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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________ 
Form 10-Q
 ____________________________________________
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 2022
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission file number: 1-7221
___________________________________________ 
MOTOROLA SOLUTIONS, INC.
(Exact Name of Registrant as Specified in Its Charter)
____________________________________________ 
Delaware 36-1115800
(State of Incorporation)(I.R.S. Employer Identification No.)
500 W. Monroe Street, Chicago, Illinois 60661
(Address of Principal Executive Offices, Zip Code)
(847) 576-5000
(Registrant’s Telephone Number, Including Area Code)
Not applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
____________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock$0.01Par ValueMSINew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer” “accelerated filer” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer☒Accelerated filer 
☐
Non-accelerated filer 
☐
Smaller reporting company 
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☒
The number of shares of the registrant's Common Stock, $0.01 par value per share, outstanding as of July 29, 2022 was 166,885,127.


TABLE OF CONTENTS
For the Quarter Ended July 2, 2022
 
PART I. FINANCIAL INFORMATION
Page No.
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations (Unaudited)
(In millions, except per share amounts)Three Months EndedSix Months Ended
July 2, 2022July 3, 2021July 2, 2022July 3, 2021
Net sales from products$1,212 $1,094 $2,258 $2,027 
Net sales from services928 877 1,774 1,717 
Net sales2,140 1,971 4,032 3,744 
Costs of products sales637 511 1,185 952 
Costs of services sales513 508 1,001 980 
Costs of sales1,150 1,019 2,186 1,932 
Gross margin990 952 1,846 1,812 
Selling, general and administrative expenses356 331 692 633 
Research and development expenditures191 181 380 361 
Other charges85 70 177 150 
Operating earnings358 370 597 668 
Other income (expense):
Interest expense, net(56)(44)(112)(98)
Gain on sales of investments and businesses, net— — 2 — 
Other, net(2)14 33 60 
Total other expense(58)(30)(77)(38)
Net earnings before income taxes300 340 520 630 
Income tax expense71 46 23 90 
Net earnings229 294 497 540 
Less: Earnings attributable to non-controlling interests1 1 2 3 
Net earnings attributable to Motorola Solutions, Inc.$228 $293 $495 $537 
Earnings per common share:
Basic$1.36 $1.73 $2.95 $3.17 
Diluted$1.33 $1.69 $2.88 $3.10 
Weighted average common shares outstanding:
Basic167.2 169.6 167.6 169.4 
Diluted170.9 173.1 172.0 173.1 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
1

Condensed Consolidated Statements of Comprehensive Income (Unaudited)
 Three Months EndedSix Months Ended
(In millions)July 2, 2022July 3, 2021July 2, 2022July 3, 2021
Net earnings$229 $294 $497 $540 
Foreign currency translation adjustments(135)6 (155)25 
Defined benefit plans28 16 43 33 
Total other comprehensive income (loss), net of tax(107)22 (112)58 
Comprehensive income122 316 385 598 
Less: Earnings attributable to non-controlling interests1 1 2 3 
Comprehensive income attributable to Motorola Solutions, Inc. common shareholders$121 $315 $383 $595 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

2

Condensed Consolidated Balance Sheets (Unaudited)
(In millions, except par value)July 2, 2022December 31, 2021
ASSETS
Cash and cash equivalents$717 $1,874 
Accounts receivable, net1,284 1,386 
Contract assets1,045 1,105 
Inventories, net1,071 788 
Other current assets294 259 
Total current assets4,411 5,412 
Property, plant and equipment, net1,039 1,042 
Operating lease assets366 382 
Investments162 209 
Deferred income taxes1,004 916 
Goodwill2,873 2,565 
Intangible assets, net1,255 1,105 
Other assets562 558 
Total assets$11,672 $12,189 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current portion of long-term debt$2 $5 
Accounts payable919 851 
Contract liabilities1,556 1,650 
Accrued liabilities1,324 1,557 
Total current liabilities3,801 4,063 
Long-term debt6,011 5,688 
Operating lease liabilities308 313 
Other liabilities1,982 2,148 
Preferred stock, $100 par value: 0.5 shares authorized; none issued and outstanding
— — 
Common stock, $0.01 par value:
2 2 
Authorized shares: 600.0
Issued shares: 7/2/22—167.9; 12/31/21—169.6
Outstanding shares: 7/2/22—166.9; 12/31/21—168.7
Additional paid-in capital1,110 987 
Retained earnings936 1,350 
Accumulated other comprehensive loss(2,491)(2,379)
Total Motorola Solutions, Inc. stockholders’ equity (deficit)(443)(40)
Non-controlling interests13 17 
Total stockholders’ equity (deficit)(430)(23)
Total liabilities and stockholders’ equity (deficit)$11,672 $12,189 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

3

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)
(In millions, except per share data)SharesCommon Stock and Additional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Retained
Earnings		Noncontrolling
Interests
Balance as of December 31, 2021169.6 $989 $(2,379)$1,350 $17 
Net earnings267 1 
Other comprehensive loss(5)
Issuance of common stock and stock options exercised1.2 50 
Share repurchase program(2.2)(493)
Share-based compensation expenses37 
Dividends declared $0.79 per share
(132)
ASU 2020-06 modified retrospective adoption(10)10 
Balance as of April 2, 2022168.6 $1,066 $(2,384)$1,002 $18 
Net earnings228 1 
Other comprehensive loss(107)
Issuance of common stock and stock options exercised2 
Share repurchase program(0.7)(162)
Share-based compensation expenses44 
Dividends declared $0.79 per share
(132)
Dividends paid to non-controlling interest on subsidiary common stock(6)
Balance as of July 2, 2022167.9 $1,112 $(2,491)$936 $13 

(In millions, except per share data)SharesCommon Stock and Additional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Retained
Earnings		Noncontrolling
Interests
Balance as of December 31, 2020170.2 $761 $(2,446)$1,127 $17 
Net earnings244 1 
Other comprehensive income36 
Issuance of common stock and stock options exercised1.4 44 
Share repurchase program(1.0)(170)
Share-based compensation expenses29 
Dividends declared $0.71 per share
(121)
Balance as of April 3, 2021170.6 $834 $(2,410)$1,080 $18 
Net earnings293 1 
Other comprehensive income22 
Issuance of common stock and stock options exercised0.2 14 
Share repurchase program(0.5)(102)
Share-based compensation expenses31 
Dividends declared $0.71 per share
(120)
Dividends paid to non-controlling interest on subsidiary common stock(5)
Balance as of July 3, 2021170.3 $879 $(2,388)$1,151 $14 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
4

Condensed Consolidated Statements of Cash Flows (Unaudited)
 Six Months Ended
(In millions)July 2, 2022July 3, 2021
Operating
Net earnings$497 $540 
Adjustments to reconcile Net earnings to Net cash provided by operating activities:
Depreciation and amortization223 220 
Non-cash other charges (income)19 (24)
Share-based compensation expenses81 60 
Gain on sales of investments and businesses, net(2)— 
Loss from the extinguishment of long-term debt6 18 
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:
Accounts receivable106 221 
Inventories(277)(53)
Other current assets and contract assets(14)134 
Accounts payable, accrued liabilities and contract liabilities(299)(298)
Other assets and liabilities(57)(37)
Deferred income taxes(121)(23)
Net cash provided by operating activities162 758 
Investing
Acquisitions and investments, net(571)(9)
Proceeds from sales of investments and businesses, net11 3 
Capital expenditures(113)(114)
Proceeds from sales of property, plant and equipment— 6 
Net cash used for investing activities(673)(114)
Financing
Net proceeds from issuance of debt595 844 
Repayments of debt(283)(348)
Revolving credit facility renewal fees— (7)
Issuances of common stock51 60 
Purchases of common stock(655)(272)
Payments of dividends(266)(242)
Payments of dividends to non-controlling interests(6)(5)
Net cash provided by (used for) financing activities(564)30 
Effect of exchange rate changes on total cash and cash equivalents(82)(7)
Net increase (decrease) in total cash and cash equivalents(1,157)667 
Cash and cash equivalents, beginning of period1,874 1,254 
Cash and cash equivalents, end of period$717 $1,921 
Supplemental Cash Flow Information  
Cash paid during the period for:
Interest paid$109 $102 
Income and withholding taxes, net of refunds$201 $179 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
5

INDEX FOR NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Page No.
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
Note 10
Note 11
Note 12
Note 13
Note 14
Note 15

6

Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in millions, except as noted)
1.Basis of Presentation
The condensed consolidated financial statements as of July 2, 2022 and for the three and six months ended July 2, 2022 and July 3, 2021 include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to state fairly the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, Statements of Stockholders' Equity (Deficit), and Statements of Cash Flows of Motorola Solutions, Inc. (“Motorola Solutions” or the “Company”) for all periods presented.
The Company operates on a 52-week fiscal year, with each fiscal year ending on December 31. With respect to each fiscal quarter, the Company operates on a 13-week fiscal quarter, with all fiscal quarters ending on a Saturday.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2021 (the "Form 10-K"). The results of operations for the three and six months ended July 2, 2022 are not necessarily indicative of the operating results to be expected for the full year.
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Business Overview
The Company reports net sales in the following three major products and services (which the Company refers to as “technologies” in this Quarterly Report on Form 10-Q (this “Form 10-Q”)): Land Mobile Radio Communications (“LMR” or “LMR Communications”), Video Security and Access Control ("Video"), and Command Center Software.
•LMR Communications: Infrastructure, devices (two-way radio and broadband, including both for public safety and Professional Commercial Radio ("PCR")) and software that enable communications, inclusive of installation and integration, backed by services, to assure availability, security and resiliency.
•Video Security and Access Control: Cameras (fixed, body-worn, in-vehicle), access control, infrastructure, video management, software and artificial intelligence-enabled analytics that enable visibility “on scene” and bring attention to what’s important.
•Command Center Software: Software suite that enables collaboration and seamless information sharing through the public safety workflow from "911 call to case closure."
Recent Acquisitions
On May 12, 2022, the Company acquired Videotec S.p.A. ("Videotec"), a global provider of ruggedized video security solutions, for $22 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $4 million to certain key employees that will be expensed over a service period of one year. This acquisition extends the Company's breadth of high-performance video products, reinforcing the Company's strategy to be a global leader in video security solutions. The business is a part of the Products and Systems Integration segment.
On April 19, 2022, the Company acquired Calipsa, Inc. ("Calipsa"), a technology leader in cloud-native advanced video analytics, for $40 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $4 million to certain key employees that will be expensed over a service period of two years. This acquisition extends the Company's intelligent analytics across video security solutions and supports the accelerating trend of enterprises using cloud technologies to enhance safety and security. The business is a part of the Software and Services segment.
On March 23, 2022, the Company acquired TETRA Ireland Communications Limited ("TETRA Ireland"), the provider of Ireland's National Digital Radio Service, for $120 million, net of cash acquired. The Company was an initial shareholder of TETRA Ireland and acquired the remaining interest in the entity from the other shareholders. This acquisition expands the Company's portfolio of delivering mission-critical voice and data communications solutions to first responders and frontline workers. The business is part of the Software and Services segment.
On March 3, 2022, the Company acquired Ava Security Limited ("Ava"), a global provider of cloud-native video security and analytics, for $388 million, net of cash acquired. In addition, the Company issued restricted stock and restricted stock units at a fair value of $7 million to certain key employees that will be expensed over an average service period of two years. This acquisition expands the Company's portfolio of intelligent video solutions that help to enhance safety and streamline operations. The business is a part of both the Products and Systems Integration segment and the Software and Services segment.
On December 16, 2021, the Company acquired 911 Datamaster, Inc. ("911 Datamaster"), a Next Generation 911 ("NG911") data solutions provider, for $35 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $3 million to certain key employees that will be expensed over a service period of two years. This acquisition reinforces the Company's strategy to be a leader in command center solutions and further supports 911 call centers’ unique organizational workflows as they transition to NG911 technologies. The business is a part of the Software and Services segment.
7

On October 29, 2021, the Company acquired Envysion, Inc. ("Envysion"), a leader in enterprise video security and business analytics, for $124 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $1 million to certain key employees that will be expensed over a service period of one year. This acquisition expands the Company's presence in the industry and reinforces the Company's strategy to be a global leader in end-to-end video security solutions within Video. The business is a part of both the Products and Systems Integration segment and the Software and Services segment.
On July 15, 2021, the Company acquired Openpath Security Inc. ("Openpath"), a cloud-based mobile access control provider for $298 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $29 million to certain key employees that will be expensed over an average service period of three years. The transaction also includes the potential for the Company to make earn-out payments based on Openpath's achievement of certain financial targets from January 1, 2022 through December 31, 2022. This acquisition expands the Company's ability to combine video security and access control solutions within Video to help support enterprise customers. The business is a part of both the Products and Systems Integration segment and the Software and Services segment.
Recently Adopted Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity," which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments. The new guidance removes the separation models for convertible debt with a cash conversion feature or a beneficial conversion feature. In addition, the new standard requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The Company adopted ASU No. 2020-06 on January 1, 2022, using the modified retrospective method of adoption. As a result of the adoption of this ASU, the Company's $1 billion of 1.75% senior convertible notes due 2024 issued to Silver Lake Partners (the "Senior Convertible Notes") are accounted as a single liability measured at its amortized cost, given the embedded conversion feature does not require bifurcation and recognition as a derivative. Upon adoption of this ASU, amounts previously recognized in additional paid-in capital from the original embedded conversion feature of $10 million were reclassified to retained earnings. The Company uses the if-converted method as required under ASU No. 2020-06 to determine the dilutive effect of the convertible instrument. Refer to Note 4, "Other Financial Data" to our condensed consolidated financial statements included in this Part I, Item 1 of this Form 10-Q for the effect of the Senior Convertible Notes on diluted earnings per common share.
In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, "which requires companies to recognize and measure contract assets and contract liabilities relating to contracts with customers that are acquired in a business combination in accordance with ASC Topic 606. Under current U.S. GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. ASU No. 2021-08 results in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC Topic 606. The ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted this ASU as of January 1, 2022 on a prospective basis and the adoption of this standard did not have a material impact on the Company's financial statements and disclosures. The Company anticipates that this adoption will generally result in the Company recognizing larger contract liabilities in connection with business combinations.
In November 2021, the FASB issued ASU No. 2021-10, "Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance." This ASU requires disclosures that are expected to increase the transparency of transactions with a governmental entity accounted for by applying a grant or contribution accounting model by analogy, including disclosures around: (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The ASU was effective for the Company on January 1, 2022, including interim periods, with early adoption permitted. The Company adopted this ASU as of January 1, 2022 on a prospective basis, and the adoption of this standard did not have a material impact on the Company's financial statements and disclosures.

8

2.    Revenue from Contracts with Customers
Disaggregation of Revenue
The following table summarizes the disaggregation of the Company's revenue by segment, region, major products and services and customer type for the three and six months ended July 2, 2022 and July 3, 2021, consistent with the information reviewed by the Company's chief operating decision maker for evaluating the financial performance of the Company's reportable segments:
Three Months Ended
July 2, 2022July 3, 2021
(In millions)Products and Systems IntegrationSoftware and ServicesTotalProducts and Systems IntegrationSoftware and ServicesTotal
Regions:
North America$963 $521 $1,484 $869 $443 $1,312 
International322 334 656 329 330 659 
$1,285 $855 $2,140 $1,198 $773 $1,971 
Major Products and Services:
LMR Communications$1,038 $570 $1,608 $986 $545 $1,531 
Video Security and Access Control247 123 370 212 94 306 
Command Center Software— 162 162 — 134 134 
$1,285 $855 $2,140 $1,198 $773 $1,971 
Customer Types:
Direct$711 $778 $1,489 $706 $706 $1,412 
Indirect574 77 651 492 67 559 
$1,285 $855 $2,140 $1,198 $773 $1,971 
Six Months Ended
July 2, 2022July 3, 2021
(In millions)Products and Systems IntegrationSoftware and ServicesTotalProducts and Systems IntegrationSoftware and ServicesTotal
Regions:
North America$1,794 $994 $2,788 $1,611 $886 $2,497 
International594 650 1,244 602 645 1,247 
$2,388 $1,644 $4,032 $2,213 $1,531 $3,744 
Major Products and Services:
LMR Communications$1,947 $1,116 $3,063 $1,836 $1,095 $2,931 
Video Security and Access Control441 236 677 377 182 559 
Command Center Software— 292 292 — 254 254 
$2,388 $1,644 $4,032 $2,213 $1,531 $3,744 
Customer Types:
Direct$1,367 $1,480 $2,847 $1,310 $1,396 $2,706 
Indirect1,021 164 1,185 903 135 1,038 
$2,388 $1,644 $4,032 $2,213 $1,531 $3,744 

9

Remaining Performance Obligations
Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations that are unsatisfied, or partially unsatisfied, as of the end of a period. The transaction values associated with remaining performance obligations which were not yet satisfied as of July 2, 2022 was $9.0 billion. A total of $4.3 billion was from Products and Systems Integration performance obligations that were not yet satisfied as of July 2, 2022, of which $2.7 billion is expected to be recognized in the next twelve months. The remaining amounts will generally be satisfied over time as systems are implemented. A total of $4.7 billion was from Software and Services performance obligations that were not yet satisfied as of July 2, 2022. The determination of Software and Services performance obligations that are not satisfied takes into account a contract term that may be limited by the customer’s ability to terminate for convenience. Where termination for convenience exists in the Company's service contracts, its disclosure of the remaining performance obligations that are unsatisfied assumes the contract term is limited until renewal. The Company expects to recognize $1.5 billion from unsatisfied Software and Services performance obligations over the next twelve months, with the remaining performance obligations to be recognized over time as services are performed and software is implemented.
Contract Balances
(In millions)July 2, 2022December 31, 2021
Accounts receivable, net$1,284 $1,386 
Contract assets1,045 1,105 
Contract liabilities1,556 1,650 
Non-current contract liabilities308 306 
Revenue recognized during the three months ended July 2, 2022 which was previously included in Contract liabilities as of April 2, 2022 was $456 million, compared to $483 million of revenue recognized during the three months ended July 3, 2021 which was previously included in Contract liabilities as of April 3, 2021. Revenue recognized during the six months ended July 2, 2022 which was previously included in Contract liabilities as of December 31, 2021 was $712 million, compared to $705 million recognized during the six months ended July 3, 2021 which was previously included in Contract liabilities as of December 31, 2020. The Company did not reverse any revenue during the three months ended July 2, 2022 related to performance obligations satisfied, or partially satisfied, in previous periods, compared to $10 million of reversals for the three months ended July 3, 2021, primarily driven by changes in the estimates of progress on system contracts, Revenue of $22 million was reversed during the six months ended July 2, 2022 related to performance obligations satisfied or partially satisfied, in previous periods, primarily driven by changes in the estimates of progress on system contracts, compared to $15 million of reversals for the six months ended July 3, 2021.
There were no material expected credit losses recorded on contract assets during each of the three and six months ended July 2, 2022 and July 3, 2021.
Contract Cost Balances
(In millions)July 2, 2022December 31, 2021
Current contract cost assets$39 $30 
Non-current contract cost assets118 124 
Amortization of non-current contract cost assets was $13 million and $26 million for the three and six months ended July 2, 2022, respectively, and $12 million and $25 million for the three and six months ended July 3, 2021, respectively.

3.    Leases
Components of Lease Expense
Three Months EndedSix Months Ended
(in millions)July 2, 2022July 3, 2021July 2, 2022July 3, 2021
Lease expense:
Operating lease cost$33 $34 $66 $67 
Finance lease cost
Amortization of right-of-use assets$2 $3 $4 $6 
Short-term lease cost$— $1 $1 $2 
Variable cost8 9 17 18 
Sublease income(2)(1)(3)(2)
Net lease expense$41 $46 $85 $91 
10


Lease Assets and Liabilities
(in millions)Statement Line ClassificationJuly 2, 2022December 31, 2021
Assets:
Operating lease assetsOperating lease assets$366 $382 
Finance lease assetsProperty, plant and equipment, net11 16 
$377 $398 
Current liabilities:
Operating lease liabilitiesAccrued liabilities$94 $124 
Finance lease liabilitiesCurrent portion of long-term debt2 4 
$96 $128 
Non-current liabilities:
Operating lease liabilitiesOperating lease liabilities$308 $313 
$308 $313 
Other Information Related to Leases
Six Months Ended
(in millions)July 2, 2022July 3, 2021
Supplemental cash flow information:
Net cash used for operating activities related to operating leases$93 $95 
Net cash used for financing activities related to finance leases3 7 
Assets obtained in exchange for lease liabilities:
Operating leases$65 $22 
The increase in assets obtained in exchange for lease liabilities for the six months ended July 2, 2022 compared to the six months ended July 3, 2021 was primarily due to $34 million of additional leases acquired in connection with the Company's acquisition of TETRA Ireland during the quarter ended April 2, 2022.
July 2, 2022December 31, 2021
Weighted average remaining lease terms (years):
Operating leases66
Finance leases11
Weighted average discount rate:
Operating leases3.05 %3.11 %