Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | XEROX HOLDINGS CORPORATION | |
Entity Central Index Key | 0001770450 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 216,188,261 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Title of 12(b) Security | Common Stock, $1 par value | |
Trading Symbol | XRX | |
Security Exchange Name | NYSE | |
Entity File Number | 001-39013 | |
Entity Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 83-3933743 | |
Entity Address, Address Line One | P.O. Box 4505, 201 Merritt 7 | |
Entity Address, City or Town | Norwalk | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06851-1056 | |
City Area Code | 203 | |
Local Phone Number | 968-3000 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
XEROX CORPORATION | ||
Entity Information [Line Items] | ||
Entity Registrant Name | XEROX CORPORATION | |
Entity Central Index Key | 0000108772 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 001-04471 | |
Entity Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 16-0468020 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Revenues | |||||
Total Revenues | [1],[2] | $ 2,200 | $ 2,352 | $ 6,695 | $ 7,297 |
Costs and Expenses | |||||
Cost of financing | 33 | 33 | 98 | 100 | |
Research, development and engineering expenses | 100 | 102 | 280 | 303 | |
Selling, administrative and general expenses | 513 | 583 | 1,580 | 1,835 | |
Restructuring and related costs | 27 | 29 | 176 | 91 | |
Amortization of intangible assets | 9 | 12 | 35 | 36 | |
Transaction and related costs, net | 4 | (33) | 8 | 63 | |
Other expenses, net | (3) | 57 | 74 | 126 | |
Total Costs and Expenses | 1,970 | 2,160 | 6,182 | 6,838 | |
Income before Income Taxes and Equity Income | 230 | 192 | 513 | 459 | |
Income tax expense | 66 | 142 | 108 | 220 | |
Equity in net income (loss) of unconsolidated affiliates | 58 | 43 | 137 | (6) | |
Net Income | 222 | 93 | 542 | 233 | |
Less: Net income attributable to noncontrolling interests | 1 | 4 | 7 | 9 | |
Net Income Attributable to Xerox Holdings/Xerox | $ 221 | $ 89 | $ 535 | $ 224 | |
Basic Earnings per Share: | |||||
Basic Earnings per Share (in dollars per share) | $ 0.99 | $ 0.34 | $ 2.34 | $ 0.84 | |
Diluted Earnings per Share: | |||||
Diluted Earnings per Share (in dollars per share) | $ 0.96 | $ 0.34 | $ 2.27 | $ 0.83 | |
XEROX CORPORATION | |||||
Revenues | |||||
Total Revenues | $ 2,200 | $ 2,352 | $ 6,695 | $ 7,297 | |
Costs and Expenses | |||||
Cost of financing | 33 | 33 | 98 | 100 | |
Research, development and engineering expenses | 100 | 102 | 280 | 303 | |
Selling, administrative and general expenses | 513 | 583 | 1,580 | 1,835 | |
Restructuring and related costs | 27 | 29 | 176 | 91 | |
Amortization of intangible assets | 9 | 12 | 35 | 36 | |
Transaction and related costs, net | 4 | (33) | 8 | 63 | |
Other expenses, net | (3) | 57 | 74 | 126 | |
Total Costs and Expenses | 1,970 | 2,160 | 6,182 | 6,838 | |
Income before Income Taxes and Equity Income | 230 | 192 | 513 | 459 | |
Income tax expense | 66 | 142 | 108 | 220 | |
Equity in net income (loss) of unconsolidated affiliates | 58 | 43 | 137 | (6) | |
Net Income | 222 | 93 | 542 | 233 | |
Less: Net income attributable to noncontrolling interests | 1 | 4 | 7 | 9 | |
Net Income Attributable to Xerox Holdings/Xerox | 221 | 89 | 535 | 224 | |
Sales | |||||
Revenues | |||||
Total Revenues | [1],[3] | 804 | 856 | 2,379 | 2,628 |
Costs and Expenses | |||||
Cost of sales and services | [3] | 515 | 539 | 1,531 | 1,664 |
Sales | XEROX CORPORATION | |||||
Revenues | |||||
Total Revenues | [4] | 804 | 856 | 2,379 | 2,628 |
Costs and Expenses | |||||
Cost of sales and services | [4] | 515 | 539 | 1,531 | 1,664 |
Services, maintenance and rentals | |||||
Revenues | |||||
Total Revenues | [3] | 1,336 | 1,431 | 4,132 | 4,465 |
Costs and Expenses | |||||
Cost of sales and services | [3] | 772 | 838 | 2,400 | 2,620 |
Services, maintenance and rentals | XEROX CORPORATION | |||||
Revenues | |||||
Total Revenues | [4] | 1,336 | 1,431 | 4,132 | 4,465 |
Costs and Expenses | |||||
Cost of sales and services | [4] | 772 | 838 | 2,400 | 2,620 |
Financing | |||||
Revenues | |||||
Total Revenues | 60 | 65 | 184 | 204 | |
Financing | XEROX CORPORATION | |||||
Revenues | |||||
Total Revenues | $ 60 | $ 65 | $ 184 | $ 204 | |
[1] | Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation - Change in Presentation, for additional information. | ||||
[2] | Geographic area data is based upon the location of the subsidiary reporting the revenue. | ||||
[3] | Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation for additional information. | ||||
[4] | Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation for additional information. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Net Income | $ 222 | $ 93 | $ 542 | $ 233 | |
Less: Net income attributable to noncontrolling interests | 1 | 4 | 7 | 9 | |
Net Income Attributable to Xerox Holdings/Xerox | 221 | 89 | 535 | 224 | |
Other Comprehensive (Loss) Income, Net | |||||
Translation adjustments, net | [1] | (155) | (13) | (122) | (159) |
Unrealized gains (losses), net | [1] | 1 | 3 | ||
Unrealized gains (losses), net | [1] | (9) | 5 | ||
Changes in defined benefit plans, net | [1] | (48) | 83 | (38) | 191 |
Other Comprehensive (Loss) Income, Net | [1] | (202) | 61 | (157) | 37 |
Less: Other comprehensive income, net attributable to noncontrolling interests | [1] | 1 | 0 | 1 | 0 |
Other Comprehensive (Loss) Income, Net Attributable to Xerox Holdings/Xerox | [1] | (203) | 61 | (158) | 37 |
Comprehensive Income, Net | |||||
Comprehensive Income, Net | 20 | 154 | 385 | 270 | |
Less: Comprehensive income, net attributable to noncontrolling interests | 2 | 4 | 8 | 9 | |
Comprehensive Income, Net Attributable to Xerox Holdings/Xerox | 18 | 150 | 377 | 261 | |
XEROX CORPORATION | |||||
Net Income | 222 | 93 | 542 | 233 | |
Less: Net income attributable to noncontrolling interests | 1 | 4 | 7 | 9 | |
Net Income Attributable to Xerox Holdings/Xerox | 221 | 89 | 535 | 224 | |
Other Comprehensive (Loss) Income, Net | |||||
Translation adjustments, net | [2] | (155) | (13) | (122) | (159) |
Unrealized gains (losses), net | [2] | 1 | 3 | ||
Unrealized gains (losses), net | [2] | (9) | 5 | ||
Changes in defined benefit plans, net | [2] | (48) | 83 | (38) | 191 |
Other Comprehensive (Loss) Income, Net | [2] | (202) | 61 | (157) | 37 |
Less: Other comprehensive income, net attributable to noncontrolling interests | [2] | 1 | 0 | 1 | 0 |
Other Comprehensive (Loss) Income, Net Attributable to Xerox Holdings/Xerox | [2] | (203) | 61 | (158) | 37 |
Comprehensive Income, Net | |||||
Comprehensive Income, Net | 20 | 154 | 385 | 270 | |
Less: Comprehensive income, net attributable to noncontrolling interests | 2 | 4 | 8 | 9 | |
Comprehensive Income, Net Attributable to Xerox Holdings/Xerox | $ 18 | $ 150 | $ 377 | $ 261 | |
[1] | Refer to Note 20 - Other Comprehensive (Loss) Income for gross components of Other comprehensive (loss) income, net, reclassification adjustments out of Accumulated other comprehensive loss and related tax effects. | ||||
[2] | Refer to Note 20 - Other Comprehensive (Loss) Income for gross components of Other comprehensive (loss) income, net, reclassification adjustments out of Accumulated other comprehensive loss and related tax effects. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) shares in Thousands, $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 922 | $ 1,084 |
Accounts receivable, net | 1,188 | 1,276 |
Billed portion of finance receivables, net | 106 | 105 |
Finance receivables, net | 1,145 | 1,218 |
Inventories | 758 | 818 |
Other current assets | 221 | 194 |
Total current assets | 4,340 | 4,695 |
Finance receivables due after one year, net | 2,037 | 2,149 |
Equipment on operating leases, net | 374 | 442 |
Land, buildings and equipment, net | 442 | 499 |
Investments in affiliates, at equity | 1,517 | 1,403 |
Intangible assets, net | 203 | 220 |
Goodwill | 3,853 | 3,867 |
Deferred tax assets | 688 | 740 |
Other long-term assets | 1,206 | 859 |
Total Assets | 14,660 | 14,874 |
Liabilities and Equity | ||
Short-term debt and current portion of long-term debt | 1,602 | 961 |
Accounts payable | 1,070 | 1,091 |
Accrued compensation and benefits costs | 321 | 349 |
Accrued expenses and other current liabilities | 930 | 850 |
Total current liabilities | 3,923 | 3,251 |
Long-term debt | 3,230 | 4,269 |
Pension and other benefit liabilities | 1,599 | 1,482 |
Post-retirement medical benefits | 335 | 350 |
Other long-term liabilities | 473 | 269 |
Total Liabilities | 9,560 | 9,621 |
Commitments and Contingencies (See Note 22) | ||
Convertible Preferred Stock | 214 | 214 |
Common stock | 221 | 232 |
Additional paid-in capital | 3,000 | 3,321 |
Treasury stock, at cost | (68) | (55) |
Retained earnings | 5,552 | 5,072 |
Accumulated other comprehensive loss | (3,850) | (3,565) |
Xerox Holdings/Xerox shareholders’ equity | 4,855 | 5,005 |
Noncontrolling interests | 31 | 34 |
Total Equity | 4,886 | 5,039 |
Total Liabilities and Equity | $ 14,660 | $ 14,874 |
Shares of common stock issued (in shares) | 221,292 | 231,690 |
Treasury stock (in shares) | (2,329) | (2,067) |
Shares of Common Stock Outstanding (in shares) | 218,963 | 229,623 |
XEROX CORPORATION | ||
Assets | ||
Cash and cash equivalents | $ 922 | $ 1,084 |
Accounts receivable, net | 1,188 | 1,276 |
Billed portion of finance receivables, net | 106 | 105 |
Finance receivables, net | 1,145 | 1,218 |
Inventories | 758 | 818 |
Other current assets | 229 | 194 |
Total current assets | 4,348 | 4,695 |
Finance receivables due after one year, net | 2,037 | 2,149 |
Equipment on operating leases, net | 374 | 442 |
Land, buildings and equipment, net | 442 | 499 |
Investments in affiliates, at equity | 1,517 | 1,403 |
Intangible assets, net | 203 | 220 |
Goodwill | 3,853 | 3,867 |
Deferred tax assets | 688 | 740 |
Other long-term assets | 1,206 | 859 |
Total Assets | 14,668 | 14,874 |
Liabilities and Equity | ||
Short-term debt and current portion of long-term debt | 1,602 | 961 |
Accounts payable | 1,070 | 1,091 |
Accrued compensation and benefits costs | 321 | 349 |
Accrued expenses and other current liabilities | 862 | 850 |
Total current liabilities | 3,855 | 3,251 |
Long-term debt | 3,230 | 4,269 |
Pension and other benefit liabilities | 1,599 | 1,482 |
Post-retirement medical benefits | 335 | 350 |
Other long-term liabilities | 473 | 269 |
Total Liabilities | 9,492 | 9,621 |
Commitments and Contingencies (See Note 22) | ||
Convertible Preferred Stock | 0 | 214 |
Common stock | 0 | 232 |
Additional paid-in capital | 3,441 | 3,321 |
Treasury stock, at cost | 0 | (55) |
Retained earnings | 5,554 | 5,072 |
Accumulated other comprehensive loss | (3,850) | (3,565) |
Xerox Holdings/Xerox shareholders’ equity | 5,145 | 5,005 |
Noncontrolling interests | 31 | 34 |
Total Equity | 5,176 | 5,039 |
Total Liabilities and Equity | $ 14,668 | $ 14,874 |
Shares of common stock issued (in shares) | 0 | 231,690 |
Treasury stock (in shares) | 0 | (2,067) |
Shares of Common Stock Outstanding (in shares) | 0 | 229,623 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows from Operating Activities | ||||
Net Income | $ 222 | $ 93 | $ 542 | $ 233 |
Adjustments required to reconcile Net income to Cash flows from operating activities | ||||
Depreciation and amortization | 104 | 122 | 332 | 398 |
Provisions | 16 | 16 | 58 | 56 |
Net gain on sales of businesses and assets | (19) | (3) | (20) | (35) |
Undistributed equity in net income of unconsolidated affiliates | (59) | (43) | (102) | 9 |
Stock-based compensation | 11 | 15 | 41 | 44 |
Restructuring and asset impairment charges | 8 | 29 | 80 | 91 |
Payments for restructurings | (17) | (39) | (71) | (130) |
Defined benefit pension cost | 21 | 36 | 89 | 89 |
Contributions to defined benefit pension plans | (37) | (36) | (107) | (111) |
Decrease in accounts receivable and billed portion of finance receivables | 51 | 1 | 62 | 37 |
Decrease (increase) in inventories | 16 | (20) | 33 | (91) |
Increase in equipment on operating leases | (41) | (63) | (113) | (182) |
Decrease in finance receivables | 5 | 39 | 124 | 181 |
(Increase) decrease in other current and long-term assets | (14) | (4) | 1 | 17 |
Increase (decrease) in accounts payable | 21 | (31) | (34) | 12 |
(Decrease) increase in accrued compensation | (15) | 4 | (99) | (97) |
Increase in other current and long-term liabilities | 27 | 15 | 19 | 11 |
Net change in income tax assets and liabilities | 40 | 124 | 27 | 165 |
Net change in derivative assets and liabilities | 5 | 21 | 15 | (2) |
Other operating, net | 11 | (2) | 18 | 30 |
Net cash provided by operating activities | 356 | 274 | 895 | 725 |
Cash Flows from Investing Activities | ||||
Cost of additions to land, buildings, equipment and software | (17) | (23) | (48) | (73) |
Proceeds from sales of businesses and assets | 20 | 0 | 21 | 32 |
Acquisitions, net of cash acquired | 0 | 0 | (42) | 0 |
Other investing, net | 1 | 0 | 1 | 1 |
Net cash provided by (used in) investing activities | 4 | (23) | (68) | (40) |
Cash Flows from Financing Activities | ||||
Net payments on short-term debt | 0 | (1) | 0 | (2) |
Proceeds from issuance of long-term debt | 2 | 2 | 7 | 7 |
Payments on long-term debt | 0 | (1) | (406) | (311) |
Dividends | (61) | (69) | (183) | (204) |
Payments to acquire treasury stock, including fees | (68) | (284) | (368) | (284) |
Other financing, net | (10) | (6) | (33) | (21) |
Net cash used in financing activities | (137) | (359) | (983) | (815) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (20) | (1) | (13) | (20) |
Increase (decrease) in cash, cash equivalents and restricted cash | 203 | (109) | (169) | (150) |
Cash, cash equivalents and restricted cash at beginning of period | 776 | 1,327 | 1,148 | 1,368 |
Cash, Cash Equivalents and Restricted Cash at End of Period | 979 | 1,218 | 979 | 1,218 |
XEROX CORPORATION | ||||
Cash Flows from Operating Activities | ||||
Net Income | 222 | 93 | 542 | 233 |
Adjustments required to reconcile Net income to Cash flows from operating activities | ||||
Depreciation and amortization | 104 | 122 | 332 | 398 |
Provisions | 16 | 16 | 58 | 56 |
Net gain on sales of businesses and assets | (19) | (3) | (20) | (35) |
Undistributed equity in net income of unconsolidated affiliates | (59) | (43) | (102) | 9 |
Stock-based compensation | 11 | 15 | 41 | 44 |
Restructuring and asset impairment charges | 8 | 29 | 80 | 91 |
Payments for restructurings | (17) | (39) | (71) | (130) |
Defined benefit pension cost | 21 | 36 | 89 | 89 |
Contributions to defined benefit pension plans | (37) | (36) | (107) | (111) |
Decrease in accounts receivable and billed portion of finance receivables | 51 | 1 | 62 | 37 |
Decrease (increase) in inventories | 16 | (20) | 33 | (91) |
Increase in equipment on operating leases | (41) | (63) | (113) | (182) |
Decrease in finance receivables | 5 | 39 | 124 | 181 |
(Increase) decrease in other current and long-term assets | (14) | (4) | 1 | 17 |
Increase (decrease) in accounts payable | 21 | (31) | (34) | 12 |
(Decrease) increase in accrued compensation | (15) | 4 | (99) | (97) |
Increase in other current and long-term liabilities | 27 | 15 | 19 | 11 |
Net change in income tax assets and liabilities | 40 | 124 | 27 | 165 |
Net change in derivative assets and liabilities | 5 | 21 | 15 | (2) |
Other operating, net | 11 | (2) | 18 | 30 |
Net cash provided by operating activities | 356 | 274 | 895 | 725 |
Cash Flows from Investing Activities | ||||
Cost of additions to land, buildings, equipment and software | (17) | (23) | (48) | (73) |
Proceeds from sales of businesses and assets | 20 | 0 | 21 | 32 |
Acquisitions, net of cash acquired | 0 | 0 | (42) | 0 |
Other investing, net | 1 | 0 | 1 | 1 |
Net cash provided by (used in) investing activities | 4 | (23) | (68) | (40) |
Cash Flows from Financing Activities | ||||
Net payments on short-term debt | 0 | (1) | 0 | (2) |
Proceeds from issuance of long-term debt | 2 | 2 | 7 | 7 |
Payments on long-term debt | 0 | (1) | (406) | (311) |
Dividends | (59) | (69) | (181) | (204) |
Payments to acquire treasury stock, including fees | 0 | (284) | (300) | (284) |
Distributions to parent | (73) | 0 | (73) | 0 |
Other financing, net | (7) | (6) | (30) | (21) |
Net cash used in financing activities | (137) | (359) | (983) | (815) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (20) | (1) | (13) | (20) |
Increase (decrease) in cash, cash equivalents and restricted cash | 203 | (109) | (169) | (150) |
Cash, cash equivalents and restricted cash at beginning of period | 776 | 1,327 | 1,148 | 1,368 |
Cash, Cash Equivalents and Restricted Cash at End of Period | $ 979 | $ 1,218 | $ 979 | $ 1,218 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation References to “Xerox Holdings” refer to Xerox Holdings Corporation and its consolidated subsidiaries while references to “Xerox” refer to Xerox Corporation and its consolidated subsidiaries. References herein to “we,” “us,” “our,” the “Company” refer collectively to both Xerox Holdings and Xerox unless the context suggests otherwise. The accompanying unaudited Condensed Consolidated Financial Statements represent the respective, consolidated results and financial results of Xerox Holdings and Xerox and all respective companies that each registrant directly or indirectly controls, either through majority ownership or otherwise. This is a combined report of Xerox Holdings and Xerox, which includes separate unaudited Condensed Consolidated Financial Statements for each registrant. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared for both registrants in accordance with the accounting policies described in Xerox's 2018 Annual Report on Form 10-K ("2018 Annual Report") except as noted herein, and the interim reporting requirements of Form 10-Q. Accordingly, certain information and note disclosures normally included in our annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. You should read these Condensed Consolidated Financial Statements in conjunction with the Consolidated Financial Statements included in Xerox's 2018 Annual Report. In our opinion, all adjustments, which are necessary for a fair statement of financial position, operating results and cash flows for the interim periods presented, have been made. These adjustments consist of normal recurring items. Interim results of operations are not necessarily indicative of the results of the full year. For convenience and ease of reference, we refer to the financial statement caption “Income before Income Taxes and Equity Income” as “pre-tax income.” Notes to the Condensed Consolidated Financial Statements reflect the activity for both Xerox Holdings and Xerox for all periods presented, unless otherwise noted. Corporate Reorganization On March 6, 2019, the Xerox Board of Directors approved a reorganization (the “Reorganization”) of the Company's corporate structure into a holding company structure. The Reorganization was subject to the approval of shareholders, which was obtained at the annual shareholders meeting held May 21, 2019. On July 31, 2019, Xerox completed the Reorganization, pursuant to which Xerox became a direct, wholly-owned subsidiary of Xerox Holdings. The business operations, directors and executive officers of the Company did not change as a result of the Reorganization. In this Reorganization, shareholders of Xerox (the predecessor publicly held parent company) became shareholders of Xerox Holdings on a one -for-one basis; maintaining the same number of shares and ownership percentage as held in Xerox immediately prior to the Reorganization. In addition, the individual holder of the shares of Xerox’s Series B Preferred Stock exchanged those shares for the same number of shares of Xerox Holdings Series A Preferred Stock. Each share of Xerox Holdings Series A Preferred Stock has the same designations, rights, powers and preferences, and the same qualifications, limitations and restrictions as the shares of Xerox Series B Preferred Stock, with the addition of certain voting rights. In connection with the Reorganization, Xerox Holdings assumed each of the Xerox stock plans, all unexercised and unexpired options to purchase Xerox common stock and each right to acquire or vest in a share of Xerox common stock, including restricted stock unit awards, performance share awards and deferred stock units that are outstanding under the Xerox stock plans. In addition, Xerox Holdings became a guarantor of Xerox’s existing Credit Facility. The Reorganization was accounted for as a transaction among entities under common control and is expected to be a tax-free transaction for U.S. federal income tax purposes. Shares of Xerox Holdings common stock trade on the New York Stock Exchange under the ticker symbol “XRX”, formerly used by Xerox. Subsequent to the Reorganization, Xerox Holdings contributed the Xerox Series B Preferred Stock it held to Xerox in exchange for additional capital and Xerox subsequently extinguished the Series B Preferred Stock. The contribution and extinguishment were recorded at carrying value. In addition, the capital structure of Xerox was modified such that its issued and outstanding common shares now held by Xerox Holdings were exchanged for 100 shares of Xerox $1 par value common stock. Accordingly, we reclassified approximately $221 from Xerox’s Common stock to Additional paid-in capital. Shared Services Arrangement with HCL Technologies In March 2019, as part of Project Own It, we entered into a shared services arrangement with HCL Technologies (HCL) pursuant to which we are outsourcing certain global administrative and support functions, including, among others, selected information technology and finance functions (excluding accounting). The transition of these functions to HCL is expected to take up to 18 months . HCL is expected to make certain up-front and ongoing investments in software, tools and other technology to consolidate, optimize and automate the transferred functions with the goal of providing improved service levels and significant cost savings. The shared services arrangement with HCL includes a total aggregate spending commitment by us of approximately $1.3 billion over the next 7 years. However, we can terminate the arrangement at any time at our discretion, subject to payment of termination fees that decline over the term or for cause. The spending commitment excludes restructuring and related costs we are expected to incur in connection with the transition of the contemplated functions - refer to Note 12 - Restructuring Programs for additional information. The transfer of employees associated with the HCL arrangement in certain countries is subject to compliance with works council and other employment regulatory requirements in those countries, which may delay the transfer as well as the expected savings from the arrangement. We incurred net charges of approximately $38 and $68 for three and nine months ended September 30, 2019, respectively, associated with this arrangement. The cost has been allocated to the various functional expense lines in the Condensed Consolidated Income Statements based on an assessment of the nature and amount of the costs incurred for the various transferred functions prior to their transfer to HCL. Change in Presentation During first quarter 2019, we realigned portions of our business to support our new revenue strategy. This realignment included the combination and consolidation of certain sales units to better service customers consistently across the company. In connection with that realignment, we changed the classification of revenues and related costs from certain service arrangements to consistently conform the presentation of those amounts among our various business units. Prior year amounts were also revised as follows to conform to the 2019 presentation. Three Months Ended September 30, 2018 As Reported Change As Revised Sales $ 943 $ (87 ) $ 856 Services, maintenance and rentals 1,344 87 1,431 Cost of sales $ 570 $ (31 ) $ 539 Cost of services, maintenance and rentals 807 31 838 Nine Months Ended September 30, 2018 As Reported Change As Revised Sales $ 2,893 $ (265 ) $ 2,628 Services, maintenance and rentals 4,200 265 4,465 Cost of sales $ 1,755 $ (91 ) $ 1,664 Cost of services, maintenance and rentals 2,529 91 2,620 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Xerox Holdings and Xerox consider the applicability and impact of all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB). The ASUs listed below apply to both registrants. ASUs not listed below were assessed and determined to be not applicable to the Consolidated Financial Statements of either registrant. Accounting Standard Updates to be Adopted: Financial Instruments - Credit Losses In June 2016, the FASB issued ASU 2016-13 , Financial Instruments Credit Losses - Measurement of Credit Losses on Financial Instruments, with additional updates and amendments being issued in 2018 and 2019. This update requires measurement and recognition of expected credit losses for financial assets on an expected loss model rather than an incurred loss model. The update impacts financial assets including net investment in leases that are not accounted for at fair value through Net Income. This update is effective for our fiscal year beginning January 1, 2020. We continue to evaluate the impact of the adoption of ASU 2016-13, which is expected to primarily impact the estimation of our Allowance for doubtful accounts for Accounts Receivables and Finance Receivables. We currently do not expect the new guidance to have a material impact on our financial condition, results of operations or cash flows however, the impact will be dependent on future economic conditions. Intangibles - Internal-Use Software In August 2018, the FASB issued ASU 2018-15 , Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The update provides criteria for determining which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The capitalized implementation costs are required to be expensed over the term of the hosting arrangement. The update also clarifies the presentation requirements for reporting such costs in the entity’s financial statements. This update is effective for our fiscal year beginning January 1, 2020. We continue to evaluate the impact of the adoption of ASU 2018-15 on our Consolidated Financial Statements. Since we currently capitalize these implementation costs, we do not currently expect the new guidance to have a material impact on our financial condition, results of operations or cash flows. Accounting Standard Updates Adopted in 2019: Leases On January 1, 2019, we adopted ASU 2016-02 , Leases (ASC Topic 842). This update, as well as additional amendments and targeted improvements issued in 2018 and early 2019, supersedes existing lease accounting guidance found under ASC 840, Leases (“ASC 840”) and requires the recognition of right-to-use assets and lease obligations by lessees for those leases originally classified as operating leases under prior lease guidance. Effective with the adoption, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition. Short-term leases with a term of 12 months or less are not required to be recognized. The update also requires qualitative and quantitative disclosure of key information regarding the amount, timing and uncertainty of cash flows arising from leasing arrangements to increase transparency and comparability among companies. The accounting for lessors does not fundamentally change with this update except for changes to conform and align guidance to the lessee guidance, as well as to the revenue recognition guidance in ASU 2014-09. Some of these conforming changes, such as those related to the definition of lease term and minimum lease payments, resulted in certain lease arrangements, that would have been previously accounted for as operating leases, to be classified and accounted for as sales-type leases with a corresponding up-front recognition of equipment sales revenue. Upon adoption, we applied the transition option, whereby prior comparative periods are not retrospectively presented in the Condensed Consolidated Financial Statements. We also elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and the lessee practical expedient to combine lease and non-lease components for certain asset classes (real estate lease arrangements for offices and warehouses). Additionally, we made a policy election to not recognize right-of-use assets and lease liabilities for short-term leases for all asset classes. We elected the package of practical expedients from both the Lessee and Lessor prospective, to the extent applicable. Lessee accounting - the adoption of this update resulted in an increase to assets and related liabilities of approximately $385 (approximately $440 undiscounted) primarily related to leases of facilities. Lessor accounting - the adoption of this update resulted in an increase to equipment sales for the three and nine months ended September 30, 2019 of approximately $9 and $20 , respectively, in 2019 as compared to the prior year periods. Refer to Note 3 - Adoption of New Leasing Standard - Lessee and Note 4 - Adoption of New Leasing Standard - Lessor for additional transitional disclosures related to the adoption of this standard. Financial Instruments - Derivatives In August 2017, the FASB issued ASU 2017-12 , Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, with additional updates and amendments being issued in 2018 and 2019 . The amendments in this update expand and refine hedge accounting for both financial and non-financial risk components, align the recognition and presentation of the effects of hedging instruments with the same income statement line item that the hedged item is reported and include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. We adopted ASU 2017-12 effective for our fiscal year beginning January 1, 2019, and it did not have a material impact on our financial condition, results of operations or cash flows. Income Taxes In February 2018, the FASB issued ASU 2018-02 , Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . We adopted ASU 2018-02 effective for our fiscal year beginning January 1, 2019 and upon adoption reclassified $127 from Accumulated other comprehensive loss (AOCL) to Retained earnings related to the stranded tax effects resulting from the Tax Cuts and Jobs Act ("Tax Act") enacted in December 2017. The reclassification was primarily related to the stranded tax effects associated with amounts in AOCL from our retirement-related benefit plans. Accordingly, the adoption of this update eliminated the stranded tax effects resulting from the Tax Act. However, because the update only relates to the reclassification of the income tax effects of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in Income from continuing operations is not affected. Other Updates In 2018 , the FASB also issued the following ASUs, which impact the Company but did not have or are not expected to have a material impact on our financial condition, results of operations or cash flows upon adoption. Those updates are as follows: • Collaborative Arrangements: ASU 2018-18 , (Topic 808) Clarifying the Interaction between Topic 808 and Topic 606. This update is effective for our fiscal year beginning January 1, 2020. • Compensation - Retirement Benefits - Defined Benefit Plans - General: ASU 2018-14 , (Topic 715-20) Changes to the Disclosure Requirements for Defined Benefit Plans. This update is effective for our fiscal year beginning January 1, 2020. • Fair Value Measurement: ASU 2018-13 , (Topic 820) Disclosure Framework. This update is effective for our fiscal year beginning January 1, 2020. |
Adoption of New Leasing Standar
Adoption of New Leasing Standard - Lessee | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Adoption of New Leasing Standard - Lessee | Adoption of New Leasing Standard - Lessee Refer to Note 2 - Recent Accounting Pronouncements - Leases, for additional information related to the adoption of ASU 2016-02 , Leases (ASC Topic 842). Lessee Summary: We determine at inception whether an arrangement is a lease. Our leases do not include assets of a specialized nature, or the transfer of ownership at the end of the lease, and the exercise of end-of-lease purchase options, which are primarily in our equipment leases, is not reasonably assured at lease inception. Accordingly, the two primary criteria we use to classify transactions as operating or finance leases are: (i) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the asset, and (ii) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the asset at the inception of the lease. Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We also assess arrangements for goods or services to determine if the arrangement contains a lease at its inception. This assessment first considers whether there is an implicitly or explicitly identified asset in the arrangement and then whether there is a right to control the use of the asset. If there is an embedded lease within a contract, the Company determines the classification of the lease at the lease inception date consistent with standalone leases of assets. Operating leases are included in Other long-term assets, Accrued expenses and other current liabilities, and Other long-term liabilities in our Condensed Consolidated Balance Sheets. Finance leases are included in Land, buildings and equipment, net, Accrued expenses and other current liabilities, and Other long-term liabilities in our Condensed Consolidated Balance Sheets. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for most of our leases is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that we would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. The rate is dependent on several factors, including the lease term and currency of the lease payments. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as we do not have reasonable certainty at lease inception that these options will be exercised. We generally consider the economic life of our operating lease ROU assets to be comparable to the useful life of similar owned assets. We have elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Our leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components. These components are accounted for separately for vehicle and equipment leases. We account for the lease and non-lease components as a single lease component for real estate leases of offices and warehouses. We review the impairment of our ROU assets consistent with the approach applied for our other long-lived assets. We review the recoverability of our long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. We have elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows. Operating Leases We have operating leases for real estate and vehicles in our domestic and international operations and for certain equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms of up to ten years and a variety of renewal and/or termination options. The components of lease expense are as follows: Three Months Ended Nine Months Ended September 30, 2019 Operating lease expense $ 31 $ 97 Short-term lease expense 6 16 Variable lease expense (1) 12 37 Sublease income — (1 ) Total Lease expense $ 49 $ 149 _____________ (1) Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs as well as taxes and insurance. As of September 30, 2019, we have an additional real estate operating lease that has not yet commenced. This operating lease has an obligation and corresponding ROU asset of $23 and will commence in December 2019 with a lease term of approximately 10 years. Operating leases ROU assets, net and operating lease liabilities were reported in the Condensed Consolidated Balance Sheets as follows: September 30, Other long-term assets $ 297 Accrued expenses and other current liabilities $ 88 Other long-term liabilities 235 Total Operating lease liabilities $ 323 Supplemental information related to operating leases is as follows: Three Months Ended Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows $ 31 $ 95 Right-of-use assets obtained in exchange for new lease liabilities (1) 5 28 Weighted-average remaining lease term 4 years Weighted-average discount rate 5.63 % _____________ (1) Includes the impact of new leases as well as remeasurements and modifications to existing leases. Maturities and additional information related to operating lease liabilities are as follows: September 30, 2019 (1) $ 30 2020 105 2021 80 2022 66 2023 49 Thereafter 35 Total Lease payments 365 Less: Imputed interest 42 Total Operating lease liabilities $ 323 _____________ (1) Represents the future minimum operating lease payments expected to be made over the remaining balance of the year. Finance Leases Xerox has one finance lease for equipment and related infrastructure within an outsourced warehouse supply arrangement in the U.S. The lease expires in December 2023 and has a remaining lease obligation of $7 as of September 30, 2019 based on a discount rate of 4.07% . The Right-of-use asset balance associated with this finance lease of $7 is included in Land, buildings and equipment, net in the Condensed Consolidated Balance Sheet. Prior Period Disclosures under ASC 840 For the years ended December 31, 2018 and 2017, operating lease expense, net of sublease income, were $147 and $161 , respectively. Future minimum operating lease commitments that have initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows: December 31, 2019 $ 114 2020 88 2021 64 2022 50 2023 36 Thereafter 27 Total Operating lease commitments $ 379 |
Adoption of New Leasing Standard - Lessee | Adoption of New Leasing Standard - Lessee Refer to Note 2 - Recent Accounting Pronouncements - Leases, for additional information related to the adoption of ASU 2016-02 , Leases (ASC Topic 842). Lessee Summary: We determine at inception whether an arrangement is a lease. Our leases do not include assets of a specialized nature, or the transfer of ownership at the end of the lease, and the exercise of end-of-lease purchase options, which are primarily in our equipment leases, is not reasonably assured at lease inception. Accordingly, the two primary criteria we use to classify transactions as operating or finance leases are: (i) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the asset, and (ii) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the asset at the inception of the lease. Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We also assess arrangements for goods or services to determine if the arrangement contains a lease at its inception. This assessment first considers whether there is an implicitly or explicitly identified asset in the arrangement and then whether there is a right to control the use of the asset. If there is an embedded lease within a contract, the Company determines the classification of the lease at the lease inception date consistent with standalone leases of assets. Operating leases are included in Other long-term assets, Accrued expenses and other current liabilities, and Other long-term liabilities in our Condensed Consolidated Balance Sheets. Finance leases are included in Land, buildings and equipment, net, Accrued expenses and other current liabilities, and Other long-term liabilities in our Condensed Consolidated Balance Sheets. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for most of our leases is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that we would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. The rate is dependent on several factors, including the lease term and currency of the lease payments. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as we do not have reasonable certainty at lease inception that these options will be exercised. We generally consider the economic life of our operating lease ROU assets to be comparable to the useful life of similar owned assets. We have elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Our leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components. These components are accounted for separately for vehicle and equipment leases. We account for the lease and non-lease components as a single lease component for real estate leases of offices and warehouses. We review the impairment of our ROU assets consistent with the approach applied for our other long-lived assets. We review the recoverability of our long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. We have elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows. Operating Leases We have operating leases for real estate and vehicles in our domestic and international operations and for certain equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms of up to ten years and a variety of renewal and/or termination options. The components of lease expense are as follows: Three Months Ended Nine Months Ended September 30, 2019 Operating lease expense $ 31 $ 97 Short-term lease expense 6 16 Variable lease expense (1) 12 37 Sublease income — (1 ) Total Lease expense $ 49 $ 149 _____________ (1) Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs as well as taxes and insurance. As of September 30, 2019, we have an additional real estate operating lease that has not yet commenced. This operating lease has an obligation and corresponding ROU asset of $23 and will commence in December 2019 with a lease term of approximately 10 years. Operating leases ROU assets, net and operating lease liabilities were reported in the Condensed Consolidated Balance Sheets as follows: September 30, Other long-term assets $ 297 Accrued expenses and other current liabilities $ 88 Other long-term liabilities 235 Total Operating lease liabilities $ 323 Supplemental information related to operating leases is as follows: Three Months Ended Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows $ 31 $ 95 Right-of-use assets obtained in exchange for new lease liabilities (1) 5 28 Weighted-average remaining lease term 4 years Weighted-average discount rate 5.63 % _____________ (1) Includes the impact of new leases as well as remeasurements and modifications to existing leases. Maturities and additional information related to operating lease liabilities are as follows: September 30, 2019 (1) $ 30 2020 105 2021 80 2022 66 2023 49 Thereafter 35 Total Lease payments 365 Less: Imputed interest 42 Total Operating lease liabilities $ 323 _____________ (1) Represents the future minimum operating lease payments expected to be made over the remaining balance of the year. Finance Leases Xerox has one finance lease for equipment and related infrastructure within an outsourced warehouse supply arrangement in the U.S. The lease expires in December 2023 and has a remaining lease obligation of $7 as of September 30, 2019 based on a discount rate of 4.07% . The Right-of-use asset balance associated with this finance lease of $7 is included in Land, buildings and equipment, net in the Condensed Consolidated Balance Sheet. Prior Period Disclosures under ASC 840 For the years ended December 31, 2018 and 2017, operating lease expense, net of sublease income, were $147 and $161 , respectively. Future minimum operating lease commitments that have initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows: December 31, 2019 $ 114 2020 88 2021 64 2022 50 2023 36 Thereafter 27 Total Operating lease commitments $ 379 |
Adoption of New Leasing Stand_2
Adoption of New Leasing Standard - Lessor | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Adoption of New Leasing Standard - Lessor | Adoption of New Leasing Standard - Lessor Refer to Note 2 - Recent Accounting Pronouncements - Leases, for additional information related to the adoption of ASU 2016-02 , Leases (ASC Topic 842). Lessor Summary: The following represent updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842. Bundled Lease Arrangements: A portion of our direct sales of equipment to end customers are made through bundled lease arrangements which typically include equipment, services (maintenance and managed services) and financing components where the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which include supplies. Consistent with the guidance in ASC 842 and ASC 606, regarding the allocation of fixed and variable consideration, we only consider the fixed payments for purposes of allocation to the lease elements of the contract. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed lease payments that the customer is obligated to make over the lease term. Amounts allocated to the equipment and financing elements are then subjected to the accounting estimates noted below under Leases to ensure the values reflect standalone selling prices. The remainder of any fixed payments, as well as the variable payments, are allocated to non-lease elements because the variable consideration for incremental page volume or usage is considered attributable to the delivery of those elements. The consideration for the non-lease elements is not dependent on the consideration for equipment and vice versa and the consideration for the equipment and services is priced at the appropriate standalone values; therefore, the relative standalone selling price allocation method is not necessary. The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series with delivery being measured as the usage billed to the customer. Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for Maintenance and Services agreements. Leases: The two primary accounting provisions we use to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75% ); and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90% ). Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized in a manner consistent with Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. We consider the economic life of most of our products to be five years , since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years . There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. We perform an analysis of the stand-alone selling price of equipment based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices reflects stand-alone value. Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above. Additional Lease Payments: Certain leases may require the customer to pay property taxes and insurance on the equipment. In these instances, the amounts for property taxes and insurance that we invoice to customers and pay to third parties are considered variable payments and are recorded as other revenues and other cost of revenues, respectively. Amounts related to property taxes and insurance are not material. We exclude from variable payments all lessor costs that are explicitly required to be paid directly by a lessee on behalf of the lessor to a third party. Presentation: Revenue from sales-type leases is presented on a gross basis when the company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs. The components of lease income are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Lease income - sales type $ 200 $ 175 $ 484 $ 507 Interest income on lease receivables 60 65 184 204 Lease income - operating leases (1) 99 109 303 331 Variable lease income 25 28 80 89 Total Lease income $ 384 $ 377 $ 1,051 $ 1,131 _____________ (1) Operating lease income for the nine months ended September 30, 2019 and 2018 exclude service revenues of $30 and $28 , respectively, which were reported in operating lease income for the three months ended March 31, 2019 and 2018. Profit at lease commencement on sales type leases was estimated to be approximately $86 and $76 for the three months ended September 30, 2019 and 2018 , respectively, and approximately $206 and $221 for the nine months ended September 30, 2019 and 2018 , respectively. |
Adoption of New Leasing Standard - Lessor | Adoption of New Leasing Standard - Lessor Refer to Note 2 - Recent Accounting Pronouncements - Leases, for additional information related to the adoption of ASU 2016-02 , Leases (ASC Topic 842). Lessor Summary: The following represent updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842. Bundled Lease Arrangements: A portion of our direct sales of equipment to end customers are made through bundled lease arrangements which typically include equipment, services (maintenance and managed services) and financing components where the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which include supplies. Consistent with the guidance in ASC 842 and ASC 606, regarding the allocation of fixed and variable consideration, we only consider the fixed payments for purposes of allocation to the lease elements of the contract. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed lease payments that the customer is obligated to make over the lease term. Amounts allocated to the equipment and financing elements are then subjected to the accounting estimates noted below under Leases to ensure the values reflect standalone selling prices. The remainder of any fixed payments, as well as the variable payments, are allocated to non-lease elements because the variable consideration for incremental page volume or usage is considered attributable to the delivery of those elements. The consideration for the non-lease elements is not dependent on the consideration for equipment and vice versa and the consideration for the equipment and services is priced at the appropriate standalone values; therefore, the relative standalone selling price allocation method is not necessary. The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series with delivery being measured as the usage billed to the customer. Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for Maintenance and Services agreements. Leases: The two primary accounting provisions we use to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75% ); and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90% ). Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized in a manner consistent with Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. We consider the economic life of most of our products to be five years , since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years . There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. We perform an analysis of the stand-alone selling price of equipment based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices reflects stand-alone value. Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above. Additional Lease Payments: Certain leases may require the customer to pay property taxes and insurance on the equipment. In these instances, the amounts for property taxes and insurance that we invoice to customers and pay to third parties are considered variable payments and are recorded as other revenues and other cost of revenues, respectively. Amounts related to property taxes and insurance are not material. We exclude from variable payments all lessor costs that are explicitly required to be paid directly by a lessee on behalf of the lessor to a third party. Presentation: Revenue from sales-type leases is presented on a gross basis when the company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs. The components of lease income are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Lease income - sales type $ 200 $ 175 $ 484 $ 507 Interest income on lease receivables 60 65 184 204 Lease income - operating leases (1) 99 109 303 331 Variable lease income 25 28 80 89 Total Lease income $ 384 $ 377 $ 1,051 $ 1,131 _____________ (1) Operating lease income for the nine months ended September 30, 2019 and 2018 exclude service revenues of $30 and $28 , respectively, which were reported in operating lease income for the three months ended March 31, 2019 and 2018. Profit at lease commencement on sales type leases was estimated to be approximately $86 and $76 for the three months ended September 30, 2019 and 2018 , respectively, and approximately $206 and $221 for the nine months ended September 30, 2019 and 2018 , respectively. |
Adoption of New Leasing Standard - Lessor | Adoption of New Leasing Standard - Lessor Refer to Note 2 - Recent Accounting Pronouncements - Leases, for additional information related to the adoption of ASU 2016-02 , Leases (ASC Topic 842). Lessor Summary: The following represent updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842. Bundled Lease Arrangements: A portion of our direct sales of equipment to end customers are made through bundled lease arrangements which typically include equipment, services (maintenance and managed services) and financing components where the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which include supplies. Consistent with the guidance in ASC 842 and ASC 606, regarding the allocation of fixed and variable consideration, we only consider the fixed payments for purposes of allocation to the lease elements of the contract. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed lease payments that the customer is obligated to make over the lease term. Amounts allocated to the equipment and financing elements are then subjected to the accounting estimates noted below under Leases to ensure the values reflect standalone selling prices. The remainder of any fixed payments, as well as the variable payments, are allocated to non-lease elements because the variable consideration for incremental page volume or usage is considered attributable to the delivery of those elements. The consideration for the non-lease elements is not dependent on the consideration for equipment and vice versa and the consideration for the equipment and services is priced at the appropriate standalone values; therefore, the relative standalone selling price allocation method is not necessary. The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series with delivery being measured as the usage billed to the customer. Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for Maintenance and Services agreements. Leases: The two primary accounting provisions we use to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75% ); and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90% ). Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized in a manner consistent with Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. We consider the economic life of most of our products to be five years , since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years . There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. We perform an analysis of the stand-alone selling price of equipment based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices reflects stand-alone value. Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above. Additional Lease Payments: Certain leases may require the customer to pay property taxes and insurance on the equipment. In these instances, the amounts for property taxes and insurance that we invoice to customers and pay to third parties are considered variable payments and are recorded as other revenues and other cost of revenues, respectively. Amounts related to property taxes and insurance are not material. We exclude from variable payments all lessor costs that are explicitly required to be paid directly by a lessee on behalf of the lessor to a third party. Presentation: Revenue from sales-type leases is presented on a gross basis when the company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs. The components of lease income are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Lease income - sales type $ 200 $ 175 $ 484 $ 507 Interest income on lease receivables 60 65 184 204 Lease income - operating leases (1) 99 109 303 331 Variable lease income 25 28 80 89 Total Lease income $ 384 $ 377 $ 1,051 $ 1,131 _____________ (1) Operating lease income for the nine months ended September 30, 2019 and 2018 exclude service revenues of $30 and $28 , respectively, which were reported in operating lease income for the three months ended March 31, 2019 and 2018. Profit at lease commencement on sales type leases was estimated to be approximately $86 and $76 for the three months ended September 30, 2019 and 2018 , respectively, and approximately $206 and $221 for the nine months ended September 30, 2019 and 2018 , respectively. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Primary geographical markets (1) : United States $ 1,364 $ 1,414 $ 4,028 $ 4,307 Europe 521 587 1,705 1,923 Canada 123 133 377 424 Other 192 218 585 643 Total Revenues $ 2,200 $ 2,352 $ 6,695 $ 7,297 Major product and services lines: Equipment $ 494 $ 511 $ 1,446 $ 1,571 Supplies, paper and other sales 310 345 933 1,057 Maintenance agreements (2) 568 618 1,775 1,958 Service arrangements (3) 611 649 1,883 2,007 Rental and other 157 164 474 500 Financing 60 65 184 204 Total Revenues (4) $ 2,200 $ 2,352 $ 6,695 $ 7,297 Sales channels: Direct equipment lease (5) $ 200 $ 175 $ 484 $ 507 Distributors & resellers (6) 301 324 949 1,043 Customer direct 303 357 946 1,078 Total Sales (4) $ 804 $ 856 $ 2,379 $ 2,628 _____________ (1) Geographic area data is based upon the location of the subsidiary reporting the revenue. (2) Includes revenues from maintenance agreements on sold equipment as well as revenues associated with service agreements sold through our channel partners as Xerox Partner Print Services (XPPS). (3) Primarily includes revenues from our Managed Services offerings (formerly our Managed Document Services arrangements). Also includes revenues from embedded operating leases, which were not significant. (4) Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation - Change in Presentation, for additional information. (5) Primarily reflects direct sales through bundled lease arrangements. (6) Primarily reflects sales through our two-tier distribution channels. Contract Assets and Liabilities: We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time. Our contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advanced billings for maintenance and other services to be performed and were approximately $138 and $116 at September 30, 2019 and December 31, 2018 , respectively. The majority of the balance at September 30, 2019 will be amortized to revenue over approximately the next 30 months . Contract Costs: Incremental direct costs of obtaining a contract primarily include sales commissions paid to sales people and agents in connection with the placement of equipment with associated post sale services arrangements. These costs are deferred and amortized on the straight-line basis over the estimated contract term , which is currently estimated to be approximately four years . We pay commensurate sales commissions upon customer renewals, therefore our amortization period is aligned to our initial contract term. Incremental direct costs are as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Incremental direct costs of obtaining a contract $ 20 $ 22 $ 56 $ 62 Amortization of incremental direct costs 23 25 66 72 The balance of deferred incremental direct costs net of accumulated amortization at September 30, 2019 and December 31, 2018 was $162 and $172 , respectively. This amount is expected to be amortized over its estimated period of benefit, which we currently estimate to be approximately four years . We may also incur costs associated with our services arrangements to generate or enhance resources and assets that will be used to satisfy our future performance obligations included in these arrangements. These costs are considered contract fulfillment costs and are amortized over the contractual service period of the arrangement to cost of services. In addition, we also provide inducements to certain customers in various forms, including contractual credits, which are capitalized and amortized as a reduction of revenue over the term of the contract. As of September 30, 2019 and December 31, 2018 amounts deferred associated with contract fulfillment costs and inducements were $13 and $12 , respectively. The related amortization for the three months ended September 30, 2019 and 2018 was $1 and $0 , respectively and $4 and $3 for the nine months ended September 30, 2019 and 2018 , respectively. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Xerox is focused on increasing its Small and Mid-sized (SMB) coverage through resellers and partners (including multi-brand dealers) and continued distribution acquisitions. During the second quarter of 2019, acquisitions totaled $38 and included Rabbit Copiers, Inc. (Rabbit Office Automation (ROA)), a San Francisco Bay area dealer, and Heritage Business Systems, Inc. (HBS), a Delaware Valley dealer. Both dealers expand our distribution and increase the number of resources in these geographies and provide office technology sales, services and supplies in those markets. The operating results of these acquisitions are not material to our financial statements and are included within our results from the acquisition date. The purchase prices were all cash for 100% |
Supplementary Financial Informa
Supplementary Financial Information | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Financial Information [Abstract] | |
Supplementary Financial Information | Supplementary Financial Information Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash amounts were as follows: September 30, December 31, Cash and cash equivalents $ 922 $ 1,084 Restricted cash Litigation deposits in Brazil 57 61 Other restricted cash — 3 Total Restricted cash 57 64 Cash, cash equivalents and restricted cash $ 979 $ 1,148 Restricted cash primarily relates to escrow cash deposits made in Brazil associated with ongoing litigation. As more fully discussed in Note 22 - Contingencies and Litigation, various litigation matters in Brazil require us to make cash deposits to escrow as a condition of continuing the litigation. Restricted cash amounts are classified in our Condensed Consolidated Balance Sheets based on when the cash is expected to be contractually or judicially released. Restricted cash was reported in the Condensed Consolidated Balance Sheets as follows: September 30, December 31, Other current assets $ — $ 1 Other long-term assets 57 63 Total Restricted cash $ 57 $ 64 Supplemental Cash Flow Information Summarized cash flow information is as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Provision for receivables $ 13 $ 11 $ 40 $ 37 Provision for inventory 3 5 18 19 Provision for product warranty 3 3 10 10 Depreciation of buildings and equipment 24 30 77 118 Depreciation and obsolescence of equipment on operating leases 56 62 172 189 Amortization of internal use software 15 18 48 55 Amortization of acquired intangible assets 9 12 35 36 Amortization of customer contract costs (1) 24 25 70 75 Cost of additions to land, buildings and equipment 11 15 30 41 Cost of additions to internal use software 6 8 18 32 Common stock dividends - Xerox Holdings 57 65 172 193 Preferred stock dividends - Xerox Holdings 4 4 11 11 Payments to noncontrolling interests 1 1 14 14 Repurchases related to stock-based compensation - Xerox Holdings 10 5 20 7 _____________ (1) Amortization of customer contract costs are reported in (Increase) decrease in other current and long-term assets in the Condensed Consolidated Statements of Cash Flows. Refer to Note 5 - Revenue for additional information on contract costs. |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net were as follows: September 30, December 31, Invoiced $ 939 $ 999 Accrued 305 333 Allowance for doubtful accounts (56 ) (56 ) Accounts receivable, net $ 1,188 $ 1,276 Amounts to be invoiced in the subsequent quarter for current services provided are included in amounts accrued. We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. The allowance for uncollectible accounts receivable is determined principally on the basis of past collection experience as well as consideration of current economic conditions and changes in our customer collection trends. Accounts Receivable Sales Arrangements Accounts receivable sales arrangements are utilized in the normal course of business as part of our cash and liquidity management. The accounts receivable sold are generally short-term trade receivables with payment due dates of less than 60 days. We have one facility in Europe that enables us to sell accounts receivable associated with our distributor network on an ongoing basis, without recourse. Under this arrangement, we sell our entire interest in the related accounts receivable for cash and no portion of the payment is held back or deferred by the purchaser. Of the accounts receivable sold and derecognized from our balance sheet, $94 and $131 remained uncollected as of September 30, 2019 and December 31, 2018 , respectively. Accounts receivable sales were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Accounts receivable sales (1) $ 67 $ 66 $ 265 $ 297 Loss on sales of accounts receivable 1 1 2 2 __________________________ (1) Customers may also enter into structured-payable arrangements that require us to sell our receivables from that customer to a third-party financial institution, which then makes payments to us to settle the customer's receivable. In these instances, we ensure the sale of the receivables are bankruptcy-remote and the payment made to us is without recourse. The activity associated with these arrangements is not reflected in this disclosure, as payments under these arrangements have not been material and these are customer directed arrangements. Finance receivables include sales-type leases and installment loans arising from the marketing of our equipment. These receivables are typically collateralized by a security interest in the underlying assets. Amounts disclosed below at December 31, 2018 were accounted for under ASC 840, Leases, which was superseded by ASC 842, Leases, adopted on January 1, 2019. Differences upon adoption were not material. Refer to Note 2 - Recent Accounting Pronouncements for additional information. Finance receivables, net were as follows: September 30, December 31, Gross receivables $ 3,795 $ 4,003 Unearned income (414 ) (439 ) Subtotal 3,381 3,564 Residual values — — Allowance for doubtful accounts (93 ) (92 ) Finance receivables, net 3,288 3,472 Less: Billed portion of finance receivables, net 106 105 Less: Current portion of finance receivables not billed, net 1,145 1,218 Finance receivables due after one year, net $ 2,037 $ 2,149 A summary of future contractual maturities of our gross finance receivables, including those previously billed is as follows: September 30, December 31, 12 Months (1) $ 1,471 $ 1,543 24 Months 1,044 1,108 36 Months 705 755 48 Months 406 425 60 Months 152 158 Thereafter 17 14 Total $ 3,795 $ 4,003 __________________ (1) Includes amounts previously billed of $108 and $107 as of September 30, 2019 and December 31, 2018 , respectively. Finance Receivables – Allowance for Credit Losses and Credit Quality Finance receivables include sales-type leases, direct financing leases and installment loans arising from the marketing of our equipment. Our finance receivable portfolios are primarily in the U.S., Canada and Europe. We generally establish customer credit limits and estimate the allowance for credit losses on a country or geographic basis. The allowance for Credit Losses is determined principally on the basis of origination year and past collection experience as well as consideration of current economic conditions and changes in our customer collection trends. Our policy and methodology used to establish our allowance for doubtful accounts has been consistently applied over all periods presented. The allowance for doubtful finance receivables as well as the related investment in finance receivables were as follows: Allowance for Credit Losses: United States Canada Europe Other (1) Total Balance at December 31, 2018 $ 53 $ 12 $ 25 $ 2 $ 92 Provision 4 1 4 — 9 Charge-offs (4 ) (1 ) (3 ) — (8 ) Recoveries and other (2) — — — — — Balance at March 31, 2019 $ 53 $ 12 $ 26 $ 2 $ 93 Provision 4 1 3 — 8 Charge-offs (5 ) (3 ) (3 ) — (11 ) Recoveries and other (2) 1 2 — — 3 Balance at June 30, 2019 $ 53 $ 12 $ 26 $ 2 $ 93 Provision 6 — 2 — 8 Charge-offs (5 ) (1 ) (3 ) — (9 ) Recoveries and other (2) 1 — — — 1 Balance at September 30, 2019 $ 55 $ 11 $ 25 $ 2 $ 93 Finance receivables as of September 30, 2019 collectively evaluated for impairment (3) $ 1,900 $ 318 $ 1,120 $ 43 $ 3,381 Balance at December 31, 2017 $ 56 $ 15 $ 35 $ 2 $ 108 Provision 5 — 4 — 9 Charge-offs (5 ) (1 ) (4 ) — (10 ) Recoveries and other (2) — — 1 — 1 Balance at March 31, 2018 $ 56 $ 14 $ 36 $ 2 $ 108 Provision 4 1 4 — 9 Charge-offs (4 ) (1 ) (3 ) — (8 ) Recoveries and other (2) — — (2 ) — (2 ) Balance at June 30, 2018 $ 56 $ 14 $ 35 $ 2 $ 107 Provision 2 — 4 — 6 Charge-offs (2 ) (2 ) (4 ) — (8 ) Recoveries and other (2) 1 1 — — 2 Balance at September 30, 2018 $ 57 $ 13 $ 35 $ 2 $ 107 Finance receivables as of September 30, 2018 collectively evaluated for impairment (3)(4) $ 1,960 $ 352 $ 1,242 $ 47 $ 3,601 __________________ (1) Includes developing market countries and smaller units. (2) Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations. (3) Total Finance receivables exclude the allowance for credit losses of $93 and $107 at September 30, 2019 and 2018 , respectively. (4) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. We evaluate our customers based on the following credit quality indicators: • Investment grade: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance. The rating generally equates to a Standard & Poor's (S&P) rating of BBB- or better. Loss rates in this category are normally less than 1% . • Non-investment grade: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. This rating generally equates to a BB S&P rating. Although we experience higher loss rates associated with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the higher rates of return we obtain with such leases. Loss rates in this category are generally in the range of 2% to 5% . • Substandard: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include customers who were downgraded during the term of the lease from investment and non-investment grade evaluation when the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or customer default. The loss rates in this category are generally in the range of 7% to 10% . Credit quality indicators are updated at least annually and the credit quality of any given customer can change during the life of the portfolio. Details about our finance receivables portfolio based on industry and credit quality indicators are as follows: September 30, 2019 December 31, 2018 Investment Grade Non-investment Grade Substandard Total Finance Receivables Investment Grade Non-investment Grade Substandard Total Finance Receivables Finance and other services $ 166 $ 332 $ 87 $ 585 $ 177 $ 334 $ 88 $ 599 Government and education 440 54 16 510 453 63 9 525 Graphic arts 70 140 81 291 82 131 87 300 Industrial 79 85 16 180 86 82 16 184 Healthcare 61 63 12 136 86 48 9 143 Other 62 107 29 198 63 90 42 195 Total United States (1) 878 781 241 1,900 947 748 251 1,946 Finance and other services 59 30 17 106 52 33 20 105 Government and education 35 4 3 42 38 3 4 45 Graphic arts 19 26 27 72 22 30 26 78 Industrial 18 11 11 40 16 12 9 37 Other 29 18 11 58 34 21 15 70 Total Canada 160 89 69 318 162 99 74 335 France 199 141 20 360 232 157 29 418 U.K./Ireland 142 78 6 226 150 87 7 244 Central (2) 169 117 8 294 196 123 8 327 Southern (3) 57 129 10 196 52 136 17 205 Nordics (4) 25 18 1 44 28 15 2 45 Total Europe (5) 592 483 45 1,120 658 518 63 1,239 Other (1) 28 13 2 43 31 13 — 44 Total $ 1,658 $ 1,366 $ 357 $ 3,381 $ 1,798 $ 1,378 $ 388 $ 3,564 _____________________________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. (5) Prior year amounts have been recasted to conform to the current year presentation. The aging of our billed finance receivables is based upon the number of days an invoice is past due and is as follows: September 30, 2019 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Finance and other services $ 15 $ 4 $ 3 $ 22 $ 563 $ 585 $ 15 Government and education 17 3 3 23 487 510 19 Graphic arts 13 1 1 15 276 291 6 Industrial 6 2 1 9 171 180 9 Healthcare 4 2 1 7 129 136 6 Other 6 1 1 8 190 198 4 Total United States 61 13 10 84 1,816 1,900 59 Canada 6 2 2 10 308 318 19 France 4 — — 4 356 360 25 U.K./Ireland 1 — — 1 225 226 — Central (2) 1 — 1 2 292 294 8 Southern (3) 2 1 1 4 192 196 3 Nordics (4) — — — — 44 44 — Total Europe 8 1 2 11 1,109 1,120 36 Other 3 — — 3 40 43 — Total $ 78 $ 16 $ 14 $ 108 $ 3,273 $ 3,381 $ 114 December 31, 2018 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Finance and other services $ 15 $ 4 $ 2 $ 21 $ 578 $ 599 $ 11 Government and education 17 4 3 24 501 525 24 Graphic arts 10 1 1 12 288 300 5 Industrial 5 2 1 8 176 184 5 Healthcare 4 2 1 7 136 143 5 Other 5 2 1 8 187 195 4 Total United States (1) 56 15 9 80 1,866 1,946 54 Canada 7 2 1 10 325 335 22 France 5 — — 5 413 418 14 U.K./Ireland 2 — — 2 242 244 — Central (2) 1 1 1 3 324 327 6 Southern (3) 3 1 1 5 200 205 6 Nordics (4) — — — — 45 45 — Total Europe 11 2 2 15 1,224 1,239 26 Other (1) 2 — — 2 42 44 — Total $ 76 $ 19 $ 12 $ 107 $ 3,457 $ 3,564 $ 102 _____________________________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. |
Finance Receivables, Net
Finance Receivables, Net | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Finance Receivables, Net | Accounts Receivable, Net Accounts receivable, net were as follows: September 30, December 31, Invoiced $ 939 $ 999 Accrued 305 333 Allowance for doubtful accounts (56 ) (56 ) Accounts receivable, net $ 1,188 $ 1,276 Amounts to be invoiced in the subsequent quarter for current services provided are included in amounts accrued. We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. The allowance for uncollectible accounts receivable is determined principally on the basis of past collection experience as well as consideration of current economic conditions and changes in our customer collection trends. Accounts Receivable Sales Arrangements Accounts receivable sales arrangements are utilized in the normal course of business as part of our cash and liquidity management. The accounts receivable sold are generally short-term trade receivables with payment due dates of less than 60 days. We have one facility in Europe that enables us to sell accounts receivable associated with our distributor network on an ongoing basis, without recourse. Under this arrangement, we sell our entire interest in the related accounts receivable for cash and no portion of the payment is held back or deferred by the purchaser. Of the accounts receivable sold and derecognized from our balance sheet, $94 and $131 remained uncollected as of September 30, 2019 and December 31, 2018 , respectively. Accounts receivable sales were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Accounts receivable sales (1) $ 67 $ 66 $ 265 $ 297 Loss on sales of accounts receivable 1 1 2 2 __________________________ (1) Customers may also enter into structured-payable arrangements that require us to sell our receivables from that customer to a third-party financial institution, which then makes payments to us to settle the customer's receivable. In these instances, we ensure the sale of the receivables are bankruptcy-remote and the payment made to us is without recourse. The activity associated with these arrangements is not reflected in this disclosure, as payments under these arrangements have not been material and these are customer directed arrangements. Finance receivables include sales-type leases and installment loans arising from the marketing of our equipment. These receivables are typically collateralized by a security interest in the underlying assets. Amounts disclosed below at December 31, 2018 were accounted for under ASC 840, Leases, which was superseded by ASC 842, Leases, adopted on January 1, 2019. Differences upon adoption were not material. Refer to Note 2 - Recent Accounting Pronouncements for additional information. Finance receivables, net were as follows: September 30, December 31, Gross receivables $ 3,795 $ 4,003 Unearned income (414 ) (439 ) Subtotal 3,381 3,564 Residual values — — Allowance for doubtful accounts (93 ) (92 ) Finance receivables, net 3,288 3,472 Less: Billed portion of finance receivables, net 106 105 Less: Current portion of finance receivables not billed, net 1,145 1,218 Finance receivables due after one year, net $ 2,037 $ 2,149 A summary of future contractual maturities of our gross finance receivables, including those previously billed is as follows: September 30, December 31, 12 Months (1) $ 1,471 $ 1,543 24 Months 1,044 1,108 36 Months 705 755 48 Months 406 425 60 Months 152 158 Thereafter 17 14 Total $ 3,795 $ 4,003 __________________ (1) Includes amounts previously billed of $108 and $107 as of September 30, 2019 and December 31, 2018 , respectively. Finance Receivables – Allowance for Credit Losses and Credit Quality Finance receivables include sales-type leases, direct financing leases and installment loans arising from the marketing of our equipment. Our finance receivable portfolios are primarily in the U.S., Canada and Europe. We generally establish customer credit limits and estimate the allowance for credit losses on a country or geographic basis. The allowance for Credit Losses is determined principally on the basis of origination year and past collection experience as well as consideration of current economic conditions and changes in our customer collection trends. Our policy and methodology used to establish our allowance for doubtful accounts has been consistently applied over all periods presented. The allowance for doubtful finance receivables as well as the related investment in finance receivables were as follows: Allowance for Credit Losses: United States Canada Europe Other (1) Total Balance at December 31, 2018 $ 53 $ 12 $ 25 $ 2 $ 92 Provision 4 1 4 — 9 Charge-offs (4 ) (1 ) (3 ) — (8 ) Recoveries and other (2) — — — — — Balance at March 31, 2019 $ 53 $ 12 $ 26 $ 2 $ 93 Provision 4 1 3 — 8 Charge-offs (5 ) (3 ) (3 ) — (11 ) Recoveries and other (2) 1 2 — — 3 Balance at June 30, 2019 $ 53 $ 12 $ 26 $ 2 $ 93 Provision 6 — 2 — 8 Charge-offs (5 ) (1 ) (3 ) — (9 ) Recoveries and other (2) 1 — — — 1 Balance at September 30, 2019 $ 55 $ 11 $ 25 $ 2 $ 93 Finance receivables as of September 30, 2019 collectively evaluated for impairment (3) $ 1,900 $ 318 $ 1,120 $ 43 $ 3,381 Balance at December 31, 2017 $ 56 $ 15 $ 35 $ 2 $ 108 Provision 5 — 4 — 9 Charge-offs (5 ) (1 ) (4 ) — (10 ) Recoveries and other (2) — — 1 — 1 Balance at March 31, 2018 $ 56 $ 14 $ 36 $ 2 $ 108 Provision 4 1 4 — 9 Charge-offs (4 ) (1 ) (3 ) — (8 ) Recoveries and other (2) — — (2 ) — (2 ) Balance at June 30, 2018 $ 56 $ 14 $ 35 $ 2 $ 107 Provision 2 — 4 — 6 Charge-offs (2 ) (2 ) (4 ) — (8 ) Recoveries and other (2) 1 1 — — 2 Balance at September 30, 2018 $ 57 $ 13 $ 35 $ 2 $ 107 Finance receivables as of September 30, 2018 collectively evaluated for impairment (3)(4) $ 1,960 $ 352 $ 1,242 $ 47 $ 3,601 __________________ (1) Includes developing market countries and smaller units. (2) Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations. (3) Total Finance receivables exclude the allowance for credit losses of $93 and $107 at September 30, 2019 and 2018 , respectively. (4) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. We evaluate our customers based on the following credit quality indicators: • Investment grade: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance. The rating generally equates to a Standard & Poor's (S&P) rating of BBB- or better. Loss rates in this category are normally less than 1% . • Non-investment grade: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. This rating generally equates to a BB S&P rating. Although we experience higher loss rates associated with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the higher rates of return we obtain with such leases. Loss rates in this category are generally in the range of 2% to 5% . • Substandard: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include customers who were downgraded during the term of the lease from investment and non-investment grade evaluation when the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or customer default. The loss rates in this category are generally in the range of 7% to 10% . Credit quality indicators are updated at least annually and the credit quality of any given customer can change during the life of the portfolio. Details about our finance receivables portfolio based on industry and credit quality indicators are as follows: September 30, 2019 December 31, 2018 Investment Grade Non-investment Grade Substandard Total Finance Receivables Investment Grade Non-investment Grade Substandard Total Finance Receivables Finance and other services $ 166 $ 332 $ 87 $ 585 $ 177 $ 334 $ 88 $ 599 Government and education 440 54 16 510 453 63 9 525 Graphic arts 70 140 81 291 82 131 87 300 Industrial 79 85 16 180 86 82 16 184 Healthcare 61 63 12 136 86 48 9 143 Other 62 107 29 198 63 90 42 195 Total United States (1) 878 781 241 1,900 947 748 251 1,946 Finance and other services 59 30 17 106 52 33 20 105 Government and education 35 4 3 42 38 3 4 45 Graphic arts 19 26 27 72 22 30 26 78 Industrial 18 11 11 40 16 12 9 37 Other 29 18 11 58 34 21 15 70 Total Canada 160 89 69 318 162 99 74 335 France 199 141 20 360 232 157 29 418 U.K./Ireland 142 78 6 226 150 87 7 244 Central (2) 169 117 8 294 196 123 8 327 Southern (3) 57 129 10 196 52 136 17 205 Nordics (4) 25 18 1 44 28 15 2 45 Total Europe (5) 592 483 45 1,120 658 518 63 1,239 Other (1) 28 13 2 43 31 13 — 44 Total $ 1,658 $ 1,366 $ 357 $ 3,381 $ 1,798 $ 1,378 $ 388 $ 3,564 _____________________________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. (5) Prior year amounts have been recasted to conform to the current year presentation. The aging of our billed finance receivables is based upon the number of days an invoice is past due and is as follows: September 30, 2019 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Finance and other services $ 15 $ 4 $ 3 $ 22 $ 563 $ 585 $ 15 Government and education 17 3 3 23 487 510 19 Graphic arts 13 1 1 15 276 291 6 Industrial 6 2 1 9 171 180 9 Healthcare 4 2 1 7 129 136 6 Other 6 1 1 8 190 198 4 Total United States 61 13 10 84 1,816 1,900 59 Canada 6 2 2 10 308 318 19 France 4 — — 4 356 360 25 U.K./Ireland 1 — — 1 225 226 — Central (2) 1 — 1 2 292 294 8 Southern (3) 2 1 1 4 192 196 3 Nordics (4) — — — — 44 44 — Total Europe 8 1 2 11 1,109 1,120 36 Other 3 — — 3 40 43 — Total $ 78 $ 16 $ 14 $ 108 $ 3,273 $ 3,381 $ 114 December 31, 2018 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Finance and other services $ 15 $ 4 $ 2 $ 21 $ 578 $ 599 $ 11 Government and education 17 4 3 24 501 525 24 Graphic arts 10 1 1 12 288 300 5 Industrial 5 2 1 8 176 184 5 Healthcare 4 2 1 7 136 143 5 Other 5 2 1 8 187 195 4 Total United States (1) 56 15 9 80 1,866 1,946 54 Canada 7 2 1 10 325 335 22 France 5 — — 5 413 418 14 U.K./Ireland 2 — — 2 242 244 — Central (2) 1 1 1 3 324 327 6 Southern (3) 3 1 1 5 200 205 6 Nordics (4) — — — — 45 45 — Total Europe 11 2 2 15 1,224 1,239 26 Other (1) 2 — — 2 42 44 — Total $ 76 $ 19 $ 12 $ 107 $ 3,457 $ 3,564 $ 102 _____________________________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. |
Inventories and Equipment on Op
Inventories and Equipment on Operating Leases, Net | 9 Months Ended |
Sep. 30, 2019 | |
Inventories and Equipment on Operating Leases, Net [Abstract] | |
Inventories and Equipment on Operating Leases, Net | Inventories and Equipment on Operating Leases, Net The following is a summary of Inventories by major category: September 30, December 31, Finished goods $ 623 $ 699 Work-in-process 61 49 Raw materials 74 70 Total Inventories $ 758 $ 818 The transfer of equipment from our inventories to equipment subject to an operating lease is presented in our Condensed Consolidated Statements of Cash Flows in the operating activities section. Equipment on operating leases and similar arrangements consists of our equipment rented to customers and depreciated to estimated salvage value at the end of the lease term. Amounts disclosed below at December 31, 2018 were accounted for under ASC 840, Leases, which was superseded by ASC 842, Leases, adopted on January 1, 2019. Differences upon adoption were not material. Refer to Note 2 - Recent Accounting Pronouncements for additional information. Equipment on operating leases and the related accumulated depreciation were as follows: September 30, December 31, Equipment on operating leases $ 1,457 $ 1,519 Accumulated depreciation (1,083 ) (1,077 ) Equipment on operating leases, net $ 374 $ 442 Estimated minimum future revenues associated with Equipment on operating leases are as follows: September 30, December 31, 2019 (1) $ 63 $ 260 2020 222 178 2021 140 111 2022 79 61 2023 36 21 Thereafter 9 2 Total $ 549 $ 633 _____________ (1) 2019 amount represents the future minimum revenues expected to be earned over the remaining balance of the year. Total contingent rentals on operating leases, consisting principally of usage charges in excess of minimum contracted amounts, were $25 and $28 for the three months ended September 30, 2019 and 2018 , respectively, and $80 and $89 for the nine months ended September 30, 2019 and 2018 |
Investment in Affiliates, at Eq
Investment in Affiliates, at Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Affiliates, at Equity | Investment in Affiliates, at Equity Our Equity in net income (loss) of unconsolidated affiliates was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Fuji Xerox $ 57 $ 41 $ 132 $ (12 ) Other 1 2 5 6 Total Equity in net income (loss) of unconsolidated affiliates $ 58 $ 43 $ 137 $ (6 ) Fuji Xerox Equity in net income (loss) of Fuji Xerox is affected by certain adjustments required to reflect the deferral of profit associated with intercompany sales. These adjustments may result in recorded equity income (loss) that is different from that implied by our 25% ownership interest. In addition, the Equity in net income (loss) of Fuji Xerox for the three months ended September 30, 2019 included no after-tax restructuring and other charges, while after-tax restructuring and other charges for the three months ended September 30, 2018 was $7 . After-tax restructuring and other charges for the nine months ended September 30, 2019 and 2018 were $19 and $90 , respectively. Fuji Xerox recorded a cumulative charge of JPY 12 billion (approximately $110 based on the Yen/U.S. Dollar average exchange rate for the quarter ended March 31, 2018 of 108.07 ) in their net loss for the quarter ended March 31, 2018 (our first quarter 2018) related to the correction of certain out-of-period adjustments and misstatements. Our recognition of 25% of Fuji Xerox’s net loss for Xerox’s first quarter 2018 included an approximately $28 charge related to these adjustments and misstatements. Summarized financial information for Fuji Xerox was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Summary of Operations Revenues $ 2,395 $ 2,326 $ 7,001 $ 7,017 Costs and expenses 2,077 2,077 6,229 6,946 Income before Income Taxes 318 249 772 71 Income tax expense 83 84 233 95 Net Income (Loss) 235 165 539 (24 ) Less: Net income attributable to noncontrolling interests 1 1 2 2 Net Income (Loss) – Fuji Xerox $ 234 $ 164 $ 537 $ (26 ) Weighted Average Exchange Rate (1) 107.26 111.43 109.12 109.50 _____________________________ (1) Represents Yen/U.S. dollar exchange rate used to translate. |
Restructuring Programs
Restructuring Programs | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Programs | Restructuring Programs We engage in restructuring actions, including Project Own It, as well as other transformation efforts in order to reduce our cost structure and realign it to the changing nature of our business and to achieve operating efficiencies through a number of opportunities including reduction of our real estate footprint. During the nine months ended September 30, 2019 , we recorded net restructuring and asset impairment charges of $80 , which included $37 of severance costs related to headcount reductions of approximately 450 employees worldwide, $18 of other contractual termination costs and $48 of asset impairment charges. These costs were partially offset by $23 of net reversals, primarily resulting from changes in estimated reserves from prior period initiatives as well as $6 in favorable adjustments from the early termination of prior period impaired leases. Information related to restructuring program activity is outlined below: Severance and Related Costs Other Contractual Termination Costs (2) Asset Impairments (3) Total Balance at December 31, 2018 $ 94 $ 1 $ — $ 95 Provision 12 14 36 62 Reversals (8 ) — — (8 ) Net current period charges (1) 4 14 36 54 Charges against reserve and currency (32 ) (1 ) (36 ) (69 ) Balance at March 31, 2019 $ 66 $ 14 $ — $ 80 Provision 13 3 10 26 Reversals (6 ) — (2 ) (8 ) Net current period charges (1) 7 3 8 18 Charges against reserve and currency (17 ) (4 ) (8 ) (29 ) Balance at June 30, 2019 $ 56 $ 13 $ — $ 69 Provision 12 1 2 15 Reversals (3 ) (3 ) (1 ) (7 ) Net current period charges (1) 9 (2 ) 1 8 Charges against reserve and currency (16 ) (3 ) (1 ) (20 ) Balance at September 30, 2019 $ 49 $ 8 $ — $ 57 ____________________________ (1) Represents net amount recognized within the Condensed Consolidated Statements of Income for the period shown for restructuring and asset impairment charges. (2) Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs. (3) Primarily related to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $36 for leased right-of-use asset balances and $12 for owned asset balances upon exit from the facility net of any potential sublease income or other recovery amounts . The following table summarizes the reconciliation to the Condensed Consolidated Statements of Cash Flows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Charges against reserve and currency $ (20 ) $ (38 ) $ (118 ) $ (130 ) Effects of foreign currency and other non-cash items 3 (1 ) 47 — Restructuring cash payments $ (17 ) $ (39 ) $ (71 ) $ (130 ) In connection with our restructuring programs, we also incurred certain related costs as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 Retention related severance/bonuses (1) $ 11 $ 31 Contractual severance costs (2) 3 41 Consulting and other costs (3) 5 24 Total $ 19 $ 96 ____________________________ (1) Includes retention related severance and bonuses for employees expected to continue working beyond their minimum notification period before termination. (2) Reflects estimated severance and other related costs we are contractually required to pay on employees transferred (approximately 2,200 ) as part of the shared service arrangement entered into with HCL Technologies. (3) Represents professional support services associated with our business transformation initiatives. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Interest Expense and Income Interest expense and income were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Interest expense (1) $ 60 $ 61 $ 178 $ 184 Interest income (2) 62 70 193 216 ____________ (1) Includes Cost of financing as well as non-financing interest expense that is included in Other expenses, net in the Condensed Consolidated Statements of Income. (2) Includes Financing revenue as well as other interest income that is included in Other expenses, net in the Condensed Consolidated Statements of Income. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments Interest Rate Risk Management We use interest rate swap agreements to manage our interest rate exposure and to achieve a desired proportion of variable and fixed rate debt. These derivatives may be designated as fair value hedges or cash flow hedges depending on the nature of the risk being hedged. Fair Value Hedges As of September 30, 2019 , pay variable/receive fixed interest rate swaps with notional amounts of $200 and net asset fair value of $2 were designated and accounted for as fair value hedges. The swaps were structured to hedge the fair value of related debt by converting them from fixed rate instruments to variable rate instruments. No ineffective portion was recorded to earnings for the nine months ended September 30, 2019 . The following is a summary of our fair value hedges at September 30, 2019 : Debt Instrument Year First Designated Notional Amount Net Fair Value Weighted Average Interest Rate Paid Interest Rate Received Basis Maturity Senior Note 2021 2014 $ 200 $ 2 3.32 % 4.5 % Libor 2021 Foreign Exchange Risk Management We are a global company that is exposed to foreign currency exchange rate fluctuations in the normal course of our business. As a part of our foreign exchange risk management strategy, we use derivative instruments, primarily forward contracts and purchased option contracts, to hedge the following foreign currency exposures, thereby reducing volatility of earnings or protecting fair values of assets and liabilities: • Foreign currency-denominated assets and liabilities • Forecasted purchases and sales in foreign currency At September 30, 2019 and December 31, 2018 , we had outstanding forward exchange and purchased option contracts with gross notional values of $982 and $1,103 respectively, with terms of less than 12 months. Approximately 80% of the contracts at September 30, 2019 mature within three months, 10% mature in three to six months and 10% in six to twelve months. The associated currency exposures being hedged at September 30, 2019 were materially consistent with our year-end currency exposures. There has not been any material change in our hedging strategy. Foreign Currency Cash Flow Hedges We designate a portion of our foreign currency derivative contracts as cash flow hedges of our foreign currency-denominated inventory purchases, sales and expenses. The net asset fair value of these contracts were $4 and $8 as of September 30, 2019 and December 31, 2018 , respectively. Summary of Derivative Instruments Fair Value The following table provides a summary of the fair value amounts of our derivative instruments: Designation of Derivatives Balance Sheet Location September 30, December 31, Derivatives Designated as Hedging Instruments Foreign exchange contracts - forwards Other current assets $ 6 $ 7 Accrued expenses and other current liabilities (2 ) — Foreign currency options Other current assets — 1 Interest rate swaps Other long-term assets 2 — Other long-term liabilities — (3 ) Net designated derivative asset $ 6 $ 5 Derivatives NOT Designated as Hedging Instruments Foreign exchange contracts – forwards Other current assets $ 1 $ 7 Accrued expenses and other current liabilities (4 ) (1 ) Net undesignated derivative asset $ (3 ) $ 6 Summary of Derivatives Total Derivative assets $ 9 $ 15 Total Derivative liabilities (6 ) (4 ) Net Derivative asset $ 3 $ 11 Summary of Derivative Instruments Gains (Losses) Derivative gains and (losses) affect the income statement based on whether such derivatives are designated as hedges of underlying exposures. The following is a summary of derivative gains (losses). Designated Derivative Instruments Gains (Losses) The following table provides a summary of gains (losses) on derivative instruments: Three Months Ended Nine Months Ended Gain (Loss) on Derivative Instruments 2019 2018 2019 2018 Fair Value Hedges - Interest Rate Contracts Derivative gain (loss) recognized in interest expense $ — $ (1 ) $ 5 $ (7 ) Hedged item (loss) gain recognized in interest expense — 1 (5 ) 7 Cash Flow Hedges - Foreign Exchange Forward Contracts and Options Derivative gain (loss) recognized in OCI (effective portion) $ 4 $ (13 ) $ 10 $ (3 ) Derivative gain (loss) reclassified from AOCL to income - Cost of sales (effective portion) 3 (1 ) 6 (13 ) During the three and nine months ended September 30, 2019 and 2018 , no amount of ineffectiveness was recorded in the Condensed Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or (loss) were included in the assessment of hedge effectiveness. In addition, no amount was recorded for an underlying exposure that did not occur or was not expected to occur. As of September 30, 2019 , a net after-tax gain of $7 was recorded in Accumulated other comprehensive loss associated with our cash flow hedging activity. The entire balance is expected to be reclassified into Net income within the next 12 months, providing an offsetting economic impact against the underlying anticipated transactions. Non-Designated Derivative Instruments Gains (Losses) Non-designated derivative instruments are primarily instruments used to hedge foreign currency-denominated assets and liabilities. They are not designated as hedges since there is a natural offset for the remeasurement of the underlying foreign currency-denominated asset or liability. The following table provides a summary of gains (losses) on non-designated derivative instruments: Derivatives NOT Designated as Hedging Instruments Three Months Ended Nine Months Ended Location of Derivative Gain (Loss) 2019 2018 2019 2018 Foreign exchange contracts – forwards Other expense – Currency gain (loss), net $ 2 $ (7 ) $ 3 $ 11 For the three and nine months ended September 30, 2019 currency losses, net were $4 and $6 , respectively, and for the three and nine months ended September 30, 2018 were $3 and $2 , respectively. Net currency gains and losses include the mark-to-market adjustments of the derivatives not designated as hedging instruments and the related cost of those derivatives as well as the remeasurement of foreign currency-denominated assets and liabilities and are included in Other expenses, net. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities The following table represents assets and liabilities measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs. September 30, December 31, Assets Foreign exchange contracts - forwards $ 7 $ 14 Foreign currency options — 1 Interest rate swaps 2 — Deferred compensation investments in mutual funds 18 16 Total $ 27 $ 31 Liabilities Foreign exchange contracts - forwards $ 6 $ 1 Interest rate swaps — 3 Deferred compensation plan liabilities 17 16 Total $ 23 $ 20 We utilize the income approach to measure the fair value for our derivative assets and liabilities. The income approach uses pricing models that rely on market observable inputs such as yield curves, currency exchange rates and forward prices, and therefore are classified as Level 2. Fair value for our deferred compensation plan investments in mutual funds is based on quoted market prices for those funds. Fair value for deferred compensation plan liabilities is based on the fair value of investments corresponding to employees’ investment selections. Summary of Other Financial Assets and Liabilities The estimated fair values of our other financial assets and liabilities were as follows: September 30, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 922 $ 922 $ 1,084 $ 1,084 Accounts receivable, net 1,188 1,188 1,276 1,276 Short-term debt and current portion of long-term debt 1,602 1,608 961 966 Long-term debt 3,230 3,280 4,269 3,922 The fair value amounts for Cash and cash equivalents and Accounts receivable, net, approximate carrying amounts due to the short maturities of these instruments. The fair value of Short-term debt, including the current portion of long-term debt, and Long-term debt was estimated based on the current rates offered to us for debt of similar maturities (Level 2). The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at such date. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows: Three Months Ended September 30, Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health Components of Net Periodic Benefit Costs: 2019 2018 2019 2018 2019 2018 Service cost $ 1 $ 1 $ 5 $ 6 $ — $ 2 Interest cost 25 35 37 37 3 5 Expected return on plan assets (26 ) (35 ) (56 ) (60 ) — — Recognized net actuarial loss (gain) 7 5 10 14 (1 ) — Amortization of prior service credit — — — (1 ) (19 ) (1 ) Recognized settlement loss 18 34 — — — — Defined benefit plans 25 40 (4 ) (4 ) (17 ) 6 Defined contribution plans (1) 6 9 5 8 n/a n/a Net Periodic Benefit Cost (Credit) 31 49 1 4 (17 ) 6 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income: Net actuarial loss (gain) (2) 135 — — (53 ) (9 ) — Amortization of net actuarial (loss) benefit (25 ) (39 ) (10 ) (14 ) 1 — Amortization of prior service credit — — — 1 19 1 Total Recognized in Other Comprehensive (Loss) Income (3) 110 (39 ) (10 ) (66 ) 11 1 Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income $ 141 $ 10 $ (9 ) $ (62 ) $ (6 ) $ 7 Nine Months Ended September 30, Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health Components of Net Periodic Benefit Costs: 2019 2018 2019 2018 2019 2018 Service cost $ 2 $ 2 $ 17 $ 19 $ 1 $ 4 Interest cost 83 102 114 114 11 18 Expected return on plan assets (77 ) (105 ) (174 ) (185 ) — — Recognized net actuarial loss (gain) 18 17 32 44 (3 ) — Amortization of prior service credit (1 ) (1 ) (1 ) (3 ) (57 ) (3 ) Recognized settlement loss 76 85 — — — — Defined benefit plans 101 100 (12 ) (11 ) (48 ) 19 Defined contribution plans (1) 19 28 17 22 n/a n/a Net Periodic Benefit Cost (Credit) 120 128 5 11 (48 ) 19 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income: Net actuarial loss (gain) (2) 171 (46 ) — (53 ) (9 ) 10 Amortization of net actuarial (loss) benefit (94 ) (102 ) (32 ) (44 ) 3 — Amortization of prior service credit 1 1 1 3 57 3 Total Recognized in Other Comprehensive (Loss) Income (3) 78 (147 ) (31 ) (94 ) 51 13 Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive (Loss) Income $ 198 $ (19 ) $ (26 ) $ (83 ) $ 3 $ 32 __________________________ (1) Prior year amounts have been revised to reflect additional cost for previously excluded plans. (2) The net actuarial loss (gain) for U.S. Plans primarily reflects (i) the remeasurement of our primary U.S. pension plans as a result of the payment of periodic settlements and (ii) adjustments for the actuarial valuation results based on January 1st plan census data. The non-U.S. plans net actuarial gain for 2018 reflects and out-of-period adjustment of $53 to correct an overstated benefit obligation for our U.K. Funded Pension Plan at December 31, 2017. (3) Amounts represent the pre-tax effect included within Other Comprehensive (Loss) Income. Refer to Note 20 - Other Comprehensive (Loss) Income for related tax effects and the after-tax amounts. Contributions The following table summarizes cash contributions to our defined benefit pension plans and retiree health benefit plans. Nine Months Ended September 30, Year Ended December 31, 2019 2018 Estimated 2019 2018 U.S. plans $ 19 $ 20 $ 25 $ 27 Non-U.S. plans 88 91 115 117 Total Pension $ 107 $ 111 $ 140 $ 144 Retiree Health $ 22 $ 42 $ 35 $ 57 There are no mandatory contributions required in 2019 for our U.S. tax-qualified defined benefit plans to meet the minimum funding requirements. |
Shareholders' Equity of Xerox H
Shareholders' Equity of Xerox Holdings | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity of Xerox Holdings | Shareholders’ Equity of Xerox Holdings (shares in thousands) For information related to the Reorganization of Xerox and Xerox Holdings, refer to Note 1 - Basis of Presentation - Corporate Reorganization. The shareholders' equity information presented below reflects the consolidated activity of Xerox Holdings. Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at June 30, 2019 $ 225 $ 3,124 $ (131 ) $ 5,391 $ (3,647 ) $ 4,962 $ 30 $ 4,992 Comprehensive income (loss), net — — — 221 (203 ) 18 2 20 Cash dividends declared - common (3) — — — (56 ) — (56 ) — (56 ) Cash dividends declared - preferred (4) — — — (4 ) — (4 ) — (4 ) Stock option and incentive plans, net — 3 — — — 3 — 3 Payments to acquire treasury stock, including fees — — (68 ) — — (68 ) — (68 ) Cancellation of treasury stock (4 ) (127 ) 131 — — — — — Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Balance at September 30, 2019 $ 221 $ 3,000 $ (68 ) $ 5,552 $ (3,850 ) $ 4,855 $ 31 $ 4,886 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at June 30, 2018 $ 255 $ 3,920 $ — $ 4,974 $ (3,772 ) $ 5,377 $ 31 $ 5,408 Comprehensive income, net — — — 89 61 150 4 154 Cash dividends declared - common (3) — — — (62 ) — (62 ) — (62 ) Cash dividends declared - preferred (4) — — — (4 ) — (4 ) — (4 ) Stock option and incentive plans, net 1 10 — — — 11 — 11 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2018 $ 232 $ 3,321 $ (55 ) $ 5,072 $ (3,565 ) $ 5,005 $ 34 $ 5,039 Cumulative effect of change in accounting principle (2) — — — 127 (127 ) — — — Comprehensive income (loss), net — — — 535 (158 ) 377 8 385 Cash dividends declared - common (3) — — — (171 ) — (171 ) — (171 ) Cash dividends declared - preferred (4) — — — (11 ) — (11 ) — (11 ) Stock option and incentive plans, net — 23 — — — 23 — 23 Payments to acquire treasury stock, including fees — — (368 ) — — (368 ) — (368 ) Cancellation of treasury stock (11 ) (344 ) 355 — — — — — Distributions to noncontrolling interests — — — — — — (11 ) (11 ) Balance at September 30, 2019 $ 221 $ 3,000 $ (68 ) $ 5,552 $ (3,850 ) $ 4,855 $ 31 $ 4,886 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at December 31, 2017 $ 255 $ 3,893 $ — $ 4,856 $ (3,748 ) $ 5,256 $ 37 $ 5,293 Cumulative effect of change in accounting principles — — — 120 — 120 — 120 Comprehensive income, net — — — 224 37 261 9 270 Cash dividends declared - common (3) — — — (192 ) — (192 ) — (192 ) Cash dividends declared - preferred (4) — — — (11 ) — (11 ) — (11 ) Stock option and incentive plans, net 1 37 — — — 38 — 38 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (12 ) (12 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 _____________________________ (1) Refer to Note 20 - Other Comprehensive (Loss) Income for the components of AOCL. (2) Refer to Note 2 - Recent Accounting Pronouncements - Income Taxes, for additional information related to the adoption of ASU 2018-02. (3) Cash dividends declared on common stock for the three and nine months ended September 30, 2019 and 2018 were $0.25 per share and $0.75 per share, respectively. (4) Cash dividends declared on preferred stock for the three and nine months ended September 30, 2019 and 2018 were $20.00 per share and $60.00 per share, respectively. Treasury Stock The following is a summary of the purchases of common stock during 2019 : Shares Amount Balance at December 31, 2018 2,067 $ 55 Purchases (1) 11,575 368 Cancellations (11,313 ) (355 ) Balance at September 30, 2019 2,329 $ 68 _____________________________ (1) Includes associated fees. |
Shareholders' Equity of Xerox
Shareholders' Equity of Xerox | 9 Months Ended |
Sep. 30, 2019 | |
Shareholders' Equity of Xerox | Shareholders’ Equity of Xerox Holdings (shares in thousands) For information related to the Reorganization of Xerox and Xerox Holdings, refer to Note 1 - Basis of Presentation - Corporate Reorganization. The shareholders' equity information presented below reflects the consolidated activity of Xerox Holdings. Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at June 30, 2019 $ 225 $ 3,124 $ (131 ) $ 5,391 $ (3,647 ) $ 4,962 $ 30 $ 4,992 Comprehensive income (loss), net — — — 221 (203 ) 18 2 20 Cash dividends declared - common (3) — — — (56 ) — (56 ) — (56 ) Cash dividends declared - preferred (4) — — — (4 ) — (4 ) — (4 ) Stock option and incentive plans, net — 3 — — — 3 — 3 Payments to acquire treasury stock, including fees — — (68 ) — — (68 ) — (68 ) Cancellation of treasury stock (4 ) (127 ) 131 — — — — — Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Balance at September 30, 2019 $ 221 $ 3,000 $ (68 ) $ 5,552 $ (3,850 ) $ 4,855 $ 31 $ 4,886 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at June 30, 2018 $ 255 $ 3,920 $ — $ 4,974 $ (3,772 ) $ 5,377 $ 31 $ 5,408 Comprehensive income, net — — — 89 61 150 4 154 Cash dividends declared - common (3) — — — (62 ) — (62 ) — (62 ) Cash dividends declared - preferred (4) — — — (4 ) — (4 ) — (4 ) Stock option and incentive plans, net 1 10 — — — 11 — 11 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2018 $ 232 $ 3,321 $ (55 ) $ 5,072 $ (3,565 ) $ 5,005 $ 34 $ 5,039 Cumulative effect of change in accounting principle (2) — — — 127 (127 ) — — — Comprehensive income (loss), net — — — 535 (158 ) 377 8 385 Cash dividends declared - common (3) — — — (171 ) — (171 ) — (171 ) Cash dividends declared - preferred (4) — — — (11 ) — (11 ) — (11 ) Stock option and incentive plans, net — 23 — — — 23 — 23 Payments to acquire treasury stock, including fees — — (368 ) — — (368 ) — (368 ) Cancellation of treasury stock (11 ) (344 ) 355 — — — — — Distributions to noncontrolling interests — — — — — — (11 ) (11 ) Balance at September 30, 2019 $ 221 $ 3,000 $ (68 ) $ 5,552 $ (3,850 ) $ 4,855 $ 31 $ 4,886 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at December 31, 2017 $ 255 $ 3,893 $ — $ 4,856 $ (3,748 ) $ 5,256 $ 37 $ 5,293 Cumulative effect of change in accounting principles — — — 120 — 120 — 120 Comprehensive income, net — — — 224 37 261 9 270 Cash dividends declared - common (3) — — — (192 ) — (192 ) — (192 ) Cash dividends declared - preferred (4) — — — (11 ) — (11 ) — (11 ) Stock option and incentive plans, net 1 37 — — — 38 — 38 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (12 ) (12 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 _____________________________ (1) Refer to Note 20 - Other Comprehensive (Loss) Income for the components of AOCL. (2) Refer to Note 2 - Recent Accounting Pronouncements - Income Taxes, for additional information related to the adoption of ASU 2018-02. (3) Cash dividends declared on common stock for the three and nine months ended September 30, 2019 and 2018 were $0.25 per share and $0.75 per share, respectively. (4) Cash dividends declared on preferred stock for the three and nine months ended September 30, 2019 and 2018 were $20.00 per share and $60.00 per share, respectively. Treasury Stock The following is a summary of the purchases of common stock during 2019 : Shares Amount Balance at December 31, 2018 2,067 $ 55 Purchases (1) 11,575 368 Cancellations (11,313 ) (355 ) Balance at September 30, 2019 2,329 $ 68 _____________________________ (1) Includes associated fees. |
XEROX CORPORATION | |
Shareholders' Equity of Xerox | Shareholders’ Equity of Xerox (shares in thousands) For information related to the Reorganization of Xerox and Xerox Holdings, refer to Note 1 - Basis of Presentation - Corporate Reorganization. The shareholders' equity information presented below reflects the consolidated activity of Xerox. Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Shareholders’ Equity Non-controlling Interests Total Equity Balance at June 30, 2019 $ 225 $ 3,124 $ (131 ) $ 5,391 $ (3,647 ) $ 4,962 $ 30 $ 4,992 Comprehensive income (loss), net — — — 221 (203 ) 18 2 20 Dividends declared to parent — — — (58 ) — (58 ) — (58 ) Stock option and incentive plans, net — (2 ) — — — (2 ) — (2 ) Cancellation of treasury stock (4 ) (127 ) 131 — — — — — Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Reorganization (3) (221 ) 446 — — — 225 — 225 Balance at September 30, 2019 $ — $ 3,441 $ — $ 5,554 $ (3,850 ) $ 5,145 $ 31 $ 5,176 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Shareholders’ Equity Non- controlling Interests Total Equity Balance at June 30, 2018 $ 255 $ 3,920 $ — $ 4,974 $ (3,772 ) $ 5,377 $ 31 $ 5,408 Comprehensive income, net — — — 89 61 150 4 154 Cash dividends declared - common — — — (62 ) — (62 ) — (62 ) Cash dividends declared - preferred — — — (4 ) — (4 ) — (4 ) Stock option and incentive plans, net 1 10 — — — 11 — 11 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2018 $ 232 $ 3,321 $ (55 ) $ 5,072 $ (3,565 ) $ 5,005 $ 34 $ 5,039 Cumulative effect of change in accounting principle (2) — — — 127 (127 ) — — — Comprehensive income (loss), net — — — 535 (158 ) 377 8 385 Cash dividends declared - common — — — (115 ) — (115 ) — (115 ) Cash dividends declared - preferred — — — (7 ) — (7 ) — (7 ) Dividends declared to parent — — — (58 ) — (58 ) — (58 ) Stock option and incentive plans, net — 18 — — — 18 — 18 Payments to acquire treasury stock, including fees — — (300 ) — — (300 ) — (300 ) Cancellation of treasury stock (11 ) (344 ) 355 — — — — — Distributions to noncontrolling interests — — — — — — (11 ) (11 ) Reorganization (3) (221 ) 446 — — — 225 — 225 Balance at September 30, 2019 $ — $ 3,441 $ — $ 5,554 $ (3,850 ) $ 5,145 $ 31 $ 5,176 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Shareholders’ Equity Non- controlling Interests Total Equity Balance at December 31, 2017 $ 255 $ 3,893 $ — $ 4,856 $ (3,748 ) $ 5,256 $ 37 $ 5,293 Cumulative effect of change in accounting principles — — — 120 — 120 — 120 Comprehensive income, net — — — 224 37 261 9 270 Cash dividends declared - common — — — (192 ) — (192 ) — (192 ) Cash dividends declared - preferred — — — (11 ) — (11 ) — (11 ) Stock option and incentive plans, net 1 37 — — — 38 — 38 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (12 ) (12 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 _____________________________ (1) Refer to Note 20 - Other Comprehensive (Loss) Income for the components of AOCL. (2) Refer to Note 2 - Recent Accounting Pronouncements - Income Taxes, for additional information related to the adoption of ASU 2018-02. (3) Refer to Note 1 - Basis of Presentation for additional information on the Reorganization of Xerox. Treasury Stock The following is a summary of the purchases of common stock during 2019 : Shares Amount Balance at December 31, 2018 2,067 $ 55 Purchases (1) 9,246 300 Cancellations (11,313 ) (355 ) Balance at September 30, 2019 — $ — _____________________________ (1) Includes associated fees. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation (shares in thousands) We have a long-term incentive plan whereby eligible employees may be granted restricted stock units (RSUs), performance shares (PSs) and stock options (SOs). We grant stock-based compensation awards in order to continue to attract and retain qualified employees and to better align employees' interests with those of our shareholders. Each of these awards is subject to settlement with newly issued shares of our common stock. Stock-based compensation expense was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock-based compensation expense, pre-tax $ 11 $ 15 $ 41 $ 44 Income tax benefit recognized in earnings 3 4 10 11 The board of directors (the "Board") recently approved a change in the timing of our annual grant of awards from April to January to more closely align the grant date with the underlying performance period related to PSs. The following is a summary of the program design and performance metrics effective for our January 2019 grant and grants thereafter, as approved by the Board. Stock options were not awarded under the 2019 grant. Restricted Stock Units Compensation expense for RSUs is based upon the grant-date market price and is recognized on a straight-line basis over the vesting period, based on management's estimate of the number of shares expected to vest. RSUs vest on a graded schedule as follows: 25% after one year of service, 25% after two years of service, and 50% after three years of service from the date of grant. Shares awarded to employees who are retirement-eligible at the date of grant, become retirement-eligible during the vesting period, or are terminated not-for-cause (e.g. as part of a restructuring initiative), vest based on service provided from the date of grant to the date of separation. Shares granted through September 30, 2019 under this program were 1,288 , with a corresponding weighted-average grant-date fair value of $22.73 per share. Performance Shares In connection with the January 2019 grant, the Board approved a change to the PSs performance goals replacing the Total Shareholder Return (TSR) metric with an Absolute Share Price metric focusing on stock price appreciation. The Board retained the Revenue and Free Cash Flow metrics as performance goals as well as the three -year performance period for all measures. The performance metrics are weighted as follows: 25% Revenue, 25% Free Cash Flow and 50% Absolute Share Price. Each PS grant is one-half performance based (Revenue and Free Cash Flow) and one-half market-based (Absolute Share Price). The performance goals are independent of each other and depending on the achievement of these metrics, a recipient of a PS award is entitled to receive a number of shares equal to a percentage, ranging from 0% to 200% of the PS award granted. PSs retain the three -year cliff vesting from the date of grant. Performance-Based Component PSs vest contingent upon meeting pre-determined cumulative performance metrics. The fair value of our PSs is based upon the grant-date market price. Compensation expense is recognized on a straight-line basis over the vesting period, based on management's estimate of the number of shares expected to vest. If the cumulative three -year actual results exceed the stated targets, all plan participants have the potential to earn additional shares of common stock up to a maximum overachievement of 100% of the original grant. If the stated targets are not met, any recognized compensation cost would be reversed. Shares granted through September 30, 2019 under this program were 714 , with a corresponding weighted-average grant-date fair value of $22.62 per share. Market-Based Component The Absolute Share Price metric is based on Xerox's average closing price for the last 20 trading days of the performance period, inclusive of dividends during the three -year performance period. Payout for this portion of the PS will be determined based on total return targets approved by the compensation committee of the Board. Since this portion of the PS award represents a market condition, a Monte Carlo simulation was used to determine the grant-date fair value. A summary of the key valuation input assumptions used in the Monte Carlo simulation relative to PS awards granted were as follows: Program to Date September 30, 2019 Term 3 years Risk-free interest rate (1) 2.51 % Dividend yield (2) 3.97 % Xerox’s blended volatility (3) 32.95 % Weighted-average fair value (4) $ 16.25 ____________ (1) The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve on the valuation date, with a maturity matched to the performance period . (2) The dividend yield was calculated as the expected quarterly dividend divided by Xerox’s three-month average stock price as of the valuation date, annualized and continuously compounded. (3) Xerox’s volatility is calculated using a blended volatility approach, with 50% weight on Xerox's historical volatility calculated from daily stock returns over a three -year look-back term from the valuation date, and 50% weight on Xerox's implied volatility. (4) The weighted-average of fair values used to record compensation expense as determined by the Monte Carlo simulation. The Absolute Share Price is compared against total return targets to determine the payout as follows: Total Return Targets (1) Payout Percentages $40.00 and above 200 % $35.00 100 % $30.00 50 % Below $30.00 0 % ____________ (1) For performance between the levels described above, the degree of vesting is interpolated on a linear basis. Compensation expense is recognized on a straight-line basis over the vesting period based on the fair value determined by the Monte Carlo simulation and, except in cases of employee forfeiture, cannot be reversed regardless of performance. Shares granted through September 30, 2019 under this program were 714 . Note: Management’s estimate of the number of shares expected to vest at the time of grant reflects an estimate for forfeitures based on our historical forfeiture rate to date. Should actual forfeitures differ from management’s estimate, the activity will be reflected in a subsequent period. |
Other Comprehensive (Loss) Inco
Other Comprehensive (Loss) Income | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Other Comprehensive (Loss) Income | Other Comprehensive (Loss) Income Other Comprehensive (Loss) Income is comprised of the following: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax Translation adjustments losses $ (153 ) $ (155 ) $ (13 ) $ (13 ) $ (121 ) $ (122 ) $ (164 ) $ (159 ) Unrealized gains (losses) Changes in fair value of cash flow hedges gains (losses) 4 4 (13 ) (9 ) 10 8 (3 ) (2 ) Changes in cash flow hedges reclassed to earnings (1) (3 ) (3 ) 1 (1 ) (6 ) (5 ) 13 9 Other gains (losses) — — 1 1 — — (2 ) (2 ) Net Unrealized gains (losses) 1 1 (11 ) (9 ) 4 3 8 5 Defined benefit plans (losses) gains Net actuarial/prior service (losses) gains (126 ) (95 ) 53 44 (162 ) (122 ) 89 71 Prior service amortization (2) (19 ) (14 ) (2 ) (1 ) (59 ) (44 ) (7 ) (5 ) Actuarial loss amortization/settlement (2) 34 26 53 40 123 93 146 110 Fuji Xerox changes in defined benefit plans, net (3) (3 ) (3 ) 6 6 (1 ) (1 ) (18 ) (18 ) Other gains (losses) (4) 38 38 (6 ) (6 ) 36 36 33 33 Changes in defined benefit plans (losses) gains (76 ) (48 ) 104 83 (63 ) (38 ) 243 191 Other Comprehensive (Loss) Income (228 ) (202 ) 80 61 (180 ) (157 ) 87 37 Less: Other comprehensive income attributable to noncontrolling interests 1 1 — — 1 1 — — Other Comprehensive (Loss) Income Attributable to Xerox Holdings $ (229 ) $ (203 ) $ 80 $ 61 $ (181 ) $ (158 ) $ 87 $ 37 _____________________________ (1) Reclassified to Cost of sales - refer to Note 14 - Financial Instruments for additional information regarding our cash flow hedges. (2) Reclassified to Total Net Periodic Benefit Cost - refer to Note 16 - Employee Benefit Plans for additional information. (3) Represents our share of Fuji Xerox's benefit plan changes. (4) Primarily represents currency impact on cumulative amount of benefit plan net actuarial losses and prior service credits in AOCL. Accumulated Other Comprehensive Loss (AOCL) AOCL is comprised of the following: September 30, December 31, Cumulative translation adjustments $ (2,146 ) $ (2,023 ) Other unrealized gains, net 7 4 Benefit plans net actuarial losses and prior service credits (1)(2) (1,711 ) (1,546 ) Total Accumulated other comprehensive loss attributable to Xerox Holdings $ (3,850 ) $ (3,565 ) _____________________________ (1) Includes our share of Fuji Xerox. (2) The change from December 31, 2018 includes $(127) related to the adoption of ASU 2018-02 and the reclassification of stranded tax effects resulting from the Tax Act - refer to Note 2 - Recent Accounting Pronouncements - Income Taxes for additional information. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share (shares in thousands) The following table sets forth the computation of basic and diluted earnings per share of common stock of Xerox Holdings: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Basic Earnings per Share Net Income Attributable to Xerox Holdings $ 221 $ 89 $ 535 $ 224 Accrued dividends on preferred stock (4 ) (4 ) (11 ) (11 ) Adjusted Net income available to common shareholders $ 217 $ 85 $ 524 $ 213 Weighted average common shares outstanding 220,269 251,290 224,257 253,360 Basic Earnings per Share $ 0.99 $ 0.34 $ 2.34 $ 0.84 Diluted Earnings per Share Net Income Attributable to Xerox Holdings $ 221 $ 89 $ 535 $ 224 Accrued dividends on preferred stock — (4 ) — (11 ) Adjusted Net income available to common shareholders $ 221 $ 85 $ 535 $ 213 Weighted average common shares outstanding 220,269 251,290 224,257 253,360 Common shares issuable with respect to: Stock options 42 — 37 — Restricted stock and performance shares 4,014 2,763 4,429 2,875 Convertible preferred stock 6,742 — 6,742 — Adjusted Weighted average common shares outstanding 231,067 254,053 235,465 256,235 Diluted Earnings per Share $ 0.96 $ 0.34 $ 2.27 $ 0.83 The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive: Stock options 841 1,052 847 1,052 Restricted stock and performance shares 2,358 3,529 1,944 3,417 Convertible preferred stock — 6,742 — 6,742 Total Anti-Dilutive Securities 3,199 11,323 2,791 11,211 Dividends per Common Share $ 0.25 $ 0.25 $ 0.75 $ 0.75 |
Contingencies and Litigation
Contingencies and Litigation | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Litigation | Contingencies and Litigation Legal Matters We are involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities law; governmental entity contracting; servicing and procurement law; intellectual property law; environmental law; employment law; the Employee Retirement Income Security Act (ERISA); and other laws and regulations. We determine whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. We assess our potential liability by analyzing our litigation and regulatory matters using available information. We develop our views on estimated losses in consultation with outside counsel handling our defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs. Brazil Contingencies Our Brazilian operations have received or been the subject of numerous governmental assessments related to indirect and other taxes. The tax matters principally relate to claims for taxes on the internal transfer of inventory, municipal service taxes on rentals and gross revenue taxes. We are disputing these tax matters and intend to vigorously defend our positions. Based on the opinion of legal counsel and current reserves for those matters deemed probable of loss, we do not believe that the ultimate resolution of these matters will materially impact our results of operations, financial position or cash flows. Below is a summary of our Brazilian tax contingencies: September 30, December 31, Tax contingency - unreserved $ 425 $ 500 Escrow cash deposits 53 58 Surety bonds 98 106 Letters of credit 87 104 Liens on Brazilian assets — — The decrease in the unreserved portion of the tax contingency, inclusive of any related interest, was primarily related to currency. With respect to the unreserved tax contingency, the majority has been assessed by management as being remote as to the likelihood of ultimately resulting in a loss to the Company. In connection with the above proceedings, customary local regulations may require us to make escrow cash deposits or post other security of up to half of the total amount in dispute, as well as, additional surety bonds and letters of credit, which include associated indexation. Generally, any escrowed amounts would be refundable and any liens on assets would be removed to the extent the matters are resolved in our favor. We are also involved in certain disputes with contract and former employees. Exposures related to labor matters are not material to the financial statements as of September 30, 2019 and December 31, 2018. We routinely assess all these matters as to the probability of ultimately incurring a liability against our Brazilian operations and record our best estimate of the ultimate loss in situations where we assess the likelihood of an ultimate loss as probable. Litigation Against the Company Pending Litigation Relating to the Fuji Transaction: 1. Deason v. Fujifilm Holdings Corp., et al.; Deason v. Xerox Corp., et al.; In re Xerox Corporation Consolidated Shareholder Litigation: In February 2018, five complaints (the "Fuji Transaction Shareholder Lawsuits"), including four putative class actions (which have been consolidated), were filed by Xerox shareholders in the Supreme Court of the State of New York, County of New York (the "Court") in connection with the proposed transaction to combine Xerox and Fuji Xerox (the “Fuji Transaction”). All of the complaints name as defendants Xerox, its directors, and FUJIFILM Holdings Corporation (“Fujifilm”). The complaint in one of the actions also names as a defendant Ursula M. Burns, the former Chief Executive Officer of Xerox. The plaintiffs allege, among other things, that Xerox's directors breached their fiduciary duties in negotiating, approving, and purportedly making false and misleading disclosures about the Fuji Transaction, and that Fujifilm aided and abetted those breaches. The complaint in one of the actions further alleges that Xerox and the director defendants engaged in common law fraud by purportedly failing to disclose information about the joint venture agreements between Xerox and Fujifilm. The Fuji Transaction Shareholder Lawsuits seek injunctive relief preventing the previously proposed transactions, and/or additional disclosures by Xerox’s directors, unspecified damages from Xerox’s directors, costs and attorneys’ fees, as well as other relief. One of the Fuji Transaction Shareholder Lawsuits was brought by Darwin Deason, a Xerox shareholder ("Deason I"). Another complaint was filed by Mr. Deason against Xerox and its directors in the same Court on March 2, 2018 ("Deason II") alleging that defendants breached their fiduciary duties by refusing Mr. Deason’s request for a waiver of the deadline for nomination of a new slate of Xerox directors. In Deason II, Mr. Deason sought to enjoin Xerox and its directors from enforcing Xerox’s advance notice by-laws, thereby allowing Mr. Deason to proceed with the nominations, as well as costs, fees, and other relief. On April 27, 2018, the Court issued decisions and orders granting plaintiffs’ preliminary injunction motions, which (i) enjoined Xerox from “taking any further action to consummate the change of control transaction between Xerox and Fuji that was announced on January 31, 2018 pending a final determination of the claims asserted in the underlying action;” (ii) enjoined Xerox from enforcing its advance notice bylaw provision requiring shareholders to nominate directors for election at the 2018 annual shareholder meeting by December 11, 2017; and (iii) required Xerox to waive such advance notice bylaw provision to permit the noticing of a slate of director nominees for election at the 2018 annual shareholder meeting, and denying defendants’ motions to dismiss. On May 1, 2018, Xerox entered into a Director Appointment, Nomination and Settlement Agreement (the “Initial Settlement Agreement”) with Mr. Deason and Carl C. Icahn and certain of his affiliates who were also Xerox shareholders (the "Icahn Group"), among others, that would have resolved Deason I, Deason II and the pending proxy contest in connection with Xerox’s 2018 Annual Meeting of Shareholders. The Initial Settlement Agreement expired by its terms on May 3, 2018 without becoming effective. On May 7, 2018, defendants filed with the Supreme Court of the State of New York, Appellate Division, First Judicial Department, notices of appeal of, and motions to stay pending appeal, the lower Court’s decision and order. Defendants also moved the appellate court for interim relief ordering that the appeal be heard on an expedited basis. At a hearing before the appellate court on May 7, 2018, the appellate court ruled that the appeals would be heard on an expedited basis and granted a partial interim stay allowing Xerox and Fujifilm to take steps to seek regulatory approvals related to the Fuji Transaction pending a ruling from the appellate court on defendants’ motions to stay pending appeal. On May 13, 2018, a second Director Appointment, Nomination and Settlement Agreement (the "Final Settlement Agreement") with respect to Deason I, Deason II and the pending proxy contest in connection with Xerox's 2018 Annual Meeting of Shareholders that was initiated by the Icahn Group was signed on behalf of Mr. Deason, the Icahn Group and all defendants except Fujifilm, and a memorandum of understanding regarding settlement of the putative class case was signed by all defendants except Fujifilm. Pursuant to the settlements, the settling defendants withdrew their appeal and motion to stay in Deason I and Deason II. The settling defendants also withdrew their motion to stay in the putative class case. The Court entered a stipulation of discontinuance as to the settling parties in Deason II on May 14, 2018, and agreed on June 22, 2018 to do the same in Deason I. On June 14, 2018, Fujifilm filed answers in Deason I and the putative class case, along with cross-claims against the members of the Xerox Board (as constituted before May 13, 2018) and a third-party complaint against Xerox director Jonathan Christodoro, seeking contribution for any potential award against Fujifilm for aiding and abetting purported breaches of fiduciary duties. On June 19, 2018, the putative class plaintiffs filed a motion for preliminary approval of a stipulation of settlement that would resolve the claims asserted by the plaintiffs in the putative class case against all defendants, other than Fujifilm. Carmen Ribbe, the plaintiff in the below derivative action, and Fujifilm filed oppositions to the motion on July 10, 2018. On June 22, 2018, the Court entered an order denying a joint motion by the putative class plaintiffs and the settling defendants to dissolve the injunction in the putative class case as against the settling defendants, and entered an order denying Fujifilm’s motion to dissolve the injunctions in the putative class case and Deason I in their entirety. On July 16, 2018, the Court held a hearing concerning the putative class plaintiffs’ motion for preliminary approval of the settlement in the putative class case. The Court indicated that it was not inclined to consider motions for approval of the settlement prior to considering whether the putative class should be certified. On August 2, 2018, the Appellate Division entered orders recognizing the Xerox defendants’ withdrawal of their appeal in the Deason cases and denying all appellants’ motions to stay pending determination of appeals in the Deason and putative class cases. On August 2, 2018, the Appellate Division entered orders (i) at their request, deeming withdrawn the Xerox defendants’ appeal and motion to stay in the Deason cases; (ii) upon their request, deeming withdrawn the Xerox defendants’ motion to stay, pending determination of appeal, the putative class case; and (iii) denying Fujifilm’s motion to stay pending determination of its appeals in the Deason and putative case cases. On September 21, 2018, putative class plaintiffs filed a motion for certification of a settlement class and a motion to transmit notice of the proposed settlement to the proposed class. On October 17, 2018, derivative plaintiff Carmen Ribbe and Fujifilm filed oppositions to the putative class plaintiffs’ motion to transmit notice to the proposed class. The class has not yet been certified, and preliminary approval has not been granted. The Appellate Division heard oral argument on September 25, 2018 on Fujifilm’s appeal of the Court’s decision. On October 16, 2018, the Appellate Division entered a decision and order reversing the Court’s rulings, ordering that the claims brought against Fujifilm in the cases by Mr. Deason and the purported class be dismissed, and further ordering that the preliminary injunction of the proposed Fuji Transaction be dissolved (the “Appellate Decision and Order”). On November 15, 2018, the putative class plaintiffs filed with the Appellate Division a motion seeking the opportunity to reargue Fujifilm’s appeal or, in the alternative, for leave to appeal the Appellate Decision and Order to the New York State Court of Appeals. On December 6, 2018, pursuant to the Appellate Decision and Order, the Court entered a judgment dismissing the complaints against Fujifilm in Deason I and the putative class case. The Court further issued orders denying the putative class plaintiffs’ motion for class certification, without prejudice to renewing the motion after the outcome of any appeals of the Appellate Decision and Order. On January 8, 2019, the Court entered an order staying all further proceedings in Deason I and the putative class case until thirty days after exhaustion of appeals, including any appeals to the New York State Court of Appeals, of the Appellate Decision and Order. On January 9, 2019, the Court entered an order denying the putative class plaintiffs’ motion to transmit notice to the proposed class, without prejudice to renewal of their motion at a later time. On October 31, 2018 and January 3, 2019, respectively, Xerox and the Xerox director defendants in the putative class case filed with the Appellate Division a request and motion seeking an extension, until after any decision regarding approval of settlement of the putative class action, of the deadline by which to perfect their appeal of the Court’s April 27, 2018 decision and order. On May 16, 2019, the Appellate Division entered an order granting the motion and extended the deadline until the October 2019 Term. On February 21, 2019, the Appellate Division issued an order denying the putative class plaintiffs’ motion seeking to reargue Fujifilm’s appeal or, in the alternative, for leave to appeal the Appellate Decision and Order to the New York State Court of Appeals. No further notice of appeal was filed, and the Appellate Decision and Order became final and unappealable on March 26, 2019. On May 3, 2019, putative class plaintiffs filed a renewed motion for approval of the form of a notice to putative class members. On May 6, 2019, putative class plaintiffs filed a renewed motion for class certification and notice of motion to approve class settlement and proposed final approval order. On May 24, 2019, the Court entered an order approving the form notice and proposed manner of its dissemination. On June 6, 2019, the Court entered an order pursuant to which plaintiffs submitted their motion to approve attorneys’ fees and expenses on July 19, 2019; requiring filing of any objections to or opt-outs from the proposed putative class settlement by August 9, 2019; and setting September 6, 2019 for its hearing on putative class plaintiffs’ motion for class certification and settlement approval. The hearing took place, and on September 12, 2019, the Court entered a decision and order denying both motions. Xerox will vigorously defend these lawsuits to the extent that the proceedings continue as to Xerox. At this time, however, it is premature to make any conclusion regarding the probability of incurring material losses in these lawsuits. Should developments cause a change in our determination as to an unfavorable outcome, or result in a final adverse judgment or settlement, there could be a material adverse effect on our results of operations, cash flows and financial position in the period in which such change in determination, judgment, or settlement occurs. 2. Ribbe v. Jacobson, et al.: On April 11, 2019, Carmen Ribbe filed a putative derivative and class action stockholder complaint in the Supreme Court of the State of New York for New York County, naming as defendants Xerox, current Board members Gregory Q. Brown, Joseph J. Echevarria, Cheryl Gordon Krongard, Sara Martinez Tucker, Keith Cozza, Giovanni G. Visentin, Jonathan Christodoro, Nicholas Graziano, and A. Scott Letier, and former Board members Jeffrey Jacobson, William Curt Hunter, Robert J. Keegan, Charles Prince, Ann N. Reese, and Stephen H. Rusckowski. Plaintiff previously filed a putative shareholder derivative lawsuit on May 24, 2018 against certain of these defendants, as well as others, in the same court; that lawsuit was dismissed without prejudice on December 6, 2018. The new complaint includes putative derivative claims on behalf of Xerox for breach of fiduciary duty against the members of the Xerox Board who approved Xerox’s entry into agreements to settle the Deason and In re Xerox Corporation Consolidated Shareholder Litigation (“XCCSL”) actions (described above). Plaintiff alleges that the settlements ceded control of the Board and the Company to Darwin Deason and Carl C. Icahn without a vote by, or compensation to, other Xerox stockholders; improperly provided certain benefits and releases to the resigning and continuing directors; and subjected Xerox to potential breach of contract damages in an action by Fuji relating to Xerox’s termination of the proposed Fuji Transaction. Plaintiff also alleges that the current Board members breached their fiduciary duties by allegedly rejecting plaintiff’s January 14, 2019 shareholder demand on the Board to remedy harms arising from entry into the Deason and XCCSL settlements. The new complaint further includes direct claims for breach of fiduciary duty on behalf of a putative class of current Xerox stockholders other than Mr. Deason, Mr. Icahn, and their affiliated entities (the “Ribbe Class”) against the defendants for causing Xerox to enter into the Deason and XCCSL settlements, which plaintiff alleges perpetuated control of Xerox by Mr. Icahn and Mr. Deason and denied the voting franchise of Xerox shareholders. Among other things, plaintiff seeks damages in an unspecified amount for the alleged fiduciary breaches in favor of Xerox against defendants jointly and severally; rescission or reformation of the Deason and XCCSL settlements; restitution of funds paid to the resigning directors under the Deason settlement; an injunction against defendants’ engaging in the alleged wrongful practices and equitable relief affording the putative Ribbe Class the ability to determine the composition of the Board; costs and attorneys’ fees; and other further relief as the Court may deem proper. Defendants accepted service of the complaint as of May 16, 2019. On June 4, 2019, the Court entered an order setting a briefing schedule for defendants’ motions to dismiss the complaint. On July 12, 2019, plaintiff filed a motion to preclude defendants from referencing in their motions to dismiss the formation of, or work by, the committee of the Board established to investigate plaintiff’s shareholder demand. On July 18, 2019, the Court denied plaintiff’s motion and adjourned sine die the deadline by which defendants must file any motions to dismiss the complaint. Xerox will vigorously defend against this matter. At this time, it is premature to make any conclusion regarding the probability of incurring material losses in this litigation. Should developments cause a change in our determination as to an unfavorable outcome, or result in a final adverse judgment or settlement, there could be a material adverse effect on our results of operations, cash flows and financial position in the period in which such change in determination, judgment, or settlement occurs. 3. Fujifilm Holdings Corp. v. Xerox Corporation: On June 18, 2018, Fujifilm filed a complaint against Xerox in the U.S. District Court for the Southern District of New York, relating to the Fuji Transaction agreements. The complaint alleges that Xerox: (1) willfully breached the Fuji Transaction agreements by purporting to terminate them to appease Messrs. Icahn and Deason and using as a pretext issues with Fujifilm’s untimely submitted financials, and by settling Deason I and Deason II without notice to or consent by Fujifilm; (2) willfully breached the implied covenant of good faith and fair dealing by failing to support and use best efforts to conclude the Fuji Transaction, thus depriving Fujifilm of the benefit of its bargain; and (3) effected a change in Xerox’s recommendation regarding the Fuji Transaction, entitling Fujifilm to terminate the Fuji Transaction agreements and to receive from Xerox a $183 termination fee. Fujifilm seeks a judgment for damages to be determined at trial in an amount in excess of $1.0 billion plus punitive damages; a declaration regarding the alleged change in recommendation such that Fujifilm may terminate the transaction and Xerox must pay the $183 termination fee and other remedies; costs and attorneys’ fees; and other relief the court may deem appropriate. At a conference on September 24, 2018, the Court stayed all discovery pending resolution of Xerox’s motion to dismiss. Xerox filed its motion to dismiss on October 1, 2018. On February 22, 2019, following oral argument, the Court denied the motion to dismiss. On March 12, 2019, the Court entered a scheduling order setting various case deadlines. Xerox filed its answer denying the claims on March 15, 2019. Discovery has commenced and is ongoing. On June 24, 2019 and August 12, 2019, the Court entered stipulated revised scheduling orders extending certain case deadlines. Xerox believes the lawsuit is meritless and will vigorously defend it. At this time, however, it is premature to make any conclusion regarding the probability of incurring material losses in this litigation. Should developments cause a change in our determination as to an unfavorable outcome, or result in a final adverse judgment or settlement, there could be a material adverse effect on our results of operations, cash flows and financial position in the period in which such change in determination, judgment, or settlement occurs. All Other Pending Litigation: 1. State of Texas v. Xerox Corporation, Xerox State Healthcare, LLC, and ACS State Healthcare, LLC: On May 9, 2014, the State of Texas, via the Texas Office of Attorney General (the “State”), filed a lawsuit in the 53rd Judicial District Court of Travis County, Texas. The lawsuit alleged that Xerox Corporation, Xerox State Healthcare, LLC and ACS State Healthcare (collectively “the Defendants”) violated the Texas Medicaid Fraud Prevention Act in the administration of ACS State Healthcare’s contract with the Texas Department of Health and Human Services (“HHSC”). Xerox Corporation provided a guaranty of contractual performance with respect to the ACS State Healthcare contract. The State alleged that the Defendants made false representations of material facts regarding the processes, procedures, implementation and results regarding the prior authorization of orthodontic claims. The State sought recovery of actual damages, two times the amount of any overpayments made as a result of alleged unlawful acts, civil penalties, pre- and post-judgment interest and all costs and attorneys’ fees. The State referenced the amount in controversy as exceeding hundreds of millions of dollars. The Defendants filed their Answer in June 2014 denying all allegations. In August 2017, the State of Texas filed a Second Amended Petition, which made substantially similar allegations and sought similar remedies as the original lawsuit. On October 23, 2017, Xerox Corporation filed a Motion for Summary Judgment seeking judgment in Xerox's favor on all claims against it. On July 2, 2018, the Court denied the State of Texas’ motion for a determination of the adequacy of its pleadings as to Xerox or in the alternative, seeking leave to amend its petition to bring additional claims against Xerox. On February 15, 2019, The State filed, without opposition, its Third Amended Petition against Conduent Business Services, LLC (f/k/a Xerox Business Services, LLC), Conduent State Healthcare, LLC (f/k/a Xerox State Healthcare, LLC, f/k/a ACS State Healthcare, LLC) and Conduent Incorporated (collectively, the “Conduent Entities”) and Xerox Corporation to add claims for breach of contract and negligence. On February 18, 2019, Xerox and the Conduent Entities entered into a Settlement Agreement and Release (“Agreement”) with the State and the HHSC to settle all claims arising from alleged failures by the defendants or Texas Medicaid & Healthcare Partnership to comply with obligations under two contracts between Conduent State Healthcare, LLC and the HHSC entered into in 2003 and 2010. Xerox is not required to make any payment under the Agreement. Pursuant to the terms of the Agreement, the Conduent Entities will pay the State $235.9 payable in installments through no later than July 31, 2021. Also pursuant to the Agreement, all proceedings in the lawsuit were suspended, as confirmed by an order issued by the Court on February 19, 2019, and the State and the HHSC agreed to dismiss the lawsuit with prejudice and release all of the defendants from all of the State’s claims after the settlement amount has been paid in full. No defendant made any admission of liability or wrongdoing in entering into the Agreement. At the Conduent Entities’ request, the parties executed an amendment to the Agreement providing for accelerated payment terms and for one or more Conduent Entity letters of credit to facilitate earlier dismissal of the case. On August 19, 2019, the Court entered an order dismissing with prejudice the claims against Xerox and Conduent Entities. 2. Oklahoma Firefighters Pension and Retirement System v. Xerox Corporation, Ursula M. Burns, Luca Maestri, Kathryn A. Mikells, Lynn R. Blodgett, Robert K. Zapfel, David H. Bywater and Mary Scanlon: On October 21, 2016, the Oklahoma Firefighters Pension and Retirement System (“plaintiff”) filed a purported securities class action complaint against Xerox Corporation, Ursula Burns, Luca Maestri, Kathryn Mikells, Lynn Blodgett and Robert Zapfel (collectively, “defendants”) in the U.S. District Court for the Southern District of New York on behalf of the plaintiff and certain purchasers or acquirers of Xerox common stock. The complaint alleged that defendants made false and misleading statements, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5, relating to the operations and prospects of Xerox’s Health Enterprise business. Plaintiff sought, among other things, unspecified monetary damages and attorneys’ fees. Other, similar lawsuits may follow. On December 28, 2016, the Court entered a stipulated order setting out a schedule for amendment of the complaint and for defendants’ response to that complaint following the Court’s appointment of lead plaintiff under the Private Securities Litigation Reform Act. On February 28, 2017, the Court issued an opinion and order appointing the Arkansas Public Employees Retirement System ("APERS") as lead plaintiff. On May 1, 2017, APERS filed an amended complaint, alleging substantially similar claims and seeking substantially similar relief, but adding David Bywater and Mary Scanlon as defendants. On June 30, 2017, defendants moved to dismiss the amended complaint, and the motions were fully briefed on October 13, 2017. On March 20, 2018, the Court entered an opinion and order granting the motions, and on March 23, 2018, the Court entered a judgment of dismissal and closed the case. On April 20, 2018, plaintiffs filed a notice of appeal in the U.S. Court of Appeals for the Second Circuit, and the appeal was fully briefed as of November 28, 2018. The Second Circuit heard oral argument on May 31, 2019. On June 6, 2019, the Second Circuit entered a summary order affirming the district court’s judgment dismissing the complaint. Plaintiff's time in which to request review by the U.S. Supreme Court expired on September 4, 2019; no such request was filed. Guarantees We have issued or provided approximately $297 of guarantees as of September 30, 2019 in the form of letters of credit or surety bonds issued to i) support certain insurance programs; ii) support our obligations related to the Brazil contingencies; and iii) support certain contracts, primarily with public sector customers, which require us to provide a surety bond as a guarantee of our performance of contractual obligations. In general, we would only be liable for the amount of these guarantees in the event we defaulted in performing our obligations under each contract; the probability of which we believe is remote. We believe that our capacity in the surety markets as well as under various credit arrangements (including our Credit Facility) is sufficient to allow us to respond to future requests for proposals that require such credit support. Indemnifications We have indemnified, subject to certain deductibles and limits, the purchasers of businesses or divested assets for the occurrence of specified events under certain of our divestiture agreements. Where appropriate, an obligation for such indemnifications is recorded as a liability. Since the obligated amounts of these types of indemnifications are often not explicitly stated and/or are contingent on the occurrence of future events, the overall maximum amount of the obligation under such indemnifications cannot be reasonably estimated. Other than obligations recorded as liabilities at the time of divestiture, we have not historically made significant payments for these indemnifications. Additionally, under certain of our acquisition agreements, we have provided for additional consideration to be paid to the sellers if established financial targets are achieved post-closing. We have recognized liabilities for these contingent obligations based on an estimate of the fair value of these contingencies at the time of acquisition. Contingent obligations related to indemnifications arising from our divestitures and contingent consideration provided for by our acquisitions are not expected to be material to our financial position, results of operations or cash flows. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On November 5, 2019, Xerox Holdings Corporation (the “Company”) announced that it had restructured its relationship with FUJIFILM Holdings Corporation (“FH”) through a series of agreements intended to simplify and set a new course for the companies’ strategic sourcing relationship going forward. As further described below, the Company entered into definitive agreements relating, among other things, to: sales to indirect subsidiaries of FH of the Company’s indirect 25% equity interest in Fuji Xerox Co., Ltd., a Japanese company (“FX”), and of the Company’s indirect 51% partnership interest in Xerox International Partners (“XIP”); modified sourcing terms for future product programs; the grant of a trademark license to enable FX to transition to a new brand while compensating the Company for continued use of its name; the grant of an IP license to allow FX to provide certain OEM products to certain named parties on a worldwide basis in exchange for a fixed royalty; and dismissal of a pending lawsuit FH filed against Xerox Corporation (“XC”). Total proceeds to Xerox from the transactions will include accrued but unpaid dividends through the date of the closings and are expected to be approximately $2.3 billion (approximately $2.2 billion for our 25% share in FX and $100 for the sale of XIP and the OEM license). Xerox expects to use the proceeds opportunistically to pursue accretive M&A in core and adjacent industries, return of capital to shareholders and pay down its $554 Senior Notes due December 2019. Sale of FX Interest Pursuant to the Stock Purchase Agreement, dated as of November 5, 2019 (the “Stock Purchase Agreement”), among XC, Xerox Limited (“XL”), FH, FUJIFILM Asia Pacific Pte. Ltd. (“FFAP”) and FX, among other things, FX will conduct a buyback of its shares from both FH and XL on a pro rata basis, pursuant to which XL will receive $770 (the “Share Buyback”). Following the Share Buyback, FFAP will purchase all of the outstanding equity interests of FX owned by XL (the “FFAP Purchase” and, together with the Share Buyback, the “FX Sale Transaction”), for a purchase price of $1,430 (the “FFAP Purchase Price”), which amount shall be increased by the amount of the dividends attributable to the period from October 1, 2019 to the date on which the FFAP Purchase occurs, calculated in accordance with the terms of the Stock Purchase Agreement. Subject to the satisfaction or waiver of the conditions set forth in the Stock Purchase Agreement and on the terms set forth therein, the closing of the FX Sale Transaction will occur on November 8, 2019; provided, however, that if FH has not received early termination of the waiting period of the pre-transaction notification ( jizen-todokede ) required under the Foreign Exchange and Foreign Trade Act of Japan (the “FEFTA Approval”) on or before November 5, 2019, then the Share Buyback will occur on November 8, 2019 and the FFAP Purchase will occur within three ( 3 ) business days following receipt of the FEFTA Approval. If the FEFTA Approval has not been received by March 24, 2020, then FH will consummate the FFAP Purchase on March 30, 2020, by either (i) replacing FFAP with another entity as the purchaser in the FFAP Purchase so the FEFTA Approval is no longer required in connection with the FFAP Purchase or (ii) implementing another transaction structure that allows XL to sell all of its remaining equity interest in FX and receive the FFAP Purchase Price. The closing of the FX Sale Transaction is conditioned upon the absence of any legal requirement or order preventing or making unlawful the transactions contemplated thereby, other than the FEFTA Approval. Moreover, each party’s obligation to consummate such closing is conditioned upon the accuracy of the other party’s representations and warranties (generally subject to a Material Adverse Effect (as defined in the Stock Purchase Agreement) qualifier). The Stock Purchase Agreement contains customary representations and warranties regarding the parties thereto, customary covenants, indemnification provisions and other provisions customary for transactions of this nature. The foregoing description of the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Stock Purchase Agreement. Amendment No. 1 to Technology Agreement In connection with the FX Sale Transaction and concurrently with the execution and delivery of the Stock Purchase Agreement, FX and XC entered into Amendment 1, dated as of November 5, 2019 (the “TA Amendment”), to that certain Technology Agreement (the “TA”), dated as of April 1, 2006, by and between FX and XC, relating to licenses granted to FX by XC for XC’s trademarks and certain non-marking Document Processing Activities. The TA Amendment, among other things, (i) extends to two ( 2 ) years following the expiration of the TA (the “Transition Period”) the time period by which FX is required to transition away from the use of Xerox trademarks upon expiration of the TA, (ii) grants FX limited licenses to use Xerox trademarks for the Transition Period, subject to certain quality control standards and for a royalty in the amount of $100 , payable to XC within three ( 3 ) business days from the first date of the Transition Period, and (iii) amends FX’s licenses for certain non-marking Document Processing Activities to become worldwide, royalty-free, and non-exclusive upon the expiration of the TA. The TA Amendment will become effective concurrently with the FFAP Purchase unless the Share Buyback has occurred but the FEFTA Approval has not been received by November 24, 2019, in which case the TA Amendment will become effective as of the later of (i) November 27, 2019 or (ii) if such effectiveness is prohibited by any legal requirement or order, three ( 3 ) business days following the elimination of any such prohibition (such time, as to any Ancillary Agreement (as defined below), the “Ancillary Agreements Effectiveness”). The foregoing description of the TA Amendment does not purport to be complete and is qualified in its entirety by reference to the TA Amendment. Amendment No. 1 to Master Program Agreement In connection with the FX Sale Transaction and concurrently with the execution and delivery of the Stock Purchase Agreement, FX and XC entered into Amendment No. 1, dated as of November 5, 2019 (the “MPA Amendment”), to that certain Master Program Agreement (the “MPA”), dated as of September 9, 2013, relating to the supply arrangement from FX to XC for xerographic document products. The MPA Amendment removes from the MPA termination provisions that are triggered by (i) a change in the composition of the board of directors of XC, (ii) a sale of substantially all assets of XC or (iii) any other change-in-control type scenario related to XC, and extends the effective term of certain product specific supply agreements governing existing product programs. In addition, the MPA Amendment provides, among other things, that if the TA expires on March 31, 2021 solely due to non-renewal by FX or XC, then FX will be restricted for an agreed period from selling, licensing, leasing, or distributing Graphic Communications Products in certain jurisdictions (collectively, the “Limited Exclusive Territory”), except through XC, (ii) XC and its subsidiaries will be restricted from manufacturing, purchasing, or procuring Graphic Communications Products that are being sold or distributed in the Limited Exclusive Territory, unless procured through FX (excluding Graphic Communications Products that are not substantially similar in terms of specifications and availability, taken as a whole, as Graphic Communications Products designed and manufactured by FX) and (iii) XC will be appointed as FX’s nonexclusive reseller and distributor of its Graphic Communications Products outside the Limited Exclusive Territory. The MPA Amendment also includes provisions governing the entry into and/or termination of certain future documents relating to the MPA. The MPA Amendment will become effective at the time of the Ancillary Agreements Effectiveness. The foregoing description of the MPA Amendment does not purport to be complete and is qualified in its entirety by reference to the MPA Amendment. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Standard Updates to be Adopted and Accounting Standard Updates Adopted | Accounting Standard Updates to be Adopted: Financial Instruments - Credit Losses In June 2016, the FASB issued ASU 2016-13 , Financial Instruments Credit Losses - Measurement of Credit Losses on Financial Instruments, with additional updates and amendments being issued in 2018 and 2019. This update requires measurement and recognition of expected credit losses for financial assets on an expected loss model rather than an incurred loss model. The update impacts financial assets including net investment in leases that are not accounted for at fair value through Net Income. This update is effective for our fiscal year beginning January 1, 2020. We continue to evaluate the impact of the adoption of ASU 2016-13, which is expected to primarily impact the estimation of our Allowance for doubtful accounts for Accounts Receivables and Finance Receivables. We currently do not expect the new guidance to have a material impact on our financial condition, results of operations or cash flows however, the impact will be dependent on future economic conditions. Intangibles - Internal-Use Software In August 2018, the FASB issued ASU 2018-15 , Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The update provides criteria for determining which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The capitalized implementation costs are required to be expensed over the term of the hosting arrangement. The update also clarifies the presentation requirements for reporting such costs in the entity’s financial statements. This update is effective for our fiscal year beginning January 1, 2020. We continue to evaluate the impact of the adoption of ASU 2018-15 on our Consolidated Financial Statements. Since we currently capitalize these implementation costs, we do not currently expect the new guidance to have a material impact on our financial condition, results of operations or cash flows. Accounting Standard Updates Adopted in 2019: Leases On January 1, 2019, we adopted ASU 2016-02 , Leases (ASC Topic 842). This update, as well as additional amendments and targeted improvements issued in 2018 and early 2019, supersedes existing lease accounting guidance found under ASC 840, Leases (“ASC 840”) and requires the recognition of right-to-use assets and lease obligations by lessees for those leases originally classified as operating leases under prior lease guidance. Effective with the adoption, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition. Short-term leases with a term of 12 months or less are not required to be recognized. The update also requires qualitative and quantitative disclosure of key information regarding the amount, timing and uncertainty of cash flows arising from leasing arrangements to increase transparency and comparability among companies. The accounting for lessors does not fundamentally change with this update except for changes to conform and align guidance to the lessee guidance, as well as to the revenue recognition guidance in ASU 2014-09. Some of these conforming changes, such as those related to the definition of lease term and minimum lease payments, resulted in certain lease arrangements, that would have been previously accounted for as operating leases, to be classified and accounted for as sales-type leases with a corresponding up-front recognition of equipment sales revenue. Upon adoption, we applied the transition option, whereby prior comparative periods are not retrospectively presented in the Condensed Consolidated Financial Statements. We also elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and the lessee practical expedient to combine lease and non-lease components for certain asset classes (real estate lease arrangements for offices and warehouses). Additionally, we made a policy election to not recognize right-of-use assets and lease liabilities for short-term leases for all asset classes. We elected the package of practical expedients from both the Lessee and Lessor prospective, to the extent applicable. Lessee accounting - the adoption of this update resulted in an increase to assets and related liabilities of approximately $385 (approximately $440 undiscounted) primarily related to leases of facilities. Lessor accounting - the adoption of this update resulted in an increase to equipment sales for the three and nine months ended September 30, 2019 of approximately $9 and $20 , respectively, in 2019 as compared to the prior year periods. Refer to Note 3 - Adoption of New Leasing Standard - Lessee and Note 4 - Adoption of New Leasing Standard - Lessor for additional transitional disclosures related to the adoption of this standard. Financial Instruments - Derivatives In August 2017, the FASB issued ASU 2017-12 , Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, with additional updates and amendments being issued in 2018 and 2019 . The amendments in this update expand and refine hedge accounting for both financial and non-financial risk components, align the recognition and presentation of the effects of hedging instruments with the same income statement line item that the hedged item is reported and include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. We adopted ASU 2017-12 effective for our fiscal year beginning January 1, 2019, and it did not have a material impact on our financial condition, results of operations or cash flows. Income Taxes In February 2018, the FASB issued ASU 2018-02 , Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . We adopted ASU 2018-02 effective for our fiscal year beginning January 1, 2019 and upon adoption reclassified $127 from Accumulated other comprehensive loss (AOCL) to Retained earnings related to the stranded tax effects resulting from the Tax Cuts and Jobs Act ("Tax Act") enacted in December 2017. The reclassification was primarily related to the stranded tax effects associated with amounts in AOCL from our retirement-related benefit plans. Accordingly, the adoption of this update eliminated the stranded tax effects resulting from the Tax Act. However, because the update only relates to the reclassification of the income tax effects of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in Income from continuing operations is not affected. Other Updates In 2018 , the FASB also issued the following ASUs, which impact the Company but did not have or are not expected to have a material impact on our financial condition, results of operations or cash flows upon adoption. Those updates are as follows: • Collaborative Arrangements: ASU 2018-18 , (Topic 808) Clarifying the Interaction between Topic 808 and Topic 606. This update is effective for our fiscal year beginning January 1, 2020. • Compensation - Retirement Benefits - Defined Benefit Plans - General: ASU 2018-14 , (Topic 715-20) Changes to the Disclosure Requirements for Defined Benefit Plans. This update is effective for our fiscal year beginning January 1, 2020. • Fair Value Measurement: ASU 2018-13 , (Topic 820) Disclosure Framework. This update is effective for our fiscal year beginning January 1, 2020. |
Lessee, Leases | Lessee Summary: We determine at inception whether an arrangement is a lease. Our leases do not include assets of a specialized nature, or the transfer of ownership at the end of the lease, and the exercise of end-of-lease purchase options, which are primarily in our equipment leases, is not reasonably assured at lease inception. Accordingly, the two primary criteria we use to classify transactions as operating or finance leases are: (i) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the asset, and (ii) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the asset at the inception of the lease. Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We also assess arrangements for goods or services to determine if the arrangement contains a lease at its inception. This assessment first considers whether there is an implicitly or explicitly identified asset in the arrangement and then whether there is a right to control the use of the asset. If there is an embedded lease within a contract, the Company determines the classification of the lease at the lease inception date consistent with standalone leases of assets. Operating leases are included in Other long-term assets, Accrued expenses and other current liabilities, and Other long-term liabilities in our Condensed Consolidated Balance Sheets. Finance leases are included in Land, buildings and equipment, net, Accrued expenses and other current liabilities, and Other long-term liabilities in our Condensed Consolidated Balance Sheets. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for most of our leases is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that we would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. The rate is dependent on several factors, including the lease term and currency of the lease payments. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as we do not have reasonable certainty at lease inception that these options will be exercised. We generally consider the economic life of our operating lease ROU assets to be comparable to the useful life of similar owned assets. We have elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Our leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components. These components are accounted for separately for vehicle and equipment leases. We account for the lease and non-lease components as a single lease component for real estate leases of offices and warehouses. We review the impairment of our ROU assets consistent with the approach applied for our other long-lived assets. We review the recoverability of our long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. We have elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows. Operating Leases We have operating leases for real estate and vehicles in our domestic and international operations and for certain equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms of up to ten years |
Revenue Recognition, Leases | Lessor Summary: The following represent updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842. Bundled Lease Arrangements: A portion of our direct sales of equipment to end customers are made through bundled lease arrangements which typically include equipment, services (maintenance and managed services) and financing components where the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which include supplies. Consistent with the guidance in ASC 842 and ASC 606, regarding the allocation of fixed and variable consideration, we only consider the fixed payments for purposes of allocation to the lease elements of the contract. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed lease payments that the customer is obligated to make over the lease term. Amounts allocated to the equipment and financing elements are then subjected to the accounting estimates noted below under Leases to ensure the values reflect standalone selling prices. The remainder of any fixed payments, as well as the variable payments, are allocated to non-lease elements because the variable consideration for incremental page volume or usage is considered attributable to the delivery of those elements. The consideration for the non-lease elements is not dependent on the consideration for equipment and vice versa and the consideration for the equipment and services is priced at the appropriate standalone values; therefore, the relative standalone selling price allocation method is not necessary. The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series with delivery being measured as the usage billed to the customer. Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for Maintenance and Services agreements. Leases: The two primary accounting provisions we use to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75% ); and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90% ). Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized in a manner consistent with Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. We consider the economic life of most of our products to be five years , since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years . There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. We perform an analysis of the stand-alone selling price of equipment based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices reflects stand-alone value. Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above. Additional Lease Payments: Certain leases may require the customer to pay property taxes and insurance on the equipment. In these instances, the amounts for property taxes and insurance that we invoice to customers and pay to third parties are considered variable payments and are recorded as other revenues and other cost of revenues, respectively. Amounts related to property taxes and insurance are not material. We exclude from variable payments all lessor costs that are explicitly required to be paid directly by a lessee on behalf of the lessor to a third party. Presentation: Revenue from sales-type leases is presented on a gross basis when the company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs. |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Change in Presentation | Prior year amounts were also revised as follows to conform to the 2019 presentation. Three Months Ended September 30, 2018 As Reported Change As Revised Sales $ 943 $ (87 ) $ 856 Services, maintenance and rentals 1,344 87 1,431 Cost of sales $ 570 $ (31 ) $ 539 Cost of services, maintenance and rentals 807 31 838 Nine Months Ended September 30, 2018 As Reported Change As Revised Sales $ 2,893 $ (265 ) $ 2,628 Services, maintenance and rentals 4,200 265 4,465 Cost of sales $ 1,755 $ (91 ) $ 1,664 Cost of services, maintenance and rentals 2,529 91 2,620 |
Adoption of New Leasing Stand_3
Adoption of New Leasing Standard - Lessee (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of components of lease expense | The components of lease expense are as follows: Three Months Ended Nine Months Ended September 30, 2019 Operating lease expense $ 31 $ 97 Short-term lease expense 6 16 Variable lease expense (1) 12 37 Sublease income — (1 ) Total Lease expense $ 49 $ 149 _____________ (1) Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs as well as taxes and insurance. |
Schedule of operating leases assets and liabilities | Operating leases ROU assets, net and operating lease liabilities were reported in the Condensed Consolidated Balance Sheets as follows: September 30, Other long-term assets $ 297 Accrued expenses and other current liabilities $ 88 Other long-term liabilities 235 Total Operating lease liabilities $ 323 |
Schedule of supplemental information related to operating leases | Supplemental information related to operating leases is as follows: Three Months Ended Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows $ 31 $ 95 Right-of-use assets obtained in exchange for new lease liabilities (1) 5 28 Weighted-average remaining lease term 4 years Weighted-average discount rate 5.63 % _____________ (1) Includes the impact of new leases as well as remeasurements and modifications to existing leases. |
Schedule of maturities and additional information related to operating lease liabilities | Maturities and additional information related to operating lease liabilities are as follows: September 30, 2019 (1) $ 30 2020 105 2021 80 2022 66 2023 49 Thereafter 35 Total Lease payments 365 Less: Imputed interest 42 Total Operating lease liabilities $ 323 _____________ (1) Represents the future minimum operating lease payments expected to be made over the remaining balance of the year. |
Schedule of future minimum rental payments for operating leases | Future minimum operating lease commitments that have initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows: December 31, 2019 $ 114 2020 88 2021 64 2022 50 2023 36 Thereafter 27 Total Operating lease commitments $ 379 |
Adoption of New Leasing Stand_4
Adoption of New Leasing Standard - Lessor (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Components of lease income | The components of lease income are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Lease income - sales type $ 200 $ 175 $ 484 $ 507 Interest income on lease receivables 60 65 184 204 Lease income - operating leases (1) 99 109 303 331 Variable lease income 25 28 80 89 Total Lease income $ 384 $ 377 $ 1,051 $ 1,131 _____________ (1) Operating lease income for the nine months ended September 30, 2019 and 2018 exclude service revenues of $30 and $28 |
Components of lease income | The components of lease income are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Lease income - sales type $ 200 $ 175 $ 484 $ 507 Interest income on lease receivables 60 65 184 204 Lease income - operating leases (1) 99 109 303 331 Variable lease income 25 28 80 89 Total Lease income $ 384 $ 377 $ 1,051 $ 1,131 _____________ (1) Operating lease income for the nine months ended September 30, 2019 and 2018 exclude service revenues of $30 and $28 |
Components of lease income | The components of lease income are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Lease income - sales type $ 200 $ 175 $ 484 $ 507 Interest income on lease receivables 60 65 184 204 Lease income - operating leases (1) 99 109 303 331 Variable lease income 25 28 80 89 Total Lease income $ 384 $ 377 $ 1,051 $ 1,131 _____________ (1) Operating lease income for the nine months ended September 30, 2019 and 2018 exclude service revenues of $30 and $28 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues Disaggregated by Primary Geographic Markets, Major Products Lines, and Sales Channels | Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Primary geographical markets (1) : United States $ 1,364 $ 1,414 $ 4,028 $ 4,307 Europe 521 587 1,705 1,923 Canada 123 133 377 424 Other 192 218 585 643 Total Revenues $ 2,200 $ 2,352 $ 6,695 $ 7,297 Major product and services lines: Equipment $ 494 $ 511 $ 1,446 $ 1,571 Supplies, paper and other sales 310 345 933 1,057 Maintenance agreements (2) 568 618 1,775 1,958 Service arrangements (3) 611 649 1,883 2,007 Rental and other 157 164 474 500 Financing 60 65 184 204 Total Revenues (4) $ 2,200 $ 2,352 $ 6,695 $ 7,297 Sales channels: Direct equipment lease (5) $ 200 $ 175 $ 484 $ 507 Distributors & resellers (6) 301 324 949 1,043 Customer direct 303 357 946 1,078 Total Sales (4) $ 804 $ 856 $ 2,379 $ 2,628 _____________ (1) Geographic area data is based upon the location of the subsidiary reporting the revenue. (2) Includes revenues from maintenance agreements on sold equipment as well as revenues associated with service agreements sold through our channel partners as Xerox Partner Print Services (XPPS). (3) Primarily includes revenues from our Managed Services offerings (formerly our Managed Document Services arrangements). Also includes revenues from embedded operating leases, which were not significant. (4) Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation - Change in Presentation, for additional information. (5) Primarily reflects direct sales through bundled lease arrangements. (6) Primarily reflects sales through our two-tier distribution channels. |
Incremental Direct Costs of Obtaining a Contract | Incremental direct costs are as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Incremental direct costs of obtaining a contract $ 20 $ 22 $ 56 $ 62 Amortization of incremental direct costs 23 25 66 72 |
Supplementary Financial Infor_2
Supplementary Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Financial Information [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Cash, cash equivalents and restricted cash amounts were as follows: September 30, December 31, Cash and cash equivalents $ 922 $ 1,084 Restricted cash Litigation deposits in Brazil 57 61 Other restricted cash — 3 Total Restricted cash 57 64 Cash, cash equivalents and restricted cash $ 979 $ 1,148 |
Cash, Cash Equivalents and Restricted Cash | Cash, cash equivalents and restricted cash amounts were as follows: September 30, December 31, Cash and cash equivalents $ 922 $ 1,084 Restricted cash Litigation deposits in Brazil 57 61 Other restricted cash — 3 Total Restricted cash 57 64 Cash, cash equivalents and restricted cash $ 979 $ 1,148 |
Restricted Cash Balance Sheet Location | Restricted cash was reported in the Condensed Consolidated Balance Sheets as follows: September 30, December 31, Other current assets $ — $ 1 Other long-term assets 57 63 Total Restricted cash $ 57 $ 64 |
Supplemental Cash Flow Information | Summarized cash flow information is as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Provision for receivables $ 13 $ 11 $ 40 $ 37 Provision for inventory 3 5 18 19 Provision for product warranty 3 3 10 10 Depreciation of buildings and equipment 24 30 77 118 Depreciation and obsolescence of equipment on operating leases 56 62 172 189 Amortization of internal use software 15 18 48 55 Amortization of acquired intangible assets 9 12 35 36 Amortization of customer contract costs (1) 24 25 70 75 Cost of additions to land, buildings and equipment 11 15 30 41 Cost of additions to internal use software 6 8 18 32 Common stock dividends - Xerox Holdings 57 65 172 193 Preferred stock dividends - Xerox Holdings 4 4 11 11 Payments to noncontrolling interests 1 1 14 14 Repurchases related to stock-based compensation - Xerox Holdings 10 5 20 7 _____________ (1) Amortization of customer contract costs are reported in (Increase) decrease in other current and long-term assets in the Condensed Consolidated Statements of Cash Flows. Refer to Note 5 - Revenue for additional information on contract costs. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Schedule of accounts receivable, net | Accounts receivable, net were as follows: September 30, December 31, Invoiced $ 939 $ 999 Accrued 305 333 Allowance for doubtful accounts (56 ) (56 ) Accounts receivable, net $ 1,188 $ 1,276 |
Schedule of accounts receivables sales | Accounts receivable sales were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Accounts receivable sales (1) $ 67 $ 66 $ 265 $ 297 Loss on sales of accounts receivable 1 1 2 2 __________________________ (1) Customers may also enter into structured-payable arrangements that require us to sell our receivables from that customer to a third-party financial institution, which then makes payments to us to settle the customer's receivable. In these instances, we ensure the sale of the receivables are bankruptcy-remote and the payment made to us is without recourse. The activity associated with these arrangements is not reflected in this disclosure, as payments under these arrangements have not been material and these are customer directed arrangements. |
Finance Receivables, Net (Table
Finance Receivables, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Finance Receivables | Finance receivables, net were as follows: September 30, December 31, Gross receivables $ 3,795 $ 4,003 Unearned income (414 ) (439 ) Subtotal 3,381 3,564 Residual values — — Allowance for doubtful accounts (93 ) (92 ) Finance receivables, net 3,288 3,472 Less: Billed portion of finance receivables, net 106 105 Less: Current portion of finance receivables not billed, net 1,145 1,218 Finance receivables due after one year, net $ 2,037 $ 2,149 |
Schedule of Financing Receivables, Minimum Payments | A summary of future contractual maturities of our gross finance receivables, including those previously billed is as follows: September 30, December 31, 12 Months (1) $ 1,471 $ 1,543 24 Months 1,044 1,108 36 Months 705 755 48 Months 406 425 60 Months 152 158 Thereafter 17 14 Total $ 3,795 $ 4,003 __________________ (1) Includes amounts previously billed of $108 and $107 as of September 30, 2019 and December 31, 2018 , respectively. |
Allowance for Credit Losses on Financing Receivables | The allowance for doubtful finance receivables as well as the related investment in finance receivables were as follows: Allowance for Credit Losses: United States Canada Europe Other (1) Total Balance at December 31, 2018 $ 53 $ 12 $ 25 $ 2 $ 92 Provision 4 1 4 — 9 Charge-offs (4 ) (1 ) (3 ) — (8 ) Recoveries and other (2) — — — — — Balance at March 31, 2019 $ 53 $ 12 $ 26 $ 2 $ 93 Provision 4 1 3 — 8 Charge-offs (5 ) (3 ) (3 ) — (11 ) Recoveries and other (2) 1 2 — — 3 Balance at June 30, 2019 $ 53 $ 12 $ 26 $ 2 $ 93 Provision 6 — 2 — 8 Charge-offs (5 ) (1 ) (3 ) — (9 ) Recoveries and other (2) 1 — — — 1 Balance at September 30, 2019 $ 55 $ 11 $ 25 $ 2 $ 93 Finance receivables as of September 30, 2019 collectively evaluated for impairment (3) $ 1,900 $ 318 $ 1,120 $ 43 $ 3,381 Balance at December 31, 2017 $ 56 $ 15 $ 35 $ 2 $ 108 Provision 5 — 4 — 9 Charge-offs (5 ) (1 ) (4 ) — (10 ) Recoveries and other (2) — — 1 — 1 Balance at March 31, 2018 $ 56 $ 14 $ 36 $ 2 $ 108 Provision 4 1 4 — 9 Charge-offs (4 ) (1 ) (3 ) — (8 ) Recoveries and other (2) — — (2 ) — (2 ) Balance at June 30, 2018 $ 56 $ 14 $ 35 $ 2 $ 107 Provision 2 — 4 — 6 Charge-offs (2 ) (2 ) (4 ) — (8 ) Recoveries and other (2) 1 1 — — 2 Balance at September 30, 2018 $ 57 $ 13 $ 35 $ 2 $ 107 Finance receivables as of September 30, 2018 collectively evaluated for impairment (3)(4) $ 1,960 $ 352 $ 1,242 $ 47 $ 3,601 __________________ (1) Includes developing market countries and smaller units. (2) Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations. (3) Total Finance receivables exclude the allowance for credit losses of $93 and $107 at September 30, 2019 and 2018 , respectively. (4) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. |
Financing Receivable Credit Quality Indicators | Details about our finance receivables portfolio based on industry and credit quality indicators are as follows: September 30, 2019 December 31, 2018 Investment Grade Non-investment Grade Substandard Total Finance Receivables Investment Grade Non-investment Grade Substandard Total Finance Receivables Finance and other services $ 166 $ 332 $ 87 $ 585 $ 177 $ 334 $ 88 $ 599 Government and education 440 54 16 510 453 63 9 525 Graphic arts 70 140 81 291 82 131 87 300 Industrial 79 85 16 180 86 82 16 184 Healthcare 61 63 12 136 86 48 9 143 Other 62 107 29 198 63 90 42 195 Total United States (1) 878 781 241 1,900 947 748 251 1,946 Finance and other services 59 30 17 106 52 33 20 105 Government and education 35 4 3 42 38 3 4 45 Graphic arts 19 26 27 72 22 30 26 78 Industrial 18 11 11 40 16 12 9 37 Other 29 18 11 58 34 21 15 70 Total Canada 160 89 69 318 162 99 74 335 France 199 141 20 360 232 157 29 418 U.K./Ireland 142 78 6 226 150 87 7 244 Central (2) 169 117 8 294 196 123 8 327 Southern (3) 57 129 10 196 52 136 17 205 Nordics (4) 25 18 1 44 28 15 2 45 Total Europe (5) 592 483 45 1,120 658 518 63 1,239 Other (1) 28 13 2 43 31 13 — 44 Total $ 1,658 $ 1,366 $ 357 $ 3,381 $ 1,798 $ 1,378 $ 388 $ 3,564 _____________________________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. (5) Prior year amounts have been recasted to conform to the current year presentation. |
Finance Receivables Aging | The aging of our billed finance receivables is based upon the number of days an invoice is past due and is as follows: September 30, 2019 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Finance and other services $ 15 $ 4 $ 3 $ 22 $ 563 $ 585 $ 15 Government and education 17 3 3 23 487 510 19 Graphic arts 13 1 1 15 276 291 6 Industrial 6 2 1 9 171 180 9 Healthcare 4 2 1 7 129 136 6 Other 6 1 1 8 190 198 4 Total United States 61 13 10 84 1,816 1,900 59 Canada 6 2 2 10 308 318 19 France 4 — — 4 356 360 25 U.K./Ireland 1 — — 1 225 226 — Central (2) 1 — 1 2 292 294 8 Southern (3) 2 1 1 4 192 196 3 Nordics (4) — — — — 44 44 — Total Europe 8 1 2 11 1,109 1,120 36 Other 3 — — 3 40 43 — Total $ 78 $ 16 $ 14 $ 108 $ 3,273 $ 3,381 $ 114 December 31, 2018 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Finance and other services $ 15 $ 4 $ 2 $ 21 $ 578 $ 599 $ 11 Government and education 17 4 3 24 501 525 24 Graphic arts 10 1 1 12 288 300 5 Industrial 5 2 1 8 176 184 5 Healthcare 4 2 1 7 136 143 5 Other 5 2 1 8 187 195 4 Total United States (1) 56 15 9 80 1,866 1,946 54 Canada 7 2 1 10 325 335 22 France 5 — — 5 413 418 14 U.K./Ireland 2 — — 2 242 244 — Central (2) 1 1 1 3 324 327 6 Southern (3) 3 1 1 5 200 205 6 Nordics (4) — — — — 45 45 — Total Europe 11 2 2 15 1,224 1,239 26 Other (1) 2 — — 2 42 44 — Total $ 76 $ 19 $ 12 $ 107 $ 3,457 $ 3,564 $ 102 _____________________________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. |
Inventories and Equipment on _2
Inventories and Equipment on Operating Leases, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventories and Equipment on Operating Leases, Net [Abstract] | |
Inventories | The following is a summary of Inventories by major category: September 30, December 31, Finished goods $ 623 $ 699 Work-in-process 61 49 Raw materials 74 70 Total Inventories $ 758 $ 818 |
Equipment on Operating Leases, Net | Equipment on operating leases and the related accumulated depreciation were as follows: September 30, December 31, Equipment on operating leases $ 1,457 $ 1,519 Accumulated depreciation (1,083 ) (1,077 ) Equipment on operating leases, net $ 374 $ 442 |
Lessor, Operating Lease, Payments to be Received, Maturity | Estimated minimum future revenues associated with Equipment on operating leases are as follows: September 30, December 31, 2019 (1) $ 63 $ 260 2020 222 178 2021 140 111 2022 79 61 2023 36 21 Thereafter 9 2 Total $ 549 $ 633 _____________ (1) 2019 amount represents the future minimum revenues expected to be earned over the remaining balance of the year. |
Investment in Affiliates, at _2
Investment in Affiliates, at Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of equity in net income (loss) of unconsolidated affiliates | Our Equity in net income (loss) of unconsolidated affiliates was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Fuji Xerox $ 57 $ 41 $ 132 $ (12 ) Other 1 2 5 6 Total Equity in net income (loss) of unconsolidated affiliates $ 58 $ 43 $ 137 $ (6 ) |
Schedule of financial information for Fuji Xerox | Summarized financial information for Fuji Xerox was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Summary of Operations Revenues $ 2,395 $ 2,326 $ 7,001 $ 7,017 Costs and expenses 2,077 2,077 6,229 6,946 Income before Income Taxes 318 249 772 71 Income tax expense 83 84 233 95 Net Income (Loss) 235 165 539 (24 ) Less: Net income attributable to noncontrolling interests 1 1 2 2 Net Income (Loss) – Fuji Xerox $ 234 $ 164 $ 537 $ (26 ) Weighted Average Exchange Rate (1) 107.26 111.43 109.12 109.50 _____________________________ (1) Represents Yen/U.S. dollar exchange rate used to translate. |
Restructuring Programs (Tables)
Restructuring Programs (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Program Activity | Information related to restructuring program activity is outlined below: Severance and Related Costs Other Contractual Termination Costs (2) Asset Impairments (3) Total Balance at December 31, 2018 $ 94 $ 1 $ — $ 95 Provision 12 14 36 62 Reversals (8 ) — — (8 ) Net current period charges (1) 4 14 36 54 Charges against reserve and currency (32 ) (1 ) (36 ) (69 ) Balance at March 31, 2019 $ 66 $ 14 $ — $ 80 Provision 13 3 10 26 Reversals (6 ) — (2 ) (8 ) Net current period charges (1) 7 3 8 18 Charges against reserve and currency (17 ) (4 ) (8 ) (29 ) Balance at June 30, 2019 $ 56 $ 13 $ — $ 69 Provision 12 1 2 15 Reversals (3 ) (3 ) (1 ) (7 ) Net current period charges (1) 9 (2 ) 1 8 Charges against reserve and currency (16 ) (3 ) (1 ) (20 ) Balance at September 30, 2019 $ 49 $ 8 $ — $ 57 ____________________________ (1) Represents net amount recognized within the Condensed Consolidated Statements of Income for the period shown for restructuring and asset impairment charges. (2) Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs. (3) Primarily related to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $36 for leased right-of-use asset balances and $12 for owned asset balances upon exit from the facility net of any potential sublease income or other recovery amounts . |
Reconciliation to the Condensed Consolidated Statements Of Cash Flows | The following table summarizes the reconciliation to the Condensed Consolidated Statements of Cash Flows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Charges against reserve and currency $ (20 ) $ (38 ) $ (118 ) $ (130 ) Effects of foreign currency and other non-cash items 3 (1 ) 47 — Restructuring cash payments $ (17 ) $ (39 ) $ (71 ) $ (130 ) |
Related Restructuring Costs | In connection with our restructuring programs, we also incurred certain related costs as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 Retention related severance/bonuses (1) $ 11 $ 31 Contractual severance costs (2) 3 41 Consulting and other costs (3) 5 24 Total $ 19 $ 96 ____________________________ (1) Includes retention related severance and bonuses for employees expected to continue working beyond their minimum notification period before termination. (2) Reflects estimated severance and other related costs we are contractually required to pay on employees transferred (approximately 2,200 ) as part of the shared service arrangement entered into with HCL Technologies. (3) Represents professional support services associated with our business transformation initiatives. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule Of Interest Expense And Income | Interest expense and income were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Interest expense (1) $ 60 $ 61 $ 178 $ 184 Interest income (2) 62 70 193 216 ____________ (1) Includes Cost of financing as well as non-financing interest expense that is included in Other expenses, net in the Condensed Consolidated Statements of Income. (2) Includes Financing revenue as well as other interest income that is included in Other expenses, net in the Condensed Consolidated Statements of Income. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | The following is a summary of our fair value hedges at September 30, 2019 : Debt Instrument Year First Designated Notional Amount Net Fair Value Weighted Average Interest Rate Paid Interest Rate Received Basis Maturity Senior Note 2021 2014 $ 200 $ 2 3.32 % 4.5 % Libor 2021 |
Summary of Derivative Instruments Fair Value | The following table provides a summary of the fair value amounts of our derivative instruments: Designation of Derivatives Balance Sheet Location September 30, December 31, Derivatives Designated as Hedging Instruments Foreign exchange contracts - forwards Other current assets $ 6 $ 7 Accrued expenses and other current liabilities (2 ) — Foreign currency options Other current assets — 1 Interest rate swaps Other long-term assets 2 — Other long-term liabilities — (3 ) Net designated derivative asset $ 6 $ 5 Derivatives NOT Designated as Hedging Instruments Foreign exchange contracts – forwards Other current assets $ 1 $ 7 Accrued expenses and other current liabilities (4 ) (1 ) Net undesignated derivative asset $ (3 ) $ 6 Summary of Derivatives Total Derivative assets $ 9 $ 15 Total Derivative liabilities (6 ) (4 ) Net Derivative asset $ 3 $ 11 |
Summary of Gains (Losses) on Derivative Instruments | The following table provides a summary of gains (losses) on derivative instruments: Three Months Ended Nine Months Ended Gain (Loss) on Derivative Instruments 2019 2018 2019 2018 Fair Value Hedges - Interest Rate Contracts Derivative gain (loss) recognized in interest expense $ — $ (1 ) $ 5 $ (7 ) Hedged item (loss) gain recognized in interest expense — 1 (5 ) 7 Cash Flow Hedges - Foreign Exchange Forward Contracts and Options Derivative gain (loss) recognized in OCI (effective portion) $ 4 $ (13 ) $ 10 $ (3 ) Derivative gain (loss) reclassified from AOCL to income - Cost of sales (effective portion) 3 (1 ) 6 (13 ) |
Summary of Derivatives Not Designated as Hedging Instruments Gains (Losses) | The following table provides a summary of gains (losses) on non-designated derivative instruments: Derivatives NOT Designated as Hedging Instruments Three Months Ended Nine Months Ended Location of Derivative Gain (Loss) 2019 2018 2019 2018 Foreign exchange contracts – forwards Other expense – Currency gain (loss), net $ 2 $ (7 ) $ 3 $ 11 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial assets and liabilities | The following table represents assets and liabilities measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs. September 30, December 31, Assets Foreign exchange contracts - forwards $ 7 $ 14 Foreign currency options — 1 Interest rate swaps 2 — Deferred compensation investments in mutual funds 18 16 Total $ 27 $ 31 Liabilities Foreign exchange contracts - forwards $ 6 $ 1 Interest rate swaps — 3 Deferred compensation plan liabilities 17 16 Total $ 23 $ 20 |
Estimated fair values of financial assets and liabilities not measured at fair value on a recurring basis | The estimated fair values of our other financial assets and liabilities were as follows: September 30, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 922 $ 922 $ 1,084 $ 1,084 Accounts receivable, net 1,188 1,188 1,276 1,276 Short-term debt and current portion of long-term debt 1,602 1,608 961 966 Long-term debt 3,230 3,280 4,269 3,922 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Components of net periodic benefit cost and other changes in plan assets and benefit obligations | The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows: Three Months Ended September 30, Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health Components of Net Periodic Benefit Costs: 2019 2018 2019 2018 2019 2018 Service cost $ 1 $ 1 $ 5 $ 6 $ — $ 2 Interest cost 25 35 37 37 3 5 Expected return on plan assets (26 ) (35 ) (56 ) (60 ) — — Recognized net actuarial loss (gain) 7 5 10 14 (1 ) — Amortization of prior service credit — — — (1 ) (19 ) (1 ) Recognized settlement loss 18 34 — — — — Defined benefit plans 25 40 (4 ) (4 ) (17 ) 6 Defined contribution plans (1) 6 9 5 8 n/a n/a Net Periodic Benefit Cost (Credit) 31 49 1 4 (17 ) 6 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income: Net actuarial loss (gain) (2) 135 — — (53 ) (9 ) — Amortization of net actuarial (loss) benefit (25 ) (39 ) (10 ) (14 ) 1 — Amortization of prior service credit — — — 1 19 1 Total Recognized in Other Comprehensive (Loss) Income (3) 110 (39 ) (10 ) (66 ) 11 1 Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income $ 141 $ 10 $ (9 ) $ (62 ) $ (6 ) $ 7 Nine Months Ended September 30, Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health Components of Net Periodic Benefit Costs: 2019 2018 2019 2018 2019 2018 Service cost $ 2 $ 2 $ 17 $ 19 $ 1 $ 4 Interest cost 83 102 114 114 11 18 Expected return on plan assets (77 ) (105 ) (174 ) (185 ) — — Recognized net actuarial loss (gain) 18 17 32 44 (3 ) — Amortization of prior service credit (1 ) (1 ) (1 ) (3 ) (57 ) (3 ) Recognized settlement loss 76 85 — — — — Defined benefit plans 101 100 (12 ) (11 ) (48 ) 19 Defined contribution plans (1) 19 28 17 22 n/a n/a Net Periodic Benefit Cost (Credit) 120 128 5 11 (48 ) 19 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income: Net actuarial loss (gain) (2) 171 (46 ) — (53 ) (9 ) 10 Amortization of net actuarial (loss) benefit (94 ) (102 ) (32 ) (44 ) 3 — Amortization of prior service credit 1 1 1 3 57 3 Total Recognized in Other Comprehensive (Loss) Income (3) 78 (147 ) (31 ) (94 ) 51 13 Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive (Loss) Income $ 198 $ (19 ) $ (26 ) $ (83 ) $ 3 $ 32 __________________________ (1) Prior year amounts have been revised to reflect additional cost for previously excluded plans. (2) The net actuarial loss (gain) for U.S. Plans primarily reflects (i) the remeasurement of our primary U.S. pension plans as a result of the payment of periodic settlements and (ii) adjustments for the actuarial valuation results based on January 1st plan census data. The non-U.S. plans net actuarial gain for 2018 reflects and out-of-period adjustment of $53 to correct an overstated benefit obligation for our U.K. Funded Pension Plan at December 31, 2017. (3) Amounts represent the pre-tax effect included within Other Comprehensive (Loss) Income. Refer to Note 20 - Other Comprehensive (Loss) Income for related tax effects and the after-tax amounts. |
Defined Benefit and Retiree Health Pension Plans, actual and expected cash contributions | The following table summarizes cash contributions to our defined benefit pension plans and retiree health benefit plans. Nine Months Ended September 30, Year Ended December 31, 2019 2018 Estimated 2019 2018 U.S. plans $ 19 $ 20 $ 25 $ 27 Non-U.S. plans 88 91 115 117 Total Pension $ 107 $ 111 $ 140 $ 144 Retiree Health $ 22 $ 42 $ 35 $ 57 |
Shareholders' Equity of Xerox_2
Shareholders' Equity of Xerox Holdings (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders Equity | For information related to the Reorganization of Xerox and Xerox Holdings, refer to Note 1 - Basis of Presentation - Corporate Reorganization. The shareholders' equity information presented below reflects the consolidated activity of Xerox Holdings. Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at June 30, 2019 $ 225 $ 3,124 $ (131 ) $ 5,391 $ (3,647 ) $ 4,962 $ 30 $ 4,992 Comprehensive income (loss), net — — — 221 (203 ) 18 2 20 Cash dividends declared - common (3) — — — (56 ) — (56 ) — (56 ) Cash dividends declared - preferred (4) — — — (4 ) — (4 ) — (4 ) Stock option and incentive plans, net — 3 — — — 3 — 3 Payments to acquire treasury stock, including fees — — (68 ) — — (68 ) — (68 ) Cancellation of treasury stock (4 ) (127 ) 131 — — — — — Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Balance at September 30, 2019 $ 221 $ 3,000 $ (68 ) $ 5,552 $ (3,850 ) $ 4,855 $ 31 $ 4,886 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at June 30, 2018 $ 255 $ 3,920 $ — $ 4,974 $ (3,772 ) $ 5,377 $ 31 $ 5,408 Comprehensive income, net — — — 89 61 150 4 154 Cash dividends declared - common (3) — — — (62 ) — (62 ) — (62 ) Cash dividends declared - preferred (4) — — — (4 ) — (4 ) — (4 ) Stock option and incentive plans, net 1 10 — — — 11 — 11 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2018 $ 232 $ 3,321 $ (55 ) $ 5,072 $ (3,565 ) $ 5,005 $ 34 $ 5,039 Cumulative effect of change in accounting principle (2) — — — 127 (127 ) — — — Comprehensive income (loss), net — — — 535 (158 ) 377 8 385 Cash dividends declared - common (3) — — — (171 ) — (171 ) — (171 ) Cash dividends declared - preferred (4) — — — (11 ) — (11 ) — (11 ) Stock option and incentive plans, net — 23 — — — 23 — 23 Payments to acquire treasury stock, including fees — — (368 ) — — (368 ) — (368 ) Cancellation of treasury stock (11 ) (344 ) 355 — — — — — Distributions to noncontrolling interests — — — — — — (11 ) (11 ) Balance at September 30, 2019 $ 221 $ 3,000 $ (68 ) $ 5,552 $ (3,850 ) $ 4,855 $ 31 $ 4,886 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at December 31, 2017 $ 255 $ 3,893 $ — $ 4,856 $ (3,748 ) $ 5,256 $ 37 $ 5,293 Cumulative effect of change in accounting principles — — — 120 — 120 — 120 Comprehensive income, net — — — 224 37 261 9 270 Cash dividends declared - common (3) — — — (192 ) — (192 ) — (192 ) Cash dividends declared - preferred (4) — — — (11 ) — (11 ) — (11 ) Stock option and incentive plans, net 1 37 — — — 38 — 38 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (12 ) (12 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 _____________________________ (1) Refer to Note 20 - Other Comprehensive (Loss) Income for the components of AOCL. (2) Refer to Note 2 - Recent Accounting Pronouncements - Income Taxes, for additional information related to the adoption of ASU 2018-02. (3) Cash dividends declared on common stock for the three and nine months ended September 30, 2019 and 2018 were $0.25 per share and $0.75 per share, respectively. (4) Cash dividends declared on preferred stock for the three and nine months ended September 30, 2019 and 2018 were $20.00 per share and $60.00 per share, respectively. |
Summary of Treasury Stock Purchases | The following is a summary of the purchases of common stock during 2019 : Shares Amount Balance at December 31, 2018 2,067 $ 55 Purchases (1) 11,575 368 Cancellations (11,313 ) (355 ) Balance at September 30, 2019 2,329 $ 68 _____________________________ (1) Includes associated fees. |
Shareholders' Equity of Xerox (
Shareholders' Equity of Xerox (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Schedule of Stockholders Equity | For information related to the Reorganization of Xerox and Xerox Holdings, refer to Note 1 - Basis of Presentation - Corporate Reorganization. The shareholders' equity information presented below reflects the consolidated activity of Xerox Holdings. Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at June 30, 2019 $ 225 $ 3,124 $ (131 ) $ 5,391 $ (3,647 ) $ 4,962 $ 30 $ 4,992 Comprehensive income (loss), net — — — 221 (203 ) 18 2 20 Cash dividends declared - common (3) — — — (56 ) — (56 ) — (56 ) Cash dividends declared - preferred (4) — — — (4 ) — (4 ) — (4 ) Stock option and incentive plans, net — 3 — — — 3 — 3 Payments to acquire treasury stock, including fees — — (68 ) — — (68 ) — (68 ) Cancellation of treasury stock (4 ) (127 ) 131 — — — — — Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Balance at September 30, 2019 $ 221 $ 3,000 $ (68 ) $ 5,552 $ (3,850 ) $ 4,855 $ 31 $ 4,886 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at June 30, 2018 $ 255 $ 3,920 $ — $ 4,974 $ (3,772 ) $ 5,377 $ 31 $ 5,408 Comprehensive income, net — — — 89 61 150 4 154 Cash dividends declared - common (3) — — — (62 ) — (62 ) — (62 ) Cash dividends declared - preferred (4) — — — (4 ) — (4 ) — (4 ) Stock option and incentive plans, net 1 10 — — — 11 — 11 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2018 $ 232 $ 3,321 $ (55 ) $ 5,072 $ (3,565 ) $ 5,005 $ 34 $ 5,039 Cumulative effect of change in accounting principle (2) — — — 127 (127 ) — — — Comprehensive income (loss), net — — — 535 (158 ) 377 8 385 Cash dividends declared - common (3) — — — (171 ) — (171 ) — (171 ) Cash dividends declared - preferred (4) — — — (11 ) — (11 ) — (11 ) Stock option and incentive plans, net — 23 — — — 23 — 23 Payments to acquire treasury stock, including fees — — (368 ) — — (368 ) — (368 ) Cancellation of treasury stock (11 ) (344 ) 355 — — — — — Distributions to noncontrolling interests — — — — — — (11 ) (11 ) Balance at September 30, 2019 $ 221 $ 3,000 $ (68 ) $ 5,552 $ (3,850 ) $ 4,855 $ 31 $ 4,886 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at December 31, 2017 $ 255 $ 3,893 $ — $ 4,856 $ (3,748 ) $ 5,256 $ 37 $ 5,293 Cumulative effect of change in accounting principles — — — 120 — 120 — 120 Comprehensive income, net — — — 224 37 261 9 270 Cash dividends declared - common (3) — — — (192 ) — (192 ) — (192 ) Cash dividends declared - preferred (4) — — — (11 ) — (11 ) — (11 ) Stock option and incentive plans, net 1 37 — — — 38 — 38 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (12 ) (12 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 _____________________________ (1) Refer to Note 20 - Other Comprehensive (Loss) Income for the components of AOCL. (2) Refer to Note 2 - Recent Accounting Pronouncements - Income Taxes, for additional information related to the adoption of ASU 2018-02. (3) Cash dividends declared on common stock for the three and nine months ended September 30, 2019 and 2018 were $0.25 per share and $0.75 per share, respectively. (4) Cash dividends declared on preferred stock for the three and nine months ended September 30, 2019 and 2018 were $20.00 per share and $60.00 per share, respectively. |
Summary of Treasury Stock Purchases | The following is a summary of the purchases of common stock during 2019 : Shares Amount Balance at December 31, 2018 2,067 $ 55 Purchases (1) 11,575 368 Cancellations (11,313 ) (355 ) Balance at September 30, 2019 2,329 $ 68 _____________________________ (1) Includes associated fees. |
XEROX CORPORATION | |
Schedule of Stockholders Equity | The shareholders' equity information presented below reflects the consolidated activity of Xerox. Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Shareholders’ Equity Non-controlling Interests Total Equity Balance at June 30, 2019 $ 225 $ 3,124 $ (131 ) $ 5,391 $ (3,647 ) $ 4,962 $ 30 $ 4,992 Comprehensive income (loss), net — — — 221 (203 ) 18 2 20 Dividends declared to parent — — — (58 ) — (58 ) — (58 ) Stock option and incentive plans, net — (2 ) — — — (2 ) — (2 ) Cancellation of treasury stock (4 ) (127 ) 131 — — — — — Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Reorganization (3) (221 ) 446 — — — 225 — 225 Balance at September 30, 2019 $ — $ 3,441 $ — $ 5,554 $ (3,850 ) $ 5,145 $ 31 $ 5,176 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Shareholders’ Equity Non- controlling Interests Total Equity Balance at June 30, 2018 $ 255 $ 3,920 $ — $ 4,974 $ (3,772 ) $ 5,377 $ 31 $ 5,408 Comprehensive income, net — — — 89 61 150 4 154 Cash dividends declared - common — — — (62 ) — (62 ) — (62 ) Cash dividends declared - preferred — — — (4 ) — (4 ) — (4 ) Stock option and incentive plans, net 1 10 — — — 11 — 11 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (1 ) (1 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2018 $ 232 $ 3,321 $ (55 ) $ 5,072 $ (3,565 ) $ 5,005 $ 34 $ 5,039 Cumulative effect of change in accounting principle (2) — — — 127 (127 ) — — — Comprehensive income (loss), net — — — 535 (158 ) 377 8 385 Cash dividends declared - common — — — (115 ) — (115 ) — (115 ) Cash dividends declared - preferred — — — (7 ) — (7 ) — (7 ) Dividends declared to parent — — — (58 ) — (58 ) — (58 ) Stock option and incentive plans, net — 18 — — — 18 — 18 Payments to acquire treasury stock, including fees — — (300 ) — — (300 ) — (300 ) Cancellation of treasury stock (11 ) (344 ) 355 — — — — — Distributions to noncontrolling interests — — — — — — (11 ) (11 ) Reorganization (3) (221 ) 446 — — — 225 — 225 Balance at September 30, 2019 $ — $ 3,441 $ — $ 5,554 $ (3,850 ) $ 5,145 $ 31 $ 5,176 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (1) Xerox Shareholders’ Equity Non- controlling Interests Total Equity Balance at December 31, 2017 $ 255 $ 3,893 $ — $ 4,856 $ (3,748 ) $ 5,256 $ 37 $ 5,293 Cumulative effect of change in accounting principles — — — 120 — 120 — 120 Comprehensive income, net — — — 224 37 261 9 270 Cash dividends declared - common — — — (192 ) — (192 ) — (192 ) Cash dividends declared - preferred — — — (11 ) — (11 ) — (11 ) Stock option and incentive plans, net 1 37 — — — 38 — 38 Payments to acquire treasury stock, including fees — — (284 ) — — (284 ) — (284 ) Distributions to noncontrolling interests — — — — — — (12 ) (12 ) Balance at September 30, 2018 $ 256 $ 3,930 $ (284 ) $ 4,997 $ (3,711 ) $ 5,188 $ 34 $ 5,222 _____________________________ (1) Refer to Note 20 - Other Comprehensive (Loss) Income for the components of AOCL. (2) Refer to Note 2 - Recent Accounting Pronouncements - Income Taxes, for additional information related to the adoption of ASU 2018-02. |
Summary of Treasury Stock Purchases | The following is a summary of the purchases of common stock during 2019 : Shares Amount Balance at December 31, 2018 2,067 $ 55 Purchases (1) 9,246 300 Cancellations (11,313 ) (355 ) Balance at September 30, 2019 — $ — _____________________________ (1) Includes associated fees. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based compensation expense | Stock-based compensation expense was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock-based compensation expense, pre-tax $ 11 $ 15 $ 41 $ 44 Income tax benefit recognized in earnings 3 4 10 11 |
Schedule of key valuation input assumptions | A summary of the key valuation input assumptions used in the Monte Carlo simulation relative to PS awards granted were as follows: Program to Date September 30, 2019 Term 3 years Risk-free interest rate (1) 2.51 % Dividend yield (2) 3.97 % Xerox’s blended volatility (3) 32.95 % Weighted-average fair value (4) $ 16.25 ____________ (1) The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve on the valuation date, with a maturity matched to the performance period . (2) The dividend yield was calculated as the expected quarterly dividend divided by Xerox’s three-month average stock price as of the valuation date, annualized and continuously compounded. (3) Xerox’s volatility is calculated using a blended volatility approach, with 50% weight on Xerox's historical volatility calculated from daily stock returns over a three -year look-back term from the valuation date, and 50% weight on Xerox's implied volatility. (4) The weighted-average of fair values used to record compensation expense as determined by the Monte Carlo simulation. |
Schedule of absolute TSR payout as a percentage | The Absolute Share Price is compared against total return targets to determine the payout as follows: Total Return Targets (1) Payout Percentages $40.00 and above 200 % $35.00 100 % $30.00 50 % Below $30.00 0 % ____________ (1) For performance between the levels described above, the degree of vesting is interpolated on a linear basis. |
Other Comprehensive (Loss) In_2
Other Comprehensive (Loss) Income (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Other Comprehensive (Loss) Income | Other Comprehensive (Loss) Income is comprised of the following: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax Translation adjustments losses $ (153 ) $ (155 ) $ (13 ) $ (13 ) $ (121 ) $ (122 ) $ (164 ) $ (159 ) Unrealized gains (losses) Changes in fair value of cash flow hedges gains (losses) 4 4 (13 ) (9 ) 10 8 (3 ) (2 ) Changes in cash flow hedges reclassed to earnings (1) (3 ) (3 ) 1 (1 ) (6 ) (5 ) 13 9 Other gains (losses) — — 1 1 — — (2 ) (2 ) Net Unrealized gains (losses) 1 1 (11 ) (9 ) 4 3 8 5 Defined benefit plans (losses) gains Net actuarial/prior service (losses) gains (126 ) (95 ) 53 44 (162 ) (122 ) 89 71 Prior service amortization (2) (19 ) (14 ) (2 ) (1 ) (59 ) (44 ) (7 ) (5 ) Actuarial loss amortization/settlement (2) 34 26 53 40 123 93 146 110 Fuji Xerox changes in defined benefit plans, net (3) (3 ) (3 ) 6 6 (1 ) (1 ) (18 ) (18 ) Other gains (losses) (4) 38 38 (6 ) (6 ) 36 36 33 33 Changes in defined benefit plans (losses) gains (76 ) (48 ) 104 83 (63 ) (38 ) 243 191 Other Comprehensive (Loss) Income (228 ) (202 ) 80 61 (180 ) (157 ) 87 37 Less: Other comprehensive income attributable to noncontrolling interests 1 1 — — 1 1 — — Other Comprehensive (Loss) Income Attributable to Xerox Holdings $ (229 ) $ (203 ) $ 80 $ 61 $ (181 ) $ (158 ) $ 87 $ 37 _____________________________ (1) Reclassified to Cost of sales - refer to Note 14 - Financial Instruments for additional information regarding our cash flow hedges. (2) Reclassified to Total Net Periodic Benefit Cost - refer to Note 16 - Employee Benefit Plans for additional information. (3) Represents our share of Fuji Xerox's benefit plan changes. (4) Primarily represents currency impact on cumulative amount of benefit plan net actuarial losses and prior service credits in AOCL. |
Schedule of Accumulated Other Comprehensive Loss | AOCL is comprised of the following: September 30, December 31, Cumulative translation adjustments $ (2,146 ) $ (2,023 ) Other unrealized gains, net 7 4 Benefit plans net actuarial losses and prior service credits (1)(2) (1,711 ) (1,546 ) Total Accumulated other comprehensive loss attributable to Xerox Holdings $ (3,850 ) $ (3,565 ) _____________________________ (1) Includes our share of Fuji Xerox. (2) The change from December 31, 2018 includes $(127) related to the adoption of ASU 2018-02 and the reclassification of stranded tax effects resulting from the Tax Act - refer to Note 2 - Recent Accounting Pronouncements - Income Taxes for additional information. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted earnings per share of common stock of Xerox Holdings: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Basic Earnings per Share Net Income Attributable to Xerox Holdings $ 221 $ 89 $ 535 $ 224 Accrued dividends on preferred stock (4 ) (4 ) (11 ) (11 ) Adjusted Net income available to common shareholders $ 217 $ 85 $ 524 $ 213 Weighted average common shares outstanding 220,269 251,290 224,257 253,360 Basic Earnings per Share $ 0.99 $ 0.34 $ 2.34 $ 0.84 Diluted Earnings per Share Net Income Attributable to Xerox Holdings $ 221 $ 89 $ 535 $ 224 Accrued dividends on preferred stock — (4 ) — (11 ) Adjusted Net income available to common shareholders $ 221 $ 85 $ 535 $ 213 Weighted average common shares outstanding 220,269 251,290 224,257 253,360 Common shares issuable with respect to: Stock options 42 — 37 — Restricted stock and performance shares 4,014 2,763 4,429 2,875 Convertible preferred stock 6,742 — 6,742 — Adjusted Weighted average common shares outstanding 231,067 254,053 235,465 256,235 Diluted Earnings per Share $ 0.96 $ 0.34 $ 2.27 $ 0.83 The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive: Stock options 841 1,052 847 1,052 Restricted stock and performance shares 2,358 3,529 1,944 3,417 Convertible preferred stock — 6,742 — 6,742 Total Anti-Dilutive Securities 3,199 11,323 2,791 11,211 Dividends per Common Share $ 0.25 $ 0.25 $ 0.75 $ 0.75 |
Contingencies and Litigation (T
Contingencies and Litigation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Brazil Tax Contingencies | Below is a summary of our Brazilian tax contingencies: September 30, December 31, Tax contingency - unreserved $ 425 $ 500 Escrow cash deposits 53 58 Surety bonds 98 106 Letters of credit 87 104 Liens on Brazilian assets — — |
Basis of Presentation - Corpor
Basis of Presentation - Corporate Reorganization (Details) $ / shares in Units, $ in Millions | Aug. 01, 2019USD ($)$ / sharesshares | Jul. 31, 2019 |
Conversion of Stock [Line Items] | ||
Reorganization, shareholders conversion ratio | 1 | |
Number of shares exchanged for common stock (in shares) | shares | 100 | |
Par value (in dollars per share) | $ / shares | $ 1 | |
Common Stock | ||
Conversion of Stock [Line Items] | ||
Reorganization reclassification amount | $ (221) | |
Additional Paid-in Capital | ||
Conversion of Stock [Line Items] | ||
Reorganization reclassification amount | $ 221 |
Basis of Presentation - Shared
Basis of Presentation - Shared Services Arrangement (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Mar. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | |
Long-term Purchase Commitment [Line Items] | |||
Shared services arrangement, transition period | 18 months | ||
Shared services arrangement, commitment amount | $ 1,300 | ||
Shared services arrangement, period | 7 years | ||
Shared Services Arrangement with HCL Technologies | Employee Transfers | |||
Long-term Purchase Commitment [Line Items] | |||
Shared services arrangement, net charges incurred | $ 38 | $ 68 |
Basis of Presentation - Change
Basis of Presentation - Change in Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Sales and services | [1],[2] | $ 2,200 | $ 2,352 | $ 6,695 | $ 7,297 |
Sales | |||||
Sales and services | [1],[3] | 804 | 856 | 2,379 | 2,628 |
Cost of sales and services | [3] | 515 | 539 | 1,531 | 1,664 |
Services, maintenance and rentals | |||||
Sales and services | [3] | 1,336 | 1,431 | 4,132 | 4,465 |
Cost of sales and services | [3] | $ 772 | 838 | $ 2,400 | 2,620 |
As Reported | Sales | |||||
Sales and services | 943 | 2,893 | |||
Cost of sales and services | 570 | 1,755 | |||
As Reported | Services, maintenance and rentals | |||||
Sales and services | 1,344 | 4,200 | |||
Cost of sales and services | 807 | 2,529 | |||
Change | Sales | |||||
Sales and services | (87) | (265) | |||
Cost of sales and services | (31) | (91) | |||
Change | Services, maintenance and rentals | |||||
Sales and services | 87 | 265 | |||
Cost of sales and services | $ 31 | $ 91 | |||
[1] | Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation - Change in Presentation, for additional information. | ||||
[2] | Geographic area data is based upon the location of the subsidiary reporting the revenue. | ||||
[3] | Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation for additional information. |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Assets | $ 14,660 | $ 14,660 | $ 14,874 | ||||
Liabilities | (9,560) | (9,560) | $ (9,621) | ||||
Equipment sales | [1],[2] | 2,200 | $ 2,352 | 6,695 | $ 7,297 | ||
ASU 2016-02 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Assets | $ 385 | ||||||
Assets, undiscounted | 440 | ||||||
Liabilities | (385) | ||||||
Liabilities, undiscounted | $ (440) | ||||||
Retained Earnings | ASU 2018-02 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative effect of change in accounting principle | 127 | ||||||
AOCL | ASU 2018-02 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative effect of change in accounting principle | (127) | ||||||
Equipment | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Equipment sales | 494 | $ 511 | 1,446 | $ 1,571 | |||
Equipment | ASU 2016-02 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Equipment sales | $ 9 | $ 20 | |||||
[1] | Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation - Change in Presentation, for additional information. | ||||||
[2] | Geographic area data is based upon the location of the subsidiary reporting the revenue. |
Adoption of New Leasing Stand_5
Adoption of New Leasing Standard - Lessee - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | ||||
Remaining terms of leases | 10 years | 10 years | ||
Operating lease, not yet commenced, obligation | $ 23 | $ 23 | ||
Operating lease, not yet commenced, ROU asset | $ 23 | $ 23 | ||
Operating lease, not yet commenced, term of lease | 10 years | 10 years | ||
Remaining lease obligation | $ 7 | $ 7 | ||
Finance leases, discount rate | 4.07% | 4.07% | ||
Finance lease, right-of-use asset | $ 7 | $ 7 | ||
Operating lease expense | $ 31 | $ 97 | $ 147 | |
Net of sublease income | $ 161 |
Adoption of New Leasing Stand_6
Adoption of New Leasing Standard - Lessee - Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | ||
Leases [Abstract] | ||||
Operating lease expense | $ 31 | $ 97 | $ 147 | |
Short-term lease expense | 6 | 16 | ||
Variable lease expense | [1] | 12 | 37 | |
Sublease income | 0 | (1) | ||
Total Lease expense | $ 49 | $ 149 | ||
[1] | Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs as well as taxes and insurance. |
Adoption of New Leasing Stand_7
Adoption of New Leasing Standard - Lessee - Operating Lease ROU Asset, Net and Operating Lease Liabilities (Details) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Operating lease, Other long-term assets | $ 297 |
Operating lease, Accrued expenses and other current liabilities | 88 |
Operating lease, Other long-term liabilities | 235 |
Total Operating lease liabilities | $ 323 |
Adoption of New Leasing Stand_8
Adoption of New Leasing Standard - Lessee - Supplemental Information Related to Operating Leases (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |||
Leases [Abstract] | ||||
Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows | $ 31 | $ 95 | ||
Right-of-use assets obtained in exchange for new lease liabilities | $ 5 | [1] | $ 28 | [1] |
Weighted-average remaining lease term | 4 years | 4 years | ||
Weighted-average discount rate | 5.63% | 5.63% | ||
[1] | Includes the impact of new leases as well as remeasurements and modifications to existing leases. |
Adoption of New Leasing Stand_9
Adoption of New Leasing Standard - Lessee - Maturities and Additional Information Related to Operating Lease Liabilities (Details) $ in Millions | Sep. 30, 2019USD ($) | |
Leases [Abstract] | ||
2019 | $ 30 | [1] |
2020 | 105 | |
2021 | 80 | |
2022 | 66 | |
2023 | 49 | |
Thereafter | 35 | |
Total Lease payments | 365 | |
Less: Imputed interest | 42 | |
Total Operating lease liabilities | $ 323 | |
[1] | Represents the future minimum operating lease payments expected to be made over the remaining balance of the year. |
Adoption of New Leasing Stan_10
Adoption of New Leasing Standard - Lessee - Future Minimum Operating Lease Commitments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 114 |
2020 | 88 |
2021 | 64 |
2022 | 50 |
2023 | 36 |
Thereafter | 27 |
Total Operating lease commitments | $ 379 |
Adoption of New Leasing Stan_11
Adoption of New Leasing Standard - Lessor - Components of Lease Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Lessor, Lease, Description [Line Items] | |||||
Economic life of leased product | 5 years | ||||
Lease income - sales type | $ 200 | $ 175 | $ 484 | $ 507 | |
Interest income on lease receivables | 60 | 65 | 184 | 204 | |
Lease income - operating leases | [1] | 99 | 109 | 303 | 331 |
Variable lease income | 25 | 28 | 80 | 89 | |
Total Lease income | 384 | 377 | 1,051 | 1,131 | |
Total Revenues | [2],[3] | 2,200 | 2,352 | 6,695 | 7,297 |
Profit at lease commencement, sales type leases | 86 | 206 | |||
Profit at lease commencement, sales type leases | 76 | 221 | |||
Services | |||||
Lessor, Lease, Description [Line Items] | |||||
Total Revenues | [4] | $ 1,336 | $ 1,431 | 4,132 | 4,465 |
Services | ASU 2016-02 | |||||
Lessor, Lease, Description [Line Items] | |||||
Total Revenues | $ 30 | $ 28 | |||
[1] | Operating lease income for the nine months ended September 30, 2019 and 2018 exclude service revenues of $30 and $28 | ||||
[2] | Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation - Change in Presentation, for additional information. | ||||
[3] | Geographic area data is based upon the location of the subsidiary reporting the revenue. | ||||
[4] | Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation for additional information. |
Revenue - Disaggregation of Re
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | [1],[2] | $ 2,200 | $ 2,352 | $ 6,695 | $ 7,297 |
Equipment | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 494 | 511 | 1,446 | 1,571 | |
Supplies, paper and other sales | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 310 | 345 | 933 | 1,057 | |
Maintenance agreements | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | [3] | 568 | 618 | 1,775 | 1,958 |
Service arrangements | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | [4] | 611 | 649 | 1,883 | 2,007 |
Rental and other | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 157 | 164 | 474 | 500 | |
Financing | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 60 | 65 | 184 | 204 | |
Sales | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | [1],[5] | 804 | 856 | 2,379 | 2,628 |
Sales | Direct Equipment Lease | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | [6] | 200 | 175 | 484 | 507 |
Sales | Distributors & resellers | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | [7] | 301 | 324 | 949 | 1,043 |
Sales | Customer direct | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 303 | 357 | 946 | 1,078 | |
United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | [2] | 1,364 | 1,414 | 4,028 | 4,307 |
Europe | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | [2] | 521 | 587 | 1,705 | 1,923 |
Canada | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | [2] | 123 | 133 | 377 | 424 |
Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | [2] | $ 192 | $ 218 | $ 585 | $ 643 |
[1] | Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation - Change in Presentation, for additional information. | ||||
[2] | Geographic area data is based upon the location of the subsidiary reporting the revenue. | ||||
[3] | Includes revenues from maintenance agreements on sold equipment as well as revenues associated with service agreements sold through our channel partners as Xerox Partner Print Services (XPPS). | ||||
[4] | Primarily includes revenues from our Managed Services offerings (formerly our Managed Document Services arrangements). Also includes revenues from embedded operating leases, which were not significant. | ||||
[5] | Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation for additional information. | ||||
[6] | Primarily reflects direct sales through bundled lease arrangements. | ||||
[7] | Primarily reflects sales through our two-tier distribution channels. |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Revenue, Contract Assets, Liabilities and Costs[Line Items] | |||||
Contract liabilities | $ 138 | $ 138 | $ 116 | ||
Contract liability amortization period | 30 months | ||||
Deferred incremental direct costs, amortization period | 4 years | 4 years | |||
Deferred incremental direct costs net of accumulated amortization | $ 162 | $ 162 | 172 | ||
Contract Fulfillment Costs and Inducements | |||||
Revenue, Contract Assets, Liabilities and Costs[Line Items] | |||||
Capitalized contract costs, amounts deferred | 13 | 13 | $ 12 | ||
Capitalized contract costs, amortization | $ 1 | $ 0 | $ 4 | $ 3 |
Revenue - Incremental Direct C
Revenue - Incremental Direct Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | ||||
Incremental direct costs of obtaining a contract | $ 20 | $ 22 | $ 56 | $ 62 |
Amortization of incremental direct costs | $ 23 | $ 25 | $ 66 | $ 72 |
Acquisitions - Additional Info
Acquisitions - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | |||||
Acquisitions | $ 0 | $ 0 | $ 42 | $ 0 | |
Rabbit Copiers, Inc. and Heritage Business Systems, Inc. | |||||
Business Acquisition [Line Items] | |||||
Acquisitions | $ 38 | ||||
Percentage of ownership acquired | 100.00% |
Supplementary Financial Infor_3
Supplementary Financial Information - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Supplemental Financial Information [Abstract] | ||||||
Cash and cash equivalents | $ 922 | $ 1,084 | ||||
Restricted cash | ||||||
Litigation deposits in Brazil | 57 | 61 | ||||
Other restricted cash | 0 | 3 | ||||
Total Restricted cash | 57 | 64 | ||||
Cash, cash equivalents and restricted cash | $ 979 | $ 776 | $ 1,148 | $ 1,218 | $ 1,327 | $ 1,368 |
Supplementary Financial Infor_4
Supplementary Financial Information - Restricted Cash Balance Sheet Location (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total Restricted cash | $ 57 | $ 64 |
Other current assets | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total Restricted cash | 0 | 1 |
Other long-term assets | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total Restricted cash | $ 57 | $ 63 |
Supplementary Financial Infor_5
Supplementary Financial Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Supplemental Financial Information [Abstract] | |||||
Provision for receivables | $ 13 | $ 11 | $ 40 | $ 37 | |
Provision for inventory | 3 | 5 | 18 | 19 | |
Provision for product warranty | 3 | 3 | 10 | 10 | |
Depreciation of buildings and equipment | 24 | 30 | 77 | 118 | |
Depreciation and obsolescence of equipment on operating leases | 56 | 62 | 172 | 189 | |
Amortization of internal use software | 15 | 18 | 48 | 55 | |
Amortization of acquired intangible assets | 9 | 12 | 35 | 36 | |
Amortization of customer contract costs | [1] | 24 | 25 | 70 | 75 |
Cost of additions to land, buildings and equipment | 11 | 15 | 30 | 41 | |
Cost of additions to internal use software | 6 | 8 | 18 | 32 | |
Common stock dividends - Xerox Holdings | 57 | 65 | 172 | 193 | |
Preferred stock dividends - Xerox Holdings | 4 | 4 | 11 | 11 | |
Payments to noncontrolling interests | 1 | 1 | 14 | 14 | |
Repurchases related to stock-based compensation - Xerox Holdings | $ 10 | $ 5 | $ 20 | $ 7 | |
[1] | Amortization of customer contract costs are reported in (Increase) decrease in other current and long-term assets in the Condensed Consolidated Statements of Cash Flows. Refer to Note 5 - Revenue for additional information on contract costs. |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net | $ 1,188 | $ 1,276 |
Accounts Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Invoiced | 939 | 999 |
Accrued | 305 | 333 |
Allowance for doubtful accounts | (56) | (56) |
Accounts receivable, net | $ 1,188 | $ 1,276 |
Accounts Receivable, Net - Acc
Accounts Receivable, Net - Accounts Receivable Sales Arrangements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | ||
Accounts Receivable Sales Arrangements [Abstract] | ||||||
Uncollected accounts receivable sold and derecognized | $ 94 | $ 94 | $ 131 | |||
Accounts Receivable | ||||||
Accounts Receivable Sales Arrangements [Abstract] | ||||||
Accounts receivable sales | [1] | 67 | $ 66 | 265 | $ 297 | |
Loss on sales of accounts receivable | $ 1 | $ 1 | $ 2 | $ 2 | ||
[1] | Customers may also enter into structured-payable arrangements that require us to sell our receivables from that customer to a third-party financial institution, which then makes payments to us to settle the customer's receivable. In these instances, we ensure the sale of the receivables are bankruptcy-remote and the payment made to us is without recourse. The activity associated with these arrangements is not reflected in this disclosure, as payments under these arrangements have not been material and these are customer directed arrangements. |
Finance Receivables, Net (Detai
Finance Receivables, Net (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||||||||
Gross receivables | $ 3,795 | $ 4,003 | ||||||
Unearned income | (414) | (439) | ||||||
Subtotal | 3,381 | 3,564 | ||||||
Residual values | 0 | 0 | ||||||
Allowance for doubtful accounts | (93) | $ (93) | $ (93) | (92) | $ (107) | $ (107) | $ (108) | $ (108) |
Finance receivables, net | 3,288 | 3,472 | ||||||
Less: Billed portion of finance receivables, net | 106 | 105 | ||||||
Less: Current portion of finance receivables not billed, net | 1,145 | 1,218 | ||||||
Finance receivables due after one year, net | $ 2,037 | $ 2,149 |
Finance Receivables, Net - Sum
Finance Receivables, Net - Summary of Future Contractual Maturities of Gross Finance Receivables (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | |
Receivables [Abstract] | |||
12 Months | [1] | $ 1,471 | $ 1,543 |
24 Months | 1,044 | 1,108 | |
36 Months | 705 | 755 | |
48 Months | 406 | 425 | |
60 Months | 152 | 158 | |
Thereafter | 17 | 14 | |
Total | 3,795 | 4,003 | |
Amounts previously billed | $ 108 | $ 107 | |
[1] | Includes amounts previously billed of $108 and $107 as of September 30, 2019 and December 31, 2018 , respectively. |
Finance Receivables, Net - Al
Finance Receivables, Net - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||||
Beginning Balance | $ 93 | $ 93 | $ 92 | $ 107 | $ 108 | $ 108 | ||||
Provision | 8 | 8 | 9 | 6 | 9 | 9 | ||||
Charge-offs | (9) | (11) | (8) | (8) | (8) | (10) | ||||
Recoveries and other | [1] | 1 | 3 | 0 | 2 | (2) | 1 | |||
Ending Balance | 93 | 93 | 93 | 107 | 107 | 108 | ||||
Financing Receivable, Collectively Evaluated for Impairment | [2] | $ 3,381 | $ 3,601 | [3] | ||||||
Allowance for doubtful accounts | 93 | 93 | 92 | 107 | 108 | 108 | 93 | 107 | ||
United States | ||||||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||||
Beginning Balance | 53 | 53 | 53 | 56 | 56 | 56 | ||||
Provision | 6 | 4 | 4 | 2 | 4 | 5 | ||||
Charge-offs | (5) | (5) | (4) | (2) | (4) | (5) | ||||
Recoveries and other | [1] | 1 | 1 | 0 | 1 | 0 | 0 | |||
Ending Balance | 55 | 53 | 53 | 57 | 56 | 56 | ||||
Financing Receivable, Collectively Evaluated for Impairment | [2] | 1,900 | 1,960 | [3] | ||||||
Allowance for doubtful accounts | 53 | 53 | 53 | 56 | 56 | 56 | 55 | 57 | ||
Canada | ||||||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||||
Beginning Balance | 12 | 12 | 12 | 14 | 14 | 15 | ||||
Provision | 0 | 1 | 1 | 0 | 1 | 0 | ||||
Charge-offs | (1) | (3) | (1) | (2) | (1) | (1) | ||||
Recoveries and other | [1] | 0 | 2 | 0 | 1 | 0 | 0 | |||
Ending Balance | 11 | 12 | 12 | 13 | 14 | 14 | ||||
Financing Receivable, Collectively Evaluated for Impairment | [2] | 318 | 352 | [3] | ||||||
Allowance for doubtful accounts | 12 | 12 | 12 | 14 | 14 | 15 | 11 | 13 | ||
Europe | ||||||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||||
Beginning Balance | 26 | 26 | 25 | 35 | 36 | 35 | ||||
Provision | 2 | 3 | 4 | 4 | 4 | 4 | ||||
Charge-offs | (3) | (3) | (3) | (4) | (3) | (4) | ||||
Recoveries and other | [1] | 0 | 0 | 0 | 0 | (2) | 1 | |||
Ending Balance | 25 | 26 | 26 | 35 | 35 | 36 | ||||
Financing Receivable, Collectively Evaluated for Impairment | [2] | 1,120 | 1,242 | [3] | ||||||
Allowance for doubtful accounts | 26 | 26 | 25 | 35 | 36 | 35 | 25 | 35 | ||
Other | ||||||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||||
Beginning Balance | [4] | 2 | 2 | 2 | 2 | 2 | 2 | |||
Provision | [4] | 0 | 0 | 0 | 0 | 0 | 0 | |||
Charge-offs | [4] | 0 | 0 | 0 | 0 | 0 | 0 | |||
Recoveries and other | [1],[4] | 0 | 0 | 0 | 0 | 0 | 0 | |||
Ending Balance | [4] | 2 | 2 | 2 | 2 | 2 | 2 | |||
Financing Receivable, Collectively Evaluated for Impairment | [2],[4] | 43 | 47 | [3] | ||||||
Allowance for doubtful accounts | [4] | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | |
[1] | Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations. | |||||||||
[2] | Total Finance receivables exclude the allowance for credit losses of $93 and $107 at September 30, 2019 and 2018 | |||||||||
[3] | As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. | |||||||||
[4] | Includes developing market countries and smaller units. |
Finance Receivables, Net - Cre
Finance Receivables, Net - Credit Quality Indicators (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2019 | Dec. 31, 2018 | |||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Loss rates of customers with investment grade credit quality | 1.00% | |||
Loss rates of customers with non investment grade credit quality, low range | 2.00% | |||
Loss rates of customers with non investment grade credit quality, high range | 5.00% | |||
Loss rates of customers with substandard doubtful credit quality - low | 7.00% | |||
Loss rates of customers with substandard doubtful credit quality - high | 10.00% | |||
Subtotal | $ 3,381 | $ 3,564 | ||
United States | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [1] | 1,900 | 1,946 | [2] |
United States | Finance and other services | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 585 | 599 | ||
United States | Government and education | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 510 | 525 | ||
United States | Graphic arts | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 291 | 300 | ||
United States | Industrial | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 180 | 184 | ||
United States | Healthcare | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 136 | 143 | ||
United States | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 198 | 195 | ||
Canada | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 318 | 335 | ||
Canada | Finance and other services | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 106 | 105 | ||
Canada | Government and education | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 42 | 45 | ||
Canada | Graphic arts | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 72 | 78 | ||
Canada | Industrial | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 40 | 37 | ||
Canada | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 58 | 70 | ||
Europe | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [3] | 1,120 | 1,239 | |
France | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 360 | 418 | ||
U.K./Ireland | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 226 | 244 | ||
Central | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [4],[5] | 294 | 327 | |
Southern | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [6] | 196 | 205 | [7] |
Nordics | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [8],[9] | 44 | 45 | |
Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [1] | 43 | 44 | [2] |
Investment Grade | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 1,658 | 1,798 | ||
Investment Grade | United States | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [1] | 878 | 947 | |
Investment Grade | United States | Finance and other services | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 166 | 177 | ||
Investment Grade | United States | Government and education | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 440 | 453 | ||
Investment Grade | United States | Graphic arts | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 70 | 82 | ||
Investment Grade | United States | Industrial | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 79 | 86 | ||
Investment Grade | United States | Healthcare | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 61 | 86 | ||
Investment Grade | United States | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 62 | 63 | ||
Investment Grade | Canada | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 160 | 162 | ||
Investment Grade | Canada | Finance and other services | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 59 | 52 | ||
Investment Grade | Canada | Government and education | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 35 | 38 | ||
Investment Grade | Canada | Graphic arts | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 19 | 22 | ||
Investment Grade | Canada | Industrial | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 18 | 16 | ||
Investment Grade | Canada | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 29 | 34 | ||
Investment Grade | Europe | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [3] | 592 | 658 | |
Investment Grade | France | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 199 | 232 | ||
Investment Grade | U.K./Ireland | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 142 | 150 | ||
Investment Grade | Central | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [4] | 169 | 196 | |
Investment Grade | Southern | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [6] | 57 | 52 | |
Investment Grade | Nordics | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [8] | 25 | 28 | |
Investment Grade | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [1] | 28 | 31 | |
Non-investment Grade | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 1,366 | 1,378 | ||
Non-investment Grade | United States | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [1] | 781 | 748 | |
Non-investment Grade | United States | Finance and other services | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 332 | 334 | ||
Non-investment Grade | United States | Government and education | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 54 | 63 | ||
Non-investment Grade | United States | Graphic arts | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 140 | 131 | ||
Non-investment Grade | United States | Industrial | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 85 | 82 | ||
Non-investment Grade | United States | Healthcare | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 63 | 48 | ||
Non-investment Grade | United States | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 107 | 90 | ||
Non-investment Grade | Canada | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 89 | 99 | ||
Non-investment Grade | Canada | Finance and other services | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 30 | 33 | ||
Non-investment Grade | Canada | Government and education | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 4 | 3 | ||
Non-investment Grade | Canada | Graphic arts | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 26 | 30 | ||
Non-investment Grade | Canada | Industrial | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 11 | 12 | ||
Non-investment Grade | Canada | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 18 | 21 | ||
Non-investment Grade | Europe | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [3] | 483 | 518 | |
Non-investment Grade | France | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 141 | 157 | ||
Non-investment Grade | U.K./Ireland | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 78 | 87 | ||
Non-investment Grade | Central | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [4] | 117 | 123 | |
Non-investment Grade | Southern | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [6] | 129 | 136 | |
Non-investment Grade | Nordics | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [8] | 18 | 15 | |
Non-investment Grade | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [1] | 13 | 13 | |
Substandard | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 357 | 388 | ||
Substandard | United States | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [1] | 241 | 251 | |
Substandard | United States | Finance and other services | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 87 | 88 | ||
Substandard | United States | Government and education | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 16 | 9 | ||
Substandard | United States | Graphic arts | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 81 | 87 | ||
Substandard | United States | Industrial | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 16 | 16 | ||
Substandard | United States | Healthcare | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 12 | 9 | ||
Substandard | United States | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 29 | 42 | ||
Substandard | Canada | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 69 | 74 | ||
Substandard | Canada | Finance and other services | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 17 | 20 | ||
Substandard | Canada | Government and education | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 3 | 4 | ||
Substandard | Canada | Graphic arts | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 27 | 26 | ||
Substandard | Canada | Industrial | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 11 | 9 | ||
Substandard | Canada | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 11 | 15 | ||
Substandard | Europe | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [3] | 45 | 63 | |
Substandard | France | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 20 | 29 | ||
Substandard | U.K./Ireland | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | 6 | 7 | ||
Substandard | Central | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [4] | 8 | 8 | |
Substandard | Southern | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [6] | 10 | 17 | |
Substandard | Nordics | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [8] | 1 | 2 | |
Substandard | Other | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Subtotal | [1] | $ 2 | $ 0 | |
[1] | As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. | |||
[2] | As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. | |||
[3] | Prior year amounts have been recasted to conform to the current year presentation. | |||
[4] | Switzerland, Germany, Austria, Belgium and Holland. | |||
[5] | Switzerland, Germany, Austria, Belgium and Holland | |||
[6] | Italy, Greece, Spain and Portugal. | |||
[7] | Italy, Greece, Spain and Portugal. | |||
[8] | Sweden, Norway, Denmark and Finland. | |||
[9] | Sweden, Norway, Denmark and Finland. |
Finance Receivables, Net - Agi
Finance Receivables, Net - Aging of Billed Finance Receivables (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | |||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | $ 3,381 | $ 3,564 | |||
Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 108 | 107 | |||
Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 3,273 | 3,457 | |||
Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 78 | 76 | |||
31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 16 | 19 | |||
90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 14 | 12 | |||
90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 114 | 102 | |||
United States | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [1] | 1,900 | 1,946 | [2] | |
United States | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 84 | 80 | [2] | ||
United States | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1,816 | 1,866 | [2] | ||
United States | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 61 | 56 | [2] | ||
United States | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 13 | 15 | [2] | ||
United States | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 10 | 9 | [2] | ||
United States | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 59 | 54 | [2] | ||
United States | Finance and other services | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 585 | 599 | |||
United States | Finance and other services | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 22 | 21 | |||
United States | Finance and other services | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 563 | 578 | |||
United States | Finance and other services | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 15 | 15 | |||
United States | Finance and other services | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 4 | 4 | |||
United States | Finance and other services | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 3 | 2 | |||
United States | Finance and other services | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 15 | 11 | |||
United States | Government and education | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 510 | 525 | |||
United States | Government and education | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 23 | 24 | |||
United States | Government and education | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 487 | 501 | |||
United States | Government and education | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 17 | 17 | |||
United States | Government and education | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 3 | 4 | |||
United States | Government and education | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 3 | 3 | |||
United States | Government and education | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 19 | 24 | |||
United States | Graphic arts | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 291 | 300 | |||
United States | Graphic arts | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 15 | 12 | |||
United States | Graphic arts | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 276 | 288 | |||
United States | Graphic arts | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 13 | 10 | |||
United States | Graphic arts | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | 1 | |||
United States | Graphic arts | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | 1 | |||
United States | Graphic arts | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 6 | 5 | |||
United States | Industrial | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 180 | 184 | |||
United States | Industrial | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 9 | 8 | |||
United States | Industrial | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 171 | 176 | |||
United States | Industrial | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 6 | 5 | |||
United States | Industrial | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 2 | 2 | |||
United States | Industrial | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | 1 | |||
United States | Industrial | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 9 | 5 | |||
United States | Healthcare | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 136 | 143 | |||
United States | Healthcare | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 7 | 7 | |||
United States | Healthcare | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 129 | 136 | |||
United States | Healthcare | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 4 | 4 | |||
United States | Healthcare | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 2 | 2 | |||
United States | Healthcare | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | 1 | |||
United States | Healthcare | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 6 | 5 | |||
United States | Other | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 198 | 195 | |||
United States | Other | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 8 | 8 | |||
United States | Other | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 190 | 187 | |||
United States | Other | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 6 | 5 | |||
United States | Other | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | 2 | |||
United States | Other | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | 1 | |||
United States | Other | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 4 | 4 | |||
Canada | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 318 | 335 | |||
Canada | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 10 | 10 | |||
Canada | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 308 | 325 | |||
Canada | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 6 | 7 | |||
Canada | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 2 | 2 | |||
Canada | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 2 | 1 | |||
Canada | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 19 | 22 | |||
Canada | Finance and other services | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 106 | 105 | |||
Canada | Government and education | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 42 | 45 | |||
Canada | Graphic arts | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 72 | 78 | |||
Canada | Industrial | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 40 | 37 | |||
Canada | Other | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 58 | 70 | |||
Europe | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [3] | 1,120 | 1,239 | ||
Europe | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 11 | 15 | |||
Europe | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1,109 | 1,224 | |||
Europe | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 8 | 11 | |||
Europe | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | 2 | |||
Europe | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 2 | 2 | |||
Europe | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 36 | 26 | |||
France | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 360 | 418 | |||
France | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 4 | 5 | |||
France | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 356 | 413 | |||
France | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 4 | 5 | |||
France | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 0 | 0 | |||
France | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 0 | 0 | |||
France | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 25 | 14 | |||
U.K./Ireland | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 226 | 244 | |||
U.K./Ireland | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | 2 | |||
U.K./Ireland | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 225 | 242 | |||
U.K./Ireland | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | 2 | |||
U.K./Ireland | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 0 | 0 | |||
U.K./Ireland | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 0 | 0 | |||
U.K./Ireland | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 0 | 0 | |||
Central | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [4],[5] | 294 | 327 | ||
Central | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [5] | 2 | 3 | ||
Central | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [5] | 292 | 324 | ||
Central | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [5] | 1 | 1 | ||
Central | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [5] | 0 | 1 | ||
Central | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [5] | 1 | 1 | ||
Central | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | [5] | 8 | 6 | ||
Southern | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [6] | 196 | 205 | [7] | |
Southern | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 4 | [6] | 5 | [7] | |
Southern | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 192 | [6] | 200 | [7] | |
Southern | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 2 | [6] | 3 | [7] | |
Southern | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | [6] | 1 | [7] | |
Southern | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 1 | [6] | 1 | [7] | |
Southern | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | 3 | [6] | 6 | [7] | |
Nordics | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [8],[9] | 44 | 45 | ||
Nordics | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [9] | 0 | 0 | ||
Nordics | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [9] | 44 | 45 | ||
Nordics | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [9] | 0 | 0 | ||
Nordics | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [9] | 0 | 0 | ||
Nordics | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [9] | 0 | 0 | ||
Nordics | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | [9] | 0 | 0 | ||
Other | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | [1] | 43 | 44 | [2] | |
Other | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 3 | 2 | [2] | ||
Other | Unbilled Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 40 | 42 | [2] | ||
Other | Current | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 3 | 2 | [2] | ||
Other | 31-90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 0 | 0 | [2] | ||
Other | 90 Days Past Due | Billed Revenues | |||||
Financing Receivable, Past Due [Line Items] | |||||
Total Finance Receivables | 0 | 0 | [2] | ||
Other | 90 Days and Accruing | |||||
Financing Receivable, Past Due [Line Items] | |||||
Finance Receivables, 90 Days Past Due and Accruing | $ 0 | $ 0 | [2] | ||
[1] | As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. | ||||
[2] | As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. | ||||
[3] | Prior year amounts have been recasted to conform to the current year presentation. | ||||
[4] | Switzerland, Germany, Austria, Belgium and Holland. | ||||
[5] | Switzerland, Germany, Austria, Belgium and Holland | ||||
[6] | Italy, Greece, Spain and Portugal. | ||||
[7] | Italy, Greece, Spain and Portugal. | ||||
[8] | Sweden, Norway, Denmark and Finland. | ||||
[9] | Sweden, Norway, Denmark and Finland. |
Inventories and Equipment on _3
Inventories and Equipment on Operating Leases, Net - Summary of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Inventories, net [Abstract] | ||
Finished goods | $ 623 | $ 699 |
Work-in-process | 61 | 49 |
Raw materials | 74 | 70 |
Total Inventories | $ 758 | $ 818 |
Inventories and Equipment on _4
Inventories and Equipment on Operating Leases, Net - Equipment on Operating Leases and Accumulated Depreciation (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Equipment on Operating Leases, Net [Line Items] | ||
Equipment on operating leases, net | $ 442 | $ 499 |
Equipment on Operating Leases, Net [Abstract] | ||
Equipment on operating leases | 1,519 | |
Accumulated depreciation | (1,077) | |
Equipment on operating leases, net | 374 | $ 442 |
Equipment on Operating Leases and Related Accumulated Depreciation | ||
Equipment on Operating Leases, Net [Line Items] | ||
Equipment on operating leases | 1,457 | |
Accumulated depreciation | (1,083) | |
Equipment on operating leases, net | $ 374 |
Inventories and Equipment on _5
Inventories and Equipment on Operating Leases, Net - Estimated Minimum Future Revenues Associated with Equipment on Operating Leases (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | |
Estimated Minimum Future Revenues Associated With Equipment on Operating Leases [Abstract] | |||
2019 | [1] | $ 63 | |
2020 | 222 | ||
2021 | 140 | ||
2022 | 79 | ||
2023 | 36 | ||
Thereafter | 9 | ||
Total | $ 549 | ||
Operating Leases, Future Minimum Payments Receivable [Abstract] | |||
2019 | [1] | $ 260 | |
2020 | 178 | ||
2021 | 111 | ||
2022 | 61 | ||
2023 | 21 | ||
Thereafter | 2 | ||
Total | $ 633 | ||
[1] | 2019 amount represents the future minimum revenues expected to be earned over the remaining balance of the year. |
Inventories and Equipment on _6
Inventories and Equipment on Operating Leases, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Inventories and Equipment on Operating Leases, Net [Abstract] | ||||
Contingent rentals on operating lease, total | $ 25 | $ 80 | ||
Contingent rentals on operating lease, total | $ 28 | $ 89 |
Investment in Affiliates, at _3
Investment in Affiliates, at Equity - Equity in Net Income (Loss) of Unconsolidated Affiliates (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||||
Total Equity in net income (loss) of unconsolidated affiliates | $ 58 | $ 43 | $ 137 | $ (6) |
Fuji Xerox | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total Equity in net income (loss) of unconsolidated affiliates | 57 | 41 | 132 | (12) |
Other | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total Equity in net income (loss) of unconsolidated affiliates | $ 1 | $ 2 | $ 5 | $ 6 |
Investment in Affiliates, at _4
Investment in Affiliates, at Equity - Additional Information (Details) - Fuji Xerox ¥ in Billions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2018JPY (¥) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | ||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership percentage | 25.00% | 25.00% | 25.00% | 25.00% | |||
After-tax restructuring and other charges | $ 0 | $ 7,000,000 | $ 19,000,000 | $ 90,000,000 | |||
Weighted Average Exchange Rate | [1] | 107.26 | 111.43 | 108.07 | 108.07 | 109.12 | 109.50 |
Parent Company - Fujifilm Holdings Corporation | Restatement Adjustment | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Out-of-period adjustment - Fuji Xerox | $ 110,000,000 | ¥ 12 | |||||
Non Parent Equity Investment Owner - Xerox Corporation | Restatement Adjustment | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Out-of-period adjustment - Fuji Xerox | $ 28,000,000 | ||||||
[1] | Represents Yen/U.S. dollar exchange rate used to translate. |
Investment in Affiliates, at _5
Investment in Affiliates, at Equity - Summary of Fuji Xerox (Details) - Fuji Xerox $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2018 | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | ||
Summary of Operations: | ||||||
Revenues | $ 2,395 | $ 2,326 | $ 7,001 | $ 7,017 | ||
Costs and expenses | 2,077 | 2,077 | 6,229 | 6,946 | ||
Income before Income Taxes | 318 | 249 | 772 | 71 | ||
Income tax expense | 83 | 84 | 233 | 95 | ||
Net Income (Loss) | 235 | 165 | 539 | (24) | ||
Less: Net income attributable to noncontrolling interests | 1 | 1 | 2 | 2 | ||
Net Income (Loss) – Fuji Xerox | $ 234 | $ 164 | $ 537 | $ (26) | ||
Weighted Average Exchange Rate | [1] | 107.26 | 111.43 | 108.07 | 109.12 | 109.50 |
[1] | Represents Yen/U.S. dollar exchange rate used to translate. |
Restructuring Programs - Addit
Restructuring Programs - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($)Employees | |||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net restructuring and asset impairment charges | [1] | $ 8 | $ 18 | $ 54 | $ 80 | |||
Restructuring charges | 15 | 26 | 62 | |||||
Headcount reductions, number of employees | Employees | 450 | |||||||
Restructuring charges, net reversals | 7 | 8 | 8 | $ 23 | ||||
Early termination of prior period impaired leases | 6 | |||||||
Severance and Related Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net restructuring and asset impairment charges | [1] | 9 | 7 | 4 | ||||
Restructuring charges | 12 | 13 | 12 | 37 | ||||
Restructuring charges, net reversals | 3 | 6 | 8 | |||||
Other Contractual Termination Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net restructuring and asset impairment charges | [1],[2] | (2) | 3 | 14 | ||||
Restructuring charges | 1 | [2] | 3 | [2] | 14 | [2] | 18 | |
Restructuring charges, net reversals | [2] | 3 | 0 | 0 | ||||
Asset Impairments | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net restructuring and asset impairment charges | [1],[3] | 1 | 8 | 36 | ||||
Restructuring charges | [3] | 2 | 10 | 36 | $ 48 | |||
Restructuring charges, net reversals | [3] | $ 1 | $ 2 | $ 0 | ||||
[1] | Represents net amount recognized within the Condensed Consolidated Statements of Income for the period shown for restructuring and asset impairment charges. | |||||||
[2] | Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs. | |||||||
[3] | Primarily related to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $36 for leased right-of-use asset balances and $12 for owned asset balances upon exit from the facility net of any potential sublease income or other recovery amounts . |
Restructuring Programs - Infor
Restructuring Programs - Information Related to Restructuring Program Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||||
Restructuring Reserve [Roll Forward] | ||||||||||
Balance at beginning of period | $ 69 | $ 80 | $ 95 | $ 95 | ||||||
Provision | 15 | 26 | 62 | |||||||
Reversals | (7) | (8) | (8) | (23) | ||||||
Net current period charges | [1] | 8 | 18 | 54 | 80 | |||||
Charges against reserve and currency | (20) | (29) | (69) | $ (38) | (118) | $ (130) | ||||
Balance at end of period | 57 | 69 | 80 | 57 | ||||||
Leased right-of-use asset write-off | [2] | 36 | ||||||||
Owned asset write-off | [2] | 12 | ||||||||
Severance and Related Costs | ||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||
Balance at beginning of period | 56 | 66 | 94 | 94 | ||||||
Provision | 12 | 13 | 12 | 37 | ||||||
Reversals | (3) | (6) | (8) | |||||||
Net current period charges | [1] | 9 | 7 | 4 | ||||||
Charges against reserve and currency | (16) | (17) | (32) | |||||||
Balance at end of period | 49 | 56 | 66 | 49 | ||||||
Other Contractual Termination Costs | ||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||
Balance at beginning of period | [3] | 13 | 14 | 1 | 1 | |||||
Provision | 1 | [3] | 3 | [3] | 14 | [3] | 18 | |||
Reversals | [3] | (3) | 0 | 0 | ||||||
Net current period charges | [1],[3] | (2) | 3 | 14 | ||||||
Charges against reserve and currency | [3] | (3) | (4) | (1) | ||||||
Balance at end of period | [3] | 8 | 13 | 14 | 8 | |||||
Asset Impairments | ||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||
Balance at beginning of period | [2] | 0 | 0 | 0 | 0 | |||||
Provision | [2] | 2 | 10 | 36 | 48 | |||||
Reversals | [2] | (1) | (2) | 0 | ||||||
Net current period charges | [1],[2] | 1 | 8 | 36 | ||||||
Charges against reserve and currency | [2] | (1) | (8) | (36) | ||||||
Balance at end of period | [2] | $ 0 | $ 0 | $ 0 | $ 0 | |||||
[1] | Represents net amount recognized within the Condensed Consolidated Statements of Income for the period shown for restructuring and asset impairment charges. | |||||||||
[2] | Primarily related to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $36 for leased right-of-use asset balances and $12 for owned asset balances upon exit from the facility net of any potential sublease income or other recovery amounts . | |||||||||
[3] | Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs. |
Restructuring Programs - Summa
Restructuring Programs - Summary Of Reconciliation to Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | ||||||
Charges against reserve and currency | $ (20) | $ (29) | $ (69) | $ (38) | $ (118) | $ (130) |
Effects of foreign currency and other non-cash items | 3 | (1) | 47 | 0 | ||
Restructuring cash payments | $ (17) | $ (39) | $ (71) | $ (130) |
Restructuring Programs - Certa
Restructuring Programs - Certain Related Costs Incurred in Connection with Restructuring Programs (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($)employee | ||
Restructuring Cost and Reserve [Line Items] | |||
Related restructuring costs | $ 19 | $ 96 | |
Related restructuring costs, number of employees transferred | employee | 2,200 | ||
Retention related severance/bonuses | |||
Restructuring Cost and Reserve [Line Items] | |||
Related restructuring costs | [1] | 11 | $ 31 |
Contractual severance costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Related restructuring costs | [2] | 3 | 41 |
Consulting and other costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Related restructuring costs | [3] | $ 5 | $ 24 |
[1] | Includes retention related severance and bonuses for employees expected to continue working beyond their minimum notification period before termination. | ||
[2] | Reflects estimated severance and other related costs we are contractually required to pay on employees transferred (approximately 2,200 ) as part of the shared service arrangement entered into with HCL Technologies. | ||
[3] | Represents professional support services associated with our business transformation initiatives. |
Debt - Interest Expense and In
Debt - Interest Expense and Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Debt Disclosure [Abstract] | |||||
Interest expense | [1] | $ 60 | $ 61 | $ 178 | $ 184 |
Interest income | [2] | $ 62 | $ 70 | $ 193 | $ 216 |
[1] | Includes Cost of financing as well as non-financing interest expense that is included in Other expenses, net in the Condensed Consolidated Statements of Income. | ||||
[2] | Includes Financing revenue as well as other interest income that is included in Other expenses, net in the Condensed Consolidated Statements of Income. |
Financial Instruments - Additi
Financial Instruments - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Derivative [Line Items] | |||||
Notional amount | $ 982,000,000 | $ 982,000,000 | $ 1,103,000,000 | ||
Average Maturity of Foreign Exchange Hedging Contracts - within Three Months | 80.00% | 80.00% | |||
Average Maturity of Foreign Exchange Hedging Contracts - within Three and Six Months | 10.00% | 10.00% | |||
Average Maturity of Foreign Exchange Hedging Contracts - within Six and Twelve Months | 10.00% | 10.00% | |||
Net asset fair value | $ (3,000,000) | $ (3,000,000) | (11,000,000) | ||
Net gain recorded in AOCL expected to be reclassified to net income in the future | 7,000,000 | ||||
Foreign currency transaction (losses) gains, before tax | (4,000,000) | $ (3,000,000) | (6,000,000) | $ (2,000,000) | |
Senior Note 2021 | |||||
Derivative [Line Items] | |||||
Notional amount | 200,000,000 | 200,000,000 | |||
Net Fair Value | 2,000,000 | 2,000,000 | |||
Derivatives Designated as Hedging Instruments | |||||
Derivative [Line Items] | |||||
Net asset fair value | (6,000,000) | (6,000,000) | (5,000,000) | ||
Fair Value Hedges | Senior Note 2021 | |||||
Derivative [Line Items] | |||||
Ineffective portion recorded to earnings | 0 | ||||
Cash Flow Hedging | Derivatives Designated as Hedging Instruments | |||||
Derivative [Line Items] | |||||
Net asset fair value | $ 4,000,000 | $ 4,000,000 | $ 8,000,000 |
Financial Instruments - Fair V
Financial Instruments - Fair Value Hedges (Details) - Senior Note 2021 $ in Millions | Sep. 30, 2019USD ($) |
Derivative [Line Items] | |
Notional Amount | $ 200 |
Net Fair Value | $ 2 |
Weighted Average Interest Rate Paid | 3.32% |
Interest Rate Received | 4.50% |
Financial Instruments - Summar
Financial Instruments - Summary of Derivative Instruments Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net Derivative asset | $ 3 | $ 11 |
Total Derivative assets | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Assets | 9 | 15 |
Total Derivative liabilities | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Liabilities | (6) | (4) |
Derivatives Designated as Hedging Instruments | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net Derivative asset | 6 | 5 |
Derivatives Designated as Hedging Instruments | Other current assets | Foreign exchange contracts - forwards | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Assets | 6 | 7 |
Derivatives Designated as Hedging Instruments | Other current assets | Foreign currency options | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Assets | 0 | 1 |
Derivatives Designated as Hedging Instruments | Accrued expenses and other current liabilities | Foreign exchange contracts - forwards | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Liabilities | (2) | 0 |
Derivatives Designated as Hedging Instruments | Other long-term assets | Interest rate swaps | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Assets | 2 | 0 |
Derivatives Designated as Hedging Instruments | Other long-term liabilities | Interest rate swaps | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Liabilities | 0 | (3) |
Not Designated as Hedging Instrument | Foreign exchange contracts - forwards | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net Derivative asset | (3) | 6 |
Not Designated as Hedging Instrument | Other current assets | Foreign exchange contracts - forwards | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Assets | 1 | 7 |
Not Designated as Hedging Instrument | Accrued expenses and other current liabilities | Foreign exchange contracts - forwards | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Liabilities | $ (4) | $ (1) |
Financial Instruments - Summ_2
Financial Instruments - Summary of Derivative Instruments Gain (Losses) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Summary of Derivative Instruments Gains (Losses) [Abstract] | |||||
Derivative gain (loss) recognized in OCI (effective portion) | $ 4,000,000 | $ 10,000,000 | |||
Derivative gain (loss) recognized in OCI (effective portion) | $ (13,000,000) | $ (3,000,000) | |||
Derivative gain (loss) reclassified from AOCL to income - Cost of sales (effective portion) | [1] | 3,000,000 | 6,000,000 | ||
Senior Note 2021 | Fair Value Hedges | |||||
Summary of Derivative Instruments Gains (Losses) [Abstract] | |||||
During the three and nine months ended September 30, 2019 and 2018, no amount of ineffectiveness was recorded in the Condensed Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or (loss) were included in the assessment of hedge effectiveness | 0 | ||||
Interest Rate Contract | Fair Value Hedges | Interest Expense | |||||
Summary of Derivative Instruments Gains (Losses) [Abstract] | |||||
Derivative gain (loss) recognized in interest expense | 0 | (1,000,000) | 5,000,000 | (7,000,000) | |
Hedged item (loss) gain recognized in interest expense | 0 | 1,000,000 | (5,000,000) | 7,000,000 | |
Foreign exchange contracts - forwards | Cash Flow Hedges | |||||
Summary of Derivative Instruments Gains (Losses) [Abstract] | |||||
Derivative gain (loss) recognized in OCI (effective portion) | 4,000,000 | 10,000,000 | |||
Derivative gain (loss) recognized in OCI (effective portion) | (13,000,000) | (3,000,000) | |||
Foreign exchange contracts - forwards | Cash Flow Hedges | Cost of Sales | |||||
Summary of Derivative Instruments Gains (Losses) [Abstract] | |||||
Derivative gain (loss) reclassified from AOCL to income - Cost of sales (effective portion) | 3,000,000 | 6,000,000 | |||
Derivative gain (loss) reclassified from AOCL to income - Cost of sales (effective portion) | (1,000,000) | (13,000,000) | |||
During the three and nine months ended September 30, 2019 and 2018, no amount of ineffectiveness was recorded in the Condensed Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or (loss) were included in the assessment of hedge effectiveness | 0 | 0 | |||
During the three and nine months ended September 30, 2019 and 2018, no amount of ineffectiveness was recorded in the Condensed Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or (loss) were included in the assessment of hedge effectiveness | 0 | 0 | |||
Derivative, underlying exposure | $ 0 | $ 0 | $ 0 | $ 0 | |
[1] | Reclassified to Cost of sales - refer to Note 14 - Financial Instruments for additional information regarding our cash flow hedges. |
Financial Instruments - Summ_3
Financial Instruments - Summary of Gains (Losses) Non-designated Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Foreign exchange contracts - forwards | Other expense – Currency gain (loss), net | Not Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on non-designated derivative instruments | $ 2 | $ (7) | $ 3 | $ 11 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Recurring (Details) - Recurring - Level 2 - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Deferred compensation investments in mutual funds | $ 18 | $ 16 |
Total | 27 | 31 |
Liabilities | ||
Deferred compensation plan liabilities | 17 | 16 |
Total | 23 | 20 |
Foreign exchange contracts - forwards | ||
Assets | ||
Foreign currency contracts - assets | 7 | 14 |
Liabilities | ||
Foreign currency contracts - liabilities | 6 | 1 |
Foreign currency options | ||
Assets | ||
Foreign currency contracts - assets | 0 | 1 |
Interest rate swaps | ||
Assets | ||
Interest rate swaps | 2 | 0 |
Liabilities | ||
Interest rate swaps | $ 0 | $ 3 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Nonrecurring (Details) - Nonrecurring - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 922 | $ 1,084 |
Accounts receivable, net | 1,188 | 1,276 |
Short-term debt and current portion of long-term debt | 1,602 | 961 |
Long-term debt | 3,230 | 4,269 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 922 | 1,084 |
Accounts receivable, net | 1,188 | 1,276 |
Short-term debt and current portion of long-term debt | 1,608 | 966 |
Long-term debt | $ 3,280 | $ 3,922 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2019 | ||
Components of Net Periodic Benefit Costs: | |||||||
Defined benefit plans | $ 21,000,000 | $ 36,000,000 | $ 89,000,000 | $ 89,000,000 | |||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income: | |||||||
Net actuarial loss (gain) | 126,000,000 | (53,000,000) | 162,000,000 | (89,000,000) | |||
Amortization of net actuarial (loss) benefit | [1] | (34,000,000) | (53,000,000) | (123,000,000) | (146,000,000) | ||
Amortization of prior service credit | [1] | 19,000,000 | 2,000,000 | 59,000,000 | 7,000,000 | ||
Out-of-period adjustment | 53,000,000 | 53,000,000 | |||||
Pension Plan | |||||||
Contributions [Abstract] | |||||||
Defined benefit plan, contributions by employer | 107,000,000 | 111,000,000 | $ 144,000,000 | ||||
Pension Plan | Forecast | |||||||
Contributions [Abstract] | |||||||
Defined benefit plan, expected future employer contributions | $ 140,000,000 | ||||||
Pension Plan | U.S. | |||||||
Components of Net Periodic Benefit Costs: | |||||||
Service cost | 1,000,000 | 1,000,000 | 2,000,000 | 2,000,000 | |||
Interest cost | 25,000,000 | 35,000,000 | 83,000,000 | 102,000,000 | |||
Expected return on plan assets | (26,000,000) | (35,000,000) | (77,000,000) | (105,000,000) | |||
Recognized net actuarial loss (gain) | 7,000,000 | 5,000,000 | 18,000,000 | 17,000,000 | |||
Amortization of prior service credit | 0 | 0 | (1,000,000) | (1,000,000) | |||
Recognized settlement loss | 18,000,000 | 34,000,000 | 76,000,000 | 85,000,000 | |||
Defined benefit plans | 25,000,000 | 40,000,000 | 101,000,000 | 100,000,000 | |||
Defined contribution plans | [2] | 6,000,000 | 9,000,000 | 19,000,000 | 28,000,000 | ||
Net Periodic Benefit Cost (Credit) | 31,000,000 | 49,000,000 | 120,000,000 | 128,000,000 | |||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income: | |||||||
Net actuarial loss (gain) | [3] | 135,000,000 | 0 | 171,000,000 | (46,000,000) | ||
Amortization of net actuarial (loss) benefit | (25,000,000) | (39,000,000) | (94,000,000) | (102,000,000) | |||
Amortization of prior service credit | 0 | 0 | 1,000,000 | 1,000,000 | |||
Total Recognized in Other Comprehensive (Loss) Income | [4] | 110,000,000 | (39,000,000) | 78,000,000 | (147,000,000) | ||
Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive (Loss) Income | 141,000,000 | 10,000,000 | 198,000,000 | (19,000,000) | |||
Contributions [Abstract] | |||||||
Defined benefit plan, contributions by employer | 19,000,000 | 20,000,000 | 27,000,000 | ||||
Pension Plan | U.S. | Forecast | |||||||
Contributions [Abstract] | |||||||
Defined benefit plan, expected future employer contributions | 25,000,000 | ||||||
Pension Plan | U.S. | Qualified Plan | |||||||
Contributions [Abstract] | |||||||
Defined benefit plan, contributions by employer | 0 | ||||||
Pension Plan | Non-U.S. | |||||||
Components of Net Periodic Benefit Costs: | |||||||
Service cost | 5,000,000 | 6,000,000 | 17,000,000 | 19,000,000 | |||
Interest cost | 37,000,000 | 37,000,000 | 114,000,000 | 114,000,000 | |||
Expected return on plan assets | (56,000,000) | (60,000,000) | (174,000,000) | (185,000,000) | |||
Recognized net actuarial loss (gain) | 10,000,000 | 14,000,000 | 32,000,000 | 44,000,000 | |||
Amortization of prior service credit | 0 | (1,000,000) | (1,000,000) | (3,000,000) | |||
Recognized settlement loss | 0 | 0 | 0 | 0 | |||
Defined benefit plans | (4,000,000) | (4,000,000) | (12,000,000) | (11,000,000) | |||
Defined contribution plans | [2] | 5,000,000 | 8,000,000 | 17,000,000 | 22,000,000 | ||
Net Periodic Benefit Cost (Credit) | 1,000,000 | 4,000,000 | 5,000,000 | 11,000,000 | |||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income: | |||||||
Net actuarial loss (gain) | [3] | 0 | (53,000,000) | 0 | (53,000,000) | ||
Amortization of net actuarial (loss) benefit | (10,000,000) | (14,000,000) | (32,000,000) | (44,000,000) | |||
Amortization of prior service credit | 0 | 1,000,000 | 1,000,000 | 3,000,000 | |||
Total Recognized in Other Comprehensive (Loss) Income | [4] | (10,000,000) | (66,000,000) | (31,000,000) | (94,000,000) | ||
Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive (Loss) Income | (9,000,000) | (62,000,000) | (26,000,000) | (83,000,000) | |||
Contributions [Abstract] | |||||||
Defined benefit plan, contributions by employer | 88,000,000 | 91,000,000 | 117,000,000 | ||||
Pension Plan | Non-U.S. | Forecast | |||||||
Contributions [Abstract] | |||||||
Defined benefit plan, expected future employer contributions | 115,000,000 | ||||||
Retiree Health | |||||||
Components of Net Periodic Benefit Costs: | |||||||
Service cost | 0 | 2,000,000 | 1,000,000 | 4,000,000 | |||
Interest cost | 3,000,000 | 5,000,000 | 11,000,000 | 18,000,000 | |||
Expected return on plan assets | 0 | 0 | 0 | 0 | |||
Recognized net actuarial loss (gain) | (1,000,000) | 0 | (3,000,000) | 0 | |||
Amortization of prior service credit | (19,000,000) | (1,000,000) | (57,000,000) | (3,000,000) | |||
Recognized settlement loss | 0 | 0 | 0 | 0 | |||
Defined benefit plans | (17,000,000) | 6,000,000 | (48,000,000) | 19,000,000 | |||
Net Periodic Benefit Cost (Credit) | (17,000,000) | 6,000,000 | (48,000,000) | 19,000,000 | |||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income: | |||||||
Net actuarial loss (gain) | [3] | (9,000,000) | 0 | (9,000,000) | 10,000,000 | ||
Amortization of net actuarial (loss) benefit | 1,000,000 | 0 | 3,000,000 | 0 | |||
Amortization of prior service credit | 19,000,000 | 1,000,000 | 57,000,000 | 3,000,000 | |||
Total Recognized in Other Comprehensive (Loss) Income | [4] | 11,000,000 | 1,000,000 | 51,000,000 | 13,000,000 | ||
Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive (Loss) Income | $ (6,000,000) | $ 7,000,000 | 3,000,000 | 32,000,000 | |||
Contributions [Abstract] | |||||||
Defined benefit plan, contributions by employer | $ 22,000,000 | $ 42,000,000 | $ 57,000,000 | ||||
Retiree Health | Forecast | |||||||
Contributions [Abstract] | |||||||
Defined benefit plan, expected future employer contributions | $ 35,000,000 | ||||||
[1] | Reclassified to Total Net Periodic Benefit Cost - refer to Note 16 - Employee Benefit Plans for additional information. | ||||||
[2] | Prior year amounts have been revised to reflect additional cost for previously excluded plans. | ||||||
[3] | The net actuarial loss (gain) for U.S. Plans primarily reflects (i) the remeasurement of our primary U.S. pension plans as a result of the payment of periodic settlements and (ii) adjustments for the actuarial valuation results based on January 1st plan census data. The non-U.S. plans net actuarial gain for 2018 reflects and out-of-period adjustment of $53 to correct an overstated benefit obligation for our U.K. Funded Pension Plan at December 31, 2017. | ||||||
[4] | Amounts represent the pre-tax effect included within Other Comprehensive (Loss) Income. Refer to Note 20 - Other Comprehensive (Loss) Income for related tax effects and the after-tax amounts. |
Shareholders' Equity of Xerox_3
Shareholders' Equity of Xerox Holdings (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance at beginning of period | $ 4,992 | $ 5,408 | $ 5,039 | $ 5,293 | ||
Cumulative effect of change in accounting principle | 120 | |||||
Comprehensive income (loss), net | 20 | 154 | 385 | 270 | ||
Cash dividends declared - common | [1] | (56) | (62) | (171) | (192) | |
Stock option and incentive plans, net | 3 | 11 | 23 | 38 | ||
Payments to acquire treasury stock, including fees | (68) | (284) | (368) | [2] | (284) | |
Cancellation of treasury stock | (355) | |||||
Distributions to noncontrolling interests | (1) | (1) | (11) | (12) | ||
Balance at end of period | $ 4,886 | $ 5,222 | $ 4,886 | $ 5,222 | ||
Dividends per common share (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.75 | $ 0.75 | ||
Dividends per preferred share (in dollars per share) | $ 20 | $ 20 | $ 60 | $ 60 | ||
Series B Preferred Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cash dividends declared - preferred | [3] | $ (4) | $ (4) | $ (11) | $ (11) | |
Xerox Holdings/Xerox Shareholders’ Equity | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance at beginning of period | 4,962 | 5,377 | 5,005 | 5,256 | ||
Cumulative effect of change in accounting principle | 120 | |||||
Comprehensive income (loss), net | 18 | 150 | 377 | 261 | ||
Cash dividends declared - common | [1] | (56) | (62) | (171) | (192) | |
Stock option and incentive plans, net | 3 | 11 | 23 | 38 | ||
Payments to acquire treasury stock, including fees | (68) | (284) | (368) | (284) | ||
Balance at end of period | 4,855 | 5,188 | 4,855 | 5,188 | ||
Xerox Holdings/Xerox Shareholders’ Equity | Series B Preferred Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cash dividends declared - preferred | [3] | (4) | (4) | (11) | (11) | |
Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance at beginning of period | 225 | $ 255 | 232 | $ 255 | ||
Stock option and incentive plans, net (in shares) | 1 | 1 | ||||
Cancellation of treasury stock | (4) | (11) | ||||
Balance at end of period | 221 | $ 256 | 221 | $ 256 | ||
Additional Paid-in Capital | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance at beginning of period | 3,124 | 3,920 | 3,321 | 3,893 | ||
Stock option and incentive plans, net | 3 | 10 | 23 | 37 | ||
Payments to acquire treasury stock, including fees | 0 | |||||
Cancellation of treasury stock | (127) | (344) | ||||
Balance at end of period | 3,000 | 3,930 | 3,000 | 3,930 | ||
Treasury Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance at beginning of period | (131) | 0 | (55) | 0 | ||
Payments to acquire treasury stock, including fees | (68) | (284) | (368) | (284) | ||
Cancellation of treasury stock | 131 | 355 | ||||
Balance at end of period | (68) | (284) | (68) | (284) | ||
Retained Earnings | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance at beginning of period | 5,391 | 4,974 | 5,072 | 4,856 | ||
Cumulative effect of change in accounting principle | 127 | [4] | 120 | |||
Comprehensive income (loss), net | 221 | 89 | 535 | 224 | ||
Cash dividends declared - common | [1] | (56) | (62) | (171) | (192) | |
Balance at end of period | 5,552 | 4,997 | 5,552 | 4,997 | ||
Retained Earnings | Series B Preferred Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cash dividends declared - preferred | [3] | (4) | (4) | (11) | (11) | |
AOCL | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance at beginning of period | [5] | (3,647) | (3,772) | (3,565) | (3,748) | |
Cumulative effect of change in accounting principle | [4],[5] | (127) | ||||
Comprehensive income (loss), net | [5] | (203) | 61 | (158) | 37 | |
Balance at end of period | [5] | (3,850) | (3,711) | (3,850) | (3,711) | |
Non-controlling Interests | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance at beginning of period | 30 | 31 | 34 | 37 | ||
Comprehensive income (loss), net | 2 | 4 | 8 | 9 | ||
Payments to acquire treasury stock, including fees | 0 | |||||
Distributions to noncontrolling interests | (1) | (1) | (11) | (12) | ||
Balance at end of period | $ 31 | $ 34 | $ 31 | $ 34 | ||
[1] | Cash dividends declared on common stock for the three and nine months ended September 30, 2019 and 2018 were $0.25 per share and $0.75 per share, respectively. | |||||
[2] | Includes associated fees. | |||||
[3] | Cash dividends declared on preferred stock for the three and nine months ended September 30, 2019 and 2018 were $20.00 per share and $60.00 per share, respectively. | |||||
[4] | Refer to Note 2 - Recent Accounting Pronouncements - Income Taxes, for additional information related to the adoption of ASU 2018-02. | |||||
[5] | Refer to Note 20 - Other Comprehensive (Loss) Income for the components of AOCL. |
Shareholders' Equity of Xerox_4
Shareholders' Equity of Xerox Holdings - Treasury Stock (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Increase (Decrease) In Treasury Stock [Roll Forward] | ||||||
Balance at December 31, 2018 (in shares) | 2,067 | |||||
Balance at December 31, 2018 | $ 55 | |||||
Purchases (in shares) | [1] | 11,575 | ||||
Purchases | $ 68 | $ 284 | $ 368 | [1] | $ 284 | |
Cancellations (in shares) | (11,313) | |||||
Cancellations | $ (355) | |||||
Balance at September 30, 2019 (in shares) | 2,329 | 2,329 | ||||
Balance at September 30, 2019 | $ 68 | $ 68 | ||||
[1] | Includes associated fees. |
Shareholders' Equity of Xerox_5
Shareholders' Equity of Xerox (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | $ 4,992 | $ 5,408 | $ 5,039 | $ 5,293 | |||
Cumulative effect of change in accounting principle | 120 | ||||||
Comprehensive income (loss), net | 20 | 154 | 385 | 270 | |||
Cash dividends declared - common | [1] | (56) | (62) | (171) | (192) | ||
Dividends declared to parent | (58) | ||||||
Stock option and incentive plans, net | 3 | 11 | 23 | 38 | |||
Payments to acquire treasury stock, including fees | (68) | (284) | (368) | [2] | (284) | ||
Cancellation of treasury stock | (355) | ||||||
Distributions to noncontrolling interests | (1) | (1) | (11) | (12) | |||
Reorganization | 225 | [3] | 225 | ||||
Balance at end of period | 4,886 | 5,222 | 4,886 | 5,222 | |||
XEROX CORPORATION | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 4,992 | 5,408 | 5,039 | 5,293 | |||
Cumulative effect of change in accounting principle | 120 | ||||||
Comprehensive income (loss), net | 20 | 154 | 385 | 270 | |||
Cash dividends declared - common | (62) | (115) | (192) | ||||
Cash dividends declared - preferred | (4) | (7) | (11) | ||||
Dividends declared to parent | (58) | ||||||
Stock option and incentive plans, net | (2) | 11 | 18 | 38 | |||
Payments to acquire treasury stock, including fees | (284) | (300) | [2] | (284) | |||
Cancellation of treasury stock | (355) | ||||||
Distributions to noncontrolling interests | (1) | (1) | (11) | (12) | |||
Balance at end of period | 5,176 | 5,222 | 5,176 | 5,222 | |||
Xerox Holdings/Xerox Shareholders’ Equity | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 4,962 | 5,377 | 5,005 | 5,256 | |||
Cumulative effect of change in accounting principle | 120 | ||||||
Comprehensive income (loss), net | 18 | 150 | 377 | 261 | |||
Cash dividends declared - common | [1] | (56) | (62) | (171) | (192) | ||
Stock option and incentive plans, net | 3 | 11 | 23 | 38 | |||
Payments to acquire treasury stock, including fees | (68) | (284) | (368) | (284) | |||
Reorganization | 225 | [3] | 225 | ||||
Balance at end of period | 4,855 | 5,188 | 4,855 | 5,188 | |||
Xerox Holdings/Xerox Shareholders’ Equity | XEROX CORPORATION | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 4,962 | 5,377 | 5,005 | 5,256 | |||
Cumulative effect of change in accounting principle | 120 | ||||||
Comprehensive income (loss), net | 18 | 150 | 377 | 261 | |||
Cash dividends declared - common | (62) | (115) | (192) | ||||
Cash dividends declared - preferred | (4) | (7) | (11) | ||||
Dividends declared to parent | (58) | ||||||
Stock option and incentive plans, net | (2) | 11 | 18 | 38 | |||
Payments to acquire treasury stock, including fees | (284) | (300) | (284) | ||||
Balance at end of period | 5,145 | 5,188 | 5,145 | 5,188 | |||
Common Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 225 | 255 | 232 | 255 | |||
Cancellation of treasury stock | (4) | (11) | |||||
Reorganization | (221) | [3] | (221) | ||||
Balance at end of period | 221 | 256 | 221 | 256 | |||
Common Stock | XEROX CORPORATION | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 225 | 255 | 232 | 255 | |||
Stock option and incentive plans, net | 0 | 1 | 0 | 1 | |||
Cancellation of treasury stock | (4) | (11) | |||||
Balance at end of period | 0 | 256 | 0 | 256 | |||
Additional Paid-in Capital | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 3,124 | 3,920 | 3,321 | 3,893 | |||
Stock option and incentive plans, net | 3 | 10 | 23 | 37 | |||
Payments to acquire treasury stock, including fees | 0 | ||||||
Cancellation of treasury stock | (127) | (344) | |||||
Reorganization | 446 | [3] | 446 | ||||
Balance at end of period | 3,000 | 3,930 | 3,000 | 3,930 | |||
Additional Paid-in Capital | XEROX CORPORATION | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 3,124 | 3,920 | 3,321 | 3,893 | |||
Stock option and incentive plans, net | (2) | 10 | 18 | 37 | |||
Cancellation of treasury stock | (127) | (344) | |||||
Balance at end of period | 3,441 | 3,930 | 3,441 | 3,930 | |||
Treasury Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | (131) | 0 | (55) | 0 | |||
Payments to acquire treasury stock, including fees | (68) | (284) | (368) | (284) | |||
Cancellation of treasury stock | 131 | 355 | |||||
Balance at end of period | (68) | (284) | (68) | (284) | |||
Treasury Stock | XEROX CORPORATION | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | (131) | 0 | (55) | 0 | |||
Payments to acquire treasury stock, including fees | (284) | (300) | (284) | ||||
Cancellation of treasury stock | 131 | 355 | |||||
Balance at end of period | 0 | (284) | 0 | (284) | |||
Retained Earnings | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 5,391 | 4,974 | 5,072 | 4,856 | |||
Cumulative effect of change in accounting principle | 127 | [4] | 120 | ||||
Comprehensive income (loss), net | 221 | 89 | 535 | 224 | |||
Cash dividends declared - common | [1] | (56) | (62) | (171) | (192) | ||
Balance at end of period | 5,552 | 4,997 | 5,552 | 4,997 | |||
Retained Earnings | XEROX CORPORATION | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 5,391 | 4,974 | 5,072 | 4,856 | |||
Cumulative effect of change in accounting principle | 127 | [5] | 120 | ||||
Comprehensive income (loss), net | 221 | 89 | 535 | 224 | |||
Cash dividends declared - common | (62) | (115) | (192) | ||||
Cash dividends declared - preferred | (4) | (7) | (11) | ||||
Dividends declared to parent | (58) | ||||||
Balance at end of period | 5,554 | 4,997 | 5,554 | 4,997 | |||
AOCL | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | [6] | (3,647) | (3,772) | (3,565) | (3,748) | ||
Cumulative effect of change in accounting principle | [4],[6] | (127) | |||||
Comprehensive income (loss), net | [6] | (203) | 61 | (158) | 37 | ||
Balance at end of period | [6] | (3,850) | (3,711) | (3,850) | (3,711) | ||
AOCL | XEROX CORPORATION | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | [7] | (3,647) | (3,772) | (3,565) | (3,748) | ||
Cumulative effect of change in accounting principle | [5],[7] | (127) | |||||
Comprehensive income (loss), net | [7] | (203) | 61 | (158) | 37 | ||
Balance at end of period | [7] | (3,850) | (3,711) | (3,850) | (3,711) | ||
Non-controlling Interests | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 30 | 31 | 34 | 37 | |||
Comprehensive income (loss), net | 2 | 4 | 8 | 9 | |||
Payments to acquire treasury stock, including fees | 0 | ||||||
Distributions to noncontrolling interests | (1) | (1) | (11) | (12) | |||
Balance at end of period | 31 | 34 | 31 | 34 | |||
Non-controlling Interests | XEROX CORPORATION | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | 30 | 31 | 34 | 37 | |||
Comprehensive income (loss), net | 2 | 4 | 8 | 9 | |||
Distributions to noncontrolling interests | (1) | (1) | (11) | (12) | |||
Balance at end of period | $ 31 | $ 34 | $ 31 | $ 34 | |||
[1] | Cash dividends declared on common stock for the three and nine months ended September 30, 2019 and 2018 were $0.25 per share and $0.75 per share, respectively. | ||||||
[2] | Includes associated fees. | ||||||
[3] | Refer to Note 1 - Basis of Presentation for additional information on the Reorganization of Xerox. | ||||||
[4] | Refer to Note 2 - Recent Accounting Pronouncements - Income Taxes, for additional information related to the adoption of ASU 2018-02. | ||||||
[5] | Refer to Note 2 - Recent Accounting Pronouncements - Income Taxes, for additional information related to the adoption of ASU 2018-02. | ||||||
[6] | Refer to Note 20 - Other Comprehensive (Loss) Income for the components of AOCL. | ||||||
[7] | Refer to Note 20 - Other Comprehensive (Loss) Income for the components of AOCL. |
Shareholders' Equity of Xerox -
Shareholders' Equity of Xerox - Treasury Stock (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Increase (Decrease) In Treasury Stock [Roll Forward] | ||||||
Balance at December 31, 2018 (in shares) | 2,067 | |||||
Balance at December 31, 2018 | $ 55 | |||||
Purchases (in shares) | [1] | 11,575 | ||||
Purchases | $ 68 | $ 284 | $ 368 | [1] | $ 284 | |
Cancellations (in shares) | (11,313) | |||||
Cancellations | $ (355) | |||||
Balance at September 30, 2019 (in shares) | 2,329 | 2,329 | ||||
Balance at September 30, 2019 | $ 68 | $ 68 | ||||
XEROX CORPORATION | ||||||
Increase (Decrease) In Treasury Stock [Roll Forward] | ||||||
Balance at December 31, 2018 (in shares) | 2,067 | |||||
Balance at December 31, 2018 | $ 55 | |||||
Purchases (in shares) | [1] | 9,246 | ||||
Purchases | $ 284 | $ 300 | [1] | $ 284 | ||
Cancellations (in shares) | (11,313) | |||||
Cancellations | $ (355) | |||||
Balance at September 30, 2019 (in shares) | 0 | 0 | ||||
Balance at September 30, 2019 | $ 0 | $ 0 | ||||
[1] | Includes associated fees. |
Stock-Based Compensation - Com
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||
Stock-based compensation expense, pre-tax | $ 11 | $ 15 | $ 41 | $ 44 |
Income tax benefit recognized in earnings | $ 3 | $ 4 | $ 10 | $ 11 |
Stock-Based Compensation - Ad
Stock-Based Compensation - Additional Information (Details) shares in Thousands | 9 Months Ended | |
Sep. 30, 2019trading_day$ / sharesshares | ||
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance shares entitlement of original award grant | 0.00% | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance shares entitlement of original award grant | 200.00% | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | shares | 1,288 | |
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 22.73 | |
Restricted Stock Units (RSUs) | Graded vesting after year one of service period | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units vest on a granted schedule | 25.00% | |
Restricted Stock Units (RSUs) | Graded vesting after year two of service period | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units vest on a granted schedule | 25.00% | |
Restricted Stock Units (RSUs) | Graded vesting after year three of service period | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units vest on a granted schedule | 50.00% | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting term | 3 years | |
Performance Shares | Total Revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metrics, weighted performance in share | 25.00% | |
Performance Shares | Free Cash Flow | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metrics, weighted performance in share | 25.00% | |
Performance Shares | Absolute Share Price | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metrics, weighted performance in share | 50.00% | |
Performance Shares | Performance-Based | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | shares | 714 | |
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 22.62 | |
Performance metrics, weighted performance in share | 50.00% | |
Vesting term | 3 years | |
Performance share maximum overachievement | 100.00% | |
Performance Shares | Market-Based | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | shares | 714 | |
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 16.25 | [1] |
Performance metrics, weighted performance in share | 50.00% | |
Vesting term | 3 years | |
Total number of trading days of performance period | trading_day | 20 | |
[1] | The weighted-average of fair values used to record compensation expense as determined by the Monte Carlo simulation. |
Stock-Based Compensation - Sum
Stock-Based Compensation - Summary of Key Valuation Input Assumptions (Details) - Performance Shares | 9 Months Ended | |
Sep. 30, 2019$ / shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Term | 3 years | |
Market-Based | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Term | 3 years | |
Risk-free interest rate | 2.51% | [1] |
Dividend yield | 3.97% | [2] |
Blended volatility | 32.95% | [3] |
Weighted-average fair value (in dollars per share) | $ 16.25 | [4] |
Historical volatility look back | 3 years | |
Daily Stock Returns | Market-Based | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Blended volatility | 50.00% | |
Implied Volatility | Market-Based | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Blended volatility | 50.00% | |
[1] | The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve on the valuation date, with a maturity matched to the performance period . | |
[2] | The dividend yield was calculated as the expected quarterly dividend divided by Xerox’s three-month average stock price as of the valuation date, annualized and continuously compounded. | |
[3] | Xerox’s volatility is calculated using a blended volatility approach, with 50% weight on Xerox's historical volatility calculated from daily stock returns over a three -year look-back term from the valuation date, and 50% weight on Xerox's implied volatility. | |
[4] | The weighted-average of fair values used to record compensation expense as determined by the Monte Carlo simulation. |
Stock-Based Compensation - Abs
Stock-Based Compensation - Absolute Share Price Compared Against Total Return Targets (Details) - Market-Based - Performance Shares | 9 Months Ended | |
Sep. 30, 2019 | [1] | |
$40.00 and above | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout as a percentage of total return target | 200.00% | |
$35.00 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout as a percentage of total return target | 100.00% | |
$30.00 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout as a percentage of total return target | 50.00% | |
Below $30.00 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout as a percentage of total return target | 0.00% | |
[1] | For performance between the levels described above, the degree of vesting is interpolated on a linear basis. |
Other Comprehensive (Loss) In_3
Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Equity [Abstract] | |||||
Translation adjustments losses, Pre-tax | $ (153) | $ (13) | $ (121) | $ (164) | |
Translation adjustments losses, Net of Tax | [1] | (155) | (13) | (122) | (159) |
Unrealized gains (losses), Pre-tax | |||||
Changes in fair value of cash flow hedges gains (losses) | 4 | 10 | |||
Changes in fair value of cash flow hedges gains (losses) | (13) | (3) | |||
Changes in cash flow hedges reclassed to earnings | [2] | (3) | (6) | ||
Changes in cash flow hedges reclassed to earnings | [2] | 1 | 13 | ||
Other gains (losses) | 0 | 1 | 0 | (2) | |
Net Unrealized gains (losses) | 1 | 4 | |||
Net Unrealized gains (losses) | (11) | 8 | |||
Unrealized gains (losses), Net of Tax | |||||
Changes in fair value of cash flow hedges gains (losses) | 4 | 8 | |||
Changes in fair value of cash flow hedges gains (losses) | (9) | (2) | |||
Changes in cash flow hedges reclassed to earnings | [2] | (3) | (5) | ||
Changes in cash flow hedges reclassed to earnings | [2] | (1) | 9 | ||
Other gains (losses) | 0 | 1 | 0 | (2) | |
Net Unrealized gains (losses) | [1] | 1 | 3 | ||
Net Unrealized gains (losses) | [1] | (9) | 5 | ||
Defined benefit plans (losses) gains, Pre-tax | |||||
Net actuarial/prior service (losses) gains | (126) | 53 | (162) | 89 | |
Prior service amortization | [3] | (19) | (2) | (59) | (7) |
Actuarial loss amortization/settlement | [3] | 34 | 53 | 123 | 146 |
Fuji Xerox changes in defined benefit plans, net | [4] | (3) | 6 | (1) | (18) |
Other gains (losses) | [5] | 38 | (6) | 36 | 33 |
Changes in defined benefit plans (losses) gains | (76) | 104 | (63) | 243 | |
Defined benefit plans (losses) gains, Net of Tax | |||||
Net actuarial/prior service (losses) gains | (95) | 44 | (122) | 71 | |
Prior service amortization | [3] | (14) | (1) | (44) | (5) |
Actuarial loss amortization/settlement | [3] | 26 | 40 | 93 | 110 |
Fuji Xerox changes in defined benefit plans, net | [4] | (3) | 6 | (1) | (18) |
Other gains (losses) | [5] | 38 | (6) | 36 | 33 |
Changes in defined benefit plans (losses) gains | [1] | (48) | 83 | (38) | 191 |
Other Comprehensive (Loss) Income, Pre-tax | (228) | 80 | (180) | 87 | |
Other Comprehensive (Loss) Income, Net | [1] | (202) | 61 | (157) | 37 |
Less: Other comprehensive income attributable to noncontrolling interests, Pre-tax | 1 | 0 | 1 | 0 | |
Less: Other comprehensive income attributable to noncontrolling interests, Net of Tax | [1] | 1 | 0 | 1 | 0 |
Other Comprehensive Income (Loss) Attributable to Xerox Holdings, Pre-tax | (229) | 80 | (181) | 87 | |
Other Comprehensive (Loss) Income, Net Attributable to Xerox Holdings/Xerox | [1] | $ (203) | $ 61 | $ (158) | $ 37 |
[1] | Refer to Note 20 - Other Comprehensive (Loss) Income for gross components of Other comprehensive (loss) income, net, reclassification adjustments out of Accumulated other comprehensive loss and related tax effects. | ||||
[2] | Reclassified to Cost of sales - refer to Note 14 - Financial Instruments for additional information regarding our cash flow hedges. | ||||
[3] | Reclassified to Total Net Periodic Benefit Cost - refer to Note 16 - Employee Benefit Plans for additional information. | ||||
[4] | Represents our share of Fuji Xerox's benefit plan changes. | ||||
[5] | Primarily represents currency impact on cumulative amount of benefit plan net actuarial losses and prior service credits in AOCL. |
Other Comprehensive (Loss) In_4
Other Comprehensive (Loss) Income - Accumulated Other Comprehensive Loss (AOCL) (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Cumulative translation adjustments | $ (2,146) | $ (2,023) | ||
Other unrealized gains, net | 7 | |||
Other unrealized gains, net | 4 | |||
Benefit plans net actuarial losses and prior service credits | [1],[2] | (1,711) | (1,546) | |
Total Accumulated other comprehensive loss attributable to Xerox Holdings | (3,850) | $ (3,565) | ||
Adjustment to AOCL | $ 120 | |||
AOCL | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Adjustment to AOCL | [3],[4] | (127) | ||
ASU 2018-02 | AOCL | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Adjustment to AOCL | $ (127) | |||
[1] | Includes our share of Fuji Xerox. | |||
[2] | The change from December 31, 2018 includes $(127) related to the adoption of ASU 2018-02 and the reclassification of stranded tax effects resulting from the Tax Act - refer to Note 2 - Recent Accounting Pronouncements - Income Taxes for additional information. | |||
[3] | Refer to Note 2 - Recent Accounting Pronouncements - Income Taxes, for additional information related to the adoption of ASU 2018-02. | |||
[4] | Refer to Note 20 - Other Comprehensive (Loss) Income for the components of AOCL. |
Earnings per Share - Computati
Earnings per Share - Computation of Basic and Diluted Earnings (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Basic Earnings per Share | ||||
Net Income Attributable to Xerox Holdings | $ 221 | $ 89 | $ 535 | $ 224 |
Accrued dividends on preferred stock | (4) | (4) | (11) | (11) |
Adjusted Net income available to common shareholders | $ 217 | $ 85 | $ 524 | $ 213 |
Weighted average common shares outstanding (in shares) | 220,269 | 251,290 | 224,257 | 253,360 |
Basic Earnings per Share (in dollars per share) | $ 0.99 | $ 0.34 | $ 2.34 | $ 0.84 |
Diluted Earnings per Share | ||||
Net Income Attributable to Xerox Holdings | $ 221 | $ 89 | $ 535 | $ 224 |
Accrued dividends on preferred stock | 0 | (4) | 0 | (11) |
Adjusted Net income available to common shareholders | $ 221 | $ 85 | $ 535 | $ 213 |
Weighted average common shares outstanding (in shares) | 220,269 | 251,290 | 224,257 | 253,360 |
Common shares issuable with respect to: | ||||
Adjusted Weighted average common shares outstanding (in shares) | 231,067 | 254,053 | 235,465 | 256,235 |
Diluted Earnings per Share (in dollars per share) | $ 0.96 | $ 0.34 | $ 2.27 | $ 0.83 |
Stock options | ||||
Common shares issuable with respect to: | ||||
Common shares attributable to dilutive effect of share-based payments (in shares) | 42 | 0 | 37 | 0 |
Restricted stock and performance shares | ||||
Common shares issuable with respect to: | ||||
Common shares attributable to dilutive effect of share-based payments (in shares) | 4,014 | 2,763 | 4,429 | 2,875 |
Convertible preferred stock | ||||
Common shares issuable with respect to: | ||||
Common shares attributable to dilutive effect of share-based payments (in shares) | 6,742 | 0 | 6,742 | 0 |
Earnings per Share - Anti-Dilu
Earnings per Share - Anti-Dilutive Securities (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 3,199 | 11,323 | 2,791 | 11,211 |
Dividends per common share (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.75 | $ 0.75 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 841 | 1,052 | 847 | 1,052 |
Restricted stock and performance shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 2,358 | 3,529 | 1,944 | 3,417 |
Convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 0 | 6,742 | 0 | 6,742 |
Contingencies and Litigation -
Contingencies and Litigation - Brazilian Tax Contingencies (Details) - Brazil Contingencies - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Loss Contingencies [Line Items] | ||
Tax contingency - unreserved | $ 425 | $ 500 |
Escrow cash deposits | 53 | 58 |
Surety bonds | 98 | 106 |
Letters of credit | 87 | 104 |
Liens on Brazilian assets | $ 0 | $ 0 |
Contingencies and Litigation _2
Contingencies and Litigation - Litigation Against Company (Details) - Pending Litigation - Transactions To Combine Xerox And Fuji Xerox $ in Millions | Jun. 18, 2018USD ($) | Feb. 28, 2018complaintclass_action |
Loss Contingencies [Line Items] | ||
Number of complaints | complaint | 5 | |
Number of putative class actions | class_action | 4 | |
Termination fee | $ 183 | |
Loss contingency, damages sought | $ 1,000 |
Contingencies and Litigation _3
Contingencies and Litigation - Other Pending Litigation (Details) $ in Millions | Feb. 15, 2019USD ($) | May 09, 2014 | Sep. 30, 2019USD ($) |
Loss Contingencies [Line Items] | |||
Loss contingency, multiplier of overpayment amounts | 2 | ||
Conduent Entities | |||
Loss Contingencies [Line Items] | |||
Litigation settlement | $ 235.9 | ||
Performance Guarantee | |||
Guarantor Obligations [Line Items] | |||
Maximum exposure, undiscounted | $ 297 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | Nov. 08, 2019 | Nov. 05, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Nov. 04, 2019 | Mar. 31, 2018 |
Subsequent Event [Line Items] | ||||||||
Repayment of debt | $ 0 | $ 1 | $ 406 | $ 311 | ||||
Share buyback amount | 68 | 284 | 368 | 284 | ||||
Xerox Corporation | ||||||||
Subsequent Event [Line Items] | ||||||||
Repayment of debt | 0 | 1 | 406 | 311 | ||||
Share buyback amount | $ 0 | $ 284 | $ 300 | $ 284 | ||||
Fuji Xerox | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership percentage | 25.00% | 25.00% | 25.00% | |||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Proceeds from sale investments and subsidiaries | $ 2,300 | |||||||
Proceeds from sale of equity method investment | 2,200 | |||||||
Proceeds from sale of subsidiary | 100 | |||||||
Subsequent Event | Fuji Xerox | ||||||||
Subsequent Event [Line Items] | ||||||||
Share buyback amount | 770 | |||||||
Amendment No. 1, Technology Agreement, royalty payment period | 3 days | |||||||
Subsequent Event | FFAP | ||||||||
Subsequent Event [Line Items] | ||||||||
Purchase period from date of approval | 3 days | |||||||
Subsequent Event | Xerox Corporation | Fuji Xerox | ||||||||
Subsequent Event [Line Items] | ||||||||
Amendment No. 1, Technology Agreement, term extension | 2 years | |||||||
Amendment No. 1, Technology Agreement, royalties owed | $ 100 | |||||||
Subsequent Event | Senior Notes due 2019 | Senior Notes | ||||||||
Subsequent Event [Line Items] | ||||||||
Repayment of debt | 554 | |||||||
Subsequent Event | Fuji Xerox | FFAP | ||||||||
Subsequent Event [Line Items] | ||||||||
Purchase price of outstanding equity interests | $ 1,430 | |||||||
Xerox Holdings Corporation | Subsequent Event | Xerox International Partners | ||||||||
Subsequent Event [Line Items] | ||||||||
Percentage of ownership prior to sale | 51.00% | |||||||
Xerox Holdings Corporation | Subsequent Event | Fuji Xerox | ||||||||
Subsequent Event [Line Items] | ||||||||
Percentage of ownership prior to sale | 25.00% | |||||||
Ownership percentage | 25.00% |