Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this Form 10-K. The evaluation was conducted under the supervision of our Disclosure Committee, and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective to provide reasonable assurance that (i) the information required to be disclosed by us in this Form 10-K was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) information required to be disclosed by us in our reports that we file or furnish under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework as released in 2013. Based on this assessment and those criteria, our management believes that, as of December 31, 2023, our internal control over financial reporting is effective.
Our independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on Zebra’s internal control over financial reporting. Ernst & Young LLP’s report is included in the latter portion of this Item 9A.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2023, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Inherent Limitations on the Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within Zebra have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Zebra Technologies Corporation
Opinion on Internal Control over Financial Reporting
We have audited Zebra Technologies Corporation and subsidiaries internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Zebra Technologies Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Zebra Technologies Corporation as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes, and our report dated February 15, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Chicago, Illinois
February 15, 2024
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Item 9B. Other Information
None of our directors or executive officers had in effect, adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the fourth quarter of 2023.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
We have adopted a Code of Ethics for Senior Financial Officers (“Code of Ethics”) that applies to Zebra’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The Code of Ethics is posted on the Investor Relations – Governance Documents page of Zebra’s Internet web site, www.zebra.com under “Investors-Governance-Governance Documents”, and is available for download. Any waiver from the Code of Ethics and any amendment to the Code of Ethics will be disclosed on such page of Zebra’s web site.
All other information in response to this item is incorporated by reference from the Proxy Statement sections entitled “Corporate Governance,” “Election of Directors,” “Committees of the Board,” “Executive Officers,” and “Delinquent Section 16(a) Reports.”
Item 11. Executive Compensation
The information in response to this item is incorporated by reference from the Proxy Statement sections entitled “Compensation Discussion and Analysis,” “Executive Compensation,” “Director Compensation,” “Executive Compensation – Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report.”
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information in response to this item is incorporated by reference from the Proxy Statement sections entitled “Ownership of our Common Stock” and “Executive Compensation – Equity Compensation Plan Information.”
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information in response to this item is incorporated by reference from the Proxy Statement sections entitled “Corporate Governance – Related Party Transactions,” “Corporate Governance – Director Independence,” “Election of Directors,” and “Committees of the Board.”
Item 14. Principal Accounting Fees and Services
The information in response to this item is incorporated by reference from the Proxy Statement section entitled “Fees of Independent Auditors.”
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PART IV
Item 15. Exhibits and Financial Statement Schedules
Index to Consolidated Financial Statements
PAGE
Report of Independent Registered Public Accounting Firm (PC AOB ID: 42 )
40
Consolidated Balance Sheets as of December 31, 2023 and 2022
42
Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021
43
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021
44
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021
45
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021
46
Notes to Consolidated Financial Statements
47
Index to Financial Statement Schedules
Schedules are omitted because the information is not required or because the information required is included in the
Notes to Consolidated Financial Statements.
Index to Exhibits
Incorporated by Reference
Exhibit Number Exhibit Description Form Exhibit Number Filing Date or Period End Date Filed or Furnished Within
3.1(i) Restated Certificate of Incorporation of the Company.
8-K 3.1(i) August 6, 2012
3.1(ii) Amended and Restated By-laws of Zebra Technologies Corporation, as amended as of December 5, 2022
8-K 3.1 December 8, 2022
4.1 Specimen stock certificate representing Class A Common Stock.
10-K 4.1 December 31, 2017
4.2 Description of Securities Registered Under Section 12 of the Securities Exchange Act
10-K 4.2 December 31, 2019
10.1 Employee Agreement between Nathan Winters and the Company Dated January 11, 2021. +
10-K 10.1 December 31, 2020
10.2 Form of indemnification agreement between Zebra Technologies Corporation and each director and executive officer.
10-K 10.6 December 31, 2016
10.3 2011 Long-Term Incentive Plan (Amended and Restated as of May 15, 2014). +
10-Q 10.1 June 28, 2014
10.4 2015 Long-Term Incentive Plan. +
10-K 10.11 December 31, 2017
10.5 2018 Long-Term Incentive Plan. +
S-8 4.1 June 1, 2018
10.6 2005 Executive Deferred Compensation Plan, as amended and restated as of January 1, 2022. +
10-K 10.6 December 31, 2021
10.7 Amended and Restated Employment Agreement between Zebra Technologies Corporation and Anders Gustafsson dated as of May 6, 2010. +
10-Q 10.10 April 3, 2010
10.8 Letter Agreement between Zebra Technologies Corporation and Anders Gustafsson dated as of May 6, 2010. +
10-Q 10.11 April 3, 2010
10.9 Letter Agreement between Zebra Technologies Corporation and Anders Gustafsson dated as of March 1, 2023 +
8-K 10.2 December 8, 2022
10.10 Employment Agreement between Zebra Technologies Corporation and William Burns dated as of March 1, 2023 +
8-K 10.1 December 8, 2022
10.11 Form of 2013-16 time-vested stock appreciation rights agreement for employees other than CEO. +
10-Q 10.1 March 30, 2013
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10.12 Form of 2017 time-vested stock appreciation rights agreement for employees other than CEO. +
10-Q 10.1 April 1, 2017
10.13 Form of 2018 stock appreciation rights agreement for employees other than the CEO. +
10-Q 10.2 June 30, 2018
10.14 Form of 2019 stock appreciation rights agreement for employees other than the CEO. +
10-Q 10.2 June 29, 2019
10.15 Form of 2020 stock appreciation rights agreement for employees other than the CEO. +
10-Q 10.2 June 27, 2020
10.16 Form of 2021 stock settled stock appreciation rights agreement for employees other than the CEO. +
10-Q 10.3 July 3, 2021
10.17 Form of 2022 stock appreciation rights agreement for employees other than the CEO +
10-Q 10.3 July 2, 2022
10.18 F orm of 2023 stock-settled stock appreciation rights agreement for employees (including the CEO). +
10-Q 10.3 July 1, 2023
10.19 Form of 2013-16 time-vested stock appreciation rights agreement for CEO. +
10-Q 10.4 March 30, 2013
10.20 Form of 2017 time-vested stock appreciation rights agreement for CEO. +
10-Q 10.2 April 1, 2017
10.21 Form of 2018 stock appreciation rights agreement for CEO. +
10-Q 10.5 June 30, 2018
10.22 Form of 2019 stock appreciation rights agreement for CEO. +
10-Q 10.5 June 29, 2019
10.23 Form of 2020 stock appreciation rights agreement for CEO. +
10-Q 10.5 June 27, 2020
10.24 Form of 2021 time-vested restricted stock unit agreement for employees other than the CEO. +
10-Q 10.2 July 3, 2021
10.25 Form of 2022 time-vested restricted stock unit agreement for employees other than the CEO. +
10-Q 10.2 July 2, 2022
10.26 Form of 2023 time-restricted stock unit agreement for all employees (including the CEO). +
10-Q 10.2 July 1, 2023
10.27 Form of 2021 performance-vested restricted stock unit agreement for employees other than the CEO. +
10-Q 10.1 July 3, 2021
10.28 Form of 2022 performance-vested restricted stock unit agreement for employees other than CEO +
10-Q 10.1 July 2, 2022
10.29 Form of 2023 performance-vested restricted stock unit agreement for all employees (including the CEO). +
10-Q 10.1 July 1, 2023
10.30 Form of 2021 time-vested restricted stock unit agreement for CEO. +
10-Q 10.5 July 3, 2021
10.31 Form of 2022 time-vested restricted stock unit agreement for CEO +
10-Q 10.5 July 2, 2022
10.32 Form of 2021 performance-vested restricted stock unit agreement for CEO. +
10-Q 10.4 July 3, 2021
10.33 Form of 2022 performance-vested restricted stock unit agreement for CEO+
10-Q 10.4 July 2, 2022
10.34 Amended and Restated Credit Agreement, dated July 26, 2017 (originally dated as of October 27, 2014), by and among Zebra, the lenders and issuing banks party thereto, JPMorgan Chase Bank, N.A., and Morgan Stanley Senior Funding, Inc.
10-Q 10.1 July 1, 2017
10.35 Amendment No. 1, dated May 31, 2018, to the Amended and Restated Credit Agreement of July 26, 2017 (originally dated as of October 27, 2014), by and among Zebra, the lenders and issuing banks party thereto, JPMorgan Chase Bank, N.A., and Morgan Stanley Senior Funding, Inc.
10-Q 10.7 June 30, 2018
10.36 Amendment No. 2, dated August 9, 2019, to the Amended and Restated Credit Agreement of July 26, 2017 (originally dated as of October 27, 2014 and amended by Amendment No. 1 dated May 31, 2018), by and among, Zebra, the lenders party thereto, JPMorgan Chase Bank, N.A.
10-Q 10.1 September 28, 2019
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10.37 Conformed Amended and Restated Credit Agreement, dated July 26, 2017 (originally dated as of October 27, 2014 and amended by Amendment No. 1 dated May 31, 2018, Amendment No. 2 dated August 9, 2019, and Amendment No. 3 dated May 25, 2022), by and among, Zebra, the lenders party thereto, JPMorgan Chase Bank, N.A.
10-Q 10.7 July 2, 2022
10.38 Conformed Amended and Restated Credit Agreement, dated July 26, 2017 (originally dated as of October 27, 2014 and amended by Amendment No. 1 dated May 31, 2018 and Amendment No. 2 dated August 9, 2019), by and among Zebra, the lenders party thereto, JPMorgan Chase Bank, N.A.
10-Q 10.2 September 28, 2019
10.39 364-Day Credit Agreement dated September 1, 2020, by and among, Zebra, the lenders party thereto, and JPMorgan Chase Bank, N.A.
10-Q 10 September 26, 2020
10.40 Office Lease dated November 14, 2013 between Griffin Capital Corporation (as assignee from Northwestern Mutual Life Insurance Company) and Zebra Technologies Corporation.
10-K 10.34 December 31, 2017
10.41 First Amendment to Lease dated June 6, 2014 between Griffin Capital Corporation (as assignee from Northwestern Mutual Life Insurance Company) and Zebra Technologies Corporation.
10-K 10.35 December 31, 2017
10.42 Second Amendment to Lease dated as of June 1, 2022 between Griffin Capital Corporation (as assignee from Northwestern Mutual Life Insurance Company) and Zebra Technologies Corporation.
10-Q 10.6 July 2, 2022
10.43 Receivables Purchase Agreement dated as of December 1, 2017 among Zebra Technologies International, LLC, as the Originator, and Zebra Technologies RSC, LLC, as Buyer.
10-K 10.36 December 31, 2017
10.44 Receivables Financing Agreement, dated as of December 1, 2017, by and among Zebra Technologies RSC, LLC, the lenders from time to time party thereto, PNC Bank, National Association, Zebra Technologies, LLC, and PNC Capital Markets, LLC.
10-K 10.37 December 31, 2017
10.45 Second Amendment to Receivables Financing Agreement, dated as of March 19, 2021 by and among Zebra Technologies RSC, LLC, the lenders from time to time party thereto, PNC Bank, National Association, Zebra Technologies, LLC, and PNC Capital Markets, LLC
10-Q 10 April 3, 2021
10.46 Master Accounts Receivable Purchase Agreement dated December 19, 2018 among Zebra Technologies Europe Limited, Zebra Technologies Corporation, and MUFG Bank, Ltd.
10-K 10.43 December 31, 2018
10.47 Master Framework Agreement dated April 29, 2020 among Zebra Technologies Europe Limited, Zebra Technologies Asia Pacific PTE.LTD., Zebra Technologies Corporation, Ester Finance Titrisation, Credit Agricole Corporate & Investment Bank and Credit Agricole Leasing & Factoring
10-Q 10.7 June 27, 2020
10.48 First Deed of Amendment relating to the Master Framework Agreement dated April 29, 2020 among Zebra Technologies Europe Limited, Zebra Technologies Asia Pacific PTE.LTD., Zebra Technologies Corporation, Ester Finance Titrisation, Credit Agricole Corporate & Investment Bank and Credit Agricole Leasing & Factoring
10-K 10.50 December 31, 2020
10.49 English Receivables Purchase Agreement dated April 29, 2020 Zebra Technologies Europe Limited, Zebra Technologies Corporation, Credit Agricole Corporate & Investment Bank, Credit Agricole Leasing & Factoring, and Ester Finance Titrisation
10-Q 10.8 June 27, 2020
10.50 Singapore Receivables Purchase Agreement dated April 29, 2020 Zebra Technologies Asia Pacific PTE.LTD., Zebra Technologies Corporation, Credit Agricole Corporate & Investment Bank, Credit Agricole Leasing & Factoring, and Ester Finance Titrisation
10-Q 10.9 June 27, 2020
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21 Subsidiaries of the Company.
X
23 Consent of Ernst & Young LLP, independent registered public accounting firm.
X
31.1 Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.
X
31.2 Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.
X
32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
97 A ccounting Restatement Clawback Policy
X
101 The following financial information from Zebra Technologies Corporation Annual Report on Form 10-K, for the year ended December 31, 2023, formatted in Inline XBRL: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Stockholders’ Equity; (v) the Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements. The instance document does not appear in the interactive data file because Inline XBRL tags are embedded in the iXBRL document.
104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL (included in Exhibit 101).
+ Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 15th day of February 2024.
ZEBRA TECHNOLOGIES CORPORATION
By: /s/ William J. Burns
William J. Burns
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ William J. Burns
William J. Burns
Chief Executive Officer and Director
(Principal Executive Officer)
February 15, 2024
/s/ Nathan Winters
Nathan Winters
Chief Financial Officer
(Principal Financial Officer) February 15, 2024
/s/ Colleen M. O’Sullivan
Colleen M. O’Sullivan
Senior Vice President, Chief Accounting Officer
(Principal Accounting Officer) February 15, 2024
/s/ Anders Gustafsson
Anders Gustafsson
Executive Chair
February 15, 2024
/s/ Michael A. Smith
Michael A. Smith
Lead Independent Director
February 15, 2024
/s/ Linda M. Connly
Linda M. Connly
Director February 15, 2024
/s/ Nelda J. Connors
Nelda J. Connors
Director February 15, 2024
/s/ Satish Dhanasekaran
Satish Dhanasekaran
Director February 15, 2024
/s/ Richard L. Keyser
Richard L. Keyser
Director February 15, 2024
/s/ Ross W. Manire
Ross W. Manire
Director February 15, 2024
/s/ Frank B. Modruson
Frank B. Modruson
Director February 15, 2024
/s/ Janice M. Roberts
Janice M. Roberts
Director February 15, 2024
83