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Segment Reporting
 6 Months Ended
Jun. 30, 2013
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
Our reportable segments are aligned with how we manage the business and view the markets we serve. We report our financial performance based on the following two primary reportable segments – Services and Document Technology. Our Services segment operations involve delivery of a broad range of services including business process, document and IT outsourcing. Our Document Technology segment includes the sale and support of a broad range of document systems from entry level to high-end.
The Services segment is comprised of three outsourcing service offerings:
 
•
Business Process Outsourcing (BPO)
•
Document Outsourcing (which includes Managed Print Services) (DO)
•
Information Technology Outsourcing (ITO)
Business process outsourcing services include service arrangements where we manage a customer’s business activity or process. Document outsourcing services include service arrangements that allow customers to streamline, simplify and digitize document-intensive business processes through automation and deployment of software applications and tools and the management of their printing needs. Document outsourcing services also include revenues from our partner print services offerings. Information technology outsourcing services include service arrangements where we manage a customer’s IT-related activities, such as application management and application development, data center operations or testing and quality assurance.
Our Document Technology segment includes the sale of products that share common technology, manufacturing and product platforms. Our products groupings range from:
 
•
“Entry,” which includes A4 devices and desktop printers; to
•
“Mid-range,” which includes A3 devices that generally serve workgroup environments in midsize to large enterprises and includes products that fall into the following market categories: Color 41+ ppm priced at less than $100K and Light Production 91+ ppm priced at less than $100K; to
•
“High-end,” which includes production printing and publishing systems that generally serve the graphic communications marketplace and large enterprises.
Customers range from small and mid-sized businesses to large enterprises. Customers also include graphic communication enterprises as well as channel partners including distributors and resellers. Segment revenues reflect the sale of document systems and supplies, technical services and product financing.
The segment classified as Other includes several units, none of which meet the thresholds for separate segment reporting. This group includes paper sales in our developing market countries, Wide Format Systems, licensing revenues, GIS network integration solutions and electronic presentation systems and non-allocated corporate items including non-financing interest, as well as other items included in Other expenses, net.
As discussed in Note 5 - Divestitures, during the second quarter 2013, we completed the sale of our North American Paper business and entered into an agreement to sell our European Paper business. As a result of these transactions, in the second quarter 2013 we reported these paper-related operations as Discontinued Operations and reclassified their results from the Other segment to Discontinued Operations. All prior periods have been reclassified to conform to this presentation.
Operating segment revenues and profitability were as follows: 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
Segment
Revenue
 
Segment Profit (Loss)
 
Segment
Revenue
 
Segment Profit (Loss)
2013
 
 
 
 
 
 
 
Services
$
2,956

 
$
301

 
$
5,876

 
$
574

Document Technology
2,263

 
244

 
4,398

 
431

Other
183

 
(61
)
 
330

 
(131
)
Total
$
5,402

 
$
484

 
$
10,604

 
$
874

2012
 
 
 
 
 
 
 
Services
$
2,806

 
$
298

 
$
5,627

 
$
561

Document Technology
2,370

 
268

 
4,708

 
513

Other
192

 
(71
)
 
364

 
(128
)
Total
$
5,368

 
$
495

 
$
10,699

 
$
946


 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
Reconciliation to Pre-tax Income
 
2013
 
2012
 
2013
 
2012
Segment Profit
 
$
484

 
$
495

 
$
874

 
$
946

Reconciling items:
 
 
 
 
 
 
 
 
Restructuring and asset impairment charges
 
(33
)
 
(29
)
 
(25
)
 
(49
)
Restructuring charges of Fuji Xerox
 
(1
)
 
(6
)
 
(5
)
 
(10
)
Amortization of intangible assets
 
(83
)
 
(82
)
 
(166
)
 
(164
)
Litigation matters (Q1 2013 only)
 
—

 
—

 
37

 
—

Equity in net income of unconsolidated affiliates
 
(36
)
 
(31
)
 
(83
)
 
(71
)
Other
 
1

 
—

 
—

 
—

Pre-tax Income
 
$
332

 
$
347

 
$
632

 
$
652