Other Financial Data |
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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:
During the year ended December 31, 2018, the Company became aware of additional remediation requirements for the Superfund site, resulting in a charge of $57 million primarily due to: (i) changes in the expected timeline of the remediation activities to 30 years and (ii) additional costs for further remediation efforts, increasing the reserve to $107 million. The current portion of the estimated environmental liability 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 Sheet. During the year ended December 31, 2018, the Company expensed $24 million of acquisition-related transaction fees related to the acquisitions of Avigilon, Plant, and VaaS compared to $1 million during the year ended December 31, 2017, and $13 million during the year ended December 31, 2016 related to the acquisition of Airwave. During the years ended December 31, 2018, December 31, 2017 and December 31, 2016, the Company recognized $1 million, $10 million and $21 million, respectively, of asset impairments. During the years ended December 31, 2017 and December 31, 2016, the impairments were primarily related to building impairments from the sale of various corporate and manufacturing facilities. During the year ended December 31, 2017, the Company recognized a net gain of $47 million related to the recovery, through legal procedures to seize and liquidate assets, of financial receivables owed to the Company by a former customer of its legacy Networks business. The net gain of $47 million was based on $57 million of proceeds received, net $10 million of fees owed to third parties for their involvement in the recovery. Other Income (Expense) Interest expense, net, and Other both included in Other income (expense) consist of the following:
During the year ended December 31, 2018, the Company recognized a foreign currency loss of $24 million, primarily driven by the Brazilian real, the Australian dollar and the Argentinian peso. In addition, the Company recognized a $14 million loss on derivative instruments related to foreign currency derivatives put in place to minimize the exposure to the Canadian dollar related to the purchase of Avigilon as well as $5 million of impairments on strategic investments. These losses were offset by an $11 million gain related to an increase in the fair value of common stock held in a strategic investment. During the year ended December 31, 2017, the Company recognized a foreign currency loss of $31 million, primarily driven by the Euro and British pound, partially offset by a gain of $15 million, on derivative instruments put in place to minimize the foreign exchange risk related to currency fluctuations. During the year ended December 31, 2016, the Company recognized foreign currency gain of $46 million, primarily driven by the British pound, offset by a loss of $56 million on derivative instruments put in place to minimize the foreign exchange risk related to currency fluctuations. The Company also realized a $10 million foreign currency loss on currency purchased and held in anticipation of the acquisition of Airwave during the year ended December 31, 2016. Earnings Per Common Share Basic and diluted earnings per common share from net earnings attributable to Motorola Solutions, Inc. are computed as follows:
In the computation of diluted earnings per common share for the year ended December 31, 2018, the assumed exercise of 0.8 million options, including 0.6 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, 2017, the Company recorded a net loss and, accordingly, the basic and diluted weighted average shares outstanding are equal because any increase to the basic shares would be antidilutive, including the assumed exercise of 8.7 million stock options, the assumed vesting of 1.4 million RSUs, and 3.1 million shares related to the Senior Convertible Notes. In the computation of diluted earnings per common share for the year ended December 31, 2016, the assumed exercise of 2.8 million stock options and the assumed vesting of 0.3 million RSUs, including 2.0 million subject to market-based contingent option agreements, were excluded because their inclusion would have been antidilutive. On August 25, 2015, the Company issued $1.0 billion of 2.0% Senior Convertible Notes which mature in September 2020 (the "Senior Convertible Notes"). The notes became fully convertible as of August 25, 2017. On September 5, 2018, the Company agreed with Silver Lake Partners to re-purchase $200 million principal of the convertible notes for aggregate consideration of $369 million in cash, inclusive of the conversion premium. The Company paid the $369 million during the year ended December 31, 2018. In the event of an additional conversion, the Company intends to settle the principal amount of the Senior Convertible Notes in cash. Since the Company’s intention is to settle the par value of the Senior Convertible Notes in cash upon conversion, only the number of shares that would be issuable (under the treasury stock method of accounting for share dilution) are included in our computation of diluted earnings per share. The conversion price is adjusted for dividends declared through the date of settlement. Diluted earnings per share has been calculated based upon the amount by which the average stock price exceeds the conversion price. Balance Sheet Information Accounts Receivable, Net Accounts receivable, net, consists of the following:
During the year ended December 31, 2018, $297 million of Unbilled accounts receivable were reclassified to Contract assets and $24 million of non-customer miscellaneous receivables were reclassified to Other current assets as a result of the adoption of ASC 606. Inventories, Net Inventories, net, consist of the following:
Other Current Assets Other current assets consist of the following:
Property, Plant and Equipment, Net Property, plant and equipment, net, consist of the following:
Depreciation expense for the years ended December 31, 2018, 2017, and 2016 was $172 million, $192 million and $182 million, respectively. Property, plant and equipment, net includes capital leases of $56 million, net of accumulated depreciation of $23 million, as of December 31, 2018. Investments Investments consist of the following:
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. The Company did not recognize any significant adjustments to the recorded cost basis during the year ended December 31, 2018. The Company’s common stock portfolio reflects an investment in a publicly-traded company within the communications services sector and is valued utilizing active market prices for similar instruments. During the year ended December 31, 2018, the Company recognized $11 million in Other income (expense) related to an increase in the fair value of the investments. Company-owned life insurance policies are recorded at their cash surrender value. During the year ended December 31, 2018, the Company withdrew $60 million of excess cash from its company-sponsored life insurance investments. During the year ended December 31, 2018, Gains on the sale of investments and businesses were $16 million, compared to $3 million during the year ended December 31, 2017, and losses of $6 million during the year ended December 31, 2016. During the year ended December 31, 2018, the Company recorded investment impairment charges of $5 million, compared to $4 million during the year ended December 31, 2016, representing other-than-temporary declines in the value of the Company’s equity investment portfolio. There were no investment impairments recorded during the year ended December 31, 2017. Investment impairment charges are included in Other within Other income (expense) in the Company’s Consolidated Statements of Operations. Other Assets Other assets consist of the following:
Accrued Liabilities Accrued liabilities consist of the following:
The deferred consideration in conjunction with the acquisition of Airwave was paid during the fourth quarter of 2018. Other Liabilities Other liabilities consist of the following:
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 $14.0 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, 2018, the Company had used approximately $12.4 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving $1.6 billion of authority available for future repurchases. The Company's share repurchases, including transaction costs, for 2018, 2017, and 2016 can be summarized as follows:
Payment of Dividends: On November 15, 2018, the Company announced that its board of directors approved an increase in the quarterly cash dividend from $0.52 per share to $0.57 per share of common stock. During the years ended December 31, 2018, 2017, and 2016 the Company paid $337 million, $307 million, and $280 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 Consolidated Statements of Operations during the years ended December 31, 2018, 2017, and 2016:
During the year ended December 31, 2017, the Company reclassified $270 million of stranded tax effects out of Accumulated other comprehensive loss and into Retained earnings. The stranded tax effects remained a component of Accumulated other comprehensive loss as a result of the remeasurement of our deferred tax assets related to our U.S. Pension Plans through the statement of operations, to the U.S. federal tax rate of 21%. As a result, stranded tax effects within Accumulated other comprehensive loss which would not be realized at the established historical tax rates have been adjusted through equity. |