Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 26, 2020 | Oct. 15, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 26, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-7221 | |
Entity Registrant Name | MOTOROLA SOLUTIONS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-1115800 | |
Entity Address, Address Line One | 500 W. Monroe Street, | |
Entity Address, Postal Zip Code | 60661 | |
Entity Address, City or Town | Chicago, | |
Entity Address, State or Province | IL | |
City Area Code | 847 | |
Local Phone Number | 576-5000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | MSI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 169,522,860 | |
Entity Central Index Key | 0000068505 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Net sales | $ 1,868 | $ 1,994 | $ 5,141 | $ 5,511 |
Costs of sales | 959 | 987 | 2,679 | 2,800 |
Gross margin | 909 | 1,007 | 2,462 | 2,711 |
Selling, general and administrative expenses | 313 | 359 | 951 | 1,035 |
Research and development expenditures | 175 | 172 | 505 | 505 |
Other charges | 69 | 63 | 178 | 180 |
Operating earnings | 352 | 413 | 828 | 991 |
Other income (expense): | ||||
Interest expense, net | (58) | (54) | (167) | (165) |
Gains (losses) on sales of investments and businesses, net | (1) | 0 | (1) | 4 |
Other, net | (42) | (11) | (8) | (22) |
Total other expense | (101) | (65) | (176) | (183) |
Net earnings before income taxes | 251 | 348 | 652 | 808 |
Income tax expense | 45 | 80 | 112 | 180 |
Net earnings | 206 | 268 | 540 | 628 |
Less: Earnings attributable to non-controlling interests | 1 | 1 | 3 | 3 |
Net earnings attributable to Motorola Solutions, Inc. | $ 205 | $ 267 | $ 537 | $ 625 |
Earnings per common share: | ||||
Basic (in USD per share) | $ 1.21 | $ 1.60 | $ 3.16 | $ 3.78 |
Diluted (in USD per share) | $ 1.18 | $ 1.51 | $ 3.08 | $ 3.56 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 169.7 | 166.7 | 170.1 | 165.3 |
Diluted (in shares) | 173.5 | 176.4 | 174.3 | 175.7 |
Products | ||||
Net sales | $ 1,044 | $ 1,196 | $ 2,807 | $ 3,260 |
Costs of sales | 487 | 501 | 1,325 | 1,435 |
Services | ||||
Net sales | 824 | 798 | 2,334 | 2,251 |
Costs of sales | $ 472 | $ 486 | $ 1,354 | $ 1,365 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 206 | $ 268 | $ 540 | $ 628 |
Other comprehensive income (loss), net of tax (Note 4): | ||||
Foreign currency translation adjustments | 30 | (33) | (30) | (26) |
Defined benefit plans | 12 | 11 | 37 | 32 |
Total other comprehensive income (loss), net of tax | 42 | (22) | 7 | 6 |
Comprehensive income | 248 | 246 | 547 | 634 |
Less: Earnings attributable to non-controlling interests | 1 | 1 | 3 | 3 |
Comprehensive income attributable to Motorola Solutions, Inc. common shareholders | $ 247 | $ 245 | $ 544 | $ 631 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 1,007 | $ 1,001 |
Accounts receivable, net | 1,155 | 1,412 |
Contract assets | 1,069 | 1,046 |
Inventories, net | 489 | 447 |
Other current assets | 251 | 272 |
Total current assets | 3,971 | 4,178 |
Property, plant and equipment, net | 976 | 992 |
Operating lease assets | 472 | 554 |
Investments | 154 | 159 |
Deferred income taxes | 876 | 943 |
Goodwill | 2,207 | 2,067 |
Intangible assets, net | 1,268 | 1,327 |
Other assets | 437 | 422 |
Total assets | 10,361 | 10,642 |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||
Current portion of long-term debt | 212 | 16 |
Accounts payable | 536 | 618 |
Contract liabilities | 1,359 | 1,449 |
Accrued liabilities | 1,205 | 1,356 |
Total current liabilities | 3,312 | 3,439 |
Long-term debt | 5,162 | 5,113 |
Operating lease liabilities | 401 | 497 |
Other liabilities | 2,226 | 2,276 |
Stockholders’ Equity | ||
Preferred stock, $100 par value | 0 | 0 |
Common stock, $.01 par value. Authorized shares: 600.0, Issued shares: 9/26/20-170.3; 12/31/19-171.0, Outstanding shares: 9/26/20-169.4; 12/31/19-170.5 | 2 | 2 |
Additional paid-in capital | 667 | 499 |
Retained earnings | 1,008 | 1,239 |
Accumulated other comprehensive loss | (2,433) | (2,440) |
Total Motorola Solutions, Inc. stockholders’ equity (deficit) | (756) | (700) |
Non-controlling interests | 16 | 17 |
Total stockholders’ equity (deficit) | (740) | (683) |
Total liabilities and stockholders’ equity (deficit) | $ 10,361 | $ 10,642 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 26, 2020 | Dec. 31, 2019 |
Stockholders’ Equity | ||
Preferred stock par value (in USD per share) | $ 100 | $ 100 |
Common stock par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock issued (in shares) | 170,300,000 | 171,000,000 |
Common stock outstanding (in shares) | 169,400,000 | 170,500,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) shares in Millions, $ in Millions | Total | Common Stock and Additional Paid-in Capital | Common Stock and Additional Paid-in Capital1.75% senior convertible notes | Common Stock and Additional Paid-in Capital2.0% senior convertible notes due 2020 | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interests |
Balance at beginning of period (in shares) at Dec. 31, 2018 | 164 | ||||||
Balance at beginning of period at Dec. 31, 2018 | $ 421 | $ (2,765) | $ 1,051 | $ 17 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 151 | 1 | |||||
Other comprehensive income (loss) | 41 | ||||||
Issuance of common stock and stock options exercised (in shares) | 1.2 | ||||||
Issuance of common stock and stock options exercised | $ 45 | ||||||
Share repurchase program (in shares) | (1.2) | ||||||
Share repurchase program | (145) | ||||||
Share-based compensation expenses | $ 27 | ||||||
Issuance of common stock for acquisition (in shares) | 1.4 | ||||||
Issuance of common stock for acquisition | $ 160 | ||||||
Dividends declared | (94) | ||||||
Balance at ending of period (in shares) at Mar. 30, 2019 | 165.4 | ||||||
Balance at end of period at Mar. 30, 2019 | $ 653 | (2,724) | 963 | 18 | |||
Balance at beginning of period (in shares) at Dec. 31, 2018 | 164 | ||||||
Balance at beginning of period at Dec. 31, 2018 | $ 421 | (2,765) | 1,051 | 17 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | $ 628 | ||||||
Other comprehensive income (loss) | 6 | ||||||
Dividends paid to non-controlling interest on subsidiary common stock | 3 | ||||||
Balance at ending of period (in shares) at Sep. 28, 2019 | 171.6 | ||||||
Balance at end of period at Sep. 28, 2019 | $ 438 | (2,759) | 1,220 | 17 | |||
Balance at beginning of period (in shares) at Mar. 30, 2019 | 165.4 | ||||||
Balance at beginning of period at Mar. 30, 2019 | $ 653 | (2,724) | 963 | 18 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 207 | 1 | |||||
Other comprehensive income (loss) | (13) | ||||||
Issuance of common stock and stock options exercised (in shares) | 0.5 | ||||||
Issuance of common stock and stock options exercised | $ 33 | ||||||
Share repurchase program (in shares) | (0.2) | ||||||
Share repurchase program | (25) | ||||||
Share-based compensation expenses | $ 30 | ||||||
Dividends declared | (94) | ||||||
Dividends paid to non-controlling interest on subsidiary common stock | (3) | ||||||
Balance at ending of period (in shares) at Jun. 29, 2019 | 165.7 | ||||||
Balance at end of period at Jun. 29, 2019 | $ 716 | (2,737) | 1,051 | 16 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 268 | 267 | 1 | ||||
Other comprehensive income (loss) | (22) | (22) | |||||
Issuance of common stock and stock options exercised (in shares) | 0.4 | ||||||
Issuance of common stock and stock options exercised | $ 12 | ||||||
Issuance of common stock for 2.00% senior convertible notes (in shares) | 5.5 | ||||||
Issuance of common stock for 2.00% senior convertible notes | $ 988 | ||||||
Share-based compensation expenses | $ 30 | ||||||
Dividends declared | (98) | ||||||
Equity component and repurchase of senior convertible notes | $ (10) | $ (1,318) | |||||
Balance at ending of period (in shares) at Sep. 28, 2019 | 171.6 | ||||||
Balance at end of period at Sep. 28, 2019 | $ 438 | (2,759) | 1,220 | 17 | |||
Balance at beginning of period (in shares) at Dec. 31, 2019 | 171 | ||||||
Balance at beginning of period at Dec. 31, 2019 | (683) | $ 501 | (2,440) | 1,239 | 17 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 197 | 1 | |||||
Other comprehensive income (loss) | (126) | ||||||
Issuance of common stock and stock options exercised (in shares) | 1.3 | ||||||
Issuance of common stock and stock options exercised | $ 5 | ||||||
Share repurchase program (in shares) | (1.6) | ||||||
Share repurchase program | (253) | ||||||
Share-based compensation expenses | $ 38 | ||||||
Dividends declared | (109) | ||||||
Balance at ending of period (in shares) at Mar. 28, 2020 | 170.7 | ||||||
Balance at end of period at Mar. 28, 2020 | $ 544 | (2,566) | 1,074 | 18 | |||
Balance at beginning of period (in shares) at Dec. 31, 2019 | 171 | ||||||
Balance at beginning of period at Dec. 31, 2019 | (683) | $ 501 | (2,440) | 1,239 | 17 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 540 | ||||||
Other comprehensive income (loss) | $ 7 | ||||||
Share repurchase program (in shares) | (2.9) | ||||||
Dividends paid to non-controlling interest on subsidiary common stock | $ 4 | ||||||
Balance at ending of period (in shares) at Sep. 26, 2020 | 170.4 | ||||||
Balance at end of period at Sep. 26, 2020 | (740) | $ 669 | (2,433) | 1,008 | 16 | ||
Balance at beginning of period (in shares) at Mar. 28, 2020 | 170.7 | ||||||
Balance at beginning of period at Mar. 28, 2020 | $ 544 | (2,566) | 1,074 | 18 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 135 | 1 | |||||
Other comprehensive income (loss) | 91 | ||||||
Issuance of common stock and stock options exercised (in shares) | 0.6 | ||||||
Issuance of common stock and stock options exercised | $ 53 | ||||||
Share repurchase program (in shares) | (0.6) | ||||||
Share repurchase program | (83) | ||||||
Share-based compensation expenses | $ 31 | ||||||
Dividends declared | (109) | ||||||
Dividends paid to non-controlling interest on subsidiary common stock | (4) | ||||||
Balance at ending of period (in shares) at Jun. 27, 2020 | 170.7 | ||||||
Balance at end of period at Jun. 27, 2020 | $ 628 | (2,475) | 1,017 | 15 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 206 | 205 | 1 | ||||
Other comprehensive income (loss) | $ 42 | 42 | |||||
Issuance of common stock and stock options exercised (in shares) | 0.4 | ||||||
Issuance of common stock and stock options exercised | $ 10 | ||||||
Share repurchase program (in shares) | (0.7) | (0.7) | |||||
Share repurchase program | (105) | ||||||
Share-based compensation expenses | $ 31 | ||||||
Dividends declared | (109) | ||||||
Balance at ending of period (in shares) at Sep. 26, 2020 | 170.4 | ||||||
Balance at end of period at Sep. 26, 2020 | $ (740) | $ 669 | $ (2,433) | $ 1,008 | $ 16 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | |
Dividends declared per share (in USD per share) | $ 0.64 | $ 0.64 | $ 0.64 | $ 0.57 | $ 0.57 | $ 0.57 |
2.0% senior convertible notes due 2020 | Senior Notes | ||||||
Interest rate | 2.00% | |||||
2.0% senior convertible notes due 2020 | Convertible Notes | ||||||
Interest rate | 2.00% | |||||
1.75% senior convertible notes | Senior Notes | ||||||
Interest rate | 1.75% | |||||
1.75% senior convertible notes | Convertible Notes | ||||||
Interest rate | 1.75% |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 26, 2020 | Sep. 26, 2020 | Sep. 28, 2019 | |
Operating | |||
Net earnings attributable to Motorola Solutions, Inc. | $ 205 | $ 537 | $ 625 |
Earnings attributable to non-controlling interests | 1 | 3 | 3 |
Net earnings | 206 | 540 | 628 |
Adjustments to reconcile Net earnings to Net cash provided by operating activities: | |||
Depreciation and amortization | 300 | 290 | |
Non-cash other charges (income) | (28) | 27 | |
Share-based compensation expenses | 100 | 87 | |
Losses (gains) on sales of investments and businesses, net | 1 | 1 | (4) |
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | |||
Accounts receivable | 312 | 30 | |
Inventories | 2 | (88) | |
Other current assets and contract assets | (1) | 104 | |
Accounts payable, accrued liabilities, and contract liabilities | (379) | (143) | |
Other assets and liabilities | (18) | 10 | |
Deferred income taxes | 24 | 41 | |
Net cash provided by operating activities | 909 | 1,028 | |
Investing | |||
Acquisitions and investments, net | (282) | (623) | |
Proceeds from sales of investments and businesses, net | 8 | 10 | |
Capital expenditures | (151) | (189) | |
Proceeds from sales of property, plant and equipment | 56 | 0 | |
Net cash used for investing activities | (369) | (802) | |
Financing | |||
Net proceeds from issuance of debt | 892 | 1,804 | |
Repayments of debt | (911) | (1,435) | |
Proceeds from unsecured revolving credit facility draw | 800 | 0 | |
Repayment of unsecured revolving credit facility draw | (600) | 0 | |
Issuances of common stock | 59 | 82 | |
Purchases of common stock | (105) | (441) | (170) |
Payments of dividends | (109) | (327) | (281) |
Payments of dividends to non-controlling interests | (4) | (3) | |
Settlement of conversion premium on 2.00% senior convertible notes | 0 | (326) | |
Net cash used for financing activities | (532) | (329) | |
Effect of exchange rate changes on total cash and cash equivalents | (2) | (14) | |
Net increase (decrease) in total cash and cash equivalents | 6 | (117) | |
Cash and cash equivalents, beginning of period | 1,001 | 1,257 | |
Cash and cash equivalents, end of period | 1,007 | 1,007 | 1,140 |
Cash paid during the period for: | |||
Interest paid | 178 | 176 | |
Income and withholding taxes, net of refunds | 90 | 111 | |
Long-term Debt, Excluding Convertible Debt | |||
Adjustments to reconcile Net earnings to Net cash provided by operating activities: | |||
Gain (losses) on extinguishment of debt | 56 | 56 | 50 |
Convertible Notes | |||
Adjustments to reconcile Net earnings to Net cash provided by operating activities: | |||
Gain (losses) on extinguishment of debt | $ 0 | $ 0 | $ (4) |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Parenthetical) | Sep. 28, 2019 |
2.0% senior convertible notes due 2020 | Senior Notes | |
Interest rate | 2.00% |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 26, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements as of September 26, 2020 and for the three and nine months ended September 26, 2020 and September 28, 2019 include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to state fairly the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, Statements of Stockholders' Equity (Deficit), 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 United States 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, 2019. The results of operations for the three and nine months ended September 26, 2020 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 Acquisitions On August 28, 2020, the Company acquired the Callyo business ("Callyo"), a cloud-based mobile applications provider for law enforcement in North America for $63 million, inclusive of share-based compensation withheld at a fair value of $3 million that will be expensed over an average service period of two years. The acquisition was settled with $61 million in cash, net of cash acquired. This acquisition adds to Motorola Solutions’ existing command center software suite critical mobile technology capabilities that enable information to flow seamlessly from the field to the command center. The business is a part of the Software and Services segment. On July 31, 2020, the Company acquired Pelco, Inc. ("Pelco"), a global provider of video security solutions for a purchase price of $110 million. The acquisition was settled with $108 million of cash, net of cash acquired. The acquisition demonstrates Motorola Solutions’ continued investment in video security and analytics, a broad range of products that can be used in a variety of commercial and industrial environments and use cases. The business is a part of both the Products and Systems Integration segment and the Software and Services segment. On June 16, 2020, the Company acquired IndigoVision Group plc ("IndigoVision") for a purchase price of $37 million. The acquisition was settled with $35 million of cash, net of cash acquired and debt assumed. The acquisition complements the Company's video security and analytics portfolio, providing enhanced geographical reach across a wider customer base. The business is a part of both the Product and Systems Integration segment and the Software and Services segment. On April 30, 2020, the Company acquired a cybersecurity services business for a purchase price of $32 million of cash, net of cash acquired. The acquisition expands the Company’s ability to assist customers with cybersecurity needs through vulnerability assessments, cybersecurity consulting, and managed services including security monitoring of network operations. The business is a part of the Software and Services segment. On March 3, 2020, the Company acquired a cybersecurity services business for $40 million, inclusive of share-based compensation withheld at a fair value of $6 million that will be expensed over a service period of two years. The acquisition was settled with $33 million of cash, net of cash acquired. The acquisition expands the Company’s ability to assist customers with cybersecurity needs through vulnerability assessments, cybersecurity consulting, managed services and remediation and response capabilities. The business is a part of the Software and Services segment. On October 16, 2019, the Company acquired a data solutions business for vehicle location information for a purchase price of $85 million, net of cash acquired. The acquisition enhances the Company's video security platform by adding data to the Company’s existing license plate recognition (“LPR”) database within the Software and Services segment. On July 11, 2019, the Company acquired WatchGuard, Inc. ("WatchGuard"), a provider of in-car and body-worn video solutions for $271 million, inclusive of share-based compensation withheld at a fair value of $16 million that will be expensed over an average service period of two years. The acquisition was settled with $250 million of cash, net of cash acquired. The acquisition expands the Company's video security platform within both the Product and Systems Integration segment and the Software and Services segment. On March 11, 2019, the Company acquired Avtec, Inc. ("Avtec"), a provider of dispatch communication equipment for U.S. public safety and commercial customers for a purchase price of $136 million in cash, net of cash acquired. This acquisition expands the Company's commercial portfolio with new capabilities, allowing it to offer an enhanced platform for customers to communicate, coordinate resources, and secure their facilities. The business is part of both the Product and Systems Integration segment and the Software and Services segment. On January 7, 2019, the Company announced that it acquired VaaS International Holdings ("VaaS"), a global provider of data and image analytics for vehicle location for $445 million, inclusive of share-based compensation withheld at a fair value of $38 million that will be expensed over an average service period of one year. The acquisition was settled with $231 million of cash, net of cash acquired, and 1.4 million of shares issued at a fair value of $160 million for a purchase price of $391 million. This acquisition expands the Company's video security platform within both the Product and Systems Integration segment and the Software and Services segment. Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity," which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments. The new guidance removes the separation models for convertible debt with a cash conversion feature or a beneficial conversion feature. In addition, the new standard provides guidance on calculating the dilutive impact of convertible debt on earnings per share ("EPS"). The ASU clarifies that the average market price should be used to calculate the diluted EPS denominator when the exercise price or the number of shares that may be issued is variable. The ASU is effective for the Company on January 1, 2022, including interim periods, with early adoption permitted. The ASU permits the use of either a full or modified retrospective method of adoption. The Company is still evaluating the impact of adoption on its financial statements and disclosures. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740),” which simplifies the accounting for income taxes by removing certain exceptions and streamlining other areas of accounting for income taxes. The ASU is effective for the Company on January 1, 2021 with early adoption permitted. Portions of the amendment within the ASU require retrospective, modified retrospective or prospective adoption methods. The adoption of the ASU will not have a significant impact on the financial statement 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, 2021 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 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 the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. In November 2018, April 2019, May 2019 and November 2019, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," ASU No. 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief," and ASU No. 2019-11,"Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” which provided additional implementation guidance on the previously issued ASU. The Company adopted ASC 326 as of January 1, 2020 using a modified retrospective transition approach for all credit losses. Consequently, financial information was not updated and disclosures required under ASC 326 are not provided for dates and periods before January 1, 2020. The Company considered the impact of adoption by reviewing historical losses in conjunction with current and future economic conditions on the following financial assets: i) cash equivalents, ii) accounts receivable, iii) contract assets, and iv) long-term receivables. Historical losses for these financial assets were previously insignificant with the exception of accounts receivable. The Company estimates credit losses on accounts receivable based on historical losses and then takes into account estimates of current and future economic conditions. The Company’s historical loss model is based on past due customer receivable balances and considers past collection experience, historical write-offs as well as the customer’s overall financial condition. Customer receivables are considered past due if payments have not been received within the agreed invoice terms. These historical losses are aggregated based on the type of customer (Direct and Indirect) and the geographic region (North America and International). The adoption of this standard did not have a material impact to the Company's financial statements. The following table displays the rollforward of the allowance for credit losses on the Company's trade receivables: Balance at January 1, 2020 Charged to Earnings Used Adjustments* Balance at Allowance for credit losses $ 63 $ 38 $ (26) $ (2) $ 73 *Adjustments include translation adjustments |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 26, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers 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 26, 2020 and September 28, 2019, consistent with the information reviewed by our chief operating decision maker for evaluating the financial performance of the Company's segments: Three Months Ended September 26, 2020 September 28, 2019 Products and Systems Integration Software and Services Products and Systems Integration Software and Services Regions: North America $ 863 $ 405 $ 980 $ 364 International 300 300 369 281 $ 1,163 $ 705 $ 1,349 $ 645 Major Products and Services: Devices $ 719 $ — $ 896 $ — Systems and Systems Integration 444 — 453 — Services — 514 — 479 Software — 191 — 166 $ 1,163 $ 705 $ 1,349 $ 645 Customer Type: Direct $ 733 $ 637 $ 860 $ 602 Indirect 430 68 489 43 $ 1,163 $ 705 $ 1,349 $ 645 Nine Months Ended September 26, 2020 September 28, 2019 Products and Systems Integration Software and Services Products and Systems Integration Software and Services Regions: North America $ 2,330 $ 1,146 $ 2,646 $ 1,026 International 794 871 1,010 829 $ 3,124 $ 2,017 $ 3,656 $ 1,855 Major Products and Services: Devices $ 1,921 $ — $ 2,391 $ — Systems and Systems Integration 1,203 — 1,265 — Services — 1,490 — 1,400 Software — 527 — 455 $ 3,124 $ 2,017 $ 3,656 $ 1,855 Customer Type: Direct $ 2,008 $ 1,869 $ 2,289 $ 1,737 Indirect 1,116 148 1,367 118 $ 3,124 $ 2,017 $ 3,656 $ 1,855 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 prices associated with remaining performance obligations which are not yet satisfied as of September 26, 2020 are $6.8 billion. A total of $2.9 billion is from Products and Systems Integration performance obligations that are not yet satisfied, of which $1.4 billion is expected to be recognized in the next twelve months. The remaining amounts will generally be satisfied over time as systems are implemented. A total of $3.9 billion is from Software and Services performance obligations that are not yet satisfied as of September 26, 2020. The determination of Software and Services 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 service contracts, its disclosure of the remaining performance obligations that are unsatisfied assumes the contract term is limited until renewal. The Company expects to recognize $1.4 billion from unsatisfied Software and Services performance obligations over the next twelve months, with the remaining performance obligations to be recognized over time as services are performed and software is implemented. Contract Balances September 26, 2020 December 31, 2019 Accounts receivable, net $ 1,155 $ 1,412 Contract assets 1,069 1,046 Contract liabilities 1,359 1,449 Non-current contract liabilities 266 274 Revenue recognized during the three months ended September 26, 2020 which was previously included in Contract liabilities as of June 27, 2020 is $349 million, compared to $342 million of revenue recognized during the three months ended September 28, 2019 which was previously included in Contract liabilities as of June 29, 2019. Revenue recognized during the nine months ended September 26, 2020 which was previously included in Contract liabilities as of December 31, 2019 is $807 million, compared to $783 million of revenue recognized during the nine months ended September 28, 2019 which was previously included in Contract liabilities as of December 31, 2018. Revenue of $12 million and $48 million was reversed during the three and nine months ended September 26, 2020 related to performance obligations satisfied or partially satisfied, in previous periods, primarily driven by changes in the estimates of progress on system contracts. Revenue of $26 million and $42 million was reversed for the three and nine months ended September 28, 2019 driven by changes in the estimates of progress on system contracts. There were no material expected credit losses recognized on contract assets during the three and nine months ended September 26, 2020 and September 28, 2019. Contract Cost Balances September 26, 2020 December 31, 2019 Current contract cost assets $ 25 $ 24 Non-current contract cost assets 101 107 |
Leases
Leases | 9 Months Ended |
Sep. 26, 2020 | |
Leases [Abstract] | |
Operating Leases | Leases The components of the Company's lease expense are as follows: Three months ended Nine Months Ended (in millions) September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Lease expense: Operating lease cost $ 34 $ 33 $ 101 $ 99 Finance lease cost Amortization of right-of-use assets 3 3 9 9 Interest on lease liabilities — 1 1 1 Total finance lease cost 3 4 10 10 Short-term lease cost 1 1 2 4 Variable cost 10 8 27 25 Sublease income (2) (1) (4) (3) Net lease expense $ 46 $ 45 $ 136 $ 135 Lease assets and liabilities consist of the following: (in millions) Statement Line Classification September 26, 2020 December 31, 2019 Assets: Operating lease assets Operating lease assets $ 472 $ 554 Finance lease assets Property, plant, and equipment, net 30 41 $ 502 $ 595 Current liabilities: Operating lease liabilities Accrued liabilities $ 123 $ 122 Finance lease liabilities Current portion of long-term debt 11 13 $ 134 $ 135 Non-current liabilities: Operating lease liabilities Operating lease liabilities $ 401 $ 497 Finance lease liabilities Long-term debt 7 16 $ 408 $ 513 For the nine months ended September 26, 2020, the Company exercised a break option reducing the term of an International office lease by five years. This resulted in a reduction to both the right of use ("ROU") asset and lease liabilities by approximately $47 million. Other information related to leases is as follows: Nine Months Ended (in millions) September 26, 2020 September 28, 2019 Supplemental cash flow information: Net cash used for operating activities related to operating leases $ 116 $ 110 Net cash used for operating activities related to finance leases 1 1 Net cash used for financing activities related to finance leases 9 11 Assets obtained in exchange for lease liabilities: Operating leases $ 64 $ 69 (in millions) September 26, 2020 December 31, 2019 Weighted average remaining lease terms (years): Operating leases 6 7 Finance leases 2 2 Weighted average discount rate: Operating leases 3.31 % 3.61 % Finance leases 4.23 % 4.28 % Future lease payments as of September 26, 2020 are as follows: (in millions) Operating Leases Finance Leases Total Remainder of 2020 $ 29 $ 3 $ 32 2021 136 11 147 2022 120 5 125 2023 67 — 67 2024 54 — 54 Thereafter 184 — 184 Total lease payments 590 19 609 Less: interest 66 1 67 Present value of lease liabilities $ 524 $ 18 $ 542 |
Finance Leases | Leases The components of the Company's lease expense are as follows: Three months ended Nine Months Ended (in millions) September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Lease expense: Operating lease cost $ 34 $ 33 $ 101 $ 99 Finance lease cost Amortization of right-of-use assets 3 3 9 9 Interest on lease liabilities — 1 1 1 Total finance lease cost 3 4 10 10 Short-term lease cost 1 1 2 4 Variable cost 10 8 27 25 Sublease income (2) (1) (4) (3) Net lease expense $ 46 $ 45 $ 136 $ 135 Lease assets and liabilities consist of the following: (in millions) Statement Line Classification September 26, 2020 December 31, 2019 Assets: Operating lease assets Operating lease assets $ 472 $ 554 Finance lease assets Property, plant, and equipment, net 30 41 $ 502 $ 595 Current liabilities: Operating lease liabilities Accrued liabilities $ 123 $ 122 Finance lease liabilities Current portion of long-term debt 11 13 $ 134 $ 135 Non-current liabilities: Operating lease liabilities Operating lease liabilities $ 401 $ 497 Finance lease liabilities Long-term debt 7 16 $ 408 $ 513 For the nine months ended September 26, 2020, the Company exercised a break option reducing the term of an International office lease by five years. This resulted in a reduction to both the right of use ("ROU") asset and lease liabilities by approximately $47 million. Other information related to leases is as follows: Nine Months Ended (in millions) September 26, 2020 September 28, 2019 Supplemental cash flow information: Net cash used for operating activities related to operating leases $ 116 $ 110 Net cash used for operating activities related to finance leases 1 1 Net cash used for financing activities related to finance leases 9 11 Assets obtained in exchange for lease liabilities: Operating leases $ 64 $ 69 (in millions) September 26, 2020 December 31, 2019 Weighted average remaining lease terms (years): Operating leases 6 7 Finance leases 2 2 Weighted average discount rate: Operating leases 3.31 % 3.61 % Finance leases 4.23 % 4.28 % Future lease payments as of September 26, 2020 are as follows: (in millions) Operating Leases Finance Leases Total Remainder of 2020 $ 29 $ 3 $ 32 2021 136 11 147 2022 120 5 125 2023 67 — 67 2024 54 — 54 Thereafter 184 — 184 Total lease payments 590 19 609 Less: interest 66 1 67 Present value of lease liabilities $ 524 $ 18 $ 542 |
Other Financial Data
Other Financial Data | 9 Months Ended |
Sep. 26, 2020 | |
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 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Other charges (income): Intangibles amortization (Note 15) $ 54 $ 52 $ 158 $ 154 Reorganization of business (Note 14) 10 15 48 27 Losses (gains) on legal settlements — (5) 9 (5) Fixed asset impairment — — 5 — Gain on sale of property, plant and equipment — — (50) — Acquisition-related transaction fees 5 1 8 4 $ 69 $ 63 $ 178 $ 180 During the nine months ended September 26, 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 Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Interest income (expense), net: Interest expense $ (60) $ (60) $ (175) $ (178) Interest income 2 6 8 13 $ (58) $ (54) $ (167) $ (165) Other, net: Net periodic pension and postretirement benefit (Note 8) $ 20 $ 17 $ 60 $ 50 Gain from the extinguishment of 2.00% senior convertible notes (Note 5) — 4 — 4 Losses from the extinguishment of long-term debt (Note 5) (56) (7) (56) (50) Investment impairments — (5) — (16) Foreign currency gain (loss) (15) 3 (19) (7) Gain (loss) on derivative instruments 10 (9) 6 (16) Gains on equity method investments 1 2 1 3 Fair value adjustments to equity investments (4) (18) 1 (3) Other 2 2 (1) 13 $ (42) $ (11) $ (8) $ (22) During the three and nine months ended September 28, 2019, the Company recorded investment impairment charges of $5 million and $16 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 Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Basic earnings per common share: Earnings $ 205 $ 267 $ 537 $ 625 Weighted average common shares outstanding 169.7 166.7 170.1 165.3 Per share amount $ 1.21 $ 1.60 $ 3.16 $ 3.78 Diluted earnings per common share: Earnings $ 205 $ 267 $ 537 $ 625 Weighted average common shares outstanding 169.7 166.7 170.1 165.3 Add effect of dilutive securities: Share-based awards 3.8 4.8 4.2 4.7 2.00% senior convertible notes — 4.9 — 5.7 1.75% senior convertible notes — — — — Diluted weighted average common shares outstanding 173.5 176.4 174.3 175.7 Per share amount $ 1.18 $ 1.51 $ 3.08 $ 3.56 For the three months ended September 26, 2020, the assumed exercise of 0.5 million options, including 0.2 million subject to market based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the nine months ended September 26, 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. In the computation of diluted earnings per common share for the three months ended September 28, 2019 the assumed exercise of 0.01 million options were excluded because their inclusion would have been antidilutive. In the computation of the diluted earnings per common share for the nine months ended September 28, 2019, the assumed exercise of 0.3 million options were excluded because their inclusion would have been antidilutive. As of September 26, 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 September 26, 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: September 26, 2020 December 31, 2019 Accounts receivable $ 1,228 $ 1,475 Less allowance for credit losses (73) (63) $ 1,155 $ 1,412 Inventories, Net Inventories, net, consist of the following: September 26, 2020 December 31, 2019 Finished goods $ 279 $ 209 Work-in-process and production materials 340 374 619 583 Less inventory reserves (130) (136) $ 489 $ 447 Other Current Assets Other current assets consist of the following: September 26, 2020 December 31, 2019 Current contract cost assets (Note 2) $ 25 $ 24 Tax-related deposits 65 77 Other 161 171 $ 251 $ 272 Property, Plant and Equipment, Net Property, plant and equipment, net, consists of the following: September 26, 2020 December 31, 2019 Land $ 6 $ 15 Leasehold improvements 415 410 Machinery and equipment 2,169 2,051 2,590 2,476 Less accumulated depreciation (1,614) (1,484) $ 976 $ 992 Depreciation expense for the three months ended September 26, 2020 and September 28, 2019 was $49 million and $47 million, respectively. Depreciation expense for the nine months ended September 26, 2020 and September 28, 2019 was $142 million and $136 million, respectively. Investments Investments consist of the following: September 26, 2020 December 31, 2019 Common stock $ 17 $ 25 Strategic investments, at cost 47 40 Company-owned life insurance policies 72 74 Equity method investments 18 20 $ 154 $ 159 Other Assets Other assets consist of the following: September 26, 2020 December 31, 2019 Defined benefit plan assets $ 279 $ 223 Non-current contract cost assets (Note 2) 101 107 Other 57 92 $ 437 $ 422 Accrued Liabilities Accrued liabilities consist of the following: September 26, 2020 December 31, 2019 Compensation $ 266 $ 347 Tax liabilities 59 95 Dividend payable 109 110 Trade liabilities 143 161 Operating lease liabilities (Note 3) 123 122 Other 505 521 $ 1,205 $ 1,356 Other Liabilities Other liabilities consist of the following: September 26, 2020 December 31, 2019 Defined benefit plans $ 1,472 $ 1,524 Non-current contract liabilities (Note 2) 266 274 Unrecognized tax benefits 54 53 Deferred income taxes 179 184 Other 255 241 $ 2,226 $ 2,276 Stockholders’ Equity (Deficit) Share Repurchase Program: During the three and nine months ended September 26, 2020, the Company paid an aggregate of $105 million and $441 million, including transaction costs, to repurchase approximately 0.7 million and 2.9 million shares at an average price of $147.35 and $152.79 per share, respectively. As of September 26, 2020, the Company had $820 million of authority available for future repurchases. Payment of Dividends: During the three months ended September 26, 2020 and September 28, 2019, the Company paid $109 million and $94 million, respectively, in cash dividends to holders of its common stock. During the nine months ended September 26, 2020 and September 28, 2019, the Company paid $327 million and $281 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 26, 2020 and September 28, 2019: Three Months Ended Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Foreign Currency Translation Adjustments: Balance at beginning of period $ (470) $ (437) $ (410) $ (444) Other comprehensive income (loss) before reclassification adjustment 34 (33) (27) (23) Tax expense (4) — (3) (3) Other comprehensive income (loss), net of tax 30 (33) (30) (26) Balance at end of period $ (440) $ (470) $ (440) $ (470) Defined Benefit Plans: Balance at beginning of period $ (2,005) $ (2,300) $ (2,030) $ (2,321) Reclassification adjustment - Actuarial net losses into Other income 20 16 58 50 Reclassification adjustment - Prior service benefits into Other expense (4) (4) (12) (11) Tax expense (4) (1) (9) (7) Other comprehensive income, net of tax 12 11 37 32 Balance at end of period $ (1,993) $ (2,289) $ (1,993) $ (2,289) Total Accumulated other comprehensive loss $ (2,433) $ (2,759) $ (2,433) $ (2,759) |
Debt and Credit Facilities
Debt and Credit Facilities | 9 Months Ended |
Sep. 26, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | Debt and Credit Facilities September 26, 2020 December 31, 2019 $2.2 billion unsecured revolving credit facility due April 2022 $ 200 $ — 3.75% senior notes due 2022 — 550 3.5% senior notes due 2023 323 597 4.0% senior notes due 2024 582 593 1.75% senior convertible notes due 2024 993 988 6.5% debentures due 2025 70 72 7.5% debentures due 2025 252 254 4.6% senior notes due 2028 692 691 6.5% debentures due 2028 24 24 4.6% senior notes due 2029 804 804 2.3% senior notes due 2030 892 — 6.625% senior notes due 2037 37 37 5.5% senior notes due 2044 396 396 5.22% debentures due 2097 92 91 Other long-term debt 19 35 5,376 5,132 Adjustments for unamortized gains on interest rate swap terminations (2) (3) Less: current portion (212) (16) Long-term debt $ 5,162 $ 5,113 As of September 26, 2020, the Company had a $2.2 billion syndicated, unsecured revolving credit facility scheduled to mature in April 2022 (the " 2017 Motorola Solutions Credit Agreement 2017 Motorola Solutions Credit Agreement 2017 Motorola Solutions Credit Agreement In August of 2020, the Company issued $900 million of 2.30% Senior notes due 2030. The Company recognized net proceeds of $892 million after debt issuance costs and debt discounts. A portion of these proceeds were then used to redeem $552 million in principal amount outstanding of the 3.75% Senior notes due 2022 for a redemption price of $582 million, excluding approximately $7 million of accrued interest. The remaining proceeds were used to repurchase $293 million in principal amount outstanding of its long-term debt under a tender offer, for a purchase price of $315 million, excluding approximately $5 million of accrued interest, all of which occurred during the three months ended September 26, 2020. After accelerating the amortization of debt issuance costs and debt discounts, the Company recognized a loss of approximately $56 million related to the redemption and the repurchase in Other, net within Other income (expense) in the Condensed Consolidated Statements of Operations. As of September 26, 2020, the Company had $1.0 billion of 1.75% senior convertible notes with Silver Lake, which mature in September 2024 ("New Senior Convertible Notes"). The notes are convertible anytime on or after two years from their issuance date, except in certain limited circumstances. The notes are convertible based on a conversion rate of 4.9140, as may be adjusted for dividends declared, per $1,000 principal amount (which is equal to an initial conversion price of $203.50 per share). The exercise price adjusts automatically for dividends. In the event of conversion, the Company intends to settle the principal amount of the New Senior Convertible Notes in cash. The Company has recorded a debt liability associated with the New Senior Convertible Notes by determining the fair value of an equivalent debt instrument without a conversion option. Using |
Risk Management
Risk Management | 9 Months Ended |
Sep. 26, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management | Risk Management Foreign Currency Risk As of September 26, 2020, the Company had outstanding foreign exchange contracts with notional amounts totaling $1.0 billion, compared to $1.1 billion outstanding at December 31, 2019. 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 26, 2020, and the corresponding positions as of December 31, 2019: Notional Amount Net Buy (Sell) by Currency September 26, 2020 December 31, 2019 Euro $ 196 $ 134 British pound 134 107 Norwegian krone 29 32 Australian dollar (93) (123) Chinese renminbi (77) (79) 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 26, 2020, all of the counterparties have investment grade credit ratings. As of September 26, 2020, the Company had $1 million of exposure to aggregate 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 26, 2020 and December 31, 2019: Fair Values of Derivative Instruments September 26, 2020 Other Current Assets Accrued Liabilities Derivatives designated as hedging instruments: Foreign exchange contracts $ — $ 2 Derivatives not designated as hedging instruments: Foreign exchange contracts 1 7 Total derivatives $ 1 $ 9 Fair Values of Derivative Instruments December 31, 2019 Other Current Assets Accrued Liabilities Derivatives designated as hedging instruments: Foreign exchange contracts $ 3 $ — Derivatives not designated as hedging instruments: Foreign exchange contracts 1 5 Total derivatives $ 4 $ 5 The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three and nine months ended September 26, 2020 and September 28, 2019: Three Months Ended Nine Months Ended Financial Statement Location Foreign Exchange Contracts September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Effective portion $ (5) $ 8 $ 3 $ 16 Accumulated other Forward points recognized — 2 2 5 Other income Undesignated derivatives recognized 10 (9) 6 (16) Other expense Net Investment Hedges The Company uses foreign exchange forward contracts with contract terms of 12 to 15 months to hedge against the effect of the British pound and the Euro exchange rate fluctuations against the U.S. dollar on a portion of its net investment in certain European operations. The Company recognizes changes in the fair value of the net investment hedges as a component of foreign currency translation adjustments within other comprehensive income to offset a portion of the change in translated value of the net investment being hedged, until the investment is sold or liquidated. As of September 26, 2020, the Company had €94 million of net investment hedges in certain Euro functional subsidiaries and £60 million of net investment hedges in certain British pound functional subsidiaries. The Company excludes the difference between the spot rate and the forward rate of the forward contract from its assessment of hedge effectiveness. The effect of the excluded components will be amortized on a straight line basis and recognized through interest expense. During the nine months ended September 26, 2020, the Company amortized $2 million of income from the excluded components through interest expense. During the three and nine months ended September 28, 2019, the Company amortized $2 million, and $5 million, respectively, of income from the excluded components through interest expense. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 26, 2020 | |
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 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Net earnings before income taxes $ 251 $ 348 $ 652 $ 808 Income tax expense 45 80 112 180 Effective tax rate 18 % 23 % 17 % 22 % During the three and nine months ended September 26, 2020, the Company recorded $45 million and $112 million of net tax expense, resulting in an effective tax rate of 18% and 17%, respectively. During the three and nine months ended September 28, 2019, the Company recorded $80 million and $180 million of net tax expense, resulting in an effective tax rate of 23% and 22%, respectively. The three and nine months ended September 26, 2020 and September 28, 2019 effective tax rates are different from the U.S. federal statutory tax rate of 21% due to state tax expense, offset primarily by tax benefits related to stock compensation and favorable U.S. return-to-provision adjustments. The effective tax rate for the three and nine months ended September 26, 2020 of 18% and 17%, respectively, is lower than the effective tax rate for the three and nine months ended |
Retirement and Other Employee B
Retirement and Other Employee Benefits | 9 Months Ended |
Sep. 26, 2020 | |
Retirement Benefits [Abstract] | |
Retirement and Other Employee Benefits | Retirement and Other Employee Benefits Pension and Postretirement Health Care Benefits Plans The net periodic 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 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Service cost $ — $ — $ — $ — $ — $ — Interest cost 36 50 7 9 — 1 Expected return on plan assets (57) (69) (21) (20) (3) (2) Amortization of: Unrecognized net loss 15 11 4 4 1 1 Unrecognized prior service benefit — — (1) — (3) (4) Net periodic pension benefits $ (6) $ (8) $ (11) $ (7) $ (5) $ (4) U.S. Pension Benefit Plans Non-U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Service cost $ — $ — $ 1 $ 2 $ — $ — Interest cost 108 152 21 29 1 2 Expected return on plan assets (169) (207) (63) (62) (8) (7) Amortization of: Unrecognized net loss 44 35 11 12 3 3 Unrecognized prior service benefit — — (1) — (11) (11) Net periodic pension benefits $ (17) $ (20) $ (31) $ (19) $ (15) $ (13) |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Sep. 26, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans Compensation expense for the Company’s share-based plans was as follows: Three Months Ended Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Share-based compensation expense included in: Costs of sales $ 3 $ 3 $ 12 $ 11 Selling, general and administrative expenses 18 16 57 46 Research and development expenditures 10 11 31 30 Share-based compensation expense included in Operating earnings 31 30 100 87 Tax benefit (5) (5) (17) (16) Share-based compensation expense, net of tax $ 26 $ 25 $ 83 $ 71 Decrease in basic earnings per share $ (0.15) $ (0.15) $ (0.49) $ (0.43) Decrease in diluted earnings per share $ (0.15) $ (0.14) $ (0.48) $ (0.40) During the nine months ended September 26, 2020, the Company granted 0.5 million restricted stock units ("RSUs"), 0.03 million performance stock units ("PSUs") and 0.1 million market stock units ("MSUs") with an aggregate grant-date fair value of $67 million, $7 million, and $9 million, respectively, and 0.2 million stock options and 0.1 million performance options ("POs") with an aggregate grant-date fair value of $6 million and $9 million, respectively. The share-based compensation expense will generally be recognized over the vesting period of three years. During the nine months ended September 26, 2020, the Company granted 0.1 million shares of restricted stock in connection with acquisitions, for an aggregate grant-date fair value of $9 million related to compensation withheld from the purchase prices that will be expensed over an average service period of two years. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 26, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company may hold certain fixed income securities, equity securities and derivatives, which are recognized and disclosed at fair value in the financial statements. 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 and is measured using the fair value hierarchy. This hierarchy prescribes 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 prescribed 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 26, 2020 and December 31, 2019 were as follows: September 26, 2020 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 1 $ 1 Common stock 17 — 17 Liabilities: Foreign exchange derivative contracts $ — $ 9 $ 9 December 31, 2019 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 4 $ 4 Common stock 25 — 25 Liabilities: Foreign exchange derivative contracts $ — $ 5 $ 5 The Company had no Level 3 holdings as of September 26, 2020 or December 31, 2019. At September 26, 2020 and December 31, 2019, the Company had $308 million and $322 million, respectively, of investments in money market government and U.S. treasury funds classified (Level 1) 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 26, 2020 and December 31, 2019 was $5.9 billion and $5.5 billion (Level 2), respectively. All other financial instruments are carried at cost, which is not materially different from the instruments’ fair values. |
Sales of Receivables
Sales of Receivables | 9 Months Ended |
Sep. 26, 2020 | |
Receivables [Abstract] | |
Sales of Receivables | Sales of Receivables 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 26, 2020 and September 28, 2019: Three Months Ended Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Accounts receivable sales proceeds $ 82 $ 4 $ 238 $ 31 Long-term receivables sales proceeds 45 56 115 132 Total proceeds from receivable sales $ 127 $ 60 $ 353 $ 163 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 26, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesLegal MattersOn February 14, 2020, the Company announced that a jury in the U.S. District Court for the Northern District of Illinois decided in the Company's favor in its trade secret theft and copyright infringement case against Hytera Communications Corporation Limited of Shenzhen, China; Hytera America, Inc.; and Hytera Communications America (West), Inc. (collectively, “Hytera”). In connection with this verdict, the jury awarded Motorola Solutions $345.8 million in compensatory damages and $418.8 million in punitive damages, for a total of $764.6 million. A motion for a new trial was filed by Hytera in April 2020. The Court denied the motion and upheld the damages awarded to the Company on October 20, 2020, subsequent to the quarter. Other post-trial motions are fully briefed and awaiting ruling, including the Company's motion for a permanent global injunction, as well as the Company's requests for attorneys' fees and increased damages to include post-trial amounts. Hytera America, Inc. and Hytera Communications America (West), Inc. each filed for Chapter 11 bankruptcy protection in May 2020; the Company filed motions to dismiss the bankruptcy proceedings in July 2020. As of the third quarter of 2020, the United States Bankruptcy Court granted a continuance of Hytera’s sale motion and the Company’s motion to dismiss Hytera’s bankruptcy. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 26, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The following table summarizes Net sales by segment: Three Months Ended Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Products and Systems Integration $ 1,163 $ 1,349 $ 3,124 $ 3,656 Software and Services 705 645 2,017 1,855 $ 1,868 $ 1,994 $ 5,141 $ 5,511 The following table summarizes the Operating earnings by segment: Three Months Ended Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Products and Systems Integration $ 164 $ 258 $ 305 $ 568 Software and Services 188 155 523 423 Operating earnings 352 413 828 991 Total other expense (101) (65) (176) (183) Earnings before income taxes $ 251 $ 348 $ 652 $ 808 |
Reorganization of Business
Reorganization of Business | 9 Months Ended |
Sep. 26, 2020 | |
Restructuring and Related Activities [Abstract] | |
Reorganization of Business | Reorganization of Business The Company maintains a formal Involuntary Severance Plan (the “Severance Plan”), which permits the Company to offer eligible employees severance benefits based on years of service and employment grade level in the event that employment is involuntarily terminated as a result of a reduction-in-force or restructuring. The Severance Plan includes defined formulas to calculate employees’ termination benefits. In addition to the Involuntary Severance Plan, during the nine months ended September 26, 2020, the Company accepted voluntary applications to its Severance Plan from a defined subset of employees within the United States. Voluntary applicants received termination benefits based on the formulas defined in the Severance Plan. However, termination benefits, which are normally different based on employment level grade and capped at nine months of salary, were equalized for all employment level grades and capped at a full year’s salary for the voluntary applicants. 2020 Charges During the three months ended September 26, 2020, the Company recorded net reorganization of business charges of $13 million including $10 million of charges in Other charges and $3 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $13 million were charges of $16 million related to employee separation, partially offset by $3 million of reversals for accruals no longer needed. During the nine months ended September 26, 2020, the Company recorded net reorganization of business charges of $72 million including $48 million of charges in Other charges and $24 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $72 million were charges of $85 million related to employee separation, partially offset by $13 million of reversals for accruals no longer needed. The following table displays the net charges incurred by segment: September 26, 2020 Three Months Ended Nine Months Ended Products and Systems Integration $ 10 $ 58 Software and Services 3 14 $ 13 $ 72 The following table displays a rollforward of the reorganization of business accruals established for employee separation costs from January 1, 2020 to September 26, 2020: January 1, 2020 Additional Adjustments Amount September 26, 2020 Employee separation costs $ 78 $ 85 $ (13) $ (63) $ 87 Employee Separation Costs At January 1, 2020, the Company had an accrual of $78 million for employee separation costs. The 2020 additional charges of $85 million represent severance costs for approximately 900 employees. The adjustment of $13 million reflects reversals for accruals no longer needed. The $63 million used reflects cash payments to severed employees. The remaining accrual of $87 million, which is included in Accrued liabilities in the Company’s Condensed Consolidated Balance Sheets at September 26, 2020, is expected to be paid, primarily within one year, to approximately 1,000 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments. 2019 Charges During the three months ended September 28, 2019, the Company recorded net reorganization of business charges of $18 million including $15 million of charges in Other charges and $3 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $18 million were charges of $19 million related to employee separation costs and $1 million of reversals for accruals no longer needed. During the nine months ended September 28, 2019, the Company recorded net reorganization of business charges of $37 million including $27 million of charges in Other charges and $10 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $37 million were charges of $48 million related to employee separation costs and $11 million of reversals for accruals no longer needed. The following table displays the net charges incurred by segment: September 28, 2019 Three Months Ended Nine Months Ended Products and Systems Integration $ 14 $ 29 Software and Services 4 8 $ 18 $ 37 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 26, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill On August 28, 2020, the Company acquired Callyo, a cloud-based mobile applications provider for law enforcement in North America for $63 million, inclusive of share-based compensation withheld at a fair value of $3 million that will be expensed over an average service period of two years. The acquisition was settled with $61 million in cash, net of cash acquired. This acquisition adds to Motorola Solutions’ existing command center software suite critical mobile technology capabilities that enable information to flow seamlessly from the field to the command center. The Company recognized $38 million of goodwill, $31 million of identifiable intangible assets, and $8 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $27 million of customer relationships and $4 million of developed technology that will be amortized over a period of fourteen On July 31, 2020, the Company acquired Pelco, a global provider of video security solutions for a purchase price of $110 million. The acquisition was settled with $108 million of cash, net of cash acquired. The acquisition demonstrates Motorola Solutions’ continued investment in video security and analytics, adding a broad range of products that can be used in a variety of commercial and industrial environments and use cases. The Company recognized $42 million of goodwill, $30 million of identifiable intangible assets, and $36 million of net assets. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $23 million of customer relationships, $4 million of developed technology, and $3 million of trade names that will be amortized over a period of fifteen two On June 16, 2020, the Company acquired IndigoVision for a purchase price of $37 million. The acquisition was settled with $35 million of cash, net of cash acquired and debt assumed. The acquisition complements the Company's video security and analytics portfolio, providing enhanced geographical reach across a wider customer base. The Company recognized $14 million of goodwill, $22 million of identifiable intangible assets, and $1 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible asset was classified as $22 million of customer relationships that will be amortized over a period of eleven years. The business is a part of both the Products and Systems Integration and Software and Services segments. The purchase accounting is not yet complete and as such the final allocation between income tax accounts, intangible assets, net assets and goodwill may be subject to change. On April 30, 2020, the Company acquired a cybersecurity services business for a purchase price of $32 million of cash, net of cash acquired. The Company recognized $23 million of goodwill, $10 million of identifiable intangible assets and $1 million of net liabilities. The goodwill is deductible for tax purposes. The identifiable intangible assets were classified as $8 million of customer relationships and $2 million of developed technology that will be amortized over a period of twelve years and three years, respectively. The acquisition expands the Company’s ability to assist customers with cybersecurity needs through vulnerability assessments, cybersecurity consulting, and managed services including security monitoring of network operations. The business is a part of the Software and Services segment. The purchase accounting is not yet complete and as such the final allocation between income tax accounts and goodwill may be subject to change. On March 3, 2020, the Company acquired a cybersecurity services business for $40 million, inclusive of share-based compensation withheld at a fair value of $6 million that will be expensed over a service period of two years. The acquisition was settled with $33 million of cash, net of cash acquired. The Company recognized $28 million of goodwill, $7 million of intangible assets and $2 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible asset was classified as a customer relationship that will be amortized over a period of thirteen years. The acquisition expands the Company’s ability to assist customers with cybersecurity needs through vulnerability assessments, cybersecurity consulting, managed services and remediation and response capabilities. The business is a part of the Software and Services segment. The purchase accounting is not yet complete and as such the final allocation between income tax accounts and goodwill may be subject to change. On October 16, 2019, the Company acquired a data solutions business for vehicle location information for a purchase price of $85 million in cash, net of cash acquired. The acquisition enhances the Company's video security platform by adding data to the Company’s existing LPR database within the Software and Services segment. The Company recognized $54 million of goodwill, $28 million of identifiable intangible assets, and $3 million of net assets. The goodwill is deductible for tax purposes. The identifiable intangible assets were classified as $22 million of customer relationships and $6 million of developed technology and will be amortized over a period of sixteen years and five years, respectively. The purchase accounting is not yet complete and as such the final allocation between income tax accounts and goodwill may be subject to change. On July 11, 2019, the Company acquired WatchGuard, a provider of in-car and body-worn video solutions for $271 million, inclusive of share-based compensation withheld at a fair value of $16 million that will be expensed over an average service period of two years. The acquisition was settled with $250 million, net of cash acquired. The acquisition expands the Company's video security solutions platform. The business is part of both the Products and Systems Integration and Software and Services segments. The Company recognized $156 million of goodwill, $63 million of identifiable intangible assets, and $31 million of net assets. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $33 million of customer relationships and $30 million of completed technology that will be amortized over a period of thirteen years and seven years, respectively. The purchase accounting was completed as of the third quarter of 2020. On March 11, 2019, the Company announced that it acquired Avtec, a provider of dispatch communication equipment for U.S. public safety and commercial customers for a purchase price of $136 million in cash, net of cash acquired. This acquisition expands the Company's commercial portfolio with new capabilities, allowing it to offer an enhanced platform for customers to communicate, coordinate resources, and secure their facilities. The business will be part of both the Products and Systems Integration and Software and Services segments. The Company recognized $68 million of goodwill, $64 million of identifiable intangible assets, and $4 million of net assets. The goodwill is deductible for tax purposes. The identifiable intangible assets were classified as $43 million of completed technology and $21 million of customer relationship intangibles and will be amortized over a period of 15 years. The purchase accounting was completed as of the third quarter of 2019. On January 7, 2019 , the Company announced that it acquired VaaS Intangible Assets Amortized intangible assets were comprised of the following: September 26, 2020 December 31, 2019 Gross Accumulated Gross Accumulated Completed technology $ 760 $ 193 $ 738 $ 148 Patents 2 2 2 2 Customer-related 1,284 613 1,222 518 Other intangibles 77 47 75 42 $ 2,123 $ 855 $ 2,037 $ 710 Amortization expense on intangible assets was $54 million and $158 million for the three and nine months ended September 26, 2020, respectively. Amortization expense on intangible assets was $52 million and $154 million for the three and nine months ended September 28, 2019, respectively. As of September 26, 2020, annual amortization expense is estimated to be $210 million in 2020, $208 million 2021, $206 million in 2022, $108 million in 2023, $83 million in 2024, and $73 million in 2025. Amortized intangible assets were comprised of the following by segment: September 26, 2020 December 31, 2019 Gross Accumulated Gross Accumulated Products and Systems Integration $ 690 $ 116 $ 652 $ 82 Software and Services 1,433 739 1,385 628 $ 2,123 $ 855 $ 2,037 $ 710 Goodwill The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2020 to September 26, 2020: Products and Systems Integration Software and Services Total Balance as of January 1, 2020 $ 973 $ 1,094 $ 2,067 Goodwill acquired 46 99 145 Foreign currency — (5) (5) Balance as of September 26, 2020 $ 1,019 $ 1,188 $ 2,207 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 26, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The condensed consolidated financial statements as of September 26, 2020 and for the three and nine months ended September 26, 2020 and September 28, 2019 include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to state fairly the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, Statements of Stockholders' Equity (Deficit), 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 United States 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, 2019. The results of operations for the three and nine months ended September 26, 2020 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 and Recently Adopted Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity," which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments. The new guidance removes the separation models for convertible debt with a cash conversion feature or a beneficial conversion feature. In addition, the new standard provides guidance on calculating the dilutive impact of convertible debt on earnings per share ("EPS"). The ASU clarifies that the average market price should be used to calculate the diluted EPS denominator when the exercise price or the number of shares that may be issued is variable. The ASU is effective for the Company on January 1, 2022, including interim periods, with early adoption permitted. The ASU permits the use of either a full or modified retrospective method of adoption. The Company is still evaluating the impact of adoption on its financial statements and disclosures. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740),” which simplifies the accounting for income taxes by removing certain exceptions and streamlining other areas of accounting for income taxes. The ASU is effective for the Company on January 1, 2021 with early adoption permitted. Portions of the amendment within the ASU require retrospective, modified retrospective or prospective adoption methods. The adoption of the ASU will not have a significant impact on the financial statement 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, 2021 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 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 the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. In November 2018, April 2019, May 2019 and November 2019, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," ASU No. 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief," and ASU No. 2019-11,"Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” which provided additional implementation guidance on the previously issued ASU. The Company adopted ASC 326 as of January 1, 2020 using a modified retrospective transition approach for all credit losses. Consequently, financial information was not updated and disclosures required under ASC 326 are not provided for dates and periods before January 1, 2020. The Company considered the impact of adoption by reviewing historical losses in conjunction with current and future economic conditions on the following financial assets: i) cash equivalents, ii) accounts receivable, iii) contract assets, and iv) long-term receivables. Historical losses for these financial assets were previously insignificant with the exception of accounts receivable. The Company estimates credit losses on accounts receivable based on historical losses and then takes into account estimates of current and future economic conditions. The Company’s historical loss model is based on past due customer receivable balances and considers past collection experience, historical write-offs as well as the customer’s overall financial condition. Customer receivables are considered past due if payments have not been received within the agreed invoice terms. These historical losses are aggregated based on the type of customer (Direct and Indirect) and the geographic region (North America and International). The adoption of this standard did not have a material impact to the Company's financial statements. The following table displays the rollforward of the allowance for credit losses on the Company's trade receivables: Balance at January 1, 2020 Charged to Earnings Used Adjustments* Balance at Allowance for credit losses $ 63 $ 38 $ (26) $ (2) $ 73 *Adjustments include translation adjustments |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounts Receivable, Allowance for Credit Loss | The following table displays the rollforward of the allowance for credit losses on the Company's trade receivables: Balance at January 1, 2020 Charged to Earnings Used Adjustments* Balance at Allowance for credit losses $ 63 $ 38 $ (26) $ (2) $ 73 *Adjustments include translation adjustments |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
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 26, 2020 and September 28, 2019, consistent with the information reviewed by our chief operating decision maker for evaluating the financial performance of the Company's segments: Three Months Ended September 26, 2020 September 28, 2019 Products and Systems Integration Software and Services Products and Systems Integration Software and Services Regions: North America $ 863 $ 405 $ 980 $ 364 International 300 300 369 281 $ 1,163 $ 705 $ 1,349 $ 645 Major Products and Services: Devices $ 719 $ — $ 896 $ — Systems and Systems Integration 444 — 453 — Services — 514 — 479 Software — 191 — 166 $ 1,163 $ 705 $ 1,349 $ 645 Customer Type: Direct $ 733 $ 637 $ 860 $ 602 Indirect 430 68 489 43 $ 1,163 $ 705 $ 1,349 $ 645 Nine Months Ended September 26, 2020 September 28, 2019 Products and Systems Integration Software and Services Products and Systems Integration Software and Services Regions: North America $ 2,330 $ 1,146 $ 2,646 $ 1,026 International 794 871 1,010 829 $ 3,124 $ 2,017 $ 3,656 $ 1,855 Major Products and Services: Devices $ 1,921 $ — $ 2,391 $ — Systems and Systems Integration 1,203 — 1,265 — Services — 1,490 — 1,400 Software — 527 — 455 $ 3,124 $ 2,017 $ 3,656 $ 1,855 Customer Type: Direct $ 2,008 $ 1,869 $ 2,289 $ 1,737 Indirect 1,116 148 1,367 118 $ 3,124 $ 2,017 $ 3,656 $ 1,855 |
Contract Balances | September 26, 2020 December 31, 2019 Accounts receivable, net $ 1,155 $ 1,412 Contract assets 1,069 1,046 Contract liabilities 1,359 1,449 Non-current contract liabilities 266 274 |
Contract Cost Balances | September 26, 2020 December 31, 2019 Current contract cost assets $ 25 $ 24 Non-current contract cost assets 101 107 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Leases [Abstract] | |
Components of Lease Expense and Other Information | The components of the Company's lease expense are as follows: Three months ended Nine Months Ended (in millions) September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Lease expense: Operating lease cost $ 34 $ 33 $ 101 $ 99 Finance lease cost Amortization of right-of-use assets 3 3 9 9 Interest on lease liabilities — 1 1 1 Total finance lease cost 3 4 10 10 Short-term lease cost 1 1 2 4 Variable cost 10 8 27 25 Sublease income (2) (1) (4) (3) Net lease expense $ 46 $ 45 $ 136 $ 135 Other information related to leases is as follows: Nine Months Ended (in millions) September 26, 2020 September 28, 2019 Supplemental cash flow information: Net cash used for operating activities related to operating leases $ 116 $ 110 Net cash used for operating activities related to finance leases 1 1 Net cash used for financing activities related to finance leases 9 11 Assets obtained in exchange for lease liabilities: Operating leases $ 64 $ 69 (in millions) September 26, 2020 December 31, 2019 Weighted average remaining lease terms (years): Operating leases 6 7 Finance leases 2 2 Weighted average discount rate: Operating leases 3.31 % 3.61 % Finance leases 4.23 % 4.28 % |
Lease Assets and Liabilities | Lease assets and liabilities consist of the following: (in millions) Statement Line Classification September 26, 2020 December 31, 2019 Assets: Operating lease assets Operating lease assets $ 472 $ 554 Finance lease assets Property, plant, and equipment, net 30 41 $ 502 $ 595 Current liabilities: Operating lease liabilities Accrued liabilities $ 123 $ 122 Finance lease liabilities Current portion of long-term debt 11 13 $ 134 $ 135 Non-current liabilities: Operating lease liabilities Operating lease liabilities $ 401 $ 497 Finance lease liabilities Long-term debt 7 16 $ 408 $ 513 |
Future Lease Payments, Operating | Future lease payments as of September 26, 2020 are as follows: (in millions) Operating Leases Finance Leases Total Remainder of 2020 $ 29 $ 3 $ 32 2021 136 11 147 2022 120 5 125 2023 67 — 67 2024 54 — 54 Thereafter 184 — 184 Total lease payments 590 19 609 Less: interest 66 1 67 Present value of lease liabilities $ 524 $ 18 $ 542 |
Future Lease Payments, Finance | Future lease payments as of September 26, 2020 are as follows: (in millions) Operating Leases Finance Leases Total Remainder of 2020 $ 29 $ 3 $ 32 2021 136 11 147 2022 120 5 125 2023 67 — 67 2024 54 — 54 Thereafter 184 — 184 Total lease payments 590 19 609 Less: interest 66 1 67 Present value of lease liabilities $ 524 $ 18 $ 542 |
Other Financial Data (Tables)
Other Financial Data (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
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 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Other charges (income): Intangibles amortization (Note 15) $ 54 $ 52 $ 158 $ 154 Reorganization of business (Note 14) 10 15 48 27 Losses (gains) on legal settlements — (5) 9 (5) Fixed asset impairment — — 5 — Gain on sale of property, plant and equipment — — (50) — Acquisition-related transaction fees 5 1 8 4 $ 69 $ 63 $ 178 $ 180 |
Other Income (Expense) | Interest expense, net, and Other, net, both included in Other income (expense), consist of the following: Three Months Ended Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Interest income (expense), net: Interest expense $ (60) $ (60) $ (175) $ (178) Interest income 2 6 8 13 $ (58) $ (54) $ (167) $ (165) Other, net: Net periodic pension and postretirement benefit (Note 8) $ 20 $ 17 $ 60 $ 50 Gain from the extinguishment of 2.00% senior convertible notes (Note 5) — 4 — 4 Losses from the extinguishment of long-term debt (Note 5) (56) (7) (56) (50) Investment impairments — (5) — (16) Foreign currency gain (loss) (15) 3 (19) (7) Gain (loss) on derivative instruments 10 (9) 6 (16) Gains on equity method investments 1 2 1 3 Fair value adjustments to equity investments (4) (18) 1 (3) Other 2 2 (1) 13 $ (42) $ (11) $ (8) $ (22) |
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 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Basic earnings per common share: Earnings $ 205 $ 267 $ 537 $ 625 Weighted average common shares outstanding 169.7 166.7 170.1 165.3 Per share amount $ 1.21 $ 1.60 $ 3.16 $ 3.78 Diluted earnings per common share: Earnings $ 205 $ 267 $ 537 $ 625 Weighted average common shares outstanding 169.7 166.7 170.1 165.3 Add effect of dilutive securities: Share-based awards 3.8 4.8 4.2 4.7 2.00% senior convertible notes — 4.9 — 5.7 1.75% senior convertible notes — — — — Diluted weighted average common shares outstanding 173.5 176.4 174.3 175.7 Per share amount $ 1.18 $ 1.51 $ 3.08 $ 3.56 |
Accounts Receivable, Net | Accounts receivable, net, consists of the following: September 26, 2020 December 31, 2019 Accounts receivable $ 1,228 $ 1,475 Less allowance for credit losses (73) (63) $ 1,155 $ 1,412 |
Inventories, Net | Inventories, net, consist of the following: September 26, 2020 December 31, 2019 Finished goods $ 279 $ 209 Work-in-process and production materials 340 374 619 583 Less inventory reserves (130) (136) $ 489 $ 447 |
Other Current Assets | Other current assets consist of the following: September 26, 2020 December 31, 2019 Current contract cost assets (Note 2) $ 25 $ 24 Tax-related deposits 65 77 Other 161 171 $ 251 $ 272 |
Property, Plant and Equipment, Net | Property, plant and equipment, net, consists of the following: September 26, 2020 December 31, 2019 Land $ 6 $ 15 Leasehold improvements 415 410 Machinery and equipment 2,169 2,051 2,590 2,476 Less accumulated depreciation (1,614) (1,484) $ 976 $ 992 |
Investments | Investments consist of the following: September 26, 2020 December 31, 2019 Common stock $ 17 $ 25 Strategic investments, at cost 47 40 Company-owned life insurance policies 72 74 Equity method investments 18 20 $ 154 $ 159 |
Other Assets | Other assets consist of the following: September 26, 2020 December 31, 2019 Defined benefit plan assets $ 279 $ 223 Non-current contract cost assets (Note 2) 101 107 Other 57 92 $ 437 $ 422 |
Accrued Liabilities | Accrued liabilities consist of the following: September 26, 2020 December 31, 2019 Compensation $ 266 $ 347 Tax liabilities 59 95 Dividend payable 109 110 Trade liabilities 143 161 Operating lease liabilities (Note 3) 123 122 Other 505 521 $ 1,205 $ 1,356 |
Other Liabilities | Other liabilities consist of the following: September 26, 2020 December 31, 2019 Defined benefit plans $ 1,472 $ 1,524 Non-current contract liabilities (Note 2) 266 274 Unrecognized tax benefits 54 53 Deferred income taxes 179 184 Other 255 241 $ 2,226 $ 2,276 |
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 26, 2020 and September 28, 2019: Three Months Ended Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Foreign Currency Translation Adjustments: Balance at beginning of period $ (470) $ (437) $ (410) $ (444) Other comprehensive income (loss) before reclassification adjustment 34 (33) (27) (23) Tax expense (4) — (3) (3) Other comprehensive income (loss), net of tax 30 (33) (30) (26) Balance at end of period $ (440) $ (470) $ (440) $ (470) Defined Benefit Plans: Balance at beginning of period $ (2,005) $ (2,300) $ (2,030) $ (2,321) Reclassification adjustment - Actuarial net losses into Other income 20 16 58 50 Reclassification adjustment - Prior service benefits into Other expense (4) (4) (12) (11) Tax expense (4) (1) (9) (7) Other comprehensive income, net of tax 12 11 37 32 Balance at end of period $ (1,993) $ (2,289) $ (1,993) $ (2,289) Total Accumulated other comprehensive loss $ (2,433) $ (2,759) $ (2,433) $ (2,759) |
Debt and Credit Facilities (Tab
Debt and Credit Facilities (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | September 26, 2020 December 31, 2019 $2.2 billion unsecured revolving credit facility due April 2022 $ 200 $ — 3.75% senior notes due 2022 — 550 3.5% senior notes due 2023 323 597 4.0% senior notes due 2024 582 593 1.75% senior convertible notes due 2024 993 988 6.5% debentures due 2025 70 72 7.5% debentures due 2025 252 254 4.6% senior notes due 2028 692 691 6.5% debentures due 2028 24 24 4.6% senior notes due 2029 804 804 2.3% senior notes due 2030 892 — 6.625% senior notes due 2037 37 37 5.5% senior notes due 2044 396 396 5.22% debentures due 2097 92 91 Other long-term debt 19 35 5,376 5,132 Adjustments for unamortized gains on interest rate swap terminations (2) (3) Less: current portion (212) (16) Long-term debt $ 5,162 $ 5,113 |
Risk Management (Tables)
Risk Management (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
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 26, 2020, and the corresponding positions as of December 31, 2019: Notional Amount Net Buy (Sell) by Currency September 26, 2020 December 31, 2019 Euro $ 196 $ 134 British pound 134 107 Norwegian krone 29 32 Australian dollar (93) (123) Chinese renminbi (77) (79) |
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 26, 2020 and December 31, 2019: Fair Values of Derivative Instruments September 26, 2020 Other Current Assets Accrued Liabilities Derivatives designated as hedging instruments: Foreign exchange contracts $ — $ 2 Derivatives not designated as hedging instruments: Foreign exchange contracts 1 7 Total derivatives $ 1 $ 9 Fair Values of Derivative Instruments December 31, 2019 Other Current Assets Accrued Liabilities Derivatives designated as hedging instruments: Foreign exchange contracts $ 3 $ — Derivatives not designated as hedging instruments: Foreign exchange contracts 1 5 Total derivatives $ 4 $ 5 |
Summary of Derivative Instruments and The Effect on the Condensed Consolidated Statements Of Operations | The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three and nine months ended September 26, 2020 and September 28, 2019: Three Months Ended Nine Months Ended Financial Statement Location Foreign Exchange Contracts September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Effective portion $ (5) $ 8 $ 3 $ 16 Accumulated other Forward points recognized — 2 2 5 Other income Undesignated derivatives recognized 10 (9) 6 (16) Other expense |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
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 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Net earnings before income taxes $ 251 $ 348 $ 652 $ 808 Income tax expense 45 80 112 180 Effective tax rate 18 % 23 % 17 % 22 % |
Retirement and Other Employee_2
Retirement and Other Employee Benefits (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Plan Costs | The net periodic 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 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Service cost $ — $ — $ — $ — $ — $ — Interest cost 36 50 7 9 — 1 Expected return on plan assets (57) (69) (21) (20) (3) (2) Amortization of: Unrecognized net loss 15 11 4 4 1 1 Unrecognized prior service benefit — — (1) — (3) (4) Net periodic pension benefits $ (6) $ (8) $ (11) $ (7) $ (5) $ (4) U.S. Pension Benefit Plans Non-U.S. Pension Benefit Plans Postretirement Health Care Benefits Plan Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Service cost $ — $ — $ 1 $ 2 $ — $ — Interest cost 108 152 21 29 1 2 Expected return on plan assets (169) (207) (63) (62) (8) (7) Amortization of: Unrecognized net loss 44 35 11 12 3 3 Unrecognized prior service benefit — — (1) — (11) (11) Net periodic pension benefits $ (17) $ (20) $ (31) $ (19) $ (15) $ (13) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Compensation Expense | Compensation expense for the Company’s share-based plans was as follows: Three Months Ended Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Share-based compensation expense included in: Costs of sales $ 3 $ 3 $ 12 $ 11 Selling, general and administrative expenses 18 16 57 46 Research and development expenditures 10 11 31 30 Share-based compensation expense included in Operating earnings 31 30 100 87 Tax benefit (5) (5) (17) (16) Share-based compensation expense, net of tax $ 26 $ 25 $ 83 $ 71 Decrease in basic earnings per share $ (0.15) $ (0.15) $ (0.49) $ (0.43) Decrease in diluted earnings per share $ (0.15) $ (0.14) $ (0.48) $ (0.40) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
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 26, 2020 and December 31, 2019 were as follows: September 26, 2020 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 1 $ 1 Common stock 17 — 17 Liabilities: Foreign exchange derivative contracts $ — $ 9 $ 9 December 31, 2019 Level 1 Level 2 Total Assets: Foreign exchange derivative contracts $ — $ 4 $ 4 Common stock 25 — 25 Liabilities: Foreign exchange derivative contracts $ — $ 5 $ 5 |
Sales of Receivables (Tables)
Sales of Receivables (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Receivables [Abstract] | |
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 26, 2020 and September 28, 2019: Three Months Ended Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Accounts receivable sales proceeds $ 82 $ 4 $ 238 $ 31 Long-term receivables sales proceeds 45 56 115 132 Total proceeds from receivable sales $ 127 $ 60 $ 353 $ 163 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
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 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Products and Systems Integration $ 1,163 $ 1,349 $ 3,124 $ 3,656 Software and Services 705 645 2,017 1,855 $ 1,868 $ 1,994 $ 5,141 $ 5,511 The following table summarizes the Operating earnings by segment: Three Months Ended Nine Months Ended September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 Products and Systems Integration $ 164 $ 258 $ 305 $ 568 Software and Services 188 155 523 423 Operating earnings 352 413 828 991 Total other expense (101) (65) (176) (183) Earnings before income taxes $ 251 $ 348 $ 652 $ 808 |
Reorganization of Business (Tab
Reorganization of Business (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Reportable Segment | The following table displays the net charges incurred by segment: September 26, 2020 Three Months Ended Nine Months Ended Products and Systems Integration $ 10 $ 58 Software and Services 3 14 $ 13 $ 72 The following table displays the net charges incurred by segment: September 28, 2019 Three Months Ended Nine Months Ended Products and Systems Integration $ 14 $ 29 Software and Services 4 8 $ 18 $ 37 |
Reorganization of Businesses Accruals | The following table displays a rollforward of the reorganization of business accruals established for employee separation costs from January 1, 2020 to September 26, 2020: January 1, 2020 Additional Adjustments Amount September 26, 2020 Employee separation costs $ 78 $ 85 $ (13) $ (63) $ 87 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Amortized intangible assets were comprised of the following: September 26, 2020 December 31, 2019 Gross Accumulated Gross Accumulated Completed technology $ 760 $ 193 $ 738 $ 148 Patents 2 2 2 2 Customer-related 1,284 613 1,222 518 Other intangibles 77 47 75 42 $ 2,123 $ 855 $ 2,037 $ 710 |
Amortized Intangible Assets | Amortized intangible assets were comprised of the following by segment: September 26, 2020 December 31, 2019 Gross Accumulated Gross Accumulated Products and Systems Integration $ 690 $ 116 $ 652 $ 82 Software and Services 1,433 739 1,385 628 $ 2,123 $ 855 $ 2,037 $ 710 |
Goodwill | The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2020 to September 26, 2020: Products and Systems Integration Software and Services Total Balance as of January 1, 2020 $ 973 $ 1,094 $ 2,067 Goodwill acquired 46 99 145 Foreign currency — (5) (5) Balance as of September 26, 2020 $ 1,019 $ 1,188 $ 2,207 |
Basis of Presentation - Recent
Basis of Presentation - Recent Acquisitions (Details) - USD ($) shares in Millions, $ in Millions | Aug. 28, 2020 | Jul. 31, 2020 | Jun. 16, 2020 | Apr. 30, 2020 | Mar. 03, 2020 | Oct. 16, 2019 | Jul. 11, 2019 | Mar. 11, 2019 | Jan. 07, 2019 |
Callyo | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 63 | ||||||||
Share-based compensation acquired | $ 3 | ||||||||
Share-based compensation withheld, average service period | 2 years | ||||||||
Cash paid for acquisition, net of cash acquired | $ 61 | ||||||||
Pelco, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 110 | ||||||||
Cash paid for acquisition, net of cash acquired | $ 108 | ||||||||
IndigoVision | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 37 | ||||||||
Cash paid for acquisition, net of cash acquired | $ 35 | ||||||||
Cybersecurity Services Business | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 40 | ||||||||
Share-based compensation acquired | $ 6 | ||||||||
Share-based compensation withheld, average service period | 2 years | ||||||||
Cash paid for acquisition, net of cash acquired | $ 32 | $ 33 | |||||||
Data Solutions Business | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 85 | ||||||||
WatchGuard | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 271 | ||||||||
Share-based compensation acquired | $ 16 | ||||||||
Share-based compensation withheld, average service period | 2 years | ||||||||
Cash paid for acquisition, net of cash acquired | $ 250 | ||||||||
Avtec | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash paid for acquisition, net of cash acquired | $ 136 | ||||||||
VaaS | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 445 | ||||||||
Share-based compensation acquired | $ 38 | ||||||||
Share-based compensation withheld, average service period | 1 year | ||||||||
Cash paid for acquisition, net of cash acquired | $ 231 | ||||||||
Shares issued (in shares) | 1.4 | ||||||||
Share value | $ 160 | ||||||||
Total consideration | $ 391 |
Basis of Presentation - Summary
Basis of Presentation - Summary of Credit Loss Adjustments (Details) $ in Millions | 9 Months Ended |
Sep. 26, 2020USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance | $ 63 |
Charged to Earnings | 38 |
Used | (26) |
Adjustments | (2) |
Ending balance | $ 73 |
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. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,868 | $ 1,994 | $ 5,141 | $ 5,511 |
Products and Systems Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,163 | 1,349 | 3,124 | 3,656 |
Products and Systems Integration | Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 733 | 860 | 2,008 | 2,289 |
Products and Systems Integration | Indirect | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 430 | 489 | 1,116 | 1,367 |
Products and Systems Integration | Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 719 | 896 | 1,921 | 2,391 |
Products and Systems Integration | Systems and Systems Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 444 | 453 | 1,203 | 1,265 |
Products and Systems Integration | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Products and Systems Integration | Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Products and Systems Integration | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 863 | 980 | 2,330 | 2,646 |
Products and Systems Integration | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 300 | 369 | 794 | 1,010 |
Software and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 705 | 645 | 2,017 | 1,855 |
Software and Services | Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 637 | 602 | 1,869 | 1,737 |
Software and Services | Indirect | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 68 | 43 | 148 | 118 |
Software and Services | Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Software and Services | Systems and Systems Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Software and Services | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 514 | 479 | 1,490 | 1,400 |
Software and Services | Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 191 | 166 | 527 | 455 |
Software and Services | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 405 | 364 | 1,146 | 1,026 |
Software and Services | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 300 | $ 281 | $ 871 | $ 829 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Remaining Performance Obligation, Future Expected (Details) $ in Billions | Sep. 26, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 6.8 |
Products and Systems Integration | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | 2.9 |
Software and Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | 3.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-27 | Products and Systems Integration | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 1.4 |
Expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-27 | Managed and Support Services | Software and Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 1.4 |
Expected timing of satisfaction, period | 12 months |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 31, 2019 | |
Contract with Customer, Asset and Liability [Abstract] | |||||
Accounts receivable, net | $ 1,155 | $ 1,155 | $ 1,412 | ||
Contract assets | 1,069 | 1,069 | 1,046 | ||
Contract liabilities | 1,359 | 1,359 | 1,449 | ||
Non-current contract liabilities | 266 | 266 | $ 274 | ||
Contract with customer, liability, revenue recognized | 349 | $ 342 | 807 | $ 783 | |
Contract with customer, performance obligation adjustments | 12 | 26 | 48 | 42 | |
Impairment losses | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Contract Cost Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||||
Current contract cost assets | $ 25 | $ 25 | $ 24 | ||
Non-current contract cost assets | 101 | 101 | $ 107 | ||
Contract cost, amortization | $ 13 | $ 10 | $ 35 | $ 32 |
Leases - Operating Expense (Det
Leases - Operating Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Lease expense: | ||||
Operating lease cost | $ 34 | $ 33 | $ 101 | $ 99 |
Finance lease cost | ||||
Amortization of right-of-use assets | 3 | 3 | 9 | 9 |
Interest on lease liabilities | 0 | 1 | 1 | 1 |
Total finance lease cost | 3 | 4 | 10 | 10 |
Short-term lease cost | 1 | 1 | 2 | 4 |
Variable cost | 10 | 8 | 27 | 25 |
Sublease income | (2) | (1) | (4) | (3) |
Net lease expense | $ 46 | $ 45 | $ 136 | $ 135 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Assets: | ||
Operating lease assets | $ 472 | $ 554 |
Finance lease assets | 30 | 41 |
Total lease assets | $ 502 | $ 595 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization |
Current liabilities: | ||
Operating lease liabilities | $ 123 | $ 122 |
Finance lease liabilities | 11 | 13 |
Total lease liabilities, current | $ 134 | $ 135 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | us-gaap:AccruedLiabilitiesCurrent |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:DebtCurrent | us-gaap:DebtCurrent |
Non-current liabilities: | ||
Operating lease liabilities | $ 401 | $ 497 |
Finance lease liabilities | 7 | 16 |
Total lease liabilities, non-current | $ 408 | $ 513 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtNoncurrent | us-gaap:LongTermDebtNoncurrent |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 26, 2020USD ($) | |
Leases [Abstract] | |
Break option reduction, term of contract | 5 years |
Reduction of ROU asset due to break option | $ 47 |
Reduction of ROU liabilities due to break option | $ 47 |
Leases - Cash Flows (Details)
Leases - Cash Flows (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 26, 2020 | Sep. 28, 2019 | |
Supplemental cash flow information: | ||
Net cash used for operating activities related to operating leases | $ 116 | $ 110 |
Net cash used for operating activities related to finance leases | 1 | 1 |
Net cash used for financing activities related to finance leases | 9 | 11 |
Assets obtained in exchange for lease liabilities: | ||
Operating leases | $ 64 | $ 69 |
Leases - Terms (Details)
Leases - Terms (Details) | Sep. 26, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted average remaining lease terms, operating leases | 6 years | 7 years |
Weighted average remaining lease terms, finance leases | 2 years | 2 years |
Weighted average discount rate, operating leases | 3.31% | 3.61% |
Weighted average discount rate, finance leases | 4.23% | 4.28% |
Leases - Future Payments (Detai
Leases - Future Payments (Details) $ in Millions | Sep. 26, 2020USD ($) |
Operating Leases | |
Remainder of 2020 | $ 29 |
2021 | 136 |
2022 | 120 |
2023 | 67 |
2024 | 54 |
Thereafter | 184 |
Total lease payments | 590 |
Less: interest | 66 |
Present value of lease liabilities | 524 |
Finance Leases | |
Remainder of 2020 | 3 |
2021 | 11 |
2022 | 5 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total lease payments | 19 |
Less: interest | 1 |
Present value of lease liabilities | 18 |
Total | |
Remainder of 2020 | 32 |
2021 | 147 |
2022 | 125 |
2023 | 67 |
2024 | 54 |
Thereafter | 184 |
Total lease payments | 609 |
Less: interest | 67 |
Present value of lease liabilities | $ 542 |
Other Financial Data - Other Ch
Other Financial Data - Other Charges (Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Other charges (income): | ||||
Intangibles amortization (Note 15) | $ 54 | $ 52 | $ 158 | $ 154 |
Reorganization of business (Note 14) | 10 | 15 | 48 | 27 |
Losses (gains) on legal settlements | 0 | (5) | 9 | (5) |
Fixed asset impairment | 0 | 0 | 5 | 0 |
Gain on sale of property, plant and equipment | 0 | 0 | (50) | 0 |
Acquisition-related transaction fees | 5 | 1 | 8 | 4 |
Other charges | $ 69 | $ 63 | $ 178 | $ 180 |
Other Financial Data - Other _2
Other Financial Data - Other Charges (Income) - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Gain on the sale of a manufacturing facility | $ 0 | $ 0 | $ 50 | $ 0 |
Other Financial Data - Other In
Other Financial Data - Other Income (Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Interest income (expense), net: | ||||
Interest expense | $ (60) | $ (60) | $ (175) | $ (178) |
Interest income | 2 | 6 | 8 | 13 |
Interest income (expense), net | (58) | (54) | (167) | (165) |
Other, net: | ||||
Net periodic pension and postretirement benefit (Note 8) | 20 | 17 | 60 | 50 |
Investment impairments | 0 | (5) | 0 | (16) |
Foreign currency gain (loss) | (15) | 3 | (19) | (7) |
Gain (loss) on derivative instruments | 10 | (9) | 6 | (16) |
Gains on equity method investments | 1 | 2 | 1 | 3 |
Fair value adjustments to equity investments | (4) | (18) | 1 | (3) |
Other | 2 | 2 | (1) | 13 |
Total other income (expense) | $ (42) | (11) | $ (8) | (22) |
2.00% senior convertible notes | Convertible Notes | ||||
Other, net: | ||||
Interest rate | 2.00% | 2.00% | ||
Convertible Notes | ||||
Other, net: | ||||
Gain (loss) from the extinguishment of senior convertible notes and long-term debt | $ 0 | 4 | $ 0 | 4 |
Long-term Debt, Excluding Convertible Debt | ||||
Other, net: | ||||
Gain (loss) from the extinguishment of senior convertible notes and long-term debt | $ (56) | $ (7) | $ (56) | $ (50) |
Other Financial Data - Other _3
Other Financial Data - Other Income (Expense) - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Investment impairments | $ 0 | $ 5 | $ 0 | $ 16 |
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. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Basic earnings (loss) per common share: | ||||
Earnings | $ 205 | $ 267 | $ 537 | $ 625 |
Weighted average common shares outstanding (in shares) | 169.7 | 166.7 | 170.1 | 165.3 |
Basic earnings per share amount (in USD per share) | $ 1.21 | $ 1.60 | $ 3.16 | $ 3.78 |
Diluted earnings per common share: | ||||
Earnings | $ 205 | $ 267 | $ 537 | $ 625 |
Weighted average common shares outstanding (in shares) | 169.7 | 166.7 | 170.1 | 165.3 |
Add effect of dilutive securities: | ||||
Share-based awards (in shares) | 3.8 | 4.8 | 4.2 | 4.7 |
Diluted weighted average common shares outstanding (in shares) | 173.5 | 176.4 | 174.3 | 175.7 |
Per share amount (in USD per share) | $ 1.18 | $ 1.51 | $ 3.08 | $ 3.56 |
2.00% senior convertible notes | ||||
Add effect of dilutive securities: | ||||
Senior convertible notes (in shares) | 0 | 4.9 | 0 | 5.7 |
2.00% senior convertible notes | Convertible Notes | ||||
Add effect of dilutive securities: | ||||
Interest rate | 2.00% | 2.00% | ||
1.75% senior convertible notes | ||||
Add effect of dilutive securities: | ||||
Senior convertible notes (in shares) | 0 | 0 | 0 | 0 |
1.75% senior convertible notes | Convertible Notes | ||||
Add effect of dilutive securities: | ||||
Interest rate | 1.75% | 1.75% |
Other Financial Data - Earnin_2
Other Financial Data - Earnings Per Common Share - Additional Information (Details) $ / shares in Units, shares in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020USD ($)$ / sharesshares | Sep. 28, 2019shares | Sep. 26, 2020USD ($)$ / sharesshares | Sep. 28, 2019shares | Sep. 05, 2019$ / shares | |
Convertible Notes | 1.75% senior convertible notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument face amount | $ | $ 1,000,000,000 | $ 1,000,000,000 | |||
Interest rate | 1.75% | 1.75% | |||
Conversion rate | 0.0049140 | ||||
Conversion price (in USD per share) | $ / shares | $ 203.50 | $ 203.50 | $ 203.50 | ||
Stock Options | |||||
Debt Instrument [Line Items] | |||||
Securities excluded from computation of dilutive shares due to antidilutive nature (in shares) | 500 | 10 | 400 | 300 | |
Performance Options | |||||
Debt Instrument [Line Items] | |||||
Securities excluded from computation of dilutive shares due to antidilutive nature (in shares) | 200 | 100 |
Other Financial Data - Accounts
Other Financial Data - Accounts Receivable, Net (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 1,228 | $ 1,475 |
Less allowance for credit losses | (73) | (63) |
Accounts receivable, net | $ 1,155 | $ 1,412 |
Other Financial Data - Inventor
Other Financial Data - Inventories, Net (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Inventory, Net [Abstract] | ||
Finished goods | $ 279 | $ 209 |
Work-in-process and production materials | 340 | 374 |
Inventories, gross | 619 | 583 |
Less inventory reserves | (130) | (136) |
Inventories, net | $ 489 | $ 447 |
Other Financial Data - Other Cu
Other Financial Data - Other Current Assets (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Other Current Assets [Abstract] | ||
Current contract cost assets (Note 2) | $ 25 | $ 24 |
Tax-related deposits | 65 | 77 |
Other | 161 | 171 |
Other current assets | $ 251 | $ 272 |
Other Financial Data - Property
Other Financial Data - Property, Plant And Equipment, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |||||
Land | $ 6 | $ 6 | $ 15 | ||
Leasehold improvements | 415 | 415 | 410 | ||
Machinery and equipment | 2,169 | 2,169 | 2,051 | ||
Property, plant and equipment, gross | 2,590 | 2,590 | 2,476 | ||
Less accumulated depreciation | (1,614) | (1,614) | (1,484) | ||
Property, plant and equipment, net | 976 | 976 | $ 992 | ||
Depreciation expense | $ 49 | $ 47 | $ 142 | $ 136 |
Other Financial Data - Investme
Other Financial Data - Investments (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Common stock | $ 17 | $ 25 |
Strategic investments, at cost | 47 | 40 |
Company-owned life insurance policies | 72 | 74 |
Equity method investments | 18 | 20 |
Long-term investments | $ 154 | $ 159 |
Other Financial Data - Other As
Other Financial Data - Other Assets (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Other Assets [Abstract] | ||
Defined benefit plan assets | $ 279 | $ 223 |
Non-current contract cost assets (Note 2) | 101 | 107 |
Other | 57 | 92 |
Other assets, total | $ 437 | $ 422 |
Other Financial Data - Accrued
Other Financial Data - Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Accrued Liabilities [Abstract] | ||
Compensation | $ 266 | $ 347 |
Tax liabilities | 59 | 95 |
Dividend payable | 109 | 110 |
Trade liabilities | 143 | 161 |
Operating lease liabilities | 123 | 122 |
Other | 505 | 521 |
Accrued liabilities | $ 1,205 | $ 1,356 |
Other Financial Data - Other Li
Other Financial Data - Other Liabilities (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Other Liabilities [Abstract] | ||
Defined benefit plans | $ 1,472 | $ 1,524 |
Non-current contract liabilities (Note 2) | 266 | 274 |
Unrecognized tax benefits | 54 | 53 |
Deferred income taxes | 179 | 184 |
Other | 255 | 241 |
Other liabilities | $ 2,226 | $ 2,276 |
Other Financial Data - Stockhol
Other Financial Data - Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Payments for repurchased shares | $ 105 | $ 441 | $ 170 | |
Number of shares repurchased (in shares) | 0.7 | 2.9 | ||
Repurchase of common shares, average cost (in USD per share) | $ 147.35 | $ 152.79 | ||
Amount available for future share repurchase | $ 820 | $ 820 | ||
Cash dividends paid | $ 109 | $ 94 | $ 327 | $ 281 |
Other Financial Data - Accumula
Other Financial Data - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||
Balance at beginning of period | $ (683) | $ (683) | ||||||
Other comprehensive income, net of tax | $ 42 | $ (22) | 7 | $ 6 | ||||
Balance at end of period | (740) | (740) | ||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||
Balance at beginning of period | (2,475) | $ (2,566) | (2,440) | (2,737) | $ (2,724) | $ (2,765) | (2,440) | (2,765) |
Other comprehensive income, net of tax | 42 | 91 | (126) | (22) | (13) | 41 | ||
Balance at end of period | (2,433) | (2,475) | (2,566) | (2,759) | (2,737) | (2,724) | (2,433) | (2,759) |
Foreign Currency Translation Adjustments | ||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||
Balance at beginning of period | (470) | (410) | (437) | (444) | (410) | (444) | ||
Other comprehensive income (loss) before reclassification adjustment | 34 | (33) | (27) | (23) | ||||
Tax expense | (4) | 0 | (3) | (3) | ||||
Other comprehensive income, net of tax | 30 | (33) | (30) | (26) | ||||
Balance at end of period | (440) | (470) | (470) | (437) | (440) | (470) | ||
Defined Benefit Plans | ||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||
Balance at beginning of period | (2,005) | $ (2,030) | (2,300) | $ (2,321) | (2,030) | (2,321) | ||
Other comprehensive income, net of tax | 12 | 11 | 37 | 32 | ||||
Tax expense | (4) | (1) | (9) | (7) | ||||
Balance at end of period | (1,993) | $ (2,005) | (2,289) | $ (2,300) | (1,993) | (2,289) | ||
Reclassification adjustment - Actuarial net losses into Other income | ||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||
Reclassification adjustment before tax | 20 | 16 | 58 | 50 | ||||
Reclassification adjustment - Prior service benefits into Other expense | ||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||
Reclassification adjustment before tax | $ (4) | $ (4) | $ (12) | $ (11) |
Debt and Credit Facilities Sche
Debt and Credit Facilities Schedule of Debt (Details) - USD ($) | Sep. 26, 2020 | Aug. 31, 2020 | Mar. 28, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 5,376,000,000 | $ 5,132,000,000 | ||
Adjustments for unamortized gains on interest rate swap terminations | (2,000,000) | (3,000,000) | ||
Less: current portion | (212,000,000) | (16,000,000) | ||
Long-term debt | 5,162,000,000 | 5,113,000,000 | ||
Line of Credit | $2.2 billion unsecured revolving credit facility due April 2022 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 200,000,000 | 0 | ||
Line of Credit | Revolving Credit Facility 2017 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 800,000,000 | |||
Line of Credit | Revolving Credit Facility 2017 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility borrowing capacity | $ 2,200,000,000 | |||
Senior Notes | 3.75% senior notes due 2022 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.75% | 3.75% | ||
Long-term debt, gross | $ 0 | 550,000,000 | ||
Senior Notes | 3.5% senior notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.50% | |||
Long-term debt, gross | $ 323,000,000 | 597,000,000 | ||
Senior Notes | 4.0% senior notes due 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.00% | |||
Long-term debt, gross | $ 582,000,000 | 593,000,000 | ||
Senior Notes | 1.75% senior convertible notes due 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.75% | |||
Senior Notes | 6.5% debentures due 2025 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.50% | |||
Senior Notes | 7.5% debentures due 2025 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 7.50% | |||
Senior Notes | 4.6% senior notes due 2028 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.60% | |||
Long-term debt, gross | $ 692,000,000 | 691,000,000 | ||
Senior Notes | 6.5% debentures due 2028 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.50% | |||
Senior Notes | 4.6% senior notes due 2029 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.60% | |||
Long-term debt, gross | $ 804,000,000 | 804,000,000 | ||
Senior Notes | 2.3% senior notes due 2030 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.30% | 2.30% | ||
Senior Notes | 6.625% senior notes due 2037 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.625% | |||
Long-term debt, gross | $ 37,000,000 | 37,000,000 | ||
Senior Notes | 5.5% senior notes due 2044 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.50% | |||
Long-term debt, gross | $ 396,000,000 | 396,000,000 | ||
Senior Notes | 5.22% debentures due 2097 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.22% | |||
Convertible Notes | 1.75% senior convertible notes due 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.75% | |||
Long-term debt, gross | $ 993,000,000 | 988,000,000 | ||
Unsecured Debt | 6.5% debentures due 2025 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 70,000,000 | 72,000,000 | ||
Unsecured Debt | 7.5% debentures due 2025 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 252,000,000 | 254,000,000 | ||
Unsecured Debt | 6.5% debentures due 2028 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 24,000,000 | 24,000,000 | ||
Unsecured Debt | 2.3% senior notes due 2030 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 892,000,000 | 0 | ||
Unsecured Debt | 5.22% debentures due 2097 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 92,000,000 | 91,000,000 | ||
Other long-term debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 19,000,000 | $ 35,000,000 |
Debt and Credit Facilities (Det
Debt and Credit Facilities (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Oct. 29, 2020USD ($) | Aug. 31, 2020USD ($) | Sep. 26, 2020USD ($)$ / shares | Sep. 26, 2020USD ($)$ / shares | Sep. 28, 2019USD ($) | Mar. 28, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 05, 2019$ / shares | |
Debt Instrument [Line Items] | ||||||||
Long term debt | $ 5,376,000,000 | $ 5,376,000,000 | $ 5,132,000,000 | |||||
Repayment of unsecured revolving credit facility draw | 600,000,000 | $ 0 | ||||||
Long term debt under tender offer | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, repurchased principal amount | $ 293,000,000 | |||||||
Debt instrument, repurchase amount | 315,000,000 | |||||||
Accrued interest | 5,000,000 | |||||||
Loss on repurchase of debt instrument | 56,000,000 | |||||||
Commercial Paper | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility borrowing capacity | 2,200,000,000 | 2,200,000,000 | ||||||
Long term debt | 0 | 0 | ||||||
Line of Credit | Revolving Credit Facility 2017 | ||||||||
Debt Instrument [Line Items] | ||||||||
Long term debt | $ 800,000,000 | |||||||
Repayment of unsecured revolving credit facility draw | 600,000,000 | |||||||
Outstanding loan amount | 200,000,000 | 200,000,000 | ||||||
Line of Credit | Revolving Credit Facility 2017 | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayment of unsecured revolving credit facility draw | $ 100,000,000 | |||||||
Outstanding loan amount | $ 100,000,000 | |||||||
Line of Credit | Revolving Credit Facility | Revolving Credit Facility 2017 | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility borrowing capacity | 2,200,000,000 | 2,200,000,000 | ||||||
Line of Credit | Letter of Credit | Revolving Credit Facility 2017 | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility borrowing capacity | 500,000,000 | 500,000,000 | ||||||
Fronting commitment sub-limit | $ 450,000,000 | $ 450,000,000 | ||||||
Weighted average borrowing rate | 1.50% | 1.71% | ||||||
Senior Notes | 2.3% senior notes due 2030 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument face amount | $ 900,000,000 | |||||||
Interest rate | 2.30% | 2.30% | 2.30% | |||||
Debt instrument net of issuance costs | $ 892,000,000 | |||||||
Senior Notes | 3.75% senior notes due 2022 | ||||||||
Debt Instrument [Line Items] | ||||||||
Long term debt | $ 0 | $ 0 | 550,000,000 | |||||
Interest rate | 3.75% | 3.75% | 3.75% | |||||
Debt instrument, repurchased principal amount | $ 552,000,000 | |||||||
Debt instrument, repurchase amount | 582,000,000 | |||||||
Accrued interest | $ 7,000,000 | |||||||
Senior Notes | 1.75% senior convertible notes due 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 1.75% | 1.75% | ||||||
Convertible Notes | 1.75% senior convertible notes due 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Long term debt | $ 993,000,000 | $ 993,000,000 | $ 988,000,000 | |||||
Debt instrument face amount | $ 1,000,000,000 | $ 1,000,000,000 | ||||||
Interest rate | 1.75% | 1.75% | ||||||
Convertible time period | 2 years | |||||||
Conversion rate | 0.0049140 | |||||||
Effective conversion price of convertible shares (in USD per share) | $ / shares | $ 203.50 | $ 203.50 | $ 203.50 | |||||
Discount rate | 2.45% | |||||||
Convertible debt | $ 986,000,000 | $ 986,000,000 | ||||||
Unamortized debt discount | $ 14,000,000 | 14,000,000 | ||||||
Increase in Additional paid-in capital, conversion option | $ 14,000,000 |
Risk Management - Foreign Curre
Risk Management - Foreign Currency Risk (Details) $ in Millions | Sep. 26, 2020USD ($)position | Dec. 31, 2019USD ($)position |
Derivative [Line Items] | ||
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 | $ 1,000 | $ 1,100 |
Foreign Exchange Contract | Euro | Long | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 196 | 134 |
Foreign Exchange Contract | British pound | Long | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 134 | 107 |
Foreign Exchange Contract | Norwegian krone | Long | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 29 | 32 |
Foreign Exchange Contract | Australian dollar | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | 93 | 123 |
Foreign Exchange Contract | Chinese renminbi | Short | ||
Derivative [Line Items] | ||
Notional amounts of outstanding foreign exchange contracts | $ 77 | $ 79 |
Risk Management - Counterparty
Risk Management - Counterparty Risk (Details) $ in Millions | Sep. 26, 2020USD ($) |
Credit Concentration Risk | |
Derivative [Line Items] | |
Aggregate net credit risk | $ 1 |
Risk Management - Summary of Fa
Risk Management - Summary of Fair Values and Location in Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Other Current Assets | ||
Fair Value | ||
Other Current Assets | $ 1 | $ 4 |
Accrued Liabilities | ||
Fair Value | ||
Accrued Liabilities | 9 | 5 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Current Assets | ||
Fair Value | ||
Other Current Assets | 0 | 3 |
Designated as Hedging Instrument | Foreign exchange contracts | Accrued Liabilities | ||
Fair Value | ||
Accrued Liabilities | 2 | 0 |
Not Designated As Hedging Instruments | Foreign exchange contracts | Other Current Assets | ||
Fair Value | ||
Other Current Assets | 1 | 1 |
Not Designated As Hedging Instruments | Foreign exchange contracts | Accrued Liabilities | ||
Fair Value | ||
Accrued Liabilities | $ 7 | $ 5 |
Risk Management - Summary of De
Risk Management - Summary of Derivative Instruments and the Effect on the Condensed Consolidated Statements of Operations (Details) - Foreign exchange contracts - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Effective portion | $ (5) | $ 8 | $ 3 | $ 16 |
Forward points recognized | 0 | 2 | 2 | 5 |
Not Designated As Hedging Instruments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Undesignated derivatives recognized | $ 10 | $ (9) | $ 6 | $ (16) |
Risk Management - Net Investmen
Risk Management - Net Investment Hedges (Details) € in Millions, £ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 28, 2019USD ($) | Sep. 26, 2020USD ($) | Sep. 28, 2019USD ($) | Sep. 26, 2020EUR (€) | Sep. 26, 2020GBP (£) | Dec. 31, 2019USD ($) | |
Minimum | Net Investment Hedging | ||||||
Derivative [Line Items] | ||||||
Term of contract | 12 months | |||||
Maximum | Net Investment Hedging | ||||||
Derivative [Line Items] | ||||||
Term of contract | 15 months | |||||
Foreign Exchange Contract | ||||||
Derivative [Line Items] | ||||||
Notional amounts of outstanding foreign exchange contracts | $ 1,000 | $ 1,100 | ||||
Foreign Exchange Contract | Net Investment Hedging | Interest Expense | ||||||
Derivative [Line Items] | ||||||
Amortization of income from the excluded components through interest expense | $ 2 | $ 2 | $ 5 | |||
Foreign Exchange Contract | Designated as Hedging Instrument | Net Investment Hedging | ||||||
Derivative [Line Items] | ||||||
Notional amounts of outstanding foreign exchange contracts | € 94 | £ 60 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Net earnings before income taxes | $ 251 | $ 348 | $ 652 | $ 808 |
Income tax expense | $ 45 | $ 80 | $ 112 | $ 180 |
Effective tax rate | 18.00% | 23.00% | 17.00% | 22.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 45 | $ 80 | $ 112 | $ 180 |
Effective tax rate | 18.00% | 23.00% | 17.00% | 22.00% |
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. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Postretirement Health Care Benefits Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 0 | 1 | 1 | 2 |
Expected return on plan assets | (3) | (2) | (8) | (7) |
Amortization of: | ||||
Unrecognized net loss | 1 | 1 | 3 | 3 |
Unrecognized prior service benefit | (3) | (4) | (11) | (11) |
Net periodic pension benefits | (5) | (4) | (15) | (13) |
U.S. | Pension Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 36 | 50 | 108 | 152 |
Expected return on plan assets | (57) | (69) | (169) | (207) |
Amortization of: | ||||
Unrecognized net loss | 15 | 11 | 44 | 35 |
Unrecognized prior service benefit | 0 | 0 | 0 | 0 |
Net periodic pension benefits | (6) | (8) | (17) | (20) |
Non-U.S. | Pension Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 1 | 2 |
Interest cost | 7 | 9 | 21 | 29 |
Expected return on plan assets | (21) | (20) | (63) | (62) |
Amortization of: | ||||
Unrecognized net loss | 4 | 4 | 11 | 12 |
Unrecognized prior service benefit | (1) | 0 | (1) | 0 |
Net periodic pension benefits | $ (11) | $ (7) | $ (31) | $ (19) |
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. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 31 | $ 30 | $ 100 | $ 87 |
Tax benefit | (5) | (5) | (17) | (16) |
Share-based compensation expense, net of tax | $ 26 | $ 25 | $ 83 | $ 71 |
Decrease in basic earnings per share (in USD per share) | $ (0.15) | $ (0.15) | $ (0.49) | $ (0.43) |
Decrease in diluted earnings per share (in USD per share) | $ (0.15) | $ (0.14) | $ (0.48) | $ (0.40) |
Costs of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 3 | $ 3 | $ 12 | $ 11 |
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 | 18 | 16 | 57 | 46 |
Research and development expenditures | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense included in Operating earnings | $ 10 | $ 11 | $ 31 | $ 30 |
Share-Based Compensation Plan_3
Share-Based Compensation Plans - Narrative (Details) shares in Thousands, $ in Millions | 9 Months Ended |
Sep. 26, 2020USD ($)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 | 500 |
Aggregate grant date fair value | $ | $ 67 |
Performance Stock Units (PSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units granted in period (in shares) | shares | 30 |
Aggregate grant date fair value | $ | $ 7 |
Market Stock Units (MSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units granted in period (in shares) | shares | 100 |
Aggregate grant date fair value | $ | $ 9 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options granted in period (in shares) | shares | 200 |
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 | 100 |
Aggregate grant date fair value | $ | $ 9 |
Restricted Stock | Cybersecurity Services Business | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Service period (in shares) | 2 years |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Assets: | ||
Common stock | $ 17 | $ 25 |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Common stock | ||
Assets: | ||
Common stock | 17 | 25 |
Recurring basis | Estimate of Fair Value, Fair Value Disclosure | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange derivative contracts | 1 | 4 |
Liabilities: | ||
Foreign exchange derivative contracts | 9 | 5 |
Recurring basis | Level 1 | Common stock | ||
Assets: | ||
Common stock | 17 | 25 |
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 | Common stock | ||
Assets: | ||
Common stock | 0 | 0 |
Recurring basis | Level 2 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange derivative contracts | 1 | 4 |
Liabilities: | ||
Foreign exchange derivative contracts | $ 9 | $ 5 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
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 | $ 308 | $ 322 |
Level 2 | Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of long term debt | $ 5,900 | $ 5,500 |
Sales of Receivables - Sales Re
Sales of Receivables - Sales Receivables (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 31, 2019 | |
Receivables [Abstract] | |||||
Accounts receivable sales proceeds | $ 82 | $ 4 | $ 238 | $ 31 | |
Long-term receivables sales proceeds | 45 | 56 | 115 | 132 | |
Total proceeds from receivable sales | 127 | $ 60 | 353 | $ 163 | |
Servicing obligations for long-term receivables | 1,000 | 1,000 | $ 984 | ||
Long-term financing | $ 59 | $ 59 | $ 78 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) $ in Millions | Feb. 14, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Compensatory damages | $ 345.8 |
Punitive damages | 418.8 |
Total damages awarded | $ 764.6 |
Segment Information - Operating
Segment Information - Operating Business Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 1,868 | $ 1,994 | $ 5,141 | $ 5,511 |
Operating Earnings by Segment | ||||
Operating earnings | 352 | 413 | 828 | 991 |
Total other expense | (101) | (65) | (176) | (183) |
Net earnings before income taxes | 251 | 348 | 652 | 808 |
Products and Systems Integration | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,163 | 1,349 | 3,124 | 3,656 |
Operating Earnings by Segment | ||||
Operating earnings | 164 | 258 | 305 | 568 |
Software and Services | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 705 | 645 | 2,017 | 1,855 |
Operating Earnings by Segment | ||||
Operating earnings | $ 188 | $ 155 | $ 523 | $ 423 |
Reorganization of Business - Na
Reorganization of Business - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020USD ($)employee | Sep. 28, 2019USD ($) | Sep. 26, 2020USD ($)employee | Sep. 28, 2019USD ($) | Dec. 31, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | $ 13 | $ 18 | $ 72 | $ 37 | |
Reversal of accruals | 3 | 1 | $ 13 | 11 | |
Restructuring charges in the period for total employee severance (in number of employees) | employee | 900 | ||||
Employee separation costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 16 | 19 | $ 85 | 48 | |
Reversal of accruals | 13 | ||||
Restructuring reserve | $ 87 | 87 | $ 78 | ||
Payments for restructuring | $ 63 | ||||
Number of employees expected to be paid (in number of employees) | employee | 1,000 | 1,000 | |||
Other charges | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | $ 10 | 15 | $ 48 | 27 | |
Costs of sales | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reorganization of business charges | $ 3 | $ 3 | $ 24 | $ 10 |
Reorganization of Business - Ne
Reorganization of Business - Net Charges Incurred by Business Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | $ 13 | $ 18 | $ 72 | $ 37 |
Products and Systems Integration | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | 10 | 14 | 58 | 29 |
Software and Services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reorganization of business charges | $ 3 | $ 4 | $ 14 | $ 8 |
Reorganization of Business - Re
Reorganization of Business - Reorganization of Businesses Accruals (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Restructuring Reserve [Roll Forward] | ||||
Adjustments | $ (3) | $ (1) | $ (13) | $ (11) |
Employee separation costs | ||||
Restructuring Reserve [Roll Forward] | ||||
January 1, 2020 | 78 | |||
Additional Charges | 16 | $ 19 | 85 | $ 48 |
Adjustments | (13) | |||
Amount Used | (63) | |||
September 26, 2020 | $ 87 | $ 87 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Recent Acquisition (Details) - USD ($) shares in Millions, $ in Millions | Aug. 28, 2020 | Jul. 31, 2020 | Jun. 16, 2020 | Apr. 30, 2020 | Mar. 03, 2020 | Oct. 16, 2019 | Jul. 11, 2019 | Mar. 11, 2019 | Jan. 07, 2019 | Sep. 26, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 2,207 | $ 2,067 | |||||||||
Callyo | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration transferred | $ 63 | ||||||||||
Share-based compensation acquired | $ 3 | ||||||||||
Share-based compensation withheld, average service period | 2 years | ||||||||||
Cash paid for acquisition | $ 61 | ||||||||||
Goodwill | 38 | ||||||||||
Intangible assets acquired | 31 | ||||||||||
Net assets acquired | 8 | ||||||||||
Pelco, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration transferred | $ 110 | ||||||||||
Cash paid for acquisition | 108 | ||||||||||
Goodwill | 42 | ||||||||||
Intangible assets acquired | 30 | ||||||||||
Net assets acquired | 36 | ||||||||||
IndigoVision | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration transferred | $ 37 | ||||||||||
Cash paid for acquisition | 35 | ||||||||||
Goodwill | 14 | ||||||||||
Intangible assets acquired | 22 | ||||||||||
Net liabilities | 1 | ||||||||||
Cybersecurity Services Business | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration transferred | $ 40 | ||||||||||
Share-based compensation acquired | $ 6 | ||||||||||
Share-based compensation withheld, average service period | 2 years | ||||||||||
Cash paid for acquisition | $ 32 | $ 33 | |||||||||
Goodwill | 23 | 28 | |||||||||
Intangible assets acquired | 10 | 7 | |||||||||
Net liabilities | 1 | $ 2 | |||||||||
Data Solutions Business | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration transferred | $ 85 | ||||||||||
Goodwill | 54 | ||||||||||
Intangible assets acquired | 28 | ||||||||||
Net assets acquired | 3 | ||||||||||
WatchGuard | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration transferred | $ 271 | ||||||||||
Share-based compensation acquired | $ 16 | ||||||||||
Share-based compensation withheld, average service period | 2 years | ||||||||||
Cash paid for acquisition | $ 250 | ||||||||||
Goodwill | 156 | ||||||||||
Intangible assets acquired | 63 | ||||||||||
Debt assumed | 16 | ||||||||||
Acquired assets | 31 | ||||||||||
Avtec | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash paid for acquisition | $ 136 | ||||||||||
Goodwill | 68 | ||||||||||
Intangible assets acquired | $ 64 | ||||||||||
Useful life | 15 years | ||||||||||
Acquired assets | $ 4 | ||||||||||
VaaS | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration transferred | $ 445 | ||||||||||
Share-based compensation acquired | $ 38 | ||||||||||
Share-based compensation withheld, average service period | 1 year | ||||||||||
Cash paid for acquisition | $ 231 | ||||||||||
Goodwill | 261 | ||||||||||
Intangible assets acquired | 141 | ||||||||||
Debt assumed | $ 38 | ||||||||||
Shares acquired (in shares) | 1.4 | ||||||||||
Share value | $ 160 | ||||||||||
Total consideration | 391 | ||||||||||
Acquired liabilities | 11 | ||||||||||
Customer Relationships | Callyo | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 27 | ||||||||||
Useful life | 14 years | ||||||||||
Customer Relationships | Pelco, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 23 | ||||||||||
Useful life | 15 years | ||||||||||
Customer Relationships | IndigoVision | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 22 | ||||||||||
Useful life | 11 years | ||||||||||
Customer Relationships | Cybersecurity Services Business | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 8 | ||||||||||
Useful life | 12 years | 13 years | |||||||||
Customer Relationships | Data Solutions Business | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 22 | ||||||||||
Useful life | 16 years | ||||||||||
Customer Relationships | WatchGuard | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 33 | ||||||||||
Useful life | 13 years | ||||||||||
Customer Relationships | Avtec | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | 21 | ||||||||||
Customer Relationships | VaaS | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 42 | ||||||||||
Useful life | 15 years | ||||||||||
Technology | Callyo | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 4 | ||||||||||
Useful life | 7 years | ||||||||||
Technology | Pelco, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 4 | ||||||||||
Useful life | 2 years | ||||||||||
Technology | Cybersecurity Services Business | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 2 | ||||||||||
Useful life | 3 years | ||||||||||
Technology | Data Solutions Business | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 6 | ||||||||||
Useful life | 5 years | ||||||||||
Technology | WatchGuard | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 30 | ||||||||||
Useful life | 7 years | ||||||||||
Technology | Avtec | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 43 | ||||||||||
Technology | VaaS | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 99 | ||||||||||
Useful life | 10 years | ||||||||||
Trade Names | Pelco, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets acquired | $ 3 | ||||||||||
Useful life | 5 years |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 2,123 | $ 2,123 | $ 2,037 | ||
Accumulated Amortization | 855 | 855 | 710 | ||
Intangible Assets And Goodwill | |||||
Amortization expense on intangibles | 54 | $ 52 | 158 | $ 154 | |
Finite-Lived Intangible Assets, Future Amortization Expense | |||||
2020 | 210 | 210 | |||
2021 | 208 | 208 | |||
2022 | 206 | 206 | |||
2023 | 108 | 108 | |||
2024 | 83 | 83 | |||
2025 | 73 | 73 | |||
Completed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 760 | 760 | 738 | ||
Accumulated Amortization | 193 | 193 | 148 | ||
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 | 1,284 | 1,284 | 1,222 | ||
Accumulated Amortization | 613 | 613 | 518 | ||
Other intangibles | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 77 | 77 | 75 | ||
Accumulated Amortization | $ 47 | $ 47 | $ 42 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Amortized Intangible Assets, Excluding Goodwill, By Business Segment (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,123 | $ 2,037 |
Accumulated Amortization | 855 | 710 |
Products and Systems Integration | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 690 | 652 |
Accumulated Amortization | 116 | 82 |
Software and Services | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,433 | 1,385 |
Accumulated Amortization | $ 739 | $ 628 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Carrying Amount of Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 26, 2020USD ($) | |
Goodwill Activity | |
Balance as of January 1, 2020 | $ 2,067 |
Goodwill acquired | 145 |
Foreign currency | (5) |
Balance as of September 26, 2020 | 2,207 |
Products and Systems Integration | |
Goodwill Activity | |
Balance as of January 1, 2020 | 973 |
Goodwill acquired | 46 |
Foreign currency | 0 |
Balance as of September 26, 2020 | 1,019 |
Software and Services | |
Goodwill Activity | |
Balance as of January 1, 2020 | 1,094 |
Goodwill acquired | 99 |
Foreign currency | (5) |
Balance as of September 26, 2020 | $ 1,188 |