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 Six Months Ended July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020 Other charges: Intangibles amortization (Note 15) $ 58 $ 51 $ 116 $ 104 Reorganization of business (Note 14) 6 26 20 38 Operating lease asset impairments — — 7 — Acquisition-related transaction fees 3 1 4 3 Losses on legal settlements 3 7 3 9 Fixed asset impairment — 5 — 5 Gain on sale of property, plant and equipment — — — (50) $ 70 $ 90 $ 150 $ 109 During the six months ended July 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 six months ended June 27, 2020, the Company recorded a $50 million gain on the sale of a manufacturing facility in Europe. This gain has been recognized in Other charges in the Company's Condensed Consolidated Statements of Operations. Other Income (Expense) Interest expense, net, and Other, net, both included in Other income (expense), consist of the following: Three Months Ended Six Months Ended July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020 Interest income (expense), net: Interest expense $ (46) $ (60) $ (102) $ (114) Interest income 2 2 4 5 $ (44) $ (58) $ (98) (109) Other, net: Net periodic pension and postretirement benefit (Note 8) $ 31 $ 19 $ 60 $ 39 Loss from the extinguishment of long-term debt (Note 5) (18) — (18) — Foreign currency gain (loss) (6) (21) 8 (3) Gain (loss) on derivative instruments (1) 12 (9) (4) Gains on equity method investments 2 — 3 — Fair value adjustments to equity investments 8 4 13 5 Other (2) 2 3 (3) $ 14 $ 16 $ 60 $ 34 Earnings Per Common Share The computation of basic and diluted earnings per common share is as follows: Amounts attributable to Motorola Solutions, Inc. common stockholders Three Months Ended Six Months Ended July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020 Basic earnings per common share: Earnings $ 293 $ 135 $ 537 $ 332 Weighted average common shares outstanding 169.6 170.0 169.4 170.3 Per share amount $ 1.73 $ 0.79 $ 3.17 $ 1.95 Diluted earnings per common share: Earnings $ 293 $ 135 $ 537 $ 332 Weighted average common shares outstanding 169.6 170.0 169.4 170.3 Add effect of dilutive securities: Share-based awards 3.5 3.6 3.7 4.5 1.75% senior convertible notes — — — — Diluted weighted average common shares outstanding 173.1 173.6 173.1 174.8 Per share amount $ 1.69 $ 0.78 $ 3.10 $ 1.90 In the computation of diluted earnings per common share for the three months ended July 3, 2021, the assumed exercise of 0.4 million options, including 0.2 million subject to market based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the six months ended July 3, 2021, the assumed exercise of 0.4 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 June 27, 2020, 0.6 million options, including 0.2 million subject to market based contingent option agreements, were excluded because their inclusion would have been antidilutive. For the six months ended June 27, 2020, the assumed exercise of 0.4 million options, including 0.1 million subject to market based contingent option agreements, were excluded because their inclusion would have been antidilutive. As of July 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 for the period exceeds the conversion price of $203.50. The conversion price is adjusted for dividends declared through the date of settlement. For the period ended July 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: July 3, 2021 December 31, 2020 Accounts receivable $ 1,244 $ 1,465 Less allowance for credit losses (75) (75) $ 1,169 $ 1,390 Inventories, Net Inventories, net, consist of the following: July 3, 2021 December 31, 2020 Finished goods $ 261 $ 271 Work-in-process and production materials 429 360 690 631 Less inventory reserves (131) (123) $ 559 $ 508 Other Current Assets Other current assets consist of the following: July 3, 2021 December 31, 2020 Current contract cost assets (Note 2) $ 30 $ 23 Tax-related deposits 44 52 Other 180 167 $ 254 $ 242 Property, Plant and Equipment, Net Property, plant and equipment, net, consist of the following: July 3, 2021 December 31, 2020 Land $ 4 $ 6 Leasehold improvements 473 439 Machinery and equipment 2,378 2,276 2,855 2,721 Less accumulated depreciation (1,827) (1,699) $ 1,028 $ 1,022 Depreciation expense for the three months ended July 3, 2021 and June 27, 2020 was $52 million and $47 million, respectively. Depreciation expense for the six months ended July 3, 2021 and June 27, 2020 was $104 million and $93 million, respectively. Investments Investments consist of the following: July 3, 2021 December 31, 2020 Common stock $ 30 $ 19 Strategic investments, at cost 54 46 Company-owned life insurance policies 79 77 Equity method investments 18 16 $ 181 $ 158 Subsequent to quarter end, on July 16, 2021, the Company invested $50 million in equity securities of NewHold Investment Corp., which completed a business combination with Evolv Technologies, Inc. The equity securities will be carried at fair value with changes in fair value recorded in Other, net within Other income (expense). Other Assets Other assets consist of the following: July 3, 2021 December 31, 2020 Defined benefit plan assets $ 332 $ 283 Non-current contract cost assets (Note 2) 110 105 Other 67 94 $ 509 $ 482 Accrued Liabilities Accrued liabilities consist of the following: July 3, 2021 December 31, 2020 Compensation $ 235 $ 291 Tax liabilities 81 147 Dividend payable 120 120 Trade liabilities 157 164 Operating lease liabilities (Note 3) 129 126 Other 490 463 $ 1,212 $ 1,311 Other Liabilities Other liabilities consist of the following: July 3, 2021 December 31, 2020 Defined benefit plans $ 1,504 $ 1,578 Non-current contract liabilities (Note 2) 296 283 Deferred income taxes 178 180 Other 287 322 $ 2,265 $ 2,363 Stockholders’ Equity (Deficit) Share Repurchase Program: During the three and six months ended July 3, 2021, the Company paid an aggregate of $102 million and $272 million, including transaction costs, to repurchase approximately 0.5 million and 1.5 million shares at an average price of $206.85 and $186.08 per share, respectively. During the three months ended July 3, 2021, the Board of Directors approved a $2.0 billion increase to the share repurchase program. As of July 3, 2021, the Company had $2.4 billion of authority available for future repurchases. Payment of Dividends: During the three months ended July 3, 2021 and June 27, 2020, the Company paid $121 million and $109 million, respectively, in cash dividends to holders of its common stock. During the six months ended July 3, 2021 and June 27, 2020, the Company paid $242 million and $218 million, respectively, in cash dividends to holders of its common stock. Subsequent to the quarter, the Company paid an additional $120 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 and six months ended July 3, 2021 and June 27, 2020: Three Months Ended Six Months Ended July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020 Foreign Currency Translation Adjustments: Balance at beginning of period $ (341) $ (548) $ (360) $ (410) Other comprehensive income (loss) before reclassification adjustment 6 75 23 (61) Tax benefit — 3 2 1 Other comprehensive income (loss), net of tax 6 78 25 (60) Balance at end of period $ (335) $ (470) $ (335) $ (470) Defined Benefit Plans: Balance at beginning of period $ (2,069) $ (2,018) $ (2,086) $ (2,030) Reclassification adjustment - Actuarial net losses into Other income (Note 8) 21 19 43 38 Reclassification adjustment - Prior service benefits into Other expense (Note 8) (2) (4) (4) (8) Tax benefit (3) (2) (6) (5) Other comprehensive income, net of tax 16 13 33 25 Balance at end of period $ (2,053) $ (2,005) $ (2,053) $ (2,005) Total Accumulated other comprehensive loss $ (2,388) $ (2,475) $ (2,388) $ (2,475) |