Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 16, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | FISERV INC | ||
Entity Central Index Key | 798,354 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 214,563,950 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 23,949,604,597 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | |||
Processing and services | $ 4,625,000,000 | $ 4,411,000,000 | $ 4,219,000,000 |
Product | 880,000,000 | 843,000,000 | 847,000,000 |
Total revenue | 5,505,000,000 | 5,254,000,000 | 5,066,000,000 |
Expenses: | |||
Cost of processing and services | 2,212,000,000 | 2,178,000,000 | 2,164,000,000 |
Cost of product | 747,000,000 | 731,000,000 | 717,000,000 |
Selling, general and administrative | 1,101,000,000 | 1,034,000,000 | 975,000,000 |
Total expenses | 4,060,000,000 | 3,943,000,000 | 3,856,000,000 |
Operating income | 1,445,000,000 | 1,311,000,000 | 1,210,000,000 |
Interest expense | (163,000,000) | (170,000,000) | (164,000,000) |
Interest and investment (loss) income, net | (7,000,000) | 1,000,000 | 1,000,000 |
Loss on early debt extinguishment | 0 | (85,000,000) | 0 |
Income from continuing operations before income taxes and income from investment in unconsolidated affiliate | 1,275,000,000 | 1,057,000,000 | 1,047,000,000 |
Income tax provision | (492,000,000) | (377,000,000) | (384,000,000) |
Income from investment in unconsolidated affiliate | 147,000,000 | 32,000,000 | 91,000,000 |
Income from continuing operations | 930,000,000 | 712,000,000 | 754,000,000 |
Income (loss) from discontinued operations, net of income taxes | 0 | 0 | 0 |
Net income | $ 930,000,000 | $ 712,000,000 | $ 754,000,000 |
Net income per share - basic: | |||
Continuing operations (in dollars per share) | $ 4.22 | $ 3.04 | $ 3.04 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 |
Total (in dollars per share) | 4.22 | 3.04 | 3.03 |
Net income per share - diluted: | |||
Continuing operations (in dollars per share) | 4.15 | 2.99 | 2.99 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 |
Total (in dollars per share) | $ 4.15 | $ 2.99 | $ 2.98 |
Shares used in computing net income per share: | |||
Basic (in shares) | 220.3 | 233.9 | 248.6 |
Diluted (in shares) | 223.9 | 238 | 252.7 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 930 | $ 712 | $ 754 |
Other comprehensive (loss) income: | |||
Reclassification adjustment for net realized losses on cash flow hedges included in interest expense, net of income tax provision of $5 million, $6 million and $6 million | 7 | 10 | 8 |
Foreign currency translation | (9) | (21) | (11) |
Total other comprehensive loss | (2) | (11) | (3) |
Comprehensive income | $ 928 | $ 701 | $ 751 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Reclassification adjustment for net realized losses on cash flow hedges included in interest expense, tax provision | $ 5 | $ 6 | $ 6 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 300 | $ 275 |
Trade accounts receivable, less allowance for doubtful accounts | 902 | 802 |
Prepaid expenses and other current assets | 526 | 429 |
Total current assets | 1,728 | 1,506 |
Property and equipment, net | 405 | 396 |
Intangible assets, net | 1,833 | 1,872 |
Goodwill | 5,373 | 5,200 |
Other long-term assets | 404 | 366 |
Total assets | 9,743 | 9,340 |
Liabilities and Shareholders’ Equity | ||
Accounts payable and accrued expenses | 1,242 | 1,024 |
Current maturities of long-term debt | 95 | 5 |
Deferred revenue | 483 | 473 |
Total current liabilities | 1,820 | 1,502 |
Long-term debt | 4,467 | 4,288 |
Deferred income taxes | 762 | 726 |
Other long-term liabilities | 153 | 164 |
Total liabilities | 7,202 | 6,680 |
Commitments and Contingencies | ||
Shareholders’ Equity | ||
Preferred stock, no par value: 25.0 million shares authorized; none issued | 0 | 0 |
Common stock, $0.01 par value: 900.0 million shares authorized; 395.7 million shares issued | 4 | 4 |
Additional paid-in capital | 1,020 | 952 |
Accumulated other comprehensive loss | (76) | (74) |
Retained earnings | 8,994 | 8,064 |
Treasury stock, at cost, 180.2 million and 170.4 million shares | (7,401) | (6,286) |
Total shareholders’ equity | 2,541 | 2,660 |
Total liabilities and shareholders’ equity | $ 9,743 | $ 9,340 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 25 | 25 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 900 | 900 |
Common stock, shares issued (in shares) | 395.7 | 395.7 |
Treasury stock, shares (in shares) | 180.2 | 170.4 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock |
Balance at beginning of period at Dec. 31, 2013 | $ 4 | $ 844 | $ (60) | $ 6,598 | $ (3,801) | |
Balance at beginning of period (in shares) at Dec. 31, 2013 | 396 | 139 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 754 | 754 | ||||
Other comprehensive loss | (3) | (3) | ||||
Share-based compensation | 49 | |||||
Shares issued under stock plans including income tax benefits | 4 | $ 64 | ||||
Shares issued under stock plans including income tax benefits (in shares) | (2) | |||||
Purchases of treasury stock | $ (1,158) | |||||
Purchases of treasury stock (in shares) | 18 | |||||
Balance at end of period at Dec. 31, 2014 | $ 4 | 897 | (63) | 7,352 | $ (4,895) | |
Balance at end of period (in shares) at Dec. 31, 2014 | 396 | 155 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 712 | 712 | ||||
Other comprehensive loss | (11) | (11) | ||||
Share-based compensation | 65 | |||||
Shares issued under stock plans including income tax benefits | (10) | $ 80 | ||||
Shares issued under stock plans including income tax benefits (in shares) | (2) | |||||
Purchases of treasury stock | $ (1,471) | |||||
Purchases of treasury stock (in shares) | 17 | |||||
Balance at end of period at Dec. 31, 2015 | 2,660 | $ 4 | 952 | (74) | 8,064 | $ (6,286) |
Balance at end of period (in shares) at Dec. 31, 2015 | 396 | 170 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 930 | 930 | ||||
Other comprehensive loss | (2) | (2) | ||||
Share-based compensation | 68 | |||||
Shares issued under stock plans including income tax benefits | 0 | $ 83 | ||||
Shares issued under stock plans including income tax benefits (in shares) | (2) | |||||
Purchases of treasury stock | $ (1,198) | |||||
Purchases of treasury stock (in shares) | 12 | |||||
Balance at end of period at Dec. 31, 2016 | $ 2,541 | $ 4 | $ 1,020 | $ (76) | $ 8,994 | $ (7,401) |
Balance at end of period (in shares) at Dec. 31, 2016 | 396 | 180 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 930,000,000 | $ 712,000,000 | $ 754,000,000 |
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: | |||
Depreciation and other amortization | 253,000,000 | 223,000,000 | 200,000,000 |
Amortization of acquisition-related intangible assets | 158,000,000 | 194,000,000 | 204,000,000 |
Share-based compensation | 68,000,000 | 65,000,000 | 49,000,000 |
Excess tax benefits from share-based awards | (51,000,000) | (38,000,000) | (18,000,000) |
Deferred income taxes | 21,000,000 | 20,000,000 | 3,000,000 |
Income from investment in unconsolidated affiliate | (147,000,000) | (32,000,000) | (91,000,000) |
Dividends from unconsolidated affiliate | 151,000,000 | 36,000,000 | 110,000,000 |
Non-cash impairment charges | 17,000,000 | 6,000,000 | 0 |
Loss on early debt extinguishment | 0 | 85,000,000 | 0 |
Other operating activities | (2,000,000) | (1,000,000) | 0 |
Changes in assets and liabilities, net of effects from acquisitions: | |||
Trade accounts receivable | (88,000,000) | (2,000,000) | (42,000,000) |
Prepaid expenses and other assets | (68,000,000) | (66,000,000) | (39,000,000) |
Accounts payable and other liabilities | 178,000,000 | 148,000,000 | 168,000,000 |
Deferred revenue | 11,000,000 | (4,000,000) | 9,000,000 |
Net cash provided by operating activities from continuing operations | 1,431,000,000 | 1,346,000,000 | 1,307,000,000 |
Cash flows from investing activities: | |||
Capital expenditures, including capitalization of software costs | (290,000,000) | (359,000,000) | (292,000,000) |
Payments for acquisitions of businesses | (265,000,000) | 0 | 0 |
Net (purchases of) proceeds from investments | (1,000,000) | 1,000,000 | 7,000,000 |
Other investing activities | 2,000,000 | (2,000,000) | (1,000,000) |
Net cash used in investing activities from continuing operations | (554,000,000) | (360,000,000) | (286,000,000) |
Cash flows from financing activities: | |||
Debt proceeds | 2,126,000,000 | 3,121,000,000 | 604,000,000 |
Debt repayments, including redemption and other costs | (1,863,000,000) | (2,707,000,000) | (653,000,000) |
Proceeds from issuance of treasury stock | 79,000,000 | 71,000,000 | 53,000,000 |
Purchases of treasury stock, including employee shares withheld for tax obligations | (1,245,000,000) | (1,522,000,000) | (1,148,000,000) |
Excess tax benefits from share-based awards | 51,000,000 | 38,000,000 | 18,000,000 |
Other financing activities | 0 | (6,000,000) | 0 |
Net cash used in financing activities from continuing operations | (852,000,000) | (1,005,000,000) | (1,126,000,000) |
Net change in cash and cash equivalents from continuing operations | 25,000,000 | (19,000,000) | (105,000,000) |
Net cash flows to discontinued operations | 0 | 0 | (1,000,000) |
Cash and cash equivalents, beginning balance | 275,000,000 | 294,000,000 | 400,000,000 |
Cash and cash equivalents, ending balance | $ 300,000,000 | $ 275,000,000 | $ 294,000,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Description of the Business Fiserv, Inc. and its subsidiaries (collectively, the “Company”) provide financial services technology to clients worldwide, including banks, thrifts, credit unions, investment management firms, leasing and finance companies, retailers, merchants, mutual savings banks, and building societies. The Company provides account processing systems, electronic payments processing products and services, internet and mobile banking systems, and related services. The Company is principally located in the United States where it operates data and transaction processing centers, provides technology support, develops software and payment solutions, and offers consulting services. The Company’s operations are comprised of the Payments and Industry Products (“Payments”) segment and the Financial Institution Services (“Financial”) segment. Additional information regarding the Company’s business segments is included in Note 8 . Principles of Consolidation The consolidated financial statements include the accounts of Fiserv, Inc. and all 100% owned subsidiaries. Investments in less than 50% owned affiliates in which the Company has significant influence but not control are accounted for using the equity method of accounting. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates Step 2 of the goodwill impairment test that had required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit's carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 will be effective prospectively for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or those beginning after January 1, 2017 if early adopted. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance and providing a more robust framework to assist reporting organizations with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. For public entities, ASU 2017-01 is effective prospectively for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for transactions occurring before the issuance or effective date of the standard for which financial statements have not yet been issued. The Company does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which eliminates the current prohibition on immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory, with the intent of reducing complexity and diversity in practice. Under ASU 2016-16, entities must recognize the income tax consequences when the transfer occurs rather than deferring recognition. For public entities, ASU 2016-16 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted as of the beginning of a fiscal year. Entities must apply the guidance on a modified retrospective basis though a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company does not expect the adoption of ASU 2016-16 to have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which adds or clarifies guidance on the presentation and classification of eight specific types of cash receipts and cash payments in the statement of cash flows, with the intent of reducing diversity in practice. For public entities, ASU 2016-15 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. Entities must apply the guidance retrospectively to all periods presented; however, entities may apply prospectively if retrospective application is impracticable. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”), which prescribes an impairment model for most financial assets based on expected losses rather than incurred losses. Under this model, an estimate of expected credit losses over the contractual life of the instrument is to be recorded as of the end of a reporting period as an allowance to offset the amortized cost basis, resulting in a net presentation of the amount expected to be collected on the financial asset. For public entities, ASU 2016-13 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For most instruments, entities must apply the standard using a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year of adoption. The Company is currently assessing the impact that the adoption of ASU 2016-13 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies several aspects of the accounting for share-based payment awards, including the accounting for income taxes and forfeitures, as well as classification in the statement of cash flows. The standard requires that all tax effects related to share-based payments be recorded as income tax expense or benefit in the income statement at settlement or expiration and, accordingly, excess tax benefits and tax deficiencies be presented as operating activities in the statement of cash flows. For public entities, ASU 2016-09 is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods, with early adoption permitted in any interim or annual period for which financial statements have not yet been issued. The recognition of all excess tax benefits and tax deficiencies in the income statement, as well as related changes to the computation of diluted earnings per share, is to be applied prospectively. Entities may elect to apply the change in presentation in the statement of cash flows either prospectively or retrospectively to all periods presented. The impact of adopting this standard on the Company’s consolidated financial statements is dependent upon the intrinsic value of share-based compensation awards at the time of exercise or vesting and may result in more variability in effective tax rates and net earnings, and may also impact the dilution of common stock equivalents. The Company recorded $46 million , $47 million and $18 million in 2016, 2015 and 2014, respectively, to consolidated equity as excess tax benefits from share-based compensation awards. The Company plans to adopt ASU 2016-09 in the first quarter of 2017 and intends to apply the change in presentation in the statement of cash flows on a prospective basis. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize a lease liability and a right-of-use asset for each lease with a term longer than twelve months. The recognized liability is measured at the present value of lease payments not yet paid, and the corresponding asset represents the lessee’s right to use the underlying asset over the lease term and is based on the liability, subject to certain adjustments. For income statement purposes, the standard retains the dual model with leases classified as either operating or finance. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. For public entities, ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The standard requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements of financial instruments. For public entities, ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted for certain provisions of the standard. Entities must apply the standard, with certain exceptions, using a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year of adoption. The Company is currently assessing the impact that the adoption of ASU 2016-01 will have on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), to clarify the principles of recognizing revenue and to create common revenue recognition guidance between U.S. generally accepted accounting principles and International Financial Reporting Standards. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This model involves a five-step process for achieving that core principle, along with comprehensive disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , to defer the effective date of the new revenue standard for one year and permit early adoption as of the original effective date in ASU 2014-09. For public entities, the new revenue standard is effective for annual and interim periods beginning after December 15, 2017. The Company plans to adopt ASU 2014-09 on January 1, 2018. The Company has performed a review of the requirements of the new revenue standard and related ASUs and is monitoring the activity of the FASB and the transition resource group as it relates to specific interpretive guidance. The Company is reviewing customer contracts and is in the process of applying the five-step model of the new revenue standard to each of its key identified revenue streams included within either processing and services revenue or product revenue and is comparing the results to its current accounting practices. While the Company continues to assess all potential impacts of adopting this new revenue standard on its consolidated financial statements, it currently believes the new revenue standard will not have a significant impact on the accounting for stand-ready account- and transaction-based processing fees, the Company’s most significant revenue stream. Areas that the Company currently expects will be impacted by the new revenue standard include the accounting for costs to obtain a contract, such as commissions for sales personnel, which are currently expensed as incurred, and the timing of revenue recognition of certain termination fees over the modified contract term, which will generally result in an acceleration of revenue as compared to our current accounting practice. Entities have the option of adopting this new guidance using either a full retrospective or a modified approach with the cumulative effect of applying the guidance recognized at the date of initial application. The Company is currently evaluating the transition method to elect as well as necessary control and process changes due to implementing the new revenue standard. Fair Value Measurements The Company applies fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in its consolidated financial statements on a recurring basis. Fair value represents the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability. The fair values of cash equivalents, trade accounts receivable, settlement assets and obligations, accounts payable, and client deposits approximate their respective carrying values due to the short period of time to maturity. The estimated fair value of total debt is described in Note 4 and was based on quoted prices in active markets for the Company's senior notes (level 1 of the fair value hierarchy) and discounted cash flows based on the Company’s current incremental borrowing rate for its term loan (level 3 of the fair value hierarchy). The fair value of the Company’s revolving credit facility borrowings approximates carrying value as the underlying interest rate is variable based on LIBOR. Derivatives Derivatives are recorded in the consolidated balance sheets as either an asset or liability measured at fair value. If the derivative is designated as a cash flow hedge, the effective portions of the changes in the fair value of the derivative are recorded as a component of accumulated other comprehensive loss and recognized in the consolidated statements of income when the hedged item affects earnings. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative are recognized in earnings. To the extent the fair value hedge is effective, there is an offsetting adjustment to the basis of the item being hedged. Ineffective portions of changes in the fair value of hedges are recognized in earnings. The Company’s policy is to enter into derivatives with creditworthy institutions and not to enter into such derivatives for speculative purposes. Foreign Currency Foreign currency denominated assets and liabilities, where the functional currency is the local currency, are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average exchange rates during the period. Gains and losses from foreign currency translation are recorded as a separate component of accumulated other comprehensive loss. Revenue Recognition The Company generates revenue from the delivery of processing, service and product solutions. Revenue is recognized when written contracts are signed, delivery has occurred, the fees are fixed or determinable, and collectability is reasonably assured. Processing and services revenue is recognized as services are provided and is primarily derived from contracts that generate account- and transaction-based fees for data processing, transaction processing, electronic billing and payment services, electronic funds transfer, and debit processing services. In addition, processing and services revenue is derived from the fulfillment of professional services, including consulting activities. Certain of the Company’s revenue is generated from multiple element arrangements involving various combinations of product and service deliverables. The deliverables within these arrangements are evaluated at contract inception to determine whether they represent separate units of accounting, and if so, contract consideration is allocated to each deliverable based on relative selling price. The relative selling price is determined using vendor specific objective evidence of fair value, third-party evidence or best estimate of selling price. Revenue is then recognized in accordance with the appropriate revenue recognition guidance applicable to the respective elements. Also included in processing and services revenue is software maintenance fee revenue for ongoing client support, which is recognized ratably over the term of the applicable support period, generally 12 months . Deferred revenue consists primarily of advance cash receipts for services and is recognized as revenue when the services are provided. Product revenue is primarily derived from integrated print and card production sales, as well as software license sales which represented less than 4% of total revenue. For software license agreements that do not require significant customization or modification, the Company recognizes software license revenue upon delivery, assuming persuasive evidence of an arrangement exists, the license fee is fixed or determinable, and collection is reasonably assured. Arrangements with customers that include significant customization, modification or production of software are accounted for under contract accounting, with revenue recognized using the percentage-of-completion method based upon efforts-expended, such as labor hours, to measure progress towards completion. Changes in estimates for revenues, costs and profits are recognized in the period in which they are determinable and were not material for any period presented. The Company includes reimbursements from clients, such as postage and telecommunication costs, in processing and services revenue and product revenue, while the related costs are included in cost of processing and services and cost of product. Selling, General and Administrative Expenses Selling, general and administrative expenses primarily consist of: salaries, wages, commissions and related expenses paid to sales personnel, administrative employees and management; advertising and promotional costs; depreciation and amortization; and other selling and administrative expenses. Cash and Cash Equivalents Cash and cash equivalents consist of cash and investments with original maturities of 90 days or less. Allowance for Doubtful Accounts The Company analyzes the collectibility of trade accounts receivable by considering historical bad debts, client creditworthiness, current economic trends, changes in client payment terms and collection trends when evaluating the adequacy of the allowance for doubtful accounts. Any change in the assumptions used in analyzing a specific account receivable may result in an additional allowance for doubtful accounts being recognized in the period in which the change occurs. The allowance for doubtful accounts was $15 million and $11 million at December 31, 2016 and 2015 , respectively. Prepaid Expenses Prepaid expenses represent advance payments for goods and services to be consumed in the future, such as maintenance, postage and insurance, and totaled $141 million and $146 million at December 31, 2016 and 2015 , respectively. Settlement Assets and Obligations Settlement assets of $312 million and $230 million were included in prepaid expenses and other current assets at December 31, 2016 and 2015 , respectively, and settlement obligations of $305 million and $224 million were included in accounts payable and accrued expenses at December 31, 2016 and 2015 , respectively. Settlement assets and obligations result from timing differences between collection and fulfillment of payment transactions primarily associated with the Company’s walk-in and expedited bill payment service businesses. Settlement assets represent cash received or amounts receivable from agents, payment networks or directly from consumers. Settlement obligations represent amounts payable to clients and payees. Property and Equipment Property and equipment are reported at cost. Depreciation of property and equipment is computed primarily using the straight-line method over the shorter of the estimated useful life of the asset or the leasehold period, if applicable. Property and equipment consisted of the following at December 31: (In millions) Estimated Useful Lives 2016 2015 Land — $ 19 $ 19 Data processing equipment 3 to 5 years 697 662 Buildings and leasehold improvements 5 to 40 years 256 253 Furniture and equipment 5 to 8 years 179 171 1,151 1,105 Less: accumulated depreciation (746 ) (709 ) Total $ 405 $ 396 Depreciation expense for all property and equipment totaled $90 million , $80 million and $71 million in 2016 , 2015 and 2014 , respectively. Intangible Assets Intangible assets consisted of the following at December 31: (In millions) Gross Carrying Amount Accumulated Amortization Net Book Value 2016 Customer related intangible assets $ 2,200 $ 1,043 $ 1,157 Acquired software and technology 507 432 75 Trade names 117 57 60 Capitalized software development costs 641 233 408 Purchased software 230 97 133 Total $ 3,695 $ 1,862 $ 1,833 (In millions) Gross Carrying Amount Accumulated Amortization Net Book Value 2015 Customer related intangible assets $ 2,155 $ 922 $ 1,233 Acquired software and technology 488 413 75 Trade names 120 53 67 Capitalized software development costs 575 199 376 Purchased software 256 135 121 Total $ 3,594 $ 1,722 $ 1,872 Customer related intangible assets represent customer contracts and relationships obtained as part of acquired businesses and are amortized over their estimated useful lives, generally 10 to 20 years. Acquired software and technology represents software and technology intangible assets obtained as part of acquired businesses and are amortized over their estimated useful lives, generally four to eight years. Trade names are amortized over their estimated useful lives, generally 10 to 20 years. Amortization expense for acquired intangible assets, which include customer related intangible assets, acquired software and technology, and trade names, totaled $158 million , $194 million and $204 million in 2016 , 2015 and 2014 , respectively. The Company continually develops, maintains and enhances its products and systems. Product development expenditures represented approximately 8% of the Company’s total revenue in 2016 and 9% in each of 2015 and 2014 . Research and development costs incurred prior to the establishment of technological feasibility are expensed as incurred. Routine maintenance of software products, design costs and other development costs incurred prior to the establishment of a product’s technological feasibility are also expensed as incurred. Costs are capitalized commencing when the technological feasibility of the software has been established. Capitalized software development costs represent the capitalization of certain costs incurred to develop new software or to enhance existing software which is marketed externally or utilized by the Company to process client transactions. Capitalized software development costs are amortized over their estimated useful lives, generally five years. Gross software development costs capitalized for new products and enhancements to existing products totaled $143 million , $137 million and $129 million in 2016 , 2015 and 2014 , respectively. Amortization of previously capitalized software development costs that have been placed into service was $106 million , $92 million and $82 million in 2016 , 2015 and 2014 , respectively. Purchased software represents software licenses purchased from third parties and is amortized over their estimated useful lives, generally three to five years. Amortization of purchased software totaled $40 million , $33 million and $29 million in 2016 , 2015 and 2014 , respectively. The Company estimates that annual amortization expense with respect to acquired intangible assets recorded at December 31, 2016 will be approximately $150 million in 2017 , $140 million in each of 2018 and 2019 , $120 million in 2020 , and $110 million in 2021 . Annual amortization expense in 2017 with respect to capitalized and purchased software recorded at December 31, 2016 is estimated to approximate $150 million . Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired and liabilities assumed in a business combination. The Company evaluates goodwill for impairment on an annual basis, or more frequently if circumstances indicate possible impairment. Goodwill is tested for impairment at a reporting unit level, determined to be at an operating segment level or one level below. When reviewing goodwill for impairment, the Company considers the amount of excess fair value over the carrying value of each reporting unit, the period of time since a reporting unit’s last quantitative test, the extent a reorganization or disposition changes the composition of one or more of the reporting units, and other factors to determine whether or not to first perform a qualitative test. When performing a qualitative test, the Company assesses numerous factors to determine whether it is more likely than not that the fair value of its reporting units are less than their respective carrying values. Examples of qualitative factors that the Company assesses include its share price, its financial performance, market and competitive factors in its industry, and other events specific to its reporting units. If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs a two-step quantitative impairment test by comparing reporting unit carrying values to estimated fair values. No impairment was identified in the Company’s annual impairment assessment in the fourth quarter of 2016 as the estimated fair values of the respective reporting units exceeded the carrying values. In addition, there is no accumulated impairment loss through December 31, 2016 . The changes in goodwill during 2016 and 2015 were as follows: (In millions) Payments Financial Total Goodwill - December 31, 2014 $ 3,440 $ 1,769 $ 5,209 Foreign currency adjustments (3 ) (6 ) (9 ) Goodwill - December 31, 2015 3,437 1,763 5,200 Acquired goodwill 173 — 173 Goodwill - December 31, 2016 $ 3,610 $ 1,763 $ 5,373 Asset Impairment The Company reviews property and equipment, intangible assets and its investment in unconsolidated affiliate for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company reviews capitalized software development costs for impairment at each balance sheet date. Recoverability of property and equipment, capitalized software development costs, and other intangible assets is assessed by comparing the carrying amount of the asset to the undiscounted future cash flows expected to be generated by the asset. The Company’s investment in unconsolidated affiliate is assessed by comparing the carrying amount of the investment to its estimated fair value and is impaired if any decline in fair value is determined to be other than temporary. Measurement of any impairment loss is based on estimated fair value. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following at December 31: (In millions) 2016 2015 Trade accounts payable $ 110 $ 74 Client deposits 409 330 Settlement obligations 305 224 Accrued compensation and benefits 184 196 Other accrued expenses 234 200 Total $ 1,242 $ 1,024 Income Taxes Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis and net operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is recorded against deferred tax assets if it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component, net of income taxes, consisted of the following: (In millions) Cash Flow Hedges Foreign Currency Translation Other Total Balance at December 31, 2015 $ (31 ) $ (41 ) $ (2 ) $ (74 ) Other comprehensive loss before reclassifications — (9 ) — (9 ) Amounts reclassified from accumulated other comprehensive loss 7 — — 7 Net current-period other comprehensive (loss) income 7 (9 ) — (2 ) Balance at December 31, 2016 $ (24 ) $ (50 ) $ (2 ) $ (76 ) (In millions) Cash Flow Hedges Foreign Currency Translation Other Total Balance at December 31, 2014 $ (41 ) $ (20 ) $ (2 ) $ (63 ) Other comprehensive loss before reclassifications — (21 ) — (21 ) Amounts reclassified from accumulated other comprehensive loss 10 — — 10 Net current-period other comprehensive (loss) income 10 (21 ) — (11 ) Balance at December 31, 2015 $ (31 ) $ (41 ) $ (2 ) $ (74 ) Based on the amounts recorded in accumulated other comprehensive loss at December 31, 2016 , the Company estimates that it will recognize approximately $10 million in interest expense during the next twelve months related to settled interest rate hedge contracts. The Company has entered into foreign currency forward exchange contracts, which have been designated as cash flow hedges, to hedge foreign currency exposure to the Indian Rupee. As of December 31, 2016 , the notional amount of these derivatives was approximately $86 million , and the fair value totaling approximately $1 million is reported in prepaid expenses and other current assets in the consolidated balance sheet. As of December 31, 2015 , the notional amount of these derivatives was approximately $85 million , and the fair value totaling approximately $1 million is reported in accounts payable and accrued expenses in the consolidated balance sheet. Net Income Per Share Net income per share in each period is calculated using actual, unrounded amounts. Basic net income per share is computed using the weighted-average number of common shares outstanding during the year. Diluted net income per share is computed using the weighted-average number of common shares and common stock equivalents outstanding during the year. Common stock equivalents consist of stock options and restricted stock units and are computed using the treasury stock method. In 2016 , 2015 and 2014 , the Company excluded 0.8 million , 0.9 million and 1.2 million weighted-average shares, respectively, from the calculations of common stock equivalents for anti-dilutive stock options. The computation of shares used in calculating basic and diluted net income per share is as follows: (In millions) 2016 2015 2014 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On January 15, 2016, the Company acquired the Convenience Pay Services business of Hewlett Packard Enterprise Company, which enables providers to accept electronic payments from their consumers through multiple channels, thereby expanding the Company’s biller solution offerings. On March 3, 2016, the Company completed its purchase of the Community Financial Services business of ACI Worldwide, Inc., further enhancing the Company’s suite of digital banking and payments solutions. The Company acquired these businesses for an aggregate purchase price of $265 million . During the third quarter of 2016, the Company finalized the purchase price allocations based upon final valuations of intangible assets. The final purchase price allocations for these acquisitions did not materially change from the preliminary allocations and resulted in technology and customer intangible assets totaling approximately $80 million , goodwill of $173 million , and other identifiable net assets of approximately $12 million consisting primarily of accounts receivable. The goodwill, recognized within the Payments segment, from these transactions is deductible for tax purposes and is primarily attributed to synergies and anticipated revenue and earnings growth associated with the products and services that these businesses provide. The results of operations for these acquired businesses, including revenue of $86 million in 2016, have been included in the accompanying consolidated statements of income from the dates of acquisition. As a result of these acquisitions, the Company incurred merger and integration costs, including a $10 million non-cash impairment charge in the first quarter of 2016 related to the Company’s decision to replace existing software with an acquired solution. The related impairment charge was recorded in cost of processing and services within Corporate and Other as such amount is excluded from the Company’s measure of the Payments segment’s operating performance. Pro forma information for these acquisitions is not provided because they did not have a material effect on the Company’s consolidated results of operations. |
Investment in Unconsolidated Af
Investment in Unconsolidated Affiliate | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Unconsolidated Affiliate | Investment in Unconsolidated Affiliate The Company owns a 49% interest in StoneRiver Group, L.P. (“StoneRiver”), which is accounted for as an equity method investment, and reports its share of StoneRiver’s net income as income from investment in unconsolidated affiliate. The Company’s investment in StoneRiver was $14 million and $17 million at December 31, 2016 and 2015 , respectively, and is reported within other long-term assets in the consolidated balance sheets. To the extent that the Company's cost basis is different than the basis reflected at the unconsolidated affiliate level, the basis difference is generally amortized over the lives of the related assets and included in the Company's share of equity in earnings of the unconsolidated affiliate. In 2016 , 2015 and 2014 , the Company received cash dividends, funded from capital transactions, from StoneRiver of $151 million , $36 million and $110 million , respectively, which were recorded as reductions in the Company’s investment in StoneRiver. The dividends, in their entirety, represented returns on the Company's investment and are reported in cash flows from operating activities. During the first quarter of 2016, StoneRiver recognized a gain on the sale of a business interest in which the Company’s pre-tax share of this gain was $190 million . During the first quarter of 2016, the Company also received cash dividends of $140 million from StoneRiver, which were funded from the sale transaction and recorded as reductions in the Company’s investment in StoneRiver. In conjunction with this activity, the Company evaluated its equity method investment in StoneRiver for its ability to recover the remaining carrying amount of such investment. Utilizing a discounted cash flow analysis (level 3 of the fair value hierarchy) to arrive at a measure of the investment’s fair value, the Company recognized an impairment loss of $44 million . The Company's $146 million pre-tax share of the gain, net of the impairment loss was recorded within income from investment in unconsolidated affiliate, with the related tax expense of $54 million recorded through the income tax provision, in the consolidated statements of income. During 2015 and 2014, StoneRiver recognized net gains on the sales of subsidiary businesses. The Company’s pre-tax share of the net gains and related expenses on these transactions of $29 million in 2015 and $87 million in 2014 was recorded within income from investment in unconsolidated affiliate, with the related tax expenses of $13 million and $36 million , respectively, recorded through the income tax provision, in the accompanying consolidated statements of income. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The Company’s long-term debt, net of discounts and debt issuance costs, consisted of the following at December 31: (In millions) 2016 2015 Revolving credit facility $ 647 $ 379 Term loan 629 628 2.7% senior notes due 2020 845 843 4.625% senior notes due 2020 448 448 4.75% senior notes due 2021 398 397 3.5% senior notes due 2022 695 694 3.85% senior notes due 2025 893 893 Other borrowings 7 11 Total debt 4,562 4,293 Less: current maturities (95 ) (5 ) Long-term debt $ 4,467 $ 4,288 The estimated fair value of total debt was $4.7 billion and $4.3 billion at December 31, 2016 and 2015 , respectively. The Company was in compliance with all financial debt covenants during 2016 . Annual maturities of the Company’s total debt were as follows at December 31, 2016 : (In millions) Year ending December 31, 2017 $ 95 2018 540 2019 1 2020 1,940 2021 398 Thereafter 1,588 Total $ 4,562 Revolving Credit Facility The Company maintains a $2.0 billion revolving credit agreement with a syndicate of banks that matures in April 2020. Borrowings under the revolving credit facility bear interest at a variable rate based on LIBOR or on a base rate, plus a specified margin based on the Company's long-term debt rating in effect from time to time. The variable interest rate on the revolving credit facility borrowings was 1.81% at December 31, 2016 . There are no significant commitment fees and no compensating balance requirements. The revolving credit facility contains various restrictions and covenants that require the Company, among other things, to: (i) limit its consolidated indebtedness as of the end of each fiscal quarter to no more than three and one-half times consolidated net earnings before interest, taxes, depreciation and amortization and certain other adjustments during the period of four fiscal quarters then ended, and (ii) maintain consolidated net earnings before interest, taxes, depreciation and amortization and certain other adjustments of at least three times consolidated interest expense as of the end of each fiscal quarter for the period of four fiscal quarters then ended. Term Loan The Company maintains a term loan with a syndicate of banks that matures in October 2018 and bears interest at a variable rate based on LIBOR or on a base rate, plus a specified margin based on the Company’s long-term debt rating in effect from time to time. The variable interest rate on the term loan borrowings was 2.02% at December 31, 2016 . A scheduled principal payment of $90 million is due on December 31, 2017, with the outstanding principal balance of $540 million due at maturity. The term loan facility contains various restrictions and covenants substantially similar to those contained in the revolving credit facility described above. Senior Notes In May 2015, the Company completed an offering of $1.75 billion of senior notes comprised of $850 million aggregate principal amount of 2.7% senior notes due in June 2020 and $900 million aggregate principal amount of 3.85% senior notes due in June 2025. The notes pay interest at the stated rates semi-annually on June 1 and December 1, which commenced on December 1, 2015. The Company’s 4.625% senior notes due in October 2020 and 3.5% senior notes due in October 2022 pay interest at the stated rates on April 1 and October 1 of each year. The Company’s 4.75% senior notes due in June 2021 pay interest at the stated rate on June 15 and December 15 of each year. The interest rates applicable to the senior notes are subject to an increase of up to two percent in the event that the Company’s credit rating is downgraded below investment grade. The indentures governing the senior notes contain covenants that, among other matters, limit (i) the Company’s ability to consolidate or merge into, or convey, transfer or lease all or substantially all of its properties and assets to, another person; (ii) the Company’s and certain of its subsidiaries’ ability to create or assume liens, and (iii) the Company’s and certain of its subsidiaries’ ability to engage in sale and leaseback transactions. In October 2015, the Company used its available borrowings under the revolving credit facility to repay the $300 million aggregate principal amount of 3.125% senior notes. In May 2015, the Company used the net proceeds from the offering described above to redeem its $600 million aggregate principal amount of 3.125% senior notes due in June 2016 and $500 million aggregate principal amount of 6.8% senior notes due in November 2017. The Company recorded a pre-tax loss on early debt extinguishment of $85 million related to make-whole payments and other costs associated with this redemption. In addition, the Company paid scheduled December 2015 and December 2016 principal payments on the term loan totaling $180 million and repaid, at that time, outstanding borrowings under the revolving credit facility. The remaining net proceeds from the offering were used for general corporate purposes. Debt Issuance Costs Debt issuance costs are amortized as a component of interest expense over the term of the underlying debt using the effective interest method. Debt issuance costs related to the Company's term loan and senior notes totaled $17 million and $21 million at December 31, 2016 and 2015 , respectively, and are reported as a direct reduction of the related debt instrument in the consolidated balance sheets. Debt issuance costs related to the Company's revolving credit facility are reported in other long-term assets in the consolidated balance sheets and totaled $5 million and $7 million at December 31, 2016 and 2015 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Substantially all of the Company's pre-tax earnings are derived from domestic operations in all periods presented. A reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate for continuing operations is as follows: 2016 2015 2014 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal effect 2.9 % 1.8 % 2.6 % Unconsolidated affiliate tax 4.2 % 1.1 % 3.4 % Domestic production activities deduction (3.0 )% (2.1 )% (4.1 )% Other, net (0.5 )% (0.1 )% (0.3 )% Effective income tax rate 38.6 % 35.7 % 36.6 % The income tax provision for continuing operations was as follows: (In millions) 2016 2015 2014 Current: Federal $ 402 $ 315 $ 331 State 53 31 40 Foreign 16 11 10 471 357 381 Deferred: Federal 21 22 (4 ) State 5 (2 ) 6 Foreign (5 ) — 1 21 20 3 Income tax provision $ 492 $ 377 $ 384 Significant components of deferred tax assets and liabilities consisted of the following at December 31: (In millions) 2016 2015 Accrued expenses $ 48 $ 49 Interest rate hedge contracts 16 20 Share-based compensation 57 51 Net operating loss and credit carry-forwards 85 102 Deferred revenue 26 49 Other 15 12 Subtotal 247 283 Valuation allowance (35 ) (35 ) Total deferred tax assets 212 248 Capitalized software development costs (156 ) (142 ) Intangible assets (681 ) (700 ) Property and equipment (67 ) (68 ) Other (44 ) (42 ) Total deferred tax liabilities (948 ) (952 ) Total $ (736 ) $ (704 ) Deferred tax assets and liabilities are reported in the consolidated balance sheets as follows at December 31: (In millions) 2016 2015 Noncurrent assets $ 26 $ 22 Noncurrent liabilities (762 ) (726 ) Total $ (736 ) $ (704 ) Noncurrent deferred tax assets are included in other long-term assets at December 31, 2016 and 2015 . Unrecognized tax benefits were as follows: (In millions) 2016 2015 2014 Unrecognized tax benefits - Beginning of year $ 54 $ 55 $ 60 Increases for tax positions taken during the current year 9 10 9 Increases for tax positions taken in prior years 1 — 10 Decreases for tax positions taken in prior years (15 ) (10 ) (21 ) Decreases for settlements (2 ) (1 ) (1 ) Lapse of the statute of limitations (2 ) — (2 ) Unrecognized tax benefits - End of year $ 45 $ 54 $ 55 At December 31, 2016 , unrecognized tax benefits of $35 million , net of federal and state benefits, would affect the effective income tax rate from continuing operations if recognized. In 2017 , reductions to unrecognized tax benefits for decreases in tax positions taken in prior years, settlements and the lapse of statutes of limitations are estimated to total approximately $9 million . The Company classifies interest expense and penalties related to income taxes as components of its income tax provision. The income tax provision from continuing operations included interest expense and penalties on unrecognized tax benefits of less than $1 million in each of 2016 , 2015 and 2014 . Accrued interest expense and penalties related to unrecognized tax benefits totaled $2 million and $4 million at December 31, 2016 and 2015 , respectively. The Company’s federal tax returns for 2012 and 2014 through 2016 and tax returns in certain states and foreign jurisdictions for 2006 through 2016 remain subject to examination by taxing authorities. At December 31, 2016 , the Company had federal net operating loss carry-forwards of $84 million , which expire in 2017 through 2031, state net operating loss carry-forwards of $561 million , which expire in 2017 through 2036, and foreign net operating loss carry-forwards of $120 million , $47 million of which expire in 2017 through 2036, and the remainder of which do not expire. |
Employee Stock and Savings Plan
Employee Stock and Savings Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Stock and Savings Plans | Employee Stock and Savings Plans Stock Plans The Company recognizes the fair value of share-based compensation awards granted to employees in cost of processing and services, cost of product, and selling, general and administrative expense in its consolidated statements of income. The Company’s share-based compensation primarily consists of the following: Stock Options – The Company grants stock options to employees and non-employee directors at exercise prices equal to the fair market value of the Company’s stock on the dates of grant, which are typically in the first quarter of the year. Stock options generally vest over a three -year period beginning on the first anniversary of the grant. All stock options expire ten years from the date of the award. The Company recognizes compensation expense for the fair value of the stock options over the requisite service period of the stock option award. Restricted Stock Units – The Company awards restricted stock units to employees and non-employee directors. The Company recognizes compensation expense for restricted stock units based on the market price of the common stock on the date of award over the period during which the awards vest. Restricted stock units generally vest over a three -year period beginning on the second anniversary of the award. Performance Share Units – The Company awards performance share units to employees. The number of shares issued at the end of the performance period is determined by the level of achievement of pre-determined earnings and revenue growth performance goals. The Company recognizes the expense, which is determined by utilizing a probability assessment that the performance goals will be achieved, ratably over the requisite performance period of the award. Employee Stock Purchase Plan – The Company maintains an employee stock purchase plan that allows eligible employees to purchase a limited number of shares of common stock each quarter through payroll deductions at 85% of the closing price of the Company’s common stock on the last business day of each calendar quarter. The Company recognizes compensation expense related to the 15% discount on the purchase date. Share-based compensation expense was $68 million in 2016 , $65 million in 2015 and $49 million in 2014 . Share-based compensation in 2016 includes expense recognized on performance share units as management views the performance goals as probable of attainment. The income tax benefits related to share-based compensation totaled $23 million , $22 million and $17 million in 2016 , 2015 and 2014 , respectively. At December 31, 2016 , the total remaining unrecognized compensation cost for unvested stock options, restricted stock units and performance share units, net of estimated forfeitures, of $85 million is expected to be recognized over a weighted-average period of 2.3 years. The weighted-average estimated fair value of stock options granted during 2016 , 2015 and 2014 was $31.47 , $25.51 and $18.90 per share, respectively. The fair values of stock options granted were estimated on the date of grant using a binomial option-pricing model with the following assumptions: 2016 2015 2014 Expected life (in years) 6.4 6.4 6.3 Average risk-free interest rate 1.9 % 1.9 % 2.0 % Expected volatility 29.3 % 29.2 % 29.6 % Expected dividend yield 0 % 0 % 0 % The Company determined the expected life of stock options using historical data adjusted for known factors that could alter historical exercise behavior. The risk-free interest rate is based on the U.S. treasury yield curve in effect as of the grant date. Expected volatility is determined using weighted-average implied market volatility combined with historical volatility. The Company believes that a blend of historical volatility and implied volatility better reflects future market conditions and better indicates expected volatility than purely historical volatility. A summary of stock option activity is as follows: Shares (In thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In millions) Stock options outstanding - December 31, 2015 8,589 $ 40.00 Granted 1,010 97.07 Forfeited (105 ) 80.34 Exercised (1,751 ) 35.02 Stock options outstanding - December 31, 2016 7,743 $ 48.03 5.6 $ 451 Stock options exercisable - December 31, 2016 5,667 $ 35.32 4.5 $ 402 A summary of restricted stock and performance share unit activity is as follows: Restricted Stock Units Performance Share Units Shares (In thousands) Weighted- Average Grant Date Fair Value Shares Weighted- Units - December 31, 2015 1,560 $ 50.72 — $ — Granted 374 97.32 150 100.68 Forfeited (78 ) 68.18 (1 ) 96.65 Vested (592 ) 45.09 — — Units - December 31, 2016 1,264 $ 66.04 149 $ 100.66 The table below presents additional information related to stock option and restricted stock unit activity: (In millions) 2016 2015 2014 Total intrinsic value of stock options exercised $ 113 $ 123 $ 43 Fair value of restricted stock units vested 58 41 35 Income tax benefit from stock options exercised and restricted stock units vested 62 61 29 Cash received from stock options exercised 39 35 33 As of December 31, 2016 , 19.0 million share-based awards were available for grant under the Fiserv, Inc. 2007 Omnibus Incentive Plan. Under its employee stock purchase plan, the Company issued 0.5 million shares in each of 2016 and 2015 , and 0.6 million shares in 2014 . As of December 31, 2016 , there were 9.4 million shares available for issuance under the employee stock purchase plan. The number of shares remaining available for future issuance under the employee stock purchase plan is subject to an annual increase on the first day of each fiscal year equal to the lesser of (i) 2.0 million shares, (ii) 1% of the shares of the Company’s common stock outstanding on such date or (iii) a lesser amount determined by the Company’s board of directors. Employee Savings Plans The Company and its subsidiaries have defined contribution savings plans covering substantially all employees. Under the plans, eligible participants may elect to contribute a specified percentage of their salaries and the Company makes matching contributions, each subject to certain limitations. Expenses for company contributions under these plans totaled $42 million , $40 million and $37 million in 2016 , 2015 and 2014 , respectively. |
Leases, Commitments and Conting
Leases, Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Leases, Commitments and Contingencies | Leases, Commitments and Contingencies Leases The Company leases certain facilities and equipment under operating leases. Most leases contain renewal options for varying periods. Future minimum rental payments on operating leases with initial non-cancellable lease terms in excess of one year were due as follows at December 31, 2016 : (In millions) Year ending December 31, 2017 $ 107 2018 91 2019 68 2020 35 2021 28 Thereafter 95 Total $ 424 Rent expense for all operating leases was $117 million , $115 million and $108 million during 2016 , 2015 and 2014 , respectively. Commitments and Contingencies Litigation In the normal course of business, the Company or its subsidiaries are named as defendants in lawsuits in which claims are asserted against the Company. In the opinion of management, the liabilities, if any, which may ultimately result from such lawsuits are not expected to have a material adverse effect on the Company’s consolidated financial statements. Electronic Payments Transactions In connection with the Company’s processing of electronic payments transactions, funds received from subscribers are invested from the time the Company collects the funds until payments are made to the applicable recipients. These subscriber funds are invested in short-term, highly liquid investments. Subscriber funds, which are not included in the Company’s consolidated balance sheets, can fluctuate significantly based on consumer bill payment and debit card activity and totaled approximately $1.9 billion at December 31, 2016 . Indemnifications and Warranties Subject to limitations and exclusions, the Company may indemnify its clients from certain costs resulting from claims of patent, copyright or trademark infringement associated with its clients’ use of the Company’s products or services. The Company may also warrant to clients that its products and services will operate substantially in accordance with identified specifications. From time to time, in connection with sales of businesses, the Company agrees to indemnify the buyers for liabilities associated with the businesses that are sold. Payments, net of recoveries, under such indemnification or warranty provisions were not material to the Company’s consolidated results of operations or financial position. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information The Company’s operations are comprised of the Payments segment and the Financial segment. The Payments segment primarily provides electronic bill payment and presentment services, internet and mobile banking software and services, person-to-person payment services, debit and credit card processing and services, and other electronic payments software and services. The businesses in this segment also provide card and print personalization services, investment account processing services for separately managed accounts, and fraud and risk management products and services. The Financial segment provides banks, thrifts, credit unions, and leasing and finance companies with account processing services, item processing and source capture services, loan origination and servicing products, cash management and consulting services, and other products and services that support numerous types of financial transactions. Corporate and Other primarily consists of unallocated corporate expenses including share-based compensation, amortization of acquisition-related intangible assets, intercompany eliminations and other costs that are not considered when management evaluates segment performance. (In millions) Payments Financial Corporate and Other Total 2016 Processing and services revenue $ 2,334 $ 2,285 $ 6 $ 4,625 Product revenue 756 192 (68 ) 880 Total revenue 3,090 2,477 (62 ) 5,505 Operating income 943 823 (321 ) 1,445 Total assets 6,143 3,287 313 9,743 Capital expenditures 161 125 4 290 Depreciation and amortization expense 138 89 184 411 2015 Processing and services revenue $ 2,159 $ 2,256 $ (4 ) $ 4,411 Product revenue 703 187 (47 ) 843 Total revenue 2,862 2,443 (51 ) 5,254 Operating income 840 826 (355 ) 1,311 Total assets 5,833 3,242 265 9,340 Capital expenditures 230 119 10 359 Depreciation and amortization expense 119 76 222 417 2014 Processing and services revenue $ 2,030 $ 2,195 $ (6 ) $ 4,219 Product revenue 717 172 (42 ) 847 Total revenue 2,747 2,367 (48 ) 5,066 Operating income 768 773 (331 ) 1,210 Total assets 5,850 3,225 233 9,308 Capital expenditures 176 107 9 292 Depreciation and amortization expense 102 71 231 404 Revenue from clients outside the United States comprised approximately 5% of total revenue in 2016 and 6% in each of 2015 and 2014 . |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | Quarterly Financial Data (unaudited) Quarterly financial data for 2016 and 2015 was as follows: (In millions, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Full Year 2016 Total revenue $ 1,331 $ 1,363 $ 1,380 $ 1,431 $ 5,505 Cost of processing and services 553 547 551 561 2,212 Cost of product 181 180 186 200 747 Selling, general and administrative expenses 258 274 274 295 1,101 Total expenses 992 1,001 1,011 1,056 4,060 Operating income 339 362 369 375 1,445 Net income (1) 289 212 214 215 930 Comprehensive income 294 207 219 208 928 Net income per share: (2) Basic $ 1.30 $ 0.95 $ 0.98 $ 0.99 $ 4.22 Diluted $ 1.27 $ 0.94 $ 0.96 $ 0.98 $ 4.15 2015 Total revenue $ 1,275 $ 1,298 $ 1,313 $ 1,368 $ 5,254 Cost of processing and services 542 542 541 553 2,178 Cost of product 181 168 172 210 731 Selling, general and administrative expenses 238 262 258 276 1,034 Total expenses 961 972 971 1,039 3,943 Operating income 314 326 342 329 1,311 Net income (3) 178 127 218 189 712 Comprehensive income 170 132 209 190 701 Net income per share: (2) Basic $ 0.75 $ 0.54 $ 0.94 $ 0.83 $ 3.04 Diluted $ 0.73 $ 0.53 $ 0.92 $ 0.81 $ 2.99 _____ (1) During the first quarter of 2016, the Company recognized $146 million associated with its pre-tax share of a net gain on the sale of a business interest by StoneRiver, with related tax expense of $54 million . Refer to Note 3 for more information regarding the Company's investment in StoneRiver. (2) Net income per share in each period is calculated using actual, unrounded amounts. (3) In May 2015, the Company recorded a pre-tax loss on early debt extinguishment of $85 million associated with the redemption of certain of its senior notes funded from the proceeds of a public offering of senior notes. Refer to Note 4 for more information regarding the Company's long-term debt. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Fiserv, Inc. and all 100% owned subsidiaries. Investments in less than 50% owned affiliates in which the Company has significant influence but not control are accounted for using the equity method of accounting. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates Step 2 of the goodwill impairment test that had required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit's carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 will be effective prospectively for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or those beginning after January 1, 2017 if early adopted. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance and providing a more robust framework to assist reporting organizations with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. For public entities, ASU 2017-01 is effective prospectively for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for transactions occurring before the issuance or effective date of the standard for which financial statements have not yet been issued. The Company does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which eliminates the current prohibition on immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory, with the intent of reducing complexity and diversity in practice. Under ASU 2016-16, entities must recognize the income tax consequences when the transfer occurs rather than deferring recognition. For public entities, ASU 2016-16 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted as of the beginning of a fiscal year. Entities must apply the guidance on a modified retrospective basis though a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company does not expect the adoption of ASU 2016-16 to have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which adds or clarifies guidance on the presentation and classification of eight specific types of cash receipts and cash payments in the statement of cash flows, with the intent of reducing diversity in practice. For public entities, ASU 2016-15 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. Entities must apply the guidance retrospectively to all periods presented; however, entities may apply prospectively if retrospective application is impracticable. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”), which prescribes an impairment model for most financial assets based on expected losses rather than incurred losses. Under this model, an estimate of expected credit losses over the contractual life of the instrument is to be recorded as of the end of a reporting period as an allowance to offset the amortized cost basis, resulting in a net presentation of the amount expected to be collected on the financial asset. For public entities, ASU 2016-13 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For most instruments, entities must apply the standard using a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year of adoption. The Company is currently assessing the impact that the adoption of ASU 2016-13 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies several aspects of the accounting for share-based payment awards, including the accounting for income taxes and forfeitures, as well as classification in the statement of cash flows. The standard requires that all tax effects related to share-based payments be recorded as income tax expense or benefit in the income statement at settlement or expiration and, accordingly, excess tax benefits and tax deficiencies be presented as operating activities in the statement of cash flows. For public entities, ASU 2016-09 is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods, with early adoption permitted in any interim or annual period for which financial statements have not yet been issued. The recognition of all excess tax benefits and tax deficiencies in the income statement, as well as related changes to the computation of diluted earnings per share, is to be applied prospectively. Entities may elect to apply the change in presentation in the statement of cash flows either prospectively or retrospectively to all periods presented. The impact of adopting this standard on the Company’s consolidated financial statements is dependent upon the intrinsic value of share-based compensation awards at the time of exercise or vesting and may result in more variability in effective tax rates and net earnings, and may also impact the dilution of common stock equivalents. The Company recorded $46 million , $47 million and $18 million in 2016, 2015 and 2014, respectively, to consolidated equity as excess tax benefits from share-based compensation awards. The Company plans to adopt ASU 2016-09 in the first quarter of 2017 and intends to apply the change in presentation in the statement of cash flows on a prospective basis. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize a lease liability and a right-of-use asset for each lease with a term longer than twelve months. The recognized liability is measured at the present value of lease payments not yet paid, and the corresponding asset represents the lessee’s right to use the underlying asset over the lease term and is based on the liability, subject to certain adjustments. For income statement purposes, the standard retains the dual model with leases classified as either operating or finance. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. For public entities, ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The standard requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements of financial instruments. For public entities, ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted for certain provisions of the standard. Entities must apply the standard, with certain exceptions, using a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year of adoption. The Company is currently assessing the impact that the adoption of ASU 2016-01 will have on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), to clarify the principles of recognizing revenue and to create common revenue recognition guidance between U.S. generally accepted accounting principles and International Financial Reporting Standards. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This model involves a five-step process for achieving that core principle, along with comprehensive disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , to defer the effective date of the new revenue standard for one year and permit early adoption as of the original effective date in ASU 2014-09. For public entities, the new revenue standard is effective for annual and interim periods beginning after December 15, 2017. The Company plans to adopt ASU 2014-09 on January 1, 2018. The Company has performed a review of the requirements of the new revenue standard and related ASUs and is monitoring the activity of the FASB and the transition resource group as it relates to specific interpretive guidance. The Company is reviewing customer contracts and is in the process of applying the five-step model of the new revenue standard to each of its key identified revenue streams included within either processing and services revenue or product revenue and is comparing the results to its current accounting practices. While the Company continues to assess all potential impacts of adopting this new revenue standard on its consolidated financial statements, it currently believes the new revenue standard will not have a significant impact on the accounting for stand-ready account- and transaction-based processing fees, the Company’s most significant revenue stream. Areas that the Company currently expects will be impacted by the new revenue standard include the accounting for costs to obtain a contract, such as commissions for sales personnel, which are currently expensed as incurred, and the timing of revenue recognition of certain termination fees over the modified contract term, which will generally result in an acceleration of revenue as compared to our current accounting practice. Entities have the option of adopting this new guidance using either a full retrospective or a modified approach with the cumulative effect of applying the guidance recognized at the date of initial application. The Company is currently evaluating the transition method to elect as well as necessary control and process changes due to implementing the new revenue standard. |
Fair Value Measurements | Fair Value Measurements The Company applies fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in its consolidated financial statements on a recurring basis. Fair value represents the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability. The fair values of cash equivalents, trade accounts receivable, settlement assets and obligations, accounts payable, and client deposits approximate their respective carrying values due to the short period of time to maturity. The estimated fair value of total debt is described in Note 4 and was based on quoted prices in active markets for the Company's senior notes (level 1 of the fair value hierarchy) and discounted cash flows based on the Company’s current incremental borrowing rate for its term loan (level 3 of the fair value hierarchy). The fair value of the Company’s revolving credit facility borrowings approximates carrying value as the underlying interest rate is variable based on LIBOR. |
Derivatives | Derivatives Derivatives are recorded in the consolidated balance sheets as either an asset or liability measured at fair value. If the derivative is designated as a cash flow hedge, the effective portions of the changes in the fair value of the derivative are recorded as a component of accumulated other comprehensive loss and recognized in the consolidated statements of income when the hedged item affects earnings. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative are recognized in earnings. To the extent the fair value hedge is effective, there is an offsetting adjustment to the basis of the item being hedged. Ineffective portions of changes in the fair value of hedges are recognized in earnings. The Company’s policy is to enter into derivatives with creditworthy institutions and not to enter into such derivatives for speculative purposes. |
Foreign Currency | Foreign Currency Foreign currency denominated assets and liabilities, where the functional currency is the local currency, are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average exchange rates during the period. Gains and losses from foreign currency translation are recorded as a separate component of accumulated other comprehensive loss. |
Revenue Recognition | Revenue Recognition The Company generates revenue from the delivery of processing, service and product solutions. Revenue is recognized when written contracts are signed, delivery has occurred, the fees are fixed or determinable, and collectability is reasonably assured. Processing and services revenue is recognized as services are provided and is primarily derived from contracts that generate account- and transaction-based fees for data processing, transaction processing, electronic billing and payment services, electronic funds transfer, and debit processing services. In addition, processing and services revenue is derived from the fulfillment of professional services, including consulting activities. Certain of the Company’s revenue is generated from multiple element arrangements involving various combinations of product and service deliverables. The deliverables within these arrangements are evaluated at contract inception to determine whether they represent separate units of accounting, and if so, contract consideration is allocated to each deliverable based on relative selling price. The relative selling price is determined using vendor specific objective evidence of fair value, third-party evidence or best estimate of selling price. Revenue is then recognized in accordance with the appropriate revenue recognition guidance applicable to the respective elements. Also included in processing and services revenue is software maintenance fee revenue for ongoing client support, which is recognized ratably over the term of the applicable support period, generally 12 months . Deferred revenue consists primarily of advance cash receipts for services and is recognized as revenue when the services are provided. Product revenue is primarily derived from integrated print and card production sales, as well as software license sales which represented less than 4% of total revenue. For software license agreements that do not require significant customization or modification, the Company recognizes software license revenue upon delivery, assuming persuasive evidence of an arrangement exists, the license fee is fixed or determinable, and collection is reasonably assured. Arrangements with customers that include significant customization, modification or production of software are accounted for under contract accounting, with revenue recognized using the percentage-of-completion method based upon efforts-expended, such as labor hours, to measure progress towards completion. Changes in estimates for revenues, costs and profits are recognized in the period in which they are determinable and were not material for any period presented. The Company includes reimbursements from clients, such as postage and telecommunication costs, in processing and services revenue and product revenue, while the related costs are included in cost of processing and services and cost of product. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses primarily consist of: salaries, wages, commissions and related expenses paid to sales personnel, administrative employees and management; advertising and promotional costs; depreciation and amortization; and other selling and administrative expenses. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and investments with original maturities of 90 days or less. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company analyzes the collectibility of trade accounts receivable by considering historical bad debts, client creditworthiness, current economic trends, changes in client payment terms and collection trends when evaluating the adequacy of the allowance for doubtful accounts. Any change in the assumptions used in analyzing a specific account receivable may result in an additional allowance for doubtful accounts being recognized in the period in which the change occurs. |
Prepaid Expenses | Prepaid Expenses Prepaid expenses represent advance payments for goods and services to be consumed in the future, such as maintenance, postage and insurance, and totaled $141 million and $146 million at December 31, 2016 and 2015 , respectively. |
Settlement Assets and Obligations | Settlement Assets and Obligations Settlement assets of $312 million and $230 million were included in prepaid expenses and other current assets at December 31, 2016 and 2015 , respectively, and settlement obligations of $305 million and $224 million were included in accounts payable and accrued expenses at December 31, 2016 and 2015 , respectively. Settlement assets and obligations result from timing differences between collection and fulfillment of payment transactions primarily associated with the Company’s walk-in and expedited bill payment service businesses. Settlement assets represent cash received or amounts receivable from agents, payment networks or directly from consumers. Settlement obligations represent amounts payable to clients and payees. |
Property and Equipment | Property and Equipment Property and equipment are reported at cost. Depreciation of property and equipment is computed primarily using the straight-line method over the shorter of the estimated useful life of the asset or the leasehold period, if applicable. |
Intangible Assets | Intangible Assets Intangible assets consisted of the following at December 31: (In millions) Gross Carrying Amount Accumulated Amortization Net Book Value 2016 Customer related intangible assets $ 2,200 $ 1,043 $ 1,157 Acquired software and technology 507 432 75 Trade names 117 57 60 Capitalized software development costs 641 233 408 Purchased software 230 97 133 Total $ 3,695 $ 1,862 $ 1,833 (In millions) Gross Carrying Amount Accumulated Amortization Net Book Value 2015 Customer related intangible assets $ 2,155 $ 922 $ 1,233 Acquired software and technology 488 413 75 Trade names 120 53 67 Capitalized software development costs 575 199 376 Purchased software 256 135 121 Total $ 3,594 $ 1,722 $ 1,872 Customer related intangible assets represent customer contracts and relationships obtained as part of acquired businesses and are amortized over their estimated useful lives, generally 10 to 20 years. Acquired software and technology represents software and technology intangible assets obtained as part of acquired businesses and are amortized over their estimated useful lives, generally four to eight years. Trade names are amortized over their estimated useful lives, generally 10 to 20 years. Amortization expense for acquired intangible assets, which include customer related intangible assets, acquired software and technology, and trade names, totaled $158 million , $194 million and $204 million in 2016 , 2015 and 2014 , respectively. The Company continually develops, maintains and enhances its products and systems. Product development expenditures represented approximately 8% of the Company’s total revenue in 2016 and 9% in each of 2015 and 2014 . Research and development costs incurred prior to the establishment of technological feasibility are expensed as incurred. Routine maintenance of software products, design costs and other development costs incurred prior to the establishment of a product’s technological feasibility are also expensed as incurred. Costs are capitalized commencing when the technological feasibility of the software has been established. Capitalized software development costs represent the capitalization of certain costs incurred to develop new software or to enhance existing software which is marketed externally or utilized by the Company to process client transactions. Capitalized software development costs are amortized over their estimated useful lives, generally five years. Gross software development costs capitalized for new products and enhancements to existing products totaled $143 million , $137 million and $129 million in 2016 , 2015 and 2014 , respectively. Amortization of previously capitalized software development costs that have been placed into service was $106 million , $92 million and $82 million in 2016 , 2015 and 2014 , respectively. Purchased software represents software licenses purchased from third parties and is amortized over their estimated useful lives, generally three to five years. Amortization of purchased software totaled $40 million , $33 million and $29 million in 2016 , 2015 and 2014 , respectively. The Company estimates that annual amortization expense with respect to acquired intangible assets recorded at December 31, 2016 will be approximately $150 million in 2017 , $140 million in each of 2018 and 2019 , $120 million in 2020 , and $110 million in 2021 . Annual amortization expense in 2017 with respect to capitalized and purchased software recorded at December 31, 2016 is estimated to approximate $150 million . |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired and liabilities assumed in a business combination. The Company evaluates goodwill for impairment on an annual basis, or more frequently if circumstances indicate possible impairment. Goodwill is tested for impairment at a reporting unit level, determined to be at an operating segment level or one level below. When reviewing goodwill for impairment, the Company considers the amount of excess fair value over the carrying value of each reporting unit, the period of time since a reporting unit’s last quantitative test, the extent a reorganization or disposition changes the composition of one or more of the reporting units, and other factors to determine whether or not to first perform a qualitative test. When performing a qualitative test, the Company assesses numerous factors to determine whether it is more likely than not that the fair value of its reporting units are less than their respective carrying values. Examples of qualitative factors that the Company assesses include its share price, its financial performance, market and competitive factors in its industry, and other events specific to its reporting units. If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs a two-step quantitative impairment test by comparing reporting unit carrying values to estimated fair values. |
Asset Impairment | Asset Impairment The Company reviews property and equipment, intangible assets and its investment in unconsolidated affiliate for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company reviews capitalized software development costs for impairment at each balance sheet date. Recoverability of property and equipment, capitalized software development costs, and other intangible assets is assessed by comparing the carrying amount of the asset to the undiscounted future cash flows expected to be generated by the asset. The Company’s investment in unconsolidated affiliate is assessed by comparing the carrying amount of the investment to its estimated fair value and is impaired if any decline in fair value is determined to be other than temporary. Measurement of any impairment loss is based on estimated fair value. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis and net operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is recorded against deferred tax assets if it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. |
Net Income Per Share | Net Income Per Share Net income per share in each period is calculated using actual, unrounded amounts. Basic net income per share is computed using the weighted-average number of common shares outstanding during the year. Diluted net income per share is computed using the weighted-average number of common shares and common stock equivalents outstanding during the year. Common stock equivalents consist of stock options and restricted stock units and are computed using the treasury stock method. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following at December 31: (In millions) Estimated Useful Lives 2016 2015 Land — $ 19 $ 19 Data processing equipment 3 to 5 years 697 662 Buildings and leasehold improvements 5 to 40 years 256 253 Furniture and equipment 5 to 8 years 179 171 1,151 1,105 Less: accumulated depreciation (746 ) (709 ) Total $ 405 $ 396 |
Schedule of intangible assets | Intangible assets consisted of the following at December 31: (In millions) Gross Carrying Amount Accumulated Amortization Net Book Value 2016 Customer related intangible assets $ 2,200 $ 1,043 $ 1,157 Acquired software and technology 507 432 75 Trade names 117 57 60 Capitalized software development costs 641 233 408 Purchased software 230 97 133 Total $ 3,695 $ 1,862 $ 1,833 (In millions) Gross Carrying Amount Accumulated Amortization Net Book Value 2015 Customer related intangible assets $ 2,155 $ 922 $ 1,233 Acquired software and technology 488 413 75 Trade names 120 53 67 Capitalized software development costs 575 199 376 Purchased software 256 135 121 Total $ 3,594 $ 1,722 $ 1,872 |
Schedule of changes in goodwill | The changes in goodwill during 2016 and 2015 were as follows: (In millions) Payments Financial Total Goodwill - December 31, 2014 $ 3,440 $ 1,769 $ 5,209 Foreign currency adjustments (3 ) (6 ) (9 ) Goodwill - December 31, 2015 3,437 1,763 5,200 Acquired goodwill 173 — 173 Goodwill - December 31, 2016 $ 3,610 $ 1,763 $ 5,373 |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consisted of the following at December 31: (In millions) 2016 2015 Trade accounts payable $ 110 $ 74 Client deposits 409 330 Settlement obligations 305 224 Accrued compensation and benefits 184 196 Other accrued expenses 234 200 Total $ 1,242 $ 1,024 |
Schedule of changes in accumulated other comprehensive loss by component | Changes in accumulated other comprehensive loss by component, net of income taxes, consisted of the following: (In millions) Cash Flow Hedges Foreign Currency Translation Other Total Balance at December 31, 2015 $ (31 ) $ (41 ) $ (2 ) $ (74 ) Other comprehensive loss before reclassifications — (9 ) — (9 ) Amounts reclassified from accumulated other comprehensive loss 7 — — 7 Net current-period other comprehensive (loss) income 7 (9 ) — (2 ) Balance at December 31, 2016 $ (24 ) $ (50 ) $ (2 ) $ (76 ) (In millions) Cash Flow Hedges Foreign Currency Translation Other Total Balance at December 31, 2014 $ (41 ) $ (20 ) $ (2 ) $ (63 ) Other comprehensive loss before reclassifications — (21 ) — (21 ) Amounts reclassified from accumulated other comprehensive loss 10 — — 10 Net current-period other comprehensive (loss) income 10 (21 ) — (11 ) Balance at December 31, 2015 $ (31 ) $ (41 ) $ (2 ) $ (74 ) |
Computation of shares used in calculating basic and diluted net income per share | The computation of shares used in calculating basic and diluted net income per share is as follows: (In millions) 2016 2015 2014 Weighted-average common shares outstanding used for the calculation of net income per share - basic 220.3 233.9 248.6 Common stock equivalents 3.6 4.1 4.1 Weighted-average common shares outstanding used for the calculation of net income per share - diluted 223.9 238.0 252.7 |
Schedule of supplemental cash flow information | Supplemental Cash Flow Information (In millions) 2016 2015 2014 Interest paid $ 147 $ 150 $ 144 Income taxes paid 408 306 336 Treasury stock purchases settled after the balance sheet date 10 15 19 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt, net of discounts and debt issuance costs | The Company’s long-term debt, net of discounts and debt issuance costs, consisted of the following at December 31: (In millions) 2016 2015 Revolving credit facility $ 647 $ 379 Term loan 629 628 2.7% senior notes due 2020 845 843 4.625% senior notes due 2020 448 448 4.75% senior notes due 2021 398 397 3.5% senior notes due 2022 695 694 3.85% senior notes due 2025 893 893 Other borrowings 7 11 Total debt 4,562 4,293 Less: current maturities (95 ) (5 ) Long-term debt $ 4,467 $ 4,288 |
Schedule of annual maturities of total debt | Annual maturities of the Company’s total debt were as follows at December 31, 2016 : (In millions) Year ending December 31, 2017 $ 95 2018 540 2019 1 2020 1,940 2021 398 Thereafter 1,588 Total $ 4,562 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of statutory federal income tax rate to effective income tax rate | A reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate for continuing operations is as follows: 2016 2015 2014 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal effect 2.9 % 1.8 % 2.6 % Unconsolidated affiliate tax 4.2 % 1.1 % 3.4 % Domestic production activities deduction (3.0 )% (2.1 )% (4.1 )% Other, net (0.5 )% (0.1 )% (0.3 )% Effective income tax rate 38.6 % 35.7 % 36.6 % |
Schedule of income tax provision for continuing operations | The income tax provision for continuing operations was as follows: (In millions) 2016 2015 2014 Current: Federal $ 402 $ 315 $ 331 State 53 31 40 Foreign 16 11 10 471 357 381 Deferred: Federal 21 22 (4 ) State 5 (2 ) 6 Foreign (5 ) — 1 21 20 3 Income tax provision $ 492 $ 377 $ 384 |
Schedule of deferred tax assets and liabilities | Significant components of deferred tax assets and liabilities consisted of the following at December 31: (In millions) 2016 2015 Accrued expenses $ 48 $ 49 Interest rate hedge contracts 16 20 Share-based compensation 57 51 Net operating loss and credit carry-forwards 85 102 Deferred revenue 26 49 Other 15 12 Subtotal 247 283 Valuation allowance (35 ) (35 ) Total deferred tax assets 212 248 Capitalized software development costs (156 ) (142 ) Intangible assets (681 ) (700 ) Property and equipment (67 ) (68 ) Other (44 ) (42 ) Total deferred tax liabilities (948 ) (952 ) Total $ (736 ) $ (704 ) Deferred tax assets and liabilities are reported in the consolidated balance sheets as follows at December 31: (In millions) 2016 2015 Noncurrent assets $ 26 $ 22 Noncurrent liabilities (762 ) (726 ) Total $ (736 ) $ (704 ) |
Schedule of unrecognized tax benefits | Unrecognized tax benefits were as follows: (In millions) 2016 2015 2014 Unrecognized tax benefits - Beginning of year $ 54 $ 55 $ 60 Increases for tax positions taken during the current year 9 10 9 Increases for tax positions taken in prior years 1 — 10 Decreases for tax positions taken in prior years (15 ) (10 ) (21 ) Decreases for settlements (2 ) (1 ) (1 ) Lapse of the statute of limitations (2 ) — (2 ) Unrecognized tax benefits - End of year $ 45 $ 54 $ 55 |
Employee Stock and Savings Pl22
Employee Stock and Savings Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of assumptions used to determine fair value of stock options granted | The fair values of stock options granted were estimated on the date of grant using a binomial option-pricing model with the following assumptions: 2016 2015 2014 Expected life (in years) 6.4 6.4 6.3 Average risk-free interest rate 1.9 % 1.9 % 2.0 % Expected volatility 29.3 % 29.2 % 29.6 % Expected dividend yield 0 % 0 % 0 % |
Summary of stock option activity | A summary of stock option activity is as follows: Shares (In thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In millions) Stock options outstanding - December 31, 2015 8,589 $ 40.00 Granted 1,010 97.07 Forfeited (105 ) 80.34 Exercised (1,751 ) 35.02 Stock options outstanding - December 31, 2016 7,743 $ 48.03 5.6 $ 451 Stock options exercisable - December 31, 2016 5,667 $ 35.32 4.5 $ 402 |
Summary of restricted stock unit an performance share unit activity | A summary of restricted stock and performance share unit activity is as follows: Restricted Stock Units Performance Share Units Shares (In thousands) Weighted- Average Grant Date Fair Value Shares Weighted- Units - December 31, 2015 1,560 $ 50.72 — $ — Granted 374 97.32 150 100.68 Forfeited (78 ) 68.18 (1 ) 96.65 Vested (592 ) 45.09 — — Units - December 31, 2016 1,264 $ 66.04 149 $ 100.66 |
Schedule of additional information related to stock option and restricted stock unit activity | The table below presents additional information related to stock option and restricted stock unit activity: (In millions) 2016 2015 2014 Total intrinsic value of stock options exercised $ 113 $ 123 $ 43 Fair value of restricted stock units vested 58 41 35 Income tax benefit from stock options exercised and restricted stock units vested 62 61 29 Cash received from stock options exercised 39 35 33 |
Leases, Commitments and Conti23
Leases, Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments on operating leases | Future minimum rental payments on operating leases with initial non-cancellable lease terms in excess of one year were due as follows at December 31, 2016 : (In millions) Year ending December 31, 2017 $ 107 2018 91 2019 68 2020 35 2021 28 Thereafter 95 Total $ 424 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | (In millions) Payments Financial Corporate and Other Total 2016 Processing and services revenue $ 2,334 $ 2,285 $ 6 $ 4,625 Product revenue 756 192 (68 ) 880 Total revenue 3,090 2,477 (62 ) 5,505 Operating income 943 823 (321 ) 1,445 Total assets 6,143 3,287 313 9,743 Capital expenditures 161 125 4 290 Depreciation and amortization expense 138 89 184 411 2015 Processing and services revenue $ 2,159 $ 2,256 $ (4 ) $ 4,411 Product revenue 703 187 (47 ) 843 Total revenue 2,862 2,443 (51 ) 5,254 Operating income 840 826 (355 ) 1,311 Total assets 5,833 3,242 265 9,340 Capital expenditures 230 119 10 359 Depreciation and amortization expense 119 76 222 417 2014 Processing and services revenue $ 2,030 $ 2,195 $ (6 ) $ 4,219 Product revenue 717 172 (42 ) 847 Total revenue 2,747 2,367 (48 ) 5,066 Operating income 768 773 (331 ) 1,210 Total assets 5,850 3,225 233 9,308 Capital expenditures 176 107 9 292 Depreciation and amortization expense 102 71 231 404 |
Quarterly Financial Data (una25
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data | Quarterly financial data for 2016 and 2015 was as follows: (In millions, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Full Year 2016 Total revenue $ 1,331 $ 1,363 $ 1,380 $ 1,431 $ 5,505 Cost of processing and services 553 547 551 561 2,212 Cost of product 181 180 186 200 747 Selling, general and administrative expenses 258 274 274 295 1,101 Total expenses 992 1,001 1,011 1,056 4,060 Operating income 339 362 369 375 1,445 Net income (1) 289 212 214 215 930 Comprehensive income 294 207 219 208 928 Net income per share: (2) Basic $ 1.30 $ 0.95 $ 0.98 $ 0.99 $ 4.22 Diluted $ 1.27 $ 0.94 $ 0.96 $ 0.98 $ 4.15 2015 Total revenue $ 1,275 $ 1,298 $ 1,313 $ 1,368 $ 5,254 Cost of processing and services 542 542 541 553 2,178 Cost of product 181 168 172 210 731 Selling, general and administrative expenses 238 262 258 276 1,034 Total expenses 961 972 971 1,039 3,943 Operating income 314 326 342 329 1,311 Net income (3) 178 127 218 189 712 Comprehensive income 170 132 209 190 701 Net income per share: (2) Basic $ 0.75 $ 0.54 $ 0.94 $ 0.83 $ 3.04 Diluted $ 0.73 $ 0.53 $ 0.92 $ 0.81 $ 2.99 _____ (1) During the first quarter of 2016, the Company recognized $146 million associated with its pre-tax share of a net gain on the sale of a business interest by StoneRiver, with related tax expense of $54 million . Refer to Note 3 for more information regarding the Company's investment in StoneRiver. (2) Net income per share in each period is calculated using actual, unrounded amounts. (3) In May 2015, the Company recorded a pre-tax loss on early debt extinguishment of $85 million associated with the redemption of certain of its senior notes funded from the proceeds of a public offering of senior notes. Refer to Note 4 for more information regarding the Company's long-term debt. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Tax benefits from share-based compensation | $ 46 | $ 47 | $ 18 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Applicable client support period for software maintenance fee revenue recognition | 12 months |
License revenue as a percentage of total revenue (less than) | 4.00% |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 15 | $ 11 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Prepaid Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Prepaid expenses | $ 141 | $ 146 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Settlement Assets and Obligations (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Settlement assets | $ 312 | $ 230 |
Settlement obligations | $ 305 | $ 224 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,151 | $ 1,105 | |
Less: accumulated depreciation | (746) | (709) | |
Total | 405 | 396 | |
Depreciation expense | 90 | 80 | $ 71 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 19 | 19 | |
Data processing equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 697 | 662 | |
Data processing equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 3 years | ||
Data processing equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 256 | 253 | |
Buildings and leasehold improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Buildings and leasehold improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 40 years | ||
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 179 | $ 171 | |
Furniture and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Furniture and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 8 years |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Schedule of Intangible Assets by Class (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,695 | $ 3,594 |
Accumulated Amortization | 1,862 | 1,722 |
Net Book Value | 1,833 | 1,872 |
Customer related intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,200 | 2,155 |
Accumulated Amortization | 1,043 | 922 |
Net Book Value | 1,157 | 1,233 |
Acquired software and technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 507 | 488 |
Accumulated Amortization | 432 | 413 |
Net Book Value | 75 | 75 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 117 | 120 |
Accumulated Amortization | 57 | 53 |
Net Book Value | 60 | 67 |
Capitalized software development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 641 | 575 |
Accumulated Amortization | 233 | 199 |
Net Book Value | 408 | 376 |
Purchased software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 230 | 256 |
Accumulated Amortization | 97 | 135 |
Net Book Value | $ 133 | $ 121 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense for acquired intangible assets | $ 158 | $ 194 | $ 204 |
Product development expenditures as percentage of total revenue | 8.00% | 9.00% | 9.00% |
Customer related intangible assets | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful lives | 10 years | ||
Customer related intangible assets | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful lives | 20 years | ||
Acquired software and technology | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful lives | 4 years | ||
Acquired software and technology | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful lives | 8 years | ||
Trade names | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful lives | 10 years | ||
Trade names | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful lives | 20 years | ||
Capitalized software development costs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful lives | 5 years | ||
Gross software development costs | $ 143 | $ 137 | $ 129 |
Amortization of previously capitalized software development costs | 106 | 92 | 82 |
Purchased software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense for intangible assets | $ 40 | $ 33 | $ 29 |
Purchased software | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful lives | 3 years | ||
Purchased software | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful lives | 5 years | ||
Acquired intangible assets | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2,017 | $ 150 | ||
2,018 | 140 | ||
2,019 | 140 | ||
2,020 | 120 | ||
2,021 | 110 | ||
Capitalized and purchased software | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2,017 | $ 150 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Goodwill (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Goodwill impairment | $ 0 | ||
Accumulated impairment loss | 0 | $ 0 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 5,200,000,000 | $ 5,209,000,000 | |
Foreign currency adjustments | (9,000,000) | ||
Acquired goodwill | 173,000,000 | ||
Goodwill, ending balance | 5,373,000,000 | 5,373,000,000 | 5,200,000,000 |
Payments | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 3,437,000,000 | 3,440,000,000 | |
Foreign currency adjustments | (3,000,000) | ||
Acquired goodwill | 173,000,000 | ||
Goodwill, ending balance | 3,610,000,000 | 3,610,000,000 | 3,437,000,000 |
Financial | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 1,763,000,000 | 1,769,000,000 | |
Foreign currency adjustments | (6,000,000) | ||
Acquired goodwill | 0 | ||
Goodwill, ending balance | $ 1,763,000,000 | $ 1,763,000,000 | $ 1,763,000,000 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Trade accounts payable | $ 110 | $ 74 |
Client deposits | 409 | 330 |
Settlement obligations | 305 | 224 |
Accrued compensation and benefits | 184 | 196 |
Other accrued expenses | 234 | 200 |
Total | $ 1,242 | $ 1,024 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of the period | $ (76) | $ (74) | $ (63) | |
Other comprehensive loss before reclassifications | (9) | (21) | ||
Amounts reclassified from accumulated other comprehensive loss | 7 | 10 | ||
Other comprehensive loss | (2) | (11) | $ (3) | |
Balance at end of the period | (76) | (74) | (63) | |
Interest expense | 163 | 170 | 164 | |
Designated as hedging instrument | Foreign currency forward exchange contracts | Indian Rupee | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Notional amount | 86 | 85 | ||
Total fair value | (1) | 1 | ||
Forecast | Designated as hedging instrument | Interest rate contract | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Interest expense | 10 | |||
Cash Flow Hedges | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of the period | (24) | (31) | (41) | |
Other comprehensive loss before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive loss | 7 | 10 | ||
Other comprehensive loss | 7 | 10 | ||
Balance at end of the period | (24) | (31) | (41) | |
Foreign Currency Translation | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of the period | (50) | (41) | (20) | |
Other comprehensive loss before reclassifications | (9) | (21) | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Other comprehensive loss | (9) | (21) | ||
Balance at end of the period | (50) | (41) | (20) | |
Other | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of the period | $ (2) | (2) | (2) | |
Other comprehensive loss before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Other comprehensive loss | 0 | 0 | ||
Balance at end of the period | $ (2) | $ (2) | $ (2) |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Net Income Per Share (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Weighted-average shares excluded from calculations of common stock equivalents for anti-dilutive stock options | 0.8 | 0.9 | 1.2 |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||
Weighted-average common shares outstanding used for the calculation of net income per share - basic | 220.3 | 233.9 | 248.6 |
Common stock equivalents (in shares) | 3.6 | 4.1 | 4.1 |
Weighted-average common shares outstanding used for the calculation of net income per share - diluted | 223.9 | 238 | 252.7 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Interest paid | $ 147 | $ 150 | $ 144 |
Income taxes paid | 408 | 306 | 336 |
Treasury stock purchases settled after the balance sheet date | $ 10 | $ 15 | $ 19 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||
Mar. 03, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 5,373 | $ 5,200 | $ 5,209 | |||
Acquired software and technology | ||||||
Business Acquisition [Line Items] | ||||||
Non-cash impairment charges | $ 10 | |||||
Series of Individually Immaterial Business Acquisitions [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash purchase price | $ 265 | |||||
Intangible assets | $ 80 | |||||
Goodwill | 173 | |||||
Other identifiable net assets | $ 12 | |||||
Revenue | $ 86 |
Investment in Unconsolidated 40
Investment in Unconsolidated Affiliate (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | ||||
Dividend from unconsolidated affiliate that represents a return on investment | $ 151 | $ 36 | $ 110 | |
StoneRiver Group L.P. [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Percentage of interest owned in affiliate | 49.00% | |||
Investments in affiliate | $ 14 | 17 | ||
Dividend from unconsolidated affiliate that represents a return on investment | $ 140 | $ 151 | 36 | 110 |
Share of net transaction gains at unconsolidated affiliate | 190 | 29 | 87 | |
Impairment loss | 44 | |||
Gain on sale of business interest | 146 | |||
Share of net transaction gains at unconsolidated affiliate, tax expense | $ 54 | $ 13 | $ 36 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Other borrowings | $ 7 | $ 11 |
Total debt | 4,562 | 4,293 |
Less: current maturities | (95) | (5) |
Long-term debt | 4,467 | 4,288 |
Term loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | 629 | 628 |
Senior notes | 2.7% senior notes due 2020 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 845 | 843 |
Interest rate | 2.70% | |
Senior notes | 4.625% senior notes due 2020 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 448 | 448 |
Interest rate | 4.625% | |
Senior notes | 4.75% senior notes due 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 398 | 397 |
Interest rate | 4.75% | |
Senior notes | 3.5% senior notes due 2022 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 695 | 694 |
Interest rate | 3.50% | |
Senior notes | 3.85% senior notes due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 893 | 893 |
Interest rate | 3.85% | |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 647 | $ 379 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Disclosure [Abstract] | ||||
Fair value of total debt | $ 4,700,000,000 | $ 4,300,000,000 | ||
Debt Instrument [Line Items] | ||||
Principal amount | $ 1,750,000,000 | |||
Loss on early debt extinguishment | 85,000,000 | $ 0 | 85,000,000 | $ 0 |
3.85% senior notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Interest rate increase in the event the Company's credit rating is downgraded below investment grade (as percent) | 2.00% | |||
Term loan | ||||
Debt Instrument [Line Items] | ||||
Weighted average variable interest rate | 2.02% | |||
Remaining scheduled principal payment | $ 90,000,000 | |||
Final payment amount for term loan agreement | $ 540,000,000 | |||
Repaid debt | 180,000,000 | |||
Senior notes | 2.7% senior notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 850,000,000 | |||
Interest rate | 2.70% | |||
Senior notes | 3.85% senior notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 900,000,000 | |||
Interest rate | 3.85% | |||
Senior notes | 4.625% senior notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.625% | |||
Senior notes | 3.5% senior notes due 2022 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.50% | |||
Senior notes | 4.75% senior notes due 2021 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.75% | |||
Senior notes | 3.125% senior notes due 2015 | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 300,000,000 | |||
Interest rate | 3.125% | |||
Senior notes | 3.125% senior notes due 2016 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.125% | |||
Redeemed debt | 600,000,000 | |||
Senior notes | 6.8% senior notes due 2017 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.80% | |||
Redeemed debt | $ 500,000,000 | |||
Term loan and senior notes | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 17,000,000 | 21,000,000 | ||
Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit with a syndicate of banks | $ 2,000,000,000 | |||
Weighted average variable interest rate | 1.81% | |||
Consolidated indebtedness to consolidated net earnings limit (no more than) | 3.5 | |||
Consolidated net earnings to consolidated interest expense | 3 | |||
Debt issuance costs | $ 5,000,000 | $ 7,000,000 |
Long-Term Debt - Annual Maturit
Long-Term Debt - Annual Maturities of Total Debt (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,017 | $ 95 | |
2,018 | 540 | |
2,019 | 1 | |
2,020 | 1,940 | |
2,021 | 398 | |
Thereafter | 1,588 | |
Total debt | $ 4,562 | $ 4,293 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal effect (as a percent) | 2.90% | 1.80% | 2.60% |
Unconsolidated affiliate tax (as a percent) | 4.20% | 1.10% | 3.40% |
Domestic production activities deduction (as a percent) | (3.00%) | (2.10%) | (4.10%) |
Other, net (as a percent) | (0.50%) | (0.10%) | (0.30%) |
Effective income tax rate | 38.60% | 35.70% | 36.60% |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 402 | $ 315 | $ 331 |
State | 53 | 31 | 40 |
Foreign | 16 | 11 | 10 |
Current income tax provision | 471 | 357 | 381 |
Deferred: | |||
Federal | 21 | 22 | (4) |
State | 5 | (2) | 6 |
Foreign | (5) | 0 | 1 |
Deferred income tax provision | 21 | 20 | 3 |
Income tax provision | $ 492 | $ 377 | $ 384 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Accrued expenses | $ 48 | $ 49 |
Interest rate hedge contracts | 16 | 20 |
Share-based compensation | 57 | 51 |
Net operating loss and credit carry-forwards | 85 | 102 |
Deferred revenue | 26 | 49 |
Other | 15 | 12 |
Subtotal | 247 | 283 |
Valuation allowance | (35) | (35) |
Total deferred tax assets | 212 | 248 |
Capitalized software development costs | (156) | (142) |
Intangible assets | (681) | (700) |
Property and equipment | (67) | (68) |
Other | (44) | (42) |
Total deferred tax liabilities | (948) | (952) |
Total | $ (736) | $ (704) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities on Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Noncurrent assets | $ 26 | $ 22 |
Noncurrent liabilities | (762) | (726) |
Total | $ (736) | $ (704) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits - Beginning of year | $ 54 | $ 55 | $ 60 |
Increases for tax positions taken during the current year | 9 | 10 | 9 |
Increases for tax positions taken in prior years | 1 | 0 | 10 |
Decreases for tax positions taken in prior years | (15) | (10) | (21) |
Decreases for settlements | (2) | (1) | (1) |
Lapse of the statute of limitations | (2) | 0 | (2) |
Unrecognized tax benefits - End of year | $ 45 | $ 54 | $ 55 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits that would impact effective tax rate | $ 35 | ||
Expected significant change in unrecognized tax benefits | 9 | ||
Interest expense and penalties (less than) | 1 | $ 1 | $ 1 |
Accrued interest expense and penalties | 2 | $ 4 | |
Federal | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carry-forwards | 84 | ||
State | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carry-forwards | 561 | ||
Foreign tax authority | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carry-forwards | 47 | ||
Net expiring and not expiring operating loss carry-forwards | $ 120 |
Employee Stock and Savings Pl50
Employee Stock and Savings Plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 68 | $ 65 | $ 49 |
Income tax benefits from share-based compensation | 23 | $ 22 | $ 17 |
Unrecognized compensation cost | $ 85 | ||
Weighted-average period unrecognized compensation cost will be recognized | 2 years 3 months 18 days | ||
Weighted-average estimated fair value per share of stock options granted (in dollars per share) | $ 31.47 | $ 25.51 | $ 18.90 |
Share-based awards available for grant (in shares) | 19,000,000 | ||
Expenses for company contribution under plans | $ 42 | $ 40 | $ 37 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Period that awards will expire | 10 years | ||
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee purchase percentage of the closing price of common stock | 85.00% | ||
Compensation expense recognized related to discount on purchase date (as a percent) | 15.00% | ||
Share-based awards available for grant (in shares) | 9,400,000 | ||
Shares issued under equity plan | 500,000 | 500,000 | 600,000 |
Annual increase in number of shares available for future issue | 2,000,000 | ||
Annual increase in number of shares available for future issue as percentage of common stock outstanding | 1.00% |
Employee Stock and Savings Pl51
Employee Stock and Savings Plans - Schedule of Estimation Assumptions Used (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected life | 6 years 4 months 24 days | 6 years 4 months 24 days | 6 years 3 months 18 days |
Average risk-free interest rate | 1.90% | 1.90% | 2.00% |
Expected volatility (as a percent) | 29.30% | 29.20% | 29.60% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Employee Stock and Savings Pl52
Employee Stock and Savings Plans - Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Shares | |
Stock options outstanding - balance at beginning of period (in shares) | shares | 8,589 |
Granted (in shares) | shares | 1,010 |
Forfeited (in shares) | shares | (105) |
Exercised (in shares) | shares | (1,751) |
Stock options outstanding - balance at end of period (in shares) | shares | 7,743 |
Stock options exercisable (in shares) | shares | 5,667 |
Weighted- Average Exercise Price | |
Stock options outstanding - balance at beginning of period (in dollars per share) | $ / shares | $ 40 |
Granted (in dollars per share) | $ / shares | 97.07 |
Forfeited (in dollars per share) | $ / shares | 80.34 |
Exercised (in dollars per share) | $ / shares | 35.02 |
Stock options outstanding - balance at end of period (in dollars per share) | $ / shares | 48.03 |
Stock options exercisable (in dollars per share) | $ / shares | $ 35.32 |
Weighted-Average Remaining Contractual Term and Aggregate Intrinsic Value | |
Weighted-Average Remaining Contractual Term, Stock options outstanding | 5 years 7 months 6 days |
Weighted-Average Remaining Contractual Term, Stock options exercisable | 4 years 6 months |
Aggregate Intrinsic Value, Stock options outstanding | $ | $ 451 |
Aggregate Intrinsic Value, Stock options exercisable | $ | $ 402 |
Employee Stock and Savings Pl53
Employee Stock and Savings Plans - Summary of Restricted Stock Unit and Performance Stock Unit Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Restricted stock units | |
Shares | |
Restricted stock units - Balance at beginning of period (in shares) | shares | 1,560 |
Granted (in shares) | shares | 374 |
Forfeited (in shares) | shares | (78) |
Vested (in shares) | shares | (592) |
Restricted stock units - Balance at end of period (in shares) | shares | 1,264 |
Weighted- Average Grant Date Fair Value | |
Restricted stock units - Balance at beginning of period (in dollars per share) | $ / shares | $ 50.72 |
Granted (in dollars per share) | $ / shares | 97.32 |
Forfeited (in dollars per share) | $ / shares | 68.18 |
Vested (in dollars per share) | $ / shares | 45.09 |
Restricted stock units - Balance at end of period (in dollars per share) | $ / shares | $ 66.04 |
Performance Shares | |
Shares | |
Restricted stock units - Balance at beginning of period (in shares) | shares | 0 |
Granted (in shares) | shares | 150 |
Forfeited (in shares) | shares | (1) |
Vested (in shares) | shares | 0 |
Restricted stock units - Balance at end of period (in shares) | shares | 149 |
Weighted- Average Grant Date Fair Value | |
Restricted stock units - Balance at beginning of period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 100.68 |
Forfeited (in dollars per share) | $ / shares | 96.65 |
Vested (in dollars per share) | $ / shares | 0 |
Restricted stock units - Balance at end of period (in dollars per share) | $ / shares | $ 100.66 |
Employee Stock and Savings Pl54
Employee Stock and Savings Plans - Schedule of Additional Information Related to Stock Option and Restricted Stock Unit Activity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Total intrinsic value of stock options exercised | $ 113 | $ 123 | $ 43 |
Fair value of restricted stock units vested | 58 | 41 | 35 |
Income tax benefit from stock options exercised and restricted stock units vested | 62 | 61 | 29 |
Cash received from stock options exercised | $ 39 | $ 35 | $ 33 |
Leases, Commitments and Conti55
Leases, Commitments and Contingencies - Schedule of Operating Lease Minimum Rental Payments (Details) $ in Millions | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 107 |
2,018 | 91 |
2,019 | 68 |
2,020 | 35 |
2,021 | 28 |
Thereafter | 95 |
Total | $ 424 |
Leases, Commitments and Conti56
Leases, Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 117 | $ 115 | $ 108 |
Subscriber funds | $ 1,900 |
Business Segment Information -
Business Segment Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||
Processing and services revenue | $ 4,625 | $ 4,411 | $ 4,219 | ||||||||
Product revenue | 880 | 843 | 847 | ||||||||
Total revenue | $ 1,431 | $ 1,380 | $ 1,363 | $ 1,331 | $ 1,368 | $ 1,313 | $ 1,298 | $ 1,275 | 5,505 | 5,254 | 5,066 |
Operating income | 375 | $ 369 | $ 362 | $ 339 | 329 | $ 342 | $ 326 | $ 314 | 1,445 | 1,311 | 1,210 |
Total assets | 9,743 | 9,340 | 9,743 | 9,340 | 9,308 | ||||||
Capital expenditures | 290 | 359 | 292 | ||||||||
Depreciation and amortization expense | 411 | 417 | 404 | ||||||||
Operating segments | Payments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Processing and services revenue | 2,334 | 2,159 | 2,030 | ||||||||
Product revenue | 756 | 703 | 717 | ||||||||
Total revenue | 3,090 | 2,862 | 2,747 | ||||||||
Operating income | 943 | 840 | 768 | ||||||||
Total assets | 6,143 | 5,833 | 6,143 | 5,833 | 5,850 | ||||||
Capital expenditures | 161 | 230 | 176 | ||||||||
Depreciation and amortization expense | 138 | 119 | 102 | ||||||||
Operating segments | Financial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Processing and services revenue | 2,285 | 2,256 | 2,195 | ||||||||
Product revenue | 192 | 187 | 172 | ||||||||
Total revenue | 2,477 | 2,443 | 2,367 | ||||||||
Operating income | 823 | 826 | 773 | ||||||||
Total assets | 3,287 | 3,242 | 3,287 | 3,242 | 3,225 | ||||||
Capital expenditures | 125 | 119 | 107 | ||||||||
Depreciation and amortization expense | 89 | 76 | 71 | ||||||||
Corporate and Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Processing and services revenue | 6 | (4) | (6) | ||||||||
Product revenue | (68) | (47) | (42) | ||||||||
Total revenue | (62) | (51) | (48) | ||||||||
Operating income | (321) | (355) | (331) | ||||||||
Total assets | $ 313 | $ 265 | 313 | 265 | 233 | ||||||
Capital expenditures | 4 | 10 | 9 | ||||||||
Depreciation and amortization expense | $ 184 | $ 222 | $ 231 |
Business Segment Information 58
Business Segment Information - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue | Geographic concentration risk | Foreign tax authority | |||
Segment Reporting Information [Line Items] | |||
Percentage of concentration risk | 5.00% | 6.00% | 6.00% |
Quarterly Financial Data (una59
Quarterly Financial Data (unaudited) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
May 31, 2015 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Total revenue | $ 1,431,000,000 | $ 1,380,000,000 | $ 1,363,000,000 | $ 1,331,000,000 | $ 1,368,000,000 | $ 1,313,000,000 | $ 1,298,000,000 | $ 1,275,000,000 | $ 5,505,000,000 | $ 5,254,000,000 | $ 5,066,000,000 | |
Cost of processing and services | 561,000,000 | 551,000,000 | 547,000,000 | 553,000,000 | 553,000,000 | 541,000,000 | 542,000,000 | 542,000,000 | 2,212,000,000 | 2,178,000,000 | 2,164,000,000 | |
Cost of product | 200,000,000 | 186,000,000 | 180,000,000 | 181,000,000 | 210,000,000 | 172,000,000 | 168,000,000 | 181,000,000 | 747,000,000 | 731,000,000 | 717,000,000 | |
Selling, general and administrative expenses | 295,000,000 | 274,000,000 | 274,000,000 | 258,000,000 | 276,000,000 | 258,000,000 | 262,000,000 | 238,000,000 | 1,101,000,000 | 1,034,000,000 | 975,000,000 | |
Total expenses | 1,056,000,000 | 1,011,000,000 | 1,001,000,000 | 992,000,000 | 1,039,000,000 | 971,000,000 | 972,000,000 | 961,000,000 | 4,060,000,000 | 3,943,000,000 | 3,856,000,000 | |
Operating income | 375,000,000 | 369,000,000 | 362,000,000 | 339,000,000 | 329,000,000 | 342,000,000 | 326,000,000 | 314,000,000 | 1,445,000,000 | 1,311,000,000 | 1,210,000,000 | |
Net income | 215,000,000 | 214,000,000 | 212,000,000 | 289,000,000 | 189,000,000 | 218,000,000 | 127,000,000 | 178,000,000 | 930,000,000 | 712,000,000 | 754,000,000 | |
Comprehensive income | $ 208,000,000 | $ 219,000,000 | $ 207,000,000 | $ 294,000,000 | $ 190,000,000 | $ 209,000,000 | $ 132,000,000 | $ 170,000,000 | $ 928,000,000 | $ 701,000,000 | $ 751,000,000 | |
Net income per share - continuing operations | ||||||||||||
Basic (in dollars per share) | $ 0.99 | $ 0.98 | $ 0.95 | $ 1.30 | $ 0.83 | $ 0.94 | $ 0.54 | $ 0.75 | $ 4.22 | $ 3.04 | $ 3.04 | |
Diluted (in dollars per share) | $ 0.98 | $ 0.96 | $ 0.94 | $ 1.27 | $ 0.81 | $ 0.92 | $ 0.53 | $ 0.73 | $ 4.15 | $ 2.99 | $ 2.99 | |
Business Acquisition [Line Items] | ||||||||||||
Loss on early debt extinguishment | $ 85,000,000 | $ 0 | $ 85,000,000 | $ 0 | ||||||||
StoneRiver Group L.P. [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Gain on sale of business interest | $ 146,000,000 | |||||||||||
Share of net transaction gains at unconsolidated affiliate, tax expense | $ 54,000,000 | $ 13,000,000 | $ 36,000,000 |