Other Financial Data | 9 Months Ended |
Sep. 27, 2014 |
Organization, Consolidation and Presentation of Financial Statements [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 | | Nine Months Ended | | | | |
| September 27, | | September 28, | | September 27, | | September 28, | | | | |
2014 | 2013 | 2014 | 2013 | | | | |
Other charges (income): | | | | | | | | | | | |
Intangibles amortization | $ | 1 | | | $ | — | | | $ | 3 | | | $ | 1 | | | | | |
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Reorganization of businesses | 13 | | | 16 | | | 48 | | | 36 | | | | | |
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Legal settlement | — | | | — | | | 8 | | | — | | | | | |
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Pension-related transaction fees | 11 | | | — | | | 11 | | | — | | | | | |
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Gain on sale of building and land | — | | | — | | | (21 | ) | | — | | | | | |
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| $ | 25 | | | $ | 16 | | | $ | 49 | | | $ | 37 | | | | | |
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During the nine months ended September 27, 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. |
During the three months ended September 27, 2014, the Company incurred transaction fees, primarily consisting of fees incurred by outside advisors, related to certain transactions announced with respect to our U.S. Pension Benefit Plans (see footnote 7). |
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 | | Nine Months Ended | | | | |
| September 27, | | September 28, | | September 27, | | September 28, | | | | |
2014 | 2013 | 2014 | 2013 | | | | |
Interest income (expense), net: | | | | | | | | | | | |
Interest expense | $ | (38 | ) | | $ | (33 | ) | | $ | (102 | ) | | $ | (100 | ) | | | | |
Interest income | 7 | | | 4 | | | 17 | | | 15 | | | | | |
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| $ | (31 | ) | | $ | (29 | ) | | $ | (85 | ) | | $ | (85 | ) | | | | |
Other: | | | | | | | | | | | |
Loss from the extinguishment of long-term debt | $ | (37 | ) | | $ | — | | | $ | (37 | ) | | $ | — | | | | | |
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Investment impairments | — | | | (1 | ) | | — | | | (3 | ) | | | | |
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Foreign currency gain (loss) | 4 | | | (1 | ) | | $ | (6 | ) | | $ | (8 | ) | | | | |
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Gains on equity method investments | 11 | | | 8 | | | 13 | | | 7 | | | | | |
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Other | (4 | ) | | 2 | | | (4 | ) | | 7 | | | | | |
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| $ | (26 | ) | | $ | 8 | | | $ | (34 | ) | | $ | 3 | | | | | |
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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 | September 27, | | September 28, | | September 27, | | September 28, | | | | |
2014 | 2013 | 2014 | 2013 | | | | |
Basic earnings per common share: | | | | | | | | | | | |
Earnings | $ | 66 | | | $ | 261 | | | $ | 147 | | | $ | 307 | | | | | |
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Weighted average common shares outstanding | 246.3 | | | 262.2 | | | 246.3 | | | 262.2 | | | | | |
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Per share amount | $ | 0.27 | | | $ | 1 | | | $ | 0.6 | | | $ | 1.17 | | | | | |
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Diluted earnings per common share: | | | | | | | | | | | |
Earnings | $ | 66 | | | $ | 261 | | | $ | 147 | | | $ | 307 | | | | | |
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Weighted average common shares outstanding | 246.3 | | | 262.2 | | | 246.3 | | | 262.2 | | | | | |
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Add effect of dilutive securities: | | | | | | | | | | | |
Share-based awards | 1.9 | | | 3.1 | | | 1.9 | | | 3.1 | | | | | |
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Diluted weighted average common shares outstanding | 248.2 | | | 265.3 | | | 248.2 | | | 265.3 | | | | | |
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Per share amount | $ | 0.27 | | | $ | 0.98 | | | $ | 0.59 | | | $ | 1.16 | | | | | |
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| Amounts attributable to Motorola Solutions, Inc. common stockholders | | | | |
| Earnings from Continuing Operations | | Net Earnings | | | | |
Nine Months Ended | September 27, | | September 28, | | September 27, | | September 28, | | | | |
2014 | 2013 | 2014 | 2013 | | | | |
Basic earnings per common share: | | | | | | | | | | | |
Earnings | $ | 229 | | | $ | 641 | | | $ | 1,098 | | | $ | 757 | | | | | |
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Weighted average common shares outstanding | 251.1 | | | 268.7 | | | 251.1 | | | 268.7 | | | | | |
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Per share amount | $ | 0.91 | | | $ | 2.39 | | | $ | 4.37 | | | $ | 2.82 | | | | | |
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Diluted earnings per common share: | | | | | | | | | | | |
Earnings | $ | 229 | | | $ | 641 | | | $ | 1,098 | | | $ | 757 | | | | | |
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Weighted average common shares outstanding | 251.1 | | | 268.7 | | | 251.1 | | | 268.7 | | | | | |
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Add effect of dilutive securities: | | | | | | | | | | | |
Share-based awards | 2.9 | | | 4.8 | | | 2.9 | | | 4.8 | | | | | |
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Diluted weighted average common shares outstanding | 254 | | | 273.5 | | | 254 | | | 273.5 | | | | | |
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Per share amount | $ | 0.9 | | | $ | 2.34 | | | $ | 4.32 | | | $ | 2.77 | | | | | |
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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 nine months ended September 27, 2014, the assumed exercise of 4.9 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 nine months ended September 28, 2013, the assumed exercise of 5.6 million and 4.8 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 $2.8 billion at September 27, 2014 and $3.2 billion at December 31, 2013. Of these amounts, $63 million was restricted at both September 27, 2014 and December 31, 2013. |
Investments |
Investments consist of the following: |
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| 27-Sep-14 | | 31-Dec-13 | | | | | | | | | | | | |
Available-for-sale securities: | | | | | | | | | | | | | | | |
Government, agency, and government-sponsored enterprise obligations | $ | 15 | | | $ | 15 | | | | | | | | | | | | | |
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Corporate bonds | 7 | | | 7 | | | | | | | | | | | | | |
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Mutual funds | 11 | | | 11 | | | | | | | | | | | | | |
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Common stock and equivalents | — | | | 2 | | | | | | | | | | | | | |
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| 33 | | | 35 | | | | | | | | | | | | | |
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Other investments, at cost | 188 | | | 182 | | | | | | | | | | | | | |
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Equity method investments | 19 | | | 15 | | | | | | | | | | | | | |
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| $ | 240 | | | $ | 232 | | | | | | | | | | | | | |
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Accounts Receivable, Net |
Accounts receivable, net, consists of the following: |
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| September 27, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Accounts receivable | $ | 1,189 | | | $ | 1,422 | | | | | | | | | | | | | |
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Less allowance for doubtful accounts | (27 | ) | | (53 | ) | | | | | | | | | | | | |
| $ | 1,162 | | | $ | 1,369 | | | | | | | | | | | | | |
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Inventories, Net |
Inventories, net, consist of the following: |
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| September 27, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Finished goods | $ | 147 | | | $ | 157 | | | | | | | | | | | | | |
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Work-in-process and production materials | 313 | | | 315 | | | | | | | | | | | | | |
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| 460 | | | 472 | | | | | | | | | | | | | |
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Less inventory reserves | (129 | ) | | (125 | ) | | | | | | | | | | | | |
| $ | 331 | | | $ | 347 | | | | | | | | | | | | | |
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Other Current Assets |
Other current assets consist of the following: |
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| September 27, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Costs and earnings in excess of billings | $ | 456 | | | $ | 405 | | | | | | | | | | | | | |
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Tax-related deposits and refunds receivable | 57 | | | 107 | | | | | | | | | | | | | |
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Other | 91 | | | 123 | | | | | | | | | | | | | |
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| $ | 604 | | | $ | 635 | | | | | | | | | | | | | |
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Property, Plant and Equipment, Net |
Property, plant and equipment, net, consists of the following: |
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| September 27, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Land | $ | 20 | | | $ | 22 | | | | | | | | | | | | | |
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Building | 558 | | | 582 | | | | | | | | | | | | | |
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Machinery and equipment | 1,833 | | | 1,760 | | | | | | | | | | | | | |
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| 2,411 | | | 2,364 | | | | | | | | | | | | | |
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Less accumulated depreciation | (1,747 | ) | | (1,669 | ) | | | | | | | | | | | | |
| $ | 664 | | | $ | 695 | | | | | | | | | | | | | |
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Depreciation expense for the three months ended September 27, 2014 and September 28, 2013 was $44 million and $39 million, respectively. Depreciation expense for the nine months ended September 27, 2014 and September 28, 2013 was $128 million and $115 million, respectively. |
Other Assets |
Other assets consist of the following: |
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| September 27, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Intangible assets, net | $ | 24 | | | $ | 6 | | | | | | | | | | | | | |
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Long-term receivables | 21 | | | 1 | | | | | | | | | | | | | |
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Other | 93 | | | 82 | | | | | | | | | | | | | |
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| $ | 138 | | | $ | 89 | | | | | | | | | | | | | |
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Accrued Liabilities |
Accrued liabilities consist of the following: |
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| September 27, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Deferred revenue | $ | 341 | | | $ | 359 | | | | | | | | | | | | | |
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Compensation | 236 | | | 315 | | | | | | | | | | | | | |
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Billings in excess of costs and earnings | 365 | | | 295 | | | | | | | | | | | | | |
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Tax liabilities | 74 | | | 85 | | | | | | | | | | | | | |
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Customer reserves | 53 | | | 52 | | | | | | | | | | | | | |
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Dividend payable | 82 | | | 79 | | | | | | | | | | | | | |
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Other | 522 | | | 578 | | | | | | | | | | | | | |
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| $ | 1,673 | | | $ | 1,763 | | | | | | | | | | | | | |
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Other Liabilities |
Other liabilities consist of the following: |
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| September 27, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Defined benefit plans | $ | 1,942 | | | $ | 1,751 | | | | | | | | | | | | | |
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Postretirement Health Care Benefit Plan | 47 | | | 118 | | | | | | | | | | | | | |
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Deferred revenue | 148 | | | 162 | | | | | | | | | | | | | |
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Unrecognized tax benefits | 56 | | | 99 | | | | | | | | | | | | | |
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Other | 171 | | | 184 | | | | | | | | | | | | | |
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| $ | 2,364 | | | $ | 2,314 | | | | | | | | | | | | | |
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Stockholders’ Equity |
Share Repurchase Program: Through actions taken on July 28, 2011, January 30, 2012, July 25, 2012, July 22, 2013, and November 3, 2014, the Board of Directors has authorized the Company to repurchase an aggregate amount of up to $12.0 billion of its outstanding shares of common stock (the “share repurchase program”). The share repurchase program does not have an expiration date. |
The Company paid an aggregate of $650 million during the third quarter of 2014, including transaction costs, to repurchase approximately 10.4 million shares at an average price of $62.63 per share. The Company paid an aggregate of $1.1 billion during the first nine months of 2014, including transaction costs, to repurchase approximately 17.4 million shares at an average price of $64.36 per share. As of September 27, 2014, the Company had used approximately $6.4 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving $5.6 billion of authority available for future repurchases. |
Payment of Dividends: During the three months ended September 27, 2014 and September 28, 2013, the Company paid $78 million and $69 million, respectively, in cash dividends to holders of its common stock. During the nine months ended September 27, 2014 and September 28, 2013, the Company paid $236 million and $212 million, respectively, in cash dividends to holders of its common stock. |
Accumulated Other Comprehensive Loss |
The following table displays the changes in Accumulated other comprehensive loss, net of tax, by component from January 1, 2014 to September 27, 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 gain (loss) before reclassifications | — | | | 2 | | | (353 | ) | | (19 | ) | | (370 | ) |
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Amounts reclassified from accumulated other comprehensive loss | 1 | | | — | | | 31 | | | — | | | 32 | |
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Current period change in Other comprehensive income | 1 | | | 2 | | | (322 | ) | | (19 | ) | | (338 | ) |
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Balance as of September 27, 2014 | $ | — | | | $ | — | | | $ | (2,510 | ) | | $ | (115 | ) | | $ | (2,625 | ) |
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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 statements of operations during the three and nine months ended September 27, 2014 and September 28, 2013: |
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| Three Months Ended | | Nine Months Ended | | | | |
| September 27, 2014 | | September 28, | | September 27, | | September 28, | | | | |
2013 | 2014 | 2013 | | |
Loss (gain) on cash flow hedges: | | | | | | | | | | | |
Foreign exchange contracts | $ | — | | | $ | — | | | $ | 1 | | | $ | (2 | ) | | Cost of sales | | |
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| — | | | — | | | 1 | | | (2 | ) | | Net of tax | | |
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Amortization of retirement benefit items: | | | | | | | | | | | |
Prior service costs | $ | (15 | ) | | (13 | ) | | $ | (39 | ) | | $ | (38 | ) | | Selling, general, and administrative expenses | | |
Actuarial net losses | 27 | | | 39 | | | 84 | | | 118 | | | Selling, general, and administrative expenses | | |
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| 12 | | | 26 | | | 45 | | | 80 | | | Total before tax | | |
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| (4 | ) | | (9 | ) | | (14 | ) | | (28 | ) | | Tax benefit | | |
| $ | 8 | | | $ | 17 | | | $ | 31 | | | $ | 52 | | | Net of tax | | |
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Total reclassifications for the period, net of tax | $ | 8 | | | $ | 17 | | | $ | 32 | | | $ | 50 | | | | | |
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