Other Financial Data | Other Financial Data Statements of Operations Information Other Charges (Income) Other charges (income) included in Operating earnings consist of the following: Three Months Ended Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Other charges: Intangibles amortization (Note 15) $ 51 $ 52 $ 104 $ 102 Reorganization of business (Note 14) 26 8 38 12 Loss on legal settlements 7 1 9 — Fixed asset impairment 5 — 5 — Gain on sale of property, plant and equipment — — (50) — Acquisition-related transaction fees 1 — 3 2 $ 90 $ 61 $ 109 $ 116 During the six months ended June 27, 2020, the Company recorded a $50 million gain on the sale of a manufacturing facility in Europe. This gain has been recognized in Other charges in the Company's Condensed Consolidated Statements of Operations. Other Income (Expense) Interest expense, net, and Other, net, both included in Other income (expense), consist of the following: Three Months Ended Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Interest income (expense), net: Interest expense $ (60) $ (59) $ (114) $ (119) Interest income 2 3 5 8 $ (58) $ (56) $ (109) $ (111) Other, net: Net periodic pension and postretirement benefit (Note 8) $ 19 $ 17 $ 39 $ 33 Loss from the extinguishment of long-term debt (Note 5) — (43) — (43) Investment impairments — (3) — (11) Foreign currency loss (21) (7) (3) (11) Gain (loss) on derivative instruments 12 (3) (4) (7) Gain on equity method investments — — — 1 Fair value adjustments to equity investments 4 16 5 15 Other 2 2 (3) 11 $ 16 $ (21) $ 34 $ (12) During the three and six months ended June 29, 2019, the Company recorded investment impairment charges of $3 million and $11 million, representing other-than-temporary declines in the value in the Company's strategic investment portfolio. Investment impairment charges are included in Other within Other income (expense) in the Company’s Condensed Consolidated Statements of Operations. 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 Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Basic earnings per common share: Earnings $ 135 $ 207 $ 332 $ 358 Weighted average common shares outstanding 170.0 164.9 170.3 164.4 Per share amount $ 0.79 $ 1.25 $ 1.95 $ 2.18 Diluted earnings per common share: Earnings $ 135 $ 207 $ 332 $ 358 Weighted average common shares outstanding 170.0 164.9 170.3 164.4 Add effect of dilutive securities: Share-based awards 3.6 4.6 4.5 4.7 2.00% senior convertible notes — 6.6 — 6.2 1.75% senior convertible notes — — — — Diluted weighted average common shares outstanding 173.6 176.1 174.8 175.3 Per share amount $ 0.78 $ 1.18 $ 1.90 $ 2.04 For the three months ended June 27, 2020, the assumed exercise of 0.6 million options, including 0.2 million subject to market based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the six months ended June 27, 2020, the assumed exercise of 0.4 million options, including 0.1 million subject to market based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the three and six months ended June 29, 2019, the assumed exercise of 0.5 million options, including 0.3 million subject to market based contingent option agreements, were excluded because their inclusion would have been antidilutive. As of June 27, 2020, the Company had $1.0 billion of 1.75% senior convertible notes outstanding which mature in September 15, 2024 ("New Senior Convertible Notes"). The notes are convertible based on a conversion rate of 4.9140 per $1,000 principal amount (which is equal to an initial conversion price of $203.50 per share). In the event of conversion, the Company intends to settle the principal amount of the New Senior Convertible Notes in cash. Because of the Company’s intention to settle the par value of the New Senior Convertible Notes in cash, Motorola Solutions does not reflect any shares underlying the New Senior Convertible Notes in its diluted weighted average shares outstanding until the average stock price per share for the period exceeds the conversion price. Only the number of shares that would be issuable (under the treasury stock method of accounting for share dilution) will be included, which is based upon the amount by which the average stock price exceeds the conversion price of $203.50. The conversion price is adjusted for dividends declared through the date of settlement. For the period ended June 27, 2020, there was no dilutive effect of the New Senior Convertible Notes on diluted earnings per share attributable to Motorola Solutions, Inc. as the average stock price for the period outstanding was below the conversion price. See further discussion in Note 5. Balance Sheet Information Accounts Receivable, Net Accounts receivable, net, consists of the following: June 27, 2020 December 31, 2019 Accounts receivable $ 1,211 $ 1,475 Less allowance for credit losses (77) (63) $ 1,134 $ 1,412 Inventories, Net Inventories, net, consist of the following: June 27, 2020 December 31, 2019 Finished goods $ 226 $ 209 Work-in-process and production materials 355 374 581 583 Less inventory reserves (132) (136) $ 449 $ 447 Other Current Assets Other current assets consist of the following: June 27, 2020 December 31, 2019 Current contract cost assets (Note 2) $ 22 $ 24 Tax-related deposits 48 77 Other 155 171 $ 225 $ 272 Property, Plant and Equipment, Net Property, plant and equipment, net, consists of the following: June 27, 2020 December 31, 2019 Land $ 6 $ 15 Leasehold improvements 403 410 Machinery and equipment 2,100 2,051 2,509 2,476 Less accumulated depreciation (1,544) (1,484) $ 965 $ 992 Depreciation expense for the three months ended June 27, 2020 and June 29, 2019 was $47 million and $44 million, respectively. Depreciation expense for the six months ended June 27, 2020 and June 29, 2019 was $93 million and $89 million, respectively. Investments Investments consist of the following: June 27, 2020 December 31, 2019 Common stock $ 23 $ 25 Strategic investments, at cost 46 40 Company-owned life insurance policies 70 74 Equity method investments 18 20 $ 157 $ 159 Other Assets Other assets consist of the following: June 27, 2020 December 31, 2019 Defined benefit plan assets $ 260 $ 223 Non-current contract cost assets (Note 2) 101 107 Other 56 92 $ 417 $ 422 Accrued Liabilities Accrued liabilities consist of the following: June 27, 2020 December 31, 2019 Compensation $ 193 $ 347 Tax liabilities 72 95 Dividend payable 109 110 Trade liabilities 140 161 Operating lease liabilities (Note 3) 123 122 Other 534 521 $ 1,171 $ 1,356 Other Liabilities Other liabilities consist of the following: June 27, 2020 December 31, 2019 Defined benefit plans $ 1,483 $ 1,524 Non-current contract liabilities (Note 2) 263 274 Unrecognized tax benefits 55 53 Deferred income taxes 175 184 Other 237 241 $ 2,213 $ 2,276 Stockholders’ Equity (Deficit) Share Repurchase Program: During the three and six months ended June 27, 2020, the Company paid an aggregate of $83 million and $336 million, including transaction costs, to repurchase approximately 0.6 million and 2.2 million shares at an average price of $133.93 and $154.58 per share, respectively. As of June 27, 2020, the Company had $925 million of authority available for future repurchases. Payment of Dividends: During the three months ended June 27, 2020 and June 29, 2019, the Company paid $109 million and $94 million, respectively, in cash dividends to holders of its common stock. During the six months ended June 27, 2020 and June 29, 2019, the Company paid $218 million and $187 million, respectively, in cash dividends to holders of its common stock. Accumulated Other Comprehensive Loss The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the Condensed Consolidated Statements of Operations during the three and six months ended June 27, 2020 and June 29, 2019: Three Months Ended Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Foreign Currency Translation Adjustments: Balance at beginning of period $ (548) $ (414) $ (410) $ (444) Other comprehensive income (loss) before reclassification adjustment 75 (24) (61) 10 Tax benefit (expense) 3 1 1 (3) Other comprehensive income (loss), net of tax 78 (23) (60) 7 Balance at end of period $ (470) $ (437) $ (470) $ (437) Defined Benefit Plans: Balance at beginning of period $ (2,018) $ (2,310) $ (2,030) $ (2,321) Reclassification adjustment - Actuarial net losses into Other income 19 17 38 33 Reclassification adjustment - Prior service benefits into Other expense (4) (4) (8) (7) Tax expense (2) (3) (5) (5) Other comprehensive income, net of tax 13 10 25 21 Balance at end of period $ (2,005) $ (2,300) $ (2,005) $ (2,300) Total Accumulated other comprehensive loss $ (2,475) $ (2,737) $ (2,475) $ (2,737) |