Other Financial Data | 6 Months Ended |
Jun. 28, 2014 |
Other Financial Data [Abstract] | ' |
Other Financial Data | ' |
Other Financial Data |
Statement of Operations Information |
Other Charges |
Other charges included in Operating earnings consist of the following: |
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| Three Months Ended | | Six Months Ended | | | | |
| June 28, | | June 29, | | June 28, | | June 29, | | | | |
2014 | 2013 | 2014 | 2013 | | | | |
Other charges (income): | | | | | | | | | | | |
Intangibles amortization | $ | 1 | | | $ | — | | | $ | 2 | | | $ | — | | | | | |
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Reorganization of businesses | 25 | | | 13 | | | 34 | | | 20 | | | | | |
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Legal settlement | 8 | | | — | | | 8 | | | — | | | | | |
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Gain on sale of building and land | — | | | — | | | (21 | ) | | — | | | | | |
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| $ | 34 | | | $ | 13 | | | $ | 23 | | | $ | 20 | | | | | |
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During the first quarter of 2014, the Company completed the sale of a building and parcel of land on its Schaumburg, IL campus with a net book value of $3 million for net cash proceeds of $24 million resulting in a gain on sale of $21 million. |
Other Income (Expense) |
Interest expense, net, and Other, both included in Other income (expense), consist of the following: |
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| Three Months Ended | | Six Months Ended | | | | |
| June 28, | | June 29, | | June 28, | | June 29, | | | | |
2014 | 2013 | 2014 | 2013 | | | | |
Interest income (expense), net: | | | | | | | | | | | |
Interest expense | $ | (34 | ) | | $ | (38 | ) | | $ | (64 | ) | | $ | (68 | ) | | | | |
Interest income | 5 | | | 6 | | | 10 | | | 11 | | | | | |
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| $ | (29 | ) | | $ | (32 | ) | | $ | (54 | ) | | $ | (57 | ) | | | | |
Other: | | | | | | | | | | | |
Investment impairments | — | | | (2 | ) | | — | | | (2 | ) | | | | |
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Foreign currency loss | (8 | ) | | (4 | ) | | $ | (10 | ) | | $ | (7 | ) | | | | |
Gains on equity method investments | 2 | | | 1 | | | 2 | | | — | | | | | |
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Other | (1 | ) | | 2 | | | (1 | ) | | 6 | | | | | |
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| $ | (7 | ) | | $ | (3 | ) | | $ | (9 | ) | | $ | (3 | ) | | | | |
Earnings Per Common Share |
The computation of basic and diluted earnings per common share is as follows: |
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| Amounts attributable to Motorola Solutions, Inc. common stockholders | | | | |
| Earnings from Continuing Operations | | Net Earnings | | | | |
Three Months Ended | June 28, | | June 29, | | June 28, | | June 29, | | | | |
2014 | 2013 | 2014 | 2013 | | | | |
Basic earnings per common share: | | | | | | | | | | | |
Earnings | $ | 78 | | | $ | 223 | | | $ | 824 | | | $ | 258 | | | | | |
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Weighted average common shares outstanding | 253.7 | | | 269.5 | | | 253.7 | | | 269.5 | | | | | |
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Per share amount | $ | 0.31 | | | $ | 0.83 | | | $ | 3.25 | | | $ | 0.96 | | | | | |
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Diluted earnings per common share: | | | | | | | | | | | |
Earnings | $ | 78 | | | $ | 223 | | | $ | 824 | | | $ | 258 | | | | | |
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Weighted average common shares outstanding | 253.7 | | | 269.5 | | | 253.7 | | | 269.5 | | | | | |
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Add effect of dilutive securities: | | | | | | | | | | | |
Share-based awards | 2.5 | | | 5.2 | | | 2.5 | | | 5.2 | | | | | |
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Diluted weighted average common shares outstanding | 256.2 | | | 274.7 | | | 256.2 | | | 274.7 | | | | | |
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Per share amount | $ | 0.3 | | | $ | 0.81 | | | $ | 3.22 | | | $ | 0.94 | | | | | |
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| Amounts attributable to Motorola Solutions, Inc. common stockholders | | | | |
| Earnings from Continuing Operations | | Net Earnings | | | | |
Six Months Ended | June 28, | | June 29, | | June 28, | | June 29, | | | | |
2014 | 2013 | 2014 | 2013 | | | | |
Basic earnings per common share: | | | | | | | | | | | |
Earnings | $ | 163 | | | $ | 380 | | | $ | 951 | | | $ | 450 | | | | | |
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Weighted average common shares outstanding | 253.8 | | | 271.9 | | | 253.8 | | | 271.9 | | | | | |
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Per share amount | $ | 0.64 | | | $ | 1.4 | | | $ | 3.75 | | | $ | 1.66 | | | | | |
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Diluted earnings per common share: | | | | | | | | | | | |
Earnings | $ | 163 | | | $ | 380 | | | $ | 951 | | | $ | 450 | | | | | |
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Weighted average common shares outstanding | 253.8 | | | 271.9 | | | 253.8 | | | 271.9 | | | | | |
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Add effect of dilutive securities: | | | | | | | | | | | |
Share-based awards | 3.4 | | | 5.8 | | | 3.4 | | | 5.8 | | | | | |
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Diluted weighted average common shares outstanding | 257.2 | | | 277.7 | | | 257.2 | | | 277.7 | | | | | |
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Per share amount | $ | 0.63 | | | $ | 1.37 | | | $ | 3.7 | | | $ | 1.62 | | | | | |
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In the computation of diluted earnings per common share from both continuing operations and on a net earnings basis for the three and six months ended June 28, 2014, the assumed exercise of 4.6 million and 4.8 million stock options, respectively, were excluded because their inclusion would have been antidilutive. In the computation of diluted earnings per common share from both continuing operations and on a net earnings basis for the three and six months ended June 29, 2013, the assumed exercise of 4.3 million and 4.4 million stock options, respectively, were excluded because their inclusion would have been antidilutive. |
Balance Sheet Information |
Cash and Cash Equivalents |
The Company’s cash and cash equivalents (which are highly-liquid investments with an original maturity of three months or less) were $2.9 billion at June 28, 2014 and $3.2 billion at December 31, 2013. Of these amounts, $64 million at June 28, 2014 and $63 million at December 31, 2013 were restricted. |
Investments |
Investments consist of the following: |
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| 28-Jun-14 | | 31-Dec-13 | | | | | | | | | | | | |
Available-for-sale securities: | | | | | | | | | | | | | | | |
Government, agency, and government-sponsored enterprise obligations | $ | 15 | | | $ | 15 | | | | | | | | | | | | | |
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Corporate bonds | 8 | | | 7 | | | | | | | | | | | | | |
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Mutual funds | 11 | | | 11 | | | | | | | | | | | | | |
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Common stock and equivalents | — | | | 2 | | | | | | | | | | | | | |
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| 34 | | | 35 | | | | | | | | | | | | | |
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Other investments, at cost | 185 | | | 182 | | | | | | | | | | | | | |
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Equity method investments | 17 | | | 15 | | | | | | | | | | | | | |
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| $ | 236 | | | $ | 232 | | | | | | | | | | | | | |
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The Company had no unrealized gains or losses on its investments as of both June 28, 2014 and December 31, 2013. |
Accounts Receivable, Net |
Accounts receivable, net, consists of the following: |
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| June 28, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Accounts receivable | $ | 1,240 | | | $ | 1,422 | | | | | | | | | | | | | |
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Less allowance for doubtful accounts | (55 | ) | | (53 | ) | | | | | | | | | | | | |
| $ | 1,185 | | | $ | 1,369 | | | | | | | | | | | | | |
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Inventories, Net |
Inventories, net, consist of the following: |
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| June 28, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Finished goods | $ | 142 | | | $ | 157 | | | | | | | | | | | | | |
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Work-in-process and production materials | 313 | | | 315 | | | | | | | | | | | | | |
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| 455 | | | 472 | | | | | | | | | | | | | |
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Less inventory reserves | (125 | ) | | (125 | ) | | | | | | | | | | | | |
| $ | 330 | | | $ | 347 | | | | | | | | | | | | | |
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Other Current Assets |
Other current assets consist of the following: |
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| June 28, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Costs and earnings in excess of billings | $ | 374 | | | $ | 390 | | | | | | | | | | | | | |
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Contract-related deferred costs | 14 | | | 15 | | | | | | | | | | | | | |
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Tax-related deposits and refunds receivable | 64 | | | 107 | | | | | | | | | | | | | |
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Other | 75 | | | 123 | | | | | | | | | | | | | |
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| $ | 527 | | | $ | 635 | | | | | | | | | | | | | |
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Property, Plant and Equipment, Net |
Property, plant and equipment, net, consists of the following: |
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| June 28, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Land | $ | 21 | | | $ | 22 | | | | | | | | | | | | | |
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Building | 554 | | | 582 | | | | | | | | | | | | | |
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Machinery and equipment | 1,840 | | | 1,760 | | | | | | | | | | | | | |
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| 2,415 | | | 2,364 | | | | | | | | | | | | | |
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Less accumulated depreciation | (1,733 | ) | | (1,669 | ) | | | | | | | | | | | | |
| $ | 682 | | | $ | 695 | | | | | | | | | | | | | |
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Depreciation expense for the three months ended June 28, 2014 and June 29, 2013 was $45 million and $40 million, respectively. Depreciation expense for the six months ended June 28, 2014 and June 29, 2013 was $84 million and $75 million, respectively. |
Other Assets |
Other assets consist of the following: |
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| June 28, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Intangible assets, net | $ | 24 | | | $ | 6 | | | | | | | | | | | | | |
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Long-term receivables | 18 | | | 1 | | | | | | | | | | | | | |
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Other | 86 | | | 82 | | | | | | | | | | | | | |
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| $ | 128 | | | $ | 89 | | | | | | | | | | | | | |
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Accrued Liabilities |
Accrued liabilities consist of the following: |
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| June 28, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Deferred revenue | $ | 333 | | | $ | 359 | | | | | | | | | | | | | |
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Compensation | 212 | | | 315 | | | | | | | | | | | | | |
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Billings in excess of costs and earnings | 354 | | | 295 | | | | | | | | | | | | | |
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Tax liabilities | 76 | | | 85 | | | | | | | | | | | | | |
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Customer reserves | 44 | | | 52 | | | | | | | | | | | | | |
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Dividend payable | 78 | | | 79 | | | | | | | | | | | | | |
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Other | 518 | | | 578 | | | | | | | | | | | | | |
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| $ | 1,615 | | | $ | 1,763 | | | | | | | | | | | | | |
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Other Liabilities |
Other liabilities consist of the following: |
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| June 28, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Defined benefit plans, including split dollar life insurance arrangements | $ | 1,654 | | | $ | 1,751 | | | | | | | | | | | | | |
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Postretirement health care benefit plan | 118 | | | 118 | | | | | | | | | | | | | |
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Deferred revenue | 150 | | | 162 | | | | | | | | | | | | | |
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Unrecognized tax benefits | 57 | | | 99 | | | | | | | | | | | | | |
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Other | 172 | | | 184 | | | | | | | | | | | | | |
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| $ | 2,151 | | | $ | 2,314 | | | | | | | | | | | | | |
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Stockholders’ Equity |
Share Repurchase Program: The Company paid an aggregate of $416 million during the second quarter of 2014, including transaction costs, to repurchase approximately 6.2 million shares at an average price of $66.96 per share. The Company paid an aggregate of $473 million during the first half of 2014, including transaction costs, to repurchase approximately 7.1 million shares at an average price of $66.88 per share. As of June 28, 2014, the Company had used approximately $5.7 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving $1.3 billion of authority available for future repurchases. |
Payment of Dividends: During the three months ended June 28, 2014 and June 29, 2013, the Company paid $79 million and $71 million, respectively, in cash dividends to holders of its common stock. During the six months ended June 28, 2014 and June 29, 2013, the Company paid $158 million and $143 million, respectively, in cash dividends to holders of its common stock. |
On July 31, 2014, the Company announced that its Board of Directors approved an increase in the quarterly cash dividend from $0.31 per share to $0.34 per share of common stock. |
Accumulated Other Comprehensive Loss |
The following table displays the changes in Accumulated other comprehensive loss, net of tax, by component from January 1, 2014 to June 28, 2014: |
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| Gains and Losses on Cash Flow Hedges | | Unrealized Gains and Losses on Available-for-Sale Securities | | Retirement Benefit Items | | Foreign Currency Translation Adjustments | | Total |
Balance as of January 1, 2014 | $ | (1 | ) | | $ | (2 | ) | | $ | (2,188 | ) | | $ | (96 | ) | | $ | (2,287 | ) |
Other comprehensive income before reclassifications | — | | | 2 | | | — | | | 15 | | | 17 | |
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Amounts reclassified from accumulated other comprehensive loss | 1 | | | — | | | 24 | | | — | | | 25 | |
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Current period change in Other comprehensive income | 1 | | | 2 | | | 24 | | | 15 | | | 42 | |
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Balance as of June 28, 2014 | $ | — | | | $ | — | | | $ | (2,164 | ) | | $ | (81 | ) | | $ | (2,245 | ) |
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The following table displays the amounts reclassified from Accumulated other comprehensive loss and the affected line items in the condensed consolidated statement of operations during the three and six months ended June 28, 2014 and June 29, 2013: |
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| Three Months Ended | | Six Months Ended | | | | |
| June 28, 2014 | | June 29, | | June 28, | | June 29, | | | | |
2013 | 2014 | 2013 | | |
Loss (gain) on cash flow hedges: | | | | | | | | | | | |
Foreign exchange contracts | $ | 1 | | | $ | — | | | $ | 1 | | | $ | (1 | ) | | Cost of sales | | |
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| 1 | | | — | | | 1 | | | (1 | ) | | Net of tax | | |
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Amortization of retirement benefit items: | | | | | | | | | | | |
Prior service costs | $ | (9 | ) | | (14 | ) | | $ | (18 | ) | | $ | (25 | ) | | Selling, general, and administrative expenses | | |
Actuarial net losses | 25 | | | 40 | | | 53 | | | 79 | | | Selling, general, and administrative expenses | | |
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| 16 | | | 26 | | | 35 | | | 54 | | | Total before tax | | |
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| (5 | ) | | (10 | ) | | (11 | ) | | (19 | ) | | Tax benefit | | |
| $ | 11 | | | $ | 16 | | | $ | 24 | | | $ | 35 | | | Net of tax | | |
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Total reclassifications for the period, net of tax | $ | 12 | | | $ | 16 | | | $ | 25 | | | $ | 34 | | | | | |
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