XML 18 R8.htm IDEA: XBRL DOCUMENT v3.5.0.2
Segment Reporting
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
Our reportable segments correspond to how we organize and manage the business and are aligned to the industries in which our clients operate. All of our segments involve the delivery of business process services and include service arrangements where we manage a customer's business activity or process. We report our financial performance based on the following three primary reportable segments:
•
Commercial Industries
•
Healthcare
•
Public Sector
Commercial Industries: Our Commercial Industries segment provides business process services and customized solutions to clients in a variety of industries (other than healthcare). Across the Commercial Industries segment, we deliver end-to-end business-to-business and business-to-customer services that enable our clients to optimize their key processes. Our multi-industry competencies include customer care, human resource management and finance and accounting services. These services are complemented by innovative industry-specific services such as personalized product information for the automotive industry; digitized source-to-pay solutions for clients in the manufacturing industry; customer experience and marketing services for clients in the retail industry; mortgage and consumer loan processing for clients in the financial services industry and customized workforce learning solutions for clients in the aerospace industry.
Healthcare: Our Healthcare segment provides industry-centric business process services to clients across the healthcare industry, including providers, payers, employers, pharmaceutical and life science companies and government agencies. Through this segment we offer innovative services and subject matter expertise to clients. We strive to enable our healthcare clients to focus on improving the patient care experience, lowering total costs and enabling better long-term health outcomes.
Public Sector: Our Public Sector segment provides government-centric business process services to U.S. federal, state and local and foreign governments for transportation, public assistance, program administration, transaction processing and payment services.
Other: Other includes our Government Health Enterprise Medicaid Platform business, where we are limiting our focus to implementing and maintaining systems for our current Health Enterprise clients, and our Student Loan business, which is in run-off. Other also includes non-allocated corporate expenses as well as inter-segment eliminations.
Selected financial information for our reportable segments is as follows:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
Segment
Revenue
 
Segment Profit (Loss)
 
Segment
Revenue
 
Segment Profit(Loss)
2016
 
 
 
 
 
 
 
Commercial Industries
$
664

 
$
21

 
$
2,030

 
$
44

Healthcare
397

 
38

 
1,277

 
112

Public Sector
443

 
59

 
1,290

 
163

Other
92

 
(21
)
 
297

 
(74
)
Total
$
1,596

 
$
97

 
$
4,894

 
$
245

2015
 
 
 
 
 
 
 
Commercial Industries
$
720

 
$
14

 
$
2,161

 
$
51

Healthcare
422

 
32

 
1,293

 
113

Public Sector
429

 
51

 
1,283

 
145

Other (1)
—

 
(390
)
 
195

 
(469
)
Total
$
1,571

 
$
(293
)
 
$
4,932

 
$
(160
)

__________________________
(1)
Other includes a pre-tax charge of $389 associated with our third quarter 2015 decision to not fully complete the Health Enterprise implementations in California and Montana. The charge included a $116 reduction to revenues and $273 recorded to cost of outsourcing.
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
Reconciliation to Pre-tax Income (Loss)
2016
 
2015
 
2016
 
2015
Segment Profit (Loss)
$
97

 
$
(293
)
 
$
245

 
$
(160
)
Reconciling items:
 
 
 
 
 
 
 
Amortization of intangible assets
(63
)
 
(62
)
 
(200
)
 
(187
)
Restructuring and related costs
(8
)
 
(9
)
 
(57
)
 
(160
)
Business transformation costs(1)
—

 
—

 
—

 
(3
)
Related party interest
(10
)
 
(14
)
 
(30
)
 
(50
)
Separation costs(2)
(15
)
 
—

 
(34
)
 
—

Other
1

 
(12
)
 
(10
)
 
(22
)
Pre-tax Profit (Loss)
$
2

 
$
(390
)
 
$
(86
)
 
$
(582
)

__________________________
(1)
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.
(2)
Separation costs are expenses incurred in connection with Xerox's planned separation into two independent, publicly-traded companies. These costs are primarily for third-party investment banking, accounting, legal, consulting and other similar types of services related to the separation transaction as well as costs associated with the operational separation of the two companies, such as those related to human resources, brand management, real estate and information management to the extent not capitalized. Refer to Note 1 - Basis of Presentation for additional information regarding Xerox's planned separation.