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Segment Information
 3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Segment Information Segment Information
The company has two business segments: Services and Technology. Revenue classifications within the Services and Technology segments are as follows:
•
Cloud & infrastructure services. This represents revenue from helping clients apply cloud and as-a-service delivery models to capitalize on business opportunities, make their end users more productive and manage and secure their IT infrastructure and operations more economically.
•
Application services. This represents revenue from helping clients transform their business processes by developing and managing new leading-edge applications for select industries, offering advanced data analytics and modernizing existing enterprise applications.
•
Business process outsourcing (BPO) services. This represents revenue from the management of critical processes and functions for clients in target industries, helping them improve performance and reduce costs.
•
Technology. This represents revenue from designing and developing software and offering hardware and other related products to help clients improve security and flexibility, reduce costs and improve the efficiency of their data-center environments.
The accounting policies of each business segment are the same as those followed by the company as a whole. Intersegment sales and transfers are priced as if the sales or transfers were to third parties. Accordingly, the Technology segment records intersegment revenue and manufacturing profit on hardware and software shipments to customers under Services contracts. The Services segment, in turn, records customer revenue and marketing profits on such shipments of company hardware and software to customers. The Services segment also includes the sale of hardware and software products sourced from third parties that are sold to customers through the company’s Services channels. In the company’s consolidated statements of income, the manufacturing costs of products sourced from the Technology segment and sold to Services customers are reported in cost of revenue for Services.
Also included in the Technology segment’s sales and operating profit are sales of hardware and software sold to the Services segment for internal use in Services engagements. The amount of such profit included in operating income of the Technology segment for the three months ended March 31, 2020 and 2019 was zero and $0.2 million, respectively. The sales and profit on these transactions are eliminated in Corporate.
The company evaluates business segment performance based on operating income exclusive of the service cost component of postretirement income or expense, restructuring charges and unusual and nonrecurring items, which are included in Corporate. All other corporate and centrally incurred costs are allocated to the business segments based principally on revenue, employees, square footage or usage.
A summary of the company’s operations by business segment for the three month periods ended March 31, 2020 and 2019 is presented below:
 
 
Total
 
Corporate
 
Services
 
Technology
Three Months Ended March 31, 2020
 
 
 
 
 
 
 
 
Customer revenue
 
$
515.4

 
$
—

 
$
425.9

 
$
89.5

Intersegment
 
—

 
(2.5
)
 
—

 
2.5

Total revenue
 
$
515.4

 
$
(2.5
)
 
$
425.9

 
$
92.0

Operating income (loss)
 
$
20.1

 
$
(8.1
)
 
$
(14.0
)
 
$
42.2

 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2019
 
 
 
 
 
 
 
 
Customer revenue
 
$
554.5

 
$
—

 
$
474.0

 
$
80.5

Intersegment
 
—

 
(2.4
)
 
—

 
2.4

Total revenue
 
$
554.5

 
$
(2.4
)
 
$
474.0

 
$
82.9

Operating income (loss)
 
$
25.2

 
$
(1.7
)
 
$
(1.4
)
 
$
28.3


Presented below is a reconciliation of total business segment operating income to consolidated loss from continuing operations before income taxes:
 
 
Three Months Ended
March 31,
 
 
2020
 
2019
Total segment operating income
 
$
28.2

 
$
26.9

Interest expense
 
(13.9
)
 
(15.5
)
Other income (expense), net
 
(48.1
)
 
(30.4
)
Cost-reduction charges
 
(8.5
)
 
(2.6
)
Corporate and eliminations
 
0.4

 
0.9

Total loss from continuing operations before income taxes
 
$
(41.9
)
 
$
(20.7
)

Customer revenue by classes of similar products or services, by segment, is presented below:
 
 
Three Months Ended
March 31,
 
 
2020
 
2019
Services
 
 
 
 
Cloud & infrastructure services
 
$
295.2

 
$
321.7

Application services
 
85.1

 
90.5

Business process outsourcing services
 
45.6

 
61.8

 
 
425.9

 
474.0

Technology
 
89.5

 
80.5

Total
 
$
515.4

 
$
554.5


Geographic information about the company’s revenue, which is principally based on location of the selling organization, is presented below:
 
 
Three Months Ended
March 31,
 
 
2020
 
2019
United States
 
$
215.6

 
$
191.4

United Kingdom
 
64.5

 
95.3

Other foreign
 
235.3

 
267.8

Total
 
$
515.4

 
$
554.5