Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Conduent Incorporated | |
Entity Central Index Key | 1,677,703 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 211,173,496 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | ||||
Revenue | $ 1,387 | $ 1,496 | $ 2,807 | $ 3,049 |
Cost of Services | 1,125 | 1,253 | 2,293 | 2,547 |
Gross Margin | 262 | 243 | 514 | 502 |
Operating Costs and Expenses | ||||
Research and development | 3 | 3 | 5 | 7 |
Selling, general and administrative | 149 | 153 | 294 | 322 |
Restructuring and related costs | 17 | 36 | 37 | 54 |
Amortization of acquired intangible assets | 60 | 61 | 121 | 122 |
Interest expense | 37 | 34 | 70 | 70 |
Separation costs | 0 | 1 | 0 | 6 |
(Gain) loss on divestitures and transaction costs | (60) | (25) | (45) | (25) |
Litigation costs (recoveries), net | 4 | (9) | 35 | (20) |
Other (income) expenses, net | (2) | 0 | (3) | (1) |
Total Operating Costs and Expenses | 208 | 254 | 514 | 535 |
Income (Loss) before Income Taxes | 54 | (11) | 0 | (33) |
Income tax expense (benefit) | 43 | (7) | 39 | (19) |
(Loss) Income from Continuing Operations | 11 | (4) | (39) | (14) |
Income from discontinued operations, net of tax | 0 | 0 | 0 | 4 |
Net (Loss) Income | $ 11 | $ (4) | $ (39) | $ (10) |
Continuing operations, per basic share | $ 0.05 | $ (0.03) | $ (0.21) | $ (0.09) |
Discontinued operations, per basic share | 0 | 0 | 0 | 0.02 |
Total Basic Loss per Share | 0.05 | (0.03) | (0.21) | (0.07) |
Continuing operations, per diluted share | 0.04 | (0.03) | (0.21) | (0.09) |
Discontinued operations, per diluted share | 0 | 0 | 0 | 0.02 |
Total Diluted Loss per Share | $ 0.04 | $ (0.03) | $ (0.21) | $ (0.07) |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (Loss) Income | $ 11 | $ (4) | $ (39) | $ (10) |
Other Comprehensive Loss, Net: | ||||
Currency translation adjustments, net | (32) | 14 | (23) | 26 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Net of Tax | 0 | 0 | 5 | 0 |
Unrecognized gains (loss), net | (2) | 0 | (3) | 2 |
Changes in benefit plans, net | 3 | (1) | 3 | 0 |
Other Comprehensive Income (Loss), Net | (31) | 13 | (18) | 28 |
Comprehensive Loss, Net | ||||
Comprehensive Income (Loss), Net | $ (20) | $ 9 | $ (57) | $ 18 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Assets, Current [Abstract] | ||
Cash and cash equivalents | $ 993 | $ 658 |
Accounts receivable, net | 930 | 1,114 |
Assets Held-for-sale, Not Part of Disposal Group | 316 | 757 |
Contract with Customer, Asset, Net, Current | 193 | 0 |
Other current assets | 229 | 181 |
Total current assets | 2,661 | 2,710 |
Assets | ||
Land, buildings and equipment, net | 276 | 257 |
Intangible assets, net | 771 | 891 |
Goodwill | 3,424 | 3,366 |
Other long-term assets | 304 | 324 |
Total Assets | 7,436 | 7,548 |
Liabilities, Current [Abstract] | ||
Short-term debt and current portion of long-term debt | 43 | 82 |
Accounts payable | 158 | 138 |
Accrued compensation and benefits costs | 297 | 335 |
Unearned income | 129 | 151 |
Liabilities held for sale | 119 | 169 |
Other current liabilities | 567 | 493 |
Total current liabilities | 1,313 | 1,368 |
Long-term debt | 2,001 | 1,979 |
Deferred taxes | 346 | 384 |
Other long-term liabilities | 135 | 146 |
Total Liabilities | 3,795 | 3,877 |
Contingencies (See Note 11) | ||
Series A Convertible Preferred Stock | 142 | 142 |
Common Stock | 2 | 2 |
Additional paid-in-capital | 3,865 | 3,850 |
Retained earnings | 144 | 171 |
Accumulated other comprehensive loss | (512) | (494) |
Total Equity | 3,499 | 3,529 |
Total Liabilities and Equity | $ 7,436 | $ 7,548 |
Shares of common stock outstanding (in shares) | 210,528 | 210,440 |
Shares of series A convertible preferred stock outstanding (in shares) | 120 | 120 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | |
Cash Flows from Operating Activities: | ||||
Net income (loss) | $ 11 | $ (4) | $ (39) | $ (10) |
Adjustments required to reconcile net income (loss) to cash flows from operating activities: | ||||
Depreciation and amortization | 117 | 130 | 234 | 255 |
Deferred income taxes | (39) | (25) | (47) | (31) |
(Gain) loss from investments | 0 | (4) | (1) | (7) |
Amortization of debt financing costs | 6 | 2 | 8 | 4 |
(Gain) loss on divestitures and transaction costs | (60) | (25) | (45) | (32) |
Stock-based compensation | 12 | 12 | 19 | 18 |
(Increase) decrease in accounts receivable | 89 | 40 | 14 | (70) |
(Increase) decrease in other current and long-term assets | (46) | (13) | (95) | (47) |
Increase (decrease) in accounts payable and accrued compensation | 15 | (36) | (25) | (85) |
Increase (decrease) in restructuring liabilities | (3) | 21 | 4 | 24 |
Increase (decrease) in other current and long-term liabilities | (54) | (37) | (11) | (54) |
Net change in income tax assets and liabilities | 53 | 7 | 48 | (2) |
Other operating, net | (3) | (1) | (4) | (3) |
Net cash provided by (used in) operating activities | 98 | 67 | 60 | (40) |
Cash Flows from Investing Activities: | ||||
Cost of additions to land, buildings and equipment | (43) | (20) | (76) | (37) |
Proceeds from Sale of Property, Plant, and Equipment | 12 | 33 | 12 | 33 |
Cost of additions to internal use software | (8) | (7) | (14) | (15) |
Proceeds from Divestiture of Businesses | 400 | 0 | 400 | 0 |
Net cash provided by (used in) investing activities | 361 | 6 | 322 | (19) |
Cash Flows from Financing Activities: | ||||
Proceeds on long-term debt | 0 | 0 | 0 | 306 |
Debt issuance fee payments | (3) | (8) | (3) | (9) |
Payments on debt | (8) | (9) | (29) | (153) |
Net (payments to) transfer from former parent company | 0 | 0 | 0 | (161) |
Issuance of common stock related to employee stock plans | 1 | 0 | (3) | (2) |
Dividends paid on preferred stock | (3) | (3) | (5) | (5) |
Other financing | 0 | 1 | 0 | (1) |
Net cash provided by (used in) financing activities | (13) | (19) | (40) | (25) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (6) | 0 | (6) | 2 |
Increase (decrease) in cash, cash equivalents and restricted cash | 440 | 54 | 336 | (82) |
Cash, Cash Equivalents and Restricted Cash at Beginning of Period(1) | 563 | 280 | 667 | 416 |
Cash, Cash Equivalents and restricted Cash at End of period | 1,003 | 334 | 1,003 | 334 |
Restricted Cash, Current | $ 10 | $ 25 | $ 10 | $ 25 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation References herein to “we,” “us,” “our,” the “Company” and “Conduent” refer to Conduent Incorporated and its consolidated subsidiaries unless the context suggests otherwise. Description of Business The Company is a global enterprise and leading provider of business process services with expertise in managing operations involving high volume, repeatable and individualized interactions. The Company's portfolio covers both front office and back office operations; however, the majority of its revenue and differentiation derives from engagements where it serves on behalf of its clients to manage end-user interactions across a wide-range of domains. Examples include payments, collections, benefit administration and end-user communication services. The Company creates value for its commercial and government clients through more efficient service delivery combined with a personalized and seamless experience for the end-user. The Company applies its expertise, technology and innovation to continually modernize its offering for improved customer and constituent satisfaction and loyalty, increase process efficiency and respond rapidly to changing market dynamics. Basis of Presentation The unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). The year-end Condensed Consolidated Balance Sheet was derived from the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. Certain reclassifications have been made to prior year information to conform to current year presentation. Intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments necessary for a fair statement of the financial position, results of operations and cash flows have been made. These adjustments consist of normal recurring items. Interim results of operations are not necessarily indicative of the results of the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company's significant accounting policies are described in Note 1–Basis of Presentation and Summary of Significant Accounting Policies in the Company’s 2017 Annual Report on Form 10-K. Summarized below are the accounting pronouncements adopted subsequent to December 31, 2017 that were applicable and material to the Company. New Accounting Standards Adopted Revenue Recognition: In May 2014, the Financial Accounting Standards Board (FASB) updated the accounting guidance related to revenue recognition, which is also referred to herein as "new revenue standard" to clarify the principles for recognizing revenue and replaced all existing revenue recognition guidance in U.S. GAAP with one accounting model. The core principle of the guidance is that an entity should recognize revenue when the promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated guidance also requires additional qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers largely on a disaggregated basis. The Company adopted the new revenue standard as of January 1, 2018, using the modified retrospective method. The Company is applying the new revenue standard only to contracts not completed as of the date of initial application. The adoption has primarily impacted the following: (1) revenue associated with postage recognized on a net basis versus previously being recognized on a gross basis; (2) the timing of revenue recognition associated with fixed fees for certain contracts with more than one performance obligation; and (3) the timing of recognition of certain pricing discounts and credits. The Company recorded a net increase to opening retained earnings of $17 million as of January 1, 2018, due to the cumulative impact of adopting this new guidance. The comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods presented. The impact of the new revenue standard for the three and six months ended June 30, 2018 , was a decrease in Revenue of $32 million and $76 million , respectively, primarily as a result of recognizing postage receipts on a net basis, in the Company’s Condensed Consolidated Statements of Income (Loss). The impact of the new revenue standard, as of and for the periods ended June 30, 2018 , on the Company’s pre-tax income, Condensed Consolidated Balance Sheets and Statements of Cash Flows was not material. Summary of Accounting Policy Revenue recognition The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company's contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately, versus together, may require significant judgment. For instance, the Company may contract for an implementation or development project and also provide services to operate the system which the Company implements or develops over a period of time; or the Company may contract to scan, manage and store customer documents. For these contracts, the Company accounts for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company generally determines standalone selling prices based on the prices charged to customers or using expected cost plus margin. Once the Company determines the performance obligations, the Company estimates the amount of variable consideration, if any, to be included in determining the transaction price. The majority of the Company's contracts consist of fixed consideration, variable consideration or both. Typical forms of variable consideration include variable pricing such as volume discounts, tiered and declining pricing, penalties for service level agreements, performance bonuses and credits. The Company includes variable consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved. In order to determine the transaction price, the Company estimates the amount of variable consideration at the inception of the contract, either utilizing the expected value or the most likely amount method, depending on the facts and circumstances relative to the contract. The Company estimates variable consideration and performs a constraint analysis for these contracts on the basis of both historical information and current trends. The Company’s performance obligations are generally transferred to customers over time. Typically, the Company’s contracts include performance obligation(s) to stand-ready on a daily or monthly basis to provide services to the customers. A time-elapsed output method is used to measure progress because the Company transfers control evenly by providing a stand-ready service. In limited circumstances, the Company also uses a cost-to-cost based input method. The Company has determined that the above methods provide a faithful depiction of the transfer of services to the customer. Estimates of revenue expected to be recognized in future periods exclude unexercised customer options to purchase additional services that do not represent material rights to the customer. Customer options that do not represent a material right are only accounted for, in accordance with the new revenue standard, when the customer exercises its option to purchase additional goods or services. The Company recognizes revenue for non-refundable upfront implementation fees on a straight-line basis over the period between the initiation of the services through the end of the contract terms. When more than one party is involved in providing services to a customer, the Company evaluates whether it is the principal, and reports revenue on a gross basis, or an agent, and reports revenue on a net basis. In this assessment, the Company considers the following: if it obtains control of the specified services before they are transferred to the customer; is primarily responsible for fulfillment and inventory risk; and has discretion in establishing price. The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The primary revenue-based taxes are sales tax and value-added tax (VAT). The Company's payment terms vary by type of services offered. The time between invoicing and when payment is due is not significant. For certain services and customer types, the Company requires payment before services are rendered. From time to time, the Company's contracts are modified to account for additions or changes to existing performance obligations. The Company's contract modifications are generally accounted for prospectively. Disaggregation of Revenue During the second quarter, the Company changed how it presents the disaggregated revenue by major service line to reflect the core businesses separate from the non-core businesses. This change had no impact on disaggregated revenue by reportable segment or the timing of revenue recognition. The following table provides information about disaggregated revenue by major service line, the timing of revenue recognition and a reconciliation of the disaggregated revenue by reportable segments. Refer to Note 3 – Segment Reporting for additional information on the Company's reportable segments. (in millions) Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Commercial Industries: Omni-channel communications $ 199 $ 418 Human resource services 186 373 Industry services 240 490 Non-core 183 381 Total Commercial Industries 808 1,662 Public Sector: Government services and health 338 670 Transportation services 181 357 Non-core 55 105 Total Public Sector 574 1,132 Other: Education 5 13 Total Other 5 13 Total Consolidated Revenue $ 1,387 $ 2,807 Timing of Revenue Recognition: Point in time $ 34 $ 70 Over time 1,353 2,737 Total Revenue $ 1,387 $ 2,807 The Company's contracts with customers are broadly similar in nature throughout the Company's major service lines. The following is a description of the Company's major service lines from which the Company generates revenue. • Omni-Channel Communications: The Company offers a range of services that help its clients support their end-users. This includes in-bound and out-bound call support for both simple and complex transactions, technical support and patient assistance. The Company also provides multi-channel communication support (both print and digital) across a range of industries. • Human Resource Services: The Company helps its clients support their employees at all stages of employment from initial on-boarding through retirement as well as health savings account (HSA) administration. The Company offers clients a range of customized advisory, technology and administrative services that improve the ability of employees to manage their benefits, professional development and retirement planning. Also, the Company assists its clients with workers' compensation claims management. • Industry Services: The Company leverages technology to assist its clients with transaction processing as well as providing platform solutions. This includes offerings such as finance and accounting, transaction processing, learnings, legal and payment integrity services, among others. • Non-Core Commercial: This represents certain human resource services and customer experience businesses that are considered non-core and therefore are expected to be sold to allow management to increase its focus on the businesses for which we believe we have a competitive advantage. Certain of these businesses are included in Assets/liabilities held for sale. • Government Services and Health: The Company's services include public assistance program administration such as child support, pension administration, records management, electronic benefits, eligibility and payment cards, unclaimed property, disease management and software offerings in support of federal, state and local government agencies. The Company also provides payment services, which include prepaid cards, child support disbursements and other government support programs, disbursement of electronic payments directly to end users, collections and transfer of payments. • Transportation Services: The Company's services include support for electronic toll collection, public transit, parking and photo enforcement. • Non-Core Public: This represents certain transportation and state and local businesses that are considered non-core and therefore are expected to be sold to allow management to increase its focus on the businesses for which we believe we have a competitive advantage. Contract Balances The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets are the Company’s rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Contract assets are transferred to Accounts receivable when the rights become unconditional. Unearned income includes payments received in advance of performance under the contract, which are realized when the associated revenue is recognized under the contract. The following table provides information about the balances of the Company's contract assets, unearned income and receivables from contracts with customers: (in millions) June 30, 2018 January 1, 2018 Contract Assets (Unearned Income) Current contract assets (1) $ 193 $ 191 Long-term contract assets (2) 13 2 Current unearned income (129 ) (128 ) Long-term unearned income (3) (39 ) (46 ) Net Contract Assets (Unearned Income) $ 38 $ 19 Accounts receivable, net $ 930 $ 908 __________ (1) Prior to the adoption of the new revenue standard, these amounts were recorded in Accounts receivable, net and represented unbilled amounts. (2) Presented in Other long-term assets in the Condensed Consolidated Balance Sheets (3) Presented in Other long-term liabilities in the Condensed Consolidated Balance Sheets Revenues of $98 million and $181 million were recognized during the three and six months ended June 30, 2018 , respectively, related to the Company's unearned income at January 1, 2018. The Company had no asset impairment charges related to contract assets for the three and six months ended June 30, 2018 . Transaction Price Allocated to the Remaining Performance Obligations Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at June 30, 2018 , was approximately $2.4 billion . The Company expects to recognize approximately 66% of the revenues over the next two years and the remainder thereafter. Costs to Obtain and Fulfill a Contract The Company capitalizes commission expenses paid to internal sales personnel that are incremental to obtaining customer contracts. The net book value of these costs, which was $28 million as of June 30, 2018 , are included in Other current assets or Other long-term assets. The judgments made in determining the amount of costs incurred include whether the commissions are incremental and directly related to a successful acquisition of a customer contract. These costs are amortized in Selling, general and administrative costs over the term of the contract or the estimated life of the customer relationship, if renewals are expected and the renewal commission is not commensurate with the initial commission. These costs are periodically reviewed for impairment. The Company expenses sales commissions when incurred if the amortization period of the sales commission is one year or less. Also, the Company capitalizes costs incurred to fulfill its contracts that (i) relate directly to the contract (ii) are expected to generate resources that will be used to satisfy the Company’s performance obligation under the contract and (iii) are expected to be recovered through revenue generated under the contract. The net book value of these costs, which comprise set-up/transition activities, was $58 million as of June 30, 2018 , and are classified in Other current assets or Other long-term assets on the Condensed Consolidated Balance Sheets. Contract fulfillment costs are expensed to Cost of services as the Company satisfies its performance obligations by transferring the service to the customer. These costs are amortized on a systematic basis over the expected period of benefit. The amounts of amortization of cost incurred to obtain and fulfill a contract for the three and six months ended June 30, 2018 , were $13 million and $27 million , respectively. Cash Flows: In November 2016, the FASB issued updated accounting guidance regarding the presentation of restricted cash in the Condensed Consolidated Statements of Cash Flows. Specifically, this update requires that restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Condensed Consolidated Statements of Cash Flows. The Company adopted this updated accounting guidance on January 1, 2018 using the retrospective method. The revision to prior year Condensed Consolidated Statements of Cash Flows from the adoption of this guidance was a reclassification in the Condensed Consolidated Statements of Cash Flows of $25 million of restricted cash to cash, cash equivalents and restricted cash. New Accounting Standards To Be Adopted Leases: In February 2016, the FASB updated the accounting guidance related to leases requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases except short term leases (lease term of 12 months or less). The accounting for lessors is largely unchanged. This updated guidance is effective for us beginning January 1, 2019. This guidance must be adopted using a modified retrospective approach through a cumulative-effect adjustment for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. While we are currently evaluating the impact on the Company's Consolidated Financial Statements, we do expect a material impact to the Consolidated Balance Sheets. Credit Losses: In June 2016, the FASB updated the accounting guidance related to measurement of credit losses on financial instruments, which requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. This updated guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact on the Company's Consolidated Financial Statements. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company's reportable segments correspond to how we organize and manage the business and are aligned to the industries in which our clients operate. Beginning in 2018, the Company moved the Health Enterprise business from the Other segment into the Public Sector segment. In addition, the Company moved the historical results of the divested businesses to the Other segment from both the Commercial Industries and the Public Sector segments. The prior periods presented have been revised to reflect these changes. Our financial performance is based on Segment Profit / (Loss) and Segment Adjusted EBITDA for the following two segments: • Commercial Industries • Public Sector Commercial Industries: Our Commercial Industries segment provides business process services and customized solutions to clients in a variety of industries. Across the Commercial Industries segment, we deliver end-to-end business-to-business and business-to-customer services that enable our clients to optimize their key processes. Our multi-industry competencies include omni-channel communications, human resource management and finance and accounting services. Public Sector: Our Public Sector segment provides government-centric business process services to U.S. federal, state and local and foreign governments for transportation, public assistance, program administration, transaction processing, Medicaid platform and payment services. Other segment includes businesses divested in 2017 and our Student Loan business, which is in run-off mode. The Company expects to exit the Student Loan business in the third quarter of 2018. In the third quarter of 2018 and beyond, any remaining costs for Student Loans will be reflected in Other (income) expenses, net. Selected financial information for our reportable segments is as follows: Three Months Ended June 30, (in millions) Commercial Industries Public Sector Other Total 2018 Revenue $ 808 $ 574 $ 5 $ 1,387 Segment profit (loss) $ 47 $ 68 $ (5 ) $ 110 Segment depreciation and amortization $ 33 $ 24 $ — $ 57 Adjusted EBITDA (1) $ 80 $ 91 $ (5 ) $ 166 2017 Revenue $ 856 $ 598 $ 42 $ 1,496 Segment profit (loss) $ 33 $ 52 $ 2 $ 87 Segment depreciation and amortization $ 38 $ 29 $ 2 $ 69 Adjusted EBITDA (2) $ 71 $ 82 $ 4 $ 157 Six Months Ended June 30, (in millions) Commercial Industries Public Sector Other Total 2018 Revenue $ 1,662 $ 1,132 $ 13 $ 2,807 Segment profit (loss) $ 91 $ 133 $ (9 ) $ 215 Segment depreciation and amortization $ 67 $ 46 $ — $ 113 Adjusted EBITDA (1) $ 158 $ 178 $ (9 ) $ 327 2017 Revenue $ 1,751 $ 1,207 $ 91 $ 3,049 Segment profit (loss) $ 59 $ 109 $ 5 $ 173 Segment depreciation and amortization $ 74 $ 56 $ 3 $ 133 Adjusted EBITDA (2) $ 133 $ 169 $ 8 $ 310 __________ (1) 2018 Adjusted EBITDA for Public Sector does not include $1 million of NY MMIS settlement for the three and six months, respectively. (2) 2017 Adjusted EBITDA for Public Sector does not include $1 million and $4 million of net NY MMIS and HE charge for the three and six months, respectively. (in millions) Three Months Ended June 30, Six Months Ended June 30, Segment Profit (Loss) Reconciliation to Pre-tax Income (Loss) 2018 2017 2018 2017 Income (Loss) Before Income Taxes $ 54 $ (11 ) $ — $ (33 ) Reconciling items: Restructuring and related costs 17 36 37 54 Amortization of acquired intangible assets 60 61 121 122 Separation costs — 1 — 6 Interest expense 37 34 70 70 (Gain) loss on divestitures and transaction costs (60 ) (25 ) (45 ) (25 ) Litigation costs (recoveries), net 4 (9 ) 35 (20 ) Other (income) expenses, net (2 ) — (3 ) (1 ) Segment Pre-tax Income (Loss) $ 110 $ 87 $ 215 $ 173 Segment depreciation and amortization $ 57 $ 69 $ 113 $ 133 NY MMIS (1 ) 1 (1 ) 9 HE charge — — — (5 ) Adjusted EBITDA $ 166 $ 157 $ 327 $ 310 |
Assets_Liabilities Held for Sal
Assets/Liabilities Held for Sale | 6 Months Ended |
Jun. 30, 2018 | |
Divestitures [Abstract] | |
Assets/Liabilities Held for Sale | Assets/Liabilities Held for Sale As of June 30, 2018 and December 31, 2017, there were certain businesses that qualified as assets/liabilities held for sale due to plans for disposal through sale. These assets/liabilities held for sale include a mix of both Commercial Industries and Public Sector that represent businesses in markets or with services that the Company did not see as strategic or core. The following is a summary of the major categories of assets and liabilities that have been reclassified to held for sale. (in millions) June 30, 2018 December 31, 2017 Accounts Receivable, net $ 89 $ 160 Other current assets 12 41 Contract assets 4 — Land, building and equipment, net 4 6 Product Software, net 5 3 Intangible assets, net 6 7 Goodwill 186 537 Other long-term assets 10 3 Total Assets held for sale $ 316 $ 757 Accounts payable $ 3 $ 9 Accrued compensation 16 20 Unearned revenue 25 30 Other current liabilities 21 53 Pension and other benefit obligations 49 50 Other long-term liabilities 5 7 Total Liabilities held for sale $ 119 $ 169 In June 2018, the Company completed the sale of its Commercial Vehicle Operations business to Alinda Capital Partners. The aggregate proceeds from this divestiture was $400 million in cash and the transaction generated a pre-tax gain of $74 million . The revenue generated from this business was $33 million for the six months ended June 30, 2018 and $66 million for the year ended December 31, 2017. |
Restructuring Programs
Restructuring Programs | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Programs | Restructuring Programs and Related Costs The Company engages in a series of restructuring programs related to downsizing its employee base, exiting certain activities, outsourcing certain internal functions and engaging in other actions designed to reduce its cost structure and improve productivity. The implementation of the Company's strategic transformation program and various productivity initiatives have reduced the Company's real estate footprint across all geographies and segments resulting in increased lease cancellation and other related costs. Management continues to evaluate the Company's business; therefore, in future years, there may be additional provisions for new plan initiatives, as well as changes in previously recorded estimates, as payments are made or actions are completed. Costs associated with restructuring, including employee severance and lease termination costs, are generally recognized when it has been determined that a liability has been incurred, which is generally upon communication to the affected employees or exit from the leased facility. In those geographies where we have either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan, we recognize employee severance costs when they are both probable and reasonably estimable. A summary of the Company's restructuring program activity during the six months ended June 30, 2018 and 2017 was as follows: (in millions) Severance and Related Costs Lease Cancellation and Other Costs Total Accrued Balance at December 31, 2017 $ 14 $ 30 $ 44 Restructuring provision 21 17 38 Adjustments to prior accruals (2 ) — (2 ) Total Net Current Period Charges 19 17 36 Payments against reserve and currency (19 ) (16 ) (35 ) Liabilities held for sale — 3 3 Accrued Balance at June 30, 2018 $ 14 $ 34 $ 48 (in millions) Severance and Related Costs Lease Cancellation and Other Costs Total Accrued Balance at December 31, 2016 $ 15 $ 6 $ 21 Restructuring provision 28 17 45 Adjustments to prior accruals 1 — 1 Total Net Current Period Charges 29 17 46 Payments against reserve and currency (19 ) (6 ) (25 ) Accrued Balance at June 30, 2017 $ 25 $ 17 $ 42 In addition, the Company recorded professional support costs associated with the strategic transformation program in Restructuring and related costs of $1 million and $8 million for the six months ended June 30, 2018 and 2017 , respectively. The following table summarizes the total amount of costs incurred in connection with these restructuring programs by segment: Three Months Ended Six Months Ended (in millions) 2018 2017 2018 2017 Commercial Industries $ 12 $ 22 $ 27 $ 31 Public Sector 5 11 8 14 Other — 1 1 1 Total Net Restructuring Charges $ 17 $ 34 $ 36 $ 46 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt was as follows: (in millions) June 30, 2018 December 31, 2017 Term loan A due 2022 $ 709 $ 732 Term loan B due 2023 837 842 Senior notes due 2024 510 510 Capital lease obligations 36 33 Principal debt balance 2,092 2,117 Debt issuance costs and unamortized discounts (48 ) (56 ) Less: current maturities (43 ) (82 ) Total Long-term Debt $ 2,001 $ 1,979 Loans Repricing On June 28, 2018, the Company entered into Amendment No. 3 (Amendment) to the December 7, 2016 Credit Agreement, which (i) extended the revolving credit maturity from December 7, 2021 to December 7, 2022 and reduced the interest rate on the revolving credit by 0.5% from 2.25% over LIBOR to 1.75% over LIBOR; (ii) extended the maturity date of the Term A Loans from December 7, 2021 to December 7, 2022 and reduced the interest rate by 0.5% from 2.25% over LIBOR to 1.75% over LIBOR, and (iii) reduced the interest rate on the Term B Loans by 0.5% from 3.0% over LIBOR to 2.5% over LIBOR. These transactions resulted in a write-off of unamortized discount and issuance costs of $3 million . |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments The Company is a global company that is exposed to foreign currency exchange rate fluctuations in the normal course of its business. As a part of the Company's foreign exchange risk management strategy, the Company uses derivative instruments, primarily forward contracts, to hedge the funding of foreign entities which have a non-dollar functional currency, thereby reducing volatility of earnings or protecting fair values of assets and liabilities. At June 30, 2018 and December 31, 2017 , the Company had outstanding forward exchange contracts with gross notional values of approximately $136 million and $160 million , respectively. Approximately 60% of these contracts mature within three months, 15% in three to six months, 19% in six to twelve months and 6% in greater than twelve months. The majority of these foreign currency derivative contracts are designated as cash flow hedges and did not have a material impact on the Company's balance sheet, income statement or cash flows for the periods presented. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP established a hierarchy framework to classify the fair value base on the observability of significant inputs to the measurement. The levels of the fair value hierarchy are as follows: Level 1: Fair value is determined using an unadjusted quoted price in an active market for identical assets or liabilities. Level 2: Fair value is estimated using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. Level 3: Fair value is estimated using unobservable inputs that are significant to the fair value of the assets or liabilities. The following table represents assets and liabilities measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases is Level 2. (in millions) June 30, 2018 December 31, 2017 Assets: Foreign exchange contract - forward $ — $ 2 Total Assets $ — $ 2 Liabilities: Foreign exchange contracts - forwards $ 3 $ 1 Deferred compensation plan liabilities (1) 90 99 Total Liabilities $ 93 $ 100 ___________ (1) In September 2017, the Company terminated the legacy deferred compensation plans (Plans) and the Company Owned Life Insurance (COLI), which held the Plans’ investments. The Company will make payments to Plan participants during the remainder of 2018. Summary of Other Financial Assets and Liabilities Accounted at Fair Value on a Nonrecurring Basis The estimated fair values of our other financial assets and liabilities not measured at fair value on a recurring basis were as follows: June 30, 2018 December 31, 2017 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt 2,001 2,100 1,979 2,070 The fair value amounts for Cash and cash equivalents, Restricted cash, Accounts receivable, net and Short-term debt approximate carrying amounts due to the short-term maturities of these instruments. The fair value of Long-term debt was estimated based on the current rates offered to the Company for debt of similar maturities (Level 2). |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company recognized an expense related to its defined contribution plans of $7 million and $9 million for the three months ended June 30, 2018 and 2017 , respectively, and $16 million and $19 million for the six months ended June 30, 2018 and 2017 , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss (AOCL) | 6 Months Ended |
Jun. 30, 2018 | |
Other Comprehensive Income (Loss) [Abstract] | |
Accumulated Other Comprehensive Loss (AOCL) | Accumulated Other Comprehensive Loss (AOCL) AOCL is comprised of the following: (in millions) June 30, 2018 December 31, 2017 Cumulative currency translation adjustments $ (455 ) $ (437 ) Other unrealized gains (losses), net (2 ) 1 Benefit plans net actuarial losses and prior service credits (55 ) (58 ) Total Accumulated Other Comprehensive Loss $ (512 ) $ (494 ) |
Contingencies and Litigation
Contingencies and Litigation | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Litigation | Contingencies and Litigation As more fully discussed below, the Company is involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities law; governmental entity contracting, servicing and procurement law; intellectual property law; environmental law; employment law; commercial and contracts law; the Employee Retirement Income Security Act (ERISA); and other laws and regulations. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing its litigation and regulatory matters using available information. The Company develops its view on estimated losses in consultation with outside counsel handling its defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in the Company's determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts, in excess of any accrual for such matter or matters, this could have a material adverse effect on the Company's results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs. The Company believes it has recorded adequate provisions for any such matters as of June 30, 2018 . Litigation is inherently unpredictable, and it is not possible to predict the ultimate outcome of these matters and such outcome in any such matters could be in excess of any amounts accrued and could be material to the Company's results of operations, cash flows or financial position in any reporting period. Additionally, guarantees, indemnifications and claims arise during the ordinary course of business from relationships with suppliers, customers and non-consolidated affiliates when the Company undertakes an obligation to guarantee the performance of others if specified triggering events occur. Nonperformance under a contract could trigger an obligation of the Company. These potential claims include actions based upon alleged exposures to products, real estate, intellectual property such as patents, environmental matters and other indemnifications. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these claims. However, while the ultimate liabilities resulting from such claims may be significant to results of operations in the period recognized, management does not anticipate they will have a material adverse effect on the condensed consolidated financial position or liquidity. As of June 30, 2018 , the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees. Litigation Against the Company State of Texas v. Xerox Corporation, Conduent Business Services, LLC (f/k/a Xerox Business Services, LLC), Conduent State Healthcare, LLC (f/k/a Xerox State Healthcare, LLC, f/k/a ACS State Healthcare, LLC) and Conduent Incorporated: On May 9, 2014, the State of Texas, via the Texas Office of Attorney General (the “State”), filed a lawsuit in the 53rd Judicial District Court of Travis County, Texas. The lawsuit alleges that Xerox Corporation, Xerox State Healthcare, LLC and ACS State Healthcare (collectively, the "Xerox Defendants") violated the Texas Medicaid Fraud Prevention Act in the administration of its contract with the Texas Department of Health and Human Services (“HHSC”). The State alleges that the Xerox Defendants made false representations of material facts regarding the processes, procedures, implementation and results regarding the prior authorization of orthodontic claims. The State seeks recovery of amounts paid for orthodontic treatment under the Texas Medicaid program for the period from approximately 2004 to 2012, three times the amount of the payments made as a result of the alleged unlawful acts, civil penalties, pre- and post-judgment interest and all costs and attorneys’ fees. The Xerox Defendants filed their Answer in June, 2014 denying all allegations. A trial date is schedule for November, 2018. During the first quarter of 2018, the State notified the Xerox Defendants in the litigation discovery process that its claim is in excess of two billion dollars based primarily on the assertion of treble damages and civil penalties per illegal act for almost two hundred thousand purported illegal acts. The Xerox Defendants will forcefully contest this assertion and continue to vigorously defend themselves in this matter. During the second quarter of 2018, the trial date was rescheduled for May, 2019. We are not able to determine or predict the ultimate outcome of this proceeding or to estimate any reasonably possible loss or range of losses, if any, in excess of the thirty-eight million dollars the Company has already accrued. In the course of litigation, the Company periodically engages in discussions with the State's counsel for possible resolution of the matter. Should developments cause a change in the Company's determination as to an unfavorable outcome, or result in a final adverse judgment or settlement for a significant amount, there could be a material adverse effect on the Company's results of operations, cash flows and financial position in the period in which such change in determination, judgment or settlement occurs. Dennis Nasrawi v. Buck Consultants et al.: On October 8, 2009, plaintiffs filed a lawsuit in the Superior Court of California, Stanislaus County, and on November 24, 2009, the case was removed to the U.S. Court for the Eastern District of California, Fresno Division. Plaintiffs allege actuarial negligence against Buck Consultants, LLC (“Buck”), a wholly-owned subsidiary of Conduent, for the use of faulty actuarial assumptions in connection with the 2007 actuarial valuation for the Stanislaus County Employees Retirement Association (“StanCERA”). Plaintiffs allege that the employer contribution rate adopted by StanCERA based on Buck’s valuation was insufficient to fund the benefits promised by the County. On July 13, 2012, the Court entered its ruling that the plaintiffs lacked standing to sue in a representative capacity on behalf of all plan participants. The Court also ruled that plaintiffs had adequately pleaded their claim that Buck allegedly aided and abetted StanCERA in breaching its fiduciary duty. Plaintiffs then filed their Fifth Amended Complaint and added StanCERA to the litigation. Buck and StanCERA filed demurrers to the amended complaint. On September 13, 2012, the Court sustained both demurrers with prejudice, completely dismissing the matter and barring plaintiffs from refiling their claims. Plaintiffs appealed, and ultimately the California Court of Appeals (Sixth District) reversed the trial court’s ruling and remanded the case back to the trial court. This case has been stayed pending the outcome of parallel litigation the plaintiffs are pursuing against StanCERA. Buck will continue to aggressively defend these lawsuits. The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any. Conduent Business Services, LLC v. Cognizant Business Services, LLC: On April 12, 2017, Conduent Business Services LLC (“Conduent”) filed a lawsuit against Cognizant Business Services Corporation (“Cognizant”) in the Supreme Court of New York County, New York. The lawsuit relates to the Amended and Restated Master Outsourcing Services Agreement effective as of October 24, 2012, and the service delivery contracts and work orders thereunder, between Conduent and Cognizant, as amended and supplemented (the “Contract”). The Contract contains certain minimum purchase obligations by Conduent through the date of expiration. The lawsuit alleges that Cognizant committed multiple breaches of the Contract, including Cognizant’s failure to properly perform its obligations as subcontractor to Conduent under Conduent’s contract with the New York Department of Health to provide a Medicaid Management Information Systems (the “NY MMIS Contract”). In the lawsuit, Conduent seeks damages in excess of one hundred fifty million dollars . During the first quarter of 2018, Conduent provided notice to Cognizant that it was terminating the Contract for cause and recorded in the same period certain charges associated with the termination. Cognizant has asserted counterclaims against Conduent in the lawsuit seeking damages in excess of twenty-two million dollars . Conduent has responded to Cognizant’s counterclaims by denying the allegations. Conduent will continue to vigorously defend itself against the counterclaims but the Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome. Other Matters On January 5, 2016, the Consumer Financial Protection Bureau (the "CFPB") notified Xerox Education Services, Inc. (XES) that, in accordance with the CFPB’s discretionary Notice and Opportunity to Respond and Advise (NORA) process, the CFPB’s Office of Enforcement is considering recommending that the CFPB take legal action against XES, alleging that XES violated the Consumer Financial Protection Act’s prohibition of unfair practices. Should the CFPB commence an action, it may seek restitution, civil monetary penalties, injunctive relief, or other corrective action. The purpose of a NORA letter is to provide a party being investigated an opportunity to present its position to the CFPB before an enforcement action is recommended or commenced. XES submitted its response to the NORA. The CFPB’s NORA stems from an inquiry that commenced in 2014 when XES received and responded to a CFPB Civil Investigative Demand containing a broad request for information. During this process, XES self-disclosed to the U.S. Department of Education (the "Department") and the CFPB certain adjustments of which it had become aware that had not been timely made relating to its servicing of a small percentage of third-party student loans under outsourcing arrangements for various financial institutions. The CFPB, the U.S. Department of Education, the U.S. Department of Justice, the New York Office of the Attorney General, the New York Department of Financial Services and the Massachusetts Office of the Attorney General began similar reviews. XES has cooperated and continues to fully cooperate with all regulatory agencies and resolved the Massachusetts Office of the Attorney General investigation in November 2016. Both as a result of these inquiries, its own reviews of operations and work performed by external auditors, XES has identified certain other operational issues requiring remediation, and this remediation work has commenced. XES continues to review its operations to determine whether any additional remediation work is necessary. XES disclosed these additional operational projects to the Department at the end of the second quarter of 2018 and is working with the Department to develop plans to complete these projects while XES exits the business. The Company cannot provide assurance that the CFPB or another regulator or party will not ultimately commence a legal action against XES in which fines, penalties or other liabilities are sought from XES, nor is the Company able to predict the likely outcome of these investigations. The Company could in future periods incur judgments or enter into settlements to resolve these investigations for amounts in excess of current reserves and there could be a material adverse effect on the Company's results of operations, cash flows and financial position in the period in which such change in judgment or settlement occurs. Other Contingencies Certain contracts, primarily in the Company's Public Sector segment, require the Company to provide a surety bond or a letter of credit as a guarantee of performance. As of June 30, 2018 , the Company had $635 million of outstanding surety bonds used to secure its performance of contractual obligations with its clients and $339 million of outstanding letters of credit issued to secure the Company's performance of contractual obligations to its clients as well as other corporate obligations. In general, the Company would only be liable for the amount of these guarantees in the event of default in the Company's performance of its obligations under each contract. The Company believes it has sufficient capacity in the surety markets and liquidity from its cash flow and its various credit arrangements (including its Credit Facility) to allow it to respond to future requests for proposals that require such credit support. The Company has service arrangements where the Company services third-party student loans in the Federal Family Education Loan program (FFEL) on behalf of various financial institutions. At July 31 2018, the Company serviced a FFEL portfolio of approximately 14,500 loans. Some servicing agreements contain provisions that, under certain circumstances, require the Company to purchase the loans if the loan guaranty has been permanently terminated as a result of a loan default caused by the Company's servicing error. If defaults caused by the Company are cured during an initial period, any obligation the Company may have to purchase these loans expires. Loans that the Company purchases may be subsequently cured, the guaranty reinstated and the loans repackaged for sale to third parties. The Company evaluates its exposure under its purchase obligations on defaulted loans and establishes a reserve for potential losses. The reserve is evaluated periodically and adjusted based upon management’s analysis of the historical performance of the defaulted loans. As of June 30, 2018 , Other current liabilities included reserves of approximately $0.3 million , which the Company believes to be adequate. In addition to potential purchase obligations arising from servicing errors, various laws and regulations applicable to student loan borrowers could give rise to fines, penalties and other liabilities associated with loan servicing errors. |
Preferred Stock (Notes)
Preferred Stock (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Preferred Stock | Preferred Stock Series A Preferred Stock In December 2016, the Company issued 120 thousand shares of Series A convertible perpetual preferred stock with an aggregate liquidation preference of $120 million and an initial fair value of $142 million . The convertible preferred stock pays quarterly cash dividends at a rate of 8% per year ( $9.6 million per year). Each share of convertible preferred stock is convertible at any time, at the option of the holder, into 44.9438 shares of common stock for a total of 5,393 thousand shares (reflecting an initial conversion price of approximately $22.25 per share of common stock), subject to customary anti-dilution adjustments. |
Shareholder's Equity (Notes)
Shareholder's Equity (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Shareholders’ Equity (in millions) Common Stock Additional Paid-in Capital Retained Earnings AOCL Conduent Shareholders' Equity Balance at December 31, 2017 $ 2 $ 3,850 $ 171 $ (494 ) $ 3,529 Comprehensive income (loss), net — — (39 ) (18 ) (57 ) Cash dividends paid - preferred stock — — (5 ) — (5 ) Cumulative impact of adopting the new revenue standard — — 17 — 17 Stock option and incentive plans, net — 15 — — 15 Balance at June 30, 2018 $ 2 $ 3,865 $ 144 $ (512 ) $ 3,499 (in millions) Common Stock Additional Paid-in Capital Retained Earnings AOCL Conduent Shareholders' Equity Balance at December 31, 2016 $ 2 $ 3,812 $ — $ (526 ) $ 3,288 Comprehensive income (loss), net — — (10 ) 28 18 Cash dividends paid - preferred stock — — (5 ) — (5 ) Stock option and incentive plans, net — 16 — — 16 Balance at June 30, 2017 $ 2 $ 3,828 $ (15 ) $ (498 ) $ 3,317 |
Earnings per Share (Notes)
Earnings per Share (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per Share We did not declare any common stock dividends in the periods presented. The following table sets forth the computation of basic and diluted earnings per share of common stock: Three Months Ended Six Months Ended (in millions, except per share data. Shares in thousands) 2018 2017 2018 2017 Basic Earnings (Loss) per Share: Net income (loss) from continuing operations $ 11 $ (4 ) $ (39 ) $ (14 ) Accrued dividends on preferred stock (3 ) (3 ) (5 ) (5 ) Adjusted Net Income (Loss) From Continuing Operations Available to Common Shareholders 8 (7 ) (44 ) (19 ) Net income (loss) from discontinued operations — — — 4 Adjusted Net Income (Loss) Available to Common Shareholders $ 8 $ (7 ) $ (44 ) $ (15 ) Weighted average common shares outstanding 205,296 203,673 205,184 203,522 Basic Earnings (Loss) per Share: Continuing operations $ 0.05 $ (0.03 ) $ (0.21 ) $ (0.09 ) Discontinued operations — — — 0.02 Basic Earnings (Loss) per Share $ 0.05 $ (0.03 ) $ (0.21 ) $ (0.07 ) Diluted Earnings (Loss) per Share: Net income (loss) from continuing operations $ 11 $ (4 ) $ (39 ) $ (14 ) Accrued dividends on preferred stock (3 ) (3 ) (5 ) (5 ) Adjusted Net Income (Loss) From Continuing Operations Available to Common Shareholders 8 (7 ) (44 ) (19 ) Net income (loss) from discontinued operations — — — 4 Adjusted Net Income (Loss) Available to Common Shareholders $ 8 $ (7 ) $ (44 ) $ (15 ) Weighted average common shares outstanding 205,296 203,673 205,184 203,522 Common shares issuable with respect to: Stock options 146 — — — Restricted stock and performance units / shares 3,447 — — — Adjusted Weighted Average Common Shares Outstanding 208,889 203,673 205,184 203,522 Diluted Earnings (Loss) per Share: Continuing operations $ 0.04 $ (0.03 ) $ (0.21 ) $ (0.09 ) Discontinued operations — — — 0.02 Diluted Earnings (Loss) per Share $ 0.04 $ (0.03 ) $ (0.21 ) $ (0.07 ) The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands): Stock Options — 628 295 628 Restricted stock and performance shares/units 201 8,538 6,329 8,538 Convertible preferred stock 5,393 5,393 5,393 5,393 Total Anti-Dilutive Securities 5,594 14,559 12,017 14,559 |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In August 2018, the Company announced that it has entered into an agreement (subject to regulatory approval) to sell its local and municipal constituent government software solutions business to Avenu Insights & Analytics. The revenue generated from this business was $55 million for the six months ended June 30, 2018 and $113 million for the year ended December 31, 2017. In July 2018, the Company completed the sale of its off-street parking business, including the Multipark System in France and the United Kingdom (U.K.), along with its U.S. Airport Parking business to Andera Partners. The proceeds from this divestiture was $24 million in cash. The revenue generated from this business was $18 million for the six months ended June 30, 2018 and $42 million for the year ended December 31, 2017. In July 2018, the Company redeemed $476 million of its outstanding $510 million 10.5% Senior Notes due 2024. As part of the redemption, the Company paid a premium of $95 million and will write off the associated unamortized discount and issuance costs of $13 million . |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent accounting pronouncements | New Accounting Standards Adopted Revenue Recognition: In May 2014, the Financial Accounting Standards Board (FASB) updated the accounting guidance related to revenue recognition, which is also referred to herein as "new revenue standard" to clarify the principles for recognizing revenue and replaced all existing revenue recognition guidance in U.S. GAAP with one accounting model. The core principle of the guidance is that an entity should recognize revenue when the promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated guidance also requires additional qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers largely on a disaggregated basis. The Company adopted the new revenue standard as of January 1, 2018, using the modified retrospective method. The Company is applying the new revenue standard only to contracts not completed as of the date of initial application. The adoption has primarily impacted the following: (1) revenue associated with postage recognized on a net basis versus previously being recognized on a gross basis; (2) the timing of revenue recognition associated with fixed fees for certain contracts with more than one performance obligation; and (3) the timing of recognition of certain pricing discounts and credits. The Company recorded a net increase to opening retained earnings of $17 million as of January 1, 2018, due to the cumulative impact of adopting this new guidance. The comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods presented. The impact of the new revenue standard for the three and six months ended June 30, 2018 , was a decrease in Revenue of $32 million and $76 million , respectively, primarily as a result of recognizing postage receipts on a net basis, in the Company’s Condensed Consolidated Statements of Income (Loss). The impact of the new revenue standard, as of and for the periods ended June 30, 2018 , on the Company’s pre-tax income, Condensed Consolidated Balance Sheets and Statements of Cash Flows was not material. Summary of Accounting Policy Revenue recognition The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company's contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately, versus together, may require significant judgment. For instance, the Company may contract for an implementation or development project and also provide services to operate the system which the Company implements or develops over a period of time; or the Company may contract to scan, manage and store customer documents. For these contracts, the Company accounts for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company generally determines standalone selling prices based on the prices charged to customers or using expected cost plus margin. Once the Company determines the performance obligations, the Company estimates the amount of variable consideration, if any, to be included in determining the transaction price. The majority of the Company's contracts consist of fixed consideration, variable consideration or both. Typical forms of variable consideration include variable pricing such as volume discounts, tiered and declining pricing, penalties for service level agreements, performance bonuses and credits. The Company includes variable consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved. In order to determine the transaction price, the Company estimates the amount of variable consideration at the inception of the contract, either utilizing the expected value or the most likely amount method, depending on the facts and circumstances relative to the contract. The Company estimates variable consideration and performs a constraint analysis for these contracts on the basis of both historical information and current trends. The Company’s performance obligations are generally transferred to customers over time. Typically, the Company’s contracts include performance obligation(s) to stand-ready on a daily or monthly basis to provide services to the customers. A time-elapsed output method is used to measure progress because the Company transfers control evenly by providing a stand-ready service. In limited circumstances, the Company also uses a cost-to-cost based input method. The Company has determined that the above methods provide a faithful depiction of the transfer of services to the customer. Estimates of revenue expected to be recognized in future periods exclude unexercised customer options to purchase additional services that do not represent material rights to the customer. Customer options that do not represent a material right are only accounted for, in accordance with the new revenue standard, when the customer exercises its option to purchase additional goods or services. The Company recognizes revenue for non-refundable upfront implementation fees on a straight-line basis over the period between the initiation of the services through the end of the contract terms. When more than one party is involved in providing services to a customer, the Company evaluates whether it is the principal, and reports revenue on a gross basis, or an agent, and reports revenue on a net basis. In this assessment, the Company considers the following: if it obtains control of the specified services before they are transferred to the customer; is primarily responsible for fulfillment and inventory risk; and has discretion in establishing price. The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The primary revenue-based taxes are sales tax and value-added tax (VAT). The Company's payment terms vary by type of services offered. The time between invoicing and when payment is due is not significant. For certain services and customer types, the Company requires payment before services are rendered. From time to time, the Company's contracts are modified to account for additions or changes to existing performance obligations. The Company's contract modifications are generally accounted for prospectively. Disaggregation of Revenue During the second quarter, the Company changed how it presents the disaggregated revenue by major service line to reflect the core businesses separate from the non-core businesses. This change had no impact on disaggregated revenue by reportable segment or the timing of revenue recognition. The following table provides information about disaggregated revenue by major service line, the timing of revenue recognition and a reconciliation of the disaggregated revenue by reportable segments. Refer to Note 3 – Segment Reporting for additional information on the Company's reportable segments. (in millions) Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Commercial Industries: Omni-channel communications $ 199 $ 418 Human resource services 186 373 Industry services 240 490 Non-core 183 381 Total Commercial Industries 808 1,662 Public Sector: Government services and health 338 670 Transportation services 181 357 Non-core 55 105 Total Public Sector 574 1,132 Other: Education 5 13 Total Other 5 13 Total Consolidated Revenue $ 1,387 $ 2,807 Timing of Revenue Recognition: Point in time $ 34 $ 70 Over time 1,353 2,737 Total Revenue $ 1,387 $ 2,807 The Company's contracts with customers are broadly similar in nature throughout the Company's major service lines. The following is a description of the Company's major service lines from which the Company generates revenue. • Omni-Channel Communications: The Company offers a range of services that help its clients support their end-users. This includes in-bound and out-bound call support for both simple and complex transactions, technical support and patient assistance. The Company also provides multi-channel communication support (both print and digital) across a range of industries. • Human Resource Services: The Company helps its clients support their employees at all stages of employment from initial on-boarding through retirement as well as health savings account (HSA) administration. The Company offers clients a range of customized advisory, technology and administrative services that improve the ability of employees to manage their benefits, professional development and retirement planning. Also, the Company assists its clients with workers' compensation claims management. • Industry Services: The Company leverages technology to assist its clients with transaction processing as well as providing platform solutions. This includes offerings such as finance and accounting, transaction processing, learnings, legal and payment integrity services, among others. • Non-Core Commercial: This represents certain human resource services and customer experience businesses that are considered non-core and therefore are expected to be sold to allow management to increase its focus on the businesses for which we believe we have a competitive advantage. Certain of these businesses are included in Assets/liabilities held for sale. • Government Services and Health: The Company's services include public assistance program administration such as child support, pension administration, records management, electronic benefits, eligibility and payment cards, unclaimed property, disease management and software offerings in support of federal, state and local government agencies. The Company also provides payment services, which include prepaid cards, child support disbursements and other government support programs, disbursement of electronic payments directly to end users, collections and transfer of payments. • Transportation Services: The Company's services include support for electronic toll collection, public transit, parking and photo enforcement. • Non-Core Public: This represents certain transportation and state and local businesses that are considered non-core and therefore are expected to be sold to allow management to increase its focus on the businesses for which we believe we have a competitive advantage. Contract Balances The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets are the Company’s rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Contract assets are transferred to Accounts receivable when the rights become unconditional. Unearned income includes payments received in advance of performance under the contract, which are realized when the associated revenue is recognized under the contract. The following table provides information about the balances of the Company's contract assets, unearned income and receivables from contracts with customers: (in millions) June 30, 2018 January 1, 2018 Contract Assets (Unearned Income) Current contract assets (1) $ 193 $ 191 Long-term contract assets (2) 13 2 Current unearned income (129 ) (128 ) Long-term unearned income (3) (39 ) (46 ) Net Contract Assets (Unearned Income) $ 38 $ 19 Accounts receivable, net $ 930 $ 908 __________ (1) Prior to the adoption of the new revenue standard, these amounts were recorded in Accounts receivable, net and represented unbilled amounts. (2) Presented in Other long-term assets in the Condensed Consolidated Balance Sheets (3) Presented in Other long-term liabilities in the Condensed Consolidated Balance Sheets Revenues of $98 million and $181 million were recognized during the three and six months ended June 30, 2018 , respectively, related to the Company's unearned income at January 1, 2018. The Company had no asset impairment charges related to contract assets for the three and six months ended June 30, 2018 . Transaction Price Allocated to the Remaining Performance Obligations Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at June 30, 2018 , was approximately $2.4 billion . The Company expects to recognize approximately 66% of the revenues over the next two years and the remainder thereafter. Costs to Obtain and Fulfill a Contract The Company capitalizes commission expenses paid to internal sales personnel that are incremental to obtaining customer contracts. The net book value of these costs, which was $28 million as of June 30, 2018 , are included in Other current assets or Other long-term assets. The judgments made in determining the amount of costs incurred include whether the commissions are incremental and directly related to a successful acquisition of a customer contract. These costs are amortized in Selling, general and administrative costs over the term of the contract or the estimated life of the customer relationship, if renewals are expected and the renewal commission is not commensurate with the initial commission. These costs are periodically reviewed for impairment. The Company expenses sales commissions when incurred if the amortization period of the sales commission is one year or less. Also, the Company capitalizes costs incurred to fulfill its contracts that (i) relate directly to the contract (ii) are expected to generate resources that will be used to satisfy the Company’s performance obligation under the contract and (iii) are expected to be recovered through revenue generated under the contract. The net book value of these costs, which comprise set-up/transition activities, was $58 million as of June 30, 2018 , and are classified in Other current assets or Other long-term assets on the Condensed Consolidated Balance Sheets. Contract fulfillment costs are expensed to Cost of services as the Company satisfies its performance obligations by transferring the service to the customer. These costs are amortized on a systematic basis over the expected period of benefit. The amounts of amortization of cost incurred to obtain and fulfill a contract for the three and six months ended June 30, 2018 , were $13 million and $27 million , respectively. Cash Flows: In November 2016, the FASB issued updated accounting guidance regarding the presentation of restricted cash in the Condensed Consolidated Statements of Cash Flows. Specifically, this update requires that restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Condensed Consolidated Statements of Cash Flows. The Company adopted this updated accounting guidance on January 1, 2018 using the retrospective method. The revision to prior year Condensed Consolidated Statements of Cash Flows from the adoption of this guidance was a reclassification in the Condensed Consolidated Statements of Cash Flows of $25 million of restricted cash to cash, cash equivalents and restricted cash. New Accounting Standards To Be Adopted Leases: In February 2016, the FASB updated the accounting guidance related to leases requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases except short term leases (lease term of 12 months or less). The accounting for lessors is largely unchanged. This updated guidance is effective for us beginning January 1, 2019. This guidance must be adopted using a modified retrospective approach through a cumulative-effect adjustment for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. While we are currently evaluating the impact on the Company's Consolidated Financial Statements, we do expect a material impact to the Consolidated Balance Sheets. Credit Losses: In June 2016, the FASB updated the accounting guidance related to measurement of credit losses on financial instruments, which requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. This updated guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact on the Company's Consolidated Financial Statements. |
Recent Accounting Pronounceme22
Recent Accounting Pronouncements Recent Accounting Pronouncements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Information about disaggregated revenue by major service line and timing of revenue recognition | The following table provides information about disaggregated revenue by major service line, the timing of revenue recognition and a reconciliation of the disaggregated revenue by reportable segments. Refer to Note 3 – Segment Reporting for additional information on the Company's reportable segments. (in millions) Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Commercial Industries: Omni-channel communications $ 199 $ 418 Human resource services 186 373 Industry services 240 490 Non-core 183 381 Total Commercial Industries 808 1,662 Public Sector: Government services and health 338 670 Transportation services 181 357 Non-core 55 105 Total Public Sector 574 1,132 Other: Education 5 13 Total Other 5 13 Total Consolidated Revenue $ 1,387 $ 2,807 Timing of Revenue Recognition: Point in time $ 34 $ 70 Over time 1,353 2,737 Total Revenue $ 1,387 $ 2,807 |
Information about the balances of contract assets, unearned income and receivables from contracts with customers | The following table provides information about the balances of the Company's contract assets, unearned income and receivables from contracts with customers: (in millions) June 30, 2018 January 1, 2018 Contract Assets (Unearned Income) Current contract assets (1) $ 193 $ 191 Long-term contract assets (2) 13 2 Current unearned income (129 ) (128 ) Long-term unearned income (3) (39 ) (46 ) Net Contract Assets (Unearned Income) $ 38 $ 19 Accounts receivable, net $ 930 $ 908 __________ (1) Prior to the adoption of the new revenue standard, these amounts were recorded in Accounts receivable, net and represented unbilled amounts. (2) Presented in Other long-term assets in the Condensed Consolidated Balance Sheets (3) Presented in Other long-term liabilities in the Condensed Consolidated Balance Sheets |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Selected financial information for our reportable segments is as follows: Three Months Ended June 30, (in millions) Commercial Industries Public Sector Other Total 2018 Revenue $ 808 $ 574 $ 5 $ 1,387 Segment profit (loss) $ 47 $ 68 $ (5 ) $ 110 Segment depreciation and amortization $ 33 $ 24 $ — $ 57 Adjusted EBITDA (1) $ 80 $ 91 $ (5 ) $ 166 2017 Revenue $ 856 $ 598 $ 42 $ 1,496 Segment profit (loss) $ 33 $ 52 $ 2 $ 87 Segment depreciation and amortization $ 38 $ 29 $ 2 $ 69 Adjusted EBITDA (2) $ 71 $ 82 $ 4 $ 157 Six Months Ended June 30, (in millions) Commercial Industries Public Sector Other Total 2018 Revenue $ 1,662 $ 1,132 $ 13 $ 2,807 Segment profit (loss) $ 91 $ 133 $ (9 ) $ 215 Segment depreciation and amortization $ 67 $ 46 $ — $ 113 Adjusted EBITDA (1) $ 158 $ 178 $ (9 ) $ 327 2017 Revenue $ 1,751 $ 1,207 $ 91 $ 3,049 Segment profit (loss) $ 59 $ 109 $ 5 $ 173 Segment depreciation and amortization $ 74 $ 56 $ 3 $ 133 Adjusted EBITDA (2) $ 133 $ 169 $ 8 $ 310 __________ (1) 2018 Adjusted EBITDA for Public Sector does not include $1 million of NY MMIS settlement for the three and six months, respectively. (2) 2017 Adjusted EBITDA for Public Sector does not include $1 million and $4 million of net NY MMIS and HE charge for the three and six months, respectively. |
Reconciliation to pre-tax income (loss) | (in millions) Three Months Ended June 30, Six Months Ended June 30, Segment Profit (Loss) Reconciliation to Pre-tax Income (Loss) 2018 2017 2018 2017 Income (Loss) Before Income Taxes $ 54 $ (11 ) $ — $ (33 ) Reconciling items: Restructuring and related costs 17 36 37 54 Amortization of acquired intangible assets 60 61 121 122 Separation costs — 1 — 6 Interest expense 37 34 70 70 (Gain) loss on divestitures and transaction costs (60 ) (25 ) (45 ) (25 ) Litigation costs (recoveries), net 4 (9 ) 35 (20 ) Other (income) expenses, net (2 ) — (3 ) (1 ) Segment Pre-tax Income (Loss) $ 110 $ 87 $ 215 $ 173 Segment depreciation and amortization $ 57 $ 69 $ 113 $ 133 NY MMIS (1 ) 1 (1 ) 9 HE charge — — — (5 ) Adjusted EBITDA $ 166 $ 157 $ 327 $ 310 |
Assets_Liabilities Held for S24
Assets/Liabilities Held for Sale (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Divestitures [Abstract] | |
Summary of the Major Categories of Assets and Liabilities reclassified to held for sale | The following is a summary of the major categories of assets and liabilities that have been reclassified to held for sale. (in millions) June 30, 2018 December 31, 2017 Accounts Receivable, net $ 89 $ 160 Other current assets 12 41 Contract assets 4 — Land, building and equipment, net 4 6 Product Software, net 5 3 Intangible assets, net 6 7 Goodwill 186 537 Other long-term assets 10 3 Total Assets held for sale $ 316 $ 757 Accounts payable $ 3 $ 9 Accrued compensation 16 20 Unearned revenue 25 30 Other current liabilities 21 53 Pension and other benefit obligations 49 50 Other long-term liabilities 5 7 Total Liabilities held for sale $ 119 $ 169 |
Restructuring Programs (Tables)
Restructuring Programs (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Program Activity | A summary of the Company's restructuring program activity during the six months ended June 30, 2018 and 2017 was as follows: (in millions) Severance and Related Costs Lease Cancellation and Other Costs Total Accrued Balance at December 31, 2017 $ 14 $ 30 $ 44 Restructuring provision 21 17 38 Adjustments to prior accruals (2 ) — (2 ) Total Net Current Period Charges 19 17 36 Payments against reserve and currency (19 ) (16 ) (35 ) Liabilities held for sale — 3 3 Accrued Balance at June 30, 2018 $ 14 $ 34 $ 48 (in millions) Severance and Related Costs Lease Cancellation and Other Costs Total Accrued Balance at December 31, 2016 $ 15 $ 6 $ 21 Restructuring provision 28 17 45 Adjustments to prior accruals 1 — 1 Total Net Current Period Charges 29 17 46 Payments against reserve and currency (19 ) (6 ) (25 ) Accrued Balance at June 30, 2017 $ 25 $ 17 $ 42 |
Total Costs incurred with Restructuring programs, by segment | The following table summarizes the total amount of costs incurred in connection with these restructuring programs by segment: Three Months Ended Six Months Ended (in millions) 2018 2017 2018 2017 Commercial Industries $ 12 $ 22 $ 27 $ 31 Public Sector 5 11 8 14 Other — 1 1 1 Total Net Restructuring Charges $ 17 $ 34 $ 36 $ 46 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt was as follows: (in millions) June 30, 2018 December 31, 2017 Term loan A due 2022 $ 709 $ 732 Term loan B due 2023 837 842 Senior notes due 2024 510 510 Capital lease obligations 36 33 Principal debt balance 2,092 2,117 Debt issuance costs and unamortized discounts (48 ) (56 ) Less: current maturities (43 ) (82 ) Total Long-term Debt $ 2,001 $ 1,979 |
Fair Value of Financial Asset27
Fair Value of Financial Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial assets and liabilities | The following table represents assets and liabilities measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases is Level 2. (in millions) June 30, 2018 December 31, 2017 Assets: Foreign exchange contract - forward $ — $ 2 Total Assets $ — $ 2 Liabilities: Foreign exchange contracts - forwards $ 3 $ 1 Deferred compensation plan liabilities (1) 90 99 Total Liabilities $ 93 $ 100 ___________ (1) In September 2017, the Company terminated the legacy deferred compensation plans (Plans) and the Company Owned Life Insurance (COLI), which held the Plans’ investments. The Company will make payments to Plan participants during the remainder of 2018. |
Estimated fair values of financial assets and liabilities not measured at fair value on a recurring basis | The estimated fair values of our other financial assets and liabilities not measured at fair value on a recurring basis were as follows: June 30, 2018 December 31, 2017 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt 2,001 2,100 1,979 2,070 |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Loss (AOCL) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Other Comprehensive Income (Loss) [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | AOCL is comprised of the following: (in millions) June 30, 2018 December 31, 2017 Cumulative currency translation adjustments $ (455 ) $ (437 ) Other unrealized gains (losses), net (2 ) 1 Benefit plans net actuarial losses and prior service credits (55 ) (58 ) Total Accumulated Other Comprehensive Loss $ (512 ) $ (494 ) |
Shareholder's Equity (Tables)
Shareholder's Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | |
Schedule of Stockholders Equity [Table Text Block] | Shareholders’ Equity (in millions) Common Stock Additional Paid-in Capital Retained Earnings AOCL Conduent Shareholders' Equity Balance at December 31, 2017 $ 2 $ 3,850 $ 171 $ (494 ) $ 3,529 Comprehensive income (loss), net — — (39 ) (18 ) (57 ) Cash dividends paid - preferred stock — — (5 ) — (5 ) Cumulative impact of adopting the new revenue standard — — 17 — 17 Stock option and incentive plans, net — 15 — — 15 Balance at June 30, 2018 $ 2 $ 3,865 $ 144 $ (512 ) $ 3,499 (in millions) Common Stock Additional Paid-in Capital Retained Earnings AOCL Conduent Shareholders' Equity Balance at December 31, 2016 $ 2 $ 3,812 $ — $ (526 ) $ 3,288 Comprehensive income (loss), net — — (10 ) 28 18 Cash dividends paid - preferred stock — — (5 ) — (5 ) Stock option and incentive plans, net — 16 — — 16 Balance at June 30, 2017 $ 2 $ 3,828 $ (15 ) $ (498 ) $ 3,317 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per share of common stock: Three Months Ended Six Months Ended (in millions, except per share data. Shares in thousands) 2018 2017 2018 2017 Basic Earnings (Loss) per Share: Net income (loss) from continuing operations $ 11 $ (4 ) $ (39 ) $ (14 ) Accrued dividends on preferred stock (3 ) (3 ) (5 ) (5 ) Adjusted Net Income (Loss) From Continuing Operations Available to Common Shareholders 8 (7 ) (44 ) (19 ) Net income (loss) from discontinued operations — — — 4 Adjusted Net Income (Loss) Available to Common Shareholders $ 8 $ (7 ) $ (44 ) $ (15 ) Weighted average common shares outstanding 205,296 203,673 205,184 203,522 Basic Earnings (Loss) per Share: Continuing operations $ 0.05 $ (0.03 ) $ (0.21 ) $ (0.09 ) Discontinued operations — — — 0.02 Basic Earnings (Loss) per Share $ 0.05 $ (0.03 ) $ (0.21 ) $ (0.07 ) Diluted Earnings (Loss) per Share: Net income (loss) from continuing operations $ 11 $ (4 ) $ (39 ) $ (14 ) Accrued dividends on preferred stock (3 ) (3 ) (5 ) (5 ) Adjusted Net Income (Loss) From Continuing Operations Available to Common Shareholders 8 (7 ) (44 ) (19 ) Net income (loss) from discontinued operations — — — 4 Adjusted Net Income (Loss) Available to Common Shareholders $ 8 $ (7 ) $ (44 ) $ (15 ) Weighted average common shares outstanding 205,296 203,673 205,184 203,522 Common shares issuable with respect to: Stock options 146 — — — Restricted stock and performance units / shares 3,447 — — — Adjusted Weighted Average Common Shares Outstanding 208,889 203,673 205,184 203,522 Diluted Earnings (Loss) per Share: Continuing operations $ 0.04 $ (0.03 ) $ (0.21 ) $ (0.09 ) Discontinued operations — — — 0.02 Diluted Earnings (Loss) per Share $ 0.04 $ (0.03 ) $ (0.21 ) $ (0.07 ) The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands): Stock Options — 628 295 628 Restricted stock and performance shares/units 201 8,538 6,329 8,538 Convertible preferred stock 5,393 5,393 5,393 5,393 Total Anti-Dilutive Securities 5,594 14,559 12,017 14,559 |
Recent Accounting Pronounceme31
Recent Accounting Pronouncements Recent Accounting Pronouncements - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Retained earnings | $ 144 | $ 144 | $ 171 | ||
Deferred Revenue, Current | 98 | 181 | |||
Asset Impairment Charges | 0 | ||||
Remaining performance obligation | 2,400 | 2,400 | |||
Deferred Sales Commission | 28 | 28 | |||
Capitalized commission expenses paid to internal sales personnel, incremental to obtaining customer contracts | 58 | 58 | |||
Capitalized Contract Cost, Amortization | 13 | $ 27 | |||
Restricted Cash and Cash Equivalents, Current | $ 25 | ||||
Maximum [Member] | |||||
Capitalized Contract Cost, Amortization Period | 1 year | ||||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||
Retained earnings | $ 17 | ||||
Revenues | $ 32 | $ 76 |
Recent Accounting Pronounceme32
Recent Accounting Pronouncements - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 1,387 | $ 2,807 |
Point in time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 34 | 70 |
Over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,353 | 2,737 |
Commercial Industries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 808 | 1,662 |
Public Sector | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 574 | 1,132 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5 | 13 |
Omni-Channel Communications | Commercial Industries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 199 | 418 |
Human Resource Services | Commercial Industries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 186 | 373 |
industry Services | Commercial Industries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 240 | 490 |
Non-Core Commercial | Commercial Industries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 183 | 381 |
Government Services and Health | Public Sector | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 338 | 670 |
Transportation Services | Public Sector | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 181 | 357 |
Non-Core Public | Public Sector | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 55 | 105 |
Education | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 5 | $ 13 |
Recent Accounting Pronounceme33
Recent Accounting Pronouncements - Expected Timing of Satisfaction (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | 6 Months Ended |
Jun. 30, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Remaining performance obligation, percentage | 66.00% |
Recent Accounting Pronounceme34
Recent Accounting Pronouncements Recent Accounting Pronouncements - Balances of Contract Assets, Unearned Income and Receivables (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | |||
Current contract assets | $ 193 | $ 191 | $ 0 |
Long-term contract assets | 13 | 2 | |
Current unearned income | (129) | (128) | |
Long-term unearned income | (39) | (46) | |
Net Contract Assets (Unearned Income) | 38 | 19 | |
Accounts receivable, net | $ 930 | $ 908 | $ 1,114 |
Segment Reporting - Segment Rev
Segment Reporting - Segment Revenue and Segment Profit (Loss) (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2017primaryreportablesegment | |
Segment Reporting Information [Line Items] | |||||
NY MMIS | $ (1) | $ 1 | $ (1) | $ 9 | |
NY MMIS and HE Charge | 1 | 4 | |||
Revenue, Net | 1,387 | 1,496 | 2,807 | 3,049 | |
Primary reportable segments | primaryreportablesegment | 2 | ||||
Depreciation and Amortization, excluding Amortization of Acquired Intangible Assets | 57 | 69 | 113 | 133 | |
Segment Profit (Loss) | 110 | 87 | 215 | 173 | |
Segment Adjusted EBITDA | 166 | 157 | 327 | 310 | |
Commercial Industries | |||||
Segment Reporting Information [Line Items] | |||||
Revenue, Net | 808 | 856 | 1,662 | 1,751 | |
Depreciation and Amortization, excluding Amortization of Acquired Intangible Assets | 33 | 38 | 67 | 74 | |
Segment Profit (Loss) | 47 | 33 | 91 | 59 | |
Segment Adjusted EBITDA | 80 | 71 | 158 | 133 | |
Public Sector | |||||
Segment Reporting Information [Line Items] | |||||
Revenue, Net | 574 | 598 | 1,132 | 1,207 | |
Depreciation and Amortization, excluding Amortization of Acquired Intangible Assets | 24 | 29 | 46 | 56 | |
Segment Profit (Loss) | 68 | 52 | 133 | 109 | |
Segment Adjusted EBITDA | 91 | 82 | 178 | 169 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Revenue, Net | 5 | 42 | 13 | 91 | |
Depreciation and Amortization, excluding Amortization of Acquired Intangible Assets | 0 | 2 | 0 | 3 | |
Segment Profit (Loss) | (5) | 2 | (9) | 5 | |
Segment Adjusted EBITDA | $ (5) | $ 4 | $ (9) | $ 8 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation Of Operating Profit Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting [Abstract] | ||||
Income (Loss) before Income Taxes | $ 54 | $ (11) | $ 0 | $ (33) |
Reconciling items: | ||||
Restructuring and related costs | 17 | 36 | 37 | 54 |
Amortization of intangible assets | 60 | 61 | 121 | 122 |
Interest expense | 37 | 34 | 70 | 70 |
Separation costs | 0 | 1 | 0 | 6 |
(Gain) loss on divestitures and transaction costs | (60) | (25) | (45) | (25) |
Litigation costs (recoveries), net | 4 | (9) | 35 | (20) |
Other (income) expenses, net | (2) | 0 | (3) | (1) |
Segment Pre-tax Income (Loss) | 110 | 87 | 215 | 173 |
Depreciation and Amortization, excluding Amortization of Acquired Intangible Assets | 57 | 69 | 113 | 133 |
NY MMIS | (1) | 1 | (1) | 9 |
HE charge | 0 | 0 | 0 | (5) |
Segment Adjusted EBITDA | $ 166 | $ 157 | $ 327 | $ 310 |
Assets_Liabilities Held for S37
Assets/Liabilities Held for Sale (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Jan. 01, 2018 |
Proceeds from Divestiture of Businesses | $ 400 | $ 0 | $ 400 | $ 0 | |||
Accounts receivable, net | $ 930 | 930 | 930 | $ 1,114 | $ 908 | ||
Other current assets | 229 | 229 | 229 | 181 | |||
Land, buildings and equipment, net | 276 | 276 | 276 | 257 | |||
Intangible assets, net | 771 | 771 | 771 | 891 | |||
Goodwill | 3,424 | 3,424 | 3,424 | 3,366 | |||
Assets Held-for-sale, Not Part of Disposal Group | 316 | 316 | 316 | 757 | |||
Accounts payable | 158 | 158 | 158 | 138 | |||
Unearned income | 129 | 129 | 129 | 151 | |||
Other current liabilities | 567 | $ 567 | 567 | 493 | |||
Commercial Vehicle Operations [Member] | |||||||
Proceeds from Divestiture of Businesses | 400 | ||||||
Gain (Loss) on Disposition of Business | $ 74 | ||||||
Divestiture revenue | $ 33 | $ 66 |
Assets_Liabilities Held for S38
Assets/Liabilities Held for Sale Divestitures Balance Sheet Account (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Accounts receivable, net | $ 930 | $ 908 | $ 1,114 |
Other current assets | 229 | 181 | |
Contract with Customer, Asset, Net, Current | 193 | $ 191 | 0 |
Land, buildings and equipment, net | 276 | 257 | |
Intangible assets, net | 771 | 891 | |
Goodwill | 3,424 | 3,366 | |
Assets Held-for-sale, Not Part of Disposal Group | 316 | 757 | |
Accounts payable | 158 | 138 | |
Unearned income | 129 | 151 | |
Other current liabilities | 567 | 493 | |
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | |||
Accounts receivable, net | 89 | 160 | |
Other current assets | 12 | 41 | |
Contract with Customer, Asset, Net, Current | 4 | 0 | |
Land, buildings and equipment, net | 4 | 6 | |
Product Software, net | 5 | 3 | |
Intangible assets, net | 6 | 7 | |
Goodwill | 186 | 537 | |
Other long-term assets | 10 | 3 | |
Assets Held-for-sale, Not Part of Disposal Group | 316 | 757 | |
Accounts payable | 3 | 9 | |
Accrued compensation | 16 | 20 | |
Unearned income | 25 | 30 | |
Other current liabilities | 21 | 53 | |
Liability, Defined Benefit Pension Plan, Noncurrent | 49 | 50 | |
Other long-term liabilities | 5 | 7 | |
total liabilities held for sale | $ 119 | $ 169 |
Restructuring Programs (Details
Restructuring Programs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Strategic transformation costs | $ 1 | $ 8 | ||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | 44 | 21 | ||
Restructuring Charges | 38 | 45 | ||
Reversals of prior accruals | (2) | 1 | ||
Restructuring, Net Current Period Charges | 36 | 46 | ||
Restructuring payments against reserve and currency | (35) | (25) | ||
Restructuring assets held for sale | 3 | |||
Balance at end of period | $ 48 | $ 42 | 48 | 42 |
Net current period restructuring charges, continuing operations | 17 | 34 | 36 | 46 |
Commercial Industries | ||||
Restructuring Reserve [Roll Forward] | ||||
Net current period restructuring charges, continuing operations | 12 | 22 | 27 | 31 |
Public Sector | ||||
Restructuring Reserve [Roll Forward] | ||||
Net current period restructuring charges, continuing operations | 5 | 11 | 8 | 14 |
Other | ||||
Restructuring Reserve [Roll Forward] | ||||
Net current period restructuring charges, continuing operations | 0 | 1 | 1 | 1 |
Severance and Related Costs [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | 14 | 15 | ||
Restructuring Charges | 21 | 28 | ||
Reversals of prior accruals | (2) | 1 | ||
Restructuring, Net Current Period Charges | 19 | 29 | ||
Restructuring payments against reserve and currency | (19) | (19) | ||
Restructuring assets held for sale | 0 | |||
Balance at end of period | 14 | 25 | 14 | 25 |
Lease Cancellation and Other Costs [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | 30 | 6 | ||
Restructuring Charges | 17 | 17 | ||
Reversals of prior accruals | 0 | 0 | ||
Restructuring, Net Current Period Charges | 17 | 17 | ||
Restructuring payments against reserve and currency | (16) | (6) | ||
Restructuring assets held for sale | 3 | |||
Balance at end of period | $ 34 | $ 17 | $ 34 | $ 17 |
Debt - Debt Issuances (Details)
Debt - Debt Issuances (Details) - USD ($) $ in Millions | Jun. 28, 2018 | Jun. 27, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||
Capital lease obligations | $ 36 | $ 33 | |||
Principal debt balance | 2,092 | 2,117 | |||
Debt issuance costs and unamortized discounts | (48) | (56) | |||
Less: current maturities | (43) | (82) | |||
Total Long-term Debt | 2,001 | 1,979 | |||
Write off of unamortized discount and issuance costs | 3 | ||||
Term Loan A due 2022 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 709 | 732 | |||
Line of Credit Facility interest rate reduction | 0.50% | ||||
Term Loan B due 2023 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 837 | 842 | |||
Line of Credit Facility interest rate reduction | 0.50% | ||||
Senior Notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 510 | $ 510 | |||
Letters of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility interest rate reduction | 0.50% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Term Loan A due 2022 | |||||
Debt Instrument [Line Items] | |||||
Long Term debt interest rate over LIBOR | 2.25% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Term Loan B due 2023 | |||||
Debt Instrument [Line Items] | |||||
Long Term debt interest rate over LIBOR | 3.00% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Letters of Credit | |||||
Debt Instrument [Line Items] | |||||
Long Term debt interest rate over LIBOR | 1.75% | 2.25% | |||
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Term Loan A due 2022 | |||||
Debt Instrument [Line Items] | |||||
Long Term debt interest rate over LIBOR | 1.75% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Term Loan B due 2023 | |||||
Debt Instrument [Line Items] | |||||
Long Term debt interest rate over LIBOR | 2.50% |
Financial Instruments - Foreign
Financial Instruments - Foreign Exchange Risk Management (Details) - Designated as Hedging Instrument [Member] - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross Notional Value | $ 136 | $ 160 |
Average Maturity of Foreign Exchange Hedging Contracts - within Three Months | 60.00% | |
Average Maturity of Foreign Exchange Hedging Contracts - within Three and Six Months | 15.00% | |
Average Maturity of Foreign Exchange Hedging Contracts - within Six and Twelve Months | 19.00% | |
Average Maturity of Foreign Exchange Hedging Contracts - greater than twelve months | 6.00% |
Fair Value of Financial Asset42
Fair Value of Financial Assets and Liabilities - Recurring (Details) - Significant Other Observable Inputs (Level 2) [Member] - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Total Assets | $ 0 | $ 2 |
Liabilities: | ||
Foreign derivative contracts | 3 | 1 |
Deferred compensation plan liabilities(1) | 90 | 99 |
Total Liabilities | 93 | 100 |
Foreign Exchange Forward [Member] | ||
Assets: | ||
Foreign exchange contracts | $ 0 | $ 2 |
Fair Value of Financial Asset43
Fair Value of Financial Assets and Liabilities - Nonrecurring (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 2,001 | $ 1,979 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 2,100 | $ 2,070 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Pension Plan | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Defined contribution plans | $ (7) | $ (9) | $ (16) | $ (19) |
Accumulated Other Comprehensi45
Accumulated Other Comprehensive Loss (AOCL) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Other Comprehensive Income (Loss) [Abstract] | ||
Cumulative translation adjustments | $ (455) | $ (437) |
Other unrealized gains (losses), net | (2) | 1 |
Benefit plans net actuarial losses and prior service credits | (55) | (58) |
Total Accumulated Other Comprehensive Loss | $ (512) | $ (494) |
Accumulated Other Comprehensi46
Accumulated Other Comprehensive Loss (AOCL) Accumulated Other Comprehensive Loss (AOCL) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Other Comprehensive Income [Abstract] | ||
Cumulative translation adjustments | $ (455) | $ (437) |
Other unrealized gains (losses), net | (2) | 1 |
Benefit plans net actuarial losses and prior service credits | 55 | 58 |
Accumulated other comprehensive loss | $ (512) | $ (494) |
Contingencies and Litigation -
Contingencies and Litigation - Other Contingencies (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Jul. 31, 2018USD ($) | Jun. 30, 2018USD ($) | |
Surety Bond [Member] | |||
Guarantor Obligations [Line Items] | |||
Maximum exposure, undiscounted | $ 635,000,000 | ||
Contractual and Corporate Obligations Guarantee [Member] | |||
Guarantor Obligations [Line Items] | |||
Maximum exposure, undiscounted | 339,000,000 | ||
Federal Family Education Loan Program (FFELP) Guaranteed Loans [Member] | |||
Guarantor Obligations [Line Items] | |||
Reserves for losses on defaulted loans | $ 300,000 | ||
State Of Texas v. Xerox Corporation, Xerox State Healthcare, LLC, and ACS State Healthcare, LLC | |||
Guarantor Obligations [Line Items] | |||
Loss Contingency, Damages Sought, Multiplier Of Overpayment Amounts | 3 | ||
Subsequent Event | Federal Family Education Loan Program (FFELP) Guaranteed Loans [Member] | |||
Guarantor Obligations [Line Items] | |||
Outstanding Student Loan Portfolio, Number Of Loans | 14,500 |
Contingencies and Litigation Lo
Contingencies and Litigation Loss Contingency (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Dec. 31, 2017 | Jun. 30, 2018 | |
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 2,000 | |
Loss Contingency, Estimate of Possible Loss | 38 | |
Conduent Business Services, LLC v. Cognizant Business Service, LLC [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 22 | |
Contractual and Corporate Obligations Guarantee [Member] | ||
Loss Contingencies [Line Items] | ||
Maximum exposure, undiscounted | 339 | |
Federal Family Education Loan Program (FFELP) Guaranteed Loans [Member] | ||
Loss Contingencies [Line Items] | ||
Reserves for losses on defaulted student loans | 0.3 | |
Surety Bond [Member] | ||
Loss Contingencies [Line Items] | ||
Maximum exposure, undiscounted | $ 635 |
Contingencies and Litigation Ga
Contingencies and Litigation Gain Contingency (Details) $ in Millions | Dec. 31, 2017USD ($) |
Conduent Business Services, LLC v. Cognizant Business Service, LLC [Member] | |
Gain Contingencies [Line Items] | |
Gain Contingency, Unrecorded Amount | $ 150 |
Contingencies and Litigation Nu
Contingencies and Litigation Number of purported acts (Details) number in Millions | 3 Months Ended |
Dec. 31, 2017 | |
Loss Contingencies [Line Items] | |
Loss Contingency, New Claims Filed, Number | 0.2 |
Preferred Stock (Details)
Preferred Stock (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Temporary Equity [Line Items] | |
Preferred Stock, Shares Issued | shares | 120,000 |
Preferred Stock, Liquidation Preference, Value | $ | $ 120 |
Preferred Stock, Value, Issued | $ | $ 142 |
Preferred Stock, Dividend Rate, Percentage | 8.00% |
Preferred stock annual dividends | $ | $ 9.6 |
Total shares available for issuance (in shares) | shares | 5,393,000 |
Preferred Stock Initial Conversion Price per Share | $ / shares | $ 22.25 |
Common Stock [Member] | |
Temporary Equity [Line Items] | |
Shares issued upon conversion (in shares) | shares | 44.9438 |
Shareholder's Equity (Details)
Shareholder's Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stockholders' Equity Attributable to Parent Period Begin | $ 3,529 | ||||
Comprehensive (loss) income, net of tax, Attributable to Parent | $ (20) | $ 9 | (57) | $ 18 | |
Cash dividends paid - preferred stock | 3 | 3 | 5 | 5 | |
Stockholders' Equity Attributable to Parent Period End | 3,499 | 3,499 | |||
Common Stock [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stockholders' Equity Attributable to Parent Period Begin | 2 | 2 | |||
Comprehensive (loss) income, net of tax, Attributable to Parent | 0 | 0 | |||
Cash dividends paid - preferred stock | 0 | 0 | |||
Stock option and incentive plans, net | 0 | 0 | |||
Stockholders' Equity Attributable to Parent Period End | 2 | 2 | 2 | 2 | |
Additional Paid-in Capital [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stockholders' Equity Attributable to Parent Period Begin | 3,850 | 3,812 | |||
Comprehensive (loss) income, net of tax, Attributable to Parent | 0 | 0 | |||
Cash dividends paid - preferred stock | 0 | 0 | |||
Stock option and incentive plans, net | 15 | 16 | |||
Stockholders' Equity Attributable to Parent Period End | 3,865 | 3,828 | 3,865 | 3,828 | |
Retained Earnings [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stockholders' Equity Attributable to Parent Period Begin | 171 | 0 | |||
Comprehensive (loss) income, net of tax, Attributable to Parent | (39) | (10) | |||
Cash dividends paid - preferred stock | (5) | (5) | |||
Stock option and incentive plans, net | 0 | 0 | |||
Stockholders' Equity Attributable to Parent Period End | 144 | (15) | 144 | (15) | |
AOCL Attributable to Parent [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stockholders' Equity Attributable to Parent Period Begin | (494) | (526) | |||
Comprehensive (loss) income, net of tax, Attributable to Parent | (18) | 28 | |||
Cash dividends paid - preferred stock | 0 | 0 | |||
Stock option and incentive plans, net | 0 | 0 | |||
Stockholders' Equity Attributable to Parent Period End | (512) | (498) | (512) | (498) | |
Parent [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stockholders' Equity Attributable to Parent Period Begin | 3,529 | 3,288 | |||
Comprehensive (loss) income, net of tax, Attributable to Parent | (57) | 18 | |||
Cash dividends paid - preferred stock | (5) | (5) | |||
Stock option and incentive plans, net | 15 | 16 | |||
Stockholders' Equity Attributable to Parent Period End | $ 3,499 | $ 3,317 | $ 3,499 | $ 3,317 | |
ASU 2014-09 | Common Stock [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Retained earnings | $ 0 | ||||
ASU 2014-09 | Additional Paid-in Capital [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Retained earnings | 0 | ||||
ASU 2014-09 | Retained Earnings [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Retained earnings | 17 | ||||
ASU 2014-09 | AOCL Attributable to Parent [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Retained earnings | 0 | ||||
ASU 2014-09 | Parent [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Retained earnings | $ 17 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net loss from continuing operations | $ 11 | $ (4) | $ (39) | $ (14) |
Accrued dividends on preferred stock | (3) | (3) | (5) | (5) |
Preferred Stock Dividends and Other Adjustments | (3) | (3) | (5) | (5) |
Income from discontinued operations, net of tax | 0 | 0 | 0 | 4 |
Adjusted Net Income Available to Common Shareholders, Common | $ 8 | $ (7) | $ (44) | $ (15) |
Weighted average number of shares outstanding, Basic | 205,296 | 203,673 | 205,184 | 203,522 |
Loss from continuing operations, per basic share | $ 0.05 | $ (0.03) | $ (0.21) | $ (0.09) |
Income from discontinued operation, net of tax, per basic share | 0 | 0 | 0 | 0.02 |
Basic Loss per Share | $ 0.05 | $ (0.03) | $ (0.21) | $ (0.07) |
Adjusted Net Loss from Continuing Operations Available to Common Shareholders, Diluted | $ 8 | $ (7) | $ (44) | $ (19) |
Net income from discontinued operations, diluted | 0 | 0 | 0 | 4 |
Adjusted Net Loss Available to Common Stockholders, Diluted | $ 8 | $ (7) | $ (44) | $ (15) |
Weighted average number of shares outstanding, Diluted | 208,889 | 203,673 | 205,184 | 203,522 |
Loss from continuing operations, per diluted share | $ 0.04 | $ (0.03) | $ (0.21) | $ (0.09) |
Income from discontinued operation, net of tax, per diluted share | 0 | 0 | 0 | 0.02 |
Loss Per Share, Diluted | $ 0.04 | $ (0.03) | $ (0.21) | $ (0.07) |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,594 | 14,559 | 12,017 | 14,559 |
Restricted Stock and Performance Shares [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 201 | 8,538 | 6,329 | 8,538 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 628 | 295 | 628 |
Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,393 | 5,393 | 5,393 | 5,393 |
Restricted Stock and Performance Shares [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 3,447 | 0 | 0 | 0 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 146 | 0 | 0 | 0 |
Earnings per Share Earnings per
Earnings per Share Earnings per share reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Schedule of Basic And Diluted Earnings [Line Items] | ||||
Adjusted Net Income Available to Common Shareholders, Common | $ 8 | $ (7) | $ (44) | $ (15) |
Income from discontinued operations, net of tax | 0 | 0 | 0 | 4 |
Adjusted net income (loss) from continuing operations available to common stockholders, basic | 8 | (7) | (44) | (19) |
Preferred Stock Dividends and Other Adjustments | 3 | 3 | 5 | 5 |
Net loss from continuing operations | $ 11 | $ (4) | $ (39) | $ (14) |
Weighted average number of shares outstanding, Basic | 205,296 | 203,673 | 205,184 | 203,522 |
Continuing operations, per basic share | $ 0.05 | $ (0.03) | $ (0.21) | $ (0.09) |
Discontinued operations, per basic share | 0 | 0 | 0 | 0.02 |
Earnings Per Share, Basic | $ 0.05 | $ (0.03) | $ (0.21) | $ (0.07) |
Dividends, Preferred Stock, Cash | $ 3 | $ 3 | $ 5 | $ 5 |
Adjusted Net Loss from Continuing Operations Available to Common Shareholders, Diluted | 8 | (7) | (44) | (19) |
Net income from discontinued operations, diluted | 0 | 0 | 0 | 4 |
Adjusted Net Loss Available to Common Stockholders, Diluted | $ 8 | $ (7) | $ (44) | $ (15) |
Weighted average number of shares outstanding, Diluted | 208,889 | 203,673 | 205,184 | 203,522 |
Continuing operations, per diluted share | $ 0.04 | $ (0.03) | $ (0.21) | $ (0.09) |
Income from discontinued operation, net of tax, per diluted share | 0 | 0 | 0 | 0.02 |
Earnings Per Share, Diluted | $ 0.04 | $ (0.03) | $ (0.21) | $ (0.07) |
Stock Options [Member] | ||||
Schedule of Basic And Diluted Earnings [Line Items] | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 146 | 0 | 0 | 0 |
Restricted Stock and Performance Shares [Member] | ||||
Schedule of Basic And Diluted Earnings [Line Items] | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 3,447 | 0 | 0 | 0 |
Earnings per Share Earnings p55
Earnings per Share Earnings per share-anti dilutive shares (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,594 | 14,559 | 12,017 | 14,559 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 628 | 295 | 628 |
Restricted Stock and Performance Shares [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 201 | 8,538 | 6,329 | 8,538 |
Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,393 | 5,393 | 5,393 | 5,393 |
Subsequent Events - Divestiture
Subsequent Events - Divestitures (Details) - USD ($) $ in Millions | Jul. 10, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Subsequent Event [Line Items] | ||||||
Proceeds from Divestiture of Businesses | $ 400 | $ 0 | $ 400 | $ 0 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Local And Municipal Constituent Government Software Solutions Business [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Revenues generated from business sold | 55 | $ 113 | ||||
Disposed of by Sale, Not Discontinued Operations [Member] | Off-Street and U.S. Airport Parking Businesses [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Revenues generated from business sold | $ 18 | $ 42 | ||||
Disposed of by Sale, Not Discontinued Operations [Member] | Off-Street and U.S. Airport Parking Businesses [Member] | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from Divestiture of Businesses | $ 24 |
Subsequent Events - Debt Repaym
Subsequent Events - Debt Repayment (Details) - USD ($) $ in Millions | Jul. 10, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Repayments of Debt | $ 476 | ||
Redemption Premium | 95 | ||
Write off of Deferred Debt Issuance Cost | $ 13 | ||
Senior Notes due 2024 | |||
Subsequent Event [Line Items] | |||
Long-term debt, outstanding | $ 510 | $ 510 | |
Interest rate | 10.50% |