Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Disaggregation of revenue

The table below presents the Company’s revenue disaggregated by major business, including a reconciliation with its reportable segments. Most of the Company’s revenue is earned domestically within these major businesses, with revenue from clients outside the United States comprising approximately 5% of total revenue.

(In millions)	Reportable Segments
Three Months Ended March 31, 2018	Payments		Financial		Corporate and Other			Total
Major Business
Digital Money Movement	$	352	$	—	$	—		$	352
Card and Related Services	414		—		—			414
Other	76		—		—			76
Total Payments	842		—		—			842
Account and Item Processing	—		506		—			506
Lending Solutions	—		56		—			56
Other	—		54		—			54
Total Financial	—		616		—			616
Corporate and Other	—		—		(18		)	(18		)
Total Revenue	$	842	$	616	$	(18	)	$	1,440

Schedule of remaining performance obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

(In millions)	Remainder of:
March 31, 2018	2018		2019		2020		2021		Thereafter
Processing and services	$	758	$	836	$	617	$	467	$	676
Product	25		27		21		11		8

Schedule of effect of new accounting pronouncements

The following tables summarize the impacts of ASC 606 adoption on the Company’s consolidated financial statements as of and for the three months ended March 31, 2018.

Consolidated Statement of Income

(In millions, unaudited)	Impact of changes in accounting policies
Three Months Ended March 31, 2018	As reported			Adjustments			Balances without adoption of ASC 606
Revenue:
Processing and services	$	1,238		$	(22	)	$	1,216
Product	202			(3		)	199
Total revenue	1,440			(25		)	1,415
Expenses:
Cost of processing and services	568			1			569
Cost of product	191			(2		)	189
Selling, general and administrative	305			2			307
Gain on sale of business	(232		)	(3		)	(235		)
Total expenses	832			(2		)	830
Operating income	608			(23		)	585
Interest expense	(45		)	—			(45		)
Income before income taxes	563			(23		)	540
Income tax provision	(140		)	7			(133		)
Net income	$	423		$	(16	)	$	407
Net income per share – basic	$	1.02		$	(0.03	)	$	0.99
Net income per share – diluted	$	1.00		$	(0.03	)	$	0.97
Shares used in computing net income per share:
Basic	413.1			—			413.1
Diluted	421.6			—			421.6

Consolidated Statement of Comprehensive Income

(In millions, unaudited)	Impact of changes in accounting policies
Three Months Ended March 31, 2018	As reported			Adjustments			Balances without adoption of ASC 606
Net income	$	423		$	(16	)	$	407
Other comprehensive (loss) income:
Fair market value adjustment on cash flow hedges, net of income tax provision of zero	(1		)	—			(1		)
Reclassification adjustment for net realized gains on cash flow hedges included in cost of processing and services, net of income tax benefit of $1 million	(2		)	—			(2		)
Reclassification adjustment for net realized losses on cash flow hedges included in interest expense, net of income tax provision of zero	1			—			1
Total other comprehensive loss	(2		)	—			(2		)
Comprehensive income	$	421		$	(16	)	$	405

Consolidated Balance Sheet

(In millions, unaudited)	Impact of changes in accounting policies
March 31, 2018	As reported		Adjustments			Balances without adoption of ASC 606
Assets
Cash and cash equivalents	$	382	$	—		$	382
Trade accounts receivable, net	878		(8		)	870
Prepaid expenses and other current assets	508		19			527
Total current assets	1,768		11			1,779
Property and equipment, net	375		—			375
Intangible assets, net	1,855		—			1,855
Goodwill	5,454		—			5,454
Contract costs, net	401		(322		)	79
Other long-term assets	314		122			436
Total assets	$	10,167	$	(189	)	$	9,978
Liabilities and Shareholders’ Equity
Accounts payable and accrued expenses	$	1,303	$	(9	)	$	1,294
Current maturities of long-term debt	1		—			1
Contract liabilities	379		100			479
Total current liabilities	1,683		91			1,774
Long-term debt	4,603		—			4,603
Deferred income taxes	693		(76		)	617
Long-term contract liabilities	65		19			84
Other long-term liabilities	152		—			152
Total liabilities	7,196		34			7,230
Total shareholders’ equity	2,971		(223		)	2,748
Total liabilities and shareholders’ equity	$	10,167	$	(189	)	$	9,978

Consolidated Statement of Cash Flows

(In millions, unaudited)	Impact of changes in accounting policies
Three Months Ended March 31, 2018	As reported			Adjustments			Balances without adoption of ASC 606
Cash flows from operating activities
Net income	$	423		$	(16	)	$	407
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations:
Depreciation and other amortization	94			(18		)	76
Amortization of acquisition-related intangible assets	40			—			40
Share-based compensation	19			—			19
Deferred income taxes	77			(7		)	70
Gain on sale of business	(232		)	(3		)	(235		)
Changes in assets and liabilities, net of effects from acquisitions and dispositions:
Trade accounts receivable	67			6			73
Prepaid expenses and other assets	(44		)	(2		)	(46		)
Contract costs	(50		)	25			(25		)
Accounts payable and other liabilities	38			(4		)	34
Contract liabilities	(60		)	19			(41		)
Net cash provided by operating activities from continuing operations	372			—			372
Cash flows from investing activities:
Capital expenditures, including capitalization of software costs	(77		)	—			(77		)
Proceeds from sale of business	419			—			419
Purchases of investments	(1		)	—			(1		)
Other investing activities	(10		)	—			(10		)
Net cash provided by investing activities from continuing operations	331			—			331
Cash flows from financing activities:
Debt proceeds	509			—			509
Debt repayments	(806		)	—			(806		)
Proceeds from issuance of treasury stock	28			—			28
Purchases of treasury stock, including employee shares withheld for tax obligations	(427		)	—			(427		)
Net cash used in financing activities from continuing operations	(696		)	—			(696		)
Net change in cash and cash equivalents from continuing operations	7			—			7
Net cash flows from discontinued operations provided by investing activities	50			—			50
Cash and cash equivalents, beginning balance	325			—			325
Cash and cash equivalents, ending balance	$	382		$	—		$	382

Contract with customer, asset and liabilities

The following table provides information about contract assets and contract liabilities from contracts with customers.

(In millions)	March 31, 2018		January 1, 2018
Contract assets	$	148	$	158
Contract liabilities	444		520