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Other Financial Data | 9 Months Ended
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Sep. 28, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Other Financial Data | Other Financial Data Statements of Operations Information Other Charges Other charges included in Operating earnings consist of the following:
| Three Months Ended |  | Nine Months Ended
| September 28, 2024 |  | September 30, 2023 |  | September 28, 2024 |  | September 30, 2023
Other charges: |  |  |  |  |  |  |
Intangibles amortization (Note 15) | $ | 38 |  |  | $ | 39 |  |  | $ | 114 |  |  | $ | 137 |
Reorganization of business (Note 14) | 5 |  |  | 4 |  |  | 16 |  |  | 16 |
Operating lease asset impairments | 1 |  |  | — |  |  | 5 |  |  | 4 |
Acquisition-related transaction fees | 4 |  |  | 1 |  |  | 11 |  |  | 3 |
Environmental reserve expense | — |  |  | — |  |  | — |  |  | 15 |
Legal settlements | 1 |  |  | 1 |  |  | 7 |  |  | 1 |
Fixed asset impairments | — |  |  | — |  |  | — |  |  | 3 |
Other | — |  |  | 1 |  |  | — |  |  | 2 |
| $ | 49 |  |  | $ | 46 |  |  | $ | 153 |  |  | $ | 181 |
Other Income (Expense) Interest expense, net, and Other, net, both included in Other income (expense), consist of the following:
| Three Months Ended |  | Nine Months Ended
| September 28, 2024 |  | September 30, 2023 |  | September 28, 2024 |  | September 30, 2023
Interest, net: |  |  |  |  |  |  |
Interest expense | $ | (73) |  |  | $ | (60) |  |  | $ | (221) |  |  | $ | (186) |
Interest income | 15 |  |  | 7 |  |  | 50 |  |  | 22 |
| $ | (58) |  |  | $ | (53) |  |  | $ | (171) |  |  | $ | (164) |
Other, net: |  |  |  |  |  |  |
Net periodic pension and postretirement benefit (Note 8) | $ | 32 |  |  | $ | 24 |  |  | $ | 95 |  |  | $ | 73 |
Loss from the extinguishment of Silver Lake Convertible Debt (Note 5) | — |  |  | — |  |  | (585) |  |  | — |
Investment impairments | — |  |  | (7) |  |  | (3) |  |  | (16) |
Foreign currency gain (loss) | (26) |  |  | 23 |  |  | (22) |  |  | (16) |
Gain (loss) on derivative instruments (Note 6) | 22 |  |  | (26) |  |  | 7 |  |  | (9) |
Fair value adjustments to equity investments | 9 |  |  | (7) |  |  | (4) |  |  | 12 |
Assessments on uncertain tax positions | — |  |  | — |  |  | (11) |  |  | — |
Other | 5 |  |  | — |  |  | 4 |  |  | 2 |
| $ | 42 |  |  | $ | 7 |  |  | $ | (519) |  |  | $ | 46 |
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
| Three Months Ended |  | Nine Months Ended
| September 28, 2024 |  | September 30, 2023 |  | September 28, 2024 |  | September 30, 2023
Basic earnings per common share: |  |  |  |  |  |  |
Earnings | $ | 562 |  |  | $ | 464 |  |  | $ | 966 |  |  | $ | 1,113 |
Weighted average common shares outstanding | 167.1 |  |  | 166.7 |  |  | 166.7 |  |  | 167.2 |
Per share amount | $ | 3.36 |  |  | $ | 2.78 |  |  | $ | 5.79 |  |  | $ | 6.66 |
Diluted earnings per common share: |  |  |  |  |  |  |
Earnings | $ | 562 |  |  | $ | 464 |  |  | $ | 966 |  |  | $ | 1,113 |
Weighted average common shares outstanding | 167.1 |  |  | 166.7 |  |  | 166.7 |  |  | 167.2 |
Add effect of dilutive securities: |  |  |  |  |  |  |
Share-based awards | 3.8 |  |  | 3.5 |  |  | 3.9 |  |  | 3.6 |
Silver Lake Convertible Debt | — |  |  | 1.5 |  |  | — |  |  | 1.4 |
Diluted weighted average common shares outstanding | 170.9 |  |  | 171.7 |  |  | 170.6 |  |  | 172.2 |
Per share amount | $ | 3.29 |  |  | $ | 2.70 |  |  | $ | 5.66 |  |  | $ | 6.46 |
In the computation of diluted earnings per common share for the three months ended September 28, 2024, the assumed exercise of 0.1 million options were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive. In the computation of diluted earnings per common share for the nine months ended September 28, 2024, a total of 0.3 million shares related to the Silver Lake Convertible Debt (as defined in Note 5, "Debt and Credit Facilities" in this "Part 1 - Financial Information" of this Form 10-Q) were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive. In addition, the assumed exercise of 0.1 million options were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive. In the computation of diluted earnings per common share for the three and nine months ended September 30, 2023, the assumed exercise of 0.3 million options, inclusive of 0.2 million options subject to market based contingent option agreements, were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive. Balance Sheet Information Accounts Receivable, Net Accounts receivable, net, consists of the following:
| September 28, 2024 |  | December 31, 2023
Accounts receivable | $ | 1,929 |  |  | $ | 1,779 |
Less allowance for credit losses | (81) |  |  | (69) |
| $ | 1,848 |  |  | $ | 1,710 |
Inventories, Net Inventories, net, consist of the following:
| September 28, 2024 |  | December 31, 2023
Finished goods | $ | 366 |  |  | $ | 328 |
Work-in-process and production materials | 586 |  |  | 640 |
| 952 |  |  | 968 |
Less inventory reserves | (136) |  |  | (141) |
| $ | 816 |  |  | $ | 827 |
Other Current Assets Other current assets consist of the following:
| September 28, 2024 |  | December 31, 2023
Current contract cost assets (Note 2) | $ | 78 |  |  | $ | 56 |
Contractor receivables | 29 |  |  | 40 |
Tax-related deposits | 41 |  |  | 32 |
Other | 291 |  |  | 229 |
| $ | 439 |  |  | $ | 357 |
Property, Plant and Equipment, Net Property, plant and equipment, net, consist of the following:
| September 28, 2024 |  | December 31, 2023
Land | $ | 5 |  |  | $ | 5 |
Leasehold improvements | 447 |  |  | 448 |
Machinery and equipment | 2,404 |  |  | 2,396 |
| 2,856 |  |  | 2,849 |
Less accumulated depreciation | (1,832) |  |  | (1,885) |
| $ | 1,024 |  |  | $ | 964 |
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 Sheet and recognized an impairment loss of $24 million on the exit of these video manufacturing operations within Other charges in the Consolidated Statement of Operations, as the carrying value of the asset group was below the expected selling price. The transaction closed on February 1, 2024 resulting in a gain on the sale of these video manufacturing operations, which was de minimis. Depreciation expense for the three months ended September 28, 2024 and September 30, 2023 was $46 million and $47 million, respectively. Depreciation expense for the nine months ended September 28, 2024 and September 30, 2023 was $136 million and $134 million, respectively. Investments Investments consist of the following:
| September 28, 2024 |  | December 31, 2023 |  |  |  |
Common stock | $ | 25 |  |  | $ | 28 |  |  |  |  |
Strategic investments | 26 |  |  | 28 |  |  |  |  |
Company-owned life insurance policies | 78 |  |  | 74 |  |  |  |  |
Equity method investments | 11 |  |  | 13 |  |  |  |  |
| $ | 140 |  |  | $ | 143 |  |  |  |  |
Other Assets Other assets consist of the following:
| September 28, 2024 |  | December 31, 2023
Defined benefit plan assets | $ | 149 |  |  | $ | 98 |
Non-current contract cost assets (Note 2) | 124 |  |  | 119 |
Other | 61 |  |  | 57 |
| $ | 334 |  |  | $ | 274 |
Accounts Payable The Company utilizes a supplier finance program which provides our suppliers 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 their 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 $38 million and $35 million as of September 28, 2024 and December 31, 2023, respectively. Supplier finance program obligations are classified as Accounts payable within the Condensed Consolidated Balance Sheets. Accrued Liabilities Accrued liabilities consist of the following:
| September 28, 2024 |  | December 31, 2023
Compensation | $ | 369 |  |  | $ | 407 |
Tax liabilities | 144 |  |  | 231 |
Dividend payable | 164 |  |  | 163 |
Trade liabilities | 175 |  |  | 140 |
Operating lease liabilities (Note 3) | 131 |  |  | 125 |
Customer reserves | 86 |  |  | 89 |
Other | 460 |  |  | 349 |
| $ | 1,529 |  |  | $ | 1,504 |
Other Liabilities Other liabilities consist of the following:
| September 28, 2024 |  | December 31, 2023
Defined benefit plans (Note 8) | $ | 855 |  |  | $ | 939 |
Non-current contract liabilities (Note 2) | 480 |  |  | 424 |
Unrecognized tax benefits (Note 7) | 38 |  |  | 26 |
Deferred income taxes (Note 7) | 59 |  |  | 55 |
Environmental reserve | 119 |  |  | 119 |
Other | 214 |  |  | 178 |
| $ | 1,765 |  |  | $ | 1,741 |
Stockholders’ Equity Share Repurchase Program: During the three and nine months ended September 28, 2024, the Company repurchased approximately 0.1 million and 0.4 million shares at an average price of $440.53 and $355.31 per share for an aggregate amount of $31 million and $141 million, respectively. Payment of Dividends: During the three months ended September 28, 2024 and September 30, 2023, the Company paid $164 million and $147 million, respectively, in cash dividends to holders of its common stock. Subsequent to the quarter, the Company paid an additional $164 million in cash dividends to holders of its common stock. During the nine months ended September 28, 2024 and September 30, 2023, the Company paid $490 million and $443 million, respectively, in cash dividends to holders of its common stock. Accumulated Other Comprehensive Loss The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the Condensed Consolidated Statements of Operations during the three and nine months ended September 28, 2024 and September 30, 2023:
| Three Months Ended |  | Nine Months Ended
| September 28, 2024 |  | September 30, 2023 |  | September 28, 2024 |  | September 30, 2023
Foreign Currency Translation Adjustments: |  |  |  |  |  |  |
Balance at beginning of period | $ | (509) |  |  | $ | (476) |  |  | $ | (482) |  |  | $ | (539) |
Other comprehensive income (loss) before reclassification adjustment | 73 |  |  | (62) |  |  | 44 |  |  | (8) |
Tax benefit (expense) | (1) |  |  | (8) |  |  | 1 |  |  | 1 |
Other comprehensive income (loss), net of tax | 72 |  |  | (70) |  |  | 45 |  |  | (7) |
Balance at end of period | $ | (437) |  |  | $ | (546) |  |  | $ | (437) |  |  | $ | (546) |
Derivative instruments: |  |  |  |  |  |  |
Balance at beginning of period | $ | (8) |  |  | $ | — |  |  | $ | (12) |  |  | $ | — |
Other comprehensive income before reclassification adjustment | — |  |  | — |  |  | 4 |  |  | — |
Other comprehensive income before reclassification adjustment, net of tax | — |  |  | — |  |  | 4 |  |  | — |
Other comprehensive income, net of tax | $ | — |  |  | $ | — |  |  | $ | 4 |  |  | $ | — |
Balance at end of period | $ | (8) |  |  | $ | — |  |  | $ | (8) |  |  | $ | — |
Defined Benefit Plans: |  |  |  |  |  |  |
Balance at beginning of period | $ | (2,032) |  |  | $ | (1,971) |  |  | $ | (2,046) |  |  | $ | (1,996) |
Reclassification adjustment - Actuarial net losses into Other income (Note 8) | 9 |  |  | 15 |  |  | 25 |  |  | 45 |
Reclassification adjustment - Prior service benefits into Other income (Note 8) | — |  |  | 1 |  |  | 2 |  |  | 3 |
Tax expense | (2) |  |  | (4) |  |  | (6) |  |  | (11) |
Reclassification adjustments into Net earnings, net of tax | 7 |  |  | 12 |  |  | 21 |  |  | 37 |
Other comprehensive income, net of tax | 7 |  |  | 12 |  |  | 21 |  |  | 37 |
Balance at end of period | $ | (2,025) |  |  | $ | (1,959) |  |  | $ | (2,025) |  |  | $ | (1,959) |
Total Accumulated other comprehensive loss | $ | (2,470) |  |  | $ | (2,505) |  |  | $ | (2,470) |  |  | $ | (2,505) |

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