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Other Financial Data | 12 Months Ended
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Dec. 31, 2023
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) | 2023 |  | 2022 |  | 2021
Other charges (income): |  |  |  |  |
Intangibles amortization (Note 15) | $ | 177 |  |  | $ | 257 |  |  | $ | 236 |
Reorganization of businesses (Note 14) | 22 |  |  | 18 |  |  | 24 |
Legal Settlements | 4 |  |  | 23 |  |  | 3 |
Fixed asset impairments | 3 |  |  | 12 |  |  | — |
Environmental reserve expense | 15 |  |  | — |  |  | — |
Exit of video manufacturing operations | 24 |  |  | — |  |  | — |
Operating lease asset impairments | 6 |  |  | 24 |  |  | 10 |
Acquisition-related transaction fees | 7 |  |  | 23 |  |  | 15 |
Gain on Hytera legal settlement | — |  |  | (15) |  |  | — |
Other | (1) |  |  | (3) |  |  | (2) |
| $ | 257 |  |  | $ | 339 |  |  | $ | 286 |
During the year ended December 31, 2023, the Company revised the estimate for its liability related to ongoing remediation efforts of environmental media such as groundwater, soil, and soil vapor, as well as related legal fees for a designated Superfund site under the Superfund Act incurred by a legacy business. It is the Company's policy to re-evaluate the reserve when certain events become known that will impact the future cash payments. During the year ended December 31, 2023, the Company became aware of incremental costs required in its remediation of the Superfund site. As such, the Company recorded a charge of $15 million, increasing the reserve balance to $127 million. The Company discounted the cash flows used in estimating this accrual using a risk-free treasury rate. The current portion of the estimated environmental liability is $8 million and is included in the Accrued liabilities statement line and the non-current portion is included in the "Other liabilities" statement line within the Company's Consolidated Balance Sheets. Other Income (Expense) Interest expense, net, and Other both included in Other income (expense) consist of the following:
Years ended December 31 (in millions) | 2023 |  | 2022 |  | 2021
Interest expense, net: |  |  |  |  |
Interest expense | $ | (249) |  |  | $ | (240) |  |  | $ | (215) |
Interest income | 33 |  |  | 14 |  |  | 7 |
| $ | (216) |  |  | $ | (226) |  |  | $ | (208) |
Other, net: |  |  |  |  |
Net periodic pension and postretirement benefit (Note 8) | $ | 99 |  |  | $ | 123 |  |  | $ | 123 |
Loss from the extinguishment of long-term debt (Note 5) | — |  |  | (6) |  |  | (18) |
Investment impairments | (16) |  |  | (1) |  |  | — |
Foreign currency gain (loss) | (53) |  |  | 37 |  |  | 17 |
Gain (loss) on derivative instruments (Note 6) | 20 |  |  | (61) |  |  | (30) |
Gains (loss) on equity method investments | — |  |  | (3) |  |  | 5 |
Fair value adjustments to equity investments | 13 |  |  | (30) |  |  | (8) |
Gain on TETRA Ireland equity method investment | — |  |  | 21 |  |  | — |
Other | 5 |  |  | (3) |  |  | 3 |
| $ | 68 |  |  | $ | 77 |  |  | $ | 92 |
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 |  |  |  |  |  |  | 2023 |  | 2022 |  | 2021
Basic earnings per common share: |  |  |  |  |  |  |  |  |  |  |
Earnings |  |  |  |  |  |  | $ | 1,709 |  |  | $ | 1,363 |  |  | $ | 1,245 |
Weighted average common shares outstanding |  |  |  |  |  |  | 167.0 |  |  | 167.5 |  |  | 169.2 |
Per share amount |  |  |  |  |  |  | $ | 10.23 |  |  | $ | 8.14 |  |  | $ | 7.36 |
Diluted earnings per common share: |  |  |  |  |  |  |  |  |  |  |
Earnings |  |  |  |  |  |  | $ | 1,709 |  |  | $ | 1,363 |  |  | $ | 1,245 |
Weighted average common shares outstanding |  |  |  |  |  |  | 167.0 |  |  | 167.5 |  |  | 169.2 |
Add effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |
Share-based awards |  |  |  |  |  |  | 3.7 |  |  | 3.7 |  |  | 4.0 |
1.75% senior convertible notes |  |  |  |  |  |  | 1.5 |  |  | 0.7 |  |  | 0.4 |
Diluted weighted average common shares outstanding |  |  |  |  |  |  | 172.1 |  |  | 171.9 |  |  | 173.6 |
Per share amount |  |  |  |  |  |  | $ | 9.93 |  |  | $ | 7.93 |  |  | $ | 7.17 |
In the computation of diluted earnings per common share for the year ended December 31, 2023, the assumed exercise of 0.3 million options, including 0.2 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, 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. As of December 31, 2023, the Company had $1.0 billion of 1.75% senior convertible notes outstanding, which mature on September 15, 2024 ("Senior Convertible Notes"). The notes are convertible based on a rate of 4.9670 per $1,000 principal amount as of December 31, 2023 (which is equal to a conversion price of $201.33 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. 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, 2023. The value by which the Senior Convertible Notes exceeded their principal amount if converted as of December 31, 2023 was $586 million. On February 14, 2024, the Company agreed with Silver Lake Partners to repurchase $1.0 billion aggregate principal amount of the 1.75% Senior Convertible Notes for aggregate consideration of $1.59 billion in cash, inclusive of the conversion premium. The cash consideration will be paid during the first quarter of 2024 and is expected to be paid from cash on the balance sheet and short-term borrowings including under the 2021 Motorola Solutions Credit Agreement. 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 | 2023 |  | 2022
Accounts receivable | $ | 1,779 |  |  | $ | 1,579 |
Less allowance for credit losses | (69) |  |  | (61) |
| $ | 1,710 |  |  | $ | 1,518 |
Inventories, Net Inventories, net, consist of the following:
December 31 | 2023 |  | 2022
Finished goods | $ | 328 |  |  | $ | 354 |
Work-in-process and production materials | 640 |  |  | 829 |
| 968 |  |  | 1,183 |
Less inventory reserves | (141) |  |  | (128) |
| $ | 827 |  |  | $ | 1,055 |
Other Current Assets Other current assets consist of the following:
December 31 | 2023 |  | 2022
Current contract cost assets (Note 2) | $ | 56 |  |  | $ | 61 |
Contractor receivables | 40 |  |  | 47 |
Tax-related deposits (Note 7) | 32 |  |  | 33 |
Other | 229 |  |  | 242 |
| $ | 357 |  |  | $ | 383 |
Property, Plant and Equipment, Net Property, plant and equipment, net, consist of the following:
December 31 | 2023 |  | 2022
Land | $ | 5 |  |  | $ | 5 |
Leasehold improvements | 448 |  |  | 456 |
Machinery and equipment | 2,396 |  |  | 2,303 |
| 2,849 |  |  | 2,764 |
Less accumulated depreciation | (1,885) |  |  | (1,837) |
| $ | 964 |  |  | $ | 927 |
During the year ended December 31, 2023, the Company entered into an arrangement to sell its Richmond, British Columbia and Richardson, Texas video manufacturing operations, including the machinery and equipment, inventory, transfer of employees and related facility lease to a contract manufacturer. During the year ended December 31, 2023, the Company presented the assets and liabilities as held for sale in its Consolidated Balance Sheets and recognized an impairment loss of $24 million on the exit of video manufacturing operations within Other charges in the Consolidated Statements of Operations, as the carrying value of the asset group was below the expected selling price. The Company closed the transaction on February 1, 2024. 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 year ended December 31, 2022, the Company recorded a fixed asset impairment loss of $147 million related to assets constructed and used in the deployment of the ESN services contract with the Home Office based on its expectation that, more likely than not, the ESN long-lived asset group will 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. Depreciation expense for the years ended December 31, 2023, 2022, and 2021 was $179 million, $183 million and $202 million, respectively. Investments Investments consist of the following:
December 31 | 2023 |  | 2022 |  |  |  |
Common stock | $ | 28 |  |  | $ | 21 |  |  |  |  |
Strategic investments, at cost | 28 |  |  | 45 |  |  |  |  |
Company-owned life insurance policies | 74 |  |  | 69 |  |  |  |  |
Equity method investments | 13 |  |  | 12 |  |  |  |  |
| $ | 143 |  |  | $ | 147 |  |  |  |  |
During the years ended December 31, 2023 and December 31, 2022, the Company recognized a gain of $12 million and a loss of $11 million, respectively, in Other income (expense) within the Consolidated Statements of Operations related to a change in the fair value of its investment in Evolv Technologies Holdings, Inc. 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, 2023, the Company recorded a $16 million investment impairment charge, compared to a $1 million investment impairment charge during the year ended December 31, 2022 and no investment impairment charges during the year ended December 31, 2021, 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 | 2023 |  | 2022
Defined benefit plan assets (Note 8) | $ | 98 |  |  | $ | 164 |
Non-current contract cost assets (Note 2) | 119 |  |  | 130 |
Other | 57 |  |  | 16 |
| $ | 274 |  |  | $ | 310 |
Accounts Payable The Company utilizes a supplier finance program that provides suppliers with the ability to accelerate payment on the Company's invoices beyond the stated payment terms. Under the terms of this program, the Company agrees to pay an intermediary the stated amount of confirmed invoices on the stated maturity dates of the invoices, and the supplier is able to negotiate earlier payment terms with the intermediary. The Company or the intermediary may terminate the agreement at any time upon 60 days' notice. The Company does not provide any forms of guarantees under this arrangement. Supplier participation in the program is solely at the supplier's discretion, and the participating suppliers negotiate their arrangements directly with the intermediary. The Company has no economic interest in a supplier's decision to participate in the program, and their participation has no bearing on our payment terms or amounts due. The stated invoice payment terms range from 75 to 120 days from the invoice date and are considered commercially reasonable. The Company's outstanding amounts related to the suppliers participating in this program was $35 million and $37 million as of December 31, 2023 and December 31, 2022, respectively. Supplier finance program obligations are classified as Accounts payable within the Consolidated Balance Sheets. The following table displays a rollforward of the confirmed amount of supplier finance obligations from January 1, 2023 to December 31, 2023:
(in millions) | 2023
Confirmed obligations at the beginning of the year | $ | 37 |
Invoices confirmed during the year | 114 |
Confirmed invoices paid during the year | (116) |
Confirmed obligations outstanding at the end of the year | $ | 35 |
Accrued Liabilities Accrued liabilities consist of the following:
December 31 | 2023 |  | 2022
Compensation | $ | 407 |  |  | $ | 374 |
Tax liabilities (Note 7) | 231 |  |  | 367 |
Dividend payable | 163 |  |  | 148 |
Trade liabilities | 140 |  |  | 145 |
Operating lease liabilities (Note 3) | 125 |  |  | 118 |
Customer reserves | 89 |  |  | 78 |
Other | 349 |  |  | 408 |
| $ | 1,504 |  |  | $ | 1,638 |
Other Liabilities Other liabilities consist of the following:
December 31 | 2023 |  | 2022
Defined benefit plans (Note 8) | $ | 939 |  |  | $ | 1,004 |
Non-current contract liabilities (Note 2) | 424 |  |  | 363 |
Unrecognized tax benefits (Note 7) | 26 |  |  | 29 |
Deferred income taxes (Note 7) | 55 |  |  | 73 |
Environmental Reserve | 119 |  |  | 108 |
Other | 178 |  |  | 114 |
| $ | 1,741 |  |  | $ | 1,691 |
Stockholders’ Equity Information Share Repurchase Program: Through a series of actions, including approval in November 2023 to increase the authorized amount by $2.0 billion, the Board of Directors has authorized the Company to repurchase in the aggregate up to $18.0 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, 2023, the Company had used approximately $15.5 billion of the share repurchase authority, excluding transaction costs and excise tax, to repurchase shares, leaving approximately $2.5 billion of authority available for future repurchases. As of January 1, 2023, the Company's share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act of 2022, which was $4 million as of December 31, 2023. The Company's share repurchases for 2023, 2022, and 2021 can be summarized as follows:
Year | Shares Repurchased (in millions) |  | Average Price |  | Amount (in millions)
2023 | 2.9 |  |  | $ | 278.56 |  |  | $ | 804 |
2022 | 3.7 |  |  | 225.00 |  |  | 836 |
2021 | 2.5 |  |  | 208.41 |  |  | 528 |
Payment of Dividends: On November 16, 2023, the Company announced that its Board of Directors approved an increase in the quarterly cash dividend from $0.88 per share of common stock to $0.98 per share of common stock. During the years ended December 31, 2023, 2022, and 2021 the Company paid $589 million, $530 million, and $482 million, respectively, in cash dividends to holders of its common stock. On January 12, 2024, the Company paid an additional $163 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, 2023, 2022, and 2021:
| Years ended December 31
| 2023 |  | 2022 |  | 2021
Foreign Currency Translation Adjustments: |  |  |  |  |
Balance at beginning of period | $ | (539) |  |  | $ | (384) |  |  | $ | (360) |
Other comprehensive income (loss) before reclassification adjustment | 61 |  |  | (156) |  |  | (30) |
Tax benefit (expense) | (4) |  |  | 1 |  |  | 6 |
Other comprehensive income (loss), net of tax | 57 |  |  | (155) |  |  | (24) |
Balance at end of period | $ | (482) |  |  | $ | (539) |  |  | $ | (384) |
Derivative instruments: |  |  |  |  |
Balance at beginning of period | $ | — |  |  | $ | — |  |  | $ | — |
Other comprehensive income (loss) before reclassification adjustment | (12) |  |  | — |  |  | — |
Tax benefit | — |  |  | — |  |  | — |
Other comprehensive income (loss), net of tax | (12) |  |  | — |  |  | — |
Balance at end of period | $ | (12) |  |  | $ | — |  |  | $ | — |
Defined Benefit Plans: |  |  |  |  |
Balance at beginning of period | $ | (1,996) |  |  | $ | (1,995) |  |  | $ | (2,086) |
Other comprehensive income (loss) before reclassification adjustment | (130) |  |  | (76) |  |  | 37 |
Tax benefit (expense) | 34 |  |  | 18 |  |  | (7) |
Other comprehensive income (loss) before reclassification adjustment, net of tax | (96) |  |  | (58) |  |  | 30 |
Reclassification adjustment - Actuarial net losses into Other income (expense) | 61 |  |  | 80 |  |  | 89 |
Reclassification adjustment - Prior service benefits into Other income (expense) | 1 |  |  | (2) |  |  | (8) |
Tax expense | (16) |  |  | (21) |  |  | (20) |
Reclassification adjustments into Net earnings, net of tax | 46 |  |  | 57 |  |  | 61 |
Other comprehensive income (loss), net of tax | (50) |  |  | (1) |  |  | 91 |
Balance at end of period | $ | (2,046) |  |  | $ | (1,996) |  |  | $ | (1,995) |
Total Accumulated other comprehensive loss | $ | (2,540) |  |  | $ | (2,535) |  |  | $ | (2,379) |

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