount of consideration expected to be received in exchange for our products. We recognize the majority of our revenue from performance obligations outlined in contracts with our customers that are satisfied at a point in time, generally when the product has shipped from our facility and control has transferred to the customer. For certain products, it is industry practice that customers take title to products upon delivery, at which time revenue is then recognized. Allowances for cash discounts, volume rebates and other customer incentive programs, as well as gross customer returns, among others, are recorded as a reduction of sales at the time of sale based upon the estimated future outcome. Cash discounts, volume rebates and other customer incentive programs are based upon certain percentages agreed upon with various customers, which are typically earned by the customer over an annual period. Revenue is adjusted for variable consideration, which includes customer volume rebates and prompt payment discounts. We measure variable consideration by estimating expected outcomes using analysis and inputs based upon anticipated performance, historical data, and current and forecasted information. Customer returns are recorded as a reduction to sales on an actual basis throughout the year and also include an estimate at the end of each reporting period for future customer returns related to sales recorded prior to the end of the period. We generally estimate customer returns based upon the time lag that historically occurs between the sale date and the return date, while also factoring in any new business conditions that might impact the historical analysis such as new product introduction. Measurement of variable consideration is reviewed by management periodically and revenue is adjusted accordingly. We do not have significant financing components. Sales, use and value added taxes collected and remitted to various government authorities were not recognized as revenue and are reported on a net basis. Shipping and handling fees billed to customers are included in cost of goods sold. Refer to Note 5. Revenue Recognition to Consolidated Financial Statements. |
Royalty | Royalty —In connection with the Spin-Off, we entered into a 40-year Trademark License Agreement (the “Trademark Agreement”) with Honeywell that authorizes our use of certain licensed trademarks in the operation of Resideo’s business for the advertising, sale and distribution of certain licensed products. In exchange, we pay a royalty fee of 1.5% of net revenue of the licensed products to Honeywell, which is recorded in selling, general and administrative expense on the Consolidated Statements of Operations. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. |
Reimbursement Agreement | Reimbursement Agreement —In connection with the Spin-Off we entered into a Reimbursement Agreement, pursuant to which we have an obligation to make cash payments to Honeywell in amounts equal to 90% of payments, which include amounts billed, with respect to certain environmental claims, remediation and, to the extent arising after the Spin-Off, hazardous exposure or toxic tort claims, in each case, including consequential damages (the liabilities) in respect of specified Honeywell properties contaminated through historical business operations prior to the Spin-Off (Honeywell Sites), including the legal and other costs of defending and resolving such liabilities, less 90% of Honeywell’s net insurance receipts relating to such liabilities, and less 90% of the net proceeds received by Honeywell in connection with (i) affirmative claims relating to such liabilities, (ii) contributions by other parties relating to such liabilities and (iii) certain property sales. The amount payable in respect of such liabilities arising in any given year is subject to a cap of $140 million. Reimbursement Agreement expenses are presented within other expense, net in the Consolidated Statements of Operations and within obligations payable under Indemnification Agreements in the Consolidated Balance Sheets. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. |
Environmental | Environmental —We accrue costs related to environmental matters when it is probable that we have incurred a liability related to a contaminated site and the amount can be reasonably estimated. Environmental costs for our owned sites are presented within cost of goods sold for operating sites in the Consolidated Statements of Operations. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. |
Tax Indemnification Agreement | Tax Indemnification Agreement —The Tax Matters Agreement provides that Resideo is required to indemnify Honeywell for any taxes (and reasonable expenses) resulting from the failure of the Spin-Off and related internal transactions to qualify for their intended tax treatment under U.S. federal, state and local income tax law, as well as foreign tax law, where such taxes result from (a) breaches of covenants and representations we make and agree to in connection with the Spin-Off, (b) the application of certain provisions of U.S. federal income tax law to these transactions or (c) any other action taken or omission made (other than actions expressly required or permitted by the Separation and Distribution Agreement, the Tax Matters Agreement or other ancillary agreements) after the consummation of the Spin-Off that gives rise to these taxes. As of December 31, 2022 and 2021, we had an indemnity outstanding to Honeywell for past and potential future tax payments of $106 million and $128 million, respectively. Refer to Note 15. Commitments and Contingencies to Consolidated Financial Statements. |
Research and Development | Research and Development—We conduct research and development activities, which consist primarily of the development of new products and solutions as well as enhancements and improvements to existing products that substantially change the product. Research and development costs primarily relate to employee compensation and consulting fees, which are charged to expense as incurred. |
Defined Contribution Plans | Defined Contribution Plans—We sponsor various defined contribution plans with varying terms depending on the country of employment. For the years ended December 31, 2022, 2021 and 2020, we recognized compensation expense related to the defined contribution plans of $22 million, $19 million, and $18 million, respectively. |
Stock-Based Compensation Plans | Stock-Based Compensation Plans —The principal awards issued under our stock-based compensation plans, which are described in Note 8. Stock-Based Compensation Plans , are restricted stock units. The cost for such awards is measured at the grant date based on the fair value of the award. Some awards are issued with a market condition, which are valued on the grant date utilizing a Monte Carlo simulation model. Stock options are also issued under our stock-based compensation plans and are valued on the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model and the Monte Carlo simulation model require estimates of future stock price volatility, expected term, risk-free interest rate and forfeitures. |
Pension | Pension—We disaggregate the service cost component of net benefit costs and report those costs in the same line item or items in the Consolidated Statements of Operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other non-service components of net benefit costs are required to be presented separately from the service cost component and outside of income from operations. We have recorded the service cost component of pension expense in costs of goods sold and selling, general and administrative expenses based on the classification of the employees it relates to. The remaining components of net benefit costs within pension expense, primarily interest costs and expected return on plan assets, are recorded in other expense, net. We recognize net actuarial gains or losses in excess of 10% of the greater of the fair value of plan assets or the plans’ projected benefit obligation (the “corridor”) annually in the fourth quarter of each year. This adjustment is reported in other expense, net in the Consolidated Statements of Operations. Refer to Note 7. Pension Plans to Consolidated Financial Statements. |
Foreign Currency Translation | Foreign Currency Translation—Assets and liabilities of operations outside the U.S. with a functional currency other than U.S. Dollars are translated into U.S. Dollars using year-end exchange rates. Revenue, costs and expenses are translated at the average exchange rates in effect during the year. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss. |
Income Taxes | Income Taxes —Significant judgment is required in evaluating tax positions. We established additional reserves for income taxes when, despite the belief that tax positions are fully supportable, there remain certain positions that do not meet the minimum recognition threshold. The approach for evaluating certain and uncertain tax positions is defined by the authoritative guidance, which determines when a tax position is more likely than not to be sustained upon examination by the applicable taxing authority. In the normal course of business, the Company and our subsidiaries are examined by various federal, state and foreign tax authorities. We regularly assess the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of our provision for income taxes. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability and deferred taxes in the period in which the facts that give rise to a change in estimate become known. Refer to Note 17. Income Taxes to Consolidated Financial Statements. |
Accounting Pronouncements | Accounting Pronouncements—We consider the applicability and impact of all recent accounting standards updates issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on our Consolidated Financial Statements. Adopted Accounting Pronouncements In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This guidance requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASU No. 2014-19, Revenue from Contracts with Customers (Topic 606) , as if it had originated the contracts. Deferred revenue acquired in a business combination is no longer required to be measured at its fair value, which had historically resulted in a deferred revenue impairment at the date of acquisition. We early adopted this ASU as of March 31, 2022, on a prospective basis, as permitted by the ASU. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements. Recent Accounting Pronouncements In September 2022, the FASB issued ASU No. 2022-04, Liabilities-Supplier Finance Programs (Topic 405): Disclosure of Supplier Finance Program Obligations. This guidance enhances transparency about an entity’s use of supplier finance programs by requiring quarterly and annual disclosures about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts annually, and a description of where in the financial statements outstanding amounts are presented. The guidance is effective for fiscal years beginning after December 15, 2022. We are currently assessing the impact of adoption on our Consolidated Financial Statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued because of reference rate reform. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued Accounting Standards Update 2021-01, Reference Rate Reform (Topic 848): Scope , which clarified the scope and application of the original guidance. These ASUs are applicable for the A&R Senior Credit Facilities and Swap Agreements, which use LIBOR as a reference rate. The A&R Senior Credit Facilities include a transition clause to a new reference rate in the event LIBOR is discontinued and Swap Agreements will be amended to match the new reference rate. We have evaluated the potential impact of adopting this standard and do not expect it to have a material impact on our financial statements. Refer to Note 11. Long-Term Debt and Note 12. Derivative Financial Instruments |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Inventories | The following tables summarize the details of our inventory, net: December 31, (in millions) 2022 2021 Raw materials $ 251 $ 174 Work in process 25 17 Finished products 699 549 Total inventories, net $ 975 $ 740 |
Summary of Property, Plant and Equipment | The following table summarizes the details of our property, plant and equipment, including useful lives: December 31, (in millions) 2022 2021 Useful Lives Machinery and equipment $ 647 $ 602 3-16 years Buildings and improvements 303 292 10-50 years Construction in progress 80 35 NA Land 9 4 NA Gross property, plant and equipment 1,039 933 Accumulated depreciation (673) (646) Total property, plant and equipment, net $ 366 $ 287 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | We preliminarily determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of the fair value of the acquisition consideration over such fair values, as follows: (in millions) Assets acquired: Cash $ 2 Accounts receivable 72 Inventories 117 Property, plant and equipment 82 Goodwill (1) 86 Other intangible assets 349 Other assets 33 Total assets acquired 741 Liabilities assumed: Accounts payable 57 Other liabilities 69 Total liabilities assumed 126 Net assets acquired $ 615 (1) Goodwill from this acquisition is partially deductible for tax purposes. Refer to Note 9. Goodwill and Intangible Assets, net to the Consolidated Financial Statements. |
Segment Financial Data (Tables)
Segment Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Summary financial data attributable to the segments for the periods indicated is as follows: Years Ended December 31, (in millions) 2022 2021 2020 Net revenue Products and Solutions $ 2,783 $ 2,468 $ 2,121 ADI Global Distribution 3,587 3,378 2,950 Total net revenue $ 6,370 $ 5,846 $ 5,071 Years Ended December 31, (in millions) 2022 2021 2020 Income from operations Products and Solutions $ 527 $ 541 $ 407 ADI Global Distribution 313 268 194 Corporate (229) (250) (290) Total income from operations $ 611 $ 559 $ 311 Years Ended December 31, (in millions) 2022 2021 2020 Depreciation and amortization Products and Solutions $ 69 $ 65 $ 63 ADI Global Distribution 14 11 12 Corporate 11 12 11 Total depreciation and amortization $ 94 $ 88 $ 86 Years Ended December 31, (in millions) 2022 2021 2020 Capital expenditures Products and Solutions $ 55 $ 37 $ 41 ADI Global Distribution 29 24 15 Corporate 1 2 14 Total capital expenditures $ 85 $ 63 $ 70 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue By Business Line and Geographic Location | Revenue presented by business line and geographic location, as we believe this presentation best depicts how the nature, amount, timing and uncertainty of net revenue and cash flows are affected by economic factors, are as follows: Years Ended December 31, (in millions) 2022 2021 2020 Products and Solutions Air $ 953 $ 858 $ 761 Safety and Security 913 667 561 Energy 595 594 505 Water 322 349 294 Total Products and Solutions 2,783 2,468 2,121 ADI Global Distribution U.S. and Canada 3,087 2,814 2,427 EMEA (1) 474 523 480 APAC (2) 26 41 43 Total ADI Global Distribution 3,587 3,378 2,950 Total net revenue $ 6,370 $ 5,846 $ 5,071 (1) EMEA represents Europe, the Middle East and Africa. (2) APAC represents Asia and Pacific countries. |
Restructuring Expenses (Tables)
Restructuring Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Expenses | The following table summarizes the status of our restructuring expenses included within accrued liabilities on the Consolidated Balance Sheets. December 31, (in millions) 2022 2021 2020 Beginning of year $ 9 $ 24 $ 19 Charges 26 — 40 Usage (5) (11) (35) Other (3) (4) — End of year $ 27 $ 9 $ 24 |
Pension Plans (Tables)
Pension Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Summary of Balance Sheet Impact, Including Benefit Obligations, Assets and Funded Status | The following tables summarize the balance sheet impact, including the benefit obligations, assets and funded status associated with the pension plans: U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2020 2022 2021 2020 Change in benefit obligation: Benefit obligation at beginning of year $ 348 $ 374 $ 344 $ 141 $ 161 $ 137 Service cost 7 7 7 5 7 7 Interest cost 11 10 11 2 1 1 Actuarial (gains) losses (66) (20) 38 (45) (18) 6 Net benefits paid (18) (5) (4) — — — Settlements (1) (18) (22) — (1) (6) Other — — — 1 1 2 Foreign currency translation — — — (8) (10) 14 Benefit obligation at end of year 281 348 374 96 141 161 Change in plan assets: Fair value of plan assets at beginning of year 342 340 331 32 28 27 Actual return on plan assets (62) 25 35 (6) 2 — Employer contributions 1 — 1 3 3 2 Net benefits paid (18) (5) (4) — 1 — Settlements (1) (18) (22) — (1) (6) Other — — (1) (1) — 3 Foreign currency translation — — — (1) (1) 2 Fair value of plan assets at end of year 262 342 340 27 32 28 Funded status of plans (non-current) $ (19) $ (6) $ (34) $ (69) $ (109) $ (133) |
Summary of Accumulated Other Comprehensive (Loss) Associated with Pension Plans | Amounts recognized in accumulated other comprehensive loss associated with pension plans at December 31, 2022 and 2021 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2022 2021 Prior service (credit) cost $ — $ (2) $ 2 $ — Net actuarial loss (gain) 13 2 (8) (2) Net amount recognized $ 13 $ — $ (6) $ (2) |
Summary of Net Periodic Benefit Cost and Other Amounts Recognized in Comprehensive Income | The components of net periodic benefit (income) cost for the years ended December 31, 2022, 2021 and 2020 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2020 2022 2021 2020 Net periodic benefit (income) cost Service cost $ 7 $ 7 $ 7 $ 5 $ 7 $ 7 Interest cost 11 10 11 2 1 1 Expected return on plan assets (17) (16) (17) (1) (1) (1) Amortization of prior service credit (1) (1) (1) — — — Amortization of actuarial (gains) losses — — — (33) (3) 6 Other — — 3 — — — Net periodic benefit (income) cost $ — $ — $ 3 $ (27) $ 4 $ 13 |
Summary of Net Periodic Benefit (Income) Cost Other Than The Service Cost Included in Other Expense, Net | The components of net periodic benefit cost other than the service cost are included in other expense, net in the Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020 are as follows: U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2020 2022 2021 2020 Other changes in plan assets and benefits obligations recognized in other comprehensive loss (income) Actuarial (gains) losses $ (66) $ (20) $ 38 $ (45) $ (18) $ 6 Prior service costs arising during the year — — — 2 — — Excess return on plan assets (1) 79 (9) (17) 6 — — Actuarial (gains) losses recognized during the year — — (2) 33 3 (6) Other — 1 — — (1) 1 Total recognized in other comprehensive loss (income) 13 (28) 19 (4) (16) 1 Total recognized in net periodic benefit (income) cost and other comprehensive loss (income) $ 13 $ (28) $ 22 $ (31) $ (12) $ 14 |
Summary of Significant Actuarial Assumptions Used in Determining Benefit Obligations and Net Periodic Benefit (Income) Cost | Significant actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for benefit plans are presented in the following table as weighted averages. U.S. Plans Non-U.S. Plans 2022 2021 2020 2022 2021 2020 Actuarial assumptions used to determine benefit obligations as of December 31: Discount rate 3.1 % 3.0 % 2.7 % 1.2 % 1.2 % 0.7 % Interest crediting rate 6.0 % 6.0 % 6.0 % 1.5 % 1.5 % 1.5 % Expected annual rate of compensation increase 3.2 % 3.2 % 3.5 % 2.4 % 2.4 % 2.4 % Actuarial assumptions used to determine net periodic benefit (income) cost for the year ended December 31: Discount rate - benefit obligation 5.2 % 2.7 % 3.3 % 3.4 % 0.7 % 1.1 % Interest crediting rate 6.0 % 6.0 % 6.0 % 2.5 % 1.5 % 1.5 % Expected rate of return on plan assets 5.3 % 4.7 % 5.4 % 1.3 % 2.3 % 2.7 % Expected annual rate of compensation increase 3.5 % 3.5 % 3.4 % 2.6 % 2.4 % 2.4 % |
Summary of Amounts Relate to Pension Plans with Accumulated Benefit Obligations Exceeding Fair Value of Plan Assets | The following amounts relate to pension plans with accumulated benefit obligations exceeding the fair value of plan assets at December 31, 2022 and 2021. U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2022 2021 Projected benefit obligation $ 281 $ 3 $ 96 $ 139 Accumulated benefit obligation $ 278 $ 2 $ 86 $ 124 Fair value of plan assets $ 262 $ — $ 27 $ 31 |
Summary of Pension Plan with Projected Benefit Obligations Exceeding Fair Value of Plan Assets | The following amounts relate to pension plans with projected benefit obligations exceeding the fair value of the plan assets at December 31, 2022 and 2021. U.S. Plans Non-U.S. Plans (in millions) 2022 2021 2022 2021 Projected benefit obligation $ 281 $ 348 $ 96 $ 141 Accumulated benefit obligation $ 278 $ 337 $ 87 $ 125 Fair value of plan assets $ 262 $ 342 $ 27 $ 32 |
Summary of NAV and Fair Values of Both U.S. and Non-U.S. Pension Plans Assets by Asset Category | A majority of the U.S. pension plan assets as of December 31, 2022 do not have published pricing and are valued using Net Asset Value (“NAV”), which approximates fair value. NAV and fair value by asset category are as follows for December 31, 2022 and 2021: U.S. Plans 2022 2021 (in millions) NAV NAV Cash and cash equivalents $ 6 $ 4 Equity 45 95 Investment funds — 16 Government bonds 21 39 Corporate bonds 132 153 Real estate / property 29 35 Other 29 — Total assets at fair value $ 262 $ 342 The fair values of the non-U.S. pension plan assets as by asset category are as follows for December 31, 2022 and 2021: Non-U.S. Plans 2022 2021 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Equity $ 1 $ 1 $ — $ — $ 1 $ 1 $ — $ — Government bonds 1 — 1 — 1 — 1 — Insurance contracts 6 — — 6 10 — — 10 Other 19 — — 19 20 — — 20 Total assets at fair value $ 27 $ 1 $ 1 $ 25 $ 32 $ 1 $ 1 $ 30 Refer to Note 13. - Fair Value to Consolidated Financial Statements. |
Summary of Changes in Fair Value of Level 3 Assets for Non-U.S | The following table summarizes changes in the fair value of Level 3 assets for Non-U.S. plans: (in millions) Non-U.S. Plans Balance at December 31, 2019 $ 24 Return on plan assets — Purchases, sales and settlements, net (1) Other 3 Balance at December 31, 2020 26 Return on plan assets 1 Purchases, sales and settlements, net 4 Other (1) Balance at December 31, 2021 30 Return on plan assets (3) Other (2) Balance at December 31, 2022 $ 25 |
Summary of Benefit Payments | Benefit payments, including amounts to be paid from our assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: (in millions) U.S. Plans Non-U.S. Plans 2023 $ 22 $ 3 2024 $ 22 $ 3 2025 $ 22 $ 3 2026 $ 22 $ 3 2027 $ 22 $ 3 2028-2032 $ 105 $ 26 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Fair Values Estimated for PSUs | The fair values estimated from the Monte Carlo simulation for PSUs issued during the years ended December 31, 2022, 2021 and 2020 were calculated using the following assumptions: Years Ended December 31, 2022 2021 2020 Expected volatility 59.01 % 47.43 % 33.70 % Risk-free interest rate % 1.58 % 0.20 % 0.80 % Expected term (in years) 2.89 2.86 2.79 Dividend yield (1) — % — % — % (1) We have never declared or paid any cash dividends on our common stock and we currently do not intend to pay cash dividends. |
Summary of Stock Incentive Plan For Employees and Non-Employee Directors | The following table summarizes activity related to the Stock Incentive Plan for employees and non-employee directors during the years ended December 31, 2022, 2021 and 2020: PSUs RSUs (in whole dollars) Number of Weighted Number of Weighted Non-vested as of January 1, 2020 276,281 $ 24.33 3,518,250 $ 23.05 Granted 795,099 6.33 2,262,676 10.55 Vested — — (921,060) 21.07 Forfeited (158,580) 16.06 (572,902) 19.27 Non-vested as of December 31, 2020 912,800 $ 10.09 4,286,964 $ 17.38 Granted 500,227 42.98 1,142,310 27.39 Vested — — (1,714,810) 19.27 Forfeited (95,467) 17.20 (237,331) 20.44 Non-vested as of December 31, 2021 1,317,560 $ 22.06 3,477,133 $ 19.52 Granted 672,453 36.11 1,799,632 22.69 Vested (155,803) 24.20 (1,664,167) 20.46 Forfeited (111,830) 23.91 (201,636) 21.89 Non-vested as of December 31, 2022 1,722,380 $ 27.23 3,410,962 $ 20.57 |
Unrecognized Compensation Cost Related to Unvested Awards | As of December 31, 2022, unrecognized compensation cost related to unvested awards granted to employees and non-employee directors under the Stock Incentive Plan is as follows: (in millions) Unrecognized Compensation Cost Weighted-Average Period RSUs $ 23 1 year, 5 months PSUs 18 1 year, 9 months Total unrecognized compensation cost $ 41 |
Fair Value of Shares Vested | The fair value of shares vested follows: Years Ended December 31, (in millions) 2022 2021 2020 RSUs $ 36 $ 48 $ 9 PSUs (1) 4 NA NA Total $ 40 $ 48 $ 9 (1) NA = Not applicable; there were no PSUs that vested during the years ended December 31, 2021 and 2020. |
Fair Value of Stock Options in Black-Scholes Model | The fair value of stock options was calculated using the following assumptions in the Black-Scholes model: Years Ended December 31, 2021 2020 Expected stock price volatility 34% 31% - 37% Expected term of options 5 years 4.5 years Expected dividend yield (1) —% —% Risk-free interest rate 0.77% 0.25% - 1.41% (1) We have never declared or paid any cash dividends on our common stock and we currently do not intend to pay cash dividends. |
Summary of Stock Option Activity Related to the Stock Incentive Plan | The following table summarizes stock option activity related to the Stock Incentive Plan: Stock Options (in whole dollars) Number of Weighted Weighted Aggregate Stock Options outstanding as of January 1, 2020 990,254 $ 24.36 6.0 years $ — Granted 1,083,665 9.17 Forfeited (348,696) 18.39 Exercised — — Stock Options outstanding as of December 31, 2020 1,725,223 $ 15.98 4.9 years $ 12 Granted 150,000 25.48 Forfeited (152,831) 16.47 Exercised (376,424) 21.62 3 Stock Options outstanding as of December 31, 2021 1,345,968 $ 15.41 4.9 years $ 14 Granted — — Forfeited (7,267) 24.39 Exercised (21,052) 22.36 — Stock Options outstanding as of December 31, 2022 1,317,649 $ 15.25 4.0 years $ 6 Vested and expected to vest at December 31, 2022 1,258,797 $ 15.08 3.9 years $ 6 Exercisable at December 31, 2022 750,887 $ 17.26 3.4 years $ 2 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Our goodwill balance and changes in carrying value by segment follows: (in millions) Products and Solutions ADI Global Distribution Total Balance at December 31, 2020 $ 2,037 $ 654 $ 2,691 Acquisitions — 5 5 Divestiture (2) — (2) Impact of foreign currency translation (25) (8) (33) Balance at December 31, 2021 2,010 651 2,661 Acquisitions 94 15 109 Divestitures — (4) (4) Impact of foreign currency translation (32) (10) (42) Balance at December 31, 2022 $ 2,072 $ 652 $ 2,724 |
Schedule of Intangible Assets With Finite Lives | The following table is a summary of the net carrying amount of intangible assets as of December 31: December 31, (in millions) 2022 2021 Intangible assets subject to amortization $ 295 $ 120 Indefinite-lived intangible assets 180 — Total intangible assets $ 475 $ 120 Intangible assets subject to amortization for the years ended December 31, consisted of the following: December 31, 2022 (in millions) Gross Accumulated Net Useful Lives Weighted Average Amortization Patents and technology $ 65 $ (28) $ 37 3 - 10 years 10 years Customer relationships 313 (117) 196 7 - 15 years 14 years Trademarks 14 (8) 6 10 years 10 years Software 175 (119) 56 2 - 7 years 6 years Total intangible assets $ 567 $ (272) $ 295 December 31, 2021 (in millions) Gross Accumulated Net Useful Lives Weighted Average Amortization Patents and technology $ 31 $ (23) $ 8 3 - 10 years 9 years Customer relationships 162 (106) 56 7 - 15 years 14 years Trademarks 14 (8) 6 10 years 10 years Software 162 (112) 50 2 - 7 years 6 years Total intangible assets $ 369 $ (249) $ 120 |
Estimated Aggregate Amortization On Intangible Assets | The estimated aggregate amortization on these intangible assets for each of the next five years as of December 31, 2022, follows: (in millions) Amortization Expense 2023 $ 39 2024 $ 37 2025 $ 36 2026 $ 31 2027 $ 25 |
Schedule of Indefinite-Lived Intangible Assets | The following table is a summary of the net carrying amount of intangible assets as of December 31: December 31, (in millions) 2022 2021 Intangible assets subject to amortization $ 295 $ 120 Indefinite-lived intangible assets 180 — Total intangible assets $ 475 $ 120 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Operating Lease Expense | The operating lease expense follows: Years Ended December 31, (in millions) 2022 2021 2020 Operating lease cost: Selling, general and administrative expenses $ 50 $ 46 $ 44 Cost of goods sold 19 17 17 Total operating lease costs $ 69 $ 63 $ 61 |
Summary of Carrying Amounts of Operating Leased Assets and Liabilities | The following table summarizes the carrying amounts of our operating leased assets and liabilities along with key inputs used to discount our lease liabilities: December 31, (in millions, except weighted-average data) Financial Statement Line Item 2022 2021 Operating lease assets Other assets $ 191 $ 141 Operating lease liabilities - current Accrued liabilities $ 37 $ 32 Operating lease liabilities - non-current Other liabilities $ 166 $ 120 Weighted-average remaining term 6.81 years 6.04 years Weighted-average incremental borrowing rate 5.78 % 5.42 % |
Maturities of Operating Lease Liabilities | The following table summarizes our future minimum lease payments under our non-cancelable leases as of December 31, 2022: (in millions) Commitments 2023 $ 47 2024 40 2025 35 2026 32 2027 27 Thereafter 70 Total lease payments 251 Less: Imputed interest 48 Present value of operating lease liabilities $ 203 |
Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases follows: Years Ended December 31, (in millions) 2022 2021 2020 Cash paid for operating leases $ 33 $ 33 $ 30 Non-cash activities: operating lease assets obtained in exchange for new operating lease liabilities (1) $ 97 $ 46 $ 26 (1) Includes $25 million of operating lease assets acquired from current year acquisitions. Refer to Note 3. Acquisitions to Consolidated Financial Statements. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt is comprised of the following: December 31, (in millions) 2022 2021 4.000% senior notes due 2029 $ 300 $ 300 Variable rate A&R Term B Facility 1,131 943 Gross debt 1,431 1,243 Less: current portion of long-term debt (12) (10) Less: unamortized deferred financing costs (15) (13) Total long-term debt $ 1,404 $ 1,220 |
Aggregate Required Principal Payments on Long-Term Debt Outstanding | Aggregate required principal payments on long-term debt outstanding at December 31, 2022, follows: (in millions) Payments 2023 $ 12 2024 12 2025 12 2026 11 2027 11 Thereafter 1,373 Total $ 1,431 |
Long-Term Debt (Tables)_2
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt is comprised of the following: December 31, (in millions) 2022 2021 4.000% senior notes due 2029 $ 300 $ 300 Variable rate A&R Term B Facility 1,131 943 Gross debt 1,431 1,243 Less: current portion of long-term debt (12) (10) Less: unamortized deferred financing costs (15) (13) Total long-term debt $ 1,404 $ 1,220 |
Aggregate Required Principal Payments on Long-Term Debt Outstanding | Aggregate required principal payments on long-term debt outstanding at December 31, 2022, follows: (in millions) Payments 2023 $ 12 2024 12 2025 12 2026 11 2027 11 Thereafter 1,373 Total $ 1,431 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Consolidated Balance Sheets and Pre-Tax Gain (Loss) in Accumulated Other Comprehensive Loss | The following table summarizes the fair value and presentation of derivative instruments in the Consolidated Balance Sheets as well as the pre-tax gain (loss) recorded in accumulated other comprehensive loss: Fair Value of Derivative Assets December 31, (in millions) Financial Statement Line Item 2022 2021 Derivatives designated as hedging instruments: Interest rate swaps Other current assets $ 23 $ — Interest rate swaps Other assets 22 7 Total derivative assets $ 45 $ 7 Fair Value of Derivative Liabilities December 31, (in millions) Financial Statement Line Item 2022 2021 Derivatives designated as hedging instruments: Interest rate swaps Accrued liabilities $ — $ 1 Total derivative liabilities $ — $ 1 Unrealized gain (loss) Accumulated other comprehensive loss $ 42 $ 6 |
Effect of Derivative Instruments Designated as Cash Flow Hedges | The following tables summarize the effect of derivative instruments designated as cash flow hedges in other comprehensive loss and the Consolidated Statements of Operations: Years Ended December 31, (in millions) Financial Statement Line Item 2022 2021 Gains recorded in accumulated other comprehensive loss, beginning of period: $ 6 $ — Current period gains recognized in other comprehensive income 42 6 Gains reclassified from accumulated other comprehensive loss to net income Interest expense, net (6) — Gains recorded in accumulated other comprehensive loss, end of period $ 42 $ 6 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table provides a summary of the carrying amount and fair value of outstanding debt: December 31, 2022 December 31, 2021 (in millions) Carrying Value Fair Value Carrying Value Fair Value Debt: 4.000% Senior Notes due 2029 $ 300 $ 242 $ 300 $ 294 Variable rate A&R Term B Facility 1,131 1,125 943 943 Total long-term debt $ 1,431 $ 1,367 $ 1,243 $ 1,237 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides a summary of the carrying amount and fair value of our interest rate swaps: December 31, 2022 December 31, 2021 (in millions) Carrying Value Quoted prices in Significant other Carrying Value Quoted prices in Significant other Assets: Interest rate swaps $ 45 $ — $ 45 $ 7 $ — $ 7 Liabilities: Interest rate swaps — — — 1 — 1 Total $ 45 $ — $ 45 $ 6 $ — $ 6 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Liabilities | Other current accrued liabilities consist of the following: December 31, (in millions) 2022 2021 Obligations payable under Indemnification Agreements $ 140 $ 140 Compensation, benefit and other employee-related 108 114 Customer rebate reserve 98 94 Product warranties 40 22 Current operating lease liability 37 32 Taxes payable 38 54 Other (1) 179 145 Total accrued liabilities $ 640 $ 601 (1) Other includes accruals for advertising, legal and professional reserves, freight, royalties, interest, and other miscellaneous items. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Reimbursement Agreement Liabilities | The following table summarizes information concerning the Reimbursement and Tax Matter Agreements’ liabilities: (in millions) Reimbursement Agreement Tax Matters Agreement Total Beginning balance, December 31, 2020 $ 591 $ 139 $ 730 Accruals for liabilities deemed probable and reasonably estimable (1) 146 11 157 Payments to Honeywell (140) (22) (162) Balance as of December 31, 2021 597 128 725 Accruals for liabilities deemed probable and reasonably estimable (1) 157 (2) $ 155 Payments to Honeywell (140) (20) $ (160) Balance as of December 31, 2022 $ 614 $ 106 $ 720 (1) Reimbursement Agreement liabilities deemed probable and reasonably estimable, however, it is possible we could pay $140 million per year (exclusive of any late payment fees up to 5% per annum) until the earlier of (1) December 31, 2043; or (2) December 31 of the third consecutive year during which the annual reimbursement obligation (including in respect of deferred payment amounts) has been less than $25 million. |
Summary of Reimbursement Agreement Liabilities Included in Balance Sheet Accounts | The liabilities related to the Reimbursement and Tax Matter Agreements are included in the following balance sheet accounts: Years Ended December 31, (in millions) 2022 2021 Accrued liabilities $ 140 $ 140 Obligations payable under Indemnification Agreements 580 585 Total indemnification liabilities $ 720 $ 725 |
Summary of Recorded Obligations for Product Warranties and Product Performance Guarantee | The following table summarizes information concerning recorded obligations for product warranties and product performance guarantees. December 31, (in millions) 2022 2021 2020 Beginning balance $ 23 $ 22 $ 25 Accruals for warranties/guarantees issued during the year 30 22 21 Adjustment of pre-existing warranties/guarantees (2) (3) (7) Settlement of warranty/guarantee claims (17) (18) (17) Reserve of acquired company at date of acquisition 14 — — Ending balance $ 48 $ 23 $ 22 |
Long-Term Purchase Commitment | Aggregate payments on these obligations at December 31, 2022, follows: (in millions) Payments 2023 $ 51 2024 50 2025 10 2026 4 2027 and thereafter — Total $ 115 |
Other Expense, net (Tables)
Other Expense, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Summary of Other Expenses, net | Years Ended December 31, (in millions) 2022 2021 2020 Reimbursement Agreement expense $ 157 $ 146 $ 146 Loss on extinguishment of debt — 41 — Return on pension assets (39) (9) (17) Settlement of pre-Spin-Off litigation 13 — — Other, net 4 (20) 18 Total other expenses, net $ 135 $ 158 $ 147 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Taxes | Years Ended December 31, (in millions) 2022 2021 2020 U.S. $ 124 $ 79 $ (93) Non-U.S. 294 274 194 Total $ 418 $ 353 $ 101 |
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision for income taxes consisted of the following: Years Ended December 31, (in millions) 2022 2021 2020 Current: U.S. $ 95 $ 60 $ 21 Non-U.S. 43 45 21 Total current $ 138 $ 105 $ 42 Deferred: U.S. $ (13) $ 5 $ 11 Non-U.S. 10 1 11 Total deferred $ (3) $ 6 $ 22 Total provision $ 135 $ 111 $ 64 |
Schedule of Federal Statutory Income Tax Rate Reconciliation with Effective Income Tax Rate | The reconciliation of income tax computed at the U.S. federal statutory tax rate to the effective income tax rate is as follows: Years Ended December 31, 2022 2021 2020 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % Impact of foreign operations (1.6) (0.2) (5.4) U.S. state income taxes 3.0 3.6 6.4 Non-deductible indemnification costs 7.7 8.4 29.0 Executive compensation over $1 million 1.0 0.9 2.5 Other non-deductible expenses (0.6) 0.4 3.7 U.S. taxation of foreign earnings 1.0 1.4 3.5 Tax credits (0.5) (0.7) (0.2) Change in tax rates — (1.0) 1.3 All other items, net 1.3 (2.5) 1.8 Effective income tax rate 32.3 % 31.3 % 63.6 % |
Schedule of Deferred Tax Liabilities and Assets | Deferred income taxes reflect the net impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. The tax effects of the temporary differences as of December 31, 2022 and 2021 are as follows: Years Ended December 31, (in millions) 2022 2021 Deferred tax assets: Pension $ 16 $ 24 Other asset basis differences 54 63 Operating lease liabilities 43 33 Accruals and reserves 63 50 Net operating and capital losses 49 48 Other 2 2 Gross deferred tax assets 227 220 Valuation allowance (63) (63) Total deferred tax assets $ 164 $ 157 Deferred tax liabilities: Other intangible assets $ (34) $ (39) Property, plant and equipment (24) (23) Operating lease assets (40) (33) Other (7) (5) Total deferred tax liabilities $ (105) $ (100) Net deferred tax asset $ 59 $ 57 |
Summary of Valuation Allowance | The rollforward of the valuation allowance on deferred taxes is as follows for the periods indicated: Years Ended December 31, (in millions) 2022 2021 2020 Beginning balance $ 63 $ 60 $ 32 Additions — 3 28 Ending balance $ 63 $ 63 $ 60 |
Schedule of Unrecognized Tax Benefits Roll Forward | The table below sets forth the changes to our gross unrecognized tax benefit as a result of uncertain tax positions, excluding interest and penalties for the years ended December 31, 2022, 2021 and 2020. We do not anticipate that the total unrecognized tax benefits will change significantly within the next twelve months. Years Ended December 31, (in millions) 2022 2021 2020 Unrecognized tax benefits at beginning of year $ 16 $ 10 $ 6 Additions based on tax positions related to the respective year 6 6 4 Unrecognized tax benefits at end of year $ 22 $ 16 10 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per share follows: Years Ended December 31, (in millions) 2022 2021 2020 Numerator for Basic and Diluted Earnings Per Share: Net income $ 283 $ 242 $ 37 Denominator for Basic and Diluted Earnings Per Share: Weighted average basic number of common shares outstanding 146 144 125 Plus: dilutive effect of common stock equivalents 3 4 1 Weighted average diluted number of common shares outstanding 149 148 126 Earnings per share: Basic $ 1.94 $ 1.68 $ 0.30 Diluted $ 1.90 $ 1.63 $ 0.29 |
Geographic Areas - Financial _2
Geographic Areas - Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segments, Geographical Areas [Abstract] | |
Schedule of Geographic Areas | Revenue and long-lived assets by geography are as follows: Net Revenue (1) Long-lived Assets (2) Years Ended December 31, December 31, (in millions) 2022 2021 2020 2022 2021 2020 U.S. $ 4,795 $ 4,181 $ 3,543 $ 347 $ 244 $ 260 Europe 1,111 1,196 1,121 131 139 144 Other International 464 469 407 79 46 47 Total $ 6,370 $ 5,846 $ 5,071 $ 557 $ 429 $ 451 (1) Net revenue between geographic areas approximate market and is not significant. Net revenue is classified according to their country of origin. Included in U.S. net revenue are export sales of $38 million, $26 million and $21 million for the years ended December 31, 2022, 2021 and 2020, respectively. (2) Long-lived assets are comprised of property, plant and equipment, net and right-of-use lease assets. |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cost of goods sold | $ (4,604,000,000) | $ (4,262,000,000) | $ (3,727,000,000) |
Selling, general and administrative expenses | (974,000,000) | (909,000,000) | (889,000,000) |
Research and development expense | 111,000,000 | 86,000,000 | 74,000,000 |
Restructuring and impairment charges | $ 35,000,000 | 0 | 40,000,000 |
Revision of Prior Period, Reclassification, Adjustment | |||
Cost of goods sold | 23,000,000 | ||
Revision of Prior Period, Reclassification, Adjustment | Intangible Asset Amortization | |||
Cost of goods sold | 22,000,000 | ||
Selling, general and administrative expenses | $ 7,000,000 | 8,000,000 | |
Revision of Prior Period, Reclassification, Adjustment | Restructuring and Impairment Charges | |||
Cost of goods sold | (9,000,000) | ||
Selling, general and administrative expenses | (28,000,000) | ||
Research and development expense | $ 3,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies -Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Raw materials | $ 251 | $ 174 | |
Work in process | 25 | 17 | |
Finished products | 699 | 549 | |
Total inventories, net | 975 | 740 | |
Expense related to inventory obsolescence | $ 13 | $ 8 | $ 31 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property, Plant, and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 1,039 | $ 933 | |
Accumulated depreciation | (673) | (646) | |
Total property, plant and equipment, net | 366 | 287 | |
Depreciation | 59 | 58 | $ 56 |
Machinery and equipment | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 647 | 602 | |
Machinery and equipment | Minimum | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, useful lives (in years) | 3 years | ||
Machinery and equipment | Maximum | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, useful lives (in years) | 16 years | ||
Buildings and improvements | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 303 | 292 | |
Buildings and improvements | Minimum | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, useful lives (in years) | 10 years | ||
Buildings and improvements | Maximum | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, useful lives (in years) | 50 years | ||
Construction in progress | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 80 | 35 | |
Land | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 9 | $ 4 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Royalty (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Disaggregation Of Revenue [Line Items] | |
Trademark license agreement (in years) | 40 years |
Honeywell | Trademarks | Selling, General and Administrative Expenses | |
Disaggregation Of Revenue [Line Items] | |
Royalty fee percentage of net revenue | 1.50% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Reimbursement Agreement (Details) - Honeywell - USD ($) | Oct. 14, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Summary Of Significant Accounting Policies [Line Items] | ||||
Indemnity liability annual cap | $ 140,000,000 | $ 140,000,000 | $ 140,000,000 | |
Indemnification Agreement | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Indemnification payable percentage of payments | 90% | |||
Indemnification payable percentage of net insurance receipts | 90% | |||
Indemnification payable percentage of net proceeds received | 90% | |||
Indemnification Agreement | Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Indemnity liability annual cap | $ 140,000,000 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Tax Indemnification Agreement (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Tax Matters Agreement | ||
Income Taxes [Line Items] | ||
Indemnity outstanding for past and potential future tax payments | $ 106 | $ 128 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Compensation expense related to employer contributions | $ 22 | $ 19 | $ 18 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Pension (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Defined benefit plan net actuarial gains and losses in excess of fair value of plan assets or plan's projected benefit obligation percentage | 10% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 05, 2022 | Mar. 31, 2022 | Feb. 14, 2022 | |
Business Acquisition [Line Items] | ||||||
Net revenue | $ 6,370 | $ 5,846 | $ 5,071 | |||
Teknique Limited | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of capital stock acquired | 100% | |||||
Electronic Customer Distributors, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of capital stock acquired | 100% | |||||
First Alert | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of capital stock acquired | 100% | |||||
Net revenue | $ 341 | |||||
Acquisition costs | 11 | |||||
ADI Global Distribution | ||||||
Business Acquisition [Line Items] | ||||||
Net revenue | $ 3,587 | $ 3,378 | $ 2,950 | |||
ADI Global Distribution | Arrow Wire and Cable, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of capital stock acquired | 100% |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,724 | $ 2,661 | $ 2,691 | |
First Alert | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 2 | |||
Accounts receivable | 72 | |||
Inventories | 117 | |||
Property, plant and equipment | 82 | |||
Goodwill | 86 | |||
Other intangible assets | 349 | |||
Other assets | 33 | |||
Total assets acquired | 741 | |||
Accounts payable | 57 | |||
Other liabilities | 69 | |||
Total liabilities assumed | 126 | |||
Net assets acquired | $ 615 |
Segment Financial Data - Additi
Segment Financial Data - Additional Information (Details) home in Millions | 12 Months Ended |
Dec. 31, 2022 Segment home | |
Segment Reporting [Abstract] | |
Number of operating segments | Segment | 2 |
Number of homes | home | 150 |
Segment Financial Data - Schedu
Segment Financial Data - Schedule of Segment Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net revenue | |||
Total net revenue | $ 6,370 | $ 5,846 | $ 5,071 |
Income from operations | |||
Total income from operations | 611 | 559 | 311 |
Depreciation and amortization | |||
Total depreciation and amortization | 94 | 88 | 86 |
Capital expenditures | |||
Total capital expenditures | 85 | 63 | 70 |
Products and Solutions | |||
Net revenue | |||
Total net revenue | 2,783 | 2,468 | 2,121 |
Income from operations | |||
Total income from operations | 527 | 541 | 407 |
Depreciation and amortization | |||
Total depreciation and amortization | 69 | 65 | 63 |
Capital expenditures | |||
Total capital expenditures | 55 | 37 | 41 |
ADI Global Distribution | |||
Net revenue | |||
Total net revenue | 3,587 | 3,378 | 2,950 |
Income from operations | |||
Total income from operations | 313 | 268 | 194 |
Depreciation and amortization | |||
Total depreciation and amortization | 14 | 11 | 12 |
Capital expenditures | |||
Total capital expenditures | 29 | 24 | 15 |
Corporate | |||
Income from operations | |||
Total income from operations | (229) | (250) | (290) |
Depreciation and amortization | |||
Total depreciation and amortization | 11 | 12 | 11 |
Capital expenditures | |||
Total capital expenditures | $ 1 | $ 2 | $ 14 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 Segment | |
Revenue from Contract with Customer [Abstract] | |
Number of operating segments | 2 |
Percentage of revenue satisfied over time | 2% |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligation (Details) | Dec. 31, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period (in years) | 1 year |
Revenue Recognition - Revenue B
Revenue Recognition - Revenue By Business Line and Geographic Location (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation Of Revenue [Line Items] | |||
Net revenue | $ 6,370 | $ 5,846 | $ 5,071 |
Products and Solutions | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | 2,783 | 2,468 | 2,121 |
Products and Solutions | Air | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | 953 | 858 | 761 |
Products and Solutions | Safety and Security | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | 913 | 667 | 561 |
Products and Solutions | Energy | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | 595 | 594 | 505 |
Products and Solutions | Water | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | 322 | 349 | 294 |
ADI Global Distribution | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | 3,587 | 3,378 | 2,950 |
ADI Global Distribution | U.S. and Canada | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | 3,087 | 2,814 | 2,427 |
ADI Global Distribution | EMEA | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | 474 | 523 | 480 |
ADI Global Distribution | APAC | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | $ 26 | $ 41 | $ 43 |
Restructuring Expenses - Additi
Restructuring Expenses - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost And Reserve [Line Items] | |||
Restructuring and impairment charges | $ 35,000,000 | $ 0 | $ 40,000,000 |
Charges | $ 26,000,000 | $ 0 | 40,000,000 |
Minimum | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring initiatives execution (in months) | 12 months | ||
Maximum | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring initiatives execution (in months) | 24 months | ||
Products and Solutions | |||
Restructuring Cost And Reserve [Line Items] | |||
Charges | $ 29,000,000 | 19,000,000 | |
ADI Global Distribution | |||
Restructuring Cost And Reserve [Line Items] | |||
Charges | 2,000,000 | 6,000,000 | |
Corporate | |||
Restructuring Cost And Reserve [Line Items] | |||
Charges | $ 4,000,000 | $ 15,000,000 |
Restructuring Expenses - Summar
Restructuring Expenses - Summary of Restructuring Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | |||
Beginning of year | $ 9 | $ 24 | $ 19 |
Charges | 26 | 0 | 40 |
Usage | (5) | (11) | (35) |
Other | (3) | (4) | 0 |
End of year | $ 27 | $ 9 | $ 24 |
Pension Plans - Summary of Bala
Pension Plans - Summary of Balance Sheet Impact, Including Benefit Obligations, Assets and Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Actual return on plan assets | $ (39) | $ (9) | $ (17) |
Pension Plan | |||
Change in benefit obligation: | |||
Actuarial (gains) losses | (111) | ||
Pension Plan | U.S. | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 348 | 374 | 344 |
Service cost | 7 | 7 | 7 |
Interest cost | 11 | 10 | 11 |
Actuarial (gains) losses | (66) | (20) | 38 |
Net benefits paid | (18) | (5) | (4) |
Settlements | (1) | (18) | (22) |
Other | 0 | 0 | 0 |
Foreign currency translation | 0 | 0 | 0 |
Benefit obligation at end of year | 281 | 348 | 374 |
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Fair value of plan assets at beginning of year | 342 | 340 | 331 |
Actual return on plan assets | (62) | 25 | 35 |
Employer contributions | 1 | 0 | 1 |
Net benefits paid | (18) | (5) | (4) |
Settlements | (1) | (18) | (22) |
Other | 0 | 0 | (1) |
Foreign currency translation | 0 | 0 | 0 |
Fair value of plan assets at end of year | 262 | 342 | 340 |
Funded status of plans (non-current) | (19) | (6) | (34) |
Pension Plan | Non-U.S. Plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 141 | 161 | 137 |
Service cost | 5 | 7 | 7 |
Interest cost | 2 | 1 | 1 |
Actuarial (gains) losses | (45) | (18) | 6 |
Net benefits paid | 0 | 0 | 0 |
Settlements | 0 | (1) | (6) |
Other | 1 | 1 | 2 |
Foreign currency translation | (8) | (10) | 14 |
Benefit obligation at end of year | 96 | 141 | 161 |
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Fair value of plan assets at beginning of year | 32 | 28 | 27 |
Actual return on plan assets | (6) | 2 | 0 |
Employer contributions | 3 | 3 | 2 |
Net benefits paid | 0 | 1 | 0 |
Settlements | 0 | (1) | (6) |
Other | (1) | 0 | 3 |
Foreign currency translation | (1) | (1) | 2 |
Fair value of plan assets at end of year | 27 | 32 | 28 |
Funded status of plans (non-current) | $ (69) | $ (109) | $ (133) |
Pension Plans - Additional Info
Pension Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Recognized in other accrued liabilities | $ 2 | $ 1 | |
Recognized in other liabilities | 86 | 114 | |
U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset gains from higher actual return on plan assets | 78 | ||
SWITZERLAND | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset gains from higher actual return on plan assets | 3 | ||
NETHERLANDS | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset gains from higher actual return on plan assets | 3 | ||
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial gain (loss) | 111 | ||
Gain due to change in discount rate | 140 | ||
Gains on demographic assumptions | 7 | ||
Losses from other changes | (10) | ||
Asset gains from higher actual return on plan assets | $ 85 | ||
Pension Plan | Fixed Income Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension assets allocation targets percentage | 64% | ||
Pension Plan | Global Equity Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension assets allocation targets percentage | 22% | ||
Pension Plan | Global Real Estate Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension assets allocation targets percentage | 7% | ||
Pension Plan | Cash and Other Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension assets allocation targets percentage | 7% | ||
Pension Plan | U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial gain (loss) | $ 66 | $ 20 | $ (38) |
Expected rate of return on plan assets | 5.30% | 4.70% | 5.40% |
Pension contribution | $ 1 | ||
Pension Plan | Non-U.S. Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial gain (loss) | $ 45 | $ 18 | $ (6) |
Expected rate of return on plan assets | 1.30% | 2.30% | 2.70% |
Pension contribution | $ 3 | ||
Expected pension contribution in the next fiscal year | 3 | ||
Pension Plan | Experience Gains | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial gain (loss) | $ (11) |
Pension Plans - Summary of Accu
Pension Plans - Summary of Accumulated Other Comprehensive (Loss) Associated with Pension Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Actual return on plan assets | $ (39) | $ (9) | $ (17) | |
Pension Plan | U.S. | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Prior service (credit) cost | 0 | (2) | ||
Net actuarial loss (gain) | 13 | 2 | ||
Net amount recognized | 13 | 0 | ||
Total assets at fair value | 262 | 342 | 340 | $ 331 |
Actual return on plan assets | (62) | 25 | 35 | |
Employer contributions | 1 | 0 | 1 | |
Defined Benefit Plan Plan Assets Benefits Paid Net Of Benefits Received | (18) | (5) | (4) | |
Defined Benefit Plan, Plan Assets, Payment for Settlement | (1) | (18) | (22) | |
Other | 0 | 0 | 1 | |
Defined Benefit Plan, Plan Assets, Foreign Currency Translation Gain (Loss) | 0 | 0 | 0 | |
Defined Benefit Plan, Funded (Unfunded) Status of Plan | $ (19) | $ (6) | $ (34) | |
Expected rate of return on plan assets | 5.30% | 4.70% | 5.40% | |
Pension Plan | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Prior service (credit) cost | $ 2 | $ 0 | ||
Net actuarial loss (gain) | (8) | (2) | ||
Net amount recognized | (6) | (2) | ||
Total assets at fair value | 27 | 32 | $ 28 | $ 27 |
Actual return on plan assets | (6) | 2 | 0 | |
Employer contributions | 3 | 3 | 2 | |
Defined Benefit Plan Plan Assets Benefits Paid Net Of Benefits Received | 0 | 1 | 0 | |
Defined Benefit Plan, Plan Assets, Payment for Settlement | 0 | (1) | (6) | |
Other | 1 | 0 | (3) | |
Defined Benefit Plan, Plan Assets, Foreign Currency Translation Gain (Loss) | (1) | (1) | 2 | |
Defined Benefit Plan, Funded (Unfunded) Status of Plan | $ (69) | $ (109) | $ (133) | |
Expected rate of return on plan assets | 1.30% | 2.30% | 2.70% |
Pension Plans - Summary of Net
Pension Plans - Summary of Net Periodic Benefit (Income) Cost and Other Amounts Recognized in Comprehensive Income (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 7 | $ 7 | $ 7 |
Interest cost | 11 | 10 | 11 |
Expected return on plan assets | (17) | (16) | (17) |
Amortization of prior service credit | (1) | (1) | (1) |
Amortization of actuarial (gains) losses | 0 | 0 | 0 |
Other | 0 | 0 | 3 |
Net periodic benefit (income) cost | 0 | 0 | 3 |
Non-U.S. Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 5 | 7 | 7 |
Interest cost | 2 | 1 | 1 |
Expected return on plan assets | (1) | (1) | (1) |
Amortization of prior service credit | 0 | 0 | 0 |
Amortization of actuarial (gains) losses | (33) | (3) | 6 |
Other | 0 | 0 | 0 |
Net periodic benefit (income) cost | $ (27) | $ 4 | $ 13 |
Pension Plans - Summary of Ne_2
Pension Plans - Summary of Net Periodic Benefit (Income) Cost Other Than The Service Cost Included in Other Expense, Net (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial (gains) losses | $ (66) | $ (20) | $ 38 |
Prior service costs arising during the year | 0 | 0 | 0 |
Excess return on plan assets | 79 | (9) | (17) |
Actuarial (gains) losses recognized during the year | 0 | 0 | (2) |
Other | 0 | 1 | 0 |
Total recognized in other comprehensive loss (income) | 13 | (28) | 19 |
Total recognized in net periodic benefit (income) cost and other comprehensive loss (income) | 13 | (28) | 22 |
2023 | 22 | ||
2024 | 22 | ||
2025 | 22 | ||
2026 | 22 | ||
2027 | 22 | ||
2028-2032 | 105 | ||
Non-U.S. Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial (gains) losses | (45) | (18) | 6 |
Prior service costs arising during the year | 2 | 0 | 0 |
Excess return on plan assets | 6 | 0 | 0 |
Actuarial (gains) losses recognized during the year | 33 | 3 | (6) |
Other | 0 | (1) | 1 |
Total recognized in other comprehensive loss (income) | (4) | (16) | 1 |
Total recognized in net periodic benefit (income) cost and other comprehensive loss (income) | (31) | $ (12) | $ 14 |
2023 | 3 | ||
2024 | 3 | ||
2025 | 3 | ||
2026 | 3 | ||
2027 | 3 | ||
2028-2032 | $ 26 |
Pension Plans - Summary of Sign
Pension Plans - Summary of Significant Actuarial Assumptions Used in Determining Benefit Obligations and Net Periodic Benefit (Income) Cost (Details) - Pension Plan | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
U.S. | |||
Actuarial assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 3.10% | 3% | 2.70% |
Interest crediting rate | 6% | 6% | 6% |
Expected annual rate of compensation increase | 3.20% | 3.20% | 3.50% |
Actuarial assumptions used to determine net periodic benefit (income) cost for the year ended December 31: | |||
Discount rate - benefit obligation | 5.20% | 2.70% | 3.30% |
Interest crediting rate | 6% | 6% | 6% |
Expected rate of return on plan assets | 5.30% | 4.70% | 5.40% |
Expected annual rate of compensation increase | 3.50% | 3.50% | 3.40% |
Non-U.S. Plans | |||
Actuarial assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 1.20% | 1.20% | 0.70% |
Interest crediting rate | 1.50% | 1.50% | 1.50% |
Expected annual rate of compensation increase | 2.40% | 2.40% | 2.40% |
Actuarial assumptions used to determine net periodic benefit (income) cost for the year ended December 31: | |||
Discount rate - benefit obligation | 3.40% | 0.70% | 1.10% |
Interest crediting rate | 2.50% | 1.50% | 1.50% |
Expected rate of return on plan assets | 1.30% | 2.30% | 2.70% |
Expected annual rate of compensation increase | 2.60% | 2.40% | 2.40% |
Pension Plans - Summary of Amou
Pension Plans - Summary of Amounts Relate to Pension Plans with Accumulated Benefit Obligations Exceeding Fair Value of Plan Assets (Details) - Pension Plan - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
U.S. | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 281 | $ 3 |
Accumulated benefit obligation | 278 | 2 |
Fair value of plan assets | 262 | 0 |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | 96 | 139 |
Accumulated benefit obligation | 86 | 124 |
Fair value of plan assets | $ 27 | $ 31 |
Pension Plans - Summary of Pens
Pension Plans - Summary of Pension Plan with Projected Benefit Obligations Exceeding Fair Value of Plan Assets (Details) - Pension Plan - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
U.S. | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 281 | $ 348 |
Accumulated benefit obligation | 278 | 337 |
Fair value of plan assets | 262 | 342 |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | 96 | 141 |
Accumulated benefit obligation | 87 | 125 |
Fair value of plan assets | $ 27 | $ 32 |
Pension Plans - Summary of NAV
Pension Plans - Summary of NAV and Fair Values of U.S. Pension Plans Assets by Asset Category (Details) - Pension Plan - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
U.S. | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | $ 262 | $ 342 | $ 340 | $ 331 |
Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 27 | 32 | 28 | 27 |
Non-U.S. Plans | Equity | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Non-U.S. Plans | Government bonds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Non-U.S. Plans | Other | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 19 | 20 | ||
Non-U.S. Plans | Insurance contracts | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 6 | 10 | ||
Level 1 | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Level 1 | Non-U.S. Plans | Equity | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Level 1 | Non-U.S. Plans | Government bonds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 1 | Non-U.S. Plans | Other | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 1 | Non-U.S. Plans | Insurance contracts | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 2 | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Level 2 | Non-U.S. Plans | Equity | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 2 | Non-U.S. Plans | Government bonds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Level 2 | Non-U.S. Plans | Other | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 2 | Non-U.S. Plans | Insurance contracts | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 3 | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 25 | 30 | $ 26 | $ 24 |
Level 3 | Non-U.S. Plans | Equity | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 3 | Non-U.S. Plans | Government bonds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 3 | Non-U.S. Plans | Other | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 19 | 20 | ||
Level 3 | Non-U.S. Plans | Insurance contracts | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 6 | 10 | ||
NAV | U.S. | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 262 | 342 | ||
NAV | U.S. | Cash and cash equivalents | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 6 | 4 | ||
NAV | U.S. | Equity | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 45 | 95 | ||
NAV | U.S. | Investment funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 16 | ||
NAV | U.S. | Government bonds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 21 | 39 | ||
NAV | U.S. | Corporate bonds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 132 | 153 | ||
NAV | U.S. | Real estate / property | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 29 | 35 | ||
NAV | U.S. | Other | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | $ 29 | $ 0 |
Pension Plans - Summary of Fair
Pension Plans - Summary of Fair Values of Non-U.S. Pension Plans Assets by Asset Category (Details) - Pension Plan - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
U.S. | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | $ 262 | $ 342 | $ 340 | $ 331 |
Projected benefit obligation | 281 | 348 | ||
Accumulated benefit obligation | 278 | 337 | ||
Fair value of plan assets | 262 | 342 | ||
Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 27 | 32 | 28 | 27 |
Projected benefit obligation | 96 | 141 | ||
Accumulated benefit obligation | 87 | 125 | ||
Fair value of plan assets | 27 | 32 | ||
Equity | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Government bonds | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Insurance contracts | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 6 | 10 | ||
Other | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 19 | 20 | ||
Level 1 | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Level 1 | Equity | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Level 1 | Government bonds | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 1 | Insurance contracts | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 1 | Other | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 2 | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Level 2 | Equity | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 2 | Government bonds | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 1 | 1 | ||
Level 2 | Insurance contracts | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 2 | Other | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 3 | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 25 | 30 | $ 26 | $ 24 |
Level 3 | Equity | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 3 | Government bonds | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 0 | 0 | ||
Level 3 | Insurance contracts | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | 6 | 10 | ||
Level 3 | Other | Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total assets at fair value | $ 19 | $ 20 |
Pension Plans - Summary of Chan
Pension Plans - Summary of Changes in Fair Value of Level 3 Assets for Non-U.S (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Actual return on plan assets | $ (39) | $ (9) | $ (17) |
Pension Plan | Non-U.S. Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets at beginning of year | 32 | 28 | 27 |
Actual return on plan assets | (6) | 2 | 0 |
Fair value of plan assets at end of year | 27 | 32 | 28 |
Level 3 | Pension Plan | Non-U.S. Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets at beginning of year | 30 | 26 | 24 |
Actual return on plan assets | (3) | 1 | 0 |
Purchases, sales and settlements, net | 4 | (1) | |
Other | (2) | (1) | 3 |
Fair value of plan assets at end of year | $ 25 | $ 30 | $ 26 |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | Level 3 | Level 3 | Level 3 |
Pension Plans - Summary of Bene
Pension Plans - Summary of Benefit Payments (Details) - Pension Plan $ in Millions | Dec. 31, 2022 USD ($) |
U.S. | |
Defined Benefit Plan Disclosure [Line Items] | |
2023 | $ 22 |
2024 | 22 |
2025 | 22 |
2026 | 22 |
2027 | 22 |
2028-2032 | 105 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2023 | 3 |
2024 | 3 |
2025 | 3 |
2026 | 3 |
2027 | 3 |
2028-2032 | $ 26 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of awards granted (in shares) | 16,000,000 | ||
Number of shares available for grant (in shares) | 4,000,000 | ||
Stock-based compensation expense, net of tax | $ 48 | $ 36 | $ 30 |
Vesting period (in years) | 3 years | ||
Cash received from stock options exercised | $ 9 | ||
Number of stock options exercised | 21,052 | 376,424 | 0 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Remaining term of unvested awards (in years) | 1 year 5 months | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Expiration period (in years) | 7 years | ||
Total unrecognized compensation cost related to non-vested stock options granted | $ 1 | ||
Remaining term of unvested awards (in years) | 1 year 6 months | ||
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Remaining term of unvested awards (in years) | 1 year 9 months |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Summary of Fair Values Estimated for PSUs (Details) - PSUs | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected stock price volatility | 59.01% | 47.43% | 33.70% |
Risk-free interest rate % | 1.58% | 0.20% | 0.80% |
Expected term (in years) | 2 years 10 months 20 days | 2 years 10 months 9 days | 2 years 9 months 14 days |
Dividend yield | 0% | 0% | 0% |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Summarized RSU and PSU Activity Related to Stock Incentive Plan (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
PSUs | |||
Number of Performance Stock Units | |||
Non-vested, beginning balance (in shares) | 1,317,560 | 912,800 | 276,281 |
Granted (in shares) | 672,453 | 500,227 | 795,099 |
Vested (in shares) | (155,803) | 0 | 0 |
Forfeited (in shares) | (111,830) | (95,467) | (158,580) |
Non-vested, ending balance (in shares) | 1,722,380 | 1,317,560 | 912,800 |
Weighted Average Grant Date Fair Value Per Share | |||
Non-vested, beginning balance (in dollars per share) | $ 22.06 | $ 10.09 | $ 24.33 |
Granted (in dollars per share) | 36.11 | 42.98 | 6.33 |
Vested (in dollars per share) | 24.20 | 0 | 0 |
Forfeited (in dollars per share) | 23.91 | 17.20 | 16.06 |
Non-vested, ending balance (in dollars per share) | $ 27.23 | $ 22.06 | $ 10.09 |
RSUs | |||
Number of Performance Stock Units | |||
Non-vested, beginning balance (in shares) | 3,477,133 | 4,286,964 | 3,518,250 |
Granted (in shares) | 1,799,632 | 1,142,310 | 2,262,676 |
Vested (in shares) | (1,664,167) | (1,714,810) | (921,060) |
Forfeited (in shares) | (201,636) | (237,331) | (572,902) |
Non-vested, ending balance (in shares) | 3,410,962 | 3,477,133 | 4,286,964 |
Weighted Average Grant Date Fair Value Per Share | |||
Non-vested, beginning balance (in dollars per share) | $ 19.52 | $ 17.38 | $ 23.05 |
Granted (in dollars per share) | 22.69 | 27.39 | 10.55 |
Vested (in dollars per share) | 20.46 | 19.27 | 21.07 |
Forfeited (in dollars per share) | 21.89 | 20.44 | 19.27 |
Non-vested, ending balance (in dollars per share) | $ 20.57 | $ 19.52 | $ 17.38 |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans - Unrecognized Compensation Cost Related to Unvested Awards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 41 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 23 |
Weighted-Average Period (in years) | 1 year 5 months |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 18 |
Weighted-Average Period (in years) | 1 year 9 months |
Stock-Based Compensation Plan_6
Stock-Based Compensation Plans - Fair Value of Shares Vested (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of RSUs and PSUs vested | $ 40 | $ 48 | $ 9 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of RSUs and PSUs vested | 36 | $ 48 | $ 9 |
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of RSUs and PSUs vested | $ 4 |
Stock-Based Compensation Plan_7
Stock-Based Compensation Plans - Summary of Fair Value of Stock Options (Details) - Stock Options | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected stock price volatility | 34% | |
Expected stock price volatility, minimum | 31% | |
Expected stock price volatility, maximum | 37% | |
Expected term of options (in years) | 5 years | 4 years 6 months |
Expected dividend yield | 0% | 0% |
Risk-free interest rate | 0.77% | |
Risk-free interest rate, minimum | 0.25% | |
Risk-free interest rate, maximum | 1.41% |
Stock-Based Compensation Plan_8
Stock-Based Compensation Plans - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Stock Options | ||||
Options outstanding, beginning balances (in shares) | 1,345,968 | 1,725,223 | 990,254 | |
Granted (in shares) | 0 | 150,000 | 1,083,665 | |
Forfeited (in shares) | (7,267) | (152,831) | (348,696) | |
Exercised (in shares) | (21,052) | (376,424) | 0 | |
Options outstanding, ending balances (in shares) | 1,317,649 | 1,345,968 | 1,725,223 | 990,254 |
Vested and expected to vest (in shares) | 1,258,797 | |||
Exercisable (in shares) | 750,887 | |||
Weighted Average Exercise Price | ||||
Options outstanding, beginning balance (in dollars per share) | $ 15.41 | $ 15.98 | $ 24.36 | |
Granted (in dollars per share) | 0 | 25.48 | 9.17 | |
Forfeited (in dollars per share) | 24.39 | 16.47 | 18.39 | |
Exercised (in dollars per share) | 22.36 | 21.62 | 0 | |
Options outstanding, ending balance (in dollars per share) | 15.25 | $ 15.41 | $ 15.98 | $ 24.36 |
Vested and expected to vest (in dollars per share) | 15.08 | |||
Exercisable (in dollars per share) | $ 17.26 | |||
Stock Options Additional Disclosures | ||||
Weighted Average Contractual Life (in years) | 4 years | 4 years 10 months 24 days | 4 years 10 months 24 days | 6 years |
Weighted Average Contractual Life (in years), vested and expected to vest | 3 years 10 months 24 days | |||
Weighted Average Contractual Life (in years), exercisable | 3 years 4 months 24 days | |||
Aggregate Intrinsic Value, beginning balance | $ 14 | $ 12 | $ 0 | |
Aggregate Intrinsic Value, exercised | 0 | 3 | ||
Aggregate Intrinsic Value, ending balance | 6 | $ 14 | $ 12 | $ 0 |
Aggregate Intrinsic Value, vested and expected to vest | 6 | |||
Aggregate Intrinsic Value, exercisable | $ 2 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net - Schedule of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 2,661 | $ 2,691 |
Acquisitions | 109 | 5 |
Divestiture | (4) | (2) |
Impact of foreign currency translation | (42) | (33) |
Goodwill, ending balance | 2,724 | 2,661 |
Products and Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 2,010 | 2,037 |
Acquisitions | 94 | 0 |
Divestiture | 0 | (2) |
Impact of foreign currency translation | (32) | (25) |
Goodwill, ending balance | 2,072 | 2,010 |
ADI Global Distribution | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 651 | 654 |
Acquisitions | 15 | 5 |
Divestiture | (4) | 0 |
Impact of foreign currency translation | (10) | (8) |
Goodwill, ending balance | $ 652 | $ 651 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Summary of Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets subject to amortization | $ 295 | $ 120 |
Indefinite-lived intangible assets | 180 | 0 |
Total intangible assets | $ 475 | $ 120 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Schedule of Other Intangible Assets With Finite Lives (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 567 | $ 369 |
Accumulated Amortization | (272) | (249) |
Net Carrying Amount | 295 | 120 |
Patent and Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 65 | 31 |
Accumulated Amortization | (28) | (23) |
Net Carrying Amount | $ 37 | $ 8 |
Weighted Average Amortization (in years) | 10 years | 9 years |
Patent and Technology | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Useful lives (in years) | 3 years | 3 years |
Patent and Technology | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Useful lives (in years) | 10 years | 10 years |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 313 | $ 162 |
Accumulated Amortization | (117) | (106) |
Net Carrying Amount | $ 196 | $ 56 |
Weighted Average Amortization (in years) | 14 years | 14 years |
Customer Relationships | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Useful lives (in years) | 7 years | 7 years |
Customer Relationships | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Useful lives (in years) | 15 years | 15 years |
Trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 14 | $ 14 |
Accumulated Amortization | (8) | (8) |
Net Carrying Amount | $ 6 | $ 6 |
Weighted Average Amortization (in years) | 10 years | 10 years |
Trademarks | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Useful lives (in years) | 10 years | 10 years |
Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 175 | $ 162 |
Accumulated Amortization | (119) | (112) |
Net Carrying Amount | $ 56 | $ 50 |
Weighted Average Amortization (in years) | 6 years | 6 years |
Software | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Useful lives (in years) | 2 years | 2 years |
Software | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Useful lives (in years) | 7 years | 7 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible asset amortization | $ 35 | $ 30 | $ 30 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, net - Estimated Aggregate Amortization on Intangible Assets (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 39 |
2024 | 37 |
2025 | 36 |
2026 | 31 |
2027 | $ 25 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee Lease Description [Line Items] | |||
Total operating lease costs | $ 69 | $ 63 | $ 61 |
Selling, General and Administrative Expenses | |||
Lessee Lease Description [Line Items] | |||
Total operating lease costs | 50 | 46 | 44 |
Cost of goods sold | |||
Lessee Lease Description [Line Items] | |||
Total operating lease costs | $ 19 | $ 17 | $ 17 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Variable lease costs | $ 19 | $ 17 | $ 16 |
Leases - Summary of Lease Recog
Leases - Summary of Lease Recognized Related to Operating Leases (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating lease assets | $ 191 | $ 141 |
Operating lease liabilities - current | 37 | 32 |
Operating lease liabilities - non-current | $ 166 | $ 120 |
Weighted-average remaining lease term (years) | 6 years 9 months 21 days | 6 years 14 days |
Weighted-average incremental borrowing rate | 5.78% | 5.42% |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities | Accrued liabilities |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 47 |
2024 | 40 |
2025 | 35 |
2026 | 32 |
2027 | 27 |
Thereafter | 70 |
Total lease payments | 251 |
Less: Imputed interest | 48 |
Present value of operating lease liabilities | $ 203 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee Lease Description [Line Items] | |||
Cash paid for operating leases | $ 33 | $ 33 | $ 30 |
Non-cash activities: operating lease assets obtained in exchange for new operating lease liabilities (1) | 97 | $ 46 | $ 26 |
2022 Acquisitions | |||
Lessee Lease Description [Line Items] | |||
Non-cash activities: operating lease assets obtained in exchange for new operating lease liabilities (1) | $ 25 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Gross debt | $ 1,431 | $ 1,243 |
Less: current portion of long-term debt | (12) | (10) |
Less: unamortized deferred financing costs | (15) | (13) |
Long-term debt | 1,404 | 1,220 |
4.000% senior notes due 2029 | ||
Debt Instrument [Line Items] | ||
Gross debt | 300 | 300 |
Variable rate A&R Term B Facility | ||
Debt Instrument [Line Items] | ||
Gross debt | $ 1,131 | $ 943 |
Long-Term Debt - Scheduled Prin
Long-Term Debt - Scheduled Principal Repayments Under Senior Credit Facilities and Senior Notes (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 12 |
2024 | 12 |
2025 | 12 |
2026 | 11 |
2027 | 11 |
Thereafter | 1,373 |
Total | $ 1,431 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | 12 Months Ended | ||||||
Mar. 28, 2022 | Aug. 26, 2021 | Feb. 16, 2021 | Feb. 12, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | $ 0 | $ (41,000,000) | $ 0 | ||||
A&R Term B Facility | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 6.78% | 2.75% | |||||
A&R Credit Agreement | Federal Funds Effective Rate | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 0.50% | ||||||
A&R Credit Agreement | London Interbank Offered Rate LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 1% | ||||||
A&R Credit Agreement | A&R Term B Facility | |||||||
Debt Instrument [Line Items] | |||||||
Credit facilities term (in years) | 7 years | ||||||
Principal amount issued | $ 200,000,000 | $ 950,000,000 | |||||
A&R Credit Agreement | A&R Term B Facility | London Interbank Offered Rate LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 2.25% | ||||||
A&R Credit Agreement | A&R Term B Facility | London Interbank Offered Rate LIBOR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 0.50% | ||||||
A&R Credit Agreement | A&R Term B Facility | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 1.25% | ||||||
A&R Credit Agreement | A&R Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Credit facilities term (in years) | 5 years | ||||||
Principal amount issued | $ 500,000,000 | ||||||
A&R Credit Agreement | A&R Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings from credit facility | $ 75,000,000 | ||||||
A&R Credit Agreement | A&R Revolving Credit Facility | London Interbank Offered Rate LIBOR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 1.75% | ||||||
A&R Credit Agreement | A&R Revolving Credit Facility | London Interbank Offered Rate LIBOR | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 2.25% | ||||||
A&R Credit Agreement | A&R Revolving Credit Facility | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 0.75% | ||||||
A&R Credit Agreement | A&R Revolving Credit Facility | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable interest rate on borrowings | 1.25% | ||||||
Senior Credit Facilities | A&R Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings from credit facility | $ 0 | $ 0 | |||||
Senior Credit Facilities | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings from credit facility | $ 0 | $ 0 | |||||
4.000% senior notes due 2029 | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount issued | $ 300,000,000 | ||||||
Interest rate | 4% | 4% | |||||
Debt instrument redemption price percentage | 101% | ||||||
6.125% notes due 2026 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 6.125% | ||||||
Total long-term debt | 2026 |
Long-Term Debt - Schedule of _2
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Gross debt | $ 1,431 | $ 1,243 |
Less: current portion of long-term debt | (12) | (10) |
Less: unamortized deferred financing costs | (15) | (13) |
Long-term debt | 1,404 | 1,220 |
4.000% senior notes due 2029 | ||
Debt Instrument [Line Items] | ||
Gross debt | 300 | 300 |
Variable rate A&R Term B Facility | ||
Debt Instrument [Line Items] | ||
Gross debt | $ 1,131 | $ 943 |
Long-Term Debt - Scheduled Pr_2
Long-Term Debt - Scheduled Principal Repayments Under Senior Credit Facilities and Senior Notes (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 12 |
2024 | 12 |
2025 | 12 |
2026 | 11 |
2027 | 11 |
Thereafter | 1,373 |
Total | $ 1,431 |
Long-Term Debt - Additional I_2
Long-Term Debt - Additional Information (Details) - USD ($) | Mar. 28, 2022 | Aug. 26, 2021 | Feb. 16, 2021 | Feb. 12, 2021 | Dec. 31, 2022 | Dec. 31, 2021 |
A&R Term B Facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 6.78% | 2.75% | ||||
A&R Credit Agreement | Federal Funds Effective Rate | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 0.50% | |||||
A&R Credit Agreement | London Interbank Offered Rate LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 1% | |||||
A&R Credit Agreement | A&R Term B Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facilities term (in years) | 7 years | |||||
Principal amount issued | $ 200,000,000 | $ 950,000,000 | ||||
A&R Credit Agreement | A&R Term B Facility | London Interbank Offered Rate LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 2.25% | |||||
A&R Credit Agreement | A&R Term B Facility | London Interbank Offered Rate LIBOR | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 0.50% | |||||
A&R Credit Agreement | A&R Term B Facility | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 1.25% | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facilities term (in years) | 5 years | |||||
Principal amount issued | $ 500,000,000 | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings from credit facility | $ 75,000,000 | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | London Interbank Offered Rate LIBOR | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 1.75% | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | London Interbank Offered Rate LIBOR | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 2.25% | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | Base Rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 0.75% | |||||
A&R Credit Agreement | A&R Revolving Credit Facility | Base Rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable interest rate on borrowings | 1.25% | |||||
Senior Credit Facilities | A&R Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings from credit facility | $ 0 | $ 0 | ||||
Senior Credit Facilities | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings from credit facility | $ 0 | $ 0 | ||||
4.000% senior notes due 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount issued | $ 300,000,000 | |||||
Interest rate | 4% | 4% | ||||
Debt instrument redemption price percentage | 101% | |||||
6.125% notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 6.125% | |||||
Total long-term debt | 2026 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) - Swap Agreements $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) agreement | |
Derivative [Line Items] | |
Number of interest rate swap | agreement | 8 |
Notional value | $ 560 |
Fixed weighted average rate | 0.50% |
Unrealized gains expected to be reclassified from accumulated other comprehensive loss | $ 23 |
Minimum | |
Derivative [Line Items] | |
Derivative term (in years) | 1 year 6 months |
Maximum | |
Derivative [Line Items] | |
Fixed weighted average rate | 0.9289% |
Derivative term (in years) | 3 years |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Derivative Instruments in Statement of Financial Position (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative [Line Items] | ||
Derivative asset designated as hedging instruments | $ 45 | $ 7 |
Derivative liabilities designated as hedging instruments | $ 0 | 1 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | |
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Other current assets | |
Gain (Loss) on Cash Flow Hedges | ||
Derivative [Line Items] | ||
Unrealized gain (loss) | $ 42 | 6 |
Interest rate swaps | Other current assets | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative asset designated as hedging instruments | 23 | 0 |
Interest rate swaps | Other assets | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative asset designated as hedging instruments | 22 | $ 7 |
Interest rate swaps | Accrued liabilities | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative liabilities designated as hedging instruments | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Summary of Effect of Derivative Instruments Designated As Cash Flow Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | ||
Beginning balance | $ 2,252 | $ 1,993 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (165) | |
Ending balance | 2,529 | 2,252 |
Gain (Loss) on Cash Flow Hedges | ||
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | ||
Beginning balance | 6 | 0 |
Current period gains recognized in other comprehensive income | 42 | 6 |
Gains reclassified from accumulated other comprehensive loss to net income | (6) | 0 |
Ending balance | $ 42 | $ 6 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - Senior Credit Facilities - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Letter of Credit | ||
Debt Instrument [Line Items] | ||
Borrowings from credit facility | $ 0 | $ 0 |
A&R Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Borrowings from credit facility | $ 0 | $ 0 |
Fair Value - Schedule of Carryi
Fair Value - Schedule of Carrying Values and Estimated Fair value of Debt Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Long-Term debt, carrying value | $ 1,431 | $ 1,243 |
Long-term debt, fair value | 1,367 | 1,237 |
4.000% senior notes due 2029 | ||
Debt Instrument [Line Items] | ||
Long-Term debt, carrying value | 300 | 300 |
Long-term debt, fair value | 242 | 294 |
Variable rate A&R Term B Facility | ||
Debt Instrument [Line Items] | ||
Long-Term debt, carrying value | 1,131 | 943 |
Long-term debt, fair value | $ 1,125 | $ 943 |
Fair Value - Summary of the Car
Fair Value - Summary of the Carrying Amount and Fair Value of Interest Rate Swap (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | ||
Carrying value, assets, interest rate swaps | $ 45 | $ 7 |
Carrying value, liabilities, interest rate swaps | 0 | 1 |
Derivative asset designated as hedging instruments | 45 | 7 |
Total derivative assets (liabilities) | 45 | 6 |
Level 1 | Fair Value, Recurring | ||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | ||
Assets, interest rate swaps | 0 | 0 |
Liabilities, interest rate swaps | 0 | 0 |
Total derivative assets (liabilities) | 0 | 0 |
Level 2 | Fair Value, Recurring | ||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | ||
Derivative asset designated as hedging instruments | 45 | 7 |
Liabilities, interest rate swaps | 0 | 1 |
Total derivative assets (liabilities) | $ 45 | $ 6 |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities, Current [Abstract] | ||
Obligations payable under Indemnification Agreements | $ 140 | $ 140 |
Compensation, benefit and other employee-related | 108 | 114 |
Customer rebate reserve | 98 | 94 |
Product warranties | 40 | 22 |
Operating lease liabilities - current | 37 | 32 |
Taxes payable | 38 | 54 |
Other | 179 | 145 |
Total accrued liabilities | $ 640 | $ 601 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | |||||
Oct. 04, 2022 | Oct. 14, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 03, 2023 | |
Loss Contingencies [Line Items] | ||||||
Environmental liabilities | $ 22,000,000 | $ 22,000,000 | ||||
Reimbursement Agreement expense | $ 157,000,000 | 146,000,000 | $ 146,000,000 | |||
Trademark license agreement (in years) | 40 years | |||||
Claim settlement expense | $ 1,600,000 | |||||
Total | $ 115,000,000 | |||||
Environmental Loss Contingency, Statement of Financial Position [Extensible Enumeration] | Cost of goods sold | |||||
Subsequent Event | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement liabilities | $ 600,000 | |||||
Other Expense | ||||||
Loss Contingencies [Line Items] | ||||||
Reimbursement Agreement expense | $ 157,000,000 | 146,000,000 | 146,000,000 | |||
Purchase Commitments | ||||||
Loss Contingencies [Line Items] | ||||||
Total | 41,000,000 | 22,000,000 | 22,000,000 | |||
Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Sale leaseback transaction, aggregate amount | 150,000,000 | |||||
Indemnification Agreement | ||||||
Loss Contingencies [Line Items] | ||||||
Maximum annual reimbursement obligation amount | 25,000,000 | |||||
Honeywell | ||||||
Loss Contingencies [Line Items] | ||||||
Indemnity liability annual cap | 140,000,000 | 140,000,000 | 140,000,000 | |||
Maximum annual reimbursement obligation amount | $ 25,000,000 | 25,000,000 | 25,000,000 | |||
Honeywell | Trademark Agreement | ||||||
Loss Contingencies [Line Items] | ||||||
Royalty fee on net revenue | 1.50% | |||||
Royalty expense | $ 23,000,000 | $ 21,000,000 | $ 26,000,000 | |||
Honeywell | Indemnification Agreement | ||||||
Loss Contingencies [Line Items] | ||||||
Indemnification payable percentage of payments | 90% | |||||
Indemnification payable percentage of net insurance receipts | 90% | |||||
Indemnification payable percentage of net proceeds received | 90% | |||||
Honeywell | Indemnification Agreement | Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Indemnity liability annual cap | $ 140,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Reimbursement Agreement Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accrual for Reimbursement Agreement | |||
Accruals for liabilities deemed probable and reasonably estimable | $ 157 | ||
Reimbursement Agreement | |||
Accrual for Reimbursement Agreement | |||
Accruals for liabilities deemed probable and reasonably estimable | 146 | ||
Tax Matters Agreement | |||
Accrual for Reimbursement Agreement | |||
Accruals for liabilities deemed probable and reasonably estimable | 11 | ||
Honeywell | |||
Accrual for Reimbursement Agreement | |||
Beginning balance | $ 725 | 730 | |
Accruals for liabilities deemed probable and reasonably estimable | 155 | ||
Payments to Honeywell | (160) | (162) | |
Ending balance | 720 | 725 | $ 730 |
Reimbursement Agreement liabilities | $ 140 | $ 140 | $ 140 |
Reimbursement Agreement liabilities, late payment fee percentage | 5% | 5% | 5% |
Maximum annual reimbursement obligation amount | $ 25 | $ 25 | $ 25 |
Honeywell | Reimbursement Agreement | |||
Accrual for Reimbursement Agreement | |||
Beginning balance | 597 | 591 | |
Accruals for liabilities deemed probable and reasonably estimable | 157 | ||
Payments to Honeywell | (140) | (140) | |
Ending balance | 614 | 597 | 591 |
Honeywell | Tax Matters Agreement | |||
Accrual for Reimbursement Agreement | |||
Beginning balance | 128 | 139 | |
Accruals for liabilities deemed probable and reasonably estimable | (2) | ||
Payments to Honeywell | (20) | (22) | |
Ending balance | $ 106 | $ 128 | $ 139 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Reimbursement Agreement Liabilities Included in Balance Sheet Accounts (Details) - Honeywell - USD ($) $ in Millions | Dec. 31, 2022 | Nov. 17, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Loss Contingency, Classification of Accrual [Abstract] | ||||
Total indemnification liabilities | $ 720 | $ 725 | $ 730 | |
Accrued liabilities | ||||
Loss Contingency, Classification of Accrual [Abstract] | ||||
Accrued liabilities | $ 140 | 140 | ||
Obligations payable under Indemnification Agreements | ||||
Loss Contingency, Classification of Accrual [Abstract] | ||||
Obligations payable under Indemnification Agreements | $ 580 | $ 585 |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Recorded Obligations for Product Warranties and Product Performance Guarantee (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Product Warranties and Guarantees [Roll forward] | |||
Beginning balance | $ 23 | $ 22 | $ 25 |
Accruals for warranties/guarantees issued during the year | 30 | 22 | 21 |
Adjustment of pre-existing warranties/guarantees | (2) | (3) | (7) |
Settlement of warranty/guarantee claims | (17) | (18) | (17) |
Reserve of acquired company at date of acquisition | 14 | 0 | 0 |
Ending balance | $ 48 | $ 23 | $ 22 |
Commitments and Contingencies_5
Commitments and Contingencies - Purchase Commitments (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 51 |
2024 | 50 |
2025 | 10 |
2026 | 4 |
2027 and thereafter | 0 |
Total | $ 115 |
Other Expense, net - Summary of
Other Expense, net - Summary of Other Expenses, net (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |||
Reimbursement Agreement expense | $ 157 | $ 146 | $ 146 |
Loss on extinguishment of debt | 0 | 41 | 0 |
Actual return on plan assets | (39) | (9) | (17) |
Settlement of pre-Spin-Off litigation | 13 | 0 | 0 |
Other, net | 4 | (20) | 18 |
Total other expenses, net | $ 135 | $ 158 | $ 147 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ 124 | $ 79 | $ (93) |
Non-U.S. | 294 | 274 | 194 |
Income before taxes | $ 418 | $ 353 | $ 101 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
U.S. | $ 95 | $ 60 | $ 21 |
Non-U.S. | 43 | 45 | 21 |
Total current | 138 | 105 | 42 |
Deferred: | |||
U.S. | (13) | 5 | 11 |
Non-U.S. | 10 | 1 | 11 |
Total deferred | (3) | 6 | 22 |
Total provision | $ 135 | $ 111 | $ 64 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation, Income Tax expense (Benefit) (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 21% | 21% | 21% |
Impact of foreign operations | (1.60%) | (0.20%) | (5.40%) |
U.S. state income taxes | 3% | 3.60% | 6.40% |
Non-deductible indemnification costs | 7.70% | 8.40% | 29% |
Executive compensation over $1 million | 1% | 0.90% | 2.50% |
Other non-deductible expenses | (0.60%) | 0.40% | 3.70% |
U.S. taxation of foreign earnings | 1% | 1.40% | 3.50% |
Tax credits | (0.50%) | (0.70%) | (0.20%) |
Change in tax rates | 0% | (1.00%) | 1.30% |
All other items, net | 1.30% | (2.50%) | 1.80% |
Effective income tax rate | 32.30% | 31.30% | 63.60% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes [Line Items] | ||||
Valuation allowance | $ 63 | $ 63 | $ 60 | $ 32 |
Undistributed earnings from foreign subsidiaries | 2,000 | |||
Undistributed earnings from foreign subsidiaries not considered indefinitely reinvested | 4 | |||
Unrecognized tax benefits | 22 | 16 | $ 10 | $ 6 |
Interest and penalties expense | 1 | 1 | ||
Accrued interest and penalties expense | 3 | $ 1 | ||
Non-U.S. | ||||
Income Taxes [Line Items] | ||||
Valuation allowance | 63 | |||
Net operating loss carryforwards | $ 49 |
Income Taxes - Summary of Valua
Income Taxes - Summary of Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Valuation Allowance, Deferred Taxes [Roll Forward] | |||
Beginning balance | $ 63 | $ 60 | $ 32 |
Additions | 0 | 3 | 28 |
Ending balance | $ 63 | $ 63 | $ 60 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized tax benefits at beginning of year | $ 16 | $ 10 | $ 6 |
Additions based on tax positions related to the respective year | 6 | 6 | 4 |
Unrecognized tax benefits at end of year | $ 22 | $ 16 | $ 10 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net income | $ 283 | $ 242 | $ 37 |
Denominator for Basic and Diluted Earnings Per Share: | |||
Weighted average basic number of common shares outstanding (in shares) | 146 | 144 | 125 |
Plus: dilutive effect of common stock equivalents (in shares) | 3 | 4 | 1 |
Weighted average diluted number of common shares outstanding (in shares) | 149 | 148 | 126 |
Earnings per share: | |||
Basic (in dollars per share) | $ 1.94 | $ 1.68 | $ 0.30 |
Diluted (in dollars per share) | $ 1.90 | $ 1.63 | $ 0.29 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Options and Other Rights | |||
Earnings Per Share [Line Items] | |||
Purchase of outstanding common stock were anti-dilutive (in shares) | 0.1 | 0.2 | 2.8 |
Performance Based Unit Awards | |||
Earnings Per Share [Line Items] | |||
Purchase of outstanding common stock were anti-dilutive (in shares) | 0.6 | 0.6 | 0.2 |
Geographic Areas - Financial _3
Geographic Areas - Financial Data - Schedule of Geographic Areas (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Net revenue | $ 6,370 | $ 5,846 | $ 5,071 |
Long-lived assets | 557 | 429 | 451 |
United States | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Net revenue | 4,795 | 4,181 | 3,543 |
Long-lived assets | 347 | 244 | 260 |
Europe | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Net revenue | 1,111 | 1,196 | 1,121 |
Long-lived assets | 131 | 139 | 144 |
Other International | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Net revenue | 464 | 469 | 407 |
Long-lived assets | $ 79 | $ 46 | $ 47 |
Geographic Areas - Financial _4
Geographic Areas - Financial Data - Schedule of Geographic Areas (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Net revenue | $ 6,370 | $ 5,846 | $ 5,071 |
United States | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Net revenue | 4,795 | 4,181 | 3,543 |
United States | Export Sales | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Net revenue | $ 38 | $ 26 | $ 21 |