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Other Financial Data | 12 Months Ended
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Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Other Financial Data | Other Financial Data Statement of Operations Information Other Charges (Income) Other charges (income) included in Operating earnings consist of the following:
Years ended December 31 (in millions) | 2022 |  | 2021 |  | 2020
Other charges (income): |  |  |  |  |
Intangibles amortization (Note 15) | $ | 257 |  |  | $ | 236 |  |  | $ | 215 |
Reorganization of businesses (Note 14) | 18 |  |  | 24 |  |  | 57 |
Legal Settlements | 23 |  |  | 3 |  |  | 9 |
Fixed asset impairments | 12 |  |  | — |  |  | 5 |
Gain on sale of property, plant, and equipment | — |  |  | — |  |  | (50) |
Operating lease asset impairments | 24 |  |  | 10 |  |  | — |
Acquisition-related transaction fees | 23 |  |  | 15 |  |  | 9 |
Gain on Hytera legal settlement | (15) |  |  | — |  |  | — |
Other | (3) |  |  | (2) |  |  | 1 |
| $ | 339 |  |  | $ | 286 |  |  | $ | 246 |
During the year ended December 31, 2022, the Company recognized a gain of $15 million related to the recovery, through legal proceedings to seize and liquidate assets, of financial receivables owed to the Company by the bankruptcy estate of two U.S. subsidiaries of Hytera Communications Corporation Limited of Shenzhen, China. Refer also to "Hytera Bankruptcy Proceedings" in Note 12, "Commitments and Contingencies" to our consolidated financial statements included in this "Part I, Item 8.Financial Statements and Supplementary Data" of this Form 10-K for additional information related to these proceedings. During the year ended December 31, 2022, the Company recognized $24 million of operating lease asset impairments primarily relating to the Company's reduction of its corporate real estate footprint. This loss has been recognized in Other charges in the Company's Consolidated Statements of Operations. During the year ended December 31, 2020, the Company recorded a $50 million gain on the sale of a manufacturing facility in Europe. Other Income (Expense) Interest expense, net, and Other both included in Other income (expense) consist of the following:
Years ended December 31 (in millions) | 2022 |  | 2021 |  | 2020
Interest expense, net: |  |  |  |  |
Interest expense | $ | (240) |  |  | $ | (215) |  |  | $ | (233) |
Interest income | 14 |  |  | 7 |  |  | 13 |
| $ | (226) |  |  | $ | (208) |  |  | $ | (220) |
Other, net: |  |  |  |  |
Net periodic pension and postretirement benefit (Note 8) | $ | 123 |  |  | $ | 123 |  |  | $ | 81 |
Loss from the extinguishment of long-term debt (Note 5) | (6) |  |  | (18) |  |  | (56) |
Investment impairments | (1) |  |  | — |  |  | (4) |
Foreign currency gain (loss) | 37 |  |  | 17 |  |  | (44) |
Gain (loss) on derivative instruments | (61) |  |  | (30) |  |  | 25 |
Gains (loss) on equity method investments | (3) |  |  | 5 |  |  | 3 |
Fair value adjustments to equity investments | (30) |  |  | (8) |  |  | 6 |
Gain on TETRA Ireland equity method investment | 21 |  |  | — |  |  | — |
Other | (3) |  |  | 3 |  |  | 2 |
| $ | 77 |  |  | $ | 92 |  |  | $ | 13 |
The Company previously held a minority ownership interest in TETRA Ireland, and, upon acquisition of 100% of the equity of TETRA Ireland on March 23, 2022, recorded a $21 million gain to adjust the Company's initial equity method investment to fair value during the year ended December 31, 2022. Refer to "Note 15:" Intangible Assets and Goodwill" to the Company's consolidated financial statements included in this "Part II.Item 8. Financial Statements and Supplementary Data" of this Form 10-K for further information related to this acquisition. Earnings Per Common Share Basic and diluted earnings per common share from net earnings attributable to Motorola Solutions, Inc. are computed as follows:
|  |  |  |  |  |  | Amounts attributable to Motorola Solutions, Inc. common stockholders
|  |  | Net Earnings
Years ended December 31 |  |  |  |  |  |  | 2022 |  | 2021 |  | 2020
Basic earnings per common share: |  |  |  |  |  |  |  |  |  |  |
Earnings |  |  |  |  |  |  | $ | 1,363 |  |  | $ | 1,245 |  |  | $ | 949 |
Weighted average common shares outstanding |  |  |  |  |  |  | 167.5 |  |  | 169.2 |  |  | 170.0 |
Per share amount |  |  |  |  |  |  | $ | 8.14 |  |  | $ | 7.36 |  |  | $ | 5.58 |
Diluted earnings per common share: |  |  |  |  |  |  |  |  |  |  |
Earnings |  |  |  |  |  |  | $ | 1,363 |  |  | $ | 1,245 |  |  | $ | 949 |
Weighted average common shares outstanding |  |  |  |  |  |  | 167.5 |  |  | 169.2 |  |  | 170.0 |
Add effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |
Share-based awards |  |  |  |  |  |  | 3.7 |  |  | 4.0 |  |  | 4.1 |
1.75% senior convertible notes |  |  |  |  |  |  | 0.7 |  |  | 0.4 |  |  | — |
Diluted weighted average common shares outstanding |  |  |  |  |  |  | 171.9 |  |  | 173.6 |  |  | 174.1 |
Per share amount |  |  |  |  |  |  | $ | 7.93 |  |  | $ | 7.17 |  |  | $ | 5.45 |
In the computation of diluted earnings per common share for the year ended December 31, 2022, the assumed exercise of 0.3 million options, including 0.1 million subject to market-based contingent option agreements, were excluded because their inclusion would have been antidilutive. In the computation of diluted earnings per common share for the year ended December 31, 2021, the assumed exercise of 0.2 million options, including 0.1 million subject to market-based contingent option agreements, were excluded because their inclusion would have been antidilutive. In the computation of diluted earnings per common share for the year ended December 31, 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 December 31, 2022, the Company had $1.0 billion of senior convertible notes outstanding, which mature on September 15, 2024 ("Senior Convertible Notes"). The notes are convertible based on a rate of 4.9140 per $1,000 principal amount as of December 31, 2022 (which is equal to an initial conversion price of $203.50 per share), adjusted for dividends declared through the date of settlement. The notes became fully convertible as of September 5, 2021, providing the holders the option to convert all or any portion of their Senior Convertible Notes. In November 2021, the Company's Board of Directors approved an irrevocable determination requiring the future settlement of the principal amount of the Senior Convertible Notes to be in cash. Because the Company has irrevocably decided to settle the principal amount of the Senior Convertible Notes in cash, the Company did 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 exceeded the conversion price, which first occurred for the year ended December 31, 2021. Upon conversion of the Senior Convertible Notes, the Company has the option to settle the conversion spread in cash or shares. The Company included the number of shares that would be issuable upon conversion in the Company’s computation of diluted earnings per share, based on the amount by which the average stock price exceeded the conversion price for the period ended December 31, 2022. The value by which the Senior Convertible Notes exceeded their principal amount if converted as of December 31, 2022 was $304 million. Refer to "Note 5: Debt and Credit Facilities" in this “Part II. Item 8. Financial Statements and Supplementary Data” of this Form 10-K for a further discussion of the Senior Convertible Notes. Balance Sheet Information Accounts Receivable, Net Accounts receivable, net, consists of the following:
December 31 | 2022 |  | 2021
Accounts receivable | $ | 1,579 |  |  | $ | 1,456 |
Less allowance for credit losses | (61) |  |  | (70) |
| $ | 1,518 |  |  | $ | 1,386 |
Inventories, Net Inventories, net, consist of the following:
December 31 | 2022 |  | 2021
Finished goods | $ | 354 |  |  | $ | 268 |
Work-in-process and production materials | 829 |  |  | 643 |
| 1,183 |  |  | 911 |
Less inventory reserves | (128) |  |  | (123) |
| $ | 1,055 |  |  | $ | 788 |
Other Current Assets Other current assets consist of the following:
December 31 | 2022 |  | 2021
Current contract cost assets (Note 2) | $ | 61 |  |  | $ | 30 |
Contractor receivables | 47 |  |  | 7 |
Tax-related deposits (Note 7) | 33 |  |  | 41 |
Other | 242 |  |  | 181 |
| $ | 383 |  |  | $ | 259 |
Property, Plant and Equipment, Net Property, plant and equipment, net, consist of the following:
December 31 | 2022 |  | 2021
Land | $ | 5 |  |  | $ | 5 |
Leasehold improvements | 456 |  |  | 474 |
Machinery and equipment | 2,303 |  |  | 2,439 |
| 2,764 |  |  | 2,918 |
Less accumulated depreciation | (1,837) |  |  | (1,876) |
| $ | 927 |  |  | $ | 1,042 |
During the year ended December 31, 2022, the Company signed a mutual agreement with the Home Office of the United Kingdom (the "Home Office") for the Company to exit the Emergency Services Network ("ESN") communications systems contract early, inclusive of twelve months of transition services through the end of 2023. During the third quarter of 2022, the Company determined that the future service potential of the ESN communications systems contract was limited, based on the Company's intention to terminate the contract in advance of the contracted service term. The Company thus recorded a fixed asset impairment loss of $147 million related to assets constructed and used in the deployment of the contract with the Home Office based on its expectation that, more likely than not, the ESN long-lived asset group would be disposed of significantly before the end of its previously estimated useful life. The impairment loss was recorded in the Software and Services segment within cost of sales in the Consolidated Statements of Operations. The recognized impairment loss represents the amount by which the carrying amount of the asset group exceeded the fair value under a measurement of discounted cash flows. Depreciation expense for the years ended December 31, 2022, 2021, and 2020 was $183 million, $202 million and $194 million, respectively. Investments Investments consist of the following:
December 31 | 2022 |  | 2021 |  |  |  |
Common stock | $ | 21 |  |  | $ | 69 |  |  |  |  |
Strategic investments, at cost | 45 |  |  | 35 |  |  |  |  |
Company-owned life insurance policies | 69 |  |  | 81 |  |  |  |  |
Equity method investments | 12 |  |  | 24 |  |  |  |  |
| $ | 147 |  |  | $ | 209 |  |  |  |  |
During the year ended December 31, 2021, the Company paid $50 million for equity securities of NewHold Investment Corp. ("NHIC"), a special purpose acquisition company (SPAC) that completed a business combination with Evolv Technologies, Inc. After the business combination, NHIC was renamed “Evolv Technologies Holdings, Inc.” During the years ended December 31, 2022 and December 31, 2021, the Company recognized a loss of $11 million and $30 million, respectively, in Other income (expense) within the Consolidated Statements of Operations related to a decrease in the fair value of the investment. During the year ended December 31, 2022, the Company sold $15 million of equity securities from a single investment, recognizing losses of $11 million in Other income (expense) within the Consolidated Statements of Operations. Strategic investments include investments in non-public technology-driven startup companies. Strategic investments do not have a readily determinable fair value and are recorded at cost, less any impairment, and adjusted for changes resulting from observable, orderly transactions for identical or similar securities. During the year ended December 31, 2022, the Company recorded a $1 million investment impairment charge, compared to no investment impairment charges during the year ended December 31, 2021 and $4 million in investment impairments charges during the year ended December 31, 2020, representing other-than-temporary declines in the value of the Company’s strategic equity investment portfolio. Other Assets Other assets consist of the following:
December 31 | 2022 |  | 2021
Defined benefit plan assets (Note 8) | $ | 164 |  |  | $ | 365 |
Non-current contract cost assets (Note 2) | 130 |  |  | 124 |
Other | 16 |  |  | 69 |
| $ | 310 |  |  | $ | 558 |
Accrued Liabilities Accrued liabilities consist of the following:
December 31 | 2022 |  | 2021
Compensation | $ | 374 |  |  | $ | 360 |
Tax liabilities (Note 7) | 367 |  |  | 183 |
Dividend payable | 148 |  |  | 134 |
Trade liabilities | 145 |  |  | 235 |
Operating lease liabilities (Note 3) | 118 |  |  | 124 |
Customer reserves | 78 |  |  | 102 |
Other | 408 |  |  | 419 |
| $ | 1,638 |  |  | $ | 1,557 |
Other Liabilities Other liabilities consist of the following:
December 31 | 2022 |  | 2021
Defined benefit plans (Note 8) | $ | 1,004 |  |  | $ | 1,390 |
Non-current contract liabilities (Note 2) | 363 |  |  | 306 |
Unrecognized tax benefits (Note 7) | 29 |  |  | 36 |
Deferred income taxes (Note 7) | 73 |  |  | 183 |
Environmental Reserve | 108 |  |  | 108 |
Other | 114 |  |  | 125 |
| $ | 1,691 |  |  | $ | 2,148 |
Stockholders’ Equity Information Share Repurchase Program: Through a series of actions, the Board of Directors has authorized the Company to repurchase in the aggregate up to $16.0 billion of its outstanding shares of common stock (the “share repurchase program”). The share repurchase program does not have an expiration date. As of December 31, 2022, the Company had used approximately $14.7 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving approximately $1.3 billion of authority available for future repurchases. The Company's share repurchases, including transaction costs, for 2022, 2021, and 2020 can be summarized as follows:
Year | Shares Repurchased (in millions) |  | Average Price |  | Amount (in millions)
2022 | 3.7 |  |  | $ | 225.00 |  |  | $ | 836 |
2021 | 2.5 |  |  | 208.41 |  |  | 528 |
2020 | 3.9 |  |  | 155.93 |  |  | 612 |
Payment of Dividends: On November 17, 2022, the Company announced that its Board of Directors approved an increase in the quarterly cash dividend from $0.79 per share of common stock to $0.88 per share of common stock. During the years ended December 31, 2022, 2021, and 2020 the Company paid $530 million, $482 million, and $436 million, respectively, in cash dividends to holders of its common stock. On January 14, 2022, the Company paid an additional $148 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 Consolidated Statements of Operations during the years ended December 31, 2022, 2021, and 2020:
| Years ended December 31
| 2022 |  | 2021 |  | 2020
Foreign Currency Translation Adjustments: |  |  |  |  |
Balance at beginning of period | $ | (384) |  |  | $ | (360) |  |  | $ | (410) |
Other comprehensive income (loss) before reclassification adjustment | (156) |  |  | (30) |  |  | 55 |
Tax benefit (expense) | 1 |  |  | 6 |  |  | (5) |
Other comprehensive income (loss), net of tax | (155) |  |  | (24) |  |  | 50 |
Balance at end of period | $ | (539) |  |  | $ | (384) |  |  | $ | (360) |
Defined Benefit Plans: |  |  |  |  |
Balance at beginning of period | $ | (1,995) |  |  | $ | (2,086) |  |  | $ | (2,030) |
Other comprehensive income (loss) before reclassification adjustment | (76) |  |  | 37 |  |  | (130) |
Tax benefit (expense) | 18 |  |  | (7) |  |  | 30 |
Other comprehensive income (loss) before reclassification adjustment, net of tax | (58) |  |  | 30 |  |  | (100) |
Reclassification adjustment - Actuarial net losses into Other income (expense) | 80 |  |  | 89 |  |  | 76 |
Reclassification adjustment - Prior service benefits into Other income (expense) | (2) |  |  | (8) |  |  | (18) |
Tax expense | (21) |  |  | (20) |  |  | (14) |
Reclassification adjustments into Net earnings, net of tax | 57 |  |  | 61 |  |  | 44 |
Other comprehensive income (loss), net of tax | (1) |  |  | 91 |  |  | (56) |
Balance at end of period | $ | (1,996) |  |  | $ | (1,995) |  |  | $ | (2,086) |
Total Accumulated other comprehensive loss | $ | (2,535) |  |  | $ | (2,379) |  |  | $ | (2,446) |

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