Divestitures

Information Technology Outsourcing (ITO)

In December 2014 we announced an agreement to sell the ITO business to Atos and began reporting it as a Discontinued Operation. All prior periods were accordingly revised to conform to this presentation. The sale was completed on June 30, 2015. The final sale price of approximately $940 ($930 net of cash sold) reflects closing adjustments, including an adjustment for changes in net asset values and additional proceeds for the condition of certain assets at the closing. Atos also assumed approximately $85 of capital lease obligations and pension liabilities. Net after-tax proceeds are estimated to be approximately $850, which reflects expected cash taxes as well as our transaction and transition costs associated with the disposal. The ITO business included approximately 9,600 employees in 42 countries, who were transferred to Atos upon closing.

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 2015, we recorded an additional net pre-tax loss of $77 ($5 in third quarter 2015) primarily related to adjustment of the sales price and related expenses associated with the disposal, as well as reserves for certain obligations and indemnifications we retained as part of the final closing negotiations. In addition, we recorded tax expense of $52 ($2 in third quarter 2015) primarily related to the difference between the book basis and tax basis of allocated goodwill, which could only be recorded upon final disposal of the business. The amounts recorded in third quarter 2015 primarily represent changes in estimates associated with post-closing adjustments.

The transaction continues to be subject to post-closing adjustments primarily related to a final true-up of net assets and other indemnification obligations. In the event there are additional charges associated with this disposal, we will record such amounts through discontinued operations in future periods.

Other Discontinued Operations

Other discontinued operations include 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 September 30,																	Nine Months Ended September 30,
	2015								2014									2015								2014
	ITO			Other		Total			ITO			Other			Total			ITO			Other		Total			ITO			Other			Total
Revenues	$	—		$	—	$	—		$	325		$	6		$	331		$	619		$	—	$	619		$	993		$	45		$	1,038
Income (loss) from operations ^{(1), (2)}	—			—		—			15			(1		)	14			104			—		104			58			(1		)	57
Loss on disposal	(5		)	—		(5		)	—			(1		)	(1		)	(77		)	—		(77		)	—			(1		)	(1		)
Net (loss) income before income taxes	$	(5	)	$	—	$	(5	)	$	15		$	(2	)	$	13		$	27		$	—	$	27		$	58		$	(2	)	$	56
Income tax benefit (expense)	2			—		2			(6		)	1			(5		)	(91		)	—		(91		)	(21		)	(1		)	(22		)
(Loss) income from discontinued operations, net of tax	$	(3	)	$	—	$	(3	)	$	9		$	(1	)	$	8		$	(64	)	$	—	$	(64	)	$	37		$	(3	)	$	34

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(1)	ITO Income from operations for the nine months ended September 30, 2015, excludes approximately $80 of depreciation and amortization expenses (including $14 for intangible amortization) since the business was held for sale.


(2)	ITO Income from operations for the three and nine months ended September 30, 2014, includes approximately $41 and $121, respectively, of depreciation and amortization expense (including intangible amortization of approximately $7 and $21, respectively).

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



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

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