Segment Reporting

12 Months Ended

Dec. 31, 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 their document-intensive business processes through automation and deployment of software applications and tools and the management of their printing needs. Document outsourcing also includes 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 is centered on strategic product groups, which share common technology, manufacturing and product platforms. Our product groupings range from:

• “Entry,” which includes A4 devices and desktop printers; to

• “Mid-range,” which includes A3 devices that generally serve workgroup environments in mid 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 Otherincludes 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 3 - Acquisitions and Divestitures, during 2013, we completed the sales of our North American and European Paper businesses. As a result of these transactions, in 2013 we began to report 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.

Selected financial information for our Reportable segments was as follows:

	Years Ended December 31,
	Services		Document Technology		Other			Total
2013 (1)
Revenue	$	11,792	$	8,500	$	660		$	20,952
Finance income	67		408		8			483
Total Segment Revenue	$	11,859	$	8,908	$	668		$	21,435
Interest expense	$	19	$	140	$	247		$	406
Segment profit (loss)(2)	1,157		966		(222		)	1,901
Equity in net income of unconsolidated affiliates	34		135		—			169
2012 (1)
Revenue	$	11,453	$	8,951	$	736		$	21,140
Finance income	75		511		11			597
Total Segment Revenue	$	11,528	$	9,462	$	747		$	21,737
Interest expense	$	22	$	172	$	236		$	430
Segment profit (loss)(2)	1,173		1,065		(256		)	1,982
Equity in net income of unconsolidated affiliates	30		122		—			152
2011 (1)
Revenue	$	10,754	$	9,722	$	792		$	21,268
Finance income	83		537		12			632
Total Segment Revenue	$	10,837	$	10,259	$	804		$	21,900
Interest expense	$	25	$	202	$	251		$	478
Segment profit (loss)(2)	1,207		1,140		(285		)	2,062
Equity in net income of unconsolidated affiliates	31		118		—			149

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(1) Asset information on a segment basis is not disclosed as this information is not separately identified and internally reported to our Chief Operating Decision Maker (CODM).

(2) Depreciation and amortization expense, which is recorded in Cost of Sales, Cost of Services, RD&E and SAG are included in segment profit above. This information is neither identified nor internally reported to our CODM.

The following is a reconciliation of segment profit to pre-tax income:

	Years Ended December 31,
Segment Profit Reconciliation to Pre-tax Income	2013			2012			2011
Total Segment Profit	$	1,901		$	1,982		$	2,062
Reconciling items:
Amortization of intangible assets	(332		)	(328		)	(398		)
Equity in net income of unconsolidated affiliates	(169		)	(152		)	(149		)
Restructuring and asset impairment charges	(116		)	(154		)	(32		)
Restructuring charges of Fuji Xerox	(9		)	(16		)	(19		)
Litigation matters (Q1 2013 only)	37			—			—
Loss on early extinguishment of liability and debt	—			—			(33		)
Curtailment gain	—			—			107
Other	—			—			(3		)
Pre-tax Income	$	1,312		$	1,332		$	1,535

Geographic area data is based upon the location of the subsidiary reporting the revenue or long-lived assets and is as follows for the three years ended December 31:

	Revenues						Long-Lived Assets (1)
	2013		2012		2011		2013		2012		2011
United States	$	14,534	$	14,500	$	14,253	$	1,870	$	1,966	$	1,894
Europe	4,574		4,733		5,148		761		784		776
Other areas	2,327		2,504		2,499		243		262		276
Total Revenues and Long-Lived Assets	$	21,435	$	21,737	$	21,900	$	2,874	$	3,012	$	2,946

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(1) Long-lived assets are comprised of (i) land, buildings and equipment, net, (ii) equipment on operating leases, net, (iii) internal use software, net and (iv) product software, net.