Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 25, 2018 | |
Entity Information [Line Items] | ||
Entity Registrant Name | CERNER CORP /MO/ | |
Entity Central Index Key | 804,753 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 329,004,371 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 510,968 | $ 370,923 |
Short-term investments | 374,596 | 434,844 |
Receivables, net | 1,151,860 | 1,042,781 |
Inventory | 15,345 | 15,749 |
Prepaid expenses and other | 326,623 | 515,930 |
Total current assets | 2,379,392 | 2,380,227 |
Property and equipment, net | 1,666,309 | 1,603,319 |
Software development costs, net | 867,284 | 822,159 |
Goodwill | 849,455 | 853,005 |
Intangible assets, net | 439,999 | 479,753 |
Long-term investments | 118,286 | 196,837 |
Other assets | 208,274 | 134,011 |
Total assets | 6,528,999 | 6,469,311 |
Current liabilities: | ||
Accounts payable | 284,203 | 218,996 |
Current installments of long-term debt and capital lease obligations | 2,155 | 11,585 |
Deferred revenue | 278,668 | 311,337 |
Accrued payroll and tax withholdings | 205,337 | 183,770 |
Other accrued expenses | 65,324 | 63,907 |
Total current liabilities | 835,687 | 789,595 |
Long-term debt and capital lease obligations | 438,760 | 515,130 |
Deferred income taxes and other liabilities | 371,381 | 365,674 |
Deferred revenue | 4,317 | 13,564 |
Total liabilities | 1,650,145 | 1,683,963 |
Shareholders' Equity: | ||
Common stock, $.01 par value, 500,000,000 shares authorized, 360,501,265 shares issued at June 30, 2018 and 359,204,864 shares issued at December 30, 2017 | 3,605 | 3,592 |
Additional paid-in capital | 1,443,803 | 1,380,371 |
Retained earnings | 5,275,824 | 4,938,866 |
Treasury stock, 31,536,972 shares at June 30, 2018 and 26,743,517 shares at December 30, 2017 | (1,751,723) | (1,464,099) |
Accumulated other comprehensive loss, net | (92,655) | (73,382) |
Total shareholders' equity | 4,878,854 | 4,785,348 |
Total liabilities and shareholders' equity | $ 6,528,999 | $ 6,469,311 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 30, 2017 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 360,501,265 | 359,204,864 |
Treasury Stock, Shares | 31,536,972 | 26,743,517 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Revenues: | ||||
Revenues | $ 1,367,727 | $ 1,291,994 | $ 2,660,588 | $ 2,552,480 |
Costs and expenses: | ||||
Costs of revenue | 238,783 | 223,063 | 470,061 | 422,056 |
Sales and client service | 635,105 | 563,387 | 1,225,053 | 1,123,587 |
Software development (Includes amortization of $52,141 and $102,142 for the three and six months ended June 30, 2018, respectively; and $41,427 and $81,988 for the three and six months ended July 1, 2017, respectively) | 168,278 | 142,835 | 329,895 | 288,736 |
General and administrative | 95,464 | 90,633 | 187,758 | 179,025 |
Amortization of acquisition-related intangibles | 21,810 | 22,688 | 44,319 | 45,562 |
Total costs and expenses | 1,159,440 | 1,042,606 | 2,257,086 | 2,058,966 |
Operating earnings | 208,287 | 249,388 | 403,502 | 493,514 |
Other income (expense), net | 6,597 | 2,661 | 11,461 | 1,545 |
Earnings before income taxes | 214,884 | 252,049 | 414,963 | 495,059 |
Income taxes | (45,527) | (72,366) | (85,605) | (142,163) |
Net earnings | $ 169,357 | $ 179,683 | $ 329,358 | $ 352,896 |
Basic earnings per share | $ 0.51 | $ 0.54 | $ 0.99 | $ 1.07 |
Diluted earnings per share | $ 0.51 | $ 0.53 | $ 0.98 | $ 1.05 |
Basic weighted average shares outstanding | 330,206 | 331,056 | 331,479 | 330,607 |
Diluted weighted average shares outstanding | 333,562 | 337,898 | 335,223 | 337,116 |
Consolidated Statements Of Ope5
Consolidated Statements Of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Income Statement [Abstract] | ||||
Software development, amortization | $ 52,141 | $ 41,427 | $ 102,142 | $ 81,988 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||
Net earnings | $ 169,357 | $ 179,683 | $ 329,358 | $ 352,896 |
Foreign currency translation adjustment and other (net of taxes (benefit) of $(335) and $585 for the three and six months ended June 30, 2018; and $904 and $1,091 for the three and six months ended July 1, 2017) | (21,811) | 16,158 | (19,017) | 26,563 |
Unrealized holding gain (loss) on available-for-sale investments (net of taxes (benefit) of $209 and $(84) for the three and six months ended June 30, 2018; and $(33) and $35 for the three and six months ended July 1, 2017) | 642 | (54) | (256) | 57 |
Comprehensive income | $ 148,188 | $ 195,787 | $ 310,085 | $ 379,516 |
Consolidated Statements Of Com7
Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Foreign currency translation adjustment and other, taxes (benefit) | $ (335) | $ 904 | $ 585 | $ 1,091 |
Change in net unrealized holding gain (loss) on available-for-sale investments, taxes (benefit) | $ 209 | $ (33) | $ (84) | $ 35 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 329,358 | $ 352,896 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 312,645 | 278,889 |
Share-based compensation expense | 49,139 | 39,359 |
Provision for deferred income taxes | 1,736 | 25,849 |
Changes in assets and liabilities (net of businesses acquired): | ||
Receivables, net | (186,039) | (79,723) |
Inventory | 390 | 211 |
Prepaid expenses and other | 181,035 | 106 |
Accounts payable | 43,364 | 33,647 |
Accrued income taxes | 7,919 | (3,846) |
Deferred revenue | (40,132) | 12,336 |
Other accrued liabilities | 9,251 | (63,896) |
Net cash provided by operating activities | 708,666 | 595,828 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital purchases | (188,994) | (189,372) |
Capitalized software development costs | (142,951) | (142,966) |
Purchases of investments | (194,592) | (182,484) |
Sales and maturities of investments | 331,728 | 187,355 |
Purchase of other intangibles | (16,373) | (14,036) |
Net cash used in investing activities | (211,182) | (341,503) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments of Long-term Debt | (75,000) | 0 |
Proceeds from exercise of options | 21,343 | 38,293 |
Payments to taxing authorities in connection with shares directly withheld from associates | (7,308) | (7,972) |
Treasury stock purchases | (287,624) | 0 |
Contingent consideration payments for acquisition of businesses | (1,691) | (2,671) |
Net cash provided by (used in) financing activities | (350,280) | 27,650 |
Effect of exchange rate changes on cash and cash equivalents | (7,159) | 7,594 |
Net increase (decrease) in cash and cash equivalents | 140,045 | 289,569 |
Cash and cash equivalents at beginning of period | 370,923 | 170,861 |
Cash and cash equivalents at end of period | $ 510,968 | $ 460,430 |
Interim Statement Presentation
Interim Statement Presentation (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Statement Presentation | Interim Statement Presentation Basis of Presentation The condensed consolidated financial statements included herein have been prepared by Cerner Corporation ("Cerner," the "Company," "we," "us" or "our") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our latest annual report on Form 10-K. In management's opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position and the results of operations and cash flows for the periods presented. Our interim results as presented in this Form 10-Q are not necessarily indicative of the operating results for the entire year. The condensed consolidated financial statements were prepared using GAAP . These principles require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses . Actual results could differ from those estimates. Fiscal Period End Our second fiscal quarter ends on the Saturday closest to June 30. The 2018 and 2017 second quarters ended on June 30, 2018 and July 1, 2017, respectively. All references to years in these notes to condensed consolidated financial statements represent the respective three or six months ended on such dates, unless otherwise noted . Supplemental Disclosures of Cash Flow Information Six Months Ended (In thousands) 2018 2017 Cash paid during the period for: Interest (including amounts capitalized of $5,874 and $5,520, respectively) $ 8,333 $ 9,067 Income taxes, net of refunds (86,825 ) 99,104 Accounting Pronouncements Adopted in 2018 Revenue Recognition. In the first quarter of 2018, we adopted new revenue guidance. Refer to Note (2) for further details. Financial Instruments . In January 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which was subsequently amended in February 2018 by ASU 2018-03, Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments . Such guidance impacts how we account for our investments reported under the cost method of accounting as follows: • Equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net earnings. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. • The impairment assessment of equity investments without readily determinable fair values will require a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. We adopted this new guidance effective for our first quarter of 2018. Provisions within the guidance applicable to the Company were required to be applied prospectively. The adoption of such guidance did not have a material impact on our condensed consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Leases. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which introduces a new model that requires most leases to be reported on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the new revenue recognition standard. The standard requires the use of the modified retrospective (cumulative effect) transition approach. ASU 2016-02 is effective for the Company in the first quarter of 2019, with early adoption permitted. We are currently evaluating the effect that ASU 2016-02 will have on our consolidated financial statements and related disclosures, and we do not expect to early adopt. In the second quarter of 2018, we continued our analysis of contractual arrangements that may qualify as leases under the new standard. We currently expect the most significant impact of this new guidance will be the recognition of right-of-use assets and lease liabilities for our operating leases of office space. At December 30, 2017, we disclosed aggregate minimum future payments under these arrangements of $124 million within Note 16, Commitments in our most recent Form 10-K. We do not expect the new standard to have a significant impact on our consolidated statements of operations. Our analysis and evaluation of the new standard will continue through the effective date in the first quarter of 2019. We must complete our analysis of contractual arrangements, quantify all impacts of this new guidance, and evaluate related disclosures. We must also implement any necessary changes/modifications to processes, accounting systems, and internal controls. Credit Losses on Financial Instruments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which provides new guidance regarding the measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how we determine our allowance for estimated uncollectible receivables and evaluate our available-for-sale investments for impairment. ASU 2016-13 is effective for the Company in the first quarter of 2020, with early adoption permitted in the first quarter of 2019. We are currently evaluating the effect that ASU 2016-13 will have on our consolidated financial statements and related disclosures, and we have not determined if we will early adopt. Callable Debt Securities. In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities , which shortens the amortization period for certain investments in callable debt securities purchased at a premium by requiring the premium be amortized to the earliest call date. Such guidance will impact how premiums are amortized on our available-for-sale investments. ASU 2017-08 is effective for the Company in the first quarter of 2019, with early adoption permitted. The standard requires the use of the modified retrospective (cumulative effect) transition approach. We do not expect ASU 2017-08 to have a material impact on our consolidated financial statements and related disclosures, and we do not expect to early adopt . Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows a reclassification from accumulated other comprehensive income ("AOCI") to retained earnings for "stranded tax effects" resulting from certain U.S. tax reform enacted in December 2017. Such "stranded tax effects" were created when deferred tax assets and liabilities related to items in AOCI were remeasured at the lower U.S. corporate tax rate in the period of enactment. ASU 2018-02 is effective for the Company in the first quarter of 2019, with early adoption permitted. The guidance in this ASU is to be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. corporate tax rate was recognized. We are currently evaluating the effect that ASU 2018-02 will have on our consolidated financial statements and related disclosures, and we do not expect to early adopt . |
Revenue from Contracts with Cus
Revenue from Contracts with Customers (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue Recognition In May 2014, the FASB issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606) , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 replaced most existing revenue recognition guidance in U.S. GAAP. The new standard introduces a five-step process to be followed in determining the amount and timing of revenue recognition. It also provides guidance on accounting for costs incurred to obtain or fulfill contracts with customers, and establishes disclosure requirements which are more extensive than those required under prior U.S. GAAP . ASU 2014-09, as amended ("Topic 606"), was effective for the Company in the first quarter of 2018. We selected the modified retrospective (cumulative effect) transition method of adoption. Such method provides that the cumulative effect from prior periods upon applying the new guidance to contracts which were not complete as of the adoption date, be recognized in our condensed consolidated balance sheets as of December 31, 2017, including an adjustment to retained earnings . A summary of such cumulative effect adjustment is as follows: (In thousands) Increase / (Decrease) Receivables, net $ (79,492 ) Prepaid expenses and other (2,253 ) Other assets 81,157 Accounts payable (9,361 ) Deferred income taxes and other liabilities 1,173 Retained earnings 7,600 Prior periods were not retrospectively adjusted. The impact of applying Topic 606 (versus prior U.S. GAAP) increased revenues by $21 million and $64 million , and earnings before income taxes by $15 million and $13 million , for the three and six months ended June 30, 2018 , respectively. The impact of applying Topic 606 (versus prior U.S. GAAP) did not have a significant impact on other line items in our condensed consolidated statements of operations, statements of comprehensive income, and statements of cash flows for the three and six month periods ended June 30, 2018 . Additionally, the impact of applying Topic 606 did not have a significant impact on our condensed consolidated balance sheet as of June 30, 2018 . Revenue Recognition Policy We enter into contracts with customers that may include various combinations of our software solutions and related services, which are generally capable of being distinct and accounted for as separate performance obligations. The predominant model of customer procurement involves multiple deliverables and includes a software license agreement, project-related implementation and consulting services, software support, hosting services, and computer hardware. We allocate revenues to each performance obligation within an arrangement based on estimated relative stand-alone selling price. Revenue is then recognized for each performance obligation upon transfer of control of the software solution or services to the customer in an amount that reflects the consideration we expect to receive . Generally, we recognize revenue under Topic 606 for each of our performance obligations as follows: • Perpetual software licenses - We recognize perpetual software license revenues when control of such licenses are transferred to the client ("point in time"). We determine the amount of consideration allocated to this performance obligation using the residual approach . • Software as a service - We recognize software as a service ratably over the related hosting period ("over time") . • Time-based software and content license fees - We recognize a license component of time-based software and content license fees upon delivery to the client ("point in time") and a non-license component (i.e. support) ratably over the respective contract term ("over time") . • Hosting - Remote hosting recurring services are recognized ratably over the hosting service period ("over time"). Certain of our hosting arrangements contain fees deemed to be a "material right" under Topic 606. We recognize such fees over the term that will likely affect the client's decision about whether to renew the related hosting service ("over time") . • Services - We recognize revenue for fixed fee services arrangements over time, utilizing a labor hours input method. For fee-for-service arrangements, we recognize revenue over time as hours are worked at the rates clients are invoiced, utilizing the "as invoiced" practical expedient available in Topic 606. For stand-ready services arrangements, we recognize revenue ratably over the related service period . • Support and maintenance - We recognize support and maintenance fees ratably over the related contract period ("over time") . • Hardware - We recognize hardware revenues when control of such hardware/devices is transferred to the client ("point in time") . • Transaction processing - We recognize transaction processing revenues ratably as we provide such services ("over time") . Such revenues are recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. Disaggregation of Revenue The following tables present revenues disaggregated by our business models: Three Months Ended 2018 2017 (1) (In thousands) Domestic Segment Global Segment Total Domestic Segment Global Segment Total Licensed software $ 161,220 $ 11,168 $ 172,388 $ 146,895 $ 8,991 $ 155,886 Technology resale 61,789 13,468 75,257 66,358 6,774 73,132 Subscriptions 76,419 6,532 82,951 112,518 6,272 118,790 Professional services 387,540 59,778 447,318 347,313 48,850 396,163 Managed services 261,787 23,765 285,552 242,673 19,006 261,679 Support and maintenance 229,779 49,177 278,956 214,642 44,932 259,574 Reimbursed travel 23,530 1,775 25,305 25,255 1,515 26,770 Total revenues $ 1,202,064 $ 165,663 $ 1,367,727 $ 1,155,654 $ 136,340 $ 1,291,994 (1) As noted above, prior period amounts were not adjusted upon our adoption of Topic 606. Six Months Ended 2018 2017 (1) (In thousands) Domestic Global Total Domestic Global Total Licensed software $ 285,314 $ 21,893 $ 307,207 $ 279,427 $ 18,787 $ 298,214 Technology resale 120,038 18,595 138,633 126,871 10,368 137,239 Subscriptions 146,271 13,316 159,587 220,770 11,441 232,211 Professional services 767,384 121,202 888,586 696,177 96,301 792,478 Managed services 507,932 45,925 553,857 485,306 36,192 521,498 Support and maintenance 464,015 99,505 563,520 432,386 89,292 521,678 Reimbursed travel 46,206 2,992 49,198 46,521 2,641 49,162 Total revenues $ 2,337,160 $ 323,428 $ 2,660,588 $ 2,287,458 $ 265,022 $ 2,552,480 (1) As noted above, prior period amounts were not adjusted upon our adoption of Topic 606. The following table presents our revenues disaggregated by timing of revenue recognition: Three Months Ended Six Months Ended 2018 2018 (In thousands) Domestic Global Total Domestic Segment Global Segment Total Revenue recognized over time $ 1,062,878 $ 144,262 $ 1,207,140 $ 2,091,373 $ 288,397 $ 2,379,770 Revenue recognized at a point in time 139,186 21,401 160,587 245,787 35,031 280,818 Total revenues $ 1,202,064 $ 165,663 $ 1,367,727 $ 2,337,160 $ 323,428 $ 2,660,588 Transaction Price Allocated to Remaining Performance Obligations As of June 30, 2018 , the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts approximates $14.79 billion of which we expect to recognize approximately 31% of the revenue over the next 12 months and the remainder thereafter . Contract Liabilities Our payment arrangements with clients typically include an initial payment due upon contract signing and date-based licensed software payment terms and payments based upon delivery for services, hardware and sublicensed software. Customer payments received in advance of satisfaction of the related performance obligations are deferred as contract liabilities. Such amounts are classified in our condensed consolidated balance sheets as either current or long-term deferred revenue. During the six months ended June 30, 2018, we recognized $287 million of revenues that were included in our contract liability balance at the beginning of such period. Costs to Obtain or Fulfill a Contract We have determined the only significant incremental costs incurred to obtain contracts with clients within the scope of Topic 606 are sales commissions paid to our associates. We record sales commissions as an asset, and amortize to expense ratably over the remaining performance periods of the related contracts with remaining performance obligations. At June 30, 2018 , our condensed consolidated balance sheet includes an $85 million asset related to sales commissions to be expensed in future periods, which is included in other assets. During the three and six months ended June 30, 2018 , we recognized $10 million and $18 million , respectively, of amortization related to this sales commissions asset, which is included in costs of revenue in our condensed consolidated statements of operations. Significant Judgments when Applying Topic 606 Our contracts with clients typically include various combinations of our software solutions and related services. Determining whether such software solutions and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Specifically, judgment is required to determine whether software licenses are distinct from services and hosting included in an arrangement . Contract transaction price is allocated to performance obligations using estimated stand-alone selling price . Judgment is required in estimating stand-alone selling price for each distinct performance obligation. We determine stand-alone selling price maximizing observable inputs such as stand-alone sales when they exist or substantive renewal prices charged to clients. In instances where stand-alone selling price is not observable, we utilize an estimate of stand-alone selling price. Such estimates are derived from various methods that include: cost plus margin, historical pricing practices, and the residual approach, which requires a considerable amount of judgment . The labor hours input method used for our fixed fee services performance obligation is dependent on our ability to reliably estimate the direct labor hours to complete a project, which may span several years. We utilize our historical project experience and detailed planning process as a basis for our future estimates to complete current projects. Certain of our arrangements contain variable consideration. We do not believe our estimates of variable consideration to be significant to our determination of revenue recognition. Practical Expedients We have reflected the aggregate effect of all contract modifications occurring prior to the Topic 606 adoption date when (i) identifying the satisfied and unsatisfied performance obligations, (ii) determining the transaction price, and (iii) allocating the transaction price to the satisfied and unsatisfied performance obligations. |
Receivables
Receivables | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Receivables | Receivables Receivables consist of client receivables and the current portion of amounts due under sales-type leases. Client receivables represent recorded revenues that have either been billed, or for which we have an unconditional right to invoice and receive payment in the future. We periodically provide long-term financing options to creditworthy clients through extended payment terms. Generally, these extended payment terms provide for date-based payments over a fixed period, not to exceed the term of the overall arrangement. Thus, our portfolio of client contracts contains a financing component, which is recognized over time as a component of other income, net in our condensed consolidated statements of operations. Lease receivables represent our net investment in sales-type leases resulting from the sale of certain health care devices to our clients. We perform ongoing credit evaluations of our clients and generally do not require collateral from our clients. We provide an allowance for estimated uncollectible accounts based on specific identification, historical experience and our judgment. A summary of net receivables is as follows: (In thousands) June 30, 2018 December 30, 2017 Client receivables $ 1,204,487 $ 1,082,886 Less: Allowance for doubtful accounts 61,639 52,786 Client receivables, net of allowance 1,142,848 1,030,100 Current portion of lease receivables 9,012 12,681 Total receivables, net $ 1,151,860 $ 1,042,781 During the second quarter of 2008, Fujitsu Services Limited's ("Fujitsu") contract as the prime contractor in the National Health Service ("NHS") initiative to automate clinical processes and digitize medical records in the Southern region of England was terminated. This gave rise to the termination of our subcontract for the project. We continue to be in dispute with Fujitsu regarding Fujitsu's obligation to pay amounts due upon termination, including our client receivables and damages for pre-termination losses. We are working with Fujitsu to resolve these issues based on processes provided for in the subcontract. Part of that process required final resolution of disputes between Fujitsu and the NHS regarding the prime contract termination, which has now occurred. As of June 30, 2018 , it remains unlikely that our matter with Fujitsu will be resolved in the next 12 months. Therefore, these client receivables have been classified as long-term and represent less than the majority of other long-term assets at June 30, 2018 and December 30, 2017 . While the ultimate collectability of the client receivables pursuant to this process is uncertain, we believe that we have valid and equitable grounds for recovery of such amounts and that collection of recorded amounts is probable. Nevertheless, it is reasonably possible that our estimates regarding collectability of such amounts might materially change. During the first six months of 2018 and 2017 , we received total client cash collections of $2.59 billion and $2.64 billion , respectively. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2018 | |
Investments [Abstract] | |
Investments | Investments Available-for-sale investments at June 30, 2018 were as follows: (In thousands) Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash equivalents: Money market funds $ 42,195 $ — $ — $ 42,195 Time deposits 78,581 — — 78,581 Total cash equivalents 120,776 — — 120,776 Short-term investments: Time deposits 28,988 — — 28,988 Commercial paper 77,950 — (98 ) 77,852 Government and corporate bonds 268,884 — (1,128 ) 267,756 Total short-term investments 375,822 — (1,226 ) 374,596 Long-term investments: Government and corporate bonds 105,251 — (753 ) 104,498 Total available-for-sale investments $ 601,849 $ — $ (1,979 ) $ 599,870 Available-for-sale investments at December 30, 2017 were as follows: (In thousands) Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash equivalents: Money market funds $ 99,472 $ — $ — $ 99,472 Time deposits 60,226 — — 60,226 Government and corporate bonds 850 — — 850 Total cash equivalents 160,548 — — 160,548 Short-term investments: Time deposits 40,186 — — 40,186 Commercial paper 147,646 2 (139 ) 147,509 Government and corporate bonds 247,626 — (477 ) 247,149 Total short-term investments 435,458 2 (616 ) 434,844 Long-term investments: Government and corporate bonds 185,478 — (1,026 ) 184,452 Total available-for-sale investments $ 781,484 $ 2 $ (1,642 ) $ 779,844 We sold available-for-sale investments for proceeds of $45 million and $20 million during the six months ended June 30, 2018 and July 1, 2017 , respectively, resulting in insignificant gains/losses in each period. Other Investments On July 27, 2018 we acquired a minority interest in Essence Group Holdings Corporation ("Essence Group") for cash consideration of $266 million under a Stock Purchase Agreement ("SPA") dated July 9, 2018. Concurrently with the execution of the SPA, we announced a strategic operating relationship with Lumeris Healthcare Outcomes, LLC ("Lumeris"), a subsidiary of Essence Group, pursuant to which we will collaborate to bring to market an EHR-agnostic offering, Maestro Advantage TM , designed to help providers who participate in value-based arrangements, including Medicare Advantage and provider-sponsored health plans, control costs and improve outcomes. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We determine fair value measurements used in our consolidated financial statements based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: • Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. • Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. • Level 3 – Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table details our financial assets measured and recorded at fair value on a recurring basis at June 30, 2018 : (In thousands) Fair Value Measurements Using Description Balance Sheet Classification Level 1 Level 2 Level 3 Money market funds Cash equivalents $ 42,195 $ — $ — Time deposits Cash equivalents — 78,581 — Time deposits Short-term investments — 28,988 — Commercial paper Short-term investments — 77,852 — Government and corporate bonds Short-term investments — 267,756 — Government and corporate bonds Long-term investments — 104,498 — The following table details our financial assets measured and recorded at fair value on a recurring basis at December 30, 2017 : (In thousands) Fair Value Measurements Using Description Balance Sheet Classification Level 1 Level 2 Level 3 Money market funds Cash equivalents $ 99,472 $ — $ — Time deposits Cash equivalents — 60,226 — Government and corporate bonds Cash equivalents — 850 — Time deposits Short-term investments — 40,186 — Commercial paper Short-term investments — 147,509 — Government and corporate bonds Short-term investments — 247,149 — Government and corporate bonds Long-term investments — 184,452 — We estimate the fair value of our long-term, fixed rate debt using a Level 3 discounted cash flow analysis based on current borrowing rates for debt with similar maturities. We estimate the fair value of our long-term, variable rate debt using a Level 3 discounted cash flow analysis based on LIBOR rate forward curves. The fair value of our long-term debt, including current maturities, at June 30, 2018 and December 30, 2017 was approximately $431 million and $519 million , respectively. The carrying amount of such debt at June 30, 2018 and December 30, 2017 was $425 million and $500 million , respectively. |
Indebtedness (Notes)
Indebtedness (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Indebtedness | Long-term Debt and Capital Lease Obligations The following is a summary of indebtedness outstanding: (In thousands) June 30, 2018 December 30, 2017 Senior Notes $ 425,000 $ 500,000 Capital lease obligations 2,155 13,068 Other 14,162 14,162 Debt and capital lease obligations 441,317 527,230 Less: debt issuance costs (402 ) (515 ) Debt and capital lease obligations, net 440,915 526,715 Less: current portion (2,155 ) (11,585 ) Long-term debt and capital lease obligations $ 438,760 $ 515,130 In March 2018, we repaid our $75 million floating rate Series 2015-C Notes due February 15, 2022 . |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We determine the tax provision for interim periods using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. H.R. 1, An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 ("U.S. Tax Reform"), was enacted on December 22, 2017. U.S. Tax Reform provides for, among other things, the reduction of the U.S. corporate tax rate from 35% to 21% , effective January 1, 2018. Relevant accounting guidance provides that the impact of U.S. Tax Reform, as of the date of enactment, may be provisionally recorded and adjusted during a measurement period of up to one year. As of December 30, 2017, we provisionally recorded certain impacts of U.S. Tax Reform including an adjustment to our net deferred tax liability arising from the reduction in the federal tax rate as well as the impact of mandatory deemed repatriation. Additional analysis and computations are being performed with respect to these provisional amounts. The ultimate impact as of the enactment date may differ from the provisional amounts we have recorded, possibly materially, due to among other things, additional regulatory guidance that may be issued and changes to our assumptions and interpretations. No measurement period adjustments were recorded during the six months ended June 30, 2018 . Our effective tax rate was 20.6% and 28.7% for the first six months of 2018 and 2017 , respectively. The decrease in the effective tax rate in 2018 is primarily due to the aforementioned reduction in the U.S. corporate statutory tax rate from 35% to 21%. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share A reconciliation of the numerators and the denominators of the basic and diluted per share computations are as follows: Three Months Ended 2018 2017 Earnings Shares Per-Share Earnings Shares Per-Share (In thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic earnings per share: Income available to common shareholders $ 169,357 330,206 $ 0.51 $ 179,683 331,056 $ 0.54 Effect of dilutive securities: Stock options and non-vested shares — 3,356 — 6,842 Diluted earnings per share: Income available to common shareholders including assumed conversions $ 169,357 333,562 $ 0.51 $ 179,683 337,898 $ 0.53 For the three months ended June 30, 2018 and July 1, 2017 , options to purchase 14.0 million and 11.0 million shares of common stock at per share prices ranging from $47.99 to $73.40 and $50.04 to $73.40 , respectively, were outstanding but were not included in the computation of diluted earnings per share because they were anti-dilutive. Six Months Ended 2018 2017 Earnings Shares Per-Share Earnings Shares Per-Share (In thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic earnings per share: Income available to common shareholders $ 329,358 331,479 $ 0.99 $ 352,896 330,607 $ 1.07 Effect of dilutive securities: Stock options and non-vested shares — 3,744 — 6,509 Diluted earnings per share: Income available to common shareholders including assumed conversions $ 329,358 335,223 $ 0.98 $ 352,896 337,116 $ 1.05 For the six months ended June 30, 2018 and July 1, 2017 , options to purchase 12.4 million and 11.7 million shares of common stock at per share prices ranging from $50.04 to $73.40 and $47.38 to $73.40 , respectively, were outstanding but were not included in the computation of diluted earnings per share because they were anti-dilutive. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation and Equity | Share-Based Compensation and Equity Stock Options Stock option activity for the six months ended June 30, 2018 was as follows: (In thousands, except per share data) Number of Shares Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted-Average Remaining Contractual Term (Yrs) Outstanding at beginning of year 21,332 $ 49.40 Granted 3,572 58.32 Exercised (947 ) 23.25 Forfeited and expired (156 ) 60.75 Outstanding as of June 30, 2018 23,801 51.71 $ 235,909 6.67 Exercisable as of June 30, 2018 12,287 $ 43.77 $ 210,966 4.84 The weighted-average assumptions used to estimate the fair value, under the Black-Scholes-Merton pricing model, of stock options granted during the six months ended June 30, 2018 were as follows: Expected volatility (%) 27.0 % Expected term (yrs) 7 Risk-free rate (%) 2.8 % Fair value per option $ 20.12 As of June 30, 2018 , there was $185 million of total unrecognized compensation cost related to stock options granted under all plans. That cost is expected to be recognized over a weighted-average period of 3.59 years. Non-vested Shares and Share Units Non-vested share and share unit activity for the six months ended June 30, 2018 was as follows: (In thousands, except per share data) Number of Shares Weighted-Average Grant Date Fair Value Outstanding at beginning of year 799 $ 66.76 Granted 480 58.72 Vested (343 ) 65.54 Forfeited (3 ) 62.78 Outstanding as of June 30, 2018 933 $ 63.08 As of June 30, 2018 , there was $44 million of total unrecognized compensation cost related to non-vested share and share unit awards granted under all plans. That cost is expected to be recognized over a weighted-average period of 2.09 years. Share-Based Compensation Cost The following table presents total compensation expense recognized with respect to stock options, non-vested shares and share units, and our associate stock purchase plan: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Stock option and non-vested share and share unit compensation expense $ 24,204 $ 21,859 $ 49,139 $ 39,359 Associate stock purchase plan expense 1,916 1,495 3,278 2,970 Amounts capitalized in software development costs, net of amortization 161 (200 ) 321 (320 ) Amounts charged against earnings, before income tax benefit $ 26,281 $ 23,154 $ 52,738 $ 42,009 Amount of related income tax benefit recognized in earnings $ 5,568 $ 6,647 $ 10,868 $ 12,063 Treasury Stock In May 2017, our Board of Directors authorized a share repurchase program that allows the Company to repurchase up to $500 million of shares of our common stock, excluding transaction costs. The repurchases are to be effectuated in the open market, by block purchase, in privately negotiated transactions, or through other transactions managed by broker-dealers. No time limit was set for the completion of the program. In May 2018, our Board of Directors approved an amendment to the repurchase program that was authorized in May 2017. Under the amendment, the Company was authorized to repurchase up to an additional $500 million of shares of our common stock, for an aggregate of $1 billion , excluding transaction costs. During the six months ended June 30, 2018 , we repurchased 4.8 million shares for total consideration of $288 million under the program. The shares were recorded as treasury stock and accounted for under the cost method. No repurchased shares have been retired. At June 30, 2018 , $639 million remains available for repurchase under the program. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies Disclosure | Contingencies We accrue estimates for resolution of any legal and other contingencies when losses are probable and reasonably estimable, in accordance with Accounting Standards Codification Topic 450, Contingencies . The terms of our software license agreements with our clients generally provide for a limited indemnification of such clients against losses, expenses and liabilities arising from third party claims based on alleged infringement by our solutions of an intellectual property right of such third party. The terms of such indemnification often limit the scope of and remedies for such indemnification obligations and generally include a right to replace or modify an infringing solution. To date, we have not had to reimburse any of our clients for any judgments or settlements to third parties related to these indemnification provisions pertaining to intellectual property infringement claims. For several reasons, including the lack of a sufficient number of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under the terms of the corresponding agreements with our clients, we cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions. In addition to commitments and obligations in the ordinary course of business, we are subject to various legal proceedings and claims that arise in the ordinary course of business, including for example, employment and client disputes and litigation alleging solution and implementation defects, personal injury, intellectual property infringement, violations of law and breaches of contract and warranties. Many of these proceedings are at preliminary stages and many seek an indeterminate amount of damages. At this time, we do not believe the range of potential losses under these claims to be material to our condensed consolidated financial statements. No less than quarterly, we review the status of each significant matter and assess our potential financial exposure. We accrue a liability for an estimated loss if the potential loss from any legal proceeding or claim is considered probable and the amount can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether the amount of an exposure is reasonably estimable, and accruals are based only on the information available to our management at the time the judgment is made. Furthermore, the outcome of legal proceedings is inherently uncertain, and we may incur substantial defense costs and expenses defending any of these matters. Should any one or a combination of more than one of these proceedings be successful, or should we determine to settle any one or a combination of these matters, we may be required to pay substantial sums, become subject to the entry of an injunction or be forced to change the manner in which we operate our business, which could have a material adverse impact on our business, results of operations, cash flows or financial condition. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We have two operating segments, Domestic and Global. Revenues are derived primarily from the sale of clinical, financial and administrative information solutions and services. The cost of revenues includes the cost of third party consulting services, computer hardware, devices and sublicensed software purchased from manufacturers for delivery to clients. It also includes the cost of hardware maintenance and sublicensed software support subcontracted to the manufacturers. Operating expenses incurred by the geographic business segments consist of sales and client service expenses including salaries of sales and client service personnel, expenses associated with our managed services business, marketing expenses, communications expenses and unreimbursed travel expenses. "Other" includes expenses that have not been allocated to the operating segments, such as software development, general and administrative expenses, acquisition costs and related adjustments, share-based compensation expense, and certain amortization and depreciation. Performance of the segments is assessed at the operating earnings level by our chief operating decision maker, who is our Chief Executive Officer. Items such as interest, income taxes, capital expenditures and total assets are managed at the consolidated level and thus are not included in our operating segment disclosures. Accounting policies for each of the reportable segments are the same as those used on a consolidated basis. The following table presents a summary of our operating segments and other expense for the three and six months ended June 30, 2018 and July 1, 2017 : (In thousands) Domestic Global Other Total Three Months Ended 2018 Revenues $ 1,202,064 $ 165,663 $ — $ 1,367,727 Costs of revenue 208,185 30,598 — 238,783 Operating expenses 551,468 73,407 295,782 920,657 Total costs and expenses 759,653 104,005 295,782 1,159,440 Operating earnings (loss) $ 442,411 $ 61,658 $ (295,782 ) $ 208,287 (In thousands) Domestic Global Other Total Three Months Ended 2017 Revenues $ 1,155,654 $ 136,340 $ — $ 1,291,994 Costs of revenue 197,336 25,727 — 223,063 Operating expenses 488,955 65,581 265,007 819,543 Total costs and expenses 686,291 91,308 265,007 1,042,606 Operating earnings (loss) $ 469,363 $ 45,032 $ (265,007 ) $ 249,388 (In thousands) Domestic Global Other Total Six Months Ended 2018 Revenues $ 2,337,160 $ 323,428 $ — $ 2,660,588 Costs of revenue 414,859 55,202 — 470,061 Operating expenses 1,071,339 142,551 573,135 1,787,025 Total costs and expenses 1,486,198 197,753 573,135 2,257,086 Operating earnings (loss) $ 850,962 $ 125,675 $ (573,135 ) $ 403,502 (In thousands) Domestic Global Other Total Six Months Ended 2017 Revenues $ 2,287,458 $ 265,022 $ — $ 2,552,480 Costs of revenue 373,697 48,359 — 422,056 Operating expenses 972,335 129,104 535,471 1,636,910 Total costs and expenses 1,346,032 177,463 535,471 2,058,966 Operating earnings (loss) $ 941,426 $ 87,559 $ (535,471 ) $ 493,514 |
Interim Statement Presentatio20
Interim Statement Presentation Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Supplemental Disclosures of Cash Flow Information Six Months Ended (In thousands) 2018 2017 Cash paid during the period for: Interest (including amounts capitalized of $5,874 and $5,520, respectively) $ 8,333 $ 9,067 Income taxes, net of refunds (86,825 ) 99,104 |
Revenue from Contracts with C21
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Initial Application Period Cumulative Effect Transition [Table Text Block] | A summary of such cumulative effect adjustment is as follows: (In thousands) Increase / (Decrease) Receivables, net $ (79,492 ) Prepaid expenses and other (2,253 ) Other assets 81,157 Accounts payable (9,361 ) Deferred income taxes and other liabilities 1,173 Retained earnings 7,600 |
Disaggregation of Revenue [Table Text Block] | The following tables present revenues disaggregated by our business models: Three Months Ended 2018 2017 (1) (In thousands) Domestic Segment Global Segment Total Domestic Segment Global Segment Total Licensed software $ 161,220 $ 11,168 $ 172,388 $ 146,895 $ 8,991 $ 155,886 Technology resale 61,789 13,468 75,257 66,358 6,774 73,132 Subscriptions 76,419 6,532 82,951 112,518 6,272 118,790 Professional services 387,540 59,778 447,318 347,313 48,850 396,163 Managed services 261,787 23,765 285,552 242,673 19,006 261,679 Support and maintenance 229,779 49,177 278,956 214,642 44,932 259,574 Reimbursed travel 23,530 1,775 25,305 25,255 1,515 26,770 Total revenues $ 1,202,064 $ 165,663 $ 1,367,727 $ 1,155,654 $ 136,340 $ 1,291,994 (1) As noted above, prior period amounts were not adjusted upon our adoption of Topic 606. Six Months Ended 2018 2017 (1) (In thousands) Domestic Global Total Domestic Global Total Licensed software $ 285,314 $ 21,893 $ 307,207 $ 279,427 $ 18,787 $ 298,214 Technology resale 120,038 18,595 138,633 126,871 10,368 137,239 Subscriptions 146,271 13,316 159,587 220,770 11,441 232,211 Professional services 767,384 121,202 888,586 696,177 96,301 792,478 Managed services 507,932 45,925 553,857 485,306 36,192 521,498 Support and maintenance 464,015 99,505 563,520 432,386 89,292 521,678 Reimbursed travel 46,206 2,992 49,198 46,521 2,641 49,162 Total revenues $ 2,337,160 $ 323,428 $ 2,660,588 $ 2,287,458 $ 265,022 $ 2,552,480 (1) As noted above, prior period amounts were not adjusted upon our adoption of Topic 606. The following table presents our revenues disaggregated by timing of revenue recognition: Three Months Ended Six Months Ended 2018 2018 (In thousands) Domestic Global Total Domestic Segment Global Segment Total Revenue recognized over time $ 1,062,878 $ 144,262 $ 1,207,140 $ 2,091,373 $ 288,397 $ 2,379,770 Revenue recognized at a point in time 139,186 21,401 160,587 245,787 35,031 280,818 Total revenues $ 1,202,064 $ 165,663 $ 1,367,727 $ 2,337,160 $ 323,428 $ 2,660,588 |
Receivables (Tables)
Receivables (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Summary of Net Receivables | A summary of net receivables is as follows: (In thousands) June 30, 2018 December 30, 2017 Client receivables $ 1,204,487 $ 1,082,886 Less: Allowance for doubtful accounts 61,639 52,786 Client receivables, net of allowance 1,142,848 1,030,100 Current portion of lease receivables 9,012 12,681 Total receivables, net $ 1,151,860 $ 1,042,781 |
Investments Investments (Tables
Investments Investments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments [Abstract] | |
Schedule of available-for-sale investments | Available-for-sale investments at June 30, 2018 were as follows: (In thousands) Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash equivalents: Money market funds $ 42,195 $ — $ — $ 42,195 Time deposits 78,581 — — 78,581 Total cash equivalents 120,776 — — 120,776 Short-term investments: Time deposits 28,988 — — 28,988 Commercial paper 77,950 — (98 ) 77,852 Government and corporate bonds 268,884 — (1,128 ) 267,756 Total short-term investments 375,822 — (1,226 ) 374,596 Long-term investments: Government and corporate bonds 105,251 — (753 ) 104,498 Total available-for-sale investments $ 601,849 $ — $ (1,979 ) $ 599,870 Available-for-sale investments at December 30, 2017 were as follows: (In thousands) Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash equivalents: Money market funds $ 99,472 $ — $ — $ 99,472 Time deposits 60,226 — — 60,226 Government and corporate bonds 850 — — 850 Total cash equivalents 160,548 — — 160,548 Short-term investments: Time deposits 40,186 — — 40,186 Commercial paper 147,646 2 (139 ) 147,509 Government and corporate bonds 247,626 — (477 ) 247,149 Total short-term investments 435,458 2 (616 ) 434,844 Long-term investments: Government and corporate bonds 185,478 — (1,026 ) 184,452 Total available-for-sale investments $ 781,484 $ 2 $ (1,642 ) $ 779,844 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table details our financial assets measured and recorded at fair value on a recurring basis at June 30, 2018 : (In thousands) Fair Value Measurements Using Description Balance Sheet Classification Level 1 Level 2 Level 3 Money market funds Cash equivalents $ 42,195 $ — $ — Time deposits Cash equivalents — 78,581 — Time deposits Short-term investments — 28,988 — Commercial paper Short-term investments — 77,852 — Government and corporate bonds Short-term investments — 267,756 — Government and corporate bonds Long-term investments — 104,498 — The following table details our financial assets measured and recorded at fair value on a recurring basis at December 30, 2017 : (In thousands) Fair Value Measurements Using Description Balance Sheet Classification Level 1 Level 2 Level 3 Money market funds Cash equivalents $ 99,472 $ — $ — Time deposits Cash equivalents — 60,226 — Government and corporate bonds Cash equivalents — 850 — Time deposits Short-term investments — 40,186 — Commercial paper Short-term investments — 147,509 — Government and corporate bonds Short-term investments — 247,149 — Government and corporate bonds Long-term investments — 184,452 — |
Indebtedness (Tables)
Indebtedness (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Indebtedness Outstanding | The following is a summary of indebtedness outstanding: (In thousands) June 30, 2018 December 30, 2017 Senior Notes $ 425,000 $ 500,000 Capital lease obligations 2,155 13,068 Other 14,162 14,162 Debt and capital lease obligations 441,317 527,230 Less: debt issuance costs (402 ) (515 ) Debt and capital lease obligations, net 440,915 526,715 Less: current portion (2,155 ) (11,585 ) Long-term debt and capital lease obligations $ 438,760 $ 515,130 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||
Reconciliation Of The Numerators And The Denominators Of The Basic And Diluted Per Share | A reconciliation of the numerators and the denominators of the basic and diluted per share computations are as follows: Three Months Ended 2018 2017 Earnings Shares Per-Share Earnings Shares Per-Share (In thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic earnings per share: Income available to common shareholders $ 169,357 330,206 $ 0.51 $ 179,683 331,056 $ 0.54 Effect of dilutive securities: Stock options and non-vested shares — 3,356 — 6,842 Diluted earnings per share: Income available to common shareholders including assumed conversions $ 169,357 333,562 $ 0.51 $ 179,683 337,898 $ 0.53 | Six Months Ended 2018 2017 Earnings Shares Per-Share Earnings Shares Per-Share (In thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic earnings per share: Income available to common shareholders $ 329,358 331,479 $ 0.99 $ 352,896 330,607 $ 1.07 Effect of dilutive securities: Stock options and non-vested shares — 3,744 — 6,509 Diluted earnings per share: Income available to common shareholders including assumed conversions $ 329,358 335,223 $ 0.98 $ 352,896 337,116 $ 1.05 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule Of Stock Options Activity | Stock option activity for the six months ended June 30, 2018 was as follows: (In thousands, except per share data) Number of Shares Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted-Average Remaining Contractual Term (Yrs) Outstanding at beginning of year 21,332 $ 49.40 Granted 3,572 58.32 Exercised (947 ) 23.25 Forfeited and expired (156 ) 60.75 Outstanding as of June 30, 2018 23,801 51.71 $ 235,909 6.67 Exercisable as of June 30, 2018 12,287 $ 43.77 $ 210,966 4.84 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted-average assumptions used to estimate the fair value, under the Black-Scholes-Merton pricing model, of stock options granted during the six months ended June 30, 2018 were as follows: Expected volatility (%) 27.0 % Expected term (yrs) 7 Risk-free rate (%) 2.8 % Fair value per option $ 20.12 |
Schedule of Share-based Compensation, Restricted Stock Activity | Non-vested share and share unit activity for the six months ended June 30, 2018 was as follows: (In thousands, except per share data) Number of Shares Weighted-Average Grant Date Fair Value Outstanding at beginning of year 799 $ 66.76 Granted 480 58.72 Vested (343 ) 65.54 Forfeited (3 ) 62.78 Outstanding as of June 30, 2018 933 $ 63.08 |
Compensation Expense Recognized In The Condensed Consolidated Statements Of Operations | The following table presents total compensation expense recognized with respect to stock options, non-vested shares and share units, and our associate stock purchase plan: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Stock option and non-vested share and share unit compensation expense $ 24,204 $ 21,859 $ 49,139 $ 39,359 Associate stock purchase plan expense 1,916 1,495 3,278 2,970 Amounts capitalized in software development costs, net of amortization 161 (200 ) 321 (320 ) Amounts charged against earnings, before income tax benefit $ 26,281 $ 23,154 $ 52,738 $ 42,009 Amount of related income tax benefit recognized in earnings $ 5,568 $ 6,647 $ 10,868 $ 12,063 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of the Operating Information | The following table presents a summary of our operating segments and other expense for the three and six months ended June 30, 2018 and July 1, 2017 : (In thousands) Domestic Global Other Total Three Months Ended 2018 Revenues $ 1,202,064 $ 165,663 $ — $ 1,367,727 Costs of revenue 208,185 30,598 — 238,783 Operating expenses 551,468 73,407 295,782 920,657 Total costs and expenses 759,653 104,005 295,782 1,159,440 Operating earnings (loss) $ 442,411 $ 61,658 $ (295,782 ) $ 208,287 (In thousands) Domestic Global Other Total Three Months Ended 2017 Revenues $ 1,155,654 $ 136,340 $ — $ 1,291,994 Costs of revenue 197,336 25,727 — 223,063 Operating expenses 488,955 65,581 265,007 819,543 Total costs and expenses 686,291 91,308 265,007 1,042,606 Operating earnings (loss) $ 469,363 $ 45,032 $ (265,007 ) $ 249,388 (In thousands) Domestic Global Other Total Six Months Ended 2018 Revenues $ 2,337,160 $ 323,428 $ — $ 2,660,588 Costs of revenue 414,859 55,202 — 470,061 Operating expenses 1,071,339 142,551 573,135 1,787,025 Total costs and expenses 1,486,198 197,753 573,135 2,257,086 Operating earnings (loss) $ 850,962 $ 125,675 $ (573,135 ) $ 403,502 (In thousands) Domestic Global Other Total Six Months Ended 2017 Revenues $ 2,287,458 $ 265,022 $ — $ 2,552,480 Costs of revenue 373,697 48,359 — 422,056 Operating expenses 972,335 129,104 535,471 1,636,910 Total costs and expenses 1,346,032 177,463 535,471 2,058,966 Operating earnings (loss) $ 941,426 $ 87,559 $ (535,471 ) $ 493,514 |
Interim Statement Presentatio29
Interim Statement Presentation Policies (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Dec. 30, 2017 | |
Interim Statement Presentation [Line Items] | ||
Basis of Accounting, Policy [Policy Text Block] | The condensed consolidated financial statements were prepared using GAAP | |
Use of Estimates, Policy [Policy Text Block] | These principles require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses | |
Fiscal Period, Policy [Policy Text Block] | Our second fiscal quarter ends on the Saturday closest to June 30. The 2018 and 2017 second quarters ended on June 30, 2018 and July 1, 2017, respectively. All references to years in these notes to condensed consolidated financial statements represent the respective three or six months ended on such dates, unless otherwise noted | |
Accounting Standards Update 2016-01 [Member] | ||
Interim Statement Presentation [Line Items] | ||
New Accounting Pronouncement or Change in Accounting Principle, Description | In January 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which was subsequently amended in February 2018 by ASU 2018-03, Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments | |
New Accounting Pronouncement or Change in Accounting Principle, Description of Transition Method | Provisions within the guidance applicable to the Company were required to be applied prospectively. | |
Accounting Standards Update 2016-02 [Member] | ||
Interim Statement Presentation [Line Items] | ||
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which introduces a new model that requires most leases to be reported on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the new revenue recognition standard. The standard requires the use of the modified retrospective (cumulative effect) transition approach. ASU 2016-02 is effective for the Company in the first quarter of 2019, with early adoption permitted. We are currently evaluating the effect that ASU 2016-02 will have on our consolidated financial statements and related disclosures, and we do not expect to early adopt. | |
Operating Leases, Future Minimum Payments Due | $ 124 | |
Accounting Standards Update 2016-13 [Member] | ||
Interim Statement Presentation [Line Items] | ||
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides new guidance regarding the measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how we determine our allowance for estimated uncollectible receivables and evaluate our available-for-sale investments for impairment. ASU 2016-13 is effective for the Company in the first quarter of 2020, with early adoption permitted in the first quarter of 2019. We are currently evaluating the effect that ASU 2016-13 will have on our consolidated financial statements and related disclosures, and we have not determined if we will early adopt. | |
Accounting Standards Update 2017-08 [Member] | ||
Interim Statement Presentation [Line Items] | ||
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which shortens the amortization period for certain investments in callable debt securities purchased at a premium by requiring the premium be amortized to the earliest call date. Such guidance will impact how premiums are amortized on our available-for-sale investments. ASU 2017-08 is effective for the Company in the first quarter of 2019, with early adoption permitted. The standard requires the use of the modified retrospective (cumulative effect) transition approach. We do not expect ASU 2017-08 to have a material impact on our consolidated financial statements and related disclosures, and we do not expect to early adopt | |
Accounting Standards Update 2018-02 [Member] | ||
Interim Statement Presentation [Line Items] | ||
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income ("AOCI") to retained earnings for "stranded tax effects" resulting from certain U.S. tax reform enacted in December 2017. Such "stranded tax effects" were created when deferred tax assets and liabilities related to items in AOCI were remeasured at the lower U.S. corporate tax rate in the period of enactment. ASU 2018-02 is effective for the Company in the first quarter of 2019, with early adoption permitted. The guidance in this ASU is to be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. corporate tax rate was recognized. We are currently evaluating the effect that ASU 2018-02 will have on our consolidated financial statements and related disclosures, and we do not expect to early adopt |
Interim Statement Presentatio30
Interim Statement Presentation Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest Paid, Capitalized | $ 5,874 | $ 5,520 |
Interest Paid | 8,333 | 9,067 |
Income Taxes Paid, Net | $ (86,825) | $ 99,104 |
Revenue from Contracts with C31
Revenue from Contracts with Customers Cumulative Effect Transition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Dec. 31, 2017 | Dec. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Receivables, Net, Current | $ 1,151,860 | $ 1,151,860 | $ 1,042,781 | |||
Prepaid Expense and Other Assets | 326,623 | 326,623 | 515,930 | |||
Other assets | 208,274 | 208,274 | 134,011 | |||
Accounts Payable, Current | 284,203 | 284,203 | 218,996 | |||
Deferred Income Taxes and Other Liabilities, Noncurrent | 371,381 | 371,381 | 365,674 | |||
Retained Earnings | 5,275,824 | 5,275,824 | $ 4,938,866 | |||
Revenues | 1,367,727 | $ 1,291,994 | 2,660,588 | $ 2,552,480 | ||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (214,884) | $ (252,049) | $ (414,963) | $ (495,059) | ||
Accounting Standards Update 2014-09 [Member] | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Description | In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 replaced most existing revenue recognition guidance in U.S. GAAP. The new standard introduces a five-step process to be followed in determining the amount and timing of revenue recognition. It also provides guidance on accounting for costs incurred to obtain or fulfill contracts with customers, and establishes disclosure requirements which are more extensive than those required under prior U.S. GAAP | |||||
New Accounting Pronouncement or Change in Accounting Principle, Description of Transition Method | We selected the modified retrospective (cumulative effect) transition method of adoption. Such method provides that the cumulative effect from prior periods upon applying the new guidance to contracts which were not complete as of the adoption date, be recognized in our condensed consolidated balance sheets as of December 31, 2017, including an adjustment to retained earnings | |||||
Receivables, Net, Current | $ (79,492) | |||||
Prepaid Expense and Other Assets | (2,253) | |||||
Other assets | 81,157 | |||||
Accounts Payable, Current | (9,361) | |||||
Deferred Income Taxes and Other Liabilities, Noncurrent | 1,173 | |||||
Retained Earnings | $ 7,600 | |||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Revenues | 21,000 | $ 64,000 | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | $ 15,000 | $ 13,000 |
Revenue from Contracts with C32
Revenue from Contracts with Customers Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,367,727 | $ 1,291,994 | $ 2,660,588 | $ 2,552,480 |
Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,207,140 | 2,379,770 | ||
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 160,587 | 280,818 | ||
Domestic Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,202,064 | 1,155,654 | 2,337,160 | 2,287,458 |
Domestic Segment | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,062,878 | 2,091,373 | ||
Domestic Segment | Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 139,186 | 245,787 | ||
Global Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 165,663 | 136,340 | 323,428 | 265,022 |
Global Segment | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 144,262 | 288,397 | ||
Global Segment | Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 21,401 | 35,031 | ||
Sales Revenue, Licensed Software, Net [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 172,388 | 155,886 | 307,207 | 298,214 |
Sales Revenue, Licensed Software, Net [Member] | Domestic Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 161,220 | 146,895 | 285,314 | 279,427 |
Sales Revenue, Licensed Software, Net [Member] | Global Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 11,168 | 8,991 | 21,893 | 18,787 |
Sales Revenue, Technology Resale, Net [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 75,257 | 73,132 | 138,633 | 137,239 |
Sales Revenue, Technology Resale, Net [Member] | Domestic Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 61,789 | 66,358 | 120,038 | 126,871 |
Sales Revenue, Technology Resale, Net [Member] | Global Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 13,468 | 6,774 | 18,595 | 10,368 |
Sales Revenue, Subscriptions, Net [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 82,951 | 118,790 | 159,587 | 232,211 |
Sales Revenue, Subscriptions, Net [Member] | Domestic Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 76,419 | 112,518 | 146,271 | 220,770 |
Sales Revenue, Subscriptions, Net [Member] | Global Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6,532 | 6,272 | 13,316 | 11,441 |
Sales Revenue, Professional Services, Net [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 447,318 | 396,163 | 888,586 | 792,478 |
Sales Revenue, Professional Services, Net [Member] | Domestic Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 387,540 | 347,313 | 767,384 | 696,177 |
Sales Revenue, Professional Services, Net [Member] | Global Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 59,778 | 48,850 | 121,202 | 96,301 |
Sales Revenue, Managed Services, Net [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 285,552 | 261,679 | 553,857 | 521,498 |
Sales Revenue, Managed Services, Net [Member] | Domestic Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 261,787 | 242,673 | 507,932 | 485,306 |
Sales Revenue, Managed Services, Net [Member] | Global Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 23,765 | 19,006 | 45,925 | 36,192 |
Sales Revenue, Support and Maintenance Services, Net [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 278,956 | 259,574 | 563,520 | 521,678 |
Sales Revenue, Support and Maintenance Services, Net [Member] | Domestic Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 229,779 | 214,642 | 464,015 | 432,386 |
Sales Revenue, Support and Maintenance Services, Net [Member] | Global Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 49,177 | 44,932 | 99,505 | 89,292 |
Sales Revenue, Reimbursement Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 25,305 | 26,770 | 49,198 | 49,162 |
Sales Revenue, Reimbursement Revenue [Member] | Domestic Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 23,530 | 25,255 | 46,206 | 46,521 |
Sales Revenue, Reimbursement Revenue [Member] | Global Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,775 | $ 1,515 | $ 2,992 | $ 2,641 |
Revenue from Contracts with C33
Revenue from Contracts with Customers Performance Obligation (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Revenue Recognition [Line Items] | |
Revenue Recognition, Policy [Policy Text Block] | We enter into contracts with customers that may include various combinations of our software solutions and related services, which are generally capable of being distinct and accounted for as separate performance obligations. The predominant model of customer procurement involves multiple deliverables and includes a software license agreement, project-related implementation and consulting services, software support, hosting services, and computer hardware. We allocate revenues to each performance obligation within an arrangement based on estimated relative stand-alone selling price. Revenue is then recognized for each performance obligation upon transfer of control of the software solution or services to the customer in an amount that reflects the consideration we expect to receive |
Revenue, Remaining Performance Obligation | $ 14,790 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation | we expect to recognize approximately 31% of the revenue over the next 12 months and the remainder thereafter |
Perpetual Software Licenses [Member] | |
Revenue Recognition [Line Items] | |
Revenue, Performance Obligation, Description of Timing | Perpetual software licenses - We recognize perpetual software license revenues when control of such licenses are transferred to the client ("point in time"). We determine the amount of consideration allocated to this performance obligation using the residual approach |
Software as a Service [Member] | |
Revenue Recognition [Line Items] | |
Revenue, Performance Obligation, Description of Timing | Software as a service - We recognize software as a service ratably over the related hosting period ("over time") |
Time-based Software and Content License Fees [Member] | |
Revenue Recognition [Line Items] | |
Revenue, Performance Obligation, Description of Timing | Time-based software and content license fees - We recognize a license component of time-based software and content license fees upon delivery to the client ("point in time") and a non-license component (i.e. support) ratably over the respective contract term ("over time") |
Remote Hosting Recurring Services [Member] | |
Revenue Recognition [Line Items] | |
Revenue, Performance Obligation, Description of Timing | Hosting - Remote hosting recurring services are recognized ratably over the hosting service period ("over time"). Certain of our hosting arrangements contain fees deemed to be a "material right" under Topic 606. We recognize such fees over the term that will likely affect the client's decision about whether to renew the related hosting service ("over time") |
Services [Member] | |
Revenue Recognition [Line Items] | |
Revenue, Performance Obligation, Description of Timing | Services - We recognize revenue for fixed fee services arrangements over time, utilizing a labor hours input method. For fee-for-service arrangements, we recognize revenue over time as hours are worked at the rates clients are invoiced, utilizing the "as invoiced" practical expedient available in Topic 606. For stand-ready services arrangements, we recognize revenue ratably over the related service period |
Support and Maintenance [Member] | |
Revenue Recognition [Line Items] | |
Revenue, Performance Obligation, Description of Timing | Support and maintenance - We recognize support and maintenance fees ratably over the related contract period ("over time") |
Hardware [Member] | |
Revenue Recognition [Line Items] | |
Revenue, Performance Obligation, Description of Timing | Hardware - We recognize hardware revenues when control of such hardware/devices is transferred to the client ("point in time") |
Transaction Processing [Member] | |
Revenue Recognition [Line Items] | |
Revenue, Performance Obligation, Description of Timing | Transaction processing - We recognize transaction processing revenues ratably as we provide such services ("over time") |
Revenue from Contracts with C34
Revenue from Contracts with Customers (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Contract with Customer, Liability, Revenue Recognized | $ 287 | |
Capitalized Contract Cost, Net | $ 85 | 85 |
Capitalized Contract Cost, Amortization | $ 10 | $ 18 |
Revenue, Judgment | Our contracts with clients typically include various combinations of our software solutions and related services. Determining whether such software solutions and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Specifically, judgment is required to determine whether software licenses are distinct from services and hosting included in an arrangement | |
Revenue, Information Used to Allocate Transaction Price | Contract transaction price is allocated to performance obligations using estimated stand-alone selling price | |
Revenue, Information Used to Determine Transaction Price | We determine stand-alone selling price maximizing observable inputs such as stand-alone sales when they exist or substantive renewal prices charged to clients. In instances where stand-alone selling price is not observable, we utilize an estimate of stand-alone selling price. Such estimates are derived from various methods that include: cost plus margin, historical pricing practices, and the residual approach, which requires a considerable amount of judgment | |
Revenue, Practical Expedient, Initial Application and Transition, Nonrestatement of Modified Contract [true/false] | true |
Receivables (Narrative) (Detail
Receivables (Narrative) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Receivables [Abstract] | ||
Client cash collections | $ 2,590 | $ 2,640 |
Receivables (Summary Of Net Rec
Receivables (Summary Of Net Receivables) (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Receivables [Abstract] | ||
Gross accounts receivable | $ 1,204,487 | $ 1,082,886 |
Less: Allowance for doubtful accounts | 61,639 | 52,786 |
Accounts receivable, net of allowance | 1,142,848 | 1,030,100 |
Current portion of lease receivables | 9,012 | 12,681 |
Total receivables, net | $ 1,151,860 | $ 1,042,781 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Investments [Abstract] | ||
Proceeds from Sale of Available-for-sale Securities | $ 45 | $ 20 |
Subsequent Event, Date | Jul. 27, 2018 | |
Subsequent Event, Description | we acquired a minority interest in Essence Group Holdings Corporation ("Essence Group") for cash consideration of $266 million under a Stock Purchase Agreement ("SPA") dated July 9, 2018. |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | $ 601,849 | $ 781,484 |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (1,979) | (1,642) |
Available-for-sale Securities | 599,870 | 779,844 |
Cash equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 120,776 | 160,548 |
Available-for-sale Securities | 120,776 | 160,548 |
Cash equivalents [Member] | Money market funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 42,195 | 99,472 |
Available-for-sale Securities | 42,195 | 99,472 |
Cash equivalents [Member] | Time deposits [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 78,581 | 60,226 |
Available-for-sale Securities | 78,581 | 60,226 |
Cash equivalents [Member] | Government and corporate bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 850 | |
Available-for-sale Securities | 850 | |
Short-term investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 375,822 | 435,458 |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (1,226) | (616) |
Available-for-sale Securities | 374,596 | 434,844 |
Short-term investments [Member] | Time deposits [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 28,988 | 40,186 |
Available-for-sale Securities | 28,988 | 40,186 |
Short-term investments [Member] | Commercial paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 77,950 | 147,646 |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (98) | (139) |
Available-for-sale Securities | 77,852 | 147,509 |
Short-term investments [Member] | Government and corporate bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 268,884 | 247,626 |
Gross Unrealized Losses | (1,128) | (477) |
Available-for-sale Securities | 267,756 | 247,149 |
Long-term investments [Member] | Government and corporate bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 105,251 | 185,478 |
Gross Unrealized Losses | (753) | (1,026) |
Available-for-sale Securities | $ 104,498 | $ 184,452 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 30, 2017 |
Fair Value Disclosures [Abstract] | ||
Fair value of long-term debt, including current maturities | $ 431 | $ 519 |
Carrying amount of long-term debt | $ 425 | $ 500 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value, Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | $ 599,870 | $ 779,844 |
Level 1 [Member] | Money market funds [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 42,195 | 99,472 |
Level 2 [Member] | Time deposits [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 78,581 | 60,226 |
Level 2 [Member] | Government and corporate bonds [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 850 | |
Short-term investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 374,596 | 434,844 |
Short-term investments [Member] | Level 2 [Member] | Time deposits [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 28,988 | 40,186 |
Short-term investments [Member] | Level 2 [Member] | Commercial paper [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 77,852 | 147,509 |
Short-term investments [Member] | Level 2 [Member] | Government and corporate bonds [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 267,756 | 247,149 |
Long-term investments [Member] | Level 2 [Member] | Government and corporate bonds [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | $ 104,498 | $ 184,452 |
Indebtedness (Schedule of Indeb
Indebtedness (Schedule of Indebtedness Outstanding) (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | $ 441,317 | $ 527,230 |
Debt Issuance Costs, Noncurrent, Net | (402) | (515) |
Long-term Debt and Capital Lease Obligations, Net of Debt Issuance Costs | 440,915 | 526,715 |
Long-term Debt and Capital Lease Obligations, Current | 2,155 | 11,585 |
Long-term debt and capital lease obligations | 438,760 | 515,130 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | 425,000 | 500,000 |
Capital Lease Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | 2,155 | 13,068 |
Other [Member] | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | $ 14,162 | $ 14,162 |
Indebtedness (Details)
Indebtedness (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Debt Instrument [Line Items] | ||
Repayments of Long-term Debt | $ 75,000 | $ 0 |
Series 2015-C [Member] | ||
Debt Instrument [Line Items] | ||
Repayments of Long-term Debt | $ 75,000 | |
Debt Instrument, Maturity Date | Feb. 15, 2022 |
Income Taxes (Details)
Income Taxes (Details) | 6 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory Tax Rate | 21.00% | |
Effective tax rate | 20.60% | 28.70% |
Earnings Per Share (Reconciliat
Earnings Per Share (Reconciliation Of The Numerators And The Denominators Of The Basic And Diluted Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Earnings Per Share [Abstract] | ||||
Income available to common shareholders, basic | $ 169,357 | $ 179,683 | $ 329,358 | $ 352,896 |
Income available to common shareholders including assumed conversions, diluted | $ 169,357 | $ 179,683 | $ 329,358 | $ 352,896 |
Basic weighted average shares outstanding | 330,206 | 331,056 | 331,479 | 330,607 |
Stock options and non-vested shares, incremental shares | 3,356 | 6,842 | 3,744 | 6,509 |
Diluted weighted average shares outstanding | 333,562 | 337,898 | 335,223 | 337,116 |
Basic earnings per share | $ 0.51 | $ 0.54 | $ 0.99 | $ 1.07 |
Diluted earnings per share | $ 0.51 | $ 0.53 | $ 0.98 | $ 1.05 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - $ / shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 14 | 11 | 12.4 | 11.7 |
Antidilutive securities excluded from computation of earnings per share, exercise price, lower range limit | $ 47.99 | $ 50.04 | $ 50.04 | $ 47.38 |
Antidilutive securities excluded from computation of earnings per share, exercise price, upper range limit | $ 73.40 | $ 73.40 | $ 73.40 | $ 73.40 |
Share-Based Compensation (Sched
Share-Based Compensation (Schedule Of Stock Options Activity) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Outstanding at beginning of year, number of shares | shares | 21,332 |
Outstanding at beginning of year, weighted-average exercise price | $ / shares | $ 49.40 |
Granted, number of shares | shares | 3,572 |
Granted, weighted-average exercise price | $ / shares | $ 58.32 |
Exercised, number of shares | shares | (947) |
Exercised, weighted-average exercise price | $ / shares | $ 23.25 |
Forfeited and expired, number of shares | shares | (156) |
Forfeited and expired, weighted-average exercise price | $ / shares | $ 60.75 |
Outstanding end of year, number of shares | shares | 23,801 |
Outstanding at end of year, weighted-average exercise price | $ / shares | $ 51.71 |
Outstanding at end of year, aggregate intrinsic value | $ | $ 235,909 |
Outstanding at end of year, weighted-average remaining contractual term | 6 years 8 months 3 days |
Exercisable at end of year, number of shares | shares | 12,287 |
Exercisable at end of year, weighted-average exercise price | $ / shares | $ 43.77 |
Exercisable at end of year, aggregate intrinsic value | $ | $ 210,966 |
Exercisable at end of year, weighted-average remaining contractual term | 4 years 10 months 1 day |
Share-Based Compensation (Sch47
Share-Based Compensation (Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions) (Details) | 6 Months Ended |
Jun. 30, 2018$ / shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Expected volatility (%) | 27.00% |
Expected term (yrs) | 7 years |
Risk-free rate (%) | 2.80% |
Fair value per option | $ 20.12 |
Share-Based Compensation (Sch48
Share-Based Compensation (Schedule Of Non-Vested Shares Activity) (Details) - Restricted Stock [Member] shares in Thousands | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at beginning of year, number of shares | shares | 799 |
Outstanding at beginning of year, weighted-average grant date fair value | $ / shares | $ 66.76 |
Granted, number of shares | shares | 480 |
Granted, weighted-average grant date fair value | $ / shares | $ 58.72 |
Vested, number of shares | shares | (343) |
Vested, weighted-average grant date fair value | $ / shares | $ 65.54 |
Forfeited, number of shares | shares | (3) |
Forfeited, weighted-average grant date fair value | $ / shares | $ 62.78 |
Outstanding at end of year, number of shares | shares | 933 |
Outstanding at end of year, weighted-average grant date fair value | $ / shares | $ 63.08 |
Share-Based Compensation (Compe
Share-Based Compensation (Compensation Expense Recognized In The Condensed Consolidated Statements Of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Amounts charged against earnings, before income tax benefit | $ 26,281 | $ 23,154 | $ 52,738 | $ 42,009 |
Amount of related income tax benefit recognized in earnings | 5,568 | 6,647 | 10,868 | 12,063 |
Stock option and non-vested share compensation expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Amounts charged against earnings, before income tax benefit | 24,204 | 21,859 | 49,139 | 39,359 |
Associate stock purchase plan expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Amounts charged against earnings, before income tax benefit | 1,916 | 1,495 | 3,278 | 2,970 |
Amounts capitalized in software development costs, net of amortization | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Amounts charged against earnings, before income tax benefit | $ 161 | $ (200) | $ 321 | $ (320) |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Thousands, shares in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Share-based Awards Other than Options | $ 44,000 | |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | 185,000 | |
Stock Repurchase Program, Authorized Amount | 1,000,000 | $ 500,000 |
Stock Repurchase Program, Authorized Amount Increase | $ 500,000 | |
Stock Repurchased During Period, Shares | 4.8 | |
Payments for Repurchase of Common Stock | $ 287,624 | $ 0 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 639,000 | |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Period of recognition for remaining share-based compensation expense | 3 years 7 months 3 days | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Period of recognition for remaining share-based compensation expense | 2 years 1 month 1 day |
Segment Reporting (Summary Of T
Segment Reporting (Summary Of The Operating Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,367,727 | $ 1,291,994 | $ 2,660,588 | $ 2,552,480 |
Cost of revenues | 238,783 | 223,063 | 470,061 | 422,056 |
Operating expenses | 920,657 | 819,543 | 1,787,025 | 1,636,910 |
Total costs and expenses | 1,159,440 | 1,042,606 | 2,257,086 | 2,058,966 |
Operating earnings (loss) | 208,287 | 249,388 | 403,502 | 493,514 |
Domestic Segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,202,064 | 1,155,654 | 2,337,160 | 2,287,458 |
Cost of revenues | 208,185 | 197,336 | 414,859 | 373,697 |
Operating expenses | 551,468 | 488,955 | 1,071,339 | 972,335 |
Total costs and expenses | 759,653 | 686,291 | 1,486,198 | 1,346,032 |
Operating earnings (loss) | 442,411 | 469,363 | 850,962 | 941,426 |
Global Segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 165,663 | 136,340 | 323,428 | 265,022 |
Cost of revenues | 30,598 | 25,727 | 55,202 | 48,359 |
Operating expenses | 73,407 | 65,581 | 142,551 | 129,104 |
Total costs and expenses | 104,005 | 91,308 | 197,753 | 177,463 |
Operating earnings (loss) | 61,658 | 45,032 | 125,675 | 87,559 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Operating expenses | 295,782 | 265,007 | 573,135 | 535,471 |
Total costs and expenses | 295,782 | 265,007 | 573,135 | 535,471 |
Operating earnings (loss) | $ (295,782) | $ (265,007) | $ (573,135) | $ (535,471) |