Divestitures

Information Technology Outsourcing (ITO)

In December 2014 we announced an agreement to sell our ITO business to Atos for $1,050. The final sales price is subject to closing balance sheet related adjustments as well as the potential for additional consideration of $50 contingent on the condition of certain assets at closing. The transaction is subject to customary closing conditions and regulatory approval and is expected to close in the second quarter 2015.

As a result of this pending transaction and having met applicable accounting requirements, we are reporting the ITO business (disposal group) as held for sale and a Discontinued Operation.

In fourth quarter 2014, we recorded a net pre-tax loss of $181 related to the pending sale, reflecting the write-down of the carrying value of the ITO disposal group, inclusive of goodwill, to its estimated fair value less costs to sell. In first quarter 2015, we recorded an additional net pre-tax loss of $4 related to the adjustment of estimates regarding asset values and related expenses associated with the disposal. In addition, upon final disposal of the business, we expect to record additional tax expense of approximately $75 within Discontinued Operations primarily related to the difference between the book basis and tax basis of allocated goodwill. All of the assets and liabilities of the ITO business are reported as held for sale at March 31, 2015 and are included in Assets and Liabilities of Discontinued Operations, respectively, in the Condensed Consolidated Balance Sheet at March 31, 2015.

Other Discontinued Operations:

Other discontinued operations includes the 2014 closure of Xerox Audio Visual Solutions, Inc. (XAV) and the 2014 sale of our Truckload Management Services, Inc. (TMS) business.

Summarized financial information for our Discontinued Operations is as follows:



	Three Months Ended March 31,
	2015								2014
	ITO			Other		Total			ITO			Other			Total
Revenues	$	311		$	—	$	311		$	328		$	22		$	350
Income (loss) from operations ⁽¹⁾⁽²⁾	61			—		61			21			(1		)	20
(Loss) gain on disposal	(4		)	—		(4		)	—			2			2
Net income before income taxes	$	57		$	—	$	57		$	21		$	1		$	22
Income tax expense	(23		)	—		(23		)	(7		)	—			(7		)
Income from discontinued operations, net of tax	$	34		$	—	$	34		$	14		$	1		$	15

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(1)	ITO Income from operations for first quarter 2015 excludes approximately $39 of depreciation and amortization expenses (including $7 of Intangibles amortization) since the business is held for sale.


(2)	ITO Income from operations for first quarter 2014 includes intangible amortization and other expenses of approximately $8.

The following is a summary of the major categories of assets and liabilities of the ITO business held for sale at March 31, 2015 and December 31, 2014:



	March 31, 2015		December 31, 2014
Accounts receivable, net	$	219	$	213
Other current assets	190		146
Land, buildings and equipment, net	229		220
Intangible assets, net	197		197
Goodwill	337		337
Other long-term assets	152		147
Total Assets of Discontinued Operations	$	1,324	$	1,260

Current portion of long-term debt	$	29	$	31
Accounts payable	24		32
Accrued pension and benefit costs	8		9
Unearned income	68		64
Other current liabilities	103		112
Long-term debt	40		44
Pension and other benefit liabilities	22		25
Other long-term liabilities	59		54
Total Liabilities of Discontinued Operations	$	353	$	371