x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
New York | 81-2983623 | |
(State of incorporation) | (IRS Employer Identification No.) | |
100 Campus Drive, Suite 200 Florham Park, New Jersey 07932 | (844) 663-2638 | |
(Address of principal executive offices) | (Registrants telephone number, including area code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $0.01 par value | New York Stock Exchange |
Class | Outstanding at January 31, 2018 | |
Common Stock, $0.01 par value | 210,469,177 |
Document | Part of Form 10-K in which Incorporated | |
Conduent Incorporated Notice of 2018 Annual Meeting of Shareholders and Proxy Statement (to be filed no later than 120 days after the close of the fiscal year covered by this report on Form 10-K) | III |
Page | ||
Part I | ||
. |
• | Realigned Delivery. During 2017 we reorganized the business to better align to our vertical go-to-market strategy and to our global delivery capabilities. We believe this operating structure will allow us to better integrate and tailor business solutions for our customers. |
• | Divested Non-Core Assets. We divested five businesses in 2017 for aggregate proceeds of $56 million in cash. These sales enabled us to increase our focus on areas where we have a competitive advantage. |
• | Increased Use of Automation. We have developed and deployed a set of advanced software-based automation tools as part of our service delivery operations. These tools reduce the amount of repetitive, manual labor required to deliver many of our services and improve service quality through lower error rates and faster processing times. |
• | Real Estate, Infrastructure and Selling, General and Administrative (SG&A). We have significantly reduced the number of leased and owned properties from 462 to 339, reduced our information technology infrastructure costs by streamlining our operations and reduced our SG&A costs from $686 million in 2016 to $615 million in 2017. |
• | Our Commercial Industries segment provides business process services and customized solutions to clients in a variety of industries. |
• | Our Public Sector segment provides government-centric business process services and subject matter experts to U.S. federal, state and local and foreign governments. |
• | Transportation: We provide revenue-generating transportation services to government clients in 27 countries. Our services include support for electronic toll collection, public transit, parking, photo enforcement and commercial vehicle operations. Across these offerings, we manage key processes on behalf of our clients including fee collection, compliance and violation management, notifications, statements and reporting. These innovative services significantly improve individual travel experiences, optimize how vehicles and goods move efficiently within cities, digitize integrated modes of transportation and help our government clients to better serve their constituents. |
• | Federal, State and Local Government: We support our government clients with services targeting key civilian agencies within federal, state and local governments, as well as government administrative offices. Our depth of agency-specific expertise combined with our scale allows us to deliver and manage programs at all levels of government. Our broad set of public sector services includes public assistance program administration such as child support, pension administration, records management, electronic benefits, eligibility and payment cards, unclaimed property, disease management and software offerings in support of federal, state and local government agencies. |
• | Payments: With more than $87 billion disbursed annually, we are a leader in government payment disbursements for federally sponsored programs like Supplemental Nutritional Assistance Program (SNAP, a.k.a Food Stamps) and Women, Infant and Children (WIC) as well as government initiated cash disbursements such as child support, unemployment and federal social security. We provide our payment card services which include branded prepaid debit card (Visa and Mastercard), Electronic Benefit Transfer (EBT for SNAP and WIC) and Electronic Child Care to 36 states and the US Treasury with a diversified portfolio consisting of 147 different payment programs nationwide. |
• | Government Healthcare: We provide medical management and fiscal agent care management services to Medicaid programs and federally-funded U.S. government healthcare programs in 24 states, Puerto Rico and the District of Columbia. Our services include a range of innovative solutions such as Medicaid management fiscal agent, pharmacy benefits management and clinical program management. These services help states optimize their costs by streamlining access to care and improve patient health outcomes through population health management and help families in need by improving beneficiary support. |
• | Healthcare. U.S. healthcare spending is estimated to have represented greater than 17.9% of GDP in 2016 and is continuing to grow. As one of the most regulated industries, healthcare providers must balance increased utilization with heightened complexity and new financial pressures such as government budget challenges to significantly reduce reimbursements, reimbursement penalties for hospital readmissions and a shift from fee-for-service to “value-based” population health management. We are widely recognized by industry analysts as a leader in healthcare payer operations, serving all 20 of the top 20 U.S. managed healthcare plans and providing administrative and care management solutions to Medicaid programs and federally funded U.S. government healthcare programs in 24 states, Puerto Rico and the District of Columbia. |
• | Transportation. Traffic congestion continues to increase as urbanization and changing demographics take hold globally. As a result, optimized transportation systems are becoming critical to increase efficiency while maintaining strict safety requirements. Electronic toll collection, public transit and parking all represent key growth drivers as governments at all levels increasingly focus on transportation infrastructure. We maintain approximately 54% market share position in electronic toll collection in the United States based on toll revenues collected through our systems in 2017. We are also one of the largest U.S.-based commercial vehicle operations service providers in the United States with approximately 51% market share based on 2017 revenues, and we are an award-winning innovator in parking management. |
• | Transaction Processing. We provide high volume print and mail services, enrollment processing and personalized and targeted marketing and communications, to large corporations and we believe we are a leading provider in this market. |
• | Prepaid Cards: We are the leading provider of prepaid payment card services in support of the U.S. government prepaid card services market. |
• | Large multinational service providers such as CGI Group, Accenture, Aon Hewitt, Cognizant, Hewlett-Packard Enterprise, IBM, Teletech and Teleperformance; |
• | Traditional Business Process Outsourcing companies such as Genpact, ELX Services, Exela Technologies and WNS Global Services; |
• | Payroll processing and human capital management providers such as ADP and Paychex; |
• | Healthcare-focused IT and service solutions providers such as Cerner and Maximus; |
• | U.S. Federal focused government services such as CACI International and DXC Technology; |
• | Transportation multi-nationals such as Roper/Transcore, Cubic and Kaptsh; and |
• | Smaller niche business processing service providers and in-house departments that perform functions that could be outsourced to us. |
• | incur or guarantee additional indebtedness or sell disqualified or preferred stock; |
• | pay dividends on, make distributions in respect of, repurchase or redeem, capital stock; |
• | make investments or acquisitions; |
• | sell, transfer or otherwise dispose of certain assets, including accounts receivable; |
• | create liens; |
• | enter into sale/leaseback transactions; |
• | enter into agreements restricting the ability to pay dividends or make other intercompany transfers; |
• | consolidate, merge, sell or otherwise dispose of all or substantially all of our or our subsidiaries’ assets; |
• | enter into transactions with affiliates; |
• | prepay, repurchase or redeem certain kinds of indebtedness; |
• | issue or sell stock of our subsidiaries; and/or |
• | significantly change the nature of our business. |
• | limited in how we conduct our business and pursue our strategy; unable to raise additional debt financing to operate during general economic or business downturns; or |
• | unable to compete effectively or to take advantage of new business opportunities. |
• | Prior to the spin-off, we operated as part of Xerox’s broader corporate organization and Xerox performed various corporate functions for us, including, but not limited to, senior management, legal, human resources, finance and accounting, treasury, information technology, marketing and communications, internal audit and other shared services. Our historical financial data reflect allocations of corporate expenses from Xerox for these and similar functions. These allocations may not reflect the costs we have incurred and in the future will incur for similar services as an independent, publicly traded company. |
• | We entered into transactions with Xerox that did not exist prior to the spin-off, such as Xerox’s provision of transition services, which will cause us to incur new costs. |
• | Such historical financial data does not and in the future may not reflect changes that we have experienced and expect to experience in the future as a result of our separation from Xerox. As part of Xerox, we enjoyed certain benefits from Xerox’s operating diversity, size, purchasing power, credit rating, borrowing leverage and available capital for investments. Many of our services contracts, particularly those for our transportation service offerings in our Public Sector business, require significant capital investments, and after the spin-off, we may not have access to the capital (from both internal and external sources) necessary to fund these services contracts. As an independent entity, we may be unable to purchase goods, services and technologies, such as insurance and health care benefits and computer software licenses, or access capital markets on terms as favorable to us as those we obtained as part of Xerox prior to the spin-off. |
New York Stock Exchange composite prices* | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
High | $ | 17.44 | $ | 18.15 | $ | 17.20 | $ | 16.39 | ||||||||
Low | $ | 13.10 | $ | 15.50 | $ | 15.38 | $ | 14.95 |
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Operations | ||||||||||||||||||||
Revenues | $ | 6,022 | $ | 6,408 | $ | 6,662 | $ | 6,938 | $ | 6,879 | ||||||||||
Income (loss) income from continuing operations | 177 | (983 | ) | (336 | ) | 34 | 135 | |||||||||||||
Net income (loss) | 181 | (983 | ) | (414 | ) | (81 | ) | 182 | ||||||||||||
Per-Share Data | ||||||||||||||||||||
Income (loss) from continuing operations | ||||||||||||||||||||
Basic | $ | 0.82 | $ | (4.85 | ) | $ | (1.65 | ) | $ | 0.17 | $ | 0.67 | ||||||||
Diluted | 0.81 | (4.85 | ) | (1.65 | ) | 0.17 | 0.67 | |||||||||||||
Net income (loss) attributable to Conduent | ||||||||||||||||||||
Basic | 0.84 | (4.85 | ) | (2.04 | ) | (0.40 | ) | 0.90 | ||||||||||||
Diluted | 0.83 | (4.85 | ) | (2.04 | ) | (0.40 | ) | 0.90 | ||||||||||||
Financial Position | ||||||||||||||||||||
Working capital | $ | 1,342 | $ | 515 | $ | (867 | ) | $ | (887 | ) | $ | (1,450 | ) | |||||||
Total Assets | 7,548 | 7,709 | 9,058 | 10,954 | 11,205 | |||||||||||||||
Consolidated Capitalization | ||||||||||||||||||||
Short-term debt and current portion of long-term debt | $ | 82 | $ | 28 | $ | 24 | $ | 268 | $ | 42 | ||||||||||
Long-term debt | 1,979 | 1,913 | 37 | 43 | 310 | |||||||||||||||
Total Debt(2) | 2,061 | 1,941 | 61 | 311 | 352 | |||||||||||||||
Series A preferred stock | 142 | 142 | n/a | n/a | n/a | |||||||||||||||
Conduent shareholders' equity/former parent investment | 3,529 | 3,288 | 5,162 | 5,411 | 5,579 | |||||||||||||||
Total Consolidated Capitalization | $ | 5,732 | $ | 5,371 | $ | 5,223 | $ | 5,722 | $ | 5,931 | ||||||||||
Selected Data and Ratios(3) | ||||||||||||||||||||
Common shareholders of record at year-end(3) | 26,936 | n/a | n/a | n/a | n/a | |||||||||||||||
Book value per common share(3) | $ | 16.77 | n/a | n/a | n/a | n/a | ||||||||||||||
Year-end common stock market price(3) | $ | 16.16 | n/a | n/a | n/a | n/a |
(1) | On December 31, 2016, Conduent spun-off from Xerox Corporation. See Note 1 – Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated Financial Statements included in Item 8 of this 2017 Form 10-K for a discussion concerning the historical financial statements. |
(2) | Includes capital lease obligations. |
(3) | Common stock of Conduent Incorporated did not begin trading on the NYSE until January 3, 2017; therefore, selected data and ratios are not available for years prior to 2017. |
• | Commercial Industries - Our Commercial Industries segment provides business process services and customized solutions to clients in a variety of industries. Across the Commercial Industries segment, we deliver end-to-end business-to-business and business-to-customer services that enable our clients to optimize their key processes. Our multi-industry competencies include transaction processing, customer experience, human resource management, omni-channel communications and finance and accounting services. |
• | Public Sector - Our Public Sector segment provides government-centric business process services to U.S. federal, state and local and foreign governments for transportation, public assistance, program administration, transaction processing and payment services. |
• | significant underperformance relative to historical or projected future operating results; |
• | significant changes in the manner of our use of the acquired assets or the strategy for our overall business; and |
• | significant negative industry or economic trends. |
Year Ended December 31, | 2017 vs. 2016 | 2016 vs. 2015 | ||||||||||||||||||||||||
(in millions) | 2017 | 2016 | 2015 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||
Total Revenues | $ | 6,022 | $ | 6,408 | $ | 6,662 | $ | (386 | ) | (6 | )% | $ | (254 | ) | (4 | )% | ||||||||||
Total Cost of services | 4,977 | 5,498 | 5,977 | (521 | ) | (9 | )% | (479 | ) | (8 | )% | |||||||||||||||
Gross Margin | $ | 1,045 | $ | 910 | $ | 685 | $ | 135 | 15 | % | $ | 225 | 33 | % | ||||||||||||
Operating Costs and Expenses | ||||||||||||||||||||||||||
Research and development | $ | 13 | $ | 31 | $ | 52 | $ | (18 | ) | (58 | )% | $ | (21 | ) | (40 | )% | ||||||||||
Selling, general and administrative | 615 | 686 | 699 | (71 | ) | (10 | )% | (13 | ) | (2 | )% | |||||||||||||||
Restructuring and related costs | 101 | 101 | 159 | — | — | % | (58 | ) | (36 | )% | ||||||||||||||||
Amortization of intangible assets | 243 | 280 | 250 | (37 | ) | (13 | )% | 30 | 12 | % | ||||||||||||||||
Goodwill impairment | — | 935 | — | (935 | ) | (100 | )% | 935 | 100 | % | ||||||||||||||||
Separation costs | 12 | 44 | — | (32 | ) | (73 | )% | 44 | 100 | % | ||||||||||||||||
Interest expense | 137 | 14 | 8 | 123 | 879 | % | 6 | 75 | % | |||||||||||||||||
Related party interest | — | 26 | 61 | (26 | ) | (100 | )% | (35 | ) | (57 | )% | |||||||||||||||
(Gain) loss on sale of asset and businesses | (42 | ) | 2 | — | (44 | ) | (2,200 | )% | 2 | 100 | % | |||||||||||||||
Other (income) expenses, net | (18 | ) | 18 | 30 | (36 | ) | (200 | )% | (12 | ) | (40 | )% | ||||||||||||||
Total Operating Costs and Expenses | $ | 1,061 | $ | 2,137 | $ | 1,259 | $ | (1,076 | ) | (50 | )% | $ | 878 | 70 | % | |||||||||||
Loss Before Income Taxes | $ | (16 | ) | $ | (1,227 | ) | $ | (574 | ) | $ | 1,211 | (99 | )% | $ | (653 | ) | 114 | % | ||||||||
Income tax benefit | (193 | ) | (244 | ) | (238 | ) | 51 | (21 | )% | (6 | ) | 3 | % | |||||||||||||
Income (Loss) From Continuing Operations | $ | 177 | $ | (983 | ) | $ | (336 | ) | $ | 1,160 | (118 | )% | $ | (647 | ) | 193 | % |
(in millions) | Commercial Industries | Public Sector | Other | Total | ||||||||||||
Year Ended December 31, 2017 | ||||||||||||||||
Total Revenue | $ | 3,548 | $ | 2,163 | $ | 311 | $ | 6,022 | ||||||||
Profit (Loss) | $ | 182 | $ | 245 | $ | (10 | ) | $ | 417 | |||||||
EBITDA(1) | $ | 344 | $ | 330 | $ | (3 | ) | $ | 671 | |||||||
Adjusted EBITDA(1) | $ | 344 | $ | 330 | $ | (2 | ) | $ | 672 | |||||||
% of Total Revenue | 58.9 | % | 35.9 | % | 5.2 | % | 100.0 | % | ||||||||
EBITDA Margin(1) | 9.7 | % | 15.3 | % | (1.0 | )% | 11.1 | % | ||||||||
Adjusted EBITDA Margin(1) | 9.7 | % | 15.3 | % | (0.6 | )% | 11.2 | % | ||||||||
Year Ended December 31, 2016 | ||||||||||||||||
Total Revenue | $ | 3,805 | $ | 2,308 | $ | 295 | $ | 6,408 | ||||||||
Adjusted Revenue(1) | $ | 3,805 | $ | 2,308 | $ | 378 | $ | 6,491 | ||||||||
Profit (Loss) | $ | 151 | $ | 293 | $ | (248 | ) | $ | 196 | |||||||
EBITDA(1) | $ | 313 | $ | 395 | $ | (182 | ) | $ | 526 | |||||||
Adjusted EBITDA(1) | $ | 313 | $ | 395 | $ | (73 | ) | $ | 635 | |||||||
% of Total Revenue | 59.4 | % | 36.0 | % | 4.6 | % | 100.0 | % | ||||||||
EBITDA Margin(1) | 8.2 | % | 17.1 | % | (61.7 | )% | 8.2 | % | ||||||||
Adjusted EBITDA Margin(1) | 8.2 | % | 17.1 | % | (19.3 | )% | 9.8 | % | ||||||||
Year Ended December 31, 2015 | ||||||||||||||||
Total Revenue | $ | 4,059 | $ | 2,331 | $ | 272 | $ | 6,662 | ||||||||
Adjusted Revenue(1) | $ | 4,059 | $ | 2,331 | $ | 388 | $ | 6,778 | ||||||||
Profit (Loss) | $ | 148 | $ | 298 | $ | (509 | ) | $ | (63 | ) | ||||||
EBITDA(1) | $ | 308 | $ | 416 | $ | (440 | ) | $ | 284 | |||||||
Adjusted EBITDA(1) | $ | 308 | $ | 416 | $ | (85 | ) | $ | 639 | |||||||
% of Total Revenue | 60.9 | % | 35.0 | % | 4.1 | % | 100.0 | % | ||||||||
EBITDA Margin(1) | 7.6 | % | 17.8 | % | (161.8 | )% | 4.3 | % | ||||||||
Adjusted EBITDA Margin(1) | 7.6 | % | 17.8 | % | (21.9 | )% | 9.4 | % |
(1) | Refer to the reconciliations table in the "Non-GAAP Financial Measures" section. |
Year Ended December 31, | 2017 vs. 2016 | 2016 vs. 2015 | ||||||||||||||||||||||||
(in millions) | 2017 | 2016 | 2015 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||
New business TCV | $ | 2,260 | $ | 2,527 | $ | 4,345 | $ | (267 | ) | (11 | )% | $ | (1,818 | ) | (42 | )% | ||||||||||
Renewals TCV | 2,692 | 4,325 | 3,637 | (1,633 | ) | (38 | )% | 688 | 19 | % | ||||||||||||||||
Total Signings | $ | 4,952 | $ | 6,852 | $ | 7,982 | $ | (1,900 | ) | (28 | )% | $ | (1,130 | ) | (14 | )% | ||||||||||
Annual recurring revenue signings | $ | 533 | $ | 589 | $ | 883 | $ | (56 | ) | (10 | )% | $ | (294 | ) | (33 | )% | ||||||||||
Non-recurring revenue signings | $ | 383 | $ | 438 | $ | 451 | $ | (55 | ) | (13 | )% | $ | (13 | ) | (3 | )% |
Year Ended December 31, | Change | ||||||||||||||||||
(in millions) | 2017 | 2016 | 2015 | 2017 | 2016 | ||||||||||||||
Net cash provided by operating activities | $ | 302 | $ | 108 | $ | 493 | $ | 194 | $ | (385 | ) | ||||||||
Net cash provided by investing activities | 74 | 16 | 522 | 58 | (506 | ) | |||||||||||||
Net cash provided by (used in) financing activities | (109 | ) | 132 | (1,023 | ) | (241 | ) | 1,155 |
(in millions) | 2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | ||||||||||||||||||
Total debt, including capital lease obligations(1) | $ | 82 | $ | 72 | $ | 85 | $ | 560 | $ | 9 | $ | 1,309 | ||||||||||||
Interest on debt(2) | 115 | 113 | 110 | 107 | 91 | 156 | ||||||||||||||||||
Minimum operating lease commitments(3) | 163 | 119 | 80 | 53 | 31 | 52 | ||||||||||||||||||
Defined benefit pension plans | 8 | — | — | — | — | — | ||||||||||||||||||
Estimated Purchase Commitments(4) | 116 | 100 | 68 | 38 | 21 | — | ||||||||||||||||||
Total | $ | 484 | $ | 404 | $ | 343 | $ | 758 | $ | 152 | $ | 1,517 |
(1) | Total debt represents principal debt and capital leases. Refer to Note 8 – Debt in the Consolidated Financial Statements for additional information regarding debt. |
(2) | Represents interest on debt. Refer to Note 8 – Debt in the Consolidated Financial Statements for additional information. |
(3) | Refer to Note 5 – Land, Buildings, Equipment and Software, Net in the Consolidated Financial Statements for additional information. |
(4) | Other purchase commitments: We enter into other purchase commitments with vendors in the ordinary course of business. Our policy with respect to all purchase commitments is to record losses, if any, when they are probable and reasonably estimable. We currently do not have, nor do we anticipate, material loss contracts. |
• | Goodwill Impairment. Represents Goodwill Impairment charge of $935 million. |
• | Amortization of intangible assets. The amortization of intangible assets is driven by acquisition activity, which can vary in size, nature and timing as compared to other companies within our industry and from period to period. |
• | NY MMIS. Revenue and costs associated with the Company not fully completing the State of New York Health Enterprise Platform project. |
• | Restructuring and related costs. Restructuring and related costs include restructuring and asset impairment charges as well as costs associated with our strategic transformation program. |
• | HE charge. Revenue and costs associated with not fully completing the Health Enterprise Medical Platform projects in California and Montana. |
• | Separation costs. Separation costs are expenses incurred in connection with separation from Xerox Corporation into a separate, independent, publicly traded company. These costs primarily relate to third-party investment banking, accounting, legal, consulting and other similar types of services related to the separation transaction as well as costs associated with the operational separation of the two companies. |
• | Interest expense. Interest expense includes interest on long-term debt and amortization of debt issuance costs. |
• | Related party interest. Related party interest relates interest on related party Notes payable from Xerox prior to the Separation. |
• | Other (income) expenses, net. Other (income) expenses, net includes currency (gains) losses, net, litigation matters and all other (income) expenses, net. |
• | (Gain) loss on sale of asset and businesses. |
• | Goodwill Impairment. |
• | Amortization of intangible assets. |
• | NY MMIS. |
• | Restructuring and related costs. |
• | HE charge. |
• | Separation costs. |
• | (Gain) loss on sale of asset and businesses. |
• | Other (income) expenses, net. |
• | Goodwill Impairment. |
• | Restructuring and related costs. |
• | Separation costs. |
• | Other (income) expenses, net. |
• | NY MMIS. |
• | NY MMIS depreciation |
• | HE charge. |
• | HE charge depreciation. |
• | (Gain) loss on sale of asset and businesses. |
• | Business transformation costs (Segment only). |
• | NY MMIS. |
• | HE charge. |
Year Ended December 31, 2017 | Year Ended December 31, 2016 | Year Ended December 31, 2015 | ||||||||||||||||||||||
(in millions; except per share amounts) | Net Income (Loss) | EPS | Net Income (Loss) | EPS | Net Income (Loss) | EPS | ||||||||||||||||||
GAAP as Reported from Continuing Operations | $ | 177 | $ | 0.81 | $ | (983 | ) | $ | (4.85 | ) | $ | (336 | ) | $ | (1.65 | ) | ||||||||
Adjustments: | ||||||||||||||||||||||||
Goodwill impairment | — | 935 | — | |||||||||||||||||||||
Amortization of intangible assets | 243 | 280 | 250 | |||||||||||||||||||||
NY MMIS | 9 | 161 | — | |||||||||||||||||||||
Restructuring and related costs | 101 | 101 | 159 | |||||||||||||||||||||
HE charge | (8 | ) | — | 389 | ||||||||||||||||||||
Separation costs | 12 | 44 | — | |||||||||||||||||||||
(Gain) loss on sale of asset and businesses | (42 | ) | 2 | — | ||||||||||||||||||||
Other (income) expenses, net | (18 | ) | 18 | 30 | ||||||||||||||||||||
Less: Income tax adjustments(1) | (288 | ) | (335 | ) | (318 | ) | ||||||||||||||||||
Adjusted Net Income (Loss) and EPS | $ | 186 | $ | 0.85 | $ | 223 | $ | 1.06 | $ | 174 | $ | 0.83 | ||||||||||||
(GAAP Shares in thousand) | ||||||||||||||||||||||||
Weighted average common shares outstanding | 204,007 | 202,875 | 202,875 | |||||||||||||||||||||
Stock options | 195 | — | — | |||||||||||||||||||||
Restricted stock and performance shares | 2,491 | — | — | |||||||||||||||||||||
Adjusted Weighted Average Shares Outstanding(2) | 206,693 | 202,875 | 202,875 | |||||||||||||||||||||
(Non-GAAP Shares in thousand) | ||||||||||||||||||||||||
Weighted average common shares outstanding | 204,007 | 202,875 | 202,875 | |||||||||||||||||||||
Stock options | 195 | 374 | 374 | |||||||||||||||||||||
Restricted stock and performance shares | 2,491 | 2,132 | 2,132 | |||||||||||||||||||||
8% Convertible preferred stock | — | 5,393 | 5,393 | |||||||||||||||||||||
Adjusted Weighted Average Shares Outstanding(2) | 206,693 | 210,774 | 210,774 |
(1) | Reflects the income tax (expense) benefit of the adjustments. Refer to Effective Tax Rate reconciliation below for details. |
(2) | Average shares for the 2017 calculation of adjusted EPS excludes 5 million shares associated with our Series A convertible preferred stock and includes the impact of the preferred stock dividend of $10 million for the year ended December 31, 2017. Average shares for the 2016 and 2015 calculation of adjusted EPS includes 5 million shares associated with our Series A convertible preferred stock and excludes the impact of the preferred stock quarterly dividend. Shares associated with our stock compensation plan are included in the calculation of adjusted EPS for all years presented. |
Year Ended December 31, 2017 | Year Ended December 31, 2016 | Year Ended December 31, 2015 | |||||||||||||||||||||||||||||||
(in millions) | Pre-Tax Income (loss) | Income Tax (Benefit)Expense | Effective Tax Rate | Pre-Tax Income (loss) | Income Tax (Benefit)Expense | Effective Tax Rate | Pre-Tax Income (loss) | Income Tax (Benefit)Expense | Effective Tax Rate | ||||||||||||||||||||||||
GAAP as Reported from Continuing Operations | $ | (16 | ) | $ | (193 | ) | 1,206.3 | % | $ | (1,227 | ) | $ | (244 | ) | 19.9 | % | $ | (574 | ) | $ | (238 | ) | 41.5 | % | |||||||||
Non-GAAP adjustments | |||||||||||||||||||||||||||||||||
Benefit from tax law changes | — | 198 | — | — | — | — | |||||||||||||||||||||||||||
Termination of COLI plan | — | (19 | ) | — | — | — | — | ||||||||||||||||||||||||||
Other non-GAAP adjustments | 297 | 109 | 1,541 | 335 | 828 | 318 | |||||||||||||||||||||||||||
Total non-GAAP adjustments(1) | 297 | 288 | 1,541 | 335 | 828 | 318 | |||||||||||||||||||||||||||
Adjusted(2) | $ | 281 | $ | 95 | 33.8 | % | $ | 314 | $ | 91 | 29.0 | % | $ | 254 | $ | 80 | 31.5 | % |
(1) | Refer to Net Income (Loss) reconciliation for details of non-GAAP adjustments. |
(2) | The tax impact of Adjusted Pre-tax income (Loss) from continuing operations is calculated under the same accounting principles applied to the 'As Reported' pre-tax income (loss), which employs an annual effective tax rate method to the results. |
Year Ended December 31, 2017 | Year Ended December 31, 2016 | Year Ended December 31, 2015 | |||||||||||||||||||||||||||||||
(in millions) | Pre-Tax Income (Loss) | Revenue | Margin | Pre-Tax Income (Loss) | Revenue | Margin | Pre-Tax Income (Loss) | Revenue | Margin | ||||||||||||||||||||||||
GAAP as Reported from Continuing Operations | $ | (16 | ) | $ | 6,022 | (0.3 | )% | $ | (1,227 | ) | $ | 6,408 | (19.1 | )% | $ | (574 | ) | $ | 6,662 | (8.6 | )% | ||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||
Goodwill impairment | — | 935 | — | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 243 | 280 | 250 | ||||||||||||||||||||||||||||||
NY MMIS | 9 | — | 161 | 83 | — | — | |||||||||||||||||||||||||||
Restructuring and related costs | 101 | 101 | 159 | ||||||||||||||||||||||||||||||
HE charge | (8 | ) | — | — | — | 389 | 116 | ||||||||||||||||||||||||||
Separation costs | 12 | 44 | — | ||||||||||||||||||||||||||||||
Interest expense | 137 | 14 | 8 | ||||||||||||||||||||||||||||||
Related party interest | — | 26 | 61 | ||||||||||||||||||||||||||||||
(Gain) loss on sale of asset and businesses | (42 | ) | 2 | — | |||||||||||||||||||||||||||||
Other (income) expenses, net | (18 | ) | 18 | 30 | |||||||||||||||||||||||||||||
Adjusted Revenue / Operating Income / Margin | $ | 418 | $ | 6,022 | 6.9 | % | $ | 354 | $ | 6,491 | 5.5 | % | $ | 323 | $ | 6,778 | 4.8 | % |
Three Months Ended March 31, 2017 | Three Months Ended June 30, 2017 | |||||||||||||||||||||
(in millions) | Pre-Tax Income (Loss) | Revenue | Margin | Pre-Tax Income (Loss) | Revenue | Margin | ||||||||||||||||
GAAP as Reported from Continuing Operations | $ | (22 | ) | $ | 1,553 | (1.4 | )% | $ | (11 | ) | $ | 1,496 | (0.7 | )% | ||||||||
Adjustments: | ||||||||||||||||||||||
Amortization of intangible assets | 61 | 61 | ||||||||||||||||||||
NY MMIS | 8 | 1 | ||||||||||||||||||||
Restructuring and related costs | 18 | 36 | ||||||||||||||||||||
HE charge | (5 | ) | — | |||||||||||||||||||
Separation costs | 5 | 1 | ||||||||||||||||||||
Interest expense | 36 | 34 | ||||||||||||||||||||
(Gain) loss on sale of asset and businesses | — | (25 | ) | |||||||||||||||||||
Other (income) expenses, net | (12 | ) | (9 | ) | ||||||||||||||||||
Adjusted Operating Income / Margin | $ | 89 | $ | 1,553 | 5.7 | % | $ | 88 | $ | 1,496 | 5.9 | % |
Three Months Ended September 30, 2017 | Three Months Ended December 31, 2017 | |||||||||||||||||||||
(in millions) | Pre-Tax Income (Loss) | Revenue | Margin | Pre-Tax Income (Loss) | Revenue | Margin | ||||||||||||||||
GAAP as Reported from Continuing Operations | $ | 13 | $ | 1,480 | 0.9 | % | $ | 4 | $ | 1,493 | 0.3 | % | ||||||||||
Adjustments: | ||||||||||||||||||||||
Amortization of intangible assets | 60 | 61 | ||||||||||||||||||||
NY MMIS | 1 | (1 | ) | |||||||||||||||||||
Restructuring and related costs | 22 | 25 | ||||||||||||||||||||
HE charge | (3 | ) | — | |||||||||||||||||||
Separation costs | 2 | 4 | ||||||||||||||||||||
Interest expense | 35 | 32 | ||||||||||||||||||||
(Gain) loss on sale of asset and businesses | (16 | ) | (1 | ) | ||||||||||||||||||
Other (income) expenses, net | (3 | ) | 6 | |||||||||||||||||||
Adjusted Operating Income / Margin | $ | 111 | $ | 1,480 | 7.5 | % | $ | 130 | $ | 1,493 | 8.7 | % |
(in millions) | Years Ended December 31 | |||||||||||
Commercial Industries | 2017 | 2016 | 2015 | |||||||||
Segment revenue | $ | 3,548 | $ | 3,805 | $ | 4,059 | ||||||
Segment profit | $ | 182 | $ | 151 | $ | 148 | ||||||
Depreciation & amortization | 162 | 162 | 160 | |||||||||
Adjusted Segment EBITDA | $ | 344 | $ | 313 | $ | 308 | ||||||
Adjusted EBITDA Margin | 9.7 | % | 8.2 | % | 7.6 | % | ||||||
Public Sector | ||||||||||||
Segment revenue | $ | 2,163 | $ | 2,308 | $ | 2,331 | ||||||
Segment profit | $ | 245 | $ | 293 | $ | 298 | ||||||
Depreciation & amortization | 85 | 102 | 118 | |||||||||
Adjusted Segment EBITDA | $ | 330 | $ | 395 | $ | 416 | ||||||
Adjusted EBITDA Margin | 15.3 | % | 17.1 | % | 17.8 | % | ||||||
Other Segment | ||||||||||||
Segment revenue | $ | 311 | $ | 295 | $ | 272 | ||||||
NY MMIS charge | — | 83 | — | |||||||||
HE charge | — | — | 116 | |||||||||
Adjusted Segment Revenue | $ | 311 | $ | 378 | $ | 388 | ||||||
Segment (loss) | $ | (10 | ) | $ | (248 | ) | $ | (509 | ) | |||
Business transformation costs | — | (3 | ) | (3 | ) | |||||||
Depreciation & amortization | 7 | 69 | 72 | |||||||||
Segment EBITDA | (3 | ) | (182 | ) | (440 | ) | ||||||
Segment EBITDA Margin | (1.0 | )% | (61.7 | )% | (161.8 | )% | ||||||
NY MMIS charge | 9 | 161 | — | |||||||||
HE charge | (8 | ) | — | 389 | ||||||||
NY MMIS depreciation | — | (52 | ) | — | ||||||||
HE depreciation | — | — | (34 | ) | ||||||||
Adjusted Segment EBITDA | $ | (2 | ) | $ | (73 | ) | $ | (85 | ) | |||
Adjusted EBITDA Margin | (0.6 | )% | (19.3 | )% | (21.9 | )% |
(in millions) | Years Ended December 31 | |||||||||||
2017 | 2016 | 2015 | ||||||||||
Consolidated | ||||||||||||
Reconciliation to Adjusted Revenue | ||||||||||||
Revenue | $ | 6,022 | $ | 6,408 | $ | 6,662 | ||||||
NY MMIS adjustment | — | 83 | — | |||||||||
HE charge | — | — | 116 | |||||||||
Adjusted Revenue | $ | 6,022 | $ | 6,491 | $ | 6,778 | ||||||
Reconciliation to Adjusted EBITDA | ||||||||||||
Net Income (Loss) from Continuing Operations | $ | 177 | $ | (983 | ) | $ | (336 | ) | ||||
Goodwill impairment | — | 935 | — | |||||||||
Restructuring and related costs | 101 | 101 | 159 | |||||||||
Separation costs | 12 | 44 | — | |||||||||
Interest Expense | 137 | 14 | 8 | |||||||||
Related Party Interest | — | 26 | 61 | |||||||||
Income tax benefits | (193 | ) | (244 | ) | (238 | ) | ||||||
(Gain) Loss on sale of assets and business | (42 | ) | 2 | — | ||||||||
Other (income) expenses, net | (18 | ) | 18 | 30 | ||||||||
Depreciation | 125 | 128 | 126 | |||||||||
Amortization | 372 | 485 | 474 | |||||||||
EBITDA | $ | 671 | $ | 526 | $ | 284 | ||||||
EBITDA Margin | 11.1 | % | 8.2 | % | 4.3 | % | ||||||
EBITDA | $ | 671 | $ | 526 | $ | 284 | ||||||
Adjustments: | ||||||||||||
NY MMIS | 9 | 161 | — | |||||||||
NY MMIS depreciation | — | (52 | ) | — | ||||||||
HE charge | (8 | ) | — | 389 | ||||||||
HE charge depreciation | — | — | (34 | ) | ||||||||
Adjusted EBITDA | $ | 672 | $ | 635 | $ | 639 | ||||||
Adjusted EBITDA Margin | 11.2 | % | 9.8 | % | 9.4 | % |
Year Ended December 31, 2017 | Year Ended December 31, 2016 | Year Ended December 31, 2015 | ||||||||||||||||
(in millions) | Gross Margin | SG&A as % of Revenue | Gross Margin | SG&A as % of Revenue | Gross Margin | SG&A as % of Revenue | ||||||||||||
GAAP As Reported | 17.4 | % | 10.2 | % | 14.2 | % | 10.7 | % | 10.3 | % | 10.5 | % | ||||||
Adjustments: | ||||||||||||||||||
NY MMIS charge | 0.1 | — | 2.3 | (0.1 | ) | — | — | |||||||||||
HE charge | (0.1 | ) | — | — | 5.5 | (0.2 | ) | |||||||||||
Adjusted | 17.4 | % | 10.2 | % | 16.5 | % | 10.6 | % | 15.8 | % | 10.3 | % |
/s/ PricewaterhouseCoopers LLP |
Florham Park, New Jersey |
March 1, 2018 |
/s/ ASHOK VEMURI | /s/ BRIAN WEBB-WALSH | /s/ ALLAN COHEN | ||
Chief Executive Officer | Chief Financial Officer | Chief Accounting Officer |
Year Ended December 31, | ||||||||||||
(in millions, except per-share data) | 2017 | 2016 | 2015 | |||||||||
Revenue | ||||||||||||
Revenue | $ | 5,980 | $ | 6,358 | $ | 6,609 | ||||||
Former parent company revenue | 42 | 50 | 53 | |||||||||
Total Revenues | 6,022 | 6,408 | 6,662 | |||||||||
Cost of Services | ||||||||||||
Cost of services | 4,945 | 5,462 | 5,937 | |||||||||
Former parent company cost of services | 32 | 36 | 40 | |||||||||
Gross Margin | 1,045 | 910 | 685 | |||||||||
Operating Costs and Expenses | ||||||||||||
Research and development | 13 | 31 | 52 | |||||||||
Selling, general and administrative | 615 | 686 | 699 | |||||||||
Restructuring and related costs | 101 | 101 | 159 | |||||||||
Amortization of intangible assets | 243 | 280 | 250 | |||||||||
Goodwill impairment | — | 935 | — | |||||||||
Separation costs | 12 | 44 | — | |||||||||
Interest expense | 137 | 14 | 8 | |||||||||
Related party interest | — | 26 | 61 | |||||||||
(Gain) loss on sale of asset and businesses | (42 | ) | 2 | — | ||||||||
Other (income) expenses, net | (18 | ) | 18 | 30 | ||||||||
Total Operating Costs and Expenses | 1,061 | 2,137 | 1,259 | |||||||||
Loss Before Income Taxes | (16 | ) | (1,227 | ) | (574 | ) | ||||||
Income tax benefit | (193 | ) | (244 | ) | (238 | ) | ||||||
Income (Loss) From Continuing Operations | 177 | (983 | ) | (336 | ) | |||||||
Income (loss) from discontinued operations, net of tax | 4 | — | (78 | ) | ||||||||
Net Income (Loss) | $ | 181 | $ | (983 | ) | $ | (414 | ) | ||||
Basic Earnings (Loss) per Share: | ||||||||||||
Continuing operations | $ | 0.82 | $ | (4.85 | ) | $ | (1.65 | ) | ||||
Discontinued operations | 0.02 | — | (0.39 | ) | ||||||||
Total Basic Earnings (Loss) per Share | $ | 0.84 | $ | (4.85 | ) | $ | (2.04 | ) | ||||
Diluted Earnings (Loss) per Share: | ||||||||||||
Continuing operations | $ | 0.81 | $ | (4.85 | ) | $ | (1.65 | ) | ||||
Discontinued operations | 0.02 | — | (0.39 | ) | ||||||||
Total Diluted Earnings (Loss) per Share | $ | 0.83 | $ | (4.85 | ) | $ | (2.04 | ) |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Net Income (Loss) | $ | 181 | $ | (983 | ) | $ | (414 | ) | ||||
Other Comprehensive Income (Loss), Net(1) | ||||||||||||
Translation adjustments, net | 35 | (135 | ) | (60 | ) | |||||||
Unrecognized gains, net | 2 | — | 1 | |||||||||
Changes in benefit plans, net | (5 | ) | (20 | ) | 7 | |||||||
Other Comprehensive Income (Loss), Net | 32 | (155 | ) | (52 | ) | |||||||
Comprehensive Income (Loss), Net | $ | 213 | $ | (1,138 | ) | $ | (466 | ) |
(1) | Refer to Note 16 – Other Comprehensive Income (Loss) for gross components of Other Comprehensive Income (Loss), reclassification adjustments out of Accumulated other comprehensive loss and related tax effects. |
December 31, | ||||||||
(in millions, except share data in thousands) | 2017 | 2016 | ||||||
Assets | ||||||||
Cash and cash equivalents | $ | 658 | $ | 390 | ||||
Accounts receivable, net | 1,104 | 1,286 | ||||||
Net receivable from former parent company | 11 | — | ||||||
Assets held for sale | 757 | — | ||||||
Other current assets | 180 | 241 | ||||||
Total current assets | 2,710 | 1,917 | ||||||
Land, buildings and equipment, net | 257 | 283 | ||||||
Intangible assets, net | 891 | 1,144 | ||||||
Goodwill | 3,366 | 3,889 | ||||||
Long-term receivable from former parent company | 11 | — | ||||||
Other long-term assets | 313 | 476 | ||||||
Total Assets | $ | 7,548 | $ | 7,709 | ||||
Liabilities and Equity | ||||||||
Short-term debt and current portion of long-term debt | $ | 82 | $ | 28 | ||||
Accounts payable | 138 | 164 | ||||||
Accrued compensation and benefits costs | 335 | 269 | ||||||
Unearned income | 151 | 206 | ||||||
Net payable to former parent company | — | 124 | ||||||
Liabilities held for sale | 169 | — | ||||||
Other current liabilities | 493 | 611 | ||||||
Total current liabilities | 1,368 | 1,402 | ||||||
Long-term debt | 1,979 | 1,913 | ||||||
Pension and other benefit liabilities | 4 | 172 | ||||||
Deferred taxes | 384 | 619 | ||||||
Other long-term liabilities | 142 | 173 | ||||||
Total Liabilities | 3,877 | 4,279 | ||||||
Contingencies (See Note 13) | ||||||||
Series A convertible preferred stock | 142 | 142 | ||||||
Common stock | 2 | 2 | ||||||
Additional paid-in capital | 3,850 | 3,812 | ||||||
Retained earnings | 171 | — | ||||||
Accumulated other comprehensive loss | (494 | ) | (526 | ) | ||||
Total Equity | 3,529 | 3,288 | ||||||
Total Liabilities and Equity | $ | 7,548 | $ | 7,709 | ||||
Shares of common stock issued and outstanding | 210,440 | 202,875 | ||||||
Shares of series A convertible preferred stock issued and outstanding | 120 | 120 |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net income (loss) | $ | 181 | $ | (983 | ) | $ | (414 | ) | ||||
Adjustments required to reconcile net income to cash flows from operating activities: | ||||||||||||
Depreciation and amortization | 497 | 613 | 600 | |||||||||
Goodwill impairment | — | 935 | — | |||||||||
Deferred tax benefit | (230 | ) | (160 | ) | (115 | ) | ||||||
(Gain) loss from investments | (10 | ) | (7 | ) | — | |||||||
Amortization of debt financing costs | 9 | — | — | |||||||||
Net (gain) loss on sales of businesses and assets | (49 | ) | 2 | 100 | ||||||||
Stock-based compensation | 40 | 23 | 19 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase) decrease in accounts receivable | 31 | (23 | ) | 243 | ||||||||
(Increase) decrease in other current and long-term assets | (30 | ) | (83 | ) | (86 | ) | ||||||
Increase (decrease) in accounts payable and accrued compensation | (49 | ) | (60 | ) | 22 | |||||||
Increase (decrease) in restructuring liabilities | 34 | 27 | 140 | |||||||||
Increase (decrease) in other current and long-term liabilities | (125 | ) | (210 | ) | 228 | |||||||
Net change in income tax assets and liabilities | 11 | 39 | (236 | ) | ||||||||
Other operating, net | (8 | ) | (5 | ) | (8 | ) | ||||||
Net cash provided by operating activities | 302 | 108 | 493 | |||||||||
Cash Flows from Investing Activities: | ||||||||||||
Cost of additions to land, buildings and equipment | (96 | ) | (149 | ) | (159 | ) | ||||||
Proceeds from sales of land, buildings and equipment | 33 | — | 1 | |||||||||
Cost of additions to internal use software | (36 | ) | (39 | ) | (27 | ) | ||||||
Proceeds (payments) from sale (purchase) of businesses | 56 | (54 | ) | 742 | ||||||||
Proceeds from investments | 117 | 11 | — | |||||||||
Net proceeds (payments) on former parent company notes receivable | — | 248 | (37 | ) | ||||||||
Other investing, net | — | (1 | ) | 2 | ||||||||
Net cash provided by investing activities | 74 | 16 | 522 | |||||||||
Cash Flows from Financing Activities: | ||||||||||||
Proceeds on long term debt | 306 | 1,969 | 28 | |||||||||
Debt issuance fee payments | (8 | ) | (67 | ) | — | |||||||
Payments on debt | (241 | ) | (32 | ) | (293 | ) | ||||||
Net payments to former parent company | (161 | ) | (1,720 | ) | (763 | ) | ||||||
Issuance of common stock related to employee stock plans | (5 | ) | — | — | ||||||||
Dividends paid on preferred stock | (10 | ) | — | — | ||||||||
Restricted cash - former parent company | 15 | (18 | ) | — | ||||||||
Other financing | (5 | ) | — | 5 | ||||||||
Net cash (used in) provided by financing activities | (109 | ) | 132 | (1,023 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | 1 | (6 | ) | (11 | ) | |||||||
Increase (decrease) in cash and cash equivalents | 268 | 250 | (19 | ) | ||||||||
Cash and cash equivalents at beginning of Year | 390 | 140 | 159 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 658 | $ | 390 | $ | 140 |
(in millions) | Common Stock | Additional Paid-in Capital | Retained Earnings | AOCL(1) | Former Parent Company Investment | Conduent Shareholders’ Equity | |||||||||||||||||
Balance at December 31, 2014 | $ | — | $ | — | $ | — | $ | (129 | ) | $ | 5,540 | $ | 5,411 | ||||||||||
Comprehensive loss, net | — | — | — | (52 | ) | (414 | ) | (466 | ) | ||||||||||||||
Net transfers to former parent | — | — | — | — | 217 | 217 | |||||||||||||||||
Balance at December 31, 2015 | $ | — | $ | — | $ | — | $ | (181 | ) | $ | 5,343 | $ | 5,162 | ||||||||||
Comprehensive loss, net | — | — | — | (155 | ) | (983 | ) | (1,138 | ) | ||||||||||||||
Series A Preferred stock transfer | — | — | — | — | (142 | ) | (142 | ) | |||||||||||||||
Capitalization of Company | 2 | 3,812 | — | — | (3,814 | ) | — | ||||||||||||||||
Net transfers from former parent | — | — | — | (190 | ) | (404 | ) | (594 | ) | ||||||||||||||
Balance at December 31, 2016 | $ | 2 | $ | 3,812 | $ | — | $ | (526 | ) | $ | — | $ | 3,288 | ||||||||||
Comprehensive income, net | — | — | 181 | 32 | — | 213 | |||||||||||||||||
Cash dividends declared-preferred(2) | — | — | (10 | ) | — | — | (10 | ) | |||||||||||||||
Stock option and incentive plans, net | — | 38 | — | — | — | 38 | |||||||||||||||||
Balance at December 31, 2017 | $ | 2 | $ | 3,850 | $ | 171 | $ | (494 | ) | $ | — | $ | 3,529 |
(1) | AOCL - Accumulated other comprehensive loss. |
(2) | Cash dividend on preferred stock of $20.00 per share for each quarter of 2017. |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Set-up/transition and inducement expenditures | $ | 55 | $ | 63 | $ | 65 |
Year Ended December 31, | ||||||
(in millions) | 2017 | 2016 | ||||
Capitalized customer contract costs (1) | 126 | 137 |
2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | |||||||||||||||||
$ | 54 | $ | 22 | $ | 13 | $ | 9 | $ | 6 | $ | 22 |
• | The delivered item(s) has value to the customer on a stand-alone basis; and |
• | If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. |
• | Commercial Industries: Our Commercial Industries segment provides business process services and customized solutions to clients in a variety of industries (other than healthcare). Across the Commercial Industries segment, we deliver end-to-end business-to-business and business-to-customer services that enable our clients to optimize their key processes. Our multi-industry competencies include customer care, human resource management and finance and accounting services. These services are complemented by innovative industry-specific services such as personalized product information for the automotive industry; digitized source-to-pay solutions for clients in the manufacturing industry; customer experience and marketing services for clients in the retail industry; mortgage and consumer loan processing for clients in the financial services industry; and customized workforce learning solutions for clients in the aerospace industry. |
• | Public Sector: Our Public Sector segment provides government-centric business process services to U.S. federal, state and local and foreign governments for transportation, public assistance, program administration, transaction processing and payment services. |
Year Ended December 31, | ||||||||||||||||
(in millions) | Commercial Industries | Public Sector | Other | Total | ||||||||||||
2017 | ||||||||||||||||
Revenue | $ | 3,486 | $ | 2,160 | $ | 334 | $ | 5,980 | ||||||||
Former parent company revenue | 42 | — | — | 42 | ||||||||||||
Inter-segment revenue | 20 | 3 | (23 | ) | — | |||||||||||
Total Segment Revenue | $ | 3,548 | $ | 2,163 | $ | 311 | $ | 6,022 | ||||||||
Depreciation and amortization | $ | 162 | $ | 85 | $ | 7 | $ | 254 | ||||||||
Segment profit (loss) | 182 | 245 | (10 | ) | 417 | |||||||||||
2016 | ||||||||||||||||
Revenue | $ | 3,729 | $ | 2,300 | $ | 329 | $ | 6,358 | ||||||||
Former parent company revenue | 50 | 1 | (1 | ) | 50 | |||||||||||
Inter-segment revenue | 26 | 7 | (33 | ) | — | |||||||||||
Total Segment Revenue | $ | 3,805 | $ | 2,308 | $ | 295 | $ | 6,408 | ||||||||
Depreciation and amortization | $ | 162 | $ | 102 | $ | 69 | $ | 333 | ||||||||
Segment profit (loss) | 151 | 293 | (248 | ) | 196 | |||||||||||
2015 | ||||||||||||||||
Revenue | $ | 3,970 | $ | 2,324 | $ | 315 | $ | 6,609 | ||||||||
Former parent company revenue | 54 | — | (1 | ) | 53 | |||||||||||
Inter-segment revenue | 35 | 7 | (42 | ) | — | |||||||||||
Total Segment Revenue | $ | 4,059 | $ | 2,331 | $ | 272 | $ | 6,662 | ||||||||
Depreciation and amortization | $ | 160 | $ | 118 | $ | 72 | $ | 350 | ||||||||
Segment profit (loss) | 148 | 298 | (509 | ) | (63 | ) |
(in millions) | Year Ended December 31, | |||||||||||
Segment Profit (Loss) Reconciliation to Pre-tax Loss | 2017 | 2016 | 2015 | |||||||||
Pre-tax Loss | $ | (16 | ) | $ | (1,227 | ) | $ | (574 | ) | |||
Reconciling items: | ||||||||||||
Goodwill impairment | — | 935 | — | |||||||||
Amortization of intangible assets | 243 | 280 | 250 | |||||||||
Restructuring and related costs | 101 | 101 | 159 | |||||||||
Interest expense | 137 | 14 | 8 | |||||||||
Related party interest | — | 26 | 61 | |||||||||
Separation costs | 12 | 44 | — | |||||||||
(Gain) Loss on sale of asset and businesses | (42 | ) | 2 | — | ||||||||
Business transformation costs | — | 3 | 3 | |||||||||
Other (income) expenses, net | (18 | ) | 18 | 30 | ||||||||
Total Segment Profit (Loss) | $ | 417 | $ | 196 | $ | (63 | ) |
Revenues | Long-Lived Assets (1) | |||||||||||||||||||
(in millions) | 2017 | 2016 | 2015 | 2017 | 2016 | |||||||||||||||
United States | $ | 5,303 | $ | 5,686 | $ | 5,849 | $ | 289 | $ | 325 | ||||||||||
Europe | 538 | 547 | 616 | 42 | 47 | |||||||||||||||
Other areas | 181 | 175 | 197 | 54 | 64 | |||||||||||||||
Total Revenues and Long-Lived Assets | $ | 6,022 | $ | 6,408 | $ | 6,662 | $ | 385 | $ | 436 |
(1) | Long-lived assets are comprised of (i) Land, buildings and equipment, net, (ii) Internal use software, net and (iii) Product software, net. |
(in millions) | Year Ended December 31, 2017 | |||
Accounts Receivable, net | $ | 160 | ||
Other current assets | 41 | |||
Land, building and equipment, net | 6 | |||
Product Software, net | 3 | |||
Intangible assets, net | 7 | |||
Goodwill | 537 | |||
Other long-term assets | 3 | |||
Total Assets held for sale | $ | 757 | ||
Accounts payable | $ | 9 | ||
Accrued compensation | 20 | |||
Unearned revenue | 30 | |||
Other current liabilities | 53 | |||
Pension and other benefit obligations | 50 | |||
Other long-term liabilities | 7 | |||
Total Liabilities held for sale | $ | 169 |
(in millions) | Year Ended December 31, 2015 | |||
Revenues | $ | 619 | ||
Income (loss) from operations | $ | 104 | ||
Loss on disposal | (101 | ) | ||
Net income (loss) before income taxes | $ | 3 | ||
Income tax expense | (81 | ) | ||
Loss from discontinued operations, net of tax | $ | (78 | ) |
(in millions) | Year Ended December 31, 2015 | |||
Expenses: | ||||
Operating lease rent expense | $ | 130 | ||
Defined contribution plans | 4 | |||
Interest expense | 2 | |||
Expenditures: | ||||
Cost of additions to land, buildings and equipment | $ | 41 | ||
Cost of additions to internal use software | 1 | |||
Customer-related deferred set-up/transition and inducement costs | 10 |
December 31, | ||||||||
(in millions) | 2017 | 2016 | ||||||
Amounts billed or billable | $ | 919 | $ | 1,014 | ||||
Unbilled amounts | 187 | 279 | ||||||
Allowance for doubtful accounts | (2 | ) | (7 | ) | ||||
Accounts Receivable, Net | $ | 1,104 | $ | 1,286 |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Accounts receivable sales | $ | — | $ | 250 | $ | 325 | ||||||
Estimated increase (decrease) to operating cash flows(1) | — | (136 | ) | 58 |
(1) | Represents the difference between current and prior year fourth quarter receivable sales adjusted for the effects of: (i) deferred proceeds, (ii) collections prior to the end of the year and (iii) currency. |
Estimated Useful Lives | December 31, | |||||||||
(in millions except as noted) | (Years) | 2017 | 2016 | |||||||
Land | $ | 3 | $ | 10 | ||||||
Building and building equipment | 25 to 50 | 17 | 20 | |||||||
Leasehold improvements | Varies | 247 | 236 | |||||||
Office furniture and equipment | 3 to 15 | 784 | 719 | |||||||
Other | 4 to 20 | 1 | 1 | |||||||
Construction in progress | 24 | 54 | ||||||||
Subtotal | 1,076 | 1,040 | ||||||||
Accumulated depreciation | (819 | ) | (757 | ) | ||||||
Land, Buildings and Equipment, Net | $ | 257 | $ | 283 |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Depreciation expense | $ | 125 | $ | 130 | $ | 126 | ||||||
Operating lease rent expense | $ | 375 | $ | 378 | $ | 389 |
2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | |||||||||||||||||
$ | 163 | $ | 119 | $ | 80 | $ | 53 | $ | 31 | $ | 52 |
(in millions) | Year Ended December 31, | |||||||||||
Additions to: | 2017 | 2016 | 2015 | |||||||||
Internal use software | $ | 36 | $ | 39 | $ | 27 | ||||||
Product software | 10 | 10 | 19 |
(in millions) | December 31, | |||||||
Capitalized Costs, Net | 2017 | 2016 | ||||||
Internal use software | $ | 106 | $ | 115 | ||||
Product software | 22 | 38 |
(in millions) | Commercial Industries | Public Sector | Total | |||||||||
Balance at December 31, 2015 | $ | 2,467 | $ | 2,405 | $ | 4,872 | ||||||
Foreign currency translation | (24 | ) | (20 | ) | (44 | ) | ||||||
Acquisitions | (2 | ) | — | (2 | ) | |||||||
Disposition | (2 | ) | — | (2 | ) | |||||||
Impairment | (935 | ) | — | (935 | ) | |||||||
Balance at December 31, 2016 | $ | 1,504 | $ | 2,385 | $ | 3,889 | ||||||
Foreign currency translation | 19 | 28 | 47 | |||||||||
Dispositions | (19 | ) | (14 | ) | (33 | ) | ||||||
Assets held for sale | (105 | ) | (432 | ) | (537 | ) | ||||||
Balance at December 31, 2017 | $ | 1,399 | $ | 1,967 | $ | 3,366 |
December 31, 2017 | December 31, 2016 | |||||||||||||||||||||||||
(in millions except years) | Weighted Average Amortization | Gross Carrying Amount | Accumulated Amortization | Net Amount | Gross Carrying Amount | Accumulated Amortization | Net Amount | |||||||||||||||||||
Customer relationships | 12 years | $ | 2,907 | $ | 2,022 | $ | 885 | $ | 2,924 | $ | 1,788 | $ | 1,136 | |||||||||||||
Technology, patents and non-compete | 4 years | 11 | 5 | 6 | 11 | 3 | 8 | |||||||||||||||||||
Total Intangible Assets | $ | 2,918 | $ | 2,027 | $ | 891 | $ | 2,935 | $ | 1,791 | $ | 1,144 |
(in millions) | Severance and Related Costs | Lease Cancellation and Other Costs | Asset Impairments | Total | ||||||||||||
Balance at December 31, 2015 | 4 | — | — | 4 | ||||||||||||
Restructuring provision | 67 | 7 | 12 | 86 | ||||||||||||
Reversals of prior accruals | (13 | ) | — | — | (13 | ) | ||||||||||
Total Net Current Period Charges | 54 | 7 | 12 | 73 | ||||||||||||
Charges against reserve and currency | (43 | ) | (2 | ) | (11 | ) | (56 | ) | ||||||||
Balance at December 31, 2016 | 15 | 5 | 1 | 21 | ||||||||||||
Restructuring provision | 49 | 49 | 5 | 103 | ||||||||||||
Reversals of prior accruals | (8 | ) | (3 | ) | — | (11 | ) | |||||||||
Total Net Current Period Charges | 41 | 46 | 5 | 92 | ||||||||||||
Charges against reserve and currency | (42 | ) | (17 | ) | (6 | ) | (65 | ) | ||||||||
Liabilities held for sale | — | (4 | ) | — | (4 | ) | ||||||||||
Balance at December 31, 2017 | $ | 14 | $ | 30 | $ | — | $ | 44 |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Commercial Industries | $ | 60 | $ | 57 | $ | 11 | ||||||
Public Sector | 28 | 12 | 2 | |||||||||
Other(1) | 4 | 4 | 146 | |||||||||
Total Net Restructuring Charges | $ | 92 | $ | 73 | $ | 159 |
(1) | Refer to Note 5 – Land, Buildings, Equipment and Software, Net for additional information regarding the asset impairment in 2016 and 2015. |
December 31, | |||||||||||
(in millions) | Weighted Average Interest Rates at December 31, 2017(1) | 2017 | 2016 | ||||||||
Term loan A due 2021 | 3.11 | % | $ | 732 | $ | 694 | |||||
Term loan B due 2023 | 6.79 | % | 842 | 750 | |||||||
Senior notes due 2024 | 10.91 | % | 510 | 510 | |||||||
Capital lease obligations | 4.39 | % | 33 | 43 | |||||||
Principal Debt Balance | $ | 2,117 | $ | 1,997 | |||||||
Debt issuance costs and unamortized discounts | (56 | ) | (56 | ) | |||||||
Less: current maturities | (82 | ) | (28 | ) | |||||||
Total Long-term Debt | $ | 1,979 | $ | 1,913 |
(1) | Represents weighted average effective interest rate which includes the effect of discounts and premiums on issued debt. |
2018(1) | 2019 | 2020 | 2021 | 2022 | Thereafter | Total | ||||||||||||||||||||
$ | 82 | $ | 72 | $ | 85 | $ | 560 | $ | 9 | $ | 1,309 | $ | 2,117 |
(1) | Quarterly long-term debt maturities for 2018 are $21 million, $21 million, $21 million and $19 million for the first, second, third and fourth quarters, respectively. |
(i) | Senior Secured Term Loan A (Term Loan A) due 2021 with an aggregate principal amount of $700 million; |
(ii) | Senior Secured Term Loan B (Term Loan B) due 2023 with an aggregate principal amount of $850 million; |
(iii) | Senior Revolving Credit Facility (Revolving Credit Facility) due 2021 with an aggregate available amount of $750 million including a sub-limit for up to $300 million available for the issuance of letters of credit. |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Interest expense | $ | 137 | $ | 14 | $ | 8 | ||||||
Interest income | 3 | 3 | 3 |
(in millions) | Gross Notional Value | Fair Value Asset (Liability)(1) | ||||||
Currencies Hedged (Buy/Sell) | ||||||||
Philippine Peso/U.S. Dollar | $ | 62 | $ | — | ||||
Indian Rupee/U.S. Dollar | 68 | 1 | ||||||
Mexican Peso/U.S. Dollar | 9 | — | ||||||
All Other | 21 | — | ||||||
Total Foreign Exchange Hedging | $ | 160 | $ | 1 |
(1) | Represents the net receivable (payable) amount included in the Consolidated Balance Sheet at December 31, 2017. |
As of December 31, | ||||||||
(in millions) | 2017 | 2016 | ||||||
Assets: | ||||||||
Foreign exchange contracts - forwards | $ | 2 | $ | 1 | ||||
Deferred compensation investments in cash surrender life insurance(1) | — | 99 | ||||||
Deferred compensation investments in mutual funds(1) | — | 10 | ||||||
Total | $ | 2 | $ | 110 | ||||
Liabilities: | ||||||||
Foreign exchange contracts - forwards | $ | 1 | $ | 3 | ||||
Deferred compensation plan liabilities(1) | 99 | 113 | ||||||
Total | $ | 100 | $ | 116 |
(1) | In September 2017, the Company terminated the legacy deferred compensation plans (Plans) and the Company Owned Life Insurance (COLI), which held the Plans’ investments. The Company will make payments to Plan participants of approximately $100 million in the fourth quarter 2018. |
December 31, 2017 | December 31, 2016 | ||||||||||||||
(in millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||
Cash and cash equivalents | $ | 658 | $ | 658 | $ | 390 | $ | 390 | |||||||
Restricted cash | 9 | 9 | 22 | 22 | |||||||||||
Accounts receivable, net | 1,104 | 1,104 | 1,286 | 1,286 | |||||||||||
Short-term debt | 82 | 82 | 28 | 28 | |||||||||||
Long-term debt | 1,979 | 2,070 | 1,913 | 1,933 |
Pension Benefits | ||||||||||||||||
U.S. Plans | Non-U.S. Plans | |||||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Change in Benefit Obligation: | ||||||||||||||||
Benefit obligation, January 1 | $ | 89 | $ | 74 | $ | 164 | $ | 157 | ||||||||
Service cost | — | — | 2 | 2 | ||||||||||||
Interest cost | 4 | 3 | 5 | 5 | ||||||||||||
Actuarial loss | 10 | 13 | 5 | 27 | ||||||||||||
Currency exchange rate changes | — | — | 14 | (19 | ) | |||||||||||
Benefits paid/settlements | (1 | ) | (1 | ) | (12 | ) | (8 | ) | ||||||||
Benefit Obligation, December 31 | $ | 102 | $ | 89 | $ | 178 | $ | 164 | ||||||||
Change in Plan Assets: | ||||||||||||||||
Fair value of plan assets, January 1 | $ | 52 | $ | 47 | $ | 140 | $ | 150 | ||||||||
Actual return on plan assets | 8 | 2 | 13 | 15 | ||||||||||||
Employer contribution | 3 | 4 | 5 | 2 | ||||||||||||
Currency exchange rate changes | — | — | 14 | (19 | ) | |||||||||||
Benefits paid/settlements | (1 | ) | (1 | ) | (12 | ) | (8 | ) | ||||||||
Fair Value of Plan Assets, December 31 | $ | 62 | $ | 52 | $ | 160 | $ | 140 | ||||||||
Net Funded Status at December 31(1) | $ | (40 | ) | $ | (37 | ) | $ | (18 | ) | $ | (24 | ) | ||||
Amounts Recognized in the Consolidated Balance Sheets: | ||||||||||||||||
Asset held for sale | $ | — | $ | — | $ | 1 | $ | — | ||||||||
Accrued compensation and benefit costs | — | — | — | (2 | ) | |||||||||||
Liabilities held for sale | (40 | ) | — | (11 | ) | — | ||||||||||
Pension and other benefit liabilities | — | (37 | ) | (8 | ) | (22 | ) | |||||||||
Net Amounts Recognized | $ | (40 | ) | $ | (37 | ) | $ | (18 | ) | $ | (24 | ) |
(1) | Includes under-funded and un-funded plans. |
Pension Benefits | ||||||||||||||||
U.S. Plans | Non-U.S. Plans | |||||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net actuarial loss | $ | 38 | $ | 31 | $ | 42 | $ | 42 |
December 31, 2017 | December 31, 2016 | |||||||||||||||||||||||
(in millions) | Projected benefit obligation | Accumulated benefit obligation | Fair value of plan assets | Projected benefit obligation | Accumulated benefit obligation | Fair value of plan assets | ||||||||||||||||||
Underfunded Plans: | ||||||||||||||||||||||||
U.S. | $ | 102 | $ | 102 | $ | 62 | $ | 89 | $ | 89 | $ | 52 | ||||||||||||
Non U.S. | 60 | 55 | 46 | 162 | 156 | 140 | ||||||||||||||||||
Unfunded Plans: | ||||||||||||||||||||||||
Non U.S. | 5 | 3 | — | 2 | 1 | — | ||||||||||||||||||
Total Underfunded and Unfunded Plans: | ||||||||||||||||||||||||
U.S. | $ | 102 | $ | 102 | $ | 62 | $ | 89 | $ | 89 | $ | 52 | ||||||||||||
Non U.S. | 65 | 58 | 46 | 164 | 157 | 140 | ||||||||||||||||||
Total | $ | 167 | $ | 160 | $ | 108 | $ | 253 | $ | 246 | $ | 192 |
(in millions) | Fair Value of Pension Plan Assets | Pension Benefit Obligations | Net Funded Status | Accumulated Benefit Obligation | ||||||||||||
U.S. | $ | 62 | $ | 102 | $ | (40 | ) | $ | 102 | |||||||
U.K. | 114 | 113 | 1 | 114 | ||||||||||||
Canada | 44 | 55 | (11 | ) | 53 | |||||||||||
Other | 2 | 10 | (8 | ) | 5 | |||||||||||
Total | $ | 222 | $ | 280 | $ | (58 | ) | $ | 274 |
Year Ended December 31, | ||||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | |||||||||||||||||||||||
(in millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||
Components of Net Periodic Benefit Costs: | ||||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | — | $ | 2 | $ | 2 | $ | 3 | ||||||||||||
Interest cost | 4 | 3 | 3 | 5 | 5 | 6 | ||||||||||||||||||
Expected return on plan assets | (5 | ) | (4 | ) | (4 | ) | (8 | ) | (8 | ) | (9 | ) | ||||||||||||
Recognized net actuarial loss | 1 | — | — | 1 | 1 | 2 | ||||||||||||||||||
Net Periodic Benefit Cost | — | (1 | ) | (1 | ) | — | — | 2 | ||||||||||||||||
Other changes in plan assets and benefit obligations recognized in Other Comprehensive Income: | ||||||||||||||||||||||||
Net actuarial loss (gain) | 7 | 13 | 4 | (2 | ) | 18 | (9 | ) | ||||||||||||||||
Amortization of net actuarial loss | (1 | ) | — | — | (1 | ) | (1 | ) | (2 | ) | ||||||||||||||
Total Recognized in Other Comprehensive Income | 6 | 13 | 4 | (3 | ) | 17 | (11 | ) | ||||||||||||||||
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income | $ | 6 | $ | 12 | $ | 3 | $ | (3 | ) | $ | 17 | $ | (9 | ) |
December 31, 2017 | ||||||||||||||||||||||||||||||||||||||
(in millions) | U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||||||||||||||||||
Asset Class | Level 1 | Level 2 | Level 3 | Total | % | Level 1 | Level 2 | Level 3 | Total | % | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1 | $ | — | $ | — | $ | 1 | 2 | % | $ | 3 | $ | — | $ | — | $ | 3 | 2 | % | ||||||||||||||||||
Equity Securities | 12 | 31 | — | 43 | 69 | % | — | 47 | — | 47 | 29 | % | ||||||||||||||||||||||||||
Fixed Income Securities | 18 | — | — | 18 | 29 | % | — | 46 | — | 46 | 29 | % | ||||||||||||||||||||||||||
Other | — | — | — | — | — | % | — | 55 | 9 | 64 | 40 | % | ||||||||||||||||||||||||||
Total Fair Value of Plan Assets | $ | 31 | $ | 31 | $ | — | $ | 62 | 100 | % | $ | 3 | $ | 148 | $ | 9 | $ | 160 | 100 | % |
December 31, 2016 | ||||||||||||||||||||||||||||||||||||||
(in millions) | U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||||||||||||||||||
Asset Class | Level 1 | Level 2 | Level 3 | Total | % | Level 1 | Level 2 | Level 3 | Total | % | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 3 | $ | — | $ | — | $ | 3 | 6 | % | $ | — | $ | — | $ | — | $ | — | — | % | ||||||||||||||||||
Equity Securities | 9 | 24 | — | 33 | 63 | % | — | 61 | — | 61 | 44 | % | ||||||||||||||||||||||||||
Fixed Income Securities | 10 | 6 | — | 16 | 31 | % | — | 60 | — | 60 | 43 | % | ||||||||||||||||||||||||||
Other | — | — | — | — | — | % | — | 11 | 8 | 19 | 13 | % | ||||||||||||||||||||||||||
Total Fair Value of Plan Assets | $ | 22 | $ | 30 | $ | — | $ | 52 | 100 | % | $ | — | $ | 132 | $ | 8 | $ | 140 | 100 | % |
2017 | 2016 | |||||||
U.S. | Non-U.S. | U.S. | Non-U.S. | |||||
Equity investments | 55% | 28% | 55% | 41% | ||||
Fixed income investments | 23% | 43% | 25% | 45% | ||||
Real estate | —% | 4% | —% | 4% | ||||
Other | 22% | 25% | 20% | 10% | ||||
Total Investment Strategy | 100% | 100% | 100% | 100% |
Pension Benefits | ||||||||||||
(in millions) | U.S. | Non-U.S. | Total | |||||||||
2018 | $ | 2 | $ | 4 | $ | 6 | ||||||
2019 | 2 | 5 | 7 | |||||||||
2020 | 2 | 5 | 7 | |||||||||
2021 | 3 | 5 | 8 | |||||||||
2022 | 3 | 5 | 8 | |||||||||
Years 2023-2026 | 19 | 30 | 49 |
Pension Benefits | ||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||
U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | |||||||||||||
Discount rate | 3.8 | % | 2.9 | % | 4.2 | % | 3.2 | % | 4.3 | % | 3.9 | % | ||||||
Rate of compensation increase | n/a | 0.8 | % | n/a | 1.0 | % | n/a | 1.0 | % |
Pension Benefits | ||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||
U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | |||||||||||||||||
Discount rate | 3.8 | % | 3.1 | % | 4.2 | % | 3.1 | % | 4.3 | % | 3.9 | % | 4.0 | % | 3.4 | % | ||||||||
Expected return on plan assets | 7.8 | % | 4.8 | % | 7.8 | % | 4.8 | % | 7.8 | % | 5.7 | % | 7.8 | % | 5.8 | % | ||||||||
Rate of compensation increase | n/a | 0.8 | % | n/a | 0.8 | % | n/a | 1.0 | % | n/a | 1.1 | % |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Domestic loss | $ | (91 | ) | $ | (1,329 | ) | $ | (654 | ) | |||
Foreign income | 75 | 102 | 80 | |||||||||
Loss Before Income Taxes | $ | (16 | ) | $ | (1,227 | ) | $ | (574 | ) |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Federal Income Taxes | ||||||||||||
Current | $ | 4 | $ | (116 | ) | $ | (130 | ) | ||||
Deferred | (233 | ) | (132 | ) | (99 | ) | ||||||
Foreign Income Taxes | ||||||||||||
Current | 25 | 31 | 24 | |||||||||
Deferred | (3 | ) | (3 | ) | 6 | |||||||
State Income Taxes | ||||||||||||
Current | 8 | 1 | (17 | ) | ||||||||
Deferred | 6 | (25 | ) | (22 | ) | |||||||
Total Benefit | $ | (193 | ) | $ | (244 | ) | $ | (238 | ) |
Year Ended December 31, | |||||||||
2017 | 2016 | 2015 | |||||||
U.S. federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
Nondeductible expenses(1) | (155.9 | )% | (19.0 | )% | (1.3 | )% | |||
Effect of tax law changes | 1,282.4 | % | — | % | 0.9 | % | |||
Change in valuation allowance for deferred tax assets | (39.5 | )% | 0.1 | % | (1.0 | )% | |||
State taxes, net of federal benefit | 1.2 | % | 1.8 | % | 4.2 | % | |||
Audit and other tax return adjustments | — | % | 1.4 | % | 0.1 | % | |||
Tax-exempt income, credits and incentives | 38.9 | % | 0.7 | % | 0.7 | % | |||
Foreign rate differential adjusted for U.S. taxation of foreign profits(2) | 47.7 | % | 0.7 | % | 2.4 | % | |||
Other | (3.5 | )% | (0.8 | )% | 0.5 | % | |||
Effective Income Tax Rate | 1,206.3 | % | 19.9 | % | 41.5 | % |
(1) | In 2017, nondeductible expenses primarily related to the nondeductible portion of the goodwill and officers life insurance. |
(2) | The “U.S. taxation of foreign profits” represents the U.S. tax, net of foreign tax credits, associated with actual and deemed repatriations of earnings from our non-U.S. subsidiaries, except for transition tax, which is reported on the line Effect of tax law changes. |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Pre-tax income | $ | (193 | ) | $ | (244 | ) | $ | (238 | ) | |||
Discontinued operations(1) | 3 | — | 81 | |||||||||
Common shareholders' equity: | ||||||||||||
Changes in defined benefit plans | — | 8 | 2 | |||||||||
Stock option and incentive plans, net | — | — | (6 | ) | ||||||||
Total Income Tax Benefit | $ | (190 | ) | $ | (236 | ) | $ | (161 | ) |
(1) | Refer to Note 3 – Assets/Liabilities Held for Sale for additional information regarding discontinued operations. |
(in millions) | 2017 | 2016 | 2015 | |||||||||
Balance at January 1 | $ | 14 | $ | 24 | $ | 32 | ||||||
Additions related to current year | — | 1 | 3 | |||||||||
Additions related to prior years positions | — | — | — | |||||||||
Reductions related to prior years positions | — | (5 | ) | (10 | ) | |||||||
Settlements with taxing authorities(1) | — | (5 | ) | — | ||||||||
Currency | 1 | (1 | ) | (1 | ) | |||||||
Balance at December 31 | $ | 15 | $ | 14 | $ | 24 |
(1) | 2016 settlement results in $5 million cash paid. |
December 31, | ||||||||
(in millions) | 2017 | 2016 | ||||||
Deferred Tax Assets | ||||||||
Net operating losses | $ | 41 | $ | 42 | ||||
Operating reserves, accruals and deferrals | 90 | 155 | ||||||
Deferred compensation | 59 | 101 | ||||||
Pension | 15 | 18 | ||||||
Other | 45 | 44 | ||||||
Subtotal | 250 | 360 | ||||||
Valuation allowance | (35 | ) | (24 | ) | ||||
Total | $ | 215 | $ | 336 | ||||
Deferred Tax Liabilities | ||||||||
Unearned income | $ | 134 | $ | 217 | ||||
Intangibles and goodwill | 413 | 680 | ||||||
Depreciation | 10 | 15 | ||||||
Other | 25 | 29 | ||||||
Total | $ | 582 | $ | 941 | ||||
Total Deferred Taxes, Net | $ | (367 | ) | $ | (605 | ) |
• | Guarantees on behalf of our subsidiaries with respect to real estate leases. These lease guarantees may remain in effect subsequent to the sale of the subsidiary. |
• | Agreements to indemnify various service providers, trustees and bank agents from any third-party claims related to their performance on our behalf, with the exception of claims that result from the third-party's own willful misconduct or gross negligence. |
• | Guarantees of our performance in certain services contracts to our customers and indirectly the performance of third parties with whom we have subcontracted for their services. This includes indemnifications to customers for losses that may be sustained as a result of our performance of services at a customer's location. |
Year Ended December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Stock-based compensation expense, pre-tax | $ | 42 | $ | 23 | $ | 19 | ||||||
Income tax benefit recognized in earnings | 17 | 9 | 7 |
2017 | 2016 | 2015 | |||||||||||||||||||
(shares in thousands) | Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | |||||||||||||||
Restricted Stock Units / Shares | |||||||||||||||||||||
Outstanding at January 1 | 1,961 | $ | 13.99 | 782 | $ | 11.70 | 3,422 | $ | 8.47 | ||||||||||||
Granted | 1,988 | 16.75 | 2,602 | 9.61 | 260 | 11.86 | |||||||||||||||
Vested | (215 | ) | 19.98 | (119 | ) | 9.43 | (2,768 | ) | 7.83 | ||||||||||||
Canceled | (609 | ) | 15.88 | (121 | ) | 10.55 | (132 | ) | 9.52 | ||||||||||||
Impact of spin-off(1) | — | n/a | (1,183 | ) | n/a | — | n/a | ||||||||||||||
Outstanding at December 31 | 3,125 | 16.29 | 1,961 | 13.99 | 782 | 11.70 | |||||||||||||||
Performance Stock Units / Shares | |||||||||||||||||||||
Outstanding at January 1 | 4,926 | $ | 13.99 | 7,522 | $ | 11.57 | 5,771 | $ | 11.68 | ||||||||||||
Granted | 3,933 | 16.76 | 1,850 | 9.35 | 3,583 | 10.68 | |||||||||||||||
Vested | (1,696 | ) | 19.67 | — | — | (610 | ) | 7.88 | |||||||||||||
Canceled | (1,734 | ) | 17.46 | (1,478 | ) | 11.96 | (1,222 | ) | 11.36 | ||||||||||||
Impact of spin-off(1) | — | n/a | (2,968 | ) | n/a | — | n/a | ||||||||||||||
Outstanding at December 31 | 5,429 | 16.55 | 4,926 | 13.99 | 7,522 | 11.57 |
(1) | Stock-based compensation was converted from former parent stock into Conduent common stock at spin-off. |
Awards | Unrecognized Compensation | Remaining Weighted-Average Vesting Period (Years) | ||||
Restricted Stock Units / Shares | $ | 27 | 1.9 | |||
Performance Stock Units / Shares | 30 | 1.6 | ||||
Total | $ | 57 |
Awards | December 31, 2017 | |||
Restricted Stock Units / Shares | $ | 50 | ||
Performance Stock Units / Shares | 88 |
(in millions) | Options | |||||||
Outstanding | Exercisable | |||||||
Aggregate intrinsic value | $ | 6 | $ | 6 | ||||
Weighted-average remaining contractual life (years) | 1.3 | 1.3 |
(in millions) | December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||||||||||||||||||||||||||
Awards | Total Intrinsic Value | Cash Received | Tax Benefit | Total Intrinsic Value | Cash Received | Tax Benefit | Total Intrinsic Value | Cash Received | Tax Benefit | |||||||||||||||||||||||||||
Restricted Stock Units / Shares | $ | 3 | $ | — | $ | 1 | $ | 1 | $ | — | $ | — | $ | 30 | $ | — | $ | 11 | ||||||||||||||||||
Performance Stock Units / Shares | 25 | — | 10 | — | — | — | 7 | — | 2 | |||||||||||||||||||||||||||
Stock Options | 3 | 6 | 1 | 3 | 9 | 1 | 14 | 19 | 5 |
Year Ended December 31, | ||||||||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||||
(in millions) | Pre-tax | Net of Tax | Pre-tax | Net of Tax | Pre-tax | Net of Tax | ||||||||||||||||||
Translation Adjustments Gains (Losses) | $ | 35 | $ | 35 | $ | (135 | ) | $ | (135 | ) | $ | (60 | ) | $ | (60 | ) | ||||||||
Unrealized Gains (Losses): | ||||||||||||||||||||||||
Changes in fair value of cash flow hedges gains (losses) | 1 | 1 | (2 | ) | (1 | ) | (4 | ) | (2 | ) | ||||||||||||||
Changes in cash flow hedges reclassed to earnings(1) | 2 | 1 | 2 | 1 | 5 | 3 | ||||||||||||||||||
Net Unrealized Gains (Losses) | 3 | 2 | — | — | 1 | 1 | ||||||||||||||||||
Defined Benefit Plans Gains (Losses) | ||||||||||||||||||||||||
Net actuarial/prior service gains (losses) | (5 | ) | (4 | ) | (31 | ) | (23 | ) | 5 | 4 | ||||||||||||||
Actuarial loss amortization/settlement(2) | 2 | 2 | 1 | 1 | 2 | 2 | ||||||||||||||||||
Other gains (losses)(3) | (4 | ) | (3 | ) | 3 | 2 | 2 | 1 | ||||||||||||||||
Changes in Defined Benefit Plans Gains (Losses) | (7 | ) | (5 | ) | (27 | ) | (20 | ) | 9 | 7 | ||||||||||||||
Other Comprehensive Income (Loss) | $ | 31 | $ | 32 | $ | (162 | ) | $ | (155 | ) | $ | (50 | ) | $ | (52 | ) |
(1) | Reclassified to Cost of sales - refer to Note 9 – Financial Instruments for additional information regarding our cash flow hedges. |
(2) | Reclassified to Total Net Periodic Benefit Cost - refer to Note 11 – Employee Benefit Plans for additional information. |
(3) | Primarily represents currency impact on cumulative amount of benefit plan net actuarial losses and prior service credits in AOCL. |
December 31, | ||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Cumulative translation adjustments(1) | $ | (437 | ) | $ | (472 | ) | $ | (147 | ) | |||
Other unrealized losses, net | 1 | (1 | ) | (1 | ) | |||||||
Benefit plans net actuarial losses and prior service credits | (58 | ) | (53 | ) | (33 | ) | ||||||
Total Accumulated Other Comprehensive Loss | $ | (494 | ) | $ | (526 | ) | $ | (181 | ) |
(1) | 2016 includes $190 million of AOCL transferred from former parent as part of the spin-off. |
Year Ended December 31, | ||||||||||||
(in millions, shares in thousands) | 2017 | 2016 | 2015 | |||||||||
Basic Earnings (Loss) per Share: | ||||||||||||
Net income (loss) from continuing operations attributable to Conduent | $ | 177 | $ | (983 | ) | $ | (336 | ) | ||||
Accrued dividends on preferred stock | (10 | ) | — | — | ||||||||
Adjusted Net Income (Loss) From Continuing Operations Available to Common Shareholders | 167 | (983 | ) | (336 | ) | |||||||
Net income (loss) from discontinued operations attributable to Conduent | 4 | — | (78 | ) | ||||||||
Adjusted Net Income (Loss) Available to Common Shareholders | $ | 171 | $ | (983 | ) | $ | (414 | ) | ||||
Weighted-average common shares outstanding | 204,007 | 202,875 | 202,875 | |||||||||
Basic Earnings (Loss) per Share: | ||||||||||||
Continuing operations | $ | 0.82 | $ | (4.85 | ) | $ | (1.65 | ) | ||||
Discontinued operations | 0.02 | — | (0.39 | ) | ||||||||
Basic Earnings (Loss) per Share | $ | 0.84 | $ | (4.85 | ) | $ | (2.04 | ) | ||||
Diluted Earnings (Loss) per Share: | ||||||||||||
Net income (loss) from continuing operations attributable to Conduent | $ | 177 | $ | (983 | ) | $ | (336 | ) | ||||
Accrued dividends on preferred stock | (10 | ) | — | — | ||||||||
Adjusted Net Income (Loss) From Continuing Operations Available to Common Shareholders | 167 | (983 | ) | (336 | ) | |||||||
Net income (loss) from discontinued operations attributable to Conduent | 4 | — | (78 | ) | ||||||||
Adjusted Net Income (Loss) Available to Common Shareholders | $ | 171 | $ | (983 | ) | $ | (414 | ) | ||||
Weighted-average common shares outstanding | 204,007 | 202,875 | 202,875 | |||||||||
Common shares issuable with respect to: | ||||||||||||
Stock options | 195 | — | — | |||||||||
Restricted stock and performance units / shares | 2,491 | — | — | |||||||||
Convertible preferred stock | — | — | — | |||||||||
Adjusted Weighted Average Common Shares Outstanding | 206,693 | 202,875 | 202,875 | |||||||||
Diluted Earnings (Loss) per Share: | ||||||||||||
Continuing operations | $ | 0.81 | $ | (4.85 | ) | $ | (1.65 | ) | ||||
Discontinued operations | 0.02 | — | (0.39 | ) | ||||||||
Diluted Earnings (Loss) per Share | $ | 0.83 | $ | (4.85 | ) | $ | (2.04 | ) | ||||
The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands): | ||||||||||||
Stock Options | — | 857 | — | |||||||||
Restricted stock and performance shares | 2,568 | 5,719 | — | |||||||||
Convertible preferred stock | 5,393 | 5,393 | — | |||||||||
Total Securities | 7,961 | 11,969 | — |
Year Ended December 31, | ||||||||
(in millions) | 2016 | 2015 | ||||||
Research and development | $ | 25 | $ | 43 | ||||
Selling, general and administrative | 140 | 127 | ||||||
Total Allocated Corporate Expenses | $ | 165 | $ | 170 |
(in millions) | Year Ended December 31, | |||||||
2016 | 2015 | |||||||
Cash pooling and general financing activities | $ | (466 | ) | $ | (396 | ) | ||
Corporate cost allocations | 165 | 170 | ||||||
Income taxes | (157 | ) | 168 | |||||
Divestitures and acquisitions, net | 54 | (742 | ) | |||||
Capitalization of related party notes payable | — | 1,017 | ||||||
Total net transfers (to) from former parent | (404 | ) | 217 | |||||
Stock-based compensation | (23 | ) | (19 | ) | ||||
Capitalization of related party notes payable | — | (1,017 | ) | |||||
Net payments on notes payable with former parent company | (1,132 | ) | (91 | ) | ||||
Other, net | (161 | ) | 147 | |||||
Total Net payments to former parent company per Consolidated Statements of Cash Flows | $ | (1,720 | ) | $ | (763 | ) |
(in millions, except per-share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | |||||||||||||||
2017 | ||||||||||||||||||||
Revenues | $ | 1,553 | $ | 1,496 | $ | 1,480 | $ | 1,493 | $ | 6,022 | ||||||||||
Costs and Expenses | 1,575 | 1,507 | 1,467 | 1,489 | 6,038 | |||||||||||||||
(Loss) Income before Income Taxes | (22 | ) | (11 | ) | 13 | 4 | (16 | ) | ||||||||||||
Income tax (benefit) expense | (12 | ) | (7 | ) | 30 | (204 | ) | (193 | ) | |||||||||||
(Loss) Income from Continuing Operations | (10 | ) | (4 | ) | (17 | ) | 208 | 177 | ||||||||||||
Income from discontinued operations, net of tax | 4 | — | — | — | 4 | |||||||||||||||
Net (Loss) Income | $ | (6 | ) | $ | (4 | ) | $ | (17 | ) | $ | 208 | $ | 181 | |||||||
Basic Earnings (Loss) per Share(1): | ||||||||||||||||||||
Continuing operations | $ | (0.06 | ) | $ | (0.03 | ) | $ | (0.09 | ) | $ | 1.00 | $ | 0.82 | |||||||
Discontinued operations | 0.02 | — | — | — | 0.02 | |||||||||||||||
Total Basic (Loss) Earnings per Share: | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.09 | ) | $ | 1.00 | $ | 0.84 | |||||||
Diluted Earnings (Loss) per Share(1): | ||||||||||||||||||||
Continuing operations | $ | (0.06 | ) | $ | (0.03 | ) | $ | (0.09 | ) | $ | 0.98 | $ | 0.81 | |||||||
Discontinued operations | 0.02 | — | — | — | 0.02 | |||||||||||||||
Total Diluted (Loss) Earnings per Share | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.09 | ) | $ | 0.98 | $ | 0.83 | |||||||
2016 | ||||||||||||||||||||
Revenues | $ | 1,685 | $ | 1,613 | $ | 1,596 | $ | 1,514 | $ | 6,408 | ||||||||||
Costs and Expenses | 1,739 | 1,647 | 1,594 | 2,655 | 7,635 | |||||||||||||||
(Loss) Income before Income Taxes | (54 | ) | (34 | ) | 2 | (1,141 | ) | (1,227 | ) | |||||||||||
Income tax (benefit) expense | (31 | ) | (24 | ) | 1 | (190 | ) | (244 | ) | |||||||||||
(Loss) Income from Continuing Operations | (23 | ) | (10 | ) | 1 | (951 | ) | (983 | ) | |||||||||||
Income (loss) from discontinued operations, net of tax | — | — | — | — | — | |||||||||||||||
Net (Loss) Income | $ | (23 | ) | $ | (10 | ) | $ | 1 | $ | (951 | ) | $ | (983 | ) | ||||||
Basic Earnings (Loss) per Share(1): | ||||||||||||||||||||
Continuing operations | $ | (0.12 | ) | $ | (0.05 | ) | $ | 0.01 | $ | (4.69 | ) | $ | (4.85 | ) | ||||||
Total Basic (Loss) Earnings per Share: | $ | (0.12 | ) | $ | (0.05 | ) | $ | 0.01 | $ | (4.69 | ) | $ | (4.85 | ) | ||||||
Diluted Earnings (Loss) per Share(1): | ||||||||||||||||||||
Continuing operations | $ | (0.12 | ) | $ | (0.05 | ) | $ | 0.01 | $ | (4.69 | ) | $ | (4.85 | ) | ||||||
Total Diluted (Loss) Earnings per Share | $ | (0.12 | ) | $ | (0.05 | ) | $ | 0.01 | $ | (4.69 | ) | $ | (4.85 | ) |
(1) | The sum of quarterly earnings per share may differ from the full-year amounts due to rounding, or in the case of diluted earnings per share, because securities that are anti-dilutive in certain quarters may not be anti-dilutive on a full-year basis. |
Name | Age | Present Position | Year Appointed to Present Position | Conduent Officer Since | ||||
Ashok Vemuri* | 49 | Chief Executive Officer | 2017 | 2017 | ||||
David Amoriell | 61 | Executive Vice President & President, Public Sector | 2017 | 2017 | ||||
Allan Cohen | 48 | Vice President & Chief Accounting Officer | 2017 | 2017 | ||||
Jeffrey Friedel | 56 | Executive Vice President & Chief People Officer | 2017 | 2017 | ||||
James Michael Peffer | 56 | Executive Vice President, General Counsel & Secretary | 2017 | 2017 | ||||
Brian J. Webb-Walsh | 42 | Executive Vice President & Chief Financial Officer | 2017 | 2017 |
* | Member of Conduent Board of Directors |
(a) | (1) Index to Financial Statements and Financial Statement Schedule, incorporated by reference or filed as part of this report: |
▪ | Report of Independent Registered Public Accounting Firm including Report on Financial Statement Schedule; |
▪ | Consolidated Statements of Income (Loss) for each of the years in the three-year period ended December 31, 2017; |
▪ | Consolidated Statements of Comprehensive Income (Loss) for each of the years in the three-year period ended December 31, 2017; |
▪ | Consolidated Balance Sheets as of December 31, 2017 and 2016; |
▪ | Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2017; |
▪ | Consolidated Statements of Shareholders' Equity for each of the years in the three-year period ended December 31, 2017; |
▪ | Notes to the Consolidated Financial Statements; |
▪ | Schedule II - Valuation and Qualifying Accounts for the three years ended December 31, 2017; and |
▪ | All other schedules are omitted as they are not applicable, or the information required is included in the financial statements or notes thereto. |
(in millions) | Balance at beginning of period | Additions charged to expense(1) | Amounts (credited) charged to other income statement accounts (2) | Deductions and other, net of recoveries (3)(4) | Balance at end of period | ||||||||||||||||
Allowance for Losses: | |||||||||||||||||||||
2017 | Accounts Receivable | $ | 7 | $ | (1 | ) | $ | — | $ | (4 | ) | $ | 2 | ||||||||
2016 | Accounts Receivable | 6 | 4 | — | (3 | ) | 7 | ||||||||||||||
2015 | Accounts Receivable | 6 | 4 | — | (4 | ) | 6 | ||||||||||||||
Tax Valuation Allowance: | |||||||||||||||||||||
2017 | Tax Valuation | 24 | 11 | — | — | 35 | |||||||||||||||
2016 | Tax Valuation | 38 | — | — | (14 | ) | 24 | ||||||||||||||
2015 | Tax Valuation | 35 | — | 5 | (2 | ) | 38 |
(1) | Account Receivables: additions charged to expense represent bad debt provisions relate to estimated losses due to credit and similar collectibility issues. |
(2) | Account Receivables: Other charges (credits) relate to adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations. |
(3) | Account Receivables: Deductions and other, net of recoveries primarily relates to receivable write-offs, but also includes the impact of foreign currency translation adjustments and recoveries of previously written off receivables. |
(4) | Tax Valuation: Reductions to tax valuation allowance are primarily related to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which we have concluded it is more-likely-than-not that these items will not be realized in the ordinary course of operations. |
Exhibit No. | |
2.1 | |
Incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K dated January 3, 2017. (See SEC File Number 001-37817). | |
3.1 | |
Incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K dated December 23, 2016. (See SEC File Number 001-37817). | |
3.2 | |
Incorporated by reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K dated December 23, 2016. (See SEC File Number 001-37817). | |
4.1 | |
Incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated December 9, 2016. (See SEC File Number 001-37817). | |
10.1(a) | |
Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated December 9, 2016. (See SEC File Number 001-37817). | |
10.1(b) | |
Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K dated April 11, 2017. (See SEC File Number 001-37817). | |
10.1(c) | |
Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K dated October 10, 2017. (See SEC File Number 001-37817). | |
10.1(d) | |
Incorporated by reference to Exhibit 10.1(b) to the Registrant's Annual Report on Form 10-K dated March 10, 2017, (See SEC File Number 001-37817). | |
10.3(a) | |
Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated January 3, 2017. (See SEC File Number 001-37817). | |
10.3(b) | |
Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K dated January 3, 2017. (See SEC File Number 001-37817). | |
10.3(c) | |
Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K dated January 3, 2017. (See SEC File Number 001-37817). | |
10.3(d) |
Incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K dated January 3, 2017. (See SEC File Number 001-37817). | |
10.3(e) | |
Incorporated by reference to Exhibit 10.5 to Registrant’s Current Report on Form 8-K dated January 3, 2017. (See SEC File Number 001-37817). | |
10.4(a) | |
Incorporated by reference to Exhibit 10.6 to Registrant’s Current Report on Form 8-K dated January 3, 2017. (See SEC File Number 001-37817). | |
10.4(b) | |
Incorporated by reference to Exhibit 10.6 to Registrant’s Amendment No. 1 to Form 10 dated August 15, 2016. (See SEC File Number 001-37817). | |
10.5 | |
Incorporated by reference to Exhibit 10.14 to Registrant’s Amendment No. 5 to Form 10 dated October 28, 2016. (See SEC File Number 001-37817). | |
The management contracts or compensatory plans or arrangements listed below that are applicable to the executive officers named in the Summary Compensation Table which will appear in the Registrant’s 2018 Proxy Statement or to our directors are preceded by an asterisk (*). | |
*10.6(a)(i) | |
Incorporated by reference to Exhibit 4.3 to Registrant’s Registration Statement No. 333-215361 dated December 29, 2016. (See SEC File Number 001-37817). | |
*10.6(a)(ii) | |
Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated March 29, 2017. (See SEC File Number 001-37817). | |
*10.6(a)(iii) | |
Incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K dated March 29, 2017. (See SEC File Number 001-37817). | |
*10.6(a)(iv) | |
*10.6(a)(v) | |
*10.6(a)(vi) | |
Incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K dated March 29, 2017. (See SEC File Number 001-37817). | |
*10.6(b)(i) | |
Incorporated by reference to Exhibit 4.4 to Registrant’s Registration Statement No. 333-215361 dated December 29, 2016. (See SEC File Number 001-37817). | |
*10.6(b)(ii) | |
Incorporated by reference to Exhibit 10.6(b)(ii) to the Registrant's Annual Report on From 10-K dated March 10, 2017. (See SEC File Number 001-37817). | |
*10.6.(c) | |
Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated August 28, 2017. (See SEC File Number 001-37817). |
*10.6(d) | |
Incorporated by reference to Exhibit 99.2 to Xerox Corporation’s Current Report on Form 8-K dated June 14, 2016. (See SEC File Number 001-04471). | |
*10.6(e) | |
Incorporated by reference to Exhibit 10.12 to Registrant’s Amendment No. 4 to Form 10 dated October 21, 2016. (See SEC File Number 001-37817). | |
*10.6(f) | |
Incorporated by reference to Exhibit 10.13 to Registrant’s Amendment No. 4 to Form 10 dated October 21, 2016. (See SEC File Number 001-37817). | |
*10.6(g) | |
21.1 | |
23 | |
31(a) | |
31(b) | |
32 | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase. |
101.DEF | XBRL Taxonomy Extension Definition Linkbase. |
101.INS | XBRL Instance Document. |
101.LAB | XBRL Taxonomy Extension Label Linkbase. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase. |
101.SCH | XBRL Taxonomy Extension Schema Linkbase. |
CONDUENT INCORPORATED | |
/s/ ASHOK VEMURI | |
Ashok Vemuri Chief Executive Officer March 1, 2018 |
Signature | Title | |
Principal Executive Officer: | ||
/S/ ASHOK VEMURI | Chief Executive Officer and Director | |
Ashok Vemuri | ||
Principal Financial Officer: | ||
/S/ BRIAN WEBB-WALSH | Executive Vice President and Chief Financial Officer | |
Brian Webb-Walsh | ||
Principal Accounting Officer: | ||
/S/ ALLAN COHEN | Vice President and Chief Accounting Officer | |
Allan Cohen | ||
/S/ PAUL S. GALANT | Director | |
Paul S. Galant | ||
/S/ JOIE A. GREGOR | Director | |
Joie A. Gregor | ||
/s/ VINCENT J. INTRIERI | Director | |
Vincent J. Intrieri | ||
/S/ COURTNEY MATHER | Director | |
Courtney Mather | ||
/S/ MICHAEL NEVIN | Director | |
Michael Nevin | ||
/S/ MICHAEL A. NUTTER | Director | |
Michael A. Nutter | ||
/s/ WILLIAM G. PARRETT | Director and Chairman of the Board | |
William G. Parrett | ||
/S/ VIRGINIA M. WILSON | Director | |
Virginia M. Wilson |
/s/ BRIAN WEBB-WALSH |
Chief Financial Officer |
Conduent Inc. |
/s/ ALLAN COHEN |
Allan Cohen |
Name of Subsidiary | Jurisdiction of Incorporation or Organization | |
Conduent Care Management, Inc. | Arizona | |
Conduent Healthy Communities Corporation | California | |
Conduent Unclaimed Property Systems, Inc. | Colorado | |
Conduent Asset Management Group, LLC | Delaware | |
Conduent BPO Services, Inc. | Delaware | |
Conduent Workers Compensation Holdings Corporation | Delaware | |
Conduent Defense, LLC | Delaware | |
Conduent EDI Solutions, Inc. | Delaware | |
Conduent Education Loan Services LLC | Delaware | |
Conduent Enterprise Solutions, LLC | Delaware | |
Conduent Global, Inc. | Delaware | |
Conduent Health Administration, Inc. | Delaware | |
Conduent Human Resources Services, LLC | Delaware | |
Conduent Lending, Inc. | Delaware | |
Conduent Middle East, Inc. | Delaware | |
Conduent TradeOne Marketing, Inc. | Delaware | |
Conduent HR Consulting, LLC | Delaware | |
Conduent Securities LLC | Delaware | |
Conduent Care Solutions, LLC | Delaware | |
Conduent Card Service LLC | Delaware | |
Conduent Finance, Inc. | Delaware | |
Conduent Education Industry Services, LLC | Delaware | |
Conduent Government Records Services, Inc. | Delaware | |
Conduent Payment Integrity Solutions, Inc | Delaware | |
Conduent Public Health Solutions, LLC | Delaware | |
Conduent ParkIndy, LLC | Delaware | |
Conduent Health Assessments, LLC | Delaware | |
The National Abandoned Property Processing Corporation | Delaware | |
Conduent Title Records Corporation | Delaware | |
Conduent Business Services, LLC | Delaware | |
Conduent Education Services, LLC | Delaware | |
Conduent Education Solutions, LLC | Delaware | |
Conduent European Funding LLC | Delaware | |
Conduent Export LLC | Delaware | |
Conduent Federal Solutions, LLC | Delaware | |
Conduent Government Systems, LLC | Delaware | |
Conduent Mortgage Services, Inc. | Delaware | |
Conduent Credit Balance Solutions, LLC. | Delaware | |
Conduent Workers Compensation, LLC | Delaware |
Conduent State Healthcare, LLC | Delaware | |
Conduent Transport Solutions, Inc. | Georgia | |
Conduent Wireless Data Services (Operations) Inc. | Idaho | |
Conduent Human Services, LLC | Indiana | |
Conduent Healthcare Information Services, Inc. | Indiana | |
Conduent Image Solutions, Inc. | Louisiana | |
Conduent Bill Review Corporation | Nevada | |
Conduent Commercial Solutions, LLC | Nevada | |
Conduent Patient Access Solutions, LLC | New Jersey | |
Conduent Compliance & Risk Consulting Corporation | New York | |
Conduent State & Local Solutions, Inc. | New York | |
Conduent Performance Improvement Solutions, Inc. | Oregon | |
Conduent Customer Care Solutions, Inc. | Oregon | |
Conduent HR Services, LLC | Pennsylvania | |
Conduent Healthcare Data Management, Inc. | Tennessee | |
Conduent Securities Services, Inc. | Texas | |
ACS Welfare Benefit Trust | Texas | |
Conduent Legal & Compliance Solutions, LLC | Texas | |
Mercury Fund II, Ltd. | Texas | |
Conduent Business Process Optimization Services, Inc. | Texas | |
Conduent WDS Global—Texas, Inc. | Texas | |
Conduent Heritage, LLC | Virginia | |
Conduent Learning Services, Inc. | Washington | |
Conduent Wireless Data Services North America Inc. | Washington | |
Conduent Care and Quality Solutions, Inc. | Wisconsin | |
Eagle Connect Sh.p.k. | Albania | |
Voice Star Sh.p.k. | Albania | |
Market Line S.A. | Argentina | |
Consilience Software Australasia Pty Ltd | Australia | |
Conduent Business Services (Australasia) PTY. LTD. | Australia | |
Wireless Data Services PTY Limited | Australia | |
Affiliated Computer Services Austria GmbH | Austria | |
Affiliated Computer Services International (Barbados) Limited | Barbados | |
Buck Consultants | Belgium | |
ACS Transportation Services Participacoes Ltda | Brazil | |
Conduent Servicos de Terceirizacao de Processos de Negocios Ltda. | Brazil | |
ACS HR Solucoes Servicos de Recursos Humanos do Brasil Ltda | Brazil | |
Conduent do Brasil Servicos de Call Center Ltda. | Brazil | |
Conduent HR Consultants Limited/Conseilliers HR Conduent Limitee | Canada | |
Conduent Insurance Agency Limited | Canada |
CPAS Systems, Inc. | Canada | |
Conduent Business Services Canada, Inc./Services D’affaires Conduent Canada Inc. | Canada | |
Conduent HR Solutions Canada Co | Canada | |
Conduent Solutions Chile SA | Chile | |
ACS Road Technology Services (Beijing) Co. Ltd. | China | |
Affiliated Computer Services (Tianjin) Co., Ltd. | China | |
ML Colombia S.A. | Colombia | |
ACS Czech Republic s.r.o. | Czech Republic | |
Conduent Solutions Dominican Republic, SAS | Dominican Republic | |
Affiliated Computer Services (Fiji) Limited | Fiji | |
Conduent Business Process Solutions SAS | France | |
Conduent Business Solutions (France) SAS | France | |
Affiliated Computer Services of Germany GmbH | Germany | |
ACS Holdings (Germany) GmbH | Germany | |
ACS HR Solutions Deutschland GmbH | Germany | |
Invoco Holding GmbH | Germany | |
Invoco Business Solutions GmbH | Germany | |
Invoco Communication Center GmbH | Germany | |
Invoco Customer Service GmbH | Germany | |
Invoco Helpline Communication GmbH | Germany | |
Invoco Helpline GmbH | Germany | |
Invoco Marketing & Vetrieb GmbH | Germany | |
Invoco Media Sales GmbH | Germany | |
Invoco Multimeida GmbH | Germany | |
Invoco Sales GmbH | Germany | |
Invoco Service Center GmbH | Germany | |
Invoco Services & Sales GmbH | Germany | |
Invoco Technical Service GmbH | Germany | |
ACS-BPS (Ghana) Limited | Ghana | |
Conduent Business Services de Guatemala, Sociedad Anonima | Guatemala | |
ACS HR Solutions Share Plan Services (Guernsey), Limited | Guernsey | |
ACS China Solutions Hong Kong Limited | Hong Kong | |
Conduent Business Solutions (Hong Kong) Limited | Hong Kong | |
Conduent Business Services India LLP | India | |
Conduent Ireland Limited | Ireland | |
Conduent Business Services Italy S.r.l. | Italy | |
Nuova Karel Soluzioni S.r.l. unipersonale | Italy | |
Conduent Business Solutions Italia, S.p.A. | Italy | |
Conduent Solutions (Jamaica) Limited | Jamaica | |
Conduent Jamaica Limited | Jamaica | |
Sia Rigas Karte | Latvia | |
Affiliated Computer Services Holdings (Luxembourg) S.A.R.L. | Luxembourg | |
Conduent Business Services Malaysia Sdn. Bhd. | Malaysia |
ACS Malta Limited | Malta | |
Conduent de Mexico, S.A. de C.V. | Mexico | |
Conduent Solutions de Mexico, S. de R.L. de C.V. | Mexico | |
Affiliated Computer Services International B.V. | Netherlands | |
ACS HR Solutions Nederland BV | Netherlands | |
Wilhaave Groep BV | Netherlands | |
Unamic Holding BV | Netherlands | |
Unamic/HCN BV | Netherlands | |
Conduent Business Services (Netherlands) B.V. | Netherlands | |
Market Line Peru S.A.C. | Peru | |
ACS Solutions Peru S.A. | Peru | |
Conduent Business Services Philippines, Inc. | Philippines | |
Conduent Solutions Philippines, Inc. | Philippines | |
ACS Solutions Poland Sp. Z.o.o. | Poland | |
Affiliated Computer Services of Poland Sp. z.o.o. | Poland | |
ACS Puerto Rico, LLC | Puerto Rico | |
Conduent Business Solutions of Puerto Rico, Inc. | Puerto Rico | |
Conduent Business Services Romania S.r.l. | Romania | |
Conduent Europe Finance Limited Partnership | Scotland | |
Wireless Data Services (Asia Pacific) PTE Ltd. | Singapore | |
Conduent (PTY) LTD | South Africa | |
Affiliated Computer Services of Spain, S.L., Sociedad Unipersonal | Spain | |
Xerox Business Solutions Spain, S.L. | Spain | |
e-Services Group (St. Lucia) Ltd. | St. Lucia | |
Telenamic N.V. | Suriname | |
Affiliated Computer Services GmbH | Switzerland | |
Conduent Business Solutions AG | Switzerland | |
Unamic HCN Musteri Hizmetleri Limited Sirketi | Turkey | |
Conduent Business Process Solutions Limited | United Kingdom | |
CVG Ltd | United Kingdom | |
Conduent Parking Enforcement Solutions Limited | United Kingdom | |
Wireless Data Services Limited | United Kingdom | |
Buck Consultants Limited | United Kingdom | |
Buck Consultants (Healthcare) Limited | United Kingdom | |
Buck Consultants (Administration & Investment) Limited | United Kingdom | |
Buck Consultants Shareplan Trustees Limited | United Kingdom | |
Buckingham Trustees Limited | United Kingdom | |
Talking People Limited | United Kingdom |
/S/ PRICEWATERHOUSECOOPERS LLP |
PricewaterhouseCoopers LLP |
Florham Park, New Jersey |
March 1, 2018 |
1. | I have reviewed this Annual Report on Form 10-K of Conduent Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/S/ ASHOK VEMURI | |
Ashok Vemuri Principal Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K of Conduent Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/S/ BRIAN WEBB-WALSH | |
Brian Webb-Walsh Principal Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/S/ ASHOK VEMURI | |
Ashok Vemuri Chief Executive Officer | |
March 1, 2018 | |
/S/ BRIAN WEBB-WALSH | |
Brian Webb-Walsh Chief Financial Officer | |
March 1, 2018 |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Jan. 31, 2018 |
Jun. 30, 2017 |
|
DEI [Abstract] | |||
Entity Registrant Name | Conduent Incorporated | ||
Entity Central Index Key | 0001677703 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 210,469,177 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 3,323,804,990 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
||||
Net Income (Loss) | $ 181 | $ (983) | $ (414) | |||
Translation adjustments, net | [1] | 35 | (135) | (60) | ||
Unrecognized gains, net | [1] | 2 | 0 | 1 | ||
Changes in benefit plans, net | [1] | (5) | (20) | 7 | ||
Other Comprehensive Income (Loss), Net | [1] | 32 | (155) | (52) | ||
Comprehensive Income (Loss), Net | $ 213 | $ (1,138) | $ (466) | |||
|
Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions |
Total |
Conduent Shareholders' Equity [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
AOCL [Member] |
Former parent investment [Member] |
|||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2014 | $ 5,411 | $ 0 | $ 0 | $ 0 | $ (129) | [1] | $ 5,540 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Comprehensive loss, net | $ (466) | (466) | 0 | 0 | 0 | (52) | [1] | (414) | ||||
Transfers (To) From Parent | 217 | 0 | 0 | 0 | 0 | [1] | 217 | |||||
Ending Balance at Dec. 31, 2015 | 5,162 | 0 | 0 | 0 | (181) | [1] | 5,343 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Comprehensive loss, net | (1,138) | (1,138) | 0 | 0 | 0 | (155) | [1] | (983) | ||||
Transfers (To) From Parent | (594) | 0 | 0 | 0 | (190) | [1] | (404) | |||||
Series A Convertible Preferred Stock | (142) | 0 | 0 | 0 | 0 | [1] | (142) | |||||
Company Capitalization | 0 | 2 | 3,812 | 0 | 0 | [1] | (3,814) | |||||
Ending Balance at Dec. 31, 2016 | 3,288 | 2 | 3,812 | 0 | (526) | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Comprehensive loss, net | $ 213 | 213 | 0 | 0 | 181 | 32 | [1] | 0 | ||||
Transfers (To) From Parent | (190) | |||||||||||
Dividends, Preferred Stock, Cash | [2] | (10) | 0 | 0 | (10) | 0 | [1] | 0 | ||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 38 | 0 | 38 | 0 | 0 | [1] | 0 | |||||
Ending Balance at Dec. 31, 2017 | $ 3,529 | $ 2 | $ 3,850 | $ 171 | $ (494) | [1] | $ 0 | |||||
|
Basis of Presentation and Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies References herein to “we,” “us,” “our,” the “Company” and “Conduent” refer to Conduent Incorporated and its consolidated subsidiaries unless the context suggests otherwise. Description of Business We are a global enterprise and leading provider of business process services with expertise in transaction-intensive processing, analytics and automation. We serve as a trusted business partner in both the front office and back office, enabling personalized, seamless interactions on a massive scale that improve end user experience. We create value for our commercial and government clients by applying our expertise, technology and innovation to help them drive customer and constituent satisfaction and loyalty, increase process efficiency and respond rapidly to changing market dynamics. Our portfolio includes industry-focused service offerings in attractive growth markets such as healthcare and transportation, as well as multi-industry service offerings such as transaction processing, customer care and payment services. Basis of Presentation Our Consolidated Financial Statements included the historical basis of assets, liabilities, revenues and expenses of the individual businesses of the Company, including joint ventures and partnerships over which the Company has a controlling financial interest. We have prepared the Consolidated Financial Statements pursuant to the rules and regulations of the SEC. Certain reclassifications have been made to prior years to conform to the current year presentation. All intercompany transactions and balances have been eliminated. We have also considered the impact of subsequent events on these consolidated financial statements. Separation from Xerox Corporation On December 31, 2016, Conduent spun-off from Xerox Corporation (Xerox), pursuant to the Separation and Distribution Agreement (Separation). The Separation was completed by way of a pro rata distribution of Conduent shares held by Xerox to Xerox’s shareholders. As a result, we operate as an independent, publicly traded company on the New York Stock Exchange, under the ticker "CNDT". Prior to December 31, 2016, the Financial Statements of the Company were derived from the financial statements and accounting records of Xerox as if the Conduent operated on a standalone basis. Historically, the Company consisted of the Business Process Outsourcing Operating segment within Xerox’s reportable Services segment and did not operate as a separate, standalone company. Accordingly, Xerox performed certain corporate overhead functions for the Company. Therefore, certain corporate costs, including compensation costs for corporate employees supporting the Company, were allocated from Xerox. It is not practicable to estimate actual costs that would have been incurred had the Company been a separate standalone company during the periods presented. Allocations for management costs and corporate support services provided to the Company totaled $165 million and $170 million for years ended December 31, 2016 and December 31, 2015, respectively. Management of the Company believes the assumptions regarding the allocated expenses reasonably reflect the utilization of services provided to or the benefit received by the Company during the periods prior to the Separation. The Consolidated Financial Statements for the periods prior to the Separation do not necessarily include all the expenses that would have been incurred or held by the Company had it been a separate, standalone company. Use of Estimates We prepared the Consolidated Financial Statements using financial information available at the time of preparation, which requires us to make estimates and assumptions that affect the amounts reported. Our most significant estimates pertain to the recognition of revenue for contracts based on the percentage of completion method of accounting, intangible and long-lived assets, valuation of goodwill, contingencies and litigation, income taxes and corporate allocations (for years ended December 31, 2016 and 2015). Our estimates are based on management's best knowledge of current events, historical experience, and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. New Accounting Standards Revenue Recognition: In May 2014, the Financial Accounting Standards Board (FASB) updated the accounting guidance related to revenue recognition to clarify the principles for recognizing revenue and replaced all existing revenue recognition guidance in U.S. GAAP with one accounting model. The core principle of the guidance is that an entity should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated guidance also requires additional qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers largely on a disaggregated basis. We have evaluated the adoption impact of the updated accounting guidance on our consolidated financial statements and continue to evaluate the impact on disclosures and internal controls. The new guidance will impact: (1) revenue associated with postage, which will be recognized on a net basis versus the current gross treatment; (2) the timing of revenue recognition associated with fixed fees for certain contracts with more than one performance obligation; and (3) the timing of recognition of certain pricing discounts. We adopted this updated accounting guidance beginning January 1, 2018 using the modified retrospective method under which we will recognize a cumulative-effect adjustment of approximately $20 million at the date of adoption (the expected impact to 2018 revenues is approximately $15 million), which excludes changes to our revenue associated with the reimbursement of postage. In addition, we recognized approximately $150 million of postage revenue in 2017 that will be recognized on a net basis (for all future periods) in Cost of services. Leases: In February 2016, the FASB updated the accounting guidance related to leases requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases except short term leases (lease term of 12 months or less). The accounting for lessors is largely unchanged. This updated guidance is effective for us beginning January 1, 2019. This guidance must be adopted using a modified retrospective approach through a cumulative-effect adjustment for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. While we are currently evaluating the impact of the updated accounting guidance on our consolidated financial statements; we do expect a material impact to the Company's Consolidated Balance Sheets. Cash Flows: In November 2016 the FASB issued updated accounting guidance regarding the presentation of restricted cash in the statement of cash flows. Specifically, this update requires that restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. At December 31, 2017 and 2016, we had $9 million and $22 million of restricted cash, respectively, reported in other current assets. This update is effective for us beginning January 1, 2018. Business Combinations: In January 2017, the FASB issued clarifying accounting guidance related to the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This update is effective for us beginning January 1, 2018, with early adoption permitted. The amendment in this update will be applied prospectively. There will be no material impact from the adoption of this clarifying accounting guidance on our consolidated financial statements. Recently Adopted Accounting Standards Goodwill: In January 2017, the FASB issued updated accounting guidance for simplifying the goodwill impairment test. Under the new guidance, an entity does not have to calculate the implied fair value of goodwill at the impairment testing date of its assets and liabilities as if those assets and liabilities had been acquired in a business combination. Instead the goodwill impairment test will compare the fair value of a reporting unit with its carrying amount and recognize as an impairment charge any amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. We have elected to early adopt this new guidance for our goodwill impairment tests performed after January 1, 2017. Adoption did not have any effect on our financial condition, results of operations or cash flows. Summary of Accounting Policies Revenue Recognition We primarily generate revenue through services. Revenue is recognized when it is realized or realizable and earned. We consider revenue realized or realizable and earned when we have persuasive evidence of an arrangement, delivery has occurred, the transaction price is fixed or determinable and collectibility is reasonably assured. Delivery does not occur until services have been provided to the customer, risk of loss has transferred to the customer, and either customer acceptance has been obtained, customer acceptance provisions have lapsed or the company has objective evidence that the criteria specified in the customer acceptance provisions have been satisfied. The transaction price is not considered to be fixed or determinable until all contingencies related to the sale have been resolved. Outsourcing Services: Revenues associated with outsourcing services are generally recognized as services are rendered, which is generally on the basis of the number of accounts or transactions processed. In service arrangements where final acceptance of a system or solution by the customer is required, revenue is deferred until all acceptance criteria have been met. Revenues on cost reimbursable contracts are recognized by applying an estimated factor to costs as incurred, determined by the contract provisions and prior experience. Revenues on unit-price contracts are recognized at the contractual selling prices as work is completed and accepted by the customer. Revenues on time and material contracts are recognized at the contractual rates as the labor hours and direct expenses are incurred. Revenues on certain fixed price contracts where we provide system development and implementation services are recognized over the contract term based on the percentage of development and implementation services that are provided during the period compared with the total estimated development and implementation services to be provided over the entire contract using the percentage-of-completion accounting methodology. These services require that we perform significant, extensive and complex design, development, modification or implementation of our customers' systems. Performance will often extend over long periods, and our right to receive future payment depends on our future performance in accordance with the agreement. The percentage-of-completion methodology involves recognizing probable and reasonably estimable revenue using the percentage of services completed, on a current cumulative cost to an estimated total cost basis, using a reasonably consistent profit margin over the period. Revenues earned in excess of related billings are accrued, whereas billings in excess of revenues earned are deferred until the related services are provided. We recognize revenues for non-refundable, upfront implementation fees on a straight-line basis over the period between the initiation of the services through the end of the contract term. In connection with our services arrangements, we incur and capitalize costs to originate these long-term contracts and to perform the migration, transition and setup activities necessary to enable us to perform under the terms of the arrangement. Certain initial direct costs of an arrangement are capitalized and amortized over the contractual service period of the arrangement to cost of services. From time to time, we also provide inducements to customers in various forms, including contractual credits, which are capitalized and amortized as a reduction of revenue over the term of the contract. Spending associated with customer-related deferred set-up/transition and inducement costs were as follows:
The capitalized amount of customer contract costs were as follows:
__________ (1) The balance at December 31, 2017 and 2016 are expected to be amortized over a weighted average period of approximately nine and eight years, respectively. Amortization expense for the next five years and thereafter is expected to be as follows (in millions):
Long-lived assets used in the fulfillment of the arrangements are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract specific. Multiple Element Arrangements: As described above, we enter into the following revenue arrangements that may consist of multiple deliverables including contracts for multiple types of outsourcing services, as well as professional and value-added services. For instance, we may contract for an implementation or development project and also provide services to operate the system which we implement or develop over a period of time; or we may contract to scan, manage and store customer documents. In substantially all of our multiple element arrangements, we are able to separate the deliverables since we normally will meet both of the following criteria:
Consideration in a multiple-element arrangement is allocated at the inception of the arrangement to all deliverables on the basis of the relative selling price. When applying the relative selling price method, the selling price for each deliverable is primarily determined based on vendor-specific objective evidence (VSOE), third-party evidence (TPE), or our best estimate of the selling price. The above noted revenue policies are then applied to each separated deliverable, as applicable. Revenue Reporting: Revenue from sales of third-party vendor products or services is recorded net of costs when the Company is acting as an agent between the customer and the vendor or supplier, or gross when the Company is a principal to the transaction. Postage is generally recognized on a gross basis. Several factors are considered to determine whether the company is an agent or principal, most notably whether the Company is the primary obligor to the customer, or has inventory risk. Consideration is also given to whether the Company adds meaningful value to the vendor’s product or service, was involved in the selection of the vendor’s product or service, has latitude in establishing the sales price or has credit risk. Revenue-based Taxes: We report revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The primary revenue-based taxes are sales tax and value-added tax (VAT). Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, including money market funds and investments with original maturities of three months or less. Receivable Sales We had transferred certain portions of our receivable portfolios in 2016 and 2015 and accounted for those transfers as sales based on meeting the criteria for derecognition. Losses on the sale of receivables depend, in part, on both (a) the cash proceeds and (b) the net non-cash proceeds received or paid. When we have sold receivables, we normally received beneficial interests in the transferred receivables from the purchasers as part of the proceeds. Refer to Note 4 – Accounts Receivable, Net for more details on our receivable sales. Assets/Liabilities Held for Sale We classify assets as held for sale in the period when the following conditions are met: (i) management, having the authority to approve the action, commits to a plan to sell the asset (disposal group); (ii) the asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal group); (iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated; (iv) the sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond our control extend the period of time required to sell the asset (disposal group) beyond one year; (v) the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. A long-lived asset (disposal group) that is classified as held for sale is initially measured at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset (disposal group) until the date of sale. The fair value of a long-lived asset (disposal group) less any costs to sell is assessed each reporting period it remains classified as held for sale and any subsequent changes are reported as an adjustment to the carrying value of the asset (disposal group), as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale. In the fourth quarter of 2017, Management approved for disposal through sale of certain assets and businesses. This action was taken as a result of our strategic evaluation of these businesses. As of December 31, 2017, these businesses qualified as assets held for sale. During the year ended December 31, 2017, we reclassified $757 million to assets held for sale and $169 million to liabilities held for sale, as we have an active program to locate buyers for these businesses and we expect these businesses to be sold within one year. Refer to Note 3 – Assets/Liabilities Held for Sale for further discussion. Land, Buildings and Equipment Land, buildings and equipment are recorded at cost. Buildings and equipment are depreciated over their estimated useful lives. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life. Significant improvements are capitalized and maintenance and repairs are expensed when incurred. Refer to Note 5 – Land, Buildings, Equipment and Software, Net for further discussion. Software - Internal Use and Product Internal Use: We capitalize direct costs associated with developing, purchasing or otherwise acquiring software for internal use and amortize these costs on a straight-line basis over the expected useful life of the software, beginning when the software is implemented (Internal Use Software). Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Amounts expended for Internal Use Software are included in Cash Flows from Investing. Product: We also capitalize certain costs related to the development of software solutions to be sold to our customers upon reaching technological feasibility (Product Software). These costs are amortized on a straight-line basis over the estimated economic life of the software. Amounts expended for Product Software are included in Cash Flows from Operations. We perform periodic reviews to ensure that unamortized Product Software costs remain recoverable from estimated future operating profits (net realizable value or NRV). Costs to support or service licensed software are charged to Costs of outsourcing as incurred. Refer to Note 5 – Land, Buildings, Equipment and Software, Net for further information. Goodwill For acquired businesses, the Company records the acquired assets and assumed liabilities based on their relative fair values at the date of acquisitions (commonly referred to as the purchase price allocation). Goodwill represents the excess of the purchase price paid in excess of the fair value of net tangible and intangible assets acquired. For the Company’s business acquisitions, the purchase price is allocated to identifiable intangible assets separate from goodwill if they are from contractual or other legal rights, or if they could be separated from the acquired business and sold, transferred, licensed, rented or exchanged. We test goodwill for impairment annually or more frequent if an event or change in circumstances indicate the asset may be impaired. Impairment testing for goodwill is done at the reporting unit level. We determined the fair value of our reporting units utilizing a combination of both an Income Approach and a Market Approach. The Income Approach utilizes a discounted cash flow analysis based upon the forecasted future business results of our reporting units. The Market Approach utilizes the guideline public company method. If the fair value of a reporting unit is less than its carrying amount, an impairment charge would be recognized for amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Refer to Note 6 – Goodwill and Intangible Assets, Net for further information. Other Intangible Assets Other intangible assets primarily consist of assets acquired through business combinations, including installed customer base and distribution network relationships, patents and trademarks. Other intangible assets are amortized on a straight-line basis over their estimated economic lives unless impairment is identified. Refer to Note 6 – Goodwill and Intangible Assets, Net for further information. Impairment of Long-Lived Assets We review the recoverability of our long-lived assets, including buildings, equipment, internal use software, product software and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on forecasted cash flows. Pension Obligations We sponsor various forms of defined benefit pension plans in several countries covering employees who meet eligibility requirements. Several statistical and other factors that attempt to anticipate future events are used in calculating the expense, liability and asset values related to our pension plans. These factors include assumptions we make about the discount rate, expected return on plan assets, the rate of future compensation increases and mortality rates. The discount rate is used to present value our future anticipated benefit obligations. The discount rate reflects the current rate at which benefit liabilities could be effectively settled considering the timing of expected payments for plan participants. In estimating our discount rate, we consider rates of return on high-quality fixed-income investments adjusted to eliminate the effects of call provisions, as well as the expected timing of pension and other benefit payments. The expected rate of return on plan assets is the long-term rate of return we expect to earn on plan assets. When estimating the expected rate of return, in addition to assessing recent performance, we consider the historical returns earned on plan assets, the rates of return expected in the future, and our investment strategy and asset mix with respect to the plans’ funds. The expected rate of return on plan assets is reviewed annually and revised, as necessary, to reflect changes in financial markets and our investment strategy. Each year, the difference between the actual return on plan assets and the expected return on plan assets, as well as increases or decreases in the benefit obligation as a result of changes in the discount rate and other actuarial assumptions, are added to or subtracted from any cumulative actuarial gain or loss from prior years. This amount is the net actuarial gain or loss recognized in Accumulated other comprehensive loss. We amortize net actuarial gains and losses as a component of net pension cost for a year if, as of the beginning of the year, that net gain or loss (excluding asset gains or losses that have not been recognized in market-related value) exceeds 10% of the greater of the projected benefit obligation or the market-related value of plan assets (the "corridor" method). This determination is made on a plan-by-plan basis. If amortization is required for a particular plan, we amortize the applicable net gain or loss in excess of the 10% threshold on a straight-line basis in net periodic pension cost over the remaining service period of the employees participating in that pension plan. In plans where substantially all participants are inactive, the amortization period for the excess is the average remaining life expectancy of the plan participants. All changes are ultimately recognized as components of net periodic benefit cost, except to the extent they may be offset by subsequent changes. At any point, changes that have been identified and quantified but not recognized as components of net periodic benefit cost, are recognized in Accumulated other comprehensive loss, net of tax. Refer to Note 11 – Employee Benefit Plans for further information regarding our Pension Benefit Obligations. Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are based on differences between U.S. GAAP reporting and tax bases of assets or liabilities and based on current tax laws, regulations and rates. The recognition of deferred tax assets requires an assessment to determine the realization of such assets. Management establishes valuation allowances on deferred tax assets when it is determined “more-likely-than-not” that some portion or all of the deferred tax assets may not be realized. Management considers positive and negative evidence in evaluating the ability of the Company to realize its deferred tax assets, including its historical results and forecasts of future ability to realize its deferred tax assets, including projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. We are subject to ongoing tax examinations and assessments in various jurisdictions. We have unrecognized tax benefits for uncertain tax positions. We follow U.S. GAAP which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Our ongoing assessments of the more-likely-than-not outcomes of the examinations and related tax positions require judgment and can materially increase or decrease our effective tax rate, as well as impact our operating results. Refer to Note 12 – Income Taxes for further discussion. Foreign Currency Translation and Re-measurement The functional currency for most foreign operations is the local currency. Net assets are translated at current rates of exchange and income, expense and cash flow items are translated at average exchange rates for the applicable period. The translation adjustments are recorded in Accumulated other comprehensive loss. The U.S. Dollar is used as the functional currency for certain foreign subsidiaries that conduct their business in U.S. Dollars. A combination of current and historical exchange rates is used in re-measuring the local currency transactions of these subsidiaries and the resulting exchange adjustments are recorded in Currency (gains) and losses within other expenses, net together with other foreign currency re-measurements. |
Segment Reporting |
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Segment Reporting | Segment Reporting Our reportable segments correspond to how we organize and manage the business, as defined by our CEO who is also our Chief Operating Decision Maker, and are aligned to the industries in which our clients operate. Our segments involve the delivery of business process services and include service arrangements where we manage a customer's business activity or process. We report our financial performance based on the two reportable segments: Commercial Industries and Public Sector.
Other includes our Government Health Enterprise Medicaid Platform business, where we are limiting our focus to maintaining systems for our current clients; our Education Business inclusive of our Student Loan business, which is in runoff; and inter-segment eliminations. Selected financial information for our reportable segments was as follows:
The following is a reconciliation of segment profit (loss) profit to pre-tax (loss) income:
Geographic area data is based upon the location of the subsidiary reporting the revenue or long-lived assets and is as follows for each of the years ended December 31:
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In 2016, our methodology to disclose revenue on a geographic basis changed to reflect where the work is contracted. All prior years have been adjusted to reflect this change in methodology. |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Divestitures | As of December 31, 2017, there were certain businesses that qualified as assets/liabilities held for sale due to plans for disposal through sale. These assets/liabilities held for sale include a mix of both Commercial Industries and Public Sector that represent businesses in markets or with services that we did not see as strategic or core. The following is a summary of the major categories of assets and liabilities that have been reclassified to held for sale.
Information Technology Outsourcing (ITO) In 2015 we completed the sale of our ITO business to Atos, which represented a discontinued operation. In February 2016, we reached an agreement with Atos on the final adjustments to the closing balance of net assets sold as well as the settlement of certain indemnifications and recorded an additional pre-tax loss on the disposal in 2015 of $24 million ($14 million after-tax). The additional loss was recorded in 2015 as the financial statements had not yet been issued when the agreement was reached with Atos. We made a payment in 2016 to Atos of approximately $52 million, representing a $28 million adjustment to the final sales price as a result of this agreement and a payment of $24 million due from closing. The payment is reflected in Investing cash flows as an adjustment of the sales proceeds. Summarized financial information for our Discontinued Operations is as follows:
The following is a summary of selected financial information of the ITO business:
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivables, Net | Accounts Receivable, Net Accounts receivable, net was as follows:
Unbilled amounts include amounts associated with percentage-of-completion accounting and other earned revenues not currently billable due to contractual provisions. Amounts to be invoiced in subsequent months for current services provided are included in amounts billable, and at December 31, 2017 and 2016 were approximately $364 million and $429 million, respectively. Accounts Receivable Sales Arrangements Prior to 2017, we sold accounts receivables with payment due dates of less than 60 days. Under most of the agreements, we continue to service the sold accounts receivable. When applicable, a servicing liability is recorded for the estimated fair value of the servicing. The amounts associated with the servicing liability were not material. Accounts receivable sales were as follows:
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Land, Buildings, Equipment and Software, Net |
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Land, Buildings, Equipment and Software, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Land, Buildings, Equipment and Software, Net | Land, Buildings, Equipment and Software, Net Land, buildings and equipment, net were as follows:
Depreciation expense and operating lease rent expense were as follows:
We lease buildings and equipment, substantially all of which are accounted for as operating leases. Certain leases were accounted for as capital leases and the remaining net book value of those assets, included in Land, Buildings and Equipment, net were approximately $32 million and $42 million at December 31, 2017 and 2016, respectively. Future minimum operating lease commitments that have initial or remaining non-cancelable lease terms in excess of one year at December 31, 2017 were as follows (in millions):
Internal Use and Product Software Additions to Internal Use and Product Software as well as year-end balances for these assets were as follows:
Useful lives of our internal use and product software generally vary from one to seven years. Included within product software at December 31, 2017 and 2016 were $2 million and $3 million, respectively, of capitalized costs associated with software system platforms developed for use in certain of our government services businesses. During 2016 we determined that it was probable that we would not fully complete our NY MMIS project in its current form. As a result of this decision an impairment charge of approximately $28 million was recorded in Cost of services. We also recorded an additional impairment charge in 2016 related to the 2015 HE charge of approximately $9 million in Restructuring and asset impairment. In 2015 we decided to discontinue certain future implementations of these software system platforms, and recorded an impairment charge of $160 million ($14 million in Cost of services and $146 million in Restructuring and asset impairments). |
Goodwill and Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill The following table presents the changes in the carrying amount of goodwill, by reportable segment:
Impairment Charge There was no impairment identified for the years ended December 31, 2017 and 2015. In 2016, due to the declining trends and projections in the Commercial Industries reporting unit, we concluded that the fair value of our Commercial Industries reporting unit was less than its carrying value. Accordingly, we recorded a pre-tax goodwill impairment charge of $935 million during the fourth quarter of 2016, which is separately presented in the Consolidated Statements of Income (Loss). There was no impairment identified for the Public Sector in 2016. Based on our quantitative assessments, we concluded that the fair value of our Commercial Industries and Public Sector reporting units exceeded their respective carrying values by 72% and 13%, respectively, at December 31, 2017. The most significant assumptions used in the goodwill analysis relate to a 3% long-term organic growth rate for both the Commercial Industries and Public Sector segments as well as a 9.25% and a 8.75% discount rate for the Commercial Industries and Public Sector segments, respectively. Intangible Assets, Net Net intangible assets were $891 million at December 31, 2017 of which $492 million and $399 million relate to our Commercial Industries and Public Sector segments, respectively. Intangible assets were comprised of the following:
Amortization expense related to intangible assets was $243 million, $280 million and $250 million for the years ended December 31, 2017, 2016 and 2015, respectively. Amortization expense is expected to approximate $241 million in 2018, $241 million in 2019, $238 million in 2020, $134 million in 2021 and $12 million in 2022. |
Restructuring and Asset Impairment Charges |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Asset Impairment Charges | Restructuring Programs and Asset Impairment Charges We engage in a series of restructuring programs related to downsizing our employee base, exiting certain activities, outsourcing certain internal functions and engaging in other actions designed to reduce our cost structure and improve productivity. Prior to 2017, these initiatives primarily consist of severance actions that impacted all major geographies and segments. In 2017, the implementation of our strategic transformation program as well as various productivity initiatives reduced our real estate footprint across all geographies and segments resulting in increased lease cancellation and other related costs. Management continues to evaluate our business, therefore, in future years, there may be additional provisions for new plan initiatives as well as changes in previously recorded estimates as payments are made or actions are completed. Asset impairment charges were also incurred in connection with these restructuring actions for those assets sold, abandoned or made obsolete as a result of these programs. Costs associated with restructuring, including employee severance and lease termination costs are generally recognized when it has been determined that a liability has been incurred, which is generally upon communication to the affected employees or exit from the leased facility. In those geographies where we have either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan, we recognize employee severance costs when they are both probable and reasonably estimable. A summary of our restructuring program activity during the two years ended December 31, 2017 is as follows:
We also recorded costs related to professional support services associated with the implementation of the strategic transformation program of $9 million and $28 million during the years ended December 31, 2017 and 2016, respectively. The following table summarizes the total amount of costs incurred in connection with these restructuring programs by segment:
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt We classify our debt based on the contractual maturity dates of the underlying debt instruments or as of the earliest put date available to the debt holders. We defer costs associated with debt issuance over the applicable term. These costs are amortized as interest expense in our Consolidated Statements of Income (Loss). Long-term debt was as follows:
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Scheduled principal payments due on our long-term debt for the next five years and thereafter are as follows:
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Credit Facility On December 7, 2016, we entered into a senior secured credit agreement (Credit Agreement) among the Company, its subsidiaries: Conduent Business Services, LLC (CBS), Affiliated Computer Services International B.V. and Conduent Finance, Inc. (CFI), the lenders party and JP Morgan Chase Bank, N.A., as the administrative agent. The Credit Agreement contains senior secured credit facilities (Senior Credit Facilities) consisting of:
Borrowings under the Term Loan A Facility and the Revolving Credit Facility bears interest at a rate equal to either the sum of a base rate plus a margin ranging from 1.00% and 1.50% or the sum of a Eurocurrency rate plus an applicable rate ranging from 2.00% to 2.50%, with either such margin varying according to the total net leverage ratio of CBS. Borrowing under Term Loan B Facility bears interest at a rate equal to the sum of a base rate plus 2.0%, or the sum of a Eurocurrency rate plus 3.0%. CBS is required to pay a quarterly commitment fee under the Revolving Credit Facility at a rate ranging from 0.35% to 0.40% per annum, with such rate varying according to the total net leverage ratio of CBS and the actual daily unused portion of the commitments during the applicable quarter. CBS is also required to pay a fee equal to the adjusted LIBOR on the aggregate face amount of outstanding letters of credit under the Revolving Credit Facility. The Credit Agreement permits us to incur incremental term loan borrowings and /or increase commitments under the Revolving Credit Facility, subject to certain limitations and satisfaction of certain conditions, in an aggregate amount not to exceed (i) $200 million plus, (ii) if the senior secured net leverage ratio of CBS and its subsidiaries does not exceed 2.25 to 1.00 on a pro forma basis (without giving effect to any incurrence under clause (i) that is incurred substantially simultaneously with amounts incurred under clause (ii)), an unlimited amount. All obligations under the Senior Credit Facilities are unconditionally guaranteed by the Company, CBS, CFI and the existing and future direct and indirect wholly owned domestic subsidiaries of CBS (subject to certain exceptions). All obligations under the Senior Credit Facilities, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the assets of CBS and the guarantors under the Senior Credit Facilities (other than the Company and CFI), including a first-priority pledge of all the capital stock of CBS and the subsidiaries of CBS directly held by CBS or the guarantors (other than the Company and CFI) under the Senior Credit Facilities (which pledge, in the case of any foreign subsidiary, will be limited to 65% of the capital stock of any first-tier foreign subsidiary). The Credit Facility contains certain customary affirmative and negative covenants, restrictions and events of default. CBS is required to maintain a total net leverage ratio not to exceed 4.25 to 1.00 (a quarterly test) for each quarter through September 30, 2018 and 3.75 to 1.00 for each quarter thereafter. The net proceeds of the borrowings under the Term Loan A of $700 million (approximately $278 million borrowed in Euros) and Term Loan B of $850 million, were used to purchase our international subsidiaries from Xerox Corporation, to pay a distribution to Xerox Corporation and for working capital and other general corporate purposes. At December 31, 2017 we had $1,574 million in outstanding borrowings under our Credit Agreement and had utilized $12 million of our Revolving Credit Facility capacity to issue letters of credit. Discounts and debt issuance costs of $47 million were deferred. Senior Notes On December 7, 2016, CBS and CFI, each a wholly owned subsidiary of the Company, issued $510 million Senior Unsecured Notes due 2024 bearing interest at 10.5% (the "Senior Notes"). Interest is payable semi-annually, beginning on June 15, 2017. Discounts and debt issuance costs of $17 million were deferred. At the option of the Issuers, the Senior Notes are redeemable in whole or in part, at any time prior to December 15, 2020, at a price equal to 100% of the aggregate principal amount of the Senior Notes plus accrued and unpaid interest, if any, to, but excluding, the redemption date plus a “make-whole” premium. The Issuers may also redeem the Senior Notes, in whole or in part, at any time on or after December 15, 2020, at the redemption prices specified in the Indenture, plus accrued and unpaid interest, if any, to but excluding the redemption date. Additionally, at any time prior to December 15, 2019, the Issuers may redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds from certain equity offerings at a price equal to 110.50% of the principal amount of the Senior Notes, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The Senior Notes are jointly and severally guaranteed on a senior unsecured basis by the Company and each of the existing and future domestic subsidiaries of CFI or CBS that guarantee the obligations under the Senior Credit Facilities. Proceeds from the issuance were used to fund a portion of the transfer of cash to Xerox Corporation in connection with the spin-off. Interest Interest paid on our short-term and long-term debt amounted to $129 million, $5 million and $9 million for the years ended December 31, 2017, 2016 and 2015, respectively. Interest expense and interest income was as follows:
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments We are exposed to market risk from changes in foreign currency exchange rates and interest rates, which could affect operating results, financial position and cash flows. We manage our exposure to these market risks through our regular operating and financing activities and, when appropriate, through the use of derivative financial instruments. These derivative financial instruments are utilized to hedge economic exposures, as well as to reduce earnings and cash flow volatility resulting from shifts in market rates. We enter into limited types of derivative contracts to manage foreign currency exposures that we hedge. Our primary foreign currency market exposures include the Philippine Peso, Indian Rupee and Mexican Peso. The fair market values of all our derivative contracts change with fluctuations in interest rates or currency exchange rates and are designed so that any changes in their values are offset by changes in the values of the underlying exposures. Derivative financial instruments are held solely as risk management tools and not for trading or speculative purposes. The related cash flow impacts of all of our derivative activities are reflected as cash flows from operating activities. We do not believe there is significant risk of loss in the event of non-performance by the counterparty associated with our derivative instruments because these transactions are executed with a major financial institution. Further, our policy is to deal only with counterparties having a minimum investment grade or better credit rating. Credit risk is managed through the continuous monitoring of exposures to such counterparties. Summary of Foreign Exchange Hedging Positions At December 31, 2017, we had outstanding forward exchange with gross notional values of $160 million, which is typical of the amounts that are normally outstanding at any point during the year. The impact of our hedging program is not material to our balance sheet or income statement. Approximately 68% of these contracts mature within three months, 12% in three to six months, 15% in six to twelve months and 5% in greater than 12 months. The following is a summary of the primary hedging positions and corresponding fair values as of December 31, 2017:
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Fair Value of Financial Assets and Liabilities |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. US. GAAP establishes a framework for measuring that includes a hierarchy used to classify the inputs used in measuring fair value. The levels of the fair value hierarchy are as follows: Level 1: Fair value is determined using an unadjusted quoted price in an active market for identical assets or liabilities. As at December 31, 2017 and 2016, the Company did not have any asset or liability that was measured using Level 1 inputs. Level 2: Fair value is estimated using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. All the Company's assets and liabilities that were measured at fair value on a recurring basis as at December 31, 2017 and 2016, were valued using Level 2 inputs. Level 3: Fair value is estimated using unobservable inputs that are significant to the fair value of the assets. As at December 31, 2017 and 2016, the Company did not have any asset or liability that was measured using Level 3 inputs. The following table represents assets and liabilities fair value measured on a recurring basis. The basis for the measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs.
Fair value for our deferred compensation plan investments in company-owned life insurance is reflected at cash surrender value. Fair value for our deferred compensation plan investments in mutual funds is based on quoted market prices for actively traded investments similar to those held by the plan. Fair value for deferred compensation plan liabilities is based on the fair value of investments corresponding to employees’ investment selections, based on quoted prices for similar assets in actively traded markets. Summary of Other Financial Assets and Liabilities Fair Value Measured on a Nonrecurring Basis The estimated fair values of our other financial assets and liabilities fair value measured on a nonrecurring basis were as follows:
The fair value amounts for Cash and cash equivalents, Restricted cash and Accounts receivable, net, approximate carrying amounts due to the short maturities of these instruments. The fair value of Short and Long-term debt was estimated based on the current rates offered to us for debt of similar maturities (Level 2). The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at such date. The fair value of the Goodwill impairment charge of $935 million recorded in 2016, was estimated based on a determination of the implied fair value of goodwill, leveraging discounted cash flows (level 3). Refer to Note 6 – Goodwill and Intangible Assets, Net for additional information regarding this impairment. |
Employee Benefit Plans |
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Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans Our defined benefit pension plans are primarily associated with certain employees in our Human Resources and Consulting business located in the U.S., Canada and the United Kingdom (U.K.). Prior to an amendment to freeze future service benefits, these defined benefit pension plans had provided benefits for participating employees based on years of service and average compensation for a specified period before retirement (see Plan Amendment below for further information). Certain of our employees participate in post-employment medical plans. These plans are not material to our results of operations or financial position and are not included in the disclosures below. December 31 is the measurement date for all of our defined benefit pension plans.
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Benefit plans pre-tax amounts recognized in Accumulated other comprehensive loss (AOCL) at December 31:
Aggregate information for pension plans with an Accumulated benefit obligation in excess of plan assets is presented below:
Our pension plan assets and benefit obligations at December 31, 2017 were as follows:
The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows:
The net actuarial loss for the defined benefit pension plans that will be amortized from AOCL into net periodic benefit cost over the next fiscal year is $2 million. Plan Amendments Pension Plan Freezes In 2015, we amended several of our major defined benefit pension plans to freeze current benefits and eliminate benefits accruals for future service, including our plans in the U.S., Canada and the U.K. The freeze of current benefits is the primary driver of the reduction in pension service costs since 2015. In certain non-U.S. plans, we are required to continue to consider salary increases and inflation in determining the benefit obligation related to prior service. Plan Assets Current Allocation As of the 2017 and 2016 measurement dates, the global pension plan assets were $222 million and $192 million, respectively. These assets were invested among several asset classes. The following tables presents the defined benefit plans assets measured at fair value and the basis for that measurement:
Valuation Method Our primary Level 3 assets are Real Estate and Guaranteed Investment Contract investments which are individually immaterial. The fair value of our real estate investment funds are based on the Net Asset Value (NAV) of our ownership interest in the funds. NAV information is received from the investment advisers and is primarily derived from third-party real estate appraisals for the properties owned. The fair value for our Guaranteed Investment Contract investments have been determined based on the higher of the surrender value of the contract or the present value of the cash flow of the related pension obligations. The valuation techniques and inputs for our Level 3 assets have been consistently applied for all periods presented. Investment Strategy The target asset allocations for our worldwide defined benefit pension plans were:
We employ a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. The intent of this strategy is to minimize plan expenses by exceeding the interest growth in long-term plan liabilities. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. This consideration involves the use of long-term measures that address both return and risk. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value and small and large capitalizations. Other assets such as real estate, are used to improve portfolio diversification. Derivatives may be used to hedge market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risks and returns are measured and monitored on an ongoing basis through annual liability measurements and quarterly investment portfolio reviews. Contributions In 2017, we made cash contributions of $8 million ($3 million U.S. and $5 million non-U.S.) to our defined benefit pension plans. In 2018, based on current actuarial calculations, we expect to make contributions of approximately $8 million ($8 million non-U.S. and none for U.S.) to our defined benefit pension plans. Estimated Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the following years:
Assumptions Weighted-average assumptions used to determine benefit obligations at the plan measurement dates:
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Defined Contribution Plans We have post-retirement savings and investment plans in several countries, including the U.S., U.K. and Canada. In many instances, employees from those defined benefit pension plans that have been amended to freeze future service accruals (see "Plan Amendments" for additional information) were transitioned to an enhanced defined contribution plan. In these plans employees are allowed to contribute a portion of their salaries and bonuses to the plans, and we match a portion of the employee contributions. We recorded charges related to our defined contribution plans of $35 million in 2017, $35 million in 2016 and $34 million in 2015. |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income and Other Taxes | Income Taxes Prior to the spin-off from Xerox Corporation, Conduent’s operating results were included in various Xerox consolidated U.S. federal and state income tax returns, as well as non-U.S. tax filings. For the purposes of the Company’s Consolidated and Combined Financial Statements for periods prior to the spin-off, income tax expense and deferred tax balances have been recorded as if the Company filed tax returns on a standalone basis, separate from Xerox. The Separate Return Method applies the accounting guidance for income taxes to the standalone financial statements as if the Company was a separate taxpayer and a standalone enterprise for fiscal 2016 and prior. On December 22, 2017, the Tax Reform was enacted. The effects of changes in tax rates and laws are recognized in the period in which the new legislation is enacted. In the case of US federal income taxes, the enactment date is the date the bill becomes law. The income tax effects of the Tax Reform have been initially accounted for on a provisional basis pursuant to the SEC staff guidance on income taxes. Reasonable estimates for all material tax effects of the Tax Reform (other than amounts related to accounting policy elections) have been provided and adjustments to provisional amounts will be made in subsequent reporting periods as information becomes available to complete provisional computations. With respect to this legislation, we recorded a provisional tax benefit of $198 million, which included a $210 million tax benefit due to the re-measurement of deferred tax assets and liabilities resulting from the decrease in the corporate U.S. federal income tax rate from 35% to 21%, and $12 million as a one-time-charge on the transition tax for Post-1986 undistributed and not previously taxed foreign earnings and profits. The impacts of Tax Reform on our 2017 Consolidated Financial Statements are provisional, and could change during 2018 as we further evaluate the impacts of the Tax Reform. The Company has provisionally adopted the policy of treating the Global Intangible Low Taxed Income (GILTI) regime as a period cost. The GILTI regime enacted as part of Tax Reform subjects certain post 2017 foreign earnings (i.e. amounts in excess of deemed return on net tangible assets of non-US subsidiaries) to US tax. In January 2018, the FASB released guidance on the accounting for tax on GILTI. The guidance indicates that either accounting for deferred taxes on GILTI or treating GILTI as a period cost are both acceptable accounting elections. (Loss) income before income taxes (pre-tax (loss) income) was as follows:
(Benefit) provision for income taxes were as follows:
A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate is as follows:
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On a consolidated basis, we paid/(received) a total of $29 million, $(123) million and $194 million in income taxes to federal, foreign and state jurisdictions during the three years ended December 31, 2017, 2016 and 2015, respectively. Total income tax expense (benefit) was allocated as follows:
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Unrecognized Tax Benefits and Audit Resolutions We recognize tax liabilities when, despite our belief that our tax return positions are supportable, we believe that certain positions may not be fully sustained upon review by tax authorities. Each period we assess uncertain tax positions for recognition, measurement and effective settlement. Benefits from uncertain tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. Where we have determined that our tax return filing position does not satisfy the more-likely-than-not recognition threshold, we have recorded no tax benefits. We are also subject to ongoing tax examinations in numerous jurisdictions due to the extensive geographical scope of our operations. Our ongoing assessments of the more-likely-than-not outcomes of the examinations and related tax positions require judgment and can increase or decrease our effective tax rate, as well as impact our operating results. The specific timing of when the resolution of each tax position will be reached is uncertain. As of December 31, 2017, we do not believe that there are any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
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Included in the balances at December 31, 2017, 2016 and 2015 are $0, $0 and $8 million, respectively, of tax positions that are highly certain of realization but for which there is uncertainty about the timing. Because of the impact of deferred tax accounting, other than for the possible incurrence of interest and penalties, the disallowance of these positions would not affect the annual effective tax rate. In addition, for other uncertain tax positions, we maintain offsetting benefits from other jurisdictions of $16 million, $16 million and $14 million, at December 31, 2017, 2016 and 2015, respectively. We recognized interest and penalties accrued on unrecognized tax benefits, as well as interest received from favorable settlements within income tax expense. We had $6 million, $4 million and $14 million accrued for the payment of interest and penalties associated with unrecognized tax benefits at December 31, 2017, 2016 and 2015, respectively. In the U.S., we are no longer subject to U.S. federal income tax examinations for years before 2005. With respect to our major foreign jurisdictions, the years generally remain open back to 2006. Deferred Income Taxes The Company is in the position of having tax basis in excess of book basis in its U.S. investment in foreign subsidiaries. Nonetheless, the Company is indefinitely reinvesting its foreign subsidiaries' undistributed earnings of $253 million. For years after 2017, the Tax Reform does allow for certain earnings to be repatriated free from US Federal taxes. However, the repatriation of earnings could give rise to additional tax liabilities. The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows:
The deferred tax assets for the respective periods were assessed for recoverability and, where applicable, a valuation allowance was recorded to reduce the total deferred tax asset to an amount that will, more-likely-than-not, be realized in the future. The net change in the total valuation allowance for the years ended December 31, 2017 and 2016 was an increase of $11 million and a decrease of $14 million, respectively. The valuation allowance relates primarily to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which we have concluded it is more-likely-than-not that these items will not be realized in the ordinary course of operations. Although realization is not assured, we have concluded that it is more-likely-than-not that the deferred tax assets, for which a valuation allowance was determined to be unnecessary, will be realized in the ordinary course of operations based on the available positive and negative evidence, including scheduling of deferred tax liabilities and projected income from operating activities. The amount of the net deferred tax assets considered realizable, however, could be reduced in the near term if actual future income or income tax rates are lower than estimated, or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary differences. At December 31, 2017, we had tax credit carryforwards of $27 million available to offset future income taxes which will expire between 2018 and 2037 if not utilized. We also had net operating loss carryforwards for income tax purposes of $422 million that will expire between 2018 and 2037, if not utilized; and $43 million available to offset future taxable income indefinitely. |
Contingencies and Litigation |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||
Contingencies and Litigation | Contingencies and Litigation As more fully discussed below, we are involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities law; governmental entity contracting, servicing and procurement law; intellectual property law; environmental law; employment law; the Employee Retirement Income Security Act (ERISA); and other laws and regulations. We determine whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. We assess our potential liability by analyzing our litigation and regulatory matters using available information. We develop our views on estimated losses in consultation with outside counsel handling our defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts, this could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs. We believe that we have recorded adequate provisions for any such matters as of December 31, 2017. Litigation is inherently unpredictable, and it is not possible to predict the ultimate outcome of these matters and such outcome in any such matter could be in excess of any amounts accrued and could be material to our results of operations, cash flows or financial position in any reporting period. Additionally, guarantees, indemnifications and claims arise during the ordinary course of business from relationships with suppliers, customers and nonconsolidated affiliates when we undertake an obligation to guarantee the performance of others if specified triggering events occur. Nonperformance under a contract could trigger an obligation of the Company. These potential claims include actions based upon alleged exposures to products, real estate, intellectual property such as patents, environmental matters and other indemnifications. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these claims. However, while the ultimate liabilities resulting from such claims may be significant to results of operations in the period recognized, management does not anticipate they will have a material adverse effect on the consolidated financial position or liquidity. As of December 31, 2017, we have accrued our estimate of liability incurred under our indemnification arrangements and guarantees. Litigation Against the Company State of Texas v. Xerox Corporation, Xerox State Healthcare, LLC, and ACS State Healthcare, LLC: On May 9, 2014, the State of Texas, via the Texas Office of Attorney General (the “State”), filed a lawsuit in the 53rd Judicial District Court of Travis County, Texas. The lawsuit alleges that Xerox Corporation, Xerox State Healthcare, LLC and ACS State Healthcare (collectively, the "Xerox Defendants") violated the Texas Medicaid Fraud Prevention Act in the administration of its contract with the Texas Department of Health and Human Services (“HHSC”). The State alleges that the Xerox Defendants made false representations of material facts regarding the processes, procedures, implementation and results regarding the prior authorization of orthodontic claims. The State seeks recovery of amounts paid for orthodontic treatment under the Texas Medicaid program for the period from approximately 2004 to 2012, three times the amount of the payments made as a result of the alleged unlawful acts, civil penalties, pre- and post-judgment interest and all costs and attorneys’ fees. The Xerox Defendants filed their Answer in June, 2014 denying all allegations. A trial date is scheduled for November, 2018. During the first quarter of 2018, the State notified the Xerox Defendants in the litigation discovery process that its claim is in excess of two billion dollars based primarily on the assertion of treble damages and civil penalties per illegal act for almost two hundred thousand purported illegal acts. The Xerox Defendants will forcefully contest this assertion and continue to vigorously defend themselves in this matter. We are not able to determine or predict the ultimate outcome of this proceeding or to estimate any reasonably possible loss or range of losses, if any, in excess of the thirty-eight million dollars we have already accrued. In the course of litigation, we periodically engage in discussions with the State's counsel for possible resolution of the matter. Should developments cause a change in our determination as to an unfavorable outcome, or result in a final adverse judgment or settlement for a significant amount, there could be a material adverse effect on our results of operations, cash flows and financial position in the period in which such change in determination, judgment or settlement occurs. Dennis Nasrawi v. Buck Consultants et al.: On October 8, 2009, plaintiffs filed a lawsuit in the Superior Court of California, Stanislaus County, and on November 24, 2009, the case was removed to the U.S. Court for the Eastern District of California, Fresno Division. Plaintiffs allege actuarial negligence against Buck Consultants, LLC (“Buck”), a wholly-owned subsidiary of Conduent, for the use of faulty actuarial assumptions in connection with the 2007 actuarial valuation for the Stanislaus County Employees Retirement Association (“StanCERA”). Plaintiffs allege that the employer contribution rate adopted by StanCERA based on Buck’s valuation was insufficient to fund the benefits promised by the County. On July 13, 2012, the Court entered its ruling that the plaintiffs lacked standing to sue in a representative capacity on behalf of all plan participants. The Court also ruled that plaintiffs had adequately pleaded their claim that Buck allegedly aided and abetted StanCERA in breaching its fiduciary duty. Plaintiffs then filed their Fifth Amended Complaint and added StanCERA to the litigation. Buck and StanCERA filed demurrers to the amended complaint. On September 13, 2012, the Court sustained both demurrers with prejudice, completely dismissing the matter and barring plaintiffs from refiling their claims. Plaintiffs appealed, and ultimately the California Court of Appeals (Sixth District) reversed the trial court’s ruling and remanded the case back to the trial court. Buck will continue to aggressively defend these lawsuits. We are not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any. Conduent Business Services, LLC v. Cognizant Business Services, LLC: On April 12, 2017, Conduent Business Services LLC (“Conduent”) filed a lawsuit against Cognizant Business Services Corporation (“Cognizant”) in the Supreme Court of New York County, New York. The lawsuit relates to the Amended and Restated Master Outsourcing Services Agreement effective as of October 24, 2012, and the service delivery contracts and work orders thereunder, between Conduent and Cognizant, as amended and supplemented (the “Contract”). The Contract contains certain minimum purchase obligations by Conduent through the date of expiration. The lawsuit alleges that Cognizant committed multiple breaches of the Contract, including Cognizant’s failure to properly perform its obligations as subcontractor to Conduent under Conduent’s contract with the New York Department of Health to provide a Medicaid Management Information Systems (the “NY MMIS Contract”). In the lawsuit, Conduent seeks damages in excess of one hundred fifty million dollars. During the first quarter of 2018, Conduent provided notice to Cognizant that it was terminating the Contract for cause and will be recording in that period certain charges associated with the termination. Cognizant has asserted counterclaims against Conduent in the lawsuit seeking damages in excess of twenty-two million dollars. Conduent has responded to Cognizant’s counterclaims by denying the allegations. Conduent will continue to vigorously defend itself against the counterclaims but we are not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome. Other Matters: On January 5, 2016, the Consumer Financial Protection Bureau (the "CFPB") notified Xerox Education Services, Inc. (XES) that, in accordance with the CFPB’s discretionary Notice and Opportunity to Respond and Advise (NORA) process, the CFPB’s Office of Enforcement is considering recommending that the CFPB take legal action against XES, alleging that XES violated the Consumer Financial Protection Act’s prohibition of unfair practices. Should the CFPB commence an action, it may seek restitution, civil monetary penalties, injunctive relief or other corrective action. The purpose of a NORA letter is to provide a party being investigated an opportunity to present its position to the CFPB before an enforcement action is recommended or commenced. This notice stems from an inquiry that commenced in 2014 when XES received and responded to a Civil Investigative Demand containing a broad request for information. During this process, XES self-disclosed to the Department of Education and the CFPB certain adjustments of which it had become aware that had not been timely made relating to its servicing of a small percentage of third-party student loans under outsourcing arrangements for various financial institutions. The CFPB and the Department of Education, as well as certain states' attorney general offices and other regulatory agencies, began similar reviews. XES has cooperated and continues to fully cooperate with all regulatory agencies, and XES has submitted its NORA response. We cannot provide assurance that the CFPB or another party will not ultimately commence a legal action against XES in this matter nor are we able to predict the likely outcome of the investigations into this matter or reasonably provide an estimate or range of estimate of possible outcome or loss, if any. We could in future periods incur judgments or enter into settlements in connection with this matter and there could be a material adverse effect on our results of operations, cash flows and financial position in the period in which such change in judgment or settlement occurs. Guarantees, Indemnifications and Warranty Liabilities Indemnifications Provided as Part of Contracts and Agreements Acquisitions/Divestitures: We have indemnified, subject to certain deductibles and limits, the purchasers of businesses or divested assets for the occurrence of specified events under certain of our divestiture agreements. In addition, we customarily agree to hold the other party harmless against losses arising from a breach of representations and covenants, including such matters as adequate title to assets sold, intellectual property rights, specified environmental matters and certain income taxes arising prior to the date of acquisition. Where appropriate, an obligation for such indemnifications is recorded as a liability at the time of the acquisition or divestiture. Since the obligated amounts of these types of indemnifications are often not explicitly stated or are contingent on the occurrence of future events, the overall maximum amount of the obligation under such indemnifications cannot be reasonably estimated. Other than obligations recorded as liabilities at the time of divestiture, we have not historically made significant payments for these indemnifications. Additionally, under certain of our acquisition agreements, we have provided for additional consideration to be paid to the sellers if established financial targets are achieved post-closing. We have recognized liabilities for these contingent obligations based on an estimate of the fair value of these contingencies at the time of acquisition. Contingent obligations related to indemnifications arising from our divestitures and contingent consideration provided for by our acquisitions are not expected to be material to our financial position, results of operations or cash flows. Other Agreements: We are also party to the following types of agreements pursuant to which we may be obligated to indemnify the other party with respect to certain matters:
In each of these circumstances, our payment is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract and such procedures also typically allow us to challenge the other party's claims. In the case of lease guarantees, we may contest the liabilities asserted under the lease. Further, our obligations under these agreements and guarantees may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments we made. Also in December 2017, a customer released our former parent company from a performance guarantee for a service contract resulting in a release of escrow funds of $15 million to the Company. Intellectual Property Indemnifications We do not own most of the software that we use to run our business. Instead, we license this software from a small number of primary vendors. We indemnify certain software providers against claims that may arise as a result of our use or our subsidiaries', customers' or resellers' use of their software in our services and solutions. These indemnities usually do not include limits on the claims, provided the claim is made pursuant to the procedures required in the services contract. Indemnification of Officers and Directors Our corporate by-laws require that, except to the extent expressly prohibited by law, we must indemnify our officers and directors against judgments, fines, penalties and amounts paid in settlement and reasonable expenses, including attorneys' fees, incurred in connection with civil or criminal action or proceedings or any appeal, as it relates to their services to our Company and our subsidiaries. Although the by-laws provide no limit on the amount of indemnification, we may have recourse against our insurance carriers for certain payments made by us. However, certain indemnification payments (such as those related to "clawback" provisions in certain compensation arrangements) may not be covered under our directors' and officers' insurance coverage. We also indemnify certain fiduciaries of our employee benefit plans for liabilities incurred in their service as fiduciary whether or not they are officers of the Company. Finally, in connection with our acquisition of businesses, we may become contractually obligated to indemnify certain former and current directors, officers and employees of those businesses in accordance with pre-acquisition by-laws or indemnification agreements or applicable state law. Other Contingencies Certain contracts, primarily in our Public Sector segment, require us to provide a surety bond or a letter of credit as a guarantee of performance. As of December 31, 2017, we had $576 million for outstanding surety and bid bonds used to secure our performance of contractual obligations with our clients, and we had $256 million of outstanding letters of credit issued to secure our performance of contractual obligations to our clients as well as other corporate obligations. In general, we would only be liable for the amount of these guarantees in the event of default in our performance of our obligations under each contract. We believe we have sufficient capacity in the surety markets and liquidity from our cash flow and our various credit arrangements (including our Credit Facility) to allow us to respond to future requests for proposals that require such credit support. We have service arrangements where we service third-party student loans in the Federal Family Education Loan program (FFEL) on behalf of various financial institutions. We service these loans for investors under outsourcing arrangements and do not acquire any servicing rights that are transferable by us to a third-party. At December 31, 2017, we serviced a FFEL portfolio of loans with an outstanding principal balance of approximately $5.2 billion. Some servicing agreements contain provisions that, under certain circumstances, require us to purchase the loans from the investor if the loan guaranty has been permanently terminated as a result of a loan default caused by our servicing error. If defaults caused by us are cured during an initial period, any obligation we may have to purchase these loans expires. Loans that we purchase may be subsequently cured, the guaranty reinstated and the loans repackaged for sale to third parties. We evaluate our exposure under our purchase obligations on defaulted loans and establish a reserve for potential losses. The reserve is evaluated periodically and adjusted based upon management’s analysis of the historical performance of the defaulted loans. As of December 31, 2017, other current liabilities include reserves of approximately $1 million, which we believe to be adequate. In addition to potential purchase obligations arising from servicing errors, various laws and regulations applicable to student loan borrowers could give rise to fines, penalties and other liabilities associated with loan servicing errors. |
Preferred Stock |
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Equity [Abstract] | |
Preferred Stock | Preferred Stock Series A Preferred Stock In connection with the December 31, 2016 spin-off from Xerox Corporation, we issued 120 thousand shares of Series A convertible perpetual preferred stock with an aggregate liquidation preference of $120 million and an initial fair value of $142 million. The convertible preferred stock pays quarterly cash dividends at a rate of 8% per year ($9.6 million per year). Each share of convertible preferred stock is convertible at any time, at the option of the holder, into 44.9438 shares of common stock for a total of 5,393 thousand shares (reflecting an initial conversion price of approximately $22.250 per share of common stock), subject to customary anti-dilution adjustments. If the closing price of our common stock exceeds 137% of the initial conversion price for 20 out of 30 trading days, we have the right to cause any or all of the convertible preferred stock to be converted into shares of common stock at the then applicable conversion rate. The convertible preferred stock is also convertible, at the option of the holder, upon a change in control, at the applicable conversion rate plus an additional number of shares determined by reference to the price paid for our common stock upon such change in control. In addition, upon the occurrence of certain fundamental change events, including a change in control or the delisting of Conduent's common stock, the holder of convertible preferred stock has the right to require us to redeem any or all of the convertible preferred stock in cash at a redemption price per share equal to the liquidation preference and any accrued and unpaid dividends to, but not including, the redemption date. As a result of the contingent redemption feature, the convertible preferred stock is classified as temporary equity and reflected separately from permanent equity in the Consolidated Balance Sheets. |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity Preferred Stock As of December 31, 2017, we had one class of preferred stock outstanding. See Note 14 – Preferred Stock for further information. We are authorized to issue approximately 100 million shares of cumulative preferred stock at $0.01 par value per share. Common Stock We have 1 billion authorized shares of common stock at $0.01 par value per share. At December 31, 2017, 15 million shares were reserved for issuance under our incentive compensation plans and 5.4 million shares were reserved for conversion of the Series A convertible preferred stock. Stock Compensation Plans Certain of our employees participate in a long-term incentive plan. Our long-term incentive plan authorizes the issuance of restricted stock units / shares (RSU), performance stock units / share (PSU) and non-qualified stock options to employees. All awards for these plans prior to 2017, were made in Xerox stock and therefore converted into Conduent stock effective upon the Separation. Using a formula designed to preserve the value of the award immediately prior to the Separation, all of these awards will be settled and are reflected in Conduent's Consolidated Statements of Stockholders' Equity. Stock-based compensation expense includes expense based on the awards and terms previously granted to the employees. Stock-based compensation expense was as follows:
Restricted Stock Units / Shares Compensation expense is based upon the grant date market price. The compensation expense is recorded over the vesting period, which is normally three years from the date of grant, based on management's estimate of the number of shares expected to vest. Performance Stock Units / Shares: The Company granted PSUs that vest contingent upon its achievement of certain specified financial performance criteria over a three-year period. If the three-year actual results exceed the stated targets, then the plan participants have the potential to earn additional shares of common stock, which cannot exceed 100% of the original grant. The fair value of PSUs is based upon the market price of Conduent's common stock on the date of the grant and then converted to Conduent's common stock upon the Separation. Compensation expense is recognized over the vesting period, which is normally three years from the date of grant, based on management's estimate of the number of shares expected to vest. If the stated targets are not met, any recognized compensation cost would be reversed. Employee Stock Options: Stock options were issued by a former parent company and were converted to Conduent's common stock upon the Separation. These options generally expire within the next two years. Other than these options, Conduent has not issued any new stock options. Summary of Stock-based Compensation Activity
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The Company issued 77 thousand Deferred Stock Units (DSU) to non-employee members of the Board of Directors. These DSUs are fully vested and will be issued when the directors leave the Board. The Company has 348 thousand stock options outstanding as of December 31, 2017 at strike prices ranging from $10.15 to $11.38. These stock options are fully vested and exercisable. The total unrecognized compensation cost related to non-vested stock-based awards at December 31, 2017 was as follows (in millions):
The aggregate intrinsic value of outstanding RSUs and PSs awards was as follows (in millions):
Information related to stock options outstanding and exercisable at December 31, 2017 was as follows:
The total intrinsic value and actual tax benefit realized for vested and exercised stock-based awards were as follows:
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Other Comprehensive (Loss) Income |
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Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive (Loss) Income | Other Comprehensive Income (Loss) Other Comprehensive Loss is comprised of the following:
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Accumulated Other Comprehensive Loss (AOCL) AOCL is comprised of the following:
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Earnings per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share We did not declare any common stock dividends in the periods presented. The following table sets forth the computation of basic and diluted earnings per share of common stock:
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Related Party and Former Parent Investment (Notes) |
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Related Party Transactions Disclosure [Text Block] | Related Party Transactions and Former Parent Company Investment Allocation of Corporate Expenses The Consolidated Statements of Income (Loss), Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Cash Flows for the years ended December 31, 2016 and 2015 include an allocation of general corporate expenses from Xerox, the Company's former parent. The financial information in these Consolidated Financial Statements does not necessarily include all the expenses that would have been incurred or held had we been a separate, standalone company and it is not practicable to estimate actual costs that would have been incurred had we been a separate, standalone company during the periods presented. Management considers these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided. Allocations for management costs and corporate support services provided totaled $165 million and $170 million for the years ended December 31, 2016 and 2015, respectively. These amounts include costs for corporate functions including, but not limited to, senior management, legal, human resources, finance and accounting, treasury, information technology and other shared services. Where possible, these costs were allocated based on direct usage, with the remainder allocated on a basis of costs, headcount and/or other measures we have determined as reasonable.
Final Cash Allocation To Former Parent In January 2017, in connection with the Separation, we paid Xerox $161 million for settlement of the management and support services received. The components of Net transfers to former parent and the reconciliation to the corresponding amount presented on the Consolidated Statements of Cash Flows are as follows:
Related Party Notes Receivable/Payable Certain operating units of the Company had various interest bearing notes under contractual agreements to and from Xerox Corporation and other related parties. The purpose of these notes was to provide funds for certain working capital or other capital and operating requirements of the business. Net interest expense on these notes with related party companies was recorded net in Related Party Interest in the Consolidated Statements of Income (Loss) and was $26 million and $61 million for the years ended December 31, 2016 and 2015, respectively. These notes had fixed interest rates that ranged from 1% to 8%. The balances were settled as part of the Separation transaction. Related Party Revenue and Purchases We provide various services to Xerox Corporation, including those related to human resources, accounting and finance and customer care, which are reported as Related party revenue in the Consolidated Statements of Income (Loss). The costs related to these services are reported as Related party cost of services in the Consolidated Statements of Income (Loss). We also leased equipment and received related services, supplies and parts, from Xerox and Xerox subsidiaries in the amount of $21 million and $24 million, for the years ended December 31, 2016 and 2015, respectively. The costs related to these services, supplies and parts are reported in Cost of services and Selling, administrative and general expenses in the Consolidated Statements of Income (Loss). |
Subsequent Event Subsequent Event |
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Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In the first quarter of 2018, the Company will be moving the Health Enterprise business from the Other segment into the Public Sector segment. In addition, the Company plans to move the divested businesses' historical results to Other segment from both the Commercial Industries and the Public Sector segments. See Note 13 – Contingencies and Litigation as it relates to the termination of the Cognizant agreement. |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Basis of Consolidation | Basis of Presentation Our Consolidated Financial Statements included the historical basis of assets, liabilities, revenues and expenses of the individual businesses of the Company, including joint ventures and partnerships over which the Company has a controlling financial interest. We have prepared the Consolidated Financial Statements pursuant to the rules and regulations of the SEC. Certain reclassifications have been made to prior years to conform to the current year presentation. All intercompany transactions and balances have been eliminated. We have also considered the impact of subsequent events on these consolidated financial statements. Separation from Xerox Corporation On December 31, 2016, Conduent spun-off from Xerox Corporation (Xerox), pursuant to the Separation and Distribution Agreement (Separation). The Separation was completed by way of a pro rata distribution of Conduent shares held by Xerox to Xerox’s shareholders. As a result, we operate as an independent, publicly traded company on the New York Stock Exchange, under the ticker "CNDT". Prior to December 31, 2016, the Financial Statements of the Company were derived from the financial statements and accounting records of Xerox as if the Conduent operated on a standalone basis. Historically, the Company consisted of the Business Process Outsourcing Operating segment within Xerox’s reportable Services segment and did not operate as a separate, standalone company. Accordingly, Xerox performed certain corporate overhead functions for the Company. Therefore, certain corporate costs, including compensation costs for corporate employees supporting the Company, were allocated from Xerox. It is not practicable to estimate actual costs that would have been incurred had the Company been a separate standalone company during the periods presented. Allocations for management costs and corporate support services provided to the Company totaled $165 million and $170 million for years ended December 31, 2016 and December 31, 2015, respectively. Management of the Company believes the assumptions regarding the allocated expenses reasonably reflect the utilization of services provided to or the benefit received by the Company during the periods prior to the Separation. The Consolidated Financial Statements for the periods prior to the Separation do not necessarily include all the expenses that would have been incurred or held by the Company had it been a separate, standalone company. |
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Use of Estimates | Use of Estimates We prepared the Consolidated Financial Statements using financial information available at the time of preparation, which requires us to make estimates and assumptions that affect the amounts reported. Our most significant estimates pertain to the recognition of revenue for contracts based on the percentage of completion method of accounting, intangible and long-lived assets, valuation of goodwill, contingencies and litigation, income taxes and corporate allocations (for years ended December 31, 2016 and 2015). Our estimates are based on management's best knowledge of current events, historical experience, and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. |
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Revenue Recognition, Customer Acquisitions | Revenue Recognition: In May 2014, the Financial Accounting Standards Board (FASB) updated the accounting guidance related to revenue recognition to clarify the principles for recognizing revenue and replaced all existing revenue recognition guidance in U.S. GAAP with one accounting model. The core principle of the guidance is that an entity should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated guidance also requires additional qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers largely on a disaggregated basis. We have evaluated the adoption impact of the updated accounting guidance on our consolidated financial statements and continue to evaluate the impact on disclosures and internal controls. The new guidance will impact: (1) revenue associated with postage, which will be recognized on a net basis versus the current gross treatment; (2) the timing of revenue recognition associated with fixed fees for certain contracts with more than one performance obligation; and (3) the timing of recognition of certain pricing discounts. We adopted this updated accounting guidance beginning January 1, 2018 using the modified retrospective method under which we will recognize a cumulative-effect adjustment of approximately $20 million at the date of adoption (the expected impact to 2018 revenues is approximately $15 million), which excludes changes to our revenue associated with the reimbursement of postage. In addition, we recognized approximately $150 million of postage revenue in 2017 that will be recognized on a net basis (for all future periods) in Cost of services. |
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New Accounting Pronouncements, Policy | New Accounting Standards Revenue Recognition: In May 2014, the Financial Accounting Standards Board (FASB) updated the accounting guidance related to revenue recognition to clarify the principles for recognizing revenue and replaced all existing revenue recognition guidance in U.S. GAAP with one accounting model. The core principle of the guidance is that an entity should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated guidance also requires additional qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers largely on a disaggregated basis. We have evaluated the adoption impact of the updated accounting guidance on our consolidated financial statements and continue to evaluate the impact on disclosures and internal controls. The new guidance will impact: (1) revenue associated with postage, which will be recognized on a net basis versus the current gross treatment; (2) the timing of revenue recognition associated with fixed fees for certain contracts with more than one performance obligation; and (3) the timing of recognition of certain pricing discounts. We adopted this updated accounting guidance beginning January 1, 2018 using the modified retrospective method under which we will recognize a cumulative-effect adjustment of approximately $20 million at the date of adoption (the expected impact to 2018 revenues is approximately $15 million), which excludes changes to our revenue associated with the reimbursement of postage. In addition, we recognized approximately $150 million of postage revenue in 2017 that will be recognized on a net basis (for all future periods) in Cost of services. Leases: In February 2016, the FASB updated the accounting guidance related to leases requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases except short term leases (lease term of 12 months or less). The accounting for lessors is largely unchanged. This updated guidance is effective for us beginning January 1, 2019. This guidance must be adopted using a modified retrospective approach through a cumulative-effect adjustment for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. While we are currently evaluating the impact of the updated accounting guidance on our consolidated financial statements; we do expect a material impact to the Company's Consolidated Balance Sheets. Cash Flows: In November 2016 the FASB issued updated accounting guidance regarding the presentation of restricted cash in the statement of cash flows. Specifically, this update requires that restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. At December 31, 2017 and 2016, we had $9 million and $22 million of restricted cash, respectively, reported in other current assets. This update is effective for us beginning January 1, 2018. Business Combinations: In January 2017, the FASB issued clarifying accounting guidance related to the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This update is effective for us beginning January 1, 2018, with early adoption permitted. The amendment in this update will be applied prospectively. There will be no material impact from the adoption of this clarifying accounting guidance on our consolidated financial statements. Recently Adopted Accounting Standards Goodwill: In January 2017, the FASB issued updated accounting guidance for simplifying the goodwill impairment test. Under the new guidance, an entity does not have to calculate the implied fair value of goodwill at the impairment testing date of its assets and liabilities as if those assets and liabilities had been acquired in a business combination. Instead the goodwill impairment test will compare the fair value of a reporting unit with its carrying amount and recognize as an impairment charge any amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. We have elected to early adopt this new guidance for our goodwill impairment tests performed after January 1, 2017. Adoption did not have any effect on our financial condition, results of operations or cash flows. |
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Revenue Recognition | Revenue Recognition We primarily generate revenue through services. Revenue is recognized when it is realized or realizable and earned. We consider revenue realized or realizable and earned when we have persuasive evidence of an arrangement, delivery has occurred, the transaction price is fixed or determinable and collectibility is reasonably assured. Delivery does not occur until services have been provided to the customer, risk of loss has transferred to the customer, and either customer acceptance has been obtained, customer acceptance provisions have lapsed or the company has objective evidence that the criteria specified in the customer acceptance provisions have been satisfied. The transaction price is not considered to be fixed or determinable until all contingencies related to the sale have been resolved. |
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Services-Related Revenue | Outsourcing Services: Revenues associated with outsourcing services are generally recognized as services are rendered, which is generally on the basis of the number of accounts or transactions processed. In service arrangements where final acceptance of a system or solution by the customer is required, revenue is deferred until all acceptance criteria have been met. Revenues on cost reimbursable contracts are recognized by applying an estimated factor to costs as incurred, determined by the contract provisions and prior experience. Revenues on unit-price contracts are recognized at the contractual selling prices as work is completed and accepted by the customer. Revenues on time and material contracts are recognized at the contractual rates as the labor hours and direct expenses are incurred. Revenues on certain fixed price contracts where we provide system development and implementation services are recognized over the contract term based on the percentage of development and implementation services that are provided during the period compared with the total estimated development and implementation services to be provided over the entire contract using the percentage-of-completion accounting methodology. These services require that we perform significant, extensive and complex design, development, modification or implementation of our customers' systems. Performance will often extend over long periods, and our right to receive future payment depends on our future performance in accordance with the agreement. The percentage-of-completion methodology involves recognizing probable and reasonably estimable revenue using the percentage of services completed, on a current cumulative cost to an estimated total cost basis, using a reasonably consistent profit margin over the period. Revenues earned in excess of related billings are accrued, whereas billings in excess of revenues earned are deferred until the related services are provided. We recognize revenues for non-refundable, upfront implementation fees on a straight-line basis over the period between the initiation of the services through the end of the contract term. In connection with our services arrangements, we incur and capitalize costs to originate these long-term contracts and to perform the migration, transition and setup activities necessary to enable us to perform under the terms of the arrangement. Certain initial direct costs of an arrangement are capitalized and amortized over the contractual service period of the arrangement to cost of services. From time to time, we also provide inducements to customers in various forms, including contractual credits, which are capitalized and amortized as a reduction of revenue over the term of the contract. Spending associated with customer-related deferred set-up/transition and inducement costs were as follows:
The capitalized amount of customer contract costs were as follows:
__________ (1) The balance at December 31, 2017 and 2016 are expected to be amortized over a weighted average period of approximately nine and eight years, respectively. Amortization expense for the next five years and thereafter is expected to be as follows (in millions):
Long-lived assets used in the fulfillment of the arrangements are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract specific. |
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Multiple Element Arrangements | Multiple Element Arrangements: As described above, we enter into the following revenue arrangements that may consist of multiple deliverables including contracts for multiple types of outsourcing services, as well as professional and value-added services. For instance, we may contract for an implementation or development project and also provide services to operate the system which we implement or develop over a period of time; or we may contract to scan, manage and store customer documents. In substantially all of our multiple element arrangements, we are able to separate the deliverables since we normally will meet both of the following criteria:
Consideration in a multiple-element arrangement is allocated at the inception of the arrangement to all deliverables on the basis of the relative selling price. When applying the relative selling price method, the selling price for each deliverable is primarily determined based on vendor-specific objective evidence (VSOE), third-party evidence (TPE), or our best estimate of the selling price. The above noted revenue policies are then applied to each separated deliverable, as applicable. Revenue Reporting: Revenue from sales of third-party vendor products or services is recorded net of costs when the Company is acting as an agent between the customer and the vendor or supplier, or gross when the Company is a principal to the transaction. Postage is generally recognized on a gross basis. Several factors are considered to determine whether the company is an agent or principal, most notably whether the Company is the primary obligor to the customer, or has inventory risk. Consideration is also given to whether the Company adds meaningful value to the vendor’s product or service, was involved in the selection of the vendor’s product or service, has latitude in establishing the sales price or has credit risk. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, including money market funds and investments with original maturities of three months or less. |
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Receivable Sales | Receivable Sales We had transferred certain portions of our receivable portfolios in 2016 and 2015 and accounted for those transfers as sales based on meeting the criteria for derecognition. Losses on the sale of receivables depend, in part, on both (a) the cash proceeds and (b) the net non-cash proceeds received or paid. When we have sold receivables, we normally received beneficial interests in the transferred receivables from the purchasers as part of the proceeds. Refer to Note 4 – Accounts Receivable, Net for more details on our receivable sales. |
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Transfers and Servicing of Financial Assets, Transfers of Financial Assets, Sales, Policy | Receivable Sales We had transferred certain portions of our receivable portfolios in 2016 and 2015 and accounted for those transfers as sales based on meeting the criteria for derecognition. Losses on the sale of receivables depend, in part, on both (a) the cash proceeds and (b) the net non-cash proceeds received or paid. When we have sold receivables, we normally received beneficial interests in the transferred receivables from the purchasers as part of the proceeds. Refer to Note 4 – Accounts Receivable, Net for more details on our receivable sales. |
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Land, Buildings and Equipment and Equipment on Operating Leases | Land, Buildings and Equipment Land, buildings and equipment are recorded at cost. Buildings and equipment are depreciated over their estimated useful lives. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life. Significant improvements are capitalized and maintenance and repairs are expensed when incurred. Refer to Note 5 – Land, Buildings, Equipment and Software, Net for further discussion. |
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Software - Internal Use and Product | Software - Internal Use and Product Internal Use: We capitalize direct costs associated with developing, purchasing or otherwise acquiring software for internal use and amortize these costs on a straight-line basis over the expected useful life of the software, beginning when the software is implemented (Internal Use Software). Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Amounts expended for Internal Use Software are included in Cash Flows from Investing. Product: We also capitalize certain costs related to the development of software solutions to be sold to our customers upon reaching technological feasibility (Product Software). These costs are amortized on a straight-line basis over the estimated economic life of the software. Amounts expended for Product Software are included in Cash Flows from Operations. We perform periodic reviews to ensure that unamortized Product Software costs remain recoverable from estimated future operating profits (net realizable value or NRV). Costs to support or service licensed software are charged to Costs of outsourcing as incurred. |
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Capitalization of Internal Costs | Software - Internal Use and Product Internal Use: We capitalize direct costs associated with developing, purchasing or otherwise acquiring software for internal use and amortize these costs on a straight-line basis over the expected useful life of the software, beginning when the software is implemented (Internal Use Software). Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Amounts expended for Internal Use Software are included in Cash Flows from Investing. Product: We also capitalize certain costs related to the development of software solutions to be sold to our customers upon reaching technological feasibility (Product Software). These costs are amortized on a straight-line basis over the estimated economic life of the software. Amounts expended for Product Software are included in Cash Flows from Operations. We perform periodic reviews to ensure that unamortized Product Software costs remain recoverable from estimated future operating profits (net realizable value or NRV). Costs to support or service licensed software are charged to Costs of outsourcing as incurred. |
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Goodwill and Other Intangible Assets | Goodwill For acquired businesses, the Company records the acquired assets and assumed liabilities based on their relative fair values at the date of acquisitions (commonly referred to as the purchase price allocation). Goodwill represents the excess of the purchase price paid in excess of the fair value of net tangible and intangible assets acquired. For the Company’s business acquisitions, the purchase price is allocated to identifiable intangible assets separate from goodwill if they are from contractual or other legal rights, or if they could be separated from the acquired business and sold, transferred, licensed, rented or exchanged. We test goodwill for impairment annually or more frequent if an event or change in circumstances indicate the asset may be impaired. Impairment testing for goodwill is done at the reporting unit level. We determined the fair value of our reporting units utilizing a combination of both an Income Approach and a Market Approach. The Income Approach utilizes a discounted cash flow analysis based upon the forecasted future business results of our reporting units. The Market Approach utilizes the guideline public company method. If the fair value of a reporting unit is less than its carrying amount, an impairment charge would be recognized for amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Refer to Note 6 – Goodwill and Intangible Assets, Net for further information. Other Intangible Assets Other intangible assets primarily consist of assets acquired through business combinations, including installed customer base and distribution network relationships, patents and trademarks. Other intangible assets are amortized on a straight-line basis over their estimated economic lives unless impairment is identified. Refer to Note 6 – Goodwill and Intangible Assets, Net for further information. Impairment of Long-Lived Assets We review the recoverability of our long-lived assets, including buildings, equipment, internal use software, product software and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on forecasted cash flows. |
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Pension and Post-Retirement Benefit Obligations | Pension Obligations We sponsor various forms of defined benefit pension plans in several countries covering employees who meet eligibility requirements. Several statistical and other factors that attempt to anticipate future events are used in calculating the expense, liability and asset values related to our pension plans. These factors include assumptions we make about the discount rate, expected return on plan assets, the rate of future compensation increases and mortality rates. The discount rate is used to present value our future anticipated benefit obligations. The discount rate reflects the current rate at which benefit liabilities could be effectively settled considering the timing of expected payments for plan participants. In estimating our discount rate, we consider rates of return on high-quality fixed-income investments adjusted to eliminate the effects of call provisions, as well as the expected timing of pension and other benefit payments. The expected rate of return on plan assets is the long-term rate of return we expect to earn on plan assets. When estimating the expected rate of return, in addition to assessing recent performance, we consider the historical returns earned on plan assets, the rates of return expected in the future, and our investment strategy and asset mix with respect to the plans’ funds. The expected rate of return on plan assets is reviewed annually and revised, as necessary, to reflect changes in financial markets and our investment strategy. Each year, the difference between the actual return on plan assets and the expected return on plan assets, as well as increases or decreases in the benefit obligation as a result of changes in the discount rate and other actuarial assumptions, are added to or subtracted from any cumulative actuarial gain or loss from prior years. This amount is the net actuarial gain or loss recognized in Accumulated other comprehensive loss. We amortize net actuarial gains and losses as a component of net pension cost for a year if, as of the beginning of the year, that net gain or loss (excluding asset gains or losses that have not been recognized in market-related value) exceeds 10% of the greater of the projected benefit obligation or the market-related value of plan assets (the "corridor" method). This determination is made on a plan-by-plan basis. If amortization is required for a particular plan, we amortize the applicable net gain or loss in excess of the 10% threshold on a straight-line basis in net periodic pension cost over the remaining service period of the employees participating in that pension plan. In plans where substantially all participants are inactive, the amortization period for the excess is the average remaining life expectancy of the plan participants. |
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Income Tax, Policy | Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are based on differences between U.S. GAAP reporting and tax bases of assets or liabilities and based on current tax laws, regulations and rates. The recognition of deferred tax assets requires an assessment to determine the realization of such assets. Management establishes valuation allowances on deferred tax assets when it is determined “more-likely-than-not” that some portion or all of the deferred tax assets may not be realized. Management considers positive and negative evidence in evaluating the ability of the Company to realize its deferred tax assets, including its historical results and forecasts of future ability to realize its deferred tax assets, including projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. We are subject to ongoing tax examinations and assessments in various jurisdictions. We have unrecognized tax benefits for uncertain tax positions. We follow U.S. GAAP which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Our ongoing assessments of the more-likely-than-not outcomes of the examinations and related tax positions require judgment and can materially increase or decrease our effective tax rate, as well as impact our operating results. |
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Foreign Currency Transactions and Re-measurement | Foreign Currency Translation and Re-measurement The functional currency for most foreign operations is the local currency. Net assets are translated at current rates of exchange and income, expense and cash flow items are translated at average exchange rates for the applicable period. The translation adjustments are recorded in Accumulated other comprehensive loss. The U.S. Dollar is used as the functional currency for certain foreign subsidiaries that conduct their business in U.S. Dollars. A combination of current and historical exchange rates is used in re-measuring the local currency transactions of these subsidiaries and the resulting exchange adjustments are recorded in Currency (gains) and losses within other expenses, net together with other foreign currency re-measurements. |
Accounts Receivables, Net Accounts Receivable Sales (Policies) |
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Accounts Receivable [Abstract] | |
Receivables Held-for-sale, Determination, Policy [Policy Text Block] | Accounts Receivable Sales Arrangements Prior to 2017, we sold accounts receivables with payment due dates of less than 60 days. Under most of the agreements, we continue to service the sold accounts receivable. When applicable, a servicing liability is recorded for the estimated fair value of the servicing. The amounts associated with the servicing liability were not material. |
Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Schedule of Deferred Customer Contract Costs | Spending associated with customer-related deferred set-up/transition and inducement costs were as follows:
The capitalized amount of customer contract costs were as follows:
__________ (1) The balance at December 31, 2017 and 2016 are expected to be amortized over a weighted average period of approximately nine and eight years, respectively. Amortization expense for the next five years and thereafter is expected to be as follows (in millions):
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Segment Reporting (Tables) |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating segment revenues and profitability | Selected financial information for our reportable segments was as follows:
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Reconciliation to pre-tax income (loss) | The following is a reconciliation of segment profit (loss) profit to pre-tax (loss) income:
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Revenue and long-lived assets by geography | Geographic area data is based upon the location of the subsidiary reporting the revenue or long-lived assets and is as follows for each of the years ended December 31:
________________
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Assets/Liabilities Held for Sale (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information - Discontinued Operations | Summarized financial information for our Discontinued Operations is as follows:
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Discontinued Operations - Income Statement | The following is a summary of selected financial information of the ITO business:
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Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information - Discontinued Operations | The following is a summary of the major categories of assets and liabilities that have been reclassified to held for sale.
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Accounts Receivables, Net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable, net was as follows:
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Schedule Of Accounts Receivable Sales | Accounts receivable sales were as follows:
__________
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Land, Buildings, Equipment and Software, Net (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Land, Buildings, Equipment and Software, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Land, buildings and equipment, net | Land, buildings and equipment, net were as follows:
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Land, Buildings and Equipment Depreciation Expense | Depreciation expense and operating lease rent expense were as follows:
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Schedule of Future Minimum Operating Lease Non-cancelable Payments | Future minimum operating lease commitments that have initial or remaining non-cancelable lease terms in excess of one year at December 31, 2017 were as follows (in millions):
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Additions to Internal Use and Product Software | Additions to Internal Use and Product Software as well as year-end balances for these assets were as follows:
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Capitalized Costs, Internal Use and Product Software |
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Goodwill and Intangible Assets, Net (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table presents the changes in the carrying amount of goodwill, by reportable segment:
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Schedule of Finite-Lived Intangible Assets by Major Class | ntangible assets were comprised of the following:
A |
Restructuring and Asset Impairment Charges (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Program Activity | A summary of our restructuring program activity during the two years ended December 31, 2017 is as follows:
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Total Costs Incurred with Restructuring Programs, by Segment | The following table summarizes the total amount of costs incurred in connection with these restructuring programs by segment:
________________
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Long-term debt was as follows:
____________
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Schedule of Maturities of Long-term Debt | Scheduled principal payments due on our long-term debt for the next five years and thereafter are as follows:
_____________
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Schedule Of Interest Expense And Interest Income | Interest expense and interest income was as follows:
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Financial Instruments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of a Summary of Foreign Exchange Contracts Gross Notional Values | The following is a summary of the primary hedging positions and corresponding fair values as of December 31, 2017:
____________
|
Fair Value of Financial Assets and Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Financial Assets and Liabilities | The following table represents assets and liabilities fair value measured on a recurring basis. The basis for the measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs.
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Schedule of Estimated Fair Values of Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis | The estimated fair values of our other financial assets and liabilities fair value measured on a nonrecurring basis were as follows:
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Employee Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Funded Status | December 31 is the measurement date for all of our defined benefit pension plans.
_______________
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Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year | Benefit plans pre-tax amounts recognized in Accumulated other comprehensive loss (AOCL) at December 31:
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Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets | Aggregate information for pension plans with an Accumulated benefit obligation in excess of plan assets is presented below:
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Schedule of Defined Benefit Pension Assets and Obligations by Geography | Our pension plan assets and benefit obligations at December 31, 2017 were as follows:
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Schedule of Components of Net Periodic Benefit Cost and Other Changes in Plan Assets and Benefit Obligations | The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows:
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Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables presents the defined benefit plans assets measured at fair value and the basis for that measurement:
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Schedule of Allocation of Plan Assets | The target asset allocations for our worldwide defined benefit pension plans were:
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Schedule of Expected Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the following years:
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Schedule of Assumptions Used | Weighted-average assumptions used to determine benefit obligations at the plan measurement dates:
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
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Income and Other Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | ncome before income taxes (pre-tax (loss) income) was as follows:
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Schedule of Components of Income Tax Expense (Benefit) | (Benefit) provision for income taxes were as follows:
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Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate is as follows:
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Schedule of Allocation of Income Tax Expense Benefit | Total income tax expense (benefit) was allocated as follows:
_____________
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Summary of Income Tax Contingencies | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
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Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows:
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Shareholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Expense, Tax Effect | Stock-based compensation expense was as follows:
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Schedule of Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | Summary of Stock-based Compensation Activity
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Schedule of Unrecognized Compensation Cost, Nonvested Awards | The total unrecognized compensation cost related to non-vested stock-based awards at December 31, 2017 was as follows (in millions):
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Schedule of Aggregate intrinsic value restricted stock and performance shares compensation awards | The aggregate intrinsic value of outstanding RSUs and PSs awards was as follows (in millions):
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Schedule of Stock options outstanding and exercisable | Information related to stock options outstanding and exercisable at December 31, 2017 was as follows:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Vested and exercised stock based awards total intrinsic value and tax benefit realized | The total intrinsic value and actual tax benefit realized for vested and exercised stock-based awards were as follows:
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Other Comprehensive (Loss) Income (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | Other Comprehensive Loss is comprised of the following:
_____________________________
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Schedule of Accumulated Other Comprehensive Income (Loss) | AOCL is comprised of the following:
_____________________________
|
Earnings per Share (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted earnings per share of common stock:
|
Related Party and Former Parent Investment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of related party expenses [Table Text Block] | Where possible, these costs were allocated based on direct usage, with the remainder allocated on a basis of costs, headcount and/or other measures we have determined as reasonable.
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Schedule of Related Party Transactions [Table Text Block] | The components of Net transfers to former parent and the reconciliation to the corresponding amount presented on the Consolidated Statements of Cash Flows are as follows:
|
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Restricted Cash, Current | $ 9 | $ 22 | ||
Corporate allocations | 165 | $ 170 | ||
Customer-related deferred set-up transition and inducement costs | 55 | 63 | $ 65 | |
Deferred set-up costs, current | 126 | 137 | ||
Amortization of Customer Contract Costs CY Plus 1 | 54 | |||
Amortization of Customer Contract Costs CY Plus 2 | 22 | |||
Amortization of Customer Contract Costs CY Plus 3 | 13 | |||
Amortization of Customer Contract Costs CY Plus 4 | 9 | |||
Amortization of Customer Contract Costs CY Plus 5 | 6 | |||
Amortization of Customer Contract Costs CY Plus 6 and Beyond | 22 | |||
Assets held for sale | 757 | 0 | ||
Liabilities held for sale | $ 169 | $ 0 | ||
Continuing Operations [Member] | ||||
Weighted average life, services revenue, deferred set-up costs | 9 years | 8 years |
Segment Reporting - Reconciliation Of Operating Profit (Loss) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Reconciling items: | ||||
Total Segment Profit (Loss) | $ 417 | $ 196 | $ (63) | |
Goodwill, Impairment Loss | $ 935 | 0 | 935 | 0 |
Amortization of intangible assets | 243 | 280 | 250 | |
Restructuring and related costs | 101 | 101 | 159 | |
Interest expense | 137 | 14 | 8 | |
Related party interest | 0 | 26 | 61 | |
Separation costs | 12 | 44 | 0 | |
(Gain) loss on sale of asset and businesses | (42) | 2 | 0 | |
Business transformation costs | 0 | 3 | 3 | |
Other (income) expenses, net | (18) | 18 | 30 | |
Total Segment Profit (Loss) | $ (16) | $ (1,227) | $ (574) |
Segment Reporting - Revenue and Long-lived Assets by Geography (Details) - USD ($) $ in Millions |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
||||
Segment Reporting Information [Line Items] | ||||||
Total Revenues | $ 6,022 | $ 6,408 | $ 6,662 | |||
Long-Lived Assets | [1] | 385 | 436 | |||
United States | ||||||
Segment Reporting Information [Line Items] | ||||||
Total Revenues | 5,303 | 5,686 | 5,849 | |||
Long-Lived Assets | [1] | 289 | 325 | |||
Europe | ||||||
Segment Reporting Information [Line Items] | ||||||
Total Revenues | 538 | 547 | 616 | |||
Long-Lived Assets | [1] | 42 | 47 | |||
Other areas | ||||||
Segment Reporting Information [Line Items] | ||||||
Total Revenues | 181 | 175 | $ 197 | |||
Long-Lived Assets | [1] | $ 54 | $ 64 | |||
|
Assets/Liabilities Held for Sale Divestitures Balance Sheet Accounts (Details) - USD ($) $ in Millions |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Accounts receivable, net | $ 1,104 | $ 1,286 | |
Other current assets | 180 | 241 | |
Land, buildings and equipment, net | 257 | 283 | |
Intangible assets, net | 891 | 1,144 | |
Goodwill | 3,366 | 3,889 | $ 4,872 |
Assets held for sale | 757 | 0 | |
Accounts payable | 138 | 164 | |
Unearned income | 151 | 206 | |
Other current liabilities | 493 | 611 | |
Deferred taxes | 384 | $ 619 | |
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | |||
Accounts receivable, net | 160 | ||
Other current assets | 41 | ||
Land, buildings and equipment, net | 6 | ||
Product Software, net | 3 | ||
Intangible assets, net | 7 | ||
Goodwill | 537 | ||
Other long-term assets | 3 | ||
Assets held for sale | 757 | ||
Accounts payable | 9 | ||
Accrued compensation | 20 | ||
Unearned income | 30 | ||
Other current liabilities | 53 | ||
Pension and other benefit obligations | 50 | ||
Other long-term liabilities | 7 | ||
Total Liabilities held for sale | $ 169 |
Accounts Receivable, Net (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Accounts Receivable, Net, Current | $ 1,104 | $ 1,286 | |||
Billable contracts receivable to be invoiced in the subsequent month | 364 | 429 | |||
Accounts receivable sales | 0 | 250 | $ 325 | ||
Accounts Receivable [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Amounts billed or billable | 919 | 1,014 | |||
Unbilled contract receivables | 187 | 279 | |||
Allowance for doubtful accounts | (2) | (7) | |||
Estimated increase (decrease) to operating cash flows | [1] | $ 0 | $ (136) | $ 58 | |
|
Land, Buildings, Equipment and Software, Net (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Property, Plant, Equipment and Software [Line Items] | ||
Land, buildings and equipment, gross | $ 1,076 | $ 1,040 |
Accumulated depreciation | (819) | (757) |
Land, Buildings and Equipment, Net | 257 | 283 |
Land [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Land | 3 | 10 |
Building and building equipment [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Buildings and Improvements, Gross | 17 | 20 |
Leasehold Improvements [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Leasehold Improvements, Gross | 247 | 236 |
Office furniture and equipment [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Furniture and Fixtures, Gross | 784 | 719 |
Other [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Other Land, Building, Equipment and Software | 1 | 1 |
Construction in progress [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Construction in Progress, Gross | $ 24 | $ 54 |
Minimum [Member] | Building and building equipment [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Property, Plant and Equipment, Useful Life | 25 years | |
Minimum [Member] | Office furniture and equipment [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Minimum [Member] | Other [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Property, Plant and Equipment, Useful Life | 4 years | |
Maximum [Member] | Building and building equipment [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Property, Plant and Equipment, Useful Life | 50 years | |
Maximum [Member] | Office furniture and equipment [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Property, Plant and Equipment, Useful Life | 15 years | |
Maximum [Member] | Other [Member] | ||
Property, Plant, Equipment and Software [Line Items] | ||
Property, Plant and Equipment, Useful Life | 20 years |
Land, Buildings, Equipment and Software, Net - Depreciation Expense, Operating Lease Rent Expense, Minimum Operating Lease Commitments (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Land, Buildings, Equipment and Software, Net [Abstract] | |||
Depreciation expense | $ 125 | $ 130 | $ 126 |
Operating lease rent expense | 375 | 378 | 389 |
Capital Leased Property Plant and Equipment Net Book Value | 32 | 42 | |
Amortization of Internal Use Software | 36 | 39 | 27 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Operating Leases, Future Minimum Payments Receivable, Current | 163 | ||
Operating Leases, Future Minimum Payments Receivable, in Two Years | 119 | ||
Operating Leases, Future Minimum Payments Receivable, in Three Years | 80 | ||
Operating Leases, Future Minimum Payments Receivable, in Four Years | 53 | ||
Operating Leases, Future Minimum Payments Receivable, in Five Years | 31 | ||
Operating Leases, Future Minimum Payments Receivable, Thereafter | 52 | ||
Capitalized Computer Software, Additions | $ 10 | $ 10 | $ 19 |
Land, Buildings, Equipment and Software, Net - Internal Use Software (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Property, Plant, Equipment and Software [Line Items] | |||
Product software | $ 10 | $ 10 | $ 19 |
Internal use software | 106 | 115 | |
Product software | $ 22 | 38 | |
Internal Use and Product Software, Useful Lives Minimum | 1 year | ||
Internal Use and Product Software, Useful Lives Maximum | 7 years | ||
Increase (decrease) in restructuring liabilities | $ 34 | 27 | 140 |
Government services [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Product software | 2 | 3 | |
Software Implementation Charge - Cost of Goods Sold | $ 28 | 14 | |
Capitalized Computer Software, Impairments | 160 | ||
Increase (decrease) in restructuring liabilities | $ 9 | $ 146 |
Goodwill and Intangible Assets, Net - Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Goodwill [Roll Forward] | ||||
Beginning Balance, Goodwill | $ 3,889 | $ 4,872 | ||
Foreign currency translation | 47 | (44) | ||
Goodwill, disposal during year | (33) | |||
Goodwill, Impairment Loss | $ (935) | 0 | (935) | $ 0 |
Ending Balance, Goodwill | 3,889 | 3,366 | 3,889 | 4,872 |
Commercial Industries segment [Member] | ||||
Goodwill [Roll Forward] | ||||
Beginning Balance, Goodwill | 1,504 | 2,467 | ||
Foreign currency translation | 19 | (24) | ||
Goodwill, disposal during year | (19) | |||
Goodwill, Impairment Loss | (935) | |||
Ending Balance, Goodwill | 1,504 | 1,399 | 1,504 | 2,467 |
Public Sector [Member] | ||||
Goodwill [Roll Forward] | ||||
Beginning Balance, Goodwill | 2,385 | 2,405 | ||
Foreign currency translation | 28 | (20) | ||
Goodwill, disposal during year | (14) | |||
Goodwill, Impairment Loss | 0 | |||
Ending Balance, Goodwill | $ 2,385 | 1,967 | 2,385 | $ 2,405 |
RSA Medical LLC [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill acquired during period | (2) | |||
RSA Medical LLC [Member] | Commercial Industries segment [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill acquired during period | (2) | |||
RSA Medical LLC [Member] | Public Sector [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill acquired during period | 0 | |||
Nuova Karel Solutions [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill, disposal during year | (2) | |||
Nuova Karel Solutions [Member] | Commercial Industries segment [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill, disposal during year | (2) | |||
Nuova Karel Solutions [Member] | Public Sector [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill, disposal during year | $ 0 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill held for sale | (537) | |||
Ending Balance, Goodwill | 537 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Commercial Industries segment [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill held for sale | (105) | |||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Public Sector [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill held for sale | $ (432) |
Goodwill and Intangible Assets, Net - Intangible Assets by Major Class (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 2,918 | $ 2,935 | |
Accumulated Amortization | 2,027 | 1,791 | |
Net Amount | 891 | 1,144 | |
Amortization of Intangible Assets | 243 | 280 | $ 250 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2018 | 241 | ||
2019 | 241 | ||
2020 | 238 | ||
2021 | 134 | ||
2022 | $ 12 | ||
Customer relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Useful Life | 12 years | ||
Gross Carrying Amount | $ 2,907 | 2,924 | |
Accumulated Amortization | 2,022 | 1,788 | |
Net Amount | $ 885 | 1,136 | |
Technology, patents and non-compete [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Useful Life | 4 years | ||
Gross Carrying Amount | $ 11 | 11 | |
Accumulated Amortization | 5 | 3 | |
Net Amount | 6 | $ 8 | |
Commercial Industries segment [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Net Amount | 492 | ||
Public Sector [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Net Amount | $ 399 |
Restructuring and Asset Impairment Charges (Details) - USD ($) $ in Millions |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
||||
Restructuring Cost and Reserve [Line Items] | ||||||
Net current period restructuring charges, continuing operations | $ 92 | $ 73 | $ 159 | |||
Restructuring reserve [Roll Forward] | ||||||
Balance at beginning of period | 21 | 4 | ||||
Restructuring provision | 103 | 86 | ||||
Reversals of prior accruals | (11) | (13) | ||||
Restructuring liabilities held for sale | (4) | |||||
Total Net Current Period Charges | 92 | 73 | ||||
Charges against reserve and currency | (65) | (56) | ||||
Balance at end of period | 44 | 21 | 4 | |||
Strategic transformation costs | 9 | 28 | ||||
Commercial Industries [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Net current period restructuring charges, continuing operations | 60 | 57 | 11 | |||
Public Sector [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Net current period restructuring charges, continuing operations | 28 | 12 | 2 | |||
All Other Segments [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Net current period restructuring charges, continuing operations | 4 | 4 | 146 | [1] | ||
Employee Severance [Member] | ||||||
Restructuring reserve [Roll Forward] | ||||||
Balance at beginning of period | 15 | 4 | ||||
Restructuring provision | 49 | 67 | ||||
Reversals of prior accruals | (8) | (13) | ||||
Restructuring liabilities held for sale | 0 | |||||
Total Net Current Period Charges | 41 | 54 | ||||
Charges against reserve and currency | (42) | (43) | ||||
Balance at end of period | 14 | 15 | 4 | |||
Lease Cancellation and Other Costs [Member] | ||||||
Restructuring reserve [Roll Forward] | ||||||
Balance at beginning of period | 5 | 0 | ||||
Restructuring provision | 49 | 7 | ||||
Reversals of prior accruals | (3) | 0 | ||||
Restructuring liabilities held for sale | (4) | |||||
Total Net Current Period Charges | 46 | 7 | ||||
Charges against reserve and currency | (17) | (2) | ||||
Balance at end of period | 30 | 5 | 0 | |||
Asset Impairments [Member] | ||||||
Restructuring reserve [Roll Forward] | ||||||
Balance at beginning of period | 1 | 0 | ||||
Restructuring provision | 5 | 12 | ||||
Reversals of prior accruals | 0 | 0 | ||||
Restructuring liabilities held for sale | 0 | |||||
Total Net Current Period Charges | 5 | 12 | ||||
Charges against reserve and currency | (6) | (11) | ||||
Balance at end of period | $ 0 | $ 1 | $ 0 | |||
|
Debt - Long-term Debt (Details) € in Millions, $ in Millions |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2016
EUR (€)
|
Dec. 31, 2017
USD ($)
|
Dec. 07, 2016
USD ($)
|
||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs and unamortized discounts | $ (56) | $ (56) | |||||||
Less: current maturities | (28) | (82) | |||||||
Total Long-term Debt | 1,913 | 1,979 | |||||||
Long-term debt from continuing operations, maturities, repayments of principal debt in next twelve months | [1] | 82 | |||||||
Long-term Debt from Continuing Operations, Maturities, Repayments of Principal Debt in Year Two | 72 | ||||||||
Long-term Debt from Continuing Operations, Maturities, Repayments of Principal in Year Three | 85 | ||||||||
Long-term Debt from Continuing Operations, Maturities, Repayments of Principal in Year Four | 560 | ||||||||
Long-term Debt from Continuing Operations, Maturities, Repayments of Principal in Year Five | 9 | ||||||||
Long-term Debt from Continuing Operations, Maturities, Repayments of Principal after Year Five | 1,309 | ||||||||
Long-term Debt from Continuing Operations, Gross | 2,117 | ||||||||
Long-term Debt Maturities, Current Year by Quarter, First | 21 | ||||||||
Long-term Debt Maturities, Subsequent Year by Quarter, Second | 21 | ||||||||
Long-term Debt Maturities, Current Year by Quarter, Third | 21 | ||||||||
Long-term Debt Maturities, Current Year by Quarter, Fourth | $ 19 | ||||||||
Term Loan A due 2021 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, Weighted Average Interest Rate | [2] | 3.11% | |||||||
Long term debt, net of translation | 694 | $ 732 | |||||||
Principal debt | $ 700 | ||||||||
Proceeds from Issuance of Debt | 700 | € 278 | |||||||
Term Loan B due 2023 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, Weighted Average Interest Rate | [2] | 6.79% | |||||||
Principal debt | 750 | $ 842 | $ 850 | ||||||
Proceeds from Issuance of Debt | 850 | ||||||||
Senior Notes due 2024 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, Weighted Average Interest Rate | 10.91% | ||||||||
Principal debt | 510 | $ 510 | |||||||
Capital Lease Obligations [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, Weighted Average Interest Rate | [2] | 4.39% | |||||||
Principal debt | 43 | $ 33 | |||||||
Principal Debt Balance | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal debt | $ 1,997 | $ 2,117 | |||||||
|
Debt - Commercial Paper and Credit Facility (Details) € in Millions, $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2016
EUR (€)
|
Dec. 31, 2017
USD ($)
|
Mar. 31, 2017
USD ($)
|
Dec. 07, 2016
USD ($)
|
|
Line of Credit Facility [Line Items] | |||||
credit facility annual facility fee - low | 0.35% | ||||
credit facility annual facility fee - high | 0.40% | ||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 1,574 | ||||
Letters of Credit Outstanding, Amount | $ 12 | ||||
Deferred Finance Costs, Own-share Lending Arrangement, Issuance Costs, Amortization Expense | 47 | ||||
Revolving Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit Facility All-in Interest Rate, Low | 1.00% | 1.00% | |||
Credit Facility All-in Interest Rate, High | 1.50% | 1.50% | |||
LIBOR Plus All-in Spread, Low | 2.00% | 2.00% | |||
LIBOR All-in Spread, High | 2.50% | 2.50% | |||
Credit Facility Leverage Terms Low | 225.00% | 225.00% | |||
Credit Facility Leverage Terms | 100.00% | 100.00% | |||
Credit Facility Leverage Terms Foreign Subsidiary | 65.00% | 65.00% | |||
Credit Facility Subsidiary Leverage Terms Low | 4.25 | 4.25 | |||
Credit Facility Subsidiary Leverage Terms High | 1.00 | 1.00 | |||
Credit Facility Subsidiary Leverage Terms Low after Sept 30, 2018 | 3.75 | 3.75 | |||
Credit Facility Leverage Terms High after September 30, 2018 | 1.00 | 1.00 | |||
Term Loan B due 2023 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit Facility All-in Interest Rate, Low | 2.00% | 2.00% | |||
LIBOR Plus All-in Spread, Low | 3.00% | 3.00% | |||
Letter of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Letter of credit sub-facility | $ 200 | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 300 | ||||
Revolving Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | 750 | ||||
Senior Notes due 2019 - 2.77% [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Letter of credit sub-facility | $ 510 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 10.50% | ||||
Deferred finance costs, net | $ 17 | ||||
Term Loan A due 2021 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Letter of credit sub-facility | 700 | ||||
Proceeds from Issuance of Debt | 700 | € 278 | |||
Term Loan B due 2023 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Letter of credit sub-facility | 750 | $ 842 | $ 850 | ||
Proceeds from Issuance of Debt | $ 850 | ||||
Debt Instrument, Redemption, Period Two [Member] | Senior Notes [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Redemption Price, Percentage | 100.00% | 100.00% | |||
Debt Instrument, Redemption, Period One [Member] | Senior Notes [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Redemption Price, Percentage | 110.50% | 110.50% | |||
Debt Instrument, Redemption Percentage | 35.00% | 35.00% |
Debt - Interest Income/Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Debt Disclosure [Abstract] | |||
Interest Paid | $ 129 | $ 5 | $ 9 |
Interest Expense | 137 | 14 | 8 |
Interest Income | $ 3 | $ 3 | $ 3 |
Financial Instruments - Foreign Exchange Risk Management (Details) $ in Millions |
Dec. 31, 2017
USD ($)
|
|||
---|---|---|---|---|
Foreign Exchange Contracts [Line Items] | ||||
Average Maturity of Foreign Exchange Hedging Contracts - within Three Months | 68.00% | |||
Average Maturity of Foreign Exchange Hedging Contracts - within Three and Six Months | 12.00% | |||
Average Maturity of Foreign Exchange Hedging Contracts - within Six and Twelve Months | 15.00% | |||
Average Maturity of Foreign Exchange Hedging Contracts - greater than twelve months | 5.00% | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||||
Gross Notional Value | $ 160 | |||
Philippine Peso U.S. Dollar [Member] | ||||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||||
Gross Notional Value | 62 | |||
Indian Rupee U S Dollar Member | ||||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||||
Gross Notional Value | 68 | |||
Mexican Peso U. S. Dollar [Member] | ||||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||||
Gross Notional Value | 9 | |||
All Other Currency [Member] | ||||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||||
Gross Notional Value | 21 | |||
Foreign exchange contract [Member] | ||||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||||
Fair Value Asset (Liability) | 1 | [1] | ||
Foreign exchange contract [Member] | Philippine Peso U.S. Dollar [Member] | ||||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||||
Fair Value Asset (Liability) | 0 | [1] | ||
Foreign exchange contract [Member] | Indian Rupee U S Dollar Member | ||||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||||
Fair Value Asset (Liability) | 1 | [1] | ||
Foreign exchange contract [Member] | Mexican Peso U. S. Dollar [Member] | ||||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||||
Fair Value Asset (Liability) | 0 | [1] | ||
Foreign exchange contract [Member] | All Other Currency [Member] | ||||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||||
Fair Value Asset (Liability) | $ 0 | [1] | ||
|
Fair Value of Financial Assets and Liabilities - Recurring (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Assets: | |||
Deferred compensation investments in cash surrender life insurance | $ 0 | $ 99 | |
Deferred compensation investments in mutual funds | 0 | 10 | |
Total | 2 | 110 | |
Liabilities: | |||
Foreign exchange contracts - forwards | 1 | 3 | |
Deferred compensation plan liabilities | 99 | 113 | |
Total | 100 | 116 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Foreign exchange contracts - forwards [Member] | |||
Assets: | |||
Foreign exchange contracts - forwards | $ 2 | $ 1 | |
Scenario, Forecast [Member] | |||
Liabilities: | |||
Coli Plan Termination | $ 100 |
Fair Value of Financial Assets and Liabilities - Nonrecurring (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Millions |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 658 | $ 390 |
Restricted cash - related party | 9 | 22 |
Accounts receivable, net | 1,104 | 1,286 |
Short-term debt | 82 | 28 |
Long-term debt | 1,979 | 1,913 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 658 | 390 |
Restricted cash - related party | 9 | 22 |
Accounts receivable, net | 1,104 | 1,286 |
Short-term debt | 82 | 28 |
Long-term debt | $ 2,070 | $ 1,933 |
Employee Benefit Plans (Details) - USD ($) $ in Millions |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
||||
Change in Plan Assets: | ||||||
Fair value of plan assets -beginning | $ 192 | |||||
Fair Value of Plan Assets - ending | 222 | $ 192 | ||||
Amounts Recognized in the Consolidated Balance Sheets: | ||||||
Pension and other benefit liabilities | (4) | (172) | ||||
Foreign Plan [Member] | ||||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||||
Benefit obligation - beginning | 164 | 157 | ||||
Service cost | 2 | 2 | $ 3 | |||
Interest cost | 5 | 5 | 6 | |||
Actuarial loss | 5 | 27 | ||||
Currency exchange rate changes | 14 | (19) | ||||
Benefits paid/settlements | 12 | 8 | ||||
Benefit obligation - ending | 178 | 164 | 157 | |||
Change in Plan Assets: | ||||||
Fair value of plan assets -beginning | 140 | 150 | ||||
Actual return on plan assets | 13 | 15 | ||||
Employer contribution | 5 | 2 | ||||
Currency exchange rate changes | 14 | (19) | ||||
Benefits paid/settlements | 12 | 8 | ||||
Fair Value of Plan Assets - ending | 160 | 140 | 150 | |||
Net Funded Status | [1] | (18) | (24) | |||
Amounts Recognized in the Consolidated Balance Sheets: | ||||||
Other long-term assets | 1 | 0 | ||||
Accrued compensation and benefit costs | 0 | (2) | ||||
Pension liabilities held for sale | (11) | 0 | ||||
Pension and other benefit liabilities | (8) | (22) | ||||
Net Amounts Recognized | (18) | (24) | ||||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | ||||||
Net actuarial loss | 42 | 42 | ||||
United States | ||||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||||
Benefit obligation - beginning | 89 | 74 | ||||
Service cost | 0 | 0 | 0 | |||
Interest cost | 4 | 3 | 3 | |||
Actuarial loss | 10 | 13 | ||||
Currency exchange rate changes | 0 | 0 | ||||
Benefits paid/settlements | 1 | 1 | ||||
Benefit obligation - ending | 102 | 89 | 74 | |||
Change in Plan Assets: | ||||||
Fair value of plan assets -beginning | 52 | 47 | ||||
Actual return on plan assets | 8 | 2 | ||||
Employer contribution | 3 | 4 | ||||
Currency exchange rate changes | 0 | 0 | ||||
Benefits paid/settlements | 1 | 1 | ||||
Fair Value of Plan Assets - ending | 62 | 52 | $ 47 | |||
Net Funded Status | [1] | (40) | (37) | |||
Amounts Recognized in the Consolidated Balance Sheets: | ||||||
Other long-term assets | 0 | 0 | ||||
Accrued compensation and benefit costs | 0 | 0 | ||||
Pension liabilities held for sale | (40) | 0 | ||||
Pension and other benefit liabilities | 0 | (37) | ||||
Net Amounts Recognized | (40) | (37) | ||||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | ||||||
Net actuarial loss | 38 | $ 31 | ||||
Pension Plan [Member] | UNITED KINGDOM | ||||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||||
Benefit obligation - ending | 113 | |||||
Change in Plan Assets: | ||||||
Fair Value of Plan Assets - ending | 114 | |||||
Net Funded Status | 1 | |||||
Pension Plan [Member] | Canada | ||||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||||
Benefit obligation - ending | 55 | |||||
Change in Plan Assets: | ||||||
Fair Value of Plan Assets - ending | 44 | |||||
Net Funded Status | (11) | |||||
Pension Plan [Member] | Funded and Unfunded Plans [Member] | ||||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||||
Benefit obligation - ending | 280 | |||||
Change in Plan Assets: | ||||||
Fair Value of Plan Assets - ending | 222 | |||||
Net Funded Status | (58) | |||||
Pension Plan [Member] | Defined Benefit Pension Plans - Total Underfunded and Unfunded Plans [Member] | United States | ||||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||||
Benefit obligation - ending | 102 | |||||
Change in Plan Assets: | ||||||
Fair Value of Plan Assets - ending | 62 | |||||
Net Funded Status | (40) | |||||
Pension Plan [Member] | Funded [Member] | Pension Plans All Other Countries [Member] | ||||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||||
Benefit obligation - ending | 10 | |||||
Change in Plan Assets: | ||||||
Fair Value of Plan Assets - ending | 2 | |||||
Pension Plan [Member] | Underfunded [Member] | Pension Plans All Other Countries [Member] | ||||||
Change in Plan Assets: | ||||||
Net Funded Status | $ (8) | |||||
|
Employee Benefit Plans - Accumulated Benefit Obligation in Excess of Plan Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||
---|---|---|---|---|---|---|
Total Underfunded and Unfunded Plans [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Projected benefit obligation | $ 167 | $ 253 | ||||
Accumulated Benefit Obligation | 160 | 246 | ||||
Fair value of plan assets | 108 | 192 | ||||
United States | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension Benefit Obligation | 102 | 89 | $ 74 | |||
Net Funded Status | [1] | (40) | (37) | |||
United States | Underfunded [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Projected benefit obligation | 102 | 89 | ||||
Accumulated Benefit Obligation | 102 | 89 | ||||
Fair value of plan assets | 62 | 52 | ||||
United States | Total Underfunded and Unfunded Plans [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Projected benefit obligation | 102 | 89 | ||||
Accumulated Benefit Obligation | 102 | 89 | ||||
Fair value of plan assets | 62 | 52 | ||||
Foreign Plan [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension Benefit Obligation | 178 | 164 | $ 157 | |||
Net Funded Status | [1] | (18) | (24) | |||
Foreign Plan [Member] | Underfunded [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Projected benefit obligation | 60 | 162 | ||||
Accumulated Benefit Obligation | 55 | 156 | ||||
Fair value of plan assets | 46 | 140 | ||||
Foreign Plan [Member] | Unfunded [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Projected benefit obligation | 5 | 2 | ||||
Accumulated Benefit Obligation | 3 | 1 | ||||
Fair value of plan assets | 0 | 0 | ||||
Foreign Plan [Member] | Total Underfunded and Unfunded Plans [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Projected benefit obligation | 65 | 164 | ||||
Accumulated Benefit Obligation | 58 | 157 | ||||
Fair value of plan assets | 46 | $ 140 | ||||
Pension Plan [Member] | Funded and Unfunded Plans [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension Benefit Obligation | 280 | |||||
Net Funded Status | (58) | |||||
Defined Benefit Plan, Accumulated Benefit Obligation | 274 | |||||
Pension Plan [Member] | Pension Plans All Other Countries [Member] | Underfunded [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Net Funded Status | (8) | |||||
Defined Benefit Plan, Accumulated Benefit Obligation | 5 | |||||
Pension Plan [Member] | Pension Plans All Other Countries [Member] | Funded [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension Benefit Obligation | 10 | |||||
Pension Plan [Member] | Canada | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension Benefit Obligation | 55 | |||||
Net Funded Status | (11) | |||||
Defined Benefit Plan, Accumulated Benefit Obligation | 53 | |||||
Pension Plan [Member] | UNITED KINGDOM | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension Benefit Obligation | 113 | |||||
Net Funded Status | 1 | |||||
Defined Benefit Plan, Accumulated Benefit Obligation | 114 | |||||
Pension Plan [Member] | United States | Total Underfunded and Unfunded Plans [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension Benefit Obligation | 102 | |||||
Net Funded Status | (40) | |||||
Defined Benefit Plan, Accumulated Benefit Obligation | $ 102 | |||||
|
Employee Benefit Plans - Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Net actuarial loss (gain) | $ (5) | $ (31) | $ 5 | ||
Amortization of net actuarial loss | [1] | (2) | (1) | (2) | |
Total Recognized in Other Comprehensive Income | 7 | 27 | (9) | ||
Benefit plans net actuarial loss [Member] | Pension Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Pension and Other Postretirement Benefit Plans, Amounts that Will be Amortized from Accumulated Other Comprehensive Income (Loss) in Next Fiscal Year | 2 | ||||
United States | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service cost | 0 | 0 | 0 | ||
Interest cost | 4 | 3 | 3 | ||
Expected return on plan assets | (5) | (4) | (4) | ||
Recognized net actuarial loss | 1 | 0 | 0 | ||
Net Periodic Benefit Cost | 0 | (1) | (1) | ||
Net actuarial loss (gain) | 7 | 13 | 4 | ||
Amortization of net actuarial loss | (1) | 0 | 0 | ||
Total Recognized in Other Comprehensive Income | 6 | 13 | 4 | ||
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income | 6 | 12 | 3 | ||
Foreign Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service cost | 2 | 2 | 3 | ||
Interest cost | 5 | 5 | 6 | ||
Expected return on plan assets | (8) | (8) | (9) | ||
Recognized net actuarial loss | 1 | 1 | 2 | ||
Net Periodic Benefit Cost | 0 | 0 | 2 | ||
Net actuarial loss (gain) | (2) | 18 | (9) | ||
Amortization of net actuarial loss | (1) | (1) | (2) | ||
Total Recognized in Other Comprehensive Income | (3) | 17 | (11) | ||
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income | $ (3) | $ 17 | $ (9) | ||
|
Employee Benefit Plans - Plan Amendments and Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Defined Benefit Plan [Abstract] | ||
Defined Benefit Plan, Fair Value of Plan Assets | $ 222 | $ 192 |
Employee Benefit Plans - Defined Benefit Pension Plan Assets Levels 1 2 and 3 (Details) - USD ($) $ in Millions |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 222 | $ 192 | |
United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 62 | $ 52 | $ 47 |
Defined Benefit Plan, Actual Plan Asset Allocations | 100.00% | 100.00% | |
United States | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 31 | $ 22 | |
United States | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 31 | 30 | |
United States | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
United States | Cash and Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 1 | $ 3 | |
Defined Benefit Plan, Actual Plan Asset Allocations | 2.00% | 6.00% | |
United States | Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 1 | $ 3 | |
United States | Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
United States | Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
United States | Equity Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 43 | $ 33 | |
Defined Benefit Plan, Actual Plan Asset Allocations | 69.00% | 63.00% | |
United States | Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 12 | $ 9 | |
United States | Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 31 | 24 | |
United States | Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
United States | Debt Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 18 | $ 16 | |
Defined Benefit Plan, Actual Plan Asset Allocations | 29.00% | 31.00% | |
United States | Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 18 | $ 10 | |
United States | Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 6 | |
United States | Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
United States | Other Assets [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 0 | $ 0 | |
Defined Benefit Plan, Actual Plan Asset Allocations | 0.00% | 0.00% | |
United States | Other Assets [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 0 | $ 0 | |
United States | Other Assets [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
United States | Other Assets [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Foreign Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 160 | $ 140 | $ 150 |
Defined Benefit Plan, Actual Plan Asset Allocations | 100.00% | 100.00% | |
Foreign Plan [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 3 | $ 0 | |
Foreign Plan [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 148 | 132 | |
Foreign Plan [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 9 | 8 | |
Foreign Plan [Member] | Cash and Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 3 | $ 0 | |
Defined Benefit Plan, Actual Plan Asset Allocations | 2.00% | 0.00% | |
Foreign Plan [Member] | Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 3 | $ 0 | |
Foreign Plan [Member] | Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Foreign Plan [Member] | Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Foreign Plan [Member] | Equity Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 47 | $ 61 | |
Defined Benefit Plan, Actual Plan Asset Allocations | 29.00% | 44.00% | |
Foreign Plan [Member] | Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 0 | $ 0 | |
Foreign Plan [Member] | Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 47 | 61 | |
Foreign Plan [Member] | Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Foreign Plan [Member] | Debt Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 46 | $ 60 | |
Defined Benefit Plan, Actual Plan Asset Allocations | 29.00% | 43.00% | |
Foreign Plan [Member] | Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 0 | $ 0 | |
Foreign Plan [Member] | Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 46 | 60 | |
Foreign Plan [Member] | Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Foreign Plan [Member] | Other Assets [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 64 | $ 19 | |
Defined Benefit Plan, Actual Plan Asset Allocations | 40.00% | 13.00% | |
Foreign Plan [Member] | Other Assets [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 0 | $ 0 | |
Foreign Plan [Member] | Other Assets [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 55 | 11 | |
Foreign Plan [Member] | Other Assets [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 9 | $ 8 |
Employee Benefit Plans - Investment Strategy (Details) |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Pension Plan Assets, Investment Strategy | 1.00 | 1.00 |
United States | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Equity investments, percent | 55.00% | 55.00% |
Fixed income investments, percent | 0.23 | 0.25 |
Real estate, percent | 0.00 | 0.00 |
Other, percent | 0.22 | 0.20 |
Foreign Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Equity investments, percent | 28.00% | 41.00% |
Fixed income investments, percent | 0.43 | 0.45 |
Real estate, percent | 0.04 | 0.04 |
Other, percent | 0.25 | 0.10 |
Pension Plan Assets, Investment Strategy | 1.00 | 1.00 |
Employee Benefit Plans - Contributions (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
2018 | $ 6 | |||
2019 | 7 | |||
2020 | 7 | |||
2021 | 8 | |||
2022 | 8 | |||
Years 2023-2026 | 49 | |||
Post employment benefit plan contributions by employer | 35 | $ 35 | $ 34 | |
Pension Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined benefit pension plan contributions by employer | 8 | |||
Defined Benefit Plans, Future Employer Contributions in Next Fiscal Year | 8 | |||
United States | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined benefit pension plan contributions by employer | 3 | |||
Defined Benefit Plans, Future Employer Contributions in Next Fiscal Year | 0 | |||
2018 | 2 | |||
2019 | 2 | |||
2020 | 2 | |||
2021 | 3 | |||
2022 | 3 | |||
Years 2023-2026 | $ 19 | |||
Discount rate assumptions used to determine benefit obligations | 3.80% | 4.20% | 4.30% | |
Discount rate assumptions used to determine net periodic benefit costs | 4.20% | 4.30% | 4.00% | |
Expected return on plan assets assumptions used to determine net periodic benefit cost | 7.80% | 7.80% | 7.80% | |
Foreign Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined benefit pension plan contributions by employer | $ 5 | |||
Defined Benefit Plans, Future Employer Contributions in Next Fiscal Year | 8 | |||
2018 | 4 | |||
2019 | 5 | |||
2020 | 5 | |||
2021 | 5 | |||
2022 | 5 | |||
Years 2023-2026 | $ 30 | |||
Discount rate assumptions used to determine benefit obligations | 2.90% | 3.20% | 3.90% | |
Rate of compensation increase assumptions used to determine benefit obligation | 0.80% | 1.00% | 1.00% | |
Discount rate assumptions used to determine net periodic benefit costs | 3.10% | 3.90% | 3.40% | |
Expected return on plan assets assumptions used to determine net periodic benefit cost | 4.80% | 5.70% | 5.80% | |
Rate of compensation increase assumptions used to determine net periodic benefit cost | 0.80% | 1.00% | 1.10% | |
Scenario, Forecast [Member] | United States | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Discount rate assumptions used to determine net periodic benefit costs | 3.80% | |||
Expected return on plan assets assumptions used to determine net periodic benefit cost | 7.80% | |||
Scenario, Forecast [Member] | Foreign Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Discount rate assumptions used to determine net periodic benefit costs | 3.10% | |||
Expected return on plan assets assumptions used to determine net periodic benefit cost | 4.80% | |||
Rate of compensation increase assumptions used to determine net periodic benefit cost | 0.80% |
Income and Other Taxes - Domestic and Foreign (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
tax enacted law benefit | $ 198 | ||
Effective Income Tax Rate Reconciliation, Prior Year Income Taxes, Amount | 210 | ||
Domestic loss | (91) | $ (1,329) | $ (654) |
Foreign income | 75 | 102 | 80 |
Loss Before Income Taxes | $ (16) | $ (1,227) | $ (574) |
U.S. federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
Minimum [Member] | |||
U.S. federal statutory income tax rate | 35.00% | ||
Maximum [Member] | |||
U.S. federal statutory income tax rate | 21.00% | ||
one time charge [Member] | |||
Effective Income Tax Rate Reconciliation, Prior Year Income Taxes, Amount | $ 12 |
Income and Other Taxes - Income Tax Expense (Benefit), Current Deferred, by Jurisdiction (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Current Federal Tax (Benefit) Expense | $ 4 | $ (116) | $ (130) |
Deferred Federal Income Tax Expense | (233) | (132) | (99) |
Current Foreign Tax Expense | 25 | 31 | 24 |
Deferred Foreign Income Tax Expense (Benefit) | (3) | (3) | 6 |
Current State Tax Expense | 8 | 1 | (17) |
Deferred State Income Tax Expense | 6 | (25) | (22) |
Total Benefit | $ (193) | $ (244) | $ (238) |
Income and Other Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||
Income Tax Disclosure [Abstract] | |||||
U.S. federal statutory income tax rate | 35.00% | 35.00% | 35.00% | ||
Nondeductible expenses(1) | (155.90%) | (19.00%) | (1.30%) | ||
Effect of tax law changes | 1282.40% | 0.00% | 0.90% | ||
Change in valuation allowance for deferred tax assets | (39.50%) | 0.10% | (1.00%) | ||
State taxes, net of federal benefit | 1.20% | 1.80% | 4.20% | ||
Audit and other tax return adjustments | 0.00% | 1.40% | 0.10% | ||
Tax-exempt income, credits and incentives | 38.90% | 0.70% | 0.70% | ||
Foreign rate differential adjusted for U.S. taxation of foreign profits | [1] | 47.70% | 0.70% | 2.40% | |
Other | (3.50%) | (0.80%) | 0.50% | ||
Effective Income Tax Rate | 1206.30% | 19.90% | 41.50% | ||
Income Taxes Paid | $ 29 | $ (123) | $ 194 | ||
|
Income and Other Taxes - Allocation of Income Tax Expense Benefit (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||
Income Tax Interperiod Allocaion [Line Items] | |||||
Pre-tax income | $ (193) | $ (244) | $ (238) | ||
Discontinued Operation, Tax Effect of Discontinued Operation | [1] | 3 | 0 | 81 | |
Stock option and incentive plans, net | 0 | 0 | (6) | ||
Total Income Tax Benefit | (190) | (236) | (161) | ||
Defined Benefit Pension Plans, Defined Benefit [Member] | |||||
Income Tax Interperiod Allocaion [Line Items] | |||||
Other comprehensive income (loss), tax | $ 0 | $ 8 | $ 2 | ||
|
Income and Other Taxes - Unrecognized Tax Benefits Rollforward (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||||
Balance, Beginning | $ 14 | $ 24 | $ 32 | ||
Additions related to current year | 0 | 1 | 3 | ||
Additions related to prior years positions | 0 | 0 | 0 | ||
Reductions related to prior years positions | 0 | (5) | (10) | ||
Settlements with taxing authorities | [1] | 0 | (5) | 0 | |
Currency | 1 | (1) | (1) | ||
Balance, Ending | 15 | 14 | 24 | ||
Cash paid as result of settlement | (5) | ||||
Unrecognized Tax Benefits, Reasonably Possible but Uncertainty of Timing | 0 | 0 | 8 | ||
unrecognized tax benefits, other uncertain tax positions offsetting benefits from other jurisdictions | 16 | 16 | 14 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 6 | $ 4 | $ 14 | ||
|
Income and Other Taxes - Deferred Tax Asset And Liability (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Operating Loss Carryforwards [Line Items] | ||
Undistributed Earnings of Foreign Subsidiaries | $ 253 | |
Net operating losses | 41 | $ 42 |
Operating reserves, accruals and deferrals | 90 | 155 |
Deferred compensation | 59 | 101 |
Pension | 15 | 18 |
Other | 45 | 44 |
Subtotal | 250 | 360 |
Valuation allowance | (35) | (24) |
Total | 215 | 336 |
Unearned income | 134 | 217 |
Intangibles and goodwill | 413 | 680 |
Depreciation | 10 | 15 |
Other | 25 | 29 |
Total | 582 | 941 |
Total Deferred Taxes, Net | (367) | (605) |
Valuation Allowance, Deferred Tax Asset, Change in Amount | (11) | $ 14 |
Deferred Tax Assets, Tax Credit Carryforwards | 27 | |
Net Operating Loss Carryforwards, Expire | 422 | |
Carryforward Indefinitely [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 43 |
Contingencies and Litigation - Other Contingencies (Details) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Guarantor Obligations [Line Items] | ||
Loss Contingency, Allegations | 2000000000 | |
Surety Bond [Member] | ||
Guarantor Obligations [Line Items] | ||
Damages sought, multiplier of overpayment amount | $ 576 | $ 576 |
Other contingencies letter of credits [Member] | ||
Guarantor Obligations [Line Items] | ||
Damages sought, multiplier of overpayment amount | 256 | 256 |
Federal Family Education Loan Program (FFELP) Guaranteed Loans [Member] | ||
Guarantor Obligations [Line Items] | ||
Outstanding principal balance - student loan portfolio | 5,200 | 5,200 |
Reserves for losses on defaulted loans | $ 1 | $ 1 |
State Of Texas v. Xerox Corporation, Xerox State Healthcare, LLC, and ACS State Healthcare, LLC [Member] | ||
Guarantor Obligations [Line Items] | ||
Loss Contingency, Damages Sought, Multiplier Of Overpayment Amounts | 3 |
Preferred Stock (Details) $ / shares in Units, shares in Thousands, $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
$ / shares
shares
| |
Equity [Abstract] | |
Preferred stock, XRX separation shares issued (in shares) | shares | 120 |
Preferred Stock, Liquidation Preference, Value | $ 120.0 |
Preferred stock aggregate fair value | $ 142.0 |
Preferred stock, dividend rate, percentage | 8.00% |
Preferred stock annual dividends | $ 9.6 |
Common Stock, Conversion Basis | 44.9438 |
Preferred stock converted into common shares (in shares) | shares | 5,393 |
Total conversion of preferred stock shares into common stock, initial conversion price per share (in dollars per share) | $ / shares | $ 22.250 |
Convertible Preferred Stock, Terms of Conversion | 1.3694 |
Shareholder's Equity - Stock (Details) shares in Millions |
Dec. 31, 2017
$ / shares
shares
|
---|---|
Class of Stock [Line Items] | |
Preferred Stock, Shares Authorized (in shares) | 100.0 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares | $ 0.01 |
Common Stock, Shares Authorized (in shares) | 1,000.0 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares | $ 0.01 |
Incentive compensation [Member] | |
Class of Stock [Line Items] | |
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 15.0 |
Preferred Stock [Member] | |
Class of Stock [Line Items] | |
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 5.4 |
Shareholders' Equity - Total Stock-based Compensation Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Stockholders' Equity Note [Abstract] | |||
Stock-based compensation expense, pre-tax | $ 42 | $ 23 | $ 19 |
Income tax benefit recognized in earnings | $ 17 | $ 9 | $ 7 |
Officers and Select Executives [Member] | Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Requisite service period | 3 years | ||
Officers and Select Executives [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Requisite service period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award - Maximum over-achievement | 100.00% | ||
Award vesting period | 3 years |
Shareholders' Equity - Share-based Compensation, Activity (Details) - $ / shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Restricted Stock Units (RSUs) [Member] | |||
Awards Other Than Options, Number of Shares [Roll Forward] | |||
Outstanding at January 1 (in shares) | 1,961 | 782 | 3,422 |
Granted (in shares) | 1,988 | 2,602 | 260 |
Vested (in shares) | (215) | (119) | (2,768) |
Cancelled (in shares) | (609) | (121) | (132) |
Impact of Spin-off (in shares) | 0 | (1,183) | 0 |
Outstanding at December 31 (in shares) | 3,125 | 1,961 | 782 |
Awards Other Than Options, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Outstanding at January 1 (in dollars per share) | $ 13.99 | $ 11.70 | $ 8.47 |
Granted (in dollars per share) | 16.75 | 9.61 | 11.86 |
Vested (in dollars per share) | 19.98 | 9.43 | 7.83 |
Cancelled (in dollars per share) | 15.88 | 10.55 | 9.52 |
Outstanding at December 31 (in dollars per share) | $ 16.29 | $ 13.99 | $ 11.70 |
Performance Shares [Member] | |||
Awards Other Than Options, Number of Shares [Roll Forward] | |||
Outstanding at January 1 (in shares) | 4,926 | 7,522 | 5,771 |
Granted (in shares) | 3,933 | 1,850 | 3,583 |
Vested (in shares) | (1,696) | 0 | (610) |
Cancelled (in shares) | (1,734) | (1,478) | (1,222) |
Impact of Spin-off (in shares) | 0 | (2,968) | 0 |
Outstanding at December 31 (in shares) | 5,429 | 4,926 | 7,522 |
Awards Other Than Options, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Outstanding at January 1 (in dollars per share) | $ 13.99 | $ 11.57 | $ 11.68 |
Granted (in dollars per share) | 16.76 | 9.35 | 10.68 |
Vested (in dollars per share) | 19.67 | 0.00 | 7.88 |
Cancelled (in dollars per share) | 17.46 | 11.96 | 11.36 |
Outstanding at December 31 (in dollars per share) | $ 16.55 | $ 13.99 | $ 11.57 |
Shareholders' Equity - Share-based Compensation, Stock Option Activity (Details) - Stock Options [Member] shares in Thousands |
Dec. 31, 2017
$ / shares
shares
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options outstanding (in shares) | shares | 348 |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercisable, Weighted Average (in dollars per share) | $ 10.15 |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercisable, Weighted Average (in dollars per share) | $ 11.38 |
Shareholders' Equity - Share-based Compensation, Awards, Unrecognized Compensation (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation | $ 57 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation | $ 27 |
Awards Compensation Costs Remaining Weighted Average Vesting Term, (Years) | 1 year 10 months 18 days |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation | $ 30 |
Awards Compensation Costs Remaining Weighted Average Vesting Term, (Years) | 1 year 7 months 5 days |
Shareholders' Equity - Share-based Compensation, Awards, Intrinsic Value (Details) $ in Millions |
Dec. 31, 2017
USD ($)
|
---|---|
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award Other Than Options [Line Items] | |
Aggregate intrinsic value of outstanding non option awards | $ 50 |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award Other Than Options [Line Items] | |
Aggregate intrinsic value of outstanding non option awards | $ 88 |
Shareholders' Equity - Share-based Compensation, Stock Option Awards, Intrinsic Value (Details) - Stock Options [Member] $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate intrinsic value outstanding | $ 6 |
Aggregate intrinsic value exercisable | $ 6 |
Weighted-average remaining contractual life, outstanding, years | 1 year 4 months |
Weighted-average remaining contractual life, exercisable, years | 1 year 4 months |
Shareholders' Equity - Share-based Compensation, Awards, Intrinsic Value, Cash Received and Tax Benefit (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Intrinsic Value | $ 3 | $ 1 | $ 30 |
Cash Received | 0 | 0 | 0 |
Tax Benefit - RSU and PS awards | 1 | 0 | 11 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Intrinsic Value | 25 | 0 | 7 |
Cash Received | 0 | 0 | 0 |
Tax Benefit - RSU and PS awards | 10 | 0 | 2 |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Intrinsic Value - Stock Options | 3 | 3 | 14 |
Cash Received | 6 | 9 | 19 |
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options | $ 1 | $ 1 | $ 5 |
Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions |
12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
||||||||||
Other Comprehensive Income [Abstract] | ||||||||||||
Translation Adjustment Losses, Pre-tax | $ 35 | $ (135) | $ (60) | |||||||||
Translation Adjustment Losses, Net of Tax | [1] | 35 | (135) | (60) | ||||||||
Changes in fair value of cash flow hedges gains (losses), pre-tax | 1 | (2) | (4) | |||||||||
Changes in fair value of cash flow hedges gains (losses), net of tax | 1 | (1) | (2) | |||||||||
Changes in cash flow hedges reclassed to earnings, pre-tax | [2] | 2 | 2 | 5 | ||||||||
Changes in cash flow hedges reclassed to earnings, net of tax | [2] | 1 | 1 | 3 | ||||||||
Net Unrealized Gains, Pre-tax | 3 | 0 | 1 | |||||||||
Net Unrealized Gains, Net of Tax | [1] | 2 | 0 | 1 | ||||||||
Net actuarial/prior service (losses) gains, pre-tax | (5) | (31) | 5 | |||||||||
Net actuarial/prior service (losses) gains, net of tax | (4) | (23) | 4 | |||||||||
Actuarial loss amortization/settlement, pre-tax | [3] | 2 | 1 | 2 | ||||||||
Actuarial loss amortization/settlement, net of tax | [3] | 2 | 1 | 2 | ||||||||
Other gains (losses), pre-tax | [4] | (4) | 3 | 2 | ||||||||
Other gains (losses), net of tax | [4] | (3) | 2 | 1 | ||||||||
Change in Defined Benefit Plans Gains (Losses), Pre-tax | (7) | (27) | 9 | |||||||||
Change in Defined Benefit Plans Gains (Losses), Net of Tax | [1] | (5) | (20) | 7 | ||||||||
Other Comprehensive (Loss) Income, before Tax | 31 | (162) | (50) | |||||||||
Other Comprehensive (Loss) Income, Net of Tax | [1] | $ 32 | $ (155) | $ (52) | ||||||||
|
Other Comprehensive (Loss) Income - AOCL (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||||
AOCL [Abstract] | |||||||
Cumulative translation adjustments(1) | $ (437) | $ (472) | $ (147) | ||||
Other unrealized losses, net | 1 | (1) | (1) | ||||
Benefit plans net actuarial losses and prior service credits | (58) | (53) | (33) | ||||
Total Accumulated Other Comprehensive Loss | (494) | (526) | (181) | ||||
AOCL [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Transfers (To) From Parent | $ 190 | $ 190 | [1] | $ 0 | [1] | ||
|
Earnings per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Schedule of Basic And Diluted Earnings [Line Items] | |||
Net income (loss) from continuing operations attributable to Conduent | $ 177 | $ (983) | $ (336) |
Accrued dividends on preferred stock | 10 | 0 | 0 |
Earnings Per Share, Basic [Abstract] | |||
Adjusted Net Income (Loss) From Continuing Operations Available to Common Shareholders | 167 | (983) | (336) |
Net (loss) income from discontinued operations attributable to Conduent | 4 | 0 | (78) |
Adjusted Net Income Available to Common Shareholders | $ 171 | $ (983) | $ (414) |
Weighted-average common shares outstanding (in shares) | 204,007 | 202,875 | 202,875 |
Continuing Operations (in dollars per share) | $ 0.82 | $ (4.85) | $ (1.65) |
Discontinued operations (in dollars per share) | 0.02 | 0.00 | (0.39) |
Total Basic Earnings (Loss) per Share (in dollars per share) | $ 0.84 | $ (4.85) | $ (2.04) |
Earnings Per Share, Diluted [Abstract] | |||
Adjusted Net Income (Loss) From Continuing Operations Available to Common Shareholders | $ 167 | $ (983) | $ (336) |
Net (loss) income from discontinued operations attributable to Conduent | 4 | 0 | (78) |
Adjusted Net Income Available to Common Shareholders, Diluted | $ 171 | $ (983) | $ (414) |
Weighted-average common shares outstanding (in shares) | 204,007 | 202,875 | 202,875 |
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||
Continuing Operations (in dollars per share) | $ 0.81 | $ (4.85) | $ (1.65) |
Discontinued operations (in dollars per share) | 0.02 | 0.00 | (0.39) |
Total Diluted Earnings (Loss) per Share (in dollars per share) | $ 0.83 | $ (4.85) | $ (2.04) |
Adjusted Weighted Average Common Shares Outstanding | 206,693 | 202,875 | 202,875 |
Stock options [Member] | |||
Schedule of Basic And Diluted Earnings [Line Items] | |||
Stock options | 195 | 0 | 0 |
Restricted Stock and Performance Shares [Member] | |||
Schedule of Basic And Diluted Earnings [Line Items] | |||
Stock options | 2,491 | 0 | 0 |
Convertible Preferred Stock [Member] | |||
Schedule of Basic And Diluted Earnings [Line Items] | |||
Convertible preferred stock | 0 | 0 | 0 |
Earnings (loss) per share, diluted [Member] | |||
Schedule of Basic And Diluted Earnings [Line Items] | |||
Accrued dividends on preferred stock | $ 10 | $ 0 | $ 0 |
Earnings per Share - Anti-Dilutive Securities (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Securities (in shares) | 7,961 | 11,969 | 0 |
Stock options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Securities (in shares) | 0 | 857 | 0 |
Restricted stock and performance shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Securities (in shares) | 2,568 | 5,719 | 0 |
Convertible preferred stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Securities (in shares) | 5,393 | 5,393 | 0 |
Related Party and Former Parent Investment (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jan. 31, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Related Party Transaction [Line Items] | ||||
Research and development | $ 13 | $ 31 | $ 52 | |
Selling, general and administrative | 615 | 686 | 699 | |
Related party payment at separation | $ 161 | |||
Corporate cost allocations | 165 | 170 | ||
Stock-based compensation | 40 | 23 | 19 | |
Net Payment On Notes Payable With Former Parent Company | (1,132) | (91) | ||
Related party interest | $ 0 | 26 | 61 | |
Leased equipment and services | 21 | 24 | ||
Xerox [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash pooling and general financing activities | (466) | (396) | ||
Corporate cost allocations | 165 | 170 | ||
Income taxes | (157) | 168 | ||
Divestitures and acquisitions, net | 54 | (742) | ||
Capitalization of related party notes payable | 0 | 1,017 | ||
Total net transfers (to) from former parent | (404) | 217 | ||
Stock-based compensation | (23) | (19) | ||
Capitalization of related party notes payable | 0 | (1,017) | ||
Other, net | (161) | 147 | ||
Total Net transfers to former parent per Consolidated Statements of Cash Flows | (1,720) | (763) | ||
Xerox [Member] | ||||
Related Party Transaction [Line Items] | ||||
Research and development | 25 | 43 | ||
Selling, general and administrative | 140 | 127 | ||
Total Allocated Corporate Expenses | $ 165 | $ 170 | ||
Minimum [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Rate | 1.00% | |||
Maximum [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Rate | 8.00% |
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
AR Amounts (credited) charged to other income statement accounts | $ 0 | $ 0 | $ 5 |
Tax Valuation Allowances and Reserves Beginning Balance | 24 | 38 | 35 |
Tax Valuation Allowances and Reserves, Period Increase (Decrease) | 11 | 0 | 0 |
Tax Valuation Allowances and Reserves, Deductions | 0 | 14 | 2 |
Tax Valuation Allowances and Reserves Ending Balance | 35 | 24 | 38 |
Accounts Receivable [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
AR Valuation and Qualifying Accounts Beginning Balance | 7 | 6 | 6 |
AR Additions charged to bad debt provision | (1) | 4 | 4 |
AR Amounts (credited) charged to other income statement accounts | 0 | 0 | 0 |
AR Deductions and other, net of recoveries | (4) | (3) | (4) |
AR Valuation and Qualifying Accounts Ending Balance | $ 2 | $ 7 | $ 6 |
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