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• | Persuasive evidence of an arrangement exists |
• | The products or services have been delivered to the customer |
• | The sales price is fixed or determinable and free of contingencies or significant uncertainties |
• | Collectibility is reasonably assured |
In millions | 2014 | 2013 | 2012 | ||||||||
Depreciation expense | $ | 51 | $ | 48 | $ | 41 |
Internal-use Software | External-use Software | ||||||||||||||||||||||
In millions | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||
Beginning balance at January 1 | $ | 12 | $ | 12 | $ | 11 | $ | 183 | $ | 161 | $ | 129 | |||||||||||
Capitalized | 7 | 6 | 6 | 68 | 72 | 75 | |||||||||||||||||
Amortization | (6 | ) | (6 | ) | (5 | ) | (65 | ) | (50 | ) | (43 | ) | |||||||||||
Ending balance at December 31 | $ | 13 | $ | 12 | $ | 12 | $ | 186 | $ | 183 | $ | 161 |
Actual | For the year ended (estimated) | ||||||||||||||||||||||
In millions | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||
Internal-use software amortization expense | $ | 6 | $ | 5 | $ | 4 | $ | 3 | $ | 1 | $ | — | |||||||||||
External-use software amortization expense | $ | 65 | $ | 67 | $ | 55 | $ | 38 | $ | 20 | $ | 6 |
For the year ended December 31 | |||||||||||
In millions, except earnings per share | 2014 | 2013 | 2012 | ||||||||
Net income available for common stockholders | $ | 367 | $ | 377 | $ | 419 | |||||
Weighted average outstanding shares of common stock | 155.3 | 163.4 | 168.2 | ||||||||
Dilutive effect of employee stock options and restricted stock | 2.5 | 3.0 | 3.5 | ||||||||
Common stock and common stock equivalents | 157.8 | 166.4 | 171.7 | ||||||||
Earnings per share: | |||||||||||
Basic | $ | 2.36 | $ | 2.31 | $ | 2.49 | |||||
Diluted | $ | 2.33 | $ | 2.27 | $ | 2.44 |
|
At December 31 | |||||||
In millions | 2014 | 2013 | |||||
Accounts receivable | |||||||
Trade | $ | 635 | $ | 731 | |||
Other | 3 | 4 | |||||
Accounts receivable, gross | 638 | 735 | |||||
Less: allowance for doubtful accounts | (19 | ) | (18 | ) | |||
Total accounts receivable, net | $ | 619 | $ | 717 | |||
Inventories | |||||||
Finished goods | $ | 21 | $ | 39 | |||
Service parts | 17 | 17 | |||||
Total inventories | $ | 38 | $ | 56 | |||
Other current assets | |||||||
Current deferred tax assets | $ | 28 | $ | 34 | |||
Other | 53 | 61 | |||||
Total other current assets | $ | 81 | $ | 95 | |||
Property and equipment | |||||||
Land | $ | 8 | $ | 8 | |||
Buildings and improvements | 77 | 74 | |||||
Machinery and other equipment | 341 | 309 | |||||
Property and equipment, gross | 426 | 391 | |||||
Less: accumulated depreciation | (267 | ) | (230 | ) | |||
Total property and equipment, net | $ | 159 | $ | 161 | |||
Other assets | |||||||
Available-for-sale securities | $ | 78 | $ | — | |||
Other | 20 | 58 | |||||
Total other assets | $ | 98 | $ | 58 | |||
Other current liabilities | |||||||
Sales and value-added taxes | $ | 40 | $ | 34 | |||
Other | 61 | 76 | |||||
Total other current liabilities | $ | 101 | $ | 110 | |||
Deferred revenue | |||||||
Deferred revenue, current | $ | 370 | $ | 390 | |||
Long-term deferred revenue | 18 | 25 | |||||
Total deferred revenue | $ | 388 | $ | 415 |
|
In millions | Balance December 31, 2013 | Additions | Currency Translation Adjustments | Balance December 31, 2014 | |||||||||||
Goodwill | |||||||||||||||
Americas | $ | 626 | $ | 30 | $ | (2 | ) | $ | 654 | ||||||
International | 320 | — | (26 | ) | 294 | ||||||||||
Total goodwill | $ | 946 | $ | 30 | $ | (28 | ) | $ | 948 |
December 31, 2014 | December 31, 2013 | ||||||||||||||||
In millions | Amortization Life (in Years) | Gross Carrying Amount | Accumulated Amortization and Currency Translation Adjustments | Gross Carrying Amount | Accumulated Amortization and Currency Translation Adjustments | ||||||||||||
Acquired intangible assets | |||||||||||||||||
Intellectual property/developed technology | 1 to 7 | $ | 186 | $ | (95 | ) | $ | 153 | $ | (70 | ) | ||||||
Customer relationships | 3 to 10 | 77 | (35 | ) | 77 | (23 | ) | ||||||||||
Trademarks/trade names | 5 | 1 | (1 | ) | 15 | (7 | ) | ||||||||||
In-process research and development | 5 | 5 | (2 | ) | 5 | (1 | ) | ||||||||||
Non-compete agreements | 3 | — | — | 1 | (1 | ) | |||||||||||
Total | $ | 269 | $ | (133 | ) | $ | 251 | $ | (102 | ) |
Actual | For the year ended (estimated) | ||||||||||||||||||||||||||||||
In millions | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||||||||
Amortization expense | $ | 37 | $ | 44 | $ | 47 | $ | 43 | $ | 34 | $ | 25 | $ | 14 | $ | 11 |
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In millions | 2014 | 2013 | 2012 | ||||||||
Income before income taxes | |||||||||||
United States | $ | 301 | $ | 362 | $ | 388 | |||||
Foreign | 193 | 146 | 190 | ||||||||
Total income before income taxes | $ | 494 | $ | 508 | $ | 578 |
In millions | 2014 | 2013 | 2012 | ||||||||
Income tax expense | |||||||||||
Current | |||||||||||
Federal | $ | 94 | $ | 78 | $ | 50 | |||||
State and local | 8 | 10 | 9 | ||||||||
Foreign | 27 | 26 | 23 | ||||||||
Deferred | |||||||||||
Federal | 1 | 18 | 72 | ||||||||
State and local | — | 2 | 7 | ||||||||
Foreign | (3 | ) | (3 | ) | (2 | ) | |||||
Total income tax expense | $ | 127 | $ | 131 | $ | 159 | |||||
Effective tax rate | 25.7 | % | 25.8 | % | 27.5 | % |
2014 | 2013 | 2012 | ||||||
Income tax expense at the U.S. federal tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
Foreign income tax differential | (9.0 | )% | (7.3 | )% | (8.1 | )% | ||
State and local income taxes | 0.5 | % | 0.4 | % | 0.7 | % | ||
U.S. permanent book/tax differences | (1.7 | )% | (1.6 | )% | (0.5 | )% | ||
Other, net | 0.9 | % | (0.7 | )% | 0.4 | % | ||
Effective tax rate | 25.7 | % | 25.8 | % | 27.5 | % |
In millions | 2014 | 2013 | |||||
Deferred income tax assets | |||||||
Employee pensions and other liabilities | $ | 61 | $ | 57 | |||
Other balance sheet reserves and allowances | 22 | 22 | |||||
Tax loss and credit carryforwards | 59 | 41 | |||||
Deferred revenue | — | 2 | |||||
Capitalized research and development | — | 5 | |||||
Other | — | 1 | |||||
Total deferred income tax assets | 142 | 128 | |||||
Valuation allowance | (20 | ) | (13 | ) | |||
Net deferred income tax assets | 122 | 115 | |||||
Deferred income tax liabilities | |||||||
Intangibles and capitalized software | 102 | 117 | |||||
Property and equipment | 29 | 29 | |||||
Deferred revenue | 17 | — | |||||
Other | 12 | — | |||||
Total deferred income tax liabilities | 160 | 146 | |||||
Total net deferred income tax liabilities | $ | (38 | ) | $ | (31 | ) |
In millions | 2014 | 2013 | |||||
Balance at January 1 | $ | 34 | $ | 31 | |||
Gross increases for prior period tax positions | 4 | 1 | |||||
Gross decreases for prior period tax positions | (3 | ) | (3 | ) | |||
Gross increases for current period tax positions | 4 | 5 | |||||
Decreases due to the lapse of applicable statute of limitations | (3 | ) | — | ||||
Balance at December 31 | $ | 36 | $ | 34 |
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In millions | 2014 | 2013 | 2012 | ||||||||
Stock options | $ | 13 | $ | 14 | $ | 15 | |||||
Restricted stock | 33 | 32 | 28 | ||||||||
Employee share repurchase program (compensatory effective 1/1/13) | 4 | 3 | — | ||||||||
Total stock-based compensation before income taxes | 50 | 49 | 43 | ||||||||
Tax benefit | (16 | ) | (16 | ) | (14 | ) | |||||
Total stock-based compensation, net of tax | $ | 34 | $ | 33 | $ | 29 |
2014 | 2013 | 2012 | ||||||
Dividend yield | — | % | — | % | — | % | ||
Risk-free interest rate | 1.73 | % | 1.77 | % | 0.87 | % | ||
Expected volatility | 37.8 | % | 37.6 | % | 35.7 | % | ||
Expected term (years) | 6.3 | 6.3 | 6.3 |
Shares in thousands | Shares Under Option | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in millions) | ||||||||
Outstanding at January 1, 2013 | 7,012 | $ | 33.27 | 6.3 | $ | 100 | ||||||
Granted | 921 | $ | 44.43 | |||||||||
Exercised | (561 | ) | $ | 19.02 | ||||||||
Canceled | (36 | ) | $ | 41.83 | ||||||||
Forfeited | (99 | ) | $ | 50.98 | ||||||||
Outstanding at December 31, 2014 | 7,237 | $ | 35.50 | 6.1 | $ | 78 | ||||||
Fully vested and expected to vest at December 31, 2014 | 7,194 | $ | 35.44 | 6.0 | $ | 78 | ||||||
Exercisable at December 31, 2014 | 5,190 | $ | 30.63 | 4.9 | $ | 78 |
In millions | 2014 | 2013 | 2012 | ||||||||
Intrinsic value of options exercised | $ | 14 | $ | 19 | $ | 113 | |||||
Cash received from option exercises | $ | 11 | $ | 9 | $ | 43 | |||||
Tax benefit realized from option exercises | $ | 5 | $ | 6 | $ | 38 |
Shares in thousands | Number of Shares | Weighted- Average Grant Date Fair Value per Share | ||||
Unvested shares at January 1, 2014 | 2,578 | $ | 50.30 | |||
Granted | 1,447 | $ | 44.39 | |||
Vested | (537 | ) | $ | 50.91 | ||
Forfeited/canceled | (236 | ) | $ | 54.17 | ||
Unvested shares at December 31, 2014 | 3,252 | $ | 47.18 |
2014 | 2013 | 2012 | |||||||||
Weighted-average fair value of restricted stock units granted | $ | 44.39 | $ | 48.24 | $ | 60.71 | |||||
Total fair value of shares vested (in millions) | $ | 27 | $ | 30 | $ | 15 |
Shares in thousands | Number of Shares | Weighted- Average Grant Date Fair Value | ||||
Service-based shares | 1,361 | $ | 44.28 | |||
Performance-based shares | 86 | $ | 46.26 | |||
Total stock grants | 1,447 | $ | 44.39 |
2012 | |||
Grant date fair value per share of Company common stock | $ | 58.63 | |
Expected volatility | 36.44 | % | |
Risk-free interest rate | 0.47 | % | |
Dividend yield | — | ||
Performance vesting hurdle - future fair value per share of Company common stock | $ | 85.00 |
In millions | 2014 | 2013 | 2012 | ||||||||
Employee share purchases | 0.4 | 0.4 | 0.2 | ||||||||
Aggregate cost | $ | 18 | $ | 20 | $ | 12 |
|
2014 | 2013 | 2012 | |||||||||||||||||||||
In millions | Pension | Postemployment | Pension | Postemployment | Pension | Postemployment | |||||||||||||||||
Service cost | $ | 9 | $ | 4 | $ | 8 | $ | 3 | $ | 8 | $ | 4 | |||||||||||
Interest cost | 4 | 1 | 4 | 1 | 4 | 1 | |||||||||||||||||
Expected return on plan assets | (2 | ) | — | (2 | ) | — | (3 | ) | — | ||||||||||||||
Settlement charge | 1 | — | 1 | — | 1 | — | |||||||||||||||||
Amortization of actuarial loss (gain) | 2 | (1 | ) | 2 | (1 | ) | 1 | — | |||||||||||||||
Amortization of prior service cost (credit) | (1 | ) | — | — | — | — | — | ||||||||||||||||
Total costs | $ | 13 | $ | 4 | $ | 13 | $ | 3 | $ | 11 | $ | 5 |
Pension | Postemployment | ||||||||||||||
In millions | 2014 | 2013 | 2014 | 2013 | |||||||||||
Change in benefit obligation | |||||||||||||||
Benefit obligation at January 1 | $ | 129 | $ | 122 | $ | 27 | $ | 25 | |||||||
Service cost | 9 | 8 | 4 | 3 | |||||||||||
Interest cost | 4 | 4 | 1 | 1 | |||||||||||
Plan participant contributions | 1 | 1 | — | — | |||||||||||
Actuarial loss | 18 | 6 | 19 | 3 | |||||||||||
Benefits paid | (19 | ) | (6 | ) | (11 | ) | (4 | ) | |||||||
Currency translation adjustments | (15 | ) | (6 | ) | (1 | ) | (1 | ) | |||||||
New plans | 3 | — | — | — | |||||||||||
Benefit obligation at December 31 | 130 | 129 | 39 | 27 | |||||||||||
Change in plan assets | |||||||||||||||
Fair value of plan assets at January 1 | $ | 76 | $ | 69 | $ | — | $ | — | |||||||
Actual return on plan assets | 7 | 9 | — | — | |||||||||||
Company contributions | 8 | 10 | — | — | |||||||||||
Benefits paid | (19 | ) | (6 | ) | — | — | |||||||||
Currency translation adjustments | (7 | ) | (7 | ) | — | — | |||||||||
Plan participant contribution | 1 | 1 | — | — | |||||||||||
New plans | 1 | — | — | — | |||||||||||
Fair value of plan assets at December 31 | 67 | 76 | — | — | |||||||||||
Funded status (underfunded) | $ | (63 | ) | $ | (53 | ) | $ | (39 | ) | $ | (27 | ) | |||
Amounts Recognized in the Balance Sheet | |||||||||||||||
Non-current assets | $ | 4 | $ | 1 | $ | — | $ | — | |||||||
Current liabilities | (1 | ) | (1 | ) | (5 | ) | (4 | ) | |||||||
Non-current liabilities | (66 | ) | (53 | ) | (34 | ) | (23 | ) | |||||||
Net amounts recognized | $ | (63 | ) | $ | (53 | ) | $ | (39 | ) | $ | (27 | ) | |||
Amounts Recognized in Accumulated Other Comprehensive Income | |||||||||||||||
Unrecognized Net actuarial loss (gain) | $ | 33 | $ | 26 | $ | 6 | $ | (12 | ) | ||||||
Unrecognized Prior service (credit) cost | — | (2 | ) | 1 | — | ||||||||||
Total | $ | 33 | $ | 24 | $ | 7 | $ | (12 | ) |
In millions | 2014 | 2013 | |||||
Accumulated pension benefit obligation | $ | 118 | $ | 120 |
In millions | 2014 | 2013 | |||||
Projected benefit obligation | $ | 69 | $ | 55 | |||
Accumulated benefit obligation | $ | 61 | $ | 49 | |||
Fair value of plan assets | $ | 3 | $ | 3 |
Pension | Postemployment | ||||||||||||||
In millions | 2014 | 2013 | 2014 | 2013 | |||||||||||
Actuarial loss (gain) arising during the year | $ | 14 | $ | (1 | ) | $ | 18 | $ | 2 | ||||||
Amortization of (gain) loss included in net periodic benefit cost | (2 | ) | (2 | ) | 1 | 1 | |||||||||
Prior service cost arising during the year | 1 | — | — | ||||||||||||
Recognition of loss due to settlement | (1 | ) | (1 | ) | — | — | |||||||||
Foreign currency exchange | (3 | ) | (1 | ) | — | — | |||||||||
Total recognized in other comprehensive income | $ | 9 | $ | (5 | ) | $ | 19 | $ | 3 |
In millions | Pension | Postemployment | |||||
Net loss to be recognized in other comprehensive income | $ | 3 | $ | — |
Pension Benefit Obligations | Pension Benefit Cost | ||||||||
2014 | 2013 | 2014 | 2013 | 2012 | |||||
Discount rate | 2.3% | 3.0% | 3.0% | 3.0% | 3.7% | ||||
Rate of compensation increase | 3.3% | 3.2% | 3.2% | 3.3% | 3.3% | ||||
Expected return on plan assets | N/A | N/A | 3.4% | 3.4% | 4.0% | ||||
Postemployment Benefit Obligations | Postemployment Benefit Cost | ||||||||
2014 | 2013 | 2014 | 2013 | 2012 | |||||
Discount rate | 3.5% | 3.8% | 3.8% | 3.4% | 4.1% | ||||
Rate of compensation increase | 3.0% | 3.7% | 3.7% | 3.8% | 3.7% | ||||
Involuntary turnover rate | 1.3% | 1.0% | 1.0% | 1.0% | 1.5% |
Actual Asset Allocation As of December 31 | Target Asset Allocation | |||||||
2014 | 2013 | |||||||
Equity securities | 32 | % | 34 | % | 31 | % | ||
Debt securities | 41 | % | 37 | % | 44 | % | ||
Insurance (annuity) contracts | 17 | % | 13 | % | 17 | % | ||
Real estate | 5 | % | 6 | % | 3 | % | ||
Other | 5 | % | 10 | % | 5 | % | ||
Total | 100 | % | 100 | % | 100 | % |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
In millions | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Money market funds | $ | 2 | $ | — | $ | 2 | $ | — | |||||||
Equity funds | 21 | — | 21 | — | |||||||||||
Bond/fixed-income funds | 28 | — | 28 | — | |||||||||||
Real-estate indirect investment | 4 | — | 4 | — | |||||||||||
Commodities/Other | 1 | — | 1 | — | |||||||||||
Insurance contracts | 11 | — | — | 11 | |||||||||||
Total Assets at fair value | $ | 67 | $ | — | $ | 56 | $ | 11 |
In millions | Insurance Contracts | ||
Balance as of January 1, 2014 | $ | 10 | |
Purchases, sales and settlements, net | 1 | ||
Balance as of December 31, 2014 | $ | 11 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
In millions | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Money market funds | $ | 3 | $ | — | $ | 3 | $ | — | |||||||
Equity funds | 26 | — | 26 | — | |||||||||||
Bond/fixed-income funds | 28 | — | 28 | — | |||||||||||
Real-estate indirect investment | 5 | — | 5 | — | |||||||||||
Commodities/Other | 4 | — | 4 | — | |||||||||||
Insurance contracts | 10 | — | — | 10 | |||||||||||
Total Assets at fair value | $ | 76 | $ | — | $ | 66 | $ | 10 |
In millions | Insurance Contracts | ||
Balance as of January 1, 2013 | $ | 8 | |
Purchases, sales and settlements, net | 2 | ||
Balance as of December 31, 2013 | $ | 10 |
Pension Benefits | Postemployment Benefits | ||||||
In millions | |||||||
Year | |||||||
2015 | $ | 3 | $ | 5 | |||
2016 | $ | 5 | $ | 5 | |||
2017 | $ | 6 | $ | 5 | |||
2018 | $ | 6 | $ | 5 | |||
2019 | $ | 5 | $ | 5 | |||
2020-2024 | $ | 32 | $ | 23 |
In millions | 2014 | 2013 | 2012 | ||||||||
U.S. savings plan | $ | 23 | $ | 23 | $ | 21 | |||||
International subsidiary savings plans | $ | 18 | $ | 17 | $ | 18 |
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In millions | 2014 | 2013 | |||||
Contract notional amount of foreign exchange forward contracts | $ | 116 | $ | 152 | |||
Net contract notional amount of foreign exchange forward contracts | $ | 17 | $ | 24 |
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In millions | 2014 | 2013 | 2012 | ||||||||
Beginning balance at January 1 | $ | 8 | $ | 8 | $ | 6 | |||||
Accruals for warranties issued | 16 | 15 | 17 | ||||||||
Settlements (in cash or kind) | (17 | ) | (15 | ) | (15 | ) | |||||
Balance at end of period | $ | 7 | $ | 8 | $ | 8 |
Total | |||||||||||||||||||||||
In millions | Amounts | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||
Operating lease obligations | $ | 72 | $ | 23 | $ | 18 | $ | 15 | $ | 12 | $ | 4 | |||||||||||
Sublease rentals | (8 | ) | (3 | ) | (3 | ) | (2 | ) | — | — | |||||||||||||
Total committed operating leases less sublease rentals | $ | 64 | $ | 20 | $ | 15 | $ | 13 | $ | 12 | $ | 4 |
In millions | 2014 | 2013 | 2012 | ||||||||
Rental expense | $ | 26 | $ | 26 | $ | 25 | |||||
Sublease rental income | $ | 3 | $ | 3 | $ | 3 |
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Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
In millions | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Assets | |||||||||||||||
Money market funds | $ | 393 | $ | 393 | $ | — | $ | — | |||||||
Available-for-sale securities | 78 | 78 | — | — | |||||||||||
Total assets at fair value | $ | 471 | $ | 471 | $ | — | $ | — |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
In millions | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Assets | |||||||||||||||
Money market funds | $ | 318 | $ | 318 | $ | — | $ | — |
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In millions | |||
2015 | $ | 53 | |
2016 | 195 | ||
Total | $ | 248 |
In millions | 2014 | 2013 | 2012 | ||||||||
Interest expense | $ | 3 | $ | 4 | $ | 4 |
|
In millions | 2014 | 2013 | 2012 | ||||||||
Segment revenue | |||||||||||
Americas (1) | $ | 1,619 | $ | 1,633 | $ | 1,619 | |||||
International | 1,113 | 1,059 | 1,046 | ||||||||
Total revenue | 2,732 | 2,692 | 2,665 | ||||||||
Segment gross margin | |||||||||||
Americas | 943 | 947 | 967 | ||||||||
International | 536 | 526 | 524 | ||||||||
Total gross margin | 1,479 | 1,473 | 1,491 | ||||||||
Selling, general and administrative expenses | 770 | 757 | 728 | ||||||||
Research and development expenses | 206 | 184 | 183 | ||||||||
Total income from operations | 503 | 532 | 580 | ||||||||
Other expense, net | (9 | ) | (24 | ) | (2 | ) | |||||
Income before income taxes | $ | 494 | $ | 508 | $ | 578 |
(1) | The Americas region includes revenue generated in the United States of $1,458 million in 2014, $1,511 million in 2013 and $1,478 million in 2012. |
In millions | 2014 | 2013 | 2012 | ||||||||
Products (software and hardware)(1) | $ | 1,227 | $ | 1,230 | $ | 1,297 | |||||
Consulting services | 817 | 818 | 776 | ||||||||
Maintenance services | 688 | 644 | 592 | ||||||||
Total services | 1,505 | 1,462 | 1,368 | ||||||||
Total revenue | $ | 2,732 | $ | 2,692 | $ | 2,665 |
(1) | Our analytic database software and hardware products are often sold and delivered together in the form of a “node” of capacity as an integrated technology solution. Accordingly, it is impracticable to provide the breakdown of revenue from various types of software and hardware products. |
In millions | 2014 | 2013 | |||||
United States | $ | 130 | $ | 131 | |||
Americas (excluding United States) | 4 | 3 | |||||
International | 25 | 27 | |||||
Property and equipment, net | $ | 159 | $ | 161 |
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|
In millions | Available-for-sale securities | Defined benefit plans | Foreign currency translation adjustments | Total AOCI | |||||||||||
Balance as of December 31, 2011 | $ | — | $ | (9 | ) | $ | 25 | $ | 16 | ||||||
Other comprehensive income before reclassifications | — | 2 | 9 | 11 | |||||||||||
Amounts reclassified from AOCI | — | 2 | — | 2 | |||||||||||
Net other comprehensive income | — | 4 | 9 | 13 | |||||||||||
Balance as of December 31, 2012 | $ | — | $ | (5 | ) | $ | 34 | $ | 29 | ||||||
Other comprehensive income before reclassifications | — | — | 2 | 2 | |||||||||||
Amounts reclassified from AOCI | — | 2 | — | 2 | |||||||||||
Net other comprehensive income | — | 2 | 2 | 4 | |||||||||||
Balance as of December 31, 2013 | $ | — | $ | (3 | ) | $ | 36 | $ | 33 | ||||||
Other comprehensive income (loss) before reclassifications | 31 | (22 | ) | (47 | ) | (38 | ) | ||||||||
Amounts reclassified from AOCI | — | 1 | — | 1 | |||||||||||
Net other comprehensive income (loss) | 31 | (21 | ) | (47 | ) | (37 | ) | ||||||||
Balance as of December 31, 2014 | $ | 31 | $ | (24 | ) | $ | (11 | ) | $ | (4 | ) |
In millions | For the year ended December 31 | |||||||||||||
AOCI Component | Location | 2014 | 2013 | 2012 | ||||||||||
Defined benefit plans | Cost of services | $ | 1 | $ | 2 | $ | 1 | |||||||
Defined benefit plans | Selling, general and administrative expenses | — | 1 | — | ||||||||||
Defined benefit plans | Research and development expenses | — | (1 | ) | 1 | |||||||||
Defined benefit plans | Net income | $ | 1 | $ | 2 | $ | 2 |
|
In millions, except per share amounts | First | Second | Third | Fourth | |||||||||||
2014 | |||||||||||||||
Total revenues | $ | 628 | $ | 676 | $ | 667 | $ | 761 | |||||||
Gross margin | $ | 333 | $ | 371 | $ | 350 | $ | 425 | |||||||
Operating income | $ | 89 | $ | 133 | $ | 123 | $ | 158 | |||||||
Net income | $ | 59 | $ | 96 | $ | 94 | $ | 118 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.37 | $ | 0.61 | $ | 0.61 | $ | 0.78 | |||||||
Diluted | $ | 0.37 | $ | 0.60 | $ | 0.60 | $ | 0.77 | |||||||
2013 | |||||||||||||||
Total revenues | $ | 587 | $ | 670 | $ | 666 | $ | 769 | |||||||
Gross margin | $ | 305 | $ | 379 | $ | 358 | $ | 431 | |||||||
Operating income | $ | 76 | $ | 147 | $ | 132 | $ | 177 | |||||||
Net income | $ | 59 | $ | 108 | $ | 98 | $ | 112 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.36 | $ | 0.66 | $ | 0.60 | $ | 0.69 | |||||||
Diluted | $ | 0.35 | $ | 0.65 | $ | 0.59 | $ | 0.68 |
|
|
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Description | Balance at Beginning of Period | Additions Charged to Costs & Expenses | Charged to Other Accounts* | Deductions | Balance at End of Period | |||||||||||||||
Allowance for doubtful accounts | ||||||||||||||||||||
Year ended December 31, 2014 | $ | 18 | $ | 3 | $ | — | $ | 2 | $ | 19 | ||||||||||
Year ended December 31, 2013 | $ | 18 | $ | 1 | $ | — | $ | 1 | $ | 18 | ||||||||||
Year ended December 31, 2012 | $ | 13 | $ | 2 | $ | 3 | $ | — | $ | 18 | ||||||||||
Deferred tax valuation allowance | ||||||||||||||||||||
Year ended December 31, 2014 | $ | 13 | $ | 7 | $ | — | $ | — | $ | 20 | ||||||||||
Year ended December 31, 2013 | $ | 9 | $ | 4 | $ | — | $ | — | $ | 13 | ||||||||||
Year ended December 31, 2012 | $ | — | $ | 9 | $ | — | $ | — | $ | 9 |
|
• | Persuasive evidence of an arrangement exists |
• | The products or services have been delivered to the customer |
• | The sales price is fixed or determinable and free of contingencies or significant uncertainties |
• | Collectibility is reasonably assured |
Internal-use Software | External-use Software | ||||||||||||||||||||||
In millions | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||
Beginning balance at January 1 | $ | 12 | $ | 12 | $ | 11 | $ | 183 | $ | 161 | $ | 129 | |||||||||||
Capitalized | 7 | 6 | 6 | 68 | 72 | 75 | |||||||||||||||||
Amortization | (6 | ) | (6 | ) | (5 | ) | (65 | ) | (50 | ) | (43 | ) | |||||||||||
Ending balance at December 31 | $ | 13 | $ | 12 | $ | 12 | $ | 186 | $ | 183 | $ | 161 |
Actual | For the year ended (estimated) | ||||||||||||||||||||||
In millions | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||
Internal-use software amortization expense | $ | 6 | $ | 5 | $ | 4 | $ | 3 | $ | 1 | $ | — | |||||||||||
External-use software amortization expense | $ | 65 | $ | 67 | $ | 55 | $ | 38 | $ | 20 | $ | 6 |
For the year ended December 31 | |||||||||||
In millions, except earnings per share | 2014 | 2013 | 2012 | ||||||||
Net income available for common stockholders | $ | 367 | $ | 377 | $ | 419 | |||||
Weighted average outstanding shares of common stock | 155.3 | 163.4 | 168.2 | ||||||||
Dilutive effect of employee stock options and restricted stock | 2.5 | 3.0 | 3.5 | ||||||||
Common stock and common stock equivalents | 157.8 | 166.4 | 171.7 | ||||||||
Earnings per share: | |||||||||||
Basic | $ | 2.36 | $ | 2.31 | $ | 2.49 | |||||
Diluted | $ | 2.33 | $ | 2.27 | $ | 2.44 |
|
In millions | 2014 | 2013 | 2012 | ||||||||
Depreciation expense | $ | 51 | $ | 48 | $ | 41 |
Internal-use Software | External-use Software | ||||||||||||||||||||||
In millions | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||
Beginning balance at January 1 | $ | 12 | $ | 12 | $ | 11 | $ | 183 | $ | 161 | $ | 129 | |||||||||||
Capitalized | 7 | 6 | 6 | 68 | 72 | 75 | |||||||||||||||||
Amortization | (6 | ) | (6 | ) | (5 | ) | (65 | ) | (50 | ) | (43 | ) | |||||||||||
Ending balance at December 31 | $ | 13 | $ | 12 | $ | 12 | $ | 186 | $ | 183 | $ | 161 |
Actual | For the year ended (estimated) | ||||||||||||||||||||||
In millions | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||
Internal-use software amortization expense | $ | 6 | $ | 5 | $ | 4 | $ | 3 | $ | 1 | $ | — | |||||||||||
External-use software amortization expense | $ | 65 | $ | 67 | $ | 55 | $ | 38 | $ | 20 | $ | 6 |
For the year ended December 31 | |||||||||||
In millions, except earnings per share | 2014 | 2013 | 2012 | ||||||||
Net income available for common stockholders | $ | 367 | $ | 377 | $ | 419 | |||||
Weighted average outstanding shares of common stock | 155.3 | 163.4 | 168.2 | ||||||||
Dilutive effect of employee stock options and restricted stock | 2.5 | 3.0 | 3.5 | ||||||||
Common stock and common stock equivalents | 157.8 | 166.4 | 171.7 | ||||||||
Earnings per share: | |||||||||||
Basic | $ | 2.36 | $ | 2.31 | $ | 2.49 | |||||
Diluted | $ | 2.33 | $ | 2.27 | $ | 2.44 |
|
At December 31 | |||||||
In millions | 2014 | 2013 | |||||
Accounts receivable | |||||||
Trade | $ | 635 | $ | 731 | |||
Other | 3 | 4 | |||||
Accounts receivable, gross | 638 | 735 | |||||
Less: allowance for doubtful accounts | (19 | ) | (18 | ) | |||
Total accounts receivable, net | $ | 619 | $ | 717 | |||
Inventories | |||||||
Finished goods | $ | 21 | $ | 39 | |||
Service parts | 17 | 17 | |||||
Total inventories | $ | 38 | $ | 56 | |||
Other current assets | |||||||
Current deferred tax assets | $ | 28 | $ | 34 | |||
Other | 53 | 61 | |||||
Total other current assets | $ | 81 | $ | 95 | |||
Property and equipment | |||||||
Land | $ | 8 | $ | 8 | |||
Buildings and improvements | 77 | 74 | |||||
Machinery and other equipment | 341 | 309 | |||||
Property and equipment, gross | 426 | 391 | |||||
Less: accumulated depreciation | (267 | ) | (230 | ) | |||
Total property and equipment, net | $ | 159 | $ | 161 | |||
Other assets | |||||||
Available-for-sale securities | $ | 78 | $ | — | |||
Other | 20 | 58 | |||||
Total other assets | $ | 98 | $ | 58 | |||
Other current liabilities | |||||||
Sales and value-added taxes | $ | 40 | $ | 34 | |||
Other | 61 | 76 | |||||
Total other current liabilities | $ | 101 | $ | 110 | |||
Deferred revenue | |||||||
Deferred revenue, current | $ | 370 | $ | 390 | |||
Long-term deferred revenue | 18 | 25 | |||||
Total deferred revenue | $ | 388 | $ | 415 |
|
In millions | Balance December 31, 2013 | Additions | Currency Translation Adjustments | Balance December 31, 2014 | |||||||||||
Goodwill | |||||||||||||||
Americas | $ | 626 | $ | 30 | $ | (2 | ) | $ | 654 | ||||||
International | 320 | — | (26 | ) | 294 | ||||||||||
Total goodwill | $ | 946 | $ | 30 | $ | (28 | ) | $ | 948 |
December 31, 2014 | December 31, 2013 | ||||||||||||||||
In millions | Amortization Life (in Years) | Gross Carrying Amount | Accumulated Amortization and Currency Translation Adjustments | Gross Carrying Amount | Accumulated Amortization and Currency Translation Adjustments | ||||||||||||
Acquired intangible assets | |||||||||||||||||
Intellectual property/developed technology | 1 to 7 | $ | 186 | $ | (95 | ) | $ | 153 | $ | (70 | ) | ||||||
Customer relationships | 3 to 10 | 77 | (35 | ) | 77 | (23 | ) | ||||||||||
Trademarks/trade names | 5 | 1 | (1 | ) | 15 | (7 | ) | ||||||||||
In-process research and development | 5 | 5 | (2 | ) | 5 | (1 | ) | ||||||||||
Non-compete agreements | 3 | — | — | 1 | (1 | ) | |||||||||||
Total | $ | 269 | $ | (133 | ) | $ | 251 | $ | (102 | ) |
Actual | For the year ended (estimated) | ||||||||||||||||||||||||||||||
In millions | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||||||||
Amortization expense | $ | 37 | $ | 44 | $ | 47 | $ | 43 | $ | 34 | $ | 25 | $ | 14 | $ | 11 |
|
In millions | 2014 | 2013 | 2012 | ||||||||
Income before income taxes | |||||||||||
United States | $ | 301 | $ | 362 | $ | 388 | |||||
Foreign | 193 | 146 | 190 | ||||||||
Total income before income taxes | $ | 494 | $ | 508 | $ | 578 |
In millions | 2014 | 2013 | 2012 | ||||||||
Income tax expense | |||||||||||
Current | |||||||||||
Federal | $ | 94 | $ | 78 | $ | 50 | |||||
State and local | 8 | 10 | 9 | ||||||||
Foreign | 27 | 26 | 23 | ||||||||
Deferred | |||||||||||
Federal | 1 | 18 | 72 | ||||||||
State and local | — | 2 | 7 | ||||||||
Foreign | (3 | ) | (3 | ) | (2 | ) | |||||
Total income tax expense | $ | 127 | $ | 131 | $ | 159 | |||||
Effective tax rate | 25.7 | % | 25.8 | % | 27.5 | % |
2014 | 2013 | 2012 | ||||||
Income tax expense at the U.S. federal tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
Foreign income tax differential | (9.0 | )% | (7.3 | )% | (8.1 | )% | ||
State and local income taxes | 0.5 | % | 0.4 | % | 0.7 | % | ||
U.S. permanent book/tax differences | (1.7 | )% | (1.6 | )% | (0.5 | )% | ||
Other, net | 0.9 | % | (0.7 | )% | 0.4 | % | ||
Effective tax rate | 25.7 | % | 25.8 | % | 27.5 | % |
In millions | 2014 | 2013 | |||||
Deferred income tax assets | |||||||
Employee pensions and other liabilities | $ | 61 | $ | 57 | |||
Other balance sheet reserves and allowances | 22 | 22 | |||||
Tax loss and credit carryforwards | 59 | 41 | |||||
Deferred revenue | — | 2 | |||||
Capitalized research and development | — | 5 | |||||
Other | — | 1 | |||||
Total deferred income tax assets | 142 | 128 | |||||
Valuation allowance | (20 | ) | (13 | ) | |||
Net deferred income tax assets | 122 | 115 | |||||
Deferred income tax liabilities | |||||||
Intangibles and capitalized software | 102 | 117 | |||||
Property and equipment | 29 | 29 | |||||
Deferred revenue | 17 | — | |||||
Other | 12 | — | |||||
Total deferred income tax liabilities | 160 | 146 | |||||
Total net deferred income tax liabilities | $ | (38 | ) | $ | (31 | ) |
In millions | 2014 | 2013 | |||||
Balance at January 1 | $ | 34 | $ | 31 | |||
Gross increases for prior period tax positions | 4 | 1 | |||||
Gross decreases for prior period tax positions | (3 | ) | (3 | ) | |||
Gross increases for current period tax positions | 4 | 5 | |||||
Decreases due to the lapse of applicable statute of limitations | (3 | ) | — | ||||
Balance at December 31 | $ | 36 | $ | 34 |
|
In millions | 2014 | 2013 | 2012 | ||||||||
Stock options | $ | 13 | $ | 14 | $ | 15 | |||||
Restricted stock | 33 | 32 | 28 | ||||||||
Employee share repurchase program (compensatory effective 1/1/13) | 4 | 3 | — | ||||||||
Total stock-based compensation before income taxes | 50 | 49 | 43 | ||||||||
Tax benefit | (16 | ) | (16 | ) | (14 | ) | |||||
Total stock-based compensation, net of tax | $ | 34 | $ | 33 | $ | 29 |
2014 | 2013 | 2012 | ||||||
Dividend yield | — | % | — | % | — | % | ||
Risk-free interest rate | 1.73 | % | 1.77 | % | 0.87 | % | ||
Expected volatility | 37.8 | % | 37.6 | % | 35.7 | % | ||
Expected term (years) | 6.3 | 6.3 | 6.3 |
Shares in thousands | Shares Under Option | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in millions) | ||||||||
Outstanding at January 1, 2013 | 7,012 | $ | 33.27 | 6.3 | $ | 100 | ||||||
Granted | 921 | $ | 44.43 | |||||||||
Exercised | (561 | ) | $ | 19.02 | ||||||||
Canceled | (36 | ) | $ | 41.83 | ||||||||
Forfeited | (99 | ) | $ | 50.98 | ||||||||
Outstanding at December 31, 2014 | 7,237 | $ | 35.50 | 6.1 | $ | 78 | ||||||
Fully vested and expected to vest at December 31, 2014 | 7,194 | $ | 35.44 | 6.0 | $ | 78 | ||||||
Exercisable at December 31, 2014 | 5,190 | $ | 30.63 | 4.9 | $ | 78 |
In millions | 2014 | 2013 | 2012 | ||||||||
Intrinsic value of options exercised | $ | 14 | $ | 19 | $ | 113 | |||||
Cash received from option exercises | $ | 11 | $ | 9 | $ | 43 | |||||
Tax benefit realized from option exercises | $ | 5 | $ | 6 | $ | 38 |
Shares in thousands | Number of Shares | Weighted- Average Grant Date Fair Value per Share | ||||
Unvested shares at January 1, 2014 | 2,578 | $ | 50.30 | |||
Granted | 1,447 | $ | 44.39 | |||
Vested | (537 | ) | $ | 50.91 | ||
Forfeited/canceled | (236 | ) | $ | 54.17 | ||
Unvested shares at December 31, 2014 | 3,252 | $ | 47.18 |
2014 | 2013 | 2012 | |||||||||
Weighted-average fair value of restricted stock units granted | $ | 44.39 | $ | 48.24 | $ | 60.71 | |||||
Total fair value of shares vested (in millions) | $ | 27 | $ | 30 | $ | 15 |
Shares in thousands | Number of Shares | Weighted- Average Grant Date Fair Value | ||||
Service-based shares | 1,361 | $ | 44.28 | |||
Performance-based shares | 86 | $ | 46.26 | |||
Total stock grants | 1,447 | $ | 44.39 |
2012 | |||
Grant date fair value per share of Company common stock | $ | 58.63 | |
Expected volatility | 36.44 | % | |
Risk-free interest rate | 0.47 | % | |
Dividend yield | — | ||
Performance vesting hurdle - future fair value per share of Company common stock | $ | 85.00 |
In millions | 2014 | 2013 | 2012 | ||||||||
Employee share purchases | 0.4 | 0.4 | 0.2 | ||||||||
Aggregate cost | $ | 18 | $ | 20 | $ | 12 |
|
2014 | 2013 | 2012 | |||||||||||||||||||||
In millions | Pension | Postemployment | Pension | Postemployment | Pension | Postemployment | |||||||||||||||||
Service cost | $ | 9 | $ | 4 | $ | 8 | $ | 3 | $ | 8 | $ | 4 | |||||||||||
Interest cost | 4 | 1 | 4 | 1 | 4 | 1 | |||||||||||||||||
Expected return on plan assets | (2 | ) | — | (2 | ) | — | (3 | ) | — | ||||||||||||||
Settlement charge | 1 | — | 1 | — | 1 | — | |||||||||||||||||
Amortization of actuarial loss (gain) | 2 | (1 | ) | 2 | (1 | ) | 1 | — | |||||||||||||||
Amortization of prior service cost (credit) | (1 | ) | — | — | — | — | — | ||||||||||||||||
Total costs | $ | 13 | $ | 4 | $ | 13 | $ | 3 | $ | 11 | $ | 5 |
Pension | Postemployment | ||||||||||||||
In millions | 2014 | 2013 | 2014 | 2013 | |||||||||||
Change in benefit obligation | |||||||||||||||
Benefit obligation at January 1 | $ | 129 | $ | 122 | $ | 27 | $ | 25 | |||||||
Service cost | 9 | 8 | 4 | 3 | |||||||||||
Interest cost | 4 | 4 | 1 | 1 | |||||||||||
Plan participant contributions | 1 | 1 | — | — | |||||||||||
Actuarial loss | 18 | 6 | 19 | 3 | |||||||||||
Benefits paid | (19 | ) | (6 | ) | (11 | ) | (4 | ) | |||||||
Currency translation adjustments | (15 | ) | (6 | ) | (1 | ) | (1 | ) | |||||||
New plans | 3 | — | — | — | |||||||||||
Benefit obligation at December 31 | 130 | 129 | 39 | 27 | |||||||||||
Change in plan assets | |||||||||||||||
Fair value of plan assets at January 1 | $ | 76 | $ | 69 | $ | — | $ | — | |||||||
Actual return on plan assets | 7 | 9 | — | — | |||||||||||
Company contributions | 8 | 10 | — | — | |||||||||||
Benefits paid | (19 | ) | (6 | ) | — | — | |||||||||
Currency translation adjustments | (7 | ) | (7 | ) | — | — | |||||||||
Plan participant contribution | 1 | 1 | — | — | |||||||||||
New plans | 1 | — | — | — | |||||||||||
Fair value of plan assets at December 31 | 67 | 76 | — | — | |||||||||||
Funded status (underfunded) | $ | (63 | ) | $ | (53 | ) | $ | (39 | ) | $ | (27 | ) | |||
Amounts Recognized in the Balance Sheet | |||||||||||||||
Non-current assets | $ | 4 | $ | 1 | $ | — | $ | — | |||||||
Current liabilities | (1 | ) | (1 | ) | (5 | ) | (4 | ) | |||||||
Non-current liabilities | (66 | ) | (53 | ) | (34 | ) | (23 | ) | |||||||
Net amounts recognized | $ | (63 | ) | $ | (53 | ) | $ | (39 | ) | $ | (27 | ) | |||
Amounts Recognized in Accumulated Other Comprehensive Income | |||||||||||||||
Unrecognized Net actuarial loss (gain) | $ | 33 | $ | 26 | $ | 6 | $ | (12 | ) | ||||||
Unrecognized Prior service (credit) cost | — | (2 | ) | 1 | — | ||||||||||
Total | $ | 33 | $ | 24 | $ | 7 | $ | (12 | ) |
In millions | 2014 | 2013 | |||||
Accumulated pension benefit obligation | $ | 118 | $ | 120 |
In millions | 2014 | 2013 | |||||
Projected benefit obligation | $ | 69 | $ | 55 | |||
Accumulated benefit obligation | $ | 61 | $ | 49 | |||
Fair value of plan assets | $ | 3 | $ | 3 |
Pension | Postemployment | ||||||||||||||
In millions | 2014 | 2013 | 2014 | 2013 | |||||||||||
Actuarial loss (gain) arising during the year | $ | 14 | $ | (1 | ) | $ | 18 | $ | 2 | ||||||
Amortization of (gain) loss included in net periodic benefit cost | (2 | ) | (2 | ) | 1 | 1 | |||||||||
Prior service cost arising during the year | 1 | — | — | ||||||||||||
Recognition of loss due to settlement | (1 | ) | (1 | ) | — | — | |||||||||
Foreign currency exchange | (3 | ) | (1 | ) | — | — | |||||||||
Total recognized in other comprehensive income | $ | 9 | $ | (5 | ) | $ | 19 | $ | 3 |
In millions | Pension | Postemployment | |||||
Net loss to be recognized in other comprehensive income | $ | 3 | $ | — |
Pension Benefit Obligations | Pension Benefit Cost | ||||||||
2014 | 2013 | 2014 | 2013 | 2012 | |||||
Discount rate | 2.3% | 3.0% | 3.0% | 3.0% | 3.7% | ||||
Rate of compensation increase | 3.3% | 3.2% | 3.2% | 3.3% | 3.3% | ||||
Expected return on plan assets | N/A | N/A | 3.4% | 3.4% | 4.0% | ||||
Postemployment Benefit Obligations | Postemployment Benefit Cost | ||||||||
2014 | 2013 | 2014 | 2013 | 2012 | |||||
Discount rate | 3.5% | 3.8% | 3.8% | 3.4% | 4.1% | ||||
Rate of compensation increase | 3.0% | 3.7% | 3.7% | 3.8% | 3.7% | ||||
Involuntary turnover rate | 1.3% | 1.0% | 1.0% | 1.0% | 1.5% |
Actual Asset Allocation As of December 31 | Target Asset Allocation | |||||||
2014 | 2013 | |||||||
Equity securities | 32 | % | 34 | % | 31 | % | ||
Debt securities | 41 | % | 37 | % | 44 | % | ||
Insurance (annuity) contracts | 17 | % | 13 | % | 17 | % | ||
Real estate | 5 | % | 6 | % | 3 | % | ||
Other | 5 | % | 10 | % | 5 | % | ||
Total | 100 | % | 100 | % | 100 | % |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
In millions | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Money market funds | $ | 3 | $ | — | $ | 3 | $ | — | |||||||
Equity funds | 26 | — | 26 | — | |||||||||||
Bond/fixed-income funds | 28 | — | 28 | — | |||||||||||
Real-estate indirect investment | 5 | — | 5 | — | |||||||||||
Commodities/Other | 4 | — | 4 | — | |||||||||||
Insurance contracts | 10 | — | — | 10 | |||||||||||
Total Assets at fair value | $ | 76 | $ | — | $ | 66 | $ | 10 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
In millions | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Money market funds | $ | 2 | $ | — | $ | 2 | $ | — | |||||||
Equity funds | 21 | — | 21 | — | |||||||||||
Bond/fixed-income funds | 28 | — | 28 | — | |||||||||||
Real-estate indirect investment | 4 | — | 4 | — | |||||||||||
Commodities/Other | 1 | — | 1 | — | |||||||||||
Insurance contracts | 11 | — | — | 11 | |||||||||||
Total Assets at fair value | $ | 67 | $ | — | $ | 56 | $ | 11 |
In millions | Insurance Contracts | ||
Balance as of January 1, 2014 | $ | 10 | |
Purchases, sales and settlements, net | 1 | ||
Balance as of December 31, 2014 | $ | 11 |
In millions | Insurance Contracts | ||
Balance as of January 1, 2013 | $ | 8 | |
Purchases, sales and settlements, net | 2 | ||
Balance as of December 31, 2013 | $ | 10 |
Pension Benefits | Postemployment Benefits | ||||||
In millions | |||||||
Year | |||||||
2015 | $ | 3 | $ | 5 | |||
2016 | $ | 5 | $ | 5 | |||
2017 | $ | 6 | $ | 5 | |||
2018 | $ | 6 | $ | 5 | |||
2019 | $ | 5 | $ | 5 | |||
2020-2024 | $ | 32 | $ | 23 |
In millions | 2014 | 2013 | 2012 | ||||||||
U.S. savings plan | $ | 23 | $ | 23 | $ | 21 | |||||
International subsidiary savings plans | $ | 18 | $ | 17 | $ | 18 |
|
In millions | 2014 | 2013 | |||||
Contract notional amount of foreign exchange forward contracts | $ | 116 | $ | 152 | |||
Net contract notional amount of foreign exchange forward contracts | $ | 17 | $ | 24 |
|
In millions | 2014 | 2013 | 2012 | ||||||||
Beginning balance at January 1 | $ | 8 | $ | 8 | $ | 6 | |||||
Accruals for warranties issued | 16 | 15 | 17 | ||||||||
Settlements (in cash or kind) | (17 | ) | (15 | ) | (15 | ) | |||||
Balance at end of period | $ | 7 | $ | 8 | $ | 8 |
Total | |||||||||||||||||||||||
In millions | Amounts | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||
Operating lease obligations | $ | 72 | $ | 23 | $ | 18 | $ | 15 | $ | 12 | $ | 4 | |||||||||||
Sublease rentals | (8 | ) | (3 | ) | (3 | ) | (2 | ) | — | — | |||||||||||||
Total committed operating leases less sublease rentals | $ | 64 | $ | 20 | $ | 15 | $ | 13 | $ | 12 | $ | 4 |
In millions | 2014 | 2013 | 2012 | ||||||||
Rental expense | $ | 26 | $ | 26 | $ | 25 | |||||
Sublease rental income | $ | 3 | $ | 3 | $ | 3 |
|
Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
In millions | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Assets | |||||||||||||||
Money market funds | $ | 393 | $ | 393 | $ | — | $ | — | |||||||
Available-for-sale securities | 78 | 78 | — | — | |||||||||||
Total assets at fair value | $ | 471 | $ | 471 | $ | — | $ | — |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
In millions | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Assets | |||||||||||||||
Money market funds | $ | 318 | $ | 318 | $ | — | $ | — |
|
In millions | |||
2015 | $ | 53 | |
2016 | 195 | ||
Total | $ | 248 |
In millions | 2014 | 2013 | 2012 | ||||||||
Interest expense | $ | 3 | $ | 4 | $ | 4 |
|
In millions | 2014 | 2013 | 2012 | ||||||||
Segment revenue | |||||||||||
Americas (1) | $ | 1,619 | $ | 1,633 | $ | 1,619 | |||||
International | 1,113 | 1,059 | 1,046 | ||||||||
Total revenue | 2,732 | 2,692 | 2,665 | ||||||||
Segment gross margin | |||||||||||
Americas | 943 | 947 | 967 | ||||||||
International | 536 | 526 | 524 | ||||||||
Total gross margin | 1,479 | 1,473 | 1,491 | ||||||||
Selling, general and administrative expenses | 770 | 757 | 728 | ||||||||
Research and development expenses | 206 | 184 | 183 | ||||||||
Total income from operations | 503 | 532 | 580 | ||||||||
Other expense, net | (9 | ) | (24 | ) | (2 | ) | |||||
Income before income taxes | $ | 494 | $ | 508 | $ | 578 |
In millions | 2014 | 2013 | 2012 | ||||||||
Products (software and hardware)(1) | $ | 1,227 | $ | 1,230 | $ | 1,297 | |||||
Consulting services | 817 | 818 | 776 | ||||||||
Maintenance services | 688 | 644 | 592 | ||||||||
Total services | 1,505 | 1,462 | 1,368 | ||||||||
Total revenue | $ | 2,732 | $ | 2,692 | $ | 2,665 |
In millions | 2014 | 2013 | |||||
United States | $ | 130 | $ | 131 | |||
Americas (excluding United States) | 4 | 3 | |||||
International | 25 | 27 | |||||
Property and equipment, net | $ | 159 | $ | 161 |
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In millions | Available-for-sale securities | Defined benefit plans | Foreign currency translation adjustments | Total AOCI | |||||||||||
Balance as of December 31, 2011 | $ | — | $ | (9 | ) | $ | 25 | $ | 16 | ||||||
Other comprehensive income before reclassifications | — | 2 | 9 | 11 | |||||||||||
Amounts reclassified from AOCI | — | 2 | — | 2 | |||||||||||
Net other comprehensive income | — | 4 | 9 | 13 | |||||||||||
Balance as of December 31, 2012 | $ | — | $ | (5 | ) | $ | 34 | $ | 29 | ||||||
Other comprehensive income before reclassifications | — | — | 2 | 2 | |||||||||||
Amounts reclassified from AOCI | — | 2 | — | 2 | |||||||||||
Net other comprehensive income | — | 2 | 2 | 4 | |||||||||||
Balance as of December 31, 2013 | $ | — | $ | (3 | ) | $ | 36 | $ | 33 | ||||||
Other comprehensive income (loss) before reclassifications | 31 | (22 | ) | (47 | ) | (38 | ) | ||||||||
Amounts reclassified from AOCI | — | 1 | — | 1 | |||||||||||
Net other comprehensive income (loss) | 31 | (21 | ) | (47 | ) | (37 | ) | ||||||||
Balance as of December 31, 2014 | $ | 31 | $ | (24 | ) | $ | (11 | ) | $ | (4 | ) |
In millions | For the year ended December 31 | |||||||||||||
AOCI Component | Location | 2014 | 2013 | 2012 | ||||||||||
Defined benefit plans | Cost of services | $ | 1 | $ | 2 | $ | 1 | |||||||
Defined benefit plans | Selling, general and administrative expenses | — | 1 | — | ||||||||||
Defined benefit plans | Research and development expenses | — | (1 | ) | 1 | |||||||||
Defined benefit plans | Net income | $ | 1 | $ | 2 | $ | 2 |
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In millions, except per share amounts | First | Second | Third | Fourth | |||||||||||
2014 | |||||||||||||||
Total revenues | $ | 628 | $ | 676 | $ | 667 | $ | 761 | |||||||
Gross margin | $ | 333 | $ | 371 | $ | 350 | $ | 425 | |||||||
Operating income | $ | 89 | $ | 133 | $ | 123 | $ | 158 | |||||||
Net income | $ | 59 | $ | 96 | $ | 94 | $ | 118 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.37 | $ | 0.61 | $ | 0.61 | $ | 0.78 | |||||||
Diluted | $ | 0.37 | $ | 0.60 | $ | 0.60 | $ | 0.77 | |||||||
2013 | |||||||||||||||
Total revenues | $ | 587 | $ | 670 | $ | 666 | $ | 769 | |||||||
Gross margin | $ | 305 | $ | 379 | $ | 358 | $ | 431 | |||||||
Operating income | $ | 76 | $ | 147 | $ | 132 | $ | 177 | |||||||
Net income | $ | 59 | $ | 108 | $ | 98 | $ | 112 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.36 | $ | 0.66 | $ | 0.60 | $ | 0.69 | |||||||
Diluted | $ | 0.35 | $ | 0.65 | $ | 0.59 | $ | 0.68 |
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