Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 29, 2018shares | |
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 | Sep. 29, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 163,527,868 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Net sales | $ 1,862 | $ 1,645 | $ 5,089 | $ 4,423 |
Costs of sales | 961 | 851 | 2,697 | 2,369 |
Gross margin | 901 | 794 | 2,392 | 2,054 |
Selling, general and administrative expenses | 323 | 259 | 918 | 760 |
Research and development expenditures | 158 | 141 | 472 | 413 |
Other charges | 126 | 47 | 263 | 100 |
Operating earnings | 294 | 347 | 739 | 781 |
Other income (expense): | ||||
Interest expense, net | (59) | (52) | (163) | (154) |
Gains on sales of investments and businesses, net | 6 | 0 | 16 | 3 |
Other | 29 | (9) | 45 | (20) |
Total other expense | (24) | (61) | (102) | (171) |
Net earnings before income taxes | 270 | 286 | 637 | 610 |
Income tax expense | 22 | 73 | 91 | 188 |
Net earnings | 248 | 213 | 546 | 422 |
Less: Earnings attributable to noncontrolling interests | 1 | 1 | 2 | 2 |
Net earnings attributable to Motorola Solutions, Inc. | $ 247 | $ 212 | $ 544 | $ 420 |
Earnings per common share: | ||||
Basic (in US$ per share) | $ 1.52 | $ 1.30 | $ 3.36 | $ 2.57 |
Diluted (in US$ per share) | $ 1.43 | $ 1.25 | $ 3.17 | $ 2.48 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 162.6 | 162.3 | 162 | 163.2 |
Diluted (in shares) | 172.6 | 169 | 171.6 | 169.3 |
Dividends declared per share (in US$ per share) | $ 0.52 | $ 0.47 | $ 1.56 | $ 1.41 |
Products | ||||
Net sales | $ 1,151 | $ 989 | $ 2,993 | $ 2,540 |
Costs of sales | 516 | 428 | 1,383 | 1,167 |
Services | ||||
Net sales | 711 | 656 | 2,096 | 1,883 |
Costs of sales | $ 445 | $ 423 | $ 1,314 | $ 1,202 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 248 | $ 213 | $ 546 | $ 422 |
Other comprehensive income (loss), net of tax (Note 3): | ||||
Foreign currency translation adjustments | (4) | 46 | (42) | 127 |
Marketable securities | 0 | 1 | (6) | 5 |
Defined benefit plans | 13 | 26 | 39 | 59 |
Total other comprehensive income (loss), net of tax | 9 | 73 | (9) | 191 |
Comprehensive income | 257 | 286 | 537 | 613 |
Less: Earnings attributable to noncontrolling interests | 1 | 1 | 2 | 2 |
Comprehensive income attributable to Motorola Solutions, Inc. common shareholders | $ 256 | $ 285 | $ 535 | $ 611 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 29, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 839 | $ 1,205 |
Restricted cash | 12 | 63 |
Total cash and cash equivalents | 851 | 1,268 |
Accounts receivable, net | 1,179 | 1,523 |
Contract assets | 917 | 0 |
Inventories, net | 367 | 327 |
Other current assets | 350 | 832 |
Total current assets | 3,664 | 3,950 |
Property, plant and equipment, net | 892 | 856 |
Investments | 176 | 247 |
Deferred income taxes | 949 | 1,023 |
Goodwill | 1,541 | 938 |
Intangible assets, net | 1,297 | 861 |
Other assets | 444 | 333 |
Total assets | 8,963 | 8,208 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Current portion of long-term debt | 337 | 52 |
Accounts payable | 456 | 593 |
Contract liabilities | 1,127 | 0 |
Accrued liabilities | 1,168 | 2,286 |
Total current liabilities | 3,088 | 2,931 |
Long-term debt | 5,095 | 4,419 |
Other liabilities | 2,175 | 2,585 |
Stockholders’ Equity | ||
Preferred stock, $100 par value | 0 | 0 |
Common stock, $.01 par value: Authorized shares: 600.0; Issued shares: 9/29/18—164.0; 12/31/17—161.6; Outstanding shares: 9/29/18—163.5; 12/31/17—161.2 | 2 | 2 |
Additional paid-in capital | 370 | 351 |
Retained earnings | 788 | 467 |
Accumulated other comprehensive loss | (2,571) | (2,562) |
Total Motorola Solutions, Inc. stockholders’ equity (deficit) | (1,411) | (1,742) |
Noncontrolling interests | 16 | 15 |
Total stockholders’ equity (deficit) | (1,395) | (1,727) |
Total liabilities and stockholders’ equity | $ 8,963 | $ 8,208 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 29, 2018 | Dec. 31, 2017 |
Stockholders’ Equity | ||
Preferred stock par value (in US$ per share) | $ 100 | $ 100 |
Common stock par value (in US$ per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock issued (in shares) | 164,000,000 | 161,600,000 |
Common stock outstanding (in shares) | 163,500,000 | 161,200,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity - 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 | $ 422 | ||||
Other comprehensive loss | 191 | ||||
Balance at end of period at Sep. 30, 2017 | $ (2,126) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 213 | ||||
Other comprehensive loss | 73 | ||||
Balance at end of period at Sep. 30, 2017 | (2,126) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect of new accounting pronouncement | Accounting Standards Update 2016-16 | $ (31) | ||||
Cumulative effect of new accounting pronouncement | Accounting Standards Update 2014-09 | 127 | ||||
Balance (in shares) at Dec. 31, 2017 | 161.6 | ||||
Balance at beginning of period at Dec. 31, 2017 | (1,727) | $ 353 | (2,562) | 467 | $ 15 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 546 | 544 | 2 | ||
Other comprehensive loss | $ (9) | (9) | |||
Issuance of common stock and stock options exercised (in shares) | 3 | ||||
Issuance of common stock and stock options exercised | $ 139 | ||||
Share repurchase program (in shares) | (0.6) | (0.6) | |||
Share repurchase program | (66) | ||||
Share-based compensation expense | $ 53 | ||||
Dividends declared | (253) | (1) | |||
Repurchase of senior convertible notes | $ (173) | ||||
Balance (in shares) at Sep. 29, 2018 | 164 | ||||
Balance at end of period at Sep. 29, 2018 | $ (1,395) | $ 372 | (2,571) | 788 | 16 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 248 | ||||
Other comprehensive loss | 9 | ||||
Balance (in shares) at Sep. 29, 2018 | 164 | ||||
Balance at end of period at Sep. 29, 2018 | $ (1,395) | $ 372 | $ (2,571) | $ 788 | $ 16 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 29, 2018 | Sep. 30, 2017 | |
Operating | ||
Net earnings attributable to Motorola Solutions, Inc. | $ 544 | $ 420 |
Earnings attributable to noncontrolling interests | 2 | 2 |
Net earnings | 546 | 422 |
Adjustments to reconcile Net earnings to Net cash provided by operating activities: | ||
Depreciation and amortization | 267 | 254 |
Non-cash other charges | 50 | 29 |
Non-U.S. pension settlement loss | 0 | 46 |
Share-based compensation expense | 53 | 49 |
Gains on sales of investments and businesses, net | (16) | (3) |
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | ||
Accounts receivable, contract assets and contract liabilities | 186 | 81 |
Inventories | 61 | (83) |
Other current assets | (137) | (142) |
Accounts payable and accrued liabilities | (170) | (178) |
Other assets and liabilities | (596) | 11 |
Deferred income taxes | 19 | 99 |
Net cash provided by operating activities | 263 | 585 |
Investing | ||
Acquisitions and investments, net | (1,158) | (383) |
Proceeds from sales of investments and businesses, net | 90 | 174 |
Capital expenditures | (128) | (206) |
Net cash used for investing activities | (1,196) | (415) |
Financing | ||
Repayment of debt | (412) | (15) |
Net proceeds from issuance of debt | 1,295 | 0 |
Proceeds from financing through capital leases | 0 | 7 |
Issuance of common stock | 139 | 61 |
Purchases of common stock | (66) | (358) |
Settlement of conversion premium on convertible debt | (169) | 0 |
Payments of dividends | (252) | (230) |
Payments of dividend to non-controlling interest | (1) | (2) |
Net cash provided by (used for) financing activities | 534 | (537) |
Effect of exchange rate changes on cash and cash equivalents | (18) | 54 |
Net decrease in cash and cash equivalents | (417) | (313) |
Cash and cash equivalents, beginning of period | 1,268 | 1,030 |
Cash and cash equivalents, end of period | 851 | 717 |
Cash paid during the period for: | ||
Interest, net | 164 | 146 |
Income and withholding taxes, net of refunds | $ 79 | $ 83 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements as of September 29, 2018 and for the three and nine months ended September 29, 2018 and September 30, 2017 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, 2017 . The results of operations for the three and nine months ended September 29, 2018 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. During the second quarter of 2018, the Company modified its internal reporting structure to better align the way financial information is reported to and analyzed by executive leadership, in part, as a result of recent acquisitions contributing to the growth within the newly aligned Services and Software segment. Previously, the Company had two reporting segments: Products and Services. The changes in reporting structure consist of Systems Integration related revenue and costs moving from the old Services segment into the newly presented Products and Systems Integration segment and Software related revenue and costs moving from the old Products segment into the newly presented Services and Software segment. Recent Developments On March 28, 2018, the Company completed the acquisition of Avigilon Corporation ("Avigilon"), a provider of advanced end-to-end security and surveillance solutions including video analytics, network video management hardware and software, surveillance cameras and access control solutions for a purchase price of $974 million . On March 7, 2018, the Company completed the acquisition of Plant Holdings, Inc. ("Plant"), the parent company of Airbus DS Communications for a purchase price of $237 million . This acquisition expands our software portfolio in the command center with additional solutions for Next Generation 9-1-1. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 on January 1, 2019 and interim periods within that reporting period, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11 that amended the ASU to include an additional (and optional) transition relief. The additional transition relief provides entities the option to adopt the ASU by applying the new ASU at the adoption date and recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restatement of comparative periods. The new ASU must be adopted utilizing the modified retrospective method as of the earliest comparative period presented if the optional adoption method is not selected. The Company will adopt the ASU on January 1, 2019, utilizing the modified retrospective method as of the adoption date. The Company is continuing to assess the impact of the ASU on its condensed consolidated financial statements, including the package of available practical expedients, required disclosures, and changes to internal controls. Based on the preliminary work completed, the Company expects a material impact to its condensed consolidated balance sheet through the recording of right-of-use assets and lease obligations that are not required to be recorded within the condensed consolidated balance sheet under current accounting standards. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires entities to estimate and recognize current expected credit losses rather than delay recognition of credit losses until the loss is probable of occurring. The ASU is effective for the Company on January 1, 2020, and interim periods within that reporting period with early option permitted. The Company is currently evaluating the impact of the ASU on its consolidated financial statements and disclosures. In August 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities," which is intended to simplify the application of hedge accounting and better portray the economic results of risk management strategies in the consolidated financial statements. The ASU expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The ASU is effective for the Company on January 1, 2019 with adoption permitted immediately in any interim or annual period (including the current period). The guidance related to cash flow and net investment hedges existing at the date of adoption should be applied using the modified retrospective method by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The guidance related to presentation and disclosure should be applied prospectively. The Company is currently assessing the impact of this ASU, including transition elections and required elections, on its consolidated financial statements and disclosures. In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) - Changes to the Disclosure Requirements for Defined Benefit Plans,” which modifies the disclosure requirements for the defined benefit pension plans and other postretirement plans. The ASU is effective for the Company on January 1, 2020 with early adoption permitted. The ASU requires a retrospective adoption method. The Company does not believe the ASU will have a material impact on its financial statement disclosures. Recently Adopted Accounting Pronouncements The Company adopted ASU No. 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory” on January 1, 2018 using the modified retrospective method of adoption. The Company recognized $31 million related to the cumulative effect of applying the ASU as an adjustment to its opening retained earnings balance. The comparative information has not been restated and continues to be reported under accounting standards in effect in those periods. This ASU eliminates the prior application of deferring the income tax effect of intra-entity asset transfers, other than inventory, until the transferred asset is sold to a third party or otherwise recovered through use. Under the ASU, the Company will recognize tax expense when intra-entity transfers of assets other than inventory occur. The Company adopted ASU No. 2017-07, “Compensation - Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” on January 1, 2018 using the retrospective method of adoption. The amendments in the ASU require that an employer disaggregate the service cost component from the other components of net periodic cost (benefit) and report that component in the same line item as other compensation costs arising from services rendered by employees during the period. The other components of net periodic cost (benefit) are required to be presented in the statement of operations separately from the service cost component and outside of operating earnings. The Company has restated its comparative period results to reflect the application of the presentation guidance of the ASU. As a result of the ASU, the presentation of net periodic cost (benefit) has been updated to classify all components of the Company’s net periodic benefit, with the exception of the service cost component, within Other in Other income (expense) on the statement of operations. The Company reclassified $18 million and $10 million in the three months ended September 29, 2018 and September 30, 2017 , respectively, and $58 million and $10 million in the nine months ended September 29, 2018 and September 30, 2017 , respectively. The Company adopted ASU No. 2014-09, "Revenue from Contracts with Customers," and all the related amendments (collectively “ASC 606”) on January 1, 2018 using the modified retrospective method. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to its opening retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect in those periods. The Company has retained much of the same accounting treatment used to recognize revenue under ASC 606 as under accounting standards in effect in prior periods. Revenue on a significant portion of its System and Integration services contracts continues to be recognized under percentage of completion accounting, applying a cost-to-cost method. Services contracts continue to be recognized ratably over relevant contract terms as the Company stands ready to perform. Finally, revenue on equipment sales continues to be recognized based on delivery terms as aligned with the transfer of control. Under the new standard, the Company identified distinct promises to transfer goods and services within its contracts. For system contracts that are recognized under percentage of completion accounting, the Company has considered the factors used to determine whether promises made in the contract are distinct and determined that devices and accessories represent distinct goods. Accordingly, adoption of the new standard impacts the Company's system contracts, with the result being revenue recognized earlier as control of devices and accessories transfers to the customer at a point in time rather than over time. For the remaining promised goods and services within the Company's system contracts, it continues to recognize revenue on these contracts using a cost-to-cost method based on the continuous transfer of control to the customer over time. Under the new standard, revenue recognition for software sales is accelerated based on when control of software licenses and related support services are transferred to the customer. Amounts deferred under previous software accounting rules due to lack of vendor-specific objective evidence have been recognized as an adjustment through opening retained earnings. Historically, the Company presented transactions that involved a third-party sales representative on a net basis. After considering the control concept and the remaining three indicators of gross presentation under the new standard, the Company has determined that it is the principal in contracts that involve a third-party sales representative. Thus, under the new standard, the Company presents associated revenues on a gross basis, with the affect being an equal increase to selling, general and administrative expenses for its cost of third-party commissions. Under prior accounting standards, the Company expensed sales commissions and other costs to obtain a contract as incurred. However, under the new standard, the Company capitalizes sales commissions and certain other costs as incremental costs to obtain a contract. Such costs are classified as non-current contract cost assets within Other assets and amortized over a period that approximates the timing of revenue recognition on the underlying contracts. The new standard clarified the definition of a receivable and requires the Company to present its net position in a contract with a customer on the balance sheet. The position is presented as either a receivable, contract asset, or a contract liability. Under the new definition, accounts receivable are unconditional rights to consideration from a customer. Contract assets represent rights to consideration from a customer in exchange for transferred goods and services that are conditional on events other than the passage of time. Contract liabilities represent obligations to transfer goods and services for which the Company has received, or is due, consideration from a customer. The Company reclassified its customer positions to align with the new definitions and presentation guidance. Accordingly, Unbilled accounts receivable and Costs and earnings in excess of billings have been reclassified from Accounts receivable and Other current assets, respectively, and are presented as Contract assets. Accounts receivable which are not due from customers have been reclassified into Other current assets. Deferred revenue, Billings in excess of costs and earnings, and Customer downpayments have been reclassified from Accrued liabilities and are presented as Contract liabilities. Non-current deferred revenue has been reclassified from Deferred revenue to Non-current contract liabilities within Other liabilities. The cumulative effect of the changes made to our consolidated opening balance sheet as of January 1, 2018 due to the modified retrospective method of adoption of ASC 606 is as follows: Balance Sheet (Selected captions) (In millions) December 31, Reclassification of Contract Assets Reclassification of Non-customer receivables Reclassification of Contract Liabilities Impact of Adoption on Open Contracts January 1, (Unaudited) ASSETS Accounts receivable, net $ 1,523 $ (297 ) $ (24 ) $ — $ (4 ) $ 1,198 Contract assets — 846 — — 85 931 Inventories, net 327 — — — 1 328 Other current assets 832 (549 ) 24 — (23 ) 284 Deferred income taxes 1,023 — — — (41 ) 982 Other assets 333 — — — 85 418 LIABILITIES AND STOCKHOLDERS’ EQUITY Contract liabilities $ — $ — $ — $ 1,099 $ (17 ) $ 1,082 Accrued liabilities 2,286 — — (1,099 ) — 1,187 Other liabilities 2,585 — — — (7 ) 2,578 Stockholders’ Equity Retained earnings 467 — — — 127 594 Adoption Impact to Financial Statements The impact of the adoption of ASC 606 to the condensed consolidated financial statements for the three and nine months ended September 29, 2018 is as follows: Statements of Operations (Selected captions) Three Months Ended (In millions) September 29, Adjustments due to ASC 606 September 29, 2018 Balances Under ASC 605 Net sales $ 1,862 $ (19 ) $ 1,843 Gross margin 901 (18 ) 883 Selling, general and administrative expenses 323 (17 ) 306 Operating earnings 294 (1 ) 293 Net earnings before income taxes 270 (1 ) 269 Net earnings attributable to Motorola Solutions Inc. $ 247 $ (1 ) $ 246 Nine Months Ended (In millions) September 29, Adjustments due to ASC 606 September 29, 2018 Balances Under ASC 605 Net sales $ 5,089 $ (58 ) $ 5,031 Gross margin 2,392 (57 ) 2,335 Selling, general and administrative expenses 918 (46 ) 872 Operating earnings 739 (11 ) 728 Net earnings before income taxes 637 (11 ) 626 Net earnings attributable to Motorola Solutions Inc. $ 544 $ (11 ) $ 533 Balance Sheet (Selected captions) (In millions) September 29, Adjustments due to ASC 606 September 29, 2018 Balances Under ASC 605 ASSETS Accounts receivable, net $ 1,179 $ 315 $ 1,494 Contract assets 917 (917 ) — Other current assets 350 540 890 Deferred income taxes 949 41 990 Other assets 444 (95 ) 349 LIABILITIES AND STOCKHOLDERS' EQUITY Contract liabilities $ 1,127 $ (1,127 ) $ — Accrued liabilities 1,168 1,139 2,307 Other liabilities 2,175 10 2,185 Stockholders’ Equity Retained earnings 788 (138 ) 650 There is no impact to the condensed consolidated statement of comprehensive income or the statement of cash flows, with the exception of changes to Net earnings and changes within assets and liabilities as presented on the condensed consolidated balance sheet and disclosed above. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 29, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers In accordance with ASC 606, the Company recognizes revenue to reflect the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for goods or services. The Company records revenue following the five steps below: 1. Identify the contract with customers: A contract is an agreement between two or more parties that creates enforceable rights and obligations and specifies that enforceability is a matter of law. Contracts shall be accounted for when: (i) the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations, (ii) the Company can identify each party’s rights regarding the goods or services to be transferred, (iii) the Company can identify the payment terms for the goods or services to be transferred, (iv) the contract has commercial substance (that is, the risk, timing, or amount of the Company’s future cash flow is expected to change as a result of the contract), and (v) it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. It is the Company’s customary business practice to obtain a signed legal document as evidence of an arrangement. 2. Identify performance obligations in contracts: The goods or services promised in a contract must be evaluated at inception to identify as a performance obligation each promise to transfer to the customer either: (i) a distinct good or service, or (ii) a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. 3. Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties. In determining the transaction price, the Company considers the following components: (i) variable consideration, (ii) significant financing, (iii) noncash consideration, and (iv) consideration payable to a customer. 4. Allocate the transaction price: For a contract that has more than one distinct performance obligation, the Company must allocate the transaction price to each distinct performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying that specific performance obligation. 5. Recognize revenue when or as the entity satisfies a performance obligation: The Company recognizes revenue when, or as, it satisfies a performance obligation by transferring control of a promised good or service to a customer. Disaggregation of Revenue The following table summarizes the disaggregation of our revenue by segment, geography, major product and service type and customer type for the three and nine months ended September 29, 2018 , consistent with the information reviewed by our chief operating decision maker for evaluating the financial performance of operating segments: Three Months Ended Nine Months Ended (in millions) Products and Systems Integration Services and Software Products and Systems Integration Services and Software Regions Americas $ 957 $ 343 $ 2,533 $ 969 EMEA 199 189 543 565 Asia Pacific 132 42 353 126 Total $ 1,288 $ 574 $ 3,429 $ 1,660 Major Products and Services Devices $ 828 $ — $ 2,184 $ — Systems and Systems Integration 460 — 1,245 — Services — 455 — 1,357 Software — 119 — 303 Total $ 1,288 $ 574 $ 3,429 $ 1,660 Customer Type Direct $ 811 $ 543 $ 2,168 $ 1,586 Indirect 477 31 1,261 74 Total $ 1,288 $ 574 $ 3,429 $ 1,660 Products and Systems Integration: The Products and Systems Integration segment is comprised of Systems, Devices and Systems Integration. Direct customers of the Products and Systems Integration segment are typically government, public safety and first-responder agencies, procuring at state, local, and federal levels as well as large commercial customers with secure mission-critical needs. Indirect customers are defined as customers purchasing professional commercial radios and Avigilon video solutions, which are primarily sold through the Company's reseller partners to an end-customer base, composed of various industries where private communications networks and video solutions are used to secure operations and enable a mobile workforce. Contracts with the Company's customers are typically fixed fee, with consideration measured net of associated sales taxes, and, as it relates to our direct customers, funded through government appropriations. On the Company's Products and Systems Integration sales, it records consideration from shipping and handling on a gross basis within Net sales. Devices: Devices includes two-way portable and vehicle-mounted radios, accessories, software features, and upgrades. Devices also includes video surveillance cameras sold by Avigilon. Devices are considered capable of being distinct and distinct within the context of our contracts. Revenue is recognized upon the transfer of control of the devices to the customer at a point in time, typically consistent with delivery under the applicable shipping terms. Devices are sold by both the direct sales force and through reseller partners. Revenue is generally recognized upon transfer of devices to reseller partners, rather than the end-customer, except for limited consignment arrangements. Provisions for returns and reseller discounts are made on a portfolio basis using historical data. Systems and Systems Integration: Systems and Systems Integration include customized end-to-end radio network, video solutions and implementation, optimization, and integration of networks, devices, software, and applications. Radio network includes the aggregation of promises to the customer to provide the radio network core and central processing software, base stations, consoles, and repeaters. These individual promises are not distinct in the context of the contract, as the Company provides a significant service of integrating and customizing the goods and services promised. The radio network represents distinct performance obligations for which revenue is recognized over time, as the Company creates an asset with no alternative use and has an enforceable right to payment for work performed. The Company's revenue recognition over time is based on an input measure of costs incurred, which depicts the transfer of control to its customers under its contracts. Systems and Systems Integration revenue is recognized over an average duration of approximately one to two years . Systems also include Avigilon end-to-end security and surveillance solutions including: video analytics, network video management hardware and software, and access control solutions, which are capable of being distinct and distinct in the context of the contract. Avigilon security and surveillance video solutions are traditionally sold through reseller partners, with contracts negotiated under fixed pricing. Provisions for returns are determined on a portfolio basis using historical data. Revenue is recognized upon the transfer of control of the end-to-end video solution to the reseller partners, typically upon shipment. Services and Software: The Services and Software segment provides a full set of offerings for government, public safety and commercial communication networks. Direct customers of the Services and Software segment are typically government, public safety and first-responder agencies and municipalities. Indirect customers are commercial customers who distribute broadband push-to-talk services to a final end customer base. Contracts with our customers are typically fixed fee, with consideration measured net of associated sales taxes, and, as it relates to our direct customers, funded through government appropriations. Services: Services includes a continuum of service offerings beginning with repair, technical support and maintenance. More advanced offerings include: monitoring, software updates and cybersecurity services. Managed service offerings range from partial to full operation of customer or Motorola Solutions owned networks. Services are provided across all radio network technologies. Services are both distinct and capable of being distinct in the context of the contract, representing a series of recurring services that the Company stands ready to perform over the contract term. Since services contracts typically allow for customers to terminate for convenience or for non-appropriations of fiscal funding, the contract term is generally considered to be limited to a monthly or annual basis, subject to customer renewal. While contracts with customers are typically fixed fee, certain managed services contracts may be subject to variable consideration related to the achievement of service level agreement performance measurements. The Company has not historically paid significant penalties under service level agreements, and accordingly, it does not constrain its contract price. Certain contracts may also contain variable consideration driven by number of users. Revenue is typically recognized on services over time as a series of services performed over the contract term on a straight-line basis. Software: Software offerings include public safety and enterprise command solutions, unified communications applications, and video software solutions delivered either “as a service” or on-premise. Solutions delivered as a service consist of a range of promises including hosted software, technical support and the right to unspecified future software enhancements. Software is not distinct from the hosting service since the customer does not have the right to take possession of the software at any time during the term of the arrangement. The hosted software, technical support, and right to unspecified future software enhancements each represent a series of distinct services that are delivered concurrently using the same over time method. As such, the promises are accounted for as a single performance obligation with revenue recognized on a straight-line basis. On-premise offerings consist of multiple promises primarily including software licenses and post-contract customer support. The promises are each distinct and distinct within the context of the contract as the customer benefits from each promise individually without any significant integration or interrelationship between the promises. On-premise software revenue is recognized at the point in time when the customer can benefit from the software which generally aligns with the beginning of the license period. Revenue for post-contract customer support is recognized over time as the customer simultaneously receives and consumes the services on a straight-line basis. Significant Judgments The Company enters into arrangements which consist of multiple promises to our customers. The Company evaluates whether the promised goods and services are distinct or a series of distinct goods or services. Where contracts contain multiple performance obligations, the Company generally allocates the total estimated consideration to each performance obligation based on applying an estimated selling price (“ESP”) as our best estimate of standalone selling price. The Company determines ESP by: (i) collecting all reasonably available data points including sales, cost and margin analysis of the product or services, and other inputs based on its normal pricing and discounting practices, (ii) making any reasonably required adjustments to the data based on market and Company-specific factors, and (iii) stratifying the data points, when appropriate, based on major product or service, type of customer, geographic market, and sales volume. The Company accounts for certain system contracts on an over time basis, electing an input method of estimated costs as a measure of performance completed. The selection of the measurement of progress using estimated costs was based on a thorough consideration of alternatives of various output and input measures, including contract milestones and labor hours. However, the Company has determined that other input and output measures are not an appropriate measure of progress as they do not accurately align with the transfer of control on its customized product solutions. The selection of costs incurred as a measure of progress aligns the transfer of control to the overall production of the customized system . For system contracts accounted for over time using estimated costs as a measure of performance completed, the Company relies on estimates around the total estimated costs to complete the contract (“Estimated Costs at Completion”). Total Estimated Costs at Completion include direct labor, material and subcontracting costs. Due to the nature of the efforts required to be performed to meet the underlying performance obligation, determining Estimated Costs at Completion may be complex and subject to many variables. We have a standard and disciplined quarterly process in which management reviews the progress and performance of open contracts in order to determine the best estimate of Estimated Costs at Completion. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion, the project schedule, identified risks and opportunities, and the related changes in estimates of costs. The risks and opportunities include management’s judgment about the ability and cost to achieve the project schedule, technical requirements, and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of work to be performed, the availability and cost of materials, and performance by subcontractors, among other variables. Based on this analysis, any quarterly adjustment to net sales, cost of sales, and the related impact to operating income are recorded as necessary in the period they become known. When estimates of total costs to be incurred on a contract exceed estimates of total revenue to be earned, a provision for the entire loss on the contract is recorded in the period in which the loss is determined. Remaining Performance Obligations Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations that are unsatisfied, or partially unsatisfied, as of the end of a period. The transaction price associated with remaining performance obligations which are not yet satisfied as of September 29, 2018 is $6.1 billion . A total of $3.3 billion is from Products and Systems Integration performance obligations that are not yet satisfied, of which $1.9 billion is expected to be recognized in the next 12 months . The remaining amounts will generally be satisfied over time as systems are implemented. A total of $2.8 billion is from Services and Software performance obligations that are not yet satisfied as of September 29, 2018 . The determination of Services and Software performance obligations that are not satisfied takes into account a contract term that may be limited by the customer’s ability to terminate for convenience. Where termination for convenience exists in the Company's Services contracts, its disclosure of the remaining performance obligations that are unsatisfied assumes the contract term is limited until renewal. The Company expects to recognize $1.2 billion from unsatisfied Services and Software performance obligations over the next 12 months , with the remaining performance obligations to be recognized over time as services are performed and software is implemented. Contract Balances (in millions) September 29, 2018 January 1, 2018 Receivables $ 1,179 $ 1,198 Contract assets 917 931 Contract liabilities 1,127 1,082 Non-current contract liabilities 159 162 Contract assets consist of amounts formerly classified as Costs and earnings in excess of billings and Unbilled accounts receivable where the Company does not yet have an unconditional right to bill. Contract liabilities consist of amounts formerly classified Billings in excess of costs and earnings recognized, Customer downpayments and Deferred revenue. Payment terms on system contracts are typically tied to implementation milestones associated with progress on contracts, while revenue recognition is over time based on a cost-to-cost method of measuring performance. The Company may recognize a contract asset or contract liability, depending on whether revenue has been recognized in excess of billings or billings in excess of revenue. Services contracts are typically billed in advance, generating Contract liabilities until the Company has performed the services. The Company does not record a financing component to contracts when it expects, at contract inception, that the period between the transfer of a promised good or service and related payment terms are less than a year. Revenue recognized during the three months ended September 29, 2018 which was previously included in Contract liabilities as of July 1, 2018 is $327 million . Revenue recognized during the nine months ended September 29, 2018 which was previously included in Contract liabilities as of January 1, 2018 is $777 million . Revenue of $7 million was reversed during the three months ended September 29, 2018 and $4 million of revenue was reversed during the nine months ended September 29, 2018 related to performance obligations satisfied, or partially satisfied, in previous periods, primarily driven by changes in the estimates of progress on system contracts. There have been no material impairment losses recognized on contract assets during the nine months ended September 29, 2018 . Contract Cost Balances (in millions) September 29, 2018 January 1, 2018 Current contract cost assets $ 57 $ 62 Non-current contract cost assets 95 85 Contract cost assets represent incremental costs to obtain a contract, primarily related to the Company's sales incentive plans, and certain costs to fulfill contracts. Contract cost assets are amortized into expense over a period that follows the passage of control to the customer over time. Incremental costs to obtain a contract with the Company's sales incentive plans are accounted for under a portfolio approach, with amortization ranging from one to four years to approximate the recognition of revenues over time. Where incremental costs to obtain a contract will be recognized in one year or less, the Company applies a practical expedient around expensing amounts as incurred. Amortization of contract cost assets was $11 million and $34 million for the three and nine months ended September 29, 2018 , respectively. |
Other Financial Data
Other Financial Data | 9 Months Ended |
Sep. 29, 2018 | |
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 Nine Months Ended September 29, September 30, September 29, September 30, Other charges: Intangibles amortization (Note 14) $ 46 $ 39 $ 140 $ 111 Reorganization of business (Note 13) 21 6 46 22 Environmental reserve expense 57 — 57 — Building impairment — — — 8 Loss (Gain) on legal settlements 2 — 3 (2 ) Gain on recovery of financial receivables — — — (42 ) Asset impairment — 2 — 2 Acquisition-related transaction fees — — 17 1 $ 126 $ 47 $ 263 $ 100 During the third quarter of 2018, the Company revised the estimate of a liability related to ongoing remediation efforts of environmental media such as groundwater, soil, and soil vapor, as well as related legal fees for a designated Superfund site under the Comprehensive Environmental Response, Compensation and Liability Act (commonly known as the “Superfund Act”) incurred by a legacy business. It is the Company’s policy to re-evaluate the reserve when certain events become known that will impact the future cash payments. During the third quarter of 2018, the Company became aware of additional remediation requirements for the Superfund site. As such, the Company recorded a charge of $57 million during the third quarter of 2018 which was primarily due to: (i) changes in the expected timeline of the remediation activities to 30 years and (ii) additional costs for further remediation efforts, increasing the reserve to $107 million . Given the timing and amount of the future cash payments are fixed or reliably determinable, the Company discounted the cash flows used in estimating this accrual using a risk-free treasury rate. The current portion of the estimated environmental liability is $4 million and is included in the “Accrued liabilities” statement line and the non-current portion is included in the “Other liabilities” statement line within the Company's Condensed Consolidated Balance Sheet. During the nine months ending September 29, 2018 , the Company recognized $17 million of acquisition-related transaction fees for the Avigilon and Plant acquisitions. During the nine months ended September 30, 2017 , the Company recognized $8 million of building impairments related to the anticipated sale of its Basingstoke, U.K. building. During the nine months ended September 30, 2017 , the Company recognized a net gain of $42 million related to the recovery, through legal procedures to seize and liquidate assets, of financial receivables owed to the Company by a former customer of its legacy Networks business. Other Income (Expense) Interest expense, net, and Other, both included in Other income (expense), consist of the following: Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Interest income (expense), net: Interest expense $ (62 ) $ (55 ) $ (178 ) $ (164 ) Interest income 3 3 15 10 $ (59 ) $ (52 ) $ (163 ) $ (154 ) Other: Net periodic pension and postretirement benefit (Note 7) $ 18 $ 11 $ 58 $ 36 Non-U.S. pension settlement loss (Note 7) — (21 ) — (46 ) Gain from the extinguishment of convertible debt (Note 4) 6 — 6 — Foreign currency loss (14 ) (7 ) (14 ) (29 ) Gain (loss) on derivative instruments 8 3 (15 ) 14 Gains on equity method investments 1 1 2 1 Fair value adjustments to equity investments 7 — 7 — Other 3 4 1 4 $ 29 $ (9 ) $ 45 $ (20 ) During the three and nine months ended September 29, 2018 , the Company recognized a foreign currency loss of $14 million , primarily driven by the Brazilian real, the Euro, the Australian dollar and the Argentinian peso. During the three and nine months ended September 29, 2018 , the Company recognized a gain of $8 million and a loss of $15 million , respectively, on derivative instruments put in place to minimize the foreign exchange risk related to currency fluctuations. The loss on derivative instruments during the nine months ended September 29, 2018 , includes a loss of $14 million on foreign currency derivatives put in place to minimize the exposure to the Canadian dollar related to the purchase of Avigilon. During the three and nine months ended September 30, 2017 , the Company recognized foreign currency losses of $7 million and $29 million , respectively, primarily driven by British Pound, partially offset by gains of $3 million and $14 million , respectively, on derivative instruments put in place to minimize the foreign exchange risk related to currency fluctuations. 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 Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Basic earnings per common share: Earnings $ 247 $ 212 $ 544 $ 420 Weighted average common shares outstanding 162.6 162.3 162.0 163.2 Per share amount $ 1.52 $ 1.30 $ 3.36 $ 2.57 Diluted earnings per common share: Earnings $ 247 $ 212 $ 544 $ 420 Weighted average common shares outstanding 162.6 162.3 162.0 163.2 Add effect of dilutive securities: Share-based awards 4.6 3.4 4.2 3.3 Senior Convertible Notes 5.4 3.3 5.4 2.8 Diluted weighted average common shares outstanding 172.6 169.0 171.6 169.3 Per share amount $ 1.43 $ 1.25 $ 3.17 $ 2.48 In the computation of diluted earnings per common share for the three months ended September 29, 2018 , the assumed exercise of 0.2 million options were excluded because their inclusion would have been antidilutive. For the nine months ended September 29, 2018 , the assumed exercise of 3.2 million options, including 0.8 million subject to market-based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the three months ended September 30, 2017 , the assumed exercise of 2.0 million options, including 1.7 million subject to market-based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the nine months ended September 30, 2017 , the assumed exercise of 2.3 million options, including 1.9 million subject to market-based contingent option agreements, 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 became fully convertible as of August 25, 2017. On September 5, 2018, the Company agreed with Silver Lake Partners to re-purchase $200 million principal of the convertible notes for aggregate consideration of $369 million in cash, inclusive of the conversion premium. During the third quarter of 2018, the Company paid $169 million , with the remaining $200 million paid on October 15, 2018. In the event of an additional conversion, the Company intends to settle the principal amount of the Senior Convertible Notes in cash. Since the Company’s intention is to settle the par value of the Senior Convertible Notes in cash upon conversion, only the number of shares that would be issuable (under the treasury stock method of accounting for share dilution) are included in our computation of diluted earnings per share. The conversion price is adjusted for dividends declared through the date of settlement. Diluted earnings per share has been calculated based upon the amount by which the average stock price exceeds the conversion price. Balance Sheet Information Accounts Receivable, Net Accounts receivable, net, consists of the following: September 29, December 31, Accounts receivable $ 1,227 $ 1,568 Less allowance for doubtful accounts (48 ) (45 ) $ 1,179 $ 1,523 During the nine months ended September 29, 2018 , $297 million of Unbilled accounts receivable were reclassified to Contract assets and $24 million of non-customer miscellaneous receivables were reclassified to Other current assets as a result of the adoption of ASC 606. Inventories, Net Inventories, net, consist of the following: September 29, December 31, Finished goods $ 190 $ 178 Work-in-process and production materials 313 282 503 460 Less inventory reserves (136 ) (133 ) $ 367 $ 327 During the nine months ended September 29, 2018 , the increase in Inventories, net was primarily driven by the acquisition of Avigilon. Other Current Assets Other current assets consist of the following: September 29, December 31, Costs and earnings in excess of billings (Note 1) $ — $ 549 Current contract cost assets (Note 2) 57 62 Tax-related refunds receivable 119 90 Other 174 131 $ 350 $ 832 Property, Plant and Equipment, Net Property, plant and equipment, net, consists of the following: September 29, December 31, Land $ 11 $ 11 Building 355 316 Machinery and equipment 2,224 2,122 2,590 2,449 Less accumulated depreciation (1,698 ) (1,593 ) $ 892 $ 856 Depreciation expense for the three months ended September 29, 2018 and September 30, 2017 was $43 million and $49 million , respectively. Depreciation expense for the nine months ended September 29, 2018 and September 30, 2017 was $127 million and $142 million , respectively. Investments Investments consist of the following: September 29, 2018 December 31, 2017 Corporate bonds $ 2 $ 2 Common stock 17 13 Strategic investments, at cost 60 78 Company-owned life insurance policies 83 141 Equity method investments 14 13 $ 176 $ 247 Strategic investments include investments in non-public technology-driven startup companies. Strategic investments do not have a readily determinable fair value and are recorded at cost, less any impairment, and adjusted for changes resulting from observable, orderly transactions for identical or similar securities. The Company did not recognize any significant adjustments to the recorded cost basis during the nine months ended September 29, 2018. The Company’s common stock portfolio reflects an investment in the communications services sector and is valued utilizing active market prices for similar instruments. During the three and nine months ended September 29, 2018, the Company recognized $7 million in Other income (expense) related to an increase in the fair value of the investments. Company-owned life insurance policies were recorded at their cash surrender value. During the nine months ended September 29, 2018 , the Company withdrew $60 million of excess cash from its company-sponsored life insurance investments. During the three months ended September 29, 2018 , Gains on the sale of investments and businesses were $6 million . During the nine months ended September 29, 2018 , Gains on the sale of investments and businesses were $16 million , compared to $3 million during the nine months ended September 30, 2017 . Other Assets Other assets consist of the following: September 29, December 31, Defined benefit plan assets $ 182 $ 133 Tax receivable 101 101 Non-current contract cost assets (Note 2) 95 — Other 66 99 $ 444 $ 333 Accrued Liabilities Accrued liabilities consist of the following: September 29, December 31, Deferred revenue (Note 1) $ — $ 613 Compensation 248 273 Billings in excess of costs and earnings (Note 1) — 428 Tax liabilities 127 107 Deferred consideration on Airwave acquisition 84 83 Dividend payable 85 84 Trade liabilities 165 151 Other 459 547 $ 1,168 $ 2,286 Deferred consideration in conjunction with the acquisition of Airwave will be paid on November 15, 2018. Other Liabilities Other liabilities consist of the following: September 29, December 31, Defined benefit plans $ 1,446 $ 2,019 Non-current contract liabilities (Note 2) 159 — Deferred revenue (Note 1) — 169 Unrecognized tax benefits 51 54 Deferred income taxes 234 115 Other 285 228 $ 2,175 $ 2,585 The Company made a $500 million contribution to our U.S. Pension Plans during the nine months ended September 29, 2018 . During the nine months ended September 29, 2018 , the deferred income taxes increase was primarily driven by the intangible assets related to acquisition of Avigilon. Stockholders’ Equity Share Repurchase Program: Through a series of actions, 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 September 29, 2018 , the Company paid an aggregate of $66 million , including transaction costs, to repurchase approximately 0.6 million shares at an average price of $101.54 per share. As of September 29, 2018 , the Company had used approximately $12.4 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving $1.6 billion of authority available for future repurchases. Payment of Dividends: During the three months ended September 29, 2018 and September 30, 2017 , the Company paid $84 million and $76 million , respectively, in cash dividends to holders of its common stock. During the nine months ended September 29, 2018 and September 30, 2017 , the Company paid $252 million and $230 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 September 29, 2018 and September 30, 2017 : Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Foreign Currency Translation Adjustments: Balance at beginning of period $ (391 ) $ (413 ) $ (353 ) $ (494 ) Other comprehensive income (loss) before reclassification adjustment (3 ) 49 (33 ) 133 Tax benefit (1 ) (3 ) (9 ) (6 ) Other comprehensive income (loss), net of tax (4 ) 46 (42 ) 127 Balance at end of period $ (395 ) $ (367 ) $ (395 ) $ (367 ) Available-for-Sale Securities: Balance at beginning of period $ — $ 4 $ 6 $ — Other comprehensive income before reclassification adjustment — 1 — 8 Tax benefit — — — (3 ) Other comprehensive income before reclassification adjustment, net of tax — 1 — 5 Reclassification adjustment into Gains on sales of investments and businesses, net — — (8 ) — Tax expense — — 2 — Reclassification adjustment into Gains (losses) on sales of investments and businesses, net of tax — — (6 ) — Other comprehensive income (loss), net of tax — 1 (6 ) 5 Balance at end of period $ — $ 5 $ — $ 5 Defined Benefit Plans: Balance at beginning of period $ (2,189 ) $ (1,790 ) $ (2,215 ) $ (1,823 ) Other comprehensive loss before reclassification adjustment, net of tax — (4 ) — (15 ) Reclassification adjustment - Actuarial net losses into Other income (expense) 20 17 57 49 Reclassification adjustment - Prior service benefits into Other income (expense) (4 ) (4 ) (11 ) (12 ) Reclassification adjustment - Non-U.S. pension settlement loss into Other income (expense) — 21 — 46 Tax benefit (3 ) (4 ) (7 ) (9 ) Reclassification adjustment into Net earnings, net of tax 13 30 39 74 Other comprehensive income, net of tax 13 26 39 59 Balance at end of period $ (2,176 ) $ (1,764 ) $ (2,176 ) $ (1,764 ) Total Accumulated other comprehensive loss $ (2,571 ) $ (2,126 ) $ (2,571 ) $ (2,126 ) |
Debt and Credit Facilities
Debt and Credit Facilities | 9 Months Ended |
Sep. 29, 2018 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | Debt and Credit Facilities As of September 29, 2018 , the Company had a $2.2 billion syndicated, unsecured revolving credit facility scheduled to mature in April 2022 (the "2017 Motorola Solutions Credit Agreement"). As of March 31, 2018, the Company borrowed $400 million under the facility to complete the Avigilon acquisition. As of September 29, 2018 , the outstanding loan amount under the facility was $100 million , with $200 million paid during the third quarter. Subsequent to the quarter, the Company paid the remaining $100 million . The 2017 Motorola Solutions Credit Agreement includes a $500 million letter of credit sub-limit with $450 million of fronting commitments. Borrowings under the facility bear interest at the prime rate plus the applicable margin, or at a spread above the London Interbank Offered Rate ("LIBOR"), at the Company's option. The weighted average borrowing rate on outstanding amounts for the three and nine months ended September 29, 2018 was 3.58% . An annual facility fee is payable on the undrawn amount of the credit line. The interest rate and facility fee are subject to adjustment if the Company's credit rating changes. The Company must comply with certain customary covenants including a maximum leverage ratio, as defined in the 2017 Motorola Solutions Credit Agreement. The Company was in compliance with its financial covenants as of September 29, 2018 . Also in conjunction with the Avigilon acquisition in the first quarter of 2018, the Company entered into a term loan for $400 million with a maturity date of March 26, 2021 (the “Term Loan”). Interest on the Term Loan is variable, indexed to LIBOR, and paid monthly. The weighted average borrowing rates for amounts outstanding during the three and nine months ended September 29, 2018 were 3.33% and 3.43% , respectively. No additional borrowings are permitted and amounts borrowed and repaid or prepaid may not be re-borrowed. In February of 2018, the Company issued $500 million of 4.60% Senior notes due 2028. The Company recognized net proceeds of $497 million after debt issuance costs and debt discounts. These proceeds were then used to make a $500 million contribution to the Company's U.S. pension plan. On August 25, 2015, the Company entered into an agreement with Silver Lake Partners to issue $1.0 billion of 2.00% Senior Convertible Notes which mature in September 2020. The notes became fully convertible as of August 25, 2017. The notes are convertible based on a conversion rate of 14.8252 , as may be adjusted for dividends declared, per $1,000 principal amount (which is currently equal to a conversion price of $67.45 per share). The exercise price adjusts automatically for dividends. On September 5, 2018, the Company agreed with Silver Lake Partners to repurchase $200 million in principal amount of the Senior Convertible Notes for aggregate consideration of $369 million in cash, inclusive of the conversion premium. As of September 29, 2018, the Company paid $169 million of cash to Silver Lake Partners and recorded a gain of $6 million from the extinguishment of the convertible debt. The principal amount of $200 million was reclassified to short term debt. The value by which the Senior Convertible Notes exceeded their principal amount if converted as of September 29, 2018 was $712 million . In the event of an additional conversion, the Company intends to settle the principal amount of the Senior Convertible Notes in cash. On September 28, 2018, the Company issued an additional $200 million on the outstanding 4.60% Senior notes due 2028 bringing the outstanding total to $700 million . The Company settled the issuance on October 5, 2018 and recognized net proceeds of $196 million , subsequent to quarter end, which was then used to pay the $200 million principal due to Silver Lake Partners on October 15, 2018. |
Risk Management
Risk Management | 9 Months Ended |
Sep. 29, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management | Risk Management Foreign Currency Risk As of September 29, 2018 , the Company had outstanding foreign exchange contracts with notional amounts totaling $782 million , compared to $507 million outstanding at December 31, 2017 . 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 September 29, 2018 , and the corresponding positions as of December 31, 2017 : Notional Amount Net Buy (Sell) by Currency September 29, December 31, British Pound $ 221 $ 72 Euro 215 149 Australian Dollar (109 ) (64 ) Chinese Renminbi (75 ) (73 ) Brazilian Real (46 ) (45 ) 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 September 29, 2018 , all of the counterparties have investment grade credit ratings. As of September 29, 2018 , the Company had $6 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 September 29, 2018 and December 31, 2017 : Fair Values of Derivative Instruments Assets Liabilities September 29, 2018 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives not designated as hedging instruments: Foreign exchange contracts $ 6 Other current assets $ 1 Accrued liabilities Fair Values of Derivative Instruments Assets Liabilities December 31, 2017 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives designated as hedging instruments: Foreign exchange contracts $ — Other assets $ 3 Other liabilities Derivatives not designated as hedging instruments: Foreign exchange contracts $ 5 Other current assets $ 2 Accrued liabilities Total derivatives $ 5 $ 5 The following table summarizes the effect of derivatives designated as hedging instruments on the Company's condensed consolidated financial statements for the three and nine months ended September 29, 2018 and September 30, 2017 : Three Months Ended Nine Months Ended Balance Sheet Location Loss on Derivative Instruments September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Foreign exchange contracts $ (1 ) $ (1 ) $ — $ (3 ) Other comprehensive income (loss) The following table summarizes the effect of derivatives not designated as hedging instruments on the Company's condensed consolidated financial statements for the three and nine months ended September 29, 2018 and September 30, 2017 : Three Months Ended Nine Months Ended Statements of Operations Location Gain (loss) on Derivative Instruments September 29, September 30, September 29, September 30, Interest agreements $ — $ (1 ) $ — $ (1 ) Other income (expense) Foreign exchange contracts 8 4 (15 ) 15 Other income (expense) Total derivatives $ 8 $ 3 $ (15 ) $ 14 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 29, 2018 | |
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 Nine Months Ended September 29, September 30, September 29, September 30, Net earnings before income taxes $ 270 $ 286 $ 637 $ 610 Income tax expense 22 73 91 188 Effective tax rate 8 % 26 % 14 % 31 % The Company recorded $22 million of net tax expense during the three months ended September 29, 2018 , resulting in an effective tax rate of 8% , compared to $73 million of net tax expense during the three months ended September 30, 2017 , resulting in an effective tax rate of 26% . The effective tax rate for the three months ended September 29, 2018 of 8% is lower than the effective tax rate for the three months ended September 30, 2017 of 26% , primarily due to the following items: (i) corporate income tax rate decrease from 35% to 21% as a result of the U.S. Tax Cuts and Jobs Act (the “Tax Act”) enacted December 22, 2017; (ii) a tax benefit due to the recognition of excess tax benefits on share-based compensation; and (iii) a tax benefit related to the recording of U.S. federal return-to-provision adjustments. The effective tax rate in the third quarter of 2018 was lower than the U.S. statutory tax rate of 21% primarily driven by a tax benefit due to the recognition of tax benefits on share-based compensation and a tax benefit related to the recording of U.S. federal return-to-provision adjustments. The effective tax rate in the third quarter of 2017 was lower than the U.S. statutory tax rate of 35% primarily driven by a tax benefit due to the recognition of a U.S. capital loss. The Company recorded $91 million of net tax expense during the nine months ended September 29, 2018 , resulting in an effective tax rate of 14% , compared to $188 million of net tax expense during the nine months ended September 30, 2017 , resulting in an effective tax rate of 31% . The effective tax rate for the nine months ended September 29, 2018 of 14% is lower than the effective tax rate for the nine months ended September 30, 2017 of 31% , primarily due to the following items: (i) corporate income tax rate decrease from 35% to 21% as a result of the Tax Act; (ii) a tax benefit due to the recognition of excess tax benefits on share-based compensation; and (iii) a tax benefit related to the recording of U.S. federal return-to-provision adjustments. The effective tax rate for nine months ended September 29, 2018 was lower than the U.S. statutory tax rate of 21% primarily due to: (i) the recognition of excess tax benefits on share-based compensation, (ii) a tax benefit due to a favorable settlement of a state audit, and (iii) a tax benefit related to the recording of U.S. federal return-to-provision adjustments. The effective tax rate for the nine months ended September 30, 2017 was lower than the U.S. statutory tax rate of 35% primarily due to a tax benefit due to the recognition of a U.S. capital loss. Under the guidance in the U.S. Securities and Exchange Commission's Staff Accounting Bulletin No. 118 ("SAB 118"), the Company recorded provisional amounts for the impact of the Tax Act as of December 31, 2017, representing $874 million of incremental tax expense. Under the transitional provisions of SAB 118, the Company has a one-year measurement period to complete the accounting for the initial tax effects of the Tax Act. The Company is continuing to analyze the impact of the recently issued IRS Notices related to the Tax Act and will record its final adjustments to the provisional amounts during the last three months of 2018. For the nine months ended September 29, 2018 , the Company has recorded the following adjustments to the previously recorded provisional tax amounts: December 31, Adjustment September 29, Financial Statement Location Valuation allowance on foreign tax credit carryforward $ 471 $ (9 ) $ 462 Deferred tax expense Measurement of U.S. deferred tax balances at 21% 366 (11 ) 355 Deferred tax expense Transition tax on repatriation of foreign earnings 16 2 18 Current tax expense Uncertain tax positions on foreign operations 21 — 21 Current tax expense Disallowed deduction of covered employees' incentive plans — 4 4 Deferred tax expense $ 874 $ (14 ) $ 860 |
Retirement and Other Employee B
Retirement and Other Employee Benefits | 9 Months Ended |
Sep. 29, 2018 | |
Retirement Benefits [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 September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Service cost $ — $ — $ 1 $ 1 $ — $ — Interest cost 47 46 9 10 1 1 Expected return on plan assets (68 ) (57 ) (22 ) (24 ) (3 ) (3 ) Amortization of: Unrecognized net loss 15 11 4 4 1 2 Unrecognized prior service benefit — — — — (4 ) (4 ) Settlement loss — — — 21 — — Net periodic pension cost (benefit) $ (6 ) $ — $ (8 ) $ 12 $ (5 ) $ (4 ) U.S. Pension Benefit Plans Non-U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Nine Months Ended September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Service cost $ — $ — $ 2 $ 3 $ — $ — Interest cost 139 138 30 30 2 3 Expected return on plan assets (203 ) (172 ) (70 ) (71 ) (8 ) (9 ) Amortization of: Unrecognized net loss 43 33 11 12 3 4 Unrecognized prior service benefit — — — — (11 ) (12 ) Settlement loss — — — 46 — — Net periodic cost (benefit) $ (21 ) $ (1 ) $ (27 ) $ 20 $ (14 ) $ (14 ) The Company made a $500 million contribution to its U.S. Pension Benefit Plans during the nine months ended September 29, 2018 . |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Sep. 29, 2018 | |
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 Nine Months Ended September 29, September 30, September 29, September 30, Share-based compensation expense included in: Costs of sales $ 3 $ 2 $ 8 $ 7 Selling, general and administrative expenses 12 11 33 32 Research and development expenditures 4 3 12 10 Share-based compensation expense included in Operating earnings 19 16 53 49 Tax benefit 5 5 13 16 Share-based compensation expense, net of tax $ 14 $ 11 $ 40 $ 33 Decrease in basic earnings per share $ (0.09 ) $ (0.07 ) $ (0.25 ) $ (0.20 ) Decrease in diluted earnings per share $ (0.08 ) $ (0.07 ) $ (0.23 ) $ (0.19 ) During the nine months ended September 29, 2018 , the Company granted 0.4 million restricted stock units ("RSUs") and 0.1 million market stock units ("MSUs") with an aggregate grant-date fair value of $45 million and $7 million , respectively, and 0.2 million stock options and 0.2 million performance options ("POs") with an aggregate grant-date fair value of $6 million and $7 million , respectively. Share-based compensation expense will generally be recognized over the vesting period of three years . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company holds or has held 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 September 29, 2018 and December 31, 2017 were as follows: September 29, 2018 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 6 $ 6 Corporate bonds 2 — 2 Common stock — 17 17 Liabilities: Foreign exchange derivative contracts $ — $ 1 $ 1 December 31, 2017 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 5 $ 5 Available-for-sale securities: Corporate bonds — 2 2 Common stock 13 — 13 Liabilities: Foreign exchange derivative contracts $ — $ 5 $ 5 The Company had no Level 3 holdings as of September 29, 2018 or December 31, 2017 . At September 29, 2018 and December 31, 2017 , the Company had $284 million and $633 million , respectively, of investments in money market prime and government funds (Level 1) 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 September 29, 2018 and December 31, 2017 was $5.5 billion and $4.6 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 | 9 Months Ended |
Sep. 29, 2018 | |
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: September 29, December 31, Long-term receivables, gross $ 29 $ 37 Less allowance for losses (2 ) — Long-term receivables 27 37 Less current portion (7 ) (18 ) Non-current long-term receivables $ 20 $ 19 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 $86 million at September 29, 2018 , compared to $93 million at December 31, 2017 . Sales of Receivables The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three and nine months ended September 29, 2018 and September 30, 2017 : Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Accounts receivable sales proceeds $ — $ 99 $ 76 $ 179 Long-term receivables sales proceeds 73 55 101 123 Total proceeds from receivable sales $ 73 $ 154 $ 177 $ 302 At September 29, 2018 , the Company had retained servicing obligations for $879 million of long-term receivables, compared to $873 million at December 31, 2017 . Servicing obligations are limited to collection activities related to the sales of accounts receivables and long-term receivables. Credit Quality of Long-term Receivables and Allowance for Credit Losses An aging analysis of long-term receivables at September 29, 2018 and December 31, 2017 is as follows: September 29, 2018 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 20 $ — $ — $ 2 Commercial loans and leases secured 9 2 — 1 Long-term receivables, including current portion $ 29 $ 2 $ — $ 3 December 31, 2017 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 21 $ — $ 1 $ 2 Commercial loans and leases secured 16 1 3 1 Long-term receivables, including current portion $ 37 $ 1 $ 4 $ 3 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 29, 2018 | |
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 September 29, 2018 . 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 | 9 Months Ended |
Sep. 29, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company conducts its business globally and manages it through the following two segments: Products and Systems Integration: The Products and Systems Integration segment offers an extensive portfolio of infrastructure, devices, accessories, video solutions, and the implementation, optimization, and integration of such systems, devices, and applications, including the Company’s: (i) “ASTRO” products, which meet the Association of Public Safety Communications Officials Project 25 standard, (ii) “Dimetra” products which meet the European Telecommunications Standards Institute Terrestrial Trunked Radio “TETRA” standard, (iii) Professional and Commercial Radio (“PCR”) products, (iv) broadband technology products, such as Long-Term Evolution (“LTE”), and (v) video solutions, such as video surveillance cameras. The primary customers of the Products and Systems Integration segment are government, public safety and first-responder agencies, municipalities, and commercial and industrial customers who operate private communications networks and video solutions and manage a mobile workforce. Services and Software: The Services and Software segment provides a full set of offerings for government, public safety and commercial communication networks. Services includes a continuum of service offerings beginning with repair, technical support and maintenance. More advanced offerings include monitoring, software updates and cybersecurity services. Managed services offerings range from partial to full operation of customer or Motorola Solutions owned networks. Software includes public safety and enterprise command center solutions, unified communications applications, video software solutions, delivered both on premise and “as a service.” The following table summarizes Net sales by segment: Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Products and Systems Integration $ 1,288 $ 1,174 $ 3,429 $ 3,076 Services and Software 574 471 1,660 1,347 $ 1,862 $ 1,645 $ 5,089 $ 4,423 The following table summarizes the Operating earnings by segment: Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Products and Systems Integration $ 183 $ 266 $ 449 $ 553 Services and Software 111 81 290 228 Operating earnings 294 347 739 781 Total other expense (24 ) (61 ) (102 ) (171 ) Earnings before income taxes $ 270 $ 286 $ 637 $ 610 |
Reorganization of Business
Reorganization of Business | 9 Months Ended |
Sep. 29, 2018 | |
Restructuring and Related Activities [Abstract] | |
Reorganization of Business | Reorganization of Business 2018 Charges During the three months ended September 29, 2018 , the Company recorded net reorganization of business charges of $25 million including $21 million of charges in Other charges and $4 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the $25 million were charges of $13 million related to employee separation costs and $12 million related to exit costs. During the nine months ended September 29, 2018 , the Company recorded net reorganization of business charges of $62 million including $46 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 $62 million were charges of $61 million related to employee separation costs and $16 million related to exit costs, partially offset by $15 million of reversals for accruals no longer needed. The following table displays the net charges incurred by segment: September 29, 2018 Three Months Ended Nine Months Ended Products and Systems Integration $ 19 $ 47 Services and Software 6 15 $ 25 $ 62 The following table displays a rollforward of the reorganization of business accruals established for lease exit costs and employee separation costs from January 1, 2018 to September 29, 2018 : January 1, 2018 Additional Charges Adjustments Amount Used September 29, 2018 Exit costs $ 9 $ 16 $ — $ (3 ) $ 22 Employee separation costs 41 61 (15 ) (48 ) 39 $ 50 $ 77 $ (15 ) $ (51 ) $ 61 Exit Costs At January 1, 2018 , the Company had $9 million of accruals for exit costs. During the nine months ended September 29, 2018 , there were $16 million of additional charges and $3 million of cash payments related to the exit of leased facilities. The remaining accrual of $22 million , which the current portion is included in Accrued liabilities and the non-current portion is included in Other liabilities in the Company’s condensed consolidated balance sheet at September 29, 2018 , 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, 2018 , the Company had an accrual of $41 million for employee separation costs. The 2018 additional charges of $61 million represent severance costs for approximately 700 employees. The adjustment of $15 million reflects reversals for accruals no longer needed. The $48 million used reflects cash payments to severed employees. The remaining accrual of $39 million , which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at September 29, 2018 , is expected to be paid, primarily within one year, to approximately 500 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments. 2017 Charges During the three months ended September 30, 2017 , the Company recorded net reorganization of business charges of $8 million including $6 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 $8 million were charges of $7 million related to employee separation costs and $1 million related to exit costs. During the nine months ended September 30, 2017 , the Company recorded net reorganization of business charges of $30 million including $22 million of charges in Other charges and $8 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the $30 million were charges of $30 million related to employee separation costs and $5 million for exit costs, partially offset by $5 million of reversals for accruals no longer needed. The following table displays the net charges incurred by segment: September 30, 2017 Three Months Ended Nine Months Ended Products and Systems Integration $ 6 $ 22 Services and Software 2 8 $ 8 $ 30 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill The Company accounts for acquisitions using purchase accounting with the results of operations for each acquiree included in the Company's condensed consolidated financial statements for the period subsequent to the date of acquisition. Avigilon Corporation On March 28, 2018, the Company completed the acquisition of Avigilon Corporation, a provider of advanced end-to-end security and surveillance solutions including video analytics, network video management hardware and software, surveillance cameras and access control solutions. The purchase price of $974 million , consisted of cash payments of $980 million for outstanding common stock, restricted stock units and employee held stock options, net of cash acquired of $107 million , debt assumed of $75 million and transaction costs of $26 million . Prior to the end of the first quarter, $35 million of the assumed debt was repaid with the remaining $40 million repaid during the second quarter of 2018. The acquisition of Avigilon 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 purchase accounting is not yet complete and as such the final allocation between deferred income tax accounts and goodwill may be subject to change. The following table summarizes fair values of assets acquired and liabilities assumed as of the March 28, 2018 acquisition date: Accounts receivable, net $ 67 Inventory 93 Other current assets 18 Property, plant and equipment, net 33 Deferred income taxes 4 Accounts payable (21 ) Accrued liabilities (28 ) Deferred income tax liabilities (134 ) Goodwill 444 Intangible assets 498 Total consideration $ 974 Acquired intangible assets consist of $110 million of customer relationships, $380 million of developed technology and $8 million of trade names and will have useful lives of two to 20 years . The fair values of all intangible assets were estimated using the income approach. Customer relationships and developed technology 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 no t deductible for tax purposes. The pro forma effect of this acquisition is not significant. Other Acquisitions On April 9, 2018, the Company completed the acquisition of a provider of two-way radio communications for a gross purchase price of $11 million , recognizing $7 million of identifiable intangible assets, which will be amortized over a period of seven years . The results of operations for this acquisition have been included in the Company’s condensed consolidated statements of operations subsequent to the acquisition date. On March 7, 2018, the Company completed the acquisition of Plant Holdings, Inc., the parent company of Airbus DS Communications for a purchase price of $237 million net cash. This acquisition will expand the Company's software portfolio in the command center with additional solutions for Next Generation 9-1-1. The Company recognized $161 million of goodwill, $80 million of identifiable intangible assets and $4 million of acquired liabilities. Goodwill is no t deductible for tax purposes. The identifiable intangible assets were classified as $41 million of customer-related intangibles, $27 million of completed technology and $12 million of trade names. The identifiable intangible assets will be amortized over a period of 10 to 20 years . The purchase accounting is not yet complete and as such the final allocation between deferred income tax accounts and goodwill may be subject to change. On August 28, 2017, the Company completed the acquisition of Kodiak Networks, a provider of broadband push-to-talk (PTT) for commercial customers, for a purchase price of $225 million . As a result of the acquisition, the Company recognized $191 million of goodwill, $44 million of identifiable intangible assets and $10 million of acquired liabilities. The identifiable intangible assets were classified as $25 million of customer-related intangibles and $19 million of completed technology and will be amortized over a period of 13 to 16 years. On March 13, 2017, the Company completed the acquisition of Interexport, a company that provides services for communications systems to public safety and commercial customers in Chile, for a purchase price of $ 98 billion Chilean pesos, or approximately $147 million U.S. dollars based on cash payments of $55 million , net of cash acquired, and assumed liabilities of $92 million , primarily related to capital leases. As a result of the acquisition, the Company recognized $61 million of identifiable intangible assets, $70 million of acquired property, plant and equipment and $16 million of net other tangible assets. The estimated identifiable intangible assets were classified as $56 million of customer-related intangibles and $5 million of other intangibles and will be amortized over a period of seven years . The pro forma effects of these acquisitions are not significant. Intangible Assets Amortized intangible assets were comprised of the following: September 29, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Completed technology $ 559 $ 81 $ 148 $ 55 Patents 2 2 2 2 Customer-related 1,115 344 977 242 Other intangibles 75 27 56 23 $ 1,751 $ 454 $ 1,183 $ 322 Amortization expense on intangible assets was $46 million for the three months ended September 29, 2018 and $140 million for the nine months ended September 29, 2018 . Amortization expense on intangible assets was $39 million for the three months ended September 30, 2017 and $111 million for the nine months ended September 30, 2017 . As of September 29, 2018 , annual amortization expense is estimated to be $189 million in 2018 , $193 million in 2019 , $191 million in 2020 , $187 million in 2021 , $184 million in 2022 , and $84 million in 2023 . Amortized intangible assets, excluding goodwill, were comprised of the following by segment: September 29, 2018 December 31, 2017 Gross Accumulated Gross Accumulated Products and Systems Integration $ 510 $ 29 $ 12 $ 8 Services and Software 1,241 425 1,171 314 $ 1,751 $ 454 $ 1,183 $ 322 Goodwill The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2018 to September 29, 2018 : Products and Systems Integration Services and Software Total Balance as of January 1, 2018 $ 362 $ 576 $ 938 Goodwill acquired 359 231 590 Purchase accounting adjustments 10 7 17 Foreign currency — (4 ) (4 ) Balance as of September 29, 2018 $ 731 $ 810 $ 1,541 During the second quarter of 2018, the Company modified its internal reporting structure to better align the way financial information is reported to and analyzed by executive leadership, in part, as a result of recent acquisitions contributing to the growth within the newly aligned Services and Software segment. Previously, the Company had two reporting segments: Products and Services. The changes in reporting structure consist of Systems Integration-related revenue and costs moving from the old Services segment into the newly presented Products and Systems Integration segment and Software related revenue and costs moving from the old Products segment into the newly presented Services and Software segment. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The condensed consolidated financial statements as of September 29, 2018 and for the three and nine months ended September 29, 2018 and September 30, 2017 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, 2017 . The results of operations for the three and nine months ended September 29, 2018 are not necessarily indicative of the operating results to be expected for the full year. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 on January 1, 2019 and interim periods within that reporting period, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11 that amended the ASU to include an additional (and optional) transition relief. The additional transition relief provides entities the option to adopt the ASU by applying the new ASU at the adoption date and recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restatement of comparative periods. The new ASU must be adopted utilizing the modified retrospective method as of the earliest comparative period presented if the optional adoption method is not selected. The Company will adopt the ASU on January 1, 2019, utilizing the modified retrospective method as of the adoption date. The Company is continuing to assess the impact of the ASU on its condensed consolidated financial statements, including the package of available practical expedients, required disclosures, and changes to internal controls. Based on the preliminary work completed, the Company expects a material impact to its condensed consolidated balance sheet through the recording of right-of-use assets and lease obligations that are not required to be recorded within the condensed consolidated balance sheet under current accounting standards. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires entities to estimate and recognize current expected credit losses rather than delay recognition of credit losses until the loss is probable of occurring. The ASU is effective for the Company on January 1, 2020, and interim periods within that reporting period with early option permitted. The Company is currently evaluating the impact of the ASU on its consolidated financial statements and disclosures. In August 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities," which is intended to simplify the application of hedge accounting and better portray the economic results of risk management strategies in the consolidated financial statements. The ASU expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The ASU is effective for the Company on January 1, 2019 with adoption permitted immediately in any interim or annual period (including the current period). The guidance related to cash flow and net investment hedges existing at the date of adoption should be applied using the modified retrospective method by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The guidance related to presentation and disclosure should be applied prospectively. The Company is currently assessing the impact of this ASU, including transition elections and required elections, on its consolidated financial statements and disclosures. In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) - Changes to the Disclosure Requirements for Defined Benefit Plans,” which modifies the disclosure requirements for the defined benefit pension plans and other postretirement plans. The ASU is effective for the Company on January 1, 2020 with early adoption permitted. The ASU requires a retrospective adoption method. The Company does not believe the ASU will have a material impact on its financial statement disclosures. Recently Adopted Accounting Pronouncements The Company adopted ASU No. 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory” on January 1, 2018 using the modified retrospective method of adoption. The Company recognized $31 million related to the cumulative effect of applying the ASU as an adjustment to its opening retained earnings balance. The comparative information has not been restated and continues to be reported under accounting standards in effect in those periods. This ASU eliminates the prior application of deferring the income tax effect of intra-entity asset transfers, other than inventory, until the transferred asset is sold to a third party or otherwise recovered through use. Under the ASU, the Company will recognize tax expense when intra-entity transfers of assets other than inventory occur. The Company adopted ASU No. 2017-07, “Compensation - Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” on January 1, 2018 using the retrospective method of adoption. The amendments in the ASU require that an employer disaggregate the service cost component from the other components of net periodic cost (benefit) and report that component in the same line item as other compensation costs arising from services rendered by employees during the period. The other components of net periodic cost (benefit) are required to be presented in the statement of operations separately from the service cost component and outside of operating earnings. The Company has restated its comparative period results to reflect the application of the presentation guidance of the ASU. As a result of the ASU, the presentation of net periodic cost (benefit) has been updated to classify all components of the Company’s net periodic benefit, with the exception of the service cost component, within Other in Other income (expense) on the statement of operations. The Company reclassified $18 million and $10 million in the three months ended September 29, 2018 and September 30, 2017 , respectively, and $58 million and $10 million in the nine months ended September 29, 2018 and September 30, 2017 , respectively. The Company adopted ASU No. 2014-09, "Revenue from Contracts with Customers," and all the related amendments (collectively “ASC 606”) on January 1, 2018 using the modified retrospective method. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to its opening retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect in those periods. The Company has retained much of the same accounting treatment used to recognize revenue under ASC 606 as under accounting standards in effect in prior periods. Revenue on a significant portion of its System and Integration services contracts continues to be recognized under percentage of completion accounting, applying a cost-to-cost method. Services contracts continue to be recognized ratably over relevant contract terms as the Company stands ready to perform. Finally, revenue on equipment sales continues to be recognized based on delivery terms as aligned with the transfer of control. Under the new standard, the Company identified distinct promises to transfer goods and services within its contracts. For system contracts that are recognized under percentage of completion accounting, the Company has considered the factors used to determine whether promises made in the contract are distinct and determined that devices and accessories represent distinct goods. Accordingly, adoption of the new standard impacts the Company's system contracts, with the result being revenue recognized earlier as control of devices and accessories transfers to the customer at a point in time rather than over time. For the remaining promised goods and services within the Company's system contracts, it continues to recognize revenue on these contracts using a cost-to-cost method based on the continuous transfer of control to the customer over time. Under the new standard, revenue recognition for software sales is accelerated based on when control of software licenses and related support services are transferred to the customer. Amounts deferred under previous software accounting rules due to lack of vendor-specific objective evidence have been recognized as an adjustment through opening retained earnings. Historically, the Company presented transactions that involved a third-party sales representative on a net basis. After considering the control concept and the remaining three indicators of gross presentation under the new standard, the Company has determined that it is the principal in contracts that involve a third-party sales representative. Thus, under the new standard, the Company presents associated revenues on a gross basis, with the affect being an equal increase to selling, general and administrative expenses for its cost of third-party commissions. Under prior accounting standards, the Company expensed sales commissions and other costs to obtain a contract as incurred. However, under the new standard, the Company capitalizes sales commissions and certain other costs as incremental costs to obtain a contract. Such costs are classified as non-current contract cost assets within Other assets and amortized over a period that approximates the timing of revenue recognition on the underlying contracts. The new standard clarified the definition of a receivable and requires the Company to present its net position in a contract with a customer on the balance sheet. The position is presented as either a receivable, contract asset, or a contract liability. Under the new definition, accounts receivable are unconditional rights to consideration from a customer. Contract assets represent rights to consideration from a customer in exchange for transferred goods and services that are conditional on events other than the passage of time. Contract liabilities represent obligations to transfer goods and services for which the Company has received, or is due, consideration from a customer. The Company reclassified its customer positions to align with the new definitions and presentation guidance. Accordingly, Unbilled accounts receivable and Costs and earnings in excess of billings have been reclassified from Accounts receivable and Other current assets, respectively, and are presented as Contract assets. Accounts receivable which are not due from customers have been reclassified into Other current assets. Deferred revenue, Billings in excess of costs and earnings, and Customer downpayments have been reclassified from Accrued liabilities and are presented as Contract liabilities. Non-current deferred revenue has been reclassified from Deferred revenue to Non-current contract liabilities within Other liabilities. |
Revenue from Contracts with Customers | Payment terms on system contracts are typically tied to implementation milestones associated with progress on contracts, while revenue recognition is over time based on a cost-to-cost method of measuring performance. The Company may recognize a contract asset or contract liability, depending on whether revenue has been recognized in excess of billings or billings in excess of revenue. Services contracts are typically billed in advance, generating Contract liabilities until the Company has performed the services. The Company does not record a financing component to contracts when it expects, at contract inception, that the period between the transfer of a promised good or service and related payment terms are less than a year. Significant Judgments The Company enters into arrangements which consist of multiple promises to our customers. The Company evaluates whether the promised goods and services are distinct or a series of distinct goods or services. Where contracts contain multiple performance obligations, the Company generally allocates the total estimated consideration to each performance obligation based on applying an estimated selling price (“ESP”) as our best estimate of standalone selling price. The Company determines ESP by: (i) collecting all reasonably available data points including sales, cost and margin analysis of the product or services, and other inputs based on its normal pricing and discounting practices, (ii) making any reasonably required adjustments to the data based on market and Company-specific factors, and (iii) stratifying the data points, when appropriate, based on major product or service, type of customer, geographic market, and sales volume. The Company accounts for certain system contracts on an over time basis, electing an input method of estimated costs as a measure of performance completed. The selection of the measurement of progress using estimated costs was based on a thorough consideration of alternatives of various output and input measures, including contract milestones and labor hours. However, the Company has determined that other input and output measures are not an appropriate measure of progress as they do not accurately align with the transfer of control on its customized product solutions. The selection of costs incurred as a measure of progress aligns the transfer of control to the overall production of the customized system . For system contracts accounted for over time using estimated costs as a measure of performance completed, the Company relies on estimates around the total estimated costs to complete the contract (“Estimated Costs at Completion”). Total Estimated Costs at Completion include direct labor, material and subcontracting costs. Due to the nature of the efforts required to be performed to meet the underlying performance obligation, determining Estimated Costs at Completion may be complex and subject to many variables. We have a standard and disciplined quarterly process in which management reviews the progress and performance of open contracts in order to determine the best estimate of Estimated Costs at Completion. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion, the project schedule, identified risks and opportunities, and the related changes in estimates of costs. The risks and opportunities include management’s judgment about the ability and cost to achieve the project schedule, technical requirements, and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of work to be performed, the availability and cost of materials, and performance by subcontractors, among other variables. Based on this analysis, any quarterly adjustment to net sales, cost of sales, and the related impact to operating income are recorded as necessary in the period they become known. When estimates of total costs to be incurred on a contract exceed estimates of total revenue to be earned, a provision for the entire loss on the contract is recorded in the period in which the loss is determined. In accordance with ASC 606, the Company recognizes revenue to reflect the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for goods or services. The Company records revenue following the five steps below: 1. Identify the contract with customers: A contract is an agreement between two or more parties that creates enforceable rights and obligations and specifies that enforceability is a matter of law. Contracts shall be accounted for when: (i) the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations, (ii) the Company can identify each party’s rights regarding the goods or services to be transferred, (iii) the Company can identify the payment terms for the goods or services to be transferred, (iv) the contract has commercial substance (that is, the risk, timing, or amount of the Company’s future cash flow is expected to change as a result of the contract), and (v) it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. It is the Company’s customary business practice to obtain a signed legal document as evidence of an arrangement. 2. Identify performance obligations in contracts: The goods or services promised in a contract must be evaluated at inception to identify as a performance obligation each promise to transfer to the customer either: (i) a distinct good or service, or (ii) a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. 3. Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties. In determining the transaction price, the Company considers the following components: (i) variable consideration, (ii) significant financing, (iii) noncash consideration, and (iv) consideration payable to a customer. 4. Allocate the transaction price: For a contract that has more than one distinct performance obligation, the Company must allocate the transaction price to each distinct performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying that specific performance obligation. 5. Recognize revenue when or as the entity satisfies a performance obligation: The Company recognizes revenue when, or as, it satisfies a performance obligation by transferring control of a promised good or service to a customer. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of the changes made to our consolidated opening balance sheet as of January 1, 2018 due to the modified retrospective method of adoption of ASC 606 is as follows: Balance Sheet (Selected captions) (In millions) December 31, Reclassification of Contract Assets Reclassification of Non-customer receivables Reclassification of Contract Liabilities Impact of Adoption on Open Contracts January 1, (Unaudited) ASSETS Accounts receivable, net $ 1,523 $ (297 ) $ (24 ) $ — $ (4 ) $ 1,198 Contract assets — 846 — — 85 931 Inventories, net 327 — — — 1 328 Other current assets 832 (549 ) 24 — (23 ) 284 Deferred income taxes 1,023 — — — (41 ) 982 Other assets 333 — — — 85 418 LIABILITIES AND STOCKHOLDERS’ EQUITY Contract liabilities $ — $ — $ — $ 1,099 $ (17 ) $ 1,082 Accrued liabilities 2,286 — — (1,099 ) — 1,187 Other liabilities 2,585 — — — (7 ) 2,578 Stockholders’ Equity Retained earnings 467 — — — 127 594 Adoption Impact to Financial Statements The impact of the adoption of ASC 606 to the condensed consolidated financial statements for the three and nine months ended September 29, 2018 is as follows: Statements of Operations (Selected captions) Three Months Ended (In millions) September 29, Adjustments due to ASC 606 September 29, 2018 Balances Under ASC 605 Net sales $ 1,862 $ (19 ) $ 1,843 Gross margin 901 (18 ) 883 Selling, general and administrative expenses 323 (17 ) 306 Operating earnings 294 (1 ) 293 Net earnings before income taxes 270 (1 ) 269 Net earnings attributable to Motorola Solutions Inc. $ 247 $ (1 ) $ 246 Nine Months Ended (In millions) September 29, Adjustments due to ASC 606 September 29, 2018 Balances Under ASC 605 Net sales $ 5,089 $ (58 ) $ 5,031 Gross margin 2,392 (57 ) 2,335 Selling, general and administrative expenses 918 (46 ) 872 Operating earnings 739 (11 ) 728 Net earnings before income taxes 637 (11 ) 626 Net earnings attributable to Motorola Solutions Inc. $ 544 $ (11 ) $ 533 Balance Sheet (Selected captions) (In millions) September 29, Adjustments due to ASC 606 September 29, 2018 Balances Under ASC 605 ASSETS Accounts receivable, net $ 1,179 $ 315 $ 1,494 Contract assets 917 (917 ) — Other current assets 350 540 890 Deferred income taxes 949 41 990 Other assets 444 (95 ) 349 LIABILITIES AND STOCKHOLDERS' EQUITY Contract liabilities $ 1,127 $ (1,127 ) $ — Accrued liabilities 1,168 1,139 2,307 Other liabilities 2,175 10 2,185 Stockholders’ Equity Retained earnings 788 (138 ) 650 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes the disaggregation of our revenue by segment, geography, major product and service type and customer type for the three and nine months ended September 29, 2018 , consistent with the information reviewed by our chief operating decision maker for evaluating the financial performance of operating segments: Three Months Ended Nine Months Ended (in millions) Products and Systems Integration Services and Software Products and Systems Integration Services and Software Regions Americas $ 957 $ 343 $ 2,533 $ 969 EMEA 199 189 543 565 Asia Pacific 132 42 353 126 Total $ 1,288 $ 574 $ 3,429 $ 1,660 Major Products and Services Devices $ 828 $ — $ 2,184 $ — Systems and Systems Integration 460 — 1,245 — Services — 455 — 1,357 Software — 119 — 303 Total $ 1,288 $ 574 $ 3,429 $ 1,660 Customer Type Direct $ 811 $ 543 $ 2,168 $ 1,586 Indirect 477 31 1,261 74 Total $ 1,288 $ 574 $ 3,429 $ 1,660 |
Contract Balances | (in millions) September 29, 2018 January 1, 2018 Receivables $ 1,179 $ 1,198 Contract assets 917 931 Contract liabilities 1,127 1,082 Non-current contract liabilities 159 162 |
Contract Cost Balances | (in millions) September 29, 2018 January 1, 2018 Current contract cost assets $ 57 $ 62 Non-current contract cost assets 95 85 |
Other Financial Data (Tables)
Other Financial Data (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
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 Nine Months Ended September 29, September 30, September 29, September 30, Other charges: Intangibles amortization (Note 14) $ 46 $ 39 $ 140 $ 111 Reorganization of business (Note 13) 21 6 46 22 Environmental reserve expense 57 — 57 — Building impairment — — — 8 Loss (Gain) on legal settlements 2 — 3 (2 ) Gain on recovery of financial receivables — — — (42 ) Asset impairment — 2 — 2 Acquisition-related transaction fees — — 17 1 $ 126 $ 47 $ 263 $ 100 |
Other Income (Expense) | Interest expense, net, and Other, both included in Other income (expense), consist of the following: Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Interest income (expense), net: Interest expense $ (62 ) $ (55 ) $ (178 ) $ (164 ) Interest income 3 3 15 10 $ (59 ) $ (52 ) $ (163 ) $ (154 ) Other: Net periodic pension and postretirement benefit (Note 7) $ 18 $ 11 $ 58 $ 36 Non-U.S. pension settlement loss (Note 7) — (21 ) — (46 ) Gain from the extinguishment of convertible debt (Note 4) 6 — 6 — Foreign currency loss (14 ) (7 ) (14 ) (29 ) Gain (loss) on derivative instruments 8 3 (15 ) 14 Gains on equity method investments 1 1 2 1 Fair value adjustments to equity investments 7 — 7 — Other 3 4 1 4 $ 29 $ (9 ) $ 45 $ (20 ) |
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 Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Basic earnings per common share: Earnings $ 247 $ 212 $ 544 $ 420 Weighted average common shares outstanding 162.6 162.3 162.0 163.2 Per share amount $ 1.52 $ 1.30 $ 3.36 $ 2.57 Diluted earnings per common share: Earnings $ 247 $ 212 $ 544 $ 420 Weighted average common shares outstanding 162.6 162.3 162.0 163.2 Add effect of dilutive securities: Share-based awards 4.6 3.4 4.2 3.3 Senior Convertible Notes 5.4 3.3 5.4 2.8 Diluted weighted average common shares outstanding 172.6 169.0 171.6 169.3 Per share amount $ 1.43 $ 1.25 $ 3.17 $ 2.48 |
Accounts Receivable, Net | Accounts receivable, net, consists of the following: September 29, December 31, Accounts receivable $ 1,227 $ 1,568 Less allowance for doubtful accounts (48 ) (45 ) $ 1,179 $ 1,523 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: September 29, December 31, Long-term receivables, gross $ 29 $ 37 Less allowance for losses (2 ) — Long-term receivables 27 37 Less current portion (7 ) (18 ) Non-current long-term receivables $ 20 $ 19 |
Inventories, Net | Inventories, net, consist of the following: September 29, December 31, Finished goods $ 190 $ 178 Work-in-process and production materials 313 282 503 460 Less inventory reserves (136 ) (133 ) $ 367 $ 327 |
Other Current Assets | Other current assets consist of the following: September 29, December 31, Costs and earnings in excess of billings (Note 1) $ — $ 549 Current contract cost assets (Note 2) 57 62 Tax-related refunds receivable 119 90 Other 174 131 $ 350 $ 832 |
Property, Plant and Equipment, Net | Property, plant and equipment, net, consists of the following: September 29, December 31, Land $ 11 $ 11 Building 355 316 Machinery and equipment 2,224 2,122 2,590 2,449 Less accumulated depreciation (1,698 ) (1,593 ) $ 892 $ 856 |
Investments | Investments consist of the following: September 29, 2018 December 31, 2017 Corporate bonds $ 2 $ 2 Common stock 17 13 Strategic investments, at cost 60 78 Company-owned life insurance policies 83 141 Equity method investments 14 13 $ 176 $ 247 |
Other Assets | Other assets consist of the following: September 29, December 31, Defined benefit plan assets $ 182 $ 133 Tax receivable 101 101 Non-current contract cost assets (Note 2) 95 — Other 66 99 $ 444 $ 333 |
Accrued Liabilities | Accrued liabilities consist of the following: September 29, December 31, Deferred revenue (Note 1) $ — $ 613 Compensation 248 273 Billings in excess of costs and earnings (Note 1) — 428 Tax liabilities 127 107 Deferred consideration on Airwave acquisition 84 83 Dividend payable 85 84 Trade liabilities 165 151 Other 459 547 $ 1,168 $ 2,286 |
Other Liabilities | Other liabilities consist of the following: September 29, December 31, Defined benefit plans $ 1,446 $ 2,019 Non-current contract liabilities (Note 2) 159 — Deferred revenue (Note 1) — 169 Unrecognized tax benefits 51 54 Deferred income taxes 234 115 Other 285 228 $ 2,175 $ 2,585 |
Changes in Accumulated Other Comprehensive Loss | The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the condensed consolidated statements of operations during the three and nine months ended September 29, 2018 and September 30, 2017 : Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Foreign Currency Translation Adjustments: Balance at beginning of period $ (391 ) $ (413 ) $ (353 ) $ (494 ) Other comprehensive income (loss) before reclassification adjustment (3 ) 49 (33 ) 133 Tax benefit (1 ) (3 ) (9 ) (6 ) Other comprehensive income (loss), net of tax (4 ) 46 (42 ) 127 Balance at end of period $ (395 ) $ (367 ) $ (395 ) $ (367 ) Available-for-Sale Securities: Balance at beginning of period $ — $ 4 $ 6 $ — Other comprehensive income before reclassification adjustment — 1 — 8 Tax benefit — — — (3 ) Other comprehensive income before reclassification adjustment, net of tax — 1 — 5 Reclassification adjustment into Gains on sales of investments and businesses, net — — (8 ) — Tax expense — — 2 — Reclassification adjustment into Gains (losses) on sales of investments and businesses, net of tax — — (6 ) — Other comprehensive income (loss), net of tax — 1 (6 ) 5 Balance at end of period $ — $ 5 $ — $ 5 Defined Benefit Plans: Balance at beginning of period $ (2,189 ) $ (1,790 ) $ (2,215 ) $ (1,823 ) Other comprehensive loss before reclassification adjustment, net of tax — (4 ) — (15 ) Reclassification adjustment - Actuarial net losses into Other income (expense) 20 17 57 49 Reclassification adjustment - Prior service benefits into Other income (expense) (4 ) (4 ) (11 ) (12 ) Reclassification adjustment - Non-U.S. pension settlement loss into Other income (expense) — 21 — 46 Tax benefit (3 ) (4 ) (7 ) (9 ) Reclassification adjustment into Net earnings, net of tax 13 30 39 74 Other comprehensive income, net of tax 13 26 39 59 Balance at end of period $ (2,176 ) $ (1,764 ) $ (2,176 ) $ (1,764 ) Total Accumulated other comprehensive loss $ (2,571 ) $ (2,126 ) $ (2,571 ) $ (2,126 ) |
Risk Management (Tables)
Risk Management (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
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 September 29, 2018 , and the corresponding positions as of December 31, 2017 : Notional Amount Net Buy (Sell) by Currency September 29, December 31, British Pound $ 221 $ 72 Euro 215 149 Australian Dollar (109 ) (64 ) Chinese Renminbi (75 ) (73 ) Brazilian Real (46 ) (45 ) |
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 September 29, 2018 and December 31, 2017 : Fair Values of Derivative Instruments Assets Liabilities September 29, 2018 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives not designated as hedging instruments: Foreign exchange contracts $ 6 Other current assets $ 1 Accrued liabilities Fair Values of Derivative Instruments Assets Liabilities December 31, 2017 Fair Value Balance Sheet Location Fair Value Balance Sheet Location Derivatives designated as hedging instruments: Foreign exchange contracts $ — Other assets $ 3 Other liabilities Derivatives not designated as hedging instruments: Foreign exchange contracts $ 5 Other current assets $ 2 Accrued liabilities Total derivatives $ 5 $ 5 |
Summary of Derivative Instruments and The Effect on the Condensed Consolidated Statements Of Operations | The following table summarizes the effect of derivatives designated as hedging instruments on the Company's condensed consolidated financial statements for the three and nine months ended September 29, 2018 and September 30, 2017 : Three Months Ended Nine Months Ended Balance Sheet Location Loss on Derivative Instruments September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Foreign exchange contracts $ (1 ) $ (1 ) $ — $ (3 ) Other comprehensive income (loss) The following table summarizes the effect of derivatives not designated as hedging instruments on the Company's condensed consolidated financial statements for the three and nine months ended September 29, 2018 and September 30, 2017 : Three Months Ended Nine Months Ended Statements of Operations Location Gain (loss) on Derivative Instruments September 29, September 30, September 29, September 30, Interest agreements $ — $ (1 ) $ — $ (1 ) Other income (expense) Foreign exchange contracts 8 4 (15 ) 15 Other income (expense) Total derivatives $ 8 $ 3 $ (15 ) $ 14 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides details of income taxes: Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Net earnings before income taxes $ 270 $ 286 $ 637 $ 610 Income tax expense 22 73 91 188 Effective tax rate 8 % 26 % 14 % 31 % |
Schedule of Provisional Income Tax Expense (Benefit) | For the nine months ended September 29, 2018 , the Company has recorded the following adjustments to the previously recorded provisional tax amounts: December 31, Adjustment September 29, Financial Statement Location Valuation allowance on foreign tax credit carryforward $ 471 $ (9 ) $ 462 Deferred tax expense Measurement of U.S. deferred tax balances at 21% 366 (11 ) 355 Deferred tax expense Transition tax on repatriation of foreign earnings 16 2 18 Current tax expense Uncertain tax positions on foreign operations 21 — 21 Current tax expense Disallowed deduction of covered employees' incentive plans — 4 4 Deferred tax expense $ 874 $ (14 ) $ 860 |
Retirement and Other Employee_2
Retirement and Other Employee Benefits (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Retirement Benefits [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 September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Service cost $ — $ — $ 1 $ 1 $ — $ — Interest cost 47 46 9 10 1 1 Expected return on plan assets (68 ) (57 ) (22 ) (24 ) (3 ) (3 ) Amortization of: Unrecognized net loss 15 11 4 4 1 2 Unrecognized prior service benefit — — — — (4 ) (4 ) Settlement loss — — — 21 — — Net periodic pension cost (benefit) $ (6 ) $ — $ (8 ) $ 12 $ (5 ) $ (4 ) U.S. Pension Benefit Plans Non-U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Nine Months Ended September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Service cost $ — $ — $ 2 $ 3 $ — $ — Interest cost 139 138 30 30 2 3 Expected return on plan assets (203 ) (172 ) (70 ) (71 ) (8 ) (9 ) Amortization of: Unrecognized net loss 43 33 11 12 3 4 Unrecognized prior service benefit — — — — (11 ) (12 ) Settlement loss — — — 46 — — Net periodic cost (benefit) $ (21 ) $ (1 ) $ (27 ) $ 20 $ (14 ) $ (14 ) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
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 Nine Months Ended September 29, September 30, September 29, September 30, Share-based compensation expense included in: Costs of sales $ 3 $ 2 $ 8 $ 7 Selling, general and administrative expenses 12 11 33 32 Research and development expenditures 4 3 12 10 Share-based compensation expense included in Operating earnings 19 16 53 49 Tax benefit 5 5 13 16 Share-based compensation expense, net of tax $ 14 $ 11 $ 40 $ 33 Decrease in basic earnings per share $ (0.09 ) $ (0.07 ) $ (0.25 ) $ (0.20 ) Decrease in diluted earnings per share $ (0.08 ) $ (0.07 ) $ (0.23 ) $ (0.19 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
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 September 29, 2018 and December 31, 2017 were as follows: September 29, 2018 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 6 $ 6 Corporate bonds 2 — 2 Common stock — 17 17 Liabilities: Foreign exchange derivative contracts $ — $ 1 $ 1 December 31, 2017 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 5 $ 5 Available-for-sale securities: Corporate bonds — 2 2 Common stock 13 — 13 Liabilities: Foreign exchange derivative contracts $ — $ 5 $ 5 |
Long-term Financing and Sales_2
Long-term Financing and Sales of Receivables (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Receivables [Abstract] | |
Long-Term Customer Financing | Accounts receivable, net, consists of the following: September 29, December 31, Accounts receivable $ 1,227 $ 1,568 Less allowance for doubtful accounts (48 ) (45 ) $ 1,179 $ 1,523 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: September 29, December 31, Long-term receivables, gross $ 29 $ 37 Less allowance for losses (2 ) — Long-term receivables 27 37 Less current portion (7 ) (18 ) Non-current long-term receivables $ 20 $ 19 |
Proceeds Received From Non-Recourse Sales Of Accounts Receivable And Long-Term Receivables | The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three and nine months ended September 29, 2018 and September 30, 2017 : Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Accounts receivable sales proceeds $ — $ 99 $ 76 $ 179 Long-term receivables sales proceeds 73 55 101 123 Total proceeds from receivable sales $ 73 $ 154 $ 177 $ 302 |
Financing Receivables Aging Analysis | An aging analysis of long-term receivables at September 29, 2018 and December 31, 2017 is as follows: September 29, 2018 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 20 $ — $ — $ 2 Commercial loans and leases secured 9 2 — 1 Long-term receivables, including current portion $ 29 $ 2 $ — $ 3 December 31, 2017 Total Long-term Receivable Current Billed Due Past Due Under 90 Days Past Due Over 90 Days Municipal leases secured tax exempt $ 21 $ — $ 1 $ 2 Commercial loans and leases secured 16 1 3 1 Long-term receivables, including current portion $ 37 $ 1 $ 4 $ 3 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Segment Reporting [Abstract] | |
Net Sales and Operating Earnings by Segment | The following table summarizes Net sales by segment: Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Products and Systems Integration $ 1,288 $ 1,174 $ 3,429 $ 3,076 Services and Software 574 471 1,660 1,347 $ 1,862 $ 1,645 $ 5,089 $ 4,423 The following table summarizes the Operating earnings by segment: Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, Products and Systems Integration $ 183 $ 266 $ 449 $ 553 Services and Software 111 81 290 228 Operating earnings 294 347 739 781 Total other expense (24 ) (61 ) (102 ) (171 ) Earnings before income taxes $ 270 $ 286 $ 637 $ 610 |
Reorganization of Business (Tab
Reorganization of Business (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Reportable Segment | The following table displays the net charges incurred by segment: September 29, 2018 Three Months Ended Nine Months Ended Products and Systems Integration $ 19 $ 47 Services and Software 6 15 $ 25 $ 62 The following table displays the net charges incurred by segment: September 30, 2017 Three Months Ended Nine Months Ended Products and Systems Integration $ 6 $ 22 Services and Software 2 8 $ 8 $ 30 |
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, 2018 to September 29, 2018 : January 1, 2018 Additional Charges Adjustments Amount Used September 29, 2018 Exit costs $ 9 $ 16 $ — $ (3 ) $ 22 Employee separation costs 41 61 (15 ) (48 ) 39 $ 50 $ 77 $ (15 ) $ (51 ) $ 61 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes fair values of assets acquired and liabilities assumed as of the March 28, 2018 acquisition date: Accounts receivable, net $ 67 Inventory 93 Other current assets 18 Property, plant and equipment, net 33 Deferred income taxes 4 Accounts payable (21 ) Accrued liabilities (28 ) Deferred income tax liabilities (134 ) Goodwill 444 Intangible assets 498 Total consideration $ 974 |
Intangible Assets | Amortized intangible assets were comprised of the following: September 29, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Completed technology $ 559 $ 81 $ 148 $ 55 Patents 2 2 2 2 Customer-related 1,115 344 977 242 Other intangibles 75 27 56 23 $ 1,751 $ 454 $ 1,183 $ 322 |
Amortized Intangible Assets, Excluding Goodwill, By Business Segment | Amortized intangible assets, excluding goodwill, were comprised of the following by segment: September 29, 2018 December 31, 2017 Gross Accumulated Gross Accumulated Products and Systems Integration $ 510 $ 29 $ 12 $ 8 Services and Software 1,241 425 1,171 314 $ 1,751 $ 454 $ 1,183 $ 322 |
Goodwill | The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2018 to September 29, 2018 : Products and Systems Integration Services and Software Total Balance as of January 1, 2018 $ 362 $ 576 $ 938 Goodwill acquired 359 231 590 Purchase accounting adjustments 10 7 17 Foreign currency — (4 ) (4 ) Balance as of September 29, 2018 $ 731 $ 810 $ 1,541 |
Basis of Presentation - Recent
Basis of Presentation - Recent Developments (Details) $ in Millions | Mar. 28, 2018USD ($) | Mar. 07, 2018USD ($) | Mar. 31, 2018segment | Sep. 29, 2018segment |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of segments | segment | 2 | 2 | ||
Avigilon | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | $ 974 | |||
Plant Holdings, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash paid for acquisition | $ 237 |
Basis of Presentation - Recentl
Basis of Presentation - Recently Adopted Accounting Pronoucements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Restatement Adjustment | Accounting Standards Update 2017-07 | Other income (expense) | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net periodic benefit excluding service cost | $ 18 | $ 10 | $ 58 | $ 10 | |
Retained Earnings | Accounting Standards Update 2016-16 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of new accounting pronouncement | $ (31) |
Basis of Presentation - Balance
Basis of Presentation - Balance Sheet (Selected captions) (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
ASSETS | |||
Accounts receivable, net | $ 1,179 | $ 1,198 | $ 1,523 |
Contract assets | 917 | 931 | 0 |
Inventories, net | 367 | 328 | 327 |
Other current assets | 350 | 284 | 832 |
Deferred income taxes | 949 | 982 | 1,023 |
Other assets | 444 | 418 | 333 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Contract liabilities | 1,127 | 1,082 | 0 |
Accrued liabilities | 1,168 | 1,187 | 2,286 |
Other liabilities | 2,175 | 2,578 | 2,585 |
Retained earnings | 788 | 594 | 467 |
Calculated under Revenue Guidance in Effect before Topic 606 | |||
ASSETS | |||
Accounts receivable, net | 1,494 | 1,523 | |
Contract assets | 0 | 0 | |
Inventories, net | 327 | ||
Other current assets | 890 | 832 | |
Deferred income taxes | 990 | 1,023 | |
Other assets | 349 | 333 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Contract liabilities | 0 | 0 | |
Accrued liabilities | 2,307 | 2,286 | |
Other liabilities | 2,185 | 2,585 | |
Retained earnings | 650 | $ 467 | |
Accounting Standards Update 2014-09 | Restatement Adjustment | |||
ASSETS | |||
Accounts receivable, net | (24) | ||
Contract assets | 0 | ||
Inventories, net | 0 | ||
Other current assets | 24 | ||
Deferred income taxes | 0 | ||
Other assets | 0 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Contract liabilities | 1,099 | ||
Accrued liabilities | (1,099) | ||
Other liabilities | 0 | ||
Retained earnings | 0 | ||
Accounting Standards Update 2014-09 | Restatement Adjustment | Contract Assets | |||
ASSETS | |||
Accounts receivable, net | (297) | ||
Contract assets | 846 | ||
Inventories, net | 0 | ||
Other current assets | (549) | ||
Deferred income taxes | 0 | ||
Other assets | 0 | ||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
ASSETS | |||
Accounts receivable, net | 315 | (4) | |
Contract assets | (917) | 85 | |
Inventories, net | 1 | ||
Other current assets | 540 | (23) | |
Deferred income taxes | 41 | (41) | |
Other assets | (95) | 85 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Contract liabilities | (1,127) | (17) | |
Accrued liabilities | 1,139 | 0 | |
Other liabilities | 10 | (7) | |
Retained earnings | $ (138) | $ 127 |
Basis of Presentation - Adoptio
Basis of Presentation - Adoption Impact to Statements of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | $ 1,862 | $ 1,645 | $ 5,089 | $ 4,423 |
Gross margin | 901 | 794 | 2,392 | 2,054 |
Selling, general and administrative expenses | 323 | 259 | 918 | 760 |
Operating earnings | 294 | 347 | 739 | 781 |
Net earnings before income taxes | 270 | 286 | 637 | 610 |
Net earnings attributable to Motorola Solutions, Inc. | 247 | $ 212 | 544 | $ 420 |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | (19) | (58) | ||
Gross margin | (18) | (57) | ||
Selling, general and administrative expenses | (17) | (46) | ||
Operating earnings | (1) | (11) | ||
Net earnings before income taxes | (1) | (11) | ||
Net earnings attributable to Motorola Solutions, Inc. | (1) | (11) | ||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | 1,843 | 5,031 | ||
Gross margin | 883 | 2,335 | ||
Selling, general and administrative expenses | 306 | 872 | ||
Operating earnings | 293 | 728 | ||
Net earnings before income taxes | 269 | 626 | ||
Net earnings attributable to Motorola Solutions, Inc. | $ 246 | $ 533 |
Basis of Presentation - Adopt_2
Basis of Presentation - Adoption Impact to Balance Sheet (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | $ 1,179 | $ 1,198 | $ 1,523 |
Contract assets | 917 | 931 | 0 |
Other current assets | 350 | 284 | 832 |
Deferred income taxes | 949 | 982 | 1,023 |
Other assets | 444 | 418 | 333 |
Contract liabilities | 1,127 | 1,082 | 0 |
Accrued liabilities | 1,168 | 1,187 | 2,286 |
Other liabilities | 2,175 | 2,578 | 2,585 |
Retained earnings | 788 | 594 | 467 |
Calculated under Revenue Guidance in Effect before Topic 606 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | 1,494 | 1,523 | |
Contract assets | 0 | 0 | |
Other current assets | 890 | 832 | |
Deferred income taxes | 990 | 1,023 | |
Other assets | 349 | 333 | |
Contract liabilities | 0 | 0 | |
Accrued liabilities | 2,307 | 2,286 | |
Other liabilities | 2,185 | 2,585 | |
Retained earnings | 650 | $ 467 | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Adjustments due to ASU 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | 315 | (4) | |
Contract assets | (917) | 85 | |
Other current assets | 540 | (23) | |
Deferred income taxes | 41 | (41) | |
Other assets | (95) | 85 | |
Contract liabilities | (1,127) | (17) | |
Accrued liabilities | 1,139 | 0 | |
Other liabilities | 10 | (7) | |
Retained earnings | $ (138) | $ 127 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,862 | $ 1,645 | $ 5,089 | $ 4,423 |
Products and Systems Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,288 | 1,174 | 3,429 | 3,076 |
Products and Systems Integration | Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 811 | 2,168 | ||
Products and Systems Integration | Indirect | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 477 | 1,261 | ||
Products and Systems Integration | Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 828 | 2,184 | ||
Products and Systems Integration | Systems and Systems Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 460 | 1,245 | ||
Products and Systems Integration | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | ||
Products and Systems Integration | Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | ||
Products and Systems Integration | Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 957 | 2,533 | ||
Products and Systems Integration | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 199 | 543 | ||
Products and Systems Integration | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 132 | 353 | ||
Services and Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 574 | $ 471 | 1,660 | $ 1,347 |
Services and Software | Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 543 | 1,586 | ||
Services and Software | Indirect | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 31 | 74 | ||
Services and Software | Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | ||
Services and Software | Systems and Systems Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | ||
Services and Software | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 455 | 1,357 | ||
Services and Software | Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 119 | 303 | ||
Services and Software | Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 343 | 969 | ||
Services and Software | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 189 | 565 | ||
Services and Software | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 42 | $ 126 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Additional Information (Details) | 9 Months Ended |
Sep. 29, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Minimum | Systems and Systems Integration | |
Disaggregation of Revenue [Line Items] | |
Expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Maximum | Systems and Systems Integration | |
Disaggregation of Revenue [Line Items] | |
Expected timing of satisfaction, period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Disaggregation of Revenue [Line Items] | |
Expected timing of satisfaction, period |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Remaining Performance Obligation (Details) $ in Billions | 9 Months Ended |
Sep. 29, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Products and Systems Integration | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 1.9 |
Expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Managed and Support Services | Services and Software | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 1.2 |
Expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 6.1 |
Expected timing of satisfaction, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Products and Systems Integration | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 3.3 |
Expected timing of satisfaction, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Services and Software | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 2.8 |
Expected timing of satisfaction, period |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Contract with Customer, Asset and Liability [Abstract] | ||||
Receivables | $ 1,179 | $ 1,179 | $ 1,198 | $ 1,523 |
Contract assets | 917 | 917 | 931 | |
Contract liabilities | 1,127 | 1,127 | 1,082 | $ 0 |
Non-current contract liabilities | 159 | 159 | $ 162 | |
Contract with customer, liability, revenue recognized | 327 | 777 | ||
Contract with customer, performance obligation satisfied in previous period | $ (7) | (4) | ||
Impairment losses | $ 0 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Contract Cost Balances (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Capitalized Contract Cost [Line Items] | ||||
Current contract cost assets | $ 57,000,000 | $ 57,000,000 | $ 62,000,000 | $ 62,000,000 |
Non-current contract cost assets | 95,000,000 | 95,000,000 | $ 85,000,000 | $ 0 |
Contract cost, amortization | $ 11,000,000 | $ 34,000,000 | ||
Minimum | ||||
Capitalized Contract Cost [Line Items] | ||||
Capitalized contract cost, amortization period | 1 year | |||
Maximum | ||||
Capitalized Contract Cost [Line Items] | ||||
Capitalized contract cost, amortization period | 4 years |
Other Financial Data - Other Ch
Other Financial Data - Other Charges (Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Other charges: | ||||
Intangibles amortization (Note 14) | $ 46 | $ 39 | $ 140 | $ 111 |
Reorganization of business (Note 13) | 21 | 6 | 46 | 22 |
Environmental reserve expense | 57 | 0 | 57 | 0 |
Building impairment | 0 | 0 | 0 | 8 |
Loss (Gain) on legal settlements | 2 | 0 | 3 | (2) |
Gain on recovery of financial receivables | 0 | 0 | 0 | (42) |
Asset impairment | 0 | 2 | 0 | 2 |
Acquisition-related transaction fees | 0 | 0 | 17 | 1 |
Other charges | $ 126 | $ 47 | $ 263 | $ 100 |
Other Financial Data - Other _2
Other Financial Data - Other Charges (Income) - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Environmental reserve expense | $ 57 | $ 0 | $ 57 | $ 0 |
Minimum activity timeline period | 30 years | |||
Accrual for environmental loss contingencies | $ 107 | 107 | ||
Current ac for environmental loss contingencies | 4 | 4 | ||
Acquisition-related transaction fees | 0 | 0 | 17 | 1 |
Building impairment | 0 | 0 | 0 | 8 |
Gain on recovery of financial receivables | $ 0 | $ 0 | $ 0 | $ 42 |
Other Financial Data - Other In
Other Financial Data - Other Income (Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Interest income (expense), net: | ||||
Interest expense | $ (62) | $ (55) | $ (178) | $ (164) |
Interest income | 3 | 3 | 15 | 10 |
Interest income (expense), net | (59) | (52) | (163) | (154) |
Other: | ||||
Net periodic pension and postretirement benefit (Note 7) | 18 | 11 | 58 | 36 |
Non-U.S. pension settlement loss (Note 7) | 0 | (21) | 0 | (46) |
Gain from the extinguishment of convertible debt (Note 4) | 6 | 0 | 6 | 0 |
Foreign currency loss | (14) | (7) | (14) | (29) |
Gain (loss) on derivative instruments | 8 | 3 | (15) | 14 |
Gains on equity method investments | 1 | 1 | 2 | 1 |
Fair value adjustments to equity investments | 7 | 0 | 7 | 0 |
Other | 3 | 4 | 1 | 4 |
Total other income (expense) | $ 29 | $ (9) | $ 45 | $ (20) |
Other Financial Data - Other _3
Other Financial Data - Other Income (Expense) - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Foreign currency gain (loss) | $ (14) | $ (7) | $ (14) | $ (29) |
Gain (loss) on derivative instruments | $ 8 | $ 3 | (15) | $ 14 |
Loss on hedges | $ 14 |
Other Financial Data - Earnings
Other Financial Data - Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Basic earnings (loss) per common share: | ||||
Earnings | $ 247 | $ 212 | $ 544 | $ 420 |
Weighted average common shares outstanding (in shares) | 162.6 | 162.3 | 162 | 163.2 |
Basic earnings per share amount (in US$ per share) | $ 1.52 | $ 1.30 | $ 3.36 | $ 2.57 |
Diluted earnings per common share: | ||||
Earnings | $ 247 | $ 212 | $ 544 | $ 420 |
Weighted average common shares outstanding (in shares) | 162.6 | 162.3 | 162 | 163.2 |
Add effect of dilutive securities: | ||||
Share-based awards (in shares) | 4.6 | 3.4 | 4.2 | 3.3 |
Senior Convertible Notes (in shares) | 5.4 | 3.3 | 5.4 | 2.8 |
Diluted weighted average common shares outstanding (in shares) | 172.6 | 169 | 171.6 | 169.3 |
Per share amount (in US$ per share) | $ 1.43 | $ 1.25 | $ 3.17 | $ 2.48 |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from computation of dilutive shares due to antidilutive nature (in shares) | 0.2 | 2 | 3.2 | 2.3 |
Performance Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from computation of dilutive shares due to antidilutive nature (in shares) | 1.7 | 0.8 | 1.9 |
Other Financial Data - Earnin_2
Other Financial Data - Earnings Per Common Share, Additional Information (Details) - Senior Convertible Notes - USD ($) | Oct. 15, 2018 | Sep. 05, 2018 | Sep. 29, 2018 | Aug. 25, 2015 |
Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Repayments of debt | $ 200,000,000 | |||
Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | $ 1,000,000,000 | |||
Interest rate | 2.00% | |||
Amount of debt to repurchase | $ 200,000,000 | |||
Repayments of debt and premium | $ 369,000,000 | |||
Repayments of convertible debt | $ 169,000,000 |
Other Financial Data - Accounts
Other Financial Data - Accounts Receivable, Net (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accounts receivable | $ 1,227 | $ 1,568 | |
Less allowance for doubtful accounts | (48) | (45) | |
Accounts receivable, net | $ 1,179 | $ 1,198 | $ 1,523 |
Other Financial Data - Accoun_2
Other Financial Data - Accounts Receivable, Net, Additional Information (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease in accounts receivable | $ (1,179) | $ (1,198) | $ (1,523) |
Contract assets | 917 | 931 | $ 0 |
Restatement Adjustment | Adjustments due to ASU 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease in accounts receivable | 24 | ||
Contract assets | $ 0 | ||
Restatement Adjustment | Other Receivables | Adjustments due to ASU 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease in accounts receivable | 24 | ||
Contract assets | 24 | ||
Unbilled Receivables | Restatement Adjustment | Adjustments due to ASU 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease in accounts receivable | 297 | ||
Contract assets | $ 297 |
Other Financial Data - Inventor
Other Financial Data - Inventories, Net (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Inventory, Net [Abstract] | |||
Finished goods | $ 190 | $ 178 | |
Work-in-process and production materials | 313 | 282 | |
Inventories, gross | 503 | 460 | |
Less inventory reserves | (136) | (133) | |
Inventories, net | $ 367 | $ 328 | $ 327 |
Other Financial Data - Other Cu
Other Financial Data - Other Current Assets (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Other Current Assets [Abstract] | |||
Costs and earnings in excess of billings (Note 1) | $ 549 | ||
Current contract cost assets (Note 2) | $ 57 | $ 62 | 62 |
Tax-related refunds receivable | 119 | 90 | |
Other | 174 | 131 | |
Other current assets | $ 350 | $ 284 | $ 832 |
Other Financial Data - Property
Other Financial Data - Property, Plant And Equipment, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment, Net [Abstract] | |||||
Land | $ 11 | $ 11 | $ 11 | ||
Building | 355 | 355 | 316 | ||
Machinery and equipment | 2,224 | 2,224 | 2,122 | ||
Property, plant and equipment, gross | 2,590 | 2,590 | 2,449 | ||
Less accumulated depreciation | (1,698) | (1,698) | (1,593) | ||
Property, plant and equipment, net | 892 | 892 | $ 856 | ||
Depreciation expense | $ 43 | $ 49 | $ 127 | $ 142 |
Other Financial Data - Investme
Other Financial Data - Investments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Net Investment Income [Line Items] | |||||
Common stock | $ 17 | $ 17 | |||
Strategic investments, at cost | 60 | 60 | |||
Strategic investments, at cost | $ 78 | ||||
Company-owned life insurance policies | 83 | 83 | 141 | ||
Equity method investments | 14 | 14 | 13 | ||
Long-term investments | 176 | 176 | 247 | ||
Fair value adjustments to equity investments | 7 | $ 0 | 7 | $ 0 | |
Excess cash withdrawal from life insurance investments | 60 | ||||
Gains on sales of investments and businesses, net | 6 | $ 0 | 16 | $ 3 | |
Corporate bonds | |||||
Net Investment Income [Line Items] | |||||
Securities investments | 2 | ||||
Securities investments | $ 2 | $ 2 | |||
Common stock | |||||
Net Investment Income [Line Items] | |||||
Securities investments | $ 13 |
Other Financial Data - Other As
Other Financial Data - Other Assets (Details) - USD ($) | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Other Assets [Abstract] | |||
Defined benefit plan assets | $ 182,000,000 | $ 133,000,000 | |
Tax receivable | 101,000,000 | 101,000,000 | |
Non-current contract cost assets (Note 2) | 95,000,000 | $ 85,000,000 | 0 |
Other | 66,000,000 | 99,000,000 | |
Other assets, total | $ 444,000,000 | $ 418,000,000 | $ 333,000,000 |
Other Financial Data - Accrued
Other Financial Data - Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Accrued Liabilities [Abstract] | |||
Deferred revenue (Note 1) | $ 613 | ||
Compensation | $ 248 | 273 | |
Billings in excess of costs and earnings (Note 1) | 428 | ||
Tax liabilities | 127 | 107 | |
Deferred consideration on Airwave acquisition | 84 | 83 | |
Dividend payable | 85 | 84 | |
Trade liabilities | 165 | 151 | |
Other | 459 | 547 | |
Accrued liabilities | $ 1,168 | $ 1,187 | $ 2,286 |
Other Financial Data - Other Li
Other Financial Data - Other Liabilities (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Sep. 29, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Other Liabilities [Abstract] | ||||
Defined benefit plans | $ 1,446 | $ 2,019 | ||
Non-current contract liabilities (Note 2) | 159 | $ 162 | ||
Deferred revenue (Note 1) | 169 | |||
Unrecognized tax benefits | 51 | 54 | ||
Deferred income taxes | 234 | 115 | ||
Other | 285 | 228 | ||
Other liabilities | 2,175 | $ 2,578 | $ 2,585 | |
Pension Benefit Plan | U.S. | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan contributions | $ 500 | $ 500 |
Other Financial Data - Stockhol
Other Financial Data - Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Payments for repurchased shares | $ 66,000,000 | $ 358,000,000 | ||
Number of shares repurchased (in shares) | 0.6 | |||
Repurchase of common shares, average cost (in US$ per share) | $ 101.54 | |||
Share repurchase authority utilized during period | $ 12,400,000,000 | |||
Amount available for future share repurchase | $ 1,600,000,000 | 1,600,000,000 | ||
Cash dividends paid | 84,000,000 | $ 76,000,000 | 252,000,000 | $ 230,000,000 |
Maximum | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 14,000,000,000 | $ 14,000,000,000 |
Other Financial Data - Accumula
Other Financial Data - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | $ (1,727) | |||
Total other comprehensive income (loss), net of tax | $ 9 | $ 73 | (9) | $ 191 |
Balance at end of period | (1,395) | (1,395) | ||
Total Accumulated other comprehensive loss | (1,395) | (1,727) | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (2,562) | |||
Total other comprehensive income (loss), net of tax | (9) | |||
Balance at end of period | (2,571) | (2,126) | (2,571) | (2,126) |
Total Accumulated other comprehensive loss | (2,571) | (2,126) | (2,562) | (2,126) |
Foreign Currency Translation Adjustments: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (391) | (413) | (353) | (494) |
Other comprehensive income (loss) before reclassification adjustment | (3) | 49 | (33) | 133 |
Tax benefit | (1) | (3) | (9) | (6) |
Total other comprehensive income (loss), net of tax | (4) | 46 | (42) | 127 |
Balance at end of period | (395) | (367) | (395) | (367) |
Total Accumulated other comprehensive loss | (391) | (413) | (353) | (494) |
Available-for-Sale Securities: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | 0 | 4 | 6 | 0 |
Other comprehensive income (loss) before reclassification adjustment | 0 | 1 | 0 | 8 |
Tax benefit | 0 | 0 | 0 | (3) |
Other comprehensive income before reclassification adjustment, net of tax | 0 | 1 | 0 | 5 |
Reclassification adjustment before tax | 0 | 0 | (8) | 0 |
Tax expense (benefit) | 0 | 0 | 2 | 0 |
Reclassification adjustment, net | 0 | 0 | (6) | 0 |
Total other comprehensive income (loss), net of tax | 0 | 1 | (6) | 5 |
Balance at end of period | 0 | 5 | 0 | 5 |
Total Accumulated other comprehensive loss | 0 | 4 | 6 | 0 |
Defined Benefit Plans: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (2,189) | (1,790) | (2,215) | (1,823) |
Other comprehensive income before reclassification adjustment, net of tax | 0 | (4) | 0 | (15) |
Tax expense (benefit) | (3) | (4) | (7) | (9) |
Reclassification adjustment, net | 13 | 30 | 39 | 74 |
Total other comprehensive income (loss), net of tax | 13 | 26 | 39 | 59 |
Balance at end of period | (2,176) | (1,764) | (2,176) | (1,764) |
Total Accumulated other comprehensive loss | (2,189) | (1,790) | (2,215) | (1,823) |
Reclassification adjustment - Actuarial net losses into Other income (expense) | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification adjustment before tax | 20 | 17 | 57 | 49 |
Reclassification adjustment - Prior service benefits into Other income (expense) | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification adjustment before tax | (4) | (4) | (11) | (12) |
Reclassification adjustment - Non-U.S. pension settlement loss into Other income (expense) | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification adjustment before tax | $ 0 | $ 21 | $ 0 | $ 46 |
Debt and Credit Facilities (Det
Debt and Credit Facilities (Details) | Oct. 15, 2018USD ($) | Oct. 05, 2018USD ($) | Sep. 28, 2018USD ($) | Sep. 05, 2018USD ($) | Aug. 25, 2015USD ($)$ / shares | Nov. 01, 2018USD ($) | Sep. 29, 2018USD ($) | Feb. 28, 2018USD ($) | Sep. 29, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 29, 2018USD ($) | Sep. 30, 2017USD ($) |
Debt Instrument [Line Items] | |||||||||||||
Gain from the extinguishment of convertible debt (Note 4) | $ 6,000,000 | $ 0 | $ 6,000,000 | $ 0 | |||||||||
Net proceeds from issuance of debt | 1,295,000,000 | $ 0 | |||||||||||
Senior Convertible Notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Convertible debt reclassified from long-term to short-term debt | $ 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||
Senior Convertible Notes | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayments of short-term debt | $ 200,000,000 | ||||||||||||
U.S. | Pension Benefit Plan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Defined benefit plan contributions | $ 500,000,000 | 500,000,000 | |||||||||||
Line of Credit | Revolving Credit Facility | 2017 Revolving Credit Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility borrowing capacity | 2,200,000,000 | 2,200,000,000 | 2,200,000,000 | ||||||||||
Outstanding loan amount | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | ||||||||||
Net proceeds from line of credit | $ 400,000,000 | ||||||||||||
Weighted average interest rate | 3.58% | 3.58% | 3.58% | ||||||||||
Repayments of short-term debt | $ 200,000,000 | ||||||||||||
Line of Credit | Revolving Credit Facility | 2017 Revolving Credit Facility | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayments of lines of credit | $ 100,000,000 | ||||||||||||
Line of Credit | Letter of Credit | 2017 Revolving Credit Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility borrowing capacity | $ 500,000,000 | 500,000,000 | $ 500,000,000 | ||||||||||
Fronting commitment sub-limit | 450,000,000 | $ 450,000,000 | $ 450,000,000 | ||||||||||
Loans Payable | Term Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face amount | $ 400,000,000 | ||||||||||||
Weighted average interest rate | 3.33% | 3.43% | |||||||||||
Additional borrowings available | 0 | $ 0 | $ 0 | ||||||||||
Senior Notes | 4.60% Senior Notes Due 2028 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face amount | $ 200,000,000 | 500,000,000 | |||||||||||
Proceeds from debt, net | $ 497,000,000 | ||||||||||||
Interest rate | 4.60% | 4.60% | |||||||||||
Long-term debt | $ 700,000,000 | ||||||||||||
Senior Notes | 4.60% Senior Notes Due 2028 | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Net proceeds from issuance of debt | $ 196,000,000 | ||||||||||||
Convertible Notes | Senior Convertible Notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face amount | $ 1,000,000,000 | ||||||||||||
Interest rate | 2.00% | ||||||||||||
Conversion rate | 0.0148252 | ||||||||||||
Effective conversion price of convertible shares (in US$ per share) | $ / shares | $ 67.45 | ||||||||||||
Amount of debt to repurchase | $ 200,000,000 | ||||||||||||
Repayments of debt | $ 369,000,000 | ||||||||||||
Repayments of convertible debt | $ 169,000,000 | ||||||||||||
Gain from the extinguishment of convertible debt (Note 4) | $ 6,000,000 | ||||||||||||
Convertible debt, if-converted value in excess of principal | $ 712,000,000 |
Risk Management - Foreign Curre
Risk Management - Foreign Currency Risk (Details) | Sep. 29, 2018USD ($)position | Dec. 31, 2017USD ($)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 | $ 782,000,000 | $ 507,000,000 |
Foreign Exchange Contract | British Pound | Long | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 221,000,000 | 72,000,000 |
Foreign Exchange Contract | Euro | Long | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 215,000,000 | 149,000,000 |
Foreign Exchange Contract | Australian Dollar | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 109,000,000 | 64,000,000 |
Foreign Exchange Contract | Chinese Renminbi | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 75,000,000 | 73,000,000 |
Foreign Exchange Contract | Brazilian Real | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | $ 46,000,000 | $ 45,000,000 |
Risk Management - Counterparty
Risk Management - Counterparty Risk (Details) $ in Millions | Sep. 29, 2018USD ($) |
Credit Concentration Risk | |
Derivative [Line Items] | |
Net credit risk with all counterparties | $ 6 |
Risk Management - Summary of Fa
Risk Management - Summary of Fair Values and Location in Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Dec. 31, 2017 |
Fair Value | ||
Assets | $ 5 | |
Liabilities | 5 | |
Designated as Hedging Instrument | Foreign exchange contracts | Other assets | ||
Fair Value | ||
Assets | 0 | |
Designated as Hedging Instrument | Foreign exchange contracts | Other liabilities | ||
Fair Value | ||
Liabilities | 3 | |
Not Designated As Hedging Instruments | Foreign exchange contracts | Other current assets | ||
Fair Value | ||
Assets | $ 6 | 5 |
Not Designated As Hedging Instruments | Foreign exchange contracts | Accrued liabilities | ||
Fair Value | ||
Liabilities | $ 1 | $ 2 |
Risk Management - Summary of De
Risk Management - Summary of Derivative Instruments and the Effect on the Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Designated as Hedging Instrument | Foreign exchange contracts | Other comprehensive income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on Derivative Instruments | $ (1) | $ (1) | $ 0 | $ (3) |
Not Designated As Hedging Instruments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on Derivative Instruments | 8 | 3 | (15) | 14 |
Not Designated As Hedging Instruments | Interest agreements | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on Derivative Instruments | 0 | (1) | 0 | (1) |
Not Designated As Hedging Instruments | Foreign exchange contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on Derivative Instruments | $ 8 | $ 4 | $ (15) | $ 15 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Net earnings before income taxes | $ 270 | $ 286 | $ 637 | $ 610 |
Income tax expense | $ 22 | $ 73 | $ 91 | $ 188 |
Effective tax rate | 8.00% | 26.00% | 14.00% | 31.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 22 | $ 73 | $ 91 | $ 188 | |
Effective tax rate | 8.00% | 26.00% | 14.00% | 31.00% | |
Federal income tax rate | 21.00% | 35.00% | 21.00% | 35.00% | 21.00% |
Provisional income tax expense | $ 860 | $ 874 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provisional Tax Amounts (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Federal income tax rate | 21.00% | 35.00% | 21.00% | 35.00% | 21.00% |
Valuation allowance on foreign tax credit carryforward | $ 462 | $ 471 | |||
Measurement of U.S. deferred tax balances at 21% | 355 | 366 | |||
Transition tax on repatriation of foreign earnings | 18 | 16 | |||
Uncertain tax positions on foreign operations | $ 21 | 21 | 21 | ||
Disallowed deduction of covered employees' incentive plans | 4 | 0 | |||
Provisional income tax expense | 860 | $ 874 | |||
Adjustment | |||||
Valuation allowance on foreign tax credit carryforward | (9) | ||||
Measurement of U.S. deferred tax balances at 21% | (11) | ||||
Transition tax on repatriation of foreign earnings | 2 | ||||
Uncertain tax positions on foreign operations | 0 | ||||
Disallowed deduction of covered employees' incentive plans | 4 | ||||
Adjustment | $ (14) |
Retirement and Other Employee_3
Retirement and Other Employee Benefits - Pension and Postretirement Health Care Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Amortization of: | ||||
Settlement loss | $ 0 | $ 21 | $ 0 | $ 46 |
Postretirement Health Care Benefits Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 1 | 1 | 2 | 3 |
Expected return on plan assets | (3) | (3) | (8) | (9) |
Amortization of: | ||||
Unrecognized net loss | 1 | 2 | 3 | 4 |
Unrecognized prior service benefit | (4) | (4) | (11) | (12) |
Settlement loss | 0 | 0 | 0 | 0 |
Net periodic pension cost (benefit) | (5) | (4) | (14) | (14) |
U.S. | Pension Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 47 | 46 | 139 | 138 |
Expected return on plan assets | (68) | (57) | (203) | (172) |
Amortization of: | ||||
Unrecognized net loss | 15 | 11 | 43 | 33 |
Unrecognized prior service benefit | 0 | 0 | 0 | 0 |
Settlement loss | 0 | 0 | 0 | 0 |
Net periodic pension cost (benefit) | (6) | 0 | (21) | (1) |
Non-U.S. | Pension Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 1 | 2 | 3 |
Interest cost | 9 | 10 | 30 | 30 |
Expected return on plan assets | (22) | (24) | (70) | (71) |
Amortization of: | ||||
Unrecognized net loss | 4 | 4 | 11 | 12 |
Unrecognized prior service benefit | 0 | 0 | 0 | 0 |
Settlement loss | 0 | 21 | 0 | 46 |
Net periodic pension cost (benefit) | $ (8) | $ 12 | $ (27) | $ 20 |
Retirement and Other Employee_4
Retirement and Other Employee Benefits - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended |
Feb. 28, 2018 | Sep. 29, 2018 | |
U.S. | Pension Benefit Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan contributions | $ 500 | $ 500 |
Share-Based Compensation Plan_2
Share-Based Compensation Plans - Schedule of Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 19 | $ 16 | $ 53 | $ 49 |
Tax benefit | 5 | 5 | 13 | 16 |
Share-based compensation expense, net of tax | $ 14 | $ 11 | $ 40 | $ 33 |
Decrease in basic earnings per share (in US$ per share) | $ (0.09) | $ (0.07) | $ (0.25) | $ (0.20) |
Decrease in diluted earnings per share (in US$ per share) | $ (0.08) | $ (0.07) | $ (0.23) | $ (0.19) |
Costs of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 3 | $ 2 | $ 8 | $ 7 |
Selling, general and administrative expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | 12 | 11 | 33 | 32 |
Research and development expenditures | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 4 | $ 3 | $ 12 | $ 10 |
Share-Based Compensation Plan_3
Share-Based Compensation Plans - Narrative (Details) shares in Millions, $ in Millions | 9 Months Ended |
Sep. 29, 2018USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units granted in period (in shares) | shares | 0.4 |
Aggregate grant date fair value | $ | $ 45 |
Market Stock Units (MSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units granted in period (in shares) | shares | 0.1 |
Aggregate grant date fair value | $ | $ 7 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options granted in period (in shares) | shares | 0.2 |
Aggregate grant date fair value | $ | $ 6 |
Performance Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options granted in period (in shares) | shares | 0.2 |
Aggregate grant date fair value | $ | $ 7 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Dec. 31, 2017 |
Assets: | ||
Foreign exchange derivative contracts | $ 5 | |
Common stock | $ 17 | |
Liabilities: | ||
Foreign exchange derivative contracts | 5 | |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Corporate bonds | ||
Assets: | ||
Corporate bonds | 2 | |
Available-for-sale securities: | 2 | |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Common stock | ||
Assets: | ||
Common stock | 17 | |
Available-for-sale securities: | 13 | |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange derivative contracts | 6 | 5 |
Liabilities: | ||
Foreign exchange derivative contracts | 1 | 5 |
Recurring basis | Level 1 | Corporate bonds | ||
Assets: | ||
Corporate bonds | 2 | |
Available-for-sale securities: | 0 | |
Recurring basis | Level 1 | Common stock | ||
Assets: | ||
Common stock | 0 | |
Available-for-sale securities: | 13 | |
Recurring basis | Level 1 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange derivative contracts | 0 | 0 |
Liabilities: | ||
Foreign exchange derivative contracts | 0 | 0 |
Recurring basis | Level 2 | Corporate bonds | ||
Assets: | ||
Corporate bonds | 0 | |
Available-for-sale securities: | 2 | |
Recurring basis | Level 2 | Common stock | ||
Assets: | ||
Common stock | 17 | |
Available-for-sale securities: | 0 | |
Recurring basis | Level 2 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange derivative contracts | 6 | 5 |
Liabilities: | ||
Foreign exchange derivative contracts | $ 1 | $ 5 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Dec. 31, 2017 |
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 | $ 284 | $ 633 |
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 | $ 5,500 | $ 4,600 |
Long-term Financing and Sales_3
Long-term Financing and Sales of Receivables - Long-Term Financing (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Long-term receivables, gross | $ 29 | $ 37 |
Less allowance for losses | (2) | 0 |
Long-term receivables | 27 | 37 |
Less current portion | (7) | (18) |
Non-current long-term receivables | 20 | 19 |
Outstanding commitment to provide long-term financing to third parties | $ 86 | $ 93 |
Long-term Financing and Sales_4
Long-term Financing and Sales of Receivables - Sales Receivables (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Receivables [Abstract] | |||||
Accounts receivable sales proceeds | $ 0 | $ 99 | $ 76 | $ 179 | |
Long-term receivables sales proceeds | 73 | 55 | 101 | 123 | |
Total proceeds from receivable sales | 73 | $ 154 | 177 | $ 302 | |
Servicing obligations for long-term receivables | $ 879 | $ 879 | $ 873 |
Long-term Financing and Sales_5
Long-term Financing and Sales of Receivables - Credit Quality of Long-term Receivables and Allowance for Credit Losses (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Long-term Receivable | $ 29 | $ 37 |
Current Billed Due | 2 | 1 |
Past Due Under 90 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 4 |
Past Due Over 90 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 3 | 3 |
Municipal leases secured tax exempt | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Long-term Receivable | 20 | 21 |
Current Billed Due | 0 | 0 |
Municipal leases secured tax exempt | Past Due Under 90 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 1 |
Municipal leases secured tax exempt | Past Due Over 90 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 2 | 2 |
Commercial loans and leases secured | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Long-term Receivable | 9 | 16 |
Current Billed Due | 2 | 1 |
Commercial loans and leases secured | Past Due Under 90 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 3 |
Commercial loans and leases secured | Past Due Over 90 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | $ 1 | $ 1 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Sep. 29, 2018USD ($) |
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 | 9 Months Ended | |||
Sep. 29, 2018USD ($) | Mar. 31, 2018segment | Sep. 30, 2017USD ($) | Sep. 29, 2018USD ($)segment | Sep. 30, 2017USD ($) | |
Segment Reporting [Abstract] | |||||
Number of segments | segment | 2 | 2 | |||
Segment Reporting Information [Line Items] | |||||
Net Sales | $ 1,862 | $ 1,645 | $ 5,089 | $ 4,423 | |
Operating Earnings by Segment | |||||
Operating earnings | 294 | 347 | 739 | 781 | |
Total other expense | (24) | (61) | (102) | (171) | |
Net earnings before income taxes | 270 | 286 | 637 | 610 | |
Products and Systems Integration | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 1,288 | 1,174 | 3,429 | 3,076 | |
Operating Earnings by Segment | |||||
Operating earnings | 183 | 266 | 449 | 553 | |
Services and Software | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 574 | 471 | 1,660 | 1,347 | |
Operating Earnings by Segment | |||||
Operating earnings | $ 111 | $ 81 | $ 290 | $ 228 |
Reorganization of Business - Na
Reorganization of Business - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2018USD ($)employee | Sep. 30, 2017USD ($) | Sep. 29, 2018USD ($)employee | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | $ 25 | $ 8 | $ 62 | $ 30 | |
Restructuring charges | 77 | ||||
Adjustments | (15) | ||||
Restructuring reserve | 61 | 61 | $ 50 | ||
Payments for restructuring | 51 | ||||
Other charges | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | 21 | 6 | 46 | 22 | |
Costs of sales | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | 4 | 2 | 16 | 8 | |
Employee separation costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 13 | 7 | 61 | 30 | |
Adjustments | (15) | (5) | |||
Restructuring reserve | $ 39 | 39 | 41 | ||
Payments for restructuring | $ 48 | ||||
Restructuring charges in the period for total employee severance (in number of employees) | employee | 700 | ||||
Number of employees expected to be paid (in number of employees) | employee | 500 | 500 | |||
Exit costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 12 | $ 1 | $ 16 | $ 5 | |
Adjustments | 0 | ||||
Restructuring reserve | $ 22 | 22 | $ 9 | ||
Payments for restructuring | $ 3 |
Reorganization of Business - Ne
Reorganization of Business - Net Charges Incurred by Business Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | $ 25 | $ 8 | $ 62 | $ 30 |
Products and Systems Integration | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | 19 | 6 | 47 | 22 |
Services and Software | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | $ 6 | $ 2 | $ 15 | $ 8 |
Reorganization of Business - Re
Reorganization of Business - Reorganization of Businesses Accruals (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Restructuring Reserve [Roll Forward] | ||||
January 1, 2018 | $ 50 | |||
Additional Charges | 77 | |||
Adjustments | (15) | |||
Amount Used | (51) | |||
September 29, 2018 | $ 61 | 61 | ||
Exit costs | ||||
Restructuring Reserve [Roll Forward] | ||||
January 1, 2018 | 9 | |||
Additional Charges | 12 | $ 1 | 16 | $ 5 |
Adjustments | 0 | |||
Amount Used | (3) | |||
September 29, 2018 | 22 | 22 | ||
Employee separation costs | ||||
Restructuring Reserve [Roll Forward] | ||||
January 1, 2018 | 41 | |||
Additional Charges | 13 | $ 7 | 61 | 30 |
Adjustments | (15) | $ (5) | ||
Amount Used | (48) | |||
September 29, 2018 | $ 39 | $ 39 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Avigilon Corporation, Additional Information (Details) - Avigilon - USD ($) | Mar. 28, 2018 | Jun. 30, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | |||
Consideration transferred | $ 974,000,000 | ||
Cash payments | 980,000,000 | ||
Cash acquired | 107,000,000 | ||
Acquired debt | 75,000,000 | ||
Transaction costs | 26,000,000 | ||
Repayments of assumed debt | $ 40,000,000 | $ 35,000,000 | |
Intangible assets | 498,000,000 | ||
Goodwill expected to be tax deductible | $ 0 | ||
Minimum | |||
Business Acquisition [Line Items] | |||
Useful life of intangibles | 2 years | ||
Maximum | |||
Business Acquisition [Line Items] | |||
Useful life of intangibles | 20 years | ||
Customer Relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 110,000,000 | ||
Developed Technology | |||
Business Acquisition [Line Items] | |||
Intangible assets | 380,000,000 | ||
Trade Names | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 8,000,000 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Avigilon Corporation, Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Mar. 28, 2018 | Dec. 31, 2017 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 1,541 | $ 938 | |
Avigilon | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Accounts receivable, net | $ 67 | ||
Inventory | 93 | ||
Other current assets | 18 | ||
Property, plant and equipment, net | 33 | ||
Deferred income taxes | 4 | ||
Accounts payable | (21) | ||
Accrued liabilities | (28) | ||
Deferred income tax liabilities | (134) | ||
Goodwill | 444 | ||
Intangible assets | 498 | ||
Total consideration | $ 974 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Other Acquisitions (Details) $ in Billions | Apr. 09, 2018USD ($) | Mar. 07, 2018USD ($) | Aug. 28, 2017USD ($) | Mar. 13, 2017USD ($) | Mar. 13, 2017CLP ($) | Sep. 29, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 1,541,000,000 | $ 938,000,000 | |||||
Provider of Two-Way Radio Communications | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid for acquisition | $ 11,000,000 | ||||||
Intangible assets | $ 7,000,000 | ||||||
Useful life of intangibles | 7 years | ||||||
Plant Holdings, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid for acquisition | $ 237,000,000 | ||||||
Intangible assets | 80,000,000 | ||||||
Goodwill | 161,000,000 | ||||||
Acquired liabilities | 4,000,000 | ||||||
Goodwill expected to be tax deductible | $ 0 | ||||||
Plant Holdings, Inc. | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Useful life of intangibles | 10 years | ||||||
Plant Holdings, Inc. | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Useful life of intangibles | 20 years | ||||||
Plant Holdings, Inc. | Customer-related | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 41,000,000 | ||||||
Plant Holdings, Inc. | Completed technology | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 27,000,000 | ||||||
Plant Holdings, Inc. | Trade Names | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 12,000,000 | ||||||
Kodiak Networks | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 44,000,000 | ||||||
Goodwill | 191,000,000 | ||||||
Acquired liabilities | 10,000,000 | ||||||
Consideration transferred | $ 225,000,000 | ||||||
Kodiak Networks | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Useful life of intangibles | 13 years | ||||||
Kodiak Networks | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Useful life of intangibles | 16 years | ||||||
Kodiak Networks | Customer-related | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 25,000,000 | ||||||
Kodiak Networks | Completed technology | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 19,000,000 | ||||||
Interexport | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid for acquisition | $ 55,000,000 | ||||||
Intangible assets | $ 61,000,000 | ||||||
Useful life of intangibles | 7 years | 7 years | |||||
Consideration transferred | $ 147,000,000 | $ 98 | |||||
Acquired debt | 92,000,000 | ||||||
Property, plant and equipment, net | 70,000,000 | ||||||
Other tangible assets | 16,000,000 | ||||||
Interexport | Customer-related | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 56,000,000 | ||||||
Interexport | Other Intangible Assets | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 5,000,000 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 1,751 | $ 1,751 | $ 1,183 | ||
Accumulated Amortization | 454 | 454 | 322 | ||
Intangible Assets And Goodwill | |||||
Amortization expense on intangibles | 46 | $ 39 | 140 | $ 111 | |
Finite-Lived Intangible Assets, Future Amortization Expense | |||||
2,018 | 189 | 189 | |||
2,019 | 193 | 193 | |||
2,020 | 191 | 191 | |||
2,021 | 187 | 187 | |||
2,022 | 184 | 184 | |||
2,023 | 84 | 84 | |||
Completed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 559 | 559 | 148 | ||
Accumulated Amortization | 81 | 81 | 55 | ||
Patents | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 2 | 2 | 2 | ||
Accumulated Amortization | 2 | 2 | 2 | ||
Customer-related | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 1,115 | 1,115 | 977 | ||
Accumulated Amortization | 344 | 344 | 242 | ||
Other intangibles | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 75 | 75 | 56 | ||
Accumulated Amortization | $ 27 | $ 27 | $ 23 |
Intangible Assets and Goodwil_6
Intangible Assets and Goodwill - Amortized Intangible Assets, Excluding Goodwill, By Business Segment (Details) - USD ($) $ in Millions | Sep. 29, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,751 | $ 1,183 |
Accumulated Amortization | 454 | 322 |
Products and Systems Integration | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 510 | 12 |
Accumulated Amortization | 29 | 8 |
Services and Software | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,241 | 1,171 |
Accumulated Amortization | $ 425 | $ 314 |
Intangible Assets and Goodwil_7
Intangible Assets and Goodwill - Carrying Amount of Goodwill (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Mar. 31, 2018USD ($)segment | Sep. 29, 2018USD ($)segment | |
Goodwill Activity | ||
Balance as of January 1, 2018 | $ 938 | $ 938 |
Goodwill acquired | 590 | |
Purchase accounting adjustments | 17 | |
Foreign currency | (4) | |
Balance as of September 29, 2018 | $ 1,541 | |
Number of segments | segment | 2 | 2 |
Products and Systems Integration | ||
Goodwill Activity | ||
Balance as of January 1, 2018 | $ 362 | $ 362 |
Goodwill acquired | 359 | |
Purchase accounting adjustments | 10 | |
Foreign currency | 0 | |
Balance as of September 29, 2018 | 731 | |
Services and Software | ||
Goodwill Activity | ||
Balance as of January 1, 2018 | $ 576 | 576 |
Goodwill acquired | 231 | |
Purchase accounting adjustments | 7 | |
Foreign currency | (4) | |
Balance as of September 29, 2018 | $ 810 |