Document And Entity Information
Document And Entity Information - Jul. 04, 2015 - shares | Total |
Document And Entity Information [Abstract] | |
Entity Registrant Name | Motorola Solutions, Inc. |
Entity Central Index Key | 68,505 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Jul. 4, 2015 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 206,777,008 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Income Statement [Abstract] | ||||
Net sales from products | $ 867 | $ 887 | $ 1,626 | $ 1,640 |
Net sales from services | 501 | 506 | 965 | 982 |
Net sales | 1,368 | 1,393 | 2,591 | 2,622 |
Costs of product sales | 385 | 400 | 745 | 751 |
Costs of services sales | 335 | 337 | 650 | 638 |
Costs of sales | 720 | 737 | 1,395 | 1,389 |
Gross margin | 648 | 656 | 1,196 | 1,233 |
Selling, general and administrative expenses | 254 | 308 | 510 | 615 |
Research and development expenditures | 156 | 176 | 315 | 350 |
Other charges (income) | (16) | 34 | (2) | 23 |
Operating earnings | 254 | 138 | 373 | 245 |
Other income (expense): | ||||
Interest expense, net | (39) | (29) | (79) | (54) |
Gains (losses) on sales of investments, net | 4 | (4) | 50 | 4 |
Other | (4) | (7) | (1) | (9) |
Total other expense | (39) | (40) | (30) | (59) |
Earnings from continuing operations before income taxes | 215 | 98 | 343 | 186 |
Income tax expense | 64 | 20 | 104 | 23 |
Earnings from continuing operations | 151 | 78 | 239 | 163 |
Earnings (loss) from discontinued operations, net of tax | (8) | 746 | (21) | 788 |
Net earnings | 143 | 824 | 218 | 951 |
Less: Earnings attributable to noncontrolling interests | 1 | 0 | 1 | 0 |
Net earnings attributable to Motorola Solutions, Inc. | 142 | 824 | 217 | 951 |
Earnings from continuing operations, net of tax | 150 | 78 | 238 | 163 |
Earnings (loss) from discontinued operations, net of tax | $ (8) | $ 746 | $ (21) | $ 788 |
Basic: | ||||
Continuing operations (US$ per share) | $ 0.72 | $ 0.31 | $ 1.12 | $ 0.64 |
Discontinued operations (US$ per share) | (0.04) | 2.94 | (0.09) | 3.11 |
Basic (US$ per share): | 0.68 | 3.25 | 1.03 | 3.75 |
Diluted: | ||||
Continuing operations (US$ per share) | 0.72 | 0.30 | 1.11 | 0.63 |
Discontinued operations (US$ per share) | (0.04) | 2.92 | (0.10) | 3.07 |
Diluted (US$ per share): | $ 0.68 | $ 3.22 | $ 1.01 | $ 3.70 |
Weighted average common shares outstanding: | ||||
Basic (shares) | 208 | 253.7 | 211.7 | 253.8 |
Diluted (shares) | 209.5 | 256.2 | 213.8 | 257.2 |
Dividends declared per share (US$ per share) | $ 0.34 | $ 0.31 | $ 0.68 | $ 0.62 |
Condensed Consolidated Stateme3
Condensed Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 143 | $ 824 | $ 218 | $ 951 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 7 | 13 | (19) | 15 |
Net loss on derivative instruments | 0 | 1 | 0 | 1 |
Marketable securities | 4 | 0 | (29) | 2 |
Defined benefit plans | (83) | 11 | (82) | 24 |
Total other comprehensive income (loss), net of tax | (72) | 25 | (130) | 42 |
Comprehensive income | 71 | 849 | 88 | 993 |
Less: Earnings attributable to noncontrolling interests | 1 | 0 | 1 | 0 |
Comprehensive income attributable to Motorola Solutions, Inc. common shareholders | $ 70 | $ 849 | $ 87 | $ 993 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and cash equivalents | $ 3,112 | $ 3,954 |
Accounts receivable, net | 1,141 | 1,409 |
Inventories, net | 364 | 345 |
Deferred income taxes | 422 | 431 |
Other current assets | 593 | 740 |
Total current assets | 5,632 | 6,879 |
Property, plant and equipment, net | 542 | 549 |
Investments | 285 | 316 |
Deferred income taxes | 2,118 | 2,151 |
Goodwill | 423 | 383 |
Other assets | 160 | 145 |
Total assets | 9,160 | 10,423 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Current portion of long-term debt | 4 | 4 |
Accounts payable | 417 | 540 |
Accrued liabilities | 1,550 | 1,706 |
Total current liabilities | 1,971 | 2,250 |
Long-term debt | 3,393 | 3,396 |
Other liabilities | 1,973 | 2,011 |
Stockholders’ Equity | ||
Preferred stock, $100 par value | 0 | 0 |
Common stock, $.01 par value: Authorized shares: 600.0 Issued shares: 7/4/15--207.3; 12/31/14--220.5 Outstanding shares: 7/4/15--206.8; 12/31/14--219.8 | 2 | 2 |
Additional paid-in capital | 313 | 1,178 |
Retained earnings | 3,485 | 3,410 |
Accumulated other comprehensive loss | (1,985) | (1,855) |
Total Motorola Solutions, Inc. stockholders’ equity | 1,815 | 2,735 |
Noncontrolling interests | 8 | 31 |
Total stockholders’ equity | 1,823 | 2,766 |
Total liabilities and stockholders’ equity | $ 9,160 | $ 10,423 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jul. 04, 2015 | Dec. 31, 2014 |
Stockholders’ Equity | ||
Preferred stock par value (US$ per share) | $ 100 | $ 100 |
Common stock par value (US$ per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 600,000,000 | 600,000,000 |
Common stock, issued shares | 207,300,000 | 220,500,000 |
Common stock, outstanding shares | 206,800,000 | 219,800,000 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock and Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interests |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | $ 951 | ||||
Other comprehensive loss | 42 | ||||
Balance at end of period at Jun. 28, 2014 | $ (2,245) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 824 | ||||
Other comprehensive loss | 25 | ||||
Balance at end of period at Jun. 28, 2014 | (2,245) | ||||
Balance at beginning of period at Dec. 31, 2014 | 2,766 | $ 1,180 | (1,855) | $ 3,410 | $ 31 |
Balance (in shares) at Dec. 31, 2014 | 220.5 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 218 | 217 | 1 | ||
Other comprehensive loss | $ (130) | (130) | |||
Issuance of common stock and stock options exercised | $ 37 | ||||
Issuance of common stock and stock options exercised (in shares) | 1.3 | ||||
Share repurchase program | $ (938) | ||||
Share repurchase program (in shares) | (14.5) | (14.5) | |||
Tax shortfalls from share-based compensation | $ (4) | ||||
Share-based compensation expense | 40 | ||||
Sale of controlling interest in subsidiary common stock | (24) | ||||
Dividends declared | (142) | ||||
Balance at end of period at Jul. 04, 2015 | $ 1,823 | $ 315 | (1,985) | 3,485 | 8 |
Balance (in shares) at Jul. 04, 2015 | 207.3 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 143 | ||||
Other comprehensive loss | $ (72) | ||||
Share repurchase program (in shares) | (4.6) | ||||
Balance at end of period at Jul. 04, 2015 | $ 1,823 | $ 315 | $ (1,985) | $ 3,485 | $ 8 |
Balance (in shares) at Jul. 04, 2015 | 207.3 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jul. 04, 2015 | Jun. 28, 2014 | |
Operating | ||
Net earnings attributable to Motorola Solutions, Inc. | $ 217 | $ 951 |
Earnings attributable to noncontrolling interests | 1 | 0 |
Net earnings | 218 | 951 |
Earnings (loss) from discontinued operations, net of tax | (21) | 788 |
Earnings from continuing operations, net of tax | 239 | 163 |
Adjustments to reconcile Earnings from continuing operations to Net cash provided by operating activities from continuing operations: | ||
Depreciation and amortization | 81 | 86 |
Gain on sale of building and land | 0 | (21) |
Non-cash other charges (income) | 5 | (5) |
Non-U.S. pension curtailment gain | (32) | 0 |
Share-based compensation expense | 40 | 54 |
Gains on sales of investments and businesses, net | (50) | (4) |
Deferred income taxes | 55 | 6 |
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | ||
Accounts receivable | 255 | 190 |
Inventories | (25) | 17 |
Other current assets | 28 | 76 |
Accounts payable and accrued liabilities | (263) | (299) |
Other assets and liabilities | (42) | (133) |
Net cash provided by operating activities from continuing operations | 291 | 130 |
Investing | ||
Acquisitions and investments, net | (93) | (11) |
Proceeds from sales of investments and businesses, net | 111 | 21 |
Capital expenditures | (81) | (82) |
Proceeds from sales of property, plant and equipment | 1 | 24 |
Net cash used for investing activities from continuing operations | (62) | (48) |
Financing | ||
Repayment of debt | (2) | (2) |
Net proceeds from issuance of debt | 0 | 4 |
Issuance of common stock | 51 | 85 |
Purchase of common stock | (938) | (473) |
Excess tax benefit from share-based compensation | 1 | 6 |
Payment of dividends | (148) | (158) |
Distributions from discontinued operations | 0 | 100 |
Net cash used for financing activities from continuing operations | (1,036) | (438) |
Discontinued Operations | ||
Net cash provided by operating activities from discontinued operations | 0 | 89 |
Net cash provided by investing activities from discontinued operations | 0 | 11 |
Net cash used for financing activities from discontinued operations | 0 | (100) |
Net cash provided by discontinued operations | 0 | 0 |
Effect of exchange rate changes on cash and cash equivalents from continuing operations | (35) | 7 |
Net decrease in cash and cash equivalents | (842) | (349) |
Cash and cash equivalents, beginning of period | 3,954 | 3,225 |
Cash and cash equivalents, end of period | 3,112 | 2,876 |
Cash paid during the period for: | ||
Interest, net | 81 | 67 |
Income and withholding taxes, net of refunds | $ 71 | $ 31 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jul. 04, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements as of July 4, 2015 and for the three and six months ended July 4, 2015 and June 28, 2014 , include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statement of stockholders' equity, and statements of cash flows of Motorola Solutions, Inc. (“Motorola Solutions” or the “Company”) for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2014 . The results of operations for the three and six months ended July 4, 2015 are not necessarily indicative of the operating results to be expected for the full year. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers . This new standard will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount it expects to receive for those goods and services. This ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and estimates and changes in those estimates. This ASU will be effective for the Company beginning January 1, 2018. This ASU allows for both retrospective and modified-retrospective methods of adoption. The Company is in the process of determining the method of adoption it will elect and is currently assessing the impact of this ASU on its consolidated financial statements and footnote disclosures. In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . Under this guidance, debt issuance costs related to a recognized debt liability are required to be presented in the balance sheet as a direct reduction from the carrying amount of such debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this guidance. In adopting the ASU, the Company will be required to apply a full retrospective approach to all periods presented. This guidance will be effective January 1, 2016 and, upon adoption, debt issuance costs capitalized in other assets in the consolidated balance sheet will be reclassified and presented as a reduction to long-term debt. As of July 4, 2015, debt issuance costs, net of accumulated amortization, recognized in the condensed consolidated balance sheet were $18 million . In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 340): Simplifying the Measurement of Inventory . Under this guidance, entities utilizing the FIFO or average cost method should measure inventory at the lower of cost or net realizable value, whereas net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU should be applied prospectively and will be effective for the Company beginning January 1, 2017 with early adoption permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements and footnote disclosures. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jul. 04, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On October 27, 2014, the Company completed the sale of its Enterprise business to Zebra Technologies Corporation for $3.45 billion in cash. Certain assets of the Enterprise business were excluded from the transaction and retained by the Company, including the Company’s iDEN business. The historical financial results of the Enterprise business, excluding those assets and liabilities retained in the transaction, are reflected in the Company's condensed consolidated financial statements and footnotes as discontinued operations for all periods presented. The following table displays summarized activity in the Company's condensed consolidated statements of operations for discontinued operations during the three and six months ended July 4, 2015 and June 28, 2014 : Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Net sales $ — $ 560 $ — $ 1,133 Operating earnings — 55 — 118 Losses on sales of investments and businesses, net — (1 ) — (1 ) Investment impairments — (3 ) — (3 ) Earnings (loss) before income taxes (8 ) 50 (28 ) 112 Income tax benefit — (696 ) (7 ) (676 ) Earnings (loss) from discontinued operations, net of tax $ (8 ) $ 746 $ (21 ) $ 788 |
Other Financial Data
Other Financial Data | 6 Months Ended |
Jul. 04, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Financial Data | Other Financial Data Statements of Operations Information Other Charges (Income) Other charges (income) included in Operating earnings consist of the following: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Other charges (income): Intangibles amortization $ 3 $ 1 $ 4 $ 2 Reorganization of business 13 25 26 34 Legal settlement — 8 — 8 Non-U.S. pension curtailment gain (32 ) — (32 ) — Gain on sale of building and land — — — (21 ) $ (16 ) $ 34 $ (2 ) $ 23 Other Income (Expense) Interest expense, net, and Other, both included in Other income (expense), consist of the following: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Interest income (expense), net: Interest expense $ (42 ) $ (34 ) $ (86 ) $ (64 ) Interest income 3 5 7 10 $ (39 ) $ (29 ) $ (79 ) $ (54 ) Other: Investment impairments (3 ) — (3 ) — Foreign currency gain (loss) (11 ) (7 ) $ 7 $ (8 ) Gain (loss) on derivative instruments 4 (1 ) (12 ) (2 ) Gains on equity method investments 4 2 4 2 Other 2 (1 ) 3 (1 ) $ (4 ) $ (7 ) $ (1 ) $ (9 ) Earnings Per Common Share The computation of basic and diluted earnings per common share is as follows: Amounts attributable to Motorola Solutions, Inc. common stockholders Earnings from Continuing Operations, net of tax Net Earnings Three Months Ended July 4, June 28, July 4, June 28, Basic earnings per common share: Earnings $ 150 $ 78 $ 142 $ 824 Weighted average common shares outstanding 208.0 253.7 208.0 253.7 Per share amount $ 0.72 $ 0.31 $ 0.68 $ 3.25 Diluted earnings per common share: Earnings $ 150 $ 78 $ 142 $ 824 Weighted average common shares outstanding 208.0 253.7 208.0 253.7 Add effect of dilutive securities: Share-based awards 1.5 2.5 1.5 2.5 Diluted weighted average common shares outstanding 209.5 256.2 209.5 256.2 Per share amount $ 0.72 $ 0.30 $ 0.68 $ 3.22 Amounts attributable to Motorola Solutions, Inc. common stockholders Earnings from Continuing Operations, net of tax Net Earnings Six Months Ended July 4, June 28, July 4, June 28, Basic earnings per common share: Earnings $ 238 $ 163 $ 217 $ 951 Weighted average common shares outstanding 211.7 253.8 211.7 253.8 Per share amount $ 1.12 $ 0.64 $ 1.03 $ 3.75 Diluted earnings per common share: Earnings $ 238 $ 163 $ 217 $ 951 Weighted average common shares outstanding 211.7 253.8 211.7 253.8 Add effect of dilutive securities: Share-based awards 2.1 3.4 2.1 3.4 Diluted weighted average common shares outstanding 213.8 257.2 213.8 257.2 Per share amount $ 1.11 $ 0.63 $ 1.01 $ 3.70 In the computation of diluted earnings per common share from both continuing operations and on a net earnings basis for the three months ended July 4, 2015 , the assumed exercise of 1.7 million options and the assumed vesting of 0.7 million RSUs were excluded because their inclusion would have been antidilutive. For the six months ended July 4, 2015 , the assumed exercise of 3.9 million options and the assumed vesting of 1.2 million RSUs were excluded because their inclusion would have been antidilutive. 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. Balance Sheet Information Cash and Cash Equivalents The Company’s cash and cash equivalents were $3.1 billion at July 4, 2015 and $4.0 billion at December 31, 2014 . Of these amounts, $63 million was restricted at both July 4, 2015 and December 31, 2014 . Investments Investments consist of the following: July 4, 2015 Cost Unrealized Investments Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ 31 $ — $ 31 Corporate bonds 9 — 9 Common stock — 23 23 40 23 63 Other investments, at cost 208 — 208 Equity method investments 14 — 14 $ 262 $ 23 $ 285 December 31, 2014 Cost Unrealized Investments Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ 14 $ — $ 14 Corporate bonds 16 — 16 Mutual funds 2 — 2 Common stock 1 70 71 33 70 103 Other investments, at cost 191 — 191 Equity method investments 22 — 22 $ 246 $ 70 $ 316 During the three months ended July 4, 2015 , the Company recorded investment impairment charges of $3 million related to cost method investments and sold a cost method investment recognizing a gain on sale of $4 million . During the six months ended July 4, 2015 , the Company sold shares of an equity investment realizing cash proceeds of $47 million and a previously unrecognized gain of $46 million . Accounts Receivable, Net Accounts receivable, net, consists of the following: July 4, December 31, Accounts receivable $ 1,168 $ 1,444 Less allowance for doubtful accounts (27 ) (35 ) $ 1,141 $ 1,409 Inventories, Net Inventories, net, consist of the following: July 4, December 31, Finished goods $ 165 $ 163 Work-in-process and production materials 337 313 502 476 Less inventory reserves (138 ) (131 ) $ 364 $ 345 Other Current Assets Other current assets consist of the following: July 4, December 31, Costs and earnings in excess of billings $ 385 $ 417 Tax-related refunds receivable 90 103 Zebra receivable for cash transferred — 49 Other 118 171 $ 593 $ 740 In conjunction with the sale of the Enterprise business to Zebra Technologies, the Company transferred legal entities which maintained cash balances. During the six months ended July 4, 2015 , approximately $49 million of transferred cash balances were reimbursed by Zebra in accordance with the sales agreement. Property, Plant and Equipment, Net Property, plant and equipment, net, consists of the following: July 4, December 31, Land $ 18 $ 18 Building 555 559 Machinery and equipment 1,695 1,672 2,268 2,249 Less accumulated depreciation (1,726 ) (1,700 ) $ 542 $ 549 Depreciation expense for the three months ended July 4, 2015 and June 28, 2014 was $38 million and $45 million , respectively. Depreciation expense for the six months ended July 4, 2015 and June 28, 2014 was $77 million and $84 million , respectively. Other Assets Other assets consist of the following: July 4, December 31, Intangible assets, net $ 52 $ 23 Long-term receivables 18 31 Other 90 91 $ 160 $ 145 Accrued Liabilities Accrued liabilities consist of the following: July 4, December 31, Deferred revenue $ 335 $ 355 Compensation 180 190 Billings in excess of costs and earnings 346 358 Tax liabilities 68 91 Dividend payable 70 75 Other 551 637 $ 1,550 $ 1,706 Other Liabilities Other liabilities consist of the following: July 4, December 31, Defined benefit plans $ 1,600 $ 1,611 Postretirement Health Care Benefit Plan 39 49 Deferred revenue 121 139 Unrecognized tax benefits 51 54 Other 162 158 $ 1,973 $ 2,011 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 $285 million during the three months ended July 4, 2015 , including transaction costs, to repurchase approximately 4.6 million shares at an average price of $61.63 per share. The Company paid an aggregate of $938 million during the six months ended July 4, 2015 , including transaction costs, to repurchase approximately 14.5 million shares at an average price of $64.69 per share. As of July 4, 2015 , the Company had used approximately $8.7 billion of the share repurchase authority, including transaction costs, to repurchase shares leaving $3.3 billion of authority available for future repurchases. On August 4, 2015, the Board of Directors authorized the Company to commence a modified "Dutch auction" tender offer to repurchase up to $2 billion of its outstanding shares of common stock. The repurchase of these shares is authorized under the existing share repurchase authority as outlined above and the purchase will be funded with a combination of cash on hand and a portion of the proceeds raised through the issuance of new convertible notes (see Note 4). The Company anticipates commencing the tender offer on or about August 7, 2015. The tender offer is expected to close on or about September 4, 2015. Payment of Dividends: During the three months ended July 4, 2015 and June 28, 2014 , the Company paid $72 million and $79 million , respectively, in cash dividends to holders of its common stock. During the six months ended July 4, 2015 and June 28, 2014 , the Company paid $148 million and $158 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, including amounts reclassified into income, and the affected line items in the condensed consolidated statements of operations during the three and six months ended July 4, 2015 and June 28, 2014 : Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Foreign Currency Translation Adjustments: Balance at beginning of period $ (230 ) $ (94 ) $ (204 ) $ (96 ) Other comprehensive income (loss) before reclassification adjustment 7 8 (18 ) 11 Tax (expense) benefit — 5 (1 ) 4 Other comprehensive income (loss), net of tax 7 13 (19 ) 15 Balance at end of period $ (223 ) $ (81 ) $ (223 ) $ (81 ) Net loss on derivative instruments: Balance at beginning of period $ — $ (1 ) $ — $ (1 ) Reclassification adjustment into Cost of Sales — 1 — 1 Tax expense — — — — Reclassification adjustment into Cost of Sales, net of tax — 1 — 1 Other comprehensive income, net of tax — 1 — 1 Balance at end of period $ — $ — $ — $ — Unrealized Gains and Losses on Available-for-Sale Securities: Balance at beginning of period $ 11 $ — $ 44 $ (2 ) Other comprehensive income (loss) before reclassification adjustment 6 — (1 ) 2 Tax (expense) benefit (2 ) — 1 — Other comprehensive income before reclassification adjustment, net of tax 4 — — 2 Reclassification adjustment into Gains on Sales of investments and businesses, net — — (46 ) — Tax expense — — 17 — Reclassification adjustment into Gains on sales of investments and businesses, net of tax — — (29 ) — Other comprehensive income (loss), net of tax 4 — (29 ) 2 Balance at end of period $ 15 $ — $ 15 $ — Defined Benefit Plans: Balance at beginning of period (1,694 ) (2,175 ) (1,695 ) (2,188 ) Other comprehensive loss before reclassification adjustment (53 ) — (53 ) — Tax expense — — — — Other comprehensive loss before reclassification adjustment, net of tax (53 ) — (53 ) — Reclassification adjustment - Actuarial net losses into Selling, general, and administrative expenses 18 25 36 53 Reclassification adjustment - Prior service benefits into Selling, general, and administrative expenses (16 ) (9 ) (32 ) (18 ) Reclassification adjustment - Non-U.S. pension curtailment gain into Selling, general, and administrative expenses (32 ) — (32 ) — Tax benefit — (5 ) (1 ) (11 ) Reclassification adjustment into Selling, general, and administrative expenses, net of tax (30 ) 11 (29 ) 24 Other comprehensive income (loss), net of tax (83 ) 11 (82 ) 24 Balance at end of period $ (1,777 ) $ (2,164 ) $ (1,777 ) $ (2,164 ) Total Accumulated other comprehensive loss $ (1,985 ) $ (2,245 ) $ (1,985 ) $ (2,245 ) |
Debt and Credit Facilities
Debt and Credit Facilities | 6 Months Ended |
Jul. 04, 2015 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | Debt and Credit Facilities As of July 4, 2015 , the Company had a $2.1 billion unsecured syndicated revolving credit facility, which includes a $450 million letter of credit sub-limit, (the “2014 Motorola Solutions Credit Agreement”) scheduled to mature on May 29, 2019. The Company must comply with certain customary covenants, including maximum leverage ratio as defined in the 2014 Motorola Solutions Credit Agreement. The Company was in compliance with its financial covenants as of July 4, 2015 . The Company did not borrow or issue any letters of credit under the 2014 Motorola Solutions Credit Agreement during the six months ended July 4, 2015 . On August 4, 2015, the Company entered into an agreement with Silver Lake Partners to issue $1 billion of 2% convertible notes which mature in September 2020. Interest on the notes will be payable semiannually. The notes are convertible anytime on or after two years from their issuance date, except in certain limited circumstances. The notes are convertible based on a conversion rate of 14.59854 per $1,000 principal amount (which is equal to an initial conversion price of $68.50 per share). The Company may, at its option, elect to settle the amount due upon conversion in cash, common stock, or a combination of cash and common stock. The Company expects to close this transaction on August 25, 2015. |
Risk Management
Risk Management | 6 Months Ended |
Jul. 04, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management | Risk Management Foreign Currency Risk As of July 4, 2015 , the Company had outstanding foreign exchange contracts with notional amounts totaling $609 million , compared to $628 million outstanding at December 31, 2014 . The Company does not believe these financial instruments should subject it to undue risk due to foreign exchange movements because gains and losses on these contracts should generally offset gains and losses on the underlying assets, liabilities and transactions. The following table shows the five largest net notional amounts of the positions to buy or sell foreign currency as of July 4, 2015 , and the corresponding positions as of December 31, 2014 : Notional Amount Net Buy (Sell) by Currency July 4, December 31, Euro $ 158 $ 214 Chinese Renminbi (148 ) (161 ) Norwegian Krone (91 ) (90 ) Australian Dollar (60 ) (42 ) Brazilian Real (46 ) (28 ) Interest Rate Risk As of July 4, 2015 , the Company had $3.4 billion of long-term debt, including the current portion, which is primarily priced at long-term, fixed interest rates. One of the Company’s European subsidiaries has Euro-denominated loans. The interest on the Euro-denominated loans is variable and the Company has an interest rate swap in place which is not designated as a hedge. As such, the changes in the fair value of the interest rate swap are included in Other income (expense) in the Company’s condensed consolidated statements of operations. The fair value of the interest rate swap was in a liability position of $2 million at July 4, 2015 and December 31, 2014 . Counterparty Risk The use of derivative financial instruments exposes the Company to counterparty credit risk in the event of non-performance by counterparties. However, the Company’s risk is limited to the fair value of the instruments when the derivative is in an asset position. The Company actively monitors its exposure to credit risk. As of July 4, 2015 , all of the counterparties have investment grade credit ratings. As of July 4, 2015 , the Company had $3 million of exposure to aggregate net credit risk with all counterparties. The following tables summarize the fair values and locations in the condensed consolidated balance sheets of all derivative financial instruments held by the Company as of July 4, 2015 and December 31, 2014 : Fair Values of Derivative Instruments Assets Liabilities July 4, 2015 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives not designated as hedging instruments: Foreign exchange contracts $ 3 Other current assets $ 1 Accrued liabilities Interest rate swap — Other current assets 2 Accrued liabilities Total derivatives $ 3 $ 3 Fair Values of Derivative Instruments Assets Liabilities December 31, 2014 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives not designated as hedging instruments: Foreign exchange contracts 1 Other current assets 5 Accrued liabilities Interest rate swap — Other current assets 2 Accrued liabilities Total derivatives 1 7 The following table summarizes the effect of derivatives not designated as hedging instruments on the Company's condensed consolidated statements of operations for the three and six months ended July 4, 2015 and June 28, 2014 : Three Months Ended Six Months Ended Statements of Operations Location Gain (loss) on Derivative Instruments July 4, June 28, July 4, June 28, Interest rate swap $ — $ — $ 1 $ — Other income (expense) Foreign exchange contracts 4 (1 ) (13 ) (2 ) Other income (expense) Total derivatives $ 4 $ (1 ) $ (12 ) $ (2 ) |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 04, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At the end of each interim reporting period, the Company makes an estimate of its annual effective income tax rate. Tax items included in the annual effective income tax rate are pro-rated for the full year and tax items discrete to a specific quarter are included in the effective income tax rate for that quarter. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods. The following table provides details of income taxes: Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Earnings from continuing operations before income taxes $ 215 $ 98 $ 343 $ 186 Income tax expense 64 20 104 23 Effective tax rate 30 % 20 % 30 % 12 % The Company recorded $64 million of net tax expense in the second quarter of 2015 resulting in an effective tax rate of 30% , compared to $20 million of net tax expense in the second quarter of 2014 resulting in an effective tax rate of 20% . The effective tax rate in the second quarter of 2015 was lower than the U.S. statutory tax rate of 35% primarily due to the rate differential for foreign affiliates and the U.S domestic production tax deduction. The effective tax rate in the second quarter of 2014 was lower than the U.S. statutory tax rate of 35% due to discrete tax benefits, primarily related to return-to-provision adjustments associated with our deferred tax liability for undistributed foreign earnings, the rate differential for foreign affiliates, and the U.S domestic production tax deduction. The Company recorded $104 million of net income tax expense in the first half of 2015 resulting in an effective tax rate of 30% , compared to $23 million of net tax expense resulting in an effective tax rate of 12% in the first half of 2014 . The effective tax rate for the first half of 2015 was lower than the U.S. statutory tax rate of 35% primarily due to the rate differential for foreign affiliates and the U.S domestic production tax deduction. The effective tax rate in the first half of 2014 was lower than the U.S. statutory tax rate of 35% due to a tax benefit associated with the net reduction in unrecognized tax benefits for facts that indicated the extent to which certain tax positions were more-likely-than-not of being sustained, discrete tax benefits primarily related to return-to-provision adjustments associated with our deferred tax liability for undistributed foreign earnings, the rate differential for foreign affiliates, and the U.S domestic production tax deduction. |
Retirement and Other Employee B
Retirement and Other Employee Benefits | 6 Months Ended |
Jul. 04, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement and Other Employee Benefits | Retirement and Other Employee Benefits Pension and Postretirement Health Care Benefits Plans The net periodic costs (benefits) for Pension and Postretirement Health Care Benefits Plans were as follows: U.S. Pension Benefit Plans Non U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Three Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Service cost $ — $ — $ 4 $ 4 $ 1 $ 1 Interest cost 47 93 19 20 2 3 Expected return on plan assets (52 ) (98 ) (31 ) (23 ) (3 ) (2 ) Amortization of: Unrecognized net loss 11 21 5 3 2 3 Unrecognized prior service cost (benefit) — — (1 ) 2 (15 ) (11 ) Curtailment gain — — (32 ) — — — Net periodic pension cost (benefit) $ 6 $ 16 $ (36 ) $ 6 $ (13 ) $ (6 ) During the three months ended July 4, 2015 , the Company amended its Non-U.S. defined benefit plan within the United Kingdom by closing future benefit accruals to all participants effective December 31, 2015. As a result, the Company recorded a curtailment gain of $32 million to Other charges in the Company’s condensed consolidated statements of operations. The Company made no contributions to its U.S. Pension Benefit Plans during the three months ended July 4, 2015 and $40 million of contributions to its U.S. Pension Benefit plans for the three months ended June 28, 2014 . During both the three months ended July 4, 2015 and June 28, 2014 , contributions of $3 million were made to the Company’s Non U.S. Pension Benefit Plans. U.S. Pension Benefit Plans Non U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Service cost $ — $ — $ 7 $ 7 $ 1 $ 1 Interest cost 96 185 35 40 4 6 Expected return on plan assets (106 ) (196 ) (57 ) (45 ) (5 ) (5 ) Amortization of: Unrecognized net loss 23 44 9 6 5 6 Unrecognized prior service cost (benefit) — — (2 ) 3 (30 ) (21 ) Curtailment gain — — (32 ) — — — Net periodic pension cost (benefit) $ 13 $ 33 $ (40 ) $ 11 $ (25 ) $ (13 ) The Company made no contributions to its U.S. Pension Benefit Plans during the six months ended July 4, 2015 and $66 million of contributions to its U.S. Pension Benefit Plans for the six months ended June 28, 2014 . During the six months ended July 4, 2015 and June 28, 2014 , contributions of $6 million and $20 million were made to the Company’s Non U.S. Pension Benefit Plans, respectively. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 6 Months Ended |
Jul. 04, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans Compensation expense for the Company’s employee stock options, stock appreciation rights, employee stock purchase plan, restricted stock and restricted stock units (“RSUs”) was as follows: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Share-based compensation expense included in: Costs of sales $ 2 $ 3 $ 5 $ 7 Selling, general and administrative expenses 12 16 25 33 Research and development expenditures 5 7 10 14 Share-based compensation expense included in Operating earnings 19 26 40 54 Tax benefit 6 8 13 17 Share-based compensation expense, net of tax $ 13 $ 18 $ 27 $ 37 Decrease in basic earnings per share $ (0.06 ) $ (0.07 ) $ (0.13 ) $ (0.15 ) Decrease in diluted earnings per share $ (0.06 ) $ (0.07 ) $ (0.13 ) $ (0.14 ) Share-based compensation expense in discontinued operations $ — $ 5 $ — $ 13 During the six months ended July 4, 2015 , the Company granted 0.8 million RSUs and 0.8 million stock options. The total aggregate compensation expense, net of estimated forfeitures, for these RSUs and stock options was $39 million and $9 million , respectively, which will be recognized over the vesting period of three years. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 04, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company holds certain fixed income securities, equity securities and derivatives, which are recognized and disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Fair value is measured using the fair value hierarchy and related valuation methodologies as defined in the authoritative literature. This guidance specifies a hierarchy of valuation techniques based on whether the inputs to each measurement are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's assumptions about current market conditions. The fair value hierarchy and related valuation methodologies are as follows: Level 1 —Quoted prices for identical instruments in active markets. Level 2 —Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets. Level 3 —Valuations derived from valuation techniques, in which one or more significant inputs are unobservable. The fair values of the Company’s financial assets and liabilities by level in the fair value hierarchy as of July 4, 2015 and December 31, 2014 were as follows: July 4, 2015 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 3 $ 3 Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations — 31 31 Corporate bonds — 9 9 Common stock 23 — 23 Liabilities: Foreign exchange derivative contracts $ — $ 1 $ 1 Interest rate swap — 2 2 December 31, 2014 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 1 $ 1 Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations — 14 14 Corporate bonds — 16 16 Mutual funds — 2 2 Common stock 71 — 71 Liabilities: Foreign exchange derivative contracts $ — $ 5 $ 5 Interest rate swap — 2 2 The Company had no Level 3 holdings as of July 4, 2015 or December 31, 2014 . At July 4, 2015 and December 31, 2014 , the Company had $2.2 billion and $3.3 billion , respectively, of investments in money market mutual funds (Level 2) classified as Cash and cash equivalents in its condensed consolidated balance sheets. The money market funds had quoted market prices that are equivalent to par. Using quoted market prices and market interest rates, the Company determined that the fair value of long-term debt at July 4, 2015 was $3.4 billion (Level 2). All other financial instruments are carried at cost, which is not materially different from the instruments’ fair values. |
Long-term Customer Financing an
Long-term Customer Financing and Sales Of Receivables | 6 Months Ended |
Jul. 04, 2015 | |
Receivables [Abstract] | |
Long-term Customer Financing and Sales of Receivables | Long-term Customer Financing and Sales of Receivables Long-term Customer Financing Long-term customer financing receivables consist of trade receivables with payment terms greater than twelve months, long-term loans and lease receivables under sales-type leases. Long-term customer financing receivables consist of the following: July 4, December 31, Long-term receivables $ 29 $ 49 Less current portion (11 ) (18 ) Non-current long-term receivables, net $ 18 $ 31 The current portion of long-term receivables is included in Accounts receivable, net and the non-current portion of long-term receivables is included in Other assets in the Company’s condensed consolidated balance sheets. The Company had outstanding commitments to provide long-term financing to third parties totaling $107 million at July 4, 2015 , compared to $293 million at December 31, 2014 . Outstanding commitments decreased during the six months ended July 4, 2015 primarily as a result of two large customer contracts, one of which was converted to an order without long-term financing and the other where the financing commitment was funded and sold. Sales of Receivables The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three and six months ended July 4, 2015 and June 28, 2014 : Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Accounts receivable sales proceeds $ 5 $ 26 $ 11 $ 33 Long-term receivables sales proceeds 43 52 108 52 Total proceeds from receivable sales $ 48 $ 78 $ 119 $ 85 At July 4, 2015 , the Company had retained servicing obligations for $627 million of long-term receivables, compared to $496 million of long-term receivables at December 31, 2014 . Servicing obligations are limited to collection activities related to the sales of accounts receivables and long-term receivables. Credit Quality of Customer Financing Receivables and Allowance for Credit Losses An aging analysis of financing receivables at July 4, 2015 and December 31, 2014 is as follows: July 4, 2015 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 5 $ — $ — $ — Commercial loans and leases secured 24 — 1 1 Total gross long-term receivables, including current portion $ 29 $ — $ 1 $ 1 December 31, 2014 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 14 $ — $ — $ — Commercial loans and leases secured 35 — — 12 Total gross long-term receivables, including current portion $ 49 $ — $ — $ 12 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 04, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters The Company is a defendant in various suits, claims and investigations that arise in the normal course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s condensed consolidated financial position, liquidity or results of operations. However, an unfavorable resolution could have a material adverse effect on the Company’s: (i) results of operations in the periods in which an adverse outcome becomes both probable and estimable or (ii) financial position or liquidity in the periods in which the matters are ultimately resolved. Other Indemnifications The Company is a party to a variety of agreements pursuant to which it is obligated to indemnify the other party with respect to certain matters. In indemnification cases, payment by the Company is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, which procedures typically allow the Company to challenge the other party's claims. In some instances, the Company may have recourse against third parties for certain payments made by the Company. Some of these obligations arise as a result of divestitures of the Company's assets or businesses and require the Company to indemnify the other party against losses arising from breaches of representations and warranties and covenants and, in some cases, the settlement of pending obligations. The Company's obligations under divestiture agreements for indemnification based on breaches of representations and warranties are generally limited in terms of duration and to amounts not in excess of a percentage of the contract value. The Company had no accruals for any such obligations at July 4, 2015 . In addition, the Company may provide indemnifications for losses that result from the breach of general warranties contained in certain commercial and intellectual property agreements. Historically, the Company has not made significant payments under these agreements. |
Segment Information
Segment Information | 6 Months Ended |
Jul. 04, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company conducts its business globally and manages it through the following two segments: Products: The Products segment is comprised of Devices and Systems. Devices includes two-way portable and vehicle mounted radios, accessories, and software features and upgrades. Systems includes the radio network core and central processing software, base stations, consoles, repeaters, and software applications and features. The primary customers of the Products segment are government, public safety and first-responder agencies, municipalities, and commercial and industrial customers who operate private communications networks and manage a mobile workforce. Services: The Services segment provides a full set of offerings for government, public safety and commercial communication networks including: (i) Integration services, (ii) Lifecycle Support services, (iii) Managed services, (iv) Smart Public Safety Solutions, and (v) iDEN services. Integration services includes implementation, optimization, and integration of networks, devices, software, and applications. The following table summarizes Net sales by segment: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Products $ 867 $ 887 $ 1,626 $ 1,640 Services 501 506 965 982 $ 1,368 $ 1,393 $ 2,591 $ 2,622 The following table summarizes the Operating earnings by segment: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Products $ 171 $ 95 $ 235 $ 134 Services 83 43 138 111 Operating earnings 254 138 373 245 Total other expense (39 ) (40 ) (30 ) (59 ) Earnings from continuing operations before income taxes $ 215 $ 98 $ 343 $ 186 |
Reorganization of Business
Reorganization of Business | 6 Months Ended |
Jul. 04, 2015 | |
Restructuring and Related Activities [Abstract] | |
Reorganization of Businesses | Reorganization of Business 2015 Charges During the three months ended July 4, 2015 , the Company recorded net reorganization of business charges of $16 million including $13 million of charges in Other charges, and $3 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. The $16 million of charges were all related to employee separation costs. During the six months ended July 4, 2015 , the Company recorded net reorganization of business charges of $30 million including $26 million of charges in Other charges and $4 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the $30 million were charges of $26 million for employee separation costs and $4 million for exit costs. The following table displays the net charges incurred by segment: July 4, 2015 Three Months Ended Six Months Ended Products $ 12 $ 22 Services 4 8 $ 16 $ 30 The following table displays a rollforward of the reorganization of business accruals established for lease exit costs and employee separation costs from January 1, 2015 to July 4, 2015 , including those related to discontinued operations which were maintained by the Company after the sale of the Enterprise business: January 1, 2015 Additional Charges Amount Used July 4, 2015 Exit costs $ — $ 4 $ — $ 4 Employee separation costs 57 26 (40 ) 43 $ 57 $ 30 $ (40 ) $ 47 Exit Costs At January 1, 2015 , the Company had no accruals for exit costs. During the six months ended July 4, 2015 , there were $4 million of additional charges related to the exit of leased facilities. The remaining accrual of $4 million , which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at July 4, 2015 , primarily represents future cash payments for lease obligations that are expected to be paid over a number of years. Employee Separation Costs At January 1, 2015 , the Company had an accrual of $57 million for employee separation costs. The 2015 additional charges of $26 million represent severance costs for approximately 300 employees. The $40 million used reflects cash payments to severed employees. The remaining accrual of $43 million , which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at July 4, 2015 , is expected to be paid, primarily within one year, to approximately 400 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments. 2014 Charges During the three months ended June 28, 2014 , the Company recorded net reorganization of business charges of $28 million , including $25 million of charges in Other charges and $3 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. The $28 million of charges were all related to employee separation costs. During the six months ended June 28, 2014 , the Company recorded net reorganization of business charges of $38 million , including $34 million of charges in Other charges and $4 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the aggregate $38 million were charges of $34 million related to employee separation costs and $4 million related to exit costs. The following table displays the net charges incurred by segment: June 28, 2014 Three Months Ended Six Months Ended Products $ 18 $ 24 Services 10 14 $ 28 $ 38 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jul. 04, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets Amortized intangible assets were comprised of the following: July 4, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Completed technology $ 59 $ 29 $ 37 $ 27 Patents 8 5 8 4 Customer-related 23 9 15 8 Other intangibles 20 15 17 15 $ 110 $ 58 $ 77 $ 54 Amortization expense on intangible assets was $3 million for the three months ended July 4, 2015 and $4 million for the six months ended July 4, 2015 . Amortization expense on intangible assets was $1 million for the three months ended June 28, 2014 and $2 million for the six months ended June 28, 2014 . As of July 4, 2015 , annual amortization expense is estimated to be $8 million in 2015 , $9 million in 2016 and 2017 , $8 million in 2018 , $7 million in 2019 , and $4 million in 2020 . Amortized intangible assets, excluding goodwill, were comprised of the following by segment: July 4, 2015 December 31, 2014 Gross Accumulated Gross Accumulated Products $ 89 $ 57 $ 77 $ 54 Services 21 1 — — $ 110 $ 58 $ 77 $ 54 Goodwill The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2015 to July 4, 2015 : Products Services Total Balance as of January 1, 2015 Aggregate goodwill $ 264 $ 119 $ 383 Accumulated impairment losses — — — Goodwill, net of impairment losses $ 264 $ 119 $ 383 Goodwill acquired 7 32 39 Purchase accounting adjustments 1 — 1 Balance as of July 4, 2015 Aggregate goodwill $ 272 $ 151 $ 423 Accumulated impairment losses — — — Goodwill, net of impairment losses $ 272 $ 151 $ 423 Acquisitions On November 18, 2014, the Company completed the acquisition of an equipment provider for a purchase price of $22 million . During the six months ended July 4, 2015 , the Company completed the purchase accounting for this acquisition, recognizing $8 million of goodwill and $12 million of identifiable intangible assets. These identifiable intangible assets were classified as completed technology to be amortized over five years. During the quarter ended April 4, 2015 the Company completed the acquisitions of two providers of public safety software-based solutions for an aggregate purchase price of $50 million . During the six months ended July 4, 2015 , the Company recognized an additional $32 million of goodwill, $21 million of identifiable intangible assets, and $4 million of acquired liabilities related to these acquisitions. The $21 million of identifiable intangible assets were classified as: (i) $10 million completed technology, (ii) $8 million customer-related, and (iii) $3 million of other intangibles. These intangible assets will be amortized over periods ranging from five to ten years. The results of operations for these acquisitions have been included in the Company’s condensed consolidated statements of operations subsequent to the acquisition date. The pro forma effects of these acquisitions are not significant individually or in the aggregate. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jul. 04, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers . This new standard will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount it expects to receive for those goods and services. This ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and estimates and changes in those estimates. This ASU will be effective for the Company beginning January 1, 2018. This ASU allows for both retrospective and modified-retrospective methods of adoption. The Company is in the process of determining the method of adoption it will elect and is currently assessing the impact of this ASU on its consolidated financial statements and footnote disclosures. In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . Under this guidance, debt issuance costs related to a recognized debt liability are required to be presented in the balance sheet as a direct reduction from the carrying amount of such debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this guidance. In adopting the ASU, the Company will be required to apply a full retrospective approach to all periods presented. This guidance will be effective January 1, 2016 and, upon adoption, debt issuance costs capitalized in other assets in the consolidated balance sheet will be reclassified and presented as a reduction to long-term debt. As of July 4, 2015, debt issuance costs, net of accumulated amortization, recognized in the condensed consolidated balance sheet were $18 million . In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 340): Simplifying the Measurement of Inventory . Under this guidance, entities utilizing the FIFO or average cost method should measure inventory at the lower of cost or net realizable value, whereas net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU should be applied prospectively and will be effective for the Company beginning January 1, 2017 with early adoption permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements and footnote disclosures. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summarized Activity of Discontinued Operations | The following table displays summarized activity in the Company's condensed consolidated statements of operations for discontinued operations during the three and six months ended July 4, 2015 and June 28, 2014 : Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Net sales $ — $ 560 $ — $ 1,133 Operating earnings — 55 — 118 Losses on sales of investments and businesses, net — (1 ) — (1 ) Investment impairments — (3 ) — (3 ) Earnings (loss) before income taxes (8 ) 50 (28 ) 112 Income tax benefit — (696 ) (7 ) (676 ) Earnings (loss) from discontinued operations, net of tax $ (8 ) $ 746 $ (21 ) $ 788 |
Other Financial Data (Tables)
Other Financial Data (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Charges (Income) | Other charges (income) included in Operating earnings consist of the following: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Other charges (income): Intangibles amortization $ 3 $ 1 $ 4 $ 2 Reorganization of business 13 25 26 34 Legal settlement — 8 — 8 Non-U.S. pension curtailment gain (32 ) — (32 ) — Gain on sale of building and land — — — (21 ) $ (16 ) $ 34 $ (2 ) $ 23 |
Other Income (Expense) | Interest expense, net, and Other, both included in Other income (expense), consist of the following: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Interest income (expense), net: Interest expense $ (42 ) $ (34 ) $ (86 ) $ (64 ) Interest income 3 5 7 10 $ (39 ) $ (29 ) $ (79 ) $ (54 ) Other: Investment impairments (3 ) — (3 ) — Foreign currency gain (loss) (11 ) (7 ) $ 7 $ (8 ) Gain (loss) on derivative instruments 4 (1 ) (12 ) (2 ) Gains on equity method investments 4 2 4 2 Other 2 (1 ) 3 (1 ) $ (4 ) $ (7 ) $ (1 ) $ (9 ) |
Earnings Per Common Share | The computation of basic and diluted earnings per common share is as follows: Amounts attributable to Motorola Solutions, Inc. common stockholders Earnings from Continuing Operations, net of tax Net Earnings Three Months Ended July 4, June 28, July 4, June 28, Basic earnings per common share: Earnings $ 150 $ 78 $ 142 $ 824 Weighted average common shares outstanding 208.0 253.7 208.0 253.7 Per share amount $ 0.72 $ 0.31 $ 0.68 $ 3.25 Diluted earnings per common share: Earnings $ 150 $ 78 $ 142 $ 824 Weighted average common shares outstanding 208.0 253.7 208.0 253.7 Add effect of dilutive securities: Share-based awards 1.5 2.5 1.5 2.5 Diluted weighted average common shares outstanding 209.5 256.2 209.5 256.2 Per share amount $ 0.72 $ 0.30 $ 0.68 $ 3.22 Amounts attributable to Motorola Solutions, Inc. common stockholders Earnings from Continuing Operations, net of tax Net Earnings Six Months Ended July 4, June 28, July 4, June 28, Basic earnings per common share: Earnings $ 238 $ 163 $ 217 $ 951 Weighted average common shares outstanding 211.7 253.8 211.7 253.8 Per share amount $ 1.12 $ 0.64 $ 1.03 $ 3.75 Diluted earnings per common share: Earnings $ 238 $ 163 $ 217 $ 951 Weighted average common shares outstanding 211.7 253.8 211.7 253.8 Add effect of dilutive securities: Share-based awards 2.1 3.4 2.1 3.4 Diluted weighted average common shares outstanding 213.8 257.2 213.8 257.2 Per share amount $ 1.11 $ 0.63 $ 1.01 $ 3.70 |
Investments | Investments consist of the following: July 4, 2015 Cost Unrealized Investments Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ 31 $ — $ 31 Corporate bonds 9 — 9 Common stock — 23 23 40 23 63 Other investments, at cost 208 — 208 Equity method investments 14 — 14 $ 262 $ 23 $ 285 December 31, 2014 Cost Unrealized Investments Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ 14 $ — $ 14 Corporate bonds 16 — 16 Mutual funds 2 — 2 Common stock 1 70 71 33 70 103 Other investments, at cost 191 — 191 Equity method investments 22 — 22 $ 246 $ 70 $ 316 |
Accounts Receivable, Net | Accounts receivable, net, consists of the following: July 4, December 31, Accounts receivable $ 1,168 $ 1,444 Less allowance for doubtful accounts (27 ) (35 ) $ 1,141 $ 1,409 |
Inventories, Net | Inventories, net, consist of the following: July 4, December 31, Finished goods $ 165 $ 163 Work-in-process and production materials 337 313 502 476 Less inventory reserves (138 ) (131 ) $ 364 $ 345 |
Other Current Assets | Other current assets consist of the following: July 4, December 31, Costs and earnings in excess of billings $ 385 $ 417 Tax-related refunds receivable 90 103 Zebra receivable for cash transferred — 49 Other 118 171 $ 593 $ 740 |
Property, Plant And Equipment, Net | Property, plant and equipment, net, consists of the following: July 4, December 31, Land $ 18 $ 18 Building 555 559 Machinery and equipment 1,695 1,672 2,268 2,249 Less accumulated depreciation (1,726 ) (1,700 ) $ 542 $ 549 |
Other Assets | Other assets consist of the following: July 4, December 31, Intangible assets, net $ 52 $ 23 Long-term receivables 18 31 Other 90 91 $ 160 $ 145 |
Accrued Liabilities | Accrued liabilities consist of the following: July 4, December 31, Deferred revenue $ 335 $ 355 Compensation 180 190 Billings in excess of costs and earnings 346 358 Tax liabilities 68 91 Dividend payable 70 75 Other 551 637 $ 1,550 $ 1,706 |
Other Liabilities | Other liabilities consist of the following: July 4, December 31, Defined benefit plans $ 1,600 $ 1,611 Postretirement Health Care Benefit Plan 39 49 Deferred revenue 121 139 Unrecognized tax benefits 51 54 Other 162 158 $ 1,973 $ 2,011 |
Changes in Accumulated Other Comprehensive Loss | The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the condensed consolidated statements of operations during the three and six months ended July 4, 2015 and June 28, 2014 : Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Foreign Currency Translation Adjustments: Balance at beginning of period $ (230 ) $ (94 ) $ (204 ) $ (96 ) Other comprehensive income (loss) before reclassification adjustment 7 8 (18 ) 11 Tax (expense) benefit — 5 (1 ) 4 Other comprehensive income (loss), net of tax 7 13 (19 ) 15 Balance at end of period $ (223 ) $ (81 ) $ (223 ) $ (81 ) Net loss on derivative instruments: Balance at beginning of period $ — $ (1 ) $ — $ (1 ) Reclassification adjustment into Cost of Sales — 1 — 1 Tax expense — — — — Reclassification adjustment into Cost of Sales, net of tax — 1 — 1 Other comprehensive income, net of tax — 1 — 1 Balance at end of period $ — $ — $ — $ — Unrealized Gains and Losses on Available-for-Sale Securities: Balance at beginning of period $ 11 $ — $ 44 $ (2 ) Other comprehensive income (loss) before reclassification adjustment 6 — (1 ) 2 Tax (expense) benefit (2 ) — 1 — Other comprehensive income before reclassification adjustment, net of tax 4 — — 2 Reclassification adjustment into Gains on Sales of investments and businesses, net — — (46 ) — Tax expense — — 17 — Reclassification adjustment into Gains on sales of investments and businesses, net of tax — — (29 ) — Other comprehensive income (loss), net of tax 4 — (29 ) 2 Balance at end of period $ 15 $ — $ 15 $ — Defined Benefit Plans: Balance at beginning of period (1,694 ) (2,175 ) (1,695 ) (2,188 ) Other comprehensive loss before reclassification adjustment (53 ) — (53 ) — Tax expense — — — — Other comprehensive loss before reclassification adjustment, net of tax (53 ) — (53 ) — Reclassification adjustment - Actuarial net losses into Selling, general, and administrative expenses 18 25 36 53 Reclassification adjustment - Prior service benefits into Selling, general, and administrative expenses (16 ) (9 ) (32 ) (18 ) Reclassification adjustment - Non-U.S. pension curtailment gain into Selling, general, and administrative expenses (32 ) — (32 ) — Tax benefit — (5 ) (1 ) (11 ) Reclassification adjustment into Selling, general, and administrative expenses, net of tax (30 ) 11 (29 ) 24 Other comprehensive income (loss), net of tax (83 ) 11 (82 ) 24 Balance at end of period $ (1,777 ) $ (2,164 ) $ (1,777 ) $ (2,164 ) Total Accumulated other comprehensive loss $ (1,985 ) $ (2,245 ) $ (1,985 ) $ (2,245 ) |
Risk Management (Tables)
Risk Management (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Largest Net Notional Amounts of The Positions to Buy or Sell Foreign Currency | The following table shows the five largest net notional amounts of the positions to buy or sell foreign currency as of July 4, 2015 , and the corresponding positions as of December 31, 2014 : Notional Amount Net Buy (Sell) by Currency July 4, December 31, Euro $ 158 $ 214 Chinese Renminbi (148 ) (161 ) Norwegian Krone (91 ) (90 ) Australian Dollar (60 ) (42 ) Brazilian Real (46 ) (28 ) |
Summary of Fair Values and Location In Condensed Consolidated Balance Sheet | The following tables summarize the fair values and locations in the condensed consolidated balance sheets of all derivative financial instruments held by the Company as of July 4, 2015 and December 31, 2014 : Fair Values of Derivative Instruments Assets Liabilities July 4, 2015 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives not designated as hedging instruments: Foreign exchange contracts $ 3 Other current assets $ 1 Accrued liabilities Interest rate swap — Other current assets 2 Accrued liabilities Total derivatives $ 3 $ 3 Fair Values of Derivative Instruments Assets Liabilities December 31, 2014 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives not designated as hedging instruments: Foreign exchange contracts 1 Other current assets 5 Accrued liabilities Interest rate swap — Other current assets 2 Accrued liabilities Total derivatives 1 7 |
Summary of Derivative Instruments and The Effect on the Condensed Consolidated Statements Of Operations | The following table summarizes the effect of derivatives not designated as hedging instruments on the Company's condensed consolidated statements of operations for the three and six months ended July 4, 2015 and June 28, 2014 : Three Months Ended Six Months Ended Statements of Operations Location Gain (loss) on Derivative Instruments July 4, June 28, July 4, June 28, Interest rate swap $ — $ — $ 1 $ — Other income (expense) Foreign exchange contracts 4 (1 ) (13 ) (2 ) Other income (expense) Total derivatives $ 4 $ (1 ) $ (12 ) $ (2 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides details of income taxes: Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Earnings from continuing operations before income taxes $ 215 $ 98 $ 343 $ 186 Income tax expense 64 20 104 23 Effective tax rate 30 % 20 % 30 % 12 % |
Retirement and Other Employee27
Retirement and Other Employee Benefits (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Benefit Plan Costs | The net periodic costs (benefits) for Pension and Postretirement Health Care Benefits Plans were as follows: U.S. Pension Benefit Plans Non U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Three Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Service cost $ — $ — $ 4 $ 4 $ 1 $ 1 Interest cost 47 93 19 20 2 3 Expected return on plan assets (52 ) (98 ) (31 ) (23 ) (3 ) (2 ) Amortization of: Unrecognized net loss 11 21 5 3 2 3 Unrecognized prior service cost (benefit) — — (1 ) 2 (15 ) (11 ) Curtailment gain — — (32 ) — — — Net periodic pension cost (benefit) $ 6 $ 16 $ (36 ) $ 6 $ (13 ) $ (6 ) During the three months ended July 4, 2015 , the Company amended its Non-U.S. defined benefit plan within the United Kingdom by closing future benefit accruals to all participants effective December 31, 2015. As a result, the Company recorded a curtailment gain of $32 million to Other charges in the Company’s condensed consolidated statements of operations. The Company made no contributions to its U.S. Pension Benefit Plans during the three months ended July 4, 2015 and $40 million of contributions to its U.S. Pension Benefit plans for the three months ended June 28, 2014 . During both the three months ended July 4, 2015 and June 28, 2014 , contributions of $3 million were made to the Company’s Non U.S. Pension Benefit Plans. U.S. Pension Benefit Plans Non U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Service cost $ — $ — $ 7 $ 7 $ 1 $ 1 Interest cost 96 185 35 40 4 6 Expected return on plan assets (106 ) (196 ) (57 ) (45 ) (5 ) (5 ) Amortization of: Unrecognized net loss 23 44 9 6 5 6 Unrecognized prior service cost (benefit) — — (2 ) 3 (30 ) (21 ) Curtailment gain — — (32 ) — — — Net periodic pension cost (benefit) $ 13 $ 33 $ (40 ) $ 11 $ (25 ) $ (13 ) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Compensation Expense | Compensation expense for the Company’s employee stock options, stock appreciation rights, employee stock purchase plan, restricted stock and restricted stock units (“RSUs”) was as follows: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Share-based compensation expense included in: Costs of sales $ 2 $ 3 $ 5 $ 7 Selling, general and administrative expenses 12 16 25 33 Research and development expenditures 5 7 10 14 Share-based compensation expense included in Operating earnings 19 26 40 54 Tax benefit 6 8 13 17 Share-based compensation expense, net of tax $ 13 $ 18 $ 27 $ 37 Decrease in basic earnings per share $ (0.06 ) $ (0.07 ) $ (0.13 ) $ (0.15 ) Decrease in diluted earnings per share $ (0.06 ) $ (0.07 ) $ (0.13 ) $ (0.14 ) Share-based compensation expense in discontinued operations $ — $ 5 $ — $ 13 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Company's Financial Assets And Liabilities | The fair values of the Company’s financial assets and liabilities by level in the fair value hierarchy as of July 4, 2015 and December 31, 2014 were as follows: July 4, 2015 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 3 $ 3 Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations — 31 31 Corporate bonds — 9 9 Common stock 23 — 23 Liabilities: Foreign exchange derivative contracts $ — $ 1 $ 1 Interest rate swap — 2 2 December 31, 2014 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 1 $ 1 Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations — 14 14 Corporate bonds — 16 16 Mutual funds — 2 2 Common stock 71 — 71 Liabilities: Foreign exchange derivative contracts $ — $ 5 $ 5 Interest rate swap — 2 2 |
Long-term Customer Financing 30
Long-term Customer Financing and Sales Of Receivables (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Receivables [Abstract] | |
Long-Term Customer Financing | Long-term customer financing receivables consist of trade receivables with payment terms greater than twelve months, long-term loans and lease receivables under sales-type leases. Long-term customer financing receivables consist of the following: July 4, December 31, Long-term receivables $ 29 $ 49 Less current portion (11 ) (18 ) Non-current long-term receivables, net $ 18 $ 31 |
Proceeds Received From Non-Recourse Sales Of Accounts Receivable And Long-Term Receivables | The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three and six months ended July 4, 2015 and June 28, 2014 : Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Accounts receivable sales proceeds $ 5 $ 26 $ 11 $ 33 Long-term receivables sales proceeds 43 52 108 52 Total proceeds from receivable sales $ 48 $ 78 $ 119 $ 85 |
Financing Receivables Aging Analysis | An aging analysis of financing receivables at July 4, 2015 and December 31, 2014 is as follows: July 4, 2015 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 5 $ — $ — $ — Commercial loans and leases secured 24 — 1 1 Total gross long-term receivables, including current portion $ 29 $ — $ 1 $ 1 December 31, 2014 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 14 $ — $ — $ — Commercial loans and leases secured 35 — — 12 Total gross long-term receivables, including current portion $ 49 $ — $ — $ 12 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Segment Reporting [Abstract] | |
Net Sales and Operating Earnings by Segment | The following table summarizes Net sales by segment: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Products $ 867 $ 887 $ 1,626 $ 1,640 Services 501 506 965 982 $ 1,368 $ 1,393 $ 2,591 $ 2,622 The following table summarizes the Operating earnings by segment: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Products $ 171 $ 95 $ 235 $ 134 Services 83 43 138 111 Operating earnings 254 138 373 245 Total other expense (39 ) (40 ) (30 ) (59 ) Earnings from continuing operations before income taxes $ 215 $ 98 $ 343 $ 186 |
Reorganization of Business (Tab
Reorganization of Business (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Reportable Segment | The following table displays the net charges incurred by segment: July 4, 2015 Three Months Ended Six Months Ended Products $ 12 $ 22 Services 4 8 $ 16 $ 30 The following table displays the net charges incurred by segment: June 28, 2014 Three Months Ended Six Months Ended Products $ 18 $ 24 Services 10 14 $ 28 $ 38 |
Reorganization of Businesses Accruals | The following table displays a rollforward of the reorganization of business accruals established for lease exit costs and employee separation costs from January 1, 2015 to July 4, 2015 , including those related to discontinued operations which were maintained by the Company after the sale of the Enterprise business: January 1, 2015 Additional Charges Amount Used July 4, 2015 Exit costs $ — $ 4 $ — $ 4 Employee separation costs 57 26 (40 ) 43 $ 57 $ 30 $ (40 ) $ 47 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jul. 04, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Amortized intangible assets were comprised of the following: July 4, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Completed technology $ 59 $ 29 $ 37 $ 27 Patents 8 5 8 4 Customer-related 23 9 15 8 Other intangibles 20 15 17 15 $ 110 $ 58 $ 77 $ 54 |
Amortized Intangible Assets, Excluding Goodwill, By Business Segment | Amortized intangible assets, excluding goodwill, were comprised of the following by segment: July 4, 2015 December 31, 2014 Gross Accumulated Gross Accumulated Products $ 89 $ 57 $ 77 $ 54 Services 21 1 — — $ 110 $ 58 $ 77 $ 54 |
Goodwill | The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2015 to July 4, 2015 : Products Services Total Balance as of January 1, 2015 Aggregate goodwill $ 264 $ 119 $ 383 Accumulated impairment losses — — — Goodwill, net of impairment losses $ 264 $ 119 $ 383 Goodwill acquired 7 32 39 Purchase accounting adjustments 1 — 1 Balance as of July 4, 2015 Aggregate goodwill $ 272 $ 151 $ 423 Accumulated impairment losses — — — Goodwill, net of impairment losses $ 272 $ 151 $ 423 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Millions | Jul. 04, 2015USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Debt issuance cost, net of accumulated amortization | $ 18 |
Discontinued Operations (Summar
Discontinued Operations (Summarized Activity Of Discontinued Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | Oct. 27, 2014 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||||
Earnings (loss) from discontinued operations, net of tax | $ (8) | $ 746 | $ (21) | $ 788 | |
Zebra Technologies Corporation | Enterprise | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal price agreed upon to sell Enterprise business | $ 3,450 | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||||
Net sales | 0 | 560 | 0 | 1,133 | |
Operating earnings | 0 | 55 | 0 | 118 | |
Losses on sales of investments and businesses, net | 0 | (1) | 0 | (1) | |
Investment impairments | 0 | (3) | 0 | (3) | |
Earnings (loss) before income taxes | (8) | 50 | (28) | 112 | |
Income tax benefit | 0 | (696) | (7) | (676) | |
Earnings (loss) from discontinued operations, net of tax | $ (8) | $ 746 | $ (21) | $ 788 |
Other Financial Data (Other Cha
Other Financial Data (Other Charges (Income)) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Other charges (income): | ||||
Intangibles amortization | $ 3 | $ 1 | $ 4 | $ 2 |
Reorganization of business | 13 | 25 | 26 | 34 |
Legal settlement | 0 | 8 | 0 | 8 |
Non-U.S. pension curtailment gain | (32) | 0 | (32) | 0 |
Gain on sale of building and land | 0 | 0 | 0 | (21) |
Other charges (income): | $ (16) | $ 34 | $ (2) | $ 23 |
Other Financial Data (Other Inc
Other Financial Data (Other Income (Expense)) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Interest income (expense), net: | ||||
Interest expense | $ (42) | $ (34) | $ (86) | $ (64) |
Interest income | 3 | 5 | 7 | 10 |
Interest income (expense), net: | (39) | (29) | (79) | (54) |
Other: | ||||
Investment impairments | (3) | 0 | (3) | 0 |
Foreign currency gain (loss) | (11) | (7) | 7 | (8) |
Gain (loss) on derivative instruments | 4 | (1) | (12) | (2) |
Gains on equity method investments | 4 | 2 | 4 | 2 |
Other | 2 | (1) | 3 | (1) |
Total Other Income (Expense) | $ (4) | $ (7) | $ (1) | $ (9) |
Other Financial Data (Earnings
Other Financial Data (Earnings Per Common Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Basic earnings (loss) per common share: | ||||
Earnings from continuing operations, net of tax | $ 150 | $ 78 | $ 238 | $ 163 |
Net earnings | $ 142 | $ 824 | $ 217 | $ 951 |
Weighted average common shares outstanding, basic (shares) | 208 | 253.7 | 211.7 | 253.8 |
Continuing operations (US$ per share) | $ 0.72 | $ 0.31 | $ 1.12 | $ 0.64 |
Basic earnings per share amount (US$ per share) | $ 0.68 | $ 3.25 | $ 1.03 | $ 3.75 |
Diluted earnings per common share: | ||||
Earnings from continuing operations, net of tax | $ 150 | $ 78 | $ 238 | $ 163 |
Net earnings | $ 142 | $ 824 | $ 217 | $ 951 |
Weighted average common shares outstanding, basic (shares) | 208 | 253.7 | 211.7 | 253.8 |
Add effect of dilutive securities: | ||||
Share-based awards (in shares) | 1.5 | 2.5 | 2.1 | 3.4 |
Diluted weighted average common shares outstanding (shares) | 209.5 | 256.2 | 213.8 | 257.2 |
Continuing operations (US$ per share) | $ 0.72 | $ 0.30 | $ 1.11 | $ 0.63 |
Diluted earnings per share amount (US$ per share) | $ 0.68 | $ 3.22 | $ 1.01 | $ 3.70 |
Restricted Stock Units (RSUs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options excluded from computation of dilutive shares due to antidilutive nature | 0.7 | 1.2 | ||
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options excluded from computation of dilutive shares due to antidilutive nature | 1.7 | 4.6 | 3.9 | 4.8 |
Other Financial Data (Investmen
Other Financial Data (Investments) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | Dec. 31, 2014 | |
Investments | |||||
Cost Basis | $ 262 | $ 262 | $ 246 | ||
Unrealized Gains | 23 | 23 | 70 | ||
Investments | 285 | 285 | 316 | ||
Investment impairments | (3) | $ 0 | (3) | $ 0 | |
Recognized gain on sale of cost method investment | 4 | ||||
Cash proceeds of shares sold of an equity investment | 47 | ||||
Gain on shares of equity investment sold | 46 | ||||
Available-for-sale securities: | |||||
Investments | |||||
Cost Basis | 40 | 40 | 33 | ||
Unrealized Gains | 23 | 23 | 70 | ||
Investments | 63 | 63 | 103 | ||
Government, agency, and government-sponsored enterprise obligations | |||||
Investments | |||||
Cost Basis | 31 | 31 | 14 | ||
Unrealized Gains | 0 | 0 | 0 | ||
Investments | 31 | 31 | 14 | ||
Corporate bonds | |||||
Investments | |||||
Cost Basis | 9 | 9 | 16 | ||
Unrealized Gains | 0 | 0 | 0 | ||
Investments | 9 | 9 | 16 | ||
Mutual funds | |||||
Investments | |||||
Cost Basis | 2 | ||||
Unrealized Gains | 0 | ||||
Investments | 2 | ||||
Common stock | |||||
Investments | |||||
Cost Basis | 0 | 0 | 1 | ||
Unrealized Gains | 23 | 23 | 70 | ||
Investments | 23 | 23 | 71 | ||
Other investments, at cost | |||||
Investments | |||||
Cost Basis | 208 | 208 | 191 | ||
Unrealized Gains | 0 | 0 | 0 | ||
Investments | 208 | 208 | 191 | ||
Equity method investments | |||||
Investments | |||||
Cost Basis | 14 | 14 | 22 | ||
Unrealized Gains | 0 | 0 | 0 | ||
Investments | $ 14 | $ 14 | $ 22 |
Other Financial Data (Accounts
Other Financial Data (Accounts Receivable, Net) (Details) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 1,168 | $ 1,444 |
Less allowance for doubtful accounts | (27) | (35) |
Accounts receivable, net | $ 1,141 | $ 1,409 |
Other Financial Data (Inventori
Other Financial Data (Inventories, Net) (Details) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Inventory, Net [Abstract] | ||
Finished goods | $ 165 | $ 163 |
Work-in-process and production materials | 337 | 313 |
Inventories, gross | 502 | 476 |
Less inventory reserves | (138) | (131) |
Inventories, net | $ 364 | $ 345 |
Other Financial Data (Other Cur
Other Financial Data (Other Current Assets) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jul. 04, 2015 | Dec. 31, 2014 | |
Other Current Assets [Abstract] | ||
Costs and earnings in excess of billings | $ 385 | $ 417 |
Tax-related refunds receivable | 90 | 103 |
Zebra receivable for cash transferred | 0 | 49 |
Other | 118 | 171 |
Other current assets | 593 | $ 740 |
Transferred cash balance | $ 49 |
Other Financial Data (Property,
Other Financial Data (Property, Plant And Equipment, Net) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | Dec. 31, 2014 | |
Property, Plant and Equipment, Net [Abstract] | |||||
Land | $ 18 | $ 18 | $ 18 | ||
Building | 555 | 555 | 559 | ||
Machinery and equipment | 1,695 | 1,695 | 1,672 | ||
Property, plant and equipment, gross | 2,268 | 2,268 | 2,249 | ||
Less accumulated depreciation | (1,726) | (1,726) | (1,700) | ||
Property, plant and equipment, net | 542 | 542 | $ 549 | ||
Depreciation expense | $ 38 | $ 45 | $ 77 | $ 84 |
Other Financial Data (Other Ass
Other Financial Data (Other Assets) (Details) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Other Assets [Abstract] | ||
Intangible assets, net | $ 52 | $ 23 |
Long-term receivables | 18 | 31 |
Other | 90 | 91 |
Other assets, total | $ 160 | $ 145 |
Other Financial Data (Accrued L
Other Financial Data (Accrued Liabilities) (Details) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Accrued Liabilities [Abstract] | ||
Deferred revenue | $ 335 | $ 355 |
Compensation | 180 | 190 |
Billings in excess of costs and earnings | 346 | 358 |
Tax liabilities | 68 | 91 |
Dividend payable | 70 | 75 |
Other | 551 | 637 |
Accrued liabilities | $ 1,550 | $ 1,706 |
Other Financial Data (Other Lia
Other Financial Data (Other Liabilities) (Details) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Other Liabilities [Abstract] | ||
Defined benefit plans | $ 1,600 | $ 1,611 |
Postretirement Health Care Benefit Plan | 39 | 49 |
Deferred revenue | 121 | 139 |
Unrecognized tax benefits | 51 | 54 |
Other | 162 | 158 |
Other liabilities | $ 1,973 | $ 2,011 |
Other Financial Data (Changes i
Other Financial Data (Changes in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | $ 2,766 | |||
Other comprehensive income (loss), net of tax | $ (72) | $ 25 | (130) | $ 42 |
Balance at end of period | 1,823 | 1,823 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (1,855) | |||
Other comprehensive income (loss), net of tax | (130) | |||
Balance at end of period | (1,985) | (2,245) | (1,985) | (2,245) |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (230) | (94) | (204) | (96) |
Other comprehensive income (loss) before reclassification adjustment | 7 | 8 | (18) | 11 |
Tax (expense) benefit | 0 | 5 | (1) | 4 |
Other comprehensive income (loss), net of tax | 7 | 13 | (19) | 15 |
Balance at end of period | (223) | (81) | (223) | (81) |
Net loss on derivative instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | 0 | (1) | 0 | (1) |
Reclassification adjustment | 0 | 1 | 0 | 1 |
Tax expense (benefit) | 0 | 0 | 0 | 0 |
Reclassification adjustment, net of tax | 0 | 1 | 0 | 1 |
Other comprehensive income (loss), net of tax | 0 | 1 | 0 | 1 |
Balance at end of period | 0 | 0 | 0 | 0 |
Unrealized Gains and Losses on Available-for-Sale Securities | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | 11 | 0 | 44 | (2) |
Other comprehensive income (loss) before reclassification adjustment | 6 | 0 | (1) | 2 |
Other comprehensive income (loss) before reclassification adjustment, tax | (2) | 0 | 1 | 0 |
Other comprehensive income before reclassification adjustment, net of tax | 4 | 0 | 0 | 2 |
Reclassification adjustment | 0 | 0 | (46) | 0 |
Tax expense (benefit) | 0 | 0 | 17 | 0 |
Reclassification adjustment, net of tax | 0 | 0 | (29) | 0 |
Other comprehensive income (loss), net of tax | 4 | 0 | (29) | 2 |
Balance at end of period | 15 | 0 | 15 | 0 |
Defined Benefit Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (1,694) | (2,175) | (1,695) | (2,188) |
Other comprehensive income (loss) before reclassification adjustment | (53) | 0 | (53) | 0 |
Other comprehensive income (loss) before reclassification adjustment, tax | 0 | 0 | 0 | 0 |
Other comprehensive income before reclassification adjustment, net of tax | (53) | 0 | (53) | 0 |
Tax expense (benefit) | 0 | (5) | (1) | (11) |
Reclassification adjustment, net of tax | (30) | 11 | (29) | 24 |
Other comprehensive income (loss), net of tax | (83) | 11 | (82) | 24 |
Balance at end of period | (1,777) | (2,164) | (1,777) | (2,164) |
Defined Benefit Plans - Actuarial net losses | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification adjustment | 18 | 25 | 36 | 53 |
Defined Benefit Plans - Prior service benefits | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification adjustment | (16) | (9) | (32) | (18) |
Defined Benefits Plans - Pension Curtailment | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification adjustment | $ (32) | $ 0 | $ (32) | $ 0 |
Other Financial Data (Narrative
Other Financial Data (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | Aug. 04, 2015 | Dec. 31, 2014 | Nov. 03, 2014 | Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||
Cash and cash equivalents | $ 3,112,000,000 | $ 2,876,000,000 | $ 3,112,000,000 | $ 2,876,000,000 | $ 3,954,000,000 | $ 3,225,000,000 | ||
Restricted cash and cash equivalents | 63,000,000 | 63,000,000 | $ 63,000,000 | |||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Stock repurchase program, authorized amount | $ 12,000,000,000 | |||||||
Payments for repurchased shares | $ 285,000,000 | $ 938,000,000 | 473,000,000 | |||||
Number of shares repurchased | 4.6 | 14.5 | ||||||
Repurchase of common shares, average cost (in US$ per share) | $ 61.63 | $ 64.69 | ||||||
Share repurchase authority utilized during period | $ 8,700,000,000 | |||||||
Share repurchase program, available for repurchases | $ 3,300,000,000 | 3,300,000,000 | ||||||
Cash dividends paid | $ 72,000,000 | $ 79,000,000 | $ 148,000,000 | $ 158,000,000 | ||||
Subsequent Event | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Stock repurchase program, authorized amount | $ 2,000,000,000 |
Debt and Credit Facilities (Cre
Debt and Credit Facilities (Credit Facility) (Narrative) (Details) - Jul. 04, 2015 - 2014 Motorola Solutions Credit Agreement - USD ($) | Total |
Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Unsecured syndicated revolving credit facility | $ 2,100,000,000 |
Borrowings outstanding | 0 |
Letter of Credit | |
Line of Credit Facility [Line Items] | |
Unsecured syndicated revolving credit facility | $ 450,000,000 |
Debt and Credit Facilities (Con
Debt and Credit Facilities (Convertible Notes) (Details) - Aug. 04, 2015 - Silver Lake Partners - Subsequent Event - Convertible Notes | USD ($)$ / shares |
Debt Instrument [Line Items] | |
Convertible note issued | $ | $ 1,000,000,000 |
Interest rate | 2.00% |
Term of to maturity | 2 years |
Conversion rate | 0.01459854 |
Effective conversion price of convertible shares (in dollars per share) | $ 68.50 |
Risk Management (Schedule Of La
Risk Management (Schedule Of Largest Notional Amounts Of The Positions To Buy Or Sell Foreign Currency) (Details) | Jul. 04, 2015USD ($)position | Dec. 31, 2014USD ($)position |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Number of net notional positions to buy or sell foreign currency disclosed (in number of positions) | position | 5 | 5 |
Euro | ||
Foreign Currency Contracts | ||
Notional amount of foreign currency derivatives | $ 158,000,000 | $ 214,000,000 |
Chinese Renminbi | ||
Foreign Currency Contracts | ||
Notional amount of foreign currency derivatives | (148,000,000) | (161,000,000) |
Norwegian Krone | ||
Foreign Currency Contracts | ||
Notional amount of foreign currency derivatives | (91,000,000) | (90,000,000) |
Australia Dollars | ||
Foreign Currency Contracts | ||
Notional amount of foreign currency derivatives | (60,000,000) | (42,000,000) |
Brazilian Real | ||
Foreign Currency Contracts | ||
Notional amount of foreign currency derivatives | $ (46,000,000) | $ (28,000,000) |
Risk Management (Summary Of Fai
Risk Management (Summary Of Fair Values And Location In Condensed Consolidated Balance Sheet) (Details) - Not Designated As Hedging Instruments - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | $ 3 | $ 1 |
Fair value of derivative liabilities | 3 | 7 |
Foreign exchange contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 3 | 1 |
Foreign exchange contracts | Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative liabilities | 1 | 5 |
Interest rate swap | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 0 | 0 |
Interest rate swap | Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative liabilities | $ 2 | $ 2 |
Risk Management (Summary Of Der
Risk Management (Summary Of Derivative Instruments And The Effect On The Condensed Consolidated Statements Of Operations) (Details) - Not Designated As Hedging Instruments - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on Derivative Instruments | $ 4 | $ (1) | $ (12) | $ (2) |
Interest rate swap | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on Derivative Instruments | 0 | 0 | 1 | 0 |
Foreign exchange contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on Derivative Instruments | $ 4 | $ (1) | $ (13) | $ (2) |
Risk Management (Narrative) (De
Risk Management (Narrative) (Details) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Notional amount of foreign currency derivatives | $ 609 | $ 628 |
Not Designated As Hedging Instruments | ||
Derivative [Line Items] | ||
Fair value of derivative liabilities | 3 | 7 |
Not Designated As Hedging Instruments | Interest Rate Swap | Accrued liabilities | ||
Derivative [Line Items] | ||
Fair value of derivative liabilities | 2 | $ 2 |
Credit Concentration Risk | ||
Derivative [Line Items] | ||
Notional amount of foreign currency derivatives | 3 | |
Reported Value Measurement | ||
Derivative [Line Items] | ||
Long-term debt | $ 3,400 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Earnings from continuing operations before income taxes | $ 215 | $ 98 | $ 343 | $ 186 |
Income tax expense | $ 64 | $ 20 | $ 104 | $ 23 |
Effective tax rate | 30.00% | 20.00% | 30.00% | 12.00% |
Federal income tax rate | 35.00% | 35.00% | 35.00% | 35.00% |
Retirement and Other Employee56
Retirement and Other Employee Benefits (Pension and Postretirement Health Care Benefits) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
U.S. Pension Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 47,000,000 | 93,000,000 | 96,000,000 | 185,000,000 |
Expected return on plan assets | (52,000,000) | (98,000,000) | (106,000,000) | (196,000,000) |
Amortization of: | ||||
Unrecognized net loss | 11,000,000 | 21,000,000 | 23,000,000 | 44,000,000 |
Unrecognized prior service cost (benefit) | 0 | 0 | 0 | 0 |
Curtailment gain | 0 | 0 | 0 | 0 |
Net periodic pension cost (benefit) | 6,000,000 | 16,000,000 | 13,000,000 | 33,000,000 |
Contributions | 0 | 40,000,000 | 0 | 66,000,000 |
Non U.S. Pension Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 4,000,000 | 4,000,000 | 7,000,000 | 7,000,000 |
Interest cost | 19,000,000 | 20,000,000 | 35,000,000 | 40,000,000 |
Expected return on plan assets | (31,000,000) | (23,000,000) | (57,000,000) | (45,000,000) |
Amortization of: | ||||
Unrecognized net loss | 5,000,000 | 3,000,000 | 9,000,000 | 6,000,000 |
Unrecognized prior service cost (benefit) | (1,000,000) | 2,000,000 | (2,000,000) | 3,000,000 |
Curtailment gain | (32,000,000) | 0 | (32,000,000) | 0 |
Net periodic pension cost (benefit) | (36,000,000) | 6,000,000 | (40,000,000) | 11,000,000 |
Contributions | 3,000,000 | 3,000,000 | 6,000,000 | 20,000,000 |
Postretirement Health Care Benefits Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
Interest cost | 2,000,000 | 3,000,000 | 4,000,000 | 6,000,000 |
Expected return on plan assets | (3,000,000) | (2,000,000) | (5,000,000) | (5,000,000) |
Amortization of: | ||||
Unrecognized net loss | 2,000,000 | 3,000,000 | 5,000,000 | 6,000,000 |
Unrecognized prior service cost (benefit) | (15,000,000) | (11,000,000) | (30,000,000) | (21,000,000) |
Curtailment gain | 0 | 0 | 0 | 0 |
Net periodic pension cost (benefit) | $ (13,000,000) | $ (6,000,000) | $ (25,000,000) | $ (13,000,000) |
Share-Based Compensation Plan57
Share-Based Compensation Plans (Schedule Of Compensation Expense) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 19 | $ 26 | $ 40 | $ 54 |
Tax benefit | 6 | 8 | 13 | 17 |
Share-based compensation expense, net of tax | $ 13 | $ 18 | $ 27 | $ 37 |
Decrease in basic earnings per share (US$ per share) | $ (0.06) | $ (0.07) | $ (0.13) | $ (0.15) |
Decrease in diluted earnings per share (US$ per share) | $ (0.06) | $ (0.07) | $ (0.13) | $ (0.14) |
Share-based compensation expense in discontinued operations | $ 0 | $ 5 | $ 0 | $ 13 |
Costs of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | 2 | 3 | 5 | 7 |
Selling, general and administrative expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | 12 | 16 | 25 | 33 |
Research and development expenditures | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 5 | $ 7 | $ 10 | $ 14 |
Share-Based Compensation Plan58
Share-Based Compensation Plans (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 19 | $ 26 | $ 40 | $ 54 |
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units granted in period (in shares) | 0.8 | |||
Compensation expense | $ 39 | |||
Compensation expense recognized during vesting period | 3 years | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted in period (in shares) | 0.8 | |||
Compensation expense | $ 9 | |||
Compensation expense recognized during vesting period | 3 years |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Of Assets And Liabilities) (Details) - Recurring basis - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Level 1 | Government, agency, and government-sponsored enterprise obligations | ||
Assets: | ||
Available-for-sale securities: | $ 0 | $ 0 |
Level 1 | Corporate bonds | ||
Assets: | ||
Available-for-sale securities: | 0 | 0 |
Level 1 | Mutual funds | ||
Assets: | ||
Available-for-sale securities: | 0 | |
Level 1 | Common stock | ||
Assets: | ||
Available-for-sale securities: | 23 | 71 |
Level 2 | Government, agency, and government-sponsored enterprise obligations | ||
Assets: | ||
Available-for-sale securities: | 31 | 14 |
Level 2 | Corporate bonds | ||
Assets: | ||
Available-for-sale securities: | 9 | 16 |
Level 2 | Mutual funds | ||
Assets: | ||
Available-for-sale securities: | 2 | |
Level 2 | Common stock | ||
Assets: | ||
Available-for-sale securities: | 0 | 0 |
Foreign exchange derivative contracts | Level 1 | ||
Assets: | ||
Foreign exchange derivative contracts | 0 | 0 |
Liabilities: | ||
Foreign exchange derivative contracts | 0 | 0 |
Foreign exchange derivative contracts | Level 2 | ||
Assets: | ||
Foreign exchange derivative contracts | 3 | 1 |
Liabilities: | ||
Foreign exchange derivative contracts | 1 | 5 |
Interest rate swap | Level 1 | ||
Liabilities: | ||
Interest rate swap | 0 | 0 |
Interest rate swap | Level 2 | ||
Liabilities: | ||
Interest rate swap | 2 | 2 |
Estimate of Fair Value, Fair Value Disclosure | Government, agency, and government-sponsored enterprise obligations | ||
Assets: | ||
Available-for-sale securities: | 31 | 14 |
Estimate of Fair Value, Fair Value Disclosure | Corporate bonds | ||
Assets: | ||
Available-for-sale securities: | 9 | 16 |
Estimate of Fair Value, Fair Value Disclosure | Mutual funds | ||
Assets: | ||
Available-for-sale securities: | 2 | |
Estimate of Fair Value, Fair Value Disclosure | Common stock | ||
Assets: | ||
Available-for-sale securities: | 23 | 71 |
Estimate of Fair Value, Fair Value Disclosure | Foreign exchange derivative contracts | ||
Assets: | ||
Foreign exchange derivative contracts | 3 | 1 |
Liabilities: | ||
Foreign exchange derivative contracts | 1 | 5 |
Estimate of Fair Value, Fair Value Disclosure | Interest rate swap | ||
Liabilities: | ||
Interest rate swap | $ 2 | $ 2 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | Jul. 04, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market mutual funds classified as cash and cash equivalents | $ 2,200,000,000 | $ 3,300,000,000 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Holdings | 0 | $ 0 |
Estimate of Fair Value, Fair Value Disclosure | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of long term debt | $ 3,400,000,000 |
Long-term Customer Financing 61
Long-term Customer Financing and Sales Of Receivables (Long-Term Customer Financing) (Details) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | ||
Long-term receivables | $ 29 | $ 49 |
Less current portion | (11) | (18) |
Non-current long-term receivables, net | $ 18 | $ 31 |
Long-term Customer Financing 62
Long-term Customer Financing and Sales Of Receivables (Proceeds Received From Non-Recourse Sales Of Accounts Receivable And Long-Term Receivables) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Receivables [Abstract] | ||||
Accounts receivable sales proceeds | $ 5 | $ 26 | $ 11 | $ 33 |
Long-term receivables sales proceeds | 43 | 52 | 108 | 52 |
Total proceeds from receivable sales | $ 48 | $ 78 | $ 119 | $ 85 |
Long-term Customer Financing 63
Long-term Customer Financing and Sales Of Receivables (Credit Quality Of Customer Financing Receivables And Allowance For Credit Losses) (Details) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Long-term Receivable | $ 29 | $ 49 |
Current Billed Due | 0 | 0 |
Past Due Under 90 Days | 1 | 0 |
Past Due Over 90 Days | 1 | 12 |
Municipal leases secured tax exempt | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Long-term Receivable | 5 | 14 |
Current Billed Due | 0 | 0 |
Past Due Under 90 Days | 0 | 0 |
Past Due Over 90 Days | 0 | 0 |
Commercial loans and leases secured | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Long-term Receivable | 24 | 35 |
Current Billed Due | 0 | 0 |
Past Due Under 90 Days | 1 | 0 |
Past Due Over 90 Days | $ 1 | $ 12 |
Long-term Customer Financing 64
Long-term Customer Financing and Sales Of Receivables (Narrative) (Details) $ in Millions | 6 Months Ended | |
Jul. 04, 2015USD ($)contract | Dec. 31, 2014USD ($) | |
Receivables [Abstract] | ||
Commitments to provide long-term financing | $ 107 | $ 293 |
Number of large customers contracts | contract | 2 | |
Servicing obligations for long-term receivables | $ 627 | $ 496 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | Jul. 04, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Accrual for obligations of divestitures | $ 0 |
Segment Information (Operating
Segment Information (Operating Business Segment) (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015USD ($) | Jun. 28, 2014USD ($) | Jul. 04, 2015USD ($)segment | Jun. 28, 2014USD ($) | |
Segment Reporting [Abstract] | ||||
Number of segments | segment | 2 | |||
Net Sales | $ 1,368 | $ 1,393 | $ 2,591 | $ 2,622 |
Business Segments Information | ||||
Operating earnings | 254 | 138 | 373 | 245 |
Total other expense | (39) | (40) | (30) | (59) |
Earnings from continuing operations before income taxes | 215 | 98 | 343 | 186 |
Products | ||||
Net Sales | 867 | 887 | 1,626 | 1,640 |
Business Segments Information | ||||
Operating earnings | 171 | 95 | 235 | 134 |
Services | ||||
Net Sales | 501 | 506 | 965 | 982 |
Business Segments Information | ||||
Operating earnings | $ 83 | $ 43 | $ 138 | $ 111 |
Reorganization of Business (Nar
Reorganization of Business (Narrative) (Details) | 3 Months Ended | 6 Months Ended | |||
Jul. 04, 2015USD ($)employee | Jun. 28, 2014USD ($) | Jul. 04, 2015USD ($)employee | Jun. 28, 2014USD ($) | Dec. 31, 2014USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | $ 16,000,000 | $ 28,000,000 | $ 30,000,000 | $ 38,000,000 | |
Restructuring reserve | 47,000,000 | 47,000,000 | $ 57,000,000 | ||
Restructuring charges | 30,000,000 | ||||
Restructuring charges settled with cash | 40,000,000 | ||||
Employee separation costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring reserve | 43,000,000 | 43,000,000 | 57,000,000 | ||
Restructuring charges | $ 16,000,000 | 28,000,000 | 26,000,000 | 34,000,000 | |
Restructuring charges settled with cash | $ 40,000,000 | ||||
Number of Employees Impacted By Reorganization of Business | |||||
Restructuring charges in the period for total employee severance (in number of employees) | employee | 300 | ||||
Number of employees expected to be paid (in number of employees) | employee | 400 | 400 | |||
Exit costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring reserve | $ 4,000,000 | $ 4,000,000 | $ 0 | ||
Restructuring charges | 4,000,000 | 4,000,000 | |||
Restructuring charges settled with cash | 0 | ||||
Other charges | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | 13,000,000 | 25,000,000 | 26,000,000 | 34,000,000 | |
Costs of sales | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | $ 3,000,000 | $ 3,000,000 | $ 4,000,000 | $ 4,000,000 |
Reorganization of Business (Net
Reorganization of Business (Net Charges Incurred By Business Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | $ 16 | $ 28 | $ 30 | $ 38 |
Products | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | 12 | 18 | 22 | 24 |
Services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | $ 4 | $ 10 | $ 8 | $ 14 |
Reorganization of Business (Reo
Reorganization of Business (Reorganization Of Businesses Accruals) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2015 | Jun. 28, 2014 | Jul. 04, 2015 | Jun. 28, 2014 | |
Restructuring Reserve [Roll Forward] | ||||
January 1, 2015 | $ 57,000,000 | |||
Additional Charges | 30,000,000 | |||
Amount Used | (40,000,000) | |||
July 4, 2015 | $ 47,000,000 | 47,000,000 | ||
Exit costs | ||||
Restructuring Reserve [Roll Forward] | ||||
January 1, 2015 | 0 | |||
Additional Charges | 4,000,000 | $ 4,000,000 | ||
Amount Used | 0 | |||
July 4, 2015 | 4,000,000 | 4,000,000 | ||
Employee separation costs | ||||
Restructuring Reserve [Roll Forward] | ||||
January 1, 2015 | 57,000,000 | |||
Additional Charges | 16,000,000 | $ 28,000,000 | 26,000,000 | $ 34,000,000 |
Amount Used | (40,000,000) | |||
July 4, 2015 | $ 43,000,000 | $ 43,000,000 |
Intangible Assets and Goodwil70
Intangible Assets and Goodwill (Intangible Assets) (Details) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 110 | $ 77 |
Accumulated Amortization | 58 | 54 |
Completed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 59 | 37 |
Accumulated Amortization | 29 | 27 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8 | 8 |
Accumulated Amortization | 5 | 4 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 23 | 15 |
Accumulated Amortization | 9 | 8 |
Other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 20 | 17 |
Accumulated Amortization | $ 15 | $ 15 |
Intangible Assets And Goodwil71
Intangible Assets And Goodwill (Amortized Intangible Assets, Excluding Goodwill, By Business Segment) (Details) - USD ($) $ in Millions | Jul. 04, 2015 | Dec. 31, 2014 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 110 | $ 77 |
Accumulated Amortization | 58 | 54 |
Products | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 89 | 77 |
Accumulated Amortization | 57 | 54 |
Services | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 21 | 0 |
Accumulated Amortization | $ 1 | $ 0 |
Intangible Assets and Goodwil72
Intangible Assets and Goodwill (Carrying Amount of Goodwill) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jul. 04, 2015 | Dec. 31, 2014 | |
Goodwill Activity | ||
Aggregate goodwill | $ 423 | $ 383 |
Accumulated impairment losses | 0 | 0 |
Goodwill, net of impairment losses | 423 | 383 |
Goodwill acquired | 39 | |
Purchase accounting adjustments | 1 | |
Products | ||
Goodwill Activity | ||
Aggregate goodwill | 272 | 264 |
Accumulated impairment losses | 0 | 0 |
Goodwill, net of impairment losses | 272 | 264 |
Goodwill acquired | 7 | |
Purchase accounting adjustments | 1 | |
Services | ||
Goodwill Activity | ||
Aggregate goodwill | 151 | 119 |
Accumulated impairment losses | 0 | 0 |
Goodwill, net of impairment losses | 151 | $ 119 |
Goodwill acquired | 32 | |
Purchase accounting adjustments | $ 0 |
Intangible Assets and Goodwil73
Intangible Assets and Goodwill (Narrative) (Details) $ in Millions | Nov. 18, 2014USD ($) | Jul. 04, 2015USD ($) | Apr. 04, 2015USD ($)acquisition | Jun. 28, 2014USD ($) | Jul. 04, 2015USD ($) | Jun. 28, 2014USD ($) | Dec. 31, 2014USD ($) |
Intangible Assets And Goodwill | |||||||
Amortization expense on intangibles | $ 3 | $ 1 | $ 4 | $ 2 | |||
Finite-Lived Intangible Assets, Future Amortization Expense | |||||||
2,015 | 8 | 8 | |||||
2,016 | 9 | 9 | |||||
2,017 | 9 | 9 | |||||
2,018 | 8 | 8 | |||||
2,019 | 7 | 7 | |||||
2,020 | 4 | 4 | |||||
Business Acquisition [Line Items] | |||||||
Goodwill | 423 | 423 | $ 383 | ||||
Acquired Communications Software Provider | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire businesses, gross | $ 22 | ||||||
Goodwill | 8 | 8 | |||||
Identifiable intangible assets recognized, other than goodwill | $ 12 | $ 12 | |||||
Business Acquisition of Two Public Safety Software-Based Solutions | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire businesses, gross | $ 50 | ||||||
Goodwill | $ 32 | ||||||
Number of acquisitions | acquisition | 2 | ||||||
Identifiable intangible assets recognized | $ 21 | ||||||
Liabilities acquired in business combination | $ 4 | ||||||
Minimum | Business Acquisition of Two Public Safety Software-Based Solutions | |||||||
Business Acquisition [Line Items] | |||||||
Period of Amortization for assets acquired in acquisition | 5 years | ||||||
Maximum | Business Acquisition of Two Public Safety Software-Based Solutions | |||||||
Business Acquisition [Line Items] | |||||||
Period of Amortization for assets acquired in acquisition | 10 years | ||||||
Completed technology | Acquired Communications Software Provider | |||||||
Business Acquisition [Line Items] | |||||||
Period of Amortization for assets acquired in acquisition | 5 years | ||||||
Completed technology | Business Acquisition of Two Public Safety Software-Based Solutions | |||||||
Business Acquisition [Line Items] | |||||||
Identifiable intangible assets recognized | $ 10 | ||||||
Customer-related | Business Acquisition of Two Public Safety Software-Based Solutions | |||||||
Business Acquisition [Line Items] | |||||||
Identifiable intangible assets recognized | 8 | ||||||
Other intangible | Business Acquisition of Two Public Safety Software-Based Solutions | |||||||
Business Acquisition [Line Items] | |||||||
Identifiable intangible assets recognized | $ 3 |