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New Accounting Guidance (Tables) | 6 Months Ended
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Jun. 30, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The impact of adoption of the new revenue standard on the Company's consolidated income statement was as follows (in millions):
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | As Reported |  | Revenue Standard Impact |  | Legacy GAAP |  | As Reported |  | Revenue Standard Impact |  | Legacy GAAP
Revenue |  | $ | 3,734 |  |  | $ | (24 | ) |  | $ | 3,710 |  |  | $ | 7,734 |  |  | $ | (185 | ) |  | $ | 7,549 |
Expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and Benefits |  | 2,135 |  |  | (10 | ) |  | 2,125 |  |  | 4,359 |  |  | (70 | ) |  | 4,289 |
Other Operating Expenses |  | 908 |  |  | — |  |  | 908 |  |  | 1,776 |  |  | — |  |  | 1,776 |
Operating Expenses |  | 3,043 |  |  | (10 | ) |  | 3,033 |  |  | 6,135 |  |  | (70 | ) |  | 6,065 |
Operating Income |  | 691 |  |  | (14 | ) |  | 677 |  |  | 1,599 |  |  | (115 | ) |  | 1,484 |
Other Net Benefit Credits |  | 65 |  |  | — |  |  | 65 |  |  | 131 |  |  | — |  |  | 131 |
Interest Income |  | 3 |  |  | — |  |  | 3 |  |  | 6 |  |  | — |  |  | 6 |
Interest Expense |  | (68 | ) |  | — |  |  | (68 | ) |  | (129 | ) |  | — |  |  | (129 | )
Investment Income |  | 28 |  |  | — |  |  | 28 |  |  | 28 |  |  | — |  |  | 28 |
Income Before Income Taxes |  | 719 |  |  | (14 | ) |  | 705 |  |  | 1,635 |  |  | (115 | ) |  | 1,520 |
Income Tax Expense |  | 183 |  |  | (4 | ) |  | 179 |  |  | 403 |  |  | (30 | ) |  | 373 |
Net Income Before Non-Controlling Interests |  | 536 |  |  | (10 | ) |  | 526 |  |  | 1,232 |  |  | (85 | ) |  | 1,147 |
Less: Net Income Attributable to Non-Controlling Interests |  | 5 |  |  | — |  |  | 5 |  |  | 11 |  |  | — |  |  | 11 |
Net Income Attributable to the Company |  | $ | 531 |  |  | $ | (10 | ) |  | $ | 521 |  |  | $ | 1,221 |  |  | $ | (85 | ) |  | $ | 1,136 |
The impact of adoption of the new revenue standard on the Company's consolidated balance sheet was as follows (in millions):
|  | June 30, 2018
|  | As Reported |  | Revenue Standard Impact |  | Legacy GAAP
ASSETS |  |  |  |  |  |
Current assets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1,036 |  |  | $ | — |  |  | $ | 1,036 |
Net receivables |  | 4,601 |  |  | (254 | ) |  | 4,347 |
Other current assets |  | 538 |  |  | (298 | ) |  | 240 |
Total current assets |  | 6,175 |  |  | (552 | ) |  | 5,623 |
Goodwill and intangible assets |  | 10,411 |  |  | — |  |  | 10,411 |
Fixed assets, net |  | 698 |  |  | — |  |  | 698 |
Pension related assets |  | 1,808 |  |  | — |  |  | 1,808 |
Deferred tax assets |  | 532 |  |  | 133 |  |  | 665 |
Other assets |  | 1,535 |  |  | (230 | ) |  | 1,305 |
TOTAL ASSETS |  | $ | 21,159 |  |  | $ | (649 | ) |  | $ | 20,510 |
LIABILITIES AND EQUITY |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |
Short-term debt |  | $ | 439 |  |  | $ | — |  |  | $ | 439 |
Accounts payable and accrued liabilities |  | 2,246 |  |  | (177 | ) |  | 2,069 |
Accrued compensation and employee benefits |  | 1,103 |  |  | — |  |  | 1,103 |
Accrued income taxes |  | 216 |  |  | — |  |  | 216 |
Dividends payable |  | 212 |  |  | — |  |  | 212 |
Total current liabilities |  | 4,216 |  |  | (177 | ) |  | 4,039 |
Fiduciary liabilities |  | 5,118 |  |  | — |  |  | 5,118 |
Less - cash and investments held in a fiduciary capacity |  | (5,118 | ) |  | — |  |  | (5,118 | )
|  | — |  |  | — |  |  | — |
Long-term debt |  | 5,813 |  |  | — |  |  | 5,813 |
Pension, post-retirement and post-employment benefits |  | 1,768 |  |  | — |  |  | 1,768 |
Liabilities for errors and omissions |  | 303 |  |  | — |  |  | 303 |
Other liabilities |  | 1,262 |  |  | (23 | ) |  | 1,239 |
Total equity |  | 7,797 |  |  | (449 | ) |  | 7,348 |
TOTAL LIABILITIES AND EQUITY |  | $ | 21,159 |  |  | $ | (649 | ) |  | $ | 20,510 |
The impact of adoption of the new revenue standard on the Company's consolidated statement of cash flow was as follows (in millions):
|  | Six Months Ended June 30, 2018
|  | As Reported |  | Revenue Standard Impact |  | Legacy GAAP
Operating cash flows: |  |  |  |  |  |
Net income before non-controlling interests |  | $ | 1,232 |  |  | $ | (85 | ) |  | $ | 1,147 |
Adjustments to reconcile net income to cash provided by operations: |  |  |  |  |  |
Depreciation and amortization of fixed assets and capitalized software |  | 159 |  |  | — |  |  | 159 |
Amortization of intangible assets |  | 88 |  |  | — |  |  | 88 |
Adjustments and payments related to contingent consideration liability |  | 2 |  |  | — |  |  | 2 |
Provision for deferred income taxes |  | 34 |  |  | — |  |  | 34 |
Gain on investments |  | (28 | ) |  | — |  |  | (28 | )
Gain on disposition of assets |  | (1 | ) |  | — |  |  | (1 | )
Share-based compensation expense |  | 99 |  |  | — |  |  | 99 |
Changes in assets and liabilities: |  |  |  |  |  |
Net receivables |  | (388 | ) |  | 186 |  |  | (202 | )
Other current assets |  | 4 |  |  | (20 | ) |  | (16 | )
Other assets |  | (10 | ) |  | (26 | ) |  | (36 | )
Accounts payable and accrued liabilities |  | 30 |  |  | (55 | ) |  | (25 | )
Accrued compensation and employee benefits |  | (614 | ) |  | — |  |  | (614 | )
Accrued income taxes |  | 18 |  |  | — |  |  | 18 |
Contributions to pension excess of expense/credit |  | (178 | ) |  | — |  |  | (178 | )
Other liabilities |  | (10 | ) |  | — |  |  | (10 | )
Effect of exchange rate changes |  | (24 | ) |  | — |  |  | (24 | )
Net cash provided by operations |  | $ | 413 |  |  | $ | — |  |  | $ | 413 |
The adoption of the revenue recognition standard did not have an impact on the Company's financing or investing cash flows.
New Accounting Pronouncement, Early Adoption | The impact on the Company's balance sheet as of January 1, 2018 related to the adoption of the accounting standards using the modified retrospective approach as discussed above is as follows:
|  |  | Adjustments |  |
| Balance at December 31, 2017 |  | Revenue Recognition |  | Financial Instruments |  | Intra-Entity Transfer |  | Balance at January 1, 2018
Balance Sheet |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |
Net Receivables | $ | 4,133 |  |  | $ | 68 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,201 |
Other Current Assets | 224 |  |  | 318 |  |  | — |  |  | — |  |  | 542 |
Other Assets | 1,430 |  |  | 226 |  |  | — |  |  | — |  |  | 1,656 |
Deferred Tax Assets | 669 |  |  | (103 | ) |  | — |  |  | (14 | ) |  | 552 |
Liabilities |  |  |  |  |  |  |  |  |
Accounts Payable and Accrued Liabilities | 2,083 |  |  | 122 |  |  | — |  |  | — |  |  | 2,205 |
Other Liabilities | 1,311 |  |  | 23 |  |  | — |  |  | — |  |  | 1,334 |
Equity |  |  |  |  |  |  |  |  |
Other Accumulated Comprehensive Income | — |  |  | — |  |  | (14 | ) |  | — |  |  | (14 | )
Retained Earnings | $ | 13,140 |  |  | $ | 364 |  |  | $ | 14 |  |  | $ | (14 | ) |  | $ | 13,504 |

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