Segment Reporting

12 Months Ended

Dec. 31, 2015

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 the delivery of business process and document outsourcing services for a broad range of customers from small businesses to large global enterprises. 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 two outsourcing service offerings:

• Business Process Outsourcing (BPO)

• Document Outsourcing (which includes Managed Print Services) (DO)

Business process outsourcing services include service arrangements where we manage a customer's business activity or process. We provide multi-industry offerings such as customer care, transaction processing, finance and accounting, and human resources, as well as industry focused offerings in areas such as healthcare, transportation, financial services, retail and telecommunications. 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.

Our Document Technology segment includes the sale of document systems and supplies, provision of technical service and financing of products. 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.

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.

Selected financial information for our reportable segments was as follows:

	Year Ended December 31,
	Services(2)		Document Technology		Other			Total
2015 (1)
Revenue	$	10,065	$	7,098	$	536		$	17,699
Finance income	72		267		7			346
Total Segment Revenue	$	10,137	$	7,365	$	543		$	18,045
Depreciation and amortization(3)	$	571	$	297	$	12		$	880
Interest expense	20		108		225			353
Segment profit (loss)	446		879		(267		)	1,058
Equity in net income of unconsolidated affiliates	27		108		—			135
2014 (1)
Revenue	$	10,519	$	8,044	$	590		$	19,153
Finance income	65		314		8			387
Total Segment Revenue	$	10,584	$	8,358	$	598		$	19,540
Depreciation and amortization(3)	$	602	$	334	$	14		$	950
Interest expense	18		121		238			377
Segment profit (loss)	956		1,149		(272		)	1,833
Equity in net income of unconsolidated affiliates	32		128		—			160
2013 (1)
Revenue	$	10,412	$	8,500	$	611		$	19,523
Finance income	67		408		8			483
Total Segment Revenue	$	10,479	$	8,908	$	619		$	20,006
Depreciation and amortization(3)	$	536	$	345	$	14		$	895
Interest expense	19		140		244			403
Segment profit (loss)	1,055		964		(217		)	1,802
Equity in net income of unconsolidated affiliates	34		135		—			169

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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) Services segment results for 2015 include a charge of $389 related to our Health Enterprise platform implementations in California and Montana. $116 of the charge was recorded as a reduction to revenues and the remainder of $273 was recorded to Cost of outsourcing, maintenance and rentals.

(3) Depreciation and amortization excludes amortization of intangible assets - see reconciliation below.

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

	Year Ended December 31,
Segment Profit Reconciliation to Pre-tax Income	2015			2014			2013
Total Segment Profit	$	1,058		$	1,833		$	1,802
Reconciling items:
Amortization of intangible assets	(310		)	(315		)	(305		)
Equity in net income of unconsolidated affiliates	(135		)	(160		)	(169		)
Restructuring and related costs(1)	(196		)	(149		)	(115		)
Restructuring charges of Fuji Xerox	(4		)	(3		)	(9		)
Litigation matters	—			—			37
Other	(1		)	—			2
Pre-tax Income	$	412		$	1,206		$	1,243

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(1) Restructuring and asset impairment charges were $186, $128, and $115 for the three years ended December 31, 2015, 2014 and 2013, respectively, and Business transformation costs were $10, $21 and $0, respectively. Business transformation costs represent incremental costs incurred directly in support of our business transformation and restructuring initiatives such as compensation costs for overlapping staff, consulting costs and training costs. Business transformation costs were not applicable in 2013.

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)
	2015		2014		2013		2015		2014		2013
United States	$	12,557	$	13,041	$	13,272	$	1,279	$	1,758	$	1,870
Europe	3,783		4,428		4,414		476		632		761
Other areas	1,705		2,071		2,320		234		240		243
Total Revenues and Long-Lived Assets	$	18,045	$	19,540	$	20,006	$	1,989	$	2,630	$	2,874

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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.