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Stock-Based Compensation Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of Stock-based Compensation Expense, Tax Effect
Stock-based compensation expense was as follows:
 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
Stock-based compensation expense, pre-tax
 
$
57

 
$
52

 
$
50

Income tax benefit recognized in earnings
 
14

 
20

 
19
Schedule Of Share Based Payment Award Valuation Assumptions, Performance Shares, Market-Based Component Table
Market-Based Component: The TSR metric, included as part of the 2018 PS grant, was based on the percentage change in the Company’s stock price plus the dividends paid over the three-year measurement period. Payout for this portion of the PS was to be determined based on Xerox’s percentage change compared to the shareholder returns of the peer group of companies approved by the compensation committee of the Board (as disclosed in the 2018 annual proxy statement). Since the TSR portion of the PS award represents a market condition, a Monte Carlo simulation was used to determine the grant-date fair value. In conjunction with the Board’s approval to modify the performance-based metrics of the 2018 PS grant, the Board also approved a modification to the market-based metric of the award to a one-year performance period (2018), and a two-year time-based requirement (2019 and 2020). A summary of the key valuation input assumptions used in the Monte Carlo simulation relative to PS awards granted were as follows:
 
 
2018 Award
Term
 
3 years

Risk-free interest rate(1)
 
2.39
%
Dividend yield(2)
 
3.24
%
Xerox’s historical volatility(3)
 
29.12
%
Weighted average fair value(4)
 
$
32.01

____________
(1)
The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve from the valuation date, with a maturity matched to the TSR performance period.
(2)
The dividend yield was calculated as the expected quarterly dividend divided by Xerox’s three-month average stock price as of the valuation date.
(3)
Xerox’s historical volatility is calculated from daily stock returns over a three-year look-back term from the valuation date.
(4)
The weighted average of fair values used to record compensation expense as determined by the Monte Carlo simulation.
TSR Payout as a Percentage, Comparison to Peer Group
Our TSR compared to the peer group TSR will determine the payout as follows:
Percentile
 
Payout as a Percent of Target(1)
80th and above
 
200
%
50th
 
100
%
25th
 
35
%
Below 25th
 
0
%
____________
(1)
For performance between the levels described above, the degree of vesting is interpolated on a linear basis.
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions
The weighted average assumptions used in the BS option-pricing model relative to SO awards were as follows:
 
 
2018 Award
Expected term(1)
 
6.13 years

Expected volatility(2)
 
27.25
%
Expected dividend yield(3)
 
3.25
%
Risk-free interest rate(4)
 
2.63
%
Weighted average fair value(5)
 
$
5.71

____________
(1)
Since these SO grants are effectively part of a new program, the expected term was calculated using the "Simplified Method” under the SEC guidance based on the SOs vesting schedule and contractual term. We did not have sufficient historical exercise data to provide a reasonable basis to estimate an expected term.
(2)
The expected volatility was calculated based on a combination of Xerox's term-matched historical volatility and implied volatility from traded options.
(3)
The dividend yield was calculated as the expected quarterly dividend divided by Xerox’s three-month average stock price as of the grant date.
(4)
The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve with a maturity matched to the expected term of the SOs.
(5)
The weighted average of fair values used to record compensation expense as determined by the BS option-pricing model.
Schedule of Share-based Compensation Arrangements by Share-based Payment Award
Summary of Stock-based Compensation Activity
 
 
2018
 
2017
 
2016
 
 
Shares
 
Weighted Average Grant Date Fair Value(2)
 
Shares
 
Weighted Average Grant Date Fair Value
 
Shares
 
Weighted Average Grant Date Fair Value(2)
Restricted Stock Units(1)
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1
 
2,856

 
$
30.65

 
1,807

 
$
30.10

 
598

 
$
44.20

Granted
 
1,595

 
27.82

 
1,436

 
31.39

 
1,793

 
38.28

Vested
 
(214
)
 
30.39

 
(117
)
 
36.99

 
(79
)
 
38.48

Cancelled
 
(678
)
 
30.04

 
(270
)
 
29.03

 
(137
)
 
40.48

Separation of Conduent
 
—

 
—

 
—

 
—

 
(786
)
 
40.28

Shares granted in equity conversion
 
—

 
—

 
—

 
—

 
418

 
30.10

Outstanding at December 31
 
3,559

 
29.51

 
2,856

 
30.65

 
1,807

 
30.10

 
 
 
 
 
 
 
 
 
 
 
 
 
Performance Shares
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1
 
3,117

 
$
31.54

 
5,054

 
$
33.98

 
5,802

 
$
46.68

Granted
 
1,060

 
27.36

 
1,349

 
32.80

 
1,320

 
37.40

Vested
 
(853
)
 
32.59

 
(1,413
)
 
37.44

 
(8
)
 
45.32

Cancelled
 
(862
)
 
30.26

 
(1,873
)
 
34.59

 
(1,234
)
 
47.36

Separation of Conduent
 
—

 
—

 
—

 
—

 
(1,974
)
 
44.36

Shares granted in equity conversion
 
—

 
—

 
—

 
—

 
1,148

 
33.98

Outstanding at December 31
 
2,462

 
29.83

 
3,117

 
31.54

 
5,054

 
33.98

 
 
 
 
 
 
 
 
 
 
 
 
 
Stock Options
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1
 
—

 
$
—

 
—

 
$
—

 
780

 
$
27.48

Granted
 
1,414

 
27.88

 
—

 
—

 
—

 
—

Canceled/expired
 
(392
)
 
27.98

 
—

 
—

 
(98
)
 
27.96

Exercised
 
—

 
—

 
—

 
—

 
(306
)
 
28.12

Separation of Conduent
 
—

 
—

 
—

 
—

 
(376
)
 
26.80

Outstanding at December 31
 
1,022

 
27.84

 
—

 
—

 
—

 
—

Exercisable at December 31
 
39

 
27.98

 
—

 
—

 
—

 
—

____________
(1)
Includes a Restricted Stock Award (RSA) of 351 shares with a corresponding grant date fair value of $28.51.
(2)
Exercise price for stock options.
Schedule of Unrecognized Compensation Cost, Nonvested Awards
Unrecognized compensation cost related to non-vested stock-based awards at December 31, 2018 was as follows:
Awards
 
Unrecognized Compensation
 
Remaining Weighted-Average Vesting Period (Years)
Restricted Stock Units(1)
 
$
37

 
1.7
Performance Shares
 
29

 
1.8
Stock Options
 
4

 
2.3
Total
 
$
70

 
 
Schedule of Aggregate intrinsic value restricted stock and performance shares compensation awards
The aggregate intrinsic value of outstanding RSU and PS awards was as follows:
Awards
 
December 31, 2018
Restricted Stock Units(1)
 
$
70

Performance Shares
 
49

____________
(1)
Includes a RSA of 351 shares with a corresponding grant date fair value of $28.51.
Schedule of Vested and exercised stock based awards total intrinsic value and tax benefit realized
The intrinsic value and actual tax benefit realized for all vested and exercised stock-based awards was as follows:
 
 
December 31, 2018
 
December 31, 2017
 
December 31, 2016
Awards
 
Total Intrinsic Value
 
Cash Received
 
Tax Benefit
 
Total Intrinsic Value
 
Cash Received
 
Tax Benefit
 
Total Intrinsic Value
 
Cash Received
 
Tax Benefit
Restricted Stock Units
 
$
6

 
$
—

 
$
2

 
$
3

 
$
—

 
$
1

 
$
3

 
$
—

 
$
1

Performance Shares
 
21

 
—

 
4

 
40

 
—

 
12

 
—

 
—

 
—

Stock Options
 
—

 
—

 
—

 
—

 
—

 
—

 
3

 
9

 
1