Other Financial Data | Other Financial Data Statements of Operations Information Other Charges Other charges (income) included in Operating earnings consist of the following: Three Months Ended April 3, 2021 March 28, 2020 Other charges (income): Intangibles amortization (Note 15) $ 58 $ 53 Reorganization of business (Note 14) 14 12 Operating lease asset impairments 7 — Acquisition-related transaction fees 1 2 Losses on legal settlements — 2 Gain on sale of property, plant and equipment — (50) Other (1) — $ 79 $ 19 During the three months ended April 3, 2021, the Company recognized $7 million of operating lease asset impairments relating to the consolidation of acquired U.S. manufacturing and distribution facilities. This loss has been recognized in Other charges in the Company's Condensed Consolidated Statements of Operations. During the three months ended March 28, 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 April 3, 2021 March 28, 2020 Interest income (expense), net: Interest expense $ (56) $ (55) Interest income 2 3 $ (54) $ (52) Other, net: Net periodic pension and postretirement benefit (Note 8) $ 30 $ 20 Foreign currency gain 14 18 Loss on derivative instruments (8) (16) Gains on equity method investments 2 1 Fair value adjustments to equity investments 5 1 Other 2 (7) $ 45 $ 17 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 April 3, 2021 March 28, 2020 Basic earnings per common share: Earnings $ 244 $ 197 Weighted average common shares outstanding 169.3 170.6 Per share amount $ 1.44 $ 1.15 Diluted earnings per common share: Earnings $ 244 $ 197 Weighted average common shares outstanding 169.3 170.6 Add effect of dilutive securities: Share-based awards 3.9 5.3 Diluted weighted average common shares outstanding 173.2 175.9 Per share amount $ 1.41 $ 1.12 In the computation of diluted earnings per common share for the three months ended April 3, 2021, the assumed exercise of 0.3 million options, including 0.1 million subject to market based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the three months ended March 28, 2020, 0.2 million options were excluded because their inclusion would have been antidilutive. As of April 3, 2021, the Company had $1.0 billion of 1.75% Senior Convertible Notes outstanding which mature on September 15, 2024 ("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 Senior Convertible Notes in cash. Because of the Company’s intention to settle the par value of the Senior Convertible Notes in cash, Motorola Solutions does not reflect any shares underlying the Senior Convertible Notes in its diluted weighted average shares outstanding until the average stock price per share for the period exceeds the conversion price. 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 April 3, 2021, there was no dilutive effect of the 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. Balance Sheet Information Accounts Receivable, Net Accounts receivable, net, consists of the following: April 3, 2021 December 31, 2020 Accounts receivable $ 1,167 $ 1,465 Less allowance for credit losses (77) (75) $ 1,090 $ 1,390 Inventories, Net Inventories, net, consist of the following: April 3, 2021 December 31, 2020 Finished goods $ 261 $ 271 Work-in-process and production materials 392 360 653 631 Less inventory reserves (123) (123) $ 530 $ 508 Other Current Assets Other current assets consist of the following: April 3, 2021 December 31, 2020 Current contract cost assets (Note 2) $ 36 $ 23 Tax-related deposits 43 52 Other 156 167 $ 235 $ 242 Property, Plant and Equipment, Net Property, plant and equipment, net, consist of the following: April 3, 2021 December 31, 2020 Land $ 6 $ 6 Leasehold improvements 449 439 Machinery and equipment 2,331 2,276 2,786 2,721 Less accumulated depreciation (1,758) (1,699) $ 1,028 $ 1,022 Depreciation expense for the three months ended April 3, 2021 and March 28, 2020 was $52 million and $46 million, respectively. Investments Investments consist of the following: April 3, 2021 December 31, 2020 Common stock $ 24 $ 19 Strategic investments, at cost 48 46 Company-owned life insurance policies 79 77 Equity method investments 17 16 $ 168 $ 158 Other Assets Other assets consist of the following: April 3, 2021 December 31, 2020 Defined benefit plan assets $ 308 $ 283 Non-current contract cost assets (Note 2) 105 105 Other 68 94 $ 481 $ 482 Accrued Liabilities Accrued liabilities consist of the following: April 3, 2021 December 31, 2020 Compensation $ 232 $ 291 Tax liabilities 89 147 Dividend payable 121 120 Trade liabilities 153 164 Operating lease liabilities (Note 3) 135 126 Other 451 463 $ 1,181 $ 1,311 Other Liabilities Other liabilities consist of the following: April 3, 2021 December 31, 2020 Defined benefit plans $ 1,531 $ 1,578 Non-current contract liabilities (Note 2) 280 283 Deferred income taxes 176 180 Other 299 322 $ 2,286 $ 2,363 Stockholders’ Equity (Deficit) Share Repurchase Program: During the three months ended April 3, 2021, the Company paid an aggregate of $170 million, including transaction costs, to repurchase approximately 1.0 million shares at an average price of $175.53 per share. As of April 3, 2021, the Company had $479 million of authority available for future repurchases. Subsequent to quarter end, the Board of Directors approved a $2.0 billion increase to the share repurchase program, raising the remaining authority for future repurchases to $2.5 billion. Payment of Dividends: During the three months ended April 3, 2021 and March 28, 2020, the Company paid $121 million and $109 million, respectively, in cash dividends to holders of its common stock. Subsequent to the quarter, the Company paid an additional $121 million in cash dividends to holders of its common stock. Accumulated Other Comprehensive Loss The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the Condensed Consolidated Statements of Operations during the three months ended April 3, 2021 and March 28, 2020: Three Months Ended April 3, 2021 March 28, 2020 Foreign Currency Translation Adjustments: Balance at beginning of period $ (360) $ (410) Other comprehensive income (loss) before reclassification adjustment 17 (136) Tax benefit (expense) 2 (2) Other comprehensive income (loss), net of tax 19 (138) Balance at end of period $ (341) $ (548) Defined Benefit Plans: Balance at beginning of period $ (2,086) $ (2,030) Reclassification adjustment - Actuarial net losses into Other income (Note 8) 22 19 Reclassification adjustment - Prior service benefits into Other expense (Note 8) (2) (4) Tax benefit (3) (3) Other comprehensive income, net of tax 17 12 Balance at end of period $ (2,069) $ (2,018) Total Accumulated other comprehensive loss $ (2,410) $ (2,566) |