XML 19 R8.htm IDEA: XBRL DOCUMENT v3.7.0.1
Segment Reporting
 6 Months Ended
Jun. 30, 2017
Segment Reporting [Abstract]  
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. All of our segments involve the delivery of business process services and include service arrangements where we manage a customer's business activity or process.
Beginning in 2017, we changed our reporting segments to align the Healthcare business based upon customer focus between Commercial Industries and Public Sector in an effort to better reflect how we manage our business. Our financial performance is now based on the following three reportable segments (the prior period has been adjusted to reflect the new reporting segments):
•
Commercial Industries
•
Public Sector
•
Other
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 customer care, human resource management 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.
Other: Other includes our Government Health Enterprise Medicaid Platform business, where we are limiting our focus to our current Health Enterprise clients and our Student Loan business, which is in run-off mode. Other also includes non-allocated corporate expenses as well as inter-segment eliminations.
Selected financial information for our reportable segments is as follows:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
(in millions)
 
Segment
Revenue
 
Segment Profit (Loss)
 
Segment
Revenue
 
Segment Profit(Loss)
2017
 
 
 
 
 
 
 
 
Commercial Industries
 
$
876

 
$
32

 
$
1,799

 
$
61

Public Sector
 
540

 
59

 
1,089

 
120

Other
 
80

 
(4
)
 
161

 
(8
)
Total
 
$
1,496

 
$
87

 
$
3,049

 
$
173

2016
 
 
 
 
 
 
 
 
Commercial Industries
 
$
939

 
$
35

 
$
1,946

 
$
61

Public Sector
 
579

 
78

 
1,150

 
139

Other
 
95

 
(36
)
 
202

 
(52
)
Total
 
$
1,613

 
$
77

 
$
3,298

 
$
148


 
(in millions)
Three Months Ended
June 30,
 
Six Months Ended
June 30,
Reconciliation to Pre-tax Loss
2017
 
2016
 
2017
 
2016
Segment Profit
$
87

 
$
77

 
$
173

 
$
148

Reconciling items:
 
 
 
 
 
 
 
Amortization of intangible assets
(61
)
 
(62
)
 
(122
)
 
(137
)
Restructuring and related costs
(36
)
 
(23
)
 
(54
)
 
(49
)
Interest Expense
(34
)
 
(1
)
 
(70
)
 
(2
)
(Gain) on sale of asset(1)
24

 
—

 
24

 
—

Related party interest
—

 
(10
)
 
—

 
(20
)
Separation costs(2)
(1
)
 
(16
)
 
(6
)
 
(19
)
Other income (expense), net
10

 
1

 
22

 
(9
)
Pre-tax Loss
$
(11
)
 
$
(34
)
 
$
(33
)
 
$
(88
)

__________________________
(1)
Represents a $24 million gain ($15 million net of tax) on sale of real property in June 2017.
(2)
Separation costs are expenses incurred in connection with the separation into an independent, publicly-traded company. These costs are primarily for 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, such as those related to human resources, brand management, real estate and information management to the extent not capitalized.
Goodwill
As a result of the 2017 change in segments, we were required to test Goodwill for impairment. As a result of the first quarter 2017 goodwill impairment test, the Commercial Industries reporting unit, which was impaired during the fourth quarter of 2016 and has approximately $1.5 billion of goodwill remaining, has a fair value that exceeded its carrying value by approximately 8.9%. To the extent the assumptions underlying the goodwill impairment test change, there could be additional impairments in the future.

No interim goodwill impairment trigger was identified as there was no significant change in the profitability in each of the reporting units.