Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 21, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PayPal Holdings, Inc. | |
Entity Trading Symbol | PYPL | |
Entity Central Index Key | 1,633,917 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 1,202,397,024 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,271 | $ 1,590 |
Short-term investments | 2,820 | 3,385 |
Accounts receivable, net | 176 | 214 |
Loans and interest receivable, net of allowances of $385 in 2017 and $339 in 2016 | 5,752 | 5,348 |
Funds receivable and customer accounts | 16,178 | 14,363 |
Prepaid expenses and other current assets | 838 | 833 |
Total current assets | 27,035 | 25,733 |
Long-term investments | 2,511 | 1,539 |
Property and equipment, net | 1,479 | 1,482 |
Goodwill | 4,062 | 4,059 |
Intangible assets, net | 143 | 211 |
Other assets | 60 | 79 |
Total assets | 35,290 | 33,103 |
Current liabilities: | ||
Accounts payable | 171 | 192 |
Funds payable and amounts due to customers | 16,978 | 15,163 |
Accrued expenses and other current liabilities | 1,407 | 1,459 |
Income taxes payable | 85 | 64 |
Total current liabilities | 18,641 | 16,878 |
Deferred tax liability and other long-term liabilities | 1,651 | 1,513 |
Total liabilities | 20,292 | 18,391 |
Commitments and contingencies (Note 11) | ||
Equity: | ||
Common stock, $0.0001 par value; 4,000 shares authorized; 1,202 and 1,207 outstanding | 0 | 0 |
Treasury stock at cost, 41 and 27 shares | (1,601) | (995) |
Additional paid-in-capital | 13,873 | 13,579 |
Retained earnings | 2,824 | 2,069 |
Accumulated other comprehensive income | (98) | 59 |
Total equity | 14,998 | 14,712 |
Total liabilities and equity | $ 35,290 | $ 33,103 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEET (PARENTHETICAL) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts, loans and interest receivable | $ 385 | $ 339 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 4,000,000,000 | 4,000,000,000 |
Common stock, shares outstanding (in shares) | 1,202,000,000 | 1,207,000,000 |
Treasury stock, shares (in shares) | 41,000,000 | 27,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Net revenues | $ 3,136 | $ 2,650 | $ 6,111 | $ 5,194 |
Operating expenses: | ||||
Transaction expense | 1,064 | 810 | 2,051 | 1,562 |
Transaction and loan losses | 308 | 255 | 608 | 510 |
Customer support and operations | 335 | 318 | 652 | 614 |
Sales and marketing | 284 | 250 | 522 | 483 |
Product development | 232 | 209 | 446 | 404 |
General and administrative | 282 | 261 | 547 | 492 |
Depreciation and amortization | 201 | 176 | 384 | 351 |
Restructuring | 0 | 0 | 40 | 0 |
Total operating expenses | 2,706 | 2,279 | 5,250 | 4,416 |
Operating income | 430 | 371 | 861 | 778 |
Other income (expense), net | 17 | 9 | 24 | 24 |
Income before income taxes | 447 | 380 | 885 | 802 |
Income tax expense | 36 | 57 | 90 | 114 |
Net income | $ 411 | $ 323 | $ 795 | $ 688 |
Net income per share: | ||||
Basic (in usd per share) | $ 0.34 | $ 0.27 | $ 0.66 | $ 0.57 |
Diluted (in usd per share) | $ 0.34 | $ 0.27 | $ 0.65 | $ 0.56 |
Weighted average shares: | ||||
Basic (in shares) | 1,202 | 1,210 | 1,203 | 1,213 |
Diluted (in shares) | 1,215 | 1,215 | 1,216 | 1,220 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 411 | $ 323 | $ 795 | $ 688 |
Other comprehensive income (loss), net of reclassification adjustments: | ||||
Foreign currency translation | 16 | (5) | 29 | 3 |
Unrealized gains (losses) on investments, net | 0 | 9 | 1 | 21 |
Tax (expense) benefit on unrealized gains (losses) on investments, net | (1) | (3) | (1) | (5) |
Unrealized gains (losses) on hedging activities, net | (117) | 79 | (189) | 43 |
Tax (expense) benefit on unrealized gains (losses) on hedging activities, net | 2 | (1) | 3 | (1) |
Other comprehensive income (loss), net of tax | (100) | 79 | (157) | 61 |
Comprehensive income | $ 311 | $ 402 | $ 638 | $ 749 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 795 | $ 688 |
Adjustments: | ||
Transaction and loan losses | 608 | 510 |
Depreciation and amortization | 384 | 350 |
Stock-based compensation | 321 | 206 |
Deferred income taxes | 102 | 88 |
Excess tax benefits from stock-based compensation | 0 | (32) |
Gain on sale of principal loans receivable held for sale, net | (12) | (12) |
Changes in assets and liabilities: | ||
Accounts receivable | 38 | (30) |
Principal loans receivable held for sale, net | 12 | 12 |
Accounts payable | 4 | 22 |
Income taxes payable | 21 | 37 |
Other assets and liabilities | (601) | (405) |
Net cash provided by operating activities | 1,672 | 1,434 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (322) | (334) |
Changes in principal loans receivable, net | (627) | (476) |
Purchases of investments | (11,956) | (10,209) |
Maturities and sales of investments | 9,536 | 9,335 |
Acquisitions, net of cash acquired | 0 | (19) |
Funds receivable and customer accounts | 367 | 222 |
Net cash (used in) investing activities | (3,002) | (1,481) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 86 | 57 |
Purchases of treasury stock | (606) | (896) |
Excess tax benefits from stock-based compensation | 0 | 32 |
Tax withholdings related to net share settlements of equity awards | (124) | (94) |
Repayments under financing arrangements, net | (6) | (21) |
Funds payable and amounts due to customers | 1,638 | 1,579 |
Net cash provided by financing activities | 988 | 657 |
Effect of exchange rate changes on cash and cash equivalents | 23 | 15 |
Net change in cash and cash equivalents | (319) | 625 |
Cash and cash equivalents at beginning of period | 1,590 | 1,393 |
Cash and cash equivalents at end of period | 1,271 | 2,018 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 2 | 2 |
Cash paid for income taxes | $ 73 | $ 36 |
Overview and Summary of Signifi
Overview and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Summary of Significant Accounting Policies | Overview and Summary of Significant Accounting Policies Overview and Organization PayPal Holdings, Inc. ("PayPal," the "Company," "we," "us," or "our") was incorporated in Delaware in January 2015 and is a leading technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants worldwide. Our vision is to democratize financial services, as we believe that managing and moving money is a right for all people, not just the affluent. Our goal is to increase our relevance for consumers and merchants to manage and move their money anywhere in the world, anytime, on any platform and using any device. Our combined payment solutions, including our PayPal, PayPal Credit, Braintree, Venmo, Xoom, and Paydiant products, compose our proprietary Payments Platform. We operate globally and in a rapidly evolving regulatory environment characterized by a heightened regulatory focus on all aspects of the payments industry. Government regulation impacts key aspects of our business. We are subject to regulations that affect the payments industry in the markets in which we operate. Non-compliance with laws and regulations, increased penalties and enforcement actions related to non-compliance, changes in laws and regulations or their interpretation, and the enactment of new laws and regulations applicable to us could have a material adverse impact on our business, results of operations and financial condition. Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements include the financial statements of PayPal and our wholly and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Investments in entities where we hold less than a 20% ownership interest are generally accounted for using the cost method of accounting, and our share of the investees’ results of operations is included in other income (expense), net on our condensed consolidated statement of income to the extent dividends are received. Our investment balance is included in long-term investments on our condensed consolidated balance sheet. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2016 (the "2016 Form 10-K") filed with the Securities and Exchange Commission. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for fair presentation of the condensed consolidated financial statements for interim periods. We have evaluated all subsequent events through the date the financial statements were issued. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses, during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to provisions for transaction and loan losses, loss contingencies, income taxes, revenue recognition and the valuation of goodwill and intangible assets. We base our estimates on historical experience and various other assumptions which we believe to be reasonable under the circumstances. Actual results could differ from those estimates. Recent Accounting Guidance In 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In 2015, the FASB deferred the effective date to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. In 2016, the FASB updated the guidance for reporting revenue gross versus net to improve the implementation guidance on principal versus agent considerations, and for identifying performance obligations and the accounting of intellectual property licenses. In addition, the FASB introduced practical expedients and made narrow scope improvements to the new accounting guidance. We have evaluated the impact of this new standard and have concluded that our financial statements will not be materially impacted upon adoption; however, we expect to expand certain disclosures as required. We will adopt the guidance on January 1, 2018 on a full retrospective basis, reflecting the application of the new standard in each prior reporting period. In 2016, the FASB issued new accounting guidance related to the classification and measurement of financial instruments. This new standard makes limited amendments to the guidance in GAAP by requiring equity investments to be measured at fair value with changes in fair value recognized in net income. This new standard also amends the presentation of certain fair value changes for financial liabilities measured at fair value and it also amends certain disclosure requirements associated with the fair value of financial instruments. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted in limited situations. We are required to apply the new guidance on a modified retrospective basis to all outstanding instruments, with a cumulative effect adjustment as of the date of adoption. We are evaluating the impact and approach to adopting this new accounting guidance on our financial statements, which we expect will be limited to our cost method investments. In 2016, the FASB issued new accounting guidance related to accounting for leases, which will require lessees to recognize lease assets and lease liabilities on the balance sheet for the rights and obligations created by all leases with terms greater than 12 months. As we are not a lessor, other changes in the standard applicable to lessors do not apply. The standard is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. We are required to adopt the guidance using a modified retrospective basis and can elect to apply optional practical expedients. We are evaluating the impact and approach to adopting this new accounting guidance on our financial statements. In 2016, the FASB issued new guidance on the measurement of credit losses on financial instruments. Credit losses on loans, trade and other receivables, held-to-maturity debt securities and other instruments will reflect our current estimate of the expected credit losses that generally will result in the earlier recognition of allowances for losses. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. Additional disclosures will be required, including information used to track credit quality by year of origination for most financing receivables. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are required to apply the standard provisions as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted with impairment of available-for-sale debt securities applied prospectively after adoption. We are evaluating the impact and approach to adopting this new accounting guidance on our financial statements. In 2016, the FASB issued new guidance on classifying certain cash receipts and cash payments on the statement of cash flows. The new guidance addresses the classification of cash flows related to: debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, including bank-owned life insurance, distributions received from equity method investees and beneficial interests in securitization transactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The guidance should be applied retrospectively after adoption. The adoption of this standard is not expected to have a material impact on our financial statements. In 2016, the FASB issued new guidance on restricted cash on the statement of cash flows. The new guidance requires the classification and presentation of changes in restricted cash and cash equivalents in the statement of cash flows. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning and ending balances shown on the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The guidance should be applied retrospectively after adoption. The adoption of this standard is not expected to have a material impact on our financial statements. In 2017, the FASB issued new guidance clarifying the scope and application of the de-recognition of non-financial assets and the sale or transfer of non-financial assets, including partial sales. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. Either of the following transition methods is permitted: (i) a full retrospective approach reflecting the application of the new standard in each prior reporting period, or (ii) a modified retrospective approach with a cumulative-effect adjustment to the opening balance of retained earnings in the year the new standard is first applied. The adoption of this standard is not expected to have a material impact on our financial statements. In 2017, the FASB issued new guidance that requires certain premiums on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. The new standard is effective at the same time as the new revenue recognition standard. Therefore, the new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Transition is on a modified retrospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are evaluating the impact this new accounting guidance will have on our financial statements. In 2017, the FASB issued new guidance clarifying which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Specifically, an entity would apply modification accounting only if the fair value, vesting conditions, or classification of the awards changes as a result of changes in the terms or conditions. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The guidance will be applied prospectively upon adoption. The amount of the impact to share-based compensation expense will depend on the terms specified in any new changes to the share-based payment awards. Recently Adopted Accounting Guidance In 2016, the FASB issued new guidance on the accounting for share-based payment compensation. The new guidance makes amendments to the following areas: accounting for income taxes upon vesting or settlement of awards, presentation of excess tax benefits or tax deficiencies on the statement of cash flows, accounting for forfeitures, minimum statutory withholding requirements and presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet minimum statutory withholding requirements. We adopted the new guidance effective January 1, 2017. As a result of the adoption, starting in the first quarter of 2017, stock-based compensation ("SBC") excess tax benefits or tax deficiencies are reflected in the consolidated statement of income within the provision for income taxes rather than in the consolidated balance sheet within additional paid-in capital. For the three and six months ended June 30, 2017, we recognized approximately $20 million and $24 million , respectively, of SBC net excess tax benefits within the provision for income taxes. Additionally, starting in the first quarter of 2017, we presented the cash flows related to the applicable SBC net excess tax benefits in operating activities along with other income tax cash flows rather than in financing activities. The remaining amendments did not have a material impact on our financial statements. In 2016, the FASB issued new guidance on the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. The new guidance requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. Adoption of the new guidance must be made on a modified retrospective basis. We elected to early adopt the new guidance effective January 1, 2017. As a result of the adoption, we recorded a decrease of approximately $41 million in retained earnings as of the beginning of the first quarter of 2017, with a corresponding decrease in prepaid taxes related to the unamortized tax expense attributed to intra-entity transfers of assets previously deferred. Additionally, for the three and six months ended June 30, 2017 we did not recognize approximately $4 million and $8 million , respectively, of amortization of prepaid taxes attributed to prior period intra-entity asset transfers previously deferred within the provision for income taxes. As of adoption, when a new intra-entity transfer of assets occurs, we will recognize the income tax consequences associated with this activity in the consolidated statement of income in the period the transaction takes place. |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding for the period. The dilutive effect of outstanding equity incentive awards is reflected in diluted net income per share by application of the treasury stock method. The calculation of diluted net income per share excludes all anti-dilutive common shares. The following table sets forth the computation of basic and diluted net income per share for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (In millions, except per share amounts) Numerator: Net income $ 411 $ 323 $ 795 $ 688 Denominator: Weighted average shares of common stock - basic 1,202 1,210 1,203 1,213 Dilutive effect of equity incentive awards 13 5 13 7 Weighted average shares of common stock - diluted 1,215 1,215 1,216 1,220 Net income per share: Basic $ 0.34 $ 0.27 $ 0.66 $ 0.57 Diluted $ 0.34 $ 0.27 $ 0.65 $ 0.56 Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive — 11 3 8 |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations There were no acquisitions or divestitures completed in the three and six months ended June 30, 2017 . There were no acquisitions or divestitures completed in 2016 . |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following table presents goodwill balances and adjustments to those balances during the six months ended June 30, 2017 : December 31, Goodwill Acquired Adjustments June 30, (In millions) Total Goodwill $ 4,059 $ — $ 3 $ 4,062 Intangible Assets The components of identifiable intangible assets are as follows: June 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) (In millions, except years) Intangible assets: Customer lists and user base $ 590 $ (544 ) $ 46 4 $ 605 $ (542 ) $ 63 4 Marketing related 195 (192 ) 3 2 197 (190 ) 7 2 Developed technologies 222 (196 ) 26 3 245 (206 ) 39 3 All other 245 (177 ) 68 5 245 (143 ) 102 5 Intangible assets, net $ 1,252 $ (1,109 ) $ 143 $ 1,292 $ (1,081 ) $ 211 Amortization expense for intangible assets was $41 million and $39 million for the three months ended June 30, 2017 and 2016 , respectively. Amortization expense for intangible assets was $68 million and $77 million for the six months ended June 30, 2017 and 2016 , respectively. Expected future intangible asset amortization as of June 30, 2017 was as follows (in millions): Fiscal years: Remaining 2017 $ 45 2018 59 2019 22 2020 17 2021 — $ 143 |
Geographical Information
Geographical Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Geographical Information | Geographical Information The following tables summarize the allocation of net revenues and long-lived assets based on geography: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (In millions) Net revenues: U.S. $ 1,690 $ 1,407 $ 3,296 $ 2,750 U.K. 334 318 647 625 Other Countries 1,112 925 2,168 1,819 Total net revenues $ 3,136 $ 2,650 $ 6,111 $ 5,194 June 30, December 31, (In millions) Long-lived assets: U.S. $ 1,393 $ 1,391 Other Countries 86 91 Total long-lived assets $ 1,479 $ 1,482 Net revenues are attributed to the U.S., U.K. and other countries primarily based upon the country in which the merchant is located, or in the case of a cross-border transaction, may be earned from the country in which the consumer and the merchant respectively reside. Net revenues earned from value added services are typically attributed to the country in which either the customer or partner reside. Tangible long-lived assets as of June 30, 2017 and December 31, 2016 consisted of property and equipment. Long-lived assets attributed to the U.S. and other countries are based upon the country in which the asset is located or owned. |
Funds Receivable and Customer A
Funds Receivable and Customer Accounts | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Funds Receivable and Customer Accounts | Funds Receivable and Customer Accounts The following table summarizes the assets underlying our funds receivable and customer accounts as of June 30, 2017 and December 31, 2016 . June 30, December 31, (In millions) Cash and cash equivalents $ 4,367 $ 4,319 Government and agency securities 7,140 5,625 Time deposits 707 522 Corporate debt securities 1,573 1,093 Funds receivable 2,391 2,804 Total funds receivable and customer accounts $ 16,178 $ 14,363 As of June 30, 2017 and December 31, 2016 , the estimated fair value of our investments classified as available-for-sale included within funds receivable and customer accounts was as follows: June 30, 2017 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Government and agency securities $ 6,440 $ — $ (5 ) $ 6,435 Time deposits 707 — — 707 Corporate debt securities 703 — — 703 Total $ 7,850 $ — $ (5 ) $ 7,845 December 31, 2016 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Government and agency securities $ 5,198 $ — $ (2 ) $ 5,196 Time deposits 522 — — 522 Corporate debt securities 531 — — 531 Total $ 6,251 $ — $ (2 ) $ 6,249 We elect to account for certain investments within customer accounts, including foreign-currency denominated available-for-sale investments, under the fair value option. As a result, any gains and losses from fair value changes on such investments are recognized in other income (expense), net on the condensed consolidated statement of income. Election of the fair value option allows us to significantly reduce the accounting asymmetry that would otherwise arise when recognizing the changes in the fair value of available-for-sale investments and the corresponding foreign exchange gains and losses relating to customer liabilities. As of June 30, 2017 and December 31, 2016 , the estimated fair value of our investments included within funds receivable and customer accounts under the fair value option was $1.6 billion and $1.0 billion , respectively. In the three months ended June 30, 2017 and 2016 , $90 million of net gains and $18 million of net losses from fair value changes, respectively, were recognized in other income (expense), net on the condensed consolidated statement of income. In the six months ended June 30, 2017 and 2016 , $ 105 million of net gains and $7 million of net losses from fair value changes were recognized in other income (expense), net on the condensed consolidated statement of income. The aggregate fair value of investments in an unrealized loss position was $6.4 billion as of June 30, 2017 . The aggregate gross unrealized loss on our short-term and long-term investments was not material as of June 30, 2017 . We believe the decline in value is due to temporary market conditions and expect to recover the entire amortized cost basis of the securities. We neither intend nor anticipate the need to sell the securities before recovery. We continue to monitor the performance of the investment portfolio and assess market and interest rate risk when evaluating whether other-than-temporary impairment exists. As of June 30, 2017 , we had no material investments that have been in a continuous unrealized loss position for greater than 12 months. Amounts reclassified to earnings from unrealized gains and losses were not material for the six months ended June 30, 2017 and 2016 . The estimated fair values of our investments classified as available-for-sale included within funds receivable and customer accounts by date of contractual maturity at June 30, 2017 were as follows: June 30, (In millions) One year or less $ 7,633 One year through two years 205 Two years through three years 7 Total $ 7,845 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments As of June 30, 2017 and December 31, 2016 , the estimated fair value of our short-term and long-term investments classified as available-for-sale was as follows: June 30, 2017 Gross Gross Gross Estimated (In millions) Short-term investments (1) : Corporate debt securities $ 2,337 $ 1 $ (1 ) $ 2,337 Government and agency securities 40 — — 40 Time deposits 59 — — 59 Long-term investments: Corporate debt securities 2,289 4 (2 ) 2,291 Government and agency securities 63 — — 63 Total (1) $ 4,788 $ 5 $ (3 ) $ 4,790 (1) Excludes short-term restricted cash of $76 million that we intend to use to support our global sabbatical program and a counterparty guarantee . December 31, 2016 Gross Gross Gross Estimated (In millions) Short-term investments (1) : Corporate debt securities $ 2,867 $ 1 $ (1 ) $ 2,867 Government and agency securities 32 — — 32 Time deposits 122 — — 122 Long-term investments: Corporate debt securities 1,473 1 (4 ) 1,470 Government and agency securities 10 — — 10 Total (1) $ 4,504 $ 2 $ (5 ) $ 4,501 (1) Excludes short-term restricted cash of $17 million that we intend to use to support our global sabbatical program. In the second quarter of 2016, we elected to account for foreign denominated available-for-sale investments held in our Luxembourg banking subsidiary under the fair value option. Election of the fair value option allows us to recognize any gains and losses from fair value changes on such investments in other income (expense), net on the condensed consolidated statement of income to offset certain foreign exchange gains and losses on our foreign denominated customer liabilities. As of June 30, 2017 and December 31, 2016 , the estimated fair value of our investments included within short-term investments and long-term investments under the fair value option was $385 million and $356 million , respectively. In the three and six months ended June 30, 2017 , $19 million and $25 million , respectively, of net gains from fair value changes were recognized in other income (expense), net on the condensed consolidated statement of income. The aggregate fair value of investments in an unrealized loss position was $2.3 billion as of June 30, 2017 . The aggregate gross unrealized loss on our short-term and long-term investments was not material as of June 30, 2017 . We believe the decline in value is due to temporary market conditions and expect to recover the entire amortized cost basis of the securities. We neither intend nor anticipate the need to sell the securities before recovery. We continue to monitor the performance of the investment portfolio and assess market and interest rate risk when evaluating whether other-than-temporary impairment exists. As of June 30, 2017 , we had no material long-term or short-term investments that have been in a continuous unrealized loss position for greater than 12 months. Amounts reclassified to earnings from unrealized gains and losses were not material for the three and six months ended June 30, 2017 and 2016 . The estimated fair values of our short-term and long-term investments classified as available-for-sale by date of contractual maturity at June 30, 2017 were as follows: June 30, 2017 (In millions) One year or less $ 2,436 One year through two years 1,179 Two years through three years 945 Three years through four years 85 Four years through five years 121 Greater than five years 24 Total (1) $ 4,790 (1) Excludes short-term restricted cash of $76 million . Other Investments We have cost method investments which are reported in long-term investments on our condensed consolidated balance sheet. Our cost method investments primarily consist of minority equity interests in privately held companies and totaled $80 million and $50 million as of June 30, 2017 and December 31, 2016 , respectively. The increase in our cost method investments was due to additional investments made in the six months ended June 30, 2017 . |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Assets and Liabilities | Fair Value Measurement of Assets and Liabilities The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 : Balances at Quoted Prices in Significant Other (In millions) Assets: Cash and cash equivalents (1) $ 175 $ — $ 175 Short-term investments: Restricted Cash 76 17 59 Corporate debt securities 2,513 — 2,513 Government and agency securities 172 — 172 Time deposits 59 — 59 Total short-term investments $ 2,820 $ 17 $ 2,803 Funds receivable and customer accounts (2) 9,445 — 9,445 Derivatives 84 — 84 Long-term investments: Corporate debt securities 2,355 — 2,355 Government and agency securities 76 — 76 Total long-term investments 2,431 — 2,431 Total financial assets $ 14,955 $ 17 $ 14,938 Liabilities: Derivatives $ 150 $ — $ 150 (1) Excludes cash of $1.1 billion not subject to fair value measurement. (2) Excludes cash and funds receivable of $6.7 billion underlying funds receivable and customer accounts not subject to fair value measurement. Balances at Quoted Prices in Significant Other (In millions) Assets: Cash and cash equivalents (1) $ 268 $ — $ 268 Short-term investments: Restricted Cash 17 17 — Corporate debt securities 2,882 — 2,882 Government and agency securities 364 — 364 Time deposits 122 — 122 Total short-term investments 3,385 17 3,368 Funds receivable and customer accounts (2) 7,420 — 7,420 Derivatives 223 — 223 Long-term investments: Corporate debt securities 1,479 — 1,479 Government and agency securities 10 — 10 Total long-term investments 1,489 — 1,489 Total financial assets $ 12,785 $ 17 $ 12,768 Liabilities: Derivatives $ 59 $ — $ 59 (1) Excludes cash of $1.3 billion not subject to fair value measurement. (2) Excludes cash and funds receivable of $6.9 billion underlying funds receivable and customer accounts not subject to fair value measurement. Our financial assets and liabilities are valued using market prices on both active markets (Level 1) and less active markets (Level 2). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. A majority of our derivative instruments are valued using pricing models that take into account the contract terms as well as multiple inputs where applicable, such as currency rates, interest rate yield curves, option volatility and equity prices. Our derivative instruments are primarily short-term in nature, generally one month to one year in duration. Certain foreign currency contracts designated as cash flow hedges may have a duration of up to 18 months. We did not have any transfers of financial instruments between valuation levels during the six months ended June 30, 2017 and 2016 . As of June 30, 2017 , we did not have any assets or liabilities requiring measurement at fair value without observable market values that would require a high level of judgment to determine fair value (Level 3). Cash and cash equivalents are short-term, highly liquid investments with original maturities of three months or less when purchased and are comprised primarily of bank deposits, government and agency securities and commercial paper. We elect to account for foreign currency denominated available-for-sale investments underlying funds receivable and customer accounts, short term investments and long term investments under the fair value option as further discussed in "Note 6—Funds Receivable and Customer Accounts" and "Note 7—Investments." |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Summary of Derivative Instruments Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. Our derivatives expose us to credit risk to the extent that our counterparties may be unable to meet the terms of the arrangement. We seek to mitigate such risk by limiting our counterparties to, and by spreading the risk across, major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. Foreign Exchange Contracts We transact business in various foreign currencies and have significant international revenues as well as costs denominated in foreign currencies, which subjects us to foreign currency risk. We have a foreign currency exposure management program whereby we designate certain foreign currency exchange contracts, generally with maturities of 18 months or less, to reduce the volatility of cash flows primarily related to forecasted revenues and expenses denominated in foreign currencies. The objective of the foreign exchange contracts is to help mitigate the risk that the U.S. dollar-equivalent cash flows are adversely affected by changes in the applicable U.S. dollar/foreign currency exchange rate. These derivative instruments are designated as cash flow hedges and accordingly, the effective portion of the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified into earnings in the same period the forecasted transaction affects earnings. The ineffective portion of the unrealized gains and losses on these contracts, if any, is recorded immediately in earnings. We evaluate the effectiveness of our foreign exchange contracts on a quarterly basis by comparing the change in the fair value of the derivative instruments with the change in the fair value of the forecasted cash flows of the hedged item. We do not use any foreign exchange contracts for trading or speculative purposes. For our derivative instruments designated as cash flow hedges, the amounts recognized in earnings related to the ineffective portion were not material in each of the periods presented, and we did not exclude any component of the changes in fair value of the derivative instruments from the assessment of hedge effectiveness. During the three and six months ended June 30, 2017 and 2016 , we did not discontinue any cash flow hedges because it was probable that the original forecasted transaction would not occur and as such, did not reclassify any gains or losses to earnings. As of June 30, 2017 , we estimated that $49 million of net derivative losses related to our cash flow hedges included in accumulated other comprehensive income will be reclassified into earnings within the next 12 months. We have an additional foreign currency exposure management program whereby we use foreign exchange contracts to offset the foreign exchange risk on our assets and liabilities denominated in currencies other than the functional currency of our subsidiaries. These contracts are not designated as hedging instruments and reduce, but do not entirely eliminate, the impact of currency exchange rate movements on our assets and liabilities. The foreign currency gains and losses on our assets and liabilities are recorded in “Other income (expense), net,” which is offset by the gains and losses on the foreign exchange contracts. Fair Value of Derivative Contracts The fair value of our outstanding derivative instruments as of June 30, 2017 and December 31, 2016 was as follows: Balance Sheet Location June 30, December 31, (In millions) Derivative Assets: Foreign exchange contracts designated as cash flow hedges Other current assets $ 19 $ 135 Foreign exchange contracts not designated as hedging instruments Other current assets 65 88 Total derivative assets $ 84 $ 223 Derivative Liabilities: Foreign exchange contracts designated as cash flow hedges Other current liabilities $ 59 $ 4 Foreign exchange contracts not designated as hedging instruments Other current liabilities 91 55 Total derivative liabilities $ 150 $ 59 Net fair value of derivative instruments $ (66 ) $ 164 Under the master netting agreements with the respective counterparties to our foreign exchange contracts, subject to applicable requirements, we are allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, we have elected to present the derivative assets and derivative liabilities on a gross basis in our balance sheet. As of June 30, 2017 , the potential effect of rights of setoff associated with our foreign exchange contracts would have been an offset to both assets and liabilities by $57 million , resulting in net derivative assets of $27 million and net derivative liabilities of $93 million . We are not required to pledge, nor are we entitled to receive, cash collateral related to these derivative transactions. Effect of Derivative Contracts on Accumulated Other Comprehensive Income The following table summarizes the activity of derivative contracts that qualify for hedge accounting as of June 30, 2017 and December 31, 2016 , and the impact of designated derivative instruments on accumulated other comprehensive income for the six months ended June 30, 2017 and 2016 : December 31, 2016 Amount of gain (loss) recognized in other comprehensive income (effective portion) Less: Amount of gain reclassified from accumulated other comprehensive income to net revenue (effective portion) June 30, 2017 (In millions) Foreign exchange contracts designated as cash flow hedges $ 131 $ (130 ) $ 59 $ (58 ) December 31, 2015 Amount of gain recognized in other comprehensive income (effective portion) Less: Amount of gain reclassified from accumulated other comprehensive income to net revenue (effective portion) June 30, 2016 (In millions) Foreign exchange contracts designated as cash flow hedges $ 57 $ 84 $ 41 $ 100 Effect of Derivative Contracts on Consolidated Statements of Income The following table provides the location in the financial statements of the recognized gains or losses related to our derivative instruments: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (In millions) Foreign exchange contracts designated as cash flow hedges recognized in net revenues $ 19 $ 9 $ 59 $ 41 Foreign exchange contracts not designated as cash flow hedges recognized in other income (expense), net (15 ) 26 (55 ) 17 Total gain recognized from derivative contracts in the statement of income $ 4 $ 35 $ 4 $ 58 The gains and losses related to foreign exchange contracts not designated as cash flow hedges are offset by the foreign currency gains and losses on our assets and liabilities recognized in “Other income (expense), net.” Notional Amounts of Derivative Contracts Derivative transactions are measured in terms of the notional amount; however, this amount is not recorded on the balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the derivative instruments. The notional amount is generally not exchanged, but is used only as the underlying basis on which the value of foreign exchange payments under these contracts is determined. The following table provides the notional amounts of our outstanding derivatives: June 30, 2017 June 30, 2016 (In millions) Foreign exchange contracts designated as cash flow hedges $ 1,857 $ 1,861 Foreign exchange contracts not designated as hedging instruments 4,912 5,183 Total $ 6,769 $ 7,044 |
Loans and Interest Receivable,
Loans and Interest Receivable, Net | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Loans and Interest Receivable, Net | 760 $ 689 $ 665 680 - 759 2,077 1,938 600 - 679 1,951 1,840 < 599 591 553 Total $ 5,308 $ 4,996 The table above excludes certain outstanding consumer loans outside of the U.S., for which no FICO scores are available, with an outstanding balance of $172 million and $117 million at June 30, 2017 and December 31, 2016 , respectively. The following tables present the delinquency status of the principal amount of consumer loans and interest receivable. The amounts shown below are based on the number of days past the billing date to the consumer. Current represents balances that are within 30 days of the billing date: June 30, 2017 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 4,982 $ 207 $ 87 $ 204 $ 498 $ 5,480 December 31, 2016 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 4,601 $ 219 $ 82 $ 211 $ 512 $ 5,113 We charge off consumer loan receivable balances in the month in which a customer balance becomes 180 days past the payment due date. Bankrupt accounts are charged off 60 days after receipt of notification of bankruptcy. Loans receivable past the payment due date continue to accrue interest until such time they are charged off. We record an allowance for loss against the interest and fees receivable. The following table summarizes the activity in the allowance for consumer loans and interest receivable, net of participation interest sold for the six months ended June 30, 2017 and 2016 : June 30, 2017 June 30, 2016 Consumer Loans Receivable Interest Receivable Total Allowance Consumer Loans Receivable Interest Receivable Total Allowance (In millions) Beginning Balance $ 265 $ 40 $ 305 $ 179 $ 32 $ 211 Provisions 229 63 292 179 49 228 Charge-offs (209 ) (63 ) (272 ) (157 ) (51 ) (208 ) Recoveries 18 — 18 18 — 18 Ending Balance $ 303 $ 40 $ 343 $ 219 $ 30 $ 249 The table above excludes receivables from other consumer credit products of $24 million and $16 million at June 30, 2017 and December 31, 2016 , respectively, and allowances of $5 million and $3 million at June 30, 2017 and December 31, 2016 , respectively. The provision for loan losses relating to our consumer loans receivable portfolio is recognized in transaction and loan losses and the provisions for interest receivable is recognized in net revenues from other value added services as a reduction in revenue. Merchant receivables We offer credit products to certain existing small and medium-sized merchants through our PayPal Working Capital product. We closely monitor credit quality for all working capital advances that we extend or purchase through that product to manage and evaluate our related exposure to credit risk. To assess a merchant who wishes to obtain a PayPal Working Capital advance, we use, among other indicators, an internally developed risk model that we refer to as our PayPal Working Capital Risk Model (“PRM”), as a credit quality indicator to help predict the merchant's ability to repay the principal balance and fixed fee related to the working capital advance. Primary drivers of the model include the merchant's annual payment volume and payment processing history with PayPal, prior repayment history with the PayPal Working Capital product, and other measures. Merchants are assigned a PRM credit score within the range of 350 to 750 . We generally expect that merchants to which we extend a working capital advance will have PRM scores greater than 525 . We consider scores above 610 to be very good and to pose less credit risk. For all outstanding working capital advances that we own, we assess the participating merchant’s PRM score on a recurring basis. At June 30, 2017 and December 31, 2016 , the weighted average PRM score related to our PayPal Working Capital balances outstanding was 631 and 625 , respectively. The following table presents the principal amount of PayPal Working Capital advances and fees receivable segmented by our internal PRM score range: June 30, 2017 December 31, 2016 (In millions) > 610 $ 445 $ 378 526-609 108 108 <525 80 72 Total $ 633 $ 558 Through our PayPal Working Capital product, merchants can borrow a certain percentage of their annual payment volume processed by PayPal and are charged a fixed fee for the advance, which targets an annual percentage rate based on the overall credit assessment of the merchant. The fee is fixed at the time the advance is extended and recognized as deferred revenues in our condensed consolidated balance sheet. Advances plus the fixed fee are repaid through a fixed percentage of the merchant's future payment volume that PayPal processes. The fixed fee is amortized to net revenues from other value added services based on the amount repaid over the repayment period. We estimate the repayment period based on PayPal's payment processing history with the merchant. There is no stated interest rate and there is a general requirement that at least 10% of the original amount advanced plus the fixed fee must be repaid every 90 days. We calculate the repayment rate of the merchant's future payment volume so that repayment of the advance and fixed fee is expected to generally occur within 9 to 12 months from the date of the advance. On a monthly basis, we recalculate the repayment period based on the repayment activity on the receivable. As such, actual repayment periods are dependent on actual payment processing volumes. We monitor receivables with repayment periods greater than the original expected repayment period. The following tables present our estimate of the principal amount of PayPal Working Capital advances and fees receivable past their original expected repayment period. June 30, 2017 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 536 $ 33 $ 20 $ 31 $ 13 $ 97 $ 633 December 31, 2016 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 462 $ 35 $ 19 $ 30 $ 12 $ 96 $ 558 The following table summarizes the activity in the allowance for PayPal Working Capital advances and fees receivable, for the six months ended June 30, 2017 and 2016 : June 30, 2017 June 30, 2016 PayPal Working Capital Advances Fees Receivable Total Allowance PayPal Working Capital Advances Fees Receivable Total Allowance (In millions) Beginning Balance $ 28 $ 3 $ 31 $ 19 $ 3 $ 22 Provisions 23 4 27 17 1 18 Charge-offs (21 ) (3 ) (24 ) (14 ) (2 ) (16 ) Recoveries 3 — 3 2 — 2 Ending Balance $ 33 $ 4 $ 37 $ 24 $ 2 $ 26 We charge off the receivable when the repayments are 180 days past our expectation of repayments and the merchant has not made a payment in the last 60 days. We also charge off the receivable when the repayments are 360 days past due regardless of whether or not the merchant has made a payment within the last 60 days. The provision for loan losses relating to our PayPal Working Capital advances is recognized in transaction and loan losses and the provisions for fees receivable is recognized in deferred revenues in our condensed consolidated balance sheet as a reduction in deferred revenue." id="sjs-B4">Loans and Interest Receivable, Net We offer credit products to consumers who choose PayPal Credit as their funding source at checkout and working capital advances to certain small and medium-sized PayPal merchants through our PayPal Working Capital product. In the U.S., we work with independent chartered financial institutions that extend credit to the consumer or merchant using our credit products. For our consumer credit products outside the U.S., we extend credit through our Luxembourg banking subsidiary. For our merchant credit products outside the U.S., we extend working capital advances in the U.K. through our Luxembourg banking subsidiary, and we extend working capital advances in Australia through an Australian subsidiary. We purchase the related receivables extended by an independent chartered financial institution in the U.S. and are responsible for servicing functions related to all our credit products. During the six months ended June 30, 2017 and 2016 , we purchased approximately $4.5 billion and $3.9 billion , respectively, in credit receivables. As part of our arrangement with an independent chartered financial institution in the U.S., we sell back a participation interest in the pool of consumer receivables outstanding under PayPal Credit consumer accounts. Under this arrangement, we do not recognize gains or losses on the sale of the participation interest as the carrying amount of the participation interest sold approximates the fair value at time of transfer. However, we have a separate arrangement with certain investors under which we sold to these investors a participation interest in certain consumer loans receivable that we purchased, where the consideration received exceeded the carrying amount of the participation interest sold, which resulted in a gain reflected as net revenues in our condensed consolidated financial statements. Loans, advances and interest and fees receivable are reported at their outstanding principal balances, net of any participation interest sold, including unamortized deferred origination costs and estimated collectible interest and fees. Consumer receivables As of June 30, 2017 and December 31, 2016 , the total outstanding balance in our pool of consumer receivables was $5.5 billion and $5.1 billion , respectively, net of the participation interest sold to the independent chartered financial institution and other investors of $1.0 billion . The independent chartered financial institution and other investors have no recourse against us related to their participation interests for failure of debtors to pay when due. The participation interests held by the chartered financial institution and other investors have the same priority to the interests held by us and are subject to the same credit, prepayment, and interest rate risk associated with this pool of consumer receivables. All risks of loss are shared equally based on participation interests held amongst all participating stakeholders. We use a consumer's FICO score, where available, among other measures, in evaluating the credit quality of our U.S. PayPal Credit consumer receivables. A FICO score is a type of credit score that lenders use to assess an applicant's credit risk and whether to extend credit. Individual FICO scores are generally obtained each quarter in which the U.S. consumer has an outstanding consumer receivable owned by PayPal Credit. The weighted average U.S. consumer FICO scores related to our loans and interest receivable balance outstanding at June 30, 2017 and December 31, 2016 was 679 . The Company has revised its weighted average U.S. Consumer FICO score as of December 31, 2016 to conform to the current period presentation. As of June 30, 2017 and December 31, 2016 , approximately 52.1% of the pool of U.S. consumer receivables and interest receivable balance was due from U.S. consumers with FICO scores greater than or equal to 680 , which is generally considered "prime" by the consumer credit industry. As of June 30, 2017 and December 31, 2016 , approximately 11.1% of the pool of U.S. consumer receivables and interest receivable balance was due from U.S. customers with FICO scores below 599 . As of June 30, 2017 and December 31, 2016 , approximately 90.9% and 90.0% , respectively, of the portfolio of consumer receivables and interest receivable was current. The following table presents the principal amount of U.S. consumer loans and interest receivable segmented by a FICO score range: June 30, 2017 December 31, 2016 (In millions) > 760 $ 689 $ 665 680 - 759 2,077 1,938 600 - 679 1,951 1,840 < 599 591 553 Total $ 5,308 $ 4,996 The table above excludes certain outstanding consumer loans outside of the U.S., for which no FICO scores are available, with an outstanding balance of $172 million and $117 million at June 30, 2017 and December 31, 2016 , respectively. The following tables present the delinquency status of the principal amount of consumer loans and interest receivable. The amounts shown below are based on the number of days past the billing date to the consumer. Current represents balances that are within 30 days of the billing date: June 30, 2017 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 4,982 $ 207 $ 87 $ 204 $ 498 $ 5,480 December 31, 2016 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 4,601 $ 219 $ 82 $ 211 $ 512 $ 5,113 We charge off consumer loan receivable balances in the month in which a customer balance becomes 180 days past the payment due date. Bankrupt accounts are charged off 60 days after receipt of notification of bankruptcy. Loans receivable past the payment due date continue to accrue interest until such time they are charged off. We record an allowance for loss against the interest and fees receivable. The following table summarizes the activity in the allowance for consumer loans and interest receivable, net of participation interest sold for the six months ended June 30, 2017 and 2016 : June 30, 2017 June 30, 2016 Consumer Loans Receivable Interest Receivable Total Allowance Consumer Loans Receivable Interest Receivable Total Allowance (In millions) Beginning Balance $ 265 $ 40 $ 305 $ 179 $ 32 $ 211 Provisions 229 63 292 179 49 228 Charge-offs (209 ) (63 ) (272 ) (157 ) (51 ) (208 ) Recoveries 18 — 18 18 — 18 Ending Balance $ 303 $ 40 $ 343 $ 219 $ 30 $ 249 The table above excludes receivables from other consumer credit products of $24 million and $16 million at June 30, 2017 and December 31, 2016 , respectively, and allowances of $5 million and $3 million at June 30, 2017 and December 31, 2016 , respectively. The provision for loan losses relating to our consumer loans receivable portfolio is recognized in transaction and loan losses and the provisions for interest receivable is recognized in net revenues from other value added services as a reduction in revenue. Merchant receivables We offer credit products to certain existing small and medium-sized merchants through our PayPal Working Capital product. We closely monitor credit quality for all working capital advances that we extend or purchase through that product to manage and evaluate our related exposure to credit risk. To assess a merchant who wishes to obtain a PayPal Working Capital advance, we use, among other indicators, an internally developed risk model that we refer to as our PayPal Working Capital Risk Model (“PRM”), as a credit quality indicator to help predict the merchant's ability to repay the principal balance and fixed fee related to the working capital advance. Primary drivers of the model include the merchant's annual payment volume and payment processing history with PayPal, prior repayment history with the PayPal Working Capital product, and other measures. Merchants are assigned a PRM credit score within the range of 350 to 750 . We generally expect that merchants to which we extend a working capital advance will have PRM scores greater than 525 . We consider scores above 610 to be very good and to pose less credit risk. For all outstanding working capital advances that we own, we assess the participating merchant’s PRM score on a recurring basis. At June 30, 2017 and December 31, 2016 , the weighted average PRM score related to our PayPal Working Capital balances outstanding was 631 and 625 , respectively. The following table presents the principal amount of PayPal Working Capital advances and fees receivable segmented by our internal PRM score range: June 30, 2017 December 31, 2016 (In millions) > 610 $ 445 $ 378 526-609 108 108 <525 80 72 Total $ 633 $ 558 Through our PayPal Working Capital product, merchants can borrow a certain percentage of their annual payment volume processed by PayPal and are charged a fixed fee for the advance, which targets an annual percentage rate based on the overall credit assessment of the merchant. The fee is fixed at the time the advance is extended and recognized as deferred revenues in our condensed consolidated balance sheet. Advances plus the fixed fee are repaid through a fixed percentage of the merchant's future payment volume that PayPal processes. The fixed fee is amortized to net revenues from other value added services based on the amount repaid over the repayment period. We estimate the repayment period based on PayPal's payment processing history with the merchant. There is no stated interest rate and there is a general requirement that at least 10% of the original amount advanced plus the fixed fee must be repaid every 90 days. We calculate the repayment rate of the merchant's future payment volume so that repayment of the advance and fixed fee is expected to generally occur within 9 to 12 months from the date of the advance. On a monthly basis, we recalculate the repayment period based on the repayment activity on the receivable. As such, actual repayment periods are dependent on actual payment processing volumes. We monitor receivables with repayment periods greater than the original expected repayment period. The following tables present our estimate of the principal amount of PayPal Working Capital advances and fees receivable past their original expected repayment period. June 30, 2017 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 536 $ 33 $ 20 $ 31 $ 13 $ 97 $ 633 December 31, 2016 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 462 $ 35 $ 19 $ 30 $ 12 $ 96 $ 558 The following table summarizes the activity in the allowance for PayPal Working Capital advances and fees receivable, for the six months ended June 30, 2017 and 2016 : June 30, 2017 June 30, 2016 PayPal Working Capital Advances Fees Receivable Total Allowance PayPal Working Capital Advances Fees Receivable Total Allowance (In millions) Beginning Balance $ 28 $ 3 $ 31 $ 19 $ 3 $ 22 Provisions 23 4 27 17 1 18 Charge-offs (21 ) (3 ) (24 ) (14 ) (2 ) (16 ) Recoveries 3 — 3 2 — 2 Ending Balance $ 33 $ 4 $ 37 $ 24 $ 2 $ 26 We charge off the receivable when the repayments are 180 days past our expectation of repayments and the merchant has not made a payment in the last 60 days. We also charge off the receivable when the repayments are 360 days past due regardless of whether or not the merchant has made a payment within the last 60 days. The provision for loan losses relating to our PayPal Working Capital advances is recognized in transaction and loan losses and the provisions for fees receivable is recognized in deferred revenues in our condensed consolidated balance sheet as a reduction in deferred revenue. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments As of June 30, 2017 and December 31, 2016 , approximately $28.7 billion and $28.8 billion , respectively, of unused credit was available to PayPal Credit account holders. While this amount represents the total unused credit available, we have not experienced, and do not anticipate, that all of our PayPal Credit account holders will access their entire available credit at any given point in time. In addition, the individual lines of credit that make up this unused credit are subject to periodic review and termination by the chartered financial institution that is the issuer of PayPal Credit products based on, among other things, account usage and customer creditworthiness. When a consumer funds a purchase in the U.S. using a PayPal Credit product issued by a chartered financial institution, the chartered financial institution extends credit to the consumer, funds the extension of credit at the point of sale and advances funds to the merchant. We subsequently purchase the receivables related to the consumer loans extended by the chartered financial institution and, as a result of such purchase, bear the risk of loss in the event of loan defaults. Although the chartered financial institution continues to own each customer account, we own the related receivable (excluding participation interests sold) and are responsible for all servicing functions related to the account. In the third quarter of 2015, we entered into a credit agreement ("Credit Agreement") that provides for an unsecured $2.0 billion , five -year revolving credit facility that includes a $150 million letter of credit sub-facility and a $150 million swingline sub-facility, with available borrowings under the revolving credit facility reduced by the amount of any letters of credit and swingline borrowings outstanding from time to time. Borrowings and other amounts payable under the Credit Agreement are guaranteed by our subsidiary PayPal, Inc. (the "Guarantor"). We may also, subject to the agreement of the applicable lenders, increase the commitments under the revolving credit facility by up to $500 million . Subject to specified conditions, we may designate one or more of our subsidiaries as additional borrowers under the Credit Agreement provided that we and the Guarantor guarantee all borrowings and other obligations of any such subsidiaries under the Credit Agreement. As of June 30, 2017 , no subsidiaries were designated as additional borrowers. Funds borrowed under the Credit Agreement may be used for working capital, capital expenditures, acquisitions and other general corporate purposes. As of June 30, 2017 , no borrowings or letters of credit were outstanding under the Credit Agreement. Accordingly, at June 30, 2017 , $2.0 billion of borrowing capacity was available for the purposes permitted by the Credit Agreement subject to customary conditions to borrowing. Litigation and Regulatory Matters Overview We are involved in legal and regulatory proceedings on an ongoing basis. Many of these proceedings are in early stages, and may seek an indeterminate amount of damages. If we believe that a loss arising from such matters is probable and can be reasonably estimated, we accrue the estimated liability in our financial statements. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For those proceedings in which an unfavorable outcome is reasonably possible but not probable, we have disclosed an estimate of the reasonably possible loss or range of losses or we have concluded that an estimate of the reasonably possible loss or range arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) are not material. If we cannot estimate the probable or reasonably possible loss or range of losses arising from a legal proceeding, we have disclosed that fact. In assessing the materiality of a legal proceeding, we evaluate, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require us to change our business practices in a manner that could have a material adverse impact on our business. With respect to the matters disclosed in this Note 11, we are unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies. Amounts accrued for legal and regulatory proceedings for which we believe a loss is probable were not material for the six months ended June 30, 2017 . Except as otherwise noted for the proceedings described in this Note 11, we have concluded, based on currently available information, that reasonably possible losses arising directly from the proceedings (i.e., monetary damages or amounts paid in judgment or settlement) in excess of our recorded accruals are also not material. However, legal and regulatory proceedings are inherently unpredictable and subject to significant uncertainties. If one or more matters were resolved against us in a reporting period for amounts in excess of management’s expectations, the impact on our operating results or financial condition for that reporting period could be material. Regulatory Proceedings We are subject to U.S. economic and trade sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”). We have self-reported to OFAC certain transactions that were inadvertently processed but subsequently identified as possible violations of U.S. economic and trade sanctions. In March 2015, we reached a settlement with OFAC regarding possible violations arising from our sanctions compliance practices between 2009 and 2013, prior to the implementation of our real-time transaction scanning program. Subsequently, we have self-reported additional transactions as possible violations, and we have received new subpoenas from OFAC seeking additional information about certain of these transactions. Such self-reported transactions could result in claims or actions against us, including litigation, injunctions, damage awards, fines or penalties, or require us to change our business practices in a manner that could result in a material loss, require significant management time, result in the diversion of significant operational resources or otherwise harm our business. On March 28, 2016, we received a Civil Investigative Demand (“CID”) from the Federal Trade Commission (“FTC”) as part of its investigation to determine whether we, through our Venmo service, have been or are engaged in deceptive or unfair practices in violation of the Federal Trade Commission Act. The CID requests the production of documents and answers to written questions related to our Venmo service. We are cooperating with the FTC in connection with the CID. The CID could lead to an enforcement action and/or one or more consent orders, which may result in substantial costs, including legal fees, fines, penalties, and remediation expenses and actions, and could require us to change the manner in which we operate Venmo. Legal Proceedings On December 28, 2016, a putative securities class action captioned Cho v. PayPal Holdings, Inc., et al., Case No. 3:16-cv-07371 (the “Securities Case”), was filed in the U.S. District Court for the Northern District of California (the “Court”). The Securities Case asserted claims relating to our disclosure in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016, that on March 28, 2016, we received a Civil Investigative Demand from the FTC as part of its investigation to determine whether we, through our Venmo service, have been or are engaged in deceptive or unfair practices in violation of the Federal Trade Commission Act. The Securities Case purported to be brought on behalf of purchasers of eBay’s stock on or after December 19, 2013 who subsequently received the Company’s stock pursuant to eBay’s spin-off of the Company, effective as of July 17, 2015, and/or purchasers of the Company’s stock between July 20, 2015 and April 28, 2016, and asserted claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) against the Company, its Chief Executive Officer, Chief Financial Officer, and former interim Chief Financial Officer, and eBay and certain of its former officers, including the Chairman of our Board of Directors. The Securities Case alleged that defendants made materially false and misleading statements or omissions regarding our compliance with applicable laws and regulations, including the failure to disclose that we were purportedly engaging in unfair trade practices through our Venmo service and that as a result of alleged false and misleading statements or omissions, our stock traded at artificially inflated prices. The Securities Case sought unspecified compensatory damages on behalf of the putative class members. On March 23, 2017, the Court appointed a lead plaintiff and lead counsel to represent the putative class. On May 12, 2017, the lead plaintiff filed an amended complaint that, among other things, did not name eBay or the former eBay officers as defendants. On June 1, 2017, the lead plaintiff voluntarily dismissed the Securities Case without prejudice. On January 12, 2017, a putative shareholder derivative action captioned Silverman v. Schulman, et al., Case No. 5:17-cv-00162, was filed in the U.S. District Court for the Northern District of California based on substantially similar allegations underlying the Securities Case described above (the “California Derivative Case”). On February 8, 2017, the Court entered an order formally relating the California Derivative Case to the Securities Case and assigning the case to the same judge handling the Securities Case. On the same day, the Court also entered an order staying the California Derivative Case pending resolution of the defendants’ anticipated motions to dismiss the Securities Case. On March 24, 2017, a second derivative action substantially similar to the California Derivative Case captioned Seeman v. Schulman, et al., Case No. 1:17-cv-00318-UNA, was filed in the U.S. District Court for the District of Delaware (the “Delaware Derivative Case”). On April 19, 2017, the Court in the Delaware Derivative Case issued an order adopting a stipulation filed by the parties transferring the Delaware Derivative Case to the U.S. District Court for the Northern District of California so that the Delaware Derivative Case can be consolidated with the pending California Derivative Case. On April 27 and 28, 2017, two additional shareholder derivative lawsuits substantially similar to the California Derivative Case and Delaware Derivative Case were filed in the U.S. District Court for the Northern District of California. These cases are captioned Sims v. Schulman, et al., Case No. 1:17-cv-02428-HRL and Liss v. Schulman, et al., Case No. 1:17-cv-02446-NC (together with the California Derivative Case and the Delaware Derivative Case, the “Derivative Cases”). The Derivative Cases are purportedly brought on behalf of the Company and allege that the Company’s Chief Executive Officer, Chief Financial Officer, former interim Chief Financial Officer, and members of its Board of Directors breached their fiduciary duties to the Company, violated Section 14(a) of the Exchange Act, and were unjustly enriched by, among other things, causing or permitting the Company to issue materially false and misleading statements or omissions regarding the Company’s compliance with applicable laws and regulation with respect to its Venmo service, as alleged in the Securities Case, and/or by permitting or causing the Company to engage in unfair trade practices through its Venmo service. The Derivative Cases seek, among other things, to recover unspecified compensatory damages on behalf of the Company arising out of the individual defendants’ alleged wrongful conduct. Although plaintiffs in the Derivative Cases do not seek relief against the Company, we have certain indemnification obligations to the individual defendants. On June 30, 2017, the Court issued an order approving a stipulation filed by the parties in the Derivative Cases that consolidates these cases, appoints co-lead plaintiffs’ counsel for the consolidated case, and gives plaintiffs 30 days from the Court’s order to file a consolidated amended complaint or requires plaintiffs to dismiss the case within seven days following that date. We have received subpoenas from the U.S. Department of Justice (“DOJ”) seeking the production of certain information related to our historical anti-money laundering program. We are cooperating with the DOJ in providing information in response to the subpoenas. We are unable to predict the outcome of the government's investigation. General Matters Other third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to patent disputes, and expect that we will increasingly be subject to additional patent infringement claims involving various aspects of our business as our products and services continue to expand in scope and complexity. Such claims may be brought directly or indirectly against our companies and/or against our customers (who may be entitled to contractual indemnification under their contracts with us), and we are subject to increased exposure to such claims as a result of our acquisitions, particularly in cases where we are entering into new lines of business in connection with such acquisitions. We have in the past been forced to litigate such claims, and we believe that additional lawsuits alleging such claims will be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and costly to defend and resolve, could require expensive changes in our methods of doing business or could require us to enter into costly royalty or licensing agreements on unfavorable terms or make substantial payments to settle claims or to satisfy damages awarded by courts. From time to time, we are involved in other disputes or regulatory inquiries that arise in the ordinary course of business, including suits by our customers (individually or as class actions) alleging, among other things, improper disclosure of our prices, rules or policies, that our practices, prices, rules, policies or customer/user agreements violate applicable law or that we have acted unfairly and/or not acted in conformity with such prices, rules, policies or agreements. In addition to these types of disputes and regulatory inquiries, our operations are also subject to regulatory and/or legal review and/or challenges that tend to reflect the increasing global regulatory focus to which the payments industry is subject and, when taken as a whole with other regulatory and legislative action, such actions could result in the imposition of costly new compliance burdens on our business and customers and may lead to increased costs and decreased transaction volume and revenue. Further, the number and significance of these disputes and inquiries are increasing as we have grown larger, our business has expanded in scope (both in terms of the range of products and services that we offer and our geographical operations) and our products and services have increased in complexity. Any claims or regulatory actions against us, whether meritorious or not, could be time consuming, result in costly litigation, settlement payments, damage awards (including statutory damages for certain causes of action in certain jurisdictions), fines, penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, require us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm our business. Indemnification Provisions We entered into a separation and distribution agreement and various other agreements with eBay to govern the separation and relationship of the two companies going forward. These agreements provide for specific indemnity and liability obligations and could lead to disputes between us and eBay, which may be significant. In addition, the indemnity rights we have against eBay under the agreements may not be sufficient to protect us and our indemnity obligations to eBay may be significant. In the ordinary course of business, we include limited indemnification provisions in certain of our agreements with parties with whom we have commercial relationships, including our standard marketing, promotions, and application-programming-interface license (API) agreements. Under these contracts, we generally indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by any third party with respect to our domain names, trademarks, logos, and other branding elements to the extent that such marks are related to the subject agreement. In a limited number of agreements, we have provided an indemnity for other types of third-party claims, which are indemnities mainly related to intellectual property rights. We have also provided an indemnity to our payments processors in the event of certain third-party claims or card association fines against the processor arising out of conduct by us or our customers. It is not possible to determine the maximum potential loss under these indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular situation. To date, no significant costs have been incurred, either individually or collectively, in connection with our indemnification provisions. Off-Balance Sheet Arrangements As of June 30, 2017 and December 31, 2016 , we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources. Protection Programs We provide merchants and consumers with protection programs on substantially all transactions completed through our Payments Platform. These programs protect both merchants and consumers from loss primarily due to fraud and counterparty performance. Our Buyer Protection Program provides protection to consumers for qualifying purchases by reimbursing the consumer for the full amount of the purchase if a purchased item does not arrive or does not match the seller’s description. Our Seller Protection Programs provide protection to merchants against claims that a transaction was not authorized by the buyer or claims that an item was not received by covering the seller for the full amount of the payment on eligible sales. The maximum potential exposure under our protection programs is estimated to be the portion of total eligible transaction volume (TPV) for which buyer or seller protection claims may be raised under our existing user agreements. Since eligible transactions are typically completed in a period significantly shorter than the period under which disputes may be opened, and based on our historical losses to date, we do not believe that that the maximum potential exposure is representative of our actual potential exposure. The actual amount of potential exposure cannot be quantified as we are unable to determine total eligible transactions where performance by a merchant or customer is incomplete or completed transactions that may result in a claim under our protection programs. We record a liability with respect to losses under these protection programs when they are probable and the amount can be reasonably estimated. The following table provides management's estimate of the maximum potential exposure related to our protection programs as of June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 (In millions) Maximum potential exposure $ 139,479 $ 131,739 The following table provides the amount of allowance for transaction losses related to our protection programs as of June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 (In millions) Allowance for transaction losses $ 223 $ 222 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of June 30, 2017 and December 31, 2016 , there were no material amounts payable to or amounts receivable from related parties. All contracts with related parties are at rates and terms that we believe are comparable with those that could be entered into with independent third parties. For all periods presented, there were no material related party transactions. |
Stock Repurchase Programs
Stock Repurchase Programs | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Stock Repurchase Programs | Stock Repurchase Programs In January 2016, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $2 billion of our common stock, with no expiration from the date of authorization. In April 2017, our Board of Directors authorized an additional stock repurchase program that provides for the repurchase of up to $5 billion of our common stock, with no expiration from the date of authorization. This program will become effective upon completion of the January 2016 stock repurchase program. The stock repurchase programs are intended to offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, may also be used to make opportunistic repurchases of our common stock to reduce outstanding share count. Any share repurchases under our stock repurchase programs may be made through open market transactions, block trades, privately negotiated transactions or other means at times and in such amounts as management deems appropriate and will be funded from our working capital or other financing alternatives. However, any stock repurchases are subject to market conditions and other uncertainties and we cannot predict if or when any stock repurchases will be made. Moreover, we may terminate our stock repurchase programs at any time without notice. The stock repurchase activity under the January 2016 stock repurchase program during the six months ended June 30, 2017 is summarized as follows: Shares Repurchased Average Price (1) Value of Shares Repurchased Remaining Amount Authorized (In millions, except per share amounts) Balance as of January 2017 $ 1,005 Repurchases of shares of common stock for the three months ended March 31, 2017 12.2 $ 42.38 517 (517 ) Repurchases of shares of common stock for the three months ended June 30, 2017 1.8 $ 49.41 89 (89 ) Balance as of June 30, 2017 14.0 $ 606 $ 399 (1) Average price paid per share includes broker commissions. These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. No repurchased shares of common stock have been retired. No activity has occurred under the April 2017 stock repurchase program. |
Stock-Based Plans
Stock-Based Plans | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Plans | Stock-Based Plans Stock Options As of June 30, 2017 , 3.0 million options to purchase shares of common stock were outstanding. No new options were granted in the six months ended June 30, 2017 . Restricted Stock Units (RSUs) and Performance-Based Restricted Stock Units (PBRSUs) The following table summarizes the RSU and PBRSU activity under our equity incentive plans for the six months ended June 30, 2017 : Units (In thousands) Outstanding at January 1, 2017 29,185 Awarded 17,996 Vested (8,791 ) Forfeited (2,142 ) Outstanding at June 30, 2017 36,248 Expected to vest 31,112 The weighted average grant-date fair value of RSUs and PBRSUs granted during the six months ended June 30, 2017 was $42.39 per share. In the six months ended June 30, 2017, the Company granted RSUs that vest in equal annual installments over a three -year performance period, 2.8 million PBRSUs with a one -year performance period and cliff vesting following the completion of the performance period in February 2018 (one year from the annual incentive award cycle grant date) and 1.3 million PBRSUs with a three -year performance period. Over the performance period, the number of PBRSUs that may be issued and the related stock-based compensation expense that is recognized is adjusted upward or downward based upon the probability of achieving the approved performance targets against the performance metrics. Depending on the probability of achieving the pre-established performance targets, the PBRSUs issued could range from 0% to 200% of the target amount. Stock-based Compensation Expense We record stock-based compensation expense for our equity incentive plans in accordance with the provisions of the authoritative accounting guidance, which requires the measurement and recognition of compensation expense based on estimated fair values. The impact on our results of operations of recording stock-based compensation expense under our equity incentive plans for the three and six months ended June 30, 2017 and 2016 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (In millions) Customer support and operations $ 34 $ 22 $ 64 $ 40 Sales and marketing 33 22 61 38 Product development 59 35 104 68 General and administrative 51 33 93 60 Depreciation and amortization 3 1 5 2 Total stock-based compensation expense $ 180 $ 113 $ 327 $ 208 Capitalized as part of internal use software and website development costs $ 7 $ 4 $ 10 $ 6 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate for the three and six months ended June 30, 2017 was 8% and 10% , respectively. The difference between our effective tax rate and the U.S. federal statutory rate of 35% in both periods was primarily the result of foreign income taxed at different rates. |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In the first quarter of 2017, management approved a plan to implement a strategic reduction of its existing global workforce. The total cost of this plan is expected to be approximately $40 million . The strategic reduction and timing of cash payments associated with this plan are expected to be substantially completed by the end of 2017. The following table summarizes the restructuring costs recognized during the three and six months ended June 30, 2017: Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 (In millions) Employee severance and benefits $ — $ 40 Total $ — $ 40 No restructuring costs were recognized during the three and six months ended June 30, 2016. The following table summarizes the restructuring reserve activity during the six months ended June 30, 2017 : Employee Severance and Benefits (In millions) Accrued liability as of January 1, 2017 $ — Charges 40 Payments (13 ) Accrued liability as of June 30, 2017 $ 27 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income The following table summarizes the changes in accumulated balances of other comprehensive income for the three months ended June 30, 2017 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Currency Translation Estimated tax (expense) benefit Total (In millions) Beginning balance $ 59 $ (4 ) $ (55 ) $ 2 $ 2 Other comprehensive income (loss) before reclassifications (98 ) — 16 1 (81 ) Less: Amount of gain reclassified from accumulated other comprehensive income 19 — — — 19 Net current period other comprehensive income (loss) (117 ) — 16 1 (100 ) Ending balance $ (58 ) $ (4 ) $ (39 ) $ 3 $ (98 ) The following table summarizes the changes in accumulated balances of other comprehensive income for the three months ended June 30, 2016 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Estimated tax (expense) benefit Total (In millions) Beginning balance $ 21 $ (4 ) $ (45 ) $ 1 $ (27 ) Other comprehensive income (loss) before reclassifications 88 9 (5 ) (4 ) 88 Less: Amount of gain reclassified from accumulated other comprehensive income 9 — — — 9 Net current period other comprehensive income (loss) 79 9 (5 ) (4 ) 79 Ending balance $ 100 $ 5 $ (50 ) $ (3 ) $ 52 The following table summarizes the changes in accumulated balances of other comprehensive income for the six months ended June 30, 2017 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Currency Translation Estimated tax (expense) benefit Total (In millions) Beginning balance $ 131 $ (5 ) $ (68 ) $ 1 $ 59 Other comprehensive income (loss) before reclassifications (130 ) — 29 2 (99 ) Less: Amount of gain (loss) reclassified from accumulated other comprehensive income 59 (1 ) — — 58 Net current period other comprehensive income (loss) (189 ) 1 29 2 (157 ) Ending balance $ (58 ) $ (4 ) $ (39 ) $ 3 $ (98 ) The following table summarizes the changes in accumulated balances of other comprehensive income for the six months ended June 30, 2016 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Estimated tax (expense) benefit Total (In millions) Beginning balance $ 57 $ (16 ) $ (53 ) $ 3 $ (9 ) Other comprehensive income (loss) before reclassifications 84 18 3 (6 ) 99 Less: Amount of gain (loss) reclassified from accumulated other comprehensive income 41 (3 ) — — 38 Net current period other comprehensive income (loss) 43 21 3 (6 ) 61 Ending balance $ 100 $ 5 $ (50 ) $ (3 ) $ 52 The following table provides details about reclassifications out of accumulated other comprehensive income for the three months ended June 30, 2017 and 2016 : Details about Accumulated Other Comprehensive Income Components Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement of Income Three Months Ended June 30, 2017 2016 (In millions) Gains on cash flow hedges-foreign exchange contracts $ 19 $ 9 Net revenues Unrealized losses on investments — — Other income (expense), net $ 19 $ 9 Income before income taxes — — Income tax expense Total reclassifications for the period $ 19 $ 9 Net income The following table provides details about reclassifications out of accumulated other comprehensive income for the six months ended June 30, 2017 and 2016 : Details about Accumulated Other Comprehensive Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement of Income Six Months Ended June 30, 2017 2016 (In millions) Gains on cash flow hedges-foreign exchange contracts $ 59 $ 41 Net revenues Unrealized losses on investments (1 ) (3 ) Other income (expense), net $ 58 $ 38 Income before income taxes — — Income tax expense Total reclassifications for the period $ 58 $ 38 Net income |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In July 2017, we completed our acquisition of TIO Networks Corp. for approximately $238 million , consisting of cash. This acquisition will be accounted for as a business combination. We acquired TIO Networks to expand our scale of operations, complement our product portfolio, and to help accelerate our entry into bill payments. |
Overview and Summary of Signi25
Overview and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements include the financial statements of PayPal and our wholly and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Investments in entities where we hold less than a 20% ownership interest are generally accounted for using the cost method of accounting, and our share of the investees’ results of operations is included in other income (expense), net on our condensed consolidated statement of income to the extent dividends are received. Our investment balance is included in long-term investments on our condensed consolidated balance sheet. |
Principles of Combination and Consolidation | These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2016 (the "2016 Form 10-K") filed with the Securities and Exchange Commission. |
Equity and Cost Method Investments | The accompanying condensed consolidated financial statements include the financial statements of PayPal and our wholly and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Investments in entities where we hold less than a 20% ownership interest are generally accounted for using the cost method of accounting, and our share of the investees’ results of operations is included in other income (expense), net on our condensed consolidated statement of income to the extent dividends are received. Our investment balance is included in long-term investments on our condensed consolidated balance sheet. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses, during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to provisions for transaction and loan losses, loss contingencies, income taxes, revenue recognition and the valuation of goodwill and intangible assets. We base our estimates on historical experience and various other assumptions which we believe to be reasonable under the circumstances. Actual results could differ from those estimates. |
Recent Accounting Guidance | Recent Accounting Guidance In 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In 2015, the FASB deferred the effective date to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. In 2016, the FASB updated the guidance for reporting revenue gross versus net to improve the implementation guidance on principal versus agent considerations, and for identifying performance obligations and the accounting of intellectual property licenses. In addition, the FASB introduced practical expedients and made narrow scope improvements to the new accounting guidance. We have evaluated the impact of this new standard and have concluded that our financial statements will not be materially impacted upon adoption; however, we expect to expand certain disclosures as required. We will adopt the guidance on January 1, 2018 on a full retrospective basis, reflecting the application of the new standard in each prior reporting period. In 2016, the FASB issued new accounting guidance related to the classification and measurement of financial instruments. This new standard makes limited amendments to the guidance in GAAP by requiring equity investments to be measured at fair value with changes in fair value recognized in net income. This new standard also amends the presentation of certain fair value changes for financial liabilities measured at fair value and it also amends certain disclosure requirements associated with the fair value of financial instruments. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted in limited situations. We are required to apply the new guidance on a modified retrospective basis to all outstanding instruments, with a cumulative effect adjustment as of the date of adoption. We are evaluating the impact and approach to adopting this new accounting guidance on our financial statements, which we expect will be limited to our cost method investments. In 2016, the FASB issued new accounting guidance related to accounting for leases, which will require lessees to recognize lease assets and lease liabilities on the balance sheet for the rights and obligations created by all leases with terms greater than 12 months. As we are not a lessor, other changes in the standard applicable to lessors do not apply. The standard is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. We are required to adopt the guidance using a modified retrospective basis and can elect to apply optional practical expedients. We are evaluating the impact and approach to adopting this new accounting guidance on our financial statements. In 2016, the FASB issued new guidance on the measurement of credit losses on financial instruments. Credit losses on loans, trade and other receivables, held-to-maturity debt securities and other instruments will reflect our current estimate of the expected credit losses that generally will result in the earlier recognition of allowances for losses. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. Additional disclosures will be required, including information used to track credit quality by year of origination for most financing receivables. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are required to apply the standard provisions as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted with impairment of available-for-sale debt securities applied prospectively after adoption. We are evaluating the impact and approach to adopting this new accounting guidance on our financial statements. In 2016, the FASB issued new guidance on classifying certain cash receipts and cash payments on the statement of cash flows. The new guidance addresses the classification of cash flows related to: debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, including bank-owned life insurance, distributions received from equity method investees and beneficial interests in securitization transactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The guidance should be applied retrospectively after adoption. The adoption of this standard is not expected to have a material impact on our financial statements. In 2016, the FASB issued new guidance on restricted cash on the statement of cash flows. The new guidance requires the classification and presentation of changes in restricted cash and cash equivalents in the statement of cash flows. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning and ending balances shown on the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The guidance should be applied retrospectively after adoption. The adoption of this standard is not expected to have a material impact on our financial statements. In 2017, the FASB issued new guidance clarifying the scope and application of the de-recognition of non-financial assets and the sale or transfer of non-financial assets, including partial sales. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. Either of the following transition methods is permitted: (i) a full retrospective approach reflecting the application of the new standard in each prior reporting period, or (ii) a modified retrospective approach with a cumulative-effect adjustment to the opening balance of retained earnings in the year the new standard is first applied. The adoption of this standard is not expected to have a material impact on our financial statements. In 2017, the FASB issued new guidance that requires certain premiums on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. The new standard is effective at the same time as the new revenue recognition standard. Therefore, the new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Transition is on a modified retrospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are evaluating the impact this new accounting guidance will have on our financial statements. In 2017, the FASB issued new guidance clarifying which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Specifically, an entity would apply modification accounting only if the fair value, vesting conditions, or classification of the awards changes as a result of changes in the terms or conditions. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The guidance will be applied prospectively upon adoption. The amount of the impact to share-based compensation expense will depend on the terms specified in any new changes to the share-based payment awards. Recently Adopted Accounting Guidance In 2016, the FASB issued new guidance on the accounting for share-based payment compensation. The new guidance makes amendments to the following areas: accounting for income taxes upon vesting or settlement of awards, presentation of excess tax benefits or tax deficiencies on the statement of cash flows, accounting for forfeitures, minimum statutory withholding requirements and presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet minimum statutory withholding requirements. We adopted the new guidance effective January 1, 2017. As a result of the adoption, starting in the first quarter of 2017, stock-based compensation ("SBC") excess tax benefits or tax deficiencies are reflected in the consolidated statement of income within the provision for income taxes rather than in the consolidated balance sheet within additional paid-in capital. For the three and six months ended June 30, 2017, we recognized approximately $20 million and $24 million , respectively, of SBC net excess tax benefits within the provision for income taxes. Additionally, starting in the first quarter of 2017, we presented the cash flows related to the applicable SBC net excess tax benefits in operating activities along with other income tax cash flows rather than in financing activities. The remaining amendments did not have a material impact on our financial statements. In 2016, the FASB issued new guidance on the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. The new guidance requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. Adoption of the new guidance must be made on a modified retrospective basis. We elected to early adopt the new guidance effective January 1, 2017. As a result of the adoption, we recorded a decrease of approximately $41 million in retained earnings as of the beginning of the first quarter of 2017, with a corresponding decrease in prepaid taxes related to the unamortized tax expense attributed to intra-entity transfers of assets previously deferred. Additionally, for the three and six months ended June 30, 2017 we did not recognize approximately $4 million and $8 million , respectively, of amortization of prepaid taxes attributed to prior period intra-entity asset transfers previously deferred within the provision for income taxes. As of adoption, when a new intra-entity transfer of assets occurs, we will recognize the income tax consequences associated with this activity in the consolidated statement of income in the period the transaction takes place. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table sets forth the computation of basic and diluted net income per share for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (In millions, except per share amounts) Numerator: Net income $ 411 $ 323 $ 795 $ 688 Denominator: Weighted average shares of common stock - basic 1,202 1,210 1,203 1,213 Dilutive effect of equity incentive awards 13 5 13 7 Weighted average shares of common stock - diluted 1,215 1,215 1,216 1,220 Net income per share: Basic $ 0.34 $ 0.27 $ 0.66 $ 0.57 Diluted $ 0.34 $ 0.27 $ 0.65 $ 0.56 Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive — 11 3 8 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill balances and adjustments | The following table presents goodwill balances and adjustments to those balances during the six months ended June 30, 2017 : December 31, Goodwill Acquired Adjustments June 30, (In millions) Total Goodwill $ 4,059 $ — $ 3 $ 4,062 |
Components of identifiable intangible assets | The components of identifiable intangible assets are as follows: June 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) (In millions, except years) Intangible assets: Customer lists and user base $ 590 $ (544 ) $ 46 4 $ 605 $ (542 ) $ 63 4 Marketing related 195 (192 ) 3 2 197 (190 ) 7 2 Developed technologies 222 (196 ) 26 3 245 (206 ) 39 3 All other 245 (177 ) 68 5 245 (143 ) 102 5 Intangible assets, net $ 1,252 $ (1,109 ) $ 143 $ 1,292 $ (1,081 ) $ 211 |
Expected future intangible asset amortization | Expected future intangible asset amortization as of June 30, 2017 was as follows (in millions): Fiscal years: Remaining 2017 $ 45 2018 59 2019 22 2020 17 2021 — $ 143 |
Geographical Information (Table
Geographical Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of net revenues and long-lived assets, by geographical areas | The following tables summarize the allocation of net revenues and long-lived assets based on geography: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (In millions) Net revenues: U.S. $ 1,690 $ 1,407 $ 3,296 $ 2,750 U.K. 334 318 647 625 Other Countries 1,112 925 2,168 1,819 Total net revenues $ 3,136 $ 2,650 $ 6,111 $ 5,194 June 30, December 31, (In millions) Long-lived assets: U.S. $ 1,393 $ 1,391 Other Countries 86 91 Total long-lived assets $ 1,479 $ 1,482 |
Funds Receivable and Customer29
Funds Receivable and Customer Accounts (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of assets underlying our funds receivable and customer accounts | The following table summarizes the assets underlying our funds receivable and customer accounts as of June 30, 2017 and December 31, 2016 . June 30, December 31, (In millions) Cash and cash equivalents $ 4,367 $ 4,319 Government and agency securities 7,140 5,625 Time deposits 707 522 Corporate debt securities 1,573 1,093 Funds receivable 2,391 2,804 Total funds receivable and customer accounts $ 16,178 $ 14,363 |
Estimated fair value of our investments classified as available for sale included within funds receivable and customer accounts | As of June 30, 2017 and December 31, 2016 , the estimated fair value of our investments classified as available-for-sale included within funds receivable and customer accounts was as follows: June 30, 2017 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Government and agency securities $ 6,440 $ — $ (5 ) $ 6,435 Time deposits 707 — — 707 Corporate debt securities 703 — — 703 Total $ 7,850 $ — $ (5 ) $ 7,845 December 31, 2016 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Government and agency securities $ 5,198 $ — $ (2 ) $ 5,196 Time deposits 522 — — 522 Corporate debt securities 531 — — 531 Total $ 6,251 $ — $ (2 ) $ 6,249 |
The estimated fair values of our investments classified as available for sale included within funds receivable and customer accounts by date of contractual maturity | The estimated fair values of our investments classified as available-for-sale included within funds receivable and customer accounts by date of contractual maturity at June 30, 2017 were as follows: June 30, (In millions) One year or less $ 7,633 One year through two years 205 Two years through three years 7 Total $ 7,845 The estimated fair values of our short-term and long-term investments classified as available-for-sale by date of contractual maturity at June 30, 2017 were as follows: June 30, 2017 (In millions) One year or less $ 2,436 One year through two years 1,179 Two years through three years 945 Three years through four years 85 Four years through five years 121 Greater than five years 24 Total (1) $ 4,790 (1) Excludes short-term restricted cash of $76 million . |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Estimated fair value of short and long-term investments classified as available for sale | As of June 30, 2017 and December 31, 2016 , the estimated fair value of our short-term and long-term investments classified as available-for-sale was as follows: June 30, 2017 Gross Gross Gross Estimated (In millions) Short-term investments (1) : Corporate debt securities $ 2,337 $ 1 $ (1 ) $ 2,337 Government and agency securities 40 — — 40 Time deposits 59 — — 59 Long-term investments: Corporate debt securities 2,289 4 (2 ) 2,291 Government and agency securities 63 — — 63 Total (1) $ 4,788 $ 5 $ (3 ) $ 4,790 (1) Excludes short-term restricted cash of $76 million that we intend to use to support our global sabbatical program and a counterparty guarantee . December 31, 2016 Gross Gross Gross Estimated (In millions) Short-term investments (1) : Corporate debt securities $ 2,867 $ 1 $ (1 ) $ 2,867 Government and agency securities 32 — — 32 Time deposits 122 — — 122 Long-term investments: Corporate debt securities 1,473 1 (4 ) 1,470 Government and agency securities 10 — — 10 Total (1) $ 4,504 $ 2 $ (5 ) $ 4,501 (1) Excludes short-term restricted cash of $17 million that we intend to use to support our global sabbatical program. |
Estimated fair values of investments classified as available for sale by date of contractual maturity | The estimated fair values of our investments classified as available-for-sale included within funds receivable and customer accounts by date of contractual maturity at June 30, 2017 were as follows: June 30, (In millions) One year or less $ 7,633 One year through two years 205 Two years through three years 7 Total $ 7,845 The estimated fair values of our short-term and long-term investments classified as available-for-sale by date of contractual maturity at June 30, 2017 were as follows: June 30, 2017 (In millions) One year or less $ 2,436 One year through two years 1,179 Two years through three years 945 Three years through four years 85 Four years through five years 121 Greater than five years 24 Total (1) $ 4,790 (1) Excludes short-term restricted cash of $76 million . |
Fair Value Measurement of Ass31
Fair Value Measurement of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of financial assets and liabilities measured at fair value on a recurring basis | The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 : Balances at Quoted Prices in Significant Other (In millions) Assets: Cash and cash equivalents (1) $ 175 $ — $ 175 Short-term investments: Restricted Cash 76 17 59 Corporate debt securities 2,513 — 2,513 Government and agency securities 172 — 172 Time deposits 59 — 59 Total short-term investments $ 2,820 $ 17 $ 2,803 Funds receivable and customer accounts (2) 9,445 — 9,445 Derivatives 84 — 84 Long-term investments: Corporate debt securities 2,355 — 2,355 Government and agency securities 76 — 76 Total long-term investments 2,431 — 2,431 Total financial assets $ 14,955 $ 17 $ 14,938 Liabilities: Derivatives $ 150 $ — $ 150 (1) Excludes cash of $1.1 billion not subject to fair value measurement. (2) Excludes cash and funds receivable of $6.7 billion underlying funds receivable and customer accounts not subject to fair value measurement. Balances at Quoted Prices in Significant Other (In millions) Assets: Cash and cash equivalents (1) $ 268 $ — $ 268 Short-term investments: Restricted Cash 17 17 — Corporate debt securities 2,882 — 2,882 Government and agency securities 364 — 364 Time deposits 122 — 122 Total short-term investments 3,385 17 3,368 Funds receivable and customer accounts (2) 7,420 — 7,420 Derivatives 223 — 223 Long-term investments: Corporate debt securities 1,479 — 1,479 Government and agency securities 10 — 10 Total long-term investments 1,489 — 1,489 Total financial assets $ 12,785 $ 17 $ 12,768 Liabilities: Derivatives $ 59 $ — $ 59 (1) Excludes cash of $1.3 billion not subject to fair value measurement. (2) Excludes cash and funds receivable of $6.9 billion underlying funds receivable and customer accounts not subject to fair value measurement. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of outstanding derivative instruments | The fair value of our outstanding derivative instruments as of June 30, 2017 and December 31, 2016 was as follows: Balance Sheet Location June 30, December 31, (In millions) Derivative Assets: Foreign exchange contracts designated as cash flow hedges Other current assets $ 19 $ 135 Foreign exchange contracts not designated as hedging instruments Other current assets 65 88 Total derivative assets $ 84 $ 223 Derivative Liabilities: Foreign exchange contracts designated as cash flow hedges Other current liabilities $ 59 $ 4 Foreign exchange contracts not designated as hedging instruments Other current liabilities 91 55 Total derivative liabilities $ 150 $ 59 Net fair value of derivative instruments $ (66 ) $ 164 |
Schedule of cash flow hedges included in accumulated other comprehensive income | The following table summarizes the activity of derivative contracts that qualify for hedge accounting as of June 30, 2017 and December 31, 2016 , and the impact of designated derivative instruments on accumulated other comprehensive income for the six months ended June 30, 2017 and 2016 : December 31, 2016 Amount of gain (loss) recognized in other comprehensive income (effective portion) Less: Amount of gain reclassified from accumulated other comprehensive income to net revenue (effective portion) June 30, 2017 (In millions) Foreign exchange contracts designated as cash flow hedges $ 131 $ (130 ) $ 59 $ (58 ) December 31, 2015 Amount of gain recognized in other comprehensive income (effective portion) Less: Amount of gain reclassified from accumulated other comprehensive income to net revenue (effective portion) June 30, 2016 (In millions) Foreign exchange contracts designated as cash flow hedges $ 57 $ 84 $ 41 $ 100 |
Recognized gains or losses related to derivative instruments | The following table provides the location in the financial statements of the recognized gains or losses related to our derivative instruments: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (In millions) Foreign exchange contracts designated as cash flow hedges recognized in net revenues $ 19 $ 9 $ 59 $ 41 Foreign exchange contracts not designated as cash flow hedges recognized in other income (expense), net (15 ) 26 (55 ) 17 Total gain recognized from derivative contracts in the statement of income $ 4 $ 35 $ 4 $ 58 |
Schedule of notional amounts of outstanding derivatives | The following table provides the notional amounts of our outstanding derivatives: June 30, 2017 June 30, 2016 (In millions) Foreign exchange contracts designated as cash flow hedges $ 1,857 $ 1,861 Foreign exchange contracts not designated as hedging instruments 4,912 5,183 Total $ 6,769 $ 7,044 |
Loans and Interest Receivable33
Loans and Interest Receivable, Net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Principal amount of loans and interest receivable segmented by a FICO score range | The following table presents the principal amount of U.S. consumer loans and interest receivable segmented by a FICO score range: June 30, 2017 December 31, 2016 (In millions) > 760 $ 689 $ 665 680 - 759 2,077 1,938 600 - 679 1,951 1,840 < 599 591 553 Total $ 5,308 $ 4,996 The following table presents the principal amount of PayPal Working Capital advances and fees receivable segmented by our internal PRM score range: June 30, 2017 December 31, 2016 (In millions) > 610 $ 445 $ 378 526-609 108 108 <525 80 72 Total $ 633 $ 558 |
Delinquency status of the principal amount of loans and interest receivable | The following tables present the delinquency status of the principal amount of consumer loans and interest receivable. The amounts shown below are based on the number of days past the billing date to the consumer. Current represents balances that are within 30 days of the billing date: June 30, 2017 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 4,982 $ 207 $ 87 $ 204 $ 498 $ 5,480 December 31, 2016 (In millions) Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 - 180 Days Past Due Total Past Due Total $ 4,601 $ 219 $ 82 $ 211 $ 512 $ 5,113 The following tables present our estimate of the principal amount of PayPal Working Capital advances and fees receivable past their original expected repayment period. June 30, 2017 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 536 $ 33 $ 20 $ 31 $ 13 $ 97 $ 633 December 31, 2016 (In millions) Within Original Expected Repayment Period 30 - 59 Days Greater 60 - 89 Days Greater 90 - 180 Days Greater 180+ Days Total Past Original Expected Repayment Period Total $ 462 $ 35 $ 19 $ 30 $ 12 $ 96 $ 558 |
Allowance for loans and interest receivable, net of participating interest sold | The following table summarizes the activity in the allowance for consumer loans and interest receivable, net of participation interest sold for the six months ended June 30, 2017 and 2016 : June 30, 2017 June 30, 2016 Consumer Loans Receivable Interest Receivable Total Allowance Consumer Loans Receivable Interest Receivable Total Allowance (In millions) Beginning Balance $ 265 $ 40 $ 305 $ 179 $ 32 $ 211 Provisions 229 63 292 179 49 228 Charge-offs (209 ) (63 ) (272 ) (157 ) (51 ) (208 ) Recoveries 18 — 18 18 — 18 Ending Balance $ 303 $ 40 $ 343 $ 219 $ 30 $ 249 The following table summarizes the activity in the allowance for PayPal Working Capital advances and fees receivable, for the six months ended June 30, 2017 and 2016 : June 30, 2017 June 30, 2016 PayPal Working Capital Advances Fees Receivable Total Allowance PayPal Working Capital Advances Fees Receivable Total Allowance (In millions) Beginning Balance $ 28 $ 3 $ 31 $ 19 $ 3 $ 22 Provisions 23 4 27 17 1 18 Charge-offs (21 ) (3 ) (24 ) (14 ) (2 ) (16 ) Recoveries 3 — 3 2 — 2 Ending Balance $ 33 $ 4 $ 37 $ 24 $ 2 $ 26 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Management's estimate of the maximum potential exposure related to protection programs | The following table provides management's estimate of the maximum potential exposure related to our protection programs as of June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 (In millions) Maximum potential exposure $ 139,479 $ 131,739 The following table provides the amount of allowance for transaction losses related to our protection programs as of June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 (In millions) Allowance for transaction losses $ 223 $ 222 |
Stock Repurchase Programs (Tabl
Stock Repurchase Programs (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Summary of stock repurchase activity | The stock repurchase activity under the January 2016 stock repurchase program during the six months ended June 30, 2017 is summarized as follows: Shares Repurchased Average Price (1) Value of Shares Repurchased Remaining Amount Authorized (In millions, except per share amounts) Balance as of January 2017 $ 1,005 Repurchases of shares of common stock for the three months ended March 31, 2017 12.2 $ 42.38 517 (517 ) Repurchases of shares of common stock for the three months ended June 30, 2017 1.8 $ 49.41 89 (89 ) Balance as of June 30, 2017 14.0 $ 606 $ 399 (1) Average price paid per share includes broker commissions. |
Stock-Based Plans (Tables)
Stock-Based Plans (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of restricted stock units | The following table summarizes the RSU and PBRSU activity under our equity incentive plans for the six months ended June 30, 2017 : Units (In thousands) Outstanding at January 1, 2017 29,185 Awarded 17,996 Vested (8,791 ) Forfeited (2,142 ) Outstanding at June 30, 2017 36,248 Expected to vest 31,112 |
Schedule of stock-based compensation expense | The impact on our results of operations of recording stock-based compensation expense under our equity incentive plans for the three and six months ended June 30, 2017 and 2016 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (In millions) Customer support and operations $ 34 $ 22 $ 64 $ 40 Sales and marketing 33 22 61 38 Product development 59 35 104 68 General and administrative 51 33 93 60 Depreciation and amortization 3 1 5 2 Total stock-based compensation expense $ 180 $ 113 $ 327 $ 208 Capitalized as part of internal use software and website development costs $ 7 $ 4 $ 10 $ 6 |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and related costs | The following table summarizes the restructuring costs recognized during the three and six months ended June 30, 2017: Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 (In millions) Employee severance and benefits $ — $ 40 Total $ — $ 40 |
Schedule of restructuring reserve activity by type of cost | The following table summarizes the restructuring reserve activity during the six months ended June 30, 2017 : Employee Severance and Benefits (In millions) Accrued liability as of January 1, 2017 $ — Charges 40 Payments (13 ) Accrued liability as of June 30, 2017 $ 27 |
Accumulated Other Comprehensi38
Accumulated Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income | The following table summarizes the changes in accumulated balances of other comprehensive income for the three months ended June 30, 2017 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Currency Translation Estimated tax (expense) benefit Total (In millions) Beginning balance $ 59 $ (4 ) $ (55 ) $ 2 $ 2 Other comprehensive income (loss) before reclassifications (98 ) — 16 1 (81 ) Less: Amount of gain reclassified from accumulated other comprehensive income 19 — — — 19 Net current period other comprehensive income (loss) (117 ) — 16 1 (100 ) Ending balance $ (58 ) $ (4 ) $ (39 ) $ 3 $ (98 ) The following table summarizes the changes in accumulated balances of other comprehensive income for the three months ended June 30, 2016 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Estimated tax (expense) benefit Total (In millions) Beginning balance $ 21 $ (4 ) $ (45 ) $ 1 $ (27 ) Other comprehensive income (loss) before reclassifications 88 9 (5 ) (4 ) 88 Less: Amount of gain reclassified from accumulated other comprehensive income 9 — — — 9 Net current period other comprehensive income (loss) 79 9 (5 ) (4 ) 79 Ending balance $ 100 $ 5 $ (50 ) $ (3 ) $ 52 The following table summarizes the changes in accumulated balances of other comprehensive income for the six months ended June 30, 2017 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Currency Translation Estimated tax (expense) benefit Total (In millions) Beginning balance $ 131 $ (5 ) $ (68 ) $ 1 $ 59 Other comprehensive income (loss) before reclassifications (130 ) — 29 2 (99 ) Less: Amount of gain (loss) reclassified from accumulated other comprehensive income 59 (1 ) — — 58 Net current period other comprehensive income (loss) (189 ) 1 29 2 (157 ) Ending balance $ (58 ) $ (4 ) $ (39 ) $ 3 $ (98 ) The following table summarizes the changes in accumulated balances of other comprehensive income for the six months ended June 30, 2016 : Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Investments Foreign Estimated tax (expense) benefit Total (In millions) Beginning balance $ 57 $ (16 ) $ (53 ) $ 3 $ (9 ) Other comprehensive income (loss) before reclassifications 84 18 3 (6 ) 99 Less: Amount of gain (loss) reclassified from accumulated other comprehensive income 41 (3 ) — — 38 Net current period other comprehensive income (loss) 43 21 3 (6 ) 61 Ending balance $ 100 $ 5 $ (50 ) $ (3 ) $ 52 |
Reclassifications out of accumulated other comprehensive income | The following table provides details about reclassifications out of accumulated other comprehensive income for the three months ended June 30, 2017 and 2016 : Details about Accumulated Other Comprehensive Income Components Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement of Income Three Months Ended June 30, 2017 2016 (In millions) Gains on cash flow hedges-foreign exchange contracts $ 19 $ 9 Net revenues Unrealized losses on investments — — Other income (expense), net $ 19 $ 9 Income before income taxes — — Income tax expense Total reclassifications for the period $ 19 $ 9 Net income The following table provides details about reclassifications out of accumulated other comprehensive income for the six months ended June 30, 2017 and 2016 : Details about Accumulated Other Comprehensive Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement of Income Six Months Ended June 30, 2017 2016 (In millions) Gains on cash flow hedges-foreign exchange contracts $ 59 $ 41 Net revenues Unrealized losses on investments (1 ) (3 ) Other income (expense), net $ 58 $ 38 Income before income taxes — — Income tax expense Total reclassifications for the period $ 58 $ 38 Net income |
Overview and Summary of Signi39
Overview and Summary of Significant Accounting Policies - (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2017 | Jan. 01, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Effective income tax rate reconciliation, share-based compensation, cxcess tax benefit, amount | $ 20 | $ 24 | ||
Decrease in retained earnings | (2,824) | (2,824) | $ (2,069) | |
Accounting Standards Update 2016-16 | New Accounting Pronouncement, Early Adoption, Effect | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Decrease in retained earnings | $ 41 | |||
Decrease in prepaid taxes | $ 41 | |||
Amortization of prepaid taxes not recognized | $ 4 | $ 8 |
Net Income Per Share - Computat
Net Income Per Share - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Numerator: | ||||
Net income | $ 411 | $ 323 | $ 795 | $ 688 |
Denominator: | ||||
Weighted average shares of common stock - basic (in shares) | 1,202 | 1,210 | 1,203 | 1,213 |
Dilutive effect of equity incentive awards (in shares) | 13 | 5 | 13 | 7 |
Weighted average shares of common stock - diluted (in shares) | 1,215 | 1,215 | 1,216 | 1,220 |
Net income per share: | ||||
Basic (in usd per share) | $ 0.34 | $ 0.27 | $ 0.66 | $ 0.57 |
Diluted (in usd per share) | $ 0.34 | $ 0.27 | $ 0.65 | $ 0.56 |
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive (in shares) | 0 | 11 | 3 | 8 |
Business Combinations (Details)
Business Combinations (Details) - business | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Business Combinations [Abstract] | |||
Number of businesses acquired | 0 | 0 | 0 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets - Goodwill Balances and Adjustments (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Total Goodwill | |
December 31, 2016 | $ 4,059 |
Goodwill Acquired | 0 |
Adjustments | 3 |
June 30, 2017 | $ 4,062 |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets - Components of Identifiable Intangible Assets (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,252 | $ 1,292 |
Accumulated Amortization | (1,109) | (1,081) |
Net Carrying Amount | 143 | 211 |
Customer lists and user base | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 590 | 605 |
Accumulated Amortization | (544) | (542) |
Net Carrying Amount | $ 46 | $ 63 |
Weighted Average Useful Life | 4 years | 4 years |
Marketing related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 195 | $ 197 |
Accumulated Amortization | (192) | (190) |
Net Carrying Amount | $ 3 | $ 7 |
Weighted Average Useful Life | 2 years | 2 years |
Developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 222 | $ 245 |
Accumulated Amortization | (196) | (206) |
Net Carrying Amount | $ 26 | $ 39 |
Weighted Average Useful Life | 3 years | 3 years |
All other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 245 | $ 245 |
Accumulated Amortization | (177) | (143) |
Net Carrying Amount | $ 68 | $ 102 |
Weighted Average Useful Life | 5 years | 5 years |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense for intangible assets | $ 41 | $ 39 | $ 68 | $ 77 |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets - Expected Future Intangible Asset Amortization (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Fiscal years: | ||
Remaining 2,017 | $ 45 | |
2,018 | 59 | |
2,019 | 22 | |
2,020 | 17 | |
2,021 | 0 | |
Net Carrying Amount | $ 143 | $ 211 |
Geographical Information (Detai
Geographical Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net revenues | $ 3,136 | $ 2,650 | $ 6,111 | $ 5,194 | |
Long-lived assets | 1,479 | 1,479 | $ 1,482 | ||
U.S. | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net revenues | 1,690 | 1,407 | 3,296 | 2,750 | |
Long-lived assets | 1,393 | 1,393 | 1,391 | ||
U.K. | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net revenues | 334 | 318 | 647 | 625 | |
Other Countries | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net revenues | 1,112 | $ 925 | 2,168 | $ 1,819 | |
Other Countries | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived assets | $ 86 | $ 86 | $ 91 |
Funds Receivable and Customer47
Funds Receivable and Customer Accounts - Assets Underlying Funds Receivable and Customer Accounts (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Investment [Line Items] | ||
Total funds receivable and customer accounts | $ 16,178 | $ 14,363 |
Cash and cash equivalents | ||
Investment [Line Items] | ||
Total funds receivable and customer accounts | 4,367 | 4,319 |
Government and agency securities | ||
Investment [Line Items] | ||
Total funds receivable and customer accounts | 7,140 | 5,625 |
Time deposits | ||
Investment [Line Items] | ||
Total funds receivable and customer accounts | 707 | 522 |
Corporate debt securities | ||
Investment [Line Items] | ||
Total funds receivable and customer accounts | 1,573 | 1,093 |
Funds receivable | ||
Investment [Line Items] | ||
Total funds receivable and customer accounts | $ 2,391 | $ 2,804 |
Funds Receivable and Customer48
Funds Receivable and Customer Accounts - Estimated Fair Value of Investments Classified as Available for Sale (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | $ 4,788 | $ 4,504 |
Gross Unrealized Gains | 5 | 2 |
Gross Unrealized Losses | (3) | (5) |
Estimated Fair Value | 4,790 | 4,501 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses | (2,300) | |
Funds Receivable and Customer Accounts | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 7,850 | 6,251 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (5) | (2) |
Estimated Fair Value | 7,845 | 6,249 |
Funds Receivable and Customer Accounts | Government and agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 6,440 | 5,198 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (5) | (2) |
Estimated Fair Value | 6,435 | 5,196 |
Funds Receivable and Customer Accounts | Time deposits | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 707 | 522 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 707 | 522 |
Funds Receivable and Customer Accounts | Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 703 | 531 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 703 | $ 531 |
Funds Receivable and Customer49
Funds Receivable and Customer Accounts - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Total funds receivable and customer accounts | $ 16,178 | $ 16,178 | $ 14,363 | ||
Funds Receivable and Customer Accounts | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Aggregate fair value of investments in an unrealized loss position | 6,400 | 6,400 | |||
Fair Value Option, Foreign Currency Denominated Investments | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Total funds receivable and customer accounts | 1,600 | 1,600 | $ 1,000 | ||
Fair Value Option, Foreign Currency Denominated Investments | Funds Receivable and Customer Accounts | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Net gain (loss) from fair value changes | $ 90 | $ (18) | $ 105 | $ (7) |
Funds Receivable and Customer50
Funds Receivable and Customer Accounts - Estimated Fair Values of Investments Classified as Available for Sale by Contractual Maturity (Details) $ in Millions | Jun. 30, 2017USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |
One year or less | $ 2,436 |
One year through two years | 1,179 |
Total | 4,790 |
Funds Receivable and Customer Accounts | |
Schedule of Available-for-sale Securities [Line Items] | |
One year or less | 7,633 |
One year through two years | 205 |
Available-For-Sale Securities, Debt Maturities, Years Two Through Three, Fair Value | 7 |
Total | $ 7,845 |
Investments - Estimated Fair Va
Investments - Estimated Fair Values of Investments Classified as Available for Sale (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | $ 4,788 | $ 4,504 |
Gross Unrealized Gains | 5 | 2 |
Gross Unrealized Losses | (3) | (5) |
Estimated Fair Value | 4,790 | 4,501 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses | (2,300) | |
Short-term investments | Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 2,337 | 2,867 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (1) | (1) |
Estimated Fair Value | 2,337 | 2,867 |
Short-term investments | Government and agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 40 | 32 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 40 | 32 |
Short-term investments | Time deposits | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 59 | 122 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 59 | 122 |
Long-term investments | Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 2,289 | 1,473 |
Gross Unrealized Gains | 4 | 1 |
Gross Unrealized Losses | (2) | (4) |
Estimated Fair Value | 2,291 | 1,470 |
Long-term investments | Government and agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Amortized Cost | 63 | 10 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 63 | $ 10 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Short-term restricted cash | $ 76 | $ 76 | $ 17 |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Estimated fair value | 4,790 | 4,790 | 4,501 |
Available-for-sale securities, accumulated gross unrealized loss | 3 | 3 | 5 |
Cost method investments | 80 | 80 | 50 |
Corporate debt securities | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Available-for-sale securities, accumulated gross unrealized loss | 2,300 | 2,300 | |
Fair Value Option, Foreign Currency Denominated Investments | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Estimated fair value | 385 | 385 | $ 356 |
Fair Value Option, Foreign Currency Denominated Investments | Other Income (Expense) | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Net gains from fair value changes | $ 19 | $ 25 |
Investments - Estimated Fair 53
Investments - Estimated Fair Values of Investments Classified as Available for Sale by Date of Contractual Maturity (Details) $ in Millions | Jun. 30, 2017USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
One year or less | $ 2,436 |
One year through two years | 1,179 |
Two years through three years | 945 |
Three years through four years | 85 |
Four years through five years | 121 |
Greater than five years | 24 |
Total | $ 4,790 |
Fair Value Measurement of Ass54
Fair Value Measurement of Assets and Liabilities - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Funds receivable and customer accounts | $ 16,178 | $ 14,363 |
Derivatives | 27 | |
Liabilities: | ||
Derivatives | 93 | |
Cash | 1,100 | 1,300 |
Corporate debt securities | ||
Assets: | ||
Funds receivable and customer accounts | 1,573 | 1,093 |
Government and agency securities | ||
Assets: | ||
Funds receivable and customer accounts | 7,140 | 5,625 |
Time deposits | ||
Assets: | ||
Funds receivable and customer accounts | 707 | 522 |
Cash and funds receivable | ||
Assets: | ||
Funds receivable and customer accounts | 6,700 | 6,900 |
Fair value, measurements, recurring basis | ||
Assets: | ||
Cash and cash equivalents | 175 | 268 |
Funds receivable and customer accounts | 9,445 | 7,420 |
Derivatives | 84 | 223 |
Total financial assets | 14,955 | 12,785 |
Liabilities: | ||
Derivatives | 150 | 59 |
Fair value, measurements, recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Funds receivable and customer accounts | 0 | 0 |
Derivatives | 0 | 0 |
Total financial assets | 17 | 17 |
Liabilities: | ||
Derivatives | 0 | 0 |
Fair value, measurements, recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash and cash equivalents | 175 | 268 |
Funds receivable and customer accounts | 9,445 | 7,420 |
Derivatives | 84 | 223 |
Total financial assets | 14,938 | 12,768 |
Liabilities: | ||
Derivatives | 150 | 59 |
Fair value, measurements, recurring basis | Short-term investments | ||
Assets: | ||
Investments | 2,820 | 3,385 |
Fair value, measurements, recurring basis | Short-term investments | Restricted cash | ||
Assets: | ||
Investments | 76 | 17 |
Fair value, measurements, recurring basis | Short-term investments | Corporate debt securities | ||
Assets: | ||
Investments | 2,513 | 2,882 |
Fair value, measurements, recurring basis | Short-term investments | Government and agency securities | ||
Assets: | ||
Investments | 172 | 364 |
Fair value, measurements, recurring basis | Short-term investments | Time deposits | ||
Assets: | ||
Investments | 59 | 122 |
Fair value, measurements, recurring basis | Short-term investments | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Investments | 17 | 17 |
Fair value, measurements, recurring basis | Short-term investments | Quoted Prices in Active Markets for Identical Assets (Level 1) | Restricted cash | ||
Assets: | ||
Investments | 17 | 17 |
Fair value, measurements, recurring basis | Short-term investments | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate debt securities | ||
Assets: | ||
Investments | 0 | 0 |
Fair value, measurements, recurring basis | Short-term investments | Quoted Prices in Active Markets for Identical Assets (Level 1) | Government and agency securities | ||
Assets: | ||
Investments | 0 | |
Fair value, measurements, recurring basis | Short-term investments | Quoted Prices in Active Markets for Identical Assets (Level 1) | Time deposits | ||
Assets: | ||
Investments | 0 | 0 |
Fair value, measurements, recurring basis | Short-term investments | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Investments | 2,803 | 3,368 |
Fair value, measurements, recurring basis | Short-term investments | Significant Other Observable Inputs (Level 2) | Restricted cash | ||
Assets: | ||
Investments | 59 | 0 |
Fair value, measurements, recurring basis | Short-term investments | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Assets: | ||
Investments | 2,513 | 2,882 |
Fair value, measurements, recurring basis | Short-term investments | Significant Other Observable Inputs (Level 2) | Government and agency securities | ||
Assets: | ||
Investments | 172 | 364 |
Fair value, measurements, recurring basis | Short-term investments | Significant Other Observable Inputs (Level 2) | Time deposits | ||
Assets: | ||
Investments | 59 | 122 |
Fair value, measurements, recurring basis | Long-term investments | ||
Assets: | ||
Investments | 2,431 | 1,489 |
Fair value, measurements, recurring basis | Long-term investments | Corporate debt securities | ||
Assets: | ||
Investments | 2,355 | 1,479 |
Fair value, measurements, recurring basis | Long-term investments | Government and agency securities | ||
Assets: | ||
Investments | 76 | 10 |
Fair value, measurements, recurring basis | Long-term investments | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Investments | 0 | 0 |
Fair value, measurements, recurring basis | Long-term investments | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate debt securities | ||
Assets: | ||
Investments | 0 | 0 |
Fair value, measurements, recurring basis | Long-term investments | Quoted Prices in Active Markets for Identical Assets (Level 1) | Government and agency securities | ||
Assets: | ||
Investments | 0 | 0 |
Fair value, measurements, recurring basis | Long-term investments | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Investments | 2,431 | 1,489 |
Fair value, measurements, recurring basis | Long-term investments | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Assets: | ||
Investments | 2,355 | 1,479 |
Fair value, measurements, recurring basis | Long-term investments | Significant Other Observable Inputs (Level 2) | Government and agency securities | ||
Assets: | ||
Investments | $ 76 | $ 10 |
Fair Value Measurement of Ass55
Fair Value Measurement of Assets and Liabilities - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative instruments, duration | 1 month |
Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative instruments, duration | 1 year |
Maximum | Designated as Hedging Instrument | Cash Flow Hedging | Foreign Exchange Contract | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative instruments, duration | 18 months |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Foreign Exchange Contracts | |
Maximum maturity of foreign currency exchange contracts | 18 months |
Net derivative gains (losses) related to cash flow hedges to be reclassified into earnings within the next 12 months | $ (49) |
Fair Value of Derivative Contracts | |
Derivative asset, offset | 57 |
Derivative liability, offset | 57 |
Net derivative assets | 27 |
Net derivative liabilities | $ 93 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Outstanding Derivative Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 84 | $ 223 |
Derivative liabilities | 150 | 59 |
Net fair value of derivative instruments | (66) | 164 |
Foreign Exchange Contract | Designated as Hedging Instrument | Other current assets | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 19 | 135 |
Foreign Exchange Contract | Designated as Hedging Instrument | Other current liabilities | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 59 | 4 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 65 | 88 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 91 | $ 55 |
Derivative Instruments - Cash F
Derivative Instruments - Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Details) - Foreign Exchange Contract - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Impact of Designated Derivative Instruments on Accumulated Other Comprehensive Income | ||
Foreign exchange contracts designated as cash flow hedges, beginning balance | $ 131 | $ 57 |
Amount of gain (loss) recognized in other comprehensive income (effective portion) | (130) | 84 |
Less: Amount of gain reclassified from accumulated other comprehensive income to net revenue (effective portion) | 59 | 41 |
Foreign exchange contracts designated as cash flow hedges, ending balance | $ (58) | $ 100 |
Derivative Instruments - Recogn
Derivative Instruments - Recognized Gains or Losses Related to Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain recognized from derivative contracts in the statement of income | $ 4 | $ 35 | $ 4 | $ 58 |
Foreign Exchange Contract | Net Revenues | Designated as Hedging Instrument | Cash Flow Hedging | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain recognized from derivative contracts in the statement of income | 19 | 9 | 59 | 41 |
Foreign Exchange Contract | Other Income (Expense) | Not Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain recognized from derivative contracts in the statement of income | $ (15) | $ 26 | $ (55) | $ 17 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Notional Amounts of Outstanding Derivatives (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
Derivatives, Fair Value [Line Items] | ||
Notional amounts | $ 6,769 | $ 7,044 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional amounts | 4,912 | 5,183 |
Foreign Exchange Contract | Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional amounts | $ 1,857 | $ 1,861 |
Loans and Interest Receivable61
Loans and Interest Receivable, Net - Additional Information (Details) $ in Millions | 6 Months Ended | |||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Financing Receivable, Recorded Investment [Line Items] | ||||
Purchased consumer receivables | $ 4,500 | $ 3,900 | ||
Expected period of repayment | 180 days | |||
Threshold period, write-off of receivables, nonpayment | 60 days | |||
Threshold period two, write-off of receivables | 360 days | |||
Consumer Receivables | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Loan and interest receivables | $ 5,480 | $ 5,113 | ||
Participation interest sold, value | $ 1,000 | $ 1,000 | ||
Weighted average FICO score | 679 | 682 | ||
Credit score, prime (greater than) | 680 | 680 | ||
Percentage of loans and interest receivable, FICO score below 599 | 11.10% | 11.10% | ||
Credit score (below) | 599 | 599 | ||
Percentage of loans and interest receivable, current | 90.90% | 90.00% | ||
Threshold period, write-off of receivables | 180 days | |||
Threshold period, write-off of bankrupt accounts | 60 days | |||
Loan and interest receivables, allowance | $ 343 | 249 | $ 305 | $ 211 |
Consumer Receivables | Other Consumer Credit Products | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Loan and interest receivables | 24 | 16 | ||
Loan and interest receivables, allowance | 5 | 3 | ||
Consumer Receivables | Non-US | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Loan and interest receivables | $ 172 | $ 117 | ||
Consumer Receivables | Greater than 680 | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Percentage of loans and interest receivable, prime | 52.10% | 52.10% | ||
Merchant Receivables | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Loan and interest receivables | $ 633 | $ 558 | ||
Credit score, prime (greater than) | 610 | |||
Loan and interest receivables, allowance | $ 37 | $ 26 | $ 31 | $ 22 |
Requirement for assigned merchant credit score (greater than) | 525 | |||
Merchant Receivables | Prime | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Weighted average internal credit assessment score | 631 | 625 | ||
Merchant Receivables | Minimum | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Assigned merchant credit score | 350 | |||
Required percentage of original loan payments every 90 Days | 10.00% | |||
Expected period of repayment | 9 months | |||
Merchant Receivables | Maximum | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Assigned merchant credit score | 750 | |||
Expected period of repayment | 12 months |
Loans and Interest Receivable62
Loans and Interest Receivable, Net - Loans and Interest Receivables by FICO Score (Details) - Consumer Receivables - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer loans and interest receivable | $ 5,308 | $ 4,996 |
Greater than 760 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer loans and interest receivable | 689 | 665 |
680 - 759 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer loans and interest receivable | 2,077 | 1,938 |
600 - 679 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer loans and interest receivable | 1,951 | 1,840 |
Less Than 599 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer loans and interest receivable | $ 591 | $ 553 |
Loans and Interest Receivable63
Loans and Interest Receivable, Net - Paypal Working Capital Advances and Fees Receivable by Internal PRM Score (Details) - Merchant Receivables - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment [Line Items] | ||
Advances and fees receivable | $ 633 | $ 558 |
PRM Score, greater than 610 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Advances and fees receivable | 445 | 378 |
PRM Score, 526 to 609 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Advances and fees receivable | 108 | 108 |
PRM Score, less than 525 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Advances and fees receivable | $ 80 | $ 72 |
Loans and Interest Receivable64
Loans and Interest Receivable, Net - Delinquency Status of the Principal Amount of Loans and Interest Receivables (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Consumer Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | $ 4,982 | $ 4,601 |
Past due | 498 | 512 |
Total receivables | 5,480 | 5,113 |
Consumer Receivables | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due | 207 | 219 |
Consumer Receivables | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due | 87 | 82 |
Consumer Receivables | 90 - 180 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due | 204 | 211 |
Merchant Receivables | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 536 | 462 |
Past due | 97 | 96 |
Total receivables | 633 | 558 |
Merchant Receivables | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due | 33 | 35 |
Merchant Receivables | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due | 20 | 19 |
Merchant Receivables | 90 - 180 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due | 31 | 30 |
Merchant Receivables | 180 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due | $ 13 | $ 12 |
Loans and Interest Receivable65
Loans and Interest Receivable, Net - Allowance for Loans and Interest Receivable (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Consumer Receivables | ||
Allowance for loans and interest receivable | ||
Beginning Balance | $ 305 | $ 211 |
Provisions | 292 | 228 |
Charge-offs | (272) | (208) |
Recoveries | 18 | 18 |
Ending Balance | 343 | 249 |
Consumer Receivables | Loans Receivable | ||
Allowance for loans and interest receivable | ||
Beginning Balance | 265 | 179 |
Provisions | 229 | 179 |
Charge-offs | (209) | (157) |
Recoveries | 18 | 18 |
Ending Balance | 303 | 219 |
Consumer Receivables | Interest And Fees Receivable | ||
Allowance for loans and interest receivable | ||
Beginning Balance | 40 | 32 |
Provisions | 63 | 49 |
Charge-offs | (63) | (51) |
Recoveries | 0 | 0 |
Ending Balance | 40 | 30 |
Merchant Receivables | ||
Allowance for loans and interest receivable | ||
Beginning Balance | 31 | 22 |
Provisions | 27 | 18 |
Charge-offs | (24) | (16) |
Recoveries | 3 | 2 |
Ending Balance | 37 | 26 |
Merchant Receivables | Loans Receivable | ||
Allowance for loans and interest receivable | ||
Beginning Balance | 28 | 19 |
Provisions | 23 | 17 |
Charge-offs | (21) | (14) |
Recoveries | 3 | 2 |
Ending Balance | 33 | 24 |
Merchant Receivables | Interest And Fees Receivable | ||
Allowance for loans and interest receivable | ||
Beginning Balance | 3 | 3 |
Provisions | 4 | 1 |
Charge-offs | (3) | (2) |
Recoveries | 0 | 0 |
Ending Balance | $ 4 | $ 2 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Billions | Jun. 30, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Unused credit available to accountholders | $ 28.7 | $ 28.8 |
Commitments and Contingencies67
Commitments and Contingencies - Credit Agreement (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2015 | Jun. 30, 2017 | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 2,000,000,000 | |
Credit facility, term | 5 years | |
Accordion feature, increase in maximum borrowing capacity (up to) | $ 500,000,000 | |
Borrowings outstanding | $ 0 | |
Available borrowing capacity | $ 2,000,000,000 | |
Letter of Credit Sub-Facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | 150,000,000 | |
Swingline Sub-Facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 150,000,000 |
Commitments and Contingencies68
Commitments and Contingencies - Estimate of the Maximum Potential Exposure and Allowance for Transaction Losses Related to Protection Products (Details) - Protection Programs - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Loss Contingencies [Line Items] | ||
Allowance for transaction losses | $ 223 | $ 222 |
Maximum | ||
Loss Contingencies [Line Items] | ||
Maximum potential exposure | $ 139,479 | $ 131,739 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Related Party Transactions [Abstract] | ||
Accounts payable to related parties | $ 0 | $ 0 |
Accounts receivable from related parties | $ 0 | $ 0 |
Stock Repurchase Programs (Deta
Stock Repurchase Programs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Apr. 30, 2017 | Jan. 31, 2016 | |
Equity [Abstract] | ||||||
Stock repurchase program, maximum authorized amount | $ 5,000,000,000 | $ 2,000,000,000 | ||||
Repurchases of shares of common stock, Shares Repurchased (in shares) | 1,800,000 | 12,200,000 | 14,000,000 | |||
Average Price per Share (in usd per share) | $ 49.41 | $ 42.38 | ||||
Repurchases of shares of common stock, Value of Shares Repurchased | $ 89,000,000 | $ 517,000,000 | $ 606,000,000 | |||
Remaining Amount Authorized | ||||||
Beginning balance | 1,005,000,000 | 1,005,000,000 | ||||
Repurchases of shares of common stock | (89,000,000) | $ (517,000,000) | (606,000,000) | $ (896,000,000) | ||
Ending balance | $ 399,000,000 | $ 399,000,000 | ||||
Treasury stock, retired (in shares) | 0 |
Stock-Based Plans - Additional
Stock-Based Plans - Additional Information (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017shares | Jun. 30, 2017$ / sharesshares | |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Outstanding (in shares) | 3,000,000 | 3,000,000 |
Granted (in shares) | 0 | |
Restricted Stock Units (RSUs) And Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Weighted average grant-date fair value of restricted stock units granted in period (in usd per share) | $ / shares | $ 42.39 | |
Granted (in shares) | 17,996,000 | |
Restricted Stock Units (RSUs) | One-year performance period | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Award requisite service period | 3 years | |
Performance Shares | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Issuance percentage of target amount | 0.00% | 0.00% |
Performance Shares | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Issuance percentage of target amount | 200.00% | 200.00% |
Performance Shares | One-year performance period | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Award requisite service period | 1 year | |
Granted (in shares) | 2,800,000 | |
Performance Shares | Three-year performance period | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Award requisite service period | 3 years | |
Granted (in shares) | 1,300,000 |
Stock-Based Plans - Summary of
Stock-Based Plans - Summary of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) And Performance Shares shares in Thousands | 6 Months Ended |
Jun. 30, 2017shares | |
Restricted stock units, shares | |
Outstanding balance, beginning of period (in shares) | 29,185 |
Awarded (in shares) | 17,996 |
Vested (in shares) | (8,791) |
Forfeited (in shares) | (2,142) |
Outstanding balance, end of period (in shares) | 36,248 |
Expected to vest at the end of period (in shares) | 31,112 |
Stock-Based Plans - Schedule of
Stock-Based Plans - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 180 | $ 113 | $ 327 | $ 208 |
Capitalized as part of internal use software and website development costs | 7 | 4 | 10 | 6 |
Customer support and operations | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 34 | 22 | 64 | 40 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 33 | 22 | 61 | 38 |
Product development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 59 | 35 | 104 | 68 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 51 | 33 | 93 | 60 |
Depreciation and amortization | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 3 | $ 1 | $ 5 | $ 2 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate, percentage | 8.00% | 10.00% |
U.S. Federal statutory income tax rate, percentage | 35.00% | 35.00% |
Restructuring - Restructuring C
Restructuring - Restructuring Costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | $ 0 | $ 0 | $ 40,000,000 | $ 0 | |
Employee Severance and Benefits | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | $ 0 | $ 40,000,000 | $ 0 | $ 40,000,000 | $ 0 |
Restructuring - Restructuring R
Restructuring - Restructuring Reserve Activity (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Restructuring Reserve | |||||
Charges | $ 0 | $ 0 | $ 40,000,000 | $ 0 | |
Employee Severance and Benefits | |||||
Restructuring Reserve | |||||
Accrued liability, beginning of period | $ 0 | 0 | |||
Charges | 0 | $ 40,000,000 | $ 0 | 40,000,000 | $ 0 |
Payments | (13,000,000) | ||||
Accrued liability, end of period | $ 27,000,000 | $ 27,000,000 |
Accumulated Other Comprehensi77
Accumulated Other Comprehensive (Loss) Income - Summary of Changes in Accumulated Other Comprehensive Income Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Balances of Other Comprehensive Income, Tax | ||||
AOCI tax, beginning balance | $ 2 | $ 1 | $ 1 | $ 3 |
Other comprehensive income (loss) before reclassifications, tax | 1 | (4) | 2 | (6) |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, tax | 0 | 0 | 0 | 0 |
Net current period other comprehensive income (loss), tax | 1 | (4) | 2 | (6) |
AOCI tax, ending balance | 3 | (3) | 3 | (3) |
Accumulated Balances of Other Comprehensive Income, Net of Tax | ||||
AOCI, net of tax, beginning balance | 14,712 | |||
Other comprehensive income (loss) before reclassifications, net of tax | 88 | 99 | ||
Less: Amount of gain reclassified from accumulated other comprehensive income, net of tax | 9 | 38 | ||
Other comprehensive income (loss), net of tax | (100) | 79 | (157) | 61 |
AOCI, net of tax, ending balance | 14,998 | 14,998 | ||
AOCI Attributable to Parent | ||||
Accumulated Balances of Other Comprehensive Income, Net of Tax | ||||
AOCI, net of tax, beginning balance | 2 | (27) | 59 | (9) |
Other comprehensive income (loss) before reclassifications, net of tax | (81) | (99) | ||
Less: Amount of gain reclassified from accumulated other comprehensive income, net of tax | 19 | 58 | ||
Other comprehensive income (loss), net of tax | (100) | (157) | ||
AOCI, net of tax, ending balance | (98) | 52 | (98) | 52 |
Unrealized Gains (Losses) on Cash Flow Hedges | ||||
Accumulated Balances of Other Comprehensive Income, Before Tax | ||||
AOCI before tax, beginning balance | 59 | 21 | 131 | 57 |
Other comprehensive income (loss) before reclassifications, before tax | (98) | 88 | (130) | 84 |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax | 19 | 9 | 59 | 41 |
Net current period other comprehensive income (loss), before tax | (117) | 79 | (189) | 43 |
AOCI before tax, ending balance | (58) | 100 | (58) | 100 |
Unrealized Gains (Losses) on Investments | ||||
Accumulated Balances of Other Comprehensive Income, Before Tax | ||||
AOCI before tax, beginning balance | (4) | (4) | (5) | (16) |
Other comprehensive income (loss) before reclassifications, before tax | 0 | 9 | 0 | 18 |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax | 0 | 0 | (1) | (3) |
Net current period other comprehensive income (loss), before tax | 0 | 9 | 1 | 21 |
AOCI before tax, ending balance | (4) | 5 | (4) | 5 |
Foreign Currency Translation | ||||
Accumulated Balances of Other Comprehensive Income, Before Tax | ||||
AOCI before tax, beginning balance | (55) | (45) | (68) | (53) |
Other comprehensive income (loss) before reclassifications, before tax | 16 | (5) | 29 | 3 |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax | 0 | 0 | 0 | 0 |
Net current period other comprehensive income (loss), before tax | 16 | (5) | 29 | 3 |
AOCI before tax, ending balance | $ (39) | $ (50) | $ (39) | $ (50) |
Accumulated Other Comprehensi78
Accumulated Other Comprehensive (Loss) Income - Reclassifications Out of Other Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net revenues | $ 3,136 | $ 2,650 | $ 6,111 | $ 5,194 |
Other income (expense), net | 17 | 9 | 24 | 24 |
Income before income taxes | 447 | 380 | 885 | 802 |
Income tax expense | 36 | 57 | 90 | 114 |
Net income | 411 | 323 | 795 | 688 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income | Gains on cash flow hedges-foreign exchange contracts | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net revenues | 19 | 9 | 59 | 41 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income | Unrealized losses on investments | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other income (expense), net | 0 | 0 | (1) | (3) |
Income before income taxes | 19 | 9 | 58 | 38 |
Income tax expense | 0 | 0 | 0 | 0 |
Net income | $ 19 | $ 9 | $ 58 | $ 38 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | 1 Months Ended |
Jul. 31, 2017USD ($) | |
Subsequent Event | TIO Networks Corp. | |
Subsequent Event [Line Items] | |
Payments to acquire businesses | $ 238 |