Cover
Cover - shares | 3 Months Ended | |
Apr. 01, 2023 | Apr. 25, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 01, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-19406 | |
Entity Registrant Name | Zebra Technologies Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-2675536 | |
Entity Address, Address Line One | 3 Overlook Point | |
Entity Address, City or Town | Lincolnshire | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60069 | |
City Area Code | 847 | |
Local Phone Number | 634-6700 | |
Title of 12(b) Security | Class A Common Stock, par value $.01 per share | |
Trading Symbol | ZBRA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 51,430,338 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000877212 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Apr. 01, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 85 | $ 105 |
Accounts receivable, net of allowances for doubtful accounts of $1 million each as of April 1, 2023 and December 31, 2022 | 736 | 768 |
Inventories, net | 835 | 860 |
Income tax receivable | 22 | 26 |
Prepaid expenses and other current assets | 140 | 124 |
Total Current assets | 1,818 | 1,883 |
Property, plant and equipment, net | 280 | 278 |
Right-of-use lease assets | 172 | 156 |
Goodwill | 3,895 | 3,899 |
Other intangibles, net | 604 | 630 |
Deferred income taxes | 432 | 407 |
Other long-term assets | 273 | 276 |
Total Assets | 7,474 | 7,529 |
Current liabilities: | ||
Current portion of long-term debt | 215 | 214 |
Accounts payable | 602 | 811 |
Accrued liabilities | 671 | 744 |
Deferred revenue | 447 | 425 |
Income taxes payable | 139 | 138 |
Total Current liabilities | 2,074 | 2,332 |
Long-term debt | 1,880 | 1,809 |
Long-term lease liabilities | 157 | 139 |
Deferred income taxes | 75 | 75 |
Long-term deferred revenue | 333 | 333 |
Other long-term liabilities | 64 | 108 |
Total Liabilities | 4,583 | 4,796 |
Stockholders’ Equity: | ||
Preferred stock, $.01 par value; authorized 10,000,000 shares; none issued | 0 | 0 |
Class A common stock, $.01 par value; authorized 150,000,000 shares; issued 72,151,857 shares | 1 | 1 |
Additional paid-in capital | 584 | 561 |
Treasury stock at cost, 20,726,888 and 20,700,357 shares as of April 1, 2023 and December 31, 2022, respectively | (1,814) | (1,799) |
Retained earnings | 4,186 | 4,036 |
Accumulated other comprehensive loss | (66) | (66) |
Total Stockholders’ Equity | 2,891 | 2,733 |
Total Liabilities and Stockholders’ Equity | $ 7,474 | $ 7,529 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Apr. 01, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1 | $ 1 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 72,151,857 | 72,151,857 |
Treasury stock, shares (in shares) | 20,726,888 | 20,700,357 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Net sales: | ||
Total Net sales | $ 1,405 | $ 1,432 |
Cost of sales: | ||
Total Cost of sales | 738 | 795 |
Gross profit | 667 | 637 |
Operating expenses: | ||
Selling and marketing | 161 | 152 |
Research and development | 146 | 137 |
General and administrative | 99 | 99 |
Amortization of intangible assets | 26 | 33 |
Acquisition and integration costs | 0 | 4 |
Exit and restructuring costs | 10 | 0 |
Total Operating expenses | 442 | 425 |
Operating income | 225 | 212 |
Other income (loss), net: | ||
Foreign exchange gain | 1 | 8 |
Interest (expense) income, net | (37) | 30 |
Other (expense), net | (4) | 0 |
Total Other (expense) income, net | (40) | 38 |
Income before income tax | 185 | 250 |
Income tax expense | 35 | 45 |
Net income | $ 150 | $ 205 |
Basic earnings per share (in USD per share) | $ 2.92 | $ 3.86 |
Diluted earnings per share (in USD per share) | $ 2.90 | $ 3.83 |
Tangible Products | ||
Net sales: | ||
Total Net sales | $ 1,170 | $ 1,207 |
Cost of sales: | ||
Total Cost of sales | 618 | 681 |
Services and software | ||
Net sales: | ||
Total Net sales | 235 | 225 |
Cost of sales: | ||
Total Cost of sales | $ 120 | $ 114 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 150 | $ 205 |
Other comprehensive (loss) income, net of tax: | ||
Changes in unrealized (losses) and gains on anticipated sales hedging transactions | (3) | 5 |
Foreign currency translation adjustment | 3 | (5) |
Comprehensive income | $ 150 | $ 205 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Class A Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2021 | 53,415,275 | |||||
Beginning balance at Dec. 31, 2021 | $ 2,984 | $ 1 | $ 462 | $ (1,023) | $ 3,573 | $ (29) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuances of treasury shares related to share based-compensation plans, net of forfeitures (in shares) | 20,082 | |||||
Issuances of treasury shares related to share-based compensation plans, net of forfeitures | 6 | 8 | (2) | |||
Shares withheld to fund withholding tax obligations related to share-based compensation plans (in shares) | (1,639) | |||||
Shares withheld to fund withholding tax obligations related to share-based compensation plans | (1) | (1) | ||||
Share-based compensation | 17 | 17 | ||||
Repurchase of common stock (in shares) | (648,875) | |||||
Repurchase of common stock | (305) | (305) | ||||
Net income | 205 | 205 | ||||
Changes in unrealized gains and losses on anticipated sales hedging transactions (net of income taxes) | 5 | 5 | ||||
Foreign currency translation adjustment | (5) | (5) | ||||
Ending balance (in shares) at Apr. 02, 2022 | 52,784,843 | |||||
Ending balance at Apr. 02, 2022 | 2,906 | $ 1 | 487 | (1,331) | 3,778 | (29) |
Beginning balance (in shares) at Dec. 31, 2022 | 51,451,500 | |||||
Beginning balance at Dec. 31, 2022 | 2,733 | $ 1 | 561 | (1,799) | 4,036 | (66) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuances of treasury shares related to share based-compensation plans, net of forfeitures (in shares) | 29,784 | |||||
Issuances of treasury shares related to share-based compensation plans, net of forfeitures | 5 | 5 | ||||
Shares withheld to fund withholding tax obligations related to share-based compensation plans (in shares) | (504) | |||||
Share-based compensation | 18 | 18 | ||||
Repurchase of common stock (in shares) | (55,811) | |||||
Repurchase of common stock | (15) | (15) | ||||
Net income | 150 | 150 | ||||
Changes in unrealized gains and losses on anticipated sales hedging transactions (net of income taxes) | (3) | (3) | ||||
Foreign currency translation adjustment | 3 | 3 | ||||
Ending balance (in shares) at Apr. 01, 2023 | 51,424,969 | |||||
Ending balance at Apr. 01, 2023 | $ 2,891 | $ 1 | $ 584 | $ (1,814) | $ 4,186 | $ (66) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 150 | $ 205 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 44 | 52 |
Share-based compensation | 18 | 17 |
Deferred income taxes | (20) | (37) |
Unrealized loss (gain) on forward interest rate swaps | 13 | (38) |
Other, net | 2 | (1) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 33 | (56) |
Inventories, net | 26 | 22 |
Other assets | (27) | (19) |
Accounts payable | (212) | (14) |
Accrued liabilities | (82) | (143) |
Deferred revenue | 22 | 18 |
Income taxes | 5 | 51 |
Settlement liability | (45) | 0 |
Other operating activities | (3) | (3) |
Net cash (used in) provided by operating activities | (76) | 54 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (16) | (14) |
Purchases of long-term investments | (1) | (5) |
Net cash used in investing activities | (17) | (19) |
Cash flows from financing activities: | ||
Payments of long-term debt | (119) | (25) |
Proceeds from issuance of long-term debt | 191 | 130 |
Payments for repurchases of common stock | (15) | (305) |
Net proceeds related to share-based compensation plans | 5 | 5 |
Change in unremitted cash collections from servicing factored receivables | 8 | (25) |
Net cash provided by (used in) financing activities | 70 | (220) |
Effect of exchange rate changes on cash and cash equivalents, including restricted cash | (1) | (2) |
Net decrease in cash and cash equivalents, including restricted cash | (24) | (187) |
Cash and cash equivalents, including restricted cash, at beginning of period | 117 | 344 |
Cash and cash equivalents, including restricted cash, at end of period | 93 | 157 |
Less restricted cash, included in Prepaid expenses and other current assets | (8) | (16) |
Cash and cash equivalents at end of period | 85 | 141 |
Supplemental disclosures of cash flow information: | ||
Income taxes paid | 54 | 29 |
Interest paid | $ 24 | $ 8 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Apr. 01, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Zebra Technologies Corporation and its subsidiaries (“Zebra” or the “Company”) is a global leader providing innovative Enterprise Asset Intelligence (“EAI”) solutions in the Automatic Identification and Data Capture (“AIDC”) industry. We design, manufacture, and sell a broad range of products and solutions, as well as various workflow optimization solutions, including cloud-based software subscriptions and robotic automation solutions. We also provide a full range of services, including maintenance, technical support, repair, managed and professional services. End-users of our products, solutions and services include those in retail and e-commerce, manufacturing, transportation and logistics, healthcare, public sector, and other industries. We provide our products, solutions and services globally through a direct sales force and an extensive network of channel partners. Management prepared these unaudited interim consolidated financial statements according to the rules and regulations of the Securities and Exchange Commission for interim financial information and notes. As permitted under Article 10 of Regulation S-X and the instructions of Form 10-Q, these consolidated financial statements do not include all the information and notes required by United States Generally Accepted Accounting Principles (“GAAP”) for complete financial statements, although management believes that the disclosures made are adequate to make the information not misleading. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022. In the opinion of the Company, these interim financial statements include all adjustments (of a normal, recurring nature) necessary to fairly present its Consolidated Balance Sheet as of April 1, 2023, the Consolidated Statements of Operations, Comprehensive Income, Stockholders’ Equity, and Cash Flows for the three months ended April 1, 2023 and April 2, 2022. These results, however, are not necessarily indicative of the results expected for the full fiscal year ending December 31, 2023. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Apr. 01, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies For a discussion of our significant accounting policies, see Note 2, Significant Accounting Policies within Part II, Item 8. “Financial Statements and Supplementary Data” in the Annual Report on Form 10-K for the year ended December 31, 2022. There have been no changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended December 31, 2022. |
Revenues
Revenues | 3 Months Ended |
Apr. 01, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues The Company recognizes revenue to depict the transfer of goods, solutions or services to a customer at an amount that reflects the consideration which it expects to receive for providing those goods, solutions or services. Revenues for products are generally recognized upon shipment, whereas revenues for services and solution offerings are generally recognized over time by using an output or time-based method, assuming all other criteria for revenue recognition have been met. Revenues for software are recognized either upon delivery or over time using a time-based method, depending upon how control is transferred to the customer. In cases where a bundle of products, services, solutions and/or software are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control. Disaggregation of Revenue The following table presents our Net sales disaggregated by product category for each of our segments (in millions): Three Months Ended April 1, 2023 April 2, 2022 Segment Tangible Products Services and Software Total Tangible Products Services and Software Total AIT $ 467 $ 24 $ 491 $ 370 $ 24 $ 394 EVM 703 211 914 837 201 1,038 Total $ 1,170 $ 235 $ 1,405 $ 1,207 $ 225 $ 1,432 In addition, refer to Note 17, Segment Information & Geographic Data for Net sales to customers by geographic region. Performance Obligations The Company’s remaining performance obligations primarily relate to repair and support services, as well as solution offerings. The aggregated transaction price allocated to remaining performance obligations for arrangements with an original term exceeding one year was $1,144 million and $1,105 million, inclusive of deferred revenue, as of April 1, 2023 and December 31, 2022, respectively. On average, remaining performance obligations as of April 1, 2023 and December 31, 2022 are expected to be recognized over a period of approximately two years. Contract Balances Progress on satisfying performance obligations under contracts with customers related to billed revenues is reflected on the Consolidated Balance Sheets in Accounts receivable, net. Progress on satisfying performance obligations under contracts with customers related to unbilled revenues (“contract assets”) is reflected on the Consolidated Balance Sheets as Prepaid expenses and other current assets for revenues expected to be billed within the next twelve months, and Other long-term assets for revenues expected to be billed thereafter. The total contract asset balances were $20 million and $16 million as of April 1, 2023 and December 31, 2022, respectively. These contract assets result from timing differences between billing and satisfying performance obligations, as well as the impact from the allocation of the transaction price among performance obligations for contracts that include multiple performance obligations. Contract assets are evaluated for impairment and no impairment losses have been recognized during the three months ended April 1, 2023 and April 2, 2022, respectively. Deferred revenue on the Consolidated Balance Sheets consists of payments and billings in advance of our performance. The combined short-term and long-term deferred revenue balances were $780 million and $758 million as of April 1, 2023 and December 31, 2022, respectively. During the three months ended April 1, 2023, the Company recognized $135 million in revenue, which was previously included in the beginning balance of deferred revenue as of December 31, 2022. During the three months ended April 2, 2022, the Company recognized $129 million in revenue, which was previously included in the beginning balance of deferred revenue as of December 31, 2021. |
Inventories
Inventories | 3 Months Ended |
Apr. 01, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of Inventories, net are as follows (in millions): April 1, December 31, Raw materials $ 314 $ 293 Work in process 5 4 Finished goods 516 563 Total Inventories, net $ 835 $ 860 |
Business Acquisitions
Business Acquisitions | 3 Months Ended |
Apr. 01, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisitions | Business Acquisitions Matrox During the first quarter of 2023, the Company did not record any significant measurement period adjustments relating to its acquisition of Matrox Electronic Systems Ltd. (“Matrox”). The primary fair value estimates still considered preliminary as of April 1, 2023 include intangible assets and income tax-related items. |
Investments
Investments | 3 Months Ended |
Apr. 01, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The carrying value of the Company’s long-term investments, which are included in Other long-term assets on the Consolidated Balance Sheets, was $113 million as of both April 1, 2023 and December 31, 2022. The Company paid $1 million and $5 million for the purchases of long-term investments during the three months ended April 1, 2023 and April 2, 2022, respectively. Net gains and losses related to the Company’s long-term investments are included within Other (expense), net on the Consolidated Statements of Operations. The Company recognized net losses of $1 million during the three months ended April 1, 2023. The Company did not recognize any net gains or losses during the three months ended April 2, 2022. |
Exit and Restructuring Costs
Exit and Restructuring Costs | 3 Months Ended |
Apr. 01, 2023 | |
Restructuring and Related Activities [Abstract] | |
Exit and Restructuring Costs | Exit and Restructuring Costs In the third quarter of 2022, the Company committed to certain organizational changes and leased site rationalizations designed to generate structural cost efficiencies (collectively referred to as the “2022 Productivity Plan”). The total cost under the initial scope of the 2022 Productivity Plan, which is expected to be completed in 2023, is estimated to be approximately $25 million. Total Exit and restructuring charges associated with the 2022 Productivity Plan to date were $22 million with $10 million recorded for the three months ended April 1, 2023. The Company’s remaining obligations under the 2022 Productivity Plan are expected to be substantially settled within the next year and are primarily reflected within Accrued liabilities on the Consolidated Balance Sheets. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 01, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities are measured using inputs from three levels of the fair value hierarchy in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements . 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 at the measurement date. ASC Topic 820 established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into the following three broad levels: • Level 1: Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs (e.g. U.S. Treasuries and money market funds). • Level 2: Observable prices that are based on inputs not quoted in active markets but corroborated by market data. • Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs to the extent possible. In addition, the Company considers counterparty credit risk in the assessment of fair value. The Company’s financial assets and liabilities carried at fair value as of April 1, 2023, are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Forward interest rate swap contracts (2) $ — $ 59 $ — $ 59 Investments related to the deferred compensation plan 36 — — 36 Total Assets at fair value $ 36 $ 59 $ — $ 95 Liabilities: Foreign exchange contracts (1) $ 5 $ 19 $ — $ 24 Liabilities related to the deferred compensation plan 36 — — 36 Total Liabilities at fair value $ 41 $ 19 $ — $ 60 The Company’s financial assets and liabilities carried at fair value as of December 31, 2022, are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Forward interest rate swap contracts (2) $ — $ 72 $ — $ 72 Investments related to the deferred compensation plan 35 — — 35 Total Assets at fair value $ 35 $ 72 $ — $ 107 Liabilities: Foreign exchange contracts (1) $ 5 $ 14 $ — $ 19 Liabilities related to the deferred compensation plan 35 — — 35 Total Liabilities at fair value $ 40 $ 14 $ — $ 54 (1) The fair value of the foreign exchange contracts is calculated as follows: • Fair value of regular forward contracts associated with forecasted sales hedges is calculated using the period-end exchange rate adjusted for current forward points. • Fair value of hedges against net assets denominated in foreign currencies is calculated at the period-end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at year end (Level 2). If this is the case, the fair value is calculated at the rate at which the hedge is being settled (Level 1). |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Apr. 01, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments In the normal course of business, the Company is exposed to global market risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company uses derivative instruments to manage its exposure to such risks and may elect to designate certain derivatives as hedging instruments under ASC Topic 815, Derivatives and Hedging (“ASC 815”). The Company formally documents all relationships between designated hedging instruments and hedged items as well as its risk management objectives and strategies for undertaking hedge transactions. The Company does not hold or issue derivatives for trading or speculative purposes. In accordance with ASC 815, the Company recognizes derivative instruments as either assets or liabilities on the Consolidated Balance Sheets and measures them at fair value. The following table presents the fair value of its derivative instruments (in millions): Asset (Liability) Fair Values as of Balance Sheets Classification April 1, December 31, Derivative instruments designated as hedges: Foreign exchange contracts Accrued liabilities $ (19) $ (14) Total derivative instruments designated as hedges $ (19) $ (14) Derivative instruments not designated as hedges: Forward interest rate swaps Prepaid expenses and other current assets $ 24 $ 25 Forward interest rate swaps Other long-term assets 35 47 Foreign exchange contracts Accrued liabilities (5) (5) Total derivative instruments not designated as hedges $ 54 $ 67 Total net derivative asset $ 35 $ 53 The following table presents the net (losses) gains from changes in fair values of derivatives that are not designated as hedges (in millions): (Losses) Gains Recognized in Income Three Months Ended Statements of Operations Classification April 1, April 2, Derivative instruments not designated as hedges: Foreign exchange contracts Foreign exchange gain $ (5) $ (1) Forward interest rate swaps Interest (expense) income, net (7) 34 Total (loss) gain recognized in income $ (12) $ 33 Activities related to derivative instruments are reflected within Net cash (used in) provided by operating activities on the Consolidated Statements of Cash Flows. Credit and Market Risk Management Financial instruments, including derivatives, expose the Company to counterparty credit risk of nonperformance and to market risk related to currency exchange rate and interest rate fluctuations. The Company manages its exposure to counterparty credit risk by establishing minimum credit standards, diversifying its counterparties, and monitoring its concentrations of credit. The Company’s counterparties are commercial banks with expertise in derivative financial instruments. The Company evaluates the impact of market risk on the fair value and cash flows of its derivative and other financial instruments by considering reasonably possible changes in interest rates and currency exchange rates. The Company continually monitors the creditworthiness of the customers to which it grants credit terms in the normal course of business. The terms and conditions of the Company’s credit policies are designed to mitigate concentrations of credit risk. The Company’s master netting and other similar arrangements with the respective counterparties allow for net settlement under certain conditions, which are designed to reduce credit risk by permitting net settlement with the same counterparty. We present the assets and liabilities of our derivative financial instruments, for which we have net settlement agreements in place, on a net basis on the Consolidated Balance Sheets. If the derivative financial instruments had been presented gross on the Consolidated Balance Sheets, the asset and liability positions would have been unchanged as of April 1, 2023 and would have been increased by $4 million as of December 31, 2022. Foreign Currency Exchange Risk Management The Company conducts business on a multinational basis in a variety of foreign currencies. Exposure to market risk for changes in foreign currency exchange rates arises primarily from Euro-denominated external revenues, cross-border financing activities between subsidiaries, and foreign currency denominated monetary assets and liabilities. The Company manages its objective of preserving the economic value of non-functional currency denominated cash flows by initially hedging transaction exposures with natural offsets and, once these opportunities have been exhausted, through foreign exchange forward and option contracts, as deemed appropriate. The Company manages the exchange rate risk of anticipated Euro-denominated sales using forward contracts, which typically mature within twelve months of execution. The Company designates these derivative contracts as cash flow hedges. Unrealized gains and losses on these contracts are deferred in Accumulated other comprehensive income (loss) (“AOCI”) on the Consolidated Balance Sheets until the contract is settled and the hedged sale is realized. The realized gain or loss is then recorded as an adjustment to Net sales on the Consolidated Statements of Operations. Realized amounts reclassified to Net sales The Company uses forward contracts, which are not designated as hedging instruments, to manage its exposures related to net assets denominated in foreign currencies. These forward contracts typically mature within one month after execution. Monetary gains and losses on these forward contracts are recorded in income and are generally offset by the transaction gains and losses related to their net asset positions. The notional values and the net fair values of these outstanding contracts were as follows (in millions): April 1, December 31, Notional balance of outstanding contracts: British Pound/U.S. Dollar £ 7 £ 11 Euro/U.S. Dollar € 169 € 191 Euro/Czech Koruna € 15 € 15 Singapore Dollar/U.S. Dollar S$ 16 S$ 5 Mexican Peso/U.S. Dollar Mex$ 139 Mex$ 372 Polish Zloty/U.S. Dollar zł 63 zł 47 Net fair value of liabilities of outstanding contracts $ 5 $ 5 Interest Rate Risk Management The Company’s debt consists of borrowings under a term loan (“Term Loan A”), Revolving Credit Facility, and Receivables Financing Facilities, which bear interest at variable rates plus applicable margins. As a result, the Company is exposed to market risk associated with the variable interest rate payments on these borrowings. See Note 10, Long-Term Debt for further details related to these borrowings. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Apr. 01, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The following table shows the carrying value of the Company’s debt (in millions): April 1, December 31, Term Loan A $ 1,684 $ 1,728 Revolving Credit Facility 215 50 Receivables Financing Facilities 204 254 Total debt $ 2,103 $ 2,032 Less: Debt issuance costs (4) (4) Less: Unamortized discounts (4) (5) Less: Current portion of debt (215) (214) Total long-term debt $ 1,880 $ 1,809 As of April 1, 2023, the future maturities of debt are as follows (in millions): 2023 (9 months remaining) $ 121 2024 127 2025 66 2026 88 2027 1,701 Total future maturities of debt $ 2,103 All borrowings as of April 1, 2023 were denominated in U.S. Dollars. The estimated fair value of the Company’s debt approximated $2.0 billion as of April 1, 2023 and December 31, 2022, respectively. These fair value amounts, developed based on inputs classified as Level 2 within the fair value hierarchy, represent the estimated value at which the Company’s lenders could trade its debt within the financial markets and do not represent the settlement value of these liabilities to the Company. The fair value of debt will continue to vary each period based on a number of factors, including fluctuations in market interest rates as well as changes to the Company’s credit ratings. Term Loan A The principal on Term Loan A is due in quarterly installments, with the next quarterly installment due in March 2024 and the majority due upon maturity in 2027. The Company may make prepayments, as it did in the current period, in whole or in part, without premium or penalty, and would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions. As of April 1, 2023, the Term Loan A interest rate was 5.91%. Interest payments are made monthly and are subject to variable rates plus an applicable margin. Revolving Credit Facility The Company has a Revolving Credit Facility that is available for working capital and other general business purposes, including letters of credit. As of April 1, 2023, the Company had letters of credit totaling $7 million, which reduced funds available for borrowings under the Revolving Credit Facility from $1,500 million to $1,493 million. As of April 1, 2023, the Revolving Credit Facility had an average interest rate of 5.90%. Upon borrowing, interest payments are made monthly and are subject to variable rates plus an applicable margin. The Revolving Credit Facility matures on May 25, 2027. Receivables Financing Facilities The Company has two Receivables Financing Facilities with financial institutions that have a combined total borrowing limit of up to $280 million. As collateral, the Company pledges perfected first-priority security interests in its U.S. domestically originated accounts receivable. The Company has accounted for transactions under its Receivables Financing Facilities as secured borrowings. The Company’s first Receivables Financing Facility allows for borrowings of up to $180 million and matures on March 19, 2024. The Company’s second Receivable Financing Facility allows for borrowings of up to $100 million and matures on May 15, 2023. As of April 1, 2023, the Company’s Consolidated Balance Sheets included $632 million of receivables that were pledged under the two Receivables Financing Facilities. As of April 1, 2023, $204 million had been borrowed and was classified as current. Borrowings under the Receivables Financing Facilities bear interest at a variable rate plus an applicable margin. As of April 1, 2023, the Receivables Financing Facilities had an average interest rate of 5.75%. Interest is paid monthly on these borrowings. Each of the Company’s borrowing arrangements described above include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. The Company uses interest rate swaps to manage the interest rate risk associated with its debt. See Note 9 , Derivative Instruments for further information. As of April 1, 2023, the Company was in compliance with all debt covenants. |
Leases
Leases | 3 Months Ended |
Apr. 01, 2023 | |
Leases [Abstract] | |
Leases | Leases During the three months ended April 1, 2023, the Company recorded an additional $26 million of right-of-use (“ROU”) assets obtained in exchange for lease obligations primarily related to the commencement of a new office facility lease. Future minimum lease payments under non-cancellable leases as of April 1, 2023 were as follows (in millions): 2023 (9 months remaining) $ 36 2024 48 2025 35 2026 28 2027 21 Thereafter 72 Total future minimum lease payments $ 240 Less: Interest (47) Present value of lease liabilities $ 193 Reported as of April 1, 2023: Current portion of lease liabilities $ 36 Long-term lease liabilities 157 Present value of lease liabilities $ 193 The current portion of lease liabilities is included within Accrued liabilities on the Consolidated Balance Sheets. |
Accrued Liabilities, Commitment
Accrued Liabilities, Commitments and Contingencies | 3 Months Ended |
Apr. 01, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Accrued Liabilities, Commitments and Contingencies | Accrued Liabilities, Commitments and Contingencies Accrued Liabilities The components of Accrued liabilities are as follows (in millions): April 1, December 31, Settlement $ 180 $ 180 Unremitted cash collections due to banks on factored accounts receivable 138 130 Payroll and benefits 73 90 Customer rebates 50 55 Incentive compensation 48 100 Leases 36 37 Warranty 26 26 Foreign exchange contracts 24 19 Freight and duty 17 19 Other 79 88 Accrued liabilities $ 671 $ 744 Warranties The following table is a summary of the Company’s accrued warranty obligations (in millions): Three Months Ended April 1, April 2, Balance at the beginning of the year $ 26 $ 26 Warranty expense 7 8 Warranties fulfilled (7) (8) Balance at the end of the period $ 26 $ 26 Contingencies The Company is subject to a variety of investigations, claims, suits, and other legal proceedings that arise from time to time in the ordinary course of business, including but not limited to, intellectual property, employment, tort, and breach of contract matters. The Company currently believes that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on its business, cash flows, financial position, or results of operations. Any legal proceedings are subject to inherent uncertainties, and the Company’s view of these matters and their potential effects may change in the future. The Company records a liability for contingencies when a loss is deemed to be probable and the loss can be reasonably estimated. During the second quarter of 2022, the Company entered into a License and Settlement Agreement (“Settlement”) to resolve certain patent-related litigation. The payment terms under the Settlement consist of 8 quarterly payments of $45 million that began in the second quarter of 2022. The remaining portion is payable in the next 12 months and is included within Accrued liabilities on the Consolidated Balance Sheets. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 01, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate for the three months ended April 1, 2023 and April 2, 2022 was 18.9% and 18.0%, respectively. In the current period, the variance from the 21% federal statutory rate was primarily due to U.S. tax credits and the favorable impacts of foreign earnings subject to U.S. taxation. In the prior period, the variance from the 21% federal statutory rate was primarily attributable to lower tax rates on foreign earnings and U.S. tax credits. The increase in the effective tax rate from the prior period was primarily due to the increased statutory tax rate in the U.K. that became effective in 2023, partially offset by changes in the global mix of pretax earnings. The Company evaluated the provisions of the Inflation Reduction Act of 2022, signed into law on August 16, 2022; the American Rescue Plan Act, signed into law on March 11, 2021; the Consolidated Appropriations Act of 2021, signed into law on December 27, 2020; and the Coronavirus Aid, Relief and Economic Security Act, signed into law on March 27, 2020. The provisions of these laws did not have a significant impact on our effective tax rate in either the current or prior year. Management continues to monitor guidance regarding these laws and developments related to other coronavirus tax relief throughout the world for potential impacts. In December of 2021, the Organization for Economic Co-operation and Development (“OECD”) released Pillar Two Model Rules defining the global minimum tax rules, which contemplate a minimum tax rate of 15%. The OECD continues to release additional guidance on these rules and the framework calls for law enactment by OECD members to take effect in 2024. The Company will continue to monitor developments. The Company earns a significant amount of its operating income outside of the U.S. that is taxed at rates different than the U.S. federal statutory rate. The Company’s principal foreign jurisdictions that provide sources of operating income are the U.K. and Singapore. The Company has received an incentivized tax rate from the Singapore Economic Development Board, which reduces the income tax rate in that jurisdiction effective for calendar years 2019 to 2023. The Company has committed to making additional investments in Singapore over the period 2019 to 2023. However, should the Company not make these investments in accordance with the agreement, any incentive benefit would have to be repaid to the Singapore tax authorities. The Company is not permanently reinvested with respect to its U.S. directly-owned foreign subsidiaries. The Company is subject to U.S. income tax on substantially all foreign earnings under Global Intangible Low-Taxed Income, while any remaining foreign earnings are eligible for a dividends received deduction. As a result, future repatriation of earnings will not be subject to additional U.S. federal income tax but may be subject to currency translation gains or losses. Where required, the Company has recorded a deferred tax liability for foreign withholding taxes on current earnings. Additionally, gains and losses on any future taxable dispositions of U.S.-owned foreign affiliates continue to be subject to U.S. income tax. Management evaluates all jurisdictions based on historical pre-tax earnings and taxable income to determine the need for valuation allowances on a quarterly basis. Based on this analysis, a valuation allowance has been recorded for any jurisdictions where, in the Company’s judgment, tax benefits are not expected to be realized. There were no significant changes to our valuation allowances during the three months ended April 1, 2023. Uncertain Tax Positions As of April 1, 2023, no significant uncertain tax positions are expected to be settled within the next twelve months. Due to uncertainties in any tax audit or litigation outcome, the Company’s estimates of the ultimate settlements of uncertain tax positions may change and the actual tax benefits may differ significantly from estimates. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Apr. 01, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic net earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of diluted common shares outstanding. Diluted common shares outstanding is computed using the Treasury Stock method and, in periods of income, reflects the additional shares that would be outstanding if dilutive share-based compensation awards were converted into common shares during the period. Earnings per share (in millions, except share data): Three Months Ended April 1, April 2, Basic: Net income $ 150 $ 205 Weighted-average shares outstanding 51,420,536 53,021,423 Basic earnings per share $ 2.92 $ 3.86 Diluted: Net income $ 150 $ 205 Weighted-average shares outstanding 51,420,536 53,021,423 Dilutive shares 327,533 425,317 Diluted weighted-average shares outstanding 51,748,069 53,446,740 Diluted earnings per share $ 2.90 $ 3.83 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Apr. 01, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Stockholders’ equity includes certain items classified as AOCI, including: • Unrealized gain (loss) on anticipated sales hedging transactions relates to derivative instruments used to hedge the exposure related to currency exchange rates for forecasted Euro sales. These hedges are designated as cash flow hedges, and the Company defers income statement recognition of gains and losses until the hedged transaction occurs. See Note 9, Derivative Instruments for more details. • Foreign currency translation adjustments relate to the Company’s non-U.S. subsidiary companies that have designated a functional currency other than the U.S. Dollar. The Company is required to translate the subsidiary functional currency financial statements to U.S. Dollars using a combination of historical, period end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of AOCI. The changes in each component of AOCI during the three months ended April 1, 2023 and April 2, 2022 were as follows (in millions): Unrealized gain (loss) on sales hedging Foreign currency translation adjustments Total Balance at December 31, 2021 $ 18 $ (47) $ (29) Other comprehensive income (loss) before reclassifications 22 (5) 17 Amounts reclassified from AOCI (1) (16) — (16) Tax effect (1) — (1) Other comprehensive income (loss), net of tax 5 (5) — Balance at April 2, 2022 $ 23 $ (52) $ (29) Balance at December 31, 2022 $ (11) $ (55) $ (66) Other comprehensive (loss) income before reclassifications (7) 3 (4) Amounts reclassified from AOCI (1) 3 — 3 Tax effect 1 — 1 Other comprehensive (loss) income, net of tax (3) 3 — Balance at April 1, 2023 $ (14) $ (52) $ (66) (1) See Note 9, Derivative Instruments |
Accounts Receivable Factoring
Accounts Receivable Factoring | 3 Months Ended |
Apr. 01, 2023 | |
Transfers and Servicing [Abstract] | |
Accounts Receivable Factoring | Accounts Receivable Factoring The Company has Receivables Factoring arrangements, pursuant to which certain receivables are sold to banks without recourse in exchange for cash. Transactions under the Receivables Factoring arrangements are accounted for as sales under ASC 860, Transfers and Servicing of Financial Assets , with the sold receivables removed from the Company’s balance sheet. Under these Receivables Factoring arrangements, the Company does not maintain any beneficial interest in the receivables sold. The banks’ purchase of eligible receivables is subject to a maximum amount of uncollected receivables. The Company services the receivables on behalf of the banks, but otherwise maintains no significant continuing involvement with respect to the receivables. Sale proceeds that are representative of the fair value of factored receivables, less a factoring fee, are reflected in Cash flows from operating activities on the Consolidated Statements of Cash Flows, while sale proceeds in excess of the fair value of factored receivables are reflected in Cash flows from financing activities on the Consolidated Statements of Cash Flows. The Company has two Receivables Factoring arrangements. One arrangement allows for the factoring of up to $25 million of uncollected receivables originated from the Europe, Middle East, and Africa (“EMEA”) region. The second arrangement allows for the factoring of up to €150 million of uncollected receivables originated from the EMEA and Asia-Pacific regions. With respect to the second arrangement, the Company may be required to maintain a portion of sales proceeds as deposits in a restricted cash account that is released to the Company as it satisfies its obligations as servicer of sold receivables, which totaled $8 million and $12 million as of April 1, 2023 and December 31, 2022, respectively, and is classified within Prepaid expenses and other current assets on the Consolidated Balance Sheets. During the three months ended April 1, 2023 and April 2, 2022, the Company received cash proceeds of $373 million and $408 million, respectively, from the sales of accounts receivables under its factoring arrangements. As of April 1, 2023 and December 31, 2022, there were a total of $52 million and $61 million, respectively, of uncollected receivables that had been sold and removed from the Company’s Consolidated Balance Sheets. As servicer of sold receivables, the Company had $138 million and $130 million of obligations that were not yet remitted to banks as of April 1, 2023 and December 31, 2022, respectively. These obligations are included within Accrued liabilities on the Consolidated Balance Sheets, with changes in such obligations reflected within Net cash provided by (used in) financing activities on the Consolidated Statements of Cash Flows. Fees incurred in connection with these arrangements were not significant. |
Segment Information & Geographi
Segment Information & Geographic Data | 3 Months Ended |
Apr. 01, 2023 | |
Segment Reporting [Abstract] | |
Segment Information & Geographic Data | Segment Information & Geographic Data The Company’s operations consist of two reportable segments: Asset Intelligence & Tracking (“AIT”) and Enterprise Visibility & Mobility (“EVM”). The reportable segments have been identified based on the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker or “CODM”) to assess segment performance and allocate resources among the Company’s segments. The CODM reviews adjusted operating income to assess segment profitability. To the extent applicable, segment operating income excludes business acquisition purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, impairment of goodwill and other intangibles, exit and restructuring costs, as well as certain other non-recurring costs. Segment assets are not reviewed by the Company’s CODM and therefore are not disclosed below. Financial information by segment is presented as follows (in millions): Three Months Ended April 1, April 2, Net sales: AIT $ 491 $ 394 EVM 914 1,038 Total Net sales $ 1,405 $ 1,432 Operating income: AIT (2) $ 132 $ 60 EVM (2) 130 189 Total segment operating income 262 249 Corporate eliminations (1) (37) (37) Total Operating income $ 225 $ 212 (1) To the extent applicable, amounts included in Corporate eliminations consist of business acquisition purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, impairment of goodwill and other intangibles, exit and restructuring costs, as well as certain other non-recurring costs. (2) AIT and EVM segment operating income includes depreciation and share-based compensation expense. The amounts of depreciation and share-based compensation expense are proportionate to each segment’s Net sales. Information regarding the Company’s operations by geographic area is contained in the following tables. Net sales amounts are attributed to geographic area based on customer location. Net sales by region were as follows (in millions): Three Months Ended April 1, April 2, North America $ 725 $ 699 EMEA 443 500 Asia-Pacific 154 149 Latin America 83 84 Total Net sales $ 1,405 $ 1,432 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 01, 2023 | |
Accounting Policies [Abstract] | |
Revenues | Revenues The Company recognizes revenue to depict the transfer of goods, solutions or services to a customer at an amount that reflects the consideration which it expects to receive for providing those goods, solutions or services. Revenues for products are generally recognized upon shipment, whereas revenues for services and solution offerings are generally recognized over time by using an output or time-based method, assuming all other criteria for revenue recognition have been met. Revenues for software are recognized either upon delivery or over time using a time-based method, depending upon how control is transferred to the customer. In cases where a bundle of products, services, solutions and/or software are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control. |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities are measured using inputs from three levels of the fair value hierarchy in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements . 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 at the measurement date. ASC Topic 820 established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into the following three broad levels: • Level 1: Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs (e.g. U.S. Treasuries and money market funds). • Level 2: Observable prices that are based on inputs not quoted in active markets but corroborated by market data. • Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs to the extent possible. In addition, the Company considers counterparty credit risk in the assessment of fair value. |
Derivative Instruments | Derivative Instruments In the normal course of business, the Company is exposed to global market risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company uses derivative instruments to manage its exposure to such risks and may elect to designate certain derivatives as hedging instruments under ASC Topic 815, Derivatives and Hedging (“ASC 815”). The Company formally documents all relationships between designated hedging instruments and hedged items as well as its risk management objectives and strategies for undertaking hedge transactions. The Company does not hold or issue derivatives for trading or speculative purposes. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue By Product Category And Segment | The following table presents our Net sales disaggregated by product category for each of our segments (in millions): Three Months Ended April 1, 2023 April 2, 2022 Segment Tangible Products Services and Software Total Tangible Products Services and Software Total AIT $ 467 $ 24 $ 491 $ 370 $ 24 $ 394 EVM 703 211 914 837 201 1,038 Total $ 1,170 $ 235 $ 1,405 $ 1,207 $ 225 $ 1,432 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventories, Net | The components of Inventories, net are as follows (in millions): April 1, December 31, Raw materials $ 314 $ 293 Work in process 5 4 Finished goods 516 563 Total Inventories, net $ 835 $ 860 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Carried at Fair Value | The Company’s financial assets and liabilities carried at fair value as of April 1, 2023, are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Forward interest rate swap contracts (2) $ — $ 59 $ — $ 59 Investments related to the deferred compensation plan 36 — — 36 Total Assets at fair value $ 36 $ 59 $ — $ 95 Liabilities: Foreign exchange contracts (1) $ 5 $ 19 $ — $ 24 Liabilities related to the deferred compensation plan 36 — — 36 Total Liabilities at fair value $ 41 $ 19 $ — $ 60 The Company’s financial assets and liabilities carried at fair value as of December 31, 2022, are classified below (in millions): Level 1 Level 2 Level 3 Total Assets: Forward interest rate swap contracts (2) $ — $ 72 $ — $ 72 Investments related to the deferred compensation plan 35 — — 35 Total Assets at fair value $ 35 $ 72 $ — $ 107 Liabilities: Foreign exchange contracts (1) $ 5 $ 14 $ — $ 19 Liabilities related to the deferred compensation plan 35 — — 35 Total Liabilities at fair value $ 40 $ 14 $ — $ 54 (1) The fair value of the foreign exchange contracts is calculated as follows: • Fair value of regular forward contracts associated with forecasted sales hedges is calculated using the period-end exchange rate adjusted for current forward points. • Fair value of hedges against net assets denominated in foreign currencies is calculated at the period-end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at year end (Level 2). If this is the case, the fair value is calculated at the rate at which the hedge is being settled (Level 1). |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Assets and Liabilities | The following table presents the fair value of its derivative instruments (in millions): Asset (Liability) Fair Values as of Balance Sheets Classification April 1, December 31, Derivative instruments designated as hedges: Foreign exchange contracts Accrued liabilities $ (19) $ (14) Total derivative instruments designated as hedges $ (19) $ (14) Derivative instruments not designated as hedges: Forward interest rate swaps Prepaid expenses and other current assets $ 24 $ 25 Forward interest rate swaps Other long-term assets 35 47 Foreign exchange contracts Accrued liabilities (5) (5) Total derivative instruments not designated as hedges $ 54 $ 67 Total net derivative asset $ 35 $ 53 |
Schedule of Net Gains (Losses) from Changes in Fair Values of Derivatives Not Designated as Hedges | The following table presents the net (losses) gains from changes in fair values of derivatives that are not designated as hedges (in millions): (Losses) Gains Recognized in Income Three Months Ended Statements of Operations Classification April 1, April 2, Derivative instruments not designated as hedges: Foreign exchange contracts Foreign exchange gain $ (5) $ (1) Forward interest rate swaps Interest (expense) income, net (7) 34 Total (loss) gain recognized in income $ (12) $ 33 |
Schedule of Notional Value and Net Fair Value of Outstanding Contracts | The notional values and the net fair values of these outstanding contracts were as follows (in millions): April 1, December 31, Notional balance of outstanding contracts: British Pound/U.S. Dollar £ 7 £ 11 Euro/U.S. Dollar € 169 € 191 Euro/Czech Koruna € 15 € 15 Singapore Dollar/U.S. Dollar S$ 16 S$ 5 Mexican Peso/U.S. Dollar Mex$ 139 Mex$ 372 Polish Zloty/U.S. Dollar zł 63 zł 47 Net fair value of liabilities of outstanding contracts $ 5 $ 5 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Value of Long-term Debt | The following table shows the carrying value of the Company’s debt (in millions): April 1, December 31, Term Loan A $ 1,684 $ 1,728 Revolving Credit Facility 215 50 Receivables Financing Facilities 204 254 Total debt $ 2,103 $ 2,032 Less: Debt issuance costs (4) (4) Less: Unamortized discounts (4) (5) Less: Current portion of debt (215) (214) Total long-term debt $ 1,880 $ 1,809 |
Schedule of Future Maturities of Long-term Debt | As of April 1, 2023, the future maturities of debt are as follows (in millions): 2023 (9 months remaining) $ 121 2024 127 2025 66 2026 88 2027 1,701 Total future maturities of debt $ 2,103 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancellable Operating Leases | Future minimum lease payments under non-cancellable leases as of April 1, 2023 were as follows (in millions): 2023 (9 months remaining) $ 36 2024 48 2025 35 2026 28 2027 21 Thereafter 72 Total future minimum lease payments $ 240 Less: Interest (47) Present value of lease liabilities $ 193 Reported as of April 1, 2023: Current portion of lease liabilities $ 36 Long-term lease liabilities 157 Present value of lease liabilities $ 193 |
Accrued Liabilities, Commitme_2
Accrued Liabilities, Commitments and Contingencies (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Components of Accrued Liabilities | The components of Accrued liabilities are as follows (in millions): April 1, December 31, Settlement $ 180 $ 180 Unremitted cash collections due to banks on factored accounts receivable 138 130 Payroll and benefits 73 90 Customer rebates 50 55 Incentive compensation 48 100 Leases 36 37 Warranty 26 26 Foreign exchange contracts 24 19 Freight and duty 17 19 Other 79 88 Accrued liabilities $ 671 $ 744 |
Schedule of Accrued Warranty Obligations | The following table is a summary of the Company’s accrued warranty obligations (in millions): Three Months Ended April 1, April 2, Balance at the beginning of the year $ 26 $ 26 Warranty expense 7 8 Warranties fulfilled (7) (8) Balance at the end of the period $ 26 $ 26 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of (Loss) Earnings Per Share | Earnings per share (in millions, except share data): Three Months Ended April 1, April 2, Basic: Net income $ 150 $ 205 Weighted-average shares outstanding 51,420,536 53,021,423 Basic earnings per share $ 2.92 $ 3.86 Diluted: Net income $ 150 $ 205 Weighted-average shares outstanding 51,420,536 53,021,423 Dilutive shares 327,533 425,317 Diluted weighted-average shares outstanding 51,748,069 53,446,740 Diluted earnings per share $ 2.90 $ 3.83 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Equity [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Income (Loss) | The changes in each component of AOCI during the three months ended April 1, 2023 and April 2, 2022 were as follows (in millions): Unrealized gain (loss) on sales hedging Foreign currency translation adjustments Total Balance at December 31, 2021 $ 18 $ (47) $ (29) Other comprehensive income (loss) before reclassifications 22 (5) 17 Amounts reclassified from AOCI (1) (16) — (16) Tax effect (1) — (1) Other comprehensive income (loss), net of tax 5 (5) — Balance at April 2, 2022 $ 23 $ (52) $ (29) Balance at December 31, 2022 $ (11) $ (55) $ (66) Other comprehensive (loss) income before reclassifications (7) 3 (4) Amounts reclassified from AOCI (1) 3 — 3 Tax effect 1 — 1 Other comprehensive (loss) income, net of tax (3) 3 — Balance at April 1, 2023 $ (14) $ (52) $ (66) (1) See Note 9, Derivative Instruments |
Segment Information & Geograp_2
Segment Information & Geographic Data (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information by Segments | Financial information by segment is presented as follows (in millions): Three Months Ended April 1, April 2, Net sales: AIT $ 491 $ 394 EVM 914 1,038 Total Net sales $ 1,405 $ 1,432 Operating income: AIT (2) $ 132 $ 60 EVM (2) 130 189 Total segment operating income 262 249 Corporate eliminations (1) (37) (37) Total Operating income $ 225 $ 212 (1) To the extent applicable, amounts included in Corporate eliminations consist of business acquisition purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, impairment of goodwill and other intangibles, exit and restructuring costs, as well as certain other non-recurring costs. (2) AIT and EVM segment operating income includes depreciation and share-based compensation expense. The amounts of depreciation and share-based compensation expense are proportionate to each segment’s Net sales. |
Schedule of Net Sales to Customers by Geographic Region | Net sales by region were as follows (in millions): Three Months Ended April 1, April 2, North America $ 725 $ 699 EMEA 443 500 Asia-Pacific 154 149 Latin America 83 84 Total Net sales $ 1,405 $ 1,432 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue By Product Category And Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total Net sales | $ 1,405 | $ 1,432 |
Tangible Products | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 1,170 | 1,207 |
Services and software | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 235 | 225 |
AIT | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 491 | 394 |
AIT | Tangible Products | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 467 | 370 |
AIT | Services and software | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 24 | 24 |
EVM | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 914 | 1,038 |
EVM | Tangible Products | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 703 | 837 |
EVM | Services and software | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | $ 211 | $ 201 |
Revenues - Performance Obligati
Revenues - Performance Obligation (Details) - USD ($) $ in Millions | Apr. 01, 2023 | Dec. 31, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 1,105 | |
Expected recognition period | 2 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-02 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 1,144 | |
Expected recognition period | 2 years |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Apr. 01, 2023 | Apr. 02, 2022 | Dec. 31, 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Capitalized contract, impairment loss | $ 0 | $ 0 | |
Deferred revenue | 780,000,000 | $ 758,000,000 | |
Revenue recognized which was previously included in deferred revenue | 135,000,000 | $ 129,000,000 | |
Prepaid expenses and other current assets | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Contract assets | $ 20,000,000 | $ 16,000,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Apr. 01, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 314 | $ 293 |
Work in process | 5 | 4 |
Finished goods | 516 | 563 |
Total Inventories, net | $ 835 | $ 860 |
Investments (Details)
Investments (Details) - USD ($) | 3 Months Ended | ||
Apr. 01, 2023 | Apr. 02, 2022 | Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |||
Equity securities held | $ 113,000,000 | $ 113,000,000 | |
Purchases of long-term investments | 1,000,000 | $ 5,000,000 | |
Realized gain (loss) on equity securities | $ (1,000,000) | $ 0 |
Exit and Restructuring Costs (D
Exit and Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 01, 2023 | Apr. 02, 2022 | Oct. 01, 2022 | |
Restructuring Cost and Reserve [Line Items] | |||
Exit and restructuring costs | $ 10 | $ 0 | |
2022 Productivity Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Estimated remaining costs | $ 25 | ||
Exit and restructuring charges - cumulative | 22 | ||
Exit and restructuring costs | $ 10 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Carried at Fair Value (Details) - USD ($) $ in Millions | Apr. 01, 2023 | Dec. 31, 2022 |
Assets: | ||
Total Assets at fair value | $ 95 | $ 107 |
Liabilities: | ||
Total Liabilities at fair value | 60 | 54 |
Level 1 | ||
Assets: | ||
Total Assets at fair value | 36 | 35 |
Liabilities: | ||
Total Liabilities at fair value | 41 | 40 |
Level 2 | ||
Assets: | ||
Total Assets at fair value | 59 | 72 |
Liabilities: | ||
Total Liabilities at fair value | 19 | 14 |
Level 3 | ||
Assets: | ||
Total Assets at fair value | 0 | 0 |
Liabilities: | ||
Total Liabilities at fair value | 0 | 0 |
Forward interest rate swaps | ||
Assets: | ||
Derivative assets | 59 | |
Forward interest rate swaps | Level 1 | ||
Assets: | ||
Derivative assets | 0 | |
Forward interest rate swaps | Level 2 | ||
Assets: | ||
Derivative assets | 59 | |
Forward interest rate swaps | Level 3 | ||
Assets: | ||
Derivative assets | 0 | |
Investments related to the deferred compensation plan | ||
Assets: | ||
Investments related to the deferred compensation plan | 36 | 35 |
Investments related to the deferred compensation plan | Level 1 | ||
Assets: | ||
Investments related to the deferred compensation plan | 36 | 35 |
Investments related to the deferred compensation plan | Level 2 | ||
Assets: | ||
Investments related to the deferred compensation plan | 0 | 0 |
Investments related to the deferred compensation plan | Level 3 | ||
Assets: | ||
Investments related to the deferred compensation plan | 0 | 0 |
Foreign exchange contracts | ||
Assets: | ||
Derivative assets | 72 | |
Liabilities: | ||
Derivative liabilities | 24 | 19 |
Foreign exchange contracts | Level 1 | ||
Assets: | ||
Derivative assets | 0 | |
Liabilities: | ||
Derivative liabilities | 5 | 5 |
Foreign exchange contracts | Level 2 | ||
Assets: | ||
Derivative assets | 72 | |
Liabilities: | ||
Derivative liabilities | 19 | 14 |
Foreign exchange contracts | Level 3 | ||
Assets: | ||
Derivative assets | 0 | |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Liabilities related to the deferred compensation plan | ||
Liabilities: | ||
Liabilities related to the deferred compensation plan | 36 | 35 |
Liabilities related to the deferred compensation plan | Level 1 | ||
Liabilities: | ||
Liabilities related to the deferred compensation plan | 36 | 35 |
Liabilities related to the deferred compensation plan | Level 2 | ||
Liabilities: | ||
Liabilities related to the deferred compensation plan | 0 | 0 |
Liabilities related to the deferred compensation plan | Level 3 | ||
Liabilities: | ||
Liabilities related to the deferred compensation plan | $ 0 | $ 0 |
Derivative Instruments - Deriva
Derivative Instruments - Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | Apr. 01, 2023 | Dec. 31, 2022 |
Derivative [Line Items] | ||
Total net derivative asset | $ 35 | $ 53 |
Derivative instruments designated as hedges | ||
Derivative [Line Items] | ||
Total net derivative asset | (19) | (14) |
Derivative instruments designated as hedges | Accrued liabilities | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Total Liabilities at fair value | (19) | (14) |
Derivative instruments not designated as hedges | ||
Derivative [Line Items] | ||
Total net derivative asset | 54 | 67 |
Derivative instruments not designated as hedges | Accrued liabilities | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Total Liabilities at fair value | (5) | (5) |
Derivative instruments not designated as hedges | Prepaid expenses and other current assets | Forward interest rate swaps | ||
Derivative [Line Items] | ||
Total Assets at fair value | 24 | 25 |
Derivative instruments not designated as hedges | Other long-term assets | Forward interest rate swaps | ||
Derivative [Line Items] | ||
Total Assets at fair value | $ 35 | $ 47 |
Derivative Instruments - Net Ga
Derivative Instruments - Net Gains (Losses) from Changes in Fair Value (Details) - Derivative instruments not designated as hedges - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total (loss) gain recognized in income | $ (12) | $ 33 |
Foreign exchange gain | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total (loss) gain recognized in income | (5) | (1) |
Interest (expense) income, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total (loss) gain recognized in income | $ (7) | $ 34 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) € in Millions | 3 Months Ended | |||
Apr. 01, 2023 USD ($) | Apr. 02, 2022 USD ($) | Apr. 01, 2023 EUR (€) | Dec. 31, 2022 EUR (€) | |
Change in unrealized gain (loss) on anticipated sales hedging: | ||||
Increase for gross asset and liability presentation | $ 4,000,000 | |||
Derivative instruments not designated as hedges | ||||
Change in unrealized gain (loss) on anticipated sales hedging: | ||||
Gain (loss) on contract | $ (12,000,000) | $ 33,000,000 | ||
Foreign currency exchange forward | Derivative instruments designated as hedges | Cash flow hedges | ||||
Change in unrealized gain (loss) on anticipated sales hedging: | ||||
Maturity period | 12 months | |||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Total Net sales | Total Net sales | ||
Gain (loss) on contract | $ (3,000,000) | $ 16,000,000 | ||
Derivative forward long-term interest rate swap | € | € 669 | € 549 | ||
Foreign currency exchange forward | Derivative instruments not designated as hedges | ||||
Change in unrealized gain (loss) on anticipated sales hedging: | ||||
Maturity period | 1 month | |||
Forward interest rate swaps | Derivative instruments designated as hedges | ||||
Change in unrealized gain (loss) on anticipated sales hedging: | ||||
Derivative forward long-term interest rate swap | $ 800,000,000 | |||
Forward interest rate swaps | Derivative instruments not designated as hedges | ||||
Change in unrealized gain (loss) on anticipated sales hedging: | ||||
Gain (loss) on contract | $ (7,000,000) | $ 34,000,000 |
Derivative Instruments - Notion
Derivative Instruments - Notional Values and Net Fair Value of Outstanding Contracts (Details) - Foreign currency exchange forward € in Millions, £ in Millions, zł in Millions, $ in Millions, $ in Millions, $ in Millions | Apr. 01, 2023 GBP (£) | Apr. 01, 2023 EUR (€) | Apr. 01, 2023 SGD ($) | Apr. 01, 2023 MXN ($) | Apr. 01, 2023 PLN (zł) | Apr. 01, 2023 USD ($) | Dec. 31, 2022 GBP (£) | Dec. 31, 2022 EUR (€) | Dec. 31, 2022 SGD ($) | Dec. 31, 2022 MXN ($) | Dec. 31, 2022 PLN (zł) | Dec. 31, 2022 USD ($) |
U.S. dollar | ||||||||||||
Derivative [Line Items] | ||||||||||||
Notional balance of outstanding contracts | £ 7 | € 169 | $ 16 | $ 139 | zł 63 | £ 11 | € 191 | $ 5 | $ 372 | zł 47 | ||
Net fair value of liabilities of outstanding contracts | $ | $ 5 | $ 5 | ||||||||||
Czech Republic, Koruny | ||||||||||||
Derivative [Line Items] | ||||||||||||
Notional balance of outstanding contracts | € | € 15 | € 15 |
Long-Term Debt - Carrying Value
Long-Term Debt - Carrying Value of Debt (Details) - USD ($) $ in Millions | Apr. 01, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 2,103 | $ 2,032 |
Less: Debt issuance costs | (4) | (4) |
Less: Unamortized discounts | (4) | (5) |
Less: Current portion of debt | (215) | (214) |
Total long-term debt | 1,880 | 1,809 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt | 215 | 50 |
Term Loan A | Loans Payable | ||
Debt Instrument [Line Items] | ||
Total debt | 1,684 | 1,728 |
Receivables Financing Facilities | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt | $ 204 | $ 254 |
Long-Term Debt - Future Maturit
Long-Term Debt - Future Maturities of Long-Term Debt (Details) $ in Millions | Apr. 01, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2023 (9 months remaining) | $ 121 |
2024 | 127 |
2025 | 66 |
2026 | 88 |
2027 | 1,701 |
Total future maturities of debt | $ 2,103 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) $ in Billions | Apr. 01, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Estimated fair value debt | $ 2 | $ 2 |
Long-Term Debt - Term Loan A (D
Long-Term Debt - Term Loan A (Details) | Apr. 01, 2023 |
Loans Payable | Term Loan A | |
Debt Instrument [Line Items] | |
Percentage bearing variable interest, percentage rate | 5.91% |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facility (Details) - Revolving Credit Facility | Apr. 01, 2023 USD ($) |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 1,500,000,000 |
Average interest rate | 5.90% |
Amended and Restated Credit Agreement | |
Line of Credit Facility [Line Items] | |
Letters of credit | $ 7,000,000 |
Funds available for other borrowing | $ 1,493,000,000 |
Long-Term Debt - Receivable Fin
Long-Term Debt - Receivable Financing Facility (Details) - Secured Debt | Apr. 01, 2023 USD ($) facility |
Receivables Financing Facilities | |
Line of Credit Facility [Line Items] | |
Number of receivable financing facilities | facility | 2 |
Total borrowing limits (up to) | $ 280,000,000 |
Accounts receivable pledged | 632,000,000 |
Current line of credit | $ 204,000,000 |
Revolving credit facility interest rate | 5.75% |
First Receivables Financing Facility | |
Line of Credit Facility [Line Items] | |
Total borrowing limits (up to) | $ 180,000,000 |
Second Receivables Financing Facility | |
Line of Credit Facility [Line Items] | |
Total borrowing limits (up to) | $ 100,000,000 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 3 Months Ended |
Apr. 01, 2023 USD ($) | |
Leases [Abstract] | |
ROU assets obtained in exchange for lease obligations | $ 26 |
Leases - Future Minimum lease P
Leases - Future Minimum lease Payments Under Non-cancellable Leases (Details) - USD ($) $ in Millions | Apr. 01, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2023 (9 months remaining) | $ 36 | |
2024 | 48 | |
2025 | 35 | |
2026 | 28 | |
2027 | 21 | |
Thereafter | 72 | |
Total future minimum lease payments | 240 | |
Less: Interest | (47) | |
Present value of lease liabilities | 193 | |
Current portion of lease liabilities | 36 | $ 37 |
Long-term lease liabilities | $ 157 | $ 139 |
Accrued Liabilities, Commitme_3
Accrued Liabilities, Commitments and Contingencies - Components of Accrued Liabilities (Details) - USD ($) $ in Millions | Apr. 01, 2023 | Dec. 31, 2022 | Apr. 02, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||||
Settlement | $ 180 | $ 180 | ||
Unremitted cash collections due to banks on factored accounts receivable | 138 | 130 | ||
Payroll and benefits | 73 | 90 | ||
Customer rebates | 50 | 55 | ||
Incentive compensation | 48 | 100 | ||
Leases | 36 | 37 | ||
Warranty | 26 | 26 | $ 26 | $ 26 |
Foreign exchange contracts | 24 | 19 | ||
Freight and duty | 17 | 19 | ||
Other | 79 | 88 | ||
Accrued liabilities | $ 671 | $ 744 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities | Accrued liabilities |
Accrued Liabilities, Commitme_4
Accrued Liabilities, Commitments and Contingencies - Accrued Warranty Obligations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Balance at the beginning of the year | $ 26 | $ 26 |
Warranty expense | 7 | 8 |
Warranties fulfilled | (7) | (8) |
Balance at the end of the period | $ 26 | $ 26 |
Accrued Liabilities, Commitme_5
Accrued Liabilities, Commitments and Contingencies - Additional Information (Details) - Settlement $ in Millions | 3 Months Ended |
Jul. 02, 2022 USD ($) payment | |
Loss Contingencies [Line Items] | |
Number of quarterly payments | payment | 8 |
Quarterly payment | $ | $ 45 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rates | 18.90% | 18% |
Earnings Per Share - Computatio
Earnings Per Share - Computation of (Loss) Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Basic: | ||
Net income | $ 150 | $ 205 |
Weighted-average shares outstanding (in shares) | 51,420,536 | 53,021,423 |
Basic earnings per share (in USD per share) | $ 2.92 | $ 3.86 |
Diluted: | ||
Net income | $ 150 | $ 205 |
Weighted-average shares outstanding (in shares) | 51,420,536 | 53,021,423 |
Dilutive shares (in shares) | 327,533 | 425,317 |
Diluted weighted-average shares outstanding (in shares) | 51,748,069 | 53,446,740 |
Diluted earnings per share (in USD per share) | $ 2.90 | $ 3.83 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive shares (in shares) | 56,291 | 40,771 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | $ 2,733 | $ 2,984 |
Other comprehensive income (loss) before reclassifications | (4) | 17 |
Amounts reclassified from AOCI | 3 | (16) |
Tax effect | 1 | (1) |
Other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | 2,891 | 2,906 |
Total | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (66) | (29) |
Ending balance | (66) | (29) |
Unrealized gain (loss) on sales hedging | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (11) | 18 |
Other comprehensive income (loss) before reclassifications | (7) | 22 |
Amounts reclassified from AOCI | 3 | (16) |
Tax effect | 1 | (1) |
Other comprehensive income (loss), net of tax | (3) | 5 |
Ending balance | (14) | 23 |
Foreign currency translation adjustments | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (55) | (47) |
Other comprehensive income (loss) before reclassifications | 3 | (5) |
Amounts reclassified from AOCI | 0 | 0 |
Tax effect | 0 | 0 |
Other comprehensive income (loss), net of tax | 3 | (5) |
Ending balance | $ (52) | $ (52) |
Accounts Receivable Factoring (
Accounts Receivable Factoring (Details) € in Millions, $ in Millions | 3 Months Ended | |||
Apr. 01, 2023 USD ($) agreement | Apr. 02, 2022 USD ($) | Apr. 01, 2023 EUR (€) agreement | Dec. 31, 2022 USD ($) | |
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||||
Remaining active agreements | agreement | 2 | 2 | ||
Proceeds from sale of accounts receivables | $ 373 | $ 408 | ||
Uncollected receivables sold and removed from the balance sheet | 52 | $ 61 | ||
Unremitted cash collections due to banks on factored accounts receivable | 138 | 130 | ||
Prepaid expenses and other current assets | ||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||||
Deposits | 8 | $ 12 | ||
EMEA | ||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||||
Eligible uncollected receivables available (up to) | $ 25 | |||
EMEA And Asia Pacific | ||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||||
Eligible uncollected receivables available (up to) | € | € 150 |
Segment Information & Geograp_3
Segment Information & Geographic Data - Additional Information (Details) | 3 Months Ended |
Apr. 01, 2023 segment | |
Segment Reporting [Abstract] | |
Reportable segments | 2 |
Segment Information & Geograp_4
Segment Information & Geographic Data - Financial Information by Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Net sales: | ||
Total Net sales | $ 1,405 | $ 1,432 |
Operating income: | ||
Operating income | 225 | 212 |
AIT | ||
Net sales: | ||
Total Net sales | 491 | 394 |
EVM | ||
Net sales: | ||
Total Net sales | 914 | 1,038 |
Operating segments | ||
Operating income: | ||
Operating income | 262 | 249 |
Operating segments | AIT | ||
Net sales: | ||
Total Net sales | 491 | 394 |
Operating income: | ||
Operating income | 132 | 60 |
Operating segments | EVM | ||
Net sales: | ||
Total Net sales | 914 | 1,038 |
Operating income: | ||
Operating income | 130 | 189 |
Corporate eliminations | ||
Operating income: | ||
Operating income | $ (37) | $ (37) |
Segment Information & Geograp_5
Segment Information & Geographic Data - Net Sales to Customers by Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Apr. 02, 2022 | |
Segment Reporting Information [Line Items] | ||
Total Net sales | $ 1,405 | $ 1,432 |
North America | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 725 | 699 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 443 | 500 |
Asia-Pacific | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 154 | 149 |
Latin America | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | $ 83 | $ 84 |