Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 20, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PayPal Holdings, Inc. | |
Entity Trading Symbol | PYPL | |
Entity Central Index Key | 1,633,917 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 1,187,386,825 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 2,879 | $ 2,883 |
Short-term investments | 3,427 | 2,812 |
Accounts receivable, net | 258 | 283 |
Loans and interest receivable, net of allowances of $139 and $129 as of March 31, 2018 and December 31, 2017, respectively | 1,579 | 1,314 |
Loans and interest receivable, held for sale | 6,537 | 6,398 |
Funds receivable and customer accounts | 19,162 | 18,242 |
Prepaid expenses and other current assets | 900 | 713 |
Total current assets | 34,742 | 32,645 |
Long-term investments | 1,487 | 1,961 |
Property and equipment, net | 1,523 | 1,528 |
Goodwill | 4,338 | 4,339 |
Intangible assets, net | 138 | 168 |
Other assets | 94 | 133 |
Total assets | 42,322 | 40,774 |
Current liabilities: | ||
Accounts payable | 187 | 257 |
Notes payable | 3,000 | 1,000 |
Funds payable and amounts due to customers | 20,662 | 19,742 |
Accrued expenses and other current liabilities | 1,767 | 1,781 |
Income taxes payable | 98 | 83 |
Total current liabilities | 25,714 | 22,863 |
Deferred tax liability and other long-term liabilities | 1,967 | 1,917 |
Total liabilities | 27,681 | 24,780 |
Commitments and Contingencies (Note 13) | ||
Equity: | ||
Common stock, $0.0001 par value; 4,000 shares authorized; 1,183 and 1,200 shares outstanding as of March 31, 2018 and December 31, 2017, respectively | 0 | 0 |
Treasury stock at cost, 71 and 47 shares as of March 31, 2018 and December 31, 2017, respectively | (3,811) | (2,001) |
Additional paid-in-capital | 14,287 | 14,314 |
Retained earnings | 4,334 | 3,823 |
Accumulated other comprehensive loss | (169) | (142) |
Total equity | 14,641 | 15,994 |
Total liabilities and equity | $ 42,322 | $ 40,774 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEET (PARENTHETICAL) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts, loans and interest receivable | $ 139 | $ 129 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 4,000,000,000 | 4,000,000,000 |
Common stock, shares outstanding (in shares) | 1,183,000,000 | 1,200,000,000 |
Treasury stock, shares (in shares) | 71,000,000 | 47,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net revenues | $ 3,685 | $ 2,975 |
Operating expenses: | ||
Transaction expense | 1,275 | 987 |
Transaction and loan losses | 305 | 300 |
Customer support and operations | 351 | 317 |
Sales and marketing | 285 | 238 |
Product development | 258 | 214 |
General and administrative | 339 | 265 |
Depreciation and amortization | 185 | 183 |
Restructuring and other charges | 153 | 40 |
Total operating expenses | 3,151 | 2,544 |
Operating income | 534 | 431 |
Other income (expense), net | 14 | 7 |
Income before income taxes | 548 | 438 |
Income tax expense | 37 | 54 |
Net income | $ 511 | $ 384 |
Net income per share: | ||
Basic (in usd per share) | $ 0.43 | $ 0.32 |
Diluted (in usd per share) | $ 0.42 | $ 0.32 |
Weighted average shares: | ||
Basic (in shares) | 1,192 | 1,203 |
Diluted (in shares) | 1,217 | 1,216 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 511 | $ 384 |
Other comprehensive (loss) income, net of reclassification adjustments: | ||
Foreign currency translation | 2 | 13 |
Unrealized (losses) gains on investments, net | (15) | 1 |
Tax benefit (expense) on unrealized (losses) gains on investments, net | 4 | 0 |
Unrealized (losses) gains on hedging activities, net | (18) | (72) |
Tax benefit (expense) on unrealized (losses) gains on hedging activities, net | 0 | 1 |
Other comprehensive (loss) income, net of tax | (27) | (57) |
Comprehensive income | $ 484 | $ 327 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 511 | $ 384 |
Adjustments: | ||
Transaction and loan losses | 305 | 300 |
Depreciation and amortization | 185 | 183 |
Stock-based compensation | 205 | 145 |
Deferred income taxes | 91 | 53 |
Gain on sale of principal loans receivable held for sale, net | (5) | (6) |
Cost basis adjustments to loans and interest receivable held for sale | 128 | 0 |
Changes in assets and liabilities: | ||
Accounts receivable | 25 | 36 |
Changes in loans and interest receivable held for sale, net | (1,291) | 6 |
Accounts payable | (35) | (1) |
Income taxes payable | 0 | 17 |
Other assets and liabilities | (468) | (366) |
Net cash (used in) provided by operating activities | (349) | 751 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (178) | (148) |
Changes in principal loans receivable, net | 738 | (136) |
Purchases of investments | (5,275) | (7,109) |
Maturities and sales of investments | 4,291 | 5,583 |
Funds receivable | 429 | 567 |
Net cash provided by (used in) investing activities | 5 | (1,243) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 13 | 12 |
Purchases of treasury stock | (1,825) | (517) |
Tax withholdings related to net share settlements of equity awards | (335) | (101) |
Borrowings under financing arrangements, net of repayments | 2,075 | 0 |
Funds payable and amounts due to customers | 865 | 552 |
Net cash provided by (used in) financing activities | 793 | (54) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (7) | 11 |
Net change in cash, cash equivalents and restricted cash | 442 | (535) |
Cash, cash equivalents and restricted cash at beginning of period | 8,285 | 6,119 |
Cash, cash equivalents and restricted cash at end of period | 8,727 | 5,584 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 8 | 1 |
Refund received for income taxes, net | (6) | |
Cash paid for income taxes, net | 48 | |
The below table reconciles cash, cash equivalents and restricted cash as reported in the condensed consolidated balance sheet to the total of the same amounts shown in the condensed consolidated statements of cash flows: | ||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 8,285 | $ 6,119 |
Overview and Summary of Signifi
Overview and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Summary of Significant Accounting Policies | Overview and Summary of Significant Accounting Policies Overview and Organization PayPal Holdings, Inc. ("PayPal," the "Company," "we," "us," or "our") was incorporated in Delaware in January 2015 and is a leading technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants worldwide. Our vision is to democratize financial services, as we believe that managing and moving money is a right for all people, not just the affluent. Our goal is to increase our relevance for consumers and merchants to manage and move their money anywhere in the world, anytime, on any platform and using any device. We also facilitate person-to-person payments through our PayPal, Venmo and Xoom products. Our combined payment solutions, including our PayPal, PayPal Credit, Braintree, Venmo, and Xoom products, compose our proprietary Payments Platform. We operate globally and in a rapidly evolving regulatory environment characterized by a heightened regulatory focus on all aspects of the payments industry. That focus continues to become even more heightened as regulators on a global basis focus on such important issues as countering terrorist financing, anti-money laundering, privacy and consumer protection. Some of the laws and regulations to which we are subject were enacted recently, and the laws and regulations applicable to us, including those enacted prior to the advent of digital and mobile payments, are continuing to evolve through legislative and regulatory action and judicial interpretation. Non-compliance with laws and regulations, increased penalties and enforcement actions related to non-compliance, changes in laws and regulations or their interpretation, and the enactment of new laws and regulations applicable to us could have a material adverse impact on our business, results of operations and financial condition. Significant Accounting Policies Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the financial statements of PayPal and our wholly and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Investments in entities where we hold less than a 20% ownership interest are generally accounted for at cost minus impairment, if any, plus or minus changes resulting from observable price changes, and our share of the investees’ results of operations and is included in other income (expense), net on our condensed consolidated statement of income to the extent dividends are received. Our investment balance is included in long-term investments on our condensed consolidated balance sheet. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the " 2017 Form 10-K") filed with the Securities and Exchange Commission. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for fair presentation of the condensed consolidated financial statements for interim periods. We have evaluated all subsequent events through the date the financial statements were issued. Certain amounts for prior years have been reclassified to conform to the financial presentation as of and for the three months ended March 31, 2018. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses, during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to provisions for transaction and loan losses, loss contingencies, income taxes, revenue recognition and the valuation of goodwill and intangible assets. We base our estimates on historical experience and various other assumptions which we believe to be reasonable under the circumstances. Actual results could differ from those estimates. Recent Accounting Guidance In 2016, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to accounting for leases, which will require lessees to recognize lease assets and lease liabilities on the balance sheet for the rights and obligations created by all leases with terms greater than 12 months. As we are not a lessor, other changes in the guidance applicable to lessors do not apply. The guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. We will adopt the new guidance on January 1, 2019, using a modified retrospective basis and anticipate applying the optional practical expedients related to the transition. We are evaluating the impact of adopting this new accounting guidance on our financial statements. In 2016, the FASB issued new guidance on the measurement of credit losses on financial instruments. Credit losses on loans, trade and other receivables, held-to-maturity debt securities and other instruments will reflect our current estimate of the expected credit losses that generally will result in the earlier recognition of allowances for losses. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. Additional disclosures will be required, including information used to track credit quality by year of origination for most financing receivables. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are required to apply the provisions of this guidance as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted with impairment of available-for-sale debt securities applied prospectively after adoption. We are evaluating the impact and approach to adopting this new accounting guidance on our financial statements. In 2017, the FASB issued new guidance that requires certain premiums on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. Therefore, the new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Transition is on a modified retrospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are evaluating the impact this new accounting guidance will have on our financial statements. In 2018, the FASB issued new guidance in response to tax reform that allows the option to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the "Tax Act") from accumulated other comprehensive income to retained earnings. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. If such an option is elected, transition can be applied either retrospectively to each period in which the effect of tax reform is recognized or applied with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are evaluating the impact this new accounting guidance will have on our financial statements. Recently Adopted Accounting Guidance In 2014, the FASB issued new accounting guidance related to revenue recognition, which was further updated in 2016 for reporting revenue gross versus net. This new guidance replaced all existing GAAP guidance on this topic and eliminated all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. We adopted the guidance effective January 1, 2018 on a full retrospective basis. We performed an impact analysis for the opening balance sheet as of January 1, 2016 as well as for the years ended December 31, 2016 and 2017. The impacts were deemed de minimis. No practical expedients or exemptions were elected in conjunction with the adoption of this new guidance. For additional information, see "Note 2—Revenue." In 2016, the FASB issued new accounting guidance related to the classification and measurement of financial instruments. This new guidance amends GAAP by requiring equity investments to be measured at fair value with changes in fair value recognized in net income. This new guidance also amends the presentation of certain fair value changes for financial liabilities measured at fair value and it amends certain disclosure requirements associated with the fair value of financial instruments. Additionally, in 2018, the FASB issued technical corrections and improvements to this guidance effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years beginning after June 15, 2018. We are required to apply the new guidance on a modified retrospective basis to all outstanding instruments, with a cumulative effect adjustment as of the date of adoption and on a prospective basis to all outstanding equity investments without a readily determinable fair value. We adopted the guidance, including early adoption of the technical corrections and improvements, effective January 1, 2018. Beginning in the first quarter of 2018, we applied the measurement alternative to all our equity investments, which required us to measure these equity investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer. The adoption of this guidance did not have a material impact on our financial statements. In 2016, the FASB issued new guidance on classifying certain cash receipts and cash payments on the statement of cash flows. The new guidance addresses the classification of cash flows related to: debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, including bank-owned life insurance, distributions received from equity method investees and beneficial interests in securitization transactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance should be applied retrospectively after adoption. We adopted the guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial statements. In 2016, the FASB issued new guidance on restricted cash on the statement of cash flows. The new guidance requires the classification and presentation of changes in restricted cash and cash equivalents in the statement of cash flows. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning and ending balances shown on the statement of cash flows. The guidance should be applied retrospectively after adoption. We adopted the guidance effective January 1, 2018 on a retrospective basis. The beginning and ending balances of cash and cash equivalents on the statement of cash flows now include restricted cash and restricted cash equivalents, such as cash and cash equivalents underlying customer accounts and restricted cash and restricted cash equivalents within short-term investments. In 2017, the FASB issued new guidance clarifying the scope and application of the de-recognition of non-financial assets and the sale or transfer of non-financial assets, including partial sales. We adopted the guidance effective January 1, 2018 on a full retrospective basis. The adoption of this guidance did not have a material impact on our financial statements. In 2017, the FASB issued new guidance clarifying which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Specifically, an entity would apply modification accounting only if the fair value, vesting conditions, or classification of the awards changes as a result of changes in the terms or conditions. We adopted the guidance effective January 1, 2018 and applied it prospectively upon adoption. The adoption of this guidance did not have a material impact on our financial statements. In 2017, the FASB issued new guidance intended to better align the results of hedge accounting with an entity’s risk management activities. This guidance updates the designation and measurement guidance for qualifying hedging relationships by expanding hedge accounting for both nonfinancial and financial risk components and by refining the measurement of hedge results to better reflect an entity’s hedging strategies. The amendments will also align the recognition and presentation of the effects of the hedge results in the financial statements to increase the understandability of the results of an entity’s intended hedging strategies. Additionally, the guidance includes certain targeted improvements to ease the operational burden of applying hedge accounting. We are required to apply the guidance with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is adopted and prospectively apply the presentation and disclosure guidance. We early adopted the guidance in the first quarter of 2018 using a modified retrospective approach to reflect application of the new guidance effective January 1, 2018. Adoption of the guidance did not have a material impact on our financial statements. In 2018, the FASB issued new guidance to provide clarity around application of income tax accounting in situations where the assessment of tax implications of the Tax Act might not be complete as of period end in which the Tax Act was enacted. This guidance prescribes that an entity must reflect the income tax impact of the Tax Act in the period in which the tax accounting is complete and allows an entity to report provisional amounts for those specific effects of the Act for which the accounting is incomplete but a reasonable estimate can be determined. No provisional amounts should be reported for specific effects of the Tax Act for which a reasonable estimate cannot be determined, and the entity should continue to apply the provisions of the tax laws that were in effect prior to the enactment of the Tax Act. It further allows a measurement period of one year from the date of enactment within which to complete the accounting for all impacts of the Tax Act. Our financial statements reflect tax accounting in compliance with this guidance. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue We earn revenue primarily by processing customer transactions on our Payments Platforms and from other value added services. Our revenues are classified into two categories, transaction revenues and revenues from other value added services: Transaction Revenues We earn transaction revenues primarily from fees charged to consumers and merchants on a transaction basis. These fees may have a fixed and variable component. The variable component is generally a percentage of the value of the payment amount, and is known at the time the transaction is processed. If the underlying transaction is approved for refund, we reimburse the variable component of the fee. We estimate the amount of fee refunds that will be processed during the quarter and record a provision against our net revenues. The volume of activity processed through our Payments Platform, which results in transaction revenue, is referred to as Total Payments Volume (“TPV”). We define TPV as the value of payments, net of reversals, successfully completed through our Payments Platform or enabled by PayPal via a partner payment solution, not including gateway-exclusive transactions. We earn additional fees on transactions where we perform a currency conversion and when we enable cross-border transactions (i.e., transactions where the merchant and consumer are in different countries). Our contracts with our customers are usually open ended and can be terminated by either party without a termination penalty after the notice period has lapsed. Therefore, our contracts are defined at the transaction level and do not extend beyond the service already provided. Our contracts renew automatically without significant material rights. Some of our contracts include tiered pricing, based primarily on volume. The fee charged per transaction is adjusted up or down if the volume processed for a specified period is different from prior period defined volumes. We have concluded that this volume-based pricing approach does not constitute a future material right since the discount is within a range typically offered to class of customers with similar volume. We provide account set up and payment-processing services and account for these services as one performance obligation satisfied at a point in time when the payment transaction is complete. The transaction price is therefore fully allocated to one performance obligation. We deduct our fees from the transaction payment processed. We do not have any capitalized contract costs, and do not carry any contract balances. We recognize fees charged to our customers primarily on a gross basis as transaction revenue when we are the principal in respect of processing payments. As a principal to the transaction, we bear primary responsibility for the fulfillment of the payment service, contract directly with our customers, control the product specifications and define the value proposal from our services. Further, we have full discretion in determining the fee charged to our customers, and therefore, we bear the full margin risk. We are also responsible for providing customer support. Related transaction costs paid to our payment processors and other financial institutions are recognized as transaction expense. We provide merchants and consumers with protection programs on substantially all transactions completed through our Payments Platforms, except for transactions using our gateway products. These programs protect both merchants and consumers from loss primarily due to fraud and counterparty performance. Our buyer protection program provides protection to consumers for qualifying purchases by reimbursing the consumer for the full amount of the purchase if a purchased item does not arrive or does not match the seller’s description. Our seller protection programs provide protection to merchants against claims that a transaction was not authorized by the buyer or claims that an item was not received by covering the seller for the full amount of the payment on eligible sales. These protection programs are considered standard service warranties for which we estimate and record associated costs in transaction and loan losses during the period the payment transaction is processed. Revenues from Other Value Added Services We earn revenues from other value added services which comprise revenue earned through partnerships, subscription fees, gateway fees, and other services that we provide to our consumers and merchants. The contracts for these services cannot usually be terminated by either party without penalty. These contracts typically have one performance obligation which is provided and recognized over the term of the contract. The transaction price is generally fixed and known at the end of each reporting period, however, for some agreements, it may be necessary to estimate the transaction price using the expected value method. We recognize revenue received from our financial institution partners on a net basis when we are considered the agent in respect of processing transactions. As we are an agent to the transaction, our financial institution partners directly contract with the end customers and are ultimately responsible for the fulfillment of the services. In an agent relationship, we may have some discretion in determining the fee charged to end customers, but always in conjunction with a financial institution partner. As a result, related costs incurred by our financial institution partners when we are an agent are included as a reduction to the revenue share received. We also earn revenues from interest and fees earned on our loans receivable portfolio, gain on sale of participation interest in certain loans and advances and interest earned on certain PayPal customer account balances. Interest and fees earned on the PayPal credit portfolio of loans receivable are computed and recognized based on contractual interest and fee rates, and are net of any required reserves and amortization of deferred origination costs. Disaggregation of Revenue We determine operating segments based on how our chief operating decision maker (“CODM”) manages the business, makes operating decisions around the allocation of resources and evaluates operating performance. Our CODM is our Chief Executive Officer, who reviews our operating results on a consolidated basis. We operate in one segment and have one reportable segment. Based on the information provided to and reviewed by our CODM, we believe that the nature, amount, timing and uncertainty of our revenue and cash flows and how they are affected by economic factors is most appropriately depicted through our primary geographical markets and type of revenue (transaction and other value added services) categories. Revenues recorded within these categories are earned from similar services for which the nature of associated fees and the related revenue recognition models are substantially the same. The following table presents our revenues disaggregated by primary geographical markets: Three Months Ended March 31, 2018 2017 (In millions) Primary geographical markets United States ("U.S.") $ 2,023 $ 1,606 United Kingdom ("U.K.") 392 313 Other countries (1) 1,270 1,056 Total revenues (2) $ 3,685 $ 2,975 Types of revenues Transaction revenues $ 3,197 $ 2,624 Other value added services 488 351 Total revenues (2) $ 3,685 $ 2,975 (1) No single country included in the other countries category generated more than 10% of total revenue. (2) Total revenues include interest, fees and gains earned on loan and interest receivables, net and held for sale portfolio, as well as hedging gains or losses and interest earned on certain PayPal customer balances of $359 million and $307 million for the three months ended March 31, 2018 and 2017 , respectively, which do not represent revenues recognized in the scope of ASC Topic 606, Revenue from contracts with customers . Net revenues are attributed to the U.S., the U.K. and other countries primarily based upon the country in which the merchant is located, or in the case of a cross-border transaction, may be earned from the country in which the consumer and the merchant respectively reside. Net revenues earned from value added services are typically attributed to the country in which either the customer or partner reside. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding for the period. The dilutive effect of outstanding equity incentive awards is reflected in diluted net income per share by application of the treasury stock method. The calculation of diluted net income per share excludes all anti-dilutive common shares. The following table sets forth the computation of basic and diluted net income per share for the periods indicated: Three Months Ended March 31, 2018 2017 (In millions, except per share amounts) Numerator: Net income $ 511 $ 384 Denominator: Weighted average shares of common stock - basic 1,192 1,203 Dilutive effect of equity incentive awards 25 13 Weighted average shares of common stock - diluted 1,217 1,216 Net income per share: Basic $ 0.43 $ 0.32 Diluted $ 0.42 $ 0.32 Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive — 6 |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations There were no acquisitions or divestitures completed in either the three months ended March 31, 2018 or 2017 . |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following table presents goodwill balances and adjustments to those balances during the three months ended March 31, 2018 : December 31, Goodwill Acquired Adjustments March 31, (In millions) Total goodwill $ 4,339 $ — $ (1 ) $ 4,338 Intangible Assets The components of identifiable intangible assets are as follows: March 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) (In millions, except years) Intangible assets: Customer lists and user base $ 613 $ (574 ) $ 39 3 $ 613 $ (563 ) $ 50 3 Marketing related 198 (197 ) 1 1 198 (196 ) 2 1 Developed technologies 274 (227 ) 47 3 274 (215 ) 59 3 All other 245 (194 ) 51 5 245 (188 ) 57 5 Intangible assets, net $ 1,330 $ (1,192 ) $ 138 $ 1,330 $ (1,162 ) $ 168 Amortization expense for intangible assets was $30 million and $27 million for the three months ended March 31, 2018 and 2017 , respectively. Expected future intangible asset amortization as of March 31, 2018 was as follows (in millions): Fiscal years: Remaining 2018 $ 69 2019 42 2020 27 $ 138 |
Geographical Information
Geographical Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Geographical Information | Geographical Information The following table summarizes long-lived assets based on geography: March 31, December 31, (In millions) Long-lived assets: U.S. $ 1,422 $ 1,432 Other countries 101 96 Total long-lived assets $ 1,523 $ 1,528 Tangible long-lived assets as of March 31, 2018 and December 31, 2017 consisted of property and equipment. Long-lived assets attributed to the U.S. and other countries are based upon the country in which the asset is located or owned. |
Funds Receivable and Customer A
Funds Receivable and Customer Accounts | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Funds Receivable and Customer Accounts | Funds Receivable and Customer Accounts The following table summarizes the assets underlying our funds receivable and customer accounts as of March 31, 2018 and December 31, 2017 . March 31, December 31, (In millions) Cash and cash equivalents $ 5,832 $ 5,387 Government and agency securities 8,036 6,651 Time deposits 373 739 Corporate debt securities 1,129 1,248 Funds receivable 3,792 4,217 Total funds receivable and customer accounts $ 19,162 $ 18,242 As of March 31, 2018 and December 31, 2017 , the estimated fair value of our investments classified as available-for-sale included within funds receivable and customer accounts was as follows: March 31, 2018 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Government and agency securities $ 6,962 $ — $ (6 ) $ 6,956 Corporate debt securities 392 — (1 ) 391 Total $ 7,354 $ — $ (7 ) $ 7,347 December 31, 2017 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Government and agency securities $ 5,946 $ — $ (5 ) $ 5,941 Corporate debt securities 529 — — 529 Total $ 6,475 $ — $ (5 ) $ 6,470 We elect to account for certain investments within customer accounts, including foreign-currency denominated available-for-sale investments, under the fair value option. As a result, any gains and losses from fair value changes on such investments are recognized in other income (expense), net on the condensed consolidated statement of income. Election of the fair value option allows us to significantly reduce the accounting asymmetry that would otherwise arise when recognizing the changes in the fair value of available-for-sale investments and the corresponding foreign exchange gains and losses relating to customer liabilities. As of March 31, 2018 and December 31, 2017 , the estimated fair value of our investments included within funds receivable and customer accounts under the fair value option was $1.8 billion and $1.4 billion , respectively. In the three months ended March 31, 2018 and 2017 , $40 million and $15 million of net gains from fair value changes, respectively, were recognized in other income (expense), net on the condensed consolidated statement of income. The aggregate fair value of investments in an unrealized loss position was $6.4 billion as of March 31, 2018 and $6.0 billion as of December 31, 2017 . The aggregate gross unrealized loss on our short-term and long-term investments was not material as of March 31, 2018 and December 31, 2017 . We believe the decline in value is due to temporary market conditions and expect to recover the entire amortized cost basis of the securities. We neither intend nor anticipate the need to sell the securities before recovery. We will continue to monitor the performance of the investment portfolio and assess market and interest rate risk when evaluating whether other-than-temporary impairment exists. As of March 31, 2018 and December 31, 2017 , we had no material investments that had been in a continuous unrealized loss position for greater than 12 months. Amounts reclassified to earnings from unrealized gains and losses were not material for the three months ended March 31, 2018 and 2017 . The estimated fair values of our investments classified as available-for-sale included within funds receivable and customer accounts by date of contractual maturity at March 31, 2018 were as follows: March 31, (In millions) One year or less $ 7,292 One year through two years 26 Two years through three years 29 Total $ 7,347 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments As of March 31, 2018 and December 31, 2017 , the estimated fair value of our short-term and long-term investments classified as available-for-sale was as follows: March 31, 2018 Gross Gross Gross Estimated (In millions) Short-term investments (1)(2) : Corporate debt securities $ 2,340 $ — $ (4 ) $ 2,336 Government and agency securities 495 — (1 ) 494 Long-term investments (1) : Corporate debt securities 1,324 1 (16 ) 1,309 Government and agency securities 88 — — 88 Total (1)(2) $ 4,247 $ 1 $ (21 ) $ 4,227 (1) Excludes short-term restricted cash of $81 million that we intend to use to support our global sabbatical program and a counterparty guarantee, and long-term restricted cash of $2 million . (2) Excludes time deposits of $199 million , which are not considered available-for-sale securities. December 31, 2017 Gross Gross Gross Estimated (In millions) Short-term investments (1)(2) : Corporate debt securities $ 2,092 $ 1 $ (1 ) $ 2,092 Government and agency securities 210 — — 210 Long-term investments (1) : Corporate debt securities 1,769 2 (7 ) 1,764 Government and agency securities 98 — — 98 Total (1)(2) $ 4,169 $ 3 $ (8 ) $ 4,164 (1) Excludes short-term restricted cash of $79 million that we intend to use to support our global sabbatical program and a counterparty guarantee, and long-term restricted cash of $2 million . (2) Excludes time deposits of $163 million , which are not considered available-for-sale securities. We elected to account for foreign denominated available-for-sale investments held in our Luxembourg banking subsidiary under the fair value option. Election of the fair value option allows us to recognize any gains and losses from fair value changes on such investments in other income (expense), net on the condensed consolidated statement of income to offset certain foreign exchange gains and losses on our foreign denominated customer liabilities. As of March 31, 2018 and December 31, 2017 , the estimated fair value of our investments included within short-term investments and long-term investments under the fair value option was $317 million and $277 million , respectively. In the three months ended March 31, 2018 and 2017 , $8 million and $6 million , respectively, of net gains from fair value changes were recognized in other income (expense), net on the condensed consolidated statement of income. The aggregate fair value of short-term and long-term investments in an unrealized loss position was $3.4 billion as of March 31, 2018 and $2.8 billion as of December 31, 2017 , of which $206 million and $207 million , respectively, was in a continuous unrealized loss position for greater than 12 months. The aggregate gross unrealized loss on our short-term and long-term investments was not material as of March 31, 2018 and December 31, 2017. We believe the decline in value is due to temporary market conditions and expect to recover the entire amortized cost basis of the securities. We neither intend nor anticipate the need to sell the securities before recovery. We will continue to monitor the performance of the investment portfolio and assess market and interest rate risk when evaluating whether other-than-temporary impairment exists. Amounts reclassified to earnings from unrealized gains and losses were not material for the three months ended March 31, 2018 and 2017 . The estimated fair values of our short-term and long-term investments classified as available-for-sale by date of contractual maturity at March 31, 2018 were as follows: March 31, 2018 (In millions) One year or less $ 2,830 One year through two years 823 Two years through three years 344 Three years through four years 171 Four years through five years 49 Greater than five years 10 Total $ 4,227 Other Investments We have equity investments which consist primarily of minority equity interests in companies that are not publicly traded and are reported in long-term investments on our condensed consolidated balance sheet. Our equity investments totaled $88 million as of March 31, 2018 and December 31, 2017 . |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Assets and Liabilities | Fair Value Measurement of Assets and Liabilities Financial Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 : March 31, 2018 Significant Other (In millions) Assets: Cash and cash equivalents (1) $ 1,104 $ 1,104 Short-term investments (2) : Corporate debt securities 2,419 2,419 Government and agency securities 728 728 Total short-term investments $ 3,147 $ 3,147 Funds receivable and customer accounts (3) 9,424 9,424 Derivatives 56 56 Long-term investments (2) : Corporate debt securities 1,309 1,309 Government and agency securities 88 88 Total long-term investments 1,397 1,397 Total financial assets $ 15,128 $ 15,128 Liabilities: Derivatives $ 197 $ 197 (1) Excludes cash of $1.8 billion not subject to fair value measurement on a recurring basis. (2) Excludes restricted cash of $83 million , time deposits of $199 million , and equity investments of $88 million not subject to fair value measurement on a recurring basis. (3) Excludes cash, time deposits and funds receivable of $9.7 billion underlying funds receivable and customer accounts not subject to fair value measurement on a recurring basis. December 31, 2017 Significant Other (In millions) Assets: Cash and cash equivalents (1) $ 791 $ 791 Short-term investments (2) : Corporate debt securities 2,219 2,219 Government and agency securities 351 351 Total short-term investments 2,570 2,570 Funds receivable and customer accounts (3) 8,007 8,007 Derivatives 66 66 Long-term investments (2) : Corporate debt securities 1,773 1,773 Government and agency securities 98 98 Total long-term investments 1,871 1,871 Total financial assets $ 13,305 $ 13,305 Liabilities: Derivatives $ 218 $ 218 (1) Excludes cash of $2.1 billion not subject to fair value measurement on a recurring basis. (2) Excludes restricted cash of $81 million , time deposits of $163 million , and equity investments of $88 million not subject to fair value measurement on a recurring basis. (3) Excludes cash, time deposits and funds receivable of $10.2 billion underlying funds receivable and customer accounts not subject to fair value measurement on a recurring basis. Our financial assets and liabilities are valued using market prices on both active markets (Level 1) and less active markets (Level 2). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. A majority of our derivative instruments are valued using pricing models that take into account the contract terms as well as multiple inputs where applicable, such as currency rates, interest rate yield curves, option volatility and equity prices. Our derivative instruments are primarily short-term in nature, generally one month to one year in duration. Certain foreign currency contracts designated as cash flow hedges may have a duration of up to 18 months. We did not have any transfers of financial instruments between valuation levels during the three months ended March 31, 2018 and 2017 . As of March 31, 2018 , we did not have any assets or liabilities requiring measurement at fair value without observable market values that would require a high level of judgment to determine fair value (Level 3). Cash and cash equivalents are short-term, highly liquid investments with original maturities of three months or less when purchased and are comprised primarily of bank deposits, government and agency securities and commercial paper. We elect to account for foreign currency denominated available-for-sale investments underlying funds receivable and customer accounts, short term investments and long term investments under the fair value option as further discussed in "Note 7—Funds Receivable and Customer Accounts" and "Note 8—Investments." Financial Assets and Liabilities Not Measured and Recorded at Fair Value Our financial instruments, including cash, time deposits, accounts receivable, loans and interest receivable, net, loans and interest receivable held for sale, funds receivable, certain customer accounts, accounts payable, notes payable, and funds payable and amounts due to customers are carried at cost, which approximates their fair value due to the short-term maturity of these instruments. If these financial instruments were measured at fair value in the financial statements, cash would be classified as Level 1, time deposits, certain customer accounts, and notes payable would be classified as Level 2, and the remaining financial instruments would be classified as Level 3 in the fair value hierarchy. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Summary of Derivative Instruments Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. Our derivatives expose us to credit risk to the extent that our counterparties may be unable to meet the terms of the arrangement. We seek to mitigate such risk by limiting our counterparties to, and by spreading the risk across, major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. Foreign Exchange Contracts We transact in various foreign currencies and have significant international revenues and costs denominated in foreign currencies, which subjects us to foreign currency risk. We have a foreign currency exposure management program whereby we designate certain foreign currency exchange contracts, generally with maturities of 18 months or less, to reduce the volatility of cash flows primarily related to forecasted revenues and expenses denominated in foreign currencies. The objective of the foreign exchange contracts is to help mitigate the risk that the U.S. dollar-equivalent cash flows are adversely affected by changes in the applicable U.S. dollar/foreign currency exchange rate. These derivative instruments are designated as cash flow hedges and accordingly, the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified into revenue in the same period the forecasted transaction affects earnings. We evaluate the effectiveness of our foreign exchange contracts on a quarterly basis by comparing the change in the fair value of the derivative instruments with the change in the fair value of the forecasted cash flows of the hedged item. We did not exclude any component of the changes in fair value of the derivative instruments from the assessment of hedge effectiveness. We do not use any foreign exchange contracts for trading or speculative purposes. As of March 31, 2018 , we estimated that $126 million of net derivative losses related to our cash flow hedges included in accumulated other comprehensive income will be reclassified into earnings within the next 12 months. During the three months ended March 31, 2018 and 2017 , we did not discontinue any cash flow hedges because it was probable that the original forecasted transaction would not occur and as such, did not reclassify any gains or losses to earnings. If we elect to discontinue our cash flow hedges and it is probable that the original forecasted transaction will occur, we continue to report them in accumulated other comprehensive income (loss) until the forecasted transaction affects earnings at which point we also reclassify the de-designated hedges into earnings. Gains and losses on derivatives held after we discontinue our cash flow hedge and gains and losses on derivative instruments that are not designated as cash flow hedges are recorded in the same financial statement line item to which the derivative relates. We have an additional foreign currency exposure management program whereby we use foreign exchange contracts to offset the foreign exchange risk on our assets and liabilities denominated in currencies other than the functional currency of our subsidiaries. These contracts are not designated as hedging instruments and reduce, but do not entirely eliminate, the impact of currency exchange rate movements on our assets and liabilities. The foreign currency gains and losses on our assets and liabilities are recorded in other income (expense), net, which is offset by the gains and losses on the foreign exchange contracts. Fair Value of Derivative Contracts The fair value of our outstanding derivative instruments as of March 31, 2018 and December 31, 2017 was as follows: Balance Sheet Location March 31, December 31, (In millions) Derivative Assets: Foreign exchange contracts designated as cash flow hedges Other current assets $ 5 $ — Foreign exchange contracts not designated as hedging instruments Other current assets 51 66 Total derivative assets $ 56 $ 66 Derivative Liabilities: Foreign exchange contracts designated as cash flow hedges Other current liabilities $ 122 $ 94 Foreign exchange contracts not designated as hedging instruments Other current liabilities 75 124 Total derivative liabilities $ 197 $ 218 Net fair value of derivative instruments $ (141 ) $ (152 ) Master Netting Agreements - Rights of Setoff Under master netting agreements with respective counterparties to our foreign exchange contracts, subject to applicable requirements, we are allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, we have elected to present the derivative assets and derivative liabilities on a gross basis in our condensed consolidated balance sheet. Rights of setoff associated with our foreign exchange contracts represented a potential offset to both assets and liabilities by $52 million as of March 31, 2018 and $56 million as of December 31, 2017 . During the year ended December 31, 2017 , we entered into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain financial instruments fluctuates from contractually established thresholds. We posted $70 million and $38 million of cash collateral related to our derivative liabilities as of March 31, 2018 and December 31, 2017 , respectively, which is recognized in other current assets on our condensed consolidated balance sheet and is related to the right to reclaim cash collateral. We received $6 million in counterparty cash collateral related to our derivative assets as of March 31, 2018 which is recognized in other current liabilities on our condensed consolidated balance sheet and is related to the obligation to return cash collateral. We did no t receive any counterparty cash collateral as of December 31, 2017 . Effect of Derivative Contracts on Accumulated Other Comprehensive Income (Loss) The following table summarizes the activity of derivative contracts that qualify for hedge accounting as of March 31, 2018 and December 31, 2017 , and the impact of designated derivative instruments on accumulated other comprehensive income (loss) for the three months ended March 31, 2018 and 2017 : December 31, 2017 Amount of gains (losses) recognized in other comprehensive income Less: Amount of gains (losses) reclassified from accumulated other comprehensive income to net revenue March 31, 2018 (In millions) Foreign exchange contracts designated as cash flow hedges $ (111 ) $ (62 ) $ (44 ) $ (129 ) December 31, 2016 Amount of gains (losses) recognized in other comprehensive income Less: Amount of gains (losses) reclassified from accumulated other comprehensive income to net revenue March 31, 2017 (In millions) Foreign exchange contracts designated as cash flow hedges $ 131 $ (32 ) $ 40 $ 59 Effect of Derivative Contracts on Condensed Consolidated Statements of Income The following table provides the location in the condensed consolidated statements of income and amount of the recognized gains or losses related to our derivative instruments designated as hedging instruments: Three Months Ended March 31, 2018 2017 (In millions) Revenue Revenue Total amounts presented in the condensed consolidated statement of income in which the effects of cash flow hedges are recorded $ 3,685 $ 2,975 Gains (losses) on foreign exchange contracts designated as cash flow hedges reclassified from accumulated other comprehensive income into net income $ (44 ) $ 40 The following table provides the location in the condensed consolidated statements of income and amount of the recognized gains or losses related to our derivative instruments not designated as hedging instruments: Three Months Ended March 31, 2018 2017 (In millions) Gains (losses) on foreign exchange contracts recognized in other income (expense), net $ (44 ) $ (40 ) Gains (losses) on foreign exchange contracts recognized in net revenues (6 ) $ — Total gains (losses) recognized from foreign exchange contracts not designated as hedging instruments $ (50 ) $ (40 ) Notional Amounts of Derivative Contracts Derivative transactions are measured in terms of the notional amount; however, this amount is not recorded on the balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the derivative instruments. The notional amount is generally not exchanged, but is used only as the underlying basis on which the value of foreign exchange payments under these contracts is determined. The following table provides the notional amounts of our outstanding derivatives: March 31, 2018 December 31, 2017 (In millions) Foreign exchange contracts designated as cash flow hedges $ 3,309 $ 2,639 Foreign exchange contracts not designated as hedging instruments 6,515 5,669 Total $ 9,824 $ 8,308 |
Loans and Interest Receivable
Loans and Interest Receivable | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Loans and Interest Receivable | 760 $ 812 $ 832 680 - 759 2,474 2,439 600 - 679 2,432 2,378 < 599 804 752 Total $ 6,522 $ 6,401 FICO score segmentation included in the table above provides the credit quality of these receivables for comparative purposes only. The following table presents the delinquency status of U.S. consumer loans and interest receivable, held for sale. The amounts shown below are based on the number of days past the billing date to the consumer. Current represents balances that are within 30 days of the billing date. As of March 31, 2018 and December 31, 2017 , approximately 91.9% and 90.6% , respectively, of the portfolio of U.S. consumer loans and interest receivable, held for sale was current. March 31, 2018 (1) (In millions) Current 30 - 59 Days 60 - 89 Days 90 - 180 Days Total Past 30 days Total $ 5,994 $ 208 $ 88 $ 232 $ 528 $ 6,522 (1) Includes approximately $31 million of U.S. consumer loans and interest receivables not designated as held for sale that are fully reserved and are expected to be charged off, and excludes approximately $46 million related to accrued unbilled interest. December 31, 2017 (1) (In millions) Current 30 - 59 Days 60 - 89 Days 90 - 180 Days Total Past 30 days Total $ 5,800 $ 240 $ 103 $ 258 $ 601 $ 6,401 (1) Includes approximately $50 million of U.S. consumer loans and interest receivables not designated as held for sale that are fully reserved and are expected to be charged off, and excludes approximately $47 million related to accrued unbilled interest. No allowances are recorded for potential losses against the loans and interest receivable, held for sale portfolio. Adjustments to the cost basis of the held for sale portfolio, which are primarily driven by charge-offs, are recorded as incurred and recognized in restructuring and other charges in our consolidated statement of income. Loans and Interest Receivable, Net Consumer Receivables We offer credit products to consumers who choose PayPal Credit as their funding source at checkout. As of March 31, 2018 and December 31, 2017 , the outstanding balance in our pool of consumer receivables that excludes amounts classified as held for sale and primarily consists of loans and interest receivable due from international consumer accounts was $403 million and $326 million , respectively. We closely monitor credit quality for our international consumer receivables to manage and evaluate our related exposure to credit risk. Credit risk management begins with initial underwriting and continues through to full repayment of a loan. To assess a consumer who requests a loan, we use, among other indicators, internally developed risk models using detailed information from external sources such as credit bureaus where available and internal historical experience including the consumer’s prior repayment history with PayPal Credit products as well as other measures. We use delinquency status and trends to assist in making new and ongoing credit decisions, to adjust our models, to plan our collection practices and strategies and in our determination of our allowance for international consumer loans and interest receivable. The following tables present the delinquency status of the principal amount of international consumer loans and interest receivable. The amounts shown below are based on the number of days past the billing date to the consumer. Current represents balances that are within 30 days of the billing date. Amounts as of March 31, 2018 and December 31, 2017 represent loans and interest receivable due from consumer accounts excluding amounts classified as held for sale, of which approximately 95.3% and 96.0% , respectively, were current. March 31, 2018 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 384 $ 10 $ 3 $ 6 $ 19 $ 403 December 31, 2017 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 313 $ 7 $ 2 $ 4 $ 13 $ 326 We charge off consumer loan receivable balances in the month in which a customer balance becomes 180 days past the payment due date. Bankrupt accounts are charged off within 60 days after receipt of notification of bankruptcy. Loans receivable past the payment due date continue to accrue interest until they are charged off. We record an allowance for loss against the interest and fees receivable. The following table summarizes the activity in the allowance for consumer loans and interest receivable for the three months ended March 31, 2018 and 2017 : March 31, 2018 March 31, 2017 (1) Consumer Loans Receivable Interest Receivable Total Allowance (2) Consumer Loans Receivable Interest Receivable Total Allowance (In millions) Beginning balance $ 57 $ 6 $ 63 $ 265 $ 40 $ 305 Provisions 23 3 26 120 29 149 Charge-offs (39 ) (3 ) (42 ) (104 ) (32 ) (136 ) Recoveries — — — 10 — 10 Ending balance $ 41 $ 6 $ 47 $ 291 $ 37 $ 328 (1) Includes allowance related to loans and interest receivable, held for sale portfolio prior to its designation as held for sale. (2) Beginning and ending balances include approximately $50 million and $31 million , respectively, of U.S. consumer receivables not designated as held for sale that are fully reserved and are expected to be charged off. The tables above exclude receivables from other consumer credit products of $57 million and $55 million at March 31, 2018 and December 31, 2017 , respectively, and allowances of $9 million and $7 million at March 31, 2018 and December 31, 2017 , respectively. The provision for loan losses relating to our international consumer loans receivable portfolio is recognized in transaction and loan losses. The provision for interest receivable due to interest and fees earned on our international consumer loans receivable portfolio is recognized in net revenues from other value added services as a reduction in revenue. Merchant Receivables We offer business financing solutions to certain existing small and medium-sized merchants through our PayPal Working Capital ("PPWC") product and, subsequent to our acquisition of Swift Capital ("Swift") in September 2017, through Swift business loan products. As of March 31, 2018 and December 31, 2017 , the total outstanding balance in our pool of merchant loans, advances, interest and fees receivable was $1.2 billion and $1.0 billion , respectively, net of the participation interest sold to an independent chartered financial institution of $28 million and $28 million , respectively. Through our PPWC product, merchants can borrow a certain percentage of their annual payment volume processed by PayPal and are charged a fixed fee for the loan or advance, which targets an annual percentage rate based on the overall credit assessment of the merchant. Loans and advances are repaid through a fixed percentage of the merchant's future payment volume that PayPal processes. Through our Swift business loan products, we provide merchants with access to short-term business financing based on an evaluation of both the applying business as well as the business owner. Swift business loans are collected by periodic payments until the balance has been satisfied. The interest or fee is fixed at the time the loan or advance is extended and recognized as deferred revenues included in other current liabilities in our condensed consolidated balance sheet. The fixed interest or fee is amortized to net revenues from other value added services based on the amount repaid over the repayment period. We estimate the repayment period based on the merchant's payment processing history with PayPal, where available. For PPWC product, there is a general requirement that at least 10% of the original amount of the loan or advance plus the fixed fee must be repaid every 90 days. We calculate the repayment rate of the merchant's future payment volume so that repayment of the loan or advance and fixed fee is expected to generally occur within 9 to 12 months from the date of the loan or advance. On a monthly basis, we recalculate the repayment period based on the repayment activity on the receivable. As such, actual repayment periods are dependent on actual merchant payment processing volumes. For Swift business loans, we receive fixed periodic payments over the contractual term of the loan which generally ranges from 3 to 12 months. We actively monitor receivables with repayment periods greater than the original expected or contractual repayment period. We closely monitor credit quality for our merchant loans and advances that we extend or purchase so that we can evaluate, quantify, and manage our credit risk exposure. To assess a merchant seeking a business financing loan or advance, we use, among other indicators, risk models developed internally which utilize information obtained from multiple data sources, both external and internal data to predict the likelihood of timely and satisfactory repayment by the merchant of the loan or advance amount and the related interest or fixed fee. Primary drivers of the models include the merchant's annual payment volume, payment processing history with PayPal and prior repayment history with the PayPal products where available, elements sourced from consumer credit bureau and business credit bureau reports, and other information obtained during the application process. We use delinquency status and trends to assist in making ongoing credit decisions, to adjust our internal models, to plan our collection practices and strategies and in our determination of our allowance for these loans and advances. Merchant Receivables Delinquency and Allowance The following tables present our estimate of the principal amount of merchant loans, advances, interest and fees receivable past their original expected or contractual repayment period. March 31, 2018 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 1,105 $ 44 $ 28 $ 40 $ 10 $ 122 $ 1,227 December 31, 2017 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 884 $ 44 $ 28 $ 43 $ 13 $ 128 $ 1,012 The following table summarizes the activity in the allowance for merchant loans and advances, interest and fees receivable, for the three months ended March 31, 2018 and 2017 : March 31, 2018 March 31, 2017 Merchant Loans and Advances Interest and Fees Receivable Total Allowance Merchant Loans and Advances Interest and Fees Receivable Total Allowance (In millions) Beginning balance $ 52 $ 7 $ 59 $ 28 $ 3 $ 31 Provisions 39 6 45 9 2 11 Charge-offs (21 ) (2 ) (23 ) (10 ) (2 ) (12 ) Recoveries 2 — 2 2 — 2 Ending balance $ 72 $ 11 $ 83 $ 29 $ 3 $ 32 For merchant loans and advances, the determination of delinquency, from current to 180 days past due, is based on the current expected or contractual repayment period of the loan or advance and fixed interest or fee payment as compared to the original expected or contractual repayment period. For Swift business loans, we charge off the receivable when the repayments are 180 days past due. For PPWC product, we charge off the receivable when the repayments are 180 days past our expectation of repayments and the merchant has not made a payment in the last 60 days or when the repayments are 360 days past due regardless of whether or not the merchant has made a payment within the last 60 days. Bankrupt accounts are charged off within 60 days of receiving notification of bankruptcy. The provision for loan losses is recognized in transaction and loan losses, and the provisions for interest and fees receivable is recognized in deferred revenues included in other current liabilities in our condensed consolidated balance sheet. Charge-offs that are recovered are recorded as a reduction to our allowance for loans and interest receivable." id="sjs-B4">Loans and Interest Receivable We offer credit products to consumers and certain small and medium-sized merchants. We work with independent chartered financial institutions that extend credit to the consumer or merchant using our credit products in the U.S. For our consumer credit products outside the U.S., we extend credit through our Luxembourg banking subsidiary. For our merchant credit products outside the U.S., we extend working capital advances in the U.K. through our Luxembourg banking subsidiary, and we extend working capital loans in Australia through an Australian subsidiary. We purchase the related receivables extended by an independent chartered financial institution and are responsible for servicing functions related to all our credit products. During the three months ended March 31, 2018 and 2017 , we purchased approximately $3.0 billion and $2.1 billion , respectively, in credit receivables. Loans and Interest Receivable, Held for Sale In November 2017, we reached an agreement to sell our U.S. consumer credit receivables portfolio to Synchrony Bank. Historically, this portfolio was reported as outstanding principal balances, net of any participation interest sold and pro-rata allowances, including unamortized deferred origination costs and estimated collectible interest and fees. Upon approval of our Board of Directors to sell these receivables, the portfolio was reclassified as held for sale and recorded at the lower of cost or fair value, determined on an aggregate basis. As of March 31, 2018 and December 31, 2017 , the total outstanding balance in our held for sale portfolio was $6.5 billion and $6.4 billion , respectively, net of the participation interest sold to an independent chartered financial institution and other investors of $1.1 billion and $1.1 billion , respectively. We use consumer FICO scores, where available, among other measures, in evaluating the credit quality of our U.S. PayPal Credit consumer receivables, held for sale. A FICO score is a type of credit score that lenders use to assess an applicant's credit risk and whether to extend credit. Individual FICO scores are generally obtained each quarter in which the U.S. consumer has an outstanding consumer receivable that we own. The weighted average U.S. consumer FICO scores related to our loans and interest receivable, held for sale balance outstanding at March 31, 2018 and December 31, 2017 was 679 and 680 , respectively. As of March 31, 2018 and December 31, 2017 , approximately 50.4% and 51.1% , respectively, of the pool of loans and interest receivable, held for sale was due from U.S. consumers with FICO scores greater than or equal to 680 , which is generally considered "prime" by the consumer credit industry. As of March 31, 2018 and December 31, 2017 , approximately 12.3% and 11.7% , respectively, of the pool of loans and interest receivable, held for sale was due from U.S. customers with FICO scores below 599 . The following table presents the principal amount of U.S. consumer loans and interest receivable segmented by a FICO score range: March 31, 2018 December 31, 2017 (In millions) > 760 $ 812 $ 832 680 - 759 2,474 2,439 600 - 679 2,432 2,378 < 599 804 752 Total $ 6,522 $ 6,401 FICO score segmentation included in the table above provides the credit quality of these receivables for comparative purposes only. The following table presents the delinquency status of U.S. consumer loans and interest receivable, held for sale. The amounts shown below are based on the number of days past the billing date to the consumer. Current represents balances that are within 30 days of the billing date. As of March 31, 2018 and December 31, 2017 , approximately 91.9% and 90.6% , respectively, of the portfolio of U.S. consumer loans and interest receivable, held for sale was current. March 31, 2018 (1) (In millions) Current 30 - 59 Days 60 - 89 Days 90 - 180 Days Total Past 30 days Total $ 5,994 $ 208 $ 88 $ 232 $ 528 $ 6,522 (1) Includes approximately $31 million of U.S. consumer loans and interest receivables not designated as held for sale that are fully reserved and are expected to be charged off, and excludes approximately $46 million related to accrued unbilled interest. December 31, 2017 (1) (In millions) Current 30 - 59 Days 60 - 89 Days 90 - 180 Days Total Past 30 days Total $ 5,800 $ 240 $ 103 $ 258 $ 601 $ 6,401 (1) Includes approximately $50 million of U.S. consumer loans and interest receivables not designated as held for sale that are fully reserved and are expected to be charged off, and excludes approximately $47 million related to accrued unbilled interest. No allowances are recorded for potential losses against the loans and interest receivable, held for sale portfolio. Adjustments to the cost basis of the held for sale portfolio, which are primarily driven by charge-offs, are recorded as incurred and recognized in restructuring and other charges in our consolidated statement of income. Loans and Interest Receivable, Net Consumer Receivables We offer credit products to consumers who choose PayPal Credit as their funding source at checkout. As of March 31, 2018 and December 31, 2017 , the outstanding balance in our pool of consumer receivables that excludes amounts classified as held for sale and primarily consists of loans and interest receivable due from international consumer accounts was $403 million and $326 million , respectively. We closely monitor credit quality for our international consumer receivables to manage and evaluate our related exposure to credit risk. Credit risk management begins with initial underwriting and continues through to full repayment of a loan. To assess a consumer who requests a loan, we use, among other indicators, internally developed risk models using detailed information from external sources such as credit bureaus where available and internal historical experience including the consumer’s prior repayment history with PayPal Credit products as well as other measures. We use delinquency status and trends to assist in making new and ongoing credit decisions, to adjust our models, to plan our collection practices and strategies and in our determination of our allowance for international consumer loans and interest receivable. The following tables present the delinquency status of the principal amount of international consumer loans and interest receivable. The amounts shown below are based on the number of days past the billing date to the consumer. Current represents balances that are within 30 days of the billing date. Amounts as of March 31, 2018 and December 31, 2017 represent loans and interest receivable due from consumer accounts excluding amounts classified as held for sale, of which approximately 95.3% and 96.0% , respectively, were current. March 31, 2018 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 384 $ 10 $ 3 $ 6 $ 19 $ 403 December 31, 2017 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 313 $ 7 $ 2 $ 4 $ 13 $ 326 We charge off consumer loan receivable balances in the month in which a customer balance becomes 180 days past the payment due date. Bankrupt accounts are charged off within 60 days after receipt of notification of bankruptcy. Loans receivable past the payment due date continue to accrue interest until they are charged off. We record an allowance for loss against the interest and fees receivable. The following table summarizes the activity in the allowance for consumer loans and interest receivable for the three months ended March 31, 2018 and 2017 : March 31, 2018 March 31, 2017 (1) Consumer Loans Receivable Interest Receivable Total Allowance (2) Consumer Loans Receivable Interest Receivable Total Allowance (In millions) Beginning balance $ 57 $ 6 $ 63 $ 265 $ 40 $ 305 Provisions 23 3 26 120 29 149 Charge-offs (39 ) (3 ) (42 ) (104 ) (32 ) (136 ) Recoveries — — — 10 — 10 Ending balance $ 41 $ 6 $ 47 $ 291 $ 37 $ 328 (1) Includes allowance related to loans and interest receivable, held for sale portfolio prior to its designation as held for sale. (2) Beginning and ending balances include approximately $50 million and $31 million , respectively, of U.S. consumer receivables not designated as held for sale that are fully reserved and are expected to be charged off. The tables above exclude receivables from other consumer credit products of $57 million and $55 million at March 31, 2018 and December 31, 2017 , respectively, and allowances of $9 million and $7 million at March 31, 2018 and December 31, 2017 , respectively. The provision for loan losses relating to our international consumer loans receivable portfolio is recognized in transaction and loan losses. The provision for interest receivable due to interest and fees earned on our international consumer loans receivable portfolio is recognized in net revenues from other value added services as a reduction in revenue. Merchant Receivables We offer business financing solutions to certain existing small and medium-sized merchants through our PayPal Working Capital ("PPWC") product and, subsequent to our acquisition of Swift Capital ("Swift") in September 2017, through Swift business loan products. As of March 31, 2018 and December 31, 2017 , the total outstanding balance in our pool of merchant loans, advances, interest and fees receivable was $1.2 billion and $1.0 billion , respectively, net of the participation interest sold to an independent chartered financial institution of $28 million and $28 million , respectively. Through our PPWC product, merchants can borrow a certain percentage of their annual payment volume processed by PayPal and are charged a fixed fee for the loan or advance, which targets an annual percentage rate based on the overall credit assessment of the merchant. Loans and advances are repaid through a fixed percentage of the merchant's future payment volume that PayPal processes. Through our Swift business loan products, we provide merchants with access to short-term business financing based on an evaluation of both the applying business as well as the business owner. Swift business loans are collected by periodic payments until the balance has been satisfied. The interest or fee is fixed at the time the loan or advance is extended and recognized as deferred revenues included in other current liabilities in our condensed consolidated balance sheet. The fixed interest or fee is amortized to net revenues from other value added services based on the amount repaid over the repayment period. We estimate the repayment period based on the merchant's payment processing history with PayPal, where available. For PPWC product, there is a general requirement that at least 10% of the original amount of the loan or advance plus the fixed fee must be repaid every 90 days. We calculate the repayment rate of the merchant's future payment volume so that repayment of the loan or advance and fixed fee is expected to generally occur within 9 to 12 months from the date of the loan or advance. On a monthly basis, we recalculate the repayment period based on the repayment activity on the receivable. As such, actual repayment periods are dependent on actual merchant payment processing volumes. For Swift business loans, we receive fixed periodic payments over the contractual term of the loan which generally ranges from 3 to 12 months. We actively monitor receivables with repayment periods greater than the original expected or contractual repayment period. We closely monitor credit quality for our merchant loans and advances that we extend or purchase so that we can evaluate, quantify, and manage our credit risk exposure. To assess a merchant seeking a business financing loan or advance, we use, among other indicators, risk models developed internally which utilize information obtained from multiple data sources, both external and internal data to predict the likelihood of timely and satisfactory repayment by the merchant of the loan or advance amount and the related interest or fixed fee. Primary drivers of the models include the merchant's annual payment volume, payment processing history with PayPal and prior repayment history with the PayPal products where available, elements sourced from consumer credit bureau and business credit bureau reports, and other information obtained during the application process. We use delinquency status and trends to assist in making ongoing credit decisions, to adjust our internal models, to plan our collection practices and strategies and in our determination of our allowance for these loans and advances. Merchant Receivables Delinquency and Allowance The following tables present our estimate of the principal amount of merchant loans, advances, interest and fees receivable past their original expected or contractual repayment period. March 31, 2018 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 1,105 $ 44 $ 28 $ 40 $ 10 $ 122 $ 1,227 December 31, 2017 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 884 $ 44 $ 28 $ 43 $ 13 $ 128 $ 1,012 The following table summarizes the activity in the allowance for merchant loans and advances, interest and fees receivable, for the three months ended March 31, 2018 and 2017 : March 31, 2018 March 31, 2017 Merchant Loans and Advances Interest and Fees Receivable Total Allowance Merchant Loans and Advances Interest and Fees Receivable Total Allowance (In millions) Beginning balance $ 52 $ 7 $ 59 $ 28 $ 3 $ 31 Provisions 39 6 45 9 2 11 Charge-offs (21 ) (2 ) (23 ) (10 ) (2 ) (12 ) Recoveries 2 — 2 2 — 2 Ending balance $ 72 $ 11 $ 83 $ 29 $ 3 $ 32 For merchant loans and advances, the determination of delinquency, from current to 180 days past due, is based on the current expected or contractual repayment period of the loan or advance and fixed interest or fee payment as compared to the original expected or contractual repayment period. For Swift business loans, we charge off the receivable when the repayments are 180 days past due. For PPWC product, we charge off the receivable when the repayments are 180 days past our expectation of repayments and the merchant has not made a payment in the last 60 days or when the repayments are 360 days past due regardless of whether or not the merchant has made a payment within the last 60 days. Bankrupt accounts are charged off within 60 days of receiving notification of bankruptcy. The provision for loan losses is recognized in transaction and loan losses, and the provisions for interest and fees receivable is recognized in deferred revenues included in other current liabilities in our condensed consolidated balance sheet. Charge-offs that are recovered are recorded as a reduction to our allowance for loans and interest receivable. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable In the fourth quarter of 2017, we entered into a credit agreement ("2017 Credit Agreement") that provides for an unsecured $3.0 billion , 364 -day delayed-draw term loan credit facility, which is available in up to three borrowings. Borrowings and other amounts payable under the 2017 Credit Agreement are guaranteed by PayPal, Inc. Subject to specified conditions, we may designate one or more of our subsidiaries as additional borrowers under the 2017 Credit Agreement provided that we and PayPal, Inc. guarantee all borrowings and other obligations of any such subsidiaries under the 2017 Credit Agreement. As of March 31, 2018 , no subsidiaries were designated as additional borrowers. Funds borrowed under the 2017 Credit Agreement may be used for capital allocation and other general corporate purposes. During the three months ended March 31, 2018 , we effected two drawdowns aggregating to $2.0 billion under the 2017 Credit Agreement. As of March 31, 2018 , $3.0 billion was outstanding under the 2017 Credit Agreement at a weighted average interest rate of 2.88% . Accordingly, at March 31, 2018 , no borrowing capacity was available under the 2017 Credit Agreement. The total interest expense and fees we recorded related to this credit facility was approximately $15 million for the three months ended March 31, 2018. On April 5, 2018, we repaid $1.0 billion of the borrowings outstanding under the 2017 Credit Agreement. No remaining borrowing capacity is available under this agreement. We maintain uncommitted credit facilities in various regions throughout the world, aggregating to approximately $350 million of borrowing capacity. Interest rate terms for these facilities vary by region and reflect prevailing market rates for companies with strong credit ratings. As of March 31, 2018 , no amounts were outstanding under those facilities, and therefore, approximately $350 million of borrowing capacity was available, subject to customary conditions to borrowing. In the third quarter of 2015, we entered into a credit agreement ("2015 Credit Agreement") that provides for an unsecured $2.0 billion , five -year revolving credit facility that includes a $150 million letter of credit sub-facility and a $150 million swingline sub-facility, with available borrowings under the revolving credit facility reduced by the amount of any letters of credit and swingline borrowings outstanding. Borrowings and other amounts payable under the 2015 Credit Agreement are guaranteed by PayPal, Inc. We may also, subject to the agreement of the applicable lenders, increase the commitments under the revolving credit facility by up to $500 million . Loans under the 2015 Credit Agreement will bear interest at either (i) London Interbank Offered Rate ("LIBOR") plus a margin (based on our public debt ratings) ranging from 1.00 percent to 1.625 percent or (ii) a formula based on the agent bank’s prime rate, the federal funds effective rate or LIBOR plus a margin (based on our public debt ratings) ranging from zero percent to 0.625 percent. Subject to specified conditions, we may designate one or more of our subsidiaries as additional borrowers under the 2015 Credit Agreement provided that we and PayPal, Inc. guarantee all borrowings and other obligations of any such subsidiaries under the 2015 Credit Agreement. As of March 31, 2018 , no subsidiaries were designated as additional borrowers. Funds borrowed under the 2015 Credit Agreement may be used for working capital, capital expenditures, acquisitions and other general corporate purposes. As of March 31, 2018 , no borrowings or letters of credit were outstanding under the 2015 Credit Agreement. Accordingly, at March 31, 2018 , $2.0 billion of borrowing capacity was available for the purposes permitted by the 2015 Credit Agreement, subject to customary conditions to borrowing. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments As of March 31, 2018 and December 31, 2017 , approximately $27.3 billion and $26.4 billion , respectively, of unused credit was available to PayPal Credit account holders. While this amount represents the total unused credit available, we have not experienced, and do not anticipate, that all of our PayPal Credit account holders will access their entire available credit at any given point in time. In addition, the individual lines of credit that make up this unused credit are subject to periodic review and termination by the chartered financial institution that is the issuer of PayPal Credit products based on, among other things, account usage and customer creditworthiness. When a consumer funds a purchase in the U.S. using a PayPal Credit product issued by a chartered financial institution, the chartered financial institution extends credit to the consumer, funds the extension of credit at the point of sale and advances funds to the merchant. We subsequently purchase the receivables related to the consumer loans extended by the chartered financial institution and, as a result of such purchase, bear the risk of loss in the event of loan defaults. Although the chartered financial institution continues to own each customer account, we own the related receivable (excluding participation interests sold) and are responsible for all servicing functions related to the account. Litigation and Regulatory Matters Overview We are involved in legal and regulatory proceedings on an ongoing basis. Many of these proceedings are in early stages, and may seek an indeterminate amount of damages. If we believe that a loss arising from such matters is probable and can be reasonably estimated, we accrue the estimated liability in our financial statements. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For those proceedings in which an unfavorable outcome is reasonably possible but not probable, we have disclosed an estimate of the reasonably possible loss or range of losses or we have concluded that an estimate of the reasonably possible loss or range of losses arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) are not material. If we cannot estimate the probable or reasonably possible loss or range of losses arising from a legal proceeding, we have disclosed that fact. In assessing the materiality of a legal proceeding, we evaluate, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require us to change our business practices in a manner that could have a material adverse impact on our business. With respect to the matters disclosed in this Note 13, we are unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies. Amounts accrued for legal and regulatory proceedings for which we believe a loss is probable were not material for the three months ended March 31, 2018 . Except as otherwise noted for the proceedings described in this Note 13, we have concluded, based on currently available information, that reasonably possible losses arising directly from the proceedings (i.e., monetary damages or amounts paid in judgment or settlement) in excess of our recorded accruals are also not material. However, legal and regulatory proceedings are inherently unpredictable and subject to significant uncertainties. If one or more matters were resolved against us in a reporting period for amounts in excess of management’s expectations, the impact on our operating results or financial condition for that reporting period could be material. Regulatory Proceedings We are required to comply with U.S. economic and trade sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”). We have self-reported to OFAC certain transactions that were inadvertently processed but subsequently identified as possible violations of U.S. economic and trade sanctions. In March 2015, we reached a settlement with OFAC regarding possible violations arising from our sanctions compliance practices between 2009 and 2013, prior to the implementation of our real-time transaction scanning program. Subsequently, we have self-reported additional transactions as possible violations, and we have received new subpoenas from OFAC seeking additional information about certain of these transactions. Such self-reported transactions could result in claims or actions against us, including litigation, injunctions, damage awards, fines or penalties, or require us to change our business practices in a manner that could result in a material loss, require significant management time, result in the diversion of significant operational resources or otherwise harm our business. On March 28, 2016, we received a Civil Investigative Demand (“CID”) from the Federal Trade Commission (“FTC”) as part of its investigation to determine whether we, through our Venmo service, have been or are engaged in deceptive or unfair practices in violation of the Federal Trade Commission Act. The CID requested the production of documents and answers to written questions related to our Venmo service. We have cooperated with the FTC in connection with the CID. On February 27, 2018, we entered into a Consent Order with the FTC in which we settled potential allegations arising from our Venmo services between 2013 and 2017. The Consent Order does not contain a monetary penalty, but requires PayPal to make various changes to Venmo’s disclosures and business practices. The Consent Order was subject to public comment through March 29, 2018 and is subject to final approval by the FTC. As required by the Consent Order, we will cooperate with the FTC’s requirements and work to ensure compliance with the Consent Order. Any failure to comply with the Consent Order may increase the possibility of additional adverse consequences, including litigation, additional regulatory actions, injunctions, or monetary penalties, or require further changes to our business practices, significant management time, or the diversion of significant operational resources, all of which could result in a material loss or otherwise harm our business. Legal Proceedings On January 12, 2017, a putative shareholder derivative action captioned Silverman v. Schulman, et al. , Case No. 5:17-cv-00162 (the “California Derivative Case”) was filed in the U.S. District Court for the Northern District of California (the "Court"). On March 24, 2017, a second derivative action substantially similar to the California Derivative Case captioned Seeman v. Schulman, et al. , Case No. 1:17-cv-00318-UNA, was filed in the U.S. District Court for the District of Delaware (the “Delaware Derivative Case”). On April 19, 2017, the Delaware court in the Delaware Derivative Case issued an order adopting a stipulation filed by the parties transferring the Delaware Derivative Case to the Court so that the Delaware Derivative Case could be consolidated with the pending California Derivative Case. On April 27 and 28, 2017, two additional shareholder derivative lawsuits substantially similar to the California Derivative Case and Delaware Derivative Case were filed in the Court. These cases are captioned Sims v. Schulman, et al. , Case No. 1:17-cv-02428, and Liss v. Schulman, et al. , Case No. 1:17-cv-02446-NC (together with the California Derivative Case and the Delaware Derivative Case, the “Derivative Cases”). The Derivative Cases are purportedly brought on behalf of the Company and assert claims relating to our disclosure in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016, that on March 28, 2016, we received a CID from the FTC as part of its investigation to determine whether we, through our Venmo service, have been or are engaged in deceptive or unfair practices in violation of the Federal Trade Commission Act. The Derivative Cases allege that the Company’s Chief Executive Officer, Chief Financial Officer, former interim Chief Financial Officer, and certain members of its Board of Directors breached their fiduciary duties to the Company, violated Section 14(a) of the Exchange Act, and were unjustly enriched by, among other things, causing or permitting the Company to issue materially false and misleading statements or omissions regarding the Company’s compliance with applicable laws and regulations with respect to its Venmo service, and/or by permitting or causing the Company to engage in unfair trade practices through its Venmo service. The Derivative Cases seek, among other things, to recover unspecified compensatory damages on behalf of the Company arising out of the individual defendants’ alleged wrongful conduct. Although plaintiffs in the Derivative Cases do not seek relief against the Company, we have certain indemnification obligations to the individual defendants. On June 30, 2017, the Court issued an order approving a stipulation filed by the parties in the Derivative Cases that consolidates these cases and appoints co-lead plaintiffs’ counsel for the consolidated case, captioned In re PayPal Holdings, Inc. Shareholder Derivative Litigation , Lead Case No. 5:17-cv-00162-RS (the “Consolidated Derivative Case”). The Court’s order states that it applies to each purported derivative action that is subsequently filed in, removed to, or transferred to the Court, arising out of the same or substantially the same transactions or events as the Derivative Cases. On July 31, 2017, plaintiffs’ counsel designated the complaint filed in the Liss action as the operative complaint for the Consolidated Derivative Case. On October 5, 2017, another putative shareholder derivative suit was filed in the Court captioned Iron Workers Local No. 25 Pension Fund v. John J. Donahoe, et al. , Case No. 5:17-cv-05741-NC, that makes similar allegations and advances similar claims against the same defendants as those at issue in the Consolidated Derivative Case. Pursuant to the Court’s consolidation order, this shareholder derivative suit is part of the Consolidated Derivative Case. On September 28, 2017, we filed a motion to dismiss the operative complaint on grounds that plaintiffs lack standing to pursue claims on behalf of the Company because they did not make a pre-suit demand on the Company’s Board of Directors prior to filing the Derivative Cases and failed to establish that making such a demand would have been futile. On January 18, 2018, the Court granted our motion to dismiss with leave to amend and gave plaintiffs 30 days from that date to file an amended complaint. On February 16, 2018, plaintiffs in the Consolidated Derivative Case filed an amended complaint. Plaintiffs’ counsel also sent a letter dated February 15, 2018 to counsel for the defendants that purports to be a litigation demand on the Company's Board of Directors. In April 2018, defendants in the Consolidated Derivative Case entered into a tolling agreement that tolls the running of any statute of limitations applicable to the claims at issue in the lawsuit and the litigation demand plaintiffs sent to the Company's Board of Directors until 30 days from the time the Board issues a final response to the demand or three years elapse from the date of the tolling agreement, whichever comes first. Pursuant to the agreement, plaintiffs in the Consolidated Derivative Case have agreed to voluntarily dismiss the lawsuit without prejudice for now. We have received subpoenas from the U.S. Department of Justice (“DOJ”) seeking the production of certain information related to our historical anti-money laundering program. We are cooperating with the DOJ in providing information in response to the subpoenas. We are unable to predict the outcome of the government's investigation. In November 2017, we announced that we had suspended the operations of TIO Networks (“TIO”) as part of an ongoing investigation of security vulnerabilities of the TIO platform. On December 1, 2017 we announced that we had identified evidence of unauthorized access to TIO’s network, including locations that stored personal information of some of TIO’s customers and customers of TIO billers and the potential compromise of personally identifiable information for approximately 1.6 million customers. We have received a number of governmental inquiries, including from state attorneys general, and we may be subject to additional governmental inquiries and investigations in the future. In addition, on December 6, 2017, a putative class action lawsuit captioned Sgarlata v. PayPal Holdings, Inc., et al. , Case No. 3:17-cv-06956 was filed in the Court against the Company, its Chief Executive Officer, its Chief Financial Officer and Hamed Shahbazi, the former chief executive officer of TIO (the “Defendants”) alleging violations of federal securities laws. Specifically, the lawsuit alleges that Defendants made false or misleading statements or failed to disclose that TIO’s data security program was inadequate to safeguard the personally identifiable information of its users, those vulnerabilities threatened continued operation of TIO’s platform, the Company’s revenues derived from TIO services were thus unsustainable, and consequently, the Company overstated the benefits of the TIO acquisition, and, as a result, the Company’s public statements were materially false and misleading at all relevant times. The plaintiff who initiated the lawsuit sought to represent a class of shareholders who acquired shares of the Company’s common stock between February 14, 2017 through December 1, 2017 and sought damages and attorneys’ fees, among other relief. On March 16, 2018, the Court appointed two new plaintiffs, not the original plaintiff who filed the case, as interim co-lead plaintiffs in the case and appointed two law firms as interim co-lead counsel. Pursuant to stipulations entered into by the parties to the case, the Court issued orders on March 30 and April 6, 2018 providing for the publication by interim co-lead counsel of an amended notice under the Private Securities Litigation Reform Act given the anticipated amendment of the complaint to include an amended class definition that includes individuals who purchased options to purchase our common stock between February 14, 2017 through December 1, 2017, the filing of an amended complaint by co-lead plaintiffs within seventy-five days of the March 30, 2018 order, and a briefing schedule on the Defendants’ anticipated motions to dismiss the amended complaint. We may be subject to additional litigation relating to TIO’s data security platform or the suspension of TIO’s operations in the future. General Matters Other third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to patent disputes, and expect that we will increasingly be subject to additional patent infringement claims involving various aspects of our business as our products and services continue to expand in scope and complexity. Such claims may be brought directly or indirectly against our companies and/or against our customers (who may be entitled to contractual indemnification under their contracts with us), and we are subject to increased exposure to such claims as a result of our acquisitions, particularly in cases where we are entering into new lines of business in connection with such acquisitions. We have in the past been forced to litigate such claims, and we believe that additional lawsuits alleging such claims will be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and costly to defend and resolve, could require expensive changes in our methods of doing business or could require us to enter into costly royalty or licensing agreements on unfavorable terms or make substantial payments to settle claims or to satisfy damages awarded by courts. From time to time, we are involved in other disputes or regulatory inquiries that arise in the ordinary course of business, including suits by our customers (individually or as class actions) alleging, among other things, improper disclosure of our prices, rules or policies, that our practices, prices, rules, policies or customer/user agreements violate applicable law or that we have acted unfairly and/or not acted in conformity with such prices, rules, policies or agreements. In addition to these types of disputes and regulatory inquiries, our operations are also subject to regulatory and/or legal review and/or challenges that tend to reflect the increasing global regulatory focus to which the payments industry is subject and, when taken as a whole with other regulatory and legislative action, such actions could result in the imposition of costly new compliance burdens on our business and customers and may lead to increased costs and decreased transaction volume and revenue. Further, the number and significance of these disputes and inquiries are increasing as we have grown larger, our business has expanded in scope (both in terms of the range of products and services that we offer and our geographical operations) and our products and services have increased in complexity. Any claims or regulatory actions against us, whether meritorious or not, could be time consuming, result in costly litigation, settlement payments, damage awards (including statutory damages for certain causes of action in certain jurisdictions), fines, penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, require us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm our business. Indemnification Provisions We entered into a separation and distribution agreement, a tax matters agreement, an operating agreement and various other agreements with eBay to govern the separation and relationship of the two companies going forward. These agreements provide for specific indemnity and liability obligations and could lead to disputes between us and eBay, which may be significant. In addition, the indemnity rights we have against eBay under the agreements may not be sufficient to protect us, and our indemnity obligations to eBay may be significant. In the ordinary course of business, we include limited indemnification provisions in certain of our agreements with parties with whom we have commercial relationships, including our standard marketing, promotions, and application-programming-interface license (API) agreements. Under these contracts, we generally indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by any third party with respect to our domain names, trademarks, logos, and other branding elements to the extent that such marks are related to the subject agreement. In a limited number of agreements, we have provided an indemnity for other types of third-party claims, which are indemnities mainly related to intellectual property rights. We have also provided an indemnity to our payments processors in the event of certain third-party claims or card association fines against the processor arising out of conduct by us or our customers. It is not possible to determine the maximum potential loss under these indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular situation. To date, no significant costs have been incurred, either individually or collectively, in connection with our indemnification provisions. Off-Balance Sheet Arrangements As of March 31, 2018 and December 31, 2017 , we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources. Protection Programs We provide merchants and consumers with protection programs on substantially all transactions completed through our Payments Platform, except for transactions using our gateway products. These programs protect both merchants and consumers from loss primarily due to fraud and counterparty performance. Our Buyer Protection Program provides protection to consumers for qualifying purchases by reimbursing the consumer for the full amount of the purchase if a purchased item does not arrive or does not match the seller’s description. Our Seller Protection Programs provide protection to merchants against claims that a transaction was not authorized by the buyer or claims that an item was not received by covering the seller for the full amount of the payment on eligible sales. The maximum potential exposure under our protection programs is estimated to be the portion of total eligible transaction volume (TPV) for which buyer or seller protection claims may be raised under our existing user agreements. Since eligible transactions are typically completed in a period significantly shorter than the period under which disputes may be opened, and based on our historical losses to date, we do not believe that the maximum potential exposure is representative of our actual potential exposure. The actual amount of potential exposure cannot be quantified as we are unable to determine total eligible transactions where performance by a merchant or customer is incomplete or completed transactions that may result in a claim under our protection programs. We record a liability with respect to losses under these protection programs when they are probable and the amount can be reasonably estimated. The following table provides management's estimate of the maximum potential exposure related to our protection programs as of March 31, 2018 and December 31, 2017 : March 31, 2018 December 31, 2017 (In millions) Maximum potential exposure $ 173,764 $ 165,207 The following table provides the amount of allowance for transaction losses and negative customer balances related to our protection programs as of March 31, 2018 and December 31, 2017 : March 31, 2018 December 31, 2017 (In millions) Allowance for transaction losses and negative customer balances $ 283 $ 266 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of March 31, 2018 and December 31, 2017 , there were no material amounts payable to or amounts receivable from related parties. For all periods presented, there were no material related party transactions. |
Stock Repurchase Programs
Stock Repurchase Programs | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stock Repurchase Programs | Stock Repurchase Programs In April 2017, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $5 billion of our common stock, with no expiration from the date of authorization. The stock repurchase program is intended to offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, may also be used to make opportunistic repurchases of our common stock to reduce outstanding share count. Any share repurchases under our stock repurchase program may be made through open market transactions, block trades, privately negotiated transactions including accelerated share repurchase agreements or other means at times and in such amounts as management deems appropriate and will be funded from our working capital or other financing alternatives. However, any stock repurchases are subject to market conditions and other uncertainties and we cannot predict if or when any stock repurchases will be made. Moreover, we may terminate our stock repurchase program at any time without notice. In February 2018, we entered into an accelerated share repurchase ("ASR") agreement with an unrelated third party financial institution to repurchase shares of our common stock. Under the terms of the ASR agreement, we made an upfront payment of approximately $1.0 billion to the third party financial institution and received approximately 12.8 million shares of our common stock during the term of the transaction, which ended in March 2018. The total number of shares of our common stock repurchased was based on the volume-weighted average share price of our common stock during the term of the transaction, less a discount and subject to adjustments pursuant to the terms of the applicable ASR agreement. We recorded the initial payment of $1.0 billion as a reduction to stockholders' equity on our condensed consolidated balance sheet. All common stock received was recorded as treasury stock and the forward contract indexed to our own common stock met all applicable criteria for equity classification. The stock repurchase activity under the April 2017 stock repurchase program during the three months ended March 31, 2018 is summarized as follows: Shares Repurchased Average Price (1) (2) Cash Paid for Shares Repurchased Remaining Amount Authorized (In millions, except per share amounts) Balance as of January 1, 2018 $ 4,999 Repurchases of shares of common stock in the open market 10.8 $ 76.82 825 4,174 Repurchases of shares of common stock under the ASR agreement 12.8 $ 78.03 1,000 3,174 Balance as of March 31, 2018 23.6 $ 1,825 $ 3,174 (1) Average price paid per share for open market purchases includes broker commissions. (2) Average price paid per share under the ASR agreement represents the volume-weighted average share price, less a discount and adjustments pursuant to the terms of the agreement. Treasury stock recorded for repurchases under the ASR agreement amounts to $985 million . These repurchased shares of common stock were recorded as treasury stock for purposes of calculating earnings per share, and were accounted for under the cost method. No repurchased shares of common stock have been retired. |
Stock-Based Plans
Stock-Based Plans | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Plans | Stock-Based Plans Stock Options As of March 31, 2018 , 1.9 million options to purchase shares of common stock were outstanding. No new options were granted in the three months ended March 31, 2018 . Restricted Stock Units (RSUs) and Performance-Based Restricted Stock Units (PBRSUs) The following table summarizes the RSU and PBRSU activity under our equity incentive plans for the three months ended March 31, 2018 : Units (In thousands) Outstanding at January 1, 2018 33,875 Awarded (1) 12,103 Vested (1) (9,663 ) Forfeited (484 ) Outstanding at March 31, 2018 35,831 Expected to vest 30,871 (1) Includes approximately 2.1 million additional PBRSUs issued due to company performance in connection with the Company's 2017 annual incentive plan. The weighted average grant-date fair value of RSUs and PBRSUs granted during the three months ended March 31, 2018 was $78.58 per share. In the three months ended March 31, 2018 , the Company granted RSUs that vest in equal annual installments over a three -year period, 1.5 million PBRSUs with a one -year performance period (fiscal 2018) and cliff vesting following the completion of the performance period in February 2019 ( one year from the annual incentive award cycle grant date) and 0.7 million PBRSUs with a three -year performance period. Over the respective performance period, the number of PBRSUs that may be issued and the related stock-based compensation expense that is recognized is adjusted upward or downward based upon the probability of achieving the approved performance targets against the performance metrics. Depending on the probability of achieving the pre-established performance targets, the PBRSUs issued could range from 0% to 200% of the target amount. Stock-based Compensation Expense We record stock-based compensation expense for our equity incentive plans in accordance with the provisions of the authoritative accounting guidance, which requires the measurement and recognition of compensation expense based on estimated fair values. The impact on our results of operations of recording stock-based compensation expense under our equity incentive plans for the three months ended March 31, 2018 and 2017 was as follows: Three Months Ended March 31, 2018 2017 (In millions) Customer support and operations $ 38 $ 30 Sales and marketing 44 28 Product development 64 45 General and administrative 59 42 Depreciation and amortization 4 2 Total stock-based compensation expense $ 209 $ 147 Capitalized as part of internal use software and website development costs $ 7 $ 3 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate for the three months ended March 31, 2018 and 2017 was 7% and 12% , respectively. The difference between our effective tax rate for the three months ended March 31, 2018 and the U.S. federal statutory rate of 21% was primarily the result of foreign income taxed at different rates and discrete tax benefits related to stock-based compensation. The difference between our effective tax rate for the three months ended March 31, 2017 and the U.S. federal statutory rate of 35% was primarily the result of foreign income taxed at different rates. During the three months ended March 31, 2018, we recognized tax expense adjustments of $3 million to the provisional amounts recorded at December 31, 2017 for the enactment-date effects of the Tax Act. All amounts recorded related to the enactment-date effects of the Tax Act as of March 31, 2018 are considered provisional estimates because we have not completed our accounting for certain elements of the Tax Act, including whether taxes due on future U.S. inclusions related to Global Intangible Low Taxed Income ("GILTI") are recorded as a current-period expense when incurred or whether such amounts should be factored into our measurement of its deferred taxes. As a result, for the period ended March 31, 2018, we have treated GILTI as a period cost. We will continue to refine our calculations as additional analysis is completed. Our provisional estimates may be affected as we gain a more thorough understanding of the Tax Act and any such changes to those estimates could be material to income tax expense. |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the first quarter of 2018 and 2017, management approved strategic reductions of the existing global workforce, which resulted in restructuring charges of $25 million and $40 million , respectively. The reduction approved in the first quarter of 2018 also includes restructuring charges related to the decision to wind down TIO's operations. The reduction and timing of cash payments associated with the 2018 restructuring are expected to be substantially completed by the end of 2018. We incurred employee and severance benefits expenses under the 2017 strategic reduction, which was substantially completed by the end of the year. The following table summarizes the restructuring reserve activity during the three months ended March 31, 2018: Employee Severance and Benefits (In millions) Accrued liability as of January 1, 2018 $ 2 Charges 25 Payments (2 ) Accrued liability as of March 31, 2018 $ 25 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the three months ended March 31, 2018 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Currency Translation Estimated tax benefit Total (In millions) Beginning balance $ (111 ) $ (12 ) $ (25 ) $ 6 $ (142 ) Other comprehensive income (loss) before reclassifications (62 ) (16 ) 2 4 (72 ) Less: Amount of gains (losses) reclassified from accumulated other comprehensive income (44 ) (1 ) — — (45 ) Net current period other comprehensive income (loss) (18 ) (15 ) 2 4 (27 ) Ending balance $ (129 ) $ (27 ) $ (23 ) $ 10 $ (169 ) The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the three months ended March 31, 2017 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Estimated tax benefit Total (In millions) Beginning balance $ 131 $ (5 ) $ (68 ) $ 1 $ 59 Other comprehensive income (loss) before reclassifications (32 ) — 13 1 (18 ) Less: Amount of gains (losses) reclassified from accumulated other comprehensive income 40 (1 ) — — 39 Net current period other comprehensive income (loss) (72 ) 1 13 1 (57 ) Ending balance $ 59 $ (4 ) $ (55 ) $ 2 $ 2 The following table provides details about reclassifications out of accumulated other comprehensive income (loss) for the three months ended March 31, 2018 and 2017 : Details about Accumulated Other Comprehensive Income (Loss) Components Amount of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Statement of Income Three Months Ended March 31, 2018 2017 (In millions) Gains (losses) on cash flow hedges-foreign exchange contracts $ (44 ) $ 40 Net revenues Unrealized gains (losses) on investments (1 ) (1 ) Other income (expense), net $ (45 ) $ 39 Income before income taxes — — Income tax expense Total reclassifications for the period $ (45 ) $ 39 Net income |
Overview and Summary of Signi26
Overview and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the financial statements of PayPal and our wholly and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Investments in entities where we hold less than a 20% ownership interest are generally accounted for at cost minus impairment, if any, plus or minus changes resulting from observable price changes, and our share of the investees’ results of operations and is included in other income (expense), net on our condensed consolidated statement of income to the extent dividends are received. Our investment balance is included in long-term investments on our condensed consolidated balance sheet. |
Equity and Cost Method Investments | The condensed consolidated financial statements include the financial statements of PayPal and our wholly and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Investments in entities where we hold less than a 20% ownership interest are generally accounted for at cost minus impairment, if any, plus or minus changes resulting from observable price changes, and our share of the investees’ results of operations and is included in other income (expense), net on our condensed consolidated statement of income to the extent dividends are received. Our investment balance is included in long-term investments on our condensed consolidated balance sheet. |
Principles of Consolidation | These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the " 2017 Form 10-K") filed with the Securities and Exchange Commission. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses, during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to provisions for transaction and loan losses, loss contingencies, income taxes, revenue recognition and the valuation of goodwill and intangible assets. We base our estimates on historical experience and various other assumptions which we believe to be reasonable under the circumstances. Actual results could differ from those estimates. |
Recent Accounting Guidance and Recently Adopted Accounting Guidance | Recent Accounting Guidance In 2016, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to accounting for leases, which will require lessees to recognize lease assets and lease liabilities on the balance sheet for the rights and obligations created by all leases with terms greater than 12 months. As we are not a lessor, other changes in the guidance applicable to lessors do not apply. The guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. We will adopt the new guidance on January 1, 2019, using a modified retrospective basis and anticipate applying the optional practical expedients related to the transition. We are evaluating the impact of adopting this new accounting guidance on our financial statements. In 2016, the FASB issued new guidance on the measurement of credit losses on financial instruments. Credit losses on loans, trade and other receivables, held-to-maturity debt securities and other instruments will reflect our current estimate of the expected credit losses that generally will result in the earlier recognition of allowances for losses. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. Additional disclosures will be required, including information used to track credit quality by year of origination for most financing receivables. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are required to apply the provisions of this guidance as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted with impairment of available-for-sale debt securities applied prospectively after adoption. We are evaluating the impact and approach to adopting this new accounting guidance on our financial statements. In 2017, the FASB issued new guidance that requires certain premiums on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. Therefore, the new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Transition is on a modified retrospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are evaluating the impact this new accounting guidance will have on our financial statements. In 2018, the FASB issued new guidance in response to tax reform that allows the option to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the "Tax Act") from accumulated other comprehensive income to retained earnings. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. If such an option is elected, transition can be applied either retrospectively to each period in which the effect of tax reform is recognized or applied with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are evaluating the impact this new accounting guidance will have on our financial statements. Recently Adopted Accounting Guidance In 2014, the FASB issued new accounting guidance related to revenue recognition, which was further updated in 2016 for reporting revenue gross versus net. This new guidance replaced all existing GAAP guidance on this topic and eliminated all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. We adopted the guidance effective January 1, 2018 on a full retrospective basis. We performed an impact analysis for the opening balance sheet as of January 1, 2016 as well as for the years ended December 31, 2016 and 2017. The impacts were deemed de minimis. No practical expedients or exemptions were elected in conjunction with the adoption of this new guidance. For additional information, see "Note 2—Revenue." In 2016, the FASB issued new accounting guidance related to the classification and measurement of financial instruments. This new guidance amends GAAP by requiring equity investments to be measured at fair value with changes in fair value recognized in net income. This new guidance also amends the presentation of certain fair value changes for financial liabilities measured at fair value and it amends certain disclosure requirements associated with the fair value of financial instruments. Additionally, in 2018, the FASB issued technical corrections and improvements to this guidance effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years beginning after June 15, 2018. We are required to apply the new guidance on a modified retrospective basis to all outstanding instruments, with a cumulative effect adjustment as of the date of adoption and on a prospective basis to all outstanding equity investments without a readily determinable fair value. We adopted the guidance, including early adoption of the technical corrections and improvements, effective January 1, 2018. Beginning in the first quarter of 2018, we applied the measurement alternative to all our equity investments, which required us to measure these equity investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer. The adoption of this guidance did not have a material impact on our financial statements. In 2016, the FASB issued new guidance on classifying certain cash receipts and cash payments on the statement of cash flows. The new guidance addresses the classification of cash flows related to: debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, including bank-owned life insurance, distributions received from equity method investees and beneficial interests in securitization transactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance should be applied retrospectively after adoption. We adopted the guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial statements. In 2016, the FASB issued new guidance on restricted cash on the statement of cash flows. The new guidance requires the classification and presentation of changes in restricted cash and cash equivalents in the statement of cash flows. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning and ending balances shown on the statement of cash flows. The guidance should be applied retrospectively after adoption. We adopted the guidance effective January 1, 2018 on a retrospective basis. The beginning and ending balances of cash and cash equivalents on the statement of cash flows now include restricted cash and restricted cash equivalents, such as cash and cash equivalents underlying customer accounts and restricted cash and restricted cash equivalents within short-term investments. In 2017, the FASB issued new guidance clarifying the scope and application of the de-recognition of non-financial assets and the sale or transfer of non-financial assets, including partial sales. We adopted the guidance effective January 1, 2018 on a full retrospective basis. The adoption of this guidance did not have a material impact on our financial statements. In 2017, the FASB issued new guidance clarifying which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Specifically, an entity would apply modification accounting only if the fair value, vesting conditions, or classification of the awards changes as a result of changes in the terms or conditions. We adopted the guidance effective January 1, 2018 and applied it prospectively upon adoption. The adoption of this guidance did not have a material impact on our financial statements. In 2017, the FASB issued new guidance intended to better align the results of hedge accounting with an entity’s risk management activities. This guidance updates the designation and measurement guidance for qualifying hedging relationships by expanding hedge accounting for both nonfinancial and financial risk components and by refining the measurement of hedge results to better reflect an entity’s hedging strategies. The amendments will also align the recognition and presentation of the effects of the hedge results in the financial statements to increase the understandability of the results of an entity’s intended hedging strategies. Additionally, the guidance includes certain targeted improvements to ease the operational burden of applying hedge accounting. We are required to apply the guidance with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is adopted and prospectively apply the presentation and disclosure guidance. We early adopted the guidance in the first quarter of 2018 using a modified retrospective approach to reflect application of the new guidance effective January 1, 2018. Adoption of the guidance did not have a material impact on our financial statements. In 2018, the FASB issued new guidance to provide clarity around application of income tax accounting in situations where the assessment of tax implications of the Tax Act might not be complete as of period end in which the Tax Act was enacted. This guidance prescribes that an entity must reflect the income tax impact of the Tax Act in the period in which the tax accounting is complete and allows an entity to report provisional amounts for those specific effects of the Act for which the accounting is incomplete but a reasonable estimate can be determined. No provisional amounts should be reported for specific effects of the Tax Act for which a reasonable estimate cannot be determined, and the entity should continue to apply the provisions of the tax laws that were in effect prior to the enactment of the Tax Act. It further allows a measurement period of one year from the date of enactment within which to complete the accounting for all impacts of the Tax Act. Our financial statements reflect tax accounting in compliance with this guidance. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following table presents our revenues disaggregated by primary geographical markets: Three Months Ended March 31, 2018 2017 (In millions) Primary geographical markets United States ("U.S.") $ 2,023 $ 1,606 United Kingdom ("U.K.") 392 313 Other countries (1) 1,270 1,056 Total revenues (2) $ 3,685 $ 2,975 Types of revenues Transaction revenues $ 3,197 $ 2,624 Other value added services 488 351 Total revenues (2) $ 3,685 $ 2,975 (1) No single country included in the other countries category generated more than 10% of total revenue. (2) Total revenues include interest, fees and gains earned on loan and interest receivables, net and held for sale portfolio, as well as hedging gains or losses and interest earned on certain PayPal customer balances of $359 million and $307 million for the three months ended March 31, 2018 and 2017 , respectively, which do not represent revenues recognized in the scope of ASC Topic 606, Revenue from contracts with customers . |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table sets forth the computation of basic and diluted net income per share for the periods indicated: Three Months Ended March 31, 2018 2017 (In millions, except per share amounts) Numerator: Net income $ 511 $ 384 Denominator: Weighted average shares of common stock - basic 1,192 1,203 Dilutive effect of equity incentive awards 25 13 Weighted average shares of common stock - diluted 1,217 1,216 Net income per share: Basic $ 0.43 $ 0.32 Diluted $ 0.42 $ 0.32 Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive — 6 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill balances and adjustments | The following table presents goodwill balances and adjustments to those balances during the three months ended March 31, 2018 : December 31, Goodwill Acquired Adjustments March 31, (In millions) Total goodwill $ 4,339 $ — $ (1 ) $ 4,338 |
Components of identifiable intangible assets | The components of identifiable intangible assets are as follows: March 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) (In millions, except years) Intangible assets: Customer lists and user base $ 613 $ (574 ) $ 39 3 $ 613 $ (563 ) $ 50 3 Marketing related 198 (197 ) 1 1 198 (196 ) 2 1 Developed technologies 274 (227 ) 47 3 274 (215 ) 59 3 All other 245 (194 ) 51 5 245 (188 ) 57 5 Intangible assets, net $ 1,330 $ (1,192 ) $ 138 $ 1,330 $ (1,162 ) $ 168 |
Expected future intangible asset amortization | Expected future intangible asset amortization as of March 31, 2018 was as follows (in millions): Fiscal years: Remaining 2018 $ 69 2019 42 2020 27 $ 138 |
Geographical Information (Table
Geographical Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of net revenues and long-lived assets, by geographical areas | The following table summarizes long-lived assets based on geography: March 31, December 31, (In millions) Long-lived assets: U.S. $ 1,422 $ 1,432 Other countries 101 96 Total long-lived assets $ 1,523 $ 1,528 |
Funds Receivable and Customer31
Funds Receivable and Customer Accounts (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of assets underlying our funds receivable and customer accounts | The following table summarizes the assets underlying our funds receivable and customer accounts as of March 31, 2018 and December 31, 2017 . March 31, December 31, (In millions) Cash and cash equivalents $ 5,832 $ 5,387 Government and agency securities 8,036 6,651 Time deposits 373 739 Corporate debt securities 1,129 1,248 Funds receivable 3,792 4,217 Total funds receivable and customer accounts $ 19,162 $ 18,242 |
Estimated fair value of our investments classified as available for sale included within funds receivable and customer accounts | As of March 31, 2018 and December 31, 2017 , the estimated fair value of our investments classified as available-for-sale included within funds receivable and customer accounts was as follows: March 31, 2018 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Government and agency securities $ 6,962 $ — $ (6 ) $ 6,956 Corporate debt securities 392 — (1 ) 391 Total $ 7,354 $ — $ (7 ) $ 7,347 December 31, 2017 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Government and agency securities $ 5,946 $ — $ (5 ) $ 5,941 Corporate debt securities 529 — — 529 Total $ 6,475 $ — $ (5 ) $ 6,470 |
The estimated fair values of our investments classified as available for sale included within funds receivable and customer accounts by date of contractual maturity | The estimated fair values of our investments classified as available-for-sale included within funds receivable and customer accounts by date of contractual maturity at March 31, 2018 were as follows: March 31, (In millions) One year or less $ 7,292 One year through two years 26 Two years through three years 29 Total $ 7,347 The estimated fair values of our short-term and long-term investments classified as available-for-sale by date of contractual maturity at March 31, 2018 were as follows: March 31, 2018 (In millions) One year or less $ 2,830 One year through two years 823 Two years through three years 344 Three years through four years 171 Four years through five years 49 Greater than five years 10 Total $ 4,227 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Estimated fair value of short and long-term investments classified as available for sale | As of March 31, 2018 and December 31, 2017 , the estimated fair value of our short-term and long-term investments classified as available-for-sale was as follows: March 31, 2018 Gross Gross Gross Estimated (In millions) Short-term investments (1)(2) : Corporate debt securities $ 2,340 $ — $ (4 ) $ 2,336 Government and agency securities 495 — (1 ) 494 Long-term investments (1) : Corporate debt securities 1,324 1 (16 ) 1,309 Government and agency securities 88 — — 88 Total (1)(2) $ 4,247 $ 1 $ (21 ) $ 4,227 (1) Excludes short-term restricted cash of $81 million that we intend to use to support our global sabbatical program and a counterparty guarantee, and long-term restricted cash of $2 million . (2) Excludes time deposits of $199 million , which are not considered available-for-sale securities. December 31, 2017 Gross Gross Gross Estimated (In millions) Short-term investments (1)(2) : Corporate debt securities $ 2,092 $ 1 $ (1 ) $ 2,092 Government and agency securities 210 — — 210 Long-term investments (1) : Corporate debt securities 1,769 2 (7 ) 1,764 Government and agency securities 98 — — 98 Total (1)(2) $ 4,169 $ 3 $ (8 ) $ 4,164 (1) Excludes short-term restricted cash of $79 million that we intend to use to support our global sabbatical program and a counterparty guarantee, and long-term restricted cash of $2 million . (2) Excludes time deposits of $163 million , which are not considered available-for-sale securities. |
Estimated fair values of investments classified as available for sale by date of contractual maturity | The estimated fair values of our investments classified as available-for-sale included within funds receivable and customer accounts by date of contractual maturity at March 31, 2018 were as follows: March 31, (In millions) One year or less $ 7,292 One year through two years 26 Two years through three years 29 Total $ 7,347 The estimated fair values of our short-term and long-term investments classified as available-for-sale by date of contractual maturity at March 31, 2018 were as follows: March 31, 2018 (In millions) One year or less $ 2,830 One year through two years 823 Two years through three years 344 Three years through four years 171 Four years through five years 49 Greater than five years 10 Total $ 4,227 |
Fair Value Measurement of Ass33
Fair Value Measurement of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of financial assets and liabilities measured at fair value on a recurring basis | The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 : March 31, 2018 Significant Other (In millions) Assets: Cash and cash equivalents (1) $ 1,104 $ 1,104 Short-term investments (2) : Corporate debt securities 2,419 2,419 Government and agency securities 728 728 Total short-term investments $ 3,147 $ 3,147 Funds receivable and customer accounts (3) 9,424 9,424 Derivatives 56 56 Long-term investments (2) : Corporate debt securities 1,309 1,309 Government and agency securities 88 88 Total long-term investments 1,397 1,397 Total financial assets $ 15,128 $ 15,128 Liabilities: Derivatives $ 197 $ 197 (1) Excludes cash of $1.8 billion not subject to fair value measurement on a recurring basis. (2) Excludes restricted cash of $83 million , time deposits of $199 million , and equity investments of $88 million not subject to fair value measurement on a recurring basis. (3) Excludes cash, time deposits and funds receivable of $9.7 billion underlying funds receivable and customer accounts not subject to fair value measurement on a recurring basis. December 31, 2017 Significant Other (In millions) Assets: Cash and cash equivalents (1) $ 791 $ 791 Short-term investments (2) : Corporate debt securities 2,219 2,219 Government and agency securities 351 351 Total short-term investments 2,570 2,570 Funds receivable and customer accounts (3) 8,007 8,007 Derivatives 66 66 Long-term investments (2) : Corporate debt securities 1,773 1,773 Government and agency securities 98 98 Total long-term investments 1,871 1,871 Total financial assets $ 13,305 $ 13,305 Liabilities: Derivatives $ 218 $ 218 (1) Excludes cash of $2.1 billion not subject to fair value measurement on a recurring basis. (2) Excludes restricted cash of $81 million , time deposits of $163 million , and equity investments of $88 million not subject to fair value measurement on a recurring basis. (3) Excludes cash, time deposits and funds receivable of $10.2 billion underlying funds receivable and customer accounts not subject to fair value measurement on a recurring basis. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of outstanding derivative instruments | The fair value of our outstanding derivative instruments as of March 31, 2018 and December 31, 2017 was as follows: Balance Sheet Location March 31, December 31, (In millions) Derivative Assets: Foreign exchange contracts designated as cash flow hedges Other current assets $ 5 $ — Foreign exchange contracts not designated as hedging instruments Other current assets 51 66 Total derivative assets $ 56 $ 66 Derivative Liabilities: Foreign exchange contracts designated as cash flow hedges Other current liabilities $ 122 $ 94 Foreign exchange contracts not designated as hedging instruments Other current liabilities 75 124 Total derivative liabilities $ 197 $ 218 Net fair value of derivative instruments $ (141 ) $ (152 ) |
Schedule of cash flow hedges included in accumulated other comprehensive income | The following table summarizes the activity of derivative contracts that qualify for hedge accounting as of March 31, 2018 and December 31, 2017 , and the impact of designated derivative instruments on accumulated other comprehensive income (loss) for the three months ended March 31, 2018 and 2017 : December 31, 2017 Amount of gains (losses) recognized in other comprehensive income Less: Amount of gains (losses) reclassified from accumulated other comprehensive income to net revenue March 31, 2018 (In millions) Foreign exchange contracts designated as cash flow hedges $ (111 ) $ (62 ) $ (44 ) $ (129 ) December 31, 2016 Amount of gains (losses) recognized in other comprehensive income Less: Amount of gains (losses) reclassified from accumulated other comprehensive income to net revenue March 31, 2017 (In millions) Foreign exchange contracts designated as cash flow hedges $ 131 $ (32 ) $ 40 $ 59 |
Recognized gains or losses related to derivative instruments | The following table provides the location in the condensed consolidated statements of income and amount of the recognized gains or losses related to our derivative instruments designated as hedging instruments: Three Months Ended March 31, 2018 2017 (In millions) Revenue Revenue Total amounts presented in the condensed consolidated statement of income in which the effects of cash flow hedges are recorded $ 3,685 $ 2,975 Gains (losses) on foreign exchange contracts designated as cash flow hedges reclassified from accumulated other comprehensive income into net income $ (44 ) $ 40 The following table provides the location in the condensed consolidated statements of income and amount of the recognized gains or losses related to our derivative instruments not designated as hedging instruments: Three Months Ended March 31, 2018 2017 (In millions) Gains (losses) on foreign exchange contracts recognized in other income (expense), net $ (44 ) $ (40 ) Gains (losses) on foreign exchange contracts recognized in net revenues (6 ) $ — Total gains (losses) recognized from foreign exchange contracts not designated as hedging instruments $ (50 ) $ (40 ) |
Schedule of notional amounts of outstanding derivatives | The following table provides the notional amounts of our outstanding derivatives: March 31, 2018 December 31, 2017 (In millions) Foreign exchange contracts designated as cash flow hedges $ 3,309 $ 2,639 Foreign exchange contracts not designated as hedging instruments 6,515 5,669 Total $ 9,824 $ 8,308 |
Loans and Interest Receivable (
Loans and Interest Receivable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Principal amount of loans and interest receivable segmented by a FICO score range | The following table presents the principal amount of U.S. consumer loans and interest receivable segmented by a FICO score range: March 31, 2018 December 31, 2017 (In millions) > 760 $ 812 $ 832 680 - 759 2,474 2,439 600 - 679 2,432 2,378 < 599 804 752 Total $ 6,522 $ 6,401 |
Delinquency status of the principal amount of loans and interest receivable | The following tables present our estimate of the principal amount of merchant loans, advances, interest and fees receivable past their original expected or contractual repayment period. March 31, 2018 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 1,105 $ 44 $ 28 $ 40 $ 10 $ 122 $ 1,227 December 31, 2017 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 884 $ 44 $ 28 $ 43 $ 13 $ 128 $ 1,012 The following table presents the delinquency status of U.S. consumer loans and interest receivable, held for sale. The amounts shown below are based on the number of days past the billing date to the consumer. Current represents balances that are within 30 days of the billing date. As of March 31, 2018 and December 31, 2017 , approximately 91.9% and 90.6% , respectively, of the portfolio of U.S. consumer loans and interest receivable, held for sale was current. March 31, 2018 (1) (In millions) Current 30 - 59 Days 60 - 89 Days 90 - 180 Days Total Past 30 days Total $ 5,994 $ 208 $ 88 $ 232 $ 528 $ 6,522 (1) Includes approximately $31 million of U.S. consumer loans and interest receivables not designated as held for sale that are fully reserved and are expected to be charged off, and excludes approximately $46 million related to accrued unbilled interest. December 31, 2017 (1) (In millions) Current 30 - 59 Days 60 - 89 Days 90 - 180 Days Total Past 30 days Total $ 5,800 $ 240 $ 103 $ 258 $ 601 $ 6,401 (1) Includes approximately $50 million of U.S. consumer loans and interest receivables not designated as held for sale that are fully reserved and are expected to be charged off, and excludes approximately $47 million related to accrued unbilled interest. The following tables present the delinquency status of the principal amount of international consumer loans and interest receivable. The amounts shown below are based on the number of days past the billing date to the consumer. Current represents balances that are within 30 days of the billing date. Amounts as of March 31, 2018 and December 31, 2017 represent loans and interest receivable due from consumer accounts excluding amounts classified as held for sale, of which approximately 95.3% and 96.0% , respectively, were current. March 31, 2018 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 384 $ 10 $ 3 $ 6 $ 19 $ 403 December 31, 2017 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 313 $ 7 $ 2 $ 4 $ 13 $ 326 |
Allowance for loans and interest receivable | The following table summarizes the activity in the allowance for consumer loans and interest receivable for the three months ended March 31, 2018 and 2017 : March 31, 2018 March 31, 2017 (1) Consumer Loans Receivable Interest Receivable Total Allowance (2) Consumer Loans Receivable Interest Receivable Total Allowance (In millions) Beginning balance $ 57 $ 6 $ 63 $ 265 $ 40 $ 305 Provisions 23 3 26 120 29 149 Charge-offs (39 ) (3 ) (42 ) (104 ) (32 ) (136 ) Recoveries — — — 10 — 10 Ending balance $ 41 $ 6 $ 47 $ 291 $ 37 $ 328 (1) Includes allowance related to loans and interest receivable, held for sale portfolio prior to its designation as held for sale. (2) Beginning and ending balances include approximately $50 million and $31 million , respectively, of U.S. consumer receivables not designated as held for sale that are fully reserved and are expected to be charged off. The following table summarizes the activity in the allowance for merchant loans and advances, interest and fees receivable, for the three months ended March 31, 2018 and 2017 : March 31, 2018 March 31, 2017 Merchant Loans and Advances Interest and Fees Receivable Total Allowance Merchant Loans and Advances Interest and Fees Receivable Total Allowance (In millions) Beginning balance $ 52 $ 7 $ 59 $ 28 $ 3 $ 31 Provisions 39 6 45 9 2 11 Charge-offs (21 ) (2 ) (23 ) (10 ) (2 ) (12 ) Recoveries 2 — 2 2 — 2 Ending balance $ 72 $ 11 $ 83 $ 29 $ 3 $ 32 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Management's estimate of the maximum potential exposure related to protection programs | The following table provides management's estimate of the maximum potential exposure related to our protection programs as of March 31, 2018 and December 31, 2017 : March 31, 2018 December 31, 2017 (In millions) Maximum potential exposure $ 173,764 $ 165,207 The following table provides the amount of allowance for transaction losses and negative customer balances related to our protection programs as of March 31, 2018 and December 31, 2017 : March 31, 2018 December 31, 2017 (In millions) Allowance for transaction losses and negative customer balances $ 283 $ 266 |
Stock Repurchase Programs (Tabl
Stock Repurchase Programs (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Summary of stock repurchase activity | The stock repurchase activity under the April 2017 stock repurchase program during the three months ended March 31, 2018 is summarized as follows: Shares Repurchased Average Price (1) (2) Cash Paid for Shares Repurchased Remaining Amount Authorized (In millions, except per share amounts) Balance as of January 1, 2018 $ 4,999 Repurchases of shares of common stock in the open market 10.8 $ 76.82 825 4,174 Repurchases of shares of common stock under the ASR agreement 12.8 $ 78.03 1,000 3,174 Balance as of March 31, 2018 23.6 $ 1,825 $ 3,174 (1) Average price paid per share for open market purchases includes broker commissions. (2) Average price paid per share under the ASR agreement represents the volume-weighted average share price, less a discount and adjustments pursuant to the terms of the agreement. Treasury stock recorded for repurchases under the ASR agreement amounts to $985 million . |
Stock-Based Plans (Tables)
Stock-Based Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of restricted stock units and performance-based restricted stock units | The following table summarizes the RSU and PBRSU activity under our equity incentive plans for the three months ended March 31, 2018 : Units (In thousands) Outstanding at January 1, 2018 33,875 Awarded (1) 12,103 Vested (1) (9,663 ) Forfeited (484 ) Outstanding at March 31, 2018 35,831 Expected to vest 30,871 (1) Includes approximately 2.1 million additional PBRSUs issued due to company performance in connection with the Company's 2017 annual incentive plan. |
Schedule of stock-based compensation expense | The impact on our results of operations of recording stock-based compensation expense under our equity incentive plans for the three months ended March 31, 2018 and 2017 was as follows: Three Months Ended March 31, 2018 2017 (In millions) Customer support and operations $ 38 $ 30 Sales and marketing 44 28 Product development 64 45 General and administrative 59 42 Depreciation and amortization 4 2 Total stock-based compensation expense $ 209 $ 147 Capitalized as part of internal use software and website development costs $ 7 $ 3 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve activity by type of cost | The following table summarizes the restructuring reserve activity during the three months ended March 31, 2018: Employee Severance and Benefits (In millions) Accrued liability as of January 1, 2018 $ 2 Charges 25 Payments (2 ) Accrued liability as of March 31, 2018 $ 25 |
Accumulated Other Comprehensi40
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the three months ended March 31, 2018 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Currency Translation Estimated tax benefit Total (In millions) Beginning balance $ (111 ) $ (12 ) $ (25 ) $ 6 $ (142 ) Other comprehensive income (loss) before reclassifications (62 ) (16 ) 2 4 (72 ) Less: Amount of gains (losses) reclassified from accumulated other comprehensive income (44 ) (1 ) — — (45 ) Net current period other comprehensive income (loss) (18 ) (15 ) 2 4 (27 ) Ending balance $ (129 ) $ (27 ) $ (23 ) $ 10 $ (169 ) The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the three months ended March 31, 2017 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Estimated tax benefit Total (In millions) Beginning balance $ 131 $ (5 ) $ (68 ) $ 1 $ 59 Other comprehensive income (loss) before reclassifications (32 ) — 13 1 (18 ) Less: Amount of gains (losses) reclassified from accumulated other comprehensive income 40 (1 ) — — 39 Net current period other comprehensive income (loss) (72 ) 1 13 1 (57 ) Ending balance $ 59 $ (4 ) $ (55 ) $ 2 $ 2 |
Reclassifications out of accumulated other comprehensive income (loss) | The following table provides details about reclassifications out of accumulated other comprehensive income (loss) for the three months ended March 31, 2018 and 2017 : Details about Accumulated Other Comprehensive Income (Loss) Components Amount of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Statement of Income Three Months Ended March 31, 2018 2017 (In millions) Gains (losses) on cash flow hedges-foreign exchange contracts $ (44 ) $ 40 Net revenues Unrealized gains (losses) on investments (1 ) (1 ) Other income (expense), net $ (45 ) $ 39 Income before income taxes — — Income tax expense Total reclassifications for the period $ (45 ) $ 39 Net income |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018obligationsegment | |
Disaggregation of Revenue [Line Items] | |
Number of operating segments | segment | 1 |
Number of reportable segments | segment | 1 |
Transactions | |
Disaggregation of Revenue [Line Items] | |
Number of performance obligations | obligation | 1 |
Other value added services | |
Disaggregation of Revenue [Line Items] | |
Number of performance obligations | obligation | 1 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 3,685 | $ 2,975 |
Transaction revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,197 | 2,624 |
Other value added services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 488 | 351 |
Interest, fees and gains earned on loan and interest receivables, net and held for sale portfolio, hedging gains and interest earned on customer balances | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 359 | 307 |
United States (U.S.) | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,023 | 1,606 |
United Kingdom (U.K.) | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 392 | 313 |
Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 1,270 | $ 1,056 |
Net Income Per Share - Computat
Net Income Per Share - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | ||
Net income | $ 511 | $ 384 |
Denominator: | ||
Weighted average shares of common stock - basic (in shares) | 1,192 | 1,203 |
Dilutive effect of equity incentive awards (in shares) | 25 | 13 |
Weighted average shares of common stock - diluted (in shares) | 1,217 | 1,216 |
Net income per share: | ||
Basic (in usd per share) | $ 0.43 | $ 0.32 |
Diluted (in usd per share) | $ 0.42 | $ 0.32 |
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive (in shares) | 0 | 6 |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets - Goodwill Balances and Adjustments (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Total goodwill | |
December 31, 2017 | $ 4,339 |
Goodwill Acquired | 0 |
Adjustments | (1) |
March 31, 2018 | $ 4,338 |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets - Components of Identifiable Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,330 | $ 1,330 |
Accumulated Amortization | (1,192) | (1,162) |
Net Carrying Amount | 138 | 168 |
Customer lists and user base | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 613 | 613 |
Accumulated Amortization | (574) | (563) |
Net Carrying Amount | $ 39 | $ 50 |
Intangible assets acquired, useful life | 3 years | 3 years |
Marketing related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 198 | $ 198 |
Accumulated Amortization | (197) | (196) |
Net Carrying Amount | $ 1 | $ 2 |
Intangible assets acquired, useful life | 1 year | 1 year |
Developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 274 | $ 274 |
Accumulated Amortization | (227) | (215) |
Net Carrying Amount | $ 47 | $ 59 |
Intangible assets acquired, useful life | 3 years | 3 years |
All other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 245 | $ 245 |
Accumulated Amortization | (194) | (188) |
Net Carrying Amount | $ 51 | $ 57 |
Intangible assets acquired, useful life | 5 years | 5 years |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense for intangible assets | $ 30 | $ 27 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets - Expected Future Intangible Asset Amortization (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fiscal years: | ||
Remaining 2,018 | $ 69 | |
2,019 | 42 | |
2,020 | 27 | |
Net Carrying Amount | $ 138 | $ 168 |
Geographical Information (Detai
Geographical Information (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 1,523 | $ 1,528 |
U.S. | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 1,422 | 1,432 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 101 | $ 96 |
Funds Receivable and Customer49
Funds Receivable and Customer Accounts - Assets Underlying Funds Receivable and Customer Accounts (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Investment [Line Items] | ||
Total funds receivable and customer accounts | $ 19,162 | $ 18,242 |
Cash and cash equivalents | ||
Investment [Line Items] | ||
Total funds receivable and customer accounts | 5,832 | 5,387 |
Government and agency securities | ||
Investment [Line Items] | ||
Total funds receivable and customer accounts | 8,036 | 6,651 |
Time deposits | ||
Investment [Line Items] | ||
Total funds receivable and customer accounts | 373 | 739 |
Corporate debt securities | ||
Investment [Line Items] | ||
Total funds receivable and customer accounts | 1,129 | 1,248 |
Funds receivable | ||
Investment [Line Items] | ||
Total funds receivable and customer accounts | $ 3,792 | $ 4,217 |
Funds Receivable and Customer50
Funds Receivable and Customer Accounts - Estimated Fair Value of Investments Classified as Available for Sale (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | $ 4,247 | $ 4,169 |
Gross Unrealized Gains | 1 | 3 |
Gross Unrealized Losses | (21) | (8) |
Estimated Fair Value | 4,227 | 4,164 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses | (3,400) | (2,800) |
Funds Receivable and Customer Accounts | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 7,354 | 6,475 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (7) | (5) |
Estimated Fair Value | 7,347 | 6,470 |
Funds Receivable and Customer Accounts | Government and agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 6,962 | 5,946 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (6) | (5) |
Estimated Fair Value | 6,956 | 5,941 |
Funds Receivable and Customer Accounts | Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 392 | 529 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | 0 |
Estimated Fair Value | $ 391 | $ 529 |
Funds Receivable and Customer51
Funds Receivable and Customer Accounts - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Total funds receivable and customer accounts | $ 19,162 | $ 18,242 | |
Funds Receivable and Customer Accounts | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Aggregate fair value of investments in an unrealized loss position | 6,400 | 6,000 | |
Fair Value Option, Foreign Currency Denominated Investments | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Total funds receivable and customer accounts | 1,800 | $ 1,400 | |
Fair Value Option, Foreign Currency Denominated Investments | Funds Receivable and Customer Accounts | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Net gains from fair value changes | $ 40 | $ 15 |
Funds Receivable and Customer52
Funds Receivable and Customer Accounts - Estimated Fair Values of Investments Classified as Available for Sale by Contractual Maturity (Details) $ in Millions | Mar. 31, 2018USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |
One year or less | $ 2,830 |
One year through two years | 823 |
Total | 4,227 |
Funds Receivable and Customer Accounts | |
Schedule of Available-for-sale Securities [Line Items] | |
One year or less | 7,292 |
One year through two years | 26 |
Two years through three years | 29 |
Total | $ 7,347 |
Investments - Estimated Fair Va
Investments - Estimated Fair Values of Investments Classified as Available for Sale (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | $ 4,247 | $ 4,169 |
Gross Unrealized Gains | 1 | 3 |
Gross Unrealized Losses | (21) | (8) |
Estimated Fair Value | 4,227 | 4,164 |
Short-term restricted cash | 81 | |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses | (3,400) | (2,800) |
Short-term investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Short-term restricted cash | 79 | |
Short-term investments | Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 2,340 | 2,092 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (4) | (1) |
Estimated Fair Value | 2,336 | 2,092 |
Short-term investments | Government and agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 495 | 210 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | 0 |
Estimated Fair Value | 494 | 210 |
Short-term investments | Time deposits | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 199 | 163 |
Long-term investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Long-term restricted cash | 2 | 2 |
Long-term investments | Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 1,324 | 1,769 |
Gross Unrealized Gains | 1 | 2 |
Gross Unrealized Losses | (16) | (7) |
Estimated Fair Value | 1,309 | 1,764 |
Long-term investments | Government and agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 88 | 98 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 88 | $ 98 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Estimated fair value | $ 4,227 | $ 4,164 | |
Available-for-sale securities, accumulated gross unrealized loss | 21 | 8 | |
Available-for-sale securities, accumulated gross unrealized loss, greater than twelve months | 206 | 207 | |
Equity Investments measured at cost minus impairment | 88 | ||
Corporate debt securities | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Available-for-sale securities, accumulated gross unrealized loss | 3,400 | 2,800 | |
Fair Value Option, Foreign Currency Denominated Investments | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Estimated fair value | 317 | $ 277 | |
Fair Value Option, Foreign Currency Denominated Investments | Other Income (Expense) | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Net gains from fair value changes | $ 8 | $ 6 |
Investments - Estimated Fair 55
Investments - Estimated Fair Values of Investments Classified as Available for Sale by Date of Contractual Maturity (Details) $ in Millions | Mar. 31, 2018USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
One year or less | $ 2,830 |
One year through two years | 823 |
Two years through three years | 344 |
Three years through four years | 171 |
Four years through five years | 49 |
Greater than five years | 10 |
Total | $ 4,227 |
Fair Value Measurement of Ass56
Fair Value Measurement of Assets and Liabilities - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Funds receivable and customer accounts | $ 19,162 | $ 18,242 |
Liabilities: | ||
Short-term restricted cash | 81 | |
Amortized cost basis | 4,247 | 4,169 |
Equity Investments measured at cost minus impairment | 88 | |
Corporate debt securities | ||
Assets: | ||
Funds receivable and customer accounts | 1,129 | 1,248 |
Government and agency securities | ||
Assets: | ||
Funds receivable and customer accounts | 8,036 | 6,651 |
Time deposits | ||
Assets: | ||
Funds receivable and customer accounts | 373 | 739 |
Short-term investments | ||
Liabilities: | ||
Short-term restricted cash | 79 | |
Short-term investments | Corporate debt securities | ||
Liabilities: | ||
Amortized cost basis | 2,340 | 2,092 |
Short-term investments | Government and agency securities | ||
Liabilities: | ||
Amortized cost basis | 495 | 210 |
Short-term investments | Time deposits | ||
Liabilities: | ||
Amortized cost basis | 199 | 163 |
Long-term investments | Corporate debt securities | ||
Liabilities: | ||
Amortized cost basis | 1,324 | 1,769 |
Long-term investments | Government and agency securities | ||
Liabilities: | ||
Amortized cost basis | 88 | 98 |
Fair value, measurements, recurring basis | ||
Assets: | ||
Cash and cash equivalents | 1,104 | 791 |
Funds receivable and customer accounts | 9,424 | 8,007 |
Derivatives | 56 | 66 |
Total financial assets | 15,128 | 13,305 |
Liabilities: | ||
Derivatives | 197 | 218 |
Fair value, measurements, recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash and cash equivalents | 1,104 | 791 |
Funds receivable and customer accounts | 9,424 | 8,007 |
Derivatives | 56 | 66 |
Total financial assets | 15,128 | 13,305 |
Liabilities: | ||
Derivatives | 197 | 218 |
Fair value, measurements, recurring basis | Short-term investments | ||
Assets: | ||
Investments | 3,147 | 2,570 |
Fair value, measurements, recurring basis | Short-term investments | Corporate debt securities | ||
Assets: | ||
Investments | 2,419 | 2,219 |
Fair value, measurements, recurring basis | Short-term investments | Government and agency securities | ||
Assets: | ||
Investments | 728 | 351 |
Fair value, measurements, recurring basis | Short-term investments | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Investments | 3,147 | 2,570 |
Fair value, measurements, recurring basis | Short-term investments | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Assets: | ||
Investments | 2,419 | 2,219 |
Fair value, measurements, recurring basis | Short-term investments | Significant Other Observable Inputs (Level 2) | Government and agency securities | ||
Assets: | ||
Investments | 728 | 351 |
Fair value, measurements, recurring basis | Long-term investments | ||
Assets: | ||
Investments | 1,397 | 1,871 |
Fair value, measurements, recurring basis | Long-term investments | Corporate debt securities | ||
Assets: | ||
Investments | 1,309 | 1,773 |
Fair value, measurements, recurring basis | Long-term investments | Government and agency securities | ||
Assets: | ||
Investments | 88 | 98 |
Fair value, measurements, recurring basis | Long-term investments | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Investments | 1,397 | 1,871 |
Fair value, measurements, recurring basis | Long-term investments | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Assets: | ||
Investments | 1,309 | 1,773 |
Fair value, measurements, recurring basis | Long-term investments | Significant Other Observable Inputs (Level 2) | Government and agency securities | ||
Assets: | ||
Investments | 88 | 98 |
Fair Value, measurements, not on a recurring basis | ||
Liabilities: | ||
Cash | 1,800 | 2,100 |
Short-term restricted cash | 83 | 81 |
Equity Investments measured at cost minus impairment | 88 | 88 |
Fair Value, measurements, not on a recurring basis | Time deposits | ||
Liabilities: | ||
Amortized cost basis | 199 | 163 |
Fair Value, measurements, not on a recurring basis | Cash and funds receivable | ||
Assets: | ||
Funds receivable and customer accounts | $ 9,700 | $ 10,200 |
Fair Value Measurement of Ass57
Fair Value Measurement of Assets and Liabilities - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative instruments, duration | 1 month |
Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative instruments, duration | 1 year |
Maximum | Designated as Hedging Instrument | Cash Flow Hedging | Foreign Exchange Contract | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative instruments, duration | 18 months |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Offsetting Liabilities [Line Items] | ||
Maximum maturity of foreign currency exchange contracts | 18 months | |
Net derivative losses related to cash flow hedges to be reclassified into earnings within the next 12 months | $ (126,000,000) | |
Derivative asset, offset | 52,000,000 | $ 56,000,000 |
Derivative liability, offset | 56,000,000 | |
Cash collateral posted related to derivative liabilities | 70,000,000 | 38,000,000 |
Other current liabilities | ||
Offsetting Liabilities [Line Items] | ||
Counterpary cash collateral | $ 6,000,000 | $ 0 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Outstanding Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 56 | $ 66 |
Derivative liabilities | 197 | 218 |
Net fair value of derivative instruments | (141) | (152) |
Foreign Exchange Contract | Designated as Hedging Instrument | Other current assets | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 5 | 0 |
Foreign Exchange Contract | Designated as Hedging Instrument | Other current liabilities | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 122 | 94 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 51 | 66 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 75 | $ 124 |
Derivative Instruments - Cash F
Derivative Instruments - Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) (Details) - Foreign Exchange Contract - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Impact of Designated Derivative Instruments on Accumulated Other Comprehensive Income | ||
Foreign exchange contracts designated as cash flow hedges, beginning balance | $ (111) | $ 131 |
Amount of gains (losses) recognized in other comprehensive income | (62) | (32) |
Less: Amount of gains (losses) reclassified from accumulated other comprehensive income to net revenue | (44) | 40 |
Foreign exchange contracts designated as cash flow hedges, ending balance | $ (129) | $ 59 |
Derivative Instruments - Effect
Derivative Instruments - Effect of Derivative Contracts on Condensed Consolidated Statements of Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total amounts presented in the condensed consolidated statement of income in which the effects of cash flow hedges are recorded | $ 3,685 | $ 2,975 |
Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total amounts presented in the condensed consolidated statement of income in which the effects of cash flow hedges are recorded | 3,685 | 2,975 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign Exchange Contract | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) recognized from foreign exchange contracts not designated as hedging instruments | (44) | 40 |
Not Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) recognized from foreign exchange contracts not designated as hedging instruments | (50) | (40) |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Other Income (Expense) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) recognized from foreign exchange contracts not designated as hedging instruments | (44) | (40) |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Net Revenues | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) recognized from foreign exchange contracts not designated as hedging instruments | $ (6) | $ 0 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Notional Amounts of Outstanding Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Notional amounts | $ 9,824 | $ 8,308 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional amounts | 6,515 | 5,669 |
Foreign Exchange Contract | Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional amounts | $ 3,309 | $ 2,639 |
Loans and Interest Receivable -
Loans and Interest Receivable - Additional Information (Details) - USD ($) $ in Billions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Receivables [Abstract] | ||
Purchased consumer receivables | $ 3 | $ 2.1 |
Loans and Interest Receivable64
Loans and Interest Receivable - Loans and Interest Receivable, Held for Sale (Details) $ in Millions | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and interest receivable, held for sale | $ 6,537 | $ 6,398 |
Consumer Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and interest receivable, held for sale | 6,500 | 6,400 |
Participation interest sold, value | $ 1,100 | $ 1,100 |
Weighted average FICO score | 679 | 680 |
Credit score, prime (greater than) | 680 | 680 |
Percentage of loans and interest receivable, FICO score below 599 | 12.30% | 11.70% |
Credit score (below) | 599 | 599 |
Percentage of loans and interest receivable, current | 95.30% | 96.00% |
Consumer Receivables | Greater than 680 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of loans and interest receivable, prime | 50.40% | 51.10% |
Consumer Receivables | Loans And Interest Receivable, Held For Sale | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of loans and interest receivable, current | 91.90% | 90.60% |
Loans and Interest Receivable65
Loans and Interest Receivable - Loans and Interest Receivables by FICO Score (Details) - Consumer Receivables - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer loans and interest receivable | $ 6,522 | $ 6,401 |
Greater than 760 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer loans and interest receivable | 812 | 832 |
680 - 759 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer loans and interest receivable | 2,474 | 2,439 |
600 - 679 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer loans and interest receivable | 2,432 | 2,378 |
Less Than 599 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer loans and interest receivable | $ 804 | $ 752 |
Loans and Interest Receivable66
Loans and Interest Receivable - Delinquency Status of the Principal Amount of Loans and Interest Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Consumer Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, current | $ 384 | $ 313 |
Loan and interest receivable, past due | 19 | 13 |
Total receivables | 403 | 326 |
Consumer loans and interest receivable, accrued but unbilled interest | 46 | 47 |
Consumer Receivables | U.S. | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Consumer loans and interest receivable not designated as held for sale and are expected to be charged off | 31 | 50 |
Merchant Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, current | 1,105 | 884 |
Loan and interest receivable, past due | 122 | 128 |
Total receivables | 1,227 | 1,012 |
30 - 59 Days Past Due | Consumer Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, past due | 10 | 7 |
30 - 59 Days Past Due | Merchant Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, past due | 44 | 44 |
60 - 89 Days Past Due | Consumer Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, past due | 3 | 2 |
60 - 89 Days Past Due | Merchant Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, past due | 28 | 28 |
90 - 180 Days Past Due | Consumer Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, past due | 6 | 4 |
90 - 180 Days Past Due | Merchant Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, past due | 40 | 43 |
More Than 180 Days | Merchant Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, past due | 10 | 13 |
Loans And Interest Receivable, Held For Sale | Consumer Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, current | 5,994 | 5,800 |
Loan and interest receivable, past due | 528 | 601 |
Total receivables | 6,522 | 6,401 |
Loans And Interest Receivable, Held For Sale | 30 - 59 Days Past Due | Consumer Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, past due | 208 | 240 |
Loans And Interest Receivable, Held For Sale | 60 - 89 Days Past Due | Consumer Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, past due | 88 | 103 |
Loans And Interest Receivable, Held For Sale | 90 - 180 Days Past Due | Consumer Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loan and interest receivable, past due | $ 232 | $ 258 |
Loans and Interest Receivable67
Loans and Interest Receivable - Loans and Interest Receivable, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Consumer Receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan and interest receivables | $ 403 | $ 326 | ||
Percentage of loans and interest receivable, current | 95.30% | 96.00% | ||
Threshold period, write-off of receivables | 180 days | |||
Threshold period, write-off of bankrupt accounts | 60 days | |||
Loan and interest receivables, allowance | $ 47 | $ 63 | $ 328 | $ 305 |
Consumer Receivables | Other Consumer Credit Products | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan and interest receivables | 57 | 55 | ||
Loan and interest receivables, allowance | 9 | 7 | ||
Merchant Receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan and interest receivables | 1,227 | 1,012 | ||
Loan and interest receivables, allowance | $ 83 | $ 59 | $ 32 | $ 31 |
Loans and Interest Receivable68
Loans and Interest Receivable - Merchant Receivables (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Expected period of repayment | 180 days | |
Merchant Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loan and interest receivables | $ 1,227 | $ 1,012 |
Merchant Receivables | PayPal Working Capital Products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Participation interest sold, value | $ 28 | $ 28 |
Merchant Receivables | PayPal Working Capital Products | Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Required percentage of original loan payments every 90 Days | 10.00% | |
Expected period of repayment | 9 months | |
Merchant Receivables | PayPal Working Capital Products | Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Expected period of repayment | 12 months | |
Merchant Receivables | Swift Business Loan Products | Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Expected period of repayment | 3 months | |
Merchant Receivables | Swift Business Loan Products | Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Expected period of repayment | 12 months |
Loans and Interest Receivable69
Loans and Interest Receivable - Swift Merchant Loans and Advance Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Merchant Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loan and interest receivables | $ 1,227 | $ 1,012 |
Loans and Interest Receivable70
Loans and Interest Receivable - Allowance for Loans and Interest Receivable (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Consumer Receivables | |||
Allowance for loans and interest receivable | |||
Beginning balance | $ 63 | $ 305 | |
Provisions | 26 | 149 | |
Charge-offs | (42) | (136) | |
Recoveries | 0 | 10 | |
Ending balance | 47 | 328 | |
Consumer Receivables | U.S. | |||
Allowance for loans and interest receivable | |||
Consumer loans and interest receivable not designated as held for sale and are expected to be charged off | 31 | $ 50 | |
Consumer Receivables | Loans and Advances | |||
Allowance for loans and interest receivable | |||
Beginning balance | 57 | 265 | |
Provisions | 23 | 120 | |
Charge-offs | (39) | (104) | |
Recoveries | 0 | 10 | |
Ending balance | 41 | 291 | |
Consumer Receivables | Interest and Fees Receivable | |||
Allowance for loans and interest receivable | |||
Beginning balance | 6 | 40 | |
Provisions | 3 | 29 | |
Charge-offs | (3) | (32) | |
Recoveries | 0 | 0 | |
Ending balance | 6 | 37 | |
Merchant Receivables | |||
Allowance for loans and interest receivable | |||
Beginning balance | 59 | 31 | |
Provisions | 45 | 11 | |
Charge-offs | (23) | (12) | |
Recoveries | 2 | 2 | |
Ending balance | 83 | 32 | |
Merchant Receivables | Loans and Advances | |||
Allowance for loans and interest receivable | |||
Beginning balance | 52 | 28 | |
Provisions | 39 | 9 | |
Charge-offs | (21) | (10) | |
Recoveries | 2 | 2 | |
Ending balance | 72 | 29 | |
Merchant Receivables | Interest and Fees Receivable | |||
Allowance for loans and interest receivable | |||
Beginning balance | 7 | 3 | |
Provisions | 6 | 2 | |
Charge-offs | (2) | (2) | |
Recoveries | 0 | 0 | |
Ending balance | $ 11 | $ 3 |
Loans and Interest Receivable71
Loans and Interest Receivable - Merchant Receivable Delinquency and Allowance (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Expected period of repayment | 180 days |
Threshold period, write-off of receivables, nonpayment | 60 days |
Threshold period two, write-off of receivables | 360 days |
Merchant Receivables | Swift Business Loan Products | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Threshold period, write-off of receivables | 180 days |
Threshold period, exceeding expected period of repayment for write-off of financing receivable | 180 days |
Threshold period, write-off of bankrupt accounts | 60 days |
Notes Payable (Details)
Notes Payable (Details) | Apr. 05, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($)borrowing | Sep. 30, 2015USD ($) |
Minimum | London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 100.00% | |||
Minimum | Agent Bank’s Prime Rate, The Federal Funds Effective Rate or London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 0.00% | |||
Maximum | London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 162.50% | |||
Maximum | Agent Bank’s Prime Rate, The Federal Funds Effective Rate or London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 62.50% | |||
Revolving Credit Facility | Unsecured Debt | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 2,000,000,000 | |||
Credit facility, term | 5 years | |||
Available borrowing capacity | $ 2,000,000,000 | |||
Accordion feature, increase in maximum borrowing capacity | $ 500,000,000 | |||
Revolving Credit Facility | Uncommitted Credit Facilities | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 350,000,000 | |||
Borrowings outstanding | 0 | |||
Available borrowing capacity | 350,000,000 | |||
Letter of Credit Sub-Facility | Unsecured Debt | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 150,000,000 | |||
Swingline Sub-Facility | Unsecured Debt | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 150,000,000 | |||
Unsecured Debt | Delayed-Draw Term Loan Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 3,000,000,000 | |||
Credit facility, term | 364 days | |||
Maximum number of borrowings | borrowing | 3 | |||
Draw downs from lines of credit | 2,000,000,000 | |||
Borrowings outstanding | $ 3,000,000,000 | |||
Interest rate during period | 2.88% | |||
Available borrowing capacity | $ 0 | |||
Interest expense and fees | $ 15,000,000 | |||
Unsecured Debt | Delayed-Draw Term Loan Credit Facility | Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Repayments of lines of credit | $ 1,000,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) customer in Millions, $ in Billions | Mar. 30, 2018 | Jan. 18, 2018 | Apr. 30, 2018 | Mar. 31, 2018USD ($) | Mar. 16, 2018plantiff | Dec. 31, 2017USD ($) | Dec. 01, 2017customer |
Commitments and Contingencies Disclosure [Abstract] | |||||||
Unused credit available to accountholders | $ | $ 27.3 | $ 26.4 | |||||
Loss Contingencies [Line Items] | |||||||
Number of days to file amended complaint | 75 days | 30 days | |||||
Number of customers with potentially compromised information | customer | 1.6 | ||||||
Number of new court appointed plantiffs | plantiff | 2 | ||||||
Subsequent Event | Minimum | |||||||
Loss Contingencies [Line Items] | |||||||
Number of days to file amended complaint | 30 days | ||||||
Subsequent Event | Maximum | |||||||
Loss Contingencies [Line Items] | |||||||
Number of days to file amended complaint | 3 years |
Commitments and Contingencies74
Commitments and Contingencies - Estimate of the Maximum Potential Exposure and Allowance for Transaction Losses Related to Protection Products (Details) - Protection Programs - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||
Allowance for transaction losses and negative customer balances | $ 283 | $ 266 |
Maximum | ||
Loss Contingencies [Line Items] | ||
Maximum potential exposure | $ 173,764 | $ 165,207 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Related Party Transactions [Abstract] | ||
Accounts payable to related parties | $ 0 | $ 0 |
Accounts receivable from related parties | $ 0 | $ 0 |
Stock Repurchase Programs (Deta
Stock Repurchase Programs (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Apr. 30, 2017 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Repurchases of shares of common stock, Shares Repurchased (in shares) | 23,600,000 | ||||
Repurchases of shares of common stock, Cash Paid for Shares Repurchased | $ 1,825,000,000 | $ 517,000,000 | |||
Remaining Amount Authorized | $ 3,174,000,000 | $ 3,174,000,000 | $ 4,999,000,000 | ||
Treasury stock, retired (in shares) | 0 | ||||
Stock Repurchase Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchase program, maximum authorized amount | $ 5,000,000,000 | ||||
Repurchases of shares of common stock, Shares Repurchased (in shares) | 10,800,000 | ||||
Repurchases of shares of common stock, Average Price per Share (in usd per share) | $ 76.82 | ||||
Repurchases of shares of common stock, Cash Paid for Shares Repurchased | $ 825,000,000 | ||||
Remaining Amount Authorized | $ 4,174,000,000 | $ 4,174,000,000 | |||
Accelerated Share Repurchase Agreement | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Repurchases of shares of common stock, Shares Repurchased (in shares) | 12,800,000 | 12,800,000 | |||
Repurchases of shares of common stock, Average Price per Share (in usd per share) | $ 78.03 | ||||
Repurchases of shares of common stock, Cash Paid for Shares Repurchased | $ 1,000,000,000 | $ 1,000,000,000 | |||
Remaining Amount Authorized | $ 3,174,000,000 | 3,174,000,000 | |||
Treasury stock recorded for repurchases | $ 985,000,000 |
Stock-Based Plans - Additional
Stock-Based Plans - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Outstanding (in shares) | 1,900,000 |
Granted (in shares) | 0 |
Restricted Stock Units (RSUs) And Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Weighted average grant-date fair value of restricted stock units granted in period (in usd per share) | $ / shares | $ 78.58 |
Granted (in shares) | 12,103,000 |
Restricted Stock Units (RSUs) | One-year performance period | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Award requisite service period | 3 years |
Performance Shares | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Issuance percentage of target amount | 0.00% |
Performance Shares | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Issuance percentage of target amount | 200.00% |
Performance Shares | One-year performance period | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Award requisite service period | 1 year |
Granted (in shares) | 1,500,000 |
Performance Shares | Three-year performance period | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Award requisite service period | 3 years |
Granted (in shares) | 700,000 |
Stock-Based Plans - Summary of
Stock-Based Plans - Summary of Restricted Stock Units and Performance-Based Restricted Stock Units (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2018shares | |
Restricted Stock Units (RSUs) And Performance Shares | |
Restricted stock units | |
Outstanding balance, beginning of period (in shares) | 33,875 |
Awarded (in shares) | 12,103 |
Vested (in shares) | (9,663) |
Forfeited (in shares) | (484) |
Outstanding balance, end of period (in shares) | 35,831 |
Expected to vest at the end of period (in shares) | 30,871 |
Performance Shares | 2017 Annual Incentive Plan | |
Restricted stock units | |
Awarded (in shares) | 2,100 |
Stock-Based Plans - Schedule of
Stock-Based Plans - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 209 | $ 147 |
Capitalized as part of internal use software and website development costs | 7 | 3 |
Customer support and operations | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 38 | 30 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 44 | 28 |
Product development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 64 | 45 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 59 | 42 |
Depreciation and amortization | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 4 | $ 2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate, percentage | 7.00% | 12.00% |
U.S. Federal statutory income tax rate, percentage | 21.00% | 35.00% |
Tax Cuts and Jobs Act of 2017 adjustment to provisional income tax expense | $ 3 |
Restructuring - Restructuring C
Restructuring - Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges | $ 25 | |
Reductions of global workforce | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges | $ 25 | $ 40 |
Restructuring - Restructuring R
Restructuring - Restructuring Reserve Activity (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Reserve | |
Accrued liability, beginning of period | $ 2 |
Charges | 25 |
Payments | (2) |
Accrued liability, end of period | $ 25 |
Accumulated Other Comprehensi83
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) Balances (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Balances of Other Comprehensive Income (Loss), Tax | ||
AOCI tax, beginning balance | $ 6 | $ 1 |
Other comprehensive income (loss) before reclassifications, tax | 4 | 1 |
Less: Amount of gains (losses) reclassified from accumulated other comprehensive income, tax | 0 | 0 |
Net current period other comprehensive income (loss), tax | 4 | 1 |
AOCI tax, ending balance | 10 | 2 |
Accumulated Balances of Other Comprehensive Income (Loss), Net of Tax | ||
AOCI, net of tax, beginning balance | 15,994 | |
Other comprehensive income (loss) before reclassifications, net of tax | (18) | |
Less: Amount of gains (losses) reclassified from accumulated other comprehensive income, net of tax | 39 | |
Other comprehensive (loss) income, net of tax | (27) | (57) |
AOCI, net of tax, ending balance | 14,641 | |
AOCI Attributable to Parent | ||
Accumulated Balances of Other Comprehensive Income (Loss), Net of Tax | ||
AOCI, net of tax, beginning balance | (142) | 59 |
Other comprehensive income (loss) before reclassifications, net of tax | (72) | |
Less: Amount of gains (losses) reclassified from accumulated other comprehensive income, net of tax | (45) | |
Other comprehensive (loss) income, net of tax | (27) | |
AOCI, net of tax, ending balance | (169) | 2 |
Unrealized Gains (Losses) on Cash Flow Hedges | ||
Accumulated Balances of Other Comprehensive Income (Loss), Before Tax | ||
AOCI before tax, beginning balance | (111) | 131 |
Other comprehensive income (loss) before reclassifications, before tax | (62) | (32) |
Less: Amount of gains (losses) reclassified from accumulated other comprehensive income, before tax | (44) | 40 |
Net current period other comprehensive income (loss), before tax | (18) | (72) |
AOCI before tax, ending balance | (129) | 59 |
Unrealized Gains (Losses) on Investments | ||
Accumulated Balances of Other Comprehensive Income (Loss), Before Tax | ||
AOCI before tax, beginning balance | (12) | (5) |
Other comprehensive income (loss) before reclassifications, before tax | (16) | 0 |
Less: Amount of gains (losses) reclassified from accumulated other comprehensive income, before tax | (1) | (1) |
Net current period other comprehensive income (loss), before tax | (15) | 1 |
AOCI before tax, ending balance | (27) | (4) |
Foreign Currency Translation | ||
Accumulated Balances of Other Comprehensive Income (Loss), Before Tax | ||
AOCI before tax, beginning balance | (25) | (68) |
Other comprehensive income (loss) before reclassifications, before tax | 2 | 13 |
Less: Amount of gains (losses) reclassified from accumulated other comprehensive income, before tax | 0 | 0 |
Net current period other comprehensive income (loss), before tax | 2 | 13 |
AOCI before tax, ending balance | $ (23) | $ (55) |
Accumulated Other Comprehensi84
Accumulated Other Comprehensive Income (Loss) - Reclassifications Out of Other Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net revenues | $ 3,685 | $ 2,975 |
Other income (expense), net | 14 | 7 |
Income before income taxes | 548 | 438 |
Income tax expense | (37) | (54) |
Net income | 511 | 384 |
Amount of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net income | (45) | 39 |
Amount of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) | Gains (losses) on cash flow hedges-foreign exchange contracts | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net revenues | (44) | 40 |
Amount of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized gains (losses) on investments | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other income (expense), net | (1) | (1) |
Income before income taxes | (45) | 39 |
Income tax expense | $ 0 | $ 0 |
Uncategorized Items - pypl-2018
Label | Element | Value |
Cash Equivalents [Member] | ||
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | $ 19,000,000 |
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | 16,000,000 |
Funds Receivable And Customer Accounts [Member] | ||
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | 4,325,000,000 |
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | $ 5,832,000,000 |