Document And Entity Information
Document And Entity Information | 3 Months Ended |
Apr. 02, 2016shares | |
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 | Apr. 2, 2016 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding (shares) | 174,604,364 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Income Statement [Abstract] | ||
Net sales from products | $ 702 | $ 758 |
Net sales from services | 491 | 465 |
Net sales | 1,193 | 1,223 |
Costs of products sales | 366 | 359 |
Costs of services sales | 325 | 316 |
Costs of sales | 691 | 675 |
Gross margin | 502 | 548 |
Selling, general and administrative expenses | 234 | 256 |
Research and development expenditures | 135 | 159 |
Other charges | 33 | 14 |
Operating earnings | 100 | 119 |
Other income (expense): | ||
Interest expense, net | (49) | (40) |
Gains (losses) on sales of investments and businesses, net | (21) | 46 |
Other | (8) | 3 |
Total other income (expense) | (78) | 9 |
Earnings from continuing operations before income taxes | 22 | 128 |
Income tax expense | 5 | 40 |
Earnings from continuing operations | 17 | 88 |
Loss from discontinued operations, net of tax | 0 | (13) |
Net earnings | 17 | 75 |
Less: Earnings attributable to noncontrolling interests | 0 | 1 |
Net earnings attributable to Motorola Solutions, Inc. | 17 | 74 |
Earnings from continuing operations, net of tax | 17 | 87 |
Loss from discontinued operations, net of tax | $ 0 | $ (13) |
Basic: | ||
Continuing operations (US$ per share) | $ 0.10 | $ 0.40 |
Discontinued operations (US$ per share) | 0 | (0.06) |
Basic (US$ per share): | 0.10 | 0.34 |
Diluted: | ||
Continuing operations (US$ per share) | 0.10 | 0.40 |
Discontinued operations (US$ per share) | 0 | (0.06) |
Diluted (US$ per share): | $ 0.10 | $ 0.34 |
Weighted average common shares outstanding: | ||
Basic (shares) | 174.5 | 215.3 |
Diluted (shares) | 177 | 217.8 |
Dividends declared per share (US$ per share) | $ 0.41 | $ 0.34 |
Condensed Consolidated Stateme3
Condensed Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 17 | $ 75 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 13 | (26) |
Marketable securities | 4 | (33) |
Defined benefit plans | 4 | 1 |
Total other comprehensive loss, net of tax | 21 | (58) |
Comprehensive income | 38 | 17 |
Less: Earnings attributable to noncontrolling interests | 0 | 1 |
Comprehensive income attributable to Motorola Solutions, Inc. common shareholders | $ 38 | $ 16 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 1,940 | $ 1,980 |
Accounts receivable, net | 1,148 | 1,362 |
Inventories, net | 287 | 296 |
Other current assets | 626 | 954 |
Current assets held for disposition | 0 | 27 |
Total current assets | 4,001 | 4,619 |
Property, plant and equipment, net | 997 | 487 |
Investments | 228 | 231 |
Deferred income taxes | 2,330 | 2,278 |
Goodwill | 590 | 420 |
Other assets | 884 | 271 |
Non-current assets held for disposition | 19 | 40 |
Total assets | 9,049 | 8,346 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Current portion of long-term debt | 4 | 4 |
Accounts payable | 424 | 518 |
Accrued liabilities | 1,604 | 1,671 |
Total current liabilities | 2,032 | 2,193 |
Long-term debt | 5,023 | 4,345 |
Other liabilities | 2,131 | 1,904 |
Stockholders’ Equity | ||
Preferred stock, $100 par value | 0 | 0 |
Common stock, $.01 par value: Authorized shares: 600.0 Issued shares: 4/2/16--174.8; 12/31/15--174.5 Outstanding shares: 4/2/2016--;174.6; 12/31/15--174.3 | 2 | 2 |
Additional paid-in capital | 99 | 42 |
Retained earnings | 1,597 | 1,716 |
Accumulated other comprehensive loss | (1,845) | (1,866) |
Total Motorola Solutions, Inc. stockholders’ equity (deficit) | (147) | (106) |
Noncontrolling interests | 10 | 10 |
Total stockholders’ equity (deficit) | (137) | (96) |
Total liabilities and stockholders’ equity | $ 9,049 | $ 8,346 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Apr. 02, 2016 | Dec. 31, 2015 |
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 (shares) | 600,000,000 | 600,000,000 |
Common stock, issued shares (shares) | 174,800,000 | 174,500,000 |
Common stock, outstanding shares (shares) | 174,600,000 | 174,300,000 |
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 | $ 75 | ||||
Other comprehensive income | (58) | ||||
Balance at end of period at Apr. 04, 2015 | $ (1,913) | ||||
Balance at beginning of period at Dec. 31, 2015 | (96) | $ 44 | (1,866) | $ 1,716 | $ 10 |
Balance (in shares) at Dec. 31, 2015 | 174.5 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 17 | 17 | |||
Other comprehensive income | $ 21 | 21 | |||
Issuance of common stock and stock options exercised | $ 40 | ||||
Issuance of common stock and stock options exercised (in shares) | 1.2 | ||||
Share repurchase program | (64) | ||||
Share repurchase program (in shares) | (0.9) | (0.9) | |||
Share-based compensation expense | $ 17 | ||||
Dividends declared | (72) | ||||
Balance at end of period at Apr. 02, 2016 | $ (137) | $ 101 | $ (1,845) | $ 1,597 | $ 10 |
Balance (in shares) at Apr. 02, 2016 | 174.8 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Operating | ||
Net earnings attributable to Motorola Solutions, Inc. | $ 17 | $ 74 |
Earnings attributable to noncontrolling interests | 0 | 1 |
Net earnings | 17 | 75 |
Loss from discontinued operations, net of tax | 0 | (13) |
Earnings from continuing operations, net of tax | 17 | 88 |
Adjustments to reconcile Earnings from continuing operations to Net cash provided by operating activities from continuing operations: | ||
Depreciation and amortization | 62 | 41 |
Non-cash other charges | 11 | 1 |
Share-based compensation expense | 17 | 21 |
Losses (gains) on sales of investments and businesses, net | 21 | (46) |
Deferred income taxes | 35 | 23 |
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | ||
Accounts receivable | 277 | 309 |
Inventories | (4) | (44) |
Other current assets | (43) | 26 |
Accounts payable and accrued liabilities | (363) | (247) |
Other assets and liabilities | (17) | (16) |
Net cash provided by operating activities from continuing operations | 13 | 156 |
Investing | ||
Acquisitions and investments, net | (1,053) | (74) |
Proceeds from sales of investments and businesses, net | 481 | 88 |
Capital expenditures | (51) | (33) |
Proceeds from sales of property, plant and equipment | 0 | 1 |
Net cash used for investing activities from continuing operations | (623) | (18) |
Financing | ||
Repayment of debt | (1) | (1) |
Net proceeds from issuance of debt | 673 | 0 |
Issuance of common stock | 40 | 41 |
Purchase of common stock | (64) | (653) |
Excess tax benefit from share-based compensation | 0 | 1 |
Payment of dividends | (71) | (75) |
Net cash provided by (used for) financing activities from continuing operations | 577 | (687) |
Effect of exchange rate changes on cash and cash equivalents from continuing operations | (7) | (52) |
Net decrease in cash and cash equivalents | (40) | (601) |
Cash and cash equivalents, beginning of period | 1,980 | 3,954 |
Cash and cash equivalents, end of period | 1,940 | 3,353 |
Cash paid during the period for: | ||
Interest, net | 59 | 50 |
Income and withholding taxes, net of refunds | $ 52 | $ 39 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Apr. 02, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements as of April 2, 2016 and for the three months ended April 2, 2016 and April 4, 2015 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, 2015 . The results of operations for the three months ended April 2, 2016 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 Developments On February 19, 2016, the Company completed the acquisition of Guardian Digital Communications Limited ("GDCL"), a holding company of Airwave Solutions Limited ("Airwave"), the largest private operator of a public safety network in the world. All of the outstanding equity of GDCL was acquired for the sum of £1 , after which the Company invested into GDCL £698 million , net of cash acquired, or approximately $1.0 billion , to settle all third party debt. The Company will make a deferred cash payment of £64 million on November 15, 2018. The Company funded the investment with a $675 million term loan (the “Term Loan”) and approximately $400 million of international cash on hand. The acquisition will be reported within our Services segment. It will enable the Company to geographically diversify its global Managed & Support services offerings within its Services segment, while offering a proven service delivery platform to build on for providing innovative, leading, mission-critical communications solutions and services to customers. See discussion in Note 14. 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 disclosures 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. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers: Deferral of the Effective Date" that delayed the effective date of ASU 2014-09 by one year to January 1, 2018, as the Company’s annual reporting period begins after December 15, 2017. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" which clarifies the implementation guidance on principal versus agent considerations and includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2014-09 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 February 2016, the FASB issued ASU No. 2016-02, "Leases," which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. The ASU is effective for the Company January 1, 2019 and interim periods within that reporting period. The ASU requires a modified retrospective method upon adoption. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, "Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting," which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. ASU 2016-07 is effective for the Company January 1, 2017 and interim periods within that reporting period. The adoption of ASU 2016-07 is not expected to have a material effect on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company has elected to adopt this accounting standard as of January 1, 2016. The impact of the prospective adoption of the provisions related to the recognition of excess tax benefits in income tax expense was a $2 million income tax benefit during the three months ended April 2, 2016 . Additionally, as a result of the adoption of this accounting standard, excess tax benefits on share-based compensation have been reported as a component of operating cash rather than within financing cash flows as previously presented, while the payment of withholding taxes on the settlement of share-based awards has been reported as a component of financing cash flows rather than within operating cash flows as previously presented. The change in presentation of withholding taxes within the condensed consolidated statements of cash flows has been adopted retrospectively, thereby increasing operating cash flows and reducing financing cash flows by $9 million and $5 million for the three months ended April 2, 2016 and April 4, 2015 . The presentation of excess tax benefits on share-based compensation has been adjusted prospectively within the condensed consolidated statement of cash flows, increasing operating cash flow and decreasing financing cash flow by $2 million for the three months ended April 2, 2016 . 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. We have retrospectively adopted ASU 2015-03 effective January 1, 2016. As a result, debt issuance costs which were previously capitalized in other assets in the condensed consolidated balance sheet have been presented as a reduction to long-term debt. As of April 2, 2016 and December 31, 2015 , $40 million and $41 million , respectively, have been presented as a component of long-term debt. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Apr. 02, 2016 | |
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. During the three months ended April 2, 2016 , the Company had no activity in the condensed consolidated statements of operations for discontinued operations. During the three months ended April 4, 2015 , the Company recorded a $13 million loss from discontinued operations. |
Other Financial Data
Other Financial Data | 3 Months Ended |
Apr. 02, 2016 | |
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 April 2, April 4, Other charges: Intangibles amortization $ 13 $ 2 Reorganization of business 7 12 Acquisition related transaction fees 13 — $ 33 $ 14 Other Income (Expense) Interest expense, net, and Other, both included in Other income (expense), consist of the following: Three Months Ended April 2, April 4, Interest income (expense), net: Interest expense $ (53 ) $ (43 ) Interest income 4 3 $ (49 ) $ (40 ) Other: Foreign currency gain $ 13 $ 18 Loss on derivative instruments (12 ) (17 ) Gains on equity method investments 1 — Realized foreign currency loss on acquisition (10 ) — Other — 2 $ (8 ) $ 3 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 April 2, April 4, April 2, April 4, Basic earnings per common share: Earnings $ 17 $ 87 $ 17 $ 74 Weighted average common shares outstanding 174.5 215.3 174.5 215.3 Per share amount $ 0.10 $ 0.40 $ 0.10 $ 0.34 Diluted earnings per common share: Earnings $ 17 $ 87 $ 17 $ 74 Weighted average common shares outstanding 174.5 215.3 174.5 215.3 Add effect of dilutive securities: Share-based awards 2.5 2.5 2.5 2.5 Diluted weighted average common shares outstanding 177.0 217.8 177.0 217.8 Per share amount $ 0.10 $ 0.40 $ 0.10 $ 0.34 In the computation of diluted earnings per common share from both continuing operations and on a net earnings basis for the three months ended April 2, 2016 , the assumed exercise of 4.0 million options and the assumed vesting of 0.6 million restricted stock units ("RSUs") were excluded because their inclusion would have been antidilutive. For the three months ended April 4, 2015 , the assumed exercise of 2.2 million stock options and the assumed vesting of 0.5 million RSUs were excluded because their inclusion would have been antidilutive. On August 25, 2015, the Company issued $1.0 billion of 2% Senior Convertible Notes which mature in September 2020 (the "Senior Convertible Notes"). The notes are convertible based on a conversion rate of 14.5985 per $1,000 principal amount (which is equal to an initial conversion price of $68.50 per share). See discussion in Note 4. In the event of conversion, the Company intends to settle the principal amount of the Senior Convertible Notes in cash. Because of the Company’s intention to settle the par value of the Senior Convertible Notes in cash upon conversion, Motorola Solutions does not reflect any shares underlying the Senior Convertible Notes in its diluted weighted average shares outstanding until the average stock price per share for the period exceeds the conversion price. In this case, only the number of shares that would be issuable (under the treasury stock method of accounting for share dilution) will be included, which is based upon the amount by which the average stock price exceeds the conversion price of $68.50 . For the three months ended April 2, 2016 , there was no dilutive impact of the Senior Convertible Notes. Balance Sheet Information Cash and Cash Equivalents The Company’s cash and cash equivalents were $1.9 billion at April 2, 2016 and $2.0 billion at December 31, 2015 . Of these amounts, $63 million was restricted at both April 2, 2016 and December 31, 2015 . Accounts Receivable, Net Accounts receivable, net, consists of the following: April 2, December 31, Accounts receivable $ 1,179 $ 1,390 Less allowance for doubtful accounts (31 ) (28 ) $ 1,148 $ 1,362 Inventories, Net Inventories, net, consist of the following: April 2, December 31, Finished goods $ 163 $ 151 Work-in-process and production materials 271 287 434 438 Less inventory reserves (147 ) (142 ) $ 287 $ 296 Other Current Assets Other current assets consist of the following: April 2, December 31, Available-for-sale securities $ 47 $ 438 Costs and earnings in excess of billings 324 374 Tax-related refunds receivable 110 44 Other 145 98 $ 626 $ 954 Property, Plant and Equipment, Net Property, plant and equipment, net, consists of the following: April 2, December 31, Land $ 17 $ 17 Building 521 523 Machinery and equipment 2,109 1,585 2,647 2,125 Less accumulated depreciation (1,650 ) (1,638 ) $ 997 $ 487 Depreciation expense for the three months ended April 2, 2016 and April 4, 2015 was $49 million and $39 million , respectively. On February 1, 2016, the Company completed the sale of its Penang, Malaysia manufacturing operations, including the land, building, equipment, and inventory, as well as the transfer of employees to a contract manufacturer. During the three months ended April 2, 2016 , the Company incurred a loss of $7 million on the sale of its Penang, Malaysia facility and manufacturing operations, which is included within Gains (losses) on sales of investments and businesses, net. Subsequent to the three months ended April 2, 2016 , the Company entered into an agreement for the sale of its corporate aircraft. The Company recognized an impairment loss of $3 million within Other charges during the three months ended April 2, 2016 based on the contracted sales price of the aircraft held for sale and has presented the aircraft as assets held for sale in its condensed consolidated balance sheets. The Company acquired property, plant and equipment, including network assets, of $481 million in the acquisition of GDCL. The valuation of acquired property, plant and equipment is not yet finalized and may be subject to a fair value adjustment. See discussion in Note 14. Investments Investments consist of the following: April 2, 2016 Cost Unrealized Investments Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ 52 $ — $ 52 Corporate bonds 7 — 7 Common stock — 2 2 59 2 61 Other investments, at cost 204 — 204 Equity method investments 10 — 10 $ 273 $ 2 $ 275 Less: current portion of available-for-sale securities 47 $ 228 December 31, 2015 Cost Unrealized Unrealized Investments Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ 455 $ — $ (11 ) $ 444 Corporate bonds 7 — — 7 Common stock — 6 — 6 462 6 (11 ) 457 Other investments, at cost 203 — — 203 Equity method investments 9 — — 9 674 6 (11 ) 669 Less: current portion of available-for-sale securities 438 $ 231 In December 2015, the Company invested $401 million in United Kingdom treasury securities in order to partially offset the risk associated with fluctuations in the British Pound Sterling in the period before the closing of the purchase of GDCL. The investments were recorded within Other current assets in the Company's consolidated balance sheets. The Company liquidated these investments in February 2016 to partially fund the acquisition of GDCL. During the three months ended April 2, 2016 , the Company realized a loss of $19 million associated with the sale, of which, $11 million was unrealized as of December 31, 2015. Other Assets Other assets consist of the following: April 2, December 31, Intangible assets, net $ 669 $ 49 Long-term receivables 29 47 Defined benefit plan assets 135 128 Other 51 47 $ 884 $ 271 Accrued Liabilities Accrued liabilities consist of the following: April 2, December 31, Deferred revenue $ 399 $ 390 Compensation 167 241 Billings in excess of costs and earnings 301 337 Tax liabilities 49 48 Dividend payable 72 71 Trade liabilities 133 135 Other 483 449 $ 1,604 $ 1,671 Other Liabilities Other liabilities consist of the following: April 2, December 31, Defined benefit plans $ 1,511 $ 1,512 Postretirement Health Care Benefit Plan 46 49 Deferred revenue 113 113 Unrecognized tax benefits 42 50 Deferred income taxes 141 — Deferred consideration (Note 14) 82 — Other 196 180 $ 2,131 $ 1,904 During the three months ended April 2, 2016 , the Company recorded an increase to its deferred income tax liability as a result of the acquisition of GDCL, as well as a liability of $82 million in the accounting for the acquisition of GDCL related to a payment of deferred consideration due on November 15, 2018 to the former owners. See discussion in Note 14. 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 in the aggregate 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. During the three months ended April 2, 2016 , the Company paid an aggregate of $64 million , including transaction costs, to repurchase approximately 0.9 million shares at an average price of $71.41 per share. As of April 2, 2016 , the Company had used approximately $11.0 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving $1.0 billion of authority available for future repurchases. Payment of Dividends: During the three months ended April 2, 2016 and April 4, 2015 , the Company paid $71 million and $75 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 months ended April 2, 2016 and April 4, 2015 : Three Months Ended April 2, April 4, Foreign Currency Translation Adjustments: Balance at beginning of period $ (266 ) $ (204 ) Other comprehensive income (loss) before reclassification adjustment 14 (27 ) Tax (expense) benefit (1 ) 1 Other comprehensive income (loss), net of tax 13 (26 ) Balance at end of period $ (253 ) $ (230 ) Available-for-Sale Securities: Balance at beginning of period $ (3 ) $ 44 Other comprehensive loss before reclassification adjustment — (7 ) Tax benefit — 3 Other comprehensive loss before reclassification adjustment, net of tax — (4 ) Reclassification adjustment into Gains (losses) on sales of investments and businesses, net 6 (46 ) Tax expense (benefit) (2 ) 17 Reclassification adjustment into Gains (losses) on sales of investments and businesses, net of tax 4 (29 ) Other comprehensive income (loss), net of tax 4 (33 ) Balance at end of period $ 1 $ 11 Defined Benefit Plans: Balance at beginning of period $ (1,597 ) $ (1,695 ) Reclassification adjustment - Actuarial net losses into Selling, general, and administrative expenses 10 19 Reclassification adjustment - Prior service benefits into Selling, general, and administrative expenses (5 ) (17 ) Tax benefit (1 ) (1 ) Reclassification adjustment into Selling, general, and administrative expenses, net of tax 4 1 Other comprehensive income, net of tax 4 1 Balance at end of period $ (1,593 ) $ (1,694 ) Total Accumulated other comprehensive loss $ (1,845 ) $ (1,913 ) |
Debt and Credit Facilities
Debt and Credit Facilities | 3 Months Ended |
Apr. 02, 2016 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | Debt and Credit Facilities As of April 2, 2016 , 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 April 2, 2016 . The Company did not borrow or issue any letters of credit under the 2014 Motorola Solutions Credit Agreement during the three months ended April 2, 2016 . On August 25, 2015, the Company entered into an agreement with Silver Lake Partners to issue $1.0 billion of 2% Senior Convertible Notes which mature in September 2020. Interest on these notes is 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 14.5985 per $1,000 principal amount (which is equal to an initial conversion price of $68.50 per share). In the event of conversion, the Company intends to settle the principal amount of the Senior Convertible Notes in cash. The Company has recorded a debt liability associated with the Senior Convertible Notes by determining the fair value of an equivalent debt instrument without a conversion option. Using a discount rate of 2.4% , which was determined based on a review of relevant market data, the Company has calculated the debt liability to be $992 million , indicating an $8 million discount to be amortized over the expected life of the debt instrument. The total of proceeds received in excess of the fair value of the debt liability of $8 million has been recorded within Additional paid-in capital. In connection with the completion of the acquisition of GDCL, the Company entered into a new term loan credit agreement (the “Term Loan Agreement”), under which the Company borrowed a Term Loan with an initial principal amount of $675 million and a maturity date of February 18, 2019. Interest on the Term Loan is variable and indexed to LIBOR. The interest expense on the Term Loan is payable semi-annually in May and November. No additional borrowings are permitted under the Term Loan Agreement and amounts borrowed and repaid or prepaid may not be re-borrowed. The Company's borrowing capacity under the 2014 Motorola Solutions Credit Agreement may be partially limited during the second quarter of 2016 due to the additional indebtedness incurred in connection with the Term Loan. Effective January 1, 2016, the Company retrospectively adopted ASU No. 2015-03, "Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." Under this guidance, we have revised the presentation of debt issuance costs which were previously capitalized in other assets in the consolidated balance sheet to be presented as a reduction to long-term debt. As of April 2, 2016 and December 31, 2015 , $40 million and $41 million , respectively, have been reclassified to be presented as a component of long-term debt. |
Risk Management
Risk Management | 3 Months Ended |
Apr. 02, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management | Risk Management Foreign Currency Risk As of April 2, 2016 , the Company had outstanding foreign exchange contracts with notional amounts totaling $708 million , compared to $494 million outstanding at December 31, 2015 . 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 April 2, 2016 , and the corresponding positions as of December 31, 2015 : Notional Amount Net Buy (Sell) by Currency April 2, December 31, Euro $ 233 $ 99 British Pound 150 62 Chinese Renminbi (95 ) (114 ) Australian Dollar (51 ) (60 ) Brazilian Real (49 ) (44 ) Interest Rate Risk One of the Company’s European subsidiaries has Euro-denominated loans. The interest on the Euro-denominated loans is variable. The Company has interest rate swap agreements in place which change the characteristics of interest rate payments from variable to maximum fixed-rate payments. The interest rate swaps are not designated as a hedge. As such, the changes in the fair value of the interest rate swaps 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 $1 million at both April 2, 2016 and December 31, 2015 . 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 April 2, 2016 , all of the counterparties have investment grade credit ratings. As of April 2, 2016 , 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 April 2, 2016 and December 31, 2015 : Fair Values of Derivative Instruments Assets Liabilities April 2, 2016 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives not designated as hedging instruments: Foreign exchange contracts $ 3 Other current assets $ 5 Accrued liabilities Interest rate swap — Other current assets 1 Accrued liabilities Total derivatives $ 3 $ 6 Fair Values of Derivative Instruments Assets Liabilities December 31, 2015 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives not designated as hedging instruments: Foreign exchange contracts 6 Other current assets 2 Accrued liabilities Interest rate swap — Other current assets 1 Accrued liabilities Total derivatives 6 3 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 months ended April 2, 2016 and April 4, 2015 : Three Months Ended Statements of Operations Location Loss on Derivative Instruments April 2, April 4, Interest rate swap $ — $ (1 ) Other income (expense) Foreign exchange contracts (12 ) (16 ) Other income (expense) Total derivatives $ (12 ) $ (17 ) The Company had no instruments designated as hedging instruments for the three months ended April 2, 2016 and April 4, 2015 . |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 02, 2016 | |
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 expense in interim periods is calculated at the estimated annual effective tax rate plus or minus the tax effects of items of income and expense that are discrete to the period. 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 April 2, April 4, Earnings from continuing operations before income taxes $ 22 $ 128 Income tax expense 5 40 Effective tax rate 23 % 31 % The Company recorded $5 million of net tax expense in the first quarter of 2016 resulting in an effective tax rate of 23% , compared to $40 million of net tax expense in the first quarter of 2015 resulting in an effective tax rate of 31% . The effective tax rate in the first quarter of 2016 was lower than the U.S. statutory tax rate of 35% primarily due to the recognition of excess tax benefits on share-based compensation in income tax expense as a result of the Company's adoption of ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." The rate was also positively impacted by the release of unrecognized tax benefit reserves, offset by increases in state valuation allowances and other adjustments to certain deferred tax assets. The effective tax rate in the first quarter of 2015 was lower than the U.S. statutory tax rate of 35% primarily due to the U.S. domestic production tax deduction and rate differential for foreign affiliates. |
Retirement and Other Employee B
Retirement and Other Employee Benefits | 3 Months Ended |
Apr. 02, 2016 | |
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 April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Service cost $ — $ — $ 2 $ 3 $ — $ — Interest cost 46 49 14 16 1 2 Expected return on plan assets (55 ) (54 ) (24 ) (26 ) (2 ) (2 ) Amortization of: Unrecognized net loss 9 12 3 4 1 3 Unrecognized prior service benefit — — — (2 ) (5 ) (15 ) Net periodic cost (benefit) $ — $ 7 $ (5 ) $ (5 ) $ (5 ) $ (12 ) Effective January 1, 2016, the Company changed the method used to estimate the interest and service cost components of net periodic cost for defined benefit pension and other post-retirement benefit plans. Historically, the interest and service cost components were estimated using a single weighted-average discount rate derived from the yield curve used to measure the projected benefit obligation at the beginning of the period. The Company has elected to use a full yield curve approach in the estimation of these components of net periodic cost by applying the specific spot rates along the yield curve used in the determination of the projected benefit obligation to the relevant projected cash flows. The Company made this change to improve the correlation between projected benefit cash flows and the corresponding yield curve spot rates and to provide a more precise measurement of interest and service costs. This change does not affect the measurement of total benefit obligations as the change in interest and service cost is completely offset in the actuarial loss reported in the period. The Company has concluded that this change is a change in estimate and, therefore, has accounted for it prospectively beginning January 1, 2016. Based on the change in estimate, the Company experienced no reduction in service costs and a $7 million reduction in interest costs for the three months ended April 2, 2016 compared to the prior approach. The overall reduction in the quarterly interest cost is comprised of $5 million related to the U.S. Pension Benefit Plans, $1 million related to the Postretirement Health Care Benefit Plans, and $1 million related to the Non U.S. Pension Benefits Plan. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 3 Months Ended |
Apr. 02, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans Compensation expense for the Company’s share-based compensation plans was as follows: Three Months Ended April 2, April 4, Share-based compensation expense included in: Costs of sales $ 2 $ 3 Selling, general and administrative expenses 12 13 Research and development expenditures 3 5 Share-based compensation expense included in Operating earnings 17 21 Tax benefit 5 7 Share-based compensation expense, net of tax $ 12 $ 14 Decrease in basic earnings per share $ (0.07 ) $ (0.07 ) Decrease in diluted earnings per share $ (0.07 ) $ (0.06 ) Share-based compensation expense in discontinued operations $ — $ — During the three months ended April 2, 2016 , the Company granted 0.6 million RSUs and market stock units ("MSUs") and 0.6 million stock options and performance options ("POs"). The total aggregate compensation expense, net of estimated forfeitures, for these RSUs and MSUs was $36 million and stock options and POs was $10 million , respectively, which will generally be recognized over the vesting period of three years. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 02, 2016 | |
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 April 2, 2016 and December 31, 2015 were as follows: April 2, 2016 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 3 $ 3 Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ — $ 52 $ 52 Corporate bonds — 7 7 Common stock 2 — 2 Liabilities: Foreign exchange derivative contracts $ — $ 5 $ 5 Interest rate swap — 1 1 December 31, 2015 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 6 $ 6 Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations — 444 444 Corporate bonds — 7 7 Common stock 6 — 6 Liabilities: Foreign exchange derivative contracts $ — $ 2 $ 2 Interest rate swap — 1 1 The Company had no Level 3 holdings as of April 2, 2016 or December 31, 2015 . At both April 2, 2016 and December 31, 2015 , the Company had $1.3 billion 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 April 2, 2016 and December 31, 2015 was $5.0 billion and $4.1 billion (Level 2), respectively. All other financial instruments are carried at cost, which is not materially different from the instruments’ fair values. |
Long-term Financing and Sales o
Long-term Financing and Sales of Receivables | 3 Months Ended |
Apr. 02, 2016 | |
Receivables [Abstract] | |
Long-term Financing and Sales of Receivables | Long-term Financing and Sales of Receivables Long-term Financing Long-term receivables consist of receivables with payment terms greater than twelve months, long-term loans and lease receivables under sales-type leases. Long-term receivables consist of the following: April 2, December 31, Long-term receivables $ 42 $ 60 Less current portion (13 ) (13 ) Gross non-current long-term receivables $ 29 $ 47 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 $91 million at April 2, 2016 , compared to $112 million at December 31, 2015 . Sales of Receivables The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three months ended April 2, 2016 and April 4, 2015 : Three Months Ended April 2, April 4, Accounts receivable sales proceeds $ 2 $ 6 Long-term receivables sales proceeds 42 65 Total proceeds from receivable sales $ 44 $ 71 At both April 2, 2016 and December 31, 2015 , the Company had retained servicing obligations for $668 million of long-term receivables. Servicing obligations are limited to collection activities related to the sales of accounts receivables and long-term receivables. Credit Quality of Financing Receivables and Allowance for Credit Losses An aging analysis of financing receivables at April 2, 2016 and December 31, 2015 is as follows: April 2, 2016 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 4 $ — $ — $ — Commercial loans and leases secured 38 4 — 1 Total gross long-term receivables, including current portion $ 42 $ 4 $ — $ 1 December 31, 2015 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 35 $ — $ — $ — Commercial loans and leases secured 25 1 1 1 Total gross long-term receivables, including current portion $ 60 $ 1 $ 1 $ 1 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 02, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters The Company is a defendant in various lawsuits, claims, and actions, which 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 consolidated financial position, liquidity, or results of operations in the periods in which the matters are ultimately resolved, or in the periods in which more information is obtained that changes management's opinion of the ultimate disposition. 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 April 2, 2016 . 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 | 3 Months Ended |
Apr. 02, 2016 | |
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, 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) Managed & Support services, and (iii) iDEN services. Integration services includes implementation, optimization, and integration of networks, devices, software, and applications. Managed & Support services includes a continuum of service offerings beginning with repair, technical support and hardware maintenance. More advanced offerings include network monitoring, software maintenance and cyber security services. Managed service offerings range from partial or full operation of customer owned networks to operation of Motorola Solutions owned networks. Services are provided across all radio network technologies, Command Center Consoles and Smart Public Safety Solutions. iDEN services consists primarily of hardware and software maintenance services for our legacy iDEN customers. The following table summarizes Net sales by segment: Three Months Ended April 2, April 4, Products $ 702 $ 758 Services 491 465 $ 1,193 $ 1,223 The following table summarizes the Operating earnings by segment: Three Months Ended April 2, April 4, Products $ 51 $ 64 Services 49 55 Operating earnings 100 119 Total other income (expense) (78 ) 9 Earnings from continuing operations before income taxes $ 22 $ 128 |
Reorganization of Business
Reorganization of Business | 3 Months Ended |
Apr. 02, 2016 | |
Restructuring and Related Activities [Abstract] | |
Reorganization of Businesses | Reorganization of Business 2016 Charges During the three months ended April 2, 2016 , the Company recorded net reorganization of business charges of $23 million including $7 million of charges in Other charges and $16 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the $23 million were charges of: (i) $24 million for employee separation costs and (ii) $3 million for the impairment of the corporate aircraft, partially offset by $4 million of reversals for accruals no longer needed. The following table displays the net charges incurred by segment: April 2, 2016 Three Months Ended Products $ 21 Services 2 $ 23 The following table displays a rollforward of the reorganization of business accruals established for lease exit costs and employee separation costs from January 1, 2016 to April 2, 2016 : January 1, 2016 Additional Charges Adjustments Amount Used April 2, 2016 Exit costs $ 9 $ — $ — $ (2 ) $ 7 Employee separation costs 51 24 (4 ) (21 ) 50 $ 60 $ 24 $ (4 ) $ (23 ) $ 57 Exit Costs At January 1, 2016 , the Company had $9 million of accruals for exit costs. During the three months ended April 2, 2016 , there were no additional charges and $2 million of cash payments related to the exit of leased facilities. The remaining accrual of $7 million , which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at April 2, 2016 , 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, 2016 , the Company had an accrual of $51 million for employee separation costs. The 2016 additional charges of $24 million represent severance costs for approximately 250 employees. The adjustment of $4 million reflects reversals for accruals no longer needed. The $21 million used reflects cash payments to severed employees. The remaining accrual of $50 million , which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at April 2, 2016 , 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. 2015 Charges During the three months ended April 4, 2015 , the Company recorded net reorganization of business charges of $14 million , including $12 million of charges in Other charges and $2 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the aggregate $14 million were charges of $10 million related to employee separation costs and $4 million related to exit costs. The following table displays the net charges incurred by segment: April 4, 2015 Three Months Ended Products $ 10 Services 4 $ 14 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Apr. 02, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Acquisitions During the year ended December 31, 2015 the Company completed the acquisitions of two providers of public safety software-based solutions for an aggregate purchase price of $50 million , recognizing an additional $31 million of goodwill, $22 million of identifiable intangible assets, and $3 million of acquired liabilities related to these acquisitions. The $22 million of identifiable intangible assets were classified as: (i) $11 million of completed technology, (ii) $8 million of 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. On February 19, 2016, the Company completed the acquisition of GDCL, a holding company of Airwave, the largest private operator of a public safety network in the world. All of the outstanding equity of GDCL was acquired for the sum of £1 , after which the Company invested into GDCL £698 million , net of cash acquired, or approximately $1.0 billion , to settle all third party debt. The Company will make a deferred cash payment of £64 million on November 15, 2018. The acquisition of GDCL enables the Company to geographically diversify its global Managed & Support services offerings within its Services segment, while offering a proven service delivery platform to build on for providing innovative, leading, mission-critical communications solutions and services to customers. During the three months ended April 2, 2016 , the Company recorded $61 million within Net sales and $3 million within Net earnings from the operations of Airwave. The acquisition of GDCL has been accounted for at fair value as of the acquisition date, based on the fair value of the total consideration transferred which has been attributed to all identifiable assets acquired and liabilities assumed and measured at fair value. The valuation of assets acquired and liabilities assumed in the acquisition has not yet been finalized as of April 2, 2016 . As a result, the Company recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date. The final allocation could differ materially from the preliminary allocation. The final allocation may include: (i) changes in fair values of property, plant and equipment, (ii) changes in allocations to intangible assets such as trade names, customer relationships, and goodwill, and (iii) other changes to assets and liabilities. The total consideration for the acquisition of GDCL was approximately $1.1 billion , consisting of cash payments of $1.0 billion , net of cash acquired, and deferred consideration valued at fair value based on its net present value on the date of the acquisition of $82 million . The net present value has been calculated using a discount rate of 4.2% , which is reflective of the credit standing of the combined entity. The following table summarizes preliminary fair values of assets acquired and liabilities assumed as of the February 19, 2016 acquisition date: Cash $ 86 Accounts receivable, net 55 Other current assets 36 Property, plant and equipment, net 481 Deferred income taxes 79 Intangible assets 631 Accounts payable (18 ) Accrued liabilities (184 ) Other liabilities (254 ) Goodwill 170 Total consideration $ 1,082 Net present value of deferred consideration payment to former owners (82 ) Net cash consideration at purchase $ 1,000 Acquired intangible assets consist of $602 million of customer relationships and $29 million of trade names. All intangibles have a useful life of 7 years, over which amortization expense will be recognized on a straight line basis. The fair values of trade names and customer relationships were estimated using the income approach. Customer relationships were valued under the excess earnings method which assumes that the value of an intangible asset is equal to the present value of the incremental after-tax cash flows attributable specifically to the intangible asset. Trade names were valued under the relief from royalty method, which assumes value to the extent that the acquired company is relieved of the obligation to pay royalties for the benefits received from them. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. Goodwill is not deductible for tax purposes. Pro Forma Financial Information The following table presents the unaudited pro forma combined results of operations of the Company and GDCL for the three months ended April 2, 2016 and April 4, 2015 as if the acquisition of GDCL had occurred on January 1, 2016 and January 1, 2015, respectively, (in millions, except per share amounts): Three Months Ended April 2, 2016 April 4, 2015 Revenues $ 1,264 $ 1,364 Earnings from continuing operations 41 100 Basic earnings per share 0.24 0.46 Diluted earnings per share 0.23 0.46 The pro forma results are based on estimates and assumptions, which the Company believes are reasonable. They are not necessarily indicative of its consolidated results of operations in future periods or the results that actually would have been realized had we been a combined company during the periods presented. The pro forma results include adjustments primarily related to amortization of acquired intangible assets, interest expense, and transaction costs expensed during the period. Intangible Assets Amortized intangible assets were comprised of the following: April 2, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Completed technology $ 60 $ 33 $ 60 $ 32 Patents 8 5 8 5 Customer-related 629 21 23 10 Other intangibles 46 15 20 15 $ 743 $ 74 $ 111 $ 62 Amortization expense on intangible assets was $13 million for the three months ended April 2, 2016 and $2 million for the three months ended April 4, 2015 . The increase in amortization expense is due to the acquisition of GDCL. As of April 2, 2016 , annual amortization expense is estimated to be $87 million in 2016 , $98 million in 2017 and 2018 , $97 million in 2019 , and $94 million in 2020 and 2021 . Amortized intangible assets, excluding goodwill, were comprised of the following by segment: April 2, 2016 December 31, 2015 Gross Accumulated Gross Accumulated Products $ 86 $ 59 $ 89 $ 60 Services 657 15 22 2 $ 743 $ 74 $ 111 $ 62 Goodwill The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2016 to April 2, 2016 : Products Services Total Balance as of January 1, 2016 Aggregate goodwill $ 270 $ 150 $ 420 Accumulated impairment losses — — — Goodwill, net of impairment losses $ 270 $ 150 $ 420 Goodwill acquired — 170 170 Balance as of April 2, 2016 Aggregate goodwill $ 270 $ 320 $ 590 Accumulated impairment losses — — — Goodwill, net of impairment losses $ 270 $ 320 $ 590 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Apr. 02, 2016 | |
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 disclosures 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. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers: Deferral of the Effective Date" that delayed the effective date of ASU 2014-09 by one year to January 1, 2018, as the Company’s annual reporting period begins after December 15, 2017. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" which clarifies the implementation guidance on principal versus agent considerations and includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2014-09 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 February 2016, the FASB issued ASU No. 2016-02, "Leases," which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. The ASU is effective for the Company January 1, 2019 and interim periods within that reporting period. The ASU requires a modified retrospective method upon adoption. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, "Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting," which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. ASU 2016-07 is effective for the Company January 1, 2017 and interim periods within that reporting period. The adoption of ASU 2016-07 is not expected to have a material effect on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company has elected to adopt this accounting standard as of January 1, 2016. The impact of the prospective adoption of the provisions related to the recognition of excess tax benefits in income tax expense was a $2 million income tax benefit during the three months ended April 2, 2016 . Additionally, as a result of the adoption of this accounting standard, excess tax benefits on share-based compensation have been reported as a component of operating cash rather than within financing cash flows as previously presented, while the payment of withholding taxes on the settlement of share-based awards has been reported as a component of financing cash flows rather than within operating cash flows as previously presented. The change in presentation of withholding taxes within the condensed consolidated statements of cash flows has been adopted retrospectively, thereby increasing operating cash flows and reducing financing cash flows by $9 million and $5 million for the three months ended April 2, 2016 and April 4, 2015 . The presentation of excess tax benefits on share-based compensation has been adjusted prospectively within the condensed consolidated statement of cash flows, increasing operating cash flow and decreasing financing cash flow by $2 million for the three months ended April 2, 2016 . 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. We have retrospectively adopted ASU 2015-03 effective January 1, 2016. As a result, debt issuance costs which were previously capitalized in other assets in the condensed consolidated balance sheet have been presented as a reduction to long-term debt. As of April 2, 2016 and December 31, 2015 , $40 million and $41 million , respectively, have been presented as a component of long-term debt. |
Other Financial Data (Tables)
Other Financial Data (Tables) | 3 Months Ended |
Apr. 02, 2016 | |
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 April 2, April 4, Other charges: Intangibles amortization $ 13 $ 2 Reorganization of business 7 12 Acquisition related transaction fees 13 — $ 33 $ 14 |
Other Income (Expense) | Interest expense, net, and Other, both included in Other income (expense), consist of the following: Three Months Ended April 2, April 4, Interest income (expense), net: Interest expense $ (53 ) $ (43 ) Interest income 4 3 $ (49 ) $ (40 ) Other: Foreign currency gain $ 13 $ 18 Loss on derivative instruments (12 ) (17 ) Gains on equity method investments 1 — Realized foreign currency loss on acquisition (10 ) — Other — 2 $ (8 ) $ 3 |
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 April 2, April 4, April 2, April 4, Basic earnings per common share: Earnings $ 17 $ 87 $ 17 $ 74 Weighted average common shares outstanding 174.5 215.3 174.5 215.3 Per share amount $ 0.10 $ 0.40 $ 0.10 $ 0.34 Diluted earnings per common share: Earnings $ 17 $ 87 $ 17 $ 74 Weighted average common shares outstanding 174.5 215.3 174.5 215.3 Add effect of dilutive securities: Share-based awards 2.5 2.5 2.5 2.5 Diluted weighted average common shares outstanding 177.0 217.8 177.0 217.8 Per share amount $ 0.10 $ 0.40 $ 0.10 $ 0.34 |
Accounts Receivable, Net | Accounts receivable, net, consists of the following: April 2, December 31, Accounts receivable $ 1,179 $ 1,390 Less allowance for doubtful accounts (31 ) (28 ) $ 1,148 $ 1,362 Long-term receivables consist of receivables with payment terms greater than twelve months, long-term loans and lease receivables under sales-type leases. Long-term receivables consist of the following: April 2, December 31, Long-term receivables $ 42 $ 60 Less current portion (13 ) (13 ) Gross non-current long-term receivables $ 29 $ 47 |
Inventories, Net | Inventories, net, consist of the following: April 2, December 31, Finished goods $ 163 $ 151 Work-in-process and production materials 271 287 434 438 Less inventory reserves (147 ) (142 ) $ 287 $ 296 |
Other Current Assets | Other current assets consist of the following: April 2, December 31, Available-for-sale securities $ 47 $ 438 Costs and earnings in excess of billings 324 374 Tax-related refunds receivable 110 44 Other 145 98 $ 626 $ 954 |
Property, Plant And Equipment, Net | Property, plant and equipment, net, consists of the following: April 2, December 31, Land $ 17 $ 17 Building 521 523 Machinery and equipment 2,109 1,585 2,647 2,125 Less accumulated depreciation (1,650 ) (1,638 ) $ 997 $ 487 |
Investments | Investments Investments consist of the following: April 2, 2016 Cost Unrealized Investments Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ 52 $ — $ 52 Corporate bonds 7 — 7 Common stock — 2 2 59 2 61 Other investments, at cost 204 — 204 Equity method investments 10 — 10 $ 273 $ 2 $ 275 Less: current portion of available-for-sale securities 47 $ 228 December 31, 2015 Cost Unrealized Unrealized Investments Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ 455 $ — $ (11 ) $ 444 Corporate bonds 7 — — 7 Common stock — 6 — 6 462 6 (11 ) 457 Other investments, at cost 203 — — 203 Equity method investments 9 — — 9 674 6 (11 ) 669 Less: current portion of available-for-sale securities 438 $ 231 |
Other Assets | Other assets consist of the following: April 2, December 31, Intangible assets, net $ 669 $ 49 Long-term receivables 29 47 Defined benefit plan assets 135 128 Other 51 47 $ 884 $ 271 |
Accrued Liabilities | Accrued liabilities consist of the following: April 2, December 31, Deferred revenue $ 399 $ 390 Compensation 167 241 Billings in excess of costs and earnings 301 337 Tax liabilities 49 48 Dividend payable 72 71 Trade liabilities 133 135 Other 483 449 $ 1,604 $ 1,671 |
Other Liabilities | Other liabilities consist of the following: April 2, December 31, Defined benefit plans $ 1,511 $ 1,512 Postretirement Health Care Benefit Plan 46 49 Deferred revenue 113 113 Unrecognized tax benefits 42 50 Deferred income taxes 141 — Deferred consideration (Note 14) 82 — Other 196 180 $ 2,131 $ 1,904 |
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 months ended April 2, 2016 and April 4, 2015 : Three Months Ended April 2, April 4, Foreign Currency Translation Adjustments: Balance at beginning of period $ (266 ) $ (204 ) Other comprehensive income (loss) before reclassification adjustment 14 (27 ) Tax (expense) benefit (1 ) 1 Other comprehensive income (loss), net of tax 13 (26 ) Balance at end of period $ (253 ) $ (230 ) Available-for-Sale Securities: Balance at beginning of period $ (3 ) $ 44 Other comprehensive loss before reclassification adjustment — (7 ) Tax benefit — 3 Other comprehensive loss before reclassification adjustment, net of tax — (4 ) Reclassification adjustment into Gains (losses) on sales of investments and businesses, net 6 (46 ) Tax expense (benefit) (2 ) 17 Reclassification adjustment into Gains (losses) on sales of investments and businesses, net of tax 4 (29 ) Other comprehensive income (loss), net of tax 4 (33 ) Balance at end of period $ 1 $ 11 Defined Benefit Plans: Balance at beginning of period $ (1,597 ) $ (1,695 ) Reclassification adjustment - Actuarial net losses into Selling, general, and administrative expenses 10 19 Reclassification adjustment - Prior service benefits into Selling, general, and administrative expenses (5 ) (17 ) Tax benefit (1 ) (1 ) Reclassification adjustment into Selling, general, and administrative expenses, net of tax 4 1 Other comprehensive income, net of tax 4 1 Balance at end of period $ (1,593 ) $ (1,694 ) Total Accumulated other comprehensive loss $ (1,845 ) $ (1,913 ) |
Risk Management (Tables)
Risk Management (Tables) | 3 Months Ended |
Apr. 02, 2016 | |
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 April 2, 2016 , and the corresponding positions as of December 31, 2015 : Notional Amount Net Buy (Sell) by Currency April 2, December 31, Euro $ 233 $ 99 British Pound 150 62 Chinese Renminbi (95 ) (114 ) Australian Dollar (51 ) (60 ) Brazilian Real (49 ) (44 ) |
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 April 2, 2016 and December 31, 2015 : Fair Values of Derivative Instruments Assets Liabilities April 2, 2016 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives not designated as hedging instruments: Foreign exchange contracts $ 3 Other current assets $ 5 Accrued liabilities Interest rate swap — Other current assets 1 Accrued liabilities Total derivatives $ 3 $ 6 Fair Values of Derivative Instruments Assets Liabilities December 31, 2015 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives not designated as hedging instruments: Foreign exchange contracts 6 Other current assets 2 Accrued liabilities Interest rate swap — Other current assets 1 Accrued liabilities Total derivatives 6 3 |
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 months ended April 2, 2016 and April 4, 2015 : Three Months Ended Statements of Operations Location Loss on Derivative Instruments April 2, April 4, Interest rate swap $ — $ (1 ) Other income (expense) Foreign exchange contracts (12 ) (16 ) Other income (expense) Total derivatives $ (12 ) $ (17 ) The Company had no instruments designated as hedging instruments for the three months ended April 2, 2016 and April 4, 2015 . |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Apr. 02, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides details of income taxes: Three Months Ended April 2, April 4, Earnings from continuing operations before income taxes $ 22 $ 128 Income tax expense 5 40 Effective tax rate 23 % 31 % |
Retirement and Other Employee26
Retirement and Other Employee Benefits (Tables) | 3 Months Ended |
Apr. 02, 2016 | |
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 April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Service cost $ — $ — $ 2 $ 3 $ — $ — Interest cost 46 49 14 16 1 2 Expected return on plan assets (55 ) (54 ) (24 ) (26 ) (2 ) (2 ) Amortization of: Unrecognized net loss 9 12 3 4 1 3 Unrecognized prior service benefit — — — (2 ) (5 ) (15 ) Net periodic cost (benefit) $ — $ 7 $ (5 ) $ (5 ) $ (5 ) $ (12 ) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 3 Months Ended |
Apr. 02, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Compensation Expense | Compensation expense for the Company’s share-based compensation plans was as follows: Three Months Ended April 2, April 4, Share-based compensation expense included in: Costs of sales $ 2 $ 3 Selling, general and administrative expenses 12 13 Research and development expenditures 3 5 Share-based compensation expense included in Operating earnings 17 21 Tax benefit 5 7 Share-based compensation expense, net of tax $ 12 $ 14 Decrease in basic earnings per share $ (0.07 ) $ (0.07 ) Decrease in diluted earnings per share $ (0.07 ) $ (0.06 ) Share-based compensation expense in discontinued operations $ — $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 02, 2016 | |
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 April 2, 2016 and December 31, 2015 were as follows: April 2, 2016 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 3 $ 3 Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ — $ 52 $ 52 Corporate bonds — 7 7 Common stock 2 — 2 Liabilities: Foreign exchange derivative contracts $ — $ 5 $ 5 Interest rate swap — 1 1 December 31, 2015 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 6 $ 6 Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations — 444 444 Corporate bonds — 7 7 Common stock 6 — 6 Liabilities: Foreign exchange derivative contracts $ — $ 2 $ 2 Interest rate swap — 1 1 |
Long-term Financing and Sales29
Long-term Financing and Sales of Receivables (Tables) | 3 Months Ended |
Apr. 02, 2016 | |
Receivables [Abstract] | |
Long-Term Customer Financing | Accounts receivable, net, consists of the following: April 2, December 31, Accounts receivable $ 1,179 $ 1,390 Less allowance for doubtful accounts (31 ) (28 ) $ 1,148 $ 1,362 Long-term receivables consist of receivables with payment terms greater than twelve months, long-term loans and lease receivables under sales-type leases. Long-term receivables consist of the following: April 2, December 31, Long-term receivables $ 42 $ 60 Less current portion (13 ) (13 ) Gross non-current long-term receivables $ 29 $ 47 |
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 months ended April 2, 2016 and April 4, 2015 : Three Months Ended April 2, April 4, Accounts receivable sales proceeds $ 2 $ 6 Long-term receivables sales proceeds 42 65 Total proceeds from receivable sales $ 44 $ 71 |
Financing Receivables Aging Analysis | An aging analysis of financing receivables at April 2, 2016 and December 31, 2015 is as follows: April 2, 2016 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 4 $ — $ — $ — Commercial loans and leases secured 38 4 — 1 Total gross long-term receivables, including current portion $ 42 $ 4 $ — $ 1 December 31, 2015 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 35 $ — $ — $ — Commercial loans and leases secured 25 1 1 1 Total gross long-term receivables, including current portion $ 60 $ 1 $ 1 $ 1 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Apr. 02, 2016 | |
Segment Reporting [Abstract] | |
Net Sales and Operating Earnings by Segment | The following table summarizes Net sales by segment: Three Months Ended April 2, April 4, Products $ 702 $ 758 Services 491 465 $ 1,193 $ 1,223 The following table summarizes the Operating earnings by segment: Three Months Ended April 2, April 4, Products $ 51 $ 64 Services 49 55 Operating earnings 100 119 Total other income (expense) (78 ) 9 Earnings from continuing operations before income taxes $ 22 $ 128 |
Reorganization of Business (Tab
Reorganization of Business (Tables) | 3 Months Ended |
Apr. 02, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Reportable Segment | The following table displays the net charges incurred by segment: April 2, 2016 Three Months Ended Products $ 21 Services 2 $ 23 The following table displays the net charges incurred by segment: April 4, 2015 Three Months Ended Products $ 10 Services 4 $ 14 |
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, 2016 to April 2, 2016 : January 1, 2016 Additional Charges Adjustments Amount Used April 2, 2016 Exit costs $ 9 $ — $ — $ (2 ) $ 7 Employee separation costs 51 24 (4 ) (21 ) 50 $ 60 $ 24 $ (4 ) $ (23 ) $ 57 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Apr. 02, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes preliminary fair values of assets acquired and liabilities assumed as of the February 19, 2016 acquisition date: Cash $ 86 Accounts receivable, net 55 Other current assets 36 Property, plant and equipment, net 481 Deferred income taxes 79 Intangible assets 631 Accounts payable (18 ) Accrued liabilities (184 ) Other liabilities (254 ) Goodwill 170 Total consideration $ 1,082 Net present value of deferred consideration payment to former owners (82 ) Net cash consideration at purchase $ 1,000 |
Results of Operations of the Company and GDCL as if the Acquisition has occurred on January 1, 2016 | The following table presents the unaudited pro forma combined results of operations of the Company and GDCL for the three months ended April 2, 2016 and April 4, 2015 as if the acquisition of GDCL had occurred on January 1, 2016 and January 1, 2015, respectively, (in millions, except per share amounts): Three Months Ended April 2, 2016 April 4, 2015 Revenues $ 1,264 $ 1,364 Earnings from continuing operations 41 100 Basic earnings per share 0.24 0.46 Diluted earnings per share 0.23 0.46 |
Intangible Assets | Amortized intangible assets were comprised of the following: April 2, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Completed technology $ 60 $ 33 $ 60 $ 32 Patents 8 5 8 5 Customer-related 629 21 23 10 Other intangibles 46 15 20 15 $ 743 $ 74 $ 111 $ 62 |
Amortized Intangible Assets, Excluding Goodwill, By Business Segment | Amortized intangible assets, excluding goodwill, were comprised of the following by segment: April 2, 2016 December 31, 2015 Gross Accumulated Gross Accumulated Products $ 86 $ 59 $ 89 $ 60 Services 657 15 22 2 $ 743 $ 74 $ 111 $ 62 |
Goodwill | The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2016 to April 2, 2016 : Products Services Total Balance as of January 1, 2016 Aggregate goodwill $ 270 $ 150 $ 420 Accumulated impairment losses — — — Goodwill, net of impairment losses $ 270 $ 150 $ 420 Goodwill acquired — 170 170 Balance as of April 2, 2016 Aggregate goodwill $ 270 $ 320 $ 590 Accumulated impairment losses — — — Goodwill, net of impairment losses $ 270 $ 320 $ 590 |
Basis of Presentation (Recent D
Basis of Presentation (Recent Developments) (Details) - Feb. 19, 2016 - Guardian Digital Communications Limited (GDCL) | USD ($) | GBP (£) |
Business Acquisition [Line Items] | ||
Consideration transfered | £ | £ 1 | |
Aggregate purchase price | $ 1,000,000,000 | 698,000,000 |
Deferred cash payment | £ | £ 64,000,000 | |
International cash on hand used to fund investment | $ | 400,000,000 | |
Term Loan | Term Loan Agreement | ||
Business Acquisition [Line Items] | ||
Debt instrument face amount | $ | $ 675,000,000 |
Basis of Presentation (Recent A
Basis of Presentation (Recent Accounting Pronouncements) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities from continuing operations | $ 13 | $ 156 |
Net cash provided by (used for) financing activities from continuing operations | 577 | (687) |
Accounting Standards Update 2016-09 | New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Income tax benefit impact of adoption | 2 | |
Accounting Standards Update 2016-09, Excess Tax Benefit Component | New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities from continuing operations | 2 | |
Net cash provided by (used for) financing activities from continuing operations | (2) | |
Accounting Standards Update 2016-09, Statutory Tax Withholding Component [Member] | New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities from continuing operations | 9 | 9 |
Net cash provided by (used for) financing activities from continuing operations | $ (5) | $ (5) |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 02, 2016 | Apr. 04, 2015 | Oct. 27, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain (Loss) from discontinued operations, net of tax | $ 0 | $ (13) | |
Zebra Technologies Corporation | Enterprise | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash sale price of Enterprise business | $ 3,450 |
Other Financial Data (Other Cha
Other Financial Data (Other Charges (Income)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Other charges: | ||
Intangibles amortization | $ 13 | $ 2 |
Reorganization of business | 7 | 12 |
Acquisition related transaction fees | 13 | 0 |
Other charges | $ 33 | $ 14 |
Other Financial Data (Other Inc
Other Financial Data (Other Income (Expense)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Interest income (expense), net: | ||
Interest expense | $ (53) | $ (43) |
Interest income | 4 | 3 |
Interest income (expense), net: | (49) | (40) |
Other: | ||
Foreign currency gain | 13 | 18 |
Loss on derivative instruments | (12) | (17) |
Gains on equity method investments | 1 | 0 |
Realized foreign currency loss on acquisition | (10) | 0 |
Other | 0 | 2 |
Total Other Income (Expense) | $ (8) | $ 3 |
Other Financial Data (Earnings
Other Financial Data (Earnings Per Common Share) (Details) $ / shares in Units, shares in Millions | Aug. 25, 2015USD ($)$ / shares | Apr. 02, 2016USD ($)$ / sharesshares | Apr. 04, 2015USD ($)$ / sharesshares |
Basic earnings (loss) per common share: | |||
Earnings from continuing operations, net of tax | $ | $ 17,000,000 | $ 87,000,000 | |
Net earnings | $ | $ 17,000,000 | $ 74,000,000 | |
Weighted average common shares outstanding, basic (shares) | 174.5 | 215.3 | |
Continuing operations (US$ per share) | $ / shares | $ 0.10 | $ 0.40 | |
Basic earnings per share amount (US$ per share) | $ / shares | $ 0.10 | $ 0.34 | |
Diluted earnings per common share: | |||
Earnings from continuing operations, net of tax | $ | $ 17,000,000 | $ 87,000,000 | |
Net earnings | $ | $ 17,000,000 | $ 74,000,000 | |
Weighted average common shares outstanding, basic (shares) | 174.5 | 215.3 | |
Add effect of dilutive securities: | |||
Share-based awards (in shares) | 2.5 | 2.5 | |
Diluted weighted average common shares outstanding (shares) | 177 | 217.8 | |
Continuing operations (US$ per share) | $ / shares | $ 0.10 | $ 0.40 | |
Diluted earnings per share amount (US$ per share) | $ / shares | $ 0.10 | $ 0.34 | |
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 | 4 | 2.2 | |
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 | 0.6 | 0.5 | |
Senior Convertible Notes | Convertible Notes | Silver Lake Partners | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Convertible note issued | $ | $ 1,000,000,000 | ||
Interest rate | 2.00% | ||
Conversion rate | 0.0145985 | ||
Effective conversion price of convertible shares (US$ per share) | $ / shares | $ 68.50 |
Other Financial Data (Cash and
Other Financial Data (Cash and Cash Equivalents) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 | Apr. 04, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 1,940 | $ 1,980 | $ 3,353 | $ 3,954 |
Restricted cash and cash equivalents | $ 63 | $ 63 |
Other Financial Data (Accounts
Other Financial Data (Accounts Receivable, Net) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 1,179 | $ 1,390 |
Less allowance for doubtful accounts | (31) | (28) |
Accounts receivable, net | $ 1,148 | $ 1,362 |
Other Financial Data (Inventori
Other Financial Data (Inventories, Net) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Inventory, Net [Abstract] | ||
Finished goods | $ 163 | $ 151 |
Work-in-process and production materials | 271 | 287 |
Inventories, gross | 434 | 438 |
Less inventory reserves | (147) | (142) |
Inventories, net | $ 287 | $ 296 |
Other Financial Data (Other Cur
Other Financial Data (Other Current Assets) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Other Current Assets [Abstract] | ||
Available-for-sale securities | $ 47 | $ 438 |
Costs and earnings in excess of billings | 324 | 374 |
Tax-related refunds receivable | 110 | 44 |
Other | 145 | 98 |
Other current assets | $ 626 | $ 954 |
Other Financial Data (Property,
Other Financial Data (Property, Plant And Equipment, Net) (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Apr. 02, 2016 | Apr. 04, 2015 | Feb. 19, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment, Net [Abstract] | ||||
Land | $ 17 | $ 17 | ||
Building | 521 | 523 | ||
Machinery and equipment | 2,109 | 1,585 | ||
Property, plant and equipment, gross | 2,647 | 2,125 | ||
Less accumulated depreciation | (1,650) | (1,638) | ||
Property, plant and equipment, net | 997 | $ 487 | ||
Depreciation expense | 49 | $ 39 | ||
Corporate Aircraft | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Impairment loss of corporate aircraft | 3 | |||
Guardian Digital Communications Limited (GDCL) | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment, net | $ 481 | |||
Disposal Group, Not Discontinued Operations | Penang, Malaysia Manufacturing Operations | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Loss on sale of manufacturing operations | $ 7 |
Other Financial Data (Investmen
Other Financial Data (Investments) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Dec. 31, 2015 | Apr. 02, 2016 | |
Available-for-sale securities: | ||
Cost Basis | $ 462 | $ 59 |
Unrealized Gains | 6 | 2 |
Unrealized (Loss) | (11) | |
Investments | 457 | 61 |
Other investments, at cost | 203 | 204 |
Equity method investments | 9 | 10 |
Investments, Cost Basis | 674 | 273 |
Investments | 669 | 275 |
Less: current portion of available-for-sale securities | 438 | 47 |
Long-term investments noncurrent | 231 | 228 |
Government, agency, and government-sponsored enterprise obligations | ||
Available-for-sale securities: | ||
Cost Basis | 455 | 52 |
Unrealized Gains | 0 | 0 |
Unrealized (Loss) | (11) | |
Investments | 444 | 52 |
Corporate bonds | ||
Available-for-sale securities: | ||
Cost Basis | 7 | 7 |
Unrealized Gains | 0 | 0 |
Unrealized (Loss) | 0 | |
Investments | 7 | 7 |
Common stock | ||
Available-for-sale securities: | ||
Cost Basis | 0 | 0 |
Unrealized Gains | 6 | 2 |
Unrealized (Loss) | 0 | |
Investments | 6 | 2 |
United Kingdom Treasury Securities | ||
Available-for-sale securities: | ||
Payments to acquire marketable securities | $ 401 | |
Realized loss on sale of securities | $ 19 |
Other Financial Data (Other Ass
Other Financial Data (Other Assets) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Other Assets [Abstract] | ||
Intangible assets, net | $ 669 | $ 49 |
Long-term receivables | 29 | 47 |
Defined benefit plan assets | 135 | 128 |
Other | 51 | 47 |
Other assets, total | $ 884 | $ 271 |
Other Financial Data (Accrued L
Other Financial Data (Accrued Liabilities) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Accrued Liabilities [Abstract] | ||
Deferred revenue | $ 399 | $ 390 |
Compensation | 167 | 241 |
Billings in excess of costs and earnings | 301 | 337 |
Tax liabilities | 49 | 48 |
Dividend payable | 72 | 71 |
Trade liabilities | 133 | 135 |
Other | 483 | 449 |
Accrued liabilities | $ 1,604 | $ 1,671 |
Other Financial Data (Other Lia
Other Financial Data (Other Liabilities) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Other Liabilities [Abstract] | ||
Defined benefit plans | $ 1,511 | $ 1,512 |
Postretirement Health Care Benefit Plan | 46 | 49 |
Deferred revenue | 113 | 113 |
Unrecognized tax benefits | 42 | 50 |
Deferred income taxes | 141 | 0 |
Deferred consideration | 82 | 0 |
Other | 196 | 180 |
Other liabilities | $ 2,131 | $ 1,904 |
Other Financial Data (Stockhold
Other Financial Data (Stockholders' Equity) (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 56 Months Ended | ||
Apr. 02, 2016 | Apr. 04, 2015 | Apr. 02, 2016 | Nov. 03, 2014 | |
Stockholders' Equity [Abstract] | ||||
Stock repurchase program, authorized amount | $ 12,000,000,000 | |||
Payments for repurchased shares | $ 64,000,000 | $ 653,000,000 | ||
Number of shares repurchased (in shares) | 0.9 | |||
Repurchase of common shares, average cost (in US$ per share) | $ 71.41 | |||
Share repurchase authority utilized during period | $ 11,000,000,000 | |||
Share repurchase program, available for repurchases | $ 1,000,000,000 | $ 1,000,000,000 | ||
Cash dividends paid | $ 71,000,000 | $ 75,000,000 |
Other Financial Data (Changes i
Other Financial Data (Changes in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | $ (96) | |
Total other comprehensive loss, net of tax | 21 | $ (58) |
Balance at end of period | (137) | |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (1,866) | |
Total other comprehensive loss, net of tax | 21 | |
Balance at end of period | (1,845) | (1,913) |
Foreign Currency Translation Adjustments: | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (266) | (204) |
Other comprehensive income (loss) before reclassification adjustment | 14 | (27) |
Tax (expense) benefit | (1) | 1 |
Total other comprehensive loss, net of tax | 13 | (26) |
Balance at end of period | (253) | (230) |
Available-for-Sale Securities: | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (3) | 44 |
Other comprehensive income (loss) before reclassification adjustment | 0 | (7) |
Other comprehensive loss before reclassification adjustment, net of tax | 0 | (4) |
Reclassification adjustment | 6 | (46) |
Tax expense (benefit) | (2) | 17 |
Reclassification adjustment, net of tax | 4 | (29) |
Tax (expense) benefit | 0 | 3 |
Total other comprehensive loss, net of tax | 4 | (33) |
Balance at end of period | 1 | 11 |
Defined Benefit Plans: | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (1,597) | (1,695) |
Tax expense (benefit) | (1) | (1) |
Reclassification adjustment, net of tax | 4 | 1 |
Total other comprehensive loss, net of tax | 4 | 1 |
Balance at end of period | (1,593) | (1,694) |
Reclassification adjustment - Actuarial net losses into Selling, general, and administrative expenses | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Reclassification adjustment | 10 | 19 |
Reclassification adjustment - Prior service benefits into Selling, general, and administrative expenses | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Reclassification adjustment | $ (5) | $ (17) |
Debt and Credit Facilities (Cre
Debt and Credit Facilities (Credit Facility) (Narrative) (Details) - 2014 Motorola Solutions Credit Agreement | 3 Months Ended |
Apr. 02, 2016USD ($) | |
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. 25, 2015USD ($)$ / shares | Apr. 02, 2016USD ($) | Feb. 19, 2016USD ($) | Dec. 31, 2015USD ($) |
Senior Convertible Notes | Silver Lake Partners | Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Convertible note issued | $ 1,000,000,000 | |||
Interest rate | 2.00% | |||
Term of to maturity | 2 years | |||
Conversion rate | 0.0145985 | |||
Effective conversion price of convertible shares (US$ per share) | $ / shares | $ 68.50 | |||
Discount rate | 2.40% | |||
Debt liability | $ 992,000,000 | |||
Discount of debt liability | 8,000,000 | |||
Fair value of debt liability recorded within additional paid in capital | 8,000,000 | |||
Airwave | Term Loan Agreement | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Convertible note issued | $ 675,000,000 | |||
Long-term Debt | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs presented as a component of long-term debt | $ 40,000,000 | $ 41,000,000 |
Risk Management (Foreign Curren
Risk Management (Foreign Currency Risk) (Details) $ in Millions | Apr. 02, 2016USD ($)position | Dec. 31, 2015USD ($)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 |
Foreign Exchange Contract | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | $ 708 | $ 494 |
Foreign Exchange Contract | Euro | Long | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 233 | 99 |
Foreign Exchange Contract | British Pound | Long | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 150 | 62 |
Foreign Exchange Contract | Chinese Renminbi | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 95 | 114 |
Foreign Exchange Contract | Australian Dollar | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 51 | 60 |
Foreign Exchange Contract | Brazilian Real | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | $ 49 | $ 44 |
Risk Management (Interest Rate
Risk Management (Interest Rate Risk) (Details) - Not Designated As Hedging Instruments - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Derivative [Line Items] | ||
Fair value of derivative liabilities | $ 6 | $ 3 |
Interest Rate Swap | Accrued liabilities | ||
Derivative [Line Items] | ||
Fair value of derivative liabilities | $ 1 | $ 1 |
Risk Management (Counterparty R
Risk Management (Counterparty Risk) (Details) $ in Millions | Apr. 02, 2016USD ($) |
Credit Concentration Risk | |
Derivative [Line Items] | |
Net credit risk with all counterparties | $ 3 |
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 | Apr. 02, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | $ 3 | $ 6 |
Fair value of derivative liabilities | 6 | 3 |
Foreign exchange contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 3 | 6 |
Foreign exchange contracts | Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative liabilities | 5 | 2 |
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 | $ 1 | $ 1 |
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 | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss on Derivative Instruments | $ (12) | $ (17) |
Interest rate swap | Other income (expense) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss on Derivative Instruments | 0 | (1) |
Foreign exchange contracts | Other income (expense) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss on Derivative Instruments | $ (12) | $ (16) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Income Tax Disclosure [Abstract] | ||
Earnings from continuing operations before income taxes | $ 22 | $ 128 |
Income tax expense | $ 5 | $ 40 |
Effective tax rate | 23.00% | 31.00% |
Federal income tax rate | 35.00% |
Retirement and Other Employee58
Retirement and Other Employee Benefits (Pension and Postretirement Health Care Benefits) (Details) - USD ($) | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
U.S. Pension Benefit Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 0 | $ 0 |
Interest cost | 46,000,000 | 49,000,000 |
Expected return on plan assets | (55,000,000) | (54,000,000) |
Amortization of: | ||
Unrecognized net loss | 9,000,000 | 12,000,000 |
Unrecognized prior service benefit | 0 | 0 |
Net periodic cost (benefit) | 0 | 7,000,000 |
Non U.S. Pension Benefit Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 2,000,000 | 3,000,000 |
Interest cost | 14,000,000 | 16,000,000 |
Expected return on plan assets | (24,000,000) | (26,000,000) |
Amortization of: | ||
Unrecognized net loss | 3,000,000 | 4,000,000 |
Unrecognized prior service benefit | 0 | (2,000,000) |
Net periodic cost (benefit) | (5,000,000) | (5,000,000) |
Postretirement Health Care Benefits Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 0 |
Interest cost | 1,000,000 | 2,000,000 |
Expected return on plan assets | (2,000,000) | (2,000,000) |
Amortization of: | ||
Unrecognized net loss | 1,000,000 | 3,000,000 |
Unrecognized prior service benefit | (5,000,000) | (15,000,000) |
Net periodic cost (benefit) | (5,000,000) | $ (12,000,000) |
Change in Accounting Method Accounted for as Change in Estimate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | |
Interest cost | (7,000,000) | |
Change in Accounting Method Accounted for as Change in Estimate | U.S. Pension Benefit Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | (5,000,000) | |
Change in Accounting Method Accounted for as Change in Estimate | Non U.S. Pension Benefit Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | (1,000,000) | |
Change in Accounting Method Accounted for as Change in Estimate | Postretirement Health Care Benefits Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ (1,000,000) |
Share-Based Compensation Plan59
Share-Based Compensation Plans (Schedule Of Compensation Expense) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense included in Operating earnings | $ 17 | $ 21 |
Tax benefit | 5 | 7 |
Share-based compensation expense, net of tax | $ 12 | $ 14 |
Decrease in basic earnings per share (US$ per share) | $ (0.07) | $ (0.07) |
Decrease in diluted earnings per share (US$ per share) | $ (0.07) | $ (0.06) |
Share-based compensation expense in discontinued operations | $ 0 | $ 0 |
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 |
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 | 13 |
Research and development expenditures | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense included in Operating earnings | $ 3 | $ 5 |
Share-Based Compensation Plan60
Share-Based Compensation Plans (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 17 | $ 21 |
Restricted Stock Units and Market Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Units granted in period (in shares) | 0.6 | |
Compensation expense | $ 36 | |
Stock Options and Performance Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted in period (in shares) | 0.6 | |
Compensation expense | $ 10 | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Of Assets And Liabilities) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Assets: | ||
Available-for-sale securities: | $ 61 | $ 457 |
Recurring basis | Level 1 | Government, agency, and government-sponsored enterprise obligations | ||
Assets: | ||
Available-for-sale securities: | 0 | 0 |
Recurring basis | Level 1 | Corporate bonds | ||
Assets: | ||
Available-for-sale securities: | 0 | 0 |
Recurring basis | Level 1 | Common stock | ||
Assets: | ||
Available-for-sale securities: | 2 | 6 |
Recurring basis | Level 2 | Government, agency, and government-sponsored enterprise obligations | ||
Assets: | ||
Available-for-sale securities: | 52 | 444 |
Recurring basis | Level 2 | Corporate bonds | ||
Assets: | ||
Available-for-sale securities: | 7 | 7 |
Recurring basis | Level 2 | Common stock | ||
Assets: | ||
Available-for-sale securities: | 0 | 0 |
Recurring basis | Foreign exchange contracts | Level 1 | ||
Assets: | ||
Foreign exchange derivative contracts | 0 | 0 |
Liabilities: | ||
Foreign exchange derivative contracts | 0 | 0 |
Recurring basis | Foreign exchange contracts | Level 2 | ||
Assets: | ||
Foreign exchange derivative contracts | 3 | 6 |
Liabilities: | ||
Foreign exchange derivative contracts | 5 | 2 |
Recurring basis | Interest rate swap | Level 1 | ||
Liabilities: | ||
Interest rate swap | 0 | 0 |
Recurring basis | Interest rate swap | Level 2 | ||
Liabilities: | ||
Interest rate swap | 1 | 1 |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Government, agency, and government-sponsored enterprise obligations | ||
Assets: | ||
Available-for-sale securities: | 52 | 444 |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Corporate bonds | ||
Assets: | ||
Available-for-sale securities: | 7 | 7 |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Common stock | ||
Assets: | ||
Available-for-sale securities: | 2 | 6 |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange derivative contracts | 3 | 6 |
Liabilities: | ||
Foreign exchange derivative contracts | 5 | 2 |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Interest rate swap | ||
Liabilities: | ||
Interest rate swap | $ 1 | $ 1 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Billions | Apr. 02, 2016 | Dec. 31, 2015 |
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 | $ 1.3 | $ 1.3 |
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 | $ 5 | $ 4.1 |
Long-term Financing and Sales63
Long-term Financing and Sales of Receivables (Long-Term Customer Financing) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Long-term receivables | $ 42 | $ 60 |
Less current portion | (13) | (13) |
Gross non-current long-term receivables | 29 | 47 |
Outstanding commitment to provide long-term financing to third parties | $ 91 | $ 112 |
Long-term Financing and Sales64
Long-term Financing and Sales of Receivables (Sales Receivables) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 02, 2016 | Apr. 04, 2015 | Dec. 31, 2015 | |
Receivables [Abstract] | |||
Accounts receivable sales proceeds | $ 2 | $ 6 | |
Long-term receivables sales proceeds | 42 | 65 | |
Total proceeds from receivable sales | 44 | $ 71 | |
Servicing obligations for long-term receivables | $ 668 | $ 668 |
Long-term Financing and Sales65
Long-term Financing and Sales of Receivables (Credit Quality Of Financing Receivables And Allowance For Credit Losses) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Long-term Receivable | $ 42 | $ 60 |
Current Billed Due | 4 | 1 |
Past Due Under 90 Days | 0 | 1 |
Past Due Over 90 Days | 1 | 1 |
Municipal leases secured tax exempt | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Long-term Receivable | 4 | 35 |
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 | 38 | 25 |
Current Billed Due | 4 | 1 |
Past Due Under 90 Days | 0 | 1 |
Past Due Over 90 Days | $ 1 | $ 1 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | Apr. 02, 2016USD ($) |
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 | |
Apr. 02, 2016USD ($)segment | Apr. 04, 2015USD ($) | |
Segment Reporting [Abstract] | ||
Number of segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Net Sales | $ 1,193 | $ 1,223 |
Business Segments Information | ||
Operating earnings | 100 | 119 |
Total other income (expense) | (78) | 9 |
Earnings from continuing operations before income taxes | 22 | 128 |
Products | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 702 | 758 |
Business Segments Information | ||
Operating earnings | 51 | 64 |
Services | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 491 | 465 |
Business Segments Information | ||
Operating earnings | $ 49 | $ 55 |
Reorganization of Business (Nar
Reorganization of Business (Narrative) (Details) | 3 Months Ended | ||
Apr. 02, 2016USD ($)employee | Apr. 04, 2015USD ($) | Dec. 31, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||
Reorganization of business charges | $ 23,000,000 | $ 14,000,000 | |
Restructuring, additional charges | 24,000,000 | ||
Restructuring, reversal of accruals no longer needed | 4,000,000 | ||
Restructuring reserve | 57,000,000 | $ 60,000,000 | |
Restructuring charges settled with cash | 23,000,000 | ||
Employee separation costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, additional charges | 24,000,000 | 10,000,000 | |
Restructuring, reversal of accruals no longer needed | 4,000,000 | ||
Restructuring reserve | 50,000,000 | 51,000,000 | |
Restructuring charges settled with cash | $ 21,000,000 | ||
Number of Employees Impacted By Reorganization of Business | |||
Restructuring charges in the period for total employee severance (in number of employees) | employee | 250 | ||
Number of employees expected to be paid (in number of employees) | employee | 400 | ||
Exit costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, additional charges | $ 0 | 4,000,000 | |
Restructuring, reversal of accruals no longer needed | 0 | ||
Restructuring reserve | 7,000,000 | $ 9,000,000 | |
Restructuring charges settled with cash | 2,000,000 | ||
Other charges | |||
Restructuring Cost and Reserve [Line Items] | |||
Reorganization of business charges | 7,000,000 | 12,000,000 | |
Costs of sales | |||
Restructuring Cost and Reserve [Line Items] | |||
Reorganization of business charges | 16,000,000 | $ 2,000,000 | |
Corporate aircraft | Asset Impairment Due Reorganization | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, impairment of assets | 3,000,000 | ||
Continuing Operations | Employee separation costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, reversal of accruals no longer needed | $ 4,000,000 |
Reorganization of Business (Net
Reorganization of Business (Net Charges Incurred By Business Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||
Reorganization of business charges | $ 23 | $ 14 |
Products | ||
Restructuring Cost and Reserve [Line Items] | ||
Reorganization of business charges | 21 | 10 |
Services | ||
Restructuring Cost and Reserve [Line Items] | ||
Reorganization of business charges | $ 2 | $ 4 |
Reorganization of Business (Reo
Reorganization of Business (Reorganization Of Businesses Accruals) (Details) - USD ($) | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Restructuring Reserve [Roll Forward] | ||
January 1, 2016 | $ 60,000,000 | |
Additional Charges | 24,000,000 | |
Adjustments | (4,000,000) | |
Amount Used | (23,000,000) | |
April 2, 2016 | 57,000,000 | |
Exit costs | ||
Restructuring Reserve [Roll Forward] | ||
January 1, 2016 | 9,000,000 | |
Additional Charges | 0 | $ 4,000,000 |
Adjustments | 0 | |
Amount Used | (2,000,000) | |
April 2, 2016 | 7,000,000 | |
Employee separation costs | ||
Restructuring Reserve [Roll Forward] | ||
January 1, 2016 | 51,000,000 | |
Additional Charges | 24,000,000 | $ 10,000,000 |
Adjustments | (4,000,000) | |
Amount Used | (21,000,000) | |
April 2, 2016 | $ 50,000,000 |
Intangible Assets and Goodwil71
Intangible Assets and Goodwill (Acquisitions) (Details) $ in Millions | Feb. 19, 2016USD ($) | Feb. 19, 2016GBP (£) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($)acquisition | Apr. 02, 2016USD ($) |
Business Acquisition [Line Items] | |||||
Goodwill | $ 420 | $ 590 | |||
Two Public Safety Software-Based Solutions | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired | acquisition | 2 | ||||
Aggregate purchase price | $ 50 | ||||
Goodwill | 31 | ||||
Identifiable intangible assets recognized | 22 | ||||
Acquired liabilities | $ 3 | ||||
Guardian Digital Communications Limited (GDCL) | |||||
Business Acquisition [Line Items] | |||||
Aggregate purchase price | $ 1,000 | £ 698,000,000 | |||
Goodwill | 170 | ||||
Consideration transferred, excluding third party debt paid and liabilities assumed | £ | 1 | ||||
Deferred cash payment | £ | £ 64,000,000 | ||||
Net sale from operations of Airwave | $ 61 | ||||
Net earnings from operations of Airwave | $ 3 | ||||
Consideration transfered | $ 1,100 | ||||
Useful life of intangibles | 7 years | 7 years | |||
Discount rate used to calculate net present value | 4.20% | 4.20% | |||
Customer Relationships | Guardian Digital Communications Limited (GDCL) | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets | $ 602 | ||||
Trade Names | Guardian Digital Communications Limited (GDCL) | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets | $ 29 | ||||
Other Intangible Assets | Two Public Safety Software-Based Solutions | |||||
Business Acquisition [Line Items] | |||||
Identifiable intangible assets recognized | 3 | ||||
Technology-Based Intangible Assets | Two Public Safety Software-Based Solutions | |||||
Business Acquisition [Line Items] | |||||
Identifiable intangible assets recognized | 11 | ||||
Customer Relationships | Two Public Safety Software-Based Solutions | |||||
Business Acquisition [Line Items] | |||||
Identifiable intangible assets recognized | $ 8 | ||||
Minimum | Two Public Safety Software-Based Solutions | |||||
Business Acquisition [Line Items] | |||||
Period of amortization for assets acquired in acquisition | 5 years | ||||
Maximum | Two Public Safety Software-Based Solutions | |||||
Business Acquisition [Line Items] | |||||
Period of amortization for assets acquired in acquisition | 10 years |
Intangible Assets and Goodwil72
Intangible Assets and Goodwill (Fair Value of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions | Feb. 19, 2016 | Apr. 02, 2016 | Dec. 31, 2015 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 590 | $ 420 | |
Guardian Digital Communications Limited (GDCL) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Cash | $ 86 | ||
Accounts receivable, net | 55 | ||
Other current assets | 36 | ||
Property, plant and equipment, net | 481 | ||
Deferred income taxes | 79 | ||
Intangible assets | 631 | ||
Accounts payable | (18) | ||
Accrued liabilities | (184) | ||
Other liabilities | (254) | ||
Goodwill | 170 | ||
Total consideration | 1,082 | ||
Net present value of deferred consideration payment to former owners | (82) | ||
Net cash consideration at purchase | $ 1,000 |
Intangible Assets and Goodwil73
Intangible Assets and Goodwill (Pro Forma Financial Information) (Details) - Guardian Digital Communications Limited (GDCL) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Revenues | $ 1,264 | $ 1,364 |
Earnings from continuing operations | $ 41 | $ 100 |
Basic earnings per share (in $ per share) | $ 0.24 | $ 0.46 |
Diluted earnings per share (in $ per share) | $ 0.23 | $ 0.46 |
Intangible Assets and Goodwil74
Intangible Assets and Goodwill (Intangible Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 02, 2016 | Apr. 04, 2015 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 743 | $ 111 | |
Accumulated Amortization | 74 | 62 | |
Intangible Assets And Goodwill | |||
Amortization expense on intangibles | 13 | $ 2 | |
Finite-Lived Intangible Assets, Future Amortization Expense | |||
2,016 | 87 | ||
2,017 | 98 | ||
2,018 | 98 | ||
2,019 | 97 | ||
2,020 | 94 | ||
2,021 | 94 | ||
Completed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 60 | 60 | |
Accumulated Amortization | 33 | 32 | |
Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 8 | 8 | |
Accumulated Amortization | 5 | 5 | |
Customer-related | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 629 | 23 | |
Accumulated Amortization | 21 | 10 | |
Other intangibles | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 46 | 20 | |
Accumulated Amortization | $ 15 | $ 15 |
Intangible Assets And Goodwil75
Intangible Assets And Goodwill (Amortized Intangible Assets, Excluding Goodwill, By Business Segment) (Details) - USD ($) $ in Millions | Apr. 02, 2016 | Dec. 31, 2015 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 743 | $ 111 |
Accumulated Amortization | 74 | 62 |
Products | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 86 | 89 |
Accumulated Amortization | 59 | 60 |
Services | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 657 | 22 |
Accumulated Amortization | $ 15 | $ 2 |
Intangible Assets and Goodwil76
Intangible Assets and Goodwill (Carrying Amount of Goodwill) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2016 | Dec. 31, 2015 | |
Goodwill Activity | ||
Aggregate goodwill | $ 590 | $ 420 |
Accumulated impairment losses | 0 | 0 |
Goodwill, net of impairment losses | 590 | 420 |
Goodwill acquired | 170 | |
Products | ||
Goodwill Activity | ||
Aggregate goodwill | 270 | 270 |
Accumulated impairment losses | 0 | 0 |
Goodwill, net of impairment losses | 270 | 270 |
Goodwill acquired | 0 | |
Services | ||
Goodwill Activity | ||
Aggregate goodwill | 320 | 150 |
Accumulated impairment losses | 0 | 0 |
Goodwill, net of impairment losses | 320 | $ 150 |
Goodwill acquired | $ 170 |