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 Nine Months Ended October 1, October 3, October 1, October 3, Other charges: Intangibles amortization $ 31 $ 2 $ 83 $ 6 Reorganization of business 6 8 28 33 Building impairment — 6 17 6 Non-U.S. pension curtailment gain — — — (32 ) Impairment of corporate aircraft — 26 3 26 Acquisition-related transaction fees — — 13 — $ 37 $ 42 $ 144 $ 39 Other Income (Expense) Interest expense, net, and Other, both included in Other income (expense), consist of the following: Three Months Ended Nine Months Ended October 1, October 3, October 1, October 3, Interest income (expense), net: Interest expense $ (58 ) $ (47 ) $ (169 ) $ (132 ) Interest income 4 4 12 10 $ (54 ) $ (43 ) $ (157 ) $ (122 ) Other: Investment impairments (2 ) — (2 ) (3 ) Foreign currency gain (loss) 7 (29 ) $ 34 $ (23 ) Gain (loss) on derivative instruments (11 ) 25 (41 ) 13 Gains on equity method investments — 2 2 6 Realized foreign currency loss on acquisition — — (10 ) — Other 5 1 5 4 $ (1 ) $ (1 ) $ (12 ) $ (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 October 1, October 3, October 1, October 3, Basic earnings per common share: Earnings $ 192 $ 126 $ 192 $ 115 Weighted average common shares outstanding 166.3 199.2 166.3 199.2 Per share amount $ 1.15 $ 0.63 $ 1.15 $ 0.58 Diluted earnings per common share: Earnings $ 192 $ 126 $ 192 $ 115 Weighted average common shares outstanding 166.3 199.2 166.3 199.2 Add effect of dilutive securities: Share-based awards 2.4 2.1 2.4 2.1 Senior Convertible Notes 0.9 — 0.9 — Diluted weighted average common shares outstanding 169.6 201.3 169.6 201.3 Per share amount $ 1.13 $ 0.63 $ 1.13 $ 0.57 Amounts attributable to Motorola Solutions, Inc. common stockholders Earnings from Continuing Operations, net of tax Net Earnings Nine Months Ended October 1, October 3, October 1, October 3, Basic earnings per common share: Earnings $ 317 $ 363 $ 317 $ 331 Weighted average common shares outstanding 171.0 207.2 171.0 207.2 Per share amount $ 1.85 $ 1.75 $ 1.85 $ 1.60 Diluted earnings per common share: Earnings $ 317 $ 363 $ 317 $ 331 Weighted average common shares outstanding 171.0 207.2 171.0 207.2 Add effect of dilutive securities: Share-based awards 2.5 2.0 2.5 2.0 Senior Convertible Notes 0.5 — 0.5 — Diluted weighted average common shares outstanding 174.0 209.2 174.0 209.2 Per share amount $ 1.82 $ 1.74 $ 1.82 $ 1.58 In the computation of diluted earnings per common share from both continuing operations and on a net earnings basis for the three months ended October 1, 2016 , the assumed exercise of 2.5 million options were excluded because their inclusion would have been antidilutive. For the nine months ended October 1, 2016 , the assumed exercise of 2.9 million options and the assumed vesting of 0.4 million restricted stock units ("RSUs") were excluded because their inclusion would have been antidilutive. For the three months ended October 3, 2015 , the assumed exercise of 3.9 million stock options were excluded because their inclusion would have been antidilutive. For the nine months ended October 3, 2015 , the assumed exercise of 2.6 million options and the assumed vesting of 0.4 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). 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 and nine months ended October 1, 2016 , the dilutive impact of the Senior Convertible Notes was 0.9 million shares and 0.5 million shares, respectively. Balance Sheet Information Cash and Cash Equivalents The Company’s cash and cash equivalents were $1.7 billion at October 1, 2016 and $2.0 billion at December 31, 2015 . Of these amounts, $63 million was restricted at both October 1, 2016 and December 31, 2015 . Accounts Receivable, Net Accounts receivable, net, consists of the following: October 1, December 31, Accounts receivable $ 1,207 $ 1,390 Less allowance for doubtful accounts (43 ) (28 ) $ 1,164 $ 1,362 Inventories, Net Inventories, net, consist of the following: October 1, December 31, Finished goods $ 154 $ 151 Work-in-process and production materials 265 287 419 438 Less inventory reserves (136 ) (142 ) $ 283 $ 296 Other Current Assets Other current assets consist of the following: October 1, December 31, Available-for-sale securities $ 45 $ 438 Costs and earnings in excess of billings 413 374 Tax-related refunds receivable 100 44 Other 112 98 $ 670 $ 954 Property, Plant and Equipment, Net Property, plant and equipment, net, consists of the following: October 1, December 31, Land $ 14 $ 17 Building 293 523 Machinery and equipment 1,920 1,585 2,227 2,125 Less accumulated depreciation (1,447 ) (1,638 ) $ 780 $ 487 Depreciation expense for the three months ended October 1, 2016 and October 3, 2015 was $45 million and $30 million , respectively. Depreciation expense for the nine months ended October 1, 2016 and October 3, 2015 was $137 million and $107 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 nine months ended October 1, 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. The Company acquired property, plant and equipment, including network-related assets, with a fair value of $245 million in the acquisition of GDCL on February 19, 2016. See discussion in Note 14. During the nine months ended October 1, 2016 , the Company sold all remaining parcels of its Schaumburg, IL headquarters campus. A building impairment loss of $17 million has been recognized in Other charges during the nine months ended October 1, 2016 related to the excess carrying value of the long-lived assets in relation to the selling price. During the three months ended October 1, 2016 , Motorola Solutions relocated its global headquarters from Schaumburg, IL to Chicago, IL. The move provides the Company with access to key talent and allows the Company to optimize the Schaumburg campus for current space requirements. Investments Investments consist of the following: October 1, 2016 Cost Unrealized Unrealized Investments Available-for-sale securities: Government, agency, and government-sponsored enterprise obligations $ 50 $ — $ — $ 50 Corporate bonds 5 — — 5 Common stock — 1 — 1 55 1 — 56 Other investments, at cost 217 — — 217 Equity method investments 10 — — 10 $ 282 $ 1 $ — $ 283 Less: current portion of available-for-sale securities 45 $ 238 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 nine months ended October 1, 2016 , the Company realized a loss of $19 million associated with the sale of the treasury securities, of which, $11 million was unrealized as of December 31, 2015. Other Assets Other assets consist of the following: October 1, December 31, Intangible assets, net (Note 14) $ 769 $ 49 Non-current long-term receivables, net 43 47 Defined benefit plan assets 163 128 Other 38 47 $ 1,013 $ 271 Accrued Liabilities Accrued liabilities consist of the following: October 1, December 31, Deferred revenue $ 404 $ 390 Compensation 196 241 Billings in excess of costs and earnings 329 337 Tax liabilities 72 48 Dividend payable 68 71 Trade liabilities 159 135 Other 522 449 $ 1,750 $ 1,671 Other Liabilities Other liabilities consist of the following: October 1, December 31, Defined benefit plans $ 1,486 $ 1,512 Postretirement Health Care Benefit Plan — 49 Deferred revenue 126 113 Unrecognized tax benefits 42 50 Deferred income taxes 119 — Deferred consideration (Note 14) 76 — Other 213 180 $ 2,062 $ 1,904 Stockholders’ Equity Share Repurchase Program: Through actions taken on July 28, 2011, January 30, 2012, July 25, 2012, July 22, 2013, November 3, 2014, and August 3, 2016, the Board of Directors has authorized the Company to repurchase in the aggregate up to $14.0 billion of its outstanding shares of common stock (the “share repurchase program”). The share repurchase program does not have an expiration date. During the nine months ended October 1, 2016 , the Company paid an aggregate of $728 million , including transaction costs, to repurchase approximately 10.5 million shares at an average price of $69.31 per share. As of October 1, 2016 , the Company had used approximately $11.7 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving $2.3 billion of authority available for future repurchases. Payment of Dividends: On November 3, 2016, the Company announced that its Board of Directors approved an increase in the quarterly cash dividend from $0.41 per share to $0.47 per share of common stock. During both the three months ended October 1, 2016 and October 3, 2015 , the Company paid $70 million in cash dividends to holders of its common stock. During the nine months ended October 1, 2016 and October 3, 2015 , the Company paid $213 million and $218 million , respectively, in cash dividends to holders of its common stock. Accumulated Other Comprehensive Loss The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the condensed consolidated statements of operations during the three and nine months ended October 1, 2016 and October 3, 2015 : Three Months Ended Nine Months Ended October 1, October 3, October 1, October 3, Foreign Currency Translation Adjustments: Balance at beginning of period $ (351 ) $ (223 ) $ (266 ) $ (204 ) Other comprehensive loss before reclassification adjustment (47 ) (17 ) (131 ) (35 ) Tax (expense) benefit (2 ) 1 (3 ) — Other comprehensive loss, net of tax (49 ) (16 ) (134 ) (35 ) Balance at end of period $ (400 ) $ (239 ) $ (400 ) $ (239 ) Available-for-Sale Securities: Balance at beginning of period $ — $ 15 $ (3 ) $ 44 Other comprehensive income (loss) before reclassification adjustment 1 — (1 ) (2 ) Tax benefit — — 1 1 Other comprehensive income (loss) before reclassification adjustment, net of tax 1 — — (1 ) Reclassification adjustment into Gains (losses) on sales of investments and businesses, net — (8 ) 6 (54 ) Tax expense (benefit) — 3 (2 ) 21 Reclassification adjustment into Gains (losses) on sales of investments and businesses, net of tax — (5 ) 4 (33 ) Other comprehensive income (loss), net of tax 1 (5 ) 4 (34 ) Balance at end of period $ 1 $ 10 $ 1 $ 10 Defined Benefit Plans: Balance at beginning of period (1,537 ) (1,777 ) $ (1,597 ) $ (1,695 ) Other comprehensive income (loss) before reclassification adjustment — — 53 (53 ) Tax expense — — (16 ) — Other comprehensive income (loss) before reclassification adjustment, net of tax — — 37 (53 ) Reclassification adjustment - Actuarial net losses into Selling, general, and administrative expenses 13 20 40 56 Reclassification adjustment - Prior service benefits into Selling, general, and administrative expenses (7 ) (20 ) (20 ) (52 ) Reclassification adjustment - Non-U.S. pension curtailment gain into Other charges — — — (32 ) Tax expense (benefit) (1 ) — 8 (1 ) Reclassification adjustment into Selling, general, and administrative expenses, net of tax 5 — 28 (29 ) Other comprehensive income (loss), net of tax 5 — 65 (82 ) Balance at end of period $ (1,532 ) $ (1,777 ) $ (1,532 ) $ (1,777 ) Total Accumulated other comprehensive loss $ (1,931 ) $ (2,006 ) $ (1,931 ) $ (2,006 ) |